FLOTEK INDUSTRIES INC/CN/ appointed Dr. Ryan Ezell as new CEO

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.


On June 7, 2023, Flotek Industries, Inc. (the "Company") announced that the Board of Directors of the Company (the "Board") has appointed Dr. Ryan Ezell, the Company's existing President, to serve as its Chief Executive Officer, effective as of June 6, 2023. Dr. Ezell was also appointed to the Board effective as of June 8, 2023. Also on June 7, 2023, the Company announced that Harsha V. Agadi ceased to serve as Interim Chief Executive Officer of the Company, also effective as of June 6, 2023, but will remain on the Board and assume the role of Non-Executive Chairman effective as of June 8, 2023.


Dr. Ezell, age 44, has served as President of the Company since January 20, 2023. Prior to his appointment as President, Dr. Ezell has held various roles with the Company, including Chief Operating Officer from March 2022 to January 2023, President, Chemistry Technologies from August 2020 to March 2022, Senior Vice President, Operations from March 2020 to August 2020, and Vice President, Operations from August 2019 to March 2020. Prior to joining the Company, Dr. Ezell served as Vice President, Baroid Drilling Fluids for Halliburton from May 2006 to July 2019. Mr. Ezell holds a Ph.D in Polymer Science from the University of Southern Mississippi and a B.S. in Chemistry from Millsaps College.


In connection with his appointment as Chief Executive Officer, the Company and Dr. Ezell have entered into an employment agreement, pursuant to which Dr. Ezell will receive an annual base salary of $550,000 and will be eligible for an annual bonus with a target amount equal to 100% of his base salary, including an annual bonus for 2023 based on prorated annual base salary. Dr. Ezell will be eligible to receive annual awards under the Company's long-term incentive plan as may be in effect for the Company's executives from time to time and will be eligible to participate in the Company's benefit plans and programs for similarly situated executives. 


In addition, under his employment agreement, in the event of his termination "for convenience" by the Company or for Good Reason, as defined under his employment agreement, by Dr. Ezell, subject to his execution of a customary release, Dr. Ezell will be eligible to receive a severance benefit of 18 months' base salary, any earned but unpaid annual bonus for the calendar year immediately preceding the termination, a pro-rata portion of his annual bonus for the calendar year in which he is terminated, and reimbursement of the difference between the amount Dr. Ezell pays for COBRA premiums and the amount similarly situated employees of the Company would pay for such coverage for up to 18 months, as well as the continued vesting of all unvested time-vested and time-based equity awards (pursuant to their vesting schedules). In the event of an applicable Change of Control Termination, as defined under his employment agreement, subject to his execution of a customary release, Dr. Ezell will be entitled to receive a severance benefit of 18 months' base salary, any earned but unpaid annual bonus for the calendar year preceding the termination, a pro-rata portion of his annual bonus for the calendar year in which he is terminated, and reimbursement of the difference between the amount Dr. Ezell pays for COBRA premiums and the amount similarly situated employees of the Company would pay for such coverage for up to 18 months. Further, in an applicable Change of Control Termination, Dr. Ezell's unvested time-vested restricted stock awards would automatically vest, his unvested time-based options would vest, and certain of his unvested performance-vested awards would also vest subject to certain conditions. In the event of his termination due to death or Disability, as defined under his employment agreement, subject to the execution of a customary release by Dr. Ezell (or his estate), Dr. Ezell will be eligible to receive any earned but unpaid annual bonus for the calendar year immediately preceding the termination, a pro-rata portion of his annual bonus for the calendar year in which he is terminated, and reimbursement of the difference between the amount Dr. Ezell pays for COBRA premiums and the amount similarly situated employees of the Company would pay for such coverage for up to 18 months, and Dr. Ezell's unvested time-vested restricted stock awards would automatically vest, his unvested time-based options would vest, and certain of his unvested performance-vested awards would also vest subject to certain conditions.


There is no arrangement or understanding between Dr. Ezell and any other person pursuant to which Dr. Ezell was selected as an officer or director of the Company. There are no family relationships between Dr. Ezell and any of our directors or executive officers. Dr. Ezell has no direct or indirect material interest in any transaction that requires disclosure pursuant to Item 404(a) of Regulation S-K.


The foregoing summary of Dr. Ezell's employment agreement does not purport to be a complete description of the employment agreement and is qualified in its entirety by reference to the full text of the employment agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.


On June 7, 2023, the Company finalized the share price performance condition with respect to the performance-based stock options to be granted to Bond Clement, the Company's Chief Financial Officer, in connection with his employment. As a result, the Company granted Mr. Clement an option to purchase 371,901 shares of the Company's common stock at an exercise price of $0.62 per share. The option will vest with respect to 100% of such shares on the first date on which the average closing price per share of the Company's common stock for the 30 consecutive trading days immediately preceding such date equals or exceeds $3.00 per share.


The foregoing summary of Mr. Clement's option does not purport to be a complete description of the option and is qualified in its entirety by reference to the full text of the stock option agreement, a copy of which is attached hereto as Exhibit 10.2 and incorporated herein by reference.