DEF 14A of Evolution Petroleum Corp
Filed Oct 26, 2023 · FY20230001558370-23-016859
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
The Board of Directors
The Board of Directors Our directors are elected annually by the stockholders to serve until the next annual meeting of stockholders or until their successors are duly elected and qualified. The minimum number of directors is set forth in the Company's bylaws and may be increased by a majority vote of the Board. Currently, the Board has established the number of directors at six. Assuming the presence of a quorum, a majority of the votes cast in person or by proxy at the annual meeting is required for the election of each director.
Director Nominees
Director Nominees Our six nominees are currently serving as directors of the Company and are standing for re-election. We have determined that, of the incumbent directors, Mss. Bierria and Hargrave and Messrs. DiPaolo, Dozier and Herlin are “independent” directors as defined in the listing standards of the NYSE American. There are no familial relationships between any of our directors and executive officers. As discussed in more detail under the heading “Nominating and Corporate Governance Committee” in this proxy statement, the Board considers qualifications and other factors when evaluating individual directors, as well as the composition of the Board as a whole. As part of this process, the Board and its Nominating and Corporate Governance Committee review the particular experiences, qualifications, attributes or skills of each of the nominees. The nominees for director are:
Director Nominees
| Myra C. Bierria, age 51, has served as a director of Evolution since September 2022. She currently serves as Chairman of the Sustainability Committee and is a member of the Audit and Nominating and Corporate Governance Committees. Ms. Bierria is an experienced attorney in the areas of corporate governance, securities law, and management of public company board of directors’ matters. She was appointed in 2016 and currently serves as the Vice President and Corporate Secretary for Southern Company, a holding company for electric operating companies in three states and natural gas distribution companies in four states, mainly in the southeastern United States. In addition, Ms. Bierria began servings as the President of Southern Company Charitable Foundation in September 2023. Ms. Bierria was previously the Vice President and Corporate Secretary for Southern Company Gas (formally AGL Resources Inc.), an energy services holding company for Southern Company’s natural gas distribution companies. She also previously served as a business and technology attorney at Brobeck, Phleger & Harrison LLP where she specialized in securities offerings, venture capital transactions, and general corporate matters. Ms. Bierria holds a JD from Georgetown University Law Center and a BA from the University of California at Berkeley and is a member of the New York State Bar. We believe Ms. Bierria’s extensive corporate governance and legal experience, executive leadership experience in the energy industry and education qualify Ms. Bierria to serve on our Board and her assigned committees. |
Director Nominees
| Edward J. DiPaolo, age 70, has served as a director for Evolution since 2004. He currently serves as our Lead Independent Director, Chairman of our Nominating and Corporate Governance Committee, and as a member of our Audit and Compensation Committees. Mr. DiPaolo was a Senior Advisor at Kroll/ Duff & Phelps Securities, LLC from 2011 to 2022. Prior to that, he was an Energy Partner at Growth Capital Partners, L.P. for eight years following his 27 years at Halliburton Company, where he last served as Group Senior Vice President of Global Business Development. Mr. DiPaolo currently serves on several private company boards. He previously served as Chairman of the Board for Seventy Seven Energy, Inc. prior to its sale to Patterson-UTI Energy, Inc.; as a director for Willbros Group Inc.; as a director and interim Chairman of the Board of Directors of Boots and Coots, Inc. prior to its sale to Halliburton; as a director of Superior Well Services, Inc. prior to its sale to Nabors Industries, Inc.; and as a director of Inncore Subsurface Technologies prior to its sale to BJ Services Company. Mr. DiPaolo received his undergraduate degree in Agricultural Engineering in 1976 and a honorary Doctorate Degree from West Virginia University in 2013. He previously served on the Advisory Board for West Virginia University College of Engineering. We believe Mr. DiPaolo’s extensive experience in oilfield service, corporate advisory roles, education and Executive and Board of Director service to public and private companies qualify Mr. DiPaolo to serve on our Board, his assigned committees, and as our Lead Independent Director. |
Director Nominees
| William E. Dozier, age 71, has served as a director for Evolution since 2005. Mr. Dozier has over 48 years of oil and gas industry experience. He is the Chairman of the Compensation Committee, Chairman of the Reserves Committee, and a member of the Investment Committee. Since 2005, Mr. Dozier has been President of Extex Consulting, Inc., an independent oil and gas consulting firm. From 1992 to 2005, Mr. Dozier served as Senior Vice President of Operations, and later as Senior Vice President for Business Development, for Vintage Petroleum, a large publicly traded global independent oil and gas company acquired by Occidental Petroleum. From 1983 to 1992, he was Manager of Operations Engineering for Santa Fe Minerals, a privately held E&P Company. Mr. Dozier began his career with Amoco Production Company in 1975, working in all phases of production, reservoir evaluations, drilling and completions in the Mid-Continent and Gulf Coast areas of the United States. From May 2009 to July 2011, Mr. Dozier served on the Board of Directors of CAMAC Energy, Inc. (formerly Pacific Asia Petroleum, Inc.) Mr. Dozier has previously served on several private and charitable boards. Mr. Dozier served on the External Advisory Committee for The University of Texas Cockrell School of Engineering Department of Petroleum and Geosystems Engineering. He is a Registered Petroleum Engineer in the State of Texas with a B.S. in Petroleum Engineering from The University of Texas at Austin and is a member of the National Association of Corporate Directors. We believe Mr. Dozier’s extensive experience in oil and gas exploration and development, education and Executive and Board of Director service to public companies qualify Mr. Dozier to serve on our Board and his assigned committees. |
Director Nominees
| Marjorie A. Hargrave, age 59, has served as a director of Evolution since March 2021. She currently serves as Chairman of the Audit Committee and is a member of the Compensation and Nominating and Corporate Governance Committees. Ms. Hargrave is an experienced executive with a background in financial management, strategic planning, M&A, risk management and investment banking. Ms. Hargrave is currently Chief Financial Officer of Leanin’ Tree, Inc., a manufacturer and distributor of greeting cards. She is the former President and CFO of Enservco, a diversified national provider of specialized well-site services to the domestic onshore oil and gas industry. She served as Chief Financial Officer of CTAP, a privately held distributor of tubing and casing throughout the United States, from 2010 to 2016. Ms. Hargrave also served as CFO of High Sierra Energy, LP, a start-up energy company which focused on midstream acquisitions, from 2005 to 2009. Ms. Hargrave’s previous experience also includes management and associate roles with Black Hills Corporation, Xcel Energy, and Merrill Lynch & Co. Ms. Hargrave holds a Bachelor’s degree in economics from Boston University and a Master’s degree in economics from New York University. We believe Ms. Hargrave’s extensive experience in the oil and gas industry, leadership of a publicly traded oil and gas company and education qualify Ms. Hargrave to serve on our Board and her assigned committees. |
Director Nominees
| Robert S. Herlin, age 68, the founder of our Company, has been a director since the Company's inception in September 2003, has served as Chairman of the Board of Directors since January 2009, and is a member of the Investment and Sustainability Committees. He served as the Company's interim Chief Executive Officer from June 2018 to July 2019. He held the title of Chief Executive Officer from 2003 until December 2015 and the title of President from 2003 through September 2014. Mr. Herlin has over 40 years of experience in engineering, energy transactions, operations and finance with small independents, larger independents and major integrated oil companies. Mr. Herlin currently serves as director and a member of the audit and compensation committees for Enservco Corporation, a publicly traded company specializing in well enhancement and fluids logistics for E&P operators in the U.S., and as a director of Well Lift, Inc., a privately held company partially owned by our Company that applies the GARP® artificial lift technology developed by the Company. Mr. Herlin also served on the Board of Directors of Boots and Coots, Inc., an oil field services company, from 2003 until its sale to Halliburton Company in September 2010. Mr. Herlin is the President and owner of AVL Resources, LLC, a privately held investment company. Prior to 2003, Mr. Herlin served in various officer capacities for upstream and midstream oil and gas and telecom companies, both private and public. Mr. Herlin served on the Engineering Advisory Board for the Brown School of Engineering at Rice University and the Centennial Council for Chemical and BioMolecular Engineering. Mr. Herlin graduated with honors from Rice University with B.S. and M.E. degrees in chemical engineering and earned an MBA from Harvard University. We believe Mr. Herlin’s executive leadership of our Company since its founding, extensive oil and gas industry experience, multi-functional expertise, education and his Board of Director service to public companies qualifies Mr. Herlin to serve on our Board and his assigned committees. |
Director Nominees
| Kelly W. Loyd, age 49, has served as a director of Evolution since 2008. Mr. Loyd was appointed to serve as interim President and Chief Executive Officer in June 2022 and was selected as President and Chief Executive Officer on October 26, 2022. In addition, he currently serves as Chairman of the Investment Committee and a member of the Sustainability and Reserves Committees. Mr. Loyd served as a member of our Compensation and Nominating and Corporate Governance Committees until his appointment to interim President and Chief Executive Officer in June 2022. Since 2004, he has been associated with Petralis Energy Partners, LLC and JVL Advisors, LLC, both being private energy investment vehicles, where he was involved in and oversaw numerous upstream investments in private and public energy companies. From 2001 to 2004, he was in the energy corporate finance investment banking group at RBC Capital Markets and Howard Frazier Barker Elliot. Prior to 2001, Mr. Loyd was a founder and controller of L.A.B. Sports and Entertainment, Managing Partner of Tigre Leasing, L.L.P. and an analyst in Jefferies and Company, Inc.'s energy corporate finance investment banking group. Mr. Loyd earned a B.S. in Economics with Finance Applications from Southern Methodist University and his MBA from Rice University. We believe Mr. Loyd’s extensive experience in energy investment banking and his education qualify Mr. Loyd to serve on our Board and his assigned committees. |
Director Nominees
We believe that the nominees will be available and able to serve as directors. In the event that a nominee is unable to serve, the proxy holders will vote the proxies for such other nominee as they may determine. The Board of Directors unanimously recommends that the stockholders vote “FOR” the election of each of the director nominees listed above. PROPOSAL TO RATIFY THE APPOINTMENT OF MOSS ADAMS LLP AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR ENDING JUNE 30, 2024 The Audit Committee of our Board of Directors has appointed the firm of Moss Adams LLP as the Company's independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending June 30, 2024. We are not required to seek stockholder approval for the appointment of our independent registered public accountant; however, the Audit Committee and the Board of Directors believe it to be sound corporate governance to seek such approval. If the appointment is not ratified, the Audit Committee will investigate the reasons for stockholder rejection and will re-consider the appointment. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accountant at any time during the year if it determines that such a change would be in the best interests of our company and our stockholders. The Company has invited a representative from Moss Adams LLP to be present at the 2023 annual meeting. In the event that a representative of Moss Adams LLP is present at the annual meeting, they will have an opportunity to make a statement, if they so desire, and will be available to respond to appropriate questions.
Board of Directors
Board of Directors The property, affairs and business of our company are under the general supervision of our Board of Directors as provided by the laws of the State of Nevada and our bylaws. We have separately designated standing Audit, Compensation, Investment, Nominating and Corporate Governance, Reserves, and Sustainability Committees of the Board of Directors. The Audit Committee was established in accordance with the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the requirements of the NYSE American. During fiscal year 2023, the Board of Directors met eight times. Each director, during the period for which he or she was a director in fiscal year 2023, attended 100% of the meetings of the Board of Directors and of the meetings held by all committees of the Board on which such director served.
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS We believe that attracting and retaining qualified non-employee directors is critical to our future value, growth and governance and that providing a competitive total compensation package is necessary to accomplish that objective. Our Board of Directors also believes that a substantial portion of the compensation package for our non-employee directors should be equity-based to align the interests of our directors with our stockholders. Our non-employee directors receive compensation for serving on the Board and for serving as committee members. The compensation plan for our non-employee directors constitutes a cash base retainer of $50,000 per year, plus meeting fees of $1,500 per day for Board and committee meetings attended in person and $1,000 per day for those meetings attended by video or telephone, capped by a maximum of two meetings fees per day. Additional cash retainers are paid per annum for committee chairs as follows:
COMPENSATION OF DIRECTORS
| Chairman of the Board | $55,000 | | Audit Committee Chair | $18,000 | | Compensation Committee Chair | $12,000 | | Nominating & Corporate Governance Committee Chair | $12,000 | | Investment Committee Chair | $12,000 | | Sustainability Committee Chair | $12,000 | | Reserves Committee Chair | $6,000 |
COMPENSATION OF DIRECTORS
In addition to the cash retainers and fees, the outside directors receive a payment of restricted stock with a fair market value of approximately $100,000 per annum awarded as of the date of each annual stockholders meeting. These shares of restricted stock usually vest at the earlier of one year from the date of grant or the date of the next annual meeting. Directors first elected other than at an annual meeting receive a prorated cash retainer and stock grant. We also reimburse our non-employee directors for direct expenses they incur in their capacity as directors, generally limited to travel costs related to attending Board and committee meetings. The following table provides information concerning the compensation of our non-employee directors for the fiscal year ended June 30, 2023.
COMPENSATION OF DIRECTORS
| | Fees Earned | | | | | | or Paid in | Stock | All Other | | | Name | Cash (1) | Awards (2) | Compensation (3) | Total | | Myra C. Bierria | $68,024 | $182,893(4) | $10,193 | $261,110 | | Edward J. DiPaolo | $94,053 | $99,704 | $6,716 | $200,473 | | William E. Dozier | $105,354 | $99,704 | $6,716 | $211,774 | | Marjorie A. Hargrave | $103,452 | $227,491(4) | $6,716 | $337,659 | | Robert S. Herlin | $128,799 | $99,704 | $6,716 | $235,219 | | Kelly W. Loyd(5) | $6,500 | $— | $1,366 | $7,866 |
COMPENSATION OF DIRECTORS
| (1) Includes annual cash retainer fee, Board and committee meeting fees, and committee chair fees for each non-employee director during fiscal year 2023. The following table outlines the number of meetings held during the fiscal year 2023: |
COMPENSATION OF DIRECTORS
| Meetings held in fiscal year 2023 | | | Board of Directors | 8 | | Audit Committee | 5 | | Compensation Committee | 5 | | Nominating & Corporate Governance Committee | 6 | | Investment Committee | 1 | | Sustainability Committee | 2 | | Reserves Committee | 2 |
COMPENSATION OF DIRECTORS
| (2) Reflects the aggregate grant date fair value of restricted stock awards, subject to vesting, granted under our stock plan to each of our directors for service as a director during fiscal year 2023 computed in accordance with FASB ASC Topic 718. See Note 11, “Stockholders’ Equity,” to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended June 30, 2023 for additional details. Generally, the full grant date fair value is the amount that we would expense in our financial statements over the award’s vesting schedule. These amounts reflect our accounting expense, and do not correspond to the actual value that will be recognized by our directors upon vesting. |
COMPENSATION OF DIRECTORS
| (3) Represents cash dividends paid on unvested restricted stock beneficially owned. |
COMPENSATION OF DIRECTORS
| (4) Include pro-rated sign-on awards granted to directors during fiscal years 2023 and 2022. |
COMPENSATION OF DIRECTORS
| (5) Mr. Loyd was appointed President and Chief Executive Officer on October 26, 2022 and commencing on November 1, 2022 and thus no longer receives compensation for his role as director. |
Director Outstanding Equity Awards at Fiscal Year End 2023
Director Outstanding Equity Awards at Fiscal Year End 2023
Director Outstanding Equity Awards at Fiscal Year End 2023
| | Stock Awards | | | Director | Number of shares that have not vested (#)(1) | Market value of shares that have not vested ($) (2) | | Myra C. Bierria | 24,062 | $194,180 | | Edward J. DiPaolo | 14,859 | $119,912 | | William E. Dozier | 14,859 | $119,912 | | Robert S. Herlin | 14,859 | $119,912 | | Marjorie A. Hargrave | 14,859 | $119,912 |
Director Outstanding Equity Awards at Fiscal Year End 2023
| (1) These awards of time-vested restricted stock vest in full on the earlier of December 8, 2023, or the date of the 2023 annual meeting of stockholders of the Company, scheduled for December 7, 2023. |
Director Outstanding Equity Awards at Fiscal Year End 2023
| (2) Represents the fair market value of equity awards not currently vested as of June 30, 2023, using a closing stock price of $8.07 per share on June 30, 2023. |
COMPENSATION DISCUSSION AND ANALYSIS
| VI. | Severance Arrangements |
III. Roles in the Decision-Making Process
III. Roles in the Decision-Making Process The primary participants in the decision-making process in matters involving executive compensation are the Compensation Committee, the Board of Directors and the CEO. The CEO makes recommendations to the Compensation Committee regarding the compensation for the named executive officers, other than himself. However, the Compensation Committee makes the final determination on all compensation recommendations to the Board of Directors. The Compensation Committee may from time to time engage compensation consultants, who provide benchmark data regarding competitive levels of executive pay as well as compensation trends and best practices within our industry. Additionally, the committee may use other external resources to gather data, such as SEC filings of other publicly traded oil and natural gas companies included in our peer group. Since the Company is unusual in that it does not have the same complexity of drilling and field operations as most of the peer companies, the Compensation Committee uses the peer group comparison data as one factor among many others that it considers. As described in its charter, the Compensation Committee is tasked with reviewing and making recommendations to the Board of Directors regarding executive compensation and benefit plans and programs. For the named executive officers, the Compensation Committee makes the final determination as to levels of base salary, annual incentive program targets and payouts, and long-term incentive program targets and grants, subject to Board of Directors approval.
IV. Items the Compensation Committee Considers When Making Compensation Decisions
IV. Items the Compensation Committee Considers When Making Compensation Decisions When making compensation decisions that affect the named executive officers, the Compensation Committee takes a number of items into consideration, which are discussed below. In addition, the Compensation Committee may also find it necessary from time to time to consider other items not specifically listed below. Market Practices On a periodic basis, the Compensation Committee reviews trends in executive compensation, both within a group of comparable exploration and production companies (our “peer group”) and in the broader energy industry. In addition, the Compensation Committee also considers the relative amount of compensation paid to similar executives within the peer group to establish median levels. Once selected, the peer group for a specific fiscal year is not later revised. For fiscal year 2023, the Compensation Committee engaged NFP Compensation Consulting to perform a market study to analyze both absolute and targeted levels of executive pay. Some factors included pay mix, long-term incentive vehicle utilization, and annual incentive program targets and structures, utilizing data from proxy statement disclosures as well as published surveys. The Compensation Committee seeks to maintain a robust peer group for comparison purposes. As a result, new peer companies will occasionally be added as existing peers are removed due to material changes to their business. In evaluating which peer companies to include, the Compensation Committee reviewed: 1) other companies of similar size; 2) other companies in the oil and gas exploration and production industry; and 3) companies with similar strategies regarding acquisitions and shareholder returns. The Compensation Committee then analyzed each company based on, but not limited to:
IV. Items the Compensation Committee Considers When Making Compensation Decisions
Business Environment As a public company engaged in the acquisition, exploitation and development of oil and natural gas properties we operate in an extremely cyclical industry. In an effort to combat this volatile environment, the Company has maintained an experienced management team that has grown share value in an organic manner without taking on burdensome debt that could constrain future operations. However, financial success is and will continue to be heavily impacted by commodity prices that have experienced extreme volatility over the years. As discussed in “Elements of Our Compensation Program for Fiscal Year 2023,” annual short-term and long-term incentive compensation include objective performance metrics that can be measured in numerical and/or operational terms. However, the Compensation Committee has exercised, and will continue to exercise, a degree of discretion in administering the compensation programs for the named executive officers in order to retain flexibility to take into account and adjust for special or unusual factors, such as commodity price volatility, as well as other factors, including the fact that all of the Company revenue is dependent on the activities of third-party operators. The Compensation Committee believes that this is necessary in order to retain and reward management for efforts that may not immediately translate to specific performance metrics, but that ultimately will drive long-term, sustainable increases in stockholder value. The Compensation Committee recommended to the Board and received approval to revise the compensation structure to become more quantitative and performance-based beginning in fiscal year 2015 with a significant portion of compensation at risk, particularly as to long-term incentive pay. This trend has continued into fiscal year 2023 and is expected to continue for the foreseeable future. Consideration of Risk Our compensation programs have been constructed to provide the named executive officers with incentives to increase stockholder value over the long term, while avoiding excessive risk-taking in the short term. A significant portion of all employees’ compensation has and will continue to be paid out through equity grants vesting over multi-year periods. In establishing performance goals for compensation programs, the Compensation Committee has utilized a mix of safety, regulatory, operational, and strategic metrics to avoid excessive weight on any single criterion. The Compensation Committee believes that the Company’s executive compensation practices are appropriate to (i) encourage our named executive officers to take appropriate levels of risk; (ii) create sustained stockholder value over time; and (iii) are appropriate based on our size and market capitalization. Review of Say on Pay Advisory Vote At the 2022 annual meeting, the Company’s stockholders had the opportunity to provide an advisory vote on the compensation paid to the named executive officers. Over 95% of the total shares voted at the 2022 annual meeting were cast in favor of the compensation provided to the named executive officers. Accordingly, the Compensation Committee believes these results affirmed broad stockholder support for its approach to executive compensation and did not believe it was necessary to make changes to the named executive officer compensation program for 2023 specifically in response to the advisory vote.
V. Elements of Our Compensation Program for Fiscal Year 2023
| • | short-term incentive pay (“STIP”), comprised of performance-based cash incentive awards; |
V. Elements of Our Compensation Program for Fiscal Year 2023
| • | long-term incentive pay (“LTIP”), comprised of equity-based compensation including: |
V. Elements of Our Compensation Program for Fiscal Year 2023
| ◦ | Performance-based restricted common stock awards that vest if Company performance relative to defined peer groups meet predetermined targets, which are eligible for dividends prior to vesting; and |
V. Elements of Our Compensation Program for Fiscal Year 2023
| ◦ | Performance-based contingent share units that vest if Company performance relative to defined peer groups meet predetermined outperform targets, which are not eligible for dividends prior to vesting; and |
V. Elements of Our Compensation Program for Fiscal Year 2023
| (1) In any metric category, if the Threshold is achieved, 50% of weighting is earned. If the Target is achieved, 100% of weighting is earned. If the Outperform is achieved, 133% of weighting is earned. Achievement is prorated linearly once the Threshold level is achieved between Threshold, Target and Outperform, resulting in earning between 50% and 133% of weighting. If the Threshold is not achieved in a metric category, no credit is earned. The Outperform level is a cap in that no additional award is earned for performance in excess of the Outperform level. |
V. Elements of Our Compensation Program for Fiscal Year 2023
| (2) Free cash flow is defined as cash flow from operations, excluding changes in working capital and cash incentive compensation, less capital expenditures other than acquisitions/divestments and elective development drilling. |
V. Elements of Our Compensation Program for Fiscal Year 2023
| (4) Total shareholder return was based on the percentage appreciation in the value of our Company’s and each peer company’s common shares during the fiscal year, with any dividends paid during the year reinvested. |
V. Elements of Our Compensation Program for Fiscal Year 2023
Long-Term Incentive Pay (“LTIP”) We utilize an LTIP program to award restricted shares and restricted units as a compensation vehicle that we believe aligns the interests of our officers and all other employees with stockholders. The Compensation Committee believes that delivering a significant portion of total compensation in the form of long-term incentives that vest over a period of several years and the achievement of performance objectives acts to retain our management team over the long-term and motivate them to engage in activities that will promote sustainable increases in the value of our company and the price of our common stock. Primarily through long-term incentive grants, our named executive officers have accumulated significant share ownership, with beneficial ownership as of September 30, 2023 totaling approximately 2.2% of outstanding common shares. In addition, all employees, including the named executive officers, are more fully aligned with stockholders as a result of our stock retention policy, which is described in more detail in the section “Other Compensation Policies Affecting the Named Executive Officers.” All employees of the Company are generally granted time-vested restricted common stock and performance-based restricted common stock on an annual basis, following completion and acceptance of the annual independent engineering reserve report and year-end financial statement audit. In general, the size of the restricted share grants for all employees, including the named executive officers, is determined utilizing individual LTIP targets that are based on a percentage of each employee's base salary. For fiscal year 2023, the Compensation Committee and the Board approved an LTIP structure that is weighted towards performance-based targets (66.7%), with the balance based on time-based vesting targets (33.3%). Performance-based awards The Company has granted performance-based restricted common stock and performance-based contingent share units that are earned based on the three-year trailing total stockholder return (“TSR”) of the Company's common stock compared to the peer group set forth above. Vesting of awards occurs at the end of predetermined TSR measurement periods, typically three years. For fiscal year 2023, the number of performance-based restricted common stock that vests over the three-year measurement period ending June 30, 2025 is based on the targets and related percentages as set forth in the table below:
V. Elements of Our Compensation Program for Fiscal Year 2023
| Relative TSR Quartile(1) | | | | | 1 | 2 | 3 | 4 | | (75 – 100%) | (50 – 75%) | (25 – 50%) | (0 – 25%) | | 100% | 100% | 50% | 0% |
V. Elements of Our Compensation Program for Fiscal Year 2023
| (1) If any company in the peer group declares bankruptcy or becomes insolvent, it remains in the peer group with a TSR of negative 100%. Any company that merges with a change of control or is sold remains in the peer group with a TSR computed on the final merger or sale value. Paid dividends are included in calculations of stockholder return. |
V. Elements of Our Compensation Program for Fiscal Year 2023
Performance-based contingent share units vest in full if the combination of the Relative TSR is in the top quartile (75-100%) over the three-year measurement period ending June 30, 2025. Time-Vested Restricted Common Stock For fiscal year 2023, 33.33% of the LTIP award shares for each named executive officer is time-vested restricted common stock that is based on continuous employment over the next three years from date of grant, vesting in equal installments on the anniversary of grant. The following table sets forth the total target LTIP awards granted to each of the named executive officers during fiscal year 2023:
V. Elements of Our Compensation Program for Fiscal Year 2023
| Named Executive Officer | Target % of FY23 Base Pay | Individual LTIP Grant | Number of Target Time-Vested Restricted Shares (1) | Maximum Number of Total Performance-Based Restricted Shares (2) (3) | | Kelly W. Loyd | 150 % | $562,500 | 23,408 | 46,817 | | President and Chief Executive Officer | | | | | | J. Mark Bunch (4) | 100 % | $305,000 | 4,521 | 9,041 | | Chief Operating Officer | | | | | | Ryan Stash | 100 % | $292,200 | 11,579 | 23,159 | | Senior Vice President, Chief Financial Officer & Treasurer | | | | |
V. Elements of Our Compensation Program for Fiscal Year 2023
| (2) Performance-based restricted shares may vest only after satisfying achievement of various performance metrics discussed above. |
V. Elements of Our Compensation Program for Fiscal Year 2023
| (4) Mr. Bunch was appointed Chief Operating Officer on February 21, 2023, and his LTIP was prorated based on the days in the fiscal year 2023 that he served in his role. |
V. Elements of Our Compensation Program for Fiscal Year 2023
| Fiscal Year | Sign-on Stock Awards | Stock Options | Stock Awards (1) | Total Awards (2) | Common Shares Outstanding (3) | | 2023 | 222,500 | — | 303,877 | 526,377 | 33,440,195 | | 2022 | 82,500 | — | 319,519 | 402,019 | 33,546,236 |
V. Elements of Our Compensation Program for Fiscal Year 2023
| (1) Reflects target time-vested restricted stock, performance-based restricted stock awards and performance-based contingent share units awarded for the fiscal years ended June 30, 2023 and 2022. |
VI. Severance Arrangements
VI. Severance Arrangements Change in Control Policy All of our employees, including the named executive officers, are covered by the Evolution Petroleum Corporation Severance Policy for Change in Control Events (“CIC Policy”), which was adopted by the Compensation Committee in August 2010 and amended and restated in May 2023. In the event a named executive officer is entitled to benefits under an employment agreement and the CIC Policy, the greater benefit will prevail. Under the terms of the CIC Policy, a change in control event is defined as (i) the sale of all, or substantially all, of the Company’s assets; (ii) approval by the Company’s stockholders of a merger or sale of the corporation with or into another entity in which the majority of the Board of Directors will change; or (iii) one or more affiliated entities or persons acquire common stock sufficient to collectively own or control forty percent (40%) or more of the outstanding common stock. The CIC Policy provides that upon termination of employment within one year following a change in control all unvested stock options, warrants and restricted stock held by employees and directors will fully vest, provided that awards with performance criteria will vest based on performance achieved as of the date of the change in control. In addition, employees terminated within one year of the change in control event receive severance pay in the amount of one year of base pay and targeted annual discretionary bonus, plus one-year continuation of the Company's subsidy of health insurance benefits. The following table shows, as of June 30, 2023, the estimated potential payments and benefits that would be received by our named executive officers based upon a hypothetical termination of employment in each of the circumstances indicated in the table.
VI. Severance Arrangements
| Named Executive Officer | Severance Plan Payment (1) | Other Benefits (2) | Fair Market Value of Accelerated Equity Compensation (3) | Total Value | | Kelly W. Loyd | | | | | | Change in Control | $750,000 | $24,725 | $1,562,626 | $2,337,351 | | Death or Disability | $— | $— | $1,562,626 | $1,562,626 | | J. Mark Bunch | | | | | | Change in Control | $533,750 | $27,530 | $791,530 | $1,352,810 | | Death or Disability | $— | $— | $791,530 | $791,530 | | Ryan Stash | | | | | | Change in Control | $511,350 | $26,280 | $1,546,099 | $2,083,729 | | Death or Disability | $— | $— | $1,546,099 | $1,546,099 |
VI. Severance Arrangements
| (1) Represents one year of salary and one year of short-term incentive bonus, based on the officer's target incentive. |
VI. Severance Arrangements
| (2) Represents an estimate of the cost to reimburse the executive's contribution to the cost of one year of health insurance benefits provided to the named executive officer based on coverage and contribution rates in effect at June 30, 2023. |
VI. Severance Arrangements
| (3) The fair market value of accelerated equity awards includes only those awards that were not currently vested, assuming performance at the maximum level, as of June 30, 2023, using a closing stock price of $8.07 per share on such date. |
VII. Other Compensation Policies Affecting the Named Executive Officers
VII. Other Compensation Policies Affecting the Named Executive Officers Stock Retention Policy In May 2023, the Board of Directors revised the Evolution Petroleum Corporation Stock Retention Policy for Directors and Employees (the “stock retention policy”). The stock retention policy requires all directors and employees, including the named executive officers, to retain share ownership at specified levels, depending on level of responsibility. The named executive officers must retain a number of shares of Common Stock equal to 60% of the total number of award shares granted to such officer through the Company’s equity incentive plan, short-term incentive plan or any similar or successor plans that have vested during the trailing thirty-six (36) month period. Other corporate officers and managers are subject to similar requirements, except the look-back period is twenty-four (24) months. For all other employees, the look-back period is twelve (12) months. In addition, each non-employee director must retain a number of shares or equivalent equity awards equal to 60% of the total number of share awards received through the Company’s equity incentive plan, short-term incentive plan or any similar or successor plans that have vested during the trailing thirty-six (36) months, excluding stock awards received in lieu of a cash retainer. Employees and directors have the later of two years from the initial date of employment or appointment or the date of adoption of this policy to comply with the stock retention policy. As a result of our substantial reliance on long-term incentives historically, coupled with the stock retention policy, our directors and named executive officers beneficially owned approximately 9.2% of the Company’s common stock as of September 30, 2023. Based on stock ownership reports filed with the SEC, all directors and executive officers were in compliance with this stock retention policy as of September 30, 2023. Timing of Grants and Release of Material Non-Public Information The Company has historically maintained consistency in the timing of LTIP grants to all employees, including the named executive officers. Such grants have typically been made in connection with the approval of our fiscal year-end audited financial statements and year-end engineering reserve report by the Audit Committee and the Board of Directors. In certain cases in the past, grants have been delayed until the annual meeting as a result of additional deliberations by the Compensation Committee or other factors. The Company typically issues awards during open trading windows and has not in the past timed, nor does it plan to time, the release of material, non-public information to affect the value of executive compensation. Financial Restatement and Incentive Compensation Recoupment In September 2023, the Board of Directors of the Company approved and adopted an Incentive Compensation Recoupment Policy intended to meet the requirements of newly adopted Section 811 of the NYSE American Company Guide and new Rule 10D-1 of the Securities Exchange Act of 1934, as amended. The Company is adopting the policy in advance of the deadline mandated by Section 811. As required by Section 811, the Company’s policy provides for the recovery of incentive compensation from current or former executive officers in the event of an accounting restatement. If the Company is required to prepare a Restatement, the Board of Directors shall, unless the Compensation Committee determines it to be impracticable, take reasonably prompt action to recoup all recoverable compensation from any covered person, as defined in the policy. Trading in the Company’s Stock and Derivatives No employee or director is permitted to execute open market transactions in the Company’s securities during any blackout period except as prearranged through an approved 10b5-1 sales trading plan. In addition, the Company believes that none of its named executive officers or directors have entered into derivative transactions linked to the Company’s securities. Executive Officers of the Company Set forth below is information regarding our executive officers, including their ages, positions with our company and principal occupations and employers for at least the last five years. For information concerning executive officers’ ownership of our common stock, see the table and related information provided under the caption “Security Ownership of Certain Beneficial Owners and Management.”
VII. Other Compensation Policies Affecting the Named Executive Officers
| Kelly W. Loyd, age 49, has served as a director of Evolution since 2008. Mr. Loyd was appointed to serve as interim President and Chief Executive Officer in June 2022 and was selected as President and Chief Executive Officer on October 26, 2022. In addition, he currently serves as Chairman of the Investment Committee and as a member of the Sustainability and Reserves Committees. Mr. Loyd served as a member of our Compensation and Nominating and Corporate Governance Committees until his appointment to interim President and Chief Executive Officer in June 2022. Since 2004, Mr. Loyd has been associated with Petralis Energy Partners, LLC and JVL Advisors, LLC, both being private energy investment vehicles, where he was involved in and oversaw numerous upstream investments in private and public energy companies. From 2001 to 2004, Mr. Loyd was in the energy corporate finance investment banking group at RBC Capital Markets and Howard Frazier Barker Elliot. Prior to 2001, Mr. Loyd was a founder and controller of L.A.B. Sports and Entertainment, Managing Partner of Tigre Leasing, L.L.P. and an analyst in Jefferies and Company, Inc.'s energy corporate finance investment banking group. Mr. Loyd earned a B.S. in Economics with Finance Applications from Southern Methodist University and his MBA from Rice University. |
VII. Other Compensation Policies Affecting the Named Executive Officers
| J. Mark Bunch, age 64, was appointed by the Board of Directors to serve as Chief Operating Officer on February 21, 2023. Mr. Bunch has been providing consulting services to the Company since 2016. From 2020 until he joined the Company, Mr. Bunch was a Senior Vice President and founding partner with Alamo Resources III, LLC. Since 2016, Mr. Bunch has also provided consulting services to upstream energy companies through his wholly-owned firm, Dantoria Energy, LLC. In 2017, he was associated with Camber Energy, Inc. as Senior Vice President, Engineering and Operations. From 2012 to 2016, he was Asset Manager for Davis Petroleum Corp. From 2007 to 2012, he was Chief Operating Officer and founding partner of Mecom Oil, LLC. From 1999 to 2007, he was Vice President for Huddleston & Co., Inc. From 1993 to 1999, he was Engineering Manager for Petrocorp Inc. Prior to 1992, Mr. Bunch was employed by Arco Oil and Gas Company. Mr. Bunch is a registered professional engineer in Texas and earned a B.S. in Petroleum Engineering from Texas A&M University. |
VII. Other Compensation Policies Affecting the Named Executive Officers
| Ryan Stash, age 47, was appointed by the Board of Directors to serve as Senior Vice President, Chief Financial Officer, Treasurer, and Corporate Secretary November 18, 2020. Mr. Stash previously served as Vice President and Chief Financial Officer of Harvest Oil & Gas Corp from October 2018 to November 2020. Prior to joining Harvest Mr. Stash served as a Managing Director at Regions Securities focused on the energy sector. Prior to that, he spent eleven years in the Energy Investment Banking Group for Wells Fargo Securities in Houston rising to the level of Director. Previously, Mr. Stash was an auditor for Hewlett-Packard and Ernst & Young, LLP. He is a Certified Public Accountant in the State of Texas and received an MBA from the McCombs School of Business, a Masters in Professional Accounting and a Bachelor of Business Administration, from the University of Texas at Austin. |
Summary Compensation Table
Summary Compensation Table The following Summary Compensation Table (“SCT”) sets forth a summary of executive compensation for our named executive officers for the fiscal years indicated.
Summary Compensation Table
| | Fiscal | | | Stock | All Other | | | Name and Principal Position | Year | Salary | Bonus (1) | Awards (2)(3) | Compensation (4) | SCT Total | | Kelly W. Loyd | 2023 | $364,500(5) | $280,875 | $1,325,285 | $16,694 | $1,987,354 | | President & Chief Executive Officer | 2022 | $3,750(6) | $— | $— | $— | 3,750 | | J. Mark Bunch | 2023 | $108,705 | $59,967 | $574,719 | $9,480 | 752,871 | | Chief Operating Officer | | | | | | | | Ryan Stash | 2023 | $285,722 | $164,143 | $267,483 | $42,642 | $759,990 | | Senior Vice President, Chief Financial Officer & Treasurer | 2022 | $265,000 | $218,625 | $222,595 | $46,144 | $752,364 |
Summary Compensation Table
| (1) Bonuses reflect STIP amounts earned based on performance for the fiscal year indicated and accrued into such fiscal year for accounting and income tax purposes. Bonuses are typically paid in September of the subsequent fiscal year. |
Summary Compensation Table
| (2) Represents the grant-date fair value of time-vested and performance-based restricted common stock awards granted during the fiscal year indicated, calculated in accordance with FASB ASC Topic 718, and does not reflect the actual value that may be received by the executive. The assumptions used in calculating these values can be found in the notes to the Company’s audited consolidated financial statements included in our Annual Reports on Form 10-K for the fiscal years ended June 30, 2023 and 2022, respectively. The amounts in the table above are generally based on target stock award amounts for each executive, and potentially vest over the next three years. |
Summary Compensation Table
| (3) The grant-date fair value associated with performance-based award units contingent on achieving outperform targets, which were considered not probable of achievement at issuance, were excluded from “Stock Awards” for each officer. If these performance-based contingent share units were considered probable of vesting, then the grant-date fair value of the awards would be as follows: |
Summary Compensation Table
| | Fiscal Year Ended | | | | | | 2023 | | 2022 | | | | | Grant Date | | Grant Date | | Name | Units | Fair Value | Units | Fair Value | | Kelly W. Loyd | 23,409 | $111,895 | — | $— | | J. Mark Bunch | 4,521 | 14,286 | — | — | | Ryan Stash | 11,580 | 59,405 | 19,543 | 52,180 |
Summary Compensation Table
| (4) Represents amounts for (i) matching contributions to the 401(k) Plan on each named executive officers’ behalf and (ii) health, life, accidental death, dismemberment and short-term disability insurance premiums paid by the Company on each named executive’s officer’s behalf. The Company does not reimburse executives for membership in social clubs or other similar perquisites. Dividends paid during the fiscal year on unvested restricted stock beneficially owned by each officer as outlined in the table below, were excluded from “All Other Compensation” as the valuation of the stock awards calculated in accordance with FASB ASC Topic 718 took into account the receipt of dividends. |
Summary Compensation Table
| | Fiscal Year Ended | | | Name | 2023 | 2022 | | Kelly W. Loyd | $63,609(a) | $— | | J. Mark Bunch | 22,455 | — | | Ryan Stash | 92,876 | 70,678 |
Summary Compensation Table
| a. | Includes $1,366 of dividends paid on unvested restricted stock granted to Mr. Loyd in connection with his compensation as a board member during fiscal year 2022. |
Summary Compensation Table
| (5) Includes $6,500 in investment committee chair and board meeting fees and $108,000 earned by Mr. Loyd serving as Interim President and Chief Executive Officer until his appointment to President and Chief Executive Officer on October 26, 2022. Also, includes $250,000 in prorated base pay earned by Mr. Loyd in base salary commencing with his effective date of hire as President and Chief Executive Officer. |
Summary Compensation Table
| (6) Mr. Loyd was appointed Interim President and Chief Executive officer on June 30, 2022 and earned a prorated amount of an annual base compensation of $325,000 for his service in this role. |
Pay Versus Performance
Pay Versus Performance The following tables are provided to link the relationship between the pay of our Principal Executive Officer (“PEO”) and our non-PEO Named Executive Officer (“NEOs”) to certain of our financial performance measures in accordance with Item 402(v) of Regulation S-K and Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. For the tables below, Compensation Actually Paid (“CAP”) is calculated in accordance with the disclosure requirements of the SEC rules and does not necessarily reflect actual amounts earned and/or paid to our PEO or Non-PEO NEOs or how performance is evaluated for each executive during the years covered. For additional information regarding our Compensation Committee strategy for executive compensation, please review our “Compensation Discussion and Analysis” section.
Pay Versus Performance
| | SCT Total | | Average SCT | Average CAP | Total | | | Fiscal | for | CAP to | Total for | to Non-PEO | Shareholder | Net income (loss) | | Year | PEO (1) | PEO (1)(2) | Non-PEO NEOs (3) | NEOs (3)(4)) | Return (5) | (in thousands) (6) | | 2023 | $1,987,354 | $2,104,263 | $756,431 | $1,149,262 | $184.95 | $35,217 | | 2022 | $3,750 | $3,750(7) | | | | | | 2022 | $1,524,638 | $621,162 | $752,364 | $926,820 | $117.04 | $32,628 |
Pay Versus Performance
| (1) Mr. Loyd served as our PEO for 2023 and Mr. Brown served as our PEO for 2022. In addition, Mr. Loyd was appointed interim PEO upon the departure of Mr. Brown on June 28, 2022 and earned a prorated amount of an annual base compensation of $325,000. |
Pay Versus Performance
| (2) CAP to our PEO was calculated in accordance with FASB ASC Topic 718 using valuation assumptions not materially different from those at the time of grant. Adjustments to stock-based compensation from the fair value at the time of grant are as follows: |
Pay Versus Performance
| | | | | | Year-over-year | Fair Value | | | | | Deduction | Year-end | Vesting Date | Change in Fair | at Prior | | | | | for Amounts | Fair Value of | Fair Value of | Value of Vested | Year-end of | | | | SCT Total | under Stock | Unvested | Vested Awards | Awards Granted | Awards | | | Fiscal | for | Awards Column | Awards Granted | Granted During | in Prior | Forfeited | | | Year | PEO | in SCT | During the Year | the Year(a) | Year(s)(a) | During the Year | CAP Total(b) | | 2023 | $1,987,354 | $(1,325,285) | $1,364,352 | $61,281 | $16,561(c) | $— | $2,104,263 | | 2022 | $3,750 | $— | $— | $— | $— | $— | $3,750 | | 2022 | $1,524,638 | $(409,485) | $— | $119,719 | $221,614 | $(835,324) | $621,162 |
Pay Versus Performance
| a. | Includes cash dividends paid during the fiscal years presented on unvested restricted stock awards beneficially owned. |
Pay Versus Performance
| b. | The fair values associated with performance-based award units contingent on achieving outperform targets, which were considered not probable of achievement at issuance, were excluded from the computation of CAP for the table above. If these performance-based contingent share units were considered probable of vesting, then the CAP fair value of the awards would be as follows: |
Pay Versus Performance
| | | Fair Value | | | | Year-end | at Prior | | | | Fair Value of | Year-end of | | | | Unvested | Awards | | | Fiscal | Awards Granted | Forfeited | | | Year | During the Year | During the Year | CAP Adjustment | | 2023 | $128,750 | $— | $128,750 | | 2022 | $— | $(584,679) | $(584,679) |
Pay Versus Performance
| c. | Awards of time-vested restricted stock were granted to Mr. Loyd in connection with his compensation as a board member during the fiscal year 2022. These awards vested in full on December 8, 2022, the date of the prior year’s annual meeting of stockholders of the Company. |
Pay Versus Performance
| (3) For fiscal year 2023, our non-PEO NEOs include Mr. Bunch and Mr. Stash. Mr. Bunch was appointed Chief Operating Officer on February 21, 2023. Averages for fiscal year 2023 were calculated using a straight average of amounts earned, if any, for each category by Mr. Bunch and Mr. Stash during the year. For fiscal year 2022, our non-PEO NEO includes Mr. Stash. |
Pay Versus Performance
| (4) Average CAP to our non-PEO NEOs was calculated in accordance with FASB ASC Topic 718 using valuation assumptions not materially different from those at the time of grant. Adjustments to stock-based compensation from the fair value at the time of grant are as follows: |
Pay Versus Performance
| | | | | | Year-over-year | Year-over-year | | | | Average | Deduction | Year-end | Vesting Date | Change in Fair | Change in Fair | | | | SCT Total | for Amounts | Fair Value of | Fair Value of | Value of | Value of Vested | | | | for | under Stock | Unvested | Vested Awards | Unvested | Awards Granted | | | Fiscal | Non-PEO | Awards Column | Awards Granted | Granted During | Awards Granted | in Prior | | | Year | NEOs | in SCT | During the Year | the Year(a) | in Prior Year(s) | Year(s)(a) | CAP Total(b) | | 2023 | $756,431 | $(421,101) | $514,471 | $19,565 | $140,751 | $139,145 | $1,149,262 | | 2022 | $752,364 | $(222,595) | $248,978 | $28,142 | $72,433 | $47,498 | $926,820 |
Pay Versus Performance
| a. | Includes cash dividends paid during the fiscal years presented on unvested restricted stock awards beneficially owned. |
Pay Versus Performance
| b. | The fair values associated with performance-based award units contingent on achieving outperform targets, which were considered not probable of achievement at issuance, were excluded from the computation of CAP for the table above. If these performance-based contingent share units were considered probable of vesting, then the CAP fair value of the awards would be as follows: |
Pay Versus Performance
| | | Year-over-year | | | | Unvested | Unvested | | | Fiscal | Awards Granted | Awards Granted | | | Year | During the Year | in Prior Year(s) | CAP Adjustment | | 2023 | $44,278 | $50,734 | $95,012 | | 2022 | $32,637 | $18,654 | $51,291 |
Pay Versus Performance
| (5) The Company’s Total Shareholder Return is calculated cumulatively as an initial fixed $100 investment with dividends reinvested for each measurement in accordance with Item 201(e) of Regulation S-K period beginning on June 30, 2021 and ending on June 30, 2023 and 2022. |
Pay Versus Performance
| (6) Represents Net Income (Loss) as reported in the Company’s audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal years ended June 30, 2023 and 2022. |
Pay Versus Performance
| (7) Mr. Loyd was appointed Interim President and Chief Executive officer on June 30, 2022 and earned a prorated amount of an annual base compensation of $325,000 for his service in this role. |
Relationship Between CAP and Performance Measures
Relationship Between CAP and Performance Measures The relationship between Compensation Actually Paid, as calculated in accordance with SEC rules, and performance measures presented in the Pay Verses Performance table above are depicted in the following graphs.
Fiscal Year 2023 Grants of Plan-Based Awards
Fiscal Year 2023 Grants of Plan-Based Awards The following table sets forth information concerning annual incentive awards granted during fiscal year 2023 to each of our named executive officers.
Fiscal Year 2023 Grants of Plan-Based Awards
| | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | Named Executive Officer | Grant Date | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards; Number of Shares (#) | Grant Date Fair Value of Stock Awards ($) (1) | | Kelly W. Loyd | 11/1/2022 | 23,409(2) | 46,817(2) | 46,817(2) | — | $351,596 | | Kelly W. Loyd | 11/1/2022 | — | 23,408(3) | — | — | 184,689 | | Kelly W. Loyd | 11/1/2022 | — | — | — | 100,000(4) | 789,000 | | Kelly W. Loyd | 11/1/2022 | — | — | 23,409(5) | — | — | | J. Mark Bunch | 2/21/2023 | 4,521(2) | 9,041(2) | 9,041(2) | — | 51,534 | | J. Mark Bunch | 2/21/2023 | — | 4,521(3) | — | — | 27,985 | | J. Mark Bunch | 2/21/2023 | — | — | — | 80,000(6) | 495,200 | | J. Mark Bunch | 2/21/2023 | — | — | 4,521(5) | — | — | | Ryan Stash | 9/20/2022 | 11,580(2) | 23,159(2) | 23,159(2) | — | 176,240 | | Ryan Stash | 9/20/2022 | — | 11,579(3) | — | — | 91,243 | | Ryan Stash | 9/20/2022 | — | — | 11,580(5) | — | — |
Fiscal Year 2023 Grants of Plan-Based Awards
| (1) Represents the grant date fair value of time-vested and performance-based restricted stock awards calculated in accordance with FASB ASC Topic 718, “Stock Compensation” and is based on the closing price of our common stock on the day prior to the date of grant or other valuation methods as disclosed in Note 11, “Stockholders’ Equity,” to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended June 30, 2023. |
Fiscal Year 2023 Grants of Plan-Based Awards
| (2) Represents performance-based restricted stock awards based on the trailing three-year annual TSR compared to peer group. The performance period for these performance grants is the three-year measurement period ended June 30, 2025. Shares that ultimately vest at the end of the three-year measurement period could be less than the Threshold noted above. |
Fiscal Year 2023 Grants of Plan-Based Awards
| (3) Represents an award of time-vested restricted common stock, that vests in three equal annual installments beginning on September 1, 2023, assuming continuous employment throughout the term. |
Fiscal Year 2023 Grants of Plan-Based Awards
| (4) Represents a sign-on award of time-vested restricted common stock, that vests in four equal annual installments beginning on November 1, 2023, assuming continuous employment throughout the term. |
Fiscal Year 2023 Grants of Plan-Based Awards
| (5) Represents performance-based contingent share unit awards that have vesting conditions for outperform targets that are based on a combination of the trailing three-year annual TSR compared to peer group. The performance period for these performance grants is the three-year measurement period ended June 30, 2025. The grant-date fair value of these awards is not included in the table as achieving the performance targets was considered not probable of achievement at issuance. If these performance-based contingent share units were to vest, the grant-date fair value of the awards would be $111,895, $14,286, and $59,405 for Messrs. Loyd, Bunch, and Stash, respectively. |
Fiscal Year 2023 Grants of Plan-Based Awards
| (6) Represents a sign-on award of time-vested restricted common stock, that vests in four equal annual installments beginning on February 21, 2024, assuming continuous employment throughout the term. |
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End The following table sets forth information regarding unvested securities outstanding for each named executive officer as of June 30, 2023.
Outstanding Equity Awards at 2023 Fiscal Year-End
| | Stock awards | | | | | Name | Number of shares or units that have not vested (#) (1) | Market value of shares or units of stock that have not vested (#) (2) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) (3) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) (2) | | Kelly W. Loyd | 170,225 | $1,373,716 | 23,409 | $188,911 | | J. Mark Bunch | 93,562 | 755,045 | 4,521 | 36,484 | | Ryan Stash | 135,255 | 1,091,508 | 56,331 | 454,591 |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (1) Unvested time-vested restricted shares vest on each of the subsequent three or four anniversaries from the date of grant. Unvested performance-based restricted shares may vest based on the achievement of TSR-based targets, as well as the average absolute return of the Company’s common stock. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (2) The values were calculated based upon the closing price of our common stock on June 30, 2023, which was $8.07 per share. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (3) Unvested performance-based contingent share units may vest based on the achievement of outperform TSR-based targets together with average absolute return of the Company’s common stock. |
Option Exercises and Stock Vested During Fiscal Year End 2023
Option Exercises and Stock Vested During Fiscal Year End 2023 The following table provides information about the value realized by the named executive officers on option exercises, vesting of restricted stock, and award payouts during fiscal year 2023.
Option Exercises and Stock Vested During Fiscal Year End 2023
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting | Value Realized on Vesting | | Kelly W. Loyd | 11,386(1) | $76,400 | | Ryan Stash | 85,333 | 664,981 |
Option Exercises and Stock Vested During Fiscal Year End 2023
| (1) These awards of time-vested restricted stock were granted to Mr. Loyd in connection with his compensation as a board member during the fiscal year 2022. These awards vested in full on December 8, 2022, the prior year’s annual meeting of stockholders of the Company. |
SEC RULES CONCERNING THE ELECTION OF DIRECTORS
SEC RULES CONCERNING THE ELECTION OF DIRECTORS Your broker is not permitted to vote on your behalf on the election of directors unless you provide specific instructions by completing and returning the proxy card. For your vote to be counted, you will need to communicate your voting decisions to your broker, bank or other financial institution before the date of the stockholder meeting.