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. Saltiels 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 Boards 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 Regulation
S-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. Saltiels
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 special
sign-on
award of
$2 million in the form of time-vesting RSUs that vest over 3 years. The 2018 long-term incentive award and
sign-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. Saltiels annual base salary will increase to $800,000. Mr. Saltiels 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. Saltiels time-vesting equity awards, including his
sign-on
RSUs, will vest upon a termination by the Company without Cause, and his special
sign-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.