UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed
by the Registrant ☒
Filed by a party other than the Registrant ☐
Check
the appropriate box:
| ☒ |
Preliminary
Proxy Statement |
| ☐ |
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☐ |
Definitive
Proxy Statement |
| ☐ |
Definitive
Additional Materials |
| ☐ |
Soliciting
Material Pursuant to §240.14a-12 |
LIBERTY
ENERGY INC.
(Name of Registrant as Specified In
Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check all boxes that apply):
| ☒ |
No
fee required |
| ☐ |
Fee
paid previously with preliminary materials. |
| ☐ |
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11 |
PRELIMINARY
PROXY STATEMENT SUBJECT TO COMPLETION
Liberty
Energy Inc. intends to release definitive copies of the Proxy Statement to stockholders on or about March 6, 2025
LIBERTY
ENERGY INC.
950 17th STREET, SUITE 2400
DENVER, COLORADO 80202
NOTICE
OF 2025 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 15, 2025
To
our valued stockholders:
Notice
is hereby given that the 2025 Annual Meeting of Stockholders (the “Annual Meeting”) of Liberty Energy Inc.
(the “Company” or “Liberty”) will be held on Tuesday, April 15, 2025, at 9:00 a.m. Mountain
Time. This year’s Annual Meeting will be accessible through the Internet in order to permit our stockholders to participate
from any geographic location with Internet connectivity. We believe this enhances accessibility to our Annual Meeting for all
stockholders. To attend the Annual Meeting, you must access the meeting website at https://web.lumiconnect.com/245867901. Although
no physical in-person meeting will be held, we have designed the format of the virtual Annual Meeting to ensure that our stockholders
of record who attend the Annual Meeting will be afforded similar rights and opportunities to participate as they would at an in-person
meeting, while providing an online experience available to all of our stockholders regardless of location. At the Annual Meeting,
stockholders will be asked to:
| 1. | Elect
three Class III directors to our board of directors to serve until the 2028 annual meeting
or until their successors are duly elected and qualified (“Proposal 1”); |
| 2. | Approve,
on an advisory basis, the compensation of our named executive officers (“Proposal
2”); |
| 3. | Ratify
the appointment of Deloitte & Touche LLP as our independent registered public accounting
firm for the fiscal year ending December 31, 2025 (“Proposal 3”); |
| 4. | Determine,
on an advisory basis, the frequency of future advisory votes to approve the compensation
of our named executive officers (“Proposal 4”); |
| 5. | Approve
an amendment to our Amended and Restated Certificate of Incorporation (as amended, the
“Charter”) to declassify our board of directors (“Proposal
5”); |
| 6. | Approve
an amendment to our Charter to remove the 66 2/3% supermajority vote requirements to
amend, alter, or repeal our Charter and our Second Amended and Restated Bylaws and to
remove directors from office (“Proposal 6”); |
| 7. | Approve
an amendment to our Charter to limit the liability of certain of our officers (“Proposal
7”); |
| 8. | Approve
an amendment to our Charter to delete the waiver of Section 203 of the Delaware General
Corporation Law, as amended (“Proposal 8”); |
| 9. | Approve
miscellaneous amendments to our Charter (“Proposal 9”); and |
| 10. | Transact
such other business as may properly be brought before the Annual Meeting. |
You
can find more information, including the nominees for directors, executive compensation, and details regarding our independent
registered public accounting firm, in the attached proxy statement. The board of directors recommends that you vote in favor of
each of the above proposals. Pursuant to the “notice and access” rules adopted by the Securities and Exchange Commission,
we have elected to provide access to our proxy materials on the Internet. The approximate date on which the attached proxy statement,
the accompanying Notice of Internet Availability of Proxy Materials (the “Notice”), proxy card, and the Company’s
Annual Report on Form 10-K for the year ended December 31, 2024 are first being made available to stockholders at http://astproxyportal.com/ast/21952/
is [●], 2025. The Notice includes instructions on how to access our proxy materials over the Internet, vote online and
request a printed copy of these materials.
Only
stockholders of record at the close of business on February 19, 2025 are entitled to notice of, and to vote at, the Annual Meeting
or any adjournment. A complete list of stockholders entitled to vote at the Annual Meeting will be available for examination ten
days before the Annual Meeting. If you would like to inspect the list of Company stockholders of record, please contact the Investor
Relations department at IR@libertyenergy.com to schedule an appointment or request access electronically or in person.
IT
IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING. ACCORDINGLY, EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING
VIRTUALLY, WE URGE YOU TO COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE PRIOR
TO THE ANNUAL MEETING OR FOLLOW THE INTERNET OR TELEPHONE VOTING PROCEDURES DESCRIBED ON THE PROXY CARD. IF YOU ATTEND THE ANNUAL
MEETING VIRTUALLY AND WISH TO VOTE AT THAT TIME, YOU MAY WITHDRAW YOUR PROXY AND VOTE AT THE MEETING. YOUR PROMPT CONSIDERATION
IS GREATLY APPRECIATED. YOUR VOTE IS IMPORTANT TO US.
| By
Order of the Board of Directors, |
| /s/
R. Sean Elliott |
| R.
Sean Elliott |
| Chief
Legal Officer and Corporate Secretary |
Denver,
Colorado
[●], 2025
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING
TO BE HELD ON APRIL 15,
2025
This Notice of Annual Meeting and Proxy Statement and our Annual Report on Form 10-K are available
at
http://astproxyportal.com/ast/21952/ |
TABLE
OF CONTENTS
LIBERTY
ENERGY INC.
950 17th STREET, SUITE 2400
DENVER, COLORADO 80202
PROXY
STATEMENT
GENERAL
INFORMATION ABOUT THE 2025 ANNUAL MEETING OF STOCKHOLDERS AND VOTING
The
enclosed proxy is solicited on behalf of the Board of Directors (the “Board”) of Liberty Energy Inc. (the “Company”)
for use at the Company’s 2025 Annual Meeting of Stockholders that will be held on Tuesday, April 15, 2025, at 9:00 a.m.
Mountain Time, virtually at https://web.lumiconnect.com/245867901 (the “Annual Meeting”). In this proxy
statement (the “Proxy Statement”) the terms “Liberty,” “we,” “us”
and “our” all refer to the Company. This Proxy Statement contains important information for you to consider
when deciding how to vote on the matters brought before the Annual Meeting. Please read it carefully.
We
are providing these proxy materials to you in connection with the solicitation by the Board of proxies to be voted at the Annual
Meeting and at any adjournment or postponement thereof. By executing and returning the enclosed proxy card or by voting via the
Internet or by telephone as set forth herein, you authorize the persons named in the proxy to represent you and vote your shares
on the matters described herein. Those persons will also be authorized to vote your shares to adjourn the Annual Meeting from
time to time and to vote your shares at any adjournments or postponements of the Annual Meeting.
Pursuant
to the “notice and access” rules adopted by the Securities and Exchange Commission (the “SEC”),
we have elected to provide stockholders access to our proxy materials over the Internet. The approximate date on which this
Proxy Statement, the accompanying Notice of Internet Availability of Proxy Materials (the “Notice”), proxy
card, and the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 are first being made available to
stockholders at http://astproxyportal.com/ast/21952/ is [●], 2025. The Notice includes instructions on how to
access our proxy materials over the Internet and how to request a printed copy of these materials.
Choosing
to receive your future proxy materials by e-mail or to receive a single set of proxy materials per household will save the Company
the cost of printing and mailing documents to you and will reduce the impact of the Company’s annual meetings on the environment.
If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a
link to those materials and a link to the proxy voting site. Your election to receive proxy materials by e-mail will remain in
effect until you terminate it.
Annual
Meeting Time & Location
→
Date: Tuesday,
April 15, 2025
→
Time: 9:00 a.m. Mountain
Time
→
Location: Virtually held
at https://web.lumiconnect.com/245867901 |
Who
Can Vote at the Annual Meeting
The
Company’s Class A Common Stock, par value $0.01 per share (the “Common Stock”), is the only class of
securities entitled to vote at the Annual Meeting. Each share of Common Stock outstanding at the close of business on February
19, 2025 (the “Record Date”) entitles its holder to one vote with respect to each matter at the Annual Meeting,
and only stockholders of record on the Record Date are entitled to notice of, and to vote, virtually online or by proxy, at the
Annual Meeting.
A
complete list of stockholders entitled to vote at the Annual Meeting will be available for examination ten days before the Annual
Meeting. If you would like to inspect the list of Company stockholders of record, please contact the Investor Relations department
at IR@libertyenergy.com to schedule an appointment.
Purpose
of the Annual Meeting
At
our Annual Meeting, stockholders will act upon the following matters outlined in the Notice:
| 1. | Elect
three Class III directors to our Board to serve until the 2028 annual meeting or until
their successors are duly elected and qualified (“Proposal 1”); |
| 2. | Approve,
on an advisory basis, the compensation of our named executive officers (“Proposal
2”); |
| 3. | Ratify
the appointment of Deloitte & Touche LLP (“Deloitte”) as our independent
registered public accounting firm for the fiscal year ending December 31, 2025 (“Proposal
3”); |
| 4. | Determine,
on an advisory basis, the frequency of future advisory votes to approve the compensation
of our named executive officers (“Proposal 4”); |
| 5. | Approve
an amendment to our Amended and Restated Certificate of Incorporation (as amended, the
“Charter”) to declassify our Board (“Proposal 5”); |
| 6. | Approve
an amendment to our Charter to remove the 66 2/3% supermajority vote requirements to
amend, alter, or repeal our Charter and our Second Amended and Restated Bylaws (as amended,
the “Bylaws”) and to remove directors from office (“Proposal
6”); |
| 7. | Approve
an amendment to our Charter to limit the liability of certain of our officers (“Proposal
7”); |
| 8. | Approve
an amendment to our Charter to delete the waiver of Section 203 of the Delaware General
Corporation Law, as amended (the “DGCL”) (“Proposal 8”); |
| 9. | Approve
miscellaneous amendments to our Charter (“Proposal 9”); and |
| 10. | Transact
such other business as may properly be brought before the Annual Meeting. |
How
to Vote at the Annual Meeting
Many
holders of the Company’s Common Stock hold their shares through a broker, bank, trustee or other nominee rather than directly
in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.
Stockholder
of Record. If your shares are registered directly in your name with our transfer agent, Equiniti Trust Company LLC (“Equiniti”),
then you are considered a “stockholder of record” with respect to those shares. In this case, a Notice or, if requested,
a set of proxy materials has been sent to you directly by us. As a stockholder of record, you may vote over the Internet as described
in the Notice that was mailed to you or, if you have received or requested a hard copy of this Proxy Statement and accompanying
proxy card, you may vote by telephone as described on the proxy card, or by mail by marking, signing, dating and mailing your
proxy card in the postage-paid envelope provided. Your designation of a proxy is revocable by following the procedures outlined
in this Proxy Statement. The method by which you vote will not limit your right to vote virtually at the Annual Meeting. If you
submit a signed proxy card but do not give voting instructions as to how your shares of Common Stock should be voted on a particular
proposal at the Annual Meeting, your shares will be voted in accordance with the recommendations of our Board stated in this Proxy
Statement.
Beneficial
Owners of Shares Held in Street Name. If your shares of our Common Stock are held in a brokerage account or by a bank, trust
or other nominee or custodian, then you are considered the beneficial owner of those shares, which are held in “street name.”
In this case, a Notice or, if requested, a set of proxy materials has been forwarded to you by the organization that holds your
shares. The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting.
As the beneficial owner, you have the right to instruct that organization how to vote the shares held in your account. If you
are a beneficial owner of shares held in “street name,” you need to submit voting instructions to your broker, bank
or other nominee in order to cast your vote. The Notice that was mailed to you by that organization has specific instructions
for how to submit your vote, or if you have received or requested a hard copy of this Proxy Statement you may mark, sign, date
and mail the accompanying voting instruction form in the postage-paid envelope provided. Your vote is revocable by following the
procedures outlined in this Proxy Statement. However, since you are not a stockholder of record you may not vote your shares virtually
at the Annual Meeting without obtaining authorization from your broker, bank or other nominee. Whether or not you plan to attend
the Annual Meeting virtually, we urge you to vote by following the voting instructions provided to you to ensure that your vote
is counted. To vote virtually at the Annual Meeting, you must first obtain a legal proxy from your broker, bank or other agent
and then register in advance to attend the Annual Meeting. After obtaining a legal proxy from your broker, bank or other agent,
to then register to attend the Annual Meeting, you must submit proof of your legal proxy reflecting the number of your shares
along with your name and email address to Equiniti. Requests for registration should be directed to proxy@equiniti.com or to facsimile
number 718-765-8730. Written requests can be mailed to:
Equiniti
Trust Company LLC
Attention: Proxy Tabulation Department
55 Challenger Road, 2nd Floor
Ridgefield Park, New Jersey 07660
Requests
for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on April
1, 2025. You will receive a confirmation of your registration by email after we receive your registration materials.
Telephone
and Internet voting for stockholders of record will be available up until 11:59 p.m. Eastern Time on April 14, 2025, and mailed
proxy cards must be received by April 14, 2025 in order to be counted at the Annual Meeting. If the Annual Meeting is adjourned
or postponed, these deadlines may be extended. The voting deadlines and availability of telephone and Internet voting for beneficial
owners of shares held in “street name” will depend on the voting processes of the organization that holds your shares
of Common Stock. Therefore, we urge you to carefully review and follow the voting instructions card and any other materials that
you receive from that organization.
If
you receive more than one Notice, it is because your shares are registered in more than one name or are registered in different
accounts. Please follow the instructions on each Notice received to ensure that all of your shares of Common Stock are voted.
“Broker
Non-Votes” and Abstentions and their Effect on Proposals
A
broker non-vote occurs when a broker, bank, trust or other nominee or custodian holding shares for a beneficial owner in “street
name” does not vote the shares on a proposal because the nominee does not have discretionary voting power for a particular
item and has not received instructions from the beneficial owner regarding voting. Brokers who hold shares for the accounts of
their clients have discretionary authority to vote shares if specific instructions are not given, only with respect to “routine”
items.
If
your shares are held by a broker on your behalf and you do not instruct the broker as to how to vote your shares of Common Stock
with regard to Proposals 1, 2, and 4 through 9, the broker may not exercise discretion to vote for or against those proposals
because each of these proposals are considered “non-routine” under applicable New York Stock Exchange (“NYSE”)
rules. With respect to Proposal 3, the broker may exercise its discretion to vote for or against such proposal in the absence
of your instruction. Broker non-votes are treated as not entitled to vote on a matter with respect to non-discretionary matters.
An
abstention (i.e. if you or your broker mark “ABSTAIN” on a proxy or voting instruction form, or if a stockholder of
record attends the Annual Meeting but does not vote (either before or during the Annual Meeting)) has the same effect as voting
“AGAINST” Proposals 2, 3, and 5 through 9. Votes that are withheld from a director’s election will not affect
the outcome of Proposal 1, and an abstention will have no effect on Proposal 4.
Quorum
Requirements for the Annual Meeting
The
presence at the Annual Meeting, whether in person or by proxy, of stockholders holding a majority of the shares of Common Stock
outstanding on the Record Date and entitled to vote at the meeting will constitute a quorum, permitting us to conduct our business
at the Annual Meeting. On the Record Date, there were [162,336,099] shares of Common Stock issued and outstanding and entitled
to be voted at the Annual Meeting. Abstentions and broker non-votes will be considered to be shares present at the Annual Meeting
for purposes of constituting a quorum.
Votes
Required to Approve Proposals and Board Recommendations
|
|
|
|
Board
Recommendation |
|
Treatment
of |
| Proposal |
|
Required
Vote |
Abstentions |
|
Broker
Non-Votes |
(1)
To elect three Class III directors to the Board to serve until the 2028 annual meeting
or until their successors are duly elected and qualified
|
|
Plurality
of Votes Cast: The three nominees receiving the greatest number of votes cast in person or represented by proxy and entitled
to vote on the matter(1) |
|
“FOR”
EACH NOMINEE |
|
Abstentions
have no effect. In addition, if you “withhold” authority to vote with respect to the election of some or all of the
nominees, your shares will not be voted with respect to those nominees indicated
|
|
Broker
non-votes have no effect
|
| (2)
To approve, on an advisory basis, the compensation of our named executive officers(2) |
|
Affirmative
vote of a majority of shares present in person or by proxy and entitled to vote on the matter |
|
“FOR” |
|
Abstentions
have the effect of a vote against “AGAINST” |
|
Broker
non-votes have no effect |
| (3)
To ratify the appointment of Deloitte as our independent registered public accounting firm for the fiscal year ending December
31, 2025 |
|
Affirmative
vote of a majority of shares present in person or by proxy and entitled to vote on the matter |
|
“FOR” |
|
Abstentions
have the effect of a vote “AGAINST” |
|
There
will be no broker non-votes because brokers have discretion to vote on this proposal |
| (4)
To determine, on an advisory basis, the frequency of future advisory votes on the compensation of our named executive officers(3) |
|
Plurality
of Votes Cast: The frequency receiving the greatest number of votes cast in person or represented by proxy and entitled to
vote on the matter |
|
“1
YEAR” |
|
Abstentions
have no effect |
|
Broker
non-votes have no effect |
| (5)
To approve an amendment to our Charter to declassify our Board |
|
Affirmative
vote of the holders of at least 66 2/3% in voting power of the outstanding shares of stock entitled to vote thereon, voting
together as a single class |
|
“FOR” |
|
Abstentions
have the effect of a vote “AGAINST” |
|
Broker
non-votes have the effect of a vote “AGAINST” |
| (6)
To approve an amendment to our Charter to remove the 66 2/3% supermajority vote requirements to amend, alter, or repeal our
Charter and Bylaws and to remove directors from office |
|
Affirmative
vote of the holders of at least 66 2/3% in voting power of the outstanding shares of stock entitled to vote thereon, voting
together as a single class |
|
“FOR” |
|
Abstentions
have the effect of a vote “AGAINST” |
|
Broker
non-votes have the effect of a vote “AGAINST” |
| (7)
To approve an amendment to our Charter to limit the liability of certain officers |
|
Affirmative
vote of the holders of at least 66 2/3% in voting power of the outstanding shares of stock entitled to vote thereon, voting
together as a single class |
|
“FOR” |
|
Abstentions
have the effect of a vote “AGAINST” |
|
Broker
non-votes have the effect of a vote “AGAINST” |
| (8)
To approve an amendment to our Charter to delete the waiver of Section 203 of the DGCL |
|
Affirmative
vote of the holders of at least 66 2/3% in voting power of the outstanding shares of stock entitled to vote thereon, voting
together as a single class |
|
“FOR” |
|
Abstentions
have the effect of a vote “AGAINST” |
|
Broker
non-votes have the effect of a vote “AGAINST” |
| (9)
To approve miscellaneous amendments to clarify and update our Charter |
|
Affirmative
vote of the holders of at least 66 2/3% in voting power of the outstanding shares of stock entitled to vote thereon, voting
together as a single class |
|
“FOR” |
|
Abstentions
have the effect of a vote “AGAINST” |
|
Broker
non-votes have the effect of a vote “AGAINST” |
| (1) | If
any nominee receives a greater number of “withhold authority” than votes “for” his or her election in
an uncontested election, where an uncontested election is any election of directors in which the number of nominees for election
does not exceed the number of directors to be elected, then that nominee is required to tender his or her resignation, which the
Board, upon the recommendation of the Nominating and Governance Committee, will decide to accept or decline. |
| (2) | Because
this stockholder vote is advisory, the vote will not be binding, but the Compensation
Committee will review the voting results and take them into consideration when making
future compensation decisions for our named executive officers. |
| (3) | Because
this stockholder vote is advisory, the vote will not be binding, but the Compensation
Committee will review the voting results and take them into consideration when determining
the frequency of future advisory votes regarding the compensation our named executive
officers. |
Revoking
Your Proxy; Changing Your Vote
If
you are a stockholder of record, you may revoke your proxy before the vote is taken at the Annual Meeting by:
| • | signing,
dating and delivering a new proxy with a later date before the applicable deadline to
our Corporate Secretary; |
| • | attending
virtually and voting virtually online at the Annual Meeting; or |
| • | filing
a written revocation with our Corporate Secretary. |
If
your shares are held in “street name,” you may submit new voting instructions by contacting your broker or other organization
holding your shares. You may also vote virtually online at the Annual Meeting, which will have the effect of revoking any previously
submitted voting instructions, if you obtain a legal proxy from the organization that holds your shares.
Your
last vote or proxy will be the vote or proxy that is counted. Your virtual attendance at the Annual Meeting will not automatically
revoke your proxy.
Dissent
and Appraisal Rights
No
action is proposed at the Annual Meeting for which the laws of the State of Delaware or other applicable law provides a right
of our stockholders to dissent and obtain appraisal of or payment for such stockholders’ Common Stock.
Solicitation
Costs
The
cost of preparing, assembling and mailing the proxy materials and of reimbursing brokers, nominees and fiduciaries for the out-
of-pocket and clerical expenses of transmitting copies of the proxy materials to the beneficial owners of shares held of record
by such persons, will be borne by the Company. The Company has retained D.F. King & Co., Inc. (“D.F. King”)
to aid in the solicitation of proxies. It is estimated that the cost of D. F. King’s services will be approximately $11,500
plus expenses. In addition to the solicitation of proxies by mail, proxies may also be solicited by telephone, electronic communication,
or personal communication by employees of D.F. King and the Company.
Voting
Results
We
plan to publish the voting results in a Current Report on Form 8-K, which we expect will be filed with the SEC within four business
days following the Annual Meeting.
Management
Q&A Session
Stockholders
of record who have registered with their voting control number will be able to submit questions for the Annual Meeting’s
question and answer session during the meeting through https://web.lumiconnect.com/245867901 by referring to the “Chat
Box” icon located at the top of the left-hand panel of their screen. For questions regarding the webcast please reach out
to IR@libertyenergy.com.
Technical
Difficulties or Trouble Accessing the Annual Meeting
If
you encounter any technical difficulties with accessing the audio webcast on the day of the Annual Meeting, contact IR@libertyenergy.com.
Equiniti will also be present at the Annual Meeting and monitoring the webcast to assist with any issues.
Questions
You
may call or contact our proxy solicitor, D.F. King, at (800) 334-0384 or via email at libertyenergy@dfking.com if you have
any questions concerning this Proxy Statement.
PLEASE
VOTE. YOUR VOTE IS IMPORTANT TO US. |
PROPOSAL
1 — ELECTION OF THREE CLASS III DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE 2028 ANNUAL MEETING OF STOCKHOLDERS
Information
about our Board
Our
Board currently consists of 10 directors. In accordance with the terms of our Charter and Bylaws, our Board is divided into three
classes: Class I, Class II and Class III, with each class serving staggered three-year terms. Upon the expiration of the term
of a class of directors, directors in that class will be eligible to be elected for a new three-year term at the annual meeting
of stockholders in the year in which their term expires. Each director elected to the Board will hold office until his or her
successor has been elected and qualified or until the earlier of their death, resignation, disqualification or removal. The current
members of the classes of our Board are divided as follows:
| ♦ | Class
III (term expires in 2025): Peter A. Dea, William F. Kimble, and James R. McDonald |
| ♦ | Class
I (term expires 2026): Simon Ayat, Arjun Murti, Gale A. Norton, and Cary D. Steinbeck |
| ♦ | Class
II (term expires in 2027): Ken Babcock, Ron Gusek, and Audrey Robertson |
| ♦ | In
Proposal 5 herein, the Company is recommending that stockholders approve a Charter amendment
that would, if approved, begin a phased-in declassification of the Board starting at
next year’s annual meeting of stockholders. |
To
be elected, director nominees must receive a plurality of the votes cast by the holders of the shares entitled to vote in the
election of directors at the Annual Meeting. Nonetheless, pursuant to our Corporate Governance Guidelines, in an uncontested election,
any director nominee who receives a greater number of “WITHHOLD” votes than votes “FOR” his or her election
(a “Majority Withheld Vote”) is required to tender his or her resignation to the Chair of the Nominating and Governance
Committee within seven days following certification of the stockholder vote. The Nominating and Governance Committee must recommend
to the Board whether to accept the resignation offer within 60 days of receiving the offer of resignation. The Board is required
to consider and act on the recommendation within 30 days following receipt of the recommendation.
Unless
otherwise instructed, the proxy holders will vote the proxies received by them for the three director nominees named below, all
of whom are presently directors of the Company. In the event that any nominee is unable or declines to serve as a director at
the time of the Annual Meeting, the proxies will be voted for any nominee who shall be designated by the present Board to fill
the vacancy, unless the size of the Board is reduced. The proxies cannot be voted for a greater number of persons than the number
of nominees named in this proxy statement. It is not expected that any nominee will be unable or will decline to serve as a director.
Biographical information regarding each nominee is set forth below, as well as a summary of the experiences, qualifications, attributes
or skills that caused the Board to determine that each nominee should serve as a director of the Company. Each nominee’s
experience is evaluated in determining the overall composition of the Board.
Recent
Changes and Developments regarding our Board
On
November 16, 2024, then President-elect Donald J. Trump announced his appointment of Mr. Wright our then Chairman, Director and
Chief Executive Officer to serve as the incoming Secretary of Energy of the United States, subject to ratification and confirmation
by the United States Senate, which occurred on February 3, 2025. As a result, effective February 3, 2025, Mr. Wright resigned
from his positions as Chairman, Director and Chief Executive Officer of the Company. In accordance with the Company’s succession
plan, effective on February 3, 2025, the Board appointed William Kimble as the Company’s independent Chairman of the Board
and Ron Gusek as the Company’s Chief Executive Officer and as a Class II director of the Board with an initial term expiring
at the 2027 annual meeting of stockholders.
On
January 22, 2025 the Board determined to increase the size of the Board from nine directors to 10 directors and appointed Arjun
Murti to fill the newly created vacancy. Mr. Murti was appointed as a Class I director with an initial term expiring at the 2026
annual meeting of stockholders.
On
February 12, 2025, Ms. Robertson provided notice of her intention to resign from the Board, effective upon and subject to ratification
and confirmation by the United States Senate as the incoming Assistant Secretary of Energy, Efficiency and Renewables, in the
Department of Energy of the United States. Ms. Robertson will continue to serve as a member of the Board unless and until confirmed
by the Senate.
NOMINEES
FOR ELECTION AS CLASS III DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE 2028 ANNUAL MEETING OF STOCKHOLDERS
| PETER
A. DEA |
|
|
| Age:
71 |
Key Areas of Experience |
|
| Director
Since: 2018 INDEPENDENT |
• Exploration
and Production
• Senior
Management Experience (CEO/CFO)
• Mergers
& Acquisitions
|
• ESG
• HR/Compensation
• Investor
Relations
• Corporate
Governance
|
 Mr.
Dea has been the Executive Chairman of Confluence Resources LP (“Confluence”) since September 2016. Mr. Dea
has served as the President and Chief Executive Officer of Cirque Resources LP (“Cirque”) since May 2007. Both
Confluence and Cirque are private oil and gas companies. From November 2001 through August 2006, Mr. Dea was President and Chief
Executive Officer and a director of Western Gas Resources, Inc. (“Western Gas”). Mr. Dea joined Barrett Resources
Corporation (“Barrett”) in November 1993 and served as Chief Executive Officer and director from November 1999
and as Chairman from February 2000 through August 2001. Western Gas and Barrett were public oil and gas companies. Prior to that,
Mr. Dea served in several geologic positions with Exxon Company,
U.S.A.
Mr. Dea currently serves as the Chairman of the Board of Ovintiv Inc. and has served as a director of Antero Midstream
Corporation since the closing of its simplification transaction in March 2019. Prior to the simplification, Mr. Dea served
as a director of the general partner of Antero Midstream GP LP beginning in April 2018. Mr. Dea has a Bachelor of Arts
in Geology from Western State Colorado University and a Masters of Science in Geology from the University of Montana.
Mr. Dea also attended the Harvard Business School, Advanced Management Program. We believe that Mr. Dea’s extensive
oil and gas exploration and production experience and involvement in state and national energy policies qualify him for
service on our Board.
|
| WILLIAM
F. KIMBLE |
|
|
| Age:
65 |
Key Areas of Experience |
|
| Director
Since: 2018 INDEPENDENT |
• Public
Accounting
• Mergers
& Acquisitions
• Legal/Regulatory |
• Corporate
Governance
• Risk
Management
• Technology/Cybersecurity |
 Mr.
Kimble has served on our Board since the initial public offering of our Common Stock (the “IPO”) and as non-executive
Chairman of the Board since February 2025. He held the position of Lead Director from October 2018 until his appointment as non-executive
Chairman. From 2009 until his retirement in 2015, Mr. Kimble served as the Office Managing Partner for the Atlanta office and
Managing Partner - Southeastern United States at KPMG LLP (“KPMG”), one of the largest audit, tax and advisory
services firms in the world. Mr. Kimble was also responsible for moderating KPMG’s Audit Committee Institute and Audit Committee
Chair Sessions. Until his retirement, Mr. Kimble had been with KPMG or its predecessor firm since 1986. During his tenure with
KPMG, Mr. Kimble also held numerous senior leadership positions, including Global Chairman of Industrial Markets. Mr. Kimble served
as KPMG’s Energy Sector Leader for 10 years and was the executive director of KPMG’s Global Energy Institute. Mr.
Kimble serves on the board of directors and is the chair of the audit committee of Northern Oil and Gas, Inc. Mr. Kimble also
served on the board of directors, the special committee, and was chair of the audit committee of DCP Midstream, LP from June 2015
until October 2023. Mr. Kimble has a Bachelor of Accounting and Business Administration from Southern Methodist University. We
believe that Mr. Kimble’s extensive accounting background and his experience as a director of public companies qualify him
for service on our Board. |
| JAMES
R. MCDONALD |
| Age:
46 |
Key Areas of Experience |
|
| Director
Since: 2020 INDEPENDENT |
• Technology/Cybersecurity
• Oilfield
Services |
• Marketing/Sales
• Investor
Relations |
 Mr.
McDonald has been Senior Vice President of Investor Relations for Schlumberger (“SLB”), an international oilfield
services and technology company, since April 2023. Previously, he served as President Americas Land of SLB, overseeing onshore
operations in North and South America, from June 2020 to April 2023. Previously, he served as President of Well Services running
SLB’s global stimulation, coiled tubing intervention, cementing and offshore vessel operations. In addition, Mr. McDonald
held multiple leadership roles in line management, operations, quality and safety, and business development at SLB over the past
21 years. His assignments spanned North and South America, North Africa and the Middle East in both land and offshore environments
that included unconventional and deep water. Mr. McDonald graduated from the Massachusetts Institute of Technology with a degree
in chemical engineering. He is actively engaged within the energy industry and community, and currently serves on the Board of
Directors of Permian Strategic Partnership, the Energy Workforce and Technology Council, and he is on the Upstream and Service
Supply and Technology Committees of the American Petroleum Institute. Mr. McDonald was initially nominated to serve on our Board
by SLB pursuant to a stockholders agreement that is no longer in effect. We believe Mr. McDonald’s extensive experience
in the oilfield services industry qualifies him for service on our Board. |
Vote
Required
The
election of directors requires the affirmative vote of a plurality of the votes cast by the holders of the shares of Common Stock
entitled to vote in the election. If you submit a signed proxy card but do not give voting instructions as to how your shares
of Common Stock should be voted, your shares will be voted in accordance with the recommendations of our Board stated in this
Proxy Statement. Neither abstentions nor broker non-votes will have any effect on the outcome of voting on director elections.
THE
BOARD RECOMMENDS VOTING “FOR” THE ELECTION OF EACH CLASS III DIRECTOR NOMINEE.
DIRECTORS
CONTINUING IN OFFICE
| SIMON
AYAT |
|
|
| Age:
70 |
Key
Areas of Experience |
| Director
Since: 2020 INDEPENDENT |
• Corporate
Finance/Capital Markets
• Senior
Management Experience (CEO/CFO)
• Oilfield
Services
• Mergers
& Acquisitions
• Legal/Regulatory |
• Corporate
Governance
• ESG
• HR/Compensation
• Investor
Relations
• Risk
Management |
 Mr.
Ayat served as Senior Strategic Advisor to the Chief Executive Officer for SLB from January 2020 until January 2022. From March
2007 until January 2020, he served as the Executive Vice President and Chief Financial Officer of SLB. Mr. Ayat has held several
financial and operational positions in SLB, where he commenced his career in 1982. He was based in Paris, Houston and Dallas,
as well as in the Middle East and Far East regions, serving as group treasurer, controller, Geomarket manager for Indonesia and
drilling regional vice president for Asia Pacific. Mr. Ayat is also a member of the board of directors and audit committee of
Tenaris S.A., a manufacturer of pipes and related services for energy and industrial applications. He is a French and Lebanese
citizen. Mr. Ayat was initially nominated to serve on our Board by SLB pursuant to a stockholders agreement that is no longer
in effect. We believe Mr. Ayat’s extensive experience in the oilfield services industry and as the Chief Financial Officer
of a publicly traded oilfield services company with international operations qualifies him for service on our Board. |
ARJUN MURTI |
| Age:
55 |
Key
Areas of Experience |
Director
Since: 2025
INDEPENDENT
|
• Exploration
and Production
• Corporate
Finance/Capital Markets |
• Mergers
& Acquisitions
• Oilfield
Services |
 Mr.
Murti is currently a Partner at Veriten LLC, a private research, investment and strategy firm (“Veriten”), and a Senior
Advisor at Warburg Pincus, a private equity firm. He previously was a Partner at Goldman Sachs (“GS”) from 2006 to
2014. Prior to becoming Partner at GS, he served as Managing Director from 2003 to 2006 and as Vice President from 1999 to 2003.
During his time at GS, Mr. Murti worked as a sell-side equity research analyst covering the energy sector and was co-director
of equity research for the Americas from 2012 to 2014. Previously, Mr. Murti held equity analyst positions at JP Morgan Investment
Management from 1995 to 1999 and at Petrie Parkman from 1992 to 1995. Mr. Murti has been a member of the board of directors of
ConocoPhillips since 2015 and serves on its audit and finance committee as chair, executive committee, and human resources and
compensation committee. He also serves on the advisory boards of ClearPath and the Center on Global Energy Policy at Columbia
University. Mr. Murti has a Bachelor of Science and Arts in Finance from the University of Denver. We believe that Mr. Murti’s
extensive experience in the areas of finance, capital markets, and energy policy qualify him for service on our Board. |
GALE A. NORTON |
|
|
| Age:
70 |
Key
Areas of Experience |
| Director
Since: 2019 INDEPENDENT |
• Legal/Regulatory
• Corporate
Governance |
• ESG |
 Ms.
Norton has been the President of Norton Regulatory Strategies, a consulting firm, since 2011. From 2007 to 2010, she served as
General Counsel, Unconventional Oil, of Royal Dutch Shell, an international oil and natural gas company (“Shell”).
Prior to joining Shell, Ms. Norton served as the Secretary of the Interior of the United States under President George W. Bush
from 2001 until 2006 and as the Attorney General of the State of Colorado from 1991 until 1999. Ms. Norton is a director of American
Transmission Company, a private company in the electric utility industry and she has been a Governance Fellow of the National
Association of Corporate Directors. Ms. Norton holds Bachelor of Arts and Juris Doctorate degrees from the University of Denver.
We believe that Ms. Norton’s experience as Attorney General of the State of Colorado and Secretary of the Interior of the
United States qualifies her for service on our Board. |
| CARY
D. STEINBECK |
|
|
| Age:
53 |
Key
Areas of Experience |
| Director
Since: 2018 INDEPENDENT |
• Exploration
and Production
• Mergers
& Acquisitions |
• Corporate
Finance/Capital Markets |
 Mr.
Steinbeck has been a Managing Director at Shea Ventures, an investment firm, since October 2014. From 2007 to 2014, he served
as a Managing Director at Oakmont Corporation, an investment firm. Mr. Steinbeck is a member of the board of directors of Liberty
Resources LLC and served on the board of directors of Accretion Acquisition Corp. from October 2021 to December 2023. Mr. Steinbeck
is a Chartered Financial Analyst® charterholder and has a Bachelor of Arts in Economics from the University of
California, Santa Barbara, and a Master of Business Administration from the University of Southern California. We believe that
Mr. Steinbeck’s experience in the private equity industry, energy sector investing experience, extensive board participation
and understanding of financial markets provide valuable insights for our Company and qualify him for service on our Board.
|
KEN
BABCOCK |
|
|
| Age:
68 |
Key
Areas of Experience |
| Director
Since: 2018 INDEPENDENT |
• Technology/Cybersecurity
• Senior
Management Experience (CEO/CFO)
• Oilfield
Services |
• Mergers
& Acquisitions
• Marketing/Sales
• HR/Compensation |
 Mr.
Babcock is currently the Chief Executive Officer of Abaco Energy Technologies LLC (“Abaco”), a private Houston-based
portfolio company of Riverstone Holdings LLC, an energy-focused private equity firm (“Riverstone”), that was
formed in 2013 to focus on opportunities in manufacturing and services related to North American drilling, completion, and production,
and associated infrastructure. Prior to joining Abaco, Mr. Babcock was the President and Chief Executive Officer of Titan Specialties,
Ltd. (“Titan”) from 2008 until its sale to Hunting PLC in September 2011. Following the sale, Mr. Babcock remained
at Titan until June 2012. Prior to joining Titan, from 2005 until 2008, Mr. Babcock served as President and Chief Executive Officer
of International Logging, Inc. (“ILI”) where he took a narrowly-focused mud logging company of over 300 employees
to a diverse well site services organization of over 1,800 employees spread over 60 countries in a little over two years. Prior
to joining ILI, Mr. Babcock was Director of Strategic Sales at Baker Hughes INTEQ and Vice President of Business Development at
Noble Technology Services. Mr. Babcock began his career with EXLOG in 1980. Mr. Babcock has a Bachelor of Science in Geology from
Florida State University. We believe that Mr. Babcock’s strong business leadership experience qualifies him for service
on our Board. |
| AUDREY
ROBERTSON |
| Age:
44 |
Key
Areas of Experience |
| Director
Since: 2021 |
• Exploration
and Production
• Corporate
Finance/Capital Markets
• Senior
Management Experience (CEO/CFO) |
• Public
Accounting
• Mergers
& Acquisitions
• Investor
Relations
• Risk
Management |
 Ms.
Robertson is a co-founder of Franklin Mountain Energy, LLC, a private oil and gas company operating in the Permian Basin, and
served as its Executive Vice President of Finance from January 2023 until the sale of the company in January 2025. She served
as Chief Financial Officer from September 2018 to January 2023. She also served as a co-founder and Managing Partner of Copper
Trail Partners, LLC, a private equity platform based in Denver from November 2017 until December 2021. From 2005 to 2016, she
served as a Partner and Senior Managing Director at Kayne Anderson Capital Advisors. Prior to that time, she was an investment
banker with Goldman Sachs & Co. Ms. Robertson was a Director of Bonanza Creek Energy, LLC and served on both the audit and
compensation committees from January 2020 until November 2021 and served on the board of directors of Extraction Oil and Gas,
LLC from September 2019 to January 2021 where she served on the audit committee and chaired the special committee on restructuring.
She is the current Vice Chair and a member of the Board of Directors of the New Mexico Oil and Gas Association and serves on the
Finance and Governance sub-committees. She has served on the boards of several private companies and not-for-profit organizations.
She holds a Bachelor of Science degree in Applied Economics and Management from Cornell University and a Master of Accounting
degree from the University of Southern California. We believe that Ms. Robertson’s significant experience in the oil and
gas exploration and production industry and accounting credentials qualify her for service on our Board.
|
| RON
GUSEK |
| Age:
53 |
Key
Areas of Experience |
| Director
Since: 2025 |
• Exploration
and Production
• Technology/Cybersecurity
• Senior
Management Experience (CEO/CFO)
• Oilfield
Services |
• ESG
• Marketing/Sales
• HR/Compensation
• Investor
Relations |
 Mr.
Gusek has served as the Company’s Chief Executive Officer since February 2025 and prior to that was President since 2016.
He served as the Company’s Vice President of Technology and Development of the Company’s predecessor from 2014 until
his promotion to President in 2016. From 2011 to 2014, Mr. Gusek served as Vice President, Corporate Engineering and Technology
of Sanjel Corporation, a global energy service company. Prior to joining Sanjel Corporation, from 2009 to 2011, Mr. Gusek was
Director of Engineering for Zodiac Exploration, an oil and natural gas exploration and production company working in the central
San Joaquin valley in California. From 2003 to 2008, Mr. Gusek was the Canadian Regional Manager of Pinnacle Technologies. Mr.
Gusek has a Bachelor of Science in Mechanical Engineering from the University of Alberta. We believe that Mr. Gusek’s experience
leading our growth during his tenure as our President, and now Chief Executive Officer, and his extensive experience in the hydraulic
fracturing services industry, including technical expertise, qualifies him for service on our Board. |
THE
BOARD AND ITS COMMITTEES
THE
BOARD
Composition
of the Board
Our
Board consists of 10 members separated into three classes of directors, each as equal in number as possible, with each class serving
staggered three-year terms. In Proposal 5 herein, the Company is recommending that stockholders approve a Charter amendment that
would, if approved, begin a phased-in declassification of the Board starting at next year’s annual meeting of stockholders.
In
evaluating director candidates, we, through the Nominating and Governance Committee of the Board (the “Nominating and
Governance Committee”), review the following criteria when assessing director candidates:
|  | relevant
skills, qualifications and experience; |
| | independence
under applicable standards; |
| | qualifications
to serve on Board committees and, as appropriate, serve as a committee chairperson; |
| | business
judgment; |
| | service
on boards of directors of other companies; |
| | personal
and professional integrity; |
| | openness
and willingness to work as part of a team; |
| | willingness
to commit the required time to serve as a Board member; and |
| | familiarity
with the Company and its industry. |
Board
Diversity and Summary of Director Core Skills
The
diversity of experience and range of competencies, qualifications and viewpoints of each director on our Board embody key abilities
that our Nominating and Governance Committee considers valuable to effective oversight of the Company. The Nominating and Governance
Committee values a range of talents, ages, skills, experiences, diversity, and expertise sufficient to provide sound and prudent
guidance with respect to the Company’s strategic and operational objectives, and further believes that gender and ethnic
diversity can be one way to accomplish diversity of thought while still maintaining a Board that is adequately qualified to discharge
its duties. Presently, half of our Board is comprised of members representing gender and ethnic diversity with:
| | two
Board members being female; and |
| | three
additional Board members being ethnically diverse. |
We
believe that our director nominees are able to provide a well-rounded set of expertise that will assist in effective oversight
of management at the Company. The matrix below identifies the core skills, primary competencies and other attributes that each
director brings forth in their service to our Board and committees. The lack of an indicator for a particular item does not mean
that the director does not possess that qualification, skill or experience in general. The indicator merely represents a core
skill that the director brings to our Board. Furthermore, each director possesses other competencies not identified below. We
believe identifying primary skills is a more meaningful presentation of the key contributions and value that each director brings
to their service on the Board and to our stockholders. For more information about each director, see the individual biographies
set forth above.
| |
Ayat |
Babcock |
Dea |
Gusek |
Kimble |
McDonald |
Murti |
Norton |
Robertson |
Steinbeck |
| Exploration
and Production |
|
|
 |
|
|
|
|
|
|
|
| Technology/Cybersecurity |
|
|
|
|
|
|
|
|
|
|
| Corporate
Finance/Capital Markets |
|
|
|
|
|
|
|
|
|
|
| Senior
Management Experience (CEO/CFO) |
|
|
|
|
|
|
|
|
|
|
| Oilfield
Services |
|
|
|
|
|
|
|
|
|
|
| Public
Accounting |
|
|
|
|
|
|
|
|
|
|
| Mergers
& Acquisitions |
|
|
|
|
|
|
|
|
|
|
| Legal/Regulatory |
|
|
|
|
|
|
|
|
|
|
| Corporate
Governance |
|
|
|
|
|
|
|
|
|
|
| ESG |
|
|
|
|
|
|
|
|
|
|
| Marketing/Sales |
|
|
|
|
|
|
|
|
|
|
| HR/Compensation |
|
|
|
|
|
|
|
|
|
|
| Investor
Relations |
|
|
|
|
|
|
|
|
|
|
| Risk
Management |
|
|
|
|
|
|
|
|
|
|
Board
Leadership Structure and Role in Risk Oversight
Our
Board does not have a policy regarding separation of the roles of Chief Executive Officer and Chairman of the Board (the “Chairman”).
In accordance with our Corporate Governance Guidelines (the “Governance Guidelines”), the Board periodically
reassesses the separation of the roles of Chief Executive Officer and Chairman. In connection with Mr. Wright’s resignation
from his positions as Chairman, Director and Chief Executive Officer due to his appointment as the Secretary of Energy of the
United States, the Board appointed William F. Kimble, a non-employee independent director who was serving as Lead Director of
the Board during Mr. Wright’s tenure as Chairman and Chief Executive Officer, to serve as the non-executive Chairman. As
the non-executive Chairman, Mr. Kimble presides at executive sessions of the non-management directors among other responsibilities,
including chairing the meetings of our Board and stockholders. Our Board believes that this structure, combined with our corporate
governance policies and processes, creates an appropriate balance between strong and consistent leadership and independent oversight
of our business. Additionally, this structure allows our Chief Executive Officer to focus on executing our business strategy,
enhancing our operational excellence, furthering our leading technological innovation, and engaging with our stakeholders. Meanwhile,
our non-executive Chairman can focus on leading the Board, ensuring that it provides strong oversight of management and that all
directors are well-positioned to discharge their duties appropriately.
The
Board is responsible for overseeing that the risk management processes designed and implemented by our management are functioning
as intended, and that steps are taken by management to identify and mitigate significant and emerging risks to the Company. Risk
is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of
risks, including those described under “Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2024. Our Board is actively involved in oversight of risks that could affect us. This oversight is conducted by the
Board, which has responsibility for general oversight of risks, but the Audit Committee of the Board (the “Audit Committee”)
assists the Board in fulfilling such oversight responsibilities. Risk assessment and oversight are an integral part of our governance
and management processes. The Board encourages management to promote a culture that incorporates risk management into our corporate
strategy and day-to-day business operations. Management discusses strategic and operational risks at regular management meetings
and conducted a specific strategic session during the year that included a focused discussion and analysis of the risks facing
us. Throughout the year, senior management reviews risks with the Board at regular Board meetings as part of management presentations
that focus on the Company’s overall operations and presents the steps taken by management to mitigate or eliminate such
risks.
The
Board does not have a standing risk management committee, but rather administers this oversight function through the Audit Committee
and the Board as a whole. The Board is responsible for monitoring and assessing strategic risk exposure, and the Audit Committee
assists the Board in fulfilling such oversight responsibilities by overseeing our major risk exposures, including significant
financial, information technology, and cybersecurity risks, and the steps our management has taken to monitor and control these
exposures. The Audit Committee also monitors compliance with legal and regulatory requirements and considers and approves or disapproves
any related-person transactions.
Our
Board periodically reviews its governance and committee structure to ensure that it continues to meet the Company’s needs.
Director
Independence and Family Relationships
The
Company’s standards for determining director independence require the assessment of directors’ independence each year.
A director cannot be considered independent unless the Board affirmatively determines that he or she does not have any relationship
with management or the Company that may interfere with the exercise of his or her independent judgment, including any of the relationships
that would disqualify the director from being independent under the rules of the NYSE.
The
Board has assessed the independence of each non-employee director under the independence standards of the NYSE. The Board has
determined that each of Messrs. Ayat, Babcock, Dea, Kimble, McDonald, Murti and Steinbeck and Ms. Norton is considered independent
under the NYSE rules. In connection with its assessment of the independence of each non-employee director, the Board also determined
that Messrs. Ayat, Babcock, Dea, Kimble, McDonald, Murti and Steinbeck and Ms. Norton are independent as defined in Section 10A-3
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and under the standards set forth by
the NYSE applicable to members of the Audit Committee. Furthermore, none of our directors or officers have any family relationship
with any director or other officers. “Family relationship” for this purpose means any relationship by blood, marriage
or adoption, not more remote than first cousin.
BOARD
COMMITTEES
Overview
Our
Board has established an Audit Committee, a Compensation Committee of the Board (the “Compensation Committee”)
and a Nominating and Governance Committee as further detailed herein. The below chart sets forth the members and chairperson of
each Board committee.
Name |
Audit
Committee |
Compensation
Committee |
Nominating
and
Governance
Committee
|
| William
F. Kimble+ |
* |
|
● |
| Cary
D. Steinbeck |
● |
● |
|
| Peter
A. Dea |
|
* |
● |
| Ken
Babcock |
|
● |
|
| Gale
A. Norton |
● |
|
* |
| Simon
Ayat |
● |
|
|
| James
R. McDonald |
|
● |
|
| + |
Non-Executive Chairman of the Board | * |
Chairperson |
● |
Member |
Audit
Committee
Rules
implemented by the NYSE and the SEC require us to have an Audit Committee comprised of at least three directors who meet the independence
and experience standards established by the NYSE and the Exchange Act. Our Audit Committee currently consists of four directors,
all of whom are independent under the rules of the SEC and the standards set forth by the NYSE applicable to members of an Audit
Committee. Messrs. Ayat, Kimble and Steinbeck and Ms. Norton are the members of our Audit Committee with Mr. Kimble serving as
the chairperson. Each member of our Audit Committee is financially literate, and our Board has determined that Mr. Kimble qualifies
as an “audit committee financial expert” as defined in applicable SEC rules.
The
Audit Committee oversees, reviews, acts on and reports on various auditing and accounting matters to our Board, including: the
selection of our independent accountants, the scope of our annual audits, fees to be paid to the independent accountants, the
performance of our independent accountants and our accounting practices. The general purpose of our Audit Committee is to assist
the Board in oversight responsibilities regarding the integrity of the Company’s financial statements, compliance with legal
and regulatory requirements, performance of the independent registered public accounting firm engaged by the Company and the effectiveness
of the Company’s internal audit functions. The Audit Committee is also responsible for oversight of the Company’s
information technology and cybersecurity risks. The Audit Committee operates under an Audit Committee charter that defines the
committee’s primary duties in a manner consistent with the rules of the SEC and NYSE. A current copy of the Audit Committee
charter can be found on our website, www.libertyenergy.com, by first clicking “Investors” then “Corporate
Governance” and proceeding to “Governance Documents.”
Compensation
Committee
Our
Compensation Committee currently consists of four directors: Messrs. Dea, Babcock, McDonald, and Steinbeck with Mr. Dea serving
as the chairperson. Our Compensation Committee establishes salaries, incentives and other forms of compensation for the Board,
executive officers, and other senior officers. Our Compensation Committee also assists the Board with the administration and oversight
of our incentive compensation and benefit plans, our compensation recovery policy, and our stock ownership guidelines. The Compensation
Committee has the authority to delegate to its chairperson or any one of its members the responsibility and authority for any
particular matter, as it deems appropriate from time to time under the circumstances. The Compensation Committee operates under
a Compensation Committee charter that defines the committee’s primary duties. A current copy of the Compensation Committee
charter can be found on our website, www.libertyenergy.com, by first clicking “Investors” then “Corporate
Governance” and proceeding to “Governance Documents.”
The
Board has determined that all directors on the Compensation Committee are independent under the standards set forth by the NYSE
and under the Exchange Act.
Nominating
and Governance Committee
Our
Nominating and Governance Committee currently consists of three directors: Ms. Norton and Messrs. Kimble and Dea with Ms. Norton
serving as the chairperson. The Nominating and Governance Committee operates under a Nominating and Governance Committee charter
that defines the committee’s primary duties. A current copy of the Nominating and Governance Committee charter can be found
on our website, www.libertyenergy.com, by first clicking “Investors” then “Corporate Governance”
and proceeding to “Governance Documents.”
Our
Nominating and Governance Committee oversees our corporate governance framework, including identifying, evaluating and recommending
qualified nominees to serve on our Board. Our Nominating and Governance Committee also develops and oversees our corporate governance
processes, including the annual performance evaluation of the Board and its committees, and of senior management, evaluating director
independence, and develops, reviews and recommends to the Board any changes to our Corporate Governance Guidelines and other applicable
governance policies.
The
Board and the Nominating and Governance Committee believe the skills, qualities, attributes, and experience of our directors provide
our Company with business acumen and a diverse range of perspectives to effectively address our evolving needs and represent the
best interests of our stockholders.
When
identifying director nominees, the Nominating and Governance Committee considers and reviews the following criteria: the candidate’s
relevant skills, qualifications and experience; independence under applicable standards; qualifications to serve on Board committees
and, as appropriate, serve as a committee chairperson; business judgement; service on boards of directors of other companies;
personal and professional integrity; openness and ability to work as part of a team; willingness to commit to the required time
to serve as a member of the Board; and familiarity with the Company and its industry. Additionally, when considering the recommendation
to the Board that an existing director be nominated for election at the annual meeting of stockholders, the Nominating and Governance
Committee will consider and review: the past Board and committee meeting attendance and performance, the length of Board service,
the personal and professional integrity, the relevant experience, skills, qualifications and contributions that the existing director
brings to the Board and their independence under the applicable standards.
The
Nominating and Governance Committee will consider suggestions from any source, particularly from stockholders, regarding possible
candidates for director; provided, however, that in order for such stockholder recommendation to be considered, the recommendations
must comply with the procedures outlined under “Stockholder Proposals” below.
The
Board has determined that all directors on the Nominating and Governance Committee are independent under the standards set forth
by the NYSE.
MEETING
ATTENDANCE OF THE BOARD AND BOARD COMMITTEES
During
2024, the Board and its committees regularly met on a set schedule as set forth in the following table. Additionally, the Board
and its committees acted by written consent from time to time, as appropriate. The Board and its committees held no special meetings
during 2024.
| |
Regularly
Scheduled
Meetings |
Special
Meetings |
Total
Meetings |
| Board
of Directors |
5 |
0 |
5 |
| Audit
Committee |
7 |
0 |
7 |
| Compensation
Committee |
4 |
0 |
4 |
| Nominating
and Governance Committee |
3 |
0 |
3 |
At
each Board meeting, time is reserved for the independent directors to meet in executive session without the Chief Executive Officer
present. Furthermore, executive officers regularly attend Board meetings to present information to our Board on our business and
strategy. From time to time between meetings, Board and committee members confer with each other and with management and independent
consultants regarding relevant issues, and representatives of management may meet with such consultants on behalf of the relevant
committee.
Each
director participated, whether in person or by telephone or videoconference, in at least seventy-five percent (75%) of all meetings
of the Board and the committees of which such director is a member. There is no formal policy as to director attendance at the
Annual Meeting, but our corporate governance guidelines encourage directors to attend. Eight members of our Board who were serving
at such time attended last year’s annual stockholder meeting.
CORPORATE
CODE OF BUSINESS CONDUCT AND ETHICS
Our
Board has adopted a Corporate Code of Business Conduct and Ethics (the “Ethics Code”) applicable to our employees,
directors and officers, in accordance with applicable U.S. federal securities laws and the corporate governance rules of the NYSE.
Any waiver of the Ethics Code may be made only by our Board or a Board committee and will be promptly disclosed as required by
applicable SEC laws and the corporate governance rules of the NYSE. A current copy of the Ethics Code can be found on our website,
www.libertyenergy.com, by first clicking “Investors” then “Corporate Governance”
and proceeding to “Governance Documents,” and is available in print to any stockholder who requests it. We
intend to post any waiver of our Ethics Code or substantive amendments to the Ethics Code to our website.
CORPORATE
GOVERNANCE GUIDELINES
Our
Board has adopted the Governance Guidelines in accordance with the corporate governance rules of the NYSE that serve as a framework
within which our Board and committees operate. These guidelines cover matters including, but not limited to, the composition of
our Board, Board membership criteria and qualifications, director responsibilities, meetings of the Board and non-management directors,
Board committees, director access to management and independent advisors, director compensation, and evaluation of management
and management succession planning. A current copy of our Governance Guidelines can be found on our website, www.libertyenergy.com,
by first clicking “Investors” then “Corporate Governance” and proceeding to “Governance
Documents,” and is available in print to any stockholder who requests it.
DIRECTOR
RESIGNATION POLICY
Our
director resignation policy is set forth within our Corporate Governance Guidelines. To be elected, director nominees must receive
a plurality of the votes cast by the holders of the shares entitled to vote in the election of directors at the Annual Meeting.
However, in an uncontested election, any director nominee who receives a Majority Withheld Vote is required to tender his or her
resignation to the Chair of the Nominating and Governance Committee within seven days following certification of the stockholder
vote. The Nominating and Governance Committee must recommend to the Board whether to accept the resignation offer within 60 days
of receiving the offer of resignation. The Board is required to consider and act on the recommendation within 30 days following
receipt of the recommendation.
COMPENSATION
RECOVERY POLICY
Our
Compensation Recovery Policy provides that incentive-based compensation paid to our current and former executive officers may
be recovered in the event of a restatement of our financial results. In connection with any such restatement, the Compensation
Committee may seek recovery of any erroneously awarded incentive compensation paid within a three-year lookback period, including
payments under the annual cash incentive program and payments and grants under the long-term incentive plan, by reimbursement,
cancellation, forfeiture, and/or offset.
COMMUNICATION
WITH THE BOARD
The
Board welcomes communications from the Company’s stockholders and other interested parties. Stockholders and any other interested
parties may send communications to the Board, any committee of the Board, the Chairman or any other director to:
Liberty
Energy Inc.
c/o
Corporate Secretary
950 17th Street, Suite 2400
Denver,
Colorado 80202
Stockholders
and any other interested parties should mark the envelope containing each communication as “Stockholder Communication with
Directors” and clearly identify the intended recipient(s) of the communication. The Company’s Corporate Secretary
or other officer as designated by the Board, will review each communication received from stockholders and other interested parties
and will forward the communication, as expeditiously as reasonably practicable, to the addressees if the communication falls within
the scope of matters generally considered by the Board. To the extent the subject matter of a communication relates to matters
that have been delegated by the Board to a committee or to an executive officer of the Company, then the Company’s Corporate
Secretary may forward the communication to the executive officer or chairman of the committee to which the matter has been delegated.
The acceptance and forwarding of communications to the members of the Board or an executive officer does not imply or create any
fiduciary duty of the Board members or executive officer to the person submitting the communications.
STOCKHOLDER
ENGAGEMENT
We
believe that regular dialogue with, and accountability to, our stockholders is critical to our success and value creation. Our
management team participates in investor meetings throughout the year to discuss our business and strategic priorities and financial
performance. These meetings include in-person, telephone and webcast engagements, as well as investor conferences. The feedback
obtained through such engagement provides our Board and management with valuable insights on our business strategy and performance,
technological innovation, corporate responsibility, executive compensation, sustainability initiatives, and many other topics
of interest to our stockholders.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The
members of the Compensation Committee are set forth above. During 2024, our last completed fiscal year, none of our executive
officers served on the board of directors or compensation committee of a company that had an executive officer that served on
our Board or Compensation Committee. Further, no member of our Board was an executive officer of a company in which one of our
executive officers served as a member of the board of directors or compensation committee of that company.
EXECUTIVE
OFFICERS
The
following sets forth certain information with respect to the executive officers of the Company as of February 19, 2025.
| Name |
Age |
Position(s) |
| Ron
Gusek |
53 |
Director
and Chief Executive Officer |
| Michael
Stock |
63 |
Chief
Financial Officer and Treasurer |
| R.
Sean Elliott |
50 |
Chief
Legal Officer and Corporate Secretary |
| Ryan
T. Gosney |
51 |
Chief
Accounting Officer and Vice President of Finance |
|  | Ron
Gusek – Director and Chief Executive Officer. See “Proposal 1 –
Election of Directors – Directors Continuing in Office” above for information
regarding Mr. Gusek. |
|  | Michael
Stock – Chief Financial Officer and Treasurer. Michael Stock has served
as our Chief Financial Officer since December 2016, our Treasurer since March 2018 and
as the Chief Financial Officer of our predecessor company from April 2012 until our IPO.
Mr. Stock served as a director of the Company from December 2016 up until January 2018
and resigned upon completion of our IPO. From 2009 to 2012, he was employed by TAS Energy
Inc., an industrial energy technology company. During his tenure, he served as Chief
Financial Officer and was a key part of the raising of equity from leading investment
groups including Kleiner Perkins, Element Partners, Natural Gas Partners and Credit Suisse.
From 1997 to 2009, Mr. Stock served as Chief Financial Officer for Pinnacle Technologies. |
|  | R.
Sean Elliott – Chief Legal Officer and Corporate Secretary. Sean Elliott has been our Chief Legal Officer since
January 2023 and prior to that was Vice President and General Counsel since March 2017. He has also served as our Corporate Secretary
since 2018. Between September 2016 and March 2017, Mr. Elliott worked as Assistant General Counsel at USAA Real Estate Company,
a real estate investment firm. Between June 2015 and September 2016, Mr. Elliott served as Counsel at Haynes and Boone, LLP, an
international corporate law firm. Between November 2007 and May 2015, Mr. Elliott served as Vice President, General Counsel, Corporate
Secretary and Chief Compliance Officer of CARBO Ceramics Inc., an oilfield services production enhancement company. Mr. Elliott
has a Bachelor of Arts in Economics and Business Administration from Austin College and a Doctor in Jurisprudence degree from
the University of Texas at Austin. |
|  | Ryan
T. Gosney – Chief Accounting Officer and Vice President of Finance.
Ryan
Gosney has been our Chief Accounting Officer since March 2017 and Vice President of Finance
since January 2025. Between July 2016 and February 2017, Mr. Gosney served as the Chief
Accounting Officer of Vantage Energy Inc. (“Vantage”), an oil and
gas exploration and production company. Prior to joining Vantage, Mr. Gosney served as
Chief Financial Officer for Dorado E&P Partners, LLC, an oil and gas company, from
January 2012 to January 2016. Mr. Gosney began his career as an auditor with Arthur Andersen,
LLP in September 1995 where he served in increasing roles of responsibility up to Audit
Manager until June 2002. Mr. Gosney has also served as Controller for Patina Oil &
Gas Corporation from October 2002 to October 2005 and Delta Petroleum Corporation from
October 2005 to January 2012. Mr. Gosney has a Bachelor of Business Administration from
Texas Christian University. |
COMPENSATION
DISCUSSION & ANALYSIS
This
Compensation Discussion & Analysis provides information about our rationale and policies with regard to the compensation of
our principal executive officer, principal financial officer and our three other most highly-compensated executive officers (our
“Named Executive Officers” or “NEOs”) for 2024 and is intended to provide investors with
the material information necessary for understanding our compensation policies and decisions regarding our Named Executive Officers
as well as providing context for the tabular disclosure provided in the executive compensation tables below. Our Named Executive
Officers for 2024 include:
| Name |
Title |
| Christopher
A. Wright(1) |
Chairman
of the Board and Chief Executive Officer |
| Michael
Stock |
Chief
Financial Officer and Treasurer |
| Ron
Gusek(2) |
President |
| R.
Sean Elliott |
Chief
Legal Officer and Corporate Secretary |
| Ryan
T. Gosney(3) |
Chief
Accounting Officer |
| |
|
| (1)
Mr. Wright resigned as Chairman of the Board and Chief Executive Officer effective February 3, 2025 in connection with his
confirmation as Secretary of the United States Department of Energy as previously disclosed in the Company’s Current
Report on Form 8-K filed on November 19, 2024. |
| (2)
Mr. Gusek was appointed Chief Executive Officer effective February 3, 2025 in connection with the resignation of Mr. Wright
as described in the above footnote. |
| (3)
Mr. Gosney was additionally appointed Vice President of Finance effective January 22, 2025. |
2024
Compensation Overview
The
Compensation Committee recommended, and the Board approved, the following compensation-related actions for our Named Executive
Officers for fiscal year 2024, further detailed below:
| ● | Base
Salaries: The 2024 base salaries for each Named Executive Officer were increased
in response to marketplace pay increases. |
| ● | Annual
Incentive Awards: The bonus target criteria for annual incentive awards was the same
used in 2023 based on the achievement of specific Company performance objectives. |
| ● | Long-Term
Incentive Compensation: The long-term incentive compensation included both time-based
awards, vesting ratably over a three-year period, and performance-based awards, with
three-year cliff vesting. |
Leadership
Changes
On
November 16, 2024, then President-elect Donald J. Trump announced his appointment of Mr. Wright our then Chairman, Director, and
Chief Executive Officer to serve as the incoming Secretary of Energy of the United States, subject to ratification and confirmation
by the United States Senate, which occurred on February 3, 2025. As a result, effective February 3, 2025, Mr. Wright resigned
from his positions as Chairman, Director, and Chief Executive Officer of the Company. In accordance with the Company’s succession
plan, effective on February 3, 2025, the Board appointed William Kimble as the Company’s non-executive Chairman and Ron
Gusek as a director of the Board and as Chief Executive Officer.
2024
Say on Pay
At
our 2024 annual meeting of stockholders, our stockholders were asked to approve, on a non-binding, advisory basis, the compensation
of our Named Executive Officers, as reported in our 2024 proxy statement (“Say on Pay”). In 2024, our stockholders
overwhelmingly approved the compensation of our Named Executive Officers, with nearly 95% of the votes cast in favor of such practices.
The Compensation Committee and the Board viewed the results of the Say on Pay vote and, given the strong stockholder support for
the compensation of our Named Executive Officers in 2024, believe that no significant changes to our compensation program were
warranted as a result of this vote. As discussed in more detail in “Proposal 2: Advisory Vote to Approve the Compensation
of the Company’s Named Executive Officers,” the Board has recommended that stockholders vote, on a non-binding
advisory basis, to approve the compensation of our Named Executive Officers, as described below.
Compensation
Best Practices
The
Company’s compensation program has been designed to support a strong governance model. Key elements of the program in support
of this objective are set forth in the chart below:
Process
for Setting Compensation and Role of Compensation Consultant
At
the beginning of each year, the Compensation Committee engages an independent executive compensation consulting firm in order
to provide independent and objective market compensation data, conduct compensation analysis, recommend plan design changes and
advise on compensation related risks. The Compensation Consultant (as defined below) acts solely on behalf of the Compensation
Committee and not on behalf of the Company’s management team. During 2024, the Compensation Committee engaged NFP and CBIZ
Inc. as compensation consultants, with CBIZ replacing NFP in April 2024 (the “Compensation Consultant”). The
Compensation Consultant compiles compensation surveys for review by the Compensation Committee and management. After review of
the Compensation Consultant’s surveys, management provides recommendations of compensation for our Named Executive Officers
to the Compensation Committee. Such recommendations are generally based upon the guidance of the Compensation Consultant and the
performance of our management as a team. The Compensation Committee then reviews management’s recommendation with the ability
to ask questions of both management and the Compensation Consultant and may conduct an executive session as needed to discuss
compensation. The Compensation Committee has the final authority to make all decisions regarding recurring and other compensation
decisions without separate Board approval.
The
Compensation Consultant also assists the Compensation Committee with the determination of our Peer Group, as defined and described
below, and design of our annual incentive program and long-term incentive awards. Using the independence factors established by
the SEC and the NYSE, the Compensation Committee determined that the Compensation Consultant’s work did not raise any conflicts
of interest, and they are considered an independent consulting firm.
Competitive
Market Position and Peer Group
To
further emphasize the alignment between Company performance and executive pay and to ensure compensation is competitive, for 2024
the Compensation Committee generally targeted the 50th percentile for total compensation (base salary and short-term and long-term incentives) for the named executive officers as a group, as reflected by various sources of compensation data (collectively,
“Market Data”). The Market Data provided to the Compensation Committee by the Compensation Consultant includes
compensation information from our Peer Group as well as other broad-based compensation survey sources selected by the Compensation
Consultant. Although the Compensation Committee used the Market Data to inform its decisions regarding the form and amount of
compensation provided to our Named Executive Officers in 2024, the Compensation Committee also considered other factors such that
the compensation provided to our Named Executive Officers is not exclusively reflective of the Market Data.
For
purposes of setting 2024 compensation, the peer group companies (our “Peer Group”) used by the Compensation
Consultant and the Compensation Committee included the following companies:
| |
NOV
Inc. |
Flowserve
Corporation |
| |
Weatherford
International plc |
Gates
Industrial Corporation plc |
| |
ChampionX
Corporation |
Oceaneering
International, Inc. |
| |
Valaris
Limited |
Helmerich
& Payne, Inc. |
| |
Patterson-UTI
Energy, Inc. |
Cactus,
Inc. |
Our
Peer Group was selected based on companies that broadly represent related drilling, oilfield services and manufacturing businesses
and are of reasonably comparable size to the Company based on revenue, market capitalization and other financial metrics. While
some of these companies have different revenues or market capitalizations, these companies represent the market in which we most
directly compete for qualified professionals. As a whole, our Peer Group reflects companies with related operations, of reasonably
similar size, and with which we compete for talent. Our Peer Group consists of the same companies that comprised our 2023 compensation
peer group with the exception of NexTier Oilfield Solutions Inc., which ceased to exist following its merger into Patterson-UTI
Energy, Inc. in the second half of 2023.
Objectives
of Compensation
The
goal of the Company’s compensation program is to help attract and retain qualified executive talent and to strengthen the
alignment between executives and stockholders’ interests, enhancing stockholder value. To achieve this goal, the Compensation
Committee’s decisions are guided by the following principles: provide a competitive compensation package; relate compensation
to the performance of the Company and the individual; and align employee objectives with the objectives of stockholders by encouraging
executive stock ownership.
In
order to achieve these objectives, the Compensation Committee has created a compensation package that combines fixed and variable
cash compensation with equity-based compensation. The Company’s compensation program for executive officers consists of
the following items:
| * | performance-based
annual incentive payments under the Company’s Amended and Restated Long-Term Incentive
Plan (“LTIP”), which in 2024 were based upon the Company’s adjusted
pre-tax earnings per share (“Adjusted Pre-Tax EPS”), return on capital
employed (“Adjusted ROCE”), the Company’s Adjusted ROCE as compared
to the Adjusted ROCE of a peer group of companies (such comparison, “Comparative
ROCE”), and personal performance; |
| * | long-term
equity awards under our LTIP, consisting of both time-based and performance-based restricted
stock units; and |
| * | matching
contributions under the Liberty Oilfield Services 401(k) Savings Plan. |
The
Compensation Committee structures executive total direct compensation to emphasize performance through the annual incentive program
and long-term incentives. The Compensation Committee believes that the compensation mix should strike a balance promoting long-term
returns without motivating or rewarding excessive or inappropriate risk-taking.
Elements
of Compensation
2024
Pay Mix
Our
compensation program is designed so that the higher an executive’s position in the Company, the greater the percentage of
compensation is contingent on the Company’s performance. The Company believes that having a significant portion of our Named
Executive Officers’ compensation at risk better aligns their interests with the long-term interests of the Company and its
stockholders. A majority of our Named Executive Officers total target direct compensation for fiscal year 2024 was variable, at
approximately 88% for our Chief Executive Officer and averaging 81% for our other Named Executive Officers. The following charts
illustrate the total target mix of direct compensation for our Named Executive Officers for fiscal year 2024.
| Chief
Executive Officer |
Other
Named Executive Officers (Average) |
| |
|
 |
 |
Base
Salary
Each
Named Executive Officer’s base salary is a fixed component of compensation for performing specific job duties and functions.
In January 2024, the Compensation Committee approved a 5% raise to Named Executive Officer base salaries effective February 2024
to more closely align with the 50th percentile of the Peer Group since current salaries had fallen below the 25th percentile of
the Peer Group. Specifically, the annualized base salaries for each Named Executive Officer are as follows for 2024:
Name |
2024
Base Salary |
Increase
over 2023
Base
Salary
|
| Christopher
A. Wright |
$675,000 |
5% |
| Michael
Stock |
$449,000 |
5% |
| Ron
Gusek |
$497,000 |
5% |
| R.
Sean Elliott |
$441,000 |
5% |
| Ryan
T. Gosney |
$331,000 |
5% |
Annual
Incentive Award
In
2024, based on the analysis provided by the Compensation Consultant and the recommendation of the Compensation Committee, the
Board established performance metrics and hurdles for our 2024 annual incentive awards that are focused on the results of adjusted
Pre-Tax EPS, Adjusted ROCE and Comparative ROCE. The Compensation Consultant recommended, and the Compensation Committee approved,
maintaining an element of discretion in the annual incentive for our Named Executive Officers in order to provide the Compensation
Committee the flexibility to respond to specific events that are relevant to each Named Executive Officer’s performance
during the year. No payout percentage would be earned for a metric if the actual Company performance of that metric was below
the threshold level set for that metric below. Payouts for performance between threshold, target and maximum would have been calculated
using straight line interpolation. The overall payout amount for each Named Executive Officer is capped at 200% of each Named
Executive Officer’s target incentive award. The performance metrics, their related thresholds and weightings and actual
performance for the year ended December 31, 2024 are set forth in the table below:
Performance
Metric
|
Weighting
|
Threshold
(50%
Payout) |
Target
(100%
Payout) |
Maximum
(200%
Payout) |
Actual
Performance
|
Earned
Payout Percentage of Annual Incentive Award |
| Adjusted
Pre-Tax EPS(1) |
25% |
$1.05 |
$3.23 |
$5.42 |
$2.40 |
80.9% |
| Adjusted
ROCE(2) |
25% |
9% |
27% |
42% |
19.5% |
79.4% |
| Comparative
ROCE(3) |
30% |
See
Comparative ROCE Chart below |
1
of 10(4) |
200% |
| Discretionary |
20% |
N/A |
N/A |
N/A |
20% |
100% |
| (1) | Adjusted
Pre-Tax EPS is equal to the Company’s 2024 adjusted pre-tax income (adding back
income tax and certain adjustments that include tax receivable agreement impacts, when
applicable), divided by diluted weighted average shares outstanding for 2024. |
| (2) | Adjusted
ROCE is equal to the Company’s 2024 adjusted pre-tax net income (adding back income
tax and tax receivable agreement impacts, when applicable) divided by the simple average
of capital (debt and equity) employed at December 31, 2024 and 2023. |
| (3) | Comparative
ROCE is determined by comparing the Company’s Adjusted ROCE and ranking it against
the Adjusted ROCE of the 2024 peer group, as further detailed below. |
| (4) | Comparative
ROCE Peer Group data based on the most recent public filings1. |
In
the view of the Compensation Committee, the Company faced softening market conditions in 2024 better than its peers as evidenced
by the Company’s financial execution and approved a target payout of 20% on the 2024 discretionary incentive opportunity
for all Named Executive Officers. The same rate of payout on the discretionary portion was awarded for each executive officer
to recognize the collaborative team effort utilized to obtain these results.
The
target incentive for each Named Executive Officer and the 2024 annual incentive payout for each Named Executive Officer is set
forth below. Target incentive levels were increased in 2024 from 7-10%, depending on the officer, in order to better align targeted
total cash compensation with the 50th percentile of the Peer Group.
Name |
|
Target
Annual Incentive
(% of Base Salary) |
Target
Annual Incentive ($)
|
Performance
Achievement Level
(%
of Target)
|
Actual
2024 Annual Incentive Payout |
| Christopher
A. Wright |
|
158.5% |
$1,070,000 |
120.1% |
$1,284,803 |
| Michael
Stock |
|
138.3% |
$621,000 |
120.1% |
$745,666 |
| Ron
Gusek |
|
135.6% |
$674,000 |
120.1% |
$809,306 |
| R.
Sean Elliott |
|
109.3% |
$482,000 |
120.1% |
$578,762 |
| Ryan
T. Gosney |
|
116.3% |
$385,000 |
120.1% |
$462,289 |
1 The
Company intends to update this to the most recently available public data, including the date of such data, at the time of filing
its Definitive Proxy Statement on Schedule 14A.
Comparative
ROCE is determined by comparing and ranking the Adjusted ROCE (as defined below) of the Company against the Adjusted ROCE of peer
companies (such peer group, the “ROCE Peer Group”). Our Adjusted ROCE and the Adjusted ROCE of each member
of the ROCE Peer Group is calculated for a calendar year and then ranked in order of highest to lowest, with the highest Adjusted
ROCE being ranked 1 of 10, and the lowest Adjusted ROCE ranked 10 of 10. The amount of the target award paid for this metric is
then based on our numerical ranking against the ROCE Peer Group as follows, with the use of linear interpolation to determine
the exact amount of payout (the “ROCE Ranking Matrix”):
| Comparative
ROCE |
| Ranking
of Company Adjusted ROCE against ROCE Peer Group |
Payout
Percentage of Target Award |
| 1
of 10 |
200% |
| 2
of 10 |
175% |
| 3
of 10 |
150% |
| 4
of 10 |
125% |
| 5
of 10 |
100% |
| 6
of 10 |
75% |
| 7
of 10 |
50% |
| 8
of 10 |
0% |
| 9
of 10 |
0% |
| 10
of 10 |
0% |
The ROCE Peer Group is reviewed and set each year, provided
that the Compensation Committee reserves the right to revise the ROCE Peer Group throughout the year, which may include adjustments to
eliminate the effects of extraordinary or non-recurring items. While some companies in the ROCE Peer Group may overlap with companies
in Peer Group, the focus of the ROCE Peer Group is to provide a metric by which the effectiveness of capital deployment can be measured.
Accordingly, the ROCE Peer Group focuses more particularly on other companies that have capital needs that are similar to those of the
Company. The Peer Group tends to focus and include companies based on the relative size of the peers based on metrics such as revenue
and market capitalization. The ROCE Peer Group also utilizes the S&P 500 to provide a broader measure of the effectiveness of deployment
of capital across various industries. Similar to the rationale for using the S&P 500, the Committee believes that that the OSX index
also provides a broad measure of the effectiveness of the deployment of capital across the oilfield services industry. The 2024 ROCE Peer
Group is unchanged from 2023 and consists of the following companies and indices:
| |
S&P
500 Index |
Halliburton
Company |
| |
OSX
Index |
Oil States International, Inc. |
| |
ProPetro
Holding Corp. |
Helmerich
& Payne, Inc. |
| |
Patterson-UTI
Energy, Inc. |
RPC,
Inc. |
| |
Nine
Energy Service, Inc. |
|
Our
Company Adjusted ROCE for 2024 was 19.5%, which ranked 1 of 10 against the ROCE Peer Group for 2024 based on data from the most
recent public filings2, resulting in a weighted payout percentage for the Comparative ROCE component of the annual
incentive award equal to 200.0%.
Long-Term
Incentive Compensation
We
maintain the LTIP in order to incentivize individuals providing services to us or our affiliates. In 2024, following recommendations
by the Compensation Consultant and our Compensation Committee, our Board granted both time-based and performance-based restricted
stock units (“RSUs”), each which represent the right to receive shares of our Class A Common Stock following
the applicable vesting period. The Compensation Committee has considered the use of other forms of equity awards, including restricted
stock and stock options, and ultimately determined to use RSUs given that they have a less dilutive effect than stock options
and do not require the issuance of actual shares of Class A Common Stock unless and until vesting conditions are met. For 2024,
the grant date value of RSUs for the Named Executive Officers as a group was initially set at approximately the 50th percentile
based on market data. The Compensation Committee and our Board determined that a combination of time-based and a performance-based
vesting approach was appropriate given the Company’s desire to provide our Named Executive Officers with a long-term retention-focused
award that also aligns the interests of our Named Executive Officers with those of our stockholders while at the same time furthering
the Company’s pay-for-performance philosophy.
2
The Company intends to update this to the most recently available public data, including the date of such data, at the time
of filing its Definitive Proxy Statement on Schedule 14A.
For
2024, one-half of the RSUs awarded to Messrs. Wright, Stock and Gusek vest ratably over a three-year period, and one-half vests
at the end of a three-year performance period based on the Company’s performance against a ROCE Peer Group. Messrs. Elliott
and Gosney received RSU awards with similar time and performance-based vesting conditions for 2024, except that 67% of these awards
were time-based, and 33% were performance-based.
Performance-based
RSUs provide the Named Executive Officer the right to receive an amount ranging from 0% to 200% of the target performance-based
RSUs granted based on the Company’s Comparative ROCE performance during the three-year performance period, subject to the
continued employment of the Named Executive Officer. For the years prior to 2024, Comparative ROCE is based on Adjusted ROCE,
which is equal to income before taxes and loss (gain) on remeasurement of liability under tax receivable agreements, plus interest
expense and stock-based compensation expense for the year divided by the simple average of capital (debt and equity) employed
at the beginning and end of each year presented. Beginning in 2024, the Adjusted ROCE calculation was changed to be equal to adjusted
pre-tax net income (adding back income tax and tax receivable agreement impacts, when applicable) for the year divided by the
simple average of capital (debt and equity) employed at the beginning and end of such year. After the end of the three-year performance
period, the Adjusted ROCE calculations of the Company and each entity in the ROCE Peer Group will be computed for each year and
then averaged for the entire three-year period. The entities in the ROCE Peer Group will be arranged (highest to lowest) by their
averaged Adjusted ROCE, excluding the Company. The Company’s percentile rank will be interpolated between the entity with
the next highest average Adjusted ROCE and the entity with the next lowest average Adjusted ROCE. The Company’s percentile
rank will then be used to determine the payout percentage of the target performance-based RSU by using the ROCE Ranking Matrix
set forth above. The chart below shows the Company’s Comparative ROCE rank for 2022, 2023, and 2024, resulting in an award
payout of 200% of target for the performance-based RSUs that were awarded to Named Executive Officers in January 2022 and vest
on April 1, 2025:
Year |
Company
Adjusted ROCE Percentage |
Ranking
of Company Adjusted ROCE against
ROCE
Peer Group |
| 2022 |
34.0% |
3
of 10 |
| 2023 |
42.9% |
1
of 10 |
| 2024 |
22.7% |
2
of 10 |
| 3-year
average |
33.2% |
1
of 10 |
Employment,
Severance and Change in Control Agreements
The
Company has entered into a change in control agreement with each of Mr. Elliott and Mr. Gosney (the “Change in Control
Agreements”). No such change of control agreements have been entered into with the Company’s other Named Executive
Officers, as the value of the vested equity interests in the Company that such officers acquired prior to the time of the IPO
would likely provide adequate benefits in the event of a change in control transaction.
Each
Change in Control Agreement provides severance benefits in the event the executive officer’s employment is terminated without
cause or the executive officer resigns for good reason within 18 months following a change in control, as described in more detail
below under “Potential Payments Upon Termination or Change in Control—Change in Control Agreements.”
The benefits provided to the executive officer in the Change in Control Agreements were primarily based on the recommendation
of the Compensation Consultant and Peer Group median data provided at the time the Change in Control Agreements were executed.
We
have not entered into any other employment, severance or change in control agreements with any of our Named Executive Officers.
Other
Compensation Elements
401(k)
Plan. We currently maintain a retirement plan intended to provide benefits under Section 401(k) of the Internal Revenue Code
of 1986, as amended (the “Code”) under which employees, including our Named Executive Officers, are allowed
to contribute portions of their base compensation to a tax-qualified retirement account under the Liberty Oilfield Services 401(k)
Savings Plan. We provide matching contributions at a rate of $1.00 for each $1.00 of employee contribution, subject to a cap of
the lower of (i) 6% of the employee’s salary and (ii) the applicable contribution limits under the Code.
Pension
and Nonqualified Deferred Compensation. We have not maintained, and do not currently maintain, a defined benefit pension plan
or nonqualified deferred compensation plan.
Perquisites
and Other Benefits. We provide limited perquisites to our Named Executive Officers. For example, none of our Named Executive
Officers receive car allowances.
Other
Compensation Policies
Anti-Hedging
and Pledging Policy. Our Insider Trading Policy (the “Insider Trading Policy”) generally prohibits our
directors, employees and officers from hedging and pledging of Company securities by providing that hedging or monetization transactions,
whether direct or indirect, involving the Company’s securities and the pledging of Company securities as collateral are
prohibited. Short term exceptions to this prohibition (such as temporary margin loans) may be granted depending on specific facts
and circumstances. Any exceptions to the Insider Trading Policy for our directors and officers must be granted by our Audit Committee
and will be periodically communicated to the Board. The Insider Trading Policy also prohibits transactions involving Company-based
derivative securities. While the Company is not subject to the Insider Trading Policy, the Company does not trade in its securities
when it is in possession of material nonpublic information except as may be pursuant to an appropriately adopted Rule 10b5-1 trading
plan.
Policies
and practices related to the grant of certain equity awards close in time to the release of material nonpublic information.
The Company does not currently grant stock options, stock appreciation rights, or similar option-like instruments. Accordingly,
the Company has no specific policy or practice on the timing of such awards in relation to the disclosure of material non-public
information by the Company. If in the future the Company determines to grant options, stock appreciation rights, or similar option-like
instruments, the Company intends to establish policies or practices regarding the timing of such awards in relation to the disclosure
of material non-public information, and the Board will evaluate the appropriate steps to take in relation to the foregoing.
Stock
Ownership Guidelines. We have implemented stock ownership guidelines for our executive officers and our directors who receive
compensation from us for Board service to foster equity ownership and align interests with our stockholders. Within five years
of the later of (a) the date of becoming an executive officer and (b) October 18, 2022, our Chief Executive Officer is expected
to own a number of shares with a value equal to six times of his base salary and all other executive officers are expected to
own a number of shares with a value equal to two times their base salary. Similarly, within five years of the later of (a) the
date a compensated director commences service with the Company in such position and (b) October 18, 2022, our compensated directors
are expected to own a number of shares with a value equal to five times their annual Board cash retainer. Shares that are owned
directly, indirectly (such as through a 401(k) plan or family trust) and shares issuable upon settlement of restricted stock units
(including the target number of shares to be issued under performance-based units) count towards meeting these ownership requirements.
In the event that an executive officer or compensated director fails to comply with these ownership guidelines following the end
of the applicable transition period and subject to certain exceptions, they are expected to retain not less than 50% of the number
of shares issued to him or her under our LTIP or similar future equity compensation plans, net of the number of shares applied
to the payment of taxes on such awards. Each of our executive officers and compensated directors was within the transition period
provided for in the stock ownership guidelines as of the Record Date; however as of the Record Date all of our executive officers
and directors, with the exception of Mr. Murti who was recently appointed to the Board in January 2025, were in compliance with
these guidelines even without the benefit of the transition period.
Risk
Assessment
The
Compensation Committee reviewed our employee compensation practices and policies and determined that such policies do not encourage
excessive or unnecessary risk-taking and are not likely to have a material adverse effect on the Company. Furthermore, the Board
and Compensation Committee recently adopted our compensation recovery policy to further enhance integrity and accountability in
relation to the Company’s compensation philosophy.
COMPENSATION
COMMITTEE REPORT
The
information contained in this Compensation Committee Report shall not be deemed to be “soliciting material” or to
be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the
Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except to the extent that the
Company specifically incorporates such information by reference in such filing.
The
Compensation Committee reviewed and discussed the Compensation Discussion & Analysis required by Item 402 of Regulation S-K
promulgated by the SEC with management of the Company, and, based on such review and discussions, the Compensation Committee recommended
to the Board that such Compensation Discussion & Analysis be included in this Proxy Statement and incorporated by reference
into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
| | Compensation
Committee of the Board of Directors: |
| | | |
| | | Peter
A. Dea (Chair) |
| | | Ken
Babcock |
| | | James
R. McDonald |
| | | Cary
D. Steinbeck |
EXECUTIVE COMPENSATION TABLES
Summary Compensation Table
The following table
summarizes the compensation awarded to, earned by or paid to our Principal Executive Officer (“PEO”), Principal Financial
Officer, and other Named Executive Officers for the fiscal years ended December 31, 2024, 2023, 2022.
| Name & Principal Position |
Year |
Salary(7)
($) |
Bonus
($)(1) |
Stock
Awards
($)(2) |
Non-Equity
Incentive Plan
Compensation
($)(1) |
All
Other
Compensation
($)(3) |
Total
($) |
Christopher A. Wright
Chairman of the Board &
Chief Executive Officer(4) |
2024 |
696,039 |
214,000 |
3,832,639 |
1,070,803 |
23,008 |
5,836,488 |
| 2023 |
638,231 |
300,000 |
3,590,569 |
1,078,500 |
20,800 |
5,628,100 |
| 2022 |
612,000 |
360,000 |
3,406,258 |
1,350,927 |
18,300 |
5,747,485 |
Michael Stock
Chief Financial Officer & Treasurer |
2024 |
463,038 |
124,200 |
1,718,213 |
621,466 |
22,486 |
2,949,403 |
| 2023 |
424,923 |
174,000 |
1,609,575 |
625,530 |
20,800 |
2,854,828 |
| 2022 |
408,000 |
200,000 |
1,526,949 |
750,515 |
18,300 |
2,903,764 |
Ron Gusek
President(5) |
2024 |
512,423 |
134,800 |
1,718,213 |
674,506 |
22,597 |
3,062,538 |
| 2023 |
469,462 |
189,000 |
1,609,575 |
679,455 |
20,800 |
2,968,292 |
| 2022 |
443,538 |
220,000 |
1,526,949 |
825,567 |
18,300 |
3,034,354 |
R. Sean Elliott
Chief Legal Officer & Corporate Secretary |
2024 |
454,731 |
96,400 |
1,063,656 |
482,362 |
22,468 |
2,119,616 |
| 2023 |
416,923 |
135,000 |
996,456 |
485,325 |
20,800 |
2,054,504 |
| 2022 |
394,954 |
150,000 |
945,531 |
562,886 |
18,300 |
2,071,671 |
Ryan T. Gosney
Chief Accounting Officer(6) |
2024 |
341,269 |
77,000 |
689,492 |
385,289 |
22,214 |
1,515,264 |
| 2023 |
312,692 |
105,000 |
619,062 |
377,475 |
20,800 |
1,435,029 |
| 2022 |
296,215 |
120,000 |
587,291 |
450,309 |
5,891 |
1,459,706 |
| (1) | The amounts reported in the “Non-Equity Incentive
Plan Compensation” column reflect the portion of the annual incentive payouts related to achievement of the Company-wide
performance metrics. The portion of the annual incentive payouts related to the discretionary component are reported in the “Bonus”
column. |
| (2) | The amounts shown do not reflect compensation actually
received by the Named Executive Officer. Rather, amounts set forth in the “Stock Awards” column represent the aggregate
grant date fair value of time-based and performance-based restricted stock unit awards computed in accordance with FASB ASC Topic
718 for financial statement reporting purposes by the Company with respect to restricted stock units. A discussion of the assumptions
used in this valuation with respect to awards made in fiscal year 2024 may be found in Note 10 to the Company’s financial
statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Performance-based
awards are included based on the assumption that they will vest at 100% of the target award, since actual vesting will not be
determined until the end of the performance period. |
| (3) | For the Named Executive Officers, amounts reported in the
“All Other Compensation” column for 2024 reflect discretionary matching contributions earned by each Named Executive
Officer pursuant to the Company’s 401(k) plan. Additionally, this column includes a $750 holiday bonus that was paid in
an equal amount to all Company employees. |
| (4) | Mr. Wright resigned as Chairman of the Board and Chief
Executive Officer effective February 3, 2025 in connection with his confirmation as Secretary of the United States Department
of Energy as previously disclosed in the Company’s Current Report on Form 8-K filed on November 19, 2024. |
| (5) | Mr. Gusek was appointed Chief Executive Officer effective
February 3, 2025 in connection with the resignation of Mr. Wright as described in the above footnote. |
| (6) | Mr. Gosney was additionally appointed Vice President of
Finance effective January 22, 2025. |
| (7) | Salary for 2024 reflects an additional pay period during
the year due to the timing of the bi-weekly payroll calendar. |
Grants of Plan-Based Awards
The following table
provides information for each of our Named Executive Officers regarding plan-based awards granted during fiscal year 2024.
| | |
| |
Estimated Future Payouts Under Non- Equity Incentive Plan Awards(1) | | |
Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | |
All Other Stock Awards: Number of Shares of Stock or | | |
Grant Date Fair Value of Stock | |
| Name | |
Grant Date | |
Threshold
($) | | |
Target
($) | | |
Maximum
($) | | |
Threshold
(#) | | |
Target
(#) | | |
Maximum
(#) | | |
Units
(#)(3) | | |
Awards
($)(4) | |
| Christopher A. Wright | |
| |
| 428,000 | | |
| 856,000 | | |
| 1,712,000 | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
1/22/2024 | |
| | | |
| | | |
| | | |
| 55,321 | | |
| 110,642 | | |
| 221,284 | | |
| | | |
| 1,916,319 | |
| | |
1/22/2024 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 110,642 | | |
| 1,916,319 | |
| Michael Stock | |
| |
| 248,400 | | |
| 496,800 | | |
| 993,600 | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
1/22/2024 | |
| | | |
| | | |
| | | |
| 24,801 | | |
| 49,602 | | |
| 99,204 | | |
| | | |
| 859,107 | |
| | |
1/22/2024 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 49,602 | | |
| 859,107 | |
| Ron Gusek | |
| |
| 269,600 | | |
| 539,200 | | |
| 1,078,400 | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
1/22/2024 | |
| | | |
| | | |
| | | |
| 24,801 | | |
| 49,602 | | |
| 99,204 | | |
| | | |
| 859,107 | |
| | |
1/22/2024 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 49,602 | | |
| 859,107 | |
| R. Sean Elliott | |
| |
| 192,800 | | |
| 385,600 | | |
| 771,200 | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
1/22/2024 | |
| | | |
| | | |
| | | |
| 10,133 | | |
| 20,266 | | |
| 40,532 | | |
| | | |
| 351,007 | |
| | |
1/22/2024 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 41,146 | | |
| 712,649 | |
| Ryan T. Gosney | |
| |
| 154,000 | | |
| 308,000 | | |
| 616,000 | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
1/22/2024 | |
| | | |
| | | |
| | | |
| 6,569 | | |
| 13,137 | | |
| 26,274 | | |
| | | |
| 227,533 | |
| | |
1/22/2024 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 26,672 | | |
| 461,959 | |
| (1) | The amounts shown in these columns reflect the potential
threshold, target and maximum payouts with respect to the performance-based financial metrics approved under the 2024 annual incentive
awards. The amounts reflected herein do not include amounts that may be earned with respect to the discretionary component of
the 2024 annual incentive awards. |
| (2) | The amounts shown in these columns reflect the potential
threshold, target and maximum number of performance-based RSU awards granted to the Named Executive Officers during fiscal year
2024. |
| (3) | The amounts shown in this column reflect time-based vesting
RSU awards granted to the Named Executive Officers during fiscal year 2024. |
| (4) | The amounts shown in this column do not reflect compensation
actually received by the Named Executive Officer. Rather, amounts set forth herein represent the aggregate grant date fair value
of time-based and performance-based RSUs computed in accordance with FASB ASC Topic 718 for financial statement reporting purposes
in fiscal year 2024 by the Company. A discussion of the assumptions used in this valuation with respect to awards made in fiscal
year 2024 may be found in Note 10 to the Company’s financial statements contained in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2024. |
Outstanding Equity Awards at Fiscal
Year-End
The following table
reflects information regarding outstanding equity-based awards held by our Named Executive Officers as of December 31, 2024, which
consist of time-based RSU awards and performance-based RSU awards.
| | |
Stock Awards | |
| Name | |
Number of Shares or Units of Stock That Have Not Vested (#) | | |
Market
Value of Shares or Units of Stock That Have Not Vested ($)(4) | | |
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 ($)(8) | |
| Christopher A. Wright(9) | |
| 45,857 | (1) | |
| 912,096 | | |
| | | |
| | |
| | |
| 76,526 | (2) | |
| 1,522,102 | | |
| | | |
| | |
| | |
| 110,642 | (3) | |
| 2,200,669 | | |
| | | |
| | |
| | |
| | | |
| | | |
| 275,142 | (5) | |
| 5,472,574 | |
| | |
| | | |
| | | |
| 229,576 | (6) | |
| 4,566,267 | |
| | |
| | | |
| | | |
| 221,284 | (7) | |
| 4,401,339 | |
| Michael Stock | |
| 20,557 | (1) | |
| 408,879 | | |
| | | |
| | |
| | |
| 34,305 | (2) | |
| 682,326 | | |
| | | |
| | |
| | |
| 49,602 | (3) | |
| 986,584 | | |
| | | |
| | |
| | |
| | | |
| | | |
| 123,340 | (5) | |
| 2,453,233 | |
| | |
| | | |
| | | |
| 102,914 | (6) | |
| 2,046,959 | |
| | |
| | | |
| | | |
| 99,204 | (7) | |
| 1,973,168 | |
| Ron Gusek | |
| 20,557 | (1) | |
| 408,879 | | |
| | | |
| | |
| | |
| 34,305 | (2) | |
| 682,326 | | |
| | | |
| | |
| | |
| 49,602 | (3) | |
| 986,584 | | |
| | | |
| | |
| | |
| | | |
| | | |
| 123,340 | (5) | |
| 2,453,233 | |
| | |
| | | |
| | | |
| 102,914 | (6) | |
| 2,046,959 | |
| | |
| | | |
| | | |
| 99,204 | (7) | |
| 1,973,168 | |
| R. Sean Elliott | |
| 17,058 | (1) | |
| 339,284 | | |
| | | |
| | |
| | |
| 28,458 | (2) | |
| 566,030 | | |
| | | |
| | |
| | |
| 41,146 | (3) | |
| 818,394 | | |
| | | |
| | |
| | |
| | | |
| | | |
| 50,408 | (5) | |
| 1,002,615 | |
| | |
| | | |
| | | |
| 42,050 | (6) | |
| 836,375 | |
| | |
| | | |
| | | |
| 40,532 | (7) | |
| 806,181 | |
| Ryan T. Gosney | |
| 10,595 | (1) | |
| 210,735 | | |
| | | |
| | |
| | |
| 17,680 | (2) | |
| 351,655 | | |
| | | |
| | |
| | |
| 26,672 | (3) | |
| 530,506 | | |
| | | |
| | |
| | |
| | | |
| | | |
| 31,310 | (5) | |
| 622,756 | |
| | |
| | | |
| | | |
| 26,124 | (6) | |
| 519,606 | |
| | |
| | | |
| | | |
| 26,274 | (7) | |
| 522,590 | |
| (1) | These RSUs granted on January 18, 2022 vest on April 1,
2025, so long as the applicable Named Executive Officer remains employed through such date. |
| (2) | These RSUs granted on February 8, 2023 vest in one-half
increments on each of April 1, 2025 and April 1, 2026, so long as the applicable Named Executive Officer remains employed through
such dates. |
| (3) | These RSUs granted on January 22, 2024 vest in one-third
increments on each of April 1, 2025, April 1, 2026 and April 1, 2027, so long as the applicable Named Executive Officer remains
employed through such dates. |
| (4) | Amounts in this column reflect the value of unvested time-based
RSU awards held by the Named Executive Officers, calculated based on the closing price of our Class A Common Stock on December
31, 2024 of $19.89. |
| (5) | These performance-based RSUs granted on January 18, 2022
will vest on April 1, 2025, subject to achievement of the Comparative ROCE performance metrics and the applicable Named Executive
Officer’s continued employment through such date. As of December 31, 2024, the performance-based RSUs granted on January
18, 2022 were trending above target, and in accordance with the SEC rules, are reflected in this table at maximum, therefore,
the performance-based RSUs may actually vest at a lower amount than reflected in this column. |
| (6) | These performance-based RSUs granted on February 8, 2023
will vest on April 1, 2026, subject to achievement of the Comparative ROCE performance metrics and the applicable Named Executive
Officer’s continued employment through such date. As of December 31, 2024, the performance-based RSUs granted on February
8, 2023 were trending above target, and in accordance with the SEC rules, are reflected in this table at maximum, therefore, the
performance-based RSUs may actually vest at a lower amount than reflected in this column. |
| (7) | These performance-based RSUs granted on January 22, 2024
will vest on April 1, 2027, subject to achievement of the Comparative ROCE performance metrics and the applicable Named Executive
Officer’s continued employment through such date. As of December 31, 2024, the performance-based RSUs granted on January
22, 2024 were trending above target, and in accordance with the SEC rules, are reflected in this table at maximum, therefore,
the performance-based RSUs may actually vest at a lower amount than reflected in this column. |
| (8) | Amounts in this column reflect the value of unvested performance-based
RSU awards held by the Named Executive Officers reported in the preceding column calculated based on the closing price of our
Class A Common Stock on December 31, 2024 of $19.89. |
| (9) | Mr. Wright resigned as Chairman of the Board and Chief
Executive Officer effective February 3, 2025 in connection with his confirmation as Secretary of the United States Department
of Energy as previously disclosed in the Company’s Current Report on Form 8-K filed on November 19, 2024. Also effective
February 3, 2025, all unvested equity awards previously awarded to Mr. Wright became vested pursuant to our Compensation Committee’s
authorization as previously disclosed in our Current Report on Form 8-K filed on January 22, 2025. |
Option Exercises and Stock Vested
The following
table reflects the value received by each Named Executive Officer on the vesting of time-based and performance-based RSUs during
fiscal year 2024, which performance-based RSUs vested at approximately 178% of target. None of our Named Executive Officers held
stock option awards during fiscal year 2024.
| |
|
Stock Awards |
|
| Name | |
Number of Shares Acquired on Vesting
(#) | | |
Value Realized
on Vesting
($)(1) | |
| Christopher A. Wright | |
| 393,513 | | |
| 8,251,968 | |
| Michael Stock | |
| 175,217 | | |
| 3,674,299 | |
| Ron Gusek | |
| 175,217 | | |
| 3,674,299 | |
| R. Sean Elliott | |
| 181,128 | | |
| 3,798,261 | |
| Ryan T. Gosney | |
| 111,382 | | |
| 2,335,681 | |
| (1) | The amounts in this column reflect the value of the shares
in the preceding column based on the closing price of our Class A Common Stock of $20.97 on April 1, 2024, the applicable vesting
date, including the value of any shares withheld for tax withholding purposes. |
Pension Benefits and Nonqualified
Deferred Compensation
We do not maintain
and our Named Executive Officers do not participate in any defined benefit pension plan or nonqualified deferred compensation plan.
Potential Payments Upon Termination
or Change in Control
Change in Control Agreements
The Company
has entered into Change in Control Agreements with each of Mr. Elliott and Mr. Gosney. For further detail on the Company’s
decision to enter into Change in Control Agreements with these Named Executive Officers, see the section titled “Employment,
Severance and Change in Control Agreements” contained in the Compensation Discussion & Analysis section set forth
herein. Each Change in Control Agreement provides that if the Named Executive Officer’s employment is terminated without
“cause” or the Named Executive Officer resigns for “good reason” within 18 months following a “change
in control,” the Named Executive Officer will be entitled to receive, subject to such Named Executive Officer’s timely
execution and non-revocation of a release of claims in favor of the Company: (i) two times the sum of (a) the Named Executive Officer’s
annualized base salary for the year in which the termination occurs (or, if greater, that in effect immediately preceding the change
in control) plus (b) an amount equal to the higher of (1) the Named Executive Officer’s target annual bonus for year in which
the termination occurs or (2) the average of the Named Executive Officer’s target annual bonus for the three most recently
completed calendar years; (ii) a pro-rated portion of the Named Executive Officer’s target annual bonus for the calendar
year in which the termination occurs; (iii) reimbursement for a portion of the COBRA premiums paid by the executive for continued
coverage under the Company’s group health plans for up to 18 months plus a lump sum cash payment equal to six times such
monthly amount; and (iv) vesting of all outstanding time-based and performance-based equity awards granted pursuant to any Company
long term incentive plan as of the date of termination, with such performance-based equity awards being vested at the higher of
target performance or actual performance through the termination date.
For
purposes of the Change in Control Agreements, the following terms generally have the meanings set forth below:
| * | “Cause” generally means
the Named Executive Officer’s (i) material breach of the Change in Control Agreement or any other agreement with the Company,
(ii) material breach of any policy or code of conduct, (iii) violation of any law applicable to the workplace or employment relationship
that is materially injurious to the Company, (iv) gross negligence, willful misconduct or willful breach of fiduciary duty, fraud,
theft or embezzlement, (v) conviction or indictment, or plea of nolo contendere, to any felony or conviction or plea of nolo contendere
to any crime involving moral turpitude, or (vi) willful failure or refusal to substantially perform such Named Executive Officer’s
obligations or to follow in any material respect any specific lawful direction from the Company. Clauses (i), (ii), (iii) and (vi)
are subject to certain notice and cure rights. |
| * | “Change in Control” generally
means (i) a change in the ownership of the Company, (ii) a change in the effective control of the Company, or (iii) a change in
the ownership of a substantial portion of the Company’s assets, in each case, as such phrases are defined under the Treasury
regulations promulgated pursuant to Section 409A of the Code. |
| * | “Good Reason” generally
means (i) a material diminution in the Named Executive Officer’s total cash compensation, (ii) a material diminution in the
Named Executive Officer’s authority, duties or responsibilities as a whole, (iii) a geographic relocation by more than 50
miles, (iv) a material breach by the Company of the Change in Control Agreement or any other agreement between the Named Executive
Officer and the Company, or (v) a failure to timely pay or provide any material payment, benefit or other consideration or compensation
owed to the Named Executive Officer, in each case, subject to certain notice and cure rights. |
RSU Awards
The RSUs held
by our Named Executive Officers under the LTIP will accelerate and become 100% vested upon a termination of the Named Executive
Officer’s employment with the Company due to the Named Executive Officer’s death or “disability.” For RSUs
that use performance-based vesting, the award will remain outstanding and eligible to be earned based on the Company’s achievement
of the applicable performance metrics at the end of the performance period. For purposes of the RSU awards, “disability”
means the Named Executive Officer’s inability to perform his duties, after accounting for reasonable accommodation, due to
a mental or physical impairment that continues (or can reasonably be expected to continue) for (i) 90 consecutive days or (ii)
180 days out of any 365-day period, which, in either case, shall only be deemed to occur following the written determination by
the Company of any such occurrence of disability.
The table below
describes and estimates the amounts and benefits each Named Executive Officer would have been eligible to receive upon a termination
of his employment in certain circumstances or a change in control, assuming such events occurred as of December 31, 2024, the last
day of fiscal year 2024. The estimated payments are not necessarily indicative of the actual amounts such executive would have
received in such circumstances, as such amounts could not be known with certainty until the applicable event occurred. The table
excludes compensation amounts accrued through December 31, 2024 that would be paid in the normal course of continued employment,
such as accrued but unpaid salary and vested account balances under our retirement plans that are generally available to all of
our salaried employees. Where applicable, the information in the table uses a price per share for our Common Stock of $19.89, the
closing price on December 31, 2024 (the “Year-End Closing Price”). Generally, payment of severance benefits
to a Named Executive Officer following termination of employment is subject to such officer’s timely execution and non-revocation
of a release of claims in favor of the Company.
| Name | |
Change in
Control ($) | | |
Death/
Disability ($) | | |
Termination without Cause or Resignation for Good Reason on or within 18 Months Following a Change in Control ($) | |
| Christopher A. Wright | |
| | | |
| | | |
| | |
| Equity Award Acceleration(1)(4) | |
| — | | |
| 19,075,047 | | |
| — | |
| Michael Stock | |
| | | |
| | | |
| | |
| Equity Award Acceleration(1) | |
| — | | |
| 8,551,149 | | |
| — | |
| Ron Gusek | |
| | | |
| | | |
| | |
| Equity Award Acceleration(1) | |
| — | | |
| 8,551,149 | | |
| — | |
| R. Sean Elliott | |
| | | |
| | | |
| | |
| Cash Severance(2) | |
| — | | |
| — | | |
| 2,328,000 | |
| Benefit Continuation(3) | |
| — | | |
| — | | |
| 27,141 | |
| Equity Award Acceleration(1) | |
| — | | |
| 4,368,879 | | |
| 4,368,879 | |
| Ryan Gosney | |
| | | |
| | | |
| | |
| Cash Severance(2) | |
| — | | |
| — | | |
| 1,817,000 | |
| Benefit Continuation(3) | |
| — | | |
| — | | |
| 27,188 | |
| Equity Award Acceleration(1) | |
| — | | |
| 2,757,848 | | |
| 2,757,848 | |
| (1) | The amounts reported in these rows reflect the value
of time-based RSU and performance-based RSU awards that would accelerate in connection with the applicable event, calculated based
on the Year-End Closing Price. For purposes of the performance-based RSUs granted in 2022, 2023 and 2024 these amounts reflect
an assumed achievement of maximum performance, as the performance-based RSUs were trending above target as of December 31, 2024. |
| (2) | The amounts reported in these rows reflect the full amount
of each Named Executive Officer’s target annual incentive award for 2024, as the pro-ration provided for under the Change
in Control Agreements would result in the full amount of such target annual incentive awards being payable as of December 31,
2024 |
| (3) | The amounts reported in these rows are calculated based
on the premiums in effect as of December 2024, which are assumed for purposes of this table to remain the same throughout the
applicable benefit reimbursement period. |
| (4) | Mr. Wright resigned as Chairman of the Board and Chief
Executive Officer effective February 3, 2025 in connection with his confirmation as Secretary of the United States Department
of Energy as previously disclosed in the Company’s Current Report on Form 8-K filed on November 19, 2024. Also effective
February 3, 2025, all unvested equity awards previously awarded to Mr. Wright became vested pursuant to our Compensation Committee’s
authorization as previously disclosed in our Current Report on Form 8-K filed on January 22, 2025. |
DIRECTOR
COMPENSATION
We have adopted
a non-employee director compensation program that is applicable to each of our non-employee directors. The Compensation Consultant
also conducted an analysis of market-competitive total director compensation (annual retainers, meeting fees and equity awards)
using our Peer Group as a comparative metric. Pursuant to this program, during 2024 each non-employee director was entitled to
receive the following compensation for their service on our Board:
| * | A cash retainer of $100,000 per year, payable quarterly in arrears; |
| * | An additional annual cash retainer of $10,000 for
serving as a member of our Audit Committee or $20,000 for serving as the chairperson of our Audit Committee, in each case payable
quarterly in arrears; |
| * | An additional annual cash retainer of $7,500 for
serving as a member of our Compensation Committee or $15,000 for serving as the chairperson of our Compensation Committee, in each
case payable quarterly in arrears; |
| * | An additional cash retainer of $5,000 for serving
as a member of our Nominating and Governance Committee or $10,000 for serving as the chairperson of our Nominating and Governance
Committee, in each case payable quarterly in arrears; |
| * | An additional annual cash retainer of $20,000 for
serving as the Lead Director of the Company, payable quarterly in arrears; and |
| (a) | annual equity-based compensation in the form of RSUs with an aggregate grant
date value of $175,000, subject to the terms of the LTIP and the award agreement pursuant to which such award is granted. The award
shall be subject to a 12-month vesting period, unless otherwise determined by the Board. The annual grant is automatically made
on January 2nd of each year, using the 30-day average closing price of the Company’s Class A Common Stock prior to the date
of grant to determine the number of units to be granted; |
| (b) | an additional cash payment of $100,000 per year, payable quarterly in arrears; or |
| (c) | a charitable cash donation by the Company of $100,000 per year, payable
quarterly in arrears, to an organization designated by the director and that is qualified under Section 501(c)(3) of the Internal
Revenue Code, provided that the organization must be independent of the director and reasonably acceptable to the Compensation
Committee. |
Effective
as of January 1, 2025, our non-employee director compensation program was updated to add compensation for serving as the non-executive
Chairman consisting of an annual cash retainer of $60,000 and RSUs with a grant date value of $75,000 on the same terms and conditions
set forth in paragraph (a) above. These changes were made by the Compensation Committee and ratified by the Board in January 2025
in response to a recommendation from the Compensation Consultant to align with marketplace practices where the chairperson of the
board is independent and not also an employee of the company.
Each non-employee
director is given an opportunity to elect whether they would like to receive item (a), (b) or (c) above prior to the beginning
of each year. If a non-employee director joins the Board or otherwise becomes eligible for director compensation during the course
of a calendar year, the director will be allowed to make such election upon joining or becoming eligible. If a non-employee director
joins the Board during the course of a calendar year, the director will be entitled to receive a prorated RSU award (if so elected)
for that year, which shall vest over the remaining portion of the year, unless otherwise determined by the Board. All annual cash
payments, including the charitable cash contribution option if elected, shall be prorated for partial years of service or eligibility.
In addition,
each non-employee director is reimbursed for out-of-pocket expenses incurred in connection with attending Board and committee meetings.
The table below sets
forth the compensation our non-employee directors earned for their service for the fiscal year ended December 31, 2024.
| Name | |
Fees Earned or Paid in Cash ($) | | |
Stock
Awards ($)(1) | | |
All Other Compensation ($) | | |
Total ($) | |
| Simon Ayat | |
| 110,000 | | |
| 168,688 | | |
| — | | |
| 278,688 | |
| Ken Babcock | |
| 107,500 | | |
| 168,688 | | |
| — | | |
| 276,188 | |
| Peter A. Dea | |
| 120,000 | | |
| 168,688 | | |
| — | | |
| 288,688 | |
| William F. Kimble | |
| 145,000 | | |
| 168,688 | | |
| — | | |
| 313,688 | |
| James R. McDonald | |
| — | | |
| — | | |
| 100,000 | (2) | |
| 100,000 | (2) |
| Gale A. Norton | |
| 120,000 | | |
| 168,688 | | |
| — | | |
| 288,688 | |
| Audrey Robertson | |
| 100,000 | | |
| 168,688 | | |
| — | | |
| 268,688 | |
| Cary D. Steinbeck | |
| 117,500 | | |
| 168,688 | | |
| — | | |
| 286,188 | |
| (1) | The amounts shown do not reflect compensation actually
received by the directors. Rather, amounts set forth in the Stock Awards column represent the aggregate grant date fair value
of awards computed in accordance with FASB ASC Topic 718 for financial statement reporting purposes in fiscal year 2024 by the
Company with respect to restricted stock units. A discussion of the assumptions used in this valuation with respect to awards
made in fiscal year 2024 may be found in Note 10 to the Company’s financial statements contained in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2024. As of December 31, 2024, Messrs. Ayat, Babcock, Dea, Kimble and
Steinbeck and Ms. Norton and Ms. Robertson each held 9,289 unvested RSUs. |
| (2) | The Company has agreed to make up to $100,000 in charitable
donations to organizations designated by Mr. McDonald in connection with his 2024 Board service. As of February 19, 2025, no donations
have been designated and therefore no payments have been made by us. |
EQUITY COMPENSATION
PLAN INFORMATION
The following
table sets forth information about our Class A Common Stock that may be issued under the LTIP as of December 31, 2024:
| Plan Category | |
Number of defined securities to be issued upon exercise of outstanding options, warrants and rights (a) | | |
Weighted–average
exercise price of outstanding options, warrants and rights (b)(2) | | |
Number of securities
remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(c)(3) | |
| | |
December 31, 2024(1) | | |
| | |
December 31, 2024 | | |
| | |
December 31, 2024 | | |
| |
| Equity compensation plans approved by security holders | |
| 5,152,286 | | |
| | | |
| — | | |
| | | |
| 10,411,081 | | |
| | |
| Equity compensation plans not approved by security holders | |
| — | | |
| | | |
| — | | |
| | | |
| — | | |
| | |
| Total | |
| 5,152,286 | | |
| | | |
| — | | |
| | | |
| 10,411,081 | | |
| | |
| (1) | This column reflects shares of our Class A Common Stock
subject to RSU awards granted under the LTIP outstanding and unvested as of the December 31, 2024. The performance-based RSUs
granted under the LTIP are reflected based on an achievement of maximum performance. No stock options or warrants have been granted
under the LTIP. |
| (2) | No stock options have been granted under the LTIP, and
the RSU awards reflected in column (a) are not reflected in this column as they do not have an exercise price. |
| (3) | This column reflects the total number of shares of Class
A Common Stock remaining available for issuance under the LTIP. |
Our only equity
compensation plan is the LTIP. The LTIP was approved by our stockholders at the 2024 annual meeting. Please read Note 10 to the
Company’s financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31,
2024 for a description of our equity compensation plan. In addition, a detailed description of the terms of the LTIP is available
in our Definitive Proxy Statement on Schedule 14A filed on March 7, 2024 under the discussion of Proposal 4 therein.
CEO PAY RATIO
As required
by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing
the following information about the relationship of the annual total compensation of our employees and the annual total compensation
of Christopher A. Wright, our former Chief Executive Officer (our “CEO”).
For 2024, our last
completed fiscal year:
| * | The total compensation of our median employee was
$128,549 calculated using the same methodology used to determine pay for our CEO in the Summary Compensation Table included above;
and |
| * | The total compensation of our CEO, as reported in the Summary Compensation
Table included above, was $5,836,488. |
| * | Based on this information, for 2024 the ratio of
the total compensation of our CEO to the median employee total compensation was reasonably estimated to be 45 to 1. |
The pay ratio
set forth above is a reasonable estimate calculated in a manner consistent with SEC rules based on our human resources systems
of record and the methodology described below. Because the SEC rules for identifying the median employee and calculating the pay
ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain
exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported
by other companies may not be comparable to the pay ratio that we report above, as other companies may have different employment
and compensation practices, different types of workforce, and operate in different countries, and may use different methodologies,
exclusions, estimates and assumptions in calculating their own pay ratios. To identity the median of the annual total compensation
of all our employees, as well as to determine the annual total compensation of our median employee and our CEO, we took the following
steps:
| ✓ | We determined that, as of December 21, 2024,
our employee population excluding our CEO consisted of approximately 5,700 individuals with all of these individuals located in
the United States and Canada. This population consisted of our full-time, part-time and temporary employees who received Company
benefits, as we do not have seasonal workers. We selected December 21, 2024 as our identification date for determining our median
employee because it enabled us to make such identification in a reasonably efficient and economic manner, as this is the date of
the last period worked during the year for which payment was made to employees in 2024. |
| ✓ | We used a consistently applied compensation
measure to identify our median employee by comparing the amount of compensation as reported to the Internal Revenue Service on
Form W-2 for 2024 for US employees and the amount of compensation as reported to the Canadian Revenue Agency on T4 Statement of
Renumeration Paid for 2024 for Canadian employees. |
| ✓ | We identified our median employee by consistently
applying this compensation measure to all of our employees included in our analysis. Since all of our employees, including our
CEO, are located in the United States and Canada, we did not make any cost of living adjustments in identifying the median employee.
Our median employee for 2024 was a fulltime, salaried employee working as an equipment operator with annual compensation of $112,897
set forth on such employee’s Form W-2 for 2024. |
| ✓ | After we identified our median employee, we
combined all of the elements of such employee’s compensation for the 2024 year in accordance with the requirements of Item
402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $128,549. The differences between such employee’s
taxable compensation reported on Form W-2 for 2024 of $112,897 and the employee’s annual total compensation calculated pursuant
to Regulation S-K include the following adjustments: (i) modification
from bonuses paid during 2024 to bonuses earned during 2024, if needed, (ii) addition of contributions made by the employee and
by the Company on the employee’s behalf to our 401(k) plan for 2024, if any, (iii) addition of the costs of tax deductible
employee group health plan premiums and employee contributions to tax deductible flexible spending accounts, if any and (iv) subtraction
of other taxable compensation including compensation for provided housing or transportation and that attributable to group term
life, short-term and long-term disability benefits, if applicable. |
| ✓ | With respect to the annual total compensation
of our CEO, we used the amount reported in the “Total” column of our 2024 Summary Compensation Table included in this
Proxy Statement and incorporated by reference under Item 11 of Part III of our Annual Report on Form 10-K for the year ended December
31, 2024. |
PAY VERSUS PERFORMANCE
Pay Versus Performance Table for
2024
| | | |
Summary Compensation | | |
Compensation | | |
Average Summary Compensation Table Total for | | |
Average Summary Compensation Actually Paid to | | |
Value of Initial Fixed $100 Investment Based On: | | |
Net Income (Loss) (in | | |
| |
| | | |
Table Total for | | |
Actually Paid to | | |
Non-PEO NEOs | | |
Non-PEO NEOs | | |
Company | | |
Peer Group | | |
Thousands) | | |
Adjusted | |
| Year | | |
PEO ($)(1) | | |
PEO ($)(2) | | |
($)(3) | | |
($)(4) | | |
TSR ($) | | |
TSR ($)(5) | | |
($)(6) | | |
ROCE(7) | |
| 2024 | | |
| 5,836,488 | | |
| 10,045,829 | | |
| 2,411,705 | | |
| 3,805,434 | | |
| 188.06 | | |
| 101.68 | | |
| 316,010 | | |
| 19.5 | % |
| 2023 | | |
| 5,628,100 | | |
| 9,819,996 | | |
| 2,328,163 | | |
| 3,919,083 | | |
| 169.06 | | |
| 115.11 | | |
| 556,317 | | |
| 42.9 | % |
| 2022 | | |
| 5,747,485 | | |
| 12,201,790 | | |
| 2,367,374 | | |
| 4,567,954 | | |
| 147.11 | | |
| 112.94 | | |
| 399,602 | | |
| 34.0 | % |
| 2021 | | |
| 4,611,372 | | |
| 3,946,524 | | |
| 2,028,596 | | |
| 1,738,700 | | |
| 88.85 | | |
| 69.94 | | |
| (179,244 | ) | |
| -10.3 | % |
| 2020 | | |
| 3,310,114 | | |
| 2,493,998 | | |
| 1,218,682 | | |
| 909,552 | | |
| 94.44 | | |
| 57.93 | | |
| (115,583 | ) | |
| -13.9 | % |
(1) The dollar amounts reported are the amounts of total compensation reported for Christopher A. Wright (our former Chairman and CEO) for each corresponding year in the “Total” column of the Summary Compensation Table provided above.
| (2) | The dollar amounts reported represent the amount of “compensation
actually paid” to Mr. Wright, as computed in accordance with Item 402(v) of SEC Regulation S-K. The dollar amounts reported
do not reflect the actual amount of compensation earned by or paid to Mr. Wright during the applicable year. In accordance with
the requirements of Item 402(v) of SEC Regulation S-K, the following adjustments were made to Mr. Wright’s total compensation
for each year to determine the compensation actually paid to Mr. Wright: |
| Year | | |
Reported Summary Compensation Table Total for PEO
($) | | |
Deduct Fair Value of Equity Awards Reported in Summary Compensation Table
($) | | |
Add Year-End Fair Value of Equity Awards Granted in Current Year
($) | | |
Add (Deduct) Change in Fair Value at Year End of Unvested Equity Awards Granted in Prior Years
($) | | |
Add (Deduct) Change in Fair Value of Equity Awards Vested in Current Year
($) | | |
Compensation Actually Paid to PEO
($) | |
| 2024 | | |
| 5,836,488 | | |
| (3,832,639 | ) | |
| 4,401,339 | | |
| 2,715,100 | | |
| 925,541 | | |
| 10,045,829 | |
| 2023 | | |
| 5,628,100 | | |
| (3,590,569 | ) | |
| 4,164,509 | | |
| 4,410,269 | | |
| (792,313 | ) | |
| 9,819,996 | |
| 2022 | | |
| 5,747,485 | | |
| (3,406,258 | ) | |
| 4,405,023 | | |
| 3,612,975 | | |
| 1,842,565 | | |
| 12,201,790 | |
| 2021 | | |
| 4,611,372 | | |
| (3,801,972 | ) | |
| 2,841,227 | | |
| 99,171 | | |
| 196,725 | | |
| 3,946,524 | |
| 2020 | | |
| 3,310,114 | | |
| (2,876,014 | ) | |
| 3,082,298 | | |
| (209,920 | ) | |
| (812,480 | ) | |
| 2,493,998 | |
(3) The dollar amounts reported represent the average of
the amounts reported for our NEOs as a group (excluding Mr. Wright) in the “Total” column of the Summary Compensation
Table provided above. The NEOs (excluding Mr. Wright) included for purposes of calculating the average amounts in each applicable
year are Messrs. Stock, Gusek, Elliott and Gosney.
| (4) | The dollar amounts reported represent the average amount
of “compensation actually paid” to the NEOs as a group (excluding Mr. Wright), as computed in accordance with Item
402(v) of SEC Regulation S-K. The NEOs (excluding Mr. Wright) included for purposes of calculating the average amounts in each
applicable year are Messrs. Stock, Gusek, Elliott and Gosney. The dollar amounts reported do not reflect the actual average amount
of compensation earned by or paid to the NEOs as a group (excluding Mr. Wright) during the applicable year. In accordance with
the requirements of Item 402(v) of SEC Regulation S-K, the following adjustments were made to average total compensation for the
NEOs as a group (excluding Mr. Wright) for each year to determine the compensation actually paid: |
| Year | | |
Reported Average Summary Compensation Table Total for Non-PEO NEOs
($) | | |
Deduct Fair Value of Equity Awards Reported in Summary Compensation Table
($) | | |
Add Year-End Fair Value of Equity Awards Granted in Current Year
($) | | |
Add (Deduct) Change in Fair Value at Year End of Unvested Equity Awards Granted in Prior Years
($) | | |
Add (Deduct) Change in Fair Value of Equity Awards Vested in Current Year
($) | | |
Average Compensation Actually Paid to Non-PEO NEOs
($) | |
| 2024 | | |
| 2,411,705 | | |
| (1,297,394 | ) | |
| 1,489,905 | | |
| 826,530 | | |
| 374,687 | | |
| 3,805,434 | |
| 2023 | | |
| 2,328,163 | | |
| (1,208,667 | ) | |
| 1,401,868 | | |
| 1,667,331 | | |
| (269,613 | ) | |
| 3,919,083 | |
| 2022 | | |
| 2,367,374 | | |
| (1,146,682 | ) | |
| 1,482,906 | | |
| 1,259,414 | | |
| 604,943 | | |
| 4,567,954 | |
| 2021 | | |
| 2,028,596 | | |
| (1,515,516 | ) | |
| 1,132,550 | | |
| 22,787 | | |
| 70,282 | | |
| 1,738,700 | |
| 2020 | | |
| 1,218,682 | | |
| (957,726 | ) | |
| 1,026,420 | | |
| (68,658 | ) | |
| (309,165 | ) | |
| 909,552 | |
| (5) | The peer group selected for each listed year consists
of the OSX. We also use this peer group for purposes of the Stock Performance Graph set forth in “Item 5 - Market for Registrant’s
Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” of our Annual Report on Form 10-K
for the year ended December 31, 2024. |
| (6) | The dollar amounts reported represent the amount of net
income (loss) (in thousands) attributable to Liberty Energy Inc. in our audited consolidated financial statements for the applicable
year |
| (7) | For the year ended December 31, 2024, Adjusted ROCE is
equal to the Company’s 2024 income before taxes and loss (gain) on remeasurement of liability under tax receivable agreements,
divided by the simple average of capital (debt and equity) employed at the beginning and end of the year. For the years ended
December 31, 2020 to 2023, Adjusted ROCE is equal to the Company’s income before taxes and loss (gain) on remeasurement
of liability under tax receivable agreements, plus interest expense and stock-based compensation expense for the year, divided
by the simple average of capital (debt and equity) employed at the beginning and end of each year presented. We rank our Adjusted
ROCE against those of the ROCE Peer Group to determine Comparative ROCE, which is used as a metric to determine a portion of annual
incentive compensation and the vesting of performance-based RSU awards. While we use numerous financial and non-financial performance
measures for the purpose of evaluating performance for our compensation programs, we have determined that our Adjusted ROCE is
the financial performance measure that, in our assessment, represents the most important performance measure (that is not otherwise
required to be disclosed in this table) used by us to link compensation actually paid to our NEOs for the most recently completed
fiscal year, to our performance. |
Performance
Measures
The most important
financial performance measures that we use to link executive compensation actually paid to the NEOs for the most recently completed
fiscal year to our performance are Adjusted Pre-tax EPS, Adjusted ROCE, and Comparative ROCE, which performance measures for the
most recently completed fiscal year are defined in the footnotes to the table in “Compensation Discussion and Analysis –
Elements of Compensation – Annual Incentive Award” above.
Analysis of
Information in Pay Versus Performance Table
As described
in more detail in “Compensation Discussion and Analysis” above, our executive compensation program includes variable
components in the form of annual incentive compensation and long-term incentive awards. While we utilize several performance measures
to align executive compensation with our performance, all of those measures are not presented in the “Pay Versus Performance
Table for 2024.” Moreover, we generally seek to incentivize long-term performance and, therefore, do not specifically align
our performance measures with compensation that is actually paid (as computed in accordance with SEC regulations) for a particular
year. In accordance with SEC regulations, we are providing the following descriptions of the relationships between information
presented in the “Pay Versus Performance Table for 2024.”
Compensation Actually Paid
and Cumulative TSR
As demonstrated
by the following graph, the amount of compensation actually paid to Mr. Wright and the average amount of compensation actually
paid to our NEOs as a group (excluding Mr. Wright) is generally aligned with our cumulative TSR over the three years presented
in the “Pay Versus Performance Table for 2024.” The alignment of compensation actually paid with our cumulative
TSR over the period presented is because a significant portion of the compensation actually paid to our NEOs is comprised of equity
awards.
For each of
the three years presented in the “Pay Versus Performance Table for 2024,” our cumulative TSR exceeded that of peers
contained in the OSX stock index. The following table details our cumulative TSR in comparison to the OSX cumulative TSR for each
of the measurement periods (determined in accordance with SEC regulations).
Compensation Actually Paid
and Net Income (Loss)
As demonstrated
by the following table, the amount of compensation actually paid to Mr. Wright and the average amount of compensation actually
paid to other NEOs as a group (excluding Mr. Wright) is generally aligned with our net income (loss) over the three years presented
in the “Pay Versus Performance Table for 2024.” While we do not use net income (loss) as a performance measure in the
overall executive compensation program, the measure of net income (loss) is correlated with the measures of Pre-Tax EPS and ROCE,
which we do use in setting goals for annual incentive compensation, and Comparative ROCE, which we use both in setting goals for
annual incentive compensation and the vesting of performance-based RSU awards.
Compensation Actually Paid
and Adjusted ROCE
As demonstrated
by the following table, the amount of compensation actually paid to Mr. Wright and the average amount of compensation actually
paid to our other NEOs as a group (excluding Mr. Wright) is generally aligned with our Adjusted ROCE over each of the three years
presented in the “Pay Versus Performance Table for 2024.”
PROPOSAL
2 — ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS
Section 14A(a)(1)
of the Exchange Act, which was added to the Exchange Act by Section 951 of the Dodd-Frank Act, affords the stockholders a vote
to approve, on a non-binding, advisory basis, the compensation of our Named Executive Officers for the fiscal year ended December
31, 2024 (commonly known as a “say-on-pay vote”). This vote is not intended to address any specific item of
compensation and is not a vote on our general compensation policies, compensation of the Board, or our compensation policies as
they relate to risk management. Section 14A(a)(2) of the Exchange Act requires us to hold a say-on-pay vote at least once every
three years, although the Company currently holds this vote annually.
As described
more fully in the “Compensation Discussion & Analysis” section of this Proxy Statement and the accompanying
tabular and narrative disclosures, the Company’s compensation policy is designed to attract and retain highly qualified executive
officers. The Company’s compensation program seeks to align executive compensation with stockholder value on an annual and
long-term basis through a combination of base pay, annual incentives, and certain long-term incentives. Please read the Compensation
Discussion & Analysis section of this Proxy Statement for additional details on our executive compensation program.
The Board strongly
endorses the Company’s executive compensation program and recommends that the stockholders approve on an advisory, non-binding
basis, the following resolution:
RESOLVED,
that the stockholders approve, on an advisory basis, the compensation of the Company’s Named Executive Officers as described
in the proxy statement, including the Compensation Discussion & Analysis, and the compensation tables and related narrative
disclosure contained therein.
Vote Required
Your votes
with respect to the approval of Proposal 2 are advisory, which means the results of such votes are not binding on us, the Board
and the committees of the Board. Although non-binding, the Board and its committees value the opinions of our stockholders and
will review and consider the voting results when making future decisions regarding executive compensation. Because the advisory
vote on executive compensation occurs well after the beginning of the compensation year and because the different elements of our
executive compensation programs are designed to operate in an integrated manner and to complement one another, it may not be appropriate
or feasible to change our executive compensation programs in consideration of one year’s advisory vote on executive compensation
by the time of the following year’s annual meeting of stockholders.
The approval,
on a non-binding basis, of the compensation of our Named Executive Officers requires the affirmative vote of a majority of the
shares of Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter. If you
submit a signed proxy card but do not give voting instructions as to how your shares of Common Stock should be voted, your shares
will be voted in accordance with the recommendations of our Board stated in this Proxy Statement. Abstentions will have the same
effect as a vote “AGAINST” Proposal 2, and broker non-votes will not have any effect on the outcome of Proposal 2.
THE
BOARD RECOMMENDS VOTING “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF THE COMPANY’S
NAMED EXECUTIVE OFFICERS.
PROPOSAL
3 — RATIFICATION OF APPOINTMENT OF THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit
Committee has appointed Deloitte as the Company’s independent registered public accounting firm to audit the financial statements
of the Company for the fiscal year ending December 31, 2025. The audit of the Company’s consolidated financial statements
for the fiscal year ended December 31, 2024 was completed by Deloitte on February 6, 2025. Deloitte has acted as the Company’s
independent registered public accounting firm since 2016.
The Board
is submitting the appointment of Deloitte for ratification at the Annual Meeting. The submission of this matter for approval by
stockholders is not legally required, but the Board and the Audit Committee believe the submission provides an opportunity for
stockholders through their vote to communicate with the Board and the Audit Committee about an important aspect of corporate governance.
If the stockholders do not ratify the appointment of Deloitte, the Audit Committee will reconsider the appointment of that firm
as the Company’s independent registered public accounting firm.
The Audit
Committee has the sole authority and responsibility to retain, evaluate and replace the Company’s independent auditors, and
stockholder ratification of this appointment does not limit the authority of the Audit Committee to change auditors at any time.
Representatives of Deloitte are expected to be present at the Annual Meeting and will have an opportunity to make a statement if
they so desire and will be available to respond to appropriate questions.
The following
table summarizes the aggregate fees billed or expected to be billed by Deloitte for the fiscal years ended December 31, 2024 and
2023.
| | |
2024 | | |
2023 | |
| Audit Fees(1) | |
$ | 2,700,000 | | |
$ | 2,650,000 | |
| Audit-Related Fees(2) | |
| 30,000 | | |
| — | |
| Tax Fees(3) | |
| 89,513 | | |
| 374,300 | |
| All Other Fees(4) | |
| — | | |
| — | |
| Total Fees | |
$ | 2,819,513 | | |
$ | 3,024,300 | |
| (1) | Deloitte’s audit fees related primarily to the integrated annual audit
of the consolidated financial statements for the fiscal year as included in our Annual Report on Form 10-K, which integrated audit
includes the audit of the effectiveness of internal controls over financial reporting, quarterly reviews, and consultations relating
to the audit and quarterly reviews. |
| (2) | Deloitte’s audit-related fees were in connection with the Company’s Registration Statement
on Form S-8 filed on May 17, 2024 and the auditor consent thereto. |
| (3) | Deloitte’s fees for tax services related primarily to professional services rendered by Deloitte
for tax compliance, tax advice and tax planning. |
| (4) | Deloitte did not provide any other products and services so no other fees were incurred. |
Before Deloitte
is engaged to render audit or non-audit services, the Audit Committee must pre-approve the engagement. The charter of the Audit
Committee and its pre-approval policy provides that pre-approval is not required if the engagement is entered into pursuant to
pre-approval policies and procedures established by the Audit Committee. The Chairman of the Audit Committee has the authority
to grant pre-approvals, provided such approvals are within the pre-approval policy and presented to the Audit Committee at a subsequent
meeting. The Audit Committee pre-approved all of the fees described in the table set forth above. The duties of the Audit Committee
are described in the charter of the Audit Committee that can be found on the Company’s website, www.libertyenergy.com,
by first clicking “Investors” then “Corporate Governance” and
proceeding to “Governance Documents.”
Vote Required
The affirmative
vote of a majority of the shares of Common Stock present in person or represented by proxy at the Annual Meeting and entitled to
vote on the matter is required to approve Proposal 3. If you submit a signed proxy card but do not give voting instructions as
to how your shares of Common Stock should be voted, your shares will be voted in accordance with the recommendations of our Board
stated in this Proxy Statement. Abstentions will have the same effect as a vote “AGAINST” Proposal 3, and there will
be no broker non-votes with respect to Proposal 3.
THE
BOARD RECOMMENDS VOTING “FOR” THE RATIFICATION OF APPOINTMENT OF DELOITTE AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2025.
AUDIT COMMITTEE
REPORT
The information
contained in this Audit Committee Report shall not be deemed to be “soliciting material” or to be “filed”
with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange
Act, except to the extent that the Company specifically incorporates such information by reference in such filing.
Primary Oversight Responsibilities
Our management
is responsible for establishing a system of internal controls, assessing such controls and for preparing our consolidated financial
statements in accordance with generally accepted accounting principles. The Audit Committee provides oversight of these management
activities. Our independent registered public accounting firm is responsible for auditing our consolidated financial statements
in accordance with standards of the United Stated Public Company Accounting Oversight Board (the “PCAOB”) and
issuing its report based on its audit.
Under the
Audit Committee’s charter, the purpose of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities
as to, among other duties: (i) the integrity of the Company’s financial statements; (ii) the Company’s compliance with
legal and regulatory requirements; (iii) qualifications, independence and performance of the independent registered public accounting
firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the
Company; (iv) effectiveness and performance of the Company’s internal audit function; (v) the annual preparation of this
report and publishing this report in the Company’s Proxy Statement for its annual meeting of stockholders or its Annual Report
on Form 10-K; and (vi) performing such other functions as the Board may assign to the Audit Committee from time to time.
Oversight of Independent Auditors
In connection
with the evaluation, appointment and retention of the independent registered public accounting firm, at least annually the Audit
Committee reviews and evaluates the independence and quality control procedures of the independent registered public accounting
firm and the experience and qualifications of its senior personnel providing audit services to the Company. In this evaluation,
the Audit Committee may consider, among other factors, the following with respect to the independent registered public accounting
firm: their historical and recent performance on our audit, the quality and candor of their communications with the both the Audit
Committee and management, the depth of expertise of their audit team and the value provided by their national office, the appropriateness
of their fees, how effectively they maintained their independence, their tenure as our independent auditors, their knowledge of
our operations, accounting policies and practices, and internal control over financial reporting, and external data relating to
audit quality and performance by them and their peer firms. Based on this overall evaluation, the Audit Committee retained Deloitte
as our independent registered public accounting firm for 2024.
2024 Audited Financial Statements
In connection
with the preparation of the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended
December 31, 2024:
| • | The Audit Committee reviewed and discussed
the audited financial statements and associated audit with the independent registered public accounting firm and management; |
| • | The Audit Committee discussed with the independent
registered public accounting firm the matters required to be discussed by Auditing Standard No. 1301 “Communications with
Audit Committees” as adopted by the PCAOB. In general, these auditing standards require the independent registered public
accounting firm to communicate to the Audit Committee certain matters that are incidental to the audit, such as any initiation
of, or changes to, significant accounting policies, management judgments, accounting estimates and audit adjustments; disagreements
with management; the independent registered public accounting firm’s judgment about the quality of our accounting principles;
significant audit risks identified and any changes from planned audit strategy; the use of specialists on the audit team; and issues
for which the independent registered public accounting firm have consulted outside the engagement team; and |
| • | The Audit Committee has received the written
disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB
regarding the independent registered public accounting firm’s communication with the Audit Committee concerning independence
and has discussed the independent registered public accounting firm’s independence with the independent registered public
accounting firm. The Audit Committee also considered whether the independent registered public accounting firm’s provision
of non-audit services to us was compatible with maintaining their independence. |
Based on the
review and discussions noted above, the Audit Committee recommended to the Board that the audited consolidated financial statements
of the Company for the year ended December 31, 2024 be included in our Annual Report on Form 10-K filed with the SEC.
| |
Audit Committee
of the Board of Directors:
William F. Kimble (Chair)
Simon Ayat
Gale A. Norton
Cary D. Steinbeck
|
PROPOSAL
4 — ADVISORY VOTE TO DETERMINE THE FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE THE COMPENSATION OF THE COMPANY’S
NAMED EXECUTIVE OFFICERS
As described
in Proposal 2 above, Section 14A of the Exchange Act affords stockholders an advisory say-on-pay vote to approve the Company’s
executive compensation program. As required by Section 14A of the Exchange Act, this Proposal 4 affords stockholders an advisory
vote on the frequency of future say-on-pay votes. The advisory vote on the frequency of the say-on-pay vote is a non-binding vote
as to how often future say-on-pay votes should occur: every year, every two years, or every three years. In addition, stockholders
may abstain from voting on this Proposal 4; however, Section 14A of the Exchange Act requires the Company to hold the advisory
vote on the frequency of the say-on-pay vote at least once every six years. The Company has held its advisory say-on-pay annually
since inception.
In formulating
its recommendation, the Board considered that say-on-pay held every year would best enable stockholders to timely express their
views on the Company’s executive compensation program and enable the Board and the Compensation Committee to determine current
stockholder sentiment. The Board believes that an annual vote is consistent with the Company’s efforts to engage in an ongoing
dialogue with stockholders on executive compensation and corporate governance matters.
Although the
frequency vote is non-binding, consistent with the Company’s responsiveness to stockholders, the Compensation Committee and
the Board will review the results of the vote will take the stockholders’ views into account in determining the frequency
of future advisory votes to approve the compensation of the named executive officers.
The stockholders
are being asked to vote among the following frequency options:
| ● | Choice 2—every two years; |
| ● | Choice 3—every three years; or |
| ● | Choice 4—abstain from voting. |
Vote Required
This advisory
vote on the frequency of future say-on-pay votes is non-binding on the Company or the Board. However, the Board will consider the
result of the vote when determining the frequency of future say-on-pay votes. The frequency to receive a plurality of the votes
cast and entitled to vote on the matter (the frequency receiving the highest number of votes) will be the choice recommended by
the stockholders. If you submit a signed proxy card but do not give voting instructions as to how your shares of Common Stock should
be voted, your shares will be voted in accordance with the recommendations of our Board stated in this Proxy Statement. Abstentions
and broker non-votes will not have any effect on the outcome of Proposal 4.
THE BOARD RECOMMENDS
VOTING “1 YEAR” ON THE ADVISORY VOTE TO DETERMINE THE FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE THE COMPENSATION
OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.
PROPOSAL
5 — APPROVAL OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORS
The Board, having
determined that it is advisable and in the best interests of the Company and its stockholders, is submitting for stockholder approval
a proposal to amend the Charter to remove the three separate classes of directors of the Board and replace them with
one class of directors over a three-year phase-in period and to make certain additional changes related thereto (collectively,
the “Declassification Amendment”). Declassifying the Board will allow the Company’s stockholders
to vote on the election of the entire Board each year, rather than on a three-year staggered basis as with the current
classified board structure. The following description is a summary only and is qualified in its entirety by reference
to Annex A to this Proxy Statement.
Current Status
Under the Charter,
the Board is currently separated into three classes. Absent the earlier death, disability, resignation, disqualification or removal
of a director, each year the stockholders of the Company are asked to elect the directors comprising one of the classes for a three-year
term. The term of the current Class III directors is set to expire at this Annual Meeting. The term of the current Class I directors
is set to expire in 2026 and the term of the current Class II directors is set to expire in 2027. Directors may be removed only
for cause upon the affirmative vote of the holders of at least 66 2/3% of the outstanding shares of stock of the Company entitled
to vote generally for the election of directors.
Rationale
for the Proposal
The Board believes
that the classified board structure served the Company well following the Company’s initial public offering (the
“IPO”) as a newly public company, in which our former private equity sponsor held a substantial stake, by promoting
continuity and stability and encouraging a long-term perspective on the part of directors, and it would be beneficial in the event
of a proxy contest. As part of our continuous evaluation of corporate governance practices and engagement with stockholders, the Board and
the Nominating and Governance Committee of the Board regularly review our governing documents and consider possible changes.
After careful consideration and having heard our stockholders’ preferences expressed through our engagement with them and
given the Company’s continued growth following the IPO and the exit of its private equity sponsors, the Board has determined that
it is in the best interests of the Company and its stockholders to declassify the Board over a three-year period, so
that all directors stand for election annually from and after the 2028 annual meeting of stockholders. A declassified board
will enable the Company’s stockholders to express a view on each director’s performance by means of an annual
vote and will support the Company’s ongoing efforts to maintain “best practices” in corporate governance.
Effect of
the Proposal
If the Declassification
Amendment is approved by the Company’s stockholders and implemented by the Company, (i) the current Class III directors will
be elected at the 2025 annual meeting of stockholders to serve for a three year term expiring at the 2028 annual meeting of the
stockholders, (ii) the current Class I directors will be elected at the 2026 annual meeting of stockholders to serve for a term
of one year, (iii) the current Class I and II directors will be elected at the 2027 annual meeting of stockholders to serve for
a term of one year, and (iv) the current Class I, II and III directors will be elected at the 2028 annual meeting of stockholders
to serve for a term of one year, at which time all directors will be elected to serve for one-year terms at all subsequent annual
meetings of stockholders.
Under Section
141(k) of the DGCL, unless otherwise provided in a company’s certificate of incorporation, directors serving on a classified board may
be removed by stockholders only for cause, while directors serving on a non-classified board may be removed, with or
without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. As a result,
approval of the Declassification Amendment will also result in an amendment to the Charter to allow for the removal of a
director from the Board, with or without cause, by the holders of a majority in voting power of the then-outstanding shares then
entitled to vote at an election of directors, from and after the 2026 annual meeting of stockholders for the current Class I directors,
from and after the 2027 annual meeting of stockholders for the current Class I and II directors and from and after the 2028 annual
meeting of stockholders for all directors.
The Declassification
Amendment would become effective upon the filing of a certificate of amendment to the Charter with the Secretary of State of the
State of Delaware reflecting the changes in Annex A to this Proxy Statement, which we expect would be filed by the Company
promptly following the Annual Meeting if our stockholders approve the Declassification Amendment. If the Declassification Amendment
is not approved, the corresponding amendments in Article Fifth of Annex A to this Proxy Statement will not be implemented.
The description of the Declassification Amendment is qualified in its entirety by reference to the text of the proposed revisions,
which are set forth in Annex A to this Proxy Statement. Additions are indicated by underlining, and deletions are indicated
by strikeouts. The adoption of the Declassification Amendment is not contingent on the approval of any other proposal described
in this Proxy Statement. The Board reserves the right to elect to abandon the Declassification Amendment prior to its implementation,
if it determines, in its sole discretion, that the Declassification Amendment is no longer in the best interests of the Company
and its stockholders.
Vote Required
The approval
of Proposal 5 requires the affirmative vote of the holders of at least 66 2/3% in voting power of the outstanding shares of
Common Stock entitled to vote thereon, voting together as a single class. If you submit a signed proxy card but do not give voting
instructions as to how your shares of Common Stock should be voted, your shares will be voted in accordance with the recommendations
of our Board stated in this Proxy Statement. Abstentions and broker non-votes will have the same effect as a vote “AGAINST”
Proposal 5.
THE BOARD RECOMMENDS VOTING
“FOR” APPROVAL OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORS.
PROPOSAL
6 — APPROVAL OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO REMOVE THE 66 2/3% SUPERMAJORITY VOTE
REQUIREMENTS TO AMEND, ALTER, OR REPEAL THE COMPANY’S CERTIFICATE OF INCORPORATION AND BYLAWS AND TO REMOVE DIRECTORS FROM
OFFICE
The Board,
having determined that it is advisable and in the best interests of the Company and its stockholders, is submitting for
stockholder approval a proposal to amend the Charter to (a) change the required vote of stockholders to amend, alter or repeal
any provision of the Company’s Bylaws from not less than 66 2/3% in voting power of the then-outstanding shares of stock
entitled to vote thereon to a majority in voting power of the then-outstanding shares of stock entitled to vote thereon, (b) change
the required vote of stockholders to amend, alter or repeal any provisions of the Charter, from at least 66 2/3% in voting power
of the then-outstanding shares of stock entitled to vote thereon to the affirmative vote of a majority in voting power of the outstanding
shares of stock of the Company entitled to vote thereon and (c) change the required vote of stockholders to remove directors from
office from at least 66 2/3% in voting power of the then-outstanding shares of stock entitled to vote thereon to the affirmative
vote of at least a majority of the outstanding shares of Common Stock entitled to vote at an election of directors; each to take
effect following stockholder approval of the changes described to the Charter in Annex A (the “Majority Vote Amendment”).
Current Status
Under the Charter, an amendment, alteration
or repeal of any provision of the Company’s Bylaws or the Charter by the stockholders requires the approval of holders of
not less than 66 2/3% in voting power of the then-outstanding shares of stock of the Company entitled to vote thereon, voting together
as a single class. Additionally, removal of any director from office by stockholders requires the affirmative vote of the holders
of at least 66 2/3% of the outstanding shares of Common Stock entitled to vote at an election of directors.
Rationale for the Proposal
The Board believes that the
supermajority voting requirements served the Company well following the IPO as a newly public company, in which our former
private equity sponsor held a substantial stake, by promoting continuity and stability. As part of our continuous evaluation
of corporate governance practices, the Board and the Nominating and Governance Committee of the Board regularly review our
governing documents and consider possible changes. While the Board believes that the corporate governance stability benefits
exist, it recognizes that many investors and other stakeholders believe that supermajority voting provisions may limit a
board’s responsiveness and accountability to stockholders and restrict stockholder participation in certain corporate
governance matters. After careful consideration, the Board has determined that it is in the best interests of the Company and
its stockholders to amend the Charter to remove the supermajority voting requirements described above. The majority voting
requirements will enable the Company’s stockholders to more easily approve amendments to the Charter and will support
the Company’s ongoing efforts to maintain “best practices” in corporate governance.
Effect of the Proposal
If the Majority Vote Amendment is approved
by the Company’s stockholders and implemented by the Company, (i) the affirmative vote of at least a majority in voting power
of the then-outstanding shares of stock of the Company entitled to vote thereon will be required to amend, alter or repeal any
provision of the Charter or the Bylaws and (ii) the affirmative vote of at least a majority of the outstanding shares of Common
Stock entitled to vote at an election of directors will be required to remove a director from office. Following stockholder approval
of the Majority Vote Amendment, the Board will make conforming amendments to the Bylaws to reduce the stockholder voting threshold
to amend, alter, or repeal the Bylaws from the holders of not less than 66 2/3% of the then-outstanding shares of stock entitled
to vote thereon to the affirmative vote of the holders of a majority in voting power of the then-outstanding shares of stock entitled
to vote thereon.
The Majority Vote Amendment would become
effective upon the filing of a certificate of amendment to the Charter with the Secretary of State of the State of Delaware reflecting
the changes in Annex A to this Proxy Statement, which we expect would be filed by the Company promptly following the Annual
Meeting if our stockholders approve the Majority Vote Amendment. If the Majority Vote Amendment is not approved, the corresponding
amendments in Articles Fifth, Eighth, Twelfth, and Thirteenth of Annex A to this Proxy
Statement will not be implemented. The description of the Majority Vote Amendment is qualified in
its entirety by reference to the text of the proposed revisions, which are set forth in Annex A to this Proxy Statement.
Additions are indicated by underlining, and deletions are indicated by strikeouts. The adoption of the Majority Vote Amendment
is not contingent on the approval of any other proposal described in this Proxy Statement. The
Board reserves the right to elect to abandon the Majority Vote Amendment prior to its implementation, if it determines, in its
sole discretion, that the Majority Vote Amendment is no longer in the best interests of the Company and its stockholders.
Vote Required
The approval
of Proposal 6 requires the affirmative vote of the holders of at least 66 2/3% in voting power of the outstanding shares of Common
Stock entitled to vote thereon, voting together as a single class. If you submit a signed proxy card but do not give voting instructions
as to how your shares of Common Stock should be voted, your shares will be voted in accordance with the recommendations of our
Board stated in this Proxy Statement. Abstentions and broker non-votes will have the same effect as a vote “AGAINST”
Proposal 6.
THE BOARD RECOMMENDS VOTING
“FOR” APPROVAL OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO REMOVE THE 66 2/3% SUPERMAJORITY
VOTE REQUIREMENTS TO AMEND, ALTER, OR REPEAL THE COMPANY’S CERTIFICATE OF INCORPORATION AND BYLAWS AND TO REMOVE DIRECTORS
FROM OFFICE.
PROPOSAL
7 — APPROVAL OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO LIMIT THE LIABILITY OF CERTAIN OFFICERS
The Board, having determined
that it is advisable and in the best interests of the Company and its stockholders, is submitting for stockholder approval a proposal
to amend our Charter to implement the DGCL provisions permitting exculpation of officers (the “Officer Exculpation Amendment”).
Current Status
The Charter currently provides
for exculpation of directors, as permitted by the DGCL, but does not include a provision that allows for the exculpation of officers.
The DGCL permits Delaware corporations to limit the personal liability of directors for monetary damages associated with breaches
of the duty of care in limited circumstances, and our Charter currently includes those limitations. Effective August 1, 2022, the
DGCL was amended to permit Delaware corporations to amend their certificates of incorporation, subject to stockholder approval,
to limit the personal liability of certain officers for monetary damages associated with breaches of the fiduciary duty of care
(but not the fiduciary duty of loyalty) in limited circumstances.
The Officer Exculpation
Amendment would permit exculpation of officers only for direct claims for breaches of the duty of care, as opposed to derivative
claims made by stockholders on behalf of the Company, and, like the director exculpation provision, would not exculpate officers
from liability for breach of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or
a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. Similar to what is provided
for director exculpation, the Officer Exculpation Amendment provides that if the DGCL is further amended to eliminate or limit
the personal liability of officers, the liability of officers will be limited to the fullest extent permitted by law, as so amended.
Rationale for the Proposal
The Board believes the
Officer Exculpation Amendment is advisable and in the best interests of the Company and its stockholders because it achieves a
balance between stockholder interest in officer accountability, attracting and retaining quality officers, and reducing litigation
and insurance costs associated with lawsuits. In the absence of such exculpation protection, individuals might be deterred from
serving as officers due to exposure to personal liability and the risk of incurring substantial expense in defending lawsuits,
regardless of merit. Aligning the protections available to our officers with those available to our directors to the extent such
protections are available under the DGCL would empower officers to exercise their business judgment in furtherance of stockholder
interests without the potential for distraction posed by the risk of personal liability. In determining that the Officer Exculpation
Amendment is in the best interests of the Company and its stockholders, the Board considered the narrow class and type of claims
for which officers would be exculpated and the benefits the Board believes would accrue to the Company and its stockholders as
described above.
Effect of
the Proposal
The Officer
Exculpation Amendment would become effective upon the filing of a certificate of amendment to the Charter with the Secretary of
State of the State of Delaware reflecting the changes in Annex A to this Proxy Statement, which we expect would be filed
by the Company promptly following the Annual Meeting if our stockholders approve the Officer Exculpation Amendment. If the Officer
Exculpation Amendment is not approved, the corresponding amendments in Article Ninth of Annex A to this Proxy Statement
will not be implemented. The description of the Officer Exculpation Amendment is qualified in its entirety by reference to the
text of the proposed revisions, which are set forth in Annex A to this Proxy Statement. Additions are indicated by underlining,
and deletions are indicated by strikeouts. The adoption of the Officer Exculpation Amendment is not contingent on the approval
of any other proposal described in this Proxy Statement. The Board reserves the right to elect to abandon the Officer Exculpation
Amendment prior to its implementation, if it determines, in its sole discretion, that the Officer Exculpation Amendment is no longer
in the best interests of the Company and its stockholders.
Vote Required
The approval
of Proposal 7 requires the affirmative vote of the holders of at least 66 2/3% in voting power of the outstanding shares of Common
Stock entitled to vote thereon, voting together as a single class. If you submit a signed proxy card but do not give voting instructions
as to how your shares of Common Stock should be voted, your shares will be voted in accordance with the recommendations of our
Board stated in this Proxy Statement. Abstentions and broker non-votes will have the same effect as a vote “AGAINST”
Proposal 7.
THE BOARD RECOMMENDS
VOTING “FOR” APPROVAL OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO LIMIT THE LIABILITY OF
CERTAIN OFFICERS.
PROPOSAL
8 — APPROVAL OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO DELETE THE WAIVER OF SECTION 203 OF THE
DELAWARE GENERAL CORPORATION LAW
The Board, having determined
that it is advisable and in the best interests of the Company and its stockholders, is submitting for stockholder approval a proposal
to amend our Charter to delete the Company’s waiver of Section 203 of the DGCL (“Section 203”) and expressly
provide that the Company elects to be governed by Section 203 (the “Section 203 Amendment”). As a result, the
Company would become subject to Section 203, which generally prohibits a Delaware corporation from engaging in a “business
combination” with any “interested stockholder” for a period of three years following the date that the stockholder
became an interested stockholder except in certain circumstances. The following description is a summary only and is qualified
in its entirety by reference to Annex A to this Proxy Statement, which incorporates the amendment to expressly provide that
the Company elects to be governed by Section 203 and marks those changes specifically.
Current Status
Under the Charter, the
Company expressly elects not to be governed by Section 203. Section 203 generally prohibits a Delaware corporation from engaging
in any “business combination” with any “interested stockholder” for a period of three years following the
date that the stockholder became an interested stockholder, unless
| ● | prior to such time, either the business combination or the transaction in
which the stockholder became an interested stockholder was approved by the board of directors; |
| ● | upon consummation of the transaction that resulted in the stockholder becoming
an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at
the time the transaction commenced; or |
| ● | at or after such time the business combination is approved by the board
of directors and authorized at a meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting
stock that is not owned by the interested stockholder. |
A “business combination”
generally includes: (i) mergers between the corporation and an interested stockholder (or certain of their affiliates); (ii) sales
or dispositions to an interested stockholder of assets worth 10% or more of the total asset value of the corporation (measured
by consolidated asset value or aggregate stock value); (iii) certain issuances or transfers of stock to an interested stockholder;
(iv) certain transactions involving the corporation that would increase the proportionate ownership of the interested stockholder;
and (v) a receipt by the interested stockholder (except proportionately as a stockholder) of any loans, advances, guarantees, pledges
or other financial benefits provided by the corporation.
An “interested stockholder”
is generally defined as a person or group that beneficially owns 15% or more of the corporation's outstanding common stock. A “business
combination” includes a merger, consolidation, sale of assets or other transaction resulting in a financial benefit to the
stockholder.
Rationale for the Proposal
The Board believes that
the waiver of Section 203 was appropriate for the Company following the IPO as a newly public company in which our former private
equity sponsor held a substantial stake. As part of our continuous evaluation of corporate governance practices, the Board and
the Nominating and Governance Committee of the Board regularly review our governing documents and consider possible changes. The
Board has carefully considered the potential adverse effects and the benefits of being subject to the provisions of Section 203
described above and has concluded that any adverse effects of Section 203 are substantially outweighed by the increased protection
which the statute will afford our stockholders.
If the Company becomes
subject to Section 203 it may have an anti-takeover effect with respect to transactions not approved in advance by the Board. Becoming
subject to Section 203 may also discourage takeover attempts that could result in a premium over the market price for the shares
of our common stock held by stockholders.
The Board believes that
it is in the best interest of the Company and its stockholders for Section 203 to apply to the Company because it will encourage
any potential acquirer to negotiate with our Board and will reduce the likelihood of a hostile takeover that does not provide adequate
value to the Company’s stockholders. The Board believes that a non-negotiated takeover bid may be unfair, coercive or disadvantageous
to the Company and its stockholders because such a bid may: (i) be timed to take advantage of temporarily depressed stock prices;
(ii) be designed to foreclose or minimize the possibility of more favorable competing bids; or (iii) involve the acquisition of
only a controlling interest in our Company’s stock or a two-tiered bid, without affording all stockholders the opportunity
to receive the same economic benefits.
The application of Section
203 to the Company will confer upon the Board the power to reject a proposed business combination in certain circumstances, even
though a potential acquirer may be offering a premium for our capital stock or assets over the then-current market price. In a
transaction in which an acquirer must negotiate with the Board, the Board can negotiate for the terms and structure that the Board
believes are in the best interests of the Company and its stockholders and can reject any proposal that the Board believes is inadequate
or unfairly timed. Becoming subject to Section 203 may also discourage potential acquirers that are unwilling to negotiate with
the Board. Section 203 should not interfere with any merger or business combination approved by the Board. A substantial number
of public companies are governed by Section 203, and the Board believes that such election is consistent with good principles of
corporate governance and is appropriate for public companies incorporated in Delaware that do not have a substantial stockholder.
The Section 203 Amendment
is not prompted by any specific contemplated or anticipated stockholder action of which the Board is aware. Additionally, the Second
203 Amendment is not part of a plan to adopt a series of anti-takeover amendments, and the Board and management have no current
plan or intention to propose other measures in future proxy solicitations that could have an anti-takeover effect.
Effect of Proposal
If the Section 203 Amendment
is approved, “business combinations” with “interested stockholders” will be conditioned upon satisfaction
of the provisions of Section 203. Under certain circumstances, Section 203 will have an anti-takeover effect with respect to transactions
not approved in advance by the Board by making it more difficult for a person who would be an “interested stockholder”
to effect various business combinations with us for a three-year period. As a result, this may encourage companies interested in
acquiring us to negotiate in advance with the Board because the stockholder approval requirement would be avoided if the Board
approves either the business combination or the transaction which results in the stockholder becoming an interested stockholder.
Section 203 also may have the effect of preventing changes in our Board and may make it more difficult to accomplish transactions
which stockholders may otherwise deem to be in their best interests.
The Section
203 Amendment would become effective upon the filing of a certificate of amendment to the Charter with the Secretary of State of
the State of Delaware reflecting the changes in Annex A to this Proxy Statement, which we expect would be filed by the Company
promptly following the Annual Meeting if our stockholders approve the Section 203 Amendment. If the Section 203 Amendment is not
approved, the corresponding amendments in Article Eleventh of Annex A to this Proxy Statement will not be implemented. The
description of the Section 203 Amendment is qualified in its entirety by reference to the text of the proposed revisions, which
are set forth in Annex A to this Proxy Statement. Additions are indicated by underlining, and deletions are indicated by
strikeouts. The adoption of the Section 203 Amendment is not contingent on the approval of any other proposal described in this
Proxy Statement. The Board reserves the right to elect to abandon the Section 203 Amendment prior to its implementation, if it
determines, in its sole discretion, that the Section 203 Amendment is no longer in the best interests of the Company and its stockholders.
Vote Required
The approval
of Proposal 8 requires the affirmative vote of the holders of at least 66 2/3% in voting power of the outstanding shares of Common
Stock entitled to vote thereon, voting together as a single class. If you submit a signed proxy card but do not give voting instructions
as to how your shares of Common Stock should be voted, your shares will be voted in accordance with the recommendations of our
Board stated in this Proxy Statement. Abstentions and broker non-votes will have the same effect as a vote “AGAINST”
Proposal 8.
THE BOARD
RECOMMENDS VOTING “FOR” APPROVAL OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO DELETE THE
WAIVER OF SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW.
PROPOSAL
9 — APPROVAL OF MISCELLANEOUS AMENDMENTS TO CLARIFY AND UPDATE THE COMPANY’S CERTIFICATE OF INCORPORATION
The Board, having
determined that it is advisable and in the best interests of the Company and its stockholders, is submitting for stockholder approval
a proposal to amend the Charter to clarify and modernize it by removing outdated terms relating to our former private equity sponsor
that has since exited control and ownership of the Company and certain other immaterial changes (the “Miscellaneous Amendments”).
Current Status
The Charter
currently includes, among other things, references to “Principal Stockholders,” “Trigger Date,” “LLC
Agreement,” “Stockholders Agreement,” and the various provisions related thereto and as well as provisions that
are now inapplicable following the “Trigger Date.”
Rationale
for Proposal
As part of our
continuous evaluation of corporate governance practices, the Board and the Nominating and Governance Committee of the Board regularly
review our governing documents and consider possible changes. Given that our former private equity sponsor is no longer a significant
stockholder and is no longer involved with the management of the Company, the Board believes eliminating these provisions will
avoid potential confusion relating to provisions that are obsolete and no longer applicable. As a result, the Company is seeking
stockholder approval of the Miscellaneous Amendments.
Effect of
the Proposal
The Miscellaneous
Amendments would become effective upon the filing of a certificate of amendment to the Charter with the Secretary of State of the
State of Delaware reflecting the changes in Annex A to this Proxy Statement, which we expect would be filed by the Company
promptly following the Annual Meeting if our stockholders approve the Miscellaneous Amendments. If the Miscellaneous Amendments
are not approved, the corresponding amendments in Annex A to this Proxy Statement will not be implemented. The description
of the Miscellaneous Amendments is qualified in its entirety by reference to the text of the proposed revisions, which are set
forth in Annex A to this Proxy Statement. Additions are indicated by underlining, and deletions are indicated by strikeouts.
The adoption of the Miscellaneous Amendments are not contingent on the approval of any other proposal described in this Proxy Statement.
The Board reserves the right to elect to abandon the Miscellaneous Amendments prior to implementation, if it determines, in its
sole discretion, that the Miscellaneous Amendments are no longer in the best interests of the Company and its stockholders.
Vote Required
The approval
of Proposal 9 requires the affirmative vote of the holders of at least 66 2/3% in voting power of the outstanding shares of Common
Stock entitled to vote thereon, voting together as a single class. If you submit a signed proxy card but do not give voting instructions
as to how your shares of Common Stock should be voted, your shares will be voted in accordance with the recommendations of our
Board stated in this Proxy Statement. Abstentions and broker non-votes will have the same effect as a vote “AGAINST”
Proposal 9.
THE BOARD
RECOMMENDS VOTING “FOR” APPROVAL OF MISCELLANEOUS AMENDMENTS TO CLARIFY AND UPDATE THE COMPANY’S CERTIFICATE
OF INCORPORATION.
SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table
sets forth the beneficial ownership of our common stock as of February 19, 2025 based on [162,336,099] shares of our Class A
Common Stock outstanding on such date:
| * | each person known to us to beneficially own more than 5% of any class
of our outstanding voting securities; |
| * | each member of our Board and each nominee to our Board; |
| * | each of our Named Executive Officers; and |
| * | all of our current directors and executive officers as a group. |
Except as
otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our Common Stock
beneficially owned by them, except to the extent this power may be shared with a spouse. All information with respect to beneficial
ownership has been furnished by the 5% or more stockholders, directors, director nominees, or Named Executive Officers, as the
case may be. Unless otherwise noted, the mailing address of each listed beneficial owner is 950 17th Street, Suite 2400, Denver,
Colorado 80202.
| | |
Class
A
Common
Stock | |
| | |
| Number | | |
| % | |
| 5% Stockholders | |
| | | |
| | |
| Blackrock, Inc.(1) | |
| 27,461,174 | | |
| 16.9 | % |
| The Vanguard Group(2) | |
| 19,224,315 | | |
| 11.8 | % |
| FMR LLC(3) | |
| 15,203,654 | | |
| 9.4 | % |
| Dimensional Fund Advisors LP(4) | |
| 9,443,949 | | |
| 5.8 | % |
| Directors, Director Nominees, and Named Executive Officers: | |
| | | |
| | |
| Christopher Wright(5) | |
| 2,678,080 | | |
| 1.6 | % |
| Ron Gusek(6) | |
| 1,243,979 | | |
| * | |
| Michael Stock(6) | |
| 748,326 | | |
| * | |
| R. Sean Elliott(6) | |
| 267,854 | | |
| * | |
| Ryan T. Gosney(6) | |
| 171,570 | | |
| * | |
| Simon Ayat | |
| 35,011 | | |
| * | |
| Ken Babcock | |
| 59,289 | | |
| * | |
| Peter A. Dea | |
| 69,602 | | |
| * | |
| William F. Kimble | |
| 69,963 | | |
| * | |
| James R. McDonald | |
| — | | |
| — | |
| Arjun Murti | |
| — | | |
| — | |
| Gale A. Norton | |
| 66,241 | | |
| * | |
| Audrey Robertson(7) | |
| 40,804 | | |
| * | |
| Cary D. Steinbeck(8) | |
| 358,703 | | |
| * | |
| Current Directors and Executive Officers as a group (13 persons)(9) | |
| 3,131,342 | | |
| 1.9 | % |
| (1) | This information is based solely on a Schedule 13G/A filed with the SEC
on November 12, 2024 by Blackrock, Inc., in which it reported that Blackrock, Inc. has sole voting power as to 26,686,744 shares
of Class A Common Stock and sole dispositive power as to 27,461,174 shares of Class A Common Stock. The principal business address
of Blackrock, Inc. is 50 Hudson Yards, New York, NY 10001. |
| (2) | This information is based solely on a Schedule 13G/A filed with the SEC on
February 13, 2024 by The Vanguard Group, in which it reported that The Vanguard Group has shared voting power as to 172,985 shares
of Class A Common Stock, sole dispositive power as to 18,903,189 shares of Class A Common Stock and shared dispositive power as
to 321,126 shares of Class A Common Stock. The principal business address of The Vanguard Group is 100 Vanguard Blvd., Malvern,
PA 19355. |
| (3) | This information is based solely on a Schedule 13G/A filed with the SEC
on February 12, 2025, by FMR LLC and Abigail P. Johnson, in which it reported that FMR LLC has sole voting power as to 15,187,813
shares of Class A Common Stock and sole dispositive power as to 15,203,654 shares of Class A Common Stock and Ms. Johnson has no
voting power, and sole dispositive power as to 15,203,654 shares of Class A Common Stock. The principal business address of FMR
LLC is 245 Summer Street, Boston, MA 02210. |
| (4) | This information is based solely on a Schedule 13G filed with the SEC on
February 9, 2024 by Dimensional Fund Advisors LP, in which it reported that Dimensional Fund Advisors LP has sole voting power
as to 9,278,827 shares of Class A Common Stock, sole dispositive power as to 9,443,949 shares of Class A Common Stock. The principal
business address of Dimensional Fund Advisors LP is 6300 Bee Cave Road, Building One, Austin, TX 78746. |
| (5) | Includes Mr. Wright in his capacity as a Named Executive Officer of the Company.
Mr. Wright’s ownership information is as of February 3, 2025, which is the date that he ceased to be a Section 16 reporting
person of the Company. |
| (6) | Shares of Class A Common Stock held by Messrs. Gusek, Stock, Elliott and
Gosney include (a) 54,243; 54,243; 45,002; and 28,325 shares of stock, respectively, that will be received upon the vesting of
time-based RSUs and (b) 123,340; 123,340; 50,408; and 31,310 shares of stock, respectively, that will be received upon the vesting
of performance-based RSUs within 60 days of February 19, 2025. |
| (7) | Includes 200 shares held in custodial accounts on behalf of minor children of Ms. Robertson and
5 shares held in a Roth IRA. |
| (8) | Includes 329,350 shares of Class A Common Stock held by the Steinbeck Family
Trust and 9,805 shares of Class A Common Stock held by the Cary Dustin Steinbeck & Melissa Maucione Crimson Steinbeck Trust.
Mr. Steinbeck has voting and dispositive power over these shares. |
| (9) | Excludes Mr. Wright, who was neither a director nor an executive officer
of the Company as of the date of this table. |
* Less
than 1.0%.
CERTAIN RELATIONSHIPS
AND RELATED PARTY TRANSACTIONS
Policies and
Procedures for Review of Related Party Transactions
A “Related
Party Transaction” is a transaction, arrangement or relationship in which the Company or any of its subsidiaries was,
is or will be a participant, the amount of which involved exceeds $120,000, and in which any related person had, has or will have
a direct or indirect material interest. A “Related Person” is:
| ♦ | any person who is, or at any time during the applicable period was, one
of our executive officers or one of our directors; |
| ♦ | any person who is known by us to be the beneficial owner of more than
5% of our Class A Common Stock; |
| ♦ | any immediate family member of any of the foregoing
persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law of a director, executive officer or a beneficial owner of more than 5% of our Class A Common Stock,
and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner
of more than 5% of our Class A Common Stock; and |
| ♦ | any firm, corporation or other entity in which
any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10.0% or greater
beneficial ownership interest. |
Our Board
has adopted a written related party transactions policy. Pursuant to this policy, our Audit Committee reviews all material facts
of all Related Party Transactions and either approves or disapproves entry into the Related Party Transaction, subject to certain
limited exceptions. The determination of the Audit Committee is documented in the Audit Committee’s minutes. In determining
whether to approve or disapprove entry into a Related Party Transaction, our Audit Committee considers, among other factors, the
following: (i) whether the Related Party Transaction is on terms no less favorable than terms generally available to an unaffiliated
third- party under the same or similar circumstances and (ii) the extent of the Related Person’s interest in the transaction.
Furthermore, the policy requires that all Related Party Transactions required to be disclosed in our filings with the SEC be so
disclosed in accordance with applicable laws, rules and regulations.
Related Party
Transactions
The following
is a description of transactions entered into, or in effect, after January 1, 2024 to which we have been a party, in which the
amount involved in the transaction exceeds $120,000, and in which any of our directors, executive officers or beneficial owners
of more than 5% of our voting securities, or affiliates or immediate family members of any of our directors, executive officers
or beneficial owners of more than 5% of our voting securities, had or will have a direct or indirect material interest. We believe
the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below
were comparable to terms available or the amounts that would be paid or received, as applicable, from unrelated third parties.
Transactions
with Liberty Resources
Liberty Resources
LLC (“Liberty Resources”) is an oil and gas exploration and production company of which Mr. Wright, our former
Chairman of the Board and Chief Executive Officer, was the Executive Chairman and an equity owner. Mr. Wright previously served
as the Chief Executive Officer at Liberty Resources from its formation in September 2010 until March 2017. Liberty Resources entered
into a master service agreement with Liberty Oilfield Services LLC (n/k/a Liberty Energy Services LLC), a subsidiary of the Company
(“Liberty Services”), whereby Liberty Services provides hydraulic fracturing service to Liberty Resources at
market service rates. For the year ended December 31, 2024, the amounts related to the provision of hydraulic fracturing services
to Liberty Resources under the master services agreement were $11.1 million.
In December
2022, the Company entered into a letter agreement with Liberty Resources to extend the payment terms for certain accounts receivable
until April 1, 2024, and, in August 2023, the parties revised such letter agreement to make various modifications including further
extending payment terms until January 1, 2025, subject to timely payment of monthly interest charges ranging from 15-20%. As of
December 31, 2024, the receivables subject to this letter agreement had been repaid in the entirety.
In March 2024,
Liberty Resources ceased to be a Related Person following its acquisition by third party.
Transactions
with Franklin Mountain
Franklin Mountain
Energy LLC (“Franklin Mountain”) is an oil and gas exploration and production company of which Ms. Robertson,
a member of our Board, serves as the Chief Financial Officer. Franklin Mountain entered into a master service agreement with Liberty
Services, whereby Liberty Services provides hydraulic fracturing service to Franklin Mountain at market service rates. For the
year ended December 31, 2024, the amounts related to the provision of hydraulic fracturing services to Franklin Mountain under
the master services agreement was $120.3 million.
Transactions
with Tim Babcock
Tim Babcock
is currently employed by the Company as a director of operations. Tim Babcock is the son of Ken Babcock, a member of our Board.
For the year ended December 31, 2024, Tim Babcock was paid gross compensation of $221,750 for his services as an employee.
Transactions with the Bettering
Human Lives Foundation
In December
2023, the Company established the Bettering Human Lives Foundation (the “Foundation”), a nonprofit organization
dedicated to promoting clean cooking solutions and improving the well-being of communities worldwide. Mr. Wright, the Company’s
former CEO also formerly served as Chairman of the Foundation, and his sister-in-law, Anne Hyre, currently serves as the Foundation’s
executive director. Ms. Hyre is employed by the Company and seconded to the Foundation. We expect that Ms. Hyre will receive total
compensation of approximately $250,000 from the Company for the year ended December 31, 2024. In addition, the Company and the
Foundation are parties to a Support Services Agreement (the “Support Services Agreement”) whereby the Company provides
certain administrative and operational support services to the Foundation. During the year ended December 31, 2024, the Company
made charitable contributions of $0.9 million to the Foundation and received $0.5 million in other service revenue from the Foundation
under the Support Services Agreement.
Transactions
with Veriten LLC
Mr. Murti joined our Board
in January 2025. He is a partner at Veriten LLC, a private research, investment and strategy firm, that the Company retained for
consulting services in 2024 for approximately $250,000 and has retained again in 2025 for approximately $250,000.
Indemnification for Officers
and Directors
Our Charter
and Bylaws provide indemnification rights to our directors and officers and permit us to purchase insurance on behalf of any officer,
director, employee or other agent for any liability arising out of that person’s actions as our officer, director, employee
or agent, regardless of whether Delaware law would mandate indemnification. Additionally, we have entered into separate indemnity
agreements with our directors and certain officers to provide additional indemnification benefits, including the right to receive,
in advance, reimbursements for expenses incurred in connection with a defense for which the director or officer is entitled to
indemnification. We believe that the limitation of liability provisions in our Charter, Bylaws and the indemnity agreements will
facilitate our ability to continue to attract and retain qualified individuals to serve as directors and officers.
Conflicts of Interest
The related party
transactions described herein may cause certain conflicts of interests, including that:
| ♦ | we may enter into contracts between us, on
the one hand, and related parties, on the other, that are not as a result of arm’s- length transactions; |
| ♦ | our executive officers and directors that hold
positions of responsibility with related parties may be aware of certain business opportunities that are appropriate for presentation
to us as well as to such other related parties and may present such business opportunities to such other parties; and |
| ♦ | our executive officers and directors that hold
positions of responsibility with related parties may have significant duties with, and spend significant time serving, other entities
and may have conflicts of interest in allocating time. |
HOUSEHOLDING
The SEC permits
companies and intermediaries (such as brokers and banks) to satisfy delivery requirements for proxy statements and annual reports
with respect to two or more stockholders sharing the same address by delivering a single proxy statement and annual report to those
stockholders. This process, which is commonly referred to as “householding,” is intended to reduce the volume of duplicate
information stockholders receive and reduce expenses for companies. Both the Company and some of our intermediaries may be householding
our proxy materials and Annual Report on Form 10-K. Once you have received notice from your broker or another intermediary that
they will be householding materials sent to your address, householding will continue until you are notified otherwise or until
you revoke your consent. Should you wish to receive separate copies of our Annual Report on Form 10-K and proxy statement in the
future, we will promptly deliver a separate copy of each of these documents to you if you send a written or oral request to us
at our address or phone number appearing on the cover of this Proxy Statement, to the attention of the Corporate Secretary. If
you hold your shares through an intermediary that is householding and you want to receive separate copies of our Annual Report
on Form 10-K and proxy statement in the future, you should contact your bank, broker or other nominee record holder.
STOCKHOLDER PROPOSALS
Pursuant to
Rule l4a-8 under the Exchange Act, in order for a stockholder proposal to be included in the Company’s proxy statement for
its 2026 annual meeting, such proposal must be received at the Company’s principal executive offices at 950 17th Street,
Suite 2400, Denver, Colorado 80202, Attention: Corporate Secretary, no later than November 6, 2025, and must comply with additional
requirements established by the SEC. SEC rules set standards for eligibility and specify the types of stockholder proposals that
may be excluded from a proxy statement. In addition, the Company’s Second Amended and Restated Bylaws provide that any stockholder
who would like to have a proposal considered at our 2026 annual meeting of stockholders must submit the proposal to the Secretary
of the Company at the Company’s principal executive offices so that it is received by not earlier than the close of business
on December 16, 2025, and not later than the close of business on January 15, 2026, unless the date of our 2026 annual meeting
is more than 30 days before or more than 60 days after April 15, 2026, in which case the proposal must be received no later than
the 10th day following the day on which public announcement of the date of such meeting is first made by the Company. A copy of
the Company’s Second Amended and Restated Bylaws is available upon request from the Secretary of the Company. Stockholders
who intend to submit a proposal for nomination of persons for election to our Board or a proposal of business at the 2026 annual
meeting (other than matters properly brought under Rule 14a-8 under the Exchange Act and included in the Company’s notice
of meeting) must follow the procedures prescribed in the Company’s Second Amended and Restated Bylaws. No stockholder proposal
was received for inclusion in this Proxy Statement.
Stockholders
who intend to solicit proxies in support of director nominees other than our nominees must provide notice to the Secretary of the
Company that sets forth the information required by Rule 14a-19 of the Exchange Act in accordance with and within the time period
prescribed in the advance notice provisions of our Second Amended and Restated Bylaws.
WHERE YOU CAN FIND
MORE INFORMATION
We file or furnish annual,
quarterly and current reports, proxy statements and other documents with the SEC under the Exchange Act. The SEC also maintains
an internet website at www.sec.gov that contains reports, proxy and information statements and other information regarding
issuers, including us, that file electronically with the SEC.
We also make available free
of charge through our website, www.libertyenergy.com, electronic copies of certain documents that we file with the SEC,
including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically
file such material with, or furnish it to, the SEC.
OTHER MATTERS
As of the
date of this Proxy Statement, the Board does not intend to present any matters other than those described herein at the Annual
Meeting and is unaware of any matters to be presented by other parties. If other matters are properly brought before the meeting
for action by the stockholders, proxies will be voted in accordance with the recommendation of the Board or, in the absence of
such a recommendation, in accordance with the judgment of the proxy holder.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON APRIL 15, 2025:
A
COPY OF THIS PROXY STATEMENT, THE NOTICE OF 2025 ANNUAL MEETING OF STOCKHOLDERS, THE 2025 ANNUAL REPORT TO STOCKHOLDERS AND THE
PROXY CARD ARE AVAILABLE AT HTTP://ASTPROXYPORTAL.COM/AST/21952
IT IS
IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, YOU ARE URGED TO VOTE BY INTERNET,
BY PHONE OR IF YOU HAVE RECEIVED PAPER COPIES OF THE PROXY MATERIALS, BY COMPLETING, SIGNING AND RETURNING THE PROXY IN THE ENCLOSED
POSTAGE-PAID, ADDRESSED ENVELOPE.
| |
By Order of the Board
of Directors,
/s/ R. Sean Elliott
R. Sean Elliott
Chief Legal Officer and Corporate
Secretary
|
Denver, Colorado
[●],
2025
ANNEX A
LIBERTY ENERGY INC.
SECOND AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION
SECOND
AMENDED AND RESTATED
CERTIFICATE
OF INCORPORATION
OF
LIBERTY
ENERGY INC.
Liberty
Energy Inc. (the “Corporation”), a corporation organized and existing under the General Corporation
Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the “DGCL”), hereby certifies
as follows:
1. The
original Certificate of Incorporation of the Corporation (the “Original
Certificate of Incorporation”) was filed with the Secretary of State of the State of Delaware
on December 21, 2016. (the “Certificate
of Incorporation”), amended on January 17, 2018 (the “First Amended and Restated Certificate”), and
further amended on April 19, 2022 (the “Certificate of Amendment”, and together with the First Amended and
Restated Certificate, the “Amended Certificate of Incorporation”).
2. This Second
Amended and Restated Certificate of Incorporation (this “Amended and Restated Certificate
of Incorporation”), which amends and restates and
amends the OriginalAmended Certificate
of Incorporation, has been declared advisable by the board of directors of the Corporation
(the “Board”), duly adopted by the stockholders of the Corporation and duly executed and
acknowledged by the officers of the Corporation in accordance with Sections 103; 228; 242 and 245 of the DGCL.
3. The
OriginalAmended Certificate of
Incorporation is hereby amended and restated in its entirety to read as follows:
FIRST:
The name of the Corporation is Liberty Energy Inc.
SECOND:
The address of its registered office in the State of Delaware is The Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware 19801 in New Castle County; Delaware. The name of its registered agent at such address is The Corporation Trust Company.
THIRD:
The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the DGCL as it currently exists or may hereafter be amended.
FOURTH:
The total number of shares of stock that the Corporation shall have the authority to issue is 800,010,000 shares of stock, classified
as (i) 10,000 shares of preferred stock, par value $0.01 per share (“Preferred Stock”), (ii) 400,000,000
shares of Class A common stock, par value $0.01 per share (“Class A Common Stock”), and (iii) 400,000,000
shares of Class B common stock; par value $0.01 per share (“Class B Common Stock” and, together with
the Class A Common Stock, the “Common Stock”).
| 1. | Provisions
Relating to Preferred Stock. |
a. Preferred
Stock may be issued from time to time in one or more classes or series, the shares of each series to have such designations and
powers, preferences and rights, and qualifications, limitations and restrictions thereof, as are stated and expressed herein and
in the resolution or resolutions providing for the issue of such series adopted by the Board as hereafter prescribed (a “Preferred
Stock Designation”).
b. Subject
to any limitations prescribed by law and the rights of any series of the Preferred Stock then outstanding, if any, authority is
hereby expressly granted to and vested in the Board to authorize the issuance of Preferred Stock from time to time in one or more
classes or series, and with respect to each series of Preferred Stock, to fix and state by the resolution or resolutions from
time to time adopted by the Board providing for the issuance thereof the designation and the powers, preferences, rights, qualifications,
limitations and restrictions relating to each series of Preferred Stock, including, but not limited to, the following:
i. whether
or not the series is to have voting rights, full, special or limited, or is to be without voting rights, and whether or not such
series is to be entitled to vote as a separate class either alone or together with the holders of one or more other classes or
series of stock;
ii. the number of shares to constitute the series and the designations thereof;
iii. the
preferences, and relative, participating, optional or other special rights, if any, and the qualifications, limitations or restrictions
thereof, if any, with respect to any series;
iv. whether
or not the shares of any series shall be redeemable at the option of the Corporation or the holders thereof or upon the happening
of any specified event, and, if redeemable, the redemption price or prices (which may be payable in the form of cash, notes, securities
or other property), and the time or times at which, and the terms and conditions upon which, such shares shall be redeemable and
the manner of redemption;
v. whether
or not the shares of a series shall be subject to the operation of retirement or sinking funds to be applied to the purchase or
redemption of such shares for retirement, and, if such retirement or sinking fund or funds are to be established, the annual amount
thereof, and the terms and provisions relative to the operation thereof;
vi. the
dividend rate, whether dividends are payable in cash, stock of the Corporation or other property, the conditions upon which and
the times when such dividends are payable, the preference to or the relation to the payment of dividends payable on any other
class or classes or series of stock, whether or not such dividends shall be cumulative or noncumulative, and if cumulative, the
date or dates from which such dividends shall accumulate;
vii. the
preferences, if any, and the amounts thereof which the holders of any series thereof shall be entitled to receive upon the voluntary
or involuntary liquidation, dissolution or winding up of, or upon any distribution of the assets of, the Corporation;
viii. whether
or not the shares of any series, at the option of the Corporation or the holder thereof or upon the happening of any specified
event, shall be convertible into or exchangeable for, the shares of any other class or classes or of any other series of the same
or any other class or classes of stock, securities or other property of the Corporation and the conversion price or prices or
ratio or ratios or the rate or rates at which such exchange may be made, with such adjustments, if any, as shall be stated and
expressed or provided for in such resolution or resolutions; and
ix. such
other powers, preferences, rights, qualifications, limitations and restrictions with respect to any series as may to the Board
seem advisable.
c. The
shares of each series of Preferred Stock may vary from the shares of any other series thereof in any or all of the foregoing respects.
| 2. | Provisions
Relating to Common Stock. |
a. Except
as may otherwise be provided in this Amended and Restated Certificate of Incorporation, each share of Common Stock shall have
identical rights and privileges in every respect. Common Stock shall be subject to the express terms of Preferred Stock and any
series thereof. Except as may otherwise be provided in this Amended and Restated Certificate of Incorporation, in a Preferred
Stock Designation or by applicable law, the holders of shares of Common Stock shall be entitled to one vote for each such share
on all matters which to the stockholders are entitled to vote, the holders of shares of Common Stock shall have the exclusive
right to vote for the election of directors and on all other matters upon which the stockholders are entitled to vote, and the
holders of Preferred Stock shall not be entitled to vote at or receive notice of any meeting of stockholders, other than as provided
in the applicable Preferred Stock Designation. Each holder of Common Stock shall be entitled to notice of any stockholders’
meeting in accordance with the bylaws of the Corporation (as in effect at the time in question) and applicable law on all matters
put to a vote of the stockholders of the Corporation. Except as otherwise required in this Amended and Restated Certificate of
Incorporation or by applicable law, the holders of Common Stock shall vote together as a single class on all matters (or, if any
holders of Preferred Stock are entitled to vote together with the holders of Common Stock, the holders of Common Stock and the
Preferred Stock shall vote together as a single class).
b. Notwithstanding
the foregoing, except as otherwise required by applicable law, holders of Common Stock, as such, shall not be entitled to
vote on any amendment to this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation)
that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series
are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to
this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation) or pursuant to the
DGCL.
c. Subject
to the prior rights and preferences, if any, applicable to shares of Preferred Stock or any series thereof, the holders of shares
of Class A Common Stock shall be entitled to receive ratably in proportion to the number of shares of Class A Common Stock held
by them such dividends and distributions (payable in cash, stock or otherwise), if any, as may be declared thereon by the Board
at any time and from time to time out of any funds of the Corporation legally available therefor. Dividends and other distributions
shall not be declared or paid on the Class B Common Stock unless (i) the dividend consists of shares of Class B Common Stock or
of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class B Common
Stock paid proportionally with respect to each outstanding share of Class B Common Stock and (ii) a dividend consisting of shares
of Class A Common Stock or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for
shares of Class A Common Stock on equivalent terms is simultaneously paid to the holders of Class A Common Stock. If dividends
are declared on the Class A Common Stock or the Class B Common Stock that are payable in shares of Common Stock, or securities
convertible into, or exercisable or exchangeable for Common Stock, the dividends payable to the holders of Class A Common Stock
shall be paid only in shares of Class A Common Stock (or securities convertible into, or exercisable or exchangeable for Class
A Common Stock), the dividends payable to the holders of Class B Common Stock shall be paid only in shares of Class B Common Stock
(or securities convertible into, or exercisable or exchangeable for Class B Common Stock), and such dividends shall be paid in
the same number of shares (or fraction thereof) on a per share basis of the Class A Common Stock and Class B Common Stock, respectively
(or securities convertible into, or exercisable or exchangeable for the same number of shares (or fraction thereof) on a per share
basis of the Class A Common Stock and Class B Common Stock, respectively). In no event shall the shares of either Class A Common
Stock or Class B Common Stock be split, divided, or combined unless the outstanding shares of the other class shall be proportionately
split, divided or combined.
d. In
the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Corporation, after distribution in full
of the preferential amounts, if any, to be distributed to the holders of shares of Preferred Stock or any series thereof, the
holders of shares of Class A Common Stock shall be entitled to receive all of the remaining assets of the Corporation available
for distribution to its stockholders, ratably in proportion to the number of shares of Common Stock held by them. The holders
of shares of Class B Common Stock, as such, shall not be entitled to receive any assets of the Corporation in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation. A dissolution, liquidation
or winding-up of the Corporation, as such terms are used in this paragraph (d), shall not be deemed to be occasioned by or to
include any consolidation or merger of the Corporation with or into any other corporation or corporations or other entity or a
sale, lease, exchange or conveyance of all or a part of the assets of the Corporation.
Shares
of Class B Common Stock shall be exchangeable for shares of Class A Common Stock on the terms and subject to the conditions set
forth in the Amended and Restated Limited Liability Agreement of Liberty Oilfield Services New HoldCo LLC, as it may be amended,
restated, supplemented and otherwise modified from time to time (the “LLC Agreement”).
The Corporation will at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock,
solely for the purpose of issuance upon exchange of the outstanding shares of Class B Common Stock for Class A Common Stock pursuant
to the LLC Agreement, such number of shares of Class A Common Stock that shall be issuable upon any such exchange pursuant to
the LLC Agreement; provided that nothing contained herein shall be construed to preclude the Corporation from satisfying its obligations
in respect of any such exchange of shares of Class B Common Stock pursuant to the LLC Agreement by delivering to the holder of
shares of Class B Common Stock upon such exchange, cash in lieu of shares of Class A Common Stock in the amount permitted by and
provided in the LLC Agreement or shares of Class A Common Stock which are held in the treasury of the Corporation. All shares
of Class A Common Stock that shall be issued upon any such exchange will, upon issuance in accordance with the LLC Agreement,
be validly issued, fully paid and non-assessable.
e. The
number of authorized shares of Class A Common Stock, Class B Common Stock or Preferred Stock may be increased or decreased (but
not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power
of the outstanding shares of stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2)
of the DGCL (or any successor provision thereto), and no vote of the holders of Class A Common Stock, Class B Common Stock or
Preferred Stock voting separately as a class shall be required therefor.
f. No
stockholder shall, by reason of the holding of shares of any class or series of capital stock of the Corporation, have any preemptive
or preferential right to acquire or subscribe for any shares or securities of any class, whether now or hereafter authorized,
which may at any time be issued, sold or offered for sale by the Corporation, unless specifically provided for in the terms of
a series of Preferred Stock.
FIFTH:
The business and affairs of the Corporation shall be managed by or under the direction of the Board. Until
the first date on which R/C IV Liberty Oilfield Services Holdings, L.P., a Delaware limited partnership
(“R/C Holdings”), R/C Energy IV Direct Partnership, L.P., a Delaware limited
partnership (“R/C Partnership” and, together with R/C Holdings,
“Riverstone”), Laurel Road, LLC, a California limited liability company
(“Laurel I”), Laurel Road II, LLC, a California limited liability company
(“Laurel II” and, together with Laurel I,
“Laurel”), Concentric Equity Partners II, L.P., a Delaware limited
partnership, BRP Liberty, LLC, a Georgia limited liability company, Bay Resource Partners, L.P. a Delaware limited
partnership, Bay II Resource Partners, L.P., a Delaware limited partnership, Thomas E. Claugus, GMT Exploration, LLC, a
Georgia limited liability company, SH Ventures LOS, LLC, a Delaware limited liability company (together with SH Ventures LOS,
LLC, Concentric Equity Partners II, L.P.-Liberty Series, Bay Resource Partners, L.P., Bay II Resource Partners, L.P., Thomas
E. Claugus, GMT Exploration, LLC, SH Ventures LOS, LLC, the “Spruce Holders”)
together with Riverstone, Laurel and each of their respective successors and affiliates who are assignees pursuant to Section
5.9 of the Stockholders Agreement (as defined below), the “Principal
Stockholders”) no longer individually or collectively beneficially own (or otherwise have the right to
vote or direct the vote of) more than 50% of the outstanding shares of Common Stock (the “Trigger
Date”), the directors, other than those who may be elected by the holders of any series of Preferred
Stock specified in the related Preferred Stock Designation, shall consist of a single class, with the initial term of office
to expire at the 2019 annual meeting of stockholders, and each director shall hold office until his successor shall have been
duly elected and qualified, subject, however, to such director’s earlier death, resignation, disqualification or
removal. For purposes of this Amended and Restated Certificate of Incorporation, beneficial ownership of shares shall be
determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended. At each annual
meeting of stockholders, directors elected to succeed those directors whose terms then expire shall be elected for a term of
office to expire at the next succeeding annual meeting of stockholders after their election, with each director to hold
office until his successor shall have been duly elected and qualified, subject, however, to such director’s earlier
death, resignation, disqualification or removal.The directors, other than
those who may be elected by the holders of any series of Preferred Stock specified in the related Preferred Stock
Designation, shall be divided as follows:
On
and after the Trigger Date, the directors, other than those who may be elected by the holders of any series of Preferred Stock
specified in the related Preferred Stock Designation, shall be divided, with respect to the time for which they severally hold
office, into three classes, as nearly equal in number as is reasonably possible, with the initial term of office of the first
class to expire at the first annual meeting of stockholders following the Trigger Date, the initial term of office of the second
class to expire at the second annual meeting of stockholders following the Trigger Date, and the initial term of office of the
third class to expire at the third annual meeting of stockholders following the Trigger Date, with each director to hold office
until his successor shall have been duly elected and qualified, subject, however, to such director’s earlier death, resignation,
disqualification or removal, and the Board shall be authorized to assign members of the Board, other than those directors who
may be elected by the holders of any series of Preferred Stock, to such classes at the time such classification becomes effective.
At each annual meeting of stockholders following the Trigger Date, directors elected to succeed those directors whose terms then
expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election,
with each director to hold office until his successor shall have been duly elected and qualified, subject, however, to such director’s
earlier death, resignation, disqualification or removal.
| 1. | Commencing
with the election of directors at the 2026 annual meeting of stockholders, there shall
be two classes of directors: (i) the directors in the class elected at the 2024 annual
meeting of stockholders and having a term that expires at the 2027 annual meeting of
stockholders, and (ii) the directors in the class elected at the 2025 annual meeting
of stockholders and having a term that expires at the 2028 annual meeting of stockholders.
Directors elected at the 2026 annual meeting of stockholders shall be elected for a one-year
term expiring at the 2027 annual meeting of stockholders. |
| 2. | Commencing
with the election of directors at the 2027 annual meeting of stockholders, there shall
be one class of directors: those directors elected at the 2025 annual meeting of
stockholders and having a term that expires at the 2028 annual meeting of stockholders. Directors elected at the 2027 annual meeting
of stockholders shall be elected for a one-year term expiring at the 2028 annual meeting of stockholders. |
| 3. | From
and after the election of directors at the 2028 annual meeting of stockholders, the Board
of Directors shall cease to be classified and the directors elected at the 2028 annual
meeting of stockholders (and each annual meeting of stockholders thereafter) shall be
elected for a term expiring at the following annual meeting of stockholders. |
Subject
to applicable law and the rights of the holders of any series of Preferred Stock then outstanding and
the then-applicable terms of the Stockholders Agreement, among the Corporation and the Principal Stockholders, as it may
be amended, restated, supplemented and otherwise modified from time to time (the “Stockholders Agreement”),,
any newly created directorship that results from an increase in the number of directors or any vacancy on the Board
that results from the death, resignation, disqualification or removal of any director or from any other cause shall, unless otherwise
required by law or by resolution of the Board, be filled (A) prior to the Trigger Date, by
the affirmative vote of a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining
director, or the affirmative vote of the holders of a majority of the voting power of the outstanding shares of stock of the Corporation
entitled to vote generally for the election of directors, voting together as a single class and acting at a meeting of the stockholders
or by written consent (if permitted) in accordance with the DGCL, this Amended and Restated Certificate of Incorporation and the
bylaws of the Corporation, and (B) on or after the Trigger Date, solely by the affirmative vote of a majority
of the total number of directors then in office, even if less than a quorum, or by a sole remaining director, and shall not be
filled by the stockholders. Any director elected to fill a newly created directorship that results
from an increase in the number of directors shall be elected for a term expiring at the next annual meeting of stockholders and
to hold office until his successor shall have been duly elected and qualified, subject, however, to such director’s earlier
death, resignation, disqualification or removal. Any director elected to fill a vacancy not resulting from an increase
in the number of directors shall hold office for the remaining term of his predecessor. No decrease in the number of authorized
directors constituting the Board shall shorten the term of any incumbent director.
Until
the Trigger Date, subject to the rights of the holders of shares of any series of Preferred Stock, if any, to elect additional
directors pursuant to this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation thereunder)
and the then-applicable terms of the Stockholders Agreement, any director may be removed at any time, either for or without cause,
upon the affirmative vote of the holders of a majority of the voting power of the outstanding shares of stock of the Corporation
entitled to vote generally for the election of directors, voting together as a single class and acting at a meeting of the stockholders
or by written consent (if permitted) in accordance with the DGCL, this Amended and Restated Certificate of Incorporation and the
bylaws of the Corporation.
On
and after the Trigger Date, subjectSubject
to the rights of the holders of shares of
any series of Preferred Stock, if any, to elect additional directors pursuant to this Amended and Restated Certificate of Incorporation
(including any Preferred Stock Designation thereunder) and the then-applicable terms of the
Stockholders Agreement,), any director may be removed from
office only for cause, upon the affirmative vote of the holders
of at least 66 2/3%a majority
of the outstanding shares of stock of the Corporation entitled to vote generally for the election of directors, acting at a meeting
of the stockholders or by written consent (if permitted) in accordance with the DGCL, this Amended and Restated Certificate of
Incorporation and the bylaws of the Corporation. Any director, or their successor, serving in
a class that was elected for a three-year term at the annual meetings of stockholders held from 2023 through 2025 may only be
removed for cause. All other directors may be removed either with or without cause. Except as applicable law otherwise
provides, cause for the removal of a director shall be deemed to exist only if the director whose removal is proposed: (1) has
been convicted of a felony by a court of competent jurisdiction and that conviction is no longer subject to direct appeal; (2)
has been found to have been guilty of willful misconduct in the performance of his duties to the Corporation in any matter of
substantial importance to the Corporation by a court of competent jurisdiction; or (3) has been adjudicated by a court of competent
jurisdiction to be mentally incompetent, which mental incompetency directly affects his ability to serve as a director of the
Corporation.
Subject
to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, if any, the number
of directors shall be fixed from time to time exclusively pursuant to a resolution adopted by a majority of the Board. Unless
and except to the extent that the bylaws of the Corporation so provide, the election of directors need not be by written ballot.
SIXTH:
Prior to the Trigger Date, any action required or permitted to be taken at any annual meeting
or special meeting of the stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote
of stockholders, if a consent or consents in writing, setting forth the action so taken, is or are signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. On and after the Trigger Date, subjectSubject to the rights of holders of any series of Preferred Stock with respect to such series of Preferred Stock, any action
required or permitted to be taken by the stockholders of the Corporation must be taken at a duly held annual or special meeting
of stockholders and may not be taken by any consent in writing of such stockholders.
SEVENTH:
Special meetings of stockholders of the Corporation may be called only by the Chief Executive Officer, the Chairman of the Board
or the Board pursuant to a resolution adopted by a majority of the total number of directors that the Corporation would have if
there were no vacancies; provided, however, that prior to the Trigger Date, special
meetings of the stockholders of the Corporation shall also be called by the Secretary of the Corporation at the request of Riverstone..
The authorized person(s) calling a special meeting may fix the date, time and place, if any, of such meeting. On
and after the Trigger Date, exceptExcept as otherwise required by law
and subject to the rights of the holders of any series of Preferred Stock, the stockholders of the Corporation do not have the
power to call a special meeting of stockholders of the Corporation. The Board may postpone, reschedule or cancel any special meeting
of the stockholders previously scheduled by the Board.
EIGHTH:
In furtherance of, and not in limitation of, the powers conferred by the laws of the State of Delaware, the Board is
expressly authorized to adopt, amend or repeal the bylaws of the Corporation without any action on the part of the
stockholders of the Corporation; provided that, in addition to any vote of the holders of any class or series of stock of the
Corporation required by law or by this Amended and Restated Certificate of Incorporation, any bylaw adopted or amended by the
Board, and any powers thereby conferred, may be amended, altered or repealed (A) prior
to the Trigger Date, by the affirmative vote of holders of not less than
50%a majority in voting power of the then-outstanding shares of
stock entitled to vote thereon, voting together as a single class, and (B) on and after
the Trigger Date, by the affirmative vote of holders of not less than 66 2/3% in voting power of the then-outstanding shares
of stock entitled to vote thereon, voting together as a single class. No bylaws hereafter made or adopted,
nor any repeal of or amendment thereto, shall invalidate any prior act of the Board that was valid at the time it was
taken.
NINTH:
No director or officer of the Corporation shall be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director or officer, as applicable,
except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as it now exists. In
addition to the circumstances in which a director or officer, as applicable, of the
Corporation is not personally liable as set forth in the preceding sentence, a director or officer of the Corporation shall not be liable to the fullest extent permitted by any amendment to the DGCL hereafter enacted
that further limits the liability of a director or officer.
Any
amendment, repeal or modification of this Article Ninth shall be prospective only and shall not affect any limitation on liability
of a director or officer for acts or omissions occurring prior to the date of such
amendment, repeal or modification.
TENTH:
Reserved. To the fullest extent permitted by applicable
law, the Corporation, on behalf of itself and its subsidiaries, renounces any interest or expectancy of the Corporation and its
subsidiaries in, or in being offered an opportunity to participate in, any business opportunities that are from time to time presented
to any of the Principal Stockholders or any of their respective affiliates or any of their respective agents, shareholders, members,
partners, directors, officers, employees, affiliates or subsidiaries (other than the Corporation and its subsidiaries), including
any director or officer of the Corporation who is also an agent, shareholder, member, partner, director, officer, employee, affiliate
or subsidiary of any Principal Stockholder (each, a “Business Opportunities Exempt Party”),
even if the business opportunity is one that the Corporation or its subsidiaries might reasonably be deemed to have pursued or
had the ability or desire to pursue if granted the opportunity to do so, and no Business Opportunities Exempt Party shall have
any duty to communicate or offer any such business opportunity to the Corporation or be liable to the Corporation or any of its
subsidiaries or any stockholder, including for breach of any fiduciary or other duty, as a director or officer or controlling
stockholder or otherwise, and the Corporation shall indemnify each Business Opportunities Exempt Party against any claim that
such person is liable to the Corporation or its stockholders for breach of any fiduciary duty, by reason of the fact that such
person (i) participates in, pursues or acquires any such business opportunity, (ii) directs any such business opportunity to another
person or (iii) fails to present any such business opportunity, or information regarding any such business opportunity, to the
Corporation or its subsidiaries, unless, in the case of a person who is a director or officer of the Corporation, such business
opportunity is expressly offered to such director or officer in writing solely in his capacity as a director or officer of the
Corporation.
Neither
the amendment nor repeal of this Article Tenth, nor the adoption of any provision of this Amended and Restated Certificate of
Incorporation or the bylaws of the Corporation, nor, to the fullest extent permitted by Delaware law, any modification of law,
shall eliminate, reduce or otherwise adversely affect any right or protection of any person granted pursuant hereto existing at,
or arising out of or related to any event, act or omission that occurred prior to, the time of such amendment, repeal, adoption
or modification (regardless of when any proceeding (or part thereof) relating to such event, act or omission arises or is first
threatened, commenced or completed).
If
any provision or provisions of this Article Tenth shall be held to be invalid, illegal or unenforceable as applied to any circumstance
for any reason whatsoever, (a) the validity, legality and enforceability of such provisions in any other circumstance and of the
remaining provisions of this Article Tenth (including, without limitation, each portion of any paragraph of this Article Tenth
containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and (b) to the fullest extent possible, the provisions of this Article Tenth
(including, without limitation, each such portion of any paragraph of this Article Tenth containing any such provision held to
be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees
and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest
extent permitted by applicable law.
This
Article Tenth shall not limit any protections or defenses available to, or indemnification or advancement rights of, any director
or officer of the Corporation under this Amended and Restated Certificate of Incorporation, the bylaws of the Corporation or applicable
law. To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring any interest in any securities
of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article Tenth.
ELEVENTH:
The Corporation shall not be governed by orand
subject to the provisions of Section 203 of the DGCL as now in effect or hereafter amended, if
and for so long as Section 203 or any successor statute thereto by its terms shall apply
to the Corporation.
TWELFTH:
The Corporation shall have the right, subject to any express provisions or restrictions contained in this Amended and Restated
Certificate of Incorporation or bylaws of the Corporation, from time to time, to amend this Amended and Restated Certificate of
Incorporation or any provision hereof in any manner now or hereafter provided by applicable law, and all rights and powers of
any kind conferred upon a director or stockholder of the Corporation by this Amended and Restated Certificate of Incorporation
or any amendment hereof are subject to such right of the Corporation.
Notwithstanding
any other provision of this Amended and Restated Certificate of Incorporation or the bylaws of the Corporation (and in addition
to any other vote that may be required by applicable law or,
this Amended and Restated Certificate of Incorporation), prior to
or the Trigger Date,bylaws
of the Corporation), the affirmative vote of the holders of a majority in voting power of the outstanding shares of
stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required to amend, alter or repeal
any provision of this Amended and Restated Certificate of Incorporation.
THIRTEENTH:
Reserved.Notwithstanding any other provision of
this Amended and Restated Certificate of Incorporation or the bylaws of the Corporation (and in addition to any other vote that
may be required by applicable law, this Amended and Restated Certificate of Incorporation or the bylaws of the Corporation), on
and after the Trigger Date, the affirmative vote of the holders of at least 66 2/3% in voting power of the outstanding shares
of stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required to amend, alter or
repeal any provision of this Amended and Restated Certificate of Incorporation.
FOURTEENTH:
Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware
shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding
brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer,
employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a
claim against the Corporation or any director or officer or other employee of the Corporation arising pursuant to any provision
of the DGCL, this Amended and Restated Certificate of Incorporation or the Corporation’s bylaws, or (iv) any action asserting
a claim against the Corporation or any director or officer or other employee of the Corporation governed by the internal affairs
doctrine, in each such case subject to said Court of Chancery having personal jurisdiction over the indispensable parties named
as defendants therein. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation
shall be deemed to have notice of and consented to the provisions of this Article Fourteenth.
If
any provision or provisions of this Article Fourteenth shall be held to be invalid, illegal or unenforceable as applied to any
person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legal
and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article Fourteenth) including,
without limitation, each portion of any sentence of this Article Fourteenth containing any such provision held to be invalid,
illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision
to other persons or entities and circumstances shall not in any way be affected or impaired thereby.
To
the fullest extent permitted by law, if any action the subject matter of which is within the scope of the first paragraph of this
Article Fourteenth is filed in a court other than a court located within the State of Delaware (a “Foreign Action”)
in the name of any stockholder, such stockholder shall be deemed to have consented to (A) the personal jurisdiction of the state
and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the
first paragraph of this Article Fourteenth) an “FSC Enforcement Action”) and (B) having service of process
made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign
Action as agent for such stockholder.
IN
WITNESS WHEREOF, the undersigned has executed this Second Amended and Restated
Certificate of Incorporation as of this 17th day of January,
2018April 15, 2025.
| LIBERTY
ENERGY INC. |
| | |
|
| By: |
|
| Name:
Michael StockR. Sean Elliott |
| Title:
Chief Financial Legal
Officer |
[Signature
Page to Second Amended and Restated Certificate of Incorporation]
PRELIMINARY
PROXY CARD SUBJECT TO COMPLETION
ANNUAL
MEETING OF STOCKHOLDERS OF
LIBERTY
ENERGY INC.
Tuesday,
April 15, 2025
GO GREEN
| |
e-Consent
makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents
online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access. |
|
NOTICE
OF INTERNET AVAILABILITY OF PROXY MATERIAL:
The Notice of Meeting, proxy statement and proxy card
are available at http://www.astproxyportal.com/ast/21952
Please
sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
 |
Please
detach along perforated line and mail in the envelope provided. |
|
|
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE NOMINEES LISTED IN PROPOSAL 1,
"FOR" PROPOSALS 2, 3, 5, 6, 7, 8, 9 AND "1 YEAR" FOR PROPOSAL 4.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE ☒
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FOR |
AGAINST |
ABSTAIN |
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| 2. |
Advisory vote to approve
the compensation of the Company’s named executive officers. |
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☐ |
☐ |
☐ |
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FOR |
AGAINST |
ABSTAIN |
|
| 3. |
Ratification of appointment of the Company’s
independent registered public accounting firm. |
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☐ |
☐ |
☐ |
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| |
|
1 YEAR |
2 YEARS |
3 YEARS |
ABSTAIN |
|
| 4. |
Advisory vote to determine the frequency of future
advisory votes to approve the compensation of the Company’s named executive officers. |
☐ |
☐ |
☐ |
☐ |
|
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FOR |
AGAINST |
ABSTAIN |
|
| 5. |
Approve
an amendment to the Company’s certificate of incorporation to declassify the board of directors. |
|
☐ |
☐ |
☐ |
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| |
|
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FOR |
AGAINST |
ABSTAIN |
|
| 6. |
Approve an amendment to the Company’s certificate
of incorporation to remove the 66 2/3% supermajority vote requirements to amend, alter, or repeal the Company’s certificate
of incorporation and bylaws and to remove directors from office. |
|
☐ |
☐ |
☐ |
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FOR |
AGAINST |
ABSTAIN |
|
| 7. |
Approve
an amendment to the Company’s certificate of incorporation to limit the liability of certain officers. |
|
☐ |
☐ |
☐ |
|
| |
|
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FOR |
AGAINST |
ABSTAIN |
|
| 8. |
Approve an amendment to the Company’s certificate
of incorporation to delete the waiver of Section 203 of the Delaware General Corporation Law. |
|
☐ |
☐ |
☐ |
|
| |
FOR |
AGAINST |
ABSTAIN |
|
| 9. |
Approve
miscellaneous amendments to clarify and update the Company’s certificate of incorporation. |
|
☐ |
☐ |
☐ |
|
| TO INCLUDE ANY COMMENTS, USE THE COMMENTS
BOX ON THE REVERSE SIDE OF THIS CARD. |
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| IMPORTANT
NOTICE |
| YOUR
VOTE IS IMPORTANT. PLEASE SIGN, DATE AND RETURN YOUR PROXY AS SOON AS POSSIBLE. BY DOING SO, YOU MAY SAVE LIBERTY ENERGY INC.
THE EXPENSE OF ADDITIONAL SOLICITATION. |
| |
| NOTE:
In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting
or an adjournment or postponement thereof. |
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| MARK “X”
HERE IF YOU PLAN TO ATTEND THE VIRTUAL MEETING ☐ |
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Signature of Stockholder
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Date:
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Signature of Stockholder
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|
Date:
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Note:
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Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please
sign in partnership name by authorized person.
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LIBERTY
ENERGY INC.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
The
undersigned hereby appoint(s) Ron Gusek, Michael Stock and R. Sean Elliott, or any one of them, attorneys with full power of substitution
and revocation to each, for and in the name of the undersigned with all the powers the undersigned would possess if personally
present, to vote the shares of the undersigned in Liberty Energy Inc. as indicated on the proposals referred to on the reverse
side hereof at the annual meeting of its stockholders to be held virtually via live webcast at https://web.lumiconnect.com/245867901
(password: liberty2025) on Tuesday, April 15, 2025 at 9:00 a.m. Mountain Time and at any adjournments or postponements thereof,
and in their or his discretion upon any other matter which may properly come before said meeting.
THE
SHARES REPRESENTED BY THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER.
IF NO SPECIFIC DIRECTION IS GIVEN AS TO THE PROPOSALS ON THE REVERSE SIDE, THIS PROXY WILL BE VOTED "FOR" THE NOMINEES LISTED
IN PROPOSAL 1 AND "FOR" PROPOSALS 2, 3, 5, 6, 7, 8, 9 AND “1 YEAR” FOR PROPOSAL 4. PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY.
This
card also constitutes voting instructions to the trustees under the Liberty Energy Inc. savings plans to vote, in person or by
proxy, the proportionate interest of the undersigned in the shares of Common Stock of Liberty Energy Inc. held by the trustees
under the plans, as described in the proxy statement.
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(Continued
and to be signed on the reverse side) |
| COMMENTS: |
