Current Report Filing (8-k)
November 16 2016 - 5:02PM
Edgar (US Regulatory)
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): November 16, 2016 (November 11, 2016)
KEY ENERGY SERVICES, INC.
(Exact name of registrant as specified in its charter)
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Maryland
(State or other jurisdiction of
incorporation or organization)
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001-08038
(Commission
File
Number)
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04-2648081
(I.R.S. Employer
Identification No.)
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1301 McKinney Street, Suite 1800
Houston, Texas 77010
(Address of principal executive offices and Zip Code)
713-651-4300
(Registrants telephone number, including area code)
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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ITEM 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On November 11, 2016, the board of directors (the
Board
) of Key Energy Services, Inc. (the
Company
) approved the rejection of certain existing compensatory contracts with former officers of the Company pursuant to applicable sections of the United
States Bankruptcy Code (
Bankruptcy Code
). The contracts in question relate to three former executive officers of the Company, but due to certain Securities and Exchange Commission (the
SEC
)
disclosure requirements for executive officers, each of the former executive officers is still deemed to be a named executive officer of the Company at the time of this filing.
The Company and/or Key Energy Services, LLC (which shall be included within the reference to the Company for the purposes of this
filing) previously entered into an Amended and Restated Employment Agreement, as well as a Letter Agreement Regarding Continued Employment Terms with Mr. Richard J. Alario, the Companys former Chief Executive Officer (the
Alario Agreements
). The Alario Agreements were filed as Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on January 7, 2008, and Exhibit 10.1 to the Companys Current Report on Form
8-K filed with the SEC on August 24, 2015, respectively. Mr. Alarios employment with the Company terminated on March 5, 2016. The Company previously entered into a Restated Employment Agreement and a Transition Agreement and
General Release with Ms. Kim B. Clarke, the Companys former Senior Vice President, Administration and Chief People Officer (the
Clarke Agreements
). The Clarke Agreements were filed as Exhibit 10.4 to the
Companys Current Report on Form 8-K filed with the SEC on January 7, 2008 and Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q filed with the SEC on November 9, 2015, respectively. Ms. Clarkes employment
with the Company terminated on March 31, 2016. The Company previously entered into a Restated Employment Agreement and a Separation and Release Agreement with Kimberly R. Frye, the Companys former Associate General Counsel (the
Frye Agreements
). Ms. Fryes Restated Employment Agreement was filed as Exhibit 10.14 to the Companys Annual Report on Form 10-K filed with the SEC on February 27, 2009, and all relevant severance
benefits potentially payable to Ms. Frye were governed by this employment agreement. Ms. Fryes employment with the Company was terminated on October 28, 2015. The Alario Agreements, the Clarke Agreements and the Frye Agreements
will be referred to herein as the
Severance Agreements
.
The Company previously reported that the Company and
certain of its domestic subsidiaries filed voluntary petitions for reorganization under chapter 11 of the Bankruptcy Court in the United States Bankruptcy Court for the District of Delaware (the
Court
) on October 24,
2016. As debtors in bankruptcy, with the approval of the Court, the Company has the right to reject certain executory contracts, in which case the former employee would have an unsecured claim for damages. Under Section 502(b)(7) of the
Bankruptcy Code, the maximum allowable general unsecured claim of an employee for damages resulting from the debtors termination of an employees severance contract may generally be reduced to an amount that is equal to one year of
compensation, notwithstanding the severance benefits provided within the applicable severance contract. The Board approved the rejection of the existing terms of the Severance Agreements on November 11, 2016. Although the rejection will
potentially modify the severance provided pursuant to the Severance Agreements, the Company believes that the former executive officers would continue to be entitled to certain health and life insurance benefits that were set forth in the Severance
Agreements. The Boards rejection of the Severance Agreements remains subject to approval by the Court, and the former executive officers have been provided a notice period in which to object to the rejection. A hearing has been set for
December 6, 2016 in order for the Court to consider the Companys rejection of the Severance Agreements, therefore the Company cannot estimate the amount of severance that may become payable to the former executive officers with any
certainty at this time.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
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Key Energy Services, Inc.
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Date: November 16, 2016
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By: /s/ Katherine I. Hargis
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Katherine I. Hargis
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Vice President, Chief Legal Officer and Secretary
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