| Mr. Marken served as Chief Financial Officer and Treasurer from March 1, 2018 to July 1, 2020, when the Board appointed Mr. Marken as interim President and Chief Executive Officer of the Company. Mr. Marken is also a Director or Manager and an officer for all 100% owned ADES subsidiaries and a Manager on the Board of Managers of Tinuum Group. Previously, he was our Chief Accounting Officer, a position he held from June 2016 until his appointment as our Chief Financial Officer. Mr. Marken served as our Secretary from August 2016 to May 2020. Mr. Marken joined ADES in January 2015 as the Director of SEC Reporting and Technical Accounting. Prior to joining the Company, Mr. Marken held various positions at Ernst & Young, LLP from 2005 through 2015 including Senior Manager, assurance services.
Education: Mr. Marken received his BBA in accounting and MS in finance from Texas A&M University. Mr. Marken is a CPA. | | | | | | | The Compensation Committee: | R. Carter Pate, Chairperson | | Gilbert Li |
| | | | | | | | | | | | | | | | | | Joe M. Wong | | L. Spencer Wells | Chief Technology Officer | | | | Business Experience: | | | | | Mr. Wong has over 35 years of industrial leadership experience in research & development, product development and business growth in specialty materials. Prior to joining ADES in 2018, Mr. Wong served as the Chief Technology Officer for ADA Carbon Solutions since 2011. Before ADA Carbon Solutions, Mr. Wong worked for three years in private consulting, preceded by 21 years with MeadWestvaco Corporation in senior leadership positions for the Specialty Chemicals and Research & Development sectors.
Education: Mr. Wong holds a PhD in Chemical Engineering from the University of Texas. | | | | | | | |
| | | | | | | | | | | | | | | | | | Morgan Fields | | | Vice President of Accounting | | | | Business Experience: | | | | | Ms. Fields has over 15 years of accounting and consulting experience serving a variety of companies and industries. Ms. Fields has consulted with the Company on various projects since 2019, including assisting with system implementations and oversight of internal control over financial reporting framework. Prior to working with the Company, Ms. Fields' career included being the Director of Accounting for Cerapedics, Inc. from 2018 to 2019 and the Chief Accounting Officer for Rezolute, Inc. (RZLT) from 2014 to 2018. Before that, she held various other accounting and finance roles, including Assurance Director, with RSM US LLP. Education: Ms. Fields holds a Bachelors and Masters of Accounting from the University of Northern Iowa. | | | | | | | | | | | |
EXECUTIVE COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS In this Compensation Discussion and Analysis, we provide an analysis and explanation of our compensation program and the compensation earned by our executive officers in the fiscal year ended December 31, 2018.2020. Our Compensation Committee is charged with establishing the Company’sCompany's philosophy for executive compensation and approval, oversight, implementation and administration of executive compensation and benefits. Generally, the President and Chief Executive Officer of the Company makes recommendations to the Compensation Committee regarding executive compensation other than for himself; however, authority to approve compensation, performance goals and objectives for all named executive officers is vested in the Compensation Committee. For compensation awarded in 2017 and 2018,2020, in addition to extensive communications among its members, the Compensation Committee reviewed a report provided by its independent compensation consultant (LB & Co.), including market compensation analysis.analysis and peer group compensation data. Further, the Compensation Committee reviewed recommendations made by the Company's management for performance, experience and retention and was supported by generally available market data. Overview - Executive compensation philosophy Our philosophy for executive compensation is set forth in a document entitled "Executive Compensation Philosophy and Objectives" (the "EC Philosophy") adopted by the Compensation Committee on January 2, 2014. The EC Philosophy, which our Compensation Committee continues to follow, is designed to support achievement of our strategies and goals, thereby creating long-term value for our stockholders and customers and ensuring our ability to recruit and retain highly qualified executive employees. Our EC Philosophy:
▪Supports our Company’sthe Company's vision, mission, strategy, and values to generate profitability and sustained growth in the long-term best interests of our stockholders; ▪Aligns executive compensation with measures of performance tied to the strategic and operational performance of the business and stockholder returns; ▪Rewards executives on the basis of merit for individually and collectively achieving a leadership culture, innovation and excellence within the Company, and delivering sustained high performance to the Company, taking into consideration each executive’sexecutive's qualifications, level of responsibility and contribution to the Company’sCompany's long-term performance; ▪Encourages competency-building by linking career development, performance management and compensation rewards; ▪Attracts and retains the best executive talent and a highly qualified diverse workforce within a non-discriminatory, merit-based compensation program; and ▪Uses external compensation data to benchmark comparable positions in similar industries and companies within our geographical region as one key factor in establishing the competitiveness of our executive salaries, incentives and benefits. Our Compensation Committee has made incentive cash bonuses and long-term equity incentive awards consistent with the EC Philosophy. The long-term equity incentive awards are made under our 2017 Omnibus Incentive Plan (the "2017 Plan"). We
believe that our compensation policies and practices do not motivate excessive or imprudent risk-taking. We note the following key aspects of our compensation policies and practices in making this determination: ▪The Company’sCompany's EC Philosophy is based on balanced performance metrics that promote disciplined progress towards long-term Company goals in addition to the short-term health of the organization; ▪We do not offer significant short-term incentives that might drive high-risk investments at the expense of long-term Company value; and ▪The Company’sCompany's compensation programs are weighted towards offering long-term incentives. Because of these factors, we believe that our compensation policies and practices, both for our employees and our executive officers, do not create risks that are reasonably likely to have a material adverse effect on the Company. The Company provides its stockholders with the opportunity to cast an advisory vote on annual executive compensation (a “say-on-pay proposal”"say-on-pay proposal"). At the Company’s Annual Meeting in 2018,2020, approximately 88.2%95.3% of the votes cast on the say-on-pay advisory vote regarding the executive compensation for the fiscal year ended December 31, 20182019 were in favor of the proposal, which the Compensation Committee reviewed in assessing executive compensation for the fiscal year ending December 31, 2019.2020. Proposal 2 included in the Proxy Statement is a say-on-pay advisory vote regarding the executive compensation for the fiscal year ending December 31, 20192020 as described in this Proxy Statement. The Compensation Committee will continue to
consider the results of the Company’sCompany's say-on-pay votes when making future compensation decisions for the Company’sCompany's executive officers, including named executive officers. On February 25, 2021 and April 9, 2021, respectively, the Compensation Committee adopted objectives and related performance metrics to the Long-Term Incentive Plan ("LTIP") and Executive Short-Term Incentive Plan ("ESTIP") documents that are within the EC Philosophy. While the philosophy has not changed, the incentives for our executive officers were updated in order to promote progress towards long-term Company goals in addition to the short-term health of the organization. Independent Compensation Consultant For compensation related to 2020 and beyond, the Compensation Committee retained LB & Co., to provide a market analysis of the Company’s executive and director compensation relative to our peer companies and to recommend the amount and form of such compensation to be paid in the future. LB & Co. compared the compensation practices of the Company to 17 peer group companies from a number of similar industries, including Commodity Chemicals, Environmental and Facility Services, Fertilizers and Agricultural Chemicals, Industrial Machinery, Oil and Gas Equipment and Services, Oil and Gas Refining and Marketing, and Specialty Chemicals. The Compensation Committee reviewed these peer companies and approved their use for comparison to the Company. Compensation of Named Executive Officers The Company's named executive officers ("NEOs") for 2018during 2020 were: | | | | | | | | | | | | | | | Name | | Age | | Positions | Greg P. Marken | | 39 | | Interim President and Chief Executive Officer, Treasurer | Christine Bellino | | 67 | | Former Chief Accounting Officer | Joe M. Wong | | 60 | | Chief Technology Officer | L. Heath Sampson | | 50 | | Former President, Chief Executive Officer and Director | | | | | | | | | | | Name | | Age | | Positions | L. Heath Sampson | | 48 | | President and Chief Executive Officer | Greg P. Marken | | 37 | | Chief Financial Officer, Treasurer and Secretary | Ted J. Sanders | | 42 | | General Counsel |
Heath Sampson resigned as our President and Chief Executive Officer effective June 30, 2020 as well as resigned as a director, effective June 16, 2020. The Board appointed Greg Marken, the Company's prior Chief Financial Officer, Treasurer and Secretary as interim President and Chief Executive Officer, effective July 1, 2020. Christine Bellino was appointed our Chief Accounting Officer on May 7, 2020 and assumed the role of our principal financial officer effective July 1, 2020. Ms. Bellino retired from the Company on March 31, 2021. Ted Sanders, the Company's General Counsel was appointed Secretary effective June 30, 2020.
The compensation for our NEOs currently consists of three elements: base salaries, annual incentive cash bonuses and long term equity incentive awards in the form of RSA's and for Mr. Sampson, options to purchase our Common Stock.PSU's. Executive compensation is designed to reward performance in a straightforward and transparent manner. Base Salaries Base salary is defined as ongoing, cash compensation paid bi-weekly based on such factors as job responsibilities, external competitiveness, and the individual’sindividual's experience and performance. Pay ranges have been set based on the market where the Company competes for similar positions, with consideration given for employees serving similar functions in comparable companies. Base salary is typically increased annually based on performance and cost of labor/living increases. With the use of market data, the Compensation Committee considers the size of and whether to grant merit increases based on data from comparable companies, as well as review of an officer's annual performance and meeting of objectives. The Company attempts to ensure middle market pay for solid performers and to consider higher levels of pay for outstanding performers. The Company does not intend to be a market leader in base compensation. On February 28, 2017, the Compensation Committee approved increases to the base salaries of Messrs. Marken and Sanders to $250,000 and $200,000, respectively, effective January 1, 2017 based on general market data and Mr. Sanders' promotion to General Counsel. On March 1, 2018,27, 2019, the Compensation Committee approved an increase in Mr. Marken's base salary to $300,000, effective March 1, 2018, given his promotion to Chief Financial Officer and Treasurer, in addition to his continued role as Secretary. On March 1, 2018, the Compensation Committee approved the base salary of Mr. Sanders $220,000, effective April 1, 2018.
On February 27, 2019, the Compensation Committee approved an increase in Messrs. Sampson, Marken and Sanders base salaries to $525,000, $309,000, and $253,792, respectively, effective April 1, 2019, based on general market data. On August 12, 2020, the Compensation Committee approved an increase in Mr. Marken's base salary to $450,000, given Mr. Marken's appointment to Interim Chief Executive Officer, contingent and effective upon completion of the Master Supply Agreement. On February 24, 2021, the Compensation Committee approved an increase in Mr. Marken's base salary to $460,000 based on general market data.
On May 6, 2020, the BOD approved the creation of the Chief Accounting Officer position and appointed Christine Bellino to such position effective May 7, 2020. Upon her appointment to Chief Accounting Officer, Ms. Bellino's base salary is $260,000. Effective March 31, 2021, Ms. Bellino retired from the Company. On February 25, 2021, the Company's board of directors approved the creation of the Vice President of Accounting position and appointment of Morgan Fields to such position effective March 1, 2021. Ms. Fields' base salary is $215,000.
During 2019, Joe Wong was determined to be an NEO. Mr. Wong's base salary during that year was $300,000. On February 24, 2021, the Compensation Committee approved an increase in Mr. Wong's base salary to $306,000. On April 24, 2015, the Compensation Committee approved Mr. Sampson’s base salary of $500,000 effective April 1, 2015 given his promotion to President and Chief Executive Officer based on the Compensation Committee’s review of market data. Incentive Compensation The Company uses incentive compensation in the form of cash, stock and other equity awards to motivate executives and align executive and stockholder interests. Incentive amounts are set based on job position and market practices. Incentives paid in cash are subject to payroll taxes and other customary withholdings. In addition to awards under the Company’s The Short-Term Incentive Plan ("STIP") and Long-Term Incentive Plan ("LTIP"), we generally grant restricted stock awards to new executive officers.
The STIP is designed to motivate executives to achieve critical short-term goals, typically within a twelve-month period, that are expected to contribute to the long-term health and value of the Company. Incentives may be paid in cash or equity as determined by the Compensation Committee. The Compensation Committee adopted the Executive Short-Term Incentive Plan ("ESTIP")ESTIP in September 2015 to further establish terms and conditions for cash awards made under the STIP. The Compensation Committee makes STIP awards under the 2017 Plan and the ESTIP.
The LTIP is designed to align executives’ interests with those of the Company’s stockholders.Company's stockholders and to provide consistency with the Compensation Committee's approach to performance-based pay. Equity awards are the primary long-term incentive instrument and may be in the form of RSA's, PSU's,RSAs or performance stock options or SAR's.units ("PSUs"). Equity awards may vest immediately, over time based on continuous service, or over time based on achievement of certain performance goals, as determinedmeasures set by the Compensation Committee at the time of the grant, considering accounting and regulatory restrictions and the financial condition of the Company. Awards under the LTIP to a participant will typically be made 50% as RSAs and 50% as PSUs. PSUs are vested upon achievement, as certified by the Compensation Committee, of one or more performance measures measured over one to three years. The Company’s updated LTIP was adopted February 26, 2020. LTIP awards are made under the 2017 Plan. Generally, equity awards are granted on the same day that the Compensation Committee approves such grant. Exercise prices are set based on the closing market price on the grant date.award. From time to time, the Board or Compensation Committee may recognize exemplary performance of any executive with a cash or equity award. Exemplary performance is performance that the Board or Compensation Committee determines to have required significant effort and commitment and is determined to have had a significant positive impact on the current or future performance of the organization. No other payments were made in 20182020 and 20172019 except as set forth below under the "Additional Executive Compensation Awards" section. The stock portions of the 20182020 and 20172019 incentive awards are shown below in the Summary Compensation table under the "Stock Awards" column. The cash portions of the 20182020 and 20172019 incentive awards, which are defined under the STIP, are shown below in the Summary Compensation table under the "Non-Equity Incentive Plan Compensation" column. STIP Incentive Compensation for 20182020 On March 1, 2018, the Compensation Committee established performance goals, as defined in the ESTIP, performance schedule and target amounts for the NEOs (the "2018 Bonus Guidelines"). On March 1, 2018,February 26, 2020, the Compensation Committee established cash bonus targets for the NEOs as set forth in the following table. Awards were tied toThe performance goals, on which the awards are based, are Company and individual performance goals approved by the Compensation Committee. Company performance goals include the attainment of performance-based metrics reviewed and approved by the Compensation Committee. Specific metrics are not disclosed for competitive reasons, but generally wereare tied to growing the refined coal business, maintaining SEC and legal compliance, and finalizing directional strategy for the Emissions Control business.
achieving certain financial metrics. | | | | | | | | | | | Percentage of Base Salary | Named Executive Officer | | Maximum | L. Heath Sampson | | 100% | Greg P. Marken | | 50% | Ted J. SandersChristine Bellino | | N/A | Joe M. Wong | | 50% | Heath Sampson | | 100% | | | | | | | | | |
In 2018,2020, Messrs. Sampson, Marken, Wong and SandersSampson were awarded a cash bonus at 85%46%, 95%,46% and 95%0%, respectively, of the maximum target based on Company and individual performance goals approved by the Compensation Committee. Ms. Bellino was awarded a flat cash bonus in accordance with her employment agreement. LTIP Incentive Compensation for 20182020 On March 1, 2018,February 26, 2020, the Compensation Committee approved grants of restricted stock awards for shares of the Company’sCompany's Common Stock to NEOs as set forth in the table below, effective March 23, 2018.2020. The restricted stock awards for Messrs. Marken and SandersWong vest annually at a rate of one-third over a three-year vesting period subject to each respective officer’s continuous service to the Company. The PSU's for Messrs. Marken and Wong vest after three years.
Given the short-term nature of Ms. Bellino's employment agreement with the Company, no equity awards were granted. In connection with Mr. Sampson's resignation and under the Release of Claims and Separation Agreement (the "Settlement Agreement") entered into between Mr. Sampson and the Company, all unvested restricted stock awards forand the maximum attainable shares on Mr. Sampson vest onSampson's outstanding performance stock units vested immediately upon the third annual anniversaryeffectiveness of the grant date subject to Mr. Sampson’s continuous service to the Company.Settlement Agreement, which was effective July 1, 2020. | Named Executive Officer | | Named Executive Officer | | Percentage of Base Salary | | Number of Restricted Shares | | Number of Performance Stock Units | Greg P. Marken | | Greg P. Marken | | 65% | | 9,130 | | 9,129 | | Joe M. Wong | | Joe M. Wong | | 65% | | 8,864 | | 8,863 | Heath Sampson | | Heath Sampson | | 100% | | 23,864 | | 23,863 | | | Named Executive Officer | | Percentage of Base Salary | | Number of Restricted Shares | | L. Heath Sampson | | 100% | | 55,555 | | Greg P. Marken | | 50% | | 16,667 | | Ted J. Sanders | | 50% | | 12,222 | | |
STIP Incentive Compensation for 20192021 On February 27, 2019,April 9, 2021, the Compensation Committee established cash bonus targets for the NEOs as set forth in the following table. The performance goals on which the awards are based on Company and individual performance goals approved by the
Compensation Committee. Company performance goals include the attainment of performance-based metrics reviewed and approved by the Compensation Committee. Specific metrics are not disclosed for competitive reasons, but generally are tied to growing the refined coal business, achieving certain financial metrics, maintaining SEC and legal compliance, and successfully integrating the Carbon Solutions Acquisition. Mr. Sampson’s 2019 bonus target includes opportunity for additional payments based on certain achievements in the refined coal business.metrics. | | | | | | | | | | | Percentage of Base Salary | Named Executive Officer | | Maximum | L. Heath Sampson | | 100% | Greg P. Marken | | 75% | | | | Joe M. Wong | | 50% | Ted J. SandersMorgan Fields | | 50%40% | | | | | | | | | |
LTIP Incentive Compensation for 20192021 On February 27, 2019,24, 2021, the Compensation Committee approved grants of restricted stock awards for shares of the Company’sCompany's Common Stock and performance stock units to NEOs as set forth in the table below, effective March 23, 2019.2021. The restricted stock awards for Messrs. Marken, Wong and SandersMs. Fields vest annually at a rate of one-third over a three-year vesting period subject to each respective officer’sofficer's continuous service to the Company. The restricted stock awardsPSU's for Mr. SampsonMessrs. Marken and Wong vest in two components: 50% vest annually at a rate of one-third over a three-year vesting period on the annual anniversary of the grant date subject to Mr. Sampson’s continuous service to the Company, and 50% vest upon the achievement of certain financial metrics set by the Compensation Committee. Mr. Sampson’s 2019 stock award includes the opportunity for additional stock grants in the amount of 5,000 shares for each incremental amount by which the target financial metric is exceeded.after three years. | Named Executive Officer | | Named Executive Officer | | Percentage of Base Salary | | Number of Restricted Shares | | Number of Performance Stock Units | Greg P. Marken | | Greg P. Marken | | 75% | | 29,287 | | | 29,287 | | | Joe M. Wong | | Joe M. Wong | | 65% | | 16,885 | | | 16,884 | | Morgan Fields | | Morgan Fields | | 40% | | 14,601 | | | — | | | | Named Executive Officer | | Percentage of Base Salary | | Number of Restricted Shares | | L. Heath Sampson | | 100% | | 55,000 | | Greg P. Marken | | 50% | | 16,667 | | Ted J. Sanders | | 50% | | 12,222 | | |
Additional Executive Compensation Awards 20182020 Bonus for Successful AcquisitionCompletion of Carbon SolutionsMaster Supply Agreement
On March 1, 2019,August 12, 2020, the Compensation Committee approved a cash bonus payment to Mr. Marken of $35,250, contingent upon the completion of the Master Supply Agreement with Cabot Norit Americas, Inc. on September 30, 2020. On December 17, 2020, the Compensation Committee approved an additional cash bonus paymentspayment of $45,000 and $33,000$262,500 to Mr. Sampson. On February 24, 2021, the Compensation Committee approved an additional cash bonus payment of $40,625 and $22,500 to Messrs. Marken and Mr. Sanders,Wong, respectively. The cash bonuses werebonus was in recognition of efforts in 20182019 and 2020 leading to the successful acquisitioncompletion of Carbon Solutions and were paid in March 2019.the Master Supply Agreement with Cabot Norit Americas, Inc. on September 30, 2020. Other Aspects of Executive Employment In the event of a restatement of income, any overpayments of incentive pay made to executives based on such restatement of income may be reclaimed at the discretion of the Compensation Committee. ADES’ADES' Insider Trading Policy prohibits directors
and executives from entering into any transaction relating to hedging ADES securities, including zero-cost collars or forward-sale transactions. We maintainmaintained key person term insurance for our Former Chief Executive Officer in the amount of $5 million.million through his termination date of June 30, 2020. The policies may be assigned to the individuals upon termination of employment (other than for cause) whereupon the executive would be responsible for any premium payments. We maintain long term disability policies for executives of the Company for up to $174,000 per year. Executives are encouraged to own a number of shares of the Company'sour Common Stock equal to a value of at least one times thetheir annual base salary. Ownership is calculated considering holdings of restricted stock and PSU's, whether or not such holdings have vested, private holdings, shares held in retirement accounts and other shares attributed to the executive in accordance with Section 16 of the Exchange Act. Holding of options to purchase shares of our Common Stock also will be considered in the ownership calculation by adding the value of the spread of in-the-money options to the total value of other holdings. The Chief Executive Officer, Chief Financial Officer, and the General CounselMr. Marken of the Company met the executive equity ownership guidelines as of December 31, 2018.2020. Mr. Wong, a new NEO in 2019, and Ms. Fields, a new NEO in 2021, have generally a 3-year period in which to meet the executive equity ownership guidelines. So long as the stock ownership guidelines are met, executives may sell unrestricted stock and may exercise vested stock options and sell shares of the Company's Common Stock to pay for the exercise price and withholding tax, except as otherwise
provided for in the underlying stock option agreement. It is preferred that executives own shares of the Company's Common Stock for a period greater than twelve months before selling it. Executives are advised to seek pre-approval of any exercise of stock options or sale of shares of the Company'sour Common Stock at least 30 days in advance or the executive must be engaged in a pre-announced program sale in compliance with federal securities laws. All executive stock transactions must be made in compliance with our insider trading policy. Pursuant to Section 16(b) of the Exchange Act, executives leaving the Company are encouraged to hold their stock in the Company for at least six months after leaving the Company. The Company's Profit Sharing Retirement Plan ("401(k) Plan") is available to all eligible employees, including NEOs. Prior to 2017, we made matching contributions to each eligible employee’s account up to seven percent of the employee’s eligible compensation, and, at the discretion of the Board, could make contributions based on the profitability of the Company to those accounts. In 2018, we made our matching contributions in cash. No discretionary contributions were made to the 401(k) PlanBeginning in 2018, other than as discussed above. Beginning in 2017, the Company elected to make safe harbor nonelective contributions to eligible employees. Pursuant to the safe harbor nonelective contributions notice, we make contributions to each eligible employee's account in an amount equal to three percent of eligible compensation, and will continue to do so unless the 401(k) Plan is amended or terminated. Additionally, at the discretion of the Board, the Company may make contributions based on the profitability of the Company to those accounts. In 2020, we made our matching contributions in cash. No discretionary contributions were made to the 401(k) Plan in 2020 other than as discussed above. Employee and Company contributions to the 401(k) Plan are 100% vested.
Summary Compensation Table The following table presents information regarding compensation earned by or awards to our NEOs during fiscal years 20182020 and 2017:2019: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | Salary ($) | | Bonus ($) (1) | | Stock Awards ($) (2) | | Option Awards ($) (3) | | Non-Equity Incentive Plan Compensation ($) (4) | | All Other Compensation ($) (5) | | Total ($) | | | | | | | | | | | | | | | | | | Greg P. Marken (6) | | 2020 | | 341,539 | | | 75,875 | | | 103,985 | | | — | | | 129,375 | | | 8,550 | | | 659,324 | | Interim President and Chief Executive Officer, Treasurer | | 2019 | | 306,577 | | | — | | | 159,500 | | | — | | | 115,900 | | | 8,400 | | | 590,377 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Christine Bellino (7) | | 2020 | | 166,000 | | | — | | | — | | | — | | | 100,000 | | | 4,980 | | | 270,980 | | Former Chief Accounting Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Joe M. Wong | | 2020 | | 334,617 | | | 22,500 | | | 100,955 | | | — | | | 69,000 | | | 8,550 | | | 535,622 | | Chief Technology Officer | | 2019 | | 288,954 | | | — | | | 144,139 | | | — | | | 112,600 | | | 8,400 | | | 554,093 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | L. Heath Sampson | | 2020 | | 276,635 | | | 262,500 | | | 271,805 | | | — | | | — | | | 271,050 | | | 1,081,990 | | Former President, Chief Executive Officer and Director | | 2019 | | 518,270 | | | — | | | 608,300 | | | — | | | — | | | 30,275 | | | 1,156,845 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | Salary ($) | | Bonus ($) (1) | | Stock Awards ($) (2) | | Option Awards ($) (3) | | Non-Equity Incentive Plan Compensation ($) (4) | | All Other Compensation ($) (5) | | Total ($) | | | | | | | | | | | | | | | | | | L. Heath Sampson | | 2018 | | 500,000 |
| | — |
| | 608,327 |
| | — |
| | 425,750 |
| | 66,625 |
| | 1,600,702 |
| President and Chief Executive Officer | | 2017 | | 500,000 |
| | — |
| | 574,800 |
| | — |
| | 500,000 |
| | 82,121 |
| | 1,656,921 |
| | | | | | | | | | | | | | | | | | Greg P. Marken (6) | | 2018 | | 290,769 |
| | 45,000 |
| | 182,504 |
| | — |
| | 142,500 |
| | 8,250 |
| | 669,023 |
| Chief Financial Officer, Treasurer and Secretary | | 2017 | | 241,923 |
| | — |
| | 119,750 |
| | — |
| | 125,000 |
| | 8,100 |
| | 494,773 |
| | | | | | | | | | | | | | | | | | Ted Sanders | | 2018 | | 214,615 |
| | 33,000 |
| | 133,831 |
| | — |
| | 104,500 |
| | 8,250 |
| | 494,196 |
| General Counsel | | 2017 | | 193,808 |
| | — |
| | 95,800 |
| | — |
| | 100,000 |
| | 6,386 |
| | 395,994 |
| | | | | | | | | | | | | | | | | |
(1)Because our primary short-term incentive compensation arrangement for salaried employees ("STIP") has mandatory performance measures that must be achieved before there is any payout to NEOs, amounts paid under the STIP are shown in the Non-Equity Incentive Plan Compensation column of the table, rather than the Bonus column. Amounts earned in 20182020 represent bonuses paid to certain executives relating to the Carbon Solutions Acquisition.completion of the Master Supply Agreement. (2)The amounts in this column represent the aggregate grant date fair values of RSA awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, "Compensation-Stock Compensation" ("FASB ASC Topic 718"). These grant date fair values have been determined based on the assumptions and methodologies discussed in Note 616 of the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.2020. PSU awards are subject to market-based performance conditions relating to the relative placement of the Company’s total stockholder return ("TSR") for the three-year performance period based on the relative performance of the Company's TSR performance compared to the respective TSRs of a specified group of peer companies. The “Stock Award”table below presents the PSU awards for the fiscal year ended December 31, 2020 based on an earned percentage of 100% (grant date fair value disclosed above) and an earned percentage of 200%, which is the highest level of performance conditions that can be achieved. The difference between the "Stock Award" amounts in the table above representand the "PSU-if earned, target ($)" amounts in the table below represents the grant date fair values attributable to the RSA awards. | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | PSU - if earned, target ($) | | PSU - if earned, maximum ($) | Greg P. Marken (6) | | 2020 | | 56,326 | | | 112,652 | | | | | | | | | Joe M. Wong | | 2020 | | 54,685 | | | 109,370 | | L. Heath Sampson | | 2020 | | 147,235 | | | 294,470 | | | | | | | | |
(3)The amounts in this column represent the aggregate grant date fair values of stock options computed in accordance with FASB ASC Topic 718. (4)The amounts in this column represent the bonuses earned in the year under the STIP.
(5)The All other compensationOther Compensation amounts earned by each NEO are made up of the amounts in the table below: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Year | | Matching contributions to 401(k) ($) | | Severance ($) | | Other ($) (8) | | Total ($) | | | | | | | | | | | | Greg P. Marken (6) | | 2020 | | 8,550 | | | — | | | — | | | 8,550 | | | | 2019 | | 8,400 | | | — | | | — | | | 8,400 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Christine Bellino (7) | | 2020 | | 4,980 | | | — | | | — | | | 4,980 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Joe M. Wong | | 2020 | | 8,550 | | | — | | | — | | | 8,550 | | | | 2019 | | 8,400 | | | — | | | — | | | 8,400 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | L. Heath Sampson | | 2020 | | 8,550 | | | 262,500 | | | — | | | 271,050 | | | | 2019 | | 8,400 | | | — | | | 21,875 | | | 30,275 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | Name | | Year | | Matching contributions to 401(k) ($) | | Severance ($) | | Other ($) (7) | | Total ($) | L. Heath Sampson | | 2018 | | 8,250 |
| | — |
| | 58,375 |
| | 66,625 |
| | | 2017 | | 8,100 |
| | — |
| | 74,021 |
| | 82,121 |
| | | | | | | | | | | | Greg P. Marken | | 2018 | | 8,250 |
| | — |
| | — |
| | 8,250 |
| | | 2017 | | 8,100 |
| | — |
| | — |
| | 8,100 |
| | | | | | | | | | | | Ted Sanders | | 2018 | | 8,250 |
| | — |
| | — |
| | 8,250 |
| | | 2017 | | 6,386 |
| | — |
| | — |
| | 6,386 |
|
(6) On MarchEffective July 1, 2018,2020, Mr. Marken was appointed theInterim Chief FinancialExecutive Officer Secretary and Treasurer of the Company. Prior to that date he was the Company's Chief Financial Officer, Secretary and Treasurer. (7)Effective May 7, 2020, Ms. Bellino was appointed our Chief Accounting Officer and Secretary.Officer. She became our principal financial officer effective July 1, 2020. She retired from the Company effective March 31, 2021. (7) (8)The amounts in this column for Mr. Sampson relate to dividends paid on unvested participating RSA awards.
Equity Compensation Plans (Stock Incentive Plans) 2017 Omnibus Incentive Plan During 2017, the BoardCompany adopted the stockholder-approved 2017 Plan, which authorized the issuance of shares of Common Stock, restricted stock or other rights or benefits under the plan to any employee, director, or consultant of the Company or its subsidiaries. The Board approved the 2017 Plan in April 2017 and our stockholders approved the plan at the 2017 Annual Meeting. The purposes of the 2017 Plan are to attract and retain the best available personnel, to provide additional incentives to employees and consultants and to promote the success of the Company's business. The number of shares authorized for issuance under the 2017 Plan is limited to 2,000,000. The 2017 Plan will end 10 years after the date of its adoption, if not earlier terminated by the Board. It may be amended, modified or terminated at any time if and when it is advisable in the absolute discretion of the Board, although certain amendments are subject to approval of regulatory bodies and our stockholders. The Compensation Committee is the plan administrator of the 2017 Omnibus Incentive Plan. During 2018, 205,9982020, 315,383 RSA's were granted from the 2017 Plan. As of December 31, 2018, 1,762,7322020, 1,135,112 shares of Common Stock are available for issuance under the 2017 Plan. Grants of Plan-Based Awards The following table presents information regarding grants of Plan-based awards to our NEOs during the fiscal year ended December 31, 2018.2020. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Grant Date | | | | | | Estimated future payouts under equity incentive plan awards | | | | All other options awards: number of securities of underlying options (#) | | Exercise or base price of option awards ($/sh) | | Grant date fair value of stock and option awards (1) | Name | | | | | | | | | | Threshold (#) | | Target (#) | | Maximum (#) | | | | | Greg P. Marken | | 3/23/2020 | (2) | | | | | | | | | — | | | 9,130 | | | — | | | | | — | | | — | | | 47,659 | | | | 3/23/2020 | (3) | | | | | | | | | — | | | 9,129 | | | 18,258 | | | | | — | | | — | | | 56,326 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Joe M. Wong | | 3/23/2020 | (2) | | | | | | | | | — | | | 8,864 | | | — | | | | | — | | | — | | | 46,270 | | | | 3/23/2020 | (3) | | | | | | | | | — | | | 8,863 | | | 17,726 | | | | | — | | | — | | | 54,685 | | | | | | | | | | | | | | | | | | | | | | | | | | | L. Heath Sampson | | 3/23/2020 | (2) | | | | | | | | | — | | | 23,864 | | | — | | | | | — | | | — | | | 124,570 | | | | 3/23/2020 | (3) | | | | | | | | | — | | | 23,863 | | | 47,726 | | | | | — | | | — | | | 147,235 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | Grant Date | | Estimated future payouts under equity incentive plan awards | | All other options awards: number of securities of underlying options (#) | | Exercise or base price of option awards ($/sh) | | Grant date fair value of stock and option awards | Name | | | Threshold (#) | | Target (#) | | Maximum (#) | | | | L. Heath Sampson | | 3/23/2018 | (1) | — |
| | 55,555 |
| | — |
| | — |
| | — |
| | 608,327 |
| Greg P. Marken | | 3/23/2018 | (2) | — |
| | 16,667 |
| | — |
| | — |
| | — |
| | 182,504 |
| Ted J. Sanders | | 3/23/2018 | (2) | — |
| | 12,222 |
| | — |
| | — |
| | — |
| | 133,831 |
|
(1)The grant date fair value of a PSU is calculated using a Monte Carlo simulation model, and the aggregate grant date fair value represented in this column for PSU's is calculated based upon the target number of PSU's granted.(1) (2)This amount represents RSA's that have no threshold or maximum amounts. The RSA's vest in fullequal installments on March 23, 2021.2021, March 23, 2022 and March 23, 2023. Prior to vesting, the RSA's are subject to transfer restrictions and may be forfeited upon
termination of employment. The RSA's are eligible to accrue dividends prior to vesting and will receive payment of accrued dividends upon vesting. Holders of RSA's have no rights as stockholders of Common Stock, until such time as the RSA's are settled for shares of Common Stock as of the vesting date. | | (2) | This amount represents RSA's that have no threshold or maximum amounts. The RSA's vest in equal installments on March 23, 2019, March 23, 2020 and March 23, 2021. Prior to vesting, the RSA's are subject to transfer restrictions and may be forfeited upon termination of employment. The RSA's are eligible to accrue dividends prior to vesting and will receive payment of accrued dividends upon vesting. Holders of RSA's have no rights as stockholders of Common Stock, until such time as the RSA's are settled for shares of Common Stock as of the vesting date. |
(3)These amounts represent PSU's granted under our 2017 Plan. PSU's represent the right to receive, upon settlement of the PSU's after the completion of a three-year performance period ending December 31, 2022 a number of shares of our common stock that may be from 0% to 200% of the number of PSU's granted on the award date, depending on the extent to which our performance criteria have been achieved and the extent to which the PSU's have vested. The performance criteria for the PSU's are based on our total stockholder return ("TSR"), for the performance periods and the relative measure of our TSR performance compared to the specified group of peer companies. The PSU's will vest on March 10, 2023. The target amount represents the number of shares of common stock earned and to be issued upon settlement of the PSU's, assuming we achieve the target performance level established by our Compensation Committee. The threshold amount represents the number of shares of common stock earned and to be issued upon settlement of the PSU's, assuming we achieve the threshold performance level. The maximum amount represents the number of PSU's issued and the shares of common stock earned and to be issued upon settlement of PSU's, assuming we achieve the maximum performance level.
Outstanding Equity Awards at Fiscal Year End The following table provides information regarding outstanding RSA and PSU equity awards held by our NEO's as of December 31, 2018:2020: | | | | Stock awards | Name | | Name | | Number of shares that have not vested (#) | | Market value of shares that have not vested ($) (1) | | Equity incentive plan awards: number of unearned units that have not vested (#) | | | Equity incentive plan awards: market or payout value of unearned units that have not vested ($) (1) | Greg P. Marken | | Greg P. Marken | | 5,556 | | (2) | | 30,558 | | | — | | | | — | | | | | 9,810 | | (3) | | 53,955 | | | — | | | | — | | | | | | | | | | | | | | | | | 9,130 | | (4) | | 50,215 | | | 9,129 | | | (5) | | 50,210 | | | | Stock awards | | Name | | Number of shares that have not vested (#) | | | Market value of shares that have not vested ($) (1) | | Equity incentive plan awards: number of unearned units that have not vested (#) | | | Equity incentive plan awards: market or payout value of unearned units that have not vested ($) (1) | | L. Heath Sampson | | 24,000 |
| (2) | | 253,200 |
| | — |
| | — |
| | | | 25,000 |
| (3) | | 263,750 |
| | — |
| | — |
| | | | 60,000 |
| (4) | | 633,000 |
| | — |
| | — |
| | | | 55,555 |
| (5) | | 586,105 |
| | — |
| | — |
| | Greg P. Marken | | 8,334 |
| (6) | | 87,924 |
| | — |
| | — |
| | | | 16,667 |
| (7) | | 175,837 |
| | — |
| | — |
| | Ted Sanders | | 6,667 |
| (6) | | 70,337 |
| | — |
| | — |
| | Joe M. Wong | | Joe M. Wong | | 8,865 | | (3) | | 48,758 | | | — | | | | — | | | | 12,222 |
| (7) | | 128,942 |
| | — |
| | — |
| | 8,864 | | (4) | | 48,752 | | | 8,863 | | | (5) | | 48,747 | | |
(1) The market value of RSA's and PSU's that have not vested is calculated using the closing price of $10.55$5.50 of our Common Stock on December 31, 2018.2020. The market value of PSU's is calculated based upon an attainment level of the target amount. (2) These RSA's vested one-third on January 2, 2017, one-third on January 2, 2018 and one-third January 2, 2019. (3) These RSA's vested one-fourth on October 16, 2017, and one-fourth on October 16, 2018, and the remaining will vest one-fourth on October 16, 2019, and one-fourth on October 16, 2020.
(4) These RSA's will vest in full on March 23, 2020.
(5) These RSA's will vest in full on March 23, 2021.
(6)(3) These RSA's vested one-third on March 23, 2018 and one-third on March 23, 2019, and the remaining will vest one-third on March 23, 2020.
(7) These RSA's vested one-third on March 23, 2019, and the remaining will vest one-third on March 23, 2020, and one-third on March 23, 2021.2021 and the remaining will vest one-third on March 23, 2022.
(4) These RSA's vested one-third on March 23, 2021, and one-third will vest on March 23, 2022, and one-third on March 23, 2023. (5) These PSU's vest on March 23, 2023. The following tables provide information regardingPSU's are subject to a three-year performance period ending December 31, 2022. The award is reported at an earned percentage of 100%. There were no outstanding option awards held by our NEOs as of the fiscal year ended December 31, 2018: | | | | | | | | | | | | | | | | | | | Option awards | Name | | Grant Date | | Number of securities underlying unexercised options (#) exercisable | | Number of securities underlying unexercised options (#) unexercisable | | Option exercise price ($) | | Option expiration date | L. Heath Sampson | | 6/5/15 | | 300,000 |
| | — |
| | 13.87 |
| | 6/5/2020 | | | 10/16/16 | | 92,666 |
| | — |
| | 9.00 |
| | 12/31/2019 | | | 10/16/16 | | 92,666 |
| | — |
| | 10.00 |
| | 12/31/2020 |
2020.Option Exercises and Stock Vested for Fiscal Year End The following table provides information regarding options exercised and stock vested on an aggregate basis by our NEOs as of December 31, 2018:2020: | | | | | | | | | | | | | | | | Option awards | | Stock awards | Name | | Number of shares acquired on exercise (#) | | Value realized on exercise ($) | | Number of shares acquired on vesting (#) (1) | | Value realized on vesting ($) (1) | L. Heath Sampson (2) | | 92,666 |
| | 281,705 |
| | 53,665 |
| | 525,540 |
| Greg Marken (3) | | — |
| | — |
| | 6,939 |
| | 70,131 |
| Ted J Sanders (4) | | — |
| | — |
| | 3,534 |
| | 38,792 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option awards | | Stock awards | Name | | Number of shares acquired on exercise (#) | | Value realized on exercise ($) | | Number of shares acquired on vesting (#) (1) | | Value realized on vesting ($) (1) | Greg Marken (2) | | — | | | — | | | 14,627 | | | 76,353 | | | | | | | | | | | Joe M. Wong (2) | | — | | | — | | | 4,432 | | | 23,135 | | L. Heath Sampson (3) | | — | | | — | | | 179,419 | | | 889,158 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) The value realized on vesting and settlement of the RSA's and PSU's is computed by multiplying the number of shares of Common Stock issued upon the vesting and settlement of RSA's or settlement of PSU's by the per share closing market price of the underlying shares on the date of settlement, or, if the settlement date was not a normal market trading date, then on the last normal market trading date which preceded the settlement date. (2) The per share average market price used for the computation of the stock awards that vested and settled on January 2, 2018, February 28, 2018 and October 16, 2018 were $9.50, $9.64 and $10.62, respectively.March 23, 2020 was $5.22.
(3) The per share average market price used for the computation of the stock awards was $8.84 on January 12, 2018 for the vestingthat vested and settlement of RSA awards that were issued prior to Mr. Marken's appointment as Chief Accounting Officer. The per share average market price used for the computation of the stock awards was $10.95settled on March 23, 2018 for the vesting2020 and settlement of RSA awards thatJuly 9, 2020 were issued following Mr. Marken's appointment to Chief Accounting Officer. (4) The per share average market price used for the computation of the stock awards was $11.42 on March 29, 2018 for vesting$5.22 and settlement of RSA awards that were issued prior to Mr. Sanders's appointment as General Counsel. The per share average market price used for the computation of the stock awards was $10.95 on March 23, 2018 for the vesting and settlement of RSA awards that were issued following Mr. Sanders's appointment as General Counsel.$4.79, respectively.
Pension Benefits No retirement payments or benefits were paid to any NEO of the Company in the fiscal years ended December 31, 20182020 and 20172019 except those matching contributions paid under the 401(k) Plan, which is a tax-qualified defined contribution plan. Nonqualified Deferred Compensation The Company does not currently have any nonqualified deferred compensation plans that apply to the NEOs nor are any such plans contemplated at this time. Employment Contracts and Termination of Employment and Change-in-Control Arrangements Potential Payments upon Termination or Change-in-Control The amounts in this table assume the Company elects a one-year compliance period for the restrictive covenants as described below, except in the case of termination due to death or permanent disability, if a Change-in-Control event or termination of employment that triggers severance payments occurred on December 31, 2018.2020. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Cash Severance Payments ($) | | Cash Bonus Payments ($) (1) | | Vesting of Equity Awards ($) (1) | | All Other Compensation ($) | | Total ($) | Greg P. Marken | | 460,000 | | | 345,000 | | | 184,938 | | | 32,666 | | | 1,022,604 | | Christine Bellino (2) | | — | | | — | | | — | | | — | | | — | | Joe M. Wong | | 306,000 | | | — | | | 146,256 | | | 22,319 | | | 474,575 | | L. Heath Sampson (3) | | — | | | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | Name | | Cash Severance Payments ($) | | Cash Bonus Payments ($) (a) | | Vesting of Equity Awards ($) (a) | | All Other Compensation ($) | | Total ($) | L. Heath Sampson | | 500,000 |
| | 500,000 |
| | 1,736,055 |
| | 30,811 |
| | 2,766,866 |
| Greg P. Marken | | 300,000 |
| | 150,000 |
| | 263,761 |
| | 30,811 |
| | 744,572 |
| Ted J. Sanders | | 220,000 |
| | 110,000 |
| | 199,279 |
| | 30,811 |
| | 560,090 |
|
(a)(1) In the event of a termination due to death or permanent disability, only cash bonus payments and vesting of equity awards are paid.
(2) Ms. Bellino retired as our Chief Accounting Officer effective April 1, 2021. Based on Ms. Bellino's employment agreement there are no further payments upon termination. (3) Mr. Sampson resigned as our President and Chief Executive Officer effective on June 30, 2020. Upon such resignation and Mr. Sampson’s execution of a release, he was entitled to certain payments discussed above. There are no further payments. Employment Agreements L. Heath Sampson and Greg P. Marken We have executed employment agreements with all of our named executive officers. Each of the employment agreements generally contain provisions related to the position, duties, authority, obligations, compensation and benefits of the respective executive officer, including the obligation of the NEO to devote full time to the fulfillment of his/her obligations. Under each of the employment agreements, each of our NEOs is subject to customary provisions relating to inventionsMessrs. Sampson and confidential subject matter developed by such NEO, including provisions that relate to the assignment of such inventions and confidential subject matter to the Company and that copyright works are "work for hire." Certain restrictive obligations related to confidential subject matter will survive the termination of an NEO’s employment with the Company.Marken. In 2014, we amended the employment agreements of our existing executive officers at the time (the "2014 Amendment"). The 2014 Amendment clarifies the Company's and the executive officer's obligations in the event of death, disability or termination of employment. The amendments also contain certain covenants addressing non-competition, non-solicitation and non-divergence. Similarly, our executive officers hired after 2014 have executed a rider (the “Rider”"Rider") to their employment agreements that contain provisions and covenants similar to those contained in the 2014 Amendment. Pursuant to the terms of the employment agreements, as amended, upon termination of employment we must pay the terminated executive his or her base salary and other accrued benefits through the termination date. We must also pay additional amounts depending upon whether the termination was for or without "Cause" or "Good Reason," or whether the termination was for or without Cause or Good Reason following a "Change in Control."
If we terminate the executive’sexecutive's employment without Cause or if the executive resigns for Good Reason, we must pay the executive 12 months base salary. If we terminate the executive’sexecutive's employment without Cause or if the executive resigns for Good Reason within 12 months following a Change in Control, we must pay 12 months base salary and the pro-rated portion of short term incentive cash bonuses that would have been earned if the executive had been employed for the full year as well as pay in stock the value of certain unvested equity awards. For purposes of the 2014 Amendment, "Cause" means one or more of the following, where such conduct has had or is reasonably likely to have a material detrimental effect on the Company or a related person: (i) dishonesty, willful misconduct, or material breach of the Company’sCompany's Code of Conduct; (ii) felony conviction of a crime involving dishonestly, breach of trust or physical harm to any person; or (iii) a breach of any fiduciary duty.
For purposes of the Rider, "Cause" means (i) the failure by an executive to substantially perform the essential functions of executive’sexecutive's duties or obligations in a satisfactory manner or material breach of any written agreement with us or an affiliate; (ii) dishonesty, willful misconduct, or material breach of our Code of Ethics and Business Conduct, knowing violation of any federal or state securities or tax laws, or any misconduct that is, or is reasonably likely to be, materially injurious to us or an affiliate; (iii) conviction of or plea of guilty or no contest to a crime involving dishonesty, breach of trust or physical harm to any person; or (iv) a breach of any fiduciary duty and such conduct has had or is reasonably likely to have a material detrimental effect on us or a related person. For purposes of all of the employment agreements of our executive officers, "Good Reason" means a material (and permanent in the case of the Riders) reduction in the executive’sexecutive's compensation, a material diminution in authority, duties or responsibilities, or a relocation of more than 50 miles, subject to our right to cure. A "Change in Control" means a change in our ownership or control effected by a direct or indirect acquisition of more than 50% of our total combined voting power, replacement of our directors by directors whose appointment or election is not endorsed by our directors serving immediately prior to such replacement, or a change in the ownership of a substantial portion of our assets. Christine Bellino We have an executed employment agreement with Ms. Bellino ("Bellino Agreement"), effective May 1, 2020. This agreement contains provisions related to her position, duties, authority, obligations, compensation and benefits. Under the terms of the Bellino Agreement, Ms. Bellino receives a standard package of employee benefits and is also guaranteed a bonus under the Company's STIP, which is equal to 40% of her base salary. Further, under the Bellino Agreement there will be no severance payment obligation upon termination of employment. Joe M. Wong Mr. Wong, an employee of Carbon Solutions, became our employee upon closing of the Carbon Solutions Acquisition and we continue to employee him on the terms of his original employment agreement, as amended, with Carbon Solutions (the "Wong Agreement"). The Wong Agreement contains provisions related to his position, duties, authority, obligations, compensation and benefits. Under the terms of the Wong Agreement, he signed a separate confidentiality agreement and prevents him from competing with Carbon Solutions during the term of his employment. Mr. Wong receives a standard package of employee benefits under the Wong Agreement and is also eligible to receive an incentive bonus and to participate in a management equity program. Under the terms of the Wong Agreement, Mr. Wong is eligible to receive up to 50% of his base salary as a bonus based on achieving certain performance targets established by the Company. Mr. Wong and Carbon Solutions also entered into an Addendum to Employment Agreement, effective as of May 30, 2019 (the "Wong Addendum"), pursuant to which Carbon Solutions agreed to give Mr. Wong certain benefits in the event of his termination without “Cause”. These benefits included one year of severance at Mr. Wong’s then-current base salary rate, COBRA payments on behalf of Mr. Wong and his spouse for one year or until he becomes covered under another health care plan, immediate vesting of all of Mr. Wong’s time-based restricted stock awards in the Company, and six months of outplacement services. For purposes of the Wong Addendum, "Cause" means one or more of the following: (a) Mr. Wong’s failure to substantially perform his essential duties or obligations in a satisfactory manner; (b) Mr. Wong’s material breach of any written agreement between him and the Company; (c) evidence of Mr. Wong’s dishonesty, willful misconduct or material breach of the Carbon Solutions’ code of conduct, including its insider trading policy, or a knowing violation of any federal or state securities or tax laws or any misconduct that is, or is reasonably likely to be, materially injurious to Carbon Solutions, monetarily or otherwise; or (d) Mr. Wong’s conviction of, or plea of guilty or no contest, to a crime involving dishonesty, breach of trust or physical harm to any person. Morgan Fields We have an executed employment agreement with Ms. Fields ("Fields Agreement"), effective March 1, 2021. This agreement contains provisions related to her position, duties, authority, obligations, compensation and benefits. Under the terms of the Fields Agreement, Ms. Fields receives a standard package of employee benefits and is also eligible to receive an incentive bonus and to participate in a management equity program. Under the terms of the Fields Agreement, Ms. Fields is eligible to receive up to 40% of her base salary as a bonus based on achieving certain performance targets established by the Company. The Fields Agreement is for a period of up to one year, subject to renewal.
PROPOSAL THREE RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Our Audit Committeehas appointed Moss Adams LLP ("Moss Adams") to be the Company’sCompany's independent registered public accounting firm for the fiscal year ending December 31, 2019.2021. Moss Adams has served as the Company’sCompany's independent registered public accounting firm since 2017, including the fiscal year ended December 31, 2017. Stockholder ratification of the Audit Committee’sCommittee's selection of Moss Adams as our independent registered public accounting firm as requested in Proposal 3 is not required by our bylaws or otherwise. The Board is submitting this proposal to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain this firm. We anticipate that a representative of Moss Adams will be available at the Annual Meeting to respond to stockholder questions and will have the opportunity to make a statement at that time if the representative desires to do so. Additional information about Audit Fees and Audit Committee Approval of Services can be found under the Independent Registered Public Accounting Firm section of this Proxy Statement. Board Recommendation Our Board recommends a vote "FOR" the ratification of the Audit Committee's appointment of Moss Adams LLP as the company'sCompany's independent registered public accounting firm for the fiscal year ending December 31, 2019.2021.
REPORT OF THE AUDIT COMMITTEE The Audit Committee’sCommittee's role and functions are described under the "Corporate Governance" section of this Proxy Statement.
The Audit Committee held nineten meetings in 2018.2020. The Audit Committee has (i) reviewed and discussed the Company’sCompany's audited financial statements for the year ended December 31, 20182020 with the Company’sCompany's management; (ii) discussed with the Company’sCompany's current independent registered public accounting firm, Moss Adams, the matters required to be discussed by PCAOBPublic Company Accounting Oversight Board ("PCAOB") standards regarding communication with audit committees, including the overall scope and plans for their audits; and (iii) received the written disclosures and the letter from Moss Adams required by applicable requirements of the PCAOB regarding communications with the Audit Committee concerning independence and has discussed with Moss Adams such independence.
Based on the review and discussions with management, and the Company’sCompany's independent registered public accounting firm referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements as of December 31, 20182020 and 20172019 and for the fiscal years ended December 31, 20182020 and 20172019 be included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 20182020 (the "2018"2020 Form 10-K").
On April 5, 2019,8, 2021, the Audit Committee approved the engagement of Moss Adams to serve as the Company's independent registered public accounting firm to audit the Company’sCompany's financial statements for the fiscal year ending December 31, 2019.2021. This appointment for 20192021 was based on the Audit Committee’sCommittee's and management’smanagement's completion of a written evaluation of Moss Adams’Adams' performance which included, among other criteria, quality of services provided; sufficiency of the firm’sfirm's resources; communications and interaction; and independence, objectivity and professional skepticism.
Respectfully submitted, | | | | | | | | | | The Audit Committee: | J. Taylor Simonton, ChairpersonChairman | | Gilbert LiCarol Eicher | | R. Carter Pate |
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Effective November 16, 2017, Moss Adams combined with Hein & Associates, LLP ("Hein"), who had served as the Company's independent registered public accounting firm since 2015. As a result of this transaction, on November 16, 2017, Hein resigned as the independent registered public accounting firm for the Company. Concurrent with such resignation, the Audit Committee approved the engagement of Moss Adams as the independent registered public accounting firm for the Company for the fiscal year ended December 31, 2018.
There were no disagreements on matters of accounting principles or practices, financial statement disclosures or audit scope or procedures between the Company and Moss Adams during the most recent fiscal year or any subsequent year.
The following table summarizes the fees of Moss Adams, (and its predecessor, Hein), our independent registered public accounting firm, for the fiscal years ended December 31, 20182020 and 2017,2019, respectively. | | | | 2018 | | 2017 | | (in thousands) | | Moss Adams | | Moss Adams | | Hein | (in thousands) | | 2020 | | 2019 | | Audit fees (1) | | $ | 415 |
| | $ | 279 |
| | $ | 205 |
| Audit fees (1) | | $ | 522 | | | $ | 667 | | | Audit-related fees (2) | | 68 |
| | — |
| | 47 |
| Audit-related fees (2) | | — | | | — | | | Tax fees (3) | | — |
| | — |
| | — |
| Tax fees (3) | | — | | | — | | | All other fees (4) | | — |
| | — |
| | — |
| All other fees (4) | | — | | | — | | | | | $ | 483 |
| | $ | 279 |
| | $ | 252 |
| | $ | 522 | | | $ | 667 | | |
(1) This category includes fees related to the audit of our annual consolidated financial statements; the review of our quarterly consolidated financial statements; comfort letters, consents, and assistance with and review of documents filed with the SEC; and financial reporting consultation and research work billed as audit fees or necessary to comply with the standards of the Public Company Accounting Oversight Board (United States). | | (2) | This category consists of fees for audit-related services that are reasonably related to the performance of the audit or review of our consolidated financial statements. Audit-related fees include fees related to audits of employee benefit plans and compliance audits. |
| | (3) | This category consists of fees for tax compliance, tax advice and tax planning services. We did not pay our independent registered public accounting firm tax fees for services during the years ended December 31, 2017 and 2018. |
(2) This category consists of fees for audit-related services that are reasonably related to the performance of the audit or review of our consolidated financial statements. Audit-related fees include fees related to audits of employee benefit plans and compliance audits. We did not pay our independent registered public accounting firm audit-related fees for services during the years ended December 31, 2020 and 2019. (3) This category consists of fees for tax compliance, tax advice and tax planning services. We did not pay our independent registered public accounting firm tax fees for services during the years ended December 31, 2020 and 2019. (4) This category consists of fees for services that are not included in the above categories. We did not pay our independent registered public accounting firm any other fees for services during the years ended December 31, 20172020 and 2018.2019. There were no disagreements on matters of accounting principles or practices, financial statement disclosures or audit scope or procedures between the Company and Moss Adams during the most recent fiscal year or any subsequent year. AUDIT COMMITTEE APPROVAL OF SERVICES
The Audit Committee pre-approves all audit or non-audit services performed by our independent registered public accounting firm in accordance with Audit Committee policy and applicable law. The Audit Committee generally provides pre-approval of audit services and services associated with SEC registration statements, other SEC filings and responses to SEC comment letters (audit fees) and services related to internal control reviews, internal control reporting requirements and consultations with our management as to accounting or disclosure treatment of transactions or events and the impact of rules, standards or interpretations by the SEC and other regulatory or standard-setting bodies (audit-related fees) for each 12 month period within a range of approved fees. To avoid certain potential conflicts of interest, the law prohibits the Company from obtaining certain non-audit services from its independent registered public accounting firm. The Audit Committee has delegated authority to approve permissible services to its Chairperson.Chairman. The ChairpersonChairman reports such pre-approvals to the full Audit Committee at its next scheduled meeting. The Audit Committee ChairpersonChairman pre-approved 100% of the services provided by the independent registered public accounting firm in 2018.2020. None of the services of the independent registered public accounting firms in 20182020 were of the type specified in Rule 2-01(c)(7)(i)(C) of Regulation S-X.
PROPOSAL FOUR APPROVAL OF THE SECONDFOURTH AMENDMENT TO THE COMPANY'S TAX ASSET PROTECTION PLAN The Board is asking stockholders to approve the Second Amendment Tax Asset Protection Plan, as amended on April 6, 2018, and April 5, 2019 and April 8, 2020 (the "TAPP"). If our stockholders do not approve the TAPP at the 20192021 Annual Meeting, the TAPP will expire on December 31, 2019.2021. Background We believe that we have valuable tax attributes which are significant assets of the Company. As of December 31, 2018,2020, we had several domestic tax attributes, including federal net operating losses and general business credit carry-overs of approximately $104.6$93.9 million (the "Tax Assets"). Under the Internal Revenue Code and regulations promulgated by the U.S. Treasury Department, the Company may carry forward or otherwise utilize these Tax Assets in certain circumstances to offset any current and future taxable income and thus reduce the Company’s federal income tax liability, subject to certain requirements and restrictions. To the extent that the Tax Assets do not otherwise become limited, the Company believes that it will have available a significant amount of Tax Assets in future years, and therefore these Tax Assets could be a substantial asset to the Company. Our ability to use the Tax Assets could be substantially limited or delayed, however, if we experience an "ownership change," as defined in Section 382 of the Internal Revenue Code. In general, an ownership change occurs if there is a cumulative change in the ownership of the Company by 5% stockholders"5- percent shareholders" (as defined for tax purposes)purposes of Section 382 of the Internal Revenue Code) that exceeds 50 percentage points over an applicable testing period (which is generally a rolling three-year period.period). Accordingly, on May 5, 2017, after consultation with the Company’s legal and tax advisors, the Board adopted the TAPP in order to protect the Company’s ability to utilize its Tax Assets and on April 6, 2018, April 5, 2019, April 8, 2020 the Board amended the TAPP to extend the expiration thereof and on April 5, 20199, 2021 the Board again amended the TAPP to further extend the expiration thereof. Calculating whether an "ownership change" has occurred is subject to uncertainty. This uncertainty arises from the complexity and ambiguity inherent in Section 382 of the Internal Revenue Code, as well as limitations on the knowledge that any publicly traded company can have about the ownership of and transactions in its securities. We have analyzed the information available, along with various scenarios of possible future changes in ownership. In light of this analysis, we believe that, in the absence of the TAPP, it is possible that we could undergo a subsequent "ownership change" under Section 382 of the Internal Revenue Code, which would substantially reduce our ability to utilize the Tax Assets. We believe the implementationcontinuation of the TAPP will serve the interests of all stockholders given the size of the Tax Assets and the potential loss of value should changes in our stock ownership occur that are sufficient to cause a 50 percentage point or greater "ownership change." The TAPP is intended to act as a deterrent to any person acquiring beneficial ownership of 4.99% or more of the Company’s outstanding Common Stock without the approval of the Board. Stockholders who beneficially owned 4.99% or more of the Company’s outstanding Common Stock upon execution of the TAPP will not trigger the TAPP so long as they do not acquire beneficial ownership of additional shares of Common Stock. The Board may, in its sole discretion, also exempt any person from triggering the TAPP. If the stockholders do not approve the TAPP, the TAPP will expire on December 31, 2019.2021. If the stockholders approve the TAPP, it will expire on the earlier of (a) December 31, 2020,2022, (b) the time at which the Rights (described below) are redeemed pursuant to the TAPP, (c) the time at which the Rights are exchanged in full pursuant to the TAPP, (d) the effective date of the repeal of both Section 382 and Section 383 of the Internal Revenue Code, or any successor provisions or replacement provisions, if the Board determines that the TAPP is no longer necessary for the preservation of tax benefits or (e) the beginning of a taxable year of the Company for which the Board determines that the Company has or will have no Tax Assets. Summary of Terms of the TAPP The following description of the terms of the TAPP does not purport to be complete and is qualified in its entirety by reference to the TAPP, which is attached as Annex A and is incorporated herein by reference. We urge you to read carefully the TAPP in its entirety, as the discussion below is only a summary. The Rights. On May 5, 2017, the Board declared a dividend of one preferred share purchase right (each, a "Right") for each outstanding share of Common Stock to stockholders of record as of the close of business on May 22, 2017. One Right is also issued together with each share of Common Stock issued after May 22, 2017 but before the Distribution Date (as defined below) and, in certain circumstances, after the Distribution Date. Subject to the terms, provisions and conditions of the TAPP, if
the Rights become exercisable, each Right would initially represent the right to purchase from the Company one ten-thousandth of a share of the Company’s Series B Junior Participating Preferred Stock, par value $0.001 per share (the "Series B Preferred Stock") for a purchase price of $50.00 (the "Purchase Price"). If issued, each fractional share of Series B Preferred Stock would
give the stockholder approximately the same dividend, voting and liquidation rights as does one share of Common Stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company, including, without limitation, any dividend, voting or liquidation rights. Initial Exercisability. The Rights will not be exercisable until the earlier of (i) ten business days after a public announcement that a person has become an “Acquiring Person”"Acquiring Person" by acquiring beneficial ownership of 4.99% or more of the Company’s outstanding Common Stock, or, in the case of a person that had beneficial ownership of 4.99% or more of the Company’s outstanding Common Stock upon execution of the TAPP, by obtaining beneficial ownership of additional shares of Common Stock or (ii) ten business days (or such later date as may be specified by the Board prior to such time as any person becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in such person becoming an Acquiring Person. The date that the Rights become exercisable is referred to as the "Distribution Date." Until the Distribution Date, Common Stock certificates or the ownership statements issued with respect to uncertificated shares of Common Stock will evidence the Rights. Any transfer of shares of Common Stock prior to the Distribution Date will also constitute a transfer of the associated Rights. After the Distribution Date, separate rights certificates will be issued and the Rights may be transferred other than in connection with the transfer of the underlying shares of Common Stock unless and until the Board has determined to effect an exchange pursuant to the TAPP (as described below). Flip-In Event. In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficially owned by the Acquiring Person (which will thereupon become null and void), will thereafter have the right to receive upon exercise of a Right and payment of the Purchase Price, a number of shares of Common Stock having a market value of two times the Purchase Price. Redemption. At any time until a person becomes an "Acquiring Person,"Person", the Board may redeem the Rights in whole, but not in part, at a price of $0.00001 per Right (the "Redemption Price"). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. Exchange. At any time after a person becomes an Acquiring Person, the Board may exchange the Rights (other than Rights that have become null and void), in whole or in part, at an exchange ratio of one share of Common Stock, or a fractional share of Series B Preferred Stock (or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences and privileges) of equivalent value, per Right (subject to adjustment). Immediately upon an exchange of any Rights, the right to exercise such Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of Common Stock (or fractional share of Series B Preferred Stock or of a share of a similar class or series of the Company’s preferred stock having similar rights, preferences and privileges) equal to the number of such Rights held by such holder multiplied by the exchange ratio. The Board shall not be empowered to effect such exchange at any time after an Acquiring Person becomes the beneficial owner of 50% or more of the Company’s outstanding Common Stock. Expiration. The Rights and the TAPP will expire on the earlier of (i) the close of business on the earlier of (a) December 31, 2020,2022, or (b) December 31, 20192021 if stockholder approval has not been obtained prior to such date, (ii) the time at which the Rights are redeemed pursuant to the TAPP, (iii) the time at which the Rights are exchanged in full pursuant to the TAPP, (iv) the effective date of the repeal of both Section 382 and Section 383 of the Internal Revenue Code, or any successor provisions or replacement provisions, if the Board determines that the TAPP is no longer necessary for the preservation of tax benefits or (v) the beginning of a taxable year of the Company for which the Board determines that the Company has or will have no tax benefits. Anti-Dilution Provisions. The Board may adjust the Purchase Price, the number of shares of Series B Preferred Stock or other securities or assets issuable and the number of outstanding Rights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a reclassification of the Series B Preferred Stock or Common Stock. With certain exceptions, no adjustments to the Purchase Price will be required until cumulative adjustments amount to at least 1% of the Purchase Price. Amendments. For so long as the Rights are redeemable, the Board may supplement or amend any provision of the TAPP in any respect without the approval of the holders of the Rights. From and after the time the Rights are no longer redeemable, the
Board may supplement or amend the TAPP only to cure an ambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the TAPP which the Company may deem necessary or desirable, but only to the extent that those changes do not impair or adversely affect any Rights holder (other than an Acquiring Person or any Affiliate or Associate of an Acquiring Person or certain of their transferees) and do not result in the Rights again becoming redeemable or the TAPP again becoming amendable other than in accordance with this sentence.
Certain Considerations Related to the TAPP Our Board believes that protecting the Tax Assets is in the Company’s and our stockholders’ best interests. Nonetheless, we cannot eliminate the possibility that changes in our stock ownership will occur sufficient to cause an "ownership change" even if the TAPP is approved. You should consider the factors below when making your decision. Future Use and Amount of the Tax Assets is Uncertain. Our use of the Tax Assets depends on our ability to generate taxable income in the future. We cannot assure you whether we will have taxable income in any applicable period or, if we do, whether such income will exceed any potential Section 382 limitation and therefore we cannot assure you that we will realize the full value of the Tax Assets. Potential Challenge to the Tax Assets. The amount of the Tax Assets has not been audited or otherwise validated by the Internal Revenue Service (the "IRS"). The IRS could challenge the amount of the Tax Assets, which could result in an increase in our liability for income taxes. In addition, determining whether an "ownership change"“ownership change” has occurred is subject to uncertainty, both because of the complexity and ambiguity of the Section 382 provisions and because of limitations on the knowledge that any publicly traded company can have about the ownership of, and transactions in, its securities on a timely basis. Therefore, we cannot assure you that the IRS or other taxing authority will not claim that we experienced an "ownership change"“ownership change” and attempt to reduce the benefit of the Tax Assets even if the TAPP is in place. Continued Risk of Ownership Change. Although the TAPP is intended to diminish the likelihood of an "ownership change,"change" under Section 382 of the Internal Revenue Code, we cannot assure you that it will be effective. The amount by which our ownership may change in the future could, for example, be affected by purchases and sales of stock by stockholders and new issuances or repurchases of stock by us, should we choose to do so. Potential Effects on Liquidity. The TAPP is intended to deter persons or groups of persons from acquiring beneficial ownership of shares of our Common Stock in excess of the specified limitation. A stockholder’s ability to dispose of our Common Stock may be limited if the TAPP reduces the number of persons willing to acquire our Common Stock or the amount they are willing to acquire. Potential Impact on Value. The TAPP could negatively impact the value of our Common Stock by deterring persons or groups of persons from acquiring shares of our Common Stock, including in acquisitions for which some stockholders might receive a premium above market value. Anti-Takeover Effect. Our Board adopted the TAPP to diminish the risk that our ability to use the Tax Assets to reduce potential federal income tax obligations becomes limited. Nonetheless, the TAPP may have an “anti-takeover effect”"anti-takeover effect" because it will deter a person or group of persons from acquiring beneficial ownership of 4.99% or more of our Common Stock or, in the case of persons or persons that already own 4.99% or more of our Common Stock, from acquiring any additional shares of our Common Stock. The TAPP could discourage a merger, tender offer or accumulations of substantial blocks of shares. Board Recommendation The Board recommends that you vote "FOR" the approval of the Company’s SecondFourth Amendment of the Tax AssetAttributes Protection Plan.
DELINQUENT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE16(A) REPORTS Section 16(a) of the Exchange Act requires our officers, directors, and persons who beneficially own more than 10% of a registered class of our equity securities to file reports of ownership with the SEC. Officers, directors and greater than 10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.
For the fiscal year ended December 31, 2018, there were no persons subject to Section 16(a) beneficial ownership reporting in which a late report was filed. The Company is not aware of any unreported transactions for 2018.2020.
OTHER MATTERS The Board knows of no other business to be presented at the Annual Meeting. If other matters properly come before the Annual Meeting, to the extent permitted by law, the persons named in the accompanying form of proxy intend to vote on such other matters in accordance with their best judgment. PROPOSALS OF STOCKHOLDERS FOR PRESENTATION AT THE NEXT ANNUAL MEETING OF STOCKHOLDERS We anticipate that the next Annual Meeting of Stockholders for the Company will be held in June 2020.2022. Any stockholder of record who desires to submit a proper proposal for inclusion in the proxy material related to the next Annual Meeting of Stockholders must do so in writing in care of Greg P. Marken, Chief Financial OfficerTed Sanders, General Counsel and Secretary, at 640 Plaza Drive, Suite 270, Highlands Ranch, Colorado 801298051 E. Maplewood Ave., Ste. 210, Greenwood Village 80111 no later than December 31, 2019.2021. If a stockholder intends to submit a proposal at the meeting that is not included in our Proxy Statement, and the stockholder fails to notify us prior to March 15, 20202022 of such proposal, then to the extent permitted by law, the proxies appointed by our management would be allowed to use their discretionary voting authority when the proposal is raised at the Annual Meeting, without any discussion of the matter in the Proxy Statement. The stockholder must disclose, among other items, certain information related to the business to be proposed at the meeting, its beneficial ownership in the Company and whether it is acting in concert with other stockholders or interested parties. For a complete list of information that stockholders must provide, see Section 2.03 of the Company's bylaws. ADDITIONAL INFORMATION We filed our Annual Report on Form 10-K for the fiscal year ended December 31, 20182020 with the SEC on March 18, 2019.10, 2021. Our Annual Report is being made available to our stockholders on or about April 29, 2019concurrently with this Proxy Statement and does not form part of the proxy solicitation material. It is available free of charge at the SEC's web site at www.sec.gov. Upon written request by a stockholder, we will mail, without charge, a copy of the 20182020 Form 10-K, including the financial statements and financial statement schedules, but excluding exhibits to the 20182020 Form 10-K. Exhibits to the 20182020 Form 10-K are available upon payment of a reasonable fee, which is limited to our expenses in furnishing the requested exhibit. Such requests may be made by writing to our Corporate Secretary at the following address or telephone number: Advanced Emissions Solutions, Inc. Attn: Corporate Secretary 640 Plaza Drive, Suite 2708051 E. Maplewood Ave., Ste. 210
Highlands Ranch, Colorado 80129Greenwood Village 80111
Telephone: 888-822-8617 In addition, if you have any questions about the proposals, you may contact: Alpha IR Group Chris Hodges or Ryan Coleman 312-445-2870 ades@alpha-ir.com WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any of the information on file with the SEC at the SEC’sSEC's public reference room, located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800- SEC-0330 for further information on the public reference room. Our SEC filings are also available on the SEC’sSEC's web site located at http://www.sec.gov, and certain filings are available on the Company’sCompany's web site at www.advancedemissionssolutions.com. If you would like to request documents from us, please do so by June 6, 20194, 2021 to receive them before the Annual Meeting. We will send requested documents by first-class mail within one business day after receiving the request. You should rely only on the information contained in this Proxy Statement to vote on the Annual Meeting proposals. No one has been authorized to provide you with information that is different from what is contained in this Proxy Statement. This Proxy Statement is dated April 29, 2019.[ ], 2021. You should not assume the information contained in this Proxy Statement is accurate as of any date other than this date, and the mailing of this Proxy Statement to stockholders shall not imply information is accurate as of any other date.
| | | | | | | BY ORDER OF THE BOARD OF DIRECTORS |
| | | | | | | | | | | | | By: | | /s/ Greg P. Marken | | | | Greg P. Marken | | | | Interim Chief FinancialExecutive Officer Treasurer and SecretaryTreasurer |
Dated: April 29, 2019[ ], 2021
SECONDFOURTH AMENDMENT TO
TAX ASSET PROTECTION PLAN
This SECONDFOURTH AMENDMENT TO TAX ASSET PROTECTION PLAN (this “Amendment”"Amendment") is entered into as of April 5, 2019,9, 2021, by and between Advanced Emissions Solutions, Inc., a Delaware corporation (the “Company”"Company"), and Computershare Trust Company, N.A., a federally chartered trust company (the “Rights Agent”"Rights Agent"). All capitalized terms used herein and not otherwise defined herein shall have the meaning(s) ascribed to them in that certain Tax Asset Protection Plan dated as of May 5, 2017, by and between the Company and the Rights Agent, as amended by the First Amendment to Tax Asset Protection Plan, dated as of April 6, 2018, (the “TAPP”the Second Amendment to Tax Asset Protection Plan, dated as of April 5, 2019 and the Third Amendment to Tax Asset Protection Plan, dated as of April 8, 2020 (collectively, the "TAPP"). RECITALS WHEREAS, the Company and the Rights Agent are parties to the TAPP; and WHEREAS, pursuant to Section 26 of the TAPP, the Company and the Rights Agent desire to amend the TAPP as set forth in this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and the mutual agreements herein set forth, the parties hereto hereby agree as follows: 1.Amendment of Section 1(w). The definition of “Final"Final Expiration Date”Date" set forth in Section 1(w) of the TAPP is hereby amended and restated to read in its entirety as follows: “"(w) “"Final Expiration Date”" shall mean the Close of Business on the earlier of (i) December 31, 20202022 or (ii) December 31, 20192021 if Stockholder Approval has not been obtained prior to such date.”"
2.Amendment of Exhibit B (Form of Rights Certificate). The introductory paragraph of Exhibit B to the TAPP is hereby deleted and replaced with the following: “"NOT EXERCISABLE AFTER THE EARLIER OF (I) DECEMBER 31, 20202022 OR (II) DECEMBER 31, 2019 if Stockholder Approval has not been obtained prior to such date,2021 IF STOCKHOLDER APPROVAL HAS NOT BEEN OBTAINED PRIOR TO SUCH DATE, OR SUCH EARLIER DATE AS PROVIDED BY THE TAX ASSET PROTECTION PLAN. THE RIGHTS ARE SUBJECT TO REDEMPTION AND EXCHANGE AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE TAX ASSET PROTECTION PLAN. UNDER CERTAIN CIRCUMSTANCES AS SET FORTH IN THE TAX ASSET PROTECTION PLAN, RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE TAX ASSET PROTECTION PLAN) MAY BECOME NULL AND VOID.”"
3.Amendment of Exhibit C (Summary of Rights). Exhibit C to the TAPP is hereby amended in that the section titled “Expiration”"Expiration" is deleted and replaced with the following: “"Expiration. The Rights and the Plan will expire on the earlier of (i) the Close of Business on the earlier of (a) December 31, 20202022 or (b) December 31, 20192021 if Stockholder Approval has not been obtained prior to such date, (ii) the time at which the Rights are redeemed pursuant to the Plan, (iii) the time at which the Rights are exchanged in full pursuant to the Plan, (iv) the effective date of the repeal of both Section 382 and Section 383 of the Internal Revenue Code, or any successor provisions or replacement provisions, if the Board determines that the Plan is no longer necessary for the preservation of Tax Benefits or (v) the
beginning of a taxable year of the Company for which the Board determines that the Company has or will have no Tax Benefits.”" 4.Agreement as Amended. The term “Agreement”"Agreement" as used in the TAPP shall be deemed to refer to the TAPP as amended. Except as set forth herein, the TAPP shall remain in full force and effect and otherwise shall be unaffected hereby, and each of the Company and the Rights Agent shall continue to be subject to its terms and conditions. 5.Severability. If any term, provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that if such excluded terms, provisions, covenants or restrictions shall adversely affect the rights, immunities, liabilities, duties, responsibilities or obligations of the Rights Agent, then the Rights Agent shall be entitled to resign immediately.
6.Governing Law. This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made and to be performed entirely within such State. 7.Counterparts. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A facsimile or .pdf signature delivered electronically shall constitute an original signature for all purposes. 8.Descriptive Headings. Descriptive headings of the several Sections of this Amendment are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be duly executed as of the date first above written. | | | | | | | | | | | | | | | | | ADVANCED EMISSIONS SOLUTIONS, INC. | | | By: | | /s/ Greg Marken | | | | | Name: Greg Marken | | | | | Title: Interim Chief Executive Officer | | | | | | | | | | | | | ADVANCED EMISSIONS SOLUTIONS, INC. | | | By: | | /s/ Ted Sanders | | | | | Name: Ted Sanders | | | | | Title: General Counsel | | | | | | | | | | | | | COMPUTERSHARE TRUST COMPANY, N.A. | | | By: | | /s/ Kathy Heagerty | | | | | Name: Kathy Heagerty | | | | | Title: Vice President & Manager, Client Management | | | | | |
Directions to the Denver Marriott Tech Center located at 4900 S. Syracuse Street, Denver, Colorado 80237
Take Highway I-25 north to Belleview exit, exit East on Belleview. Left at first light, S Syracuse, proceed to Hotel entrance on left.
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