UNITED STATES
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
Date of Report (Date of earliest event reported): December 29, 2006
Basic Energy Services, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation )
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1-32693
(Commission
File Number)
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54-2091194
(IRS Employer
Identification No.) |
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400 W. Illinois, Suite 800
Midland, Texas
(Address of principal executive offices)
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79701
(Zip Code) |
Registrant’s telephone number, including area code: (432) 620-5500
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))
TABLE OF CONTENTS
Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
On December 29, 2006, we entered into new employment agreements with certain of our executive
officers, each effective as of December 31, 2006. These new agreements contain the current base
salaries being paid to the executive officers but amend certain provisions relating to severance
and non-competition matters. Pursuant to our employment agreement effective December 31, 2006 with
Kenneth V. Huseman, our President and Chief Executive Officer, Mr. Huseman is entitled to an
initial annual base salary of $400,000 and a minimum annual bonus of $50,000. Under this
employment agreement, Mr. Huseman is eligible from time to time to receive grants of stock options
and other long-term equity incentive compensation under our Second Amended and Restated 2003
Incentive Plan. If Mr. Huseman’s employment is terminated for certain reasons, he would be
entitled to a lump sum severance payment equal to three times the sum of his base salary plus his
current annual incentive target bonus for the full year in which the termination of employment
occurred. Additionally, if Mr. Huseman’s employment is terminated for certain reasons within the
six months preceding or the twelve months following a change of control of our company, he would be
entitled to a lump sum severance payment equal to three times the sum of his base salary plus the
higher of (i) his current annual incentive target bonus for the full year in which the termination
of employment occurred or (ii) the highest annual incentive bonus received by him for any of the
last three fiscal years. Mr. Huseman’s employment agreement is effective through December 31, 2009
and will automatically renew for subsequent one year periods unless notice of termination is
properly given by us or Mr. Huseman. In the event that Mr. Huseman’s employment agreement is not
renewed by us and a new employment agreement has not been entered into, Mr. Huseman will be
entitled to the same severance benefits described above. Mr. Huseman’s employment agreement is
attached as an exhibit hereto and incorporated herein by reference.
We have also entered into employment agreements effective December 31, 2006 with Alan Krenek,
our Senior Vice President, Chief Financial Officer, Treasurer and Secretary, and Charles W. Swift,
our Senior Vice President — Rig and Truck Operations. Pursuant to these agreements, Mr. Krenek is
entitled to an initial base salary of $240,000 and Mr. Swift is entitled to an initial base salary
of $200,000. Each of Messrs. Krenek and Swift will also be entitled to an annual performance bonus
if certain performance criteria are met. Under these employment agreements, the officer is
eligible from time to time to receive grants of stock options and other long-term equity incentive
compensation under our Second Amended and Restated 2003 Incentive Plan. If the officer’s
employment is terminated for certain reasons, he would be entitled to a lump sum severance payment
equal to 1.50 times the sum of his base salary plus his current annual incentive target bonus for
the full year in which the termination of employment occurred. Additionally, if the officer’s
employment is terminated for certain reasons within the six months preceding or the twelve months
following a change of control of our company, he would be entitled to a lump sum severance payment
equal to two times the sum of his base salary plus the higher of (i) his current annual incentive
target bonus for the full year in which the termination of employment occurred or (ii) the highest
annual incentive bonus received by him for any of the last three fiscal years. The officer’s
employment agreement is effective through December 31, 2007 and will automatically renew for
subsequent one year periods unless notice of termination is properly given by us or the officer.
In the event that the officer’s employment agreement is not renewed by us and a new employment
agreement has not been entered into, the officer will be entitled to the same severance benefits
described above. Mr. Krenek’s employment agreement and Mr. Swift’s employment agreement are each
attached as exhibits hereto and incorporated herein by reference.
We have also entered into employment agreements effective December 31, 2006 with the following
one other executive officer who was a “named executive officer” as of December 31, 2005, Dub
William Harrison, our Vice President — Equipment and Safety, as well as James E. Tyner, our Vice
President — Human Resources, Thomas Monroe Patterson, our Vice President — Corporate Development
and Rental & Fishing Tool Services, and Mark David Rankin, our Vice President — Risk Management.
Pursuant to these agreements, these officers are entitled to the following initial base salaries:
Mr. Harrison, $150,000; Mr. Tyner, $140,000; Mr. Patterson, $140,000; and Mr. Rankin, $130,000.
Each of these officers will also be entitled to an annual performance bonus if certain performance
criteria are met. Under these employment agreements, the officer is eligible from time to time to
receive grants of stock options and other long-term equity incentive compensation under our Second
Amended and Restated 2003 Incentive Plan. If the officer’s employment is terminated for certain
reasons, he would be entitled to a lump sum severance payment equal to 0.75 times the sum of his
base salary plus his current annual incentive target bonus for the full year in which the
termination of employment occurred. Additionally, if the officer’s employment is terminated for
certain reasons within the six months preceding or the twelve months following a change of control
of our company, he would be entitled to a lump sum severance payment equal to one times the sum of
his base salary plus the higher of (i) his current annual incentive target bonus for the full year
in which the termination of employment occurred or (ii) the highest annual incentive bonus received
by him for any of the last three fiscal years. The officer’s employment agreement is effective
through December 31, 2007 and will automatically renew for subsequent one year periods unless
notice of termination is properly given by us or the officer. In the event that the officer’s
employment agreement is not renewed by us and a new employment agreement has not been entered into
within the six months preceding or the twelve months following a change in control of our company,
the officer will be entitled to the same severance benefits described above. The employment
agreements for these executive officers are each attached as exhibits hereto and incorporated
herein by reference.
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As consideration for us entering into the above employment agreements, Messrs. Huseman,
Krenek, Swift, Harrison, Tyner, Patterson and Rankin have each agreed in his employment agreement
that, for a period of 6 months following the termination of his employment by us without cause or
by him for good reason, and for a period of two years following the termination of his employment
for retirement or any other reason, he will not, among other things, engage in any business
competitive with ours, render services to any entity who is competitive with us or solicit business
from certain of our customers or potential customers. These non-competition restrictions shall not
apply in the event that such termination is within 12 months of a change in control of our
business. Additionally, the officer has agreed not to solicit any of our employees to reduce or
adversely affect their employment with us for a period of two years from such officer’s date of
termination, for whatever reason.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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10.1
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Employment Agreement of Kenneth V. Huseman, effective as of December 31, 2006. |
10.2
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Employment Agreement of Alan Krenek, effective as of December 31, 2006. |
10.3
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Employment Agreement of Charles W. Swift, effective as of December 31, 2006. |
10.4
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Employment Agreement of Dub William Harrison, effective as of December 31, 2006. |
10.5
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Employment Agreement of James E. Tyner, effective as of December 31, 2006. |
10.6
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Employment Agreement of Thomas Monroe Patterson, effective as of December 31, 2006. |
10.7
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Employment Agreement of Mark David Rankin, effective as of December 31, 2006. |
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