Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
CEO Resignation
On
February 27
, 2018, J. Russell Porter, President, Chief Executive Officer and a director of Gastar Exploration Inc. (the “Company”), notified the Company of his resignation from all of his current roles with the Company effective immediately.
Mr. Porter will remain employed by the Company until March 31, 2018 to assist with transitional matters.
Mr. Porter’s resignation did not result from any disagreement with the Company regarding any matter related to the Company’s operations, policies or practices.
In connection with the departure, on February 26, 2018, Mr. Porter entered into a Separation and Release Agreement with the Company, whereby (i) Mr. Porter immediately resigned from all positions, offices and directorships with the Company and any affiliates or subsidiaries, (ii) Mr. Porter’s employment with the Company is terminated effective March 31, 2018 (the “Termination Date”); (iii) Mr. Porter agreed to enter into a release of claims (the “Release”) in favor of the Company no earlier than the Termination Date and no later than the 21
st
day following the Termination Date; (iv) subject to execution and delivery and continued effectiveness of the Release, a total of 2,583,298 shares of restricted stock held by Mr. Porter will vest; (v) subject to execution and delivery and continued effectiveness of the Release, Mr. Porter will receive $3,483,430 as a severance payment, which represents amounts he was entitled to receive pursuant to his employment agreement with the Company (including payment for accrued and unused vacation), plus a supplemental amount as consideration for his willingness to make himself available in a consulting capacity for a period of time following his separation; (vi) additional services as a consultant following the Termination Date will be paid to Mr. Porter at an hourly rate; (vii) the Company will reimburse (or pay on his behalf) Mr. Porter’s COBRA insurance premiums through the eighteenth month anniversary of the termination, in accordance with the terms of his employment agreement with the Company; and (viii) Mr. Porter will remain subject to certain noncompetition, noninterference and nonsolicitation covenants.
The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the Separation and Release Agreement of Mr. Porter, which is filed herewith as Exhibit 10.1, and incorporated by reference herein in its entirety.
Appointment of Interim Executive Officer
Effective February 27, 2018, Jerry R. Schuyler, the Chairman of the Board of the Company, will serve as interim Chief Executive Officer of the Company. During his service as interim Chief Executive Officer, Mr. Schuyler will continue to serve as Chairman of the Board.
Mr. Schuyler, age 62, is a seasoned executive with over 30 years of operations and management experience. Mr. Schuyler joined the Company as a director in August 2014 and was appointed Chairman of the Board in November 2015. Mr. Schuyler previously served as a director and as Chief Operating Officer of Laredo Petroleum, Inc. where he was promoted to President, serving in those capacities until July 2013 when he announced his retirement.
During his service at the Company, Mr. Schuyler will continue to serve as a member of the Board. In connection with his appointment as interim Chief Executive Officer of the Company, the Company entered into an employment agreement with Mr. Schuyler (the “Interim CEO Employment Agreement”). Under the Interim CEO Employment Agreement, the Company will pay Mr. Schuyler an annual salary of $413,916, Mr. Schuyler will have the opportunity to earn an annual bonus with a target value equal to 100% of his salary, will be eligible to receive equity-based awards as determined by the Compensation Committee of the Company and will receive other benefits as set forth in the Interim CEO Employment Agreement.
This summary is qualified in its entirety by reference to the full text of the Interim CEO Employment Agree
ment, which is attached hereto as Exhibit
10.2
and incorporated by reference herein in its entirety.