CSI Compressco LP (NASDAQ:CCLP) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 20, 2017, Owen Serjeant was elected President of CSI Compressco GP Inc., the general partner (“General Partner”) of CSI Compressco LP, a Delaware limited partnership (the “Partnership”). In addition, on November 20, 2017, the sole shareholder of the General Partner elected Mr. Serjeant as a member of the Board of Directors of the General Partner. Effective the same day, Stuart M. Brightman resigned from his position as President of the General Partner. Mr. Brightman will continue his existing responsibilities as Chairman of the Board of Directors of the General Partner and as President and Chief Executive Officer of TETRA Technologies, Inc., which is the owner of the General Partner, 42% of the outstanding common units, and approximately 12% of the Series A Convertible Preferred Units of the Partnership.
Mr. Serjeant, 57, served as Group Vice President – Global Operational Support of Schlumberger Limited, a publicly traded company subject to the reporting requirements of the Securities Exchange Act of 1934, from April 2016 to November 2017.From July 1999 until April 2016, Mr. Serjeant served in various senior operations management roles with increasing responsibility, including most recently as Corporate Vice President – Global Operational Excellence and Group Vice President – Compression Systems Division, at Cameron International Corporation, a publicly traded company prior to its acquisition by Schlumberger in April 2016.Mr. Serjeant began his career with Cooper Energy Services and served in a variety of operations, engineering, marketing, and sales roles from 1981 to 1999.He earned his BSc degree in Mechanical Engineering from Aston University, United Kingdom, and his MBA degree from Henley Management College, United Kingdom.
In connection with Mr. Serjeant’s appointment as President, the Board of Directors of the General Partner approved an annual base salary of $410,000 and a target annual cash incentive bonus opportunity equal to 70% of his base salary. The Board of Directors has authorized the grant to Mr. Serjeant of an employment inducement award of 94,697 phantom units under the Partnership’s Amended and Restated 2011 Long Term Incentive Compensation Plan, effective November 20, 2017. Beginning in 2018, Mr. Serjeant will be eligible to participate in annual grants of long-term incentives similar to the General Partner’s other executives. The Company has entered into the Partnership’s general form of employment agreement, which evidences the at-will nature of Mr. Serjeant’s employment and does not set forth or guarantee the term of employment, salary, or other incentives, all of which are entirely at the discretion of the Board of Directors.
There are no arrangements or understandings between Mr. Serjeant and any other person to which he was appointed as an officer of the General Partner. Neither the General Partner nor the Board of Directors is aware of any transaction in which Mr. Serjeant has an interest that requires disclosure under Item 404(a) of Regulation S-K.
Mr. Serjeant will be indemnified by the General Partner to the Certificate of Incorporation and Bylaws of the General Partner and by the Partnership to the Second Amended and Restated Agreement of Limited Partnership of the Partnership, as amended, for actions associated with being an officer. It is anticipated that the Partnership will enter into an Indemnification Agreement with Mr. Serjeant in the same form the Partnership offers to its directors and executive officers. A copy of the form of the Indemnification Agreement is filed as Exhibit 10.5 to the Partnership’s Registration Statement on Form S-1/A (Registration No. 333-155260) filed on May 27, 2011 and incorporated in this Item 5.02 by reference.
The General Partner has also entered into a change of control agreement (the “COC Agreement”) with Mr.Serjeant in a form substantially identical to those previously executed by the General Partner and certain of its executive officers. The COC Agreement has an initial two-year term, with an automatic one-year extension on the second anniversary of the effective date (or any anniversary date thereafter) unless a cancellation notice is given at least 90 days prior to the expiration of the then applicable term. Under the COC Agreement, the General Partner has an obligation to provide certain benefits to Mr.Serjeant upon a qualifying termination event that occurs in connection with or within two years following a “change of control”
of the Partnership or TETRA. A qualifying termination event under the COC Agreement includes the termination of Mr.Serjeant’s employment by the General Partner other than for “Cause” (as that term is defined in the COC Agreement) or termination by Mr.Serjeant for “Good Reason” (as that term is defined in the COC Agreement).
Under the COC Agreement, if a qualifying termination event occurs in connection with or within two years following a change of control, the General Partner has an obligation to pay Mr.Serjeant the following cash severance amounts: (i)(A)an amount equal to Mr.Serjeant’s earned but unpaid Annual Bonus (as that term is defined in the COC Agreement) attributable to the immediately preceding calendar year and earned but unpaid Long Term Bonus (as that term is defined in the COC Agreement) attributable to the performance period ended as of the end of the immediately preceding calendar to the extent such amounts would have been paid to Mr.Serjeant had he remained employed by the General Partner, and in each case only to the extent the performance goals for each such bonus were achieved for the respective performance period, plus (B)Mr.Serjeant’s prorated target Annual Bonus for the current year, plus (C)an amount equal to Mr.Serjeant’s target Long Term Bonus (as that term is defined in the COC Agreement) for each outstanding award; plus (ii)the product of two times the sum of Mr.Serjeant’s Base Salary (as that term is defined in the COC Agreement) and target Annual Bonus amount for the year in which the qualifying termination event occurs; plus (iii)an amount equal to the aggregate premiums and any administrative fees applicable to Mr.Serjeant due to an election of continuation of coverage that he would be required to pay if he elected to continue medical and dental benefits under the General Partner’s group health plan for Mr.Serjeant and his eligible dependents without subsidy from the General Partner for a period of two years following the date of Mr.Serjeant’s qualifying termination of employment. The COC Agreement also provides for full acceleration of any outstanding restricted unit awards, phantom unit awards and other unit-based awards upon Mr.Serjeant’s qualifying termination of employment to the extent permitted under the applicable plan. All payments and benefits due under the COC Agreement are conditioned upon the execution and non-revocation by Mr.Serjeant of a release for the benefit of the General Partner. All payments under the COC Agreement are subject to reduction as may be necessary to avoid exceeding the amount allowed under Section280G of the Internal Revenue Code of 1986, as amended. In the event a qualifying termination occurs under the COC Agreement, in order to avoid duplication, Mr.Serjeant will receive benefits under the COC Agreement in lieu of the Employment Agreement.
The COC Agreement also contains certain confidentiality provisions and related restrictions applicable to Mr.Serjeant. In addition to restrictions upon improper disclosure and use of Confidential Information (as defined in the COC Agreement), Mr.Serjeant agrees that for a period of two years following a termination of employment for any reason, he will not solicit the General Partner’s or the Partnership’s employees or otherwise engage in a competitive business with the General Partner or the Partnership as more specifically set forth in the COC Agreement. Such obligations are only applicable to Mr.Serjeant if he receives the severance benefits described above.
The foregoing description of the COC Agreement is not complete and is subject to and qualified in its entirety by reference to the full text of the COC Agreement, which is attached hereto as Exhibit 10.1.
Item 7.01 Regulation FD Disclosure.
On November 20, 2017, the Partnership issued a news release announcing Mr. Serjeant’s appointment as President.A copy of the news release is furnished as exhibit 99.1 to this Current Report.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
CSI Compressco LP ExhibitEX-10.1 2 cclp-ex101_6.htm EX-10.1 cclp-ex101_6.htm Exhibit 10.1 CHANGE OF CONTROL AGREEMENT THIS CHANGE OF CONTROL AGREEMENT (the “Agreement”),…To view the full exhibit click here
About CSI Compressco LP (NASDAQ:CCLP)
CSI Compressco LP, formerly Compressco Partners, L.P., is a provider of compression services and equipment for natural gas and oil production, gathering, transportation, processing and storage. The Company sells custom-designed compressor packages and oilfield fluid pump systems, and provides aftermarket services and compressor package parts and components manufactured by third-party suppliers. It provides these compression services and equipment to a base of natural gas and oil exploration and production, midstream and transmission companies operating throughout many of the onshore producing regions of the United States, as well as in a number of foreign countries, including Mexico, Canada and Argentina. It is a service provider of natural gas compression services in the United States, utilizing its fleet of compressor packages that employs a spectrum of low-, medium- and high-horsepower engines.
