Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On August 28, 2018, the Board of Directors (the “Board”) of Nine Energy Service, Inc. (the “Company”), upon the recommendation of its Nominating, Governance and Compensation Committee, adopted and approved an amended and restated employment agreement with Ann G. Fox, the President and Chief Executive Officer of the Company (the “A&R Employment Agreement”). The A&R Employment Agreement amends and restates Ms. Fox’s prior employment agreement, dated July 6, 2015. The A&R Employment Agreement provides for a three-year initial term with automatic renewals foradditional one-year periods unless either party gives written notice ofnon-renewal at least 60 days prior to the expiration of the then-current initial term or renewal term.
The A&R Employment Agreement provides for an annualized base salary of $500,000 for the remainder of the 2018 calendar year with an automatic increase to not less than $523,532, effective January 1, 2019. The A&R Employment Agreement also provides for a discretionary annual bonus under the Company’s annual cash incentive bonus program based on the achievement of certain performance targets established by the Board with a target bonus opportunity equal to 100% of Ms. Fox’s base salary and a maximum bonus opportunity of 200% of Ms. Fox’s base salary. In addition, pursuant to the A&R Employment Agreement, Ms. Fox is eligible to receive annual equity compensation awards pursuant to the Company’s 2011 Stock Incentive Plan (the “Stock Incentive Plan”) on such terms and conditions as determined by the Board or a committee thereof.
The A&R Employment Agreement provides that if Ms. Fox’s employment is terminated (i) by the Company without “cause” (as defined in the A&R Employment Agreement), including upon the expiration of the then-existing initial term or renewal term, as applicable, as a result of the Company’snon-renewal of the term of the A&R Employment Agreement, or (ii) by Ms. Fox for “good reason” (as defined in the A&R Employment Agreement) (each, a “Qualifying Termination”), then, provided that Ms. Fox timely executes and does not revoke a release in a form acceptable to the Company and abides by the restrictive covenants included in the A&R Employment Agreement, Ms. Fox will be eligible to receive:
| | • | | a severance payment in an aggregate amount equal to Ms. Fox’s severance multiple of two multiplied by the sum of: (x) Ms. Fox’s then-current annualized base salary and (y) Ms. Fox’s then-current target annual bonus, payable in 12 substantially equal installments; |
| | • | | a prorated annual bonus for the year in which such Qualifying Termination occurs, subject to achievement of the applicable performance criteria; |
| | • | | if Ms. Fox elects COBRA continuation coverage, monthly reimbursement for the amount paid by Ms. Fox to continue such coverage for up to 18 months following the date of such Qualifying Termination; and |
| | • | | accelerated vesting of all outstanding time-based equity awards held by Ms. Fox on the date of such Qualifying Termination (equity awards subject to performance requirements will remain subject to the terms and conditions set forth in the applicable award agreement). |
In the event Ms. Fox experiences a Qualifying Termination withinthe 24-month period immediately following a “corporate change” (as defined in the Stock Incentive Plan), then Ms. Fox will be eligible to receive the payments and benefits described above, except that: (i) Ms. Fox’s severance multiple will be increased from two to three; and (ii) all outstanding equity awards held by Ms. Fox on the date of such Qualifying Termination will become immediately fully vested (determined based on target performance for awards then subject to performance requirements).
The A&R Employment Agreement contains certain restrictive covenants, includingnon-solicitation andnon-competition provisions, which are generally intended to apply during the term of Ms. Fox’s employment and for theone-year period following the termination of her employment.
The foregoing description of the A&R Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the A&R Employment Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
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