CIVITAS RESOURCES, INC. appointed new CEO

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. 


On May 2, 2022, Civitas Resources, Inc. (the "Company") announced M. Christopher Doyle as the new President and Chief Executive Officer of the Company, effective immediately, reporting to the Board of Directors of the Company (the "Board"). He will succeed Benjamin Dell, who has served as the Company's Interim Chief Executive Officer since January 31, 2022.


Mr. Doyle, age 49, joins the Company from Primexx Energy Partners, Ltd. ("Primexx"), a privately-held, independent oil and gas company operating in the Southern Delaware Basin where he served as President and Chief Executive Officer beginning in September 2020. Prior to joining Primexx, Mr. Doyle was President and Chief Executive Officer of Olympus Energy LLC ("Olympus"), a privately-held energy company specializing in upstream and midstream development in the Appalachian Basin from April 2016 until September 2020. Mr. Doyle has previously served on the boards of Guidon Energy LLC, Primexx and Olympus. Additionally, Mr. Doyle has held various leadership roles at Anadarko Petroleum Corporation and Chesapeake Energy Corporation. He holds a Bachelor of Science in Petroleum Engineering from Texas A&M University and a Master of Business Administration from Rice University.


In connection with his appointment, the Company and Mr. Doyle have entered into an employment letter (the "Employment Letter") providing the following compensation terms: (i) an annualized base salary of $1,300,000 per year; (ii) eligibility to participate in the Company's 2021 Long Term Incentive Program ("LTIP") with a target award equal to $5,600,000 per year, with the number of shares of the Company's common stock subject to Mr. Doyle's 2022 LTIP awards equal to the quotient of (a) $5,600,000 divided by (b) the volume-weighted average price of the Company's common stock for the 30 trading days immediately preceding May 2, 2022 (the "Grant Date"), which will consist of: (1) 25% of the total target value in Restricted Stock Units ("RSUs"), subject to three-year ratable time vesting from the Grant Date; (2) 50% of total target value in Performance Share Units ("PSUs") based on the Company's absolute total shareholder return relative to pre-established goals during a measurement period of November 1, 2021 to December 31, 2024; and (3) 25% of total target value in PSUs based on the Company's relative total shareholder return versus a selected comparator group of companies during the measurement period November 1, 2021 to December 31, 2024; (iii) a one-time grant of RSUs equal in number to the quotient of (a) $2,000,000 divided by (b) the volume-weighted average price of the Company's common stock for the 30 trading days immediately preceding the Grant Date, which RSUs will vest ratably over three years and are granted in consideration of Mr. Doyle's commitment to purchase, subject to compliance with applicable law and the Company's policies and procedures, an aggregate of $2,000,000 of the Company's common stock in open market transactions by September 15, 2022; (iv) participation in the Company's Executive Change in Control and Severance Plan (the "Severance Plan") as a Tier 1 Executive (as such term is defined in the Severance Plan); and (v) reimbursement of customary substantiated relocation expenses of up to $200,000. The RSUs and PSUs described above will be subject to the terms and conditions of awards agreements that are substantially consistent with the awards agreement issued to the other executive officers of the Company in respect of the RSUs and PSUs issued in 2022. Mr. Doyle is also eligible to participate in the Company's employee benefit plans as in effect from time-to-time on the same basis as generally made available to other senior executives of the Company.


As a Tier 1 Executive under the Severance Plan, upon the termination of Mr. Doyle's employment without Cause (as defined in the Severance Plan) or due to his resignation for Good Reason (as defined in the Severance Plan) (a "Qualifying Termination"), he will be eligible to receive (i) a cash severance payment equal to 2.0x of his then-current base salary, paid in equal monthly installments over a 24-month period following his termination and (ii) reimbursement for the cost of any COBRA premiums incurred by him during the 24-month period following his termination. If a Qualifying Termination occurs within 12 months following a Change in Control (as defined in the Severance Plan), he will be eligible to receive (i) a lump sum cash severance payment equal to 3.0x of his then current base salary and (ii) reimbursement for the cost of any COBRA premiums incurred by him during the 24 months following his termination.


The description of the Employment Letter is qualified in its entirety by the terms of the Employment Letter, a copy of which is attached as Exhibit 10.1 and incorporated by reference herein, Additionally, the description of the Severance Plan is qualified in its entirety by the terms of the Severance Plan, a copy of which was previously filed with the Securities & Exchange Commission on January 25, 2022 as Exhibit 10.1 to the Company's Current Report on Form 8-K and is incorporated by reference herein.


In connection with his appointment, the Company will enter into its standard form of indemnity agreement with Mr. Doyle, a copy of which is attached as Exhibit 10.2 and incorporated by reference herein, and has entered into its standard form of Employee Restrictive Covenants, Proprietary Information and Inventions Agreement with Mr. Doyle, a copy of which is attached as Exhibit 10.3 and incorporated by reference herein.