Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
The Board of Directors (the "Board") of Nine Energy Service, Inc. (the
"Company") has appointed Guy Sirkes as the Senior Vice President and Chief
Financial Officer (principal financial officer) of the Company, effective as of
March 31, 2020. Mr. Sirkes succeeds Clinton Roeder in connection with the
termination of Mr. Roeder's employment as the Senior Vice President and Chief
Financial Officer on March 31, 2020.
Mr. Sirkes, age 34, has served as Vice President, Strategic Development of the
Company since March 2019. Mr. Sirkes was previously an Executive Director with
J.P. Morgan's Oil & Gas Investment Banking group, where he worked from July 2007
through March 2019, spending time in both Houston, Texas and Sydney, Australia.
During his time at J.P. Morgan, Mr. Sirkes executed equity, debt and mergers and
acquisitions transactions. Mr. Sirkes holds a Bachelor of Arts Degree in
Mathematical Economic Analysis from Rice University.
In connection with his appointment, Mr. Sirkes entered into an employment
agreement (the "Sirkes Employment Agreement") with the Company and its
subsidiary, Nine Energy Service, LLC (the "Employer"), effective as of March 31,
2020. The Sirkes Employment Agreement provides for a three-year initial term
with automatic renewals for additional one-year periods unless either Mr. Sirkes
or the Employer gives written notice of non-renewal at least 60 days prior to
the expiration of the then-current initial term or renewal term.
The Sirkes Employment Agreement provides for an initial annualized base salary
of $380,000 and a discretionary annual bonus under the Employer's annual cash
incentive bonus program based on the achievement of certain performance targets
established by the Board. The Sirkes Employment Agreement provides for an
initial target bonus opportunity of 80% of base salary and initial maximum bonus
opportunity of 160% of base salary. In addition, pursuant to the Sirkes
Employment Agreement, Mr. Sirkes is eligible to receive annual equity
compensation awards pursuant to the Company's 2011 Stock Incentive Plan (the
"Stock Incentive Plan") on such terms and conditions as determined by the Board
or a committee thereof.
The Sirkes Employment Agreement provides that, if Mr. Sirkes is terminated
(i) by the Employer without "cause" (as defined in the Sirkes Employment
Agreement), including upon the expiration of the then-existing initial term or
renewal term, as applicable, as a result of the Employer's non-renewal of the
term of the Sirkes Employment Agreement, or (ii) by Mr. Sirkes for "good reason"
(as defined in the Sirkes Employment Agreement) (each, a "Qualifying
Termination"), then, provided that Mr. Sirkes timely executes and does not
revoke a release in a form acceptable to the Employer and abides by the
restrictive covenants included in the Sirkes Employment Agreement, Mr. Sirkes
will be eligible to receive:
• a severance payment in an aggregate amount equal to Mr. Sirkes' severance
multiple of one multiplied by the sum of: (x) Mr. Sirkes' base salary for the
year in which such termination occurs and (y) his then-current target annual
bonus, payable in 12 substantially equal installments;
• a prorated annual bonus for the year in which such Qualifying Termination
occurs, subject to achievement of the applicable performance criteria;
• if Mr. Sirkes elects continuation coverage pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), monthly
reimbursement for the amount paid by Mr. Sirkes to continue such coverage for
up to 18 months following the date of such Qualifying Termination; and
• accelerated vesting of all outstanding time-based equity awards held by
Mr. Sirkes on the date of such Qualifying Termination (equity awards subject
to performance requirements will remain subject to the terms and conditions
set forth in the applicable award agreement).
In the event Mr. Sirkes experiences a Qualifying Termination within the 24-month
period immediately following a "corporate change" (as defined in the Stock
Incentive Plan), then Mr. Sirkes will be eligible to receive the payments and
benefits described above, except that: (i) his severance multiple will be
increased from one to two; and (ii) all outstanding equity awards held by
Mr. Sirkes on the date of such Qualifying Termination will become immediately
fully vested (determined based on target performance for awards then subject to
performance requirements).
2
--------------------------------------------------------------------------------
The Sirkes Employment Agreement contains certain restrictive covenants,
including non-solicitation and non-competition provisions, which are generally
intended to apply during the term of Mr. Sirkes' employment and for the one-year
period following the termination of such employment.
In connection with his appointment, the Company and Mr. Sirkes entered into
an indemnification agreement which requires the Company to indemnify him to the
fullest extent permitted under Delaware law against liability that may arise by
reason of his service as an officer, and to advance expenses incurred as a
result of any proceeding against him as to which he could be indemnified. The
foregoing description of the indemnification agreement is not complete and is
qualified in its entirety by reference to the full text of the indemnification
agreement, which is attached as Exhibit 10.2 to this Current Report on
Form 8-K and incorporated into this Item 5.02 by reference.
There are no family relationships between Mr. Sirkes and any director or
executive officer of the Company or any person nominated or chosen by the
Company to become a director or executive officer, and Mr. Sirkes has no direct
or indirect material interest in any transaction required to be disclosed
pursuant to Item 404(a) of Regulation S-K. There are no arrangements or
understandings between Mr. Sirkes and any other persons pursuant to which he was
selected as Senior Vice President and Chief Financial Officer.
On March 31, 2020, the Employer entered into a Separation Agreement and General
Release of Claims (the "Separation Agreement") with Clinton Roeder in connection
with the termination of his employment as the Senior Vice President and Chief
Financial Officer (principal financial officer), effective as of March 31, 2020
(the "Separation Date"). The Company also entered into the Separation Agreement
for limited purposes. Mr. Roeder may revoke the Separation Agreement within a
period of seven days after he signs it, after which time if not revoked, the
Separation Agreement will become effective.
The Separation Agreement provides for the payment of certain severance payments
and benefits to Mr. Roeder in accordance with his amended and restated
employment agreement (the "Roeder Employment Agreement") entered into as of
November 20, 2018 with the Employer and the Company. In accordance with the
terms of the Roeder Employment Agreement, the Separation Agreement provides that
Mr. Roeder will be entitled to receive: (i) a severance payment in an aggregate
amount equal to $684,000, which is payable over the 12-month period following
the Separation Date; (ii) if Mr. Roeder elects to continue coverage for himself
and his spouse and eligible dependents under the Employer's group health plan
pursuant to COBRA, monthly reimbursement of the amount Mr. Roeder pays to effect
and continue such coverage until the earlier of the date he is no longer
eligible for COBRA coverage, the date he becomes eligible to receive such
coverage under another employer's group medical plan or 18 months following the
Separation Date; and (iii) subject to the achievement of the level of
performance necessary for participants in the Employer's annual cash incentive
bonus program to receive cash bonuses with respect to the 2020 calendar year, a
prorated annual bonus for the 2020 calendar year, payable on the date that
annual bonuses are paid to other participants in the annual cash incentive bonus
program. With respect to the outstanding equity compensation awards granted to
Mr. Roeder that remain unvested as of the Separation Date (collectively, the
"Outstanding Equity Awards"), the Separation Agreement provides that
(a) Outstanding Equity Awards subject to time-based vesting conditions shall
immediately vest in full as of the Separation Date; (b) Outstanding Equity
Awards subject to performance-based vesting conditions shall remain outstanding
and eligible to vest, subject to the terms and conditions of the applicable
award agreement pursuant to which such Outstanding Equity Awards were granted,
and (c) all outstanding stock options that have become vested as of the
Separation Date (determined after giving effect to the foregoing clause (a))
shall remain exercisable through the earlier of the date that is one year after
the Separation Date or the original expiration date.
The Separation Agreement includes a customary release of claims by Mr. Roeder in
favor of the Company and its affiliates, and Mr. Roeder's eligibility and
entitlement, if any, to each severance payment and benefit described above is
subject to the non-revocation of such release of claims. In addition, the
Separation Agreement provides that Mr. Roeder shall remain subject to
confidentiality and certain other restrictive covenant obligations in the Roeder
Employment Agreement.
3
--------------------------------------------------------------------------------
. . .
Item 7.01 Regulation FD Disclosure.
A copy of the Company's press release announcing the appointment of Mr. Sirkes
as Senior Vice President and Chief Financial Officer of the Company is attached
as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by
reference.
The information in this Item 7.01 (including the exhibit) shall not be deemed to
be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or otherwise subject to the liabilities of that
section, and is not incorporated by reference into any filing under the
Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
10.1 Employment Agreement between Guy Sirkes and Nine Energy Service,
LLC, dated as of March 31, 2020.
10.2 Indemnification Agreement, dated as of March 31, 2020, by and
between the Company and Guy Sirkes.
10.3 Separation Agreement and General Release of Claims by and between
Clinton Roeder and Nine Energy Service, Inc., dated as of March 31,
2020.
99.1 Press Release, dated March 31, 2020, titled "Nine Energy Service
Announces CFO Transition".
© Edgar Online, source Glimpses
NINE ENERGY SERVICE, INC. 
