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): February 21, 2021
Commission File Number 001-33666
ARCHROCK, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 74-3204509 | |
| (State or other jurisdiction of incorporation) | (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:
| Title of each class | Trading Symbol | Name of exchange on which registered | ||
| Common stock, $0.01 par value per share | AROC | 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
2021 Short-Term Incentive Program
On February 21, 2021, the compensation committee of the board of directors (the “Committee”) of Archrock Inc. (the “Company” or “us”) adopted a short-term incentive program (the “2021 Incentive Program”) to provide the short-term cash incentive compensation element of our total direct compensation program for this year. The Committee set the cash incentive target under the 2021 Incentive Program for each of our named executive officers set forth below (the “Named Executive Officers”), as a specified percentage of his or her respective eligible earnings.
| Executive Officer | Title | 2021 Cash Incentive Target (% of eligible earnings) | ||
| D. Bradley Childers | President and Chief Executive Officer | 120 | ||
| Douglas S. Aron | Senior Vice President and Chief Financial Officer | 80 | ||
| Stephanie C. Hildebrandt | Senior Vice President, General Counsel and Secretary | 75 | ||
| Jason G. Ingersoll | Senior Vice President, Sales and Operations Support | 70 | ||
| Eric W. Thode | Senior Vice President, Operations | 70 |
Each Named Executive Officer’s potential cash incentive payout ranges from 0% to 200% of his or her respective target, as may be adjusted by the Committee in its discretion.
Actual payouts under the 2021 Incentive Program will be based on the Committee’s assessment of our performance for 2021 relative to the following performance indicators, as well as such other factors or criteria that the Committee in its discretion deems appropriate:
| · | Adjusted EBITDA – a non-GAAP measure, defined as net income (loss) excluding loss from discontinued operations, net of tax, income taxes, interest expense, depreciation and amortization, long-lived asset impairment, restatement and other charges, restructuring and other charges, corporate office relocation costs, debt extinguishment loss, merger-related costs, indemnification (income) expense, net, non-cash stock-based compensation expense and other items; |
| · | Safety – to be assessed by specific corporate and group metrics, including the total incident rate for recordable injuries; |
| · | Technology – a special multi-year initiative to improve operating efficiencies; and |
| · | Operating team performance – to be assessed by metrics established for and applicable to our operations, operations support and sales teams. |
The Committee intends to award performance-based short-term incentive compensation under the 2021 Incentive Program based on its assessment of: (i) for each Named Executive Officer, the factors listed above, provided, however, that operating team performance is applicable to Messrs. Ingersoll and Thode only, (ii) each Named Executive Officer’s individual contribution toward our company and/or operating unit performance, including his or her demonstrated leadership and implementation of our business strategy, (iii) the recommendations of our Chief Executive Officer (other than with respect to himself), and (iv) any other factors or criteria that the Committee may choose to consider, in its discretion. The Committee has reserved the right to modify the target levels of one or more of the performance indicators, in its discretion based on internal and external developments during the course of 2021.
2
Adjustments to Base Salaries for 2021
Pursuant to a compensation letter executed among each executive and the Company on April 24, 2020 and effective June 7, 2020, annual base salaries were temporarily reduced by 25% in the case of Mr. Childers, and 10% in the case of all other Named Executive Officers, due to the impact of the COVID-19 pandemic on market conditions. As a result of such reductions, the following base salaries are currently in effect: Mr. Childers: $656,250; Mr. Aron: $414,000; Ms. Hildebrandt: $378,000; Mr. Ingersoll: $324,000; and Mr. Thode: $315,000.
The Committee expects to restore base salaries to pre-reduction levels during 2021 and to increase Mr. Thode’s salary at such time from $350,000 to $360,000, pursuant to the Committee’s review and approval of base salaries on February 21, 2021. No other changes in base salaries were approved by the Committee.
3
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.
| ARCHROCK, INC. | ||
| By: | /s/ Stephanie C. Hildebrandt | |
| Stephanie C. Hildebrandt | ||
| Senior Vice President, General Counsel and Secretary | ||
| February 25, 2021 | ||
4