DEF 14A of Northern Oil & Gas, Inc., Apr 11, 2024

DEF 14A of Northern Oil & Gas, Inc.

Filed Apr 11, 2024 · FY20230001104485-24-000105

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS Our Board of Directors is responsible for overseeing the management of the business and affairs of our company as provided by Delaware law. Directors are elected each year at the annual meeting by our stockholders. We do not have a classified Board of Directors. Eight directors will be elected at this year’s meeting. Each director’s term will last until the 2025 Annual Meeting of Stockholders and until he or she is succeeded by another qualified director who has been elected. All the nominees are currently directors of our company. There are no familial relationships between any of our directors and executive officers.

  2. Directors and Director Nominees

    Directors and Director Nominees If a nominee is unavailable for election, the proxy holders may vote for another nominee proposed by the Board of Directors or the Board may reduce the number of directors to be elected at the meeting. Set forth below is information furnished with respect to each current director and nominee for election as a director.

  3. Directors and Director Nominees

    | Name | Age | Position(s) | | Bahram Akradi | 62 | Director, Chairperson of the Board of Directors | | Lisa Bromiley | 51 | Director | | Roy “Ernie” Easley | 65 | Director | | Michael Frantz | 39 | Director | | William Kimble | 64 | Director | | Jack King | 72 | Director | | Stuart Lasher | 64 | Director | | Jennifer Pomerantz | 44 | Director |

  4. Directors and Director Nominees

    Director Nominees Mr. Akradi has served as a director since July 2017, was appointed lead independent director of our company in December 2017, and was appointed non-executive Chairperson of the Board of Directors in January 2018. Mr. Akradi founded Life Time, Inc. (formerly Life Time Fitness, Inc.) in 1992 and has served as its Chairman of the Board and Chief Executive Officer since May 1996. When Life Time was taken private in 2015, Mr. Akradi became Chairman of the Board and Chief Executive Officer of Life Time Group Holdings, Inc. (formerly LTF Holdings, Inc.), the parent entity to Life Time, Inc. Life Time Group Holdings, Inc. (NYSE: LTH) completed its initial public offering in October 2021 and Mr. Akradi continues to serve as its Chairman of the Board and Chief Executive Officer. In connection with the initial public offering, Mr. Akradi was also appointed to serve on the Compensation Committee and chair the Nominating and Corporate Governance Committee of the Board of Directors of Life Time Group Holdings, Inc. Mr. Akradi also chairs the Capital Allocation Committee of the Board of Directors of Life Time Group Holdings, Inc. Ms. Bromiley has served as a director since September 2007. Ms. Bromiley has served as the Chief Financial Officer of Cemvita, Inc. since December 2023, which is a leading sustainable alternative energy provider. Previously, she served as the Chief Financial Officer of Fortify Energy Holdings, LLC starting in May 2022. Prior to that she served as the Executive Vice President and Chief Financial Officer of North Shore Steel, a metals manufacturer and distributor, starting in October 2021. Prior to that, Ms. Bromiley served as the Chief Financial Officer of Aviva Metals, Inc., a multinational metals manufacturer and distributor, from June 2019 to October 2021. Prior to that, Ms. Bromiley served as the Chief Financial Officer of BioUrja Group, a privately-held group of companies focused on global commodity trading in 2018 and 2019. Ms. Bromiley has served as the Chief Financial Officer for two public companies, Flotek Industries, Inc. and Platinum Energy Resources, Inc. Earlier in her career, Ms. Bromiley worked in the energy audit practice of PricewaterhouseCoopers, LLP and worked for two Fortune 500 companies. Ms. Bromiley has served in various accounting, finance, SEC reporting and risk management positions. Ms. Bromiley is a Certified Public Accountant and holds B.B.A. and Masters of Accountancy degrees from the University of Texas in Austin. Mr. Easley has served as a director since June 2018 and has served as Senior Vice President – Exploration and Development at CH4 Energy since November 2017. Previously, Mr. Easley has served in various roles, including all aspects of exploration & development and managing multi-disciplinary functions including land, reservoir, and drilling and completions professionals, at companies including BOPCO, L.P. (Vice President - Exploration and Development, from August 2012 to August 2017), Hunt Oil Company, Chieftain International, Tana Oil and Gas Corporation and Exxon Company, U.S.A. Mr. Easley has also been directly involved in the acquisition, development and divestiture of several large exploration projects in the United States. Mr. Easley currently serves on the Board of Directors of Blue Bell Creameries, Inc. and previously served on the Board of Directors of GreenHunter Resources, Inc. from 2012 to April 2016. Mr. Easley holds a Bachelor of Science in Geological Sciences from the University of Texas at Austin. Mr. Frantz has served as a director since August 2016 and has served as the Director, Investments of TRT Holdings, Inc. (“TRT Holdings”) a diversified private holding company based in Dallas, Texas, since February 2010. Mr. Frantz is the head of TRT Holdings investment team which is responsible for sourcing, due diligence and the management of new and existing investment opportunities. Prior to TRT Holdings, Mr. Frantz was an Analyst with J.P. Morgan Asset Management from July 2008 to February 2010. Mr. Frantz currently serves on the Board of Directors of CareVet, Friends of the Katy Trail (non-profit), Topside Marinas, and Pinnacle Live. Mr. Frantz holds a B.A. degree in Business Administration, with a concentration in Finance and Accounting and a Masters in Professional Accounting from the University of Texas at Austin, McCombs School of Business. Mr. Kimble has served as a director since July 2022. From 2009 until his retirement in 2015, Mr. Kimble served as the Office Managing Partner for the Atlanta office and Managing Partner - Southeastern United States at KPMG, one of the largest audit, tax and advisory services firms in the world. Mr. Kimble was also responsible for moderating KPMG’s Audit Committee Institute and Audit Committee Chair Sessions. Until his retirement, Mr. Kimble had been with KPMG or its predecessor firm since 1986. During his tenure with KPMG, Mr. Kimble also held numerous senior leadership positions, including Global Chairman of Industrial Markets. Mr. Kimble served as KPMG’s Energy Sector Leader for ten years and was the executive director of KPMG’s Global Energy Institute. Mr. Kimble currently serves on the Board of Directors and Audit Committee of both Liberty Energy Inc. and DCP Midstream GP, LLC, and previously served on the Board of Directors and Audit Committee of PRGX Global, Inc. Mr. Kimble has a Bachelor of Accounting and Business Administration from Southern Methodist University in Dallas, Texas. Mr. King has served as a director since May 2007. Professionally he has worked in various management positions, including land management, as an independent contractor and with privately and publicly held oil and gas exploration companies since 1983. Mr. King has been actively working in the Williston Basin and the Northern Rockies for over 30 years. Throughout his career Mr. King has been very involved in regional industry and local civic affairs, including his sixteen years of service on the Montana Board of Oil and Gas Conservation Commission as a Commissioner (Gubernatorial appointment), Board of the Montana Petroleum Association, Western Montana BLM Advisory Council, U of MT President’s Advisory Council, and the Finance Committee for the Montana Community Foundation. Mr. King was a founding member of the Board of Directors for Crown Butte Resources, Ltd., and served from 1987 to 1996. Mr. King holds a degree in Economics from the University of Montana. Mr. Lasher has served as a director since March 2020. Mr. Lasher is the Founder, Chairman, and Chief Executive Officer of Quantum Capital Partners, Inc., which is a private investment firm based in Tampa, Florida. Quantum Capital Partners was formed in 1998 and invests capital and provides expertise to businesses across various industries. From September 2010 to July 2012, Mr. Lasher served as Chairman and Chief Executive Officer of Lifestyle Family Fitness, a fitness chain with 55 locations. In 1990, Mr. Lasher co-founded and served as Chairman and Chief Executive Officer of National Business Solutions, Inc. (NBS), a professional employer organization based in St. Petersburg, Florida. In August 1996, NBS was acquired by Paychex, Inc. and Mr. Lasher remained as Chief Executive Officer of the Paychex PEO division until June 1997. Mr. Lasher began his professional career in public accounting with KPMG Peat Marwick. Mr. Lasher currently serves on several company boards of directors, including Life Time Group Holdings, Inc. (formerly LTF Holdings, Inc.) and its wholly owned subsidiary, Life Time, Inc. (formerly Life Time Fitness, Inc.). Mr. Lasher holds a degree in Finance and Accounting from Florida State University and is a Certified Public Accountant in the State of Florida.

  5. Directors and Director Nominees

    Ms. Pomerantz has served as a director since December 2021. Ms. Pomerantz most recently served from 2011 to August 2021 as Chairman and CEO of American Natural, a new lifestyle brand of convenience stores and fuel logistics solutions which she founded. Prior to founding that business, she launched and served as a portfolio manager for global natural resources strategies for Citadel Asset Management’s Surveyor Capital and JP Morgan’s Highbridge Asset Management. Prior to asset management, Ms. Pomerantz began her career in investment banking covering power and energy for Bank of America. Ms. Pomerantz holds a degree in Economics and Political Science from the University of Chicago. Each director nominee brings a unique set of skills to our Board of Directors. The Board of Directors believes the directors as a group have the experience and skills in areas such as the oil and gas industry, finance, risk management and corporate governance that are necessary to effectively oversee our company. Two of our director nominees are female and one identifies as a member of a minority racial or ethnic group. Set forth below are the conclusions reached by our Board of Directors as to why each director is qualified for service as a director of our company. •Mr. Akradi has extensive experience as the chairperson of the board, president and chief executive officer of both public and private companies. Mr. Akradi provides us with strong executive leadership as well as expertise in the areas of corporate strategy, financial management and fundraising through the capital markets. In addition, Mr. Akradi brings the perspective of a significant stockholder to the Board. •Ms. Bromiley has extensive experience as a financial executive and leader within various companies across the oil and gas industry. Ms. Bromiley provides expertise in the areas of financial reporting, accounting, capital markets, internal controls and corporate governance. •Mr. Easley has extensive business development and executive management experience in the oil and natural gas exploration and production industry. •Mr. Frantz has valuable experience in business and financing and brings the benefit of institutional knowledge in the oil and gas industry. •Mr. Kimble has an extensive accounting background and valuable experience as a director of other public companies. Mr. Kimble brings significant knowledge of the most current and pressing audit and financial compliance matters and reporting obligations faced by public companies. •Mr. King has over 40 years of experience in the oil and gas industry. Mr. King provides expertise in the areas of evaluating, acquiring and managing oil and gas interests, as well as our exploration prospects. •Mr. Lasher has broad business and investing experience, bringing valuable insight from his executive leadership experience as well as detailed knowledge of finance and accounting. •Ms. Pomerantz has broad business and investing experience and brings a valuable global energy expertise and perspective in the industry. In addition, Ms. Pomerantz brings extensive management experience through her involvement as both a chief executive officer and chairman.

  6. Compensation Discussion and Analysis

    | | 2023 LTIP | | | | | | | | Target Compensation Values ($ in thousands) | | | | | | | | 2023 | 2024 | 2025 | 2026 | 2027 | Total | | Nicholas O’Grady | | | | | | | | Performance-Based(1) | 2,565 | 2,565 | 2,565 | 1,800 | 1,800 | 11,295 | | Service-Based | 892 | 892 | 892 | 750 | — | 3,425 | | Total | 3,457 | 3,457 | 3,457 | 2,550 | 1,800 | 14,720 | | Adam Dirlam | | | | | | | | Performance-Based(1) | 1,200 | 1,200 | 1,200 | 900 | 900 | 5,400 | | Service-Based | 567 | 567 | 567 | 500 | — | 2,200 | | Total | 1,767 | 1,767 | 1,767 | 1,400 | 900 | 7,600 | | Chad Allen | | | | | | | | Performance-Based(1) | 910 | 910 | 910 | 750 | 750 | 4,230 | | Service-Based | 422 | 422 | 422 | 375 | — | 1,640 | | Total | 1,332 | 1,332 | 1,332 | 1,125 | 750 | 5,870 | | James Evans | | | | | | | | Performance-Based(1) | 731 | 731 | 731 | 600 | 600 | 3,394 | | Service-Based | 412 | 412 | 412 | 375 | — | 1,612 | | Total | 1,144 | 1,144 | 1,144 | 975 | 600 | 5,006 | | Erik Romslo | | | | | | | | Performance-Based(1) | 754 | 754 | 754 | 600 | 600 | 3,462 | | Service-Based | 294 | 294 | 294 | 250 | — | 1,132 | | Total | 1,048 | 1,048 | 1,048 | 850 | 600 | 4,594 |

  7. Compensation Discussion and Analysis

    (1)Includes all awards under the 2023 LTIP subject to quantitative performance goals, as well as the Performance-Contingent Award Opportunity (as defined below). See “Long-Term Equity Incentive Program” below. Overview Our Compensation Committee is responsible for establishing director and executive officer compensation, as well as policies and programs to ensure that they are consistent with our compensation philosophy and principles of corporate governance. The Compensation Committee is authorized to make plan awards to our employees to recognize individual and company-wide achievements as the Compensation Committee deems appropriate. Our Compensation Committee reviews and determines all compensation for executive officers, including employment agreements and other benefits. Our compensation program seeks to incentivize our management to create superior risk-adjusted returns for our stockholders. The program has individual and corporate goals as well as qualitative and quantitative objectives to drive ongoing value creation and is designed to foster an ownership mentality among our management team. In 2023, we held a stockholder advisory vote on the compensation paid to our named executive officers for 2022, which resulted in approximately 98% of the votes cast approving such compensation. Our Compensation Committee evaluated the results of last year’s advisory vote on executive compensation and, given the support expressed by stockholders, did not make any specific changes to our executive compensation program as a result thereof. Compensation Consultant The Compensation Committee from time to time engages independent consultants to advise it on peer group executive compensation practices, potential compensation packages for existing or new executives, and in connection with other projects, including the selection of peer groups for executive compensation analysis purposes. During 2023, the Compensation Committee retained Willis Towers Watson (“WTW”) as its independent executive compensation consultant. WTW performs work at the direction and under the supervision of the Compensation Committee. The following provides typical executive compensation consulting services provided by WTW: •Advise on the compensation proxy peer group; •Preparation of a comprehensive analysis and comparison of our named executive officers’ compensation relative to our peer group and survey data; •Review of the competitiveness of the overall program which supports the compensation decision making process and overall design; •Updates on trends and developments in executive compensation; •Preparation and review of materials for Compensation Committee meetings in which executive compensation is on the agenda; and •Participation in Compensation Committee meetings. In addition, WTW periodically provides the Compensation Committee with recommendations and reports regarding non-employee director compensation. The Compensation Committee reviews the analysis and determines whether to recommend to our Board of Directors any changes to the compensation program for non-employee directors. WTW reports directly to the Compensation Committee but it may meet with management from time to time to gather information or to obtain management’s perspective on executive compensation matters. The Compensation Committee has considered the independence of WTW in light of SEC rules and NYSE listing standards and concluded that no conflict of interest is present. Peer Group The peer group approved by the Compensation Committee, upon the advice of WTW, in connection with the 2023 executive compensation program consisted of the following companies:

  8. Compensation Discussion and Analysis

    Annual Short-Term Incentive Program Our short-term incentive program (“STIP”) is designed to provide annual variable cash compensation dependent upon the achievement of financial and operating performance objectives, as well as individual performance by each executive officer. The STIP provides the opportunity to receive a performance-based cash payment at the end of each year based on the prior year’s results as measured against quantitative targets set by the Compensation Committee, as well as individual performance considerations determined by the Compensation Committee. The weighting and performance levels for the quantitative measures and individual performance considerations are communicated to our executive officers at the time they are set. The Compensation Committee established the 2023 STIP in March 2023, setting threshold, target and maximum cash award opportunities as follows:

  9. Compensation Discussion and Analysis

    | | 2023 STIP | | | | | | | | Threshold | | Target | | Maximum | | | | Value ($) | % of Salary | Value ($) | % of Salary | Value ($) | % of Salary | | Nicholas O’Grady | 425,000 | 50% | 850,000 | 100% | 1,487,500 | 175% | | Adam Dirlam | 225,000 | 45% | 450,000 | 90% | 750,000 | 150% | | Chad Allen | 133,333 | 33% | 300,000 | 75% | 500,000 | 125% | | James Evans | 125,000 | 33% | 243,750 | 65% | 468,750 | 125% | | Erik Romslo | 146,667 | 33% | 286,000 | 65% | 440,000 | 100% |

  10. Compensation Discussion and Analysis

    | | | Performance Levels | | | | | 2023 Performance Goals | Weighting | Threshold | Target | Maximum | Actual Company Performance | | Adjusted EBITDA (millions)(1) | 1/3 | $1,143.5 | $1,265.7 | $1,433.5 | $1,324.0 | | Return on Capital Employed(2) | 1/3 | 21.1% | 24.3% | 28.7% | 24.6% | | Individual Goals(3) | 1/3 | | | | See FN 3 |

  11. Compensation Discussion and Analysis

    Long-Term Equity Incentive Program The purpose of our long-term equity incentive program (“LTIP”) is to align the interests of our executives with those of our stockholders and to provide variable compensation primarily dependent upon company performance. Since equity awards may vest and grow in value over time, the program is intended to incentivize company performance over the long-term. In prior years, the performance-based portion of our LTIP has generally measured performance over one year, with any amounts earned then vesting subject to continued service over a three-year period. For 2023, our Compensation Committee determined to establish long-term performance awards with cliff measurement over three- and five-year periods (as described below) to align with investment return cycles in our oil and gas acquisition strategy. In connection with establishing our 2023 LTIP, the Compensation Committee, with input and advice from WTW, reviewed the compensation of our executive team relative to our peer group, the existing equity stake of our executive team in our company, and our company’s long-term performance. The Compensation Committee was cognizant of the substantial value creation and equity out-performance delivered by the executive team, and was seeking ways to (i) strongly incentivize the team to continue their value-creation efforts for the company and our stockholders, (ii) further align the executive team with our company’s long-term goals over multi-year periods and (iii) increase the holding power of our compensation arrangements. The 2023 LTIP includes both performance-based and service-based awards. The following table shows the relative mix for each named executive officer, based on target values for the performance-based awards and grant date fair values for the service-based awards.

  12. Compensation Discussion and Analysis

    | | | 3-Year TSR Awards (combined)(1) | | | Performance-Contingent Award Opportunity | | | | | Base RSA ($) | Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | | Nicholas O’Grady | 425,000 | 510,000 | 1,530,000 | 2,550,000 | 255,000 | 765,000 | 1,275,000 | | Adam Dirlam | 200,000 | 200,000 | 600,000 | 1,000,000 | 100,000 | 300,000 | 500,000 | | Chad Allen | 140,000 | 120,000 | 320,000 | 480,000 | 60,000 | 160,000 | 240,000 | | James Evans | 112,500 | 112,500 | 262,500 | 450,000 | 56,250 | 131,250 | 225,000 | | Erik Romslo | 132,000 | 132,000 | 308,000 | 528,000 | 66,000 | 154,000 | 264,000 |

  13. Compensation Discussion and Analysis

    _________________ (1)Amounts that would be earned for achieving the 11.6% Annualized Return target. Nothing is earned if this target is not achieved. For performance between the First Return Target and the Maximum Return Target, executives would be entitled to an additional amount based on linear interpolation between the amounts up to a maximum goal of 16.8%. (2)Maximum amounts that can be earned for achieving or exceeding the 16.8% maximum Annualized Return target. The Base RSA was granted on March 3, 2023, with the number of restricted shares calculated for each executive by dividing (i) the applicable value in the table above by (ii) the closing price of our common stock on that date. These restricted shares will vest in three equal installments on each of March 15, 2024, 2025 and 2026, subject to the executive’s continued service with the company through each such vesting date. Under the Performance-Contingent Award Opportunity, in March 2024 the Compensation Committee evaluated the individual performance of each named executive officer and other factors it deemed relevant. Based on this evaluation, the Compensation Committee determined to issue RSAs to each named executive officer in the amounts shown in the table immediately following this paragraph. The number of shares was calculated by dividing (i) the value earned by (ii) the closing price of our common stock on the March 4, 2024 grant date. These restricted shares will cliff vest on March 15, 2026, subject to the executive’s continued service with the company through such vesting date.

  14. Compensation Discussion and Analysis

    In 2023, we adopted stock ownership guidelines covering our executive officers and directors. Pursuant to these guidelines, these individuals are each required to hold an aggregate value of shares of our common stock equal to or greater than (i) five times annual base salary for our Chief Executive Officer, (ii) three times annual base salary for all other executive officers, and (iii) four times annual cash retainer for our directors. Covered individuals are expected to achieve these requirements within five years of first becoming subject to the guidelines. Thereafter, if a covered individual is not in compliance with these requirements, they would be required to hold 100% of after-tax vested shares from equity awards granted to them by the company. Shares that a covered individual has the right to acquire through the exercise of stock options (whether or not vested) and unvested performance-based equity awards are not included as qualifying shares for the purpose of determining stock ownership requirements. Our stock ownership guidelines are posted on the governance page of our website. Clawback Policy In 2023, we adopted a clawback policy which provides for the recoupment of certain executive compensation in the event that the company is required to prepare an accounting restatement of its financial statements due to material noncompliance with any financial reporting requirement under the federal securities laws. The clawback policy is designed to comply with Section 10D of the Exchange Act, the rules promulgated thereunder, and the listing standards of the NYSE. Our clawback policy is posted on the governance page of our website.

  15. 2023 Summary Compensation Table

    2023 Summary Compensation Table Employment agreements for our named executive officers are summarized above in the Compensation Discussion and Analysis section. The table below shows compensation for our named executive officers for services in all capacities to our company during the years shown. Compensation, as reflected in this table and the tables which follow, is presented on the basis of rules of the SEC and does not necessarily represent the amount of compensation realized or which may be realized in the future, or the amount of compensation attributable to a particular year. This is particularly true with respect to certain stock-based awards or accruals reported in the Stock Awards column. For more information regarding our executive compensation plans, please review the information above under the caption “Compensation Discussion and Analysis.”

  16. 2023 Summary Compensation Table

    | Name and Principal Position(1) | Year | Salary ($) | Bonus ($) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total Compensation ($) | | Nicholas O’Grady | 2023 | 850,000 | — | 8,115,550 | 1,149,212 | 133,936 | 10,248,697 | | Chief Executive Officer | 2022 | 750,000 | 512,500 | 783,260 | 800,000 | 74,713 | 2,920,473 | | | 2021 | 515,000 | 590,000 | 1,449,989 | — | 63,659 | 2,618,648 | | Adam Dirlam | 2023 | 500,000 | — | 4,300,142 | 590,806 | 97,126 | 5,488,073 | | President | 2022 | 425,000 | 343,750 | 326,354 | 400,000 | 68,485 | 1,563,589 | | | 2021 | 335,000 | 395,000 | 419,993 | — | 62,197 | 1,212,190 | | Chad Allen | 2023 | 400,000 | — | 3,140,331 | 393,871 | 93,070 | 4,027,272 | | Chief Financial Officer | 2022 | 350,000 | 170,833 | 228,453 | 266,667 | 68,293 | 1,084,245 | | | 2021 | 290,000 | 290,000 | 360,002 | — | 61,665 | 1,001,667 | | James Evans | 2023 | 375,000 | — | 2,849,999 | 349,354 | 85,878 | 3,660,232 | | Chief Technical Officer | 2022 | 320,000 | 133,333 | 228,453 | 266,667 | 66,924 | 1,015,376 | | Erik Romslo | 2023 | 440,000 | — | 2,467,261 | 336,614 | 99,054 | 3,342,930 | | Chief Legal Officer & Secretary | 2022 | 400,000 | 66,667 | 294,624 | 333,333 | 69,918 | 1,164,542 | | | 2021 | 392,000 | 392,000 | 479,992 | — | 63,636 | 1,327,628 |

  17. 2023 Summary Compensation Table

    ______________ (1)Mr. O’Grady has served as Chief Executive Officer since January 2020. Mr. Dirlam served as Chief Operating Officer from January 2020 to December 2021, and has served as President since December 2021. Mr. Allen has served as Chief Financial Officer since January 2020. Mr. Evans has served as an executive officer since February 2021, but 2022 was his first year as a “named executive officer” and, as a result, only his 2022 and 2023 compensation are disclosed in this table. Mr. Evans served as Executive Vice President and Chief Engineer during 2022, and his title changed to Chief Technical Officer in April 2023. Mr. Romslo has served as Chief Legal Officer since January 2020, and as Secretary since 2011. (2)Amounts in the Stock Awards column reflect the aggregate grant date fair value of awards granted during the applicable year. Grant date fair values are computed in accordance with FASB ASC Topic 718 utilizing assumptions discussed in Note 6 to our financial statements for the year ended December 31, 2023 included in our Annual Report on Form 10-K for 2023. Certain awards whose values are included in this column are subject to performance conditions. See the Grants of Plan-Based Awards table below, and the footnotes thereto, for additional detail regarding the 2023 awards reflected in this column (including the value, as of the grant date, of awards subject to performance conditions assuming that the highest level of performance conditions will be achieved). (3)The Non-Equity Incentive Plan Compensation amounts reported for 2023 reflect the amounts earned for meeting the performance criteria contemplated by the 2023 STIP. (4)The All Other Compensation amounts reported for 2023 include (i) accrued cash dividends received upon the vesting of restricted stock of $57,597 for Mr. O’Grady, $20,235 for Mr. Dirlam, $17,262 for Mr. Allen, $10,505 for Mr. Evans, and $22,713 for Mr. Romslo, (ii) company 401(k) contributions of $45,000 for each named executive officer, (iii) vehicle allowances of $20,000 for each named executive officer, and (iv) additional amounts paid by the company on behalf of each named executive officer for life insurance and supplemental disability policy premiums, legal fees and executive physicals.

  18. 2023 Grants of Plan-Based Awards

    2023 Grants of Plan-Based Awards The following table sets forth grants of plan-based awards during the year ended December 31, 2023.

  19. 2023 Grants of Plan-Based Awards

    | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Possible Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Common Stock (#) | Grant Date Fair Value of Stock Awards ($) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Nicholas O’Grady | | 425,000 | 850,000 | 1,487,500 | | | | | | | | 1-24-2023 | | | | | | | 15,625 | 500,000(2) | | | 3-3-2023 | | | | | | | 12,593 | 425,014(3) | | | 12-29-2023 | | | | | | | 80,928 | 3,000,001(4) | | | 12-29-2023 | | | | 7,594 | 22,781 | 37,968 | | 897,799(5) | | | 12-29-2023 | | | | 6,469 | 19,406 | 32,343 | | 988,736(6) | | | 12-29-2023 | | | | — | $9,000,000 | $13,500,000 | | 2,304,000(7) | | Adam Dirlam | | 225,000 | 450,000 | 750,000 | | | | | | | | 1-24-2023 | | | | | | | 6,510 | 208,320(2) | | | 3-3-2023 | | | | | | | 5,926 | 200,003(3) | | | 12-29-2023 | | | | | | | 53,952 | 2,000,001(4) | | | 12-29-2023 | | | | 2,978 | 8,934 | 14,890 | | 352,089(5) | | | 12-29-2023 | | | | 2,537 | 7,610 | 12,683 | | 387,730(6) | | | 12-29-2023 | | | | — | $4,500,000 | $6,750,000 | | 1,152,000(7) | | Chad Allen | | 133,333 | 300,000 | 500,000 | | | | | | | | 1-24-2023 | | | | | | | 4,557 | 145,824(2) | | | 3-3-2023 | | | | | | | 4,148 | 139,995(3) | | | 12-29-2023 | | | | | | | 40,464 | 1,500,000(4) | | | 12-29-2023 | | | | 1,976 | 5,268 | 7,902 | | 188,226(5) | | | 12-29-2023 | | | | 1,658 | 4,422 | 6,633 | | 206,286(6) | | | 12-29-2023 | | | | — | $3,750,000 | $5,625,000 | | 960,000(7) | | James Evans | | 125,000 | 243,750 | 468,750 | | | | | | | | 1-24-2023 | | | | | | | 4,557 | 145,824(2) | | | 3-3-2023 | | | | | | | 3,333 | 112,489(3) | | | 12-29-2023 | | | | | | | 40,464 | 1,500,000(4) | | | 12-29-2023 | | | | 1,628 | 3,799 | 6,513 | | 154,087(5) | | | 12-29-2023 | | | | 1,387 | 3,236 | 5,547 | | 169,599(6) | | | 12-29-2023 | | | | — | $3,000,000 | $4,500,000 | | 768,000(7) | | Erik Romslo | | 146,667 | 286,000 | 440,000 | | | | | | | | 1-24-2023 | | | | | | | 5,859 | 187,488(2) | | | 3-3-2023 | | | | | | | 3,911 | 131,996(3) | | | 12-29-2023 | | | | | | | 26,976 | 1,000,000(4) | | | 12-29-2023 | | | | 1,910 | 4,457 | 7,641 | | 180,776(5) | | | 12-29-2023 | | | | 1,627 | 3,797 | 6,509 | | 199,001(6) | | | 12-29-2023 | | | | — | $3,000,000 | $4,500,000 | | 768,000(7) |

  20. 2023 Grants of Plan-Based Awards

    (1)Amounts in these columns assume achievement of all “threshold,” “target” or “maximum” performance criteria, respectively, under the 2023 STIP, described above under “Compensation Discussion and Analysis—Annual Short-Term Incentive Program.” (2)Restricted stock award, subject to time-based vesting over three years, granted in respect of each named executive officer’s performance-contingent award opportunity under the 2022 LTIP. (3)Base RSA described above under “Compensation Discussion and Analysis—Long-Term Equity Incentive Program.” (4)4-Year RSA described above under “Compensation Discussion and Analysis—Long-Term Equity Incentive Program.” (5)3-Year Absolute TSR Award described above under “Compensation Discussion and Analysis—Long-Term Equity Incentive Program.” The value as of the grant date, assuming that the highest level of performance conditions will be achieved, would have been as follows for each named executive officer: Mr. O’Grady - $1,407,474; Mr. Dirlam - $551,972; Mr. Allen - $292,927; Mr. Evans - $241,437; Mr. Romslo - $283,252. (6)3-Year Relative TSR Award described above under “Compensation Discussion and Analysis—Long-Term Equity Incentive Program.” The value as of the grant date, assuming that the highest level of performance conditions will be achieved, would have been as follows for each named executive officer: Mr. O’Grady - $1,198,955; Mr. Dirlam - $470,159; Mr. Allen - $245,885; Mr. Evans - $205,627; Mr. Romslo - $241,289. (7)5-Year Performance Award described above under “Compensation Discussion and Analysis—Long-Term Equity Incentive Program.” These awards are denominated in dollars and as a result the values in the Target and Maximum columns for these awards are given in dollars. Any amount earned under the award is expected to be settled in shares after the end of the five-year performance period, calculated by dividing the earned amount by the average closing price of our common stock over the last 20 days of the performance period. The value as of the grant date, assuming that the highest level of performance conditions will be achieved, is set forth in the Maximum column for each named executive officer. The non-equity incentive plan awards reflected in the foregoing table are further described above under “Compensation Discussion and Analysis—Annual Short-Term Incentive Program.” The equity incentive plan awards and stock awards reflected in the foregoing table are further described above under “Compensation Discussion and Analysis—Long-Term Equity Incentive Program.”

  21. Outstanding Equity Awards at December 31, 2023

    Outstanding Equity Awards at December 31, 2023 The following table sets forth the outstanding equity awards to our named executive officers as of December 31, 2023.

  22. Outstanding Equity Awards at December 31, 2023

    | | Stock Awards | | | | | Name | Number of Shares That Have Not Vested | Market Value of Shares That Have Not Vested(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(7) | Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Vested | | Nicholas O’Grady | 159,761(2) | $5,922,340 | 284,971 | $10,563,872 | | Adam Dirlam | 84,702(3) | $3,139,903 | 137,936 | $5,113,286 | | Chad Allen | 63,319(4) | $2,347,235 | 110,850 | $4,109,209 | | James Evans | 61,294(5) | $2,272,169 | 87,963 | $3,260,788 | | Erik Romslo | 55,285(6) | $2,049,415 | 89,182 | $3,305,976 |

  23. Outstanding Equity Awards at December 31, 2023

    ______________ (1)The values in this column are based on the $37.07 closing price of our common stock on the last trading day of 2023. Vesting of the outstanding equity awards is based on the continued employment of the applicable executive through the scheduled vesting date of the shares, as detailed in the following footnotes. In addition, vesting of the outstanding equity awards will accelerate in the event of an executive’s termination of employment without cause or for good reason prior to the applicable vesting dates. (2)Restricted shares held by Mr. O’Grady, scheduled to vest as follows: (i) 50,811 shares on March 15, 2024, (ii) 20,232 shares on December 29, 2024, (iii) 23,825 shares on March 15, 2025, (iv) 20,232 shares on December 29, 2025, (v) 4,197 shares on March 15, 2026, (vi) 20,232 shares on December 29, 2026, and (vii) 20,232 shares on December 29, 2027. (3)Restricted shares held by Mr. Dirlam, scheduled to vest as follows: (i) 18,622 shares on March 15, 2024, (ii) 13,488 shares on December 29, 2024, (iii) 10,153 shares on March 15, 2025, (iv) 13,488 shares on December 29, 2025, (v) 1,975 shares on March 15, 2026, (vi) 13,488 shares on December 29, 2026, and (vii) 13,488 shares on December 29, 2027. (4)Restricted shares held by Mr. Allen, scheduled to vest as follows: (i) 14,366 shares on March 15, 2024, (ii) 10,116 shares on December 29, 2024, (iii) 7,107 shares on March 15, 2025, (iv) 10,116 shares on December 29, 2025, (v) 1,382 shares on March 15, 2026, (vi) 10,116 shares on December 29, 2026, and (vii) 10,116 shares on December 29, 2027. (5)Restricted shares held by Mr. Evans, scheduled to vest as follows: (i) 12,884 shares on March 15, 2024, (ii) 10,116 shares on December 29, 2024, (iii) 6,835 shares on March 15, 2025, (iv) 10,116 shares on December 29, 2025, (v) 1,111 shares on March 15, 2026, (vi) 10,116 shares on December 29, 2026, and (vii) 10,116 shares on December 29, 2027. (6)Restricted shares held by Mr. Romslo, scheduled to vest as follows: (i) 18,342 shares on March 15, 2024, (ii) 6,744 shares on December 29, 2024, (iii) 8,664 shares on March 15, 2025, (iv) 6,744 shares on December 29, 2025, (v) 1,303 shares on March 15, 2026, (vi) 6,744 shares on December 29, 2026, and (vii) 6,744 shares on December 29, 2027. (7)The numbers in this column reflect estimated shares that would be issued in settlement of all outstanding 3-Year TSR Awards and 5-Year Performance Awards, assuming target-level performance under the terms of the awards. The 3-Year TSR Awards are denominated in shares. The 5-Year Performance Awards are denominated in dollars, but for purposes of this column the number of shares has been calculated based on the number of shares that would be issued in settlement of target-level performance based on the closing price of our common stock as of the last trading day of 2023.

  24. 2023 Option Exercises and Stock Vested

    2023 Option Exercises and Stock Vested Our named executive officers did not hold or exercise any stock options during the year ended December 31, 2023. The table below sets forth the number of shares of common stock acquired on vesting by our named executive officers during the year ended December 31, 2023.

  25. 2023 Option Exercises and Stock Vested

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting | Value Realized on Vesting(1) | | Nicholas O’Grady | 73,756 | $1,967,810 | | Adam Dirlam | 26,863 | $716,705 | | Chad Allen | 21,849 | $582,931 | | James Evans | 15,274 | $407,510 | | Erik Romslo | 28,606 | $763,208 |

  26. 2023 Option Exercises and Stock Vested

    ______________ (1)Value based on the closing price of our common stock on each applicable vesting date.

  27. Potential Payments upon Termination or Change in Control

    Potential Payments upon Termination or Change in Control Change in Control and Severance Provisions We have entered into employment agreements and various equity award agreements with each of our named executive officers that contain change in control and severance provisions entitling those individuals to certain payments under specified circumstances. As noted above, the new employment agreements that we entered into in December 2023 eliminated provisions in the prior employment agreements that provided for full accelerated vesting of all service-based and performance-based equity awards in any situation where an executive’s employment is terminated by the company without “cause” or by the executive for “good reason.” Involuntary Termination in Connection with a Change in Control. The employment agreements contain double-trigger change in control provisions whereby, if the executive’s employment is terminated by the company without “cause” or by the executive for “good reason” (in each case, as defined in the employment agreement, and referred to herein as an “Involuntary Termination”) in connection with a “change in control” (as defined in the employment agreement) or within 18 months after a change in control, then the executive shall be entitled to receive the following payments or benefits (“CIC Severance”): (i) a lump sum payment equal to (a) two times annual base salary, plus (b) one times annual vehicle allowance, plus (c) 12 months of the premium payment to continue the executive’s existing group health and dental coverage calculated under COBRA, plus (d) any earned but unpaid annual bonus with respect to the calendar year ending on or preceding the date of termination of employment (the “Prior Year Bonus”); (ii) a pro rata portion of the annual bonus, if any, that the executive otherwise would have earned for the calendar year that includes the date of termination, based on actual achievement of the applicable performance goals for such year, payable when such bonuses are paid to our similarly situated executives (the “Pro Rata Bonus”); and (iii) immediate vesting, as of the date of termination, of any unvested equity awards in the company held by the executive that vest solely based on continued service (“Service-Based Awards”). For unvested equity awards subject to performance conditions (“Performance-Based Awards”), vesting in this situation is subject to the terms of the applicable award agreements. The 3-Year TSR Awards would be fully accelerated and vested based on the greater of (x) target level performance, or (y) actual performance as of the termination date. The 5-Year Performance Awards would be fully accelerated and vested based on actual performance as of the change in control date (or forfeited if actual performance did not meet the requisite performance targets). Involuntary Termination (no Change in Control). The employment agreements provide that upon an executive’s Involuntary Termination that does not qualify for CIC Severance, the executive shall be entitled to receive the following payments or benefits (“Non-CIC Severance”): (i) an amount, payable in 24 equal monthly installments following the termination date, equal to (a) two times annual base salary, plus (b) one times annual vehicle allowance, plus (c) 12 months of the premium payment to continue the executive’s existing group health and dental coverage calculated under COBRA, plus (d) the Prior Year Bonus, plus (e) the Pro Rata Bonus; (ii) immediate vesting, as of the date of termination, of any Service-Based Awards granted on or before January 24, 2023; and (iii) immediate vesting, as of the date of termination, of a pro rata portion of any Service-Based Awards granted on or after January 25, 2023, that would have otherwise vested during the 12 month period following the date of termination, with proration determined on an award-by-award basis (and if necessary a vesting tranche-by-tranche basis) based on the portion of the applicable vesting period that executive was employed by the company. For Performance-Based Awards, vesting in this situation is subject to the terms of the applicable award agreements. Both the 3-Year TSR Awards and 5-Year Performance Awards provide that the award would remain outstanding and the amount earned, if any, would be calculated and paid at the end of the performance period based on actual performance, with a pro rata adjustment to the earned amount based on the portion of the applicable performance period that the executive was employed by the company (e.g. if an executive was employed for half of the performance period, they would receive half of the amount earned based on actual performance for the full performance period). With respect to the 5-Year Performance Awards, the award would be forfeited if the Involuntary Termination occurred before the end of the 24th month of the performance period. Termination Due to Death or Disability. If an executive’s employment terminates due to death or disability: (i) the employment agreements provide that the executive or executive’s estate is entitled to receive the Prior Year Bonus and the Pro Rata Bonus (in each case, if any), and (ii) the applicable award agreements provide that (a) Service-Based Awards would immediately vest in full as of the date of termination, and (b) Performance-Based Awards would remain outstanding and the amount earned, if any, would be calculated and paid at the end of the performance period based on actual performance, with a pro rata adjustment to the earned amount based on the portion of the applicable performance period that the executive was employed by the company. Conditions to Severance Benefits. The right of executives to receive the payments and benefits described in the foregoing paragraphs is subject to the terms of the agreements described therein. Under the employment agreements, an executive’s eligibility to receive severance is conditioned upon the executive’s timely execution and non-revocation of a release of claims in favor of the company and continued compliance with the terms of the employment agreement, as applicable, including provision of transition services and compliance with covenants with respect to confidentiality, non-solicitation, non-interference, and non-disparagement. In addition, other than in the case of a resignation for good reason, an executive is subject to a one-year notice period in the event of any termination (unless waived by the company), and payments of base salary during the notice period will reduce any severance otherwise payable pursuant to the employment agreement. Fifty percent (50%) of the cash portion of any Non-CIC Severance that an executive may be entitled to shall otherwise cease as of the date that the executive begins employment, engagement, partnership or other services for any person or entity pursuant to which the executive is entitled to compensation. Under the award agreements governing all Service-Based Awards and Performance-Based Awards granted to executives on or after December 29, 2023, receipt of the benefits thereunder is subject to the executive’s continued compliance with covenants with respect to confidentiality, non-competition, non-solicitation, non-interference, and non-disparagement, which generally extend for at least 18 months following notice of termination. Estimated Payments to Named Executive Officers The compensation amounts included in the table below are estimates of the amounts that would have become payable to each named executive officer under the various triggering events described in the foregoing provisions, assuming in each case that the applicable event occurred on the last business day of 2023.

  28. Potential Payments upon Termination or Change in Control

    | Name and Payments/Benefits | Death or Disability | Involuntary Termination(1)(4) | Involuntary Termination in connection with a Change in Control(5) | | Nicholas O’Grady | | | | | Cash ($) | 1,149,212 | 2,901,836 | 2,901,836 | | Equity Vesting, Service-Based Awards($)(2) | 5,922,340 | 2,584,372 | 5,922,340 | | Equity Vesting, Performance-Based Awards($)(3) | 3,568,810 | 868,810 | 16,106,429 | | Adam Dirlam | | | | | Cash ($) | 590,806 | 1,638,370 | 1,638,370 | | Equity Vesting, Service-Based Awards($)(2) | 3,139,903 | 981,651 | 3,139,903 | | Equity Vesting, Performance-Based Awards($)(3) | 1,690,710 | 340,710 | 7,772,131 | | Chad Allen | | | | | Cash ($) | 393,871 | 1,246,029 | 1,246,029 | | Equity Vesting, Service-Based Awards($)(2) | 2,347,235 | 736,581 | 2,347,235 | | Equity Vesting, Performance-Based Awards($)(3) | 1,304,604 | 179,604 | 6,163,812 | | James Evans | | | | | Cash ($) | 349,354 | 1,150,930 | 1,150,930 | | Equity Vesting, Service-Based Awards($)(2) | 2,272,169 | 683,682 | 2,272,169 | | Equity Vesting, Performance-Based Awards($)(3) | 1,049,021 | 149,021 | 4,947,064 | | Erik Romslo | | | | | Cash ($) | 336,614 | 1,265,264 | 1,265,264 | | Equity Vesting, Service-Based Awards($)(2) | 2,049,415 | 944,544 | 2,049,415 | | Equity Vesting, Performance-Based Awards($)(3) | 1,074,847 | 174,847 | 5,024,541 |

  29. Potential Payments upon Termination or Change in Control

    (1)“Involuntary Termination” refers to a termination of employment either by the company without cause or by the employee for good reason. (2)Equity vesting values are based on the $37.07 closing price of our common stock on the last trading day of 2023. (3)The amounts in the applicable columns are estimates based on actual performance through December 31, 2023, which reflected maximum level performance under all Performance-Based Awards. Specifically, our compound annualized TSR was above the 16% maximum goal; our relative TSR percentile vs. our peer group was above the 75th percentile; and our compound equity value growth rate calculated in accordance with the 5-Year Performance Awards was above the 16.8% maximum goal. Actual achievement under each of our Performance-Based Awards is primarily dependent on our stock price performance over the applicable three- or five-year performance period. Although our company’s performance exceeded the maximum goals measured as of December 31, 2023, there is no assurance that this level of performance will continue over the full performance period. (4)For a termination due to death or disability, or an Involuntary Termination that is not in connection with a change in control, Performance-Based Awards would remain outstanding and the amount earned, if any, would be calculated and paid at the end of the performance period based on actual performance, with a pro rata adjustment to the earned amount based on the portion of the applicable performance period that the executive was employed by the company; provided, however, that the 5-Year Performance Awards would be forfeited entirely in the case of an Involuntary Termination that occurred before the end of the 24th month of the performance period. (5)For an Involuntary Termination in connection with a change in control: (i) the 3-Year TSR Awards would be fully accelerated and vested based on the greater of (a) target level performance, or (b) actual performance as of the termination date; and (ii) the 5-Year Performance Awards would be fully accelerated and vested based on actual performance as of the change in control date (or forfeited if actual performance did not meet the requisite performance targets).

  30. CEO Pay Ratio

    CEO Pay Ratio For 2023, the annual total compensation for our Chief Executive Officer was $10,248,697, as reflected in the Summary Compensation Table appearing above. We estimate that the median employee’s annual total compensation was $239,308 for 2023. This comparison results in a CEO Pay Ratio of 42.8 to 1. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K promulgated under the Exchange Act. As permitted under applicable SEC guidance, to identify a median employee among our employee population workforce (excluding our CEO) for 2023, we used actual W-2 taxable income for the 2023 calendar year as our consistently applied compensation measure for those who were employed on December 31, 2023. Based on that, we selected an individual at the median of our employee population on December 31, 2023. We determined that individual’s annual total compensation for 2023 in the same manner that we used to determine the annual total compensation of our named executive officers for purposes of the Summary Compensation Table disclosed above.

  31. Pay Versus Performance

    Pay Versus Performance The following table sets forth certain information with respect to the company’s financial performance and the compensation paid to our named executive officers (or “NEOs”) for our fiscal years ending in 2023, 2022, 2021 and 2020:

  32. Pay Versus Performance

    | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | | Summary Compensation Table Total for PEO(1)(2) ($) | Compensation Actually Paid to PEO(1)(2) ($) | Average Summary Compensation Table Total for Other NEOs(1)(2) ($) | Average Compensation Actually Paid to Other NEOs(1)(2) ($) | Total Shareholder Return(3) ($) | Peer Group (Industry Index) Total Shareholder Return(3)(4) ($) | Net Income ($ in millions) | Adjusted EBITDA(5) ($ in millions) | | 2023 | 10,248,697 | 10,343,854 | 4,129,627 | 4,162,643 | 171.61 | 159.64 | 923.0 | 1,428.3 | | 2022 | 2,920,473 | 4,586,132 | 1,206,938 | 1,731,366 | 136.82 | 154.15 | 773.2 | 1,086.3 | | 2021 | 2,618,648 | 3,775,304 | 1,143,263 | 1,577,661 | 88.61 | 106.04 | 6.4 | 543.0 | | 2020 | 1,392,882 | 250,343 | 728,845 | 425,848 | 37.44 | 63.60 | (906.0) | 351.8 |

  33. Pay Versus Performance

    ______________ (1)For 2023 and 2022, the principal executive officer, or “PEO,” was Nick O’Grady and the non-PEO NEOs (the “Other NEOs”) were Adam Dirlam, President; Chad Allen, Chief Financial Officer; James Evans, Chief Technical Officer; and Erik Romslo, Chief Legal Officer & Secretary. For 2021 and 2020, the PEO was Nick O’Grady and the Other NEOs were Adam Dirlam, President; Chad Allen, Chief Financial Officer; Mike Kelly, Chief Strategy Officer; and Erik Romslo, Chief Legal Officer & Secretary. (2)We did not report a change in pension value for any of the years reflected in this table. Therefore, a deduction from the Summary Compensation Table (or “SCT”), total related to pension value is not needed in calculating the Compensation Actually Paid amounts reflected in these columns. A reconciliation of Total Compensation from the SCT to Compensation Actually Paid to our PEO and our Other NEOs (as an average) for 2023 is shown below:

  34. Pay Versus Performance

    | | 2023 | | | Adjustments | PEO ($) | Average of Other NEOs ($) | | Total Compensation from SCT | 10,248,697 | 4,129,627 | | Adjustments for stock and option awards: | | | | (Subtraction): SCT amounts | (8,115,550) | (3,189,433) | | Addition: Fair value at year-end of awards granted during the covered fiscal year that are outstanding and unvested at year-end | 8,043,504 | 3,164,673 | | Addition (Subtraction): Year-over-year change in fair value of awards granted in any prior fiscal year that are outstanding and unvested at year end | 324,306 | 102,635 | | Addition: Vesting date fair value of awards granted and vesting during such year | 138,958 | 47,764 | | Addition (Subtraction): Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during such year | (296,063) | (92,622) | | (Subtraction): Fair value at end of prior year of awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during such year | — | — | | Addition: Dividends or other earnings paid on stock or option awards in the covered year prior to vesting if not otherwise included in the total compensation for the covered year | — | — | | Compensation Actually Paid (as calculated) | 10,343,854 | 4,162,643 |

  35. Pay Versus Performance

    (3)Total shareholder return as calculated based on a fixed investment of one hundred dollars measured from the market close on December 31, 2019 (the last trading day of 2019) through and including the end of the fiscal year for each year reported in the table. (4)Our peer group used for this TSR calculation is the SPDR S&P Oil & Gas Exploration & Production ETF (the “XOP”), which is the industry index as disclosed in our 2023 Annual Report on Form 10-K pursuant to Item 201(e) of Regulation S-K. In 2022, the industry index we used for these purposes was the NYSE Arca Oil Index (the “Arca Index”). We made the change to the XOP because we believe it is a more appropriate index for comparison. For purposes of comparison, the values in this column had we continued to use the Arca Index would have been as follows: 2020 - 69.00; 2021 - 89.50; 2022 - 125.98; 2023 - 138.11. (5)Our company-selected measure, which is the measure we believe represents the most important financial performance not otherwise presented in the table above that we used to link Compensation Actually Paid to our NEOs for 2023 to our company’s performance, is our Adjusted EBITDA. We define Adjusted EBITDA as net income (loss) before (i) interest expense, (ii) income taxes, (iii) depreciation, depletion, amortization, and accretion, (iv) non-cash stock based compensation expense, (v) (gain) loss on the extinguishment of debt, (vi) contingent consideration (gain) loss, (vii) acquisition transaction expense, (viii) (gain) loss on unsettled interest rate derivatives, and (ix)(gain) loss on unsettled commodity derivatives. See Appendix B for additional information on our Adjusted EBITDA calculation. Relationship between Pay and Performance The graphs shown below present a comparison of Compensation Actually Paid to our PEO and the average Compensation Actually Paid to our Other NEOs set forth in the Pay Versus Performance table above, as compared against the following performance measures: (i) our TSR and industry index TSR; (ii) our net income; and (iii) our Adjusted EBITDA. (1)Total shareholder return in the above chart, in the case of both the company and the industry index, reflects the cumulative return of $100 as if invested on December 31, 2019, including reinvestment of any dividends. We believe the Compensation Actually Paid in each of the years reported above and over the three-year cumulative period are reflective of the Compensation Committee’s emphasis on “pay-for-performance,” as the “Compensation Actually Paid” fluctuated year-over-year, primarily due to the result of our stock performance and our varying levels of achievement under our short- and long-term incentive plans. Tabular List of Important Financial Performance Measures The following table lists our most important financial performance measures used by us to link Compensation Actually Paid to the NEOs for fiscal year 2023 to our performance for fiscal year 2023. The performance measures included in this table are not ranked by relative importance.

  36. Pay Versus Performance

    | Adjusted EBITDA | | Absolute TSR | | Relative TSR Percentile vs. Peer Group | | Return on Capital Employed |

  37. Non-Employee Director Compensation

    Non-Employee Director Compensation Director compensation elements are designed to: •Ensure alignment with long-term stockholder interests; •Ensure we can attract and retain outstanding director candidates; •Recognize the substantial time commitments necessary to oversee the affairs of our company; and •Support the independence of thought and action expected of directors. Non-employee director compensation levels are reviewed by the Compensation Committee each year, and resulting recommendations are presented to the full Board for approval. Non-employee directors generally receive compensation consisting of both cash and equity. A significant portion of director compensation is paid in equity to align director compensation with the long-term interests of stockholders. Non-employee directors are also reimbursed for reasonable expenses incurred to attend Board meetings or other functions relating to their responsibilities as a director. The 2023 compensation program approved by the Board for our non-employee directors is summarized as follows:

  38. Non-Employee Director Compensation

    | | Stock Compensation | | Cash Compensation | | | Board Retainer: | | | | | | Non-Executive Chairperson | | 540,000 | | 180,000 | | All Other Directors | | 150,000 | | 85,000 | | Committee Fees: | | | | | | Audit Committee Chairperson | | — | | 25,000 | | Audit Committee Member | | — | | 12,500 | | Compensation Committee Chairperson | | — | | 20,000 | | Compensation Committee Member | | — | | 7,500 | | Governance, Nominating and ESG Committee Chairperson | | — | | 15,000 | | Governance, Nominating and ESG Committee Member | | — | | 5,000 | | Acquisition Committee Chairperson/Member | | — | | 30,000 | | Executive Committee Chairperson/Member | | — | | 50,000 |

  39. Non-Employee Director Compensation

    In addition to the foregoing, the 2023 director compensation program also contemplated the potential for additional amounts that could be paid to directors whose time commitment was in excess of anticipated levels. In January 2024, the Board determined that Mr. Lasher and Ms. Pomerantz should each receive an additional $75,000 stock award, based on an estimated 60 hours of additional time in excess of anticipated levels, at $1,250 per hour. The additional time was primarily related to work on behalf of the Executive Committee and the Compensation Committee. These stock awards were granted in January 2024, and therefore are not reflected in the table below summarizing the compensation paid to our directors for 2023 (but will be included in the table for 2024). The 2023 compensation for our non-executive chairperson, Mr. Akradi, consisted of $540,000 worth of our common stock and $180,000 in cash, with no additional compensation for service on Board committees. Mr. Akradi has played a critical role in our company’s restructuring and turnaround since 2017. His involvement, which has included contributions of significant time, leadership and expertise, has been instrumental to the development and execution of the overall strategy that has driven the company’s success. The Compensation Committee discussed Mr. Akradi’s compensation with its compensation consultant and, based on a competitive assessment of director pay, we understand that his pay is above market. However, we believe that his contributions and activity on our Board have significantly exceeded that of a traditional non-executive chairperson. Therefore, the Board has determined that his compensation is appropriate in order to reward him for his efforts and the company’s success, and to incentivize him to remain in this role. The 2023 equity compensation paid to directors was issued in quarterly installments of fully vested shares of our common stock, with the number of shares in each installment calculated based on the closing price of our common stock on such date. These dates were as follows: March 31, 2023; June 30, 2023; September 29, 2023; and December 29, 2023. The following table contains compensation information for our non-employee directors for the year ended December 31, 2023.

  40. Non-Employee Director Compensation

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2)(3) | Total ($) | | Bahram Akradi | 180,000 | 540,000 | 720,000 | | Lisa Bromiley | 97,500 | 150,000 | 247,500 | | Roy Easley | 115,000 | 150,000 | 265,000 | | Michael Frantz | 170,000 | 150,000 | 320,000 | | William Kimble | 110,000 | 150,000 | 260,000 | | Jack King | 90,000 | 150,000 | 240,000 | | Stuart Lasher | 197,500 | 150,000 | 347,500 | | Jennifer Pomerantz | 187,500 | 150,000 | 337,500 |

  41. Non-Employee Director Compensation

    ______________ (1)The 2023 equity compensation was issued in quarterly installments of fully vested shares of our common stock, with the number of shares in each installment calculated based on the closing price of our common stock on such date, rounded to the nearest full share. The grant date fair value of each such quarterly equity award is set forth in the following table:

  42. Non-Employee Director Compensation

    | Director | 3-31-2023 | 6-30-2023 | 9-30-2023 | 12-30-2023 | | Bahram Akradi | 135,000 | 135,000 | 135,000 | 135,000 | | All Other Directors | 37,500 | 37,500 | 37,500 | 37,500 |

  43. Non-Employee Director Compensation

    (2)As of December 31, 2023, no directors held any unvested shares of common stock. (3)As of December 31, 2023, no directors held any stock options.