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 (date of earliest event reported): March 13, 2020

ProPetro Holding Corp.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (432) 688-0012

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:

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).                                                                                       Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Phillip A. Gobe

On March 13, 2020, Phillip A. Gobe was appointed as Chief Executive Officer of ProPetro Holding Corp. (the “Company” or “ProPetro”) and will no longer serve as the Company’s Executive Chairman. In connection with that appointment, Mr. Gobe will continue to serve as the Company’s principal executive officer (as contemplated by Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and also continue to serve as the Chairman of the board of directors of the Company (the “Board”), a position he has held since July 11, 2019.

There are no arrangements or understandings between Mr. Gobe and any other persons pursuant to which he was selected to serve as the Company’s Chief Executive Officer. There are no family relationships between Mr. Gobe and any director or executive officer of the Company, and Mr. Gobe has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Mr. Gobe will receive an annualized base salary of $800,000 and will be eligible (i) to receive an annual cash bonus with a target value of 100% of his base salary under the Amended and Restated ProPetro Holding Corp. Senior Executive Incentive Bonus Plan (the “Bonus Plan”) (adjusted for 2020 to reflect his position, duties and compensation prior to and following his appointment as Chief Executive Officer), (ii) to participate in the ProPetro Services, Inc. Executive Severance Plan (the “Executive Severance Plan”) as a “Tier 1 Executive” (as defined in the Executive Severance Plan) and (iii) to participate in those benefit plans and programs of the Company available to similarly situated executives. Mr. Gobe also received an equity award consisting of performance share units (“PSUs”) with a grant date target value of approximately $1,320,000 and restricted stock units (“RSUs”) with a grant date value of approximately $880,000, in each case, under the ProPetro Holding Corp. 2017 Incentive Award Plan (the “Incentive Plan”) in connection with his appointment as Chief Executive Officer of the Company.

Dale Redman

On March 13, 2020, Dale Redman informed the Board of his intent to resign from his position as the Chief Executive Officer and as a member of the Board, effective March 13, 2020 (the “Redman Separation Date”). Mr. Redman did not resign as a result of any disagreement with the Company on any matter related to the Company’s operations, policies or practices. In connection with his resignation, on March 13, 2020, the Company and Mr. Redman entered into a separation agreement and release (the “Separation Agreement”) pursuant to which, among other things, Mr. Redman (i) acknowledged his resignation from employment with the Company as of the Redman Separation Date; (ii) agreed to additional restrictive covenants that result in a total of a five-year non-competition and non-solicitation obligation (an increase from the one-year non-competition and three-year non-solicitation obligation set forth in the Employment Agreement by and between Mr. Redman and the Company dated April 17, 2013 and in the award agreements documenting Mr. Redman’s equity awards under the Incentive Plan); and (iii) executed a release of claims in favor of the Company.

Mr. Redman will receive the following severance payments and benefits:

The foregoing description of the Separation Agreement is not complete and is qualified in its entirety to the full text of the Separation Agreement, which is filed herewith as Exhibit 10.1 and incorporated herein by reference.

Jeffrey D. Smith

On March 13, 2020, Jeffrey D. Smith was appointed as a Special Advisor to the Chief Executive Officer and will no longer serve as the Chief Administrative Officer or an executive officer of the Company. Effective as of March 13, 2020, the Company and Mr. Smith entered into a letter agreement (the “Smith Letter Agreement”) memorializing the terms of his role and related matters. Pursuant to the terms of the Smith Letter Agreement, Mr. Smith shall continue to receive an annualized base salary of $425,000 but the Compensation Committee of the Board does not anticipate Mr. Smith receiving any future awards under the Incentive Plan in his new role. Mr. Smith will no longer be eligible to receive an annual cash bonus under the Bonus Plan, including for the 2020 fiscal year. In addition, the Smith Letter Agreement terminated the Employment Agreement by and between Mr. Smith and the Company dated April 17, 2013 (the “Smith Employment Agreement”), effective as of March 13, 2020, except that the restrictive covenants set forth in Section 6 of the Smith Employment Agreement shall continue in full force and effect.

In addition, the Smith Letter Agreement provides Mr. Smith with the following benefits in exchange for his agreement to additional restrictive covenants that result in a total of a five-year non-competition and non-solicitation obligation (an increase from the one-year non-competition and three-year non-solicitation obligation set forth in the Smith Employment Agreement and in the award agreements documenting Mr. Smith’s equity awards under the Incentive Plan):

The foregoing description of the Smith Letter Agreement is not complete and is qualified in its entirety to the full text of the Smith Letter Agreement, which is filed herewith as Exhibit 10.2 and incorporated herein by reference.

Executive Severance Plan

On March 13, 2020, the Board adopted the Executive Severance Plan, pursuant to which certain officers of the Company are eligible to receive severance payments and benefits, as described in more detail below. Additionally, on March 13, 2020, Phillip Gobe entered into a participation agreement (the “Gobe Participation Agreement”) pursuant to the Executive Severance Plan in which he (i) agreed to terminate his letter agreement with the Company, dated October 3, 2019 (the “Gobe Letter Agreement”), provided that certain confidentiality and non-disclosure covenants included in the Gobe Letter Agreement will survive such termination and (ii) became eligible to receive the severance benefits provided for under the Executive Severance Plan, pursuant to the terms and conditions of the Executive Severance Plan.

Participants in the Executive Severance Plan are classified as either a “Tier 1 Executive,” “Tier 2 Executive” or “Tier 3 Executive” (each as defined in the Executive Severance Plan) and will be eligible to receive varying benefits based upon their classification in the event of certain terminations of employment as described below. Currently, Mr. Gobe is the only participant in the Executive Severance Plan classified as a Tier 1 Executive.

Upon a termination without “Cause” or a resignation for “Good Reason” (each as defined in the Executive Severance Plan), participants in the Executive Severance Plan will be eligible to receive the following benefits:

Upon a termination without Cause or a resignation for Good Reason within 12 months following a “Change in Control” (as defined in the Executive Severance Plan), participants in the Executive Severance Plan will be eligible to receive the following benefits:

Additionally, if a participant’s employment with the Company terminates as a result of his or her death or “Disability” (as defined in the Executive Severance Plan), then the participant will be eligible to receive the following benefits:

In order to receive any of the foregoing severance benefits under the Executive Severance Plan, a participant must timely execute (and not revoke) a release of claims in favor of the Company and its affiliates. Further, the Executive Severance Plan requires continued compliance with certain confidentiality, non-solicitation and non-disparagement covenants. If the severance benefits under the Executive Severance Plan would trigger an excise tax for a participant under Section 4999 or Section 280G of the Internal Revenue Code of 1986, as amended, the Executive Severance Plan provides that the participant’s severance benefits will be reduced to a level at which the excise tax is not triggered, unless the participant would receive a greater amount without such reduction after taking into account the excise tax and other applicable taxes.

The foregoing description of the Executive Severance Plan and the participation agreements thereunder is not complete and is qualified in its entirety by reference to the full text of the Executive Severance Plan, the form of participation agreement for the Executive Severance Plan and the Gobe Participation Agreement, which are attached as Exhibits 10.3, 10.4 and 10.5 to this Current Report on Form 8-K and incorporated in this Item 5.02 by reference.

Item 7.01 Regulation FD Disclosure.

On March 16, 2020, the Company issued a press release announcing the management changes discussed herein. A copy of the press release is furnished as Exhibit 99.1 hereto.

The information furnished with this report, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 8.01 Other Events.

In connection with performing additional procedures to position the Company’s principal executive and principal financial officers to be in a position to certify the Company’s future filings with the Securities and Exchange Commission (“SEC”), the Company discovered that its former chief executive officer entered into a pledge agreement covering all of the Company’s common stock owned by him at that time as collateral for a personal loan in January 2017, in violation of the shareholders agreement then in place, and the Company believes the pledge agreement remains in effect. This pledge was not appropriately disclosed to the Company and therefore was not disclosed in the Company’s prior SEC filings that included management share ownership. The Company’s former chief executive officer sold 370,370 shares of the Company’s common stock in the Company’s initial public offering in March 2017. The Company formally adopted its Insider Trading Compliance Policy (“Insider Trading Policy”) in March 2017, which prohibits pledging the Company’s securities as collateral to secure loans. The Company also believes that, in 2018 in connection with another personal loan, its former chief executive officer executed a share pledge that was subsequently replaced with a negative pledge with respect to all of the Company’s common stock owned by him at that time or acquired thereafter and engaged in other inappropriate conduct in connection with these personal loans. The Company also believes that it did not appropriately disclose the 2018 pledge in the Company’s prior SEC filings that included management share ownership.

SIGNATURES

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.