UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 24, 2020
Commission File Number 001-33666
ARCHROCK, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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74-3204509 |
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(State or other jurisdiction of incorporation) |
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(I.R.S. Employer Identification No.) |
9807 Katy Freeway, Suite 100, Houston, TX 77024
(Address of principal executive offices, zip code)
(281) 836-8000
Registrant’s telephone number, including area code
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:
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Title of each class |
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Trading Symbol |
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Name of exchange on which registered |
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Common stock, $0.01 par value per share |
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AROC |
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New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company 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.
In light of current market conditions and in furtherance of actions taken by Archrock, Inc. (the “Company”) to reduce costs and improve cash flow, each of D. Bradley Childers, Doug S. Aron, Stephanie C. Hildebrandt, Jason G. Ingersoll and Eric R. Thode (each, an “Executive”) entered into a compensation letter (the “Compensation Letter”) with the Company dated April 24, 2020, which provides for a 10% reduction (or, in the case of Mr. Childers, a 25% reduction) in each Executive’s annual base salary. Under their respective Compensation Letter, effective as of June 7, 2020, the Executives have agreed to reductions to their respective annual base salaries to the following levels: Mr. Childers: $656,250; Mr. Aron: $414,000; Ms. Hildebrandt: $378,000; Mr. Ingersoll: $324,000; and Mr. Thode: $315,000.
Under each Executive’s Compensation Letter, the terms of which were approved by the Compensation Committee of the Board of Directors (the “Compensation Committee”) on April 24, 2020, if an Executive incurs a qualifying termination of employment under his or her severance benefit agreement with the Company (a “Severance Benefit Agreement”) or his or her 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 or her Severance Benefit Agreement or Change of Control Agreement (as applicable), the Company will apply the Executive’s pre-reduction base salary.
Further, each Executive has agreed to waive his or her right to resign his or her 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).
In addition, on April 24, 2020, the Compensation Committee recommended and the Board of Directors approved a 25% reduction in all retainers paid to directors, including the base, chairman of the board and committee chair retainers, effective beginning with the payment for the second quarter of 2020.
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.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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10.1 104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
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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By: |
/s/ Stephanie C. Hildebrandt |
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Stephanie C. Hildebrandt |
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Senior Vice President, General Counsel and
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April 30, 2020 |
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Exhibit 10.1
April 24, 2020
[Name]
[Address]
Re:Compensation Changes
Dear [Name]:
In light of current market conditions and actions taken by Archrock, Inc. (the “Company”) to reduce costs and improve cash flow, you and the Company have agreed to implement a [ ]% reduction in your base salary. In connection with this reduction, effective as of June 7, 2020, your annual base salary will be $[ ].
For purposes of calculating any other payments or benefits, including without limitation for purposes of calculating your severance payments and benefits if you incur a Qualifying Termination of Employment (as defined in your CoC Agreement or Severance Agreement (each defined below), as applicable), whether under the CoC Agreement or Severance Agreement (as applicable), or otherwise, but excluding 401(k) contributions and benefits (which must be tied to actual compensation levels), the Company will apply your pre-reduction base salary. 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. Similarly, 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, to the extent permitted by the Company’s insurers.
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 [ ].
Sincerely,
ARCHROCK, INC.
By: [Name] [Title]
Acknowledged and Agreed:
By:
Print Name: Date: