Item 5.02. Departure of Directors or Certain Officers, Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 6, 2021, Steve Swank resigned as Chief Financial Officer of the Company, effective as of January 8, 2021. Mr. Swank’s resignation was not the result of any dispute or disagreement with the
Company relating to the Company’s operations, policies or practices. Mr. Swank has agreed to remain with the Company for one month, at his current salary, to provide assistance with the transition of his role.
On January 8, 2021, the Company appointed Michael Galvan to the position of Chief Financial Officer of the Company, effective January 11, 2021. On January 11, 2021, the Company announced Mr. Galvan’s
appointment in the Press Release. Mr. Galvan, 51, first joined the Company in May 2020, serving as Interim Chief Financial Officer until Mr. Swank’s arrival in July 2020; since then, he has remained with the Company on a full-time consulting basis.
Mr. Galvan brings over 25 years of finance and accounting experience to the Company, including executive leadership roles serving as Interim Chief Financial Officer, Chief Accounting Officer and Treasurer for a variety of publicly traded companies.
Prior to joining the Company, Mr. Galvan served as Senior Vice President, Chief Accounting Officer and Treasurer of Nextier Oilfield Solutions, Inc., from 2014 until April 2020, including serving as Interim Chief Financial Officer from March –
September 2018.
In connection with Mr. Galvan’s employment, his offer letter provides that Mr. Galvan will receive an initial annual base salary of $300,000; he is eligible to receive an annual bonus under the
Company’s executive bonus plan, with a target bonus of 30% percent of his base salary (dependent on Company and individual performance). Upon completion of the Company’s financial restatement and the filing of all of its outstanding annual and
quarterly reports with the SEC, Mr. Galvan will receive a grant of 9,000 restricted stock units (each convertible into one share of the Company’s common stock), which will vest on the first anniversary of such grant, subject to his continued
employment with the Company on that date. He will be eligible to receive future equity grants under the Company’s 2013 Restricted Stock Plan, with a target annual grant value of 30% of his base salary (dependent on Company and individual
performance).
If Mr. Galvan’s employment is terminated by the Company without “cause” or he resigns his position for “good reason” on or before the first anniversary of his start date, the Company will
pay him salary continuation and allow him continued participation in the Company’s health and welfare benefit programs for six months after his departure. For purposes of Mr. Galvan’s employment terms, (1) “cause” means that he is terminated for:
acts of fraud, dishonesty or criminal conduct; gross negligence, insubordination or willful refusal or to perform his duties; or unsatisfactory job performance that continues even after a warning from his immediate supervisor; and (2) “good reason”
would mean without his consent: (i) a material diminution in his duties, authority, or responsibilities or a material breach of his offer letter by the Company; or (ii) requiring him to relocate his principal place of employment to a
location that is more than fifty (50) miles from the current location of the Company’s principal office in Fort Worth and from his current residence in Houston.
There are no other arrangements or understandings between Mr. Galvan and any other persons pursuant to which he was named Chief Financial Officer of the Company, except the Company expects to make a
payment of approximately $30,000 to The CFO Suite, LLC, the consulting firm through which Mr. Galvan had provided his services to the Company. Mr. Galvan does not have any family relationships with any of the Company’s directors or executive
officers or any persons nominated or chosen by the Company to be a director or executive officer. Mr. Galvan does not have any direct or indirect material interest in any transaction or proposed transaction required to be reported under item 404(a)
of Regulation S-K.