DEF 14A of Empire Petroleum Corp
Filed Apr 30, 2025 · FY20240001072613-25-000315
To Be Held June 12, 2025
| Proposal 1 — Election of Directors Page 4 | | | 4 | Nominees for Directors | | 7 | Corporate Governance | | 18 | Director Compensation |
To Be Held June 12, 2025
| Questions and Answers | 1 | | Principal Stockholders and Security Ownership of Management | 13 | | Equity Compensation Plan Information | 19 | | Certain Relationships and Related Transactions | 21 | | Delinquent Section 16(a) Reports | 23 | | Other Matters | 24 | | Matters Which May Come Before the Annual Meeting | 24 | | Annual Report on Form 10-K | 24 | | Notice Regarding Availability of Proxy Materials | 24 |
Nominees for Directors
Nominees for Directors Set forth below is information with respect to each nominee for director, including information they have furnished as to their principal occupation or employment for the past five or more years and certain other directorships held. Each nominee’s information below also includes a summary of each individual’s experience, qualifications, attributes and skills that have led to the conclusion that such individual should serve as a director. In addition to the specific experiences, qualifications, attributes and/or skills set forth below, in the view of the Board of Directors, each nominee generally has attained a position of leadership in his or her field of endeavor; possesses corporate governance experience, business or financial expertise, integrity, objectivity and sound business judgment; has a commitment to serve the interests of all stockholders; and has the ability to develop a good working relationship with other Board members and contribute to the Board’s working relationship with senior management of Empire. See “—Corporate Governance—Consideration of Director Nominees” below for additional information regarding director nominees and the nominating process.
Nominees for Directors
| Michael R. Morrisett, age 61 President, Chief Executive Officer and Director | • Chief Executive Officer of Empire since March 2023 and President and a Director of Empire since January 2015. Principal financial officer of Empire since May 2024 and from January 2015 to April 2023. • Over 25 years of experience in investment banking and considerable experience in the management of non-operated oil and gas properties. • Served Total Energy Partners Funds, an investment fund engaged in the ownership of non-operated oil and gas working interests, in several capacities, including as a partner, from 2012 to 2018. • Prior to 2013, served in various executive capacities at investment banking firms and private companies in the oil and gas industry. • Mr. Morrisett provides the Board more than 25 years of significant knowledge and experience in the oil and gas industry and executive level experience. As President and Chief Executive Officer, he has extensive knowledge of our day-to-day operations, which facilitates the Board’s oversight of management’s strategy, planning and performance. In addition, he is a valuable contributor of financial, accounting and risk management expertise to the Board. Mr. Morrisett has provided the strategic vision which has resulted in Empire’s significant growth. |
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| Vice Admiral Andrew L. Lewis, USN, Ret., age 62 Director since April 2022 | • Distinguished 36-year military career until his retirement in 2021 serving as Deputy Chief of Naval Operations, Plans and Strategy, vice director for Operations, and director of Fleet Training at Fleet Forces Command. • Commander of the United States Second Fleet Carrier Strike Group and NATO Joint Force Command Norfolk. • Former Senior Vice President of Policy and Projects for Business Executives for National Security, a non-profit that works with business executives and leaders in the federal government’s national security enterprise to apply best business practices in addressing the nations’ most pressing security challenges. • 1985 Graduate of the U.S. Naval Academy. • Vice-Admiral Lewis (Ret.) brings to the Board significant leadership and operational experience, as well as the military equivalent of successful start-up company experience. His executive-level experience in complex organizations and extensive experience with government relations and public policy allow him to be a valuable contributor to the Board as Empire pursues its strategic growth plans. | | J. Kevin Vann, age 53 Director since April 2023 | • Chief Financial Officer of Helmerich & Payne, Inc., a publicly traded company that designs, fabricates and operates high-performance drilling rigs in conventional and unconventional plays around the world, since August 2024. • Vice President, Finance/Strategic Planning of Empire from October 2022 to April 2023. • Executive Vice President and Chief Financial Officer of WPX Energy Inc. (“WPX”), a publicly traded oil and gas exploration and production company, from February 2018 until its merger with Devon Energy Corporation in 2021. • Senior Vice President and Chief Financial Officer of WPX from March 2014 to February 2018 and as Treasurer of WPX from September 2014 to November 2014 and from November 2018 until February 2020. • Vice President, Chief Accounting Officer and Controller of WPX from December 2011 to March 2014. • Controller for the exploration and production business unit of The Williams Companies, Inc. from June 2007 until December 2011. • Controller for Williams Power Company from 2006 to 2007 and Director of Enterprise Risk Management for Williams from 2002 to 2006. • A director of Apco Oil and Gas International Inc. from 2014 to 2015. • Bachelor’s Degree in Accounting from Oklahoma State University. • Member of the Cherokee Nation. • Mr. Vann provides the Board with extensive accounting and financial expertise in the oil and gas industry as well as risk management experience. His experience in finance and accounting positions qualifies him as an audit committee financial expert as defined by the SEC. |
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| Phil E. Mulacek, age 64 Chairman of the Board and Director since October 2021 | • Proven track record of over 35 years in global oil and gas and LNG development, led the discovery of 1.6 billion barrels of oil equivalent in Papua New Guinea. • Founder of private investment company, Petroleum Independent and Exploration Corporation, established in 1981, with extensive interests in U.S. oil and gas royalty mineral acreage. • Founder and former Chairman and Chief Executive Officer of NYSE-listed InterOil Corporation; retired in 2013. Led growth of market cap of InterOil from $10 million to over $5.6 billion during 14-year tenure. • Bachelor of Science in Petroleum Engineering from Texas Tech University. • Mr. Mulacek brings to the Board extensive executive leadership experience and extensive experience in all aspects of upstream development in drilling, completion and production in North America and other regions around the world. His experience in building and growing oil and gas companies and operational expertise and vision allow him to be a valuable contributor to the Board. | | Benjamin J. Marchive II, age 45 Director since October 2021 | • Over 20 years of oil and gas industry experience, mainly in the Gulf of Mexico and along the Gulf Coast. • Executive Vice President of Spectrum Energy Co., an oil and gas company, since February 2024. • From 2018 to 2024, served as Senior Vice President-Land & Business Development for Cox Operating, LLC, an oil and gas company, after its merger with Energy XXI, an oil and gas company, where he served as VP of Land and held similar positions from 2006 to 2018. Began his career as a Landman at Apache Corporation in 2003. • Board Member of the Outer Continental Shelf Advisory Board, focused on financial assurance requirements, and Executive Board Member on the Louisiana Oil and Gas Board. • Bachelor’s degree in Petroleum Land and Resource Management from University of Louisiana – Lafayette. • Mr. Marchive’s industry experience in the acquisition, exploration and development of oil and gas properties, especially in areas where Empire currently operates, allows him to be a valuable and resourceful member of the Board. | | Mason H. Matschke, age 62 Director since April 2021 | • Partner and Chief Compliance Officer of Energy Evolution Master Fund, Ltd., an energy fund focused on investing in oil and gas assets as well as companies that will benefit in a transition to a low-carbon and alternative energy environment, since 2021. • Prior to joining the Energy Evolution Fund, served as Senior Vice President of Investments at Raymond James, a financial services firm, from 2007 to 2020. Served as a Senior Vice President at Jeffries from 2006 to 2008 and at UBS from 1997 to 2006. • Mr. Matschke brings to the Board 35 years of experience focused on portfolio management and research across multiple sectors, a deep background as a derivatives strategist and experience in commodity and equity trading. He also brings compliance and regulatory expertise to the Board. |
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| CORPORATE GOVERNANCE |
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Empire has a Code of Business Conduct and Ethics for directors, officers (including the chief executive officer, principal financial officer and principal accounting officer) and employees. The Code of Business Conduct and Ethics is available on our website at https://empirepetroleumcorp.com under the “Investor Relations-Corporate Governance” caption, and a copy of this document may also be obtained in print by any stockholder upon request from our corporate secretary. If we amend or waive the Code of Business Conduct and Ethics with respect to the chief executive officer, principal financial officer or principal accounting officer, we will post the amendment or waiver at the same location on our website. Director Independence. Under the corporate governance standards of the NYSE American, generally, a director does not qualify as independent if the director (or in some cases, members of the director’s immediate family) has, or in the past three years has had, certain relationships or affiliations with the Company, the Company’s auditors or other companies that do business with the Company. The Board of Directors has determined that all of the Company’s directors, except Mr. Morrisett, are independent under the NYSE American standards. In determining the independence of Mr. Mulacek, the Board considered his transactions with the Company described below under the heading “Certain Relationships and Related Transactions.” The Board determined that none of the independent directors has any material relationship with the Company that could impair such individual’s independence. Mr. Morrisett is not considered to be an independent director because of his employment as an executive officer of the Company. Board Meetings and Attendance. The Board held four meetings during the year ended December 31, 2024. During that year, each of our directors attended at least 75 percent of the aggregate number of Board meetings and meetings held by all committees on which he then served. In addition, the Board of Directors took action 15 times during 2024 by unanimous written consent. Director Attendance at Annual Meeting of Stockholders. Each director is encouraged to participate in our annual meetings of stockholders. Each of our directors then serving attended our 2024 annual meeting of stockholders. Board Leadership Structure and Role in Risk Oversight. We currently separate the offices of chairman of the Board and chief executive officer. We believe the separation of the roles of chairman of the Board and chief executive officer provides strong leadership for our Board, while positioning our chief executive officer as the leader of the Company in the eyes of our customers, employees and other stakeholders. Our Board of Directors has five independent members and only one non-independent member. A number of our independent board members are currently serving or have served as members of senior management of other companies. Our Audit and Compensation Committees are comprised solely of independent directors, each with a different independent director serving as chair of the committee. We believe that the number of independent, experienced directors that make up our Board of Directors, along with the independent oversight of the Board by the non-executive chairman, benefits our Company and our stockholders. The Audit Committee is responsible for overseeing our risk management processes on behalf of the Board of Directors. The Audit Committee receives reports from management regarding our assessment of risks. In addition, the Audit Committee as well as the Board of Directors focuses on the most significant risks facing us and our general risk management strategy, and also ensures that risks undertaken by us are consistent with the Board of Directors’ determination of the appropriate level of risk for the Company. While the Board of Directors oversees our risk management, our management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach to address the risks facing our Company and our Board leadership structure supports this approach. Board Committees. The Board of Directors has a standing Audit Committee and Compensation Committee. Each of these committees has a written charter, which is available on our website at https://empirepetroleumcorp.com under the “Investor Relations - Corporate Governance” caption. The Board of Directors also has an Operations Committee. Each of the current members of each of the committees qualifies as an “independent” director under the corporate governance standards of the NYSE American. The table shows the current membership of the committees and identifies our independent directors serving on each committee:
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| Name | Michael R. Morrisett | Phil E. Mulacek | Benjamin J. Marchive II | Mason H. Matschke | Andrew L. Lewis | J. Kevin Vann | | Audit | | | | X | X | X* | | Compensation | | X* | | X | | | | Operations | | X* | X | | | | | Independent Directors | | X | X | X | X | X |
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* Denotes Committee Chairman. Audit Committee. The Board has determined that Mr. Vann qualifies as an “audit committee financial expert” as defined by the SEC and that both Messrs. Matschke and Lewis are able to read and understand fundamental financial statements and are financially sophisticated as contemplated under the rules of the NYSE American. The Audit Committee assists the Board of Directors in fulfilling its responsibilities by providing oversight relating to:
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| • | the integrity of our financial statements; |
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| • | our systems of internal control over financial reporting and disclosure controls and procedures; |
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| • | the engagement, compensation, independence and performance of our independent registered public accounting firm and their conduct of the annual audit of our financial statements and any other audit, review or attestation engagement; |
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| • | our risk profile, including financial and non-financial risks; |
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| • | compliance with our financial and risk management policies; |
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| • | our legal and regulatory compliance; |
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| • | approval of any related person transactions; and |
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| • | the application of our Code of Business Conduct and Ethics. |
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A more detailed description of the Audit Committee’s responsibilities can be found in its charter. The Audit Committee held four meetings during 2024. Compensation Committee. The Compensation Committee reviews and takes action for and on behalf of the Board of Directors with respect to management compensation policies and practices, including:
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| • | reviewing and approving or recommending to the independent members of the Board for approval the compensation for our chief executive officer; |
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| • | determining and approving or recommending to the Board for approval the compensation for our other executive officers; |
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| • | reviewing and approving management incentive compensation policies and programs; and |
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| • | administering our equity incentive plan. |
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In addition, the Compensation Committee recommends the form and amount of non-employee director compensation to the Board of Directors, and the Board of Directors makes the final determination. The Compensation Committee has authority under its charter to obtain advice and seek assistance from compensation consultants and from internal and outside legal, accounting and other advisors. The Committee has not retained a compensation consultant. In considering and recommending the compensation of non-employee directors, the Compensation Committee may consider such factors as it deems appropriate, including historical compensation, level of compensation necessary to attract and retain non-employee directors meeting our desired qualifications and market data. Regarding executive officer compensation, our President and Chief Executive Officer develops preliminary recommendations regarding salary adjustments and annual and long-term award amounts and provides these recommendations to the Committee. The Committee and/or the Board make the final decision and can exercise their discretion in modifying any recommendation. The Compensation Committee has discretion under its charter to form and delegate some or all of its authority to subcommittees composed entirely of independent directors. During 2024, the Compensation Committee did not form or utilize a subcommittee. The Compensation Committee held four meetings during 2024. Operations Committee. The Operations Committee assists the Board of Directors in overseeing (a) our oil and gas operations, the vision and supervision of the operational growth of production and core strategies for superior growth for Empire stockholders, and our performance and risks associated with health, safety and environmental matters, and (b) the determination of our oil, natural gas and natural gas liquids reserves and the work of our independent petroleum engineering firm. The Operations Committee held numerous meetings during 2024. Consideration of Director Nominees. The Board does not have a Nominating Committee. As such, the independent directors of the Board (the “Independent Directors”) participate in the consideration of director nominees and recommend for the Board’s selection the director nominees. The Independent Directors will consider director candidates submitted to them by other directors, employees and stockholders. The Independent Directors may engage professional search firms to assist them in identifying and evaluating potential candidates. Any stockholder recommendations of candidates proposed for consideration by the Independent Directors should include the candidate’s name and qualifications for director, reasons for the recommendation and the candidate’s written consent to being considered as a director nominee and should be addressed to: Attention: Independent Directors, c/o Secretary, 2200 S. Utica Place, Suite 150, Tulsa, Oklahoma 74114. The Independent Directors may require the stockholder submitting the recommendation or the recommended candidate to furnish such other information as the Independent Directors may reasonably request. In addition, as described below, our Amended and Restated Bylaws provide a process for stockholders to nominate directors for consideration at a meeting of stockholders. In considering prospective nominees for the Board, the Independent Directors will endeavor to find individuals of high integrity who have a solid record of accomplishment in their chosen fields and who possess the qualifications, qualities and skills to effectively represent the best interests of all stockholders. Candidates are selected for their ability to exercise good judgment and provide practical insights and diverse perspectives. The Independent Directors consider the following qualifications at a minimum to be required in recommending to the Board potential new Board members or the continued service of existing members:
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| • | an attained position of leadership in the candidate’s field of endeavor; |
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| • | business and/or financial expertise; |
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| • | integrity; |
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| • | objectivity; |
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| • | demonstrated exercise of sound business judgment; |
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| • | expertise relevant to our lines of business; |
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| • | corporate governance experience; |
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| • | ability to serve the interests of all stockholders; |
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| • | ability to devote the time, energy and attention as may be necessary to properly discharge his or her responsibilities as a director; and |
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| • | independence; at least 50% of the Board shall consist of independent directors, as defined in the rules of the NYSE American. |
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Other than the foregoing, there are no stated minimum criteria for director nominees, although the Independent Directors may also consider such other factors as they may deem are in the best interests of Empire and its stockholders. When considering potential nominees for the Board, the Independent Directors will consider the criteria above and each potential nominee’s individual skills and qualifications in context of the current composition of the Board and needs of the Board at such time. In connection therewith, the Independent Directors will consider diversity in professional background, experience, expertise, perspective, age, gender and ethnicity with respect to Board composition as a whole, although the Board does not have a specific diversity policy. With respect to diversity, particular emphasis is placed on identifying candidates whose skills and characteristics complement and augment the make-up of the Board as a whole and the needs of the Board given the circumstances of Empire. If we are legally required by contract or otherwise to provide third parties with the ability to nominate and/or appoint directors (e.g., our Series A Voting Preferred Stock), the selection and nomination of such directors is not subject to the foregoing process. Our Amended and Restated Bylaws permit stockholders to nominate directors for consideration at an annual meeting of stockholders. To nominate a director, stockholders must follow the procedures specified in our Amended and Restated Bylaws that require advance notice and certain other information and requirements. Stockholders must submit the candidate’s name and qualifications in writing to our Secretary at the following address: Secretary, Empire Petroleum Corporation, 2200 S. Utica Place, Suite 150, Tulsa, Oklahoma 74114. The written notice must be received by our Secretary:
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| • | not later than the close of business on the 90th day and not earlier than the close of business on the 120th day prior to the anniversary of the previous year’s annual meeting if such meeting is to be held on a day which is no more than 30 days in advance of the previous year’s annual meeting or not later than 60 days after the anniversary of the previous year’s annual meeting; and |
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| • | with respect to any other annual meeting, including in the event no annual meeting was held in the previous year, not later than the close of business on the later of the 90th day prior to the annual meeting and the 10th day following the day on which public disclosure is first given of the date of the annual meeting, and not earlier than the 120th day prior to the annual meeting. |
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The notice must contain certain information required under our Amended and Restated Bylaws, including, among other things, (i) the nominee’s name, age, business and residential addresses, written consent to being named in the proxy statement and to serving as director if elected, a completed and signed questionnaire, representation and agreement as required by our Amended and Restated Bylaws, and any other information relating to such person as would be required to be disclosed in solicitations of proxies for election of directors pursuant to Section 14(a) under the Securities Exchange Act of 1934 and (ii) with respect to the stockholder submitting the nomination, the name and business addresses of the stockholder, a representation that the stockholder is a record holder of stock entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, and a description of all agreements, arrangements or understandings between or among the stockholder and any other person or persons with respect to the nomination and the class and number of shares of stock beneficially owned by the stockholder. For further information, stockholders may contact our Secretary at our principal executive offices for a copy of the relevant provisions of our Amended and Restated Bylaws. Executive Sessions. Each regularly scheduled meeting of the Board of Directors includes an executive session of the non-management directors. These sessions are chaired by the independent, non-executive chairman of the Board. If our non-management directors include any directors who have been determined not to be independent by the Board, the Board will schedule an executive session of just the independent directors at least once each year. Communications with the Board of Directors. Stockholders who wish to communicate with our Board of Directors or any of its committees may send written communications to: Board of Directors, Empire Petroleum Corporation, 2200 S. Utica Place, Suite 150, Tulsa, Oklahoma 74114. In addition, stockholders and other interested parties may communicate with the chairman of the Board or with the non-management directors as a group by writing to: Chairman of the Board, 2200 S. Utica Place, Suite 150, Tulsa, Oklahoma 74114. Trading, Hedging and Pledging Policies. Our Insider Trading Policy prohibits our directors, officers and employees from purchasing or selling Company stock, derivative securities (such as put and call options) and debt securities while aware of material non-public information about the Company. This policy also prohibits short sales. This policy requires written pre-clearance from the Board of Directors before holding Company securities in a margin account or pledging Company securities as collateral for a loan where the total amount borrowed against any security of the Company exceeds 10 percent of the value of the securities utilized to secure the funds borrowed. This policy does not otherwise prohibit hedging transactions. Further, this policy provides that the Company will not engage in purchases and sales of its securities while aware of material non-public information relating to the Company or its securities. Additionally, the Board of Directors and Compensation Committee do not intend to make equity grants in anticipation of the release of material non-public information about the Company and the Company does not intend to time the release of such information based on equity award grant dates. Clawback Policy. Our Policy for the Recovery of Erroneously Awarded Compensation provides that if the Company is required to prepare an accounting restatement, including to correct an error that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, we must recover from any current or former executive officer incentive-based compensation that was erroneously awarded during the three years preceding the date the restatement was required. The recoverable amount is the amount of incentive-based compensation received in excess of the amount that would have been received had it been determined based on the applicable restated financial measure. Incentive-based compensation is compensation earned based on a financial reporting measure such as revenue, net income or EBITDA. Stock price and total shareholder return are also considered to be financial reporting measures under this policy.
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| PROPOSAL 2 ADVISORY VOTE ON EXECUTIVE COMPENSATION |
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In accordance with Section 14A of the Securities Exchange Act of 1934, we are providing our stockholders the opportunity to approve, on an advisory and non-binding basis, the compensation of our named executive officers as disclosed in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and our compensation objectives, philosophy and practices described in this proxy statement. Our compensation program is designed to, among other things:
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| • | attract, motivate and retain highly-talented executives; |
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| • | link executive compensation to the achievement of our business objectives as well as reinforce appropriate leadership behaviors; and |
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| • | encourage executives to consider the impact of decisions to drive our short-term and long-term success. |
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We believe that our compensation program, with its balance of base salary, short-term and long-term incentives and benefits, fairly accomplishes our objectives. We believe our executive compensation program has allowed our leadership team to be focused on our business objectives and helped us achieve many of our 2024 objectives, including:
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| • | driving more stable and sustainable cash flows through disciplined operations; |
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| • | progressing our growth initiatives through the Starbuck Field enhanced oil recovery program, and targeted recompletions, workovers, and future drilling activity in North Dakota and Texas; |
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| • | improving field-level efficiencies and cost discipline while maintaining a conservative approach to leverage; and |
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| • | building a high-performing team by attracting and retaining top technical talent to fuel long-term value creation. |
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Accordingly, our Board of Directors recommends our stockholders vote in favor of the say-on-pay proposal as set forth in the following resolution: “RESOLVED, that the compensation of the Company’s named executive officers as disclosed in its Proxy Statement for the 2025 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission for smaller reporting companies, including the executive compensation tables and the corresponding narrative discussion, is approved.” This vote is advisory, and therefore non-binding. Stockholders are strongly encouraged to read the accompanying compensation tables and the related narrative disclosure. The Board of Directors and the Compensation Committee expect to take into account the outcome of the vote in connection with their evaluation of our compensation program. At our 2024 annual meeting, the compensation of our named executive officers as disclosed in last year’s proxy statement was approved by approximately 93.8% of the votes cast on the proposal, which demonstrated strong stockholder support for our executive compensation approach. We have provided our stockholders with the opportunity to vote on the compensation to our named executive officers at every annual meeting of stockholders since 2022. As determined by our Board of Directors, we will continue to provide our stockholders with the opportunity to vote on the compensation to our named executive officers at every annual meeting of stockholders until the next required advisory vote at the 2028 annual meeting of stockholders on the frequency of stockholder advisory votes on the compensation of our named executive officers. Our Board of Directors recommends that you vote “FOR” the approval, on an advisory basis, of the compensation of our named executive officers.
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| PROPOSAL 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
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The Audit Committee has appointed Grant Thornton LLP (“Grant Thornton”) as our independent registered public accounting firm (“independent auditor”) for the fiscal year ending December 31, 2025. A proposal will be presented at the Annual Meeting asking the stockholders to ratify the appointment of Grant Thornton as our independent auditor for 2025. If the stockholders do not ratify the appointment of Grant Thornton, the Audit Committee will reconsider the appointment. Even if the appointment is ratified, the Audit Committee, in its sole discretion, may change the appointment at any time during the year if the Audit Committee determines that a change is in the best interests of Empire. A representative of Grant Thornton will be present at the Annual Meeting and will have the opportunity to make a statement, if he or she desires to do so, and respond to appropriate questions. Our Board of Directors recommends a vote “FOR” the ratification of Grant Thornton LLP as our independent auditor for the fiscal year ending December 31, 2025.
Summary Compensation Table
Summary Compensation Table The following table sets forth certain information regarding compensation of our named executive officers for the years ended December 31, 2024 and 2023. Mr. Morrisett was our only executive officer as of December 31, 2024. We have an employment agreement with Mr. Morrisett. For additional information regarding his employment agreement, see “Employment Agreement” below. Mr. Morrisett did not receive any equity awards for 2024 and 2023.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | Michael R. Morrisett President and Chief Executive Officer | 2024 | 260,000 | 205,000 | — | — | — | 10,225(2) | 475,225 | | | 2023 | 260,000 | 260,000 | — | — | — | 21,688(3) | 541,688 |
Summary Compensation Table
| (1) Represents the grant date fair value of awards, if any, computed in accordance with ASC Topic 718, “Compensation – Stock Compensation,” which excludes the effect of estimated forfeitures. The assumptions used to value these awards, if any, are included in Note 10 to our consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024. Any amounts shown do not represent the amounts paid to the executives. |
Summary Compensation Table
| (2) All Other Compensation in 2024 consists of premiums paid for life insurance in the amount of $10,225. |
Summary Compensation Table
| (3) All Other Compensation in 2023 consists of (a) premiums paid for life insurance in the amount of $10,225 and (b) a vehicle allowance. |
Outstanding Equity Awards at Fiscal Year-End 2024
Outstanding Equity Awards at Fiscal Year-End 2024 The following table sets forth certain information regarding outstanding equity awards of our named executive officers as of December 31, 2024.
Outstanding Equity Awards at Fiscal Year-End 2024
| | Option Awards | | | | | Stock Awards | | | | | | Number of Securities Underlying Unexercised Options (#) | Number of Securities Underlying Unexercised Options (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price | Option Expiration | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | | Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($) | (#) | ($) | | Michael R. Morrisett | 589,100 500,000 20,000 10,000 | — — 10,000(1) 20,000(2) | — — — — | 1.32 1.40 11.80 11.80 | 4/2/2029 12/31/2030 8/28/2025 8/28/2026 | — | — | — | — |
Outstanding Equity Awards at Fiscal Year-End 2024
| (1) This option vests as follows: 10,000 shares on February 28, 2025. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (2) This option vests as follows: 10,000 shares on each of February 28, 2025 and 2026. |
Pay Versus Performance
Pay Versus Performance We are required by SEC rules to provide the following information about the relationship between executive compensation actually paid and our financial performance. Pay Versus Performance Table. The following table discloses information on “compensation actually paid” (“CAP”) to our principal executive officer (“PEO”), former PEO (“Former PEO”) and (on average) to our other named executive officers (“non-PEO NEOs”) during the specified years alongside total shareholder return (“TSR”) and net income metrics. The TSR calculation assumes reinvestment of all dividends, if any, and reflects changes in our common share price since the initial investment date of December 31, 2021.
Pay Versus Performance
| | Summary Compensation Table Total for PEO(1) PEO Former PEO | | Compensation Actually Paid to PEO(1)(3) PEO Former PEO | | | | | | | Year | | | | | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(2) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(2)(3) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return | Net Income (Loss) | | 2024 | $475,225 | $ — | $327,443 | $ — | $ — | $ — | $63 | $(16,197,989) | | 2023 | $541,688 | $422,587 | $513,785 | $431,236 | $485,958 | $457,583 | $91 | $(12,469,605) | | 2022 | N/A | $1,401,703 | N/A | $1,467,909 | $893,077 | $990,310 | $102 | $7,084,130 |
Pay Versus Performance
| (1) The PEO for 2024 and 2023 is Michael R. Morrisett who became Chief Executive Officer on March 17, 2023. The Former PEO for each of 2023 and 2022 is Thomas W. Pritchard who resigned as Chief Executive Officer on March 16, 2023. |
Pay Versus Performance
| (2) There were no non-PEO NEOs for 2024. The non-PEO NEOs are Stephen L. Faulkner, Jr. and Eugene J. Sweeney for 2023 and Michael R. Morrisett and Eugene J. Sweeney for 2022. |
Pay Versus Performance
| (3) To calculate CAP for the PEO and Former PEO and average CAP for the non-PEO NEOs, the following amounts were deducted from and added to Summary Compensation Table total compensation: |
Pay Versus Performance
| | PEO | Former PEO | Average non-PEO NEOs | | 2024 Total Compensation as Reported Add (Subtract): | $475,225 | $— | $— | | Fair Value of Awards granted in the year (a) | — | — | — | | Fair Value of Awards granted in the year at year end (b) | — | — | — | | Change in fair value from end of prior fiscal year to end of current fiscal year for Awards made in prior fiscal years that were unvested at the end of the current fiscal year (b) | (74,604) | — | — | | Change in fair value from end of prior fiscal year to vesting date for Awards made in prior fiscal years that vested during the current fiscal year (b) | (73,178) | — | — | | Total Adjustments | (147,782) | — | — | | Compensation Actually paid | $327,443 | $— | $— |
Pay Versus Performance
| (a) Represents the grant date fair value of equity-based awards granted each year. |
Pay Versus Performance
| (b) The fair value or change in fair value of options was determined by reference to a Black-Scholes value as of the applicable year-end or vesting date, determined based on the same methodology as used to determine the grant date fair value but using the closing stock price on the applicable revaluation date as well as the volatility and risk free rates determined as of the revaluation dates based on expected life period. The fair value or change in fair value of other awards was determined using the closing stock price on the applicable revaluation date. |
Pay Versus Performance
Relationship Between Compensation Actually Paid Disclosed in the Pay Versus Performance Table and TSR and our Net Income (Loss).
Pay Versus Performance
| DIRECTOR COMPENSATION |
Pay Versus Performance
Annual compensation for non-employee Board members is as follows (with pro-rata adjustments based on date of service as necessary):
Pay Versus Performance
| • | Non-employee Board members receive an annual cash retainer of $80,000; |
Pay Versus Performance
| • | Chairman of the Board, if a non-employee director, receives an additional quarterly cash retainer of $9,000; |
Pay Versus Performance
| • | Non-employee Board members receive a quarterly cash retainer of $3,000 for each committee they serve on; |
Pay Versus Performance
| • | Non-employee Board members receive a quarterly cash retainer of $2,500 for in person Board meetings that occur during a quarter; and |
Pay Versus Performance
| • | Non-employee Board members receive restricted stock units for up to 10,000 shares of our Common Stock. This annual equity award is for services from June to the following June in order to coincide with the annual meeting of stockholders held in June of each year. |
Pay Versus Performance
We reimburse all directors for out-of-pocket expenses in connection with attending Board and committee meetings. We do not pay our employees who serve on the Board of Directors any additional compensation for Board membership.
Director Compensation Table for 2024
Director Compensation Table for 2024 The following table sets forth a summary of the compensation earned, paid or awarded to our non-employee directors for the year ended December 31, 2024. Mr. Mulacek, Chairman of the Board, waived for 2024 his additional quarterly cash retainer for serving as Chairman of the Board. The non-employee directors did not receive any equity awards during 2024.
Director Compensation Table for 2024
| Name (1) | Fees Earned or Paid in Cash ($)(2) | Stock Awards ($)(3) | Option Awards ($)(3) | All Other Compensation ($) | Total ($) | | Andrew L. Lewis | 99,500 | — | — | — | 99,500 | | Benjamin J. Marchive II | 99,500 | — | — | — | 99,500 | | Mason H. Matschke | 111,500 | — | — | — | 111,500 | | Phil E. Mulacek | 111,500 | — | — | — | 111,500 | | J. Kevin Vann | 97,000 | — | — | — | 97,000 |
Director Compensation Table for 2024
| (1) This table excludes Mr. Morrisett who was an officer and employee of the Company during 2024 and thus received no compensation for service as a director during 2024. The compensation received by Mr. Morrisett as an officer and employee is shown in the Summary Compensation Table above. |
Director Compensation Table for 2024
| (2) These amounts represent annual and quarterly retainer fees for non-employee directors. |
Director Compensation Table for 2024
| (3) These amounts, if any, represent the grant date fair value computed in accordance with ASC Topic 718, “Compensation – Stock Compensation,” which excludes the effect of estimated forfeitures. Restricted stock units are subject to forfeiture provisions, which generally lapse 13 months after the date of the grant. Stock options generally vest in four equal quarterly installments beginning with the first quarter after the date of the grant. The assumptions used to value these stock awards and stock options, if any, are included in Note 10 to our consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024. Any amounts shown do not represent amounts paid to the directors. As of December 31, 2024, each director had outstanding stock options with an exercise price of $11.83 per share for the following aggregate number of shares: Andrew L. Lewis: 40,000; Benjamin J. Marchive II: 40,000; Mason H. Matschke 40,000; Phil E. Mulacek: 40,000; and J. Kevin Vann: 40,000. |
Director Compensation Table for 2024
| EQUITY COMPENSATION PLAN INFORMATION |
Director Compensation Table for 2024
The following table provides information as of December 31, 2024, concerning shares of our Common Stock authorized for issuance under our existing equity compensation plans. On April 3, 2019, the Board of Directors adopted the Empire Petroleum Corporation 2019 Stock Option Plan (the “2019 Incentive Plan”). The total number of shares of our Common Stock that may be issued pursuant to stock options under the 2019 Incentive Plan is 2,500,000. Further, on April 3, 2019, the Company granted Mr. Morrisett and our former Chief Executive Officer each options to purchase 625,000 shares of our Common Stock at an exercise price of $1.32 per share. On December 31, 2020, the Company granted certain members of management and a member of the Board of Directors options to purchase 1,250,000 shares of our Common Stock at an exercise price of $1.40 per share. As of December 31, 2024, all of the outstanding options under the 2019 Incentive Plan were vested and expire in April 2029 or December 2030. As a result of the adoption of the Empire Petroleum Corporation 2021 Stock and Incentive Compensation Plan (the “2021 Incentive Plan”), no further grants will be made under the 2019 Incentive Plan. On August 27, 2021, the Board of Directors adopted the 2021 Incentive Plan, which was subsequently approved by stockholders of the Company. The total number of shares of our Common Stock that may be issued pursuant to the 2021 Incentive Plan is 750,000. As a result of the adoption of the Empire Petroleum Corporation 2022 Stock and Incentive Compensation Plan (the “2022 Incentive Plan”), no further grants will be made under the 2021 Incentive Plan. On June 30, 2022, the Board of Directors adopted the 2022 Incentive Plan, which was subsequently approved by the stockholders of the Company on August 26, 2022. The total number of shares of our Common Stock that may be issued pursuant to the 2022 Incentive Plan is 750,000. As a result of the adoption of the Empire Petroleum Corporation 2023 Stock and Incentive Compensation Plan (the “2023 Incentive Plan”), no further grants will be made under the 2022 Incentive Plan. On April 24, 2023, the Board of Directors adopted the 2023 Incentive Plan, which was subsequently approved by the stockholders of the Company on June 9, 2023. The total number of shares of our Common Stock that may be issued pursuant to the 2023 Incentive Plan is 700,000. As a result of the adoption of the Empire Petroleum Corporation 2024 Stock and Incentive Compensation Plan (the “2024 Incentive Plan”), no further grants will be made under the 2023 Incentive Plan. On April 25, 2024, the Board of Directors adopted the 2024 Incentive Plan, which was subsequently approved by the stockholders of the Company on June 14, 2024. The total number of shares of our Common Stock that may be issued pursuant to the 2024 Incentive Plan is 700,000.
Director Compensation Table for 2024
| Plan Category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a)) | | 2019 Incentive Plan: Equity compensation plans not approved by security holders | 1,089,100 | $1.36 | — | | 2024 Incentive Plan, 2023 Incentive Plan, 2022 Incentive Plan and 2021 Incentive Plan: Equity compensation plans approved by security holders | 1,055,389 (1) | $9.38 (1) | 486,465 (2) | | Total | 2,144,489 | | 486,465 |
Director Compensation Table for 2024
| (1) Includes 258,639 shares issuable upon vesting or settlement of restricted stock units, which units have no exercise price. The weighted average exercise price does not take these restricted stock units into account. |
Director Compensation Table for 2024
| (2) Represents shares of our Common Stock available for issuance under the 2024 Incentive Plan pursuant to stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares or units, cash-based awards and other stock-based awards. All of these shares may be awarded as restricted stock, restricted stock units, performance shares or units, cash-based awards and other stock-based awards. |
Director Compensation Table for 2024
| REPORT OF THE AUDIT COMMITTEE |
Director Compensation Table for 2024
The Audit Committee assists the Board of Directors in its responsibilities for the general oversight of the integrity of our financial statements and our financial reporting process, including our system of internal control over financial reporting. Management has the primary responsibility for the financial statements and the financial reporting process, including our system of internal controls. Our independent registered public accounting firm, Grant Thornton LLP (“Grant Thornton”), is responsible for performing an independent audit of our financial statements in accordance with the Public Company Accounting Oversight Board standards and to issue a report thereon. The Audit Committee monitors these processes. In the performance of its oversight function, the Audit Committee has reviewed and discussed our audited consolidated financial statements as of and for the fiscal year ended December 31, 2024 with management and with Grant Thornton. In this context, the Audit Committee has discussed with Grant Thornton the matters required to be discussed by Auditing Standard 1301, “Communications with Audit Committees,” issued by the Public Company Accounting Oversight Board. The Audit Committee has received from Grant Thornton the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and has discussed with Grant Thornton its independence. Based on its review of the audited consolidated financial statements and the various discussions noted above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements as of and for the fiscal year ended December 31, 2024 be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for filing with the Securities and Exchange Commission.
Director Compensation Table for 2024
| THE AUDIT COMMITTEE | | J. Kevin Vann, Chairman | | Mason H. Matschke | | Andrew L. Lewis |
Director Compensation Table for 2024
| CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS |