Item 5.02 - Departure of Directors or Principal Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
In accordance with Compensation Committee approval of March 20, 2020, on March
25, 2020, the Company paid each named executive officer his incentive
compensation award for the first quarter of 2020, at 52% of target, based on
achievement of the designated performance metrics for such quarter. Further
pursuant to such approval, the Compensation Committee, following extensive
consultation with the Company's legal and compensation advisors, replaced the
named executive officers' incentive compensation plan for the last three
quarters of 2020 with a retention bonus arrangement, as the unprecedented
economic environment (caused by the ongoing COVID-19 pandemic and the
precipitous decline in oil prices resulting from the world-wide oil price war
initiated by Russia and Saudi Arabia) made the use of traditional performance
metrics and the establishment of meaningful performance goals unviable. Under
the foregoing retention bonus arrangement, each of our named executive officers
was paid a retention bonus on March 25, 2020, in an amount equal to (i) 263% of
base salary for our President and Chief Executive Officer and (ii) 169% of base
salary for each of our other named executive officers. All of the named
executive officers received approximately 88% of what was originally their
target annual incentive compensation amount under the February 2020 awards.
Importantly, each named executive officer's retention bonus is subject to a
clawback, whereby he would have to repay a designated percentage of the
after-tax value of the retention bonus if he voluntarily resigns or is
terminated by the Company for "good cause" (as defined and described his
employment agreement) prior to June 30, 2021, determined as follows: (i) 100%,
if such termination occurs on or before December 31, 2020, and (ii) 50%, if such
termination occurs after December 31, 2020 but before June 30, 2021. The
retention bonus amounts, together with the clawback provisions, ensure the
stability and continuity of the key members of the management team during a
critical time for the Company.
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