CHAP Chaparral Energy Inc

PART III

Biographical Information:

Marcus C. Rowland joined Chaparral’s Board in April 2019. Mr. Rowland is the founder and currently senior managing director of IOG Capital, LP where he leads such company’s investment team and has served in the position since 2014; and he has served as the chief executive officer of IOG Resources, LLC since 2017. Previously, Mr. Rowland served as the chief executive officer at FTS International, Inc. (formerly Frac Tech International, LLC) from May 2011 through November 2012, and as the president and chief financial officer of Frac Tech Services, LLC and Frac Tech International, LLC from November 2010 to May 2011. Mr. Rowland served as the chief financial officer or equivalent positions of Chesapeake Energy Corporation from 1993, when the company became publicly traded, until October 2010, leaving in the position of executive vice president and chief financial officer. Prior to that, Mr. Rowland served as chief operating officer of Anglo-Suisse, LP from 1990 to 1992.

Mr. Rowland has served as a director on the boards of a number of public and private companies including as chairman of the board for SilverBow Resources from 2016 to the present and as a director of Mitcham Industries, Inc. from 2015 to the present, Key Energy Services, Inc. from March 2020 to present and Warren Resources, Inc. from 2012 to 2016. He is an alumnus of Wichita State University and serves on the Wichita State University Foundation Investment Committee and National Advisory Council.

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Amended and Restated Support Agreement with Strategic Value Partners, LLC

On June 6, 2018, the Company entered into a Support Agreement with SVP (the “Original SVP Support Agreement”). At the time the Original SVP Support Agreement was signed, SVP and its affiliated entities beneficially owned approximately 16.8% of the issued and outstanding shares of Common Stock. David Geenberg, co-head of SVP’s North American investment team, was originally designated as the SVP Designee. Effective as of March 11, 2019, Mr. Geenberg resigned from the Board, and SVP appointed Marcus C. Rowland, who was not an officer or employee of SVP, to serve as its designee on the Board (the “SVP Designee”). Through a series of open market purchases of Common Stock from March 18, 2019 until July 17, 2019, SVP and its affiliated entities increased their ownership in the Company to approximately 30% of the issued and outstanding shares of Common Stock.

As a result of this increase in SVP’s ownership position in the Company, during November and December 2019, the Company and SVP discussed amending the Original SVP Support Agreement to, among other things, increase SVP’s representation on the Board and provide for a change in the Company’s Chief Executive Officer. On December 20, 2019, the Company and SVP entered into an Amended and Restated SVP Support Agreement (the “Amended SVP Agreement”), which, among other things, increased the number of SVP Designees from one to two – initially Michael J. Kuharski and Mark “Mac” A. McFarland – and provided for the appointment of Charles Duginski, the Company’s new Chief Executive Officer, to the Board. Furthermore, the Company agreed that Mr. Rowland would remain on the Board, even though he no longer serves an SVP Designee.

CORPORATE GOVERNANCE

Our website contains a number of documents, available free of charge, that will be helpful to your understanding of our corporate governance practices, including:

You may also obtain copies of these documents by contacting the Corporate Secretary.

Our Board regularly reviews developments in corporate governance and updates our corporate governance documents and practices as appropriate. Amendments to these documents will be promptly posted on our website.

Meetings

During 2019, our Board held 18 meetings of the full Board and 18 total meetings of committees. The Audit Committee, the Compensation Committee and the Nominating and Governance Committee held four, eight and six

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meetings, respectively, during 2019. In addition, the Company’s independent auditors and management meet with the Audit Committee Chairman prior to the issuance of earnings press releases, and the other members of the Audit Committee are invited to attend these meetings. All directors are expected to attend meetings of the Board (and any committees thereof on which they serve) either in person or telephonically unless exigencies prevent them from attending. Each director attended at least 75% of the aggregate of (1) the total number of meetings of the Board (held during the period for which he or she has been a director) and (2) the total number of meetings of committees of the Board on which he served (during the periods that he served).

Our non-employee directors meet at regularly scheduled executive sessions presided over by the Chairman of the Board. Additionally, our independent directors meet at least once a year without members of management or non-independent directors present.

Although we do not have a formal policy in place regarding attendance by members of our Board at annual meetings of stockholders, we encourage, but do not require, our directors to attend. Two directors attended our 2019 annual meeting of stockholders.

Stockholder and Interested Party Communications with the Board

Stockholders and interested parties may communicate directly with the Board, a particular director, or a group of directors, such as the non-management directors, by sending a letter to the attention of the Board, the particular director, or a group of directors, as applicable, c/o Corporate Secretary, Chaparral Energy, Inc., 701 Cedar Lake Boulevard, Oklahoma City, OK 73114. The Corporate Secretary will forward communications to the appropriate directors or the Board as a whole, as applicable, unless he reasonably determines in good faith that such communications relate to an improper or irrelevant topic.

Board Leadership Structure

The Board does not have a formal policy addressing whether the roles of Chairman of the Board and Chief Executive Officer should be separate or combined. However, the Board reviews this structure periodically. At present, the Board has chosen to separate the positions of Chairman of the Board and Chief Executive Officer because the structure provides independent Board oversight by an independent Chairman of the Board and enhances accountability to the Company and its stakeholders.

Board Committees

The Board has the following three standing committees, each composed of only non-employee directors: the Audit Committee, the Compensation Committee and the Nominating and Governance Committee. Each of these committees is governed by a charter adopted by the Board. These charters establish the purposes of the respective committees as well as committee membership guidelines. They also define the authority, responsibilities and procedures of each committee in relation to the committee’s role in supporting the Board and assisting the Board in discharging its duties in supervising and governing the Company. The charters for each of our committees can be found on our website at www.chaparralenergy.com.

The Audit Committee consists of Messrs. Shellum (Chair), Moore and Langford, each of whom is independent under the independence standards of the New York Stock Exchange (the “NYSE”) and the rules of the Securities and Exchange Commission (the “SEC”). The Board has determined that Mr. Shellum satisfies the definition of “audit committee financial expert.”

The Audit Committee oversees, reviews, acts on and reports on various auditing and accounting matters to the Board, including the selection of our independent registered public accounting firm, the scope of our annual audits, fees to be paid to the independent registered public accounting firm, the performance of our independent registered public accounting firm and our accounting practices. In addition, the Audit Committee oversees our compliance programs relating to legal and regulatory requirements. The Audit Committee has the power to delegate any of its authority to subcommittees or to individual members of the Audit Committee as it deems appropriate.

The Compensation Committee currently consists of Messrs. Langford (Chair), Brooks and McFarland, each of whom is independent under the rules of the SEC and the NYSE. The Compensation Committee approves salaries, incentives and other forms of compensation for officers and other employees. The Compensation Committee also administers our incentive compensation and benefit plans. The Compensation Committee has the power to delegate any of its authority to subcommittees or to individual members of the Compensation Committee as it deems appropriate.

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The Nominating and Governance Committee consists of Messrs. Moore (Chair), Kuharski and Brooks, each of whom is independent under the rules of the SEC and the NYSE. The Nominating and Governance Committee identifies, evaluates and recommends qualified nominees to serve on the Board, develops and oversees our internal corporate governance processes and maintains a management succession plan. The Nominating and Governance Committee has the power to delegate any of its authority to subcommittees or to individual members of the Nominating and Governance Committee as it deems appropriate.

The Nominating and Governance Committee seeks opportunities to enhance the diversity of directors serving on our Board. Although the Nominating and Governance Committee does not have specific requirements with regard to diversity in identifying director nominees, the Nominating and Governance Committee has historically considered, and will continue to consider, diversity a significant factor in evaluating the qualifications and experience of director nominees. In that regard, the Nominating and Governance Committee will endeavor to achieve an overall variety and mix of diversity in professional experiences, skills, perspective, culture, race and gender among the directors of our Board.

Code of Ethics

We have adopted a Code of Business Conduct and Ethics that is applicable to all employees, officers and members of the Board. The Code of Business Conduct and Ethics is available on our website at www.chaparralenergy.com.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires our directors, executive officers and persons who beneficially own more than 10% of our Common Stock to file with the SEC initial reports of ownership and reports of changes in ownership of our Common Stock. Directors, executive officers and more than 10% stockholders are required by SEC regulations to provide us with copies of all Section 16(a) forms they file.

To our knowledge, based solely on a review of the copies of the reports furnished to us and written representations that no other reports were required, all Section 16(a) filing requirements applicable to our directors, officers and more than 10% beneficial owners were complied with during the year ended December 31, 2019.

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EXECUTIVE OFFICERS

The following provides summary information regarding the experiences of the Company’s executive officers as of April 20, 2020. The executive officer profiles exclude (i) K. Earl Reynolds, who served as Chief Executive Officer, President and Director until his resignation on December 27, 2019; (ii) Joseph O. Evans, who served as Chief Financial Officer and Executive Vice President until his retirement effective March 15, 2019; (iii) Scott C. Pittman, who served as Chief Financial Officer and Senior Vice President until his resignation on April 17, 2020, (iv) James M. Miller, who served as Senior Vice President – Operations until such position was eliminated as of January 31, 2020 and (v) Mark W. Ver Hoeve, who served as Vice President – Geoscience until his retirement on April 17, 2020. Because of their respective positions as the Chief Executive Officer and Chief Financial Officer, during 2019, Mr. Reynolds, Mr. Evans and Mr. Pittman are identified as named executive officers for 2019 in the compensation disclosures that follow these biographies.

Charles Duginski

Chief Executive Officer, Director

Charles Duginski joined Chaparral in 2019 as the Chief Executive Officer, President and Director. Prior to joining Chaparral, he served as Senior Vice President and Chief Operating Officer of Tapstone Energy, LLC (“Tapstone”) from February 2017 to December 2019, and was appointed to the Board of Directors of Tapstone in January 2019. Prior to joining Tapstone, he served as Chief Operating Officer of Echo Energy from July 2016 until February 2017. From October 2013 to June 2016, Mr. Duginski served as Vice President – Southern Region Production of Continental Resources, Inc., where he had operational and technical leadership responsibilities for the Anadarko Basin. From November 2004 until October 2013, Mr. Duginski held various positions at Chesapeake Energy Corporation, including District Manager – Haynesville, then Vice President – Haynesville/Barnett Business Unit. He began his career in technical roles at Mobil Oil and ExxonMobil.

Mr. Duginski holds a Bachelor of Science degree in Mechanical Engineering from the University of Oklahoma.

Justin P. Byrne

Vice President – General Counsel and Secretary

Justin P. Byrne joined Chaparral in 2019 as Vice President, General Counsel and Secretary. Prior to joining the Company, Mr. Byrne worked in the private law practice of Hall, Estill, Hardwick, Gable, Golden and Nelson, P.C. From 2008 to 2016, Mr. Byrne worked at SandRidge Energy, Inc., where he served as Associate General Counsel and Assistant Corporate Secretary. Before that time, he was Counsel at Devon Energy and Kerr-McGee Corporation after beginning his career with the firm of Hughes & Luce, L.L.P.

Mr. Byrne holds a Doctor of Jurisprudence from the University of Texas School of Law and a Bachelor of Arts degree in history from the University of Tulsa. He is a member of both the Oklahoma and Texas State Bars.

Clinton J. Calhoun

Vice President – Resource Development

Clinton J. Calhoun joined Chaparral in 2019 as Vice President – Resource Development. Before joining the Company, Mr. Calhoun co-founded the Merge- and SCOOP-focused Travis Peak Resources in 2013, where he served as vice president of engineering and was responsible for providing assessment and development strategy, budgeting and management of day-to-day operations for its Appalachia and Mid-Continent assets. Prior to that time, Mr. Calhoun worked for Newfield Exploration Company in a number of positions of increasing importance, including as a production and reservoir engineer, as well as an asset lead and asset manager of its active Mid-Continent resource plays.

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Mr. Calhoun holds a Bachelor of Science degree in petroleum engineering from the University of Texas at Austin.

Stephanie A. Carnes

Vice President – Corporate Controller

Stephanie A. Carnes joined Chaparral in 2012 and has held various leadership roles, including internal and external reporting, corporate, operations and tax accounting, as well as assistant controller and financial reporting director before being named as a Vice President – Corporate Controller. As noted above, Scott C. Pittman resigned as Senior Vice President and Chief Financial Officer on April 17, 2020. The Company is conducting a search to fill the vacancy in the Chief Financial Officer position resulting from Mr. Pittman’s departure. In accordance with the Company’s Second Amended and Restated Bylaws, the Company has temporarily assigned the authority specific to the Chief Financial Officer to Ms. Carnes until the Chief Financial Officer vacancy has been filled.

Prior to joining Chaparral, Ms. Carnes held various financial and regulatory reporting, international finance and operations positions with increasing responsibility working for large organizations, such as SERVA Group, L Brands, Ernst & Young and PricewaterhouseCoopers. Ms. Carnes has more than 17 years of experience in areas including financial reporting, business planning and development, organizational design and restructuring, team development and leadership, and strategic planning.

Ms. Carnes holds Bachelor and Master of Accounting degrees from Oklahoma State University.

Joshua D. Walker

Vice President – Completions and Operations

Joshua D. Walker joined Chaparral in 2018 and is Vice President – Completions and Operations.

Before joining Chaparral, Mr. Walker served as the innovation manager at Chesapeake Energy, where he assembled and led a team focused on operations research and development, new and emerging technologies and data analytics. While at Chesapeake, Mr. Walker also served as the completions manager for the company’s Mid-Continent, Eagle Ford, Utica and Marcellus plays, as well as in various other operational roles.

Prior to that time, Mr. Walker worked for Legend Natural Gas as a drilling, completions and production engineer and Anadarko Petroleum where he held a number of operations positions of increasing importance.

Mr. Walker holds a Bachelor of Science degree in petroleum engineering from the University of Oklahoma and an Executive MBA in energy from the University of Oklahoma’s Price College of Business.

Compensation Philosophy and Objectives

Our executive compensation program in 2019 was designed to achieve the following objectives:

Establishing Executive Compensation

Role of the Compensation Committee. The Compensation Committee oversees the executive compensation program and has overall responsibility for making final decisions about total compensation for the named executive officers, including cash and equity awards. In that regard, the Compensation Committee reviews, establishes, evaluates and approves the awards, agreements, plans and policies of the Company to compensate named executive officers.

Role of NEOs. The Compensation Committee evaluates the individual performance of each named executive officer and, except with respect to his own compensation, considers the recommendations of our then-serving Chief Executive Officer. Additionally, in light of our named executive officers’ integral role in executing the Company’s overall operational and financial objectives, the Compensation Committee solicits their feedback when establishing the goals for the qualitative and quantitative performance metrics used in our short-term cash incentive program. The Compensation Committee may invite any named executive officer to attend Compensation Committee meetings to report on the Company’s progress with respect to the annual quantitative and qualitative performance metrics, but any such officer is excluded from any discussions or decisions regarding his individual compensation.

Independent Compensation Consultant. The Compensation Committee engaged Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant for 2019. Meridian provides advice to and works with the Compensation Committee in designing and implementing the structure and mechanics of the Company’s executive compensation program as well as other matters related to officer and director compensation. Meridian provides the Compensation Committee with relevant data, including market and peer-company compensation, information and advice regarding recent trends and developments in executive and director compensation practices. This information assists the Compensation Committee in making executive compensation decisions and director compensation recommendations based on market pay levels and best practices.

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Meridian reports directly and exclusively to the Compensation Committee and does not provide any other services to management, the Company or its affiliates. Meridian does not make compensation-related decisions for the Compensation Committee or otherwise with respect to the Company and, while the Compensation Committee generally reviews and considers information and recommendations provided by Meridian, the Compensation Committee makes all compensation-related decisions with respect to the named executive officers. The Compensation Committee has the discretion to allow Meridian to work directly with management in preparing or reviewing materials for the Compensation Committee’s consideration. During 2019, and after taking into consideration the factors listed in Section 303A.05(c)(iv) of the NYSE Listed Company Manual, the Compensation Committee concluded that neither it nor the Company has a relationship with Meridian that poses a conflict of interest, and that Meridian is independent from management. Other than Meridian, no other compensation consultants provided services to the Compensation Committee during 2019.

Peer Group Analysis. The Compensation Committee utilizes a peer group prepared in collaboration with Meridian of identified companies that are considered by the Compensation Committee to be of comparable size (revenue and market capitalization), enterprise value, industry affiliation, and/or other similar characteristics, such as operational profile and asset portfolio. Prior to August 2019, the peer group used in connection with executive compensation decisions for 2019 consisted of the companies in the left-hand column in the following table. In connection with the equity awards granted by the Compensation Committee in August 2019, the Compensation Committee approved adjustments to the peer group in order to address companies that were no longer available for use because of M&A or restructuring activity and to better align the peer group with the Company’s enterprise value, market capitalization, revenue and asset size. The adjusted peer group (the “Adjusted 2019 Peer Group”) is shown in the right-hand column of the table below:

Pay Decisions. In determining target total compensation for our executives, the Compensation Committee takes into consideration competitive market pay levels in our peer group along with other relevant factors for each individual officer, which may include:

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Executive Compensation Components

Our executive compensation program is composed of base salary, annual incentive awards, and long-term equity-based compensation. To align pay levels for our named executive officers with the Company’s performance, our 2019 pay combination emphasized performance-based incentives. The Compensation Committee believes that the proportion of any employee’s total direct compensation that varies based on performance should increase as the scope of an employee’s ability to influence our results increases. Because executive officers are generally viewed as having the greatest influence over our results, a significant portion of their overall compensation consists of annual incentive awards and long-term equity awards that vary based on performance. We believe that this practice is consistent with norms in the oil and natural gas industry.

Base Salary. The base salaries in 2019 for the named executive officers are set forth in the table below. In determining salary increases, the Compensation Committee considered the peer group data, as well as individual and Company performance. Salary increases are not automatic or guaranteed and, in that regard, the base salaries for Messrs. Reynolds, Evans and Miller remained unchanged from 2018 to 2019. Because Messrs. Duginski, Pittman and Calhoun joined the Company during 2019 and Mr. Evans served as the Company’s executive vice president and chief financial officer for only part of the year, each of their salaries is shown on an annualized, not actual, basis. The base salary levels for Messrs. Duginski, Pittman and Calhoun were generally determined after considering input from Meridian, the peer group data, the Company’s historical compensation practices, and each NEO’s relevant experience and compensation received from the NEO’s prior employer.

Annual Incentive Awards. Our 2019 Annual Incentive Measure (“AIM”) bonus program provided for the payment of cash bonus awards to NEOs to the extent the Company achieved certain objective performance metrics, according to each named executive officer’s individual performance and contribution to the achievement of such metrics. The targets for individual awards (the “Individual Target Awards”), which are set forth below for named executive officers, are expressed as a percentage of such person’s eligible earnings in 2019 and are based on level of responsibility. The Individual Target Awards did not increase as compared to 2018 for Messrs. Reynolds, Evans, Miller, or Ver Hoeve. The Individual Target Awards for Messrs. Pittman and Calhoun were determined after considering input from Meridian, the peer group data, the Company’s historical compensation practices and the compensation received from each named executive officer’s prior employer. Mr. Duginski joined the Company on December 20, 2019 and therefore did not participate in the 2019 AIM.

The maximum cash pool from which 2019 AIM payments could be made to the Company’s NEOs and other executive officers (the “Total AIM Pool”) was determined by multiplying the aggregate of the target awards for all officers against the total bonus payout percentage determined by the Company’s performance with respect to the metrics mentioned above, on an aggregate basis (the “Total AIM Payout Percentage”). The Total AIM Payout Percentage is the sum of the Company’s performance with respect to eight different performance metrics, which were assigned weightings (each, a “metric weighting”) that added up to 100%. The performance metrics selected, and the threshold, target and maximum levels of those metrics, were determined by the Compensation Committee based on the Company’s 2019 budget. With respect to each metric, performance (a) not meeting a threshold goal

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funded 0% of the metric weighting, (b) at a threshold goal funded 50% of the metric weighting, (c) at the target goal funded 100% of the metric weighting, and (d) meeting or exceeding a maximum goal funded 200% of the metric weighting. In the case of each metric, performance between the minimum and target goals, or between the target and maximum goals, funded a metric weighting percentage using interpolative calculations or reasoning.

Each 2019 AIM Performance Metric and its weighting, minimum threshold, target, and maximum goals, together with its actual result from the Company’s 2019 performance, is indicated in the table below.

Once the Total AIM Pool was calculated, the Compensation Committee, after considering the Total AIM Payout Percentage, noting each executive officer’s target award as a percentage of his or her salary, evaluating the executive officers’ respective contributions to the Company’s performance in 2019, and receiving the input of Mr. Duginski, approved of 2019 AIM payments to the other NEOs and executive officers. In 2019, Company performance related to the above described metrics resulted in a Total AIM Payout Percentage of 91% for all participants in the 2019. Of this amount, the Company’s executive officers voluntarily agreed that the Total AIM Payout Percentage for the then-serving officers as a group would be reduced to 80%, thereby permitting additional funds from the Total AIM Pool to be allocated to the Company’s non-officer employees. The table below contains each named executive officer’s Individual Target Award, the payment that each NEO would have received if the Total AIM Payout Percentage had been applied to his Individual Target Award, and the payment actually made to each NEO.

Long-Term Equity-Based Compensation. Subsequent to the approval by the Company’s stockholders of the Chaparral Energy, Inc. 2019 Long Term Incentive Plan (the “2019 LTIP”), the Compensation Committee determined that, for 2019, it was appropriate to award an annual grant of long-term equity-based compensation instead of resuming the Company’s prior practice of making larger awards on a triennial basis. Also, prior to adoption of the 2019 LTIP, the Company had granted equity awards in the form of shares of restricted stock, consisting of restricted shares that were subject to service vesting conditions (“Time Shares”) and restricted shares that were subject to performance vesting conditions (“Performance Shares”). For the initial grants under the 2019 LTIP, the Compensation Committee determined to grant restricted stock units (“RSUs”) instead of restricted shares.

Fifty percent of the RSUs granted to each NEO in August 2019 are subject to service vesting conditions (the “Time RSUs” and, together with the Time Shares, the “Time Units”) and 50% are subject to performance vesting conditions (the “Performance RSUs” and, together with the Performance Shares, the “Performance Units”). The combination of Time Units and Performance Units is intended to provide a balance of incentivizing sustainable Company

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performance over an extended time frame with our long-term retention goals. Furthermore, the Performance Units provide a meaningful portion of our named executive officers’ compensation as performance-based and at-risk based on the performance of our stock price relative to peers, thus incentivizing our named executive officers to achieve long-term Company performance goals and aligning our named executive officers’ compensation with the value created for our stockholders over time. Time Units are a more predictable compensation element and are intended to emphasize long-term retention and to further align our named executive officers’ interests with those of our stockholders through meaningful stock ownership in the Company. In determining the size of the August 2019 grants, the Committee took into consideration several factors, including the value of grants made to certain of the NEOs earlier in 2019, peer group and survey data with respect to long-term incentive market values of annual awards, retention, individual and Company performance, the total share use and resulting “run rate” and dilution levels.

Time Units are subject to vesting over three annual installments. Performance Units vest in three tranches over three calendar years according to performance conditions established each year. The performance conditions for a given year are unique to that year and vesting with respect to performance conditions for a given year is independent of the vesting with respect to other years. As a result, the requisite service period for each of the three tranches of Performance Units relate to the individual year for which performance is measured and do not overlap. The vesting of the Performance Units granted in 2019 is based on the Company’s annual total stockholder return against a peer group of companies established by the Compensation Committee for each year within the three-year performance period, in accordance with the table below. For the first vesting period for the Performance Units granted in August 2019, the Compensation Committee used the Adjusted 2019 Peer Group to measure relative total stockholder return.

New Hire and Off-Cycle Equity Awards

Messrs. Duginski, Pittman and Calhoun joined the Company at different points during 2019, and, in connection with the appointment of each, the Company granted each such NEO shares of restricted stock as an inducement to join the Company. Fifty percent of the shares granted to Mr. Duginski at sign-on were Time Shares and 50% of such shares were Performance Shares. Seventy-five percent of the shares granted to Messrs. Pittman and Calhoun were Time Shares and 25% were Performance Shares. Additionally, Mr. Ver Hoeve was awarded a supplemental grant of restricted stock (75% as Time Shares and 25% as Performance Shares) in early 2019 as earlier grants to him were determined to have been, unintentionally, significantly below the median of the market for his position. The compensation and other employment terms for these new hire and off-cycle awards were determined by the Compensation Committee in light of peer group data, internal pay equity considerations and, in the case of the new hire awards, negotiations (as directed by the Compensation Committee).

Health and Wellness and Retirement Benefits

We offer a variety of health and wellness, paid time off and retirement programs to all eligible employees. Our named executive officers participate in the same benefit programs, and on the same basis, as the rest of our employees. With respect to the Company’s retirement plan, named executive officers may make investments in our Company-sponsored 401(k) plan, which is intended to supplement the NEO’s personal savings and social security. Each NEO may contribute from 1% to 60% of his eligible compensation, up to the annual IRS dollar limit. The Company matches the NEO’s contributions at a rate of $1.00 per $1.00 for the first 7% of the named executive officer’s eligible compensation. One-third of the Company contributions vests on each of the first three anniversaries of the NEO’s employment.

Employment Agreements

As of December 31, 2019, we had employment agreements in place with Messrs. Duginski, Pittman and Miller. Mr. Miller’s employment with the Company ended on January 31, 2020, and as a result, his employment agreement is no longer in effect.

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Duginski Employment Agreement

Mr. Duginski’s employment agreement (the “Duginski Employment Agreement”) became effective on December 20, 2019. It is effective through December 20, 2022, after which the term will be automatically extended so as to terminate on December 20, 2024, and subsequently will be automatically extended so as to terminate on each anniversary thereafter. However, if notice of termination is properly given by the Company or Mr. Duginski prior to a renewal date, then the Duginski Employment Agreement will terminate on that renewal date.

Base Salary and Annual Bonus. Pursuant to the Duginski Employment Agreement, Mr. Duginski is entitled to an initial base salary of $525,000 per year, subject to increase (but not decrease) by the Compensation Committee. Beginning in 2020, Mr. Duginski will also be entitled to an annual performance bonus if certain performance criteria are met, with a target of 100% of base salary.

Sign-on Bonus. Mr. Duginski also received a $225,000 sign-on bonus, to be paid in four equal quarterly installments. However, if Mr. Duginski is terminated by the Company for Cause or resigns for any reason other than Good Reason, in each case, prior to the 24-month anniversary of his commencement date, then Mr. Duginski will be required to repay any portion of the sign-on bonus that he received prior to his date of termination (net of any taxes he has paid or is required to pay with respect to the sign-on bonus). Both “Cause” and “Good Reason” are defined in the Duginski Employment Agreement and are summarized in the “Payments Upon a Termination or Change in Control” section.

Inducement Restricted Stock Grants. As an inducement for Mr. Duginski to join the Company as its Chief Executive Officer and President, we granted Mr. Duginski restricted stock awards (the “Inducement Equity Grants”) consisting of (i) 688,073 Time Shares that will vest in equal annual installments over three years and (ii) 1,032,110 Performance Shares (based on satisfying the criteria for achieving 150% of the target grant of 688,073 Performance Shares). Under the terms of the grant agreement for the Performance Shares, the number of restricted shares that will become vested (and not forfeited) over the three-year vesting period will range from 0 to 1,032,110 shares (150% of the target grant), depending on the Company’s annual total stockholder return against a peer group of companies established by the Compensation Committee for each year within the three-year performance period, in accordance with the following table. For the first vesting period for Mr. Duginski’s Performance Shares, the Compensation Committee used the Adjusted 2019 Peer Group to measure relative total stockholder return.

Cash Incentive Awards. Mr. Duginski also received cash incentive awards (the “Cash Incentive Awards”) consisting of (i) a $262,500 time-based cash award that will vest in equal annual installments over three years and (ii) a $262,500 time- and performance-based cash award (based on achieving 100% of the target amount). Under the terms of the award agreement for the time- and performance-based cash award, the amount payable (and not forfeited) under that award over the three-year vesting period will range from $0 to $393,750 (150% of the target grant), depending on the Company’s attainment of relative stockholder return performance measures, as described above for Mr. Duginski’s new hire equity award.

Termination of Employment and Restrictive Covenants. Mr. Duginski’s employment agreement also includes severance benefits (including under certain circumstances the acceleration of vesting of the Inducement Equity Awards and the Cash Incentive Awards) upon a qualifying termination of employment as well as Mr. Duginski’s agreement to comply with certain restrictive covenants while employed by the Company and for a specified period thereafter, each as described further below in the section entitled “Payments Upon a Termination or Change in Control.”

Pittman Employment Agreement

Mr. Pittman’s employment agreement (the “Pittman Employment Agreement”) became effective on April 22, 2019, with an initial three-year term through April 22, 2022, after which the term would be automatically extended so

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as to terminate on April 22, 2024, and subsequently would be automatically extended so as to terminate on each anniversary thereafter. However, if notice of termination is properly given by the Company or Mr. Pittman prior to a renewal date, then the Pittman Employment Agreement will terminate on that renewal date.

Base Salary, Annual Bonus and Relocation. Pursuant to the Pittman Employment Agreement, Mr. Pittman was entitled to an initial base salary of $325,000 per year, subject to increase by the Compensation Committee (but not decrease unless the base salaries of all of the Company’s executive officers are decreased). Mr. Pittman was also entitled to an annual performance bonus if certain performance criteria are met, with a target of 80% of base salary.

Termination of Employment and Restrictive Covenants. Mr. Pittman’s employment agreement also includes severance benefits upon a qualifying termination of employment as well as Mr. Pittman’s agreement to comply with certain restrictive covenants while employed by the Company and for a specified period thereafter. As noted earlier, on April 17, 2020, Mr. Pittman resigned from the Company to pursue other interests. In connection with Mr. Pittman’s separation, Mr. Pittman will receive separation benefits consistent with the terms of his employment agreement. Please see the section entitled “Payments Upon a Termination or Change in Control” for a description of the severance benefits and restrictive covenants under Mr. Pittman’s employment agreement as well as the amounts payable to Mr. Pittman in connection with his April 2020 separation.

Executive Severance Plan

On December 20, 2019, after receiving the unanimous recommendation of the Compensation Committee, the Board unanimously adopted the Chaparral Energy, L.L.C. Executive Severance Plan (the “Severance Plan”). No officer or employee of the Company who is a party to an employment agreement participates in the Severance Plan. The terms of the Severance Plan were developed with reference to market practices among the E&P industry and broader marketplace, and through consultation with the Committee’s independent compensation consultant.

The Severance Plan provides severance benefits to certain key management employees of the Company and its subsidiaries who are selected by the Severance Plan’s administrator and have entered into a Participation and Restrictive Covenant Agreement (a “PRC Agreement”) with the Company (each, a “Participant”), and whose employment is terminated in a “Qualifying Termination,” meaning a termination without “Cause” or resignation with “Good Reason,” in each case as defined in the Severance Plan. On December 20, 2019, Messrs. Ver Hoeve and Calhoun were designated as Participants under the Severance Plan and on January 21, 2020, each of them entered into a PRC Agreement with the Company. In connection with Mr. Ver Hoeve’s April 2020 retirement from the Company, he will receive separation benefits consistent with the separation benefits set forth in the Severance Plan.

Please see the section entitled “Payments Upon a Termination or Change in Control” for a description of the severance benefits and restrictive covenants under the Severance Plan and PRC Agreements as well as the amounts payable to Mr. Ver Hoeve in connection with his separation.

Separation Agreement with Mr. Reynolds

On December 20, 2019, Mr. Reynolds resigned from all positions with the Company and its subsidiaries, including as Chief Executive Officer, President and director. However, he remained an employee under his employment agreement until December 27, 2019 (the “Reynolds Separation Date”). In connection with Mr. Reynold’s departure, the Company and Mr. Reynolds signed a Separation and Release Agreement (the “Reynolds Separation Agreement”), which entitled him to certain separation benefits in exchange for his agreement to comply with certain restrictive covenants and a release of claims in favor of the Company. The terms of the Reynolds Separation Agreement were consistent with Mr. Reynolds’ employment agreement, except that, in recognition of the strengthening of certain restrictive covenants, the Compensation Committee agreed that Mr. Reynolds would receive a lump sum payment of $286,500 shortly after the Reynolds Separation Date. This lump sum payment was in addition to the severance amounts otherwise provided by his employment agreement. Please see the “Payments Upon a Termination or Change in Control” for a description of the amounts paid to Mr. Reynolds in connection with his separation.

Separation Agreement with Mr. Evans

Mr. Evans retired as Chief Financial Officer and Executive Vice President of the Company, effective March 15, 2019. In connection with Mr. Evans’ retirement, the Company and Mr. Evans signed a Separation and

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Release Agreement (the “Evans Separation Agreement”). The Evans Separation Agreement provided that Mr. Evans would remain employed with the Company and provide transition services in addition to his customary duties, responsibilities and authorities until his separation date and will continue to receive his current rate of base salary and employee benefits, as in effect immediately prior to the effective date of the Evans Separation Agreement, until his separation date. The Evans Separation Agreement also provides for certain separation benefits in exchange for a release of claims. The terms of the Evans Separation Agreement were consistent with Mr. Evans’ employment agreement, except that, in consideration for Mr. Evans’s agreement to remain with the Company until the necessary work had been performed to complete the Company’s 2018 Annual Report on Form 10-K, the Compensation Committee accelerated the vesting of 57,004 shares Time Shares granted to Mr. Evans. Those Time Shares were scheduled to vest on April 1, 2019, shortly after the termination date. Please see the “Payments Upon a Termination or Change in Control” for a description of the amounts paid to Mr. Evans in connection with his separation.

2020 Executive Compensation Actions

On April 17, 2020, following consultation with its compensation consultant related to this matter, Willis Towers Watson, the Compensation Committee approved: (a) the material terms of a retention program for the Company’s five executive officers, including each of the continuing NEOs (“Executive Retention Plan”), and (b) a modification of the Company’s existing Annual Incentive Plan for the Company’s five executive officers, including each of the Company’s continuing NEOs.

Executive Retention Plan.

Pursuant to the Executive Retention Plan, if a participating executive does not continue his or her employment with the Company for approximately twelve months (unless the participant is terminated by the Company without cause or leaves for good reason, in each case as defined in the Executive Retention Plan), the participant will forfeit the full amount of his or her retention payment. The Executive Retention Plan payments are in lieu of long-term incentive grants that would customarily have been made to the Executive Retention Plan participants in 2020. If an Executive Retention Plan participant is terminated for cause or voluntarily terminates his or her employment with the Company without good reason, that participant must repay his or her Executive Retention Plan payment in full.

The Company’s continuing NEOs and the Company’s other current executive officers will receive the following amounts under the Executive Retention Plan:

In addition, based on the recommendation of the Compensation Committee, the Board has also approved the material terms of a key employee retention program for certain other of the Company’s key employees who are not participants in the Executive Retention Plan. The total amount of the retention payments under the non-executive retention program is currently estimated to be between $800,000 and $1,000,000. No NEOs are participants in this non-executive retention program. The terms of the non-executive retention program were approved by the Board with the input and based upon the recommendations of the Committee’s independent compensation consultant.

Modification of Annual Incentive Plan.

The Company has historically made payments under its Annual Incentive Plan on an annual basis on or about March 15th of the year following the applicable performance period. The Committee has approved the modification of the Annual Incentive Plan for the five executive officers, including each of the continuing NEOs, with payments for 2020 measured and paid on a calendar quarterly basis.

As a result of the modification described above, each executive participant received one-half of his or her incentive target in the second quarter of 2020, subject to clawback and true-up based on actual performance at the

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end of the second quarter of 2020. The payment and timing associated with the third and fourth quarters of 2020 will be determined at the end of the second quarter and third quarter, respectively, subject to clawback and true-up based on actual performance at the end of the third and fourth quarters.

The target incentive amounts for each of the Company’s continuing NEOs and the Company’s other current executive officers under the Annual Incentive Plan are set forth below:

Report of the Compensation Committee

The Compensation Committee has reviewed and discussed the above Compensation Discussion and Analysis with management and, based on such review and discussions, recommended to the Board that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K for the year-ended December 31, 2019 and the Company’s Annual Proxy Statement with respect to the Company’s 2020 annual meeting of stockholders (the “2020 Annual Meeting”).

Respectfully submitted by the Compensation Committee of the Board,

Samuel Langford (Chair)

Douglas E. Brooks

Mark “Mac McFarland

Compensation Committee Interlocks and Insider Participation

The Compensation Committee is composed of Messrs. Langford, Brooks, and McFarland. Mr. Langford has served as Chair of the committee since December 20, 2019. None of our executive officers serves on the board of directors or compensation committee of a company that has an executive officer that serves on our Board or Compensation Committee. No member of our Board is an executive officer of a company in which one of our executive officers serves as a member of the board of directors or compensation committee of that company.

2019 Summary Compensation Table

The following table and footnotes summarize the total compensation awarded to, earned by, or paid to our named executive officers (“NEOs”) for the years ended December 31, 2019, 2018, and 2017. The Company’s NEOs are its Chief Executive Officer, Chief Financial Officer as of December 31, 2019, a former Chief Executive Officer, a former Chief Financial Officer, and three other most highly compensated executive officers for 2019.

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Pension Benefits in 2019

No pension benefits were granted in 2019 for any NEO.

Nonqualified Deferred Compensation in 2019

No nonqualified deferred compensation was granted in 2019 for any NEO.

Payments Upon a Termination or Change in Control

Employment Arrangements

Duginski Employment Agreement

The Duginski Employment Agreement became effective on December 20, 2019. It is effective through December 20, 2022, after which the term will be automatically extended so as to terminate on December 20, 2024, and subsequently will be automatically extended so as to terminate on each anniversary thereafter. However, if notice of termination is properly given by the Company or Mr. Duginski prior to a renewal date, then the Duginski Employment Agreement will terminate on that renewal date.

Termination of Employment. If Mr. Duginski is terminated by the Company for Cause or Mr. Duginski terminates his employment other than for Good Reason, the Company will make no further payments under the Duginski Employment Agreement other than the following accrued benefits:

Should Mr. Duginski be terminated by the Company without Cause or should Mr. Duginski resign for Good Reason, Mr. Duginski will receive his accrued benefits, and subject to Mr. Duginski’s continuing compliance with the nondisclosure, non-compete, non-solicitation, non-hire and non-disparagement provisions in the Duginski Employment Agreement, Mr. Duginski will be entitled to certain severance benefits, as described below. Mr. Duginski’s severance benefits consist of cash payments in an aggregate amount equal to the sum of:

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Fifty percent of these cash amounts would be paid in a lump sum on the Company’s first payroll date occurring on or after the 60^th day following the termination date. The remaining 50% would be paid in the form of salary continuation for a period of 12 months following the termination date.

If, within 18 months after a Change in Control (as defined in the Duginski Employment Agreement), Mr. Duginski is terminated by the Company without Cause or if Mr. Duginski resigns for Good Reason, (i) the base salary component of the severance benefit described above would be increased from 18 months to 24 months and (ii) the bonus target component would be increased from 150% to 200%. Furthermore, under those circumstances, then 100% of the unvested portion of Mr. Duginski’s Inducement Equity Grants would vest on the termination date, with performance assumed to be achieved at the target performance level. Full vesting also occurs if the Inducement Equity Grants are not assumed by the acquirer in connection with a Change in Control, regardless of whether a termination of employment occurs.

In the event of a termination of employment as a result of Mr. Duginski’s death or disability, a termination by the Company without Cause or a termination by Mr. Duginski for Good Reason (other than in connection with a Change in Control, as described above, if applicable), the portion of his Inducement Equity Grants that was scheduled to vest on the next regularly scheduled vesting date immediately following the termination date will vest on the termination date, with performance goals assumed to be achieved at the target performance level.

If Mr. Duginski’s employment is terminated for any reason other than as a result of Mr. Duginski’s death or disability, by the Company without Cause or by Mr. Duginski with Good Reason (other than in connection with a Change in Control, as described above, if applicable), then Mr. Duginski shall forfeit any unvested portion of the Inducement Equity Grants as of the termination date.

The vesting and forfeiture provisions described above for the Inducement Equity Grants apply to Mr. Duginski’s two Cash Incentive Awards in substantially the same manner.

For additional information regarding the Inducement Equity Awards and the Cash Incentive Awards, please see “Compensation Discussion and Analysis – Employment Agreements – Duginski Employment Agreement” above in this Item 11.

Restrictive Covenants. As consideration for the Company entering into the Duginski Employment Agreement, Mr. Duginski has agreed that, during the term of his employment and for a period of 12 months following his date of termination, he will not solicit, direct or attempt to solicit or divert any customer of the Company or an affiliate of the Company or solicit or hire any employee or consultant of the Company. Furthermore, during the 12-month period following his date of termination, Mr. Duginski has agreed not to engage in certain activities in any county in which the Company operates on the date of termination. Mr. Duginski has also agreed not to disparage the Company or any of its officers, director other affiliates. This non-disparagement provision is not subject to a time limit.

Should Mr. Duginski be terminated by the Company without Cause or should Mr. Duginski resign for Good Reason, then, upon Mr. Duginski’s material breach of any of the restrictive covenants described above, the Company will be entitled to cease payment of any remaining installments of Mr. Duginski’s severance payment and to be repaid any portion of the severance payment that has already been paid (net of any taxes Mr. Duginski had paid or is required to pay in respect of that portion of the severance payment). Furthermore, if Mr. Duginski’s employment is terminated by the Company for Cause or by Mr. Duginski without Good Reason, then, upon Mr. Duginski’s material breach of any of the restrictive covenants described above, Mr. Duginski has agreed to pay the Company an amount equal to 150% of the sum of Mr. Duginski’s base salary and bonus target for the year in which his termination date occurs.

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Executive Severance Plan

On December 20, 2019, after receiving the unanimous recommendation of the Compensation Committee, the Board unanimously adopted the Chaparral Energy, L.L.C. Executive Severance Plan (the “Severance Plan”). No officer or employee of the Company who is a party to an employment agreement participates in the Severance Plan. For a description of the severance provisions for Charles Duginski, who is the only continuing NEO who has an employment agreement, please see “Employment Arrangements – Duginski Employment Agreement” above.

The Severance Plan provides severance benefits to certain key management employees of the Company and its subsidiaries who are selected by the Severance Plan’s administrator and have entered into a Participation and Restrictive Covenant Agreement with the Company (each, a “Participant”), and whose employment is terminated in a “Qualifying Termination,” meaning a termination without “Cause” or resignation with “Good Reason,” in each case as defined in the Severance Plan. On December 20, 2019, four of the Company’s officers, including Clinton J. Calhoun, Vice President – Resource Development and Mark W. Ver Hoeve, former Vice President – Geoscience, were designated as Participants under the Severance Plan. Mr. Ver Hoeve ceased serving as an executive officer of the Company, effective as of April 17, 2020.

In order to be entitled to the benefits of the Severance Plan, Mr. Calhoun and Mr. Ver Hoeve entered into the Participation and Restrictive Covenant Agreement required under the Severance Plan. Pursuant to the Participation and Restrictive Covenant Agreement, each Participant must agree that, for a period of 12 months following his or her termination date, he or she will not solicit, direct or attempt to solicit or divert any customer of the Company or an affiliate of the Company or solicit or hire any employee or consultant of the Company. Furthermore, during that 12-month period, each such Participant must agree not to engage in certain activities in any county or parish in which the Company operates on his termination date. Each Participant must also agree not to disparage the Company or any of its officers, director other affiliates. This non-disparagement provision is not subject to a time limit.

If a Participant’s employment terminates in a Qualifying Termination, he or she will receive the following severance benefits:

In the event a Participant holds any equity awards granted under the 2019 LTIP or any predecessor or successor incentive plan (each an “Equity Plan”), the treatment of those equity awards upon a Qualifying Termination will continue to be governed by the terms of the applicable Equity Plan and the applicable award agreements. As used in the Severance Plan, the term “Change in Control” has the meaning specified in the 2019 LTIP.

If any payments and benefits to be paid or provided to a Participant, whether pursuant to the terms of the Severance Plan or otherwise, would be subject to “golden parachute” excise taxes under the Internal Revenue Code, the payments and benefits will be reduced to the extent necessary to avoid those excise taxes, but only if such a reduction of pay or benefits would result in a greater after-tax benefit to the eligible employee.

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Potential Payments Upon Termination or Change in Control

For each of the NEOs who is currently serving as an executive officer of the Company, the following tables quantify amounts that would have been paid upon termination pursuant to an employment agreement (in the case of Charles Duginski) or pursuant to the Severance Plan (in the case of Clinton J. Calhoun).

Termination Without Cause or by the NEO for Good Reason Not Following a Change in Control

The calculations in this table assume that a termination took place on December 31, 2019, assuming all accrued compensation and reimbursable expenses had been paid on December 31, 2019 and assuming such termination was a termination without cause or by the NEO for good reason not following a change in control.

Termination Without Cause or by the NEO for Good Reason Following a Change in Control

The calculations in this table assume that a termination took place on December 31, 2019, assuming all accrued compensation and reimbursable expenses had been paid on December 31, 2019 and assuming such termination was a termination without cause or by the NEO for good reason following a change in control.

Other Payments Made Upon Termination, Retirement, Death or Disability

Except for terminations without cause or for good reason subsequent to a change in control, neither the 2019 LTIP or any predecessor equity plan requires accelerated vesting provisions in the event of termination of an NEO’s employment for any other reason.

Regardless of the manner in which an NEO’s employment is terminated, he is entitled to receive amounts earned during his term of employment, including unused vacation pay and bonuses earned but not yet paid under the AIM program.

Additionally, if an NEO is terminated due to death or disability, that NEO will receive benefits under our disability plan or payments under our life insurance plan.

Departure of Earl Reynolds

Mr. Reynolds resigned from all positions with the Company and its subsidiaries effective as of December 20, 2019, including as Chief Executive Officer, President and director. However, he remained an employee of the Company until December 27, 2019 (the “Reynolds Separation Date”).

In connection with Mr. Reynolds’ departure, on December 20, 2019, the Company and Mr. Reynolds signed a separation agreement (the “Reynolds Separation Agreement”).

Accrued Benefits. Under the terms of the Reynolds Employment Agreement, Mr. Reynolds was entitled to receive his unpaid salary and accrued but unpaid vacation pay, in each case, through the Reynolds Separation Date. He was also entitled to any vested benefits under the Company’s 401(k) plan. All of Mr. Reynolds unvested equity awards (consisting of 350,000 unvested RSUs and 173,311 unvested restricted common shares) were forfeited as of the Reynolds Separation Date.

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Separation Benefits. The Reynolds Separation Agreement also provided for certain separation benefits in exchange for a release of claims. Mr. Reynolds received (i) an initial separation payment of $286,500 on or before December 31, 2019, (ii) the full amount of his annual bonus for 2019 ($521,301), payable when the Company paid annual bonuses to its executives and (iii) a separation payment equal to the sum of (A) 1.5 times his final base salary of $572,858 plus (B) 1.5 times his annual bonus for 2019, payable as salary continuation for 18 months following the Reynolds Separation Date. Furthermore, to the extent Mr. Reynolds elects COBRA continuation coverage, for a period of 18 months after termination the Company will reimburse Mr. Reynolds for the difference between the amount Mr. Reynolds pays for such health, dental and vision benefits for him, his spouse and his eligible dependents and the employee contribution amount that the Company’s active employees pay for comparable coverage, in each case, less any applicable taxes and withholding (estimated value $28,297).

Restrictive Covenants. Mr. Reynolds has agreed that, for a period of 18 months following the Reynolds Separation Date, he will not solicit, direct or attempt to solicit or divert any customer of the Company or a Company affiliate. He has already agreed during that 18-month period not to solicit, hire or seek to hire any employee or consultant of the Company, subject to certain customary exceptions. Furthermore, during the 12-month period following the Reynolds Separation Date, Mr. Reynolds has agreed not to engage in certain activities in the SCOOP, STACK and MERGE oil and gas plays in Oklahoma. The Reynolds Separation Agreement contains mutual non-disparagement provisions, without limitation as to time.

Departure of Joseph Evans

On February 11, 2019, Joseph O. Evans advised the Company of his intent to retire as Chief Financial Officer and Executive Vice President of the Company, effective March 15, 2019 (the “Evans Separation Date”). In connection with the foregoing, on February 14, 2019, the Company and Mr. Evans signed a Separation and Release Agreement (the “Evans Separation Agreement”) pursuant to which Mr. Evans remained employed with the Company and provided transition services in addition to his customary duties, responsibilities and authorities until the Evans Separation Date during which time he received his current rate of base salary and employee benefits, as in effect immediately prior to the effective date of the Evans Separation Agreement, until the Evans Separation Date.

Subject to the Evans Separation Agreement, and in consideration of a full release of claims against the Company, on March 22, 2019, the Company remitted a cash payment of $402,226.88 to Mr. Evans for his 2018 Annual Bonus. Additionally, beginning on March 29, 2019, the Company began remitting a total of $851,140.88, consisting of Mr. Evans’s 2018 annual salary and 2018 Annual Bonus, which was paid out over a 12-month period as a separation payment, in addition to accrued and unpaid benefits or obligations previously paid under the Evans Separation Agreement. On February 22, 2019, the Company also accelerated the vesting of 57,004 shares of time-based restricted stock granted to Mr. Evans that would have become vested if Mr. Evans had remained an employee until April 1, 2019. Furthermore, to the extent Mr. Evans elects COBRA continuation coverage, for a period of 18 months after termination the Company will pay on Mr. Evans’ behalf the premium costs he incurs for that coverage (estimated value $30,163).

Mr. Evans is subject to non-solicitation, non-competition, and confidentiality restrictions as set forth in his employment agreement with the Company.

Departure of Scott C. Pittman

On April 17, 2020, Scott Pittman resigned as Senior Vice President and Chief Financial Officer to pursue other interests. Under the terms of Mr. Pittman’s existing employment agreement, in connection with his separation from the Company, Mr. Pittman is entitled to receive the following severance benefits, subject to his entry into the general release provided for in his employment agreement: (i) an aggregate cash severance amount, payable in the form of salary continuation over a period of 12 months following the date of Mr. Pittman’s termination, of $473,289, which is equal to the sum of 12 months of Mr. Pittman’s base salary, plus 100% of Mr. Pittman’s annual bonus for the 2019 fiscal year, and (ii) to the extent Mr. Pittman elects COBRA continuation coverage, for a period of 12 months after termination the Company will reimburse Mr. Pittman for the difference between the amount Mr. Pittman pays for such health, dental and vision benefits for him, his spouse and his eligible dependents and the employee contribution amount that the Company’s active employees pay for comparable coverage, in each case, less any applicable taxes and withholding (estimated value $9,479). Under Mr. Pittman’s employment agreement, the first installment of the $473,289 cash severance payment is not payable until the date that Mr. Pittman’s general release is no longer revocable, or, if later, the Company’s first payroll date occurring on or after the 60th day following Mr. Pittman’s termination.

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Departure of James M. Miller

On January 31, 2020, the Company eliminated the position of Senior Vice President – Operations, on which date Mr. Miller ceased to be an executive officer of the Company. In accordance with Mr. Miller’s employment agreement, and subject to execution by Mr. Miller of full release of claims against the Company, Mr. Miller was entitled to receive his unpaid salary and accrued but unpaid vacation pay, in each case, through January 31, 2020. He was also entitled to any vested benefits under the Company’s 401(k) plan. In connection with Mr. Miller’s separation, the Company accelerated the vesting of 57,004 shares of time-based restricted stock previously granted to Mr. Miller and previously scheduled to vest on April 1, 2020. The remainder of Mr. Miller’s unvested equity awards (consisting of 8,797 unvested shares of restricted stock and 125,000 shares of unvested RSUs) were forfeited as of his termination date.

Since Mr. Miller worked for the Company throughout the full 2019 fiscal year, he was also entitled to receive his full annual bonus for 2019 ($249,411), payable when the Company paid annual bonuses to its executives. Additionally, beginning on March 13, 2020, the Company began remitting a total of $640,951, equal to the sum of Mr. Miller’s annual salary on his termination date and his 2019 Annual Bonus, which will be paid out over a 12-month period as a separation payment. Furthermore, to the extent Mr. Miller elects COBRA continuation coverage, for a period of 18 months after termination the Company will pay on Mr. Miller’s behalf the premium costs he incurs for that coverage (estimated value $35,115).

Mr. Miller is subject to non-solicitation, non-competition, and confidentiality restrictions as set forth in his employment agreement with the Company.

Departure of Mark W. Ver Hoeve

On April 17, 2020, Mark Ver Hoeve retired and ceased to serve as Vice President–Geoscience of the Company. Because Mr. Ver Hoeve is not party to an employment agreement with the Company, he is entitled to receive the following separation benefits under the Severance Plan, subject to his entry into a general release in the form provided by the Company: (i) an aggregate cash severance amount, payable in substantially equal installments over a 12-month period, of $408,436, which is equal to the sum of Mr. Ver Hoeve’s base salary, plus 100% of Mr. Ver Hoeve’s projected annual bonus for the 2020 fiscal year, prorated for the number of days Mr. Ver Hoeve was employed by the Company in the 2020 fiscal year (estimated value of $61,436 based on Mr. Ver Hoeve’s target opportunity) and (ii) to the extent Mr. Ver Hoeve elects COBRA continuation coverage, for a period of 12 months after termination, the Company will reimburse Mr. Ver Hoeve for such coverage at the same rate as it pays for health insurance coverage for its active employees (with Mr. Ver Hoeve required to pay for any employee-paid portion of such coverage), in each case, less any applicable taxes and withholding (estimated value $9,479). Under the Severance Plan, the first installment of the $408,436 cash severance payment is not payable until the date Mr. Ver Hoeve’s general release is no longer revocable, or, if later, 60 days following Mr. Ver Hoeve’s termination. The severance payments and COBRA benefits described above are subject to Mr. Ver Hoeve’s continued compliance with certain confidentiality, non-competition and non-solicitation provisions of the Participation and Restricted Covenant Agreement executed by Mr. Ver Hoeve in order to participate in the Severance Plan.

CEO Pay Ratio

As required by Item 402(u) of Regulation S-K, we are providing disclosure regarding the annual total compensation of Charles Duginski, our Chief Executive Officer and President, to the annual total compensation of our median employee. Mr. Duginski joined the Company as our Chief Executive Officer on December 20, 2019. Therefore, in order to make this disclosure more meaningful, we have moved our determination date from December 1st to December 31st. We believe that the pay ratio set forth below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. Due to estimates, assumptions, adjustments and statistical sampling permitted under the rules, pay ratio disclosures may involve a degree of imprecision and may not be consistent with the methodologies incorporated by other companies.

As of December 31, 2019, our employee population, excluding Mr. Duginski, consisted of 120 individuals. We identified the median employee by adding together the following compensation measures for each employee:

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After identifying the median employee, we calculated the total annual compensation for such employee using the same methodology we use for our NEOs as set forth in the 2019 Summary Compensation Table. Mr. Duginski’s total compensation, for purposes of the pay ratio, differs from his total compensation disclosed in the Summary Compensation Table because the pay ratio calculation includes Mr. Duginski’s annualized salary instead of the salary he earned in the short period he worked for the Company in 2019. We did not annualize Mr. Duginski’s new hire equity awards or his sign-on bonus because the values of those items were not impacted by his December 2019 start date.

For 2019:

Based on this information, the ratio of our CEO’s annualized total compensation to our median employee’s annual total compensation for 2019 was approximately 18 to 1.

Director Compensation

At year-end 2019, our cash compensation plan for non-employee directors consisted of:

In August 2019, recognizing that extraordinary volatility in the commodities market was negatively affecting the retentive effect of the restricted stock component of the Company’s non-employee director compensation program, the Compensation Committee and Board evaluated alternative compensation schemes in order to retain the insight required of current, experienced board members in a down cycle. In evaluating these compensation arrangements, the Compensation Committee considered the input of the Compensation Committee’s independent compensation consultant and reviewed peer data. Taking those goals and considerations into account, the Compensation Committee and Board approved a revised director compensation program at that time. The revised program increased the annual cash retainer for the non-employee Chairman of the Board from $100,000 to $225,000 and the annual cash retainer for the Company’s other non-employee directors from $65,000 to $150,000 and established an equity component of compensation for non-employee directors consisting of 10,000 RSUs awarded annually to non-employee directors and 20,000 RSUs awarded annually to the non-employee Chairman of the Board. Although the cash portion of the compensation program increased, the Company’s total director compensation remained well below the median of the peer group that was considered.

Earlier in the year, the Board established a special committee, consisting of Messrs. Brooks, Langford and Rowland. The special committee was formed for the purpose of providing oversight with respect to a review of the Company’s assets and operations conducted by a third party consultant, including the consideration of whether and how to implement any of the consultant’s recommendations resulting from that review. Each member of the special committee received $20,000 for such service.

In addition, in recognition of the significant amount of time that Kenneth W. Moore, Chairman of the Nominating and Governance Committee, and Matthew Cabell, then Chairman of the Compensation Committee, devoted to the corporate governance changes and executive transition contemplated by the Amended SVP Support Agreement, the Compensation Committee and the Board (with both Mr. Moore and Mr. Cabell recusing themselves) awarded each of those committee chairmen a supplemental cash fee of $20,000, payable promptly following the completion of the actions contemplated by the Amended SVP Support Agreement.

We also reimburse all of our directors for reasonable out-of-pocket expenses incurred by them in connection with their service as a director.

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The following table discloses compensation awarded to our non-employee directors in 2019. Neither Mr. Duginski nor Mr. Reynolds received additional compensation for their service on the Board during 2019. Please see the 2019 Summary Compensation Table for information regarding the compensation each received during 2019 for their service as executive officers of the Company.

Compensation Policies and Risk Management

While our Board strives to create incentives that encourage a level of risk-taking behavior consistent with our business strategy, our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on our operations or financial condition.

provide compensation information in this Report, (3) each person known by us to be the beneficial owner of more than 5% of our outstanding Common Stock and (4) all of our directors and executive officers as a group. As of April 20, 2020, there were 47,789,426 shares of Common Stock issued and outstanding.

For purposes of the table below, we deem Common Stock subject to RSUs that are scheduled to vest within 60 days of April 20, 2020 (or with respect to which the holder otherwise has the right to receive shares now or during that 60 day period) to be outstanding and to be beneficially owned by the person holding the RSUs for the purpose of computing the percentage ownership of that person, but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person. Shares of restricted stock (in contrast with RSUs) are treated as outstanding and beneficially owned by the person holding those shares, regardless of whether fully vested or when they will vest. Except as otherwise noted, the persons or entities in this table have sole voting and investing power with respect to all of the Common Stock beneficially owned by them, subject to community property laws, where applicable. Except as expressly stated otherwise, the address for each of the beneficial owners listed below is: 701 Cedar Lake Boulevard, Oklahoma City, OK 73114.

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Securities Authorized for Issuance under Equity Compensation Plans

The table and other information included in Item 5 of the Original Report under the heading “Securities authorized for issuance under equity compensation plans” is hereby incorporated by reference into Item 12.

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