Print Page  Close Window

SEC Filings

8-K
KEY ENERGY SERVICES INC filed this Form 8-K on 12/05/2017
Entire Document
 


Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers

On November 29, 2017, the Compensation Committee (the “Committee’) of the Board of Directors of Key Energy Services, Inc. (the “Company”) approved certain executive compensation items through a unanimous written consent, as described in greater detail below.

Employment Agreements

In connection with her promotion as the Company’s Senior Vice President, General Counsel and Corporate Secretary, as previously reported on the Company’s Form 8-K filed on September 12, 2017, the Committee approved the terms for an employment agreement to be entered into with Ms. Hargis effective on or around December 4, 2017 (the “Hargis Employment Agreement”), which will supersede and replace that certain Change of Control Agreement between the Company and Ms. Hargis dated January 6, 2014. The Hargis Employment Agreement provides for an annual base salary of $300,000 and a target annual equity compensation award equal to 65,000 shares of equity-based compensation awards. Additionally, the Committee approved the terms for an employment agreement to be entered into with David Brunnert, the Company’s Senior Vice President and Chief Operating Officer, to be effective on or around December 4, 2017 (the “Brunnert Employment Agreement,” and together with the Hargis Employment Agreement, the “Employment Agreements”), which will supersede and replace that certain Amended and Restated Change of Control Agreement dated January 31, 2017. The Brunnert Employment Agreement provides for an annual base salary of $350,000. The Employment Agreements contain certain confidentiality and intellectual property covenants.

Upon a termination of Ms. Hargis’ or Mr. Brunnert’s employment with the Company (i) by the Company without “cause” (as defined in the Employment Agreements), (ii) by the expiration of the term of the Employment Agreements due to the Company delivering a notice of non-renewal, (iii) due to death or “disability” (as defined in the Employment Agreements), or (iv) by the executive for “good reason” within one year following a “change of control” (each as defined in the Employment Agreements), in each case, subject to the execution and non-revocation of a release, the Company will provide (x) a lump sum severance payment equal to the executive’s annual base salary, (y) continued coverage under the Company’s medical and dental benefit plans for 12 months, and (z) accelerated vesting of outstanding equity awards. If any amounts due to the executive on a termination of employment with the Company by the executive for good reason within one year following a change of control is includable in the executive’s gross income under Section 409A of the Internal Revenue Code of 1986, as amended, then the Company will pay an additional amount necessary to pay the executive for additional income taxes on such amounts.

The foregoing description of the Employment Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment Agreements, a copy of which is filed as Exhibit 10.1.

Replacement Equity Awards

On November 29, 2017, the Committee approved certain modifications to the Company’s equity-based awards granted to employees, including each of the named executive officers, during the 2016 calendar year (the “2016 Awards”). Such modifications were determined to be appropriate and necessary for retention and incentive purposes. The Committee confirmed that the first tranche of the 2016 Awards, including both time-based awards and performance-based awards, will vest as scheduled in December 2017 subject to the satisfaction of the original vesting terms. The Committee next approved providing each holder of 2016 Awards with the option to either (i) continue to hold the remainder of the 2016 Awards that did not vest in December 2017 pursuant to their original terms, or (ii) forfeit the remaining 2016 Awards in exchange for a new grant made up of 50% time-vested restricted stock unit awards (the “Time RSU Award”) and 50% performance share awards (the “Performance RSU Award”).

The Time RSU Awards will represent the right to receive one share of common stock of the Company for each vested restricted stock unit. The Time RSU Award will become vested as to 1/3 of the restricted stock units on each anniversary of the date of grant. Upon a termination of the holder’s employment for any reason, any portion of the Time RSU Award which remains unvested will be forfeited; provided, however, that if the holder’s employment is terminated by the Company without “cause” (as defined in the Time RSU Award) or by the holder for “good reason” (as defined in the Time RSU Award), in each case, within 12 months following a “change of control” (as defined in the Time RSU Award), then any portion of the Time RSU Award which remains unvested will become vested.