SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 27, 2021
Basic Energy Services, Inc.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction
|801 Cherry Street, Suite 2100|
|Forth Worth, TX||76102|
|(Address of principal executive offices)||(Zip Code)|
(Registrant’s telephone number, including area code)
(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:
|¨||Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)|
|¨||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)|
|¨||Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))|
|¨||Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))|
Securities registered pursuant to Section 12(b) of the Act:
|Title of each class||Trading Symbol(s)||Name of each exchange on which registered|
|Common stock, $0.01 par value per share*||BASX*||The OTCQX Best Market*|
* Until December 2, 2019, Basic Energy Services, Inc.’s common stock traded on the New York Stock Exchange under the symbol “BAS”. On December 3, 2019, Basic Energy Service, Inc.’s common stock began trading on the OTCQX® Best Market tier of the OTC Markets Group Inc. Deregistration under Section 12(b) of the Act became effective on March 16, 2020.
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April 27, 2021, the Company entered into an amendment to the Company’s employment agreement with Adam Hurley (the “Amendment”), the Company’s Executive Vice President, Chief Financial Officer, Treasurer and Secretary. Pursuant to the Amendment, the parties have confirmed the amount of severance payable to Mr. Hurley in certain circumstances in connection with his position as Executive Vice President and Chief Financial Officer, which has previously been disclosed in the Form 10-K/A filed with the Securities and Exchange Commission on April 30, 2021.
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On May 3, 2021, Basic Energy Services, Inc. (the “Company”) issued a press release announcing the completion of a sale-leaseback transaction related to certain real property in Los Angeles, California. The purchase price for the property consisted of $10.5 million, subject to a holdback of approximately $2.6 million for certain improvements to be constructed at the property. The Company is entitled to reimbursement of any remaining balance of said holdback funds to the extent not fully expended for the intended purpose. The Company has entered into a simultaneous lease of the property for an initial term of three years. 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 Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing of the Company’s under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Item 9.01 Financial Statements and Exhibits.
|10.1||Amendment to Employment Agreement made and entered into by and between Basic Energy Services, Inc. and Adam Hurley, effective as of April 27, 2021.|
|99.1||Press Release dated May 3, 2021.|
|104||Cover Page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101).|
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.|
|By:||/s/ Keith L. Schilling|
|Date: May 3, 2021||Keith L. Schilling|
|(President, Chief Executive Officer and Director)|
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the "Amendment") is made and entered into by and between Basic Energy Services, Inc., a Delaware corporation (hereafter "Company"), and Adam Hurley (hereafter "Executive"), effective as of April 27, 2021 (the "Effective Date").
WHEREAS, the Company and the Executive previously entered into that certain Employment Agreement effective as of July 19, 2018, amended as of January 1, 2019 and offer letter dated September 28, 2020 pursuant to which Executive became the Company’s Executive Vice President and Chief Financial Officer (the "Employment Agreement");
WHEREAS, Section 30 of the Employment Agreement allows the parties to amend the Employment Agreement by written instrument executed by both parties; and
WHEREAS, the Company and the Executive desire to amend the Employment Agreement to clarify the amount of severance payable to Executive in connection with his position as Executive Vice President and Chief Financial Officer with the Company;
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto agree as follows:
1. Section 6(b)(1) of the Employment Agreement is hereby amended and restated in its entirety to read as follows:
The Company shall pay to Executive as additional compensation (the "Additional Payment"), an amount which is equal to "Total Cash" (defined below). "Total Cash" means one and a half (1.5) times the sum of (A) Executive's annual Base Salary (as in effect immediately prior to his Termination Date) plus (B) Executive's current annual incentive target Bonus (Section 2(b)) for the full year in which the termination of employment occurred; provided, in the event of a Change in Control and a termination of Executive by the Company without Cause, by Executive for Good Reason or for Retirement within the six (6) months preceding or the 12 months following a Change in Control, "Total Cash" shall be calculated as two (2) times the sum of (A) Executive's annual Base Salary (as in effect immediately prior to his Termination Date) plus (B) the higher of (x) Executive's current annual incentive target Bonus (Section 2(b)) for the full year in which the termination of employment occurred or (y) the highest annual incentive Bonus received by Executive with respect to any of the last three completed fiscal years. The Company shall make the Additional Payment to Executive in a cash lump sum not later than 60 calendar days following the Termination Date and, if applicable with respect to a Change in Control that occurs within six (6) months after a Termination Date, the Company shall make a payment equal to the positive difference, if any, of the Additional Payment due under this Section 6(b) applicable to the Change in Control less the Additional Payment previously made pursuant to this Section 6(b) prior to the Change in Control to Executive in a cash lump sum not later than 60 calendar days following the Change in Control. If the 60-day payment period begins in one calendar year and ends in the subsequent calendar year, the Additional Payment shall be paid in the subsequent calendar year.
2. Except as otherwise specifically set forth herein, all other terms and conditions of the Employment Agreement shall remain in full force and effect.
[Remainder of page intentionally blank]
IN WITNESS WHEREOF, the Executive has executed the Amendment and the Company has caused this Amendment to be executed in its name and on its behalf by its duly authorized officer, to be effective as of the Effective Date.
|Signature:||/s/ Adam L. Hurley|
|Name:||Adam L. Hurley|
|By:||/s/ Keith Schilling|
|Its:||Chief Executive Officer|
Basic Energy Services Announces Completion of Sale-Leaseback Transaction
FORT WORTH, Texas — May 3, 2021 — Basic Energy Services, Inc. (OTCQX: BASX) (“Basic” or the “Company”) today announced that it has completed a sale-leaseback transaction related to certain real property in Los Angeles County, California. The purchase price for the property consisted of $10.5 million, subject to a holdback of approximately $2.6 million for certain improvements to be constructed at the property. The Company is entitled to reimbursement of any remaining balance of said holdback funds to the extent not fully expended for the intended purpose. The Company has entered into a simultaneous lease of the property for an initial term of three years.
About Basic Energy Services
Basic Energy Services provides wellsite services essential to maintaining production from the oil and gas wells within its operating areas. The Company’s operations are managed regionally and are concentrated in major United States onshore oil-producing regions located in Texas, California, New Mexico, Oklahoma, Arkansas, Louisiana, Wyoming, North Dakota, Colorado and Montana. Our operations are focused in prolific basins that have historically exhibited strong drilling and production economics in recent years as well as natural gas-focused shale plays characterized by prolific reserves. Specifically, the Company has a significant presence in the Permian Basin, Bakken, Los Angeles and San Joaquin Basins, Eagle Ford, Haynesville and Powder River Basin. We provide our services to a diverse group of over 2,000 oil and gas companies. Additional information on Basic Energy Services is available on the Company’s website at www.basices.com.
Safe Harbor Statement
This release includes “forward-looking statements” within the meaning of the federal and securities laws. Forward-looking statements are not statements of historical fact and reflect Basic’s current views about future events. The words “believe,” “estimate,” “expect,” “anticipate,” “project,” “intend,” “seek,” “could,” “should,” “may,” “potential” and similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. Although Basic believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions and estimates, certain risks and uncertainties could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release. These risks and uncertainties include without limitation, risks associated with a future closing of the transaction and settlement of the holdback described therein and the satisfaction of the conditions thereto. Additional important risk factors that could cause actual results to differ materially from expectations are disclosed in Item 1A of the Company’s most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. While Basic makes these statements and projections in good faith, neither Basic nor its management can guarantee that the transactions will be consummated or that anticipated future results will be achieved. Any forward-looking statement speaks only as of the date on which such statement is made and Basic assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by Basic, whether as a result of new information, future events, or otherwise, except as required by applicable law.
Director of Financial Planning & Analysis
Basic Energy Services, Inc.