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): April 3, 2013
Dresser-Rand Group Inc.
(Exact name of registrant as specified in its Charter)
Delaware | 001-32586 | 20-1780492 | ||
(State or other jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
West 8 Tower, Suite 1000, 10205 Westheimer Road, Houston, Texas 112 Avenue Kleber, Paris, France |
77042 75784 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code:
(713) 354-6100 (Houston)
33 156 26 71 71 (Paris)
Not Applicable
Former name or former address, if changed since last report
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 (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
On April 3, 2013, Dresser-Rand Group Inc. (Dresser-Rand) issued a press release announcing that Jan Kees van Gaalen will become Dresser-Rands Executive Vice President and Chief Financial Officer, effective May 1, 2013, following a transition period beginning on April 14, 2013. Mr. van Gaalen will succeed Mark E. Baldwin, whose impending retirement was previously announced. The press release is filed herewith as Exhibit 99.1 and is incorporated herein by reference.
Mr. van Gaalen, age 56, joins Dresser-Rand from Baker Hughes Inc., a public company and leading provider of drilling, formation evaluation, completion and production products and services to the oil and gas industry, where he has served as Vice President and Treasurer since January 2008. Before joining Baker Hughes, he was the Chief Financial Officer and Vice President Finance for PT Inco Tbk, the publicly traded Indonesian subsidiary of Vale Inco Ltd., based in Jakarta, Indonesia from 2004 to 2008. Prior to this he held a variety of finance positions with Anglo American plc, Carlton Communications plc and Schlumberger Ltd. in France, the United Kingdom, Venezuela, Brazil and South Africa.
Pursuant to the terms of his offer letter, Mr. van Gaalen will receive an annual base salary of $402,000 and will participate in the Dresser-Rand Annual Incentive Program (AIP), with a target incentive level of 60% of his annual base salary. Mr. van Gaalen will also be eligible to participate in the Dresser-Rand long term incentive program and will receive an initial grant of stock options and restricted stock units valued at approximately $700,000 on the first fixed grant date following his start date with Dresser-Rand, which initial grant includes a one-time special grant valued at approximately $300,000 in recognition of his forfeiture of certain equity rights with respect to his current employer. He is also entitled to participate in Dresser-Rands employee benefit programs. The offer letter is filed herewith as Exhibit 99.2 and is incorporated herein by reference.
Pursuant to the terms of the Confidentiality, Non-Compete, Severance, and Change in Control Agreement (the Severance Agreement) that is expected to be entered into by Dresser-Rand and Mr. van Gaalen, effective as of his start date, he will be entitled to receive: (i) a severance payment equal to 2.0 times his annual base salary if he is involuntarily terminated without Cause by Dresser-Rand and (ii) a severance payment equal to 2.4 times the sum of his annual base salary and AIP award at target if he is terminated by Dresser-Rand without Cause or he voluntarily terminates his employment with Good Reason within two years following a Change in Control. The terms Cause, Good Reason and Change in Control are defined in the form of Severance Agreement, which is included as Exhibit 99.3 to this Current Report on Form 8-K.
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits |
99.1 | Dresser-Rand Group Inc. Press Release dated April 3, 2013. | |
99.2 | Offer Letter, dated April 1, 2013, from Dresser-Rand to Jan Kees van Gaalen. | |
99.3 | Form of Confidentiality, Non-Compete, Severance, and Change In Control Agreement to be entered into with named executive officers other than the chief executive officer (reflecting revisions approved by the Compensation Committee to the form it previously approved, principally addressing Section 409A of the U.S. Internal Revenue Code) (incorporated by reference to Exhibit 10.2 to Dresser-Rand Group Inc.s Quarterly Report on Form 10-Q, filed November 1, 2012, File No. 001-32586). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
DRESSER-RAND GROUP INC. | ||||
(Registrant) | ||||
Date: April 3, 2013 | By: | /s/ Mark F. Mai | ||
Mark F. Mai | ||||
Vice President, General Counsel and Secretary |
DRESSER-RAND GROUP INC.
EXHIBIT INDEX
Exhibit No. |
Subject Matter | |
99.1 | Dresser-Rand Group Inc. Press Release dated April 3, 2013. | |
99.2 | Offer Letter, dated April 1, 2013, from Dresser-Rand to Jan Kees van Gaalen. | |
99.3 | Form of Confidentiality, Non-Compete, Severance, and Change In Control Agreement to be entered into with named executive officers other than the chief executive officer (reflecting revisions approved by the Compensation Committee to the form it previously approved, principally addressing Section 409A of the U.S. Internal Revenue Code) (incorporated by reference to Exhibit 10.2 to Dresser-Rand Group Inc.s Quarterly Report on Form 10-Q, filed November 1, 2012, File No. 001-32586). |
Exhibit 99.1
West8 Tower
10205 Westheimer Road
Houston, Texas 77042
www.dresser-rand.com
For Immediate Release
Dresser-Rand Names Jan Kees van Gaalen Executive Vice President and CFO
Houston, TX, April 3, 2013 Dresser-Rand Group Inc. (Dresser-Rand or the Company) (NYSE: DRC) announced today that Jan Kees van Gaalen will become Executive Vice President and Chief Financial Officer of Dresser-Rand, effective May 1, 2013. Mr. van Gaalen succeeds Mark Baldwin, whose impending retirement was previously announced.
Mr. van Gaalen joins Dresser-Rand from Baker Hughes Inc., a public company and leading provider of drilling, formation evaluation, completion and production products and services to the oil and gas industry, where he served as Vice President and Treasurer. Before joining Baker Hughes, he was the Chief Financial Officer and Vice President Finance for PT Inco Tbk based in Jakarta, Indonesia, the publicly traded Indonesian subsidiary of Vale Inco Ltd. Prior to this he held a variety of finance positions with Anglo American plc, Carlton Communications plc and Schlumberger Ltd. in France, the United Kingdom, Venezuela, Brazil and South Africa.
Mr. van Gaalen is fluent in English, German, Dutch, Portuguese, French, and Spanish. He received his bachelors degree in economics from the Erasmus University in Rotterdam, Netherlands and his MBA from the HEC Management School in France.
Vincent R. Volpe, Jr., Dresser-Rands President and CEO, said, We are delighted to welcome Jan Kees as a member of our leadership team. Jan Kees knowledge of our industry, along with his strong financial and operational pedigree and vast international experience provides him a solid platform for the role of Chief Financial Officer of Dresser-Rand. We look forward to Jan Kees contributions as a member of the Executive Staff, and to our continued progress in developing a world-class financial team.
I want to again recognize Mark Baldwin for his service to Dresser-Rand and thank him for the fine job he has done over the past five and one-half years building a strong finance team. During Marks tenure, we substantially strengthened our internal governance processes, created a culture of discipline, completed successful acquisitions, and developed our public company relationship with an independent Board of Directors and the community of investment analysts. I am also pleased that Mark will be available to assist the Company during the transition period with Jan Kees, said Volpe.
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About Dresser-Rand
Dresser-Rand is among the largest suppliers of rotating equipment solutions to the worldwide oil, gas, petrochemical, and process industries. The Company operates manufacturing facilities in the United States, France, United Kingdom, Spain, Germany, Norway, and India, and maintains a network of 49 service and support centers (including 6 engineering and R&D centers) covering more than 150 countries.
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This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, the Companys plans, objectives, goals, strategies, future events, future bookings, revenues, or performance, capital expenditures, financing needs, plans, or intentions relating to acquisitions, business trends, executive compensation, and other information that is not historical information. The words anticipates, believes, expects, intends, appears, outlook, and similar expressions identify such forward-looking statements. Although the company believes that such statements are based on reasonable assumptions, these forward-looking statements are subject to numerous factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks, and uncertainties include, among others, the following: economic or industry downturns; the variability of bookings due to volatile market conditions, subjectivity clients exercise in placing orders, and timing of large orders; volatility and disruption of the credit markets; its inability to generate cash and access capital on reasonable terms and conditions; its inability to implement its business strategy to increase aftermarket parts and services revenue; its ability to comply with local content requirements; delivery delays by certain third party suppliers of large equipment; its ability to implement potential tax strategies; competition in its markets; failure to complete or achieve the expected benefits from any future acquisitions; economic, political, currency and other risks associated with international sales and operations; fluctuations in currencies and volatility in exchange rates; loss of senior management; environmental compliance costs and liabilities; failure to maintain safety performance acceptable to its clients; failure to negotiate new collective bargaining agreements; a failure or breach of our information system security; unexpected product claims and regulations; infringement on its intellectual property or infringement on others intellectual property; its pension expenses and funding requirements; difficulty in implementing an information management system; and the Companys brand name may be confused with others. These and other risks are discussed in detail in the Companys filings with the Securities and Exchange Commission at www.sec.gov. Actual results, performance, or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. The Company can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them does, what impact they will have on results of operations and financial condition. The company undertakes no obligation to update or revise forward-looking statements, which may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, except as required by applicable law. For information about Dresser-Rand, go to its website at www.dresser-rand.com.
Investor Contact: Blaise Derrico, Vice-President Investor Relations (713) 973-5497
DRC-FIN
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Exhibit 99.2
West8 Tower
10205 Westheimer, Suite 1000
Houston, TX 77042
Gustavo Nechar
Vice President, Human Resources
April 1, 2013
Jan Kees van Gaalen
4950 Tilbury Drive
Houston, 77056, Texas
Dear Jan Kees,
Thank you very much for taking the time to interview with Dresser-Rand. We are impressed with your qualifications and accomplishments and would like to extend to you this employment offer with Dresser-Rand Company and to serve as the Executive Vice President & Chief Financial Officer (DRC and Company) reporting to Vincent R. Volpe, DRCs Chief Executive Officer and President. This position will be based in our Corporate Headquarters location in Houston, USA and will also require your presence in our second Corporate Headquarters located in Paris, France.
You will be asked to travel internationally to perform your role and responsibilities, and we estimate this to be at least 25% monthly.
We would anticipate your employment start date to be on or around April 15, 2013, but not later than May 14, 2013.
The components of your total compensation package include:
| A base salary of $15,461.54, paid bi-weekly, which equates to $402,000 on an annualized basis. |
| Participation in Dresser-Rands annual incentive program (AIP), with a target payout level of 60% of your annual base salary, and a potential for a maximum award at two (2) times the target. For 2013, you will be eligible to receive a pro-rated portion of this incentive based on your full months of service during the year. I have sent to you separately a copy of your 2013 AIP program summary and your individualized plan targets. |
| You will also participate in the Dresser-Rand Long Term Incentive (LTI) program, which is sponsored the Company. You will receive a 2013 grant valued at approximately $700,000 consisting of a pro-rated annual grant ($400,000) and a one-time special grant ($300,000) in recognition of your forfeiture of certain equity rights with respect to your current employer. This initial special grant of $700,000 will be composed of 60% of stock options and 40% of restricted stock units (time-based). |
Our 2013 LTI program is composed of stock options and restricted stock units, all of which vest, as applicable, pro-rata over a 3-year period. Dresser-Rand has adopted five fixed dates on which we grant equity each year. You will receive your 2013 grant on the first fixed grant date following your start date with the Company. We expect this date to be May 15, 2013. You will be eligible for nomination in the Companys next annual award cycle, which we expect at this time to be February 15, 2014. We would expect that the LTI grant value for the 2014 award to be approximately $643,200. We expect that LTI program grant will composed of 40% time-based restricted stock units, 30% performance based restricted stock units and 30% stock options units/SARs. All stock-based awards are subject to approval by the Compensation Committee for Dresser-Rand and to the terms and conditions of awards made under the Companys 2008 Stock Incentive Plan. Annual stock-based awards are variable and contingent based on your performance and the Companys financial performance.
| You are eligible to participate in the Companys Non-Qualified Retirement Plan. You will have an opportunity to enroll each June (for bonus deferrals) and December (for base pay deferrals). This plan affords you an opportunity to receive up to 10% of eligible compensation as a Company Matching contribution each pay period into that plan. |
| Eligibility for certain benefits in the event of a Change in Control (CIC) or involuntary separation, subject to the terms of a separate agreement to be executed after you commence employment and approval by the Compensation Committee of the Board of Directors. |
| Immediate eligibility for Dresser-Rands vacation, holiday, and participation in the Companys Retirement Savings Plan (RSP). You are eligible for 5 weeks of vacation per year, earned monthly. This annual amount will be prorated your first year. The RSP affords you an opportunity to receive up to 7% of your eligible compensation as a Company contribution to your account each pay period subject to the terms of that plan. |
| Eligibility for our health, life and income protection benefit programs on the first day of the month following your start date. All programs, employees benefits and otherwise, are subject to program guidelines, summary plan descriptions, and plan documents, as appropriate. Information on the Dresser-Rand benefits is available at www.dresser-rand.com/benefits. |
Please note that all components of your total compensation package, including eligibility, benefits, features or administrative components are subject to change, except as otherwise provided by law. No plan or program contained within this offer should be viewed as a contract or entitlement.
This offer of employment is contingent upon satisfactory provision or completion of the following:
| Approval of the Dresser-Rand Board of Directors, which we expect soon. |
| Necessary documentation to ensure our compliance with the Immigration Reform and Control Act of 1986. |
| Your written acceptance of the terms contained within certain Dresser-Rand policies and agreements such as Code of Conduct and Employment Agreement Related to Intellectual Property. |
| Your continuing agreement to receive your salary and expense reimbursement payments via direct deposit. |
| Drug screen. |
| Background check. |
| Reference check. |
| Your written confirmation that you are not bound by any non-compete or other restriction that would prohibit you from joining the Company. |
Please note that nothing in this offer letter is intended to create a fixed term of employment. Your employment with Dresser-Rand shall at all times remain at will.
Please confirm your acceptance of this offer by signing this letter and returning a full signed copy to me (gnechar@dresser-rand.com) by April 4, 2013. I can also be reached at +33 (0)1 56 26 71 53 or +1 (713) 973 53 18. This offer may be rescinded if you fail to timely satisfy any of the above listed contingencies.
If you have any questions regarding this offer, please contact me.
We are excited about your joining Dresser-Rand and we look forward to you being a member of our team.
Sincerely,
/s/ Gustavo Nechar