Item 5.02
|
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
Dril-Quip, Inc. (the “Company” or “Dril-Quip”) announced today that its Board of Directors (the “Board”) has appointed Kyle F. McClure as its Vice President and Chief Financial Officer, effective as of January 1, 2022. Mr. McClure, 46, served as Chief Financial Officer of Airswitft, a global workforce solutions company, from June 2019 until December 2021. Prior to joining Airswift, Mr. McClure served as Senior Vice President and Chief Financial Officer of Frank’s International, a provider of engineered tubular services to the oil and gas industry, from March 2017 until June 2019, and before that as Treasurer of Frank’s International from March 2015 until March 2017. Prior to joining Frank’s International, Mr. McClure served in a variety of finance and accounting roles of increasing responsibility at Ascend Performance Materials, Cooper Industries plc and Dell Technologies.
McClure Employment Agreement
In connection with his appointment, the Company entered into an employment agreement with Mr. McClure on December 2, 2021 (the “McClure Employment Agreement”) effective as of January 1, 2022 (the “Effective Date”). The McClure Employment Agreement has an initial term commencing on the Effective Date and ending on December 31, 2024, but the term of this agreement will automatically extend for additional one-year periods unless either the Company or Mr. McClure notifies the other party at least 90 days in advance of the expiration of the then-current term that the agreement will not be extended. Mr. McClure will be an “at-will” employee of the Company, and his employment may be terminated at any time in accordance with the McClure Employment Agreement.
Pursuant to the McClure Employment Agreement, Mr. McClure will receive an annual base salary of $400,000 and will be eligible to receive an annual bonus to be determined each year in accordance with the Company’s normal bonus practices and under any annual bonus plan adopted by the Company after the Effective Date. Mr. McClure will also be entitled to 20 days paid time off subject to the Company’s policies, and he will be eligible to receive benefits consistent with other senior executives of the Company, including medical, life and disability insurance. Mr. McClure will also be entitled to participate in the Company’s incentive, savings and retirement plans.
Mr. McClure will also be entitled to a cash sign-on bonus of $200,000 (payable in January 2022). Mr. McClure must repay such bonus in the event he voluntarily terminates his employment without “good reason” (as defined in the McClure Employment Agreement) within 12 months of the Effective Date. Mr. McClure will also be granted an initial equity award with a grant date fair market value of $1,700,000 (the “Initial Equity Grant”) with (i) $1,000,000 of the Initial Equity Grant granted in the form of restricted stock that vests in one-third tranches on October 28th of each of 2022, 2023 and 2024, subject to Mr. McClure’s continuous employment with the Company on such vesting dates, and (ii) the remaining $700,000 of the Initial Equity Grant in the form of performance-based stock units that vest on October 28, 2024, subject to Mr. McClure’s continuous employment with the Company on such vesting date, in each case subject to the terms and conditions set forth in the 2017 Incentive Plan of the Company and the applicable award agreements in a form previously approved by the by the Compensation Committee of the Board.
If Mr. McClure’s employment is terminated by the Company without “cause” (as defined in the McClure Employment Agreement) or by Mr. McClure for good reason and prior to a “change of control period” (as defined in the McClure Employment Agreement), Mr. McClure will receive the following payments and benefits: (i) a lump sum cash payment equal to one times Mr. McClure’s annual base salary and (ii) continued medical, dental, vision and life insurance coverage until the earlier of Mr. McClure’s receipt of equivalent coverage and benefits under the plans of a subsequent employer or one year after the date of termination. Mr. McClure’s receipt of these payments and benefits is subject to his execution and non-revocation of a release of claims and his continued compliance with the confidentiality, non-competition and non-solicitation covenants set forth in the McClure Employment Agreement as well as any post-separation obligations included in any other agreement between the Company and Mr. McClure.
If Mr. McClure’s employment is terminated during a change of control period by the Company without cause or by Mr. McClure for good reason, Mr. McClure will receive the following payments and benefits: (i) a lump sum cash payment equal to two times Mr. McClure’s annual base salary, (ii) a lump sum cash payment equal to a pro rata portion of the greater of the annual bonus for the year of termination or the average annual bonus amount paid for the three most recent “performance periods” (as defined in the McClure Employment Agreement), (iii) a lump sum cash payment in an amount equal to two times the greater of the annual bonus for the year of termination or the average annual bonus amount paid for the three most recent performance periods, (iv) unless greater benefits are otherwise provided under the applicable award agreements, immediate vesting of any stock options, restricted stock