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3, 2019
At the request
There are five items on this year’s agenda:
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These items are described fully infind the Notice of Annual Meeting of Stockholders andas well as a Proxy Statement describing the accompanying Proxy Statement.
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| APPENDIX A: AMENDED AND RESTATED 2015 EMPLOYEE EQUITY INCENTIVE PLAN | |
NEWPARK RESOURCES, INC.
NEWPARK RESOURCES, INC.9320 Lakeside Boulevard, Suite 100The Woodlands, Texas 77381NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERSTO BE HELD ON MAY 19, 2016To the Stockholders of Newpark Resources, Inc.:The Annual Meeting of Stockholders of Newpark Resources, Inc., a Delaware corporation (the “Company”), will be held on Thursday, May 19, 2016, at 10:00 a.m., Central Daylight Time, at the offices of the Company, 9320 Lakeside Boulevard, Suite 100, The Woodlands, Texas 77381, for the following purposes:(1)Date: MAY 23, 2019 Only stockholders of record at the close of business on the Record Date will be entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement. A list of stockholders entitled to vote at the Annual Meeting will be available at the Annual Meeting and for 10 days prior to the Annual Meeting at our executive offices, 9320 Lakeside Boulevard, Suite 100, The Woodlands, Texas 77381. Time: 10:00 a.m. Central Daylight Time Place: 9320 Lakeside Boulevard, Suite 100The Woodlands, Texas 77381Record Date: March 28, 2019 MEETING AGENDA (1) The election of seven directorssix director nominees named in this Proxy Statement to theour Board of Directors;(2) (2)anAn advisory vote to approve our named executive officer compensation;(3) (3)to considerApproval of the amendment and act upon a proposal to amend the Company’srestatement of our 2015 Employee Equity Incentive Plan to, among other things, increase the number of shares of common stock authorized for issuance under the plan by 1,800,000 shares from 6,000,000 to 7,800,000 shares,Plan; and to decrease the fungible ratio from 1.85 to 1.78;(4) (4)to consider and act upon a proposal to amend the Company’s Restated Certificate of Incorporation, as amended, to provide that the Company’s stockholders may remove any director from office, with or without cause;(5)theThe ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year 2016; and(6)to consider and act uponOur stockholders may also transact such other business that may properly come before the Annual Meeting or any adjournment or postponement thereof.Only stockholders of record at the close of business on March 28, 2016 will be entitled to notice of and to vote at the Annual Meeting as may properly come before the meeting and any adjournmentadjournments or postponement. A list of stockholders entitled to vote at the Annual Meeting will be available at the Annual Meeting and for 10 days prior to the Annual Meeting at our executive offices, 9320 Lakeside Boulevard, Suite 100, The Woodlands, Texas 77381.Allpostponements thereof. Our stockholders are cordially invited to attend the Annual Meeting in person. Whether or not you expect to attend the Annual Meeting, please promptly vote your shares by telephone, by the internet or if this Proxy Statement was mailed to you, by marking, signing, dating and returning the enclosed proxy card as soon as possible in the enclosed postage prepaid envelope in order that your vote be cast at the Annual Meeting.shares. The giving of your proxy will not affect your right to vote in person should you later decide to attend the Annual Meeting. If your shares are held in the name of a bank, broker or other holder of record, you will receive instructions from the holder of record for you to follow in order to vote your shares.Under the rules of the U.S. Securities and Exchange Commission, we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice Regarding the Availability of Proxy Materials (the “Notice”) to our stockholders as of the close of business on the Record Date. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or to request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. The Notice also instructs you on how you may submit your proxy over the Internet or by mail. If you receive the Notice, you will not receive a printed copy of the proxy materials unless you request one in the manner set forth in the Notice or as otherwise described in the Proxy Statement.How to Vote: Please vote by using one of the following voting methods. Please have your proxy materials in hand when voting by any one of these methods. You may need your control number in order to vote by one of the advance methods.) : * @ By Phone1 (800) 690-6903By Internetwww.proxyvote.comBy MailMark, sign and date your proxy card and return it in the postage-paid envelope.In PersonAttend the Annual Meeting and vote by ballot.Dated: April 3, 2019 BY ORDER OF OUR BOARD OF DIRECTORS 
E. Chipman Earle Vice President, General Counsel, Chief Compliance Officer, Chief Administrative Officer and Corporate Secretary PROXY SUMMARYThis summary highlights selected information found elsewhere in this Proxy Statement, which is being sent or made available to stockholders on or about April 3, 2019. This summary does not contain all of the information that you should consider before voting and therefore we urge you to review the complete Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 prior to voting.ANNUAL MEETING OF STOCKHOLDERSTime and Date 10:00 a.m., Central Daylight Time, on May 23, 2019 Place Newpark Resources, Inc.9320 Lakeside Boulevard, Suite 100The Woodlands, Texas 77381Record Date BY ORDER OF THE BOARD OF DIRECTORS March 28, 2019 Voting Stockholders of record at the close of business on the Record Date are entitled to receive notice of and may vote in person at the Annual Meeting or by proxy. Each share of our common stock entitles the holder to one vote on each matter submitted to a vote of stockholders. If you do not wish to vote in person or if you will not be attending the Annual Meeting, you may vote by proxy. You may vote by Internet or by following the instructions in the Notice Regarding the Availability of Proxy Materials or, if you requested printed copies of the proxy materials, you can vote by Internet, by telephone or by delivering your proxy through the mail. We recommend that you vote by proxy even if you plan to attend the Annual Meeting. If your shares are held in the name of a bank, broker or other holder of record, you will receive instructions from the holder of record for you to follow in order to vote your shares. Common shares outstanding as of the Record Date 90,296,701 ANNUAL MEETING PROPOSALSVoting Item Board Vote Recommendation Page 1. Election of six director nominees named in this Proxy Statement to our Board of Directors FOR each nominee 2. Advisory vote on approval of named executive officer compensation FOR 3. Approval of the amendment and restatement of the Company’s 2015 Employee Equity Incentive Plan FOR 4. Ratification of independent registered public accounting firm FOR OUR DIRECTOR NOMINEESNominee Age Director Since Committee Memberships Independent Anthony J. Best 69 2014 None ü G. Stephen Finley 68 2007 A (Chair)CN&CGü Paul L. Howes 63 2006 None Roderick A. Larson 52 2014 ACN&CG (Chair)ü John C. Mingé 57 2017 AC (Chair)N&CGü Rose M. Robeson 58 2018 ACN&CGü A - Audit Committee; C - Compensation Committee; N&CG - Nominating and Corporate Governance CommitteeOUR NAMED EXECUTIVE OFFICER COMPENSATIONAt our 2018 Annual Meeting, our stockholders voted 94% in favor of our executive compensation disclosed in our 2018 proxy statement. In the spirit of continuous improvement and in order to seek continued alignment with our stockholders, at the end of 2018, we reached out to our 25 largest stockholders, representing 81.4% of our outstanding common stock, and engaged with eight of those investors representing 27.0% of our outstanding common stock, to seek their views on our executive compensation, corporate governance and environmental sustainability practices. Our engagement with our stockholders included the participation of members of our senior management team as well as our Compensation Committee Chair, when requested. The information received from our stockholders was summarized and shared with our Compensation Committee and Board of Directors. In response to stockholder feedback and consistent with our executive compensation philosophy of pay-for-performance, the Compensation Committee will increase the percentage of performance-based awards to 40% of the executives’ long-term incentive compensation in 2019 from 25% in 2018. These changes will take effect in May 2019 when the Compensation Committee typically grants long-term incentive awards. In consideration of stockholder feedback, we have also introduced a second financial performance metric within our annual incentive program in 2019. For the 2019 performance year, we have included Return on Net Capital Employed (RONCE), in addition to our consolidated EBITDA metric. We will continue to regularly engage with our stockholders and consider their feedback as we develop our evolving executive compensation, corporate governance and environmental sustainability practices.We continue to improve our compensation and governance practices, as reflected by the following: Dated: April 6, 2016 NEWPARK RESOURCES, INC. Stock ownership guidelines for senior management and non-employee Directors X Excise tax gross-ups ü Pay-for-performance X Repricing ü Annual say-on-pay vote X Hedging ü Independent compensation consultant X Single-trigger change in control ü Significant percentage of pay is “at risk” X Excessive perquisites ü Multiple financial performance metrics in annual incentive program 
Relative total stockholder return as performance metric in long-term incentive program Mark J. Airola Senior Vice President, General Counsel,Chief Administrative Officer and Secretary 
TABLEOF CONTENTS1 11122233333466777889999101010111112121414151616171818182024252627283235363839OUR PROPOSED AMENDED AND RESTATED 2015 EMPLOYEE EQUITY INCENTIVE PLANOur 2015 Employee Equity Incentive Plan, as previously amended (the “2015 Plan”), was initially adopted by our Board of Directors on April 6, 2015, approved by our stockholders at the 2015 Annual Meeting, and subsequent amendments were approved by our stockholders in 2016 and 2017. The maximum number of shares of our common stock currently authorized for issuance under the 2015 Plan is set at 9,800,000 shares. As of December 31, 2018, approximately 1,313,255 shares of common stock remained available for issuance under the 2015 Plan. On April 1, 2019, our Board of Directors approved, subject to stockholder approval at our 2019 Annual Meeting, a proposed amendment and restatement of our 2015 Plan that would effect each of the following changes: (i) increase the number of shares of our common stock currently authorized for issuance under the 2015 Plan by 2,500,000 shares from 9,800,000 shares to 12,300,000 shares; (ii) remove the current fungible ratio of 1.78 under the 2015 Plan resulting in any restricted stock unit or future options granted under the 2015 Plan counting as one full value share with respect to the reserved share amount; and (iii) make other administrative and updating changes.During our recent stockholder engagement discussions, we noted that stockholders consistently advocated for the continued use of equity in long-term incentives as opposed to cash, with restricted stock units being the most preferred form of award to incentivize our senior management and non-employee directors. Although stockholders recognized the dilutive effects of using equity for long-term incentive awards, equity was viewed as the appropriate form of compensation to align the interests of our senior management and Board with those of our stockholders. We are continually sensitive to the dilutive effects of granting equity to our management and therefore have established a stock repurchase program that serves to offset that dilutive effect to our stockholders.Our Board recommends a vote for the proposed amendment and restatement of the 2015 Plan for the following reasons:The proposed amendment and restatement of the 2015 Plan will enable our Compensation Committee to continue to grant equity awards at market levels to our key employees, thereby preserving cash for other strategic uses while at the same time aligning the interests of our senior management and Board with our stockholders.Our equity awards are designed to assist in executive retention through extended vesting periods, while also preserving cash and maintaining liquidity.We believe the requested number of additional shares to be reserved for issuance under our 2015 Plan is reasonable based on current market conditions, providing flexibility to accommodate the anticipated restricted stock unit awards to be issued to new management in the form of sign-on awards as well as to our management as part of our annual grant cycles for the next two to three years, depending on the price of our stock at the time of grant.We no longer believe that a fungible ratio is necessary as our Compensation Committee does not intend to issue options over the coming years so the flexibility that a fungible ratio may provide is no longer needed. Therefore, we believe that the continued use of the fungible ratio would potentially overstate the number of shares actually being requested for reserve under the amendment and restatement of the 2015 Plan.In considering this proposal, the stockholders should also be aware that the average number of shares of our common stock granted under all long-term incentive plans over the last three fiscal years, divided by the number of our shares of common stock outstanding as of March 28, 2019, is approximately 1.9% (unadjusted and excluding forfeitures). Given market volatility and challenging industry conditions, we can only estimate how many years of grants the proposed increased number of shares reserved under the amended and restated 2015 Plan will provide. However, we believe that the requested allocation is critical over the next 24 months to ensure our ability to attract and retain key talent and to provide competitive reward opportunities that are aligned with our stockholders’ interests.In the event that the proposed amendment and restatement of the 2015 Plan does not receive the affirmative vote of holders of at least a majority of the shares present and entitled to vote (treating broker non-votes as not present and not entitled to vote on the matter and counting abstentions as a vote against), the form of the 2015 Plan that was in effect prior to this proposed amendment and restatement thereof will remain in effect. In such case, the Compensation Committee will likely need to consider whether to issue some combination of cash awards under the 2015 Plan to incentivize and retain management going forward.OUR INDEPENDENT AUDITORSThe Audit Committee of our Board of Directors has determined that the accounting firm of Deloitte & Touche LLP (“Deloitte”) is independent from the Company and once again selected Deloitte as the Company’s independent auditors for fiscal year 2019. Our Board recommends a vote for the approval and ratification of the selection of Deloitte, which conducted the examination of the Company’s financial statements for each of the past 11 fiscal years, for fiscal year 2019. Deloitte’s total fees for fiscal years 2018 and 2017 were approximately $1.53 million and approximately $1.66 million, respectively, which included approximately $10,000 (or 0.65%) of non-audit services in fiscal year 2018 and approximately $8,000 (or 0.48%) of non-audit services in fiscal year 2017 that were authorized by the Audit Committee in compliance with our pre-approval policies and procedures.
NEWPARK RESOURCES, INC.
APRIL 6, 2016
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Only stockholders of record at the close of business on March 28, 2016 are entitled to receive notice of and to vote at the Annual Meeting. On that date, we had outstanding 84,104,128 shares of common stock, each of which is entitled to one vote upon each proposal presented at the Annual Meeting.
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| Revocationof Proxies |
| GENERAL INFORMATION | 2019 Proxy Statement | 1 | |
| Vote Requirement for Each Proposal and Board Recommendation |
| Voting Item | Voting Standard | Treatment of Abstentions and Broker Non-Votes | Board Vote Recommendation |
| Election of six director nominees named in this Proxy Statement to our Board of Directors | Contested election - plurality vote Uncontested election - majority vote policy | Not counted and therefore will have no effect on the outcome. | FOR each nominee |
| Advisory vote on approval of named executive officer compensation | Majority of the shares present and entitled to vote | Broker non-votes are treated as not present and not entitled to vote on the matter and will have no effect on the outcome. However, abstentions constitute shares that are present and entitled to vote and will be treated as a vote against. | FOR |
| Approval of the amendment and restatement of our 2015 Employee Equity Incentive Plan | Majority of the shares present and entitled to vote | Broker non-votes are treated as not present and not entitled to vote on the matter and will have no effect on the outcome. However, abstentions constitute shares that are present and entitled to vote and will be treated as a vote against. | FOR |
| Ratification of independent registered public accounting firm | Majority of the shares present and entitled to vote | Brokers have discretionary authority to vote unless prior instructions have been received. Abstentions constitute shares that are present and entitled to vote and will be treated as a vote against. | FOR |
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A “broker non-vote” occurs on an item of business at a meeting of stockholders when shares held by a nominee for a beneficial owner are present or represented at the meeting, but the nominee does not have voting power for that particular item of business and has not received instructions from the beneficial owner. Your nominee does not have authority to vote your shares with respect to the following agenda items unless the nominee has received explicit instructions from you:
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Therefore, if the nominee does not receive voting instructions from you with respect to such items, the nominee will not be able to vote your shares on those items, and, consequently, your shares will be considered a “broker non-vote” with respect to those proposals. However, a nominee who holds your shares in its name is permitted to vote your shares on the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm even if the nominee does not receive voting instructions from you.
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A plurality vote is required for the election of directors. The “plurality” standard means the nominees who receive the largest number of “for” votes cast are elected as directors. Thus, the number of shares not voted for the election of a nominee (and the number of “withheld” votes cast with respect to that nominee) will not affect the determination of whether that nominee has received the necessary votes for election. Brokers who have not received voting instructions from the beneficial owner do not have the discretionary authority to vote on the election of directors. Therefore, broker non-votes will not be considered in the vote totals and will have no effect on the election of the directors. However, as described in greater detail in the “Corporate Governance” section of this proxy under the heading “Corporate Governance Guidelines and Code of Ethics,” our Board of Directors has adopted a majority vote policy which applies to the election of directors. Under this policy, in an uncontested election (i.e., an election where the number of nominees is not greater than the number of directors to be elected), any nominee who receives a greater number of “withheld” votes from his election than votes “for” his election is required to tender his resignation to the Chairman of the Board. Consequently, the number of “withheld” votes with respect to a nominee will affect whether or not our majority vote policy will apply to that individual.
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Each matter submitted to a vote of the stockholders, other than the election of directors (described above) and the amendment to the Restated Certificate of Incorporation (described separately below), requires the affirmative vote of a majority of the shares having voting power on such matter present or represented at the Annual Meeting. Abstentions will be considered as present at the Annual Meeting and included in the vote totals on these matters and will have the same effect as a no vote. Except with respect to ratification of the appointment of Deloitte & Touche LLP, broker non-votes will not be considered as a “vote cast” and will have no effect on the outcome. Brokers who have not received voting instructions from the beneficial owner have the discretionary authority to vote on the ratification of the appointment of Deloitte & Touche LLP. While we do not expect broker non-votes on this proposal, any broker non-votes will be included in the vote totals on this proposal and will have the same effect as a vote against this proposal.
The approval of the amendment to the Restated Certificate of Incorporation requires an affirmative vote of the holders of not less than two-thirds (2/3) of the outstanding shares of common stock. Abstentions and broker non-votes will have the same legal effect as a vote against this proposal.
In addition to the vote required by our bylaws as described above, under the New York Stock Exchange (“NYSE”) rules, approval of the adoption of the Amendment No. 1 to the Company’s 2015 Employee Equity Incentive Plan requires approval of a majority of votes cast on the proposal. The NYSE takes the position that a broker non-vote is not a “vote cast.” Accordingly, broker non-votes will have no effect on the outcome of the vote on this matter. However, abstentions will be counted by the NYSE as a vote cast and will be treated as a vote against the adoption of the Amendment No. 1 to the 2015 Employee Equity Incentive Plan (the “2015 Plan”).
Solicitation of Proxies |
PROPOSAL NO. 1ELECTION OF DIRECTORS
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Seven directors are to be elected at the Annual Meeting, each to hold office until the next Annual Meeting and until his successor has been elected. The Board of Directors has nominated for election as directors the seven persons named below based on the recommendation of the Nominating and Corporate Governance Committee. All nominees are incumbent directors.
The Board of Directors recommends that the stockholders vote “FOR” the election of these nominees. Unless directed otherwise, the persons named in the enclosed proxy intend to vote the shares of common stock represented by the proxies in favor of the election of these nominees. All of the Board’s nominees have indicated that they are able and willing to serve as directors. If for any reason one or more of these nominees are unable to serve, the persons named in the enclosed proxy will vote instead for another person or persons that the Board of Directors may recommend, or the number of directors may be reduced.
Please note that brokers may not vote your shares on the election of directors in the absence of your specific instructions as to how to vote. We encourage you to provide instructions to your broker regarding the voting of your shares.
The following table sets forth certain information as of March 18, 2016, with respect to the Board’s nominees:
Name of Nominee Age Director Since David C. Anderson 74 2006 Anthony J. Best 66 2014 G. Stephen Finley 65 2007 Paul L. Howes 60 2006 Roderick A. Larson 49 2014 James W. McFarland, Ph.D. 70 2006 Gary L. Warren 66 2005
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David C. Anderson joined our Board of Directors in September 2006. Mr. Anderson currently serves as our Chairman of the Board. Previously he served as Chairman of our Compensation Committee and had served as a member of the Nominating and Corporate Governance and Audit Committees. Mr. Anderson also currently serves on the Board of Directors of Lucas Group, a privately-held executive search firm. Since 2003, Mr. Anderson has been the Chief Executive Officer of Anderson Partners, a firm he formed which provides senior-level executive search and related management consulting services to corporations and private equity, venture capital and professional services firms. Prior to this, from 1992 to 2003, he served in various management positions for Heidrick & Struggles, Inc., also an executive search firm, including President and Chief Executive Officer of executive search, and President and Chief Operating Officer for the company as a whole. At Heidrick & Struggles, he participated in the development of the strategy to merge the domestic operations with the international business unit leading to a successful initial public offering in 1999. Mr. Anderson also served as a member of the Board of Directors of Heidrick & Struggles from 1996 through 1999, continuing as a director after the public offering through 2002.
Anthony J. Best joined our Board of Directors in March 2014. Mr. Best currently serves as Chairman of the Compensation Committee and as a member on our Audit and Nominating and Corporate Governance Committees. Mr. Best retired as Chief Executive Officer of SM Energy in January 2015 and did not stand for re-election to its Board in May 2015. He originally joined SM Energy Company in Denver in June 2006 as its President and Chief Operating Officer. He was named as Chief Executive Officer in February 2007 and was appointed to the Board of the company at the same time and continued to serve on the board until May 2015. Between February 2003 and September 2005, Mr. Best served as President and Chief Executive Officer of Pure Resources, Inc., a Unocal development and exploration company in Midland, Texas. From April 2000 until February 2003, Mr. Best served as an independent consultant offering leadership and oil and gas consultation to energy companies and volunteer organizations. From October 1979 until April 2000, Mr. Best served in varying roles of increasing responsibility at Atlantic Richfield Company, with his last position being President, ARCO Latin America. Mr. Best serves as a part-time senior advisor to Quantum Energy Partners, a private equity firm. In January 2016, he also joined the Board of Directors of ExL Petroleum, LP, a private equity Quantum Energy Partners portfolio company.
G. Stephen Finley joined our Board of Directors in June 2007. Mr. Finley currently serves as Chairman of the Audit Committee and as a member of the Compensation and Nominating and Corporate Governance Committees. Mr. Finley served as the Senior Vice President, Finance & Administration and Chief Financial Officer of Baker Hughes Incorporated from April 1999 until his retirement from that company in April 2006. Prior to that, from February 1982 to April 1999, Mr. Finley held various financial and administrative management positions with Baker Hughes. Since November 2006, Mr. Finley has served as a member of the board of directors, a member of the Audit Committee and Conflicts Committee and serves as Chairman of the Compensation Committee of Archrock GP, LLC (previously known as Exterran GP, LLC), which is the general partner of Archrock Partners, L.P. (previously known as Exterran Partners, L.P.), a publicly traded limited partnership which provides natural gas compression services and products. From December 2006 until November 2011, Mr. Finley served on the board of directors of a privately held company, Total Safety U.S., Inc., a global provider of integrated safety strategies and solutions for hazardous environments. From April 2012 to December 2014, Mr. Finley served on the board of Microseismic, Inc., a privately held oilfield services company that provides monitoring and mapping of hydraulic fracture operations in unconventional oil and gas plays. As of March 2015, Mr. Finley was appointed to the board of CPP GP LLC, the general partner of Columbia Pipeline Partners LP, a publicly traded natural gas transmission and storage company. At that time, Mr. Finley was also appointed to the Audit Committee of CPP GP LLC.
Paul L. Howes joined our Board of Directors and was appointed as our Chief Executive Officer in March 2006. In June 2006, Mr. Howes was also appointed as our President. Mr. Howes’ career has included experience in the defense industry, chemicals and plastics manufacturing, and the packaging industry. Following the sale of his former company in October 2005 until he joined our Board of Directors in March 2006, Mr. Howes was working privately as an inventor and engaging in consulting and private investing activities. From December 2002 until October 2005, he served as President and Chief Executive Officer of Astaris LLC, a primary chemicals company headquartered in St. Louis, Missouri, with operations in North America, Europe and South America. Prior to this, from 1997 until 2002, he served as Vice President and General Manager, Packaging Division, for Flint Ink Corporation, a global ink company headquartered in Ann Arbor, Michigan with operations in North America, Europe, Asia Pacific and Latin America.
Roderick A. Larson joined our Board of Directors in March 2014. Mr. Larson currently serves as a member on our Audit, Compensation and Nominating and Corporate Governance Committees. Beginning in May 2012, Mr. Larson served as Chief Operating Officer of Oceaneering International, Inc. and effective February 2015, was named President of that company. From August 1998 until May 2012, Mr. Larson held varying positions of increasing responsibility at Baker Hughes, Inc., most recently as President, Latin America. While at Baker Hughes, Inc., Mr. Larson served as Vice President, Operations for the Gulf of Mexico and Deepwater Business Development Manager. From 1990 until 1998, he served as operations manager and field engineer for Western Atlas, Inc. (which was acquired by Baker Hughes) in the United States and Venezuela.
James W. McFarland, Ph.D. joined our Board of Directors in November 2006. Dr. McFarland currently serves as a member of the Nominating and Corporate Governance, Compensation and Audit Committees. Dr. McFarland is the Rolanette and Berdon Lawrence Distinguished Chair in Finance and the Freeman School Distinguished Chair in Business in the A. B. Freeman School of Business at Tulane University. Dr. McFarland has continuously served as a member of Tulane’s faculty since joining the university in 1988. He also serves as the Executive Director of the Tulane Energy Institute. Previously, Dr. McFarland was the Dean of the Freeman School from July 1, 1988 through June 30, 2005. Prior to joining the faculty at Tulane, he was the Dean of the College of Business Administration at the University of Houston. Dr. McFarland also has served on the faculties of Texas A&M University, the University of Louisiana-Lafayette, the University of Rhode Island, and the University of New Mexico. In addition to his academic appointments, he has worked as a researcher for the University of California Los Alamos National Laboratory and the Presidential Commission on the Nation’s Water Resources. From March 1995 until April 2011, Dr. McFarland served on the Board of Directors and the Compensation Committee of Stewart Enterprises, Inc., a publicly-traded company.
Gary L. Warren joined our Board of Directors in December 2005. Mr. Warren is currently Chairman of the Nominating and Corporate Governance Committee and is also a member of the Audit and Compensation Committees. From October 1999 until his retirement in September 2005, Mr. Warren served as President of the Drilling and Well Services Division and Senior Vice President of Weatherford International Ltd., a provider of mechanical solutions, technology and services for the drilling and production sectors of the oil and gas industry. From May 2009 until June 2011, Mr. Warren served as a director of Trican Well Service Ltd, a Calgary-based, publicly-traded company that provides pressure pumping and related oil field services in Canada, the United States, Russia and many other international locations. Mr. Warren was a member of Trican’s Compensation Committee and Nominating and Corporate Governance Committee.
No family relationships exist among any of our directors or executive officers.
Further information regarding the qualifications for each member of the Board of Directors can be found in the “Director Nominations” section of this proxy under the heading Director Qualifications .
CORPORATEGOVERNANCE
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Under Delaware law, ourOur business and affairs are managed under the direction of the Board of Directors. The Board of Directors establishes broad corporate policies, has responsibility for our overall performance and directionstrategy and authorizes various types of transactions but is not involved in the details of the day-to-day operations. Membersoperations of the business. The Board of Directors maintains a focus on our core values, which we believe will create long-term value for our stockholders.
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Company and the Board;
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The independent directors meet regularly in executive sessions at which time only independent directors are present, and the Chairman of the Board chairs those sessions.
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Given the substantial overlapdiversity and depth of knowledge of our Board members. The general qualification criteria of director nominees is that such nominee:
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| Board Orientation and Education |
| CORPORATE GOVERNANCE | 2019 Proxy Statement | 5 | |
Stockholder Communication with Board Members |
We are committed to adhering to sound principles of corporate governance and have adopted Corporate Governance Guidelines that the Board of Directors believes promote the effective functioning of the Board of Directors, its committees and our Company. The Corporate Governance Guidelines conform to the NYSE corporate governance listing standards and SEC rules and address, among other matters, director qualifications, independence and responsibilities, majority vote principles, Board committees, Board access to senior management, the independent accountants and other independent advisors, compensation of directors and assessments of committee performance. The Corporate Governance Guidelines are available CorporateGovernance Guidelines and Code of EthicsCorporate Governance Guidelinesin the “Governance Documents” section under “Corporate Governance” on our website at www.newpark.comwww.newpark.com/corporate-governance-guidelines/ and are also available, without charge, upon request to our Corporate Secretary at Newpark Resources, Inc., 9320 Lakeside Boulevard, Suite 100, The Woodlands, Texas 77381.Our Corporate Governance Guidelines provide for a majority vote principle in connection with the election of our directors. Majority Vote PolicyPrincipleUnder our Corporate Governance Guidelines, inIn an uncontested election (i.e., an election where the number of nominees is not greater than the number of directors to be elected),elected, any nominee who receivesmust receive a greater number of votes “withheld” from his“for” such nominee’s election than votes “for” his“withheld” from such nominee’s election. In a contested election must promptly tender his resignationwhere the number of nominees is greater than the number of directors to be elected, the Chairmanstandard for election is a plurality of the Board unless he has previously submitted an irrevocable resignation in accordance with our Corporate Governance Guidelines. votes cast.Director Resignation Policy The Corporate Governance Guidelines also provide that the Board of Directors may require, in order for any incumbent director to become a nominee for further service on the Board of Directors, that the incumbent director submit to the Board of Directors an irrevocable resignation. The irrevocable resignation will be conditioned upon, and shall not become effective until there has been (i) been:a failure by that nominee to receive more votes “for” hissuch nominee’s election than votes “withheld” from hissuch nominee’s election in any uncontested election of directorsdirectors; and (ii) acceptance of the resignation by the Board of Directors.In the event a director receives a greater number of votes “withheld” from hissuch director’s election than “for” hissuch director’s election, the Nominating and Corporate Governance Committee will make a recommendation to the Board of Directors regarding the action to be taken with respect to the tendered resignation. A director whose resignation is being considered will not participatein any committee or Board of Directors meetings where the consideration is hissuch director’s resignation. The Board of Directors will act on the recommendation of the Nominating and Corporate Governance Committee’s recommendationCommittee within 90 days following the certification of the stockholder vote, and the Board of Directors will promptly and publicly disclose its decision. Each of the nominees for election to the Board of Directors has submitted an irrevocable resignation in accordance with our Corporate Governance Guidelines.Director Retirement Age Our Corporate Governance Guidelines include a director retirement age policy. Under that policy, any person who is 75 years of age or more shall not be eligible to be elected as a director, although any director reaching the age of 75 while in office may serve the remainder of such director’s term until the next annual meeting of stockholders.Our Corporate Governance Guidelines require the non-management directors meet at least twice each year in executive session, without management present. However, management employees may be invited to attend portions of these meetings if deemed appropriate by the non-management directors to provide information necessary for the meetings. Executive sessions were held as part of every regularly scheduled Board meeting in 2018 and were presided over initially by Mr. Anderson, our former non-executive Chairman of the Board, until his retirement from the Board in May 2018, and subsequently by Mr. Best, our current non-executive Chairman of the Board, who assumed such office in May 2018.Executive Sessions ofNon-Management DirectorsCORPORATE GOVERNANCE 2019 Proxy Statement | 6 Interested parties may direct their concerns to the Chairman of the Board or to any other non-management director or directors by following the procedures set forth 7Table Of Contentsin the section entitled “Stockholder Communication with Board Members.”
Stock Ownership Value Required at 5x Annual Cash Retainer Stock Ownership Value at December 31, 2015(1) David C. Anderson Anthony J. Best G. Stephen Finley Roderick A. Larson James W. McFarland, PhD Gary L. Warren $ 650,000 $ 818,301 $ 275,000 $ 173,163 (2) $ 275,000 $ 840,724 $ 275,000 $ 173,163 (2) $ 275,000 $ 1,114,798 $ 275,000 $ 912,849
Stock Ownership Value Required at 5x Annual Cash Retainer | Stock Ownership Value at December 31, 2018(1) | ||||||
| Anthony J. Best | $ | 650,000 | $ | 685,461 | |||
| G. Stephen Finley | $ | 275,000 | $ | 1,306,592 | |||
| Roderick A. Larson | $ | 275,000 | $ | 672,683 | |||
| John C. Mingé | $ | 275,000 | $ | 104,788 | (2) | ||
| Rose M. Robeson | $ | 275,000 | $ | 95,857 | (3) | ||
| Gary L. Warren | $ | 275,000 | $ | 1,557,470 | |||
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| (1) | Stock ownership value is calculated based on the number of shares of our common stock owned by the director or members of |
(2) |
Mr. Mingé was appointed to the Board effective as of December 1, 2017 and |
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| (3) | Ms. Robeson was appointed to the Board effective as of |
The Board of Directors also has adopted a Code of Ethics for Senior Officers and Directors that applies to all of our directors, our principal executive officer, principal financial officer, principal accounting officer or controller, and other senior officers. The Code of Ethics contains policies and procedures applicable to our directors and supplements our Corporate Compliance and Business Ethics Manual which is applicable to all of our employees including our principal executive officer, principal financial officer, principal accounting officer and other senior officers. The purposes of the Code of Ethics, among other matters, are to deter wrongdoing and to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. The Code of Ethics promotes full, fair, accurate, timely and understandable disclosure in reports and other documents that we file with, or submit to, the SEC and in other public communications. The Code of Ethics also requires compliance with applicable governmental laws, rules and regulations including, without limitation, insider trading laws. The Code of Ethics further requires the prompt internal reporting of violations of the Code of Ethics to an appropriate person or persons and accountability for adherence to the Code of Ethics.
Any amendments to, or waivers of, the Code of Ethics with respect to our principal executive officer, principal financial officer or principal accounting officer or controller, or persons performing similar functions, will be disclosed in a Current Report on Form 8-K, which will be available on our website promptly following the date of the amendment or waiver.
Copies of our Code of Ethics for Senior Officers and Directors and our Corporate Compliance and Business Ethics Manual are available in the “Governance Documents” section under “Corporate Governance” on our website at www.newpark.com and are also available in print upon request from our Corporate Secretary.
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| CORPORATE GOVERNANCE | 2019 Proxy Statement | 7 | |
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Our Corporate Governance GuidelinesDirectors, the “Codes”). The purposes of the Codes, among other matters, are to deter wrongdoing and to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. The Codes promote full, fair, accurate, timely and understandable disclosure in reports and other documents that we file with, or submit to, the SEC and in other public communications. The Codes also require compliance with applicable governmental laws, rules and regulations, including, without limitation, insider trading laws. The Codes further require the non-management directors to meet at least twice each year in executive session, without management present. However, management employees may be invited to attend portionsprompt internal reporting of these meetings if deemed appropriate by the non-management directors to provide information necessary for the meetings. Executive sessions were held as part of every regularly scheduled Board meeting in 2015 and were presided over by Mr. Anderson, our non-executive Chairmanviolations of the Board.
Interested parties may direct their concernsCodes to an appropriate person or persons and accountability for adherence to the ChairmanCodes.
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The Board evaluates its leadership structure and role in risk oversight on an ongoing basis. The decision on whether to combine or separate the Chairman and Chief Executive Officer (“CEO”) role is determined on the basis of what the Board considers to be best for our Company. Our current Board leadership structure separates the role of Chairman and CEO. The Board believes that part of an effective Board leadership structure is to have either an independent director as the Chairman or to designate a Lead Director. The Nominating and Corporate Governance Committee and the Board currently believe that the separationdate of the role of CEO and Chairman (who is an independent director) is appropriate because it provides, among other things, sufficient independence between the Board and management, Board member leadership by an independent director, and facilitates our Board’s ability to carry out its roles and responsibilities on behalfamendment or waiver.
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The Nominating and Corporate Governance Committee is responsible for establishing an orientation plan for new directors, along with the coordination and scheduling of educational opportunities for the Board. The orientation program includes a review of our governance documents and policies, along with meetings with our executive leaders, and tours of key facilities. In addition, over the last several years, the Nominating and Corporate Governance Committee has coordinated training sessions from outside experts related to, among other things: risk assessment and management; director’s obligations in the context of mergers and acquisitions; industry-specific education (oil and gas geology related to shale formations; demonstrations of drilling fluids applications; etc.) and macro-economic trends in the U.S. and global economies.
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The Board of Directors has established three standing committees. These committees, are the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. All of these committees operate under written charters approved by the Board of Directors. The Chairman of the Board attends all Committeecommittee meetings, but does not cast a vote therein. Each committee operates under a written charter approved by the Board of Directors. Copies of these charters, which set forth the specific responsibilities of the committees, as well as copies of our Corporate Governance Guidelines, theour Code of Business Ethics and Conduct, our Code of Ethics for Senior Officers and Directors and theour charter of the Chairman of the Board, are available under the “Corporate Governance” section on our website at www.newpark.com.www.newpark.com/corporate-governance/. Stockholders also may obtain printed copies of these items, without charge, by contacting us at the following address:
| Audit Committee |
The Audit Committee is responsible for the selection, evaluation, compensation and, when necessary, replacement of the independent registered public accounting firm. The Audit Committee also has responsibility for providing independent review and
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| CORPORATE GOVERNANCE | 2019 Proxy Statement | 8 | |
| Compensation Committee |
consent once.
Nominating and Corporate Governance Committee |
The specific responsibilities of the Nominating and Corporate Governance Committee are set forth in the Committee’scommittee’s charter, a copy of which is available in the “Board Committees & Charters” section under “Corporate Governance” on our website at www.newpark.comwww.newpark.com/nominating-and-governance-committee/ and is also available in print upon request from our Corporate Secretary.
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| CORPORATE GOVERNANCE | 2019 Proxy Statement | 9 | |
The Nominating and Corporate Governance Committee is responsible for periodically evaluating and making recommendations to the Board of Directors with respect to the size and composition of the Board of Directors. Although we have not adopted a formal policy specifically addressing the consideration of diversity when evaluating candidates for election to the board, the charter of our Nominating and Corporate Governance Committee and our Corporate Governance Guidelines provide that diversity shall be one of the criteria considered for candidates. The Committee considers the term “diversity” to include a diversity of viewpoints, expertise and experience as well as gender, ethnicity and background. When analyzing director nominations and director vacancies, the Nominating and Corporate Governance Committee strives to recommend candidates for director positions who will create a Board that reflects diversity, including but not limited to background, experience, gender, ethnicity, and country of citizenship. The Nominating and Corporate Governance Committee seeks to identify prospective directors who will strengthen the Board of Directors and evaluates prospective directors, including incumbent directors, in accordance with the criteria set forth in our Corporate Governance Guidelines and other criteria as may be set by the Board of Directors or the Committee. Some of the principal criteria include whether the candidate (i) is of the highest integrity and character; (ii) has familiarity with our business and industry; (iii) has independence of thought and financial literacy; (iv) is willing and able to devote sufficient time to effectively carry out the duties and responsibilities of a director; and (v) has the objectivity, ability and desire to represent the interests of the stockholders as a whole, free from any conflict of interest. Our Corporate Governance Guidelines include a director retirement age policy. Under that policy, any person who is 75 years of age or more shall not be eligible to be elected as a director, although any director reaching the age of 75 while in office may serve the remainder of his or her term until the next annual stockholders meeting.
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Our Board members represent a desirable mix of diverse backgrounds, skills and experiences and they all share the personal attributes of effective directors described above. The Board monitors the effectiveness of this approach through the annual self-assessment process. Below are some of the specific experiences and skills of our directors:
David C. Anderson
As the former President and CEO, Executive Search for the international executive search firm Heidrick & Struggles and later as President and COO of the worldwide firm, Mr. Anderson has extensive experience with public company management as well as business strategy. Further, he gained valuable insight into executive compensation, recruitment, development and succession planning. Since joining the Board, Mr. Anderson served as Chairman of a Special Litigation Committee of our Board, providing him with experience in conducting internal investigations and risk assessment.
Anthony J. Best
Mr. Best’s experience in upstream oil and gas exploration and production, in a variety of basins and geographies will provide our Board with further understanding of the needs of our customers. His senior management and executive level experience, along with his service on the board of SM Energy, brings to the Board experience in finance, executive compensation matters and corporate governance for public companies, as well as perspective on management and operational matters.
G. Stephen Finley
Mr. Finley has brought to the Board of Directors a deep understanding of both the oil and gas industry and the energy services business. Through his senior executive positions at Baker Hughes and with a major public accounting firm, Mr. Finley has extensive knowledge in the areas of accounting, auditing, and compliance, both of domestic and international businesses. Moreover, his knowledge of the energy services business provides the Board of Directors with a valuable resource in its assessment of our performance, opportunities, risks and strategy.
Paul L. Howes
Mr. Howes’ background includes a strong understanding of industrial and chemical manufacturing processes and practices, much of which is directly applicable to our products and services. Based on his experience in both larger and smaller companies, he offers leadership and insight into best management practices, employee development, compensation, marketing and operations. He also has previous experience with leading an executive team, in both domestic and international markets. Mr. Howes has also developed other responsibilities with senior executives in the energy industry through serving in leadership roles on the boards of the American Petroleum Institute (“API”) and the National Ocean Industries Association (“NOIA”).
Roderick A. Larson
Mr. Larson brings to the Board of Directors over 25 years of experience in global oilfield services, which, in the past, included management responsibility for a drilling fluids business. Based upon his more recent experience and in his current position as President of Oceaneering International, we expect him to provide valuable insight into our efforts to further penetrate the deepwater market, which is an important element of our global strategy. In addition, based on his experience at all levels of various organizations, Mr. Larson offers leadership and understanding of the operations and management of a large, global business.
James W. McFarland, PhD
Dr. McFarland teaches and undertakes research in the areas of econometrics, energy and resource economics, international finance, statistics and strategy. His extensive work in these areas contributes to the Board of Directors a solid understanding of the energy industry, best practices in business management and expertise in financial analysis. Further, Dr. McFarland served on the Special Litigation Committee of our Board and another board on which he previously served, providing him with substantive experience in conducting internal investigations and internal controls. Dr. McFarland has also previously served on the Audit Committees of three (3) publicly-traded companies providing him with valuable experience in this area as well.
Gary L. Warren
Mr. Warren’s experience as a senior executive for Weatherford International gave him an extensive background in the oil and gas services business. This experience provides our Board of Directors with insight into our customers, competitors and suppliers. With over 20 years of experience as an executive in the industry in which we compete (and much of it on a global basis), he has the ability to offer guidance and direction regarding our expansion in international markets. Mr. Warren also brings to our Company his knowledge in the areas of business and operations management.
The Nominating and Corporate Governance Committee will consider nominees recommended by stockholders who meet the eligibility requirements for submitting stockholder proposals for inclusion in the next proxy statement, including those eligibility requirements set forth in our Corporate Governance Guidelines. In order to nominate a director at the annual meeting, our bylaws require that a stockholder follow the procedures set forth in the bylaws. (Our bylaws are available under “Governance Documents” in the “Corporate Governance” section of our website at www.newpark.com.) In order to recommend a nominee for a director position, a stockholder must be entitled to vote in the election of directors and must provide notice in accordance with our bylaws. Stockholder nominations must be made pursuant to written notice delivered in accordance with the following instructions no later than ninety (90) days prior to the meeting; provided, that if the date of the meeting is not publicly announced more than one hundred (100) days prior to the meeting, such notice will be considered timely if properly delivered no later than the close of business on the tenth (10th) day following the day on which such announcement regarding the date of the meeting was communicated to the stockholders.
The stockholder notice must set forth the following:
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In addition to complying with the foregoing procedures, any stockholder nominating a director must also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder.
The stockholder making the recommendation also should submit information demonstrating the number of shares he or she owns. Stockholders may send recommendations for director candidates for the 2017 Annual Meeting to the Nominating and Corporate Governance Committee by U.S. mail or overnight delivery at the following address: Chair, Nominating and Corporate Governance Committee, c/o Corporate Secretary, Newpark Resources, Inc., 9320 Lakeside Boulevard, Suite 100, The Woodlands, Texas 77381.
Candidates recommended by the Nominating and Corporate Governance Committee must include a sufficient number of persons who, upon election, would be independent directors having the skills, experience and other characteristics necessary to provide qualified persons to fill all Board committee positions required to be filled by independent directors. In considering any candidates recommended by stockholders, the Nominating and Corporate Governance Committee will take into account the same factors as apply to all other prospective nominees.
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The Board of Directors has established a process for stockholders to send communications, other than sales-related communications, to one or more of its members. These communications should be sent by letter addressed to the member or members of the Board of Directors to whom the communication is directed, care of the Corporate Secretary, Newpark Resources, Inc., 9320 Lakeside Boulevard, Suite 100, The Woodlands, Texas 77381. These communications, other than sales-related communications, will be forwarded to the Board member or members specified.
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We have a policy encouraging the attendance of all directors at annual meetings of stockholders, and we make all appropriate arrangements for directors that choose to attend. All of our directors attended the 2015 Annual Meeting of Stockholders.
EXECUTIVEOFFICERS
As of March 18, 2016,28, 2019, our executive officers, their ages, positions and positionsbiographical information with us were as follows:
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| Paul L. Howes | Age 63 | |||||
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| President and Chief Executive Officer | ||||
A description of the business experience of Mr. Howes during the past five years can be found in the “Election of Directors” section of this Proxy Statement under the heading “Nominees and Voting.” | ||||||
| Gregg S. Piontek | Age 48 | |||
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| Senior Vice President and Chief Financial Officer | ||
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| E. Chipman Earle | Age 46 | |
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Mr. Earle joined us in August 2018 as our Vice President and Special Advisor and then transitioned into the role of Vice President, General Counsel, Chief Administrative Officer, Chief Compliance Officer and Corporate Secretary in September 2018. From July 2012 through July 2017, Mr. Earle served as Senior Vice President, General Counsel and Corporate Secretary of Bristow Group Inc., a provider of industrial aviation services to the offshore energy industry in Europe, Africa, the Americas and Asia Pacific. From March 2006 until February 2012, Mr. Earle held several positions in the legal department of Transocean Ltd., including as Assistant Vice President, Global Legal. | ||
| Matthew S. Lanigan | Age 48 | |
 | Vice President and President of Mats & Integrated Services | |
| Mr. Lanigan joined us in April 2016 as Vice President and President of Newpark Mats & Integrated Services LLC. From April 2014 to June 2015, Mr Lanigan served as a Managing Director of Custom Fleet Services in Australia for GE Capital Corporation, a financial services unit of General Electric. From September 2010 to March 2014, he served as Commercial Excellence Leader in the Asia Pacific for GE Capital. Previous to September 2010, Mr. Lanigan held various executive positions in marketing and sales for GE Capital Corporation. | ||
| Bruce C. Smith | Age 67 | ||||
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| Executive Vice President and President of Fluids Systems | |||
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| Mr. Smith joined us in April 1998 as our Vice President, International. In November 2018, he returned to the role of Executive Vice President and President of | |||
| Douglas L. White | Age 50 | |||
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| Corporate Controller and Chief Accounting Officer | ||
| Mr. White joined us in April 2014 as our Corporate Controller. In May 2014, Mr. White was appointed as our Chief Accounting Officer. From February 2008 until January 2014, Mr. White served as Director of Financial Reporting for Cooper Industries where he was responsible for corporate accounting and external reporting. From July 2004 until February 2008, he served as Vice President and Corporate Controller of MMI Products, Inc. Prior to that, Mr. White held various audit positions with Ernst & Young LLP. Mr. White is a Certified Public Accountant. | ||||
A description of the business experience of Mr. Howes during the past five years can be found in the “Election of Directors” section of this proxy under the heading “Business Experience of Director Nominees.”
Gregg S. Piontek joined us in April 2007 as our Vice President, Controller and Chief Accounting Officer. He was appointed as our Chief Financial Officer in October 2011. Before joining us, Mr. Piontek served in various financial roles for Stewart & Stevenson Services, Inc. and Stewart & Stevenson, LLC from June 2001 through March 2007, including Divisional Controller, Assistant Corporate Controller, and as Vice President and Chief Accounting Officer. Prior to that, Mr. Piontek served in various financial roles at General Electric, CNH Global N.V. and Deloitte & Touche LLP.
Mark J. Airola joined us in October 2006 as our Vice President, General Counsel and Chief Administrative Officer and was appointed as our Secretary in December 2006 and Chief Compliance Officer in March 2007. He was named Senior Vice President in February 2011. Mr. Airola has practiced law for 32 years, primarily with large, publicly traded companies. Most recently, from September 1995 through September 2006, Mr. Airola was employed by BJ Services Company, a provider of pressure pumping and other oilfield services to the petroleum industry, serving initially as Assistant General Counsel and subsequently, in 2003, also being named as Chief Compliance Officer (and as an executive officer). From February 1988 to September 1995, Mr. Airola held the position of Senior Litigation Counsel at Cooper Industries, Inc., a global manufacturer of electrical products and tools, and had initial responsibility for managing environmental regulatory matters and litigation and subsequently managing the company’s commercial litigation. From 2011 until present, Mr. Airola serves on the Board of Junior Achievement of Southeast Texas.
Bruce C. Smith joined us in April 1998 as our Vice President, International. Since October 2000, he has served as President of Fluids Systems. He also held the title of Vice President of our Company beginning in 2006 and he was named as Executive Vice President of our Company in March 2011. Prior to joining us, Mr. Smith was the Managing Director of the U.K. operations of M-I Swaco, a competitor of Newpark Drilling Fluids, where he was responsible for two business units, including their drilling fluids unit.
Jeffery L. Juergens joined us in October 2010 as President of Mats and Integrated Services and Environmental Services and he continued to serve as the President of Environmental Services until it was sold in March 2014. From February 2009 to March 2010, Mr. Juergens held the position of Chief Executive Officer of B&B Oilfield Services, an oilfield wellhead equipment supply company. Previously, from August 2007 to February 2009, he was at Omni Energy Services, where he held the position of General Manager for the company’s Seismic Drilling Division. From August 1997 to August 2007, Mr. Juergens served as Vice President of International Operations for SPS International, a wellbore cleanup tools and technology company, with responsibility for the development of operations in Canada and Latin America. Prior to that, Mr. Juergens held management positions with both BJ Services and Baker Hughes.
Douglas L. White joined us in April 2014 as our Corporate Controller. In May 2014, Mr. White was appointed as our Chief Accounting Officer. From February 2008 until January 2014, Mr. White served as Director of Financial Reporting for Cooper Industries where he was responsible for corporate accounting and external reporting. From July 2004 until February 2008, he served as Vice President and Corporate Controller of MMI Products, Inc. Prior to that, Mr. White held various audit positions with Ernst & Young LLP. Mr. White is a Certified Public Accountant.
EXECUTIVE OFFICERS | 2019 Proxy Statement | 10 | |
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| Based solely on Amendment No. 7 to Schedule 13G filed with the SEC on February |
| (3) | Based solely on Amendment No. 10 to Schedule 13G filed with the SEC on February 8, 2019 by Dimensional Fund Advisors LP. According to the Schedule 13G/A, Dimensional Fund Advisors LP has sole voting power over |
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| OWNERSHIP OF COMMON STOCK | 2019 Proxy Statement | 11 | |
Shares Beneficially Owned Name Number Percent(1) Paul L. Howes Bruce C. Smith Mark J. Airola Gregg S. Piontek Jeffery L. Juergens James W. McFarland, PhD Gary L. Warren G. Stephen Finley David C. Anderson Anthony J. Best Roderick A. Larson All current directors and executive officers as a group (12 persons) 1,456,755 (2) 1.7 % 619,805 (3) * 575,207 (4) * 339,925 (5) * 335,502 (6) * 213,206 (7) * 168,206 (8) * 145,706 (9) * 141,820 (10) * 30,011 (11) * 30,011 (12) * 4,070,261 (13) 4.7 %
| Shares of Common Stock Beneficially Owned | |||||
| Name | Number | Percent (1) | |||
| Paul L. Howes | 1,959,543 | (2) | 2.1 | % | |
| Bruce C. Smith | 766,052 | (3) | * | ||
| Mark J. Airola | 547,973 | (4) | * | ||
| Gregg S. Piontek | 528,597 | (5) | * | ||
| Gary L. Warren | 226,706 | * | |||
| G. Stephen Finley | 190,188 | * | |||
| Phillip T. Vollands | 129,870 | (6) | * | ||
| Anthony J. Best | 99,776 | * | |||
| Roderick A. Larson | 97,916 | * | |||
| Matthew S. Lanigan | 144,350 | (7) | * | ||
| E. Chipman Earle | 50,000 | (8) | * | ||
| John C. Mingé | 15,253 | * | |||
| Rose M. Robeson | 13,953 | * | |||
| All current directors and executive officers as a group (14 persons) | 4,862,909 | (9) | 5.2 | % | |
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| (5) | Includes (i) |
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(6) | Includes 59,573 shares issuable upon the exercise of options. |
(7) | Includes (i) |
| (8) | Includes 50,000 shares subject to restricted stock awards. |
| (9) | Includes (i) 2,167,462 shares issuable upon the exercise of options; (ii) as of |
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| OWNERSHIP OF COMMON STOCK | ||
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COMPENSATIONDISCUSSION AND ANALYSIS
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| Named Executive Officer | Position Title | |
Paul L. Howes | President and Chief Executive Officer | |
Gregg S. Piontek |
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E. Chipman Earle | VP, General Counsel, Chief Administrative Officer, Chief Compliance Officer and Corporate Secretary | |
| Matthew S. Lanigan | VP and President of Mats & Integrated Services | |
| Bruce C. Smith | EVP and President of Fluids Systems | |
Mark J. Airola | Former SVP, General Counsel, Chief Administrative Officer and Corporate Secretary | |
| Former VP and President of | |
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Executive Summary
Our performance.In 2015, we successfully navigated a very difficult market for our oil and gas-related businesses. Driven by a decline in commodity pricing, oil and gas drilling activity levels dropped significantly during 2015, most notablychemistry solutions in the North Americanoilfield market, and engineered worksite and access solutions used in various commercial markets. We believeIn our NEOs were instrumental in takingannual enterprise risk management survey, our Board of Directors and senior management identified staff bench strength as the actions needed to quickly adjusttop enterprise risk currently facing the size and cost structure of the Company, consistent with the changing market conditions, while preserving the core business in anticipation of an eventual recovery. Below is a summary of significant accomplishments during 2015:
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Company. Our efforts to improve governance and risk management. In the last several years we have undertaken a number of changes in an effort to improve compensation governance and help ensure alignment with stockholder interests, including:
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Compensation-related Highlights for 2015. Following are some of the key compensation-related decisions for 2015, all of which are discussed in greater detail in the remainder of this Compensation Discussion and Analysis:
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We design the executive compensation programlong-term sustainability depends on our ability to attract, motivate and retain the executive talenthighly talented individuals that we need in order to implement our business strategy and to improve our long-term profitability and stockholder value. To this end,The key objectives of our executive compensation program is characterized byinclude the following principal objectives:
following:
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Competitiveness.
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Total direct compensation for our NEOs in 2015 fell below the market median range (more than 10% below the market median on average). The Compensation Committee continues to monitor the competivenesscompetitiveness of our programs and to make adjustments to individual pay levels as appropriate in order to provide total direct compensation opportunities at our targeted level of the market (i.e., market median). In light of current market conditions, no changes were made to NEO pay opportunities during 2015 and salaries have actually been reduced for 2016.
Pay-for-Performance. In establishing targeted compensation levels,market.
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| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 13 | |
The table below summarizes the principal components of our pay-for-performance approach to our executive officer compensation. A more detailed description of each component of our NEOs’ pay can be found in the “Direct Compensation” section of this proxy under the heading “Elements of Executive Compensation.”
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The Compensation Committee typically sets 60% to 90% of the NEO’s target compensation as contingent, performance-based pay (both short-term and long-term performance). By placing particular emphasis on performance-based variable pay, we require that outstanding individual and corporate performance is achieved for an executive’s compensation to significantly exceed the median compensation levels (based on benchmarks discussed in greater detail below). During 2015, approximately 77% of actual compensation for our CEO and 66% of actual compensation for our other NEOs was delivered in the form of variable pay.
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Summary of Realized Pay for 2015. We believe it is important to keep in mind that, unlike short-term cash incentive compensation (which rewards executives for performance relative to pre-determined goals in the previous year), we view equity incentive compensation as a forward-looking incentive. We grant these awards not to recognize past performance, but to align the long-term interests of our executives with those of our stockholders and to provide an incentive which rewards executives over time for helping to drive future growth in stockholder value. In particular, we view stock option grants as performance-based compensation because they only have value to the extent that our stock price appreciates after the date of grant.
Further to this view of equity incentive compensation, we have summarized below the realized compensation for our NEOs during 2015 in contrast to the compensation numbers presented in the Summary Compensation Table. The following table represents supplemental information and is not intended to be a substitute for the information provided in the Summary Compensation Table on page 45, which has been prepared in accordance with the SEC’s disclosure rules. In the table below we have included two alternate definitions of NEO total direct compensation for 2015. Each measure includes 2015 actual cash compensation (2015 salary plus annual incentive earned for 2015 performance), but differs in how we include the equity component:
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Measures of 2015 Total Compensation NEOs at the End of 2015 Summary Compensation Table Total Direct Compensation Realized Total Direct Compensation Realized Total Direct as a Percent of Summary Compensation Table Paul L. Howes Gregg S. Piontek Bruce C. Smith Mark J. Airola Jeffery L. Juergens CUMULATIVE TOTALS $ 3,305,426 $ 2,380,681 72 % $ 1,058,743 $ 743,224 70 % $ 1,277,332 $ 1,073,920 84 % $ 1,144,263 $ 932,125 81 % $ 1,007,446 $ 944,200 94 % $ 7,793,210 $ 6,074,150 78 %
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As shown in the table above, despite meaningful grants of equity incentives during 2015, the actual aggregate compensation realized by our NEOs during 2015 was 78% of their total compensation as reflected in the Summary Compensation Table for 2015.
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Absolute Alignment: Net Realizable Pay by Year vs. TSR.The chart and accompanying table below demonstrate the alignment of CEO "net realizable pay" with the Company’s TSR performance by year. While similar, “net realizable pay” is calculated differently than “net realized pay,” which is described in the preceding section titled “Summary of Realized Pay for 2015.” Net realizable pay is the sum of:
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As shown, the changes in CEO realizable pay opportunities by year have been well aligned with the returns experienced by our stockholders, in large part because of the significant portion of CEO pay that is variable. The decline in the value of unrealized equity awards for Mr. Howes during 2015 outweighed the other components of realizable pay shown above, producing a negative pay number for the year.
Relative Alignment: Realizable Pay as a Percent of Target vs. Performance against Peers. In order to demonstrate the alignment of CEO pay relative to peers, we compared (i) CEO realizable pay as a percent of target total direct compensation for the three-year period from 2013 to 2015 to (ii) our performance relative to our peer group over the same period.
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The results of this review for pay opportunities granted to our CEO for the fiscal years 2013-2015 are presented in the chart below.
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As shown, CEO realizable pay for the period 2013 – 2015 was reasonably well-aligned with TSR performance relative to our peers. Mr. Howes’ realizable pay as a percentage of target over this period fell within the alignment fairway. However, while we outperformed relative to our peer group, absolute TSR declines over the period for the Company (and the peer group as a whole) contributed to Mr. Howes’ placement at the lower edge of that fairway.
Stockholder Alignment.We believe that the interests of our stockholders and executives should be aligned by ensuring that a portion of our executives’ compensation is directly determined by:
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In support of our goal of stockholder alignment, the executive compensation program also includes stock ownership guidelines for executives and Directors.directors. Further detail on the stock ownership guidelines for our non-executive directors is contained in the “Corporate Governance” section of this Proxy Statement under the heading “Stock Ownership Guidelines.” The current guidelinerequirement levels of stock ownership are shown below:
| Executive & Director Stock Ownership Guidelines | |
Title | Ownership |
Chief Executive Officer | 5x salary |
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Other Designated Officers/Executives | 1x salary |
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Compensation governance and risk assessment.2018.
Compensation Governance and Risk Assessment |
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The risks are assessed for each component and metric, along with consideration being given to alternative compensation approaches. To the extent that risks are identified, the Compensation Committee also considers whether the risks have or can be mitigated through various features of the compensation plans. Further discussion of the risk assessment is contained in the “Executive“Executive Compensation” section in this proxyProxy Statement under the heading “Risk“Risk Assessment of Compensation Programs.”
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The Company asks the stockholders to approve, on an advisory basis, the compensation ofAdditionally, our NEOs as disclosed in the Company’s proxy statement (commonly known as the “Say on Pay” advisory votes). While the Say on Pay votes are advisory votessenior management and are not binding on the Company,Chairman of the Compensation Committee, strongly values the opinions of thewhen requested, discussed with stockholders as expressed inpart of our engagement efforts over the Say on Pay votes. On an ongoing basis,past six months the Compensation Committee:
incentive structure and resulting levels of risk associated with our executive compensation program to seek alignment with our stockholders.
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| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 14 | |
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In making its determinations,The table below summarizes the Compensation Committee is guided by its obligations to the Company’s stockholders and its business judgment concerning what is in the best interestprincipal elements of the stockholders.
In 2015, the Company’s stockholders voted 96.1% (excluding broker non-votes) in favorour executive officer compensation program, which we believe furthers our key objectives. A more detailed description of each element of our executive compensation practices as disclosedprogram can be found in the Company’s proxy statement. In advancesection “Our Direct Compensation Elements.”
| Elements of Our Executive Compensation Program | |||||
| Element | Purpose | Description | |||
| Attract/Retain | Pay-for-performance | Stockholder Alignment | |||
| FIXED | Base Salary | ü | Annual Merit Review Adjustments, if any, consider each individual’s experience, performance and contributions over time. Provides a competitive salary relative to our peer groups. | ||
| VARIABLE | Annual Cash Incentive | ü | ü | ü | Annual Performance Awards are based on achieving corporate and business unit financial and safety goals on an annual basis, and can include individual objectives or strategic goals. |
| Long-Term Incentives | ü | ü | ü | Multi-Year Performance Long-term incentive awards with multi-year vesting periods. Realized value contingent upon long-term growth in stockholder value, particularly in the case of equity awards. Performance-based cash awards provide the opportunity to earn from zero to 150% of target at the end of the three-year performance period; value tied directly to stock performance without diluting stockholders. | |
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Role of Compensation Committee.program. The Compensation Committee of the Board of Directors currently consists of five independent non-employee directors, Anthony J. Bestdirectors: John C. Mingé (Chairman), G. Stephen Finley, Roderick A. Larson, James W. McFarland, PhDRose M. Robeson and Gary L. Warren. The non-executive Chairman of the Board, David C. Anderson,Anthony J. Best, attends the meetings of thisour Compensation Committee but does not vote (except in connection with compensation decisions related to our CEO).
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As part of its authority and responsibilities, our Compensation Committee establishes our overall compensation philosophy and
Engagement of an Independent Advisor. The
| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 15 | |
| Role of an Independent Advisor |
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The Compensation Committee continues to monitor the independence of its compensation consultant on a periodic basis.
Role of executive officers and consultants.
| Role of Executive Officers |
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Compensation benchmarking relative to market. The
Accordingly, the Compensation Committee compares compensation levels for the NEOs within our executive compensation program to compensation levels at companies in an industry peer group. For 2015, the compensation consultants2018, Pearl Meyer analyzed the executive compensation data in proxy statements of a peer group consisting of publicly tradedpublicly-traded oilfield services and equipment companies comparable in size to us in annual revenues, market capitalization, enterprise value, and corporate assets. We reviewOur Compensation Committee reviews the peer group periodically, typically at the end of each calendar year, so that the composition of the peer group continues to include companies whose size and business models are comparable to ours and who are more likely to compete with us for executive talent. We haveAs part of our stockholder engagement process over the past six months, we also taken into accountreviewed with our stockholders the appropriateness of our peer groups utilized by third party proxy advisory services suchgroup as ISS and Glass-Lewis.
well as our peer group selection process.
| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 16 | |
| Peer Group |
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group for 2018:
| Financial Size | ||||||||||
| Ticker | Company Name | 2017 Fiscal Year Revenues ($MM) | 2018 Fiscal Year Revenues ($MM) | December 2018 Market Cap ($MM) | ||||||
| BAS | Basic Energy Services, Inc. | NA | $ | 965 | $ | 102 | ||||
| CJ | C&J Energy Services, Inc. | NA | $ | 2,222 | $ | 891 | ||||
| CRR | CARBO Ceramics Inc. | $ | 189 | $ | 211 | $ | 97 | |||
| CLB | Core Laboratories NV | $ | 648 | $ | 701 | $ | 2,638 | |||
| DRQ | Dril-Quip, Inc. | $ | 456 | $ | 385 | $ | 1,074 | |||
| FTK | Flotek Industries, Inc. | $ | 243 | $ | 178 | $ | 62 | |||
| FET | Forum Energy Technologies, Inc. | $ | 819 | $ | 1,064 | $ | 448 | |||
| HLX | Helix Energy Solutions Group, Inc. | $ | 581 | $ | 740 | $ | 802 | |||
| KEG | Key Energy Services, Inc. | NA | $ | 522 | $ | 42 | ||||
| MTRX | Matrix Service Company | $ | 1,198 | $ | 1,092 | $ | 486 | |||
| OIS | Oil States International, Inc. | $ | 671 | $ | 1,088 | $ | 857 | |||
| PKD | Parker Drilling Company | $ | 443 | $ | 481 | $ | 3 | |||
| PES | Pioneer Energy Services Corp. | $ | 447 | $ | 590 | $ | 96 | |||
| RES | RPC, Inc. | $ | 1,595 | $ | 1,721 | $ | 2,120 | |||
| SPN | Superior Energy Services, Inc. | $ | 1,874 | $ | 2,130 | $ | 518 | |||
| TTI | TETRA Technologies, Inc. | $ | 723 | $ | 999 | $ | 211 | |||
| SLCA | U.S. Silica Holdings, Inc. | $ | 1,241 | $ | 1,577 | $ | 789 | |||
| 75th Percentile | $ | 1,103 | $ | 1,090 | $ | 829 | ||||
| MEDIAN | $ | 659 | $ | 740 | $ | 486 | ||||
| 25th Percentile | $ | 449 | $ | 501 | $ | 96 | ||||
| NR | Newpark Resources, Inc. | $ | 748 | $ | 947 | $ | 624 | |||
| Percentile ranking | 64% | 56% | 60% | |||||||
The compensation consultant assisted For fiscal year 2018, the Compensation Committee determined to expand the peer group to include Basic Energy Services, Inc., C&J Energy Services, Inc. and Key Energy Services, Inc.
Where possible, survey results are adjusted to reflect our size, based on annual revenue, and industry. The data is then blended on a weighted basis, which for 20152018 was 70% weighted toward the peer group and 30% weighted toward the survey data. The peer group and survey data collectively will be referred to as market data throughout this proxy statement. The compensation consultantProxy Statement. Pearl Meyer also provides advice on compensation trends and types of awards being used for equity incentive compensation.
Targeting market median. The
| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 17 | |
| Targeting Market Median |
Timing and process Given that a majority of an individual executive’s compensation decisions.is dependent on Company performance, actual realized pay may vary significantly from the targeted market median level that was previously awarded.
| Timing and Process of Compensation Decisions |
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| First Quarter | ● | Review performance and salary adjustments for executive officers. |
| ● | Consider changes to the executive base compensation for the current year. | |
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| Review actual performance compared to goals established for cash incentive compensation in the previous year and approve any payments thereunder. |
| Set individual and company performance goals for cash incentive compensation for the current year. | |
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| Consider preliminary plans for equity incentive grants for the current year. |
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| Second Quarter | ● | Review performance relative to the targets for our equity incentive awards, |
| Consider and approve equity grants of options, if any, and restricted stock (performance-based or otherwise). | |
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| Establish corporate performance objectives, if any, for NEOs under our equity incentive plans (may also be established in the first quarter). |
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Third Quarter | ● | Review and certify results to determine payments for performance-based awards. |
| ● | Consider and address any compensation related issues that may arise. | |
| Fourth Quarter | ● | Review and approve the total compensation strategy to assure alignment with business strategy. |
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| Review the Compensation Committee’s performance and charter. | |
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| Review the compensation totals for each executive as part of the process for assessing executive |
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| Review the composition of the peer group. |
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| Engage in a risk assessment of our compensation plans, a process which is led by the compensation consultant. |
On an as-needed basis, the Compensation Committee reviews and revises the compensation plans, including cash incentive, equity incentive, special benefit and incentive plans, and provisions of employment and change in controlchange-of-control agreements for executives. The Compensation Committee proposes any revisions of the plans to the Board of Directors, which then considers the changes and approves them before the revisions take place (subject to stockholder approval, as applicable). In addition, theour Compensation Committee reviews employee health, welfare and retirement plans for design, funding and fiduciary responsibilities on a periodic basis.
Elementsof Executive Compensation
| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 18 | |
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| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 19 | |
| What we Heard | How we Responded |
| Use of more than one financial metric in our annual cash incentive plan is preferred as drivers for stockholder return. | For our 2019 annual cash incentive program, we have introduced return on net capital employed (“RONCE”) as an additional performance metric, so that our financial performance metrics are EBITDA and RONCE. |
| Use restricted stock as a long-term incentive versus stock options. | Our long-term incentive pay elements emphasize the use of restricted stock units and no longer include the granting of stock options. |
| Would like to see the use of equity over cash as an element of long-term compensation, but understand the need to balance dilution during periods of low stock prices. | While we plan to continue to grant performance-based cash awards in 2019, we do not intend to grant any further time-based cash awards in 2019. In 2019, we intend to grant 40% performance-based cash and 60% time-based restricted stock units. We continue to analyze whether our share reserves, burn ratio and annual dilution will allow us to return to granting performance-based stock units instead of performance-based cash awards. |
| Would like to see more disclosure around our environmental and social governance practices. | For many years, we have invested in developing more environmentally-friendly products and services, but recognize that we had not taken the opportunity to showcase their positive environmental impact in our disclosures. We have updated the disclosure on our website and in our Annual Report to include enhanced disclosure regarding our environmental and social governance practices, as well as our commitment to being a good neighbor in the communities where we live and work. |
| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 20 | |
| TARGET TOTAL DIRECT COMPENSATION - 2018 | ||
| CEO | Other NEOs | |
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| Realized Pay |
| Measure of Total Direct Compensation | Components Included | |||||
| Base Salary | Annual Incentive | Long-Term Cash (Bonus) | Stock Options | Restricted Stock | Performance Units | |
Summary Compensation Table total direct compensation | Actual 2018 Salary | Actual Amount Earned for 2018 Performance | Actual amount Paid in 2018 ---------------- Long-Term Cash Award Vested | Not applicable - no stock options granted in 2018 | Grant date value of awards made during 2018 | Not applicable - performance-based cash granted instead of units in 2018 |
Realized total direct compensation | Same | Same | Same | Value realized from option exercises during 2018 | Value realized from stock vesting during 2018 | Value realized from units vesting during 2018 |
| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 21 | |
| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 22 | |
CEORealizable Pay: Aligned With Performance Against Peers |
Target Total Direct Compensation (3 year cumulative) | Realizable Total Direct Compensation | |
| Base salary | Actual salary paid in each year | Actual salary paid in each year |
| Annual Incentive | Target annual incentive opportunity | Actual cash incentive earned for each year |
| Stock Options | Grant date value of target annual award | In-the-money value of options granted during period - at 12/31/2018 |
| Restricted Stock | Grant date value of target annual award | Value of all shares granted during period – at 12/31/2018 |
| Performance Units | Grant date value of target annual award | Value of shares granted during period based on a probable payout – at 12/31/2018 |
| Time-based Cash | Grant date value of target annual award | Value of the award granted during period - at 12/31/2018 |
| Performance-Based Cash | Grant date value of target annual award | Value of the award based on probable payout at 12/31/2018 |
| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 23 | |
CEORealizable Pay: Aligned with Annual Performance |
| Annual cash | ||||
| Salary | + | Annual Cash Incentive Earned | ||
| Long-term Incentive Cash | ||||
| Time-based cash awards granted | + | Performance-based cash awards valued at probable payout | ||
| Net Realizable Equity Value | ||||
Realized equity value(1) | + | Change in Value of Unrealized Equity(2) | + | Long-term Performance Unit Plan Payout for the performance period ending each year |
| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 24 | |
| Base Salary |
We generally establish base salary compensation for our NEOs near the median of the compensation reflected in the market data. The actual percentiles of individual base salaries for the NEOs for 2015 were between 89% and 105% of the market median.
Base salaries for 2015 and 2016 were reviewed in February 2015 and 2016, respectively, by the Compensation Committee with approved increases (if any) typically effective April 1 of each year.
Executive 2015 Annualized Salary 2016 Annualized Salary (Pre-Reduction) 2016 Annualized Salary (Post-Reduction) Paul L. Howes Gregg S. Piontek Bruce C. Smith Mark J. Airola Jeffery L. Juergens $ 750,000 $ 750,000 $ 675,000 $ 368,500 $ 368,500 $ 331,650 $ 416,000 $ 416,000 $ 374,400 $ 385,000 $ 385,000 $ 346,500 $ 360,000 $ 360,000 $ 324,000
Annual Non-Equity (Cash) Incentive Compensation.2019:
| NEO | 2018 Annualized Salary(1) | 2019 Annualized Salary(2) | Percent Increase | |||||
| Paul L. Howes | $ | 800,000 | $ | 828,000 | 3.5 | % | ||
| Gregg S. Piontek | $ | 423,500 | $ | 438,300 | 3.5 | % | ||
| Matthew S. Lanigan | $ | 385,000 | $ | 423,500 | 10.0 | % | ||
| Bruce C. Smith | $ | 416,000 | $ | 430,560 | 3.5 | % | ||
E. Chipman Earle(3) | $ | 410,000 | $ | 424,400 | 3.5 | % | ||
Phillip T. Vollands(4) | $ | 401,000 | $ | — | — | % | ||
Mark J. Airola(5) | $ | 385,000 | $ | — | — | % | ||
| (1) | Effective as of April 1, 2018. |
| (2) | Effective as of April 1, 2019. |
| (3) | Mr. Earle commenced employment with us on August 15, 2018. |
| (4) | Mr. Vollands’ employment with us terminated on November 15, 2018. |
| (5) | Mr. Airola’s employment with us terminated on September 30, 2018. |
| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 25 | |
| Short-Term Incentives |
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Encourage NEOs to continually improve our performance.Annual incentives are designed to be earned in the range of the market median when individual and corporate objectives are achieved at target and between the market median (i.e., within the market 50th percentile range) and the 75th percentiles when individual and corporate objectives are exceeded. Similarly, the annual incentives are designed to earn below the market median (or even $0) when individual and corporate objectives are not achieved.●Target total cash opportunities (base salaries plus target annual incentive opportunities) for the NEOs at the beginning of 2015 were approximately 90% of the market median.●Actual total cash (salary plus actual annual incentive earned) for the NEOs was approximately 60% of the market median (or 40% below the median) when taking into account awards earned for performance during 2015 were below target for each of our NEOs.Note that when comparing the annual incentives for 2015,each year, the market data available assumes performance at the target level and does not include estimates of what was actually paid for 2015that year’s performance among the peer group (which were likely paid at below target levels for many of our peers given the decline in activity levels in the oil and gas industry).group. Annual cash incentive awards are linked to the achievement of company-wide and business unit
risk when combined with our long-term incentives.
Incentive Opportunity as a Percent of Salary Name/Title Threshold Target Over- Achievement Paul L. Howes Gregg S. Piontek Bruce C. Smith Mark J. Airola Jeffery L. Juergens 25.0 % 100 % 200 % 16.25 % 65 % 130 % 16.25 % 65 % 130 % 16.25 % 65 % 130 % 16.25 % 65 % 130 %
| 2018 | Incentive Opportunity as a Percent of Salary | |||||
| Threshold | Target | Over-Achievement | ||||
| Paul L. Howes | 30.0 | % | 100 | % | 200 | % |
| Gregg S. Piontek | 22.5 | % | 75 | % | 150 | % |
| E. Chipman Earle | 21.0 | % | 70 | % | 140 | % |
| Matthew S. Lanigan | 21.0 | % | 70 | % | 140 | % |
| Bruce C. Smith | 19.5 | % | 65 | % | 130 | % |
| Mark J. Airola | 19.5 | % | 65 | % | 130 | % |
| Phillip T. Vollands | 21.0 | % | 70 | % | 140 | % |
awards, and the benchmarks reflected in the table below were applicable to the corporate financial objectives. The performance objectives for Mr. Lanigan included other benchmarks tailored for specific division financial objectives. For 2018, Mr. Smith’s performance objectives were consolidated corporate goals and did not include specific division financial goals as Mr. Smith did not transition from his corporate role to his divisional role until November 2018.
| COMPENSATION DISCUSSION AND ANALYSIS |
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Total bonuses under this plan are capped at $3 million per participant per year.
The structure of the 20152018 Annual Non-Equity (Cash) Incentive Compensation plan is graphically represented below.
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2015 Annual Incentive Performance Payout Range.The Compensation Committee looks at the current and prior year’s achievements before setting new performance targets each year. The Compensation Committee intends to set financial performance targets at achievement levels whichthat will challenge the NEOsNEOs. In response to achieve.stockholder feedback, the Compensation Committee continued to focus on cash generation for 2018. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) as a performance metric for 2018 was intended to focus management on the importance of cash flow to preserve stockholder value and maintain a strong balance sheet. Performance measures and weights applicable to our NEOs in 20152018 are presented in the table below:
Performance Measure Weighting – Percent of Target Opportunity Contingent Upon Each Performance Measure Metric Paul L. Howes(1) Gregg S. Piontek(1) Bruce C. Smith(2) Mark J. Airola(1) Jeffery L. Juergens(3) Company Financial Performance Objective — Earnings per share Division Financial Performance Objective — EBIT, Net of Capital Charge (4) EVOLUTION Financial Performance Objective — Revenue Return on Net Capital Employed (RONCE) Discretionary Total 65 % 65 % 20 % 65 % 20 % 50 % 70 % 20 % 25 % 25 % 25 % 10 % 10 % 10 % 10 % 10 % 100 % 100 % 100 % 100 % 100 %
Performance Measure Weighting – Percent of Target Opportunity Contingent Upon Each Performance Measure | |||||||
| Metric | Paul L. Howes(1) | Gregg S. Piontek(1) | Matthew S. Lanigan(2) | Bruce C. Smith(1) | E. Chipman Earle(1) | Phillip T. Vollands(1) | Mark J. Airola(1) |
| Company Financial Performance Objective — EBITDA | 85% | 85% | 15% | 85% | 85% | 15% | 85% |
Division Financial Performance Objective — EBIT, Net of Capital Charge(3) | — | — | 70% | — | — | 50% | — |
| New Technology | — | — | — | — | — | 10% | — |
| Strategic Goals | 15% | 15% | 15% | 15% | 15% | 25% | 15% |
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| (1) | Strategic goals for Messrs. Howes, Piontek, Smith, Earle, Vollands and Airola were in the areas of (i) safety, (ii) |
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| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 27 | |
| (2) | Strategic goals for Mr. |
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| The capital charge is calculated by multiplying the net capital employed at the business unit by the estimated cost of capital for the Company, |
Performance Measure Weighting – Percent of Target Opportunity Contingent Upon Each Performance Measure Metric Paul L. Howes Gregg S. Piontek Bruce C. Smith Mark J. Airola Jeffery L. Juergens Company Financial Performance Objective — ADJUSTED EBITDA Division Financial Performance Objective — ADJUSTED EBIT, Net of Capital Charge EVOLUTION Financial Performance Objective — Revenue Discretionary Total Target Bonus Opportunity As a percentage of base salary earned, and the benchmarks reflected in the graph below are applicable to the financial performance objectives. The performance objectives for Mr. Lanigan and Mr. Smith include other benchmarks tailored for specific division objectives. NEOs. For 2018, the Compensation Committee chose to maintain the allocation of the target long-term incentive awards of 50% in the form of time-based restricted stock units, 25% in the form of time-based cash awards and the remaining 25% in the form of performance-based cash awards whose ultimate value was tied to the Company’s relative TSR over a three-year performance period. The Compensation Committee considers the foregoing factors together and makes a subjective determination with respect to awarding each NEO’s long-term incentive compensation. Executive May 2015 Annual Restricted Stock Unit Grant (# of shares) May 2015 Annual Stock Option Grant (# of options) May 2015 TSR Grant (# of shares at maximum payout) Paul L. Howes Gregg S. Piontek Bruce C. Smith Mark J. Airola Jeffery L. Juergens In November 2018, our Board of Directors approved a change to our share repurchase program, first authorized in 2013, which increased the authorized maximum amount to repurchase from $33.5 million to $100 million of our shares of common stock outstanding. Through March 28, 2019, we repurchased 655,666 shares of our common stock, which partially offsets the dilutive effect of our restricted stock unit awards. ”2015 Results. The adjusted loss per diluted share for 2015 was $(0.25) as compared2018 RESULTSPerformance measures and weights related to the targetpayment of $0.40. These results exclude asset impairments and similar charges recorded in 2015. For purposes of calculating the achievement levels, the full cost of the 2015 cash incentives were included. RONCE for the Company as a whole was -1.9% for 2015 as compared to a target of 5.1%. The threshold levels for the adjusted earnings per diluted share and RONCE metrics were not achieved for 2015.Adjusted EBIT, net of the capital charge for the Fluids Systems segment, was $(77.7) million compared to a target of $(7.2) million. EBIT was adjusted to exclude the impact of a goodwill impairment recorded in 2015 related to this segment. The threshold level for adjusted EBIT for this business segment was not achieved for 2015. Revenue on the EVOLUTION high performance water-based fluid system was $105 million for 2015, compared to the target of $179 million, producing a performance level above the threshold level, and a payout at 38% of the target for this element of theour annual cash incentive for Mr. Smith.Adjusted EBIT, net of the capital charge for the Mats and Integrated Services segment, was $6.1 million versus a target of $20.3 million. EBIT was adjustedopportunity to exclude the impact of certain severance obligations and non-recurring transportation costs associated with re-positioning mat inventories outside the U.S. This level of performance was between the threshold and target levels, resulting in a payout at 47% of the target amount for this element of the annual cash incentive for Mr. Juergens.In addition, for 2015, 10% of the bonus opportunity was allocated to discretionary factors, and the Compensation Committee assessed the executives’ performance, on a cumulative basis, at levels from the mid-range between entry and target to the mid-range between target and over-achievement levels for the metrics describedour NEOs are presented in the table above.35Consolidated Performance Metric 2018 Results Performance as a % of Target Fiscal 2018 Award Weighting Company Financial Performance Objective — EBITDA(1)$112.0 million 102% 85% Strategic Goals Slightly below target 93% 15% Mats & Integrated Services Segment Performance Metric 2018 Results Performance as a % of Target Fiscal 2018 Award Weighting Company Financial Performance Objective — EBITDA(1)$112.0 million 102% 15% Division Financial Performance Objective — EBIT, Net of Capital Charge $32.3 million 129% 70% Strategic Goals Slightly below target 94% 15% (1) EBITDA is calculated from our audited financial statements by taking net income and adding back interest, taxes depreciation and amortization. In accordance with guidance previously adopted by the Compensation Committee, the following adjustments to the Consolidated Performance related to EBITDA were made and approved by the Compensation Committee: (i) excluded certain merger and acquisition costs; (ii) excluded costs related to the fire at our warehouse in Kenedy, Texas; (iii) excluded costs associated with the retirement of our General Counsel; and (iv) excluded certain severance costs in our Brazilian operations. COMPENSATION DISCUSSION AND ANALYSIS 2019 Proxy Statement | 28 2019 OVERVIEWFor 2016,2019, the following incentive plan targetsmetrics and metricsweighting apply:Non-Equity Incentive Plan Weighting for 2016 75 % 75 % 20 % 75 % 20 % 50 % 70 % 10 % 25 % 25 % 20 % 25 % 10 % 100 % 100 % 100 % 100 % 100 % 100 % 65 % 65 % 65 % 65 % In recognition of
For the current economic environment for oilfield services (sharp drops in capital spending plans by our customers and a rapid reduction in drilling activities),2019 performance year, the Compensation Committee has electedapproved the following threshold, target and over-achievement cash incentive opportunities for our NEOs, expressed as a percentage of base salary:2019 Incentive Opportunity as a Percent of Salary(1)Threshold Target Over-Achievement Paul L. Howes 30.0 % 100 % 200 % Gregg S. Piontek 22.5 % 75 % 150 % Matthew S. Lanigan 21.0 % 70 % 140 % Bruce C. Smith 19.5 % 65 % 130 % E. Chipman Earle 21.0 % 70 % 140 % (1) Mr. Vollands’ employment with the Company terminated on November 15, 2018 and Mr. Airola’s employment with the Company terminated on September 30, 2018. In setting the metrics for 2019, the Compensation Committee considered the Company’s relatively poor safety performance in 2018 as well as feedback received from stockholders requesting two financial metrics insteadof one. The Compensation Committee decided to focusmake safety a stand-alone performance metric for 2019 as opposed to being one of several strategic goals as had been done in the past. Additionally, the Compensation Committee also decided to respond to stockholder requests by having two financial metrics in 2019, one focused on cash generationearnings and a second focused on RONCE.Our Compensation Committee chose to keep EBITDA as the earnings performance metric for 2016, rather than earnings per share. A2019 for the corporate executive officers. EBITDA is a recognized financial metric in the oil and gas industry and is typically one of the metrics used by investors and analysts in this sector to value our Company’s shares. Further, a number of our peers useduse EBITDA as atheir financial performance metric in 2015, and we expect more to do so in 2016 (or use a metric similar to EBITDA) for purposes of focusing management on the importance of cash flow in preserving shareholder value.. EBITDA willcan be adjusted for items such as severance costs and impacts of discontinued operations. The Compensation Committee will also consider making adjustments to EBITDA as reported, for other special items based primarily upon managements’ responsibility for the item/event and managements’ response.In response to stockholder requests, the Compensation Committee decided to add a second financial metric to incentivize return performance as measured by RONCE, which is a common reference point in measuring our profitability and efficiency with which capital is employed.For the leadership of Fluids Systems and Mats & Integrated Services, the Compensation Committee chose to continue to use earnings before interest and taxes, or EBIT, net of capital charge, as the earnings performance metric for 2019, reflecting an additional focus on return on capital. The Compensation Committee also established the following benchmark levels for determining the actual awards to be earned:BelowThresholdThresholdTargetOver-AchievementSuper Over-AchievementPercent of Goal Achieved< 50% of goal achieved50% of goal achieved100% of goal achieved140% of goal achieved>140% of goal achievedPercent of Target Bonus Opportunity Earned0% of target earned30% of target earned100% of target earned200% of target earned>200% of target earnedFor 2016,2019, the Compensation Committee reinstateddecided to maintain the super over-achievement level of performance level in the annual non-equity incentive plan.plan with a potential payout cap at 300% of target. The purpose of including this feature is to insureensure that incentives remain in place should the oil and gas industry experience a rapid recovery in 2016.if business performance accelerates meaningfully beyond targeted levels. As in prior years, the super over-achievement level is also intended to enhance retention by deferring over a 2 year period, any payments in excess of $20,000 associated with achievement at this level (withover a two-year period.The 2019 annual cash incentive program payout and performance details are depicted in the exceptiongraph below as a percentage of amounts below $20,000).target:36 COMPENSATION DISCUSSION AND ANALYSIS 2019 Proxy Statement | 29 Equity Incentive Compensation. We provide
Long-Term Incentives The Compensation Committee believes that long-term incentive awards through regular grantsare a primary method of stock options, restricted stock and performance-based restricted stock units to NEOs. Consistent with our compensation philosophy, stock options, restricted stock and performance-based restricted stock units provide NEOs with additionalretention, especially in a challenging environment. Long-term incentives to maximize stockholder value and provide a link between their interests andalign the interests of our stockholders.●Stock options have historically been granted each year as a component of long-term compensation with the size of the grants based on the NEOs responsibility level, base salary and performance. Our 2015 Plan provides for stock options to be issued with an exercise price equal to the market value of our common stock on the date of grant, so that optionees will benefit only if the price of our stock appreciates. These awards have been structured to be earned, or vest, over a three-year period.●Restricted stock awards have been granted to NEOs since 2003 to further align the interests of executive officers and stockholders. In 2015 the Compensation Committee granted awards of restricted stock in the form of restricted stock units. The Compensation Committee decides each year whether to include performance objectives in the awards and, if so, the appropriate targets. The Compensation Committee believes restricted stock grants, including awards without performance criteria, provide value to NEOs during periods of stock market volatility (encouraging executive retention) and facilitate the most direct long-term share ownership by our NEOs. These awards have been structured to be earned, or vest, over a three-year period.●Performance-Based Restricted Stock Units were granted to NEOs beginning in 2013 in the form of a relative TSR restricted stock unit. Taking into consideration input from our stockholders along with the compensation practices of our peer group, the Compensation Committee elected to include these performance-based restricted stock units to further enhance linkage between the performance of our Company and the compensation of NEOs. The TSR awards measure our Company’s share performance relative to a peer group of companies over a three-year period. These awards have been structured to be earned at the completion of a three-year period.Our practice of regular annual grants provides for multi-year, overlapping grant periods, enhancing alignment with stockholders and encouraging stability and retentionthose of our core leadership team.The Compensation Committee considered the following in designing the long-term incentive award program for 2018:A review of our compensation structure showed that the percentage of total target compensation relating to long-term incentives was closely aligned with the compensation programs of the companies in our peer group; andA desire to provide long-term incentives that incentivize performance, retain employees and align the interests of management with those of stockholders while balancing cash and equity reserves.Individual equity incentives (as a multiple of base salary) are generally targeted within a range around the medianof the equity incentives reflected in the market data. The individual total direct compensation (target total cash, plus all long-term incentive awards) for the current NEOs for 2018 were between 72% and 102% of the median for the compensation reflected in the combined market data for all named executives and the peer group.In determining appropriate awards,award levels for each NEO, including the CEO, the Compensation Committee periodically reviews competitive market data for each NEO’s position as well as each NEO’s past performance, ability to contribute to our future success and growth and time in the current job.position. The Compensation Committee also considers recommendations of Pearl Meyer for each NEO as well as the compensation consultantsrecommendation of the CEO for each NEO other than the CEO. For the CEO, the Compensation Committee considers the recommendation of Pearl Meyer and CEO.also reviews the CEO’s performance with the Chairman of the Board. The Compensation Committee also takes into account the risk of losing the NEO to other employment opportunities. The Compensation Committee considers the foregoing factors together and makes a subjective determination with respect to awarding equity compensation. The Compensation Committee believes that market competitive grants, along with three-year vesting requirements, are the most effective method of reinforcing the long-term nature of the incentive. The Compensation Committee considersreviews the value of previous awards and grants (whether vested or not) as well as the likelihood of achieving performance goals in previous awards and grants in determining the level of the current year’s awards and grants. COMPENSATION DISCUSSION AND ANALYSIS 2019 Proxy Statement | 30 For 2015,2019, after receiving feedback from our stockholders, the Compensation Committee chosedecided to allocate 50%remove the time-based cash element of our NEOs’ total compensation so that 60% of our NEOs’ total target compensation will be in the form of restricted stock units and the remaining 40% will be in the form of performance-based cash awards.Vesting of 2015 Performance Stock Units. As part of the annual long-term incentives issued to our NEOs, performance-based restricted stock units were granted in May 2015. Our Compensation Committee established the performance criteria based upon TSR compared to our 2015 peer group, with a three-year performance period (June 2015 - May 2018). At the completion of the performance period, our Compensation Committee compared our TSR during the performance period against the designated peer group and determined that we were at the 94th percentile. At this level of performance, the NEOs achieved a payout of restricted stock at 150% of the target award.LONG-TERM CASH INCENTIVES
In 2017, our Board of Directors and Compensation Committee approved the Long-Term Cash Incentive Plan (the “Cash Plan”) in response to concerns expressed by our stockholders over the dilutive effects of long-term incentiveequity compensation during the downtown of the oil and gas industry in the prior years. In order to continue to preserve shares under our 2015 Plan and mitigate the dilutive effect on our stockholders, in 2018, the Compensation Committee granted our NEOs time-based cash awards and performance-based cash awards under the Cash Plan.Time-based cash awards were introduced into our executive compensation program in 2017 to encourage executive retention during a period in our sector when executive talent was being attracted to other industries due to the decline in value of unvested equity. Our Compensation Committee believes long-term cash incentives without performance criteria provide an important retention value to NEOs during periods of decline in our stock value. The time-based cash awards vest in annual increments over three years.Performance-based cash awards were also introduced into our executive compensation program in 2017 with ametric tied to relative TSR over a three-year performance period against a peer group of companies. Taking into consideration input from our stockholders, along with the compensation practices of our peer group, the Compensation Committee elected to include these performance-based long-term cash incentives in 2018 to further enhance linkage between the performance of our Company and the compensation of our NEOs. The TSR awards are earned at levels between 0% and 150% of target depending on our TSR performance relative to a peer group of companies at the completion of a three-year performance period.The following grants were made under the Cash Plan on May 16, 2018 for each of the NEOs :NEO(1)Time-Based Cash Award Granted(2)TSR Cash Grant (Target Payout) Paul L. Howes $ 680,000 $ 680,000 Gregg S. Piontek $ 232,925 $ 232,925 Matthew S. Lanigan $ 149,188 $ 149,188 Phillip T. Vollands $ 165,413 $ 165,413 (1) Messrs. Airola and Smith did not receive time-based or performance-based cash awards in 2018. Mr. Earle, who commenced employment with us in August 2018, was not eligible to receive these cash grants in May 2018. (2) The amounts reflected vest annually over a three-year period, except for those of Mr. Vollands, whose cash awards were forfeited when his employment with us terminated on November 15, 2018. LONG-TERM EQUITY INCENTIVES
During a period of declining stock prices in the oil and gas industry, the total number of stock options, restricted stock units 25% allocatedand performance-based units awarded to time-basedour NEOs and other employees increased in order to provide competitive long-term pay at median levels. This increase in volume of equity awards resulted in increased dilution to our stockholders. In response to feedback received from our stockholders, we limited the use of equity in long-term incentives for our annual grants made during 2017 and 2018, using cash as an alternative to equity. However, remaining consistent to our compensation philosophy, we continued to grant restricted stock optionsunits COMPENSATION DISCUSSION AND ANALYSIS 2019 Proxy Statement | 31 that our Compensation Committee believes provide NEOs with additional incentives to maximize stockholder value and provide a link between their interests and the remaining 25% to performance-based restricted stock units. interests of our stockholders.The Compensation Committee consideredbelieves restricted stock unit grants facilitate the following in reaching this conclusion:●While we maintain that stock options, by their nature, are “performance-based” and aligned with our stockholders’ interests by requiring an increase in the stock price from the date of grant before any value is received by the NEO, for 2015, the Compensation Committee again felt that a long-term incentive grant of restricted stock units containing performance-based goals would further enhance the link between executive pay and stockholder interests.●A review of our compensation structure showed that our program for 2015 was closely aligned with the compensation programs of the companies in our peer group.●Providing a program with a balanced mix of performance incentive, retention and stockholder alignment will achieve the desired results of continued success.most direct long-term share ownership by our NEOs and alignment with our stockholders. These awards have been structured to be earned, or vest, over a three-year period. Our practice of regular annual grants provides for multi-year overlapping of grant periods, which enhances alignment with stockholders and encourages stability and retention of our core leadership team.37Table Of ContentsIndividual equity incentives (as a multiple of base salary) are generally based on a range around the median of the equity incentives reflected in the market data. The individual total direct compensation (target total cash, plus all long-term incentive awards) for the current NEOs for 2015 were between 79% and 103% of the median for the compensation reflected in the combined market data for all named executives and the peer group. Equity Incentive Compensation Decisions.The following grants were made on May 22, 2015:16, 2018: 136,138 156,514 91,350 36,485 41,945 24,481 44,620 51,298 29,940 40,236 46,258 26,998 30,693 35,286 20,595 NEO(1)May 2018
Annual Restricted
Stock Unit Grant
(# of shares)(2)Paul L. Howes 128,301 Gregg S. Piontek 43,948 Matthew S. Lanigan 28,148 Phillip T. Vollands 31,209 (1) Messrs. Airola and Smith did not receive restricted stock unit awards in 2018. Mr. Earle, who commenced employment with us in August 2018, was not eligible to receive restricted stock unit awards in May 2018. (2) The restricted stock units vest annually over a three-year period, except for those of Mr. Vollands, whose restricted stock units were forfeited when his employment with us terminated on November 15, 2018. The Compensation Committee further approved the following supplemental grants of restricted stock units to Messrs. Piontek and Lanigan on May 16, 2018. The supplemental awards vest over a four-year period, with one-half vesting on the second anniversary of the date of grant and the balance vesting on the fourth anniversary of the date of grant.NEO May 2018 Supplemental Grant of Time-based RSU (#) Gregg S. Piontek 100,000 Matthew S. Lanigan 50,000 In 2018, the Compensation Committee approved a one-time inducement grant to Mr. Earle in connection with his employment with us. Mr. Earle was awarded 50,000 shares of restricted stock, which immediately aligns Mr. Earle’s interests with those of our stockholders. This inducement award vests over a four-year period, with one-half vesting on the second anniversary of the date of Mr. Earle’s commencement of employment and the balance vesting on the fourth anniversary of the date of commencement of his employment.In administering the long-term incentive plan, theour Compensation Committee is sensitive to the potential for dilution of future earnings per share. In 2015, 695,698 stock options and 1,251,819 restricted stock awards, restricted stock units, and performance-basedMay 2018 in connection with our annual long-term incentive grant process, 885,901 restricted stock units were granted to 215220 executive officers and employees, or about 9.8%8.9% of total employees. The awards were approximately 2.3%1.0% of our outstanding shares at the time of grant. For further information regarding the awards to the named executive officers,NEOs, see the 2015 Grants of Plan-Based Awards in 2018 Table.As a general proposition, the higher-level positions have greater emphasis on longer-term incentives. The sizevalue of long-term incentive awards will vary from year to year to reflect current year performance of our Company and/or the individual and current market trends. The Compensation Committee determines the award level for executive officers, if any, on an annual basis usually in the first or second quarter each year.All equity awards to our employees, including executive officers, that have been granted to our employees are reflected in our consolidated financial statements at fair value on the grant date in compliance with Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 718, “Stock Compensation,” which we refer to as ASC“ASC Topic 718.IndirectCompensation COMPENSATION DISCUSSION AND ANALYSIS 2019 Proxy Statement | 32 OUR INDIRECT COMPENSATION ELEMENTSEmployee benefits are designed to be competitive and to attract and retain employees. From time to time, the Compensation Committee reviews our benefit plans and recommends that the Board implement certain changes to existing plans or adopt new benefit plans.Health and Welfare Benefits.Health and Welfare Benefits We offer a standard range of health and welfare benefits to all employees, including executive officers. These benefit plans provide the same terms to all similarly situated employees. These benefits include: medical, prescription drug, vision and dental coverage, life, accidental death and dismemberment and travel accident insurance, short and long-term disability insurance, an employee assistance plan, health savings accounts and flexible spending accounts. In addition, we pay the cost of an annual physical for each executive officer, and executive officers have excess life insurance for which we pay the premiums. These costs are disclosed in the Summary Compensation Table.Employee Stock Purchase Plan.Employee Stock Purchase Plan We offer an employee stock purchase plan allowing employees to purchase our common stock through payroll deductions under the 2008Newpark Resources, Inc. Amended and Restated Employee Stock Purchase Plan. Employees, including executive officers, can set aside up to 10% of their annual salarypaycheck to purchase stock at 85% of the fair market value of the stock on the first or last day of each six monthsix-month offering period, whichever is lower. In 2013, the 2008 Employee Stock Purchase Plan was amended to increase the percentage discount at which an employee could purchase under this plan from 5% to 15%. Executive officers may not set aside more than $25,000 of their salary to purchase shares under this plan in any year. None of our NEO’sNEOs participated in this plan in 2015.2018.38401(k) Plan Table Of Contents401(k) Plan.We offer a defined contribution 401(k) plan to our employees, including executive officers. The plan helps employees save for retirement, reduce current income taxes and defer income taxes on savings and investment income until retirement. The participants may contribute from 1% up to 50% of their base and cash incentive compensation. Our 401(k) plan allows us to make matching contributions and, until March 30, 2016, we made matching contributions under this plan of 100% on the first 3% of the employee’s compensation and 50% ofon the next 3% of the participant’semployees compensation. AsBeginning in 2017, new
Other Perquisites and Personal Benefits.$6,000.
| Other Perquisites and Personal Benefits |
Messrs. Airola and Vollands each received a car allowance in 2018, which is included in the Other Compensation column of, and accompanying footnote to, the Summary Compensation Table.
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| Retirement Policy |
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Employment Agreement with Paul L. Howes.Company or solicit employees, customers or potential customers for a period of time after termination of employment. We believe that these provisions are valuable to the long-term success of the Company.
| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 34 | |
| Employment Agreement with Paul L. Howes |
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eligibility to participate in our long-term incentive plans as determined at the discretion of the Compensation Committee.
As used in this agreement, “Good Reason” means (i) our unreasonable interference with Mr. Howes’ performance of his duties, (ii) a detrimental change in Mr. Howes’ duties, responsibilities or status, (iii) our failure to comply with our obligations under our agreements with Mr. Howes, (iv) diminution of Mr. Howes’ salary or benefits, (v) our failure to obtain the assumption of Mr. Howes’ employment agreement by any successor or assignee of ours or (vi) the relocation of Mr. Howes’ principal place of employment by more than 50 miles (other than to Houston, Texas).
As used in this agreement, “Cause” means (i) conviction by a court of competent jurisdiction of, or entry of a plea of guilty or nolo contendere for an act constituting a felony; (ii) dishonesty, willful misconduct or gross neglect by Mr. Howes of his obligations under his employment agreement that results in material injury to us; (iii) appropriation (or an overt act attempting appropriation) of a material business opportunity of ours; (iv) theft, embezzlement or other similar misappropriation of our funds or property; or (v) failure to follow our reasonable and lawful written instructions or policy with respect to the services to be rendered and the manner of rendering services by Mr. Howes.
In the event Mr. Howes terminates his employment with us for Good Reason or is terminated by us without Cause, his employment agreement contemplates that Mr. Howes will be entitled to (i) an amount equal to two times the amount of his then current base salary; (ii) an amount equal to two times the target bonus under the 2010 Annual Cash Incentive Plan; (iii) full vesting of all time-based restricted stock and options granted as an inducement to employment; (iv) continuation of medical and dental health benefits for him and any eligible dependents until the earlier of (A) eligibility under another group health insurance plan or (B) 18 months following the date of termination; and (v) payment of outplacement servicesfees, within the two-year period after termination, notof up to exceed $20,000.
Employment Agreement with Gregg S. Piontek. Mr. Howes is eligible to receive benefits under our Retirement Policy, which is discussed in the “Our Indirect Compensation Elements” section of this Proxy Statement under the heading “Retirement Policy.”
| Employment Agreement with Gregg S. Piontek |
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Mr. Piontek’s employment with us willmay terminate pursuant to the terms of his employment agreement (a) automatically upon his death or disability, (b) at Mr. Piontek’s election upon 30 days’ prior written notice to us for “Good Reason” (as defined below)in Mr. Piontek’s employment agreement) or Mr. Piontek’s voluntary resignation at his election and without Good Reason, (c) by us for “Cause” (as defined below)in Mr. Piontek’s employment agreement), (d) by us without Cause or (e) with 60 days’ prior written notice given by us or Mr. Piontek in advance of the expiration of the initial or any successive employment terms under Mr. Piontek’s employment agreement. As used in this agreement, “Good Reason” means (i) a detrimental change in Mr. Piontek’s duties, responsibilities or status, (ii) our failure to comply with our obligations under our agreements with Mr. Piontek, (iii) diminution of Mr. Piontek’s salary or benefits, (iv) our failure to obtain the assumption of Mr. Piontek’s employment agreement by any successor or assignee of ours or (v) the relocation of Mr. Piontek’s principal place of employment by more than 50 miles from The Woodlands, Texas. As used in this agreement, “Cause” has the same meaning as in Mr. Howes’ agreement.
| Employment Agreement with Matthew S. Lanigan |
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| Employment Agreement with Bruce C. Smith |
Employment Agreement with E. Chipman Earle |
an annual base salary, which is currently $424,400 (as adjusted effective April 1, 2019), an opportunity under our annual cash incentive
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Mr. Smith’s
In the event Mr. SmithEarle terminates his employment with us for Good Reason or is terminated by us without Cause, Mr. Smithhis employment agreement contemplates that he will be entitled to (i) a lump sum payment equal to the sum of the following: (A) his then current base salary plus target level annual bonus for the greater of the remaining initial or any renewal term of the agreement or one year. In addition, Mr. Smith will receive (i)year; (B) his target level annual bonus for the year in which the termination occurs; and (C) an amount equal to his target level annual bonus pro-rated to cover the greater of the number of months remaining in the initial or any renewal term and 12 months; (ii) full vesting of all options and restricted stock granted as an inducement to employment, (ii)employment; (iii) continuation of medical and dental health benefits, and disability benefits for the greater of the initial term of the employment agreement or 12 months (with a maximum benefit of 18 months); and (iii)(iv) payment of outplacement fees, within one yearthe one-year period after termination, of up to $20,000.
| Retirement Agreement with Mark J. Airola |
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Mr. Airola’s employment with us will terminate (a) automatically upon his death or disability, (b) at Mr. Airola’s election upon 30 days’ notice to us for “Good Reason” (as defined below) or Mr. Airola’s voluntary resignation at his election and without Good Reason, (c) by us for “Cause” (as defined below), (d) by us without Cause or (e) with 60 days’ notice given by us or Mr. Airola in advance of the expiration of the initial or any successive employment terms under Mr. Airola’s employment agreement. As used in this agreement, “Good Reason” means (i) our unreasonable interference with Mr. Airola’s performance of his duties, (ii) a detrimental change in Mr. Airola’s duties, responsibilities or status, (iii) our failure to comply with our obligations under our agreements with Mr. Airola (iv) diminutionterminated on September 30, 2018. On October 2, 2018, we entered into a Retirement Agreement and General Release (the
In the eventtime after his retirement date, Mr. Airola terminates his employment with us for Good Reason or is terminated by us without Cause, Mr. Airola will be entitled toreceived as severance a lump sum payment equal to $246,463, less applicable withholdings. Under the Retirement Agreement, Mr. Airola’s unvested time-based restricted stock units, time-based stock options and time-based cash awards would continue to vest in accordance with their original vesting schedule. The performance-based units and performance-based cash awards would vest and pay out on a pro-rata basis to his then current base salary plus target level annual bonusretirement date. Mr. Airola also received an extension to the post-termination exercise period for his outstanding stock options until the greaterearlier of (i) two years from his retirement date or (ii) the original expiration date of the remaining initial term of the agreement or one year. In addition,option. Mr. Airola will receive (i) full vesting of all optionsremains subject to an indefinite confidentiality obligation and restricted stock granted as an inducement to employment, (ii) continuation of medicaltwo-year post-employment non-solicitation, non-competition and dental health benefits, and disability benefits for the greater of the initial term of the employment agreement or 12 months (with a maximum benefit of 18 months) and (iii) payment of outplacement fees, within one year after termination, of up to $20,000.
| Separation Agreement with Phillip T. Vollands |
The Employment Agreement, dated July 1, 2017, with Jeffery L. Juergens.Mr. Vollands terminated on November 15, 2018. On October 15, 2010, Mr. JuergensDecember 3, 2018, we entered into an employment agreement with us under which he serves as Vice Presidenta Separation Agreement and President of Mats and Integrated Services. The initial term of the employment agreement is from October 18, 2010 through October 17, 2013, with automatic renewal thereafter for successive one-year periods, unless Mr. Juergens’ employment is terminated by either party giving 60 days written notice. Under this employment agreement, Mr. Juergens is entitled to receive the following compensation and benefits:
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Mr. Juergens’ employment with us will terminate (a) automatically upon his death or disability, (b) at Mr. Juergens’ election upon 30 days’ notice to us for “Good Reason” (as defined below) or Mr. Juergens’ voluntary resignation at his election and without Good Reason, (c) by us for “Cause” (as defined below), (d) by us without Cause or (e) with 60 days’ notice given by us or Mr. Juergens in advance of the expiration of the initial or any successive employment terms under Mr. Juergens’ employment agreement. As used in this agreement, “Good Reason” means (i) a detrimental change in Mr. Juergens’ duties, responsibilities or status, (ii) our failure to comply with our obligations under our agreementsGeneral Release (the “Separation Agreement”) with Mr. Juergens, (iii) diminutionVollands. Pursuant to the terms of his Employment Agreement, Mr. Juergens’ salary or benefits, (iv) our failure to obtain the assumption of Mr. Juergens’ employment agreement by any successor or assignee of us or (v) requiring Mr. Juergens to relocate more than 50 miles from Lafayette, Louisiana. As used in this agreement, “Cause” has the same meaningVollands received as in Mr. Howes’ agreement.
In the event Mr. Juergens terminates his employment with us for Good Reason or is terminated by us without Cause, Mr. Juergens will be entitled to a lump sum payment, equalsubject to withholdings, (i) all pay through his then current base salary plus target level annual bonusseparation date, (ii) payment for the greaterall accrued, unused vacation, (iii) a total separation amount of the remaining initial term of the agreement or one year. In addition, Mr. Juergens will receive (i) full vesting of all options$1,105,360, (iv) continued coverage under group health and restricted stock granted as an inducement to employment, (ii) continuation of medical and dental health benefits, and disability benefitsother plans for the greater of the initial term of the employment agreement or18 months, with 12 months (with a maximum benefit of 18 months)being paid by the Company, and (iii)(v) payment of outplacement fees, within one year afterservices not to exceed $20,000. In return for his execution of the Separation Agreement, Mr. Vollands received (a) vesting of a pro-rata portion of the time-based restricted stock unit award granted on May 18, 2017, (b) vesting of a pro-rata portion of the time-based cash award granted on June 10, 2017, (c) extension of his post-termination exercise period for vested time-based stock options to the earlier of 12 months from his date of termination or the expiration date of uphis stock options and (d) a cash payment of $69,445 equal to $20,000.
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| COMPENSATION DISCUSSION AND ANALYSIS | 2019 Proxy Statement | 37 | |
Although our Compensation Committee considers tax deductibility in the design and administration of our executive compensation plans and programs, our Compensation Committee believes that our interests are best served by providing competitive levels of compensation to our NEOs, even if it results in the non-deductibility of certain amounts under the Internal Revenue Code. 2018. Name and Principal Position Year Salary Stock Awards (1) Option Awards (1) Non-Equity Incentive Plan Compensation (2) All Other Compensation (3) Total Paul L. Howes 2015 2014 2013 Gregg S. Piontek 2015 2014 2013 Bruce C. Smith 2015 2014 2013 Mark J. Airola 2015 2014 2013 Jeffery L. Juergens 2015 2014 2013 (2)Accounting.TAX AND ACCOUNTING IMPLICATIONSOur Compensation Committee considers the financial compensation expense and tax deductibility, among other things, when deciding on the type, mix and amounts of awards to grant under our executive compensation program.Accounting We account for equity compensation expenses for our employees under the rules of ASC Topic 718, which requires us to estimate and record an expense for each award of long-term incentive compensation over the liferequisite service period in an amount equal to the fair value of its vesting period.Tax Deductibility of Pay.the awards granted.Tax Deductibility of Pay In conducting the compensation programs applicable todesigning our executive officers,compensation program for 2018, the Compensation Committee considersconsidered the effects of Section 162(m) of the Internal Revenue Code, which denies publicly heldunder prior law denied publicly-held companies a tax deduction for annual compensation in excess of $1$1.0 million paid to their chief executive officer or generally their three other most highly compensated corporate officers who are employed on the last day of a given year, unless that compensation is based on performance criteria that are established by a committee of outside directors and approved, as to their material terms, by that company’s stockholders.Based Pursuant to tax law changes made effective for 2018, our CEO, CFO and other NEOs will be included in the executives whose compensation is subject to the $1.0 million limit imposed by Section 162(m). Further to this rule, should any of our current NEOs no longer meet the statutory guidelines for being considered a “covered person” as that term is defined in the Internal Revenue Code, such executive will remain subject to the deductibility limitation of Section 162(m). The exception previously afforded to awards subject to performance criteria has been eliminated beginning effective 2018 with the result that all of our CEO, CFO and other NEO compensation going forward will be subject to the $1.0 million limit on current interpretive authority,deductibility. Our performance-based restricted stock units and stock options granted prior to November 3, 2017 under the 2015 Plan willcontinue to be deductible, so long as those awards are not materially modified.For awards granted on or after November 3, 2017, all taxable compensation paid to our ability to deductNEOs, including compensation expense generated in connection with the exercise of options and performance-based restricted stock units granted under our stock incentive plan should qualify as performance-based compensation and should2015 Plan are not be limited by Section 162(m). Our time-based restricted stock awards and units would not qualify as performance-based compensation underexempt from the Section 162(m) and, therefore, will be subject to the deduction limit. To the extent the total of salary and other compensation for any of our applicable executive officers exceeds one million dollars in any year and does not qualify as performance-based compensation, the limitation on deductibility under Section 162(m) will apply. As a result, weWe have in the past, and may from time to time in the future, pay compensation amounts to our executive officers that are not deductible.Section 409A of the Internal Revenue Code governs the taxation of certain types of Other Tax Implications “nonqualified“non-qualified deferred compensation.” Failure to comply with the requirements of Section 409A can result in adverse income tax consequences to our executives, including the accelerated income taxation of noncompliantnon-compliant compensation, the imposition of an additional 20% tax on such noncompliantnon-compliant compensation, and the imposition of interest on those taxes. We have taken precautions in the design of our employment agreements (including the severance and change in control provisions), as well as our 2015 Employee Equity Incentive Plan and 2010 Annual Cash Incentive Plan and all equity and incentive award agreements, to help ensure exemption from or compliance with Section 409A and the regulations promulgated thereunder.Compensation Committee Interlocks and Insider ParticipationCOMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONThe members of our Compensation Committee in 2018 were Messrs. Mingé (Chairman since May 2018), Finley, Larson and Warren and Ms. Robeson. Mr. Best served as a member and chairman of our Compensation Committee until May 2018 when he was elected Chairman of the Board. No member of the Compensation Committee in 2015 were Mr. Best (Chairman), Mr. Finley, Mr. Larson, Dr. McFarland and Mr. Warren. No member of the Compensation Committee2018 is a current or former officer or employee of ours or any of our subsidiaries or had any relationship requiring disclosure under applicable SEC rules. Additionally, none of our executive officers served as a director or member of the compensation committee of another entity, one of whose executive officers served as a director or member of our Compensation Committee. COMPENSATION DISCUSSION AND ANALYSIS 2019 Proxy Statement | 38 COMPENSATION COMMITTEE REPORTThe Compensation Committee has reviewed and discussed with our management the Compensation Discussion and Analysis included in this Proxy Statement. Based on this review and discussions,discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Proxy Statement and incorporated by reference in our Annual Report on Form 10-K for the year ended December 31, 2015.Compensation Committee of the Board of DirectorsAnthony J. BestJohn C. Mingé (Chairman)G. Stephen FinleyRoderick A. LarsonJames W. McFarland, PhDRose M. RobesonGary L. Warren44Table Of ContentsEXECUTIVECOMPENSATION COMPENSATION DISCUSSION AND ANALYSIS 2019 Proxy Statement | 39 EXECUTIVE COMPENSATIONThe following table SUMMARY COMPENSATION TABLE showssets forth information regarding the compensation forof our Chief Executive Officer, Chief Financial OfficerNEOs during 2016, 2017 and our three other most highly compensated executive officers for the fiscal years ended December 31, 2013, 2014 and 2015. $ 750,000 $ 1,838,018 $ 612,408 $ 105,000 $ 35,547 $ 3,340,973 President and Chief $ 741,250 $ 1,856,239 $ 618,982 $ 960,515 $ 34,022 $ 4,211,008 Executive Officer $ 698,750 $ 4,293,602 $ 583,124 $ 684,038 $ 33,797 $ 6,293,311 $ 368,500 $ 492,587 $ 164,122 $ 33,534 $ 31,605 $ 1,090,348 Vice President, $ 360,125 $ 497,466 $ 165,887 $ 303,323 $ 29,070 $ 1,355,871 Chief Financial Officer $ 326,250 $ 461,099 $ 153,680 $ 207,598 $ 30,145 $ 1,178,772 $ 416,000 $ 602,418 $ 200,719 $ 58,195 $ 34,392 $ 1,311,724 Executive Vice President and $ 412,000 $ 608,392 $ 202,873 $ 346,394 $ 33,917 $ 1,603,576 President of Fluids Systems $ 397,500 $ 596,450 $ 198,793 $ 233,597 $ 32,740 $ 1,459,080 $ 385,000 $ 543,230 $ 180,998 $ 35,035 $ 31,097 $ 1,175,360 Senior Vice President, General $ 376,250 $ 548,613 $ 182,941 $ 316,905 $ 30,372 $ 1,455,081 Counsel, Chief Administrative Officer & Secretary $ 346,250 $ 508,511 $ 169,484 $ 203,376 $ 31,447 $ 1,259,068 $ 360,000 $ 414,388 $ 138,067 $ 94,991 $ 34,151 $ 1,041,597 Vice President and $ 351,250 $ 418,485 $ 139,551 $ 440,685 (4) $ 32,126 $ 1,382,097 President of Mats and Integrated Services $ 317,500 $ 733,273 $ 128,385 $ 211,514 $ 31,901 $ 1,422,573 Name andPrincipal PositionYear Salary Bonus StockAwards(1)OptionAwards(1)Non-Equity Incentive PlanCompensation(2)All OtherCompensation(3)Total Paul L. HowesPresident and Chief Executive Officer2018 $ 787,503 $ 206,254 $ 1,359,991 — $ 794,438 $ 37,239 $ 3,185,425 2017 $ 731,250 — $ 1,627,493 — $ 2,091,451 $ 23,564 $ 4,473,758 2016 $ 687,500 — $ 1,618,451 $ 541,058 $ 202,813 $ 35,367 $ 3,085,189 Gregg S. PiontekSenior Vice President and Chief Financial Officer2018 $ 413,880 $ 57,751 $ 1,525,849 — $ 313,144 $ 30,935 $ 2,341,559 2017 $ 371,670 — $ 346,499 — $ 690,960 $ 22,167 $ 1,431,296 2016 $ 337,792 — $ 433,743 $ 145,002 $ 64,772 $ 23,217 $ 1,004,526 Matthew S. LaniganVice President and President, Mats & Integrated Services2018 $ 376,257 $ 43,750 $ 828,369 — $ 315,397 $ 30,985 $ 1,594,758 2017 $ 341,253 — $ 362,489 — $ 592,811 $ 22,890 $ 1,319,443 2016 $ 219,188 — $ 469,496 $ 206,585 $ 14,247 $ 13,480 $ 922,996 Bruce C. SmithExecutive Vice President and President, Fluids Systems2018 $ 416,004 $ 52,000 $ — — $ 272,784 $ 35,631 $ 776,419 2017 $ 405,603 — $ 207,995 — $ 479,226 $ 25,011 $ 1,117,835 2016 $ 381,333 — $ 530,455 $ 177,336 $ 64,788 $ 33,502 $ 1,187,414 E. Chipman Earle(4)
Vice President, General Counsel, Chief Administrative Officer and Corporate Secretary2018 $ 155,305 — $ 487,500 — $ 110,767 $ 8,505 $ 762,077 Phillip T. Vollands(5)Former Vice President and President, Fluids Systems2018 $ 346,880 $ 41,668 $ 330,815 — — $ 1,146,851 $ 1,866,214 Mark J. Airola(6)
Former Senior Vice President, General Counsel, Chief Administrative Officer and Corporate Secretary2018 $ 288,756 $ 60,960 — — $ 189,344 $ 56,642 $ 595,702 2017 $ 375,381 — $ 365,750 — $ 697,859 $ 21,987 $ 1,460,977 2016 $ 352,917 — $ 478,341 $ 159,912 $ 67,672 $ 24,286 $ 1,083,128 (1)(1) Dollar amount reported reflects the aggregate fair value determined as of the date of award or grant, in each case calculated in accordance with ASC Topic 718. See Note 11, “Stock Based“Stock-Based Compensation and Other Benefit Plans,” in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the fiscal year ended 2015,December 31, 2018 for the relevant assumptions used in the calculation of these amounts. The amount listed includes grant date fair value for the performance-based restricted stock units based on probable outcome of the underlying performance conditions. The maximum fair values of such awards at the grant date, assuming achievement of the highest level of performance are as follows: Mr. Howes - $919,164; Mr. Piontek - $246,328; Mr. Smith - $301,256; Mr. Airola - $271,654 and Mr. Juergens - $207,227.Reflects amounts earned under our 2010 Annual Cash Incentive Plan whichthat were awardedearned in 2013, 20142016, 2017 and 2015. (3)The2018. For 2017, the amount for “All Other Compensation”reflected includes the following amounts for 2015:
Paul L. Howes Gregg S. Piontek Bruce C. Smith Mark J. Airola Jeffery L. Juergens Physical Life Insurance Car Allowance/Personal Use of Company Car Annual Stipend in accordance with Employment Agreement Matching Contributions under 401(k) Matching Contribution for Health Savings Account $ 1,300 $ 1,300 $ — $ — $ 1,300 $ 2,322 $ 1,530 $ 3,564 $ 2,322 $ 4,076 $ — $ 15,600 $ 18,153 $ 15,600 $ 15,600 $ 20,000 $ — $ — $ — $ — $ 11,925 $ 11,925 $ 11,925 $ 11,925 $ 11,925 $ — $ 1,250 $ 750 $ 1,250 $ 1,250
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| EXECUTIVE COMPENSATON | 2019 Proxy Statement | 40 | |
| (3) | The amounts shown for “All Other Compensation” are detailed in the table below. The amounts listed for matching contributions under our 401(k) plan are immediately vested, except Mr. Earle’s matching contributions under our 401(k) plan which will vest at a rate of 20% for each year of completed service. |
Paul L. Howes | Gregg S. Piontek | Matthew S. Lanigan | Bruce C. Smith | E. Chipman Earle | Phillip T. Vollands | Mark J. Airola | |||||||||||||||
| Life Insurance | $ | 3,564 | $ | 1,710 | $ | 1,710 | $ | 6,858 | $ | 306 | $ | 709 | $ | 2,673 | |||||||
| Car Allowance/Personal Use of Company Car | — | $ | 15,600 | $ | 15,600 | $ | 16,398 | $ | 5,893 | $ | 13,650 | $ | 11,700 | ||||||||
| Annual Stipend in accordance with Employment Agreement | $ | 20,000 | — | — | — | — | — | — | |||||||||||||
| Matching Contributions under 401(k) | $ | 12,375 | $ | 12,375 | $ | 12,375 | $ | 12,375 | $ | 2,306 | $ | 10,924 | $ | 12,375 | |||||||
| Matching Contribution for Health Savings Account | — | $ | 1,250 | — | — | — | — | $ | 1,250 | ||||||||||||
| Executive Physical | $ | 1,300 | — | $ | 1,300 | — | — | $ | 1,300 | $ | 1,300 | ||||||||||
| Benefit Received upon Termination of Employment | — | — | — | — | — | $ | 1,120,268 | $ | 27,344 | ||||||||||||
| (4) | Mr. Earle’s employment with us commenced on August 15, 2018. |
| (5) | Mr. Vollands’ employment with us terminated on November 15, 2018. |
| (6) | Mr. Airola’s employment with us terminated on September 30, 2018. |
| EXECUTIVE COMPENSATON | 2019 Proxy Statement | 41 | |
GRANTSOF PLAN-BASED AWARDS IN |
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) Estimated Future Payouts Under Equity Incentive Plan Awards(2) All Other Stock Awards: Number of All Other Option Awards: Number of Exercise or Base Price Grant Date Fair Value of Stock and Name Grant Date Threshold Target Maximum Threshold Target Maximum Shares of Stock or Units Securities Underlying Options of Option Awards Option Awards (3) Paul L. Howes 2/25/2015 5/22/2015 5/22/2015 5/22/2015 Gregg S. Piontek 2/25/2015 5/22/2015 5/22/2015 5/22/2015 Bruce C. Smith 2/25/2015 5/22/2015 5/22/2015 5/22/2015 Mark J. Airola 2/25/2015 5/22/2015 5/22/2015 5/22/2015 Jeffery L. Juergens 2/25/2015 5/22/2015 5/22/2015 5/22/2015 $ 187,500 $ 750,000 $ 1,500,000 − − − − − − − − − − 18,270 60,900 91,350 − − − $ 612,776 − − − − − − 136,138 (4) − − $ 1,225,242 − − − − − − − 156,514 $ 9.00 $ 612,408 $ 59,881 $ 239,525 $ 479,050 − − − − − − − − − − 4,896 16,321 24,481 − − − $ 164,222 − − − − − − 36,485 (4) − − $ 328,365 − − − − − − − 41,945 $ 9.00 $ 164,122 $ 67,600 $ 270,400 $ 540,800 − − − − − − − − − − 5,988 19,960 29,940 − − − $ 200,838 − − − − − − 44,620 (4) − − $ 401,580 − − − − − − − 51,298 $ 9.00 $ 200,719 $ 62,563 $ 250,250 $ 500,500 − − − − − − − − − − 5,399 17,999 26,998 − − − $ 181,106 − − − − − − 40,236 (4) − − $ 362,124 − − − − − − − 46,258 $ 9.00 $ 180,998 $ 58,500 $ 234,000 $ 468,000 − − − − − − − − − − 4,119 13,730 20,595 − − − $ 138,151 − − − − − − 30,693 (4) − − $ 276,237 − − − − − − − 35,286 $ 9.00 $ 138,067
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units | Grant Date Fair Value of Stock and Option Awards(1) | |||||||||||||||
| Name | Grant Date | Threshold | Target | Maximum | |||||||||||||
| Paul L. Howes | 2/20/2018 | $ | 240,000 | $ | 800,000 | $ | 1,600,000 | (2) | — | — | |||||||
| 5/16/2018 | — | — | — | 128,301 | (4) | $ | 1,359,991 | ||||||||||
| 5/16/2018 | $ | 204,000 | $ | 680,000 | $ | 1,020,000 | (3) | — | — | ||||||||
| 5/16/2018 | — | $ | 680,000 | — | — | — | |||||||||||
| Gregg S. Piontek | 2/20/2018 | $ | 95,288 | $ | 317,625 | $ | 635,250 | (2) | — | — | |||||||
| 5/16/2018 | — | — | — | 100,000 | (5) | $ | 1,060,000 | ||||||||||
| 5/16/2018 | — | — | — | 43,948 | (4) | $ | 465,849 | ||||||||||
| 5/16/2018 | $ | 69,878 | 232,925 | $ | 349,388 | (3) | — | — | |||||||||
| 5/16/2018 | — | 232,925 | — | — | — | ||||||||||||
| Matthew S. Lanigan | 2/20/2018 | $ | 80,850 | $ | 269,500 | $ | 539,000 | (2) | — | — | |||||||
| 5/16/2018 | — | — | — | 28,148 | (4) | 298,369 | |||||||||||
| 5/16/2018 | — | — | — | 50,000 | (5) | 530,000 | |||||||||||
| 5/16/2018 | $ | 44,756 | $ | 149,188 | $ | 223,782 | (3) | — | — | ||||||||
| 5/16/2018 | — | $ | 149,188 | — | — | — | |||||||||||
| Bruce C. Smith | 2/20/2018 | $ | 81,120 | $ | 270,400 | $ | 540,800 | (2) | — | — | |||||||
| E. Chipman Earle | 8/15/2018 | $ | 86,100 | $ | 287,000 | $ | 574,000 | (2) | — | — | |||||||
| 8/15/2018 | — | — | — | 50,000 | (6) | $ | 487,500 | ||||||||||
| Phillip T. Vollands | 2/20/2018 | $ | 84,210 | $ | 280,700 | $ | 561,400 | (2) | — | — | |||||||
| 5/16/2018 | — | — | — | 31,209 | (4) | $ | 330,815 | ||||||||||
| 5/16/2018 | — | $ | 165,413 | — | — | — | |||||||||||
| 5/16/2018 | $ | 49,624 | $ | 165,413 | $ | 248,120 | (3) | — | — | ||||||||
| Mark J. Airola | 2/20/2018 | $ | 75,075 | $ | 250,250 | $ | 500,500 | (2) | — | — | |||||||
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| (1) | Dollar amount reported reflects the fair value on the date of award or grant, in each case calculated in accordance with ASC Topic 718. See Note 11, “Stock-Based Compensation and Other Benefit Plans,” in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 for the relevant assumptions used to determine the valuation of our stock awards. |
| (2) | Represents threshold, target and over-achievement payout levels under our 2010 Annual Cash Incentive Plan for |
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| Represents shares of time-based restricted stock units granted under the 2015 Plan. These awards vest |
(6) | Represents shares of time-based restricted stock units granted under the 2015 Plan. These awards vest at the rate of 50% on the second anniversary of the commencement of Mr. Earle’s employment, with the balance vesting on the fourth anniversary of the commencement of his employment. |
| EXECUTIVE COMPENSATON | 2019 Proxy Statement | 42 | |
OUTSTANDINGEQUITY AWARDS AT FISCAL YEAR END |
Option Awards Stock Awards Name Number of Securities Underlying Unexercised Options Exercisable (#) Number of Securities Underlying Unexercised Options Unexercisable (#) Option Exercise Price ($/Sh) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested($) (1) Equity Incentive PlanAwards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Paul L. Howes 6/11/2017 6/9/2018 6/10/2019 6/8/2021 6/5/2022 6/5/2023 5/21/2024 5/22/2025 Gregg S. Piontek 6/11/2017 6/9/2018 6/10/2019 6/8/2021 6/5/2022 6/5/2023 5/21/2024 5/22/2025 Bruce C. Smith 6/11/2017 6/9/2018 6/10/2019 6/8/2021 6/5/2022 6/5/2023 5/21/2024 5/22/2025 Mark J. Airola 6/10/2019 6/8/2021 6/5/2022 6/5/2023 5/21/2024 5/22/2025 Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) 80,000 − $ 7.82 − − − − 150,000 − $ 7.89 − − − − 200,000 − $ 3.31 − − − − 139,225 − $ 9.13 − − − − 200,000 − $ 5.57 − − − − 71,679 35,839 (2) $ 11.43 − − − − 41,499 82,997 (3) $ 11.20 − − − − − 156,514 (4) $ 9.00 − − − − − − − − 34,017 (5) $ 179,610 − − − − − − 100,000 (6) $ 528,000 − − − − − − 73,660 (7) $ 388,925 − − − − − − 136,138 (8) $ 718,809 − − − − − − − − 44,482 (9) $ 234,865 − − − − − − 49,302 (9) $ 260,315 − − − − − − 60,900 (9) $ 321,552 20,000 − $ 7.82 − − − − 28,100 − $ 7.89 − − − − 23,390 − $ 3.31 − − − − 19,246 − $ 9.13 − − − − 83,171 − $ 5.57 − − − − 18,891 9,445 (10) $ 11.43 − − − − 11,122 22,243 (11) $ 11.20 − − − − − 41,945 (12) $ 9.00 − − − − − − − − 8,965 (13) $ 47,335 − − − − − − 19,740 (14) $ 104,227 − − − − − − 36,485 (15) $ 192,641 − − − − − − − − 11,723 (9) $ 61,897 − − − − − − 13,213 (9) $ 69,765 − − − − − − 16,321 (9) $ 86,175 50,000 − $ 7.82 − − − − 87,500 − $ 7.89 − − − − 41,562 − $ 3.31 − − − − 47,071 − $ 9.13 − − − − 131,774 − $ 5.57 − − − − 24,436 12,218 (16) $ 11.43 − − − − 13,602 27,202 (17) $ 11.20 − − − − − 51,298 (18) $ 9.00 − − − − − − − − 11,596 (19) $ 61,227 − − − − − − 24,142 (20) $ 127,470 − − − − − − 44,620 (21) $ 235,594 − − − − − − − − 15,164 (9) $ 80,066 − − − − − − 16,159 (9) $ 85,320 − − − − − − 19,960 (9) $ 105,389 127,250 − $ 3.31 − − − − 36,820 − $ 9.13 − − − − 89,972 − $ 5.57 − − − − 20,834 10,416 (22) $ 11.43 − − − − 12,265 24,530 (23) $ 11.20 − − − − − 46,258 (24) $ 9.00 − − − − − − − − 9,887 (25) $ 52,203 − − − − − − 21,770 (26) $ 114,946 − − − − − − 40,236 (27) $ 212,446 − − − − − − − − 12,928 (9) $ 68,260 − − − − − − 14,571 (9) $ 76,935 − − − − − − 17,999 (9) $ 95,035
| Option Awards | Stock Awards | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | |||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($/Sh) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested($)(1) | ||||||||||||||||
| Paul L. Howes | 200,000 | — | $ | 3.31 | 6/10/2019 | — | — | — | — | |||||||||||||
| 139,225 | — | $ | 9.13 | 6/8/2021 | — | — | — | — | ||||||||||||||
| 200,000 | — | $ | 5.57 | 6/5/2022 | — | — | — | — | ||||||||||||||
| 107,518 | — | $ | 11.43 | 6/5/2023 | — | — | — | — | ||||||||||||||
| 124,496 | — | $ | 11.20 | 5/21/2024 | — | — | — | — | ||||||||||||||
| 156,514 | — | $ | 9.00 | 5/22/2025 | — | — | — | — | ||||||||||||||
| 183,062 | 91,531 | (2) | $ | 4.32 | 5/19/2026 | — | — | — | — | |||||||||||||
| — | — | — | — | 83,239 | (3) | $ | 571,852 | — | — | |||||||||||||
| — | — | — | — | 50,000 | (4) | $ | 343,500 | — | — | |||||||||||||
| — | — | — | — | 105,768 | (5) | $ | 726,626 | — | — | |||||||||||||
| — | — | — | — | 128,301 | (6) | $ | 881,428 | — | — | |||||||||||||
| — | — | — | — | — | — | 104,283 | (7) | $ | 716,424 | |||||||||||||
| Gregg S. Piontek | 19,246 | — | $ | 9.13 | 6/8/2021 | — | — | — | — | |||||||||||||
| 83,171 | — | $ | 5.57 | 6/5/2022 | — | — | — | — | ||||||||||||||
| 28,336 | — | $ | 11.43 | 6/5/2023 | — | — | — | — | ||||||||||||||
| 33,365 | — | $ | 11.20 | 5/21/2024 | — | — | — | — | ||||||||||||||
| 41,945 | — | $ | 9.00 | 5/22/2025 | — | — | — | — | ||||||||||||||
| 49,060 | 24,530 | (8) | $ | 4.32 | 5/19/2026 | — | — | — | — | |||||||||||||
| — | — | — | — | 22,308 | (9) | $ | 153,256 | — | — | |||||||||||||
| — | — | — | — | 29,615 | (10) | $ | 203,455 | — | — | |||||||||||||
| — | — | — | — | 43,948 | (11) | $ | 301,923 | — | — | |||||||||||||
| — | — | — | — | 100,000 | (12) | $ | 687,000 | — | — | |||||||||||||
| — | — | — | — | — | — | 27,948 | (7) | $ | 192,003 | |||||||||||||
| Matthew S. Lanigan | 34,948 | 34,948 | (13) | $ | 4.32 | 5/19/2026 | — | — | — | — | ||||||||||||
| — | — | — | — | 25,000 | (14) | $ | 171,750 | — | — | |||||||||||||
| — | — | — | — | 7,945 | (15) | $ | 54,582 | — | — | |||||||||||||
| — | — | — | — | 22,435 | (16) | $ | 154,128 | — | — | |||||||||||||
| — | — | — | — | 12,820 | (17) | $ | 88,073 | — | — | |||||||||||||
| — | — | — | — | 50,000 | (18) | $ | 343,500 | — | — | |||||||||||||
| — | — | — | — | 28,148 | (19) | $ | 193,377 | — | — | |||||||||||||
| — | — | — | — | — | — | 19,908 | (7) | $ | 136,768 | |||||||||||||
Name Number of Securities Underlying Unexercised Options Unexercisable (#) Option Exercise Price ($/Sh) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested($) (1) Equity Incentive PlanAwards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Jeffery L. Juergens 6/8/2021 6/5/2022 6/5/2023 5/21/2024 5/22/2025 Option Awards Stock Awards Number of Securities Underlying Unexercised Options Exercisable (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) 32,217 − $ 9.13 − − − − 58,782 − $ 5.57 − − − − 15,782 7,890 (28) $ 11.43 − − − − 9,356 18,712 (29) $ 11.20 − − − − − 35,286 (30) $ 9.00 − − − − − − − − 34,773 (31) $ 183,601 − − − − − − 7,489 (32) $ 39,542 − − − − − − 15,226 (33) $ 80,393 − − − − − − 16,606 (34) $ 87,680 − − − − − − 30,693 (35) $ 162,059 − − − − − − − − 9,793 (9) $ 51,707 − − − − − − 11,115 (9) $ 58,687 − − − − − − 13,730 (9) $ 72,494
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| EXECUTIVE COMPENSATON | 2019 Proxy Statement | 43 | |
| Option Awards | Stock Awards | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | |||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($/Sh) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested($)(1) | ||||||||||||||||
| Bruce C. Smith | 47,071 | — | $ | 9.13 | 6/8/2021 | — | — | — | — | |||||||||||||
| 131,774 | — | $ | 5.57 | 6/5/2022 | — | — | — | — | ||||||||||||||
| 36,654 | — | $ | 11.43 | 6/5/2023 | — | — | — | — | ||||||||||||||
| 40,804 | — | $ | 11.20 | 5/21/2024 | — | — | — | — | ||||||||||||||
| 51,298 | — | $ | 9.00 | 5/22/2025 | — | — | — | — | ||||||||||||||
| 60,000 | 30,000 | (20) | $ | 4.32 | 5/19/2026 | — | — | — | — | |||||||||||||
| — | — | — | — | 27,282 | (21) | $ | 187,427 | — | — | |||||||||||||
| — | — | — | — | 13,333 | (22) | $ | 91,598 | — | — | |||||||||||||
| — | — | — | — | — | — | 34,179 | (7) | $ | 234,810 | |||||||||||||
| E. Chipman Earle | — | — | — | — | 50,000 | (23) | $ | 343,500 | — | — | ||||||||||||
| Phillip T. Vollands | 15,258 | — | $ | 11.20 | 11/15/2019 | — | — | — | — | |||||||||||||
| 20,425 | — | $ | 9.00 | 11/15/2019 | — | — | — | — | ||||||||||||||
| 23,890 | — | $ | 4.32 | 11/15/2019 | — | — | — | — | ||||||||||||||
| Mark J. Airola | 36,820 | — | $ | 9.13 | 9/30/2020 | — | — | — | — | |||||||||||||
| 89,972 | — | $ | 5.57 | 9/30/2020 | — | — | — | — | ||||||||||||||
| 31,250 | — | $ | 11.43 | 9/30/2020 | — | — | — | — | ||||||||||||||
| 36,795 | — | $ | 11.20 | 9/30/2020 | — | — | — | — | ||||||||||||||
| 46,258 | — | $ | 9.00 | 9/30/2020 | — | — | — | — | ||||||||||||||
| 54,105 | 27,052 | (24) | $ | 4.32 | 9/30/2020 | — | — | — | — | |||||||||||||
| — | — | — | — | 24,602 | (25) | $ | 169,016 | — | — | |||||||||||||
| — | — | — | — | 31,260 | (26) | $ | 214,756 | — | — | |||||||||||||
| — | — | — | — | — | — | 30,821 | (7) | $ | 211,740 | |||||||||||||
| (1) | The market value is based upon the closing |
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| (5) | The 105,768 shares of restricted stock units vest as follows: 52,884 on June 1, |
| (6) | The 128,301 shares of restricted stock units vest as follows: 42,767 on June 1, |
| The amount shown represents the number of shares achievable at target for our relative TSR performance units, which may be earned in an amount equal to 0% to 150% of target based on our relative TSR performance against a specified peer group over the designated three-year performance period. |
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| EXECUTIVE COMPENSATON | 2019 Proxy Statement | 44 | |
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| (17) | The 12,820 shares of restricted stock units vest as follows: 6,410 on May 18, 2019 and |
| (18) | The 50,000 shares of restricted stock units vest as follows: 25,000 on June 1, |
| (19) | The 28,148 shares of restricted stock units vest as follows: 9,383 on June 1, 2019, 9,383 on June 1, 2020 and 9,382 on June 1, 2021. |
| (20) | The 30,000 options vest on June 1, 2019. |
| (21) | The 27,282 shares of restricted stock units vest on June 1, 2019. |
| (22) | The 13,333 shares of restricted stock units vest on June 1, 2019. |
| (23) | The 50,000 shares of restricted stock vest as follows: 25,000 on August 15, 2020 and 25,000 on August 15, 2022. |
| (24) | The 27,052 options vest on June 1, 2019. |
| (25) | The 24,602 shares of restricted stock units vest on June 1, 2019. |
| (26) | The 31,260 shares of restricted stock units vest as follows: 15,630 on June 1, 2019 and 15,630 on June 1, 2020. |
| OPTIONEXERCISES AND STOCK VESTED |
Option Awards Stock Awards Number of Shares Acquired on Exercise (#) Value Realized upon Exercise Number of Shares Acquired on Vesting Value Realized on Vesting(1) Paul L. Howes Gregg S. Piontek Bruce C. Smith Mark J. Airola Jeffery L. Juergens Name — — 204,181 $ 1,525,681 — — 43,198 $ 341,190 — — 83,424 $ 599,725 — — 73,310 $ 512,090 — — 66,171 $ 489,209
| Option Awards | Stock Awards | |||||||||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized upon Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting(1) | ||||||
| Paul L. Howes | 150,000 | $ | 370,050 | 272,854 | $ | 2,919,358 | ||||
| Gregg S. Piontek | 51,490 | $ | 241,777 | 73,758 | $ | 789,258 | ||||
| Matthew S. Lanigan | — | — | 44,163 | $ | 452,918 | |||||
| Bruce C. Smith | 87,500 | $ | 139,609 | 85,428 | $ | 913,421 | ||||
| Mark J. Airola | 127,250 | $ | 894,306 | 80,643 | $ | 862,827 | ||||
| Phillip T. Vollands | — | — | 40,135 | $ | 409,889 | |||||
| E. Chipman Earle | — | — | — | — | ||||||
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| (1) | Dollar values are calculated by multiplying the market price of our common stock on the vesting date by the number of shares vested and |
| Risk Assessment of Compensation Programs |
performance on both an absolute and relative basis.
| CEO Pay Ratio |
| EXECUTIVE COMPENSATON | 2019 Proxy Statement | 45 | |
| Countries Excluded | No. of Employees |
| India | 19 |
| Libya | 15 |
| Egypt | 13 |
| Chile | 13 |
| Albania | 12 |
| Germany | 12 |
| Hungary | 8 |
| Congo | 7 |
| Oman | 5 |
| New Zealand | 1 |
| Employment Agreements and Change in Control Agreements |
| PotentialPayments upon Change in Control |
On March 7, 2007, the Board, upon recommendation of the
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Paul L. Howes
Executive Compensation Voluntary Termination on 12/31/15 Voluntary Termination for Good Reason or Termination without Cause on 12/31/15 Termination due to Change in Control on 12/31/15 Termination for Cause on 12/31/15 Termination due to Disability on 12/31/15 Termination due to Death on 12/31/15 Compensation: Base Salary Short-term Incentive (100% of Base Salary) Long-term Incentives: Annual Stock Options Performance-based Restricted Shares Time Based Restricted Shares Benefits and Perquisites: Outplacement Health & Welfare Benefits Life Insurance Life Insurance Proceeds Disability Benefits per year(1) 401(k) Employer Contribution Total
and Benefits − $ 1,500,000 $ 2,242,500 − $ 375,000 − − $ 1,500,000 $ 4,190,802 − $ 750,000 $ 750,000 − − $ − − − − − − $ 816,732 − − − − − $ 1,815,343 − − − − $ 20,000 $ 20,000 − − − − $ 19,002 $ 38,004 − − − − − $ 6,699 − − − − − − − − $ 500,000 − − − − $ 120,000 − − − $ 35,775 − − − $ − $ 3,039,002 $ 9,174,258 $ − $ 1,245,000 $ 1,250,000
| EXECUTIVE COMPENSATON | 2019 Proxy Statement | 47 | |
| Paul L. Howes | ||||||||||||
Executive Compensation and Benefits | Voluntary Termination for Good Reason or Termination without Cause on 12/31/18 | Termination due to Change in Control on 12/31/18 | Termination due to Disability on 12/31/18 | Termination due to Death on 12/31/18 | ||||||||
| Compensation: | ||||||||||||
| Base Salary | $ | 1,600,000 | $ | 2,392,000 | $ | 400,000 | — | |||||
| Short-term Incentive (100% of Base Salary) | $ | 1,600,000 | $ | 6,253,438 | $ | 800,000 | $ | 800,000 | ||||
| Long-term Incentives: | ||||||||||||
| Stock Options | — | $ | 233,404 | — | — | |||||||
| Performance-based Restricted Shares | — | $ | 716,424 | — | — | |||||||
| Performance-Based Cash Awards | — | $ | 1,298,750 | — | — | |||||||
| Time-Based Cash Awards | — | $ | 1,092,496 | — | — | |||||||
| Time-Based Restricted Shares | — | $ | 2,523,406 | — | — | |||||||
| Benefits and Perquisites: | ||||||||||||
| Outplacement | $ | 20,000 | $ | 20,000 | — | — | ||||||
| Health & Welfare Benefits | $ | 20,646 | $ | 41,292 | — | — | ||||||
| Life Insurance | — | $ | 7,149 | — | — | |||||||
Life Insurance Proceeds(1) | — | — | — | $ | 500,000 | |||||||
Disability Benefits per year(2) | — | — | $ | 120,000 | — | |||||||
| Total | $ | 3,240,646 | $ | 14,578,359 | $ | 1,320,000 | $ | 1,300,000 | ||||
| (2) | Long-term disability benefits per year until no longer disabled or Social Security retirement age. |
| Gregg S. Piontek | ||||||||||||
Executive Compensation and Benefits | Voluntary Termination for Good Reason or Termination without Cause on 12/31/18 | Termination due to Change in Control on 12/31/18 | Termination due to Disability on 12/31/18 | Termination due to Death on 12/31/18 | ||||||||
| Compensation: | ||||||||||||
| Base Salary | $ | 423,500 | $ | 847,000 | $ | 211,750 | — | |||||
| Short-term Incentive (75% of Base Salary) | $ | 317,625 | $ | 1,381,920 | $ | 317,625 | $ | 317,625 | ||||
| Long-term Incentives: | ||||||||||||
| Stock Options | — | $ | 62,552 | — | — | |||||||
| Performance-based Restricted Shares | — | $ | 192,003 | — | — | |||||||
| Performance-based Cash Awards | — | $ | 406,175 | — | — | |||||||
| Time-Based Cash Awards | — | $ | 348,424 | — | — | |||||||
| Time-Based Restricted Shares | — | $ | 1,345,634 | — | — | |||||||
| Benefits and Perquisites: | ||||||||||||
| Outplacement | $ | 20,000 | $ | 5,000 | — | — | ||||||
| Health & Welfare Benefits | $ | 25,289 | $ | 16,859 | — | — | ||||||
| Life Insurance | — | $ | 1,710 | — | — | |||||||
| Life Insurance Proceeds | — | — | — | $ | 1,000,000 | |||||||
Disability Benefits per year(1) | — | — | $ | 120,000 | — | |||||||
| Total | $ | 786,414 | $ | 4,607,277 | $ | 649,375 | $ | 1,317,625 | ||||
| EXECUTIVE COMPENSATON | 2019 Proxy Statement | 48 | |
Gregg S. Piontek
Executive Compensation Voluntary Termination on 12/31/15 Voluntary Termination for Good Reason or Termination without Cause on 12/31/15 Termination due to Change in Control on 12/31/15 Termination for Cause on 12/31/15 Termination due to Disability on 12/31/15 Termination due to Death on 12/31/15 Compensation: Base Salary Short-term Incentive (65% of Base Salary) Long-term Incentives: Annual Stock Options Performance-based Restricted Shares Time Based Restricted Shares Benefits and Perquisites: Outplacement Health & Welfare Benefits Life Insurance Life Insurance Proceeds Disability Benefits per year(1) Total
and Benefits − $ 368,500 $ 737,000 − $ 184,250 − − $ 239,525 $ 606,646 − $ 239,525 $ 239,525 − − − − − − − − $ 217,837 − − − − − $ 344,203 − − − − $ 20,000 $ 5,000 − − − − $ 23,205 $ 30,940 − − − − − $ 6,510 − − − − − − − − $ 900,000 − − − − $ 120,000 − $ − $ 651,230 $ 1,948,136 $ − $ 543,775 $ 1,139,525
| Matthew S. Lanigan | ||||||||||||
Executive Compensation and Benefits | Voluntary Termination for Good Reason or Termination without Cause on 12/31/18 | Termination due to Change in Control on 12/31/18 | Termination due to Disability on 12/31/18 | Termination due to Death on 12/31/18 | ||||||||
| Compensation: | ||||||||||||
| Base Salary | $ | 385,000 | $ | 770,000 | $ | 192,500 | — | |||||
| Short-term Incentive (70% of Base Salary) | $ | 269,500 | $ | 1,185,622 | $ | 269,500 | $ | 269,500 | ||||
| Long-term Incentives: | ||||||||||||
| Stock Options | — | $ | 89,117 | — | — | |||||||
| Performance-based Restricted Shares | — | $ | 136,768 | — | — | |||||||
| Performance-based Cash Awards | $ | — | $ | 280,438 | — | — | ||||||
| Time-Based Cash Awards | $ | — | $ | 536,687 | — | — | ||||||
| Time-Based Restricted Shares | $ | 171,750 | $ | 1,005,410 | — | — | ||||||
| Benefits and Perquisites: | ||||||||||||
| Outplacement | $ | 20,000 | $ | 10,000 | — | — | ||||||
| Health & Welfare Benefits | — | — | — | — | ||||||||
| Life Insurance | — | $ | 3,420 | — | — | |||||||
| Life Insurance Proceeds | — | — | — | $ | 1,000,000 | |||||||
Disability Benefits per year(1) | — | — | $ | 120,000 | — | |||||||
| Total | $ | 846,250 | $ | 4,017,462 | $ | 582,000 | $ | 1,269,500 | ||||
Bruce C. Smith
Executive Compensation Voluntary Termination on 12/31/15 Voluntary Termination for Good Reason or Termination without Cause on 12/31/15 Termination due to Change in Control on 12/31/15 Termination for Cause on 12/31/15 Termination due to Disability on 12/31/15 Termination due to Death on 12/31/15 Compensation: Base Salary Short-term Incentive (65% of Base Salary) Long-term Incentives: Annual Stock Options Performance-based Restricted Shares Time Based Restricted Shares Benefits and Perquisites: Outplacement Health & Welfare Benefits Life Insurance Life Insurance Proceeds Disability Benefits per year(1) Total
and Benefits − $ 416,000 $ 832,000 − $ 208,000 − − $ 270,400 $ 692,788 − $ 270,400 $ 270,400 − − − − − − − − $ 270,774 − − − − − $ 424,290 − − − − $ 20,000 $ 10,000 − − − − $ 8,156 $ 10,874 − − − − − $ 4,466 − − − − − − − − $ 500,000 − − − − $ 120,000 − $ − $ 714,556 $ 2,245,192 $ − $ 598,400 $ 770,400
| Bruce C. Smith | ||||||||||||
Executive Compensation and Benefits | Voluntary Termination for Good Reason or Termination without Cause on 12/31/18 | Termination due to Change in Control on 12/31/18 | Termination due to Disability on 12/31/18 | Termination due to Death on 12/31/18 | ||||||||
| Compensation: | ||||||||||||
| Base Salary | $ | 416,000 | $ | 832,000 | $ | 208,000 | — | |||||
| Short-term Incentive (65% of Base Salary) | $ | 270,400 | $ | 958,452 | $ | 270,400 | $ | 270,400 | ||||
| Long-term Incentives: | ||||||||||||
| Stock Options | — | $ | 76,500 | — | — | |||||||
| Performance-Based Restricted Shares | — | $ | 234,810 | — | — | |||||||
| Performance-Based Cash Awards | — | $ | 104,000 | — | — | |||||||
| Time-Based Cash Awards | — | $ | 52,000 | — | — | |||||||
| Time-Based Restricted Shares | — | $ | 279,025 | — | — | |||||||
| Benefits and Perquisites: | ||||||||||||
| Outplacement | $ | 20,000 | $ | 10,000 | — | — | ||||||
| Health & Welfare Benefits | $ | 3,690 | $ | 4,920 | — | — | ||||||
| Life Insurance | — | $ | 13,716 | — | — | |||||||
| Life Insurance Proceeds | — | — | — | $ | 500,000 | |||||||
Disability Benefits per year(1) | — | — | $ | 120,000 | — | |||||||
| Total | $ | 710,090 | $ | 2,565,423 | $ | 598,400 | $ | 770,400 | ||||
| EXECUTIVE COMPENSATON | 2019 Proxy Statement | 49 | |
| E. Chipman Earle | ||||||||||||
Executive Compensation and Benefits | Voluntary Termination for Good Reason or Termination without Cause on 12/31/18 | Termination due to Change in Control on 12/31/18 | Termination due to Disability on 12/31/18 | Termination due to Death on 12/31/18 | ||||||||
| Compensation: | ||||||||||||
| Base Salary | $ | 1,074,695 | $ | 820,000 | $ | 205,000 | — | |||||
| Short-term Incentive (70% of Base Salary) | $ | 741,417 | $ | 574,000 | $ | 107,625 | $ | 107,625 | ||||
| Long-term Incentives: | ||||||||||||
| Time-Based Restricted Shares | 343,500 | $ | 343,500 | — | — | |||||||
| Benefits and Perquisites: | ||||||||||||
| Outplacement | $ | 20,000 | $ | 20,000 | — | — | ||||||
| Health & Welfare Benefits | $ | 22,952 | $ | — | — | — | ||||||
| Life Insurance | — | $ | 612 | — | — | |||||||
| Life Insurance Proceeds | — | — | — | $ | 500,000 | |||||||
Disability Benefits per year(1) | — | — | $ | 120,000 | — | |||||||
| Total | $ | 2,202,564 | $ | 1,758,112 | $ | 432,625 | $ | 607,625 | ||||
Mark J. Airola
Executive Compensation Voluntary Termination on 12/31/15 Voluntary Termination for Good Reason or Termination without Cause on 12/31/15 Termination due to Change in Control on 12/31/15 Termination for Cause on 12/31/15 Termination due to Disability on 12/31/15 Termination due to Death on 12/31/15 Compensation: Base Salary Short-term Incentive (65% of Base Salary) Long-term Incentives: Annual Stock Options Performance-based Restricted Shares Time Based Restricted Shares Benefits and Perquisites: Outplacement Health & Welfare Benefits Life Insurance Life Insurance Proceeds Disability Benefits per year(1) Total
and Benefits − $ 385,000 $ 770,000 − $ 192,500 − − $ 250,250 $ 633,810 − $ 250,250 $ 250,250 − − − − − − − − $ 240,229 − − − − − $ 379,595 − − − − $ 20,000 $ 10,000 − − − − $ 23,205 $ 30,940 − − − − − $ 4,466 − − − − − − − − $ 500,000 − − − − $ 120,000 − $ − $ 678,455 $ 2,069,040 $ − $ 562,750 $ 750,250
(1) Until no longer disabled or Social Security retirement age.
Jeffery L. Juergens
Executive Compensation Voluntary Termination on 12/31/15 Voluntary Termination for Good Reason or Termination without Cause on 12/31/15 Termination due to Change in Control on 12/31/15 Termination for Cause on 12/31/15 Termination due to Disability on 12/31/15 Termination due to Death on 12/31/15 Compensation: Base Salary Short-term Incentive (65% of Base Salary) Long-term Incentives: Annual Stock Options Performance-based Restricted Shares Time Based Restricted Shares Benefits and Perquisites: Outplacement Health & Welfare Benefits Life Insurance Life Insurance Proceeds Disability Benefits per year(1) Total
and Benefits − $ 360,000 $ 720,000 − $ 180,000 − − $ 234,000 $ 881,370 − $ 234,000 $ 234,000 − − − − − − − − $ 182,889 − − − − − $ 553,275 − − − − $ 20,000 $ 10,000 − − − − $ 17,361 $ 23,148 − − − − − $ 6,202 − − − − − − − − $ 840,000 − − − − $ 120,000 − $ − $ 631,361 $ 2,376,884 $ − $ 534,000 $ 1,074,000
(1) Until no longer disabled or Social Security retirement age.
| Retirement, |
Under theIf eligible, under our Retirement Policy, time-based restricted stock or
| EXECUTIVE COMPENSATON | 2019 Proxy Statement | 50 | |
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | |||||||
| Equity compensation plans approved by stockholders | 5,340,054 | (1) | $ | 7.13 | (2) | 2,952,383 | (3) | |||
| Equity compensation plans not approved by stockholders | — | — | — | |||||||
| Total | 5,340,054 | $ | 7.13 | 2,952,383 | ||||||
| (1) | Includes 3,311,726 shares subject to outstanding options under our Amended and Restated 2006 Equity Incentive Plan and our 2015 Plan, unvested time-based restricted stock units in the amount of 1,797,538 shares under our 2015 Plan and 230,790 shares subject to vesting of performance-based restricted stock units (at the target level) under our Amended and Restated 2006 Equity Incentive Plan and our 2015 Plan. |
| (2) | Weighted-average exercise price calculation excludes outstanding performance share awards and restricted stock units, which do not have an exercise price. |
| (3) | Includes 1,220,448 shares available for issuance under the Amended and Restated Employee Stock Purchase Plan, 418,680 shares available for issuance under the 2014 Non-Employee Directors’ Restricted Stock Plan and 1,313,255 shares available for issuance under the 2015 Plan. |
| EXECUTIVE COMPENSATON | 2019 Proxy Statement | 51 | |
The following table describes the current compensation arrangements with our non-employee directors:
Prior to March 1, 2016 After 2016 Annual Cash Retainer Fee (Chairman of the Board) Annual Cash Retainer Fee (other than the Chairman of the Board) Additional Annual Cash Retainer Fee for Audit Committee Chair Additional Annual Cash Retainer Fee for Audit Committee Members Additional Annual Cash Retainer Fee for Other Committee Chairs Additional Annual Cash Retainer Fee for Other Committee Members
March 1, $ 130,000 $ 117,000 $ 55,000 $ 49,500 $ 30,000 $ 27,000 $ 15,000 $ 13,500 $ 20,000 $ 18,000 $ 10,000 $ 9,000
Effective March 1, 2016,
| Component | Director Compensation |
| Annual Cash Retainer | Chairman of the Board - $130,000 Other non-employee Directors - $55,000 |
Annual Equity Retainer(1) | Chairman of the Board - Restricted stock award equal to $170,000 Other non-employee Directors - Restricted stock award equal to $150,000 Awards vest the earlier of one year from the date of grant or the date of the next annual stockholders meeting. |
| Committee Chair Annual Retainer | Audit Committee - $30,000 Compensation Committee - $30,000 Nominating and Corporate Governance Committee - $20,000 |
| Committee Member Annual Retainer | Audit Committee - $15,000 Compensation Committee - $10,000 Nominating and Corporate Governance Committee - $10,000 |
| (1) | Number of awards is determined by dividing the pre-determined value by the closing price of our common stock on reported on the NYSE on the date of grant, which is the date of our annual meeting of stockholders. The awards are granted under our 2014 Non-Employee Directors’ Restricted Stock Plan. |
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Under
| Name | Fees Earned or Paid in Cash ($)(2) | Stock Awards ($)(3)(4) | Total | ||||||
David C. Anderson(1) | $ | 38,441 | $ | — | $ | 38,441 | |||
| Anthony J. Best | $ | 119,059 | $ | 169,990 | $ | 289,049 | |||
| G. Stephen Finley | $ | 105,000 | $ | 149,995 | $ | 254,995 | |||
| Roderick A. Larson | $ | 100,000 | $ | 149,995 | $ | 249,995 | |||
| John C. Mingé | $ | 135,000 | $ | 149,995 | $ | 284,995 | |||
| Rose M. Robeson | $ | 90,000 | $ | 149,995 | $ | 239,995 | |||
| Gary L. Warren | $ | 90,000 | $ | 149,995 | $ | 239,995 | |||
| (1) | Mr. Anderson retired from our Board of Directors effective as of our 2018 Annual Meeting of Stockholders. |
Name Fees Earned or Paid in Cash ($) Stock Awards ($)(1) Option Awards ($)(2) Total David C. Anderson Anthony J. Best G. Stephen Finley Roderick A. Larson James W. McFarland, Ph.D. Gary L. Warren $ 130,000 (3) $ 169,992 — $ 270,827 $ 97,500 $ 149,994 — $ 228,969 $ 105,000 $ 149,994 — $ 254,998 $ 90,000 $ 149,994 — $ 228,969 $ 92,500 $ 149,994 — $ 247,498 $ 100,000 $ 149,994 — $ 249,998
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| (2) | The Board members are paid on a quarterly basis in advance, with the exception of Mr. Best, who is paid in advance on a monthly basis beginning May 2018. Mr. Mingé was appointed to the Board of Directors effective December 1, 2017 and was paid in the first quarter of 2018 for his service in December 2017. |
| (3) | Represents the aggregate grant date fair value for restricted stock awards granted to the non-employee directors in |
| (4) | |
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At December 31, |
| DIRECTOR COMPENSATON | 2018 Proxy Statement | 52 | |
| Nominees and Voting |
| Anthony J. Best | |
 | EXPERIENCE |
| Mr. Best currently serves as our Chairman of the Board. Mr. Best retired as Chief Executive Officer of SM Energy in January 2015 and did not stand for re-election to its Board in May 2015. He originally joined SM Energy Company in Denver in June 2006 as its President and Chief Operating Officer. He was named as Chief Executive Officer in February 2007 and was appointed to the board of the company at the same time and continued to serve on the board until May 2015. Between February 2003 and September 2005, Mr. Best served as President and Chief Executive Officer of Pure Resources, Inc., a Unocal development and exploration company in Midland, Texas. From April 2000 until February 2003, Mr. Best served as an independent consultant offering leadership and oil and gas consultation to energy companies and volunteer organizations. From October 1979 until April 2000, Mr. Best served in varying roles of increasing responsibility at Atlantic Richfield Company, with his last position being President, ARCO Latin America. Mr. Best serves as a part-time senior advisor to Quantum Energy Partners, a private equity firm. In February 2018, Mr. Best joined the board of Middle Fork Energy Partners, a portfolio company of Quantum Energy Partners. In January 2016, Mr. Best joined the Board of Directors of ExL Petroleum, LP, a portfolio company of Quantum Energy Partners. In January 2018, Mr. Best joined the Board of Directors of ProPetro Holding Corp. where he serves as a member of the Audit Committee and Compensation Committee. | |
Age 69 Director Since: 2014 Chairman of the Board Since: May 2018 Committees: None | |
| QUALIFICATIONS | |
| Mr. Best’s experience in upstream oil and gas exploration and production, in a variety of basins and geographies, provides our Board with further understanding of the needs of our customers. His senior management and executive level experience, along with his service on the board of SM Energy, brings experience in finance, executive compensation matters and corporate governance for public companies, as well as perspective on management and operational matters. | |
| PROPOSAL NO. 1 - ELECTION OF DIRECTORS | 2019 Proxy Statement | 53 | |
| G. Stephen Finley | |
 | EXPERIENCE |
Mr. Finley served as the Senior Vice President, Finance & Administration and Chief Financial Officer of Baker Hughes Incorporated from April 1999 until his retirement from the company in April 2006. Prior to that, from February 1982 to April 1999, Mr. Finley held various financial and administrative management positions with Baker Hughes. From 2006 until 2018, Mr. Finley served on the board of directors and as a member and Chairman of the Compensation Committee, the Audit Committee and Conflicts Committee for Archrock GP, LLC (formerly known as Exterran GP, LLC), which was the general partner of Archrock Partners L.P. (formerly known as Exterran Partners L.P.), a publicly traded master limited partnership, which provides natural gas compression products and services. From April 2012 to December 2014, Mr. Finley served on the board of Microseismic, Inc., a privately held oilfield services company that provides monitoring and mapping of hydraulic fracture operations in unconventional oil and gas plays. From March 2015 until February 2017, Mr. Finley was a member of the board of directors and a member of the audit committee of CPP GP LLC, the general partner of Columbia Pipeline Partners LP, a publicly traded natural gas transmission and storage company. | |
Age 68 Director Since: 2007 Committees: Audit (Chair), Compensation and Nominating and Corporate Governance | |
| QUALIFICATIONS | |
Mr. Finley brings a deep understanding of both the oil and gas industry and the energy services business. Through his senior executive positions at Baker Hughes and with a major public accounting firm, Mr. Finley has extensive knowledge in the areas of accounting, auditing, and compliance, including domestic and international businesses. Moreover, his knowledge of the energy services business provides our Board with a valuable resource in its assessment of our performance, opportunities, risks and strategy. | |
Paul L. Howes | |
 | EXPERIENCE |
| Mr. Howes joined our Board of Directors and was appointed as our Chief Executive Officer in March 2006. In June 2006, Mr. Howes was also appointed as our President. Mr. Howes’ career has included experience in the defense, chemicals and plastics manufacturing, and the packaging industries. Following the sale of his former company in October 2005 until he joined our Board of Directors in March 2006, Mr. Howes was working privately as an inventor and engaging in consulting and private investing activities. From December 2002 until October 2005, he served as President and Chief Executive Officer of Astaris LLC, a primary chemicals company headquartered in St. Louis, Missouri, with operations in North America, Europe and South America. Prior to this, from 1997 until 2002, he served as Vice President and General Manager, Packaging Division, for Flint Ink Corporation, a global ink company headquartered in Ann Arbor, Michigan with operations in North America, Europe, Asia Pacific and Latin America. | |
Age 63 Director Since: 2006 Committees: None | |
| QUALIFICATIONS | |
| Mr. Howes’ background includes a strong understanding of industrial and chemical manufacturing processes and practices, much of which is directly applicable to our products and services. Based on his experience in both larger and smaller companies, he offers leadership and insight into best management practices, employee development, compensation, marketing and operations. He also has previous experience with leading an executive team, in both domestic and international markets. Mr. Howes also serves in leadership positions with industry trade associations, serving on the boards of the American Petroleum Institute and the National Ocean Industries Association. | |
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| PROPOSAL NO. 1 - ELECTION OF DIRECTORS | 2019 Proxy Statement | 54 | |
EQUITYCOMPENSATION PLAN INFORMATION
The following table sets forth certain information with respect to the equity compensation plans maintained by us as of December 31, 2015, under which our equity securities may be issued in the future, and with respect to individual compensation arrangements as of December 31, 2015.
Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) Equity compensation plans approved by stockholders Equity compensation plans not approved by stockholders Total 4,012,265 (1) $ 7.61 4,334,238 (2) — $ — — 4,012,265 $ 7.61 4,334,238
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| Roderick A. Larson | ||
 | EXPERIENCE | |
| Beginning in May 2012, Mr. Larson served as Chief Operating Officer of Oceaneering International, Inc. and effective February 2015, was named President of the company. In May 2017, Mr. Larson was appointed to serve as a Director and President and Chief Executive Officer of Oceaneering International, Inc. From August 1998 until May 2012, Mr. Larson held varying positions of increasing responsibility at Baker Hughes, Inc., most recently as President, Latin America. While at Baker Hughes, Inc., Mr. Larson served as Vice President, Operations for the Gulf of Mexico and Deepwater Business Development Manager. From 1990 until 1998, he served as operations manager and field engineer for Western Atlas, Inc. (which was acquired by Baker Hughes) in the United States and Venezuela. | ||
Age 51 Director Since: 2014 Committees: Nominating and Corporate Governance (Chair), Audit and Compensation | ||
| QUALIFICATIONS | ||
| Mr. Larson brings over 25 years of experience in global oilfield services which, in the past, included management responsibility for a drilling fluids business. Based upon his more recent experience and in his current position as President and Chief Executive Officer of Oceaneering International, he provides valuable insight into our efforts to further penetrate the deepwater market, which is an important element of our global strategy. In addition, based on his experience at all levels of various organizations, Mr. Larson offers leadership and understanding of the operations and management of a large, global business. | ||
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| John C. Mingé | ||
 | EXPERIENCE | |
| Mr. Mingé currently is an employee of BP America, Inc. and serves as chairman of a study by the | ||
Age 57 Director Since: 2017 Committees: Compensation (Chair), Audit and Nominating and Corporate Governance | ||
| QUALIFICATIONS | ||
| Mr. Mingé brings over 34 years of experience in the | ||
| PROPOSAL NO. 1 - ELECTION OF DIRECTORS | 2019 Proxy Statement | 55 | |
| Rose M. Robeson | |
 | EXPERIENCE |
| Ms. Robeson served as Senior Vice President and Chief Financial Officer of DCP Midstream GP, LLC, the general partner of DCP Midstream GP LP, which is the general partner of DCP Midstream Partners, LP, a publicly-traded limited partnership, from May 2012 until her retirement in March 2014. Ms. Robeson also served as Group Vice President and Chief Financial Officer of DCP Midstream, LLC from January 2002 to May 2012. Prior to her appointment as Chief Financial Officer of DCP Midstream, LLC, Ms. Robeson was the Vice President and Treasurer. Prior to joining DCP Midstream, LLC, Ms. Robeson held a variety of executive finance positions at Total Petroleum and Kinder Morgan. Since July 2014, Ms. Robeson has served as a member of the Board of Directors of SM Energy Company and is currently serving as Audit Committee Chair and as a member of the Nominating and Corporate Governance Committee. From May 2017 to March 2019, Ms. Robeson served as a member of the Board of Directors and Audit Committee Chair of AMGP GP LLC, the general partner of Antero Midstream GP LP, a publicly-traded limited partnership. In March 2019, AMGP completed a merger and as a result, Ms. Robeson now serves as a member of the Board of Directors of Antero Midstream Corporation and is currently serving as Audit Committee Chair and as a member of the Nominating and Corporate Governance Committee and as a member of the Conflicts Committee. From June 2014 until June 2016, Ms. Robeson served as a director of American Midstream GP, LLC, the general partner of American Midstream Partners, LP, a publicly-traded limited partnership. From October 2015 until December 2017 (when Nabors Industries Ltd. completed its acquisition of Tesco Corporation), Ms. Robeson served as a director of Tesco Corporation, an upstream oilfield services company. | |
Age 58 Director Since: 2018 Committees: Audit, Compensation, and Nominating and Corporate Governance | |
| QUALIFICATIONS | |
| Ms. Robeson has over 32 years of experience in various aspects of the energy industry, including exploration and production, midstream and refining, and marketing. In addition to her role as a senior financial professional, with accounting oversight responsibilities, she also has experience as a senior executive, as well as an independent board member of several publicly-traded companies. In addition to her background providing a well-rounded leadership experience, she is particularly knowledgeable in the areas of corporate finance, financial reporting, accounting, corporate governance, risk management and strategic planning. | |
| PROPOSAL NO. 1 - ELECTION OF DIRECTORS | 2019 Proxy Statement | 56 | |
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| PROPOSAL NO. 2 - EXECUTIVE COMPENSATION VOTE | 2019 Proxy Statement | 57 | |
For purposes of the upcoming annual awards to be granted in May 2019, the Compensation Committee intends to grant to our senior management a mix of restricted stock units and performance-based cash awards tied to relative TSR and grant restricted stock units to all other participants. Approval of the proposed amendment and restatement of the 2015 Plan is needed to replenish the pool of shares available for the grant of stock-based compensation. As of December 31, peer group. 2,500,000 shares. If approved by the stockholders, the request to increase the number of shares for future issuance under the 2015 Plan will contribute to an additional potential dilution of approximately 28, 2019.PROPOSALNO. 3APPROVALAMENDMENT AND RESTATEMENT OF AN AMENDMENT TO THE2015 EMPLOYEE EQUITY INCENTIVE PLANIntroductionTheWe are asking our stockholders to approve the amendment and restatement of the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan, (theas previously amended (as amended, the “2015 Plan”) was initially adopted by, which will, among other things, increase the number of shares that may be issued thereunder from 9,800,000 shares to 12,300,000 shares and remove the fungible ratio.Long-term incentives have been critical to our compensation philosophy. The Board of Directors on April 6,believes that the equity awards available under the 2015 Plan support our compensation philosophy, which includes (i) tying our executives' and approvedemployees' pay opportunities to variable compensation in that long-term value depends upon our stock price performance and (ii) stockholder alignment by closely aligning our executives’ and employees’ compensation opportunities with the interests of our stockholders.During our stockholder engagement efforts over the past six months, our senior management and the Chairman of the Compensation Committee, when requested, discussed with our stockholders long-term incentives generally and share dilution specifically. Each of the stockholders with whom we spoke fully supported the issuance of restricted stock units to management as the best method of aligning management incentives with those of our stockholders. These same stockholders appreciated the dilutive effect that such issuances could have on their holdings, but advised us that they were willing to incur such dilution provided that the amount of restricted stock units being issued were reasonable in amount and being issued at fair market value. The number of restricted stock units granted at any time depends on the 2015 Annual Meeting. stock price on the date of grant with the total value of any grant targeted at median for executives with similar responsibilities within our peer group. Our restricted stock units are issued at fair market value on the date of grant and vest over three years.The 2015 Plan enables the Compensation Committee to grant to key employees of the Company, including executive officers and other corporate and divisional executives, of the Company and its subsidiaries a variety of forms of equity-based compensation, including grants of options to purchase shares of common stock, shares of restricted common stock, restricted stock units, stock appreciation rights, other stock-based awards, and performance-based awards.The 2015 Plan was initially adopted by the Board of Directors on April 6, 2015, approved by our stockholders at the 2015 Annual Meeting, and subsequently amended in 2016 and 2017. The maximum number of shares of common stock currently authorized for issuance under the 2015 Plan is set at 6,000,0009,800,000 shares.2015,2018, approximately 2,975,5251,313,255 shares of our common stock remained available for grants under the 2015 Plan. The BoardPlan, which (assuming a stock price of Directors believes that the 2015 Planapproximately $8.50 per share and the equity awards available undercurrent fungible ratio of 1.78:1) is approximately 500,000 shares of common stock fewer than our Compensation Committee believes will be needed to make the plan are importantplanned long-term incentive grants in May 2019 in order to key elementsmaintain target level executive compensation at the median of our compensation philosophy: pay-for-performance including tying our executive’s and employee’s pay opportunities to variable compensation whose long-term value depends upon our stock price; and, stockholder alignment by closely aligning our executives’ and employees’ compensation opportunities with the interests of our stockholders. The recent decline in our industry has provided significant challenges with employee retention. As we implement cost reduction measures, equity compensation becomes an even more important component of employee compensation.On March 22, 2016April 1, 2019, our Board of Directors authorized, subject to stockholder approval, an amendment toand restatement of the 2015 Plan to (i) increase the number of shares available for issuance under the 2015 Plan by 1,800,000 shares, (ii) to decrease the fungible share counting ratio for awards to be granted in stock (other than an award that is a stock option or similar award) from 1.85 to 1.78, and (iii) add a “double trigger” vesting provision to apply if outstanding awards under the 2015 Plan are assumed or replaced in connection with a change in control of the Company. The change to the fungible share counting ratio means that, for each share of stock that is granted pursuant to a full value award, such as restricted stock awards, restricted stock units and performance shares settled in stock, it will generally be counted against the aggregate share limit as 1.78 shares, instead of 1.85 shares as currently provided under the 2015 Plan.1.9%2.6%. This additional potential dilution was calculated by dividing the requested increase of 2,500,000 shares to the share reserve by the sum of 1,800,000 by: (i) the total number of shares available for issuance under the 2015 Plan prior to its amendment and restatement, (ii) all unvested shares and unexercised stock options previously awarded and outstanding under the 2015 Plan and any prior plan, and (iii) the total number of shares of outstanding common stock of the Company as of March 18, 2016.1In considering this proposal, the stockholders should also be aware that the average number of shares granted under all long-term incentive plans over the last 3three fiscal years, divided by the number of shares outstanding as of March 28, 2019, is approximately 2.1%1.9% (unadjusted and excluding forfeitures). Given market volatility and challenging industry conditions, it is difficult to estimate how many years of grants will be provided by the shares remaining after plan approval.in the event of approval of the amendment and restatement of the 2015 Plan. We believe that the requested allocation is critical over the next twelve24 months to ensuring our ability to attract and retain key talent and to provide competitive reward opportunities that are aligned with our shareholders’stockholders’ interests.1 The stockholders should also be aware that in 2019 we repurchased 655,666 shares of our common stock through March 28, 2019 as part of our $100 million share amounts set forth above representsrepurchase program that was approved by our Board of Directors in November 2018.Finally, in considering this proposal, the actualstockholders should also be aware that one of the proposed changes to the 2015 Plan is the removal of the fungible ratio. The Compensation Committee does not intend to issue options under the 2015 Plan inPROPOSAL NO. 3 - 2015 PLAN PROPOSAL 2019 Proxy Statement | 58 the coming years and therefore does not believe that the fungible ratio provides any flexibility going forward, but instead potentially overstates the number of shares that need to be reserved under the 2015 Plan. As such, the Board is requesting as part of the proposed amendment and do not reflectrestatement of the 2015 Plan to remove the fungible ratio such that the issuance of any option or restricted stock unit going forward will count equally as 1.0 share counting methodology referenced abovefor purposes of the 2015 Plan reserve.The Board of Directors and Summary of Sound Governance Features of the 2015 Plan inCompensation Committee believe the “Shares Available2015 Plan contains several features that are consistent with the interests of our stockholders and sound corporate governance practices, including the following:No "evergreen" provision. The number of shares of our common stock available for Awards” section. Additionally, unvestedissuance under the 2015 Plan is fixed and will not adjust based upon the number of shares and unexercisedoutstanding.Discounted stock options were counted assuming such shares will become vested and suchstock appreciation rights are prohibited. The 2015 Plan prohibits granting stock options will become exercised.with exercise prices and stock appreciation rights with grant prices lower than the fair market value of a share of our common stock on the grant date, except in connection with the issuance or assumption of awards in connection with certain mergers, consolidations, acquisitions of property or stock or reorganizations.No repricing or exchange of stock options or stock appreciation rights without stockholder approval. The 2015 Plan prohibits the repricing of outstanding stock options or stock appreciation rights, or the cancellation of outstanding stock options or stock appreciation rights for cash or awards with an exercise price less than the canceled award.58Table Of ContentsSummaryof the Proposed Amendments to the 2015 Plan
| Summary of Proposed Changes |
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| PROPOSAL NO. 3 - 2015 | 2019 Proxy Statement | 59 | |
Purpose.
| Purpose |
Administration.
| Administration |
Eligibility.
| Eligibility |
| Shares Available for Awards |
Shares Available for Awards. Subject to certain adjustments set forth in the Amended 2015 Plan, the maximum number of shares of common stock that may be issued or awarded under the Amended 2015 Plan will be 7,800,000increased by 2,500,000 shares for a total of 12,300,000, if the Amendment proposed herein is approved by the stockholders. As of March 18, 2016,28, 2019, grants totaling 1,933,7843,608,625 shares were outstanding under the 2015 Plan.
| PROPOSAL NO. 3 - 2015 PLAN PROPOSAL | 2019 Proxy Statement | 60 | |
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To the extent shares cease to be issuable under an award made under the Amended 2015 Plan other than because of the exercise of the award or the vesting of a restricted stock award or similar award, such shares become available under the Amended 2015 Plan for the grant of additional awards in the same amount as they were counted against the limit on the date of grant. Shares that are issued or delivered upon the exercise or settlement of an award or that cease to be restricted stock upon the vesting of an award of restricted stock, shall no longer be subject to any further grant under the Amended 2015 Plan. As provided in the Amended 2015 Plan, the following shares shallwould be considered to have been issued under the Amended 2015 Plan, and maywould not again be made available for issuance as awards undergrant of an award pursuant to the Amended 2015 Plan: (a)(i) shares not issued or delivered as a result of the net settlement of an outstanding stock option or stock appreciation right; (b)(ii) shares withheld or tendered to the Company in satisfaction of the grant or exercise price or tax withholding requirements from shares that would otherwise have been delivered pursuant to a stock option or stock appreciation right; or (c)(iii) shares repurchased on the open market with the proceeds of the stock option exercise price. All shares subject to a stock appreciation right, to the extent exercised, are considered issued regardless of the actual number of shares issued to the participant. In addition, shares subject to awards issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of business combination of the companyCompany or any of our subsidiaries do not reduce the number of shares available for issuance under the Amended 2015 Plan. Shares issued under the Amended 2015 Plan may be either authorized and unissued shares or treasury shares.
Amendment and Termination.
| Amendment and Termination |
Repricing.
| Repricing |
| Delivery and Execution of Electronic Documents |
Delivery and Execution of Electronic Documents. To the extent permitted by applicable law, the Company may: (a) deliver by email or other electronic means (including posting on a Web site maintained by the Company or by a third party under contract with the Company) all documents relating to the Amended 2015 Plan or any award thereunder (including prospectuses required by the Securities and Exchange Commission)SEC) and all other documents that the Company is required to deliver to its security holders (including annual reports and proxy statements), and (b) permit participants to electronically execute applicable plan documents (including award agreements and any required notices under the Amended 2015 Plan) in a manner prescribed by theour Compensation Committee.
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| PROPOSAL NO. 3 - 2015 PLAN PROPOSAL | 2019 Proxy Statement | 61 | |
Stock Options.
| Stock Options |
| Restricted Stock |
Restricted Stock. The Compensation Committee may grant to any participant common stock, which we refer to as restricted stock, subject to forfeiture and vesting restrictions, restrictions on transferability and other restrictions that will apply to the award of restricted stock. Each participant who is awarded restricted stock will be required to enter into an agreement with us, in a form specified by the Compensation Committee, agreeing to the terms, conditions and restrictions of the grant and other matters consistent with the Amended 2015 Plan as the Compensation Committee determines appropriate. Generally, the restrictions on restricted stock will lapse over a period of time, which we refer to as the restriction period, as specified by the Compensation Committee and set forth in the award agreement. The Compensation Committee’s authority to take certain actions under the Amended 2015 Plan includes authority to accelerate vesting and to otherwise
| PROPOSAL NO. 3 - 2015 PLAN PROPOSAL | 2019 Proxy Statement | 62 | |
Restricted Stock Units.
| Restricted Stock Units |
Subject to the terms of the Amended 2015 Plan and award agreement, on the maturity date, we will deliver to the participant one share of common stock for each restricted stock unit scheduled to be issued on that date and not previously forfeited.
Stock Appreciation Rights.
| PROPOSAL NO. 3 - 2015 PLAN PROPOSAL | 2019 Proxy Statement | 63 | |
| Stock Appreciation Rights |
| Other Stock-Based Awards |
Other Stock-Based Awards. The Compensation Committee may grant to eligible employees equity-based or equity-related awards not otherwise described in the Amended 2015 Plan, alone or in tandem with other awards, in such amounts and subject to such terms and conditions as the Compensation Committee shall determine. These other stock-based awards may (i) involve the transfer of restricted or unrestricted shares of common stock to participants, either at the time of grant or thereafter, or payment in cash or otherwise of amounts based on the value of shares of common stock, (ii) be subject to performance-based or service-based vesting requirements, (iii) be granted as, or in payment of, a bonus, or to provide incentives or recognize special achievements or contributions, and (iv) be designed to comply with applicable laws of jurisdictions other than the United States, and (v) be designed to qualify for the performance-based compensation exception under Section 162(m) of the Internal Revenue Code;States; provided, that each such stock-based award must be denominated in, or have a value determined by reference to, a number of shares of common stock that is specified in the award agreement. In the case of other stock-based awards, the vesting of which is conditioned on the achievement of performance criteria, if the award agreement provides participants with dividend rights, any dividends or distributions shall be withheld and shall vest and be paid, without interest, only if and to the extent, and at the time, the other stock-based awards shall vest. Dividends or distributions relating to any forfeited other stock-based awards shall also be forfeited.
Performance-Based Awards.
| Performance-Based Awards |
For purposes of awards that are intended to qualify for the performance-based compensation exception under Section 162(m) of the Internal Revenue Code, the
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Adjustments Upon Certain Events.
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employee to the Company; (iii) the diminution of the employee’s base salary; and (iv) requiring the employee to relocate more than 50 miles from his or her location of employment immediately prior to the change in control. However, “good reason” shall only exist in the prior (i) through (iv) if the employee has given reasonable and specific written notice to the Chief Executive Officer of such failure, the Company has been given a reasonable opportunity to cure, and no cure has been effected or initiated within a reasonable time after such notice.
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Transferability.
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Shares of common stock acquired upon the exercise of a non-qualified stock option by the payment of cash will have a basis equal to the exercise price of the stock option.option plus the amount of ordinary income recognized by the optionee upon exercise. Different rules apply if an optionee exercises a non-qualified stock option by surrendering previously owned shares of common stock.
| PROPOSAL NO. 3 - 2015 PLAN PROPOSAL | 2019 Proxy Statement | 67 | |
date.
The participant will be subject to income tax withholding at the time when ordinary income is recognized. Generally, we will be entitled to a tax deduction at the same time the participant recognizes ordinary income and in the same amount.
Performance Based
| PROPOSAL NO. 3 - 2015 PLAN PROPOSAL | 2019 Proxy Statement | 68 | |
award.
In addition, generally, if any award is granted under the Amended 2015 Plan or modified in connection with a change in control, or if the vesting or payment of an award under the Amended 2015 Plan is accelerated, directly or indirectly, by a change in control, all or a portion of the compensation from that award may be treated as an “excess parachute payment” under Section 280G of the Internal Revenue Code, which would cause that compensation to be non-deductible by us.
| PROPOSAL NO. 3 - 2015 PLAN PROPOSAL | 2019 Proxy Statement | 69 | |
Introduction
On March 22, 2016, our Board of Directors adopted resolutions (i) approving an amendment to our Restated Certificate of Incorporation, as amended, to allow for the removal of any director, with or without cause, by the stockholders, and (ii) directing that a proposal to approve the amendment be submitted to our stockholders. Assuming the resolution is approved by our stockholders, the change to Article SEVENTH will become effective upon the filing of an amendment to our Restated Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware.
The form of the proposed amendment to our Restated Certificate of Incorporation, as amended, is attached to this proxy statement asAppendix C. Addition of new text is indicated by underlining and deletion of existing text is indicated by a strikethrough. We currently plan to file the amendment as soon as reasonably practicable after receiving approval from our stockholders at the 2016 Annual Meeting.
Reasons for the Amendment
Article SEVENTH of our Restated Certificate of Incorporation, as amended, provides that the Company’s stockholders may remove directors from office only for cause. Section 141(k) of the Delaware General Corporation Law, as applicable to corporations without a classified board of directors (such as the Company at this time), requires that stockholders be afforded the right to remove directors from office with or without cause. The Delaware Chancery Court recently ruled (in a case not involving the Company) that a provision similar to Article SEVENTH of our Restated Certificate of Incorporation was invalid because it was not consistent with Section 141(k) of the Delaware General Code. The proposed amendment to the Restated Certificate of Incorporation, as amended, is intended to conform the Restated Certificate of Incorporation, as amended, to the applicable requirements under Delaware law.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL TO AMEND OUR RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED, TOALLOW FOR REMOVAL OF A DIRECTOR FROM OFFICE, WITH OR WITHOUT CAUSE.
PROPOSALNO. 5
RATIFICATION OF APPOINTMENT OF
2019.
Independent Registered Public Accounting Firm Fees |
2014 2015 Audit Fees(1) Audit-Related Fees(2) Tax Fees(3) All Other Fees(4) Total $ 1,591,000 $ 1,474,000 $ 94,000 $ 21,000 $ 50,000 $ 3,000 $ − $ − $ 1,735,000 $ 1,498,000
2018.
| 2017 | 2018 | |||||
| Audit Fees(1) | $ | 1,618,000 | $ | 1,521,000 | ||
| Audit-Related Fees(2) | $ | 32,000 | $ | 2,000 | ||
| Tax Fees(3) | $ | 8,000 | $ | 10,000 | ||
| All Other Fees(4) | — | — | ||||
| Total | $ | 1,658,000 | $ | 1,533,000 | ||
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| All Other Fees |
| Pre-Approval Policies Regarding Audit and Non-Audit Fees |
For non-audit services, our management will submit to the Audit Committee for approval the list of non-audit services recommended by management which the Audit Committee should engage the independent registered public accounting firm to provide for the fiscal year. Prior to the performance of any of these services, our management and the independent registered public accounting firm each will confirm to the Audit Committee that each non-audit service on the list is permissible under all applicable legal requirements. Pre-approval generally is provided for up to one year and any pre-approval is detailed as to the particular service or category of service and generally is subject to a specific budget. The Audit Committee also may pre-approve particular services on a case-by-case basis. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the
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2018.
We filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2015,2018, which we refer to as the 20152018 Annual Report, in a timely fashion with the SEC in 2016.2019. Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the 20152018 Annual Report. The Audit Committee also engaged the Deloitte Entities as our independent registered public accounting firm for the 20162019 fiscal year. See above under the heading “Ratification“Ratification of Appointment of Registered Public Accounting Firm”Firm” for additional information on the decision to again appoint the Deloitte Entities as our independent registered public accounting firm.
Audit Committee:
G. Stephen Finley, Chairman
Anthony J. Best
Roderick A. Larson
James W. McFarland, Ph.D.
Gary L. Warren
| Audit Committee: | John C. Mingé |
| G. Stephen Finley, Chairman | Rose M. Robeson |
| Roderick A. Larson | Gary L. Warren |
| PROPOSAL NO. 4 - RATIFICATION OF AUDITOR | 2019 Proxy Statement | 71 | |
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
DELIVERY OF DOCUMENTS TO STOCKHOLDERS SHARING AN ADDRESS
All stockholders of record as of the record date will receive a copy of our Notice of Internet Availability of Proxy Materials. Stockholders residing in the same household who hold their shares in the name of a bank, broker or other holder of record may receive only one Notice of Internet Availability of Proxy Materials. This process, by which only one Notice of Internet Availability of Proxy Materials is delivered to multiple security holders sharing an address, unless contrary instructions are received from one or more of the security holders, is called “householding.” Householding may provide convenience for stockholders and cost savings for companies. Once begun, householding may continue unless instructions to the contrary are received from one or more of the stockholders within the household.
Street name stockholders in a single household who received only one copy of the Notice of Internet Availability of Proxy Materials may request to receive separate copies in the future by following the instructions provided on the voting instruction form sent to them by their bank, broker or other holder of record. Similarly, street name stockholders who are receiving multiple copies may request that only a single set of materials be sent to them in the future by checking the appropriate box on the voting instruction form. Otherwise, street name stockholders should contact their bank, broker, or other holder.
COPIES OF THIS PROXY STATEMENT AND THE 2015 ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND EXHIBITS, ARE AVAILABLE PROMPTLY WITHOUT CHARGE BY CALLING (281) 362-6800, OR BY WRITING TO CORPORATE SECRETARY, NEWPARK RESOURCES, INC., 9320 LAKESIDE BOULEVARD, SUITE 100, THE WOODLANDS, TEXAS 77381. If you are receiving multiple copies of the Notice of Internet Availability of Proxy Materials, you also may request orally or in writing to receive a single copy by calling (281) 362-6800, or writing to Corporate Secretary, Newpark Resources, Inc., 9320 Lakeside Boulevard, Suite 100, The Woodlands, Texas 77381. However, if you wish to receive a paper proxy and voting instruction form or other proxy materials for participation and voting in this year’s annual meeting, follow the instructions included in the Notice of Internet Availability of Proxy Materials sent to you.
2018.
| OTHER MATTERS | 2019 Proxy Statement | 72 | |
AMENDED AND RESTATEDNEWPARK RESOURCES, INC.2015 EMPLOYEE EQUITY INCENTIVE PLANAmendment No. 1THIS AMENDMENT NO. 1 (this "Amendment") to the 2015 Employee Equity Incentive Plan (the "Plan") is made by Newpark Resources, Inc. (the "Company") pursuant to the Plan, as follows:WHEREAS, the Company previously adopted the Plan for the benefit of its eligible participants;WHEREAS, pursuant to Section 17 of the Plan, the Board of Directors (the "Board") has the power and authority to amend the terms of the Plan; andWHEREAS, the Board desires to increase the maximum number of shares of common stock that may be issued in connection with awards granted under the Plan, and to effectuate such other amendments the Board deems to be in the best interests of the Company’s stockholders.NOW, THEREFORE,pursuant to the Plan, the Board hereby amends the Plan in the following respects:(Effective May 23, 2019)1.Shares Subject to the Plan. Section 4.1 of the Plan is hereby amended to increase the number of Shares that may be issued in connection with awards under the Plan from 6,000,000 to 7,800,000.APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-i 2.Fungible ShareCountingRatio. Applicable for grants of equity made on or after May 19, 2016, the fungible share counting ratio (i.e., the ratio that limits the amount of full-value equity awards that may be granted from the share reserve) shall be downward adjusted to 1.78. To that end, Sections 4.1(b) and (c) of the Plan are hereby amended by deleting "1.85" each place it appears and replacing it with "1.78".3.Change in Control. Section 15.2 of the Plan is hereby deleted in its entirety and shall be replaced with the following:15.2 Change in Control. Effective upon the consummation of a Change in Control of the Company, and except as otherwise provided in an individual Award Agreement, all outstanding Awards under the Plan shall terminate to the extent they are not assumed or replaced in connection with the Change in Control.(a) For each portion of an Award that is assumed or replaced, then such portion shall become fully vested, exercisable and payable, and be released from any forfeiture rights, immediately upon termination of the Participant’s employment with the Company (or its successor) within 24 months after the Change in Control, but only if such termination of employment is triggered by the Company (or its successor) without Cause or by the Participant for Good Reason.TABLE OF CONTENTS Table Of Contents(b) For each portion of an Award that is neither assumed nor replaced, the Compensation Committee has the discretion to effectuate either of the following immediately prior to consummation of the Change in Control, provided that the Participant’s employment has not terminated prior to such date: (x) such outstanding Awards (or portion thereof) shall become partially or fully vested and exercisable (and partially or fully released from any forfeiture rights), with performance-based Awards under Section 12 of the Plan vesting based upon actual performance or, if the Compensation Committee determines that actual performance is not determinable, then at target; or (y) such outstanding Awards (or portion thereof) shall be cancelled and terminated for an amount of cash, securities or other property equal to the excess, if any, of the Fair Market Value of the vested and/or unvested (as determined by the Committee in its sole discretion) shares of Common Stock subject to any such Award immediately prior to the occurrence of the Change in Control over the aggregate exercise or other purchase price (if any) of such shares. For performance-based Awards under Section 12 of the Plan, the number of shares of Common Stock subject to subsection 15.2(b)(y) shall be calculated based upon actual performance or, if the Compensation Committee determines that actual performance is not determinable, then at target. For avoidance of doubt, if an Award is an Option or Stock Appreciation Right and no positive spread exists pursuant to the foregoing, then (y) may be unilaterally effectuated by the Company with no cash payment to the Participant holding such an Award.Notwithstanding anything herein to the contrary, an Award that vests, is earned, or is paid-out upon the satisfaction of one or more performance goals shall not be considered "assumed" or "replaced" if the Company (or its successor) modifies any of the performance goals without the Participant’s consent; provided, however, that a modification to the performance goals only to reflect the successor corporation’s post-Change in Control corporate structure shall not be deemed to invalidate an otherwise valid assumption or replacement of an Award.This Section 15.2 of the Plan was amended effective May 19, 2016. As a result, the terms of Award Agreements that were in effect prior to such date shall prevail to the extent such terms are more favorable to a Participant. Page 1. Purpose. 1 2. Definitions. 1 3. Administration of the Plan. 1 4. Number of Shares Issuable in Connection with Awards. 4 5. Eligibility and Participation. 5 6. Award Agreements. 657. Options. 6 8. Restricted Stock. 9 9. Restricted Stock Units. 11 10. Stock Appreciation Rights. 12 11. Other Stock‑Based Awards. 141312. Performance Based Awards. 14 13. Restrictions on Transfer. 161514. Withholding and Other Tax Provisions. 171615. Effect of Certain Corporate Changes and Changes in Control. 181716. Regulatory Compliance. 201917. Amendment or Termination of the Plan. 222118. Term of the Plan. 222119. No Right to Awards or Continued Employment. 222120. Effect of Plan Upon Other Awards and Compensation Plans. 222121. General Provisions. 23222 Table Of Contents4.Defining the Term Cause. The definition of Cause in Exhibit A to the Plan shall be deleted in its entirety and replaced with the following:
"Cause" means, with respect to any Participant, any of the following: (i) the Participant’s conviction by a court of competent jurisdiction of, or entry of a plea of guilty or nolo contendere for, an act on the Participant’s part constituting a felony, dishonesty, willful misconduct or material neglect by the Participant of his or her employment obligations to the Company that results in material injury to the Company; (ii) appropriation (or an overt act attempting to appropriate) of a material business opportunity of the Company by the Participant; (iii) theft, embezzlement or other similar misappropriation of funds or property of the Company by the Participant; or (iv) the failure of the Participant to follow the reasonable and lawful written instructions or policy of the Company with respect to the services to be rendered and the manner of rendering such services by the Participant, provided the Participant has been given reasonable and specific written notice of such failure and opportunity to cure and no cure has been effected or initiated within a reasonable period of time, but not less than 90 days, after such notice.
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"Good Reason" means any of the following: (i) the Company (or its successor) adversely changes the Participant’s title or changes in any material respect the responsibilities, authority or status of the Participant without prior notice and acceptance; (ii) the substantial or material failure of the Company (or its successor) to comply with its obligations under the Plan or any other agreement that may be in effect that is not remedied within a reasonable time after specific written notice thereof by the Participant to the Company; (iii) the diminution of the Participant’s base salary; and (iv) requiring the Participant to relocate more than 50 miles from his or her location of employment immediately prior to the Change in Control. However, Good Reason shall only exist in the prior (i) through (iv) if the Participant has given reasonable and specific written notice to the Chief Executive Officer of such failure, the Company has been given a reasonable opportunity to cure, and no cure has been effected or initiated within a reasonable time after such notice.
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[SIGNATURE ON NEXT PAGE]
IN WITNESS WHEREOF, the Company, by its duly authorized officer, has executed this Amendment on this __ day of __ 2016.
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| APPENDIX A - AMENDED AND RESTATED PLAN | |||
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| 2019 Proxy Statement | A-ii | ||
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1. Purpose. 1 2. Definitions. 1 3. Administration of the Plan. 1 4. Number of Shares Issuable in Connection with Awards. 4 5. Eligibility and Participation. 5 6. Award Agreements. 6 7. Options. 6 8. Restricted Stock. 9 9. Restricted Stock Units. 11 10. Stock Appreciation Rights. 12 11. Other Stock-Based Awards. 14 12. Performance Based Awards. 14 13. Restrictions on Transfer. 16 14. Withholding and Other Tax Provisions. 17 15. Effect of Certain Corporate Changes and Changes in Control. 18 16. Regulatory Compliance. 20 17. Amendment or Termination of the Plan. 21 18. Term of the Plan. 22 19. No Right to Awards or Continued Employment. 22 20. Effect of Plan Upon Other Awards and Compensation Plans. 22 21. General Provisions. 22 (b)adopt, amend, modify or rescind rules, procedures and forms relating to the Plan; All decisions, determinations and other actions of the Compensation Committee made or taken in accordance with the terms of the Plan shall be final and conclusive and binding upon all parties having an interest therein. advisable “Change in Control” shall mean the occurrence of any one of the following: (i) a “Takeover Transaction” (as defined below); or (ii) any election of directors of the Company takes place (whether by the directors then in office or by the stockholders at a meeting or by written consent) and a majority of the “Common Stock” means shares of Common Stock, par value $0.01 per share, of the Company and any other equity securities of the Company that may be substituted or resubstituted for such Common Stock pursuant to Section 15. has the meaning set forth in Section 21.17. “Restricted Stock” means Shares awarded to a Participant under Section 8, the rights of ownership of which are subject to restrictions prescribed by the Compensation Committee.NEWPARK RESOURCES, INC.2015 EMPLOYEE EQUITY INCENTIVE PLANTABLE OF CONTENTS NEWPARK RESOURCES, INC.2015 EMPLOYEE EQUITY INCENTIVE PLAN1.1. Purpose.Purpose.This Amended and RestatedNewpark Resources, Inc. 2015 Employee Equity Incentive Plan, effective May 23, 2019, is intended to assist Newpark Resources, Inc., a Delaware corporation (the “Company”), in attracting, retaining and motivating designated Employees of the Company and its Subsidiaries and to increase their interest in the success of the Company in order to promote the creation of long-termlong‑term value for the Company’s stockholders by closely aligning the interests of Employees with those of the Company’s stockholders. The Plan is designed to meet this intent by providing eligible Employees with a proprietary interest in pursuing the long-termlong‑term growth, profitability and financial success of the Company.2.2. Definitions.Definitions.In addition to the terms defined elsewhere in the Plan,Exhibit A, which is incorporated by reference, defined terms used in the Plan and sets forth certain operational rules related to those terms.3.3. Administration of the Plan.Plan.3.1 3.1.General. The Plan shall be administered by the Compensation Committee. Each member of the Compensation Committee shall be a “non-employee“non‑employee director” as that term is defined in Rule 16b-3,16b‑3, an “outside director” within the meaning of Section 162(m)3 and an “independent director” under the corporate governance rules of any stock exchange or similar regulatory authority on which the Common Stock is then listed, but no action of the Compensation Committee shall be invalid if this requirement is not met. The Compensation Committee shall select one of its members as chairman and shall act by vote of a majority of the members present at a meeting at which a quorum is present or by unanimous written consent. A majority of the members of the Compensation Committee shall constitute a quorum. The Compensation Committee shall be governed by the provisions of the Company’s bylaws and of Delaware law applicable to the Board of Directors, except as otherwise provided herein or determined by the Board of Directors. The Compensation Committee’s decisions and determinations under the Plan need not be uniform and may be made selectively among Participants, whether or not the Participants are similarly situated.3.2 3.2.Authority of the Compensation Committee. The Compensation Committee shall have full discretionary power and authority, subject to the general purposes, terms and conditions of the Plan, to implement, carry out and administer the Plan. Without limiting the generality of the foregoing, the Compensation Committee shall have the authority to:(a)interpret and administrator the Plan, any Award Agreement and any other agreement or document executed pursuant to the Plan;(c)select, subject to the limitations set forth in this Plan, persons to receive Awards;APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-1 (d)determine the number of Shares subject to Awards, the Fair Market Value of a Share of Common Stock and the other terms and conditions of each Award (which need not be uniform), including, without limitation, the type of Award to be granted, vesting requirements, forfeiture restrictions and other terms and conditions relating to the exercisability of Awards, and all other provisions of each Award Agreement;(e)determine whether Awards will be granted singly, in combination, or in tandem with, in replacement of, or as alternatives to, other Awards under the Plan or any other incentive or compensation plan of the Company or any Subsidiary;(f)grant waivers of Plan or Award conditions and remove or adjust any restrictions or conditions upon Awards, including accelerating or otherwise modifying the date or conditions upon which any Award becomes vested, exercisable or transferable and extending the term of any Award (subject to the maximum term limitations set forth in the Plan), including extending the period following the termination of a Participant’s employment during which any Award may continue to vest, remain outstanding or be exercised (but not beyond the original maximum term of such Award);(g)amend any outstanding Award Agreement, including for the purpose of modifying the time, manner or conditions of vesting, exercise or settlement; provided, however, that if any provision of any such amendment would materially and adversely affect the rights of the Participant under the affected Award, the amendment shall not be effective without the Participant'sParticipant’s consent to that provision; and provided further that no Option or Stock Appreciation Right may be amended or terminated to reduce the exercise price of such Option or Stock Appreciation Right except in accordance with Section 21.4;(h)interpret, administer, correct any defect, supply any omission and reconcile any inconsistency in the Plan, any Award, any Award Agreement or any related instrument or agreement;(i)determine whether an Award has been earned;(j)to authorize any person to execute, on behalf of the Company, any agreement or document required to carry out the purposes of the Plan; and(k)make any other determination and take any other action that the Compensation Committee deems necessary or desirable for administration of the Plan.3.3 3.3.Delegation of Authority. Any of the powers and responsibilities of the Compensation Committee may be delegated to any subcommittee, in which case the acts of the subcommittee shall be deemed to be acts of the Compensation Committee hereunder. In addition, the Compensation Committee may, subject to the following provisions and to the extent permitted by Applicable Law, delegate some or all of its authority and powers under the Plan, including the authority to grant Awards under the Plan, to a committee consisting of one or more members of the Board of Directors or one or more officers of the Company; provided, however, that (a) the Committee may not delegate its authority to (i) make awards to any Employee (A)who is, or is expected to become, a Section 16APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-2 Insider, or (B) whose compensation for such fiscal year may be subject to the limit on deductible compensation pursuant to Section 162(m),(ii) interpret the Plan or any Award, or (iii) amend any Award or accelerate the vesting or lapse of any restrictions on any Award, and (b) any delegation of authority to an officer of the Company shall be subject to the provisions of Section 157 of the Delaware General Corporation Law. Any action taken by any such subcommittee, committee of the Board of Directors or officer within the scope of the authority delegated by the Compensation Committee shall be deemed for all purposes to have been taken by the Compensation Committee, and, to the extent consistent with the terms and limitations of such delegation, references in the Plan to the Compensation Committee shall include any such officer or Employee. In addition, the Compensation Committee may delegate to one or more officers or Employees, subject to such terms as the Compensation Committee may determine, the authority to perform such administrative functions as determined necessary or appropriate by the Compensation Committee. Any delegation hereunder shall be subject to such other restrictions and limitations that the Compensation Committee specifies at the time of such delegation or thereafter. Nothing in the Plan shall be construed as obligating the Compensation Committee to delegate authority as herein provided and the Compensation Committee may at any time rescind the authority delegated hereunder.3.4 3.4.Monitoring Awards. Notwithstanding any delegation of authority by the Compensation Committee pursuant to Section 3.3, it shall maintain ultimate responsibility for, and control of, the operation of the Plan. At least annually, the Compensation Committee, in conjunction with the Audit Committee of the Board of Directors of the Company, shall conduct or cause the conduct of an audit of the operation of the Plan to verify that the Plan has been operated and Awards have been documented and maintained by the officers of the Company in accordance with the directions of the Compensation Committee. Without limiting the generality of the foregoing, one of the purposes of such an audit will be to determine that the final Award Agreements are consistent with the Awards made by the Compensation Committee and properly reflect the names of the Participants to whom such Awards were granted, the applicable Dates of Grant, vesting provisions and expiration dates, the type and quantity of Awards granted to each Participant and, if applicable, the applicable exercise prices.3.5 3.5.Limitation on Liability.3.5.1 3.5.1.The Compensation Committee may employ attorneys, consultants, accountants, agents and other persons, and the Compensation Committee shall be entitled, in good faith, to rely and act upon the advice, opinions and valuations of any such persons. In addition, the Compensation Committee shall be entitled, in good faith, to rely and act upon any report or other information furnished to it by any officer, director or Employee of the Company.3.5.2 3.5.2.No member of the Compensation Committee, nor any person acting pursuant to authority delegated by the Compensation Committee, nor any officer, director or Employee of the Company acting at the direction or on behalf of the Compensation Committee, shall be liable for any action, omission or determination relating to the Plan, and the Company shall, to the fullest extent permitted by law, indemnify and hold harmless each member of the Compensation Committee, each person acting pursuant to authority delegated by the Compensation Committee, and each other officer, director or Employee of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been delegated against any cost, expense (including counsel fees), liability or other pecuniary loss (including any sum paid in settlement of a claim with the approval of the Compensation Committee) arising out of any action, omission or determination relating to the Plan.4.APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-3 4. Number of Shares Issuable in Connection with Awards.Awards.4.1 4.1.Shares Subject to the Plan. The maximum number of Shares that may be issued in connection with Awards granted under the Plan is 6,000,000,9,800,000,12,300,000, and the number of Shares that are subject to Awards outstanding at any one time under the Plan may not exceed the number of Shares that then remain available for issuance under the Plan. The maximum number of Shares that may be issued in connection with Incentive Stock Options granted under the Plan is 6,000,000.9,800,000.12,300,000. The Company at all times shall reserve and keep available sufficient Shares to satisfy the requirements of the Plan. Shares issued under the Plan may be either authorized and unissued shares or treasury shares.Solely for the purposes of implementing the limitations on the number of Shares that may be issued under the Plan as set forth in this Section 4.1:4.1, effective on and after May 16, 2016: (a) an Award of an Option or a Stock Appreciation Right in respect of one Share shall be deemed to be an Award of, and shall count against the Share limit set forth in this Section 4.1 as, one Share on the Date of Grant; (b) an Award of a share of Restricted Stock or a Restricted Stock Unit or an Other Stock-BasedStock‑Based Award shall be deemed to be an Award of, and shall count against the share limit set forth in this Section 4.1 as, 1.851.78 Shares for every one Share granted on the Date of Grant; and (c) with respect to any performance-basedperformance‑based Award granted pursuant to Section 12 that is to be settled in Shares, the value of the maximum benefit that may be paid under such Award shall be divided by the Fair Market Value of one Share as of the Date of Grant of such Award and each Share resulting from such computation shall be deemed to be an Award of 1.851.78 Shares for purposes of implementing the limitations on the number of Shares that may be issued in this Section 4.1.4.2 4.2.Share Counting Rules. For purposes of Section 4.1, if any Shares subject to an Award granted under the Plan are forfeited or such Award is settled in cash or otherwise terminates without the delivery of such Shares, the Shares subject to such Award, to the extent of such forfeiture, settlement or termination, shall again be available for the grant of additional Awards under the Plan; provided, that, in the case of an Award granted prior to May 23, 2019, the forfeited, cash-settled or terminated Shares subject to such Award shall again be available in the same amount as suchthe Shares applicable to such Shares Awardwere counted against the limit set forth in Section 4.1.4.1 upon grant. Shares that are issued or delivered upon the settlement of an Award or that ceasedcease to be Restricted Stock upon the vesting of an Award of Restricted Stock, shall no longer be subject to any further grant under the Plan. Notwithstanding the immediately preceding sentence, the following Shares shall be considered to have been issued under the Plan and may not again be made available for issuance as Awards under the Plan: (a) Shares not issued or delivered as a result of the net settlement of an outstanding Option or Stock Appreciation Right; (b) Shares withheld by the Companyfrom Shares that would otherwise have been deliveredupon exercise of an Option or Stock Appreciation Right, or Shares tendered to the Company, in each case, in satisfaction of the grant or exercise price or tax withholding requirements, from Shares that would otherwise have been delivered pursuant toof an Option ora Stock Appreciation Right; or (c) Shares repurchased on the open market with the proceeds of the Option exercise price. With respect to Stock Appreciation Rights, when a Stock Appreciation Right is exercised, the full number ofShares subjectexercised pursuant to such Stock Appreciation Right shall be counted against the Shares available for issuance under the Plan as one Share for every Share subject to such Stock Appreciation Right, even ifnotwithstanding that the number of Shares usedissued to settle the Stock Appreciation Right upon exercise is less than the number of Shares subject to such Stock Appreciation Right upon its grant.grantexercised. To the extent permitted by Applicable Laws, Shares subject to Awards issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of business combination by the Company or any of its Subsidiaries shall not be counted against the Shares available for issuance pursuant to the Plan.APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-4 4.3 4.3.Individual Award Limits. The maximum number of Shares that may be covered by Options and Stock Appreciation Rights (in the aggregate) granted under the Plan to any single Participant in any calendar year shall not exceed 1,000,000, and the maximum number of Shares that may be covered by all other Awards (in the aggregate) granted under the Plan to any single Participant in any calendar year shall not exceed 1,000,000.These limitations shall be applied and construed consistently with Section 162(m).4.4 4.4.Adjustments. The limits provided for in this Section 4 shall be subject to adjustment as provided in Section 15.5.5. Eligibility and Participation.Participation.The Compensation Committee will select Participants from among those Employees who, in the opinion of the Compensation Committee, are in a position to make significant contributions to the long-termlong‑term performance and growth of the Company and its Subsidiaries. In addition, the Compensation Committee may grant Awards in connection with the engagement of an Employee who is expected to make significant contributions to the long-termlong‑term performance and growth of the Company, provided that a prospective Employee may not receive any payment or exercise any right relating to an Award until such person’s employment with the Company has commenced. An Employee on leave of absence may be considered as still in the employ of the Company for purposes of eligibility for participation in the Plan, if so determined by the Compensation Committee. Directors of the Company and its Subsidiaries who are not also Employees of the Company or a Subsidiary shall not be eligible to receive Awards under the Plan.6.6. Award Agreements.Agreements.Each Award granted under the Plan shall be evidenced by an Award Agreement in a form approved by the Compensation Committee. Each Award Agreement shall be subject to all applicable terms and conditions of the Plan, shall include such terms and conditions as the Compensation Committee deems appropriate, consistent with the provisions of the Plan, and shall be executed or approved by the Participant and an officer of the Company or other person designated by the Compensation Committee. An Award Agreement and any required signatures thereon or authorization or acceptance thereof may be in electronic format.7.7. Options.Options.7.1 7.1.Grant of Options. The Compensation Committee may grant Options in such amounts, at such times and to such Employees as the Compensation Committee, in its discretion, may determine in accordance with the eligibility criteria set forth in Section 5. The Compensation Committee shall designate at the time of grant whether the Option is intended to constitute an Incentive Stock Option or a Non-Qualified Non‑Qualified StockOption.7.2 7.2.Option Price. The Option Price of the Shares subject to each Option shall be determined by the Compensation Committee, but shall not be less than the Fair Market Value of the Common Stock on the Date of Grant, except in the case of replacement or substitute Options issued by the Company in connection with an acquisition or other corporate transaction.7.3 7.3.Option Period. The Award Agreement shall specify the term of each Option. The term shall commence on the Date of Grant and shall be ten (10) years or such shorter period as is determined by the Compensation Committee. Each Option shall provide that it is exercisable over its term from the Date of Grant or over time in such periodic installments, or based on the satisfactionAPPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-5 of such criteria (including, without limitation, upon the satisfaction of Performance Criteria), as the Compensation Committee in its discretion may determine. The vesting provisions for Options granted under the Plan need not be uniform. Unless the Compensation Committee specifies otherwise in the applicable Award Agreement, if an Option is subject to vesting and becomes exercisable in periodic installments and a Participant shall not in any period purchase all of the Shares that the Participant is entitled to purchase in such period, the Participant may purchase all or any part of such Shares as to which the Option has become exercisable at any time prior to the expiration or other termination of the Option.7.4.7.4 Exercise of Options. Each Option may be exercised in whole or in part (but not as to fractional shares) by the delivery of an executed notice (“Notice of Exercise”) in the form prescribed from time to time by the Compensation Committee, which may be in written or electronic form, accompanied by payment of the Option Price and any amounts required to be withheld for tax purposes under Section 14. If an Option is exercised by any person other than the Participant, the Compensation Committee may require satisfactory evidence that the person exercising the Option has the right to do so. The Compensation Committee may require any partial exercise of an Option to equal or exceed a specified minimum number of Shares.7.5 7.5.Payment of Exercise Price. The Option Price shall be paid in full in cash or by check acceptable to the Compensation Committee or, if and to the extent permitted by the Compensation Committee, (a) through the delivery of Shares which have been outstanding for at least six months or such other minimum period as may be required by applicable accounting rules to avoid a charge to the Company’s earnings for financial reporting purposes (unless the Compensation Committee approves a shorter period) and which have a Fair Market Value on the date the Option is exercised equal to the Option Price due for the number of Shares being acquired, (b) to the extent permitted by Applicable Laws, by a Cashless Exercise, or (c) by any combination of the foregoing permissible forms of payment.7.6 7.6.Employment Requirements. Unless otherwise provided by the Compensation Committee, either at the time of the grant of the Award or thereafter, and except as otherwise provided in Section 7.7, an Option may not be exercised unless from the Date of Grant to the date of exercise the Participant remains continuously in the employ of the Company. The Compensation Committee shall determine, in its discretion in the particular case and subject to any requirements of Applicable Laws, whether and to what the extent the period of continuous employment shall be deemed to include any period in which the Participant is on leave of absence with the consent of the Company. Unless the Compensation Committee expressly provides otherwise, a Participant’s service as an Employee with the Company will be deemed to have ceased upon termination of the Participant’s employment with the Company and its Subsidiaries (whether or not the Participant continues in the service of the Company or its Subsidiaries in some capacity other than that of an Employee).7.7 7.7.Exercise of Options on Termination of Employment.7.7.1 7.7.1.Unless otherwise provided by the Compensation Committee, either at the time of the grant of the Award or thereafter, upon the termination of a Participant’s employment with the Company and its Subsidiaries by reason of death or Disability, (a) all Options then held by the Participant, to the extent exercisable on the date of termination of employment, shall remain in full force and effect and may be exercised pursuant to the provisions thereof at any time until the earlier of the end of the fixed term thereof and the expiration of 12 months following termination of the Participant’s employment, and (b) all Options then held by theAPPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-6 Participant, to the extent not then presently exercisable, shall terminate as of the date of such termination of employment and shall not be exercisable thereafter.7.7.2 7.7.2.Unless otherwise provided by the Compensation Committee, either at the time of the grant of the Award or thereafter, upon the termination of the Participant’s employment with the Company and its Subsidiaries for any reason other than the reasons set forth in Section 7.7.1 or a termination for Cause, (a) all Options then held by the Participant, to the extent exercisable on the date of termination of employment, shall remain in full force and effect and may be exercised pursuant to the provisions thereof at any time until the earlier of the end of the fixed term thereof and the expiration of 90 days following termination of the Participant’s employment (except that the 90-day90‑day period shall be extended to 12 months from the date of termination if the Participant shall die during such 90-day90‑day period), and (b) all Options then held by the Participant, to the extent not then presently exercisable, shall terminate as of the date of such termination of employment and shall not be exercisable thereafter.7.7.3 7.7.3.Unless otherwise provided by the Compensation Committee, either at the time of the grant of the Award or thereafter, in the event of a Participant’s termination for Cause, all Options held by the Participant, whether vested or not, shall terminate concurrently with the first discovery by the Company of any reason for the Participant’s termination for Cause and shall not be exercisable thereafter. If ana Participant’s employment with the Company or any Subsidiary is suspended pending an investigation of whether there shall be a termination for Cause, all of the Participant’s rights under any Options then held by the Participant, including, without limitation, the right to exercise such Options, shall likewise be suspended during such period of investigation.7.8 7.8.Incentive Stock Options. Incentive Stock Options shall be subject to the following additional provisions:7.8.1 7.8.1.The aggregate Fair Market Value (determined as of the Date of Grant) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any individual Participant during any one calendar year (under all plans of the Company and any parent or Subsidiary) may not exceed the maximum amount permitted under Section 422 of the Code (currently $100,000). To the extent any Incentive Stock Option would exceed this limit, the portion of the Option in excess of such limit shall be treated as a Non-QualifiedNon‑Qualified Stock Option for all purposes. The provisions of this Section 7.8.1 shall be construed and applied in accordance with Section 422(d) of the Code and the regulations promulgated thereunder.7.8.2 7.8.2.No Incentive Stock Option may be granted to a Participant if, at the time of the proposed grant, the Participant owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of any parent or Subsidiary of the Company, unless (a) the Option Price is at least 110% of the Fair Market Value of a share of Common Stock on the Date of Grant, and (b) the Incentive Stock Option is not exercisable after the expiration of five (5) years from the Date of Grant.7.8.3 7.8.3.If a Participant sells or otherwise disposes of any Shares acquired pursuant to the exercise of an Incentive Stock Option on or before the later of (a) the date two (2) years after the Date of Grant of the Incentive Stock Option, and (b) the date one (1) year after the exercise of the Incentive Stock Option (in either case, a “Disqualifying Disposition”), theAPPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-7 Participant shall notify the Company, either in writing or electronically, of the Disqualifying Disposition within ten (10) days of the date thereof. In the event of a Disqualifying Disposition, the Option will not qualify for incentive stock option treatment.7.8.4.7.8.4 If the Compensation Committee exercises its discretion to permit an Incentive Stock Option to be exercised by a Participant more than three months after the termination of a Participant’s employment for any reason other than death or Disability, the Incentive Stock Option will thereafter be treated as a Non-QualifiedNon‑Qualified Stock Option for all purposes. For purposes of this Section 7.8.4, a Participant’s employment will be treated as continuing uninterrupted during any period that the Participant is on military leave, sick leave or another approved leave of absence if the period of leave does not exceed 90 consecutive days, unless reemployment on the expiration of such leave is guaranteed by statute or by contract.7.8.5 7.8.5.Any Option which is designated by the Compensation Committee as an Incentive Stock Option but fails, for any reason, to meet the requirements for Incentive Stock Option treatment shall be treated for tax purposes as a Non-QualifiedNon‑Qualified Stock Option.7.9 7.9.Additional Terms and Conditions. Each Option, and any Shares of Common Stock issued in connection with an Option, shall be subject to such additional terms and conditions not inconsistent with the Plan as are determined by the Compensation Committee and set forth in the applicable Award Agreement or other agreement, plan or policy approved by the Compensation Committee.8.8. Restricted Stock.Stock.8.1 8.1.Grant of Restricted Stock. The Compensation Committee may grant Awards of Restricted Stock in such amounts, at such times and to such Employees as the Compensation Committee, in its discretion, may determine in accordance with the eligibility criteria set forth in Section 5.8.2 8.2.Award Agreement; Acceptance by Participant. Promptly following the grant of each Award of Restricted Stock, the Compensation Committee shall cause to be delivered to the applicable Participant an Award Agreement that evidences the Award. The Participant shall accept the Award by signing and delivering to the Company his or her Award Agreement (which may be in electronic format).8.3 8.3.Restrictions. At the time of grant of each Award of Restricted Stock, the Compensation Committee shall determine the Restriction Period that will apply to the Award and the forfeiture and vesting restrictions, restrictions on transferability and other restrictions (including, without limitation, limitations on the right to vote Restricted Stock or the right to receive dividends on Restricted Stock) that will apply to the Award during the Restriction Period. These restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of Performance Criteria or future service requirements or both), in such installments or otherwise, as the Compensation Committee may determine in its discretion.8.4 8.4.Forfeiture. Except as otherwise determined by the Compensation Committee, either at the time of the grant of the Award or thereafter, upon termination of the Participant’s employment during the applicable Restriction Period, Restricted Stock that is at that time subject to restrictions shall be forfeited to and reacquired by the Company for no consideration to the Participant, unless otherwise specified in the Award Agreement; provided, however, that, the Compensation Committee,APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-8 in its discretion, may (a) provide in any Award Agreement that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from specified causes, and (b) in other cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock.8.5 8.5.Evidence of Stock Ownership. Unless otherwise determined by the Compensation Committee, until such time as all conditions or restrictions applicable to Shares of Restricted Stock have been satisfied or lapse, (a) all certificates representing Shares of Restricted Stock, together with duly endorsed stock powers in blank, will be held in custody by the Company or its transfer agent, (b) any uncertificated Shares of Restricted Stock will be held at the Company’s transfer agent in book entry form in the name of the Participant or (c) such Shares of Restricted Stock will be held for the benefit of the Participant in nominee name by the broker engaged by the Company to provide such services for the Plan, in each case with appropriate restrictions relating to the transfer of such Shares of Restricted Stock.8.6 8.6.Dividend Rights. Unless otherwise set forth in the Award Agreement, a Participant holding Restricted Stock shall be entitled to receive (a) any regular cash distributions declared and paid with respect to Shares subject to an Award of Restricted Stock, and (b) any Shares distributed in connection with a stock split or stock dividend, and any other cash and property (including securities of the Company and other issuers) distributed as a dividend, with respect to Shares subject to an Award of Restricted Stock. In the case of Restricted Stock, the vesting of which is conditioned only upon the continuous employment of, or provision of services by, theParticipant for a specified future period, such dividends and distributions shall be paid to the Participant at the same time they are paid to all other stockholders of the Company unless otherwise provided in the Award Agreement; provided that, if any such dividends or distributions are paid in Shares or other securities, such Shares or other securities shall be subject to the same restrictions and forfeiture conditions to the same extent as the Restricted Stock with respect to which such Shares or other securities have been distributed, and all references to Restricted Stock in the Plan or the applicable Award Agreement shall be deemed to include such Shares or other securities. In the case of Restricted Stock, the vesting of which is conditioned on the achievement of Performance Criteria, such dividends and distributions shall be withheld by the Company and shall vest and be paid, without interest, only if and to the extent, and at the time, the underlying Shares of Restricted Stock shall vest. To the extent dividends or distributions are withheld with respect to Shares of Restricted Stock that are forfeited, the dividends and distributions shall also be forfeited.8.7 8.7.Voting Rights. Unless otherwise set forth in the Award Agreement, all voting rights appurtenant to the Shares subject to an Award of Restricted Stock shall be exercised by the Participant.8.8 8.8.Termination of the Restriction Period. Upon satisfaction of the terms and conditions specified in the Award Agreement that apply to a Restriction Period, (a) the Participant shall be entitled to have the legend referred to in Section 8.5 removed from his or her Shares of Restricted Stock after the last day of the Restriction Period, and (b) if the Shares of Restricted Stock are evidenced by physical certificates and the Company has retained possession of the certificates representing the Shares of Restricted Stock, the Company shall promptly deliver such certificates to the Participant. If the terms and conditions specified in the Award Agreement that apply to a Restriction Period have not been satisfied, the Restricted Stock subject to the Award shall be forfeited to and reacquired by the Company for no consideration to the Participant, unless otherwise specified in the Award Agreement.-10-APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-9 Table Of Contents8.9 8.9.Additional Terms and Conditions. Each Award of Restricted Stock, and all Shares of Restricted Stock granted or offered for sale hereunder, shall be subject to such additional terms and conditions not inconsistent with the Plan as are prescribed by the Compensation Committee and set forth in the applicable Award Agreement or other agreement, plan or policy as approved by the Compensation Committee.9.9. Restricted Stock Units.Units.9.1 9.1.Grant of Restricted Stock Units. The Compensation Committee may make Awards of Restricted Stock Units in such amounts, at such times and to such Employees as the Compensation Committee, in its discretion, may determine in accordance with the eligibility criteria set forth in Section 5. Unless the Award Agreement provides otherwise with respect to the right to receive dividends or other distributions, a Participant granted Restricted Stock Units shall not have any of the rights of a stockholder with respect to the Shares subject to an Award of Restricted Stock Units, including any right to vote, until the Shares subject to the Award shall have been issued in the Participant’s name in accordance with the terms of the applicable Award Agreement.9.2 9.2.Vesting and Other Terms. At the time of grant of each Award of Restricted Stock Units, the Compensation Committee shall determine the Restriction Period that will apply to the Award. During the Restriction Period, Restricted Stock Units shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions as the Compensation Committee may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of Performance Criteria or future service requirements or both), in such installments or otherwise as the Compensation Committee may determine in its discretion. If the terms and conditions specified in the Award Agreement have not been satisfied by the end of the Restriction Period, the Restricted Stock Units subject to the Restriction Period shall become null and void, and the Participant shall forfeit all rights with respect to such Award.9.3 9.3.Termination of Employment. Except as otherwise determined by the Compensation Committee, either at the time of the grant of the Award or thereafter, upon termination of the Participant’s employment during the applicable Restriction Period, Restricted Stock Units that are at that time subject to restrictions shall be null and void, and the Participant shall forfeit all rights with respect to such Awards.9.4 9.4.Settlement. On the vesting date or dates of the Award, the Company shall, subject to the terms of the Plan and the Award Agreement, transfer to the Participant one Share for each Restricted Stock Unit scheduled to be issued on such date and not previously forfeited.9.5 9.5.Additional Terms and Conditions. Each Award of Restricted Stock Units, and all Shares issued in settlement of Restricted Stock Units, shall be subject to such additional terms and conditions not inconsistent with the Plan as are prescribed by the Compensation Committee and set forth in the applicable Award Agreement or other agreement, plan or policy as approved by the Compensation Committee.9.6 9.6.Dividend Rights. If the Award Agreement so provides, a Participant holding Restricted Stock Units shall be entitled to receive, but only if, to the extent, and at the time that the Restricted Stock Units vest and are settled, (i) any regular cash distributions declared and paid with respect to Shares subject to a Restricted Stock Unit, and (ii) any Shares distributed in connection with a stock split or stock dividend, and any other cash and property (including securities of the Company and other issuers) distributed as a dividend, with respect to Shares subject to an Award of Restricted Stock.APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-10 In the case of Restricted Stock Units, the vesting of which is conditioned on the achievement of Performance Criteria, any such dividends or distributions (if provided for in the Award Agreement) shall be withheld by the Company and shall vest and be paid, without interest, only if and to the extent, and at the time, the Restricted Stock Units shall vest. Dividends or distributions relating to any forfeited Restricted Stock Units shall also be forfeited.10.10. Stock Appreciation Rights.Rights.10.1 10.1.Grant of Stock Appreciation Rights. The Compensation Committee may make Awards of Stock Appreciation Rights in such amounts, at such times and to such Employees as the Compensation Committee, in its discretion, may determine in accordance with the eligibility criteria set forth in Section 5. If a Stock Appreciation Right is granted to a Section 16(b) Insider, the Award Agreement shall incorporate all the terms and conditions at the time necessary to assure that the subsequent exercise of the Stock Appreciation Right shall qualify for the safe-harborsafe‑harbor exemption from short-swingshort‑swing profit liability provided by Rule 16b-3.16b‑3.10.2 10.2.General Terms. A Stock Appreciation Right shall confer on the Participant the right to receive in Shares, cash or a combination thereof (as may be determined by the Compensation Committee in its discretion) the value equal to the excess of the Fair Market Value of one Share on the date of exercise over the exercise price for the Stock Appreciation Right, with respect to every Share for which the Stock Appreciation Right is granted (the “SAR Settlement Value”). At the time of grant, the Stock Appreciation Right must be designated by the Compensation Committee as either a tandem Stock Appreciation Right or a stand-alonestand‑alone Stock Appreciation Right and, if not so designated, shall be deemed to be a stand-alonestand‑alone Stock Appreciation Right. A tandem Stock Appreciation Right is a Stock Appreciation Right that is granted in tandem with an Option and only may be granted at the same time as the Option to which it relates. The exercise of a tandem Stock Appreciation Right shall cancel the related Option for a like number of Shares, and the exercise of the related Option similarly shall cancel the tandem Stock Appreciation Right for a like number of Shares. Tandem Stock Appreciation Rights shall, except as specifically set forth in this Section 10 or in the applicable Award Agreement, be subject to the same terms and conditions as apply to the related Option. Stand-aloneStand‑alone Stock Appreciation Rights shall, except as specifically set forth in this Section 10 or in the applicable Award Agreement, be subject to the same terms and conditions generally applicable to Non-QualifiedNon‑Qualified Stock Options as set forth in Section 7.10.3 10.3.Exercise Price. The exercise price of each Stock Appreciation Right shall be determined by the Compensation Committee, but shall not be less than the Fair Market Value of the Common Stock on the Date of Grant.10.4 10.4.Other Terms. The Compensation Committee shall determine the term of each Stock Appreciation Right. The term shall commence on the Date of Grant and shall be ten (10) years or such shorter period as is determined by the Compensation Committee. The Compensation Committee also shall determine the time or times at which and the circumstances under which a Stock Appreciation Right may be exercised in whole or in part, the method of exercise, the method of settlement and the form of consideration payable in settlement. The Compensation Committee may provide for Stock Appreciation Rights to become exercisable at one time or from time to time, periodically or otherwise (including, without limitation, upon the satisfaction of Performance Criteria), as to such number of Shares or percentage of the Shares subject to the Stock Appreciation Right as the Compensation Committee determines.APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-11 10.5 10.5.Exercise. Each Stock Appreciation Right may be exercised in whole or in part (but not as to fractional shares) by the delivery of an executed Notice of Exercise (which may be in electronic format) in the form prescribed from time to time by the Compensation Committee, accompanied by payment of any amounts required to be withheld for tax purposes under Section 14. If a Stock Appreciation Right is exercised by any person other than the Participant, the Compensation Committee may require satisfactory evidence that the person exercising the Stock Appreciation Right has the right to do so. Upon the exercise of a Stock Appreciation Right, the Participant shall be entitled to receive the SAR Settlement Value from the Company for each Share as to which the Stock Appreciation Right has been exercised. The Company shall pay the SAR Settlement Value in Shares valued at Fair Market Value on the exercise date, in cash or any combination thereof, as determined by the Compensation Committee. The Compensation Committee may permit a Participant to elect to defer receipt of payment of all or part of the SAR Settlement Value pursuant to such rules and regulations as may be adopted by the Compensation Committee or as may be specified in the applicable Award Agreement.10.6 10.6.Additional Terms and Conditions. Each Award of Stock Appreciation Rights, and all Shares issued in settlement of Stock Appreciation Rights, shall be subject to such additional terms and conditions not inconsistent with the Plan as are prescribed by the Compensation Committee and set forth in the applicable Award Agreement.11.11. Other Stock-Based Awards.Stock‑Based Awards.The Compensation Committee may grant to Employees equity-basedequity‑based or equity-relatedequity‑related Awards not otherwise described herein, alone or in tandem with other Awards, in such amounts and subject to such terms and conditions as the Compensation Committee shall determine from time to time in its sole discretion (“Other Stock-BasedStock‑Based Awards”). Without limiting the generality of the foregoing, Other Stock-BasedStock‑Based Awards may (a) involve the transfer of restricted or unrestricted Shares of Common Stock to Participants, either at the time of grant or thereafter, or payment in cash or otherwise of amounts based on the value of Shares of Common Stock, (b) be subject to performance-basedperformance‑based or service-basedservice‑based vesting requirements, (c) be granted as, or in payment of, a bonus, or to provide incentives or recognize special achievements or contributions, and(d) be designed to comply with Applicable Laws of jurisdictions other than the United States, and (e) be designed to qualify for the performance-basedperformance‑based compensation exception under Section 162(m); provided, that each Other Stock-BasedStock‑Based Award shall be denominated in, or shall have a value determined by reference to, a number of Shares that is specified in the Award Agreement. In the case of Other Stock-BasedStock‑Based Awards, the vesting of which is conditioned on the achievement of Performance Criteria, if the Award Agreement provides Participants with dividend rights, any dividends or distributions shall be withheld by the Company and shall vest and be paid, without interest, only if and to the extent, and at the time, the Other Stock-BasedStock‑Based Awards shall vest. Dividends or distributions relating to any forfeited Other Stock-BasedStock‑Based Awards shall also be forfeited.12.12. Performance Based Awards.Awards.12.1 12.1.Performance Criteria. Awards made pursuant to the Plan may be made subject to the attainment of performance goals relating to one or more business criteria (“Performance Criteria”). For purposes of Awards that are intended to qualify for the performance-basedperformance‑based compensation exception under Section 162(m), theThe Performance Criteria shall (a) be objective business criteria and otherwise meet the requirements of Section 162(m), including the requirement that the level or levels of performance targetedbe determined by the Compensation Committee result in the achievement of performance goals being “substantially uncertain” as of the Date of Grant, and (b)and relate to one or more of the following performance measures: (i) revenues or net sales; (ii) earningsAPPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-12 before or after deduction for all or any portion of interest, taxes, depreciation, amortization or other items, whether or not on a continuing operations or an aggregate or per share basis; (iii) return on equity, investment, capital or assets; (iv) margins; (v) one or more operating ratios; (vi) borrowing levels, leverage ratios or credit ratings; (vii) market share; (viii) capital expenditures; (ix) cash flow; (x) stock price, growth in stockholder valuerelative to one or more stock indices or total stockholder return; (xi) budget and expense management; (xii) working capital turnover and targets; (xiii) sales of particular products or services, market penetration, geographic expansion or new concept development; (xiv) customer acquisition, expansion and retention; (xv) acquisitions and divestitures (in whole or in part), joint ventures, strategic alliances, spin-offs, split-upsspin‑offs, split‑ups and the like; (xvi) reorganizations, recapitalizations, restructurings and financings (debt or equity); (xvii) transactions that would constitute a Change in Control; or(xviii) such other measures or (xviii)criteria as determined by the Compensation Committee; or (xix) any combination of the foregoing. Performance Criteria measures, and targets with respect thereto, determined by the Compensation Committee need not be based upon an increase, a positive or improved result or avoidance of loss.12.2 12.2.Additional Provisions Applicable to Performance Criteria. Any Performance Criteria may be used to measure the performance of the Company as a whole or with respect to any business unit, Subsidiary or business segment of the Company, either individually, alternatively or in any combination, and may be measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-establishedpre‑established target, to previous period results or to a designated comparison group, in each case as specified by the Compensation Committee in the Award.To the extent required by Section 162(m), prior to the payment of any compensation under an Award intended to qualify as performance-basedperformance‑based compensation under Section 162(m), the Compensation Committee shall certify the extent to which any such Performance Criteria and any other material terms under such Award have been satisfied (other than in cases where such Performance Criteria relate solely to the increase in the value of the Common Stock). To the extent Section 162(m) is applicable, the Compensation Committee may not in any event increase the amount of compensation payable to a Participant subject to Section 162(m) upon the satisfaction of any Performance Criteria.12.3 12.3.Adjustments to Performance Criteria. The Compensation Committee may, with respect to any Performance Period, make such adjustments to Performance Criteria as it may deem appropriate to compensate for, or reflect, (a) asset write-downswrite‑downs or write-ups;write‑ups; (b) litigation, claims, judgments or settlements; (c) the effect of changes in tax law, accounting principles or other laws or provisions affecting reported results; (d) discontinued operations and divestitures; (e) mergers, acquisitions and accruals for reorganization and restructuring programs; and (f) extraordinary or other unusual or non-recurring item;non‑recurring item; provided, however, with respect to Awards intended to qualify as performance-basedperformance‑based compensation under Section 162(m), such adjustments shall be made only to the extent that the Compensation Committee determines that such adjustments may be made without a loss of deductibility of the compensation includible with respect to the Awards under Section 162(m).12.4 12.4.Performance Periods. The attainment of Performance Criteria shall be measured over performance periods of one (1) year or more (“Performance Periods”), as may be established by the Compensation Committee.Performance Criteria for any Performance Period shall be established not later than the earlier of (a) 90 days after the beginning of the Performance Period, or (b) the time 25% of the Performance Period has elapsed.12.5 12.5.Right of Recapture. If, at any time after the date on which a Participant has been granted or becomes vested in or paid an Award pursuant to the achievement of Performance Criteria, the Compensation Committee determines that the earlier determination as to the achievement of the Performance Criteria was based on incorrect data and that in fact the Performance Criteria had notAPPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-13 been achieved or had been achieved to a lesser extent than originally determined and a portion of the Award would not have been granted, vested or paid given the correct data, then (a) any portion of the Award that was so granted shall be forfeited and any related Shares (or, if such Shares were disposed of, the cash equivalent) shall be returned to the Company, (b) any portion of the Award that became so vested shall be deemed to be not vested and any related Shares (or, if such Shares were disposed of, the cash equivalent) shall be returned to the Company, and (c) any portion of the Award so paid to the Participant shall be repaid by the Participant to the Company upon notice from the Company, in each case as and to the extent provided by the Compensation Committee.12.6 12.6.Section 162(m). Notwithstanding any provision contained in this Plan to the contrary, the terms of Awards (excluding any Options and Stock Appreciation Rights) that are intended to qualify for the performance-basedperformance‑based compensation exception under Section 162(m) granted to any one Participant shall be such that the maximum amount of compensation recognized under such Awards by such Participant in any calendar year, ignoring for this purpose any acceleration resulting from the Participant’s death or Disability or from a Change in Control, may not exceed 1,000,000 Shares, if such Awards are settled in Shares, or the Fair Market Value of that same number of Shares if such Awards are settled in cash. Furthermore, in the case of an Award intended to be eligible for the performance-basedperformance‑based compensation exception under Section 162(m), the Plan and such Award shall be construed to the maximum extent permitted by law in a manner consistent with qualifying the Award for such exception.13.13. Restrictions on Transfer.Transfer.13.1 13.1.Restrictions on Transfer. Subject to the further provisions of this Section 13.1, Awards may not be transferred other than by will or by the laws of descent and distribution, and during a Participant’s lifetime an Award requiring exercise may be exercised only by the Participant (or in the event of the Participant’s incapacity, the person or persons legally appointed to act on the Participant’s behalf). No Award or any interest therein shall be subject to attachment, execution, garnishment, sequestration, the laws of bankruptcy or any other legal or equitable process. The foregoing notwithstanding, Awards (other than Incentive Stock Options and Stock Appreciation Rights granted in tandem therewith) may be transferred to one or more transferees during the lifetime of the Participant, and may be exercised by such transferees in accordance with the terms of such Award, but only if and to the extent such transfers are permitted by the Compensation Committee in its discretion, subject to any terms and conditions which the Compensation Committee may impose thereon. If a transfer is approved by the Compensation Committee, the transfer shall only be effective upon notice in writing or electronically to the Company given in such form and manner as may be prescribed by the Compensation Committee. Anything herein to the contrary notwithstanding, transfers of an Award by a Participant for consideration are prohibited.13.2 13.2.Designation and Change of Beneficiary. Each Participant may file in writing or electronically with the Compensation Committee a designation of one or more persons as the beneficiary who shall be entitled to receive the rights or amounts payable with respect to an Award due under the Plan upon the Participant’s death. A Participant may, from time to time, revoke or change his or her beneficiary designation without the consent of any prior beneficiary by filing a new designation with the Compensation Committee. The last such designation received by the Compensation Committee shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Compensation Committee prior to the Participant’s death, and in no event shall it be effective as of a date prior to such receipt. If no beneficiary designation is filed by the Participant, the beneficiary shall be deemed to be the Participant’s estate.-16-APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-14 Table Of Contents13.3 13.3.Provisions Applicable to Transferees. A beneficiary, transferee or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award Agreement or other document applicable to the Participant, except as otherwise determined by the Compensation Committee, and to any additional terms and conditions deemed necessary or appropriate by the Compensation Committee. The Compensation Committee shall have full and exclusive authority to interpret and apply the provisions of the Plan to transferees to the extent not specifically addressed herein.14.14. Withholding and Other Tax Provisions.Provisions.14.1 14.1.Withholding. The Company may require the Participant to pay to the Company the amount of any taxes that the Company is required by applicable federal, state, foreign, local or other law to withhold with respect to the grant, vesting, exercise or settlement of an Award and, where applicable, the payment of dividends or other distributions with respect to Shares subject to an Award. The Company shall not be required to issue any Shares under the Plan until such obligations are satisfied in full. The Compensation Committee may, in its sole and absolute discretion in the particular case, permit or require a Participant to satisfy his or her tax withholding obligations by any of the following means (or a combination of any of the following means): (a) by paying cash to the Company, (b) by having the Company withhold a number of Shares that would otherwise be issued to the Participant (or become vested in the case of Restricted Shares) having a Fair Market Value equal to the tax withholding obligations, (c) surrendering a number of Shares the Participant already owns having a Fair Market Value equal to the tax withholding obligations, or (d) entering into such other arrangement as is acceptable to the Compensation Committee in its sole discretion. The value of any Shares withheld or surrendered may not exceed the employer’s minimum tax withholding obligation and, to the extent such Shares were acquired by the Participant from the Company as compensation, the Shares must have been held for the minimum period required by applicable accounting rules to avoid a charge to the Company’s earnings for financial reporting purposes. The Company shall also have the right to deduct from any and all cash payments otherwise owed to a Participant any federal, state, foreign, local or other taxes required to be withheld with respect to the Participant’s participation in the Plan.14.2 14.2.Required Consent to and Notification of Section 83(b) Election. No election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Section 83(b) of the Code) or under a similar provision of the laws of a jurisdiction outside the United States may be made in connection with an Award unless expressly permitted by the terms of the Award Agreement or by action of the Compensation Committee in writing prior to the making of such election. In any case in which a Participant is so permitted to make such an election, the Participant shall notify the Company of such election within ten (10) days of filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code or other applicable provisions of any tax law.14.3 14.3.No Guarantee of Tax Consequences. None of the Board of Directors, the Company nor the Compensation Committee makes any commitment or guarantee that any federal, state or local tax treatment will apply or be available to any person participating or eligible to participate hereunder.15.15. Effect of Certain Corporate Changes and Changes in Control.Control.15.1 15.1.Basic Adjustment Provisions. In the event the Compensation Committee determines that any stock dividend, stock split, combination of shares, extraordinary dividend of cash or assets,APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-15 merger, consolidation, spin-off,spin‑off, recapitalization (other than the conversion of convertible securities according to their terms), reorganization, liquidation, dissolution or other similar corporate change, or any other increase, decrease or change in the Common Stock without receipt or payment of consideration by the Company, in the Compensation Committee’s sole discretion, affects the Common Stock such that an adjustment to the Awards or the Plan is determined by the Compensation Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, then the Compensation Committee shall, in such manner as it may deem equitable, adjust any or all of:(a)(a) The number and kind of Shares of Common Stock (or other securities or property) with respect to which an Award may be granted under the Plan (including, but not limited to, adjustments of the limitations in Section 4.1 on the maximum number and kind of Shares which may be issued under the Plan, the ratio set forth in Section 4.1 for the purpose of determining the number of Shares issued under the Plan,and the limitations in Section 4.3 on the maximum number of Shares that may be covered by Awards granted under the Plan to any single Participant in any calendar year);(b)The number and kind of Shares of Common Stock (or other securities or property) subject to outstanding Awards;(c)The grant, exercise or other purchase price per Share under any outstanding Awards; and(d)The terms and conditions of any outstanding Awards (including, without limitation, any applicable Performance Criteria specified in an Award Agreement).Notwithstanding the foregoing, (x) with respect to Incentive Stock Options, any such adjustments shall be made in accordance with Section 424(h) of the Code, (y) the Compensation Committee shall consider the impact of Section 409A of the Code on any such adjustments, and (z) no such adjustments may change the value of benefits available to a Participant under a previously granted Award, (i) if the effect would be to increase the value of the benefits available under such Award, without the approval of the stockholders if such is required by the Plan or Applicable Laws, or (ii) if the effect would be to materially and adversely affect the value of the benefits available under such Award, without the Participant'sParticipant’s consent to that adjustment.15.2 15.2.Change in Control. Unless otherwise provided inEffective upon the Award Agreement or other employment, severance or change in control agreement approved by the Compensation Committee to which a Participant is a party, in which case such agreement shall control, the Compensation Committee may provide with respect to any transaction that results inconsummation of a Change in Control either atof the timeCompany, and except as otherwise provided in an individual Award Agreement, all outstanding Awards under the Plan shall terminate to the extent they are not assumed or replaced in connection with the Change in Control.(a)For each portion of an Award that is grantedassumed or replaced, then such portion shall become fully vested, exercisable and payable, and be released from any forfeiture rights, immediately upon termination of the Participant’s employment with the Company (or its successor) within 24 months after the Change in Control, but only if such termination of employment is triggered by the Company (or its successor) without Cause or by action takenthe Participant for Good Reason.(b)For each portion of an Award that is neither assumed nor replaced, the Compensation Committee has the discretion to effectuate either of the following immediately prior to the occurrenceconsummation of the Change in Control, provided that a Change in Controlthe Participant’s employmentAPPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-16 has not terminated prior to such date: (x) such outstanding Awards (or portion thereof) shall have such effect as is specified bybecome partially or fully vested and exercisable (and partially or fully released from any forfeiture rights), with performance-based Awards under Section 12 of the Plan vesting based upon actual performance or, if the Compensation Committee determines that actual performance is not determinable, then at target; or no effect, as the Compensation Committee in its sole discretion may provide. Without limiting the foregoing, the Compensation Committee may provide, either at the time an Award is granted or by action taken prior to the occurrence of the Change in Control, and without the consent or approval of any Participant, for one or more of the following actions or combination of actions with respect to some or all(y) such outstanding Awards (which actions may vary among individual Participants and may be subject to such terms and conditions as the Compensation Committee deems appropriate):(a) Acceleration of the time at which Awards then outstanding vest and (as applicable) may be exercised in full for a limited period of time on or before a specified date fixed by the Compensation Committee (which will permit the Participant to participate with the Common Stock received upon exercise of an Award in the Change in Control transaction), after which specified date all unexercised Awards and all rights of Participants thereunder shall terminate;(b) Acceleration of the time at which Awards then outstanding vest (and, in the case of Options, Stock Appreciation Rights and other applicable Awards, may be exercised so that such Options, Stock Appreciation Rights and other applicable Awards may be exercised in full for their then remaining term);(c) The assumption of Awards (or any portion thereof) by the successor or survivor corporation, or a parent or Subsidiary thereof, or the substitution of awards covering the stock of the successor or survivor corporation, or a parent or Subsidiary thereof, for then outstanding Awards that have been issued under the Plan, with appropriate adjustments as to the numbershall be cancelled and kind of shares and grant, exercise or other purchase prices;(d) The mandatory surrender to the Company for cancellation of any outstanding Awards and the purchase of the surrendered Awardsterminated for an amount of cash, securities or other property equal to the excess, if any, of the Fair Market Value of the vested and/or unvested (as determined by the Committee in its sole discretion) shares of Common Stock subject to any such Award immediately prior to the occurrence of the Change in Control (and such additional portion of the Award as the Compensation Committee may determine) over the aggregate exercise or other purchase price (if any) of such shares; and(e) The termination of any Award (or any portion thereof) concurrently with the closing or other consummationshares. For performance-based Awards under Section 12 of the Change in Control transaction. IfPlan, the number of shares of Common Stock subject to subsection 15.2(b)(y) shall be calculated based upon actual performance or, if the Compensation Committee providesdetermines that actual performance is not determinable, then at target. For avoidance of doubt, if an Award is an Option or Stock Appreciation Right and no positive spread exists pursuant to the foregoing, then (y) may be unilaterally effectuated by the Company with no cash payment to the Participant holding such an Award.Notwithstanding anything herein to the contrary, an Award that vests, is earned, or is paid-out upon the satisfaction of one or more performance goals shall terminate concurrently withnot be considered "assumed" or "replaced" if the closing or other consummationCompany (or its successor) modifies any of the Changeperformance goals without the Participant’s consent; provided, however, that a modification to the performance goals only to reflect the successor corporation’s post-Change in Control transaction, each Participantcorporate structure shall havenot be deemed to invalidate an otherwise valid assumption or replacement of an Award.This Section 15.2 of the right upPlan was amended effective May 19, 2016. As a result, the terms of Award Agreements that were in effect prior to such date shall prevail to the closing or other consummation of the transactionextent such terms are more favorable to exercise all or any part of the Participant’s vested Awards.15.3 15.3.Determination of Adjustments. All determinations of the Compensation Committee pursuant to this Section 15 shall be conclusive and binding on all persons for all purposes of the Plan.15.4 15.4.No Restriction on Right of Company to Effect Corporate Changes. The Plan shall not affect in any way the right or power of the Company to make or authorize any adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, any merger or consolidation, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or that are convertible into or exchangeable for Common Stock, the dissolution or liquidation of the Company, any sale or transfer of all or any part of the assets or business of the Company or any of its Subsidiaries, or any other corporate act or proceeding, whether of a similar character or otherwise. Except as specifically provided in this Section 15 and authorized by the Compensation Committee, a Participant shall have no rights by reason of any such corporate act or proceeding, and no adjustment by reason thereof shall be made with respect to any outstanding Award or the Plan.16.16. Regulatory Compliance.Compliance.16.1 16.1.Conditions to Obligations of the Company. The Company may, to the extent deemed necessary or advisable by the Compensation Committee, postpone the issuance or delivery of Shares or the payment of other benefits under any Award until:APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-17 (a)The completion of any registration or other qualification of such Shares under any state or federal securities law or under the rules and regulations of the Securities and Exchange Commission or any other governmental regulatory body, which the Compensation Committee shall, in its sole discretion, deem necessary or advisable;(b)The admission to listing of, or other required action with respect to, such Shares on any and all stock exchanges or automated quotation systems upon which the Common Stock or other securities of the Company are then listed or quoted; and(c)The compliance with all other requirements of Applicable Laws, as the Compensation Committee shall, in its sole discretion, deem necessary or advisable;The Compensation Committee also may require any Participant to make such representations, furnish such information and comply with or be subject to such other conditions as the Compensation Committee shall, in its sole discretion, deem necessary or advisable to comply with any requirements of Applicable Laws in connection with the grant of any Award or the issuance or delivery of Shares or the payment of other benefits under any Award. Without limiting the generality of the foregoing, if the Shares offered for sale or sold under the Plan are offered or sold pursuant to an exemption from registration under federal, state or foreign securities laws, (x) the Company may require the Participant to represent and agree at the time of grant or exercise, as the case may be, that such Shares are being acquired for investment, and not with a view to the sale or distribution thereof, and to make such other representations as are deemed necessary or appropriate by the Company and its counsel, and (y) the Company may restrict the transfer of such Shares, issue stop-transferstop‑transfer instructions and legend the certificates representing such Shares, in each case in such manner as it deems advisable to ensure the availability of any such exemption.16.2 16.2.Limitation on Company Obligations. The inability of the Company (after reasonable efforts) to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance or sale of any Awards or Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Awards or Shares as to which such requisite authority shall not have been obtained. Nothing contained herein shall be construed to impose on the Company any obligation to register for offering or resale under the Securities Act, or to register or qualify under any other state, federal or foreign securities laws, any Shares, securities or interests in a security paid or issued under, or created by, the Plan, or to continue in effect any such registrations or qualifications if made, and the Company shall have no liability for any inability or failure to do so.16.3 16.3.Provisions Applicable to a Change in Control. Anything in this Section 16 to the contrary notwithstanding, in connection with a Change in Control, the Company shall not take or cause to be taken any action, and shall not undertake or permit to arise any legal or contractual obligation, that results or would result in any postponement of the issuance or delivery of Shares or the payment of benefits under any Award or the imposition of any other conditions on such issuance, delivery or payment, to the extent that such postponement or other condition would represent a greater burden on a Participant than existed on the 90th day preceding the effective date of the Change in Control.16.4 16.4.Exchange Act. Notwithstanding anything contained in the Plan or any Award Agreement to the contrary, if the consummation of any transaction under the Plan would result in the possible imposition of liability on a Participant pursuant to Section 16(b) of the Exchange Act, the Compensation Committee shall have the right, in its sole discretion, but shall not be obligated, to defer such transaction to the extent necessary to avoid such liability.17.APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-18 17. Amendment or Termination of the Plan.Plan.The Board of Directors may at any time and from time to time amend, suspend or terminate the Plan in whole or in part; provided that no such amendment may, without the approval of the stockholders of the Company, increase the number of Shares that may be issued under the Plan (except for adjustments pursuant to Section 15) or effectuate a change for which stockholder approval is required: (a) in order for the Plan to continue to qualify under Section 422 of the Code; or(b) under the corporate governance standards of any national securities exchange or automated quotation system applicable to the Company;Company; or (c) for Awards to be eligible for the performance-basedperformance‑based compensation exception under Section 162(m). In addition, no termination or amendment of the Plan shall materially and adversely affect the rights of any Participant in any outstanding Awards, without the consent of the Participant to whom the Awards have been granted.18.18. Term of the Plan.Plan.The Plan shall continue until terminated by the Board of Directors pursuant to Section 17 or as otherwise set forth in the Plan, and no further Awards shall be made hereunder after the date of such termination. Unless earlier terminated, the Plan shall terminate ten (10) years after the initial approval of the 2015 Employee Equity Incentive Plan by the Board of DirectorsEffective Date (provided that Awards granted before termination shall continue in accordance with their terms).19.19. No Right to Awards or Continued Employment.Employment.No person shall have any claim or right to receive grants of Awards under the Plan, and neither the Plan nor any action taken or omitted to be taken hereunder shall create or confer on any Participant the right to continued employment with the Company or its Subsidiaries or interfere with or to limit in any way the right of the Company or its Subsidiaries to terminate the employment of any Participant at any time or for any reason. The loss of any existing or potential profit in Awards shall not constitute an element of damages in the event of the termination of the employment of any Participant for any reason, even if the termination is in violation of an obligation of the Company or its Subsidiaries to the Participant. No Participant shall have any rights as a stockholder with respect to any Shares covered by or relating to any Award until the date of the issuance of a stock certificate with respect to such Shares.20.20. Effect of Plan Upon Other Awards and Compensation Plans.Plans.Nothing in the Plan shall be construed to limit the right of the Company or any of its Subsidiaries (a) to establish any other forms of incentives or compensation for Employees, or (b) to grant or assume options, restricted stock or other equity-basedequity‑based awards otherwise than under the Plan in connection with any proper corporate purpose, including, but not by way of limitation, the grant or assumption of options, restricted stock or other awards in connection with the acquisition of the business, securities or assets of any corporation, firm or business. Except as provided below, the adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company or any of its Subsidiaries, and no payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company except as otherwise specifically provided in such other plan.Upon stockholder approval of the Plan, no further awards may be granted under the Company’s Amended and Restated 2006 Equity Incentive Plan (the “Prior Plan”); provided that all awards granted by the Company prior to the stockholder approval of the Plan shall remain in full force and effect and shall continue to be governed by the terms of the Prior Plan and related award agreement.21.General Provisions.APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-19 21. General Provisions.21.1 21.1.Other Documents. All documents prepared, executed or delivered in connection with the Plan shall be, in substance and form, as established and modified by the Compensation Committee or by persons under its direction and supervision; provided, however, that all such documents shall be subject in every respect to the provisions of the Plan, and in the event of any conflict between the terms of any such document and the Plan, the provisions of the Plan shall prevail.21.2 21.2.No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award. The Compensation Committee shall determine whether cash or other property shall be issued or paid in lieu of fractional shares of Common Stock or whether such fractional shares of Common Stock and any rights thereto shall be forfeited or otherwise eliminated (including by rounding to the nearest whole Share).21.3 21.3.Payments in the Event of Forfeitures. Unless otherwise determined by the Compensation Committee or otherwise specified in the applicable Award Agreement, in the event of the forfeiture of an Award with respect to which a Participant paid cash consideration, the Participant shall be repaid the amount of such cash consideration within ten (10) days of the date of forfeiture or as soon thereafter as practicable.21.4 21.4.Limitation on Repricing. The Compensation Committee shall not, without the approval of the stockholders of the Company, amend or replace previously granted Options or Stock Appreciation Rights in a transaction that constitutes a “repricing,” as such term is defined in Section 303A.08 of the Listed Company Manual of the New York Stock Exchange or the rules and regulations of the Securities and Exchange Commission. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off,split‑up, spin‑off, combination, or exchange of shares), the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding Options or Stock Appreciation Rights or cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other awards or Options or Stock Appreciation Rights with an exercise price that is less than the exercise price of the original Options or Stock Appreciation Rights without stockholder approval.21.5 21.5.Minimum Vesting for Awards to Employees. Subject to Sections 3.2(f) and 15.2 of the Plan, or as otherwise provided in the related Award Agreement in connection with a Change in Control or a Participant’s death or disability, (i) no condition on vesting of an Award granted to an Employee that is based solely upon the achievement of Performance Criteria shall be based on performance over a period of less than one year, and (ii) no condition on vesting of an Award granted to an Employee that is based solely upon continued employment or service shall provide for vesting in fullof any portion of such Award more quickly than one year from the Date of Grant of the Award (which(which vesting period may lapse on a pro-rated,pro‑rated, graded, or cliff basis as specified in the Award Agreement).21.6 . Notwithstanding the foregoing, Awards with respect to up to 5% of the Shares of Common Stock reserved for issuance pursuant to Section 4.1 (subject to adjustment as provided in Section 15) may be granted without regard to the limitations set forth in this Section 21.5.21.6.Misconduct of a Participant. Notwithstanding any other provision of the Plan or an Award Agreement, if a Participant commits fraud or dishonesty toward the Company or wrongfully uses or discloses any trade secret, confidential data or other information proprietary to the Company, or intentionally takes any other action materially inimical to the best interests of the Company, asAPPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-20 determined by the Compensation Committee, in its sole and absolute discretion, such Participant shall forfeit all rights and benefits under the Plan and any outstanding Awards.21.7 21.7.Restrictive Legends. Any certificates for Shares, any uncertificated Shares issued in book entry form, and any Shares deposited with any broker that the Company has engaged to provide services for the Plan on behalf of a Participant may be subject to such restrictions, legends and stop-transferstop‑transfer instructions as the Compensation Committee deems appropriate to reflect any restrictions on the Shares.21.8 21.8.Uncertificated Shares. To the extent that this Plan provides for the issuance of certificates to reflect the transfer of Shares, the transfer of such Shares may be effected on a noncertificated or book entry basis or in nominee name, to the extent permitted by Applicable Law or the rules of any applicable stock exchange.21.9 21.9.Successors in Interest. The provisions of the Plan, the terms and conditions of any Award and the actions of the Compensation Committee shall be binding upon the successors and assigns of the Company and permitted successors and assigns, heirs, executors, administrators and other legal representatives of Participants.21.10 21.10.Severability. If any provision of the Plan or any Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Award under any law deemed applicable by the Compensation Committee, such provision shall be construed or deemed amended to conform to Applicable Laws, or, if it cannot be so construed or deemed amended without, in the Compensation Committee’s determination, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.21.11 21.11.Headings. The headings of sections and subsections herein are included solely for convenience of reference and shall not affect the meaning of any of the provisions of the Plan.21.12 21.12.Governing Law. To the extent not preempted by federal law, the Plan and all rights hereunder shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to rules relating to conflicts of law.21.13 21.13.Compliance With Section 162(m). If any provision of the Plan or any Award Agreement relating to an Award that is designated as intended to comply with Section 162(m) does not comply or is inconsistent with the requirements of Section 162(m), such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.requirements21.14 Determinations with respect to any Award that remains eligible for and subject to the performance-based compensation exception under Section 162(m) shall be made in accordance with the procedures and requirements as provided in the Plan prior to the Effective Date.21.14.Compliance With Section 409A. Awards under the Plan are intended either to provide compensation that is exempt from Section 409A of the Code, or that satisfies the requirements of Section 409A of the Code so that Participants will not be liable for the payment of additional tax or interest thereunder, and the Plan and all Awards shall be construed accordingly. If and to the extent any amount of compensation under an Award is determined by the Compensation Committee to constitute deferred compensation that is not exempt from Section 409A of the Code and that is to be paid, settled or provided by reason of a Participant’s termination of employment, then (a) such compensation shall be paid, settled or provided by reason of a Participant’s termination of employmentAPPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-21 only if that termination also constitutes a “separation from service” within the meaning of that term under Section 409A of the Code, and (b) if the Participant is determined by the Compensation Committee to be a “specified employee” within the meaning of Section 409A of Code, all payments or provisions compensation that would otherwise be paid, settled or provided before the first day of the seventh calendar month beginning after the date the Participant’s separation from service (or, if earlier, the Participant’s date of death) shall be withheld and accumulated and paid or provided without interest on or as soon as practicable after the first day of the seventh calendar month beginning after the date the Participant’s separation from service (or, if earlier, the Participant’s date of death). Each payment or provision of compensation under an Award shall be treated as a separate payment for purposes of Section 409A of the Code. References to termination of employment and similar concepts in the Plan and Awards Agreements shall be interpreted and applied in accordance with the foregoing provisions. To the extent necessary to comply with Section 409A of the Code, no Award that is a Non-QualifiedNon‑QualifiedStock Option or a Stock Appreciation Right shall contain or be amended to contain a “deferral feature” or an “additional deferral feature” within the meaning and usage of those terms under Section 409A of the Code and the administrative guidance thereunder.21.15 21.15.Delivery and Execution of Electronic Documents. To the extent permitted by Applicable Law, the Company may: (a) deliver by email or other electronic means (including posting on a Web site maintained by the Company or by a third party under contract with the Company) all documents relating to the Plan or any Award thereunder (including prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including annual reports and proxy statements), and (b) permit Participants to electronically execute applicable Plan documents (including Award Agreements and any required notices under the Plan) in a manner prescribed by the Committee.21.16 21.16.Administration of the Plan in Foreign Countries. The Compensation Committee may take any action consistent with the terms of the Plan, either before or after an Award has been granted, which the Compensation Committee deems necessary or advisable in order for the administration of the Plan and the grant of Awards thereunder to comply with the Applicable Laws of any foreign country, including but not limited to, modifying or amending the terms and conditions governing any Awards, modifying exercise procedures and other terms and procedures and establishing local country plans as sub-planssub‑plans to the Plan.21.17 21.17.Effective Date. The Plan shall become effective as of the Effective Date, but only if it has been approvedsubject to approval by the stockholders of the Company within twelve (12) months before or after the date the on which it is adopted by the Board of Directors.21.18 at the 2019 annual meeting of the stockholders on May 23, 2019 (the “Effective Date”). If the stockholders shall fail to approve the Plan at such annual meeting, the Plan as amended and restated herein shall not become effective, and the Plan as in effect immediately prior to the Effective Date shall remain in full force and effect.21.18.Clawback/Recoupment Policy. Notwithstanding any provisions in the Plan or any Award Agreement to the contrary, all Awards and/or amounts payable thereunder, whether in the form of cash or otherwise, shall be subject to potential cancellation, rescission, clawback and recoupment (i) to the extent necessary to comply with the requirements of Section 954 of the Dodd-FrankDodd‑Frank Wall Street Reform and Consumer Protection Act of 2010 and any regulations or listing requirements promulgated thereunder, and/or (ii) as may be required in accordance with the terms of any clawback/recoupment policy as may be adopted by the Company to comply with Section 954 of the Dodd-FrankDodd‑Frank Wall Street Reform and Consumer Protection Act of 2010 and any regulations or listing requirements promulgated thereunder, as such policy may be amended from time to time.-25-APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-22 Table Of ContentsExhibit ADEFINITIONSThe following terms, when used in the Plan, shall have the meanings, and shall be subject to the provisions, set forth below:“Audit Committee” means the Audit Committee of the Board of Directors.“Award” means an award containing any one or more of the following: Option(s), Restricted Stock, Restricted Stock Unit(s) or Stock Appreciation Right(s) granted to a Participant pursuant to the Plan.“Award Agreement” means either: (a) a written or electronic agreement entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award granted under the Plan, including any amendment or modification thereof, or (b) a written or electronic statement issued by the Company to a Participant describing the terms and provisions of such Award, including any amendment or modification thereof. The Committee may provide for the use of electronic, Internet, or other non-papernon‑paper Award Agreements, and the use of electronic, Internet, or other non-papernon‑paper means for the acceptance thereof and actions thereunder by a Participant.“Applicable Laws” means the requirements relating to the administration, enforcement and taxation of Awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any other country, as determined in accordance with Section 21.12.“Board of Directors” means the Board of Directors of the Company.“Cashless Exercise” means the exercise of an Option through (a) the delivery of irrevocable instructions to a broker (i) to make a sale of a number of Shares issuable upon the exercise of the Option that results in proceeds in the amount required to pay the aggregate Option Price for all the shares as to which the Option is being exercised (and any required withholding tax, if authorized by the Compensation Committee) and (ii) to deliver such proceeds to the Company in satisfaction of such aggregate Option Price (and withholding tax obligation, if applicable), or (b) any other surrender to the Company of Shares issuable upon the exercise of the Option or vested Options in satisfaction of such aggregate Option Price (and withholding tax obligation, if applicable).“Cause” means, with respect to any Participant, (a) “cause” as defined in an employmentany of the following: (i) the Participant’s conviction by a court of competent jurisdiction of, or consulting agreement applicable to the Participant, or (b) in the caseentry of a Participant who does not haveplea of guilty or nolo contendere for, an employmentact on the Participant’s part constituting a felony, dishonesty, willful misconduct or consulting agreement that defines “cause”: (i) any act or omission that constitutes a material breachneglect by the Participant of any of his or her employment obligations under any agreement withto the Company that results in material injury to the Company; (ii) appropriation (or an overt act attempting to appropriate) of a material business opportunity of the Company by the Participant; (iii) theft, embezzlement or anyother similar misappropriation of its Subsidiaries; (ii)funds or property of the willful and continuedCompany by the Participant; or (iv) the failure or refusal of the Participant substantially to performfollow the duties required of himreasonable and lawful written instructions or her as an Employee, or performance significantly below the level required or expectedpolicy of the Participant, as determined by the Compensation Committee; (iii) the Participant’s willful misconduct, gross negligence or breach of fiduciary duty that, in each case or in the aggregate, results in material harmCompany with respect to the Company or anyservices to be rendered and the manner of its Subsidiaries; (iv) any willful violationrendering such services by the Participant, of any federal, state or foreign law or regulation applicable to the business of the Company or any of its Subsidiaries, or the Participant’s commission of any felony or other crime involving moral turpitude, or the Participant’s commission of an act of fraud, embezzlement or misappropriation; or (iv) any other misconduct byprovided the Participant that is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company or any of its Subsidiaries. The Compensation Committee shall determine whether there has been given reasonable and specific written notice of such failure and opportunity to cure and no cure has been effected or initiated within a terminationreasonable period of employment for Cause, and each Participant shall agree, by acceptance of the grant of an Award and the execution of an Award Agreement, that the Compensation Committee’s determination is conclusive and binding on all persons for all purposes of the Plan.time, but not less than 90 days, after such notice.APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-23 directors in the office following such election are individuals who were not nominated by a vote of two-thirdstwo‑thirds of the members of the Board of Directors or its nominating committee immediately preceding such election; or (iii) the Company effectuates a complete liquidation or a sale or disposition of all or substantially all of its assets unless immediately following any such sale or disposition of all or substantially all of its assets the individuals who were members of the Board of Directors of the Company immediately prior to such transaction continue to constitute a majority of the Board of Directors or other governing body of the surviving corporation or entity (or, in the case of an acquisition involving a holding company, constitute a majority of the Board of Directors or other governing body of the holding company) for a period of not less than twelve (12) months following the closing of such transaction. A “Takeover Transaction” shall mean (i) a merger or consolidation of the Company with, or an acquisition by the Company of the equity interests or all or substantially all of the assets of, any other corporation or entity, other than a merger, consolidation or acquisition in which the individuals who were members of the Board of Directors of the Company immediately prior to such transaction continue to constitute a majority of the Board of Directors or other governing body of the surviving corporation or entity (or, in the case of an acquisition involving a holding company, constitute a majority of the Board of Directors or other governing body of the holding company) for a period of not less than twelve (12) months following the closing of such transaction, or (ii) one or more occurrences or events as a result of which any individual, entity or group (as such term is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) becomes the “beneficial owner” (as such term is defined in Rule 13d-313d‑3 under the Exchange Act), directly or indirectly, of thirty percent (30%) or more of the combined voting power of the Company’s then outstanding securities.Notwithstanding the foregoing, solely with respect to any Award that is subject to Section 409A of the Code and payable upon a Change in Control, the term “Change in Control” shall mean an event described in one or more of the foregoing provisions of this definition, but only if it also constitutes a “change in control event” within the meaning of Treas. Reg. 1.409A-3(i)1.409A‑3(i)(5).“Code” means the Internal Revenue Code of 1986, as amended, including the rules and regulations promulgated thereunder.“Company” means Newpark Resources, Inc., a Delaware corporation, and any successor.“Compensation Committee” means the Compensation Committee of the Board of Directors.“Date of Grant” means the date of grant of an Award as set forth in the applicable Award Agreement.“Disqualifying Disposition” has the meaning set forth in Section 7.8.3.“Disability” means, with respect to any Participant who has an employment or consulting agreement that defines such term or a similar term, “disability” as defined in such agreement or, in the case of a Participant who does not have an employment or consulting agreement that defines such term or a similar term, the inability of the Participant to perform substantially all his duties as an Employee by reason of illness or incapacity for a period of more than six months, or six months in the aggregate during any 12-month12‑month period, established by medical evidence reasonably satisfactory to the Compensation Committee; provided, however, that in the case of any Award that provides for compensation that is exempt from, or compliant with, Section 409A of the Code, or would be so exempt or compliant if the term “Disability” met the requirements of Treas. Reg. §1.409A-3(i)§1.409A‑3(i)(4), the term “Disability” shall mean a condition in which the Participant, by reason ofAPPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-24 any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, is: (a) unable to engage in any substantial gainful activity; or (b) is receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company and its Subsidiaries.“Effective Date” shall mean April 6, 2015, the date on which this Plan was adopted by the Board of Directors.“Employee” means any person who is employed by the Company or one of its Subsidiaries, provided, however, that the term “Employee” does not include a non-employeenon‑employee director of the Company or an individual performing services for the Company or a Subsidiary who is treated for tax purposes as an independent contractor at the time of performance of the services, whether such person is so employed at the time this Plan is adopted or becomes so employed subsequent to the adoption of this Plan. For purposes of awards of Incentive Stock Options, “Employee” means any person, including an officer, who is so employed by the Company or any “parent corporation” or “subsidiary corporation” of the Company as defined in Sections 424(e) and 424(f) of the Code, respectively. An Employee shall not cease to be an Employee in the case of (a) any leave of absence approved by the Company, or (b) transfers between locations of the Company or between the Company, any of its Subsidiaries or any successor.“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.���“Fair Market Value” means, as of any given date, the value of a share of Common Stock determined as follows:(a)If the Common Stock is listed on an established stock exchange or a national market system, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported), as quoted on the principal exchange or system on which the Common Stock is then traded and as reported in The Wall Street Journal or such other source as the Compensation Committee deems reliable, on such date or, if such date is not a trading day, on the trading day immediately preceding such date;(b)If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock, as reported in The Wall Street Journal or such other source as the Compensation Committee deems reliable, on such date or, if such date is not a trading day, on the trading day immediately preceding such date; or(c)In all other cases, the “fair market value” as determined by the Compensation Committee in good faith and using such financial sources as it deems relevant and reliable (but in any event not less than fair market value within the meaning of Section 409A of the Code).“Good Reason” means any of the following: (i) the Company (or its successor) adversely changes the Participant’s title or changes in any material respect the responsibilities, authority or status of the Participant without prior notice and acceptance; (ii) the substantial or material failure of the Company (or its successor) to comply with its obligations under the Plan or any other agreement that may be in effect that is not remedied within a reasonable time after specific written notice thereof by the Participant to the Company; (iii) the diminution of the Participant’s base salary; and (iv) requiring the Participant to relocate more than 50 miles from his or her location of employment immediately prior to the Change in Control. However, Good Reason shall only exist in the prior (i) through (iv) if the Participant has given reasonable and specific writtenAPPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-25 notice to the Chief Executive Officer of such failure, the Company has been given a reasonable opportunity to cure, and no cure has been effected or initiated within a reasonable time after such notice.“Incentive Stock Option” means an Option which qualifies as an “incentive stock option” under Section 422 of the Code and is designated as an Incentive Stock Option by the Compensation Committee. For avoidance of doubt, no Option awarded under the Plan will be an Incentive Stock Option unless the Compensation Committee expressly provides for Incentive Stock Option treatment in the applicable Award Agreement.“Non-QualifiedNon‑Qualified Stock Option” means an Option which is not an “incentive stock option” under Section 422 of the Code and includes any Option which is not designated as an Incentive Stock Option by the Compensation Committee.“Option” means a right to purchase Shares upon payment of the Option Price.“Option Price” means the purchase price per Share deliverable upon the exercise of an Option in order for the Option (or applicable portion thereof) to be exchanged for Shares.“Other Stock-BasedStock‑Based Awards” has the meaning set forth in Section 11.“Participant” means any Employee who has been granted an Award.“Performance Criteria” has the meaning set forth in Section 12.1 of the Plan.“Performance Period” has the meaning set forth in Section 12.4 of the Plan.“Plan” means the Newpark Resources, Inc. 2015 Employee Equity Incentive Plan.Plan, as originally adopted by the Board of Directors on April 6, 2015, subject to the approval by the Company’s stockholders at the Company’s annual meeting on May 22, 2015 (which approval was obtained), as amended from time to time thereafter, and as amended and restated herein as of the Effective Date.A-4Table Of Contents“Restricted Stock Unit” means a right granted to a Participant under Section 9 to receive Shares upon the satisfaction of Performance Criteria or other criteria specified by the Compensation Committee, such as continuous service, at the end of a specified Restriction Period.“Restriction Period” means the period or periods during which any forfeiture or vesting restrictions, restrictions on transferability or other restrictions shall apply to any Award, as determined by the Compensation Committee in its discretion, consistent with the provisions of the Plan.“Rule 16b-316b‑3” means Rule 16b-316b‑3 of the Exchange Act or any successor to Rule 16b-3,16b‑3, as in effect when discretion is being exercised with respect to the Plan.“SAR Settlement Value” has the meaning set forth in Section 10.2.“Section 16(b) Insider” means an officer or director of the Company or any other person whose transactions in the Company’s Common Stock are subject to Section 16 of the Exchange Act.“Section 162(m)” means Section 162(m) of the Code and the regulations promulgated thereunder.APPENDIX A - AMENDED AND RESTATED PLAN 2019 Proxy Statement | A-26 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.“Shares” means shares of the Company’s Common Stock reserved for issuance under the Plan, as adjusted pursuant to Section 15, and any successor security.“Stock Appreciation Right” means a right granted to a Participant under Section 10 that entitles the Participant to receive a payment in Shares, cash or a combination thereof measured by the increase in the Fair Market Value of a Share over the exercise price of the Stock Appreciation Right, as established by the Compensation Committee on the Date of Grant.“Subsidiary” means any “subsidiary” within the meaning of Rule 405 under the Securities Act; provided, however, for purposes of Awards of Incentive Stock Options, “Subsidiary” means any entity that is a subsidiary of the Company within the meaning of Section 424(f) of the Code, and for purposes of Awards of Non-QualifiedNon‑QualifiedStock Options, “Subsidiary” means a corporation or other entity in an chain of corporations and/or other entities in which the Company has a “controlling interest” within the meaning of Treas. Reg. 1.414(c)-2(b)‑2(b)(2)(i), but using the threshold of 50% ownership wherever 80% appears.A-5 Table Of ContentsCERTIFICATE OF AMENDMENTTO THERESTATED CERTIFICATE OF INCORPORATIONOFNEWPARK RESOURCES, INC.Newpark Resources, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies as follows:FIRST: The name of the Corporation is Newpark Resources, Inc. The Restated Certificate of Incorporation of the Corporation was filed with the Delaware Secretary of State’s Office on November 5, 1998.SECOND:This Certificate of Amendment to the Restated Certificate of Incorporation of the Corporation was duly adopted in accordance with Section 242 of the DGCL. The Board of Directors duly adopted resolutions setting forth and declaring advisable this Certificate of Amendment to the Restated Certificate of Incorporation of the Corporation and directed that the proposed amendment be considered by the stockholders of the Corporation. The proposed amendment was considered at the annual meeting of stockholders duly called upon notice in accordance with Section 222 of the DGCL and held on May 19, 2016, at which meeting the necessary number of shares were voted in favor of the proposed amendment. The stockholders of the Corporation duly adopted this Certificate of Amendment to the Restated Certificate of Incorporation of the Corporation.THIRD: Article SEVENTH of the Restated Certificate of Incorporation is hereby amended by deleting all of Paragraph B of Article SEVENTH and replacing it with the following in substitution therefor:“B. NoAny director may be removed from officeexcept for cause, and except,with or without cause, only upon the vote or written consent of stockholders representing not less than two-thirds (2/3) of the issued and outstanding capital stock of each class then entitled to vote in elections of directors.”FOURTH: This Certificate of Amendment to the Restated Certificate of Incorporation shall become effective on the date this Certificate of Amendment to the Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware.IN WITNESS WHEREOF, this Certificate of Amendment to the Restated Certificate of Incorporation has been executed for and on behalf of the Corporation by an officer thereunto duly authorized and attested to as of______________, 2016.NEWPARK RESOURCES, INC.APPENDIX A - AMENDED AND RESTATED PLAN By:Name:Title:2019 Proxy Statement | A-27 
