declared during the performance period will be paid at the end of the three-year performance period only on shares delivered for earned units. The NEOs’ equity award agreements governing the performance unit awards also provide for a double trigger acceleration of vesting. Vesting will not automatically accelerate upon a change in control (although, the number of shares subject to the executive’s award will be determined based on performance through the date of the change in control and thereafter convert into a time-based restricted stock unit), which will only vest prior to the original vesting date if both a change in control and a qualifying termination event occur. In addition, the NEOs’ performance unit award agreements provide for certain favorable vesting terms upon a qualifying termination event occurring without a change in control.
Amendment to Change in Control Agreements. On February 8, 2023, the Committee also approved an amendment to the Pioneer Natural Resources Company Change in Control Agreements previously entered into with each NEO. The Change in Control Agreements, as amended, provide that, if within two years following a change in control (1) the executive officer terminates employment for “Good Reason” (as defined in the amended Change in Control Agreement) or (2) the Company terminates the executive officer’s employment other than for cause, death, or disability, then the Company must provide the executive officer with: (A) a separation payment, (B) a lump sum cash payment equal to the maximum contribution that the Company would have been required to make on behalf of the executive to any retirement and/or deferred compensation plans in which the executive participates immediately prior to the date of the termination of employment as if the executive had remained fully employed for 36 months following the termination event, based on the elective deferral contribution rate that executive had made under such plans in the last complete calendar year preceding the date of termination, (C) continued coverage for the executive and his or her eligible dependents under the Company’s group medical plans at no cost for a period of 36 months following the termination of employment, and thereafter at active employee premium rates from such 36-month anniversary through the earlier of Medicare eligibility or the date of the executive’s (or for the executive’s spouse, the date of the spouse’s death), with such coverage being secondary to any other coverage made available to the executive by a subsequent employer, (D) relocation benefits under certain circumstances; (E) full vesting at the time of such termination of employment of any equity-based awards that were granted pursuant to the Company’s long-term incentive plan and were outstanding on the date of the change in control (with any performance vesting being based on the achievement of performance criteria as measured at the time of the change in control), and (F) any earned salary and vested benefits (the “Accrued Obligations”). The separation payment is an amount equal to the sum of (1) 2.99 times the sum of the executive’s (a) base salary and (b) the greater of (x) the Target Bonus (as defined in the amended Change in Control Agreements) or (y) the average of the annual bonus paid to the executive over the three-year period preceding the effective date of the amendment to the change in control agreement, and (2) a pro-rated bonus based on the executive’s Target Bonus and the number of days in the then current calendar year that have elapsed as of the date of termination. Upon the executive’s death, disability, or normal retirement within the two-year period following the change in control, in lieu of the above payments and benefits, the executive is entitled to receive one year of base salary and any Accrued Obligations.
The foregoing description of the time-based restricted stock unit awards, the performance unit awards, and the amended change in control agreements is qualified in its entirety by reference to the full text of the Restricted Stock Unit Award Agreement, Performance Unit Award Agreement, and the Amended and Restated Change in Control Agreement, copies of which will be filed as exhibits on the Company’s Annual Report on Form 10-K for the year ending December 31, 2022.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On February 9, 2023, the Board approved the amendment and restatement of the bylaws of the Company (the “Bylaws”), effective as of such date. The changes effected by the amendment and restatement of the Bylaws were to, among other things, (i) provide detailed procedures consistent with market practice for the calling, holding and adjournment of meetings of stockholders, (ii) update the procedures and disclosure requirements for stockholder list availability, in line with recent amendments to the Delaware General Corporation Law, (iii) update the procedures and disclosure requirements, in line with market practice, for the nomination of director nominees for election at meetings of stockholders to address the adoption of rules and regulations of the U.S. Securities and Exchange Commission regarding universal proxy cards set forth in Rule 14a-19 under the Securities Exchange Act of 1934 (the “Universal Proxy Card Rules”), including requiring that nominating stockholders comply with the Universal Proxy Card Rules, (iv) revise notice procedures, in line with market practice, for giving notice to stockholders, the Company and directors, and (v) make minor clarifying changes.
The description of the amendments to the Bylaws set forth above is qualified in its entirety by reference to the text of the Bylaws, a copy of which is filed hereto as Exhibit 3.1 and incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
