8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(D) 
of the Securities Exchange Act of 1934

Date of report (date of earliest event reported): April 3, 2023

Civitas Resources, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-35371	61-1630631
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

410 17th Street, Suite 1400
Denver, Colorado	80202
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (720) 440-6100

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading  Symbol(s)	Name of each exchange  on which registered
Common Stock, par value $0.01 per share	CIVI	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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

Appointment of T. Hodge Walker as Chief Operating Officer

On April 3, 2023, Civitas Resources, Inc. (the “Company”) announced T. Hodge Walker as the new Chief Operating Officer of the Company, effective April 5, 2023, reporting to the Company’s President and Chief Executive Officer. He will succeed Matthew R. Owens, who has served as the Company’s Chief Operating Officer since November 1, 2021.

Mr. Walker, age 52, joins the Company from Chevron Corporation (NYSE: CVX) (“Chevron”), a Delaware corporation, where he served as vice president of Chevron’s Rockies Business Unit since October 2020 when Chevron acquired Noble Energy, Inc. (“Noble”). Prior to joining Chevron, Mr. Walker served as Senior Vice President responsible for Noble’s U.S. onshore operations. He also served as a director of Noble Midstream GP since July 2018 and Noble’s Vice President of West Africa and the U.S. Gulf of Mexico since 2014. Additionally, he served as Director of Strategic Planning, Environmental Analysis and Reserves; managed Noble’s operated West Africa assets, non-operated international assets and frontier business ventures; and was a member of the Noble business development team since 2007. Prior to joining Noble in 2007, Mr. Walker held various positions at Amoco Corporation and BP America. Inc. Mr. Walker earned a Bachelor of Science and Masters in Geology from Louisiana State University and completed the Harvard Advanced Management Program in 2018.

Employment Letter with T. Hodge Walker

In connection with his appointment, the Company and Mr. Walker have entered into an employment letter (the “Employment Letter”) providing the following compensation terms: (i) an annualized base salary of $765,000 per year; (ii) eligibility to participate in the Company’s long term incentive program with a target award equal to $2,295,000 per year, with the number of shares of the Company’s common stock subject to Mr. Walker’s 2023 long term incentive awards equal to the quotient of (a) $2,295,000 divided by (b) the volume-weighted average price of the Company’s common stock for the 30 trading days immediately preceding April 5, 2023 (the “Grant Date”), which will consist of: (1) 30% of the total target value in Restricted Stock Units (“RSUs”), subject to three-year ratable time vesting from the Grant Date; and (2) 70% of the 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 January 1, 2023 to December 31, 2025; (iii) a one-time grant of RSUs equal in number to the quotient of (a) $1,500,000 divided by (b) the volume-weighted average price of the Company’s common stock for the 30 trading days immediately preceding the Grant Date, subject to three-year ratable time vesting from the Grant Date; and (iv) participation in the Company’s Executive Change in Control and Severance Plan (the “Severance Plan”) as a Tier 2 Executive (as such term is defined in the Severance Plan). The RSUs and PSUs described above will be subject to the terms and conditions of award agreements that are substantially consistent with the award agreements issued to the other executive officers of the Company in respect of the RSUs and PSUs issued in 2023.

As a Tier 2 Executive under the Severance Plan, upon the termination of Mr. Walker’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 1.5x his then-current base salary, paid in equal monthly installments over a 18-month period following his termination and (ii) reimbursement for the cost of any COBRA premiums incurred by him during the 12-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 2.5x his then current base salary and (ii) reimbursement for the cost of any COBRA premiums incurred by him during the 18 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. Walker, a copy of which is attached as Exhibit 10.2 and incorporated by reference herein.

Matthew R. Owens Departure

In connection with the leadership transition, on April 3, 2023, Mr. Owens’ employment with the Company terminated effective immediately.

Item 7.01. Regulation FD Disclosure.

On April 3, 2023, the Company issued a press release with respect to the management changes described in Item 5.02 of this Current Report on Form 8-K. The press release is included in this report as Exhibit 99.1 and is incorporated herein by reference. This information shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
10.1	Employment Letter, dated as of April 5, 2023, by and between Civitas Resources, Inc. and T. Hodge Walker.
10.2	Form of Indemnity Agreement between Civitas Resources, Inc. and the directors and executive officers of Civitas Resources, Inc. (incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K (File No. 001-35371) filed with the Commission on November 3, 2021).
99.1	Press Release, dated as of April 3, 2023.
104	The cover page from this Current Report on Form 8-K, formatted in Inline XBRL

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 6, 2023	CIVITAS RESOURCES, INC.
	By:	/s/ Travis L. Counts
		Travis L. Counts
		Chief Legal Officer and Secretary

EX-10.1

Exhibit 10.1

555 17th Street, Suite 3700 Denver, CO  80202 (303) 293-9100 phone    

April 5, 2023

PRIVATE & CONFIDENTIAL

Mr. Hodge Walker

via email – t.hodge.walker@gmail.com

Re:       Employment Terms and Conditions– Chief Operating Officer

Dear Hodge:

Civitas Resources, Inc. (the “Company”) is pleased to offer you an employment position as Chief Operating Officer (“COO”), reporting to the Company’s President and Chief Executive Officer, effective as of April 5, 2023. In summary, as COO, compensation will be:

● An annualized base salary of $765,000, subject to annual review and periodic increases at the discretion of the Company’s Board of Directors (the “Board”), to be paid in accordance with the Company’s payroll practices in effect from time to time, subject to all applicable withholdings and deductions;

● Participation in the Company’s 2021 Long Term Incentive Plan (“LTIP”), subject to the terms and conditions of the LTIP and the award agreement(s) to be entered into thereunder, at the discretion of the Board and its Compensation Committee as further discussed below. The LTIP is administered by the Board and its Compensation Committee. Your annual “target” LTIP award will be equal to $2,295,000 per year. For 2023, you will receive your LTIP awards on the first day of your employment (the “Grant Date”), and the total number of Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”) included in your 2023 LTIP awards will be equal to the quotient of (i) $2,295,000 divided by (ii) the volume-weighted average price of the Company’s common stock for the 30 trading days immediately preceding the Grant Date (the “Grant Date Price”). Your 2023 LTIP awards will consist of the following mix of award vehicles (each of which will be subject to award agreements consistent with the 2023 grants that have been made to other executive officers of the Company):

o 30% of total target value in RSUs, subject to three-year ratable time vesting from the Grant Date; and

o 70% of total target value in PSUs based on the Company’s absolute total shareholder return relative to pre-established goals during the measurement period 1/1/2023 to 12/31/2025.

● A one-time grant to you on the Grant Date of RSUs, using the form of award agreement consistent with the 2023 RSUs that have been granted to other executive officers of the Company, equal in number to the quotient of (i) $1,500,000 divided by (ii) the Grant Date Price. The RSUs will vest ratably over a three-year period, one-third on each of the first three anniversaries of the Grant Date;

● Eligibility to participate in the Company’s 401(k) Plan, in accordance with such plan;

● Eligibility to participate in the Company’s health insurance plans upon your election subject to the terms and conditions of the plans;

● Eligibility to participate in the Company’s flexible benefit plan (Section 125 Plan); and

● Participation in the Company’s Executive Change in Control and Severance Plan (the “Severance Plan”) as a Tier 2 Executive (as such term is defined in the Severance Plan).

CORPORATE OFFICE

555 17th Street, Suite 3700

Denver, CO 80202

Office: 303.293.9100

Participation in all Company compensation and benefit plans would be subject to the terms and conditions of such plans. The Company may modify compensation and benefits from time to time as it deems necessary in accordance with the terms and conditions of the plans set forth above and the Company’s policies. All forms of compensation paid to an employee of the Company would be paid less all applicable taxes and withholdings.

The terms and conditions of employment set forth in this Employment Letter are contingent upon your signing the Company’s Employee Restrictive Covenants, Proprietary Information and Inventions Agreement (the “PIIA”) attached hereto as Exhibit A.

You will be expected to abide by the Company’s rules and regulations, as such may be modified by the Company from time to time.

Notwithstanding anything to the contrary, your employment with the Company is AT WILL. You may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying the Company, subject only to any rights or obligations that may be required by the Severance Plan or the PIIA, each as may be amended from time to time. Likewise, the Company may terminate your employment at any time and for any reason whatsoever, with or without cause or advance notice, subject only to any rights and obligations that may be required by the Severance Plan or the PIIA, as each may be amended from time to time.

In consideration for the benefits to be provided to you under this Employment Letter to which you are not currently entitled, by executing this Employment Letter, you hereby (i) accept the terms of employment outlined in this Employment Letter and (ii) acknowledge and agree that this Employment Letter constitutes the entire agreement between you and the Company concerning your employment (except as otherwise may be set forth in the LTIP and any agreements entered into thereunder, the Severance Plan, the PIIA or any Indemnification Agreement entered into between you and the Company (collectively, the “Additional Agreements”)), and supersedes and terminates all prior and contemporaneous agreements and understandings, both written and oral, between the parties with respect to its subject matters, except for the Additional Agreements. You agree that the Company has not made any promise or representation to you concerning this Employment Letter not expressed in this Employment Letter, and that, in signing this Employment Letter, you are not relying on any prior oral or written statement or representation by the Company, but are instead relying solely on your own judgment and the judgment of your legal and tax advisors, if any.

If you have any questions or need additional information, please feel free to contact me.

Sincerely,

/s/ M. Christopher Doyle

Name: M. Christopher Doyle

Title: President and Chief Executive Officer

Accepted and agreed:

/s/ Hodge Walker

Hodge Walker

Date: April 5, 2023                   

Exhibit A

Restrictive Covenants, Proprietary Information and Inventions Agreement

EX-99.1

Exhibit 99.1 

Civitas Resources, Inc. Appoints Hodge Walker Chief Operating Officer

DENVER -- (BUSINESS WIRE) -- Civitas Resources, Inc. (NYSE: CIVI) (“Civitas” or the “Company”) today announced that Hodge Walker has been appointed Chief Operating Officer, effective April 5, 2023. He will replace Matt Owens who has left the company.

Chris Doyle, President and CEO, said, “On behalf of the Board of Directors and the Company, I am pleased to welcome Hodge to Civitas. With more than 25 years of industry experience, Hodge has a proven track record of successfully leading teams and driving a culture of operational excellence. I am confident he will help advance our already strong team and our commitment to safe, efficient, and responsible operations. Finally, I would like to thank Matt for the significant contributions he has made toward our success, and wish him the best of luck in his future endeavors.”

Mr. Walker added, “I am honored to join Civitas at such an exciting time in its history. I look forward to working with Chris and the talented team to build on our strong foundation of operational performance and safely deliver for all our stakeholders.”

Mr. Walker most recently served as vice president of Chevron Corporation’s (NYSE: CVX) (“Chevron”) Rockies Business Unit, a position he held since October 2020 when Chevron acquired Noble Energy, Inc. (“Noble”). Prior to joining Chevron, Mr. Walker served as Senior Vice President responsible for Noble’s U.S. onshore operations. He also served as a director of Noble Midstream GP and Noble’s Vice President of West Africa and the U.S. Gulf of Mexico. Additionally, he served as Director of Strategic Planning, Environmental Analysis, and Reserves; managed Noble’s operated West Africa assets, non-operated international assets, and frontier business ventures; and was a member of the business development team. Prior to joining Noble in 2007, Mr. Walker held various positions of increasing importance at Amoco Corporation and BP America, Inc. He earned a BS and MS in Geology from Louisiana State University and completed the Harvard Advanced Management Program in 2018.

About Civitas Resources, Inc.

Civitas Resources, Inc. is Colorado’s first carbon neutral oil and gas producer and is focused on developing and producing crude oil, natural gas, and natural gas liquids in Colorado’s Denver-Julesburg Basin. The Company is committed to pursuing compelling economic returns and cash flow while delivering best-in-class cost leadership and capital efficiency. Civitas is dedicated to safety, environmental responsibility, and implementing industry leading practices to create a positive local impact. For more information about Civitas, please visit www.civitasresources.com.

Forward-Looking Statements and Cautionary Statements

Certain statements in this press release concerning future opportunities for Civitas, future financial performance and condition, guidance, and any other statements regarding Civitas’ future expectations, beliefs, plans, objectives, financial conditions, assumptions, or future events or performance that are not historical facts are “forward-looking” statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “estimate,” “probable,” “project,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “would,” “potential,” “may,” “might,” “anticipate,” “likely,” “plan,” “positioned,” “strategy,” and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to changes to business or employee relationships resulting from leadership changes and the ultimate timing, outcome and results of fully transitioning new leadership into the operations of the Company.

Additional information concerning other risk factors is also contained in Civitas’ most recently filed Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other Securities and Exchange Commission filings. Except as required by law, Civitas undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecasted by Civitas’ forward-looking statements.

Investor Relations:

John Wren, ir@civiresources.com

Media:

Rich Coolidge, info@civiresources.com

Source: Civitas Resources, Inc.

XML

Cover	Apr. 03, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Apr. 03, 2023
Entity File Number	001-35371
Entity Registrant Name	Civitas Resources, Inc.
Entity Central Index Key	0001509589
Entity Tax Identification Number	61-1630631
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	410 17th Street
Entity Address, Address Line Two	Suite 1400
Entity Address, City or Town	Denver
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80202
City Area Code	720
Local Phone Number	440-6100
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	CIVI
Security Exchange Name	NYSE
Entity Emerging Growth Company	false