employment agreements, all of which were entered into by the Board before the reforms instituted in July 2018, in effect as of December 31, 2019 between the Company and Messrs. Suter and
Johnson, the 401(k) retirement plan and the agreements governing equity and performance unit awards. As noted above, in February 2020, the Company and Mr. Suter entered into an at-will Letter Agreement
which replaced Mr. Suters legacy employment agreement. Please see Executive CompensationCompensation Discussion & AnalysisActions Related to 2020 Executive Compensation on page 23 for a more detailed
discussion of the Letter Agreement. The following discussion describes these arrangements with these named executive officers and provides reasonable estimates of the potential payments at December 31, 2019 under various termination scenarios.
Further, various additional agreements and arrangements governed actual payments made to named executive officers that departed from the Company during 2019,
including (i) the Interim CEO Employment Agreement between the Company and Mr. Griffin, (ii) the separation agreement between the Company and Mr. McKinney, which detailed material severance terms in connection with his departure
in December 2019 that were in lieu of those provided in the Offer Letter between him and the Company, and (iii) the separation agreement between the Company and Mr. Warman, which detailed material severance terms in connection with his
departure in July 2019 that were in lieu of the severance terms provided under the employment agreement between him and the Company. Please see 2019 Named Executive Officer Departures below for a more detailed discussion of these
arrangements and the payments made to departing named executive officers during 2019.
Employment Agreements with our Named Executive
Officers in Effect on December 31, 2019
TERMINATION WITHOUT CAUSE
Pursuant to the employment agreements in effect on December 31, 2019 (which were subsequently terminated via mutual agreement or which the Board announced plans to
terminate), the Company may terminate its employment arrangement with its named executive officers at any time without cause. Upon such a termination, the named executive officer is entitled to receive (i) a lump sum payment equal to twelve
months base salary in effect on the termination date, (ii) accelerated vesting of all unvested restricted stock and performance share units and (iii) accelerated vesting of all unvested performance share units, provided that the units
shall only be payable subject to the attainment of the performance measures for the applicable performance period as provided under the terms of the applicable award agreement
CHANGE IN CONTROL
Pursuant to the employment agreements in effect on
December 31, 2019, in the event that employment is terminated within two years of a Change in Control without cause, a named executive officer is entitled to receive a lump sum cash payment in an amount equal to a multiple of two times his base
salary and average annual bonus calculated based on the bonuses paid over the preceding three years. If the foregoing lump sum cash amount is not paid within sixty days after the termination in connection with a Change in Control event, the unpaid
amount will bear interest at a rate equal to 12% per annum.
In addition, pursuant to the employment agreements in effect on December 31, 2019, in the event of a
termination in connection with a Change in Control, all of the named executive officers units, stock options, incentive stock options, performance units, performance share units, stock appreciation rights and restricted stock (collectively,
awards) will vest. In such event, the named executive officer will be entitled to the conversion of performance share units at the target award quantity of 100%. Further, the executives right to exercise any previously
unexercised options will not terminate until the latest date on which such option would expire but for the executives termination. To the extent we are unable to provide for one or both of the foregoing rights, we will provide in lieu thereof
a lump-sum cash payment equal to the difference between the total value of such awards with the foregoing rights and the total value without the foregoing rights.
In
addition, the executive will be entitled to the above-described payments if, within two years of a Change in Control, he resigns for good reason which includes a material diminution in his authority, duties or responsibilities or a material
reduction in his then current base salary or other benefits set forth in his employment agreement.
Generally speaking, as used in the employment agreements, a Change
in Control occurs if (a) someone acquires 40% of more of our stock, (b) a majority of our directors is replaced, with certain exceptions, (c) SandRidge is not the surviving company following a business combination, unless our prior
stockholders own at least sixty percent of the combined entity, or (d) we sell or liquidate all our assets.
TERMINATION FOR CAUSE
Pursuant to the employment agreements in effect on December 31, 2019, if a named executive officer is terminated for cause, neither the Company nor the executive has
any further obligations except for those expressly surviving termination of employment. Generally speaking, as used in the employment agreements, cause means any of the following: a material breach of contract, substantial failure to perform,
willful disregard of instructions or material neglect of duties, misappropriation, fraudulent conduct, personal misconduct which could harm the company or its reputation, felony conviction or conviction for crimes of dishonesty.
VOLUNTARY TERMINATION BY EXECUTIVE/RETIREMENT
Pursuant to the employment
agreements in effect on December 31, 2019, if a named executive officer voluntarily terminates his employment, neither the Company nor the executive has any further obligations except for those expressly surviving termination of employment.
TERMINATION DUE TO DEATH OR DISABILITY
Pursuant to the employment
agreements in effect on December 31, 2019, if a named executive officer suffers from a continuous physical or mental condition for a period of six months that constitutes a disability under the Companys Long Term Disability
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