Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 2, 2020, Nabors Industries Ltd. ("Nabors") and its indirect
wholly-owned subsidiary, Nabors Industries, Inc. ("NII") entered into a seventh
amendment to the executive employment agreement with Anthony G. Petrello, the
Chairman, Chief Executive Officer and President of each of Nabors and NII (the
"Petrello Amendment'). The Petrello Amendment keeps in place the reduction of
annual rate of base salary payable under Mr. Petrello's employment agreement
from $1.75 million per year to $1.575 million per year through 2020.
On January 2, 2020, Nabors and NII entered into an amended and restated
executive employment agreement with William Restrepo, Chief Financial Officer of
each of Nabors and NII (the "Amended and Restated Restrepo Agreement"). The
Amended and Restated Restrepo Agreement provides for terms consistent with Mr.
Restrepo's previous executive employment agreement effective March 3, 2014, as
amended (the "Original Agreement"), other than the following: (i) a term of
employment from January 2, 2020 until June 1, 2022; (ii) automatic twelve
(12)-month renewal of the agreement following the applicable expiration date or
extension date, as applicable, unless written notice is given (a) by either
Nabors, NII or Mr. Restrepo at least ninety (90) days prior to such date or (b)
by Mr. Restrepo at least two hundred (200) days prior to his voluntary
retirement, if such retirement occurs after June 1, 2022 (a "Qualifying
Retirement"); (iii) the Performance Peer Group applicable to each TSR Award (as
such terms are defined in the Amended and Restated Restrepo Agreement) shall
consist of those entities determined from time to time by the Compensation
Committee of the Board of Director of Nabors (the "Committee"), in consultation
with the Chief Executive Officer; and (iv) upon Mr. Restrepo's Qualifying
Retirement, Mr. Restrepo will be eligible to receive the same severance payments
and benefits previously available to him only in the case of his termination of
employment following the expiration date of his Original Agreement as a result
of his death, Disability, Constructive Termination Without Cause or by the
Company without Cause (as such terms are defined in the Amended and Restated
Restrepo Agreement), except that in the event of Mr. Restrepo's Qualifying
Retirement, all unvested TSR Shares outstanding as of the Agreement Expiration
Notice shall become vested as if the performance goals with respect to relative
Total Shareholder Return (as such terms are defined in the Amended and Restated
Restrepo Agreement) set forth in the applicable award agreements were achieved
at maximum, rather than target, levels.
On January 2, 2020, the Committee and Mr. Petrello agreed that the grant of TSR
Shares (as defined in Mr. Petrello's employment agreement), which under the
terms of his employment agreement are to be valued at $5.25 million, shall, for
calendar year 2020, be reduced by $3.5 million resulting in an award of
one-third of the number of shares that Mr. Petrello is otherwise entitled to
receive (the "2020 TSR Shares").
On January 2, 2020, the Committee approved and adopted a new form of restricted
stock agreement to be used in the award of the 2020 TSR Shares to Mr. Petrello.
On January 2, 2020, the Committee approved and adopted new forms of
performance-based restricted stock unit agreements to be used in the award of
2020 performance share units to Mr. Petrello and Mr. Restrepo, which performance
share units were granted to Mr. Petrello and Mr. Restrepo in satisfaction of the
performance shares to which each of Mr. Petrello and Mr. Restrepo is entitled
under his employment agreement in respect of performance metrics established by
the Committee for fiscal year 2020. This change reinforces the performance-based
nature of all of Mr. Petrello's restricted share awards, and will more clearly
demonstrate that a super majority of his compensation is performance based.
The descriptions above of the Petrello Amendment, the Amended and Restated
Restrepo Agreement, the new forms of restricted stock agreement (the "Petrello
Restricted Stock Agreements") and the new forms of performance-based stock unit
agreements (the "PSU Agreements") are qualified in their entirety by reference
to the Petrello Amendment, the Amended and Restated Restrepo Agreement, the
Petrello Restricted Stock Agreements, and the PSU Agreements, which are included
as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6 to this Form 8-K and are
incorporated in this Item 5.02 by reference.
Item 7.01 Regulation FD Disclosure.
On January 7, 2020, Nabors issued a press release announcing the pricing by
Nabors of the offering of $600 million aggregate principal amount of its 7.25%
Senior Guaranteed Notes due 2026 (the "2026 Notes") and $400 million aggregate
principal amount of its 7.50% Senior Guaranteed Notes due 2028 (the "2028 Notes"
and, together with the 2026 Notes, the "Notes"). A copy of the press release is
included in this Form 8-K as Exhibit 99.1 and is incorporated herein by
reference.
Item 8.01 Other Events.
On January 7, 2020, Nabors and its indirect wholly-owned subsidiaries, NII,
Nabors Drilling Holdings Inc., Nabors International Finance Inc., Nabors Lux
Finance 1, Nabors Global Holdings Ltd. and Nabors Holdings Ltd. (collectively,
the "Note Guarantors"), entered into a purchase agreement (the "Purchase
Agreement") under which Nabors agreed to sell the Notes to the initial
purchasers named in the Purchase Agreement (the "Initial Purchasers"). The 2026
Notes will bear interest at an annual rate of 7.25% and the 2028 Notes will bear
interest at an annual rate of 7.50%, in each case, payable semi-annually in
arrears on January 15 and July 15 of each year, beginning on July 15, 2020. The
Notes are fully and unconditionally guaranteed by the Note Guarantors. The
closing of the sale of the Notes is expected to occur on or about January 10,
2020, subject to customary closing conditions.
Nabors will sell the Notes to the Initial Purchasers in reliance on the
exemption from registration provided by Section 4(a)(2) of the Securities Act of
1933, as amended (the "Securities Act"). The Initial Purchasers intend to resell
the Notes to (i) qualified institutional buyers pursuant to the exemption from
registration provided by Rule 144A under the Securities Act or (ii) pursuant to
Regulation S under the Securities Act. Nabors will rely on these exemptions from
registration based in part on representations made by the Initial Purchasers in
the Purchase Agreement. This disclosure shall not constitute an offer to sell or
the solicitation of an offer to buy any security and shall not constitute an
offer, solicitation or sale in any jurisdiction in which such offering,
solicitation or sale would be unlawful.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
10.1 Seventh Amendment to Executive Employment Agreement, dated January 2,
2020, among Nabors Industries Ltd., Nabors Industries, Inc. and Anthony
G. Petrello.
10.2 Amended and Restated Executive Employment Agreement, dated January 2,
2020, among Nabors Industries Ltd., Nabors Industries, Inc. and William
Restrepo.
10.3 Form of Nabors Industries Ltd. TSR Stock Grant Agreement - Anthony G.
Petrello (2020).
10.4 Form of Nabors Corporate Services, Inc. TSR Stock Grant Agreement -
Anthony G. Petrello (2020).
10.5 Form of CEO Performance Based Stock Restricted Unit Agreement
(2020).
10.6 Form of CFO Performance Based Stock Restricted Unit Agreement
(2020).
99.1 Press Release regarding notes pricing dated January 7, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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