Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes        No   

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.     Yes        No   

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes        No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation (§232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      Yes        No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule of the Exchange Act.

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check-mark whether the registrant is a shell company (as defined in Rule of the Act).    Yes       No  

Aggregate market value of the Company’s common stock held by of the registrant as of June 28, 2019, was $ 293,404,582 based on the closing price on the OTCQX Market.

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes       No  

 

 

 

is the President and Chief Executive Officer in addition to serving on the Board and has served in such capacity since April 2018. He previously served as the President and Chief Executive Officer of Linn Energy, Inc. (“LINN”), an independent natural gas exploration and production company, from August 2018 to September 2018 and as Executive Vice President and Chief Financial Officer and as a member of LINN’s board of directors from February 2017 to August 2018. Prior to that, he served as Linn Energy, LLC’s Executive Vice President and Chief Financial Officer from August 2015 to February 2017, as Executive Vice President, Business Development and Chief Accounting Officer from January 2014 to August 2015, as Senior Vice President of Finance, Business Development and Chief Accounting Officer from July 2010 to January 2014, and as Senior Vice President and Chief Accounting Officer from June 2008 to July 2010. The Board believes Mr. Rottino’s extensive executive experience with oil and natural gas companies brings valuable strategic, managerial and analytical skills to the Board.

is a member of the Board of Directors and has served in such capacity since January 2020. Mr. Mills has served as the President and Chief Executive Officer of Samson Resources II, LLC, privately held exploration and production company, since March 2017. Prior to joining Samson Resources II, LLC, Mr. Mills served as Chairman and Chief Executive Officer of Eagle Rock Energy G&P, LLC, an oil and natural gas exploration and production company and the general partner of Eagle Rock Energy Partners, L.P., from May 2007 until it merged with Vanguard Natural Resources, LP in October 2015. Mr. Mills also served as Chief Executive Officer and as a manager of Montierra Management LLC, the general partner of Montierra Minerals & Production, LP, from 2006 to October 2016. In addition, Mr. Mills previously served on the board of directors of Roan Resources, Inc. from November 2018 to December 2019 and CIU Global, Inc. from August 2015 to October 2016. Mr. Mills received a Bachelor of Business Administration degree in Petroleum Land Management from the University of Texas and a Master of Business Administration degree in Finance from the University of Houston. The Board believes that Mr. Mills’ extensive executive experience with oil and natural gas companies bring valuable strategic, managerial and analytical skills to the board.

is a member of the Board of Directors and has served in such capacity since March 2020. Mr. Rollins is a member of the investment team of Elliott Management Corporation (“Elliott”), a New trading firm, where he is responsible for various corporate investments. Prior to joining Elliott in August 2016, Mr. Rollins was a member of the investment team of First Reserve Corporation from August 2013 to July 2016 and prior to that held similar positions at Lazard Frères & Co. LLC (“Lazard”). Mr. Rollins earned a Bachelor of Science degree in Finance and International Business from the University of Virginia. The Board believes Mr. Rollins’ experience in the investment advisory industry brings substantial investment management skills to the Board.

is a member of the Board of Directors and has served in such capacity since April 2020. Mr. Skafidas joined York Capital Management (“York”), a global investment firm, in May 2015 and is a Vice President of the firm on the U.S. Credit Team. Prior to joining York, Mr. Skafidas worked as an investment banker at Goldman Sachs in the Natural Resources Group and prior to that worked at Lazard as an Analyst in the Financial Institutions Group. Mr. Skafidas is currently a Board observer of Samson Resources II, LLC. Mr. Skafidas received a Master of Science in Risk Management and Financial Engineering from the Imperial College, University of London and a Bachelor of Science in Economics from the University of Pennsylvania. The Board believes Mr. Skafidas’s experience in the investment advisory industry brings substantial investment management skills to the Board.

BOARD MEMBERS		AUDIT COMMITTEE				COMPENSATION COMMITTEE
David B. Rottino
Evan Lederman			✓				C
Joseph A. Mills			C				✓
Win Rollins							✓
Thanasi Skafidas			✓				✓

The Company employs a compensation philosophy that is intended to emphasize pay for performance (based on a combination of the Company’s performance and the individual’s impact on the Company’s performance) and place the majority of each officer’s compensation We consider compensation to be if it is subject to performance-based payment or vesting conditions or if its value depends on stock price appreciation. We believe this pay for performance approach aligns the interests of our NEOs who provide services to us with those of our stockholders. The Company’s executive compensation programs are designed to attract and retain individuals with the background and skills necessary to successfully execute our business model in a demanding environment, to motivate those individuals to reach near term and long term goals in a way that aligns their interests with those of our stockholders and to reward success in reaching such goals. As our needs evolve and as circumstances require, we expect to reevaluate our executive compensation philosophy, principal objectives and programs.

We held a advisory stockholder vote on the compensation program for our NEOs, commonly referred to as a vote, at our 2019 annual meeting of stockholders. Over 99% of the voting power of shares voted at the 2019 annual meeting of stockholders were cast in favor of our proposal. Our then compensation committee considered the result of this advisory vote to be an endorsement of our compensation program, policies, practices and philosophy for our NEOs, and we did not make any specific changes as a result of the vote. The Compensation Committee annually reevaluates our compensation practices to determine how they might be improved, and will continue to consider the outcome of our votes and our stockholders’ views when making compensation decisions for our NEOs.

Also at our 2019 annual meeting of stockholders, we held a separate advisory stockholder vote on the frequency of future votes, commonly referred to as a vote. Based on the results of this vote, the Board determined that we will hold our vote every three years until the next required vote. We will hold our next vote and our next vote at the 2022 annual meeting of stockholders.

There are three primary elements of compensation that were used in our executive compensation program in 2019: base salary, annual incentive bonus and equity incentive awards. Annual incentive bonuses and long-term equity incentives (as opposed to base salary) represent the performance-based elements of the compensation program. Performance-based compensation elements are intended to be flexible in application and capable of being tailored to meet our objectives. The determination of a specific NEO’s annual incentive bonus awarded in respect of a performance period is intended to reflect that NEO’s relative contribution to achieving or exceeding annual goals, and the determination of a specific NEO’s equity incentive awards is based on the NEO’s expected contribution in respect of longer term performance objectives.

The base salaries for our NEOs are intended to be competitive within the market and to enable us to attract and retain qualified NEOs. For 2019, we did not adjust the base salaries of our NEOs and instead adopted the base salaries provided by our predecessor. Going forward, we will review the base salaries of our NEOs on an annual basis and may make adjustments as necessary to maintain a competitive executive compensation structure.

The determination of a specific NEO’s actual annual incentive bonus payout is intended to reflect his or her relative contribution to achieving or exceeding annual goals. The earned annual incentive bonuses payable to our NEOs are generally paid in cash after the applicable bonus year. For 2019, the Board took into account several factors in determining annual incentive bonuses, including performance relative to guidance, share performance and share performance relative to peers, and the achievement of significant transactional and transitional goals.

Our 2019 annual incentive program was based on operational performance relative to guidance, return of capital to shareholders; successful drilling program results, asset monetizations and performance relative to peers. To maintain flexibility, we do not set performance targets against metrics, but consider the performance of the Company (or, for Mr. Harper, BMM) and each individual NEO as a whole in determining the amount of the annual incentive bonus payout. Based on Company and individual performance in 2019, the Board decided to award the NEOs (except Mr. Harper) 110% of their target annual incentive bonuses. For Mr. Harper, the Board decided to award 50% of his target annual incentive bonus for 2019.

We have adopted the 2018 Omnibus Incentive Plan (the “Riviera Equity Plan”) for key personnel who perform services for us, including our NEOs (other than Mr. Harper). The purpose of awards under our Riviera Equity Plan is to enhance the profitability and value of the Company for the benefit of its stockholders by enabling the Company to offer eligible individuals cash and incentives in order to attract, retain and reward such individuals and strengthen the mutuality of interests between such individuals and our stockholders.

In 2019, each of our NEOs was eligible to participate in the Riviera Equity Plan. The Riviera Equity Plan allows for the grant of nonqualified stock options, incentive stock options, restricted stock awards, performance awards, other awards and other awards. The Compensation Committee determines the size and vesting terms of all awards made under the Riviera Equity Plan, and administers all other aspects of the Riviera Equity Plan. We did not grant any awards to our NEOs under the Riviera Equity Plan in 2019, but we did grant Restricted Stock Units (“RSUs”) and Stock Units (“PSUs”) to our NEOs (other than Mr. Harper) in 2018, and a portion of the RSUs vested in 2019, as described below.

The RSUs were granted pursuant to form award agreements and are subject to time vesting only. of the RSUs vested on July 1, 2019. The remaining RSUs will normally vest in substantially equal installments on each of July 1, 2020 and July 1, 2021, subject to full acceleration upon a “change in control” (as defined in the Riviera Equity Plan), in each case, subject to the NEO remaining in continuous service with the Company or one of its affiliates through the applicable vesting date. Upon a “good leaver termination” ( , a termination due to the NEO’s death or “disability,” a termination by the NEO’s employer without “cause,” or the NEO’s resignation for “good reason” (each as defined in the award agreements)), a portion of the NEO’s unvested RSUs will vest (based on the number of days the NEO was employed during the applicable vesting period), and the portion that does not vest will be eligible to vest if a “change in control” occurs within the period immediately after the good leaver termination date. Additionally, all unvested RSUs will vest upon an NEO’s “qualifying sale termination,” which is a termination in connection with a sale of a subsidiary, significant asset or line of business of the Company, where the NEO’s employment is transferred to a third-party buyer or is otherwise terminated as a direct result of the sale (as determined by the Board). Both the “good leaver termination” treatment and the “qualifying sale termination” treatment are subject to the NEO’s execution of a release of claims in favor of the Company. Each NEO who received RSUs will receive one share of the Company’s common stock in respect of each vested RSU within 60 days after the first to occur of (i) the consummation of a “change in control,” (ii) the NEO’s termination for any reason (to the extent such termination constitutes a “separation from service” under Section 409A of the Code), and (iii) July 1, 2021. Dividend equivalents (if any) accrued on the RSUs based on cash dividends on the underlying stock will be paid at the time the underlying RSUs vest. Dividend equivalents (if any) accrued on the RSUs based on dividends on the underlying stock will be credited to a dividend book entry account and paid in the same form as the underlying dividends at the same time the underlying RSUs are settled.

The PSUs were granted pursuant to form award agreements and are subject to both time and performance vesting. The PSUs will time vest upon the earlier of July 1, 2021 and the consummation of a “change in control,” subject to the NEO remaining in continuous service with the Company or one of its affiliates through the applicable vesting date. The portion of the PSUs that performance vests will equal a percentage (between 0% and 200%) of the target number of PSUs (which target number is specified in each NEO’s award agreement), with such percentage determined based on the extent to which the value of the “total proceeds” exceeds the “initial value” (each as defined in the award agreements). Upon a “good leaver termination” (defined in the same manner as described above for the RSUs), a portion of the target number of the NEO’s PSUs will time vest (based on the number of days the NEO was employed during the time vesting period ending July 1, 2021) and remain outstanding and eligible to fully vest based on achievement of the performance-vesting terms described above. Upon a “qualifying sale termination” (defined in the same manner as described above for the RSUs), the target number of the NEO’s PSUs will time vest and remain outstanding and eligible to fully vest based on achievement of the performance-vesting terms described above. Both the “good leaver termination” treatment and the “qualifying sale termination” treatment are subject to the NEO execution of a release of claims in favor of the Company. Each NEO who received PSUs will receive one share of the Company’s common stock and a dividend equivalent payment (if any) in respect of each vested PSU within 60 days after vesting.

The grants pursuant to the Riviera Equity Plan are designed to be awards, absent extraordinary circumstances. This means that the Compensation Committee does not intend to make additional grants under the Riviera Equity Plan to our NEOs beyond the amounts granted in 2018 before the vesting date of the PSUs. Accordingly, the Compensation Committee did not make additional grants under the Riviera Equity Plan to our NEOs in 2019. The ultimate value of the long-term compensation is intended to be the largest component of the compensation package for each NEO (other than Mr. Harper), because we believe significant emphasis on future compensation will help to align their interests with the interests of our stockholders. Based on the foregoing, in December of 2018, the Company made the following awards to our NEOs (other than Mr. Harper) of RSUs and PSUs:

BMM adopted the Blue Mountain Midstream LLC 2018 Omnibus Incentive Plan (the “BMM Equity Plan”) for key personnel who perform services for BMM. The purpose of awards under the BMM Equity Plan is to enhance the profitability and value of BMM for the benefit of the Company’s stockholders by enabling BMM to offer eligible individuals cash and stock based incentives in order to attract, retain and reward such individuals and strengthen the mutuality of interests between such individuals and our stockholders.

The BMM RSUs were granted pursuant to an award agreement and are subject to time vesting only. The BMM RSUs normally vest in substantially equal installments on each of the first, second, and third anniversaries of April 2, 2018, subject to full acceleration upon a “change in control” (as defined in the BMM Equity Plan), in each case, subject to Mr. Harper remaining in continuous service with BMM or one of its affiliates through the applicable vesting date. Upon a “good leaver termination” ( , a termination due to Mr. Harper’s death or “disability,” a termination by BMM without “cause,” or Mr. Harper’s resignation for “good reason” (each as defined in the award agreement)), a portion of Mr. Harper’s unvested BMM RSUs will vest (based on the number of days Mr. Harper was employed during the applicable vesting period), and the portion that does not vest will be eligible to vest if a “change in control” occurs within the three-month period immediately following the good leaver termination date. Acceleration under the “good leaver termination” clause is subject to Mr. Harper execution of a release of claims in favor of BMM. Mr. Harper will receive one Class B Unit of BMM (or a cash payment in an amount equal to the fair market value of such Class B Unit) in respect of each vested BMM RSU within 60 days after the first to occur of (i) the consummation of a “change in control,” (ii) Mr. Harper’s termination for any reason (to the extent such termination constitutes a “separation from service” under Section 409A of the Code), and (iii) April 2, 2021. Dividend equivalents (if any) accrued on the BMM RSUs based on dividends on the underlying stock will be credited to a dividend book entry account and paid in the same form as the underlying dividends at the same time the underlying BMM RSUs are settled.

The BMM PSUs were granted pursuant to an award agreement and are subject to both time and performance vesting. The BMM PSUs will time vest upon the earlier of April 2, 2021 and the consummation of a “change in control,” subject to Mr. Harper remaining in continuous service with BMM or one of its affiliates through the applicable vesting date. The portion of the BMM PSUs that performance vests will equal a percentage (between 0% and 200%) of the target number of BMM PSUs specified in the award agreement, with such percentage determined based on the extent to which the value of the “total proceeds” (as defined in the award agreement) exceeds $1,000,000. Upon a “good leaver termination” (defined in the same manner as described above for the BMM RSUs), a portion of the target number of Mr. Harper’s BMM PSUs will time vest (based on the number of days Mr. Harper was employed during the time vesting period ending April 2, 2021) and remain outstanding and eligible to fully vest based on achievement of the performance-vesting terms described above and the portion that does not time vest will be eligible to fully vest if a “change in control” occurs within the three-month period immediately following the good leaver termination date, with the level of vesting dependent upon achievement of the performance-vesting terms described above. The “good leaver termination” treatment is subject to Mr. Harper execution of a release of claims in favor of BMM. Mr. Harper will receive one Class B Unit of BMM (or a cash payment in an amount equal to the fair market value of such Class B Unit) and a dividend equivalent payment (if any) in respect of each BMM PSU within 60 days after vesting.

Before the Company’s from LINN in 2018, each of our NEOs, with the exception of Mr. Furbee and Mr. Harper, held LINN equity awards. Upon completion of the with LINN, our NEOs who held LINN restricted stock units (“LINN RSUs”) received one legacy restricted stock unit in the Company (“Legacy RSU”) under the Riviera Equity Plan in respect of each such outstanding LINN RSU. Mr. Rottino received 126,408 Legacy RSUs, Mr. Frew received 33,806 Legacy RSUs and Mr. Schluter received 35,082 Legacy RSUs. For each of Mr. Rottino, Mr. Frew and Mr. Schluter, half of the Legacy RSUs vested on February 28, 2019, and the other half vested on February 28, 2020. Additionally, in connection with the Mr. Rottino received 236,783 shares of common stock of the Company.

On June 13, 2019, we announced the commencement of a tender offer to repurchase up to $40,000,000 of common stock, and in July 2019, we repurchased an aggregate of 2,666,666 shares of common stock, at a price of $15.00 per share, pursuant to such tender offer. In July 2019, in consideration of the stock repurchase that occurred in July 2019, the Board approved the adoption of a partial cash conversion program (the “Cash Conversion Program”) in order to further align the interests of the Company’s employees who hold outstanding equity awards under the Riviera Equity Plan (such as RSUs and Legacy RSUs), including our NEOs (except Mr. Harper), with those of our stockholders. The Cash Conversion Program allowed the Company’s employees who hold RSUs or Legacy RSUs, including our NEOs (except Mr. Harper), to elect to convert 4.4% of their outstanding RSUs or Legacy RSUs into the right to receive a cash payment of $15.00 per share upon settlement of the award, effective as of December 1, 2019, generally subject to the same terms and conditions (including vesting) as the underlying RSUs or Legacy RSUs. The number of RSUs converted for each NEO holding RSUs was converted proportionately across each of the three RSU vesting tranches. All of our NEOs with RSUs or Legacy RSUs elected to participate in the Cash Conversion Program with respect to the number of RSUs and Legacy RSUs listed in the table below:

 

We do not maintain a defined benefit pension plan or nonqualified deferred compensation plan (other than RSU awards with deferred settlement) for our NEOs. We provide a basic benefits package generally to all employees, which includes a 401(k) plan and eligibility to receive employer matching contributions, and health, disability and life insurance.

The Rottino Employment Agreement also provides Mr. Rottino severance benefits payable upon a termination of employment by Riviera without “cause” or by Mr. Rottino for “good reason” (each as defined in the Rottino Employment Agreement) (any such termination constituting an “Eligible Termination” if occurring during the period beginning six months before and ending two years after a “change of control,” also as defined in the Rottino Employment Agreement), consisting of: (i) any earned (or deemed earned) but unpaid annual bonus for the year before termination; (ii) a pro rata annual bonus for the year of termination; (iii) two times (or, upon an Eligible Termination, times) the sum of his (x) base salary at the highest rate in effect at any time during the period immediately before the employment termination date, plus (y) target annual bonus for the year in which his termination occurs (or, upon an Eligible Termination, the highest annual bonus he was paid during the period immediately preceding the change of control); (iv) continued health insurance benefits under the Company group health plan (at the employee rate) for the “maximum required period” (or, upon an Eligible Termination, for 18 months), subject to his continued eligibility for COBRA coverage and terminable if he obtains other employment offering group health plan coverage; and (v) reimbursement of the Company’s portion of any health insurance premium expenses paid by Mr. Rottino for up to six months after the end of the “maximum required period.” Each of items (i) through (iii) above is payable in a lump sum within 30 days of termination (or, for any incremental amount due upon a change of control, within 30 days of the change of control).

The Rottino Employment Agreement also provides that, upon a termination of employment due to Mr. Rottino’s death or disability, by the Company without cause, or by Mr. Rottino for good reason, all of Mr. Rottino’s outstanding and unvested incentive awards will immediately vest.

The Rottino Employment Agreement provides for a Code Section 280G cutback, which would cause an automatic reduction in Mr. Rottino’s change of control severance payments and benefits in the event such reduction would result in Mr. Rottino receiving greater payments and benefits on an basis.

The Rottino Employment Agreement subjects Mr. Rottino to employment term as well as employment term and and restrictive covenants. It also subjects him to assignment of inventions and employment term and confidentiality covenants. Upon an Eligible Termination, Mr. Rottino will not be subject to the and covenants.

The Harper Employment Agreement subjects Mr. Harper to employment term and and restrictive covenants. It also subjects him to assignment of inventions and perpetual confidentiality covenants. Under the Harper Release Agreement, Mr. Harper’s severance benefits will remain subject to his continued compliance with the restrictive covenant provisions of the Harper Employment Agreement, which survive his termination.

The Company assumed the LINN Energy, Inc. Severance Plan (the “LINN Severance Plan”) through March 1, 2019, at which time it implemented the Riviera Resources, Inc. Severance Plan (the “Company Severance Plan”), which was largely based on the LINN Severance Plan. The Company Severance Plan provides severance benefits to eligible Company employees, including our NEOs (other than Mr. Rottino and Mr. Harper), in the event of certain qualifying terminations of employment (as described below), with the amount of the severance benefits determined according to four different tiers based on the employee’s position within the Company. Any Company employees who is provided severance through another agreement is not eligible for severance under the Company Severance Plan, and as such, Mr. Rottino is not eligible to receive severance benefits under the Company Severance Plan. All Company Severance Plan participants are eligible to receive severance if they are terminated by the Company without “cause” (as defined in the Company Severance Plan), and certain Company Severance Plan participants in the first tier (including our NEOs (other than Mr. Rottino and Mr. Harper)) also are eligible to receive severance upon a resignation for “good reason” (as defined in the Company Severance Plan), with the severance, in each case, consisting of, for our covered NEOs, (i) one year of base salary, payable in a lump sum no later than the regular pay period after the date that is months after the last day of the calendar year of termination, (ii) a annual bonus for the year of termination, payable in a lump sum no later than the regular pay period after the date that is months after the last day of the calendar year of termination, (iii) 12 months of COBRA coverage, and (iv) three months of fees paid to third parties for outplacement assistance. All severance payments described above are subject to execution and of a release of claims and continued material compliance with restrictive covenants discussed below.

The Company Severance Plan contains restrictive covenants applicable to our NEOs, specifically: (i) during the participant’s employment and for nine months thereafter, and (ii) of current customers and employees during employment and for one year thereafter.

In combination with our practices, we do not believe that risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on the Company. In making this determination, we considered the following:

 

 

 

 

 

 

 

The amount for each NEO (other than Mr. Harper) for 2018 reflects the aggregate grant date fair value of the RSUs, Legacy RSUs and PSUs granted under the Riviera Equity Plan, computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 13 to the Company’s audited consolidated financial statements for the year ended December 31, 2018, included in the Company’s Annual Report on Form for the year ended December 31, 2018. The value ultimately realized upon the actual vesting of the award(s) may or may not be equal to this determined value. The PSUs are subject to market conditions. No performance targets have currently been met.

The 2017 amount reflects the aggregate grant date fair value of (i) restricted stock units granted under LINN’s omnibus incentive plan and (ii) class B units of LINN Energy Holdco LLC, which were intended to be “profits interests” for U.S. federal income tax purposes, granted under the LINN Energy Holdco LLC Incentive Interest Plan (“Holdco LLC Plan”), computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts were included in Note 15 to LINN’s audited consolidated financial statements included in LINN’s Annual Report on Form for the year ended December 31, 2017. These calculations assumed full achievement of all performance conditions applicable to the Class B Units granted under the Holdco LLC Plan.

(4)	The amounts in this column for 2019 are detailed in the table immediately below.

Name		Company Contribution to 401(k) Plan ($)				Cash Conversion Program ($)(a)
David Rottino			11,200				132,090
Daniel Furbee			11,200				48,540
James G. Frew			11,200				54,780
Darren Schluter			11,200				41,490
C. Gregory Harper			11,200				—

(a)	Represents the value of vested and unvested RSUs and Legacy RSUs that were converted into cash rights pursuant to the Cash Conversion Program, as described in further detail under “Compensation Discussion & Analysis—Elements of Executive Compensation—Cash Conversion Option.”

 

The following table sets forth certain information with respect to grants of awards to our NEOs during 2019.

 

 

 

 

 

 

 

 

 

 

 

 

The following table provides information for each of our NEOs regarding aggregate executive contributions, aggregate earnings for 2019 and account balances based on vested RSU awards.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table sets forth information concerning the change in control and severance payments to be made to each of our NEOs (other than Mr. Harper, whose employment terminated on April 27, 2020) in connection with a change in control or termination of employment, based on a termination and change in control date of December 31, 2019 and the fair market value of a share of common stock on December 31, 2019 ($7.98 per share). The below table only includes information for employment termination or change in control events that trigger vesting or payments, and assumes that each NEO below will take all action necessary or appropriate for such NEO to receive the maximum available benefit, such as execution of a release of claims. Additional descriptions of the terms of our agreements, plans, and arrangements with our NEOs are set forth in “Executive Compensation—Compensation Discussion & Analysis—Elements of Executive Compensation.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As required by Section 953(b) of the Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation we are providing the following information about the relationship of the total annual compensation of our employees and the annual total compensation of our president and chief executive officer:

On January 9, 2020, the Board elected Mr. Mills to the Board as an independent director, effective immediately, to fill the vacancy created by Philip A. Brown’s resignation. The full Board approved compensation for Mr. Mills for 2020, based on the recommendation of the Compensation Committee. For 2020, Mr. Mills will receive (i) an annual cash retainer of $125,000, paid quarterly; (ii) an award of time-vesting restricted stock units under the Riviera Equity Plan, with an upfront grant date value of $125,000 (the “Director RSUs”); and (iii) reimbursement of business-related expenses. The Director RSUs vest in substantially equal installments on the first and second anniversaries of the grant date, subject to continued service, and accelerate upon an earlier (A) change in control of the Company, (B) Mr. Mills’ termination in a “qualifying sale termination” or (C) Mr. Mills’ termination due to death or disability. Further, if Mr. Mills’ service on the Board ceases due to his failure to be to the Board other than for cause, gross misconduct, ineligibility or refusal, the Director RSUs that would have vested on the next vesting date will vest, with any unvested Director RSUs remaining outstanding and eligible to vest upon a change in control of the Company that occurs within the three-month period after his termination.

In the ordinary course of our business, we purchase products or services from, or engage in other transactions with, various third parties. Occasionally, these transactions may involve entities that are affiliated with one or more members of our Board. When they occur, these transactions are conducted in the ordinary course and on an basis.

Our common stock is quoted for trading on OTCQX. Pursuant to the OTCQX Rules for U.S. Companies (“OTCQX Rules”), we are required to have at least two independent members of the Board. Pursuant to Item 407(a)(1)(ii) of Regulation of the SEC, the Board is required to affirmatively determine and disclose the independence of each director, and nominee for election as a director, based on the director independence standards of a national securities exchange or an inter-dealer quotation system having certain director independence requirements. As such, we have adopted our definition of independence from the National Association of Securities Dealers Automated Quotations (the “NASDAQ”). The NASDAQ independence definition includes a series of objective tests, including that the director is not an employee or executive officer of our company and has not engaged in various types of business dealings with our company. In addition, as further required by NASDAQ Marketplace Rule 5605(a)(2), the Board has made a subjective determination as to each independent director that no relationships exist which, in the opinion of the Board, would interfere with the exercise of his independent judgment in carrying out the responsibilities of a director.

 

The fees for professional services rendered by KPMG LLP for the audit of our annual consolidated and combined financial statements for the years ended December 31, 2019 and December 31, 2018, and the reviews of the financial statements included in any of our Quarterly Reports on Forms and Company’s other filings with the SEC, including related comfort letters and consents for 2019 and 2018, were approximately $1,143,298 and $2,225,000, respectively. In addition, in connection with our subsidiary Blue Mountain Midstream LLC, we incurred audit fees to KPMG LLP of $715,000 and $525,000 for the year ended December 31, 2019 and December 31, 2018, respectively.

We did not incur any fees for the years ended December 31, 2019 and December 31, 2018.

The Audit Committee all audit and services to be provided to us by our independent public accountant in the upcoming year at the last meeting of each calendar year and at subsequent meetings as necessary. The services to be provided are specified and shall not exceed a specified dollar limit. During the course of a fiscal year, if additional services are identified, these services are presented to the Audit Committee for All of the services covered under the caption Fees” were approved by the Audit Committee and none were provided under the exception of Section 10A of the Exchange Act.

The Audit Committee oversees the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for the preparation of the financial statements and the reporting process, including the systems of internal control. With respect to the consolidated financial statements for the year ended December 31, 2019, the Audit Committee reviewed and discussed the consolidated financial statements of Riviera. and the quality of financial reporting with management and the independent public accountant. In addition, it discussed with the independent public accountant the matters required to be discussed by Auditing Standard No. 1301, , as adopted by the Public Company Accounting Oversight Board (“PCAOB”) on August 15, 2012. The Audit Committee also discussed with the independent public accountant its independence from Riviera and received from the independent public accountant the written disclosures and the letter from the independent public accountant complying with the applicable requirements of the PCAOB regarding the independent public accountant’s communications with the Audit Committee concerning independence. The Audit Committee determined that the services provided to Riviera by the independent public accountant are compatible with maintaining the independence of the independent public accountant. The Audit Committee also considered whether, to assure continuing auditor independence, it would be advisable to regularly rotate the audit firm itself. With respect to rotation of the audit firm, the Audit Committee has concluded that the current benefits to the Company from continued retention of KPMG LLP warrant retaining the firm at this time.

Based on the reviews and discussions described above, the Audit Committee recommended to the Company’s Board that the consolidated financial statements of Riviera be included in Riviera’s Annual Report on Form for the fiscal year ended December 31, 2019.

Audit Committee

Joseph A. Mills (Chair)

Evan Lederman

Thanasi Skafidas

See Part II, Item 8. Financial Statements and Supplementary Data of the Annual Report on Form

All schedules are omitted for the reason that they are not required or the information is otherwise supplied in Item 8. “Financial Statements and Supplementary Data” in the Annual Report on Form