UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington
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D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 3, 2016
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ARCHROCK, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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001-33666
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74-3204509
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(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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16666 Northchase Drive
Houston, Texas 77060
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(Address of Principal Executive Offices) (Zip Code)
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(281) 836-8000
Registrant’s telephone number, including area code
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Check the appropriate box below if the Form 8-K 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))
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In light of current market conditions and actions taken by Archrock, Inc. (the “Company”) to reduce costs, including reductions to the Company’s staffing levels, and improve cash flow, each of D. Bradley Childers, David S. Miller, Robert E. Rice and Donald C. Wayne (each, an “Executive”) entered into compensation letters (the “Compensation Letters”) with the Company on August 3, 2016, which provide for a 10% reduction in each Executive’s annual base salary. Under their respective Compensation Letters, effective as of August 7, 2016, the Executives have agreed to reductions to their annual base salaries to the following levels: Mr. Childers: $720,000; Mr. Miller: $297,000; Mr. Rice: $360,000; and Mr. Wayne: $337,500. In addition, pursuant to his Compensation Letter, Mr. Childers has waived his annual short-term incentive award in respect of the Company’s fiscal year 2016 under the Company’s 2016 short-term incentive program.
Under each Executive’s Compensation Letter, if an Executive incurs a qualifying termination of employment under his severance benefit agreement with the Company (a “Severance Benefit Agreement”) or his change of control agreement with the Company (a “Change of Control Agreement”), then, for purposes of calculating the applicable Executive’s severance payments and benefits under his Severance Benefit Agreement or Change of Control Agreement (as applicable), the Company will apply the Executive’s pre-reduction base salary and, for Mr. Childers, the target short-term incentive opportunity that would have otherwise applied to Mr. Childers with respect to fiscal year 2016.
Further, each Executive has agreed to waive his right to resign his employment with the Company for “good reason” (as defined in the applicable Severance Benefit Agreement or Change of Control Agreement) in connection with the compensation changes described in the applicable Executive’s Compensation Letter. In the event of any subsequent reduction in an Executive’s annual base salary, the cumulative impact of such subsequent reduction and the compensation changes described in the applicable Executive’s Compensation Letter may be taken into account for determining whether “good reason” exists under the Executive’s Severance Benefit Agreement or Change of Control Agreement (as applicable).
The foregoing summary is qualified in its entirety by reference to the Form of Compensation Letter, a copy of which is filed as Exhibit 10.1 hereto and is incorporated in this Item 5.02 by reference.
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Item 9.01.
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Financial Statements and Exhibits.
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(d) Exhibits
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Exhibit Number
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Description
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10.1
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Form of Compensation Letter
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SIGNATURE
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.
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ARCHROCK, INC.
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/s/ DAVID S. MILLER
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David S. Miller
Senior Vice President and Chief Financial Officer
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Date: August 4, 2016
EXHIBIT INDEX
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Exhibit Number
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Description
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10.1
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Form of Compensation Letter
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[Archrock Logo]
August 3, 2016
[Name]
[Address]
Re: Compensation Changes
Dear [Name]:
In light of current market conditions and actions taken by Archrock, Inc. (the “Company”) to reduce costs, including reductions to the Company’s staffing levels, and improve cash flow
, you and the Company have agreed to implement a 10% reduction in your base salary. In connection with this reduction, effective as of August 7, 2016, your annual base salary will be $[____].
[In addition, by signing this letter below, you acknowledge that you have waived payment of your annual short-term incentive payment in respect of the Company’s fiscal year 2016 under the Company’s 2016 short-term incentive program. You will again become eligible to receive an annual short-term incentive payment commencing with the Company’s fiscal year 2017.]
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If you incur a Qualifying Termination of Employment (as defined in your CoC Agreement or Severance Agreement (each defined below), as applicable), for purposes of calculating your severance payments and benefits under the CoC Agreement or Severance Agreement (as applicable), the Company will apply your pre-reduction base salary [and the target short-term incentive opportunity that would have otherwise applied to you with respect to the Company’s fiscal year 2016, absent this letter]
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. For purposes of this letter, (i) “
CoC Agreement
” means the change of control agreement between you and the Company and (ii) “
Severance Agreement
” means the severance benefit agreement between you and the Company. In addition, if you die or become disabled, then for purposes of calculating your life, accidental death and disability, short-term disability and long-term disability insurance benefits provided or made available by the Company or its affiliates, the Company will apply your pre-reduction base salary.
Notwithstanding the foregoing or anything to the contrary in the CoC Agreement or the Severance Agreement, by signing this letter, you hereby waive any right you may have to resign your employment with the Company for “Good Reason” for purposes of such agreements due to a material reduction in your base salary based on the changes to your compensation that are described in this letter. However, in the event of any subsequent reduction in your base salary, the cumulative impact of the subsequent reduction and the compensation changes described in this letter may be taken into account for purposes of determining whether “Good Reason” exists under the CoC Agreement or the Severance Agreement (as applicable).
Please acknowledge your acceptance of, and agreement to, the terms and conditions set forth in this letter by signing and dating this letter in the space provided below and returning it to the Company. Should you have any questions about this letter, please contact [_____] at [_____].
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For the CEO only.
Sincerely,
ARCHROCK, INC.
By:
[Name]
[Title]
Acknowledged and Agreed
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By:
Print Name:
Date: