On August 14, 2024, US Energy Corp (NASDAQ:USEG), an oil and natural gas company, announced a renewed employment agreement with CEO Ryan Smith, effective as of July 1, 2024. The new contract secures Smith's leadership until January 1, 2027, with automatic renewals for successive two-year periods thereafter.
Under the revised terms, Smith will receive an annual base salary of $335,475 and is eligible for a performance-based annual cash bonus, with a target set at 100% of his base salary. However, the actual bonus may vary and is not guaranteed. Smith's compensation package also includes eligibility for long-term equity incentive grants under the company's equity compensation plans, which are at the discretion of the compensation committee.
In addition to standard benefits such as health insurance and retirement plans, Smith may receive discretionary bonuses in cash or equity at the board's discretion. His salary may also be increased periodically without the need for a contract amendment.
The agreement outlines various scenarios for termination, including for "cause," due to disability, or without "cause." Depending on the circumstances, Smith may be entitled to severance benefits, including a lump sum payment and accelerated vesting of equity awards, subject to the execution of a release in favor of the company.
In the event of a change of control, Smith is entitled to additional compensation, including a lump-sum payment equal to two times his base salary and target bonus, and potentially a bonus related to the transaction.
The agreement includes non-compete clauses, prohibiting Smith from competing with US Energy Corp in counties where the company holds mineral lease interests for six months post-termination and from soliciting the company's employees or business relations for twelve months.
This information is based on a press release statement and the company's SEC filing.
In other recent news, U.S. Energy Corp . has made a definitive agreement to sell its South Texas assets for an estimated $6.5 million in cash. The assets, which contributed to approximately 13% of the company's total production in the first quarter of 2024, are located in Karnes County, Texas. The sale, expected to close by the end of July 2024, will mark U.S. Energy Corp.'s departure from operations in South Texas, aligning with the company's strategy to optimize its asset portfolio.
The proceeds from the sale are anticipated to fund the development of recently acquired helium assets and to repay outstanding debt. CEO Ryan Smith emphasized the sale's role in enhancing U.S. Energy Corp.'s financial position through increased liquidity and a strengthened balance sheet. The company's recent focus on helium assets aligns with its broader strategy to consolidate high-quality assets in the United States.
These recent developments are part of U.S. Energy Corp.'s commitment to optimizing production, generating free cash flow, and providing attractive returns to shareholders, all while reducing its carbon footprint. However, due to the impact of Hurricane Beryl, an investor call to discuss these transactions has been rescheduled.
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