Item 5.02 Departures of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Darin G. HoldernessOn October 23, 2020, Darin G. Holderness was appointed as the Special Advisor to
the Chief Financial Officer and will no longer serve as the Chief Financial
Officer or an executive officer of ProPetro Holding Corp. (the "Company" or
"ProPetro"). Effective as of October 23, 2020, the Company and Mr. Holderness
entered into a separation agreement and release (the "Holderness Separation
Agreement") memorializing the terms of his revised role and related matters and
pursuant to which Mr. Holderness expects to resign as an employee on October 30,
2020, or such earlier date as either Mr. Holderness or the Company may elect
(such date, the "Separation Date"). Pursuant to the terms of the Holderness
Separation Agreement, during such time that Mr. Holderness serves as the Special
Advisor to the Chief Financial Officer, he shall continue to receive the base
salary in place on October 23, 2020 and shall remain eligible to receive such
other benefits for which he was eligible to receive prior to October 23, 2020,
including use of a Company-provided vehicle. Mr. Holderness will no longer be
eligible to receive an annual cash bonus under the Amended and Restated ProPetro
Holding Corp. Executive Incentive Bonus Plan (the "Bonus Plan"), including for
the 2020 fiscal year, and Mr. Holderness will not receive any awards under the
2020 Incentive Plan (as defined below) in his revised role.
Pursuant to the terms of the Holderness Separation Agreement, the Company will
pay for the reasonable attorneys' fees incurred by Mr. Holderness in connection
with the negotiation of the Holderness Separation Agreement. In addition, the
Holderness Separation Agreement provides that Mr. Holderness shall no longer be
a participant in the ProPetro Services, Inc. Amended and Restated Executive
Severance Plan (the "Executive Severance Plan"), but that Mr. Holderness shall
instead receive the following payments and benefits following the Separation
Date subject to his execution and non-revocation of a release of claims in favor
of the Company and his compliance with certain restrictive covenants, including
obligations regarding confidentiality, non-competition, non-solicitation and
non-disparagement:
· Accelerated vesting of the number of restricted stock units ("RSUs") granted
on October 7, 2019 that remain outstanding as of the Separation Date (9,702)
and all 41,797 RSUs granted on February 11, 2020, in each case, under the
Company's 2017 Incentive Award Plan (the "2017 Incentive Plan"), which will be
settled upon the earlier to occur of (i) the six month anniversary of the
Separation Date and (ii) Mr. Holderness' death; and
· Satisfaction of the service requirement for all 14,552 performance restricted
stock units ("PSUs") originally granted on October 7, 2019 and 62,695 PSUs
originally granted on February 11, 2020, in each case, under the 2017
Incentive Plan, such that such PSUs will remain outstanding and eligible to
vest based on the Company's actual performance over the relevant performance
period and such vested PSUs, if any, will be settled at the time originally
specified in the applicable award agreement.
The foregoing description of the Holderness Separation Agreement is not complete
and is qualified in its entirety to the full text of the Holderness Separation
Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated herein by reference.
David S. Schorlemer
On October 23, 2020, David S. Schorlemer, currently employed as an advisor to
the Company, was appointed as Chief Financial Officer of the Company. In
connection with that appointment, Mr. Schorlemer will assume the role of the
Company's principal financial officer.
Mr. Schorlemer, age 53, has two decades of experience in senior level positions
in public and private companies. He most recently served as Executive Vice
President, Chief Financial Officer, Treasurer and Secretary of Basic Energy
Services, Inc., a Fort Worth, Texas based oilfield services company, from
September 2018 until joining the Company. Prior to that, he served as the Chief
Financial Officer of Gulf Island Fabrication, Inc. from January 2017 to August
2018. His work history also includes serving as Chief Financial Officer for
three oilfield services companies: GR Energy Services Management, LP from
January 2016 to December 2016, Stallion Oilfield Holdings, Inc., September 2004
to December 2015 and Q Services, Inc. from July 1997 until its merger with Key
Energy Services, Inc. in July 2002. He also held the role of vice president,
marketing and strategic planning for Key Energy Services, Inc. from July 2002 to
September 2004. Mr. Schorlemer earned his Bachelor of Business Administration
degree in finance from The University of Texas, and his Master of Business
Administration from Texas A&M University. Mr. Schorlemer serves as a director of
Performance Multi-Flow Solutions, LLC and as an advisor to Luminous Biosciences.
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There are no arrangements or understandings between Mr. Schorlemer and any other
persons pursuant to which he was selected to serve as the Company's Chief
Financial Officer. There are no family relationships between Mr. Schorlemer and
any director or executive officer of the Company, and Mr. Schorlemer has no
direct or indirect material interest in any transaction required to be disclosed
pursuant to Item 404(a) of Regulation S-K.
Mr. Schorlemer will receive an annualized base salary of $450,000. In addition,
Mr. Schorlemer is eligible (i) to receive an executive relocation benefit equal
to approximately $150,000 and a relocation bonus equal to $125,000, in each
case, in connection with and payable upon his relocation to Midland, Texas, (ii)
to receive an annual cash bonus with a target value for 2020 equal to 80% of his
base salary under the Bonus Plan (prorated for 2020 based on the portion of 2020
that he is employed by the Company), (iii) to participate in the Second Amended
Executive Severance Plan (as defined below) as a "Tier 2 Executive" (as defined
in the Second Amended Executive Severance Plan and as described below), (iv) to
participate in those benefit plans and programs of the Company available to
similarly situated executives, (v) to receive a retention bonus equal to
$75,000, payable on the first anniversary of his employment with the Company and
(vi) to receive an equity award with a grant date fair value of approximately
$900,000 in 2021 under the 2020 Incentive Plan. On October 13, 2020, Mr.
Schorlemer also received an equity award with a grant date value of
approximately $300,000 comprised of 40% RSUs and 60% PSUs, under the 2017
Incentive Plan in connection with the start of his employment with the Company.
The RSUs granted in 2020 will vest ratably on the first three anniversaries of
the date of grant, and the PSUs granted in 2020 may be earned at a level ranging
from 0% to 200% of the target number of PSUs granted based on the Company's
cumulative total shareholder return related to a selected peer group during the
. . .
Item 5.07 Submission of Matters to a Vote of Security Holders.
At the Annual Meeting, the Company's stockholders elected each of the Company's
seven director nominees to serve until the Company's 2021 Annual Meeting of
Stockholders. Further, the Company's stockholders approved the 2020 Incentive
Plan. The Company's stockholders approved the compensation paid to the Company's
named executive officers, as disclosed in the Company's 2020 proxy statement.
The Company's stockholders also approved the ratification of the appointment of
Deloitte & Touche LLP as the Company's independent registered public accounting
firm for fiscal year 2020.
The final results of the voting on each matter of business at the Annual Meeting
are as follows:
Proposal 1 - Election of Directors.
NOMINEES FOR WITHHOLD BROKER NON-VOTES
Phillip A. Gobe 76,644,088 7,037,253 7,685,201
Spencer D. Armour III 68,357,754 15,323,587 7,685,201
Mark S. Berg 74,640,814 9,040,527 7,685,201
Anthony Best 78,872,565 4,808,776 7,685,201
Michele V. Choka 79,097,365 4,583,976 7,685,201
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NOMINEES FOR WITHHOLD BROKER NON-VOTES
Alan E. Douglas 78,226,608 5,454,733 7,685,201
Jack B. Moore 74,210,546 9,470,795 7,685,201
Proposal 2 - Approve, on a non-binding, advisory basis, ProPetro's named
executive officer compensation.
FOR AGAINST ABSTAIN BROKER NON-VOTES
82,210,787 1,450,966 19,589 7,685,200
Proposal 3 - Approve the ProPetro Holding Corp. 2020 Long Term Incentive Plan.
FOR AGAINST ABSTAIN BROKER NON-VOTES
80,899,364 2,729,615 52,361 7,685,202
Proposal 4 - Ratification of the appointment of Deloitte & Touche LLP as
ProPetro's independent registered public accounting firm for the fiscal year
ending December 31, 2019.
FOR AGAINST ABSTAIN
90,914,387 428,834 23,321
Item 7.01 Regulation FD Disclosure.
On October 26, 2020, the Company issued a press release announcing the
management changes discussed herein. A copy of the press release is furnished as
Exhibit 99.1 hereto.
The information furnished with this report, including Exhibit 99.1, 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, nor shall it be deemed to be incorporated by
reference into any other filing under the Securities Act of 1933, as amended, or
the Exchange Act, except as expressly set forth by specific reference in such a
filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description of Exhibit
10.1 Separation Agreement and Release, dated October 23, 2020, by and
between Darin G. Holderness and ProPetro Holding Corp.
10.2 Form of Indemnification Agreement for Officers and Directors of
ProPetro Holding Corp. (incorporated by reference to Exhibit 10.33 to
ProPetro Holding Corp.'s Annual Report on Form 10-K for the year ended
December 31, 2018).
10.3 ProPetro Holding Corp. 2020 Long Term Incentive Plan.
ProPetro Services, Inc. Second Amended and Restated Executive
10.4 Severance Plan.
10.5 Form of Participation Agreement pursuant to the ProPetro Services,
Inc. Second Amended and Restated Executive Severance Plan.
99.1 Press release dated October 26, 2020.
104 Cover Page Interactive Data File. The cover page XBRL tags are embedded
within the inline XBRL document (contained in Exhibit 101)
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