Bonanza Creek Energy, Inc. (NYSE:BCEI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry Into a Material Definitive Agreement
Exit RBL Facility
to the Plan, holders of allowed claims on account of the RBL
Credit Facility received their pro rata share of an amended and
restated reserve-based revolving credit facility (the Exit RBL
Facility) entered into on the Effective Date in an aggregate
original commitment amount of approximately $191.7 million, of
which the entire amount is currently undrawn and available. The
Exit RBL Facility will mature on March 31, 2021. KeyBank National
Association (KeyBank) is acting as administrative agent (in such
capacity, the Administrative Agent) and as issuing lender
thereunder.
The initial borrowing base in respect of the Exit RBL Facility is
approximately $191.7 million and there are no scheduled borrowing
base redeterminations until April1, 2018 (the Borrowing Base
Holiday).
Borrowings under the Exit RBL Facility will bear interest at a
per annum rate equal to, at the option of Reorganized Bonanza
Creek, either (i) a London interbank offered rate, subject to a
0% LIBOR floor plus a margin of 3.00% to 4.00%, based on the
utilization of the Exit RBL Facility (the Eurodollar Rate) or
(ii)a fluctuating interest rate per annum equal to the rate of
interest publicly announced by KeyBank, as its reference rate
plus a margin of 2.00% to 3.00%, based on the utilization of the
Exit RBL Facility (the Reference Rate). Interest on borrowings
that bear interest at the Eurodollar Rate shall be payable on the
last day of the applicable interest period selected by
Reorganized Bonanza Creek, which shall be one, two, three or six
months, and interest on borrowings that bear interest at the
Reference Rate shall be payable quarterly in arrears commencing
on June 30, 2017.
The Exit RBL Facility is guaranteed by all wholly owned domestic
subsidiaries of Reorganized Bonanza Creek, and is secured by
first priority security interests on substantially all assets of
each Reorganized Debtor, subject to customary exceptions.
Reorganized Bonanza Creek has the right to prepay advances under
the Exit RBL Facility at any time and from time to time in whole
or in part without premium or penalty, upon written notice,
except that any prepayment of advances that bear interest at the
Eurodollar Rate other than at the end of the applicable interest
periods therefor shall be made with reimbursement for any funding
losses and redeployment costs of the lenders under the Exit RBL
Facility resulting therefrom.
The Exit RBL Facility contains customary representations and
affirmative covenants.
The Exit RBL Facility also contains customary negative covenants,
which, among other things, and subject to certain exceptions,
include restrictions on (i) liens, (ii) indebtedness, guarantees
and other obligations, (iii)restrictions in agreements on liens
and distributions, (iv) mergers or consolidations, (v) asset
sales, (vi)restricted payments, (vii)investments, (viii)
affiliate transactions, (ix) sale and leaseback transactions,
(x)change of business, (xi)foreign operations or subsidiaries,
(xii) name changes, (xiii) use of proceeds; letters of credit,
(xiv) gas imbalances, take-or-pay or other prepayments, (xv)
hedging transactions, (xvi) additional subsidiaries, (xvii)
changes in fiscal year or fiscal quarter, (xviii) operating
leases, (xix) prepayments of certain debt and other obligations,
(xx)environmental matters, (xxi) marketing activities and (xxii)
sales or discounts of receivables.
The Reorganized Debtors are subject to certain financial
covenants under the Exit RBL Facility, including, without
limitation, (i) beginning with the testing period ending
September 30, 2017 and tested on the last day of each fiscal
quarter, a maximum ratio of Reorganized Bonanza Creeks
consolidated indebtedness (subject to certain exclusions) to
adjusted EBITDAX of 3.50 to 1.00, (ii) beginning with the testing
period ending September 30, 2017 and tested on the last day of
each fiscal quarter, a minimum ratio of adjusted EBITDAX to
adjusted interest expense of 2.50 to 1.00 and (iii) beginning
with the fiscal quarter ending September 30, 2017 and tested on
the last day of each fiscal quarter, a minimum ratio of current
assets to current liabilities of 1.00 to 1.00. Additionally,
solely for the fiscal quarters ending September 30, 2017 and
December 31, 2017, Reorganized Bonanza Creek is subject to
minimum asset coverage ratio of 1.35 to 1.00; provided that a
violation of the asset coverage ratio shall not constitute an
event of default under the Exit RBL Facility, but shall instead
trigger the conclusion of the Borrowing Base Holiday and permit
the Administrative Agent and the holders of at least 66 2/3% of
the aggregate credit exposure under the Exit RBL Facility at such
time to redetermine the borrowing base.
The Exit RBL Facility contains customary events of default,
subject to customary thresholds and exceptions, including, among
other things, (i) non-payment of principal when due and
non-payment of interest and fees within three business days of
when due, (ii) a material inaccuracy of a representation or
warranty at the time made, (iii) a failure to comply with any
covenant, subject to customary grace periods in the case of
certain affirmative covenants, (iv) cross-events of default to
indebtedness of at least $5,000,000, (v) bankruptcy or insolvency
proceedings relating to Reorganized Bonanza Creek or any of its
subsidiaries, (vi) unpaid judgments in excess of $5,000,000,
(vii) ERISA events, (viii) a change of control or (ix) any
material provision of any loan document shall cease to be in full
force and effect or valid, binding, or enforceable.
The description of the Exit RBL Facility is qualified in its
entirety by reference to the full text of the Exit RBL Facility,
which is attached hereto as Exhibit 10.1 and incorporated by
reference herein.
Warrant Agreement
On the Effective Date, by operation of the Plan, Reorganized
Bonanza Creek entered into a Warrant Agreement (the Warrant
Agreement) with Broadridge Corporate Issuer Solutions, Inc.,
which provides for Reorganized Bonanza Creeks issuance of up to
an aggregate of 1,650,510 warrants to purchase New Common Stock
(as defined below) to former holders of Existing Equity Interests
(as defined in the Plan) on the Effective Date (the Warrants) in
accordance with the terms of the Plan, the Confirmation Order and
the Warrant Agreement.
The Warrants are exercisable from the date of issuance until 5:00
p.m., New York City time, on April 28, 2020. The Warrants are
initially exercisable for one share of the Companys common stock,
par value $0.01 per share (the New Common Stock), per Warrant at
an initial exercise price of $71.23 per Warrant (the Exercise
Price).
No Rights as Stockholders. to the Warrant Agreement, no
holder of a Warrant, by virtue of holding or having a beneficial
interest in a Warrant, will have the right to vote, to consent,
to receive dividends, to receive notice as stockholders with
respect to any meeting of stockholders for the election of
Reorganized Bonanza Creeks directors or any other matter, or to
exercise any rights whatsoever as Reorganized Bonanza Creeks
stockholders unless, until and only to the extent such holders
become holders of record of shares of New Common Stock issued
upon settlement of Warrants.
Adjustments. The number of shares of New Common Stock
for which a Warrant is exercisable, and the exercise price per
share of such Warrant, are subject to adjustment from time to
time upon the occurrence of certain events, including: (1) the
issuance of shares of New Common Stock as a dividend or
distribution to all or substantially all holders of shares of New
Common Stock, or a subdivision or combination of New Common
Stock; (2) the issuance
to all or substantially all holders of New Common Stock of
rights, options or warrants entitling them for a period expiring
45 calendar days or less from the date of announcement of such
issuance to purchase shares of New Common Stock at a price per
share that is less than the average of the Trading Day Closing
Sale Prices (as defined in the Warrant Agreement) of New Common
Stock for the ten consecutive Trading Day (as defined in the
Warrant Agreement) period ending on, and including, the Trading
Day immediately preceding the date of announcement of such
issuance; and (3) the issuance as a dividend or distribution to
all or substantially all holders of New Common Stock of (i)
shares of Reorganized Bonanza Creeks Capital Stock (as defined in
the Warrant Agreement) (other than New Common Stock), (ii)
evidences of Reorganized Bonanza Creeks indebtedness, (iii) other
assets or property of Reorganized Bonanza Creek, (iv) rights,
options or warrants to purchase Reorganized Bonanza Creeks
securities or (v) cash (excluding any dividend, distribution or
issuance covered by clauses (1) or (2) above or related to a
Reorganization (as defined below)).
Deemed Liquidation Event. All Warrants outstanding as of
the close of business on the Trading Day immediately preceding
the day on which a Deemed Liquidation Event (as defined in the
Warrant Agreement) occurs (the Automatic Exercise Time) shall be
deemed exercised upon the occurrence of such Deemed Liquidation
Event and settled as set forth in the Warrant Agreement. Each
person in whose name any shares of New Common Stock are issued as
a result of an automatic exercise triggered by a Deemed
Liquidation Event shall for all purposes be deemed to have become
the holder of record of such shares as of the Automatic Exercise
Time.
Reorganization Event. Upon the occurrence of (i) any
recapitalization, reclassification or change of the New Common
Stock (other than changes resulting from a subdivision or
combination), (ii) any consolidation, merger, combination or
similar transaction involving Reorganized Bonanza Creek, (iii)
any sale, lease or other transfer to a third party of the
consolidated assets of Reorganized Bonanza Creek and Reorganized
Bonanza Creeks subsidiaries substantially as an entirety, or (iv)
any statutory share exchange, other than a Deemed Liquidation
Event (a Reorganization), in each case, as a result of which the
New Common Stock would be converted into, or exchanged for,
stock, other securities or other property or assets, each holder
of Warrants will have the right to receive, upon exercise of a
Warrant, the kind and amount of shares of stock, other securities
or other property or assets (including cash or any combination
thereof) that a holder of a number of shares of New Common Stock
equal to the Net Share Amount (as defined below) immediately
prior to such Reorganization would have owned or been entitled to
receive in connection with such Reorganization.
Net Share Settlement. The Warrants will be net share
settled, meaning that a holder of Warrants shall be entitled to
exercise the Warrant such that no payment will be required in
connection with such exercise. Upon settlement, Reorganized
Bonanza Creek shall deliver, without any payment therefor, a
number of shares of New Common Stock (the Net Share Amount) equal
to (i)(a) the number of Warrants being exercised, multiplied by
(b) the Warrant Share Number (as defined in the Warrant
Agreement) as of the exercise date, multiplied by (ii)(a) the
Fair Market Value (as defined in the Warrant Agreement) of one
share of New Common Stock as of the exercise date, minus (b) the
Exercise Price as of the exercise date, divided by (iii) the Fair
Market Value of one share of New Common Stock as of the exercise
date.
This summary of the Warrant Agreement is qualified in its
entirety by reference to the full text of the Warrant Agreement,
which is attached hereto as Exhibit 10.2 and incorporated by
reference herein.
Item 1.02 Termination of a Material Definitive
Agreement
Equity Interests
On the Effective Date, in accordance with the Plan, each share of
the Companys common stock outstanding prior to the Effective
Date, including all options and warrants to purchase such common
stock, was cancelled.
Debt Securities and Credit Agreement
On the Effective Date, by operation of the Plan, all outstanding
obligations under the following notes issued by the Company
(collectively, the Unsecured Notes) were cancelled and
the indentures governing such obligations were cancelled, except
to the limited extent expressly set forth in the Plan:
% senior notes due 2023 issued in the aggregate principal amount
of $300,000,000 to that certain indenture dated July 18, 2014, by
and among Bonanza Creek, Delaware Trust Company, as
trustee (as successor to Wells Fargo Bank, National Association),
as the same may be amended, supplemented, revised or modified
from time to time;
% senior notes due 2021 issued in the aggregate principal amount
of $500,000,000 to that certain indenture, dated as of April 9,
2013, by and among Bonanza Creek, each of the guarantors party
thereto, Delaware Trust Company, as trustee (as successor to
Wells Fargo Bank, National Association), as the same may be
amended, supplemented, revised or modified from time to time;
On the Effective Date, as provided by the Plan, the following
credit agreement was amended and restated in its entirety:
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Credit Agreement dated as of March 29, 2011, as amended, restated, supplemented or otherwise modified from time to time, among Bonanza Creek, as borrower, KeyBank, as administrative agent, and the lenders party thereto. |
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant
The information regarding the Exit RBL Facility set forth in Item
1.01 of this Report is incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity
Securities
On the Effective Date, Reorganized Bonanza Creek issued an
aggregate of (i) 19,543,211 shares of New Common Stock to holders
of the Unsecured Notes and (ii) 803,083 shares of New Common
Stock to certain existing stockholders of Reorganized Bonanza
Creek as of the Effective Date. Additionally, Reorganized Bonanza
Creek issued an aggregate of 1,650,510 Warrants at an initial
exercise price of $71.23 (subject to adjustments to the terms of
the Warrants) to certain existing stockholders, in accordance
with the terms of the Plan, the Confirmation Order and the
Warrant Agreement.
Of the 20,346,294 shares of New Common Stock issued in the
Effective Date,
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9,471,833 shares of New Common Stock were issued pro rata to holders of the Unsecured Notes; |
|
446,788 shares of New Common Stock were issued pro rata to certain existing stockholders; |
|
9,501,300 shares of New Common Stock were issued to participants in the rights offering extended by the Company to holders of Unsecured Notes at a per share purchase price of $21.05, for an aggregate purchase price of approximately $200,002,365; |
|
570,078 shares of New Common Stock were issued to the certain supporting holders (the Backstop Parties) in exchange for the Backstop Parties commitment to purchase unsubscribed shares to that certain backstop commitment agreement entered into among the Company and the Backstop Parties; and |
|
356,295 shares of New Common Stock were issued to that certain equity commitment settlement agreement with members of that certain ad hoc committee of equity security holders formed in connection with the Chapter 11 Cases. |
On the Effective Date, Reorganized Bonanza Creek reserved an
additional (i) 1,650,510 shares of New Common Stock for issuance
upon the potential exercise of the Warrants, (ii) 2,467,430
shares of New Common Stock for issuance under the LTIP and (iii)
10,000 shares of New Common Stock in a disputed claims reserve
account.
The New Common Stock and the Warrants were issued to an exemption
from the registration requirements of the Securities Act of 1933,
as amended (the Securities Act) under Section1145 of the
Bankruptcy Code.
Item 3.03 Material Modifications to Rights of Security
Holders
The information set forth in the Explanatory Note and in Items
1.01, 1.02 and 3.02 of this Current Report on Form 8-K is
incorporated by reference herein.
Item 5.01 Changes in Control of Registrant
The information set forth in the Explanatory Note and in Items
1.01, 1.02, 3.02 and 5.02 of this Report is incorporated by
reference herein.
Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers
to the Plan, as of the Effective Date, the following directors
ceased to serve on the Companys board of directors: James A.
Watt, Kevin A. Neveu and Gregory P. Raih.
to the Plan, Reorganized Bonanza Creeks new board of directors,
consisting of the following persons, was appointed as of the
Effective Date:
1.Paul Keglevic
Paul Keglevic is a senior executive and trusted business advisor
with a strong track record of performance serving the utility
industry and two Big 5 accounting firms, with deep expertise in
finance and accounting, restructuring, risk management, shared
services, regulatory testimony, and process improvement. Mr.
Keglevic has been at Energy Future Holdings Corp. since 2008,
serving as Chief Executive Officer of TCEH since October 2016,
Chief Restructuring Officer since December 2013, Executive Vice
President, Chief Financial Officer from 2008 to September 2016,
President of EFH Corporate Services from 2010 to 2016 and Chief
Risk Officer from 2008 to 2016.
Prior to Energy Future Holdings Corp., Mr. Keglevic worked for
over 25 years at Arthur Andersen and for six years at
PricewaterhouseCoopers (PWC). Mr. Keglevic serves on the Board of
Directors of Energy Future Intermediate Holdings, EFIH Finance
Inc., Stellus Capital Management LLC and the Dallas Chamber of
Commerce (not-for-profit). Mr. Keglevic received a Bachelors
Degree in Accounting from Northern Illinois University.
2.Thomas B. Tyree, Jr.
Thomas B. Tyree, Jr. served as President, Chief Financial Officer
and Member of the Board of Managers of Vantage Energy from 2006
to 2016. Prior to Vantage Energy, Mr. Tyree served as Chief
Financial Officer of Bill Barrett Corporation, a Managing
Director in the Investment Banking Division at Goldman, Sachs Co.
and an Associate in the Corporate Finance division at Bankers
Trust Company. Mr. Tyree received his M.B.A. from The Wharton
School at the University of Pennsylvania and his B.A. at Colgate
University.
3.Jack E. Vaughn
Jack E. Vaughn is the Chairman and Chief Executive Officer of
Peak Exploration and Production, LLC, where he is responsible for
executive management of all operational activity, including
drilling, completion, and facility construction in all operating
areas, as well as all gas and crude oil transportation and
marketing, regulatory and environmental compliance activities.
Mr. Vaughn serves on the Board of Directors of Saddle Butte
Pipeline II, LLC and was the co-founder and a member of the Board
of Directors of Momentum Midstream, LLC from 2007 to 2011. In
addition, Mr. Vaughn has held several senior management positions
at energy companies in the United States, including Peak Energy
Resources, Inc., EnerVest Management Partners, LP and Emerald Gas
Operating Company. Mr. Vaughn received his B.S. Petroleum
Engineering from the University of Texas at Austin.
4.Scott D. Vogel
Scott D. Vogel was a Managing Director at Davidson Kempner
Capital Management investing in distressed debt securities from
2002 to 2016. Previously, Mr. Vogel worked at MFP Investors,
investing in special situations and turnaround opportunities.
Prior to MFP Investors, he was an investment banker at Chase
Securities. Mr. Vogel
received his M.B.A. from The Wharton School at the University of
Pennsylvania and his B.S.B.A. from Washington University.
Mr. Vogel serves on the Board of Directors of Key Energy
Services, Arch Coal and other companies, and previously on
numerous Board of Directors and ad hoc creditor and equity
committees throughout his career. Mr. Vogel is a member of the
Olin Alumni Board of Washington University, a member of the
Advisory Board of Grameen America, and a former member of New
Leadership Council of Make-A-Wish Foundation of Metro New York.
5.Jeffrey E. Wojahn
Mr. Wojahn served as Executive Vice President of EnCana
Corporation from 2003 to 2013, and was President of Encana Oil
Gas (USA) Inc. from 2006 to 2013. Beginning in 1985, Mr. Wojahn
held senior management and operational positions in Canada and
the United States and has extensive experience in unconventional
resource play development. He currently serves as a Strategic
Advisory Board member for Morgan Stanley Energy Partners.
6.Brian Steck
Brian Steck is a Partner, Senior Analyst at Mangrove Partners.
Mr. Steck joined Mangrove Partners in June 2011. Through early
2011, Mr. Steck managed The Laurel Capital Group, LLC, the
general partner of a hedge fund he founded in 2009. From 2006
until 2008, Mr. Steck was Head of US Equities at Tisbury Capital
where he built and managed a team focused on event- and
fundamentally-driven investment opportunities. From 2000 until
2005, Mr. Steck was a partner at K Capital where he focused on
European and U.S. opportunities that included special situations,
merger arbitrage, deep value and shareholder activism. Prior to K
Capital, Mr. Steck spent 10 years at UBS and its predecessors
Swiss Bank Corporation and OConnor Associates, where he focused
on equity derivative trading and risk management, built equity
derivative and event-driven client businesses and was Global
Co-Head of Equity Hedge Fund Coverage. Mr. Steck received a
Bachelors of Science, with highest honors, from University of
Illinois at Urbana Champaign.
7.Richard Carty
Mr. Carty was named President and Chief Executive Officer in
November, 2014. He has over 24 years of experience in global
capital markets and finance with investment management mandates
including energy, commodities, and engineering. He served as
Chairman of the Board of Directors of Bonanza Creek since
December 2010, when he led a major recapitalization of Bonanza
Creek on behalf of West Face Capital (USA) Corp, an affiliate of
West Face Capital, where he served as President from 2009 until
2013. Prior to that period, Mr. Carty was Managing Director of
Morgan Stanley Principal Strategies where he was responsible for
investing the banks capital in proprietary investment mandates in
public corporate securities and private securities. Mr. Carty led
investment teams that ran Morgan Stanleys value arbitrage
strategies, special situations investments, strategic private
investments, and global quantitative strategies. Prior to Mr.
Carty’s 14 years at Morgan Stanley, he was a partner at Gordon
Capital Corp, a Toronto-based investment and merchant bank, where
he worked for five years.
Committees of the Directors
The standing committees of the new board of directors will
consist of an Audit Committee, a Compensation Committee, a
Nominating and Corporate Governance Committee and an
Environmental, Health, Safety and Regulatory Compliance and
Reserves Committee.
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The Board has appointed Messrs. Keglevic, Tyree and Vogel as members of the Audit Committee. Mr. Keglevic has been appointed Chairman of the Audit Committee; |
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The Board has appointed Messrs. Vogel, Tyree and Wojahn as members of the Compensation Committee. Mr. Vogel has been appointed Chairman of the Compensation Committee; |
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The Board has appointed Messrs. Steck, Keglevic and Vaughn as members of the Nominating and Corporate Governance Committee. Mr. Steck has been appointed Chairman of the Nominating and Corporate Governance Committee; |
|
The Board has appointed Messrs. Wojahn, Carty and Steck as members of the Environmental, Health, Safety and Regulatory Compliance and Reserves Committee. Mr. Wojahn has been appointed Chairman of the Environmental, Health, Safety and Regulatory Compliance and Reserves Committee. |
Indemnification of Directors and Executive Officers
As of the Effective Date, Reorganized Bonanza Creek entered into
indemnification agreements with each of its directors and
executive officers. The indemnification agreements require
Reorganized Bonanza Creek to (i) indemnify these individuals to
the fullest extent permitted under Delaware law against
liabilities that may arise by reason of their service to
Reorganized Bonanza Creek, and (ii) advance expenses reasonably
incurred as a result of any proceeding against them as to which
they could be indemnified. Reorganized Bonanza Creek may enter
into indemnification agreements with any future directors or
executive officers.
Each indemnification agreement is in substantially the form
included herein as Exhibit 10.7 to this Report. The description
of the indemnification agreements is qualified in its entirety by
reference to the full text of the form of indemnification
agreement, which is incorporated by reference herein.
2017 Long Term Incentive Plan
On the Effective Date, to the operation of the Plan, the Bonanza
Creek Energy, Inc. 2017 Long Term Incentive Plan (the LTIP)
became effective.
Our employees and those of our subsidiaries, members of our board
who are not employees, and individuals who provide consulting,
advisory or other similar services to us or our subsidiaries are
eligible to receive awards under the LTIP.
The LTIP permits the grant of non-qualified stock options,
incentive stock options, stock appreciation rights, restricted
stock, unrestricted stock, stock units, dividend equivalent
rights, cash awards and other stock-based awards, any of which
may be further designated as performance awards
The LTIP will be administered by the board or a committee of the
board to its terms and all applicable state, federal or other
rules or laws, provided that such committee will consist of
outside directors with respect to awards intended to qualify as
performance-based compensation under Section162(m) of the
Internal Revenue Code of 1986, as amended.
The maximum number of New Common Stock available for issuance
under the LTIP is 2,467,430. If any award granted under the LTIP
is surrendered, forfeited, or otherwise lapses or expires, the
shares subject to such award will again be available for issuance
under the LTIP.
In the event of certain changes to our capitalization, such as a
stock split, stock combination, stock dividend, extraordinary
cash dividend, exchange of shares, or other recapitalization,
merger or otherwise, that result in an increase or decrease in
the number of outstanding shares of common stock, appropriate
adjustments will be made by the board as to the number and kind
of shares subject to an award granted under the LTIP and the
number of shares available for issuance under the LTIP.
In the event of a change in control (as defined in the LTIP),
each outstanding award will be deemed to have vested and will
become exercisable to the extent so provided in the applicable
award agreement; provided that the board may elect to accelerate
the vesting of, or cancel, or take any other action with respect
to any outstanding award as it deems appropriate in its sole
discretion. However, if the board elects to cancel any
outstanding stock-based award, the holder of such award will
receive, in consideration of such cancellation, an amount of cash
or marketable securities with a value that is not less than such
awards intrinsic value (as defined in the LTIP).
This summary of the LTIP is qualified in its entirety by
reference to the full text of the LTIP, which is attached hereto
as Exhibit 10.3 and incorporated by reference herein.
Emergence Awards
On the Effective Date, Reorganized Bonanza Creeks new board of
directors approved grants of awards (the Emergence Awards) of
restricted stock units (the RSUs) and non-qualified stock options
(the Options) with
respect to New Common Stock to Reorganized Bonanza Creeks
employees under the LTIP. The Emergence Awards are scheduled to
vest annually in three equal installments on each of the first
three anniversaries of the Effective Date. The Options have a per
share exercise price of $34.36. Reorganized Bonanza Creeks named
executive officers were granted Emergence Awards in the following
amounts:
| Named Executive Officer | Options | RSUs |
|
Richard J. Carty President and Chief Executive Officer |
137,814 | 137,814 |
|
Scott Fenoglio Senior Vice President, Finance and Planning |
24,382 | 24,382 |
|
Wade E. Jaques Vice President and Chief Accounting Officer |
7,209 | 7,209 |
|
Ramon Curt Moore Senior Vice President, Land |
24,382 | 24,382 |
Each of the named executive officers participates in Reorganized
Bonanza Creeks Third Amended and Restated Change in Control
Severance Plan (the CIC Severance Plan), to which the vesting of
the executives Emergence Awards will fully accelerate on
termination of his employment by Reorganized Bonanza Creek
without Cause, by him for Good Reason, or due to his death or
Disability (as such terms are defined in the CIC Severance Plan).
An aggregate of 69,975 shares available for issuance under the
LTIP are reserved for grants to a Chief Operating Officer, with
50% of such shares to be granted in the form of Options, and the
remaining 50% of such shares to be granted in the form of RSUs.
If at the first anniversary of the Effective Date Reorganized
Bonanza Creek has not hired a Chief Operating Officer, new grants
representing a value (as determined on such first anniversary)
equal to the value of the reserve for the Chief Operating Officer
(as determined on the Effective Date) will be made to all or any
portion of the employees of Reorganized Bonanza Creek as
determined by the Compensation Committee of the board of
directors, in its discretion. The new grants will be in the form
of Options and/or RSUs, in each case with one-half vesting at
each of the second and third anniversaries of the Effective Date.
The foregoing descriptions of the Emergence Awards are qualified
in their entirety by reference to the full text of the Form of
Restricted Stock Unit Agreement and the Form of Non-Qualified
Stock Option Agreement, which are filed as Exhibits 10.4 and
10.5, respectively, hereto, and in each case are incorporated by
reference herein.
Third Amended and Restated Change in Control and Severance
Plan
On the Effective Date, the Companys pre-emergence board of
directors approved the CIC Severance Plan, which in accordance
with the Plan amended the Companys Second Amended and Restated
Change in Control and Severance Plan to provide that:
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the restructuring transactions effected in connection with the Plan and any associated organizational changes that occurred prior to the Effective Date will not constitute a Change in Control (as defined in the CIC Severance Plan) or serve as a basis to trigger benefits under the CIC Severance Plan; and |
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the CIC Severance Plan may not be amended or modified in any manner that would impair vesting (including accelerated vesting) of the Emergence Grants. |
This summary of the CIC Severance Plan is qualified in its
entirety by reference to the full text of the CIC Severance Plan,
which is attached hereto as Exhibit 10.6 and incorporated by
reference herein.
Item 9.01 Exhibits.
(d)Exhibits
|
Exhibit No. |
Description |
| 2.1 |
Order Confirming Debtors Third Amended Joint Prepackaged Plan of Reorganization Under Chapter 11 of the Bankruptcy Code on April 7, 2017 (incorporated by reference to Exhibit 2.1 of the Companys Form 8-K filed on April 7, 2017). |
|
Exhibit No. |
Description |
| 2.2 |
Debtors Third Amended Joint Prepackaged Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (incorporated by reference to Exhibit 2.1 of the Companys Form 8-K filed on April 7, 2017). |
| 4.1* | Form of Warrant Certificate (included in Exhibit 10.2). |
| 10.1* |
Amended and Restated Credit Agreement dated as of April 28, 2017, among Bonanza Creek Energy, Inc., as borrower, the lenders party thereto and KeyBank National Association, as administrative agent and as issuing lender. |
| 10.2* |
Warrant Agreement dated as of April 28, 2017, among Bonanza Creek Energy, Inc. and Broadridge Investor Communication Solutions, Inc. as warrant agent. |
| 10.3* | Bonanza Creek Energy, Inc. 2017 Long Term Incentive Plan. |
| 10.4* |
Form of Restricted Stock Unit Agreement under the Bonanza |
| 10.5* |
Form of Non-Qualified Stock Option Agreement under the |
| 10.6* |
Bonanza Creek Energy, Inc. Third Amended and Restated |
| 10.7* |
Form of Indemnification Agreement between Bonanza Creek Energy, Inc. and the directors and executive officers of Bonanza Creek Energy, Inc. |
| * | Filed herewith. |
About Bonanza Creek Energy, Inc. (NYSE:BCEI)
Bonanza Creek Energy, Inc. (Bonanza Creek) is an independent energy company engaged in the acquisition, exploration, development and production of onshore oil and associated liquids-rich natural gas in the United States. The Company’s oil and liquids-weighted assets are concentrated primarily in the Wattenberg Field in Colorado and the Dorcheat Macedonia Field in southern Arkansas. In addition, the Company owns and operates oil-producing assets in the North Park Basin in Colorado and the McKamie Patton Field in southern Arkansas. The main areas in which the Company operates in the Rocky Mountain region are the Wattenberg Field in Weld County, Colorado and the North Park Basin in Jackson County, Colorado. Its Wattenberg Field operations are in the oil and liquids-weighted extension area of the Wattenberg Field targeting the Niobrara and Codell formations. In southern Arkansas, it targets the oil-rich Cotton Valley sands in the Dorcheat Macedonia and McKamie Patton Fields. Bonanza Creek Energy, Inc. (NYSE:BCEI) Recent Trading Information
Bonanza Creek Energy, Inc. (NYSE:BCEI) closed its last trading session down -0.275 at 0.505 with 11,761,536 shares trading hands.