§240.14a-12
2016
April 1, 2016
Dear Fellow Stockholders:
| Dear Fellow Stockholders, | March 27, 2023 | ||||
Overview77064.
The level of demand for our productsstock, less debt and services is directly related to drilling and completion activity levels and the capital and operating budgets of our customers, which in turn are influenced heavily by energy prices and the expectation as to future trends in those prices. The precipitous decline in oil and natural gas prices since the middle of 2014 has resulted in a significant decrease in exploration and production activity, and spending by our customers. Despite these significant challenges, 2015 was a successful year for Forum and highlighted below are some of our most noteworthy achievements. I encourage you to review the entire proxy statement and our annual report on Form 10-K for a more comprehensive look at our achievements.
Strong Performance:
To protect the core of our business, we took decisive steps to reduce costs in line with declining activity levels, including capital expenditure reductions and implementing company-wide cost reduction measures. In spite of declining activity, we achieved strong free cash flow due to lower interest expense. Our stronger balance sheet, much improved operating performance, and asthe largest order book in years all combine to set us up exceptionally well for 2023. FET’s board of December 31, 2015directors is pleased with this dramatic improvement in such a short period of time.
Alignmentreconciliation of CompensationGAAP to non-GAAP financial measures.
Our compensation program appropriately rewards executives for producing sustainable growth consistent with our long-term goals. Beyond
Looking Forward:
Similar to 2015, this year is continuing to present significant challenges for the industry. It has been our strategy to be an early-cycle, activity-driven, and scalable companyenter 2023 with a strong balance sheet, a well positioned product offering, and low capital intensity.our largest order backlog in many years. We believe Forum’s performance reflects our successful execution of that strategy andwe can build on FET's good 2022 operating performance.
engagement with FET.
12, 2023
| Description: | Board Recommendation: | |||||||||
Proposal 1 |
| FOR ALL | ||||||||
Proposal 2 |
| FOR | ||||||||
Proposal 3 |
| |||||||||
|
| 2023. | FOR | |||||||
Attached to this notice is a proxy statement setting forth information with respect to the above items and certain other information. Whether or not you plan to attend the annual meeting, please sign, date and return the proxy card in the accompanying envelope. If you do attend the meeting and desire to vote in person, you may do so even though you have previously submitted your proxy.
The
By order of the Board of Directors,  | ||
| John C. Ivascu | ||
 | ||
| ||
Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary | ||
April 1, 2016
920 Memorial City Way,
300
77064
| Table of Contents | |||||||||
| Page | |||||||||
| |||||||||
| ||||||
i
FORUM ENERGY TECHNOLOGIES, INC.
920 Memorial City Way, Suite 1000
Houston, Texas 77024
2016
Notice or voting instruction form, as applicable.
vote the shares in their discretion. The New York Stock Exchange, however, precludes brokers from exercising voting discretion, but are not permitted to vote on certain proposals without specific instructions from the beneficial owner. Under NYSE rules, brokers holding shares in “street name” for their beneficial holder clients will have discretionand may elect not to vote only on the ratificationany of the appointment of our independent registered public accounting firm. Brokers cannot vote on the other matters to be considered at the meeting without instructions from the beneficial owners.proposals unless you provide voting instructions. If you do not instructprovide voting instructions and the broker elects to vote your shares on some but not all matters, it will result in a “broker non-vote” for the matters on which the broker does not vote. As a result, we urge you to promptly provide voting instructions to your broker how to voteensure that your shares are voted on those matters, your broker will not vote on your behalf.
all of the proposals.
and
Name and Address (1) | Number of Shares Beneficially Owned (2) | Percent of Class | ||||||
| Stockholders owning 5% or more: | ||||||||
MacKay Shields LLC 1345 Avenue of the Americas, 42nd Floor New York, NY 10105 (3) | 1,199,110 | 11.6% | ||||||
Polen Capital Management, LLC 1825 NW Corporate Blvd., Suite 300 Boca Raton, FL 33431 (4) | 946,123 | 9.2 | ||||||
| Directors, Director Nominees, and Named Executive Officers: | ||||||||
C. Christopher Gaut (5) | 310,740 | 3.0 | ||||||
Evelyn M. Angelle (6) | 10,683 | * | ||||||
John A. Carrig (7) | 56,787 | * | ||||||
| Michael McShane | 10,936 | * | ||||||
| Louis A. Raspino, Jr. | 6,930 | * | ||||||
| Dr. Emily Reichert, Ph.D. | 3,093 | * | ||||||
| Paul E. Rowsey III | 6,539 | * | ||||||
| Neal A. Lux | 107,612 | * | ||||||
| D. Lyle Williams | 54,524 | * | ||||||
| John C. Ivascu | 40,234 | * | ||||||
| All executive officers and directors as a group (11 persons) | 643,582 | 6.2% | ||||||
2024. Messrs. Gaut and Raspino, and Dr. Reichert, each a Class I director, were last elected by stockholders at the 2022 Annual Meeting of Stockholders, and their term will expire at the annual meeting of stockholders to be held in 2025. Our board of directors believes that the current number of directors is appropriate for the Company at this time, taking into consideration the Company’s size and the broad diversity of skill sets.
Our
| Skill / Qualification | Importance | ||||||||||
| Demonstrated Leadership - CEO, CFO, COO - Public Company Board | Directors with prior experience holding key leadership positions provide us with unique insights. In addition, experience serving on other public company boards of directors is valuable. These people also generally possess leadership qualities and the ability to develop those attributes in others. Their experience developing talent and solving problems in large, complex organizations makes them a valuable asset to our board of directors. | ||||||||||
| Financial - Capital Markets - Mergers & Acquisitions - Audit & SEC Reporting | Accurate financial reporting and robust auditing are critical to maintain the trust of our stockholders. Five of our directors qualify as audit committee financial experts, if so designated, and all of our directors are financially literate. | ||||||||||
Industry Experience - Up-, Mid-, & Downstream - Services Company - Energy Transition | Diverse industry experience equips board members with an understanding of the risks and opportunities associated with different market factors affecting our business, and enhances their knowledge of regulations and key industry players we must consider. In addition, relevant industry experience improves our business strategy as we navigate complex market conditions. | ||||||||||
| Operations - Manufacturing - International - Information Security | Experience navigating the unique challenges faced by a manufacturing company is particularly beneficial to develop and navigate the Company’s strategic course. In addition, having a domestic and international perspective assists us with the global nature of our business. Experience, knowledge, certifications, skills or other background in information security can be valuable in the board’s oversight of information security risks and policies. | ||||||||||
| Environmental and Social Risk Oversight - Climate Change - Diversity, Equity & Inclusion | Work experience, certifications, degrees, knowledge, skills or other background in climate-related risks and diversity, equity, and inclusion can be beneficial to the Company in the oversight of related policies and initiatives. | ||||||||||
| Demographics - Gender - Racial / Ethnic | Our focus on achieving gender and ethnic diversity on the board of directors exemplifies the Company’s commitment to diversity throughout the organization. The board of directors is committed to continuing to focus on diversity as board positions become available following a director’s retirement in accordance with the Corporate Governance Guidelines. | ||||||||||
| Angelle | Carrig | McShane | Raspino | Reichert | Rowsey | Gaut | Lux | |||||||||||||||||||
| Leadership | ||||||||||||||||||||||||||
| CEO, CFO, COO | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ||||||||||||||||||
| Public Company Board | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ||||||||||||||||||||
| Financial | ||||||||||||||||||||||||||
| Capital Markets | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ||||||||||||||||||||
| Mergers & Acquisitions | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | |||||||||||||||||||
| Audit & SEC Reporting | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | |||||||||||||||||||||
| Prior Industry Experience | ||||||||||||||||||||||||||
| Up-, Mid-, & Downstream | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | |||||||||||||||||||||
| Services Company | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ||||||||||||||||||||
| Energy Transition | ⚫ | ⚫ | ||||||||||||||||||||||||
| Operations | ||||||||||||||||||||||||||
| Manufacturing | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | |||||||||||||||||||||
| International | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | |||||||||||||||||||
| Information Security | ⚫ | ⚫ | ||||||||||||||||||||||||
| Environmental and Social Risk Oversight | ||||||||||||||||||||||||||
| Climate Change | ⚫ | ⚫ | ||||||||||||||||||||||||
| Diversity, Equity & Inclusion | ⚫ | ⚫ | ⚫ | ⚫ | ||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Engineering / Technology | ⚫ | ⚫ | ⚫ | |||||||||||||||||||||||
| Legal | ⚫ | ⚫ | ||||||||||||||||||||||||
| Innovation / Entrepreneurship | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | |||||||||||||||||||
| Demographics | ||||||||||||||||||||||||||
| Gender | F | M | M | M | F | M | M | M | ||||||||||||||||||
| Racially/Ethnically Diverse | ⚫ | |||||||||||||||||||||||||
Forum’s Board – At a Glance
2015 Meeting Attendance
Board Nominees – Class I Directors
C. Christopher Gaut
Mr. Gaut has served as our President, Chief Executive Officer and Chairmanother current members of the board of directors since August 2010 and as one of our directors since December 2006. He served as a consultant to L.E. Simmons & Associates, Incorporated (“LESA”), the ultimate general partner of SCF-V, L.P., SCF 20212A, L.P., SCF-VI, L.P., SCF 2012B, L.P. and SCF-VII, L.P. (collectively, “SCF”), our largest stockholder, from November 2009 to August 2010. Mr. Gaut served at Halliburton Company, a leading diversified oilfield services company, as President of the Drilling and Evaluation Division and prior to that as Chief Financial Officer, from March 2003 through April 2009. From April 2009 through November 2009, Mr. Gaut was a private investor. Prior to joining Halliburton Company in 2003, Mr. Gaut was the Co-Chief Operating Officer of Ensco International, a provider of offshore contract drilling services. He also served as Ensco’s Chief Financial Officer from 1988 until 2003. Mr. Gaut is currently a member of the board of directors of Ensco plc, the successor to Ensco International. The board is nominating Mr. Gaut because he is our chief executive officer and, in addition, has experience in other executive leadership roles of energy companies, including as a senior operations and financial executive; expertise in the oil and gas business; knowledge of the demands and expectations of our customers; experience in building a successful oil service public company; and service as a board member of another public company.
David C. Baldwin
Mr. Baldwin was appointed as a director of Forum in May 2005. Mr. Baldwin is Co-President of LESA, and has been an officer of that company since 1991. Prior to joining LESA, Mr. Baldwin was a drilling and production engineer with Union Pacific Resources, an independent natural gas and oil exploration and production company. Mr. Baldwin serves as a director of Rockwater Energy Solutions, Inc., a private energy services company; Beckman Production Services, Inc., a private energy services company; Oil Patch, Inc., a private energy services company; and served as a director of Complete Production Services, Inc., a provider of specialized oil and gas completion and production services. The board of directors is nominating Mr. Baldwin because of his extensive experience in identifying strategic growth trends in the energy industry and evaluating potential transactions. Further, his service as a Managing Director of the general partner of our largest stockholder provides a valuable perspective into its insights and interests.
Franklin Myers
Mr. Myers was appointed as a director of Forum in September 2010 and the Lead Independent Director of the board of directors in December 2011. Mr. Myers serves as Senior Advisor to Quantum Energy Partners, a Houston-based private equity firm. Previously, Mr. Myers served as Senior Advisor to Cameron International Corporation, a publicly traded provider of flow equipment products, from April 2008 through March 2009, prior to which, from 2003 through March 2008, he served as the Senior Vice President and Chief Financial Officer. From 1995 to 2003, he served as Senior Vice President and President of a division within Cooper Cameron Corporation, as well as General Counsel and Secretary. Prior to joining Cooper Cameron Corporation in 1995, Mr. Myers served as Senior Vice President and General Counsel of Baker Hughes Incorporated, and as attorney and partner at the law firm of Fulbright & Jaworski (now known as Norton Rose Fulbright). Mr. Myers currently serves on the board of directors of ION Geophysical Corporation, a technology-focused seismic solutions company, Comfort Systems USA, Inc., a national heating, ventilation and cooling company, and HollyFrontier Corporation, a refining and marketing company. Mr. Myers also served as an operating adviser for Paine Partners, a private equity fund, from 2009 through December 2012. The board of directors is nominating
Mr. Myers because his extensive experience as both a financial and legal executive makes him uniquely qualified as a valuable member of our board of directors. Mr. Myers has been responsible for numerous successful finance and acquisition transactions throughout his career, and his expertise gained through those experiences has proven to be a significant resource for our board of directors. In addition, the board of directors in nominating Mr. Myers because his service on boards of directors of other NYSE-listed companies enables him to observe and advise on favorable governance practices pursued by other public companies.
Directors
– Age:
55, Positions: Audit Committee Chairperson; Nominating, Governance and Sustainability Committee Membervaluable perspective on important human capital issues relevant to our Company. She is financially literate and considered by our board of directors to be an audit committee financial expert.
– Age: 71, Positions: Nominating, Governance and Sustainability Committee Chairperson; Audit Committee Member
major public company with global reach and his strategic, financial and management acumen. In addition, Mr. Carrig brings valuable insight as a result of his long history as a customer for oilfield equipment and services.
Michael McShane
As a result of his significant professional experience and particular knowledge in finance, accounting, treasury and tax, he is financially literate and considered by our board of directors to be an audit committee financial expert.
Terence M. O’Toole
Mr. O’Toole was appointed as a director of Forum and a member of the Nominating, Governance & Compensation Committee in April 2012. Mr. O’Toole is the Co-Managing Partner of Tinicum Incorporated, the management company of each of Tinicum L.P., Tinicum Capital Partners II, L.P., and Tinicum Capital Partners II Add-On, L.P. (and each of their affiliated partnerships), together all such partnerships referred to herein as the “Tinicum Partnerships”. Prior to joining the Tinicum Partnerships in January 2006, Mr. O’Toole spent twenty-one years at Goldman, Sachs & Co., where he was a partner, a member of the investment committee and the partnership committee, and the chief operating officer of the principal investment area. Mr. O’TooleGaut is currently a member of the board of directors of various privately held companies in which Tinicum has an investment, including Specialty Waste Partners,EOG Resources, Inc., a waste removal company; Skyway Towers Holdings II LLC,public independent crude oil and natural gas company, and previously served as a developer, ownerdirector of Valaris plc, a provider of offshore contract drilling services, and operatorKey Energy Services Inc., a well services provider.
public companies.
Jr. – Age:
70, Positions: Compensation and Human Capital Committee ChairpersonJohn Schmitz
Mr. Schmitzinclusiveness.
Andrew L. Waite
Mr. Waite was appointedserved as a director of Enbridge, Inc., an energy infrastructure company, following the completion of Enbridge’s acquisition of Spectra Energy Corp in August 2010. Mr. Waite is Co-President of LESA and has been an officer of that company since 1995.February 2017 until October 2018. He was previously Vice President of Simmons & Company International, where he served from August 1993 to September 1995. From 1984 to 1991, Mr. Waite heldalso a number of engineering and project management positions with the Royal Dutch/Shell Group, an integrated energy company. Mr. Waite currently serves on the board of directors of Atlantic Navigation Holdings, an operator of offshore vessels. He has also served on the board of directorsdirector of Complete Production Services, Inc., a provider of specialized oil and gas completion and production services, from 2005 to 2009; Hornbeck OffshoreMarch 2007 until February 2012 and served as a director of Superior Energy Services, Inc., a provider of marinespecialized oilfield services toand equipment, from the completion of Superior Energy Services’ acquisition of Complete Production Services in February 2012 until February 2021. Mr. McShane also previously served as a director of Oasis Petroleum Inc., a public exploration and production oilfield service, offshore constructioncompany, from May 2010 until November 2020.
The following table sets forth information as of March 21, 2016 with respect to the beneficial ownership of our common stock by (1) each of our stockholders who is known by us to be a beneficial owner of more than 5% of our common stock, (2) our directors and director nominees and the persons named in the “Summary Compensation Table” below and (3) all of our current executive officers and directors as a group. Unless otherwise indicated, allresult of such stockhis service on the Board of Trustees of a public school system, work with Cherokee Nation officials to improve educational opportunities for Native Americans, and direct work as a private company board member to address racial and gender initiatives. Mr. Rowsey is owned directly,a graduate of Duke University and Southern Methodist University School of Law, and he is a citizen of the Cherokee Nation.
Name and Address | Number of Shares Beneficially Owned (1) | Percent of Class | ||||||
Stockholders owning 5% or more: | ||||||||
SCF-V, L.P. and Related Entities | 24,257,800 | 26.6 | ||||||
Directors and Nominees: | ||||||||
C. Christopher Gaut (3) | 3,637,951 | 3.9 | ||||||
Evelyn M. Angelle | 82,755 | * | ||||||
David C. Baldwin(2)(4) | 24,292,221 | 26.6 | ||||||
John A. Carrig (5) | 76,883 | * | ||||||
Michael McShane | 95,412 | * | ||||||
Franklin Myers | 99,628 | * | ||||||
Terence M. O’Toole(6) | 2,987,774 | 3.3 | ||||||
Louis A. Raspino | 91,148 | * | ||||||
John Schmitz(7) | 2,183,822 | 2.4 | ||||||
Andrew L. Waite(2)(8) | 24,278,908 | 26.6 | ||||||
Other Named Executive Officers: | ||||||||
Prady Iyyanki | 122,589 | * | ||||||
James W. Harris | 623,453 | * | ||||||
James L. McCulloch | 525,751 | * | ||||||
Pablo Mercado | 129,239 | * | ||||||
All current executive officers and directors as a group (14 persons) | 35,062,816 | 38.4 | ||||||
* Less than 1% of issuedhis general business acumen.
|
|
|
|
|
|
|
|
|
|
|
Generally
Our non-employee director compensation program consists of an annual cash retainer and a value-based equity grant for all non-employee directors. We believe the cash retainer and annual equity awards provide us with an essential and valuable tool to ensure that the board can recruit talented directors to serve on the board and ensure that such directors’ interests are aligned with our stockholders. TheHuman Capital Committee periodically commissions Pearl Meyer &engages Meridian Compensation Partners, LLC (“Pearl Meyer”Meridian”), its independent compensation consultant, to conduct a market-based director compensation study.
Directors’ fees
All non-employee directors received anstandard annual base cash retainer of $70,000. C. Christopher Gaut$70,000 in the form of the Company’s common stock or other eligible forms of beneficial ownership. As of December 31, 2022, all of our directors were in compliance with the Stock Ownership Requirements Policy or were within the five year grace period afforded by the policy for them to obtain compliance. Pursuant to the Stock Ownership Requirements Policy, if a director has satisfied the policy’s requirements on a prior determination date, a decrease in the applicable closing stock price following such date does not cause a director to be non-compliant with the policy.
Director equity-based compensation
Each non-employee director receives equity-based compensation in the form of restricted stock or restricted stock units. The form of award to a director is at the election of that director. Awards of restricted stock and restricted stock units for 2015 are more fully described in the table below. For the 2015 annual award made in February 2015, the award totaled an amount equal to $125,000 (rounded up to the nearest whole share), calculated based on the stock price at the close of trading on the relevant grant date. The 2015 annual awards vested twelve months from the date of grant. A director may elect to defer settlement of restricted stock units, in which case such settlement will occur upon termination of service in a cash lump sum or in annual installments over a period no longer than 10 years.
| Director Compensation for the year ended December 31, 2015 | ||||||||||||
| Name | Fees Earned in Cash ($) | Stock Awards (1) ($) | Total ($) | |||||||||
Evelyn M. Angelle | 90,000 | 125,007 | 215,007 | |||||||||
David C. Baldwin | 70,000 | 125,007 | 195,007 | |||||||||
John A. Carrig | 77,500 | 125,007 | 202,507 | |||||||||
Michael McShane | 85,000 | 125,007 | 210,007 | |||||||||
Franklin Myers | 100,000 | 125,007 | 225,007 | |||||||||
Terence M. O’Toole | 77,500 | 125,007 | 202,507 | |||||||||
John Schmitz | 80,000 | 125,007 | 205,007 | |||||||||
Louis A. Raspino | 77,500 | 125,007 | 202,507 | |||||||||
Andrew L. Waite | 70,000 | 125,007 | 195,007 | |||||||||
| ||||||||
| Non-Executive Director Compensation for the | ||||||||
| Name | Total ($) | |||||||
| Evelyn M. Angelle | 245,000 | |||||||
| John A. Carrig | 240,000 | |||||||
| Michael McShane | 247,500 | |||||||
| Louis A. Raspino, Jr. | 235,000 | |||||||
| Dr. Emily Reichert, Ph.D. | 225,000 | |||||||
| Paul E. Rowsey III | 115,000 | |||||||
John Schmitz (1) | 230,000 | |||||||
| Name | Option Awards | Restricted Stock Units/Restricted Stock (1) | ||||||
Evelyn M. Angelle | 12,617 | 19,626 | ||||||
David C. Baldwin | — | 6,692 | ||||||
John A. Carrig | 6,549 | 19,626 | ||||||
Michael McShane | 28,786 | 6,692 | ||||||
Franklin Myers | 1,628 | 6,692 | ||||||
Terence M. O’Toole | — | 6,692 | ||||||
John Schmitz | 1,628 | 6,692 | ||||||
Louis A. Raspino | 6,179 | 6,692 | ||||||
Andrew L. Waite | — | 15,133 | ||||||
| ||||||||
| Name | Restricted Stock Units/Restricted Stock (1) | |||||||
| Evelyn M. Angelle | 4,248 | |||||||
| John A. Carrig | 4,248 | |||||||
| Michael McShane | — | |||||||
| Dr. Emily Reichert, Ph.D. | — | |||||||
| Paul E. Rowsey III | — | |||||||
| Louis A. Raspino, Jr. | — | |||||||
John Schmitz (2) | — | |||||||
Director deferred compensation
Non-employee directors are eligible to participate in our deferred compensation plan. The plan provides that a director may defer all or any portion of his or her cash retainer paid for services as a director. All deferred cash amounts are credited with earnings through
way that we do business, establish the framework for our governance programs and dictate the way management is expected to interact internally and externally.
The chart below explains the purpose of each level of hierarchy inmaximize stockholder value and maintain adherence to our board of director’s leadership structure. More detail with regard to the composition, meetings and activities of each of the committees can be found below under “—Board Committees”.
Core Values.
protect• Protecting our assets and customer assets;
foster• Fostering a safe and healthy work environment;
deal• Dealing fairly with customers and other third parties;
conduct• Conducting international business properly;
report• Reporting misconduct; and
protect• Guarding employees from retaliation.
Employees,
| Role | Multiple | ||||
| Executive Chairman / CEO | 5x | ||||
| Non-executive director | 3x | ||||
| Executive Vice President | 2x | ||||
| Corporate Senior Vice President | 1x | ||||
v | ||
v Two directors have been formally designated by our board of directors as audit committee financial | ||
vWe have six directors who have served or are serving as a Chief Executive Officer and five directors who have served as a Chief Financial Officer. | ||
vDiversity and inclusion are part of our values and we believe our board of directors encompasses a diverse mix of perspectives, experiences, geography, gender, and race/ethnicity. To that end, two of our directors are female (one of whom chairs our Audit Committee) and one of our directors is racially/ethnically diverse. As of March 17, 2023, 50% of our non-executive board member seats were held by individuals of under-represented categories on public company boards. Our board of directors is committed to establishing further gender and ethnic diversity. | ||
committees. intent to influence legislation. if requested by a major stockholder, ensuring he is available for consultation and direct communication with such stockholder. During periods in which the roles of Chairman of the Board and Chief Executive Officer are combined, our Corporate Governance Guidelines provide that there must be a Lead Independent Director; however, our board of directors believes that the appointment of a Lead Independent Director is a governance best practice, regardless of whether the roles of Chief Executive Officer and Chairman of the Board have been combined. held at least one executive session at each of its regularly scheduled meetings. result of a certification she earned and business experience she possesses. group, as applicable. • Review and approve or recommend, as applicable, corporate compensation goals and objectives relevant to our Chief Executive Officer and other executive officers;Director Independence. Our Corporate Governance Guidelines provide that a majority of the members of the board of directors and all of the members of the Audit Committee and the Nominating, Governance & Compensation and Human Capital Committee must qualify as “independent directors” in accordance with the NYSE listing standards. In addition, it is the policy of the board of directors that all the members of the Audit Committee members also satisfy the criteria for independence under applicable provisions of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) and applicable SEC rules. No director is considered independent unless the board of directors affirmatively determines that he or she has no material relationship with us, either directly or as a partner, stockholder or officer of an organization that has a relationship with us. The NYSE listing standards include objective tests that can disqualify a director from being treated as independent, as well as a subjective element, under which the board of directors must affirmatively determine that each independent director has no material relationship with us, either directly or as a partner, stockholder or officer of an organization that has a relationship with us. The board of directors considers all relevant facts and circumstances it deems relevant in making independence determinations.Our board of directors has determined that all ninesix of our current non-management directors (Ms. Angelle, Dr. Reichert and Messrs. Baldwin, Carrig, McShane, Myers, O’Toole, Raspino Schmitz and Waite)Rowsey) qualify as “independent directors” in accordance with the listing standards of the NYSE and that each member of the Audit Committee and the Nominating, Governance & Compensation and Human Capital Committee qualifies as “independent” under the Exchange Act and applicable SEC rules. In 2022, the board of directors also determined that Mr. Schmitz was independent under these standards. Mr. Schmitz retired from the board of directors in March 2023. In addition, Mr. Gaut does not qualify as independent given his positionprior service as our President and Chief Executive Officer, and Mr. Lux does not qualify as independent given his current service as our President and Chief Executive Officer.In making its subjective determination that each such director is independent, the board of directors reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities as they may relate to our company and management. The board of directors considered the transactions in the context of the NYSE’s objective listing standards, our Corporate Governance Guidelines, and the additional standards established for members of audit committees and the SEC and U.S. Internal Revenue Service standards for compensation committee members.In connection with its determination as to the independence of Messrs. Baldwin and Waite, our board of directors considered the relationships between Forum and SCF and its affiliates, our largest stockholder. In addition,Mr. Schmitz in connection with its determination as to the independence of Messrs. O’Toole and Schmitz,2022, our board of directors considered the relationships between us and each of Tinicum and companies affiliated with Mr. Schmitz.For a description of the agreements and transactions between us and each of SCF and its affiliates, Tinicum and its affiliates, and Mr. Schmitz and hisSchmitz’s affiliates, please see “Conflicts of Interest and Related Person Transactions.” Our board of directors believes that these transactions and relationships dodid not adversely affect Messrs. Baldwin’s, O’Toole’s,Mr. Schmitz’s or Waite’s ability or willingness to act in the best interests of Forum and its stockholders or otherwise compromise each such director’shis independence. NoneDuring 2022, Forum did not17use corporate funds for the purpose of our directors serves as a director, executive officerpolitical advocacy or employee of a non-profit organizationcampaign contributions.Corporate funds were also not directed to which we made payments or contributions in excess of $25,000 overtrade organizations with the last three fiscal years.Separation of Chairman and CEO Roles. Our bylaws give the board of directors the flexibility to determine whether the roles of Chairman of the Board and Chief Executive Officer should be combined or separate. Our board of directors has chosen to combine theThe roles of Chief Executive Officer and Chairman are currently separate, with Mr. Gaut, our former President and Chief Executive Officer, serving as Executive Chairman of the Board, both of which are held by Mr. Gaut. The board of directors, believes that havingand Mr. Lux serving as our current President and Chief Executive Officer.We believe separating these roles, while retaining Mr. Gaut fill both roles remainsin the best leadership structure for us at this time. During periodsrole of Executive Chairman, allows Mr. Lux to focus on the day-to-day-management of the business and on executing our strategic priorities, while also allowing Mr. Gaut to use his significant level of experience as a chief executive and board chairman in whichcontinuing to lead the officesboard of Chairmandirectors and Chief ExecutiveOfficer are combined, our Corporate Governance Guidelines provide that there shall be aadvice and counsel to Mr. Lux.Strong Lead Independent Director.Mr. MyersMcShane is our Lead Independent Director. Director, a position he has held since May 2017.As Lead Independent Director, he presides over the executive sessions of the non-management directors, and is responsible for serving as a liaison between the Executive Chairman of the Board and the independent directors, approving meeting schedules, and, non-management directors.Executive Sessions. The non-management directors meet regularly in executive session without management participation before and/or after regularly scheduled board of directors meetings. In addition, our Corporate Governance Guidelines provide that, if the group of non-management directors includes a director who is not independent under NYSE listing standards, the independent directors will meet in executive session at least once annually. Currently, the director who presides at these meetings is the Lead Independent Director. Our Corporate Governance Guidelines provide that, if theAs Lead Independent Director, ceases to be independent, then the presiding director will be chosen by a voteMr. McShane presides over these meetings of the non-managementindependent directors. In 2022, our board of directors or independent directors, as the case may be.Board’s Role in Risk Oversight. Our board of directors is actively involved in oversight of risks that could affect us.us and in making regular assessments of risk a priority. This oversight function is conducted primarily through committees of our board of directors, but the full board of directors retains responsibility for the general oversight of risks, including strategic risks. The risks described in this section include those formally monitored at a board of directors or committee level but do not represent a complete list of all areas that are considered and addressed from time to time by the board of directors and its committees. For more information on risks that affect our business, please see our most recent Annual Report on Form 10-K and other filings we make with the SEC. The Audit Committee is charged with oversight of our system of internal controls and risks relating to financial reporting, legal, regulatory and accounting compliance.compliance, and litigation. Our board of directors satisfies its oversight responsibility through fullby receiving thorough reports from the Audit Committee chairperson regarding the committee’s considerations and actions, as well as through regular reports directly from officers responsible for the oversight of particular risks. Management has implementedestablished an enterprise risk management process whichthat includes key leaders within the organization and that is reviewed on a periodican annual basis by the Audit Committee to ensureprovide for consistency of risk considerations in making business decisions. Under this framework, management assesses the likelihood and potential impacts of risks within the next three years, and annually reassesses the risk environment. As part of the process that has been implemented, risks impacting the Company, including risks related to human capital, financing, intellectual property and technology, supply chain, macroeconomics, and environmental, social and governance matters, are taken into consideration and presented to the Audit Committee. In addition, we have an independent internal audit systems in placedepartment reporting directly to reviewthe Audit Committee that reviews adherence to established policies, procedures and procedures, which are supported by a separate internal audit department. accounting controls.The Nominating, Governance & Compensation and Human Capital Committee also oversees risks related to our compensation programs and management retention matters. An independent compensation consultant is under retainer by the committee to review compensation and development,regulatory risks and trends.The NG&S Committee oversees the composition and leadership structure of the board of directors, anddirectors; corporate governance risks. Regular assessmentsrisks; our environmental, social and governance (ESG) program and disclosures; information technology matters,18including our cybersecurity program; and our overall risk management framework. With the NG&S Committee’s oversight, we have developed disclosures related to our environmental focus, emissions, energy consumption, waste management, natural resources, fleet, political contributions, and workforce diversity. These disclosures are published on our website at https://f-e-t.com/hse/. The Company has a Chief Compliance Officer who reports directly to the Chief Executive Officer. Responsibilities of riskthe Chief Compliance Officer include quarterly presentations to the Audit Committee regarding regulatory compliance, litigation, and allegations of misconduct and presentations to the board of directors regarding certain litigation and regulatory matters.Information Security. Maintaining and protecting the Company's information and trade secrets is of utmost importance. Through the NG&S Committee, which is solely comprised of independent members, the board of directors monitors cybersecurity related matters. The NG&S Committee receives an Information Technology Report from management at least once during the year. During such reports, management presents to the NG&S Committee programs being implemented to mitigate cybersecurity risks and improve the efficiency of the Company’s information technology resources. The Company has engaged outside consultants to analyze, audit and improve potential cybersecurity weaknesses. In addition, employees are provided with online training courses to build awareness around potential cybersecurity scams and tested periodically to maintain their focus in this important area. The Company maintains cybersecurity insurance to defray costs associated with an information security breach. There have been no material information security breaches in the past three years. Ms. Evelyn Angelle possesses information security skills as a priority for us.Accounting and Auditing Concerns. The Audit Committee has established procedures to receive, retain and treat complaints regarding accounting, internal accounting controls or auditing matters and to allow for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters.Communication with the Board.Stockholders and other interested parties may make their concerns known confidentially to the board of directors as a group or the non-management directors individually (including to the Lead Independent Director) by submitting a communication in an envelope addressed to the “Board of Directors,” a specifically named non-management director or the “Non-Management Directors” as a group, in care of the Secretary.of: John C. Ivascu, Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary, 10344 Sam Houston Park Drive, Suite 300, Houston, Texas 77064. All such communications will be conveyed as applicable, to the Chairman of the Board, the full board of directors, the specified non-management director or the non-management directors as a group.Trading, Hedging and Pledging Matters. Our Insider Trading Policy applies to all directors, officers, and employees of the Company who receive or are aware of material, non-public information regarding (i) the Company and (ii) any other company with publicly-traded securities, including the Company’s customers, joint-venture or strategic partners, competitors, vendors and suppliers, obtained in the course of employment by or in association with the Company. Our Insider Trading Policy prohibits all directors, officers and employees from engaging in short-term (i.e., short-swing trading) or speculative transactions involving Company stock. Our Insider Trading Policy prohibits the purchase or sale of puts, calls, options and other derivative securities based on Company stock. Our Insider Trading Policy also prohibits short sales, margin accounts, hedging transactions, pledging of Company stock as collateral and, with the exception of Rule 10b5-1 trading plans as noted below, standing orders placed with brokers to sell or purchase Company stock. Our Insider Trading Policy prohibits our directors, officers and employees from purchasing or selling Company stock while in possession of material, non-public information. As such, and in addition to our pre-clearance procedures, our directors, executive officers and certain other employees may only buy or sell Company securities in the public market during specified periods approved by the General Counsel. However, we do permit our directors and employees to adopt and use Rule 10b5-1 trading plans. This allows directors, officers and employees to sell and diversify their holdings in Company stock over a designated period by adopting pre-arranged stock trading plans at a time when they are not aware of material non-public information concerning the Company, and thereafter sell shares of Company stock in accordance with the terms of their stock trading plans.Diversity. Our board of directors and executive management are committed to maintaining a workforce that is comprised of qualified individuals with diversity in background and thought. Each of the Company's last two non-executive director appointments were gender or ethnically diverse. Going forward, the board of directors will actively seek to achieve diversity of personal and professional experiences. When assessing qualifications of prospective nominees, it will consider diversity in the broadest sense, including gender, race and ethnicity.19Environmental and Social Commitment.Environmental: In addition to receiving regular reports regarding the Company’s overall safety performance and the actions being taken to achieve the highest level of safety for our employees and customers, the NG&S Committee oversees the Company’s environmental programs and policies. We believe our environmental programs and policies are appropriate for our size, maturity as a publicly traded company and financial capacity. We regularly assess the size and adequacy of our environmental program. We have allocated additional resources to provide a greater level of focus on the improvement of our environmental initiatives. Through these additional resources, we have focused our attention on the Company’s carbon footprint, continued compliance in jurisdictions where we operate and the implementation of environmental programs. We have established an enterprise level environmental policy and we continue to encourage our suppliers to place greater emphasis in this area. In 2022, there were no reportable spills of hazardous waste as defined by the Environmental Protection Agency’s regulations. In 2021, we implemented a program to improve monitoring of our energy usage. Available on our website is a summary of air emissions, energy consumption, waste management, and fleet fuel usage. In addition, we are highly focused on developing technology for our customers to improve their energy efficiency and reduce their carbon footprint. We are not an “extractive company” and, therefore, do not make payments to governments to unlock wealth from the ground.As we look ahead, we believe the development of technology that can be utilized by our customers will provide the greatest positive impact on the environment. Forum currently manufactures products and equipment, that can lower the carbon footprint of our customers. In addition, we are taking steps to invest in technologies that further achieve the goal of reducing methane and other greenhouse gas emissions. For example, in December 2021, Forum acquired assets of Reach Production Solutions, which is an early stage multiphase compression technology with potential applications in artificial lift and emissions control.Social: The safety of our employees and customers is our first priority. It is our goal to ensure that “No One Gets Hurt,” one of our Core Values. Each of our employees is empowered to request a “Stop Work” in the event that they observe an unsafe working environment. In order to further enhance our safety program, we initiated a system to track near-misses and first-aid incidents. In addition, we continue to include safety as a performance measure in our short-term incentive plan in order to further incentivize safe conduct. In 2022, the target Total Recorded Incident Rate (“TRIR”) and “Perfect Days” under our short-term incentive plan was 0.90 and 70%, respectively. We achieved a TRIR of 1.56 and Perfect Days of 78%. Perfect Days are defined under the plan as those days without a recordable, first aid or environmental incident; property damage; or a motor vehicle accident. The percentage of Perfect Days is equal to the number of Perfect Days divided by 365. Through our focus in this area, our TRIR has decreased by 36% since our initial public offering.
20We are also focused on the ethical procurement of products and materials through our supply chain management program. Through our Human Rights Policy Statement and Supplier Code of Conduct, we are focused on ensuring that we and our suppliers protect the human rights of our employees and contractors. It is our expectation that the Human Rights Policy Statement and Supplier Code of Conduct will serve as the backbone for further improvements in this area going forward.We are also focused on creating value for our stockholders through our commitment to the communities in which we operate. Furthermore, we are committed to the professional growth of our employees. Through the Company’s succession planning program, our board of directors periodically receives a report regarding the development of high potential employees and actions that are being taken to further their professional development.Conflict Minerals Policy. Our Conflict Minerals Policy (the “Conflict Minerals Policy”) is another part of our commitment to being a responsible corporate citizen and complying with SEC regulations requiring publicly traded companies to file annual reports disclosing certain “conflict minerals” (defined as tin, tungsten, tantalum and gold, or their derivatives) that originate from the Democratic Republic of Congo and its adjoining countries and that are necessary to the functionality of products we manufacture or contract to manufacture. We are committed to the responsible sourcing of materials, products and components and to exercising diligence over our sourcing practices so as not to support human rights abuses. We have taken steps to establish a due diligence framework and compliance program and have implemented the Conflict Minerals Policy across the Company. We also communicate to our suppliers our expectation that they will cooperate with our efforts in this area. A copy of the Conflict Minerals Policy is available on our website at www.f-e-t.com under “Corporate Governance” in the “Investor” section.Stockholder Engagement and Investor Outreach. Through the year, we meet with analysts and institutional investors to inform and share our perspective, and to solicit their feedback on our performance. This includes participation in investor conferences and other formal events, and group and one-on-one meetings throughout the year. In addition, in the first quarter 2022, we conducted an outreach to the top 35% of our stockholders in order to discuss the Company’s financial performance, pay for performance and ESG matters. A key area of focus among our stockholders was the Company’s level of long-term indebtedness. Following these meetings, management assessed strategic alternatives that would reduce the Company’s leverage. In connection with the conversion of the Company’s 9.00% Convertible Senior Secured Notes, the Company’s long-term indebtedness decreased by 48%.Organization of the Committees of the Board of DirectorsNominating, Governance & Compensation Committee.Audit Committee. The Nominating, Governance & CompensationAudit Committee currently consists of Michael McShaneMs. Evelyn M. Angelle (Chairperson), and Messr. John A. Carrig Terence M. O’Toole and Paul E. Rowsey III. The board of directors has determined that Ms. Angelle and Mr. Carrig are each an “audit committee financial expert” as defined by applicable SEC rules. The Audit Committee’s purposes are, among other things, to assist the board of directors with overseeing:•The integrity of our financial statements;•Our compliance with legal and regulatory requirements;•The qualifications, independence and performance of, and selection process for, our independent auditors; and•The effectiveness and performance of our internal audit function.The Audit Committee held six meetings during 2022. The board of directors has adopted a written charter for the Audit Committee, which is available on our website at www.f-e-t.com as described above.Compensation and Human Capital Committee. The Compensation and Human Capital Committee currently consists of Messrs. Louis A. Raspino.Raspino, Jr. (Chairperson), Paul E. Rowsey III, and Michael McShane. Each of the committee membersMessrs. Raspino, Rowsey and McShane is a “non-employee director” as defined under Rule 16b-3 of the Exchange Act and an “outside director” as defined in section 162(m) of the Internal Revenue Code of 1986.Act. The purposes of the Nominating, Governance & Compensation and Human Capital Committee are, among others, to:21• Evaluate with our board of directors, taking into account the Company’s compensation goals and objectives, the performance of our Chief Executive Officer and, in consultation with the Chief Executive Officer, our other executive officers;• Review, evaluate and approve or recommend, as applicable, our agreements, plans, policies and programs to compensate our executive officers, in light of our goals and objectives relative to executive compensation, and our directors; and• Perform such other functions as the board of directors may assign to the Compensation and Human Capital Committee from time to time.The Compensation and Human Capital Committee may delegate to its Chairman, any one of its members or anysubcommittee it may form, the responsibility and authority for any particular matter, as it deems appropriate from time to time under the circumstances. Three committee meetings were held during 2022. The board of directors has adopted a written charter for the Compensation and Human Capital Committee, which is available on our website at www.f-e-t.com as described above.Nominating, Governance and Sustainability Committee. The NG&S Committee currently consists of Mr. John A. Carrig (Chairperson), Ms. Evelyn M. Angelle and Dr. Emily Reichert, Ph.D. The purposes of the NG&S Committee are, among others, to:•Advise the board of directors and make recommendations regarding appropriate corporate governance practices, and assist the board of directors in implementing those practices;
•Assist the board of directors by identifying individuals qualified to become members of the board of directors, and recommending director nominees to the board of directors;
•Advise the board of directors aboutas to the appropriate composition of the board of directors and its committees;
Review, evaluate•Oversee sustainability matters, including through the review of relevant metrics, emerging trends, our overall performance, risks and approve our agreements, plans, policiesopportunity assessments and programs to compensate our corporate officers and directors;
Review and discuss with our management the compensation discussion and analysis included in this proxy statement and to determine whether to recommendprocesses related to the board of directors that compensation discussionCompany’s ESG program; and analysis be included in this proxy statement, in accordance with applicable rules and regulations; and
•Perform such other functions as the board of directors may assign to the committeeNG&S Committee from time to time.
The NG&S Committee reports to the board of directors regarding the oversight responsibilities that have been delegated, including climate related risks and opportunities, information technology initiatives and cybersecurity matters that may impact Forum.
the pool from which director nominees are chosen (and affirmatively instructs any search firm the NG&S Committee engages to do so). Each nominee’s personal and professional integrity, experience, skills, ability and willingness to devote the time and effort necessary to be an effective board member, and commitment to acting in the Company’s best interests of our company and our stockholders, are also factors. factors considered by the NG&S Committee.
The Nominating, Governance & CompensationNG&S Committee will consider director candidates recommended by stockholders. If a stockholder wishes to recommend a director for nomination by the committee,NG&S Committee, the stockholder should submit the recommendation in writing to the Chairperson, Nominating, Governance & Compensationand Sustainability Committee, in care of theJohn C. Ivascu, Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary, Forum Energy Technologies, Inc., 920 Memorial City Way,10344 Sam Houston Park Drive, Suite 1000,300, Houston, Texas 77024.77064. The recommendation should contain the following information:
•The name, age, business address and residence address of the nominee and the name and address of the stockholder making the nomination;
•The principal occupation or employment of the nominee;
•The number of shares of each class or series of our capital stock beneficially owned by the nominee and the stockholder and the period for which those shares have been owned; and
•Any other information the stockholder may deem relevant to the committee’s evaluation.
Audit Committee. The Audit Committee currently consists of Ms. Evelyn M. Angelle (Chairperson) and Messrs. Franklin Myers and John Schmitz. The board of directors has determined that Ms. Angelle and Mr. Myers each is an “audit committee financial expert” as defined by applicable SEC rules. The committee’s purposes are to assist the board of directors with overseeing:
The integrity of our financial statements;
Our compliance with legal and regulatory requirements;
The qualifications, independence and performance of our independent auditors; and
The effectiveness and performance of our internal audit function.
The committee held eight meetings during 2015. The board of directors has adopted a written charter for the Audit Committee, which is available on our website atwww.f-e-t.com as described above.
Compensation Committee Interlocks and Insider Participation. During the fiscal year ended December 31, 2015, none of our executive officers served as (1) a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on our Nominating, Governance & Compensation Committee, (2) a director of another entity, one of whose executive officers served on our Nominating, Governance & Compensation Committee or (3) a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served as one of our directors. In addition, none of the members of our Nominating, Governance & Compensation Committee (1) was an officer or employee of Forum during 2015, (2) was formerly an officer of the Company, or (3) had any relationship requiring disclosure under any paragraph of Item 404 of Regulation S-K.
CONFLICTS OF INTEREST AND RELATED PERSON TRANSACTIONS
any•Any person who is, or at any time during the applicable period was, one of our executive officers or one of our directors;
any•Any person who is known by us to be the beneficial owner of more than 5% of our common stock;
any•Any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, executive officer or a beneficial owner of more than 5% of our common stock and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5% of our common stock; and
any•Any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.
SCF Registration Rights Agreement
Demand Registration Rights. Under the Registration Rights Agreement dated August 2, 2010 we entered into with SCF (the “Registration Rights Agreement”), SCF currently has the right to demand on four occasions that we register with the SEC all or any portion of SCF’s Registrable Securities (as such term is defined in the Registration Rights Agreement) so long as the Registrable Securities proposed to be sold on an individual registration statement have an aggregate gross offering price of at least $20 million (or at least $10 million if we are then eligible to register such sale on a Form S-3 registration statement (or any comparable or successor form) (a “Demand Registration”). Holders of SCF’s Registrable Securities may not require us to effect more than one Demand Registration in any six-month period. Any demand request by SCF with a reasonably anticipated aggregate offering price of $100 million may be for a “shelf” registration statement pursuant to Rule 415 under the U.S. Securities Act of 1933 (the “Securities Act”); provided that any such “shelf” registration statement demand request will count as two demand requests.
Piggyback Registration Rights. If we propose to file a registration statement under the Securities Act, relating to an offering of our common stock (other than a registration statement filed relating to securities offered in connection with benefit plans or acquisitions or any registration statement filed in connection with an exchange offer or offering solely to our stockholders), holders of Registrable Securities can request that we include in such registration, and any related underwriting, all or a portion of their Registrable Securities.
Holdback Agreements. Each holder of Registrable Securities is subject to certain lock-up provisions that restrict transfer during the period beginning 14 days prior to, and continuing for a period not to exceed 90 days for any underwritten public offering of our equity securities, except as part of such registration (subject to an extension of such lock-up period in certain circumstances).
Registration Procedures and Expenses. The Registration Rights Agreement contains customary procedures relating to underwritten offerings and the filing of registration statements. We have agreed to pay all registration expenses incurred in connection with any registration. All underwriting discounts and selling commissions and stock transfer taxes applicable to securities registered by holders and fees of counsel to any such holder (other than as described above) will be payable by holders of Registrable Securities.
Indemnification and Contribution. The Registration Rights Agreement also contains customary indemnification and contribution provisions by us for the benefit of holders participating in any registration. Each holder participating in any registration agrees to indemnify us in respect of information provided by such holder to us for use in connection with such registration; provided that such indemnification will be limited to the net proceeds actually received by such indemnifying holder from the sale of Registrable Securities.
Tinicum Registration Rights Agreement
Concurrently with our initial public offering, we issued 2,666,666 shares of our common stock at the public offering price less the underwriting discount in a private placement to Tinicum. In connection with the private placement, Tinicum obtained piggyback registration rights on the same terms described above with respect to SCF.
Also during 2015,2022, a subsidiary of Forum purchased products from and sold equipment to Bell SupplyAxis Energy Services, LLC (“Axis”). Forum recognized revenue in an aggregate amount totaling approximately $0.2 million in the aggregate approximately $2.1 million.2021 and $0.5 million in 2022 from such sales. Mr. Schmitz is the Chairmana member of the board of managersdirectors of Synergy Energy Holdings, LLC, Bell Supply’s parent.Axis. These sales and purchases were made based on arms-length terms between the parties and represent less than 1% and 2% of the consolidated gross revenues for 20152021 and 2022 for Forum and Bell Supply, respectively. We also had salesAxis.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a)2022 consolidated gross revenues and less than 1% of the Exchange Act requires our executive officersNESR’s 2021 and directors2022 consolidated gross revenues, as applicable. Messrs. David Baldwin and beneficial ownersAndrew
|
|
|
•Motivate our executives to achieve key safety, operating, safety and financial performance goals that enhance long-term stockholder value;
•Reward outstanding performance in achieving these goals without subjecting us to excessive or unnecessary risk; and
•Establish and maintain a competitive executive compensation program that enables us to attract, motivate and retain experienced and highly capable executives who will contribute to our long-term success.
| What We Do: | What We Don’t Do: | ||||||||||
| þ | Emphasis on Variable Compensation. 80% of Mr. Lux’s target compensation and 73% of our other NEO’s target compensation is variable. | No Excise Tax Gross-Ups. As a matter of company policy, excise tax gross ups are not included in employment agreements or severance agreements. | |||||||||
| þ | Long-Term Incentive Value Performance-Based. Half of the 2022 equity incentive opportunity for our NEOs (other than Mr. Gaut) is contingent upon achievement of specific levels of absolute stock price. | Prohibition on Hedging/Pledging. Our Insider Trading Policy specifically prohibits directors, officers and employees, including our NEOs, from entering into hedging type transactions in our stock or pledging our stock. | |||||||||
| þ | Clawbacks. Both our short-term cash incentivecompensation program and our stock incentive plan have recoupment features. | No Perquisites. We do not provide any material perquisites to our NEOs. | |||||||||
| þ | Stock Ownership Requirements. Our NEOs and non-employee directors have specific minimum ownership obligations, including a requirement that our CEO must hold equity with a value greater than or equal to 5x his base salary. | ý | No Single Trigger Change-in-Control Benefits. Cash severance and accelerated vesting of equity incentives require both the consummation of a change-in-control and a qualifying termination of employment. | ||||||||
| þ | Annual Compensation Risk Assessment. To ensure that our programs are designed to motivate strong performance without encouraging excessive and unnecessary risk-taking, we conduct annual assessments led by the Committee’s independent compensation consultant. | ý | No Repricing. Our plans prohibit repricing or cash buyout of underwater stock options without stockholder approval. | ||||||||
| þ | Independent Compensation Consultant. The Compensation and Human Capital Committee engages an independent advisor on topics related to board of director and executive compensation, and annually requires formal certification from the advisor of its independence. | ||||||||||
Our board of directors has currently adopted a policy of holding annual “Say-on-Pay” votes and thus, unless such policy is modified, the next advisory resolution to approve executive compensation after the annual meeting will be at our annual meeting of stockholders to be held in 2024.
This
Throughout this discussion, the following individuals are referred to as the “Named Executive Officers” or “NEOs” and are included in the Summary Compensation Table:
C. Christopher Gaut—President, Chief Executive Officer and
James W. Harris—D. Lyle Williams Executive Vice President and Chief Financial Officer
Prady Iyyanki—John C. Ivascu Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary
James L. McCulloch—Senior Vice President, General Counsel and Secretary
Pablo Mercado—Vice President, Operations Finance
Executive Summary
We have adopted an executive compensation program that is designed to attract and retain talented executive officers, and align their interests with those of our stockholders over the long-term,long term, taking into account the volatile markets in which we do business. In addition to holding management accountable for accomplishing financial results, we insist on the highest standards of ethical conduct and operational safety, which we believe will position us for long-term success.
Business Highlights
Faced with one of the most dramatic downturns in energy prices in decades, in 2015
Generated
Paid off all revolving debt under the78% perfect days, and continued our Company’s credit facility;
Managed the Company’s cost structure in line with the reduction in activity levels; and
Achieved our safety goals and improved ourstrong safety performance on a year over year basis.
Free cash flow, a non-GAAP financial measure, is defined as net income, increased by non-cash charges included in net income (e.g., depreciationthrough the institution of programs aimed at protecting our employees and amortization and deferred income taxes), increased or decreased by changes in net working capital, less capital expenditures for property and equipment net of proceeds from sale of property and equipment and other, plus the payment of contingent consideration included in operating activities. Management believes free cash flow is an important measure because it encompasses both profitability and capital management in evaluating results.
A reconciliation of free cash flow, before acquisitions, to cash flow from operating activities is as follows (in millions):
|
| |||||
| ||||||
| ||||||
|
| |||||
consultants.
Froze
Declined cash incentive award payments equaling in the aggregate approximately $0.5 million that were earned by Mr. Gaut and the NEOs reporting directly to him;
Suspended Company matching under the deferred compensation plan and 401(k) Plan;
•Established challenging 2015 non-equity incentive plan2022 performance objectives; and
Maintained 2016 director compensationobjectives under our annual cash-based Executive Management Incentive Plan, which paid out at 2014 levels.
Advisory Vote on Executive Compensation and Shareholder Outreach
At our 2015 annual meeting137% of stockholders, we received 79,152,891 votes in favor of our executive compensation program, 976,390 votes in opposition, and 23,468 abstentions, for total support of 98.8%. Our Nominating, Governance and Compensation Committee (the “Committee”) believes this affirms stockholders’ continued support of the Company’s approach to executive compensation.
The Committee values stockholders’ input on the design of our executive compensation program. The Committee also believes that our programs are structured to deliver pay that is commensurate with performance. Plan and performance-based equity awards can generate a range of payoutstarget based on the attainmentstrong financial and safety performance noted above.
| Name and Principal Position | Year | Salary ($) | Bonus(1) ($) | Stock Awards (2) ($) | Non-Equity Incentive Plan Compensation (3) ($) | All Other Compensation (4) ($) | Total ($) | ||||||||||||||||
Neal A. Lux (5) President and Chief Executive Officer | 2022 | 564,461 | ― | 1,703,239 | 1,291,584 | 12,200 | 3,571,484 | ||||||||||||||||
| 2021 | 370,817 | ― | 794,836 | 301,473 | ― | 1,467,126 | |||||||||||||||||
C. Christopher Gaut Executive Chairman of the Board | 2022 | 515,385 | 112,500 | 660,871 | 5,864,110 | 12,200 | 7,165,066 | ||||||||||||||||
| 2021 | 600,000 | ― | 1,768,729 | 674,025 | 173,562 | 3,216,316 | |||||||||||||||||
D. Lyle Williams EVP and Chief Financial Officer | 2022 | 416,385 | — | 946,264 | 1,131,829 | 12,200 | 2,506,678 | ||||||||||||||||
| 2021 | 370,339 | ― | 794,836 | 301,473 | 2,133 | 1,468,781 | |||||||||||||||||
John C. Ivascu EVP, General Counsel, Chief Compliance Officer and Corporate Secretary | 2022 | 346,000 | — | 615,072 | 1,243,665 | 12,200 | 2,216,937 | ||||||||||||||||
Based uponof phantom stock units and restricted stock units issued in 2022 and 2021 was $18.94 and $18.79 per unit, respectively, based on the strong levelclosing price of stockholder support for our programs expressed through our 2015 vote, and the viewsa share of our Committeecommon stock on our current approachthe date of grant. The grant date fair value of performance-based restricted stock units granted in 2022 ranged from $16.13 to executive compensation, we did not make any significant structural or philosophical changes$17.66 per unit, which was determined using a Monte Carlo simulation including the following assumptions: (a) grant date stock price of $18.94; (b) a hurdle price of $23.68; (c) simulation term of 3 years; (d) volatility of 100.50%; (e) a dividend yield of 0.00%; and (f) a risk free investment rate of 1.67%. The hurdle price for the performance-based restricted stock units is approximately 125% of the Company's closing stock price on the grant date. The grant date fair value of performance-based restricted stock units granted in 2021 ranged from $12.15 to $17.90 per unit, which was determined using a Monte Carlo simulation including the following assumptions: (a) grant date stock price of $18.79; (b) a hurdle price of $23.49; (c) simulation term of 3 years; (d) volatility of 100.51%; (e) a dividend yield of 0.00%; and (f) a risk free investment rate of 0.22%. For additional information, see Note 15 to our programsconsolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2022.
|
|
|
|
|
Compensation and Governance Highlights
Our pay practices emphasize good compensation, governance and market practice. In order to support our compensation and governance philosophy, we adopted the following practices:
|
| |||||
|
| |||||
|
| |||||
|
| |||||
| ||||||
Key Components
Our overall compensation philosophy isdirectors approved the following changes to provide competitive payMr. Lux’s compensation:
In granting our annual equity awards, we consider the competitive market level for awards, as well as individual and corporate performance, when determining the appropriate amount of equity to grant to each NEO. We believe that long-term, variable compensation should account for a significant portion of total compensation. Our objective is to continue to be a high growth, high performing oilfield products company and we therefore link a significant portion of our executives’ compensation to the long-term interests of our stockholders through the issuance of performance-based shares using total stockholder return, or “TSR”, as our measure, stock options, and restricted stock units or(“Performance RSUs”), which will vest based on continued service over three years and achievement of designated stock price hurdles; and
The charts below illustrate our emphasis on incentivizing our executives through long-term, variable compensation awards. Overall, the pay mix for our Chief Executive Officer is very well aligned with the market, with approximately 86% of the Chief Executive Officer’s target compensation taking the formequaled $1,810,871, or a 40% reduction compared to 2021:
Overall, our compensation program is designedhis base salary;
future severance benefits under his severance agreement.
NEOs
| Objectives | |||||||||||
| Base Salary | |||||||||||
•Fixed annual cash salary paid to the executive |
•Provides a competitive fixed payment to the executive for •Set at a reasonable level that allows us to attract and retain top talent | ||||||||||
| Short-Term Cash Incentive | |||||||||||
•Cash
•Payable based upon |
•Aligns the compensation of executives with our annual financial and non-financial performance and achievement of | ||||||||||
| Long-Term Incentive Grants | |||||||||||
•Equity-based incentive awards vesting over multiple years •In 2022, we incentivized our NEOs (other than Mr. Gaut) through a combination of: –50% Performance RSUs that vest over three years based on our achievement of | |||||||||||
| Company's stock price on the date of grant, and continuous service –50% RSUs that vest ratably over three years based on continuous service •In 2022, in connection with his transition to Executive Chairman, Mr. Gaut received cash-based phantom units that vest ratably over two years based on continuous service |
•Provides strong retention value with multi-year vesting •Promotes alignment between our NEOs and | ||||||||||
| |||||||||||
|
•Aligns the compensation of | ||||||||||
| Other Key Elements | |||||||||||
•Participation in 401(k) Plan and •Severance benefits | •Designed to |
| |||||||||
|
| ||||||||||
Other elements of executive compensation, which are designed to be market-competitive and are necessary to attract and retain key talent, include:
Retirement benefits, comprising deferred compensation and participation in our 401(k) Plan, and as more fully described on pages 42 to 43 and 45, and
Severance benefits, which are detailed on pages 52 to 55.
Compensation Methodology and Process
The process established for determining executive compensation for each of the NEOs includes open discussions among the Committee, the Committee’s compensation consultant, the CEO and the board of directors.
Role of Management in Setting Compensation
Our CEO is consulted in the Committee’s determination of compensation matters related to the executive officers reporting directly to the CEO. Each year, the CEO makes recommendations to the Committee regarding such components as salary adjustments, target annual incentive opportunities and the value of long-term incentive awards. In making his recommendations, the CEO considers such components as experience level, individual performance, overall contribution to company performance and market data for similar positions. The Committee takes the CEO’s recommendations under advisement, but the Committee makes all final decisions regarding such individual compensation. Our CEO’s compensation is reviewed and discussed by the Committee, which then makes recommendations regarding his compensation to the independent members of our board of directors, led by the Lead Independent Director. Our board of directors ultimately makes decisions regarding the CEO’s compensation.
Our CEO attends Committee meetings as necessary. He is excused from any meeting when the Committee deems it advisable to meet in executive session or when the Committee meets to discuss items that would impact the CEO’s compensation. The Committee may also consult other employees, including the remaining Named Executive Officers, when making compensation decisions, but the Committee is under no obligation to involve the Named Executive Officers in its decision-making process.
Role of the Compensation Committee in Setting Compensation
The Committee is, under its charter, responsible for designing, implementing and administering our executive compensation programs and, in doing so, the Committee is guided by the compensation philosophy stated above. In 2015, the Committee was composed of Messrs. McShane (Chairperson), Carrig, O’Toole and Raspino.
On an annual basis the Committee reviews and approves total compensation for our executive officers, and recommends CEO compensation to the independent members of our board of directors, through a process including:
Selecting and engaging an external, independent consultant;
Meeting separately from management with its independent consultant;
Reviewing and selecting companies to be included in our peer group;
Reviewing plans and related compensation programs for the presence of any risk elements;
Reviewing market data on all major elements of executive compensation; and
Reviewing performance results against operating plans and incentive plan targets.
A complete listing of our Committee’s responsibilities is included in the Committee’s charter, which is available for review on our corporate website atwww.f-e-t.com.
Role of the Compensation Consultant in Setting Compensation
The Committee has engaged the services of Pearl Meyer & Partners, LLC (“Pearl Meyer”) as its independent executive compensation consultant. Pearl Meyer operates exclusively as a compensation consultant and has more than twenty years of experience as an organization. Many of its senior consultants have experience of longer than thirty years. It serves a large number of companies and compensation committees in the energy industry, and as a result it maintains an extensive compensation database that it uses to supplement information obtained from publicly available sources. Certain of the Committee members have worked with representatives of Pearl Meyer in the past and value the firm’s collective knowledge and capabilities, and its ability to develop compensation programs that incentivize executives and align performance with company strategies and stockholders’ interests. The Committee selected Pearl Meyer on the basis of its reputation, capabilities and experience.
Pearl Meyer’s current role is to advise the Committee on matters relating to executive compensation to help guide, develop and implement our executive compensation programs. Pearl Meyer reports directly to the Committee. Pearl Meyer may perform work for Forum outside of the scope of its engagement by the Committee, but the Committee reviews and approves all such assignments to ensure that the independence of its compensation consultant is not compromised. The Committee regularly reviews the services provided by its outside consultants and believes that Pearl Meyer is independent in providing executive compensation consulting services. The Committee most recently conducted a review of its relationship with Pearl Meyer in 2015 and determined that Pearl Meyer’s work for the Committee did not raise any conflicts of interest, consistent with the guidance provided under the Dodd-Frank Act, and by the SEC and the NYSE. In making this determination, the Committee noted that during 2015:
Pearl Meyer did not provide any services to the Company or management other than services requested by or with the approval of the Committee, and its services were limited to executive and director compensation consulting;
The Committee meets regularly in executive session with Pearl Meyer outside the presence of management;
Pearl Meyer maintains a conflicts policy, which was provided to the Committee with specific policies and procedures designed to ensure independence;
Fees paid to Pearl Meyer by Forum during 2015 were less than 1% of Pearl Meyer’s total revenue;
None of the Pearl Meyer consultants working on matters with us had any business or personal relationship with Committee members (other than in connection with working on matters with us);
None of the Pearl Meyer consultants working on matters with us (or any consultants at Pearl Meyer) had any business or personal relationship with any of our executive officers; and
None of the Pearl Meyer consultants working on matters with us owns shares of our common stock.
The Committee continues to monitor the independence of its compensation consultant on a periodic basis.
Comparator Compensation Peer Group
We have developed a comparator compensation peer group, which is composed of specific peer companies within the energy industry. Our peer group was developed with the assistance of Pearl Meyer and is used to analyze our NEO compensation levels and overall program design. This compensation peer group is used to determine direct market levels of the main elements of executive compensation (base salary, annual incentives, long-term incentives, as well as total direct compensation). The peer group is also used to gauge industry practices regarding the structure and mechanics of annual and long-term incentive plans, employment agreements, severance and change in control policies and employee benefits. The composition of the peer group is reviewed by the Committee on an annual basis to ensure that we have and maintain an appropriate group of comparator companies. In August 2014, with the advice of Pearl Meyer, the Committee assessed the compensation peer group and determined to replace Parker Drilling Company and SEACOR Holdings Inc. with Exterran Corporation, FMC Technologies, Inc. and Superior Energy Services, Inc. to better align the Company’s peer group.
Criteria for selecting peer companies for compensation benchmarking is based on a number of factors. The peer companies selected should reflect an optimum mix of the criteria listed below in their relative order of importance:
Competitive market:
Competing Talent—companies with executive talent similar to that valued by us;
Direct Competitors—companies in the same or similar industry sector for products or services; and
Competing Industry—companies in the same general industry sector having similar talent pools.
Size and demographics:
Firms with competitive posture that are generally similar in revenue or market cap size and whose median revenue for the group approximates our revenue;
Firms with a competitive posture and comparable area of operations;
Firms in the same or similar competitive posture that experience similar market cycles; and
Firms that serve the same sector of the industry.
The Committee, based on Pearl Meyer’s analysis and our internal analysis, determined to use the following peer group of 15 companies to evaluate and compare our compensation practices in 2015:
| Financial Size Statistics | ||||||||
| Ticker | Name | Primary Industry | 2015 ($MM) | 12/31/15 Mkt Cap ($MM) | ||||
ATW | Atwood Oceanics, Inc. | Oil and Gas Drilling | $1,299.9 | $661.4 | ||||
BAS | Basic Energy Services, Inc. | Oil and Gas Equipment and Services | $805.6 | $114.2 | ||||
BRS | Bristow Group, Inc. | Oil and Gas Equipment and Services | $1,673.2 | $905.0 | ||||
CLB | Core Laboratories NV | Oil and Gas Equipment and Services | $797.5 | $4,606.9 | ||||
DRC | Dresser-Rand Group Inc. (1) | Oil and Gas Equipment and Services | NA | NA | ||||
EXH | Exterran Holdings, Inc. (2) | Oil and Gas Equipment and Services | $1,869.9 | $564.2 | ||||
FTI | FMC Technologies, Inc. | Oil and Gas Equipment and Services | $6,362.7 | $6,613.7 | ||||
HLX | Helix Energy Solutions Group, Inc. | Oil and Gas Equipment and Services | $695.8 | $558.3 | ||||
KEG | Key Energy Services Inc. | Oil and Gas Equipment and Services | $792.3 | $76.0 | ||||
OII | Oceaneering International, Inc. | Oil and Gas Equipment and Services | $3,062.8 | $3,671.1 | ||||
OIS | Oil States International Inc. | Oil and Gas Equipment and Services | $1,100.0 | $1,384.4 | ||||
PTEN | Patterson-UTI Energy Inc. | Oil and Gas Drilling | $1,891.3 | $2,219.5 | ||||
RDC | Rowan Companies plc | Oil and Gas Drilling | $2,137.0 | $2,115.6 | ||||
SPN | Superior Energy Services, Inc. | Oil and Gas Equipment and Services | $2,774.6 | $2,030.4 | ||||
TDW | Tidewater Inc. | Oil and Gas Equipment and Services | $1,119.7 | $326.9 | ||||
| ||||||
| ||||||
|
|
Performance Peer Group
We have also developed a performance peer group with the assistance of Pearl Meyer. The performance peer group is only used to determine payouts for our performance share awards by measuring our TSR relative to that of the performance peer group. The composition of the performance peer group is also reviewed by the Committee on an annual basis to ensure that we have and maintain an appropriate group of companies. See “—Performance Shares” below for a description of performance award payouts.
The performance peer selections were primarily based on who we believe are our most direct competitors—those companies who are in the same industry sector, and compete with us in regards to the products or services we offer and/or for investment capital. Given that the Philadelphia Stock Exchange Oil Service Sector is designed to track the performance of the overall oilfield services sector, the Committee believes it is a useful measure of the company’s performance. Our performance peer group, which was used to determine payout levels for our 2015 performance based awards is as follows:
| ||||
|
Our performance peer group, which will be used to determine payout levels for our 2016 performance based awards, was changed slightly from the 2015 group. The use of Exterran Holdings Inc. as a performance peer was replaced with Exterran Corporation to reflect the spin-off of a portion of its business, and Oil States International Inc. was added to the peer group to replace Cameron International Corp. in anticipation of its merger with Schlumberger.
| 2016 Performance Peer Companies | ||||||||
| Financial Size Statistics | ||||||||
| Ticker | Name | Primary Industry | 2015 ($MM) | 12/31/15 Mkt Cap ($MM) | ||||
DRQ | Dril-Quip Inc. | Oil & Gas Equipment and Services | $897.5 | $2,271.8 | ||||
EXTN | Exterran Corporation | Oil & Gas Equipment and Services | $2,063.0 | $564.2 | ||||
FTI | FMC Technologies Inc. | Oil & Gas Equipment and Services | $7,091.6 | $6,613.7 | ||||
HTG.L | Hunting plc | Oil & Gas Equipment and Services | $810.5 | $448.4 | ||||
NOV | National Oilwell Varco Inc. | Oil & Gas Equipment and Services | $14,757.0 | $12,583.8 | ||||
OII | Oceaneering International Inc. | Oil & Gas Equipment and Services | $3,259.6 | $3,671.1 | ||||
OSX | Philadelphia Stock Exchange Oil Service Sector | Oilfield Services Index | ||||||
Role of Market Data
Pearl Meyer uses compensation data gathered from the compensation peer group as well as supplemental data from published market surveys to benchmark our executive compensation. The supplemental survey data allow the Committee to consider compensation levels through the broader energy industry compared to the oilfield services industry focused data of the peer group. Survey data also provides market norms for executive positions, which may not be reported as named executive officers in the peer group data.
Our review of market data focuses on the main elements of executive compensation: base salary, annual incentive opportunity, long-term compensation and total direct compensation. The graphic below defines the data we consider:
We review both target and actual compensation paid, but our primary focus is on target compensation because we want to provide our executives with the opportunity to earn competitive levels of compensation. How our plans ultimately payout is contingent upon management’s performance.
The Committee periodically commissions Pearl Meyer to conduct a market-based compensation study. The most recent study used in connection with the determination of total compensation in 2015 was completed in December 2014 and reviewed again in February 2015. That study indicated that our NEO base salaries, target total cash and target total direct compensation are on average below the market median. The Committee determined not to meaningfully adjust executive compensation due to market conditions.
Elements of Compensation for Our Named Executive Officers
Base Salary
| Executive | 2014 Salary | 2015 Salary | Change | 2016 Salary | Change | |||||
C. Christopher Gaut | 675,000 | 675,000 | — | 607,500 | (10.0)% | |||||
James W. Harris | 399,877 | 399,877 | — | 359,889 | (10.0)% | |||||
Prady Iyyanki | 475,000 | 475,000 | — | 427,500 | (10.0)% | |||||
James L. McCulloch | 346,653 | 346,653 | — | 311,988 | (10.0)% | |||||
Pablo Mercado | 282,064 | 282,064 | — | 282,064 | — |
Annual Incentive Awards
Our annual incentive awards are formulaic and performance based. The payout potential at each level of our plan is expressed as a percentage of an executive’sNEO’s base salary as set forthof December 31, 2022. In February 2022, the base salaries for Messrs. Lux and Gaut were modified as described under “CEO Transition” above, and the base salaries for Messrs. Williams and Ivascu were increased by $56,000 and $26,000, respectively, to better reflect market pay levels and in the table below. Each year the Committee reviews bonus targets as well as target and actual total cash compensation paidrecognition of their significant contributions to the named executive officers of our peer group to gauge the competitive level of our targets and ultimate payouts. Below we describe our annual incentive plan which was effective in 2015.Our Chief Company.
| Executive | Base Salary as of 12/31/2022 | ||||
| Neal A. Lux | $600,000 | ||||
| C. Christopher Gaut | $500,000 | ||||
| D. Lyle Williams | $425,000 | ||||
| John C. Ivascu | $350,000 | ||||
Management Incentive Plan
Our Management Incentive Plan (the “MIP”“EMIP”) for 20152022 was designed to incentivize and reward key executives who hadhaving a significant impact on our achievement of overall corporate performance goals. The Compensation and Human Capital Committee, or board of directors in the case of Messrs. Lux and Gaut, approved NEO participantseach NEO’s target bonus opportunity for 2022 under the EMIP. In connection with the CEO Transition described above, the target bonus opportunities for Messrs. Lux and Gaut were adjusted for the remainder of 2022, resulting in a blended target that reflects their prior target bonus opportunity through February 19, 2022 (80% and 110%, respectively) and their revised target bonus levels for the MIPopportunity thereafter (100% and will continue to do so in future years.
100%, respectively). The following table sets out ourthe blended target and blended maximum bonus levels for 20152022 for our NEOs expressed as a percentage of annualthe individual’s base salary:
| Executive | Target bonus (% of base) | Maximum bonus (% of base) | ||
C. Christopher Gaut | 125% | 250% | ||
James W. Harris | 80% | 160% | ||
Prady Iyyanki | 100% | 200% | ||
James L. McCulloch | 80% | 160% | ||
Pablo Mercado | 50% | 100% |
2015 MIP
salary earned during the year:
| Executive | Blended Target Bonus (% of 2022 base salary earned) | Blended Max Bonus (% of 2022 base salary earned) | ||||||
| Neal A. Lux | 97% | 195% | ||||||
| C. Christopher Gaut | 101% | 203% | ||||||
| D. Lyle Williams | 80% | 160% | ||||||
| John C. Ivascu | 80% | 160% | ||||||
MIP
| Performance Measure | Weighting | |||||
| EBITDA | 50% | ||||
| ||||||
| Net Debt Reduction | 10% | ||||
Safety TRIR Perfect Days | 5% 5% | |||||
| Strategic Objectives | ||||||
Operating Income and Working Capital Ratio
target.
Performance.
The safety measure was based one-half on theThe targets for each product line were established with reference to past safety performance and the average TRIR for the oil and gas manufacturing industry, as reported in 2010 by the U.S. Department of Labor. Threshold and over-achievement levels were set at points recommended by management to create stretch goals while at the same time maintaining the incentive of each product line throughout the year, and not as percentages of target TRIR.
Personal Objectives
The Personal Objectives metric was incorporated into the 2015 MIPintended to encourage an increased focus on each participant’s impact onkey aspects of our overall objectives, including maximizing shareholder return. Objectives were established based on factors including job responsibilities, locationbusiness strategy. This measure is subject to the Compensation and special projects. Each Named Executive Officer’s personal objectives were set by the Chief Executive Officer and Committee,Human Capital Committee’s, or the board of directors, as applicable. Achievement relative todirectors’, full discretion and was based on the Company’s overall performance in respect of each Named Executive Officer’s personalmeasure. The strategic objectives is evaluated in terms of both quantity and quality of achievement, and such other factors deemed relevantestablished by the Chief Executive Officer or theCompensation and Human Capital Committee as applicable, using a scale of one to ten. The Chief Executive Officer’s or Committee’s assessment is then reviewed by the Committee orand the board of directors, in respect of Messrs. Lux and assessed a multiplier between zero and two, taking into considerationGaut, are set forth below along with the difficultysubjective assessment of each individual’s objectives, mitigating factors, the Company’s overall performance and such other factors deemed relevant. A multiplier of 0.5 was approved for use in calculating the payout for the personal objectives measure on the basis of our overall performance.
|
|
C. Christopher Gaut James W. Harris Prady Iyyanki James L. McCulloch Pablo Mercado the Company’s executive officers. C. Christopher Gaut James W. Harris Prady Iyyanki James L. McCulloch Pablo Mercado Bonus ($) C. Christopher Gaut James W. Harris Prady Iyyanki James L. McCulloch Pablo Mercado drivers – Target. Compensation and Human Capital Committee to be appropriate. Awards under our C. Christopher Gaut James W. Harris Prady Iyyanki James L. McCulloch Pablo Mercado Target bonus (% of base) Maximum bonus (% of base) C. Christopher Gaut James W. Harris Prady Iyyanki James L. McCulloch Pablo Mercado NEOs: Rank Against Peers 1 2 3 4 5 6 7 8 9 10 Stock Option Awards Restricted Stock Unit Awards Performance Share Awards (1) C. Christopher Gaut James W. Harris Prady Iyyanki James L. McCulloch Pablo G. Mercado Stock Option Awards Restricted Stock Awards Performance Share Awards (1) C. Christopher Gaut James W. Harris Prady Iyyanki James L. McCulloch Pablo Mercado C. Christopher Gaut Chief Executive Officer and Chairman of the Board(7) James W. Harris Executive Vice President and Chief Financial Officer Prady Iyyanki Executive Vice President; Chief Operating Officer(8) James L. McCulloch Sr. Vice President, General Counsel and Secretary Pablo G. Mercado Vice President— Operations Finance C. Christopher Gaut James W. Harris Prady Iyyanki James L. McCulloch Pablo G. Mercado Salary (1) ($) Stock ($) All ($) Total ($) C. Christopher Gaut Chief Executive Officer and Chairman of the Board(7) C. Christopher Gaut Exercise ($/Share) Threshold (#) Target (#) Maximum (#) Threshold ($) Target ($) Maximum ($) Awards (6) ($) C. Christopher Gaut James W. Harris Prady Iyyanki James L. McCulloch Pablo G. Mercado C. Christopher Gaut James W. Harris Prady Iyyanki James L. McCulloch Pablo G. Mercado Stock Awards Option Awards Value realized on vesting Value realized upon exercise C. Christopher Gaut James W. Harris Prady Iyyanki James L. McCulloch Pablo G. Mercado stock price performance condition has been satisfied, which vested on February 19, 2023. The Name C. Christopher Gaut James W. Harris Prady Iyyanki James L. McCulloch Pablo G. Mercado C. Christopher Gaut Salary Bonus Amounts COBRA Premiums Accelerated Equity Vesting(1) Total James W. Harris Salary Bonus Amounts COBRA Premiums Accelerated Equity Vesting(1) Total Prady Iyyanki Salary Bonus Amounts COBRA Premiums Accelerated Equity Vesting(1) Total James L. McCulloch Salary Bonus Amounts COBRA Premiums Accelerated Equity Vesting(1) Total Pablo G. Mercado Salary Bonus Amounts COBRA Premiums Accelerated Equity Vesting(1) Total Total Total Executive Performance Share Awards(1) Executive Group Non-Executive Officer Employee Group 2024. Even if the selection is ratified, the Audit Committee may, in its discretion, select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders. Audit Fees (1) Audit-Related Fees (2) Tax Fees (3) All Other Fees (4) Total accounting research tool subscription fees. Based on the review and discussions referred to above, and such other matters deemed relevant and appropriate by the Audit Committee, the Audit Committee recommended to the board of directors, and the board of directors has approved, that 2022. 77064. 77064. n2015 MIP2022 EMIP PayoutThe table below sets forth the operating income targetscomponents and calculation of the total performance payout factor under our 2022 EMIP, including target and actual achievementsperformance and performance metric weightings for 2015:Operating Income Executive Target
Performance
($ thousands) Actual
Performance
($ thousands) Bonus
Earned ($) 157,493 73,840 — 157,493 73,840 — 157,493 73,840 — 157,493 73,840 — 157,493 73,840 — Performance Measure 2022 Target 2022 Achievement Percent of Target Earned Times WeightingEquals Weighted Percent of Target EarnedEBITDA Consolidated ($MM) $54.7 $58.7 136% 50% 68% Net Debt Reduction ($MM) (1)$10.0 $13.8 200% 10% 20% Safety (TRIR) 0.90 1.56 0% 5% 0% Safety (Perfect Days) 70% 78% 200% 5% 10% Strategic Objectives ($MM) See below See below 130% 30% 39% TOTAL 137% (1) The table below sets forth2022 EMIP provided that notwithstanding the working capital ratio targets and actual achievements for 2015:Working Capital Ratio Executive Target
Performance Actual
Performance Bonus
Earned ($) 35.2 47.2 — 35.2 47.2 — 35.2 47.2 — 35.2 47.2 — 35.2 47.2 — The table below sets forth the safety targets and actual achievements for 2015:Safety (TRIR) Corporate Division Executive Target
Perfor-
mance Actual
Perfor-
mance Bonus
Earned
($) Target
Perfor-
mance Actual
Perfor-
mance
Earned 1.67 1.17 145,513* — — — 1.67 1.17 55,170* — — — 1.67 — — ** ** 70,386* 1.67 1.17 47,827* — — — 1.67 1.17 24,322* — — — * In light of current market conditions and the resultingnet debt reduction measure performance, in the Company’s revenue, Messrs. Gaut, Harris, Iyyankievent that the conditions set forth in our 9.00% Convertible Senior Secured Notes indenture were satisfied during 2022 to allow for conversion of the notes, the net debt reduction measure would be earned at not less than 200% of target.Strategic Objectives Assessment:•Achieve at least one quarter of positive net income – Target;•Improve performance versus formal guidance – Between target and McCulloch voluntarily declined all cash incentive award paymentsover achievement;•Develop energy transition funnel and increase ISS ESG “Environmental” score – Between target and over achievement;•Incremental margins greater than or equal to gross margins – Target;•Develop new products and solutions that would have been earned under the 2015 MIP. Mr. Mercado does not report directlywill increase our sustainable competitive advantage in markets we target – Between target and over achievement; and•Revenue growth for key product families greater than or equal to the Chief Executive Officer.** Target and actual safety performance is calculated using a weighted average of each product line’s performance.The table below sets forth the personal objectives payout for 2015:Personal ObjectivesExecutiveBonusEarned($)C. Christopher Gaut84,375*James W. Harris31,990*Prady Iyyanki47,500*James L. McCulloch27,732*Pablo Mercado14,103** In light of current market conditions and the resulting reduction in the Company’s revenue, Messrs. Gaut, Harris, Iyyanki and McCulloch voluntarily declined all cash incentive award payments that would have been earned under the 2015 MIP. Mr. Mercado does not report directly to the Chief Executive Officer.In accordance with the terms of the MIP, each performance measureEMIP, EBITDA is adjusted as necessary for acquisitions consummated during the year. Based on the MIP measures for each executive, financial, safetyyear and personal performance resulted in the payments set forth above, and no discretionary adjustments were made theretoother non-recurring items as determined by the Committee.2015 MIPEMIP were determined following an analysis of our 2022 financial resultsresults. Final EMIP payouts for 2015. Actual MIP payments are greater than target leveleach NEO for the Safety measure because our actual performance for this measure used under the MIP for 2015 was better than the target set by the Committee and our board of directors.Executive MIP
Target ($) MIP
Payment ($) MIP Payment
as% of Target 2015 Payment as%
of Base Salary 843,750 229,888(1) 0% 0% 319,902 87,160(1) 0% 0% 475,000 117,886(1) 0% 0% 277,322 75,559(1) 0% 0% 141,032 38,427(1) 27% 14% Executive EMIP
Target ($)EMIP
Payment ($)2022 EMIP Payment as % of Base Salary at 12/31/2022 Neal A. Lux $600,000 $751,302 137% C. Christopher Gaut $500,000 $714,966 137% D. Lyle Williams $340,000 $455,858 137% John C. Ivascu $280,000 $378,801 137% 35Long-Term Incentives(1)In light of current market conditions and the resulting reduction in the Company’s revenue, Messrs. Gaut, Harris, Iyyanki andMcCulloch voluntarily declined all cash incentive award payments that would have been earned under the 2015 MIP.Mr. Mercado does not report directly to the Chief Executive Officer.2016 MIPFor the 2016 plan year, the Committee approved three performance bands (threshold, target and overachievement) for each of the measures under the MIP. The Operating Income measure was replaced with EBITDA as it is considered to be a more appropriate measure in terms of the short-term incentive nature of the MIP program. In addition, Free Cash Flow was added as a replacement for the Working Capital Ratio measure in order to place emphasis on our ability to generate cash flow in a challenging market environment. Safety and Personal Objectives will continue to be measures utilized in the 2016 MIP.Performance MeasureWeightingEBITDA50%Free Cash Flow20%Personal Objectives20%Safety Performance10%The table below sets out our NEO target and maximum bonus levels for 2016, expressed as a percentage of annual base salary. These targets have been approved by the Committee and are consistent with our philosophy of targeting market median pay opportunities.Executive 125% 250% 80% 160% 100% 200% 80% 160% 50% 100% The following graph summarizes the payout of the established performance goals for the 2016 MIP. The financial measures under the 2016 MIP require levels of performance that exceed the financial plan approved by our board of directors.2022 Long-Term Equity Based IncentivesWe believe that long-term equity awards are the strongest link between executive pay and stockholder interests and, therefore, they represent a significant portioncomprise the largest component of our NEO total compensation. Long-term equityexecutive compensation program. In 2022, we utilized the following vehicles to grant long-term incentive awards are granted pursuant to the Forum Energy Technologies, Inc. 2010 Stock Incentive Plan (the “2010 Plan”). Options are inherently performance based and we believe provide a strong link between our executives’ and stockholders’ long-term interests. We may grant restricted stock units for competitive purposes and to balance the compensation risk associated with options and to provide value in equity which is tied to retention by placing a vesting requirement on the restricted stock unit grants. Another reason we may grant restricted stock units is to conserve our share pool. Fewer full value shares are required to deliver a targeted equity value than would be required if the grant were made in options alone. We include performance based awards in the mix of equity granted to our NEOs. We established that the percentages of each year’s grant will be made up one-third each of stock options, restricted stock units and performance based shares as a balanced approach, which considers the motivation of our executives, the interests of our stockholders, as well as the common practice within our peer group.In addition, subject to exceptional circumstances, on a going forward basis incentive awards will include double-trigger vesting provisions. While single-trigger vesting is prevalent among members of our peer group, we believe double trigger vesting is more in line with the expectations of our stockholders and would still permit us to offer attractive compensation to our Named Executive Officers. It has been our historical practice and expectation that on a going forward basis incentive awards will also include multi-year vesting provisions.LTI VehiclePerformance MeasureVestingPercentageStock OptionsFinal value varies with stock price25% annually for four years33%Time-Vested Restricted Stock UnitsFinal value varies with stock price25% annually for four years33%Performance SharesShares earned subject to Company TSR performance relative to peer group over a one, two, and three year periodOne-third of each award vests after the one, two and three year performance periods33%Long Term Incentive Award Program TermsLTI VehiclePerformance Orientation Vesting Award Cycle & TimingFiscalYearShares earned based on meeting or exceeding a stock price per share of $23.68 for twenty trading days (whether or not consecutive) during the following portions of the three-year performance period ending February 18, 2025:•Tranche 1 (1/3 of the award): February 18, 2022 (date of grant) through February 18, 2025•Tranche 2 (1/3 of the award): February 18, 2023 through February 18, 2025•Tranche 3 (1/3 of the award): February 18, 2024 through February 18, 2025Tranche 1 of the award was earned on August 8, 2022 based on attainment of the stock price condition, but remains subject to time-based vesting.Equity GrantedVests ratably over a three-year period subject to achievement of performance targetsFebruary 2016February 2017February 2018February 20192015Realized value varies with stock price 2015Performance ShareAward2015PerformanceShare AwardEarned 33 1/3Cash-Based Phantom Units Cash-settled award that fluctuates in value directly with our stock price Vests in equal annual installments over two years 2015PerformanceShare AwardEarned 33 1/32015PerformanceShare AwardEarned 33 1/32015 Time-VestedRestricted StockUnits2015 RestrictedStock Units25% Vested2015 RestrictedStock Units25% Vested2015 RestrictedStock Units25% Vested2015 RestrictedStock Units25% Vested2015 Time-VestedStock Options2015 StockOptions25% Vested2015 StockOptions25% Vested2015 StockOptions25% Vested2015 StockOptions25% VestedPerformance SharesPerformance shares provide an additional incentive to our NEOs. Performance share payout will be calculated at the end of each year over a three year period based on TSR relative to our performance peer group. The table below shows the award multipliers applied to our target based upon relative TSR performance. We started the 2015 performance cycle with nine peer companies,Our Compensation and there are currently eight peer companies as a result of the acquisition of Dresser-Rand Group Inc. by Siemens. The table below shows the impact on payout multipliers as peers are removed from the group. Please see the “—Performance Peer Group” section above for a description of our performance peer group. Award Multiplier
(9 peers) Award Multiplier
(8 peers) Award Multiplier
(7 peers) 2.00 2.00 2.00 1.75 1.75 1.75 1.50 1.50 1.50 1.25 1.25 1.25 1.00 1.00 1.00 1.00 0.75 0.75 0.75 0.50 0.50 0.50 0.25 0.00 0.25 0.00 0.00 The resulting multipliers shown above, and ultimate number of shares delivered to our NEOs, are determined at the conclusion of each year in the three-year performance period. The first measurement will be the one-year relative TSR, the second measurement will be cumulative two-year TSR, and the third measurement will be the cumulative three-year TSR relative to the performance peer group. Under each performance share agreement, the payout is capped at a multiplier of 1.00 if absolute total shareholder return is negative, even if our TSR performance is ranked higher relative to our peers. In addition, the agreements provide for a payout with a minimum multiplier of 1.00 if absolute TSR is greater than or equal to 20%.2015 AwardsOurHuman Capital Committee, and our board of directors in respect of Mr.Messrs. Lux and Gaut, granted the following equity-based long-term incentive compensation awards in February 20152022 to each of the Named Executive Officers.Executive Grant Date
Value ($) 170,710 60,220 60,220 3,374,798 45,520 16,060 16,060 899,978 60,700 21,410 21,410 1,199,891 32,880 11,600 11,600 650,055 19,220 6,780 6,780 379,961 (1)Reflects shares which will be earned at target. PayoutNEOs.Executive Performance RSUs RSUs Cash-Based Phantom Units Total Grant Date Value ($) Neal A. Lux 47,519 47,519 ― $1,703,239 C. Christopher Gaut ― ― 33,085 $660,871 D. Lyle Williams 26,400 26,400 ― $946,264 John C. Ivascu 17,160 17,160 ― $615,072 Forfeiture of 2019 SARsEach of shares varies from 0% of target award if relative TSR performance does not meet threshold and up to 200% of target award if relative performance is at the maximum level.Our equity-based compensation awards granted in February 2015 were approximately equal to the median as compared to our compensation peer group. We do not time the release of material nonpublic information for the purpose of affecting the value of executive compensation, and we do not grant options withNEOs received a grant dateof stock appreciation rights (SARs) in 2019, which were scheduled to vest on October 31, 2022 and would have settled in common stock as soon as practicable thereafter. Settlement was to a threshold condition that the average closing price of a share of the Company’s common stock over the twenty trading days prior to the settlement date of Committee approvalis equal to or greater than $100.00. Because this threshold condition was not achieved, the 2019 SARs were forfeited on October 31, 2022.2020 Cash-Based Performance Award PayoutEach of the grant.Update on Performance AwardsOur 2015 TSR, 2014 through 2015 TSR and 2013 through 2015 TSR was -37.2%, -53.3% and -52.3%, respectively, which ranked 6th, 8th and 7th in our applicable performance peer groups (shown below). This performance resulted in the application ofNEOs received a 0.00x multiplier to our target on the third one-third tranche of the 2013cash-based performance award 0.25x multiplierin 2020 that was eligible to ourbe earned based on absolute and relative total shareholder return (“TSR”) over the performance period beginning on February 21, 2020 and ending on36December 31, 2022. The target cash-based performance awards were established based on each NEO's position and responsibilities at such time (including, for Mr. Gaut, his service as Chief Executive Officer at such time). Payment under the second one-third tranche of the 20142020 cash-based performance award and 0.75x multiplier to our target oncould range from 0% if relative TSR performance was in last place among the first one-third tranche of the 2015 performance award.
2016 AwardsOur Committee, and our board of directors in respect of Mr. Gaut, granted equity-based compensation awards in February 2016. The table below summarizes the amount of such grants to each Named Executive Officer.Executive Grant Date Value
($) 292,210 119,810 119,810 3,375,040 77,920 31,950 31,950 900,013 103,900 42,600 42,600 1,200,043 56,280 23,070 23,070 649,933 32,900 13,490 13,490 380,007 (1)The number of performance share awards disclosed in this column assumes that the performance share award grant is paid out at the target level of performance in our common stock. Payout of shares varies from 0% of target award if relative TSR performance does not meet threshold up to 200% of target award.Our equity-based compensation awards granted in February 2016 were approximately at the market median as compared to our compensation peer group and maintainedup to 300% of the same mix and structure as our 2015 awards.Employee BenefitsOur 401(k) Plan is designed to allow all employees, includingtarget award if the participating Named Executive Officers, to contributeCompany’s relative TSR performance was at the top of the peer group, with target earned based on a pre-tax or Roth after-tax basis. Each participant may elect to contribute up to 75%sixth place ranking among the 11 members of his compensation to the 401(k) Plan as pre-tax or Roth after-tax contributions (but limited bypeer group (including the statutory maximum of $18,000 for 2015)Company). Additionally, participants age 50 years and older may make a “catch-up contribution” toIf absolute TSR over the 401(k) Plan each year up to an amount set by statute ($6,000 for 2015). Prior to March 2015, we matchedperformance period was negative, no more than 100% of participant contributions up to 3%the target award would be paid, and if absolute TSR was 20% or greater, at least 100% of compensation, and 50%the target award would be paid, in each case, regardless of any additional contributions up to 5% of compensation, for a total potential matching contribution of 4% of compensation. In March 2015, following a decline in oil prices inrelative TSR performance. The 2020 cash-based performance awards were the second half of 2014 and first quarter 2015, we suspended our 401(k) matching contribution program. We believe the program’s suspension is in our stockholders’ best interests given current market conditions and serves to preserve cash flow for potential investment opportunities.We have the discretion to provide a profit sharing contribution to each participant depending on our company’s performance for the applicable year. Due to statutory limits on the amounts contributed to qualified plans, our Named Executive Officers generally did not receive the full potential matching contribution under the 401(k) Plan.We also provide medical, dental and vision coverage to alllargest component of our full-time employees, as well as basic life2020 long-term incentive compensation program and disability coverage.Other Practices, Policies and GuidelinesPerquisitesWe do not provide for any perquisites or any other personal benefits for our executive officers that are not availablewere intended to other employees.ClawbacksPayments made under our non-equity incentive plan are subject to a clawback to the extent necessary to comply with the requirements of the Dodd-Frank Act or any other SEC guidelines.Risk AssessmentOur board of directors has reviewed our compensation policies as generally applicable to our employees and believes that our policies do not encourage excessive and unnecessary risk-taking, and that the level of risk that they do encourage is not reasonably likely to have a material adverse effect on us. The Committee performs this assessment annually and if a likelihood of a material risk exists, it will enlist additional resources for a full assessment.Our compensation philosophy and culture support the use of base salary, certain performance-based compensation and benefit plans that are generally uniform in design and operation throughout our organization and with all levels of employees. These compensation policies and practices are centrally designed and administered, and are substantially identical between our business segments. In addition, the following specific factors, in particular, reduce the likelihood of excessive risk-taking:Our overall compensation levels are competitive with the market;Our compensation mix comprises (i) fixed components like salary and benefits, (ii) annual incentives that reward our overall financial performance and safety and (iii) long-term incentives to more closely tie executive compensation to stockholder interests and provide for it to be at-risk based on performance;We intend to always have a strategic long-term plan;Our annual corporate goals will be established with specific consideration given to behavioral risk;We design our compensation plans so that no material risks are created between or across product lines;We seek to implement appropriate performance measures each year, whether absolute or relative;We have established maximum payouts to cap any performance incentives in place; andWe have clawback provisions built into our non-equity incentive plan.In summary, although a portion of the compensation provided to Named Executive Officers is based on our overall performance or product line performance, we believe our compensation programs do not encourage excessive and unnecessary risk-taking by executive officers (or other employees) because these programs are designed to encourage employees to remain focused on both our short-term and long-term operational and financial goals. We set performance goals that we believe are reasonable in light of our past performance and market conditions.Executive Stock Ownership RequirementsTo further align the interestscompensation of our NEOs with our performance by linking payments directly to our relative and absolute stock price performance over a three-year performance period.The Company’s TSR performance during the long-term interests of stockholders, our board of directors adopted a Stock Ownership Requirements Policy which requires our executive officers to own shares equal to specified amounts of our common stock, set at a multipleperformance period resulted in the Company being ranked second among the members of the officers’ base annual salarypeer group, resulting in effecta payout percentage of 260%. The Company’s absolute TSR was 45.9%, and as of January 1 ofa result, no further adjustment was made. The table below sets forth each applicable year. Targets are based onNEO’s target award and earned payout, which were paid in the following multiples of base salary:first quarter 2023.Executive Target Award ($) Earned Payment ($) Neal A. Lux $ 207,801 $ 540,282 C. Christopher Gaut $ 1,980,440 $ 5,149,144 D. Lyle Williams $ 259,989 $ 675,971 John C. Ivascu $ 332,640 $ 864,864 37Outstanding Equity Awards at 2022 Fiscal Year EndOfficerMultipleCEO6xExecutive Vice Presidents4xCorporate Senior Vice Presidents3xOther Section 16 Officers2xNEOs are expected to reach this level of target ownership within five years of becoming subject to the policy, three years of a promotion to a higher target multiple or February 21, 2018, whichever is later. Actual shares of stock, restricted stock, restricted stock units (including deferred stock units) and earned but unvested performance shares may be counted in satisfying the stock ownership guidelines. Shares issuable upon exercise of unexercised stock options are not counted. An NEO who is not in compliance with the policy may only sell shares to pay the applicable taxes related to an award of restricted stock or restricted stock units, the value of which does not exceed such tax liability, or to pay the exercise price or applicable taxes upon the exercise of stock options, retaining shares received upon exercise net of shares sold to cover the exercise prices or taxes, as applicable. As of January 1, 2016, each of our NEOs was in compliance with the requirements set forth under the policy. We believe the significant amount of shares required to be held pursuant to the policy aligns the interests of our executives and those of our stockholders. We further believe that this is more effective than imposing a minimum holding period and that imposing such a holding period would be unduly restrictive for executive officers and impact our ability to attract and retain top talent.Employment AgreementsWe entered into employment agreements with Messrs. Gaut and Harris, effective August 2, 2010. We entered into employment agreements with Messrs. McCulloch and Iyyanki effective October 25, 2010 and January 13, 2014, respectively. Mr. Mercado is not a party to an employment agreement with us. In January 2016, Messrs. Gaut, Harris, Iyyanki and McCulloch voluntarily agreed to a ten percent reduction in their annual base salary and declined their 2015 bonus in order to support our cost reduction initiatives, and waived any claims under their employment agreements related thereto. None of the contracts provide for excise tax protections in the event of a change in control.The employment agreements currently in effect set forth the manner by which the employment relationship may be extended or terminated, the compensation and benefits that we provide during the term of employment and the obligations each party has in the event of termination of the officer’s employment. We believe that severance protections, particularly in the context of a change in control transaction, play a critical role in attracting and retaining key executive officers. Providing this type of protection is common in the oilfield services industry. In addition, these benefits serve our interests by promoting a continuity of management and aligning management’s interests with those of our stockholders in the context of an actual or threatened change in control transaction.Other material terms of these agreements are set forth below under “Executive Compensation.” The severance provisions within the employment agreements are set forth in detail in “Executive Compensation — Potential payments upon termination and change in control” below.Nonqualified Deferred Compensation PlanOur non-qualified deferred compensation plan permits eligible participants, including our NEOs, to make contributions (and to receive matching contributions) in excess of the Internal Revenue Code limitations. The plan was adopted in consultation with Pearl Meyer, which advised the Committee that such a plan was a competitive practice. In February 2015 and in light of the suspension of the Company’s 401(k) matching program, the Committee determined it was appropriate to suspend matching contributions on participant deferrals under the deferred compensation plan.The plan provides that an officer may defer up to 50% of his base compensation and all or any portion of his bonus. All deferred amounts are credited with earnings through the date paid.Each NEO is 100% vested in all matching contributions as a result of having satisfied the service requirements provided under the plan. Benefits under the plan are paid at the participant’s election upon termination of employment in a cash lump sum or in annual installments over a period not longer than five years. The Committee is responsible for administering this plan. In addition to those employees designated by the plan, our CEO is permitted to designate additional employees who may participate in this plan.Upon a “change of control” within the meaning of the 2010 Plan, all account balances will be fully vested.Employee Stock Purchase PlanIn 2013, we adopted an employee stock purchase plan, which provides our eligible employees, including our Named Executive Officers, an option to purchase our common stock through payroll deductions and is designed to comply with Section 423 of the Internal Revenue Code. Generally, the purchase price is equal to 85% (or such other percentage that is not lower than 85% as designated by the Committee prior to the commencement of an offering period) of the market price of common stock on one of the following dates: (i) the offering date, (ii) the purchase date or (iii) the offering date or the purchase date, whichever is lower, as designated by the Committee from time to time. Offering periods generally consist of six-month periods, or such other periods as may be determined from time to time by the Committee. Employees will be limited to a maximum payroll deduction of up to 30% of eligible compensation and may not purchase more than $12,500 in shares each offering period.Accounting and Tax ConsiderationsUnder Section 162(m) of the Internal Revenue Code, a limitation was placed on tax deductions of any publicly-held corporation for individual compensation to certain executives of such corporation exceeding $1,000,000 in any taxable year, unless the compensation is performance-based. An exception applies to this deductibility limitation for a limited period of time in the case of companies that become publicly-traded.We reserve the right to use our judgment to authorize compensation payments that do not comply with the exemptions in Section 162(m) when we believe that such payments are appropriate and in the best interest of the stockholders, after taking into consideration changing business conditions or the executive’s individual performance and/or changes in specific job duties and responsibilities.If an executive is entitled to nonqualified deferred compensation benefits that are subject to Section 409A of the Internal Revenue Code, and such compensation does not comply with Section 409A, then the benefits are taxable in the first year they are not subject to a substantial risk of forfeiture and are subject to certain additional adverse tax consequences. We intend to design such arrangements to comply with (or be exempt from) Section 409A to the extent that the design is also appropriate for our business goals with respect to that arrangement.All equity awards to our employees, including executive officers, and to our directors will be granted and reflected in our consolidated financial statements, based upon the applicable accounting guidance, at fair market value on the grant date in accordance with FASB Accounting Standards Codification, Topic 718, “Compensation — Stock compensation.”NOMINATING, GOVERNANCE & COMPENSATION COMMITTEE REPORTThe Nominating, Governance & Compensation Committee has reviewed and discussed with Forum’s management the Compensation Discussion and Analysis included in this proxy statement. Based on that review and discussion, the Committee has recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement.Respectfully submitted,Michael McShane,ChairpersonJohn A. CarrigTerence M. O’TooleLouis A. RaspinoThe following tables provide information regarding the compensation awarded to or earned during the 2013, 2014 and 2015 fiscal years by our principal executive officer, principal financial officer and each of the next three most highly compensated executive officers who were serving as executive officers on December 31, 2015. The tables following the summary compensation table provide additional detail with respect to actual compensation, grants of plan-based awards, the value of outstanding equity awards as of December 31, 2015, the value of options exercised and stock awards that vested during 2015, deferred compensation and estimates of changes in post-employment benefits.Summary compensation tableName and Principal Position Year Salary (1)
($) Bonus
($) Performance
Share
Awards(2)
($)(A) Restricted
Stock /
Restricted
Stock Unit
Awards(3)
($) (B) Stock
Awards(4)
($)
(A+B) Option
Awards(3)
($) Non-Equity
Incentive Plan
Comp(1)(5)($) All Other
Comp (6)
($) Total
($) 2015 659,794 — 1,225,797 1,124,910 2,350,707 1,124,979 — 21,049 4,156,529 2014 664,739 — 1,287,483 1,125,014 2,412,497 1,125,000 1,113,353 46,532 5,362,121 2013 626,720 — 1,173,531 1,066,748 2,240,279 1,066,674 217,551 30,100 4,181,324 2015 384,717 — 326,907 300,001 626,908 299,977 — 14,311 1,325,913 2014 393,375 — 343,377 300,011 643,388 300,001 422,120 27,536 1,786,420 2013 363,940 — 293,455 266,752 560,207 266,647 82,103 19,552 1,292,449 2015 477,088 — 435,808 399,939 835,747 400,013 — 3,654 1,716,502 2014 461,951 — 457,772 400,006 857,778 400,001 606,170 24,259 2,350,159 2015 334,844 — 236,123 216,688 452,811 216,679 — 10,600 1,014,934 2014 344,382 — 247,969 216,678 464,647 216,674 365,935 20,731 1,412,369 2013 331,594 — 238,432 216,736 455,168 216,698 74,254 15,300 1,093,014 2015 283,304 — 138,009 126,650 264,659 126,660 38,427 5,949 718,999 2014 277,788 — 144,980 126,685 271,665 126,675 186,096 19,089 881,313 2013 259,818 — 132,112 120,091 252,203 119,996 29,091 20,700 681,808 (1)The amounts disclosed in this column include amounts voluntarily deferred under the Forum Energy Technologies, Inc. Deferred Compensation and Restoration Plan.(2)The amounts in this column reflect the aggregate grant date fair value of Performance Share Awards at the target amount, calculated in accordance with FASB Accounting Standards Topic 718. At the maximum amount, these values for Messrs. Gaut, Harris, Iyyanki, McCulloch and Mercado would be $2,451,594, $653,814, $871,616, $472,245 and $276,028. In February 2016, we issued 18,533, 4,943, 6,589, 3,570 and 2,087 shares of common stock to each of Messrs. Gaut, Harris, Iyyanki, McCulloch and Mercado in connection with the vesting of performance awards granted in February 2013, February 2014 and February 2015. For additional information, see Note 12 to our consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2015.(3)The amounts disclosed in the “2015”, “2014,” and “2013” rows represent the grant date fair value in 2015, 2014 and 2013, respectively, of restricted stock, restricted stock unit awards and stock options as determined in accordance with FASB Accounting Standards Topic 718. All 2013 equity awards were granted based on the fair market value of a share of our common stock being $26.05. Other assumptions with respect to stock options included: (a) an exercise price of $26.05; (b) an expected term of 6.25 years; (c) volatility of 30.46%; (d) a dividend yield of 0.0%; (e) a risk free investment rate of 1.17%; and (f) a Black-Scholes value of $8.41. All 2014 equity awards were granted based on the fair market value of a share of our common stock being $26.96. Other assumptions with respect to stock options included: (a) an exercise price of $26.96; (b) an expected term of 6.25 years; (c) volatility of 27.42%; (d) a dividend yield of 0.0%; (e) a risk free investment rate of 1.96%; and (f) a Black-Scholes value of $8.47. All 2015 equity awards were granted based on the fair market value of a share of our common stock being $18.68. Other assumptions with respect to stock options included: (a) an exercise price of $18.68; (b) an expected term of 6.25 years; (c) volatility of 32.28%; (d) a dividend yield of 0.0%; (e) a risk free investment rate of 1.82%; and (f) a Black-Scholes value of $6.59. For additional information, see Note 12 to our consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2015.(4)The amounts disclosed in this column represent the aggregate grant-date fair value of restricted stock, restricted stock unit awards and performance share awards, as reflected in columns A and B.(5)Amounts in the “2015”, “2014,” and “2013” rows reflect the MIP award payments that we made to each individual during the first quarters of 2015, 2014 and 2013, respectively. In light of market conditions in 2015 and the resulting reduction in the Company’s revenue, the CEO and each NEO reporting directly to the CEO voluntarily declined all cash incentive award payments that would have been earned under the 2015 MIP, an amount equal to approximately $0.5 million in the aggregate.(6)All amounts reflected in this column for 2015 represent contributions that we made to each individual’s 401(k) Plan account, contributions we made related to profit sharing for 2015 and matching contributions made in connection with our deferred compensation plan. The table below summarizes the amounts of such contributions and profit sharing for 2015. In the first quarter 2015, all matching contributions under the Company’s 401(k) Plan and deferred compensation plan were suspended.Name 401(k) Plan Contributions Profit Sharing Deferred Compensation Plan 5,257 — 15,792 9,522 — 4,789 3,654 — — 10,600 — — 5,283 — 366 (7)Mr. Gaut does not receive compensation for service as a director.(8)Mr. Iyyanki was not a named executive officer prior to 2014.Summary of actual CEO compensationName and Principal
Position Year Bonus
($) Performance
Share
Awards (2)
($)(A) Restricted
Stock /
Restricted
Stock Unit
Awards(3)
($) (B)
Awards (4)
(A+B) Non-Equity
Incentive
Plan Comp
(1)(5)($)
Other
Comp (6) 2015 659,794 — 129,910 750,719 880,629 — 21,049 1,561,472 2014 664,739 — 276,003 764,947 1,040,950 1,113,353 46,532 2,865,574 (1)The amounts disclosed in this column include amounts voluntarily deferred under the Forum Energy Technologies, Inc. Deferred Compensation and Restoration Plan.(2)The amounts disclosed in the “2015” and “2014” rows represent the aggregate fair value of the Performance Share Awards that vested in “2015” and “2014”, calculated in accordance with FASB Accounting Standards Topic 718.(3)The amounts disclosed in the “2015” and “2014” rows represent the aggregate fair value of restricted and stock restricted stock unit awards on their vesting date, in accordance with FASB Accounting Standards Topic 718.(4)The amounts disclosed in this column represent the aggregate fair value of restricted stock, restricted stock unit awards and performance share awards on the vesting date of such awards, as reflected in columns A and B. There was no realized value from the exercise of option awards.(5)Amounts in the “2015” and “2014” rows reflect the MIP award payments that we made to each individual during the first quarters of 2015 and 2014, respectively. In light of market conditions in 2015 and the resulting reduction in the Company’s revenue, the CEO voluntarily declined all cash incentive award payments that would have been earned under the 2015 MIP, an amount equal to $229,888.(6)All amounts reflected in this column for 2015 represent contributions that we made to each individual’s 401(k) Plan account, contributions we made related to profit sharing for 2015 and matching contributions made in connection with our deferred compensation plan. The table below summarizes the amounts of such contributions and profit sharing for 2015. In the first quarter 2015, all matching contributions under the Company’s 401(k) Plan and deferred compensation plan were suspended.Name 401(k) Plan Contributions Profit Sharing Deferred Compensation Plan 5,257 — 15,792 (7)Mr. Gaut does not receive compensation for service as a director.Grants of plan-based awards for 2015 Estimated Future Payouts
Under Equity Incentive Plan
Awards(1) Estimated Future Payouts
Under Non-Incentive Plan
Awards(2) All Other
Stock
Awards:
Number
of Shares
of
Stock (3)(4) All Other
Option
Awards:
Number of
Securities
Underlying
Options (3)(5)
or Base
Price of
Option
Awards (5) Grant
Date Fair
Value of
Stock and
Option Name Grant Date — 843,750 1,687,500 2/20/2015 170,710 18.68 1,124,979 2/20/2015 60,220 1,124,910 2/20/2015 15,055 60,220 120,440 1,225,797 — 319,902 639,804 2/20/2015 45,520 18.68 299,977 2/20/2015 16,060 300,001 2/20/2015 4,015 16,060 32,120 326,907 — 475,000 950,000 2/20/2015 60,700 18.68 400,013 2/20/2015 21,410 399,939 2/20/2015 5,353 21,410 42,820 435,808 — 277,322 554,644 2/20/2015 32,880 18.68 216,679 2/20/2015 11,600 216,688 2/20/2015 2,900 11,600 23,200 236,123 — 141,032 282,064 2/20/2015 19,220 18.68 126,660 2/20/2015 6,780 126,650 2/20/2015 1,695 6,780 13,560 138,009 (1)The amounts in this column represent the estimated future payouts under the long-term incentive plan for performance awards approved by the Committee during 2015. The performance awards were granted to the Company’s executive officers and are based upon our TSR, measured over a one-, two and three-year performance period. These awards are settled in the Company’s shares of common stock upon the attainment of specified performance goals based on relative TSR. If the minimum threshold for the performance period is not met, no amount will be paid for that period. Payments are calculated by linear interpolation for performance between the threshold and target and between the target and maximum for each component. For additional information about performance awards, please read “Compensation Discussion and Analysis — Elements of compensation for our named executive officers.”(2)These columns represent awards under our 2015 MIP. For additional information about the 2015 MIP, please read “Compensation Discussion and Analysis — Elements of compensation for our named executive officers.”(3)All awards in this column were made pursuant to our 2010 Plan. For additional information about the 2010 Plan, please read “Compensation Discussion and Analysis — Elements of compensation for our named executive officers — Long-Term Equity Based Incentives.”(4)This column consists of restricted stock units, which vest in four equal annual installments beginning on the first anniversary of the grant date.(5)This column consists of options to purchase our common stock granted in February 2015 and become exercisable in four equal annual installments beginning on the first anniversary of the grant date and expire on the tenth anniversary on the date of issuance. The exercise price may be paid in cash or by tendering shares of our common stock. Applicable tax obligations may be paid in cash or by the withholding of shares of our common stock. The exercise price for these nonqualified stock options represents the closing price of our common stock on the date of grant.(6)Represents the aggregate grant date fair value of the award computed in accordance with FASB ASC Topic 718.Outstanding equity awards at 2015 fiscal year endThe table below sets forth awards that were granted under the 2010Forum Energy Technologies, Inc. Amended and Restated 2016 Stock and Incentive Plan (the “2016 Plan”) and prior to the adoption thereof. Expiration dates are also shown for each individual award. Additionally, no performance-based equity grants were made prior to 2013. Option Awards Stock Awards Equity Incentive
Plan Awards Number of securities
underlying unexercised
options Option
exercise Option
expiration Number of
shares of stock
that have not Market
value of
shares of stock
that have not
vested(1) Unearned
shares that
have not
vested (2) Market
value of
unearned
shares that
have not
vested (1) exercisable unexercisable price date vested ($) (#) ($) 2,002,609 — $ 7.68 08/01/2020 16,558 (7) 206,313 70,588 879,520 145,687 48,563 (3) $ 20.00 04/12/2022 20,475 (8) 255,119 63,425 63,425 (4) $ 26.05 02/21/2023 31,297 (9) 389,961 33,312 99,639 (5) $ 26.96 02/21/2024 60,220 (10) 750,341 — 170,710 (6) $ 18.68 02/20/2025 192,000 — $ 7.68 08/01/2020 4,995 (7) 62,238 18,768 233,852 21,053 — $ 7.68 11/29/2020 5,120 (8) 63,795 9,509 — $ 15.35 12/7/2021 8,346 (9) 103,991 43,845 14,615 (3) $ 20.00 04/12/2022 16,060 (10) 200,108 15,855 15,855 (4) $ 26.05 02/21/2023 8,856 26,571 (5) $ 26.96 02/21/2024 — 45,520 (6) $ 18.68 02/20/2025 11,809 35,427 (5) $ 26.96 02/21/2024 31,961 (11) 398,228 23,883 297,582 — 60,700 (6) $ 18.68 02/20/2025 11,128 (9) 138,655 21,410 (10) 266,769 116,500 — $ 7.68 10/25/2020 4,163 (7) 51,871 13,633 169,867 36,352 12,118 (3) $ 20.00 04/12/2022 4,160 (8) 51,834 12,885 12,885 (4) $ 26.05 02/21/2023 6,028 (8) 75,109 6,396 19,191 (5) $ 26.96 02/21/2024 11,600 (10) 144,536 — 32,880 (6) $ 18.68 02/20/2025 30,700 — $ 15.35 12/02/2021 2,313 (7) 28,820 7,948 99,026 20,535 6,845 (3) $ 20.00 04/12/2022 2,305 (8) 28,720 7,135 7,135 (4) $ 26.05 02/21/2023 3,525 (9) 43,922 3,739 11,220 (5) $ 26.96 02/21/2024 6,780 (10) 84,479 — 19,220 (6) $ 18.68 02/20/2025 (1)Option Awards Stock Awards Name Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unxercisable Option Exercise Price ($) Option Expiration Date Number of Shares of Units of Stock That Have Not Vested (#) Market Value of Shares of Units of Stock That Have Not Vested(1) ($)Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) ($)Neal A. Lux 2,249(2)66,346 7,983(4)235,499 7,982(3)235,469 31,679(8)934,531 7,250(5)213,875 15,965(6)470,968 15,840(7)467,280 47,519(9)1,401,811 C. Christopher Gaut 6,342 ― $521.00 2/21/2023 21,433(2)632,274 22,175(11)654,163 6,642 ― $539.20 2/21/2024 22,174(10)654,133 8,535 ― $373.60 2/20/2025 18,729(5)552,506 14,610 ― $187.80 2/19/2026 22,317(13)658,352 5,586 ― $402.00 2/20/2027 33,085(12)976,008 D. Lyle Williams 249 ― $356.80 2/28/2022 2,814(2)83,013 7,983(4)235,499 758 ― $373.60 2/21/2025 7,982(3)235,469 17,600(8)519,200 1,645 ― $187.80 2/19/2026 7,250(5)213,875 707 ― $402.00 2/20/2027 15,965(6)470,968 1,499 ― $240.00 2/16/2028 8,800(7)259,600 26,400(9)778,800 John C. Ivascu 355 ― $278.40 8/27/2025 3,600(2)106,200 5,322(4)156,999 5,321(3)156,970 11,440(8)337,480 6,042(5)178,239 10,643(6)313,969 5,720(7)168,740 17,160(9)506,220 (1)Amounts in this column were calculated by assuming a market value of our common stock of $12.46 per share, the closing price of our common stock on December 31, 2015.(2)The number of unearned performance share awards and market value of unearned performance share awards disclosed in these columns assume that each unearned performance share award grant is paid out at the threshold level of performance in our common stock using the closing share price on December 31, 2015, except where the performance during the completed fiscal years over which performance for each grant is measured has exceeded the threshold, in which case the amounts are based on the next higher performance measure (target or maximum). Performance unit award grants are based upon a three-year cycle with vesting at the end of the cycle. The performance awards may only be settled in common stock.(3)Options vest on April 12, 2016.(4)Options vest annually in equal installments over a two-year period on each of February 21, 2016 and 2017.(5)Options vest annually in equal installments over a three-year period on each of February 21, 2016, 2017 and 2018.(6)Options vest annually in equal installments over a four-year period on each of February 20, 2016, 2017, 2018 and 2019.(7)Restricted stock vests on April 12, 2016.(8)Restricted stock units vest annually in equal installments over a two-year period on each of February 21, 2016 and 2017.(9)Restricted stock units vest annually in equal installments over a three-year period on each of February 21, 2016, 2017 and 2018.(10)Restricted stock units vest annually in equal installments over a four-year period on each of February 20, 2016, 2017, 2018 and 2019.(11)Restricted stock units vest annually in equal installments over a three-year period on each of January 13, 2016, 2017 and 2018.Options exercised and stock vested in the 2015 fiscal yearValues shown in the table below were calculated by multiplying the number of shares of restricted stock or restricted stock units that vested by the market value of our common stock onof $29.50 per share, the date of vesting and stock options exercised by the difference between the market valueclosing price of our common stock on December 30, 2022, the datelast trading day of exercise and2022.(2)Restricted stock units that vested on February 21, 2023.(3)Performance cash-settled phantom stock units granted on February 19, 2021, for which the exercisestock price performance condition has been satisfied, which vested on on February 19, 2023. The phantom stock units will be forfeited upon a termination of suchemployment prior to vesting, except in limited circumstances.(4)Performance cash-settled phantom stock options. Number of shares
acquired on vesting Stock option
awards exercised 37,227 $ 754,343 95,000 (1) $ 669,750 12,123 $ 233,542 30,000 (1) $ 199,500 14,362 $ 249,000 — — 8,251 $ 168,945 — — 4,639 $ 94,887 — — (1) All options were exercised and held by Messrs. Gaut and Harris.Pension benefitsWe maintainunits granted on February 19, 2021 that are expected to be settled on February 19, 2024, subject to achievement of a 401(k) Plan for our employees, including our named executive officers, but our named executive officers do not participate in a defined benefit pension plan.Non-qualified deferred compensationIn 2013, we adopted a non-qualified deferred compensation plan that permits eligible participants, including our named executive officers, to make contributions (and to receive matching contributions) in excessminimum stock price threshold of the Internal Revenue Code limitations. In February 2015 and in light of the suspension$23.49, which was 125% of the Company’s 401(k) matching program,closing stock price on the Committee determined itgrant date, for a total of3820 trading days during the period from February 19, 2023 through February 19, 2024. The phantom stock units will be forfeited upon a termination of employment prior to vesting, except in limited circumstances.(5)Restricted stock units for which the stock price performance condition has been satisfied that now vest on August 12, 2023. The RSUs will be forfeited upon a termination of employment prior to vesting, except in limited circumstances.(6)Restricted stock units that vest in two equal annual installments on February 19, 2023 and February 19, 2024.(7)Performance restricted stock units granted on February 18, 2022 for which the stock price performance condition has been satisfied, which vested on February 18, 2023.(8)Performance Restricted stock units granted on February 18, 2022 that are expected to be settled in equal annual installments on February 18, 2024 and February 18, 2025, subject to achievement of a minimum stock price threshold of $23.68, which was appropriate125% of the Company’s closing stock price on the grant date, for a total of 20 trading days during the following portions of the three-year performance period ending February 18, 2025: Tranche 2: February 18, 2023 through February 18, 2025; and Tranche 3: February 18, 2024 through February 18, 2025. The Performance RSUs will be forfeited upon a termination of employment prior to suspend matching contributionsvesting, except in limited circumstances.(9)Restricted stock units that vest in three equal annual installments on participant deferrals underFebruary 18, 2023, February 18, 2024 and February 18, 2025.(10)Performance restricted stock units granted on February 19, 2021, for which the deferred compensation plan.plan providesPerformance RSUs will be forfeited upon a termination of employment prior to vesting, except in limited circumstances.(11)Performance restricted stock units granted on February 19, 2021 that are expected to be settled on February 19, 2024, subject to achievement of a participant may defer upminimum stock price threshold of $23.49, which was 125% of the Company’s closing stock price on the grant date, for a total of 20 trading days during the period from February 19, 2023 through February 19, 2024. The Performance RSUs will be forfeited upon a termination of employment prior to 50%vesting, except in limited circumstances.(12)Cash-settled phantom units that vest in two equal annual installments on February 18, 2023 and February 18, 2024.(13)Cash-settled phantom units that vested on February 19, 2023.Severance AgreementsEach of his base compensationMessrs. Lux, Williams and all or any portion of his bonus. All deferred amountsIvascu are creditedparty to a severance agreement with earnings throughus. Under these severance agreements, in the date paid.Each named executive officerevent an NEO’s employment is 100% vested in all prior matching contributionsterminated by us without “Cause” (and not as a result of having satisfied the service requirements. Benefits under the plan are paid upon termination of employment in a cash lump sumdeath or in annual installments over a period not longer than five years, as the participant elects. The Committee is responsible for administering this plan.Upon a “change of control” within the meaning of the 2010 Plan, all account balances will be fully vested.The following table provides detail with respect to each defined contribution that provides for the deferral of compensation on a basis that is not tax-qualified: Executive
Contributions
in Last Fiscal
Year ($) Registrant
Contributions
in Last Fiscal
Year ($) Aggregate
Earnings in
Last Fiscal
Year ($) Aggregate
Withdrawals /
Distributions
($) Aggregate
Balance at
Last Fiscal
Year End C. Christopher Gaut 1,180,853 — 50,136 — 1,230,989 James W. Harris 350,934 — 13,655 — 364,589 Prady Iyyanki — — — — — James L. McCulloch — — — — — Pablo G. Mercado 52,165 — 2,170 — 54,335 Employment agreementsWe entered into employment agreements with Messrs. Gaut and Harris effective August 2, 2010. We entered into an employment agreement with Messrs. McCulloch and Iyyanki effective October 25, 2010 and January 13, 2014, respectively. Mr. Mercado is not a party to an employment agreement with Forum. In January 2016, Messrs. Gaut, Harris, Iyyanki and McCulloch voluntarily agreed to a ten percent reduction in their annual base salary and declined their 2015 bonus in order to support our cost reduction initiatives, and waived any claims under their employment agreements related thereto. None of the contracts provide for excise tax protections in the event of a change in control.Each employment agreement contains substantially similar provisions with the exception of the determination of the amount of the severance benefit described below under “Quantification of payments.” Each employment agreement automatically extends for one-year periods on the anniversary of the effective date unless either party gives sixty days prior written notice of its intention to not renew the term of employment. The employment term can also be terminated at any time upon prior written notice by usdisability) or the executive. Each employment agreement provides that the annual base salary for the executive will not be less than the following: Mr. Gaut, $625,000; Mr. Harris, $300,000; Mr. Iyyanki, $475,000; and Mr. McCulloch, $285,000. Each executive will be eligible to participate in, and may be awarded an annual bonus under, our annual cash incentive bonus program if certain performance targets are met for the performance period, which is expected to be each calendar year. Under each of the employment agreements, if the executive’s employment is terminated prior to the expiration of the term by the executiveNEO for good reason, by notice of non-renewal by us or by our action for any reason other than“Good Reason,” the executive’s death or disability or for cause, subject to the executive’s execution and nonrevocation of a release within the period specified in the employment agreement, the executive will be entitled to receive certain severance payments and benefits from us. Please see the “Potential payments upon termination and change in control” section below for a more detailed description of the terms and payments provided under each of the employment agreements in connection with severance benefits upon certain terminations of employment.Potential payments upon termination and change in controlThe employment agreements we maintain with our named executive officers will provide the executives with severance benefits upon certain terminations of employment, and the individual award agreements that govern our stock option and restricted stock awards under the 2010 Plan contain accelerated vesting provisions that will apply upon a Change in Control (as defined below).The employment agreements for each of our named executive officers contain similar termination provisions. Under the employment agreements, if the executive’s employment is terminated prior to the expiration of the term by the executive for good reason (as defined below), by notice of non-renewal by us or by our action for any reason other than his death or disability (as defined below) or for cause (as defined below), subject to the executive’s execution and nonrevocation of a release within the period specified in the employment agreement, the executiveNEO will be entitled to receive the following benefits: (1) a•A lump sum payment of an amount equal to two (or three if the applicable “severance multiple” timestermination is within two years after a change in control) multiplied by the sum of his(A) the NEO’s annual base salary at the time of the termination plus a specified percentage of his(B) the NEO’s annual base salary (2) amultiplied by the NEO’s highest target bonus opportunity in the year of termination or the two preceding years;•A lump sum payment of an amount equal to histhe NEO’s unpaid bonus for the prior calendar year, if any, payable at the same time such bonus is paid to active executives, (3) aexecutives;•A lump sum payment of an amount equal to histhe NEO’s bonus for the calendar year in which hissuch termination occurs, if any, as determined in good faith by our board of directors in accordance withbased on the applicable performance criteria, established pursuant to the employment agreement, prorated through and including the date of termination, payable at the same time as such bonus is paid to active executivesexecutives; and (4) if he•If the NEO elects COBRA continuation coverage for himself and his eligible dependents, monthly reimbursement of the differential between the COBRA premium and the active executive contribution amount for such coverage under ourthe Company’s group health plans for up to eighteen months.The employmentOur severance agreements as a matter of policy do not provide thatfor excise tax protections in the “severance multiple” in clause (1) above is two for each of our named executive officers unless the executive’s termination of employment occurs on or within two yearsafter the occurrenceevent of a Changechange in Control, in which case the “severance multiple” is three.control. The employmentseverance agreements for our named executive officers provide that any payments or benefits to which the executiveNEO may be entitled (whether under the employment agreement or otherwise), which would be subject to a parachute payment excise tax under Section 4999 of the Code will be reduced to an amount that would no longer create a parachute payment or be paid in full, whichever produces the better net after-tax position for the executive.NEO. If a named executive officer’s employmentthe NEO is terminated for any reason other than those described above, the employment agreements state that the executiveNEO will continue to receive his compensation and benefits to be provided by us untilthrough the date of termination, and the compensation and benefits will terminate contemporaneously with the termination of his employment. Under the terms of the employmentseverance agreements, subject to certain exceptions, the executivesNEO’s may not compete in the market in which we and our respective affiliates engage during histhe NEO’s employment and for two years following the termination thereof.39As used in the severance agreements:•“Cause” generally occurs when the NEO has (1) engaged in gross negligence or willful misconduct in the performance of his employment.The employment agreements define the term “Goodduties with respect to us, (2) materially breached any material provision of his agreement or any written corporate policy, (3) willfully engaged in conduct that is materially injurious to us or (4) been convicted of, pleaded no contest to or received adjudicated probation or deferred adjudication in connection with a felony involving fraud, dishonesty or moral turpitude.•“Good Reason” asgenerally means any of the following events: (1) a material decrease in annual base salary (other than as part of a decrease of up to 10% for all of our executive officers); (2) in the case of Mr. Gaut, the executive’s demotion from his current position with Forum, and in the case of Messrs. Harris, Iyyanki and McCulloch a material diminution in the executive’s authority, duties or responsibilities (other than certain changes in management structure primarily affecting reporting responsibility); or (3) an involuntary relocation of the geographic location of the executive’s principal place of employment by more than 75 miles. “Disability”Employee BenefitsOur 401(k) Plan is generally defineddesigned to allow all employees, including the participating NEOs, to contribute on a pre-tax or Roth after-tax basis. Each participant may elect to contribute up to 75% of his or her compensation to the 401(k) Plan as pre-tax or Roth after-tax contributions (but limited by the statutory maximum of $20,500 for 2022). Additionally, participants age 50 years and older may make a “catch-up contribution” to the 401(k) Plan each year up to an executive’s inabilityamount set by statute ($6,500 for 2022).We have the discretion to performprovide a profit-sharing contribution to each participant depending on the executive’s duties or fulfill his obligationsCompany’s performance for the applicable year. There were no profit-sharing contributions made in 2022. The Company reinstated matching contributions under the employment agreement by reason401(k) Plan in January 2022. We matched 100% of any physical or mental impairment for a continuous periodeach employee’s (including the NEO’s) contributions up to 3% of not less than three months. The employment agreements state that a termination for “Cause” will occur when an executive has (a) engaged in gross negligence or willful misconduct incash compensation deferred and 50% of each employee’s (including the performance of his duties with respect to us, (b) materially breached any material provision of his employment agreement or any written corporate policy, (c) willfully engaged in conduct that is materially injurious to us or (d) been convicted of, pleaded no contest to or received adjudicated probation or deferred adjudication in connection with a felony involving fraud, dishonesty or moral turpitude.Mr. Mercado is a participant in our severance plan, which is made available to certain individuals designated by our Chief Executive Officer. Under the severance plan, if the participant incurs a qualifying termination event (as defined in the severance plan), the participant will be entitled to receive a severance benefit equal to a lump sum payment of an amount equalNEO’s) contributions up to the applicable “severance multiple” times the sumnext 2% of his annual base salary at the time of the termination plus such amounts the participant could have received in cash had he not elected to contribute to an employee benefit plan maintained by us. The severance plan provides that the “severance multiple” is one for each participant unless the participant’s termination of employment occurs on or within two years after the occurrence of a Change in Control, in which case the “severance multiple” is two.In terms of the severance benefits payable to our named executive officers under the circumstances described above that are based on the “severance multiple,” the following table sets out the formula for determining the amount of such benefits for the named executive officers under the agreements or the severance plan, as applicable.Executive Base salary as of
December 31, 2015
(“B”) 2015 annual bonus
target (“T”) as a
percent of base Severance amount for
termination not within
2 years after a change
in control Severance amount for
termination within 2
years after a change
in control $ 675,000 125 2 times (B+T) 3 times (B+T) $ 399,877 80 2 times (B+T) 3 times (B+T) $ 475,000 100 2 times (B+T) 3 times (B+T) $ 346,653 80 2 times (B+T) 3 times (B+T) $ 282,064 50 1 times (B+T) 2 times (B+T) “Change in Control” is generally defined in the employment agreements to occur upon (1) the acquisition by an individual, entity or group (within the meaning of the Exchange Act) of the beneficial ownership of fifty percent or more of either (a) our then outstanding shares of common stock, or (b) the combined voting power of our then outstanding voting securities entitled to vote in our election of directors; (2) the date the individuals who, immediately following the time when our stock became publicly traded, constitute our board of directors(and certain approved individuals who become directors after such time) cease to constitute a majority of the board of directors; or (3) the consummation of a corporate transaction (merger, reorganization, consolidation or a sale of all or substantially all of our assets) unless, following that transaction, all or substantially all of the individuals and entities that were the beneficial owners of our outstanding common stock and outstanding voting securities prior to the transaction still beneficially own more than fifty percent of those shares of common stock or voting power of the resulting entity following the transaction and at least a majority of the members of the board of directors of the ultimate parent entity resulting from the transaction were members of our board of directors at the time of the execution of the agreement that led to the transaction.The restricted stock, restricted stock unit and stock option award agreements under our 2010 Plan have accelerated vesting provisions in the event of a Change in Control (the 2010 Plan and award agreements contain substantially the same definition of a Change in Control as provided within the named executive officer’s employment agreement). If a Change in Control occurs during the period of time that the award is still outstanding, any unvested portion of the award will immediately vest so long as the executive has been continuously employed with us from the date of grant until the Change in Control event. With respect to the performance share awards, in the event of a Change in Control (as defined in the 2010 Plan) all performance share awards will vest and be earned at the target level for each applicable performance period. All incentive awards issued in February 2016 include double trigger change in control vesting provisions.Quantification of paymentsThe table below discloses the amount of compensation and/or benefits due to our named executive officers in the event of their termination of employment and/or in the event we undergo a Change in Control. The amounts disclosed assume such termination and/or the occurrence of such Change in Control was effective December 31, 2015, and uses the closing price of our common stock on that date of $12.46. The column titled “Termination without cause, for good reason or due to non-extension by company not within a two-year period following a change in control” utilizes the one times (B+T) formula above, except for Mr. Mercado who would receive one times base salary, while the column titled “Termination without cause, for good reason or due to non-extension by company within a two-year period following a change in control” utilizes the three times (B+T) formula, except for Mr. Mercado who would receive two times base salary. COBRA premiums reflected below are based upon the monthly premiums in effect for each of the named executive officers with respect todeferred.We also provide medical, dental and vision expenses effectivecoverage to all of our full-time employees, as of January 1, 2016 for a period of eighteen months. The amounts below constitute estimates of the amounts that would be paid out to our named executive officers upon their respective terminations and/or upon a Change in Control under such arrangements, but final amounts can only be determined with certainty upon the actual event. The actual amounts to be paid out are dependent on various factors, which may or may not exist at the time a named executive officer is actually terminated and/or a Change in Control actually occurs. Therefore, such amountswell as basic life and disclosures should be considered “forward-looking statements.”Named Executive Officer Termination due to
death or disability ($) Termination without
cause, for good reason or
due to non-extension by
company not within a
two-year period following
a change in control ($) Termination without
cause, for good reason or
due to non-extension by
company within a
two-year period following
a change in control ($) Change in control
without
termination ($) N/A 1,350,000 2,025,000 — N/A 1,687,500 2,531,250 — N/A 13,798 13,798 — 900,721 N/A 2,868,790 2,868,790 900,721 3,051,298 7,438,838 (2) 2,868,790 N/A 799,754 1,199,631 — N/A 639,803 959,705 — N/A 20,318 20,318 — 237,450 N/A 765,218 765,218 237,450 1,459,875 2,944,872 (2) 765,218 N/A 950,000 1,425,000 — N/A 950,000 1,425,000 — N/A 20,318 20,318 — 261,448 N/A 1,193,680 1,193,680 261,448 1,920,318 4,063,998 (2) 1,193,680 N/A 693,306 1,039,959 — N/A 554,645 831,967 — N/A 1,423 1,423 — 175,237 N/A 569,210 569,210 175,237 1,249,374 2,442,559 (2) 569,210 N/A 282,064 564,128 — N/A — — — N/A — — — 101,424 N/A 328,608 328,608 101,424 282,064 892,736 (2) 328,608 1,676,280 7,962,929 17,783,003 5,725,506 Equity Compensation Plan Information(1)Calculated based on (i) the difference between the closing price of our common stock on December 31, 2015 ($12.46) and the exercise price of unvested stock options as of such date, in the case of stock options, and (ii) the closing price of our common stock on December 31, 2015 ($12.46), in the case of restricted stock, restricted stock units or performance shares.(2)Each of our NEO’s compensation may be reduced such that no portion of such amounts and benefits received are subject to an excise tax under Section 4999 of the Code.The following table sets forth information about our common stock that may be issued under our existing equity compensation planplans as of December 31, 2015.Plan Category Number of
Securities to be
Issued upon Exercise of
Outstanding Options,
Warrants and Rights Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights Number of
Securities
Remaining
Available for
Future Issuance Equity compensation plans approved
by security holders(1) 4,179,792 $ 10.80 9,141,329 (2) Equity compensation plans not approved by security holders 0 0 0 4,179,792 $ 10.80 9,141,329 Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Equity compensation plans approved by security holders (1)53,369 $349.07 325,801(2)Equity compensation plans not approved by security holders — — — Total 53,369 $349.07 325,801 (1)Consists of the 2010 Plan and the Employee Stock Purchase Plan.(2)(1)Consists of the 2016 Plan and the Employee Stock Purchase Plan. The Employee Stock Purchase Plan was suspended in January 2020.(2)Shares remaining available for issuance under the 2010 Plan with respect to awards (other than outstanding awards) could be issued in the form of stock options, stock appreciation rights, stock awards and stock units. From January 1, 2016 through March 21, 2016, we have issued an additional 2,487,290 awards under the plan in the form of restricted stock units, restricted stock, stock options and performance shares assuming achievement of targets set by the board of directors). In 2015, we issued 178,458 shares of common stock under our Employee Stock Purchase Plan.PROPOSAL 3: APPROVAL OF THE FORUM ENERGY TECHNOLOGIES, INC.2016 STOCK AND INCENTIVE PLANOur board of directors has unanimously adopted a resolution to submit to a vote of our stockholders the Forum Energy Technologies, Inc. 2016 Stock and Incentive Plan (the “2016 Plan”), as set forth in Appendix A to this proxy statement. We are seeking shareholder approval of the 2016 Plan to preserve tax deductions available under section 162(m) of the Internal Revenue Code.We are not seeking approval for additional shares under the 2016 Plan.We currently maintain the Forum Energy Technologies, Inc. 2010 Stock Incentive Plan, as amended from time to time (the “2010 Plan”). As of March 21, 2016, the 2010 Plan had 6,697,653 shares of our common stock available for future awards. If this proposal is adopted, the 2010 Plan will expire but continue to govern outstanding awards previously granted under it; all shares remaining available for awards under the 2010 Plan will become available for awards under the 2016 Plan and future equity awards will be granted under the 2016 Plan.The 2016 Plan’s purposes are to: (i) attract able persons to serve as employees, directors and consultants to Forum and its affiliates, (ii) to strengthen such individuals’ concern for the long-term welfare of Forum and its affiliates, and (iii) to provide such individuals with additional incentive and reward opportunities designed to enhance the profitable growth of Forum and its affiliates over the long-term.Vote Required and Board RecommendationIf the votes cast in person or by proxy at the annual meeting in favor of Proposal 3 exceed the votes cast opposing the proposal, the 2016 Plan will be approved; provided that votes representing more than 50% of Forum’s outstanding shares of common stock are cast on the proposal. If stockholders approve the 2016 Plan, Forum’s authority to grant awards under the 2010 Plan will terminate. If stockholders do not approve the 2016 Plan, Forum will continue to have the authority to grant awards under the 2010 Plan.Your board of directors unanimously recommends a vote“FOR” approval of the 2016 Stock and Incentive Plan taking into account the following:Forum believes that its employees, directors and consultants are recognized as the best in the industry and that equity-based compensation is critical to their recruitment and retention.The Committee believes that awards under the 2016 Plan are a strategically favorable means of assuring employee, director and consultant alignment with stockholders.Forum believes that awards under the 2016 Plan support our“pay-for-performance” philosophy and motivate employees, directors and consultants both to achieve short-term business goals and to enhance long-term stockholder value.Summary of the 2016 PlanThe following summary of the 2016 Plan is qualified by reference to the full text thereof, which is attached as Appendix A to this proxy statement.Important Features of the 2016 PlanThe 2016 Plan contains the following important features:No additional shares are being requested for approval;Stock options and stock appreciation rights may not have an exercise price less than fair market value on the date of grant and may not have an exercise period in excess of ten years;The exercise price of an option or stock appreciation right may not be reduced nor may an option or stock appreciation right be exchanged for cash, an option or stock appreciation right with a lower exercise price or a new award without prior stockholder approval;Awards under the 2016 Plan payable in shares of common stock are subject to a minimum restricted period or vesting period of one year, provided that five percent of shares available for award are not subject to such minimum vesting or restriction period;The 2016 Plan does not provide for automatic single-trigger vesting upon a change in control; rather, the 2016 Plan provides for double trigger vesting such that awards automatically vest only if a participant is involuntarily terminated without cause or terminates with good reason within two years after a change in control;Awards under the 2016 Plan are subject to Forum’s Stock Ownership Requirements Policy; andAwards under the 2016 Plan are subject to recoupment or clawback pursuant to any applicable law, securities exchange listing standards or policy of Forum.Shares of Common Stock ReservedThe aggregate number of shares of common stock that may be issued under the 2016 Plan with respect to awards may not exceed the number of shares of common stock reserved but not(other than outstanding awards) could be issued under the 2010 Plan as of the date of the annual meeting. As previously approved by our stockholders, to the extent that an award under the 2016 Plan lapses or the holder’s rights terminate, shares subject to such award shall again become available for awards under the 2016 Plan. In addition, shares that are forfeited, surrendered in payment for the purchase price or exercise price of an award, and shares withheld to pay applicable taxes associated with awards shall again become available for awards under the 2016 Plan. Shares awarded under the 2016 Plan may consist of authorized but unissued common stock or common stock previously issued and reacquired by Forum.Award LimitationsAwards under the 2016 Plan are subject to the following maximum limitations:No participant may receive in any one calendar year awards denominated in shares, options or stock appreciation rights with respect to more than 2 million shares of common stock;No participant may be granted in any one calendar year cash awards having a grant date value in excess of $20,000,000;Any payment pursuant to a performance award shall be paid no later than ten years after the grant date of such award; andAwards to non-employee directors in any one calendar year may not have a grant date value in excess of $950,000.Minimum Vesting RestrictionsExcept for awards under the 2016 Plan that are payable solely in cash, all awards under the 2016 Plan are subject to a minimum vesting period of one year from the date of grant (the “Minimum Restrictions”). Notwithstandingthe forgoing, the one-year minimum vesting provisions do not apply to 5% of the total shares available for awards under the 2016 Plan. Since April 2012, the Company has made only one equity grant with a vesting period that was less than one-year. The vast majority of our awards have included a four year vesting period. All awards to our named executive officers also include a four year vesting schedule with the exception of performance share awards, which are designed to track the Company’s one, two and three year total shareholder return. On a going forward basis, we are committed to including multi-year vesting schedules in all award grants, except for extraordinary circumstances.Stock Ownership Requirements PolicyAwards under the 2016 Plan are subject to Forum’s Stock Ownership Requirements Policy (the “Stock Ownership Policy”). Refer to the disclosure of the policy under “Executive Stock Ownership Requirements” on page 44 of this proxy statement. The Stock Ownership Policy provides that the our Chief Executive Officer must maintain a level of ownership in us that is greater than or equal to six times his or her annual base salary. In addition, the Stock Ownership Policy includes similar holding requirements for our executive officers and directors, although at lower multiples of annual salary or retainer. All of the Company’s executive officers and directors are currently in compliance with the Stock Ownership Policy. Given that the Stock Ownership Policy requires a significant number of shares to be held, which clearly aligns directors and executives with the interests of stockholders, we believe that this is more effective than imposing a minimum holding period. We also believe that imposing such a holding period in addition to the Stock Ownership Policy would be unduly restrictive for executive officers.Eligibility for ParticipationAll employees and consultants of Forum and its affiliates and all non-employee directors of Forum are eligible for awards under the 2016 Plan.AdministrationThe 2016 Plan is administered by the Nominating, Governance & Compensation Committee of Forum’s board of directors or any other committee that may be designated by the board of directors (the “Committee”). The Committee or our board of directors will select the employees, consultants and non-employee directors who will receive awards, determine the type and terms of awards to be granted, interpret and administer the 2016 Plan, prescribe rules and regulations relating to the 2016 Plan and to make all other determinations necessary or advisable for administering the 2016 Plan. Our Chief Executive Officer may be delegated authority to administer the 2016 Plan, including making awards thereunder, however, neither the board of directors nor the Committee may delegate to any person the authority to grant Awards to, or take other action with respect to, participants who are subject to Section 16 of the Securities Exchange Act of 1934, as amended.Subject to the express terms of the 2016 Plan, the Committee may accelerate the vesting or exercisability of an award, eliminate or make less restrictive the restrictions contained in an award and waive restrictions or other provisions in an award. This represents a continuation of the authority previously granted to the Committee by our stockholders. Our executives receive long-term equity awards, which form a substantial percentage of their annual compensation. Our equity award agreements generally provide for forfeiture of unvested awards. If the Committee does not retain the ability to accelerate, which they would do when “good actors” choose to retire, the retention value of equity grants to executives at or close to retirement age would be lost. On a historical basis, the Committee has exercised its discretion to accelerate awards only twice, both in connection with the retirement of two executives, one in 2013 and another in 2014. Both executives were key players in our founding and development.Terms, Conditions and Limitations of AwardsStock Options. Stock options are subject to such terms and conditions as may be established by the Committee and are not inconsistent with the 2016 Plan. The option exercise price cannot be less than the fairmarket value per share of the common stock on the date of grant, and stock options may not be exercised more than 10 years after the date of grant. Stock options granted to employees may be incentive stock options (“ISOs”) under Section 422 of the Internal Revenue Code, nonqualified stock options or a combination thereof. Directors are not eligible for ISOs but may be granted nonqualified stock options. The Committee may neither lower a granted option’s exercise price nor exchange a granted option for cash, an option with a lower exercise price or a new award.Stock Appreciation Right. The Committee may grant an award that is in the form of a stock appreciation right (“SAR”). A SAR isoptions, SARs, stock awards and stock units.40Pay Versus PerformanceAs required by Section 953(a) of the right to receive anDodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive "compensation actually paid" and certain financial performance of the Company. The compensation actually paid does not reflect the actual amount of common stockcompensation earned by or cash equal topaid during the appreciation in value of a specified number of shares of common stock over a particular period of time. SARs are subject to such termsapplicable year. For further information concerning the Company’s pay for performance philosophy and conditions as may be established byhow the Committee and are not inconsistentCompany aligns executive compensation with the 2016 Plan. The SAR exercise price cannot be less than the fair market value per share of the common stock on the date of grant, and SARs may not be exercised more than 10 years after the date of grant. The Committee may neither lower an awarded SAR’s exercise price nor exchange an awarded SAR for cash, a SAR with a lower exercise price or a new award.Restricted Stock Award. The Committee may grant an award of common stockCompany’s performance, refer to participants subject to certain forfeiture restrictions. In addition to the Minimum Restrictions, such forfeiture restrictions may include (i) the attainment of one or more performance measures, (ii) the attainment of a specified employment term, (iii) the occurrence of an event or (iv) any combination of the above. The Committee has the sole discretion to determine forfeiture restrictions and it may vary the forfeiture restrictions for each award. Participants may receive dividends with respect to common stock subject to a restricted stock award and may vote such shares, but they may not sell, transfer, pledge, or otherwise dispose of the common stock until the forfeiture restrictions have lapsed. A participant is not required to make a payment for common stock received pursuant to a restricted stock award unless required by applicable law.Restricted Stock Unit Award. The Committee may grant restricted stock units to participants, which may be payable in cash, shares of common stock or a combination thereof. Restricted stock unit awards will be subject to certain forfeiture restrictions. In addition to the Minimum Restrictions, such forfeiture restrictions may include (i) the attainment of one or more performance measures, (ii) the attainment of a specified employment term, (iii) the occurrence of an event or (iv) any combination of the above. The Committee has the sole discretion to determine forfeiture restrictions and it may vary the forfeiture restrictions for each award. In the Committee’s discretion, cash dividend equivalents may be paid on restricted stock unit awards but the recipients of such awards will not otherwise be entitled to the privileges and rights of stockholders unless the award is denominated in common stock and until common stock is delivered to the participants.Bonus Stock Award. The Committee may grant participants unrestricted shares of common stock on such terms and conditions as the Committee shall determine. Bonus stock awards are not subject to the Minimum Restrictions and are limited to no more than 5% of the total shares available for awards under the 2016 Plan. In its sole discretion, the Committee will determine the purchase price, if any, for common stock issued as a bonus stock award.Performance Measures. The Committee may condition any award under the 2016 Plan on the achievement of one or more performance measures. The Committee shall determine the performance measures to be achieved and the length of time allowed to achieve any performance measures. The term “performance measures” means the measures established by the Committee that are to be achieved with respect to an award, which may be absolute, relative to one or more other companies, relative to one or more indices, or measured by reference to Forum alone, an affiliate, a business unit of Forum or an affiliate, or Forum together with one or more of its affiliates.The performance measures intended to qualify under Section 162(m) of the Internal Revenue Code, shall include one or more of the following: (i) the price of a share of common stock, (ii) earnings per share,(iii) market share, (iv) sales, (v) operating income or operating income margin, (vi) net income or net income margin (before or after taxes), (vii) cash flow or return on investment, (viii) the earnings or earnings margin before or after interest, taxes, depreciation, and/or amortization, (ix) the economic value added, (x) the return on capital, assets, or stockholders’ equity, (xi) the total stockholders’ return, (xii) working capital efficiency, (xiii) safety performance, (xiv) after-tax operating income, (xv) capital efficiency, (xvi) cash from operations, (xvii) cost ratios, (xviii) cost reductions, (xix) customer growth, (xx) debt reduction, (xxi) earnings per share growth, (xxii) increase in cash flow, (xxiii) increase in cash flow return, (xxiv) increased revenue, (xxv) internal rate of return, (xxvi) net cash flow, (xxvii) net cash flow before financing activities, (xxviii) net income per share, (xxix) proceeds from dispositions, (xxx) project completion time and budget goals, (xxxi) return on equity, (xxxii) return on net assets, (xxxiii) return on capital compared to cost of capital, (xxxiv) return on capital employed, (xxxv) return on invested capital, (xxxvi) revenue ratios, (xxxvii) shareholder value, (xxxviii) total market value, or (xxxix) any combination of the foregoing.The Committee determines, at the time the award is granted, which measures to use with respect to an award and the weighting of the objectives if more than one is used. A performance measure may include multiple measuring levels, with the size of the performance award based on the level attained. A performance measure need not be based on an increase or a positive result and may include, for example, maintaining the status quo or limiting economic losses.Performance Awards. A qualified performance award is subject to the achievement of one or more of the objective performance measures listed above over a performance period determined by the Committee. Performance awards may also be nonqualified, in which case they shall be based on the achievement of goals determined by the Committee. The Committee may grant a performance award consisting of any type of award or combination of awards. In its discretion, the Committee may adjust“Executive Compensation.”Year Summary Compensation Table Total for Mr. Gaut ($) Compensation Actually Paid to Mr. Gaut(1) ($)Summary Compensation Table Total for Mr. Lux ($) Compensation Actually Paid to Mr. Lux(2) ($)Average Summary Compensation Table for Non-PEO NEOs(3) ($)Average Compensation Actually Paid to Non-PEO NEOs(4) ($)Value of Initial Fixed $100 Investment Based on Total Shareholder Return(5) ($)Net Income(6) ($)2022 7,155,857 9,292,123 3,593,144 5,238,826 2,362,076 3,415,962 247.90 3,712,000 2021 3,216,316 3,466,505 ―(7)―(7)1,467,954 1,497,920 134.87 (82,651,000) (1) Represents the amount of cash“compensation actually paid” to Mr. Gaut, as computed in accordance with SEC rules and does not reflect the actual amount of compensation earned by or shares payable pursuant to a qualified performance award downward, but the Committee may not adjust such awards upward. A participant is not entitled to the privileges and rights of a stockholder for performance awards covering shares of common stock until such shares are delivered to the participant.Cash Award. The Committee may grant an award in cash. Any such cash award shall be subject to performance measures as determined by the Committee.Other Terms and LimitationsTransferability. Awards under the 2016 Plan, other than ISOs, generally will not be transferable other than by will or the laws of descent and distribution, pursuant to a qualified domestic relations order or with the consent of the Committee. ISOs generally will not be transferable other than by will or the laws of descent and distribution and will be exercisablepaid during the participant’s lifetime only by such participant or the participant’s guardian or legal representative.Adjustments to Awards Following Grant.applicable year. In limited circumstances, awards granted under the 2016 Plan may be adjusted. If Forum recapitalizes, reclassifies its stock, or otherwise changes its capital structure, the number and class of shares of common stock or other property covered by an award shall be adjusted as if the grantee of such an award held the stock covered by the award immediately prior to the recapitalization, and the shares available for grant and share limits under the 2016 Plan shall also be adjusted to reflect the change.In the event (i) of a merger, consolidation or reorganization, (ii) of a sale of substantially all Forum’s assets, (iii) of liquidation of Forum, (iv) of an acquisition by a person of more than 50% of Forum’s outstanding voting stock or (v) any members of Forum’s board of directors immediately following the 2016 Annual Meeting (including any subsequent directors approved by a majority of the incumbent board) cease to constitute a majority of the board of directors, the Committee shall effect one or more ofaccordance with SEC rules, the following adjustments were made to prevent diminution or enlargement oftotal compensation determine the intended benefits under the 2016 Plan: (a) accelerate the vesting and exercisability of awards; (b) require participantscompensation actually paid. The valuation assumptions used to surrender some or all of their outstanding awards in exchange for cash; or (c) make adjustments to the then outstanding awards (as well as shares available for grant under the 2016 Planand share-based 2016 Plan limits) as the Committee deems appropriate to reflect the event, including adjusting the awards to include securities of the surviving or acquiring corporation or other property.Tax Withholding. Forum has the right to deduct any taxes required by law to be withheldcalculate fair values did not materially differ from all awards and to require any payments required to enable it to satisfy its withholding obligations.Change in Control. If a participant’s employment with Forum is terminated involuntarily by Forum without “cause” (as defined in the 2016 Plan) or by the participant for “good reason” (as defined in the 2016 Plan) within two years after a “change in control” of Forum (as defined in the 2016 Plan), then any award held by the participantthose disclosed at the time of termination that is not a performance award will become fully vested and exercisable and any such award that is a performance award shall become vested and deemedgrant.Mr. Gaut 2022 ($) 2021 ($) Summary Compensation Table Total 7,155,857 3,216,316 Less, value of Stock Awards reported in Summary Compensation Table (660,871) (1,768,729) Plus, year-end fair value of outstanding and unvested equity awards granted in the year 910,001 1,339,879 Plus, year over year change in fair value of outstanding and unvested equity awards granted in prior years 1,545,369 372,619 Plus, year over year change in fair value of equity awards granted in prior years that vested in the year 372,767 306,420 Less, prior year-end fair value of equity awards granted in prior years that failed to meet vesting conditions in the year (31,000) — Compensation Actually Paid to Mr. Gaut 9,292,123 3,466,505 (2) Represents the amount of “compensation actually paid” to be earned at the target level.Clawback. Awards under the 2016 Plan are subject to recoupment or clawback pursuant to any policy of Forum or requirements of law or securities exchange listing standards.Amendment and Termination. The board of directors may terminate the 2016 Plan at any time with respect to shares of common stock that have not been granted under the 2016 Plan. The board of directors may alter or amend the 2016 Plan from time to time provided that no change in the 2016 Plan materially impairs a participant’s rights with respect to awards previously granted without the participant’s consent. No amendment or alteration shall be effective prior to stockholder approval to the extent the board of directors determines such approval is required by applicable laws, regulations or exchange requirements.Determinable New Plan BenefitsAwards to our officers and other employees under the 2016 Plan will be madeMr. Lux, as computed in accordance with future decisionsSEC rules and does not reflect the actual amount of compensation earned by or paid during the Committeeapplicable year. In accordance with SEC rules, the following the general guidelines of the 2016 Plan. As a result, it is not possibleadjustments were made to total compensation determine the benefits and amounts that will be received by any individual participant or group of participants in the future. Althoughcompensation actually paid. The valuation assumptions used to calculate fair values did not necessarily indicative of future grants that may be made under the 2016 Plan, please see the “Grants of plan-based awards for 2015” section above with respect to awards under the 2010 Plan to our named executive officers in 2015.In February 2016, the Committee approved performance share awards to certain of our senior executives (including each of our named executive officers), subject to shareholder approval of the 2016 Plan at the 2016 Annual Meeting. If the shareholders do not approve the 2016 Plan, these performance share awards will immediately be forfeited and cancelled after the 2016 Annual Meeting. If shareholder approval is obtained, these awards would remain outstanding and would be earned to the extent the applicable performance and service conditions are satisfied. Please see the “2016 Awards” table above with respect to such performance share awards granted to our named executive officers in February 2016. In addition, the aggregate performance share awards granted to non-executive officers in 2016 that are subject to shareholder approval are shown in the table below: Grant Date Value
($) 230,920 6,505,036 26,980 760,014 (1)The number of performance share awardsmaterially differ from those disclosed in this column assumes that the performance share award grant is paid out at the target level of performance in our common stock. Payout of shares varies from 0% of target award if relative TSR performance does not meet threshold up to 200% of target award.Federal Income Tax ConsequencesOptions.The Internal Revenue Code provides that a participant receiving a nonqualified option ordinarily does not realize taxable income upon the grant of the option. A participant does, however, realize compensation income taxed at ordinary income tax rates upon the exercise of a nonqualified option to the extent that the fair market value of the common stock on the date of exercise exceeds the option price. When the participant sells the shares acquired pursuant to a nonqualified option, any gain or loss will be short-term or long-term capital gain or loss.The grant of an ISO does not result in taxable income to a participant. The exercise of an ISO also does not result in taxable income, provided that the circumstances satisfy the requirements in the Internal Revenue Code. However, the exercise of an ISO may give rise to alternative minimum tax liability for the participant. In addition, if the participant does not dispose of the common stock acquired upon exercise of an ISO during the statutory holding period, then any gain or loss upon subsequent sale of the common stock will be a long-term capital gain or loss. The statutory holding period lasts until the later of two years from the date the ISO is granted or one year from the date the common stock is transferred to the participant pursuant to the exercise of the ISO.If the statutory holding period requirements for an ISO are satisfied, Forum may not claim any federal income tax deduction upon either the exercise of the ISO or the subsequent sale of the common stock received upon exercise. If these requirements are not satisfied (a “disqualifying disposition”), the amount of ordinary income taxable to the participant is the lesser of: (i) the fair market value of the common stock on the date of exercise minus the option price; or, (ii) the amount realized on disposition minus the option price. Any gain in excess of that amount is capital gain, while any loss recognized will be a capital loss.For nonqualified options, Forum is generally entitled to a federal income tax deduction in an amount equal to the ordinary income realized by the participant.Restricted Stock and Bonus Stock Awards.A participant acquiring a restricted stock award or a bonus stock award will generally recognize ordinary income equal to the fair market value of the shares on the vesting date of the restricted stock or the grant date of bonus stock, less any amount paid, if any, by the participant. Under Section 83(b) of the Internal Revenue Code, a participant may elect to include in ordinary income at the time restricted stock is first issued, the excess of the fair market value of the stock at the time of issuancegrant.Mr. Lux 2022 ($) Summary Compensation Table Total 3,593,144 Less, value of Stock Awards reported in Summary Compensation Table (1,703,239) Plus, year-end fair value of outstanding and unvested equity awards granted in the year 2,635,750 Plus, year over year change in fair value of outstanding and unvested equity awards granted in prior years 599,995 Plus, year over year change in fair value of equity awards granted in prior years that vested in the year 126,176 41Less, prior year-end fair value of equity awards granted in prior years that failed to meet vesting conditions in the year (13,000) Compensation Actually Paid to Mr. Lux 5,238,826 (3) Represents the amount paid, ifaverage of the amounts reported for the NEOs as a group, excluding any byNEO who served as Chief Executive Officer during any portion of the participant. In this event, any subsequent changeapplicable year, in the value“Total” column of the shares will be recognized for tax purposes as capital gain or loss upon dispositionSummary Compensation Table in each applicable year. The names of each of the shares. A participant makes a Section 83(b) election by filingNEOs included for purposes of calculating these amounts are as follows: (i) for 2022, Mr. Williams and Mr. Ivascu; and (ii) for 2021, Mr. Lux and Mr. Williams.(4) Represents the election with the IRS no later than 30 days after the restricted stock is transferredaverage amount of “compensation actually paid” to the participant. WithNEOs as a Section 83(b) election,group, as listed in footnote 3, as computed in accordance with SEC rules and does not reflect the participant willactual amount of compensation earned by or paid during the applicable year. In accordance with SEC rules, the following adjustments were made to total compensation determine the compensation actually paid. The valuation assumptions used to calculate fair values did not be entitled to any loss deduction if the shares with respect to which a Section 83(b) election was made are later forfeited. Absent a Section 83(b) election, any cash dividends or other distributions paid with respect to the restricted stock prior to the lapse of the restrictions or risk of forfeiture will be included in the participant’s ordinary income as compensationmaterially differ from those disclosed at the time of receiptgrant.Average Non-PEO NEOs 2022 ($) 2021 ($) Average Summary Compensation Table Total 2,362,076 1,467,954 Less, average value of Stock Awards reported in Summary Compensation Table (780,668) (794,836) Plus, year-end average fair value of outstanding and unvested equity awards granted in the year 1,208,077 687,148 Plus, average year over year change in fair value of outstanding and unvested equity awards granted in prior years 527,875 65,126 Plus, average year over year change in fair value of equity awards granted in prior years that vested in the year 115,102 72,528 Less, average prior year-end fair value of equity awards granted in prior years that failed to meet vesting conditions in the year (16,500) — Compensation Actually Paid to Average Non-PEO NEOs 3,415,962 1,497,920 (5) Cumulative TSR is calculated by dividing (a) the sum of (i) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and subsequent appreciation or depreciation will be recognized as capital gain or loss. Forum will generally be entitled to a deduction for federal income tax purposes(ii) the difference between the Company’s share price at the same timeend of each fiscal year shown and the beginning of the measurement period, and the beginning of the measurement period by (b) the Company’s share price at the beginning of the measurement period. The beginning of the measurement period for each year in the same amount that a participant recognizes ordinary income from restricted stock or bonus stock awards under the 2016 Plan.Stock Appreciation Rights and Restricted Stock Units.Generally, a participant will not recognize any taxable income upon the award of SAR or restricted stock unit. At the time the participant receives the payment for the SAR or the restricted stock unit, the fair market value of shares of common stock ortable is December 31, 2020.(6) The dollar amounts reported represent the amount of any cash received in payment for such awards generally is taxable compensation to the participant as ordinary income. Forum will generally be entitled to a deduction for federalnet income tax purposes at the same time and(loss) reflected in the same amount that a participant recognizes ordinary income from SARs or restricted stock units underCompany’s audited financial statements for the 2016 Plan.Performance Awards and Cash Awards.A participant will generallyapplicable year.(7) For 2021, Mr. Lux is included as part of the “Non-PEO NEOs,” as he did not recognizeserve as Chief Executive Officer during any taxable income uponportion of 2021.Analysis of the grant of performance awards or cash awards. Upon settlement of such awards, participants normally will recognize ordinary incomeInformation Presented in the yearPay Versus Performance TableAs described in more detail in “Executive Compensation” above, the Company’s executive compensation program reflects a variable pay-for-performance philosophy. While the Company utilizes several performance measures to align executive compensation with Company performance, all of receipt equalthose measures are not presented in the Pay Versus Performance table. Moreover, the Company generally seeks to incentivize long-term performance and, therefore, does not specifically align the amountCompany’s performance measures with compensation that is actually paid (as computed in accordance with SEC rules) for a particular year. In accordance with SEC rules, the Company is providing the following descriptions of cashthe relationships between information presented in the Pay versus Performance table. The following charts set forth the relationship between compensation actually paid and the fair market value of anycommon stock received. Forum will generally be entitled to a deduction for federal income tax purposes at the same timeCompany’s cumulative TSR and in the same amount that a participant recognizes ordinary income from performance awards or cash awards under the 2016 Plan.Certain Tax Code Limitations on DeductibilitySection 162(m) of the Internal Revenue Code generally disallows a federal income tax deduction to any publicly held corporation forbetween compensation actually paid in excess of $1,000,000 in any taxable year to a company’s principal executive officer or any of a company’s three other most highly compensated executive officers employed as of the end of the year (other than the principal executive officer or the principal financial officer), to the extent the compensation is not performance-based. Forum has structured the 2016 Plan so that resulting compensation can be designed to qualify as performance-based compensation. To allow Forum to qualify the compensation, it is seeking stockholder approval of the 2016 Plan and the material terms of the related performance goals.The exercisability of an option or SAR, the elimination of restrictions on restricted stock, or the payment of bonus stock awards, performance awards or restricted stock units, may be accelerated as a result of a change in control. If any of the foregoing occurs, and the total parachute payments to the participant are not sufficiently reduced under terms of the 2016 Plan, an excess parachute payment under the Internal Revenue Code could result, triggering a 20% excise tax (in addition to income tax otherwise owed) payable by the participant. Forum will not be entitled to a deduction for that portion of any “parachute payment” that is subject to the excise tax.Section 409A of the Internal Revenue Code of 1986Section 409A to the Internal Revenue Code generally provides that any deferred compensation arrangement which does not meet specific requirements regarding timing of payouts, advance election of deferrals and restrictions on acceleration of payouts results in immediate taxation of any amounts deferred to the extent not subject to a substantial risk of forfeiture. In addition, tax on the amounts included in income as a result of not complying with Section 409A are increased by an interest component as specified by statute, and the amounts included in income are also subject to a 20% excise tax. In general, to avoid a Section 409A violation, amounts deferred may only be paid out on separation from service, disability, death, a specified time, a change in control (as defined by the Treasury Department) or an unforeseen emergency. Furthermore, the election to defer generally must be made in the calendar year prior to performance of services, and any provision for accelerated payout other than for reasons specified by the Treasury may cause the amounts deferred to be subject to early taxation and to the imposition of the excise tax. Section 409A is broadly applicable to any form of deferred compensation other than tax-qualified retirement plans and bona fide vacation, sick leave, compensatory time, disability pay or death benefits, and may be applicable to certain awards under the 2016 Plan. Forum intends that any awards granted under the 2016 Plan be exempt from or satisfy the requirements of Section 409A to avoid the imposition of excise tax thereunder.THE ABOVE SUMMARY OF THE EXPECTED EFFECT OF THE FEDERAL INCOME TAX UPON PARTICIPANTS IN THE 2016 PLAN IS NOT COMPLETE, AND FORUM RECOMMENDS THAT THE PARTICIPANTS CONSULT THEIR OWN TAX ADVISORS FOR ADVICE. MOREOVER, THE ABOVE SUMMARY IS BASED UPON CURRENT FEDERAL INCOME TAX LAWS, WHICH ARE SUBJECT TO CHANGE. THE TAX TREATMENT UNDER FOREIGN, STATE OR LOCAL LAW IS NOT COVERED IN THE ABOVE SUMMARY.42
43PROPOSAL 4:3: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMPricewaterhouseCoopersDeloitte & Touche LLP (“Deloitte & Touche”) has been appointed by the Audit Committee as the independent registered public accountantaccounting firm for us and our subsidiaries for the year ending December 31, 2016.2023. This appointment is being presented to the stockholders for ratification. Deloitte & Touche has been the independent registered public accounting firm for the Company since 2019. Representatives of PricewaterhouseCoopers LLPDeloitte & Touche are expected to be present at the annual meeting and will be provided an opportunity to make statementsa statement if they desire to do so and to respond to appropriate questions from stockholders.Vote Required and Board RecommendationIf a quorum is present at the annual meeting, the ratification of the appointment of PricewaterhouseCoopers LLPDeloitte & Touche requires the affirmative vote of at least a majority of the votes cast on the matter. Your board of directors recommends a vote“FOR” “FOR” such ratification.If the stockholders fail to ratify the appointment of PricewaterhouseCoopers LLPDeloitte & Touche as our independent registered public accounting firm, it is not anticipated that PricewaterhouseCoopers LLPDeloitte & Touche will be replaced in 2016.2023. Such lack of approval will, however, be considered by the Audit Committee in selecting our independent registered public accounting firm for 2017.Fees Paid to Independent Registered Public Accounting FirmThe following table presents fees for professional audit services rendered by PricewaterhouseCoopers LLPDeloitte & Touche in 2022 and 2021. (In thousands) 2022 2021 Audit Fees (1)$2,675 $2,589 Audit-Related Fees — — Tax Fees— — All Other Fees (2)2 2 Total $2,677 $2,591 (1) Audit Fees consisted of fees for audit services, which related to the consolidated audit, quarterly reviews, registration statements, comfort letters, statutory and subsidiary audits and services normally provided by the independent registered public accountant in connection with statutory and regulatory filings.(2) All Other Fees consisted of our annual financial statements for the years ended December 31, 2015 and 2014, respectively, and fees billed for other services rendered by PricewaterhouseCoopers LLP during those periods. 2015 2014 (In thousands) $ 2,804 $ 3,512 — 51 29 128 2 2 $ 2,835 $ 3,693 (1)Audit Fees consisted of fees for audit services, which related to the consolidated audit, quarterly reviews, registration statements, comfort letters, statutory and subsidiary audits and services normally provided by the independent registered public accountant in connection with statutory and regulatory filings.(2)Audit-Related Fees consisted of fees for audit-related services, which primarily related to the acquisition of certain of our subsidiaries and our equity investment in a joint venture.(3)Tax Fees consisted of fees for tax services.(4)All Other Fees consisted of accounting research tool subscription fees.The Audit Committee preapproves all audit, review or attest engagements and permissible non-audit services to be performed by our independent registered public accounting firm, subject to, and in compliance with, the de minimis exception for non-audit services described in applicable provisions of the Exchange Act and applicable SEC rules. All services provided by our independent public accounting firmDeloitte & Touche in 2015 and 20142022 were preapproved by the Audit Committee.AUDIT COMMITTEE REPORTThe Audit Committee currently consists of Evelyn M. Angelle (Chairperson), Franklin MyersJohn A. Carrig and Paul E. Rowsey III. Mr. John Schmitz.Schmitz served on the Audit Committee from August 2011 until his retirement from the board of directors in March 2023. The Audit Committee’s purpose is to assist the board of directors in overseeing (1) the integrity of our financial44statements, (2) our compliance with legal and regulatory requirements, (3) the qualifications, independence and performance of our independent auditors and (4) the effectiveness and performance of our internal audit function. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for us. The board of directors has determined that the members of the Audit Committee are independent under applicable provisions of the Exchange Act and NYSE listing standards.Our management is responsible for preparing our financial statements, and the independent auditors are responsible for auditing those financial statements and the effectiveness of the Company’s internal controls over financial reporting, and issuing a report thereon. Accordingly, the Audit Committee’s responsibility is one of oversight. In this context, the Audit Committee discussed with PricewaterhouseCoopersDeloitte & Touche LLP, our independent registered public accounting firm for fiscal year 2022, the matters required to be discussed by Auditing Standard No. 16 issued byapplicable standards of the Public Company Accounting Oversight Board.Board and the SEC. These communications and discussions are intended to assist the Audit Committee in overseeing the financial reporting and disclosure process. The Audit Committee also discussed with PricewaterhouseCoopersDeloitte & Touche LLP its independence from us and received from PricewaterhouseCoopersDeloitte & Touche LLP the written disclosures and the letter from PricewaterhouseCoopersDeloitte & Touche LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding PricewaterhouseCoopersDeloitte & Touche LLP’s communications with the Audit Committee concerning independence. This discussion and disclosure informed the Audit Committee of the independence of PricewaterhouseCoopersDeloitte & Touche LLP and assisted the Audit Committee in evaluating such independence. The Audit Committee also considered whether the provision of services by PricewaterhouseCoopersDeloitte & Touche LLP not related to the audit of our financial statements and to the review of our interim financial statements is compatible with maintaining the independence of PricewaterhouseCoopersDeloitte & Touche LLP. In determining whether to reappoint Deloitte & Touche LLP as the Company’s independent auditor, the Audit Committee took into consideration a number of other factors, including the length of time the firm has been engaged, the firm’s capability and expertise in handling the breadth and complexity of the Company’s global operations, including the expertise and capability of the Lead Audit Partner, historical and recent performance, including the extent and quality of Deloitte & Touche LLP’s communications with the Audit Committee, data related to audit quality and performance, including recent Public Company Accounting Oversight Board inspection reports on the firm, and the appropriateness of Deloitte & Touche LLP’s fees, both on an absolute basis and as compared with the Company’s peers.Finally, the Audit Committee reviewed and discussed our audited financial statements with our management, our internal auditors and PricewaterhouseCoopersDeloitte & Touche LLP. The Audit Committee discussed with, and received regular status reports from, the Company’s Chief Financial Officer, Vice President - Internal Audit and Deloitte & Touche LLP on the overall scope and plans for their audits of the Company, including their scope and plans for evaluating the effectiveness of internal control over financial reporting. In addition, the Audit Committee meets with the Chief Financial Officer, Vice President - Internal Audit and Deloitte & Touche LLP, with and without management present, to discuss the results of their respective audits, in addition to private meetings with the General Counsel and Chief Compliance Officer. Our management informed the Audit Committee that our audited financial statements had been prepared in accordance with accounting principles generally accepted in the United States.thesethe audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2015.Respectfully submitted,45ADDITIONAL INFORMATIONStockholder Proposals for the 20172024 Annual MeetingTo be included in the proxy materials for the 20172024 Annual Meeting of stockholders,Stockholders, stockholder proposals that are submitted for presentation at that annual meeting and are otherwise eligible for inclusion in the proxy statement must be received by us no later than December 2, 2016.November 28, 2023. Proxies granted in connection with that annual meeting may confer discretionary authority to vote on any stockholder proposal if notice of the proposal is not received by us in accordance with the advance notice requirements of our bylaws discussed below. It is suggested that proponents submit their proposals by certified mail, return receipt requested. No stockholder proposals have been received for inclusion in this proxy statement.Our bylaws provide the manner in which stockholders may give notice of business and director nominations to be brought before an annual meeting. In order for an item to be properly brought before the meeting by a stockholder, the stockholder must be a holder of record at the time of the giving of notice and must be entitled to vote at the annual meeting. The item to be brought before the meeting must be a proper subject for stockholder action, and the stockholder must have given timely advance written notice of the item. For notice to be timely, it must be delivered to or mailed and receivedour Secretary at our principal office at least 90 days but not moreexecutive offices no later than 120 daysclose of business on the 90th day prior to the first anniversary of the prior year’s annual meeting date but not earlier than the 120th day prior to such anniversary date. Accordingly, for the 20172024 Annual Meeting of stockholders, notice will have to be delivered or received by usto our Secretary at our principal offices no earlier than January 17, 201713, 2024 or later than February 16, 2017.12, 2024. If, however, the scheduled annual meeting date differs from such anniversary date byis more than 30 days before or more than 70 days after the first anniversary of the prior year’s annual meeting date, then notice of an item to be brought before the annual meeting maywill be timely if it is so delivered or received not earlier than the close of business on the 120th day and not later than the close of business on the later of the 90th day prior to the date of thesuch annual meeting or if less than 100 days’ prior notice or public disclosure of the scheduled meeting date is given or made, the 10th day following the earlier of the day on which public announcement of the noticedate of such meeting was mailed to stockholders or the day on which such public disclosure wasfirst made. The notice must set forth the information required by the provisions of our bylaws dealing with stockholder proposals and nominations of directors. In addition to satisfying the deadlines in the advance notice provisions of our By-Laws, to comply with the universal proxy rules, if a stockholder intends to solicit proxies in support of nominees submitted under these advance notice provisions, then the stockholder must provide proper written notice that sets forth all information required under Rule 14a-19 of the Exchange Act to the Company no later than March 13, 2024 (or, if the 2024 Annual Meeting of Stockholders is called for a date that is more than 30 days before or more than 30 days after the anniversary of the prior year’s annual meeting, then notice must be provided by the later of 60 days prior to the 2024 Annual Meeting of Stockholders or the 10th day following the date on which announcement of the 2024 Annual Meeting of Stockholders was first made by the Company). The notice requirement under Rule 14a-19 is in addition to the applicable advance notice requirements under our bylaws as described above.All notices should be directed to James L. McCulloch,John C. Ivascu, Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary, Forum Energy Technologies, Inc., 920 Memorial City Way,10344 Sam Houston Park Drive, Suite 1000,300, Houston, Texas 77024.Discretionary Voting of Proxies on Other MattersManagement does not intend to bring before the annual meeting any matters other than those disclosed in the notice of annual meeting of stockholders attached to this proxy statement, and it does not know of any business that persons other than management intend to present at the meeting. If any other matters are properly presented at the annual meeting for action, the persons named in the enclosed form of proxy and acting thereunder generally will have discretion to vote on those matters in accordance with their best judgment.Annual Report on Form 10-KCopies of our annual report on Form 10-K for the year ended December 31, 2015,2022, as filed with the SEC, are available without charge to stockholders upon request to Mark S. Traylor,D. Lyle Williams, Executive Vice President Investor Relations and Planning, at the principal executive offices ofChief Financial Officer, Forum Energy Technologies, Inc., 920 Memorial City Way,10344 Sam Houston Park Drive, Suite 1000,300, Houston, Texas 77024.46HouseholdingThe SEC permits a single copy of the Notice or proxy materials to be sent to any household at which two or more stockholders reside if they appear to be members of the same family. This procedure, referred to as householding, reduces the volume of duplicate information stockholders receive and reduces mailing and printing expenses. A number of brokerage firms have instituted householding.As a result, if you hold your shares through a broker and you reside at an address at which two or more stockholders reside, you will likely be receiving only one copy of the Notice or proxy materials unless any stockholder at that address has given the broker contrary instructions. If any such beneficial stockholder residing at such an address, however, wishes to receive a separate copy of the Notice or proxy materials in the future, or if any such beneficial stockholder that elected to continue to receive separate copies of the Notice wishes to receive a single copy of the Notice or proxy materials in the future, that stockholder should contact their broker or send a request to the corporate secretary at our principal executive offices,John C. Ivascu, Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary, Forum Energy Technologies, Inc., 920 Memorial City Way,10344 Sam Houston Park Drive, Suite 1000,300, Houston, Texas 77024,77064, telephone number (281) 949-2500.(713) 351-7900. We will promptly deliver, upon written or oral request to the corporate secretary, a separate copy of the Notice or proxy materials to a beneficial stockholder at a shared address to which a single copy of the Notice or proxy materials was delivered.47APPENDIX AFORUM ENERGY TECHNOLOGIES, INC. 2016 STOCK AND INCENTIVE PLANFORUM ENERGY TECHNOLOGIES, INC.2016 STOCK AND INCENTIVE PLAN(As Established Effective as
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION(in millions) For the year ended December 31, 2022 For the year ended December 31, 2021 Net income (loss) attributable to common stockholders $ 3.7 $ (82.7) Interest expense 31.5 32.0 Depreciation and amortization 37.1 42.2 Income tax expense 6.6 0.7 EBITDA as reported 78.9 (7.8) % of revenue 11.3 % (1.4) % Restructuring, transaction and other costs 8.9 9.5 Inventory and other working capital adjustments (2.7) 5.0 Gain on sale-leaseback transactions (7.0) — Stock-based compensation expense 4.0 7.6 Loss on extinguishment of debt — 5.3 Loss (gain) on foreign exchange, net (23.4) 0.4 EBITDA as adjusted 1$ 58.7 $ 20.0 % of revenue 8.4 % 3.7 % Free cash flow, before acquisitions, reconciliation Net cash provided by (used in) operating activities $ (17.1) $ (15.8) Capital expenditures for property and equipment (7.5) (1.8) Proceeds from sale-leaseback transactions 32.1 — Proceeds from sale of property and equipment 3.0 7.0 Free cash flow, before acquisitions 2$ 10.5 $ (10.6) (1) The Company believes that the presentation of May 17, 2016)II. PURPOSE OF THE PLANThe purpose of theFORUM ENERGY TECHNOLOGIES, INC. 2016 STOCK AND INCENTIVE PLAN (the“Plan”)EBITDA and adjusted EBITDA is to provide a means through which FORUM ENERGY TECHNOLOGIES, INC., a Delaware corporation (the“Company”), and its Affiliates may attract able persons to serve as Directors or Consultants or to enter the employ of the Company and its Affiliates and to provide a means whereby those individuals upon whom the responsibilities of the successful administration and management of the Company and its Affiliates rest, and whose present and potential contributionsuseful to the CompanyCompany's investors because they are helpful measures for evaluating the Company's operating performance and its Affiliates are of importance, can acquire and maintain stock ownership and receive cash awards, thereby strengthening their concernliquidity that reflect the resources available for the long-term welfare of the Company and its Affiliates. A further purpose of the Plan is to provide such individuals with additional incentive and rewardstrategic opportunities designed to enhance the profitable growth of the Company and its Affiliates over the long term. Accordingly, the Plan provides for granting Options, Stock Appreciation Rights, Restricted Stock Awards, Performance Awards, Restricted Stock Unit Awards, Bonus Stock Awards, Cash Awards or any combination of the foregoing, as is best suited to the circumstances of the particular Employee, Consultant, or Director as provided herein.III. DEFINITIONSThe following definitions shall be applicable throughout the Plan unless specifically modified by any paragraph:(a) “Affiliate” means any corporation, partnership, limited liability company or partnership, association, trust, or other organization which, directly or indirectly, controls, is controlled by, or is under common control with, the Company. For purposes of the preceding sentence, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any entity or organization, shall mean the possession, directly or indirectly, of the power (i) to vote more than 50% of the securities having ordinary voting power for the election of directors of the controlled entity or organization or (ii) to direct or cause the direction of the management and policies of the controlled entity or organization, whether through the ownership of voting securities or by contract or otherwise.(b) “Award” means, individually or collectively, any Option, Stock Appreciation Right, Restricted Stock Award, Performance Award, Restricted Stock Unit Award, Bonus Stock Award or Cash Award.(c) “Board” means the Board of Directors of the Company.(d) “Bonus Stock Award” means an Award granted under Paragraph XI of the Plan.(e) “Cash Award” means a Performance Award denominated in cash.(f) “Cause” shall mean a determination by the Company that the Participant (i) has engaged in gross negligence or willful misconductincluding, among others, investing in the performance ofbusiness, strengthening the Participant’s duties with respect tobalance sheet, repurchasing the Company or any of its Affiliates, (ii) has materially breached any provision of any written agreement or corporate policy or code of conduct established by the Company or any of its Affiliates, (iii) has willfully engaged in conduct that is materially injurious to the Company or any of its Affiliates, or (iv) has been convicted of, pleaded no contest toor received adjudicated probation or deferred adjudication in connection with a felony involving fraud, dishonesty or moral turpitude (or a crime of similar import in a foreign jurisdiction).(g) “Change in Control” shall have the meaning assigned to such term in Exhibit A to the Plan.(h) “Code” means the Internal Revenue Code of 1986, as amended from time to time, together with rules, regulationsCompany's securities and interpretations promulgated thereunder. Referencemaking strategic acquisitions. In addition, EBITDA and adjusted EBITDA are widely used benchmarks in the Plan to any Section of the Code shall be deemed to include any amendments or successor provisions to such Section and any regulations under such Section.(i) “Committee” means the Nominating, Governance and Compensation Committee of the Board, unless and until the Board designates a different committee to serve as the administrator of the Plan under Paragraph IV(a).(j) “Common Stock” means the common stock, par value $.01 per share, of theinvestment community.(2) The Company or any security into which such common stock may be changed by reason of any transaction or event of the type described in Paragraph XII.(k) “Company” means Forum Energy Technologies, Inc., a Delaware corporation.(l) “Consultant” means any person who is not an Employee or a Director and who is providing advisory or consulting services to the Company or any Affiliate.(m) “Corporate Change” shall have the meaning assigned to such term in Paragraph XII(c) of the Plan.(n) “Director” means an individual who is a non-employee member of the Board.(o) “Effective Date” has the meaning set forth in Paragraph III of the Plan.(p) “Employee” means any person in an employment relationship with the Company or any Affiliate.(q) “Exchange Act”means the Securities Exchange Act of 1934, as amended.(r) “Fair Market Value” means, as of any specified date, the closing price of the Common Stock, if the Common Stock is listed on a national stock exchange registered under Section 6(a) of the Exchange Act, reported on the stock exchange composite tape on that date (or such other reporting service approved by the Committee); or, if no closing price is reported on that date, on the last preceding date on which such closing price of the Common Stock is so reported. If the Common Stock is traded over the counter at the time a determination of its fair market value is required to be made hereunder, its fair market value shall be deemed to be equal to the average between the reported high and low or closing bid and asked prices of Common Stock on the most recent date on which Common Stock was publicly traded. In the event Common Stock is not publicly traded at the time a determination of its value is required to be made hereunder, the determination of its fair market value shall be made by the Committee in such manner as it deemed appropriate and as is consistent with the requirements of Section 409A of the Code.(s) “Forfeiture Restrictions”shall have the meaning assigned to such term in Paragraph VIII with respect to Restricted Stock or Paragraph X with respect to Restricted Stock Units, as applicable.(t) “Good Reason” shall have the meaning assigned to such term in the applicable Award agreement, or, if the Award agreement does not define Good Reason, Good Reason shall mean the occurrence of any of the following events without the Participant’s consent: (i) a material reduction in the Participant’s base rate of compensation from that in effect prior to the Change in Control, (ii) a material diminution in theParticipant’s authority, duties or responsibilities from those in effect prior to the Change in Control or (iii) the involuntary relocation of the geographic location of the Participant’s principal place of employment by more than 75 miles from the location of the Participant’s principal place of employment prior to the Change in Control. Notwithstanding the foregoing, any assertion by a Participant of a termination of employment for Good Reason shall not be effective unless: (x) the Participant provides written notice to the Company of such condition within 45 days of the initial existence of the condition; (y) the condition specified in such notice must remain uncorrected for 30 days after receipt of such notice by the Company; and (z) the date of the Participant’s termination of employment must occur within 90 days after the initial existence of the condition specified in such notice.(u) “Incentive Stock Option” means an incentive stock option within the meaning of Section 422 of the Code.(v) “Minimum Restrictions” shall have the meaning assigned to such term in Paragraph V(a) of the Plan.(w) “Nonqualified Stock Option”means an Option that is not intended to comply with the requirements set forth in Section 422 of the Code.(x) “Option” means an Award granted under Paragraph VII of the Plan and includes both Incentive Stock Options and Nonqualified Stock Options.(y) “Option Agreement” means a written agreement between the Company and a Participant with respect to an Option.(z) “Participant” means an Employee, Consultant, or Director who has been granted an Award.(aa) “Performance Award” means an Award granted under Paragraph IX of the Plan.(bb) “Performance Award Agreement” means a written agreement between the Company and a Participant with respect to a Performance Award.(cc) “Performance Measure” means one or more performance measures established by the Committee that are based on (i) the price of a share of Common Stock, (ii) earnings per share, (iii) market share, (iv) sales, (v) operating income or operating income margin, (vi) net income or net income margin (before or after taxes), (vii) cash flow or return on investment, (viii) the earnings or earnings margin before or after interest, taxes, depreciation, and/or amortization, (ix) the economic value added, (x) the return on capital, assets, or stockholders’ equity, (xi) the total stockholders’ return, (xii) working capital efficiency, (xiii) safety performance, (xiv)after-tax operating income, (xv) capital efficiency, (xvi) cash from operations, (xvii) cost ratios, (xviii) cost reductions, (xix) customer growth, (xx) debt reduction, (xxi) earnings per share growth, (xxii) increase in cash flow, (xxiii) increase in cash flow return, (xxiv) increased revenue, (xxv) internal rate of return, (xxvi) net cash flow, (xxvii) netbelieves free cash flow, before financing activities, (xxviii) net income per share, (xxix) proceeds from dispositions, (xxx) project completion time and budget goals, (xxxi) return on equity, (xxxii) return on net assets, (xxxiii) return on capital compared to cost of capital, (xxxiv) return on capital employed, (xxxv) return on invested capital, (xxxvi) revenue ratios, (xxxvii) shareholder value, (xxxviii) total market value, or (xxxix) any combination of the foregoing. The performance measures described in the preceding sentence may be absolute, relative to one or more other companies, relative to one or more indices, or measured by reference to the Company alone, an Affiliate, a business unit of the Company or an Affiliate, or the Company together with one or more of its Affiliates. Unless otherwise stated, such Performance Measures need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting economic losses (measured, in each case, by reference to specific business criteria).The Committee may provide in any such Performance Award that any evaluation of performance may include or exclude any of the following events that occurs during a performance period: (a) asset write-downs,(b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) extraordinary items as described in FASB ASC Topic No. 360 and/or nonrecurring, unusual or special items as described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to stockholders, Form 10-K or Form 10-Q for the applicable period, (f) acquisitions or divestitures, (g) foreign exchange gains and losses, (h) regulatory requirements, (i) settlement of hedging activities, and (j) other specified significant extraordinary items or events.(dd) “Plan” means the Forum Energy Technologies, Inc. 2016 Stock and Incentive Plan, effective as of May 17, 2016.(ee) “Prior Plan” means the Forum Energy Technologies, Inc. 2010 Stock Incentive Plan (formerly known as the Forum Oilfield Technologies, Inc. 2005 Stock Incentive Plan) as amended and in effect immediately prior to the Effective Date.(ff) “Qualified Performance Award” means a Performance Award made to a Participant who is an Employee that is intended to qualify as qualified performance-based compensation under Section 162(m) of the Code, as described in Paragraph IX(c) of the Plan.(gg) “Required Delay Period” shall have the meaning assigned to such term in Paragraph XV(c) of the Plan(hh) “Restricted Stock Agreement” means a written agreement between the Company and a Participant with respect to a Restricted Stock Award.(ii) “Restricted Stock Award” means an Award granted under Paragraph VIII of the Plan.(jj) “Restricted Stock Unit”means a unit evidencing the right to receive in specified circumstances one share of Common Stock or in the sole discretion of the Committee, an equivalent value in cash that is restricted or subject to forfeiture provisions.(kk) “Restricted Stock Unit Award”meansan Award granted under Paragraph X of the Plan.(ll) “Restricted Stock Unit Award Agreement” means a written agreement between the Company and a Participant with respect to a Restricted Stock Unit Award.(mm) “Rule 16b-3” means Securities Exchange Commission Rule16b-3 promulgated under the Exchange Act, as such may be amended from time to time, and any successor rule, regulation, or statute fulfilling the same or a similar function.(nn) “Stock Appreciation Right” means a right to acquire, upon exercise of the right, Common Stock and/or, in the sole discretion of the Committee, cash having an aggregate value equal to the then excess of the Fair Market Value of the shares with respect to which the right is exercised over the exercise price therefor. The Committee shall retain final authority to determine whether a Participant shall be permitted, and to approve an election by a Participant, to receive cash in full or partial settlement of a Stock Appreciation Right.(oo) “Stock Appreciation Right Agreement” means a written agreement between the Company and Participant with respect to a Stock Appreciation Right.IV. EFFECTIVE DATE AND DURATION OF THE PLANThe Plan will be submitted to the stockholders of the Company for approval at the 2016 annual meeting of the stockholders and, if approved, shall be effective as of the date of such approval (the “Effective Date”). If the stockholders of the Company should fail to so approve the Plan at such meeting, the Plan shall terminate and cease to be of any further force or effect, and all grants of Awards hereunder, if any, shall be null and void, and the Prior Plan as in effect immediately prior to the stockholder vote shall remain in effect. No Award shall be made under the Plan ten years or more after the Effective Date. As of the date of stockholder approval of the Plan, no further awards shall be made under the Prior Plan, provided, however, that any and all outstanding awards granted under the Prior Plan shall continue to be outstanding and shall be subject to the appropriate terms of the Prior Plan under which such award was granted and as are in effect as of the date the Plan is effective.Subject to the provisions of Paragraph XIV, the Plan shall remain in effect until all Options and Stock Appreciation Rights granted under the Plan have been exercised or expired, all Restricted Stock Awards and Restricted Stock Unit Awards granted under the Plan have vested or been forfeited, and all Performance Awards, Bonus Stock Awards and Cash Awardshave been satisfied or expired.V. ADMINISTRATION(a) Composition of Committee. The Plan shall be administered by the Committee;provided, however, that (i) any and all members of the Committee shall satisfy any independence requirements prescribed by any stock exchange on which the Company lists its Common Stock; (ii) Awards may be granted to individuals who are subject to Section 16(b) of the Exchange Act only if the Committee is comprised solely of two or more “Non-Employee Directors” as defined in Securities and Exchange Commission Rule 16b-3 (as amended from time to time, and any successor rule, regulation or statute fulfilling the same or similar function); and (iii) any Award intended to qualify for the “performance-based compensation” exception under Code Section 162(m) shall be granted only if the Committee is comprised solely of two or more “outside directors” within the meaning of Code Section l62(m) and regulations pursuant thereto;provided, however, that if any such committee member is found not to have met the qualification requirements set forth in clauses (ii) and/or (iii) above, any actions taken or Awards granted by such committee shall not be invalidated by such failure to so qualify. In the absence of the Board’s appointment of a committee to administer the Plan, the Board shall serve as the Committee.(b) Powers. Subject to the express provisions of the Plan, the Committee shall have authority, in its discretion, to (i) determine which Employees, Consultants, or Directors shall receive an Award, (ii) determine the time or times when such Award shall be made, the type of Award that shall be made, the number of shares to be subject to each Award or the value of each Award, and (iii) to accelerate the vesting or exercisability of an Award, eliminate or make less restrictive any restrictions contained in an Award or waive any restriction or other provision of the Plan or an Award. In making such determinations, the Committee shall take into account the nature of the services rendered by the respective Employees, Consultants, or Directors, their present and potential contribution to the Company’s success, and such other factors as the Committee in its sole discretion shall deem relevant.(c) Additional Powers. The Committee shall have such additional powers as are delegated to it by the other provisions of the Plan. Subject to the express provisions of the Plan, this shall include the power to construe the Plan and the respective agreements executed hereunder, to prescribe rules and regulations relating to the Plan, to determine the terms, restrictions, and provisions of the agreement relating to each Award, including such terms, restrictions, and provisions as shall be requisite in the judgment of the Committee to cause designated Options to qualify as Incentive Stock Options, and to make all other determinations necessary or advisable for administering the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any agreement relating to an Award in the manner and to the extent the Committee shall deem expedient to carry the Plan or any such agreement into effect. All determinations and decisions made by the Committee on the matters referred to in this Paragraph IV and in construing the provisions of the Plan shall be conclusive.(d) Delegation of Authority by the Committee. Notwithstanding the preceding provisions of this Paragraph IV or any other provision of the Plan to the contrary, subject to the constraints of applicable law, the Committee may from time to time, in its sole discretion, delegate to the Chief Executive Officer of the Company the administration (or interpretation of any provision) of the Plan, and the right to grant Awards under the Plan, insofar as such administration (and interpretation) and power to grant Awards relates to any person who is not subject to Section 16 of the Exchange Act (including any successor Section to the same or similar effect). Any such delegation may be effective only so long as the Chief Executive Officer of the Company is a Director,useful measure for investors because it encompasses both profitability and the Committee may revoke such delegation at any time. The Committee may put any conditions and restrictions on the powers that may be exercised by the Chief Executive Officer of the Company upon such delegation as the Committee determinescapital management in its sole discretion. In the event of any conflict in a determination or interpretation under the Plan as between the Committee and the Chief Executive Officer of the Company, the determination or interpretation, as applicable, of the Committee shall be conclusive.VI. SHARES SUBJECT TO THE PLAN; AWARD LIMITS; GRANT OF AWARDS(a) Shares Subject to the Plan and Award Limits. Subject to adjustment in the same manner as provided in Paragraph XII with respect to shares of Common Stock subject to Options then outstanding, the aggregate maximum number of shares of Common Stock that may be issued under the Plan, and the aggregate maximum number of shares of Common Stock that may be issued under the Plan through Incentive Stock Options, shall not exceed the number of shares remaining for grant under the Prior Plan as of the Effective Date (exclusive of the shares subject to outstanding awards granted under the Prior Plan). Shares shall be deemed to have been issued under the Plan only to the extent actually issued and delivered pursuant to an Award. To the extent that an Award lapses or the rights of its holder terminate, any shares of Common Stock subject to such Award shall again be available for the grant of an Award under the Plan. In addition, shares issued under the Plan and forfeited back to the Plan, shares surrendered in payment of the exercise price or purchase price of an Award, and shares withheld for payment of applicable employment taxes and/or withholding obligations associated with an Award shall again be available for the grant of an Award under the Plan. Notwithstanding any provision in the Plan to the contrary, the following limitations shall apply to all Awards made hereunder:(i) the maximum number of shares of Common Stock that may be subject to Awards denominated in shares of Common Stock granted to any one individual during any calendar year may not exceed 2 million shares of Common Stock;(ii) no Participant may be granted during any calendar year Awards consisting of Options or Stock Appreciation Rights that are exercisable for more than 2 million shares of Common Stock;(iii) no Participant may be granted during any calendar year Cash Awards having a value determined on the date of grant in excess of $20,000,000;(iv) any payment due with respect to a Performance Award shall be paid no later than 10 years after the date of grant of such Performance Award; and(v) Awards to Directors shall not be made in any year in which a sufficient number of shares of Common Stock are not available to make such Awards under the Plan, and no Director may be granted during any calendar year Cash Awards or Awards denominated in shares of Common Stock having an aggregate value as determined on the date of grant in excess of $950,000.Subject to Paragraph XII hereof, any Award other than an Award that is payable solely in cash shall have a minimum restricted period or vesting period of one year from the date of grant (the“Minimum Restrictions”). The foregoing notwithstanding, 5% of the total number of shares of Common Stock that may be issued under the Plan shall not be subject to the Minimum Restrictions.Notwithstanding any provision of the Plan to the contrary, each share of Common Stock acquired under this Plan must be held and transferred in compliance with the Forum Energy Technologies, Inc. Stock Ownership Requirements Policy.A Participant may be granted Awards in combination such that portions of the Award are subject to differing limitations set out in the clauses in this Paragraph V(a), in which event each portion of the combination Award is subject only to a single appropriate limitation in the clauses above. For example, if an Employee Participant is granted a Performance Award that is in part a stock-based Award and in part a Cash Award, then the stock-based awards shall only be subject to the limitation in clauses (i) and (ii) and the Cash Award shall be subject only to the limitation in clause (iii).(b) Stock Offered. Subject to the limitations set forth in Paragraph V(a), the stock to be offered pursuant to the grant of an Award may be authorized but unissued Common Stock or Common Stock previously issued and outstanding and reacquired by the Company. Any of such shares which remain unissued and which are not subject to outstanding Awards at the termination of the Plan shall cease to be subject to the Plan but, until termination of the Plan, the Company shall at all times make available a sufficient number of shares to meet the requirements of the Plan. The shares of the Company’s stock to be issued pursuant to any Award may be represented by physical stock certificates or may be uncertificated. Notwithstanding references in the Plan to certificates, the Company may deliver uncertificated shares of Common Stock in connection with any Award.VII. ELIGIBILITYAwards may be granted only to persons who, at the time of grant, are Employees, Consultants, or Directors. An Award may be granted on more than one occasion to the same person.VIII. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS(a) Exercise Period. The term of each Option and Stock Appreciation Right shall be as specified by the Committee at the date of grant, but in no event shall the term exceed 10 years.(b) Limitations on Exercise. Subject to the Minimum Restrictions, Options and Stock Appreciation Rights shall be exercisable in whole or in such installments and at such times as determined by the Committee.(c) Special Limitations on Incentive Stock Options. An Incentive Stock Option may be granted only to an individual who is employed by the Company or any parent or subsidiary corporation (as defined in Section 424 of the Code) of the Company at the time the Option is granted. To the extent that the aggregate fair market value (determined at the time the respective Incentive Stock Option is granted) of stock with respect to which Incentive Stock Options are exercisable for the first time by an individual during any calendar year under all incentive stock option plans of the Company and its parent and subsidiary corporations exceeds $100,000, such Incentive Stock Options shall be treated as Nonqualified Stock Options. The Committee shall determine, in accordance with applicable provisions of the Code, Treasury regulations, and other administrative pronouncements, which of a Participant’s Incentive Stock Options will not constitute Incentive Stock Options because of such limitation and shall notify the Participant of such determination as soon as practicable after such determination. No Incentive Stock Option shall be granted to an individual if, at the time the Option is granted, such individual owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of its parent or subsidiary corporation, within the meaning of Section 422(b)(6) of the Code, unless (i) at the time such Option is granted, the option price is at least 110% of the Fair Market Value of the Common Stock subject to the Option and (ii) such Option by its terms is not exercisable after the expiration of five years from the date of grant. Except as otherwise provided in Sections 421 or 422 of the Code, an Incentive Stock Option shall not be transferable otherwise than by will or the laws of descent and distribution and shall be exercisable during the Participant’s lifetime only by such Participant or the Participant’s guardian or legal representative.(d) Option Agreement; Stock Appreciation Right Agreement. Each Option shall be evidenced by an Option Agreement in such form and containing such provisions not inconsistent with the provisions of the Plan as the Committee from time to time shall approve, including, without limitation, provisions to qualify an Option as an Incentive Stock Option under Section 422 of the Code. Each Stock Appreciation Right shall be evidenced by a Stock Appreciation Right Agreement. Each Option Agreement and Stock Appreciation Right Agreement may specify the effect of termination of (i) employment, (ii) the consulting or advisory relationship or (iii) membership on the Board, as applicable, or a Change in Control on the exercisability of the Option or Stock Appreciation Right. An Option Agreement may provide for the payment of the exercise price, in whole or in part, by the delivery of a number of shares of Common Stock (plus cash if necessary) having a Fair Market Value equal to such exercise price. Moreover, an Option Agreement may provide for a “cashless exercise” of the Option by establishing procedures satisfactory to the Committee with respect thereto. Further, an Option Agreement may provide, on such terms and conditions as the Committee in its sole discretion may prescribe, for the grant of a Stock Appreciation Right in connection with the grant of an Option and, in such case, the exercise of the Stock Appreciation Right shall result in the surrender of the right to purchase a number of shares under the Option equal to the number of shares with respect to which the Stock Appreciation Right is exercised (and vice versa). In the case of any Stock Appreciation Right that is granted in connection with an Incentive Stock Option, such right shall be exercisable only when the Fair Market Value of the Common Stock exceeds the exercise price specified therefor in the Option or the portion thereof to be surrendered. The terms and conditions of the respective Option Agreements and Stock Appreciation Right Agreements need not be identical. Subject to the consent of the Participant, the Committee may, in its sole discretion, amend an outstanding Option Agreement and Stock Appreciation Right Agreement from time to time in any manner that is not inconsistent with the provisions of the Plan.(e) Exercise Price and Payment. The exercise price shall be determined by the Committee but, subject to adjustment as provided in Paragraph XII, such exercise price shall not be less than the Fair Market Value of a share of Common Stock on the date an Option is granted. An Option, Stock Appreciation Right or portion thereof may be exercised by delivery of an irrevocable notice of exercise to the Company, as specified by the Committee. The exercise price shall be paid in full in the manner prescribed by the Committee. Separate stock certificates shall be issued by the Company for those shares acquired pursuant to the exercise of an Incentive Stock Option and for those shares acquired pursuant to the exercise of any Nonqualified Stock Option.(f) Restrictions on Repricing of Options.Except as provided in Paragraph XII, the Committee may not, without approval of the stockholders of the Company, lower the exercise price of an Option or Stock Appreciation Right after the date of grant nor may any outstanding Option or Stock Appreciation Right granted under the Plan be surrendered to the Company as consideration for the grant of a new Option with a lower exercise price, cash or a new Award. Any other action that is deemed to be a repricing under any applicable rule of the New York Stock Exchange shall be prohibited unless there is prior approval by the stockholders of the Company.(g) Stockholder Rights and Privileges. The Participant shall be entitled to all the privileges and rights of a stockholder only with respect to such shares of Common Stock delivered to the Participant after exercise of an Option.(h) Options and Rights in Substitution for Options Granted by Other Employers. Options and Stock Appreciation Rights may be granted under the Plan from time to time in substitution for options and such rights held by individuals providing services to corporations or other entities who become Employees, Consultants, or Directors as a result of a merger or consolidation or other business transaction with the Company or any Affiliate.IX. RESTRICTED STOCK AWARDS(a) Forfeiture Restrictions to be Established by the Committee. Shares of Common Stock that are the subject of a Restricted Stock Award shall be subject the Minimum Restrictions and to other restrictions on disposition by the Participant and an obligation of the Participant to forfeit and surrender the shares to the Company under certain circumstances as determined by the Committee (the“Forfeiture Restrictions”). The Forfeiture Restrictions shall be determined by the Committee in its sole discretion, and the Committee may provide that the Forfeiture Restrictions shall lapse upon (i) the attainment of one or more Performance Measures, (ii) the Participant’s continued employment with the Company or its Affiliate or continued service as a Consultant or Director for a specified period of time, (iii) the occurrence of any event or the satisfaction of any other condition specified by the Committee in its sole discretion (including, without limitation, a Change in Control), or (iv) a combination of any of the foregoing. Each Restricted Stock Award may have different Forfeiture Restrictions, in the discretion of the Committee.(b) Other Terms and Conditions. Unless provided otherwise in a Restricted Stock Agreement, the Participant shall have the right to receive dividends with respect to Common Stock subject to a Restricted Stock Award, to vote Common Stock subject thereto, and to enjoy all other stockholder rights, except that (i) the Participant shall not be entitled to delivery of the stock certificate until the Forfeiture Restrictions have expired, (ii) the Company shall retain custody of the stock until the Forfeiture Restrictions have expired, (iii) the Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of the stock until the Forfeiture Restrictions have expired, and (iv) a breach of the terms and conditions established by the Committee pursuant to the Restricted Stock Agreement shall cause a forfeiture of the Restricted Stock Award. At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms, conditions, or restrictions relating to Restricted Stock Awards, including, but not limited to, (i) rules pertaining to the termination of employment, or service as a Consultant or Director. of a Participant prior to expiration of the Forfeiture Restrictions, or (ii) if the Award is intended to be a Qualified Performance Award, providing that dividends are subject to the same Performance Measures as the underlying Award. If dividends are subject to the same Performance Measures of an Award intended to be a Qualified Performance Award, the Participant shall not be entitled to such dividends until the Performance Measures of the Award have been met and payment has been determined by the Committee. Such additional terms, conditions, or restrictions shall be set forth in a Restricted Stock Agreement made in conjunction with the Award.(c) Payment for Restricted Stock. The Committee shall determine the amount and form of any payment for Common Stock received pursuant to a Restricted Stock Award, provided that in the absence of such a determination, a Participant shall not be required to make any payment for Common Stock received pursuant to a Restricted Stock Award, except to the extent otherwise required by law.(d) Restricted Stock Agreements. At the time any Award is made under this Paragraph VIII, the Company and the Participant shall enter into a Restricted Stock Agreement setting forth each of the matters contemplated hereby and such other matters as the Committee may determine to be appropriate. The terms and provisions of the respective Restricted Stock Agreements need not be identical. Subject to the consent of the Participant, the Committee may, in its sole discretion, amend an outstanding Restricted Stock Agreement from time to time in any manner that is not inconsistent with the provisions of the Plan.X. PERFORMANCE AWARDS(a) Performance Period. The Committee shall establish, with respect to and at the time of each Performance Award, the number of shares of Common Stock subject to, or the maximum value of, the Performance Award and the performance period over which the performance applicable to the Performance Award shall be measured.(b) Nonqualified Performance Awards. Performance Awards granted to Employees that are not intended to qualify as qualified performance-based compensation under Section 162(m) of the Code shall bebased on achievement of such goals and be subject to such terms, conditions and restrictions as the Committee or its delegate shall determine.(c) Qualified Performance Awards. Any Performance Awards that are intended to qualify as Qualified Performance Awards awarded to a Participant shall be paid, vested or otherwise deliverable solely on account of the attainment of one or more pre-established, objective Performance Measures that are contingent upon future performance of the Company or any Affiliate, division, or department thereof during the performance period. A Performance Measure is objective if a third party having knowledge of the relevant facts could determine whether the goal is met. The Committee shall establish the Performance Measures applicable to such performance either (i) prior to the beginning of the performance period or (ii) within 90 days after the beginning of the performance period if the outcome of the performance targets is substantially uncertain at the time such targets are established, but not later than the date that 25% of the performance period has elapsed, and in any event while the outcome is substantially uncertain. In interpreting Plan provisions applicable to Performance Measures and Qualified Performance Awards, it is the intent of the Plan to conform with the standards of Section 162(m) of the Code and Treasury Regulation § 1.162-27(e)(2)(i), as to grants to those Employees whose compensation is, or is likely to be, subject to Section 162(m) of the Code, and the Committee in establishing such goals and interpreting the Plan shall be guided by such provisions. Prior to the payment of any compensation based on the achievement of Performance Measures applicable to Qualified Performance Awards, the Committee must certify in writing that applicable Performance Measures and any of the material terms thereof were, in fact, satisfied. For this purpose, approved minutes of the Committee meeting in which the certification is made shall be treated as such written certification. Subject to the Minimum Restrictions and the foregoing provisions, the terms, conditions and limitations applicable to any Qualified Performance Awards made pursuant to the Plan shall be determined by the Committee. The amount of cash or shares payable or vested pursuant toAwards that are intended to be Qualified Performance Awards may not be adjusted upward;provided, however, that the Committee may retain the discretion to adjust the amount of cash or shares payable or vested pursuant to such Qualified Performance Awards downward, either on a formula or discretionary basis or any combination, as the Committee determines.(d) Payment. Following the end of the performance period, the holder of a Performance Award shall be entitled to receive payment of an amount not exceeding the number of shares of Common Stock subject to, or the maximum value of, the Performance Award, based on the achievement of the Performance Measures for such performance period, as determined and certified in writing by the Committee. Payment of a Performance Award may be made in cash, Common Stock, or a combination thereof, as determined by the Committee. Payment shall be made in a lump sum or in installments as prescribed by the Committee. If a Performance Award covering shares of Common Stock is to be paid in cash, such payment shall be based on the Fair Market Value of the Common Stock on the payment date or such other date as may be specified by the Committee in the Performance Award Agreement. A Participant shall not be entitled to the privileges and rights of a stockholder with respect to a Performance Award covering shares of Common Stock until payment has been determined by the Committee and such shares have been delivered to the Participant.(e) Termination of Award. A Performance Award shall terminate if the Participant does not remain continuously in the employ of the Company and its Affiliates or does not continue to perform services as a Consultant or a Director for the Company and its Affiliates at all times during the applicable performance period through the payment date, except as may be determined by the Committee.(f) Performance Award Agreements. At the time any Award is made under this Paragraph IX, the Company and the Participant shall enter into a Performance Award Agreement setting forth each of the matters contemplated hereby and such additional matters as the Committee may determine to be appropriate. The terms and provisions of Performance Award Agreements need not be identical.XI. RESTRICTED STOCK UNIT AWARDS(a) Forfeiture Restrictions to be Established by Committee. Awards of Restricted Stock Units shall be subject to the Minimum Restrictions and to other restrictions and an obligation of the Participant to forfeit the Award under certain circumstances as determined by the Committee (the“Forfeiture Restrictions”). The Forfeiture Restrictions shall be determined by the Committee in its sole discretion, and the Committee may provide that the Forfeiture Restrictions shall lapse upon (i) the attainment of one or more Performance Measures, (ii) the Participant’s continued employment with the Company or its Affiliate or continued service as a Consultant or Director for a specified period of time, (iii) the occurrence of any event or the satisfaction of any other condition specified by the Committee in its sole discretion (including, without limitation, a Change in Control), or (iv) a combination of any of the foregoing. Each Restricted Stock Unit Award may have different Forfeiture Restrictions, in the discretion of the Committee.(b) Other Terms and Conditions. The Committee may, in its sole discretion, prescribe additional terms, conditions or restrictions relating to the Restricted Stock Unit Award, including, but not limited to, rules pertaining to the termination of the Participant’s service prior to expiration of the Forfeiture Restrictions, as shall be set forth in the Restricted Stock Unit Award Agreement and as are consistent with the terms of the Plan. Cash dividend equivalents may be paid during or after the vesting period with respect to a Restricted Stock Unit Award and, with respect to Awards intended to be Performance Awards, may be subject to the same Performance Goals as the underlying Award, as determined by the Committee. If the Restricted Stock Unit Award is intended to be a Qualified Performance Award, the dividend equivalents will be subject to the same Performance Measures as the Award, and the Participant shall not be entitled to such dividend equivalents until the Performance Measures of the Award have been met and payment has been determined by the Committee. The Committee, in its sole discretion, may provide for the deferral of a Restricted Stock Unit Award.(c) Payment. Following the end of the vesting period for a Restricted Stock Unit Award (or at such other time as the applicable Restricted Stock Unit Award Agreement may provide), the holder of a Restricted Stock Unit Award shall be entitled to receive payment of an amount, not exceeding the maximum value of the Restricted Stock Unit Award, based on the then vested value of the Award. Payment of a Restricted Stock Unit Award may be made in cash, Common Stock, or a combination thereof as determined by the Committee. Payment shall be made in a lump sum or in installments as prescribed by the Committee. Any payment to be made in cash shall be based on the Fair Market Value of the Common Stock on the payment date or such other date as may be specified by the Committee in the Restricted Stock Unit Award Agreement. A Participant shall not be entitled to the privileges and rights of a stockholder with respect to a Restricted Stock Unit Award until the shares of Common Stock have been delivered to the Participant.(d) Termination of Award. A Restricted Stock Unit Award shall terminate if the Participant does not remain continuously in the employ of the Company and its Affiliates or does not continue to perform services as a Consultant or a Director for the Company and its Affiliates at all times during the applicable vesting period, except as may be otherwise determined by the Committee.(e) Restricted Stock Unit Award Agreements. At the time any Award is made under this Paragraph X, the Company and the Participant shall enter into a Restricted Stock Unit Award Agreement setting forth each of the matters contemplated hereby and such additional matters as the Committee may determine to be appropriate. The terms and provisions of the respective Restricted Stock Unit Award Agreements need not be identical.XII. BONUS STOCK AWARDSEach Bonus Stock Award granted to a Participant shall constitute a transfer of unrestricted shares of Common Stock on such terms and conditions as the Committee shall determine. Bonus Stock Awards shall be made in shares of Common Stock and need not be subject to performance criteria or objectives or to forfeiture. The purchase price, if any, for shares of Common Stock issued in connection with a Bonus Stock Award shall be determined by the Committee in its sole discretion.XIII. RECAPITALIZATION OR REORGANIZATION(a) No Effect on Right or Power. The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization, or other change in the Company’s or any Affiliate’s capital structure or its business, any merger or consolidation of the Company or any Affiliate, any issue of debt or equity securities ahead of or affecting Common Stock or the rights thereof, the dissolution or liquidation of the Company or any Affiliate, any sale, lease, exchange, or other disposition of all or any part of its assets or business, or any other corporate act or proceeding.(b) Subdivision or Consolidation of Shares; Stock Dividends. The shares with respect to which Awards may be granted are shares of Common Stock as presently constituted, but if, and whenever, prior to the expiration of an Award theretofore granted, the Company shall effect a subdivision or consolidation of shares of Common Stock or the payment of a stock dividend on Common Stock , the number of shares of Common Stock with respect to which such Award may thereafter be exercised or satisfied, as applicable, (i) in the event of an increase in the number of outstanding shares, shall be proportionately increased, and the purchase price per share shall be proportionately reduced, and (ii) in the event of a reduction in the number of outstanding shares, shall be proportionately reduced, and the purchase price per share shall be proportionately increased. Any fractional share resulting from such adjustment shall be rounded up to the next whole share.(c) Recapitalizations and Corporate Changes. If the Company recapitalizes, reclassifies its capital stock, or otherwise changes its capital structure (a “recapitalization”), the number and class of shares of Common Stock or other property covered by an Award theretofore granted and the purchase price of Common Stock or other consideration subject to such Award shall be adjusted so that such Award shall thereafter cover the number and class of shares of stock and securities to which the Participant would have been entitled pursuant to the terms of the recapitalization if, immediately prior to the recapitalization, the Participant had been the holder of record of the number of shares of Common Stock then covered by such Award. If (i) the Company shall not be the surviving entity in any merger, consolidation or reorganization (or survives only as a subsidiary of an entity), (ii) the Company sells, leases, or exchanges or agrees to sell, lease, or exchange all or substantially all of its assets to any other person or entity, (iii) the Company is to be dissolved and liquidated, (iv) any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Exchange Act, acquires or gains ownership or control (including, without limitation, the power to vote) of more than 50% of the outstanding shares of the Company’s voting stock (based upon voting power), or (v) as a result of or in connection with a contested election of Directors, the persons who were Directors of the Company before such election shall cease to constitute a majority of the Board (each such event is referred to herein as a “Corporate Change”), no later than (x) 10 days after the approval by the stockholders of the Company of such merger, consolidation, reorganization, sale, lease, or exchange of assets or dissolution and liquidation or such election of Directors or (y) 30 days after a Corporate Change of the type described in clause (iv), the Committee, acting in its sole discretion without the consent or approval of any Participant, shall effect one or more of the following alternatives in an equitable and appropriate manner to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, which alternatives may vary among individual Participants and which may vary among Options or Stock Appreciation Rights held by any individual Participant: (1) accelerate the time at which Options or Stock Appreciation Rights then outstanding may be exercised so that such Awards may be exercised in full for a limited period of time on or before a specified date (before or after such Corporate Change) fixed by the Committee, after which specified date all such unexercised Awards and all rights of Participants thereunder shall terminate, (2) require the mandatory surrender to the Company by all or selected Participants of some or all of the outstanding Options or Stock Appreciation Rights held by such Participants (irrespective of whether such Awards are then exercisable under the provisions of the Plan) as of a date, before or after such Corporate Change, specified by the Committee, in which event the Committee shall thereupon cancel such Awards and the Company shall pay (or cause to be paid) to each Participant an amount of cash per share equal to the excess, if any, of the amount calculated in Subparagraph (d) below (the “Change in Control Value”) of the shares subject to such Awards over the exercise price(s) under such Awards for such shares, or (3) make such adjustments to Options orStock Appreciation Rights then outstanding as the Committee deems appropriate to reflect such Corporate Change and to prevent the dilution or enlargement of rights (provided, however, that the Committee may determine in its sole discretion that no adjustment is necessary to such Awards then outstanding), including, without limitation, adjusting such an Award to provide that the number and class of shares of Common Stock covered by such Award shall be adjusted so that such Award shall thereafter cover securities of the surviving or acquiring corporation or other property (including, without limitation, cash) as determined by the Committee in its sole discretion.(d) Change in Control Value. For the purposes of clause (2) in Subparagraph (c) above, the “Change in Control Value” shall equal the amount determined in the following clause (i), (ii) or (iii), whichever is applicable: (i) the per share price offered to stockholders of the Company in any such merger, consolidation, reorganization, sale of assets or dissolution and liquidation transaction, (ii) the price per share offered to stockholders of the Company in any tender offer or exchange offer whereby a Corporate Change takes place, or (iii) if such Corporate Change occurs other than pursuant to a tender or exchange offer, the fair market value per share of the shares into which such Options or Stock Appreciation Rights being surrendered are exercisable, as determined by the Committee as of the date determined by the Committee to be the date of cancellation and surrender of such Awards. In the event that the consideration offered to stockholders of the Company in any transaction described in this Subparagraph (d) or Subparagraph (c) above consists of anything other than cash, the Committee shall determine the fair cash equivalent of the portion of the consideration offered which is other than cash.(e) Other Changes in the Common Stock. In the event of changes in the outstanding Common Stock by reason of recapitalizations, reorganizations, mergers, consolidations, combinations,evaluating results.A-1split-ups,split-offs,spin-offs, exchanges, or other relevant changes in capitalization or distributions (other than ordinary dividends) to the holders of Common Stock occurring after the date of the grant of any Award and not otherwise provided for by this Paragraph XII, such Award and any agreement evidencing such Award shall be subject to adjustment by the Committee at its sole discretion as to the number and price of shares of Common Stock or other consideration subject to such Award in an equitable and appropriate manner to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under such Award. In the event of any such change in the outstanding Common Stock or distribution to the holders of Common Stock, or upon the occurrence of any other event described in this Paragraph XII, the aggregate maximum number of shares available under the Plan, the aggregate maximum number of shares that may be issued under the Plan through Incentive Stock Options, and the maximum number of shares that may be subject to Awards granted to any one individual shall be appropriately adjusted to the extent, if any, determined by the Committee, whose determination shall be conclusive.(f) Stockholder Action. Any adjustment provided for in the above Subparagraphs shall be subject to any required stockholder action.(g) No Adjustments Unless Otherwise Provided. Except as hereinbefore expressly provided, the issuance by the Company of shares of stock of any class or securities convertible into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Common Stock subject to Awards theretofore granted or the purchase price per share, if applicable.(h) Adjustments in Compliance with Section 409A of the Code. No adjustment pursuant to this Paragraph XII shall be made in a manner that results in noncompliance with the requirements of Section 409A of the Code, to the extent applicable.XIV. TERMINATION ON OR AFTER CHANGE IN CONTROLIf a Change in Control occurs and, on or within two years after the date of consummation of such Change in Control, a Participant’s employment with the Company and its Affiliates is terminated involuntarily by the Company without Cause or by the Participant for Good Reason, then (a) any Award other than Performance Awards held by the Participant at the time of the Participant’s termination shall become fully vested and exercisable and all Forfeiture Restrictions shall immediately lapse and (b) any Performance Award held by the Participant at the time of the Participant’s termination shall become fully vested and all Forfeiture Restrictions shall immediately lapse and such Performance Award shall be deemed to have been earned at the target level.XV. AMENDMENT AND TERMINATION OF THE PLANThe Board in its discretion may terminate the Plan at any time with respect to any shares of Common Stock for which Awards have not theretofore been granted. The Board shall have the right to alter or amend the Plan or any part thereof from time to time; provided that no change in the Plan may be made that would materially impair the rights of a Participant with respect to an Award theretofore granted without the consent of the Participant, and provided, further, that the Board may not, without approval of the stockholders of the Company, (a) amend the Plan to increase the aggregate maximum number of shares that may be issued under the Plan, increase the aggregate maximum number of shares that may be issued under the Plan through Incentive Stock Options, or change the class of individuals eligible to receive Awards under the Plan, or (b) amend or delete Paragraph VII(f).XVI. SPECIAL PROVISIONS RELATED TO SECTION 409A OF THE CODE(a) Intent and Interpretation. It is intended that the payments and benefits provided under the Plan and any Award shall either be exempt from the application of, or comply with, the requirements of Section 409A of the Code. The Plan and all Award agreements shall be construed in a manner that effects such intent. Nevertheless, the tax treatment of the benefits provided under the Plan or any Award is not warranted or guaranteed. Neither the Company, its Affiliates nor their respective directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any Participant or other taxpayer as a result of the Plan or any Award.(b) Permissible Payments. Notwithstanding anything in the Plan or in any Award agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable, or a different form of payment (e.g., lump sum or installment) would be effected, under the Plan or any Award agreement by reason of the occurrence of a Corporate Change or Change in Control or the Participant’s separation from service, such amount or benefit will not be payable or distributable to the Participant, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such Corporate Change or Change in Control or separation from service meet any description or definition of “change in control event” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the next earliest payment or distribution date or event specified in the Award agreement that is permissible under Section 409A of the Code. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.(c) Required Delay. Notwithstanding anything in the Plan or in any Award agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes ofSection 409A of the Code would otherwise be payable or distributable under the Plan or any Award agreement by reason of a Participant’s separation from service during a period in which the Participant is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes): (i) the amount of such non-exempt deferred compensation that would otherwise be payable during the six-month period immediately following the Participant’s separation from service will be accumulated through and paid or provided on the earlier of (a) the date of the Participant’s death or (b) the date that is six months after the date of the Participant’s separation from service with the Company (in either case, the“Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.(d) Specified Employee Defined. For purposes of the Plan, the term “Specified Employee” has the meaning given such term in Section 409A of the Code and the final regulations thereunder, provided, however, that, as permitted in such final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Section 409A(a)(2)(B)(i) of the Code shall be determined in accordance with rules adopted by the Board or any committee of the Board, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including the Plan.XVII. MISCELLANEOUS(a) No Right To An Award. Neither the adoption of the Plan nor any action of the Board or of the Committee shall be deemed to give any individual any right to be granted an Award, or any other rights hereunder except as may be evidenced by an Award agreement duly executed on behalf of the Company, and then only to the extent and on the terms and conditions expressly set forth therein. The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of funds or assets to assure the performance of its obligations under any Award.(b) No Employment/Membership Rights Conferred. Nothing contained in the Plan shall (i) confer upon any Employee or Consultant any right with respect to continuation of employment or of a consulting or advisory relationship with the Company or any Affiliate or (ii) interfere in any way with the right of the Company or any Affiliate to terminate his or her employment or consulting or advisory relationship at any time. Nothing contained in the Plan shall confer upon any Director any right with respect to continuation of membership on the Board.(c) Other Laws; Withholding. The Company shall not be obligated to issue any Common Stock pursuant to any Award granted under the Plan at any time when the shares covered by such Award have not been registered under the Securities Act of 1933, as amended, and such other state and federal laws, rules, and regulations as the Company or the Committee deems applicable and, in the opinion of legal counsel for the Company, there is no exemption from the registration requirements of such laws, rules, and regulations available for the issuance and sale of such shares. No fractional shares of Common Stock shall be delivered, nor shall any cash in lieu of fractional shares be paid. The Company shall have the right to deduct in connection with all Awards any taxes required by law to be withheld and to require any payments required to enable it to satisfy its withholding obligations.(d) No Restriction on Corporate Action. Nothing contained in the Plan shall be construed to prevent the Company or any Affiliate from taking any action which is deemed by the Company or such Affiliate to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No Participant, beneficiary or other person shall have any claim against the Company or any Affiliate as a result of any such action.(e) Restrictions on Transfer. An Award (other than an Incentive Stock Option, which shall be subject to the transfer restrictions set forth in Paragraph VII(c)) shall not be transferable otherwise than (i) by willor the laws of descent and distribution, (ii) pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder, or (iii) with the consent of the Committee.(f) Clawback. To the extent required by applicable law or any applicable securities exchange listing standards, or as otherwise determined by the Committee, Awards and amounts paid or payable pursuant to or with respect to Awards shall be subject to the provisions of any clawback policy implemented by the Company. Notwithstanding any provision of the Plan or any Award agreement to the contrary, the Company reserves the right, without the consent of any Participant, to adopt any such clawback policies and procedures, including such policies and procedures applicable to the Plan or any Award agreement with retroactive effect.(g) Foreign Awardees. Without amending the Plan, the Committee may grant Awards to eligible persons who are foreign nationals on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan and, in furtherance of such purposes, the Committee may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with the provisions of laws and regulations in other countries or jurisdiction in which the Company or its Affiliates operate.(h) Governing Law. The Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to conflicts of laws principles thereof.EXHIBIT A2016 STOCK AND INCENTIVE PLAN(As Established Effective as of May 17, 2016)Except as otherwise provided in an Award agreement, the definitions set forth in this Exhibit A shall also apply in the case of any provision of the Plan or any Award agreement that includes the term “Change in Control:”Acquiring Person means any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).Change in Controlmeans:(a) The acquisition by any Acquiring Person of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of either (1) the then outstanding shares of common stock of the Company (the“Outstanding Company Common Stock”) or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the“Outstanding Company Voting Securities”);provided, however, that for purposes of this subsection (a) any acquisition by any Acquiring Person pursuant to a transaction which complies with clause (c)(1) of this definition shall not constitute a Change in Control; or(b) Individuals, who, immediately following the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered for purposes of this definition as though such individual was a member of the Incumbent Board, but excluding, for these purposes, any such individual whose initial assumption of office as a director occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of an Acquiring Person other than the Board; or(c) The consummation of a Corporate Transaction unless, following such Corporate Transaction, (1) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the Company (if it be the ultimate parent entity following such Corporate Transaction) or the corporation resulting from such Corporate Transaction (or the ultimate parent entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), and (2) at least a majority of the members of the board of directors of the ultimate parent entity resulting from such Corporate Transaction were members of the Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Corporate Transaction. For purposes of the foregoing sentence, only (A) shares of common stock and voting securities of the Company, assuming the Company is the ultimate parent entity following such Corporate Transaction, held by a beneficial owner immediately prior to such Corporate Transaction and any additional shares of common stock and voting securities of the Company issuable to such beneficial owner in connection with such Corporate Transaction in respect of the shares of common stock and voting securities of the Company held by such beneficial owner immediately prior to such Corporate Transaction, or (B) shares of common stock and voting securities of the ultimate parent entity following such Corporate Transaction, assuming the Company is not the ultimate parent entity following such Corporate Transaction, issuable to a beneficial owner in respect of the shares of common stock and voting securities of the Company held by such beneficial owner immediately prior to such Corporate Transaction, in either case shall beincluded in determining whether or not the fifty percent (50%) ownership test in this subsection (c) has been satisfied.Corporate Transaction means a reorganization, merger or consolidation of the Company, any of its subsidiaries or sale, lease or other disposition of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole (other than to an entity wholly owned, directly or indirectly, by the Company) or the liquidation or dissolution of the Company.Exchange Act means the Securities Exchange Act of 1934, as amended.Personmeans any natural person, limited liability company, corporation, limited partnership, general partnership, joint stock company, joint venture, association, company, trust, bank trust company, land trust, business trust, or other organization, whether or not a legal entity, and any government or agency or political subdivision thereof.ANNUAL MEETING OF STOCKHOLDERS OFFORUM ENERGY TECHNOLOGIES, INC.May 17, 2016GO GREENe-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access.NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:The Notice of Meeting, proxy statement and proxy cardare available at http://www.astproxyportal.com/ast/17582/Please sign, date and mailyour proxy card in theenvelope provided as soonas possible.ê Please detach along perforated line and mail in the envelope provided. ê¢20333300000000000000 0 051716
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF DIRECTORS AND “FOR” PROPOSALS 2, 3 AND 4.PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE xFORAGAINSTABSTAIN1. Election of Directors:2.Advisory resolution to approve executive compensation.¨¨¨¨¨¨FOR ALL NOMINEESWITHHOLD AUTHORITY FOR ALL NOMINEESFOR ALL EXCEPT(See instructions below)NOMINEES:〇 C. Christopher Gaut〇 David C. Baldwin〇 Franklin Myers3.4.Resolution approving the Forum Energy Technologies, Inc. 2016 Stock and Incentive Plan.Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2016.¨¨¨¨¨¨In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting. This proxy when properly executed will be voted as directed herein by the undersigned shareholder.If no direction is made, this proxy will be voted FOR ALL NOMINEES in Proposal 1 and FOR Proposal 2, Proposal 3 and Proposal 4.INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark“FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: lTo change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.¨ Signature of Stockholder Date: Signature of Stockholder Date: ¢Note:Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.¢¨nFORUM ENERGY TECHNOLOGIES, INC.Proxy for Annual Meeting of Stockholders on May 17, 2016Solicited on Behalf of the Board of DirectorsThe undersigned hereby appoints C. Christopher Gaut and James L. McCulloch, and each of them, with full power of substitution and power to act alone, as proxies to vote all the shares of Common Stock which the undersigned would be entitled to vote if personally present and acting at the Annual Meeting of Stockholders of Forum Energy Technologies, Inc., to be held May 17, 2016, 8:00 a.m. Central Daylight Time, at 920 Memorial City Way, Suite 1000, Houston, Texas 77024, and at any adjournments or postponements thereof, as follows:(Continued and to be signed on the reverse side.) 1.1 14475 n