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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Yuma Energy Inc New | AMEX:YUMA | AMEX | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.55 | 0 | 01:00:00 |
☐
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Preliminary
Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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☑
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Definitive
Proxy Statement
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☐
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Definitive
Additional Materials
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☐
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Soliciting
Material under to § 240.14a-12
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Yuma Energy, Inc.
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(Name
of Registrant as Specified in Its Charter)
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☑
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No fee
required
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☐
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was
determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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Yuma Energy, Inc.
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Sincerly,
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Sam L. Banks
Director
and Chief Executive Officer
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NOTICE OF THE 2017 ANNUAL MEETING OF STOCKHOLDERS
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS
FOR THE 2017 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
ON
JUNE 13, 2017
Pursuant to rules
of the Securities and Exchange Commission, we are providing access
to our proxy materials, on or about April 28, 2017, by notifying
you of the availability of our proxy materials on the Internet.
These proxy materials and our 2016 Annual Report on Form 10-K are
available at
https://www.iproxydirect.com/YUMA
.
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2017 Proxy Summary
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i
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OUR BOARD OF DIRECTORS
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1
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PROPOSAL 1 – ELECTION OF TWO CLASS I
DIRECTORS
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6
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CORPORATE GOVERNANCE
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7
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Director Attendance
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7
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Formerly a Controlled Company
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7
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Director Independence
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7
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Board of Directors Diversity
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7
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Stockholder-Recommended Director Candidates
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7
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Board Leadership
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8
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Board Risk Oversight
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8
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Communications with Directors
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8
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Board Committees
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9
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Corporate Code of Business Conduct and Ethics
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9
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Section 16(a) Beneficial Ownership Reporting
Compliance
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9
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PROPOSAL 2 – Advisory Vote on Executive
Compensation
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10
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PROPOSAL 3 – Advisory Vote on Frequency of Future Advisory
Votes on Executive Compensation
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11
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SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL
OWNERS
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12
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EQUITY COMPENSATION PLAN INFORMATION
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14
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COMPENSATION OF DIRECTORS
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15
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2016 Retainer Fees
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15
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2016 Restricted Stock Awards
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15
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2017 Retainer Fees
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15
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Director Compensation in 2016
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15
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MANAGEMENT
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16
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EXECUTIVE COMPENSATION
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17
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Compensation Discussion and Analysis
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17
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Summary Compensation Table
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19
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Outstanding Equity Awards
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20
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Employment Contracts and Termination of
Employment
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20
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Compensation Committee Interlocks and Insider
Participation
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21
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Potential Payments Triggered Upon a Change in
Control
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21
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INDEPENDENT PUBLIC ACCOUNTANTS
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22
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Audit Committee Pre-Approval Policies and
Procedures
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22
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Fees Paid to Grant Thornton LLP and PricewaterhouseCoopers
LLP
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22
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AUDIT COMMITTEE REPORT
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23
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PROPOSAL 4 – RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
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24
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CERTAIN RELATIONSHIPS AND RELATED PARTY
TRANSACTIONS
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25
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Registration Rights Agreement
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25
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Policies and Procedures for Approval of Related Party
Transactions
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25
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GENERAL INFORMATION ABOUT THE ANNUAL MEETING
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26
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Voting Instructions and Information
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26
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Stockholder Proposals
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27
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Annual Report on Form 10-K
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27
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Eliminating Duplicative Proxy Materials
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27
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Incorporation by Reference
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27
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2017
PROXY SUMMARY
This summary highlights information contained elsewhere in this
proxy statement. This summary does not contain all of the
information that you should consider, and you should read the
entire proxy statement carefully before voting.
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Annual Meeting of Stockholders
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●
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Time:
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9:00
a.m. Central Daylight Time
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Date:
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June
13, 2017
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Place:
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1177
West Loop South, Suite 1825
Houston,
Texas 77027
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●
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Record
date:
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April
27, 2017
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●
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Voting:
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Stockholders
as of the record date are entitled to vote. Each share of common
stock is entitled to one vote for each director nominee and one
vote for each of the proposals to be voted on. Each share of Series
D Preferred Stock, on an as-converted basis, is entitled to one
vote for each director nominee and one vote for each of the
proposals to be voted on. The common stock and the Series D
Preferred Stock vote together as one class.
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Meeting Agenda
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Election
of two Class I directors for three-year terms
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Advisory
vote on executive compensation
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Advisory
vote on the frequency of future advisory votes on executive
compensation
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Ratify
the appointment of Grant Thornton LLP as our independent registered
public accounting firm for 2017
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Element
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Characteristics
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Primary Objective
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Base Salary
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Cash
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Attract
and retain highly talented individuals
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Short-Term Incentives
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Cash
bonus
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Reward
for individual and corporate performance
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Long-Term Incentives
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Restricted
stock awards, stock appreciation right awards and stock options
with multi-year vesting periods
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Align
the interests of our employees and stockholders by providing
employees with incentive to perform technically and financially in
a manner that promotes share price appreciation
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Other Benefits
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401(k)
plans and employee benefit plans
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Provide
benefits that promote employee health and support employees in
attaining financial security
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OUR BOARD OF DIRECTORS
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J
ames W.
Christmas
Age:
67
Director Since:
2016
Board Committees:
●
Audit
●
Nominating
|
Mr.
Christmas has served as a director and a member of the audit and
nominating committees of the Board since the closing of the Davis
Merger on October 26, 2016. He served as a director and member of
the audit and compensation committees of Yuma California from
September 10, 2014 through October 26, 2016. He has served as a
director of The Yuma Companies, Inc. (predecessor to Yuma
California) (“Yuma Co.”) since November 2013. Mr.
Christmas began serving as a director of Petrohawk Energy
Corporation (“Petrohawk”) on July 12, 2006, effective
upon the merger of KCS Energy, Inc. (“KCS”) into
Petrohawk. He continued to serve as a director, and as Vice
Chairman of the Board of Directors, for Petrohawk until BHP
Billiton acquired Petrohawk in August 2011. He also served on the
audit committee and the nominating and corporate governance
committee. Mr. Christmas served as a member of the Board of
Directors of Petrohawk, a wholly-owned subsidiary of BHP Billiton,
and as chair of the financial reporting committee of such board
from August 2013 through September 2014. Since February 2012, Mr.
Christmas has served on the board of directors of Halcón
Resources Corporation (“Halcón”) as Lead Outside
Director and serves as chairman of its audit committee. On January
29, 2014, Mr. Christmas was appointed to the Board of Directors of
Rice Energy, Inc., and serves as chairman of its audit committee
and as a member of its compensation committee and governance
committee. He also serves on the Board of Governors of St.
John’s University. He served as President and Chief Executive
Officer of KCS from 1988 until April 2003 and Chairman of the Board
and Chief Executive Officer of KCS until its merger into Petrohawk.
Mr. Christmas was a Certified Public Accountant in New York and was
with Arthur Andersen & Co. from 1970 until 1978 before leaving
to join National Utilities & Industries (“NUI”), a
diversified energy company, as Vice President and Controller. He
remained with NUI until 1988, when NUI spun out its unregulated
activities that ultimately became part of KCS. As an auditor and
audit manager, controller and in his role as CEO of KCS, Mr.
Christmas was directly or indirectly responsible for financial
reporting and compliance with SEC regulations, and as such has
extensive experience in reviewing and evaluating financial reports,
as well as in evaluating executive and board performance and in
recruiting directors. He has extensive experience in oil and gas
company growth issues, with a focus on capital structure and
business development strategies. Prior to his appointment as a
Director, Mr. Christmas was a Board Advisor to Yuma Co. from August
2012 through November 2013. Mr. Christmas received a
bachelor’s degree in accounting and an honorary degree of
commercial science from St. John’s University.
|
S
kills
and
Q
ualifications
:
The Board of Directors of the Company, in reviewing and assessing
the contributions of Mr. Christmas to the Board, determined that
his prior experience as an executive and director and his past
audit, accounting and financial reporting experience provide
significant contributions and expertise to the Company’s
Board of Directors.
|
Richard K. Stoneburner
Age:
63
Director Since:
2016
Board Committee:
●
Compensation
|
Mr.
Stoneburner has served as Chairman of the Board and member of the
compensation committee of the Board since the closing of the Davis
Merger on October 26, 2016. He served as a director and member of
the compensation committee of Yuma California from September 10,
2014 through October 26, 2016. He has served as a director of Yuma
Co. since November 2013. He began his career as a geologist in
1977. Mr. Stoneburner joined Petrohawk Energy in 2003, where he led
Petrohawk’s exploration program from 2005 to 2007 prior to
serving as the company’s President and COO from 2007 to 2011.
When BHP Billiton acquired Petrohawk in 2011, he was appointed
President of the North America Shale Production Division where he
managed operations in the Fayetteville Shale, the Haynesville
Shale, the Eagle Ford Shale, and the Permian Basin divisions. Mr.
Stoneburner currently serves on the Board of Directors of Tamboran
Resources Limited and serves as a Managing Director to the private
equity firm Pine Brook Partners. Prior to his appointment as
Director, Mr. Stoneburner was a Board Advisor to Yuma Co. from July
2013 through November 2013. Mr. Stoneburner has a bachelor’s
degree in geology from the University of Texas and a master’s
degree in geological sciences from Wichita State
University.
|
S
kills
and
Q
ualifications
:
The Board of Directors of the Company, in reviewing and assessing
Mr. Stoneburner’s contributions to the Board, determined
that his prior industry experience ranging from staff geologist,
corporate owner, exploration manager to C-level executive, his
leading role in exploring for and developing some of the most
successful resource plays in the United States; his significant
experience in the challenges of resource play operations and
development; and playing a key role in implementing a comprehensive
health, safety, environment and community management system for
unconventional shale plays while at BHP Billiton Petroleum, provide
significant contributions to the Company’s Board of
Directors.
|
Neeraj Mital
Age: 50
Director Since:
2016
Board Committee:
●
Nominating
|
Mr.
Mital has served as a director and a member of the nominating
committee of the Board since the closing of the Davis Merger on
October 26, 2016. Previously, he served as a director of Davis from
2009 through October 26, 2016. Since 2016, he has been a consultant
to Evercore Partners Inc., a New York-based global investment
banking advisory and investment management firm. From 1999 to 2016,
he was a Senior Managing Director of Evercore Partners Inc.,
including Co-Head of its private equity business from 2008 to 2016.
Mr. Mital has twenty-seven years of experience in principal
investing and mergers and acquisitions. Prior to joining Evercore
in 1998, he was a Managing Director at The Blackstone Group. From
1989 through 1991, Mr. Mital was with Salomon Brothers Inc. Prior
to joining Salomon Brothers, he was a CPA with Price Waterhouse.
Mr. Mital has also served on the Board of Directors of MBI
Holdings, Inc. since 2006 and alliantgroup, LP since 2006. He
received a B.S. in economics from The Wharton School at the
University of Pennsylvania.
|
S
kills
and
Q
ualifications
:
The Board of Directors of the Company, in reviewing and assessing
the contributions of Mr. Mital to the Board, determined that his
past experience makes him uniquely positioned to provide the Board
with insight and advice on a broad range of corporate strategic,
financial, and governance matters.
|
J. Christopher Teets
Age: 44
Director Since:
2016
Board Committees:
●
Audit
●
Compensation
|
Mr.
Teets has served as a director and a member of the audit and
compensation committees of the Board since the closing of the Davis
Merger on October 26, 2016. He has been a partner of Red Mountain
Capital Partners LLC (“Red Mountain”), an investment
management firm, since February 2005. Before joining Red Mountain,
Mr. Teets was an investment banker at Goldman,
Sachs & Co. Mr. Teets joined Goldman,
Sachs & Co. in 2000 and was made a Vice President in 2004.
Prior to Goldman, Sachs & Co., Mr. Teets worked in
the investment banking division of Citigroup. Mr. Teets has
also served as a director of Marlin Business Services Corp., since
May 2010, as a director of Nature’s Sunshine Products, Inc.,
since December 2015 and as a director of Air Transport Services
Group, Inc. since February 2009. Mr. Teets also previously served
as a director of Encore Capital Group, Inc. from May 2007 until
June 2015, and Affirmative Insurance Holdings, Inc. from August
2008 until September 2011. He holds a bachelor’s degree from
Occidental College and an MSc degree from the London School of
Economics.
|
S
kills
and
Q
ualifications
:
The Board of Directors of the Company, in reviewing and assessing
the contributions of Mr. Teets to the Board, determined that his
significant business and investment banking experience as well as
public company board experience make him uniquely positioned to
provide the Board with insight and advice on a broad range of
corporate strategic, financial and governance matters.
|
Sam L. Banks
Director and Chief Executive Officer
Age:
67
Director Since:
2016
|
Mr.
Banks has been our Chief Executive Officer and a member of the
Board of Directors since the closing of the Davis Merger on October
26, 2016. He was the Chief Executive Officer and Chairman of the
Board of Directors of Yuma California from September 10, 2014 and
also President since October 10, 2014 through October 26, 2016. He
was the Chief Executive Officer and Chairman of the Board of
Directors of Yuma Co. and its predecessor since 1983. He was also
the founder of Yuma Co. He has 39 years of experience in the oil
and natural gas industry, the majority of which he has been leading
Yuma Co. Prior to founding Yuma Co., he held the position of
Assistant to the President of Tomlinson Interests, a private
independent oil and gas company. Mr. Banks graduated with a
Bachelor of Arts from Tulane University in New Orleans, Louisiana,
in 1972, and in 1976 he served as Republican Assistant Finance
Chairman for the re-election of President Gerald Ford, under former
Secretary of State, Robert Mosbacher.
|
S
kills
and
Q
ualifications
:
The Board of Directors of the Company, in reviewing and assessing
the contributions of Mr. Banks to the Board, determined that his
leadership and intimate knowledge of the oil and gas industry, the
Company’s structure, history, and operations, provide the
Board of Directors with company-specific experience and
expertise.
|
F
rank
A.
L
odzinski
Age:
67
Director Since:
2016
Board Committee:
●
Compensation
|
Mr.
Lodzinski has served as a director and a member of the compensation
committee of the Board since the closing of the Davis Merger on
October 26, 2016. He served as a director and member of the audit
committee of Yuma California from September 10, 2014 through
October 26, 2016. He served as a director of Yuma Co. since August
2012. He has more than 43 years of oil and gas industry experience,
including the successful completion of several strategic
combinations. In 1984, Mr. Lodzinski formed Energy Resource
Associates, Inc., which acquired management and controlling
interests in oil and gas limited partnerships, joint ventures and
producing properties. Certain partnerships were exchanged for
common shares of Hampton Resources Corporation in 1992, which Mr.
Lodzinski joined as a director and President. Hampton was sold in
1995 to Bellwether Exploration Company. In 1996, Mr. Lodzinski
formed Cliffwood Oil & Gas Corp. and in 1997, Cliffwood
shareholders acquired a controlling interest in Texoil, Inc. where
he served as a director, Chief Executive Officer and President. In
2001, Mr. Lodzinski, was appointed Chief Executive Officer and
President of AROC, Inc., to direct the restructuring and ultimate
liquidation of that company. In 2003, AROC completed a monetization
of oil and gas assets with an institutional investor and began a
plan of liquidation in 2004. In 2004, Mr. Lodzinski formed Southern
Bay Energy, LLC, the general partner of Southern Bay Oil & Gas,
L.P., which acquired the residual assets of AROC, Inc., and he
served as President of Southern Bay Energy, LLC upon its formation.
The Southern Bay entities were merged into GeoResources, Inc. in
April 2007. He served as President, Chief Executive Officer, and a
director until GeoResources was sold to Halcón Resources
Corporation for $1.0 billion in 2012. He served as President and
Chief Executive Officer of Oak Valley Resources, LLC from its
formation in December 2012 until the closing of its strategic
combination with Earthstone Energy, Inc. (“Earthstone”)
in December 2014. Since December 2014, Mr. Lodzinski has
served as Chairman, President and Chief Executive Officer of
Earthstone. He holds a BSBA degree in Accounting and Finance from
Wayne State University in Detroit, Michigan.
|
S
kills
and
Q
ualifications
:
The Board of Directors of the Company, in reviewing and assessing
Mr. Lodzinski’s contributions to the Board, determined
that his industry experience, intimate knowledge of the oil and gas
industry, and prior roles in building and managing publicly traded
oil and gas companies provide significant contributions to the
Company’s Board of Directors.
|
PROPOSAL 1 – ELECTION OF TWO CLASS I DIRECTORS
|
In
light of the individual skills and qualifications of each of our
Class I director nominees, our Board has concluded that each of our
Class I director nominees should be elected to our
Board.
Our Board unanimously recommends that stockholders vote FOR both of
our Class I director nominees.
|
CORPORATE GOVERNANCE
|
PROPOSAL 2 – ADVISORY VOTE ON EXECUTIVE
COMPENSATION
|
Our Board unanimously recommends that stockholders vote
FOR
approval of the advisory vote on executive
compensation.
|
PROPOSAL 3 – ADVISORY VOTE ON FREQUENCY OF FUTURE ADVISORY
VOTES ON EXECUTIVE COMPENSATION
|
Our Board unanimously recommends that stockholders vote
FOR
conducting future advisory votes on executive compensation EVERY
YEAR.
|
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL
OWNERS
|
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Common Stock
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Series D Preferred Stock
|
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Combined Voting Power
(1)
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||||||
Name
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|
Number
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Percent
(2)
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Number
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Percent
(3)
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Number
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Percent
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Named Executive Officers:
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Sam L.
Banks
(4)
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2,120,351
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16.8%
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-
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-
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2,120,351
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14.7%
|
Paul D.
McKinney
(4)
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60,415
|
|
*
|
|
-
|
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-
|
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60,415
|
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*
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James
J. Jacobs
(4)
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37,212
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*
|
|
-
|
|
-
|
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37,212
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*
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Non-Management Directors:
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James
W. Christmas
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85,586
|
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*
|
|
-
|
|
-
|
|
85,586
|
|
*
|
Frank
A. Lodzinski
(5)
|
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41,595
|
|
*
|
|
-
|
|
-
|
|
41,595
|
|
*
|
Neeraj
Mital
|
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17,045
|
|
*
|
|
-
|
|
-
|
|
17,045
|
|
*
|
Richard
K. Stoneburner
|
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38,479
|
|
*
|
|
-
|
|
-
|
|
38,479
|
|
*
|
J.
Christopher Teets
|
|
17,045
|
|
*
|
|
-
|
|
-
|
|
17,045
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officers and Directors as a Group
(eight persons):
|
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2,417,728
|
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19.1%
|
|
-
|
|
-
|
|
2,417,728
|
|
16.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beneficial Owners of More than Five
Percent:
|
|
|
|
|
|
|
|
|
|
|
|
|
Red
Mountain Capital Partners LLC
(6)
|
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2,603,052
|
|
20.8%
|
|
1,796,190
|
|
99.4%
|
|
4,399,242
|
|
30.7%
|
Davis
Petroleum Investment, LLC
(7)
|
|
2,027,444
|
|
16.2%
|
|
-
|
|
-
|
|
2,027,444
|
|
14.1%
|
Sankaty
Davis, LLC
(8)
|
|
1,607,301
|
|
12.8%
|
|
-
|
|
-
|
|
1,607,301
|
|
11.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Represents
less than one percent.
|
(1)
|
Represents
percentage of voting power of our common stock and Series D
Preferred Stock, on an as-converted basis, voting together as a
single class.
|
(2)
|
The
percentage is based upon 12,540,747 shares of common stock issued
and outstanding on April 27, 2017.
|
(3)
|
The
percentage is based upon 1,807,386 shares of Series D Preferred
Stock issued and outstanding on April 27, 2017.
|
(4)
|
Includes
unvested shares of restricted stock subject to forfeiture for Mr.
Banks – 23,227; Mr. Jacobs – 10,922; Mr. McKinney
– 18,057, Mr. Christmas – 12,783; Mr. Lodzinski –
12,783; Mr. Mital – 12,783; Mr. Stoneburner – 12,783;
Mr. Teets – 12,783; and all directors and named executive
officers as a group — 116,121, and stock appreciation rights
that are exercisable within 60 days from the date hereof for Mr.
Banks – 19,020; Mr. Jacobs – 8,944; and Mr. McKinney
– 15,652, and all named executive officers as a group —
43,616.
|
(5)
|
Includes
21,923 shares of common stock held in the name of Azure Energy, LLC
(“Azure”). Mr. Lodzinski disclaims beneficial ownership
of the shares held by Azure, except to the extent of his pecuniary
interests therein.
|
(6)
|
Based
solely on a Schedule 13D/A filed with the SEC on March 8, 2017 by
Red Mountain Capital Partners LLC, a Delaware limited liability
company (“RMCP LLC”): (i) RMCP PIV DPC, LP, a Delaware
limited partnership (“DPC PIV”), beneficially owns, in
the aggregate, 2,525,052 shares of common stock and has the power
to vote or direct the vote, and the power to dispose or direct the
disposition of, all such shares; (ii) RMCP PIV DPC II, LP, a
Delaware limited partnership (“DPC PIV II” and,
together with DPC PIV, the “DPC Funds”), beneficially
owns, in the aggregate, 1,796,190 shares of Series D Preferred
Stock and has the power to vote or direct the vote, and the sole
power to dispose or direct the disposition of, all such shares;
(iii) RMCP DPC LLC, a Delaware limited liability company, is the
general partner of DPC PIV and, in such capacity, controls DPC PIV
and thus may be deemed to beneficially own, and to have the power
to vote or direct the vote, or dispose or direct the disposition
of, all of the common stock beneficially owned by DPC PIV; (iv)
RMCP DPC II LLC, a Delaware limited liability company, is the
general partner of DPC PIV II and, in such capacity, controls DPC
PIV II and thus may be deemed to beneficially own, and to have the
power to vote or direct the vote, or dispose or direct the
disposition of, all of the Series D Preferred Stock beneficially
owned by DPC PIV II; (v) RMCP DPC LLC is controlled by its managing
member, RMCP GP LLC, a Delaware limited liability company
(“RMCP GP”); (vi) each of RMCP GP and RMCP DPC II LLC
is controlled by its managing member, RMCP LLC; (vii) RMCP LLC
beneficially owns, in the aggregate, 78,000 shares of common stock
and has the power to vote or direct the vote, and the power to
dispose or direct the disposition of, all such shares; (viii) RMCP
LLC is controlled by its managing member, Red Mountain Capital
Management, Inc., a Delaware corporation (“RMCM”); (ix)
RMCM is controlled by its sole executive officer, sole director and
sole shareholder, Willem Mesdag, a natural person and citizen of
the United States of America; and (ix) accordingly, in his capacity
as the sole executive officer and sole director of RMCM and through
the indirect control exercised by RMCM, RMCP LLC and RMCP GP over
the DPC Funds and RMCP LLC, Mr. Mesdag may be deemed to have voting
and investment power over all of the common stock and Series D
Preferred Stock owned by the DPC Funds and RMCP LLC. Each of RMCM
and Mr. Mesdag disclaims beneficial ownership of all shares of
common stock and Series D Preferred Stock directly held by the DPC
Funds and RMCP LLC.
|
(7)
|
Based
solely on a Schedule 13D filed with the SEC on November 4, 2016 by
Evercore Partners II LLC, the managing member of Davis Petroleum
Investment, LLC. Evercore Partners II LLC is managed by its
managing members, which have voting and dispositive control over
the securities owned by Evercore Partners II LLC and which consist
of Roger C. Altman, Paul D. Billyard, Ciara A. Burnham, Jane
Gladstone, William O. Hiltz, John E. Honts, Timothy G. Lalonde,
Daniel B. Mendelow, Eduardo G. Mestre, Michael J. Price, Jason
Sobol and David Ying. Each of Evercore Partners II LLC, Roger C.
Altman, Paul D. Billyard, Ciara A. Burnham, Jane Gladstone, William
O. Hiltz, John E. Honts, Timothy G. Lalonde, Daniel B. Mendelow,
Eduardo G. Mestre, Michael J. Price, Jason Sobol and David Ying
disclaim beneficial ownership of such securities. The address of
each of these entities, Roger C. Altman, Paul D. Billyard, Ciara A.
Burnham, Jane Gladstone, William O. Hiltz, John E. Honts, Timothy
G. Lalonde, Daniel B. Mendelow, Eduardo G. Mestre, Michael J.
Price, Jason Sobol and David Ying is 55 East 52nd Street, New York,
New York 10055.
|
(8)
|
Based
solely on a Schedule 13D filed with the SEC on November 7, 2016 by
Bain Capital Credit, LP, Bain Capital Credit Member, LLC
(“BCCM”), a Delaware limited liability company, is the
administrative member of Sankaty Davis, LLC (“Sankaty
Davis”), a Delaware limited liability company. Voting
and dispositive rights over the securities owned by Sankaty Davis
is held by Tim Barns, Stuart Davies, Jonathan DeSimone, Michael A.
Ewald, Sally Dornaus, Jeffrey B. Hawkins, James F. Kellogg, David
McCarthy, Chris Linneman, Jeff Robinson, Kathy Rockey, Jonathan
Lavine and Ranesh Ramanathan, in their capacities as members of
BCCM. Each of BCCM, Tim Barns, Stuart Davies, Jonathan DeSimone,
Michael A. Ewald, Sally Dornaus, Jeffrey B. Hawkins, James F.
Kellogg, David McCarthy, Chris Linneman, Jeff Robinson, Kathy
Rockey, Jonathan Lavine and Ranesh Ramanathan disclaim beneficial
ownership of such securities. The address of each of these
entities, Tim Barns, Stuart Davies, Jonathan DeSimone, Michael A.
Ewald, Sally Dornaus, Jeffrey B. Hawkins, James F. Kellogg, David
McCarthy, Chris Linneman, Jeff Robinson, Kathy Rockey, Jonathan
Lavine and Ranesh Ramanathan is 200 Clarendon St., Boston,
Massachusetts 02116.
|
EQUITY COMPENSATION PLAN INFORMATION
|
PLAN CATEGORY
|
|
Number of securities to be issued upon exercise of outstanding
options, warrants and rights
(a)
|
|
Weighted-average exercise price of outstanding options, warrants
and rights
(b)
|
|
Number of securities remaining available for future issuance under
equity compensation plans (excluding securities reflected in column
a)
(c)
|
|
Equity
compensation plans approved by security holders:
(1)(2)(3)
|
|
89,248
|
|
$
|
17.2038
|
|
2,151,811
|
Equity
compensation plans not approved by security holders:
(4)
|
|
-
|
|
|
-
|
|
-
|
Total
|
|
89,248
|
|
$
|
17.2038
|
|
2,151,811
|
|
|
|
|
|
|
|
|
COMPENSATION OF DIRECTORS
|
|
|
2016
Compensation Program
|
|
Compensation Element
|
|
|
|
Annual
Cash Retainer
|
|
$40,000
|
|
Annual
Equity Grant
|
|
$50,000
|
|
Audit
Committee Chair Fee
|
|
$15,000
|
|
Compensation
Committee Chair Fee
|
|
$8,000
|
|
|
|
|
|
|
|
2017 Compensation Program
|
|
Compensation Element
|
|
|
|
Annual
Cash Retainer
|
|
$45,000
|
|
Annual
Equity Grant
|
|
$75,000
|
|
Audit
Committee Chair Fee
|
|
$15,000
|
|
Non-Executive
Chairman of the Board Fee
|
|
$15,000
|
|
|
|
|
|
Name
|
|
Fees Earned or Paid In Cash
($)
|
|
Stock awards
($)
|
|
Total
($)
|
James
W. Christmas
|
|
42,500
|
|
100,000
|
|
142,500
|
Stuart
E. Davies
(1)
|
|
-
|
|
-
|
|
-
|
Frank
A. Lodzinski
|
|
40,000
|
|
100,000
|
|
140,000
|
Neeraj
Mital
(2)
|
|
6,667
|
|
-
|
|
6,667
|
Ben T.
Morris
(3)
|
|
45,833
|
|
87,500
|
|
133,333
|
Richard
K. Stoneburner
|
|
46,667
|
|
100,000
|
|
146,667
|
J.
Christopher Teets
(2)
|
|
8,000
|
|
-
|
|
8,000
|
MANAGEMENT
|
Name
|
|
Executive Officer Since
|
|
Age
|
|
Position
|
Sam L.
Banks
|
|
October
2016
|
|
67
|
|
Director
and Chief Executive Officer
|
James
J. Jacobs
|
|
October
2016
|
|
39
|
|
Executive
Vice President, Chief Financial Officer, Treasurer and Corporate
Secretary
|
Paul D.
McKinney
|
|
October
2016
|
|
58
|
|
President
and Chief Operating Officer
|
EXECUTIVE COMPENSATION
|
Element
|
|
Characteristics
|
|
Primary Objective
|
Base
Salary
|
|
Cash
|
|
Retain
and attract highly talented individuals
|
Short-Term
Incentives
|
|
Cash
bonus
|
|
Reward
individual and corporate performance
|
Long-Term
Incentives
|
|
Equity
awards vesting over a period of time or based on performance
metrics
|
|
Align
the interests of our employees and stockholders by providing
employees with incentive to perform technically and financially in
a manner that promotes share price appreciation.
|
Other
Benefits
|
|
401(k)
matching plans and employee health benefit plans
|
|
Provide
benefits that promote employee health and support employees in
attaining financial security
|
|
|
2016
|
|
|
2017
(1)
|
||
Name
|
|
Base Salary ($)
|
|
|
Base Salary ($)
|
||
Sam L.
Banks
|
|
|
425,000
|
|
|
|
525,000
|
James
J. Jacobs
|
|
|
275,000
|
|
|
|
350,000
|
Paul D.
McKinney
|
|
|
350,000
|
|
|
|
400,000
|
|
|
2015
|
|
|
2016
|
||
Name
|
|
Cash Bonus ($)
|
|
|
Cash Bonus ($)
|
||
Sam L.
Banks
|
|
|
4,304
|
|
|
|
91,325
|
James
J. Jacobs
|
|
|
101,601
|
|
|
|
60,380
|
Paul D.
McKinney
|
|
|
50,000
|
|
|
|
75,150
|
|
|
2016
|
|
Name
|
|
Restricted Stock Awards (#)
|
|
Sam L.
Banks
|
|
|
25,546
|
James
J. Jacobs
|
|
|
13,224
|
Paul D.
McKinney
|
|
|
21,038
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
Year
|
Salary ($)
|
Bonus ($)
|
Stock Awards ($)
(1)
|
Option Awards($)
(2)
|
All Other Compensation
($)
|
Total ($)
|
|
|
|
|
|
|
|
|
Sam L. Banks
|
2016
|
425,000
|
91,325
|
121,548
|
-
|
(3)
|
637,873
|
Principal
Executive Officer
|
2015
|
425,000
|
4,304
|
411,040
|
181,449
|
(3)
|
1,021,793
|
James J. Jacobs
(4)
|
2016
|
275,000
|
60,380
|
62,920
|
-
|
-
|
398,300
|
Chief
Financial Officer, Treasurer and Corporate
Secretary
|
2015
|
251,042
|
101,601
|
193,279
|
85,321
|
-
|
631,243
|
Paul D. McKinney
|
2016
|
350,000
|
75,150
|
100,099
|
-
|
-
|
525,249
|
President
– Chief Operating Officer
|
2015
|
350,000
|
50,000
|
676,304
|
149,312
|
-
|
1,225,616
|
|
|
|
|
|
|
|
|
|
Option Awards
|
Stock awards
|
|
||||||
Name
|
Number of Securities Underlying Unexercised Options (#)
Exercisable
|
Number of Securities Underlying Unexercised Options (#)
Unexercisable
(1)
|
Option Exercise Price ($)
|
Option Expiration Date
|
Number of shares or units of stock that have not
vested
(#)
(2)
|
Market value of shares of units of stock that have not
vested
($)
(3)
|
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 ($)
|
|
Sam L.
Banks
|
|
|
|
|
|
|
|
|
|
|
-
|
-
|
-
|
-
|
25,120
|
$85,408
|
-
|
-
|
|
|
9,510
|
19,020
|
$12.10
|
08/18/2022
|
-
|
-
|
-
|
-
|
|
James
J. Jacobs
|
|
|
|
|
|
|
|
|
|
|
-
|
-
|
-
|
-
|
11,629
|
$39,539
|
-
|
-
|
|
|
4,472
|
8,944
|
$12.10
|
08/18/2022
|
-
|
-
|
-
|
-
|
|
Paul D.
McKinney
|
|
|
|
|
|
|
|
|
|
|
-
|
-
|
-
|
-
|
18,057
|
$61,394
|
-
|
-
|
|
|
7,826
|
15,652
|
$12.10
|
08/18/2022
|
-
|
-
|
-
|
-
|
Name
|
Cash Compensation
($)
|
Unvested Stock Appreciation Rights Awards at
12/30/2016
(#)
|
Value (Based on Closing Price of Stock at 12/30/2016)
($)
(1)
|
Unvested Restricted Stock Awards at 12/30/2016
(#)
|
Value (Based on Closing Price of Stock at 12/30/2016)
($)
|
Total
($)
|
Sam L.
Banks
|
3,150,000
|
19,020
|
-
|
25,120
|
85,408
|
3,235,408
|
James
J. Jacobs
|
1,330,000
|
8,944
|
-
|
11,629
|
39,539
|
1,369,539
|
Paul D.
McKinney
|
1,600,000
|
15,652
|
-
|
18,057
|
61,394
|
1,661,394
|
(1)
|
The
stock appreciation rights have an exercise price of $12.10 per
share and were underwater as of December 30, 2016 and accordingly
had no value.
|
INDEPENDENT PUBLIC ACCOUNTANTS
|
|
|
2016
|
|
2015
|
||
Services
|
|
Grant
Thornton
|
|
PwC
|
|
Grant
Thornton
|
Audit
Fees
(1)
|
|
$496,972
|
|
$163,000
|
|
$467,813
|
Audit-Related Fees
(2)
|
|
|
|
|
|
|
Tax
Fees
(3)
|
|
|
|
|
|
|
All
Other Fees
(4)
|
|
|
|
|
|
|
Total
|
|
$496,972
|
|
$163,000
|
|
$467,813
|
|
|
|
|
|
|
|
(1)
|
Audit
Fees include professional services for the audit of our annual
financial statements, reviews of the financial statements included
in our Form 10-Q filings, and services normally provided in
connection with statutory and regulatory filings or
engagements.
|
(2)
|
Audit-Related
Fees comprise fees for professional services reasonably related to
the performance of the audit or review of the Company’s
financial statements and are not otherwise included in “Audit
Fees.”
|
(3)
|
Tax
Fees include professional services for tax compliance, tax advice
and tax planning.
|
(4)
|
All
Other Fees include fees for miscellaneous services other than the
services reported under “Audit Fees,” “Audit
Related Fees” and “Tax Fees” for the services in
question.
|
AUDIT COMMITTEE REPORT
|
PROPOSAL 4 – RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
|
Our Board unanimously recommends that stockholders vote
FOR
ratification of the appointment of Grant Thornton LLP as our
independent registered public accounting firm for
2017.
|
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
|
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
|
|
|
By Order of The Board of Directors, |
|
|
|
|
|
Dated: April 28,
2017
|
By:
|
/s/
James J. Jacobs
|
|
|
|
James J. Jacobs
|
|
|
|
Corporate
Secretary
|
|
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