Basic Energy Services, Inc. (NYSE:BAS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
The description of the Phantom Shares in Item 5.02 is
incorporated by reference into this Item 1.01, and such
description is qualified in its entirety by reference to the full
text of the Form of Phantom Share Award Agreement, which is filed
as Exhibit 10.3 hereto and is incorporated herein by reference.
incorporated by reference into this Item 1.01, and such
description is qualified in its entirety by reference to the full
text of the Form of Phantom Share Award Agreement, which is filed
as Exhibit 10.3 hereto and is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers. >
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers. >
On February 22, 2017, the Board of Directors (the Board) of Basic
Energy Services, Inc. (the Company or Basic), based on the
recommendation of Basics Compensation Committee (the Committee),
approved base salaries for 2017 (to be effective as of April 1,
2017), grants of performance-based restricted stock unit awards
(RSUs) with respect to up to 809,416 shares of the Companys
common stock, and performance-based stock option awards (the
Options, and together with the RSUs, the PB Awards) with respect
to up to 323,770 shares of the Companys common stock, to Basics
officers, including its named executive officers, under the Basic
Energy Services, Inc. Management Incentive Plan (the MIP), based
on managements recommendation and the executive officers
performance. The PB Awards were consistent with the PB Awards
expressly contemplated by the Companys First Amended Joint
Prepackaged Chapter 11 Plan of Basic Energy Services, Inc. and
its Affiliated Debtors (as confirmed, the Prepackaged Plan) to be
determined and approved by the Board or the Committee within 90
days following the effective date of the Prepackaged Plan.
Energy Services, Inc. (the Company or Basic), based on the
recommendation of Basics Compensation Committee (the Committee),
approved base salaries for 2017 (to be effective as of April 1,
2017), grants of performance-based restricted stock unit awards
(RSUs) with respect to up to 809,416 shares of the Companys
common stock, and performance-based stock option awards (the
Options, and together with the RSUs, the PB Awards) with respect
to up to 323,770 shares of the Companys common stock, to Basics
officers, including its named executive officers, under the Basic
Energy Services, Inc. Management Incentive Plan (the MIP), based
on managements recommendation and the executive officers
performance. The PB Awards were consistent with the PB Awards
expressly contemplated by the Companys First Amended Joint
Prepackaged Chapter 11 Plan of Basic Energy Services, Inc. and
its Affiliated Debtors (as confirmed, the Prepackaged Plan) to be
determined and approved by the Board or the Committee within 90
days following the effective date of the Prepackaged Plan.
In addition to the PB Awards, the Board approved on February 22,
2017, based on the recommendation of the Committee, grants of
phantom stock awards (the Phantom Shares) under the MIP for up to
an aggregate of 42,795 Phantom Shares to non-executive key
employees.
2017, based on the recommendation of the Committee, grants of
phantom stock awards (the Phantom Shares) under the MIP for up to
an aggregate of 42,795 Phantom Shares to non-executive key
employees.
2017 Base Salaries
The approved 2017 base salaries for Basics named executive
officers are as follows:
officers are as follows:
|
2017 Base Salary
|
|
|
T.M. Roe Patterson
President, Chief Executive Officer and Director
|
$665,000
|
|
Alan Krenek
Senior Vice President, Chief Financial Officer,
Treasurer and Secretary |
$398,400
|
|
James F. Newman
Senior Vice President, Region Operations
|
$398,400
|
|
William T. Dame
Vice President, Pumping Services
|
$326,400
|
|
Eric Lannen
Vice President, Human Resources
|
$293,550
|
Performance-Based RSU and Option Awards
to the PB Award agreements, the PB Awards are to be earned based
upon Basics total shareholder return (TSR) relative to the TSR of
a peer group of energy services companies measured over the
Performance Period (defined as the 2017 calendar year), with
Basics ranking in TSR performance being compared to the ranking
in TSR performance of the members of the Peer Group (as defined
below, and together with Basic, the Combined Group). The Combined
Group will be ranked from best performing to worst performing
with regard to each companys respective TSR performance, with the
Combined Group company ranked 1st being the company with the
highest TSR when compared to the other Combined Group companies
and the Combined Group company ranked 7th being the company with
the lowest TSR when compared to the other Combined Group
companies, with rankings 2 through 6 being determined in
descending order based upon the corresponding descent in TSR
performance for companies in the Combined Group from 2nd highest
to 6th highest.
upon Basics total shareholder return (TSR) relative to the TSR of
a peer group of energy services companies measured over the
Performance Period (defined as the 2017 calendar year), with
Basics ranking in TSR performance being compared to the ranking
in TSR performance of the members of the Peer Group (as defined
below, and together with Basic, the Combined Group). The Combined
Group will be ranked from best performing to worst performing
with regard to each companys respective TSR performance, with the
Combined Group company ranked 1st being the company with the
highest TSR when compared to the other Combined Group companies
and the Combined Group company ranked 7th being the company with
the lowest TSR when compared to the other Combined Group
companies, with rankings 2 through 6 being determined in
descending order based upon the corresponding descent in TSR
performance for companies in the Combined Group from 2nd highest
to 6th highest.
Based on Basics TSR performance, each grantee may earn the PB
Awards as follows:
Awards as follows:
|
Combined Group Company Rank Based on TSR Performance
|
Percentage of RSUs Earned
|
Percentage of Options Earned
|
|
1st
|
100.0%
|
100.0%
|
|
2nd
|
100.0%
|
100.0%
|
|
3rd
|
100.0%
|
100.0%
|
|
4th
|
80.0%
|
80.0%
|
|
5th
|
60.0%
|
60.0%
|
|
6th
|
40.0%
|
40.0%
|
|
7th
|
20.0%
(or 0% if the Basic also has negative EBITDA for the
Performance Period) |
20.0%
(or 0% if the Basic also has negative EBITDA for the
Performance Period) |
Peer Group means each of the following companies: (1) Key
Energy Services, Inc.; (2) Mammoth Energy Services, Inc.; (3)
Patterson-UTI Energy, Inc.; (4) Pioneer Energy Services Corp.;
(5) Superior Energy Services, Inc.; and (6) Tesco Corporation;
provided, in the event any such company ceases to exist, ceases
to file public reports timely with the U.S. Securities and
Exchange Commission with respect to the Performance Period or
merges or combines with any other entity that, in the
determination of the Committee makes such combined company not
comparable for use as part of the Peer Group, the Committee in
its sole discretion may continue to include or exclude such
company in the Peer Group, but in no event may substitute any
other company in its place as part of the Peer Group.
Energy Services, Inc.; (2) Mammoth Energy Services, Inc.; (3)
Patterson-UTI Energy, Inc.; (4) Pioneer Energy Services Corp.;
(5) Superior Energy Services, Inc.; and (6) Tesco Corporation;
provided, in the event any such company ceases to exist, ceases
to file public reports timely with the U.S. Securities and
Exchange Commission with respect to the Performance Period or
merges or combines with any other entity that, in the
determination of the Committee makes such combined company not
comparable for use as part of the Peer Group, the Committee in
its sole discretion may continue to include or exclude such
company in the Peer Group, but in no event may substitute any
other company in its place as part of the Peer Group.
Once earned, the PB Awards will vest in one-third increments
and will begin when the Committee certifies the specified
adjustments in the award agreements and will begin to vest no
later than 75 days after the Performance Period (the
Determination Date). The PB Awards will vest with one-third of
the PB Awards vesting on the Determination Date, one-third
vesting one year following the Determination Date and the
remaining one-third vesting two years following the
Determination Date. All unvested PB Awards will be forfeited by
the grantee (a) if the grantees employment with Basic is
terminated by Basic for Cause before the PB Awards are vested
or (b) if the grantee terminates his employment with Basic
before the PB Awards are vested for any reason other than (i)
Good Reason or (ii) the death or Disability of the grantee, as
such terms are defined in the award agreement. The grantee will
vest in all rights to the PB Awards on the earliest of (i) the
dates set forth above; (ii) termination by Basic without Cause;
(iii) the death or Disability of the grantee; (iv) resignation
for Good Reason; or (v) a Change of Control (as defined in the
award agreements).
and will begin when the Committee certifies the specified
adjustments in the award agreements and will begin to vest no
later than 75 days after the Performance Period (the
Determination Date). The PB Awards will vest with one-third of
the PB Awards vesting on the Determination Date, one-third
vesting one year following the Determination Date and the
remaining one-third vesting two years following the
Determination Date. All unvested PB Awards will be forfeited by
the grantee (a) if the grantees employment with Basic is
terminated by Basic for Cause before the PB Awards are vested
or (b) if the grantee terminates his employment with Basic
before the PB Awards are vested for any reason other than (i)
Good Reason or (ii) the death or Disability of the grantee, as
such terms are defined in the award agreement. The grantee will
vest in all rights to the PB Awards on the earliest of (i) the
dates set forth above; (ii) termination by Basic without Cause;
(iii) the death or Disability of the grantee; (iv) resignation
for Good Reason; or (v) a Change of Control (as defined in the
award agreements).
Following the vesting of the RSUs, the Company will deliver to
the grantee the number of shares of common stock, par value
$.01, of Basic (the Shares) equal to the aggregate number of
RSUs that vest as of such date. The Company, however, in its
sole discretion will have the option to settle the RSUs in
cash, subject to applicable withholding taxes. Each RSU has
dividend equivalent rights, which dividend equivalent rights
may be accumulated and deemed reinvested in additional RSUs or
may be accumulated in cash, as determined by the Committee in
its discretion.
the grantee the number of shares of common stock, par value
$.01, of Basic (the Shares) equal to the aggregate number of
RSUs that vest as of such date. The Company, however, in its
sole discretion will have the option to settle the RSUs in
cash, subject to applicable withholding taxes. Each RSU has
dividend equivalent rights, which dividend equivalent rights
may be accumulated and deemed reinvested in additional RSUs or
may be accumulated in cash, as determined by the Committee in
its discretion.
The exercise price of each of the Options issued is $41.93. The
purchase price for all Options will be the applicable exercise
price multiplied by the number of Shares with respect to the
Options being exercised. The purchase price may be paid by cash
or check; a brokered cashless exercise; a net exercise by
reducing the number of Shares otherwise deliverable upon the
exercise; or surrendered to the Company for transfer and valued
by the Company at the fair market value on the date of
exercise.
purchase price for all Options will be the applicable exercise
price multiplied by the number of Shares with respect to the
Options being exercised. The purchase price may be paid by cash
or check; a brokered cashless exercise; a net exercise by
reducing the number of Shares otherwise deliverable upon the
exercise; or surrendered to the Company for transfer and valued
by the Company at the fair market value on the date of
exercise.
The foregoing descriptions of the PB Awards in this Item 5.02
are qualified in their entirety by reference to the full text
of the Form of Performance-Based Restricted Stock Unit Award
Agreement and the Form of Performance-Based Stock Option Award
Agreement, which are filed as Exhibits 10.1 and 10.2,
respectively, hereto and are incorporated herein by reference.
are qualified in their entirety by reference to the full text
of the Form of Performance-Based Restricted Stock Unit Award
Agreement and the Form of Performance-Based Stock Option Award
Agreement, which are filed as Exhibits 10.1 and 10.2,
respectively, hereto and are incorporated herein by reference.
The number of PB Awards issuable to each of Basics named
executive officers under the applicable award agreements are
set forth in the table below and assumes that each named
executive officer earns 50% of the their PB Awards:
executive officers under the applicable award agreements are
set forth in the table below and assumes that each named
executive officer earns 50% of the their PB Awards:
|
RSUs
|
Options
|
|
|
T.M. Roe Patterson
President, Chief Executive Officer and Director
|
250,920
|
100,368
|
|
Alan Krenek
Senior Vice President, Chief Financial Officer,
Treasurer and Secretary |
89,036
|
35,614
|
|
James F. Newman
Senior Vice President, Region Operations
|
89,036
|
35,614
|
|
William T. Dame
Vice President, Pumping Services
|
48,565
|
19,426
|
|
Eric Lannen
Vice President, Human Resources
|
24,283
|
9,713
|
Phantom Share Awards
The Phantom Shares issued to non-executive key employees will
vest in specified increments on March 15, 2017, March 15,
2018 and March 15, 2019 (subject to accelerated vesting in
certain circumstances described below). All unvested Phantom
Shares will be forfeited by the grantee (a) if the grantees
employment with Basic is terminated by Basic for Cause before
the Phantom Shares are vested or (b) if the grantee
terminates his employment with Basic before the Phantom
Shares are vested for any reason other than (i) Good Reason
within 12 months following a Change of Control (as defined in
the award agreements) or (ii) the death or Disability of the
grantee, as such terms are defined in the award agreement.
The grantee will vest in all rights to the Phantom Shares on
the earliest of: (i) the dates set forth above; (ii) grantees
termination by Basic without Cause; (iii) the death or
Disability of the grantee; (iv) grantees resignation for Good
Reason within 12 months following a Change of Control (as
defined in the award agreements).
vest in specified increments on March 15, 2017, March 15,
2018 and March 15, 2019 (subject to accelerated vesting in
certain circumstances described below). All unvested Phantom
Shares will be forfeited by the grantee (a) if the grantees
employment with Basic is terminated by Basic for Cause before
the Phantom Shares are vested or (b) if the grantee
terminates his employment with Basic before the Phantom
Shares are vested for any reason other than (i) Good Reason
within 12 months following a Change of Control (as defined in
the award agreements) or (ii) the death or Disability of the
grantee, as such terms are defined in the award agreement.
The grantee will vest in all rights to the Phantom Shares on
the earliest of: (i) the dates set forth above; (ii) grantees
termination by Basic without Cause; (iii) the death or
Disability of the grantee; (iv) grantees resignation for Good
Reason within 12 months following a Change of Control (as
defined in the award agreements).
Each Phantom Share represents the right to receive a cash
payment equal to the Fair Market Value (as defined and
determined in accordance with the award agreement) on the
applicable vesting date of a number of Shares equal to the
aggregate number of Phantom Shares that vest on such date,
provided the cash payment will not exceed $55.00 per Phantom
Share.
payment equal to the Fair Market Value (as defined and
determined in accordance with the award agreement) on the
applicable vesting date of a number of Shares equal to the
aggregate number of Phantom Shares that vest on such date,
provided the cash payment will not exceed $55.00 per Phantom
Share.
Each Phantom Share has dividend equivalent rights, which
dividend equivalent rights may be accumulated and deemed
reinvested in additional Phantom Shares or may be accumulated
in cash, as determined by the Committee in its discretion.
dividend equivalent rights may be accumulated and deemed
reinvested in additional Phantom Shares or may be accumulated
in cash, as determined by the Committee in its discretion.
Item 9.01 Financial Statements and Exhibits.
|
(d)
|
Exhibits.
|
|
|
10.1
10.2
10.3
|
Form of Performance-Based Restricted Stock Unit
Award Agreement.
Form of Performance-Based Stock Option Award
Agreement.
Form of Phantom Share Award Agreement.
|
About Basic Energy Services, Inc. (NYSE:BAS)
Basic Energy Services, Inc. provides a range of well site services in the United States to oil and natural gas drilling and producing companies, including completion and remedial services, fluid services, well servicing and contract drilling. The Company operates through the segment, which include Completion and Remedial Services, Fluid Services, Well Servicing and Contract Drilling. The Company’s operations are managed regionally and are concentrated in the United States onshore oil and natural gas producing regions located in Texas, New Mexico, Oklahoma, Arkansas, Kansas, Louisiana, Wyoming, North Dakota, Colorado, Utah, Montana, West Virginia, California, Ohio and Pennsylvania. Its operations are focused on liquids-rich basins, as well as natural gas-focused shale plays characterized by prolific reserves. It has a presence in the Permian Basin and the Bakken, Eagle Ford, Haynesville and Marcellus shales. Basic Energy Services, Inc. (NYSE:BAS) Recent Trading Information
Basic Energy Services, Inc. (NYSE:BAS) closed its last trading session down -1.07 at 39.38 with 360,849 shares trading hands.
