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
November 11, 2016
Date of Report (Date of earliest event reported)
Franks International N.V.
(Exact name of Registrant as specified in its charter)
The Netherlands | 001-36053 | 98-1107145 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
Mastenmakersweg 1
1786 PB Den Helder, The Netherlands
(Address of principal executive offices)
+31 (0)22 367 0000
(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:
☐ | 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 November 14, 2016, Franks International N.V. (the Company) announced the appointment by the board of managing directors (the Management Board) and the board of supervisory directors (the Supervisory Board) of Douglas Stephens to serve as President and Chief Executive Officer, succeeding Gary P. Luquette, effective November 15, 2016. Mr. Luquette will remain an employee and serve as a special advisor to the Company through December 31, 2016 to assist in transitioning his duties to his successor and will remain a non-executive member of the Supervisory Board until our next annual meeting of shareholders; he will also serve as a consultant to the Company during the year 2017.
Mr. Stephens, age 53, previously served as President, Pressure Pumping, of Baker Hughes Incorporated from June 2012 to November 2016. Prior to joining Baker Hughes, Mr. Stephens was Vice President and Global Account Director at Schlumberger Limited from June 2009 until June 2012. Previously, Mr. Stephens served in various positions of leadership at Schlumberger and as a member of the board of directors of Packers Plus. Mr. Stephens has over 28 years of experience in the oilfield services sector and holds a B.A.S. in mechanical engineering from the University of British Columbia.
Pursuant to an offer letter agreement between Mr. Stephens and the Company (the Offer Letter), Mr. Stephens will be paid an annual base salary of $650,000 and will be eligible for an annual incentive bonus beginning in 2017, based on performance criteria determined by the Supervisory Board or a committee thereof with an expected target bonus opportunity equal to 100% of his base salary. Beginning in 2017, Mr. Stephens will be eligible to receive, pursuant to the Companys long-term incentive plan, annual grants of equity-based incentive awards equal to 300% of his annual base salary. In addition, Mr. Stephens will receive an initial grant of restricted stock units with a grant date value of $325,000 that will vest 1/3 per year on each of the first, second, and third anniversaries of the grant date.
The Offer Letter provides that Mr. Stephens will be eligible to participate in the Companys benefit plans and programs generally available to the Companys senior executives, including the Executive Change in Control Severance Plan, which provides severance in the event of a qualifying termination following a change in control. In connection with his employment, Mr. Stephens will be expected to agree to certain restrictive covenants generally applicable to other executive officers of the Company, including non-competition and non-solicitation provisions and customary non-disclosure and confidentiality provisions. He will also enter into an indemnification agreement for his service as an officer, consistent with the form of indemnity agreement entered into by other executive officers and directors of the Company, as previously disclosed by the Company.
The foregoing description of the Offer Letter is qualified by reference to the full text of the Offer Letter, a copy of which will be filed as an exhibit to the Companys Annual Report on Form 10-K for the year ended December 31, 2016.
There are no other understandings or arrangements between Mr. Stephens and any other person pursuant to which Mr. Stephens was selected to serve as principal executive officer and president. Mr. Stephens does not have any relationships requiring disclosure under Item 401(d) of Regulation S-K or any interests requiring disclosure under Item 404(a) of Regulation S-K.
In connection with Mr. Luquettes separation from the Company and pursuant to a Separation, Consulting, and General Release Agreement entered into between Mr. Luquette, the Company and its employing subsidiary effective as of November 11, 2016 (the Agreement), Mr. Luquette is entitled to certain transition payments and benefits that are contingent on (a) his execution and non-revocation of certain releases, which waive and release claims against the Company and related parties for any liability relating to his employment; (b) his continued employment through December 31, 2016 to help transition his duties to his successor; (c) his service as a consultant to the Company and the Supervisory Board for a 12-month period following his separation date; and (d) his compliance with certain restrictive covenants, including customary confidentiality provisions and non-competition and non-solicitation restrictions. Such payments and benefits under his Agreement include the following: (i) payment of $750,000, to be provided in equal monthly payments over the 12-month period following his separation date, (ii) payment of an annual bonus for 2017, in the amount of $750,000, with payment to be made in the first quarter of 2018 on the date that annual bonuses are customarily paid by the Company; (iii) for up to 18 months following his separation, continued health coverage and reimbursement of premium costs under the Companys group health plan to effectuate the same premium rate paid
by active senior executive employees of the Company; (iv) a grant of restricted stock units in 2017, pursuant to the Companys long-term incentive plan, with an aggregate value on the date of grant of $3 million, vesting ratably in three annual installments (2017 LTIP Award); and (v) continued vesting of his unvested restricted stock units that were granted in 2016 (2016 RSUs), as well as his 2017 LTIP Award, during the remainder of the vesting schedule provided under each of the applicable award agreements, subject to certain restrictive covenants that remain in effect through the completion of the relevant vesting schedules included therein.
The foregoing description of the Agreement is qualified by reference to the full text of the Agreement, a copy of which will be filed as an exhibit to the Companys Annual Report on Form 10-K for the year ended December 31, 2016.
Item 7.01 Regulation FD Disclosure.
On November 14, 2016, the Company issued a press release announcing the leadership transition described in this Current Report on Form 8-K. A copy of the press release is attached hereto as Exhibit 99.1.
The information contained in 7.01 of this Current Report on Form 8-K, including the information contained in Exhibit 99.1 attached hereto, shall not be deemed to be filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities of that section, and is not incorporated by reference into any registration statement or other filing under the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit | ||
Number |
Description of the Exhibits | |
99.1 | Press Release dated November 14, 2016. |
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.
Franks International N.V. | ||||||
Date: November 14, 2016 | By: | /s/ Alejandro Cestero | ||||
Name: Alejandro Cestero | ||||||
Senior Vice President, General Counsel and Secretary |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Franks International Announces the Appointment of Douglas Stephens as President and Chief Executive Officer
HOUSTON, November 14, 2016 Franks International N.V. (Franks or the Company) (NYSE: FI) today announced that its Board of Supervisory Directors has named Douglas Stephens as President and Chief Executive Officer effective November 15, 2016. Mr. Stephens was most recently with Baker Hughes, Inc. where he was President of the global pressure pumping division and responsible for its worldwide tubular running and pressure pumping business. Prior to Baker Hughes, Mr. Stephens held various positions of increasing responsibility for over 20 years with Schlumberger Limited, including assignments in the United States, Oman, Italy, Egypt and the United Kingdom.
Mr. Stephens will succeed Gary Luquette, who has served as President and CEO since January 2015. Mr. Luquette will remain with the Company to assist in the transition until December 31, 2016. He will also continue as a Supervisory Director until the next Annual Meeting of Shareholders in May 2017, when Mr. Stephens will be recommended to the shareholders for election to the Supervisory Board.
Michael Kearney, Chairman of Franks Board, commented, The Board of Supervisory Directors is extremely excited to have Douglas join the Franks team at this important juncture in the long, highly successful history of the Company. We have complete confidence in Douglas based on his leadership abilities and extensive, worldwide oil service experience. As our Board considered candidates for our leadership succession plan, Douglas became a clear choice to continue the success achieved by our prior CEOs.
Kearney continued Keith Mosing, the grandson of the founder of Franks who began the business in 1938, created the international component of the Company and drove the growth and profitability of Franks for over three decades as CEO until handing over the Chief Executive duties to Gary Luquette. Gary agreed to assume the role of CEO in January 2015 and serve as both a continuing Board member and transitional CEO that would take on the critical mandate of transforming the Companys operations from that of a private company to that of a public company. On behalf of the entire Board as well as Franks employees, I want to thank Gary for his significant contributions to the Company, which are even more impressive when considering the severe industry downturn which began as he was commencing his tenure as CEO. His leadership has allowed the Company to successfully make the transition from private to public. We wish Gary the very best in his future endeavors.
Douglas Stephens commented, I am joining Franks with a great deal of enthusiasm. This is a company with high respect in the industry and significant potential for future growth. The confidence shown by the Board in asking me to lead the organization is greatly appreciated. I look forward to working with all of Franks employees, and continuing the traditions embodied in the One Franks culture and our commitment to providing safety and excellent service delivery to customers worldwide.
Mr. Luquette commented, I appreciate the trust that the Board has placed in me as President and CEO for the past two years and I am grateful for the opportunity to lead this great
company. I also want to thank the entire Franks team for their unwavering support. Finally, a special thanks to Keith Mosing and the entire Mosing family for allowing me to carry on the great legacy they created over Franks nearly 80-year history.
About Douglas Stephens
Mr. Stephens has over 25 years of international and domestic oil field service experience in a wide variety of environments with companies including Schlumberger and Baker Hughes. He started his career as a field engineer in Italy with Schlumberger and spent the first several years working in operational and front line management roles in continental Europe, the North Sea, North Africa and the Middle East. Mr. Stephens led the Europe, Africa and CIS region before moving back to North America where he assumed a wide variety of responsibilities. Over the span of his career he has been involved in almost all aspects of the oil field service industry, including Sales and Marketing, Product Development, Human Resource management and Executive leadership positions. Mr. Stephens has been a leader in a wide variety of services and technologies including managing a global TRS business, and has lived in 10 different countries.
Mr. Stephens earned a degree in Applied Science in Mechanical Engineering from the University of British Columbia in Vancouver BC and is a member of the SPE, AADE and SEG. He and his family reside in Houston, Texas.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Franks expects, believes or anticipates will or may occur in the future are forward-looking statements.
Forward-looking statements are based on certain assumptions made by Franks based on managements experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although Franks believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Franks, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced in the Risk Factors section of Franks Annual Report on Form 10-K for the year ended December 31, 2015 that has been filed with the SEC and in Franks Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 that has been filed with the SEC. Any forward-looking statement speaks only as of the date on which such statement is made, and Franks undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law, and we caution you not to rely on them unduly.
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Franks International N.V. is a global oil services company that provides a broad and comprehensive range of highly engineered tubular services to leading exploration and production companies in both offshore and onshore environments, with a focus on complex and technically demanding wells. Founded in 1938, Franks has approximately 3,000 employees and provides services in over 60 countries on six continents. The Companys common stock is traded on the NYSE under the symbol FI. Additional information is available on the Companys website, www.franksinternational.com.
Contacts
Blake Holcomb, Director Investor Relations
blake.holcomb@franksintl.com
713-231-2463
Karen Allen, Director Communications and External Affairs
karen.allen@franksintl.com
713-358-7325
10260 Westheimer Road, Suite 700
Houston, Texas 77042
281-966-7300 Telephone
800-827-6020 Toll Free
281-558-7883 Fax
www.franksinternational.com