The committee has met with our independent auditor and discussed the overall scope and plans for their audit. The committee met with the independent auditor, with and without management present, to discuss the independent auditor’s opinion about the effectiveness of Par’sPar Pacific’s internal control over financial reporting. The committee also discussed with the independent auditor matters required to be discussed with audit committees under generally accepted auditing standards, including, among other things, matters related to the conduct of the audit of Par’sPar Pacific’s consolidated financial statements and the matters required to be discussed by the statement on Auditing Standards No. 1301, Communication with Audit Committees, as adopted by the Public Company Accounting Oversight Board ("PCAOB"(“PCAOB”). and the SEC.
Our independent auditor also provided to the committee the written disclosures and the letter required by applicable standardsrequirements of the PCAOB regarding the independent auditor’s communications with the committee concerning independence, and the committee discussed with the independent auditor its independence. When considering Deloitte & Touche’s independence, the committee considered the non-audit services provided to Par Pacific by the independent auditor and concluded that such services are compatible with maintaining the auditor’s independence.
L. Melvin Cooper
The approval of the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 20192021 requires the affirmative vote of the holders of a majority of the shares representedpresent at the meeting in person or represented by proxy and entitled to vote. As a result, abstentions will have the same practical effect as votes against this proposal. Because brokers generally have discretionary authority to vote on the ratification of our independent auditors, broker non-votes are generally not expected to result from the vote on this proposal. For the approval of the ratification of the appointment of Deloitte & Touche LLP, you may vote “FOR” or “AGAINST” or abstain from voting.
Proposal 3
APPROVAL OF 2019AN AMENDMENT TO THE AMENDED AND RESTATED PAR PACIFIC HOLDINGS, INC.
MANAGEMENT STOCK PURCHASE 2012 LONG-TERM INCENTIVE PLAN
General
Stockholders are being asked to approve the 2019 Par Pacific Holdings, Inc. Management Stock Purchase Plan (the “MSPP”), described below. The MSPP was adopted byIn 2018, our Compensation Committee and Board of Directors on February 26, 2019 and will become effective following stockholder approval at this Annual Meeting.
The MSPP is intended to provide executive management with an opportunity to receive restricted stock units (“RSUs”) by converting a portion of their cash bonus compensation into RSUs (“Deferred RSUs”) and receiving awards of matching RSUs, the amount of which are determined by the amount of compensation converted (“Matching RSUs”). A Deferred RSU and a Matching RSU each represents a right to receive one share of the Company’s common stock in the future, subject to the terms and conditions of the MSPP, including, but not limited to, vesting requirements. Shares of common stock issued pursuant to awards of Deferred RSUs and Matching RSUs will be issued from the shares reserved for issuance understockholders approved the Second Amended and Restated Par Pacific Holdings, Inc. 2012 Long TermLong-Term Incentive Plan (Second Restatement Effective as of February 27, 2018) (the “2012 LTIP”). The 2012 LTIP provides for a variety of equity-based awards, described in more detail below, including restricted stock, stock options, restricted stock units, and other stock-based awards. In March 2021, the Board, based upon the recommendation of the Compensation Committee (the “Committee”), approved and adopted the First Amendment to the Second Amended and Restated Par Pacific Holdings, Inc. 2012 Long-Term Incentive Plan (the “LTIP”“LTIP Amendment”).
We believe that, subject to the MSPP is a key retention pool that will benefit allapproval of our stockholders. Specifically, we believestockholders on May 4, 2021.
The Amendment and Its Purpose
The LTIP Amendment authorizes an additional 3,000,000 shares of our common stock to be available for issuance with respect to awards under the MSPP will enable us to: (i) provide executive management with a convenient means2012 LTIP, and the number of acquiring additional equity interests; (ii) enhance executive management’s senseshares under the 2012 LTIP that may be awarded as incentive stock options is increased by 1,500,000. A copy of participationthe LTIP Amendment is attached hereto as Appendix A.
The 2012 LTIP is intended to promote the long-term success of the Company for the benefit of our stockholders through stock-based compensation by aligning the personal interest of participants in the Company; and (iii) provide incentives for continued employment. The MSPP will also further align the interests of executive management2012 LTIP with those of our stockholders through increased stock ownership.stockholders. The 2012 LTIP is designed to allow participants to participate financially in the Company’s future, as well as enabling us to attract and retain talented individuals.
The Committee and our Board approvedbelieve that the MSPP based upon2012 LTIP is a recommendationkey aspect of our compensation strategy. By increasing the aggregate number of shares that may be issued under the 2012 LTIP, the Company will have the flexibility needed to keep pace with our competitors and to effectively recruit, motivate and retain the caliber of employees and directors essential for our success, particularly in connection with our acquisition strategy. While we are cognizant of the Compensation Committee. Inpotential dilutive effect of compensatory share awards, we also recognize the significant motivational, retention and performance benefits that are achieved from making its determination,awards under the Compensation Committee and Board considered various factors, including2012 LTIP.
The LTIP Amendment increases the percentagemaximum number of companies in similar industriesshares of common stock that maintainmay be issued under the 2012 LTIP by 3,000,000 shares. If approved by our stockholders, a managementtotal of 9,000,000 shares of common stock purchase planwill be authorized for issuance under the 2012 LTIP, of which 4,500,000 shares may be awarded as incentive stock options. As of March 1, 2021, there were approximately 505,983 shares of common stock available for the grant of future awards under the 2012 LTIP, subject to adjustment under the 2012 LTIP.
The LTIP Amendment does not otherwise modify the material terms of the 2012 LTIP, and the desireexpiration date of the 2012 LTIP shall remain the same, which is February 27, 2028. All awards with respect to align management’s intereststhe 3,000,000 shares added by the LTIP Amendment must be granted prior to the plan’s expiration date. If our stockholders do not
approve the LTIP Amendment, the 2012 LTIP will remain in full force and effect with thoseapproximately 505,983 shares available for grant.
Highlights of the 2012 LTIP
The 2012 LTIP includes several provisions that we believe promote best practices by reinforcing the alignment of equity compensation arrangements for nonemployee directors, officers, and employees and stockholders’ interests. These provisions include, but are not limited to, the following:
No Discounted Awards. Awards that have an exercise price cannot be granted with an exercise price less than the fair market value on the grant date.
No Repricing Without Stockholder Approval. We cannot, without stockholder approval, reduce the exercise price of an award, except for adjustments in connection with a Company recapitalization, and at any time when the exercise price of an award is above the market value of our shareholders throughcommon stock, we cannot, without stockholder approval, cancel and re-grant or exchange such award for cash, other awards or a new award at a lower exercise price.
No Evergreen Provision. There is no evergreen feature under which the useshares of long-term equity compensation.common stock authorized for issuance under the 2012 LTIP can be automatically replenished.
SummaryNo Automatic Grants. The 2012 LTIP does not provide for “reload” or other automatic grants to recipients.
No Transferability. Awards generally may not be transferred, except by will or the laws of descent and distribution or pursuant to a qualified domestic relations order, unless approved by the Committee.
No Tax Gross-Ups. The 2012 LTIP does not provide for any tax gross-ups.
No liberal change in control definition. The change in control definition contained in the 2012 LTIP is not a “liberal” definition that would be activated on mere stockholder approval of a transaction.
“Double-trigger” change in control vesting. If awards granted under the 2012 LTIP are assumed by a successor in connection with a change in control of the MSPP
This section summaries certain principal featuresCompany, such awards will not automatically vest and pay out solely as a result of the MSPP. Stockholders are urgedchange in control.
Limitation on amendments. No amendments to read the actual text2012 LTIP may be made without stockholder approval if any such amendment would materially increase the number of shares reserved or the per-participant award limitations under the 2012 LTIP, diminish the prohibitions on repricing stock options or stock appreciation rights, or otherwise constitute a material change requiring stockholder approval under applicable laws, policies or regulations or the applicable listing or other requirements of the MSPP,principal exchange on which is set forth in Appendix 1 to this proxy statement and incorporatedthe Company’s shares are traded.
Administered by reference herein.
Administration
an independent committee. The MSPP2012 LTIP will be administered by the Compensation Committee, which is comprised entirely of independent directors.
Clawbacks. Awards based on the satisfaction of financial metrics that are subsequently reversed, due to a financial statement restatement or reclassification, are subject to forfeiture.
Shares Subject to the 2012 LTIP
If the LTIP Amendment is approved by our stockholders, the maximum number of shares of common stock that may be issued with respect to awards under the 2012 LTIP will have full discretionary authoritybe 9,000,000. To the extent that an award terminates or is canceled prior to construe and interpret the provisionsvesting of the MSPP andaward, or if an award is forfeited, the powershares subject to make factual determinationsthe award may be used again with respect to new awards granted under the MSPP, including the power to determine the rights or eligibility of any person and the amount of any benefits to which any participant is entitled, as well as to remedy any ambiguities, inconsistencies or omissions.2012 LTIP.
EligibilityAdministration
The employees of the Company who2012 LTIP will eligiblecontinue to participate in the MSPP are named executive officers and other management employees selectedbe administered by the CompensationCommittee. The Committee to participate. Awards to participants underhas the MSPP will befull authority, subject to the terms of individual award agreements with terms deemedthe 2012 LTIP, to establish, amend, suspend, or waive such restrictions and conditions as it shall deem appropriate for the proper administration of the 2012 LTIP, to designate participants under the 2012 LTIP, to determine the number of shares subject to awards, to determine the type or types of awards to be appropriategranted to a participant, and to determine the terms and conditions of any award. The Committee may, however, authorize any one or more of its members or an officer of the Company to execute and deliver documents on behalf of the Committee, or delegate to an officer the authority to make certain decisions under the 2012 LTIP. We intend to register an additional 3,000,000 shares of common stock authorized by the CompensationLTIP Amendment and reserved for issuance under the 2012 LTIP on Form S-8 upon approval of the LTIP Amendment by our stockholders.
Eligibility
All employees, consultants, and directors of the Company and its affiliates that perform services for us are eligible to be granted awards under the 2012 LTIP. The selection of which eligible individuals will receive awards is within the sole discretion of the Committee.
ConversionTerm of Annual Incentive Paymentthe 2012 LTIP
The term of the 2012 LTIP will expire on the earlier of (1) the date it is terminated by our Board; (2) the date all shares available for issuance under the 2012 LTIP have been issued and all restrictions on such shares under the 2012 LTIP have lapsed; and (3) February 27, 2028.
Limitations on Awards Granted to Recipient
No recipient may be granted options or stock appreciation rights (i) during any calendar year prior to December 31, 2015 with respect to more than 3,500,000 shares of common stock, and (ii) during any calendar year beginning after January 1, 2016, with respect to 350,000 shares. No recipient may be granted restricted stock
awards, restricted stock unit awards, performance awards or other stock-based awards that are denominated in shares of common stock during any calendar year with respect to more than 250,000 shares of common stock. The maximum aggregate cash payout (including restricted stock units, stock appreciation rights, performance awards, other stock-based awards paid out in cash or cash awards) that may be made to any Participant with respect to awards granted (i) during any calendar year prior to December 31, 2015 shall be $8,000,000 and (ii) during any calendar year beginning after January 1, 2016, shall be $2,500,000. With respect to any option or stock appreciation right granted to a participant that is canceled, the number of shares of common stock subject to such option or stock appreciation right shall continue to count against the maximum number of shares of common stock that may be the subject of options or stock appreciation right granted to such participant hereunder to the extent such was required in accordance with Section 162(m) of the Tax Code.
In addition, no director of the Company, except the chairman and the vice chairman of the Board, may be granted awards with an aggregate grant date value more than $375,000 in any calendar year. Such limitation does not apply to any cash retainer fees, including cash retainer fees converted into Deferred RSUsequity awards at the election of the Director.
A participantAwards
The 2012 LTIP is broad-based and flexible, providing for awards to be made in the form of (a) restricted stock and restricted stock units, (b) incentive stock options, which are intended to qualify under Section 422 of the Tax Code, (c) non-qualified stock options, which are not intended to qualify under Section 422 of the Tax Code, (d) stock appreciation rights, (e) performance awards, (f) performance shares, (g) performance units or (f) other stock-based awards that relate to or serve a similar function to the awards described above. Awards may be made on a standalone, combination or tandem basis. Additional information about some of the awards is set forth below.
Restricted Stock and Restricted Stock Units
Awards of Restricted Common Stock Awards and Restricted Stock Units. Awards of restricted common stock are shares of common stock awarded to the recipient, all or a portion of which are subject to a restriction period set by the Committee during which restriction period the recipient shall not be permitted to sell, transfer or pledge the restricted common stock. Restricted stock units are notional accounts that are valued solely by reference to shares of common stock, subject to a restriction period set by the Committee and payable in common stock, cash or a combination thereof. The restriction period for both restricted stock and restricted stock units may be based on period of service, performance of the recipient or the Company, subsidiary, division or department for which the recipient is employed or such other factors as the Committee may determine.
Rights as a Stockholder. The award agreement may provide that a recipient of restricted common stock will possess all the rights of a holder of common stock of the Company, including the right to vote and receive dividends, subject to forfeiture. The recipient of restricted stock units shall not have any of the opportunityrights of a stockholder of the Company; the Committee shall be entitled to electspecify with respect to convert upany restricted stock unit award that upon the payment of a dividend by the Company, the Company will hold in escrow an amount in cash
equal to the dividend that would have been paid on the restricted stock units had they been converted into the same number of shares of common stock and held by the recipient on that date. Upon adjustment and vesting of the restricted stock unit, any cash payment due with respect to such dividends shall be made to the recipient.
Termination of Employment or Director Relationship. Generally, upon termination of employment or a director relationship for any reason during the restricted period, the recipient will forfeit the right to the shares of restricted common stock to the extent that the applicable restrictions have not lapsed at the time of such termination.
Common Stock Options
Types. Common stock options may be granted under the 2012 LTIP to directors or consultants in the form of nonqualified stock options and to employees in the form of incentive stock options or nonqualified stock options.
Exercise Price. The per share exercise price for shares underlying common stock options will be determined by the Committee, provided that the exercise price must be at least equal to 100% of histhe fair market value per share of common stock on the date of grant. In the case of an incentive stock option granted to an employee who, at the time of grant, owns more than 10% of the total combined voting power of all classes of stock of the Company, the per share exercise price must be at least equal to 110% of the fair market value per share of common stock on the date of grant.
Term of Option; Vesting. The term during which a common stock option may be exercised will be determined by the Committee, provided that no common stock option will be exercisable more than ten (10) years from the date of grant. In the case of an incentive stock option granted to an employee who, at the time of grant, owns more than 10% of the total combined voting power of all classes of stock of the Company or her annual incentive payment payable underits subsidiaries, the Annual Incentive Plan into Deferred RSUs. A Deferred RSU representsterm of such common stock option may not be more than five (5) years. The Committee has full authority,
subject to the terms of the 2012 LTIP, to determine the vesting period or limitation or waiting period with respect to any common stock option granted to a participant or the shares purchased upon exercise of such option; provided, however, that such vesting restriction or limitation or waiting period shall not be less than one (1) year. In addition, the Committee may, for any reason, accelerate the exercisability of any common stock option.
Other Awards
Stock Appreciation Rights. The Committee may grant to an employee or a director a right to receive the excess of the fair market value of shares of the Company’s common stock on the date the stock appreciation right is exercised over the fair market value of such shares on the date the stock appreciation right was granted. Such spread may, in the sole discretion of the Committee, be paid in cash or common stock or a sharecombination of both.
Performance Awards. The Committee may grant performance awards to employees based on the performance of a recipient over a specified period. Such performance awards may be awarded contingent upon future performance of the Company or its affiliates or subsidiaries during that period. A performance award may be in the form of common stock (or cash in an amount equal to the fair market value thereof) or the right to receive an
amount equal to the appreciation, if any, in the future,fair market value of common stock over a specified period. Performance awards may be paid, in the Committee’s discretion, in cash or stock or some combination thereof. Each performance award will have a maximum value established by the Committee at the time the award is made. Unless otherwise provided in an award or by the Committee, performance awards terminate if the participant satisfiesrecipient does not remain an employee or director of the Company, or its affiliates or subsidiaries, at all times during the applicable vesting requirements (described below).performance period.
This election will needOther Stock-Based Awards. The Committee may, in its discretion, grant other stock-based awards that are related to or serve a similar function to the awards described above.
Cash Awards. The Committee may, in its discretion, grant a cash award, which is an award to be made by June 30settled only in cash, pursuant to an award agreement to any participant. The award agreement shall specify the vesting schedule for the cash award. The Committee, in its discretion may condition vesting on the satisfaction of performance goals. The terms of a cash award need not be the plan year priorsame with respect to the plan year in which the annual incentive payment would otherwise be payable. The number of Deferred RSUseach participant and need not relate to be awarded to a participant will generally equal the amount of cash to be converted divided by the fair market value of a share of common stock onstock.
Other Provisions
Withholding Obligations. The Company may take such steps as are considered necessary or appropriate for the conversion date (withwithholding of any remainder returnedfederal, state, local or foreign taxes of any kind that the Company is required by any law or regulation of any governmental authority to withhold in connection with any award under the participant in cash). This conversion will result in2012 LTIP, including, without limiting the deferralgenerality of the converted compensation for a periodforegoing, the withholding of three yearsall or such longer period as may be permitted by the Compensation Committee.
Matching RSU Awards
In addition to receiving Deferred RSUs, upon the conversion of any portion of any payment or the participant’s annual incentive payment, the Participant will also be awarded a number of Matching RSUs equal to 30%withholding of the amountissue of cash converted divided by the fair market value of a share of common stock (rounded down to the nearest whole share). A Matching RSU also represents a right to receive a share of common stock in the future, subject to satisfying the applicable vesting requirements (described below).
Vesting
Both Deferred RSUs and Matching RSUs are generally subject to vesting requirements. Unless otherwise provided in a participant’s award agreement, one-third of all Deferred RSUs and Matching RSUs will vest ratably on each of the first three anniversaries of the conversion date, provided that the Participant is employed by the Company or one of its subsidiaries or affiliates on the applicable vesting date. Vesting will generally be accelerated upon the participant’s retirement on or after age 65 or upon the participant’s death or permanent disability. Upon a participant’s termination of employment, any Deferred RSUs or Matching RSUs that have not vested (after giving effect to any applicable accelerated vesting terms) shall be immediately forfeited. If the participant’s employment is terminated for “Cause” (as defined in the LTIP), all Deferred RSUs and Matching RSUs, whether or not vested, shall be immediately forfeited.
Dividend Equivalent Rights
As dividends are declared on the Company’s common stock, awards of Deferred RSUs and Matching RSUs will generally accrue dividend equivalents that are subject to the same vesting schedules as the underlying Deferred RSUs and Matching RSUs. Payment with respect to dividend equivalents will generally be made as soon as practicable after dividends on the Company’s common stock are paid, or if later, after the dividend equivalents vest. The Compensation Committee may establish, in its discretion, any restrictions and conditions upon dividend equivalents, including their conversion into additional Deferred RSUs or Matching RSUs.
Settlement of RSUs and Delivery of Shares of Common Stock
Vested Deferred RSUs and Matching RSUs shall be settled by delivering shares of common stock to be issued under the participant2012 LTIP, until such time as soon as practicable following the daterecipient has paid the Company for any amount the Company is required to withhold with respect to taxes.
Adjustments
The Committee will make appropriate adjustments in which the firstevent of any stock dividend or extraordinary cash dividend, stock split, reverse stock split, combination, reclassification, or similar change in the capital structure of the following occurs: (a)Company.
Termination or Amendment
The Committee may terminate or amend the 2012 LTIP at any time; provided, however, that stockholder approval will be obtained for any amendment to the 2012 LTIP to the extent necessary to comply with any applicable deferral period (generally, three years) expires; (b)law, regulation or securities exchange rule. The Committee may also amend any outstanding award made under the participant dies; (c)2012 LTIP, provided that no change in any outstanding award may be made that would materially reduce the participant becomes permanently disabled; (d) the participant suffers an unforeseeable emergency;rights or (e) the participant experiences a separation from service. (“Permanently disabled,”, “unforeseeable emergency” and “separation from service” are all within the meaning of Section 409Abenefits of the Internal Revenue Code and the guidance issued thereunder).
In the case of a participant who is a “specified employee” (within the meaning of Section 409A of the Internal Revenue Code and the guidance issued thereunder), the settlement of vested Deferred RSUs or Matching RSUs upon a separation from service shall not be made before the date that is six months following the separation from service (or if earlier, the date of the participant’s death).
Unsecured Obligation
Deferred RSUs and Matching RSUs shall be reflected in book entries maintained by or on behalf of the Company. The existence of such a book entry shall not create a trust of any kind, or a fiduciary relationship between
the Company or the Compensation Committee and any participant. The MSPP is unfunded. Any benefits payable (including shares of common stock) will be paid from the general assets of the Company, which will continue to be subject to the claims of the Company’s creditors. No amounts will be set aside for the benefit of any participant or beneficiary. Deferred RSUs and Matching RSUs represent unsecured obligations of the Company to pay deferred compensation to a participant or his or her beneficiary at a future date.
Plan Amendment
The Company reserves the right to amend, modify or terminate the MSPP at any time by action of the Board or the Compensation Committee. In general, no amendment or termination will have a material adverse effect on a participant’s rights to amounts deferred or credited under the MSPP, without the consent of suchthe affected participant.
Certain United States Federal Income Tax Consequences
The following discussion is limited to a summary of the U.S. federal income tax provisions relating to the making, exercise and vesting of awards under the 2012 LTIP and the subsequent sale of common stock acquired under the 2012 LTIP. The tax consequences of awards may vary depending upon the circumstances, and it should be noted that the income tax laws, regulations and interpretations thereof change frequently. Participants should rely upon their own tax advisors for advice concerning the specific tax consequences applicable to them, including the applicability and effect of state, local, and foreign tax laws.
Generally, a participant
Non-statutory Stock Options
There will not recognizebe no federal income tax consequences to the optionee or to the Company upon the grant of a Deferred RSUstock option under the 2012 LTIP. When the optionee exercises a stock option, however, he or a Matching RSU. A participantshe will instead be taxed atrecognize ordinary income rates onin an amount equal to the excess of the fair market value of the unrestricted shares of common stock received upon exercise over the exercise price, and the Company expects that it will be allowed a corresponding deduction. Any gain that the optionee realizes when he or she later sells or disposes of the option shares will be short-term or long-term capital gain, depending on the datehow long the shares are transferred towere held.
Stock Appreciation Rights
A participant receiving a stock appreciation right will not recognize income, and the participant. UponCompany will not be allowed a subsequent saletax deduction, at the time the award is granted. When the participant exercises the stock appreciation right, the amount of cash and the fair market value of any shares of common stock received upon transfer, any difference betweenwill be ordinary income to the net proceeds on the saleparticipant and the basisCompany expects that it will be allowed a corresponding federal income tax deduction at that time.
Restricted Stock
Unless a participant makes an election to accelerate recognition of such shares (i.e., generallyincome to the date of grant as described below, the participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a restricted stock award is granted, provided that the award is subject to restrictions on transfer and is subject to a substantial risk of forfeiture. When the restrictions lapse, the participant will recognize ordinary income equal to the fair market value of the shares oncommon stock as of that date (less any amount he or she paid for the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Tax Code. If the participant files an election under Section 83(b) of the Tax Code within 30 days after the date of transfer) will be taxed as capital gain or loss.
To the extent a participant recognizes income in the circumstances described above, the Company will generally be entitled to a corresponding deduction.
The MSPP is intended to comply with the rules governing non-qualified deferred compensation as set forth under Section 409Agrant of the Internal Revenue Code.
Federal Employment Taxes
In additionrestricted stock, he or she will recognize ordinary income as of the date of grant equal to federal income taxes, participants will generally be subject to federal employment taxes (i.e., Social Security and Medicare) upon the vesting of any Deferred RSUs or Matching RSUs. If the fair market value of the Deferred RSUsstock as of that date (less any amount paid for the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Tax Code. Any future appreciation in the stock will be taxable to the participant at capital gains rates. However, if the stock is later forfeited, the participant will not be able to recover the tax previously paid pursuant to the Section 83(b) election. To the extent unrestricted dividends are paid during the restricted period under the applicable award agreement, any such dividends will be taxable to the participant at ordinary income tax rates and will be deductible by the Company unless the participant has made a Section 83(b)
election, in which case the dividends will thereafter be taxable to the participant as dividends and will not be deductible by the Company.
Stock Units
A participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a stock unit award is granted. Stock unit awards are made in the form of restricted stock units. Upon receipt of shares of common stock (or the equivalent value in cash) in settlement of a stock unit award, a participant will recognize ordinary income equal to the fair market value of the common stock or Matching RSUsother property as of that date, and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Tax Code.
Cash-Based Awards
A participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a cash-based award is properly taken into accountgranted (for example, when the performance goals are established). Upon receipt of cash in settlement of the award, a participant will recognize ordinary income equal to the cash received, and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Tax Code.
Section 409A
If an award is subject to Section 409A of the Tax Code (which relates to nonqualified deferred compensation awards), and if the requirements of Section 409A are not met, the taxable events as described above could apply earlier than described, and could result in the imposition of additional taxes and penalties. All awards that comply with the terms of the 2012 LTIP, however, are intended to be exempt from the application of Section 409A of the Tax Code or meet the requirements of Section 409A in order to avoid such early taxation and penalties.
Tax Withholding
The Company has the right to deduct or withhold, or require a participant to remit to the Company, an amount sufficient to satisfy the Company’s federal, state and local tax withholding obligations (including employment taxes) imposed by law with respect to any exercise, lapse of restriction or other taxable event arising as a result of the 2012 LTIP. The Committee may, at the time the award is granted or thereafter, require or permit that any such withholding requirement be satisfied, in whole or in part, by delivery of, or withholding from the award, shares having a fair market value on the date of withholding equal to the amount required to be withheld for federal employment taxestax purposes.
Plan Benefits Pursuant to the 2012 LTIP
The amount of any future benefits that may be received by any one individual or group of individuals pursuant to the 2012 LTIP is not presently determinable. Such awards are within the discretion of the Committee, and the Committee has not determined future awards or who might receive them. As evidenced by our reasonable burn rate, particularly in light of our aggressive acquisition strategy, the Committee and the Board have been judicious in granting such awards and have displayed a sensitivity to minimizing the impact of the potential dilution that such awards could have on our stockholders. However, as the 2012 LTIP does not contemplate the amount or
timing of specific future equity awards, it is not possible to calculate the amount of subsequent dilution that may ultimately result from such awards.
Potential Dilutive Impact of Plan
We are committed to effectively managing our employee equity compensation programs while minimizing stockholder dilution. For this reason, in administering our equity compensation program, we consider both our “burn rate” and our “overhang” in evaluating the impact of the program on our stockholders. We define “burn rate” as the number of equity awards granted during the year, divided by the weighted average number of shares of common stock outstanding during the period. The burn rate measures the potential dilutive effect of our equity grants. We define “overhang” as the number of full value awards granted (but not yet vested or issued) and stock options granted (but not yet exercised) divided by the number of shares of common stock outstanding at the end of the period.
Burn Rate Analysis
The Committee approved an increase of the number of available shares of common stock under the 2012 LTIP by 3,000,000 shares to increase the total authorized shares to 9,000,000 under the LTIP Amendment, based on its analysis that this amount is expected to be sufficient to cover awards for at least four years depending on the price of our common stock at the time of vesting, no further federal employment taxes will be due whenactual grants. The Board subsequently approved the LTIP Amendment, subject to approval by our stockholders. In setting the number of shares subject to the LTIP Amendment, the Committee and the Board considered the historical amounts of equity awards the Company has granted in the past three years. Using grants under the 2012 LTIP during the past three years, the Company calculated its three-year average equity share usage (“Burn Rate”) at approximately 1.2% of the weighted average common shares outstanding. Our Burn Rate falls within share usage practices of our compensation peer group; therefore, the Committee believes our historical Burn Rate is reasonable for a Company of our size and in our industry. The Committee intends to manage the Company’s burn rate by continuing to review institutional investor guidelines and market practices, and, in connection therewith, believes the increase of 3,000,000 shares of common stock are deliveredfor which stockholder approval is being sought represents an appropriate increase at this time.
Overhang Analysis
In setting the number of additional shares included in the LTIP Amendment, the Compensation Committee and the Board also considered the total amount of awards outstanding under existing grants. Accordingly, outstanding awards and shares currently available for issuance under the 2012 LTIP, consisting of approximately 2.9 million shares of common stock (commonly referred to as the “overhang”), represented approximately 4.8% of our outstanding shares of common stock as of December 31, 2020 on a fully diluted basis. If stockholders approve the additional 3,000,000 shares of common stock under the LTIP Amendment, the total potential overhang will be approximately 5.7%. Our potential overhang falls within overhang levels of our compensation peer group; therefore, the Committee believes our potential overhang is reasonable for a Company of our size and in our industry.
Expected Life of Share Authorization Analysis
In setting the number of additional shares included in the 2012 LTIP by the LTIP Amendment, the Compensation Committee and the Board also considered the expected life of the 2012 LTIP share authorization, as amended by the LTIP Amendment. If stockholders approve the additional 3,000,000 shares of common stock under
the LTIP Amendment, we estimate the expected life of the share authorization to be approximately five years. The expected life was calculated by dividing the sum of (i) the requested number of additional shares of common stock and (ii) the number of shares available for grant as of December 31, 2020 by our Burn Rate, expressed in terms of shares. The expected life of the requested share authorization of the LTIP Amendment falls within the practices of our compensation peer group; therefore, the Committee believes the expected life of the requested share authorization is reasonable for a Company of our size and in our industry.
Criteria Relied Upon for Equity Award Grant Decisions
In making its decisions regarding equity award grants, the Committee generally considers the scope of the potential grantee’s responsibility at the Company, the relative internal value to the participant.Company of the position, the potential grantee’s experience, past performance, and expected future contributions to the Company, the need to attract or retain the particular potential grantee, and, in the case of executive officers, peer group data provided by the Compensation Committee’s independent consultant. The Compensation Discussion and Analysis (“CD&A”), found on pages 46 through 63 of this Proxy Statement, describes in further detail the criteria and measures used by the Committee in making equity award grant determinations for our named executive officers in 2020. These determinations are in turn submitted by the Committee to the Board of Directors for ratification. The Committee and Board of Directors intend to continue to consider the Company’s equity expenditures in a manner that effectively attracts, retains, and motivates individuals to achieve long-term value creation in line with the interests of our stockholders.
Vote Required
The approval of the MSPPLTIP Amendment requires the affirmative vote of the holders of a majority of the shares of common stock representedpresent at the meeting in person or represented by proxy and entitled to vote. As a result, abstentions will have the same effect as votes against this proposal. Because brokers do not have discretionary authority to vote on this proposal, broker non-votes will not affect the outcome of the vote on this proposal. For this proposal, you may vote “FOR”"FOR" or “AGAINST”"AGAINST" or abstain from voting.
Board Recommendation
The Board recommends that you vote “FOR”“FOR” the approval of the MSPP.LTIP Amendment.
OTHER INFORMATION
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the beneficial ownership of common stock as of March 22, 201919, 2021 of (i) each person who is known by us to own beneficially more than five percent of our outstanding shares of common stock, (ii) each named executive officer, (iii) each of our directors and (iv) all of our directors and executive officers as a group.
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| | | | |
Beneficial holders | | Amount and Nature of Beneficial Ownership(1) |
| | Number | | Percentage |
5% Stockholders: | | | | |
Zell Credit Opportunities Master Fund, L.P. (2) | | 13,046,376 | | 26.5% |
BlackRock Inc. (3) | | 4,623,320 | | 9.4% |
Whitebox Advisors, LLC (4) | | 2,950,990 | | 6.0% |
Directors and Named Executive Officers: | | | | |
| | | | |
Curtis Anastasio (5) | | 212,071 | | * |
Timothy Clossey (6) | | 71,941 | | * |
L. Melvin Cooper (7) | | 23,120 | | * |
Walter Dods (8) | | 112,338 | | * |
Katherine Hatcher | | 1,503 | | * |
Joseph Israel (9) | | 185,750 | | * |
Melvyn Klein (10) | | 219,125 | | * |
William Monteleone (11) | | 321,757 | | * |
William Pate (12) | | 731,901 | | 1.5% |
Robert Silberman (13) | | 256,199 | | * |
James Matthew Vaughn (14) | | 93,410 | | * |
Jim Yates (15) | | 85,148 | | * |
All directors and executive officers as a group (12 persons) | | 2,314,263 | | 4.7% |
| | | | | | | | | | | | | | |
Beneficial holders | | Amount and Nature of Beneficial Ownership (1) |
| | Number | | Percentage |
5% Stockholders: | | | | |
Zell Credit Opportunities Master Fund, L.P. (2) | | 13,046,376 | | 21.8% |
BlackRock Inc. (3) | | 7,508,941 | | 12.6% |
Directors and Named Executive Officers: | | | | |
| | | | |
Curtis Anastasio (4) | | 75,698 | | * |
Timothy Clossey (5) | | 58,730 | | * |
L. Melvin Cooper (6) | | 40,527 | | * |
Walter Dods (7) | | 78,724 | | * |
Katherine Hatcher | | 16,537 | | * |
Joseph Israel (8) | | 332,691 | | * |
Melvyn Klein (9) | | 238,262 | | * |
William Monteleone (10) | | 400,605 | | * |
William Pate (11) | | 1,308,268 | | 2.2% |
Robert Silberman (12) | | 87,532 | | * |
James Matthew Vaughn (13) | | 162,584 | | * |
Jim Yates (14) | | 147,222 | | * |
All directors and executive officers as a group (12 persons) (15) | | 2,947,380 | | 4.9% |
* Denotes less than 1% beneficially owned.
| |
(1) | Based on 49,290,629 common shares outstanding as of March 22, 2019. |
| |
(2) | Information based upon the Schedule 13D/A jointly filed with the SEC on September 26, 2016 by Zell Credit Opportunities Master Fund, L.P., Chai Trust Company, LLC, and EGI Investors, L.L.C. The address for these persons is Two North Riverside Plaza, Suite 600, Chicago, Illinois 60606. Chai Trust Company, LLC, an Illinois limited liability Company, is the managing member of EGI Investors L.L.C., and may be deemed to indirectly beneficially own the 877,632 shares held directly by EGI Investors, L.L.C. Chai Trust Company, LLC is the sole general partner of Zell Credit Opportunities Master Fund, L.P., and may be deemed to beneficially own the 12,168,744 shares held directly by Zell Credit Opportunities Master Fund, L.P. Chai Trust Company, LLC is controlled by a board of senior managing directors, namely, Thomas Heneghan, Robert M. Levin, Mark Sotir, Jon Wasserman, Kellie Zell, JoAnn Zell and Matthew Zell. This |
(1)Based on 59,759,322 common shares outstanding as of March 19, 2021.
(2)Information based upon the Schedule 13D/A jointly filed with the SEC on September 26, 2016 by Zell Credit Opportunities Master Fund, L.P., Chai Trust Company, LLC, and EGI Investors, L.L.C. The address for these persons is Two North Riverside Plaza, Suite 600, Chicago, Illinois 60606. Chai Trust Company, LLC, an Illinois limited liability company, is the managing member of EGI Investors L.L.C., and may be deemed to indirectly beneficially own the 877,632 shares held directly by EGI Investors, L.L.C. Chai Trust Company, LLC is the sole general partner of Zell Credit Opportunities Master Fund, L.P., and may be deemed to beneficially own the 12,168,744 shares held directly by Zell Credit Opportunities Master Fund, L.P. Chai Trust Company, LLC is controlled by a board of senior managing directors, namely, Thomas Heneghan, Robert M. Levin, Mark Sotir, Kellie Zell, JoAnn Zell and Matthew Zell. This board makes the decisions regarding voting and disposition of the shares on behalf of Chai Trust Company, LLC.
| |
(3) | Information based on Schedule 13G filed with the SEC on January 31, 2019 by BlackRock Inc. (“BlackRock”). The address for BlackRock is 55 East 52nd Street, New York, NY 10055. BlackRock has sole voting power with respect to 4,523,769 shares and sole dispositive power with respect to 4,623,320 shares.
|
| |
(4) | Information based upon a Schedule 13D/A jointly filed with the SEC on February 21, 2019 by Whitebox Advisors LLC and Whitebox General Partner LLC. Whitebox General Partner LLC is owned by Andrew Redleaf, Robert Vogel, Mark Strefling, Elissa Weddle, Chris Hardy, Brian Lofton, Paul Twitchell, Richard Vigilante, Robert Riepe, Kerry Manaster, Jake Mercer and Paul Roos. Whitebox Advisors LLC is owned by Andrew Redleaf, Robert Vogel, Mark Strefling, Paul Twitchell, Richard Vigilante, Jake Mercer and Paul Roos. The address for these persons is 3033 Excelsior Blvd, Suite 300, Minneapolis, Minnesota 55416. |
| |
(5) | Includes 167,123 shares issuable upon the exercise of vested options. |
| |
(6) | Includes 22,666 shares issuable upon the exercise of vested options, and 1,652 restricted stock units Mr. Clossey has the right to acquire in the event he leaves Board service during the period ending sixty days after March 22, 2019. |
| |
(7) | Includes 1,652 shares of restricted stock and 7,263 restricted stock units Mr. Cooper has the right to acquire in the event he leaves Board service during the period ending sixty days after March 22, 2019. |
| |
(8) | Includes 45,270 shares issuable upon the exercise of vested options and 9,745 shares of restricted stock units Mr. Dods has the right to acquire in the event he leaves Board service during the period ending sixty days after March 22, 2019. |
| |
(9) | Includes 131,670 shares issuable upon the exercise of vested options. |
| |
(10) | Includes 165,291 shares issuable upon the exercise of vested options and 15,761 restricted stock units Mr. Klein has the right to acquire in the event he leaves Board service during the period ending sixty days after March 22, 2019. |
| |
(11) | Includes 160,146 shares issuable upon the exercise of vested options. |
| |
(12) | Includes 547,500 shares issuable upon the exercise of vested options. |
| |
(13) | Includes 186,454 shares issuable upon the exercise of vested options and 9,745 restricted stock units Mr. Silberman has the right to acquire in the event he leaves Board service during the period ending sixty days after March 22, 2019. |
| |
(14) | Includes 57,028 shares issuable upon the exercise of vested options. |
| |
(15) | Includes 50,261 shares issuable upon the exercise of vested options. |
(3)Information based upon the Schedule 13G/A filed with the SEC on January 26, 2021 by BlackRock Inc. (“BlackRock”). The address for BlackRock is 55 East 52nd Street, New York, NY 10055. BlackRock has sole voting power with respect to 7,213,968 and sole dispositive power with respect to 7,508,941 shares.
(4)Includes 619 shares Mr. Anastasio has the right to acquire pursuant to the vesting of restricted stock units during the period ending sixty days after March 19, 2021.
(5)Includes 2,799 shares of restricted stock units Mr. Clossey has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(6)Includes 7,263 restricted stock units Mr. Cooper has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(7)Includes 16,978 shares of restricted stock units Mr. Dods has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(8)Includes 230,629 shares issuable upon the exercise of vested options.
(9)Includes 150,000 shares issuable upon the exercise of vested options and 35,189 restricted stock units Mr. Klein has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(10)Includes 138,013 shares issuable upon the exercise of vested options.
(11)Includes 974,467 shares issuable upon the exercise of vested options.
(12)Includes 27,532 restricted stock units Mr. Silberman has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(13)Includes 98,527 shares issuable upon the exercise of vested options.
(14)Includes 89,137 shares issuable upon the exercise of vested options.
(15)Includes an aggregate 1,680,773 shares issuable upon the exercise of vested options, and an aggregate 90,380 shares that certain directors have the right to acquire pursuant to restricted stock units in the event they leave Board service during the period ending sixty days after March 19, 2021.
Executive Officers
Our executive officers serve at the pleasure of our Board of Directors and are subject to annual appointment by the Board at its first meeting following the annual meeting of stockholders. All of ourOur executive officers are listed in the following table, and certain information concerning those officers, except for Messrs. Pate, Israel and Monteleone, who are also members of the Board, follows the table:
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| | | | | | | | | | | | | |
Name | | Age | | Position |
William C. Pate | | 5557 | | President and Chief Executive Officer |
Joseph Israel | | 4749 | | Senior Vice President |
William Monteleone | | 3537 | | Senior Vice President and Chief Financial Officer |
James Matthew Vaughn | | 4648 | | Senior Vice PresidentChief Administrative Officer and General Counsel |
Jim Yates | | 5961 | | Senior Vice President |
James Matthew Vaughn has served as our Chief Administrative Officer and General Counsel since July 15, 2020, and as our Senior Vice President and General Counsel since July 2014. Mr. Vaughn also serves on the Board of Managers of Laramie Energy, LLC. Prior to joining Par Pacific, Mr. Vaughn practiced law in the corporate practice group and bankruptcy section of Porter Hedges LLP for 14 years, where he was a partner for seven years and his practice focused on corporate reorganizations and restructurings, acquisitions and divestitures, commodities marketing, transportation, hedging and derivatives, distressed corporate acquisitions, financings and refinancings and creditors’ rights. His practice also included general civil litigation in both federal and state courts.
Mr. Vaughn has been listed as one of America’s leading lawyers by Chambers USA and The Best Lawyers in America and is included in The Legal 500 GC Powerlist. He is a senior fellow of the Litigation Counsel of America. Mr. Vaughn holds a bachelor’s degree in English and Philosophy from Texas A&M University and a juris doctorate from the University of Miami School of Law.
Jim Yates has served as our Senior Vice President since May 2015. From September 2007 until May 2015, Mr. Yates served as President and Chief Executive Officer of Mid Pac Petroleum, LLC, which was acquired by Par Pacific in 2015. Mr. Yates holds a bachelor's degree from the University of Oklahoma in business administration and a law degree from the University of Houston Law Center.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Introduction
This Compensation Discussion and Analysis is designed to provide our stockholders with an understanding of our compensation program, as well as to discuss the compensation earned by our named executive officers (“Named Executive Officers”) for 2018.2020. Our Compensation Committee (the “Committee”) oversees our executive compensation program. The Committee reviews and establishes the compensation for our executive officers and is responsible for administering and awarding grants of equity awards under our existing stock incentive plans.
Our 20182020 executive compensation program was designed to align the interests of our executives with those of our stockholders through long-term stock-based awards and cash payouts linked to Company and individual performance.
Named Executive Officers
For 2018,2020, our Named Executive Officers were:
•William C. Pate, President and Chief Executive Officer;
•Joseph Israel, Senior Vice President;
•William Monteleone, Senior Vice President and Chief Financial Officer;
•James Matthew Vaughn, Senior Vice President,Chief Administrative Officer and General CounselCounsel; and Secretary; and
•Jim Yates, Senior Vice President.
20182020 Key Business Highlights and Compensation Actions
Compensation for 20182020 was primarily driven by excellentdisappointing financial results due to the COVID-19 pandemic, offset by outstanding operational, environmental, and safety performance.No adjustments were made to performance includinggoals or metrics under our annual incentive plan despite the second highestsubstantial impact of the pandemic on the
financial markets that drive incentive opportunities.The 2020 annual Adjusted EBITDAincentives and long-term incentive awards to executives occurred in February 2020 in advance of the impact of the COVID-19 pandemic.
Operating safely and reliably is one of the Company’s highest priorities and is critically important to maximizing profitability as well as protecting our employees and communities. Ongoing improvement and excellent performance in key operational and safety measures have enabled the Company to improve earnings capabilities and realize industry-leading returns. Safe and reliable operations are also important for minimizing environmental impact and environmental scorecard events.
In 2020, we delivered the best year in company history ($132.1 million)in terms of combined employee and contractor safety performance and recorded the lowest number of environmental scorecard events, demonstrating our strong commitment to safety, reliability, and environmental stewardship. The Company remains focused on being one of the safest and most reliable operators in our industry, with environmentally responsible operations.
In assessing safety performance, we measure our annual total recordable incident rate (TRIR), solidwhich includes data with respect to our employees and contractors and is defined as the number of recordable injuries per 200,000 working hours. We also annually measure our Tier 1 Process Safety Event Rate, which is a metric defined by the American Petroleum Institute that looks at process safety results,events per 200,000 total employee and contractor working hours. We use these measures and believe they are helpful in assessing our safety performance because they evaluate performance relative to the announcementnumbers of three large acquisitions during the year. hours being worked. These metrics are also used by others in our industry, which allows for a more objective comparison of our performance.
We continue to expect that the core elements of our executive compensation program in the future will incentivize the profitable operation of our refining, retail and logistics business segments, support our ongoing acquisition strategy and encourage the creation of stockholder value. The Committee is also committed to continued enhancements in response to executive compensation trends and regulatory developments. For a reconciliation of Adjusted EBITDA to the measures we believe to be the most directly comparable to those measures under GAAP, please see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations--Non-GAAP Performance Measures--Adjusted Net Income (Loss) and Adjusted EBITDA” in our Annual Report on Form 10-K for the year ended December 31, 2018.2020.
Our Philosophy on Executive Compensation
Our compensation philosophy is to provide competitive compensation packages that attract, retain, and motivate talented executives and managers while aligning management's and stockholders' interests.To this end, our compensation for 20182020 reflected the Company’s strong operational performance throughout the year, despite challenging market conditions due to the COVID-19 pandemic, as well as excellent financialenvironmental, health, and safety performance in completing two maintenance turnarounds during 2018.2020.
Our compensation programs are generally structured to provide a balanced portfolio of both cash and equity compensation elements. Going forward, we expect that our overall compensation will involve multiple
elements to deliver a total package, including cash and equity compensation components and incentives, to increase stockholder value. In addition, the Committee has and will retain discretion to make adjustments necessary to balance the overall performance of the Company and the individual performance of our executive officers such that we maintain a “pay-for-performance” philosophy.
Due to the relatively short tenure of our named executive officers, we do not currently consider the size of previous equity-based grants and current equity holdings in current compensation decisions. The Committee does expect over time to begin to review tally sheets showing cumulative wealth associated with prior awards as it considers future
grants when making long-term incentive award decisions and overall compensation decisions. The Committee generally applies its compensation philosophy and policies consistently in determining the compensation of each of our senior executive officers, while being mindful of individual differences such as experience, level of responsibility, potential contributions to future growth opportunities and individual performance, as well as the practical implications of arms-length negotiations at the time each executive officer is hired or promoted. Greater relative percentages of potential compensation are at risk for the most senior executive officers to reflect their respective areas and levels of responsibility for the Company’s performance.
Consideration of Say-on-Pay Results
At our annual meeting of stockholders held in May 2018,2020, approximately 93.3%99% of the votes cast on the advisory vote to approve the compensation of our Named Executive Officers were voted in favor of the proposal. The Committee believes that this affirmed our stockholders’ support for the Company’s approach to executive compensation and, therefore, we have not implemented any changes to our executive compensation program as a direct result of the advisory vote.
As set forth in the charts below, a significant percentage of the total compensation targets in 20182020 for the Chief Executive Officer and the other Named Executive Officers as a group was at risk and subject to the performance of the individual officer and the Company.
Our Process for Executive Compensation
The Committee oversees our executive compensation program. Each Committee member is an independent director and a “non-employee” director within the meaning of Rule 16b-3 under the Exchange Act. The Committee develops and recommends to the Board the overall compensation package for our Chief Executive Officer and, with the additional assistance of our Chief Executive Officer, for each of our other executive officers. Our Chief Executive Officer does not participate in determining his compensation. Although objective criteria may be used, the Committee retains final discretion in determining the compensation of our executive officers. In general, the Committee makes its final award determinations based on Company performance in the first quarter following the end of each fiscal year.
In implementing and administering the Company's compensation philosophy, the Committee:
•Reviews market data to assess the competitiveness of the Company’s compensation policies;
•Evaluates the Company’s compensation policies compared to its peers and in the context of broader industry surveys;
•Reviews the Company’s performance against the Company’s plans and budgets and considers the degree of attainment of performance goals and objectives; and
•Reviews the individual performance of each executive officer.
The Committee makes significant decisions over multiple meetings, discussing conceptual matters, reviewing preliminary recommendations, reviewing final recommendations, and reviewing advice of independent executive compensation and legal advisors before acting. The Committee also holds special meetings as necessary in order to perform its duties.
Role of the Chief Executive Officer
As part of its review and determination of the Company’s compensation objectives, philosophy, programs and decisions, the Committee works with and receives advice and recommendations from our Chief Executive Officer (other
than with respect to his own compensation). The Committee's charter provides that our Chief Executive Officer may attend meetings at which the compensation of other Named Executive Officers is under consideration. In this capacity, the Chief Executive Officer may take the following actions:
•Work with the Committee regarding the approval of all general compensation plans and policies, including pension, savings, incentive and equity-based plans;
•Review and determine the respective corporate and individual goals and objectives for the other Named Executive Officers relevant to their compensation;
•Provide the Committee with an evaluation of the performance of the other Named Executive Officers in light ofconsidering their respective corporate and individual goals and objectives; and
•Recommend to the Committee the compensation levels of the other Named Executive Officers.
The Committee considers the recommendations of our Chief Executive Officer, together with the review by its independent compensation consultant, in making independent determinations regarding executive compensation.
Our Chief Executive Officer frequently attends Committee meetings, other than those portions that are held in executive session, but he is not present during voting or deliberations on matters involving his compensation in accordance with the Committee's charter.
RoleRestricted Stock
Unless a participant makes an election to accelerate recognition of Compensationincome to the date of grant as described below, the participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a restricted stock award is granted, provided that the award is subject to restrictions on transfer and is subject to a substantial risk of forfeiture. When the restrictions lapse, the participant will recognize ordinary income equal to the fair market value of the common stock as of that date (less any amount he or she paid for the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Tax Code. If the participant files an election under Section 83(b) of the Tax Code within 30 days after the date of grant of the restricted stock, he or she will recognize ordinary income as of the date of grant equal to the fair market value of the stock as of that date (less any amount paid for the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Tax Code. Any future appreciation in the stock will be taxable to the participant at capital gains rates. However, if the stock is later forfeited, the participant will not be able to recover the tax previously paid pursuant to the Section 83(b) election. To the extent unrestricted dividends are paid during the restricted period under the applicable award agreement, any such dividends will be taxable to the participant at ordinary income tax rates and will be deductible by the Company unless the participant has made a Section 83(b)
election, in which case the dividends will thereafter be taxable to the participant as dividends and will not be deductible by the Company.
Stock Units
A participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a stock unit award is granted. Stock unit awards are made in the form of restricted stock units. Upon receipt of shares of common stock (or the equivalent value in cash) in settlement of a stock unit award, a participant will recognize ordinary income equal to the fair market value of the common stock or other property as of that date, and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Tax Code.
Cash-Based Awards
A participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a cash-based award is granted (for example, when the performance goals are established). Upon receipt of cash in settlement of the award, a participant will recognize ordinary income equal to the cash received, and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Tax Code.
Section 409A
If an award is subject to Section 409A of the Tax Code (which relates to nonqualified deferred compensation awards), and if the requirements of Section 409A are not met, the taxable events as described above could apply earlier than described, and could result in the imposition of additional taxes and penalties. All awards that comply with the terms of the 2012 LTIP, however, are intended to be exempt from the application of Section 409A of the Tax Code or meet the requirements of Section 409A in order to avoid such early taxation and penalties.
Tax Withholding
The Company has the right to deduct or withhold, or require a participant to remit to the Company, an amount sufficient to satisfy the Company’s federal, state and local tax withholding obligations (including employment taxes) imposed by law with respect to any exercise, lapse of restriction or other taxable event arising as a result of the 2012 LTIP. The Committee Consultantsmay, at the time the award is granted or thereafter, require or permit that any such withholding requirement be satisfied, in whole or in part, by delivery of, or withholding from the award, shares having a fair market value on the date of withholding equal to the amount required to be withheld for tax purposes.
Plan Benefits Pursuant to the 2012 LTIP
The amount of any future benefits that may be received by any one individual or group of individuals pursuant to the 2012 LTIP is not presently determinable. Such awards are within the discretion of the Committee, and the Committee has not determined future awards or who might receive them. As evidenced by our reasonable burn rate, particularly in light of our aggressive acquisition strategy, the Committee and the Board have been judicious in granting such awards and have displayed a sensitivity to minimizing the impact of the potential dilution that such awards could have on our stockholders. However, as the 2012 LTIP does not contemplate the amount or
timing of specific future equity awards, it is not possible to calculate the amount of subsequent dilution that may ultimately result from such awards.
Potential Dilutive Impact of Plan
We are committed to effectively managing our employee equity compensation programs while minimizing stockholder dilution. For this reason, in administering our equity compensation program, we consider both our “burn rate” and our “overhang” in evaluating the impact of the program on our stockholders. We define “burn rate” as the number of equity awards granted during the year, divided by the weighted average number of shares of common stock outstanding during the period. The burn rate measures the potential dilutive effect of our equity grants. We define “overhang” as the number of full value awards granted (but not yet vested or issued) and stock options granted (but not yet exercised) divided by the number of shares of common stock outstanding at the end of the period.
Burn Rate Analysis
The Committee engaged Meridianapproved an increase of the number of available shares of common stock under the 2012 LTIP by 3,000,000 shares to increase the total authorized shares to 9,000,000 under the LTIP Amendment, based on its analysis that this amount is expected to be sufficient to cover awards for at least four years depending on the price of our common stock at the time of actual grants. The Board subsequently approved the LTIP Amendment, subject to approval by our stockholders. In setting the number of shares subject to the LTIP Amendment, the Committee and the Board considered the historical amounts of equity awards the Company has granted in the past three years. Using grants under the 2012 LTIP during the past three years, the Company calculated its three-year average equity share usage (“Burn Rate”) at approximately 1.2% of the weighted average common shares outstanding. Our Burn Rate falls within share usage practices of our compensation peer group; therefore, the Committee believes our historical Burn Rate is reasonable for a Company of our size and in our industry. The Committee intends to manage the Company’s burn rate by continuing to review institutional investor guidelines and market practices, and, in connection therewith, believes the increase of 3,000,000 shares of common stock for which stockholder approval is being sought represents an appropriate increase at this time.
Overhang Analysis
In setting the number of additional shares included in the LTIP Amendment, the Compensation Committee and the Board also considered the total amount of awards outstanding under existing grants. Accordingly, outstanding awards and shares currently available for issuance under the 2012 LTIP, consisting of approximately 2.9 million shares of common stock (commonly referred to as the “overhang”), represented approximately 4.8% of our outstanding shares of common stock as of December 31, 2020 on a fully diluted basis. If stockholders approve the additional 3,000,000 shares of common stock under the LTIP Amendment, the total potential overhang will be approximately 5.7%. Our potential overhang falls within overhang levels of our compensation peer group; therefore, the Committee believes our potential overhang is reasonable for a Company of our size and in our industry.
Expected Life of Share Authorization Analysis
In setting the number of additional shares included in the 2012 LTIP by the LTIP Amendment, the Compensation Committee and the Board also considered the expected life of the 2012 LTIP share authorization, as amended by the LTIP Amendment. If stockholders approve the additional 3,000,000 shares of common stock under
the LTIP Amendment, we estimate the expected life of the share authorization to be approximately five years. The expected life was calculated by dividing the sum of (i) the requested number of additional shares of common stock and (ii) the number of shares available for grant as of December 31, 2020 by our Burn Rate, expressed in terms of shares. The expected life of the requested share authorization of the LTIP Amendment falls within the practices of our compensation peer group; therefore, the Committee believes the expected life of the requested share authorization is reasonable for a Company of our size and in our industry.
Criteria Relied Upon for Equity Award Grant Decisions
In making its decisions regarding equity award grants, the Committee generally considers the scope of the potential grantee’s responsibility at the Company, the relative internal value to the Company of the position, the potential grantee’s experience, past performance, and expected future contributions to the Company, the need to attract or retain the particular potential grantee, and, in the case of executive officers, peer group data provided by the Compensation Committee’s independent compensation consultant. Meridian advisedThe Compensation Discussion and Analysis (“CD&A”), found on pages 46 through 63 of this Proxy Statement, describes in further detail the criteria and measures used by the Committee in connectionmaking equity award grant determinations for our named executive officers in 2020. These determinations are in turn submitted by the Committee to the Board of Directors for ratification. The Committee and Board of Directors intend to continue to consider the Company’s equity expenditures in a manner that effectively attracts, retains, and motivates individuals to achieve long-term value creation in line with (i) the reviewinterests of our peerstockholders.
Vote Required
The approval of the LTIP Amendment requires the affirmative vote of the holders of a majority of the shares present at the meeting or represented by proxy and entitled to vote. As a result, abstentions will have the same effect as votes against this proposal. Because brokers do not have discretionary authority to vote on this proposal, broker non-votes will not affect the outcome of the vote on this proposal. For this proposal, you may vote "FOR" or "AGAINST" or abstain from voting.
Board Recommendation
The Board recommends that you vote “FOR” the approval of the LTIP Amendment.
OTHER INFORMATION
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the beneficial ownership of common stock as of March 19, 2021 of (i) each person who is known by us to own beneficially more than five percent of our outstanding shares of common stock, (ii) each named executive officer, (iii) each of our directors and (iv) all of our directors and executive officers as a group.
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Beneficial holders | | Amount and Nature of Beneficial Ownership (1) |
| | Number | | Percentage |
5% Stockholders: | | | | |
Zell Credit Opportunities Master Fund, L.P. (2) | | 13,046,376 | | 21.8% |
BlackRock Inc. (3) | | 7,508,941 | | 12.6% |
Directors and Named Executive Officers: | | | | |
| | | | |
Curtis Anastasio (4) | | 75,698 | | * |
Timothy Clossey (5) | | 58,730 | | * |
L. Melvin Cooper (6) | | 40,527 | | * |
Walter Dods (7) | | 78,724 | | * |
Katherine Hatcher | | 16,537 | | * |
Joseph Israel (8) | | 332,691 | | * |
Melvyn Klein (9) | | 238,262 | | * |
William Monteleone (10) | | 400,605 | | * |
William Pate (11) | | 1,308,268 | | 2.2% |
Robert Silberman (12) | | 87,532 | | * |
James Matthew Vaughn (13) | | 162,584 | | * |
Jim Yates (14) | | 147,222 | | * |
All directors and executive officers as a group (12 persons) (15) | | 2,947,380 | | 4.9% |
* Denotes less than 1% beneficially owned.
(1)Based on 59,759,322 common shares outstanding as of March 19, 2021.
(2)Information based upon the Schedule 13D/A jointly filed with the SEC on September 26, 2016 by Zell Credit Opportunities Master Fund, L.P., Chai Trust Company, LLC, and EGI Investors, L.L.C. The address for these persons is Two North Riverside Plaza, Suite 600, Chicago, Illinois 60606. Chai Trust Company, LLC, an Illinois limited liability company, is the managing member of EGI Investors L.L.C., and may be deemed to indirectly beneficially own the 877,632 shares held directly by EGI Investors, L.L.C. Chai Trust Company, LLC is the sole general partner of Zell Credit Opportunities Master Fund, L.P., and may be deemed to beneficially own the 12,168,744 shares held directly by Zell Credit Opportunities Master Fund, L.P. Chai Trust Company, LLC is controlled by a board of senior managing directors, namely, Thomas Heneghan, Robert M. Levin, Mark Sotir, Kellie Zell, JoAnn Zell and Matthew Zell. This board makes the decisions regarding voting and disposition of the shares on behalf of Chai Trust Company, LLC.
(3)Information based upon the Schedule 13G/A filed with the SEC on January 26, 2021 by BlackRock Inc. (“BlackRock”). The address for BlackRock is 55 East 52nd Street, New York, NY 10055. BlackRock has sole voting power with respect to 7,213,968 and sole dispositive power with respect to 7,508,941 shares.
(4)Includes 619 shares Mr. Anastasio has the right to acquire pursuant to the vesting of restricted stock units during the period ending sixty days after March 19, 2021.
(5)Includes 2,799 shares of restricted stock units Mr. Clossey has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(6)Includes 7,263 restricted stock units Mr. Cooper has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(7)Includes 16,978 shares of restricted stock units Mr. Dods has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(8)Includes 230,629 shares issuable upon the exercise of vested options.
(9)Includes 150,000 shares issuable upon the exercise of vested options and 35,189 restricted stock units Mr. Klein has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(10)Includes 138,013 shares issuable upon the exercise of vested options.
(11)Includes 974,467 shares issuable upon the exercise of vested options.
(12)Includes 27,532 restricted stock units Mr. Silberman has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(13)Includes 98,527 shares issuable upon the exercise of vested options.
(14)Includes 89,137 shares issuable upon the exercise of vested options.
(15)Includes an aggregate 1,680,773 shares issuable upon the exercise of vested options, and an aggregate 90,380 shares that certain directors have the right to acquire pursuant to restricted stock units in the event they leave Board service during the period ending sixty days after March 19, 2021.
Executive Officers
Our executive officers serve at the pleasure of our Board of Directors and are subject to annual appointment by the Board at its first meeting following the annual meeting of stockholders. Our executive officers are listed in the following table, and certain information concerning those officers, except for Messrs. Pate, Israel and Monteleone, who are also members of the Board, follows the table:
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Name | | Age | | Position |
William Pate | | 57 | | President and Chief Executive Officer |
Joseph Israel | | 49 | | Senior Vice President |
William Monteleone | | 37 | | Senior Vice President and Chief Financial Officer |
James Matthew Vaughn | | 48 | | Chief Administrative Officer and General Counsel |
Jim Yates | | 61 | | Senior Vice President |
James Matthew Vaughn has served as our Chief Administrative Officer and General Counsel since July 15, 2020, and as our Senior Vice President and General Counsel since July 2014. Mr. Vaughn also serves on the Board of Managers of Laramie Energy, LLC. Prior to joining Par Pacific, Mr. Vaughn practiced law in the corporate practice group (ii)and bankruptcy section of Porter Hedges LLP for 14 years, where he was a partner for seven years and his practice focused on corporate reorganizations and restructurings, acquisitions and divestitures, commodities marketing, transportation, hedging and derivatives, distressed corporate acquisitions, financings and refinancings and creditors’ rights. His practice also included general civil litigation in both federal and state courts.
Mr. Vaughn has been listed as one of America’s leading lawyers by Chambers USA and The Best Lawyers in America and is included in The Legal 500 GC Powerlist. He is a senior fellow of the reviewLitigation Counsel of America. Mr. Vaughn holds a bachelor’s degree in English and assessmentPhilosophy from Texas A&M University and a juris doctorate from the University of Miami School of Law.
Jim Yates has served as our Senior Vice President since May 2015. From September 2007 until May 2015, Mr. Yates served as President and Chief Executive Officer of Mid Pac Petroleum, LLC, which was acquired by Par Pacific in 2015. Mr. Yates holds a bachelor's degree from the University of Oklahoma in business administration and a law degree from the University of Houston Law Center.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Introduction
This Compensation Discussion and Analysis is designed to provide our stockholders with an understanding of our compensation program, as well as to discuss the compensation earned by our named executive officers (“Named Executive Officers”) for 2020. Our Compensation Committee (the “Committee”) oversees our executive compensation levelsprogram. The Committee reviews and mix, (iii)establishes the reviewcompensation for our executive officers and assessmentis responsible for administering and awarding grants of equity awards under our existing stock incentive plans.
Our 2020 executive compensation program design features, (iv)was designed to align the reviewinterests of our executives with those of our stockholders through long-term stock-based awards and assessmentcash payouts linked to Company and individual performance.
Named Executive Officers
For 2020, our Named Executive Officers were:
•William Pate, President and Chief Executive Officer;
•Joseph Israel, Senior Vice President;
•William Monteleone, Senior Vice President and Chief Financial Officer;
•James Matthew Vaughn, Chief Administrative Officer and General Counsel; and
•Jim Yates, Senior Vice President.
2020 Key Business Highlights and Compensation Actions
Compensation for 2020 was primarily driven by disappointing financial results due to the COVID-19 pandemic, offset by outstanding operational, environmental, and safety performance.No adjustments were made to performance goals or metrics under our annual incentive plan despite the substantial impact of the pandemic on the
financial markets that drive incentive opportunities.The 2020 annual incentives and long-term incentive awards to executives occurred in February 2020 in advance of the impact of the COVID-19 pandemic.
Operating safely and reliably is one of the Company’s share usagehighest priorities and related effectis critically important to maximizing profitability as well as protecting our employees and communities. Ongoing improvement and excellent performance in key operational and safety measures have enabled the Company to improve earnings capabilities and realize industry-leading returns. Safe and reliable operations are also important for minimizing environmental impact and environmental scorecard events.
In 2020, we delivered the best year in company history in terms of combined employee and contractor safety performance and recorded the lowest number of environmental scorecard events, demonstrating our strong commitment to safety, reliability, and environmental stewardship. The Company remains focused on shareholder dilutionbeing one of the safest and (v) reviewmost reliable operators in our industry, with environmentally responsible operations.
In assessing safety performance, we measure our annual total recordable incident rate (TRIR), which includes data with respect to our employees and assessmentcontractors and is defined as the number of recordable injuries per 200,000 working hours. We also annually measure our Tier 1 Process Safety Event Rate, which is a management stock purchase plan.metric defined by the American Petroleum Institute that looks at process safety events per 200,000 total employee and contractor working hours. We use these measures and believe they are helpful in assessing our safety performance because they evaluate performance relative to the numbers of hours being worked. These metrics are also used by others in our industry, which allows for a more objective comparison of our performance.
We continue to expect that the core elements of our executive compensation program in the future will incentivize the profitable operation of our refining, retail and logistics business segments, support our ongoing acquisition strategy and encourage the creation of stockholder value. The Committee is also committed to continued enhancements in response to executive compensation trends and regulatory developments. For a reconciliation of Adjusted EBITDA to the measures we believe to be the most directly comparable to those measures under GAAP, please see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations--Non-GAAP Performance Measures--Adjusted Net Income (Loss) and Adjusted EBITDA” in our Annual Report on Form 10-K for the year ended December 31, 2020.
Our Philosophy on Executive Compensation
Our compensation philosophy is to provide competitive compensation packages that attract, retain, and motivate talented executives and managers while aligning management's and stockholders' interests.To this end, our compensation for 2020 reflected the Company’s strong operational performance throughout the year, despite challenging market conditions due to the COVID-19 pandemic, as well as excellent environmental, health, and safety performance in completing two maintenance turnarounds during 2020.
Our compensation programs are generally structured to provide a balanced portfolio of both cash and equity compensation elements. Going forward, we expect that our overall compensation will involve multiple
elements to deliver a total package, including cash and equity compensation components and incentives, to increase stockholder value. In compliance with SEC rules,addition, the Committee has assessedand will retain discretion to make adjustments necessary to balance the independenceoverall performance of Meridianthe Company and concludedthe individual performance of our executive officers such that no conflictwe maintain a “pay-for-performance” philosophy.
Due to the relatively short tenure of interest exists that would prevent Meridian from independently representing the Committee. Meridian doesour named executive officers, we do not currently provide any servicesconsider the size of previous equity-based grants and current equity holdings in current compensation decisions. The Committee does expect over time to begin to review tally sheets showing cumulative wealth associated with prior awards as it considers future grants when making long-term incentive award decisions and overall compensation decisions. The Committee generally applies its compensation philosophy and policies consistently in determining the Company other than the services provided directly to the Committee. Billing by Meridian is provided directly to, and approved for payment by, the Committee.
Benchmarking Executive Compensation
Our philosophy emphasizes “pay for performance” with achievementcompensation of competitive objectives drivingeach of our senior executive officer pay,officers, while being mindful of individual differences such as tenureexperience, level of responsibility, potential contributions to future growth opportunities and individual performance, as well as the practical implications of pay being the product of an arms-length negotiationnegotiations at the time aneach executive officer is hired or promoted. At the Committee’s request, Meridian conducted a competitive reviewGreater relative percentages of our executivepotential compensation program and was tasked by the Committee with updating the Company’s peer group for compensation purposes.
Customized Peer Group
As our business profile has evolved over time, the Committee has continued to re-evaluate our peer group composition. The Committee, with the advice of Meridian, reviewed the appropriateness of our existing peer group given
the continued expansion of our business operations through acquisitions. In addition, the Committee considered the following criteria in reviewing and selecting peer companies: (i) revenue, (ii) market capitalization, (iii) sub-industry classification, and (iv) business model. Based on this review, the Committee retained 12 of the 17 companies included in our prior year peer group and removed the following companiesare at risk for the reasons indicated: Koppers Holdings Inc. (revenue size), Methanex Corporation (sub-industry focus), Pacific Ethanol Inc. (revenue size) and Seacor Holdings (sub-industry focus). The Committee approved the addition of Crestwood Equity Partners.
The reconstituted peer group had median annual revenues of approximately $2.9 billion and median market capitalization of approximately $1.5 billion as of January 31, 2019. The following table identifies the peer group companies along with their respective GICS sub-industry classifications:
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Company Name | GICS Sub-Industry |
Calumet Specialty Products Partners LP | Oil and Gas Refining and Marketing |
Casey’s General Stores, Inc. | Food Retail |
Crestwood Equity Partners | Oil and Gas Refining and Marketing |
CrossAmerica Partners LP | Oil and Gas Storage and Transportation |
CVR Energy, Inc. | Oil and Gas Refining and Marketing |
Delek U.S. Holdings, Inc. | Oil and Gas Refining and Marketing |
Green Plains Inc. | Oil and Gas Refining and Marketing |
Kraton Corporation | Specialty Chemicals |
Macquarie Infrastructure Corporation | Airport Services |
NuStar Energy L.P. | Oil and Gas Refining and Marketing |
Renewable Energy Group, Inc. | Oil and Gas Refining and Marketing |
Sprague Resources LP | Oil and Gas Storage and Transportation |
Stepan Company | Specialty Chemicals |
Tronox Limited | Commodity Chemicals |
Par Pacific Holdings, Inc. | Oil and Gas Refining and Marketing |
The peer group above was used to benchmark 2018 total compensation levels of ourmost senior executive officers to reflect their respective areas and provide a frameworklevels of responsibility for 2019 total compensation decisions and structures.the Company’s performance.
Our incentive plans provide the Committee with the flexibility to reward outstanding performance significantly above the targeted range described below. Conversely, when performance is below expectations,Consideration of Say-on-Pay Results
At our plans provide the Committee the flexibility to reduce compensation below the targeted range, and to allow the Committee the discretion to reduce or eliminate certain compensation elements.
Overviewannual meeting of Compensation Elements
The list below summarizes the general elements and characteristics of our executive compensation programs. Detailed narratives of these compensation elements are provided below under "2018 Compensation Structure."
Base salary: Base salary is determined by our philosophy, the position (e.g., skills, duties, responsibilities, etc.), market pay levels and trends, individual performance and prior salary;
Annual incentive awards: Variable compensation payablestockholders held in cash (or at the discretionMay 2020, approximately 99% of the Committee, shares of restricted stock and/or stock options) followingvotes cast on the fiscal year the pay is earned based upon the Committee’s determination in their discretion of performance; and
Long-term incentive awards: Variable compensation payable in time-vested and/or performance-based shares of restricted stock, restricted stock units and/or stock options.
Determination of 2018 Compensation
In determiningadvisory vote to approve the compensation of our Named Executive Officers were voted in 2018,favor of the proposal. The Committee consideredbelieves that this affirmed our operatingstockholders’ support for the Company’s approach to executive compensation and, financial performancetherefore, we have not implemented any changes to our executive compensation program as a whole, individual performance, market data, and management’s successdirect result of the advisory vote.
As set forth in the following accomplishments:
Excellent financial results, including the second highest annual Adjusted EBITDA in the Company’s history ($132.1 million), which werecharts below, a factor that led to cash bonuses above target;
Strong business execution and solid safety performance throughout the year; and
Three large acquisitions announced during the year.
2018 Compensation Structure
Base Salary
Base salary provides a secure fixed level of compensation in an amount that recognizes the role and responsibilitiessignificant percentage of the executive officer, as well as experience, performancetotal compensation targets in 2020 for the Chief Executive Officer and contributions. The Committee typically reviews the salaries of ourother Named Executive Officers annually (lateas a group was at risk and subject to the performance of the individual officer and the Company.
Our Process for Executive Compensation
The Committee oversees our executive compensation program. Each Committee member is an independent director and a “non-employee” director within the meaning of Rule 16b-3 under the Exchange Act. The Committee develops and recommends to the Board the overall compensation package for our Chief Executive Officer and, with the additional assistance of our Chief Executive Officer, for each of our other executive officers. Our Chief Executive Officer does not participate in determining his compensation. Although objective criteria may be used, the Committee retains final discretion in determining the compensation of our executive officers. In general, the Committee makes its final award determinations based on Company performance in the fourthfirst quarter or earlyfollowing the following year)end of each fiscal year.
In implementing and administering the Company's compensation philosophy, the Committee:
•Reviews market data to assess the competitiveness of the Company’s compensation policies;
•Evaluates the Company’s compensation policies compared to its peers and in the context of broader industry surveys;
•Reviews the Company’s performance against the Company’s plans and budgets and considers the degree of attainment of performance goals and objectives; and
•Reviews the individual performance of each executive officer.
The Committee makes significant decisions over multiple meetings, discussing conceptual matters, reviewing preliminary recommendations, reviewing final recommendations, and reviewing advice of independent executive compensation and legal advisors before acting. The Committee also holds special meetings as necessary to perform its duties.
Role of the Chief Executive Officer
As part of its review and determination of the Company’s compensation objectives, philosophy, programs and decisions, the Committee works with and receives advice and recommendations from our Chief Executive Officer (other than with respect to his own compensation). The amountCommittee's charter provides that our Chief Executive Officer may attend meetings at which the compensation of any increase is based primarily on the named executive officer's performance, the level of his or her responsibilities and the external competitiveness of his or her base salary and overall total compensation. In addition, the Committee may review the salaries of ourother Named Executive Officers in connection with a promotion or other change in responsibility. The Committee's review of these factors is subjective and no fixed value or weight is assigned to any specific factor when making salary decisions.
2018 Annual Incentive Plan
The 2018 annual incentive plan hadunder consideration. In this capacity, the following objectives:
To incentivize our executive officers to achieve key financial, operational, and individual performance goals;
To create and sustain employee ownership in and financial rewards tied to the Company’s success;
To create alignment with critical success factors and core values of safety and environmental accountability; and
To recognize the importance of operational reliability in the Company’s financial success.
2018 Annual Incentive Target Opportunity
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Named Executive Officer | Annual Incentive Target Opportunity (% of Base Salary) |
William C. Pate | 100.0% |
Joseph Israel | 75.0% |
William Monteleone | 75.0% |
James Matthew Vaughn | 50.0% |
Jim Yates | 75.0% |
Based on achieved individual performance, a NamedChief Executive Officer may earn between 0% and 130% of his annual incentive target.
2018 Annual Performance Measures and Achieved Performance
The Compensation Committee approvedtake the following performance measuresactions:
•Work with the Committee regarding the approval of all general compensation plans and policies, including pension, savings, incentive and equity-based plans;
•Review and determine the respective corporate and individual goals and objectives for the 2018 annual incentive plan (“AIP”).other Named Executive Officers relevant to their compensation;
Group Performance Component, including•Provide the safety and environmental and operationalCommittee with an evaluation of the performance of the refining, retail/logistics, and corporate groups based upon the roles and responsibilities of employees;
Adjusted EBITDA Component; and
Individual Performance Component.
Safety and environmental performance measures were incorporated into the group performance component, which was added to the Adjusted EBITDA performance measure to calculate the Group Metric percentage. The Committee selected these performance measures to align pay with the Company’s financial results while also emphasizing safety and environmental performance.
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Performance Measure | Description |
Adjusted EBITDA Component | The Adjusted EBITDA Component is targeted at 50% of the AIP. Adjusted EBITDA is defined as Adjusted Net Income (Loss), excluding interest expense and financing costs, taxes, depreciation, depletion, and amortization, and equity losses (earnings) from Par’s 46.0% interest in Laramie Energy, LLC, excluding Par's share of unrealized loss (gain) on derivatives. Adjusted Net Income is defined as net income (loss) excluding changes in the value of contingent consideration and common stock warrants, acquisition and integration costs, unrealized (gains) losses on derivatives, debt extinguishment and commitment costs, release of tax valuation allowance, inventory valuation adjustment, severance costs, impairment expense, and (gain) loss on sale of assets, our share of Laramie Energy's unrealized gain or loss on derivatives, and renewable compliance credit ("RIN") losses recorded in excess of our net RINs obligation as discussed in the Company’s financial statements.
Achievement of budgeted Adjusted EBITDA results in an Adjusted EBITDA component of 50%. This number is adjusted up or down based on actual Adjusted EBITDA relative to budget. In 2018, the Adjusted EBITDA component was 63% due to the Company’s strong financial results well in excess of budget.
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Group Performance Component | The Group performance component for all of the Named Executive Officers other than Mr.Yates was measured based on (i) refining group performance in Hawaii (weighted 40%), (ii) refining group performance in Wyoming (weighted 20%), (iii) retail and logistics group performance (weighted 20%), and (iv) key corporate activities, including mergers and acquisitions, growth execution, systems development, and capital and support activities (weighted 20%).
Mr. Yates’s Group Performance was measured based on the safety and environmental (30%), cost management (20%), sales (20%), and sales optimization (30%) results of the retail marketing and logistics group.
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Individual Performance Component | Individual performance component measures each Named Executive Officer’s personal contributions towards satisfaction of our strategic objectives. These strategic objectives were set based upon each Named Executive Officer’s specific job and responsibilities. Individual performance is determined on a 1 to 5 level basis, with 100% target bonus at level 3 and bonus targets ranging from a floor of 0% at level 1 and up to a maximum of 130% at level 5. |
Group Metric = Adjusted EBITDA Component (63.0%) + Group Performance Component (48% to 50.0%).
Individual Metric = Individual Performance Component (100.0 to 105.0%)
The amount of each named executive officer’s bonus was then determined by the following formula:
Annual Incentive Plan Cash Bonus = Annual Base Salary x Target Percentage x Group Metric x Individual Metric
Individual targets, individual and group performance and non-equity incentive awards relating to 2018 performance for Named Executive Officers were as follows:considering their respective corporate and individual goals and objectives; and
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Name | Base Salary ($) | Annual Incentive Plan Group Metric (%) | Individual Metric (%) | Annual Incentive Plan Target (% of base salary) | 2018 Non-Equity Incentive Award ($) |
William C. Pate | $591,600 | 111.0% | 100.0% | 100.0% | $656,676 |
Joseph Israel | $484,500 | 111.0% | 100.0% | 75.0% | $403,346 |
William Monteleone | $382,500 | 111.0% | 105.0% | 75.0% | $334,353 |
Matt Vaughn | $362,100 | 111.0% | 105.0% | 50.0% | $211,014 |
Jim Yates | $324,635 | 113.0% | 105.0% | 75.0% | $288,885 |
In February 2019,•Recommend to the Committee confirmed the cash incentive awards for 2018 performancecompensation levels of the other Named Executive Officers.
The Committee considers the recommendations of our Chief Executive Officer, together with the review by its independent compensation consultant, in making independent determinations regarding executive compensation.
Our Chief Executive Officer frequently attends Committee meetings, other than those portions that are held in executive session, but he is not present during voting or deliberations on matters involving his compensation in accordance with the bonus formula above as part of the annual compensation process. These cash awards were paid in the first quarter of 2019. The Committee retains the discretion to adjust the results for any given year and to increase or decrease the size of any performance-based award or payout. The Committee did not make any such adjustments in 2018.Committee's charter.
Long-Term Incentive Plan
During 2018, the Committee granted three types of long-term incentive awards to our Named Executive Officers: restricted stock, stock options, and performance restricted stock units. The Committee determined the size of each equity grant to our Named Executive Officers based on our operating and financial performance, individual performance, and market data.
Restricted Stock
Unless a participant makes an election to accelerate recognition of income to the date of grant as described below, the participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a restricted stock award is granted, provided that the award is subject to restrictions on transfer and is subject to a substantial risk of forfeiture. When the restrictions lapse, the participant will recognize ordinary income equal to the fair market value of the common stock as of that date (less any amount he or she paid for the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Tax Code. If the participant files an election under Section 83(b) of the Tax Code within 30 days after the date of grant of the restricted stock, he or she will recognize ordinary income as of the date of grant equal to the fair market value of the stock as of that date (less any amount paid for the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Tax Code. Any future appreciation in the stock will be taxable to the participant at capital gains rates. However, if the stock is later forfeited, the participant will not be able to recover the tax previously paid pursuant to the Section 83(b) election. To the extent unrestricted dividends are paid during the restricted period under the applicable award agreement, any such dividends will be taxable to the participant at ordinary income tax rates and will be deductible by the Company unless the participant has made a Section 83(b)
election, in which case the dividends will thereafter be taxable to the participant as dividends and will not be deductible by the Company.
Stock Units
A participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a stock unit award is granted. Stock unit awards are made in the form of restricted stock units. Upon receipt of shares of common stock (or the equivalent value in cash) in settlement of a stock unit award, a participant will recognize ordinary income equal to the fair market value of the common stock or other property as of that date, and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Tax Code.
Cash-Based Awards
A participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a cash-based award is granted (for example, when the performance goals are established). Upon receipt of cash in settlement of the award, a participant will recognize ordinary income equal to the cash received, and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Tax Code.
Section 409A
If an award is subject to Section 409A of the Tax Code (which relates to nonqualified deferred compensation awards), and if the requirements of Section 409A are not met, the taxable events as described above could apply earlier than described, and could result in the imposition of additional taxes and penalties. All awards that comply with the terms of the 2012 LTIP, however, are intended to be exempt from the application of Section 409A of the Tax Code or meet the requirements of Section 409A in order to avoid such early taxation and penalties.
Tax Withholding
The Company has the right to deduct or withhold, or require a participant to remit to the Company, an amount sufficient to satisfy the Company’s federal, state and local tax withholding obligations (including employment taxes) imposed by law with respect to any exercise, lapse of restriction or other taxable event arising as a result of the 2012 LTIP. The Committee may, at the time the award is granted or thereafter, require or permit that any such withholding requirement be satisfied, in whole or in part, by delivery of, or withholding from the award, shares having a fair market value on the date of withholding equal to the amount required to be withheld for tax purposes.
Plan Benefits Pursuant to the 2012 LTIP
The amount of any future benefits that may be received by any one individual or group of individuals pursuant to the 2012 LTIP is not presently determinable. Such awards are within the discretion of the Committee, and the Committee has not determined future awards or who might receive them. As evidenced by our reasonable burn rate, particularly in light of our aggressive acquisition strategy, the Committee and the Board have been judicious in granting such awards and have displayed a sensitivity to minimizing the impact of the potential dilution that such awards could have on our stockholders. However, as the 2012 LTIP does not contemplate the amount or
timing of specific future equity awards, it is not possible to calculate the amount of subsequent dilution that may ultimately result from such awards.
Potential Dilutive Impact of Plan
We are committed to effectively managing our employee equity compensation programs while minimizing stockholder dilution. For this reason, in administering our equity compensation program, we consider both our “burn rate” and our “overhang” in evaluating the impact of the program on our stockholders. We define “burn rate” as the number of equity awards granted during the year, divided by the weighted average number of shares of common stock outstanding during the period. The burn rate measures the potential dilutive effect of our equity grants. We define “overhang” as the number of full value awards granted (but not yet vested or issued) and stock options granted (but not yet exercised) divided by the number of shares of common stock outstanding at the end of the period.
Burn Rate Analysis
The Committee approved an increase of the number of available shares of common stock under the 2012 LTIP by 3,000,000 shares to increase the total authorized shares to 9,000,000 under the LTIP Amendment, based on its analysis that this amount is expected to be sufficient to cover awards for at least four years depending on the price of our common stock at the time of actual grants. The Board subsequently approved the LTIP Amendment, subject to approval by our stockholders. In setting the number of shares subject to the LTIP Amendment, the Committee and the Board considered the historical amounts of equity awards the Company has granted in the past three years. Using grants under the 2012 LTIP during the past three years, the Company calculated its three-year average equity share usage (“Burn Rate”) at approximately 1.2% of the weighted average common shares outstanding. Our Burn Rate falls within share usage practices of our compensation peer group; therefore, the Committee believes our historical Burn Rate is reasonable for a Company of our size and in our industry. The Committee intends to manage the Company’s burn rate by continuing to review institutional investor guidelines and market practices, and, in connection therewith, believes the increase of 3,000,000 shares of common stock for which stockholder approval is being sought represents an appropriate increase at this time.
Overhang Analysis
In setting the number of additional shares included in the LTIP Amendment, the Compensation Committee and the Board also considered the total amount of awards outstanding under existing grants. Accordingly, outstanding awards and shares currently available for issuance under the 2012 LTIP, consisting of approximately 2.9 million shares of common stock (commonly referred to as the “overhang”), represented approximately 4.8% of our outstanding shares of common stock as of December 31, 2020 on a fully diluted basis. If stockholders approve the additional 3,000,000 shares of common stock under the LTIP Amendment, the total potential overhang will be approximately 5.7%. Our potential overhang falls within overhang levels of our compensation peer group; therefore, the Committee believes our potential overhang is reasonable for a Company of our size and in our industry.
Expected Life of Share Authorization Analysis
In setting the number of additional shares included in the 2012 LTIP by the LTIP Amendment, the Compensation Committee and the Board also considered the expected life of the 2012 LTIP share authorization, as amended by the LTIP Amendment. If stockholders approve the additional 3,000,000 shares of common stock under
the LTIP Amendment, we estimate the expected life of the share authorization to be approximately five years. The expected life was calculated by dividing the sum of (i) the requested number of additional shares of common stock and (ii) the number of shares available for grant as of December 31, 2020 by our Burn Rate, expressed in terms of shares. The expected life of the requested share authorization of the LTIP Amendment falls within the practices of our compensation peer group; therefore, the Committee believes the expected life of the requested share authorization is reasonable for a Company of our size and in our industry.
Criteria Relied Upon for Equity Award Grant Decisions
In making its decisions regarding equity award grants, the Committee generally considers the scope of the potential grantee’s responsibility at the Company, the relative internal value to the Company of the position, the potential grantee’s experience, past performance, and expected future contributions to the Company, the need to attract or retain the particular potential grantee, and, in the case of executive officers, peer group data provided by the Compensation Committee’s independent consultant. The Compensation Discussion and Analysis (“CD&A”), found on pages 46 through 63 of this Proxy Statement, describes in further detail the criteria and measures used by the Committee in making equity award grant determinations for our named executive officers in 2020. These determinations are in turn submitted by the Committee to the Board of Directors for ratification. The Committee and Board of Directors intend to continue to consider the Company’s equity expenditures in a manner that effectively attracts, retains, and motivates individuals to achieve long-term value creation in line with the interests of our stockholders.
Vote Required
The approval of the LTIP Amendment requires the affirmative vote of the holders of a majority of the shares present at the meeting or represented by proxy and entitled to vote. As a result, abstentions will have the same effect as votes against this proposal. Because brokers do not have discretionary authority to vote on this proposal, broker non-votes will not affect the outcome of the vote on this proposal. For this proposal, you may vote "FOR" or "AGAINST" or abstain from voting.
Board Recommendation
The Board recommends that you vote “FOR” the approval of the LTIP Amendment.
OTHER INFORMATION
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the beneficial ownership of common stock as of March 19, 2021 of (i) each person who is known by us to own beneficially more than five percent of our outstanding shares of common stock, (ii) each named executive officer, (iii) each of our directors and (iv) all of our directors and executive officers as a group.
| | | | | | | | | | | | | | |
Beneficial holders | | Amount and Nature of Beneficial Ownership (1) |
| | Number | | Percentage |
5% Stockholders: | | | | |
Zell Credit Opportunities Master Fund, L.P. (2) | | 13,046,376 | | 21.8% |
BlackRock Inc. (3) | | 7,508,941 | | 12.6% |
Directors and Named Executive Officers: | | | | |
| | | | |
Curtis Anastasio (4) | | 75,698 | | * |
Timothy Clossey (5) | | 58,730 | | * |
L. Melvin Cooper (6) | | 40,527 | | * |
Walter Dods (7) | | 78,724 | | * |
Katherine Hatcher | | 16,537 | | * |
Joseph Israel (8) | | 332,691 | | * |
Melvyn Klein (9) | | 238,262 | | * |
William Monteleone (10) | | 400,605 | | * |
William Pate (11) | | 1,308,268 | | 2.2% |
Robert Silberman (12) | | 87,532 | | * |
James Matthew Vaughn (13) | | 162,584 | | * |
Jim Yates (14) | | 147,222 | | * |
All directors and executive officers as a group (12 persons) (15) | | 2,947,380 | | 4.9% |
* Denotes less than 1% beneficially owned.
(1)Based on 59,759,322 common shares outstanding as of March 19, 2021.
(2)Information based upon the Schedule 13D/A jointly filed with the SEC on September 26, 2016 by Zell Credit Opportunities Master Fund, L.P., Chai Trust Company, LLC, and EGI Investors, L.L.C. The address for these persons is Two North Riverside Plaza, Suite 600, Chicago, Illinois 60606. Chai Trust Company, LLC, an Illinois limited liability company, is the managing member of EGI Investors L.L.C., and may be deemed to indirectly beneficially own the 877,632 shares held directly by EGI Investors, L.L.C. Chai Trust Company, LLC is the sole general partner of Zell Credit Opportunities Master Fund, L.P., and may be deemed to beneficially own the 12,168,744 shares held directly by Zell Credit Opportunities Master Fund, L.P. Chai Trust Company, LLC is controlled by a board of senior managing directors, namely, Thomas Heneghan, Robert M. Levin, Mark Sotir, Kellie Zell, JoAnn Zell and Matthew Zell. This board makes the decisions regarding voting and disposition of the shares on behalf of Chai Trust Company, LLC.
(3)Information based upon the Schedule 13G/A filed with the SEC on January 26, 2021 by BlackRock Inc. (“BlackRock”). The address for BlackRock is 55 East 52nd Street, New York, NY 10055. BlackRock has sole voting power with respect to 7,213,968 and sole dispositive power with respect to 7,508,941 shares.
(4)Includes 619 shares Mr. Anastasio has the right to acquire pursuant to the vesting of restricted stock units during the period ending sixty days after March 19, 2021.
(5)Includes 2,799 shares of restricted stock units Mr. Clossey has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(6)Includes 7,263 restricted stock units Mr. Cooper has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(7)Includes 16,978 shares of restricted stock units Mr. Dods has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(8)Includes 230,629 shares issuable upon the exercise of vested options.
(9)Includes 150,000 shares issuable upon the exercise of vested options and 35,189 restricted stock units Mr. Klein has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(10)Includes 138,013 shares issuable upon the exercise of vested options.
(11)Includes 974,467 shares issuable upon the exercise of vested options.
(12)Includes 27,532 restricted stock units Mr. Silberman has the right to acquire in the event he leaves Board service during the period ending sixty days after March 19, 2021.
(13)Includes 98,527 shares issuable upon the exercise of vested options.
(14)Includes 89,137 shares issuable upon the exercise of vested options.
(15)Includes an aggregate 1,680,773 shares issuable upon the exercise of vested options, and an aggregate 90,380 shares that certain directors have the right to acquire pursuant to restricted stock units in the event they leave Board service during the period ending sixty days after March 19, 2021.
Executive Officers
Our executive officers serve at the pleasure of our Board of Directors and are subject to annual appointment by the Board at its first meeting following the annual meeting of stockholders. Our executive officers are listed in the following table, and certain information concerning those officers, except for Messrs. Pate, Israel and Monteleone, who are also members of the Board, follows the table:
| | | | | | | | | | | | | | |
Name | | Age | | Position |
William Pate | | 57 | | President and Chief Executive Officer |
Joseph Israel | | 49 | | Senior Vice President |
William Monteleone | | 37 | | Senior Vice President and Chief Financial Officer |
James Matthew Vaughn | | 48 | | Chief Administrative Officer and General Counsel |
Jim Yates | | 61 | | Senior Vice President |
James Matthew Vaughn has served as our Chief Administrative Officer and General Counsel since July 15, 2020, and as our Senior Vice President and General Counsel since July 2014. Mr. Vaughn also serves on the Board of Managers of Laramie Energy, LLC. Prior to joining Par Pacific, Mr. Vaughn practiced law in the corporate practice group and bankruptcy section of Porter Hedges LLP for 14 years, where he was a partner for seven years and his practice focused on corporate reorganizations and restructurings, acquisitions and divestitures, commodities marketing, transportation, hedging and derivatives, distressed corporate acquisitions, financings and refinancings and creditors’ rights. His practice also included general civil litigation in both federal and state courts.
Mr. Vaughn has been listed as one of America’s leading lawyers by Chambers USA and The Best Lawyers in America and is included in The Legal 500 GC Powerlist. He is a senior fellow of the Litigation Counsel of America. Mr. Vaughn holds a bachelor’s degree in English and Philosophy from Texas A&M University and a juris doctorate from the University of Miami School of Law.
Jim Yates has served as our Senior Vice President since May 2015. From September 2007 until May 2015, Mr. Yates served as President and Chief Executive Officer of Mid Pac Petroleum, LLC, which was acquired by Par Pacific in 2015. Mr. Yates holds a bachelor's degree from the University of Oklahoma in business administration and a law degree from the University of Houston Law Center.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Introduction
This Compensation Discussion and Analysis is designed to provide our stockholders with an understanding of our compensation program, as well as to discuss the compensation earned by our named executive officers (“Named Executive Officers”) for 2020. Our Compensation Committee (the “Committee”) oversees our executive compensation program. The Committee reviews and establishes the compensation for our executive officers and is responsible for administering and awarding grants of equity awards under our existing stock incentive plans.
Our 2020 executive compensation program was designed to align the interests of our executives with those of our stockholders through long-term stock-based awards and cash payouts linked to Company and individual performance.
Named Executive Officers
For 2020, our Named Executive Officers were:
•William Pate, President and Chief Executive Officer;
•Joseph Israel, Senior Vice President;
•William Monteleone, Senior Vice President and Chief Financial Officer;
•James Matthew Vaughn, Chief Administrative Officer and General Counsel; and
•Jim Yates, Senior Vice President.
2020 Key Business Highlights and Compensation Actions
Compensation for 2020 was primarily driven by disappointing financial results due to the COVID-19 pandemic, offset by outstanding operational, environmental, and safety performance.No adjustments were made to performance goals or metrics under our annual incentive plan despite the substantial impact of the pandemic on the
financial markets that drive incentive opportunities.The 2020 annual incentives and long-term incentive awards to executives occurred in February 2020 in advance of the impact of the COVID-19 pandemic.
Operating safely and reliably is one of the Company’s highest priorities and is critically important to maximizing profitability as well as protecting our employees and communities. Ongoing improvement and excellent performance in key operational and safety measures have enabled the Company to improve earnings capabilities and realize industry-leading returns. Safe and reliable operations are also important for minimizing environmental impact and environmental scorecard events.
In 2020, we delivered the best year in company history in terms of combined employee and contractor safety performance and recorded the lowest number of environmental scorecard events, demonstrating our strong commitment to safety, reliability, and environmental stewardship. The Company remains focused on being one of the safest and most reliable operators in our industry, with environmentally responsible operations.
In assessing safety performance, we measure our annual total recordable incident rate (TRIR), which includes data with respect to our employees and contractors and is defined as the number of recordable injuries per 200,000 working hours. We also annually measure our Tier 1 Process Safety Event Rate, which is a metric defined by the American Petroleum Institute that looks at process safety events per 200,000 total employee and contractor working hours. We use these measures and believe they are helpful in assessing our safety performance because they evaluate performance relative to the numbers of hours being worked. These metrics are also used by others in our industry, which allows for a more objective comparison of our performance.
We continue to expect that the core elements of our executive compensation program in the future will incentivize the profitable operation of our refining, retail and logistics business segments, support our ongoing acquisition strategy and encourage the creation of stockholder value. The Committee is also committed to continued enhancements in response to executive compensation trends and regulatory developments. For a reconciliation of Adjusted EBITDA to the measures we believe to be the most directly comparable to those measures under GAAP, please see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations--Non-GAAP Performance Measures--Adjusted Net Income (Loss) and Adjusted EBITDA” in our Annual Report on Form 10-K for the year ended December 31, 2020.
Our Philosophy on Executive Compensation
Our compensation philosophy is to provide competitive compensation packages that attract, retain, and motivate talented executives and managers while aligning management's and stockholders' interests.To this end, our compensation for 2020 reflected the Company’s strong operational performance throughout the year, despite challenging market conditions due to the COVID-19 pandemic, as well as excellent environmental, health, and safety performance in completing two maintenance turnarounds during 2020.
Our compensation programs are generally structured to provide a balanced portfolio of both cash and equity compensation elements. Going forward, we expect that our overall compensation will involve multiple
elements to deliver a total package, including cash and equity compensation components and incentives, to increase stockholder value. In addition, the Committee has and will retain discretion to make adjustments necessary to balance the overall performance of the Company and the individual performance of our executive officers such that we maintain a “pay-for-performance” philosophy.
Due to the relatively short tenure of our named executive officers, we do not currently consider the size of previous equity-based grants and current equity holdings in current compensation decisions. The Committee does expect over time to begin to review tally sheets showing cumulative wealth associated with prior awards as it considers future grants when making long-term incentive award decisions and overall compensation decisions. The Committee generally applies its compensation philosophy and policies consistently in determining the compensation of each of our senior executive officers, while being mindful of individual differences such as experience, level of responsibility, potential contributions to future growth opportunities and individual performance, as well as the practical implications of arms-length negotiations at the time each executive officer is hired or promoted. Greater relative percentages of potential compensation are at risk for the most senior executive officers to reflect their respective areas and levels of responsibility for the Company’s performance.
Consideration of Say-on-Pay Results
At our annual meeting of stockholders held in May 2020, approximately 99% of the votes cast on the advisory vote to approve the compensation of our Named Executive Officers were voted in favor of the proposal. The Committee believes that this affirmed our stockholders’ support for the Company’s approach to executive compensation and, therefore, we have not implemented any changes to our executive compensation program as a direct result of the advisory vote.
As set forth in the charts below, a significant percentage of the total compensation targets in 2020 for the Chief Executive Officer and the other Named Executive Officers as a group was at risk and subject to the performance of the individual officer and the Company.
Our Process for Executive Compensation
The Committee oversees our executive compensation program. Each Committee member is an independent director and a “non-employee” director within the meaning of Rule 16b-3 under the Exchange Act. The Committee develops and recommends to the Board the overall compensation package for our Chief Executive Officer and, with the additional assistance of our Chief Executive Officer, for each of our other executive officers. Our Chief Executive Officer does not participate in determining his compensation. Although objective criteria may be used, the Committee retains final discretion in determining the compensation of our executive officers. In general, the Committee makes its final award determinations based on Company performance in the first quarter following the end of each fiscal year.
In implementing and administering the Company's compensation philosophy, the Committee:
•Reviews market data to assess the competitiveness of the Company’s compensation policies;
•Evaluates the Company’s compensation policies compared to its peers and in the context of broader industry surveys;
•Reviews the Company’s performance against the Company’s plans and budgets and considers the degree of attainment of performance goals and objectives; and
•Reviews the individual performance of each executive officer.
The Committee makes significant decisions over multiple meetings, discussing conceptual matters, reviewing preliminary recommendations, reviewing final recommendations, and reviewing advice of independent executive compensation and legal advisors before acting. The Committee also holds special meetings as necessary to perform its duties.
Role of the Chief Executive Officer
As part of its review and determination of the Company’s compensation objectives, philosophy, programs and decisions, the Committee works with and receives advice and recommendations from our Chief Executive Officer (other than with respect to his own compensation). The Committee's charter provides that our Chief Executive Officer may attend meetings at which the compensation of other Named Executive Officers is under consideration. In this capacity, the Chief Executive Officer may take the following actions:
•Work with the Committee regarding the approval of all general compensation plans and policies, including pension, savings, incentive and equity-based plans;
•Review and determine the respective corporate and individual goals and objectives for the other Named Executive Officers relevant to their compensation;
•Provide the Committee with an evaluation of the performance of the other Named Executive Officers considering their respective corporate and individual goals and objectives; and
•Recommend to the Committee the compensation levels of the other Named Executive Officers.
The Committee considers the recommendations of our Chief Executive Officer, together with the review by its independent compensation consultant, in making independent determinations regarding executive compensation.
Our Chief Executive Officer frequently attends Committee meetings, other than those portions that are held in executive session, but he is not present during voting or deliberations on matters involving his compensation in accordance with the Committee's charter.
Role of Compensation Committee Consultants
The Committee engaged Meridian as its independent compensation consultant. Meridian advised the Committee in connection with (i) the review of our peer group, (ii) the review and assessment of executive compensation levels and mix, (iii) the review and assessment of executive compensation program design features, and (iv) the review and assessment of the Company’s share usage and related effect on stockholder dilution. In compliance with SEC rules, the Committee has assessed the independence of Meridian and concluded that no conflict of interest exists that would prevent Meridian from independently representing the Committee. Meridian does not currently provide any services to the Company other than the services provided directly to the Committee. Billing by Meridian is provided directly to, and approved for payment by, the Committee.
Benchmarking Executive Compensation
Our philosophy emphasizes “pay for performance” with achievement of competitive objectives driving executive officer pay, while being mindful of individual differences such as tenure and performance, as well as the practical implications of pay being the product of an arms-length negotiation at the time an executive officer is hired or promoted. At the Committee’s request, Meridian conducted a competitive review of our executive compensation program and was tasked by the Committee with updating the Company’s peer group for compensation purposes.
Customized Peer Group
As our business profile has evolved over time, the Committee has continued to re-evaluate our peer group composition. The Committee, with the advice of Meridian, reviewed the appropriateness of our existing peer group given the continued expansion of our business operations through acquisitions. In addition, the Committee considered the following criteria in reviewing and selecting peer companies: (i) revenue, (ii) market capitalization, (iii) sub-industry classification, and (iv) business model. Based on this review, the Committee retained all the 14 companies included in our prior year peer group.
Our peer group had median annual revenues of approximately $2.5 billion and median market capitalization of approximately $1.4 billion as of December 31, 2020. The following table identifies the peer group companies along with their respective GICS sub-industry classifications:
| | | | | |
Company Name | GICS Sub-Industry |
Calumet Specialty Products Partners LP | Oil and Gas Refining and Marketing |
Casey’s General Stores, Inc. | Food Retail |
Crestwood Equity Partners | Oil and Gas Refining and Marketing |
CrossAmerica Partners LP | Oil and Gas Storage and Transportation |
CVR Energy, Inc. | Oil and Gas Refining and Marketing |
Delek U.S. Holdings, Inc. | Oil and Gas Refining and Marketing |
Green Plains Inc. | Oil and Gas Refining and Marketing |
Kraton Corporation | Specialty Chemicals |
Macquarie Infrastructure Corporation | Airport Services |
NuStar Energy L.P. | Oil and Gas Refining and Marketing |
Renewable Energy Group, Inc. | Oil and Gas Refining and Marketing |
Sprague Resources LP | Oil and Gas Storage and Transportation |
Stepan Company | Specialty Chemicals |
Tronox Holdings plc | Commodity Chemicals |
Par Pacific Holdings, Inc. | Oil and Gas Refining and Marketing |
The peer group above was used to benchmark 2020 total compensation levels of our senior executive officers and provide a framework for 2021 total compensation decisions and structures.
Our incentive plans provide the Committee with the flexibility to reward outstanding performance significantly above the targeted range described below. Conversely, when performance is below expectations, our plans provide the Committee the flexibility to reduce compensation below the targeted range, and to allow the Committee the discretion to reduce or eliminate certain compensation elements.
Overview of Compensation Elements
The list below summarizes the general elements and characteristics of our executive compensation programs. Detailed narratives of these compensation elements are provided below under "2020 Compensation Structure."
•Base salary: Base salary is determined by our philosophy, the position (e.g., skills, duties, responsibilities, etc.), market pay levels and trends, individual performance and prior salary;
•Annual incentive awards: Variable compensation payable in cash (or at the discretion of the Committee, shares of restricted stock and/or stock options) following the fiscal year the pay is earned based upon the Committee’s determination in their discretion of performance; and
•Long-term incentive awards: Variable compensation payable in time-vested and/or performance-based shares of restricted stock, restricted stock units and/or stock options.
Determination of 2020 Compensation
In determining the compensation of our Named Executive Officers in 2020, the Committee considered the Company’s operating and financial performance, individual performance, market data, and the Company’s strong operational performance throughout the year, despite challenging market conditions due to the COVID-19
pandemic, as well as excellent environmental, health, and safety performance in completing two maintenance turnarounds during 2020.
2020 Compensation Structure
Base Salary
Base salary provides a secure fixed level of compensation in an amount that recognizes the role and responsibilities of the executive officer, as well as experience, performance, and contributions. The Committee typically reviews the salaries of our Named Executive Officers annually (late in the fourth quarter or early the following year). The amount of any increase is based primarily on the named executive officer's performance, the level of his or her responsibilities and the external competitiveness of his or her base salary and overall total compensation. In addition, the Committee may review the salaries of our Named Executive Officers in connection with a promotion or other change in responsibility. The Committee's review of these factors is subjective, and no fixed value or weight is assigned to any specific factor when making salary decisions.
2020 Annual Incentive Plan
The 2020 annual incentive plan had the following objectives:
•To incentivize our executive officers to achieve key financial, operational, and individual performance goals;
•To create and sustain employee ownership in and financial rewards tied to the Company’s success;
•To create alignment with critical success factors and core values of safety and environmental accountability; and
•To recognize the importance of operational reliability in the Company’s financial success.
2020 Annual Incentive Target Opportunity
| | | | | |
Named Executive Officer | Annual Incentive Target Opportunity (% of Base Salary) |
William Pate | 100.0% |
Joseph Israel | 80.0% |
William Monteleone | 80.0% |
James Matthew Vaughn | 75.0% |
Jim Yates | 75.0% |
Based on achieved individual performance, a Named Executive Officer may earn between 0% and 130% of his annual incentive target.
2020 Annual Performance Measures and Achieved Performance
The Compensation Committee approved the following individual and group performance components for the 2020 annual incentive plan (“AIP”).The individual performance component is based on each employee’s
individual performance based on the employee’s role and responsibility. The group performance component is based on health, safety, and operational performance (50%); the Adjusted EBITDA component (25%); and the Modified Free Cash Flow component (25%).The Committee selected these performance measures to align pay with the Company’s financial results while also emphasizing safety and environmental performance.
| | | | | |
Performance Measure | Description |
Adjusted EBITDA Component and Modified Free Cash Flow Component | The Adjusted EBITDA component is targeted at 25% of the AIP. This component can range between 0.00% and 200% of the 25% target.
Adjusted EBITDA is Adjusted Net Income (Loss) excluding interest expense and financing costs, income taxes, DD&A, and equity losses (earnings) from Laramie Energy, excluding our share of unrealized loss (gain) on derivatives, impairment of our investment, and our share of Laramie Energy’s asset impairment losses in excess of our basis difference. Adjusted Net Income (Loss) is defined as net income (loss) excluding changes in the value of contingent consideration and common stock warrants, acquisition and integration costs, unrealized (gain) loss on derivatives, debt extinguishment and commitment costs, increase in (release of) tax valuation allowance and other deferred tax items, inventory valuation adjustment, severance costs, impairment expense, (gain) loss on sale of assets, our share of Laramie Energy’s unrealized loss (gain) on derivatives, renewable compliance credit (“RIN”) loss (gain) in excess of net obligation, and impairment expense associated with our investment in Laramie Energy and our share of Laramie Energy’s asset impairment losses in excess of our basis difference.
Achievement of budgeted Adjusted EBITDA results in an Adjusted EBITDA component of 25%. This number is adjusted up or down based on actual Adjusted EBITDA relative to budget. In 2020, the Adjusted EBITDA component was 0% due to the Company’s disappointing financial results due to the COVID-19 pandemic.
The Modified Free Cash Flow component is targeted at 25% of the AIP.This component can range between 0.00% and 200% of the 25% target. Modified Free Cash Flow is Adjusted EBITDA minus the Company’s cash interest expense, minus the amount of annual maintenance capital expenditures and amortized turnaround expenses.
Achievement of budgeted Modified Free Cash Flow results in a Modified Free Cash Flow component of 25%.This number is adjusted up or down based on actual Modified Free Cash Flow relative to budget. In 2020, the Modified Free Cash Flow component was 0% due to the Company’s disappointing financial results due to the COVID-19 pandemic. |
| | | | | |
Group Performance Component | The Group performance component for the Named Executive Officers was measured based on (i) refining group performance in Hawaii (weighted 25%), (ii) refining and logistics group performance in Washington (weighted 25%), (iii) refining and logistics group performance in Wyoming (weighted 15%), (iv) marketing and logistics group performance in Hawaii (weighted 15%), (v) retail group performance in Washington and Idaho (weighted 5%), and (vi) key corporate activities, including mergers and acquisitions, growth execution, systems development, and capital and support activities (weighted 15%).
|
Individual Performance Component | The Individual performance component measures each Named Executive Officer’s personal contributions towards satisfaction of our strategic objectives. These strategic objectives were set based upon each Named Executive Officer’s specific job and responsibilities. Individual performance is determined on a 1 to 5 level basis, with 100% target bonus at level 3 and bonus targets ranging from a floor of 0% at level 1 and up to a maximum of 130% at level 5.
|
•Group Metric = Adjusted EBITDA Component (0.00%) + Modified Free Cash Flow Component (0.00%) + Group Performance Component (40.6%).
•Individual Metric = Individual Performance Component (100.0%)
The amount of each named executive officer’s bonus was then determined by the following formula:
Annual Incentive Plan Cash Bonus = Annual Base Salary x Target Percentage x Group Metric x Individual Metric
Individual targets, individual and group performance and non-equity incentive awards relating to 2020 performance for Named Executive Officers were as follows:
| | | | | | | | | | | | | | | | | |
Name | Base Salary ($) | Group Metric1 (%) | Individual Metric (%) | Annual Incentive Plan Target (% of base salary) | 2020 Non-Equity Incentive Award ($)2 |
William Pate | $700,000 | 40.6% | 100.0% | 100.0% | $284,200 |
Joseph Israel | $515,000 | 40.6% | 100.0% | 80.0% | $167,272 |
William Monteleone | $415,000 | 40.6% | 100.0% | 80.0% | $134,792 |
Matt Vaughn | $400,000 | 40.6% | 100.0% | 75.0% | $121,800 |
Jim Yates | $345,000 | 40.6% | 100.0% | 75.0% | $105,053 |
_____________________________
1 The Adjusted EBITDA Component and Modified Free Cash Flow Component were each 0.0%.
2 2020 Non-Equity Incentive Awards were issued in the form of restricted stock at a value of $16.52 per unit.
In February 2021, the Committee confirmed the cash incentive awards for 2020 performance in accordance with the bonus formula above as part of the annual compensation process. These awards were paid in the first
quarter of 2021 in the form of restricted stock rather than cash. The Committee retains the discretion to adjust the results for any given year and to increase or decrease the size of any performance-based award or payout.
Long-Term Incentive Plan
During 2020, the Committee granted three types of long-term incentive awards to our Named Executive Officers: restricted stock, stock options, and performance restricted stock units. The Committee determined the size of each equity grant to our Named Executive Officers based on our operating and financial performance, individual performance, and market data.
Restricted Stock
The Committee believes that the grant of time-vested restricted stock encourages retention of our Named Executive Officers and aligns the interests of our Named Executive Officers with the interests of our stockholders in creating incentives for long-term value creation. Awards of restricted stock vest ratably over a four-year period. The Committee approved the following grants of restricted stock to our Named Executive Officers in 2018:2020:
| | Named Executive Officer | | Restricted Stock Award ($) | | Shares of Common Stock (#) | Named Executive Officer | | Restricted Stock Award ($) | | Shares of Common Stock (#) |
William C. Pate | | $ | 290,000 |
| | 16,724 | |
William Pate | | William Pate | | $ | 330,000 | | | 16,726 |
Joseph Israel | | $ | 178,125 |
| | 10,272 | Joseph Israel | | $ | 200,000 | | | 10,137 |
William Monteleone | | $ | 140,625 |
| | 8,110 | William Monteleone | | $ | 160,000 | | | 8,109 |
James Matthew Vaughn | | $ | 94,666 |
| | 5,459 | James Matthew Vaughn | | $ | 136,500 | | | 6,918 |
Jim Yates | | $ | 79,567 |
| | 4,589 | Jim Yates | | $ | 92,125 | | | 4,669 |
Stock Options
The Committee believes that the grant of stock options awards effectively aligns the interests of our Named Executive Officers with the interests of our stockholders as such awards incent our Named Executive Officers to enhance share price over the long-term. In 2018,2020, the Committee approved the following grants of nonqualified stock options to our Named Executive Officers:
| | | | | | | | | | | | | | |
Named Executive Officer | | Stock Option Award ($) | | Shares of Common Stock (#) (1) |
William C. Pate | | $ | 660,000 | | | 100,355 |
Joseph Israel | | $ | 400,000 | | | 60,821 |
William Monteleone | | $ | 320,000 | | | 48,657 |
James Matthew Vaughn | | $ | 273,000 | | | 41,510 |
Jim Yates | | $ | 184,250 | | | 28,016 |
(1) The number of shares of common stock subject to options was determined by the Board of Directors, upon recommendation of the Compensation Committee, on February 21, 2020 based on a value of $6.58 per option. The amounts shown do not represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For the aggregate grant date fair value computed in
|
| | | | | | |
Named Executive Officer | | Stock Option Award ($) | | Shares of Common Stock (#) (1) |
William C. Pate | | $ | 580,000 |
| | 100,346 |
Joseph Israel | | $ | 356,250 |
| | 61,635 |
William Monteleone | | $ | 281,250 |
| | 48,659 |
James Matthew Vaughn | | $ | 94,667 |
| | 16,378 |
Jim Yates | | $ | 79,568 |
| | 13,766 |
accordance with FASB ASC Topic 718 please see the “Summary Compensation Table for Fiscal Years Ended December 31, 2020, 2019, and 2018” below. | |
(1) | The number of shares of common stock subject to options was determined by the Compensation Committee on February 27, 2018 based on a value of $5.78 per option. The amounts shown do not represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 please see the “Summary Compensation Table for Fiscal Years Ended December 31, 2018, 2017, and 2016” below. |
The stock option awards allow our Named Executive Officers to purchase our common stock at an exercise price of $17.34,$19.73, our closing stock price on the date of grant, over an eight-year period. These awards vest ratably over a period of four years based on continued employment.
Restricted Stock Units
In 2018,2020, the Committee approved the grant of performance restricted stock units to our Named Executive Officers. These grants are earned based on achieved performance against pre-determined financial goals set by the Committee. The Committee believes that the grant of performance restricted stock units effectively aligns the interests of our Named Executive Officers with the interests of our stockholders because the grants encourage achievement of financial goals that help to create shareholderstockholder value. If threshold performance goals are not achieved, the performance restricted stock units will expire worthless. If threshold performance goals are exceeded, up to 120% of the targeted amount of restricted stock units may be issued.
| | Named Executive Officer | | RSU Award Value ($) | | RSUs Awarded (#) (1) | Named Executive Officer | | RSU Award Value ($) | | RSUs Awarded (#) (1) |
William C. Pate | | $ | 289,994 |
| | 16,724 | |
William Pate | | William Pate | | $ | 330,000 | | | 16,726 |
Joseph Israel | | $ | 178,116 |
| | 10,272 | Joseph Israel | | $ | 200,000 | | | 10,137 |
William Monteleone | | $ | 140,627 |
| | 8,110 | William Monteleone | | $ | 160,000 | | | 8,109 |
James Matthew Vaughn | | $ | 94,659 |
| | 5,459 | James Matthew Vaughn | | $ | 136,500 | | | 6,918 |
Jim Yates | | $ | 79,573 |
| | 4,589 | Jim Yates | | $ | 92,125 | | | 4,669 |
| |
(1) | The value of the restricted stock units was determined by the Compensation Committee on February 27, 2018(1) The value of the restricted stock units was determined by the Board of Directors, upon recommendation of the Compensation Committee, on February 21, 2020 based on the NYSE closing price of our stock on such date. The amounts shown do not represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For the aggregate grant |
date fair value computed in accordance with FASB ASC Topic 718 please see the “Summary Compensation Table for Fiscal Years Ended December 31, 2018, 2017,2020, 2019, and 2016”2018” below.
CEO Compensation
The Committee believes that the Chief Executive Officer has the most control and responsibility for our overall performance of any officer and, accordingly, it is appropriate that he have the relatively greatest percentage of compensation be at risk and tied to our overall performance to best align his interests with those of our stockholders. Due to his responsibility for our performance as Chief Executive Officer, consistent with the intents and purposes of the compensation structure, the Chief Executive Officer’s compensation is structured to be materially higher than the other named executive officers. Due to the impact of COVID-19, our Chief Executive Officer voluntarily reduced his cash salary by 75% through October 2020.
Retirement Benefits
The Company maintains a 401(k) plan under which all full-time employees, including the named executive officers, are eligible to participate. Employee contributions are limited to the maximum amount allowed by the Internal Revenue Code of 1986, as amended (the “Tax Code”). TheDuring 2020, the Company matchesmatched 100% of each employee contribution to the 401(k) plan, up to a maximum match of 6% of each employee’s annual base compensation.
Perquisites
The Company does not currently offer perquisites to its Named Executive Officers that are not available to other employees.
Determining Benefit Levels
The Committee reviews benefit levels periodically to ensure that the plans and programs create the desired incentives for our employees, including Named Executive Officers, which are generally competitive with the applicable marketplace, are cost-effective, and support our human capital needs. Benefit levels are not tied to Company, business area or individual performance, and due to the relatively short history of our Named Executive Officers with us, we have not reviewed or tied retirement benefits to gains realized upon the exercise of stock options or the sale of restricted stock.
Non-Qualified Deferred Compensation Plan
On February 28, 2017, the Board, upon the recommendation of the Committee, approved the adoption of the Par Pacific Holdings, Inc. Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”). The effective date of the Deferred Compensation Plan was March 7, 2017. The primary rationale for adopting the Deferred Compensation Plan was to provide an opportunity for individual retirement savings on a tax- and cost-effective basis. No amounts were deferred under the Deferred Compensation Plan in 2018.2020.
The Deferred Compensation Plan is intended to be a non-qualified deferred compensation plan that complies with the provisions of Section 409A of the Tax Code. The Deferred Compensation Plan provides a select group of senior management employees (including our Named Executive Officers) and directors who are not employees of the Company with the opportunity to defer the receipt of certain cash compensation. The obligations of Par Pacific under the Deferred Compensation Plan will be general unsecured obligations of Par Pacific to pay deferred compensation in the future to eligible
participants in accordance with the terms of the Deferred Compensation Plan from the general assets of Par.Par Pacific. Each participant may elect to defer under the Deferred Compensation Plan a portion of his or her cash compensation that may otherwise be payable in a calendar year. A participant’s compensation deferrals are credited to the participant’s bookkeeping account maintained under the Deferred Compensation Plan. With certain exceptions, deferred compensation obligations will be paid upon: (1) a fixed payment date, as elected by a participant; (2) a participant’s separation from service with Par;Par Pacific; (3) the date of the participant’s death; or (4) the date on which a change in control occurs, as defined by the Deferred Compensation Plan. Payments under the Deferred Compensation Plan shall be made in the form of a cash lump sum.
Severance Plan for Senior Officers
On February 28, 2017, the Board, upon the recommendation of the Committee, approved the adoption of the Par Pacific Holdings, Inc. Severance Plan for Senior Officers (the “Severance Plan”). The effective date of the Severance Plan was March 7, 2017. The Severance Plan is designed to allow participating executives (including our Named Executive Officers) to continue to focus their attention on our business operations and strategic plans without undue concern over their own financial situation, particularly during periods when substantial disruptions and distractions might otherwise prevail.
The Severance Plan generally provides certain severance benefits if a participating executive is discharged without cause or the executive submits a resignation for a good reason, as defined in the Severance Plan (each, a “Qualifying Termination”). In the event of a Qualifying Termination and subject to the executive’s execution of a general release of liability against Par Pacific, the Severance Plan provides the following payments and benefits to the executive officer:
•Payment of one (1) year’s base annual compensation at the time of the executive’s discharge for a Qualifying Termination; and
•Payment of the average annual bonus paid to the executive over the three years prior to the executive’s discharge for a Qualifying Termination.
In addition, in the event of a Qualifying Termination during the 24-month period following a change in control, as defined in the Severance Plan, and subject to the applicable participant’s execution of a general release of liability against Par Pacific, the Severance Plan provides the following payments and benefits to such executive officers instead of the payments set forth above:
•Payment of twenty-four (24) months of base annual compensation in effect at the time of such executive’s discharge for a Qualifying Termination in the case of the Chief Executive Officer of Par Pacific, or eighteen (18) months of base annual compensation in effect at the time of such executive’s discharge for a Qualifying Termination in the case of any other executive;
•Payment of the average annual bonus paid to the executive over the three years prior to the executive’s discharge for a Qualifying Event; and
•Accelerated vesting of the executive’s outstanding unvested equity awards.
Potential payments to our Named Executive Officers that relate to severance pay and termination benefits (including upon a change in control) are described below in further detail below in the section entitled “Named Executive Officer Compensation - Potential Payments upon Termination or Change in Control.”
Management Stock Purchase Plan
On February 26, 2019, our Board of Directors, upon the recommendation of the Committee, adopted of the 2019 Par Pacific Holdings, Inc. Management Stock Purchase Plan (the “MSPP”), which was subsequently approved by our stockholders on May 7, 2019. The MSPP is intended to provide executive management with an opportunity
to receive restricted stock units (“RSUs”) by converting a portion of their cash bonus compensation into RSUs (“Deferred RSUs”) and receiving awards of matching RSUs, the amount of which are determined by the amount of compensation converted (“Matching RSUs”). A Deferred RSU and a Matching RSU each represents a right to receive one share of our common stock in the future, subject to the terms and conditions of the MSPP, including, but not limited to, three year cliff vesting requirements. Shares of common stock issued pursuant to awards of Deferred RSUs and Matching RSUs will be issued from the shares reserved for issuance under the Company’s Long-Term Incentive Plan. There were no purchases under the MSPP during 2020.
Compensation Policies
InsiderShort-Sale, Derivative and Short-SaleHedging Trading Restrictions
To avoid any appearance of a conflict of interest and to prevent opportunities for trading in violation of applicable securities laws, the Company’s insider trading policy prohibits our officers, directors and all other employees from engaging in transactions in which they may profit from short-term speculative swings in the value of the Company's securities.Company’s securities or hedge the economic risk inherent with their ownership of our common stock. This includes “short sales” (selling borrowed securities which the seller hopes can be purchased at a lower price in the future), “put” and “call” options straddles, equity swaps or other derivative securities that are linked directly to our common stock. These prohibitions are intended to prevent our employees, officers and directors from hedging or monetization transactions, including through the economic risk inherent with their ownershipuse of our common stock.financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. In addition, this policy is intended to ensure compliance with all insider trading rules relating to the Company'sCompany’s securities.
Return and/or Forfeiture of Performance-Based Payments or Awards
As required by the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any applicable laws, rules or regulations promulgated by the Securities and Exchange Commission from time to time, our Board of Directors will, to the extent permitted by applicable law, in all appropriate cases, require reimbursement of any bonus or incentive compensation paid to an employee, cause the cancellation of long-term incentive awards, and seek reimbursement of any gains realized on the exercise or vesting of long-term incentive awards attributable to such awards, if and to the extent that: (a) the amount of incentive compensation was calculated based upon the achievement of certain financial results that were subsequently reduced due to a restatement; (b) our Board of Directors or an appropriate committee determines that the employee engaged in any fraud or misconduct which caused or contributed to the need for the restatement; and (c) the amount of the bonus or incentive compensation that would have been awarded to the employee had the financial results been properly reported would have been lower than the amount actually awarded.
Timing of Equity Awards
Generally, the Committee makes incentive pay decisions at regularly scheduled Committee and Board of Director meetings. The Committee may also make compensation determinations at other times during the year for newly-hirednewly hired executives or in connection with the promotion of existing employees. The Committee does not time any form of compensation award, including equity-based awards, to coincide with the release of material non-public information.
Prior to the adoption of the Tax Cuts and Jobs Act of 2017, Section 162(m) of the Tax Code generally disallowed a tax deduction for annual compensation in excess of $1 million paid to certain executive officers; however, compensation above $1 million was deductible if such compensation was “performance-based” and met other criteria as specified under Section 162(m) of the Tax Code. The Committee agrees with the premise of pay-for-performance and intended for its
annual cash bonus awards in excess of $1 million to be deductible under Section 162(m) of the Tax Code. The Committee also believed and currently believes that it is important to preserve flexibility in administering its compensation program in a manner designed to promote varying corporate goals. Accordingly, we have not adopted a policy that all compensation must qualify as deductible under Section 162(m). Therefore, the Committee reserves the right to approve compensation amounts awarded or paid under any of our compensation programs that is not deductible under the Tax Code. Further, effective for tax years after December 31, 2017, the Tax Cuts and Jobs Act repealed the exception for performance-based compensation under Section 162(m) so that all compensation paid to covered employees beginning in 2018 in excess of $1 million will not be deductible, including post-termination and post-death payments, severance, deferred compensation and payments from non-qualified plans.
The Tax Cuts and Jobs Act also modified the definition of a covered employee to include the chief executive officer, the chief financial officer and the three highest paid executive officers other than the chief executive officer and chief financial officer. In addition, once an individual becomes a covered employee for any taxable year beginning after December 31, 2016, that individual will remain a covered employee for all future years, including after termination of employment or even death.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth in this proxy statement with the Company's management and based on such review and discussions and such other matters deemed relevant and appropriate by the Committee, the Compensation Committee recommended to the Company’s Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2018.2020. This report is provided by the following independent directors, who comprised the Compensation Committee throughout 20182020 and through the date hereof:
COMPENSATION COMMITTEE
Walter Dods (Chair)
L. Melvin Cooper
Katherine Hatcher
Narrative Disclosure of Compensation Policies and Practices as Related to Risk Management
In accordance with the requirements of Regulation S-K, Item 402(s), to the extent that risks may arise from our compensation policies and practices that are reasonably likely to have a material adverse effect on us, we are required to discuss those policies and practices for compensating our employees (including employees that are not named executive officers) as they relate to our risk management practices and the possibility of incentivizing risk-taking. We have determined that the compensation policies and practices established with respect to our employees are not reasonably likely to have a material adverse effect on us and, therefore, no such disclosure is necessary.
Named Executive Officer Compensation
Summary Compensation Table. The following table sets forth information regarding compensation earned during the last three fiscal years by our Chief Executive Officer, our Chief Financial Officer, and our other three must highly compensated executive officers (the “Named Executive Officers”) for the fiscal years ended December 31, 2018, 2017,2020, 2019, and 2016.2018.
SUMMARY COMPENSATION TABLE FOR FISCAL YEARS ENDED DECEMBER 31, 2018, 20172020, 2019, and 20162018
| | Name and Principal Position | | Year | | Salary ($) | | Bonus ($) | | Stock Awards ($) (1) | | Option Awards ($)(1) | | Nonequity incentive plan compensation ($) (2) | | All Other Compensation ($) (3) | | Total ($) | Name and Principal Position | | Year | | Salary ($) | | Bonus ($) | | Stock Awards ($) (1) | | Option Awards ($)(1) | | Nonequity incentive plan compensation ($) (2) | | All Other Compensation ($) (3) | | Total ($) |
William C. Pate - President and Chief Executive Officer | | 2018 | | $ | 591,600 |
| | $ | — |
| | $ | 579,988 |
| | $ | 629,169 |
| | $ | 656,676 |
| | $ | 25,700 |
| | $ | 2,483,133 |
| |
William Pate – President and Chief Executive Officer (4) | | William Pate – President and Chief Executive Officer (4) | | 2020 | | $ | 464,712 | | | $ | — | | | $ | 660,008 | | | $ | 631,976 | | | $ | 284,200 | | | $ | 17,100 | | | $ | 2,057,996 | |
| | 2017 | | $ | 560,000 |
| | $ | — |
| | $ | 350,000 |
| | $ | 422,800 |
| | $ | 701,800 |
| | $ | 25,200 |
| | $ | 2,059,800 |
| | 2019 | | $ | 600,000 | | | $ | — | | | $ | 591,600 | | | $ | 624,593 | | | $ | 626,400 | | | $ | 17,920 | | | $ | 2,460,513 | |
| | 2016 | | $ | 460,000 |
| | $ | — |
| | $ | — |
| | $ 2,867,027 (4) | | $ | 135,000 |
| | $ | 5,782 |
| | $ | 3,467,809 |
| | 2018 | | $ | 591,600 | | | $ | — | | | $ | 579,988 | | | $ | 629,169 | | | $ | 656,676 | | | $ | 25,700 | | | $ | 2,483,133 | |
| | | | | | | | | | | | | | | |
Joseph Israel - Senior Vice President | | 2018 | | $ | 484,500 |
| | $ | — |
| | $ | 356,233 |
| | $ | 386,451 |
| | $ | 403,346 |
| | $ | 19,700 |
| | $ | 1,650,230 |
| |
Joseph Israel – Senior Vice President | | Joseph Israel – Senior Vice President | | 2020 | | $ | 515,000 | | | $ | — | | | $ | 400,006 | | | $ | 383,014 | | | $ | 167,272 | | | $ | 17,100 | | | $ | 1,482,392 | |
| | 2017 | | $ | 472,500 |
| | $ | — |
| | $ | 350,000 |
| | $ | 422,800 |
| | $ | 416,813 |
| | $ | 19,200 |
| | $ | 1,681,313 |
| | 2019 | | $ | 500,000 | | | $ | — | | | $ | 363,392 | | | $ | 383,384 | | | $ | 417,600 | | | $ | 17,920 | | | $ | 1,682,296 | |
| | 2016 | | $ | 460,000 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 135,000 |
| | $ | 145,000 |
| | $ | 740,000 |
| | 2018 | | $ | 484,500 | | | $ | — | | | $ | 356,233 | | | $ | 386,451 | | | $ | 403,346 | | | $ | 19,700 | | | $ | 1,650,230 | |
| | | | | | | | | | | | | | | |
William Monteleone – Senior Vice President and Chief Financial Officer | | 2018 | | $ | 382,500 |
| | $ | — |
| | $ | 281,255 |
| | $ | 305,092 |
| | $ | 334,353 |
| | $ | 1,200 |
| | $ | 1,304,400 |
| William Monteleone – Senior Vice President and Chief Financial Officer | | 2020 | | $ | 415,000 | | | $ | — | | | $ | 319,981 | | | $ | 306,413 | | | $ | 134,792 | | | $ | 17,100 | | | $ | 1,193,286 | |
| | 2017 | | $ | 372,500 |
| | $ | — |
| | $ | 250,000 |
| | $ | 163,100 |
| | $ | 340,313 |
| | $ | 1,200 |
| | $ | 1,127,113 |
| | 2019 | | $ | 400,000 | | | $ | — | | | $ | 286,892 | | | $ | 302,672 | | | $ | 350,784 | | | $ | 11,993 | | | $ | 1,352,341 | |
| | 2016 | | $ | 360,000 |
| | $ | — |
| | $ | 197,409 |
| | $ | 80,982 |
| | $ | 75,000 |
| | $ | 12,000 |
| | $ | 714,519 |
| | 2018 | | $ | 382,500 | | | $ | — | | | $ | 281,255 | | | $ | 305,092 | | | $ | 334,353 | | | $ | 1,200 | | | $ | 1,304,400 | |
| | | | | | | | | | | | | | | |
James Matthew Vaughn – Senior Vice President, General Counsel and Secretary | | 2018 | | $ | 362,200 |
| | $ | — |
| | $ | 189,318 |
| | $ | 102,690 |
| | $ | 211,014 |
| | $ | 18,087 |
| | $ | 883,309 |
| |
James Matthew Vaughn – Chief Administrative Officer General Counsel | | James Matthew Vaughn – Chief Administrative Officer General Counsel | | 2020 | | $ | 400,000 | | | $ | — | | | $ | 272,984 | | | $ | 261,405 | | | $ | 121,800 | | | $ | 17,100 | | | $ | 1,073,289 | |
| | 2017 | | $ | 355,000 |
| | $ | — |
| | $ | 200,000 |
| | $ | 157,000 |
| | $ | 214,775 |
| | $ | 16,000 |
| | $ | 942,775 |
| | 2019 | | $ | 390,000 | | | $ | — | | | $ | 217,260 | | | $ | 229,223 | | | $ | 305,370 | | | $ | 17,333 | | | $ | 1,159,186 | |
| | 2016 | | $ | 340,000 |
| | $ | — |
| | $ | 163,370 |
| | $ | 69,811 |
| | $ | 80,000 |
| | $ | 15,345 |
| | $ | 668,526 |
| | 2018 | | $ | 362,200 | | | $ | — | | | $ | 189,318 | | | $ | 102,690 | | | $ | 211,014 | | | $ | 18,087 | | | $ | 883,309 | |
| | | | | | | | | | | | | | | |
Jim Yates – Senior Vice President | | 2018 | | $ | 324,635 |
| | $ | — |
| | $ | 159,147 |
| | $ | 86,376 |
| | $ | 288,885 |
| | $ | 22,216 |
| | $ | 881,259 |
| Jim Yates – Senior Vice President | | 2020 | | $ | 335,000 | | | $ | — | | | $ | 184,239 | | | $ | 176,428 | | | $ | 105,053 | | | $ | 17,100 | | | $ | 817,820 | |
| | 2017 | | $ | 318,270 |
| | $ | — |
| | $ | 155,000 |
| | $ | 96,500 |
| | $ | 303,152 |
| | $ | 18,188 |
| | $ | 891,110 |
| | 2019 | | $ | 335,000 | | | $ | — | | | $ | 162,316 | | | $ | 171,254 | | | $ | 263,561 | | | $ | 16,800 | | | $ | 948,931 | |
| | 2016 | | $ | 309,000 |
| | $ | — |
| | $ | 121,500 |
| | $ | 41,900 |
| | $ | 105,000 |
| | $ | 15,572 |
| | $ | 592,972 |
| | 2018 | | $ | 324,635 | | | $ | — | | | $ | 159,147 | | | $ | 86,376 | | | $ | 288,885 | | | $ | 22,216 | | | $ | 881,259 | |
| |
(1) | The amounts shown represent the aggregate grant date fair value for stock, option, and performance restricted stock unit awards granted to the Named Executive Officers computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in “Note 16 - Stockholders’ Equity” to our audited financial statements for the fiscal year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K filed with the SEC on March 11, 2019. |
| |
(2) | Represents amounts of cash compensation awarded under our Annual Incentive Plan and paid to the Named Executive Officers for performance during the prior year. |
| |
(3) | Amounts paid in 2018 to each Named Executive Officer represent $1,200 paid to each Named Executive Officer other than Mr. Yates for mobile device reimbursement and, except with respect to Mr. Monteleone, matching contributions made by the Company under its 401(k) plan. Mr. Pate received $24,500, Mr. Israel received $18,500, Mr. Vaughn received $16,887, and Mr. Yates received $22,216 in 401(k) matching contributions, respectively. |
(1)The amounts shown represent the aggregate grant date fair value for stock, option, and performance restricted stock unit awards granted to the Named Executive Officers pursuant to the 2012 Long-Term Incentive Plan computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in “Note 18 - Stockholders’ Equity” to our audited financial statements for the fiscal year ended December 31, 2020 included in our 2020 Annual Report on Form 10-K filed with the SEC on March 8, 2021.
(2)Represents amounts of cash compensation awarded under our Annual Incentive Plan and paid to the Named Executive Officers for performance during the prior year. Nonequity incentive plan compensation for 2020 performance was issued in the form of restricted stock rather than cash.
| |
(4) | Represents stock options granted to Mr. Pate in October 2015 for which shareholder approval was received in June 2016 and established the aggregate grant date fair value of the stock options under ASC 718. |
(3)Amounts paid in 2020 to each Named Executive Officer represent matching contributions made by the Company under its 401(k) plan. Each of the named executives received $17,100 in 401(k) matching contributions.
(4)From May 5, 2020 to October 1, 2020, Mr. Pate elected to reduce his cash salary by 75% due to the impact of COVID-19 on the Company.
Grants of Plan-Based Awards in 20182020 Table. The following table sets forth certain information with respect to possible payouts to the Named Executive Officers under our Annual Incentive Plan and each grant of an award made to the Named Executive Officers in 20182020 under the 2012 Long-Term Incentive Plan:
| | | | Estimated Future Payments Under Non-Equity Incentive Plan Awards (1) | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | All Other Stock Awards Number of Shares of Stock or Units | | All Other Option Awards: Number of Securities Underlying Options | | Exercise or Base Price of Option Awards ($/share) | | Grant Date Fair Value of Stock and Option Awards (2) | | Estimated Possible Payments 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 Units (3) | | All Other Option Awards: Number of Securities Underlying Options (4) | | Exercise or Base Price of Option Awards ($/share) | | Grant Date Fair Value of Stock and Option Awards (2) |
Name | | Grant Date | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | | | | | | | | Name | | Grant Date | | Threshold | | Target3 | | Maximum4 | | Threshold | | Target | | Maximum | | | | | | | | |
William C. Pate | | n/a | | $ | — |
| | $ | 591,600 |
| | $ | 769,080 |
| | $ | — |
| | $ | — |
| | $ | — |
| | — |
| | — |
| | $ | — |
| | $ | — |
| |
William Pate | | William Pate | | n/a | | $ | — | | | $ | 700,000 | | | $ | 1,365,000 | | | $ | — | | | $ | — | | | $ | — | | | — | | — | | $ | — | | | $ | — | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | — |
| | 100,346 |
| | $ | 17.34 |
| | $ | 629,169 |
| | 02/21/2020 | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | — | | 100,355 | | $ | 19.73 | | | $ | 631,976 | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | 16,724 |
| | — |
| | $ | — |
| | $ | 289,994 |
| | 02/21/2020 | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | 16,726 | | — | | $ | — | | | $ | 330,004 | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 289,994 |
| | $ | 347,993 |
| | — |
| | — |
| | $ | — |
| | $ | — |
| | 02/21/2020 (5) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 330,000 | | | $ | 396,000 | | | — | | — | | $ | — | | | $ | — | |
Joseph Israel | | n/a | | $ | — |
| | $ | 363,375 |
| | $ | 472,388 |
| | $ | — |
| | $ | — |
| | $ | — |
| | — |
| | — |
| | $ | — |
| | $ | — |
| Joseph Israel | | n/a | | $ | — | | | $ | 412,000 | | | $ | 803,400 | | | $ | — | | | $ | — | | | $ | — | | | — | | — | | $ | — | | | $ | — | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | — |
| | 61,635 |
| | $ | 17.34 |
| | $ | 386,451 |
| | 02/21/2020 | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | — | | 60,821 | | $ | 19.73 | | | $ | 383,014 | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | 10,272 |
| | — |
| | $ | — |
| | $ | 178,116 |
| | 02/21/2020 | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | 10,137 | | — | | $ | — | | | $ | 200,003 | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 178,116 |
| | $ | 213,740 |
| | — |
| | — |
| | $ | — |
| | $ | — |
| | 02/21/2020 (5) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 200,000 | | | $ | 240,000 | | | — | | — | | $ | — | | | $ | — | |
William Monteleone | | n/a | | $ | — |
| | $ | 286,875 |
| | $ | 372,938 |
| | $ | — |
| | $ | — |
| | $ | — |
| | — |
| | — |
| | $ | — |
| | $ | — |
| William Monteleone | | n/a | | $ | — | | | $ | 332,000 | | | $ | 647,400 | | | $ | — | | | $ | — | | | $ | — | | | — | | — | | $ | — | | | $ | — | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | — |
| | 48,659 |
| | $ | 17.34 |
| | $ | 305,092 |
| | 02/21/2020 | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | — | | 48,657 | | $ | 19.73 | | | $ | 306,413 | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | 8,110 |
| | — |
| | $ | — |
| | $ | 140,627 |
| | 02/21/2020 | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | 8,109 | | — | | $ | — | | | $ | 159,991 | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 140,627 |
| | $ | 168,753 |
| | — |
| | — |
| | $ | — |
| | $ | — |
| | 02/21/2020 (5) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 160,000 | | | $ | 192,000 | | | — | | — | | $ | — | | | $ | — | |
James Matthew Vaughn | | n/a | | $ | — |
| | $ | 181,050 |
| | $ | 235,365 |
| | $ | — |
| | $ | — |
| | $ | — |
| | — |
| | — |
| | $ | — |
| | $ | — |
| James Matthew Vaughn | | n/a | | $ | — | | | $ | 300,000 | | | $ | 585,000 | | | $ | — | | | $ | — | | | $ | — | | | — | | — | | $ | — | | | $ | — | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | — |
| | 16,378 |
| | $ | 17.34 |
| | $ | 102,690 |
| | 02/21/2020 | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | — | | 41,510 | | $ | 19.73 | | | $ | 261,405 | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | 5,459 |
| | — |
| | $ | — |
| | $ | 94,659 |
| | 02/21/2020 | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | 6,918 | | — | | $ | — | | | $ | 136,492 | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 94,659 |
| | $ | 113,591 |
| | — |
| | — |
| | $ | — |
| | $ | — |
| | 02/21/2020 (5) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 136,500 | | | $ | 163,800 | | | — | | — | | $ | — | | | $ | — | |
Jim Yates | | n/a | | $ | — |
| | $ | 243,477 |
| | $ | 316,520 |
| | $ | — |
| | $ | — |
| | $ | — |
| | — |
| | — |
| | $ | — |
| | $ | — |
| Jim Yates | | n/a | | $ | — | | | $ | 258,750 | | | $ | 504,563 | | | $ | — | | | $ | — | | | $ | — | | | — | | — | | $ | — | | | $ | — | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | — |
| | 13,766 |
| | $ | 17.34 |
| | $ | 86,376 |
| | 02/21/2020 | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | — | | 28,016 | | $ | 19.73 | | | $ | 176,428 | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | 4,589 |
| | — |
| | $ | — |
| | $ | 79,573 |
| | 02/21/2020 | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | 4,669 | | — | | $ | — | | | $ | 92,119 | |
| | 02/27/2018 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 79,573 |
| | $ | 95,487 |
| | — |
| | — |
| | $ | — |
| | $ | — |
| | 02/21/2020 (5) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 92,125 | | | $ | 110,550 | | | — | | — | | $ | — | | | $ | — | |