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EX-10.1 - EX-10.1 - BASIC ENERGY SERVICES, INC. | h80544exv10w1.htm |
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 10, 2011
Basic Energy Services, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 1-32693 | 54-2091194 | ||
(State or other jurisdiction of | (Commission | (IRS Employer | ||
incorporation ) | File Number) | Identification No.) | ||
500 W. Illinois, Suite 100 | ||||
Midland, Texas | 79701 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (432) 620-5500
Not Applicable
(Former name or former address, if changed since last report.)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see
General Instruction A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Performance-Based Stock Awards
On March 10, 2011, the Compensation Committee of the Board of Directors of Basic Energy
Services, Inc. (Basic) approved grants of performance-based stock awards to each of Basics
executive officers, including Basics named executive officers. Pursuant to the grant agreements,
the performance-based awards consist of shares to be earned (the TSR Shares) 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 one-year calculation period starting on the
20th NYSE trading day prior to and including the last NYSE trading day of 2010 and ending on the
last NYSE trading day of 2011), with Basics ranking in TSR performance being compared to the
ranking in TSR performance of the members of the PB Peer Group (as defined below). The companies in
the PB Peer Group will be ranked from best performing to worst performing with regard to each
companys respective TSR performance, with the PB Peer Group company ranked 1st being the company
with the highest TSR when compared to the other PB Peer Group companies and the PB Peer Group
company ranked 13th being the company with the lowest TSR when compared to the other PB Peer Group
companies, with rankings 2 through 12 being determined in descending order based upon the
corresponding descent in TSR performance for companies in the PB Peer Group from 2nd highest to
12th highest. The shares awarded pursuant to the performance-based awards comprise one third of the
total long-term incentive compensation for each of Basics executive officers, including Basics
named executive officers. The remaining two thirds of the total long-term incentive compensation
will be awarded at the discretion of Basics Board of Directors based on the recommendation of
management.
The target number of TSR Shares and maximum number of TSR Shares that may be earned by each
executive officer pursuant to the grant agreement is set forth below:
Target Number of | Maximum Number of TSR Shares | |||||||
Executive Officer | TSR Shares | (150% of Target Amount) | ||||||
Kenneth V. Huseman President, Chief Executive Officer and Director |
42,476 | 63,714 | ||||||
Alan Krenek Senior Vice President, Chief Financial Officer, Treasurer and Secretary |
14,159 | 21,238 | ||||||
T.M. Roe Patterson Senior Vice President Rig and Truck Operations |
11,175 | 16,763 | ||||||
James F. Newman Group Vice President Completion and Remedial Services |
8,596 | 12,894 | ||||||
James E. Tyner Vice President Human Resources |
6,826 | 10,240 | ||||||
Douglas B. Rogers Vice President Marketing |
5,583 | 8,374 | ||||||
Stephen J. McCoy Vice President Contract Drilling |
4,806 | 7,209 |
The grantee will earn shares as follows: (A) the percentage set forth below of the target
share amounts set forth above if Basics TSR is equal to the TSR of the ranked member of the PB
Peer Group set forth below, (B) 150% of
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the target share amounts set forth above based on Basics TSR being greater than the TSR of
the 1st-ranked member of the PB Peer Group and (C) 0% of the target share amounts set forth above
based on Basics TSR being less than the TSR of the 13th-ranked member of the PB Peer Group:
PB Peer Group Company | Percentage of TSR | |||||||
Rank Based on TSR | Target Shares Earned | |||||||
Performance | by Grantee | |||||||
1st | 150.0 | % | ||||||
2nd | 141.7 | % | ||||||
3rd | 133.3 | % | ||||||
4th | 125.0 | % | ||||||
5th | 116.7 | % | ||||||
6th | 108.3 | % | ||||||
7th | 100.0 | % | ||||||
8th | 83.3 | % | ||||||
9th | 66.7 | % | ||||||
10th | 50.0 | % | ||||||
11th | 33.3 | % | ||||||
12th | 16.7 | % | ||||||
13th | 0.0 | % |
provided that if Basics TSR is greater than the TSR of one PB Peer Group company and less than the
TSR of the next highest ranked PB Peer Group company, the exact percentage of shares earned by the
grantee will be determined by proportional interpolation between the percentages assigned to such
PB Peer Group companies set forth above. Notwithstanding the foregoing, if Basics TSR exceeds that
of both Key Energy Services, Inc. and Complete Production Services, Inc., the grantee will earn the
higher of (x) 100% of the target share amounts set forth above or (y) the percentage derived from
the paragraph above.
PB Peer Group means each of the following companies: (1) Bronco Drilling Company, Inc.; (2)
Complete Production Services, Inc.; (3) Hercules Offshore, Inc.; (4) Key Energy Services, Inc.; (5)
Natural Gas Services Group, Inc.; (6) Oil States International, Inc.; (7) Patterson-UTI Energy,
Inc.; (8) Pioneer Drilling Co.; (9) Superior Energy Services, Inc.; (10) Team, Inc.; (11) Tesco
Corp.; (12) Tetra Technologies, Inc. and (13) Union Drilling, Inc.; provided that the Compensation
Committee in its sole discretion can determine to continue to include in or exclude from the peer
group any of the above companies based on the occurrence of certain circumstances set forth in the
grant agreements, but in no event may substitute any other company in such excluded companys place
as part of the PB Peer Group.
Once earned, the shares of restricted stock will vest in one-third increments on March 15,
2013, 2014 and 2015 (subject to accelerated vesting in certain circumstances as described below).
All unvested shares of restricted stock will be forfeited by the grantee (a) if the grantees
employment with Basic is terminated by Basic for Cause before the restricted stock is vested or
(b) if the grantee terminates his employment with Basic before the restricted stock is 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 grant agreement. The grantee will vest in all rights to the restricted
stock on the earliest of (i) the dates set forth above; (ii) termination by Basic without Cause;
(iii) the death or Disability of the grantee or (iv) Termination for Good Reason.
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The foregoing description in this Item 5.02 is qualified in its entirety by reference to the
full text of the form of Performance-Based Award Agreement, which is filed as Exhibit 10.1 hereto
and is incorporated herein by reference.
2010 Long-Term Incentive Awards
On March 10, 2011, Basics Board of Directors, after discussion with a compensation consultant
and based on the recommendation of the Compensation Committee, approved grants of restricted stock
to executive officers under Basics long-term incentive plan based on the executive officers
personal performance as well as consideration of company performance for 2010 based on criteria
previously established by the Compensation Committee for consideration in connection with annual
equity awards. The terms of the award agreements are materially consistent with the terms of a
previously disclosed plan of performance-based and discretionary awards planned for 2010, except
that the shares granted will vest ratably over a three-year period instead of the four-year period
for shares previously granted under the plan. The number of shares issuable to each of the
executive officers under these award agreements is set forth below:
Executive Officer | Shares of Restricted Stock | |||
Kenneth V. Huseman President, Chief Executive Officer and Director |
94,302 | |||
Alan Krenek Senior Vice President, Chief Financial Officer, Treasurer and Secretary |
34,292 | |||
T.M. Roe Patterson Senior Vice President Rig and Truck Operations |
27,136 | |||
James F. Newman Group Vice President Completion and Remedial Services |
20,253 | |||
James E. Tyner Vice President Human Resources |
14,116 | |||
Douglas B. Rogers Vice President Marketing |
11,431 | |||
Stephen J. McCoy Vice President Contract Drilling |
3,474 |
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1
|
Form of Performance-Based Award Agreement (effective March 2011). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Basic Energy Services, Inc. |
||||
Date: March 16, 2011 | By: | /s/ Alan Krenek | ||
Name: | Alan Krenek | |||
Title: | Senior Vice President, Chief Financial Officer, Treasurer and Secretary | |||
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