Proxy Statement (definitive) (def 14a)

Date : 04/21/2017 @ 2:22PM
Source : Edgar (US Regulatory)
Stock : Hornbeck Offshore Services (HOS)
Quote : 2.68  -0.29 (-9.76%) @ 4:01PM

Proxy Statement (definitive) (def 14a)



 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

Filed by the Registrant x
Filed by a Party other than the Registrant o
Check the appropriate box:
o
Preliminary Proxy Statement
o
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x
Definitive Proxy Statement
o
Definitive Additional Materials
o
Soliciting Material Pursuant to §240.14a-12
 
  Hornbeck Offshore Services, Inc.  
(Name of Registrant as Specified In Its Charter)  
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)  
Payment of Filing Fee (Check the appropriate box):  
x
No fee required.
o
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
1)
Title of each class of securities to which transaction applies:
 
2)
Aggregate number of securities to which transaction applies:
 
3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
4)
Proposed maximum aggregate value of transaction:
 
5)
Total fee paid:
 
 
 
o
Fee paid previously with preliminary materials.
o
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
1)
Amount Previously Paid:
 
2)
Form, Schedule or Registration Statement No.:
 
3)
Filing Party:
 
4)
Date Filed:
 




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Hornbeck Offshore Services, Inc.
 
 
 
April 21, 2017
Dear Fellow Stockholder:  
You are cordially invited to attend the 2017 Annual Meeting of Stockholders (the “Annual Meeting”) of Hornbeck Offshore Services, Inc. to be held in the Company’s corporate training room located at 103 Northpark Boulevard, Covington, Louisiana 70433, on Thursday, June 15, 2017 , at 9:00 a.m. Central Time. For those of you who cannot be present at the Annual Meeting, we urge that you participate by indicating your choices on the proxy card provided to you and completing and returning it at your earliest convenience. If you sign and return your proxy card without specifying your choices, it will be understood that you wish to have your shares voted in accordance with our Board of Directors’ recommendations.  
This booklet includes the Notice of Annual Meeting of Stockholders and the Proxy Statement, which contains details of the business to be conducted at the Annual Meeting. At the Annual Meeting, you will have an opportunity to discuss each item of business described in the Notice of Annual Meeting of Stockholders and Proxy Statement and to ask questions about our operations and the Company.  
The Securities and Exchange Commission's proxy rules allow companies to provide access to our proxy materials over the Internet. As a result, we are mailing to most of our stockholders a Notice Regarding the Availability of Proxy Materials, or Notice, instead of a paper copy of this proxy statement, a proxy card and our 2016 Annual Report to Stockholders. The Notice contains instructions on how to access those documents over the Internet, as well as instructions on how to request a paper copy of our proxy materials. All stockholders who do not receive a Notice should receive a paper copy of the proxy materials by mail.
Our 2016 Annual Report to Stockholders, which includes our Annual Report on Form 10-K for the year ended December 31, 2016 , which is not part of the Proxy Statement, provides additional information regarding our financial results for the fiscal year ended December 31, 2016 . A copy of our 2016 Annual Report to Stockholders is available at www.hornbeckoffshore.com or may be requested from our Corporate Secretary as described elsewhere in the Proxy Statement.  
It is important that your shares are represented at the Annual Meeting, whether or not you are able to attend personally. Accordingly, please complete, sign, date and return the proxy card as promptly as possible in the envelope provided, or submit your proxy by Internet or phone, as described in the proxy card. If you do attend the Annual Meeting, you may withdraw your proxy and vote your shares in person.  
On behalf of our Board of Directors, thank you for your cooperation and continued support.  
 
Sincerely,
 
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Todd M. Hornbeck
 
Chairman, President and
Chief Executive Officer




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Hornbeck Offshore Services, Inc.
 
Notice of Annual Meeting of Stockholders
  
 
April 21, 2017  
Notice is hereby given that the 2017 Annual Meeting of Stockholders (the “Annual Meeting”) of Hornbeck Offshore Services, Inc., a Delaware corporation (the “Company”), will be held on Thursday, June 15, 2017 , at 9:00 a.m. Central Time, in the Company’s corporate training room located at 103 Northpark Boulevard, Covington, Louisiana 70433, for the following purposes, as more fully described in the accompanying Proxy Statement:
1.
to elect three Class III directors to serve on the Company’s Board of Directors for terms of three years or until their successors are duly elected and qualified or until the earlier of their death, resignation or removal;
2.
to ratify the reappointment of Ernst & Young LLP as the Company’s independent registered public accountants and auditors for the fiscal year ending December 31, 2017;
3.
to consider a non-binding, advisory vote to approve the compensation of the Company’s named executive officers; and
4.
to transact such other business as may properly come before the Annual Meeting and any postponement(s) or adjournment(s) thereof.  
All stockholders are cordially invited to attend the Annual Meeting in person. However, to ensure that each stockholder’s vote is counted at the Annual Meeting, stockholders should vote by following the Internet or phone voting instructions provided. If you have received a paper copy of the proxy card, you may also vote by completing and mailing the proxy card in the postage-paid, pre-addressed envelope provided for your convenience. Stockholders attending the Annual Meeting may vote in person even if they have previously submitted their proxy authorization.  
Only stockholders of record as of the close of business on April 17, 2017 are entitled to receive notice of and to vote at the Annual Meeting and any postponement(s) or adjournment(s) thereof. A list of such stockholders shall be open to the examination of any stockholder of record at the Company’s offices during normal business hours for a period of ten days prior to the Annual Meeting, and shall also be open for examination at the Annual Meeting and any postponement(s) or adjournment(s) thereof.  
 
By Order of the Board of Directors,
 
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Mark S. Myrtue
 
Treasurer and Corporate Secretary
Covington, Louisiana
April 21, 2017

IT IS IMPORTANT THAT YOUR SHARES OF COMMON STOCK BE REPRESENTED AT THE ANNUAL MEETING REGARDLESS OF THE NUMBER OF SHARES YOU HOLD. PLEASE COMPLETE, SIGN, DATE AND MAIL THE PROXY CARD IN THE ENVELOPE PROVIDED OR SUBMIT YOUR PROXY AUTHORIZATION BY INTERNET OR PHONE EVEN IF YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING. SUBMITTING YOUR PROXY AUTHORIZATION WILL NOT LIMIT YOUR RIGHT TO VOTE IN PERSON OR TO ATTEND THE ANNUAL MEETING, BUT WILL ENSURE YOUR REPRESENTATION IF YOU CANNOT ATTEND. IF YOU HAVE SHARES OF COMMON STOCK IN MORE THAN ONE NAME, OR IF YOUR SHARES ARE REGISTERED IN MORE THAN ONE WAY, YOU MAY RECEIVE MORE THAN ONE COPY OF THE PROXY MATERIALS. IF SO, SIGN AND RETURN EACH OF THE PROXY CARDS YOU RECEIVE OR SUBMIT YOUR PROXY AUTHORIZATION BY INTERNET OR PHONE SO THAT ALL OF YOUR SHARES MAY BE VOTED. YOU MAY REVOKE YOUR PROXY AUTHORIZATION AT ANY TIME BEFORE ITS USE.




Hornbeck Offshore Services, Inc.
103 Northpark Boulevard, Suite 300
Covington, Louisiana 70433

  PROXY STATEMENT
April 21, 2017
  General Information  
These proxy materials, together with the 2016 Annual Report to Stockholders, including financial statements, are being mailed to certain of our stockholders and will be made available on the Internet on or about April 21, 2017 . Stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request a printed set of the proxy materials to be sent to them by following the instructions in the Notice. Stockholders will also have the ability to inform us whether to send future proxy materials electronically by e-mail or in printed form by mail. If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting site.
Your election to receive proxy materials by e-mail or printed form will remain in effect until you terminate it. Choosing to receive future proxy materials by e-mail will allow us to provide you with the information you need in a more timely manner and save us the cost of printing and mailing documents to you.
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board” or the “Board of Directors”) of Hornbeck Offshore Services, Inc. (“we”, “our”, “us”, “Hornbeck Offshore” or the “Company”), for the 2017 Annual Meeting of Stockholders to be held on June 15, 2017 , and any postponement(s) or adjournment(s) thereof (the “Annual Meeting”). This Proxy Statement and the accompanying Notice of Annual Meeting and proxy card are first being made available to stockholders on or about April 21, 2017 .  
Record Date and Voting Securities  
Stockholders of record as of the close of business on April 17, 2017 (the “Record Date”) are entitled to receive notice of and to vote at the Annual Meeting. There were 36,767,467 shares of our common stock issued and outstanding on the Record Date. Each outstanding share of common stock is entitled to one vote upon each matter properly submitted to a vote at the Annual Meeting.  
Stockholders that are entitled to vote at the Annual Meeting may do so in person at the Annual Meeting, or by proxy submitted by mail or Internet as described on the notice and access card.  
Abstentions and broker non-votes are counted for purposes of determining the presence or absence of a quorum for the transaction of business. Broker non-votes occur when a broker or other nominee does not have discretionary authority to vote the shares with respect to a particular matter and has not received voting instructions from the beneficial owner with respect to that matter.  
The vote of a plurality of the shares entitled to vote and represented at a meeting at which a quorum is present is required for the election of directors. Thus, broker non-votes and abstentions will have no effect on the election of directors.  
The affirmative vote of a majority of the shares of common stock entitled to vote and represented in person or by proxy at a meeting at which a quorum is present is required to approve the proposal relating to the ratification of the reappointment of independent registered public accountants and auditors. The proposal related to the non-binding approval of executive compensation is advisory only and therefore does not require a particular number of affirmative votes. Although the advisory vote on executive compensation is non-binding, the compensation committee and Board of Directors value the opinions of our stockholders, and will consider the outcome of the vote when making future compensation decisions for our named executive officers. Shares represented at the Annual Meeting that abstain with respect to the proposals for binding votes will be considered in determining whether the requisite number of affirmative votes are cast on such matter. Accordingly, such abstentions will have the same effect as a vote against the approval of executive compensation and the ratification of the reappointment of independent registered accountants and auditors, as applicable. Except for the purposes of determining whether a quorum is present, as discussed below, broker non-votes will not be treated as shares represented at the Annual Meeting and are not entitled to vote for purposes of such proposals, and therefore will have no effect.  


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Quorum  
Except as may be otherwise required by law or the Company’s Second Restated Certificate of Incorporation (“Certificate of Incorporation”) or Fourth Restated Bylaws (“Bylaws”), as amended, the holders of a majority of the Company’s shares of common stock entitled to vote and present in person or represented by proxy shall constitute a quorum at a meeting of the stockholders. The persons whom we appoint to act as inspectors of election will determine whether a quorum exists. Shares of the Company’s common stock represented by properly executed and returned proxies will be treated as present. Shares of the Company’s common stock present or represented at the Annual Meeting that abstain from voting or that are the subject of broker non-votes will be counted as present for purposes of determining a quorum.  
How Your Proxy Will be Voted on Actions to be Taken  
The Board of Directors is soliciting a proxy that will provide you with an opportunity to vote on all matters scheduled to come before the Annual Meeting, whether or not you attend in person.  
Granting Your Proxy. If you properly execute and return a proxy in the enclosed form, your shares of common stock will be voted as you specify. If you make no specifications, your proxy representing our common stock will be voted:  
FOR ” each of the proposed director nominees;
FOR ” the ratification of the reappointment of independent registered public accountants and auditors; and
FOR, ” on a non-binding advisory basis, approval of the compensation of the Company’s named executive officers.
We expect no matters to be presented for action at the Annual Meeting other than the items described in this Proxy Statement. By signing and returning the proxy or submitting the proxy by Internet or phone, as described in the proxy card, however, you will give to the persons named as proxies therein discretionary voting authority with respect to any other matter that may properly come before the Annual Meeting, and they intend to vote on any such other matter in accordance with their best judgment.
Revoking Your Proxy. If you submit a proxy, you may subsequently revoke it or submit a revised proxy at any time before it is voted. You may also attend the Annual Meeting in person and vote by ballot, which would cancel any proxy that you previously submitted. If you wish to vote in person at the Annual Meeting but hold your stock in street name (that is, in the name of a broker, bank or other institution), then you must have a proxy from the broker, bank or institution in order to vote at the Annual Meeting.  
Proxy Solicitation  
We will pay all expenses of soliciting proxies for the Annual Meeting. In addition to solicitations by mail, arrangements have been made for brokers and nominees to send proxy materials to their principals, and we will reimburse them for their reasonable expenses. We may have our employees or other representatives (who will receive no additional compensation for their services) solicit proxies by telephone, telecopy, personal interview or other means. We may choose to engage a paid proxy solicitor to solicit proxies for the Annual Meeting, but have not yet done so.  
Stockholder Proposals  
If you want us to consider including a proposal in next year’s proxy statement, you must deliver it in writing to the Corporate Secretary, Hornbeck Offshore Services, Inc., 103 Northpark Boulevard, Suite 300, Covington, Louisiana 70433 by no later than December 22, 2017 .  
If you want to present a proposal at the 2018 Annual Meeting of Stockholders in person but do not wish to have it included in our proxy statement, you must submit it in writing to our Corporate Secretary, at the above address, by March 16, 2018 to be considered timely, in accordance with the specific procedural requirements set forth in our Bylaws. If you would like a copy of these procedures, please contact our Corporate Secretary for a copy of our Bylaws.  
Pursuant to rules promulgated under the Securities Exchange Act of 1934, as amended, or the Exchange Act, the designated proxies may use discretionary authority to vote with respect to stockholder proposals presented in person at the 2017 Annual Meeting if the stockholder making the proposal has not given the Company timely notice of such proposal.  

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Delivery of One Proxy Statement and Annual Report to a Single Household to Reduce Duplicate Mailings  
Each year in connection with the annual meeting of stockholders, we are required to send to each stockholder of record a notice and access card to the proxy statement and annual report, and to arrange for a proxy statement and annual report to be provided to each beneficial stockholder whose shares are held by or in the name of a broker, bank, trust or other nominee. Because some stockholders hold shares of the Company’s common stock in multiple accounts, this process results in duplicate mailings of notice and access cards to stockholders who share the same address. Stockholders may avoid receiving duplicate mailings and save us the cost of producing and mailing duplicate documents as follows:  
Stockholders of Record . If your shares are registered in your own name and you are interested in consenting to the delivery of a single proxy statement or annual report, you may contact the Company by mail at 103 Northpark Boulevard, Suite 300, Covington, Louisiana 70433, by telephone at (985) 727-2000 or by e-mail at ir@hornbeckoffshore.com.
Beneficial Stockholders . If your shares are not registered in your own name, your broker, bank, trust or other nominee that holds your shares may have asked you to consent to the delivery of a single proxy statement or annual report if there are other Hornbeck Offshore stockholders who share an address with you. If you currently receive more than one proxy statement or annual report at your household, and would like to receive only one copy of each in the future, you should contact your nominee.  
Right to Request Separate Copies . If you consent to the delivery of a single proxy statement and annual report but later decide that you would prefer to receive a separate copy of the proxy statement or annual report, as applicable, for each stockholder sharing your address, then please notify us or your nominee, as applicable, and we or they will promptly deliver such additional proxy statements or annual reports. If you wish to receive a separate copy of the proxy statement or annual report for each stockholder sharing your address in the future, you may contact the Company by mail at 103 Northpark Boulevard, Suite 300, Covington, Louisiana, 70433, by telephone at (985) 727-2000 or by e-mail at ir@hornbeckoffshore.com.  
Proposal No. 1 – Election of Directors  
Term of Directors  
Our Certificate of Incorporation and Bylaws provide that the Board of Directors is classified into three classes. These are designated as Class I directors, Class II directors and Class III directors, with members of each class holding office for staggered three-year terms. Vacancies on the Board resulting from death, resignation, disqualification, removal or other causes may be filled by the affirmative vote of a majority of the remaining directors then in office, even if less than a quorum of the Board is present, or by a sole remaining director.  
There are currently three Class III directors, whose terms expire at the 2017 Annual Meeting of Stockholders, three Class II directors, whose terms expire at the 2018 Annual Meeting of Stockholders, and three Class I directors, whose terms expire at the 2019 Annual Meeting of Stockholders, or, in all cases, until such date that their successors are duly elected and qualified or until their earlier death, resignation or removal in accordance with the Bylaws.  
Director Nominees and Voting  
The Board of Directors has nominated for election as directors the three persons named below. Our Bylaws require that our directors be stockholders of the Company. Each of the nominees for election as Class III directors is currently on the Board and has indicated his willingness to serve, if elected, but if any should be unable or unwilling to serve, proxies may be voted for a substitute nominee designated by the Board. If elected at the Annual Meeting, each of the three nominees will serve until the 2020 Annual Meeting of Stockholders (subject to the election and qualification of his or her successor and to his or her earlier death, resignation or removal). See “Nomination Process” below for additional information on the nomination of directors.  
If any nominee should be unavailable for election as a result of an unexpected occurrence, the Board’s proxies shall vote such shares for the election of such substitute nominee as the Board of Directors may propose. It is not anticipated that any nominee will be unable or unwilling to serve as a director if elected.
The name, age as of April 17, 2017 , principal occupation, and other information highlighting the particular experience, qualifications, attributes and skills that support the conclusion of the nominating/corporate governance committee that such nominee for Class III director should serve as a director of the Company are set forth below.  

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Todd M. Hornbeck , 48 , has served as our President and as a director since he co-founded the Company in June 1997. Until February 2002, he also served as Chief Operating Officer. In February 2002, Mr. Todd Hornbeck was appointed Chief Executive Officer and in May 2005, he was appointed Chairman of the Board of Directors. Mr. Todd Hornbeck was employed by the original Hornbeck Offshore Services, Inc., a NASDAQ-listed publicly traded offshore service vessel company with over 105 offshore supply vessels operating worldwide, from 1991 to 1996, serving in various positions relating to business strategy and development. Following its merger with Tidewater Inc. (NYSE:TDW) in March 1996, he accepted a position as Marketing Director-Gulf of Mexico with Tidewater, where his responsibilities included managing relationships and overall business development in the U.S. Gulf of Mexico region. He remained with Tidewater until our formation. Mr. Todd Hornbeck currently serves on the board of directors of the International Support Vessel Owner's Association, or ISOA, the Offshore Marine Services Association, or OMSA, and the National Ocean Industries Association, or NOIA. Mr. Todd Hornbeck is the son of Mr. Larry D. Hornbeck, one of our directors.  
As our co-founder, Mr. Todd Hornbeck brings his vision and goals for the Company to the Board. Under his leadership, we have expanded from a small private company to a large, global provider of technologically advanced offshore service vessels. Mr. Todd Hornbeck’s extensive experience in the offshore service vessel industry, and nearly 20 years leading our company, positions him well to serve as our Chairman, President and Chief Executive Officer. See also the section entitled “Board Structure, Risk Oversight, Committee Composition and Meetings” below.
Patricia B. Melcher , 57 , has served as one of our directors since October 2002. She currently serves as Managing Partner of EIV Capital, LLC and Chief Executive Officer of EIV Capital Management Co., LLC, which manage EIV Capital Fund II, LP, EIV Capital Fund III, LP, EIV Capital Fund III-A, LP (together, EIV Funds II and III) and EIV Capital Fund, LP, respectively, private equity funds focused on making investments in the energy industry. She assumed her duties with EIV Capital, LLC upon the formation of EIV Capital Fund II, LP in July 2013 and joined the management of EIV Capital Management Co., LLC in April 2009 being named Chief Executive Officer in August 2009. Pursuant to her duties with respect to EIV Capital Fund, LP and EIV Capital Funds II and III, Ms. Melcher, from time to time, serves as a director of certain of its portfolio investment companies. From November 2004 through August 2009, she co-founded and managed Go Appetit Foods, LLC, a privately-owned company that developed and distributed innovative all-natural foods and beverages. From 1997 to 2006, Ms. Melcher served as the President of Allegro Capital Management, Inc., a privately-owned investment company focused on private equity investments in, and consulting to, energy-related companies. From 1989 to 1994, she worked for SCF Partners, L.P., an investment fund sponsor specializing in private equity investments in oilfield service companies. From 1986 to 1989, Ms. Melcher worked for Simmons & Company International, or Simmons, one of the largest investment banks providing services exclusively to the energy industry.  
With over 30 years of experience as a private equity investor, consultant and investment banker, Ms. Melcher brings to the Board significant experience in evaluating the financial and operating performance of companies and assessing risks in the energy industry. In addition, Ms. Melcher’s past and current experience serving on the boards of for-profit as well as not-for-profit companies gives her a broad understanding of the financial needs and strategic priorities of companies in diverse industries, including oilfield services. Ms. Melcher’s management and energy finance experience make her particularly well-suited to be a member of our Board and a member and chairperson of our audit committee.  
Nicholas L. Swyka, Jr. , 73 , was appointed to our Board of Directors as a Class III Director in February 2012. Mr. Swyka has over 30 years of energy related investment banking experience. From September 1999 until his retirement in June 2011, he served as Vice Chairman of Simmons. During this time, Mr. Swyka also served on Simmons’ Executive Management, Compensation and Underwriting Committees. From January 1987 until September 1999, he served as Managing Director and Co-Head of Investment Banking for Simmons. During that time, he functioned as senior team leader advising the Boards of Directors of both public and private energy companies on a significant number of energy industry transactions, including mergers, acquisitions and divestitures, as well as capital market transactions. Mr. Swyka served as an Advisory Director to Simmons until its acquisition by Piper Jaffray & Co. in February 2016, where he continues to serve as a Director. Mr. Swyka currently serves on the Board of Directors and is chairman of the audit committee of Fairway Energy, LP (OTC US:FRWYZ). Fairway is an energy storage and transportation company headquartered in Houston, Texas. Mr. Swyka has served as an Advisory Director to the University of Texas Marine Science Institute and NOIA.  He is also past President and Chairman and currently serves on the Executive Committee of the Houston Ballet Foundation. Prior to joining Simmons, Mr. Swyka spent seven years with a major accounting firm, leaving as a senior manager, where he supervised the audits of private and public companies.
Mr. Swyka brings to our Board significant industry and capital markets experience, critical insights into the issues facing the global oil and gas industry, a proven track record of providing financial advisory services to the growing energy service sector and a personal knowledge, from having served as our financial advisor, of the history and the accomplishments of the original Hornbeck Offshore Services, Inc. and of our Company since its inception.

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The vote of a plurality of the shares entitled to vote and represented at a meeting at which a quorum is present is required for the election of directors.   Nevertheless, the Board has adopted a policy that requires that any nominee for director in an uncontested election who receives a greater number of votes “withheld” from his or her election than votes “for” such election tender his or her resignation for consideration by the nominating/corporate governance committee. The nominating/corporate governance committee shall recommend to the Board whether or not it should accept the tendered resignation. The Company will publicly disclose the Board's decision within 90 days of the certification of the election results.
The Board of Directors unanimously recommends that the stockholders vote “FOR” the election of each of the nominees.  
Incumbent Class I Directors  
The name, age as of April 17, 2017 , principal occupation, and other information highlighting the particular experience, qualifications, attributes and skills concerning each Class I director are set forth below.  
Bruce W. Hunt, 59 , has served as one of our directors since August 1997 and was appointed lead independent director in May 2005. He has been President of Petrol Marine Corporation since 1988 and President and Director of Petro-Hunt, L.L.C. since 1997, each of which is an energy-related company. Mr. Hunt served as a director of the original Hornbeck Offshore Services, Inc., a NASDAQ-listed publicly traded offshore service vessel company, from November 1992 to March 1996, when it merged with Tidewater Inc. (NYSE:TDW). In April 2012, Mr. Hunt was named as a director of ViewPoint Financial Group, Inc. (NASDAQ: VPFG), which subsequently became Legacy Texas Financial Group, Inc. (NASDAQ: LTXB).  
Mr. Hunt is an experienced business leader with the skills and attributes necessary to be our lead independent director. As a director of ours for more than 19 years and as a director of the original Hornbeck Offshore Services, Inc., he has gained a deep understanding of our direction and goals and the Board’s ability to oversee our success. His experience in the energy industry, including with offshore service vessels, further augments his range of knowledge and insight relevant to our operations. Mr. Hunt is affiliated with the William Herbert Hunt Trust Estate, which has been one of our largest stockholders since August 1997. As such, Mr. Hunt is uniquely familiar with the Company since its inception and provides the perspective of a long-term significant stockholder. Mr. Hunt serves as the chairman of our nominating/corporate governance committee.  
Kevin O. Meyers, Ph.D., 63 , was appointed to our Board of Directors as a Class I Director in June 2011. Dr. Meyers is a consultant with over 35 years of experience in the oil and gas industry. He served as the Senior Vice President, Exploration and Production—Americas of ConocoPhillips (NYSE:COP), a publicly traded oil and gas company, from May 2009 until his retirement in December 2010. Before assuming that role, Dr. Meyers had been President of ConocoPhillips Canada from December 2006 until May 2009. From October 2004 to November 2006, he served as President of ConocoPhillips’ Russian and Caspian Region, based in Moscow, where he was responsible for exploration and production activities in the former Soviet Union and was the lead executive in Russia for the COP LUKOIL strategic alliance. Prior to moving to Russia, Dr. Meyers was President of ConocoPhillips Alaska, a position he had held since Conoco Inc. and Phillips Petroleum Company merged in 2002. Prior to the merger, Dr. Meyers had held a similar position with Phillips Petroleum Company. He held that position following the acquisition by Phillips Petroleum Company of certain Alaskan assets of the Atlantic Richfield Company, or ARCO. Dr. Meyers was President of ARCO Alaska from 1998 to 2000 and served in various other positions with ARCO from 1980 through 1998. Dr. Meyers also currently serves on the board of directors of Precision Drilling Corporation (NYSE: PDS), Denbury Resources Inc. (NYSE: DNR) and Hess Corporation (NYSE: HES). Dr. Meyers holds a doctorate in chemical engineering from the Massachusetts Institute of Technology and bachelor’s degrees in chemistry and mathematics from Capital University in Ohio.  
Dr. Meyers brings to the Board significant major oil company executive experience and critical insights into the issues facing the global oil and gas industry from the perspective of our customers. This experience and perspective allows Dr. Meyers to make significant contributions as a critical member of the Board and the committees on which he serves.
Bernie W. Stewart , 72 , has served as one of our directors since November 2001 and served as the Chairman of our Board from February 2002 to May 2005. Mr. Stewart was Senior Vice President, Operations of R&B Falcon Corporation (NYSE:FLC), a contract drilling company, and President of R&B Falcon Drilling U.S., its domestic operating subsidiary, from May 1999 until R&B Falcon Corporation merged with Transocean Sedco Forex Inc. (NYSE:RIG) in January 2001. Between April 1996 and May 1999, he served as Chief Operating Officer of R&B Falcon Holdings, Inc. and as its President from January 1998 until May 1999. From 1993 until 1996, he was Senior Vice President and Chief Operating Officer of the original Hornbeck Offshore Services, Inc., a NASDAQ-listed publicly traded offshore service vessel

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company, where he was responsible for overall supervision of the company’s operations. From 1986 until 1993, he was President of Western Oceanics, Inc., an offshore drilling contractor. Since leaving R&B Falcon Corporation upon its merger with Transocean Sedco Forex, Mr. Stewart has been an independent business consultant.  
Mr. Stewart’s more than 15 years of executive experience in the offshore energy industry brings to the Board critical insights into the operational requirements of a public offshore service vessel company. In addition, his experience as our former Chairman, one of our directors, and as an officer of the original Hornbeck Offshore Services, Inc., gives him a deep understanding of our operations and of the important role of the Board. Mr. Stewart serves as the chairman of our compensation committee.
Incumbent Class II Directors  
The name, age as of April 17, 2017 , principal occupation, and other information highlighting the particular experience, qualifications, attributes and skills concerning each Class II director are set forth below.  
Larry D. Hornbeck , 78 , has served as a director since August 2001. An executive with over 38 years of experience in the offshore supply vessel business worldwide, Mr. Larry Hornbeck was the sole founder of the original Hornbeck Offshore Services, Inc., a NASDAQ-listed publicly traded offshore service vessel company with over 105 state-of-the-art offshore supply vessels operating worldwide. From its inception in 1981 until its merger with Tidewater Inc. (NYSE:TDW) in March 1996, Mr. Larry Hornbeck served as its Chairman of the Board, President and Chief Executive Officer. Following the merger, Mr. Larry Hornbeck served as a director and a member of the audit committee of Tidewater Inc. from March 1996 until October 2000. From 1969 to 1980, Mr. Larry Hornbeck served as an officer in various capacities, culminating as Chairman, President and Chief Executive Officer of Sealcraft Operators, Inc., a NASDAQ-listed publicly traded offshore service vessel company operating 29 geophysical and specialty service vessels worldwide. He served on the board of directors and as chairman of the compensation committee of Coastal Towing, an inland marine tug and barge company, from 1992 through 2003. Mr. Larry Hornbeck assisted in orchestrating the founding of the current Company and is the father of Mr. Todd M. Hornbeck, our Chairman, President and Chief Executive Officer.
In addition to the leadership roles in which Mr. Larry Hornbeck has served or currently serves, he has extensive involvement in international and domestic marine industry associations. Mr. Larry Hornbeck helped form and served on the boards of several marine industry associations, including OMSA and NOIA. He also served on the board of directors of the American Bureau of Shipping, or ABS, and ISOA. The relationships Mr. Larry Hornbeck formed in these organizations and in his leadership roles in public companies continue to benefit the Company to this day.  
Mr. Larry Hornbeck brings to the Board a deep understanding of the operations of a public company in the offshore service vessel industry. With his many years of experience as both Chief Executive Officer and Chairman of the Board of the original Hornbeck Offshore Services, Inc. and of Sealcraft Operators, Inc., Mr. Larry Hornbeck brings not only management expertise, but unique technical knowledge of offshore service vessels and their application, construction and operation. This, combined with his years of experience as one of our directors and his continued active involvement in the Company, make him an invaluable contributor to our Board.  
Steven W. Krablin , 67 , was appointed to our Board of Directors as a Class II Director in August 2005. Mr. Krablin was the President, Chief Executive Officer and Chairman of the Board of T-3 Energy Services Inc. (NASDAQ:TTES), a publicly held company that designed, manufactured, repaired and serviced products used in the drilling and completion of new oil and gas wells, the workover of existing wells, and the production and transportation of oil and gas, from March 2009 until T-3 was acquired in January 2011. From April 2005 until joining T-3 Energy Services in March 2009, Mr. Krablin was a private investor. From January 1996 until April 2005, Mr. Krablin served as the Senior Vice President and Chief Financial Officer of National Oilwell, Inc. (NYSE:NOI), a major manufacturer and distributor of oil and gas drilling equipment and related services for land and offshore drilling rigs. Mr. Krablin currently serves on the board of directors of Chart Industries, Inc. (NASDAQ:GTLS) and Precision Drilling Corporation (NYSE: PDS). Mr. Krablin is a retired certified public accountant.  
As an experienced financial and operational leader with a variety of public companies in the energy industry, Mr. Krablin brings a broad understanding of business globally, which is particularly important for our company, as we continue to expand our operations in foreign countries. Mr. Krablin brings management experience, leadership capabilities, financial knowledge and business acumen to our Board. Drawing from that experience, he brings a unique perspective to the Board and the committees on which he serves.
John T. Rynd, 60 , was appointed to our Board of Directors as a Class II Director in June 2011. From June 2008 until December 2016, Mr. Rynd served as the Chief Executive Officer and President, and as a director, of Hercules Offshore, Inc. (NASDAQ:HERO), a publicly traded global provider of offshore contract drilling and liftboat services. From July 2007

6



to June 2008, he served as Executive Vice President and Chief Operating Officer of Hercules Offshore, Inc. From October 2005 to July 2007, he served as Senior Vice President of Hercules Offshore, Inc. and President of Hercules Drilling Company, LLC. On August 13, 2015, Hercules Offshore, Inc. and certain of its subsidiaries filed voluntary petitions for relief under the provisions of Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. On November 6, 2015, Hercules Offshore, Inc. emerged from bankruptcy. On June 5, 2016, Hercules Offshore, Inc. again filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. On December 2, 2016, Hercules Offshore, Inc.'s assets were transferred to the HERO Liquidating Trust, and the common stock was canceled pursuant to its Chapter 11 plan.
Prior to joining Hercules Offshore, Inc., Mr. Rynd worked at Noble Drilling Services Inc., a wholly owned subsidiary of Noble Corporation, a contract drilling company, as Vice President-Investor Relations from October 2000 to September 2005 and as Vice President-Marketing and Contracts from September 1994 to September 2000. From June 1990 to September 1994, Mr. Rynd worked for Chiles Offshore Corporation, a contract drilling company, in various positions, including as Vice President-Marketing. Mr. Rynd currently serves on the board of directors of NOIA.
As a former chief executive officer of a publicly traded drilling and marine services company with a presence in the Gulf of Mexico, or GoM, Mr. Rynd has a deep understanding of the unique challenges currently facing our Company and the rest of the offshore energy industry in our core geographic markets. We believe that this unique understanding, together with Mr. Rynd’s leadership skills, allow him to make meaningful contributions to the Board and the committees on which he serves.
Board Structure, Risk Oversight, Committee Composition and Meetings  
Our Board of Directors is comprised of nine members, including the Chairman, divided into three classes as described under “Term of Directors” above. Other than Mr. Todd Hornbeck, who serves as our President, Chief Executive Officer and Chairman, there are no other members of the Company’s management that serve on the Board. Seven of the nine Board members are independent as contemplated under Commission and NYSE requirements. We have three committees of the Board—audit, compensation and nominating/corporate governance—that are comprised solely of independent directors, including their chairs. The Board may also establish other committees from time to time as necessary to facilitate the management of the business and affairs of the Company and to comply with the corporate governance rules of the NYSE. The Company has a lead independent director who chairs and oversees the executive sessions of the non-management directors (generally meeting at least quarterly) and independent directors (meeting at least annually). Of the eight non-management members of the Board, five have served as executive officers of public companies (two of whom have served in the combined positions of chairman and chief executive officer). All of our non-management directors, including the seven independent directors, have significant experience with Board processes, and specifically their role and responsibilities in oversight on behalf of the Company’s stockholders. For additional information regarding our directors’ backgrounds, see “Term of Directors” above. The existence and leadership of our lead independent director, the committee chairs and the committee members, all being independent directors, and the seven to two independent majority of the Board provides for substantial independent oversight of the Company.  
In May 2005, the Board unanimously elected Mr. Todd Hornbeck as Chairman of the Board of Directors. Mr. Todd Hornbeck was the principal catalyst and visionary behind the creation of the Company as primarily a new generation offshore service vessel business and has been instrumental in the growth and development of the Company. He has served the Company as President since its founding in June 1997 and as Chief Executive Officer since February 2002. As President and Chief Executive Officer, Mr. Todd Hornbeck is responsible for the operation of the Company and the execution of the Company’s strategy. Over the years, he has demonstrated excellent executive management skills and has led this Company from a “greenfield” start-up to its present status as a publicly-held, NYSE-listed Company with 62 new generation OSVs and eight MPSVs with a net book value of $2.6 billion as of December 31, 2016 . Under its fifth OSV newbuild program, the Company has contracted for the delivery of 19 new generation OSVs and five MPSVs. As of April 21, 2017 , the Company has placed 22 of such vessels in service under this program. The remaining two will be delivered in 2018. Given the growth of the Company, and the importance of the performance of the Company and the execution of corporate strategy in the Board’s considerations and duties, the Board believes that Mr. Todd Hornbeck is the person best qualified to serve as the Chairman of the Board. Additionally, it is the view of our Board that having Mr. Todd Hornbeck serve in the combined positions of President, Chief Executive Officer and Chairman of the Board is in the best interests of the Company and its stockholders. It signals to our employees, suppliers, customers and the investment community that a single person is responsible for providing direction in the management of the Company’s operations and growth initiatives. Such a single leader helps avoid the potential for duplication of efforts, for confusing or conflicting senses of direction or for personality conflicts. Moreover, the structure of our Board and committees, the level of independence represented on each, the experience of our directors and our lead independent director balance and

7



complement the combined offices of Chairman, President and Chief Executive Officer. The Board maintains the authority to modify this structure if and when the Board believes such modification would be in the best interests of the Company and its stockholders.  
In addition to his leadership skills, the Company has benefited and continues to benefit from Mr. Todd Hornbeck’s experience with the original Hornbeck Offshore Services, Inc., a NASDAQ-listed company founded by his father, Mr. Larry Hornbeck, in 1981. The current Company carries the Hornbeck family name, uses the same horsehead logo and trademarks as the prior company and is able to benefit from long-standing working relationships with customers, vendors and Wall Street analysts, many of whom also had relationships with Messrs. Todd and Larry Hornbeck at the prior public company. Unlike other companies that are led by non-founding managers, the Company benefits to a substantial extent from the history, entrepreneurial spirit, industry expertise and leadership of its founder.  
The Company’s leadership structure contributes to the manner in which the Board oversees risk by providing a high level of experience and independence to the process of risk oversight. The Board’s oversight of risk is centered principally on risks associated with the Company’s strategic plans, growth initiatives and financial results as well as risks attendant to the legal and regulatory environment in which the Company operates both domestically and abroad. The Board performs this oversight role by receiving and discussing reports each quarter from executive management, including major risks confronting the Company. A specific report concerning legal compliance is given each quarter in which the Board is advised of the approach to managing any known material legal risks being faced by the Company. While operational risk management is overseen by executive management, the Board also receives periodic reports, including discussions of the management of operating risks and the strategies employed by the Company in order to mitigate those risks, such as the placement of insurance and contracting strategies. The audit committee enhances the Board’s oversight of risk management by regularly assessing the overall corporate “tone” for quality financial reporting and ethical behavior. Each quarter, the audit committee discusses with executive management, the internal auditors and the independent auditor the adequacy and effectiveness of the Company’s accounting and financial controls and, where appropriate, the Company’s policies and procedures that impact business risks and certain of the Company’s compliance programs. The Company’s compensation policies and practices are described in the “Compensation Discussion and Analysis” section of this Proxy Statement. After reviewing the compensation policies and practices of the Company, the Board concluded that such policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.  
The Board has determined that Ms. Patricia B. Melcher and Messrs. Bruce W. Hunt, Kevin O. Meyers, John T. Rynd, Steven W. Krablin, Bernie W. Stewart and Nicholas L. Swyka, Jr. are “independent” for purposes of Section 303A of the NYSE Listed Company Manual. The Board based its determinations of independence primarily on a review of the responses our directors provided to questions regarding employment and compensation history, affiliations and family and other relationships. No material relationships between the Company and any independent directors were discerned.
During 2016 , our Board of Directors held six meetings and took action by unanimous written consent twice. All of the directors attended at least 75% of the aggregate number of meetings of the Board of Directors and of each committee of the Board on which they served. All directors are expected to attend Annual Meetings, and all of our directors attended our last Annual Meeting of Stockholders.  
The Company has established Corporate Governance Guidelines, which may be found on the Corporate Governance page of the Company’s website, www.hornbeckoffshore.com . The Corporate Governance Guidelines include the definition of independence used by the Company to determine whether its directors and nominees for directors are independent, which are the same qualifications prescribed under the NYSE Listing Standards. Pursuant to the Company’s Corporate Governance Guidelines, our non-management directors are required to meet in separate sessions without management on a regularly scheduled basis, but no less than four times a year. Generally, these meetings occur as an executive session without the management director in attendance in conjunction with regularly scheduled meetings of the Board throughout the year. If the non-management directors include directors that are not independent directors (as determined by our Board), the independent directors are required to meet in at least one separate session annually that includes only the independent directors. Because the Chairman of the Board is also a member of management, the non-management directors’ and independent directors’ separate sessions are presided over by the Lead Independent Director or, in his absence, by an independent director elected by a majority of the independent directors.  
Committees of the Board of Directors  
Audit Committee  
The Board of Directors has established an audit committee currently comprised of Ms. Melcher and Messrs. Hunt, Krablin, Stewart, and Swyka with Ms. Melcher as Chair. The audit committee operates under a written charter adopted by the Board of Directors. The Board has determined that each director currently serving on the audit committee is

8



independent for purposes of Section 10A(m)(3) of the Exchange Act, and Section 303A.07 of the NYSE Listed Company Manual and satisfies the financial literacy requirements of the NYSE. The Board has also determined that each of Ms. Melcher and Messrs. Krablin and Swyka qualifies as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K of the Exchange Act. Ms. Melcher and Messrs. Krablin and Swyka are financially literate and have accounting or related financial management expertise, as described in their biographical information under “Director Nominees and Voting” above. The audit committee met five times during 2016 and took action by unanimous written consent once in 2016 .  
In addition to certain duties prescribed by applicable law, the audit committee is charged, under its written charter, to select and engage the independent public accountants to audit our annual financial statements, subject to stockholder ratification. The audit committee also establishes the scope of, and oversees the annual audit and approves any other services provided by public accounting firms. Furthermore, the audit committee provides assistance to the Board in fulfilling its oversight responsibility to the stockholders, potential stockholders, the investment community and others relating to the integrity of our financial statements, our compliance with legal and regulatory requirements, the independent auditor’s qualifications and independence, the performance of our internal audit function and independent auditor, and overseeing our system of disclosure controls and procedures and system of internal controls regarding finance, accounting, legal compliance and ethics that management and the Board have established. In doing so, it is the responsibility of the audit committee to maintain free and open communication among the audit committee, our independent auditors, the internal audit function and management of the Company. See “Audit Committee Report” below for further information on the functions of the audit committee.  
Compensation Committee  
The Board of Directors has established a compensation committee currently comprised of Messrs. Meyers, Rynd, Stewart and Swyka, with Mr. Stewart as Chair. The compensation committee operates under a written charter adopted by the Board of Directors. In addition to certain duties prescribed by applicable law, the compensation committee is charged, under its written charter, to address all forms of compensation of the Company’s executive officers and directors. The compensation committee approves and monitors annual executive and director compensation for each year and as part of the Company’s annual budget process. The compensation committee has sole authority to retain compensation consultants and may not form or delegate authority to subcommittees without Board approval. See “Compensation Discussion and Analysis” below for additional information on the Company’s procedures for consideration and determination of executive and director compensation.  
Our Board has determined that each member of the compensation committee meets the independence requirements of the NYSE. The compensation committee met twice during 2016 and took action by unanimous written consent once in 2016 .  
Nominating/Corporate Governance Committee  
Our Board of Directors has also established a nominating/corporate governance committee, currently comprised of Messrs. Hunt, Krablin, Rynd and Stewart, with Mr. Hunt as Chair. In addition to certain duties prescribed by NYSE listing requirements, the committee is charged, under its written charter, to develop, review and recommend to the Board a set of corporate governance principles for the Company, and to identify, review and recommend to the Board possible candidates for Board membership.  
Our Board has determined that each member of the nominating/corporate governance committee meets the independence requirements of the NYSE. The nominating/corporate governance committee met twice during 2016 and did not act by unanimous written consent in 2016 .  
Availability of Certain Committee Charters and Other Information  
The charters for our audit, compensation and nominating/corporate governance committees, as well as our Corporate Governance Guidelines, Procedures for Communication with Directors, Executive Officer Code of Conduct and Code of Business Conduct and Ethics for Members of the Board of Directors, can all be found, free of charge, on the Corporate Governance page of the Company’s website, www.hornbeckoffshore.com . The code of conduct, titled "Navigating with Integrity," is applicable to all employees, including Executive Officers and, accordingly, to our Chief Executive Officer and to our Chief Financial Officer, who is our principal financial and accounting officer. We intend to disclose any changes to or waivers from the provisions of "Navigating with Integrity" or our Executive Officer Code of Conduct that would otherwise be required to be disclosed under Item 5.05 of a Form 8-K on our website. We will also provide printed copies of these materials to any stockholder or other interested person upon request to Hornbeck Offshore Services, Inc., Attn: Samuel A. Giberga, General Counsel and Chief Compliance Officer, 103 Northpark Boulevard, Suite

9



300, Covington, Louisiana 70433. The information on our website is not, and shall not be deemed to be, a part of this report or incorporated into this or any other filings we make with the Securities and Exchange Commission, or the Commission.  
We also make available on our website, free of charge, access to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements, and any amendments to those reports and statements, as well as other documents that we file with or furnish to the Commission pursuant to Sections 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such documents are filed with, or furnished to, the Commission.  
Nomination Process  
It is our Board of Director’s responsibility to nominate members for election or re-election to the Board and for filling vacancies on the Board that may occur between annual meetings of stockholders. The nominating/corporate governance committee assists the Board by identifying and reviewing potential candidates for Board membership consistent with criteria approved by the Board. The nominating/corporate governance committee also annually recommends qualified candidates (which may include existing directors) for approval by the Board of a slate of nominees to be proposed for election or re-election to the Board at the annual meeting of stockholders. Having considered the qualifications of these individuals, in February 2017 , the nominating/corporate governance committee approved the Class III director candidates, and recommended to the Board of Directors the re-election of the three candidates nominated above.  
As provided in the Company’s Bylaws, the Board is authorized to nominate and elect a new director when a vacancy occurs between annual meetings of stockholders. In the event of a vacancy on the Board between annual meetings of the Company’s stockholders, the Board may request that the nominating/corporate governance committee identify, review and recommend qualified candidates for Board membership for Board consideration to fill such vacancies, if the Board determines that such vacancies will be filled. The Company’s Bylaws require at least four directors and allow for up to nine directors. At present, the Company has nine directors. The Board is permitted by the Bylaws to create a new directorship upon the affirmative vote of 66  2 / 3 % of the directors then in office and to fill existing or newly created directorship slots by a majority vote of the directors then in office. However, the number may be decreased below four or increased above nine only by the vote of holders of at least 80% of the shares entitled to vote thereon or the unanimous vote of the Board of Directors.  
When formulating its recommendations for potential Board nominees, the nominating/corporate governance committee seeks and considers advice and recommendations from management, other members of the Board and may seek or consider advice and recommendations from consultants, outside counsel, accountants, or other advisors as the nominating/corporate governance committee or the Board may deem appropriate.  
Board membership criteria, which are disclosed in the Company’s Corporate Governance Guidelines on the Corporate Governance page of the Company’s website, www.hornbeckoffshore.com , are determined by the Board, with input from the nominating/corporate governance committee. The Board is responsible for periodically determining the appropriate skills, perspectives, experiences, and characteristics required of Board candidates, taking into account the Company’s needs and current make-up of the Board. This assessment should include appropriate knowledge, experience, and skills in areas deemed critical to understanding the Company and its business; personal characteristics, such as integrity and judgment; and the candidate’s commitments to the boards of other companies. While the Board does not have a formal policy with respect to diversity of potential Board nominees, the nominating/corporate governance committee considers the impact a potential Board nominee would have in terms of increasing the diversity of the Board with respect to professional experience, background, viewpoints, skills and areas of expertise. The resulting diversity of the Board allows each member of the Board an opportunity to provide specific input to Board decisions in his or her respective area of expertise. Each Board member is expected to ensure that other existing and planned future commitments do not materially interfere with the member’s service as a director and that he or she devotes the time necessary to discharge his or her duties as a director. The Board believes the qualification guidelines included as Exhibit A to the Company’s Corporate Governance Guidelines are currently appropriate, but it may change these guidelines as the Company’s and the Board’s needs warrant.  
Nominations for Directors  
The nominating/corporate governance committee will consider candidates for director nominees that are recommended by stockholders of the Company in the same manner as Board recommended nominees, in accordance with the procedures set forth in the Bylaws. Any such nominations should be submitted to the Board of Directors, care of the Corporate Secretary, Hornbeck Offshore Services, Inc., 103 Northpark Boulevard, Suite 300, Covington, Louisiana 70433 and be accompanied by the following information:  

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appropriate biographical information, a statement as to the qualifications of the nominee and any other information relating to such nominee that is required to be disclosed pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and
the name(s) and address(es) of the stockholder(s) making the nomination and the number of shares of the Company’s common stock that are owned beneficially and of record by such stockholder(s).
The written recommendation should be submitted within the time frame described under the caption “Stockholder Proposals” above.  
Communications with the Board of Directors  
The Board of Directors, of which a majority are independent, has unanimously approved a process for stockholders, or other interested persons, to communicate with the Board of Directors. This process is located on the Corporate Governance page of the Company’s website, www.hornbeckoffshore.com . The relevant document is titled “Procedures for Communication with Directors.”  
In addition, stockholders, or other interested persons, wishing to communicate with our Board of Directors for anonymous complaints about accounting, internal controls and auditing issues may call the Company’s toll-free Ethics Helpline at 1-800-506-6374 as more particularly described on the Compliance link found on the Company’s website, www.hornbeckoffshore.com . Online reports may also be made anonymously by accessing our ethics reporting procedure available at www.hoscompliance.com . Our audit committee monitors these calls and online reports, if any. All calls are documented, and those reports that are deemed to be substantive will be passed on to the Board. Stockholders, or other interested persons, calling the hotline should provide a sufficiently detailed description of the nature of the matter that the person wishes to communicate with the Board, as well as a name, telephone number, email address, or other contact information so that the Company can either respond to the communication or obtain additional information about the matter.
Proposal No. 2 – Selection and Ratification of the Independent Registered Public
Accountants and Auditors  
Our audit committee and Board of Directors seek stockholder ratification of the reappointment of Ernst & Young LLP to act as the independent registered public accountants and auditors of our consolidated financial statements for the 2017 fiscal year. If the stockholders do not ratify the appointment of Ernst & Young LLP, the audit committee will reconsider this appointment. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting to respond to appropriate questions, and those representatives will also have an opportunity to make a statement if they desire to do so.  
The affirmative vote of a majority of the shares of common stock entitled to vote and represented in person or by proxy at a meeting at which a quorum is present is required to ratify the selection of the independent auditors.  
The Board of Directors unanimously recommends that the stockholders vote “FOR” the ratification of the reappointment of Ernst & Young LLP as the Company’s independent registered public accountants and auditors for fiscal year 2017 .
Independent Auditors and Fees  
Ernst & Young LLP, certified public accountants, began serving as the Company’s independent auditors in 2002. The audit committee approved the reappointment of Ernst & Young LLP as independent registered public accountants and auditors for the 2017 fiscal year, subject to ratification by the stockholders.  
The following table presents fees for professional audit services rendered by Ernst & Young LLP for the audit of the Company’s annual financial statements for the years ended December 31, 2016 and 2015 , and fees billed for other services rendered by Ernst & Young LLP during those periods.
 
Year Ended December 31,
 
2016
 
2015
Audit fees (1)
$
458,348

 
$
475,624

Audit related fees (2)
57,956

 
44,551

Tax fees (3)
280,364

 
293,730

Total
$
796,668

 
$
813,905

 
 

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(1)
Audit fees: Consists of fees billed for professional services rendered for the audit of the Company’s consolidated financial statements, for the review of the interim condensed consolidated financial statements included in quarterly reports, services that are normally provided by Ernst & Young LLP in connection with statutory and regulatory filings or engagements and attest services, except those not required by statute or regulation. Audit fees for 2015 included $11,500 related to our 2015 registration statements.
(2)
Audit related fees: Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.” These services include accounting consultations in connection with acquisitions, attest services that are not required by statute or regulation, and consultations concerning financial accounting and reporting standards.
(3)
Tax fees: Consists of tax compliance and preparation and other tax services. Tax compliance and preparation consists of fees billed for professional services related to federal, state and international tax compliance, assistance with tax audits and appeals, assistance related to the impact of mergers and acquisitions, and tax return preparation. Other tax services consist of fees billed for other miscellaneous tax consulting and planning.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors.  
The audit committee is responsible for appointing, setting compensation, and overseeing the work of the independent auditors. The audit committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent auditors. Requests for approval are generally submitted at a meeting of the audit committee. The audit committee may delegate pre-approval authority to a committee member, provided that any decisions made by such member shall be presented to the full committee at its next scheduled meeting.  
Proposal No. 3 – Advisory Vote on Executive Compensation  
In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, Section 14A of the Exchange Act and the preference for annual non-binding advisory votes on executive compensation expressed by our stockholders at the 2011 Annual Meeting, the Company is providing its stockholders the opportunity to cast a non-binding advisory vote on the compensation of our named executive officers. This vote is commonly referred to as a “Say-on-Pay” vote.
As more fully described in the “Compensation Discussion and Analysis” section of this Proxy Statement, the Company’s compensation programs are structured to align the interests of our executive officers with the interests of stockholders. As a result, our compensation programs are designed to attract, reward and retain key executives who are critical to the Company’s long-term success. Under these programs, a significant portion of each executive officer’s compensation opportunities are generally based on the achievement of specific annual and long-term corporate goals that enhance stockholder value. 
The compensation committee reviews the compensation programs for executive officers to ensure that they achieve the desired goals of aligning the Company’s executive compensation structure with stockholders’ interests and maintaining competitive market practices. The compensation committee has historically used the following three non-discretionary performance measures as cash incentive compensation targets: (i) earnings before interest, taxes, depreciation and amortization, or EBITDA, (ii) operating margin and (iii) safety record. The compensation committee may elect to exclude certain noncash or nonrecurring items from the measures above. Examples of such adjustments to EBITDA used by the compensation committee in the past include losses on early extinguishment of debt, stock-based compensation expense and interest income, as applicable.
The compensation committee uses a variety of vehicles and vesting periods to deliver long-term incentive awards to executive officers. For example, during 2015 and 2016 , time-vest and performance-based restricted stock unit awards, or RSUs and cash-settled phantom stock unit awards, or PSUs, were granted to executive officers. Both internal measures and measures of Company performance relative to peers have been used as a basis on which to award long-term compensation to executive officers. 
The Company is seeking your approval, on an advisory basis, of the compensation of our named executive officers as described in this Proxy Statement, including the “Compensation Discussion and Analysis.”  
This Say-on-Pay vote is advisory; therefore it will not be binding on the Company, our Board of Directors or the compensation committee. However, the compensation committee and Board of Directors value constructive input from our stockholders on executive compensation and other governance topics and encourage all stockholders to vote their shares on this matter. The compensation committee and Board of Directors considered the affirmative results of last year’s Say-on-Pay vote when evaluating executive compensation programs in 2017 and will consider the outcome of this year’s vote when evaluating future executive compensation programs.  
The Board of Directors unanimously recommends that the stockholders vote “FOR” the approval of the compensation for the Company’s named executive officers as set forth in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables and narrative in this Proxy Statement.

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EXECUTIVE OFFICERS  
The names, ages as of April 17, 2017 , position and other information concerning our executive officers are set forth   below.
Name
 
Age
 
Position
Todd M. Hornbeck
 
48
 
Chairman, President and Chief Executive Officer (CEO)
Carl G. Annessa
 
60
 
Executive Vice President and Chief Operating Officer (COO)
James O. Harp, Jr.
 
56
 
Executive Vice President and Chief Financial Officer (CFO)
Samuel A. Giberga
 
55
 
Executive Vice President, General Counsel (GC) and Chief Compliance Officer (CCO)
John S. Cook
 
48
 
Executive Vice President, Chief Commercial Officer (CCO) and Chief Information Officer (CIO)
Timothy P. McCarthy
 
49
 
Executive Vice President and Chief Human Resources Officer (CHRO)
 
Todd M. Hornbeck has served as our President and as a director since he co-founded the Company in June 1997. Until February 2002, he also served as Chief Operating Officer. In February 2002, he was appointed Chief Executive Officer. In May 2005, he was appointed Chairman of the Board. Until February 2007, he also served as our Secretary. Please refer to “Proposal No. 1 - Election of Directors - Director Nominees and Voting” above for additional information with respect to Mr. Todd Hornbeck’s background and experience.  
Carl G. Annessa has served as our Chief Operating Officer since February 2002. Mr. Annessa was appointed Executive Vice President in February 2005. Prior to that time, Mr. Annessa served as our Vice President of Operations beginning in September 1997. Mr. Annessa is responsible for executive oversight of our fleet operations and for oversight of design and implementation of our vessel construction programs. Prior to joining us, he was employed for 17 years by Tidewater Inc. (NYSE:TDW) in various technical and operational management positions, including management of large fleets of offshore supply vessels in the Arabian Gulf, Caribbean and West African markets, and was responsible for the design of several of Tidewater’s vessels. Mr. Annessa was employed for two years by Avondale Shipyards, Inc. as a naval architect before joining Tidewater. Mr. Annessa received a degree in naval architecture and marine engineering from the University of Michigan in 1979.  
James O. Harp, Jr. has served as our Chief Financial Officer since January 2001. Mr. Harp was appointed Executive Vice President in February 2005. Prior to that time, Mr. Harp served as our Vice President beginning in January 2001. Before joining us, Mr. Harp served as Vice President in the Energy Group of RBC Dominion Securities Corporation, an investment banking firm, from August 1999 to January 2001, and as Vice President in the Energy Group of Jefferies & Company, Inc., an investment banking firm, from June 1997 to August 1999. During his investment banking career, Mr. Harp worked extensively with marine-related oil service companies, including as our investment banker in connection with our private placement of common stock in November 2000. From July 1982 to June 1997, he held roles of increasing responsibility in the tax section of Arthur Andersen LLP, ultimately serving as a Tax Principal, and had a significant concentration of international clients in the oil service and maritime industries. Since April 1992, he has also served as Treasurer and Director of SEISCO, Inc., a privately held seismic brokerage company that he co-founded. Mr. Harp is an inactive certified public accountant in Louisiana.  
Samuel A. Giberga has served as our General Counsel since January 2004. Mr. Giberga was appointed Executive Vice President and Chief Compliance Officer in June 2011. Prior to that time, Mr. Giberga served as our Senior Vice President beginning in February 2005. Prior to joining us, Mr. Giberga was engaged in the private practice of law for 14 years. Mr. Giberga was a partner in the New Orleans-based law firm of Correro, Fishman, Haygood, Phelps, Walmsley & Casteix from February 2000 to December 2003 and served as a partner at Rice, Fowler, Kingsmill, Vance & Flint, LLP from March 1996 to February 2000. During his legal career, Mr. Giberga has worked extensively with marine and energy service companies in a variety of contexts with a significant concentration in general business, international and intellectual property matters. He was also a co-founder of Maritime Claims Americas, L.L.C., which operates a network of correspondent offices for marine protection and indemnity associations throughout Latin America. From June 2005 through February 2007, Mr. Giberga served as a director of the American Steamship Owners Mutual Protection and Indemnity Association Inc. (the American Club), a mutual protection and indemnity association in which the Company’s principal operating subsidiaries were then entered as members. Mr. Giberga occasionally serves as an adjunct professor in intellectual property law matters at Loyola University Law School in New Orleans.  
John S. Cook was appointed Executive Vice President and Chief Commercial Officer in February 2013. Prior to that time, Mr. Cook served as our Senior Vice President beginning in May 2008. Mr. Cook was initially designated an executive officer and appointed a Vice President in February 2006. Mr. Cook has also served as our Chief Information

13



Officer since May 2002 and continues to serve in that role. Before joining us, Mr. Cook held roles of increasing responsibility in the business consulting section of Arthur Andersen LLP from January 1992 to May 2002, ultimately serving as a Senior Manager. During his consulting career, Mr. Cook assisted numerous marine and energy service companies in various business process and information technology initiatives, including strategic planning and enterprise software implementations. Mr. Cook is an inactive certified public accountant in Louisiana and is a member of the American Institute of Certified Public Accountants and the Society of Louisiana Certified Public Accountants.
Timothy P. McCarthy has served as our Chief Human Resources Officer since 2012. Mr. McCarthy was appointed Executive Vice President in June 2015. Prior to that time, Mr. McCarthy served as our Senior Vice President beginning in July 2012. Mr. McCarthy served as our Vice President and Chief Accounting Officer from March 2008 to July 2012. He joined us in May 2002 as Corporate Controller and served in that capacity until March 2008. Prior to joining us, he served in a variety of capacities, most recently as an Experienced Manager in the assurance practice section of Arthur Andersen LLP from July 1994 to May 2002. Previously, he served in the foreign joint interest accounting group with Ocean Drilling and Exploration Company. He is a certified public accountant in Louisiana and is a member of the American Institute of Certified Public Accountants, the Society of Louisiana Certified Public Accountants and the Society for Human Resource Management.
EXECUTIVE COMPENSATION  
Compensation Discussion and Analysis  
The prolonged downturn in market conditions affecting the Company's operations continued unabated during 2016. In addition to presenting significant operating challenges, these conditions have impacted and are expected to continue to impact how the Company compensates its named executive officers. Historic factors and considerations used by the Company were tested in 2016 as targets, benchmarks and peer groups were all affected over the course of the year. Compensation planning for 2017 has been no less challenging. While it is the Company's strong desire to adhere to its traditional approach of rewarding its executives, it is clear from events in 2016 and continuing through the present that fixed plans are likely to be frustrated by an industry landscape that continues to change. Consequently, this Compensation Discussion and Analysis endeavors to fairly explain our approach to compensation as we began 2016, however, that approach appeared less relevant to the Company as it ended the year and planned for 2017 compensation. Concepts that the Company traditionally considered to be germane to evaluating executive performance such as EBITDA and operating margin, appeared to be less relevant as short-term measures. Also, peer group composition for purposes of benchmarking or establishing relevant performance targets have deteriorated as several companies have undergone restructuring or bankruptcies. Accordingly, this year's Compensation Discussion and Analysis is best understood as an approach to compensation that the Company endeavored to implement in 2016, which was consistent with prior year's practices, but which by year-end appeared unsustainable in several respects.
Philosophies and objectives of the Company’s executive compensation program  
The Company’s executive compensation programs reflect its entrepreneurial culture and philosophy that executives, including our named executive officers, 1) are hired to devise and execute strategies that create long-term stockholder value consistent with the Company’s mission statement and our core values; and 2) are appropriately rewarded for doing so. The objectives of our executive compensation programs are 1) to attract and retain executives that possess abilities essential to the Company’s long-term competitiveness and success; 2) to support a performance-oriented environment; and 3) to create a culture of ownership allowing executives to share meaningfully with stockholders in the long-term enhancement of stockholder value.  
The Company’s compensation program for executive officers rewards the following attributes:  
Financial Performance . The Company rewards decision-making that is designed to achieve operating results that increase stockholder value over the long-term and compare favorably to the operating results of our peers.
Excellence . The Company expects its executive officers to discharge their duties with excellence and professionalism. The Company expects a high level of enthusiasm, integrity, diligence, analytical rigor, business acumen and attention to detail.
Leadership . Executives of the Company are expected to demonstrate leadership.
Teamwork . Executives are evaluated as members of a team, not merely as individuals.
Loyalty . We promote a culture of ownership throughout the Company and reward employees, including our named executive officers, who remain dedicated to the Company over the long-term with equity ownership opportunities as well as other forms of long-term compensation.

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Prudent Operating Practices . The Company expects executive decision-making that promotes safe, effective and prudent work practices.
The elements of compensation used by the Company  
The Company’s executive compensation program is comprised of the following elements:  
Base Salary
Cash Incentive Compensation and, when appropriate, Cash Bonuses
Equity Incentive Compensation
Benefits and Certain Perquisites
General . The compensation committee considers Company information, historical compensation information about each executive officer and data derived from market sources, including data regarding peer companies, as points of reference for the appropriate mix of compensation elements. Historically, total annual cash compensation, which consists of base salary, cash incentive compensation and bonuses, has been targeted above the median of the Industry Peer Group (as defined below) while equity incentive compensation has been targeted at or above the seventy-fifth percentile of the Industry Peer Group. Total direct compensation, which includes both total annual cash compensation and equity incentive compensation, but excludes other compensation, has been targeted historically between the sixtieth and seventy-fifth percentiles of the Industry Peer Group for our named executive officers.  
A discussion concerning how we conduct comparisons with other companies, including our use of compensation consultants and our Industry Peer Group, is provided in the sections entitled “ How and when we have used a compensation consultant ” and “ How and why we benchmark executive compensation against our peers ” below.  
Base Salary . The Company pays base salary to executive officers in order to compensate them for day-to-day services rendered to the Company over the course of each year. Salaries for executive officers are reviewed annually by the compensation committee. In determining individual salaries, the compensation committee considers the scope of the executive’s job responsibilities, unique skill sets and experience, individual contributions, market conditions, current compensation as compared to peer and competitor companies, including the Industry Peer Group, and the Company’s annual financial budget. In addition, the compensation committee considers the overall performance of the Company and the recommendations of the Chief Executive Officer concerning the compensation of the other executive officers.
As a result of weak market conditions, effective January 1, 2015, the named executive officers voluntarily offered to reduce their base salaries. Such reduction was subsequently ratified by the compensation committee. For the period of the industry downturn, the chief executive officer voluntarily agreed to reduce his base salary by 15%, whereas, each of the other executive officers voluntarily reduced his base salary by 10%. These base salary reductions also have the effect of reducing each officer's annual non-equity incentive compensation and long-term incentive grants, which are based on a multiple of base salary. The 2016 and 2015 base salaries in the table below reflect the base salaries for the Company's named executive officers, which continue to be reduced from 2014 levels.
Executive
 
Title
 
2016 Base
Salary
 
2015 Base
Salary
Todd M. Hornbeck
 
Chairman, President & CEO
 
$
637,500

 
$
637,500

Carl G. Annessa
 
Executive Vice President & COO
 
360,000

 
360,000

James O. Harp, Jr.
 
Executive Vice President & CFO
 
360,000

 
360,000

Samuel A. Giberga
 
Executive Vice President, GC & CCO
 
292,500

 
292,500

John S. Cook
 
Executive Vice President, CCO & CIO
 
292,500

 
292,500

 
Cash Incentive Compensation and Bonuses . The Company utilizes non-equity incentive compensation, also referred to herein as "cash incentive compensation," in order to incentivize the achievement of specific results each year and the relative out-performance of our peers for the applicable measurement period. The percentage of base salary that can be achieved and the program for awarding annual cash incentive compensation is identical for all of our executive officers, as set forth in the table below. The Company's compensation program has historically called for the award of target cash incentive compensation for relative achievement based on four components: (i) EBITDA, (ii) operating margin, (iii) total recordable incident rate, or TRIR, and (iv) the discretion of the compensation committee.  
The EBITDA component represented 37.5% of the aggregate potential cash incentive compensation. The operating margin component and the safety component each represented 18.75% of the aggregate potential cash incentive

15



compensation. The discretionary component represented 25% of aggregate potential cash incentive compensation. We refer to each of these percentages herein as an "Applicable Percentage." Excluding the discretionary component, the relative weighting of the three objective criteria are 50%, 25% and 25% for the EBITDA, operating margin and safety components, respectively.
For the non-discretionary components, achievement of a component "threshold" metric earns cash incentive compensation of 50% of base salary multiplied by the Applicable Percentage, achievement of the component "target" metric earns cash incentive compensation of 100% of base salary multiplied by the Applicable Percentage, and achievement of the component "maximum" metric earns cash incentive compensation of 200% of base salary multiplied by the Applicable Percentage, with the cash incentive compensation for the EBITDA, operating margin and safety components interpolated on a straight-line basis for target results between the threshold metric and the target metric, or the target metric and the maximum metric, as applicable.
The operating margin target is based on the operating margin of the Company’s Public Company OSV Peer Group. More specifically, this metric is based on where the Company’s operating margin would rank when included in an ordinal ranking of its Public Company OSV Peer Group based on operating margin, as set forth in more detail in the table below. The compensation committee determined that this type of metric structure incentivizes management to keep operating margins high on a relative basis to its peers, while avoiding anomalous situations not in keeping with this intent.
The safety target uses annual industry safety benchmarks of IADC, OMSA, ISOA and IMCA. Since the Company has historically outperformed these industry safety benchmarks, the compensation committee decided to condition its maximum incentive for this component on the Company outperforming by 10% its own trailing three-year average TRIR.
The Company believes that the short-term performance-vesting criteria included in the executive compensation structure is well-designed to transcend cycles and, when coupled with the voluntary reductions in annual total direct compensation mentioned previously, should more than sufficiently align the named executive officers’ realized pay with the interest of our shareholders. Nevertheless, in further response to the continued weak market conditions, the named executive officers voluntarily proposed temporary adjustments to their own short-term cash incentive bonus vesting criteria for 2016. Such voluntary proposals were subsequently ratified by the compensation committee on February 16, 2016.
The compensation committee did not change the Applicable Percentages of the various components and did not modify the mechanics of calculating the target accrual metrics for the adjusted EBITDA, operating margin, safety or discretionary components for 2016. However, in order to enhance the performance vesting criteria for 2016, the compensation committee modified the mechanics of calculating the threshold and maximum metrics (other than for the discretionary component) as discussed in more detail below.
Threshold vesting for the adjusted EBITDA component, which is usually 75% of target EBITDA, was eliminated for 2016. Maximum vesting for the operating margin component, which usually equals the Top 20% of our 11 public OSV peers, was eliminated for 2016. Maximum vesting for the safety component, which usually equals 10% or better than our most recent 3-year trailing average TRIR was eliminated for 2016. These adjustments provided additional challenges to achieving a full target bonus of 100% of the voluntarily reduced base salary. The adjustments also effectively capped the named executive officer’s maximum bonus at 150% of target levels (rather than at 200% as in prior years). The adjustments also effectively capped the named executive officer's potential bonus at 50% of target levels in the event the target metric for the EBITDA component was not achieved for 2016. Like the temporary decreases in base salaries, the Company will annually revisit whether and when to restore these vesting criteria adjustments back to their previous levels whenever market conditions return to normal.

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The following table sets forth the threshold, target and maximum metrics as a percentage of base salary and relative weighting that were used for each non-discretionary component of cash incentive compensation for 2016 .
Component
Weighting
Threshold Metric (50%)
Target Metric (100%)
Maximum Metric (200%)
EBITDA
50%
Not Applicable
100% of the EBITDA Target
125% of the EBITDA Target
Operating Margin
25%
Top 66.67% of the Company’s Public Company OSV Peer Group
Top 50% of the Company’s Public Company OSV Peer Group
Not Applicable
Safety
25%
TRIR less than the lowest average of the four annual safety benchmarks for any year falling within the most recent three years compiled by IADC, OMSA, ISOA and IMCA
TRIR less than the lowest of any one of the four annual safety benchmarks for any year falling within the most recent three years compiled by IADC, OMSA, ISOA or IMCA
Not Applicable
Our Public Company OSV Peer Group of 11 companies consists of SEACOR Holdings Inc. (NYSE:CKH), GulfMark Offshore, Inc. (NYSE:GLF), Tidewater Inc. (NYSE:TDW), Farstad Shipping ASA (NO:FAR), Solstad Offshore ASA (NO:SOFF), Deep Sea Supply Plc (NO:DESSC), DOF ASA (NO:DOF), Siem Offshore, Inc. (NO:SIOFF), Groupe Bourbon SA (GBB:FP), Havila Shipping ASA (NO:HAVI), and Eidesvik Offshore ASA (NO:EIOF). 
A discussion concerning our use of EBITDA, operating margin and total recordable incident rate in connection with compensation-related matters is found in the section entitled “ How and why we use our performance measures to determine whether incentive cash compensation has been earned.
For 2016 , the applicable EBITDA target was set at $168 million. The Company reported EBITDA of $51.4 million, or approximately 30% of the target, which did not meet the threshold vesting metric for this component. The Company’s operating margin was (20.2)%, or sixth overall out of 12 in comparison with the Company's 11-member Public Company OSV Peer Group, and met the targeted median of the comparably calculated average operating margin achieved by such group. The Company’s total recordable incident rate was 0.26, which was better than the target metric of the lowest TRIR achieved by OMSA, IADC, ISOA and IMCA in the last three years, which was 0.31 (where a lower percentage is indicative of fewer incidents). This performance entitled each of the executive officers to receive cash incentive compensation in accordance with the vesting metrics allowed under the first three non-discretionary components of the program described above, which represent 37.5%, 18.75% and 18.75% of the aggregate potential cash incentive compensation, respectively. The relative weighted-average performance of the three objective components was 50% of base salaries for 2016. The final component of cash incentive compensation, comprising 25% of the aggregate potential cash incentive pay that can be earned, is awarded at the discretion of the compensation committee. For 2016 performance, the compensation committee considered the performance of each executive individually as well as the executive team as a whole, together with recommendations of the chief executive officer, in determining whether, and if so, to what extent the discretionary award would be made. The compensation committee took into account the continued progress toward the completion of the fifth newbuild program, the Company's overall performance in relation to its peers and the continued actions taken by the executive management team to reduce costs as the current down cycle persisted. In its review, the compensation committee also took into account macro-economic factors beyond the control of the Company, including the substantial industry downturn being experienced that has contributed to the precipitous decline in the Company's stock price. Considering all of these factors and despite the compensation committee's recognition that management had once again outperformed its peers across a host of key performance metrics even in the downturn, based on such downturn and its effect on the Company's performance, the compensation committee again elected not to award any portion of the 25% discretionary component of cash incentive compensation. This resulted in a combined cash incentive compensation payout of 50% of base salaries for 2016.
In extraordinary circumstances, such as the Company’s initial public offering of common stock in 2004, the Sea Mar acquisition in 2007 and the 2013 sale of the Downstream segment, the compensation committee can, and has, awarded event-driven or accomplishment-specific bonuses to the executive officers independent of the cash incentive compensation derived under the formulaic approach. No such bonuses were awarded to the named executive officers for 2016 .
Equity Incentive Compensation. The Company believes that the interests of stockholders are best served when a meaningful portion of executive and management compensation is tied to equity ownership. Pursuant to the Company’s incentive compensation plan, the compensation committee is authorized to grant stock options, stock appreciation rights,

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RSUs, PSUs, and other equity-based awards. The Company has historically used a combination of stock options, RSUs and PSUs as a means to incentivize long-term employment and performance and to align individual compensation with the objective of building long-term stockholder value. The Company uses equity incentive compensation, with vesting based on time, performance or both, as a means of encouraging a “culture of ownership” among employees, including our named executive officers. The compensation committee believes that by using equity forms of incentive compensation, the interests of the Company’s stockholders and the Company’s management employees remain aligned over the long-term. The compensation committee exercises discretion in determining the number and type of equity awards to be given to our executive officers as long-term incentive compensation. In exercising its discretion, the compensation committee considers a number of factors, including individual responsibilities, competitive market data, stock price performance, and individual and Company performance. Subject to the express provisions of the incentive compensation plan and direction from the Board, the compensation committee is authorized, among other things, (i) to select the executive officers to whom equity awards will be granted; (ii) to determine the type, size, terms and conditions of equity awards to executive officers including vesting provisions and whether such equity awards will be time or performance-based; and (iii) to establish the terms for treatment of equity awards upon a termination of employment of executive officers.  
The compensation committee’s practice has been to award RSUs and PSUs based on a price equal to the NYSE’s closing price of the Company’s common stock on the effective date of the grant. Such grants are typically made to executive officers at the February meetings of the Board and the compensation committee each year, which usually precede the public announcement of the Company’s fourth quarter results for the prior year by a few days.  
For awards made in the 2016 grant process, the compensation committee considered compensation studies previously conducted by our compensation consultant, Pearl Meyer & Partners, or PMP, retained in late 2010, again for a limited update in 2012 and for a full update in late 2013, relative to our Industry Peer Group. In February 2014, the compensation committee changed the ratio of time-based to performance-based awards from 70%-30% to 60%-40% and this ratio was maintained in 2015 and 2016. The ratio of time-based to performance-based awards, while reduced, still favors time-based awards, emphasizing the retention quality of equity-based compensation. This rebalancing brought the ratio in line with the practices of companies with which the Company competes for executive talent. The criteria for achieving our performance-based awards are 1) simple, 2) aligned with criteria more clearly within the control of executive management to affect as opposed to uncontrollable external forces, 3) aligned with criteria used to measure management’s eligibility for cash compensation but over a longer period of time, and 4) focused in part, on the Company’s performance against its most direct public company competitors, which furthers a sense of competitive spirit and differentiation. Based on these studies, in 2016 , the compensation committee awarded performance-based and time-based RSUs and PSUs that it believes are likely to attain the dual objectives of stockholder alignment and long-term retention.
Performance-based PSUs granted to executive officers in February 2016 may vest from 0% to 150% of the target number of units, on the third anniversary of the grant date, based on the achievement of pre-defined performance criteria discussed below. These awards are weighted 20%, 50% and 30% for the Adjusted ROIC, relative operating margin and relative safety metrics, respectively.
For the Adjusted ROIC criteria, the performance-based unit awards granted in February 2016 will vest based on the achievement during the three-year measurement period of the following threshold, target and maximum vesting metrics. Achievement of Adjusted ROIC equal to the lesser of (i) the Company's long-term historical average weighted-average cost of capital, or WACC, and (ii) the comparably calculated three-year average Adjusted ROIC of Tidewater Inc. and GulfMark Offshore, Inc. plus 100 basis points will result in the threshold vesting of 50% of the target number of units. Achievement of Adjusted ROIC equal to the Company's long-term historical average WACC plus 200 basis points will result in the vesting of 100% of the target number of units. Achievement of Adjusted ROIC equal to the Company's long-term historical average WACC plus 400 basis points will result in the maximum vesting of 150% of the target number of units. The specific amount of vesting will be interpolated on a straight-line basis for results between the threshold metric and the target metric, or the target metric and the maximum metric, as applicable.
For the operating margin criteria, the performance-based unit awards granted in February 2016 will vest based on the achievement during the three-year measurement period of the following threshold, target and maximum vesting metrics, relative to an ordinal ranking of the Company’s Public Company OSV Peer Group based on comparably calculated three-year average operating margins. Achievement of an operating margin that would place the Company in the top 67% of the Company’s Public Company OSV Peer Group will result in the threshold vesting of 50% of the target number of units. Achievement of an operating margin that would place the Company in the top 50% of the Company’s Public Company OSV Peer Group will result in the target vesting of 100% of the target number of units. Achievement of an operating margin that would place the Company in the top 20% of the Company’s Public Company OSV Peer Group

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will result in the maximum vesting of 150% of the target number of units. The specific amount of vesting will be interpolated on a straight-line basis for results between 67% and 50%, or 50% and 20% of the Company’s Public Company OSV Peer Group ranked by their individual three-year average operating margins, as applicable.
For the safety criteria, the performance-based unit awards granted in February 2016 will vest based on the achievement during the three-year measurement period of the following threshold, target and maximum vesting metrics. Achievement of a total recordable incident rate equal to or less than the lowest three-year average of all four of the comparable industry safety benchmarks set forth by IADC, OMSA, ISOA and IMCA will result in the threshold vesting of 50% of the target number of units. Achievement of a total recordable incident rate equal to or less than the lowest three-year average of any one of the four comparable industry safety benchmarks set forth by IADC, OMSA, ISOA or IMCA will result in the target vesting of 100% of the target number of units. Historically, the Company's total recordable incident rate has been substantially better than the best of any of the four industry safety benchmarks. Accordingly, in order to incentivize continuous improvement in the Company's safety performance, achievement of a total recordable incident rate at least 10% less than the Company’s own trailing three-year average total recordable incident rate for the immediate prior three-year measurement period ended December 31, 2015, comprised of the three consecutive fiscal-year periods ended December 31, 2013, 2014 and 2015, will result in the maximum vesting of 150% of the target number of units. The specific amount of vesting will be interpolated on a straight-line basis for results between the threshold metric and the target metric, or the target metric and the maximum metric, as applicable.
The February 2015 and 2016 awards of time-based and performance-based RSUs and PSUs to our named executive officers were apportioned as set forth in the table below. The quantity of time-based and performance-based RSUs and PSUs granted is determined by dividing the grant value of such awards by the then current stock price. Therefore, during times in which the stock price is high, the quantity of such awards will be lower; and, conversely, during times in which the stock price is low, the quantity of such awards will be higher. While the target grant values of the February 2015 and 2016 awards as of the respective grant dates were equal, the quantity of time-based and performance-based RSUs and PSUs granted increased in 2016, compared to 2015, due to a significant decline in the Company's stock price from the 2015 grant date to the 2016 grant date. For these awards, the target grant values for our chief executive officer and other named executive officers were reduced by 15% and 10%, respectively, commensurate with their voluntarily reduced base salaries for 2015 and 2016. The time-based RSUs and PSUs vest in three equal tranches on the first, second and third anniversary dates of the grant. The performance-based awards cliff vest as described above. The performance-based awards in the following table reflect target award levels.
Executive
 
2015
Time-Based
RSUs
 
2015
Performance-Based
RSUs
 
2016
Time-Based
RSUs
 
2016
Time-Based
PSUs

2016
Performance-Based
PSUs
Todd M. Hornbeck
 
78,812
 
52,541
 
142,017
 
142,017

189,356
Carl G. Annessa
 
32,143
 
21,429
 
57,921
 
57,921

77,228
James O. Harp, Jr.
 
32,143
 
21,429
 
57,921
 
57,921

77,228
Samuel A. Giberga
 
26,116
 
17,411
 
47,061
 
47,061

62,748
John S. Cook
 
26,116
 
17,411
 
47,061
 
47,061

62,748
 
As of December 31, 2016 , the Company had outstanding performance-based RSUs issued in February of 2013, 2014, 2015 and 2016. The Company also had outstanding performance-based PSUs issued in 2016. The awards may vest over periods ranging from February of 2017 to 2019. The table below illustrates the vesting of the performance-based awards for all named executive officers as well as the estimated aggregate vesting that would have occurred for the outstanding awards if the performance measurement date was December 31, 2016 for the performance-based awards granted in February of 2013, 2014, 2015 and 2016.
Grant Year
 
Target Units Granted
 
% of Units To Vest
2013
(1)  
 
524
 
—%
2014
(2)  
 
75,480
 
113%
2015
(3)  
 
130,221
 
91%
2016
(4)  
 
469,308
 
49%
 
 

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(1)
Performance-based RSUs granted to executive officers in February 2013 are dependent on 1) such officer’s service for three, four or five years from the date of grant and 2) the Company’s achievement of three equally-weighted 3-year average key performance indicators on the third, fourth or fifth anniversary of the grant date. This award may vest from 0% to 100% of the target number of shares, based on the achievement of the pre-defined performance criteria. Based on actual results as of the third anniversary of the grant date, these awards vested at 99% on February 5, 2016, with two additional years to achieve the defined performance criteria and vest the remaining 1%, which is currently projected to be forfeited.
(2)
Performance-based RSUs granted to executive officers in February 2014 are dependent on 1) such officer’s service for three years from the date of grant and 2) the Company’s achievement of three 3-year average key performance indicators on the third anniversary of the grant date. This award may vest from 0% to 150% of the target number of shares, based on the achievement of the pre-defined performance criteria. The Company achieved an aggregate vesting of 113% in February 2017.
(3)
Performance-based RSUs granted to executive officers in February 2015 are dependent on 1) such officer’s service for three years from the date of grant and 2) the Company’s achievement of three 3-year average key performance indicators on the third anniversary of the grant date. This award may vest from 0% to 150% of the target number of shares, based on the achievement of the pre-defined performance criteria. Based on internal forecasts as of December 31, 2016, the Company is currently projected to achieve an aggregate vesting of 91% in February 2018 and thus an estimated 9% forfeiture.
(4)
Performance-based PSUs granted to executive officers in February 2016 are dependent on 1) such officer’s service for three years from the date of grant and 2) the Company’s achievement of three 3-year average key performance indicators on the third anniversary of the grant date. This award may vest from 0% to 150% of the target number of units, based on the achievement of the pre-defined performance criteria. Based on internal forecasts as of December 31, 2016, the Company is currently projected to achieve an aggregate vesting of 49% in February 2019 and thus an estimated 51% forfeiture.
In addition to the performance-based RSUs and PSUs discussed above, in February of 2014, 2015 and 2016, the executive officers were granted time-based RSUs, and in February of 2014 and 2016, the executive officers were granted time-based PSUs, all of which are reflected in both the 2016 Summary Compensation Table and the 2016 Outstanding Equity Awards at Fiscal Year End table below.  
Benefits and Perquisites . The Company provides the executive officers and other employees with certain perquisites and other personal benefits as part of providing a competitive executive compensation program and for employee retention. The Company does not gross-up for taxes payable in respect of perquisites received. The following table generally identifies the Company’s benefit plans and identifies those employees who may be eligible to participate. The executive officers participate in the following benefit plans in the same manner that our employees do, except where noted as below:
Benefit Plan
 
Executive
Officers
 
Certain
Managers
 
Full-time
Employees
 
Notes
Medical Insurance
 
X
 
X
 
X
 
(1)
Dental Insurance
 
X
 
X
 
X
 
(1)
Vision Insurance
 
X
 
X
 
X
 
(1)
Employee Assistance Plan
 
X
 
X
 
X
 
 
Life and Disability Insurance
 
X
 
X
 
X
 
(2)
Flexible Spending Accounts
 
X
 
X
 
X
 
 
Employee Stock Purchase Plan
 
X
 
X
 
X
 
 
401(k) Plan
 
X
 
X
 
X
 
 
 
 
(1)
In 2016 , Messrs. Todd Hornbeck, Annessa, Harp, Giberga and Cook had a supplemental medical insurance policy that pays all eligible out-of-pocket medical, dental and vision expenses.
(2)
The executive officers, the Company’s Vice Presidents, and certain other officers have company-paid basic life and accidental death and dismemberment insurance of 1.5 times their salary, up to $300,000. All other employees have company-paid basic life and accidental death and dismemberment insurance of 1.5 times their salary, up to $100,000. In addition, the executive officers, the Company’s Vice Presidents, and certain other officers are eligible to receive disability benefits as long as they are disabled from performing their own occupation. For all other employees, they are entitled to disability benefits up to 36 months if they are disabled from performing their own occupation, and after 36 months they must be unable to work in any occupation.

20



The Company believes it should provide limited perquisites for executive officers. As a result, the Company has historically given nominal perquisites. The following table generally illustrates the perquisites we do and do not provide and identifies those employees who may be eligible to receive them:
Type of Perquisite
 
Executive
Officers
 
Certain
Managers
 
Certain
Full Time
Employees
Company Vehicle
 
X
 
Not offered
 
X
Vehicle Allowance
 
Not offered
 
X
 
X
Supplemental Medical Insurance
 
X
 
Not offered
 
Not offered
Country Club Memberships
 
Not offered
 
Not offered
 
Not offered
Dwellings for Personal Use
 
Not offered
 
Not offered
 
Not offered
Security Services
 
Not offered
 
Not offered
 
Not offered
Supplemental Executive Retirement Program (SERP)
 
Not offered
 
Not offered
 
Not offered
Deferred Compensation Plan
 
X(1)
 
Not offered
 
Not offered
 
 
(1)
A Deferred Compensation Plan was adopted by the Board of Directors during 2007. However, no matching provision has been authorized under the plan and, to date, no executive has availed himself of plan participation.
How the elements of compensation fit into our overall compensation objectives  
Consistent with the Company’s compensation philosophy and objectives discussed above, the compensation committee believes that its use of the primary components of compensation described above provides competitive salaries, allows opportunities for significant cash incentive compensation to encourage short-term performance and establishes significant long-term equity incentive opportunities aligned with stockholder interests.  
The role of the compensation committee  
Our compensation committee is comprised solely of directors who (i) meet the independence requirements of Section 303A of the NYSE Listed Company Manual, the provisions of Section 952 of the Dodd-Frank Act, and any rules or regulations promulgated thereunder, (ii) qualify as “Non-Employee Directors” under Rule 16b-3 of the Exchange Act, and (iii) satisfy the requirements of an “outside director” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code. The compensation committee is responsible for 1) establishing and administering an overall compensation program for our executive officers and approving all compensation for executive officers; 2) establishing and administering the Company’s policies governing annual cash compensation and equity incentive awards for employees other than executive officers and 3) administering the Company’s incentive compensation and certain employee benefit plans. The compensation committee meets multiple times each year to analyze and discuss the Company’s compensation plans, proposals and other compensation-related issues. From time to time, it also engages in informal sessions with and without executive management. These sessions usually coincide with the Company’s annual budget process. At the regular meeting of the compensation committee in February of each year, the compensation committee determines and approves the award, if any, of prior year cash incentive compensation. In addition, at its February meeting, the compensation committee determines the current year’s annual compensation for our executive officers, including the establishment of base salaries, determination of any potential cash incentive compensation targets and participation levels of each named executive officer and approval of long-term incentive compensation awards. When appropriate, the compensation committee recommends to the full Board of Directors compensation or benefit policies or plans or amendments to existing policies or plans and amendments to employment agreements with executive officers. The Chief Executive Officer reviews the performance of the other executive officers and recommends to the compensation committee the base salary, cash incentive compensation, equity incentive compensation and other benefits for such officers. The compensation committee considers the Chief Executive Officer’s recommendations when establishing the base salary, cash incentive compensation, equity incentive compensation and other benefits for the other executive officers.  
The compensation committee analyzes tally sheets that are prepared by management. The purpose of these tally sheets is to compile in one place, segregated by compensation elements, the amount of actual compensation that each of our executive officers was paid in the prior year and the potential compensation proposed to be paid in the current year. The tally sheets help ensure that there is a correlation between the Company’s compensation philosophy and objectives and the actual compensation of our executives. These tally sheets reflect all compensation and related commitments for executive officers, including base salary, annual performance-based cash incentives, cash bonuses, if applicable,

21



outstanding and proposed stock options, restricted stock awards and RSUs, benefits and perquisites. The tally sheets may also include the amounts that our executive officers would receive in the event of a termination in their employment or change in control of the Company. The tally sheets are intended to provide the compensation committee with a comprehensive single point of reference for all of the compensation earned by or proposed for our executives. The tally sheets are provided with benchmarking data for comparable executives in our Industry Peer Group and Direct Peer Group (as defined below). For more information about the companies contained in our Industry Peer Group and Direct Peer Group, please see the section below entitled, “ How and why we benchmark executive compensation against our peers.  
How and when we have used a compensation consultant  
The compensation committee has the authority to directly engage independent consultants. Generally, consultants have provided advice on compensation strategy and program design. Consultants have also been used to compare the Company’s compensation programs with those of other companies.  
In late 2010, the compensation committee evaluated several independent consultants and engaged PMP to provide advice on the compensation strategy and program design as well as to review and recommend an updated peer group in 2011. PMP was engaged again in late 2013 to perform a full compensation review and analysis for 2014 recommendations, including an updated peer group analysis with recommended member changes. PMP was not paid or engaged for the performance of any non-executive compensation services related to 2015 or 2016.  
The compensation committee may choose to retain outside compensation consultants, such as PMP, to review compensation issues again in the future.  
How and why we benchmark executive compensation against our peers  
We compete with other companies for executive talent. In doing so, we consider prevailing executive compensation trends in order to establish whether our compensation is appropriate, competitive and in-line with our overall executive compensation philosophy and objectives. The compensation committee considers competitive market data including compensation levels and other information derived from: 1) public filings of publicly traded energy service companies (including publicly traded marine service companies, some of which are direct competitors) identified by compensation consultants or the compensation committee as having sufficiently similar operating characteristics with the Company so as to provide a source of meaningful comparison, or our Industry Peer Group; 2) public filings of publicly traded marine service companies that are our direct competitors, or our Direct Peer Group; and 3) published survey information for the energy industry as well as the broader commercial industry, when appropriate. Our competitive market is not comprised strictly of vessel owners because the competition we face for certain executive talent is not limited to marine companies and we believe that the number of such companies represents too small of a sample size for a reasonable comparison. Generally, the compensation committee considers how the compensation of our executives compares with the individual elements of, as well as the total direct compensation of, the named executive officers of the groups described above. The compensation committee has historically considered the median compensation levels determined at the fiftieth, sixtieth and seventy-fifth percentiles of the groups described above among the factors it uses when establishing executive compensation. As data from certain members of our Industry Peer Group loses comparability or becomes unavailable as a result of acquisitions, bankruptcies or other transactions, they will be removed from the list.  

22



During 2013, PMP reviewed the Industry Peer Group to be used for 2014 executive compensation analysis and recommended changes. At the compensation committee’s request, PMP identified and selected a new peer group with size and scope parameters more closely aligned with the Company’s revenues and operations. The companies included by PMP in the Industry Peer Group used to benchmark 2016 executive compensation consisted of the following:  
Industry Peer Group Used to Benchmark 2016 Executive Compensation
Gulfmark Offshore Inc. (GLF)
Tidewater Inc. (TDW)
Seacor Holdings Inc. (CKH)
Superior Energy Services Inc. (SPN)
Oceaneering International, Inc. (OII)
Atwood Oceanics Inc. (ATW)
Helix Energy Solutions Group, Inc. (HLX)
Bristow Group Inc. (BRS)
Hercules Offshore, Inc. (HERO)
Kirby Corporation (KEX)
Newpark Resources, Inc. (NR)
Noble Corporation (NE)
Gulf Island Fabrication, Inc. (GIFI)
When establishing executive compensation to be paid in 2016 , the compensation committee considered competitive market data of our Direct Peer Group, in addition to our Industry Peer Group. The companies included in the Direct Peer Group used to benchmark 2016 executive compensation consisted of the following:  
Direct Peer Group Used to Benchmark Executive Compensation
Gulfmark Offshore Inc. (GLF)
Tidewater Inc. (TDW)
Seacor Holdings Inc. (CKH)  
Late in 2016 and into 2017, several members of our Industry Peer Group and our Public Company Peer Group have announced restructurings or bankruptcies. We have not evaluated the manner in which these events may effect Peer Group usage or composition after 2017.
In 2016 , total annual cash compensation, which consists of base salary, short-term cash incentive compensation and cash bonuses, was targeted between the sixtieth and seventy-fifth percentiles of the Industry Peer Group. In prior years, our named executive officers had the potential to earn equity incentive compensation at or above the seventy-fifth percentile of the Industry Peer Group. However, if the performance targets for such equity incentive compensation are not achieved by the vest date, some awards may not be earned. In 2016, our named executive officers, taken as a group, received equity incentive compensation at the sixtieth percentile of the Industry Peer Group. The total direct compensation awarded by our compensation committee fell below the fiftieth percentile for our named executive officers in 2016 . Additionally, the Company's stock price has been historically volatile and since late 2014 has declined precipitously due to the industry downturn. There is frequently a significant difference, both positive and negative, between the value of an award at the grant date and its value upon vesting. We utilize a standard set of assumptions applied to the Black-Scholes model during the benchmarking process. The assumed term, volatility, dividend yield, and interest rate are derived from information found in our Grants of Plan-Based Awards Table and those of the companies that comprise our Industry Peer Group.
While our Industry Peer Group is used by our compensation committee to benchmark overall compensation levels, our Direct Peer Group is not used for benchmarking. Our Direct Peer Group is used as a point of reference against which the Company’s performance is measured for the purpose of establishing certain relative performance targets used to award short and long-term incentive compensation.  
The role of executive management in the compensation process  
The compensation committee works with executive management with respect to the practical aspects of the design and execution of our executive compensation programs. Because our executives’ cash compensation is derived, in part, from the Company’s annual operating performance, the annual budget process is a key component of the process by which compensation is determined. The Chief Executive Officer and other members of management also evaluate comparative data of the Industry Peer Group and the broader commercial industry in order to compare proposed compensation against such peer companies and provide such information to the compensation committee. Following proposals made by executive management, including the Chief Executive Officer’s recommendations regarding the other

23



named executive officers, the compensation committee engages in one or more discussion sessions, with and without executive management, in order to make a final determination of compensation for the named executive officers.  
How and why we use our performance measures to determine whether incentive cash compensation has been earned  
Since 2012 and through 2016, the Company’s performance measures for incentive cash compensation have generally consisted of EBITDA, relative Operating Margin and relative safety performance. In 2016, our compensation committee determined that EBITDA and Operating Margin were not as relevant of factors for 2017 performance given the prolonged industry downturn, which is presenting challenges for management not measured by EBITDA and Operating Margin. We expect that it will return to EBITDA and Operating Margin as a relevant measure once industry conditions improve.  
The reason that EBITDA has historically been our most heavily weighted objective component (at double the weight of the other two objective performance measures) is because of the prominence given EBITDA in several facets of the Company’s operations. For instance, we disclose and discuss EBITDA as a non-GAAP financial measure in our public releases, including quarterly earnings releases, investor conference calls and other filings with the Commission. EBITDA is used by management (i) as a supplemental internal measure for planning and forecasting overall expectations and for evaluating actual results against such expectations; (ii) to compare to the EBITDA of other companies when evaluating potential acquisitions; and (iii) to assess our ability to service existing fixed charges and incur additional indebtedness. Because of the significance of EBITDA to the Company as an analytical measure, the compensation committee used EBITDA, which may be adjusted for certain items, for 2016 as the most heavily weighted objective criterion for determining the amount of annual cash incentive compensation that would be paid to our executive officers and other shore-based employees. Adjustments that the compensation committee may make to EBITDA, including adjustments for losses on early extinguishment of debt or other non-cash or non-recurring items, may be made in years in which they have relevance to our compensation analysis and/or are unpredictable for budgeting purposes. In setting the EBITDA target used as a component of our cash incentive compensation, the compensation committee has set the EBITDA target based on expected performance for the year taking into account industry conditions, competitor performance and expectations of the Board of Directors. This approach has historically resulted in EBITDA targets that are designed to incentivize management to perform at demanding levels. Please see the section entitled “ Cash Incentive Compensation and Bonuses ” above for a discussion of the compensation committee’s actions with respect to cash incentive compensation for 2016.  
The EBITDA target is not necessarily the same as that which the Company may from time to time include in earnings guidance. However, if guidance for a year is given, the EBITDA target established at the beginning of the year is within the initial range of earnings guidance announced by the Company for that year. While the Company may alter its guidance range during the year, it has not, in the past, changed the EBITDA target for cash incentive compensation other than, on occasion, to adjust for significant acquisitions, dispositions or financings that may have occurred that were unanticipated at the time the EBITDA target was originally set.  
In normalized markets, the operating margin component is evaluated by comparing the Company's operating margin with that of our Public Company OSV Peer Group. Like the EBITDA component, the operating margin component ties executive compensation to financial performance, but unlike the EBITDA component, the operating margin component is directly tied to our financial performance relative to our Public Company OSV Peer Group. We believe that this helps us reward relative out-performance during cyclical industry fluctuations, including down cycles. The safety component is evaluated by comparing our total recordable incident rate with various industry benchmarks and our own prior safety performance. When selecting service providers, we know that our customers make decisions based on the safety reputation of the provider. Therefore, we believe that by using a safety component in our objective performance measures we will not only reinforce the culture of safety within our Company, which benefits our employees, but should also improve our long-term performance sustainability.  
We believe that these metrics incentivize management to strive for operating results that increase stockholder value, while reaffirming our commitment to operating our business at the highest levels of safety and with the utmost care and protection of the environment.  
Management of dilution caused by equity compensation  
Under our incentive compensation plan, the Company is authorized to issue a maximum of 4,950,000 shares of Common Stock as awards. As of March 31, 2017 , 299,380 shares remain available for future grants.
The Company is mindful of and considers, among other things, dilution and the rate at which shares are used and intends to target an annual share usage level consistent with industry benchmarks compiled by Institutional Shareholder

24



Services or reputable outside consultants, such as PMP, and other independent third-party sources. The Company also manages dilution and burn rate by tying some portion of equity awards to performance measures as well as by mixing PSUs and RSUs. The actual annual usage rate based on shares granted divided by total shares outstanding is expected to vary from year to year, depending on the achievement of specified performance targets and objectives. In keeping with its overall compensation philosophy and entrepreneurial culture, the Company has historically granted stock-based compensation to employees other than its named executive officers. This stock-based compensation included RSUs, stock options and PSUs. Executive officers and certain shoreside employees have received awards of PSUs, which is a derivative form of stock-based compensation. The 2014 and 2015 PSUs for both executive officers and certain shoreside employees will be settled in cash at vesting. The 2016 PSUs for certain shoreside employees will be settled in cash at vesting. The Company will settle the 2016 PSUs for the executive officers in cash unless it timely elects, in its discretion, to settle the 2016 PSUs in stock at vesting. The value of each PSU is equal to the Company's 10-day trailing average closing stock price on the vesting date. Awards of PSUs do not affect the Company’s outstanding share count. Overall, the RSU grants to employees and non-employee directors in February 2014, February 2015 and February 2016 represented approximately 0.7%,1.0% and 1.2% of the Company’s then-outstanding shares, respectively, all of which are within the tolerances for dilution recommended by our compensation consultants and other external benchmarks.
The following table shows the quantity and type of equity and equity-based awards granted during the fiscal years ended December 31, 2014 , 2015 and 2016 . Only awards given to directors vest immediately.
Grant
Year
 
Grant Type
 
Quantity
Granted
(1)
 
Vesting
Period
 
Vesting Detail
2014

Time-Based RSUs

26,211


Immediate

Immediate vest on grant date


Time-Based RSUs

120,918


3 years

Vesting at annual intervals throughout service period


Time-Based RSUs

10,646


3 years

Cliff vest after service period


Performance-Based RSUs (2)

75,480


3 years

Cliff vest after service period
 
 
Performance-Based RSUs (3)

5,133


3 years

Cliff vest after service period


Time-Based PSUs (4)

17,965


3 years

Cliff vest after service period
 
 
Time-Based PSUs (5)

3,033


3 years

Cliff vest after service period


Time-Based PSUs (5)

13,805


3 years

Vesting at annual intervals throughout service period
 
 
 
 
 
 
 
 
 
2015

Time-Based RSUs

55,128


Immediate

Immediate vest on grant date


Time-Based RSUs

208,929


3 years

Vesting at annual intervals throughout service period


Time-Based RSUs

5,724


3 years

Cliff vest after service period


Performance-Based RSUs (6)

130,221


3 years

Cliff vest after service period
 
 
Performance-Based RSUs (7)

9,066


3 years

Cliff vest after service period


Time-Based PSUs (8)

32,283


3 years

Cliff vest after service period
 
 
Time-Based PSUs (8)
 
15,948

 
3 years
 
Vesting at annual intervals throughout service period


Time-Based PSUs (8)

253


5 years

Vesting at annual intervals throughout service period
 
 
 
 
 
 
 
 
 
2016
 
Time-Based RSUs
 
139,133

 
Immediate
 
Immediate vest on grant date
 
 
Time-Based RSUs
 
391,802

 
3 years
 
Vesting at annual intervals throughout service period
 
 
Time-Based RSUs
 
6,078

 
3 years
 
Cliff vest after service period
 
 
Performance-Based PSUs (9)
 
469,308

 
3 years
 
Cliff vest after service period
 
 
Performance-Based PSUs (10)
 
53,094

 
3 years
 
Cliff vest after service period
 
 
Time-Based PSUs (11)
 
17,400

 
3 years
 
Cliff vest after service period
 
 
Time-Based PSUs (12)
 
351,981

 
3 years
 
Vesting at annual intervals throughout service period
 
 
Time-Based PSUs (11)
 
98,391

 
3 years
 
Vesting at annual intervals throughout service period
 

(1)
Amounts listed in the Quantity Granted column represent target shares granted to executive officers and other employees and shares awarded to non-employee directors during the annual grant process in addition to those awarded to new-hire employees throughout the remainder of the year. The performance-based RSUs granted in February 2014, February 2015 and PSUs granted in February 2016 provide that up to 150% of target shares awarded may be earned. Such potential additional shares are not reflected in this table.

25



(2)
Performance-based RSUs granted to named executive officers during 2014 are scheduled to vest on the third anniversary of the Grant Date, subject to the achievement of performance criteria defined in the respective grant agreements. The 2014 grant agreements provide for the potential to earn awards at a percentage up to 150% of target shares awarded.
(3)
Performance-based RSUs granted to an employee (other than named executive officers) during 2014 are scheduled to vest on the third anniversary of the Grant Date, subject to the achievement of performance criteria defined in the respective grant agreements. The 2014 grant agreements provide for the potential to earn awards at a percentage up to 150% of target shares awarded.
(4)
PSUs were awarded in 2014 to named executive officers. Each PSU has a value equal to the Company's 10-day trailing average closing stock price on the vesting date and will be distributed in cash on the vesting dates defined in the respective grant agreements.
(5)
PSUs were awarded in 2014 to certain employees (other than named executive officers). Each PSU has a value equal to the Company's 10-day trailing average closing stock price on the vesting date and will be distributed in cash on the vesting dates defined in the respective grant agreements.
(6)
Performance-based RSUs granted to named executive officers during 2015 are scheduled to vest on the third anniversary of the Grant Date, subject to the achievement of performance criteria defined in the respective grant agreements. The 2015 grant agreements provide for the potential to earn awards at a percentage up to 150% of target shares awarded.
(7)
Performance-based RSUs granted to an employee (other than named executive officers) during 2015 are scheduled to vest on the third anniversary of the Grant Date, subject to the achievement of performance criteria defined in the respective grant agreements. The 2015 grant agreements provide for the potential to earn awards at a percentage up to 150% of target shares awarded.
(8)
PSUs were awarded in 2015 to certain employees (other than named executive officers). Each PSU has a value equal to the Company's 10-day trailing average closing stock price on the vesting date and will be distributed in cash on the vesting dates defined in the respective grant agreements.
(9)
Performance-based PSUs granted to named executive officers during 2016 are scheduled to vest on the third anniversary of the Grant Date, subject to the achievement of performance criteria defined in the respective grant agreements. The 2016 grant agreements provide for the potential to earn awards at a percentage up to 150% of target units awarded. Each PSU has a value equal to the Company's 10-day trailing average closing stock price on the vesting date and will be distributed in cash, unless the Company elects in its sole discretion to settle the units in stock, on the vesting dates defined in the respective grant agreements.
(10)
Performance-based PSUs granted to certain employees (other than named executive officers) during 2016 are scheduled to vest on the third anniversary of the Grant Date, subject to the achievement of performance criteria defined in the respective grant agreements. The 2016 grant agreements provide for the potential to earn awards at a percentage up to 150% of target units awarded. Each PSU has a value equal to the Company's 10-day trailing average closing stock price on the vesting date and will be distributed in cash, unless the Company elects in its sole discretion to settle the units in stock, on the vesting dates defined in the respective grant agreements.
(11)
PSUs were awarded in 2016 to certain employees (other than named executive officers). Each PSU has a value equal to the Company's 10-day trailing average closing stock price on the vesting date and will be distributed in cash on the vesting dates defined in the respective grant agreements.
(12)
PSUs were awarded in 2016 to named executive officers. Each PSU has a value equal to the Company's 10-day trailing average closing stock price on the vesting date and will be distributed in cash, unless the Company elects in its sole discretion to settle the units in stock, on the vesting dates defined in the respective grant agreements.

Tax and accounting treatment issues  
Under Section 162(m) of the Code, the Company may not deduct, for federal income tax purposes, compensation paid in excess of $1,000,000 to a named executive officer employed by the Company at year-end unless it qualifies as “performance-based compensation.” As part of its responsibilities, the compensation committee reviews and considers the deductibility of compensation paid to executive officers under Section 162(m) of the Code, and, generally, has endeavored to design the compensation payable to the Company’s executive officers so that it is fully deductible by the Company. A portion of the compensation paid pursuant to our annual cash incentive compensation plan and certain of our RSUs generally qualify as “performance-based compensation” for purposes of Section 162(m). Base salaries, bonuses and time-based RSUs grants do not qualify as “performance-based compensation” pursuant to the requirements of Section 162(m). The compensation committee believes that, in order to ensure competitive levels of total compensation for its executive officers, there may be circumstances in which the Company’s interests are best served by approving compensation for its executive officers that will not meet the requirements of Section 162(m) of the Code and, therefore, will not be deductible by the Company for federal income tax purposes. Accordingly, the compensation committee has approved, and may approve in the future, compensation for one or more of its executive officers that is not deductible for federal income tax purposes.
Our review and analysis of the need for termination and change in control arrangements  
The Company uses employment agreements and change in control agreements in the Company’s retention efforts for certain key executives and can, under appropriate circumstances, use them for recruiting purposes. The Company has entered into long-term employment agreements with its five named executive officers: Todd M. Hornbeck, who serves as our President and Chief Executive Officer; Carl G. Annessa, who serves as our Executive Vice President and Chief Operating Officer; James O. Harp, Jr., who serves as our Executive Vice President and Chief Financial Officer; Samuel A. Giberga, who serves as our Executive Vice President, General Counsel and Chief Compliance Officer; and John S. Cook who serves as our Executive Vice President, Chief Commercial Officer and Chief Information Officer. Each long-term employment agreement has a current term expiring December 31, 2019. The terms of each agreement automatically

26



extend for an additional year every January 1, unless notice of termination is given before such date by the employee or us. Under the terms of our incentive compensation plan, and such employment agreements, the Chief Executive Officer and the other four named executive officers are entitled to payments and benefits upon the occurrence of specified events including termination of employment without cause and upon a change in control of the Company.  
In the case of each employment agreement, the terms of the termination and change in control arrangements were established through a process of arms-length negotiations between the Company and the applicable executive officer. The terms of the change in control agreements are substantially the same as the change in control provisions defined in the employment agreements discussed above except for the multiple regarding cash amounts received for salary and bonus and the time period for which medical and other insurance benefits would be provided after termination subsequent to a change in control. Several years ago, the compensation committee re-evaluated the terms of the employment agreements and determined to strengthen, and in the case of our Chief Executive Officer to add, provisions that restrict the ability of these individuals to compete with the Company following their termination of employment with the Company. In addition, the agreements were amended to add provisions that prohibit the solicitation of employees for a specified period following termination of employment and that enhance obligations concerning confidentiality of Company information. The foregoing restrictions were a significant factor considered by the compensation committee in agreeing to termination and change in control payments under the employment agreements. The age of our executives was also a factor in favor of our obtaining the foregoing restrictions in exchange for termination payments. All of our executive officers are of such an age that if terminated, could likely continue working. It is also likely that any future employment would be with a competitor. Consequently, the compensation committee determined that it was in the Company’s best interest to have obtained such enhanced restrictions in exchange for termination and change in control payment provisions and gross-up provisions for (a) income taxes, if any, payable with respect to extended medical benefits and for (b) excise taxes payable with respect to any excess payments under Section 280G of the Code and for (c) excise taxes and all other taxes with respect to any gross-up payments under (b).
To the extent that accelerated vesting provisions are not expressly addressed otherwise in the employment agreements or the change in control agreements, as applicable, each of our executive officers is entitled to accelerated vesting of incentive compensation awards in the event of retirement, death or disability pursuant to the terms of our incentive compensation plan. The specific terms of the arrangements described in this section, as well as an estimate of the compensation that would have been payable had they been triggered as of fiscal year-end 2016 , are described in detail in the section entitled “Potential Payments Upon Termination or Change in Control” below.  
Our policies regarding trading in our securities by our executive officers  
The Company has in effect a written Insider Trading Policy, which is applicable to all personnel. The policy forbids trading in our securities at any time the individual employee is in possession of material non-public information. In addition, irrespective of whether the individual employee is in possession of material non-public information, the policy prohibits trading at any time that the Company has closed its trading window. Since one effect of the trading window is to limit significantly the period of time in any given year in which trading in our securities may be undertaken by the Company’s officers, directors and certain of its shore-based employees, the Company has authorized the use of stock trading plans that comply with Rule 10b5-1 under the Exchange Act. Under such a plan, trading may occur at any time pursuant to a pre-approved trading plan over which the officer, director or employee has no discretion or control. In addition, the Insider Trading Policy contains a prohibition against writing or trading in options on our securities or otherwise engaging in derivative or hedging transactions involving our securities. The Insider Trading Policy also restricts the ability of officers or directors, including our named executive officers, from engaging in margin transactions impacting ownership of Company securities or from pledging or otherwise using our securities to collateralize indebtedness, without authorization. Additionally, the Company prohibits executive officers and directors from engaging in hedging transactions using the Company’s securities. While the Company encourages and promotes share ownership by all of its employees, it does not have a written policy concerning share ownership by named executive officers, directors or other employees other than the requirement that all directors own stock of the Company. See the section entitled “Principal Stockholders” below for information regarding share ownership by our executive officers.
Post year-end actions affecting compensation  
As discussed above, in February of each year, the compensation committee determines the cash incentive compensation and/or bonuses for the executive officers for services provided during the previous fiscal year. The compensation committee also determines equity incentive compensation awards for the executive officers, taking into account services provided during the previous fiscal year and the intended incentive for long-term employment and performance.  

27



All budgeted annual salaries, equity incentive awards, potential cash incentive awards and the EBITDA performance target related thereto, applicable to the executive officers are addressed by the Board of Directors in its final approval of the Company’s annual budget.  
Results from Say-on-Pay Advisory Vote  
At the Company’s annual meeting of stockholders, held on June 16, 2016, approximately 72% of the votes cast with regard to Say-on-Pay were cast in favor of approving the compensation of the Company’s named executive officers. The compensation committee and the Board of Directors considers this vote to be indicative of broad stockholder support of the Company’s general compensation philosophies and objectives, which are detailed above. The compensation committee and the Board of Directors considered this support when deciding to maintain these philosophies and objectives for 2017 .
2016 SUMMARY COMPENSATION TABLE  
The table below summarizes the total compensation paid or earned by each of the named executive officers for the three fiscal years ended December 31, 2016 .
Name and Principal Position
Year
 
Salary
($) (1)
 
Bonus
($)
 
Stock
Awards
($) (2)
 
Option
Awards
($)
 
Non-Equity
Incentive Plan
Compensation
($) (3)
 
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings ($)
 
All Other
Compensation
($)   (4)
 
Total
(a)
(b)
 
(c)
 
(d)
 
(e)
 
(f)
 
(g)
 
(h)
 
(i)
 
(j)
Todd M. Hornbeck
2016
 
$
637,500

 
$

 
$
3,442,492

 
$

 
$
318,750

 
$

 
$
32,422

 
$
4,431,164

Chairman, President & CEO
2015
 
637,500

 

 
3,442,508

 

 
478,125

 

 
34,644

 
4,592,777

2014
 
750,000

 

 
4,300,015

 

 
819,375

 

 
33,526

 
5,902,916

Carl G. Annessa
2016
 
$
360,000

 
$

 
$
1,404,005

 
$

 
$
180,000

 
$

 
$
31,606

 
$
1,975,611

Executive Vice President & COO
2015
 
360,000

 

 
1,404,006

 

 
270,000

 

 
32,371

 
2,066,377

2014
 
400,000

 

 
1,690,034

 

 
437,000

 

 
34,750

 
2,561,784

James O. Harp, Jr.
2016
 
$
360,000

 
$

 
$
1,404,005

 
$

 
$
180,000

 
$

 
$
32,569

 
$
1,976,574

Executive Vice President & CFO
2015
 
360,000

 

 
1,404,006

 

 
270,000

 

 
35,817

 
2,069,823

2014
 
400,000

 

 
1,690,034

 

 
437,000

 

 
33,662

 
2,560,696

Samuel A. Giberga
2016
 
$
292,500

 
$

 
$
1,140,759

 
$

 
$
146,250

 
$

 
$
29,848

 
$
1,609,357

Executive Vice President, General Counsel & CCO
2015
 
292,500

 

 
1,140,746

 

 
219,375

 

 
29,384

 
1,682,005

2014
 
325,000

 

 
1,397,536

 

 
355,063

 

 
39,019

 
2,116,618

John S. Cook
2016
 
$
292,500

 
$

 
$
1,140,759

 
$

 
$
146,250

 
$

 
$
28,826

 
$
1,608,335

Executive Vice President, CCO & CIO
2015
 
292,500

 

 
1,140,746

 

 
219,375

 

 
29,086

 
1,681,707

2014
 
325,000

 

 
1,397,536

 

 
355,063

 

 
34,861

 
2,112,460

 
 
(1)
As a result of weak market conditions, effective January 1, 2015, the named executive officers voluntarily offered to reduce their base salaries. Such reduction was subsequently ratified by the compensation committee. For the period of the industry downturn, the chief executive officer voluntarily agreed to reduce his base salary by 15%, whereas, each of the other executive officers voluntarily reduced his base salary by 10%.
(2)
The grant date fair values of these RSU awards are computed in accordance with FASB ASC Topic 718. The amounts in this column reflect the grant date fair values of RSUs granted to the named executive officers during 2014 , 2015 and 2016 . The grant date fair values for time-based RSUs and performance-based RSUs that do not contain market-based conditions are calculated by multiplying the number of RSUs granted by the closing stock price on the date of grant. The maximum number of shares that could be earned under the 2014, 2015 and 2016 performance-based grant agreements is equivalent to 150% of the target shares granted, which is reflected in this table. For awards granted in February 2015 and February 2016, the target values for our chief executive officer and other named executive officers were reduced by 15% and 10%, respectively, commensurate with their voluntarily reduced base salaries.
(3)
The amounts in this column reflect the cash incentive payments to the named executive officers under all components of annual cash incentive compensation pursuant to the incentive compensation plan and the employment agreements for Messrs. Todd Hornbeck, Annessa, Harp, Giberga and Cook. Each of the named executive officers could receive cash incentive compensation according to the interpolated, straight-line-basis formula allowed under the objective components of the program and the compensation committee could award a discretionary amount under the subjective component. For fiscal 2015 and 2016, the targeted cash incentive pay, which is a multiple of base salary, was impacted by the voluntary reductions in base salary for each named executive officer.
(4)
The amounts in this column reflect the following for each named executive officer during 2016 :
Premiums paid by the Company for term life insurance policies for each named executive officer;
Premiums paid under the supplemental health insurance policies for Messrs. Todd Hornbeck, Annessa, Harp, Giberga and Cook.
Automobile, fuel and insurance expenses on Company-provided vehicles for Messrs. Todd Hornbeck, Annessa, Harp, Giberga and Cook in the amount of $20,884, $20,068, $21,031, $18,310 and $17,288 respectively. The automobiles of Messrs. Todd Hornbeck, Annessa, Harp, Giberga and Cook are owned by the Company and their respective amount includes the depreciation of the vehicles and their actual fuel and insurance costs.

28



Employment Agreements  
Todd M. Hornbeck serves as our President and Chief Executive Officer, Carl G. Annessa serves as our Executive Vice President and Chief Operating Officer, James O. Harp, Jr. serves as our Executive Vice President and Chief Financial Officer, Samuel A. Giberga serves as our Executive Vice President, General Counsel and Chief Compliance Officer and John S. Cook serves as our Executive Vice President, Chief Commercial Officer and Chief Information Officer. Each of Messrs. Todd Hornbeck, Annessa, Harp, Giberga and Cook serves under an employment agreement with a current term expiring December 31, 2019 . The terms of each of their agreements automatically extend for an additional year every January 1, unless terminated before any such date by the employee or us.  
For a detailed description of the determination of the base salary amounts and performance measures, please see the discussion above under the caption “Compensation Discussion and Analysis.”  
The employment agreements of Messrs. Todd Hornbeck, Annessa, Harp, Giberga and Cook, in each case, as amended, provided for annual base salaries of $750,000, $400,000, $400,000, $325,000 and $325,000. As a result of weak market conditions, effective January 1, 2015, the named executive officers voluntarily offered to reduce their base salaries. Such reduction was subsequently ratified by the compensation committee. For the period of the industry downturn, the chief executive officer voluntarily agreed to reduce his base salary by 15%, whereas, each of the other executive officers voluntarily reduced his base salary by 10%. The annual base salaries for the fiscal year ended December 31, 2016 of Messrs. Todd Hornbeck, Annessa, Harp, Giberga and Cook continue to be at the reduced levels of $637,500, $360,000, $360,000, $292,500 and $292,500, respectively.
For fiscal 2016, the targeted cash incentive pay and other target awards granted to our chief executive officer and other name executive officers were reduced by 15% and 10%, respectively. These reductions are commensurate with their voluntarily reduced base salaries that were effective from January 1, 2015 and for the duration of the industry downturn.
The voluntary base salary reductions during the period of the industry downturn do not affect the calculation of payments upon termination of employment or a change in control. For fiscal 2016, payments upon termination of employment or a change of control would be calculated using the named executive officers' 2014 base salaries under their employment agreements.
Equity Compensation Plan Information  
Our Board of Directors and stockholders previously adopted an incentive compensation plan. The purpose of the Second Amended and Restated Hornbeck Offshore Services, Inc. Incentive Compensation Plan, or the incentive compensation plan, is to make awards with the purpose of strengthening our Company by providing an incentive to our employees, officers, consultants, non-employee directors and advisors to devote their abilities and energies to our success. The incentive compensation plan provides for the granting or awarding of incentive and nonqualified stock options, stock appreciation and dividend equivalent rights, restricted stock awards, RSUs, performance-based awards and any other awards. As of December 31, 2016 , our stockholders had previously approved 4,950,000 shares of our common stock for issuance pursuant to awards made under the incentive compensation plan, of which 542,266 shares were available for future grants as of such date. At December 31, 2016 , there were two tranches of unvested RSUs whose provisions allow for a maximum vesting potential of 150% of target shares awarded. Therefore, the number of shares available for future grants as of December 31, 2016 , accounted for target shares awarded and included the vesting potential of 150% for these 2014 and 2015 grants, even though it is unlikely that both grants will vest at the maximum level.
On May 3, 2005, our Board of Directors and stockholders adopted the ESPP, which is a separate plan from the Company’s incentive compensation plan. Under the ESPP, the Company is authorized to offer to sell at a discount up to 2,200,000 shares of common stock to eligible employees of the Company and its designated subsidiaries. As of December 31, 2016 , the Company had available 1,103,731 shares for future issuance under the ESPP.
 

29



The following table summarizes information as of December 31, 2016 , about our plans:
Plan Category
 
Number of Securities to
be Issued Upon Exercise
of Outstanding Options,
Warrants and Rights (1)
 
Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights (2)
 
Weighted Average
Remaining Term of
Outstanding Options,
Warrants and  Rights (3)
 
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column (a)) (4)
 
 
(a)
 
(b)
 
(c)
 
(d)
Equity compensation and purchase plans approved by security holders
 
1,103,708
 
$24.86
 
4.10
 
1,645,997
Equity compensation plans not approved by security holders
 
 
 
 
Total
 
1,103,708
 
 
 
 
 
1,645,997
 
 
(1)
This amount includes:
184,902 shares issuable upon the exercise of outstanding stock options;
918,806 shares governed by RSUs granted in 2013, 2014, 2015 and 2016;
and includes the effect of 109,951 shares, 102,852 of which were granted to named executive officers, governed by RSUs granted in 2014 and 2015 that are issuable if the maximum potential of 150% of target awards is realized.
(2)
The weighted average exercise price of outstanding options, warrants and rights does not take into account RSUs, since these awards have no exercise price.
(3)
The weighted average remaining term of outstanding options, warrants and rights does not take into account RSUs.
(4)
This amount includes 542,266 and 1,103,731 shares of common stock available for future issuance under the incentive compensation plan and the ESPP, respectively, as of December 31, 2016 .
The following table summarizes information as of March 31, 2017 , about our plans:
Plan Category
 
Number of Securities to
be Issued Upon Exercise
of Outstanding Options,
Warrants and Rights (1)
 
Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights (2)
 
Weighted Average
Remaining Term  of
Outstanding Options,
Warrants and Rights (3)
 
Number of Securities
Remaining  Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column (a)) (4)
 
 
(a)
 
(b)
 
(c)
 
(d)
Equity compensation and purchase plans approved by security holders
 
1,086,607
 
$24.86
 
3.90
 
1,403,111
Equity compensation plans not approved by security holders
 
 
 
 
Total
 
1,086,607
 
 
 
 
 
1,403,111
 
 
(1)
This amount includes:
184,902 shares issuable upon the exercise of outstanding stock options;
901,705 shares governed by RSU granted in 2013, 2015, 2016 and 2017
and includes the effect of 69,644 shares, 65,111 of which were granted to named executive officers, governed by RSUs granted in 2015 that are issuable if the maximum potential of 150% of target awards is realized.
(2)
The weighted average exercise price of outstanding options, warrants and rights does not take into account RSUs, since these awards have no exercise price.
(3)
The weighted average remaining term of outstanding options, warrants and rights does not take into account RSUs.
(4)
This amount includes 299,380 and 1,103,731 shares of common stock available for future issuance under the incentive compensation plan and the ESPP, respectively, as of March 31, 2017 .

30



The incentive compensation plan is administered by the compensation committee. Subject to the express provisions of the incentive compensation plan and directions from the Board, the compensation committee is authorized, among other things:  
to select the persons to whom restricted stock, RSUs, stock options and other awards will be granted;
to determine the type, size and terms and conditions of restricted stock, RSUs, stock options and other awards;
to establish the terms for treatment of restricted stock, RSUs, stock options and other awards upon a termination of employment; and
to delegate to the Chief Executive Officer and to other senior officers of the Company its duties under the incentive compensation plan related to non-executive employee compensation pursuant to conditions or limitations as the compensation committee may establish, subject to certain limitations under the incentive compensation plan.
For a discussion of the potential deductibility of Section 162(m) awards and Section 162(m) performance criteria, see the section titled "Tax and Accounting Treatment Issues" above.
2016 GRANTS OF PLAN-BASED AWARDS  
The following table provides information about the equity and non-equity awards we made to our named executive officers under our incentive compensation plan during the year ended December 31, 2016 .
  
 
 
 
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards (1)
 
 
 
 
Estimated Future Payouts
Under Equity Incentive Plan
Awards (2)
 
All  Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
 
All Other
Option
Awards:
Number of
Securities
Underlying
Options
 
Exercise
or Base
Price of
Option
Awards
($/Sh)
 
Grant
Date Fair
Value of
Stock
and
Option
Awards
($) (3)
Name
 
Grant
Date
 
Threshold
($)
 
Target
($)
 
Maximum
($)
 
Threshold (#)
 
Target (#)
 
Maximum (#)
 
(a)
 
(b)
 
(c)
 
(d)
 
(e)
 
(f)
 
(g)
 
(h)
 
(i)
 
(j)
 
(k)
 
(l)
Todd M. Hornbeck
 
2/16/2016
 
$
318,750

 
$
637,500

 
$
1,275,000

 

 

 

 

 

 

 
$

Chairman, President & CEO

2/16/2016
 

 

 

 

 
142,017

 

 

 

 

 
860,623


2/16/2016
 

 

 

 

 
189,356

 
284,034

 

 

 

 
1,721,246

 
 
2/16/2016
 

 

 

 

 
142,017

 

 

 

 

 
860,623

Carl G. Annessa
 
2/16/2016
 
180,000

 
360,000

 
720,000

 

 

 

 

 

 

 

Executive Vice President & COO

2/16/2016
 

 

 

 

 
57,921

 

 

 

 

 
351,001


2/16/2016
 

 

 

 

 
77,228

 
115,842

 

 

 

 
702,003

 
 
2/16/2016
 

 

 

 

 
57,921

 

 

 

 

 
351,001

James O. Harp, Jr.
 
2/16/2016
 
180,000

 
360,000

 
720,000

 

 

 

 

 

 

 

Executive Vice President & CFO

2/16/2016
 

 

 

 

 
57,921

 

 

 

 

 
351,001


2/16/2016
 

 

 

 

 
77,228

 
115,842

 

 

 

 
702,003

 
 
2/16/2016
 

 

 

 

 
57,921

 

 

 

 

 
351,001

Samuel A. Giberga
 
2/16/2016
 
146,250

 
292,500

 
585,000

 

 

 

 

 

 

 

Executive Vice President, General Counsel & CCO

2/16/2016
 

 

 

 

 
47,061

 

 

 

 

 
285,190


2/16/2016
 

 

 

 

 
62,748

 
94,122

 

 

 

 
570,379

 
 
2/16/2016
 

 

 

 

 
47,061

 

 

 

 

 
285,190

John S. Cook
 
2/16/2016
 
146,250

 
292,500

 
585,000

 

 

 

 

 

 

 
 
Executive Vice President, CCO & CIO

2/16/2016
 

 

 

 

 
47,061

 

 

 

 

 
285,190


2/16/2016
 

 

 

 

 
62,748

 
94,122

 

 

 

 
570,379

 
 
2/16/2016
 

 

 

 

 
47,061

 

 

 

 

 
285,190

 
 
(1)
Each of our named executive officers was eligible to receive non-equity incentive compensation based on the achievement of performance goals and the discretion of the compensation committee. The amount actually paid to each named executive officer for 2016 pursuant to these criteria is reflected in the “2016 Summary Compensation Table” under the heading “Non-Equity Incentive Plan Compensation."
(2)
Amounts in these columns represent RSUs and PSUs granted to our named executive officers during 2016 .
The first tranche represents the number of shares and the related dollar amounts that will be received by the named executive officers under the time-based RSUs included in this column. The time-based RSUs included in this column will vest over three years in equal, one-third increments on the first, second, and third anniversaries of the Grant Date.
The second tranche represents the number of PSUs and the related dollar amounts that may be received by the named executive officers under the performance-based PSUs included in this column. The PSUs each have a value equal to the Company's 10-day trailing average stock price and will be distributed in cash, unless the Company elects in its sole discretion to settle the units in stock, on the vesting date defined in the respective grant agreements. These PSUs will vest on the third anniversary of the Grant Date, subject to the achievement of performance criteria defined in the respective grant agreements. This tranche has the opportunity to vest from zero to 150% based on achieving the pre-defined criteria in the grant agreements.

31



The third tranche represents the number of PSUs and the related dollar amounts that may be received by the named executive officers under the time-based PSUs included in this column. The cash-settled phantom stock unit each has a value equal to the Company's 10-day trailing average stock price and will be distributed in cash, unless the Company elects in its sole discretion to settle the units in stock, on the vesting date defined in the respective grant agreements. These PSUs will vest over three years in equal one-third increments on the first, second and third anniversaries of the Grant Date.
(3)
The maximum number of shares that could be earned under the performance-based grant agreement is equivalent to 150% of the target shares granted. Amounts listed are calculated by multiplying the maximum number of shares by the closing stock price on the date of grant.


32



2016 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

The following table summarizes the equity awards we have made to our named executive officers that are outstanding as of December 31, 2016 .
 
 
Option Awards

Stock Awards


Number of Securities Underlying Unexercised Options (#) (1)

Number of Securities Underlying Unexercised Options (#)

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options

Option Exercise Price

Option Expiration

Number of Shares or Units of Stock That Have Not Vested

Market Value of Shares or Units of Stock That Have Not Vested

 Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested

 Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
Name

Exercisable

Unexercisable

(#)

($)

Date

(#)

($)

 (#) (2)

 ($) (3)
(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

 (i)

 (j)
Todd M. Hornbeck

83,266

 

 

 
$
24.86

 
2/23/2021

 

 

 
189,356

 
$
1,367,150

  Chairman, President & CEO


 

 

 

 

 

 

 
142,017

 
1,025,363




 

 

 

 

 

 

 
142,017

 
1,025,363




 

 

 

 

 

 

 
52,541

 
379,346




 

 

 

 

 

 

 
52,542

 
379,353




 

 

 

 

 

 

 
31,498

 
227,416




 

 

 

 

 

 

 
15,749

 
113,708

 
 

 

 

 

 

 

 

 
5,833

 
42,114

 
 

 

 

 

 

 

 

 
206

 
1,487

Carl G. Annessa

36,605

 

 

 
$
24.86

 
2/23/2021

 

 

 
77,228

 
$
557,586

  Executive Vice President


 

 

 

 

 

 

 
57,921

 
418,190

  & COO


 

 

 

 

 

 

 
57,921

 
418,190




 

 

 

 

 

 

 
21,429

 
154,717




 

 

 

 

 

 

 
21,429

 
154,717




 

 

 

 

 

 

 
12,133

 
87,600




 

 

 

 

 

 

 
6,067

 
43,804

 
 

 

 

 

 

 

 

 
3,033

 
21,898

 
 

 

 

 

 

 

 

 
90

 
650

James O. Harp, Jr.

36,605

 

 

 
$
24.86

 
2/23/2021

 

 

 
77,228

 
$
557,586

  Executive Vice President


 

 

 

 

 

 

 
57,921

 
418,190

  & CFO


 

 

 

 

 

 

 
57,921

 
418,190




 

 

 

 

 

 

 
21,429

 
154,717




 

 

 

 

 

 

 
21,429

 
154,717




 

 

 

 

 

 

 
12,133

 
87,600




 

 

 

 

 

 

 
6,067

 
43,804

 
 

 

 

 

 

 

 

 
3,033

 
21,898

 
 

 

 

 

 

 

 

 
90

 
650

Samuel A. Giberga

17,699

 

 

 
$
24.86

 
2/23/2021

 

 

 
62,748

 
$
453,041

  Executive Vice President,


 

 

 

 

 

 

 
47,061

 
339,780

  General Counsel & CCO


 

 

 

 

 

 

 
47,061

 
339,780




 

 

 

 

 

 

 
17,411

 
125,707




 

 

 

 

 

 

 
17,411

 
125,707




 

 

 

 

 

 

 
9,858

 
71,175