Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Executive Officer and Board of Directors Compensation Reductions
In connection with a company-wide cost reduction initiative implemented by
Nuverra Environmental Solutions, Inc. (the "Company"), certain members of the
Company's executive management team have agreed to voluntarily reduce their base
salaries. Charles K. Thompson, the Chairman of the Board and Chief Executive
Officer of the Company, has voluntarily reduced his base salary by 25% and
Robert Fox, the President and Chief Operating Officer of the Company, has
voluntarily reduced his base salary by 20%. Each of the foregoing salary
reductions will be effective as of April 6, 2020.
The Board of Directors of the Company has also approved a modification to the
non-employee director compensation program that reduces overall cash and
non-cash compensation by 25% and reallocates the amount equally between cash and
the annual equity grant. The compensation of non-employee members of our Board
of Directors, for our 2018 and 2019 fiscal years, consisted of $100,000 in cash
and an annual equity grant with a target grant-date value of $50,000. As a
result of this modification, compensation of non-employee members of our Board
of Directors for the 2020 fiscal year will consist of $56,250 in cash and an
annual equity grant with a target grant-date value of $56,250. The Chair of each
of the Board's standing committees also receives cash compensation at the same
amount as was paid in the 2018 and 2019 fiscal years. Lawrence A. First, one of
the Company's non-employee directors, has directed the Company to pay directly
to certain affiliates of Ascribe Capital LLC ("Ascribe") any cash compensation
otherwise payable to him for service as a non-employee director, and Mr. First
has declined to receive any equity-based compensation for his service as a
non-employee director, either personally or through Ascribe's affiliates.
Appointment of Interim Chief Financial Officer
Effective April 3, 2020, the Board of Directors (the "Board") of Nuverra
Environmental Solutions, Inc. ("Nuverra" or the "Company") appointed Eric Bauer
to serve as the Executive Vice President and Interim Chief Financial Officer of
the Company. Mr. Bauer will also serve as the Company's principal financial
officer. Charles K. Thompson, the prior Interim Chief Financial Officer, will
continue to serve as the Chairman of the Board and Chief Executive Officer of
the Company and as the Company's principal executive officer. Prior to his
appointment as Executive Vice President and Interim Chief Financial Officer, Mr.
Bauer served as a consultant to the Company since December 2019, advising on
various corporate finance matters and strategic projects.
Mr. Bauer, age 39, has over seventeen years of experience in corporate finance
and investment banking, working primarily on merger & acquisition advisory,
equity underwriting, and debt underwriting across all sectors of the energy
industry. Mr. Bauer was most recently a Managing Director at Evercore in the
Energy Corporate Advisory Business focused on mergers and acquisitions. Mr.
Bauer has previously worked for both Lehman Brothers and Citi in their Global
Energy Groups and worked at Avista Capital Partners focused on private equity
investing in the energy industry. Mr. Bauer graduated Cum Laude from Southern
Methodist University, where he received a BBA in Finance and a BA in History.
There are no (i) family relationships, as defined in Item 401 of Regulation S-K,
between Mr. Bauer and any of the Company's executive officers or directors, or
any person nominated to become a director or executive officer, (ii)
arrangements or understandings between Mr. Bauer and any other person pursuant
to which Mr. Bauer was appointed as Executive Vice President and Interim Chief
Financial Officer of the Company, or (iii) transactions in which Mr. Bauer has
an interest requiring disclosure under Item 404(a) of Regulation S-K.
In connection with Mr. Bauer's appointment, he entered into an Employment
Agreement with the Company (the "Employment Agreement"), effective as of April
3, 2020. Pursuant to the Employment Agreement, Mr. Bauer will serve as the
Executive Vice President and Interim Chief Financial Officer of the Company for
a two year term, with such term to be automatically extended for successive
one-year periods thereafter, unless either the Company or Mr. Bauer provides at
least ninety (90) days prior written notice of termination pursuant to the terms
of the Employment Agreement. In the event Mr. Bauer is terminated for Cause (as
defined in the Employment Agreement) or voluntarily terminates his employment
without Good Reason (as defined in the Employment Agreement) he shall be
entitled to payment of accrued and unpaid base salary and reimbursement for
expenses incurred through the last day of his employment. In the event Mr. Bauer
is terminated without Cause or terminates his employment for Good Reason, Mr.
Bauer shall be entitled to (i) payment of accrued and unpaid base salary and
reimbursement for expenses incurred through the last day of his employment, (ii)
periodic payments in an amount equal to Mr. Bauer's then-current base salary for
a period of six months following the effective date of termination of
employment, and (iii) a lump sum amount equal to the sum of six months of the
Company's COBRA premiums in effect on the date of termination.
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During and after termination of the Employment Agreement, Mr. Bauer is obligated
to maintain the Company's confidential information in confidence. In addition,
he agrees to certain non-competition and non-solicitation covenants for a
six-month period following any termination of his employment.
The foregoing description of the Employment Agreement is only a summary and does
not purport to be a complete description of the terms and conditions under the
Employment Agreement, and such description is qualified in its entirety by
reference to the full text of the Employment Agreement, a copy of which is filed
as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by
reference herein.
Item 7.01 REGULATION FD DISCLOSURE
On April 8, 2020, the Company issued a press release discussing various cost
reduction initiatives undertaken by the Company in response to current market
conditions. A copy of the press release is being furnished as Exhibit 99.1
hereto and is incorporated into this Item 7.01 by reference.
The information furnished pursuant to this Item 7.01, and including Exhibit 99.1
furnished herewith, shall not be deemed "filed" for purposes of Section 18 of
the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor
shall it be deemed incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as shall be expressly set
forth by specific reference in any such filing. The contents of any URLs
referenced in the press release are not incorporated into this Current Report on
Form 8-K or any other filings with the Securities and Exchange Commission.
Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
Exhibit
Number Description
10.1 Employment Agreement, dated April 3, 2020, between the Company and
Eric Bauer
99.1 Press Release, dated April 8, 2020
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