Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 19, 2018, Key Energy Services, Inc. (the “Company”) announced that the Board of Directors (the “Board”) appointed Robert Saltiel as President, Chief Executive Officer and director of the Company, each effective as of August 20, 2018. Robert Drummond resigned as a director of the Company concurrent with Mr. Saltiel’s appointment as director.
Biographical Background
Mr. Saltiel, age 55, most recently served as President, Chief Executive Officer and director of Atwood Oceanics, a publicly-traded offshore drilling contractor headquartered in Houston, Texas, from 2009 until Atwood Oceanics’ sale to Ensco plc in October of 2017. Prior to that, Mr. Saltiel served in various senior management roles, including Chief Operating Officer, at Transocean Ltd. Mr. Saltiel holds a BSE in Chemical Engineering from Princeton University and an MBA from Northwestern University.
Mr. Saltiel will not be deemed independent and is not currently expected to serve on any of the Board’s committees. Mr. Saltiel has no family relationships with any director, executive officer or person nominated or chosen by the Company to become a director or executive officer of the Company, and he is not a party to any transaction required to be disclosed pursuant to Item 404(a) of RegulationS-K.
Employment Agreement with Mr. Saltiel
On August 17, 2018, the Company entered into an employment agreement with Mr. Saltiel (the “Employment Agreement”) establishing his compensation as President and Chief Executive Officer. Under the Employment Agreement, Mr. Saltiel’s initial compensation will consist of an annual base salary of $750,000, an annual incentive award target of 100% of base salary (which for 2018 will be paid based on target performance and prorated for the portion of the year during which he is employed by the Company), an annual long-term incentive award of $1.25 million in the form of time-vesting restricted stock units (“RSUs”) that vest over 3 years and a specialsign-on award of $2 million in the form of time-vesting RSUs that vest over 3 years. The 2018 long-term incentive award andsign-on award were granted on August 20, 2018 on the form of time-vested restricted stock unit award agreement (the “RSU Award Agreement”) included in the Employment Agreement. Beginning in 2019, Mr. Saltiel’s annual base salary will increase to $800,000. Mr. Saltiel’s annual long-term incentive award target will be no less than $3.5 million for 2019 and no less than $3.75 million thereafter, and such annual long-term incentive awards will be in the form of RSUs (with at least 50% of the RSUs subject to time-based vesting and the remaining RSUs subject to performance-based vesting).
Mr. Saltiel will be entitled to cash severance equal to two times the sum of his base salary plus target annual incentive award upon a termination by the Company without “Cause” (as defined in the Employment Agreement), or enhanced cash severance equal to three times the sum of his base salary plus target annual incentive award upon a termination by the Company without “Cause” or a termination by Mr. Saltiel for “Good Reason” (as defined in the Employment Agreement), in each case within 2 years following a “Change in Control” (as defined in the Employment Agreement). Mr. Saltiel’s time-vesting equity awards, including hissign-on RSUs, will vest upon a termination by the Company without “Cause,” and his specialsign-on RSUs will vest upon a termination by Mr. Saltiel for “Good Reason” within 2 years following a “Change in Control.”
The foregoing description does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Employment Agreement and the RSU Award Agreement, copies of which are filed hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.
