Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b) and (e) On March 22, 2021, Superior Energy Services, Inc. (the “Company”) announced that David Dunlap, the Company’s president and chief executive officer and a member of its board of directors, and Westy Ballard, the Company’s executive vice president, chief financial officer and treasurer, had each resigned from all positions with the Company effective March 16, 2021 (the “Resignation Date”). Mr. Dunlap and Mr. Ballard resigned from the Company to pursue other opportunities and their departures are not related to any disagreements regarding financial disclosures, accounting matters or other business issues. Each of Mr. Dunlap and Mr. Ballard have entered into a waiver and release agreement which contains, among other things, a release of claims and an acknowledgment that the individuals will continue to be bound by the terms of their existing restrictive covenant agreements with the Company contained in their respective employment agreements, and an acknowledgment that each will receive predetermined amounts under such employment agreements, provided that such individual does not subsequently revoke his waiver and release agreement, as follows: (i) the executive’s base salary through the date of termination, earned and vested benefits under Company long-term incentive and employee benefit plans and programs, and medical or other welfare benefits required by law or the applicable plan (including payment of the executive’s accrued deferred compensation and supplemental retirement plan benefits, as applicable, and the payments, if any, earned under the executive’s previously-disclosed 2018 and 2019 performance share unit awards, provided that any payment under the 2019 performance share unit award will be pro-rated for the portion of the performance period elapsed prior to termination); (ii) a lump sum payment equal to (x) two times the sum of the executive’s annual salary plus target annual bonus, and (y) the executive’s pro-rated target annual bonus for the year of termination, the payments in this clause (ii) resulting in a lump sum cash payment to Mr. Dunlap and Mr. Ballard of approximately $3.7 million and $1.7 million, in each case minus required witholding and deductions, respectively; and (iii) Company-paid healthcare continuation benefits for up to 24 months for the individual and the individual’s spouse and family.
(c) On March 18, 2021, Michael Y. McGovern, the chairman of the Company’s board of directors, was appointed executive chairman and effective as of the Resignation Date assumed the functions of the Company’s principal executive officer on an interim basis until Mr. Dunlap’s successor is identified, and James Spexarth, the Company’s chief accounting officer, effective as of the Resignation Date was appointed to also serve as interim chief financial officer of the Company.
Michael Y. McGovern, 69, is currently the Executive Chairman of the Company. Mr. McGovern also serves as a director of Cactus, Inc., ION Geophysical Corporation, and Nuverra Environmental Solutions, Inc. Mr. McGovern also served as a director of GeoMet, Inc., an independent energy company, from September 2010 until December 2018 and has more than 40 years of experience in the energy industry having served as a director and an executive at multiple public and private companies.
A description of Mr. Spexarth’s positions with the Company, business experience and certain biographical information is set forth in the Company’s Form 10-K/A for fiscal year ended December 31, 2019 filed with the U.S. Securities and Exchange Commission (the “SEC”) on June 11, 2020, which information is incorporated by reference herein.
Neither Mr. McGovern nor Mr. Spexarth have any family relationships with any director, executive officer or person nominated or chosen by the Company to become a director or executive officer of the Company. The Company is not aware of any related transactions or relationships between Mr. McGovern or Mr. Spexarth, on the one hand, and the Company, on the other, that would require disclosure under Item 404(a) of Regulation S-K. Mr. McGovern was appointed to the Company’s board of directors in accordance with the Stockholders’ Agreement by and among the Company and its stockholders party thereto, dated as of February 2, 2021 and previously filed as Exhibit 10.3 on Form 8-K filed with the SEC on February 2, 2021. There are no arrangements or understandings between Mr. Spexarth and any other persons pursuant to which Mr. Mr. Spexarth was selected as an officer of the Company.