California Resources Corp 10-Q

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds Share Repurchases Our Board of Directors has authorized a Share Repurchase Program to acquire up to $1.35 billion of our common stock through December 31, 2025. In July 2025, our Board of Directors authorized an extension of our Share Repurchase Program through June 30, 2026. The repurchases may be affected from time-to-time through open market purchases, privately negotiated transactions, Rule 10b5-1 plans, accelerated stock repurchases, derivative contracts or otherwise in compliance with Rule 10b-18, subject to market and contractual limitations in our debt agreements. The Share Repurchase Program does not obligate us to repurchase any dollar amount or number of shares and our Board of Directors may modify, suspend or discontinue authorization of the program at any time. Shares repurchased are either retired or held as treasury stock. Our share repurchase activity for the three months ended June 30, 2025 was as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (a) April 1, 2025 - April 30, 2025 — $ — — $ — May 1, 2025 - May 31, 2025 328,588 $ 42.59 328,588 — June 1, 2025 - June 30, 2025 5,187,462 $ 45.93 5,187,462 — Total 5,516,050 $ 45.73 5,516,050 $ — (a) The total value of shares that may yet be purchased under the Share Repurchase Program totaled $205 million as of June 30, 2025. Refer to Part I, Item 1 – Financial Statements, Note 10 Stockholders' Equity for more information on a repurchase of shares during the second quarter of 2025 from one of the former Aera owners. Item 5 Other Disclosures Rule 10b5-1 Trading Arrangements During the three months ended June 30, 2025, no directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K. 56 Employment Agreements The Company has entered into an Amended and Restated Employment Agreement (the “Employment Agreements”) with each of Messrs. Bys and Preston, effective as of August 4, 2025. The revised employment agreements will replace and supersede the prior employment agreements entered into by Messrs. Bys and Preston in 2021 (the “2021 Employment Agreements”). In addition to memorializing the applicable 2025 compensation arrangements previously approved by the Board for Messrs. Bys and Preston (described below), the revisions to the Employment Agreements reflect the alignment of the employment agreements and terms of the Company’s severance obligations with respect to Messrs. Bys and Preston with the Company’s other named executive officers. Pursuant to his Employment Agreement, Mr. Bys will receive an annual base salary of not less than $562,000. He will also be eligible to receive: (i) an annual cash bonus with a target value equal to 100% of his annual base salary; (ii) participation in those benefit plans and programs of the Company available to similarly situated executives; and (iii) annual long-term incentive awards (expected to be comprised 60% of performance stock units and 40% of restricted stock units) under the Company’s 2021 Long Term Incentive Plan (as amended, the “LTIP”) with a target grant value of 400% of base salary as in effect on the applicable grant date. Pursuant to his Employment Agreement, Mr. Preston will receive an annual base salary of not less than $675,000. He will also be eligible to receive: (i) an annual cash bonus with a target value equal to 100% of his annual base salary; (ii) participation in those benefit plans and programs of the Company available to similarly situated executives; and (iii) annual long-term incentive awards (expected to be comprised 60% of performance stock units and 40% of restricted stock units) under the LTIP with a target grant value of 400% of base salary as in effect on the applicable grant date. The revised Employment Agreements provide that upon either Messrs. Bys or Preston’s termination of employment by the Company without “Cause,” or by either individual for “Good Reason” (each quoted term as defined in the Employment Agreement), they will receive payment of any earned but unpaid annual bonus for the calendar year preceding the calendar year in which the applicable termination date occurs and, so long as they execute a release of claims in favor of the Company and its affiliates and abides by the restrictive covenants within the Employment Agreement, they shall receive severance payments, generally payable in monthly installments following the applicable termination date consisting of: (i) cash payments equal to a multiple of one and one-half (1.5) times, increased to two (2) times if such termination of employment occurs within the one (1)-year period following a qualifying Change in Control (such term as defined in our Long Term Incentive Plan) of annual base salary plus target annual bonus awards for the year in which the termination occurs; (ii) a pro-rata annual bonus for the calendar year in which the termination date occurs, based on actual performance levels earned for the applicable calendar year and payable at the time such bonuses are paid to similarly situated executives of the Company; and (iii) reimbursement for the difference between the amount they pay to effect continued coverage (including coverage for her spouse and eligible dependents) under the Company’s group health plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the contribution amount that similarly situated executives of the Company pay for the same or similar coverage under such group health plans, during the portion, if any, of the 18-month period following the Termination Date (or 24-month period in the event of a termination during the one (1)-year period following a qualifying Change in Control) that they elect to continue coverage. In all other material respects, the revised Employment Agreements are otherwise substantially similar to the 2021 Employment Agreements. The foregoing description of the Employment Agreements is qualified in its entirety by reference to the full and complete text of the Employment Agreements, each of which is filed herewith as Exhibit 10.1 and 10.2, respectively and incorporated herein by reference. 57 Item 6 Exhibits 3.1 Amended and Restated Certificate of Incorporation of California Resources Corporation (filed as Exhibit 3.1 to Registrant’s Registration Statement on Form 8-A filed October 27, 2020 and incorporated herein by reference). 3.2 Certificate of Amendment of Amended and Restated Certificate of Incorporation of California Resources Corporation (filed as Exhibit 3.1 to Registrant's Current Report on Form 8-K filed on May 6, 2022 and incorporated herein by reference). 3.3 Certificate of Amendment of Amended and Restated Certificate of Incorporation of California Resources Corporation (filed as Exhibit 3.1 to Registrant's Current Report on Form 8-K filed on May 1, 2023 and incorporated herein by reference). 3.4 Amended and Restated Bylaws of California Resources Corporation (filed as Exhibit 3.2 to the Registrant’s Registration Statement on Form 8-A filed October 27, 2020 and incorporated herein by reference). 10.1*,** A mended and Restated Employment Agreement by and betwee n Jay A . B ys and C alifornia Resources Co rporation, dated August 4, 2025 . 10.2*,** Amended and Restated Employment Agreement by and between Michael L. Preston and California Resources Corporation, dated August 4, 2025. 31.1* Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1* Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS* Inline XBRL Instance Document. 101.SCH* Inline XBRL Taxonomy Extension Schema Document. 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document. 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document. 104 Cover Page Interactive Data File (formatted in inline XBRL and contained in Exhibits 101). * - Filed or furnished herewith ** - Certain portions of this exhibit (indicated by "[*****]") have been omitted pursuant to Item 601(b)(10) of Regulation S-K. 58 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. CALIFORNIA RESOURCES CORPORATION DATE: August 6, 2025 /s/ Noelle M. Repetti Noelle M. Repetti Senior Vice President and Controller (Principal Accounting Officer) 59