Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.
(b) Departure of Chief Executive Officer and President
OnJanuary 19, 2023 ,Flotek Industries, Inc. (the "Company") announced the departure ofJohn W. Gibson , Jr. from his role as Chief Executive Officer and President of the Company, effectiveJanuary 19, 2023 (the "Effective Date").Mr. Gibson will also be stepping down from his role as Chairman of the Board of Directors (the "Board") of the Company. For purposes of Section 5(c) of his existing employment agreement with Company, dated effective as ofDecember 22, 2019 (filed as Exhibit 10.1 to the Company's Form 8-K filed onDecember 27, 2019 , the "Gibson Employment Agreement"),Mr. Gibson's departure will be treated as a termination without cause. In connection with his separation, the Company andMr. Gibson have entered into a Separation Agreement and General Release (the "Separation Agreement"), attached hereto as Exhibit 10.1 and incorporated herein by reference, pursuant to whichMr. Gibson will receive$1,500,000 as consideration to settle any disputes between the parties, including any and all claims and controversies arising out ofMr. Gibson's employment relationship with the Company, any disputes regarding alleged oral promises made toMr. Gibson , any disputes regarding his post-termination benefits, and any disputes related to his equity grants. Under the Separation Agreement, the$1,500,000 settlement payment will be made in four installments, with the first installment of$600,000 payable upon the 8th calendar day followingMr. Gibson's signing of the Separation Agreement, provided he does not revoke the Separation Agreement's ADEA release (which is revocable within seven days of signing the Separation Agreement). The remainder of the settlement payment is payable in three equal installments on the successive monthly anniversary dates of the first installment. As part of the settlement,Mr. Gibson has agreed to forfeit all of his outstanding options and unvested restricted stock units. In addition,Mr. Gibson has agreed to a six-month lock up period with respect to 250,000 shares of common stock owned byMr. Gibson , which will prohibitMr. Gibson from selling those shares during the lock up period. Consistent with the Gibson Employment Agreement, the Company will reimburseMr. Gibson for his COBRA premiums paid and provide access to the Company'sGroup Health Plan throughDecember 31, 2024 . As part of the settlement, under the Separation AgreementMr. Gibson will remain subject to customary restrictive covenants for 12 months following the separation (including non-competition and non-solicitation covenants).Mr. Gibson will also agree to maintain the confidentiality of proprietary company information, intellectual property and trade secrets. Additionally, the Separation Agreement includes a full release of claims byMr. Gibson in favor of the Company and customary non-disparagement protection.Mr. Gibson's departure as Chairman of the Board, Chief Executive Officer and President of the Company was not due to any disagreement with the Company or any matter relating to the Company's operations, policies or practices.
(c) Appointment of Interim Chief Executive Officer
The Board has an active search process underway to select a permanent Chief
Executive Officer of the Company. During the transition period,
Mr. Agadi , age 60, served as Chief Executive Officer and Board Member of Crawford and Co, a publicly traded insurance claims company. Prior to that, he served as Chief Executive Officer of Friendly'sIce Cream Corporation andChurch's Chicken, Inc. , among other private and public companies. He also served as Chairman of theBoard for several of these companies. Currently,Mr. Agadi is the Chairman ofGHS Holdings, LLC and serves on the board ofDiversified Foodservice Supply, Inc. He is also Chairman of theSKSVMA College of Engineering andAgadi Sunrise Hospital Private Limited inIndia . Pursuant to an employment agreement betweenMr. Agadi and the Company (the "Agadi Interim Employment Agreement"), attached hereto as Exhibit 10.2 and incorporated herein by reference, theCompensation Committee of the Company and the Board have approved compensation forMr. Agadi for his service as interim Chief Executive Officer.Mr. Agadi will be entitled to a salary of$50,000 per month in this interim role. Pursuant to the Agadi Interim Employment Agreement and an associated Stand-Alone Restricted Stock Unit Award Agreement (attached hereto as Exhibit 10.3 and incorporated herein by reference),Mr. Agadi will also receive a one-time grant of restricted stock units valued at$150,000 . -------------------------------------------------------------------------------- There are no family relationships betweenMr. Agadi and any Company director or executive officer, and no arrangements or understandings betweenMr. Agadi and any other person pursuant to which he was selected as an officer.Mr. Agadi is not a party to any current or proposed transaction with the Company for which disclosure is required under Item 404(a) of Regulation S-K.
In addition to
Prior to his appointment as President,Dr. Ezell , age 44, has held various roles with Company, including as Chief Operating Officer sinceMarch 2022 , President, Chemistry Technologies sinceAugust 2020 , Senior Vice President, Operations fromMarch 2020 toAugust 2020 , and Vice President, Operations fromAugust 2019 toMarch 2020 . Prior to joining the Company,Dr. Ezell served as Vice President, Baroid Drilling Fluids for Halliburton fromMay 2006 toJuly 2019 .Mr. Ezell holds a Ph.D in Polymer Science from theUniversity of Southern Mississippi and a B.S. in Chemistry fromMillsaps College .Dr. Ezell's promotion will not result in any increase to annual base salary or any additional equity awards. No changes were made toDr. Ezell's existing employment agreement, which was filed as Exhibit 10.1 to the Company's Form 8-K filed onJanuary 6, 2021 . A description ofDr. Ezell's employment agreement is also included in the Company's Definitive Proxy Statement for the 2022 Annual Meeting of Shareholders, filed with theSecurities and Exchange Commission onApril 29, 2022 . There are no family relationships betweenDr. Ezell and any Company director or executive officer, and no arrangements or understandings betweenDr. Ezell and any other person pursuant to which he was selected as an officer.Mr. Agadi is not a party to any current or proposed transaction with the Company for which disclosure is required under Item 404(a) of Regulation S-K.
Item 7.01 Regulation FD Disclosure
OnJanuary 19, 2023 , the Company issued a press release announcing the departure ofMr. Gibson , the appointment ofMr. Agadi as interim Chief Executive Officer, the appointment ofMr. Nierenberg as the Non-Executive Chairman of the Board, and the promotion ofRyan Ezell as President of the Company. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. As a result ofMr. Agadi's appointment as interim Chief Executive Officer andMr. Nierenberg's appointment as Non-Executive Chairman, the Board has also made various committee reassignments. Effective as ofJanuary 20, 2023 , the membership of the Audit, Compensation and Governance & Nominating Committees of the Board shall be composed as follows:
•Audit Committee:
•Compensation Committee:
•Governance & Nominating Committee:
The information furnished pursuant to Item 7.01 of this Current Report on 8-K and in Exhibit 99.1 shall not be deemed to be "filed" for the purposes of Section 18 of the Exchange Act, is not subject to the liabilities of that section and is not deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
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Exhibit Number Description 10.1 Separation Agreement and General
Release, dated
between the Company and John Gibson 10.2 Employment Agreement , dated January 19, 2023, between the Company and Harsha Agadi 10.3 Stand-Alone Restricted Stock Unit Award Agreement 99.1 Press Release of Flotek Industries, Inc.
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