EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2021

Employee benefit plans [Abstract]

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

Separation Benefit Plans. 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 allowed 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.

Also in accordance with the Plan, the New Separation Benefit Plan was 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 provided eligible employees that are involuntarily separated with two weeks of severance pay per year of service, with a minimum of four weeks and a maximum of 13 weeks. These benefits also vested for voluntary separation after 20 years of service provided to the company.

On November 1, 2021, the New Separation Benefit Plan was amended (Amended New Separation Benefit Plan) with consideration to the Divestiture Program to redefine which employees are entitled to the two weeks of severance pay per year of service with a minimum of four weeks and a maximum of 13 weeks as well as introduce new employee groups entitled to involuntary separation benefits equal to four months of base salary, six months of base salary, or 12 months of base salary if eligible upon involuntary separation. The Amended New Separation Benefit Plan maintains a 13 week severance benefit for voluntary separation which vests after 20 years of service provided to the company.

We recognized expense for benefits associated with anticipated payments from these separation plans of $3.4 million, $1.4 million, and $18.1 million during the year ended December 31, 2021, the four months ended December 31, 2020, and the eight months ended August 31, 2020, respectively.

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 401(k) Employee Thrift 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. The 2019 and 2020 plan year matching contributions were made in cash. Total 401(k) employer matching expense was $1.6 million, $0.7 million, and $1.4 million in the year ended December 31, 2021, four months ended December 31, 2020, and eight months ended August 31, 2020, respectively.

Salary Deferral Plan. We provided a salary deferral plan for our executives (Deferral Plan) during the eight months ended August 31, 2020 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. As of December 31, 2020, investments held in the Deferral Plan had been paid out to plan participants and the Deferral Plan was terminated.