SEC Form PRE 14A filed by Marine Products Corporation

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.    )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

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MARINE PRODUCTS CORPORATION

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11

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Whether or not you expect to attend the annual meeting, please sign, date and return the enclosed proxy card promptly. Alternatively, you may vote your proxy by telephone or over the Internet by following the instructions on your proxy card or Notice. If you decide to attend the meeting, you may, if you wish, revoke the proxy and vote your shares in person.

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TABLE OF CONTENTS

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MESSAGE FROM OUR CHIEF EXECUTIVE OFFICER

To our Stockholders,

On behalf of the Board of Directors, we are pleased to announce that we will hold our 2025 Annual Meeting of Stockholders on Tuesday April 22^nd, 2025, at 12:00 Noon.

2024 marked a continuation of the demand challenges we saw coming out of 2023. We responded with decisive cost-control measures and stayed the course with respect to our operating discipline and focus on high quality products. We were pleased with the cash generation of the business and finished the year with a highly liquid, debt-free balance sheet, even after returning a significant amount of capital to our investors.

Our net sales decreased to $237 million, our EPS to $0.50 and operating cash flow to nearly $30 million, however, we finished the year with over $50 million in cash and no debt. During 2024, our Board of Directors continued the Company’s regular quarterly cash dividends for the thirteenth consecutive year. We paid $19.4 million in regular quarterly dividends ($0.56 per share) and a special dividend of $24.3 million ($0.70 per share) during the second quarter, resulting in total cash dividends to shareholders of $43.7 million ($1.26 per share) in 2024. We view our dividend policy as a vital component of long-term stockholder value creation and will continue to assess our regular dividend as well as other means of distributing excess capital to our stockholders.

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Domestic boat manufacturers have been dealing with reduced order flow as dealers have worked to reduce excess inventories. The boat industry has also grappled with escalating interest rates, which substantially increased financing costs for consumers looking to secure loans for their purchases. This, coupled with economic and political uncertainties, weighed on end-market demand. We are pleased to say that despite a challenging backdrop, we remained solidly profitable, made great progress on reducing dealer inventory and are cautiously optimistic that the worst is behind us.

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Our brands continue to be some of the best performing in the industry. During 2024, within its categories and size range, Chaparral’s retail market share ranked number one. During this same time, Robalo held the fourth highest retail market share in its size range. We are proud of these accomplishments and the consistency of the strong market share results within our product lines in recent years. Another consistent accomplishment relates to the recent announcement that both Chaparral and Robalo won the CSI Award for customer satisfaction for the 18th consecutive year.

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As we push ahead into 2025, we are staying the course focused on those elements of our business we can control until the external environment improves. In addition, we have ample cash reserves to invest in potential acquisitions. We will continue to assess potential targets with the same financial, operational and strategic discipline we have always exercised, and hopefully can find the right deal to drive value for our Company. I want to thank all our stockholders, employees and dealers for your continued support and commitment. We believe we have some of the best boat makers in the industry and that their commitment to their craft underpins the outstanding reputations Chaparral and Robalo enjoy in the marketplace. I also want to highlight the celebration of the Chaparral brand’s 60th anniversary this past year, marking another milestone on our journey as an industry leader in design and innovation. In addition, we would like to recognize two of our Directors, Gary W. Rollins and Pamela R. Rollins, who have chosen not to stand for re-election at our upcoming Annual Meeting of Stockholders and sincerely thank them for their many years of service and support on our Board. To our dealers, many of whom have been with us for several decades, you represent our company to the consumer, ultimately serving as our brand ambassadors. We appreciate your support and partnership and look forward to continued, shared success.

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Sincerely,

Ben M. Palmer
President and Chief Executive Officer

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SUSTAINABILITY AT MARINE PRODUCTS

We are a fiberglass boat manufacturing company that specializes in sterndrive and outboard boats. Marine Products sells its products to a network of domestic and international independent authorized dealers. We are highly regarded for our business ethics, fiscal management and our consistent focus on safety and the wellness of our employees. We consistently deliver high quality products to our customers, provide safe and rewarding work for our employees, and returns to shareholders.

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During 2024, we made meaningful progress formalizing, documenting and enhancing policies and procedures to better communicate our corporate sustainability commitments to our stakeholders. This included surveying our stakeholders on the materiality of topics related to Environmental, Social and Governance (ESG).

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We plan to publish our first Corporate Sustainability Report and formalize the following Policies:

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The Corporate Sustainability Report and Policies are expected to be published on the Company website at www.marineproductscorp.com.

The following Board committees provide periodic relevant guidance and oversight that support Marine Products’ ESG efforts in their respective areas as outlined below:

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PROXY STATEMENT

PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION

We are furnishing the proxy materials to stockholders on or about March 12, 2025. The Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on April 22, 2025, Proxy Statement and the 2024 Annual Report on Form 10-K are available at https://www.viewproxy.com/‌MarineProductsCorp/‌2025.

The following information concerning the proxy and the matters to be acted upon at the Annual Meeting of Stockholders to be held on April 22, 2025 is submitted by the Company to the stockholders in connection with the solicitation of proxies on behalf of the Company’s Board of Directors.

SOLICITATION OF AND POWER TO REVOKE PROXY

A form of proxy is enclosed. Each proxy submitted will be voted as directed, but if not otherwise specified, proxies solicited by the Board of Directors of the Company will be voted in favor of the candidates for election to the Board of Directors, in favor of ratification of the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2025, in favor of amending our Certificate of Incorporation to declassify the Board, in favor of removal from our Certificate of Incorporation of a provision specifying the requirements to call a special meeting of stockholders, in favor of removal of a provision from our Certificate of Incorporation requiring a 66.7% vote in order for stockholders to remove directors, and in favor of removal of a provision from our Certificate of Incorporation requiring a 66.7% vote in order for stockholders to amend our Bylaws.

A stockholder executing and delivering a proxy has power to revoke the same and the authority thereby given at any time prior to the exercise of such authority, if they so elect, by contacting either proxy holder, by timely submitting a later dated proxy changing their vote, or by attending the meeting and voting in person. However, a beneficial stockholder who holds shares in street name must secure a proxy from their broker before they can attend the meeting and vote. All costs of solicitation have been, and will be, borne by the Company.

HOUSEHOLDING AND DELIVERY OF NOTICE OR PROXY MATERIALS

The Company has adopted the process called “householding” for any notice or proxy materials in order to reduce printing costs and postage fees. Householding means that stockholders who share the same last name and address will receive only one copy of the notice or proxy materials, unless we receive contrary instructions from any stockholder at that address.

If you prefer to receive multiple copies of the proxy materials at the same address, additional copies will be provided to you promptly upon written or oral request. If you are a stockholder of record, you may contact us by writing to the Company at 2801 Buford Highway NE, Suite 300, Atlanta, GA 30329 or by calling 404-321-7910. Eligible stockholders of record receiving multiple copies of the proxy materials can request householding by contacting the Company in the same manner.

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CAPITAL STOCK

The outstanding capital stock of the Company on February 28, 2025, consisted of XX,XXX,XXX shares of Common Stock, par value $0.10 per share. Holders of Common Stock are entitled to one vote (non-cumulative) for each share of such stock registered in their respective names at the close of business on February 28, 2025, the record date for determining stockholders entitled to notice of, and to vote at, the meeting or any adjournment thereof.

A majority of the outstanding shares will constitute a quorum at the Annual Meeting. Abstentions will be counted for purposes of determining the presence or absence of a quorum for the transaction of business. With respect to routine matters, if your shares are held through a broker and you do not instruct the broker on how to vote your shares, your broker may choose to leave your shares unvoted or to vote your shares on the routine matters. Proposal 2, with respect to the ratification of the independent registered public accounting firm, is the only routine matter on the agenda at this year’s Annual Meeting. With respect to Proposals 1 and 3 to 6, without instructions, your broker cannot vote your shares, resulting in what is known as “broker non-votes.” Broker non-votes will be counted for purposes of determining the presence or absence of a quorum for the transaction of business.

In accordance with the General Corporation Law of the state of Delaware, the following votes are needed for approval of each proposal:

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There are no rights of appraisal or similar dissenter’s rights with respect to any matter to be acted upon pursuant to this Proxy Statement. It is expected that shares held of record and beneficially by officers and directors of the Company and their affiliates, which in the aggregate represent approximately XX% of the outstanding shares of Common Stock, will be voted FOR the nominees and FOR Proposals 2 to 6.

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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Meetings and Committees of the Board of Directors

The Company’s Board of Directors (Board) has an Audit Committee, Human Capital Management and Compensation Committee, Nominating and Corporate Governance Committee, and an Executive Committee (Committees). The Board has adopted written charters for certain of these Committees which are available on our website at www.marineproductscorp.com under the section titled Governance.

Under our Corporate Governance Guidelines, directors are expected to attend all regular and special meetings of the Board and Board Committees upon which they serve. Directors are also expected to attend the Annual Stockholders Meeting. Each incumbent director attended at least 75% of the aggregate of all Board meetings and meetings of the Board Committees on which they served during 2024, and all members of the Board at that time attended last year’s Annual Meeting of Stockholders.

The following table shows the current membership (M) and chairperson (C) of the Board and each of the Board committees, the number of Board and Board committee meetings held in 2024, and actions taken by unanimous written consent in lieu of meetings:

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Audit Committee

The Audit Committee of the Board of Directors currently consists of Patrick J. Gunning (Chairperson), Jerry W. Nix, Susan R. Bell and John F. Wilson. The Audit Committee is responsible for, among other things:

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The Board has determined that all of the members of the Audit Committee are independent as defined by the rules of the SEC and the New York Stock Exchange (NYSE). The Board has also determined that all members of the Audit Committee with the exception of John F. Wilson are qualified as “Audit Committee Financial Experts” within the meaning of the rules of the SEC and that they have accounting or related financial management expertise within the meaning of the NYSE listing standards. In addition, the Board has determined that Mr. Wilson is “financially literate” within the meaning of and as required by the rules and regulations of the NYSE. The Board has also determined that Ms. Bell’s simultaneous service on the audit committees of four public companies will not impair her ability to effectively serve on the Company’s Audit Committee.

HUMAN CAPITAL MANAGEMENT AND COMPENSATION COMMITTEE

The Human Capital Management and Compensation Committee of the Board of Directors of the Company consists of Jerry W. Nix (Chairman), Patrick J. Gunning and John F. Wilson. The Human Capital Management and Compensation Committee is responsible for, among other things:

The Board has determined that all members of the Human Capital Management and Compensation Committee are independent as defined by the rules of the SEC and NYSE, without regard to NYSE independence rules applicable specifically to compensation committee members but which do not apply to the Company since it is a “controlled company” under NYSE rules. In addition, each member of our Human Capital Management and Compensation Committee is also a Non-Employee Director, as defined pursuant to Rule 16b-3 of the Exchange Act.

The Company is not required by law or by the NYSE rules to have a formal compensation committee charter since we are a controlled company as described below under the heading Director Independence and NYSE Requirements. However, we have established a written charter of the Human Capital Management and Compensation Committee to promote responsible corporate governance practices, and we currently intend to maintain the committee charter going forward. See section titled Compensation Discussion & Analysis—Compensation Setting Process for information regarding the Human Capital Management and Compensation Committee’s processes.

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HUMAN CAPITAL MANAGEMENT AND COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

As noted above, the Board has determined that each member of the Human Capital Management and Compensation Committee is independent in accordance with the NYSE rules. The Human Capital Management and Compensation Committee consists of Messrs. Nix, Gunning, and Wilson. None of these individuals is a current or former officer or employee of the Company or any of its subsidiaries. Related party transactions and the independence of the non-employee members of the Company’s Board are discussed in more detail under the following sections, Director Independence and NYSE Requirements, and Certain Relationships and Related Party Transactions of this Proxy Statement. No executive officer of the Company has served as a director or member of the compensation committee or other board committee of another entity that had an executive officer who served on the Company’s Board or Human Capital Management and Compensation Committee.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

The Nominating and Corporate Governance Committee of the Board of Directors of the Company consists of Jerry W. Nix (Chairman), Patrick J. Gunning, John F. Wilson, Timothy C. Rollins and Amy R. Kreisler. The Nominating and Corporate Governance Committee is responsible for, among other things:

The Company is not required by law or by the NYSE rules to have a nominating committee since we are a controlled company as described below under the heading “Director Independence and NYSE Requirements.” However, we have established a Nominating and Corporate Governance Committee and a written charter to promote responsible corporate governance practices. We currently intend to maintain the committee going forward, but as a controlled company, we rely upon the exemption from the requirement that we have a nominating committee comprised entirely of independent directors.

DIRECTOR NOMINATIONS

Under Delaware law, there are no statutory criteria or qualifications for directors. No criteria or qualifications have been prescribed by the Board at this time. The Nominating and Corporate Governance Committee does not have a formal policy with regard to the consideration of director candidates. As such, there is no formal policy relative to diversity, although as noted below, it is one of many factors that the Nominating and Corporate Governance Committee has the discretion to factor into its decision making. This discretion would extend to how the Committee might define diversity in a particular instance – whether in terms of background, viewpoint, experience, education, race, gender, national origin or other considerations. The Committee acts under the guidance of the Corporate Governance Guidelines approved by the Board of Directors and posted on the Company’s website at www.marineproductscorp.com under the Governance section. The Board believes that it should preserve maximum flexibility in order to select directors with sound judgment and other desirable qualities. According to the Company’s Corporate Governance Guidelines, the Board of Directors is responsible for selecting nominees for election to the Board of Directors. The Board has delegated the screening process of director nominees for nomination to the Board and service on the committees of the Board to the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee is responsible for determining the appropriate skills and

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characteristics required of Board members in the context of the then current makeup of the Board. This determination takes into account all factors which the Committee considers appropriate, such as independence, experience, strength of character, mature judgment, technical skills, diversity, age and the extent to which the individual would fill a present need on the Board. The Bylaws provide that nominations for the election of directors may be made by any stockholder entitled to vote for the election of directors. Nominations must comply with an advance notice procedure which generally requires, with respect to nominations for directors for election at an annual meeting, that written notice be addressed to: The Corporate Secretary, Marine Products Corporation, 2801 Buford Highway NE, Suite 300, Atlanta, Georgia 30329, and received not less than 90 nor more than 130 days prior to the anniversary of the prior year’s annual meeting and set forth among other requirements specified in the Bylaws, the name, age, business address and, if known, residence address of the nominee proposed in the notice, the principal occupation or employment of the nominee for the past five years, the nominee’s qualifications, the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by the person and any other information relating to the person that would be required to be disclosed in a proxy statement or other filings. Other requirements related to the notice are contained in the Bylaws and stockholders are advised to carefully review those requirements to ensure that nominations comply with the Bylaws; stockholders who intend to solicit proxies in support of director nominees other than the Board’s nominees must also comply with SEC Rule 14a-19(b). The Committee will consider nominations from stockholders that satisfy these requirements.

All of the nominees for directors being voted upon at the Annual Meeting to be held on April 22, 2025, other than Mr. Stephen E. Lewis, are currently serving on the Board of Directors. Mr. Stephen E. Lewis was recommended by the Nominating and Governance Committee as a director candidate and has been nominated for election as a Class III director by the Board of Directors. After a long service on the Board of Directors, Ms. Pamela R. Rollins and Mr. Gary W. Rollins are not standing for re-election but will continue to serve until the 2025 Annual Meeting. As a result, the size of our Board has been reduced from 10 to nine members, effective at the 2025 Annual Meeting.

We have proposed to declassify our Board of Directors. See Proposal No. 3 of this Proxy Statement. If Proposal No. 3 passes and the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of Delaware, we expect that all of our Class II and Class III directors will submit their resignations and be immediately re-appointed by the remaining directors so that all directors will serve one-year terms and will be subject to re-election at our 2026 Annual Meeting, other than Gary W. Rollins and Pamela R. Rollins, whose terms will expire at the 2025 Annual Meeting.

BOARD LEADERSHIP STRUCTURE

The Board believes the current leadership structure consisting of a separate Executive Chairman of the Board, Chief Executive Officer and Lead Independent Director represents the appropriate structure for the Company at this time. Richard A. Hubbell is the Executive Chairman of the Board and sets the agendas for Board meetings in consultation with the CEO, Corporate Secretary, and other members of the Board, and presides over all Board meetings and the Annual Meeting of Stockholders. Ben M. Palmer is the President and Chief Executive Officer and sets the operational leadership and strategic direction of the Company. Jerry W. Nix is the Lead Independent Director and serves as the liaison between the Executive Chairman, CEO and the independent directors, sets the agenda for, and presides over, the executive sessions of the non-employee and independent directors, consults with the Executive Chairman and CEO regarding information sent to the Board in connection with Board meetings and is available, if requested by the stockholders, when appropriate, for consultation and direct communication.

RISK OVERSIGHT

Our Board of Directors oversight of risk has not been delegated to any Board Committee. “Risk” is an extremely broad concept that extends to multiple functional areas and crosses multiple disciplines. As such, risk may be addressed from time to time by the full Board or by one or more of our Committees. Senior management is responsible for identifying and managing material risks that we face while insurable risks and litigation risks are handled primarily by the risk management department. Senior management provides the Board with a summary of insurance coverage annually and updates as deemed necessary. Liquidity risk, credit risk and risks associated with our credit facilities and cash management are handled primarily by our finance department, which regularly provides a financial report to both the Audit Committee and to the full Board. Operational, business, regulatory and political

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risks are handled primarily by senior executive management which regularly provides various operational reports to, among others, the full Board, the Executive Committee and the Audit Committee.

CYBERSECURITY RISK OVERSIGHT

The Board has delegated its responsibility for oversight of the Company’s cybersecurity and information security framework and risk management to the Audit Committee. The Audit Committee receives information and updates at least quarterly and actively engages with senior leaders with respect to the effectiveness of the Company’s cybersecurity and information security framework, data privacy, and risk management. In addition, the Audit Committee receives reports summarizing threat detection and mitigation plans, audits of internal controls, training and certification, and other cyber priorities and initiatives, as well as timely updates from senior leaders on material incidents relating to information systems security, including cybersecurity incidents. The Audit Committee includes members with experience in risk management including cybersecurity.

Company management has established a Cybersecurity Governance Committee that is comprised of the Information Technology Manager and senior members of management. The Committee meets periodically to discuss cybersecurity program updates and challenges, watch for potential threats from both external and internal sources, monitor compliance in existing or emerging business practices, and respond to stakeholder inquiries. The Information Technology department is comprised of professionals with extensive expertise and led by its manager with over 20 years of experience in network security, cybersecurity and enterprise risk management. The manager is continuously monitoring trends and stays current with the various cybersecurity threats and related mitigation opportunities. The Company periodically engages a third-party service provider to perform an external vulnerability scan of the Company network to identify known threats and to date no critical vulnerabilities have been identified during these assessments.

DIRECTOR INDEPENDENCE AND NYSE REQUIREMENTS

Controlled Company Exemption

The Company has elected to be treated as a “controlled company” as defined by NYSE Section 303A.00. This Section provides that a controlled company need not comply with the requirements of Sections 303A.01, 303A.04 and 303A.05 of the NYSE Listed Company Manual. Section 303A.01 requires that listed companies have a majority of independent directors. As a controlled company, this Section does not apply to the Company. Sections 303A.04 and 303A.05 require that listed companies have a nominating and corporate governance committee and a compensation committee, in each case composed entirely of independent directors, and that each of these committees must have a charter that addresses both the committee’s purpose and responsibilities and the need for an annual performance evaluation by the committee. While the Company has a Nominating and Corporate Governance Committee and a Human Capital Management and Compensation Committee, and each of these committees has a charter that is available on the Company’s website, it is not required to and does not comply with all of the provisions of Sections 303A.04 and 303A.05. The Company is a “controlled company” because a group that includes Gary W. Rollins, Pamela R. Rollins, Timothy C. Rollins, and Amy R. Kreisler, each of whom is a director of the Company, and certain companies under their control, controls in excess of 50% of the Company’s voting power. This means that they have the ability to determine the outcome of the election of directors at the Company’s annual meetings and to determine the outcome of many significant corporate transactions, many of which only require the approval of a majority of the Company’s voting power. Such a concentration of voting power could also have the effect of delaying or preventing a third party from acquiring the Company at a premium.

The Company’s Audit Committee is composed of four “independent” directors as defined by the Company’s Corporate Governance Guidelines, the NYSE rules, the Exchange Act, SEC regulations thereunder, and the Company’s Audit Committee Charter. All of the members of the Human Capital Management and Compensation Committee, and a majority of the members of Nominating and Corporate Governance Committee are also “independent” directors. The current independent directors of the Company are Jerry W. Nix, Susan R. Bell, Patrick J. Gunning, and John F. Wilson. If elected, Stephen E. Lewis will also be an independent director.

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Independence Guidelines

Under NYSE listing standards, to be considered independent, a director must be determined to have no material relationship with the Company other than as a director. The NYSE standards set forth a nonexclusive list of relationships which are conclusively deemed material. The Company’s Independence Guidelines are posted on the Company’s website at www.marineproductscorp.com under the Governance section and include categorical standards for determining independence in specific situations.

Audit Committee Charter

Under the Company’s Audit Committee Charter, in accordance with NYSE listing requirements and the Securities Exchange Act of 1934, all members of the Audit Committee must be independent of management and the Company. A member of the Audit Committee is considered independent as long as he or she (i) does not accept any consulting, advisory, or compensatory fee from the Company, other than as a director or committee member; (ii) is not an affiliated person of the Company or its subsidiaries; and (iii) otherwise meets the independence requirements of the NYSE and the Company’s Corporate Governance Guidelines.

Nonmaterial Relationships

After reviewing all of the relationships between the independent directors and the Company, the Board of Directors determined that none of the independent directors had any relationships that impaired their independence and discussed the following:

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As required by the Independence Guidelines, the Board of Directors unanimously concluded that the above-listed relationships would not affect the independent judgment of the independent directors, based on their experience, character and independent means, and therefore do not preclude an independence determination. All of the members of the Audit Committee are also independent under the heightened standards required for Audit Committee members. The Company’s non-management directors meet at regularly scheduled executive sessions, and the independent directors separately meet at least once annually, without management in accordance with the NYSE Corporate Governance Listing Standards, and Mr. Jerry W. Nix, as Lead Independent Director, presided over the executive sessions held during 2024.

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Corporate Governance Guidelines

We have adopted Corporate Governance Guidelines to formalize and promote better understanding of our policies and procedures. At least annually, the Board reviews these guidelines. As required by the rules of the NYSE, our Corporate Governance Guidelines require that our non-management directors meet in regularly scheduled executive sessions each year without management, and such meetings are currently required to occur at least twice annually.

On the Company’s website at www.marineproductscorp.com, under the Governance section, you may access a copy of the Corporate Governance Guidelines, Audit Committee Charter, Human Capital Management and Compensation Committee Charter, Nominating and Corporate Governance Committee Charter, Code of Business Conduct, Code of Business Conduct and Ethics for Directors and Executive Officers and Related Party Transactions Policy, and Independence Guidelines.

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Code of Business Conduct

The Company has adopted a Code of Business Conduct applicable to all directors, officers and employees generally, as well as a Code of Business Conduct and Ethics for Directors and Executive Officers and Related Party Transaction Policy applicable to the principal executive officer, principal financial officer, and directors. Both codes are available on the Company’s website at www.marineproductscorp.com under the Governance section.

Director Communications

The Company also has a process for interested parties, including stockholders, to send communications to the Board of Directors, Lead Independent Director, any of the Board committees or the non-management directors or independent directors as a group. Such communications should be addressed as follows:

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The above instructions for communications with the directors are also posted on our website at www.marineproductscorp.com under the Governance section. All communications received from interested parties are forwarded to the Board of Directors. Any communication addressed solely to the Lead Director, or the non-management or independent directors will be forwarded directly to the appropriate addressee(s).

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insider Trading Policy

We have adopted an Insider Trading Policy and procedures governing the purchase, sale and/or other dispositions of our securities by directors, officers and employees that is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the New York Stock Exchange listing standards applicable to us. A copy of our Insider Trading Policy is filed as Exhibit 19 to our Annual Report on Form 10-K. In addition, with regard to the Company’s trading in its own securities, it is the Company’s policy to comply with the federal securities laws and the applicable exchange listing requirements.

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DIRECTOR COMPENSATION

Overview of the Non-Employee Director Compensation Program

Members of the Board who are not employees (Non-Employee Directors) receive compensation for their service. As Marine Products employees, Messrs. Hubbell and Palmer do not receive compensation for their service as Board members. The compensation program for our Non-Employee Directors is intended to provide a total compensation package to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our stockholders. All Non-Employee Directors are also entitled to reimbursement of expenses for all services as a director, including reasonable travel expenses incurred in connection with required in-person attendance at board and committee meetings, committee participation or special assignments.

The Human Capital Management and Compensation Committee annually reviews each element and the total of our Non-Employee Director Compensation Program and periodically makes recommendations for any changes to the Board. There were no changes made to the Non-Employee Director Compensation Program for 2025.

2024 ANNUAL NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAM

Cash and Equity Compensation

Under the Director Compensation Program in effect in 2024, our Non-Employee Directors received an annual cash retainer and an annual equity grant in the form of fully vested Company common shares under the Company’s 2024 Equity Stock Incentive Plan (SIP). Committee Chairs and members received additional annual cash retainers. All cash retainers are payable in equal quarterly installments in arrears. For each Non-Employee Director who is elected or appointed for the first time, the first quarterly installment of the annual cash retainers will be paid for the first quarter that ends on or after the date of his or her initial election or appointment, prorated based on service during the quarter. Equity retainers are granted on the third business day following the Annual Meeting of Stockholders and vest immediately on the grant date. In addition, equity retainers are not granted to the Non-Employee Director who is elected to the Board during the latter half of a year. The following table sets forth the 2024 Non-Employee Director Compensation Program:

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2024 Director Compensation Table

The following table sets forth the compensation paid to our directors for services rendered as a director for the year ended December 31, 2024. Two of our directors, Richard A. Hubbell and Ben M. Palmer, are employees of the Company and each of their employee compensation information is set forth in the Summary Compensation Table under the Executive Compensation section of this Proxy Statement. Directors that are Company employees do not receive any additional compensation for services rendered as a director.

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All of the directors shown below have never been employed by the Company or paid a salary or bonus by the Company and do not participate in any Company-sponsored retirement plans.

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Non-Employee Director Stock Ownership Guidelines

Under Stock Ownership Guidelines, Non-Employee Directors are required to beneficially own, within five years of their appointment to the Board, common stock of the Company equal to at least three times the annual equity retainer. Non-Employee Directors are prohibited from selling Company stock granted to such director by the Company for a period of one year from the date of such grant and until such director is in compliance with their ownership requirement under these Stock Ownership Guidelines.

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INFORMATION REGARDING DIRECTOR NOMINEES AND CONTINUING DIRECTORS

The following table sets forth the names, ages as of March 1, 2025, and certain other information for each of the nominees for election as a director at the Annual Meeting and for each of the continuing members of our Board following the Annual Meeting. Full biographical information follows the table. We have proposed to declassify our Board of Directors. See Proposal No. 3 of this Proxy Statement. If Proposal No. 3 passes and the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of Delaware, we expect that all of our Class II and Class III directors whose terms will continue past the 2025 Annual meeting will submit their resignations and be immediately re-appointed by the remaining directors so that all directors will serve one-year terms and will be subject to re-election at our 2026 Annual Meeting.

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Key Attributes, Experience and Skills of Director Nominees and Continuing Directors

Director Nominees

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Continuing Directors

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PROPOSAL 1: ELECTION OF DIRECTORS

Overview

Our Board of Directors is currently composed of 10 members. After a long service on the Board, Pamela R. Rollins and Gary W. Rollins are not standing for re-election. The Board has nominated Stephen E. Lewis to stand for election and the Board will be comprised of nine members after the Annual Meeting of Stockholders. In accordance with our Amended and Restated Certificate of Incorporation (Charter), our Board is currently divided into three classes of directors. At the Annual Meeting, four Class III directors will be elected for a three-year term. Each director’s term continues until the election and qualification of his or her successor, or such director’s earlier death or resignation. Five other individuals serve as directors but are not standing for re-election because their terms as directors extend past this Annual Meeting pursuant to provisions of the Charter, which provide for the election of directors for staggered terms, with each director serving a three-year term. We have proposed to declassify our Board of Directors. See Proposal No. 3 of this Proxy Statement. If Proposal No. 3 passes and the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of Delaware, we expect that all of our Class II and Class III directors, whose terms extend past the 2025 Annual Meeting, will submit their resignations and be immediately re-appointed by the remaining directors so that all directors will serve one-year terms and will be subject to re-election at our 2026 Annual Meeting. Thereafter, all directors will serve one-year terms.

Nominees

At the Annual Meeting Amy R. Kreisler, Susan R. Bell, Timothy C. Rollins and Stephen E. Lewis will be nominated to serve as Class III Directors for a three-year term, subject to the anticipated impact of declassification of the Board, if approved, as described above. The nominees for election at the 2025 Annual Meeting are currently directors of the Company with exception of Stephen E. Lewis who was nominated by the Board on January 28, 2025, to stand for election.  

Unless authority is withheld, the proxy holders will vote for the election of each nominee named above as a director. Although management does not contemplate the possibility, in the event any nominee is not a candidate or is unable to serve as director at the time of the election, unless authority is withheld, the proxies will be voted for any nominee who shall be designated by the present Board of Directors and recommended by the Nominating and Corporate Governance Committee to fill such vacancy.

Our Board of Directors recommends a vote FOR the Class III Director Nominees above.

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AUDIT MATTERS

Report of the Audit Committee

Management is responsible for the Company’s system of internal control over financial reporting, the preparation of its consolidated financial statements in accordance with accounting principles generally accepted in the United States, and the financial reporting process, including management’s assessment of Internal Control over Financial Reporting (ICFR).

The Company’s independent registered public accounting firm is responsible for performing an integrated independent audit of the Company’s consolidated financial statements and management reports on ICFR in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB) and for issuing reports thereon. The Audit Committee’s responsibility is generally to monitor and oversee these processes, as described in the Audit Committee Charter. It is not the duty of the Audit Committee to plan or conduct audits nor is it the Audit Committee’s responsibility to determine that the Company’s financial statements are complete and accurate and in accordance with generally accepted accounting principles; that is the responsibility of management. The Audit Committee presently consists of four independent directors, all of whom are considered financially literate under NYSE rules.

In fulfilling its oversight responsibilities with respect to the year ended December 31, 2024, the Audit Committee:

Based upon the review and discussions referred to previously, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements of the Company and subsidiaries as of December 31, 2024 and for the year then ended be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for filing with the SEC.

In giving its recommendation to the Board of Directors, the Audit Committee has relied on (i) management’s representation that such financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States of America; and (ii) the reports of the Company’s independent registered public accounting firm with respect to such financial statements and related internal controls.

Respectfully submitted by the Audit Committee of the Board of Directors

Patrick J. Gunning, Chairperson
Susan R. Bell
Jerry W. Nix
John F. Wilson

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This report of the Audit Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.

Independent Registered Public Accounting Firm

Principal Auditor

Grant Thornton LLP has served as the Company’s independent registered public accounting firm for the fiscal years ended December 31, 2024 and 2023.

The Audit Committee has appointed Grant Thornton LLP as Marine Products Corporation’s independent registered public accounting firm for the fiscal year ending December 31, 2025. Grant Thornton LLP has served as the Company’s independent auditors since 2004 and is considered by management to be well qualified. Representatives of Grant Thornton LLP are expected to be present at the Annual Meeting, and they will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions. See section titled Proposal No 2—Ratification of Appointment of Independent Registered Public Accounting Firm.

Aggregate fees billed by the Company’s independent registered public accounting firm are set forth below:

Pre-approval of Services

All of the services described above were pre-approved by the Company’s Audit Committee. The Audit Committee has determined that the payments made to its independent registered public accounting firm for these services are compatible with maintaining such auditors’ independence. A majority of the hours expended on the principal accountant’s engagement to audit the financial statements of the Company for the years 2024 and 2023 were attributable to work performed by full-time, permanent employees of the principal accountant. The Committee has no pre-approval policies or procedures other than as set forth below.

The Audit Committee is directly responsible for the appointment and termination, compensation, and oversight of the work of the independent registered public accounting firm, including resolution of disagreements between management and the independent registered public accounting firm regarding financial reporting. The Audit Committee is responsible for pre-approving all audit and non-audit services provided by the independent public accountants and ensuring that they are not engaged to perform the specific non-audit services proscribed by law or regulation. The Audit Committee has delegated pre-approval authority to the Chairperson, and the Chairperson may further delegate approval authority to another member of the Committee from time to time. The decisions of any Audit Committee member to whom pre-approval authority is delegated must be presented to the full Audit Committee at its next scheduled meeting.

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PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Overview

The Audit Committee of the Board of Directors has appointed Grant Thornton LLP as the Company’s independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2025. Grant Thornton has served as our independent registered public accounting firm since 2004.

During fiscal 2024, Grant Thornton LLP served as our independent registered public accounting firm. Representatives of Grant Thornton LLP are expected to attend the Annual Meeting and will have the opportunity to respond to appropriate questions and, if they desire, to make a statement.

See Audit Matters — Independent Public Registered Accounting Firm for additional information regarding Grant Thornton and fees paid to them in 2024 and 2023.

Although we are not required to seek ratification of this appointment, the Audit Committee and the Board of Directors believes it is appropriate to do so. If stockholders do not ratify the appointment of Grant Thornton LLP, the current appointment will stand, but the Audit Committee will consider that stockholder action in determining whether to retain Grant Thornton LLP as our independent registered public accounting firm for future fiscal years.

Our Board of Directors recommends a vote FOR the ratification of the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the 2025 fiscal year.

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PROPOSAL 3: DECLASSIFICATION OF BOARD OF DIRECTORS

This management proposal seeks to provide for the elimination of the classified board of directors’ structure by amending our Certificate of Incorporation, or Charter. If approved, this amendment is expected to result in all directors standing for election annually for a one-year term, beginning with the 2026 Annual Meeting of Stockholders.

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BACKGROUND AND REASONS FOR PROPOSED AMENDMENT

As part of our continuous evaluation of corporate governance practices, our Board regularly reviews our governing documents and considers possible changes. While we believe our current governance structure has served our stockholders extraordinarily well, our Board, having heard our stockholders’ preferences expressed through our engagement with them and assessment of recent trends in corporate governance best practices, has decided that it is in the best interests of the Company and our stockholders at this time to transition to a more standard governance structure, including by declassifying our Board.

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Over the years, we have engaged with many of our stockholders who have indicated support for declassification.  Currently, our Charter, as amended to date, provides that the Board is divided into three classes, with members of each class serving for staggered three-year terms.

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Our Board of Directors recognizes that a classified structure may offer several advantages, such as promoting Board stability and continuity, providing a greater opportunity to protect the interests of stockholders in the event of an unsolicited takeover offer and reinforcing a commitment to long-term perspectives and value creation for our stockholders. The Board also recognizes, however, that a classified structure may reduce directors’ accountability to stockholders because such a structure does not enable stockholders to express a view on each director’s performance by means of an annual vote. Moreover, many institutional investors believe that the election of directors is the primary means for stockholders to influence corporate governance policies and to hold management accountable for implementing these policies. Our Board of Directors considered the arguments in favor of and against continuation of the classified board structure and determined that it would be in the best interests of the Company, subject to stockholder approval, to declassify the Board of Directors. The Board has therefore approved, and recommends that stockholders approve, amendments to our Charter to eliminate the classified board structure and provide for annual election of directors. In order to facilitate this declassification, if this Proposal No. 3 is approved, we expect all directors whose terms will not expire at the 2026 Annual Meeting of Stockholders, consisting of all Class II and Class III directors, to tender their resignations immediately following the filing of the Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware, in order that each such director may then be reappointed to the Board for a one-year term that will expire at the 2026 Annual Meeting of Stockholders of the Company. As a result, beginning with the election of directors at the 2026 Annual Meeting, all directors will be elected for one-year terms. In addition, the Board has also approved conforming amendments to our amended and restated Bylaws to remove provisions relating to the classified board and to provide that directors may be removed either for or without cause.

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The proposed Amended and Restated Certificate of Incorporation is attached to this Proxy Statement as Appendix A, which we would file promptly following the 2025 Annual Meeting if our stockholders approve this proposal (subject to revision as described below under Partial Stockholder Approval of Recommended Charter Amendments if our stockholders approve only some of the Charter amendment proposals recommended by the Board in this Proxy Statement).

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For the reasons discussed above, the Board believes it is in the best interests of the Company and our stockholders at this time to implement this proposal for the elimination of the classified board of directors structure.

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INTEREST of CONTROLLING STOCKHOLDER GROUP

Under Delaware law, directors of companies that have a classified structure may be removed only for cause unless the certificate of incorporation provides otherwise. However, directors of companies that do not have a classified structure may be removed with or without cause by a vote of the stockholders at any annual meeting or special meeting of stockholders called for that purpose. Accordingly, if the proposed amendment to the Company’s Charter to declassify the structure of our Board of Directors is approved and filed with the Delaware Secretary of State, then our controlling stockholder group would be able to remove any or all directors without cause at any annual meeting  or special meeting of stockholders called for that purpose that is held after the 2025 Annual Meeting, assuming that director resignations are submitted as anticipated and described above. In addition, if Proposal No. 4, to remove a provision specifying the requirements to call a special meeting of stockholders from our Charter, is approved at the 2025 Annual Meeting, special meetings of the stockholders may be called, pursuant to our Bylaws, at any time by the chairman and shall be called by the chairman or secretary on the request in writing or by vote of a majority of the directors or at the request in writing of stockholders of record owning a majority in amount of the capital stock outstanding and entitled to vote. As a result, the controlling stockholder group would have the power to call a special meeting for the purposes of removing one or more or all directors if both this Proposal No. 3 to declassify the Board and Proposal No. 4, to remove a provision specifying the requirements to call a special meeting of stockholders from our Charter, is approved. If Proposal No. 4 is not approved, the Charter will continue to provide that special meetings of stockholders of the Corporation may be called only by the Chairman of the Board or the President or by the Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board. For these purposes, the term "Whole Board" shall mean the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships.

PARTIAL STOCKHoLDER APPROVAL OF RECOMMENDED CHARTER AMENDMENTS

We are submitting for consideration at the 2025 Annual Meeting, and the Board unanimously recommends that you vote “FOR,” four separate proposals to amend our Certificate of Incorporation:

If all four Board-recommended Charter amendment proposals are approved by our stockholders, all of the changes contained in the proposed Amended and Restated Certificate of Incorporation attached to this Proxy Statement as Appendix A will be made. However, approval of each Board-recommended Charter amendment proposal is not contingent on approval of the others, and if only some, but not all, of the Board-recommended Charter amendment proposals are approved by our stockholders, amendments to our Charter contained in Appendix A will made as follows: 

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Required Vote

The affirmative vote of the holders of 66.7% of the voting power of all of the outstanding shares of the capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class, is required to approve this proposal pursuant to the Charter.

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Management Recommendation 

The Board unanimously recommends that you vote FOR this management Proposal No. 3 to declassify the Board of Directors.

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PROPOSAL 4: REMOVAL OF A PROVISION FROM OUR CERTIFICATE OF INCORPORATION SPECIFYING THE REQUIREMENTS TO CALL A SPECIAL MEETING OF STOCKHOLDERS

This management proposal seeks to obtain stockholder approval to delete the provision currently contained in Article FIFTH D. of our Charter regarding the ability to call a special meeting of stockholders.  

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Background and Reasons for Proposed Amendment

As part of our continuous evaluation of corporate governance practices, our Board regularly reviews our governing documents and considers possible changes. Currently, our Charter provides that special meetings of stockholders of the Company may be called only by the Chairman of the Board or the President or by the Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board. For this purpose, the term "Whole Board" means the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships. If this provision is deleted, the Company’s Bylaws will control regarding the authority to call a special meeting of stockholders. The Bylaws currently provide that a special meeting of stockholders may be called at any time by the Chairman of the Board and shall be called by the Chairman of the Board or Secretary on the request in writing or by vote of a majority of the directors or at the request in writing of stockholders of record owning a majority in amount of the capital stock outstanding and entitled to vote.

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While we believe that our current governance structure has served our stockholders extraordinarily well, our Board, having heard our stockholders’ preferences, has decided that it is in the best interests of the Company and our stockholders to permit stockholders holding a sufficiently large voting interest in the Company to require that the Company call a special meeting of its stockholders, as well as to allow a majority of the current sitting Board to call a special meeting.

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The Board recognizes that providing a significant portion of the stockholders of a company the ability to call special meetings is viewed by some stockholders as a useful corporate governance practice. However, the Board also recognizes that special meetings of stockholders can be potentially disruptive to business operations and to long-term stockholder interests, can be misused and can cause the Company to incur substantial expenses. Accordingly, the Board believes that the proposed majority threshold for calling special meetings of stockholders will help to balance these considerations, ensuring that special meetings can be called by stockholders with a significant interest in the Company but are less likely to be disruptive to the Company and its operations and are more likely to address matters that merit the unusual step of convening a meeting in advance of the regularly scheduled annual meeting process. Similarly, the Board believes that a majority of the sitting Board members should always have the ability to cause a special meeting to be called.

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Accordingly, the Board has approved, and recommends that stockholders approve, an amendment to our Charter to delete Article FIFTH D. thereof regarding the ability to call a special meeting of stockholders.

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The proposed Amended and Restated Certificate of Incorporation is attached to this Proxy Statement as Appendix A, which we would file promptly following the Annual Meeting if our stockholders approve this proposal (subject to revision as described above under “Proposal No. 3: Declassification of the Board of Directors—Partial Stockholder Approval of Recommended Charter Amendments” if our stockholders approve only some of the Charter amendment proposals recommended by the Board in this Proxy Statement).

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For the reasons discussed above, the Board believes it is in the best interests of our stockholders at this time to implement the proposal’s request to delete Article FIFTH D. of the Charter.

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Impact of the Proposed Charter Amendment

If the proposed Charter Amendment is approved and filed with the Secretary of State of Delaware, the following will occur:

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Interest of Controlling Stockholder Group

If this Proposal No. 4 passes and is filed with the Delaware Secretary of State, our controlling stockholder group, which owns in excess of a majority of our outstanding common stock, will gain the ability to call a special meeting of stockholders. In addition, if Proposal No. 3 to declassify the structure of our Board of Directors is approved and filed with the Delaware Secretary of State, then our controlling stockholder group would be able to remove any, some or all directors without cause at any meeting of stockholders after the 2025 Annual Meeting, assuming that director resignations are submitted as anticipated. As a result, the controlling stockholder group would have the power to call a special meeting of stockholders for the purpose of removing one or more directors if both Proposal No. 3 to declassify the Board and this Proposal No. 4 are approved.  

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Required Vote

The affirmative vote of the holders of 66.7% of the voting power of the shares of voting stock entitled to vote generally in the election of directors, voting together as a single class, is required to approve this proposal pursuant to the Charter.

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Management Recommendation 

The Board unanimously recommends that you vote FOR this management Proposal No. 4 providing for the deletion of Article FIFTH D. of the Company’s Certificate of Incorporation, regarding the ability to call a special meeting of stockholders.

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PROPOSAL 5: REMOVAL OF A PROVISION FROM OUR CERTIFICATE OF INCORPORATION REQUIRING A 66.7% VOTE IN ORDER FOR STOCKHOLDERS TO REMOVE DIRECTORS

This management proposal seeks to eliminate a provision from our Charter that requires a 66.7% vote of stockholders to remove a director.

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Background and Reasons for Proposed Amendment

As part of our continuous evaluation of corporate governance practices, our Board regularly reviews our governing documents and considers possible changes. While the Board recognizes that supermajority voting requirements can promote stability and protect stockholders by requiring broad stockholder support for certain fundamental changes, and notes that we believe our current governance structure has served our stockholders extraordinarily well, the Board, having heard our stockholders’ preferences expressed through their engagement with us, has decided that it is in the best interests of the Company and our stockholders at this time to recommend that our stockholders adopt an amendment to our Charter to eliminate the provision that requires a 66.7% vote of stockholders to remove a director. If this Proposal No.5 is approved, but Proposal No.3, the declassification proposal, is not approved, paragraph SIXTH of the Amended and Restated Certificate of Incorporation would retain the language that is currently contained in paragraph SIXTH of the Charter, except that the last sentence of paragraph SIXTH would be revised to read as follows:

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“Subject to the rights of the holders of any series of Preferred Stock then outstanding, any directors, or the entire board of directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least a majority of the voting power of all of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.”

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If both this Proposal No. 5 and Proposal No. 3, the declassification proposal, are approved, our Bylaws and Delaware law will determine who has the authority to remove a director and the circumstances in which removal of directors can occur. Currently, our Bylaws provide that, except as may otherwise be required by Delaware law, any director or the entire board may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. This provision will not be effective, however, unless both this Proposal No. 5 and Proposal No. 3 to declassify the Board, are both approved, and the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of Delaware.

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After considering the advantages and disadvantages of the 66.7% requirement to remove directors at this time, the Board has approved, and recommends that stockholders approve, an amendment to our Charter to remove this requirement.  

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The proposed Amended and Restated Certificate of Incorporation is attached to this Proxy Statement as Appendix A, which we would file promptly following the Annual Meeting if our stockholders approve this proposal (subject to revision as described above under Proposal No. 3: Declassification of the Board of Directors—Partial Stockholder Approval of Recommended Charter Amendments if our stockholders approve only some of the Charter amendment proposals recommended by the Board in this Proxy Statement).

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For the reasons discussed above, the Board believes it is in the best interests of our stockholders at this time to implement this proposal to eliminate the provision of our Charter that requires a 66.7% vote of stockholders to remove a director.

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Interest of Controlling Stockholder Group

Our controlling stockholder group currently owns in excess of 66.7% of our outstanding common stock, so passage of this Proposal No. 5 will not provide them with any rights that they do not currently have; however, if this Proposal No. 5 passes and is filed with the Delaware Secretary of State, our controlling stockholder group will be able to sell a significant percentage of its holdings in our common stock and still retain a majority of our outstanding shares and thus the ability to remove directors. In addition, if Proposal No. 3, to declassify our Board, and Proposal No. 4, to delete a provision specifying the requirements to call a special meeting of stockholders from our Certificate of Incorporation, are approved, our controlling stockholder group would have the ability to cause a special meeting of stockholders to be called and could remove, one, some or all directors.  

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Required Vote

The affirmative vote of the holders of 66.7% of the voting power of all of the outstanding shares of the capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class, is required to approve this proposal pursuant to the Charter.

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Management Recommendation

The Board unanimously recommends that you vote FOR this management Proposal No. 5 seeking to eliminate a provision from our Certificate of Incorporation that requires a 66.7% vote of stockholders to remove a director.

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PROPOSAL 6: TO REMOVE A PROVISION FROM OUR CERTIFICATE OF INCORPORATION REQUIRING A 66.7% VOTE IN ORDER FOR STOCKHOLDERS TO AMEND OUR BYLAWS

This management proposal seeks to eliminate a provision from our Charter that requires a 66.7% vote of stockholders to amend our Bylaws.

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Background and Reasons for Proposed Amendment

As part of our continuous evaluation of corporate governance practices, our Board regularly reviews our governing documents and considers possible changes. While the Board recognizes that supermajority voting requirements can promote stability and protect stockholders by requiring broad stockholder support for certain fundamental changes, and notes that we believe our current governance structure has served our stockholders extraordinarily well, the Board, having heard our stockholders’ preferences expressed through their engagement with us, has decided that it is in the best interests of the Company and our stockholders at this time to recommend that our stockholders adopt an amendment to our Charter to eliminate the provision that requires a 66.7% vote of stockholders to amend our Bylaws.

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If this Proposal No. 6 is approved, the proviso to Article SEVENTH of our Charter, set forth below, would be deleted:

“provided, however, that in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by this Certificate of Incorporation, the affirmative vote of the holders of at least sixty-six and 7/10^th percent (66.7%) of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the by-laws of the Corporation.”

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In that event, our Bylaws will determine the vote required in order for our stockholders to amend our Bylaws.  Currently, our Bylaws provide that they may be amended, altered, repealed, or added to at any regular meeting of the stockholders or board of directors or at any special meeting called for that purpose, by affirmative vote of a majority of the stock issued and outstanding and entitled to vote or of a majority of the directors in office, as the case may be. This provision will not be effective, however, unless this Proposal No. 6 is approved, and the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of Delaware. Our Board of Directors currently possesses the authority to amend our Bylaws, and this will not change, regardless of whether or not this Proposal No. 6 is approved.

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After considering the advantages and disadvantages of the 66.7% stockholder vote requirement to amend our Bylaws, the Board has approved, and recommends that stockholders approve, an amendment to our Charter to remove this requirement.  

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The proposed Amended and Restated Certificate of Incorporation is attached to this Proxy Statement as Appendix  A, which we would file promptly following the Annual Meeting if our stockholders approve this proposal (subject to revision as described above under Proposal 3: Declassification of the Board of Directors—Partial Stockholder Approval of Recommended Charter Amendments if our stockholders approve only some of the Charter amendment proposals recommended by the Board in this Proxy Statement).

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For the reasons discussed above, the Board believes it is in the best interests of our stockholders at this time to implement this proposal to eliminate the provision of our Charter that requires a 66.7% vote of stockholders to amend our Bylaws.

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Interest of Controlling Stockholder Group

Our controlling stockholder group currently owns in excess of 66.7% of our outstanding common stock, so passage of this Proposal No. 6 will not provide them with any rights that they do not currently have; however, if this Proposal No. 6 passes and is filed with the Delaware Secretary of State, our controlling stockholder group will be able to sell a significant percentage of its holdings in our common stock and still retain a majority of our outstanding shares and thus the ability to amend our Bylaws. In addition, if Proposal No. 6, to delete a provision specifying the requirements to call a special meeting of stockholders from our Certificate of Incorporation, is approved, our controlling stockholder group would have the ability to cause a special meeting of stockholders to be called for the purpose of amending our Bylaws and would have the power to amend them at that meeting.  

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Required Vote

The affirmative vote of the holders of 66.7% of the voting power of all of the outstanding shares of the capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class, is required to approve this proposal pursuant to the Charter.

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Management Recommendation 

The Board unanimously recommends that you vote FOR this management Proposal No. 6 to eliminate a provision from our Certificate of Incorporation that requires a 66.7% vote of stockholders to amend our Bylaws

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EXECUTIVE OFFICERS

The following narratives summarize the business experience over at least the last five years of our current executive officers, other than Messrs. Palmer and Hubbell, whose business experience is described in the section titled Information Regarding Director Nominees and Continuing Directors of this Proxy Statement.

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis describes our executive compensation program and provides an overview of how the Human Capital Management and Compensation Committee made compensation decisions in 2024 for each of our Named Executive Officers (NEO) which consist of our Principal Executive Officer, our Principal Financial Officer, and our Executive Chairman of the Board, who were serving in such capacities in fiscal 2024. For a complete understanding of the executive compensation program, this disclosure should be read in conjunction with the Summary Compensation Table and other executive compensation-related disclosures included in this Proxy Statement.

In fiscal year 2024, our Named Executive Officers were:

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Executive Summary

Fiscal Year 2024 Financial Highlights

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Executive Compensation Practices and Governance Policies

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General Compensation Objectives and Guidelines

The Company is engaged in a highly competitive industry. The success of the Company depends on our ability to attract and retain highly qualified and motivated executives. To accomplish this objective, we have endeavored to structure our executive compensation program in a fashion that gives our Human Capital Management and Compensation Committee the flexibility to take into account our operating performance and the individual performance of our executive officers.

The Human Capital Management and Compensation Committee endorses the philosophy that executive compensation should reflect Company performance and the contribution of executive officers to that performance. Our compensation policy is designed to achieve three fundamental objectives:

The Human Capital Management and Compensation Committee recognizes that there are many intangibles involved in evaluating performance and in motivating performance, and that determining an appropriate compensation level is a highly subjective endeavor. The analysis of the Committee is not based upon a structured formula and the objectives referred to above are not weighted in any formal manner. During the year, none of the executive officers made recommendations or otherwise contributed input on their own compensation levels.

The Company’s executive officers are also executive officers of RPC, Inc. (RPC) and receive compensation directly from RPC. The members of the Company’s Human Capital Management and Compensation Committee also constitute the Human Capital Management and Compensation Committee of RPC. In determining the compensation for the executive officers of the Company, the Committee considers these dual responsibilities and sources of compensation. The Company sets compensation of its executives at such levels so that the aggregate compensation received from both RPC and the Company is reasonable in light of their respective responsibilities and the performance of both companies, and so that the compensation from the Company for services solely to the Company is reasonable. A discussion of the Company’s executive officers’ compensation at RPC is contained in its annual Proxy Statement filed with the SEC.

Pursuant to our compensation philosophy, the total annual compensation of our executive officers is primarily made up of one or more of the following three core elements:

In addition, we also provide retirement compensation plans, group welfare benefits and certain perquisites.

We believe (i) a competitive base salary is important to attract, retain and motivate our top executives; (ii) annual performance-based incentive compensation is valuable in recognizing and rewarding individual achievement towards the achievement of company-wide results; and (iii) equity-based compensation makes executives “think like owners” and, therefore, aligns their interests with those of our stockholders. Beginning in 2023, we included PSUs with three-year performance conditions to the equity incentive component, which we believe further aligns NEO compensation with sustained long-term value creation and enhances executive retention by requiring attainment of performance goals over multiple years.

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Fiscal 2024 Named Executive Officer Compensation Details

The table below reflects the approximate general distribution of the three core elements of NEO compensation earned for fiscal 2024 as determined by our Human Capital Management and Compensation Committee.

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The numbers presented in the charts above are calculated in accordance with the presentation in the Summary Compensation Table included in the Executive Compensation section. Accordingly, the cash incentive component consists of the cash bonuses earned in the prior year that are actually paid out for 2024 performance, but the stock awards are valued at fair value on the grant date. See section titled Grants of Plan-Based Awards in 2024 for further information about their valuation. Actual value ultimately received by the NEOs with respect to these awards may be greater or lesser than the grant date fair value. Fixed compensation presented in the chart consists of base salary. The numbers presented for “Other Named Executive Officers” are averaged for simplicity of presentation, but the mix for individual NEOs varies depending upon their role and responsibilities, as the Human Capital Management and Compensation Committee has deemed appropriate.

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Compensation Elements

The following table sets forth information regarding each of the three core elements of the target compensation for the executive officers in 2024, including a description of each element.

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Base Salary

Base salary represents the fixed element of the compensation of our executive officers and is an important element of compensation intended to attract and retain qualified executives. The Human Capital Management and Compensation Committee reviews the base salaries of our executive officers each year as part of its annual review of our executive compensation program, with input from our CEO (except with respect to his own base salary). In making its determinations, the Human Capital Management and Compensation Committee gives consideration to the Company’s operating performance for the prior fiscal year and the individual executive’s performance and compensation paid by RPC. Base salary increases are not automatic or guaranteed.

Base Salary Adjustments

Base salaries for 2024 were as follows: Ben M. Palmer: $450,000 (no change from 2023); Michael L. Schmit: $160,000 (increased from $150,000 in 2023) and Richard A. Hubbell: $300,000 (no change from 2023). At the January 2025 meeting, Ben M. Palmer, Michael L. Schmit, and Richard A. Hubbell’s base salary was $463,500, $164,800, and $309,000 respectively effective January 1, 2025. The base salaries are adjusted from time to time in order to remain competitive with market rates and to reflect changes in each executive officer’s duties and job responsibilities.

Annual incentive compensation

On an annual basis, the Human Capital Management and Compensation Committee establishes performance goals after the commencement of the performance period to which such goals relate. Performance goals for each participant may be based on corporate, business unit/function or individual performance, or a combination of one or more such measures.

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In connection with the annual establishment of performance goals, the Committee sets a target award for each participant for the applicable year, which is expressed as a percentage of the participant’s base compensation (the “Target Award”) in effect on the last day of the final pay period of that year. If the participant’s performance goals are based upon a combination of performance measures, the Committee will weigh the importance of each performance measure by assigning a percentage (the “Weighted Percentage”) to each performance measure (“Target Performance Goal”). For 2024, the Human Capital Management and Compensation Committee approved an annual cash incentive based on levels of performance using the measurement of EBITDA. The incentive design established an EBITDA target level of performance corresponding to the target annual incentive. Target, threshold and maximum levels of performance for 2024 were as follows:

To calculate a participant’s cash award amount for a given year where there is more than one performance measure, the amount earned for each such measure will be calculated individually first, and then they are totaled to determine the total payout. The amount earned for each performance measure equals the product of the Target Award multiplied by the Weighted Percentage assigned to that performance measure, multiplied by the Performance Value attained for that performance measure, multiplied by base salary. However, no bonus is earned if performance is below threshold level, and the bonus is capped at the maximum amount. The Committee determines the maximum cash award as a percentage of a participant’s base salary for each applicable year. In 2024, there was only one performance goal, so the Weighted Percentage multiplier was 100%. See diagram below for a visualization of the Performance-Based Incentive Cash Compensation calculation for 2024:

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For 2024, the Committee established the target incentive award for the Chief Executive Officer and for the other members of executive management at the amounts shown in the following table:

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EBITDA is a widely used financial performance of short-term corporate profitability and is calculated by adding interest, income taxes, depreciation and amortization expenses to net income. The Company was required to achieve at least 75% of the target performance goal for executive officers to be eligible for any incentive cash compensation. These awards are determined on a sliding scale between the threshold performance level and maximum performance level, which corresponds to 130% of the target performance goal. To be eligible for the bonus award for 2024, EBITDA was required to be $28.0 million to be at the threshold and increased to maximum if EBITDA was $36.4 million or higher. The target criteria and actual fiscal 2024 results for EBITDA are as follows:

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The actual fiscal 2024 result for EBITDA was calculated as follows:

The table below sets forth the threshold, target and maximum percentages of base salary for awards under the 2024 Incentive Plan, together with the achievement and actual Annual Cash Incentives paid to our named executive officers, based on actual Company results.

For 2023, our executive officers were paid 108% of the target cash incentive, based on the performance achieved that year. In 2022, our executive officers were paid 150% of the target cash incentive, based on the performance achieved that year. As of the proxy date, the 2025 cash incentives have been designed and set with similar performance goals as in 2024 and the 2025 target award for Messrs. Palmer and Hubbell was set at 100% of base salary.

long-term incentive compensation

Our Stock Incentive Plan (“SIP”) allows for a wide variety of stock-based awards including RSAs and PSUs. The terms and conditions of awards granted under the SIP are described in more detail below.

Awards under the Company’s SIP are purely discretionary, are not based upon any specific formula and may or may not be granted in any given fiscal year. For the past few years, we have granted RSAs to various employees, including our executive officers, during our regularly scheduled meeting of the Human Capital Management and Compensation Committee in which the Committee reviews executive compensation, and more recently incorporated PSUs into the executive compensation program. In order to balance performance and retention incentives, awards made during fiscal 2024 consisted of 80% RSAs and 20% PSUs. At the January 2025 meeting, 2025 awards consisted of 75% RSAs and 25% PSUs. The Human Capital Management and Compensation Committee believes that RSAs promote an ownership culture, align executives’ interests with those of our stockholders and provide retention incentives for our executive officers, while PSUs act as an additional tool for linking individual interests of our executive officers to those of our stockholders.

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Consistent with this practice, we granted the following awards to our executive officers:

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For 2024, total equity compensation granted is comprised of RSAs and PSUs that will be earned over time as described below:

RSAs – RSAs granted in 2024 and later vest ratably over a period of three years and RSAs granted in 2023 vest over four years. Prior to 2023, the RSAs vested one-fifth per year beginning on the second anniversary of the grant date. RSA granted in 2025 will vest over three years. RSAs have full voting and dividend rights. However, until the RSAs vest, they cannot be sold, transferred or pledged. Should the executive leave our employment for any reason prior to the vesting dates (other than due to disability or retirement on or after age 65), the unvested RSAs will be forfeited. In the event of death, or “change in control” as determined by the Board of Directors, all unvested RSAs shall vest immediately.

PSUs – For 2024 each of the officers was granted a target number of PSUs with each such unit representing the right to receive, to the extent then vested, an amount payable in stock subject to certain performance conditions measured over the 3-year period ending in 2026. Potential payouts under the PSUs are based on levels of performance using “3-Year Cumulative EPS,” which equals the aggregate of Earnings Per Diluted Share for fiscal years 2024, 2025 and 2026, subject to adjustments approved by the Human Capital Management and Compensation Committee and if such an adjusted measure is disclosed in the Company’s SEC filings. No such adjustments were made for fiscal 2024. The award provides for threshold, target and maximum levels of payout, so that attainment of 75% of the target 3-Year Cumulative EPS will result in a payout at 50% of target level, while attaining 130% of the target 3-Year Cumulative EPS will result in a payout at 200% of target level; subject to further adjustment based upon a TSR Modifier. The TSR Modifier adjusts the payout levels upward or downward by an amount up to 20%, based on the applicable relative percentile ranking of our stock benchmarked against the Russell 2000 Small Cap Index. TSR is calculated as profit or loss from the net price change in the market price for our shares over the 3-Year period, based on the 20-trading day average price at the beginning of 2024 and the end of 2026. With respect to both measures, interpolation is used to determine the payouts associated with performance between the threshold, target and maximum levels.

Based on current estimates, it is likely that 2024 PSU grants will meet or exceed threshold performance levels. Actual performance could be higher or lower than our estimates. See section titled Grants of Plan-Based Awards in 2024 below for threshold, target, and maximum share numbers and grant date fair values. The shares granted in 2024 are set to cliff-vest on December 31, 2026. Should the executive leave our employment for any reason prior to the vesting dates (other than due to death, disability or change in control as defined in the agreements), the unvested PSUs will be forfeited. In the event of death, disability or change in control as defined in the agreements, all unvested PSUs shall vest immediately at 100% of target levels, without regard to the actual EPS performance, and with no adjustment for the TSR modifier.

PSU awards also include the right to “Dividend Equivalents” with respect to the underlying shares. Dividend equivalents are accrued over the performance period, in cash, based upon target payout level, subject to a true-up at the end of the three-year cycle. Accrued Dividend Equivalents will be paid out upon vesting of the PSUs, but no such Dividend Equivalents will be payable to the extent the awards fail to vest or are forfeited, or the performance goals are not met. PSUs confer no voting rights with respect to the underlying shares prior to vesting and payout.  

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The amount of the aggregate stock-based awards to our executive officers in any given year is influenced by the Company’s overall performance: for both RSAs and PSUs, the Committee takes into consideration both our historical performance and our projected goals and plans; in the case of PSUs, a certain minimum performance must be achieved in order for any shares to be issued. The amount of each grant to our executive officers is influenced in part by the Committee’s assessment of each individual’s respective contributions to achievement of the Company’s long-term goals and objectives, in addition to the recent prices of the Company’s common shares. In evaluating individual performance for these purposes, the Committee considers the overall contributions of executive management as a group and the Committee’s subjective assessment of each individual’s relative contribution to that performance rather than specific aspects of each individual’s performance over a short-term period. We expect to continue annual grants of RSAs and PSUs, although we reserve the right to modify or discontinue these or any of our other compensation practices at any time. Grants of RSAs and PSUs are made under our SIP which is administered pursuant to Rule 16b-3 under the Exchange Act.

Other Compensation

Health and Retirement Plans

The Company maintains a 401(k) Plan for the benefit of all its eligible employees. Ben M. Palmer, Michael L. Schmit and Richard A. Hubbell are not eligible to participate in the Company’s 401(k) Plan because they participate in the corresponding plan at RPC. In addition, the Company maintains a non-qualified Supplemental Retirement Plan (SRP) for executives and certain other highly compensated employees. In the fourth quarter of 2024, the Board of Directors approved the termination of the SRP. Pursuant to the Internal Revenue Service rules, participant balances will be distributed between 12 and 24 months after SRP termination. 

Perquisites and Other Personal Benefits

Messrs. Palmer, Schmit and Hubbell are eligible to participate at RPC in regular employee benefit programs, including group life insurance, group medical and dental coverage and other group benefit plans. In addition to the total direct compensation and benefits described above, the Chief Executive Officer and Executive Chairman of the Board are eligible to use the Company’s aircraft for personal travel.

Compensation Setting Process

Role of the Human Capital Management and Compensation Committee

Under its Charter the Human Capital Management and Compensation Committee is responsible for, among other things, reviewing our overall executive compensation philosophy and strategy including base salary, annual cash incentive, and stock-based incentives to ensure that the strategy supports our compensation policy.

The Human Capital Management and Compensation Committee is composed of three Non-Employee Directors: Jerry W. Nix (Chairperson), Patrick J. Gunning and John F. Wilson, each of whom is independent.

The Human Capital Management and Compensation Committee has the authority, at its sole discretion, to retain or obtain the advice of any compensation consultant, legal counsel or other advisor to assist the Committee in the performance of its duties and may at its discretion be directly responsible for the appointment, compensation and oversight of the work of any such compensation consultant, legal counsel or other advisor so retained. The Committee has not retained the services of any compensation consultants in determining or recommending the amount or form of executive compensation. The Human Capital Management and Compensation Committee may also, from time to time, and in its discretion, form, and delegate all or a portion of its authority to subcommittees; provided that such subcommittees meet the Committee’s composition requirements set forth in its Charter or under any applicable federal or state laws.

Role of Management

The Human Capital Management and Compensation Committee solicits input from Richard A. Hubbell, Executive Chairman of the Board and Ben M. Palmer, President and Chief Executive Officer, with respect to the performance of our executive officers and their compensation levels. The Human Capital Management and Compensation

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Committee considers Mr. Hubbell’s and Mr. Palmer’s evaluation and each of their direct knowledge of each executive officer’s performance (other than with respect to themselves) and contributions when making compensation decisions. For decisions made in 2024, Management retained the services of Mercer, LLC (Mercer), an independent executive compensation advisory firm. In doing so, Management reviewed information regarding independence and potential conflicts of interest with Mercer. Management receives from Mercer information on  general compensation data and advice on design of incentives, which is also shared with the Human Capital Management and Compensation Committee. From time to time Mercer attends the Human Capital Management and Compensation Committee meetings but does not provide specific advice directly to the Human Capital Management and Compensation Committee. Neither Mercer nor its affiliates provided additional services to the Company in an amount in excess of $120,000 in 2024.

The Role of Stockholder Say-on-Pay Votes

We provide our stockholders with the opportunity to cast an advisory vote on executive compensation (a Say-on-Pay proposal) every three years. At our annual meeting of stockholders held in April 2023, a substantial majority of the votes cast on the Say-on-Pay proposal were voted in favor of the proposal. The Human Capital Management and Compensation Committee believes this affirms the stockholders’ support of our approach to executive compensation. The stockholders voted to hold a Say-on-Pay advisory vote on executive compensation every three years, and the Board resolved to accept the stockholders’ recommendation. As a result, the advisory vote on executive compensation is being held again at the 2026 Annual Meeting of Stockholders. The Human Capital Management and Compensation Committee will continue to consider the outcome of our Say-on-Pay votes when making future compensation decisions for our executive officers.

Policies Regarding Stock Ownership by Executive Officers

Stock Ownership Requirements

Stock Ownership Guidelines (the Guidelines) for our executive officers and other key executives adopted by the Human Capital Management and Compensation Committee to align the interests of our executives with the interests of our stockholders are as follows:

Participants under the Guidelines have a period of five years from the date of appointment to a qualifying position in which to satisfy the Guidelines. Participants who become subject to these Guidelines will have their individual ownership requirement established based upon their base salary at the time they became subject to the Guidelines and the Company’s average closing common stock price for the prior calendar year. The share values get recalculated each year. Promotions into a different position category will require recalculation of a participant’s ownership requirements as appropriate. Once established, a participant’s ownership requirement does not change as a result of changes in their base salary.

Shares counted toward this requirement will be based on shares beneficially owned by such participant (as beneficial ownership is defined by the SEC’s rules and regulations) including:

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Once achieved, ownership of the amount under the Guidelines must be maintained for as long as the participant is subject to the Guidelines, and the participant is required to retain a minimum of 20% of any future equity awards.

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Prohibition on Hedging and Pledging of Common Stock

Under our Insider Trading Policy, we prohibit our employees, including our Named Executive Officers and the members of our Board of Directors, from hedging or pledging or otherwise encumbering individually owned or granted Company securities.

Clawback Policy

Our Board has adopted a “Policy Relating to Recovery of Erroneously Awarded Compensation”, effective as of October 19th, 2023, that complies with the NYSE clawback rules which were required by SEC Rule 10D-1. Under this policy, in the event that the Company is required to prepare an accounting restatement of its financial statements due to the Company's material noncompliance with any financial reporting requirement under the securities laws, the policy requires that the Human Capital Management and Compensation Committee, to the extent legally permitted and pursuant to the terms of the policy, recover from current and former Section 16 officers any incentive-based compensation, as defined in the NYSE's clawback rules, received by such officers that exceeds the amount of incentive-based compensation that otherwise would have been received had such incentive based compensation been determined according to the applicable accounting restatement.

Tax Deductibility of Compensation

As a result of the Tax Cuts and Jobs Act, starting with compensation payable in 2019, Section 162(m) of the Internal Revenue Code limits us from deducting compensation, including performance-based compensation, in excess of $1,000,000 paid to our executive officers. The Human Capital Management and Compensation Committee will continue to retain full discretion to award compensation packages that best attract, retain and reward successful executive officers. Therefore, the Human Capital Management and Compensation Committee anticipates that it will award compensation that is not fully deductible under Section 162(m).

Compensation-Related Risk

The Company regularly assesses the risks related to our compensation programs, including our executive compensation programs and does not believe that the risks arising from our compensation policies and practices are reasonably likely to have a material adverse effect on the Company. Incentive award targets and bonus opportunities, including targets and opportunities under outstanding PSUs are reviewed annually, allowing the Committee to maintain an appropriate balance between rewarding high performance without encouraging excessive risk.

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HUMAN CAPITAL MANAGEMENT AND COMPENSATION COMMITTEE REPORT

The Human Capital Management and Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with management and based on such review and discussions, the Human Capital Management and Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

Respectfully submitted by the Human Capital Management and
Compensation Committee of the Board of Directors

Jerry W. Nix, Chairperson
Patrick J. Gunning
John F. Wilson

This report of the Human Capital Management and Compensation Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (Securities Act), or under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.

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EXECUTIVE COMPENSATION

There are no agreements or understandings between the Company and any executive officer that guarantee continued employment or guarantee any level of severance or compensation, including incentive or bonus payments, other than annual restricted stock grants. The following table provides information regarding the annual and long-term compensation for services in all capacities paid to each of our named executive officers for the years indicated below:

SUMMARY COMPENSATION TABLE