| Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Executive Retention Program
On September 6, 2022, Brigham Minerals, Inc., a Delaware corporation (the “Company”) and Brigham Minerals Holdings, LLC, a Delaware limited liability company and subsidiary of the Company (“Opco LLC”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Sitio Royalties Corp., a Delaware corporation (“Sitio”), Sitio Royalties Operating Partnership, LP, a Delaware limited partnership and subsidiary of Sitio (“Opco LP”), Snapper Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of Sitio (“New Parent”), Snapper Merger Sub IV, Inc., a Delaware corporation and wholly owned subsidiary of New Parent (“Brigham Merger Sub”), Snapper Merger Sub V, Inc., a Delaware corporation and wholly owned subsidiary of New Parent (“Sitio Merger Sub”), and Snapper Merger Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of Opco LP (“Opco Merger Sub LLC”).
In connection with the negotiation of the Merger Agreement, the Board of Directors (the “Board”) of the Company reserved the right to establish a cash-based retention program for certain key employees (the “Retention Program”) to promote retention and incentivize efforts to consummate the closing of the transactions contemplated by the Merger Agreement (the “Merger”), which Retention Program was previously disclosed in the Definitive Proxy Statement on Schedule 14A relating to the Merger that was filed with the Securities Exchange Commission on November 23, 2022. On December 19, 2022, the Board adopted a form of retention agreement (the “Retention Agreement”) under the Retention Program, which the Board approved in recognition of the demonstrated work and commitment of the Company’s senior level employees and the significant benefits to the Company of retaining such senior level employees to continue assisting the Company through the consummation of the Merger.
Following the Board’s approval, the Company entered into Retention Agreements with each of the following executives (collectively, the “Executives”): (i) Mr. Ben M. “Bud” Brigham, Executive Chairman; (ii) Mr. Robert M. Roosa, Chief Executive Officer and Director; (iii) Mr. Blake C. Williams, Chief Financial Officer; and (iv) Ms. Kari A. Potts, Vice President, General Counsel, Compliance Officer and Secretary, which occurred on December 21, 2022 with respect to the Retention Agreements with Messrs. Brigham and Roosa and Ms. Potts and on December 22, 2022 with respect to the Retention Agreement with Mr. Williams.
Each Retention Agreement provides for a lump sum cash payment of a one-time retention bonus to the applicable Executive which will vest in connection with the closing of the Merger, in the following amounts: (i) $515,000 for Mr. Brigham; (ii) $2,140,000 for Mr. Roosa; (iii) $1,425,000 for Mr. Williams; and (iv) $1,224,000 for Ms. Potts. Such amounts, once vested, will be paid to the Executives as soon as practicable following the closing of the Merger. Further, the Retention Agreements with Mr. Williams and Ms. Potts also provide for monthly reimbursement for the cost of COBRA continuation coverage for a period of up to 18 months (or until the Executive begins to participate under another employer’s group health plan).
Each Retention Agreement includes a general release of claims in favor of the Company and its affiliates as a condition to payment of the retention bonus.
The foregoing description of the Retention Agreement does not purport to be complete and is qualified in its entirety by reference to the full terms and conditions of the Retention Agreement, a form of which is filed with this Form 8-K as Exhibit 10.1 and is incorporated in this Item 5.02 by reference.