UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

(Rule 14a-101)

 

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 under §240.14a-12

 

RING ENERGY, 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:

 

 

 

 


 

2021 Proxy Statement

 

Ring Energy, Inc. (NYSE American: REI) is a growth oriented independent oil and natural gas company headquartered in The Woodlands, Texas. It is focused on the acquisition, exploration and development of high-quality, oil and liquids rich assets in the Permian Basin of Texas and New Mexico which is recognized as the top producing oil basin in North America. Formed in 2012, Ring Energy has aggressively sought to acquire select low decline, long-life hydrocarbon producing properties with highly economic drilling opportunities that can be developed in future years. With over 100 years of combined industry experience in most of the oil and gas producing basins in the United States, coupled with the careful application of new and emerging geoscience, engineering, drilling and completion technologies, and long-established industry relationships, REI is poised for SUR WDELOLW DQG VXFFHVV.

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS The 2021 Annual Meeting of Stockholders (the “Annual Meeting”) of Ring Energy, Inc., a Nevada corporation (“Ring” or the “Company”), will be KHOG RQ 0D 25, 2021, DW 10:00 D.P., &HQWUDO 7LPH, LQ 5LQJV RFH EXLOGLQJ, ORFDWHG DW 1725 +XJKHV /DQGLQJ %OYG., 7KH :RRGODQGV, 7; 77380. You will be asked to consider and to approve the following proposals: INCENTIVE PLAN (“LTIP”) This proxy statement and accompanying proxy card are being mailed to our stockholders on or about April 22, 2021. Our Annual Report on Form 10-K (the “Annual Report) FRYHULQJ WKH HDU HQGHG 'HFHPEHU 31, 2020 LV HQFORVHG, EXW GRHV QRW IRUP DQ SDUW RI WKH PDWHULDOV IRU VROLFLWDWLRQ RI SUR[LHV. The Notice of Annual Meeting and Proxy Statement herein provide further information on the Company’s performance and corporate governance and describe the matters to be presented at the Annual Meeting. Only stockholders of record at the close of business on the Record Date are entitled to notice of and to vote at the Annual Meeting. A list of stockholders entitled to vote at the Annual Meeting ZLOO EH DYDLODEOH IRU H[DPLQDWLRQ DW RXU RFHV GXULQJ QRUPDO EXVLQHVV KRXUV IRU D SHULRG RI WHQ (10) FDOHQGDU GDV SULRU WR WKH $QQXDO Meeting and will also be available during the Annual Meeting for inspection by our stockholders. EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN, AND MAIL THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ACCOMPANYING ENVELOPE, OR VOTE YOUR SHARES USING THE TELEPHONE OR INTERNET VOTING INSTRUCTIONS PROVIDED. We thank you for your continued support and look forward to seeing you at the Annual Meeting. By Order of the Board of Directors, /s/ Travis T. Thomas The Woodlands, Texas April 22, 2021 Travis T. Thomas ([HFXWLYH 9LFH 3UHVLGHQWt &KLHI )LQDQFLDO 2 FHUt &RUSRUDWH Secretary & Treasurer IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 25, 2021 The Notice of Annual Meeting, Proxy Statement, and Annual Report to Stockholders for the year ended December 31, 2020, are available on Ring Energy, Inc.’s website at www.ringenergy.com. RECORD DATE FOR STOCKHOLDERS ENTITLED TO VOTE April 12, 2021 LOCATION Main Floor Meeting Rooms A and B 1725 +XJKHV /DQGLQJ %OYG., 7KH :RRGODQGV, 7; 77380 DATE & TIME May 25, 2021 10:00 am Central time APPROVE THE 2021 LONG-TERM p59 RATIFY THE APPOINTMENT OF GRANT THORNTON LLP AS OUR INDEPENDENT p56 REGISTERED PUBLIC ACCOUNTING FIRM APPROVE ON A NON-BINDING, ADVISORY BASIS, THE COMPENSATION p55 OF OUR NAMED EXECUTIVE OFFICERS ELECT SEVEN NOMINATED DIRECTORS INCLUDED IN THE PROXY STATEMENT TOp18 SERVE ON OUR BOARD

 

TABLE OF CONTENTS OVERVIEW Joint Letter to Stockholders Our Company – Mission & Vision Our Company – Strategic Priorities Questions And Answers About the 2021 Annual Meeting And Voting Our 2020 Performance Highlights Our Commitment to Environmental, Social And Governance (“Esg”) Board Composition and Experience 1 2 3 4 10 12 16 PROPOSAL 1: ELECTION OF DIRECTORS Summary Board Committees & Director Bios Board Recommendation on Proposal 18 19 23 CORPORATE GOVERNANCE AND OUR BOARD Corporate Governance Highlights Our Board Board Leadership Structure Lead Independent Director Annual Board Evaluation Director Orientation And Continuing Education Board Independence Board Risk Assessment And Control Insider Trading Policy Board Committees – Composition and Principal Functions 'LUHFWRU 1RPLQDWLRQV DQG 4XDOL FDWLRQV Board of Directors Diversity Communications With Our Board 24 25 25 25 26 26 26 27 27 27 31 31 31 EXECUTIVE OFFICERS ([HFXWLYH 2 FHU %LRV 32 COMPENSATION DISCUSSION & ANALYSIS Summary Executive Team Transitions 2020 Performance Highlights 2020 Executive Compensation Policy Highlights 2020 Objectives And Philosophy of Our Executive Compensation Program Role of Stockholder Say-on-Pay Advisory Vote Executive Compensation Program Elements For 2020 Management Stock Ownership Guidelines Tax & Risk Considerations in Overall Program &RPSHQVDWLRQ RI 1DPHG ([HFXWLYH 2 FHUV (2018-2020) Employment Agreements Grants of Plan-Based Awards Outstanding Equity Awards at Fiscal Year-End Option Exercises and Stock Vested 3HQVLRQ %HQH WV DQG 1RQTXDOL HG 'HIHUUHG &RPSHQVDWLRQ Potential Payments Upon Termination or Change In Control CEO Pay Ratio Director Compensation Compensation Committee Report Compensation Committee Interlocks and Insider Participation Transactions With Related Persons, Promoters and Certain Control Persons 6HFXULW 2ZQHUVKLS RI &HUWDLQ %HQH FLDO 2ZQHUV DQG Management & Other Matters 34 34 35 36 36 38 39 42 42 42 44 44 45 46 46 46 48 49 51 52 52 52

 

PROPOSAL 2: NON-BINDING, ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION Summary Board Recommendation on Proposal 55 55 PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP Summary Board Recommendation on Proposal Audit Committee Report 56 57 58 PROPOSAL 4: APPROVAL OF RING ENERGY, INC. 2021 OMNIBUS INCENTIVE PLAN Summary Key Aspects and Description of The 2021 Plan Summary of Federal Income Tax Consequences Board Recommendation on Proposal Ring Energy, Inc. 2021 Omnibus Incentive Plan 59 59 62 64 66 STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR THE 2022 ANNUAL MEETING AND OTHER ITEMS Summary of Procedures For Submitting a Proposal or Nominating a Director Other Business Annual Report GA AP to Non-GA AP Reconciliations 82 82 83 84

 

 

[LOGO]

 

DEAR FELLOW STOCKHOLDERS, Paul D. McKinney Anthony B. Petrelli On behalf of the Board of Directors of Ring Energy, Inc., we are pleased to invite you to our 2021 Annual Meeting of Stockholders, which will take place on May 25, 2021 at 10:00 AM Central Daylight Time in meeting rooms A and B RQ WKH JURXQG RRU RI RXU R FH EXLOGLQJ ORFDWHG DW 1725 +XJKHV /DQGLQJ %OYG., 7KH :RRGODQGV, 7H[DV. into a strategic advisory role to support a new executive leadership team and refreshed Board of Directors, including six of seven members deemed as independent. Together, the Board and executive team all share a common vision and individually bring diversity in thought, background, and experience with notable track records of success to the service of Ring’s Stockholders. As you know, our industry faced unprecedented challenges this past year due to the COVID-19 pandemic and related global oil supply and demand imbalances. We took immediate steps to ensure the health and safety of our employees, and we appreciate their hard work and tireless H RUWV DV ZH VXFFHVVIXOO QDYLJDWHG WKURXJK WKLV GL FXOW period. With the collapse in oil prices last spring, we acted quickly to protect our business by suspending all drilling and completion activities, curtailing production and reducing costs across all aspects of our business. As oil prices improved, we focused our attention during the second half of the year on restoring production by bringing back online previously shut-in wells, conducting high rate of return workovers and continuing our CTR program of converting wells with electrical submersible pumps to rod pumps that further reduces operating costs. We recognize this past year was challenging for many and are grateful for our stockholders’ support. The Board of Directors is committed to maintaining high standards of ethical conduct and governance. We believe clear and timely communications with investors are imperative and given the challenging nature of 2020, the executive leadership and Board changes, along with the change of auditors, it was important to move our Annual Meeting of Stockholders historically held in December to May to keep investors informed. We also believe holding the Annual Meeting soon after the close of the proxy year is consistent with industry best practices. On behalf of the Board of Directors and management, thank you for your continued support. Your vote is very important to us, and we encourage you to review the enclosed proxy statement and to promptly vote so your shares are represented at the Annual Meeting. Armed with additional funds from our equity raise and supported by a higher oil price environment, in December ZH LQLWLDWHG WKH UVW SKDVH RI D 1RUWKZHVW 6KHOI GULOOLQJ program of eight to ten wells. We drilled four wells from our high rate-of-return inventory of undeveloped well locations and are encouraged by the initial results. We look IRUZDUG WR XVLQJ WKH DGGLWLRQDO FDVK RZ JHQHUDWHG WR KHOS further pay down debt and strengthen our balance sheet. Best regards, Paul D. McKinney Chairman of the Board of Directors & &KLHI ([HFXWLYH 2 FHU Recognizing a lack of investor appreciation of the Company’s historical operating success and unique market position, during the middle of last year, Ring’s Board led by Tim Rochford, Co-Founder and then Chairman, performed a strategic evaluation of alternatives for increasing stockholder value. Consistent with Mr. Rochford’s recommendation, the Board decided a change in the Company’s approach was necessary, with Tim moving Anthony B. Petrelli /HDG QGHSHQGHQW 'LUHFWRU 2021 Proxy Statement 1

 

OUR COMPANY Ring Energy, Inc. is a growth oriented independent oil and natural gas company focused on the acquisition, exploration and development of high-quality, oil and liquids rich assets in the Permian Basin of Texas and New Mexico. OUR MISSION & VISION Ring’s mission is to deliver competitive and sustainable returns to its stockholders by developing, acquiring, exploring for, and commercializing oil and natural-gas resources vital to the world’s health and welfare. 6XFFHVVIXOO DFKLHYLQJ 5LQJV PLVVLRQ UHTXLUHV D UP commitment to operating safely in a socially responsible and environmentally friendly manner. Key principles supporting Ring’s new strategic vision are: (QVXULQJ KHDOWK, VDIHW, DQG HQYLURQPHQWDO H[FHOOHQFH and a strong commitment to our employees and the communities in which we work and operate; &RQWLQXLQJ WR JHQHUDWH IUHH FDVK RZ WR LPSURYH DQG EXLOG D VXVWDLQDEOH QDQFLDO IRXQGDWLRQ; 3XUVXLQJ ULJRURXV FDSLWDO GLVFLSOLQH IRFXVHG RQ RXU highest returning opportunities; PSURYLQJ PDUJLQV DQG GULYLQJ YDOXH E FRQWLQXRXVO targeting additional operating cost reductions and FDSLWDO HFLHQFLHV; DQG 6WUHQJWKHQLQJ WKH EDODQFH VKHHW E VWHDGLO SDLQJ GRZQ debt, divesting of non-core assets and becoming a peer leader in Debt/EBITDA metrics. 2

 

OUR STR ATEGIC PRIORITIES Ring has historically capitalized on its low-risk, high-return asset base that is focused on the conventional San Andres UHVHUYRLU LQ WKH 3HUPLDQ %DVLQ, ZKLFK LV RQH RI WKH PRVW SUROLF KGURFDUERQ SURGXFLQJ UHJLRQV LQ WKH 8.6. $V FRPSDUHG WR XQFRQYHQWLRQDO SODV, WKH 6DQ $QGUHV RHUV PXFK ORZHU LQLWLDO HDU DQG WHUPLQDO GHFOLQH UDWHV IRU SURGXFWLRQ, ZKLFK helps generate high rates of return and low breakeven economics of approximately $25 per barrel. 7KH FROOHFWLYH HRUWV RI RXU QHZ PDQDJHPHQW WHDP DUH IRFXVHG RQ SURYLGLQJ D IUHVK SHUVSHFWLYH RQ 5LQJV SURYHQ strategy. We are targeting a number of strategic initiatives that we believe will uniquely position Ring for continued RSHUDWLQJ DQG QDQFLDO VXFFHVV, WKHUHE HQKDQFLQJ ORQJ-WHUP YDOXH IRU RXU VWRFNKROGHUV. To accomplish these goals, we are committed to pursuing the following strategic priorities: Pursue strategic acquisitions that maintain or reduce our break-even costs, as well as improve our margins and lower our operating costs. We are squarely focused on opportunities that are accretive RQ D FDVK RZ basis that deliver competitive risk and debt-adjusted per share returns to our stockholders. Attract and retain the best people because we recognize that our future success can only be achieved through our employees. Pursue operational excellence with a sense of urgency, which is the foundation that will GHQH RXU FXOWXUH and future success. This includes executing our operations in a safe and environmentally responsible manner, applying advanced technologies, continuously seeking ways to reduce our operating cash costs per barrel, and delivering low cost, consistent and HFLHQW H[HFXWLRQ of our drilling campaigns, work programs and operations. Prioritize our work programs to invest in the highest risk-adjusted rate-of-return projects in our inventory. This will allow us WR SURWDEO JURZ our production and reserve levels and generate the H[FHVV IUHH FDVK RZ required to further pay down debt. Focus on generating IUHH FDVK  RZ DQG strengthening our balance sheet by reducing debt through the use of excess cash from operations and potentially through proceeds from the sale of non-core assets. Remaining focused and disciplined in this regard will lead to meaningful returns for our stockholders and also provides DGGLWLRQDO QDQFLDO H[LELOLW WR PDQDJH future commodity price cycles. 2021 Proxy Statement 3

 

QUESTIONS AND ANSWERS ABOUT THE 2021 ANNUAL MEETING AND VOTING WHAT IS THE PURPOSE OF THE ANNUAL MEETING? At the Annual Meeting, our stockholders will act upon the matters outlined in the Notice, including (1) the election of seven directors named in this proxy statement to our Board, each for a term ending on the date of the 2022 annual PHHWLQJ RI VWRFNKROGHUV RU XQWLO WKHLU VXFFHVVRUV DUH GXO HOHFWHG DQG TXDOLHG (WKLV SURSRVDO LV UHIHUUHG WR DV WKH “Election of Directors); (2) D QRQ-ELQGLQJ, DGYLVRU YRWH WR DSSURYH QDPHG H[HFXWLYH RFHU FRPSHQVDWLRQ (WKLV proposal is referred to as “Executive Compensation); (3) WKH UDWLFDWLRQ RI WKH DSSRLQWPHQW RI *UDQW 7KRUQWRQ //3 DV RXU LQGHSHQGHQW UHJLVWHUHG SXEOLF DFFRXQWLQJ UP IRU WKH VFDO HDU HQGHG 'HFHPEHU 31, 2021 (WKLV SURSRVDO LV UHIHUUHG to as the “5DWLFDWLRQ RI *UDQW 7KRUQWRQ); (4) WKH DSSURYDO RI WKH 2021 /RQJ-7HUP QFHQWLYH 3ODQ (WKLV SURSRVDO LV referred to as the “Approval of 2021 Long-Term Incentive Plan”); and (5) the transaction of such other business as may arise that can properly be conducted at the Annual Meeting or any adjournment or postponement thereof. Additionally, PDQDJHPHQW ZLOO UHSRUW RQ RXU SHUIRUPDQFH GXULQJ WKH ODVW VFDO HDU DQG UHVSRQG WR TXHVWLRQV IURP RXU VWRFNKROGHUV. WHAT IS A PROXY? A proxy is another person that you legally designate to vote your stock. If you designate a person or entity as your proxy in a written document, such document is also called a proxy or a proxy card. All duly executed proxies received prior WR WKH $QQXDO 0HHWLQJ ZLOO EH YRWHG LQ DFFRUGDQFH ZLWK WKH FKRLFHV VSHFLHG WKHUHRQ DQG, LQ FRQQHFWLRQ ZLWK DQ RWKHU business that may properly come before the meeting, in the discretion of the persons named in the proxy. WHAT IS A PROXY STATEMENT? A proxy statement is a document that regulations of the United States Securities and Exchange Commission (the “SEC”) require that we make available to you when we ask you to sign a proxy card to vote your stock at the Annual Meeting. This proxy statement describes matters on which we would like you, as a stockholder, to vote and provides you with information on such matters so that you can make an informed decision. WHAT IS “HOUSEHOLDING”? One copy of the Notice, this proxy statement, and the Annual Report (collectively, the “Proxy Materials”) will be sent WR VWRFNKROGHUV ZKR VKDUH DQ DGGUHVV, XQOHVV WKH KDYH QRWLHG XV WKDW WKH ZDQW WR FRQWLQXH UHFHLYLQJ PXOWLSOH SDFNDJHV. 7KLV SUDFWLFH, NQRZQ DV KRXVHKROGLQJ, LV GHVLJQHG WR UHGXFH GXSOLFDWH PDLOLQJV DQG VDYH VLJQLFDQW SULQWLQJ and postage costs. If you received a householded mailing this year and you would like to have additional copies of the Proxy Materials mailed to you or you would like to opt out of this practice for future mailings, we will promptly deliver such additional copies to you if you submit your request in writing to Ring Energy, Inc., Attention: Travis T. Thomas, &KLHI )LQDQFLDO 2FHU, 1725 +XJKHV /DQGLQJ %OYG., 6XLWH 900, 7KH :RRGODQGV, 7; 77380, RU E WHOHSKRQH E FDOOLQJ (281) 397-3699. <RX PD DOVR FRQWDFW XV LQ WKH VDPH PDQQHU LI RX UHFHLYHG PXOWLSOH FRSLHV RI WKH 3UR[ 0DWHULDOV DQG ZRXOG prefer to receive a single copy in the future. The Proxy Materials are also available on our website: www.ringenergy.com. WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS? 'HVSLWH RXU HRUWV UHODWHG WR KRXVHKROGLQJ, RX PD UHFHLYH PRUH WKDQ RQH VHW RI 3UR[ 0DWHULDOV, LQFOXGLQJ PXOWLSOH copies of the proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. Similarly, if you are a stockholder of record and hold shares in a brokerage account, you will receive a proxy card and a voting instruction card. Please complete, sign, date, and return each proxy card and voting instruction card that you receive to ensure that all your shares are voted at the Annual Meeting. You can also vote your VKDUHV RYHU WKH SKRQH RU QWHUQHW. 3OHDVH VHH +2: '2 927( 0< 6+$5(6" EHORZ IRU PRUH LQIRUPDWLRQ. 4

 

 

WHO IS ENTITLED TO NOTICE OF THE ANNUAL MEETING? *RYHUQLQJ ODZV DV ZHOO DV RXU JRYHUQDQFH GRFXPHQWV UHTXLUH RXU %RDUG WR HVWDEOLVK D UHFRUG GDWH LQ RUGHU WR GHWHUPLQH who is entitled to receive notice of, attend, and vote at the Annual Meeting, and any continuations, adjournments, or postponements thereof. The record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting is the close of business on April 12, 2021 (the “Record Date”). $V RI WKH 5HFRUG 'DWH, ZH KDG 99,181,587 VKDUHV RI &RPPRQ 6WRFN RXWVWDQGLQJ. $ OLVW RI DOO VWRFNKROGHUV RI UHFRUG HQWLWOHG WR YRWH DW RXU $QQXDO 0HHWLQJ LV RQ OH DW RXU SULQFLSDO RFH ORFDWHG DW 1725 +XJKHV /DQGLQJ %OYG, 6XLWH 900, 7KH :RRGODQGV, 7; 77380, DQG ZLOO EH DYDLODEOH IRU LQVSHFWLRQ DW WKH $QQXDO 0HHWLQJ. WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING? Subject to the limitations set forth below, stockholders at the close of business on the Record Date may vote at the $QQXDO 0HHWLQJ. I RX DUH D EHQHFLDO RZQHU RI VKDUHV RI &RPPRQ 6WRFN, RX PXVW KDYH D OHJDO SUR[ IURP WKH stockholder of record to vote your shares at the Annual Meeting. WHAT IS A QUORUM? A quorum is the presence at the Annual Meeting, in person or by proxy, of the holders of at least one-third of the shares of our Common Stock outstanding and entitled to vote as of the Record Date. There must be a quorum for the Annual Meeting to be held. If a quorum is not present, the Annual Meeting may be adjourned until a quorum is reached. Proxies received but marked as abstentions or broker non-votes will be included in the calculation of votes considered to be present at the Annual Meeting. WHAT ARE THE VOTING RIGHTS OF OUR STOCKHOLDERS? Each holder of Common Stock is entitled to one vote per share of Common Stock on all matters to be acted upon at the Annual Meeting. Neither our Articles of Incorporation (as amended, the “Charter”), nor our Bylaws (as amended, the “Bylaws”), allow for cumulative voting rights. WHAT IS THE DIFFERENCE BETWEEN A STOCKHOLDER OF RECORD AND A “STREET NAME” HOLDER? Most stockholders hold their shares through a broker, bank, or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned in street name. 6WRFNKROGHU RI 5HFRUG. If your shares are registered directly in your name with Standard Registrar and Transfer Company Inc., our transfer agent, you are considered the stockholder of record with respect to those shares. As the stockholder of record, you have the right to grant your voting proxy directly or to vote in person at the Annual Meeting. 6WUHHW 1DPH 6WRFNKROGHU. I RXU VKDUHV DUH KHOG LQ D VWRFN EURNHUDJH DFFRXQW RU E D EDQN, GXFLDU, RU RWKHU QRPLQHH, RX DUH FRQVLGHUHG WKH EHQHFLDO RZQHU RI VKDUHV KHOG LQ VWUHHW QDPH.Q WKLV FDVH, VXFK EURNHU, GXFLDU, RU RWKHU QRPLQHH LV FRQVLGHUHG WKH VWRFNKROGHU RI UHFRUG IRU SXUSRVHV RI YRWLQJ DW WKH $QQXDO 0HHWLQJ. $V WKH EHQHFLDO RZQHU, RX KDYH the right to direct your broker, bank, or nominee how to vote and are also invited to attend the Annual Meeting. If you hold your shares through a broker, bank, or other nominee, follow the voting directions provided by your broker, bank, or other nominee to vote your shares. Since you are not the stockholder of record, you may not vote these shares in person at the Annual Meeting unless you obtain a signed proxy from the record holder giving you the right to vote the shares. HOW DO I VOTE MY SHARES? 6WRFNKROGHUV RI 5HFRUG: Stockholders of record may vote their shares or submit a proxy to have their shares voted by one of the following methods: % :ULWWHQ 3UR[. You may indicate your vote by completing, signing, and dating your proxy card and returning it in the enclosed reply envelope. Q 3HUVRQ. You may vote in person at the Annual Meeting by completing a ballot; however, attending the Annual Meeting without completing a ballot will not count as a vote. % 3KRQH. 8VH DQ WRXFK-WRQH WHOHSKRQH WR FDOO 1-800-690-6903 WR WUDQVPLW RXU YRWLQJ LQVWUXFWLRQV XS XQWLO 11:59 3.0. (DVWHUQ 7LPH WKH GD EHIRUH WKH FXW-R GDWH RU PHHWLQJ GDWH. +DYH RXU SUR[ FDUG LQ KDQG ZKHQ RX FDOO DQG WKHQ follow the instructions. % QWHUQHW. Use the Internet to access www.proxyvote.com to transmit your voting instructions and for electronic GHOLYHU RI LQIRUPDWLRQ XS XQWLO 11:59 3.0. (DVWHUQ 7LPH WKH GD EHIRUH WKH FXW-R GDWH RU PHHWLQJ GDWH. +DYH RXU proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. 2021 Proxy Statement 5

 

QUESTIONS AND ANSWERS ABOUT THE 2021 ANNUAL MEETING AND VOTING (CONT.) 6WUHHW 1DPH 6WRFNKROGHUV: Street name stockholders may generally vote their shares or submit a proxy to have their shares voted by one of the following methods: % 9RWLQJ QVWUXFWLRQ &DUG. If you hold your shares in street name, your broker, bank, or other nominee will explain how you can access a voting instruction card for you to use in directing the broker, bank, or other nominee how to vote your shares. Q 3HUVRQ ZLWK D 3UR[ IURP WKH 5HFRUG +ROGHU. You may vote in person at the Annual Meeting if you obtain a legal proxy from your broker, bank, or other nominee. Please consult the instruction card or other information sent to you by your broker, bank, or other nominee to determine how to obtain a legal proxy in order to vote in person at the Annual Meeting. If you are a stockholder of record, your shares will be voted by the management proxy holder in accordance with the instructions on the proxy card you submit. For stockholders who have their shares voted by submitting a proxy, the management proxy holder will vote all shares represented by such valid proxies as our Board recommends, unless a VWRFNKROGHU DSSURSULDWHO VSHFLHV RWKHUZLVH. CAN I REVOKE MY PROXY OR CHANGE MY VOTE? Yes. If you are a stockholder of record, you can revoke your proxy at any time before it is voted at the Annual Meeting by doing one of the following: 6XEPLWWLQJ ZULWWHQ QRWLFH RI UHYRFDWLRQ VWDWLQJ WKDW RX ZRXOG OLNH WR UHYRNH RXU SUR[ WR 5LQJ (QHUJ, QF., $WWHQWLRQ: 7UDYLV 7. 7KRPDV, &KLHI )LQDQFLDO 2FHU, 1725 +XJKHV /DQGLQJ %OYG, 6XLWH 900, 7KH :RRGODQGV, 7; 77380, ZKLFK PXVW be received prior to the Annual Meeting; &RPSOHWLQJ, VLJQLQJ, DQG GDWLQJ DQRWKHU SUR[ FDUG ZLWK QHZ YRWLQJ LQVWUXFWLRQV DQG UHWXUQLQJ LW E PDLO WR 5LQJ (QHUJ, QF., $WWHQWLRQ: 7UDYLV 7. 7KRPDV, &KLHI )LQDQFLDO 2FHU, 1725 +XJKHV /DQGLQJ %OYG, 6XLWH 900, 7KH :RRGODQGV, 7; 77380 LQ WLPH WR EH UHFHLYHG, LQ ZKLFK FDVH WKH ODWHU VXEPLWWHG SUR[ ZLOO EH UHFRUGHG DQG HDUOLHU SUR[ UHYRNHG; RU $WWHQGLQJ WKH $QQXDO 0HHWLQJ, QRWLILQJ WKH LQVSHFWRU RI HOHFWLRQ WKDW RX ZLVK WR UHYRNH RXU SUR[, DQG YRWLQJ RXU shares in person at the Annual Meeting. Attendance at the Annual Meeting without submitting a ballot to vote your shares will not revoke or change your vote. I RX DUH D EHQHFLDO RU VWUHHW QDPH VWRFNKROGHU, RX VKRXOG IROORZ WKH GLUHFWLRQV SURYLGHG E RXU EURNHU, EDQN, RU other nominee to revoke your voting instructions or otherwise change your vote before the applicable deadline. You may also vote in person at the Annual Meeting if you obtain a legal proxy from your broker, bank, or other nominee as GHVFULEHG LQ +RZ GR  YRWH P VKDUHVDERYH. WHAT ARE ABSTENTIONS AND BROKER NON-VOTES? $Q DEVWHQWLRQ RFFXUV ZKHQ WKH EHQHFLDO RZQHU RI VKDUHV, RU D EURNHU, EDQN, RU RWKHU QRPLQHH KROGLQJ VKDUHV IRU D EHQHFLDO RZQHU, LV SUHVHQW, LQ SHUVRQ RU E SUR[, DQG HQWLWOHG WR YRWH DW WKH PHHWLQJ, EXW IDLOV WR YRWH RU YROXQWDULO withholds its vote for any of the matters upon which the stockholders are voting. 6

 

I RX DUH D EHQHFLDO RZQHU DQG KROG RXU VKDUHV LQ VWUHHW QDPH,RX ZLOO UHFHLYH LQVWUXFWLRQV IURP RXU EURNHU, EDQN, or other nominee describing how to vote your shares. If you do not instruct your broker or nominee how to vote your shares, they may vote your shares as they decide as to each matter for which they have discretionary authority under WKH UXOHV RI WKH 1<6( $PHULFDQ //& (WKH 1<6( $PHULFDQ). 7KHUH DUH QRQ-GLVFUHWLRQDU PDWWHUV IRU ZKLFK EURNHUV, banks, and other nominees do not have discretionary authority to vote unless they receive timely instructions from you. If a broker, bank, or other nominee does not have discretion to vote on a particular matter and you have not given timely instructions on how the broker, banker, or other nominee should vote your shares, then the broker, bank, or other nominee indicates it does not have authority to vote such shares on its proxy and a “broker non-vote” results. Although any broker non-vote would be counted as present at the Annual Meeting for purposes of determining a quorum, it would be treated as not entitled to vote with respect to non-discretionary matters. If your shares are held in street name and you do not give voting instructions, the record holder will not be permitted to vote your shares with respect to Proposal 1 (Election of Directors), Proposal 2 (Executive Compensation) or Proposal 4 (Approve WKH 2021 /RQJ-7HUP QFHQWLYH 3ODQ), DQG RXU VKDUHV ZLOO EH FRQVLGHUHG EURNHU QRQ-YRWHV ZLWK UHVSHFW WR WKHVH SURSRVDOV. If your shares are held in street name and you do not give voting instructions, the record holder will have discretionary DXWKRULW WR YRWH RXU VKDUHV ZLWK UHVSHFW WR 3URSRVDO 3 (5DWLFDWLRQ RI *UDQW 7KRUQWRQ). WHAT VOTE IS REQUIRED FOR THE PROPOSALS TO BE APPROVED? 3URSRVDO 1 ((OHFWLRQ RI 'LUHFWRUV): 7R EH HOHFWHG, HDFK QRPLQHH IRU HOHFWLRQ DV D GLUHFWRU PXVW UHFHLYH WKH DUPDWLYH YRWH of a plurality of the votes cast by the holders of our Common Stock, present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal. The director nominees who receive the most votes are elected. Votes may be cast in favor of or withheld from the election of each nominee. Abstentions and broker non-votes will KDYH QR HHFW RQ WKH RXWFRPH RI WKLV SURSRVDO. 3URSRVDO 2 (([HFXWLYH &RPSHQVDWLRQ): To consider and vote upon, on a non-binding, advisory basis, a resolution to DSSURYH WKH FRPSHQVDWLRQ RI RXU QDPHG H[HFXWLYH RFHUV DV GLVFORVHG SXUVXDQW WR WKH FRPSHQVDWLRQ GLVFORVXUH UXOHV RI WKH 6(&. 7KLV DGYLVRU YRWH ZLOO EH DSSURYHG LI LW UHFHLYHV WKH DUPDWLYH YRWH RI WKH KROGHUV RI D PDMRULW RI WKH votes cast by the holders of our Common Stock present in person or represented by proxy at the Annual Meeting and HQWLWOHG WR YRWH WKHUHRQ. %URNHU QRQ-YRWHV DQG DEVWHQWLRQV ZLOO QRW DHFW WKH RXWFRPH RI WKLV SURSRVDO. 3URSRVDO 3 (5DWLFDWLRQ RI *UDQW 7KRUQWRQ): 5DWLFDWLRQ RI WKH DSSRLQWPHQW RI *UDQW 7KRUQWRQ //3 DV RXU LQGHSHQGHQW UHJLVWHUHG SXEOLF DFFRXQWLQJ UP IRU WKH VFDO HDU HQGLQJ 'HFHPEHU 31, 2021, UHTXLUHV WKH DUPDWLYH YRWH RI WKH KROGHUV of a majority of the votes cast by the holders of our Common Stock present in person or represented by proxy at the Annual 0HHWLQJ DQG HQWLWOHG WR YRWH WKHUHRQ. %URNHUV ZLOO KDYH GLVFUHWLRQDU DXWKRULW WR YRWH RQ 3URSRVDO 3 DQG, DFFRUGLQJO, WKHUH ZLOO EH QR EURNHU QRQ-YRWHV IRU WKLV SURSRVDO. $EVWHQWLRQV ZLOO QRW DHFW WKH RXWFRPH RI WKLV SURSRVDO. 3URSRVDO 4 ($SSURYH WKH 2021 /RQJ-7HUP QFHQWLYH 3ODQ): $SSURYDO RI WKH 2021 /RQJ-7HUP QFHQWLYH 3ODQ, UHTXLUHV WKH DUPDWLYH YRWH RI WKH KROGHUV RI D PDMRULW RI WKH YRWHV FDVW E WKH KROGHUV RI RXU &RPPRQ 6WRFN SUHVHQW LQ SHUVRQ or represented by proxy at the Annual Meeting and entitled to vote thereon. Broker non-votes and abstentions will not DHFW WKH RXWFRPH RI WKLV SURSRVDO. HOW DOES THE BOARD RECOMMEND THAT I VOTE? Our Board recommends a vote: FOR each of the nominees for director; FOR QRQ-ELQGLQJ, DGYLVRU DSSURYDO RI QDPHG H[HFXWLYH RFHU FRPSHQVDWLRQ; FOR WKH UDWLFDWLRQ RI WKH DSSRLQWPHQW RI *UDQW 7KRUQWRQ //3 DV RXU LQGHSHQGHQW UHJLVWHUHG SXEOLF DFFRXQWLQJ UP IRU WKH VFDO HDU HQGLQJ 'HFHPEHU 31, 2021; DQG FOR WKH DSSURYDO RI WKH 2021 /RQJ-7HUP QFHQWLYH 3ODQ. 2021 Proxy Statement 7

 

QUESTIONS AND ANSWERS ABOUT THE 2021 ANNUAL MEETING AND VOTING (CONT.) WHAT HAPPENS IF I PROVIDE MY SIGNED PROXY BUT DO NOT SPECIFY HOW I WANT MAY SHARES TO BE VOTED, OR IF ADDITIONAL PROPOSALS ARE PRESENTED AT THE ANNUAL MEETING? If you provide us your signed proxy but do not specify how to vote, we will vote your shares as follows: Proposal 1. FOR the election of each director nominee; 3URSRVDO 2. )25 WKH DSSURYDO, RQ DQ DGYLVRU EDVLV, RI WKH FRPSHQVDWLRQ RI RXU QDPHG H[HFXWLYH RFHUV; 3URSRVDO 3. )25 WKH UDWLFDWLRQ RI WKH DSSRLQWPHQW RI *UDQW 7KRUQWRQ //3 DV WKH &RPSDQV LQGHSHQGHQW UHJLVWHUHG SXEOLF DFFRXQWLQJ UP IRU WKH HDU HQGLQJ 'HFHPEHU 31, 2021; 3URSRVDO 4. )25 WKH DGRSWLRQ RI WKH 2021 /RQJ-7HUP QFHQWLYH 3ODQ; As of the date of this proxy statement, we do not expect any additional matters to be presented for a vote at the Annual Meeting. If you grant a proxy, the proxy holder will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting. WHO WILL BEAR THE COST OF SOLICITING VOTES FOR THE ANNUAL MEETING? We will bear all expenses of soliciting proxies. We have engaged Broadridge Financial Solutions, Inc. to aid in the distribution of proxy materials and to provide voting and tabulation services for the Annual Meeting. We have also HQJDJHG $OOLDQFH $GYLVRUV WR DVVLVW LQ WKH VROLFLWDWLRQ RI SUR[LHV IRU D IHH RI $10,000. 'LUHFWRUV, RFHUV, DQG HPSORHHV will not be additionally compensated but may be reimbursed for reasonable out-of-pocket expenses in connection with DQ VROLFLWDWLRQ. Q DGGLWLRQ, ZH PD UHLPEXUVH EURNHUDJH UPV, FXVWRGLDQV, QRPLQHHV, GXFLDULHV, DQG RWKHU SHUVRQV UHSUHVHQWLQJ EHQHFLDO RZQHUV RI RXU &RPPRQ 6WRFN IRU WKHLU UHDVRQDEOH H[SHQVHV LQ IRUZDUGLQJ VROLFLWDWLRQ PDWHULDO WR VXFK EHQHFLDO RZQHUV. MAY I PROPOSE ACTIONS FOR CONSIDER ATION AT THE 2022 ANNUAL MEETING OF STOCKHOLDERS OR NOMINATE INDIVIDUALS TO SERVE AS DIRECTORS? You may submit proposals for consideration at future stockholder meetings, including director nominations. Please read “Stockholder Proposals and Director Nominations for the 2022 Annual Meeting” for information regarding the submission of stockholder proposals and director nominations for consideration at next year’s annual meeting. 8

 

2021 Proxy Statement 9

 

 

OUR 2020 PERFORMANCE HIGHLIGHTS 2XU PXOWL-IDFHWHG LQLWLDWLYHV WKURXJKRXW 2020 VLJQL FDQWO FRQWULEXWHG WR RXU  QDQFLDO SHUIRUPDQFH IRU WKH HDU. .H highlights included: 1$ QRQ-*$ $3 QDQFLDO PHDVXUH; VHH WKH HQG RI WKLV GRFXPHQW IRU UHFRQFLOLDWLRQV WR WKH PRVW FRPSDUDEOH *$ $3 PHDVXUHV. 2/LI WLQJ FRVW HTXDOV OHDVH RSHUDWLQJ H[SHQVHV H[FOXGLQJ VHYHUDQFH DQG DG YDORUHP WD[ GLYLGHG E WRWDO EDUUHOV RI RLO equivalent sold during the same period. 10 $10.52 /LIWLQJ &RVW SHU %RH2 8,790Boe/d Net Sales per day $72.2MM Net Cash Provided by Operating Activities $39.7MM Free Cash Flow1 $86.1MM Adjusted EBITDA1 $(253.4)MM 1HW /RVV

 

7KURXJK RXU VWUDWHJLF HRUWV GHVLJQHG WR GULYH QDQFLDO VWDELOLW DQG LPSURYH WKH EDODQFH VKHHW, ZH: Decreased lease operating expense, or /2(, E 25% from 2019 levels. Reduced year-over-year capital expenditures to $30 PLOOLRQ. Performed 29 CTRs. Drilled six successful wells. *HQHUDWHG IUHH FDVK RZ of $40 million1 (generated free FDVK RZ LQ every quarter of 2020). Paid down $75 PLOOLRQ RI borrowings on our bank credit facility, with additional debt reduction targeted for 2021. :H HQGHG 2020 ZLWK SURYHG UHVHUYHV RI 76.5 PLOOLRQ EDUUHOV RI RLO HTXLYDOHQW (00%RH), FRPSDUHG ZLWK 81.1 00%RH DW year-end 2019: $GGLWLRQV, LPSURYHG ZHOO SHUIRUPDQFH DQG WHFKQLFDO UHYLVLRQV OHG WR QHW XSZDUG UHYLVLRQV RI 1.3 00%RH; 5HGXFHG 6(& SULFLQJ OHG WR GRZQZDUG UHYLVLRQV RI 2.7 00%RH; DQG 3URGXFWLRQ ZDV 3.2 00%RH. 1$ QRQ-*$ $3 PHDVXUH; VHH WKH HQG RI WKLV UHSRU W IRU D UHFRQFLOLDWLRQ WR WKH PRVW FRPSDUDEOH *$ $3 PHDVXUH. 2021 Proxy Statement 11

 

OUR COMMITMENT TO ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) We are focused on creating long-term value for our stockholders and fostering a culture that is steadfast on environmental sustainability, operational safety, social responsibility and sound corporate governance. ENVIRONMENTAL We are committed to protecting the environment in a manner that follows or goes beyond FRPSOLDQFH ZLWK DOO IHGHUDO, VWDWH DQG ORFDO UHJXODWLRQV. 2XU HRUWV WR PLQLPL]H RXU RSHUDWLRQDO LPSDFW DUH PXOWL-IDFHWHG, LQFOXGLQJ UHGXFLQJ JUHHQKRXVH JDV (*+*) DQG DLU emissions, minimizing the use of freshwater, preventing spills, safeguarding local water supplies and minimizing waste. Our ongoing environmental programs not only reduce our RSHUDWLRQDO LPSDFWV EXW DOVR LPSURYH HFLHQF, ORZHU FRVWV DQG UHGXFH ULVN. 6RPH RI WKH steps we take to safeguard the environment include: &RQWLQXRXV DQG DFWLYH PRQLWRULQJ RI HPLVVLRQV; 'DLO ZHOO FKHFNV WR KHOS GHWHFW DQG SUHYHQW OHDNV DQG HPLVVLRQ HYHQWV; 3ULRULWL]H ORFDO VRXUFLQJ RI VDQG DQG ZDWHU IRU GHYHORSPHQW DFWLYLWLHV, ZKLFK UHGXFHV transportation-related emissions; 0LQLPL]LQJ DULQJ, ZKLFK LV DVVLVWHG E WKH KLJK RLO-WR-JDV UDWLR RI RXU SURGXFW PL[; /HYHUDJLQJ WKH XVH RI ORQJHU ODWHUDOV WR UHGXFH WKH VXUIDFH LPSDFW RI RXU GHYHORSPHQW activities; 0LQLPL]LQJ WKH XVH RI FKHPLFDO DGGLWLYHV LQ RXU ZHOO FRPSOHWLRQ IUDFNLQJ RSHUDWLRQV; /HYHUDJLQJ EHVW-LQ-FODVV HTXLSPHQW DW RXU IDFLOLWLHV WR UHGXFH YHQWHG HPLVVLRQV, including not using high-bleed pneumatic controllers, which is a major source of vented emissions; and 8WLOL]LQJ WKH EHVW LQGXVWU SUDFWLFHV IRU GULOOLQJ, ZHOO GHVLJQ DQG ZHOO FDVLQJ WR SURWHFW groundwater resources. 12

 

HEALTH & SAFETY We are committed to building a safety culture that empowers employees and contractors to act as needed to work safely and to stop the job, without retribution, if conditions are deemed unsafe. We strive to be incident-free every day across our operations. We are focused on building and maintaining a safe workplace for all employees and contractors. The oil and gas industry has a number of inherent risks and our workers are often RXWGRRUV, LQ DOO VHDVRQV DQG DOO WSHV RI ZHDWKHU. Q DGGLWLRQ, RXU HOG SHUVRQQHO VSHQG VLJQLFDQW WLPH GULYLQJ RQ D GDLO EDVLV, SXWWLQJ WKHP DW ULVN IRU GULYLQJ LQFLGHQWV. $ VWURQJ safety culture is essential to the Company’s success, and we emphasize the important role that all personnel play in creating and maintaining a safe work environment. :H RHU D ZLGH UDQJH RI WUDLQLQJ RSSRUWXQLWLHV IRU HPSORHHV DQG FRQWUDFWRUV WR KHOS them develop their skills and understanding of our health and safety policy and programs. Q DGGLWLRQ WR WHDFKLQJ VSHFLF VNLOOV, WKHVH WUDLQLQJ RSSRUWXQLWLHV HQFRXUDJH SHUVRQDO responsibility for safe operating conditions and help to build a culture of individual accountability for conducting job tasks in a safe and responsible manner. &29' 9 5HVSRQVH Our COVID-19 management plan was built around the need to support all employees in managing their personal and professional challenges. Frequent and transparent communications were the focus at every level of the organization. During the early stages of the pandemic, our management team directed the Company’s response by implementing all relevant county, state and local government guidelines, directives and regulations. We developed and adopted work-from-home provisions and procedures, implemented safe working protocols for production teams, assessed and LPSOHPHQWHG DSSURSULDWH UHWXUQ-WR-RFH SURWRFROV, DQG SURYLGHG WLPHO DQG WUDQVSDUHQW communications to employees and key stakeholders. Q UHVSRQVH WR WKH &29'-19 SDQGHPLF, 5LQJ EHJDQ SURYLGLQJ WKH IROORZLQJ EHQHWV WR LWV employees: &RYHULQJ WKH FRVW RI &29'-19 WHVWLQJ WKURXJK H[SDQGHG LQVXUDQFH FRYHUDJH; 3URPRWLQJ WHOHKHDOWK EHQHWV; 3URPRWLQJ PHQWDO KHDOWK DQG ZHOO-EHLQJ SODQV; DQG 3URYLGLQJ DGGLWLRQDO SDLG VLFN OHDYH IRU TXDUDQWLQHG HPSORHHV. 2021 Proxy Statement 13

 

OUR COMMITMENT TO ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) (CONT.) SOCIAL We strive to attract, develop and retain the best workforce in the industry as we UHFRJQL]H RXU IXWXUH VXFFHVV LV D GLUHFW UHVXOW RI WKHLU HRUWV. $V VXFK, ZH SURYLGH DQ DWWUDFWLYH FRPSHQVDWLRQ DQG FRPSUHKHQVLYH EHQHWV SURJUDP, DV ZHOO DV D SRVLWLYH work environment designed to drive a culture of innovation. We support both Company LGHQWLHG DQG HPSORHH LGHQWLHG HGXFDWLRQDO RSSRUWXQLWLHV IRU HPSORHHV WR DGYDQFH in their technical and managerial skills and to help provide opportunities to advance throughout our Company. Our support comes in the form of full or partial funding of HGXFDWLRQDO SURJUDPV DQG RSSRUWXQLWLHV, LQFOXGLQJ WLPH R ZRUN WR DWWHQG DQG/RU SUHSDUH for such programs. We will continue to promote honesty and integrity in all interactions with our employees and actively support the communities in which we operate with both our time and resources. We are also committed to continuously providing an inclusive work environment where all of our employees can be respected, valued, and successful in achieving their goals, all while contributing to the Company’s success. $V RI 'HFHPEHU 31, 2020, ZH KDG 41 IXOO-WLPH HPSORHHV DV ZHOO DV D GLYHUVH JURXS RI LQGHSHQGHQW FRQWUDFWRUV ZKR DVVLVW RXU IXOO-WLPH VWD LQ D UDQJH RI DUHDV LQFOXGLQJ JHRORJ, HQJLQHHULQJ, ODQG, DFFRXQWLQJ, DQG HOG RSHUDWLRQV, DV QHHGHG. 1RQH DUH represented by labor unions or covered by any collective bargaining agreements. 'LYHUVLW DQG QFOXVLRQ The unique backgrounds and experiences of our employees help to develop a wide UDQJH RI SHUVSHFWLYHV WKDW OHDG WR EHWWHU VROXWLRQV. 2XU VWD V GLYHUVLW LV UHHFWHG LQ RXU IXOO-WLPH HPSORHHV ZKHUH 22% DUH ZRPHQ DQG QHDUO RQH WKLUG UHSUHVHQW PLQRULWLHV. The majority of our employees are citizens of the United States, with a few retaining dual citizenships in other countries. The employees who are not U.S. citizens are legally registered to live and work here and the Company is committed to helping those employees retain their ability to remain in the U.S. and continue their employment. 14

 

 

GOVERNANCE We leverage sound corporate governance practices that promote accountability and good decision making, which is a key tenet to our long-term success. Ring is focused on conducting its business and interactions with all stakeholders in a responsible and ethical manner. To promote these goals, we have adopted a Code of Business Conduct and Ethics that is available on our website along with other key governance documents and related information. 5LQJ DFNQRZOHGJHV WKH LPSRUWDQFH RI DQG LV FRPPLWWHG WR SURYLGLQJ IXUWKHU WUDQVSDUHQF RQ (6* PDWWHUV. 'XULQJ 2021, ZH FKDQJHG WKH QDPH RI RXU 1RPLQDWLQJ & &RUSRUDWH *RYHUQDQFH &RPPLWWHH WR 1RPLQDWLQJ, (QYLURQPHQWDO, 6RFLDO, DQG *RYHUQDQFH &RPPLWWHH WR DFFXUDWHO UH HFW WKHVH SULRULWLHV. :H DOVR EHJDQ D WKRURXJK UHYLHZ SURFHVV WKDW ZLOO UHVXOW LQ D UREXVW VXVWDLQDELOLW UHSRUW WKDW LQFOXGHV TXDQWLWDWLYH DQG TXDOLWDWLYH DQDOVLV UH HFWLQJ WKH 6XVWDLQDELOLW Accounting Standards Board’s (“SASB) 2LO DQG *DV ([SORUDWLRQ DQG 3URGXFWLRQ 6XVWDLQDELOLW $FFRXQWLQJ 6WDQGDUG, WKH recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”), the Sustainable Development *RDOV (SDG’s”) promulgated by the United Nations, and other reporting guidance from industry frameworks and VWDQGDUGV. :H DOVR FKDQJHG RXU EODZV DQG FKDUWHUV WR D HFW WKHVH FKDQJHV. 2021 Proxy Statement 15

 

BOARD COMPOSITION AND EXPERIENCE 6 MEN 1 WOMAN DIVERSITY BY GENDER 6 INDEPENDENT 1 NOT INDEPENDENT DIVERSITY BY INDEPENDENCE DIVERSITY BY TENURE Years DIVERSITY BY AGE $YHUDJH $JH: 67 16 71+ 66-70 60-65 >5 1-5 <1

 

2021 Proxy Statement 17

 

At the Annual Meeting, the stockholders will elect seven directors named in this proxy statement to serve on our Board XQWLO WKH 2022 DQQXDO PHHWLQJ RU XQWLO WKHLU VXFFHVVRUV DUH GXO HOHFWHG DQG TXDOLHG. 8SRQ WKH UHFRPPHQGDWLRQ RI WKH 1RPLQDWLQJ, (QYLURQPHQWDO, 6RFLDO, DQG *RYHUQDQFH (1(6*) &RPPLWWHH RI WKH %RDUG1, our Board has nominated as directors the following seven individuals, each of whom is presently serving as a director. DIRECTORS The following table sets forth the names, ages, and titles, as of April 22, 2021, of each of our directors: Paul D. McKinney 62 &KDLUPDQ RI WKH %RDUG RI 'LUHFWRUV DQG &KLHI ([HFXWLYH 2FHU Anthony B. Petrelli 68 /HDG 'LUHFWRU John A. Crum 69 Director 5LFKDUG (. +DUULV 68 Director 7KRPDV /. 0LWFKHOO 61 Director Regina Roesener 61 Director Clayton E. Woodrum 81 Director We did not pay any third-party fees to assist in the process of identifying or evaluating candidates. Each nominee is currently a director on our Board and all directors were previously elected to our Board by our stockholders. Messrs. :RRGUXP DQG 3HWUHOOL MRLQHG WKH %RDUG LQ -DQXDU 2013. 0V. 5RHVHQHU MRLQHG WKH %RDUG LQ 6HSWHPEHU 2019. 0HVVUV. 0F.LQQH, 0LWFKHOO, &UXP DQG +DUULV MRLQHG WKH %RDUG LQ 2FWREHU 2020. Each nominee has consented to being named as a nominee in this proxy statement and has indicated a willingness to serve on our Board if elected. Stockholders may not cumulate their votes in the election of our directors. We have no reason to believe that the nominees will be unable or unwilling to serve if elected; however, if a nominee should become unable or unwilling to serve for any reason, proxies may be voted for another person nominated as a substitute by our Board. 1Q 2021, WKH %RDUG FKDQJHG WKH QDPH RI WKH 1RPLQDWLQJ & &RUSRUDWH *RYHUQDQFH &RPPLWWHH WR WKH 1RPLQDWLQJ, (QYLURQPHQWDO, 6RFLDO DQG *RYHUQDQFH (1(6* ) &RPPLWWHH. 18 Independent Directors NAME AGEPOSITION Management Directors PROPOSAL 1: ELECTION OF DIRECTORS

 

BOARD COMMITTEES Audit Committee Compensation Committee Nominating, Environmental, Social, and Governance Committee Committee Chairperson Lead Independent Director %HORZ DUH VXPPDULHV RI WKH EDFNJURXQG DQG EXVLQHVV H[SHULHQFH, DWWULEXWHV, TXDOLFDWLRQV, DQG VNLOOV RI WKH FXUUHQW directors and director nominees of the Company: 0F.LQQH LV D PHPEHU RI WKH ERDUG RI GLUHFWRUV IRU 3UR--HFW +ROGLQJV, //& D SULYDWHO *XOI 3URIHVVLRQDO 3XEOLVKLQJ, (OVHYLHU, DQG 63( 75708, $SSOLHG 5HVHUYRLU &KDUDFWHUL]DWLRQ 2021 Proxy Statement 19 Paul D. McKinney Chairman of the Board of Directors DQG &KLHI ([HFXWLYH 2FHU Age: 62 Director Since: 2020 Paul D. McKinney joined Ring on October 1, 2020 and his most recent role prior to joining the Company was President, CEO & Director of SandRidge Energy (NYSE:SD) (“SandRidge”). +H DFFHSWHG WKH SRVW LQ -DQXDU 2019 DQG FRQWLQXHG WKHUH HOHYHQ PRQWKV EHIRUH UHVLJQLQJ in December 2019. Prior to SandRidge, Mr. McKinney was President & Chief Operating 2FHU IRU <XPD (QHUJ, QF. (NYSE:YUMA)(“Yuma”) VLQFH $SULO 2017 DIWHU VHUYLQJ DV <XPDV ([HFXWLYH 9LFH 3UHVLGHQW DQG &KLHI 2SHUDWLQJ 2FHU VLQFH 2FWREHU 2014. 0U. McKinney served as a petroleum engineering consultant for Yuma’s predecessor from June 2014 to September 2014 and for Yuma from September 2014 to October 2014. Mr. McKinney VHUYHG DV 5HJLRQ 9LFH 3UHVLGHQW, *XOI &RDVW 2QVKRUH, IRU $SDFKH &RUSRUDWLRQ (NYSE:APA) (“Apache) IURP 2010 WKURXJK 2013, ZKHUH KH ZDV UHVSRQVLEOH IRU WKH GHYHORSPHQW DQG DOO RSHUDWLRQDO DVSHFWV RI WKH *XOI &RDVW UHJLRQ IRU $SDFKH. 3ULRU WR KLV UROH DV 5HJLRQ Vice President, Mr. McKinney was Manager, Corporate Reservoir Engineering, for Apache IURP 2007 WKURXJK 2010. )URP 2006 WKURXJK 2007, 0U. 0F.LQQH ZDV 9LFH 3UHVLGHQW DQG Director, Acquisitions & Divestitures for Tristone Capital, Inc. Mr. McKinney commenced his career with Anadarko Petroleum Corporation (NYSE:APC)(“Anadarko”) and held YDULRXV SRVLWLRQV ZLWK $QDGDUNR RYHU D 23 HDU SHULRG IURP 1983 WR 2006, LQFOXGLQJ KLV last title as Vice President of Reservoir Engineering, Anadarko Canada Corporation. Mr. RZQHG RLO HOG FKHPLFDO VHUYLFHV FRPSDQ. +H FR-DXWKRUHG $GYDQFHG 5HVHUYRLU (QJLQHHULQJ, IRU 0D[LPL]LQJ 5HVHUYHVs *URZWKs DQG 3URWDELOLW LQ 7LJKW *DV 6DQGV $ SDUDGLJP 6KLIW LQ 'HYHORSPHQW 6WUDWHJLHV IRU /RZ-3HUPHDELOLW 5HVHUYRLUV. Mr. McKinney entered the United States Air Force upon graduating from high school and continued in the United States Air )RUFH 5HVHUYHV ZKLOH DWWHQGLQJ FROOHJH. 0U. 0F.LQQH DWWHQGHG /RXLVLDQD 7HFK 8QLYHUVLW DQG JUDGXDWHG ZLWK D %DFKHORU RI 6FLHQFH GHJUHH LQ 3HWUROHXP (QJLQHHULQJ LQ 1983. (HFWLYH 2FWREHU 1, 2020, 0U. 0F.LQQH ZDV DSSRLQWHG WR WKH %RDUG WR OO D YDFDQF created from the resignation of prior directors. At that time, Mr. McKinney was DSSRLQWHG DV &KDLUPDQ RI WKH %RDUG DQG DV &KLHI ([HFXWLYH 2FHU. 0U. 0F.LQQH ZDV elected to the Board by the stockholders at the 2020 annual stockholders’ meeting. 7KH SDU WLFXODU H[SHULHQFH, TXDOLFDWLRQV, DW WULEXWHV, DQG VNLOOV WKDW OHG RXU %RDUG WR FRQFOXGH WKDW 0U. 0F.LQQH VKRXOG VHU YH DV GLUHFWRU LQFOXGH KLV 37 HDUV RI H[SHULHQFH in the oil and gas industr y; his extensive experience in advanced reser voir engineering and economic evaluations, strategic planning, and pursuing strategic transactions; his corporate governance, compliance, and risk management experience; and his experience as a director of public and private companies.

 

 

board experience. (QHUJ &RUSRUDWLRQ, GLVWULFW DQG UHJLRQDO PDQDJHU IRU 3DFLF (QWHUSULVHV 2LO &RPSDQ, DQG 20 John A. Crum Independent Director Age: 69 Director Since: 2020 John A. Crum LV PDQDJLQJ SDUWQHU RI -$& (QHUJ 3DUWQHUV, //&, IRUPHG WR SURYLGH DGYLFH WR FRPSDQLHV DQG LQGLYLGXDO LQYHVWRUV LQ RLO DQG JDV H[SORUDWLRQ DQG SURGXFWLRQ. +H KDV been involved with worldwide oil and gas development for more than 40 years. Mr. Crum FXUUHQWO VHUYHV DV D GLUHFWRU IRU: &+& +HOLFRSWHUV, D JOREDO VXSSOLHU RI URWRUFUDIW VHUYLFHV; Crestone Peak Resources, an unconventional resource developer concentrating on the '-%DVLQ; )RUW $FUHV (QHUJ, //&, DQ RLO FRPSDQ GHYHORSLQJ 3HUPLDQ EDVLQ ZDWHURRG DVVHWV; DQG WKH $PHULFDQ +HDUW $VVRFLDWLRQ, +RXVWRQ 'LYLVLRQ. +H VHUYHG DV FKLHI H[HFXWLYH RFHU DQG GLUHFWRU RI 0LGVWDWHV 3HWUROHXP &RPSDQ QF. (NYSE:MPO), from 2011 to 2014. 0U. &UXP OHG WKH SXEOLF RHULQJ FRPSOHWHG LQ $SULO 2012 DQG WKH VXEVHTXHQW H[SDQVLRQ RI WKH FRPSDQ ZLWK DFTXLVLWLRQV WRWDOLQJ $1.3 ELOOLRQ. +H GLUHFWHG D YHU DFWLYH GHYHORSPHQW SURJUDP, LQFUHDVLQJ SURGXFWLRQ WR RYHU 33,000 ERHSG LQ HLJKWHHQ PRQWKV. )URP 1995 WR 2011, Mr. Crum served in a variety of executive roles for Apache Corporation (NYSE:APA), LQFOXGLQJ FR-FKLHI RSHUDWLQJ RFHU DQG SUHVLGHQW, 1RUWK $PHULFD, SUHVLGHQW $SDFKH &DQDGD /WG., PDQDJLQJ GLUHFWRU $SDFKH 1RUWK 6HD (8.), PDQDJLQJ 'LUHFWRU $SDFKH (QHUJ /WG. (Australia), and executive vice president for Eurasia and worldwide new ventures. Earlier in his career, Mr. Crum held positions of responsibility for several independent exploration and production companies including vice president of engineering and operations of Aquila GLVWULFW HQJLQHHU UROHV IRU 6RXWKODQG 5RDOW &RPSDQ. +H EHJDQ KLV FDUHHU ZLWK &RQRFR LQ 1975. +H KDV SUHYLRXVO VHUYHG DV D GLUHFWRU RI WKH KROGLQJ FRPSDQ IRU WKH OLVWHG (NYSE:MEP) PLGVWUHDP 0/3, 0LGFRDVW (QHUJ 3DUWQHUV, /3 DQG IRU &RVNDWD QF., D SULYDWH biofuel technology company. Mr. Crum has been active with industry groups serving on the boards of the Australian Petroleum Production and Exploration Association (APPEA), UK 2VKRUH 2SHUDWRUV $VVRFLDWLRQ (8.22$), DQG &DQDGLDQ $VVRFLDWLRQ RI 3HWUROHXP 3URGXFHUV (&$33) GXULQJ DVVLJQPHQWV LQ WKRVH FRXQWULHV. +H KROGV D %DFKHORU RI 6FLHQFH GHJUHH LQ petroleum engineering from the New Mexico Institute of Mining and Technology. (HFWLYH 2FWREHU 29, 2020, 0U. &UXP ZDV DSSRLQWHG WR WKH %RDUG WR OO D YDFDQF FUHDWHG from the resignation of a prior director. Mr. Crum was elected to the Board by the stockholders at the 2020 annual stockholders’ meeting. 7KH SDUWLFXODU H[SHULHQFH, TXDOLFDWLRQV, DWWULEXWHV, DQG VNLOOV WKDW OHG RXU %RDUG WR FRQFOXGH WKDW 0U. &UXP VKRXOG VHUYH DV D GLUHFWRU LQFOXGH KLV VLJQLFDQW ZRUOGZLGH RLO DQG JDV experience; and his prior executive and Board experience. Board Committees: Anthony B. Petrelli /HDG QGHSHQGHQW 'LUHFWRU Age: 68 Director Since: 2013 Anthony B. Petrelli is the President, Chairman, and Director of Investment Banking Services RI 17% )LQDQFLDO &RUSRUDWLRQ, D 'HQYHU, &RORUDGR EDVHG QDQFLDO VHUYLFHV UP IRXQGHG LQ 1977. %HJLQQLQJ KLV FDUHHU LQ 1972, 0U. 3HWUHOOL KDV H[WHQVLYH H[SHULHQFH LQ WKH DUHDV RI RSHUDWLRQV, VDOHV, WUDGLQJ, PDQDJHPHQW RI VDOHV, XQGHUZULWLQJ DQG FRUSRUDWH QDQFH. +H has served on numerous regulatory and industry committees including service on the FINRA Corporate Finance Committee, the NASD Small Firm Advisory Board and as Chairman of the )15$ 'LVWULFW %XVLQHVV &RQGXFW &RPPLWWHH, 'LVWULFW 3. $GGLWLRQDOO, 0U. 3HWUHOOL KDV VHUYHG RQ WKH ERDUG RI GLUHFWRUV RI 6HQVXV +HDOWKFDUH, QF. (NASDAQ:SRTS) VLQFH -XO 2016. 0U. Petrelli received his Bachelor of Science in Business (Finance) and his Master of Business Administration (MBA) from the University of Colorado and a Master of Arts in Counseling from Denver Seminary. 7KH SDUWLFXODU H[SHULHQFH, TXDOLFDWLRQV, DWWULEXWHV, DQG VNLOOV WKDW OHG RXU %RDUG WR FRQFOXGH WKDW 0U. 3HWUHOOL VKRXOG VHUYH DV GLUHFWRU LQFOXGH KLV H[SHULHQFH DQG H[SHUWLVH LQ QDQFLDO DQG EXVLQHVV PDWWHUV ZLWK VLJQLFDQW LQYROYHPHQW LQ FRUSRUDWH JRYHUQDQFH DQG QDQFLDO matters; his service on the FINRA Corporate Finance Committee, the NASD Small Firm Advisory Board and as Chairman of the FINRA District Business Conduct Committee; and his Board Committees:

 

team successfully developed, implemented and provided oversight for processes to source, 2021 Proxy Statement 21 Richard E. Harris Independent Director Age: 68 Director Since: 2020 Richard E. Harris EHJDQ KLV FRUSRUDWH FDUHHU LQ 1981, MRLQLQJ 7KH 6WDQGDUG 2LO &RPSDQ of Ohio (“SOHIO) LQ WKH 7UHDVXU 'HSDUWPHQW. 62+2 ZDV DFTXLUHG E %ULWLVK 3HWUROHXP plc (“BP) LQ 1987. 0U. +DUULV FRQWLQXHG WR EH DVVLJQHG FKDOOHQJLQJ SRVLWLRQV ZLWK LQFUHDVLQJ UHVSRQVLELOLW ZLWKLQ %3 )LQDQFH DQG %3 $PHULFD )LQDQFH. 0U. +DUULVDFKLHYHPHQWV HDUQHG him a two year assignment in Belgium as a member of a team charged with integrating QDQFH IXQFWLRQV DFURVV (XURSH LQWR %3 2LO (XURSH LQ %UXVVHOV. Q 1995, 0U. +DUULV OHIW %3 WR MRLQ &RPSDT &RPSXWHU &RUSRUDWLRQ LQ D QHZO FUHDWHG SRVLWLRQ ZKHUH 0U. +DUULV GHYHORSHG DQG HQKDQFHG WKH FRPSDQV JOREDO FDSDELOLWLHV LQ FRUSRUDWH QDQFH, QDQFLDO planning, M&A pre-close analysis and post close evaluation as well as global treasury PDQDJHPHQW. &RPSDT SURPRWHG 0U. +DUULV WR $VVLVWDQW 7UHDVXUHU, *OREDO 7UHDVXU LQ 1999 IRU KLV DFFRPSOLVKPHQWV. Q 2003, 0U. +DUULV MRLQHG &XPPLQV QF.V H[HFXWLYH WHDP as Vice President, Treasurer and led initiatives to develop best in class global treasury SURFHVVHV DQG SURFHGXUHV. 0U. +DUULV ZDV DOVR VHFUHWDU RI WKH )LQDQFH &RPPLWWHH RI WKH Cummins Board of Directors and collaborated with the Board members on a frequent EDVLV. 0U. +DUULV HVWDEOLVKHG D ZRUOG FODVV JOREDO WUHDVXU RUJDQL]DWLRQ ZKLFK VXSSRUWHG WKH &XPPLQVEXVLQHVVHV LQ 198 FRXQWULHV ZRUOGZLGH. %DVHG RQ KLV SHUIRUPDQFH DV 7UHDVXUHU, 0U. +DUULV ZDV SURPRWHG WR 9LFH 3UHVLGHQW, &KLHI QYHVWPHQW 2FHU LQ 2008. 0U. +DUULVevaluate, and execute the company’s strategic acquisitions, investments, and joint ventures. Q 2015, 0U. +DUULV UHWLUHG WR $XVWLQ, 7H[DV. 0U. +DUULV UHFHLYHG D %DFKHORU RI 6FLHQFH LQ Mathematics and Master of Business Administration from John Carroll University. (HFWLYH 2FWREHU 29, 2020, 0U. +DUULV ZDV DSSRLQWHG WR WKH %RDUG WR OO D YDFDQF FUHDWHG IURP WKH UHVLJQDWLRQ RI D SULRU GLUHFWRU. 0U. +DUULV ZDV HOHFWHG WR WKH %RDUG E WKH stockholders at the 2020 annual stockholders’ meeting. 7KH SDUWLFXODU H[SHULHQFH, TXDOLFDWLRQV, DWWULEXWHV, DQG VNLOOV WKDW OHG RXU %RDUG WR FRQFOXGH WKDW 0U. +DUULV VKRXOG VHU YH DV D GLUHFWRU LQFOXGH KLV VLJQLFDQW ZRUOGZLGH RLO and gas experience; and his prior executive and Board experience. Board Committees:

 

being Vice President and Controller. Mr. Mitchell currently serves on the boards of Sundance that Ms. Roesener should serve as director include her experience and knowledge in the 22 Regina Roesener Independent Director Age: 61 Director Since: 2019 Regina Roesener FXUUHQWO VHUYHV DV WKH &KLHI 2SHUDWLQJ 2FHU, 'LUHFWRU RI &RUSRUDWH Finance and a member of the board of directors of NTB Financial Corporation (“NTB”), a PHPEHU UP RI )15$ DQG DOVR D 5HJLVWHUHG QYHVWPHQW $GYLVRU ZLWK WKH 6(&. 'XULQJ KHU PRUH WKDQ 30-HDU WHQXUH DW 17%, 0V. 5RHVHQHU KDV EHHQ LQYROYHG LQ WKH FDSLWDO UDLVLQJ HRUWV IRU QXPHURXV SXEOLF DQG SULYDWH FRPSDQLHV, PDQ RI ZKLFK ZHUH LQ WKH HQHUJ VHFWRU, FROOHFWLYHO UDLVLQJ PRUH WKDQ $300 PLOOLRQ. 7KLV LQYROYHV ZRUNLQJ FORVHO ZLWK H[HFXWLYH management of the issuing company to develop and deliver their investor presentations and road shows, utilizing long-standing strategic relationships with participating FINRA PHPEHU UPV. Q DGGLWLRQ, LQ KHU SRVLWLRQ DW 17%, 0V. 5RHVHQHU ZDV UHVSRQVLEOH IRU WKH management of an internal market broker for a large, SEC registered public company, where she facilitated more than $500 million in transactions over 15 years. She has served as a board member of the National Investment Bankers Association and as a member of Women in Syndicate Association and has served as a board member for the Denver chapter of the March of Dimes. Ms. Roesener received her Bachelor of Science degree in Education from WKH 8QLYHUVLW RI &RORUDGR LQ 1982. 7KH SDUWLFXODU H[SHULHQFH, TXDOLFDWLRQV, DWWULEXWHV, DQG VNLOOV WKDW OHG RXU %RDUG WR FRQFOXGH DUHDV RI FRUSRUDWH QDQFH DQG FDSLWDO PDUNHWV, ZKLFK WKH %RDUG EHOLHYHV ZLOO SURYLGH valuable insight and assistance in the future growth of the Company. Board Committees: Thomas L. Mitchell Independent Director Age: 61 Director Since: 2020 Thomas L. Mitchell LV D VWUDWHJLF QDQFH OHDGHU ZLWK D UHFRUG RI GULYLQJ JURZWK LQ HQHUJ EXVLQHVV PRGHOV DV WKH FKLHI QDQFLDO RFHU RI ERWK ODUJH DQG VPDOO FRPSDQLHV LQ WKH RLO DQG JDV LQGXVWU. +H KDV KDG D FDUHHU RI VWURQJ )RUWXQH 500 H[SHULHQFH ZLWK H[SORUDWLRQ DQG SURGXFWLRQ FRPSDQLHV, DQG EURDG HQHUJ H[SRVXUH ZLWK RVKRUH GULOOLQJ DQG PLGVWUHDP JDWKHULQJ DQG PDUNHWLQJ FRPSDQLHV. Q KLV ODVW SRVLWLRQ DV (93 DQG &KLHI )LQDQFLDO 2FHU RI Devon Energy Corporation (NYSE:DVN) IURP 2014 WR 2017, 0U. 0LWFKHOO OHDG WKH QDQFH DQG business development organizations, and also helped the company successfully strengthen its asset quality through strategic acquisitions. Previously, Mr. Mitchell served as EVP and &KLHI )LQDQFLDO 2FHU DQG D PHPEHU RI WKH ERDUG RI GLUHFWRUV RI 0LGVWDWHV 3HWUROHXP Company (now NYSE:AMPY), a private equity-funded exploration and production company. :KLOH WKHUH, 0U. 0LWFKHOO KHOSHG OHDG WKH LQLWLDO SXEOLF RHULQJ OLVWLQJ RI WKH FRPSDQ RQ WKH 1HZ <RUN 6WRFN ([FKDQJH LQ 2012. )URP 1RYHPEHU 2006 WR 6HSWHPEHU 2011, 0U. 0LWFKHOO ZDV WKH 6HQLRU 9LFH 3UHVLGHQW, &KLHI )LQDQFLDO 2FHU RI 1REOH &RUSRUDWLRQ (NASDAQ:NEBLQ), D SXEOLFO-KHOG RVKRUH GULOOLQJ FRQWUDFWRU IRU WKH RLO DQG JDV LQGXVWU. )ROORZLQJ KLV IRUPDO education, Mr. Mitchell began his career in public accounting with Arthur Andersen & Co. ZKHUH KH SUDFWLFHG DV D &3$ (FXUUHQWO LQDFWLYH), WKHQ, LQ 1989 HQWHUHG WKH RLO DQG JDV LQGXVWU DW $SDFKH ZKHUH KH VSHQW HLJKWHHQ HDUV LQ YDULRXV QDQFH DQG FRPPHUFLDO UROHV WKH ODVW Energy, Inc. (OTC MKTS:SNDEQ), a public exploration and production company, and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from the resignation of a prior director. Mr. Mitchell was elected to the Board by the stockholders at the 2020 annual stockholders’ meeting. 7KH SDUWLFXODU H[SHULHQFH, TXDOLFDWLRQV, DWWULEXWHV, DQG VNLOOV WKDW OHG RXU %RDUG WR FRQFOXGH WKDW 0U. 0LWFKHOO VKRXOG VHUYH DV D GLUHFWRU LQFOXGH KLV VLJQLFDQW QDQFLDO EDFNJURXQG; KLV SXEOLF DFFRXQWLQJ H[SHULHQFH; DQG KLV SULRU SHUIRUPDQFH RI FKLHI QDQFLDO RFHU IXQFWLRQV IRU both public and private companies; and his board experience. Board Committees:

 

Kansas State Universit y. FRQFOXGH WKDW 0U. :RRGUXP, VKRXOG VHU YH DV D GLUHFWRU LQFOXGH KLV VLJQLFDQW QDQFLDO BOARD RECOMMENDATION ON PROPOSAL THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED ABOVE. THE MANAGEMENT PROXY HOLDER WILL VOTE ALL PROPERLY SUBMITTED PROXIES FOR ELECTION OF EACH DIRECTOR UNLESS PROPERLY INSTRUCTED OTHERWISE. 2021 Proxy Statement 23 Clayton E. Woodrum Independent Director Age: 81 Director Since: 2013 Clayton E. Woodrum, CPA, ABV, C VA, is a founding partner of Woodrum, Tate & $VVRFLDWHV, 3//& D &HU WLHG 3XEOLF $FFRXQWLQJ UP UHJLVWHUHG LQ WKH 6WDWH RI 2NODKRPD. Mr. Woodrum provides tax, accounting, and consulting to a wide range of privately held businesses. In addition to these ser vices, Mr. Woodrum also provides chief QDQFLDO RFHU VHU YLFHV WR D QXPEHU RI SULYDWHO KHOG EXVLQHVVHV. 0U. :RRGUXP DOVR SURYLGHV EXVLQHVV YDOXDWLRQ VHU YLFHV, OLWLJDWLRQ VXSSRU W (LQFOXGLQJ, QDQFLDO DQDOVLV, GDPDJH UHSRU WV, GHSRVLWLRQV, DQG WHVWLPRQ), HVWDWH SODQQLQJ, QDQFLQJ WHFKQLTXHV for businesses, asset protection vehicles, sales and liquidation of businesses, and debt UHVWUXFWXULQJ. +LV FXUUHQW FOLHQWV LQFOXGH VHYHUDO SULYDWHO KHOG RLO DQG JDV H[SORUDWLRQ and production companies to which he provides tax and accounting advice. In his 50 HDUV RI QDQFLDO H[SHULHQFH, 0U. :RRGUXP KDV VHU YHG DV WKH 3DU WQHU LQ &KDUJH RI a Tax Department of Peat, Mar wick, Mitchell and Co., (now KPMG). +H DOVR VHU YHG DV WKH &KLHI )LQDQFLDO 2FHU RI %DQN RI 2NODKRPD &RUS. (NASDAQ:BOKF) and Bank of Oklahoma, NA, a publicly held bank holding company and national bank. Prior to joining the board of Ring Energ y, Inc. Mr. Woodrum ser ved on the board of Arena Resources, Inc. and as Chairman of the audit committee of Arena. Mr. Woodrum received his Bachelor of Science in Business Administration and Accounting from 7KH SDU WLFXODU H[SHULHQFH, TXDOLFDWLRQV, DW WULEXWHV, DQG VNLOOV WKDW OHDG RXU %RDUG WR background; his public accounting and tax experience; and his prior performance as a director and CFO functions for both public and private companies. Board Committees:

 

CORPORATE GOVERNANCE AND OUR BOARD CORPORATE GOVERNANCE HIGHLIGHTS governance practices DQG H[HFXWLYH RFHU SRVLWLRQV We maintain a corporate governance section on our website that contains copies of the charters for the committees of our Board. The corporate governance section may be found at https://ringenergy.com/investors/governance. The charters for each of the Board’s committees shall be provided to any person without charge, upon request. Requests may be directed to 5LQJ (QHUJ, QF., $WWHQWLRQ: 7UDYLV 7. 7KRPDV, &KLHI )LQDQFLDO 2FHU, 1725 +XJKHV /DQGLQJ %OYG, 6XLWH 900, 7KH :RRGODQGV, 7; 77380, RU E FDOOLQJ (281) 397-3699. $OVR DYDLODEOH RQ RXU ZHEVLWH XQGHU WKH FRUSRUDWH JRYHUQDQFH VHFWLRQ DUH FRSLHV RI RXU &RUSRUDWH *RYHUQDQFH *XLGHOLQHV, &RGH RI (WKLFV DQG (QYLURQPHQWDO DQG 6RFLDO *RYHUQDQFH 3URJUDP, ZKLFK LQFOXGHV RXU &RGH RI %XVLQHVV &RQGXFW. :H KDYH DGRSWHG D &RGH RI (WKLFV WKDW DSSOLHV WR RXU &KLHI ([HFXWLYH 2FHU, ([HFXWLYH 9LFH 3UHVLGHQWV, DQG &KLHI )LQDQFLDO 2FHU, DV ZHOO DV WKH SULQFLSDO DFFRXQWLQJ RFHU RU FRQWUROOHU, RU SHUVRQV SHUIRUPLQJ VLPLODU IXQFWLRQV to ensure the highest standard of ethical conduct and fair dealing. We have also adopted an Environmental and Social *RYHUQDQFH 3URJUDP FRYHULQJ D ZLGH UDQJH RI EXVLQHVV SUDFWLFHV DQG SURFHGXUHV WKDW DSSOLHV WR DOO RI RXU RFHUV, directors, and employees to help promote workplace safety, health of our stakeholders, sound environmental practices, protection of human rights and honest and ethical conduct. The Code of Business Conduct covers standards for SURIHVVLRQDO FRQGXFW, LQFOXGLQJ, DPRQJ RWKHUV, FRQLFWV RI LQWHUHVW, LQVLGHU WUDGLQJ, SURWHFWLRQ, SURSHU XVH RI FRQGHQWLDO information and Company assets, and compliance with the laws and regulations applicable to the Company’s business. )LQDOO, ZH KDYH DGRSWHG &RUSRUDWH *RYHUQDQFH *XLGHOLQHV WR DVVLVW WKH %RDUG LQ WKH H[HUFLVH RI LWV UHVSRQVLELOLWLHV. The information on, or that can be accessed through our website, is not incorporated by reference into this proxy statement and should not be considered part of this proxy statement. 24 RELATING TO STOCKHOLDER RIGHTS (TXDO YRWLQJ ULJKWV DPRQJ DOO VWRFNKROGHUV $OO VWRFNKROGHUV HQWLWOHG WR YRWH RQ DOO GLUHFWRU QRPLQHHV $ELOLW RI VWRFNKROGHUV WR FDOO D VSHFLDO PHHWLQJ (DW D 10% WKUHVKROG) 1R SRLVRQ SLOO RU VLPLODU SODQ $ELOLW RI VWRFNKROGHUV WR DFW E ZULWWHQ FRQVHQW 1R VXSHUPDMRULW YRWLQJ UHTXLUHPHQWV RELATING TO THE BOARD $QQXDO HOHFWLRQV RI WKH HQWLUH %RDUG 'HGLFDWLRQ WR FRQWLQXLQJ GLUHFWRU HGXFDWLRQ 0DMRULW LQGHSHQGHQW GLUHFWRUV 'HGLFDWLRQ WR GLYHUVLW RQ WKH %RDUG $QQXDO HYDOXDWLRQV RI WKH %RDUG, HDFK FRPPLWWHH, and each director 'HVLJQDWHG /HDG QGHSHQGHQW 'LUHFWRU 6WULFW LQVLGHU WUDGLQJ SROLF WKDW SURKLELWV KHGJLQJ, pledging, and margin transactions in Company securities %RDUG FRPPLWWHHV FRPSULVHG HQWLUHO RI independent directors 0DLQWDLQV FRUSRUDWH JRYHUQDQFH JXLGHOLQHV %RDUG RYHUVHHV HQYLURQPHQWDO, VRFLDO, DQG &RPSDQ DGRSWHG $QQXDO 6D-2Q-3D YRWLQJ %RDUG RYHUVHHV VXFFHVVLRQ SODQQLQJ IRU WKH &(2 $GRSWHG GLUHFWRU RYHUERDUGLQJ SROLF $GRSWHG RFHU DQG GLUHFWRU VWRFN RZQHUVKLS JXLGHOLQHV

 

 

OUR BOARD Our Board currently consists of seven members. Our Charter and Bylaws provide for the annual election of directors. At each annual meeting of stockholders, our directors will be elected for a one-year term and serve until their respective VXFFHVVRUV KDYH EHHQ HOHFWHG DQG TXDOLHG. 2XU %RDUG KHOG QLQH PHHWLQJV GXULQJ WKH VFDO HDU HQGLQJ RQ 'HFHPEHU 31, 2020. 'XULQJ WKH VFDO HDU HQGLQJ RQ 'HFHPEHU 31, 2020, QR GLUHFWRUV DWWHQGHG IHZHU WKDQ 75% RI WKH WRWDO QXPEHU RI PHHWLQJV RI RXU %RDUG DQG FRPPLWWHHV on which that director served. We encourage, but do not require, our directors to attend our annual meetings of stockholders. At our last annual meeting of stockholders, all then serving members of our Board attended either in person or by video conference participation. BOARD LEADERSHIP STRUCTURE The Chairman of the Board is selected by the members of the Board. Our Board of Directors does not have a policy as to ZKHWKHU WKH UROHV RI &KDLUPDQ RI WKH %RDUG RI 'LUHFWRUV DQG &KLHI ([HFXWLYH 2FHU VKRXOG EH VHSDUDWH RU FRPELQHG. &XUUHQWO, WKH SRVLWLRQV RI &KDLUPDQ RI WKH %RDUG DQG &KLHI ([HFXWLYH 2FHU DUH FXUUHQWO KHOG E 3DXO '. 0F.LQQH. 7KH %RDUG KDV GHWHUPLQHG WKDW WKH FXUUHQW VWUXFWXUH LV HHFWLYH LQ DOORZLQJ 0U. 0F.LQQH WR GUDZ RQ KLV NQRZOHGJH RI WKH RSHUDWLRQV RI WKH business and industry developments to provide leadership on the broad strategic issues considered by the Board. At the same WLPH, WKH DSSRLQWPHQW RI D /HDG QGHSHQGHQW 'LUHFWRU ZLWK FOHDUO GHQHG UHVSRQVLELOLWLHV DQG DXWKRULW, DORQJ ZLWK WKH %RDUGV IXOO LQGHSHQGHQW FRPPLWWHHV DQG VXEVWDQWLDO PDMRULW RI LQGHSHQGHQW GLUHFWRUV, HVWDEOLVKHV DQ HHFWLYH EDODQFH EHWZHHQ PDQDJHPHQW OHDGHUVKLS DQG DSSURSULDWH RYHUVLJKW E LQGHSHQGHQW GLUHFWRUV. $QWKRQ %. 3HWUHOOL FXUUHQWO VHUYHV DV WKH /HDG QGHSHQGHQW 'LUHFWRU. 3HULRGLFDOO, RXU 1(6* &RPPLWWHH DVVHVVHV WKHVH UROHV DQG WKH ERDUG OHDGHUVKLS VWUXFWXUH WR HQVXUH WKH interests of Ring and its stockholders are best served. LEAD INDEPENDENT DIRECTOR Q 2021 ZH DPHQGHG RXU EODZV WR SURYLGH IRU WKH HOHFWLRQ RI D /HDG QGHSHQGHQW 'LUHFWRU. Duties of the Lead Independent Director 3UHVLGHV DW DOO PHHWLQJV RI WKH %RDUG DW ZKLFK WKH &KDLUPDQ LV QRW SUHVHQW DQG DOO H[HFXWLYH VHVVLRQV RI WKH independent directors; $FWV DV DGYLVRU WR &(2 DQG GLUHFW OLDLVRQ EHWZHHQ &(2 DQG LQGHSHQGHQW GLUHFWRUV; 3ODQV, UHYLHZV, DQG DSSURYHV %RDUG PHHWLQJ DJHQGDV DQG LQIRUPDWLRQ SUHVHQWHG WR WKH %RDUG; &DOOV PHHWLQJV RI WKH LQGHSHQGHQW GLUHFWRUV DV DSSURSULDWH; &RQWULEXWHV WR DQQXDO &(2 SHUIRUPDQFH UHYLHZ DQG DVVLVWV ZLWK VXFFHVVLRQ SODQQLQJ; &RQVXOWV WKH 1(6* &RPPLWWHH RQ WKH %RDUGV HYDOXDWLRQ SURFHVV; &RQVXOWV ZLWK WKH $XGLW &RPPLWWHH UHJDUGLQJ LQWHUQDO FRQWUROV DQG DXGLW PDWWHUV; &RQVXOWV ZLWK WKH &RPSHQVDWLRQ &RPPLWWHH UHJDUGLQJ &(2, H[HFXWLYH DQG HPSORHH FRPSHQVDWLRQ; 3DUWLFLSDWHV LQ FRQVXOWDWLRQV DQG GLUHFW FRPPXQLFDWLRQ ZLWK PDMRU VKDUHKROGHUV DQG WKHLU UHSUHVHQWDWLYHV when appropriate; and 3HUIRUPV VXFK RWKHU GXWLHV DV WKH %RDUG PD GHWHUPLQH IURP WLPH WR WLPH. Key Attributes of the Lead Independent Director 7KH /HDG QGHSHQGHQW 'LUHFWRU LV VHOHFWHG IURP DPRQJ WKH QRQ-HPSORHH GLUHFWRUV. 7KH 1(6* &RPPLWWHH DQG PDQDJHPHQW GLVFXVV FDQGLGDWHV IRU WKH /HDG QGHSHQGHQW 'LUHFWRU SRVLWLRQ, DQG FRQVLGHU PDQ RI WKH VDPH WSHV RI criteria as candidates for the chair of other Board committees including: 7HQXUH; 3UHYLRXV VHUYLFH DV D %RDUG FRPPLWWHH FKDLU; 'LYHUVH H[SHULHQFH; 3DUWLFLSDWLRQ LQ DQG FRQWULEXWLRQV WR DFWLYLWLHV RI WKH %RDUG; DQG $ELOLW DQG ZLOOLQJQHVV WR FRPPLW DGHTXDWH WLPH WR WKH UROH. 2021 Proxy Statement 25

 

CORPORATE GOVERNANCE AND OUR BOARD (CONT.) ANNUAL BOARD EVALUATION 7KH 1(6* &RPPLWWHH LV UHVSRQVLEOH IRU WKH %RDUG HYDOXDWLRQ SURFHVV. Q HDFK VFDO HDU, WKH 1(6* &RPPLWWHH UHTXHVWV WKDW the chairman of each committee report to the full Board about such committee’s annual evaluation of its performance and HYDOXDWLRQ RI LWV FKDUWHU. Q DGGLWLRQ, WKH 1(6* &RPPLWWHH UHFHLYHV FRPPHQWV IURP DOO GLUHFWRUV DQG UHSRUWV WR WKH IXOO %RDUG ZLWK DQ DVVHVVPHQW RI WKH %RDUGV DQG PDQDJHPHQWV SHUIRUPDQFH HDFK VFDO HDU. Q FRQGXFWLQJ LWV DQQXDO HYDOXDWLRQ, RXU %RDUG XWLOL]HV DQRQPRXV ZULWWHQ TXHVWLRQQDLUHV WR VROLFLW IHHGEDFN RQ FRPPLWWHH DQG ERDUG HHFWLYHQHVV, DJHQGD WRSLFV DQG materials, appropriate delegation of issues to committees, and the appropriateness of board and committee materials. The 1(6* &RPPLWWHHV UHYLHZ SURFHVV DOVR LQFOXGHV DQ DQQXDO GLUHFWRU VHOI-HYDOXDWLRQ WKDW SURPSWV HDFK GLUHFWRU WR UHHFW DQG comment on his or her own individual performance and contributions to the Board and the Company. DIRECTOR ORIENTATION AND CONTINUING EDUCATION Our Board takes measures as it deems appropriate to ensure that its members may act on a fully informed basis. The 1(6* &RPPLWWHH HYDOXDWHV JHQHUDO HGXFDWLRQ DQG RULHQWDWLRQ SURJUDPV IRU RXU GLUHFWRUV. 1HZO DSSRLQWHG GLUHFWRUV DUH required to become knowledgeable (if not already) about the responsibilities of directors for publicly traded companies. In addition, we provide our directors with information regarding changes in our business and industry as well as the UHVSRQVLELOLWLHV RI WKH GLUHFWRUV LQ IXOOOLQJ WKHLU GXWLHV. BOARD INDEPENDENCE As required under the listing standards of the NYSE American, a majority of the members of our Board must qualify as LQGHSHQGHQW, DV DUPDWLYHO GHWHUPLQHG E RXU %RDUG. 7KH VWDQGDUGV UHOLHG XSRQ E WKH %RDUG LQ GHWHUPLQLQJ ZKHWKHU D GLUHFWRU LV LQGHSHQGHQW DUH WKRVH VHW IRUWK LQ WKH UXOHV RI WKH 1<6( $PHULFDQ. 7KH 1<6( $PHULFDQ JHQHUDOO GHQHV WKH WHUP LQGHSHQGHQW GLUHFWRU DV D SHUVRQ RWKHU WKDQ DQ H[HFXWLYH RFHU RU HPSORHH RI D FRPSDQ, ZKR GRHV QRW KDYH D UHODWLRQVKLS with the company that would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Because the Board believes it is not possible to anticipate or provide for all circumstances that might give rise WR FRQLFWV RI LQWHUHVW RU WKDW PLJKW EHDU RQ WKH PDWHULDOLW RI D UHODWLRQVKLS EHWZHHQ D GLUHFWRU DQG WKH &RPSDQ, WKH %RDUG KDV QRW HVWDEOLVKHG VSHFLF REMHFWLYH FULWHULD, DSDUW IURP WKH FULWHULD VHW IRUWK LQ WKH 1<6( $PHULFDQ UXOHV, WR GHWHUPLQH “independence.” In addition to the NYSE American criteria, in making the determination of “independence”, the Board considers such other matters including, without limitation, (i) the business and non-business relationships that each independent director KDV RU PD KDYH KDG ZLWK WKH &RPSDQ DQG LWV RWKHU GLUHFWRUV DQG H[HFXWLYH RFHUV, (LL) WKH VWRFN RZQHUVKLS LQ WKH &RPSDQ KHOG E HDFK VXFK GLUHFWRU, (LLL) WKH H[LVWHQFH RI DQ IDPLOLDO UHODWLRQVKLSV ZLWK DQ H[HFXWLYH RFHU RU GLUHFWRU RI WKH &RPSDQ, DQG (LY) DQ RWKHU UHOHYDQW IDFWRUV ZKLFK FRXOG FDXVH DQ VXFK 'LUHFWRU WR QRW H[HUFLVH KLV LQGHSHQGHQW MXGJPHQW. 2XU 1(6* Committee evaluated all relevant transactions and relationships between each director then on the Board, and any of his or her IDPLO PHPEHUV, DQG WKH &RPSDQ, VHQLRU PDQDJHPHQW, DQG LQGHSHQGHQW UHJLVWHUHG DFFRXQWLQJ UP. %DVHG RQ WKLV HYDOXDWLRQ DQG WKH UHFRPPHQGDWLRQ RI RXU 1(6* &RPPLWWHH, RXU %RDUG GHWHUPLQHG WKDW &ODWRQ (. :RRGUXP, $QWKRQ %. 3HWUHOOL, 6WDQOH 0. 0F&DEH, 5HJLQD 5RHVHQHU, 5LFKDUG $. +DUULV, -RKQ $. &UXP DQG 7KRPDV /. 0LWFKHOO ZHUH LQGHSHQGHQW GLUHFWRUV, DV WKDW WHUP LV GHQHG LQ WKH OLVWLQJ VWDQGDUGV RI WKH 1<6( $PHULFDQ DQG WKDW 3DXO '. 0F.LQQH LV QRW LQGHSHQGHQW. Family Relationships and Involvement in Legal Proceedings All directors and nominees for director of the Company are United States citizens. There are no family relationships EHWZHHQ DQ RI RXU GLUHFWRUV RU QRPLQHHV IRU GLUHFWRU DQG H[HFXWLYH RFHUV. Q DGGLWLRQ, WKHUH DUH QR RWKHU arrangements or understandings between any of our directors or nominees for director and any other person pursuant to which any person was selected as a director or nominee for director. During the past ten years, there have been no events under any bankruptcy act, no criminal proceedings, and no judgments, injunctions, orders, or decrees material to the evaluation of the ability and integrity of any of our directors or nominees for 26

 

director, and none of our directors or nominees for director have been involved in any judicial or administrative proceedings resulting from involvement in mail or wire fraud or fraud in connection with any business entity, any judicial or administrative proceedings based on violations of federal or state securities, commodities, banking, or insurance laws or regulations, and any disciplinary sanctions or orders imposed by a stock, commodities, or derivatives exchange or other self-regulatory organization, and none of our directors or nominees for director have been involved in any material proceedings in which they are adverse to the Company or have a material interest that is adverse to the Company. BOARD RISK ASSESSMENT AND CONTROL The Board considers risk oversight and management to be an integral part of its role. Our risk management program is overseen by our Board and its committees, with support from our management. Our Board utilizes an enterprise-wide approach to oil and gas industry risk management, designed to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and enhance stockholder value. A fundamental part of risk management is a thorough understanding of the risks the Company faces, understanding of the level RI ULVN DSSURSULDWH IRU RXU &RPSDQ, DQG WKH VWHSV QHHGHG WR PDQDJH WKRVH ULVNV HHFWLYHO. 7KH LQYROYHPHQW RI DOO PHPEHUV of the Board in setting our business strategy is a key part of their overall responsibilities and, together with management, determines what constitutes an appropriate level of risk for our Company. Our Board believes that its practice of including DOO PHPEHUV RI RXU PDQDJHPHQW WHDP LQ RXU ULVN DVVHVVPHQWV DOORZV WKH %RDUG WR PRUH GLUHFWO DQG HHFWLYHO HYDOXDWH PDQDJHPHQW FDSDELOLWLHV DQG SHUIRUPDQFH, PRUH HHFWLYHO DQG HFLHQWO FRPPXQLFDWH LWV FRQFHUQV DQG ZLVKHV WR WKH HQWLUH management team and provides all members of management with a direct communication avenue to the Board. While our Board has the ultimate oversight responsibility for the risk management process, the committees of our %RDUG DOVR KDYH UHVSRQVLELOLW IRU VSHFLF ULVN PDQDJHPHQW DFWLYLWLHV. Q SDUWLFXODU, WKH $XGLW &RPPLWWHH IRFXVHV RQ QDQFLDO ULVN PDQDJHPHQW, LQFOXGLQJ LQWHUQDO FRQWUROV, DQG RYHUVHHV FRPSOLDQFH ZLWK UHJXODWRU UHTXLUHPHQWV. Q VHWWLQJ FRPSHQVDWLRQ, WKH &RPSHQVDWLRQ &RPPLWWHH DSSURYHV FRPSHQVDWLRQ SURJUDPV IRU WKH RFHUV DQG RWKHU NH HPSORHHV to encourage an appropriate level of risk-taking behavior consistent with our business strategy and performance. INSIDER TR ADING POLICY Our Board has adopted a comprehensive Insider Trading Policy for employees and directors to promote compliance with federal and state securities laws. The policy prohibits certain persons who are aware of material non-public information about the Company from: (i) trading in securities of the Company; or (ii) providing material non-public information to other persons who PD WUDGH RQ WKH EDVLV RI WKDW LQIRUPDWLRQ. :KHQ PDWHULDO QRQ-SXEOLF LQIRUPDWLRQ DERXW XV PD H[LVW DQG PD KDYH DQ LQXHQFH RQ WKH PDUNHWSODFH, D WUDGLQJ EODFNRXW SHULRG LV SODFHG LQ HHFW E PDQDJHPHQW. Q DGGLWLRQ, RXU QVLGHU 7UDGLQJ 3ROLF DOVR applies to family members, other members of a person’s household, and entities controlled by a person covered by this Insider 7UDGLQJ 3ROLF. 2FHUV, GLUHFWRUV, DQG GHVLJQDWHG HPSORHHV, DV ZHOO DV WKH IDPLO PHPEHUV DQG FRQWUROOHG HQWLWLHV RI VXFK SHUVRQV, PD QRW HQJDJH LQ DQ WUDQVDFWLRQ LQ &RPSDQ VHFXULWLHV ZLWKRXW UVW REWDLQLQJ SUH-FOHDUDQFH RI WKH WUDQVDFWLRQ. 8QGHU WKH QVLGHU 7UDGLQJ 3ROLF, GLUHFWRUV, H[HFXWLYH RFHUV DQG RWKHU HPSORHHV DUH SURKLELWHG IURP HQWHULQJ LQWR any hedging or monetization transactions relating to our securities or otherwise trading in any instrument relating to WKH IXWXUH VHFXULWLHV SULFH. 2XU QVLGHU 7UDGLQJ 3ROLF DOVR SUHYHQWV GLUHFWRUV DQG H[HFXWLYH RFHUV IURP SOHGJLQJ RXU securities as collateral for loans or holding our securities in a margin account. BOARD COMMITTEES 2XU %RDUG KDV HVWDEOLVKHG WKUHH VWDQGLQJ FRPPLWWHHV, WKH FRPSRVLWLRQ DQG UHVSRQVLELOLWLHV RI ZKLFK DUH EULH described below. Our Board may establish other committees from time to time to facilitate our management. Audit Committee Compensation Committee Nominating, Environmental, Social, and Governance Committee Our Board has determined that the Compensation Committee, Audit Committee, and Nominating, Environmental, Social, DQG *RYHUQDQFH &RPPLWWHH DUH FRPSULVHG HQWLUHO RI LQGHSHQGHQW GLUHFWRUV DV UHTXLUHG XQGHU WKH OLVWLQJ VWDQGDUGV of the NYSE American and applicable rules and requirements of the SEC. The Board may delegate certain duties and responsibilities to the committees it establishes. 2021 Proxy Statement 27

 

CORPORATE GOVERNANCE AND OUR BOARD (CONT.) SOCIAL, AND GOVERNANCE COMMITTEE COMMITTEE Paul D. McKinney Anthony B. Petrelli John A. Crum 5LFKDUG (. +DUULV 7KRPDV /. 0LWFKHOO Regina Roesener Clayton E. Woodrum Chair Member Audit Committee Pursuant to its charter, the Audit Committee’s principal functions are as follows: 2YHUVHH WKH TXDOLW, LQWHJULW DQG UHOLDELOLW RI RXU QDQFLDO VWDWHPHQWV DQG RWKHU QDQFLDO LQIRUPDWLRQ ZH SURYLGH WR any governmental body or the public; 6HOHFW, KLULQJ, DQG RYHUVHHLQJ RXU LQGHSHQGHQW UHJLVWHUHG SXEOLF DFFRXQWLQJ UP DQG WR DSSURYH WKH FRPSHQVDWLRQ SDLG WR RXU LQGHSHQGHQW UHJLVWHUHG SXEOLF DFFRXQWLQJ UP; 2YHUVHH RXU LQGHSHQGHQW DXGLWRUV TXDOLFDWLRQV DQG LQGHSHQGHQFH, DQG WKH SHUIRUPDQFH; 2YHUVHH DQG RXU FRPSOLDQFH ZLWK OHJDO DQG UHJXODWRU UHTXLUHPHQWV; 2YHUVHH RXU LQWHUQDO DXGLW IXQFWLRQ, LQFOXGLQJ RYHUVLJKW RI RXU LQWHUQDO FRQWUROV UHJDUGLQJ QDQFH, DFFRXQWLQJ, OHJDO compliance and ethics; (VWDEOLVK SURFHGXUHV IRU (L) WKH UHFHLSW, UHWHQWLRQ, DQG WUHDWPHQW RI FRPSODLQWV UHFHLYHG E WKH &RPSDQ UHJDUGLQJ DFFRXQWLQJ, LQWHUQDO DFFRXQWLQJ FRQWUROV, RU DXGLWLQJ PDWWHUV; DQG (LL) WKH FRQGHQWLDO, DQRQPRXV VXEPLVVLRQ E Company employees of concerns regarding questionable accounting or auditing matters; $VVHVV PDWWHUV UHODWHG WR ULVN, ULVN FRQWUROV DQG FRPSOLDQFH; 3URGXFH WKH $XGLW &RPPLWWHH 5HSRUW IRU LQFOXVLRQ LQ RXU DQQXDO SUR[ VWDWHPHQW; DQG 3HUIRUP VXFK RWKHU IXQFWLRQV RXU %RDUG PD DVVLJQ WR WKH $XGLW &RPPLWWHH IURP WLPH WR WLPH. 'XULQJ WKH 2020 VFDO HDU, IURP -DQXDU WKURXJK 6HSWHPEHU, WKH $XGLW &RPPLWWHH ZDV FRPSULVHG RI 0U. :RRGUXP, 0U. Petrelli and Ms. Roesener, with Mr. Woodrum acting as the chairman. In October 2020, the Board appointed Mr. Mitchell to the Audit Committee. Each of Messrs. Woodrum, Petrelli and Mitchell, and Ms. Roesener qualify as “independent directors” in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ommittee was given the opportunity to meet in executive session separately with Mr. Broaddrick, our Chief Financial 2FHU, DQG RXU LQGHSHQGHQW UHJLVWHUHG SXEOLF DFFRXQWLQJ UP. 28 NAME AUDIT COMPENSATION NOMINATING, ENVIRONMENTAL, COMMITTEE

 

Compensation Committee Pursuant to its charter, the Compensation Committee’s principal functions are as follows: 0DNH UHFRPPHQGDWLRQV UHJDUGLQJ WKH FRPSHQVDWLRQ RI WKH &KLHI ([HFXWLYH 2FHU; $SSURYH, DIWHU FRQVLGHULQJ WKH UHFRPPHQGDWLRQ RI WKH &(2, WKH FRPSHQVDWLRQ RI WKH QDPHG H[HFXWLYH RFHUV; 5HYLHZ RXU FRPSHQVDWLRQ SUDFWLFHV DQG SROLFLHV WR HQVXUH WKDW WKH SURYLGH DSSURSULDWH PRWLYDWLRQ IRU FRUSRUDWH performance and increased stockholder value; 2YHUVHH WKH DGPLQLVWUDWLRQ RI WKH &RPSDQV VWRFN DQG LQFHQWLYH FRPSHQVDWLRQ SURJUDPV; 0DNH UHFRPPHQGDWLRQV WR WKH %RDUG UHJDUGLQJ WKH DGRSWLRQ, DPHQGPHQW, RU WHUPLQDWLRQ RI HTXLW FRPSHQVDWLRQ programs; $SSURYH WKH DGRSWLRQ, DPHQGPHQW, DQG WHUPLQDWLRQ RI LQFHQWLYH FRPSHQVDWLRQ DQG GHIHUUHG FRPSHQVDWLRQ SURJUDPV for our employees; 2YHUVHH WKH DGPLQLVWUDWLRQ RI RXU FRPSHQVDWLRQ SODQV DQG SURJUDPV IRU HPSORHHV DQG QRQ-HPSORHHV DQG GLUHFWRUV; 3HULRGLFDOO UHYLHZ KXPDQ UHVRXUFH LVVXHV UHODWLQJ WR WKH &RPSDQV SROLFLHV DQG SUDFWLFHV ZLWK UHVSHFW WR ZRUNIRUFH diversity and equal employment opportunities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ompensation Committee. 7KH &RPSHQVDWLRQ &RPPLWWHH LV GHOHJDWHG DOO DXWKRULW RI WKH %RDUG DV PD EH UHTXLUHG RU DGYLVDEOH WR IXOOO WKH purposes of the Compensation Committee. The Compensation Committee may form and delegate some or all of its authority to subcommittees when it deems appropriate. Meetings may, at the discretion of the Compensation Committee, include members of the Company’s management, other members of the Board, consultants or advisors, and such other persons as the Compensation Committee or its chairperson may determine. The Compensation Committee has the sole authority to retain, amend the engagement with, and terminate any FRPSHQVDWLRQ FRQVXOWDQW WR EH XVHG WR DVVLVW LQ WKH HYDOXDWLRQ RI GLUHFWRU, &KLHI ([HFXWLYH 2FHU, RU H[HFXWLYH RFHU compensation, including employment contracts and change in control provisions. The Compensation Committee has the sole authority to approve any consultant’s fees and other retention terms and has authority to cause the Company to pay the fees and expenses of such consultants. The Compensation Committee did not retain or utilize any compensation FRQVXOWDQWV IRU WKH VFDO HDU HQGLQJ 'HFHPEHU 31, 2020. 7KH &RPSHQVDWLRQ &RPPLWWHH KDV UHWDLQHG D FRPSHQVDWLRQ FRQVXOWDQW IRU WKH VFDO HDU HQGLQJ 'HFHPEHU 31, 2021. 'XULQJ WKH 2020 VFDO HDU, IURP -DQXDU WKURXJK 6HSWHPEHU, WKH &RPSHQVDWLRQ &RPPLWWHH ZDV FRPSULVHG RI 0HVVUV. McCabe and Woodrum, with Mr. McCabe acting as the chairman. In October 2020, the Board appointed Mr. Mitchell and Mr. Crum to the Compensation Committee, replacing Mr. McCabe, and appointed Mr. Crum as the chairman. Each PHPEHU RI WKH &RPSHQVDWLRQ &RPPLWWHH GXULQJ WKH VFDO HDU HQGLQJ 'HFHPEHU 31, 2020 ZDV DQ LQGHSHQGHQW GLUHFWRU DV GHQHG LQ WKH DSSOLFDEOH UXOHV RI WKH 1<6( $PHULFDQ DQG WKH 6(&. 7KH &RPSHQVDWLRQ &RPPLWWHH KHOG WZR PHHWLQJV GXULQJ WKH VFDO HDU HQGLQJ 'HFHPEHU 31, 2020. 2021 Proxy Statement 29

 

 

CORPORATE GOVERNANCE AND OUR BOARD (CONT.) Nominating, Environmental, Social and Governance Committee1 7KH 1RPLQDWLQJ, (QYLURQPHQWDO, 6RFLDO, DQG *RYHUQDQFH &RPPLWWHHV SULQFLSDO IXQFWLRQV DUH DV IROORZV: GHQWLI DQG UHFRPPHQG TXDOL HG FDQGLGDWHV WR WKH %RDUG IRU QRPLQDWLRQ DV PHPEHUV RI WKH %RDUG DQG LWV FRPPLWWHHV; Q WKH HYHQW WKHUH LV D YDFDQF RQ WKH %RDUG, LGHQWLI LQGLYLGXDOV WKDW WKH FRPPLWWHH EHOLHYHV DUH TXDOL HG WR EHFRPH directors in accordance with the Board membership criteria set forth in the committee’s charter; (YDOXDWH VWRFNKROGHU QRPLQHHV IRU GLUHFWRU VXEPLWWHG LQ DFFRUGDQFH ZLWK WKH &RPSDQV EODZV; 3HULRGLFDOO UHYLHZ ZLWK WKH %RDUG WKH DSSURSULDWH VL]H RI WKH %RDUG DQG WKH UHTXLVLWH VNLOOV DQG FKDUDFWHULVWLFV RI its members; 5HYLHZ WKH %RDUGV FRPPLWWHH VWUXFWXUH DQG UHFRPPHQG WR WKH %RDUG WKH DSSRLQWPHQW RI FRPPLWWHH PHPEHUV DQG FKDLUV; 'HYHORS DQG UHFRPPHQG WR WKH %RDUG FRUSRUDWH JRYHUQDQFH SULQFLSOHV DQG SROLFLHV DSSOLFDEOH WR WKH &RPSDQ; 'HYHORS DQG UHFRPPHQG WR WKH %RDUG VWDQGDUGV WR EH DSSOLHG LQ PDNLQJ GHWHUPLQDWLRQV RQ WKH WSHV RI UHODWLRQVKLSV that constitute material relationships between the Company and a director for purposes of determining director independence; 5HYLHZ DQG UHFRPPHQG WR WKH %RDUG SURSRVHG FKDQJHV WR WKH &RPSDQV FKDUWHU DQG EODZV; 2YHUVHHLQJ (6* SROLFLHV, SHUIRUPDQFH DQG GLVFORVXUH, DV ZHOO DV GHYHORSLQJ UHFRPPHQGDWLRQV IRU WKH %RDUG RQ emerging issues related to our industry; and 3HUIRUP VXFK RWKHU IXQFWLRQV DV WKH %RDUG PD DVVLJQ WR WKH 1(6* &RPPLWWHH IURP WLPH WR WLPH. 'XULQJ WKH 2020 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

 

DIRECTOR NOMINATIONS AND QUALIFICATIONS 8QGHU LWV FKDUWHU, WKH 1(6* &RPPLWWHH LGHQWLHV TXDOLHG FDQGLGDWHV WR VHUYH DV %RDUG PHPEHUV DV QHFHVVDU WR OO YDFDQFLHV RU WKH DGGLWLRQDO QHHGV RI WKH %RDUG, DQG UHYLHZV DQG HYDOXDWHV FDQGLGDWHV UHFRPPHQGHG E RXU VWRFNKROGHUV. 7KH 1(6* &RPPLWWHH FRQVLGHUV TXDOLHG FDQGLGDWHV IURP VHYHUDO VRXUFHV, LQFOXGLQJ VWRFNKROGHU QRPLQDWLRQV. 7KH 1(6* &RPPLWWHH PD, EXW KDV QRW, UHWDLQHG DQ RXWVLGH FRQVXOWDQW WR HYDOXDWH RU DVVLVW LQ LGHQWLILQJ RU evaluating potential director candidates. Any stockholders who would like to propose a nominee to the Board should submit such proposed nominee for FRQVLGHUDWLRQ E WKH 1(6* &RPPLWWHH, LQFOXGLQJ WKH SURSRVHG QRPLQHHV TXDOLFDWLRQV, WR 5LQJ (QHUJ, QF., $WWHQWLRQ: 0U. 7UDYLV 7. 7KRPDV, &KLHI )LQDQFLDO 2FHU, 1725 +XJKHV /DQGLQJ %OYG., 6XLWH 900, 7KH :RRGODQGV, 7; 77380. 6WRFNKROGHUV ZKR PHHW FHUWDLQ UHTXLUHPHQWV VSHFLHG LQ RXU EODZV PD DOVR QRPLQDWH FDQGLGDWHV IRU LQFOXVLRQ LQ RXU proxy materials for an annual meeting as described in “Stockholder Proposals and Director Nominations for the 2022 $QQXDO 0HHWLQJ. 7KHUH DUH QR GLHUHQFHV LQ WKH PDQQHU LQ ZKLFK WKH 1(6* &RPPLWWHH HYDOXDWHV QRPLQHHV IRU GLUHFWRU based on whether the nominee is recommended by a stockholder or the incumbent directors. :KHWKHU QRPLQDWHG E D VWRFNKROGHU RU WKURXJK WKH DFWLYLWLHV RI WKH 1(6* &RPPLWWHH, WKH 1(6* &RPPLWWHH VHHNV WR select candidates who have distinguished records of leadership and success in their area of activity and who will make VXEVWDQWLDO FRQWULEXWLRQV WR RXU %RDUG RSHUDWLRQV DQG HHFWLYHO UHSUHVHQW WKH LQWHUHVWV RI RXU VWRFNKROGHUV. 7KH 1(6* &RPPLWWHHV DVVHVVPHQW RI FDQGLGDWHV LQFOXGHV, EXW LV QRW OLPLWHG WR, FRQVLGHUDWLRQ RI: (L) UROHV DQG contributions valuable to the business community; (ii) personal qualities of leadership, character, judgment, and whether the candidate possesses and maintains a reputation in the community at large of integrity, trust, respect, competence, and adherence to the highest ethical standards; (iii) relevant knowledge and diversity of background and experience LQ VXFK WKLQJV DV WKH &RPSDQV LQGXVWU, DQG LQ JHQHUDO, EXVLQHVV, WHFKQRORJ, QDQFH DQG DFFRXQWLQJ, PDUNHWLQJ, LQWHUQDWLRQDO EXVLQHVV, JRYHUQPHQW, DQG WKH OLNH; RU (LY) ZKHWKHU WKH FDQGLGDWH LV IUHH RI FRQLFWV DQG KDV WKH WLPH UHTXLUHG IRU SUHSDUDWLRQ, SDUWLFLSDWLRQ, DQG DWWHQGDQFH DW DOO PHHWLQJV. $ GLUHFWRUV TXDOLFDWLRQV LQ OLJKW RI WKHVH FULWHULD are considered at least each time the director is re-nominated for Board membership. The Committee also evaluates whether the candidate’s skills are complementary to the existing Board members’ skills, the Board’s needs for particular H[SHUWLVH LQ HOGV VXFK DV EXVLQHVV, WHFKQRORJ, QDQFLDO, PDUNHWLQJ, JRYHUQPHQWDO, RU RWKHU DUHDV RI H[SHUWLVH, DQG DVVHVV WKH FDQGLGDWHV LPSDFW RQ %RDUG GQDPLFV DQG HHFWLYHQHVV. 7KH &RPPLWWHH VHOHFWV FDQGLGDWHV WKDW EHVW VXLW the Board’s current needs and recommends one or more of such individuals to the Board. Our membership criteria and D ULJRURXV VHOHFWLRQ SURFHVV KHOS HQVXUH WKDW FDQGLGDWHV UHFRPPHQGHG WR WKH %RDUG ZLOO HHFWLYHO UHSUHVHQW WKH EHVW interests of our stockholders. BOARD OF DIRECTORS DIVERSITY The Board encourages a diversity of backgrounds among its members; however, it does not have a formal diversity policy with regard to the consideration of diversity in identifying director nominees. The Board considers candidates with VLJQLFDQW GLUHFW RU LQGLUHFW HQHUJ LQGXVWU H[SHULHQFH WKDW ZLOO SURYLGH WKH %RDUG DV D ZKROH ZLWK WKH WDOHQWV, VNLOOV, diversity, and expertise to serve the long-term interests of the Company and our stockholders. COMMUNICATIONS WITH OUR BOARD Stockholders desiring to communicate with our Board, the independent directors, or any director in particular, may GR VR E PDLO DGGUHVVHG DV IROORZV: $WWQ: %RDUG RI 'LUHFWRUV, 5LQJ (QHUJ, QF., 1725 +XJKHV /DQGLQJ %OYG., 6XLWH 900, 7KH :RRGODQGV, 7; 77380. 2XU &KLHI ([HFXWLYH 2FHU, &KLHI )LQDQFLDO 2FHU, RU &RUSRUDWH 6HFUHWDU UHYLHZ HDFK communication received from our stockholders and other interested parties and will forward the communication, as expeditiously as reasonably practicable, to the Board (or individual director) if the communication complies with the requirements of any applicable policy adopted by us relating to the subject matter or the communication falls within the scope of matters generally considered by our Board. 2021 Proxy Statement 31

 

EXECUTIVE OFFICERS 7KH IROORZLQJ WDEOH VHWV IRUWK WKH QDPHV, DJHV, DQG SRVLWLRQV RI RXU FXUUHQW H[HFXWLYH RFHUV DV RI $SULO 22, 2021: The Universit y of Texas at Austin. 32 Stephen D. Brooks Executive Vice President of /DQG, /HJDO, +XPDQ 5HVRXUFHV and Marketing Age: 65 Stephen D. Brooks joined Ring on October 1, 2020 and most recently held the position RI 9LFH 3UHVLGHQW RI /DQG, /HJDO, 3HRSOH & &XOWXUH DQG &RUSRUDWH 6HU YLFHV ZLWK 6DQG5LGJH Energy, Inc. Mr. Brooks served in these various capacities from May 2019 to April 2020. 3ULRU WR HPSORPHQW DW 6DQG5LGJH, 0U. %URRNV VHU YHG DV 9LFH 3UHVLGHQW RI /DQG IRU ERWK <XPD (QHUJ, QF. IURP )HEUXDU 2016 WR 0D 2019, DQG IRU WKH *XOI &RDVW 5HJLRQ RI 'XQFDQ Energy Company from 2000 to 2015, where at both of these companies he was responsible for all land department functions. Prior to becoming the Vice President, Mr. Brooks was the /DQG 0DQDJHU IRU WKH *XOI &RDVW 5HJLRQ RI 'XQFDQ IURP 1991 WR 2000. %HIRUH VSHQGLQJ 24 HDUV ZLWK 'XQFDQ, 0U. %URRNV ZDV WKH /DQG 0DQDJHU *XOI &RDVW 5HJLRQ IRU /DGG 3HWUROHXP &RUSRUDWLRQ IURP 1984 WR 1990, ZKHQ KH EHFDPH /DGGV ([SORUDWLRQ 0DQDJHU XQWLO 1991. Mr. Brooks also held landman positions at Patrick Petroleum Corporation, Santa Fe Energy &RPSDQ DQG VWDUWHG KLV FDUHHU LQ 1977 ZLWK 6KHOO 2LO &RPSDQ. 0U. %URRNV LV D &HU WLHG 3URIHVVLRQDO /DQGPDQ DQG D PHPEHU RI WKH $PHULFDQ $VVRFLDWLRQ RI 3URIHVVLRQDO /DQGPHQ. 0U. %URRNV KROGV D %%$ LQ 3HWUROHXP /DQG 0DQDJHPHQW IURP Marinos Baghdati Executive Vice President of Operations Age: 44 Marinos Baghdati joined Ring on October 1, 2020 and has spent his career focused RQ DOO DVSHFWV RI 2LO & *DV 2SHUDWLRQV, IURP VWDU WLQJ ZLWK D SURSRVHG ORFDWLRQ WR drill and following through to product being sold. Most recently Mr. Baghdati ser ved as Vice President – Operations at Sandridge Energ y. Prior to Sandridge Energ y, he ser ved in various roles as a drilling, completions, production and facilit y engineer for ERWK SULYDWH HTXLW UPV DQG SXEOLFO WUDGHG FRPSDQLHV. 0U. %DJKGDWL KDV H[WHQVLYH experience primarily in the Permian Basin of West Texas, but it extends to South Texas, /RXLVLDQD, 0LVVLVVLSSL, &RORUDGR DQG 2NODKRPD. +LV H[SHULHQFH DOVR LQFOXGHV GHHS-ZDWHU, LQWHUQDWLRQDO GULOOLQJ DQG FRPSOHWLRQV R WKH FRDVWV RI VUDHO DQG &SUXV LQ WKH Mediterranean Sea for Noble Energ y. Mr. Baghdati received a Bachelor of Science degree in Petroleum Engineering and a Master of Science degree in Mathematics & Statistics from Texas Tech Universit y. Paul D. McKinney Please see “Proposal 1 - Election of directors” above for the biography of Mr. McKinney.

 

Universit y of Texas at Austin with a minor in Business Foundations from McCombs School 2021 Proxy Statement 33 Travis T. Thomas Executive Vice President, Chief )LQDQFLDO 2FHU, &RUSRUDWH Secretar y & Treasurer Age: 43 Travis T. Thomas MRLQHG 5LQJ RQ 2FWREHU 26, 2020 DQG PRVW UHFHQWO KHOG WKH SRVLWLRQ RI ([HFXWLYH 9LFH 3UHVLGHQW, 7UHDVXUHU DQG &KLHI $FFRXQWLQJ 2FHU RI 3DUDGR[ 5HVRXUFHV, //&, D SULYDWH H[SORUDWLRQ, GHYHORSPHQW DQG SURGXFWLRQ FRPSDQ IRFXVHG RQ WKH 3DUDGR[ Basin of Utah and Colorado with complementar y midstream assets. Prior to Paradox, Mr. Thomas ser ved as Vice President of Finance/Controller with Yuma Energ y, Inc. from )HEUXDU 2016 WKURXJK )HEUXDU 2019. )URP 0DUFK 2012 WKURXJK -DQXDU 2016, KH KHOG D YDULHW RI QDQFLDO PDQDJHPHQW UROHV DW 1HZ 3URVSHFW &RPSDQ, DQ RLO DQG JDV FRQVXOWLQJ UP VSHFLDOL]LQJ LQ ZHOOVLWH VXSHU YLVLRQ, HQJLQHHULQJ, HQHUJ VHU YLFHV DQG FRQVWUXFWLRQ, and was named Vice President of Finance in June 2015. Prior to New Prospect, Mr. Thomas KHOG VLPLODU QDQFLDO UROHV DW +LJKODQG 2LO DQG *DV DQG (TXLW $VVRFLDWHV, QF. 0U. 7KRPDV KROGV D %DFKHORU RI %XVLQHVV $GPLQLVWUDWLRQ GHJUHH ZLWK D PDMRU LQ QDQFH from the Red McCombs School of Business at the Universit y of Texas in Austin. Alexander Dyes Executive Vice President of Engineering and Corporate Strategy Age: 36 Alexander Dyes joined Ring on October 1, 2020 and has a well-rounded background in both conventional and unconventional plays with over 14 years of multi-disciplined H[SHULHQFH LQ RLOHOG RSHUDWLRQV, UHVHU YRLU HQJLQHHULQJ, HFRQRPLF HYDOXDWLRQ, FDSLWDO allocation, risk assessment, strategic planning, and business development. Most recently Mr. Dyes ser ved as Vice President – A&D at Sandridge Energ y. Prior to Sandridge, he worked at Yuma Energ y from late 2014 to early 2019 where he ser ved as Vice President of $&'/(QJLQHHULQJ IURP 2016 -2019. +H EHJDQ KLV FDUHHU DW $SDFKH &RUSRUDWLRQ DQG ZRUNHG LQ YDULRXV UROHV RI LQFUHDVLQJ UHVSRQVLELOLW IURP 2007 WR 2014 LQFOXGLQJ KLV ODVW UROH DV D lead asset Senior Reser voir Engineer in Apache’s Permian Region. During his career he has led multi-discipline teams charged with identif ying upside, optimizing vertical and KRUL]RQWDO GHYHORSPHQW SURJUDPV, UHGXFLQJ FRVWV, DQG LPSURYLQJ UHWXUQV. +H KDV GLUHFW experience in drilling, completions, production operations and reser voir engineering in most of the U.S. major active basins and horizontal plays. Mr. Dyes is bilingual in Spanish and brings a multicultural background as he was born and raised in Bogota, Colombia. Mr. Dyes received a Bachelor of Science degree in Petroleum Engineering from the of Business.

 

COMPENSATION DISCUSSION & ANALYSIS Our Compensation Committee, appointed by our Board, assists the Board in performing its responsibilities relating to the FRPSHQVDWLRQ RI RXU &KLHI ([HFXWLYH 2FHU DQG RWKHU H[HFXWLYH RFHUV. 7KH &RPSHQVDWLRQ &RPPLWWHH LV UHVSRQVLEOH for our incentive compensation programs, which include programs for our executive management team, including the 1DPHG ([HFXWLYH 2FHUV OLVWHG EHORZ. (6HH 6HWWLQJ ([HFXWLYH &RPSHQVDWLRQ DQG (YDOXDWLQJ 1DPHG ([HFXWLYH 2FHU Performance” below). This Compensation Discussion and Analysis provides an overview of our compensation policies and programs and explains our compensation objectives, policies and practices with respect to individuals deemed to be our “Named Executive 2FHUV XQGHU 6(& UXOHV, HDFK RI ZKRP LV LGHQWLHG LQ WKH WDEOH EHORZ. 7KLV LQFOXGHV DOO LQGLYLGXDOV ZKR VHUYHG DV WKH &RPSDQV SULQFLSDO H[HFXWLYH DQG SULQFLSDO QDQFLDO RFHUV GXULQJ 2020, RXU IRUPHU SULQFLSDO H[HFXWLYH RFHU ZKR VHSDUDWHG IURP WKH &RPSDQ LQ 2020, DQG WKH WKUHH RWKHU PRVW KLJKO FRPSHQVDWHG H[HFXWLYH RFHUV VHUYLQJ DW WKH HQG RI WKH VFDO HDU: Paul D. McKinney &KLHI ([HFXWLYH 2FHU DQG &KDLUPDQ RI WKH %RDUG, HHFWLYH 2FWREHU 1, 2020 Stephen D. Brooks ([HFXWLYH 9LFH 3UHVLGHQW RI /DQG, /HJDO, +XPDQ 5HVRXUFHV DQG 0DUNHWLQJ, HHFWLYH 1RYHPEHU 30, 2020 .HOO +RPDQ )RUPHU &KLHI ([HFXWLYH 2FHU, HHFWLYH -DQXDU 1, 2013 WKURXJK 2FWREHU 1, 2020 William R. Broaddrick )RUPHU &KLHI )LQDQFLDO 2FHU, HHFWLYH -XO 1, 2012 WKURXJK 0DUFK 24, 2021 David A. Fowler )RUPHU 3UHVLGHQW, HHFWLYH -DQXDU 1, 2013 WKURXJK 'HFHPEHU 31, 2020 Daniel D. Wilson )RUPHU ([HFXWLYH 9LFH 3UHVLGHQW, HHFWLYH -DQXDU 1, 2013 WKURXJK 'HFHPEHU 31, 2020 This section also provides an explanation of our Compensation Committee’s rationale for structuring our executive FRPSHQVDWLRQ SURJUDP, ZKLFK LV GHVLJQHG WR DOLJQ WKH LQWHUHVWV RI 1DPHG ([HFXWLYH 2FHUV ZLWK RXU VWRFNKROGHUV, DV ZHOO DV WR SURYLGH RXU 1DPHG ([HFXWLYH 2FHUV ZLWK LQFHQWLYHV WR DFKLHYH WKH &RPSDQV JRDOV DQG REMHFWLYHV WKDW ZLOO XOWLPDWHO HQKDQFH YDOXH WR RXU VWRFNKROGHUV. )LQDOO, WKLV VHFWLRQ LGHQWLHV WKH HOHPHQWV RI FRPSHQVDWLRQ IRU RXU 1DPHG ([HFXWLYH 2FHUV IRU WKH VFDO HDU HQGLQJ 'HFHPEHU 31, 2020. This section omits tables and columns if there has been no compensation awarded to, earned by, or paid to any of the Named ([HFXWLYH 2FHUV RU GLUHFWRUV UHTXLUHG WR EH UHSRUWHG LQ VXFK WDEOH RU FROXPQ LQ DQ VFDO HDU FRYHUHG E VXFK WDEOH. EXECUTIVE TEAM TR ANSITIONS 'XULQJ WKH ODVW TXDUWHU RI 2020 DQG WKH UVW TXDUWHU RI 2021, VHYHUDO H[HFXWLYHV MRLQHG WKH &RPSDQ DQG RWKHUV PRYHG RQ to new opportunities. To ensure a smooth transition between the outgoing and incoming executives, the Board approved FHUWDLQ OLPLWHG WHUPLQDWLRQ EHQHWV, GHVFULEHG LQ PRUH GHWDLO EHORZ. 34 NAME PRINCIPAL POSITION

 

 

&KLHI ([HFXWLYH 2FHU 7UDQVLWLRQ $V SUHYLRXVO GLVFORVHG, HHFWLYH 2FWREHU 1, 2020, 0U. +RPDQ UHVLJQHG DV &KLHI ([HFXWLYH 2FHU DQG 0U. 0F.LQQH DVVXPHG WKH UROH DV KLV VXFFHVVRU. Q FRQQHFWLRQ ZLWK 0U. +RPDQV UHVLJQDWLRQ, KH UHFHLYHG D OXPS VXP SDPHQW HTXDO WR WKUHH PRQWKV VHYHUDQFH (RU $83,333) DQG DFFHOHUDWHG YHVWLQJ RQ 181,095 VKDUHV RI UHVWULFWHG VWRFN. $ GHVFULSWLRQ RI WKH terms of Mr. McKinney’s employment agreement can be found under the heading, “Employment Agreements” following the Summary Compensation Table below. &KLHI )LQDQFLDO 2FHU 7UDQVLWLRQ $V SUHYLRXVO GLVFORVHG, HHFWLYH 0DUFK 24, 2021, 0U. %URDGGULFN UHVLJQHG DV &KLHI )LQDQFLDO 2FHU DQG 7UDYLV 7KRPDV, ZKR SUHYLRXVO VHUYHG DV WKH &RPSDQV 9LFH 3UHVLGHQW RI )LQDQFH, ZDV SURPRWHG WR &KLHI )LQDQFLDO 2FHU DV KLV VXFFHVVRU, HHFWLYH 0DUFK 24, 2021. 0U. %URDGGULFN, ZKR KDV VHUYHG WKH &RPSDQ DV &KLHI )LQDQFLDO 2FHU VLQFH LWV UHYHUVH PHUJHU with Stanford Energy in 2012, continues in a transition support role on an as-needed basis. In connection with Mr. %URDGGULFNV UHVLJQDWLRQ, KH UHFHLYHG D OXPS VXP SDPHQW HTXDO WR IRXU PRQWKV VHYHUDQFH (RU $65,000) DQG DFFHOHUDWHG YHVWLQJ RQ 89,840 VKDUHV RI UHVWULFWHG VWRFN. 2WKHU ([HFXWLYH 7UDQVLWLRQV $V SUHYLRXVO GLVFORVHG, HHFWLYH 'HFHPEHU 31, 2020, 0U. )RZOHU UHVLJQHG DV 3UHVLGHQW, DQG 0U. :LOVRQ UHVLJQHG DV ([HFXWLYH 9LFH 3UHVLGHQW DQG &KLHI 2SHUDWLQJ 2FHU. 8SRQ KLV UHVLJQDWLRQ DV 3UHVLGHQW, 0U. )RZOHU WUDQVLWLRQHG LQWR a new role, providing investor relations and business development consulting services to the Company. In connection with Messrs. Fowler and Wilson’s resignations, each received a lump sum payment equal to three months’ severance (or $56,250) DQG DFFHOHUDWHG YHVWLQJ RQ 89,840 VKDUHV RI UHVWULFWHG VWRFN. Q DGGLWLRQ, 0U. %URRNV MRLQHG WKH &RPSDQ LQ 2FWREHU 2020 DQG ZDV SURPRWHG WR ([HFXWLYH 9LFH 3UHVLGHQW RI /DQG, /HJDO, +XPDQ 5HVRXUFHV DQG 0DUNHWLQJ, HHFWLYH 1RYHPEHU 30, 2020. $ GHVFULSWLRQ RI WKH WHUPV RI 0U. %URRNV HPSORPHQW agreement can be found under the heading “Employment Agreements” following the Summary Compensation Table below. 2020 PERFORMANCE HIGHLIGHTS As the COVID-19 pandemic made its impact on the world economy during 2020, and in particular its impact on oil and gas commodity prices, energy companies were compelled to alter operating plans, budgets and goals established at the beginning of the year to respond to unprecedented conditions the pandemic imposed on the oil and gas industry for the rest of the year. Ring, like many other companies, immediately took steps to ensure the health and safety of our employees DQG FRQWUDFWRUV DQG IXUWKHU UHVSRQGHG E LPSOHPHQWLQJ FRVW FRQWURO PHDVXUHV, LQFOXGLQJ VWDQJ UHGXFWLRQV, WHPSRUDULO suspending production on a portion of our operated properties, and by curtailing and redirecting our capital expenditures. Additionally, the Board, recognizing the lack of investor appreciation of the Company’s historical operating success and unique market position, took decisive action after completing a strategic evaluation of alternatives for increasing VWRFNKROGHU YDOXH. :KHQ FRPELQLQJ WKHVH LQLWLDWLYHV, WKH &RPSDQ VLJQLFDQWO UHGXFHG RSHUDWLQJ FRVWV, UHVWRUHG SURGXFWLRQ OHYHOV DQG JHQHUDWHG IUHH FDVK RZ DOO IRXU TXDUWHUV DOORZLQJ 5LQJ WR VLJQLFDQWO UHGXFH LWV RXWVWDQGLQJ GHEW balance and increase liquidity as we exited the year. Key highlights of our 2020 Performance are listed below. $253.4 Million Net Loss – 5HSRUWHG D QHW ORVV IRU IXOO HDU 2020 RI $253.4 PLOOLRQ, RU $3.48 SHU GLOXWHG VKDUH, DQG Adjusted Net Income1 RI $20.7 PLOOLRQ, RU $0.28 SHU GLOXWHG VKDUH, IRU IXOO HDU 2020. $86.1 Million Adjusted EBITDA – *HQHUDWHG $GMXVWHG (%7'$1 RI $86.1 PLOOLRQ IRU IXOO HDU 2020. $39.7 Million in Free Cash Flow – 3URGXFHG VLJQLFDQW )UHH &DVK )ORZ1 RI $39.7 PLOOLRQ IRU IXOO HDU 2020 DQG UHPDLQHG FDVK RZ SRVLWLYH HYHU TXDUWHU HYHQ ZLWK WKH UHFHQW UHVXPSWLRQ RI GHYHORSPHQW GULOOLQJ LQ 44 2020; $72.2 Million in Net Cash Provided by Operating Activities – *HQHUDWHG 1HW &DVK 3URYLGHG E 2SHUDWLQJ $FWLYLWLHV IRU WKH WZHOYH PRQWKV HQGHG 'HFHPEHU 31, 2020 RI $72.2 PLOOLRQ. 8,790 Boe/d Average Net Sales – 1HW VDOHV IRU IXOO HDU 2020 ZHUH 8,790 %RH/G, RU 3,217,278 %RH, FRPSULVHG RI 2,801,528 Bbls of oil and 2,494,502 Mcf of natural gas. $10.52 per Boe Lifting Costs – 'HFUHDVHG OLIWLQJ FRVW E 8% WR $10.52 SHU %RH IRU IXOO HDU 2020 DQG /2( E 25% WR $33.8 PLOOLRQ. 1$ QRQ-*$ $3 QDQFLDO PHDVXUH; VHH HQG RI WKLV GRFXPHQW IRU UHFRQFLOLDWLRQV WR WKH PRVW FRPSDUDEOH *$ $3 PHDVXUHV. 2021 Proxy Statement 35

 

COMPENSATION POLICY HIGHLIGHTS OBJECTIVES AND PHILOSOPHY OF OUR EXECUTIVE COMPENSATION PROGR AM Our executive compensation programs are intended to achieve two objectives. The primary objective is to enhance stockholder value. The second objective is to attract, motivate, reward, and retain employees, including executive personnel, who contribute to the long-term success of the Company and the enhancement of stockholder value. As GHVFULEHG LQ PRUH GHWDLO EHORZ, RXU FXUUHQW H[HFXWLYH FRPSHQVDWLRQ SURJUDP IRU 1DPHG ([HFXWLYH 2FHUV LQFOXGHV WKUHH PDMRU HOHPHQWV: (1) D EDVH VDODU, (2) GLVFUHWLRQDU DQQXDO ERQXVHV, DQG (3) GLVFUHWLRQDU HTXLW DZDUGV. The Company believes that each element of its executive compensation program helps to achieve one or both of the Company’s compensation objectives outlined above. Our executives’ compensation is based on individual and Company SHUIRUPDQFH DQG GHVLJQHG WR DWWUDFW, UHWDLQ, DQG PRWLYDWH KLJKO TXDOLHG H[HFXWLYHV ZKLOH FUHDWLQJ D VWURQJ FRQQHFWLRQ EHWZHHQ QDQFLDO DQG RSHUDWLRQDO SHUIRUPDQFH DQG VWRFNKROGHU YDOXH, ZKLFK LV H[HPSOLHG LQ WKH PL[ RI WKH FRPSHQVDWLRQ WKDW ZH SURYLGH WR RXU 1DPHG ([HFXWLYH 2FHUV. Q IXUWKHUDQFH RI RXU REMHFWLYH WR DOLJQ H[HFXWLYH FRPSHQVDWLRQ ZLWK VWRFNKROGHU YDOXH, D VLJQLFDQW SRUWLRQ RI RXU 1DPHG ([HFXWLYH 2FHUV KLVWRULFDO FRPSHQVDWLRQ ZDV LQ WKH IRUP RI HTXLW DZDUGV. :H EHOLHYH WKDW WKLV VWUXFWXUH PD[LPL]HV WKH DOLJQPHQW RI LQWHUHVWV RI RFHUV, GLUHFWRUV, DQG HPSORHHV ZLWK WKRVH RI VWRFNKROGHUV WKURXJK DQ LQFUHDVHG HTXLW VWDNH in the Company and directly correlating the value of compensation with the Company’s long-term stock performance. We EHOLHYH WKDW RXU FRPSHQVDWLRQ SURJUDP SURYLGHV RXU RFHUV, GLUHFWRUV, DQG HPSORHHV ZLWK D VWURQJ LQFHQWLYH WR JHQHUDWH JDLQV LQ PDUNHW YDOXH IRU RXU VWRFNKROGHUV E SODFLQJ D VLJQLFDQW SRUWLRQ RI WKHLU FRPSHQVDWLRQ DW ULVN RI GLPLQLVKHG YDOXH in the event of poor stock performance. 36 (PSKDVL]H DOLJQPHQW RI LQWHUHVW ZLWK VWRFNKROGHUV through greater percentage of equity compensation out of total compensation 3ROLF DGRSWHG UHTXLULQJ VHFRQG WULJJHU RQ accelerated vesting of equity awards in the event of a change in control established in each award agreement /RQJ-WHUP YHVWLQJ DQG WUDQVIHU UHVWULFWLRQ SURYLVLRQV on all equity awards (VWDEOLVKHG FODZEDFN SROLF RQ HTXLW DZDUGV 3ROLF DGRSWHG SURKLELWLQJ FDVK EXRXWV RI underwater options (TXLW FRPSHQVDWLRQ SODQ GRHV QRW FRQWDLQ DQ evergreen provision (TXLW FRPSHQVDWLRQ SODQ SURKLELWV RSWLRQ UHSULFLQJ without stockholder approval 2FHUV DQG GLUHFWRUV SURKLELWHG IURP HQWHULQJ LQWR hedging transactions in our securities

 

Our executive compensation program is designed to do the following: $OLJQ WKH FRPSHQVDWLRQ RI RXU 1DPHG ([HFXWLYH 2FHUV DQG RWKHU PDQDJHUV ZLWK RXU VWRFNKROGHUV LQWHUHVWV DQG PRWLYDWH RXU H[HFXWLYH RFHUV WR PHHW WKH &RPSDQV REMHFWLYHV; 3D IRU SHUIRUPDQFH, WDNLQJ LQWR FRQVLGHUDWLRQ ERWK WKH SHUIRUPDQFH RI WKH &RPSDQ DQG WKH LQGLYLGXDO LQ GHWHUPLQLQJ executive compensation; 3URPRWH 1DPHG ([HFXWLYH 2FHU DFFRXQWDELOLW E FRPSHQVDWLQJ 1DPHG ([HFXWLYH 2FHUV IRU WKHLU FRQWULEXWLRQV WR the achievement of the Company’s objectives (while discouraging excessive risk-taking not in the interest of long-term value for our stockholders); and $WWUDFW DQG UHWDLQ KLJKO TXDOLHG H[HFXWLYHV ZLWK VLJQLFDQW LQGXVWU NQRZOHGJH DQG H[SHULHQFH E SURYLGLQJ WKHP ZLWK D IDLU FRPSHQVDWLRQ SURJUDP WKDW SURYLGHV QDQFLDO VWDELOLW DQG LQFHQWLYL]HV JURZWK LQ VWRFNKROGHU YDOXH. 2XU &RPSHQVDWLRQ &RPPLWWHH DQG %RDUG EHOLHYH WKDW RXU H[HFXWLYH FRPSHQVDWLRQ SURJUDP SURYLGHV RXU H[HFXWLYH RFHUV with incentives to meet the Company’s goals and objectives, while discouraging excessive risk taking. We believe our executive compensation program is consistently aligned with creating value to our stockholders. The table below lists each material element of our executive compensation program and the compensation objective or objectives that it is designed to achieve. 2021 Proxy Statement 37 COMPENSATION ELEMENT COMPENSATION OBJECTIVES Base Salary $WWUDFW DQG UHWDLQ TXDOLHG H[HFXWLYHV ZLWK VLJQLFDQW LQGXVWU NQRZOHGJH, H[SHULHQFH, and expertise. 3URYLGH VWDELOLW LQ FRPSHQVDWLRQ WKURXJK D [HG FRPSHQVDWLRQ HOHPHQW WKDW FRQVLGHUV WKH 1DPHG ([HFXWLYH 2FHUV VNLOOV, H[SHULHQFH, H[SHUWLVH, DQG WHQXUH ZLWK WKH &RPSDQ. Non-Equity Incentive Compensation Motivate and reward executives’ performance. Reward achievement of the Company’s goals and objectives. (QKDQFH SURWDELOLW RI WKH &RPSDQ DQG VWRFNKROGHU YDOXH. Equity-Based Incentive Compensation (QKDQFH SURWDELOLW RI WKH &RPSDQ DQG VWRFNKROGHU YDOXH E DOLJQLQJ ORQJ-WHUP LQFHQWLYHV with stockholders’ long-term interests. Incentivize achievement of both strategic goals and objectives by providing Named Executive 2FHUV ZLWK UHZDUGV IRU WKHLU FRQWULEXWLRQV WR DFKLHYLQJ VXFK JRDOV DQG REMHFWLYHV. 3URPRWH 1DPHG ([HFXWLYH 2FHU DFFRXQWDELOLW E FRPSHQVDWLQJ 1DPHG ([HFXWLYH 2FHUV for their contributions to the achievement of the Company’s objectives (while discouraging excessive risk-taking). 3URPRWH SD-IRU-SHUIRUPDQFH DQG DOORZ RXU 1DPHG ([HFXWLYH 2FHUV WR DFTXLUH meaningful interests in the Company. (QFRXUDJH ORQJ-WHUP YDOXH FUHDWLRQ IRU VWRFNKROGHUV DQG UHWHQWLRQ RI WDOHQWHG H[HFXWLYH RFHUV.

 

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a number of factors, including: experience and retention considerations; past performance; improvement in historical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ompany also awards stock options and restricted stock grants to promote long-term value creation for stockholders and to retain talented executives for an extended period. Peer Review, Benchmarking and Compensation Consultant The Compensation Committee reviews, evaluates, and benchmarks the compensation practices of “compensation peer” FRPSDQLHV, ZKLFK LQFOXGH &DOORQ 3HWUROHXP &RPSDQ, (DUWKVWRQH (QHUJ, QF., /DUHGR 3HWUROHXP, QF., $EUD[DV 3HWUROHXP &RUSRUDWLRQ DQG &RQWDQJR 2LO & *DV &RPSDQ, DOO RI ZKLFK DUH LQ WKH RLO DQG QDWXUDO JDV H[SORUDWLRQ DQG SURGXFWLRQ industry. The Compensation Committee also reviews and considers oil and gas industry compensation surveys and related materials. This information is used only as a reference and not to establish compensation benchmarks, as Ring does not EHQFKPDUN H[HFXWLYH FRPSHQVDWLRQ WR D VSHFLF SHUFHQWLOH ZLWKLQ WKH FRPSHQVDWLRQ SHHU JURXS. The Compensation Committee believes that non-equity incentive compensation and equity incentive compensation should XFWXDWH ZLWK WKH &RPSDQV VXFFHVV LQ DFKLHYLQJ QDQFLDO, RSHUDWLQJ, DQG VWUDWHJLF JRDOV. 7KH &RPPLWWHHV SKLORVRSK is that the Company should continue to use long-term incentive compensation such as stock options and restricted stock awards to align stockholders’ and executives’ interests and should allocate a much greater portion of an executive’s compensation package to long-term compensation. Based on this belief, the Compensation Committee reviews the SHUIRUPDQFH RI WKH &RPSDQV H[HFXWLYH RFHUV WKURXJKRXW WKH HDU WR HYDOXDWH WKH SHUIRUPDQFH RI HDFK H[HFXWLYH RFHU relative to the performance of the Company and the progress in meeting the Company’s goals and objectives. The Company has engaged an outside compensation consultant to assist the Compensation Committee and ensure the Company’s 2021 compensation practices are aligned with our Stockholder’s interests and conform to industry best practices. The Compensation Committee will work with the outside compensation consultant to consider enhancements to the Company’s current compensation program, such as adopting performance-based restricted stock awards. 6HWWLQJ ([HFXWLYH &RPSHQVDWLRQ DQG (YDOXDWLQJ 1DPHG ([HFXWLYH 2FHU 3HUIRUPDQFH Our executive compensation programs are determined and approved by our Compensation Committee based on a FRPSUHKHQVLYH HYDOXDWLRQ RI WKH &RPSDQV DQG LQGLYLGXDO H[HFXWLYH RFHUV SHUIRUPDQFH, DV ZHOO DV FRQVLGHUDWLRQ of industry compensation data reviewed by the Compensation Committee. The Compensation Committee takes into FRQVLGHUDWLRQ WKH UHFRPPHQGDWLRQV E RXU &KDLUPDQ RI WKH %RDUG DQG RXU &KLHI ([HFXWLYH 2FHU (DV WR WKH FRPSHQVDWLRQ RI H[HFXWLYH RFHUV RWKHU WKDQ WKH &KLHI ([HFXWLYH 2FHU). 1RQH RI WKH 1DPHG ([HFXWLYH 2FHUV DUH PHPEHUV RI WKH Compensation Committee. The Compensation Committee has the direct responsibility and authority to review and approve WKH &RPSDQV JRDOV DQG REMHFWLYHV UHODWLYH WR WKH FRPSHQVDWLRQ RI WKH 1DPHG ([HFXWLYH 2FHUV, DQG WR GHWHUPLQH DQG approve (either as a committee or with the other members of the Company’s Board who qualify as “independent directors” XQGHU DSSOLFDEOH JXLGHOLQHV DGRSWHG E WKH 1<6( $PHULFDQ) WKH FRPSHQVDWLRQ RI RXU 1DPHG ([HFXWLYH 2FHUV. For purposes of evaluating performance, our Compensation Committee, in consultation with our management and the Board, sets performance goals and objectives for the Company, regularly assesses progress towards meeting such goals and objectives WKURXJKRXW WKH HDU, DQG GHWHUPLQHV WKH DSSURSULDWH FRPSHQVDWLRQ IRU HDFK RI RXU 1DPHG ([HFXWLYH 2FHUV. 7KH &RPSHQVDWLRQ &RPPLWWHH HYDOXDWHV YDULRXV IDFWRUV LQ GHWHUPLQLQJ WKH DSSURSULDWH FRPSHQVDWLRQ IRU HDFK RI RXU 1DPHG ([HFXWLYH 2FHUV. ROLE OF STOCKHOLDER SAY-ON-PAY ADVISORY VOTE In determining 2020 executive compensation, the Compensation Committee considered the approval received from the stockholders of the say-on-pay vote at the last annual meeting. Based on the results of the say-on-pay vote, the Company has continued to focus on ensuring our executive compensation program is designed primarily to align the interests of our executives with stockholders and incentivize our management to achieve the Company’s objectives and goals. The Company is developing a plan to communicate with its stockholders in 2021 to gather feedback on the Company’s performance and executive compensation program. 38

 

Our Board and Compensation Committee utilizes the “say-on-pay” vote as an additional guide to ensure our executive compensation programs are aligned with the interests of our stockholders. Our Compensation Committee will continue to evaluate the Company’s compensation program to ensure competitiveness, the alignment of the Company’s executive compensation with stockholders’ interests and to meet other compensation objectives. EXECUTIVE COMPENSATION PROGR AM ELEMENTS FOR 2020 Performance Objectives and Goals 2XU &RPSHQVDWLRQ &RPPLWWHH EHOLHYHV WKDW RXU H[HFXWLYH FRPSHQVDWLRQ SURJUDP KDV SODHG D VLJQLFDQW UROH LQ RXU ability to enhance our stock’s value based upon our capital discipline and paydown of debt, in addition to our continued commitment to meeting our objectives and goals. Our Compensation Committee considered the following 2020 performance measures in determining the 2020 FRPSHQVDWLRQ RI RXU 1DPHG ([HFXWLYH 2FHUV: Ensured the Health and Safety of the Company’s Employees and Contractors – Our COVID-19 management plan was built around the need to support all employees in managing their personal and professional challenges. Frequent and transparent communications were the focus at every level of the organization from those on the front lines to those in RXU FRUSRUDWH RFHV. 'XULQJ WKH HDUO VWDJHV RI WKH SDQGHPLF, 5LQJV PDQDJHPHQW WHDP GLUHFWHG WKH &RPSDQV RYHUDOO COVID-19 pandemic response by implementing all relevant county, state and local government guidelines, directives and regulations, and developed and adopted work-from-home provisions and procedures, implemented safe working protocols IRU SURGXFWLRQ WHDPV DQG RFH SHUVRQQHO, DVVHVVHG DQG LPSOHPHQWHG DSSURSULDWH UHWXUQ-WR-RFH SURWRFROV, DQG SURYLGHG timely and transparent communications to employees and key stakeholders. Additionally, Ring began covering the cost RI &29'-19 WHVWLQJ WKURXJK H[SDQGHG LQVXUDQFH FRYHUDJH, SURPRWLQJ WHOHKHDOWK EHQHWV IRU RXU HPSORHHV, SURPRWLQJ mental health and well-being plans, and providing additional paid sick leave for quarantined employees. Reported a Net Loss for Full Year – 7KH &RPSDQ UHSRUWHG D QHW ORVV IRU IXOO HDU 2020 RI $253.4 PLOOLRQ, RU $3.48 SHU VKDUH, DQG $GMXVWHG 1HW QFRPH RI $20.7 PLOOLRQ, RU $0.28 SHU VKDUH. )RU WKH IXOO HDU 2019, 5LQJ UHSRUWHG QHW LQFRPH RI $29.5 PLOOLRQ, RU $0.44 SHU VKDUH, DQG $GMXVWHG 1HW QFRPH RI $34.3 PLOOLRQ, RU $0.51 SHU VKDUH. 7KH &RPSDQ JHQHUDWHG $GMXVWHG (%7'$ RI $86.1 PLOOLRQ, RU $1.18 SHU GLOXWHG VKDUH, IRU WKH IXOO HDU 2020 FRPSDUHG WR $121.4 PLOOLRQ, RU $1.82 SHU GLOXWHG VKDUH, LQ 2019, ZLWK WKH GHFOLQH GULYHQ SULPDULO E ORZHU UHDOL]HG SULFLQJ DQG VDOHV YROXPHV, SDUWLDOO RVHW E WDUJHWHG FRVW UHGXFWLRQV DQG LQFUHDVHG RSHUDWLRQDO HFLHQFLHV.  6LJQLFDQWO 5HGXFHG /HDVH 2SHUDWLQJ &RVWV )RU WKH IXOO HDU 2020, /2( GHFUHDVHG 25% WR $33.8 PLOOLRQ IURP $45.1 PLOOLRQ IRU IXOO HDU 2019, DQG 8% RQ D SHU %2( EDVLV IURP $11.42 LQ 2019 WR $10.52 IRU 2020. 'ULYLQJ WKH HDU-RYHU-HDU decrease was the Company’s focus on cost reductions during the pandemic-induced downturn. This included reducing overhead, expensive repairs, and the conversion of 29 electrical submersible pumps to rod pumps, which have an overall ORZHU RSHUDWLQJ FRVW. Q DGGLWLRQ, DUWLFLDO OLIW RSWLPL]DWLRQ KDV FRQWLQXHG WR UHGXFH RYHUDOO ZHOO IDLOXUH UDWHV, UHVXOWLQJ LQ lower well downtime and further reductions to operating costs. 3URGXFHG 6LJQLFDQW )UHH &DVK )ORZ 5LQJ JHQHUDWHG $39.7 PLOOLRQ RI )UHH &DVK )ORZ IRU IXOO HDU 2020, LQFOXGLQJ $12.7 PLOOLRQ LQ WKH IRXUWK TXDUWHU DQG UHPDLQHG FDVK RZ SRVLWLYH IRU WKH IWK FRQVHFXWLYH TXDUWHU HYHQ ZLWK WKH UHFHQW UHVXPSWLRQ RI GHYHORSPHQW GULOOLQJ LQ 44 2020. 5HYHQXHV IRU 2020 WRWDOHG $113.0 PLOOLRQ FRPSDUHG ZLWK $195.7 PLOOLRQ LQ 2019, with the reduction due primarily to decreases in commodity prices and sales volumes. Cash Flow from Operations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horizontal wells on the Northwest Shelf and performing workovers and extensive infrastructure projects on its Northwest 6KHOI, &HQWUDO %DVLQ 3ODWIRUP DQG 'HODZDUH %DVLQ DVVHWV. )RXU RI WKH 18 ZHOOV ZHUH GULOOHG DQG FRPSOHWHG LQ WKH UVW TXDUWHU. +RZHYHU, LQ HDUO 0DUFK, GXH WR DQ XQFHUWDLQ FRPPRGLW RXWORRN SULPDULO GXH WR WKH &29'-19 SDQGHPLF, WKH &RPSDQ VXVSHQGHG LWV GULOOLQJ DQG FRPSOHWLRQ DFWLYLWLHV. 'XULQJ IXOO HDU 2020, 5LQJ GULOOHG 6 VXFFHVVIXO ZHOOV ZLWK 2 LQ the fourth quarter, performed 29 CTR projects, including eight in the fourth quarter. Capital expenditures for full year 2020 WRWDOHG $30.0 PLOOLRQ. Raised Capital and Resumed Drilling Operations – 5LQJ FRPSOHWHG SXEOLF DQG UHJLVWHUHG GLUHFW RHULQJV DJJUHJDWLQJ $20.8 PLOOLRQ RI JURVV SURFHHGV ZLWK QHW SURFHHGV RI $19.4 PLOOLRQ WKDW SURYLGHG WKH QHFHVVDU OLTXLGLW WR UHVXPH GULOOLQJ operations. In early December 2020, the Company initiated a targeted Northwest Shelf drilling program of eight to ten wells that focuses on the Company’s most attractive drilling inventory in Yoakum County, Texas, supported by a rising oil price environment. 2021 Proxy Statement 39

 

 

7KH &RPSHQVDWLRQ &RPPLWWHH UHYLHZHG WKH SHUIRUPDQFH RI RXU 1DPHG ([HFXWLYH 2FHUV LQ FRQMXQFWLRQ ZLWK WKH Company’s performance objectives for 2020. The Compensation Committee also took into consideration other circumstances in determining executive compensation including, without limitation, changes in commodity prices, market conditions, supply and demand, weather conditions, governmental regulation, and other factors. The Compensation Committee determined that, despite volatile commodity prices, the Company exceeded the objectives and goals for 2020 and tied the compensation (as discussed below) to the Company’s performance. Below is a discussion of the compensation RI HDFK RI RXU 1DPHG ([HFXWLYH 2FHUV XQGHU RXU FRPSHQVDWLRQ SURJUDP, ZKLFK VKRXOG EH UHDG LQ FRQMXQFWLRQ ZLWK WKH “Summary Compensation Table.” Base Salaries The Compensation Committee believes base salary is an integral element of executive compensation to provide executive RFHUV ZLWK D EDVH OHYHO RI PRQWKO LQFRPH. :H SURYLGH DOO RI RXU HPSORHHV, LQFOXGLQJ RXU 1DPHG ([HFXWLYH 2FHUV, with an annual base salary to compensate them for their services to the Company. Similar to most companies within the LQGXVWU, RXU SROLF LV WR SD 1DPHG ([HFXWLYH 2FHUV EDVH VDODULHV LQ FDVK. 7KH EDVH VDODU RI HDFK 1DPHG ([HFXWLYH 2FHU LV UHYLHZHG DQQXDOO, ZLWK WKH VDODU RI WKH &KLHI ([HFXWLYH 2FHU EHLQJ recommended by the Compensation Committee and approved by the Board and the salaries of the other executive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eligible for a base salary increase in 2021. (EFFECTIVE JANUARY 1, 2020) Paul D. McKinney(1) 480,000 Stephen D. Brooks(1) 290,000 .HOO +RPDQ(2) 265,000 William R. Broaddrick(2) 195,000 David A. Fowler(2) 225,000 Daniel D. Wilson(2) 225,000 (1)As described above in more detail under “Executive Teams Transitions” Messrs. McKinney and Brooks were hired by the Company on October 1, 2020 and subsequently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amount of his base salar y through such date. Non-Equity Incentive Compensation and Bonus The Company’s payment of non-equity incentives has been discretionary and is largely based on the recommendations RI WKH &RPSHQVDWLRQ &RPPLWWHH. &DVK LQFHQWLYH ERQXVHV DUH GHVLJQHG WR SURYLGH RXU H[HFXWLYH RFHUV ZLWK DQ LQFHQWLYH to achieve the Company’s business goals and objectives and are tied to the performance of the Company. Cash bonuses KDYH QRW EHHQ, DQG DUH QRW H[SHFWHG WR EH, D VLJQLFDQW SRUWLRQ RI WKH &RPSDQV H[HFXWLYH FRPSHQVDWLRQ SDFNDJH. &DVK ERQXVHV DUH GHWHUPLQHG IRU 1DPHG ([HFXWLYH 2FHUV EDVHG RQ WKH &RPSDQV SHUIRUPDQFH IRU WKH HDU RI SHUIRUPDQFH, WKH RFHUV LQGLYLGXDO SHUIRUPDQFH LQ WKH HDU RI SHUIRUPDQFH, WKH RFHUV H[SHFWHG IXWXUH FRQWULEXWLRQ WR WKH performance of the Company, and other competitive data on grant values of peer companies. In December 2020, the Compensation Committee recommended cash bonuses to Messrs. Fowler, Wilson and Broaddrick WRWDOLQJ $25,800 UHODWHG WR VHUYLFHV SHUIRUPHG LQ 2020. Q )HEUXDU 2021, WKH &RPSHQVDWLRQ &RPPLWWHH UHFRPPHQGHG DGGLWLRQDO ERQXVHV UHODWHG WR VHUYLFHV SHUIRUPHG LQ 2020 IRU 0HVVUV. 0F.LQQH, %URDGGULFN DQG %URRNV WRWDOLQJ $177,453. (HFWLYH ZLWK WKHLU KLULQJ GDWHV, 0HVVUV. 0F.LQQH DQG %URRNV ZHUH DSSURYHG IRU FDVK VLJQ-RQ ERQXVHV RI $54,000 DQG $23,565, UHVSHFWLYHO. 7KH 2020 QRQ-HTXLW LQFHQWLYH FRPSHQVDWLRQ LV UHSRUWHG LQ WKH %RQXV FROXPQ RI WKH 6XPPDU &RPSHQVDWLRQ 7DEOH IRU HDFK 1DPHG ([HFXWLYH 2FHU. 40 NAME 2020 BASE SALARY RATE ($)

 

Equity-Based Compensation – Stock Options and Restricted Stock Awards $ VLJQLFDQW FRPSRQHQW RI RXU H[HFXWLYH FRPSHQVDWLRQ SURJUDP LV HTXLW-EDVHG FRPSHQVDWLRQ. W LV RXU SROLF WKDW WKH 1DPHG ([HFXWLYH 2FHUV ORQJ-WHUP FRPSHQVDWLRQ VKRXOG EH GLUHFWO OLQNHG WR HQKDQFLQJ VWRFNKROGHUV YDOXH. $FFRUGLQJO, WKH &RPSHQVDWLRQ &RPPLWWHH JUDQWV WR WKH &RPSDQV 1DPHG ([HFXWLYH 2FHUV HTXLW DZDUGV XQGHU WKH &RPSDQV /73 designed to link an increase in stockholder value to compensation. The purpose of granting equity-based compensation is WR LQFHQWLYL]H DQG UHZDUG WKH &RPSDQV H[HFXWLYH RFHUV IRU WKH &RPSDQV DFKLHYHPHQW RI LWV REMHFWLYHV DQG JRDOV DQG the individual’s contribution to meeting such goals and objectives and to encourage continued dedication to the Company by providing executives with meaningful ownership interests in the Company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to the performance of the Company, and other competitive data on grant values of peer companies. Awards may be JUDQWHG WR QHZ NH HPSORHHV RU 1DPHG ([HFXWLYH 2FHUV RQ WKHLU UHVSHFWLYH KLUH GDWHV. 2WKHU JUDQW GDWH GHWHUPLQDWLRQV are made by the Compensation Committee, which are based upon the date the Compensation Committee met and proper FRPPXQLFDWLRQ ZDV PDGH WR WKH 1DPHG ([HFXWLYH 2FHU RU NH HPSORHH DV GHQHG LQ WKH GHQLWLRQ RI JUDQW GDWH E generally accepted accounting principles. Exercise prices are equal to the value of the Company’s stock on the close of business on the determined grant date. The Company has no program or practice to coordinate timing of grants with release of material, nonpublic information. 7KH JUDQW GDWH IDLU YDOXH RI DZDUGV PDGH WR RXU 1DPHG ([HFXWLYH 2FHUV LQ WKH SDVW WKUHH HDUV DV GHWHUPLQHG XQGHU generally accepted accounting principles is shown in the “Summary Compensation Table” below. Employment Agreements and Severance (HFWLYH ZLWK WKHLU KLULQJ GDWHV, 0HVVUV. 0F.LQQH DQG %URRNV HQWHUHG LQWR HPSORPHQW DJUHHPHQWV ZLWK WKH &RPSDQ. $V GHVFULEHG LQ GHWDLO DQG TXDQWLHG LQ 3RWHQWLDO 3DPHQWV 8SRQ 7HUPLQDWLRQ RU &KDQJH LQ &RQWURO, 0HVVUV. 0F.LQQH DQG %URRNV UHFHLYH FHUWDLQ EHQHWV XQGHU WKHLU HPSORPHQW DJUHHPHQWV XSRQ WKHLU WHUPLQDWLRQ E WKH &RPSDQ ZLWKRXW “cause” or upon their resignation for “good reason,” including such terminations in connection with a change in control of WKH &RPSDQ. 7KH HPSORPHQW DJUHHPHQWV DOVR SURYLGH IRU UHVWULFWLYH FRYHQDQWV UHODWLQJ WR QRQ-FRPSHWLWLRQ, FRQGHQWLDO LQIRUPDWLRQ DQG QRQ-VROLFLWDWLRQ RI WKH &RPSDQV HPSORHHV DQG FXVWRPHUV. 7KHVH EHQHWV DUH LQWHQGHG WR HQVXUH WKDW PHPEHUV RI VHQLRU PDQDJHPHQW DUH QRW LQXHQFHG E WKHLU SHUVRQDO VLWXDWLRQV DQG DUH DEOH WR EH REMHFWLYH LQ HYDOXDWLQJ D potential change in control transaction. The Compensation Committee regularly reviews termination and change in control EHQHWV DQG FRQWLQXHV WR EHOLHYH WKDW WKH VHYHUDQFH EHQHWV LQ FRQQHFWLRQ ZLWK FHUWDLQ WHUPLQDWLRQV RI HPSORPHQW FRQVWLWXWH UHDVRQDEOH OHYHOV RI SURWHFWLRQ IRU RXU H[HFXWLYHV. 1R RWKHU 1DPHG ([HFXWLYH 2FHU LV SDUW WR DQ HPSORPHQW DJUHHPHQW DQG QR 1DPHG ([HFXWLYH 2FHU LV SDUW WR DQ DJUHHPHQW FRQWDLQLQJ DQ H[FLVH WD[ JURVV-XS SURYLVLRQ. $ GHVFULSWLRQ RI WKH WHUPLQDWLRQ EHQHWV UHFHLYHG E 0HVVUV. +RPDQ, :LOVRQ DQG )RZOHU FDQ EH IRXQG XQGHU WKH KHDGLQJ “Executive Team Transitions” in the Compensation Discussion and Analysis section above. 3HQVLRQ 3ODQV, 1RQ-4XDOLHG 'HIHUUHG &RPSHQVDWLRQ 3ODQV DQG &KDQJH LQ &RQWURO $JUHHPHQWV 7KH &RPSDQ GLG QRW KDYH DQ SHQVLRQ SODQV, QRQ-TXDOLHG GHIHUUHG FRPSHQVDWLRQ SODQV RU VLQJOH WULJJHU FKDQJH LQ FRQWURO DJUHHPHQWV IRU DQ RI LWV 1DPHG ([HFXWLYH 2FHUV IRU WKH HDU HQGHG 'HFHPEHU 31, 2020. 2WKHU %HQHWV 2XU 1DPHG ([HFXWLYH 2FHUV DUH HOLJLEOH WR SDUWLFLSDWH LQ DOO RI RXU HPSORHH EHQHW SODQV, VXFK DV PHGLFDO, GHQWDO, YLVLRQ, group life, and short and long-term disability, in each case, on the same basis as other employees, subject to applicable ODZV. :H DOVR SURYLGH YDFDWLRQ DQG RWKHU SDLG KROLGDV WR DOO HPSORHHV, LQFOXGLQJ RXU 1DPHG ([HFXWLYH 2FHUV. We maintain a 401(k) plan for eligible employees. Under the 401(k) plan, eligible employees may elect to contribute a portion of their eligible compensation on a pre-tax basis in accordance with the limitations imposed under the Internal 5HYHQXH &RGH RI 1986, DV DPHQGHG, RU WKH &RGH. 7KH SODQ DOORZV HOLJLEOH HPSORHHV WR PDNH SUH-WD[ RU DIWHU-WD[ FRQWULEXWLRQV RI XS WR 100% RI WKHLU DQQXDO HOLJLEOH FRPSHQVDWLRQ. 7KH &RPSDQ PDNHV PDWFKLQJ FRQWULEXWLRQV RI XS WR 6% RI DQ HPSORHHV FRPSHQVDWLRQ. 2021 Proxy Statement 41

 

MANAGEMENT STOCK OWNERSHIP GUIDELINES Q $SULO 2021, RXU %RDUG DSSURYHG VWRFN RZQHUVKLS JXLGHOLQHV IRU RXU QRQ-HPSORHH GLUHFWRUV, &KLHI ([HFXWLYH 2FHU DQG 1DPHG ([HFXWLYH 2FHUV. 7KH PDQDJHPHQW VWRFN RZQHUVKLS JXLGHOLQHV FUHDWH D VWURQJ OLQN EHWZHHQ RXU ORQJ-WHUP VXFFHVV DQG WKH XOWLPDWH SD RI RXU H[HFXWLYH RFHUV WKURXJK VSHFLHG VWRFN RZQHUVKLS OHYHOV EDVHG RQ D PXOWLSOH RI EDVH VDODU, as shown in the table below. After becoming subject to the stock ownership guidelines, executives have three years to reach the stock ownership goal. Until an executive meets the guideline, he or she must hold two-thirds of the net shares acquired upon the vesting of equity awards. Once the guidelines are met, restrictions on the sale of vested awards of the Company’s stock are limited to normal trading restrictions for insiders and Company policies. (MULTIPLE OF BASE SALARY) &KLHI ([HFXWLYH 2FHU 5; 1DPHG ([HFXWLYH 2FHUV 3; TA X CONSIDER ATIONS Although our Compensation Committee considers the tax and accounting treatment associated with the cash DQG HTXLW JUDQWV LW PDNHV WR LWV H[HFXWLYH RFHUV, WKHVH FRQVLGHUDWLRQV DUH QRW GLVSRVLWLYH. 6HFWLRQ 162(P) RI WKH QWHUQDO 5HYHQXH &RGH RI 1986, DV DPHQGHG (WKH &RGH) SODFHV D OLPLW RI $1.0 PLOOLRQ SHU SHUVRQ RQ WKH DPRXQW RI FRPSHQVDWLRQ WKDW ZH PD GHGXFW LQ DQ HDU ZLWK UHVSHFW WR HDFK FRYHUHG HPSORHH DV VXFK WHUP LV GHQHG LQ 6HFWLRQ 162(P). 'HVSLWH WKH FKDQJH LQ ODZ, WKH &RPSHQVDWLRQ &RPPLWWHH LQWHQGV WR FRQWLQXH WR FRQVLGHU WKH deductibility of compensation and to implement compensation programs that it believes are competitive and in the best interests of the Company and its stockholders. :H DFFRXQW IRU VWRFN-EDVHG DZDUGV EDVHG RQ WKHLU JUDQW GDWH IDLU YDOXH, DV GHWHUPLQHG XQGHU )$6% $6& 7RSLF 718. In connection with its approval of stock-based awards, the Compensation Committee is cognizant of and sensitive to the impact of such awards on stockholder dilution. The Compensation Committee also endeavors to avoid stock-based awards made subject to a market condition, which may result in an expense that must be marked to market on a quarterly basis. The accounting treatment for stock-based awards does not otherwise impact the Compensation Committee’s compensation decisions. RISK CONSIDER ATIONS IN OUR OVER ALL COMPENSATION PROGR AM Our compensation program is designed to focus on meeting the Company’s objectives and goals while discouraging management from undue risk-taking. When establishing and reviewing our executive compensation program, the Compensation Committee has considered whether the program encourages unnecessary or excessive risk taking and has concluded that it does not. While behavior that may result in inappropriate risk taking cannot necessarily be prevented by the structure of compensation practices, we believe that our compensation policies and practices do not create risks that DUH UHDVRQDEO OLNHO WR KDYH D PDWHULDO DGYHUVH HHFW RQ WKH &RPSDQ. Moreover, with limited exceptions, our Compensation Committee retains discretion to impose additional conditions and adjust compensation pursuant to our clawback policy as well as for quality of performance and adherence to the Company’s values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range of actions to remedy the misconduct and prevent its recurrence, including terminating the individual’s employment. :H EHOLHYH WKDW RXU FRPSHQVDWLRQ SROLFLHV DQG SUDFWLFHV IRU DOO HPSORHHV, LQFOXGLQJ H[HFXWLYH RFHUV, GR QRW FUHDWH ULVNV WKDW DUH UHDVRQDEO OLNHO WR KDYH D PDWHULDO DGYHUVH HHFW RQ RXU &RPSDQ. COMPENSATION OF NAMED EXECUTIVE OFFICERS FROM 2018 THROUGH 2020 The “Summary Compensation Table” set forth below should be read in connection with the tables and narrative descriptions contained in this Compensation Discussion & Analysis. The “Outstanding Equity Awards at Fiscal Year End 7DEOH DQG 2SWLRQ ([HUFLVHV DQG 6WRFN 9HVWHG 7DEOH SURYLGH IXUWKHU LQIRUPDWLRQ RQ WKH 1DPHG ([HFXWLYH 2FHUV potential realizable value and actual value realized with respect to their equity awards. 42 POSITION REQUIRED SHARE OWNERSHIP LEVEL

 

Summary Compensation Table POSITION YEAR SALARY ($) BONUS ($)(1) AWARDS ($)(2) COMPENSATION ($)(3) TOTAL ($) Paul D. McKinney(4), &KLHI ([HFXWLYH 2FHU 2020 120,000 162,000 204,000 7,000 493,000 Stephen D. Brooks(5), 9LFH 3UHVLGHQW RI /DQG, /HJDO, +XPDQ Resources and Marketing 2020 72,500 70,690 136,000 — 279,190 2020 187,500 — — 105,833 293,333 .HOO +RPDQ(6), )RUPHU &KLHI ([HFXWLYH 2FHU 2019 250,000 30,000 229,010 24,000 533,010 2018 235,000 — 407,615 24,000 666,615 2020 195,000 30,128 — 11,700 236,828 William R. Broaddrick(7), )RUPHU &KLHI )LQDQFLDO 2FHU 2019 195,000 20,000 143,448 4,875 363,323 2018 175,000 — 265,768 — 440,768 2020 225,000 9,000 — 80,750 314,750 David A. Fowler(8), Former President 2019 225,000 30,000 143,448 24,000 422,448 2018 200,000 — 265,768 24,000 489,768 2020 225,000 9,000 — 56,250 290,250 Daniel D. Wilson(9), Former Executive Vice President 2019 225,000 20,000 143,448 — 388,448 2018 200,000 — 265,768 — 465,768 (1)7KH DPRXQWV UHSRU WHG LQ WKH %RQXV FROXPQ IRU 2020 UHSUHVHQW (L) IRU 0U. 0F.LQQH DQG 0U. %URRNV, D VLJQ-RQ ERQXV RI $54,000 DQG $23,565, UHVSHFWLYHO, SDLG LQ FRQQHFWLRQ with the commencement of each executive’s employment with the Company, and (ii) for Messrs. McKinney, Brooks, Broaddrick, Fowler and Wilson, a discretionar y bonus based on 2020 Company performance, the amounts of which were determined and approved by the Compensation Committee in early 2021. (2)The amounts reported in the “Equity Awards” column for 2020 represent the grant date fair value of the sign-on equity awards of restricted stock granted to Messrs. 0F.LQQH DQG %URRNV LQ FRQQHFWLRQ ZLWK WKH FRPPHQFHPHQW RI WKHLU HPSORPHQW ZLWK WKH &RPSDQ, FDOFXODWHG LQ DFFRUGDQFH ZLWK )$6% $6& 7RSLF 718. )RU D GLVFXVVLRQ RI WKH DVVXPSWLRQV DQG PHWKRGRORJLHV XVHG LQ FDOFXODWLQJ WKH JUDQW GDWH IDLU YDOXH RI WKH UHVWULFWHG VWRFN DZDUGV, SOHDVH VHH 1RWH 13 WR WKH &RPSDQ V FRQVROLGDWHG QDQFLDO VWDWHPHQWV LQ WKH &RPSDQ V $QQXDO 5HSRU W RQ )RUP 10 -. IRU WKH VFDO HDU HQGHG 'HFHPEHU 31, 2020. (3)The amounts reported in the “All Other Compensation” column for 2020 represent the following: All Other Compensation Paul D. McKinney 7,000 — — 7,000 Stephen D. Brooks — — — — .HOO +RPDQ 22,500 83,333 — 105,833 William R. Broaddrick — — 11,700 11,700 David A. Fowler 24,500 56,250 — 80,750 Daniel D. Wilson — 56,250 — 56,250 (a))RU 0HVVUV. 0F.LQQH, +RPDQ DQG )RZOHU, WKH DPRXQWV UHSRUWHG LQ WKLV FROXPQ UHSUHVHQW WKH IHHV HDUQHG RU SDLG LQ FDVK WR HDFK 1DPHG ([HFXWLYH 2FHU LQ FRQQHFWLRQ ZLWK WKHLU VHUYLFH DV D GLUHFWRU RQ WKH %RDUG. 1RQH RI 0HVVUV. 0F.LQQH, +RPDQ RU )RZOHU UHFHLYHG HTXLW FRPSHQVDWLRQ RU DQ RWKHU IRUPV RI FRPSHQVDWLRQ UHODWHG WR KLV %RDUG VHUYLFH. %RDUG IHHV IRU H[HFXWLYH RFHUV LV XQGHU UHYLHZ E WKH FRPSHQVDWLRQ FRQVXOWDQW KLUHG LQ 2021. (b)7KH DPRXQW UHSRU WHG LQ WKLV FROXPQ IRU 0U. %URDGGULFN FRQVLVWV RI &RPSDQ PDWFKLQJ FRQWULEXWLRQV RI XS WR 6% RI 0U. %URDGGULFN V HOLJLEOH VDODU LQWR WKH &RPSDQ V sponsored 401(k) plan, subject to IRS and plan limits. (4)0U. 0F.LQQH FRPPHQFHG HPSORPHQW ZLWK WKH &RPSDQ DV &KLHI ([HFXWLYH 2FHU RQ 2FWREHU 1, 2020. 0U. 0F.LQQH ZDV QRW D 1DPHG ([HFXWLYH 2FHU LQ 2018 RU 2019 DQG thus, only 2020 compensation information is shown for him in this table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respectively. 2021 Proxy Statement 43 NAME BOARD FEES ($)(a) SEVERANCE ($) COMPANY MATCH TO 401(K) ($)(b) TOTAL ($) EQUITYALL OTHER

 

EMPLOYMENT AGREEMENTS 'XULQJ 2020, ZH HQWHUHG LQWR DW-ZLOO HPSORPHQW DJUHHPHQWV ZLWK FHUWDLQ 1DPHG ([HFXWLYH 2FHUV, WKH PDWHULDO WHUPV RI which are set forth below. 3DXO ' 0F.LQQH (HFWLYH 2FWREHU 1, 2020 0U. 0F.LQQH HQWHUHG LQWR DQ HPSORPHQW DJUHHPHQW ZLWK WKH &RPSDQ, HHFWLYH 2FWREHU 1, 2020. 8QGHU WKH DJUHHPHQW, 0U. 0F.LQQH ZLOO VHUYH DV &KLHI ([HFXWLYH 2FHU RQ DQ DW-ZLOO EDVLV IRU DQ LQGHQLWH WHUP. 7KH DJUHHPHQW SURYLGHV IRU DQ LQLWLDO EDVH VDODU RI $480,000 SHU HDU DQG HOLJLELOLW WR UHFHLYH DQQXDO ERQXVHV DW WKH GLVFUHWLRQ RI WKH %RDUG ZLWK D WDUJHW bonus equal to a percentage of his annual base salary established annually by the Board. Mr. McKinney is also eligible WR SDUWLFLSDWH LQ DQG UHFHLYH DZDUGV XQGHU WKH /73, ZLWK D WDUJHW YDOXH HTXDO WR D SHUFHQWDJH RI KLV DQQXDO EDVH VDODU, determined by the Board (based on the grant date value of any such award), based on the achievement of performance goals established by the Board. In addition, the agreement provides for a sign-on cash bonus of $54,000 (payable in three PRQWKO LQVWDOOPHQWV LQ 2FWREHU, 1RYHPEHU DQG 'HFHPEHU RI 2020) DQG HTXLW JUDQW RI 300,000 VKDUHV RI UHVWULFWHG stock (subject to a three-year vesting period and the terms and conditions of the award agreement). Mr. McKinney is also subject to certain non-competition and non-solicitation restrictions for a period of one year following any termination of HPSORPHQW, DV ZHOO DV FHUWDLQ FRQGHQWLDOLW UHVWULFWLRQV WKDW DSSO LQGHQLWHO. Under Mr. McKinney’s employment agreement, if the Company (i) materially reduces his then current base salary, title, authority or responsibilities, (ii) requires relocation of Mr. McKinney’s primary place of employment to a location more than 50 PLOHV IURP WKH &RPSDQV RFH LQ +RXVWRQ, 7H[DV, (LLL) IDLOV WR WLPHO SD LQ IXOO EDVH VDODU RU LQFHQWLYH FRPSHQVDWLRQ or (iv) otherwise materially breaches the agreement, Mr. McKinney would have a basis to invoke his rights under the agreement for termination for good reason. In addition, if in the six months before or 24 months following a change in FRQWURO (DV GHQHG LQ 0U. 0F.LQQHV HPSORPHQW DJUHHPHQW) WKH &RPSDQ ZHUH WR PDWHULDOO UHGXFH 0U. 0F.LQQHV maximum bonus opportunity, he would similarly have a basis to terminate for good reason. For a description of the severance provisions of Mr. McKinney’s employment agreement, see “Potential Payments upon Termination or Change in Control” below. 6WHSKHQ ' %URRNV (HFWLYH 2FWREHU 1, 2020 0U. %URRNV HQWHUHG LQWR DQ HPSORPHQW DJUHHPHQW ZLWK WKH &RPSDQ, HHFWLYH 2FWREHU 1, 2020 DQG ZDV DSSRLQWHG DV WKH &RPSDQV ([HFXWLYH 9LFH 3UHVLGHQW RI /DQG, /HJDO, +XPDQ 5HVRXUFHV DQG 0DUNHWLQJ RQ 1RYHPEHU 30, 2020. 8QGHU WKH DJUHHPHQW, 0U. %URRNV ZLOO VHUYH RQ DQ DW-ZLOO EDVLV IRU DQ LQGHQLWH WHUP. 7KH DJUHHPHQW SURYLGHV IRU DQ LQLWLDO EDVH salary of $290,000 per year and eligibility to receive annual bonuses in the discretion of the Board with a target bonus equal to a percentage of his annual base salary established annually by the Board. Mr. Brooks is also eligible to participate LQ DQG UHFHLYH DZDUGV XQGHU WKH &RPSDQV /73, ZLWK D WDUJHW YDOXH HTXDO WR D SHUFHQWDJH RI KLV DQQXDO EDVH VDODU, determined by the Board (based on the grant date value of any such award), based on the achievement of performance JRDOV HVWDEOLVKHG E WKH %RDUG. Q DGGLWLRQ, WKH DJUHHPHQW SURYLGHV IRU D VLJQ-RQ FDVK ERQXV RI $23,565 (SDDEOH LQ WKUHH monthly installments in October, November and December of 2020) and equity grant of 200,000 shares of restricted stock (subject to a three-year vesting period and the terms and conditions of the award agreement). Mr. Brooks is subject to the same restricted covenants and would have the same basis to invoke his rights under his employment agreement for termination for good reason as Mr. McKinney. For a description of the severance provisions of Mr. Brooks’ employment agreement, see “Potential Payments upon Termination or Change in Control” below. GR ANTS OF PLAN-BASED AWARDS The Company awards equity through the grant of stock options or restricted stock to key employees and the Named ([HFXWLYH 2FHUV HLWKHU RQ WKH LQLWLDO GDWH RI HPSORPHQW RU EDVHG RQ SHUIRUPDQFH LQFHQWLYHV WKURXJKRXW WKH HDU. 7KH IROORZLQJ WDEOH UHHFWV WKH UHVWULFWHG VWRFN JUDQWHG GXULQJ 2020. 44

 

 

OF STOCK (#)(1) VALUE ($)(2) Paul D. McKinney 9/29/2020 10/1/2020 300,000 204,000 Stephen D. Brooks 9/29/2020 10/1/2020 200,000 136,000 .HOO +RPDQ — — — — William R. Broaddrick — — — — David A. Fowler — — — — Daniel D. Wilson — — — — (1)$PRXQWV UHSRU WHG LQ WKLV FROXPQ UHSUHVHQW DZDUGV RI UHVWULFWHG VWRFN, ZKLFK YHVW LQ HTXDO LQVWDOOPHQWV RYHU WKH FRXUVH RI WKUHH HDUV, EHJLQQLQJ RQ WKH UVW DQQLYHUVDU RI WKH grant date. (2)3OHDVH VHH 1RWH 13 WR WKH &RPSDQ V FRQVROLGDWHG QDQFLDO VWDWHPHQWV LQ WKH &RPSDQ V $QQXDO 5HSRU W RQ )RUP 10 -. IRU WKH VFDO HDU HQGHG 'HFHPEHU 31, 2020 IRU WKH assumptions made in determining values. /RQJ-7HUP QFHQWLYHV 7KH UHVWULFWHG VWRFN DZDUGV ZHUH DOO JUDQWHG SXUVXDQW WR WKH /73, D VXPPDU RI ZKLFK LV VHW IRUWK DERYH XQGHU WKH KHDGLQJ, (TXLW %DVHG &RPSHQVDWLRQ. 7KH UHVWULFWHG VWRFN YHVWV LQ UDWDEOH DQQXDO LQVWDOOPHQWV RQ HDFK RI WKH UVW WKUHH anniversaries of the grant date, generally subject to continued service with the Company through each applicable vesting GDWH. 1DPHG ([HFXWLYH 2FHUV DUH QRW VHSDUDWHO HQWLWOHG WR UHFHLYH GLYLGHQG HTXLYDOHQW ULJKWV ZLWK UHVSHFW WR UHVWULFWHG VWRFN JUDQWHG XQGHU WKH /73. )RU D GHVFULSWLRQ RI WKH HHFW RI D WHUPLQDWLRQ RI HPSORPHQW RU FKDQJH LQ FRQWURO RQ WKH vesting of the restricted stock awards, please see “Potential Payments Upon Termination or Change in Control.” OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table provides certain information regarding unexercised stock options and stock awards outstanding for HDFK 1DPHG ([HFXWLYH 2FHU DV RI 'HFHPEHU 31, 2020. VESTED ($)(3) Paul D. McKinney — — — — 300,000(5) 198,000 Stephen D. Brooks — — — — 200,000(5) 132,000 .HOO +RPDQ — — — — — — 60,000(4) — 2.00 12/01/23 12,000(6) 7,920 William R. Broaddrick 33,360(7) 22,018 44,480(8) 29,357 David A. Fowler — — — — — — Daniel D. Wilson — — — — — — (1) 2SWLRQ DZDUGV YHVW DQG EHFRPH H[HUFLVDEOH LQ DSSUR[LPDWHO HTXDO LQVWDOOPHQWV RQ HDFK RI WKH UVW YH DQQLYHUVDULHV RI WKH DSSOLFDEOH JUDQW GDWH, VXEMHFW WR FRQWLQXHG VHU YLFH with the Company through each such vesting date. The regular term of each option expires on the tenth anniversar y of the applicable grant date. (2) 5HVWULFWHG VWRFN DZDUGV UHSRU WHG LQ WKLV FROXPQ JUDQWHG (L) SULRU WR 2020 YHVW LQ DSSUR[LPDWHO HTXDO LQVWDOOPHQWV RQ HDFK RI WKH UVW YH DQQLYHUVDULHV RI WKH DSSOLFDEOH JUDQW GDWH DQG (LL) LQ 2020 YHVW LQ DSSUR[LPDWHO HTXDO LQVWDOOPHQWV RQ HDFK RI WKH UVW WKUHH DQQLYHUVDULHV RI WKH DSSOLFDEOH JUDQW GDWH, LQ HDFK FDVH VXEMHFW WR FRQWLQXHG VHU YLFH ZLWK the Company through each such vesting date. (3) 7KH YDOXH RI WKH XQYHVWHG UHVWULFWHG VWRFN LV VKRZQ DVVXPLQJ D PDUNHW YDOXH RI $0.66 SHU VKDUH, WKH FORVLQJ PDUNHW SULFH RI D VKDUH RI FRPPRQ VWRFN RQ 'HFHPEHU 31, 2020. (4)*UDQWHG RQ 'HFHPEHU 1, 2011. (5)*UDQWHG RQ 2FWREHU 1, 2020. (6)*UDQWHG RQ 'HFHPEHU 19, 2017. (7)*UDQWHG RQ 'HFHPEHU 26, 2018. (8)*UDQWHG RQ 'HFHPEHU 21, 2019. 2021 Proxy Statement 45 NAME OPTION AWARDS STOCK AWARDS NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLE(1) NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS OPTION EXERCISE OPTION EXPIRATION (#) UNEXERCISABLE(1) PRICE ($) DATE NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#)(2) MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT NAME DATE OF BOARD APPROVAL GRANT DATENUMBER OF SHARES GRANT DATE FAIR

 

OPTION EXERCISES AND STOCK VESTED 7KH IROORZLQJ WDEOH VXPPDUL]HV WKH YHVWLQJ RI UHVWULFWHG VWRFN KHOG E RXU 1DPHG ([HFXWLYH 2FHUV GXULQJ 2020. 1R options were exercised in 2020. STOCK AWARDS Paul D. McKinney — — Stephen D. Brooks — — .HOO +RPDQ 181,095 123,145 William R. Broaddrick 28,240 19,888 David A. Fowler 118,080 79,182 Daniel D. Wilson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iscussion and Analysis section above. (2)7KH VKDUHV DQG DPRXQWV OLVWHG IRU 0U. %URDGGULFN UHSUHVHQW WKH ODSVLQJ RI UHVWULFWLRQV RQ RQH-I WK RI HDFK RI KLV 'HFHPEHU 19, 2017, 'HFHPEHU 26, 2018 DQG 'HFHPEHU 21, 2019 restricted stock awards. (3)The value realized on vesting is equal to the number of shares, multiplied by the fair market value of the shares at the time of vesting. PENSION BENEFITS :H GR QRW PDLQWDLQ DQ GHQHG EHQHW SHQVLRQ SODQV. NONQUALIFIED DEFERRED COMPENSATION :H GR QRW PDLQWDLQ DQ QRQTXDOLHG GHIHUUHG FRPSHQVDWLRQ DUUDQJHPHQWV. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL The material terms of potential payments upon various termination and change in control scenarios is set forth below. Except as described in this summary and in the “Potential Payments” table below, Ring does not have any other agreements RU SODQV WKDW ZLOO UHTXLUH FRPSHQVDWLRQ WR EH SDLG WR 1DPHG ([HFXWLYH 2FHUV LQ WKH HYHQW RI D WHUPLQDWLRQ RI HPSORPHQW or a change in control. Q 2017, RXU ERDUG DGRSWHG D SROLF UHTXLULQJ WKDW HDFK DZDUG DJUHHPHQW JRYHUQLQJ DQ DZDUG JUDQWHG XQGHU WKH /73 provide for double-trigger vesting upon a “change in control.” Payout under each of the outstanding equity awards and employment agreements based on various termination circumstances or in connection with a change in control are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or the occurrence of an actual change in control event, and the price of our common stock when the vesting of unvested stock options or restricted stock shares is accelerated. The disclosures below do not take into consideration any UHTXLUHPHQWV XQGHU 6HFWLRQ 409$ RI WKH QWHUQDO 5HYHQXH &RGH, ZKLFK FRXOG DHFW, DPRQJ RWKHU WKLQJV, WKH WLPLQJ RI payments and distributions. )RU D VXPPDU RI WKH WHUPLQDWLRQ EHQHWV UHFHLYHG E 0HVVUV. +RPDQ, %URDGGULFN, )RZOHU DQG :LOVRQ LQ FRQQHFWLRQ ZLWK HDFK 1DPHG ([HFXWLYH 2FHUV UHVLJQDWLRQ, VHH ([HFXWLYH 7HDP 7UDQVLWLRQV LQ WKH &RPSHQVDWLRQ 'LVFXVVLRQ DQG $QDOVLV section above. 46 NUMBER OF SHARES ACQUIRED ON VESTING (#) 1)(2) VALUE REALIZED ON VESTING ($)(3) NAME

 

TOTAL ($) OF EQUITY AWARDS ($)(2) COBRA PREMIUMS ($)(1) Paul D. McKinney 480,000 198,000 21,385 699,385 5HVLJQDWLRQ IRU *RRG 5HDVRQ Termination for Cause/Resignation ZLWKRXW *RRG 5HDVRQ — — — — Termination without Cause/ 5HVLJQDWLRQ IRU *RRG 5HDVRQ LQ WKH 6 PRQWKV SULRU WR RU WKH 24 PRQWKV following a Change in Control 720,000 198,000 21,385 939,385 Disability — — — — Stephen D. Brooks 290,000 132,000 13,959 435,959 5HVLJQDWLRQ IRU *RRG 5HDVRQ Termination for Cause/Resignation ZLWKRXW *RRG 5HDVRQ — — — — Termination without Cause/ 5HVLJQDWLRQ IRU *RRG 5HDVRQ LQ WKH 6 PRQWKV SULRU WR RU WKH 24 PRQWKV following a Change in Control 435,000 132,000 13,959 580,959 Disability — — — — (1)A description of the cash severance and COBR A obligations under the employment agreements with the Messrs. McKinney and Brooks is set forth under “Employment $JUHHPHQWV EHORZ. 6LQFH 0HVVUV. 0F.LQQH DQG %URRNV KDG QRW FRPSOHWHG D IXOO HDU RI VHU YLFH ZLWK WKH &RPSDQ DV RI 'HFHPEHU 31, 2020, QR ERQXV DPRXQWV ZRXOG KDYH been payable in connection with any of the termination events listed in the table. (2)5HSUHVHQWV DFFHOHUDWHG YHVWLQJ RI VWRFN RSWLRQV DQG UHVWULFWHG VWRFN, YDOXHG EDVHG RQ WKH 'HFHPEHU 31, 2020 FORVLQJ SULFH RI $0.66 SHU VKDUH RI WKH &RPSDQ V FRPPRQ VWRFN. Employment Agreements Pursuant to their employment agreements, Messrs. McKinney and Brooks are entitled to receive severance payments and EHQHWV, DV GHVFULEHG EHORZ DQG DV VHW IRUWK LQ WKH IRUHJRLQJ WDEOH. 7HUPLQDWLRQnZLWKRXWn&DXVHe5HVLJQDWLRQnIRUn*RRGn5HDVRQ Upon termination of employment by the Company other than for “cause” or by the executive for “good reason” (as each is GHQHG LQ WKH H[HFXWLYHV HPSORPHQW DJUHHPHQW), WKH H[HFXWLYH ZLOO HQWLWOHG WR D OXPS VXP FDVK SDPHQW LQ DQ DPRXQW HTXDO WR: (L) DQ DFFUXHG, XQSDLG EDVH VDODU RU EHQHWV HDUQHG WKURXJK WKH WHUPLQDWLRQ GDWH DQG DQ XQSDLG H[SHQVH reimbursements (“$FFUXHG %HQHWV”); (ii) if executive has completed one full year of service, any unpaid bonus amount equal to either the bonus amount approved by the Board remaining unpaid or, if the Board has not yet determined executive’s ERQXV, DQ DPRXQW HTXDO WR 100% RI KLV 7DUJHW %RQXV (DV GHQHG XQGHU WKH H[HFXWLYHV HPSORPHQW DJUHHPHQW)(Unpaid Bonus”); and (iii) a single lump sum equal to 1.0 times the executive’s annual base salary at the highest rate (“+LJKHVW %DVH Salary) LQ HHFW DW DQ WLPH GXULQJ WKH 36 PRQWK SHULRG LPPHGLDWHO SUHFHGLQJ WKH WHUPLQDWLRQ GDWH (Cash Severance”). In addition, all equity incentive awards held by the executive will become fully vested and/or the restrictions shall lapse. If the executive timely and properly elects health continuation coverage under the Consolidated Omnibus Budget 5HFRQFLOLDWLRQ $FW RI 1985 RU RWKHU DSSOLFDEOH ODZ (&2%5$), WKH &RPSDQ VKDOO UHLPEXUVH WKH H[HFXWLYH IRU DQ DPRXQW equal to the amount of medical premium expenses paid for a similarly situated employee, determined as of the executive’s termination date. Following the expiration of the COBRA continuation coverage period, the Company shall permit the executive (including his spouse and dependents) to (A) continue to participate in the Company’s group health plan if permitted under such plan, (B) convert the Company’s group health plan to an individual policy, or (C) obtain other similar FRYHUDJH, LQ HDFK FDVH IRU XS WR DQ DGGLWLRQDO 12 PRQWKV, ZLWK H[HFXWLYH EHLQJ UHVSRQVLEOH IRU 100% RI DOO SUHPLXP FRVWV. 2021 Proxy Statement 47 Death ——13,959 13,959 Change in Control———— Termination without Cause/ Death ——23,385 21,385 Change in Control———— Termination without Cause/ NAME/EVENT CASH SEVERANCE ($)(1) ACCELERATED VESTING COMPANY-PAID

 

7HUPLQDWLRQnIRUn&DXVHe5HVLJQDWLRQnZLWKRXWn*RRGn5HDVRQ If the executive’s employment is terminated by the Company for cause, or if the executive terminates his employment other WKDQ IRU JRRG UHDVRQ, WKH H[HFXWLYH ZLOO UHFHLYH D OXPS VXP SDPHQW HTXDO WR KLV $FFUXHG %HQHWV. &KDQJHnLQn&RQWURO 7KH HPSORPHQW DJUHHPHQWV GR QRW SURYLGH EHQHWV VROHO XSRQ D FKDQJH LQ FRQWURO (DV GHQHG LQ WKH H[HFXWLYHV employment agreement). 7HUPLQDWLRQnZLWKRXWn&DXVHe5HVLJQDWLRQnIRUn*RRGn5HDVRQnLQnWKHn nPRQWKVnSULRUnWRnRUnWKHn 2nPRQWKVnIROORZLQJnDn&KDQJHnLQn&RQWURO If the executive’s employment was terminated by the Company without cause, or by the executive for good reason, during the SHULRG EHJLQQLQJ 6 PRQWKV SULRU WR D FKDQJH LQ FRQWURO DQG HQGLQJ 24 PRQWKV IROORZLQJ D FKDQJH LQ FRQWURO, WKH H[HFXWLYH ZLOO EH HQWLWOHG WR WKH VDPH EHQHWV GHVFULEHG DERYH XQGHU 7HUPLQDWLRQ ZLWKRXW &DXVH/5HVLJQDWLRQ IRU *RRG 5HDVRQ, H[FHSW WKDW WKH H[HFXWLYHV &DVK 6HYHUDQFH SDPHQW ZLOO HTXDO 1.5 WLPHV WKH +LJKHVW %DVH 6DODU. Q DGGLWLRQ, WKH SDPHQW RI EHQHWV ZLOO RFFXU 30 GDV IROORZLQJ WKH ODWHU RI WKH FKDQJH LQ FRQWURO RU WKH H[HFXWLYHV WHUPLQDWLRQ DQG WR WKH H[WHQW H[HFXWLYH LQFXUV a termination without cause or resigns for good reason prior to change in control, any payments received following the FKDQJH LQ FRQWURO ZLOO EH UHGXFHG GROODU IRU GROODU E WKH EHQHWV DOUHDG SDLG WR H[HFXWLYH LQ FRQQHFWLRQ ZLWK KLV WHUPLQDWLRQ. 'HDWK )ROORZLQJ WKH GHDWK RI WKH H[HFXWLYH, WKH &RPSDQ ZLOO SD WR KLV GHVLJQDWHG EHQHFLDU RU KLV HVWDWH D OXPS VXP SDPHQW HTXDO WR H[HFXWLYHV: (L) $FFUXHG %HQHWV; DQG (LL) 8QSDLG %RQXV. Q DGGLWLRQ, IRU WKH ORQJHU RI WKH PD[LPXP &2%5$ continuation coverage period required by law or 12 months, executive’s spouse and eligible dependents will continue to be eligible to receive medical coverage under the Company’s medical plans in accordance with the terms of the applicable plan documents; provided, that in order to receive such continued coverage at such rates, executive’s spouse and eligible dependents will be required to pay the applicable premiums to the plan provider, and the Company will reimburse such VSRXVH DQG HOLJLEOH GHSHQGHQWV, ZLWKLQ 60 GDV IROORZLQJ WKH GDWH VXFK PRQWKO SUHPLXP SDPHQW LV GXH, DQ DPRXQW HTXDO to the monthly COBRA premium payment, less applicable tax withholdings. 'LVDELOLW )ROORZLQJ WKH WHUPLQDWLRQ RI H[HFXWLYHV HPSORPHQW E UHDVRQ RI GLVDELOLW (DV GHQHG XQGHU H[HFXWLYHV HPSORPHQW DJUHHPHQW), WKH &RPSDQ ZLOO SD WR H[HFXWLYH D OXPS VXP SDPHQW HTXDO WR H[HFXWLYHV: (L) $FFUXHG %HQHWV; DQG (LL) Unpaid Bonus. 5HVWULFWHG 6WRFN $ZDUGV XQGHU WKH /73 $V GLVFORVHG DERYH, LQ 2017, RXU ERDUG DGRSWHG D SROLF UHTXLULQJ WKDW HDFK DZDUG DJUHHPHQW JRYHUQLQJ DQ DZDUG JUDQWHG XQGHU WKH /73 SURYLGH IRU GRXEOH-WULJJHU YHVWLQJ XSRQ D FKDQJH LQ FRQWURO. 7KH UHVWULFWHG VWRFN DZDUGV UHFHLYHG E 0HVVUV. McKinney and Brooks, per the terms of their employment agreements, may only be accelerated if the executive’s employment ZDV WHUPLQDWHG E WKH &RPSDQ ZLWKRXW FDXVH, RU E WKH H[HFXWLYH IRU JRRG UHDVRQ, GXULQJ WKH SHULRG EHJLQQLQJ 6 PRQWKV prior to a change in control and ending 24 months following a change in control. CEO PAY R ATIO $V UHTXLUHG E 6HFWLRQ 953(E) RI WKH 'RGG-)UDQN :DOO 6WUHHW 5HIRUP DQG &RQVXPHU 3URWHFWLRQ $FW RI 2012, DQG WHP 402(X) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of the Company’s employees and the annualized total compensation of Paul D. McKinney, our CEO, for 2020: Median Employee total annual compensation $ 120,245 7RWDO &RPSHQVDWLRQ RI &KLHI ([HFXWLYH 2FHU 3DXO '. 0F.LQQH $ 874,000 Ratio of CEO to Median Employee compensation 7.27 WR 1 48

 

To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee and our former CEO, we took the following steps: :H GHWHUPLQHG WKDW, DV RI 'HFHPEHU 31, 2020, RXU HPSORHH SRSXODWLRQ FRQVLVWHG RI 41 LQGLYLGXDOV ZLWK DOO RI WKHVH individuals located in the U.S. This population consisted of our full-time and part-time employees, as we do not have WHPSRUDU RU VHDVRQDO ZRUNHUV. :H VHOHFWHG 'HFHPEHU 31, 2020, DV RXU LGHQWLFDWLRQ GDWH IRU GHWHUPLQLQJ RXU PHGLDQ HPSORHH EHFDXVH LW HQDEOHG XV WR PDNH VXFK LGHQWLFDWLRQ LQ D UHDVRQDEO HFLHQW DQG HFRQRPLF PDQQHU. We used a consistently applied compensation measure to identify our median employee by comparing the amount of VDODU RU ZDJHV, ERQXVHV DQG UHVWULFWHG VWRFN DZDUGV JUDQWHG LQ 2020 DV UHHFWHG LQ RXU SDUROO UHFRUGV. 7R PDNH WKHP comparable, salaries for newly hired employees who had worked less than one year were annualized and the target incentive amount was applied to their total compensation measure. :H LGHQWLHG RXU PHGLDQ HPSORHH E FRQVLVWHQWO DSSOLQJ WKLV FRPSHQVDWLRQ PHDVXUH WR DOO RI RXU HPSORHHV LQFOXGHG in our analysis. Since all of our employees, including our CEO, are located in the U.S., we did not make any cost of living adjustments in identifying the median employee. $IWHU ZH LGHQWLHG RXU PHGLDQ HPSORHH, ZH FRPELQHG DOO RI WKH HOHPHQWV RI VXFK HPSORHHV FRPSHQVDWLRQ IRU the 2020 year in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $120,245. With respect to the annual total compensation of our CEO, we used annualized salary, bonus and restricted stock awards JUDQWHG DQG DOO RWKHU FRPSHQVDWLRQ IRU WKH 2020 VFDO HDU LQ DFFRUGDQFH ZLWK WKH UHTXLUHPHQWV RI WHP 402(F)(2)([) RI 5HJXODWLRQ 6-., UHVXOWLQJ LQ DQQXDO WRWDO FRPSHQVDWLRQ RI $874,000. DIRECTOR COMPENSATION )RU WKH HDU HQGHG 'HFHPEHU 31, 2020, GLUHFWRUV UHFHLYHG WKH IROORZLQJ IHHV: Stipend Non-management Director $3,000/PRQWK Management Director1 $2,000/month Committee Fees (per committee) $500/month Fee for telephonic or video conference participation in Board or Committee meeting $500/meeting Fee for in-person participation in Board or Committee meeting $1,000/meeting Stock Awards Determined Annually Compensation Philosophy The compensation of our non-employee directors is reviewed by the Compensation Committee and is approved by the %RDUG. :H XVH D FRPELQDWLRQ RI FDVK DQG VWRFN DZDUGV WR DWWUDFW DQG UHWDLQ TXDOLHG FDQGLGDWHV WR VHUYH RQ RXU %RDUG. Q GHWHUPLQLQJ GLUHFWRU FRPSHQVDWLRQ, ZH FRQVLGHU WKH UHVSRQVLELOLWLHV RI RXU GLUHFWRUV, WKH VLJQLFDQW DPRXQW RI WLPH WKH GLUHFWRUV VSHQG IXOOOLQJ WKHLU GXWLHV, DQG WKH FRPSHWLWLYH PDUNHW IRU VNLOOHG GLUHFWRUV. We seek to maximize alignment of incentives between the Board and stockholders by primarily using equity awards to FRPSHQVDWH GLUHFWRUV. :H EHOLHYH WKDW HTXLW DZDUGV WKDW YHVW RYHU D PXOWL-HDU SHULRG EHJLQQLQJ RQ WKH UVW DQQLYHUVDU RI the grant provide a strong incentive to the Board to preserve and promote stockholder value and directly connects director compensation to the Company stock performance. In this regard, a majority of a director’s compensation depends on whether the Company’s stock price maintains its value over the vesting period. Starting in 2020, we revised our form of director award DJUHHPHQW WR SURYLGH IRU D WKUHH-HDU YHVWLQJ SHULRG DV RSSRVHG WR D YH-HDU YHVWLQJ SHULRG, LQ RUGHU WR FRQIRUP WR FRPPRQ industry practices. 1Management Director fees are under review by the compensation consultant hired in 2021. 2021 Proxy Statement 49 COMPENSATION ELEMENT DECEMBER 31, 2020

 

 

Peer Review and Benchmarking The Compensation Committee reviews, evaluates, and benchmarks our director compensation practices against our peer companies in the oil and natural gas exploration and production industry. The Compensation Committee uses this peer comparison to inform themselves of industry practice and to help them structure the appropriate level and mix of compensation elements. This information is used only as a reference and not to establish compensation benchmarks, as Ring GRHV QRW EHQFKPDUN H[HFXWLYH FRPSHQVDWLRQ WR D VSHFLF SHUFHQWLOH ZLWKLQ LWV SHHU JURXS. Stipend We provide our management and non-management directors a monthly stipend in lieu of an annual retainer, a fee for participation in each Board or committee meeting, based on whether in person or not, and reimbursement of out-of-pocket FRVWV LQFXUUHG LQ DWWHQGLQJ %RDUG DQG FRPPLWWHH PHHWLQJV. :H EHOLHYH WKDW WKH PRQWKO VWLSHQG LV VXFLHQW WR FRYHU HDFK director’s costs associated with his or her service on the Board and respective committees. Equity Awards :H XVH HTXLW DZDUGV WR UHZDUG RXU GLUHFWRUV IRU VLJQLFDQW FRQWULEXWLRQV WR WKH VXFFHVVIXO LPSOHPHQWDWLRQ RI RXU EXVLQHVV objectives and strategy. Q 2020, HDFK RXWVLGH GLUHFWRU UHFHLYHG 130,000 VKDUHV RI UHVWULFWHG VWRFN SXUVXDQW WR WKH /73. 7KH UHVWULFWHG VWRFN JUDQWHG WR RXU GLUHFWRUV YHVWV RYHU D SHULRG RI WKUHH HDUV EHJLQQLQJ RQ WKH UVW DQQLYHUVDU RI WKH JUDQW. 2XU &RPSHQVDWLRQ &RPPLWWHH FRQVLGHUHG VHYHUDO IDFWRUV LQ GHWHUPLQLQJ WKH DSSURSULDWH DPRXQW RI UHVWULFWHG VWRFN JUDQWV XQGHU WKH /73 IRU WKH 2020 VFDO year including the following: 7KH /73 KDG D OLPLWHG VKDUH UHVHUYH UHPDLQLQJ WKDW QHHGHG WR EH FRQVHUYHG WR LQFHQWLYL]H 5LQJ HPSORHHV; Past equity awards to our non-executive directors; The recent award practices of other peer companies in the oil and gas industry; 7KUHH QRQ-H[HFXWLYH GLUHFWRUV KDG UHFHQWO MRLQHG WKH %RDUG DQG 130,000 VKDUHV ZHUH LQFOXGHG DV WKH ORQJ-WHUP LQFHQWLYH compensation portion of their compensation terms for 2020; and Desire to treat all directors equitably. Director Stock Ownership Guidelines In April 2021, our Board approved stock ownership guidelines for our non-employee directors. The director stock ownership guidelines create a strong link between our long-term success and the ultimate pay of our directors by requiring our non-employee directors to own 5 times the amount of their annual cash retainer and director fees. After becoming subject to the stock ownership guidelines, directors have three years to reach the stock ownership goal. Until a director meets the guideline, he or she must hold two-thirds of the net shares acquired upon the vesting of equity awards. Once the guidelines are met, restrictions on the sale of vested awards of the Company’s stock are limited to normal trading restrictions for insiders and Company policies. DIRECTOR COMPENSATION The following table summarizes the compensation earned by our directors (other than our directors who are also Named ([HFXWLYH 2FHUV), DV RI 'HFHPEHU 31, 2020. 'LUHFWRU FRPSHQVDWLRQ WR 0HVVUV. 0F.LQQH, +RPDQ DQG )RZOHU LV LQFOXGHG in “All Other Compensation” the Summary Compensation Table above and is therefore excluded from the Director Compensation Table. 50

 

EQUITY AWARDS ($)(1) ALL OTHER COMPENSATION ($)(2) TOTAL ($) PAID IN CASH ($) Clayton E. Woodrum(3) 53,500 96,200 — 149,700 Anthony B. Petrelli(3) 53,500 96,200 — 149,700 Regina Roesener(3) 47,000 96,200 — 143,200 7KRPDV /. 0LWFKHOO(3) 9,774 96,200 — 105,974 5LFKDUG (. +DUULV(3) 7,500 96,200 — 103,700 John A. Crum(3) 8,500 96,200 — 104,700 Stanley M. McCabe(3) 54,000 — — 54,000 /ORG 7. 5RFKIRUG(2)(3) — 180,000 207,000 (1)Amounts in this column represent the grant date fair value of restricted stock awards granted to the outside directors on December 15, 2020, calculated in accordance with FASB $6& 7RSLF 718, H[FOXGLQJ WKH HVWLPDWHG LPSDFW RI IRU IHLWXUHV UHODWHG WR VHU YLFH-EDVHG YHVWLQJ FRQGLWLRQV, DQG GR QRW UHSUHVHQW WKH DFWXDO YDOXH WKDW PD EH UHDOL]HG E GLUHFWRUV upon vesting or settlement of the awards. For a discussion of the assumptions and methodologies used in calculating the grant date fair value of the restricted stock awards, SOHDVH VHH 1RWH 13 WR WKH &RPSDQ V FRQVROLGDWHG QDQFLDO VWDWHPHQWV LQ WKH &RPSDQ V $QQXDO 5HSRU W RQ )RUP 10 -. IRU WKH VFDO HDU HQGHG 'HFHPEHU 31, 2020. (2)Mr. Rochford ser ved as an employee of the Company and Chairman of the Board until October 1, 2020, at which time he resigned from both positions. The amount listed under $OO 2WKHU &RPSHQVDWLRQ IRU 0U. 5RFKIRUG UHSUHVHQW WKH $135,000 LQ EDVH VDODU SDLG WR 0U. 5RFKIRUG SULRU WR KLV UHVLJQDWLRQ, DQG WKH $45,000 LQ VHYHUDQFH EHQHWV SDLG WR 0U. Rochford in a lump sum following his resignation. (3)7KH DJJUHJDWH QXPEHU RI VWRFN RSWLRQV DQG XQYHVWHG UHVWULFWHG VWRFN DZDUGV DV RI 'HFHPEHU 31, 2020 DUH DV IROORZV: Clay ton E. Woodrum 85,000 130,000 Anthony B. Petrelli 50,000 130,000 Regina Roesener — 130,000 7KRPDV /. 0LWFKHOO — 130,000 5LFKDUG (. +DUULV — 130,000 John A. Crum — 130,000 Stanley M. McCabe 100,000 — /ORG 7. 5RFKIRUG — — COMPENSATION COMMITTEE REPORT(1) Among the duties imposed on our Compensation Committee under its charter is the direct responsibility and authority to review and approve the Company’s goals and objectives relevant to the compensation of the Company’s Chief Executive 2FHU DQG RWKHU H[HFXWLYH RFHUV, WR HYDOXDWH WKH SHUIRUPDQFH RI VXFK RFHUV LQ DFFRUGDQFH ZLWK WKH SROLFLHV DQG principles established by the Compensation Committee and to determine and approve, either as a Committee, or (as GLUHFWHG E WKH %RDUG) ZLWK WKH RWKHU LQGHSHQGHQW %RDUG PHPEHUV (DV GHQHG E WKH 1<6( $PHULFDQ OLVWLQJ VWDQGDUGV), WKH FRPSHQVDWLRQ OHYHO RI WKH &KLHI ([HFXWLYH 2FHU DQG WKH RWKHU H[HFXWLYH RFHUV. $V RI 'HFHPEHU 31, 2020, WKH Compensation Committee was comprised of the three non-employee Directors named at the end of this report each of ZKRP LV DQ LQGHSHQGHQW GLUHFWRU DV GHQHG E WKH 1<6( $PHULFDQ OLVWLQJ VWDQGDUGV. The Compensation Committee has reviewed and discussed with management the disclosures contained in the Compensation Discussion and Analysis section of this Proxy Statement, as required by Item 402(b) of Regulation S-K. Based upon this review and our discussions, the Compensation Committee recommended to its Board of Directors that the Compensation Discussion and Analysis section be included in this Proxy Statement. &RPSHQVDWLRQ &RPPLWWHH RI WKH %RDUG RI 'LUHFWRUV (DV RI 'HFHPEHU 31, 2020) John A. Crum (Chair) Clayton E. Woodrum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roxy Statement 51 NAME OUTSTANDING STOCK OPTIONS UNVESTED RESTRICTED STOCK AWARDS NAME FEES EARNED OR

 

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION 1RQH RI RXU GLUHFWRUV ZKR VHUYHG DV PHPEHUV RI RXU &RPSHQVDWLRQ &RPPLWWHH DV RI 'HFHPEHU 31, 2020, QRU DQ RI WKH directors who currently serve as members of our Compensation Committee, is, or has at any time in the past been, an RFHU RU HPSORHH RI WKH &RPSDQ RU DQ RI LWV VXEVLGLDULHV. 1RQH RI RXU H[HFXWLYH RFHUV VHUYHV, RU KDV VHUYHG, GXULQJ WKH ODVW FRPSOHWHG VFDO HDU, RQ WKH FRPSHQVDWLRQ FRPPLWWHH RU ERDUG RI GLUHFWRUV RI DQ RWKHU FRPSDQ WKDW KDV RQH RU PRUH H[HFXWLYH RFHUV VHUYLQJ RQ RXU &RPSHQVDWLRQ Committee or Board. TR ANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS Certain Relationships and Related Transactions 7KH RFH VSDFH OHDVHG E WKH &RPSDQ LQ 7XOVD, 2NODKRPD, LV RZQHG E $UHQDFR, //&, D FRPSDQ WKDW LV RZQHG E 0U. Rochford, former Chairman of the Board, and Mr. McCabe, a former director of the Company. During the years ended 'HFHPEHU 31, 2018 WKURXJK 'HFHPEHU 31, 2020, WKH &RPSDQ SDLG DQ DJJUHJDWH RI $180,000 WR $UHQDFR, //&. The Audit Committee reviews any related party transactions. Annually, each Board member is required to submit an QGHSHQGHQFH &HUWLFDWH, GLVFORVLQJ DQ DOLDWLRQV RU UHODWLRQVKLSV IRU HYDOXDWLRQ DV SRVVLEOH UHODWHG SDUW WUDQVDFWLRQV. 5HYLHZ, $SSURYDO RU 5DWLFDWLRQ RI 7UDQVDFWLRQV ZLWK 5HODWHG 3DUWLHV The Board reviews and approves all relationships and transactions in which it and its directors, director nominees and H[HFXWLYH RFHUV DQG WKHLU LPPHGLDWH IDPLO PHPEHUV, DV ZHOO DV KROGHUV RI PRUH WKDQ 5% RI DQ FODVV RI LWV YRWLQJ securities and their family members, have a direct or indirect material interest. In approving or rejecting such proposed relationships and transactions, the Board shall consider the relevant facts and circumstances available and deemed relevant to this determination. In each case, the standard applied in approving the transaction is the best interests of the &RPSDQ ZLWKRXW UHJDUG WR WKH LQWHUHVWV RI WKH LQGLYLGXDO RFHU RU GLUHFWRU LQYROYHG LQ WKH WUDQVDFWLRQ. 7KHVH SURFHGXUHV IRU UHYLHZLQJ DQG DSSURYLQJ FRQLFW RI LQWHUHVW WUDQVDFWLRQV DUH EDVHG RQ WKH &RPSDQV SDVW SUDFWLFH DQG DUH QRW contained in any written policy. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information furnished by current management and others, concerning the ownership RI RXU &RPPRQ 6WRFN E (L) HDFK SHUVRQ ZKR LV NQRZQ WR XV WR EH WKH EHQHFLDO RZQHU RI PRUH WKDQ YH SHUFHQW (5%) RI our Common Stock, without regard to any limitations on conversion or exercise of convertible securities or warrants; (ii) DOO GLUHFWRUV DQG 1DPHG ([HFXWLYH 2FHUV; DQG (LLL) RXU GLUHFWRUV DQG H[HFXWLYH RFHUV DV D JURXS. 7KH PDLOLQJ DGGUHVV for each of the persons indicated in the table below is our corporate headquarters. The percentage ownership is based on shares outstanding as of April 12, 2021. %HQHFLDO RZQHUVKLS LV GHWHUPLQHG XQGHU WKH UXOHV RI WKH 6(&. Q JHQHUDO, WKHVH UXOHV DWWULEXWH EHQHFLDO RZQHUVKLS RI securities to persons who possess sole or shared voting power and/or investment power with respect to those securities DQG LQFOXGHV, DPRQJ RWKHU WKLQJV, VHFXULWLHV WKDW DQ LQGLYLGXDO KDV WKH ULJKW WR DFTXLUH ZLWKLQ 60 GDV. 8QOHVV RWKHUZLVH LQGLFDWHG, WKH VWRFNKROGHUV LGHQWLHG LQ WKH IROORZLQJ WDEOH KDYH VROH YRWLQJ DQG LQYHVWPHQW SRZHU ZLWK UHVSHFW WR DOO VKDUHV VKRZQ DV EHQHFLDOO RZQHG E WKHP. 52

 

SHARES OF COMMON STOCK BENEFICIALLY OWNED 71,400(1) Paul D. McKinney * .HOO +RPDQ(2) 309,041 * Travis T. Thomas — * William R. Broaddrick(3) 161,360(4) * Stephen D. Brooks — * Marinos Baghdati — * Alexander Dyes — * David A. Fowler(5) 294,100 * Daniel D. Wilson(6) 181,200 * 236,048(7) Clayton E. Woodrum * 311,200(8) Anthony B. Petrelli * 81,600(9) Regina Roesener * John A. Crum — * 5LFKDUG (. +DUULV — * 7KRPDV /. 0LWFKHOO — * 1,645,949(10) $OO GLUHFWRUV DQG H[HFXWLYH RFHUV DV D JURXS (15 SHUVRQV) 1.3% 'U. 6LPRQ *. .XNHV *URXS(11) 6,607,680 5.1% William R. Kruse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our President are not known by us or reported in the table. (6)0U. :LOVRQ VHU YHG DV RXU ([HFXWLYH 9LFH 3UHVLGHQW XQWLO 'HFHPEHU 31, 2020. 2SHQ PDUNHW SXUFKDVHV RU VDOHV, LI DQ, E 0U. :LOVRQ RI RXU FRPPRQ VWRFN VLQFH WKH GDWH WKDW KH ceased ser ving as our President are not known by us or reported in the table. (7)QFOXGHV 85,000 VKDUHV LVVXDEOH XSRQ WKH H[HUFLVH RI VWRFN RSWLRQV WKDW DUH FXUUHQWO H[HUFLVDEOH. (8)Includes 50,000 shares issuable upon the exercise of stock options that are currently exercisable. (9)QFOXGHV 8,000 VKDUHV RI FRPPRQ VWRFN KHOG E (XJHQH 1HLGLJHU /LIH QVXUDQFH 7UXVW. 'RHV QRW LQFOXGH 850 VKDUHV RI FRPPRQ VWRFN KHOG DV FXVWRGLDQ IRU PLQRU-VRQ EXW KDV QR SHFXQLDU LQWHUHVW, RU 850 VKDUHV RI FRPPRQ VWRFN KHOG DV FXVWRGLDQ EXW KDV QR SHFXQLDU LQWHUHVW. 0V. 5RHVHQHU GLVFODLPV EHQHFLDO RZQHUVKLS RI VXFK VKDUHV RI FRPPRQ VWRFN. (10)QFOXGHV 195,000 VKDUHV LVVXDEOH XSRQ WKH H[HUFLVH RI VWRFN RSWLRQV WKDW DUH FXUUHQWO H[HUFLVDEOH. $OVR LQFOXGHV 35,700 FRPPRQ VWRFN ZDUUDQWV WR SXUFKDVH VKDUHV RI FRPPRQ VWRFN RQ D RQH-WR-RQH EDVLV DW DQ H[HUFLVH SULFH RI $0.80 SHU VKDUH DQG H[SLUH RQ 2FWREHU 29, 2025. (11)%DVHG RQ D 6FKHGXOH 13'/$ OHG ZLWK WKH 6(& RQ $SULO 1, 2021 UHSRU WLQJ VKDUHV RI &RPPRQ 6WRFN EHQHFLDOO RZQHG E 0U. 6LPRQ *. .XNHV DQG 0U. -. 'RXJODV 6FKLFN. 'U. .XNHV UHSRU WV VROH YRWLQJ DQG GLVSRVLWLYH SRZHU RYHU 6,600,180 VKDUHV DQG 0U. 6FKLFN UHSRU WV VROH YRWLQJ DQG GLVSRVLWLYH SRZHU RYHU 7,500 VKDUHV. 7KH DGGUHVV RI WKH UHSRU WLQJ SHUVRQ LV 575 1. 'DLU $VKIRUG, (QHUJ &HQWHU , 6XLWH 210, +RXVWRQ, 7H[DV 77079. (12)%DVHG RQ D 6FKHGXOH 13*/$ OHG ZLWK WKH 6(& RQ )HEUXDU 9, 2021 UHSRU WLQJ VKDUHV RI &RPPRQ 6WRFN EHQHFLDOO RZQHG E :LOOLDP 5. .UXVH DQG 'HERUDK /. .UXVH. 0U. .UXVH UHSRU WV VROH YRWLQJ DQG GLVSRVLWLYH SRZHU RYHU 1,014,300 VKDUHV. 0U. DQG 0UV. .UXVH UHSRU W VKDUHG YRWLQJ DQG GLVSRVLWLYH SRZHU RYHU 9,036,382 VKDUHV LQ DFFRXQWV DV MRLQW WHQDQWV ZLWK ULJKW RI VXU YLYRUVKLS. 0U. .UXVH DOVR KDV 1,000,000 FRPPRQ VWRFN ZDUUDQWV WR SXUFKDVH VKDUHV RI FRPPRQ VWRFN RQ D RQH-WR-RQH EDVLV DW DQ H[HUFLVH SULFH RI $0.80 SHU VKDUH DQG H[SLUH RQ 2FWREHU 29, 2025. 7KH DGGUHVV RI WKH UHSRU WLQJ SHUVRQ LV 1340 6. 0DLQ 6WUHHW, 6XLWH 300, *UDSHYLQH 7H[DV, 76051. (13)%DVHG RQ WKH 6FKHGXOH 13*/$ OHG ZLWK WKH 6(& RQ )HEUXDU 2, 2021 UHSRU WLQJ VKDUHV RI &RPPRQ 6WRFN EHQHFLDOO RZQHG E (PSHU $VVHW 0DQDJHPHQW, /3 ((PSHU   ), 5DQ 0. /DQH DQG 0DU WLQ '. +RH, UHSRU WLQJ DV D JURXS. (DFK RI (PSHU , 0U. /DQH DQG 0U. +RH KDYH VKDUHG YRWLQJ SRZHU DQG VKDUHV GLVSRVLWLYH SRZHU RYHU 398,077 VKDUHV RI &RPPRQ 6WRFN, 13,428,500 VKDUHV RI &RPPRQ 6WRFN LVVXDEOH XSRQ H[HUFLVH RI WKH 3UH-)XQGHG :DUUDQWV DQG 21,428,500 VKDUHV RI &RPPRQ 6WRFN LVVXDEOH XSRQ H[HUFLVH RI :DUUDQWV. 7KH address of the reporting person is 1Rockefeller Plaza, Suite 1205, New York, New York, 10020. 2021 Proxy Statement 53 % Stockholders or Greater Stockholders (RWKHU WKDQ GLUHFWRUV DQG H[HFXWLYH RFHUV) NAME OF BENEFICIAL OWNER NUMBER APPROXIMATE PERCENT 1DPHG ([HFXWLYH 2FHUV DQG 'LUHFWRUV

 

Changes in Control There are no arrangements known to us, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of the Company. Securities Authorized for Issuance Under Equity Compensation Plans 7KH IROORZLQJ WDEOH VHWV IRUWK LQIRUPDWLRQ FRQFHUQLQJ RXU H[HFXWLYH VWRFN FRPSHQVDWLRQ SODQV DV RI 'HFHPEHU 31, 2020. Equity compensation plans approved by security holders 2,132,297 465,500 $3.26 341,155 Equity compensation plans not approved by security holders — — — — Total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reporting one transaction, one Form 4 for Mr. Petrelli reporting one transaction and one Form 4 for Ms. Roesener reporting one transaction. 54 NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER NUMBER OF SECURITIES TOWEIGHTED-AVERAGE COMPENSATION PLANS RESTRICTED STOCK GRANTED BE ISSUED UPON EXERCISE OF EXERCISE PRICE OF(EXCLUDING SECURITIES IN THAT HAS NOT VESTED OUTSTANDING OPTIONS OUTSTANDING OPTIONS COLUMN (a))

 

 

In accordance with Section 14A of the Exchange Act, we are providing our stockholders the opportunity to cast a non-ELQGLQJ, DGYLVRU YRWH RQ WKH FRPSHQVDWLRQ RI RXU 1DPHG ([HFXWLYH 2 FHUV, DV GLVFORVHG LQ WKLV SUR[ VWDWHPHQW. 7KH stockholder vote on executive compensation is an advisory vote only, and it is not binding on the Company, the Board, or the Compensation Committee. Although the vote is non-binding, the Compensation Committee and the Board value the opinions of the Company’s stockholders and will consider the outcome of the vote when making future compensation decisions. As described under the heading “Compensation Discussion and Analysis,” our compensation policies and programs support our key business objectives of creating value for, and promoting the interests of, our stockholders. In order to align the LQWHUHVWV RI RXU 1DPHG ([HFXWLYH 2 FHUV ZLWK WKRVH RI RXU VWRFNKROGHUV, ZH EHOLHYH WKDW HDFK 1DPHG ([HFXWLYH 2 FHUV total annual cash compensation should vary with the performance of the Company and that long-term incentives awarded WR 1DPHG ([HFXWLYH 2 FHUV VKRXOG EH DOLJQHG ZLWK WKH LQWHUHVWV RI WKH &RPSDQV VWRFNKROGHUV. 7KH &RPSDQ VWULYHV WR attract, motivate, and retain high-quality executives who are willing to accept a lower base compensation in cash and be rewarded with equity awards based on performance and the achievement of the goals and objectives of the Company, thereby allowing the Company to better align the interests of its executives with its stockholders. 6SHFL FDOO, WKH SULPDU REMHFWLYHV RI RXU FRPSHQVDWLRQ SROLFLHV DUH DV IROORZV: $OLJQ WKH FRPSHQVDWLRQ RI RXU 1DPHG ([HFXWLYH 2 FHUV DQG RWKHU PDQDJHUV ZLWK RXU VWRFNKROGHUV LQWHUHVWV DQG PRWLYDWH RXU H[HFXWLYH R FHUV WR PHHW WKH &RPSDQV REMHFWLYHV; Pay for performance, taking into consideration both the performance of the Company and the individual in determining executive compensation; 3URPRWH 1DPHG ([HFXWLYH 2 FHU DFFRXQWDELOLW E FRPSHQVDWLQJ 1DPHG ([HFXWLYH 2 FHUV IRU WKHLU FRQWULEXWLRQV WR WKH achievement of the Company’s objectives (while discouraging excessive risk-taking not in the interest of long-term value for our stockholders); and $WWUDFW DQG UHWDLQ KLJKO TXDOL HG H[HFXWLYHV ZLWK VLJQL FDQW LQGXVWU NQRZOHGJH DQG H[SHULHQFH E SURYLGLQJ WKHP ZLWK D IDLU FRPSHQVDWLRQ SURJUDP WKDW SURYLGHV  QDQFLDO VWDELOLW DQG LQFHQWLYL]HV JURZWK LQ VWRFNKROGHU YDOXH. 7KH YRWH RQ WKLV UHVROXWLRQ LV QRW LQWHQGHG WR DGGUHVV DQ VSHFL F HOHPHQW RI FRPSHQVDWLRQ, EXW UDWKHU UHODWHV WR WKH RYHUDOO FRPSHQVDWLRQ RI RXU 1DPHG ([HFXWLYH 2 FHUV, DV GHVFULEHG LQ WKLV SUR[ VWDWHPHQW LQ DFFRUGDQFH ZLWK WKH 6(&V FRPSHQVDWLRQ GLVFORVXUH UXOHV. 7R WKH H[WHQW WKHUH LV DQ VLJQL FDQW YRWH DJDLQVW RXU 1DPHG ([HFXWLYH 2 FHU compensation as disclosed in this proxy statement, the Board and the Compensation Committee will evaluate whether any actions are necessary to address the concerns of our stockholders. BOARD RECOMMENDATION ON PROPOSAL THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS AS SET FORTH IN THIS PROXY STATEMENT. 2021 Proxy Statement 55 PROPOSAL 2: NON-BINDING, ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

 

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it believes that such a change would be in the best interest of our stockholders and us. 5HSUHVHQWDWLYHV IURP *UDQW 7KRUQWRQ //3 DUH QRW H[SHFWHG WR EH SUHVHQW DW WKH $QQXDO 0HHWLQJ. I SUHVHQW, WKHVH representatives will have the opportunity to make a statement if they desire to do so and would be available to respond to DSSURSULDWH TXHVWLRQV. (LGH %DLOO //3 (Eide Bailly) ZDV WKH &RPSDQV LQGHSHQGHQW UHJLVWHUHG SXEOLF DFFRXQWLQJ UP IRU WKH VFDO HDUV HQGHG 'HFHPEHU 31, 2020 DQG 2019. 5HSUHVHQWDWLYHV DUH QRW H[SHFWHG WR EH SUHVHQW DW WKH $QQXDO 0HHWLQJ. Services provided are described in “Fees and Independence.” Former Independent Registered Public Accounting Firm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scope or procedure, which, if not resolved to Eide Bailly’s satisfaction, would have caused Eide Bailly to make reference WKHUHWR LQ LWV UHSRUWV, DQG (2) QR UHSRUWDEOH HYHQWV ZLWKLQ WKH PHDQLQJ RI WHP 304(D)(1)(Y) RI 5HJXODWLRQ 6-.. 7KH &RPSDQ SURYLGHG (LGH %DLOO ZLWK D FRS RI LWV &XUUHQW 5HSRUW RQ )RUP 8-. DQG UHTXHVWHG (LGH %DLOO WR IXUQLVK WKH Company with a letter addressed to the SEC stating whether or not it agrees with the statements made by the Company KHUHLQ DQG LI QRW, VWDWLQJ WKH UHVSHFWV LQ ZKLFK LW GRHV QRW DJUHH. $ FRS RI (LGH %DLOOV OHWWHU, GDWHG 0DUFK 26, 2021, LV OHG DV ([KLELW 16.1 WR WKH &RPSDQV &XUUHQW 5HSRUW RQ )RUP 8-. OHG ZLWK WKH 6(& RQ 0DUFK 26, 2021. PRINCIPAL INDEPENDENT PUBLIC ACCOUNTING FEES AND SERVICES PAID IN 2020 AND 2019 7KH $XGLW &RPPLWWHH VHOHFWHG (LGH %DLOO DV LWV LQGHSHQGHQW UHJLVWHUHG SXEOLF DFFRXQWLQJ UP IRU WKH VFDO HDUV HQGHG 'HFHPEHU 31, 2020 DQG 2019. 7KH $XGLW &RPPLWWHH KDV DGRSWHG D SROLF WKDW UHTXLUHV DGYDQFH DSSURYDO RI DOO DXGLW, DXGLW-related, tax services, and other services performed by the independent auditor. Fees and Independence $XGLW )HHV. (LGH %DLOO ELOOHG WKH &RPSDQ DQ DJJUHJDWH RI $216,000 IRU SURIHVVLRQDO VHUYLFHV UHQGHUHG IRU WKH UHYLHZ RI WKH &RPSDQV QDQFLDO VWDWHPHQWV LQFOXGHG LQ LWV )RUP 10-4V IRU 2019 DQG WKH DXGLW RI WKH &RPSDQV QDQFLDO VWDWHPHQWV IRU WKH HDU HQGHG 'HFHPEHU 31, 2019 DQG DQ DJJUHJDWH RI $235,000 IRU SURIHVVLRQDO VHUYLFHV UHQGHUHG IRU WKH UHYLHZ RI WKH &RPSDQV QDQFLDO VWDWHPHQWV LQFOXGHG LQ LWV )RUP 10-4V IRU 2020 DQG WKH DXGLW RI WKH &RPSDQV QDQFLDO VWDWHPHQWV IRU WKH HDU HQGHG 'HFHPEHU 31, 2020. 56 PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP

 

$XGLW 5HODWHG )HHV. (LGH %DLOO ELOOHG WKH &RPSDQ $42,000 DQG $32,000 IRU WKH HDUV HQGHG 'HFHPEHU 31, 2019 DQG 2020 IRU VHUYLFHV UHODWHG WR WKH &RPSDQV OLQJ RI UHJLVWUDWLRQ VWDWHPHQW, )RUP 8-. UHODWHG WR DQ DFTXLVLWLRQ DQG QDQFLDO statements, and a comfort letter for the issuance. 7D[ )HHV. Eide Bailly billed the Company $12,000 and $12,000, respectively, for professional services rendered for tax FRPSOLDQFH, WD[ DGYLFH DQG WD[ SODQQLQJ IRU WKH HDUV HQGHG 'HFHPEHU 31, 2019 DQG 2020. $OO 2WKHU )HHV. No other fees were billed by Eide Bailly to the Company during 2019 and 2020. The Audit Committee discussed with Eide Bailly the matters required to be discussed pursuant to the applicable PCAOB Auditing Standards. The Audit Committee has received and reviewed the written disclosures and the letter from Eide Bailly required by the PCAOB regarding Eide Bailly’s communications with the Audit Committee concerning independence, and has discussed with Eide Bailly its independence. The Audit Committee determined that the non-audit services provided to the Company by Eide Bailly are compatible with maintaining Eide Bailly’s independence. Pre-Approval Policy The policy of the Audit Committee and our Board, as applicable, is to pre-approve all services by our independent registered SXEOLF DFFRXQWLQJ UP. 7KH $XGLW &RPPLWWHH KDV DGRSWHG D SUH-DSSURYDO SROLF WKDW SURYLGHV JXLGHOLQHV IRU WKH DXGLW, DXGLW-UHODWHG, WD[, DQG RWKHU QRQ-DXGLW VHUYLFHV WKDW PD EH SURYLGHG E RXU LQGHSHQGHQW UHJLVWHUHG SXEOLF DFFRXQWLQJ UP. 7KH SROLF (D) LGHQWLHV WKH JXLGLQJ SULQFLSOHV WKDW PXVW EH FRQVLGHUHG E WKH $XGLW &RPPLWWHH LQ DSSURYLQJ VHUYLFHV WR HQVXUH WKDW WKH LQGHSHQGHQW UHJLVWHUHG SXEOLF DFFRXQWLQJ UPV LQGHSHQGHQFH LV QRW LPSDLUHG; (E) GHVFULEHV WKH DXGLW, DXGLW-UHODWHG, WD[ and other services that may be provided and the non-audit services that are prohibited; and (c) sets forth the pre-approval requirements for all permitted services. Under the policy, all services to be provided by our independent registered public DFFRXQWLQJ UP PXVW EH SUH-DSSURYHG E WKH $XGLW &RPPLWWHH; WKH &RPSDQ REWDLQHG DOO UHTXLUHG DSSURYDOV GXULQJ 2020. BOARD RECOMMENDATION ON PROPOSAL THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS RING ENERGY, INC.’S INDEPENDENT AUDITOR FOR THE 2021 FISCAL YEAR. THE MANAGEMENT PROXY HOLDER WILL VOTE ALL PROPERLY SUBMITTED PROXIES FOR RATIFICATION UNLESS PROPERLY INSTRUCTED OTHERWISE. 2021 Proxy Statement 57

 

AUDIT COMMITTEE REPORT The Audit Committee is comprised of four independent, non-employee directors. The Board has determined that the members of the Audit Committee satisfy the NYSE American listing standards. The Board has determined that one of the PHPEHUV RI WKH $XGLW &RPPLWWHH, 0U. :RRGUXP, LV DQ DXGLW FRPPLWWHH QDQFLDO H[SHUW DV GHQHG E WKH UXOHV RI WKH 6(&. The Audit Committee’s responsibilities are set forth in the Audit Committee Charter, as may be amended from time to time by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function. This is a report on the Audit Committee’s activities relating to 2020. Review of Audited Financial Statements with Management 7KH $XGLW &RPPLWWHH KDV UHYLHZHG DQG GLVFXVVHG WKH &RPSDQV DXGLWHG QDQFLDO VWDWHPHQWV DQG PDQDJHPHQWV GLVFXVVLRQ DQG DQDOVLV RI WKH &RPSDQV QDQFLDO FRQGLWLRQ DQG UHVXOWV RI RSHUDWLRQ ZLWK PDQDJHPHQW RI WKH &RPSDQ IRU WKH VFDO HDU HQGHG 'HFHPEHU 31, 2020. 7KH PHPEHUV RI WKH $XGLW &RPPLWWHH UHO, ZLWKRXW LQGHSHQGHQW YHULFDWLRQ, RQ LQIRUPDWLRQ SURYLGHG WR WKHP DQG RQ WKH representations made by Company management and the independent auditor. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that management has maintained and applied appropriate accounting DQG QDQFLDO SULQFLSOHV RU DSSURSULDWH LQWHUQDO FRQWUROV DQG SURFHGXUHV, WKDW WKH &RPSDQV QDQFLDO VWDWHPHQWV DUH SUHVHQWHG LQ DFFRUGDQFH ZLWK JHQHUDOO DFFHSWHG DFFRXQWLQJ SULQFLSOHV, WKDW WKH DXGLW RI WKH &RPSDQV QDQFLDO VWDWHPHQWV has been carried out in accordance with generally accepted auditing standards, or that the independent registered public DFFRXQWLQJ UP LV LQ IDFW LQGHSHQGHQW. Review of Financial Statements and Other Matters with Independent Registered Public Accounting Firm 7KH $XGLW &RPPLWWHH GLVFXVVHG ZLWK (LGH %DLOO, WKH &RPSDQV LQGHSHQGHQW UHJLVWHUHG SXEOLF DFFRXQWLQJ UP IRU WKH VFDO HDU HQGHG 'HFHPEHU 31, 2020, WKH PDWWHUV UHTXLUHG WR EH GLVFXVVHG E WKH DSSOLFDEOH UHTXLUHPHQWV RI WKH 3XEOLF &RPSDQ Accounting Oversight Board and the SEC. The Audit Committee has received and reviewed the written disclosures and the OHWWHU IURP (LGH %DLOO UHTXLUHG E DSSOLFDEOH 3XEOLF &RPSDQ $FFRXQWLQJ 2YHUVLJKW %RDUG UHTXLUHPHQWV UHJDUGLQJ WKH UPV communications with the Audit Committee concerning independence and has discussed with Eide Bailly the independent UHJLVWHUHG SXEOLF DFFRXQWLQJ UPV LQGHSHQGHQFH. 7KHVH GLVFXVVLRQV LQFOXGHG D UHYLHZ RI DOO DXGLW DQG QRQ-DXGLW VHUYLFHV (including tax services) provided by Eide Bailly to the Company. The Audit Committee has also considered whether the SURYLVLRQ RI QRQ-DXGLW VHUYLFHV WR WKH &RPSDQ E (LGH %DLOO //3 LV FRPSDWLEOH ZLWK PDLQWDLQLQJ LWV LQGHSHQGHQFH. Recommendation that Financial Statements be Included in the Annual Report Based on the review and discussions referred to above, and subject to the limitations on the role and responsibilities of the Audit Committee referred to below and in the Audit Committee Charter, the Audit Committee recommended to the Board WKDW WKH DXGLWHG QDQFLDO VWDWHPHQWV UHIHUUHG WR DERYH EH LQFOXGHG LQ WKH &RPSDQV $QQXDO 5HSRUW RQ )RUP 10-. IRU WKH HDU HQGHG 'HFHPEHU 31, 2020, IRU OLQJ ZLWK WKH 6(&. 7+( $8'7 &20077((, Clayton E. Woodrum (Chairman) Anthony B. Petrelli Regina Roesener 7KRPDV /. 0LWFKHOO 58

 

We are asking our stockholders to approve the new Ring Energy, Inc. 2021 Omnibus Incentive Plan (the “2021 Plan”). On $SULO 7, 2021, WKH %RDUG DSSURYHG WKH 2021 3ODQ, VXEMHFW WR DSSURYDO E RXU VWRFNKROGHUV DW WKH $QQXDO 0HHWLQJ. 7KH adoption of the 2021 Plan is necessary to allow us to continue to make our customary annual long-term incentive awards DQG RWKHU HTXLW DZDUGV WR DWWUDFW, UHWDLQ DQG PRWLYDWH RXU RFHUV, NH HPSORHHV DQG GLUHFWRUV DQG WR FRQWLQXH WR OLQN the interests of participants to those of the Company’s stockholders. If approved by our stockholders, the 2021 Plan would UHSODFH WKH 5LQJ (QHUJ, QF. /RQJ-7HUP QFHQWLYH 3ODQ (WKH 3ULRU 3ODQ) IRU DOO IXWXUH HTXLW JUDQWV, DQG ZH ZRXOG QR ORQJHU LVVXH DZDUGV XQGHU WKH 3ULRU 3ODQ. $ZDUGV SUHYLRXVO JUDQWHG XQGHU WKH 3ULRU 3ODQ ZRXOG EH XQDHFWHG E WKH DGRSWLRQ of the 2021 Plan, and they would remain outstanding under the terms pursuant to which they were previously granted. If RXU VWRFNKROGHUV GR QRW DSSURYH WKH 2021 3ODQ, WKH 3ULRU 3ODQ ZLOO UHPDLQ LQ HHFW LQ LWV FXUUHQW IRUP XQWLO WKH HDUOLHU RI LWV H[SLUDWLRQ RQ -XQH 27, 2022, LWV WHUPLQDWLRQ E WKH %RDUG RU WKH GDWH RQ ZKLFK WKH UHPDLQLQJ VKDUHV DYDLODEOH IRU LVVXDQFH thereunder are depleted, following which date we will no longer have an equity-based compensation plan pursuant to which we may issue long-term incentive awards. KEY ASPECTS OF THE 2021 PLAN 3URSRVHG 6KDUH 5HVHUYH: The number of shares of our common stock that will be reserved for issuance pursuant to the 2021 3ODQ ZLOO QRW H[FHHG WKH VXP RI 9,900,000 VKDUHV, ZKLFK LQFOXGHV 341,155 VKDUHV WKDW are reserved but unissued under the Prior Plan, and any shares originally reserved under the 3ULRU 3ODQ WKDW, DIWHU 0D 25, 2021, DUH IRUIHLWHG, WHUPLQDWHG, ODSVHG, RU VDWLVHG WKHUHXQGHU LQ FDVK RU SURSHUW RWKHU WKDQ VKDUHV. $V RI $SULO 13, 2021, WKHUH ZHUH 2,504,567 VKDUHV VXEMHFW to outstanding equity awards under the Prior Plan. The closing price of a share of our common VWRFN RQ $SULO 13, 2021, 2021 UHSRUWHG RQ WKH 1HZ <RUN 6WRFN ([FKDQJH (WKH 1<6() ZDV $2.11. 0LQLPXP 9HVWLQJ: The 2021 Plan includes a minimum vesting period for all awards granted thereunder of one year from the date of grant, subject to certain limited exceptions (including an exception for up WR 5% RI WKH VKDUHV UHVHUYHG IRU LVVXDQFH XQGHU WKH 2021 3ODQ). 1R /LEHUDO 6KDUH 5HFFOLQJ: Under the 2021 Plan, any shares withheld from any award to cover taxes or any exercise price, and any shares tendered to exercise outstanding options or repurchased on the open market using exercise price proceeds, will not be again available for issuance thereunder. 1R 'LYLGHQGV RU 'LYLGHQG (TXLYDOHQWV 3DLG RQ 8QYHVWHG $ZDUGV: To the extent that any award under the 2021 Plan contains a right to receive dividends or dividend equivalents while such award remains unvested, such dividends or dividend equivalents will be accumulated and paid once and to the extent that the underlying award vests. 1RQ-(PSORHH 'LUHFWRU /LPLW: 7KH 2021 3ODQ FRQWDLQV DQ DQQXDO OLPLW RI $750,000 RQ WKH FDVK DQG HTXLW FRPSHQVDWLRQ WKDW PD EH SDLG RU DZDUGHG WR D QRQ-HPSORHH GLUHFWRU LQ DQ VFDO HDU ZLWK UHVSHFW WR KLV RU KHU service as a non-employee director. 1R 5HSULFLQJ RI 2SWLRQV RU 6WRFN $SSUHFLDWLRQ 5LJKWV: The 2021 Plan prohibits the repricing of stock options and stock appreciation rights and cash buyouts of underwater options and stock appreciation rights without stockholder approval 3ODQ 7HUP: 7KH 2021 3ODQ ZLOO H[SLUH RQ 0D 25, 2031, XQOHVV HDUOLHU WHUPLQDWHG E WKH %RDUG RU WKH Compensation Committee of the Board (the “Committee”), but awards granted prior to such date may extend beyond that date. &ODZEDFN 3URYLVLRQV: Awards granted under the 2021 Plan are subject to any compensation recoupment policy adopted by the Company from time to time. 2021 Proxy Statement 59 PROPOSAL 4: APPROVAL OF RING ENERGY, INC. 2021 OMNIBUS INCENTIVE PLAN

 

 

DESCRIPTION OF THE 2021 PLAN 7KH SULQFLSDO SXUSRVHV RI WKH 2021 3ODQ DUH WR: (D) HQFRXUDJH SURWDELOLW DQG JURZWK RI WKH &RPSDQ WKURXJK VKRUW-term and long-term incentives that are consistent with the Company’s objectives; (b) to give participants an incentive for excellence in individual performance; (c) to promote teamwork among participants; and (d) to give the Company a VLJQLFDQW DGYDQWDJH LQ DWWUDFWLQJ DQG UHWDLQLQJ NH HPSORHHV, GLUHFWRUV, DQG FRQVXOWDQWV. 7R DFFRPSOLVK VXFK SXUSRVHV, the 2021 Plan provides that the Company may grant options, stock appreciation rights, restricted shares, restricted stock units, performance-based awards (including performance-based restricted shares and restricted stock units), other share-based awards, other cash-based awards, or any combination of the foregoing. When considering new grants of share-based or option-based awards, we intend to take into account previous grants of such awards. A summary of the material SURYLVLRQV RI WKH 2021 3ODQ LV VHW IRUWK EHORZ. 7KLV VXPPDU LV TXDOLHG E UHIHUHQFH WR WKH IXOO WH[W RI WKH 2021 3ODQ, ZKLFK has been included as Appendix [A] to this proxy statement and is incorporated by reference herein. $GPLQLVWUDWLRQ. The 2021 Plan is administered by the Committee (referred to below as the plan administrator). The plan administrator has the power to determine the terms of the awards granted under the 2021 Plan, including the exercise price, the number of shares subject to each award, and the exercisability of the awards. The plan administrator also has full power to determine the persons to whom and the time or times at which awards will be made and to make all other determinations and take all other actions advisable for the administration of the 2021 Plan. (OLJLEOH 3DUWLFLSDQWV. Certain employees, non-employee directors and consultants are eligible to be granted awards under the 2021 3ODQ, RWKHU WKDQ LQFHQWLYH VWRFN RSWLRQV, ZKLFK PD EH JUDQWHG RQO WR HPSORHHV. $V RI $SULO 13, 2021, WKHUH ZHUH DSSUR[LPDWHO 41 HPSORHHV DQG 6 QRQ-HPSORHH GLUHFWRUV ZKR ZRXOG SRWHQWLDOO EH HOLJLEOH WR UHFHLYH DZDUGV XQGHU WKH 2021 3ODQ. 6KDUHV $YDLODEOH IRU $ZDUGV; $ZDUG /LPLWV. The number of shares of our common stock reserved for issuance under the 2021 3ODQ LV HTXDO WR WKH VXP RI (L) 9,900,000 VKDUHV, ZKLFK LQFOXGHV 341,155 VKDUHV WKDW DUH UHVHUYHG EXW XQLVVXHG XQGHU WKH 3ULRU Plan and (ii) any shares subject to outstanding awards under the Prior Plan that, after May 25, 2021, are forfeited, terminated, ODSVHG, RU VDWLVHG WKHUHXQGHU LQ FDVK RU SURSHUW RWKHU WKDQ VKDUHV. $ PD[LPXP RI 9,900,000 VKDUHV PD EH LVVXHG XQGHU the 2021 Plan pursuant to incentive stock options. The number of shares issued or reserved pursuant to the 2021 Plan will be adjusted by the plan administrator, as they deem appropriate and equitable, as a result of stock splits, stock dividends, and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cancelled, settled or otherwise terminated without a distribution of shares of common stock to a participant will thereafter EH GHHPHG WR EH DYDLODEOH IRU DZDUGV. +RZHYHU, QRQH RI WKH IROORZLQJ ZLOO EH DGGHG EDFN WR WKH VKDUHV DXWKRUL]HG IRU JUDQW under the 2021 Plan: (i) shares otherwise issuable or issued in respect of, or as part of, any award withheld to cover taxes or any applicable exercise price, (ii) shares subject to share-settled stock appreciation rights or options that are exercised, (iii) shares tendered to exercise outstanding options or other awards or to cover applicable taxes on such awards, or (iv) shares repurchased on the open market using exercise price proceeds. Shares underlying awards that are subject to the achievement of performance goals will be counted against the share reserve based on the target value of such awards unless, and until, such time as such awards become vested and settled in shares, and awards that, pursuant to their terms, may be settled only in cash will not count against the share reserve. $GMXVWPHQWV. I WKHUH LV DQ FKDQJH LQ WKH &RPSDQV FDSLWDOL]DWLRQ UHVXOWLQJ IURP D PHUJHU, FRQVROLGDWLRQ, UHFODVVLFDWLRQ, or other corporate transaction, a stock split, reorganization, or other change in corporate structure, the plan administrator will adjust the number and kind of shares of stock or other securities permitted to be delivered under the 2021 Plan, adjust the terms of outstanding awards, including the number and kind of shares of stock or other securities subject to outstanding awards, in each case as and to the extent the plan administrator determines an adjustment to be appropriate and equitable, to prevent dilution or enlargement of rights. 0LQLPXP 9HVWLQJ 5HTXLUHPHQW. Except in the case of substitute awards, awards granted under the 2021 Plan will be subject to a minimum vesting period of one year from the date of grant. Notwithstanding the foregoing, the plan administrator may provide, in an award agreement or following the time of grant, that the vesting of an award will accelerate in the event RI D SDUWLFLSDQWV GHDWK RU GLVDELOLW, DQG WKH SODQ DGPLQLVWUDWRU PD JUDQW DZDUGV FRYHULQJ 5% RI WKH VKDUHV UHVHUYHG for issuance under the 2021 Plan without regard to the minimum vesting provision. The vesting of any unvested awards 60

 

granted to non-employee directors will be deemed to satisfy the one-year minimum vesting provision if the awards vest on the earlier of the one-year anniversary of the date of grant and the next regular annual meeting of stockholders that is at least 50 weeks after the immediately preceding year’s annual meeting. 6WRFN 2SWLRQV. Under the 2021 Plan, the plan administrator may grant participants incentive stock options, which qualify for VSHFLDO WD[ WUHDWPHQW LQ WKH 8QLWHG 6WDWHV, DV ZHOO DV QRQ-TXDOLHG VWRFN RSWLRQV. 6WRFN RSWLRQV DUH D YDULDEOH FRPSRQHQW of compensation designed to incentivize the participants to grow the Company and to increase the value of our shares. The plan administrator will establish the duration of each option at the time it is granted, with a maximum duration of 10 HDUV (RU LQ WKH FDVH RI D WHQ SHUFHQW (10%) VWRFNKROGHU ZLWKLQ WKH PHDQLQJ RI 6HFWLRQ 422(E)(6) RI WKH QWHUQDO 5HYHQXH &RGH RI 1986, DV DPHQGHG (WKH &RGH), YH HDUV) IURP WKH GDWH VXFK RSWLRQ LV JUDQWHG, DQG PD DOVR HVWDEOLVK YHVWLQJ performance requirements that must be met prior to the exercise of options. Stock option grants must have an exercise price that is equal to or greater than the fair market value of our common stock on the date of grant. Stock option grants may include provisions that permit the option holder to exercise all or part of the holder’s vested options, or to satisfy withholding tax liabilities, by tendering shares of our common stock already owned by the option holder with a fair market value equal to the exercise price. Dividends may not be paid on awards of stock options under the 2021 Plan. Unless otherwise directed by a participant in writing, each vested and unexercised option held by a participant who is actively in service with the Company will automatically be exercised on the last business day before such option expires, so long as the per-share exercise price of the option is less than the fair market value of a share on that date. 6WRFN $SSUHFLDWLRQ 5LJKWV. The plan administrator may also grant stock appreciation rights, which will be exercisable upon the occurrence of certain contingent events. Stock appreciation rights are a variable component of compensation designed to retain key employees. Stock appreciation rights entitle the holder upon exercise to receive an amount in any combination of cash and shares (as determined by the plan administrator) equal in value to the excess of the fair market value of the shares covered by the stock appreciation rights over the exercise price of the right. Unless otherwise directed by a participant in writing, each vested and unexercised stock appreciation right held by a participant who is actively in service with the Company will automatically be exercised on the last business day before such stock appreciation right expires, so long as the per-share exercise price of the stock appreciation right is less than the fair market value of a share on that date. 5HVWULFWHG 6KDUHV. The plan administrator may also grant restricted shares, which are awards of our shares of common stock that vest in accordance with the terms and conditions established by the plan administrator. A participant holding restricted shares will generally have the rights of a stockholder with respect to such shares; however, the plan administrator will determine in the award agreement whether the participant will be entitled receive dividends on such shares. Restricted shares are a variable component of compensation also available to retain key employees when deemed appropriate. 5HVWULFWHG 6WRFN 8QLWV. 5HVWULFWHG VWRFN XQLWV UHSUHVHQW WKH ULJKW WR UHFHLYH VKDUHV RI FRPPRQ VWRFN DW D VSHFLHG GDWH LQ WKH IXWXUH, VXEMHFW WR IRUIHLWXUH RI VXFK ULJKW. I WKH UHVWULFWHG VWRFN XQLW KDV QRW EHHQ IRUIHLWHG, WKHQ RQ WKH GDWH VSHFLHG LQ WKH restricted stock unit grant, we must deliver to the holder of the restricted stock unit, unrestricted shares of our common stock, which will be freely transferable. A participant holding restricted stock units will have no voting rights with respect thereto. The plan administrator will determine in the award agreement whether the participant will be entitled to receive dividend equivalents on such restricted stock units. Restricted stock units are a variable component of compensation also designed to retain key employees when deemed appropriate. 3HUIRUPDQFH-%DVHG $ZDUGV. Performance-based awards are denominated in shares, stock units, or cash, and are linked to the satisfaction of performance criteria established by the plan administrator. Performance-based awards are a variable component of compensation designed to reward key management for achieving annual performance goals. The performance-based criteria applicable to such awards will be determined by the plan administrator and may include, but are not limited to, any of the following: earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; QHW RSHUDWLQJ SURW DIWHU WD[; FDVK RZ; UHYHQXH; QHW UHYHQXHV; VDOHV; GDV VDOHV RXWVWDQGLQJ; LQFRPH; QHW LQFRPH; RSHUDWLQJ income; net operating income, operating margin; earnings; earnings per share; return on equity; return on investment; return RQ FDSLWDO; UHWXUQ RQ DVVHWV; UHWXUQ RQ QHW DVVHWV; WRWDO VWRFNKROGHU UHWXUQ; HFRQRPLF SURW; PDUNHW VKDUH; DSSUHFLDWLRQ LQ the fair market value, book value or other measure of value of our shares; expense/cost control; working capital; customer satisfaction; employee retention or employee turnover; employee satisfaction or engagement; environmental, health, or other VDIHW JRDOV; LQGLYLGXDO SHUIRUPDQFH; VWUDWHJLF REMHFWLYH PLOHVWRQHV; DQ RWKHU FULWHULD VSHFLHG E WKH SODQ DGPLQLVWUDWRU LQ LWV VROH GLVFUHWLRQ; RU DQ FRPELQDWLRQ RI, RU D VSHFLHG LQFUHDVH LQ, DQ RI WKH IRUHJRLQJ. 2WKHU $ZDUGV. In addition to the awards described above, the plan administrator may grant other incentives payable in cash or shares under the 2021 Plan as it deems consistent with the terms of the 2021 Plan and subject to such other terms and 2021 Proxy Statement 61

 

conditions as it deems appropriate. 'LYLGHQGV DQG 'LYLGHQG (TXLYDOHQWV. To the extent that any award under the 2021 Plan contains a right to receive dividends or dividend equivalents while such award remains unvested, notwithstanding anything in the 2021 Plan to the contrary, such dividends or dividend equivalents will be accumulated and paid once and to the extent that the underlying award vests. 'HIHUUDOV RI 3DPHQW. The plan administrator may determine that the delivery of shares or cash upon the vesting, exercise or settlement of an award under the 2021 Plan may or will be deferred in accordance with applicable law. &KDQJH LQ &RQWURO 3URYLVLRQV. Unless otherwise provided in an award agreement, in the event that a change in control occurs and any or all outstanding awards are continued, assumed or substituted for an economically equivalent award in connection ZLWK VXFK FKDQJH LQ FRQWURO, LI D SDUWLFLSDQWV HPSORPHQW RU VHUYLFH LV WHUPLQDWHG E WKH &RPSDQ, LWV VXFFHVVRU RU DOLDWH WKHUHRI, ZLWKRXW FDXVH RQ RU DIWHU WKH HHFWLYH GDWH RI WKH FKDQJH LQ FRQWURO EXW SULRU WR WZHQW-IRXU (24) PRQWKV IROORZLQJ the change in control transaction, then as of the date of such termination: (1) any unvested or unexercisable portion of any award carrying a right to exercise will become fully vested and exercisable; and (2) the restrictions and forfeiture conditions applicable to any such award will lapse and such awards will be deemed fully vested and any performance conditions imposed with respect to such awards will be deemed to be fully achieved at the target level. Unless otherwise provided in an award agreement, in the event that a change in control occurs, and any awards are not continued, assumed or substituted for an economically equivalent in connection with the change in control transaction, then as of the date of such change in control: (1) any unvested or unexercisable portion of any award carrying a right to exercise will become fully vested and exercisable; and (2) the restrictions and forfeiture conditions applicable to any such award will lapse and such awards will be deemed fully vested and any performance conditions imposed with respect to such awards will be deemed to be fully achieved at the greater of (x) target or (y) actual performance through the date of such change in control. $PHQGPHQW DQG 7HUPLQDWLRQ. The Board or the Committee may alter, amend, modify, or terminate the 2021 Plan at any time; provided that the approval of our stockholders will be obtained for any amendment to the 2021 Plan that requires stockholder approval under the rules of the NYSE or in accordance with other applicable law. In addition, without stockholder approval, to the extent required by the rules of the stock exchange(s) on which the shares are traded, except DV RWKHUZLVH SHUPLWWHG XQGHU WKH HTXLWDEOH DGMXVWPHQWV SURYLVLRQV RI WKH 2021 3ODQ, (L) QR DPHQGPHQW RU PRGLFDWLRQ may reduce the exercise price of any stock option or stock appreciation right, (ii) the plan administrator may not cancel any outstanding stock option or stock appreciation right and replace it with a new option or stock appreciation right, another award or cash and (iii) the plan administrator may not take any other action that is considered a “repricing” for purposes RI WKH VWRFNKROGHU DSSURYDO UXOHV RI WKH DSSOLFDEOH VWRFN H[FKDQJH(V). 1R PRGLFDWLRQ RI DQ DZDUG ZLOO, ZLWKRXW WKH SULRU written consent of the participant, adversely alter or impair the rights of a participant under the 2021 Plan. &RPSOLDQFH ZLWK $SSOLFDEOH /DZV. We intend for awards granted under the 2021 Plan to be designed, granted, and administered in such a manner that they are either exempt from the application of, or comply with, the requirements of Section 409A of the Code. NEW PLAN BENEFITS Future awards under the 2021 Plan will be made at the discretion of the plan administrator based on such factors as the plan administrator deems relevant at the time the awards are made. Accordingly, awards that may be granted under the 2021 Plan are not determinable at this time. SUMMARY OF FEDER AL INCOME TA X CONSEQUENCES The following is a brief description of the federal income tax treatment that generally applies to Plan awards. The description is based on current federal tax laws, rules and regulations, which are subject to change, and does not purport to be a complete description of the federal income tax aspects of the 2021 Plan. A participant may also be subject to state, local and foreign taxes. 1RQ-4XDOLHG 6WRFN 2SWLRQV. 7KH JUDQW RI D QRQ-TXDOLHG VWRFN RSWLRQ ZLOO QRW UHVXOW LQ WD[DEOH LQFRPH WR WKH SDUWLFLSDQW. The participant will realize ordinary income at the time of exercise in an amount equal to the excess, if any, of the then fair market value of the stock acquired over the exercise price for those shares, and the Company will generally be entitled to D FRUUHVSRQGLQJ GHGXFWLRQ. *DLQV RU ORVVHV UHDOL]HG E WKH SDUWLFLSDQW XSRQ GLVSRVLWLRQ RI VXFK VKDUHV ZLOO EH WUHDWHG DV capital gains or losses, with the basis in such stock equal to the fair market value of the shares at the time of exercise. 62

 

QFHQWLYH 6WRFN 2SWLRQV. The grant of an incentive stock option will not result in taxable income to the participant. The exercise of an incentive stock option will not result in taxable income to the participant if the participant was continuously HPSORHG E WKH &RPSDQ RU DQ DOLDWH IURP WKH GDWH RI WKH JUDQW RI WKH RSWLRQ XQWLO WKH GDWH WKUHH PRQWKV SULRU WR WKH date of exercise (one year prior to the date of exercise if the participant is disabled). The excess, if any, of the fair market value of the stock at the time of the exercise over the exercise price is an adjustment that is included in the calculation of the participant’s alternative minimum taxable income for the tax year in which the incentive stock option is exercised. If the participant does not sell or otherwise dispose of the stock within two years from the date of the grant of the incentive stock option or within one year after the transfer of such stock to the participant, then, upon disposition of such stock, any amount realized in excess of the exercise price will be taxed to the participant as capital gain, and the Company will not be entitled to a corresponding deduction. If the holding period requirements are not met, the participant will generally realize ordinary income at the time of the disposition of the shares, in an amount equal to the lesser of (i) the excess, if any, of the fair market value of the stock on the date of exercise over the exercise price, or (ii) the excess, if any, of the amount realized upon disposition of the shares over the exercise price, and the Company will generally be entitled to a corresponding GHGXFWLRQ. Q DGGLWLRQ, WKH SDUWLFLSDQW ZLOO UHFRJQL]H FDSLWDO JDLQ RU ORVV HTXDO WR WKH GLHUHQFH EHWZHHQ WKH DPRXQW realized and the value of the shares on the date of exercise. 6WRFN $SSUHFLDWLRQ 5LJKWV. The grant of a stock appreciation right will not result in taxable income to the participant. The participant will realize ordinary income at the time of exercise in an amount equal to the amount of cash or the fair market YDOXH RI WKH VKDUHV SDLG XSRQ H[HUFLVH, DQG WKH &RPSDQ ZLOO JHQHUDOO EH HQWLWOHG WR D FRUUHVSRQGLQJ GHGXFWLRQ. *DLQV RU losses realized by the participant upon disposition of any shares received will be treated as capital gains or losses, with the basis in such stock equal to the fair market value of the shares at the time of exercise. 5HVWULFWHG 6WRFN DQG 3HUIRUPDQFH-%DVHG 6KDUHV. A grant of restricted stock or performance-based shares will not result in taxable income to the participant at the time of grant, and the Company will not be entitled to a corresponding deduction, assuming that the shares are subject to transferability restrictions and that certain restrictions on the shares constitute a “substantial risk of forfeiture” for federal income tax purposes. Upon vesting, the holder will realize ordinary income in an amount equal to the then fair market value of the vested shares, and the Company will generally be entitled to a FRUUHVSRQGLQJ GHGXFWLRQ. *DLQV RU ORVVHV UHDOL]HG E WKH SDUWLFLSDQW XSRQ VXEVHTXHQW GLVSRVLWLRQ RI VXFK VKDUHV ZLOO EH treated as capital gains or losses, with the basis in such shares equal to the fair market value of the shares at the time of vesting. Dividends paid to the holder of restricted stock during the restricted period also will be compensation income to the participant, and the Company will generally be entitled to a corresponding deduction when the dividends no longer are subject to a substantial risk of forfeiture or become transferable. A participant may be permitted to elect, pursuant to 6HFWLRQ 83(E) RI WKH QWHUQDO 5HYHQXH &RGH, WR KDYH LQFRPH UHFRJQL]HG DW WKH GDWH D UHVWULFWHG VWRFN DZDUG RU SHUIRUPDQFH share award, as the case may be, is granted and to have the applicable capital gain holding period commence as of that date. In such a case, the Company would be entitled to a corresponding deduction on the date of grant. 5HVWULFWHG 6WRFN 8QLWV. A grant of restricted stock units (including performance-based restricted stock units) will not result in taxable income to the participant at the time of grant, and the Company will not be entitled to a corresponding deduction. Upon vesting and issuance of the underlying shares, the holder will realize ordinary income in an amount equal to the then IDLU PDUNHW YDOXH RI WKH LVVXHG VKDUHV, DQG WKH &RPSDQ ZLOO JHQHUDOO EH HQWLWOHG WR D FRUUHVSRQGLQJ GHGXFWLRQ. *DLQV RU losses realized by the participant upon disposition of such shares will be treated as capital gains or losses, with the basis in such shares equal to the fair market value of the shares at the time of vesting and issuance. Dividend equivalents paid to the holder of restricted stock units during the restricted period also will be compensation income to the participant, and the Company will generally be entitled to a corresponding deduction when the dividend equivalents are paid. 3HUIRUPDQFH $ZDUGV DQG 2WKHU 6KDUH-%DVHG RU &DVK-%DVHG $ZDUGV. A grant of a performance award or other stock-based or cash-based award will not result in taxable income to the participant at the time of grant, and the Company will not be entitled to a corresponding deduction. Upon payment of cash or the vesting or issuance of the underlying shares, the participant will realize ordinary income in an amount equal to the cash received or the then fair market value of the issued VKDUHV, DQG WKH &RPSDQ ZLOO JHQHUDOO EH HQWLWOHG WR D FRUUHVSRQGLQJ GHGXFWLRQ. *DLQV RU ORVVHV UHDOL]HG E WKH SDUWLFLSDQW upon subsequent disposition of such shares will be treated as capital gains or losses, with the basis in such shares equal to the fair market value of the shares at the time of vesting and issuance. 2021 Proxy Statement 63

 

'HGXFWLELOLW /LPLW RQ &RPSHQVDWLRQ LQ ([FHVV RI $1 0LOOLRQ. 6HFWLRQ 162(P) RI WKH QWHUQDO 5HYHQXH &RGH JHQHUDOO OLPLWV WKH deductible amount of total annual compensation paid by a public company to each “covered employee” to no more than $1 million. 7D[ :LWKKROGLQJ. As a condition to the delivery of any shares to the recipient of an award, the Company may require the recipient to make arrangements for meeting certain tax withholding requirements in connection with the award. PSRUWDQFH RI &RQVXOWLQJ D 7D[ $GYLVHU. The information set forth above is a summary only and does not purport to be complete. In addition, the information is based upon Federal income tax rules as of the date hereof and therefore is subject to change when those rules change. Moreover, because the tax consequences to any recipient may depend on their particular situation, each recipient should consult their tax adviser as to the Federal, state, local, foreign and other tax consequences of the grant or exercise of an award or the disposition of shares acquired as a result of an award. VOTE REQUIRED FOR APPROVAL 7KH DUPDWLYH YRWH RI KROGHUV RI D PDMRULW RI WKH VKDUHV RI WKH &RPSDQV FRPPRQ VWRFN SUHVHQW LQ SHUVRQ RU represented by proxy at the Annual Meeting is required to approve the 2021 Plan. RECOMMENDATION OF THE BOARD OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL AND ADOPTION OF THE RING ENERGY, INC. 2021 OMNIBUS INCENTIVE PLAN. 64

 

 

2021 Proxy Statement 65

 

RING ENERGY, INC. 2021 OMNIBUS INCENTIVE PLAN 6(&721 1. *(1(5 $/. 7KH SXUSRVHV RI WKH 5LQJ (QHUJ, QF. 2021 2PQLEXV QFHQWLYH 3ODQ (WKH 3ODQ) DUH WR: (D) HQFRXUDJH WKH SUR WDELOLW DQG growth of the Company through short-term and long-term incentives that are consistent with the Company’s objectives; (b) give Participants an incentive for excellence in individual performance; (c) promote teamwork among Participants; and (G) JLYH WKH &RPSDQ D VLJQL FDQW DGYDQWDJH LQ DWWUDFWLQJ DQG UHWDLQLQJ NH (PSORHHV, 'LUHFWRUV DQG &RQVXOWDQWV. 7R accomplish such purposes, the Plan provides that the Company may grant Options, Stock Appreciation Rights, Restricted Shares, Restricted Stock Units, Performance-Based Awards (including performance-based Restricted Shares and Restricted Stock Units), Other Share Based Awards, Other Cash-Based Awards or any combination of the foregoing. 6(&721 2.'()17216. )RU SXUSRVHV RI WKH 3ODQ, WKH IROORZLQJ WHUPV VKDOO EH GH QHG DV VHW IRUWK EHORZ: (a) “Administrator” means the Board, or, if and to the extent the Board does not administer the Plan, the Committee in DFFRUGDQFH ZLWK 6HFWLRQ 3 RI WKH 3ODQ. (b) “$ OLDWH” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled E, RU LV XQGHU FRPPRQ FRQWURO ZLWK, WKH 3HUVRQ VSHFL HG. $Q HQWLW VKDOO EH GHHPHG DQ $ OLDWH RI WKH &RPSDQ IRU SXUSRVHV RI WKLV GH QLWLRQ RQO IRU VXFK SHULRGV DV WKH UHTXLVLWH RZQHUVKLS RU FRQWURO UHODWLRQVKLS LV PDLQWDLQHG. )RU SXUSRVHV RI WKLV GH QLWLRQ, FRQWURO (LQFOXGLQJ ZLWK FRUUHODWLYH PHDQLQJV, WKH WHUPV FRQWUROOLQJ, FRQWUROOHG E, RU “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise. (c) “Ar ticles of Incorporation” means the articles of incorporation of the Company, as amended and/or restated from time to time. (d) “Automatic Exercise Date” means, with respect to an Option or a Stock Appreciation Right, the last business day of the DSSOLFDEOH WHUP RI WKH 2SWLRQ SXUVXDQW WR 6HFWLRQ 7(N) RU WKH 6WRFN $SSUHFLDWLRQ 5LJKW SXUVXDQW WR 6HFWLRQ S(K). (e) “Award” means any Option, Stock Appreciation Right, Restricted Share, Restricted Stock Unit, Performance-Based Award, Other Share Based Award or Other Cash-Based Award granted under the Plan. (f ) “Award Agreement” means any written agreement, contract or other instrument or document evidencing an Award. Evidence of an Award may be in written or electronic form, may be limited to notation on the books and records of the Company and, with the approval of the Administrator, need not be signed by a representative of the Company or D 3DUWLFLSDQW. $Q 6KDUHV WKDW EHFRPH GHOLYHUDEOH WR WKH 3DUWLFLSDQW SXUVXDQW WR WKH 3ODQ PD EH LVVXHG LQ FHUWL FDWH form in the name of the Participant or in book-entry form in the name of the Participant. (g) “Bylaws” means the bylaws of the Company, as may be amended and/or restated from time to time. (h) “Board” means the Board of Directors of the Company. (i) “Cause PHDQV, ZLWK UHVSHFW WR DQ 3DUWLFLSDQW, (L) FDXVH DV GH QHG LQ DQ XQH[SLUHG HPSORPHQW DJUHHPHQW RU DQ other similar type of agreement applicable to the Participant, or (ii) in the case of a Participant who does not have an employment agreement or any other similar type of agreement or has an employment agreement or any other similar WSH RI DJUHHPHQW WKDW GRHV QRW GH QH FDXVH: ($) DQ DFW RU RPLVVLRQ WKDW FRQVWLWXWHV D PDWHULDO EUHDFK E WKH Participant of any of such Participant’s obligations under such Participant’s employment agreement (if any) with the Company or any of its Subsidiaries, the applicable Award Agreement or any other agreement with the Company or any of its Subsidiaries; (B) the willful and continued failure or refusal of the Participant substantially to perform the duties 66

 

UHTXLUHG RI VXFK 3DUWLFLSDQW DV DQ (PSORHH RI WKH &RPSDQ RU DQ RI LWV 6XEVLGLDULHV, RU SHUIRUPDQFH VLJQLFDQWO EHORZ the level required or expected of the Participant, as determined by the Administrator; (C) any willful violation by the Participant of any federal or state law or regulation applicable to the business of the Company or any of its Subsidiaries or $OLDWHV LQFOXGLQJ, EXW QRW OLPLWHG WR, WKH UXOHV DQG UHJXODWLRQV SURPXOJDWHG E WKH 6HFXULWLHV DQG ([FKDQJH &RPPLVVLRQ as well as the provisions of the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Participant’s commission of any felony or other crime involving moral turpitude, or any willful perpetration by the Participant of a common law fraud; or (D) any other misconduct by the Participant that is materially injurious WR WKH QDQFLDO FRQGLWLRQ RU EXVLQHVV UHSXWDWLRQ RI, RU LV RWKHUZLVH PDWHULDOO LQMXULRXV WR, WKH &RPSDQ RU DQ RI LWV 6XEVLGLDULHV RU $OLDWHV. ( j) “Change in Capitalization PHDQV DQ (L) PHUJHU, FRQVROLGDWLRQ, UHFODVVLFDWLRQ, UHFDSLWDOL]DWLRQ, VSLQ-R, VSLQ-RXW, repurchase or other reorganization or corporate transaction or event, (ii) extraordinary dividend (whether in the form of cash, Shares or other property), stock split or reverse stock split, (iii) combination or exchange of shares, (iv) other change in corporate structure or (v) payment of any other distribution, which, in any such case, the Administrator GHWHUPLQHV, LQ LWV VROH GLVFUHWLRQ, DHFWV WKH 6KDUHV VXFK WKDW DQ DGMXVWPHQW SXUVXDQW WR 6HFWLRQ 5 RI WKH 3ODQ LV appropriate. (k) “Change in Control” means the date on which any of the following occurs: (i) any Person acquires ownership of stock of the Company that, together with the stock held by such Person, FRQVWLWXWHV PRUH WKDQ IW SHUFHQW (50%) RI WKH WRWDO IDLU PDUNHW YDOXH RU WRWDO YRWLQJ SRZHU RI WKH VWRFN RI WKH Company (whether such change in ownership occurs by way of a merger, consolidation, purchase or acquisition of stock, or other similar business transaction with the Company); provided, however, that, a Change in Control VKDOO QRW RFFXU LI DQ 3HUVRQ RZQV PRUH WKDQ 50% RI WKH WRWDO IDLU PDUNHW YDOXH RU WRWDO YRWLQJ SRZHU RI WKH Company’s stock and acquires additional stock; (ii) any Person acquires (or has acquired during the 12-month period ending on the date of the most recent DFTXLVLWLRQ) RZQHUVKLS RI WKH &RPSDQV VWRFN SRVVHVVLQJ IW SHUFHQW (50%) RU PRUH RI WKH WRWDO YRWLQJ SRZHU RI WKH VWRFN RI WKH &RPSDQ; SURYLGHG, KRZHYHU, LI DQ 3HUVRQ LV FRQVLGHUHG WR EH LQ HHFWLYH FRQWURO RI WKH Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; (iii) a majority of the members of the Board of the Company are replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of such appointment or election; (iv) any Person acquires (or has acquired during the 12-month period ending on the date of the most recent DFTXLVLWLRQ) DVVHWV IURP WKH &RPSDQ WKDW KDYH D WRWDO JURVV IDLU PDUNHW YDOXH HTXDO WR RU PRUH WKDQ IW SHUFHQW (50%) RI WKH WRWDO JURVV IDLU PDUNHW YDOXH RI DOO RI WKH DVVHWV RI WKH &RPSDQ LPPHGLDWHO EHIRUH such acquisition(s); provided, however, that for purposes of this subsection, the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s shareholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a shareholder of the Company (immediately before the asset transfer) in exchange for or ZLWK UHVSHFW WR WKH &RPSDQV VWRFN, (2) DQ HQWLW, 50% RU PRUH RI WKH WRWDO YDOXH RU YRWLQJ SRZHU RI ZKLFK LV RZQHG, GLUHFWO RU LQGLUHFWO, E WKH &RPSDQ, (3) D SHUVRQ, WKDW RZQV, GLUHFWO RU LQGLUHFWO, 50% RU PRUH RI WKH WRWDO YDOXH RU YRWLQJ SRZHU RI DOO WKH RXWVWDQGLQJ VWRFN RI WKH &RPSDQ, RU (4) DQ HQWLW, DW OHDVW 50% RI WKH WRWDO YDOXH RU YRWLQJ SRZHU RI ZKLFK LV RZQHG, GLUHFWO RU LQGLUHFWO, E D SHUVRQ GHVFULEHG LQ FODXVH (3) immediately above; or (v) a complete liquidation or dissolution of the Company is consummated. )RU SXUSRVHV RI WKLV GHQLWLRQ, WKH WHUP JURVV IDLU PDUNHW YDOXH PHDQV WKH YDOXH RI WKH DVVHWV RI WKH &RPSDQ, RU the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. )XUWKHUPRUH, IRU SXUSRVHV RI WKLV GHQLWLRQ, 3HUVRQV ZLOO EH FRQVLGHUHG WR EH DFWLQJ DV D JURXS LI WKH DUH RZQHUV RI D corporation or other entity that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company. Notwithstanding anything herein to the contrary, with respect to any amounts that constitute deferred compensation under Section 409A of the Code, to the extent required to avoid accelerated taxation or penalties, no Change in Control will be deemed to have occurred unless such Change in Control also constitutes a change in control in the ownership or HHFWLYH FRQWURO RI WKH &RPSDQ RU D FKDQJH LQ WKH RZQHUVKLS RI D VXEVWDQWLDO SRUWLRQ RI WKH &RPSDQV DVVHWV XQGHU Section 409A of the Code. 2021 Proxy Statement 67

 

(l) “Code PHDQV WKH QWHUQDO 5HYHQXH &RGH RI 19S6, DV DPHQGHG IURP WLPH WR WLPH, RU DQ VXFFHVVRU WKHUHWR. (m) “Committee” means any committee or subcommittee the Board may appoint to administer the Plan. Subject to the GLVFUHWLRQ RI WKH %RDUG, WKH &RPPLWWHH VKDOO EH FRPSRVHG HQWLUHO RI LQGLYLGXDOV ZKR PHHW WKH TXDOLFDWLRQV RI D QRQ-HPSORHH GLUHFWRU ZLWKLQ WKH PHDQLQJ RI 5XOH 16E-3 XQGHU WKH ([FKDQJH $FW DQG DQ RWKHU TXDOLFDWLRQV required by the applicable stock exchange on which the Shares are traded. If at any time or to any extent the Board VKDOO QRW DGPLQLVWHU WKH 3ODQ, WKHQ WKH IXQFWLRQV RI WKH $GPLQLVWUDWRU VSHFLHG LQ WKH 3ODQ VKDOO EH H[HUFLVHG E WKH Committee. Except as otherwise provided in the Company’s Articles of Incorporation or Bylaws, any action of the Committee with respect to the administration of the Plan shall be taken by a majority vote at a meeting at which a quorum is duly constituted or unanimous written consent of the Committee’s members. (n) “Common Stock” means the common stock, par value $0.001 per share, of the Company. (o) “Company” means Ring Energy, Inc., a Nevada corporation (or any successor corporation, except as the term &RPSDQ LV XVHG LQ WKH GHQLWLRQ RI &KDQJH LQ &RQWURO DERYH). (p) “Consultant PHDQV DQ FXUUHQW RU SURVSHFWLYH FRQVXOWDQW RU LQGHSHQGHQW FRQWUDFWRU RI WKH &RPSDQ RU DQ $OLDWH WKHUHRI, LQ HDFK FDVH, ZKR LV QRW DQ (PSORHH, ([HFXWLYH 2FHU RU QRQ-HPSORHH 'LUHFWRU. (q) “Disabilit y PHDQV, ZLWK UHVSHFW WR DQ 3DUWLFLSDQW, (L) GLVDELOLW DV GHQHG LQ DQ XQH[SLUHG HPSORPHQW DJUHHPHQW or any other similar type of agreement applicable to the Participant, or (ii) in the case of a Participant who does not have an employment agreement or any other similar type of agreement or has an employment agreement or any RWKHU VLPLODU WSH RI DJUHHPHQW WKDW GRHV QRW GHQH GLVDELOLW, 'LVDELOLW PHDQV WKDW VXFK 3DUWLFLSDQW (L) LV XQDEOH to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving LQFRPH UHSODFHPHQW EHQHWV IRU D SHULRG RI QRW OHVV WKDQ WKUHH (3) PRQWKV XQGHU DQ DFFLGHQW DQG KHDOWK SODQ FRYHULQJ (PSORHHV RI WKH &RPSDQ RU DQ $OLDWH WKHUHRI. (r) “Director PHDQV DQ LQGLYLGXDO ZKR LV D PHPEHU RI WKH %RDUG RQ RU DIWHU WKH (HFWLYH 'DWH. (s) “(HFWLYH 'DWH” shall have the meaning set forth in Section 21 of the Plan. (t) “Eligible Recipient” means: (i) an Employee; (ii) a non-employee Director; or (iii) a Consultant, in each case, who has been selected as an eligible recipient under the Plan by the Administrator; provided, that any Awards granted prior to WKH GDWH DQ (OLJLEOH 5HFLSLHQW UVW SHUIRUPV VHUYLFHV IRU WKH &RPSDQ RU DQ $OLDWH WKHUHRI ZLOO QRW EHFRPH YHVWHG or exercisable, and no Shares shall be issued or other payment made to such Eligible Recipient with respect to such $ZDUGV, SULRU WR WKH GDWH RQ ZKLFK VXFK (OLJLEOH 5HFLSLHQW UVW SHUIRUPV VHUYLFHV IRU WKH &RPSDQ RU DQ $OLDWH thereof. Notwithstanding the foregoing, to the extent required to avoid the imposition of additional taxes under Code 6HFWLRQ 409$, (OLJLEOH 5HFLSLHQW  PHDQV: DQ (1) (PSORHH; (2) D QRQ-HPSORHH 'LUHFWRU; RU (3) D &RQVXOWDQW, LQ HDFK case, of the Company or a Subsidiary thereof, who has been selected as an eligible recipient under the Plan by the Administrator. (u) “Employee VKDOO PHDQ DQ FXUUHQW RU SURVSHFWLYH HPSORHH RI WKH &RPSDQ RU DQ $OLDWH WKHUHRI, DV GHVFULEHG LQ 7UHDVXU 5HJXODWLRQ 6HFWLRQ 1.421-1(K), LQFOXGLQJ DQ ([HFXWLYH 2FHU RU 'LUHFWRU ZKR LV DOVR WUHDWHG DV DQ HPSORHH. (v) “Exchange Act PHDQV WKH 6HFXULWLHV ([FKDQJH $FW RI 1934, DV DPHQGHG IURP WLPH WR WLPH. (w) “([HFXWLYH 2FHU PHDQV HDFK 3DUWLFLSDQW ZKR LV DQ H[HFXWLYH RFHU (ZLWKLQ WKH PHDQLQJ RI 5XOH 3E-7 XQGHU WKH Exchange Act) of the Company. (x) “Exercise Price” means, with respect to any Award under which the holder may purchase Shares, the price per share at which a holder of such Award granted hereunder may purchase Shares issuable upon exercise of such Award, as determined by the Administrator in accordance with Code Section 409A, as applicable. (y) “Fair Market Value” as of a particular date shall mean: (i) if the Shares are admitted to trading on a national securities exchange, the fair market value of a Share on any date shall be the closing sale price reported for such share on such exchange on such date or, if no sale was reported on such date, on the last day preceding such date on which a sale was reported; (ii) if the Shares are not then listed on a national securities exchange, the average of the highest reported bid and lowest reported asked prices for the Shares as reported by the National Association of Securities Dealers, Inc. $XWRPDWHG 4XRWDWLRQV 6VWHP IRU WKH ODVW SUHFHGLQJ GDWH RQ ZKLFK WKHUH ZDV D VDOH RI VXFK VWRFN LQ VXFK PDUNHW; RU (LLL) whether or not the Shares are then listed on a national securities exchange or traded in an over-the-counter market or the value of such Shares is not otherwise determinable, such value as determined by the Administrator in good faith and in a manner not inconsistent with the regulations under Code Section 409A. 6S

 

(z) “Free Standing Rights VKDOO KDYH WKH PHDQLQJ VHW IRUWK LQ 6HFWLRQ S(D) RI WKH 3ODQ. (aa) “*RRG 5HDVRQ” shall, to the extent applicable, have the meaning ascribed to such term in an unexpired employment agreement or any other similar type of agreement by and between the Company and a Participant. (bb) “Incentive Stock Option” means an Option that is intended to satisfy the requirements applicable to and to be treated as an “incentive stock option” described in Code Section 422. (cc) “1RQTXDOLHG 6WRFN 2SWLRQ” means an Option that is not intended to be an Incentive Stock Option. (dd) “Option PHDQV DQ RSWLRQ WR SXUFKDVH 6KDUHV JUDQWHG SXUVXDQW WR 6HFWLRQ 7 RI WKH 3ODQ. (ee) “Other Cash-Based Award” means a cash Award granted to a Participant under Section 11 of the Plan, including cash DZDUGHG DV D ERQXV RU XSRQ WKH DWWDLQPHQW RI 3HUIRUPDQFH *RDOV RU RWKHUZLVH DV SHUPLWWHG XQGHU WKH 3ODQ. ( ) Other Share Based Award” means a right or other interest granted to a Participant under the Plan that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares, including, but not limited to, unrestricted Shares or dividend equivalents, each of which may be subject to the DWWDLQPHQW RI 3HUIRUPDQFH *RDOV RU D SHULRG RI FRQWLQXHG HPSORPHQW RU RWKHU WHUPV RU FRQGLWLRQV DV SHUPLWWHG under the Plan. (gg) “Par ticipant” means any Eligible Recipient selected by the Administrator, pursuant to the Administrator’s authority SURYLGHG IRU LQ 6HFWLRQ 3 RI WKH 3ODQ, WR UHFHLYH DQ $ZDUG XQGHU WKH 3ODQ, DQG, XSRQ KLV RU KHU GHDWK, KLV RU KHU successors, heirs, executors and administrators, as the case may be, solely with respect to any Awards outstanding at the date of the Eligible Recipient’s death. (hh) “Per formance-Based Award” means any Award granted under the Plan that is subject to one or more Performance *RDOV. $Q GLYLGHQGV RU GLYLGHQG HTXLYDOHQWV SDDEOH RU FUHGLWHG WR D 3DUWLFLSDQW ZLWK UHVSHFW WR DQ XQYHVWHG 3HUIRUPDQFH-%DVHG $ZDUG VKDOO EH VXEMHFW WR WKH VDPH 3HUIRUPDQFH *RDOV DV WKH 6KDUHV RU XQLWV XQGHUOLQJ WKH Performance-Based Award. (ii) “3HU IRUPDQFH *RDOV” means performance goals based on performance criteria selected by the Administrator, which may include, but are not limited to, any of the following: (i) earnings before interest and taxes; (ii) earnings EHIRUH LQWHUHVW, WD[HV, GHSUHFLDWLRQ DQG DPRUWL]DWLRQ; (LLL) QHW RSHUDWLQJ SURW DIWHU WD[; (LY) FDVK RZ; (Y) UHYHQXH; (vi) net revenues; (vii) sales; (viii) days sales outstanding; (ix) income; (x) net income; (xi) operating income; (xii) net operating income; (xiii) operating margin; (xiv) earnings; (xv) earnings per share; (xvi) return on equity; (xvii) return on investment; (xviii) return on capital; (xix) return on assets; (xx) return on net assets; (xxi) total shareholder return; ([[LL) HFRQRPLF SURW; ([[LLL) PDUNHW VKDUH; ([[LY) DSSUHFLDWLRQ LQ WKH IDLU PDUNHW YDOXH, ERRN YDOXH RU RWKHU PHDVXUH RI value of the Shares; (xxv) expense or cost control; (xxvi) working capital; (xxvii) customer satisfaction; (xxviii) employee retention or employee turnover; (xxix) employee satisfaction or engagement; (xxx) environmental, health or other VDIHW JRDOV; ([[[L) LQGLYLGXDO SHUIRUPDQFH; ([[[LL) VWUDWHJLF REMHFWLYH PLOHVWRQHV; ([[[LLL) DQ RWKHU FULWHULD VSHFLHG E WKH $GPLQLVWUDWRU LQ LWV VROH GLVFUHWLRQ; DQG ([[[LY) DQ FRPELQDWLRQ RI, RU D VSHFLHG LQFUHDVH LQ, DQ RI WKH IRUHJRLQJ. :KHUH DSSOLFDEOH, WKH 3HUIRUPDQFH *RDOV PD EH H[SUHVVHG LQ WHUPV RI DWWDLQLQJ D VSHFLHG OHYHO RI WKH SDUWLFXODU criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to one or PRUH RI WKH &RPSDQ RU DQ $OLDWH WKHUHRI, RU D GLYLVLRQ RU VWUDWHJLF EXVLQHVV XQLW RI WKH &RPSDQ, RU PD EH DSSOLHG to the performance of the Company relative to a market index, a group of other companies or a combination thereof, DOO DV GHWHUPLQHG E WKH $GPLQLVWUDWRU. 7KH 3HUIRUPDQFH *RDOV PD LQFOXGH D WKUHVKROG OHYHO RI SHUIRUPDQFH EHORZ ZKLFK QR SDPHQW VKDOO EH PDGH (RU QR YHVWLQJ VKDOO RFFXU), OHYHOV RI SHUIRUPDQFH DW ZKLFK VSHFLHG SDPHQWV VKDOO EH PDGH (RU VSHFLHG YHVWLQJ VKDOO RFFXU), DQG D PD[LPXP OHYHO RI SHUIRUPDQFH DERYH ZKLFK QR DGGLWLRQDO SDPHQW shall be made (or at which full vesting shall occur). At the time such an Award is granted, the Administrator may specify DQ UHDVRQDEOH GHQLWLRQ RI WKH 3HUIRUPDQFH *RDOV LW XVHV. 6XFK GHQLWLRQV PD SURYLGH IRU HTXLWDEOH DGMXVWPHQWV WR WKH 3HUIRUPDQFH *RDOV LQ UHFRJQLWLRQ RI XQXVXDO RU QRQ-UHFXUULQJ HYHQWV DHFWLQJ WKH &RPSDQ RU DQ $OLDWH WKHUHRI RU WKH QDQFLDO VWDWHPHQWV RI WKH &RPSDQ RU DQ $OLDWH WKHUHRI, LQ UHVSRQVH WR FKDQJHV LQ DSSOLFDEOH ODZV or regulations, or to account for items of gain, loss or expense determined to be unusual in nature, infrequent in occurrence or unusual in nature and infrequent in occurrence or related to the disposal of a segment of a business or related to a change in accounting principles. If the Administrator determines that a change in the business, operations, FRUSRUDWH VWUXFWXUH RU FDSLWDO VWUXFWXUH RI WKH &RPSDQ RU WKH PDQQHU LQ ZKLFK WKH &RPSDQ RU DQ $OLDWH FRQGXFWV its business, or other events or circumstances render performance goals to be unsuitable, the Administrator may PRGLI VXFK 3HUIRUPDQFH *RDOV LQ ZKROH RU LQ SDUW, DV WKH &RPPLWWHH GHHPV DSSURSULDWH. I D 3DUWLFLSDQW LV SURPRWHG, GHPRWHG RU WUDQVIHUUHG WR D GLHUHQW EXVLQHVV XQLW RU IXQFWLRQ GXULQJ D SHUIRUPDQFH SHULRG, WKH $GPLQLVWUDWRU PD GHWHUPLQH WKDW WKH 3HUIRUPDQFH *RDOV RU SHUIRUPDQFH SHULRG DUH QR ORQJHU DSSURSULDWH DQG PD ([) DGMXVW, FKDQJH RU HOLPLQDWH WKH 3HUIRUPDQFH *RDOV RU WKH DSSOLFDEOH SHUIRUPDQFH SHULRG DV LW GHHPV DSSURSULDWH WR PDNH VXFK JRDOV and period comparable to the initial goals and period, or (y) make a cash payment to the Participant in an amount determined by the Administrator. 2021 Proxy Statement 69

 

 

(jj) “PersonI VKDOO KDYH WKH PHDQLQJ JLYHQ LQ 6HFWLRQ 3(D)(9) RI WKH ([FKDQJH $FW, DV PRGLHG DQG XVHG LQ 6HFWLRQV 13(G) and 14(d) thereof, however, a Person shall not include (i) the Company or any of its Subsidiaries; (ii) a trustee or RWKHU GXFLDU KROGLQJ VHFXULWLHV XQGHU DQ HPSORHH EHQHW SODQ RI WKH &RPSDQ RU DQ RI LWV 6XEVLGLDULHV; (LLL) DQ XQGHUZULWHU WHPSRUDULO KROGLQJ VHFXULWLHV SXUVXDQW WR DQ RHULQJ RI VXFK VHFXULWLHV; RU (LY) D FRUSRUDWLRQ RZQHG, directly or indirectly, by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company. (kk) “Prior PlanI PHDQV WKH 5LQJ (QHUJ, ZQF. /RQJ-7HUP ZQFHQWLYH 3ODQ, DV DPHQGHG IURP WLPH WR WLPH. (ll) “Related RightsI VKDOO KDYH WKH PHDQLQJ VHW IRUWK LQ 6HFWLRQ 8(D) RI WKH 3ODQ. (mm) “Restricted Shares” means an Award of Shares granted pursuant to Section 9 of the Plan subject to certain restrictions that lapse at the end of a Restricted Period. (nn) “Restricted Stock Unit” means a notional account established pursuant to an Award granted to a Participant, as GHVFULEHG LQ 6HFWLRQ 10 RI WKH 3ODQ, WKDW LV (L) YDOXHG VROHO E UHIHUHQFH WR 6KDUHV, (LL) VXEMHFW WR UHVWULFWLRQV VSHFLHG LQ WKH $ZDUG $JUHHPHQW, DQG (LLL) SDDEOH LQ FDVK RU LQ 6KDUHV (DV VSHFLHG LQ WKH $ZDUG $JUHHPHQW). 7KH 5HVWULFWHG 6WRFN 8QLWV DZDUGHG WR WKH 3DUWLFLSDQW ZLOO YHVW DFFRUGLQJ WR WKH WLPH-EDVHG FULWHULD RU 3HUIRUPDQFH *RDOV, DQG YHVWHG 5HVWULFWHG 6WRFN 8QLWV ZLOO EH VHWWOHG DW WKH WLPH(V), VSHFLHG LQ WKH $ZDUG $JUHHPHQW. (oo) “Restricted Period” means, with respect to Awards of Restricted Shares or Restricted Stock Units, the period of time determined by the Administrator during which such Award or a portion thereof is subject to restrictions or, as applicable, the period of time within which performance is measured for purposes of determining whether the Award has been earned. (pp) “5XOH 16E-3I VKDOO KDYH WKH PHDQLQJ VHW IRUWK LQ 6HFWLRQ 3(D) RI WKH 3ODQ. (qq) “Securities ActI PHDQV WKH 6HFXULWLHV $FW RI 1933, DV DPHQGHG IURP WLPH WR WLPH. (rr) “Shares” means shares of Common Stock reserved for issuance under the Plan, as adjusted pursuant to the Plan, and any successor (pursuant to a merger, consolidation or other reorganization) security. (ss) “Stock Appreciation RightI PHDQV WKH ULJKW SXUVXDQW WR DQ $ZDUG JUDQWHG XQGHU 6HFWLRQ 8 RI WKH 3ODQ WR UHFHLYH DQ amount equal to the excess, if any, of (i) the aggregate Fair Market Value, as of the date such Award or portion thereof is surrendered, of the Shares covered by such Award or such portion thereof, over (ii) the aggregate Exercise Price of such Award or such portion thereof. (tt) “Subsidiar y” means, with respect to any Person, as of any date of determination, any other Person as to which such UVW 3HUVRQ RZQV RU RWKHUZLVH FRQWUROV, GLUHFWO RU LQGLUHFWO, PRUH WKDQ IW SHUFHQW (50%) RI WKH YRWLQJ VKDUHV RU other similar interests or a sole general partner interest or managing member or similar interest of such other Person. $Q HQWLW VKDOO EH GHHPHG D 6XEVLGLDU RI WKH &RPSDQ IRU SXUSRVHV RI WKLV GHQLWLRQ RQO IRU VXFK SHULRGV DV WKH requisite ownership or control relationship is maintained. Notwithstanding the foregoing, in the case of an Incentive Stock Option or any determination relating to an Incentive Stock Option, “Subsidiary” means a corporation that is a subsidiary of the Company within the meaning of Code Section 424(f ). (uu) “Substitute Award” shall mean an Award granted under the Plan upon the assumption of, or in substitution for, outstanding equity awards granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation, or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option or Stock Appreciation Right. 6(&7Z21 3.$'0Z1Z675 $7Z21. (D) 7KH 3ODQ VKDOO EH DGPLQLVWHUHG E WKH $GPLQLVWUDWRU LQ DFFRUGDQFH ZLWK WKH UHTXLUHPHQWV RI 5XOH 16E-3 XQGHU WKH Exchange Act (“5XOH 16E-3”), to the extent applicable. (b) Pursuant to the terms of the Plan, the Administrator, subject, in the case of any Committee, to any restrictions on the authority delegated to it by the Board, shall have the power and authority, without limitation: (i) to select those Eligible Recipients who shall be Participants; (ii) to determine whether and to what extent Options, Stock Appreciation Rights, Restricted Shares, Restricted Stock Units, Other Share Based Awards, Other Cash-Based Awards or a combination of any of the foregoing, are to be granted hereunder to Participants; (iii) to determine the number of Shares to be covered by each Award granted hereunder; 70

 

(iv) to determine the terms and conditions, not inconsistent with the terms of the Plan, of each Award granted hereunder, including, but not limited to, (A) the restrictions applicable to Restricted Shares and Restricted Stock Units and the conditions under which restrictions applicable to such Restricted Shares and Restricted 6WRFN 8QLWV VKDOO ODSVH, (%) WKH 3HUIRUPDQFH *RDOV DQG SHULRGV DSSOLFDEOH WR $ZDUGV, LI DQ, (&) WKH ([HUFLVH 3ULFH RI HDFK $ZDUG, (') WKH YHVWLQJ VFKHGXOH DSSOLFDEOH WR HDFK $ZDUG, (() DQ FRQGHQWLDOLW RU UHVWULFWLYH covenant provisions applicable to the Award, and (F) subject to the requirements of Code Section 409A (to the extent applicable), any amendments to the terms and conditions of outstanding Awards, including, but not limited to, extending the exercise period of such Awards and accelerating the vesting schedule of such Awards; (v) to determine the terms and conditions, not inconsistent with the terms of the Plan, which shall govern all Award Agreements evidencing Options, Stock Appreciation Rights, Restricted Shares, Restricted Stock Units or Other Share Based Awards, Other Cash-Based Awards or any combination of the foregoing granted hereunder; (vi) to determine Fair Market Value; (vii) to determine the duration and purpose of leaves of absence which may be granted to a Participant without constituting termination of the Participant’s employment for purposes of Awards granted under the Plan; (viii) to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable; (ix) to reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan, any Award Agreement or other instrument or agreement relating to the Plan or an Award granted under the Plan; and (x) to construe and interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement relating thereto), and to otherwise supervise the administration of the Plan and to H[HUFLVH DOO SRZHUV DQG DXWKRULWLHV HLWKHU VSHFLFDOO JUDQWHG XQGHU WKH 3ODQ RU QHFHVVDU DQG DGYLVDEOH LQ WKH administration of the Plan. (F) $OO GHFLVLRQV PDGH E WKH $GPLQLVWUDWRU SXUVXDQW WR WKH SURYLVLRQV RI WKH 3ODQ VKDOO EH QDO, FRQFOXVLYH DQG ELQGLQJ RQ DOO SHUVRQV, LQFOXGLQJ WKH &RPSDQ DQG WKH 3DUWLFLSDQWV. 1R PHPEHU RI WKH %RDUG RU WKH &RPPLWWHH, RU DQ RFHU RU employee of the Company or any Subsidiary thereof acting on behalf of the Board or the Committee, shall be personally liable for any action, omission, determination, or interpretation taken or made in good faith with respect to the Plan, and DOO PHPEHUV RI WKH %RDUG RU WKH &RPPLWWHH DQG HDFK DQG DQ RFHU RU HPSORHH RI WKH &RPSDQ DQG RI DQ 6XEVLGLDU WKHUHRI DFWLQJ RQ WKHLU EHKDOI VKDOO, WR WKH PD[LPXP H[WHQW SHUPLWWHG E ODZ, EH IXOO LQGHPQLHG DQG SURWHFWHG E WKH Company in respect of any such action, omission, determination or interpretation. 6(&7Z21 4.6+$5(6 5(6(59(' )25 Z668$1&( 81'(5 7+( 3/$1 $1' /Z0Z7$7Z216 21 $:$5'6. (a) Subject to Section 5 of the Plan, the number of Shares that are reserved and available for issuance pursuant to $ZDUGV JUDQWHG XQGHU WKH 3ODQ LV WKH VXP RI (L) 9,900,000 6KDUHV, ZKLFK LQFOXGHV 341,155 6KDUHV WKDW DUH UHVHUYHG EXW XQLVVXHG XQGHU WKH 3ULRU 3ODQ, DQG (LL) DQ 6KDUHV XQGHU WKH 3ULRU 3ODQ VXEMHFW WR DZDUGV WKDW, DIWHU WKH (HFWLYH 'DWH, DUH IRUIHLWHG, WHUPLQDWHG, ODSVHG RU VDWLVHG WKHUHXQGHU LQ FDVK RU SURSHUW RWKHU WKDQ 6KDUHV. 7KH PD[LPXP QXPEHU of Shares that may be issued pursuant to Options intended to be Incentive Stock Options is 9,900,000. (E) 7KH PD[LPXP QXPEHU RI 6KDUHV VXEMHFW WR $ZDUGV JUDQWHG GXULQJ DQ VFDO HDU WR DQ QRQ-HPSORHH 'LUHFWRU, WDNHQ WRJHWKHU ZLWK DQ FDVK IHHV SDLG WR VXFK QRQ-HPSORHH 'LUHFWRU GXULQJ WKH VFDO HDU ZLWK UHVSHFW WR VXFK 'LUHFWRUeV VHUYLFH DV D QRQ-HPSORHH 'LUHFWRU, VKDOO QRW H[FHHG $750,000 LQ WRWDO YDOXH (FDOFXODWLQJ WKH YDOXH RI DQ VXFK $ZDUGV EDVHG RQ WKH JUDQW GDWH )DLU 0DUNHW 9DOXH RI VXFK $ZDUGV IRU QDQFLDO UHSRUWLQJ SXUSRVHV). (c) Shares issued under the Plan may, in whole or in part, be authorized but unissued Shares or Shares that shall have been or may be reacquired by the Company in the open market, in private transactions or otherwise. Any Shares subject to DQ $ZDUG XQGHU WKH 3ODQ WKDW, DIWHU WKH (HFWLYH 'DWH, DUH IRUIHLWHG, FDQFHOHG, VHWWOHG RU RWKHUZLVH WHUPLQDWHG ZLWKRXW D distribution of Shares to a Participant will thereafter be deemed to be available for Awards. In applying the immediately preceding sentence, if (i) Shares otherwise issuable or issued in respect of, or as part of, any Award are withheld to cover taxes or any applicable Exercise Price, such Shares shall be treated as having been issued under the Plan and shall not be available for issuance under the Plan, and (ii) any Share-settled Stock Appreciation Rights or Options are exercised, the aggregate number of Shares subject to such Stock Appreciation Rights or Options shall be deemed issued under the Plan and shall not be available for issuance under the Plan. In addition, Shares (x) tendered to exercise outstanding Options or other Awards, (y) withheld to cover applicable taxes on any Awards or (z) repurchased on the open market using Exercise Price proceeds shall not be available for issuance under the Plan. For the avoidance of doubt, (A) Shares underlying Awards that are subject to the achievement of performance goals shall be counted against the Share reserve based on the target value of such Awards unless and until such time as such Awards become vested and settled in Shares, and (B) Awards that, pursuant to their terms, may be settled only in cash shall not count against the Share reserve set forth in Section 4(a). 2021 Proxy Statement 71

 

(d) Except in the case of Substitute Awards granted pursuant to Sections 4(e) or 4(f ) and subject to the following sentence, Awards granted under the Plan shall be subject to a minimum vesting period of one (1) year. Notwithstanding the foregoing, (i) the Administrator may provide in an Award Agreement or following the time of grant that the vesting of an Award shall accelerate in the event of the Participant’s death or Disability and (ii) the Administrator may grant $ZDUGV FRYHULQJ YH SHUFHQW (5%) RU IHZHU RI WKH WRWDO QXPEHU RI 6KDUHV DXWKRUL]HG XQGHU WKH 3ODQ ZLWKRXW UHVSHFW to the above-described minimum vesting requirement. Notwithstanding the foregoing, with respect to Awards to non-employee Directors, the vesting of such Awards will be deemed to satisfy the one (1) year minimum vesting requirement to the extent that the Awards vest on the earlier of the one (1) year anniversary of the date of grant DQG WKH QH[W DQQXDO PHHWLQJ RI WKH &RPSDQeV VWRFNKROGHUV WKDW LV DW OHDVW IW (50) ZHHNV DIWHU WKH LPPHGLDWHO preceding year’s annual meeting. (e) Substitute Awards shall not reduce the Shares authorized for grant under the Plan. In the event that a company DFTXLUHG E WKH &RPSDQ RU DQ $OLDWH RU ZLWK ZKLFK WKH &RPSDQ RU DQ $OLDWH FRPELQHV KDV VKDUHV DYDLODEOH under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan; provided, that Awards using such available Shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and VKDOO RQO EH PDGH WR LQGLYLGXDOV ZKR ZHUH QRW HPSORHG E RU SURYLGLQJ VHUYLFHV WR WKH &RPSDQ RU LWV $OLDWHV immediately prior to such acquisition or combination. (I ) ZQ WKH HYHQW WKDW WKH &RPSDQ RU DQ $OLDWH WKHUHRI FRQVXPPDWHV D WUDQVDFWLRQ GHVFULEHG LQ &RGH 6HFWLRQ 424(D) (e.g., the acquisition of property or stock from an unrelated corporation), persons who become Employees or Directors in account of such transaction may be granted Substitute Awards in substitution for awards granted by their former employer, and any such substitute Options or Stock Appreciation Rights may be granted with an Exercise Price less than the Fair Market Value of a Share on the grant date thereof; provided, however, the grant of VXFK VXEVWLWXWH 2SWLRQ RU 6WRFN $SSUHFLDWLRQ 5LJKW VKDOO QRW FRQVWLWXWH D IPRGLFDWLRQI DV GHQHG LQ &RGH 6HFWLRQ 424(K)(3) DQG WKH DSSOLFDEOH 7UHDVXU UHJXODWLRQV. 6(&7Z21 5.(48Z7$%/( $'-8670(176. In the event of any Change in Capitalization, including, without limitation, a Change in Control, an equitable substitution or proportionate adjustment shall be made, in each case, as may be determined by the Administrator, in its sole discretion, in (a) the aggregate number of Shares reserved for issuance under the Plan and the maximum number of 6KDUHV WKDW PD EH VXEMHFW WR $ZDUGV JUDQWHG WR DQ 3DUWLFLSDQW LQ DQ FDOHQGDU RU VFDO HDU, (E) WKH NLQG, QXPEHU and Exercise Price subject to outstanding Options and Stock Appreciation Rights granted under the Plan; provided, however, that any such substitution or adjustment with respect to Options and Stock Appreciation Rights shall occur in accordance with the requirements of Code Section 409A, and (c) the kind, number and purchase price of Shares subject to outstanding Restricted Shares or Other Share Based Awards granted under the Plan, in each case as may be determined by the Administrator, in its sole discretion; provided, however, that any fractional Shares resulting from the adjustment shall be eliminated. Such other equitable substitutions or adjustments shall be made as may be determined by the Administrator, in its sole discretion. Without limiting the generality of the foregoing, in connection with a Change in Capitalization, the Administrator may provide, in its sole discretion, for the cancellation of any outstanding Award granted hereunder (i) in exchange for payment in cash or other property having an aggregate Fair Market Value of the Shares covered by such Award, reduced by the aggregate Exercise Price or purchase price thereof, if any, and (ii) with respect to any Awards for which the Exercise Price or purchase price per share of Common Stock is greater than or equal to the then current Fair Market Value per share of Common Stock, for no consideration. Notwithstanding anything contained in the Plan to the contrary, any adjustment with respect to an Incentive Stock Option due to an adjustment or substitution described in this Section 5 shall comply with the rules of Code Section 424(a), and in no event shall any DGMXVWPHQW EH PDGH ZKLFK ZRXOG UHQGHU DQ ZQFHQWLYH 6WRFN 2SWLRQ JUDQWHG KHUHXQGHU WR EH GLVTXDOLHG DV DQ LQFHQWLYH stock option for purposes of Code Section 422. The Administrator’s determinations pursuant to this Section 5 shall be QDO, ELQGLQJ DQG FRQFOXVLYH. 6(&7Z21 6.(/Z*Z%Z/Z7 <. The Participants under the Plan shall be selected from time to time by the Administrator, in its sole discretion, from among Eligible Recipients. 72

 

6(&7Z21 7.237Z216. (a) * HQHUDO. The Administrator may, in its sole discretion, grant Options to Participants. Solely with respect to Participants ZKR DUH (PSORHHV, WKH $GPLQLVWUDWRU PD JUDQW ZQFHQWLYH 6WRFN 2SWLRQV, 1RQTXDOLHG 6WRFN 2SWLRQV RU D FRPELQDWLRQ RI ERWK. :LWK UHVSHFW WR DOO RWKHU 3DUWLFLSDQWV, WKH $GPLQLVWUDWRU PD JUDQW RQO 1RQTXDOLHG 6WRFN Options. Each Participant who is granted an Option shall enter into an Award Agreement with the Company, containing such terms and conditions as the Administrator shall determine, in its sole discretion, which Award Agreement shall VSHFLI ZKHWKHU WKH 2SWLRQ LV DQ ZQFHQWLYH 6WRFN 2SWLRQ RU D 1RQTXDOLHG 6WRFN 2SWLRQ DQG VKDOO VHW IRUWK, DPRQJ other things, the Exercise Price of the Option, the term of the Option and provisions regarding exercisability of the Option granted thereunder. The provisions of each Option need not be the same with respect to each Participant. More than one Option may be granted to the same Participant and be outstanding concurrently hereunder. Options JUDQWHG XQGHU WKH 3ODQ VKDOO EH VXEMHFW WR WKH WHUPV DQG FRQGLWLRQV VHW IRUWK LQ WKLV 6HFWLRQ 7 DQG VKDOO FRQWDLQ VXFK additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable and set forth in the applicable Award Agreement. The prospective recipient of an Option shall not have any rights with respect to such Award, unless and until such recipient has received an Award Agreement and, if required by the Administrator in the Award Agreement, executed and delivered a fully executed copy thereof to the Company, within a SHULRG RI VL[W (60) GDV (RU VXFK RWKHU SHULRG DV WKH $GPLQLVWUDWRU PD VSHFLI) DIWHU WKH DZDUG GDWH. (b) /LPLWV RQ ZQFHQWLYH 6WRFN 2SWLRQV. If the Administrator grants Incentive Stock Options, then to the extent that the DJJUHJDWH IDLU PDUNHW YDOXH RI 6KDUHV ZLWK UHVSHFW WR ZKLFK ZQFHQWLYH 6WRFN 2SWLRQV DUH H[HUFLVDEOH IRU WKH UVW WLPH by any individual during any calendar year (under all plans of the Company) exceeds $100,000, such Options will be WUHDWHG DV 1RQTXDOLHG 6WRFN 2SWLRQV WR WKH H[WHQW UHTXLUHG E &RGH 6HFWLRQ 422. (c) Exercise Price. The Exercise Price of Shares purchasable under an Option shall be determined by the Administrator in its sole discretion at the time of grant; provided, however, that (i) in no event shall the Exercise Price of an Option be less than RQH KXQGUHG SHUFHQW (100%) RI WKH )DLU 0DUNHW 9DOXH RI D 6KDUH RQ WKH GDWH RI JUDQW, DQG (LL) QR ZQFHQWLYH 6WRFN 2SWLRQ JUDQWHG WR D WHQ SHUFHQW (10%) VWRFNKROGHU RI WKH &RPSDQ (ZLWKLQ WKH PHDQLQJ RI &RGH 6HFWLRQ 422(E)(6)) VKDOO KDYH DQ ([HUFLVH 3ULFH SHU 6KDUH OHVV WKDQ RQH-KXQGUHG WHQ SHUFHQW (110%) RI WKH )DLU 0DUNHW 9DOXH RI D 6KDUH RQ VXFK GDWH. (d) 2SWLRQ 7HUP. 7KH PD[LPXP WHUP RI HDFK 2SWLRQ VKDOO EH [HG E WKH $GPLQLVWUDWRU, EXW LQ QR HYHQW VKDOO (L) DQ Option be exercisable more than ten (10) years after the date such Option is granted, and (ii) an Incentive Stock 2SWLRQ JUDQWHG WR D WHQ SHUFHQW (10%) VWRFNKROGHU RI WKH &RPSDQ (ZLWKLQ WKH PHDQLQJ RI &RGH 6HFWLRQ 422(E) (6)) EH H[HUFLVDEOH PRUH WKDQ YH (5) HDUV DIWHU WKH GDWH VXFK 2SWLRQ LV JUDQWHG. (DFK 2SWLRQeV WHUP LV VXEMHFW WR earlier expiration pursuant to the applicable provisions in the Plan and the Award Agreement. Notwithstanding the foregoing, the Administrator shall have the authority to accelerate the exercisability of any outstanding Option at such time and under such circumstances as the Administrator, in its sole discretion, deems appropriate. Notwithstanding DQ FRQWUDU SURYLVLRQ LQ WKLV 3ODQ (LQFOXGLQJ, ZLWKRXW OLPLWDWLRQ, 6HFWLRQ 7(K)), LI, RQ WKH GDWH DQ RXWVWDQGLQJ 2SWLRQ would expire, the exercise of the Option, including by a “net exercise” or “cashless” exercise, would violate applicable securities laws or any insider trading policy maintained by the Company from time to time, the expiration date applicable to the Option will be extended, except to the extent such extension would violate Code Section 409A, to D GDWH WKDW LV WKLUW (30) FDOHQGDU GDV DIWHU WKH GDWH WKH H[HUFLVH RI WKH 2SWLRQ ZRXOG QR ORQJHU YLRODWH DSSOLFDEOH securities laws or any such insider trading policy. (e) ([HUFLVDELOLW. Each Option shall be exercisable at such time or times and subject to such terms and conditions, LQFOXGLQJ WKH DWWDLQPHQW RI SUH-HVWDEOLVKHG 3HUIRUPDQFH *RDOV, DV VKDOO EH GHWHUPLQHG E WKH $GPLQLVWUDWRU LQ the applicable Award Agreement. The Administrator may also provide that any Option shall be exercisable only in installments, and the Administrator may waive such installment exercise provisions at any time, in whole or in part, based on such factors as the Administrator may determine in its sole discretion. Notwithstanding anything to the contrary contained herein, an Option may not be exercised for a fraction of a share. (f ) 0HWKRG RI ([HUFLVH. Options may be exercised in whole or in part by giving written notice of exercise to the Company specifying the number of Shares to be purchased, accompanied by payment in full of the aggregate Exercise Price of the Shares so purchased in cash or its equivalent, as determined by the Administrator. As determined by the Administrator, in its sole discretion, with respect to any Option or category of Options, payment in whole or in part may also be made (i) by means of consideration received under any cashless exercise procedure approved by the Administrator (including the withholding of Shares otherwise issuable upon exercise), (ii) in the form of unrestricted Shares already owned by the Participant which have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Shares as to which such Option shall be exercised, (iii) any other form of consideration approved by the Administrator and permitted by applicable law or (iv) any combination of the foregoing. In determining which methods a Participant may utilize to pay the Exercise Price, the Administrator may consider such factors as it determines are appropriate; provided, however, that with respect to Incentive Stock Options, all such discretionary determinations shall be made by the $GPLQLVWUDWRU DW WKH WLPH RI JUDQW DQG VSHFLHG LQ WKH $ZDUG $JUHHPHQW. 2021 Proxy Statement 73

 

(g) 5LJKWV DV 6WRFNKROGHU. A Participant shall have no rights to dividends or any other rights of a stockholder with respect to the Shares subject to an Option until the Participant has given written notice of the exercise thereof, has paid in full for VXFK 6KDUHV DQG KDV VDWLVHG WKH UHTXLUHPHQWV RI 6HFWLRQ 16 RI WKH 3ODQ. (h) 7HUPLQDWLRQ RI (PSORPHQW RU 6HUYLFH. Unless the applicable Award Agreement provides otherwise, in the event that the HPSORPHQW RU VHUYLFH RI D 3DUWLFLSDQW ZLWK WKH &RPSDQ DQG DOO $OLDWHV WKHUHRI VKDOO WHUPLQDWH, WKH IROORZLQJ WHUPV and conditions shall apply: (i) In the event of the termination of a Participant’s employment or service by the Company without Cause or due to a resignation by the Participant for any reason, (A) Options granted to such Participant, to the extent that they are exercisable at the time of such termination, shall remain exercisable until the date that is ninety (90) days after such termination (with such period being extended to one (1) year after the date of such termination in the event of the Participant’s death during such ninety (90) day period), on which date they shall expire, and (B) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term. (ii) In the event of the termination of a Participant’s employment or service as a result of the Participant’s Disability or death, (A) Options granted to such Participant, to the extent that they were exercisable at the time of such termination, shall remain exercisable until the date that is one (1) year after such termination, on which date they shall expire, and (B) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term. (iii) In the event of the termination of a Participant’s employment or service for Cause, all outstanding Options granted to such Participant shall expire at the commencement of business on the date of such termination. (iv) For purposes of determining which Options are exercisable upon termination of employment or service IRU SXUSRVHV RI WKLV 6HFWLRQ 7(K), 2SWLRQV WKDW DUH QRW H[HUFLVDEOH VROHO GXH WR D EODFNRXW SHULRG VKDOO EH considered exercisable. (v) Notwithstanding anything herein to the contrary, an Incentive Stock Option may not be exercised more than WKUHH (3) PRQWKV IROORZLQJ WKH GDWH DV RI ZKLFK D 3DUWLFLSDQW FHDVHV WR EH DQ (PSORHH IRU DQ UHDVRQ RWKHU WKDQ GHDWK RU 'LVDELOLW. ZQ WKH HYHQW WKDW DQ 2SWLRQ LV H[HUFLVDEOH IROORZLQJ WKH GDWH WKDW LV WKUHH (3) PRQWKV following the date as of which a Participant ceases to be an Employee for any reason other than death or 'LVDELOLW, VXFK 2SWLRQ VKDOO EH GHHPHG WR EH D 1RQTXDOLHG 6WRFN 2SWLRQ. (i) 2WKHU &KDQJH LQ (PSORPHQW 6WDWXV. $Q 2SWLRQ PD EH DHFWHG, ERWK ZLWK UHJDUG WR YHVWLQJ VFKHGXOH DQG WHUPLQDWLRQ, by leaves of absence, changes from full-time to part-time employment, partial disability or other changes in the employment status or service of a Participant, as evidenced in a Participant’s Award Agreement. (j) &KDQJH LQ &RQWURO. Notwithstanding anything herein to the contrary, upon a Change in Control, all outstanding Options shall be subject to Section 12 of the Plan. (k) $XWRPDWLF ([HUFLVH. Unless otherwise provided by the Administrator in an Award Agreement or otherwise, or as otherwise directed by the Participant in writing to the Company, each vested and exercisable Option outstanding on the Automatic Exercise Date with an Exercise Price per Share that is less than the Fair Market Value per Share as of such date shall automatically and without further action by the Participant or the Company be exercised on the Automatic Exercise Date. In the sole discretion of the Administrator, payment of the exercise price of any such Option VKDOO EH PDGH SXUVXDQW WR 6HFWLRQ 7(I )(L) RU (LL), DQG WKH &RPSDQ RU DQ $OLDWH VKDOO GHGXFW RU ZLWKKROG DQ DPRXQW VXFLHQW WR VDWLVI DOO WD[HV DVVRFLDWHG ZLWK VXFK H[HUFLVH LQ DFFRUGDQFH ZLWK 6HFWLRQ 16. 8QOHVV RWKHUZLVH GHWHUPLQHG E WKH $GPLQLVWUDWRU, WKLV 6HFWLRQ 7(N) VKDOO QRW DSSO WR DQ 2SWLRQ LI WKH 3DUWLFLSDQW eV HPSORPHQW RU VHUYLFH KDV terminated on or before the Automatic Exercise Date. For the avoidance of doubt, no Option with an Exercise Price per Share that is equal to or greater the Fair Market Value per Share on the Automatic Exercise Date shall be exercised SXUVXDQW WR WKLV 6HFWLRQ 7(N). 6(&7Z21 8.672&. $335(&Z$7Z21 5Z*+76. (a) *HQHUDO. Stock Appreciation Rights may be granted either alone (“Free Standing Rights”) or in conjunction with all or part of any Option granted under the Plan (“Related Rights”). Related Rights may be granted either at or after the time of the grant of such Option. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, grants of Stock Appreciation Rights shall be made, the number of Shares to be awarded, the price per Share, and all other conditions of Stock Appreciation Rights. Notwithstanding the foregoing, no Related Right may be granted for more Shares than are subject to the Option to which it relates and any Stock Appreciation Right must be 74

 

 

granted with an Exercise Price not less than the Fair Market Value of a Share on the date of grant. The provisions of Stock Appreciation Rights need not be the same with respect to each Participant. Stock Appreciation Rights granted XQGHU WKH 3ODQ VKDOO EH VXEMHFW WR WKH IROORZLQJ WHUPV DQG FRQGLWLRQV VHW IRUWK LQ WKLV 6HFWLRQ 8 DQG VKDOO FRQWDLQ such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable, as set forth in the applicable Award Agreement. (b) $ZDUGV; 5LJKWV DV 6WRFNKROGHU. The prospective recipient of a Stock Appreciation Right shall not have any rights with respect to such Award, unless and until such recipient has received an Award Agreement and, if required by the Administrator in the Award Agreement, executed and delivered a fully executed copy thereof to the Company, within D SHULRG RI VL[W (60) GDV (RU VXFK RWKHU SHULRG DV WKH $GPLQLVWUDWRU PD VSHFLI) DIWHU WKH DZDUG GDWH. 3DUWLFLSDQWV who are granted Stock Appreciation Rights shall have no rights as stockholders of the Company with respect to the grant or exercise of such rights. (c) ( [HUFLVDELOLW. (i) Stock Appreciation Rights that are Free Standing Rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator in the applicable Award Agreement. (ii) Stock Appreciation Rights that are Related Rights shall be exercisable only at such time or times and to the H[WHQW WKDW WKH 2SWLRQV WR ZKLFK WKH UHODWH VKDOO EH H[HUFLVDEOH LQ DFFRUGDQFH ZLWK WKH SURYLVLRQV RI 6HFWLRQ 7 DERYH DQG WKLV 6HFWLRQ 8 RI WKH 3ODQ. (d) 3DPHQW 8SRQ ([HUFLVH. (i) Upon the exercise of a Free Standing Right, the Participant shall be entitled to receive up to, but not more than, that number of Shares, determined using the Fair Market Value, equal in value to the excess of the Fair Market 9DOXH DV RI WKH GDWH RI H[HUFLVH RYHU WKH SULFH SHU VKDUH VSHFLHG LQ WKH )UHH 6WDQGLQJ 5LJKW PXOWLSOLHG E WKH number of Shares in respect of which the Free Standing Right is being exercised. (ii) A Related Right may be exercised by a Participant by surrendering the applicable portion of the related Option. Upon such exercise and surrender, the Participant shall be entitled to receive up to, but not more than, that number of Shares, determined using the Fair Market Value, equal in value to the excess of the Fair Market 9DOXH DV RI WKH GDWH RI H[HUFLVH RYHU WKH ([HUFLVH 3ULFH VSHFLHG LQ WKH UHODWHG 2SWLRQ PXOWLSOLHG E WKH QXPEHU of Shares in respect of which the Related Right is being exercised. Options which have been so surrendered, in whole or in part, shall no longer be exercisable to the extent the Related Rights have been so exercised. (iii) Notwithstanding the foregoing, the Administrator may determine to settle the exercise of a Stock Appreciation Right in cash (or in any combination of Shares and cash). (e) 7HUPLQDWLRQ RI (PSORPHQW RU 6HUYLFH. (L) 6XEMHFW WR 6HFWLRQ 8(I ), LQ WKH HYHQW RI WKH WHUPLQDWLRQ RI HPSORPHQW RU VHUYLFH ZLWK WKH &RPSDQ DQG DOO $OLDWHV WKHUHRI RI D 3DUWLFLSDQW ZKR KDV EHHQ JUDQWHG RQH RU PRUH )UHH 6WDQGLQJ 5LJKWV, VXFK ULJKWV VKDOO be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator in the applicable Award Agreement. (LL) 6 XEMHFW WR 6HFWLRQ 8(I ), LQ WKH HYHQW RI WKH WHUPLQDWLRQ RI HPSORPHQW RU VHUYLFH ZLWK WKH &RPSDQ DQG DOO $OLDWHV WKHUHRI RI D 3DUWLFLSDQW ZKR KDV EHHQ JUDQWHG RQH RU PRUH 5HODWHG 5LJKWV, VXFK ULJKWV VKDOO EH exercisable at such time or times and subject to such terms and conditions as set forth in the related Options. (f ) Term. (L) 7KH WHUP RI HDFK )UHH 6WDQGLQJ 5LJKW VKDOO EH [HG E WKH $GPLQLVWUDWRU, EXW QR )UHH 6WDQGLQJ 5LJKW VKDOO EH exercisable more than ten (10) years after the date such right is granted. (ii) The term of each Related Right shall be the term of the Option to which it relates, but no Related Right shall be exercisable more than ten (10) years after the date such right is granted. (g) &KDQJH LQ &RQWURO. Notwithstanding anything herein to the contrary, upon a Change in Control, all outstanding Stock Appreciation Rights shall be subject to Section 12 of the Plan. (h) $XWRPDWLF ([HUFLVH. Unless otherwise provided by the Administrator in an Award Agreement or otherwise, or as otherwise directed by the Participant in writing to the Company, each vested and exercisable Stock Appreciation Right outstanding on the Automatic Exercise Date with an Exercise Price per Share that is less than the Fair Market Value per Share as of such date shall automatically and without further action by the Participant or the Company be H[HUFLVHG RQ WKH $XWRPDWLF ([HUFLVH 'DWH. 7KH &RPSDQ RU DQ $OLDWH VKDOO GHGXFW RU ZLWKKROG DQ DPRXQW VXFLHQW WR VDWLVI DOO WD[HV DVVRFLDWHG ZLWK VXFK H[HUFLVH LQ DFFRUGDQFH ZLWK 6HFWLRQ 16. 8QOHVV RWKHUZLVH GHWHUPLQHG E WKH 2021 Proxy Statement 75

 

$GPLQLVWUDWRU, WKLV 6HFWLRQ 8(K) VKDOO QRW DSSO WR D 6WRFN $SSUHFLDWLRQ 5LJKW LI WKH 3DUWLFLSDQW eV HPSORPHQW RU VHUYLFH has terminated on or before the Automatic Exercise Date. For the avoidance of doubt, no Stock Appreciation Right with an Exercise Price per Share that is equal to or greater the Fair Market Value per Share on the Automatic Exercise 'DWH VKDOO EH H[HUFLVHG SXUVXDQW WR WKLV 6HFWLRQ 8(K). 6(&7Z21 9.5(675Z&7(' 6+$5(6. (a) *HQHUDO. Restricted Shares may be issued either alone or in addition to other Awards granted under the Plan. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, grants of Restricted Shares shall be made; the number of Shares to be awarded; the price, if any, to be paid by the Participant for the acquisition of Restricted Shares; the Restricted Period, if any, applicable to Restricted Shares; the Performance *RDOV (LI DQ) DSSOLFDEOH WR 5HVWULFWHG 6KDUHV; DQG DOO RWKHU FRQGLWLRQV RI WKH 5HVWULFWHG 6KDUHV. ZI WKH UHVWULFWLRQV, 3HUIRUPDQFH *RDOV DQG/RU FRQGLWLRQV HVWDEOLVKHG E WKH $GPLQLVWUDWRU DUH QRW DWWDLQHG, D 3DUWLFLSDQW VKDOO IRUIHLW KLV or her Restricted Shares in accordance with the terms of the grant. The provisions of the Restricted Shares need not be the same with respect to each Participant. (b) AZDUGV DQG &HUWLFDWHV. The prospective recipient of Restricted Shares shall not have any rights with respect to any such Award, unless and until such recipient has received an Award Agreement and, if required by the Administrator in the Award Agreement, executed and delivered a fully executed copy thereof to the Company, within a period of sixty (60) GDV (RU VXFK RWKHU SHULRG DV WKH $GPLQLVWUDWRU PD VSHFLI) DIWHU WKH DZDUG GDWH. ([FHSW DV RWKHUZLVH SURYLGHG in Section 9(c) of the Plan, (i) each Participant who is granted an award of Restricted Shares may, in the Company’s sole GLVFUHWLRQ, EH LVVXHG D VWRFN FHUWLFDWH LQ UHVSHFW RI VXFK 5HVWULFWHG 6KDUHV; DQG (LL) DQ VXFK FHUWLFDWH VR LVVXHG VKDOO be registered in the name of the Participant, and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to any such Award. 7KH &RPSDQ PD UHTXLUH WKDW WKH VWRFN FHUWLFDWHV, LI DQ, HYLGHQFLQJ 5HVWULFWHG 6KDUHV JUDQWHG KHUHXQGHU EH KHOG in the custody of the Company until the restrictions thereon shall have lapsed, and that, as a condition of any award of Restricted Shares, the Participant shall have delivered a stock power, endorsed in blank, relating to the Shares covered by such Award. Notwithstanding anything in the Plan to the contrary, any Restricted Shares (whether before or after any vesting FRQGLWLRQV KDYH EHHQ VDWLVHG) PD, LQ WKH &RPSDQeV VROH GLVFUHWLRQ, EH LVVXHG LQ XQFHUWLFDWHG IRUP SXUVXDQW WR WKH customary arrangements for issuing shares in such form. (c) RHVWULFWLRQV DQG &RQGLWLRQV. The Restricted Shares granted pursuant to this Section 9 shall be subject to the following restrictions and conditions and any additional restrictions or conditions as determined by the Administrator at the time of grant or thereafter: (i) The Administrator may, in its sole discretion, provide for the lapse of restrictions in installments and may accelerate or waive such restrictions in whole or in part based on such factors and such circumstances as the Administrator may determine, in its sole discretion, including, but not limited to, the attainment of certain 3HUIRUPDQFH *RDOV, WKH 3DUWLFLSDQW eV WHUPLQDWLRQ RI HPSORPHQW RU VHUYLFH DV D QRQ-HPSORHH 'LUHFWRU RU &RQVXOWDQW RI WKH &RPSDQ RU DQ $OLDWH WKHUHRI, RU WKH 3DUWLFLSDQW eV GHDWK RU 'LVDELOLW. (ii) Subject to this Section 9(c)(ii), the Participant shall generally have the rights of a stockholder of the Company with respect to Restricted Shares during the Restricted Period. In the Administrator’s discretion and as provided in the applicable Award Agreement, a Participant may be entitled to dividends or dividend equivalents on an Award of Restricted Shares, which will be payable in accordance with the terms of such grant DV GHWHUPLQHG E WKH $GPLQLVWUDWRU LQ DFFRUGDQFH ZLWK 6HFWLRQ 17 RI WKH 3ODQ. &HUWLFDWHV IRU XQUHVWULFWHG Shares may, in the Company’s sole discretion, be delivered to the Participant only after the Restricted Period has expired without forfeiture in respect of such Restricted Shares, except as the Administrator, in its sole discretion, shall otherwise determine. (iii) The rights of Participants granted Restricted Shares upon termination of employment or service as a non-HPSORHH 'LUHFWRU RU &RQVXOWDQW RI WKH &RPSDQ RU DQ $OLDWH WKHUHRI WHUPLQDWHV IRU DQ UHDVRQ GXULQJ WKH Restricted Period shall be set forth in the Award Agreement. (d) &KDQJH LQ &RQWURO. Notwithstanding anything herein to the contrary, upon a Change in Control, all outstanding Restricted Shares shall be subject to Section 12 of the Plan. 76

 

6(&7Z21 10.5(675Z&7(' 672&. 81Z76. (a) *HQHUDO. Restricted Stock Units may be issued either alone or in addition to other Awards granted under the Plan. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, grants of Restricted Stock Units shall be made; the number of Restricted Stock Units to be awarded; the Restricted Period, if any, applicable WR 5HVWULFWHG 6WRFN 8QLWV; WKH 3HUIRUPDQFH *RDOV (LI DQ) DSSOLFDEOH WR 5HVWULFWHG 6WRFN 8QLWV; DQG DOO RWKHU FRQGLWLRQV RI WKH 5HVWULFWHG 6WRFN 8QLWV. ZI WKH UHVWULFWLRQV, 3HUIRUPDQFH *RDOV DQG/RU FRQGLWLRQV HVWDEOLVKHG E WKH $GPLQLVWUDWRU are not attained, a Participant shall forfeit his or her Restricted Stock Units in accordance with the terms of the grant. The provisions of Restricted Stock Units need not be the same with respect to each Participant. (b) $ZDUG $JUHHPHQW. The prospective recipient of Restricted Stock Units shall not have any rights with respect to any such Award, unless and until such recipient has received an Award Agreement and, if required by the Administrator in the $ZDUG $JUHHPHQW, H[HFXWHG DQG GHOLYHUHG D IXOO H[HFXWHG FRS WKHUHRI WR WKH &RPSDQ, ZLWKLQ D SHULRG RI VL[W (60) days (or such other period as the Administrator may specify) after the award date. (c) 5HVWULFWLRQV DQG &RQGLWLRQV. The Restricted Stock Units granted pursuant to this Section 10 shall be subject to the following restrictions and conditions and any additional restrictions or conditions as determined by the Administrator at the time of grant or, subject to Code Section 409A, thereafter: (i) The Administrator may, in its sole discretion, provide for the lapse of restrictions in installments and may accelerate or waive such restrictions in whole or in part based on such factors and such circumstances as the Administrator may determine, in its sole discretion, including, but not limited to, the attainment of certain 3HUIRUPDQFH *RDOV, WKH 3DUWLFLSDQW eV WHUPLQDWLRQ RI HPSORPHQW RU VHUYLFH DV D QRQ-HPSORHH 'LUHFWRU RU &RQVXOWDQW RI WKH &RPSDQ RU DQ $OLDWH WKHUHRI, RU WKH 3DUWLFLSDQW eV GHDWK RU 'LVDELOLW. (ii) Participants holding Restricted Stock Units shall have no voting rights. A Restricted Stock Unit may, at the $GPLQLVWUDWRUeV GLVFUHWLRQ, FDUU ZLWK LW D ULJKW WR GLYLGHQG HTXLYDOHQWV, VXEMHFW WR 6HFWLRQ 17 RI WKH 3ODQ. Such right would entitle the holder to be credited with an amount equal to all cash dividends paid on one Share while the Restricted Stock Unit is outstanding. The Administrator, in its discretion, may grant dividend equivalents from the date of grant or only after a Restricted Stock Unit is vested. (iii) The rights of Participants granted Restricted Stock Units upon termination of employment or service as a non-HPSORHH 'LUHFWRU RU &RQVXOWDQW RI WKH &RPSDQ RU DQ $OLDWH WKHUHRI WHUPLQDWHV IRU DQ UHDVRQ GXULQJ WKH Restricted Period shall be set forth in the Award Agreement. (d) 6HWWOHPHQW RI 5HVWULFWHG 6WRFN 8QLWV. Settlement of vested Restricted Stock Units shall be made to Participants in the form of Shares, unless the Administrator, in its sole discretion, provides for the payment of the Restricted Stock Units in cash (or partly in cash and partly in Shares) equal to the value of the Shares that would otherwise be distributed to the Participant. (e) &KDQJH LQ &RQWURO. Notwithstanding anything herein to the contrary, upon a Change in Control, all outstanding Restricted Stock Units shall be subject to Section 12 of the Plan. 6(&7Z21 11.27+(5 6+$5( %$6(' 25 &$6+-%$6(' $:$5'6. (a) The Administrator is authorized to grant Awards to Participants in the form of Other Share Based Awards or Other Cash-Based Awards, as deemed by the Administrator to be consistent with the purposes of the Plan and as evidenced by an Award Agreement. The Administrator shall determine the terms and conditions of such Awards, consistent with WKH WHUPV RI WKH 3ODQ, DW WKH GDWH RI JUDQW RU WKHUHDIWHU, LQFOXGLQJ DQ 3HUIRUPDQFH *RDOV DQG SHUIRUPDQFH SHULRGV. Shares or other securities or property delivered pursuant to an Award in the nature of a purchase right granted under this Section 11 shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, Shares, other Awards, notes or other property, as the Administrator shall determine, subject to any required corporate action. (b) The prospective recipient of an Other Share-Based Award or Other Cash-Based Award shall not have any rights with respect to such Award, unless and until such recipient has received an Award Agreement and, if required by the Administrator in the Award Agreement, executed and delivered a fully executed copy thereof to the Company, within a SHULRG RI VL[W (60) GDV (RU VXFK RWKHU SHULRG DV WKH $GPLQLVWUDWRU PD VSHFLI) DIWHU WKH DZDUG GDWH. (c) Notwithstanding anything herein to the contrary, upon a Change in Control, all outstanding Other Share-Based Awards and Other Cash-Based Awards shall be subject to Section 12 of the Plan. 2021 Proxy Statement 77

 

6(&7Z21 12.&+$1*( Z1 &21752/. (a) Unless otherwise determined by the Administrator and evidenced in an Award Agreement, subject to Section 12(b) below, in the event that (i) a Change in Control occurs and any Awards are continued, assumed or substituted for an economically equivalent award in such Change in Control transaction, and (ii) the Participant’s employment or service is WHUPLQDWHG E WKH &RPSDQ, LWV VXFFHVVRU RU $OLDWH WKHUHRI ZLWKRXW &DXVH RQ RU DIWHU WKH HHFWLYH GDWH RI WKH &KDQJH in Control but prior to twenty-four (24) months following the Change in Control, then as of the date of such termination: (1) any unvested or unexercisable portion of any such Award carrying a right to exercise shall become fully vested and exercisable; and (2) the restrictions and forfeiture conditions applicable to any such Award shall lapse and such Awards shall be deemed fully vested and any performance conditions imposed with respect to such Awards shall be deemed to be fully achieved at the target level. (b) Unless otherwise determined by the Administrator and evidenced in an Award Agreement, in the event that a Change in Control occurs and any Awards are not continued, assumed or substituted for an economically equivalent award in connection with such Change in Control transaction, then, as of the date of such Change in Control: (1) any unvested or unexercisable portion of any such Award carrying a right to exercise shall become fully vested and exercisable; and (2) the restrictions and forfeiture conditions applicable to any such Award shall lapse and such Awards shall be deemed fully vested and any performance conditions imposed with respect to such Awards shall be deemed to be fully achieved at the greater of (x) target or (y) actual performance through the date of such Change in Control. 6(&7Z21 13.$0(1'0(17 $1' 7(50Z1$7Z21. (a) The Board or the Committee may amend, alter or terminate the Plan, but no amendment, alteration, or termination shall be made that would adversely alter or impair the rights of a Participant under any Award theretofore granted without such Participant’s prior written consent. (b) Notwithstanding the foregoing, (i) approval of the Company’s stockholders shall be obtained for any amendment that would require such approval in order to satisfy the requirements of Code Section 422, if applicable, any rules of the stock exchange on which the Shares are traded or other applicable law, and (ii) without stockholder approval to the extent required by the rules of any applicable national securities exchange or inter-dealer quotation system on which the Shares are listed or quoted, except as otherwise permitted under Section 5 of the Plan, (A) no amendment RU PRGLFDWLRQ PD UHGXFH WKH ([HUFLVH 3ULFH RI DQ 2SWLRQ RU 6WRFN $SSUHFLDWLRQ 5LJKW, (%) WKH $GPLQLVWUDWRU PD not cancel any outstanding Option or Stock Appreciation Right and replace it with a new Option or Stock Appreciation Right, another Award or cash and (C) the Administrator may not take any other action that is considered a “repricing” for purposes of the stockholder approval rules of the applicable securities exchange or inter-dealer quotation system. (c) Subject to the terms and conditions of the Plan and Code Section 409A, the Administrator may modify, extend or renew outstanding Awards under the Plan, or accept the surrender of outstanding Awards (to the extent not already exercised) and grant new Awards in substitution of them (to the extent not already exercised). (G) 1RWZLWKVWDQGLQJ WKH IRUHJRLQJ, QR DOWHUDWLRQ, PRGLFDWLRQ RU WHUPLQDWLRQ RI DQ $ZDUG ZLOO, ZLWKRXW WKH SULRU ZULWWHQ consent of the Participant, adversely alter or impair any rights or obligations under any Award already granted under the Plan. 6(&7Z21 14.81)81'(' 67$786 2) 3/$1. The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments not yet made or Shares not yet transferred to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general unsecured creditor of the Company. 6(&7Z21 15.'()(55 $/6 2) 3$<0(17. To the extent permitted by applicable law, the Administrator, in its sole discretion, may determine that the delivery of Shares or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award, shall or may be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants (or deferred settlement or payment required by the Administrator) shall be made in accordance with Code Section 409A, if applicable, and any other applicable law. 78

 

6(&7Z21 16.:Z7++2/'Z1* 7$ ;(6. (DFK 3DUWLFLSDQW VKDOO, QR ODWHU WKDQ WKH GDWH DV RI ZKLFK WKH YDOXH RI DQ $ZDUG UVW EHFRPHV LQFOXGLEOH LQ WKH gross income of such Participant for federal, state and/or local income tax purposes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, any federal, state, or local taxes of any kind, domestic or foreign, required by law or regulation to be withheld with respect to the Award. The obligations of the Company under the Plan shall be conditional on the making of such payments or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Participant. Whenever cash is to be paid pursuant to an Award granted hereunder, the Company shall have WKH ULJKW WR GHGXFW WKHUHIURP DQ DPRXQW VXFLHQW WR VDWLVI DQ IHGHUDO, VWDWH DQG ORFDO ZLWKKROGLQJ WD[ UHTXLUHPHQWV related thereto. Whenever Shares are to be delivered pursuant to an Award, the Company shall have the right to require WKH 3DUWLFLSDQW WR UHPLW WR WKH &RPSDQ LQ FDVK DQ DPRXQW VXFLHQW WR VDWLVI DQ UHODWHG IHGHUDO, VWDWH DQG ORFDO taxes, domestic or foreign, to be withheld and applied to the tax obligations. With the approval of the Administrator, a Participant may satisfy the foregoing requirement by electing to have the Company withhold from delivery of Shares or by delivering already owned unrestricted Shares, in each case, having a value equal to the amount required to be withheld or other greater amount not exceeding the maximum statutory rate required to be collected on the transaction under applicable law, as applicable to the Participant, if such other greater amount would not, as determined by the $GPLQLVWUDWRU, UHVXOW LQ DGYHUVH QDQFLDO DFFRXQWLQJ WUHDWPHQW (LQFOXGLQJ LQ FRQQHFWLRQ ZLWK WKH HHFWLYHQHVV RI )$6% $FFRXQWLQJ 6WDQGDUGV 8SGDWH 2016-09). 6XFK 6KDUHV VKDOO EH YDOXHG DW WKHLU )DLU 0DUNHW 9DOXH RQ WKH GDWH RI ZKLFK WKH amount of tax to be withheld is determined. Fractional share amounts shall be settled in cash. Such an election may be made with respect to all or any portion of the Shares to be delivered pursuant to an Award. The Company may also use any other method of obtaining the necessary payment or proceeds, as permitted by law, to satisfy its withholding obligation with respect to any Option or other Award. 6(&7Z21 17.'Z9Z'(1'6; 'Z9Z'(1' (48Z9$/(176. Notwithstanding anything in this Plan to the contrary, to the extent that an Award contains a right to receive dividends or dividend equivalents while such Award remains unvested, such dividends or dividend equivalents will be accumulated and paid once and to the extent that the underlying Award vests. 6(&7Z21 18.121-81Z7(' 67$7(6 (03/2<((6. Without amending the Plan, the Administrator may grant Awards to eligible persons residing in non-United States MXULVGLFWLRQV RQ VXFK WHUPV DQG FRQGLWLRQV GLHUHQW IURP WKRVH VSHFLHG LQ WKH 3ODQ, LQFOXGLQJ WKH WHUPV RI DQ DZDUG agreement or plan, adopted by the Company or any Subsidiary thereof to comply with, or take advantage of favorable tax or other treatment available under, the laws of any non-United States jurisdiction, as may in the judgment of the Administrator be necessary or desirable to foster and promote achievement of the purposes of the Plan and, in IXUWKHUDQFH RI VXFK SXUSRVHV WKH $GPLQLVWUDWRU PD PDNH VXFK PRGLFDWLRQV, DPHQGPHQWV, SURFHGXUHV, VXESODQV DQG the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or its Subsidiaries operates or has employees. 6(&7Z21 19.75 $16)(5 2) $:$5'6. No purported sale, assignment, mortgage, hypothecation, transfer, charge, pledge, encumbrance, gift, transfer in trust (voting or other) or other disposition of, or creation of a security interest in or lien on, any Award or any agreement or commitment to do any of the foregoing (each, a “Transfer”) by any holder thereof in violation of the provisions of the Plan or an Award Agreement will be valid, except with the prior written consent of the Administrator, which consent may be granted or withheld in the sole discretion of the Administrator. Any purported Transfer of an Award or any HFRQRPLF EHQHW RU LQWHUHVW WKHUHLQ LQ YLRODWLRQ RI WKH 3ODQ RU DQ $ZDUG $JUHHPHQW VKDOO EH QXOO DQG YRLG DE LQLWLR, and shall not create any obligation or liability of the Company, and any person purportedly acquiring any Award or any HFRQRPLF EHQHW RU LQWHUHVW WKHUHLQ WUDQVIHUUHG LQ YLRODWLRQ RI WKH 3ODQ RU DQ $ZDUG $JUHHPHQW VKDOO QRW EH HQWLWOHG to be recognized as a holder of such Shares. Unless otherwise determined by the Administrator in accordance with the provisions of the immediately preceding sentence, an Option may be exercised, during the lifetime of the Participant, only by the Participant or, during any period during which the Participant is under a legal disability, by the Participant’s guardian or legal representative. Under no circumstances will a Participant be permitted to transfer an Option or Stock $SSUHFLDWLRQ 5LJKW WR D WKLUG-SDUW QDQFLDO LQVWLWXWLRQ ZLWKRXW SULRU VWRFNKROGHU DSSURYDO. 6(&7Z21 20.&217Z18(' (03/2<0(17. The adoption of the Plan shall not confer upon any Eligible Recipient any right to continued employment or service with WKH &RPSDQ RU DQ $OLDWH WKHUHRI, DV WKH FDVH PD EH, QRU VKDOO LW LQWHUIHUH LQ DQ ZD ZLWK WKH ULJKW RI WKH &RPSDQ RU DQ $OLDWH WKHUHRI WR WHUPLQDWH WKH HPSORPHQW RU VHUYLFH RI DQ RI LWV (OLJLEOH 5HFLSLHQWV DW DQ WLPH. 2021 Proxy Statement 79

 

 

6(&7Z21 21.())(&7Z9( '$7(. 7KH 3ODQ ZDV DSSURYHG E WKH %RDUG RQ 0DUFK >@, 2021 DQG E WKH &RPSDQeV VWRFNKROGHUV RQ 0D >@, 2021 (WKH I(HFWLYH 'DWHI). 7KH 3ODQ ZLOO EH XQOLPLWHG LQ GXUDWLRQ DQG, LQ WKH HYHQW RI 3ODQ WHUPLQDWLRQ, ZLOO UHPDLQ LQ HHFW DV ORQJ as any Shares awarded under it are outstanding and not fully vested; provided, however, that no Awards will be made XQGHU WKH 3ODQ RQ RU DIWHU WKH WHQWK DQQLYHUVDU RI WKH (HFWLYH 'DWH. )ROORZLQJ WKH (HFWLYH 'DWH, QR QHZ DZDUGV ZLOO EH granted under the Prior Plan; however, for the avoidance of doubt, the Prior Plan and any applicable award agreements issued thereunder will continue to govern any awards that remain outstanding under the Prior Plan on and after the (HFWLYH 'DWH. 1RWZLWKVWDQGLQJ DQWKLQJ WR WKH FRQWUDU LQ WKH 3ODQ, LQ QR HYHQW PD ZQFHQWLYH 6WRFN 2SWLRQV EH JUDQWHG PRUH WKDQ WHQ HDUV DIWHU WKH HDUOLHU RI (D) WKH GDWH RI WKH DGRSWLRQ RI WKH 3ODQ E WKH %RDUG RU (E) WKH (HFWLYH 'DWH. 6(&7Z21 22.&2'( 6(&7Z21 409$. 7KH LQWHQW RI WKH SDUWLHV LV WKDW SDPHQWV DQG EHQHIWV XQGHU WKH 3ODQ EH HLWKHU H[HPSW IURP &RGH 6HFWLRQ 409$ RU comply with Code Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and be administered consistent with such intent. Any payments described in the Plan WKDW DUH GXH ZLWKLQ WKH IVKRUW-WHUP GHIHUUDO SHULRGI DV GHIQHG LQ &RGH 6HFWLRQ 409$ VKDOO QRW EH WUHDWHG DV GHIHUUHG compensation unless applicable law requires otherwise. Notwithstanding anything to the contrary in the Plan, to the extent required in order to avoid accelerated taxation and/or tax penalties under Code Section 409A, amounts that would RWKHUZLVH EH SDDEOH DQG EHQHIWV WKDW ZRXOG RWKHUZLVH EH SURYLGHG XSRQ D IVHSDUDWLRQ IURP VHUYLFHI WR D 3DUWLFLSDQW ZKR LV D IVSHFLIHG HPSORHHI VKDOO EH SDLG RQ WKH IUVW EXVLQHVV GD DIWHU WKH GDWH WKDW LV VL[ (6) PRQWKV IROORZLQJ WKH Participant’s separation from service (or upon the Participant’s death, if earlier). In addition, for purposes of the Plan, HDFK DPRXQW WR EH SDLG RU EHQHIW WR EH SURYLGHG WR WKH 3DUWLFLSDQW SXUVXDQW WR WKH 3ODQ, ZKLFK FRQVWLWXWH GHIHUUHG FRPSHQVDWLRQ VXEMHFW WR &RGH 6HFWLRQ 409$, VKDOO EH FRQVWUXHG DV D VHSDUDWH LGHQWLIHG SDPHQW IRU SXUSRVHV RI &RGH Section 409A. Nothing contained in the Plan or an Award Agreement shall be construed as a guarantee of any particular WD[ HHFW ZLWK UHVSHFW WR DQ $ZDUG. 7KH &RPSDQ GRHV QRW JXDUDQWHH WKDW DQ $ZDUGV SURYLGHG XQGHU WKH 3ODQ ZLOO EH exempt from or in compliance with the provisions of Code Section 409A, and in no event will the Company be liable for any or all portion of any taxes, penalties, interest or other expenses that may be incurred by a Participant on account of any Award being subject to, but not in compliance with, Code Section 409A. 6(&7Z21 23.&203/Z$1&( :Z7+ /$:6. (a) The obligation of the Company to settle Awards in Shares or other consideration shall be subject to (i) all applicable laws, rules, and regulations, (ii) such approvals as may be required by governmental agencies or the applicable national securities exchange on which the Shares may be admitted, and (iii) policies maintained by the Company from time to time in order to comply with applicable laws, rules, regulations and corporate governance requirements, including, without limitation, with respect to insider trading restrictions. Notwithstanding any terms or conditions of DQ $ZDUG WR WKH FRQWUDU, WKH &RPSDQ VKDOO EH XQGHU QR REOLJDWLRQ WR RHU WR VHOO RU WR VHOO, DQG VKDOO EH SURKLELWHG IURP RHULQJ WR VHOO RU VHOOLQJ, DQ 6KDUHV SXUVXDQW WR DQ $ZDUG XQOHVV VXFK VKDUHV KDYH EHHQ SURSHUO UHJLVWHUHG IRU sale pursuant to the Securities Act with the Securities and Exchange Commission or unless the Company has received an opinion of counsel (if the Company has requested such an opinion), satisfactory to the Company, that such Shares PD EH RHUHG RU VROG ZLWKRXW VXFK UHJLVWUDWLRQ SXUVXDQW WR DQ DYDLODEOH H[HPSWLRQ WKHUHIURP DQG WKH WHUPV DQG conditions of such exemption have been fully complied with. The Company shall be under no obligation to register IRU VDOH XQGHU WKH 6HFXULWLHV $FW DQ RI WKH 6KDUHV WR EH RHUHG RU VROG XQGHU WKH 3ODQ. 7KH $GPLQLVWUDWRU VKDOO KDYH the authority to provide that all Shares or other securities of the Company issued under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan, the applicable Award Agreement, the federal securities laws, or the rules, regulations and other requirements of the Securities and Exchange Commission, any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or quoted and any other applicable federal, state, local or non-U.S. laws, rules, regulations and RWKHU UHTXLUHPHQWV, DQG WKH $GPLQLVWUDWRU PD FDXVH D OHJHQG RU OHJHQGV WR EH SXW RQ FHUWLIFDWHV UHSUHVHQWLQJ Shares or other securities of the Company issued under the Plan to make appropriate reference to such restrictions or may cause such Shares or other securities of the Company issued under the Plan in book-entry form to be held subject to the Company’s instructions or subject to appropriate stop-transfer orders. Notwithstanding any provision in the Plan to the contrary, the Committee reserves the right to add any additional terms or provisions to any Award granted under the Plan that it, in its sole discretion, deems necessary or advisable in order that such Award complies with the legal requirements of any governmental entity to whose jurisdiction the Award is subject. (b) The Administrator may cancel an Award or any portion thereof if it determines, in its sole discretion, that legal or contractual restrictions and/or blockage and/or other market considerations would make the Company’s acquisition of Shares from the public markets, the Company’s issuance of Shares to the Participant, the Participant’s acquisition of Shares from the Company and/or the Participant’s sale of Shares to the public markets, illegal, impracticable or 80

 

inadvisable. If the Administrator determines to cancel all or any portion of an Award in accordance with the foregoing, the Company shall, subject to any limitations or reductions as may be necessary to comply with Code Section 409A, (i) pay to the Participant an amount equal to the excess of (A) the aggregate Fair Market Value of the Shares subject to such Award or portion thereof canceled (determined as of the applicable exercise date, or the date that the Shares would have been vested or issued, as applicable), over (B) the aggregate Exercise Price (in the case of an Option or Stock Appreciation Right) or any amount payable as a condition of issuance of Shares (in the case of any other Award), and such amount shall be delivered to the Participant as soon as practicable following the cancellation of such Award or portion thereof, or (ii) in the case of Restricted Shares, Restricted Stock Units or Other Share-Based Awards, provide the Participant with a cash payment or equity subject to deferred vesting and delivery consistent with the vesting restrictions applicable to such Restricted Shares, Restricted Stock Units or Other Share-Based Awards, or the underlying Shares in respect thereof. 6(&7Z21 24.(5521(286/< $:$5'(' &203(16$7Z21. The Plan and all Awards issued hereunder shall be subject to any compensation recovery and/or recoupment policy adopted by the Company to comply with applicable law, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended, the Sarbanes-Oxley Act of 2002, as amended, or to comport with good corporate governance practices, as such policies may be amended from time to time. 6(&7Z21 25.*29(51Z1* /$:. 7KH 3ODQ VKDOO EH JRYHUQHG E DQG FRQVWUXHG LQ DFFRUGDQFH ZLWK WKH ODZV RI WKH 6WDWH RI 1HYDGD, ZLWKRXW JLYLQJ HHFW WR SULQFLSOHV RI FRQnLFWV RI ODZ RI VXFK VWDWH. 6(&7Z21 26.3/$1 '2&80(17 &21752/6. The Plan and each Award Agreement together constitute the entire agreement with respect to the subject matter hereof and thereof; provided, that in the event of any inconsistency between the Plan and such Award Agreement, the terms and conditions of the Plan shall control. 2021 Proxy Statement 81

 

STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR THE 2022 ANNUAL MEETING Pursuant to the rules promulgated by the SEC, stockholders interested in submitting a proposal for inclusion in our proxy materials and for presentation at the 2022 annual meeting of stockholders may do so by following the procedures set IRUWK LQ 5XOH 14D-8 XQGHU WKH ([FKDQJH $FW. 5XOH 14D-8 XQGHU WKH ([FKDQJH $FW DGGUHVVHV ZKHQ D FRPSDQ PXVW LQFOXGH D VWRFNKROGHUeV SURSRVDO LQ LWV SUR[ statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of VWRFNKROGHUV. 8QGHU 5XOH 14D-8, SURSRVDOV WKDW VWRFNKROGHUV LQWHQG WR KDYH LQFOXGHG LQ WKH &RPSDQeV SUR[ VWDWHPHQW and form of proxy for the 2022 annual meeting of Stockholders must be received by the Company no later than 'HFHPEHU 23, 2021. +RZHYHU, LI WKH GDWH RI WKH 2022 DQQXDO PHHWLQJ RI VWRFNKROGHUV FKDQJHV E PRUH WKDQ 30 GDV IURP the date of the 2021 Annual Meeting of Stockholders, the deadline is a reasonable time before the Company begins to SULQW DQG PDLO LWV SUR[ PDWHULDOV, ZKLFK GHDGOLQH ZLOO EH VHW IRUWK LQ D 4XDUWHUO 5HSRUW RQ )RUP 10-4 RU ZLOO RWKHUZLVH be communicated to stockholders. Stockholder proposals must also be otherwise eligible for inclusion. ZQ DGGLWLRQ WR WKH UHTXLUHPHQWV RI 5XOH 14D-8, DQG DV PRUH VSHFLIFDOO SURYLGHG IRU LQ RXU EODZV, LQ RUGHU IRU D nomination of persons for election to our Board or a proposal of business to be properly brought before our annual meeting of stockholders, nominations for election as a director and proposals for stockholder action may be made only by stockholders of the Company of record by giving written notice delivered or mailed to the Secretary of the Company: (D) LQ WKH FDVH RI DQ DQQXDO PHHWLQJ RI VWRFNKROGHUV WKDW LV FDOOHG IRU D GDWH WKDW LV ZLWKLQ WKLUW (30) GDV EHIRUH RU DIWHU the anniversary date of the immediately preceding annual meeting of stockholders, not less than one hundred twenty (120) days prior to such anniversary date; and (b) in the case of an annual meeting of stockholders that is called for a date WKDW LV QRW ZLWKLQ WKLUW (30) GDV EHIRUH RU DIWHU WKH DQQLYHUVDU GDWH RI WKH LPPHGLDWHO SUHFHGLQJ DQQXDO PHHWLQJ RI stockholders, or in the case of a special meeting of stockholders, not later than the close of business on the tenth (10th) day following the day on which the notice of meeting was mailed or public disclosure of the date of the meeting was PDGH, ZKLFKHYHU RFFXUV IUVW. ZI WKH GDWH RI WKH 2022 DQQXDO PHHWLQJ RI VWRFNKROGHUV LV WKH VDPH DV WKH GDWH RI WKH 2021 Annual Meeting of Stockholders, a stockholder making a nomination for election to our Board or a proposal of business for the 2022 annual meeting of stockholders must deliver proper notice to us no later than the close of business on January 25, 2022. Proposals must also comply with the provisions contained in our bylaws relating to stockholder proposals, including SURYLVLRQ RI WKH LQIRUPDWLRQ VSHFLIHG LQ RXU EODZV, VXFK DV LQIRUPDWLRQ FRQFHUQLQJ WKH QRPLQHH RU WKH SURSRVDO. $Q proposals that do not meet the requirements set forth in our bylaws, other than proposals submitted in compliance ZLWK 6(& 5XOH 14D-8 XQGHU WKH ([FKDQJH $FW, ZLOO EH GHFODUHG RXW RI RUGHU DQG ZLOO QRW EH FRQVLGHUHG DW WKH 2022 DQQXDO meeting of stockholders. OTHER BUSINESS Our Board knows of no matter other than those described herein that will be presented for consideration at the Annual 0HHWLQJ. +RZHYHU, VKRXOG DQ RWKHU PDWWHUV SURSHUO FRPH EHIRUH WKH 0HHWLQJ RU DQ SRVWSRQHPHQWV RU DGMRXUQPHQWV thereof, it is the intention of the person(s) named in the accompanying proxy to vote in accordance with their best judgment in the interest of our Company and our stockholders. 82

 

ANNUAL REPORT $ FRS RI WKH $QQXDO 5HSRUW RQ )RUP 10-. IRU WKH HDU HQGHG 'HFHPEHU 31, 2020, H[FOXGLQJ H[KLELWV, LV DYDLODEOH DW ZZZ. ringenergy.com, and will be furnished at no charge to each person to whom a proxy statement is delivered upon the request of such person. Exhibits to the Annual Report on Form 10-K are available upon payment of a reasonable fee, which is limited to our expenses in furnishing the requested exhibit. Such requests should be directed to: Ring Energy, ZQF., $WWHQWLRQ: 7UDYLV 7. 7KRPDV, &KLHI )LQDQFLDO 2FHU, 1725 +XJKHV /DQGLQJ %OYG., 6XLWH 900, 7KH :RRGODQGV, 7; 77380 RU FDOO (281) 397-3699. By Order of the Board of Directors, /s/ Travis T. Thomas The Woodlands, Texas April 22, 2021 Travis T. Thomas ([HFXWLYHe9LFHe3UHVLGHQWte&KLHIe)LQDQFLDOe2FHUte&RUSRUDWHe Secretary & Treasurer 2021 Proxy Statement 83

 

GAAP TO NON-GAAP RECONCILIATIONS Net Loss $ (253,411,828) Interest expense, net 17,617,606 Unrealized loss on change in fair value of derivatives 1,156,523 Ceiling test impairment 277,501,943 ZQFRPH WD[ EHQHIW (6,001,176) Depreciation, depletion and amortization 43,010,660 Asset retirement obligation accretion 906,616 Share-based compensation 5,364,162 Adjusted EBITDA $ 86,144,506 Adjusted EBITDA $ 86,144,506 1HW LQWHUHVW H[SHQVH (H[FOXGLQJ DPRUWL]DWLRQ RI GHIHUUHG IQDQFLQJ FRVWV) (16,427,497) Capital expenditures (excluding Northwest Shelf acquisition) (30,020,131) Free Cash Flow $ 39,696,878 84 FREE CASH FLOW TWELVE MONTHS ENDED DECEMBER 31, 2020 ADJUSTED EBITDA

 

 

2021 Proxy Statement 85

 

1725 Hughes Landing Blvd. Suite 900 The Woodlands, TX 77380

 

 

VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. RING ENERGY, INC. 1725 HUGHES LANDING BLVD., SUITE 900 THE WOODLANDS, TX 77380 VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. For Withhold For All Except To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the AllAll The Board of Directors recommends you vote FOR the following: nominee(s) on the line below. 0 0 0 1. Election of Directors Nominees 01) John A. Crum 06) Regina Roesener 02) Richard E. Harris 07) Clayton E. Woodrum 03) Paul D. McKinney 04) Thomas L. Mitchell 05) Anthony B. Petrelli The Board of Directors recommends you vote FOR proposals 2, 3 and 4. For 0 0 0 Against 0 0 0 Abstain 0 0 0 2. Advisory vote to approve named executive officer compensation. 3. To ratify the appointment of Grant Thornton LLP as the Company's auditors for the fiscal year ending December 31, 2021. Approve the 2021 Omnibus Incentive Plan. 4. NOTE: Consideration of any matters which may properly come before the Meeting, or any adjournment or postponement thereof. Yes 0 No 0 Please indicate if you plan to attend this meeting Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 0000511936_1 R1.0.0.177

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report and Notice and Proxy Statement are available at www.proxyvote.com RING ENERGY, INC. Annual Meeting of Stockholders May 25, 2021 10:00 AM Central Daylight Time This proxy is solicited on behalf of the Board of Directors The undersigned, a stockholder of RING ENERGY, INC. (the "Company"), having received the Notice of Annual Meeting of Stockholders and Proxy Statement dated April 22, 2021, does hereby appoint Travis T. Thomas, proxy and attorney-in-fact with full power of substitution, for and in the name of the undersigned to represent the undersigned at the Annual Meeting of Stockholders of the Company to be held at Ring Energy’s office building, meeting rooms A&B, ground floor, located at 1725 Hughes Landing Blvd., The Woodlands, TX 77380, on May 25, 2021, at 10:00 AM Central Daylight Time, or at any adjournment or postponement thereof, and to vote all shares of the Company’s voting securities that the undersigned would be entitled to vote if then and there personally present, on the matters set forth on the reverse side, and all such other business as may properly come before the meeting, as designated below. This Proxy will be voted as directed, or if no contrary direction is indicated, will be voted FOR the election of all directors; FOR Proposal 2; FOR Proposal 3; and FOR Proposal 4, and as the Board of Directors may recommend on such other business as may properly come before the Annual Meeting of Stockholders. Continued and to be signed on reverse side 0000511936_2 R1.0.0.177

 

Ring Energy (AMEX:REI)
Historical Stock Chart
From Aug 2021 to Sep 2021 Click Here for more Ring Energy Charts.
Ring Energy (AMEX:REI)
Historical Stock Chart
From Sep 2020 to Sep 2021 Click Here for more Ring Energy Charts.