Document:

Exhibit 10.3

 

October 4, 2019

 

Darin G. Holderness

5 Northern Bear Point

Boerne, Texas  78006

 

Dear Darin:

 

This letter memorializes the terms of your role as Interim Chief Financial Officer of ProPetro Holding Corp. (the “Company”), effective as of October 3, 2019 (the “Effective Date”).

 

As of the Effective Date, your consulting relationship with the Company will end and the Consulting Agreement, effective as of July 8, 2019, pursuant to which you provide such services and to which both you and the Company are parties, will be terminated.  You will become employed by the Company or one of its direct and indirect subsidiaries (the Company and its subsidiaries and affiliates are collectively referred to as the “Company Group”).  Your duties and responsibilities as Interim Chief Financial Officer will be determined from time to time by the Board of Directors of the Company (the “Board”). You will report to the Company’s principal executive officer.  During the period in which you serve as the Interim Chief Financial Officer (the “Term”), you will also be designated as the Company’s principal financial officer, and in such capacity, you will be responsible for providing certifications containing representations regarding the Company’s periodic reports filed with the Securities and Exchange Commission in accordance with applicable securities laws.

 

During the Term, you will receive an annualized base salary of $500,000 (“Base Salary”), less applicable taxes and other withholdings, payable in accordance with the Company’s payroll practices in effect from time to time. During the Term, you will be eligible to earn annual bonus compensation (“Annual Bonus”) with a target value of 75% of your Base Salary for each complete calendar year that you are employed by the Company.  Notwithstanding the foregoing, (i) you will be eligible to receive a pro rata bonus for the portion of the 2019 calendar year that you are employed by the Company (the “2019 Bonus”) and (ii) you will be eligible to receive a pro rata bonus for the year in which your employment with the Company terminates, calculated based on the portion of such calendar year that you are employed by the Company and the actual performance of the Company for that full calendar year, so long as the Compensation Committee of the Board determines, in its sole discretion, that you are a “good leaver,” as defined in your performance share unit (“PSU”) and restricted stock unit (“RSU”) award agreements.  The amount of each Annual Bonus and the 2019 Bonus that is actually paid to you will be subject to the terms and conditions of the ProPetro Holding Corp. Senior Executive Incentive Bonus Plan, as in effect from time to time and the attainment of the applicable performance targets, as determined Board (or a committee thereof).  The performance targets that must be achieved in order to be eligible for certain bonus levels will be established by the Board (or a committee thereof) annually, in its sole discretion.  Each Annual Bonus (and the 2019 Bonus), if any, will be paid to you as soon as administratively feasible after the Board (or a committee thereof) certifies whether the applicable performance targets for the applicable year have been achieved, but in no event later than March 15 following the end of the year for which the bonus was earned (the “Bonus Year”).  Except as specified above, no Annual Bonus (or the 2019 Bonus), if any, will be payable for any Bonus Year

 

 

unless you remain continuously employed by the Company from the Effective Date through December 31 of the applicable Bonus Year.  During the Term, the Company will reimburse you for reasonable expenses for temporary housing and travel expenses incurred while you perform your duties as Interim Chief Financial Officer of the Company.

 

Subject to approval by the Board (or a committee thereof), for the 2020 calendar year, you will be eligible to receive an award under the ProPetro Holding Corp. 2017 Incentive Award Plan (the “Incentive Plan”) with a grant date target value of approximately $1,000,000, which we expect will consist 50% of time-based RSUs and 50% of PSUs, in each case, generally subject your continued employment with the Company or its affiliates through the relevant date of grant and the terms and conditions of the Incentive Plan and the applicable award agreements.  For the 2019 calendar year, you will be eligible to receive a prorated equity award under the Incentive Plan with a grant date target value of approximately $250,000 based on the portion of the year during which you are employed by the Company as Interim Chief Financial Officer (the “Top-Up Award”). We expect that the Top-Up Award will consist 50% of RSUs and 50% of PSUs and will be granted in connection with your appointment as Interim Chief Financial Officer.

 

Your employment is not for a specific term and is terminable at-will.  By signing below you acknowledge that nothing in this letter will be construed in any way to limit the right of the Company to terminate your employment, with or without cause, or for you to terminate your employment with the Company, with or without reason.  Upon a termination of your employment, you will not be eligible for any severance pay or other severance benefits, regardless of the reason for such termination of your employment. During the Term, you will be expected to comply with all of the Company’s policies and procedures in effect from time to time.

 

You expressly promise to abide by all obligations to all other current or former employers and other third parties in the course of performing your services for the Company.  In addition, you promise that you will not provide the Company with any confidential, proprietary or legally protected information belonging to any current or former employer or other third party and in no circumstances will you use or disclose such information in the course of your employment with the Company.  If you have any questions about the ownership of particular documents or other information, you should discuss such questions with your current or former employer(s) before removing or copying the documents or information.

 

Your employment is subject to your entry into, and agreement to abide by the terms of, the enclosed Confidentiality Agreement.

 

We look forward to your contributions to the Company as Interim Chief Financial Officer. Please indicate your agreement with the foregoing by signing and dating below and returning an executed copy of this letter to me.

 

[Signature Page to Follow]

 

2

 

	
 
    	
PROPETRO   HOLDING CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Phillip Gobe
    
	
 
    	
Name:   Phillip Gobe
    
	
 
    	
Title:   Executive Chairman
    

 

 

AGREED AND ACKNOWLEDGED:

 

 

	
/s/ Darin   G. Holderness
    	
 
    
	
Darin G.   Holderness
    	
 
    
	
Date:
    	
October 4,   2019
    	
 
    
			

 

SIGNATURE PAGE TO

LETTER AGREEMENT WITH DARIN G. HOLDERNESSExhibit 10.5

 

October 4, 2019

 

Jeffrey Smith

6804 Executive Court

Midland, Texas 79707

 

Dear Jeff:

 

This letter memorializes the understanding between you and ProPetro Holding Corp. (the “Company”) regarding your role and responsibilities at the Company beginning October 3, 2019 (the “Effective Date”).  As you are aware, you will, as of the Effective Date, transition from serving as the Company’s Chief Financial Officer to serving as the Company’s Chief Administrative Officer, with responsibilities, duties and authority to oversee and manage the following administrative functions, which may include: human resources, information technology, centralized procurement, risk management, and other functions as designated by the board of directors of the Company, from time to time (the “Board”).  You will continue to report to the Chief Executive Officer of the Company in this new role, and your direct reports will be designated by the Board, from time to time.  Following the Effective Date, you will receive an annualized base salary of $425,000 (your “Annual Base Salary”).  Beginning in 2020, you will be eligible to earn an annual cash bonus with a target value of 65% of your Annual Base Salary.  Your annual cash bonus opportunity for 2019 will take into account your position, duties and compensation prior to and following the Effective Date.  As is currently the case, the amount of the annual cash bonus actually paid to you for any given calendar year remains subject to the terms and conditions of the ProPetro Holding Corp. Senior Executive Incentive Bonus Plan, as in effect from time to time and the attainment of the applicable performance targets, as determined in the sole discretion of the compensation committee (the “Compensation Committee”) of the Board.  In addition, the value and terms and conditions of any future awards granted to you under the ProPetro Holding Corp. 2017 Incentive Award Plan will continue to be determined by the Compensation Committee in its sole discretion but the target value of such awards may differ from prior years to reflect the changes in your role and responsibilities as described above.

 

As you know, you and the Company are parties to that certain Employment Agreement, entered into as of April 17, 2013 (as amended, the “Employment Agreement”).  This letter shall be deemed to amend your Employment Agreement, effective as of the Effective Date, to the extent any provision of your Employment Agreement is inconsistent with this letter.  All other provisions of the Employment Agreement shall remain in full force and effect.  In signing below, you hereby explicitly consent to the changes described in this letter, and in return for your continued employment as described above, you hereby waive any and all rights you may have to terminate your employment with the Company or its Affiliates (as such term is defined in the Employment Agreement) for Good Reason (or similar or related definitions) as a result of these changes (including any right to receive any payments or benefits pursuant to the Employment Agreement or any other plan, program, or agreement sponsored or maintained by the Company or any of its Affiliates (collectively, the “Company Plans”) as a result of these changes).  For the avoidance of doubt, execution of this letter will not be deemed to constitute a (i) consent to any future

 

 

modification to your responsibilities, duties or compensation that are not described in this letter (such modifications, if any, the “Future Modifications”) or (ii) waiver of your right, if any, to terminate your employment with the Company or its Affiliates for Good Reason pursuant to the terms of your Employment Agreement or any other Company Plan as a result of any Future Modifications.

 

You further acknowledge that nothing in this letter shall be construed in any way to limit the right of the Company to terminate your employment, with or without cause, or for you to terminate your employment with the Company, with or without reason, nor shall this letter limit the rights of the stockholders of the Company under the Company’s Bylaws.

 

Please indicate your agreement with the foregoing by signing and dating below and returning an executed copy of this letter to me.

 

[Signature Page to Follow]

 

2

 

	
 
    	
PROPETRO   HOLDING CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Phillip Gobe
    
	
 
    	
Name:   Phillip Gobe
    
	
 
    	
Title:   Executive Chairman
    

 

 

AGREED AND ACKNOWLEDGED:

 

 

	
/s/   Jeffrey Smith
    	
 
    
	
Jeffrey   Smith
    	
 
    
	
Date:
    	
October   7, 2019
    	
 
    
			

 

SIGNATURE PAGE TO

LETTER AGREEMENT WITH JEFFREY SMITH

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