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NOTICE OF 20212024 ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 3, 20212024
The 20212024 Annual Meeting of Stockholders (the “Annual Meeting”) of Nine Energy Service, Inc. (the “Annual Meeting”“Company,” “we” and “our”) will be held at 8:3000 a.m., Central Time, on May 3, 2021, via a live webcast that can be accessed2024, at https://web.lumiagm.com/238810512 using the password “nine2021” and control number on your proxy card,2001 Kirby Drive, Suite 200, Houston, Texas 77019, for the following purposes:
1. To elect the three nominees for Class III Directors named in the accompanying proxy statement,directors to serve until the 2024Company’s 2027 Annual Meeting of Stockholders or until their respective successors are elected and qualified;
2. To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021;2024;
3. To approve, on an advisory basis, the First Amendment tocompensation of our named executive officers (“say-on-pay”);
4. To approve, on an advisory basis, the 2011 Stock Incentive Plan;frequency of future say-on-pay advisory votes; and
4.5. To transact such other business as may properly come before the meetingAnnual Meeting or any adjournment or postponement thereof.
OurThe Board of Directors of the Company (the “Board”) recommends you vote (i) “FOR” the election of each of the nominees named in the accompanying proxy statement to the Board, (ii) “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent auditors andregistered public accounting firm for the fiscal year ending December 31, 2024, (iii) “FOR” the approval, on an advisory basis, of the First Amendment tocompensation of our named executive officers and (iv) “FOR” the 2011 Stock Incentive Plan.option of “1 YEAR” as the preferred frequency for future say-on-pay advisory votes.
The Board of Directors has fixed March 5, 20216, 2024 as the record date for determining stockholders entitled to receive notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof. Only stockholders of record at the close of business on that date will be entitled to notice of, and to vote at, the Annual Meeting.Meeting or any adjournment or postponement thereof. The Annual Meeting will begin promptly at 8:3000 a.m., Central Time.
We are pleased this year to conduct the Annual Meeting solely online via the Internet through a live webcast and online stockholder tools. We are conducting the Annual Meeting solely online due to the continuing impact of and uncertainty surrounding the coronavirus pandemic and to support the health and well-being of our stockholders, however, we also believe a virtual format facilitates stockholder attendance and participation by leveraging technology to allow us to communicate more effectively and efficiently with our stockholders. This format empowers stockholders around the world to participate Check-in will begin at no cost. We have designed the virtual format to enhance stockholder access and participation and protect stockholder rights.
If you were a stockholder at the close of business on March 5, 2021, you may access the Annual Meeting via a webcast that can be accessed at https://web.lumiagm.com/238810512 using the password “nine2021” and control number on your proxy card. If you hold your shares through a bank, broker or other holder of record,7:45 a.m., Central Time, and you plan to vote duringshould allow ample time for the meeting, you must first contact your bank, broker or agent to obtain a legal proxy, then register your legal proxy with American Stock Transfer & Trust LLC, the Company’s stock transfer agent, prior to the meeting. The stock transfer agent will then provide you with a control number that you can use to vote at https://web.lumiagm.com/238810512. Requests to register your legal proxy must be received by 5:00 p.m., Eastern Time, on April 26, 2021, and must be labeled as “Legal Proxy.” These requests should be directed in writing to the stock transfer agent at the following mailing address, e-mail address or facsimile number: American Stock Transfer & Trust Company LLC, Attn: Proxy Tabulation Department, 6201 15th Avenue, Brooklyn, NY 11219; E-mail: proxy@astfinancial.com; Facsimile No.: 718-765-8730.
Your vote is very important. Regardless of whether you plan to attend the Annual Meeting, we hope you will vote as soon as possible. You may vote your shares over the Internet, by telephone or by submitting your proxy or voting instruction card forpossible in advance of the Annual Meeting by completing, signing, dating and returning your proxy or voting instruction cardone of the methods described in the pre-addressed envelope you will receive.accompanying proxy statement.
By Order of the Board of Directors
Ann G. Fox
President, Chief Executive Officer and Director
Houston, Texas
March 8, 20212024
Important Notice Regarding the Availability of Proxy Materials for the Nine Energy Service, Inc.
Stockholder Meeting to be Held on May 3, 20212024:
The Proxy Materials,proxy materials, including our 20202023 Annual Report, are available at https://investor.nineenergyservice.com.
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PROXY STATEMENT
2024 ANNUAL MEETING OF STOCKHOLDERS
OF
NINE ENERGY SERVICE, INC.
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 3, 20212024 at 8:00 a.m., Central Time
GENERAL INFORMATION
This Proxy Statementproxy statement (this “Proxy Statement”) contains information related to the Nine Energy Service, Inc. 20212024 Annual Meeting of Stockholders (the “Annual Meeting”). of Nine Energy Service, Inc. (either individually or together with its subsidiaries, as the context requires, the “Company,” “Nine,” “we,” “us” and “our”) is.
On or about March 15, 2024, we will send you a Delaware corporation that was incorporated in February 2013. Nine is an oilfield services company that provides services integralNotice of Internet Availability of Proxy Materials, which will provide instructions on how to view our proxy materials over the completion of unconventional wells throughInternet and, if desired, request a full rangeset of toolsprinted materials by mail. The Securities and methodologiesExchange Commission (the “SEC”) permits companies to send such a notice instead of a full printed set of proxy materials. We believe this process expedites the delivery of proxy materials, ensures that proxy materials remain easily accessible to our stockholders, saves costs and provides a rangereduces the environmental impact of production enhancement and well workover services. Our principal offices are located at 2001 Kirby Drive, Suite 200, Houston, TX 77019.the Annual Meeting.
Meeting Date and Location
The Annual Meeting will be held at 8:3000 a.m., Central Time, on May 3, 2021, via a live webcast that can be accessed2024, at https://web.lumiagm.com/238810512 using the password “nine2021”our principal executive offices, located at 2001 Kirby Drive, Suite 200, Houston, Texas, 77019.
Cameras, recording devices and control number on your proxy card. This Proxy Statement is first being made available to our stockholders beginning on March 8, 2021.
You can find supplemental information about the Annual Meeting at https://investor.ninenergyservice.com.
Online Meeting
Weother electronic devices are pleased this year to conduct the Annual Meeting solely online via the Internet through a live webcast and online stockholder tools. We are conducting the Annual Meeting solely online due to the continuing impact of and uncertainty surrounding the coronavirus pandemic and to support the health and well-being of our stockholders, however, we also believe a virtual format facilitates stockholder attendance and participation by leveraging technology to allow us to communicate more effectively and efficiently with our stockholders. This format empowers stockholders around the world to participate at no cost. We have designed the virtual format to enhance stockholder access and participation and protect stockholder rights. For example:
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Meeting Admission
You are entitled to attend and participate in the virtual Annual Meeting only if you were a stockholder as of the close of business on March 5, 2021 or if you hold a valid proxy for the Annual Meeting. If you are not a stockholder, you may still view the meeting after the recording has been posted on our Investor Relations website.
Attending Online. If you plan to attend the Annual Meeting online, please be aware of what you will need to gain admission, as described below. If you do not comply with the procedures described here for attending the Annual Meeting online, you will not be able to participate in the Annual Meeting.
If you were a stockholderprohibited at the close of business on March 5, 2021, you may access the Annual Meeting via a webcast that can be accessed at https://web.lumiagm.com/238810512 using the password “nine2021” and control number on your proxy card. If you hold your shares through a bank, broker or other holder of record, and you plan to vote during the meeting, you must first contact your bank, broker or agent to obtain a legal proxy, then register your legal proxy with American Stock Transfer & Trust LLC, the Company’s stock transfer agent, prior to the meeting. The stock transfer agent will then provide you with a control number that you can use to vote at https://web.lumiagm.com/238810512. Requests to register your legal proxy must be received by 5:00 p.m., Eastern Time, on April 26, 2021, and must be labeled as “Legal Proxy.” These requests should be directed in writing to the stock transfer agent at the following mailing address, e-mail address or facsimile number: American Stock Transfer & Trust Company LLC, Attn: Proxy Tabulation Department, 6201 15th Avenue, Brooklyn, NY 11219; E-mail: proxy@astfinancial.com; Facsimile No.: 718-765-8730.
Stockholders of record—those holding shares directly with American Stock Transfer and Trust Company LLC—will be on a list maintained by the inspector of elections.
“Beneficial” or “street name” stockholders—those holding shares through a broker, bank, or other nominee.
We encourage you to access the meeting prior to the start time. Please allow ample time for online check-in, which will begin at 8:30 a.m., Central Time. We will have technicians ready to assist if you have difficulties accessing the virtual meeting during the check-in time or during the Annual Meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or course of the Annual Meeting, please call 929-283-0369.
Asking Questions. Stockholders have multiple opportunities to submit questions for the Annual Meeting. Stockholders who wish to submit a question in advance may do so at the Company’s website https://investor.nineenergyservice.com/information-request/contact-us. Stockholders also may submit questions live during the meeting. We plan to reserve at least 20 minutes for stockholder questions to be read and answered by Company personnel during the meeting. Stockholders can also access copies of this Proxy Statement and annual report at our Annual Meeting website. In submitting questions, please note that we will only address questions that are germane to the matters being voted on at our Annual Meeting.
Vote Before or During the Meeting
Whether you are a stockholder of record or a beneficial stockholder, you may direct how your shares are voted without participating in the Annual Meeting. Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting by one of the following methods (i) over the internet at www.voteproxy.com, (ii) by telephone at 1-800-776-9437 in the United States (or 1-718-921-8500 from foreign countries from any touch-tone telephone), or (iii) by completing, signing and returning the proxy card previously sent to you with the proxy materials.
Voting online during the meeting will replace any previous votes, and the online polls will close at approximately 11:59 pm Central Time on May 2, 2021.
Outstanding SecuritiesSecurities; Record Date
Only holders of record of our common stock, par value $0.01 per share, at the close of business on March 5, 2021,6, 2024, the record date, will be entitled to notice of, and to vote at, the Annual Meeting. On that date, we had 31,555,32135,324,861 shares of common stock outstanding and entitled to vote. Each share of our common stock is entitled to one vote for each director nominee and one vote for each other item to be voted on at the Annual Meeting.
Proxy Voting
Shares that are properly voted via the Internet or by telephone or for which proxy cards are properly executed and returned will be voted at the Annual Meeting in accordance with the directions given or, in the absence of directions, will be voted in accordance with the Board’s recommendations of the Company’s Board of Directors (the “Board” or the “Board of Directors”) as follows: (i) “FOR” the election of each of the nominees named herein to the Board named herein,as a Class III director, (ii) “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent auditors andregistered public accounting firm for the fiscal year ending December 31, 2024, (iii) “FOR” the approval, on an advisory basis, of the First Amendment tocompensation of our Named Executive Officers (as defined in “Executive and Director Compensation”) as described in this Proxy Statement (“say-on-pay”) and (iv) “FOR” the 2011 Stock Incentive Plan.option of “1 YEAR” as the preferred frequency for future say-on-pay advisory votes. It is not expected that any additional matters will be brought before the Annual Meeting, but if other matters are properly presented, the persons named as proxies in the proxy card or their substitutes will vote in their discretion on such matters.
Voting via the Internet or by telephone helps save money by reducing postage and proxy tabulation costs. To vote by any of these methods, read this Proxy Statement, have your proxy card or voting instruction form in hand, and follow the instructions below for your preferred method of voting. Each of these voting methods is available 24 hours per day, seven days per week.
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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
What isIs the Purpose of the Annual Meeting?
At the Annual Meeting, our stockholders will consider and vote upon the following matters:
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Proposal 1: to elect three Class III directors to serve until the Company’s 2027 Annual Meeting of Stockholders and their respective successors are elected and qualified;
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Proposal 2: to ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2024;
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Proposal 3: to approve, on an advisory basis, the compensation of our Named Executive Officers; and
Proposal 4: To approve, on an advisory basis, the frequency of future say-on-pay advisory votes.
We will also consider and vote upon any other business that is properly presented at the Annual Meeting (or any adjournments or postponements thereof). In addition, members
How Does the Board of Directors Recommend That I Vote?
The Board unanimously recommends that our stockholders vote:
Proposal 1: “FOR” the election of each of the nominees named herein to the Board as a Class III director;
Proposal 2: “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024;
Proposal 3: “FOR” the approval, on an advisory basis, of the compensation of our management team will report on our businessNamed Executive Officers as described in this Proxy Statement; and financial performance during
Proposal 4: “FOR” the year ended December 31, 2020, and respond to your questions regardingoption of “1 YEAR” as the same.preferred frequency for future say-on-pay advisory votes.
Who isIs Entitled to Vote at the Annual Meeting?
Only stockholders asat the close of business on March 6, 2024, the record date, are entitled to attend the Annual Meeting.Meeting in person. Seating is limited, and admission to the Annual Meeting will be on a first-come, first-served basis.
Stockholders of Record. If your shares are registered directly in your name with American Stock Transfer & Trust Company, LLC, our transfer agent, you are considered, with respect to those shares, the stockholder of record. If you are a stockholder of record or an appointed proxyholder of aAs the stockholder of record, you may accesshave the right to grant your voting proxy directly or to vote in person at the Annual Meeting. If you own common stock directly in the Company as of the record date, your name will be on a list and you will be able to gain entry to the Annual Meeting viawith a webcast that can be accessed at https://web.lumiagm.com/238810512 using the password “nine2021” and control number on your proxy card. You may vote during the meeting by following the instructions that will be available on the virtual meeting website during meeting.government-issued photo identification, such as a driver’s license, state-issued ID card or passport.
Street Name Stockholders. If your shares are held in a stock brokerage account or through a bank, broker or other nominee, you are considered the beneficial owner of shares held in “street name” (that is, shares held in the name of your broker, bank or other nominee) and your broker, bank or other nominee (or, Cede & Co., as the case may be) is considered the stockholder of record. IfAs the beneficial owner, you hold your shares in “street name,” and you planhave the right to vote during the meeting, you must first contactdirect your bank, broker or agentother nominee how to obtainvote and are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the Annual Meeting unless you obtained a signed legal proxy then register yourfrom the stockholder of record giving you the right to vote the shares.
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Entities. If you are the representative of an entity that owns common stock of the Company, you must present a government-issued photo identification, evidence that the entity has authorized you to act as its representative at the Annual Meeting and, if the entity is a street name stockholder, proof of the entity’s beneficial stock ownership as of the record date. Each entity that owns common stock of the Company may appoint only one representative to attend on its behalf.
Non-Stockholders. If you are not a stockholder of the Company and are not the representative of an entity that owns common stock of the Company, you will be entitled to admission only if you are a proxy holder attending in lieu of a stockholder of the Company. To gain entry, you must present a government-issued photo identification and either a valid proxy from a stockholder of record authorizing you to vote the stockholder’s shares or, if you are a proxy holder for a street name stockholder, a valid legal proxy with American Stock Transfer & Trust LLC,from the Company’s stock transfer agent, prior torecord holder or the meeting. The stock transfer agent will then providebank, broker or other nominee that holds shares on behalf of the street name stockholder and, if the legal proxy does not name you, with a control numberproof that you can use to vote at https://web.lumiagm.com/238810512. Requests to register your legalare the street name stockholder’s valid proxy must be received by 5:00 p.m., Eastern Time,holder. Only one proxy holder may attend on April 26, 2021, and must be labeled as “Legal Proxy.” These requests should be directed in writing tobehalf of a stockholder of the stock transfer agent at the following mailing address, e-mail address or facsimile number: American Stock Transfer & Trust Company LLC, Attn: Proxy Tabulation Department, 6201 15th Avenue, Brooklyn, NY 11219; E-mail: proxy@astfinancial.com; Facsimile No.: 718-765-8730.Company.
How Many Votes Can I Cast?
You are entitled to one vote for each share of our common stock you owned on the record date on each matter presented at the Annual Meeting.
How doDo I Vote My Shares?
Stockholders of Record. If you are a stockholder of record, you may vote your shares or submit a proxy to have your shares voted by one of the following methods:
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By Internet. You may submit a proxy electronically on the Internet by following the instructions on the proxy card |
By Telephone. You may submit a proxy by telephone (from the U.S. and Canada only) by using the toll-free number listed on the proxy card |
By Mail. You may indicate your vote by completing, signing and dating the proxy card |
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Street Name Stockholders. If your shares are held in “street name” (that is, in the name of your broker, bank or other nominee), you are considered the beneficial owner of shares held in “street name” (or the “street name stockholder”) and have the right to direct the stockholder of record how to vote by following one of the following methods:
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Can I Revoke my Proxy?My Proxy or Change My Vote?
Stockholders of Record. If you own common stockare a stockholder of record, you may revoke your proxy or change your voting instructionsvote at any time before your shares are voted at the Annual Meeting by delivering to the Secretary of the Company a written notice of revocation or a duly executed proxy (via the Internet or telephone or by returning a proxy card) bearing a later date or by attending the virtual Annual Meeting and voting in person. Attending the Annual Meeting will not automatically revoke your proxy unless you vote again during the meeting.Annual Meeting or specifically request that your prior proxy be revoked.
A stockholder owning common stockStreet Name Stockholders. If your shares are held in street name may revoke or“street name” and you wish to change any of your previously provided voting instructions, you must follow the procedures on the voting instruction form provided to you by contactingyour broker, bank or other nominee.
Will My Shares Be Voted if I Do Not Provide My Proxy or Voting Instructions?
Stockholders of Record. If you are a stockholder of record, your shares will not be voted if you do not provide a proxy (via the Internet or telephone or by signing and returning a proxy card). Proxy cards that are signed and returned, but do not include voting instructions, will be voted by the proxy holders as recommended by the Board of Directors.
Street Name Stockholders. If your shares are held in “street name” and you do not provide voting instructions to your broker, bank brokerage firm, or other nominee holdingin advance of the Annual Meeting, your shares or by obtainingmay be voted under certain circumstances. New York Stock Exchange (“NYSE”) rules provide that the organization that holds your shares may generally vote on “routine” proposals, such as the ratification of the selection of the independent registered public accounting firm. Where a legal proxyproposal is not “routine,” an organization that has not received instructions from such institutionits clients does not have discretion to vote its clients’ uninstructed shares on that proposal, and voting during the meetingunvoted shares are referred to as “broker non-votes.” The other proposals to be considered at the virtual Annual Meeting.Meeting, including the election of directors, are considered non-routine matters, and therefore brokers, banks and other nominees cannot exercise discretionary authority regarding those proposals for beneficial owners who have not returned instructions to them.
What isIs a Quorum?
A majority of the issued and outstanding shares of our common stock entitled to vote, present onlinein person or represented by proxy at the Annual Meeting, constitutes a quorum for the transaction of business at the Annual Meeting. Abstentions, withheld votes and broker non-votes will be included in determining the presence of a quorum at the Annual Meeting.
What Vote isIs Required to Approve Each Proposal?Elect Directors?
Directors are elected by a “plurality” voting standard, which means that the three nominees for director who receive the greatest number of votes cast at the meetingAnnual Meeting will be elected as directors. Cumulative voting is not permitted in the election of directors. You may vote “for” or “withhold” authority to vote for each of the nominees for the Board. Because the three nominees for director who receive the greatest number of votes cast at the meetingAnnual Meeting will be elected as directors abstentionsand because “withhold” votes and broker non-votes are not considered votes cast for the foregoing purpose, “withhold” votes and broker non-votes will not affect the outcome of the voting on director elections.
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What Vote Is Required to Ratify the elections.
For all other matters proposedApproval of the proposal to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for a vote at the Annual Meeting,fiscal year ending December 31, 2024 requires the affirmative vote of athe holders of the majority of the outstanding shares of common stock present onlinein person or represented by proxy at the Annual Meeting and entitled to vote on the matter. You may vote “for” or “against” this proposal, or you may abstain from voting on this proposal. Abstentions will be counted as present in person or represented by proxy and entitled to vote and, thus, will have the same effect as votes against this proposal. We believe this proposal is a “routine” matter, and as a result, we do not expect there to be any broker non-votes for this proposal.
What Vote Is Required to Approve, on an Advisory Basis, the Compensation of Our Named Executive Officers?
Approval, on an advisory basis, of the compensation of our Named Executive Officers requires the affirmative vote of the holders of the majority of the shares of common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter. You may vote “for” or “against” this proposal, or you may abstain from voting on this proposal. Abstentions will be counted as present in person or represented by proxy and entitled to vote and, thus, will have the same effect as votes against this proposal. Broker non-votes will not affect the outcome of the vote on this proposal. Although this advisory vote to approve the compensation of our Named Executive Officers is non-binding, the Nominating, Governance and Compensation Committee of the Board (the “Nominating, Governance and Compensation Committee”) will review and consider the voting results when making future decisions regarding our executive compensation program.
What Vote is Required to Approve, on an Advisory Basis, the Frequency of Future Say-on-Pay Advisory Votes?
You may vote for a frequency of every “one year,” “two years” or “three years” for future “say-on-pay” advisory votes, or you may abstain from voting on this proposal. The frequency receiving the affirmative vote of the majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter is requiredwill be deemed to be the recommendation of our stockholders. If no frequency receives such majority support, the frequency that receives the most votes will be deemed to be the recommendation of our stockholders. Abstentions and broker non-votes will not be voted either for or against any frequency and, accordingly, will not affect the outcome. Although this advisory vote to approve the matter. For these matters, abstentions will count asfrequency of future “say-on-pay” advisory votes “against.”
The recommendations ofis non-binding, the Board are set forth togetherand the Nominating, Governance and Compensation Committee will review and consider the voting results when making a determination concerning the frequency of future say-on-pay advisory votes.
Whom Should I Contact with the description of each item in this Proxy Statement. In summary, the Board recommends a vote as follows:
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Whom should I contact with questionsQuestions about the Proxy Materials or the Annual Meeting?
If you have any questions about the Proxy Materialsproxy materials or the Annual Meeting, please contact Nine Energy Service, Inc. at 2001 Kirby Drive, Suite 200, Houston, Texas 77019, Attn: Corporate Secretary or by email at Investors@nineenergyservice.com.
PROPOSAL 1—1 — ELECTION OF DIRECTORS
The Board is currently comprised of nineeight members. Our directors are divided into three classes, serving staggered three-year terms with three members in each class.designated as Class I, Class II and Class III, directors serve until our annual meetings of stockholdersserving staggered three-year terms, with two members in 2022, 2023 and 2021, respectively or until his or her successor is elected and qualified, unless ended earlier due to his or her death, resignation or removal from office. David C. Baldwin, Curtis F. Harrell and Darryl K. Willis are assigned to Class I and Scott E. Schwinger, Gary L. Thomasthree members in each of Class II and Andrew L. Waite are assignedClass III. At each annual meeting of stockholders, directors will be elected to Class II. succeed the class of directors whose terms have expired.
Mark E. Baldwin, Ernie L. Danner and Ann G. Fox are assigned to Class III and are standing for election at the Annual Meeting. At each annual meetingCurtis F. Harrell and Darryl K. Willis are assigned to Class I and will stand for election at our 2025 Annual Meeting of stockholders, directorsStockholders, and Scott E. Schwinger, Gary L. Thomas and Andrew L. Waite are assigned to Class II and will be elected to succeed the classstand for election at our 2026 Annual Meeting of directors whose terms have expired.Stockholders.
The Board, based on the recommendation of the Nominating, Governance and Compensation Committee, proposed that the following three nominees be elected as Class III directors at the Annual Meeting, each of whom if elected will hold office until our annual meeting2027 Annual Meeting of stockholders in 2024Stockholders and his or until hisher successor shall have been elected and qualified:qualified, unless ended earlier due to his or her death, resignation or removal from office:
| • | Mark E. Baldwin |
| • | Ernie L. Danner |
| • | Ann G. Fox |
Each of the nominees is currently a director of the Company. Biographical information for each nominee is contained in the “Directors and Executive Officers” section below.
Although the Board expects that the three nominees will be willing and available to serve as directors, if any of them should be unwilling or unable to serve, the Board may decrease the size of the Board or may designate substitute nominees, and the proxies will be voted in favor of any such substitute nominees.
Vote Required
The election of directors in this Proposal No. 1 requires the affirmative vote of a plurality of the votes validly cast at the election. Neither abstentions nor broker non-votes will have any effect on the outcome of voting on director elections.
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH NOMINEE.
DIRECTORS AND EXECUTIVE OFFICERS
After the Annual Meeting, assuming the stockholders elect the nominees of the Board as set forth in “Proposal 1—Election of Directors” above, the executive officers of the Company and the Company’s Board will be the following:
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(1) Member of the Audit Committee.
(2) Member of the Nominating, Governance and Compensation Committee.
In evaluating the nominees for the Board of Directors, the Board and the Nominating, Governance and Compensation Committee took into account the qualities they seek for directors, as discussed below under “Corporate Governance” and “Board Meetings and Committees,Governance,” and the directors’ individual qualifications, skills, and background that enable the directors to effectively and productively contribute to the Board’s oversight of the Company. These individual qualifications and skills are included below in each nominee’s biography.biography, which is contained in the “Directors and Executive Officers” section below.
Each of the nominees has indicated his or her willingness to continue to serve as a member of the Board, if re-elected. If, however, any of them should be unwilling or unable to serve (a contingency that the Board does not expect to occur), the Board may decrease the size of the Board or may designate substitute nominees, and the proxies will be voted in favor of any such substitute nominees.
Vote Required
Directors are elected by a “plurality” voting standard, which means that the three nominees for director who receive the greatest number of votes cast at the Annual Meeting will be elected as directors. You may vote “for” or “withhold” authority to vote for each of the nominees for the Board. Because the three nominees for director who receive the greatest number of votes cast at the Annual Meeting will be elected as directors and because “withhold” votes and broker non-votes are not considered votes cast for the foregoing purpose, “withhold” votes and broker non-votes will not affect the outcome of the voting on director elections.
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH NOMINEE.
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DIRECTORS AND EXECUTIVE OFFICERS
Immediately after the Annual Meeting, assuming our stockholders elect the nominees of the Board as set forth in “Proposal 1—Election of Directors” above, the executive officers of the Company and the Company’s Board will be the persons listed below. There are no family relationships among any of our directors or executive officers, except that Mr. David Baldwin and Mr. Mark Baldwin are brothers.
| Age | Position | Director Class | Independent | ||||||||||||||||
Ann G. Fox | 47 | President, Chief Executive Officer and Director | Class III | No | ||||||||||||||||
Ernie L. Danner | 69 | Chairman of the Board | Class III | Yes | ||||||||||||||||
Mark E. Baldwin(1) | 70 | Director | Class III | Yes | ||||||||||||||||
Curtis F. Harrell(1)(2) | 60 | Director | Class I | Yes | ||||||||||||||||
Scott E. Schwinger(2) | 59 | Director | Class II | Yes | ||||||||||||||||
Gary L. Thomas(1)(2) | 74 | Director | Class II | Yes | ||||||||||||||||
Andrew L. Waite | 63 | Director | Class II | Yes | ||||||||||||||||
Darryl K. Willis(1)(2) | 54 | Director | Class I | Yes | ||||||||||||||||
David Crombie | 50 | Executive Vice President and Chief Operating Officer | ||||||||||||||||||
Guy Sirkes | 38 | Senior Vice President and Chief Financial Officer | ||||||||||||||||||
Theodore R. Moore | 46 | Senior Vice President, General Counsel and Secretary | ||||||||||||||||||
(1) Member of the Audit Committee.
(2) Member of the Nominating, Governance and Compensation Committee.
 | Ann G. Fox, President, Chief Executive Officer and Director (Class We believe that Ms. Fox’s leadership experience, industry experience and deep knowledge of our business and our customers make her well qualified to serve as | |
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| Ernie L. Danner, Director (Class
We believe that Mr. Danner’s extensive leadership, financial and operational experience in the energy industry, particularly with respect to his leadership involvement in Beckman, | |
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| ||
 | Mark E. Baldwin, Director (Class
We believe that Mr. Baldwin’s financial and operational experience with public companies and his extensive knowledge of the energy industry make him well qualified to serve as a | ||
| Curtis F. Harrell, Director (Class
We believe that Mr. Harrell’s extensive experience as an executive officer of other oil and natural gas companies, and his strategic, operational and financial expertise in the oil and natural gas industry make him well qualified to serve as a | |
| Scott E. Schwinger, Director (Class
We believe that Mr. Schwinger’s broad experience as an executive officer and proven financial expertise make him well qualified to serve as a | |
| Gary L. Thomas, Director (Class
We believe that Mr. Thomas’ experience in the oil and gas industry, the perspective he brings as a result of his long tenure as an executive of a public company, and his valuable insight as a result of his long history as a customer for the oilfield services industry make him well qualified to serve as a | |
| Andrew L. Waite, Director (Class We believe that Mr. Waite’s extensive public company experience in the energy sector, in particular in the oilfield services industry, and his experience in identifying strategic growth trends in the energy industry and evaluating potential transactions make him well qualified to serve | |
| Darryl K. Willis, Director (Class
Mr. Willis’ extensive technical expertise, leadership experience and impressive track record of leading businesses to growth with a focus on technology in the industry make him well qualified to serve as a member of the Board of Directors. | |
| David Crombie, Executive Vice President and Chief Operating Officer. Mr. Crombie currently serves as Executive Vice President and Chief Operating Officer of the Company. Prior to serving in this position, Mr. Crombie served as President, Completion Solutions and as an Executive Vice President of the Company from February 2017 to January 2019. Mr. Crombie served as President, US Wireline and Cementing and was an Executive Vice President of the Company from December 2013 to February 2017. Mr. Crombie joined the Company from Crest Pumping Technologies, LLC, which he founded and guided to success as President. Before starting Crest, Mr. Crombie was Vice President of Operations and Sales for Pumpco Energy Services, a wholly-owned subsidiary of Complete Production Services (now part of Superior Energy Services) from 2000 to 2012. At Pumpco, he oversaw stimulation and cementing services in prolific, unconventional plays throughout the continental United States. Prior to Pumpco, Mr. Crombie was employed by Halliburton Energy Services from 1994 to 2000. Since 1994, Mr. Crombie has worked in both cementing and stimulation operations in the areas of domestic and international operations, including the Permian Basin, the Fort Worth Basin, Oklahoma, the Gulf of Mexico and Saudi Arabia. | |
| Guy Sirkes, Senior Vice President and Chief Financial Officer. Mr. Sirkes has served as the Company’s Senior Vice President and Chief Financial Officer since he joined the Company in April 2020. Prior to this, Mr. Sirkes served as the Vice President of Strategic Development for Nine where he was responsible for the Company’s M&A, strategic development and financial planning and analysis. Prior to joining the Company, Mr. Sirkes was an Executive Director | |
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| Theodore R. Moore, Senior Vice President, General Counsel and Secretary. Mr. Moore has served as the Company’s Senior Vice President and General Counsel since he joined the Company in March 2017 and has served as the Company’s secretary since April 2019. Prior to joining the Company, Mr. Moore served as the Executive Vice President, General Counsel and Chief Risk Officer of C&J Energy Services, Inc., a provider of onshore well construction and intervention, well completion, well support and other complementary oilfield services and technologies, from March 2015 to June, 2016, Executive Vice President from October 2012 and Vice President, General Counsel and Corporate Secretary from February 2011. Prior to that time, Mr. Moore practiced corporate law at Vinson & Elkins L.L.P. from 2002 through January 2011. Mr. Moore represented public and private companies and investment banking firms in capital markets offerings, mergers and acquisitions and corporate governance matters, primarily in the oil and gas industry. Mr. Moore graduated magna cum laude from Tulane University with a B.A. in Political Economy and a J.D. from Tulane Law School. |
Board Background and Diversity
The below table lists certain attributes about our director nominees’directors’ background and diversity.
TENURE/AGE/GENDER |  |  |  |
|  |  |  |  |  | |||||||||||||||||||||||||||
Years on the Board |
| 5 |
|
| 4 |
|
| 4 |
|
| 8 |
|
| 4 |
|
| 4 |
|
| 8 |
|
| 8 |
|
| 2 |
| |||||||||
Age |
| 44 |
|
| 66 |
|
| 58 |
|
| 67 |
|
| 57 |
|
| 56 |
|
| 71 |
|
| 60 |
|
| 51 |
| |||||||||
Gender |
| F |
|
| M |
|
| M |
|
| M |
|
| M |
|
| M |
|
| M |
|
| M |
|
| M |
| |||||||||
| DIVERSITY | ||||||||||||||||||||||||||||||||||||
Racially/Ethnically Diverse | ✓ |
| ||||||||||||||||||||||||||||||||||
| TENURE/AGE/GENDER |  |  |
|  |  |  |  |  | ||||||||||||||||||||||
Years on the Board |
| 8 |
|
| 7 |
|
| 11 |
|
| 7 |
|
| 7 |
|
| 11 |
|
| 11 |
| 5 | ||||||||
Age |
| 47 |
|
| 69 |
|
| 70 |
|
| 60 |
|
| 59 |
|
| 74 |
|
| 63 |
| 54 | ||||||||
Gender |
| F |
|
| M |
|
| M |
|
| M |
|
| M |
|
| M |
|
| M |
| M | ||||||||
| DIVERSITY | ||||||||||||||||||||||||||||||
Racially/Ethnically Diverse | ✓ | |||||||||||||||||||||||||||||
Corporate GovernanceCORPORATE GOVERNANCE
General
Board Leadership.
The Board is responsible for oversight of the Company and management. The Chairman of the Board is selected by the Board and the current Chairman is Ernie L. Danner, who is a non-employee director. Mr. Danner presides at all meetings of the Board, including executive sessions of the non-employee directors, subject to extraordinary circumstances. The Board has the flexibility to determine whether the roles of Chairman of the Board and Chief Executive Officer should be combined or separate. The offices of Chairman of the Board and Chief Executive Officer are currently separated. The positions of the Chairman of the Board and the Chief Executive Officer are not held by the same person and the Chairman of the Board is not an employee of the Company. The Board views this separation as a means to allow the Board to fulfill its role in risk oversight through a collaborative, yet independent, interaction with Company management.
Director Independence.
As a public company, we are required to comply with the rules of the NYSE and are subject to the rules and regulations of the Securities and Exchange Commission (the “SEC”),SEC, including Sarbanes-Oxley. The NYSE rules require listed companies to have a board of directors with at least a majority of independent directors. Additionally, each of the Audit Committee of the Board (the “Audit Committee”) and Nominating, Governance and Compensation Committee are required to be comprised solely of independent directors, as that term is defined by the applicable rules and regulations of the NYSE and SEC. Rather than adopting its own categorical standards, each year ourthe Board assesses director independence on a case-by-case basis, in each case consistent with the applicable rules and regulations of the SEC and the NYSE. After reviewing all relationships each director may have directly and indirectly with the Company and its management, ourthe Board has affirmatively determined that each of Messrs. D. Baldwin, M. Baldwin, Danner, Harrell, Schwinger, Thomas, Waite and Willis has no material relationships with the Company and, therefore, is “independent” as defined under the applicable NYSE rules and guidance. In addition, the Board previously determined that David C. Baldwin, who served on the Board until his resignation, which was effective as of August 3, 2023, had no material relationship with the Company and was “independent” as defined under the applicable NYSE rules and guidance. Ms. Fox, our President and Chief Executive Officer, is not considered to be “independent” because of her employment position with the Company. In addition, each of Messrs. M. Baldwin, Danner, Harrell, Thomas, Schwinger and Willis have been affirmatively determined by the Board to be independent under SEC rules and NYSE listing standards for the purposes of Audit Committee service. Moreover, each of Messrs. D. Baldwin, M. Baldwin, Danner, Harrell, Thomas, Schwinger, Waite and Willis have been affirmatively determined by the Board to be independent under SEC rules and NYSE listing standards for the purposes of Nominating, Governance and Compensation Committee service.
Risk Oversight.Oversight
The Board believes that risk management is an integral part of setting and implementing our business strategy, which includes, among other things, identifying and assessing the risks and opportunities facing the Company. It is management’s responsibility to manage the Company’s risk exposure and potential impact of the many risks that are associated with our business and a primary function of ourthe Board is to assist and oversee management in this effort. The Board, as a whole and also at the committee level, has oversight responsibility. The Board’s committees assist the Board in fulfilling its oversight responsibilities with respect to risks within its areas of responsibilities, as further discussed below. We believe the Board’s role in risk oversight is consistent with the Company’s leadership structure (as discussed under the heading “—Board Leadership”), with the CEO and other members of senior management having direct responsibility for risk management, and the remaining directors involved in providing oversight of management’s efforts to reduce, mitigate or eliminate the risks that we face.
The primary means by which the Board and its designated committees oversees our risk management structure and policies is through its regular communications with management and our internal audit department. In connection with ourthe quarterly Board meetings, the full Board (or the appropriate Committee in the case of
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risks that are under the purview of a particular Committee) receives regular reports from members of senior management on areas of material risk to the Company, including operational, financial, legal and regulatory, and strategic risks. The Chair of each of the Committees will discuss and review significant matters with management outside of the quarterly Board meetings as needed. When a Committee receives a separate report or the Chairman has separate discussions, the Committee Chairman may discuss that report with the full Board.
As part of its charter, the Audit Committee is responsible for reviewing and discussing our policies with respect to risk assessment and risk management generally, and also specifically with respect to financial reporting, internal controls and accounting matters, legal, tax and regulatory compliance and the internal audit function. The Audit Committee is responsible for ensuring that an effective risk assessment process is in place, and quarterly reports are made to the Audit Committee on material risks facing the Company. Upon request, both the full Board and Audit Committee may receive reports from those executive officers who are deemed responsible for particular risks due to being in a position that makes them most likely to be able to impact the effects of such risks. The Audit Committee also oversees our internal audit department, which is responsible for monitoring the Company’s adherence to our significant corporate policies and internal controls.
OurThe Nominating, Governance and Compensation Committee assists ourthe Board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation and benefits policies and programs. OurThe Nominating, Governance and Compensation Committee also assists ourthe Board in fulfilling its oversight responsibilities with respect to the management of risks associated with corporate governance, Board organization, membership and structure and succession planning for our Chief Executive Officer and other members of senior management.
Oversight of Strategy
Oversight of the Company’s business strategy and strategic planning is a key responsibility of the Board. The Board believes that overseeing and monitoring strategy is a continuous process and takes a multilayered approach in exercising its duties. The Board is committed to oversight of the Company’s business strategy and strategic planning, including work embedded in the Board committees, regular Board meetings and a dedicated meeting each year to focus on strategy. This ongoing effort enables the Board to focus on Company performance over the short, intermediate and long term, as well as the quality of operations. In addition to financial and operational performance, non-financial measures, including sustainability goals, are discussed regularly by the Board and Board committees.
While the Board and its committees oversee strategic planning, Company management is charged with executing the business strategy. To monitor performance against the Company’s strategic goals, the Board receives regular updates and actively engages in dialogue with our Company’s senior leaders. The Board’s oversight and management’s execution of business strategy are viewed with a long-term mindset and a focus on assessing both opportunities for and potential risks to the Company.
ESG Strategy
In 2023, the Company conducted a Sustainability Priority Assessment to identify key ESG-related issues important to the Company’s external and internal stakeholders and impactful to the Company’s business. This assessment has and continues to inform the Company’s ESG-related priorities, initiatives, and efforts.
In 2023, the Company engaged three external consultants to improve ESG-related policies, practices, and disclosures; compile Nine’s Scope 1 and 2 emission inventories, identify key software platforms for maintaining our emission data collection, and identify emission reduction opportunities to be included in the Company’s emission strategy; and assess and compile disclosures about Nine’s climate-related risks and opportunities aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) framework.
The Company also adopted a Human Rights Statement and formalized a Biodiversity Statement. In addition to maintaining robust FCPA, Export-Import Sanctions, Code of Conduct and related corporate governance
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policies, in 2023 the Nominating and Corporate Governance Documents. Please visit our investor relations website at https://investor.nineenergyservice.com, “Corporate Governance,” for additional informationCommittee amended its charter to include oversight of ESG-related risks, opportunities, and activities.
In 2024, the Board is focused on our corporate governance, including:improving the Company’s performance and disclosure on key topics identified in the Sustainability Priority Assessment, including employee health and safety, waste and chemical management, water tracking and management, and emissions management.
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The Board meets regularly during the year and holds special meetings and acts by unanimous written consent whenever circumstances require. During 2020,2023, there were elevenseven meetings of the Board. All incumbent directors attended at least 90%75% of such aggregate meetings of the Board and any committees on which they served occurring during 2020.2023. Directors are encouraged to attend the Company’s annual meetings of stockholders, and each director then-serving attended the Company’s 2020 annual meeting.2023 Annual Meeting of Stockholders.
Board Committees
The Board has established antwo standing committees: the Audit Committee and athe Nominating, Governance and Compensation Committee, each of which is comprised entirely of directors who meet the applicable independence requirements of the NYSE rules and SEC rules applicable to such committee membership. TheThese Committees keep the Board informed of their actions and provide assistance to the Board in fulfilling its oversight responsibility to stockholders. The table below provides current Committee membership information as well as meeting information for the last fiscal year.
Name | Audit Committee | Nominating, Governance and Compensation Committee | Audit Committee | Nominating, Governance and Compensation Committee | ||||
Mark E. Baldwin | X* | |||||||
Mark E. Baldwin | X* |
| ||||||
Curtis F. Harrell | X | X | ||||||
Curtis F. Harrell | X | X | ||||||
Scott E. Schwinger | X* | |||||||
Scott E. Schwinger |
| X* | ||||||
Gary L. Thomas | X | X | ||||||
Gary L. Thomas | X | X | ||||||
Darryl K. Willis | X | X | ||||||
Total Meetings in 2020 | 6 | 8 | ||||||
Darryl K. Willis | X | X | ||||||
Total Meetings in 2023 | ||||||||
Total Meetings in 2023 | 4 | 5 | ||||||
| * | Committee Chair |
The functions performed by, these Committees,and the duties of, the Audit Committee and the Nominating, Governance and Compensation Committee, which are set forth in more detail in their charters, are summarized below. The charters of these Committee are posted on the Company’s website at www.nineenergyservice.com under the heading “Investors” and the subheading “Corporate Governance.”
Audit Committee. Our
The Audit Committee, which is a separately-designated standing committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), consists of Mark E.Messrs. Baldwin, Curtis F. Harrell, Gary L. Thomas and Darryl K. Willis, each of whom the Board has affirmatively determined is independentmeets the independence standards under SEC rules and NYSE listing standards. As required by the SEC rules and the NYSE listing standards the Audit Committee consists solelyapplicable to members of independent directors. SEC rulesaudit committees. The Board has also require that a public company disclose whether or not its audit committee has an “audit committee financial expert” as a member. An “audit committee financial expert” is defined as a person who, based on his or her experience, possesses the attributes outlined in such rules. Our Board determined that Mark E.Messrs. Baldwin, Gary L.Harrell, Thomas and Curtis F. HarrellWillis are each financially literate, as required by the NYSE listing standards, and satisfy the definition of “audit committee financial expert.expert,” as set forth in Item 407(d) of Regulation S-K promulgated under the Securities Act of 1933, as amended (the “Securities Act”).
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The Audit Committee oversees, reviews, acts on and reports on various auditing and accounting matters to ourthe Board, including: the selection of our independent accountants, the scope of our annual audits, fees to be paid to the independent accountants, the performance of our independent accountants and our accounting practices. In addition, the Audit Committee oversees our compliance programs relating to legal and regulatory requirements. We adopted an Audit Committee charter defining the Committee’s primary duties in a manner consistent with the rules of the SEC and the listing standards of the NYSE, which is available on our investor relations website, as discussed above.
Nominating, Governance and Compensation Committee. Our Nominating, Governance and Compensation Committee consists of Scott E. Schwinger, Curtis F. Harrell, Gary L. Thomas and Darryl K. Willis, each of whom the Board has affirmatively determined is independent under SEC Rules and NYSE listing standards. This Committee identifies, evaluates and recommends qualified nominees to serve on our Board; develops and oversees our internal corporate governance processes; and maintains a management succession plan. This Committee also oversees the process by which salaries, incentives and other forms of compensation for officers and other employees are established and administers our incentive compensation plan. We adopted a Nominating, Governance and Compensation Committee charter defining the committee’s primary duties in a
manner consistent with the rules of the SEC and the listing standards of the NYSE, which is available on our investor relations website, as discussed above.
Our Nominating, Governance and Compensation Committee has the authority to engage a compensation consultant at any time if it determines that it would be appropriate to consider the recommendations of an independent outside source. During 2020, the Nominating, Governance and Compensation Committee chose to engage Compensation Advisory Partners (“CAP”), an independent compensation consultant. CAP reviewed both our executive compensation program and our non-executive director compensation program for 2020 and produced year-end compensation reports for the Nominating, Governance and Compensation Committee in the first quarter of 2020. These reports were utilized by the Nominating, Governance and Compensation Committee when making certain salary, incentive and year-end compensation decisions for the executives and the non-executive directors for 2020.
Our Nominating, Governance and Compensation Committee has the authority to delegate to its Chair, any one of its members, or any subcommittee it may form, the responsibility and authority for any particular matter, as it deems appropriate from time to time under the circumstances. No executive officer is present for or has input into the Nominating, Governance and Compensation Committee’s decisions regarding his or her specific compensation.
Director Nominations. Our Nominating, Governance and Compensation Committee considers candidates for director who are recommended by its members, by other Board members, by stockholders, and by management. To assist it in identifying director candidates, the Nominating, Governance and Compensation Committee is also authorized to retain, at the expense of the Company, third party search firms and legal, accounting, or other advisors, including for purposes of performing background reviews of potential candidates.
Director Tenure and Composition. Currently, over half of our directors have served for five or fewer than five years. Our Board’s composition represents a balanced approach to director tenure, allowing the Board to benefit from the experience of longer-serving directors combined with fresh perspectives from newer directors (with five new directors on-boarding and no directors leaving in the last three years). The current tenure range of our Board is as follows:
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Among the qualifications and skills of a candidate considered important by the Nominating, Governance and Compensation Committee are:
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While the Company’s Corporate Governance Guidelines do not prescribe diversity standards, as a matter of practice, the Nominating, Governance and Compensation Committee considers diversity in the context of the
Board’s composition as a whole, taking into account personal characteristics and experiences of current and prospective directors in order to facilitate Board deliberations that reflect an appropriate range of perspective. The Board believes that its current composition reflects the effectiveness of this approach. When evaluating re-nomination of existing directors, the Nominating, Governance and Compensation Committee also considers the nominees’ past Board and committee meeting attendance and performance, length of Board service and their independence under the applicable standards. The Nominating, Governance and Compensation Committee believes that each of the director nominees for the Annual Meeting possesses these attributes.
The Nominating, Governance and Compensation Committee evaluates director candidates recommended by stockholders in the same way that it evaluates candidates recommended by its members, other members of the Board, or other persons. Stockholders wishing to submit recommendations for director candidates for consideration by the Nominating, Governance and Compensation Committee must provide the following information in writing to the attention of the Secretary of the Company by certified or registered mail:
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To be considered by the Nominating, Governance and Compensation Committee for the 2022 Annual Meeting of Stockholders, a director candidate recommendation must be received by the Secretary of the Company no earlier than the close of business on January 3, 2022 and no later than the close of business on February 2, 2022.
Communications with the Board
Our Board welcomes communications from our stockholders and other interested parties. Stockholders and any other interested parties may send communications to our Board, any committee of our Board, the Chairman of our Board or to any director in particular, by writing to:
Nine Energy Service, Inc.
2001 Kirby Drive, Suite 200
Houston, TX 77019
Attn: General Counsel
Stockholders and any other interested parties should mark the envelope containing each communication as “Stockholder Communication with Directors” and clearly identify the intended recipient(s) of the communication.
Our General Counsel will review each communication received from stockholders and other interested parties and will forward the communications, as expeditiously as reasonably practicable, to the addressees if: (1) the communication complies with the requirements of any applicable policy adopted by our Board relating to the subject matter of the communication and (2) the communication falls within the scope of matters generally considered by our Board.
PROPOSAL 2—RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
Under the rules and regulations of the SEC and NYSE, the Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of our independent auditors. In addition, the Audit Committee oversees the work of our independent auditors, considers the independence of our independent auditors and participates in the selection of the independent auditor’s lead engagement partner. The Audit Committee has appointed, and, as a matter of good corporate governance, is requesting ratification by the stockholders of the appointment of, the registered public accounting firm of PricewaterhouseCoopers LLP (“PwC”) to serve as independent auditors for the fiscal year ending December 31, 2021. PwC has served as our independent auditor since 2011. The Audit Committee considered a number of factors in determining whether to re-engage PwC as the Company’s independent registered public accounting firm, including the length of time the firm has served in this role, the firm’s professional qualifications and resources, the firm’s past performance, and the firm’s capabilities in handling the breadth and complexity of our business, as well as the potential impact of changing independent auditors.
The Board of Directors and the Audit Committee believe that the continued retention of PwC as the Company’s independent auditor is in the best interests of the Company and its stockholders. If stockholders do not ratify the selection of PwC, the Audit Committee may reconsider its selection of PwC as our independent registered public accounting firm for the fiscal year ending December 31, 2021, but the Audit Committee may also elect to retain PwC. In addition, if stockholders ratify the selection of PwC as independent auditors, the Audit Committee may nevertheless periodically request proposals from the major registered public accounting firms and as a result of such process may select PwC or another registered public accounting firm as our independent auditors.
Audit and Other Fees
The table below sets forth the aggregate fees billed by PwC, the Company’s independent registered public accounting firm, for the last two fiscal years (in millions):
| 2020 | 2019 | |||
Audit Fees(1) | $1.7 | $2.0 | ||
Audit-Related Fees(2) | $— | $0.1 | ||
Tax Fees(3) | $— | $0.2 | ||
All Other Fees | $— | $— | ||
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Total Fees | $1.7 | $2.3 |
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Audit Committee pre-approval of audit and non-audit services provided by our independent auditor is not required if the engagement for the services is entered into pursuant to pre-approval policies and procedures established by the Committee. The Chairman of the Audit Committee has the authority to grant pre-approvals, provided such approvals are presented to the Audit Committee at a subsequent meeting.
The Audit Committee or Chairman of the Audit Committee, as applicable, approved or pre-approved 100% of the services described in the table set forth above for the years ended December 31, 2020 and 2019. The duties
of the Audit Committee are described in the Audit Committee Charter that is posted on the Company’s website at www.nineenergyservice.com under the heading “Investors” and the subheading “Corporate Governance.”
Representatives of PwC are expected to attend the Annual Meeting and will have an opportunity to make a statement and to respond to appropriate questions from stockholders.
Vote Required
Approval of Proposal No. 2 requires the affirmative vote of the holders of a majority of the shares present online or by proxy, and entitled to be voted at the Annual Meeting. Votes cast FOR or AGAINST and abstentions with respect to this Proposal No. 2 will be counted as shares entitled to vote on the Proposal. For these purposes, broker non-votes are treated as entitled to vote. A vote to ABSTAIN will have the effect of a vote AGAINST the Proposal.
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF PWC AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2021.
PROPOSAL 3—APPROVAL OF THE FIRST AMENDMENT TO THE 2011 STOCK INCENTIVE PLAN
Amended and Restated 2011 Stock Incentive Plan
At the Annual Meeting, our stockholders will be asked to approve the First Amendment (the “Amendment”) to the Nine Energy Service, Inc. 2011 Stock Incentive Plan, as amended and restated effective February 28, 2017, which we refer to herein as the “Stock Plan.” The Amendment increases the number of shares of common stock available for issuance pursuant to equity or equity-based awards granted under the Stock Plan. The Company believes implementing the Amendment is advisable in order to ensure the Company has an adequate number of shares available in connection with its compensation programs.
The following summary of the material terms of the Stock Plan, as amended to reflect the Amendment, are qualified by reference to the full text of (i) the Stock Plan, a copy of which is incorporated by reference to Exhibit 10.10 of the Company’s Registration Statement on Form S-1 filed on May 2, 2017 (File No. 333-217601), and (ii) the First Amendment, which is included with this Proxy Statement as Annex A.
Background and purpose of the proposal
The use of stock- and cash-based awards under the Stock Plan has been a key component of our compensation program since its original adoption. Our stockholders originally approved the Stock Plan prior to our initial public offering. The Company believes approval of the Amendment will give the Company flexibility to make grants of stock and stock-based awards under the Stock Plan over the next several years in amounts determined appropriate by the Board or the Nominating, Governance and Compensation Committee, which administers the Stock Plan. This timeline is an estimate, and our expected equity grant practices are subject to change in the future. Our equity grant practices could be affected by, among other things, the future price of our common stock, the number of employees or other service providers employed or providing services to the Company, including potential new hires, the equity award grant practices and amounts of our peer companies and other competitors, and general industry or market practices. As of March 4, 2021, the closing market price of our common stock was $3.37 per share, as reported on the New York Stock Exchange, and the Company had 287,621 shares of common stock that remained available for issuance pursuant to awards granted under the Stock Plan.
The Amendment will allow the Company to continue to grant equity and equity-based compensation awards to its employees and directors by increasing the number of shares of the Company’s outstanding common stock available under the Stock Plan by 1,300,000 shares. As of March 4, 2021, the total number of shares of the Company’s outstanding common stock was 31,555,321 (excluding shares held in treasury). If the Amendment is approved, the potential dilution from outstanding awards and shares available for future awards under the Stock Plan would be approximately 11.55%. This percentage is calculated on a fully diluted basis by dividing the total shares underlying outstanding equity awards as of March 4, 2021 plus the shares available for future awards under the Stock Plan (together, the numerator) by the total shares of common stock outstanding as of March 4, 2021 plus the number of shares in the numerator. Please see “–Description of the Stock Plan–Shares subject to the Stock Plan and limitations on awards to individual participants” for additional information regarding the number of additional shares being requested under the Amendment. The Company’s three-year average burn rate as of December 31, 2020 was 3.48%. This percentage is calculated by dividing the total shares underlying equity awards granted in a year by the weighted average shares outstanding during the year.
The Amendment will not be implemented unless approved by our stockholders. If the Amendment is not approved by stockholders, the Stock Plan will remain in effect in its present form, and it is anticipated that the Company will continue to grant awards thereunder until the share reserve under the Stock Plan is exhausted.
A summary description of the material features of the Stock Plan, as amended to reflect the Amendment, is set forth below. The following summary does not purport to be a complete description of all the provisions of the
Stock Plan and is qualified in its entirety by reference to the full text of (i) the Stock Plan, a copy of which is incorporated by reference to Exhibit 10.10 of the Company’s Registration Statement on Form S-1 filed on May 2, 2017 (File No. 333-217601), and (ii) the First Amendment, which is included with this Proxy Statement as Annex A.
Purpose of the Stock Plan
The purpose of the Stock Plan is to provide a means through which the Company and its affiliates may attract and retain able persons to serve as directors, consultants or employees of the Company and its affiliates and to provide a means whereby those individuals upon whom the responsibilities of the successful administration and management of the Company rest, and whose present and potential contributions to the Company are of importance, can acquire and maintain stock ownership or other awards, thereby strengthening their concern for the welfare of the Company and its affiliates and their desire to remain employed by, or continue providing services to, the Company and its affiliates. A further purpose of the Stock Plan is to provide such individuals with additional incentive and reward opportunities designed to enhance the profitable growth of the Company and its affiliates. The Company seeks to achieve the Stock Plan’s purpose primarily by providing grants of a variety of awards (collectively referred to as “awards”), including, but not limited to, the following:
incentive stock options qualified as such under U.S. federal income tax laws (“incentive stock options” or “ISOs”);
stock options that do not that do not qualify as ISOs (“non-statutory options” and, together with ISOs, “options”);
stock appreciation rights (“SARs”);
restricted stock awards;
performance awards;
restricted stock unit awards (“RSUs”);
bonus stock awards;
dividend equivalents;
other stock-based awards; and
cash awards.
The Stock Plan, in part, is intended to qualify under the provisions of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), which governs ISOs. The Stock Plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended. No awards may be granted under the Stock Plan after 10 years from February 3, 2017. The Stock Plan shall remain in effect until all awards granted under the Stock Plan have been exercised, satisfied, forfeited or expired.
Administration. The Stock Plan is administered by a committee of directors selected by our Board, which is currently the Nominating, Governance and Compensation Committee (the “Committee”). The Committee has the power to determine to whom and when awards will be granted, determine the amount of awards (measured in cash or in shares of our common stock), prescribe and interpret the terms and provisions of each award agreement (the terms of which may vary), accelerate the vesting or exercisability of an award, delegate duties under the Stock Plan and execute all other responsibilities permitted or required under the Stock Plan. Subject to the constraints of applicable law, the Committee may from time to time, in its sole discretion, delegate to our Chief Executive Officer the administration (or interpretation of any provision) of the Stock Plan and the right to
grant awards under the Stock Plan. The Committee may revoke any such delegation at any time, and may put any conditions and restrictions on the powers that may be exercised by the Chief Executive Officer upon such delegation as the Committee determines in its sole discretion.
Shares subject to the Stock Plan and limitations on awards to individual participants. If approved by our stockholders, the Amendment will increase the number of shares of our common stock that may be issued under the Stock Plan by 1,300,000 shares. If the Amendment is approved by our stockholders, the aggregate maximum number of shares of our common stock that may be issued under the Stock Plan, and the aggregate maximum number of shares of common stock that may be issued under the Stock Plan through ISOs, will not exceed 1,587,621 shares of the Company’s common stock, subject to adjustment in a manner consistent with the Stock Plan. Shares will be deemed to have been issued under the Stock Plan only to the extent actually issued and delivered pursuant to an award. To the extent that an award lapses or the rights of its holder terminate, any shares of common stock subject to such award will again be available for the grant of an award under the Stock Plan. In addition, shares issued under the Stock Plan and forfeited back to the Stock Plan, shares surrendered in payment of the exercise price or purchase price of an award, and shares withheld for payment of applicable employment taxes and/or withholding obligations associated with an award will again be available for the grant of an award under the Stock Plan. Any shares of common stock delivered pursuant to an award may consist, in whole or in part, of authorized and unissued shares or (where permitted by applicable law) previously issued shares of common stock that have been reacquired.
Eligible Individuals. All employees, directors and consultants of the Company or any of its affiliates are eligible to receive awards under the Stock Plan. Eligible employees, directors and consultants who receive an award under the Stock Plan are referred to as “participants.” As of March 4, 2021, there were eight non-employee directors, 16 officers (including four executive officers), approximately 141 other employees and no consultants who would be eligible to participate in the Stock Plan.
Types of awards.
Options and SARs. The Stock Plan provides for two types of options: incentive stock options and non-statutory stock options. The Committee is authorized to grant options to eligible participants (which in the case of incentive stock options are only individuals who are employed by us or one of our subsidiaries at the time of grant) subject to the terms and conditions set forth below.
The exercise price per share of common stock will be determined by the Committee. However, the exercise price per share of common stock will not be less than the fair market value of a share of common stock on the date of the grant of such option regardless of whether such option is an incentive stock option or a non-statutory stock option. Further, the exercise price of any incentive stock option granted to an employee who possesses more than 10% of the total combined voting power of all classes of the Company’s common stock or of any of our subsidiaries within the meaning of Section 422(b)(6) of the Code, must be at least 110% of the fair market value of a share of common stock at the time such option is granted. The exercise price or portion thereof will be paid in full in the manner prescribed by the Committee.
The Committee determines the term of each option; provided, however, that no option may be exercisable after the expiration of 10 years from the date of grant, and any incentive stock option granted to an employee who possesses more than 10% of the total combined voting power of all classes of our common stock or of any of our subsidiaries within the meaning of Section 422(b)(6) of the Code must not be exercisable after the expiration of five years from the date of grant. The Committee also determines the time at which an option may be exercised in whole or in part (subject to the restrictions on exercisability described above), and the method by which (and the form, including cash or shares of common stock or any combination thereof having a fair market value on the exercise date equal to the relevant exercise price, in which) payment of the exercise price with respect thereto may be made or deemed to have been made. Each incentive stock option is not transferable other than by will or the laws of descent and distribution and is exercisable during the holder’s lifetime only by the holder or the holder’s guardian or legal representative.
The Committee, in its sole discretion, may grant SARs in connection with options. SARs granted in connection with incentive stock options are exercisable only when the fair market value of our common stock exceeds the exercise price specified under the option. Option agreements may contain such other terms as determined by the Committee. The Committee is authorized to amend outstanding option agreements from time to time in any manner not inconsistent with the terms of the Stock Plan, including acceleration of the time at which the option, or a portion thereof, may be exercised, provided that unless otherwise provided for in the Stock Plan, no such amendment that materially reduces the rights of a participant may be made without such participant’s consent.
Except in connection with adjustments for certain subdivisions or consolidations of our common stock or the payment of a stock dividend as described below, without stockholder approval, the Committee cannot amend an option agreement to decrease the exercise price of the option or SARs granted in connection with the option (or otherwise grant a new option or SAR in substitution for, or upon the cancellation of, any previously granted option or SAR that has the effect of reducing the exercise price thereof).
Stock appreciation rights. A SAR is the right to receive a share of our common stock, or an amount in cash equal to the excess of the fair market value of one share of common stock on the date of exercise over the grant price of the SAR, as determined by the Committee. The exercise price of a share of common stock subject to the SAR shall be determined by the Committee, but in no event shall that exercise price be less than the fair market value of our common stock on the date of grant. The Committee will have the discretion to determine other terms and conditions of a SAR award.
Restricted stock awards. The Committee is authorized to grant restricted stock awards to eligible participants. Pursuant to a restricted stock award, shares of common stock will be issued or delivered to the holder without any cash payment to the Company, except to the extent otherwise provided by the Committee or required by law; provided, however, that the shares will be subject to certain restrictions on the disposition thereof and certain obligations to forfeit the shares to the Company as may be determined in the discretion of the Committee. The restrictions on disposition and the forfeiture restrictions may lapse based upon: the Company’s attainment of specific performance measures established by the Committee, the holder’s continued employment with the Company or its affiliates or continued service as a consultant or director for a specified time, the occurrence of any event or the satisfaction of any other condition specified by the Committee, or a combination of these factors.
The Company retains custody of the shares of common stock issued pursuant to a restricted stock award until the disposition and forfeiture restrictions lapse. The holder may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of the shares until the expiration of the restriction period. However, upon the issuance to the holder of shares of common stock pursuant to a restricted stock award, except for the foregoing restrictions or as otherwise provided by the Committee in the terms of a restricted stock agreement, the holder will have all the rights of a stockholder with respect to the shares, including the right to vote the shares and to receive all dividends and other distributions paid with respect to the shares. Restricted stock award agreements may contain such other terms as determined by the Committee.
Performance awards. The Committee may, in its sole discretion, grant performance awards under the Stock Plan that may be paid in cash, shares of common stock, or a combination thereof as determined by the Committee. At the time of the grant, the Committee will establish the maximum number of shares of common stock subject to, or the maximum value of, each performance award and the performance period over which the performance applicable to the award will be measured. A performance award will terminate if the recipient’s employment or service as a consultant to or director for the Company and its affiliates terminates during the applicable performance period, except as otherwise determined by the Committee.
The receipt of cash or shares of common stock pursuant to a performance award will be contingent upon satisfaction by the Company, or any affiliate, business unit, division or department, of performance measures established by the Committee. Following the end of the performance period, the Committee will determine the
amount payable to the holder of the performance award, based on the achievement of the performance measures for such performance period. Payment may be made in cash, shares of common stock or a combination thereof, as determined by the Committee. The payment will be made in a lump sum or in installments as prescribed by the Committee. If a performance award covering shares of common stock is to be paid in cash, then the payment will be based on the fair market value of such stock on the payment date or such other date as may be specified by the Committee. Performance award agreements may contain such other terms as determined by the Committee.
Restricted stock units. RSUs are rights to receive common stock, cash, or a combination of both at the end of a specified period. The Committee may subject RSUs to restrictions (which may include a risk of forfeiture) as specified in the RSU award agreement, and such restrictions may lapse at such times determined by the Committee. RSUs may be settled by delivery of common stock, cash equal to the fair market value of the specified number of shares of common stock covered by the RSUs, or any combination thereof determined by the Committee at the date of grant or thereafter. Dividend equivalents on the specified number of shares of common stock covered by RSUs may be paid on a current, deferred or contingent basis, as determined by the Committee on or following the date of grant.
Bonus stock awards. The Committee is authorized to grant bonus stock awards under the Stock Plan. Bonus stock awards are unrestricted shares of common stock that are subject to such terms and conditions as the Committee may determine. The Committee determines the purchase price, if any, for bonus stock awards.
Dividend equivalents. Dividend equivalents entitle a participant to receive cash, common stock, other awards or other property equal in value to dividends paid with respect to a specified number of shares of our common stock, or other periodic payments at the discretion of the Committee. Dividend equivalents may be granted on a free-standing basis or in connection with another award (other than a restricted stock award or a bonus stock award).
Other stock-based awards. Other stock-based awards are awards denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, the value of the Company’s common stock. The Committee will determine the terms and conditions of such other stock-based awards.
Cash awards. Cash awards may be granted on a free-standing basis, as an element of or a supplement to, or in lieu of any other award. Cash awards will be in such amounts and subject to such other terms as the Committee in its discretion determines to be appropriate.
Substitute awards. Awards may be granted in substitution or exchange for any other award granted under the Stock Plan or under another equity incentive plan or any other right of an eligible person to receive payment from us. Awards may also be granted under the Stock Plan in substitution for similar awards held for individuals who become participants as a result of a merger, consolidation or acquisition of another entity by or with us or one of our affiliates.
Adjustments. The Stock Plan provides that if the Company effects a subdivision or consolidation, or a payment of a stock dividend without receipt of consideration, on the shares of common stock subject to an award, the number of shares subject to the award, and the purchase price thereunder (if applicable) are proportionately adjusted. If the Company recapitalizes, reclassifies or otherwise changes its capital structure, outstanding awards will be adjusted so that the award will thereafter cover the number and class of shares to which the holder would have been entitled if he or she had been the holder of record of the shares covered by such award immediately prior to the recapitalization, reclassification or other change in the Company’s capital structure. Further, the aggregate number of shares available under the Stock Plan and the individual award limitations may also be appropriately adjusted by the Committee.
Corporate change. The Stock Plan provides that, upon a Corporate Change (as defined in the Stock Plan), the Committee may accelerate the vesting and exercise date of outstanding awards, cancel outstanding awards
and make payments in respect thereof in cash or adjust the outstanding awards as appropriate to reflect the Corporate Change. Generally, the Stock Plan provides that a Corporate Change occurs if: (i) the Company is not the surviving entity in any merger, consolidation or other business combination or reorganization (or survives only as a subsidiary of an entity); (ii) the Company sells, leases or exchanges or agree to sell, lease or exchange all or substantially all of its assets; (iii) the Company is dissolved and liquidated; (iv) any person, entity or group acquires or gains ownership or control of more than 50% of the outstanding shares of the Company’s voting stock; or (v) after a contested election of directors, the persons who were directors before such election cease to constitute a majority of our board of directors.
Amendment and termination of the Stock Plan. The Board in its discretion may terminate the Stock Plan at any time with respect to any shares of common stock for which awards have not been granted. The Board also has the right to alter or amend the Stock Plan or any part thereof from time to time; provided that no change in the Stock Plan may be made that would materially impair the rights of a Participant without the consent of the participant. In addition, the Board may not, without approval of our stockholders, amend the Stock Plan to increase the aggregate maximum number of shares common stock that may be issued under the Stock Plan, increase the aggregate maximum number of shares of common stock that may be issued under the Stock Plan through incentive stock options, change the class of individuals eligible to receive awards under the Stock Plan or amend or delete the restrictions on the repricing of options.
Transferability of awards. Awards granted under the Stock Plan (other than incentive stock options, which are subject to special rules described above) may not be transferred other than (i) by will or the laws of descent and distribution, (ii) pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or (iii) with the consent of the Committee.
Federal income tax consequences
The following discussion is for general information only and is intended to briefly summarize the United States federal income tax consequences to participants arising from participation in the Stock Plan. This description is based on current law, which is subject to change (possibly retroactively). The tax treatment of a participant in the Stock Plan may vary depending on his or her particular situation and may, therefore, be subject to special rules not discussed below. No attempt has been made to discuss any potential foreign, state, or local tax consequences. In addition, options and SARs with an exercise price less than the fair market value of shares of our common stock on the date of grant, SARs payable in cash, RSUs, and certain other awards that may be granted pursuant to the Stock Plan, could be subject to additional taxes unless they are designed to comply with certain restrictions set forth in Section 409A of the Code and guidance promulgated thereunder.
Tax consequences to participants
Non-statutory options. In general, no federal income tax is imposed on a participant upon the grant of a non-statutory option such as those under the Stock Plan and the Company is not entitled to a tax deduction by reason of such a grant. Generally, upon the exercise of a non-statutory option, the participant will be treated as receiving compensation taxable as ordinary income in the year of exercise in an amount equal to the excess of the fair market value of the shares on the date of exercise over the exercise price paid for such shares. Upon the exercise of a non-statutory option, and subject to the application of Section 162(m) of the Code as discussed below, the Company may claim a deduction for compensation paid at the same time and in the same amount as compensation income is recognized to the participant assuming any federal income tax reporting requirements are satisfied. Upon a subsequent disposition of the shares received upon exercise of a non-statutory option, any appreciation after the date of exercise will generally qualify as capital gain.
Incentive stock options. Incentive stock options, or ISOs, are intended to constitute “incentive stock options” within the meaning of Section 422 of the Code. ISOs are subject to special federal income tax treatment. No federal income tax is imposed on the participant upon the grant or the exercise of an ISO if the participant does not dispose of the shares acquired pursuant to the exercise within the two-year period beginning on the date the
ISO was granted or within the one-year period beginning on the date the ISO was exercised (collectively, the “holding period”). In such event, the Company would not be entitled to any deduction for federal income tax purposes in connection with the grant or exercise of the option or the disposition of the shares so acquired. With respect to an ISO, the difference between the fair market value of the stock on the date of exercise and the exercise price must be included in the participant’s alternative minimum taxable income. However, if the participant exercises an ISO and disposes of the shares received in the same year and the amount realized is less than the fair market value of the shares on the date of exercise, the amount included in alternative minimum taxable income will not exceed the amount realized over the adjusted basis of the shares.
Upon disposition of the shares received upon exercise of an ISO after the holding period, any appreciation of the shares above the exercise price will generally constitute capital gain. If a participant disposes of shares acquired pursuant to his or her exercise of an ISO prior to the end of the holding period, the participant will be treated as having received, at the time of disposition, compensation taxable as ordinary income. In such event, and subject to the application of Section 162(m) of the Code as discussed below, the Company may claim a deduction for compensation paid at the same time and in the same amount as compensation is treated as received by the participant. The amount treated as compensation is the excess of the fair market value of the shares at the time of exercise (or in the case of a sale in which a loss would be recognized, the amount realized on the sale if less) over the exercise price, and any amount realized in excess of the fair market value of the shares at the time of exercise would be treated as short-term or long-term capital gain, depending on the holding period of the shares.
RSUs, restricted stock and other stock- or cash-based awards. A participant will recognize ordinary compensation income upon receipt of cash pursuant to a cash award or, if earlier, at the time the cash is otherwise made available for the participant to draw upon. Individuals will not have taxable income at the time of grant of an RSU, but rather, will generally recognize ordinary compensation income at the time he or she receives cash or shares of common stock, as applicable, in settlement of the RSU in an amount equal to the cash or the fair market value of the shares of the Company common stock received.
A recipient of a restricted stock award or an award of unrestricted shares of common stock (i.e., bonus stock awards) generally will be subject to tax at ordinary income tax rates on the fair market value of the shares of common stock when received, reduced by any amount paid by the recipient; however, if the shares of common stock are not transferable and are subject to a substantial risk of forfeiture when received, a participant will recognize ordinary compensation income in an amount equal to the fair market value of the shares of common stock (i) when the shares of common stock first become transferable and are no longer subject to a substantial risk of forfeiture, in cases where a participant does not make a valid election under Section 83(b) of the Code, or (ii) when the award is received, in cases where a participant makes a valid election under Section 83(b) of the Code. If a Section 83(b) election is made and the shares of common stock are subsequently forfeited, the recipient will not be allowed to take a deduction for the value of the forfeited shares of common stock. If a Section 83(b) election has not been made, any dividends received with respect to a restricted stock award that are subject at that time to a risk of forfeiture or restrictions on transfer generally will be treated as compensation that is taxable as ordinary income to the recipient; otherwise the dividends will be taxed as dividends.
A participant who is an employee will be subject to withholding for federal, and generally for state and local, income taxes at the time he or she recognizes income under the rules described above. The tax basis in the shares of common stock received by a participant will equal the amount recognized by the participant as compensation income under the rules described in the preceding paragraph, and the participant’s capital gains holding period in those shares of the Company common stock will commence on the later of the date the shares of the Company common stock are received or the restrictions lapse. Subject to the application of Section 162(m) of the Code, the Company will be entitled to a deduction for federal income tax purposes that corresponds as to timing and amount with the compensation income recognized by a participant under the foregoing rules.
Tax consequences to the Company
Reasonable compensation. In order for the amounts described above to be deductible by the Company or a subsidiary, as applicable, such amounts must constitute reasonable compensation for services rendered or to be rendered and must be ordinary and necessary business expenses.
Golden parachute payments. The ability of the Company (or, if applicable, the ability of one of its subsidiaries) to obtain a deduction for future payments under the Stock Plan could also be limited by the golden parachute rules of Section 280G of the Code, which prevent the deductibility of certain “excess parachute payments” (within the meaning of Section 280G of the Code) made in connection with a change in control.
Compensation of covered employees. The ability of the Company (or, if applicable, the ability of one of its subsidiaries) to obtain a deduction for amounts paid under the Stock Plan could be limited by Section 162(m) of the Code. Section 162(m) of the Code limits the Company’s ability to deduct compensation, for federal income tax purposes, paid during any year to a “covered employee” (within the meaning of Section 162(m) of the Code) in excess of $1,000,000.
New Plan Benefits
The future awards, if any, that will be made to eligible individuals under the Stock Plan are subject to the discretion of the Board and the Nominating, Governance and Compensation Committee, and thus we cannot currently determine the benefits or number of shares subject to awards that may be granted to participants in the future under the Stock Plan. Therefore, the New Plan Benefits Table is not provided.
Vote Required
Approval of Proposal No. 3 requires the affirmative vote of the holders of a majority of the shares present online or by proxy, and entitled to be voted at the Annual Meeting. Votes cast FOR or AGAINST and abstentions with respect to this Proposal No. 3 will be counted as shares entitled to vote on the Proposal. For these purposes, broker non-votes are treated as entitled to vote. A vote to ABSTAIN will have the effect of a vote AGAINST the Proposal.
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE FIRST AMENDMENT TO THE 2011 STOCK INCENTIVE PLAN.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table summarizes information about our equity compensation plans as of December 31, 2020:
| (a) | (b) | (c) | ||||||||||||||
| Number of securities to be issued upon exercise of outstanding options, warrants and rights(1) | Weighted-average exercise price of outstanding options, warrants and rights(2) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))(3) | ||||||||||||||
Equity compensation plans approved by security holders | 835,447 | $ | 32.63 | 287,621 | ||||||||||||
Equity compensation plans not approved by security holders | — | $ | — | — | ||||||||||||
Total | 835,447 | $ | 32.63 | 287,621 | ||||||||||||
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Our only equity compensation plan is the Stock Plan, which was approved by our stockholders prior to our initial public offering. Please see Note 11 to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 for a description of our equity compensation plan. In addition, a detailed description of the terms of the Stock Plan is available in the Company’s Amendment No. 6 to Registration Statement on Form S-1 (File No. 333-217601), filed by the Company with the SEC on January 9, 2018, under the heading “Executive Compensation—Amended and Restated 2011 Stock Incentive Plan.”
Primary Oversight Responsibilities
Our management is responsible for establishing a system of internal controls, assessing such controls and for preparing our consolidated financial statements in accordance with generally accepted accounting principles. Our independent registered public accounting firm is responsible for auditing our consolidated financial statements in accordance with standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and issuing its report based on its audit.
Under the Audit Committee’s charter, the primary function of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities as to, among other duties: (1) the quality, integrity and reliability of the Company’s financial statements; (2) the Company’s compliance with legal, tax and regulatory requirements; (3) the Company’s compliance with the Company’s Corporate Code of Business Conduct and Ethics and Financial Code of Ethics; (4) qualifications, independence and performance of the independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report on the Company’s financial statements; (5) effectiveness and performance of the Company’s internal audit function; and (6) effectiveness and performance of the Company’s system of internal controls regarding finance, accounting, legal compliance and ethics.
OversightNominating, Governance and Compensation Committee
The Nominating, Governance and Compensation Committee consists of Independent AuditorsMessrs. Schwinger, Harrell, Thomas and Willis, each of whom the Board has affirmatively determined is independent under SEC Rules and NYSE listing standards.
In connectionThis Committee identifies, evaluates and recommends qualified nominees to serve on the Board; develops and oversees our internal corporate governance processes; and maintains a management succession plan. This Committee also oversees the process by which salaries, incentives and other forms of compensation for officers and other employees are established and administers our incentive compensation plan.
The Nominating, Governance and Compensation Committee has the authority to engage a compensation consultant at any time if it determines that it would be appropriate to consider the recommendations of an independent outside source. During 2023, the Nominating, Governance and Compensation Committee chose to engage Compensation Advisory Partners, an independent compensation consultant. CAP reviewed both our executive compensation program and our non-executive director compensation program for 2023 and produced year-end compensation reports for the Nominating, Governance and Compensation Committee in the second quarter of 2023. These reports were utilized by the Nominating, Governance and Compensation Committee when making certain salary, incentive and year-end compensation decisions for the executives and the non-executive directors for 2023.
The Nominating, Governance and Compensation Committee has the authority to delegate to its Chair, any one of its members, or any subcommittee it may form, the responsibility and authority for any particular matter, as it deems appropriate from time to time under the circumstances. No executive officer except the Chief Executive Officer is present for or has input into the Nominating, Governance and Compensation Committee’s decisions regarding specific compensation awarded to members of executive management.
Director Nominations
The Nominating, Governance and Compensation Committee considers candidates for director who are recommended by its members, by other Board members, by stockholders, and by management. To assist it in identifying director candidates, the Nominating, Governance and Compensation Committee is also authorized to retain, at the expense of the Company, third party search firms and legal, accounting, or other advisors, including for purposes of performing background reviews of potential candidates.
Director Tenure and Composition
The Board does not have a mandatory retirement age or term limits for directors. We believe our stockholders benefit from continuity of directors. To ensure the Board continues to generate new ideas and
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operate effectively, the Nominating, Governance and Compensation Committee discusses individual Board member performance and takes steps as necessary regarding continuing director tenure. The Nominating, Governance and Compensation Committee considers each director’s age and length of tenure when considering Board composition and seeks to maintain a balance of experience and continuity, along with fresh perspectives.
Among the qualifications and skills of a candidate considered important by the Nominating, Governance and Compensation Committee are:
personal and professional integrity, including commitment to the Company’s core values;
relevant skills and experience;
independence under applicable standards;
business judgment;
service on boards of directors of other companies;
openness and ability to work as part of a team;
willingness to commit the required time to serve as a Board member; and
familiarity with the evaluation, appointmentCompany and retentionits industry.
While the Company’s Corporate Governance Guidelines do not prescribe diversity standards, as a matter of practice, the Nominating, Governance and Compensation Committee considers diversity in the context of the Board’s composition as a whole, taking into account personal characteristics and experiences of current and prospective directors in order to facilitate Board deliberations that reflect an appropriate range of perspective. The Board believes that its current composition reflects the effectiveness of this approach. When evaluating re-nomination of existing directors, the Nominating, Governance and Compensation Committee also considers the nominees’ past Board and committee meeting attendance and performance, length of Board service and their independence under the applicable standards. The Nominating, Governance and Compensation Committee believes that each of the director nominees for the Annual Meeting possesses these attributes.
The Nominating, Governance and Compensation Committee evaluates director candidates recommended by stockholders in the same way that it evaluates candidates recommended by its members, other members of the Board, or other persons. Stockholders wishing to submit recommendations for director candidates for consideration by the Nominating, Governance and Compensation Committee must provide the following information in writing to the attention of the Secretary of the Company by certified or registered mail:
the name, age, business address and residence address of the nominee and the name and address of the stockholder making the nomination;
the principal occupation or employment of the nominee;
the number of shares of each class or series of our capital stock beneficially owned by the nominee and the stockholder and the period for which those shares have been owned; and
any other information the stockholder may deem relevant to the Nominating, Governance and Compensation Committee’s evaluation.
To be considered by the Nominating, Governance and Compensation Committee for the Company’s 2025 Annual Meeting of Stockholders, a director candidate recommendation must be received by the Secretary of the Company within the time period set forth in “Proposals of Stockholders.”
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Corporate Governance Documents
Please visit our investor relations website at https://investor.nineenergyservice.com, “Corporate Governance,” for additional information on our corporate governance, including:
our Third Amended and Restated Certificate of Incorporation and Fourth Amended and Restated Bylaws (our “Bylaws”);
our Corporate Governance Guidelines, which includes policies on stockholder communications with the Board, director qualification standards and responsibilities, meetings of the Board, director attendance at our annual meetings, management evaluation and succession planning;
our Corporate Code of Business Conduct and Ethics, our Financial Code of Ethics and our Clawback Policy; and
the charters approved by the Board for the Audit Committee and the Nominating, Governance and Compensation Committee.
Communications with the Board
The Board welcomes communications from our stockholders and other interested parties. Stockholders and any other interested parties may send communications to the Board, any committee of the Board, the Chairman of the Board or to any director in particular, by writing to:
Nine Energy Service, Inc.
2001 Kirby Drive, Suite 200
Houston, Texas 77019
Attn: General Counsel
Stockholders and any other interested parties should mark the envelope containing each communication as “Stockholder Communication with Directors” and clearly identify the intended recipient(s) of the communication.
Our General Counsel will review each communication received from stockholders and other interested parties and will forward the communications, as expeditiously as reasonably practicable, to the addressees if: (1) the communication complies with the requirements of any applicable policy adopted by the Board relating to the subject matter of the communication and (2) the communication falls within the scope of matters generally considered by the Board.
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PROPOSAL 2 — RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
Under the rules and regulations of the SEC and NYSE, the Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of our independent registered public accounting firm. In addition, the Audit Committee oversees the work of our independent registered public accounting firm, each yearconsiders the Audit Committee reviews and evaluates the qualifications, performance and independence of the independent registered publicsuch accounting firm and participates in the selection of such firm’s lead partner, including taking into account the opinion of management. In doing so, the Audit Committee considers a number of factors including, but not limited to: quality of services provided; technical expertise and knowledge of the industry; effective communication; objectivity; independence; and the potential impact of changing the independent registered public accounting firm. Based on this evaluation, theengagement partner. The Audit Committee has retained PwCappointed and, as a matter of good corporate governance, is requesting ratification by our stockholders of the appointment of, PricewaterhouseCoopers LLP (“PwC”) to serve as our independent registered public accounting firm for 2021.the fiscal year ending December 31, 2024.
The Audit Committee considered a number of factors in determining whether to re-engage PwC as the Company’s independent registered public accounting firm, including the length of time the firm has served in this role, the firm’s professional qualifications and resources, the firm’s past performance, and the firm’s capabilities in handling the breadth and complexity of our business, as well as the potential impact of changing independent auditors. PwC has served as our or our predecessor’s independent registered public accounting firm since 2011.
The Board of Directors and the Audit Committee believe that itthe continued retention of PwC as the Company’s independent registered public accounting firm is in the best interests of the Company and its stockholders. If our stockholders to continue retentiondo not ratify the selection of PwC, to servethe Audit Committee may reconsider its selection of PwC as our independent registered public accounting firm. Althoughfirm for the fiscal year ending December 31, 2024, but the Audit Committee hasmay also elect to retain PwC. In addition, if our stockholders ratify the sole authority to appoint theselection of PwC as independent registered public accounting firm, the Audit Committee will continuemay nevertheless periodically request proposals from the major registered public accounting firms and as a result of such process may select PwC or another registered public accounting firm as our independent auditors.
Representatives of PwC are expected to recommend that the Board request the stockholders, atattend the Annual Meeting and will have an opportunity to ratifymake a statement and to respond to appropriate questions from stockholders.
Audit and Other Fees
The table below sets forth the appointment ofaggregate fees billed by PwC, the independent registered public accounting firm.
Further, the Audit Committee reviews in advance and pre-approves, explicitly, audit and permissible non-audit services provided to us by our independent registered public accounting firm. The Audit Committee is also directly responsible for reviewing with theCompany’s independent registered public accounting firm, for the plans and scope of the audit engagement and providing an open venue of communication between our management, the internal audit function, ethics and compliance function, the independent registered public accounting firm and the Board. The Audit Committee has discussed with management and PwC such other matters and received such assurances from them as the Audit Committee deemed appropriate.last two fiscal years (in millions):
Pre-Approval Policies and Procedures
| 2023 | 2022 | |||||||
Audit Fees(1) | $ | 2.2 | $ | 1.6 | ||||
Audit-Related Fees | — | — | ||||||
Tax Fees | 0.1 | 0.1 | ||||||
All Other Fees | — | — | ||||||
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Total Fees | $ | 2.3 | $ | 1.7 | ||||
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All of the fees described above were approved
| (1) | Audit Fees consist of the aggregate fees billed for professional services rendered for audit procedures performed with regard to the Company’s annual consolidated financial statements, including reviews of the consolidated financial statements included in the Company’s Quarterly Reports on Form 10-Q, and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements. |
The Audit Committee or Chairman of the Audit Committee, as applicable.applicable, approved or pre-approved 100% of the services described in the table set forth above for the years ended December 31, 2023 and 2022. The Audit Committee has adopted a pre-approval policy under which the Audit Committee approves in advance all audit and non-audit services to be performed by our independent auditors. The Chairman of the Audit Committee has the authority to grant pre-approvals, provided such approvals are presented to the Audit Committee at a subsequent meeting. In determining whether to pre-approve a service to be performed by the Company’s independent auditors, the Audit Committee or Chairman of the Audit Committee, as applicable, considers whether such service is consistent with applicable SEC and Public Company Accounting Oversight Board (“PCAOB”) rules and guidance with respect to auditor independence.
2020 Audited Financial StatementsVote Required
Approval of this Proposal 2 requires the affirmative vote of the holders of the majority of the shares of common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter. You may vote “for” or “against” this proposal, or you may abstain from voting on this proposal. Abstentions will have the same effect as votes against this proposal. We believe this proposal is a “routine” matter, and as a result, we do not expect there to be any broker non-votes for this proposal.
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF PWC AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024.
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PROPOSAL 3 — ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
Pursuant to Section 14A of the Exchange Act, we are providing our stockholders with the opportunity to express their views on the compensation of our Named Executive Officers by casting a non-binding advisory vote on a resolution to approve the compensation of our Named Executive Officers as disclosed in “Executive and Director Compensation.” This vote is not intended to address any specific element of compensation, but instead is intended to address the overall compensation of our Named Executive Officers as disclosed in this Proxy Statement.
We believe that our executive compensation program is effective and aligned with the long-term interests of our stockholders and that the total compensation packages provided to our Named Executive Officers are reasonable in the aggregate. Accordingly, the Board invites you to review carefully the “Executive and Director Compensation” section of this Proxy Statement and cast a vote in favor of the compensation paid to our Named Executive Officers, as disclosed in such section, and adopt the following resolution:
“RESOLVED, that the stockholders approve the compensation of the Company’s named executive officers, as disclosed in the Company’s proxy statement for the 2024 Annual Meeting of Stockholders pursuant to Item 402 of Regulation S-K.”
The Board recognizes that executive compensation is an important matter for stockholders and values the opinions of our stockholders. As such, while this vote on the compensation of our Named Executive Officers is non-binding and solely advisory in nature, the Board and the Nominating, Governance and Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program. Currently, we expect the next “say-on-pay” advisory vote will occur at our 2025 Annual Meeting of Stockholders.
Vote Required
Approval, on an advisory basis, of this Proposal 3 requires the affirmative vote of the holders of the majority of the shares of common stock present in person or represented by proxy at the Annual Meeting and entitled to vote thereon. You may vote “for” or “against” this proposal, or you may abstain from voting on this proposal. Abstentions will have the same effect as votes against this proposal. Broker non-votes will not affect the outcome of the vote on this proposal.
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THIS PROXY STATEMENT.
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PROPOSAL 4 — ADVISORY VOTE TO APPROVE THE FREQUENCY OF
FUTURE SAY-ON-PAY ADVISORY VOTES
Pursuant to Section 14A of the Exchange Act, we are providing our stockholders with the opportunity to express their views on how frequently we should seek say-on-pay advisory votes, such as Proposal 3 included in this Proxy Statement. By voting on this Proposal 4, our stockholders may indicate whether future say-on-pay advisory votes should occur every year, every two years or every three years. Stockholders may also abstain. This non-binding, advisory vote is commonly referred to as a “say-on-frequency” vote.
The Board recognizes the importance of receiving regular input from the Company’s stockholders on important issues such as the Company’s executive compensation program and recommends a say-on-pay advisory vote be held every year. In particular, because the Company makes its compensation decisions on an annual basis, the Board believes that our stockholders should have an annual opportunity to provide advisory approval of these decisions. The Board also believes that an annual frequency vote provides the highest level of accountability and direct communication with our stockholders. Additionally, the Board is aware that many influential commentators in the area of corporate governance recommend that a say-on-pay advisory vote be held every year.
The Board will take the results of the vote on this Proposal 4 into account when deciding when to hold the next say-on-pay advisory vote. However, because this vote is advisory and not binding on the Board in any way, the Board may decide that it is in the best interests of our stockholders and the Company to hold say-on-pay advisory votes more or less frequently than the option receiving the highest number of votes.
Vote Required
You may vote for a frequency of every “one year,” “two years” or “three years” for future “say-on-pay” advisory votes, or you may abstain from voting on this proposal. The frequency receiving the affirmative vote of the holders of the majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter will be deemed to be the recommendation of our stockholders. If no frequency receives such majority support, the frequency that receives the most votes will be deemed to be the recommendation of our stockholders. Abstentions and broker non-votes will not be voted either for or against any frequency and, accordingly, will not affect the outcome of the vote on this proposal.
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS FOR A FREQUENCY OF
“ONE YEAR” FOR FUTURE SAY-ON-PAY ADVISORY VOTES.
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AUDIT COMMITTEE REPORT
The following report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any future filings under the Securities Act or the Exchange Act, except to the extent we specifically incorporate this report by reference.
In connection with the preparation of the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020:2023:
The Audit Committee reviewed and discussed the audited financial statements and associated audit with the independent registered public accounting firm and management.
The Audit Committee discussed with the independent registered public accounting firm the matters required to be discussed by the applicable regulations promulgated by the PCAOB. In general, these auditing standards requirePCAOB and the independent registered public accounting firm to communicate to the Audit Committee certain matters that are incidental to the audit, such as any initiation of, or changes to, significant accounting policies, management judgments, accounting estimates and audit adjustments; disagreements with management; the independent registered public accounting firm’s judgment about the quality of our accounting principles; significant audit risks identified and any changes from planned audit strategy; the use of specialists on the audit team; and issues for which the independent registered public accounting firm have consulted outside the engagement team.SEC.
The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communication with the Audit Committee concerning independence, and has discussed the independent registered public accounting firm’s independence with the independent registered public accounting firm. The Audit Committee also considered whether the independent registered public accounting firm’s provision of non-audit services to us was compatible with maintaining their independence.
Based on the review and discussions noted above, the Audit Committee recommended to the Board that the audited consolidated financial statements for the year ended December 31, 20202023 be included in ourthe Company’s Annual Report on Form 10-K filed for filing with the SEC.
The Audit Committee of the Board of Directors
Mark E. Baldwin
Curtis F. Harrell
Gary L. Thomas
Darryl K. Willis
BENEFICIAL OWNERSHIP OF SHARES
The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 4, 20216, 2024 (except as otherwise indicated) by (i) each of our Named Executive Officers, (ii) each of our directors (including our nominees), (iii) all of our directors and executive officers as a group, and (iv) each person known to us to beneficially own more than 5% of our outstanding common stock.stock (a “5% Stockholder”). Except as otherwise indicated, the persons or entities listed below have sole voting and investment power with respect to all shares of our common stock beneficially owned by them, except to the extent this power may be shared with a spouse. All information with respect to beneficial ownership has been furnished by the respective directors, executive officers, or stockholders holding more than 5%, as the case may be. Unless otherwise noted, the mailing address of each listed beneficial owner is 2001 Kirby Drive, Suite 200, Houston, Texas 77019.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | Amount and Nature of Beneficial Ownership | Percent of Class(1) | ||||||||||||
| 5% or more Stockholders: | ||||||||||||||||
| 5% Stockholders: | ||||||||||||||||
SCF(2) | 9,086,884 | 28.8% | 9,086,884 | 25.7% | ||||||||||||
Tontine Asset Associates, LLC, Tontine Capital Overseas Master Fund II, L.P. and Jeffrey L. Gendell(3) | 3,313,322 | 9.4% | ||||||||||||||
Warren Lynn Frazier | 4,738,514 | 15.0% | 2,851,249 | 8.1% | ||||||||||||
Adage Capital Partners(4) | 1,982,034 | 6.3% | ||||||||||||||
Thrivent Financial for Lutherans(5) | 1,672,233 | 5.3% | ||||||||||||||
Howard E. Cox Jr.(5) | 2,006,253 | 5.7% | ||||||||||||||
Directors and Named Executive Officers: | ||||||||||||||||
Ann G. Fox | 635,539 | 2.0% | 924,296 | 2.6% | ||||||||||||
David Crombie and /DKM Investments, LP | 278,983 | * | ||||||||||||||
Clinton Roeder | 67,102 | * | ||||||||||||||
David Crombie | 218,697 | * | ||||||||||||||
Theodore R. Moore | 123,742 | * | ||||||||||||||
Guy Sirkes | 104,677 | * | 134,627 | * | ||||||||||||
Theodore R. Moore | 142,397 | * | ||||||||||||||
Mark E. Baldwin | 56,697 | * | ||||||||||||||
Ernie L. Danner and Autumn Plecher, LP | 171,950 | * | 204,911 | * | ||||||||||||
David C. Baldwin | 14,965 | * | ||||||||||||||
Mark E. Baldwin | 34,720 | * | ||||||||||||||
Curtis F. Harrell and Harrell Ventures | 68,018 | * | 89,995 | * | ||||||||||||
Scott E. Schwinger | 27,053 | * | 49,030 | * | ||||||||||||
Gary L. Thomas | 55,065 | * | 77,042 | * | ||||||||||||
Andrew L. Waite | 14,965 | * | 36,942 | * | ||||||||||||
Darryl K. Willis | 22,217 | * | 25,332 | * | ||||||||||||
All directors and executive officers as a group (13 persons) | 1,735,163 | 5.5% | ||||||||||||||
All directors and executive officers as a group (11 persons) | 1,941,311 | 5.5% | ||||||||||||||
| * | Less than 1%. |
| (1) | Based upon an aggregate of |
| (2) | The board of directors of SCF GP LLC (“SCF GP”), the ultimate general partner of SCF-VII, L.P. and SCF-VII(A), L.P. (collectively, “SCF”), has voting and investment control over the securities owned by SCF. The board of directors of SCF GP consists of David C. Baldwin, Anthony F. DeLuca, L.E. Simmons and Andrew L. Waite. Because SCF-VII, L.P. and SCF-VII(A), L.P. are controlled by SCF GP, these entities may be considered to be a group for purposes of Section 13(d)(3) under the Exchange Act. As a group, SCF beneficially owns 9,086,884 shares of our common stock in the aggregate. This beneficial ownership includes 7,528,550 shares of our common stock held by SCF-VII, L.P. and 1,558,334 shares of our common stock held by SCF-VII(A), L.P. The address for SCF-VII, L.P. and SCF-VII(A), L.P. is 600 Travis Street, Suite 6600, Houston, Texas 77002. |
| (3) | Based on a Schedule |
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| (4) | Based on a Form 4 filed with the SEC on April 28, 2023, as of April 26, 2023, Warren Lynn Frazier |
Based on a Schedule |
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