Jones Energy,Inc. (NYSE:JONE) Files An 8-K Unregistered Sales of Equity SecuritiesItem 3.02 Unregistered Sales of Equity Securities.
The disclosure in Item 5.02 of this Current Report on Form8-K regarding the inducement award (as hereinafter defined) is incorporated by reference into this Item 3.02. The inducement award is exempt from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section4(a)(2)thereof and/or Regulation D promulgated thereunder.
Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.
On August8, 2018, following the approval of the Compensation Committee of its Board of Directors, Jones Energy,Inc. (the “Company”) and Carl F. Giesler,Jr., the Company’s new Chief Executive Officer, agreed to amend and restate the Employment Agreement (the “Original Agreement”) previously entered into between Jones Energy, LLC, a wholly owned subsidiary of the Company, and Mr.Giesler in order to revise certain terms of Mr.Giesler’s compensation. The Company made these changes to facilitate broader structural adjustments to its compensation program. The amended and restated Original Agreement (the “Restated Agreement”) will reflect the grant of the inducement award (as hereinafter defined), including the terms thereof described in this Current Report on Form8-K.
On August8, 2018, the Company made a grant (the “inducement award”) to Mr.Giesler, effective July23, 2018, which is the date Mr.Giesler commenced employment with the Company, of 3,000,000 Restricted Stock Units (“RSUs”), with each RSU representing one share of ClassA common stock of the Company, which will vest in equal one-third installments on July1, 2019, July1, 2020 and July1, 2021 subject to Mr.Giesler’s continued employment. The grant was offered by the Company as a material inducement to Mr.Giesler’s hiring as Chief Executive Officer outside the terms of the Company’s Amended and Restated 2013 Omnibus Incentive Plan (the “Plan”) or any other incentive plan and was approved by the Compensation Committee of the Company’s Board of Directors in reliance on the employment inducement exemption under the NYSE’s Listed Company Manual Rule303A.08.
In addition, the Restated Agreement will reflect the grant, which was made by the Company effective as of July23, 2018, of a compensatory cash award in an aggregate amount of $320,000, which will vest and be paid out in equal one-third installments on April1, 2019, October1, 2019 and April1, 2020. The cash award will be made to a cash award agreement under the Plan (the “Cash Award Agreement”).
The grant of 4,000,000 RSUs referred to in the Original Agreement prior to its amendment and restatement was modified to instead be comprised of the 3,000,000 RSUs and the compensatory cash award described in this Current Report on Form8-K.
The RSUs subject to the inducement award and the cash award will fully vest upon Mr.Giesler’s termination of employment prior to the final vesting date if (i)his termination is due to his death or disability, or (ii)if following a change in control (as defined in the award agreement relating to the RSUs or the Cash Award Agreement, as the case may be), his termination is by the Company without cause or by Mr.Giesler for good reason (as each of those terms are defined in the award agreement relating to the RSUs or the Cash Award Agreement, as the case may be).