Employee Benefit Plans

12 Months Ended

Dec. 31, 2020

Employee benefit plans [Abstract]

Employee Benefit Plans

EMPLOYEE BENEFIT PLANS

Under our 401(k) Employee Thrift Plan, employees who meet specified service requirements may contribute a percentage of their total compensation, up to a specified maximum, to the plan. We may match each employee’s contribution, up to a specified maximum, in full or on a partial basis with cash or common stock. We made discretionary contributions under the plan of 310,797 shares of common stock in 2019 for the plan year 2018. The 2019 plan year matching contribution was made in cash instead of shares of common stock. On the Effective Date, all the shares of old common stock under the 401(k) Employee Thrift Plan were cancelled and each holder that did not opt out of the release under the Plan was entitled to receive his or her pro rata share of the Warrants in accordance with the Plan.

Total 401(k) employer matching expense was $0.7 million, $1.4 million, and $5.2 million in the Successor Period of 2020, the Predecessor Period of 2020, and the year 2019, respectively.

We provided a salary deferral plan for our executives (Deferral Plan) which allowed participants to defer the recognition of salary for income tax purposes until actual distribution of benefits occurred at either termination of employment, death, or certain defined unforeseeable emergency hardships. The liability recorded under the Deferral Plan at December 31, 2019 was $6.2 million. We recognized payroll expense and recorded a liability at the time of deferral. As of December 31, 2020, investments held in the Deferral Plan had been paid out to plan participants and the plan was terminated.

As of the Effective Date, the Board adopted (i) the Amended and Restated Separation Benefit Plan of Unit Corporation and Participating Subsidiaries (Amended Separation Benefit Plan), (ii) the Amended and Restated Special Separation Benefit Plan of Unit Corporation and Participating Subsidiaries (Amended Special Separation Benefit Plan) and (iii) the Separation Benefit Plan of Unit Corporation and Participating Subsidiaries (New Separation Benefit Plan). In accordance with the Plan, the Amended Separation Benefit Plan and the Amended Special Separation Benefit Plan allow former employees or retained employees with vested severance benefits under either plan to receive certain cash payments in full satisfaction for their allowed separation claim under the Chapter 11 Cases. In accordance with the Plan, the New Separation Benefit Plan is a comprehensive severance plan for retained employees, including retained employees whose severance did not already vest under the Amended Separation Benefit Plan or the Amended Special Separation Benefit Plan. The New Separation Benefit Plan provides eligible employees with two weeks of severance pay per year of service, with a minimum of four weeks and a maximum of 13 weeks of severance pay. These benefits vest after 20 years of service provided to the company. We recognized expense of $1.4 million. $18.1 million, and $3.8 million in the Successor Period of 2020, the Predecessor Period of 2020, and the year 2019, respectively, for benefits associated with anticipated payments from these separation plans.