UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
2020 Short-Term Incentive Program
On February 17, 2020, the compensation committee of the board of directors (the “Committee”) of Archrock Inc. (“Archrock”, “we” or “us”) adopted a short-term incentive program (the “2020 Incentive Program”) to provide the short-term cash incentive compensation element of our total direct compensation program for this year. The Committee set the cash incentive target under the 2020 Incentive Program for each of our named executive officers set forth below (the “Named Executive Officers”), as a specified percentage of his or her respective eligible earnings.
| Executive Officer | Title | 2020 Cash Incentive Target (% of eligible earnings) | ||
| D. Bradley Childers | President and Chief Executive Officer | 120 | ||
| Douglas S. Aron | Senior Vice President and Chief Financial Officer | 75 | ||
| Stephanie C. Hildebrandt | Senior Vice President, General Counsel and Secretary | 70 | ||
| Jason G. Ingersoll | Senior Vice President, Marketing and Sales | 70 |
Each Named Executive Officer’s potential cash incentive payout ranges from 0% to 200% of his or her respective target, as may be adjusted by the Committee in its discretion.
Actual payouts under the 2020 Incentive Program will be based on the Committee’s assessment of our performance for 2020 relative to one or more of the following performance indicators, as well as such other factors or criteria that the Committee in its discretion deems appropriate:
| · | Adjusted EBITDA – a non-GAAP measure, defined as net income (loss) excluding loss from discontinued operations, net of tax, income taxes, interest expense, depreciation and amortization, long-lived asset impairment, restatement and other charges, restructuring and other charges, corporate office relocation costs, debt extinguishment loss, merger-related costs, indemnification (income) expense, net, non-cash stock-based compensation expense and other items; |
| · | Safety – to be assessed by specific corporate and group metrics, including the total incident rate for recordable injuries; |
| · | Service - to be assessed by various group metrics, including equipment service availability, quality and other service related measures applicable to operating units; |
| · | People – to be assessed by group metrics based on employee retention; |
| · | Technology - a special multi-year initiative to improve operating efficiencies; and |
| · | Operational performance – to be assessed by various group metrics applicable to operating units. |
The Committee intends to award performance-based short-term incentive compensation under the 2020 Incentive Program based on its assessment of: (i) for all Named Executive Officers, adjusted EBITDA, Safety, People and Technology, (ii) in addition, for Mr. Ingersoll, operational performance, (iii) each Named Executive Officer’s individual contribution toward our company and/or operating unit performance, including his or her demonstrated leadership and implementation of our business strategy, (iv) the recommendations of our Chief Executive Officer (other than with respect to himself), and (v) any other factors or criteria that the Committee may choose to consider, in its discretion. The Committee has reserved the right to modify the target levels of one or more of the performance indicators, in its discretion based on internal and external developments during the course of 2020.
Adjustments to Base Salaries for 2020
On February 17, 2020, the Committee set the 2020 annual base salaries of our Named Executive Officers as follows, to be effective April 2020:
| Executive Officer | Title | Prior Base Salary ($) | New Base Salary ($) | |||||||
| D. Bradley Childers | President and Chief Executive Officer | 875,000 | 875,000 | |||||||
| Douglas S. Aron | Senior Vice President and Chief Financial Officer | 450,000 | 460,000 | |||||||
| Stephanie C. Hildebrandt | Senior Vice President, General Counsel and Secretary | 410,000 | 420,000 | |||||||
| Jason G. Ingersoll | Senior Vice President, Marketing and Sales | 350,000 | 360,000 | |||||||
SIGNATURE
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.
| ARCHROCK, INC. | ||
| By: | /s/ Stephanie C. Hildebrandt | |
| Stephanie C. Hildebrandt | ||
| Senior Vice President, General Counsel and Secretary | ||
| February 21, 2020 | ||
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