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)
JANUARY 18, 2006
BLACK WARRIOR WIRELINE CORP.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-18754 11-2904094
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
100 ROSECREST LANE, COLUMBUS, MISSISSIPPI 39701
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(Address of principal executive offices)
Registrant's telephone number, including area code: (662) 329-1047
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(Former name or former address, if changed since last report)
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 (see General Instruction A.2.below):
|_| Written communications pursuant to Rule 425 under the Securities Act
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act
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SECTION 1. REGISTRANT'S BUSINESS AND OPERATIONS.
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On January 18, 2006, we entered into an employment agreement with Mr.
Robert McNally, effective January 1, 2006, to serve as our Executive Vice
President and a Director for an initial term expiring December 31, 2008, subject
to automatic extensions thereafter for additional terms of one year unless
either party shall have given notice not less than 30 days prior to such
expiration that the term will not be extended. Under the agreement, Mr. McNally
receives a base salary of not less than $300,000 per year and was granted an
option to purchase 150,000 shares of our common stock at an exercise price of
$7.50 per share. If we achieve, during any calendar quarter during the period of
Mr. McNally's employment, commencing with the quarter ending March 31, 2006, a
ratio of EBITDA to sales of 20% or more, Mr. McNally will be paid a bonus for
the quarter equal to 0.5% of our EBITDA during the quarter with an initial
annual limitation on such payment of $200,000, subject to increase of the annual
limitation at the discretion of our chief executive officer and Board of
Directors. Mr. McNally received an execution bonus of $50,000 upon execution of
the agreement. In the event of a Change of Control, as defined, or in the event
either Mr. McNally or Mr. Jenkins should not be reelected to our Board of
Directors at any shareholders meeting or be required to resign pursuant to our
By-laws, Mr. McNally will have the option to terminate the agreement and Mr.
McNally will be paid a sum equal to three times the compensation paid to Mr.
McNally during the 12 months preceding the Change of Control. However, if a
Change of Control occurs on or before December 31, 2006, Mr. McNally is to be
paid $1.5 million, which amount is comprised of Mr. McNally's maximum salary and
bonus for the year 2006. A Change of Control is defined in the agreement as any
of the following occurring after January 1, 2006: any person or group of persons
acquiring 20% or more of our outstanding shares of voting capital stock, the
sale of more than 25% of our assets in a single or series of related
transactions, a merger of our company with any other person or firm, or during
any period of 12 consecutive calendar months, the individuals who were Directors
at the beginning of such period (including Directors whose election or
nomination for election was approved by at least two-thirds of the Directors
then in office who were Directors at the beginning of the period or whose
election was so approved) cease for any reason other than death or disability to
constitute a majority of the Directors then in office. A Change of Control shall
not be deemed to occur as a result of our previously proposed public offering of
our securities.
The employment agreement further provides that, while in our employ and
thereafter, Mr. McNally will not divulge or use any of our confidential
information and, during the term of his employment, will not engage in
activities in competition with us. We agreed to keep in full force and effect,
and Mr. McNally is entitled to participate in, all employee benefit plans in
effect on the date of the agreement or other arrangements with at least
equivalent benefits. Mr. McNally is also entitled to the same benefits package
as our other employees.
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SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT.
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS.
Upon execution of an Employment Agreement on January 18, 2006 with
Robert McNally, Mr. McNally became a Director and Executive Vice President of
our company. From 1994 through 2000, Mr. McNally held a variety of field
engineering, sales and marketing positions with Schlumberger Ltd. From July of
2000 through the end of 2005, Mr. McNally was an associate and then Vice
President of Simmons & Company International, a leading energy investment bank,
in its corporate finance department, primarily providing investment banking and
corporate finance advisory services to oilfield service companies. As an
employee of Simmons & Company International, Mr. McNally served as our primary
financial advisor from 2001 through 2005. Mr. McNally is 35 years old.
The information set forth in this Current Report in response to Item
1.01. Entry Into a Material Definitive Agreement is incorporated hereunder
regarding our Employment Agreement with Mr. McNally.
SECTION 8 - OTHER EVENTS
ITEM 8.01. OTHER EVENTS
On January 18, 2006, we issued a press release announcing that Mr.
Robert McNally has been employed by us as Executive Vice President and has been
elected a Director. The text of the press release is attached as an exhibit to
this current report.
SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
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10.1 Employment Agreement dated as of January 1, 2006, entered
into on January 18, 2006, between the Registrant and Robert
McNally.
99.1 Press Release dated January 18, 2006.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
BLACK WARRIOR WIRELINE CORP.
Dated: January 20, 2006 By: /s/ William L. Jenkins
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William L. Jenkins, President
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INDEX TO EXHIBITS
10.1 Employment Agreement dated as of January 1, 2006, entered
into on January 18, 2006, between the Registrant and Robert
McNally.
99.1 Press Release dated January 18, 2006.
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