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
Date of Report: November 16, 2011
Date of earliest event reported: November 10, 2011
MCJUNKIN RED MAN HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation)
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333-153091
(Commission File Number)
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20-5956993
(I.R.S. Employer
Identification Number) |
2 Houston Center, 909 Fannin, Suite 3100,
Houston, TX 77010
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (877) 294-7574
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 (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
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| Item 1.01 |
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Entry into a Material Definitive Agreement |
Director Compensation Plan
On November 10, 2011, the Board of Directors (“Board”) of McJunkin Red Man Holding
Corporation (the “Company”) approved the McJunkin Red Man Holding Corporation Director
Compensation Plan (the “Director Compensation Plan”). The Director Compensation Plan
provides for payment of retainers, meeting fees and expenses and grants of common stock or common
stock derivatives such as stock options or restricted stock awards to non-employee directors of the
Company as compensation for their service on the Board. The Director Compensation Plan will be
administered by the Compensation Committee of the Board. As part of the adoption of the Director
Compensation Plan, the Board confirmed that non-employee directors of the Company will continue to
receive an $80,000 annual cash retainer and grants of common stock derivatives at the discretion of
the Board.
The foregoing summary of the Director Compensation Plan is qualified in its entirety by
reference to the actual terms of the Director Compensation Plan, attached hereto as Exhibit 10.1 to
this Form 8-K.
Officer Indemnification Agreement
On November 10, 2011, the Board also approved a form of Officer Indemnification Agreement (the
“Indemnification Agreement”) to be entered into by the Company with each of the executive
officers and certain other officers and employees. The Indemnification Agreement generally
requires the Company to indemnify and hold such persons harmless to the greatest extent permitted
by law for liabilities arising out of such person’s service to the Company as an officer or
employee, if such person acted in good faith and in a manner that the person reasonably believed to
be in or not opposed to the best interests of the Company and, with respect to criminal
proceedings, if the person had no reasonable cause to believe that his or her conduct was unlawful.
In addition, the Indemnification Agreement provides for the Company to make advance payment of
expenses to the indemnitee for attorney fees and/or court costs in connection with any proceeding
relating to any fact or occurrence arising from or relating to events or occurrences specified in
the Indemnification Agreement, provided such person provides an undertaking agreeing to repay such
advancement if it is ultimately determined by a court of competent jurisdiction in a final
judgment, not subject to appeal, that the indemnitee is not entitled to be indemnified by the
Company.
The foregoing description of the Indemnification Agreement is qualified in its entirety by
reference to the form of the Indemnification Agreement which is filed as Exhibit 10.2 to this Form
8-K.
Braun Employment Agreement
As disclosed by the Company in its Current Report on Form 8-K filed with the U.S. Securities
Exchange Commission on October 18, 2011, Mr. James E. Braun was appointed to serve as the Company’s
Executive Vice President and Chief Financial Officer effective November 15, 2011, and Mr. Braun
would be executing an employment agreement with the Company. On November 15, 2011, the Company
entered into an employment agreement with Mr. Braun (the “Braun Employment Agreement”).
Pursuant to the Braun Employment Agreement, Mr. Braun will serve as the Company’s Executive Vice
President and Chief Financial Officer for a term of three years. Mr. Braun is entitled to a base
salary of $425,000 and is entitled to receive an annual incentive bonus equal to 67% of his base
salary based upon such individual and/or Company performance criteria established for each such
fiscal year by the Board in consultation with the Chief Executive Officer. Mr. Braun is also
entitled to receive a grant of stock options in respect of shares of the Company’s common stock,
with an aggregate grant date value of $3,000,000. The Braun Employment Agreement also provides for
certain severance payments and benefits following a termination of employment under certain
circumstances.
Pursuant to the terms of the
Braun Employment Agreement, if Mr. Braun’s employment is terminated for any reason, including his voluntary
resignation, he is entitled to receive all accrued, but unpaid, obligations including any base salary earned but
unpaid through the date of termination, any earned but unpaid annual bonus for completed fiscal years and any
unreimbursed expenses and any other unpaid accrued benefits. If Mr. Braun’s employment is terminated other than
for “Cause” or “Disability” (as defined in the agreement) or if he resigns
for “Good Reason”, he is entitled to the following severance payment and benefits:
• Continuation of his base
salary at the rate in effect immediately prior to the date of
termination for a period of 12 months;
• Continuation of medical
benefits for 12 months, until such earlier time as he becomes eligible for medical benefits
from a subsequent employer; and
• A pro-rata annual bonus
for the fiscal year in which termination occurs, based on actual
performance through the end of the fiscal year.
These payments and the provision
of benefits are generally subject to the execution of a release and compliance with restrictive covenants prohibiting
competition, solicitation of employees and interference with business relationships during employment and thereafter
during the applicable restriction period. The restrictions apply during Mr. Braun’s employment and for
12 months following termination. In addition, Mr. Braun is subject to perpetual restrictive covenants regarding
confidentiality, non-disparagement and proprietary rights.
The Braun Employment Agreement
defines “Cause” to mean Mr. Braun’s (i) continuing failure, for more than 10 days after the Company’s
written notice to Mr. Braun thereof, to perform such duties as are reasonably requested by the Company; (ii) failure to
observe material policies generally applicable to officers or employees of the Company unless such failure is
capable of being cured and is cured within 10 days of Mr. Braun receiving written notice of such failure;
(iii) failure to cooperate with any internal investigation of the Company; (iv) commission of any act of fraud,
theft or financial dishonesty with respect to the Company or indictment or conviction of any felony;
(v) material violation of the provisions of this Agreement unless such violation is capable of being cured
and is cured within 10 days of Mr. Braun receiving written notice of such violation; (vi) chronic absenteeism;
or (vii) abuse of alcohol or another controlled substance. “Good Reason” is defined to mean (i) a material
and adverse change in Mr. Braun’s duties or responsibilities, or (ii) a reduction in Mr. Braun’s base salary
or target annual bonus.
The foregoing description of the Braun Employment Agreement is qualified in its entirety by
reference to the Braun Employment Agreement which is filed as Exhibit 10.3 to this Form 8-K.
Exhibits
A copy of the Director Compensation Plan, the form of Indemnification Agreement and the Braun
Employment Agreement are filed herewith as Exhibits and incorporated herein by reference.
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