Flotek Industries, Inc. (NYSE:FTK) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item5.02

Departure of Robert M. Schmitz

As previously reported, on November2, 2016, Robert M. Schmitz
notified Flotek Industries, Inc. (the Company) of his decision to
retire as the Companys Executive Vice President and Chief
Financial Officer effective in the first quarter of 2017.
Mr.Schmitzs decision to retire was not due to any disagreement
with the Company, including with respect to any matter relating
to the Companys operations, policies or practices. Mr.Schmitzs
retirement is effective February13, 2017 (the Schmitz Retirement
Date). In connection with his retirement, the Company and
Mr.Schmitz entered into a Retirement Agreement (the Schmitz
Retirement Agreement). to the Schmitz Retirement Agreement, on
the Effective Date (as such term is defined in the Schmitz
Retirement Agreement), Mr.Schmitz shall receive a one-time
payment of $100,000.00 and, at the end of each of the next nine
full calendar months following the Effective Date, shall receive
a payment of $39,930.56. Following the Schmitz Retirement Date,
Mr.Schmitz shall receive coverage at Company expense under the
employee health insurance plan of the Company until August31,
2018. The description of the Schmitz Retirement Agreement is
qualified in its entirety by reference to the copy thereof filed
as Exhibit 10.1 to this Form 8-K, which is incorporated by
reference.

Appointment of Richard Walton as Chief Financial
Officer

Also on February13, 2017, H. Richard Walton was appointed as
Executive Vice President and Chief Financial Officer of Flotek.
Mr.Walton has served as Chief Financial Officer Emeritus since
May 2015. Previously, Mr.Walton served as Executive Vice
President and Chief Financial Officer from March 2013 through May
2015 and Interim Chief Financial Officer from January 2013
through March 2013. Prior to joining Flotek, Mr.Walton spent his
entire 30 year career in public accounting, including 20 years as
an audit partner at KPMG. His experience includes financial
statement audits and registration of securities with the SEC.
Following his retirement from KPMG, LLP in 2003, Mr.Walton served
as a consultant to public companies, including Flotek since 2010.
Mr.Walton is a certified public accountant and has served as an
officer in the United States Army. He holds a Bachelors degree
from Westminster College in Economics and Business
Administration.

Departure of Steve Reeves

On February 16, 2017, Steve Reeves, Executive Vice President,
Operations of the Company, indicated his desire to retire from
his position with the Company and the Companys subsidiaries,
effective June30, 2017 (the Reeves Retirement Date). Mr.Reeves
decision to retire is not due to any disagreement with the
Company, including with respect to any matter relating to the
Companys operations, policies or practices. In connection with
his retirement, the Company and Mr.Reeves entered into a
Retirement Agreement (the Reeves Retirement Agreement). to the
Reeves Retirement Agreement, starting on the Effective Date (as
such term is defined in the Reeves Retirement Agreement),
Mr.Reeves shall receive a bi-weekly salary of $16,730.77 until
the Reeves Retirement Date. Following the Reeves Retirement Date,
Mr.Reeves shall receive coverage at Company expense under the
employee health insurance plan of the Company until December31,
2018. Furthermore, on the Effective Date, the Company shall issue
to Mr.Reeves, 68,333 shares of common stock to a Restricted Stock
Agreement between Mr.Reeves and the Company. Such stock shall
vest as of the Reeves Retirement Date along with the 25,014
unvested shares of common stock which were issued to Mr.Reeves to
the terms of the Restricted Stock Agreement between the Company
and Mr.Reeves, dated January26, 2015. The description of the
Reeves Retirement Agreement is qualified in its entirety by
reference to the copy thereof filed as Exhibit 10.2 to this Form
8-K, which is incorporated by reference.

Compensatory Arrangements of Certain
Officers

On February13, 2017, the Compensation Committee (the Compensation
Committee) of the board of directors of the Company (the Board)
approved base salaries for certain of the executive officers of
the Company effective as of January1, 2017 and, in order to
provide appropriate incentives to work towards the continued
growth

and success of the Company, adopted a Management Incentive Plan
(the 2017 MIP) and Performance Unit Plan (2017 PUP) with respect
to certain of its senior executive officers. The table below sets
forth the 2017 annual base salary for the Companys executive
officers, including the principal executive officer, the
principal financial officer and the other executive officers of
the Company.

The 2017 MIP provides for the payment of cash bonuses to
management personnel selected by the Compensation Committee,
including all of the named executive officers. These bonuses are
expressed as a percentage of each participants 2017 annual base
salary (the Target Bonus Percentage). The Target Bonus Percentage
for the President, Chief Executive Officer and Chairman is 110%
of base salary. The range for other participants is 75% to 85% of
base salary. The table below sets forth the 2017 Target Bonus
Percentage for purposes of the 2017 MIP for the Companys
executive officers, including the principal executive officer,
the principal financial officer and the other executive officers
of the Company.

Bonuses under the 2017 MIP are made up of three separate parts: a
bonus based on Earnings Before Interest, Taxes, Depreciation and
Amortization (the EBITDA Bonus), a bonus based on revenues (the
Revenue Bonus) and a bonus based on the achievement of certain
goals set by the Compensation Committee for each participant (the
Goal Bonus).

The EBITDA Bonus accounts for 60% of the total bonus potentially
payable under the MIP. The EBITDA Bonus is based on the Companys
2017 Adjusted EBITDA. Adjusted EBITDA means the consolidated
EBITDA of the Company, excluding the results from any operations
considered discontinued operations for GAAP purposes, plus any
amounts deducted in computing EBITDA with respect to incentive
compensation (including stock compensation), the MIP, financing
transaction costs (whether paid in cash or not), and other
noncash and/or nonrecurring charges not directly related to the
ongoing operations of the Company, equitably adjusted by the
Compensation Committee (in its discretion) to reflect the effect
of any acquisition or disposition of any assets and/or lines of
business or the impact of any extraordinary or nonrecurring
items. Depending on the performance of the Companys 2017 Adjusted
EBITDA, a percentage (ranging from 0-200%) will be applied to
each participants Target Bonus Percentage (the EBITDA Bonus
Percentage). The EBITDA Bonus of a participant shall equal 60% of
the EBITDA Bonus Percentage of the participant, multiplied by the
annual salary as of the date that the MIP becomes applicable to
the participant.

The Revenue Bonus accounts for 20% of the total bonus potentially
payable under the MIP. The Revenue Bonus is based on the
performance of the Companys Adjusted Revenue. Adjusted Revenue is
consolidated revenue, as determined to GAAP, excluding the
results from any operations considered discontinued operations
for GAAP purposes, equitably adjusted by the Compensation
Committee (in its discretion) to reflect the effect of any
acquisition or disposition of any assets and/or lines of business
and other extraordinary, nonrecurring items. Similar to the
EBITDA Bonus, depending on the performance of the Companys
Adjusted Revenues, a percentage (ranging from 0-200%) will be
applied to each participants Target Bonus Percentage relating to
the Revenue Bonus (the Revenue Bonus Percentage). The Revenue
Bonus of a participant shall equal 20% of the Revenue Bonus
Percentage of the participant, multiplied by the annual salary as
of the date that the MIP becomes applicable to the participant.

The Goal Bonus accounts for 20% of the total bonus potentially
payable under the MIP. The Compensation Committee shall, on or
before March15, 2017, inform the participant in writing of the
goals which the Compensation Committee has established as being
the criteria to be met by the participant in order to receive
his/her Goal Bonus. The Compensation Committee may establish more
than one goal for the participant and may allocate the Goal Bonus
of that participant among the goals. The Goal Bonus (or a part
thereof) shall be payable to the participant if the Compensation
Committee determines, in its discretion, that the goal(s) that
the Compensation Committee has determined to be applicable to
that participant for that Goal Bonus has been achieved by the
participant. The Goal Bonus shall equal 20% of the Target Bonus
Percentage of that participant, multiplied by the annual base
salary of the participant as of the date that the MIP becomes
applicable to the participant.

The 2017 PUP permits the Company to grant Performance Units to
certain of the officers, employees and other service providers of
the Company. The 2017 PUP provides for an amount of Target Units
to be granted to each participant. Such Target Units are
calculated by multiplying the annual salary of the participant by
the Award Value Multiple listed below and dividing such product
by the greater of $13.00 or the closing price on the New York
Stock Exchange of the Common Stock of the Company as of the date
of the award, February13, 2017. Each participant shall be issued
the number of shares of Restricted Stock equal to the number of
Target Units held multiplied by the Performance Percentage. The
Performance Percentage will be either 0%, 50%, 50% or 200%
depending on the performance of the Companys stock relative to
members of a peer group listed in the 2017 PUP.

A portion of Mr.Chisholms compensation is payable to companies
controlled by Mr.Chisholm to the Fifth Amended and Restated
Service Agreement, as amended, by and between the Company and
such companies controlled by Mr.Chisholm. On February13, 2017,
the Board authorized the Company to enter into a letter agreement
with Protechnics II, Inc. and Chisholm Management, Inc. to amend
that certain Fifth Amended and Restated Service Agreement with
such parties to which the compensation payable to such parties,
which relates to the services provided by John Chisholm as
Chairman, President and Chief Executive Officer of the Company,
is increased to $810,000 effective as of January1, 2017. This
compensation amount is included in the base annual salary amount
indicated above for Mr.Chisholm. The description of the letter
agreement is qualified in its entirety by reference to the copy
thereof filed as Exhibit 10.3 to this Form 8-K, which is
incorporated by reference.

About Flotek Industries, Inc. (NYSE:FTK)

Flotek Industries, Inc. is a technology-driven company that develops and supplies oilfield products, services and equipment to the oil, gas and mining industries. The Company has four business segments: Energy Chemistry Technologies, Consumer and Industrial Chemical Technologies, Drilling Technologies, and Production Technologies. The Energy Chemistry Technologies segment designs, develops, manufactures, packages and markets chemicals for use in oil and gas well drilling, cementing, completion, stimulation and production activities. The Consumer and Industrial Chemicals Technologies segment sources citrus oil domestically and internationally, and is a processor of citrus oils. The Drilling Technologies segment is a provider of downhole drilling tools for use in oilfield, mining, water-well and industrial drilling activities. The Production Technologies segment provides pumping system components, electric submersible pumps, gas separators, production valves and complementary services.

Flotek Industries, Inc. (NYSE:FTK) Recent Trading Information

Flotek Industries, Inc. (NYSE:FTK) closed its last trading session down -0.15 at 12.35 with 503,298 shares trading hands.