header image

[Sign Up Now] to Receive Our FREE Daily SCVTV-SCVNews Digest by E-Mail

Inside
Weather
Santa Clarita CA
Mostly clear
Mostly clear
59°F
 
Calendar
Today in
S.C.V. History
September 27
2014 - Towsley Canyon Loop Trail named for naturalist Don Mullally [story]
Don Mullally


CEO Mark E. Ellis will receive up to $6.9 million this year in cash bonuses, and other executives will receive millions if they stay through the coming restructuring of their oil company.

Floundering over the last two years as world oil prices have plummeted, late last week LINN Energy, the Houston-based owner of the company that operates the Placerita Oil Field, announced it was drawing down the last $919 million of its $3.6 billion credit facility. It also said it has hired law firms and a merger and restructuring specialist to help it get its balance sheet under control.

Corporations often offer cash incentives to top executives to stay through a merger or bankruptcy reorganization.

On Thursday, LINN reported to the Securities and Exchange Commission that its board approved a new incentive plan and a severance plan.

The incentive plan, it said, is open to the CEO and officers with the title of executive or senior vice president, which it listed as follows:

Mark E. Ellis, CEO, $6.9 million; David B. Rottino and Arden L. Walker Jr., executive vice presidents, $2.7 million each; and SVPs Jamin B. McNeil, Thomas Emmons and Candice J. Wells at approximately $1 million each.

Incentive payments are to be made quarterly, the company said, based on yet-to-be-determined criteria; although the first-quarter payments will be made simply if the executives are still there at the end of the quarter.

From close to $30 two years ago when it bought the company that operates the Placerita Oil Field, LINN shares fell to 32 cents Monday and its affiliate LinnCo fell to 20 cents.

Just a tiny fraction of LINN’s portfolio, the Placerita Oil Field is the oil operation west of Sierra Highway in Newhall, including the cogeneration (power) facility off of Placerita Canyon Road. It has been operated by one company or another – sometimes multiples companies – since about 1948.

The full 8-K filing follows.

 

 

berry-linnenergyForm 8-K for LINN ENERGY, LLC

4-Feb-2016

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an

Off-Balance Sheet Arrangement of a Registrant.

On February 2, 2016, Linn Energy, LLC (the “Company”) borrowed approximately $919 million under the Sixth Amended and Restated Credit Agreement, dated as of April 24, 2013, by and among the Company, as borrower, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto, as amended and currently in effect (the “Credit Facility”), which represents the remaining undrawn amount that was available under the Credit Facility. These funds are intended to be used for general corporate purposes.

As of February 3, 2016, following the funding of this borrowing, the aggregate utilization under the Credit Facility was $3.6 billion, including the $500 million term loan and approximately $6 million of outstanding letters of credit, with no remaining availability. These new borrowings were initially designated as ABR loans with an interest rate of 4.75%.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. On February 2, 2016, as part of a comprehensive new compensation program for 2016 for all employees, executive officers and independent directors, the Compensation Committee of the Board of Directors of the Company adopted the Linn Energy, LLC Executive Incentive Plan, the Linn Energy, LLC Severance Plan and an amendment and restatement of the Linn Energy, LLC Change of Control Protection Plan.

Executive Incentive Plan

The Linn Energy, LLC Executive Incentive Plan (the “Incentive Plan”) is intended to enable the Company’s executive officers to earn cash compensation during the 2016 calendar year. The Company’s Chief Executive Officer and any employee with a title of Executive Vice President or Senior Vice President participate in the Incentive Plan.

Pursuant to the terms of the Incentive Plan, the Compensation Committee (the “Committee”) of the Board of Directors of the Company assigns a target incentive award to each participant. The target incentive award is intended to approximate the sum of the participant’s (i) target bonus amount under the Company’s existing Employee Incentive Compensation Program (“EICP”) and (ii) target annual long term incentive amount, each as determined by the Committee using competitive market data. Payments under the Incentive Plan are made quarterly based on achievement of performance goals to be established by the Committee, although the Committee has discretion, for the first quarter of 2016 only, to make the payment based solely on a participant’s continued employment with the Company through the end of such quarter. The total amount of all payments under the Incentive Plan may not exceed the amount of the participant’s target incentive award.

Generally, a participant must be employed by the Company on the applicable payment date in order to earn a quarterly payment with respect to the target incentive award. However, if a participant is terminated involuntarily by the Company without “Cause,” terminates employment voluntarily due to “Good Reason” or is terminated due to death or “Disability” (with all capitalized terms defined in the Incentive Plan), then the participant will receive a pro-rated amount of the quarterly payment the participant would have earned for the quarter in which the termination occurs had the participant remained employed through the applicable payment date.

On February 2, 2016, the following target awards under the Incentive Plan were granted to our Chief Executive Officer, Chief Financial Officer and other executive officers:

Executive Officer Title Target Incentive Award

Mark E. Ellis Chairman, President and $6,900,000
Chief Executive Officer

David B. Rottino Executive Vice President and $2,700,000
Chief Financial Officer

Arden L. Walker, Jr. Executive Vice President and $2,700,000
Chief Operating Officer

Jamin B. McNeil Senior Vice $1,131,250
President-Houston Division
Operations

Thomas Emmons Senior Vice President – $1,108,750
Corporate Services

Candice J. Wells Senior Vice President, $990,000
General Counsel and
Corporate Secretary
Severance Plan

The Linn Energy, LLC Severance Plan (the “Severance Plan”) is intended to offer specific severance benefits to eligible employees in the event of certain involuntary terminations of employment that are not in connection with a change of control of the Company. Severance benefits after a change of control of the Company, if any, are provided under the Linn Energy, LLC Change of Control Protection Plan discussed below. The Severance Plan is administered by the Committee.

Participants in the Severance Plan are assigned to a “Tier,” and the benefits under the Severance Plan vary depending on the participant’s Tier. Unless otherwise determined by the Committee, Tier 1 participants are Company employees with a title of Senior Vice President and include our executive officers, other than Mr. Ellis, Mr. Rottino and Mr. Walker, each of whom has an existing employment agreement with the Company that provides for severance benefits. All participants are entitled to benefits under the Severance Plan if terminated involuntarily by the Company other than due to “Cause,” as defined in the Severance Plan. In addition, participants assigned to Tiers 1 and 2 of the Severance Plan are entitled to benefits upon a voluntary termination for “Good Reason,” as defined in the Severance Plan. All benefits under the Severance Plan are subject to the participant releasing any claims against the Company and its affiliates. Participants in Tier 1 and Tier 2 are subject to non-compete covenants for a period of nine months and six months, respectively, and non-solicitation covenants for a period of one-year after termination of employment.

Benefits under the Severance Plan include a lump sum cash payment based on the participant’s base salary, continued health care coverage at subsidized active-employee rates for a period of time, and outplacement assistance for a period of time. The benefits applicable to Tier 1 participants in the Severance Plan are as follows:

Cash Payment Months of Subsidized Months of Outplacement (Months of Salary) Health Care Coverage Assistance Tier 1 18 18 6

Change of Control Protection Plan

The Linn Energy, LLC Change of Control Protection Plan (the “COC Plan”) was originally adopted by the Committee effective April 25, 2009. The COC Plan provides severance compensation to participants, including the Company’s executive officers who do not have employment agreements with the Company, upon a termination following a “Change of Control,” as defined in the COC Plan. In situations involving a merger or acquisition, the

COC Plan promotes the ability of participants to act in the best interests of the Company and unitholders, even though the participant could be terminated as a result of the transaction.

Effective February 2, 2016, the Committee approved the amendment and restatement of the COC Plan to expand the classes of participants in the COC Plan and add a provision to the COC Plan regarding excess parachute payments. The COC Plan provides certain benefits if a participant is terminated involuntarily by the Company other than due to “Cause,” death or “Disability” or terminates employment voluntarily due to “Good Reason” (as such terms are defined in the COC Plan) during the period ending two years following a Change of Control. Participants in the COC Plan are assigned to a “Tier,” and the benefits under the COC Plan vary depending on the participant’s Tier. Unless otherwise determined by the Committee, Tier 1 participants are Company employees with a title of Senior Vice President and include our executive officers, other than Mr. Ellis, Mr. Rottino and Mr. Walker, each of whom has an existing employment agreement with the Company that provides for Change of Control benefits. The Company’s executive officers may designate the classification of a participant below Tier 1.

Benefits under the COC Plan include a lump sum cash payment based on the participant’s base salary and target bonus, a pro-rated payment of the participant’s target bonus in the year of termination, continued health care coverage at subsidized active-employee rates for a period of time, and outplacement assistance for a period of time. For purposes of the COC Plan, “target bonus” is the target bonus under the Company’s existing EICP, excluding special bonuses, for the year in which the participant is terminated, or if no target bonus has been established for such year, the most recent target bonus declared for the participant. Target bonus for employees in quarterly bonus plans is equal to the annualized quarterly bonus amount. The benefit applicable to Tier 1 participants in the COC Plan are as follows:

Salary and Target Months of Subsidized Months of Outplacement Bonus Multiple Health Care Coverage Assistance Tier 1 2.0 18 6

Severance under the COC Plan is subject to offset for severance owed to the participant under a plan of a prior employer, and the pro-rated target bonus is subject to reduction to the extent the bonus plan provides for a payment of all or a portion of the bonus for the year of termination. If any portion of the severance benefits or payments under the COC Plan, or under any other agreement with the Company or its subsidiaries, would constitute an excess parachute payment and subject the participant to excise tax, then the COC Plan severance benefits and payments will be paid in full (with the participant liable for all taxes) or reduced such that no excise tax is incurred, depending on which method results in the greater after-tax net benefit to the participant.

The descriptions of the Executive Incentive Plan, the Severance Plan and the COC Plan set forth above are qualified in their entirety by the relevant plan documents, which will be filed with the Company’s Annual Report Form 10-K for the year ended December 31, 2015.

Item 8.01 Other Events.

On February 4, 2016, the Company issued a press release announcing the retention of Lazard and Kirkland & Ellis LLP to advise as to strategic alternatives related to the Company’s capital structure. A copy of the press release is attached to this Report as Exhibit 99.1. Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1 Press Release of Linn Energy, LLC dated February 4, 2016.

Comment On This Story
COMMENT POLICY: We welcome comments from individuals and businesses. All comments are moderated. Comments are subject to rejection if they are vulgar, combative, or in poor taste.
REAL NAMES ONLY: All posters must use their real individual or business name. This applies equally to Twitter account holders who use a nickname.

1 Comment

  1. waterwatcher says:

    So they are allocating a LOT of money to keep their execs working. Are they allocating any money for closure and/or clean up, if that is where all this is going? Some of those wells are pretty old and could present some serious issues.

Leave a Comment


Latest Additions to SCVNews.com
2014 - Towsley Canyon Loop Trail named for naturalist Don Mullally [story]
Don Mullally
1876 - California oil industry born as CSO No. 4 in Pico Canyon becomes state's first commercially productive oil well [story]
Pico No. 4
1970 - Lagasse family helps save Mentryville buildings as Newhall and Malibu brush fires erupt & join into worst fire in SoCal history. Twelve fires over 10 days burn 525,000 acres, kill 13 people and destroy approx. 1,500 structures. [story]
Clampitt fire
After news reports detailing sexual assault allegations against a Newhall massage therapist on Sept. 2, a half-dozen additional victims have come forward, according to sheriff’s investigators.
Additional Victims Come Forward in Newhall Massage Therapist Sexual Assault Investigation
Sen. Scott Wilk, R-Santa Clarita, welcomed news of Gov. Gavin Newsom’s veto of Assembly Bill 616 on Wednesday.
Newsom Vetoes Agricultural Worker Union Elections Bill Opposed by Wilk
Los Angeles County Public Health officials on Friday confirmed 32 new deaths and 1,238 new cases of COVID-19 countywide, with 35,524 total cases in the Santa Clarita Valley. Additionally, Public Health announced that eligible Los Angeles County residents can begin receiving their booster doses at any of the hundreds of sites offering the Pfizer vaccine.
Friday COVID-19 Roundup: County Announces Pfizer Booster Available to Eligible Residents; 35,524 Total SCV Cases
Yair Haimoff, SIOR and Randy Cude of Spectrum Commercial Real Estate, Inc., are pleased to announce a recent 71,874-square-foot ground lease located in Valencia, CA.
Spectrum CRE Completes Ground Lease with Tenant In-N-Out Burgers
Los Angeles County announced it is now administering Pfizer booster third doses after the Centers for Disease Control and Prevention Director Rochelle P. Walensky endorsed the CDC Advisory Committee on Immunization Practices’ recommendation for a booster dose of the Pfizer COVID-19 vaccine in several population groups. The CDC also recommended a booster dose for those in high-risk occupational and institutional settings.
County Begins Administering Pfizer Booster to Eligible Residents
1855 - Sanford & Cyrus Lyon establish Lyon's Station (for stagecoaches) near today's Sierra Hwy & Newhall Ave [story]
Sanford Lyon
Officials from Henry Mayo Newhall Hospital are once again urging those eligible to get vaccinated, as the hospital is experiencing a marked influx of COVID-19 patients, hospital spokesman Patrick Moody said Thursday.
Thursday COVID-19 Roundup: Henry Mayo Hospital Admittance Up 50%; SCV Cases Total 35,477
A “significant amount of smoke” from the Windy and KNP Complex fires northeast of Bakersfield in the Sequoia National Forest have entered the Los Angeles area, according to a Thursday morning tweet from the U.S. National Weather Service Los Angeles.
Hazy SCV Skies from Sequoia Forest Fires
Spookiness is on its way to Main Street in Old Town Newhall.
Scarecrow Alley Coming to Old Town Newhall
The Chiquita Canyon Landfill Technical Advisory Committee met Wednesday afternoon to discuss updates at the Val Verde landfill.
Chiquita Canyon Landfill Health Report Nearing Final Process
Following a record-breaking event in 2020 – Soup for the Soul will once again be presented virtually in 2021.
Tickets Now on Sale for Bridge to Home’s 2021 Soup for the Soul Virtual Fundraiser
The city of Santa Clarita’s annual Evening of Remembrance event will occur on Wednesday, Sept. 29, beginning with a Walk of Remembrance at 6:15 p.m., followed by the program at 6:45 p.m.
Community Invited to Annual Evening of Remembrance
College of the Canyons is continuing its tradition of inviting community groups to experience Cougar football during the 2021 season, with all healthcare workers and first responders invited to attend Saturday’s game vs. Palomar College free of charge.
Cougars Football Continuing with Community Invite Tradition
The Santa Clarita chapter of the American Cancer Society is excited to announce its annual leading fundraiser of the year — Relay For Life - will take place on Saturday, Oct. 2, at the Westfield Town Center Mall, from 11:00 a.m. to 9:00 p.m.
Oct. 2: American Cancer Society’s Relay for Life
At least one person was reported wounded in a shooting in Newhall Wednesday night, prompting a response from law enforcement and medical personnel.
Newhall Shooting Sends One Person to Hospital
Are you ready for a “Partea”? Circle of Hope’s 17th Annual Tea Celebration will be held at the Hyatt Regency Valencia on Saturday, Oct. 9, beginning at 11:00 a.m.
Oct. 9: Circle of Hope’s 17th Annual Tea Celebration
SACRAMENTO — State Superintendent of Public Instruction Tony Thurmond proudly recognized Betty Reid Soskin, a pioneering Bay Area civil rights activist and the oldest living National Park Ranger serving in the United States, as an Ambassador to California Education on her 100th birthday.
Betty Reid Soskin Named California’s Newest Education Ambassador
The Mojave Area California State Parks  recently announced status updates for public use.
Status Updates Released for Mojave Area State Parks
1948 - Agua Dulce Women's Club organized [timeline]
Women's Club
The Santa Clarita Planning Commission approved the installation and operation of a Verizon wireless communication facility that will expand wireless coverage in the city’s center. 
Verizon Wireless Facility Approved By Planning Commission
State Senator Scott Wilk is honoring four Hispanic community leaders to commemorate National Hispanic Heritage Month. 
Wilk Honors Local Hispanic Community Leaders
SCVNews.com
%d bloggers like this: