DEF 14A of Forum Energy Technologies, Inc., Mar 28, 2025

DEF 14A of Forum Energy Technologies, Inc.

Filed Mar 28, 2025 · FY20240001401257-25-000047

Open on EDGAR

  1. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS As of the date of this proxy statement, the board of directors comprises eight members. Effective May 8, 2025, Mr. Gaut will retire from service as a member of the board of directors. At such time the size of the Board will be reduced to seven. These seven members are divided into three classes with two members in Class I, three members in Class II and two members in Class III. Mr. Raspino, a Class I director, was last elected by stockholders at the 2022 Annual Meeting of Stockholders, and his term will expire at this annual meeting. Ms. Beyer, also a Class I director, was appointed to the board of directors in December 2023, and her term will expire at this annual meeting. She was appointed by the board of directors which identified and recommended her as a director, in connection with its refreshment efforts. Ms. Angelle and Messrs. Carrig and Lux, each a Class II director, were last elected by stockholders at the 2023 Annual Meeting of Stockholders, and their term will expire at the 2026 Annual Meeting of Stockholders. Messrs. McShane and Rowsey, each a Class III director, were last elected by stockholders at the 2024 Annual Meeting of Stockholders, and their term will expire at the 2027 Annual Meeting of Stockholders. There are no family relationships among any of our directors or executive officers. Our board of directors believes that the current number of directors is appropriate for the Company at this time, taking into consideration the Company’s size and the broad diversity of skill sets of our directors.

  2. Nominees for Election

    Nominees for Election The board of directors, upon the recommendation of the Nominating, Governance and Sustainability Committee (the “NG&S Committee”), has nominated for submission to the stockholders Ms. Beyer and Mr. Raspino as Class I directors for a term of three years, each to serve until the 2028 Annual Meeting of Stockholders or until their successor is elected and qualified. As noted below, Leslie A. Beyer has been appointed to serve as Assistant Secretary of Land and Minerals Management at the U.S. Department of the Interior. If her appointment is confirmed by the U.S. Senate, Ms. Beyer may be required to resign from the Board. The Company will promptly announce any such resignation in accordance with the applicable rules of the SEC. If any of the nominees becomes unavailable for any reason before being elected and qualified, the board of directors, in its discretion, may designate a substitute nominee. If you have completed your proxy in favor of such unavailable nominee, your vote will be cast for the substitute nominee. Our board of directors has affirmatively determined that Ms. Beyer and Mr. Raspino are each “independent” as that term is defined by the applicable NYSE listing standards.

  3. OUR DIRECTORS

    OUR DIRECTORS Set forth below are the names of, and certain information as of March 14, 2025 with respect to, the two nominees for election as Class I directors and the other current members of the board of directors serving in 2025.

  4. Nominees - Class I Directors

    Nominees - Class I Directors

  5. Louis A. Raspino, Jr. – Age: 72, Positions: Compensation and Human Capital Committee, Chairperson

    Louis A. Raspino, Jr. – Age: 72, Positions: Compensation and Human Capital Committee, Chairperson Mr. Raspino was elected as a FET director in January 2012 and currently serves as the Chairperson of the Compensation and Human Capital Committee. He also currently serves as a director, audit committee member, and compensation committee Chairperson of Tidewater Inc., a public owner and operator of offshore support vessels in the energy industry. In addition, he serves as a director and member of the compensation and audit committees of American Bureau of Shipping, a private ship classification company. He served as Chairman of Clarion Offshore Partners, LLC, a Blackstone affiliate, from October 2015 to October 2017. Mr. Raspino has been a private investor and consultant from June 2011 to the present. Mr. Raspino was named President, Chief Executive Officer and a director of Pride International, Inc., a contract drilling company, in June 2005 and served in that capacity until its acquisition by Ensco plc in May 2011. He joined Pride International in December 2003 as Executive Vice President and Chief Financial Officer. From July 2001 until December 2003, he served as Senior Vice President, Finance and Chief Financial Officer of Grant Prideco, Inc. From February 1999 until March 2001, he held various senior financial positions, including Vice President of Finance for Halliburton Company. From October 1997 until July 1998, he was a Senior Vice President at Burlington Resources, Inc. From 1978, until its merger with Burlington Resources in 1997, he held a variety of positions of increasing responsibility at Louisiana Land and Exploration Company, most recently as Senior Vice President, Finance and Administration and Chief Financial Officer. Mr. Raspino holds a certificate in cybersecurity. The board of directors selected Mr. Raspino because of his significant experience as an executive officer of other energy companies; service as a member of other public company boards of directors; operational, strategic and financial expertise in the oil and gas business; and financial literacy and qualifications as an audit committee financial expert. In addition, in connection with his service as a senior executive officer, Mr. Raspino oversaw the implementation of programs designed to promote equality and to develop a culture of inclusiveness.

  6. Class II Directors

    Class II Directors

  7. Class III Directors

    Class III Directors

  8. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The Compensation and Human Capital Committee periodically engages Meridian Compensation Partners, LLC (“Meridian”), its independent compensation consultant, to conduct a market-based director compensation study. In December 2023, the study prepared by Meridian indicated that total non-executive director compensation was positioned competitively with the applicable market median. After considering this and other factors, the Compensation and Human Capital Committee determined that it was appropriate not to recommend any changes to the level of non-employee director compensation for 2024. Accordingly, the 2024 non-employee director compensation program consisted of the following retainers:

  9. DIRECTOR COMPENSATION

    | | Retainer ($) | | Annual Retainer | 70,000 | | Chairman of the Board Fee | 100,000 | | Lead Independent Director Fee | 20,000 | | Committee Retainers: | | | Chairperson of the Audit Committee | 20,000 | | Other Members of the Audit Committee | 10,000 | | Chairperson of the Compensation and Human Capital Committee | 15,000 | | Other Members of the Compensation and Human Capital Committee | 7,500 | | Chairperson of the NG&S Committee | 10,000 | | Other Members of the NG&S Committee | 5,000 |

  10. DIRECTOR COMPENSATION

    For 2024, the board of directors resumed its historical practice of providing $70,000 of the Annual Retainer in cash and $150,000 in the form of an award of restricted stock or restricted stock units (“RSUs”), as elected by the director, in order to further align each director’s interests with those of our other stockholders. Such awards vest in full on the first anniversary of the date of grant, and directors receiving RSUs may elect to defer settlement of all or a portion of such awards through their separation from service or the earlier of their separation from service and an elected year of settlement. In accordance with non-employee director program, on March 6, 2024, each non-employee director received a grant of 7,975 shares of restricted stock or 7,975 RSUs; however, Ms. Beyer received a grant of 1,330 RSUs on account of her appointment to the board of directors in December 2023. All of our directors remain subject to our Stock Ownership Requirements Policy, which requires them to hold at least $210,000 of the Company’s common stock or other eligible forms of beneficial ownership. As of December 31, 2024, all of our directors were in compliance with the Stock Ownership Requirements Policy or were within the five-year grace period afforded by the policy for them to obtain compliance. Pursuant to the Stock Ownership Requirements Policy, if a director has satisfied the policy’s requirements on a prior determination date, a decrease in the applicable closing stock price following such date does not cause a director to be non-compliant with the policy. The board of directors evaluates each director's stock ownership levels on an annual basis and utilizes the prior year's average stock price for purposes of measuring the value of a director’s stock ownership under the Stock Ownership Requirements Policy. The following table provides information on FET’s compensation for non-executive directors in 2024. Mr. Lux did not receive any additional compensation for his service as director in 2024.

  11. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | All Other Compensation ($) | Total ($) | | Evelyn M. Angelle | 95,000 | 150,010 | — | 245,010 | | Leslie A. Beyer | 76,875 | 25,017 | — | 101,892 | | John A. Carrig | 90,000 | 150,010 | — | 240,010 | | C. Christopher Gaut | 170,000 | 150,010 | 12,323 | 332,333 | | Michael McShane | 97,500 | 150,010 | — | 247,510 | | Louis A. Raspino, Jr. | 85,000 | 150,010 | — | 235,010 | | Paul E. Rowsey III | 87,500 | 150,010 | — | 237,510 |

  12. DIRECTOR COMPENSATION

    (1) The amounts in this column reflect the grant date fair value of grants of restricted stock and RSUs, as determined in accordance with FASB Accounting Standards Codification Topic 718. The grant date fair value of shares of restricted stock and RSUs issued in 2024 was $18.81 per unit based on the closing price of a share of our common stock on the date of grant. For additional information, see Note 15 to our consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2024. As of December 31, 2024, (i) each of Ms. Angelle, Mr. Gaut, Mr. McShane, Mr. Raspino and Mr. Rowsey held 7,975 shares of restricted stock; (ii) Ms. Angelle held 1,934 vested but unsettled RSUs that are subject to deferred settlement (on the earlier of (A) 10 years following the date of grant or (B) separation from service; (iii) Ms. Beyer held 1,330 unvested RSUs and 6,676 vested but unsettled RSUs that are subject to deferred settlement; and, (iv) Mr. Carrig held 7,975 unvested RSUs and 4,248 vested but unsettled RSUs that are subject to deferred settlement.

  13. Transactions with our significant stockholders, directors and officers

    Transactions with our significant stockholders, directors and officers On January 4, 2024 (the “Closing Date”), the Company consummated the acquisition (the “Variperm Acquisition”) of Variperm Holdings Ltd. (“Variperm”) for total consideration of approximately $150.0 million of cash and 2.0 million shares of the Company’s common stock (the “Shares”), subject to customary purchase price adjustments set forth in the related purchase agreement. As a result of the Variperm Acquisition, Variperm Energy Services Partnership (“Partnership”) and Slotting RemainCo Limited Partnership (“RemainCo” and, together with Partnership, the “Sellers”) each beneficially owned more than 5% of the Company’s outstanding common stock. Partnership received 1,034,343 shares of common stock and $45,746,368 in cash and RemainCo received 881,105 shares of common stock and $38,969,170 in cash in the Variperm Acquisition. To fund a portion of the purchase price, the Company entered into a $60.0 million Second Lien Seller Term Loan Credit Agreement (“Seller Term Loan”) with the Variperm stockholders, including the Sellers, and certain other lenders on the Closing Date. In November 2024, the Company repaid in full the Seller Term Loan. The Seller Term Loan was to mature in December 2026 and interest was to accrue according to the following schedule: (i) 11.0% per year for the period commencing on the Closing Date through the first anniversary of the Closing Date, (ii) 17.0% per annum for the period commencing on the first anniversary of the Closing Date through the second anniversary of the Closing Date and (iii) 17.5% per annum for the period commencing on the second anniversary of the Closing Date through the maturity date. In connection with the finalization of purchase price adjustments, the principal amount of the Seller Term Loan was reduced by approximately $0.3 million. On the Closing Date, the Company and the Sellers entered into an investor rights agreement providing for (i) a 180-day lock-up on transfers of the Shares after the Closing Date, subject to certain exceptions, (ii) customary registration rights under the Securities Act of 1933, as amended, (iii) a standstill and (iv) a voting agreement as to routine voting items at the 2024 Annual Meeting of Stockholders. The standstill and the voting agreement cease to apply to either Seller at the earlier of (a) the time such Seller beneficially owns less than 5.0% of the Company’s outstanding common stock or (b) two years from the Closing Date. The Sellers no longer have obligations under the standstill and the voting provisions because they no longer hold the requisite number of shares of the Company's outstanding common stock. During 2023 and 2024, a subsidiary of FET sold and purchased products and equipment to and from Endurance Lift Holdings LLC (“Endurance Lift”). FET recognized revenue and made payments in an aggregate amount totaling approximately $2 million in 2023 and $3 million in 2024 from such sales and purchases. Mr. John Schmitz, a former member of FET's board of directors, is the Chairman and Chief Executive Officer of Endurance Lift. These sales and purchases were made based on arms-length terms between the parties and represent less than 1% of the consolidated gross revenues for FET. During 2023 and 2024, a subsidiary of FET sold equipment to Axis Energy Services, LLC (“Axis”). FET recognized revenue in an aggregate amount totaling approximately $0.5 million in 2023 and $0.6 million in 2024. Mr. Schmitz is Chairman of the board of directors of Axis. These sales and purchases were made based on arms-length terms between the parties and represent less than 1% of the consolidated gross revenues for FET.

  14. Summary Compensation Table for 2024

    Summary Compensation Table for 2024 The following table provides information regarding the compensation awarded to or earned by our named executive officers in the prior two fiscal years.

  15. Summary Compensation Table for 2024

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards (1) ($) | Non-Equity Incentive Plan Compensation (2) ($) | All Other Compensation (3) ($) | Total ($) | | Neal A. Lux President and Chief Executive Officer | 2024 | 696,154 | — | 3,334,693 | 1,001,564 | 17,250 | 5,049,661 | | | 2023 | 663,462 | — | 3,264,920 | 513,519 | 13,200 | 4,455,101 | | D. Lyle Williams EVP and Chief Financial Officer | 2024 | 485,231 | — | 1,491,250 | 545,955 | 17,250 | 2,539,686 | | | 2023 | 463,077 | — | 1,601,646 | 302,252 | 13,200 | 2,380,175 | | John C. Ivascu EVP, General Counsel, Chief Compliance Officer and Corporate Secretary | 2024 | 392,692 | — | 978,218 | 415,845 | 11,874 | 1,798,629 | | | 2023 | 375,385 | — | 924,041 | 232,438 | 15,220 | 1,547,084 |

  16. Summary Compensation Table for 2024

    (1)The amounts in this column reflect the grant date fair value of time-based RSUs, and performance-based restricted stock units (“Performance RSUs”), as applicable, as determined in accordance with FASB Accounting Standards Codification Topic 718. The fair values of time-based RSUs granted in 2024 were $18.81 and $20.98 per unit; and $31.70 per unit granted in 2023, based on the closing price of a share of our common stock on the applicable date of grant. The grant date fair value of Performance RSUs granted in 2024 ranged from $16.53 to $22.46 per unit, which was determined using a Monte Carlo simulation including the following assumptions: (a) grant date stock price of $18.81; (b) simulation term of 3 years; (c) volatility of 48.06%; (d) a dividend yield of 0.00%; and (e) a risk free investment rate of 4.61%. The grant date fair value of Performance RSUs granted in 2023 ranged from $42.91 to $49.57 per unit, which was determined using a Monte Carlo simulation including the following assumptions: (a) grant date stock price of $31.70; (b) simulation term of 3 years; (c) volatility of 92.11%; (d) a dividend yield of 0.00%; and (e) a risk free investment rate of 4.26%. For additional information, see Note 15 to our consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2024. (2) The amounts in this column reflect the Executive Management Incentive Plan award payments that we made to each individual for service in 2024 and 2023, which were paid during the first quarter of 2025 and 2024, respectively. (3) This column reflects Company matching contributions under the 401(k) Plan.

  17. Outstanding Equity Awards at 2024 Fiscal Year End

    Outstanding Equity Awards at 2024 Fiscal Year End The table below sets forth awards that were granted under the Forum Energy Technologies, Inc. Amended and Restated 2016 Stock and Incentive Plan (the “2016 Plan”). Expiration dates are also shown for each individual award.

  18. Outstanding Equity Awards at 2024 Fiscal Year End

    | | Option Awards | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unxercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) ($) | | Neal A. Lux | | | | | 15,840 (2) | 245,362 | 15,840 (7) | 245,362 | | | | | | | 27,866 (3) | 431,644 | 13,933 (8) | | | | | | | | 86,391 (4) | 1,338,197 | 57,594 (9) | | | | | | | | 6,967 (5) | | | | | | | | | | 14,399 (6) | | | | | D. Lyle Williams | 758 | — | $373.60 | 2/21/2025 | 8,800 (2) | 136,312 | 8,800 (7) | 136,312 | | | 1,645 | — | $187.80 | 2/19/2026 | 13,670 (3) | 211,748 | 6,835 (8) | | | | 707 | — | $402.00 | 2/20/2027 | 34,557 (4) | 116,175 | 23,038 (9) | | | | 1,499 | — | $240.00 | 2/16/2028 | 3,418 (5) | 535,288 | | | | | | | | | 5,760 (6) | | | | | | | | | | 7,500 (10) | | | | | John C. Ivascu | 355 | — | $278.40 | 8/27/2025 | 5,720 (2) | 88,603 | 5,720 (7) | 88,603 | | | | | | | 7,886 (3) | 122,154 | 3,943 (8) | | | | | | | | 21,266 (4) | 116,175 | 14,177 (9) | | | | | | | | 1,972 (5) | 329,410 | | | | | | | | | 3,545 (6) | | | | | | | | | | 7,500 (10) | | | |

  19. Outstanding Equity Awards at 2024 Fiscal Year End

    (1) Amounts in this column were calculated by assuming a market value of our common stock of $15.49 per share, the closing price of our common stock on December 31, 2024. (2) Restricted stock units that vest on of February 18, 2025. (3) Restricted stock units that vest in two equal annual installments on February 17, 2025 and February 17, 2026. (4) Restricted stock units that vest in three equal annual installments on March 6, 2025, March 6, 2026, and March 6, 2027. (5) Performance RSUs granted on February 17, 2023 that became earned at 50% of target based on the Company’s absolute and relative TSR achievement over a performance period that ended December 31, 2024. The Performance RSUs vested on February 13, 2025, the date of the Compensation and Human Capital Committee’s determination of such performance. (6) Performance RSUs granted on March 6, 2024 that became earned at 50% of target based on the Company’s absolute and relative TSR achievement over a performance period that ended December 31, 2024. The Performance RSUs vested on February 13, 2025, the date of the Compensation and Human Capital Committee’s determination of such performance. (7) Performance RSUs granted on February 18, 2022 that were eligible to become earned subject to achievement of a minimum stock price threshold of $23.68, which was 125% of the Company’s closing stock price on the grant date, for a total of 20 trading days during the period from February 18, 2024 through February 18, 2025. The Performance RSUs were not earned by February 18, 2025 and were forfeited. (8) Performance RSUs granted on February 17, 2023 that are eligible to become earned following the conclusion of performance period ending December 31, 2025, subject to the Company's absolute and relative TSR achievement. The amount reflected herein is based on achievement at 100% of target, as required by SEC rules. (9) Performance RSUs granted on March 6, 2024 that are eligible to become earned in two equal tranches following the conclusion of performance periods ending December 31, 2025 and December 31 2026, in each case, subject to the Company's absolute and relative TSR achievement. The amount reflected herein is based on achievement at 100% of target, as required by SEC rules. (10) Restricted stock units that vested on January 24, 2025.

  20. Pay Versus Performance

    Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive “compensation actually paid” and certain financial performance of the Company. The compensation actually paid does not reflect the actual amount of compensation earned by or paid during the applicable year. For further information concerning the Company’s pay for performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Executive Compensation” above.

  21. Pay Versus Performance

    | Year | Summary Compensation Table Total for Mr. Gaut ($) | Compensation Actually Paid to Mr. Gaut ($) | Summary Compensation Table Total for Mr. Lux ($) | Compensation Actually Paid to Mr. Lux(1) ($) | Average Summary Compensation Table for Non-PEO NEOs(2) ($) | Average Compensation Actually Paid to Non-PEO NEOs(1) ($) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return(3) ($) | Net Income (Loss)(4) ($) | | 2024 | ―(5) | ―(5) | 5,049,661 | 2,787,056 | 2,176,741 | 1,147,665 | 96.51 | (135,326,000) | | 2023 | ―(5) | ―(5) | 4,455,101 | 2,361,907 | 1,963,630 | 1,103,499 | 138.13 | (18,876,000) | | 2022 | 7,165,066 | 9,301,332 | ―(5) | ―(5) | 2,361,808 | 3,415,694 | 183.80 | 3,712,000 |

  22. Pay Versus Performance

    (1) Represents the amount of “compensation actually paid” to Mr. Lux and the average “compensation actually paid” to the NEOs as a group (as listed in footnote 2 below), as computed in accordance with SEC rules and does not reflect the actual amount of compensation earned by or paid during the applicable year. In accordance with SEC rules, the following adjustments were made to total compensation to determine the compensation actually paid for 2024. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant.

  23. Pay Versus Performance

    | | Mr. Lux ($) | Average Non-PEO NEOs ($) | | Summary Compensation Table Total | 5,049,661 | 2,176,741 | | Less, value of Stock Awards reported in Summary Compensation Table | (3,334,693) | (1,242,270) | | Plus, year-end fair value of outstanding and unvested equity awards granted in the year | 2,317,158 | 864,829 | | Plus (less), year over year change in fair value of outstanding and unvested equity awards granted in prior years | (955,004) | (396,766) | | Plus (less), change in fair value from last day of prior fiscal year to vesting date for equity awards granted in prior years that vested in the year | (113,083) | (107,383) | | Less, prior year-end fair value of equity awards granted in prior years that failed to meet vesting conditions in the year | (176,983) | (147,486) | | 2024 Compensation Actually Paid | 2,787,056 | 1,147,665 |

  24. Pay Versus Performance

    (2) Represents the average of the amounts reported for the NEOs as a group, excluding any NEO who served as Chief Executive Officer during any portion of the applicable year, in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs included for purposes of calculating these amounts are (i) for 2024, Mr. Williams and Mr. Ivascu, (ii) for 2023, Mr. Williams and Mr. Ivascu and (iii) for 2022, Mr. Lux and Mr. Williams. (3) Cumulative TSR is calculated by dividing (a) the sum of (i) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (ii) the difference between the Company’s share price at the end of each fiscal year shown and the beginning of the measurement period, and the beginning of the measurement period by (b) the Company’s share price at the beginning of the measurement period. The beginning of the measurement period for each year in the table is December 31, 2020. (4) The dollar amounts reported represent the amount of net income (loss) reflected in the Company’s audited financial statements for the applicable year. (5) Mr. Gaut did not serve as a Chief Executive Officer during any portion of 2023 or 2024 and was not an NEO for such year. Mr. Lux did not serve as a Chief Executive Officer during any portion of 2022 but was an NEO for such year.

  25. Analysis of the Information Presented in the Pay Versus Performance Table

    Analysis of the Information Presented in the Pay Versus Performance Table As described in more detail in “Executive Compensation” above, the Company’s executive compensation program reflects a variable pay-for-performance philosophy. While the Company utilizes several performance measures to align executive compensation with Company performance, all of those measures are not presented in the Pay Versus Performance table. Moreover, the Company generally seeks to incentivize long-term performance and, therefore, does not specifically align the Company’s performance measures with compensation that is actually paid (as computed in accordance with SEC rules) for a particular year. In accordance with SEC rules, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table. The following charts set forth the relationship between compensation actually paid and the Company’s cumulative TSR and between compensation actually paid and the Company’s net income.

  26. Interests of Directors and Executive Officers

    Interests of Directors and Executive Officers Our directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this proposal, except to the extent of their ownership of shares of Common Stock.