Item 5. Other Information
ITEM 5. OTHER INFORMATION.
Effective as of November 1, 2023, Amplify Energy Corp. and Amplify Energy Services LLC entered into employment agreements (collectively, the “Employment Agreements”) with each of Eric Dulany, James Frew, Daniel Furbee, Tony Lopez, Eric Willis and Martyn Willsher (each, an “Executive”, and collectively, the “Executives”). The Employment Agreements replace and supersede any prior agreements related to the Executives’ employment, including the prior employment agreements entered into with each Executive.
Pursuant to the Employment Agreements, Mr. Dulany will serve as Vice President and Chief Accounting Officer, Mr. Frew will serve as Senior Vice President and Chief Financial Officer, Mr. Furbee will serve as Senior Vice President and Chief Operating Officer, Mr. Lopez will serve as Senior Vice President Engineering and Exploitation, Mr. Willis will serve as Senior Vice President, General Counsel and Corporate Secretary, and Mr. Willsher will serve as President and Chief Executive Officer. Each of the Executives, other than Messrs. Dulany and Mr. Willsher, will report to the Chief Executive Officer. Mr. Dulany will report to the Chief Financial Officer. Mr. Willsher will report to the Board.
The Employment Agreements provide for an annual base salary (the “Base Salary”) of $255,000 for Mr. Dulany, $364,000 for each of Messrs. Frew, Furbee, and Willis, $322,400 for Mr. Lopez, and $520,000 for Mr. Willsher. The Executives will be eligible for a discretionary annual cash bonus (the “Annual Bonus”) with a target equal to a percentage of the Base Salary (50% for Mr. Dulany, 70% for each of Messrs. Frew, Furbee, Lopez and Willis, and 100% for Mr. Willsher). Additionally, the Employment Agreements provide the Executives will be eligible to receive long-term incentive compensation as determined by the Board in its discretion.
The Employment Agreements provide for a Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) “best-net” cutback, which would cause an automatic reduction in any payments or benefits the Executives would receive that constitute parachute payments within the meaning of Section 280G of the Code, in the event such reduction would result in the Executives receiving greater payments and benefits on an after-tax basis.
Upon any termination of employment with the Company, each Executive will be entitled to: (i) accrued but unpaid then current Base Salary through the termination date; (ii) unreimbursed business expenses incurred through the termination date and (iii) payment of any amounts accrued and vested under any employee benefit plans or programs of the Company, and any payments or benefits required to be made or provided under applicable law (collectively, the “Accrued Amounts”).
If an Executive’s employment with the Company is terminated due to death or “disability” (as defined in the Employment Agreements), then in addition to the Accrued Amounts and subject to the Executive’s execution and non-revocation of a general release of claims and continued compliance with the restrictive covenants, as applicable, the Executive is entitled to: (i) any unpaid Annual Bonus with respect to the calendar year ending on or preceding the termination date, in an amount equal to the Annual Bonus amount the Executive would have received (if any) had the Executive been employed on the payment date (the “Prior Year Bonus”), payable at the same time annual bonuses for such year are paid to actively-employed senior executives of the Company; and (ii) a pro rata portion of the target Annual Bonus for the calendar year in which the termination occurs (the “Pro Rata Bonus Amount”), payable within 70 days following the termination date.
In the event of a termination of the Executive’s employment with the Company without “cause” (as defined below) or for “good reason” (as defined below), then in addition to the Accrued Amounts and subject to the Executive’s execution and non-revocation of a general release of claims and continued compliance with the restrictive covenants, the Executive will be entitled to: (i) the Prior Year Bonus, if any; (ii) the Pro Rata Bonus Amount, if any; (iii) an amount equal to two times (one times, with respect to Mr. Dulany) the Executive’s annual Base Salary as in effect on the day before the termination date, payable in a lump sum within 70 days following the termination date and (iv) up to 12 months of continued health insurance benefits under the Company group health plan (at the employee rate), subject to the Executive’s continued eligibility for COBRA coverage and terminable if the Executive obtains other employment offering group health plan coverage.
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In the event of a termination of the Executive’s employment with the Company without “cause” or for “good reason” within the 18-month period following a Change of Control (as defined in the Employment Agreement), then in addition to the Accrued Amounts and subject to the Executive’s execution and non-revocation of a general release of claims and continued compliance with the restrictive covenants, the Executive will be entitled to: (i) the Prior Year Bonus, if any; (ii) the Pro Rata Bonus Amount, if any; (iii) an amount equal to two times (one times, with respect to Mr. Dulany) the sum of (x) the Executive’s annual Base Salary as in effect on the day before the termination date, and (y) the target Annual Bonus, payable in a lump sum within 70 days following the termination date and (iv) up to 12 months of continued health insurance benefits under the Company group health plan (at the employee rate), subject to the Executive’s continued eligibility for COBRA coverage and terminable if the Executive obtains other employment offering group health plan coverage.
For purposes of the Employment Agreements, the Company will have “cause” to terminate an Executive’s employment upon the occurrence of the Executive’s: (i) conviction of a felony, or plea of guilty or nolo contendere to, any felony or any crime of moral turpitude; (ii) repeated intoxication by alcohol or drugs during the performance of the Executive’s duties; (iii) embezzlement or other willful and intentional misuse of any of the funds of the Company or its direct or indirect subsidiaries; (iv) commission of a demonstrable act of fraud; (v) willful and material misrepresentation or concealment on any written reports submitted to the Company or its direct or indirect subsidiaries; (vi) material breach of the Employment Agreement or any other agreement with the Company; (vii) failure to follow or comply with the reasonable, material and lawful written directives of the Board or (viii) conduct constituting a material breach of the Company’s then-current code of conduct or other similar written policy which has been provided to the Executive.
For purposes of the Employment Agreement, the Executive will have “good reason” to terminate their employment with the Company upon the occurrence of any of the following without their written consent: (i) a relocation of the Executive’s principal work location to a location in excess of 40 miles from its then current location (provided that, a relocation shall not include: (A) the Executive’s travel for business in the course of performing the Executive’s duties for the Company, (B) the Executive working remotely or (C) the Company requiring the Executive to report to the office within the Executive’s principal place of employment (instead of working remotely)); (ii) a reduction in the Executive’s then current Base Salary or target Annual Bonus, or both; (iii) a material breach of any provision of the Employment Agreement by the Company or (iv) any material reduction in the Executive’s title, authority, duties, responsibilities or reporting relationship from those in effect as of the effective date of the Employment Agreement, except to the extent such reduction occurs in connection with the Executive’s termination of employment for “cause” or due to the Executive’s death or disability.
The Employment Agreements include a perpetual confidentiality covenant, a non-competition covenant that applies during employment and the 12-month period thereafter, non-solicitation and non-interference covenants that apply during employment and the 12-month period thereafter, and a mutual non-disparagement covenant.
The foregoing description of the Employment Agreements does not purport to be complete and is qualified in its entirety by reference to the Employment Agreements, which are each attached hereto as Exhibits 10.1 through 10.6.
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ITEM 6. EXHIBITS.
Exhibit
Number
Description
3.1
—
Second Amended and Restated Certificate of Incorporation of Midstates Petroleum Company, Inc. (filed as Exhibit 3.1 to the Company’s Registration Statement on Form 8-A filed on October 21, 2016, and incorporated herein by reference).
3.2
—
Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Midstates Petroleum Company, Inc., dated August 6, 2019 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 001-35512) filed on August 6, 2019).
3.3
—
Third Amended and Restated Bylaws of Amplify Energy Corp. (incorporated by reference to Exhibit 3.3 of the Company’s Quarterly Report on Form 10-Q (File No. 001-35512) filed on November 15, 2021).
10.1*
—
Employment Agreement, dated November 1, 2023, by and between Amplify Energy Corp., Amplify Energy Services LLC and Eric Dulany.
10.2*
—
Employment Agreement, dated November 1, 2023, by and between Amplify Energy Corp., Amplify Energy Services LLC and James Frew.
10.3*
—
Employment Agreement, dated November 1, 2023, by and between Amplify Energy Corp., Amplify Energy Services LLC and Daniel Furbee.
10.4*
—
Employment Agreement, dated November 1, 2023, by and between Amplify Energy Corp., Amplify Energy Services LLC and Tony Lopez.
10.5*
—
Employment Agreement, dated November 1, 2023, by and between Amplify Energy Corp., Amplify Energy Services LLC and Eric Willis.
10.6*
—
Employment Agreement, dated November 1, 2023, by and between Amplify Energy Corp., Amplify Energy Services LLC and Martyn Willsher.
31.1*
—
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
31.2*
—
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
32.1**
—
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*
—
Inline XBRL Instance Document
101.SCH*
—
Inline XBRL Schema Document
101.CAL*
—
Inline XBRL Calculation Linkbase Document
101.DEF*
—
Inline XBRL Definition Linkbase Document
101.LAB*
—
Inline XBRL Labels Linkbase Document
101.PRE*
—
Inline XBRL Presentation Linkbase Document
104*
—
Cover Page Interactive Data File (embedded within the Inline XBRL document)
*
Filed as an exhibit to this Quarterly Report on Form 10-Q.
**
Furnished as an exhibit to this Quarterly Report on Form 10-Q
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Amplify Energy Corp.
(Registrant)
Date:
November 6, 2023
By:
/s/ James Frew
Name:
James Frew
Title:
Senior Vice President and Chief Financial Officer
Date:
November 6, 2023
By:
/s/ Eric Dulany
Name:
Eric Dulany
Title:
Vice President and Chief Accounting Officer
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