Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As a result of the uncertainty created by the effects of the global COVID-19
pandemic and the decline in worldwide oil prices, Pioneer Energy Services Corp.
(the "Company") is implementing certain proactive cost cutting measures. As part
of those measures, on April 22, 2020 the Compensation Committee of the Board of
Directors of the Company suspended the Company's 2019 Employee Incentive Plan
effective immediately, and determined that no bonuses would be payable
thereunder in respect of the first quarter of 2020. In addition, the Board of
Directors approved reductions in the base salaries of each of the Company's
executive officers. Effective April 28, 2020, the base salaries of the Company's
executive officers will be reduced by the following percentages:
Reduction in
Name Title Base Salary
Wm. Stacy Locke President and Chief Executive Officer 28%
Lorne E. Phillips Executive Vice President and Chief Financial Officer 20%
Carlos R. Peña Executive Vice President and Chief Strategy Officer 20%
Brian L. Tucker Executive Vice President and Chief Operating Officer 20%
Bryce T. Seki Vice President, General Counsel, Secretary and 20%
Compliance Officer
As a further step to reduce costs, effective during the period beginning April
28, 2020 and ending May 29, 2020, the Company is implementing a four-day work
week for all corporate office employees, including our executive officers, and
the Company is implementing a corresponding reduction in pay to reflect the
reduced work schedule. As a result, during that period, our executive officers
will each be paid at a rate of 85% of their reduced base salary in effect on
April 28, 2020. Similarly, during that period, the Company's employees that are
exempt and paid a salary will be paid at a rate of 85% of their base salaries to
reflect the reduced work schedule, and the Company's employees that are
non-exempt and paid on an hourly basis will be paid for their actual hours
worked. The Company intends to reevaluate the reduced work schedule at the end
of that period.
Cautionary Statement Regarding Forward-Looking Statements
Statements contained in this current report that express a belief, expectation
or intention, as well as those that are not historical fact, are forward-looking
statements made in good faith that are subject to risks, uncertainties and
assumptions. These forward-looking statements are based on our current beliefs,
intentions, and expectations and are not guarantees or indicators of future
performance. Any statements that express, or involve discussions as to,
expectations, beliefs, plans, objectives, assumptions, future events or
performance (often, but not always identifiable by the use of the words or
phrases such as "will result," "expects to," "will continue," "anticipates,"
"plans, "intends," "estimated," "projects," and "outlook") are not historical
facts and may be forward-looking and, accordingly, such statements involve
estimates, assumptions and uncertainties which could cause actual results to
differ materially from those expressed in these forward-looking statements. Our
actual results, performance or achievements or industry results could differ
materially from those we express in the foregoing discussion as a result of a
variety of factors, including general economic and business conditions and
industry trends, levels and volatility of oil and gas prices, the continued
demand for drilling services or production services in the geographic areas
where we operate, decisions about exploration and development projects to be
made by oil and gas exploration and production companies, the highly competitive
nature of our business, technological advancements and trends in our industry
and improvements in our competitors' equipment, the loss of one or more of our
major clients or a decrease in their demand for our services, future compliance
with covenants under debt agreements, including our debtor-
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in-possession facility, operating hazards inherent in our operations, the supply
of marketable drilling rigs, well servicing rigs, coiled tubing units and
wireline units within the industry, the continued availability of new components
for drilling rigs, well servicing rigs, coiled tubing units and wireline units,
the continued availability of qualified personnel, the success or failure of our
acquisition strategy, the occurrence of cybersecurity incidents, the political,
economic, regulatory and other uncertainties encountered by our operations, and
changes in, or our failure or inability to comply with, governmental
regulations, including those relating to the environment; as well as due to the
risks and uncertainties relating to the bankruptcy filing by the Company,
including but not limited to, (i) the Company's ability to obtain Bankruptcy
Court approval with respect to motions in the Chapter 11 Cases, (ii) the ability
of the Company to consummate the transactions contemplated by the restructuring
support agreement with respect to the Chapter 11 Cases, (iii) the effects of the
Company's bankruptcy filing on the Company and on the interests of various
constituents, (iv) Bankruptcy Court rulings in the Chapter 11 Cases and the
outcome of the cases in general, (v) the length of time the Company will operate
under the Chapter 11 Cases, (vi) risks associated with third party motions in
the Chapter 11 Cases, which may interfere with the Company's ability to
consummate the transactions contemplated by the restructuring support agreement,
(vii) the potential adverse effects of the Chapter 11 Cases on the Company's
liquidity or results of operations, (viii) the ability to operate the Company's
business and consummate the transactions contemplated by the restructuring
support agreement, (ix) the transactions contemplated by the
debtor-in-possession facility and the restructuring support agreement being
subject to closing conditions, which conditions may not be satisfied for various
reasons, including for reasons outside of the Company's control? (x) increased
legal costs to execute the Company's reorganization, and other risks and
uncertainties, (xi) the Company's ability to maintain contracts, trade credit
and other customer and/or vendor relationships that are essential to the
Company's operations, and (xii) the Company's ability to retain key executives
and employees. We have discussed many of these factors in more detail in our
Annual Report on Form 10-K for the year ended December 31, 2019, including under
the heading "Risk Factors" in Item 1A. and "Special Note Regarding
Forward-Looking Statements" in the Introductory Note to Part I. These factors
are not necessarily all the important factors that could affect us. Other
unpredictable or unknown factors could also have material adverse effects on
actual results of matters that are the subject of our forward-looking
statements. All forward-looking statements speak only as of the date on which
they are made and we undertake no obligation to publicly update or revise any
forward-looking statements whether as a result of new information, future events
or otherwise. We advise readers that they should (1) recognize that important
factors not referred to above could affect the accuracy of our forward-looking
statements and (2) use caution and common sense when considering our
forward-looking statements.
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