DEF 14A 1 babcockwilcoxenterprisesin.htm DEF 14A Document

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.)
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Preliminary Proxy Statement
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Soliciting Material Pursuant to §240.14a-12
BABCOCK & WILCOX ENTERPRISES, INC.
(Name of registrant as specified in its charter)
(Name of person(s) filing proxy statement, if other than the registrant).
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April 5, 2021Via live webcast at www.virtualshareholdermeeting.com/BW2021
Dear Fellow Stockholders:
On behalf of our Board of Directors (the “Board”), we are pleased to invite you to attend the Babcock & Wilcox Enterprises, Inc. (“B&W” or the “Company”) 2021 Annual Meeting of Stockholders on May 20, 2021 (the “Annual Meeting”). This will be a virtual meeting of stockholders, beginning at 10:30 a.m. Eastern Time. You will be able to attend the Annual Meeting online and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/BW2021. You will also be able to vote your shares electronically at the Annual Meeting (other than shares held through The B&W Thrift Plan, which must be voted prior to the meeting), although we would urge you not to wait until the meeting to vote your shares.
We invite you to read this year’s proxy statement highlighting key activities and accomplishments in 2020 and presenting the matters for which we are seeking your vote at the Annual Meeting.
Looking Back and Ahead
Our results for the full year 2020 reflect the ongoing positive impact of our strategic actions, cost savings initiatives, and strong management and operational effectiveness, despite the impacts of COVID-19 across our segments. Our actions in 2020 and year-to-date, which have included launching new segments, expanding internationally, implementing additional cost savings initiatives, and most recently closing successful common stock and senior notes offerings, have provided a strong foundation for the continued execution of our growth strategy.
The proceeds from our recent offerings significantly reduced our secured debt and future cash interest payments. Combined with a reduction in our required pension contributions, we expect to save more than $40 million annually in cash expenses on a pro-forma basis, while also providing capital to support the expansion of our clean energy technologies portfolio as we continue to pursue more than $5 billion of identified pipeline opportunities over the next three years, in addition to our high-margin parts and services business. Looking forward, we remain focused on growing our B&W Renewable and B&W Environmental segments, including deploying our waste-to-energy and carbon capture technologies to help meet the increasing global demand for carbon and methane reductions. The next-generation B&W is positioned to power the global energy and environmental transformation. Today and always, we remain focused on delivering on our commitments to our customers, improving our business and strengthening our company for the future for the benefit of all of our stakeholders.
Your Viewpoint is Important
We hope you are able to participate in the Annual Meeting to hear more about our operations and our progress, and we encourage you to share your thoughts, concerns and suggestions with us. We also want to ensure your shares are represented as we conduct a vote on the matters outlined in this proxy statement. Whether or not you plan to attend, please cast your vote as soon as possible either via:
•the Internet at www.proxyvote.com,
•by calling 1-800-690-6903, or
•by returning the accompanying proxy card if you received a printed set of materials by mail.
Further instructions on how to vote your shares can be found in this proxy statement.


On behalf of our Board of Directors and the employees of B&W, I want to thank you for your continued support and investment in our business. If you have any questions or suggestions, please feel free to contact us at the address above or by visiting our website.
Sincerely,
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Kenneth M. Young
Chairman and Chief Executive Officer


April 5, 2021
Babcock & Wilcox Enterprises, Inc.
1200 East Market Street, Suite 650
Akron, Ohio 44305
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NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS
The 2021 Annual Meeting will be a virtual meeting of stockholders, beginning at 10:30 a.m. Eastern Time on May 20, 2021. You will be able to attend the Annual Meeting online and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/BW2021. You will also be able to vote your shares electronically at the Annual Meeting (other than shares held through The B&W Thrift Plan, which must be voted prior to the meeting). The Annual Meeting will be held to:
(1)approve amendments to the Company’s Restated Certificate of Incorporation (“Certificate of Incorporation”) to declassify the Company’s Board of Directors (the “Board”) and provide for annual elections of all directors beginning at the 2023 annual meeting of stockholders;
(2)if Proposal 1 is approved, elect Henry E. Bartoli and Philip D. Moeller as Class I directors of the Company for a term of two years;
(3)if Proposal 1 is not approved, elect Henry E. Bartoli and Philip D. Moeller as Class III directors of the Company for a term of three years;
(4)approve amendments to the Company’s Certificate of Incorporation to remove provisions that require the affirmative vote of holders of at least 80% of the voting power to approve certain amendments to our Certificate of Incorporation and Bylaws;
(5)ratify our Audit and Finance Committee’s appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2021;
(6)approve, on a non-binding advisory basis, the compensation of our named executive officers;
(7)approve the 2021 Long-Term Incentive Plan; and
(8)transact such other business as may properly come before the Annual Meeting or any adjournment thereof.
If you were a stockholder as of the close of business on March 23, 2021 (the “record date”), you are entitled to vote at the Annual Meeting and at any postponement or adjournment thereof. To participate in the Annual Meeting via live webcast, you will need the 16-digit control number included on your proxy card and on the instructions that accompany your proxy materials. The Annual Meeting will begin promptly at 10:30 a.m. Eastern Time. Online check-in will begin at 10:25 a.m. Eastern Time.
If you are a stockholder of record, you can vote your shares by voting by Internet, telephone, mailing in your proxy or virtually at the Annual Meeting. You may give us your proxy by following the instructions included in the enclosed proxy card. Further instructions on how to vote your shares can be found in this proxy statement.
On April 5, 2021, we commenced providing or making available our proxy materials, including this notice and proxy statement as well as a copy of our 2020 Annual Report, to all stockholders of record as of the record date.
Your vote is important. Please vote your proxy promptly so your shares can be represented, even if you plan to attend the Annual Meeting. You can vote by Internet, by telephone, or by requesting a printed copy of the proxy materials and using the enclosed proxy card.
By Order of the Board of Directors,
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John J. Dziewisz
Corporate Secretary
Dated: April 5, 2021


IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING TO BE HELD ON MAY 20, 2021.
We are pleased to announce that we are delivering your proxy materials for the 2021 Annual Meeting of Stockholders via the Internet. Because we are delivering proxy materials via the Internet, the Securities and Exchange Commission requires us to mail a notice to our shareholders notifying them that these materials are available on the Internet and how these materials may be accessed. This notice, which we refer to as our “Notice of Proxy Materials,” will be mailed to our shareholders on or about April 5, 2021.
Our Notice of Proxy Materials will instruct you on how you may vote your proxy via the Internet or by telephone, or how you can request a full set of printed proxy materials, including a proxy card to return by mail. If you would like to receive printed proxy materials, you should follow the instructions contained in our Notice of Proxy Materials. Unless you request them, you will not receive printed proxy materials by mail.
The Proxy Statement and Annual Report are available free of charge on our website at
https://investors.babcock.com/financials-information/sec-filings/default.aspx
and at http://www.proxyvote.com


2021 PROXY STATEMENT SUMMARY
2020 Pay-For-Performance
Our executive compensation programs are based on a strong alignment between pay and performance, and this is reflected in the payout amounts under our annual incentive program and the value of earned awards granted under our long-term incentive program. Decisions by the Compensation Committee of the Board, which we refer to in this discussion as the “Compensation Committee,” in 2020 also took into account prior feedback from our stockholders and concern for retention of key personnel while we address operational issues.
We again did not perform as expected in 2020. For the third year in a row, no payment was earned under the financial component of the annual cash incentive program. See “2020 Summary Compensation Table” for a comparison of the total compensation received by our NEOs in 2020 versus 2019 and 2018, as applicable. We also determined in 2020 that the financial performance goals (relative total stockholder return, earnings per share and return on invested capital) for the 2017-2019 performance period used to determine vesting of certain long-term incentive awards we granted in 2017 had not been met and, accordingly, those 2017 awards terminated without vesting.
For our 2020 equity program, in order to provide additional incentives to create value for our stockholders, we made grants of PSUs that would vest based on achievement of a specific closing share price which was a significant increase over the stock price at the time of grant. See “Equity Incentive Awards” below.
Governance Highlights
Corporate governance is important, and we believe that our governance policies and structures provide a strong framework and assurance that we are clear, ethical and transparent in all of our business dealings. They help us operate more effectively, mitigate risk and act as a safeguard against mismanagement.
Board Elections
•Majority voting in uncontested elections
Board Independence
•Four out of six of our directors are independent
•Our Chief Executive Officer is the only management director
Board Composition
•Currently the Board consists of six directors
•The Board annually assesses its performance through Board and committee self-evaluations
•The Governance Committee leads the full Board in considering Board competencies and refreshment in light of Company strategy
Board Committees
•We have three standing Board committees – Audit and Finance, Governance, and Compensation
•All committees are composed entirely of independent directors
Leadership Structure
•Our Lead Independent Director works closely with our Chairman & CEO and provides feedback to management
•Among other duties, our Chairman and our Lead Independent Director are involved in setting the Board’s agenda and our Lead Independent Director chairs executive sessions of the independent directors to discuss certain matters without management present
Risk Oversight
•Our full Board is responsible for risk oversight, and has designated committees to have particular oversight of certain key risks
•The Board oversees management as management fulfills its responsibilities for the assessment and mitigation of risks, and taking appropriate risks
Open Communication
•We encourage open communication and strong working relationships among the Chairman and other directors
•Our directors have access to management and employees
Director Stock Ownership
•Our directors are required to own five times their annual base retainers in shares of common stock
Accountability to Stockholders
•We actively reach out to our stockholders through our engagement program
•Stockholders can contact the Board, Chairman or management through our website or by regular mail
Management Succession Planning
•The Board actively monitors our succession planning and people development
•At least once per year, the Board reviews senior management succession and development plans
As part of our commitment to effective corporate governance, management and the Board reviewed current corporate governance trends and considered the view held by many institutional stockholders that a classified board structure has the potential effect of reducing the accountability of directors. Similarly, the Board considered the view held by many institutional stockholders that provisions that prohibit stockholders from amending certain provisions of the Company’s Amended and


Restated Bylaws (“Bylaws”) or our Certificate of Incorporation without the approval of at least 80% of all outstanding shares of the Company’s common stock could similarly reduce the accountability of directors and management.


TABLE OF CONTENTS
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i

ii

APPROVAL OF AMENDMENTS TO OUR CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORS AND PROVIDE FOR ANNUAL ELECTIONS OF ALL DIRECTORS BEGINNING AT THE 2023 ANNUAL MEETING OF STOCKHOLDERS (PROPOSAL 1)
General
Our Certificate of Incorporation currently provides for a classified board structure, pursuant to which the Board is divided into three classes and directors are elected to staggered three-year terms, with members of one of the three classes elected every year. At our 2020 annual meeting of stockholders, our stockholders did not, by at least the required affirmative vote of at least 80% of the outstanding shares of our common stock, approve a proposal to amend our Certificate of Incorporation to eliminate the classified structure of the Board by the 2022 annual meeting of stockholders and allow for removal of directors with or without cause once the Board is no longer classified. After careful consideration, the Board unanimously approved, and recommends that our stockholders approve, amendments to our Certificate of Incorporation that, if adopted, would eliminate the classified structure of the Board by the 2023 annual meeting of stockholders and allow for removal of directors with or without cause once the Board is no longer classified.
Summary of Principal Changes
If this proposal is adopted, Article FIFTH of our Certificate of Incorporation will be amended to provide that all director nominees standing for election will be elected to a one-year term at or after the 2023 annual meeting of stockholders. To effect this change, nominees elected to replace directors whose terms expire at the Annual Meeting would be elected to a two-year term, and nominees elected to replace directors whose terms expire at the 2022 annual meeting of stockholders would be elected to a one-year term. As a result, beginning at the 2023 annual meeting of stockholders, and at each annual meeting thereafter, all directors will serve one-year terms. Directors elected to fill any vacancy on the Board or to fill newly created director positions resulting from an increase in the number of directors would serve the remainder of the term of that position.
In connection with the declassification, Article FIFTH would also be amended to provide that, commencing with the election of directors at the 2023 annual meeting of stockholders, directors may be removed with or without cause as provided in the Delaware General Corporation Law (“DGCL”), and only the approval of a majority of the voting power of our stockholders would be required to remove a director with or without cause.
This description of the proposed amendments to our Certificate of Incorporation is only a summary of those amendments and is qualified in its entirety by reference to, and should be read in conjunction with, the full text of Article FIFTH of our Certificate of Incorporation, marked to show the proposed amendments, a copy of which is attached to this proxy statement as Appendix B. If adopted, the amendments to our Certificate of Incorporation will become effective upon filing of the amended Certificate of Incorporation with the Secretary of State of Delaware, which is expected to occur promptly following the stockholder vote. If the amendments to our Certificate of Incorporation are approved by stockholders and become effective, the Board expects to approve certain conforming amendments to our Bylaws to remove references to a classified Board and to reflect stockholders’ ability to remove directors on an unclassified Board with or without cause at or after the 2023 annual meeting of stockholders.
Recommendation and Vote Required
The Board recommends that stockholders vote “FOR” the approval of amendments to our Certificate of Incorporation to declassify the Board and provide for annual elections of all directors beginning at the 2023 annual meeting of stockholders. The proxy holders will vote all proxies received for approval of this proposal unless instructed otherwise. Approval of the proposal requires the affirmative vote of at least 80% of the outstanding shares of our common stock. Accordingly, abstentions and broker non-votes will have the effect of a vote against this proposal.
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IF PROPOSAL 1 IS APPROVED, THE ELECTION OF HENRY E. BARTOLI AND PHILIP D. MOELLER AS CLASS I DIRECTORS OF THE COMPANY FOR A TERM OF TWO YEARS (PROPOSAL 2)
If Proposal 1 is approved, stockholders will vote to elect two directors to hold office for a two-year term expiring at the 2023 annual meeting of stockholders. In such event, the Board has recommended each of Henry E. Bartoli and Philip D. Moeller for election as Class I directors, to serve until the 2023 annual meeting of stockholders or until his successor is duly elected and qualified or until his earlier death, resignation or removal. Both individuals currently serve as Class III directors whose terms expire at the Annual Meeting. Each of Messrs. Bartoli and Moeller have agreed to serve if elected. The Board has nominated these directors following the recommendation of the Governance Committee.
Information regarding the director nominees is set forth below under the heading “Information Regarding Directors and Director Nominees.”
Recommendation and Vote Required
The Board recommends that stockholders vote “FOR” the election of each of Henry E. Bartoli and Philip D. Moeller. You may vote “FOR” both director nominees or withhold your vote for any one or both of the director nominees. Subject to our majority voting requirements described below, director nominees are elected by a plurality of the votes cast by the shares of our common stock entitled to vote in the election of directors at a meeting of stockholders at which a quorum is present. As a result, abstentions and broker non-votes will have no effect on the election of directors.
IF PROPOSAL 1 IS NOT APPROVED, THE ELECTION OF HENRY E. BARTOLI AND PHILIP D. MOELLER AS CLASS III DIRECTORS OF THE COMPANY FOR A TERM OF THREE YEARS (PROPOSAL 3)
If Proposal 1 is not approved, stockholders will vote to elect two directors to hold office for a three-year term expiring at the 2024 annual meeting of stockholders. In such event, the Board has recommended each of Henry E. Bartoli and Philip D. Moeller for election as Class III directors, to serve until the 2024 annual meeting of stockholders or until his successor is duly elected and qualified or until his earlier death, resignation or removal. Both individuals currently serve as Class III directors whose terms expire at the Annual Meeting. Each of Messrs. Bartoli and Moeller have agreed to serve if elected. The Board has nominated these directors following the recommendation of the Governance Committee.
Information regarding the director nominees is set forth below under the heading “Information Regarding Directors and Director Nominees.”
Recommendation and Vote Required
The Board recommends that stockholders vote “FOR” the election of each of Henry E. Bartoli and Philip D. Moeller as Class III Directors. You may vote “FOR” both director nominees or withhold your vote for any one or both of the director nominees. Subject to our majority voting requirements described below, director nominees are elected by a plurality of the votes cast by the shares of our common stock entitled to vote in the election of directors at a meeting of stockholders at which a quorum is present. As a result, abstentions and broker non-votes will have no effect on the election of directors.
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INFORMATION REGARDING DIRECTORS AND DIRECTOR NOMINEES
The Board currently includes six highly qualified directors with skills aligned to our business and strategy who bring significant value and diversity to the Company. The Board is comprised of the following members:
NAME
CLASS
YEAR TERM EXPIRES
Henry E. Bartoli
Class III
2021
Alan B. Howe
Class II
2023
Philip D. Moeller
Class III
2021
Rebecca L. Stahl
Class II
2023
Joseph A. Tato
Class I
2022
Kenneth M. Young
Class I
2022
The Board currently consists of three classes of directors with each director serving a staggered three-year term. The Class I directors are Joseph A. Tato and Kenneth M. Young. The Class II directors are Alan B. Howe and Rebecca L. Stahl. The Class III directors are Henry E. Bartoli and Philip D. Moeller.
If Proposal 1 is approved, the Board will consist of two classes of directors, with the directors in Class I serving until our 2023 annual meeting of stockholders and the directors in Class II serving until our 2022 annual meeting of stockholders. If Proposal 1 is approved, the directors currently in Class I and Class III will be designated as Class I directors, and the directors currently in Class II will be designated as Class II directors.
Kenneth M. Young, a non-independent director, currently serves as Chairman of the Board. Because the Chairman is not an independent director, Alan B. Howe has been designated by the Board as Lead Independent Director.
Unless otherwise directed, the persons named as proxies on the enclosed proxy card intend to vote “FOR” the election of the nominees listed in this proxy statement. If any nominee should become unavailable for election, the shares will be voted for such substitute nominee as may be proposed by the Board. However, we are not aware of any circumstances that would prevent any of the nominees from serving as a director.
The following section provides information with respect to each nominee for election as a director and each director who will continue to serve as a director after the Annual Meeting. It includes the specific experience, qualifications and skills considered by the Governance Committee and the Board in assessing the appropriateness of the person to serve as a director (ages are as of April 1, 2021).

3

Nominees
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HENRY E. BARTOLI
Director since 2020
Age: 74
Qualifications:
Henry E. Bartoli, a seasoned executive with more than 35 years of experience in the global power industry, served as Chief Strategy Officer for Babcock & Wilcox from 2018 to 2020. Before that, he was President and Chief Executive Officer of Hitachi Power Systems America, LTD from 2004 to 2014.  From 2002 to 2004, he was Executive Vice President of The Shaw Group, after serving in a number of senior leadership roles at Foster Wheeler Ltd. from 1992 to 2002, including Group Executive and Corporate Senior Vice President, Energy Equipment Group, and Group Executive and Corporate Vice President and Group Executive, Foster Wheeler Power Systems Group. Before that, from 1971 to 1992, he served in a number of positions of increasing importance at Burns and Roe Enterprises, Inc.
Mr. Bartoli also serves as a member of the Board of Directors of FERMILAB, United States’ premier particle physics laboratory owned by the U.S. Department of Energy.
Mr. Bartoli received a Bachelor of Science Degree in Mechanical Engineering from Rutgers University and a Master of Science Degree in Mechanical Engineering from New Jersey Institute of Technology.
In addition, Mr. Bartoli has held professional engineering licenses in California, Kentucky and New Jersey and is a former member of the Board of Trustees of Rutgers University. Mr. Bartoli is also a former member of the Board of Directors of the Nuclear Energy Institute.
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PHILIP D. MOELLER
Director since: 2020
Age: 59
Compensation Committee
Governance Committee
Qualifications:
The Honorable Philip D. Moeller is Executive Vice President, Business Operations Group and Regulatory Affairs, at the Edison Electric Institute (EEI). EEI is the association that represents all of the nation’s investor-owned electric companies. In his role at EEI, he has significant responsibility over a broad range of issues that affect the future structure of the electric power industry and new rules in evolving competitive markets including energy supply and finance, environment, energy delivery, energy services, federal and state regulatory issues, and international affairs.
Prior to joining EEI in February 2016, Mr. Moeller served as a Commissioner on the Federal Energy Regulatory Commission (FERC), ending his tenure as the second-longest serving member of the Commission. In office from 2006 through 2015, Mr. Moeller ended his service as the only Senate-confirmed member of the federal government appointed by both President George W. Bush and President Barack Obama.
Earlier in his career, Mr. Moeller headed the Washington, D.C., office of Alliant Energy Corporation. He also served as a Senior Legislative Assistant for Energy Policy to U.S. Senator Slade Gorton (R-WA), and as the Staff Coordinator of the Washington State Senate Energy and Telecommunications Committee in Olympia, Washington.
Mr. Moeller received a Bachelor of Arts in Political Science from Stanford University.
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Continuing Directors
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ALAN B. HOWE
Director since 2019
Age: 59
Audit and Finance Committee Compensation Committee
Governance Committee
Qualifications:
Alan Howe has almost 30 years of extensive hands-on operational expertise combined with corporate finance, business development and corporate governance experience. His broad business background includes exposure to a wide variety of complex business situations within large corporations, financial institutions, start-ups, small-caps and turnarounds.
Currently, Alan is Managing Partner of Broadband Initiatives, LLC, a small boutique corporate advisory firm that he manages. His specialty is in providing board and C-level leadership working with small-cap and micro- cap companies (both public and private) particularly in turnaround situations. Alan has served both as a director and as a board chairman in multiple companies in a variety of industries including telecom and wireless equipment, software, IT services, wireless RF services, manufacturing, semiconductors, and storage. In two situations, Alan was appointed interim CEO of difficult situations where he previously served on the Board of Directors.
He earned a bachelor’s degree in business administration and marketing from the University of Illinois and a Master of Business Administration and finance from Indiana University
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REBECCA L. STAHL
Director since 2020
Age: 47
Audit and Finance Committee
Compensation Committee
Qualifications:
With 25 years’ experience in finance and accounting, Rebecca Stahl currently serves as Chief Financial Officer of The Association For Manufacturing Technology (AMT), an organization that represents and promotes U.S.-based manufacturing technology and its members who design, build, sell, and service the industry. Before joining AMT, she held positions of increasing responsibility at Lightbridge Communications Corporation (LCC), a multinational wireless engineering company, including serving as Chief Financial Officer from 2008 to 2015. While at LCC, she led several financing rounds, senior bank refinancing and M&A transactions that led to an eventual sale of the company in 2015.
Prior to LCC, Ms. Stahl was with BT Infonet, a multinational data communications company, as a senior finance professional supporting a $600 million operation. From 1998-2000, she served in corporate finance for The Walt Disney Company in Burbank, Calif. She started her career at Arthur Anderson LLP serving clients of public and private companies in the real estate and financial services industries.
Ms. Stahl is a certified public accountant. She earned a Bachelor of Science in Accounting from The Pennsylvania State University, and a Master of Business Administration from the Anderson School of Management at University of California Los Angeles, with an emphasis in Finance. Her professional affiliations include Women Corporate Directors, the American Institute of Certified Public Accountants and Virginia Society of Certified Public Accountants.
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image_81a.jpgJOSEPH A. TATO
Director since: 2020
Age: 67
Audit and Finance Committee
Governance Committee
Qualifications:
Joseph A. Tato has significant leadership experience in the areas of energy and natural resources, infrastructure project development and finance, and has been counsel in some of the largest public private partnership transactions completed to date including energy and water projects in the U.S. and globally.
Mr. Tato currently is a Partner with Covington & Burling, LLP, responsible for Project Development & Finance, and is a member of its Africa and Latin America Practice Groups. From 2012 to 2020, he was a Partner with DLA Piper, LLP, and Chair of Projects and Infrastructure, as well as Co-Chair of its Energy Sector and a member of its Africa Committee. Before that, from 1983 to 2012, Mr. Tato was an associate and since 1998 a Partner with LeBoeuf, Lamb, Greene, & MacRae, LLP (now Dewey & LeBoeuf LLP), and served as Chair of Global Project Finance and its Africa Practice.
He has served as Director, Cameroon Enterprises, since 2017. Additionally, he has served as Director, Covanta Energy Corporation, from 2000 to 2004, and as Assistant Secretary and Counsel to the Board of Directors of SITA U.S.A., a subsidiary of Suez, from 1996 to 1999.
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KENNETH M. YOUNG
Director since 2020
Age: 57
Chairman of the Board
Qualifications:
Kenneth Young is Chairman and Chief Executive Officer of Babcock & Wilcox (B&W), a leader in energy and environmental products and services for power and industrial markets worldwide.
Mr. Young, who has served as Chief Executive Officer since November 2018 and Chairman since September 2020, has more than 30 years of operational, executive and director experience primarily within the energy, communications and finance industries, on a global basis. He currently serves as President of B. Riley Financial, Inc., and Chief Executive Officer for B. Riley Principal Investments, a wholly owned subsidiary of B. Riley Financial.
Before joining B. Riley, he held executive leadership positions with Lightbridge Communications Corporation (LCC), which was the largest independent telecom construction and services company in the world and a recognized leader in providing network services. Initially serving as President and Chief Operating Officer of the Americas for LCC, he was named President and CEO in 2008, serving in that position until he led the company’s sale in 2015. Under his leadership, LCC’s revenues grew more than 200 percent and the company expanded its geographical presence into more than 50 countries.
Prior to joining LCC, Mr. Young was Chief Marketing and Operations Officer with Liberty Media’s TruePosition and held various senior executive positions with multiple corporations, including Cingular Wireless, SBC Wireless, Southwestern Bell Telephone and AT&T as part of his 16-year tenure within the now-combined AT&T Corporation.
Mr. Young holds a Bachelor of Science in Computer Science from Graceland University and a Master of Business Administration from the University of Southern Illinois.
Mr. Young has previously served on seven public company boards and is currently a member of the Board of Directors for Sonim Technologies NASDAQ: (SONM).
6

Vintage and B. Riley Investor Rights Agreement
On January 3, 2018, we entered into an agreement with Vintage Capital Management, LLC (together with its affiliates, “Vintage”) and certain related parties, pursuant to which we agreed, among other things, to add Henry E. Bartoli, Matthew E. Avril and Brian R. Kahn to the Board to serve as Class I, Class II and Class III directors, respectively. This agreement expired pursuant to its terms in 2019.
On April 30, 2019, we entered into an investor rights agreement (the “Investor Rights Agreement”) with Vintage and B. Riley Financial, Inc. (together with its affiliates, “B. Riley”). As part of the Investor Rights Agreement, we agreed to appoint three directors nominated by each of Vintage and B. Riley to the Board, with the size of the full Board to remain at seven directors. Henry E. Bartoli, Matthew E. Avril and Kenneth Siegel were nominated by Vintage at our 2020 annual meeting of stockholders to serve as directors pursuant to the Investor Rights Agreement. Alan B. Howe, Brian R. Kahn and Bryant R. Riley were nominated by B. Riley at our 2020 annual meeting of stockholders to serve as directors pursuant to the Investor Rights Agreement.
Pursuant to the Investor Rights Agreement, each of Vintage and B. Riley retains their right to nominate directors to serve on the Board so long as they continue to meet certain quantitative thresholds with regard to the amount of our common stock and debt they beneficially own. B. Riley’s contractual rights to nominate directors will continue with respect to:
1.three Board members, for so long as B. Riley beneficially owns at least 75% of our common stock that it beneficially owned as of July 24, 2019 (the “Closing B. Riley Stock Ownership”) and at least 75% of the Tranche A-2 Term Loan and Tranche A-3 Term Loan, combined, that it beneficially owned as of July 24, 2019 (the “Closing Loan Ownership”);
2.two Board members, after the first time that B. Riley beneficially owns less than 75% of the Closing B. Riley Stock Ownership or less than 75% of the Closing Loan Ownership, but for so long as B. Riley continues to beneficially own at least 50% of the Closing B. Riley Stock Ownership and at least 50% of the Closing Loan Ownership; and
3.one Board member, after the first time that B. Riley beneficially owns less than 50% of the Closing B. Riley Stock Ownership or less than 50% of the Closing Loan Ownership.
Vintage’s contractual rights to nominate directors would continue with respect to:
1.three Board members, for so long as Vintage beneficially owns 75% of our common stock that it beneficially owned as of May 8, 2019 (the “Closing Vintage Stock Ownership”);
2.two Board members, after the first time that Vintage beneficially owns less than 75% of the Closing Vintage Stock Ownership but so long as Vintage continues to beneficially own at least 50% of the Closing Vintage Stock Ownership; and
3.one Board member, after the first time that Vintage beneficially owns less than 50% of the Closing Vintage Stock Ownership;
In all instances, Vintage and B. Riley, respectively, must each beneficially own at least 5% of the outstanding voting power of all of our common stock to retain their director nomination rights with regard to any directors. As of the date hereof, B. Riley satisfied the conditions of clause 1 above, retaining the right to nominate three members of the Board, and Vintage did not satisfy any of the clauses above, and therefore did not retain the right to nominate any members to the Board at the Annual Meeting.
The Investor Rights Agreement also provides pre-emptive rights to B. Riley with respect to certain future issuances of our equity securities. We also agreed as part of the Investor Rights Agreement to reimburse B. Riley and Vintage for all reasonable out-of-pocket costs and expenses they incurred, including fees for legal counsel, in the 2019 Rights Offering (as defined and described under “Certain Relationships and Related Transaction — Transactions with Vintage, B. Riley and Their Respective Affiliates”).
On March 26, 2021, Vintage and B. Riley completed a transaction pursuant to which B. Riley agreed to purchase from Vintage, and Vintage agreed to sell to B. Riley, all 10,720,785 shares of our common stock owned by Vintage.
7

Summary of Director Core Competencies and Attributes
The Board provides effective and strategic oversight to support the best interests of us and our stockholders. The following chart summarizes the core competencies and attributes represented by each of the director nominees. More details on each director’s competencies are included in the director profiles on the previous pages.
Competencies / AttributesKenneth M. Young
Henry E.
Bartoli
Alan B. HowePhilip
D. Moeller		Rebecca L. StahlJoseph A. Tato
COMPLIANCE CONSIDERATIONS
Independent Director••••
Financial expertise••••••
CORE COMPETENCIES
Recent or current public company CEO/COO/CFO/GC••
Power Generation••••
Manufacturing•••
Engineering and Construction••••
Utility / Power Transmission Distribution••••
International Operations•••••
STRATEGIC COMPETENCIES
Financial (Reporting, Auditing, Internal Controls)•••••
Strategy / Business Development / M&A••••••
Human Resources / Organizational Development•••••
Legal / Governance / Business Conduct•••••
Risk Management•••••
Public Policy / Regulatory Affairs••••
PUBLIC COMPANY BOARD EXPERIENCE
Board of similar or larger size company••
Audit / Finance committee experience with other companies•••
Compensation committee experience with other companies•••
Nomination / Governance committee experience with other companies••••
8

CORPORATE GOVERNANCE
Our corporate governance policies and structures provide the general framework for how we run our business. They demonstrate our commitment to ethical values, to strong and effective operations and to assuring continued growth and financial stability for our stockholders.
The corporate governance section on our website contains copies of our principal governance documents. It is found at www.babcock.com at “Investors — Corporate Governance” and contains the following documents:
Amended and Restated Bylaws
Corporate Governance Principles
Code of Business Conduct
Code of Ethics for Chief Executive Officer and Senior Financial Officers
Audit and Finance Committee Charter
Compensation Committee Charter
Governance Committee Charter
Conflict Minerals Policy
Related Party Transactions Policy
Modern Slavery Transparency Statement
Director Independence
The New York Stock Exchange (“NYSE”) listing standards require the Board to consist of at least a majority of independent directors, and our Corporate Governance Principles require the Board to consist of at least a majority of independent directors and at least 66% independent directors who satisfy all NYSE listing standards for independence other than Section 303A.02(b)(iv) of the NYSE listed company manual. For a director to be considered independent, the Board must determine that the director does not have any direct or indirect material relationship with us. The Board has established categorical standards, which conform to the independence requirements in the NYSE listing standards, to assist it in determining director independence. These standards are contained in the Corporate Governance Principles found on our website at www.babcock.com under “Investors — Corporate Governance — Governance Documents.”
Based on these independence standards, the Board has determined that the following directors are independent and meet our categorical standards:
Alan B. HoweRebecca L. Stahl
Philip D. MoellerJoseph A. Tato
Effective September 2, 2020, Matthew E. Avril, Cynthia S. Dubin, Brian R. Kahn, Bryant R. Riley and Kenneth S. Siegel resigned as directors. The Board previously determined that Matthew E. Avril, Cynthia S. Dubin, and Kenneth S. Siegel were independent and met our categorical standards during the applicable periods that they served in 2020.
In determining the independence of the directors, the Board considered transactions between us and other entities with which each of our directors are associated. Those transactions are described below, as well as the related party transactions discussed elsewhere in this proxy statement. None of these transactions was determined to constitute a material relationship with us with respect to any director held to be independent. Vintage designated Mr. Bartoli to serve on the Board, and B. Riley designated Mr. Howe to serve on the Board pursuant to the Investor Rights Agreement. Vintage and B. Riley are significant stockholders. B. Riley is also a significant lender to us and has also entered into a consulting agreement with us in connection with Mr. Young's appointment as our Chief Executive Officer.
Board Function, Leadership Structure and Executive Sessions
The Board oversees, counsels and directs management in the long-term interest of us and our stockholders. The Board’s responsibilities include:
•overseeing the conduct of our business and assessing our business and enterprise risks;
9

•reviewing and approving our key financial objectives, strategic and operating plans, and other significant actions;
•overseeing the processes for maintaining the integrity of our financial statements and other public disclosures, and our compliance with law and ethics;
•evaluating CEO and senior management performance and determining executive compensation;
•planning for CEO succession and monitoring management’s succession planning for other key executive officers; and
•establishing our governance structure, including appropriate board composition and planning for board succession.
The Board does not have a policy requiring either that the positions of Chairman and Chief Executive Officer should be separate or that they should be occupied by the same individual. The Board believes that this issue is properly addressed as part of the succession planning process and that it is in our best interests for the Board to make a determination on these matters when it elects a new Chief Executive Officer or Chairman of the Board or at other times consideration is warranted by circumstances. We currently have Mr. Young serving as our Chief Executive Officer and as our Chairman.
Pursuant to our Corporate Governance Principles, in the event the Chairman of the Board is not an independent director, the independent directors will annually appoint a Lead Independent Director with such responsibilities as the Board shall determine from time to time. If appointed, the Lead Independent Director has the following responsibilities:
•presides over all Board meetings at which the Chairman of the Board is not present and all executive sessions attended only by independent directors;
•serves as liaison between the independent directors and the Chairman of the Board and Chief Executive Officer (including advising the Chairman of the Board and Chief Executive Officer of discussions held during executive sessions of the non-employee and independent directors, as appropriate);
•reviews and approves the Board meeting agendas and meeting schedules to assure that there is sufficient time for discussion of all agenda items;
•advises the Chairman of the Board and Chief Executive Officer regarding the quality, quantity and timeliness of information sent by management to the directors;
•has the authority to call meetings of the independent directors; and
•if requested by major stockholders, ensures that he or she is available for consultation and direct communication.
Because the Chairman is not an independent director, the Board has designated Mr. Howe as Lead Independent Director. The Board believes that this leadership structure is appropriate for us at this time because it provides our Chairman with the readily available resources to manage the affairs of the Board. Our Chairman and Chief Executive Officer ensure that the views of the Board are taken into account as management carries out the business of the Company and vice-versa. Our independent directors, led by our Lead Independent Director, retain the opportunity to meet in executive session without management at the conclusion of each regularly scheduled Board meeting.
Director Nomination Process
Our Governance Committee is responsible for assessing the qualifications, skills and characteristics of candidates for election to the Board. The Board, after taking into account the assessment provided by our Governance Committee, is responsible for considering and recommending to stockholders the nominees for election as directors at each annual meeting. In making their assessments, the Governance Committee and the Board generally consider a number of factors, including each candidate’s:
•professional and personal experiences and expertise in relation to (1) our businesses and industries, and (2) the experiences and expertise of other Board members;
•integrity and ethics in his or her personal and professional life;
•professional accomplishment in his or her field;
•personal, financial or professional interests in any competitor, customer or supplier of ours;
•preparedness to participate fully in Board activities and to devote sufficient time to carry out the duties as a director on the Board, including active membership on Board committees as requested and attendance at, and active participation in, meetings of the Board and the committee(s) of which he or she is a member, and a lack of other personal or professional commitments that would, in the Governance Committee’s sole judgment, interfere with or limit his or her ability to do so;
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•ability to contribute positively to the Board and any of its committees;
•whether the candidate meets the independence requirements applicable to the Board and its committees established by the NYSE and the SEC;
•whether the candidate meets our Corporate Governance Principles, including the independence requirements set forth therein; and
•all other information deemed relevant in the Governance Committee’s and the Board’s, as applicable, business judgment impacting the candidate’s service as a member of the Board and any of its committees, including a candidate’s professional and educational background, reputation, industry knowledge and business experience.
While the Board does not have a specific policy regarding diversity among directors, both the Governance Committee and the Board recognize the benefits of a diverse board and believe that any evaluation of potential director candidates should consider diversity as to gender, racial and ethnic background, age, cultural background, education, viewpoint and personal and professional experiences.
Our Governance Committee takes these same factors into account when assessing the performance and skills of an incumbent director being nominated for re-election. In the case of an incumbent director being nominated for re-election to the Board, our Governance Committee also considers the incumbent director’s attendance at meetings, contributions to the Board and its committees during and in between regularly scheduled meetings (as well as part of any working groups formed to assist management with strategic or other priorities), the contributions of the incumbent director based on the Board’s self-evaluation processes described below and the benefits associated with the institutional knowledge derived from the incumbent director’s prior service on the Board.
To help ensure the ability to devote sufficient time to board matters, no director may serve on the board of more than three other public companies while continuing to serve on the Board, and no director that serves as an executive officer of the Company may serve on the board of more than one other public company while continuing to serve on the Board. The Board is authorized to grant exceptions to these rules on a case-by-case basis.
Our bylaws provide that (1) a person will not be nominated for election or re-election to the Board if such person will have attained the age of 75 prior to the date of election or re-election and (2) any director who attains the age of 75 during his or her term will be deemed to have resigned and retired at the first annual meeting following his or her attainment of the age of 75. Accordingly, a director nominee may stand for election if he or she has not attained the age of 75 prior to the date of election or re-election.
When the need for a new director arises (whether because of a newly created seat or vacancy), the Governance Committee and the Board proceed to identify a qualified candidate or candidates and to evaluate the qualifications of each candidate identified. Our Governance Committee and the Board generally solicit ideas for possible candidates from a number of sources — including members of the Board, our Chief Executive Officer and other senior-level executive officers, significant stockholders, individuals personally known to the members of the Board and independent director candidate search firms. Final candidates are generally interviewed by one or more members of our Governance Committee or other members of the Board before a decision is made. Ms. Stahl and Messrs. Bartoli, Moeller, Tato and Young, who were appointed to the Board in September 2020, were recommended to the Board. Mr. Bartoli resigned from the Board in 2020 and subsequently re-joined the Board later in 2020, solely to ensure that at least 66% of our Board remained independent at all times in 2020, as required by our Corporate Governance Principles. Absent Mr. Bartoli’s temporary resignation, the Company would have been required to expand temporarily the Board by at least two additional members during the same temporary period.
In addition, any stockholder may nominate one or more persons for election as one of our directors at an annual meeting of stockholders if the stockholder complies with the notice, information and consent provisions contained in our bylaws. See “Stockholders’ Proposals” in this proxy statement. Stockholder nominees are evaluated under the same standards as other candidates for board membership described above. In evaluating stockholder nominees, our Governance Committee and the Board may consider any other information they deem relevant, including (i) whether there are or will be any vacancies on the Board, (ii) the size of the nominating stockholder’s ownership of our debt and equity interests, (iii) the length of time such stockholder has owned such interest and (iv) any statements by the nominee or the stockholder regarding proposed changes in our operation.
Our bylaws provide for a plurality voting standard for directors, but each nominee for director is required to sign an irrevocable contingent resignation letter. If a nominee for director in an uncontested election does not receive a majority of the votes cast “FOR” his or her election (not counting any abstentions or broker non-votes as being cast), the Board will act on an expedited basis to determine whether to accept the resignation.
11

Communication with the Board
Our stockholders or other interested persons may communicate directly with the Board or its independent members. Written communications to the independent members of the Board can be sent to the following: Board of Directors (independent members), c/o Babcock & Wilcox Enterprises, Inc., Corporate Secretary’s Office, 1200 East Market Street, Suite 650, Akron, Ohio 44305. All such communications are forwarded to the independent directors for their review, except for communications that (1) contain material that is not appropriate for review by the Board based upon our bylaws and the established practice and procedure of the Board, or (2) contain improper or immaterial information. Information regarding this process is posted on our website at www.babcock.com under “Investors — Corporate Governance — Governance Documents.”
Board Orientation and Continuing Education
Each new director participates in an onboarding and orientation program developed and implemented with the oversight of the Governance Committee. This orientation includes information to familiarize new directors with the Company’s governance requirements, the structure and procedures of the Board and its committees on which the new director will serve, the Company’s industry, management structure, and significant operational, financial, accounting, risk management and legal issues, compliance programs, Code of Business Conduct, principal officers and internal and independent auditors. All directors are welcome to attend any of these orientation programs.
Directors are also required to participate in Company-sponsored and external continuing education programs at least once every two years. These programs are intended to help directors stay current on, among other topics, corporate governance and boardroom best practices, financial reporting practices, ethical issues confronting directors and management, and other similar matters. The Board believes it is appropriate for directors, at their discretion, to have access to educational programs related to their duties as directors on an ongoing basis to enable them to better perform their duties and to recognize and deal appropriately with issues as they arise. The Company provides appropriate funding for any such program in which a director participates.
Board Self-Evaluation Process
The Board and each of its committees conducts an annual evaluation, which includes a qualitative assessment by each director of the performance of the Board and each committee on which he or she serves. The Governance Committee oversees this evaluation and solicits comments from all directors. Each committee’s chairperson summarizes and reviews the responses with the members of his or her respective committees. Each committee chairperson then reports to the Board with an assessment of the performance of his or her respective committees as well as any suggestions for improvement. The chairperson of the Governance Committee summarizes and reviews with the Board the evaluation results for the Board.
The Role of the Board in Succession Planning
The Board believes effective succession planning, particularly for the Chief Executive Officer, is important to the continued success of the Company. As a result, the Board periodically reviews and discusses succession planning with the Chief Executive Officer during executive sessions of Board meetings. The Compensation Committee assists the Board in the area of succession planning by reviewing and assessing the management succession planning process and reporting to the Board with respect to succession planning for the Chief Executive Officer and our other executive officers.
The Role of the Board in Risk Oversight
As part of its oversight function, the Board monitors various risks that we face. We maintain an enterprise risk management program administered by our Corporate Strategy group. This program facilitates the process of reviewing key external, strategic, operational (e.g., cyber security) and financial risks, as well as monitoring the effectiveness of risk mitigation. Information on the enterprise risk management program is presented to senior management and the Board. The Audit and Finance Committee assists the Board in fulfilling its oversight responsibility for financial reporting and meets as necessary (and in any event at least quarterly) with management to review material financial risk exposures. The Audit and Finance Committee also meets at least annually to review reports from management regarding all material risk exposures and to assess the steps taken by management to monitor and control these exposures. The Audit and Finance Committee presents its assessment of these risks and management’s mitigation initiatives, along with any recommendations, to the Board.
The Compensation Committee also assists the Board with this function by meeting as necessary with management to review and discuss the significant risks impacting our company that potentially affect executive compensation in a material way. The Compensation Committee assesses whether and how to assess these risks as part of our compensation programs in consultation with management and its outside compensation consultant, as more fully described in “Compensation Discussion and Analysis — Compensation Philosophy and Process.”
12

Board of Directors and Its Committees
The Board met 20 times during 2020. All directors attended 75% or more of the meetings of the Board and of the committees on which they served during their respective periods of service in 2020. Ms. Dubin and Messrs. Avril, Siegel, Kahn and Riley resigned as members of the Board in September 2020 and Ms. Stahl and Messrs. Moeller, Tato and Young joined as members of the Board in September 2020. Mr. Bartoli resigned from the Board in April 2020 and subsequently re-joined the Board in September 2020. Directors are encouraged to make all reasonable efforts to attend the Annual Meeting. With the exception of Mr. Avril, all of our then-directors attended our 2020 annual meeting on June 15, 2020.
The Board currently has, and appoints the members of, standing Audit and Finance, Compensation and Governance Committees. Each of those committees has a written charter approved by the Board. The current charter for each standing Board committee is posted on our website at www.babcock.com under “Investors — Corporate Governance — Governance Documents.”
The current members of the committees are identified below. NYSE listing standards require that all members of our Audit and Finance, Compensation and Governance Committees be independent. The Board has affirmatively determined that each member of such committees is independent in accordance with the NYSE listing standards.
Committee Composition:
Committee Member
Audit & Finance
Compensation
Governance
Henry E. Bartoli



Alan B. Howe
Member
Chair
Member
Philip D. Moeller

Member
Member
Rebecca L. Stahl
Chair
Member

Joseph A. Tato
MemberChair
Kenneth M. Young



Audit and Finance Committee:
Ms. Stahl (Chair)
Mr. Howe
Mr. Tato
The Audit and Finance Committee met 13 times during 2020. The Audit and Finance Committee’s role is financial oversight. Our management is responsible for preparing financial statements, and our independent registered public accounting firm is responsible for auditing those financial statements.
The Audit and Finance Committee is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm. The committee, among other things, also reviews and discusses our audited financial statements with management and the independent registered public accounting firm. The Audit and Finance Committee provides oversight of: (1) our financial reporting process and internal control system; (2) the integrity of our financial statements; (3) our compliance with legal and regulatory requirements; (4) the independence, qualifications and performance of our independent auditors; (5) the performance of our internal audit function; and (6) our financial structure and strategy. The Audit and Finance Committee also has oversight of the Company’s ethics and compliance program and receives regular reports on program effectiveness.
The Board has determined that Mr. Howe, Ms. Stahl and Mr. Tato qualify as “audit committee financial experts” within the definition established by the Securities and Exchange Commission (“SEC”). For more information on the backgrounds of these directors, see their biographical information under “Information Regarding Directors and Director Nominees.”
Compensation Committee:
Mr. Howe (Chair)
Mr. Moeller
Ms. Stahl
The Compensation Committee met 10 times during 2020. The Compensation Committee has overall responsibility for our executive and non-employee director compensation plans, policies and programs including our executive and management incentive compensation plans and our Amended and Restated 2015 Long-Term Incentive Plan (the “2015 LTIP”).
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The Compensation Committee has the authority to retain, terminate, compensate and oversee any compensation consultant or other advisors to assist the committee in the discharge of its responsibilities. The Compensation Committee may form and delegate authority to subcommittees consisting of one or more independent directors as the Compensation Committee deems appropriate. See the “Compensation Discussion and Analysis – Compensation Philosophy and Process” and “Compensation Discussion and Analysis – Key 2020 Compensation Decisions” sections of this proxy statement for information about our 2020 named executive officers (“NEOs”) compensation, including a discussion of the role of management and the compensation consultant.
Compensation Committee Interlocks and Insider Participation
No director who served as a member of the Compensation Committee during the year ended December 31, 2020 (Messrs. Avril, Howe, Kahn, Siegel and Tato, and Ms. Stahl) (1) was during such year, or had previously been, an officer or employee of the Company or any of its subsidiaries, or (2) other than transactions in the ordinary course, had any material interest in a transaction of the Company or a business relationship with, or any indebtedness to, the Company. None of our executive officers have served as members of a compensation committee (or other board committee performing equivalent functions) or the board of directors of any other entity that has an executive officer serving as a member of the Board.
Governance Committee:
Mr. Tato (Chair)
Mr. Howe
Mr. Moeller
The Governance Committee met five times during 2020. This committee, in addition to other matters, has overall responsibility to (1) establish and assess director qualifications; (2) recommend nominees for election to the Board; and (3) oversee the annual evaluation of the Board and management, including the Chief Executive Officer in conjunction with our Compensation Committee. This committee will consider individuals recommended by stockholders for nomination as directors in accordance with the procedures described under “Stockholders’ Proposals.” This committee also assists the Board with management succession planning and director and officer insurance coverage.
COMPENSATION OF DIRECTORS
The compensation reflected below summarizes the compensation earned by or paid to our non-employee directors for services as members of the Board during fiscal year 2020. Directors who were also our employees did not receive any compensation for their service as directors.
2020 Director Compensation Table
NAME(1)
FEES EARNED OR
PAID IN CASH ($)
STOCK
AWARDS ($)(2)
TOTAL ($)
Matthew E. Avril$138,750 $95,000 $233,750 
Henry E. Bartoli$— $— $— 
Cynthia S. Dubin$78,750 $95,000 $173,750 
Alan B. Howe$101,667 $95,000 $196,667 
Brian R. Kahn$63,750 $95,000 $158,750 
Philip D. Moeller$28,333 $— $28,333 
Bryant R. Riley$— $— $— 
Kenneth S. Siegel$71,250 $95,000 $166,250 
Rebecca L. Stahl$35,000 $— $35,000 
Joseph A. Tato$31,667 $— $31,667 
Kenneth M. Young$— $— $— 
(1)Messrs. Avril, Kahn, Riley, and Siegel and Ms. Dubin resigned as directors effective September 2, 2020. Ms. Stahl and Messrs. Moeller and Tato became directors effective September 2, 2020.
(2)Messrs. Avril, Howe, Kahn, and Siegel, and Ms. Dubin, were awarded 38,000 fully vested shares of our common stock on August 25, 2020. Represents the aggregate grant date fair value of stock awards granted to the non-employee directors in 2020 computed in accordance with FASB ASC Topic 718. For additional information on the valuation of our equity awards, see Note 17 to our audited financial statements for the fiscal year ended December 31, 2020, included in our annual report on Form 10-K for the year ended December 31, 2020 10-K and “—Stock-Based Compensation.”
14

Fees Earned or Paid in Cash
Under our current director compensation program, which was recommended by the Compensation Committee and approved by the Board, non-employee directors are eligible to receive an annual retainer of $85,000, paid in quarterly installments and prorated for partial terms.
The chairs of Board committees, and any Lead Independent Director or independent Chairman of the Board, received additional annual retainers, paid in quarterly installments, as follows (prorated for partial terms):
•the chair of the Audit and Finance Committee: $20,000;
•the chair of each of the Compensation and Governance Committees: $10,000;
•the Lead Independent Director (if any): $20,000; and
•the Independent Chairman (if any): $100,000.
Stock Awards
Our stock ownership guidelines require that non-employee directors own stock valued at five times their annual retainer, and they have five years from the date of joining the Board to acquire the required number of shares. All directors are currently in compliance with our stock ownership guidelines.
In addition to the cash payments provided to our directors, our practice has been for each non-employee director to receive an annual stock award in the form of a number of fully vested shares equal to $95,000 divided by the closing price of our common stock on the grant date, rounded down to the nearest whole share (and prorated for partial terms). Under our 2015 LTIP, directors may elect to defer payment of all or a portion of their stock awards, but none of the directors elected to do so. Messrs. Moeller, Stahl and Tato joined the Board during fiscal year 2020 and will receive their initial stock awards during fiscal year 2021.
Outstanding Option Awards
As of December 31, 2020, the following non-employee directors held the following numbers of outstanding stock options, each with an exercise price of $41.70 per share: Mr. Avril, 3,639; Ms. Dubin, 3,639; Mr. Kahn, 3,639; and Mr. Siegel, 2,729. No non-employee director held any other outstanding awards on that date.
Consulting Arrangement with Henry E. Bartoli
Mr. Bartoli’s employment with us, and his service as our Chief Strategy Officer, ended as of December 31, 2020. Mr. Bartoli entered into a consulting agreement with The Babcock & Wilcox Company in November 2020 pursuant to which he continues to provide services through 2021 (or until the completion of services, whichever occurs first), which may be terminated by either party with thirty days’ written notice. As consideration for his consulting services, during the period of the consulting engagement Mr. Bartoli (1) receives a $18,750 monthly consulting fee, (2) received 50,000 restricted stock units which will vest 50% on June 30, 2021 and 50% on December 31, 2021, subject to Mr. Bartoli’s continued service through the applicable vesting date, (3) has an opportunity to earn incentive awards of $50,000 for each specified project booked or completed during 2021 and while Mr. Bartoli is serving as a consultant, and (4) an additional incentive opportunity based on achievement of certain gross margin targets on one of the specified projects reference in clause (3), up to a maximum incentive opportunity of $250,000 (including $50,000 of the incentive award opportunity referenced in clause (3)) for that specified project. The total incentive opportunity if all specified projects are booked and the maximum gross margin target is achieved on one of the projects is $350,000.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the beneficial ownership of our common stock by the following:
•each stockholder who beneficially owns more than 5% of our common stock;
•each current executive officer named in the 2020 Summary Compensation Table;
•each of our directors; and
•all of our executive officers, director nominees and directors as a group.
For the institutional beneficial owners listed below, we have based their respective number of shares of our common stock beneficially owned on the most recently reported Schedule 13D or 13G filed by such owners.
For the executive officers and directors listed below, we have based their respective number of shares of our common stock on the number of shares beneficially owned as of March 23, 2021 (unless noted otherwise). The number of shares beneficially owned by each stockholder, director or officer is determined according to the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. The mailing address for each of the directors and executive officers is 1200 East Market Street, Suite 650, Akron, Ohio 44305.
NAME OF BENEFICIAL OWNER
COMMON STOCK:
NUMBER OF SHARES
BENEFICIALLY OWNED
PERCENT OF CLASS1
OWNERSHIP OF OTHER SECURITIES
PERCENT OF CLASS1
5% STOCKHOLDERS:
Vintage Capital Management, LLC2
10,720,785 12.5%—
*
B. Riley Financial, Inc.3
18,237,319 21.3%1,666,6671.9%
NAMED EXECUTIVE OFFICERS, DIRECTORS AND DIRECTOR NOMINEES:
Kenneth M. Young
961,334 
*
—
*
Louis Salamone Jr.
322,148 
*
—
*
Henry E. Bartoli4
105,000 
*
—
*
John J. Dziewisz
123,305 
*
—
*
Alan B. Howe
25,606 
*
—
*
Brian R. Kahn5
10,785,214 12.6%—
*
Bryant R. Riley6
18,237,319 21.3%1,666,6671.9%
Philip D. Moeller
5,128 
*
—
*
Jimmy B. Morgan7
223,688 
*
—
*
Robert M. Caruso
— 
*
—
*
All Directors, Director Nominees and Executive Officers as a group (10 persons)8
30,788,742 35.9%1,666,6671.9%
*    Represents less than 1.0 percent
(1)Percent is based on 85,663,813 outstanding shares of our common stock on March 23, 2021.
(2)As reported on Schedule 13D/A filed with the SEC on February 10, 2020. The Schedule 13D/A reports beneficial ownership of 10,720,785 shares of our common stock by Vintage Capital Management, LLC and Kahn Capital Management, LLC, which each have sole voting power over zero shares and shared voting and dispositive power over 10,720,785 shares. The Schedule 13D/A reports beneficial ownership of 10,785,214 shares of our common stock by Brian R. Kahn who has sole voting and dispositive power over 64,429 shares and shared voting and dispositive power over 10,720,785 shares. The reporting person’s address is 4705 S. Apopka Vineland Road, Suite 206, Orlando, FL 32819.
(3)As reported on Schedule 13D/A filed with the SEC on February 10, 2020. The Schedule 13D/A reports beneficial ownership of 18,237,319 shares of our common stock by B. Riley Financial, Inc. which has shared voting and dispositive power over 5,776,423 shares and sole voting and dispositive power over 12,460,896 shares. The Schedule 13D/A reports beneficial ownership of 3,409,659 shares of our common stock by B. Riley Securities, Inc., which has shared voting and dispositive power over 4,409,659 shares. The Schedule 13D/A reports beneficial ownership of 2,370,764 shares of our common stock by B. Riley Capital Management, LLC, BRC Partners Opportunities Fund, LP and BRC Partners Management GP, LLC, which each have shared voting and dispositive power over 2,370,764 shares. The Schedule 13D/A reports beneficial ownership of 18,633,718 shares of our common stock by Bryant R. Riley, who had sole voting and dispositive power over 396,399 shares and shared voting and dispositive power over 18,237,319 shares. The reporting person’s address is 21255 Burbank Blvd., Suite 400, Woodland Hills, CA 91367. Includes 1,666,667 shares of our common stock issuable upon exercise of warrants issued to affiliates of B. Riley FBR, Inc.
(4)Shares owned by Mr. Bartoli include 3,639 shares of common stock that he may acquire on the exercise of stock options.
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(5)Shares owned by Mr. Kahn also include shares beneficially owned by Vintage Capital Management, LLC, as disclosed in footnote 2 above.
(6)Shares owned by Mr. Riley include shares beneficially owned by B. Riley Financial, Inc., as disclosed in footnote 3 above. Includes 1,666,667 shares of our common stock issuable upon exercise of warrants issued to affiliates of B. Riley FBR, Inc.
(7)Shares owned by Mr. Morgan include 7,234 shares of common stock that he may acquire on the exercise of stock options.
(8)Shares owned by all directors, director nominees and officers as a group include 20,880 shares of common stock that may be acquired on the exercise of stock options and 2.25 shares of common stock held in The B&W Thrift Plan. Shares owned by Mr. Dziewisz include 4,118 shares of common stock that he may acquire on the exercise of stock options and 2.25 shares of common stock held in our Thrift Plan.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to our Code of Business Conduct, all employees who have, or whose immediate family members have, any direct or indirect financial or other participation in any business that competes with us, supplies goods or services to us, or is our customer, are required to disclose to us and receive written approval from our Corporate Ethics and Compliance department prior to transacting such business. Our employees are expected to make reasoned and impartial decisions in the workplace. As a result, approval of the business is denied if we believe that the employee’s interest in such business could influence decisions relative to our business, or have the potential to adversely affect our business or the objective performance of the employee’s work. Our Corporate Ethics and Compliance department implements our Code of Business Conduct and related policies, and the Audit and Finance Committee of the Board is responsible for overseeing our Ethics and Compliance Program, including compliance with our Code of Business Conduct. The Board members are also responsible for complying with our Code of Business Conduct. Additionally, our Governance Committee is responsible for reviewing the professional occupations and associations of the Board members. Our Audit and Finance Committee also reviews transactions between us and other companies with which the Board members are affiliated.
We enter into an indemnification agreement with each of our directors and executive officers. Under the terms of the agreement, we agree to indemnify the indemnified person, to the fullest extent permitted by Delaware law, from claims and losses arising from their service to the Company (other than certain claims brought by the indemnified party against us or any of our officers and directors). The agreement also provides each indemnified person with expense advancement to the extent the expenses arise from, or might reasonably be expected to arise from, an indemnifiable claim and contains additional terms meant to facilitate a determination of the indemnified person’s entitlement to such benefits.
In January 2020, we engaged B. Riley to act as financial advisor in connection with amendments to our Credit Agreement dated May 11, 2015 (the “Credit Agreement”) with our current lenders and broader negotiations with creditors to refinance our current senior debt and to extend certain maturities and deadlines.
On January 31, 2020, we entered into Amendment No. 20 to our Credit Agreement, which required us to refinance our Credit Agreement on or prior to May 11, 2020. Amendment No. 20 also provided (i) $30.0 million of additional commitments from B. Riley under a new Tranche A-4 of last-out term loans and (ii) an incremental Tranche A-5 of last-out term loans to be extended prior to maturity of the last-out term loans under our U.S. credit agreement in the event certain customer letters of credit are drawn. The terms of the Tranche A-4 and Tranche A-5 last-out term loans are the same as the terms for the Tranche A-3 last-out term loans under our U.S. credit agreement. The proceeds from the Tranche A-4 last-out term loans may be used under the terms of Amendment No. 20 to support our growth, for working capital and general corporate purposes, and to reimburse up to $20,000 of expenses of B. Riley in connection with Amendment No. 20.
On May 14, 2020, we entered into an agreement amending and restating the Credit Agreement (the “A&R Credit Agreement”). The A&R Credit Agreement refinanced our U.S. Revolving Credit Facility and Last Out Term Loans and extended the maturity dates of the U.S. Revolving Credit Facility to June 30, 2022, and the Last Out Term Loans to December 30,2022.
Under the A&R Credit Agreement, B. Riley committed to provide the Company with up to $70.0 million of additional Last Out Term Loans on the same terms as the term loans extended under the Credit Agreement. An aggregate $30.0 million of this new commitment was funded upon execution of the A&R Credit Agreement. Of the remaining commitments, at least $35.0 million will be funded in installments, subject to reduction for the gross proceeds from certain equity offerings conducted by the Company, and $5.0 million will be funded upon request by the Company. The proceeds from the $30.0 million of new term loans were used to pay transaction fees and expenses and repay outstanding borrowings under our U.S. Revolving Credit Facility. Proceeds from the additional $40.0 million of term loans were used to repay outstanding borrowings under the U.S. Revolving Credit Facility, with any remaining amounts used for working capital, capital expenditures, permitted acquisitions and general corporate purposes. See Note 14 and Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2020 (the “Form 10-K”) for additional discussion of the A&R Credit Agreement, U.S. Credit Facility and Last Out Term Loans.
On February 8, 2021, we entered into Amendment No. 2 to the A&R Credit Agreement, which among other things, permitted the issuance of our 8.125% senior notes due 2026, as described. See Recent Developments in Part II of the Form 10-K for additional discussion of Amendment No. 2 to A&R Credit Agreement.
On March 4, 2021, we entered into A&R Amendment No. 3 with Bank of America. A&R Amendment No. 3, among other matters, at the date of effectiveness (i) permits the prepayment of certain term loans, (ii) reduces the revolving credit commitments to $130 million and removes the ability to obtain revolving loans under the credit agreement, and (iii) amends certain covenants and conditions to the extension of credit.
On March 4, 2021, effective with the execution of Amendment No. 3, we paid $75 million towards our existing Last Out Term Loans and paid $21.8 million of accrued and deferred fees related to the revolving credit facility.
For additional information regarding our A&R Credit Agreement and U.S. Revolving Credit Facility, including borrowings outstanding, see Note 14 to the Consolidated Financial Statements in the Form 10-K.
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On February 12, 2021, we completed a public offering of $120 million aggregate principal amount of our 8.125% senior notes due 2026 (the “Senior Notes”). The offering was conducted pursuant to an underwriting agreement (the “Notes Underwriting Agreement”) dated February 10, 2021, between us and B. Riley Securities, Inc., an affiliate of B. Riley and a related party, as representative of several underwriters (the “Underwriters”). At the completion, we received gross proceeds of approximately $125 million aggregate principal amount of Senior Notes, inclusive of $5 million aggregate principal amount of Senior Notes issued pursuant to the full exercise of the Underwriter’s option to purchase Senior Notes. Net proceeds received were approximately $120 million after deducting underwriting discounts and commissions, but before expenses.
In addition to the public offering, we issued $35 million of Senior Notes to B. Riley Financial, Inc. in exchange for a deemed prepayment of our existing Last Out Term Loan' Tranche A-6 in a concurrent private offering.
Also on February 12, 2021, the Company and B. Riley entered into a letter agreement (the “Exchange Agreement”) pursuant to which we agreed to issue to B. Riley $35 million aggregate principal amount of Senior Notes in exchange for a deemed prepayment of $35 million of our existing Tranche A term loan with B. Riley (the “Exchange”). On March 9, 2021, we filed with the SEC a registration statement on Form S-3 registering the offer and sale by B. Riley of the $35 million aggregate principal amount of Senior Notes issued to B. Riley in the Exchange.
Mr. Young, our Chairman and Chief Executive Officer, has served as the President of B. Riley since July 2018. Mr. Young has also served as the Chief Executive Officer of B. Riley Principal Investment, an affiliate of B. Riley Financial, Inc., since October 2016. Mr. Young continues to receive his salary and benefits from B. Riley Financial, Inc. and its affiliates, and pursuant to a consulting agreement between us and an affiliate of B. Riley Financial, Inc., we pay the affiliate in return for Mr. Young’s services as our Chief Executive Officer. See “Compensation of Named Executive Officers” for additional information regarding the compensation paid for Mr. Young’s services.
On March 26, 2021, Vintage and B. Riley completed a transaction pursuant to which B. Riley agreed to purchase from Vintage, and Vintage agreed to sell to B. Riley, all 10,720,785 shares of our common stock owned by Vintage.
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APPROVAL OF AMENDMENTS TO OUR CERTIFICATE OF INCORPORATION TO REMOVE PROVISIONS THAT REQUIRE THE AFFIRMATIVE VOTE OF HOLDERS OF AT LEAST 80% OF THE VOTING POWER TO APPROVE CERTAIN AMENDMENTS TO THE CERTIFICATE OF INCORPORATION AND BYLAWS (PROPOSAL 4)
General
The Board has recommended and is seeking stockholder approval for amendments to our Certificate of Incorporation that would remove provisions that require the affirmative vote of holders of at least 80% of the voting power of the Company’s outstanding stock to approve certain amendments to our Certificate of Incorporation and Bylaws (the “supermajority vote requirement”) described below, and replace this requirement with a majority vote requirement. Currently, Article FIFTH of our Certificate of Incorporation requires the affirmative vote of the holders of at least 80% of the voting power of the Company’s outstanding stock entitled to vote thereon to amend, modify or repeal Article FIFTH or Article SIXTH of our Certificate of Incorporation. In addition, Article FIFTH (e) of our Certificate of Incorporation requires the affirmative vote of the holders of at least 80% of the voting power of the Company’s outstanding stock entitled to vote generally in the election of directors to amend, modify or repeal the Company’s Bylaws or to adopt new bylaws.
The Board recognizes that a majority voting standard for effecting changes to our Certificate of Incorporation and Bylaws increases the ability of stockholders to participate in governance of the Company and aligns the Company with recognized best practices in corporate governance.
Summary of Principal Changes
If the proposal is approved, the Company intends to file an amendment to our Certificate of Incorporation with the Secretary of State of Delaware, reflecting the elimination of all supermajority vote requirements for amending our Certificate of Incorporation and Bylaws. As a result, at future meetings of stockholders, the affirmative vote of the holders of a majority of the voting power of the Company’s outstanding stock entitled to vote on the matter will be required to amend all provisions of our Certificate of Incorporation and Bylaws. This description of the proposed amendments to our Certificate of Incorporation is only a summary of those amendments and is qualified in its entirety by reference to, and should be read in conjunction with, the full text of Article FIFTH of our Certificate of Incorporation, marked to show the proposed amendment, a copy of which is attached to this proxy statement as Appendix C. If adopted, the amendments to our Certificate of Incorporation will become effective upon filing of the amended Certificate of Incorporation with the Secretary of State of Delaware, which is expected to occur promptly following the stockholder vote. If the amendments to our Certificate of Incorporation are approved by stockholders and become effective, the Board expects to approve certain conforming amendments to our Bylaws to remove all supermajority vote requirements for amending the Bylaws.
Recommendation and Vote Required
The Board recommends that stockholders vote “FOR” the approval of amendments to our Certificate of Incorporation that would remove the supermajority voting requirements to approve certain amendments to our Certificate of Incorporation and our Bylaws. The proxy holders will vote all proxies received for approval of this proposal unless instructed otherwise. Approval of the proposal requires the affirmative vote of at least 80% of the outstanding shares of our common stock. Accordingly, abstentions and broker non-votes will have the effect of a vote "AGAINST" this proposal.
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RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR YEAR ENDING DECEMBER 31, 2021 (PROPOSAL 5)
The Board has ratified the decision of the Audit and Finance Committee to appoint Deloitte & Touche LLP (“Deloitte”) to serve as the independent registered public accounting firm to audit our financial statements for the year ending December 31, 2021. Although we are not required to seek stockholder approval of this appointment, we intend to seek stockholder approval of our registered public accounting firm annually. No determination has been made as to what action the Audit and Finance Committee and the Board would take if our stockholders fail to ratify the appointment. Even if the appointment is ratified, the Audit and Finance Committee retains discretion to appoint a new independent registered public accounting firm at any time if the Audit and Finance Committee concludes such a change would be in our best interests. We expect that representatives of Deloitte will be present at the Annual Meeting and will have an opportunity to make a statement if they desire to do so and to respond to appropriate questions.
For the years ended December 31, 2020 and December 31, 2019, we paid Deloitte fees, including expenses and taxes, totaling $3,239,474 and $3,717,595 respectively, which are categorized below.
20202019
Audit The Audit fees were for professional services rendered for the audits of the consolidated financial statements of the Company, statutory and subsidiary audits, reviews of the quarterly consolidated financial statements of the Company and assistance with review of documents filed with the SEC.
$3,024,424 $3,707,995 
Audit-Related The Audit-Related fees relate to agreed-upon procedures and services normally provided by our independent registered public accounting firm in connection with regulatory filings.
$211,300 $— 
Tax The tax fees were for professional services rendered for tax compliance services.
$3,750 $9,600 
All Other
$$— 
TOTAL$3,239,474 $3,717,595 
It is the policy of our Audit and Finance Committee to pre-approve all audit engagement fees, terms and services and permissible non-audit services to be performed by our independent registered public accounting firm.
Annually, the independent registered public accounting firm and the Chief Financial Officer present to the Audit and Finance Committee the anticipated services to be performed by the firm during the year. The Audit and Finance Committee reviews and, as it deems appropriate, pre-approves those services. The separate Audit, Audit-Related, Tax and All Other services and estimated fees are presented to the Audit and Finance Committee for consideration. The Audit and Finance Committee reviews on at least a quarterly basis the proposed services and fees for additional services that have occurred and are outside the scope of the services and fees initially pre-approved by the Audit and Finance Committee. In order to respond to time-sensitive requests for services that may arise between regularly scheduled meetings, the Audit and Finance Committee has pre-approved specific audit, audit-related, tax and other services and individual and aggregate fees for such services. The Audit and Finance Committee did not approve any audit, audit-related, tax or other services pursuant to the de minimis exception described in Section 10A(i)(1)(B) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Recommendation and Vote Required
The Board recommends that stockholders vote “FOR” the ratification of the decision of our Audit and Finance Committee to appoint Deloitte as our independent registered public accounting firm for the year ending December 31, 2021. The proxy holders will vote all proxies received for approval of this proposal unless instructed otherwise. Approval of this proposal requires the affirmative vote of a majority of the shares cast on the matter. Abstentions will not be considered as cast and, as a result, will not have any effect on the proposal. Because the ratification of the appointment of the independent auditor is considered a “routine” matter, there will be no broker non-votes with respect to this proposal.
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AUDIT AND FINANCE COMMITTEE REPORT
The following report of the Audit and Finance Committee shall not be deemed to be “soliciting material” or to otherwise be considered “filed” with the SEC or be subject to Regulation 14A or 14C (other than as provided in Item 407 of Regulation S-K) or to the liabilities of Section 18 of the Exchange Act, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 (the “Securities Act”), except to the extent that the Company specifically incorporates it by reference into such filing.
As described more fully in its charter, the purpose of the Audit and Finance Committee is to assist the Board in its oversight of the Company’s financial reporting process, internal control system and audit functions. The Audit and Finance Committee also provides oversight of (i) the Company’s compliance with legal and regulatory financial requirements; (ii) the Company’s guidelines, policies and processes to assess and manage the Company’s exposure to risks in general, including financial risks; (iii) the Company’s financial strategies and capital structure; and (iv) the Company’s ethics and compliance program. Our principal responsibility is one of oversight. The Company’s management is responsible for the preparation, presentation and integrity of its financial statements and Deloitte, the Company’s independent registered public accounting firm, is responsible for auditing and reviewing those financial statements. Deloitte reports directly to the Audit and Finance Committee, which is responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm.
In this context, we have reviewed and discussed the Company’s audited consolidated financial statements for the year ended December 31, 2020 with the Company’s management and Deloitte. This review included discussions with Deloitte regarding those matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, issued by the Public Company Accounting Oversight Board. In addition, we received from Deloitte the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte’s communications with the Audit and Finance Committee concerning independence and discussed with Deloitte their independence from the Company and its management. We also considered whether the provision of non-audit services to the Company is compatible with Deloitte’s independence.
Based on these reviews and discussions and the reports of Deloitte, the Audit and Finance Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for filing with the Securities and Exchange Commission.
The Audit and Finance Committee
Rebecca L. Stahl (Chair)
Alan B. Howe
Joseph A. Tato
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APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF NAMED EXECUTIVE OFFICER COMPENSATION (PROPOSAL 6)
We are asking stockholders to approve an advisory resolution to approve our named executive officer (“NEO”) compensation as reported in this proxy statement as follows:
RESOLVED, that the stockholders of Babcock & Wilcox Enterprises, Inc. approve, on an advisory basis, the compensation of its named executive officers, as such compensation is disclosed pursuant to Item 402 of Regulation S-K in this proxy statement, including under the sections entitled “Compensation Discussion and Analysis” and “Compensation of Named Executive Officers.”
It is our belief that our ability to hire, retain and motivate executive officers is essential to the success of the Company and its stockholders. Therefore, we generally seek to provide reasonable and competitive compensation for our executives with a substantial portion in the form of performance-based awards.
As a result, our executive compensation is structured in the manner that we believe best serves the interests of the Company and its stockholders. We encourage stockholders to read the “Compensation Discussion and Analysis” section of this proxy statement, which provides a more thorough review of our executive compensation philosophy and how that philosophy has been implemented. We have given considerable attention to how, why and what we pay our executives, which reflects input from our stockholders. Two of our directors (Messrs. Bartoli and Howe) were nominated to serve as directors pursuant to the Investor Rights Agreement and provide valuable, ongoing feedback on behalf of Vintage and B. Riley, two of our largest stockholders. We believe the views expressed by these directors are consistent with the views held by a number of our other stockholders on the best ways to align our executive compensation program and strategies to strengthen the Company and better position it for success. Recognizing that no single compensation structure will completely satisfy all stockholders, we believe that our executive compensation is reasonable and provides appropriate incentives to our executives to achieve results that we expect to drive stockholder value without encouraging them to take excessive risks in their business decisions.
Effect of Proposal
The resolution to approve our NEO compensation is not binding on us, the Board or our Compensation Committee. Accordingly, even if the resolution is approved, the Board and Compensation Committee retain discretion to change executive compensation from time to time if it concludes that such a change would be in the best interest of the Company and its stockholders. No determination has been made as to what action, if any, would be taken if our stockholders fail to approve NEO compensation. However, the Board and its Compensation Committee value the opinions of stockholders on important matters such as executive compensation and expect to carefully consider the results of this advisory vote when evaluating our executive compensation programs.
Advisory votes to approve NEO compensation are scheduled to be held once every year. The next advisory vote to approve NEO compensation is expected to occur at our 2022 annual meeting of stockholders.
Recommendation and Vote Required
The Board recommends that stockholders vote “FOR” the approval of named executive officer compensation. The proxy holders will vote all proxies received for approval of this proposal unless instructed otherwise. Approval of this proposal requires the affirmative vote of a majority of the outstanding shares of common stock present in person or represented by proxy and entitled to vote on this proposal at the Annual Meeting. Because abstentions are counted as present for purposes of the vote on this matter but are not votes “FOR” this proposal, they have the same effect as votes “AGAINST” this proposal. Broker non-votes will not have any effect on this proposal.
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THE BABCOCK & WILCOX ENTERPRISES, INC. 2021 LONG-TERM INCENTIVE PLAN (PROPOSAL 7)
Approval of the 2021 Long-Term Incentive Plan
On March 28, 2021, our Board of Directors (the “Board”) approved, subject to stockholder approval, the Babcock & Wilcox Enterprises, Inc. 2021 Long-Term Incentive Plan (the “2021 Plan”). If the 2021 Plan is approved by our stockholders, it will authorize the issuance of up to 1,250,000 shares of our common stock for the grant of awards under the 2021 Plan.
The 2021 Plan will replace our Amended and Restated 2015 Long-Term Incentive Plan (Amended and Restated as of June 16, 2020) (referred to in this proxy statement as the “2015 LTIP”), and no new awards will be granted under the 2015 LTIP. Any awards outstanding under the 2015 LTIP on the date of stockholder approval of the 2021 Plan will remain subject to and be paid under the 2015 LTIP. In addition the shares initially available for issuance under the 2021 Plan referred to above, any shares subject to outstanding awards under the 2015 LTIP that subsequently expire, terminate, or are surrendered or forfeited for any reason without issuance of shares will automatically become available for issuance under the 2021 Plan. As detailed further below, as of March 23, 2021, approximately 2 million shares of the Company’s common stock were then subject to outstanding awards granted under the 2015 LTIP and approximately 840,000 shares were available for future grant under the 2015 LTIP. Because the 2021 Plan will replace the 2015 LTIP, the new shares requested for the 2021 Plan would increase the number of shares available for future grants by approximately 410,000.
Our Board recommends that stockholders approve the 2021 Plan. The purposes of the 2021 Plan include to:
•enhance our ability to attract and retain highly qualified officers, non-employee directors, employees, and consultants; and
•motivate those officers, non-employee directors, employees, and consultants to serve our company and to expend maximum effort to improve our business results and earnings by providing an opportunity to acquire or increase a direct proprietary interest in our operations and future success.
The 2021 Plan allows us to promote greater ownership by officers, non-employee directors, employees, and consultants in order to align their interests more closely with the interests of our stockholders. Stockholder approval of the 2021 Plan will also enable us to grant awards under the 2021 Plan that are designed to qualify for special tax treatment under Section 422 of the Internal Revenue Code.
Key Features
The following features of the 2021 Plan are designed to help protect the interests of our stockholders:
•Limitation on terms of stock options and stock appreciation rights. The maximum term of each stock option and stock appreciation right, or SAR, is 10 years.
•No repricing or grant of discounted stock options or SARs; no reload options/SARs. The 2021 Plan does not permit the repricing of stock options or SARs, either by amending an existing award or by substituting a new award at a lower price, without stockholder approval. The 2021 Plan prohibits the granting of stock options or SARs with an exercise price less than the fair market value of the common stock on the date of grant. Reload grants of stock options and SARs are prohibited under the 2021 Plan.
•No single-trigger acceleration, “liberal” change in control definition, or excise tax gross-ups. Under the 2021 Plan, we do not automatically accelerate vesting of awards in connection with a change in control of the Company, however the Board may accelerate awards in their sole discretion. The 2021 Plan does not include a “liberal” change in control definition. We do not provide change in control excise tax gross-ups.
•Clawbacks. Awards granted under the 2021 Plan are subject to certain compensation recovery policies.
•Dividends on awards subject to vesting. We will not pay dividends or dividend equivalents on stock options or SARs. Dividend equivalents on other awards are subject to the same vesting requirements (both time-vesting and performance-vesting) as the underlying units or shares.
•Director Limits. The 2021 Plan contains annual limits on the amount of awards that may be granted to non-employee directors.
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Summary of the 2021 Plan
The following summary of the 2021 Plan does not purport to be a complete description of all of the provisions of the 2021 Plan. It is qualified in its entirety by reference to the complete text of the 2021 Plan which is attached to this proxy statement as Appendix A.
Eligibility
Awards may be granted under the 2021 Plan to officers, employees, and consultants of the Company and its subsidiaries and to the Company’s non-employee directors. Incentive stock options may be granted only to employees of the Company or its subsidiaries. As of March 23, 2021, 5 non-employee directors and approximately 20 officers and other employees would have been eligible to participate in the 2021 Plan. In addition, approximately 3 individual consultants and advisors engaged by the Company and its subsidiaries would then have been considered eligible under the 2021 Plan.
Administration
The 2021 Plan is administered by the Compensation Committee (the “Committee”). The Committee, in its discretion, selects the individuals to whom awards may be granted, the time or times at which such awards are granted, and the terms of such awards. The Committee may delegate certain of its award authority to the extent permitted by applicable law. The Committee may amend, modify, or supplement the terms of any outstanding award including the authority, in order to effectuate the purposes of the Plan, to modify awards to foreign nationals or individuals who are employed outside the United States to recognize differences in local law, tax policy, or custom.
Number of Authorized Shares
The number of shares of common stock authorized for issuance under the 2021 Plan is 1,250,000. This represents approximately 1.46% of the common shares outstanding as of March 23, 2021.
In addition, as of the date of stockholder approval of the 2021 Plan, any awards then outstanding under the 2015 LTIP will remain subject to and be paid under the 2015 LTIP and any shares then subject to outstanding awards under the 2015 LTIP that subsequently expire, terminate, or are surrendered or forfeited for any reason without issuance of shares will automatically become available for issuance under the 2021 Plan. As of March 23, 2021, 2,010,800 shares of the Company’s common stock were then subject to outstanding awards granted under the 2015 LTIP. Up to 1,250,000 shares may be granted as incentive stock options under Section 422 of the Internal Revenue Code. The shares of common stock issuable under the 2021 Plan will consist of authorized and unissued shares, treasury shares, or shares purchased on the open market or otherwise.
If any award is canceled, terminates, expires, or lapses for any reason prior to the issuance of shares or if shares are issued under the 2021 Plan and thereafter are forfeited, the shares subject to such awards and the forfeited shares will again be available for grant under the 2021 Plan. In addition, the following items will not count against the aggregate number of shares of common stock available for grant under the 2021 Plan:
•any award that is settled in cash rather than by issuance of shares of common stock;
•shares tendered or withheld to pay the option exercise price or tax withholding for any award; and
•awards granted in assumption of or in substitution for awards previously granted by an acquired company.
Only the net shares issued upon exercise of a stock-settled SAR will count against the share pool.
Adjustments
In the event of any corporate event or transaction, such as any merger, consolidation, reorganization, recapitalization, separation, partial or complete liquidation, stock dividend, stock split, reverse stock split, split up, spin off, or other distribution of stock or property of the Company, a combination or exchange of common stock, dividend in kind, or other like change in capital structure, number of outstanding shares of common stock, distribution (other than normal cash dividends) to stockholders, or any similar corporate event or transaction, the Committee, in order to prevent dilution or enlargement of participants’ rights, will make equitable and appropriate adjustments and substitutions, as applicable, to or of the number and kind of shares subject to outstanding awards, the purchase price for such shares, the number and kind of shares available for future issuance under the 2021 Plan, and other determinations applicable to outstanding awards.
Non-employee Director Award Limits
No awards may be granted under the 2021 Plan during any one calendar year to a non-employee director that exceed, together with any cash compensation paid to the non-employee director for service on the Board during such year, (i) $500,000 for a non-employee director not serving as the Chairman, and (ii) $750,000 for a non-employee director serving as the Chairman, in either case based on the grant date fair value for accounting purposes in the case of stock options or SARs and based on the fair market value of the common stock underlying the award on the grant date for other equity-based awards. This limit does not apply to, and will be determined without taking into account, any award granted to an individual who, on the grant date of the
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award, is an officer or employee of the Company or one of its subsidiaries. This limit applies on an individual basis and not on an aggregate basis to all non-employee directors as a group. The 2021 Plan permits the disinterested members of the Board to approve exceptions to this limit for one or more individual non-employee directors in extraordinary circumstances.
Types of Awards
The 2021 Plan permits the granting of any or all of the following types of awards:
•Stock Options. Stock options entitle the holder to purchase a specified number of shares of common stock at a specified price (the exercise price), subject to the terms and conditions of the stock option grant. The Committee may grant either incentive stock options, which must comply with Section 422 of the Internal Revenue Code, or nonqualified stock options. The Committee sets the exercise prices and terms, except that stock options must be granted with an exercise price not less than 100% of the fair market value of the common stock on the date of grant (excluding stock options granted in connection with assuming or substituting stock options in acquisition transactions). Unless the Committee determines otherwise, fair market value means, as of a given date, the closing price of the common stock. At the time of grant, the Committee determines the terms and conditions of stock options, including the quantity, exercise price, vesting periods, term (which cannot exceed 10 years), and other conditions on exercise.
•Stock Appreciation Rights (SARs). The Committee may grant SARs, as a right in tandem with the number of shares underlying stock options granted under the 2021 Plan or as a freestanding award. Upon exercise, SARs entitle the holder to receive payment per share in stock or cash, or in a combination of stock and cash, equal to the excess of the share's fair market value on the date of exercise over the grant price of the SAR. The grant price of a tandem SAR is equal to the exercise price of the related stock option and the grant price for a freestanding SAR is determined by the Committee in accordance with the procedures described above for stock options. Exercise of a SAR issued in tandem with a stock option will reduce the number of shares underlying the related stock option to the extent of the SAR exercised. The term of a freestanding SAR cannot exceed 10 years, and the term of a tandem SAR cannot exceed the term of the related stock option.
•Restricted Stock, Restricted Stock Units and Other Stock-Based Awards. The Committee may grant awards of restricted stock, which are shares of common stock subject to specified restrictions, and restricted stock units, which represent the right to receive shares of the common stock in the future. These awards may be made subject to repurchase, forfeiture or vesting restrictions at the Committee's discretion. The restrictions may be based on continuous service with our company or the attainment of specified performance goals, as determined by the Committee. Stock units may be paid in stock or cash or a combination of stock and cash, as determined by the Committee. The Committee may also grant other types of equity or equity-based awards subject to the terms of the 2021 Plan and any other terms and conditions determined by the Committee.
•Performance Awards. The Committee may condition the grant, exercise, vesting, or settlement of any award on such performance conditions as it may specify. We refer to these awards as “performance awards.” The Committee may select such business criteria or other performance measures as it may deem appropriate in establishing any performance conditions. Business criteria include, but are not limited to, any of the following: (i) total sales, (ii) sales growth (with or excluding acquisitions), (iii) revenue-based measures for particular products, product lines, or product groups, (iv) income, (v) earnings per share of common stock, (vi) earnings before interest and taxes, (vii) earnings before interest, taxes, depreciation, and amortization, (viii) free cash flow, (ix) return on equity, assets, investment, invested capital, capital, total or net capital employed, or sales (pre or post-tax), (x) cash flow return on investment, (xi) total shareholder return, (xii) stock price increases, (xiii) total business return, (xiv) economic value added or similar “after cost of capital” measures, (xv) return on sales or margin rate, in total or for a particular product, product line, or product group, (xvi) working capital (or any of its components or related metrics), (xvii) working capital improvement, (xviii) market share, (xix) measures of customer satisfaction (including survey results or other measures of satisfaction), (xx) safety (determined by reference to recordable or lost time rates, first aids, near misses, or a combination of two or more such measures or other measures), (xxi) measures of operating efficiency such as productivity, cost of non-conformance, cost of quality, on time delivery, and efficiency ratio, and (xxii) strategic objectives with specifically identified areas of emphasis such as cost reduction, acquisition assimilation synergies, acquisitions, or organization restructuring. Business criteria may include any derivations of those listed above (e.g., income shall include pre-tax income, net income, operating income, etc.).
No Repricing
Without stockholder approval, the Committee is not authorized to 1) lower the exercise or grant price of a stock option or SAR after it is granted, except in connection with certain adjustments to our corporate or capital structure permitted by the 2021 Plan, such as stock splits, 2) take any other action that is treated as a repricing under generally accepted accounting principles, or 3) cancel a stock option or SAR at a time when its exercise or grant price exceeds the fair market value of the underlying stock, in exchange for cash, another stock option or SAR, restricted stock, restricted stock units, or other equity award unless the cancellation and exchange occur in connection with a change in capitalization or other similar change.
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Clawback
Any award agreement may reference a clawback policy of the Company or provide for the cancellation or forfeiture of an award or the forfeiture and repayment to the Company of any gain related to an award, or other provisions intended to have a similar effect, upon such terms and conditions as may be determined by the Committee from time to time, if a participant engages in certain detrimental activity. In addition, any award agreement or such clawback policy may also provide for the cancellation or forfeiture of an award or the forfeiture and repayment to the Company of any common stock issued under and/or any other benefit related to an award, or other provisions intended to have a similar effect, upon such terms and conditions as may be required by the Committee or under Section 10D of the Exchange Act and any applicable rules or regulations promulgated by the SEC or any national securities exchange or national securities association on which the Company’s common stock may be traded.
Transferability
Awards are not transferable other than by will or the laws of descent and distribution, except that in certain instances transfers may be made to or for the benefit of designated family members of the participant for no value.
Corporate Transactions and Change in Control
If the Company is a party to a merger, reorganization, consolidation, share exchange, transfer of assets or other transaction having similar effect involving the Company, outstanding awards will be subject to the agreement governing the transaction. Upon a change in control of the Company, the Committee may make such provisions as it deems appropriate with respect to outstanding awards under the 2021 Plan. “Change in control” is defined under the 2021 Plan and requires consummation of the applicable transaction.
Term, Termination and Amendment of the 2021 Plan
Unless earlier terminated by our Board of Directors, the 2021 Plan will terminate, and no further awards may be granted, 10 years after the date on which it is approved by stockholders. Our Board may amend, suspend, or terminate the 2021 Plan at any time, except that, if required by applicable law, regulation, or stock exchange rule, stockholder approval will be required for any amendment. The amendment, suspension, or termination of the 2021 Plan or the amendment of an outstanding award generally may not, without a participant's consent, materially impair the participant's rights under an outstanding award.
New Plan Benefits
The Company has not approved any awards that are conditioned upon stockholder approval of the 2021 Plan. The Company is not currently considering any other specific award grants under the 2021 Plan, other than the annual grants of stock awards to our non-employee directors described in the following paragraph. If the 2021 Plan had been in existence in fiscal 2020, the Company expects that its award grants for fiscal 2020 would not have been substantially different from those actually made in that year under the 2015 LTIP. For information regarding stock-based awards granted to the Company’s named executive officers during fiscal 2020, see the material under the heading “Compensation Discussion and Analysis” and “Compensation of Named Executive Officers” below.
As described under “Director Compensation” above, under our current compensation policy for non-employee directors, each non-employee director receives an annual stock award, with the number of shares subject to each award to be determined by dividing $95,000 by the closing price of our common stock on the grant date. Assuming, for illustrative purposes only, that the price of the common stock used for the conversion of the dollar amount set forth above into shares is $8.00, the number of shares that would be allocated to the Company’s five non-employee directors as a group pursuant to the annual grant formula is approximately 59,375. This figure represents the aggregate number of shares that would be subject to the annual grants under the director equity grant program for calendar years 2021 through 2030 (the ten remaining years in the term of the 2021 Plan, assuming the plan is approved) based on that assumed stock price. This calculation also assumes that there are no new eligible directors, there continue to be five eligible directors seated and there are no changes to the awards granted under the director equity grant program.
Additional Data
The following paragraphs include additional information to help you assess the potential dilutive impact of the Company’s equity awards and the 2021 Plan. The 2015 LTIP is the Company’s only equity compensation plan.
“Overhang” refers to the number of shares of the Company’s common stock that are subject to outstanding awards or remain available for new award grants. The following table shows the total number of shares of the Company’s common stock that were subject to outstanding restricted stock and restricted stock unit awards granted under the 2015 LTIP, that were subject to outstanding stock options and SARs granted under the 2015 LTIP, and that were then available for new award grants under the 2015 LTIP as of December 31, 2020 and as of March 23, 2021. In this 2021 Plan proposal, the number of shares of the Company’s common stock subject to restricted stock and restricted stock unit awards granted during any particular period or outstanding on any particular date is presented based on the actual number of shares of the Company’s common stock covered
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by those awards. As to the number of shares of the Company’s common stock subject to restricted stock and restricted stock unit awards outstanding on any particular date, the information is presented including the crediting of dividend equivalents on the awards through that date, to the extent the dividend equivalents are payable in shares of common stock.

As of December 31, 2020As of March 23, 2021
Shares subject to outstanding restricted stock and restricted stock unit awards (including vested but deferred RSUs and excluding performance-based vesting awards)2,490,3931,720,393
Shares subject to outstanding performance-based vesting restricted stock and restricted stock unit awards1,275,000
0
Shares subject to outstanding stock options and SARs340,320290,407
Shares available for new award grants964,970839,883
The weighted-average number of shares of the Company’s common stock issued and outstanding in each of the last three fiscal years was 13,828,619 shares issued and outstanding in 2018; 31,513,622 shares issued and outstanding in 2019; and 48,710,293 shares issued and outstanding in 2020. The number of shares of the Company’s common stock issued and outstanding as of December 31, 2020 and March 23, 2021 was 54,452,480 and 85,663,813 shares, respectively.
“Burn rate” refers to the number of shares that are subject to awards that we grant over a particular period of time. The total number of shares of the Company’s common stock subject to awards that the Company granted under the 2015 LTIP in each of the last three fiscal years, and to date (as of March 23, 2021) for 2021, are as follows:
•150,945 shares in 2018 (which was 1.09% of the weighted-average number of shares of the Company’s common stock issued and outstanding in 2018), of which 4,194 shares were subject to restricted stock and restricted stock unit awards (excluding performance-based vesting awards), 0 shares were subject to performance-based vesting restricted stock and restricted stock unit awards, and 146,752 shares were subject to stock options and SARs;
•2,224,698 shares in 2019 (which was 7.06% of the weighted-average number of shares of the Company’s common stock issued and outstanding in 2019), of which 2,224,698 shares were subject to restricted stock and restricted stock unit awards (excluding performance-based vesting awards), 0 shares were subject to performance-based vesting restricted stock and restricted stock unit awards, and 0 shares were subject to stock options and SARs;
•2,443,000 shares in 2020 (which was 5.02% of the weighted-average number of shares of the Company’s common stock issued and outstanding in 2020), of which 1,168,000 shares were subject to restricted stock and restricted stock unit awards (excluding performance-based vesting awards), 1,275,000 shares were subject to performance-based vesting restricted stock and restricted stock unit awards, and 0shares were subject to stock options and SARs; and
•175,000 shares in 2021 through March 23, 2021 (which was 0.20% of the number of shares of the Company’s common stock issued and outstanding on March 23, 2021), of which 175,000 shares were subject to restricted stock and restricted stock unit awards (excluding performance-based vesting awards), 0 shares were subject to performance-based vesting restricted stock and restricted stock unit awards, and 0 shares were subject to stock options and SARs.
Thus, the total number of shares of the Company’s common stock subject to awards granted under the 2015 LTIP per year over the last three fiscal years (2018, 2019 and 2020) has been, on average, 4.51% of the weighted-average number of shares of the Company’s common stock issued and outstanding for the corresponding year. Performance-based vesting awards have been included above in the year in which the award was granted.
The total number of shares of our common stock that were subject to awards granted under the 2015 LTIP that terminated or expired, and thus became available for new award grants under the 2015 LTIP, in each of the last three fiscal years, and to date (as of March 23, 2021) in 2021, are as follows: 279,994 in 2018, 167,662 in 2019, 254,964 in 2020, and 49,913 in 2021. Shares subject to 2015 LTIP awards that terminated or expired, or were withheld to cover tax withholding obligations arising with respect to the award, and became available for new award grants under the 2015 LTIP have been included when information is presented in this 2021 Plan proposal on the number of shares available for new award grants under the 2015 LTIP.
The Compensation Committee anticipates that the 1,250,000 additional shares requested for the 2021 Plan (assuming usual levels of shares becoming available for new awards as a result of forfeitures of outstanding awards) will provide the Company with flexibility to continue to grant equity awards under the 2021 Plan through approximately the end of 2023 (reserving sufficient shares to cover potential payment of performance-based awards at maximum payment levels. However, this is only an estimate, in the Company’s judgment, based on current circumstances. The total number of shares that are subject to the Company’s award grants in any one year or from year-to-year may change based on a number of variables, including, without limitation, the value of the Company’s common stock (since higher stock prices generally require that fewer shares be issued to produce
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awards of the same grant date fair value), changes in competitors’ compensation practices or changes in compensation practices in the market generally, changes in the number of employees, changes in the number of directors and officers, whether and the extent to which vesting conditions applicable to equity-based awards are satisfied, acquisition activity and the need to grant awards to new employees in connection with acquisitions, the need to attract, retain and incentivize key talent, the type of awards the Company grants, and how the Company chooses to balance total compensation between cash and equity-based awards.
The closing price of a share of our common stock as of March 23, 2021 was $6.64
Equity Compensation Plan Information
The Company currently maintains one equity compensation plan: the 2015 LTIP, which has been approved by the Company’s stockholders. Stockholders are also being asked to approve a new equity compensation plan, the 2021 Plan, as described above.
The following table sets forth, for the 2015 LTIP, the number of shares of common stock subject to outstanding awards, the weighted-average exercise price of outstanding options and SARs, and the number of shares remaining available for future award grants as of December 31, 2020.
Plan Category
Number of securities
to be issued upon
exercise of
outstanding options
and rights (1)
Weighted-average
exercise price of
outstanding options and rights
Number of securities
remaining available
for future issuance
under equity compensation plans (excluding securities reflected in column (2)
Equity compensation plans approved by security holders4,105,713$12.00964,970
Equity compensation plans not approved by security holders
N/A
N/A
N/A
Total4,105,173$12.00964,970
(1)The number of securities included within this column includes RSUs of 2,40,393 and PSUs of 1,275,000 which are not considered in determining the weighted-average exercise price of $12.00 included above.
(2)All of the securities disclosed in this column are available for future issuance other than upon the exercise of an option or right.
Federal Income Tax Information
The following is a brief summary of the U.S. federal income tax consequences of the 2021 Plan generally applicable to our company and to participants in the 2021 Plan who are subject to U.S. federal taxes. The summary is based on the Internal Revenue Code, applicable Treasury Regulations and administrative and judicial interpretations, each as in effect on the date of this proxy statement, and is subject to future changes in the law, possibly with retroactive effect. The summary is general in nature and does not purport to be legal or tax advice. Furthermore, the summary does not address issues relating to any U.S. gift or estate tax consequences or the consequences of any state, local or foreign tax laws.
Nonqualified Stock Options. A participant generally will not recognize taxable income upon the grant or vesting of a nonqualified stock option with an exercise price at least equal to the fair market value of our common stock on the date of grant and no additional deferral feature. Upon the exercise of a nonqualified stock option, a participant generally will recognize compensation taxable as ordinary income in an amount equal to the difference between the fair market value of the shares underlying the stock option on the date of exercise and the exercise price of the stock option. When a participant sells the shares, the participant will have short-term or long-term capital gain or loss, as the case may be, equal to the difference between the amount the participant received from the sale and the tax basis of the shares sold. The tax basis of the shares generally will be equal to the greater of the fair market value of the shares on the exercise date or the exercise price of the stock option.
Incentive Stock Options. A participant generally will not recognize taxable income upon the grant of an incentive stock option. If a participant exercises an incentive stock option during employment or within three months after employment ends (12 months in the case of permanent and total disability), the participant will not recognize taxable income at the time of exercise for regular U.S. federal income tax purposes (although the participant generally will have taxable income for alternative minimum tax purposes at that time as if the stock option were a nonqualified stock option). If a participant sells or otherwise disposes of the shares acquired upon exercise of an incentive stock option after the later of 1) one year from the date the participant exercised the option, and 2) two years from the grant date of the stock option, the participant generally will recognize long-term capital gain or loss equal to the difference between the amount the participant received in the disposition and the exercise price of the stock option. If a participant sells or otherwise disposes of shares acquired upon exercise of an incentive stock option before these holding period requirements are satisfied, the disposition will constitute a "disqualifying disposition," and the participant generally
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will recognize taxable ordinary income in the year of disposition equal to the excess of the fair market value of the shares on the date of exercise over the exercise price of the stock option (or, if less, the excess of the amount realized on the disposition of the shares over the exercise price of the stock option). The balance of the participant's gain on a disqualifying disposition, if any, will be taxed as short-term or long-term capital gain, as the case may be.
With respect to both nonqualified stock options and incentive stock options, special rules apply if a participant uses shares of common stock already held by the participant to pay the exercise price or if the shares received upon exercise of the stock option are subject to a substantial risk of forfeiture by the participant.
Stock Appreciation Rights. A participant generally will not recognize taxable income upon the grant or vesting of a SAR with a grant price at least equal to the fair market value of our common stock on the date of grant and no additional deferral feature. Upon the exercise of a SAR, a participant generally will recognize compensation taxable as ordinary income in an amount equal to the difference between the fair market value of the shares underlying the SAR on the date of exercise and the grant price of the SAR.
Restricted Stock Awards, Restricted Stock Units, and Performance Awards. A participant generally will not have taxable income upon the grant of restricted stock, restricted stock units or performance awards. Instead, the participant will recognize ordinary income at the time of vesting or payout equal to the fair market value (on the vesting or payout date) of the shares or cash received minus any amount paid. For restricted stock only, a participant may instead elect to be taxed at the time of grant.
Other Stock-Based Awards. The U.S. federal income tax consequences of other stock-based awards will depend upon the specific terms of each award.
Tax Consequences to the Company. In the foregoing cases, we generally will be entitled to a deduction at the same time, and in the same amount, as a participant recognizes ordinary income, subject to certain limitations imposed under the Internal Revenue Code, such as the $1 million deduction limit under Internal Revenue Code Section 162(m) (applicable to compensation paid to certain covered employees).
Section 409A. We intend that awards granted under the 2021 Plan comply with, or otherwise be exempt from, Section 409A of the Internal Revenue Code, but make no representation or warranty to that effect.
Tax Withholding. We are authorized to deduct or withhold from any award granted or payment due under the 2021 Plan, or require a participant to remit to us, the amount of any withholding taxes due in respect of the award or payment and to take such other action as may be necessary to satisfy all obligations for the payment of applicable withholding taxes. The 2021 Plan permits withholding obligations to be satisfied through share withholding at up to maximum statutory rates. We are not required to issue any shares of common stock or otherwise settle an award under the 2021 Plan until all tax withholding obligations are satisfied.


Recommendation and Vote Required

Our Board unanimously recommends that stockholders vote “FOR” the approval of the 2021 Long-Term Incentive Plan. Approval of this proposal requires the affirmative vote of a majority of the shares cast on the matter. Abstentions are considered as votes cast and, as a result, will have the effect of an "AGAINST" vote. In general, brokers do not have discretionary authority on proposals relating to equity compensation plans. Therefore, absent instructions from you, your broker may not vote our shares on this proposal. Broker non-votes will have no effect on the vote on this proposal.
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COMPENSATION DISCUSSION AND ANALYSIS
Table of Contents
•Executive Summary
•We are Committed to Compensation Best Practices
•Compensation Philosophy and Process
•Key 2020 Compensation Decisions
•Other Compensation Practices and Policies
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Executive Summary
2020 Performance
Our results for the full year 2020 reflect the ongoing positive impact of our strategic actions, cost savings initiatives, and strong management and operational effectiveness, despite the impacts of COVID-19 across our segments. Our actions in 2020 and year-to-date, which have included launching new segments, expanding internationally, implementing additional cost savings initiatives, and most recently closing successful common stock and senior notes offerings, have provided a strong foundation for the continued execution of our growth strategy.
Full year 2020 GAAP net income was a loss of $10.3 million, an improvement of $111.7 million compared to a loss of $122.0 million in 2019. Adjusted EBITDA improved to $45.1 million compared to $45.0 million in 2019. Total bookings in 2020 were $645.0 million, and backlog at December 31, 2020 was $535.0 million, a 21.3% increase in backlog. compared to December 31, 2019. Additional information regarding adjusted EBITDA, a non-GAAP financial measure, can be found in Appendix A.
Consolidated revenues in 2020 were $566.3 million, down 34% compared to 2019. Revenues in all segments were adversely impacted by COVID-19, including the postponement and delay of several projects. Full year GAAP operating loss in 2020 was $1.7 million, inclusive of an insurance loss recovery of $26.0 million offset by restructuring and settlement costs and advisory fees of $24.7 million, compared to an operating loss of $29.4 million in 2019. The improvement in operating loss was primarily due to the insurance loss recovery, the positive impact of cost savings initiatives and a lower level of losses on the EPC loss contracts, partially offset by the 2019 divestiture of Loibl and the impacts of COVID-19 on revenue in all three segments.
We have continued to identify and implement cost-savings initiatives. In addition to the $119 million of cost savings initiatives previously disclosed, we implemented approximately $8 million of additional cost savings initiatives in 2020, for a total of $127 million, and have identified another $11 million of cost savings actions expected to be implemented beginning in the first quarter of 2021.
Our recent common stock and senior notes offerings resulted in net proceeds of approximately $283 million after deducting underwriting discounts and commissions, but before expenses, and significantly reduced our secured debt and future cash interest payments. Combined with a reduction in our required pension contributions, we expect to save more than $40 million annually in cash expenses on a pro-forma basis, while also providing capital to support the expansion of our clean energy technologies portfolio as we continue to pursue more than $5 billion of identified pipeline opportunities over the next three years, in addition to our high-margin parts and services business. Looking forward, we remain focused on growing our B&W Renewable and B&W Environmental segments, including deploying our waste-to-energy and carbon capture technologies to help meet the increasing global demand for carbon and methane reductions. The next-generation B&W is positioned to power the global energy and environmental transformation.
2020 PAY-FOR-PERFORMANCE
Our executive compensation programs are based on a strong alignment between pay and performance, and this is reflected in the payout amounts under our annual incentive program and the value of earned awards granted under our long-term incentive program. Decisions by the Compensation Committee of the Board, which we refer to in this discussion as the “Compensation Committee,” in 2020 also took into account prior feedback from our stockholders and concern for retention of key personnel while we address operational issues.
We again did not perform as expected in 2020. For the third year in a row, no payment was earned under the financial component of the annual cash incentive program. See “2020 Summary Compensation Table” for a comparison of the total compensation received by our NEOs in 2020 versus 2019 and 2018, as applicable. We also determined in 2020 that the financial performance goals (relative total stockholder return, earnings per share and return on invested capital) for the 2017-2019 performance period used to determine vesting of certain long-term incentive awards we granted in 2017 had not been met and, accordingly, those 2017 awards terminated without vesting.
For our 2020 equity program, in order to provide additional incentives to create value for our stockholders, we made grants of PSUs that would vest based on achievement a specific closing share price which was a significant increase over the stock price at the time of grant. See “Equity Incentive Awards” below.
MANAGEMENT OVERVIEW
Compensation decisions for our NEOs are made by the Compensation Committee. Key features of our executive compensation program for the NEOs are outlined in this “Compensation Discussion and Analysis”.
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During 2020, we saw turnover in our executive team, as outlined below:
•Officer Transitions: Effective January 31, 2020, Robert P. McKinney, stepped down as our Senior Vice President, General Counsel and Corporate Secretary. Effective September 11, 2020, Dwyane M. Petish, stepped down as Corporate Treasurer. Effective December 31, 2020, Henry E. Bartoli resigned as Chief Strategy Officer.
The following five NEOs were still serving as our executive officers as of December 31, 2020.
NAME
TITLE (AS OF LAST DAY OF 2019)
Kenneth M. Young
Chief Executive Officer
Louis Salamone
Chief Financial Officer
John J. Dziewisz
Senior Vice President & Corporate Secretary
Robert M. Caruso*
Chief Implementation Officer
Jimmy B. Morgan
Chief Operating Officer
* Mr. Caruso stepped down as our Chief Implementation Officer effective March 4, 2021.
THIRD-PARTY COMPENSATION ARRANGEMENTS
We are party to contractual arrangements with third parties with respect to the services of Messrs. Young and Caruso.
While serving as our Chief Executive Officer, Mr. Young continues to receive his salary and benefits from B. Riley Financial, Inc. and its affiliates. Pursuant to a consulting agreement between us and an affiliate of B. Riley Financial, Inc. (the “B. Riley Affiliate”), we paid the B. Riley Affiliate $62,500 per month in return for Mr. Young’s services as Chief Executive Officer during 2020. In 2020 we granted Mr. Young RSUs and PSUs that are further described below. In addition, we provided commuting expenses to Mr. Young for travel between his home in Washington DC and our corporate headquarters in Akron, OH.
Mr. Caruso has served as a Managing Director with Alvarez & Marsal since September 2006. Pursuant to an existing professional services agreement between us and Alvarez & Marsal, Mr. Caruso received a salary and benefits from Alvarez & Marsal for 2020. In connection with Mr. Caruso’s service as Chief Implementation Officer of the Company, we paid Alvarez & Marsal an additional $1,000 per hour subject to a maximum of $150,000 per month under the professional services agreement. If, at the end of the month, actual fees incurred for Mr. Caruso’s services exceed $150,000, such excess (up to a maximum of $75,000 per month) will be reserved and applied to any future month in which the actual fees for Mr. Caruso’s services do not reach $150,000. In addition, we will pay Alvarez & Marsal additional incentive fees, including a $500,000 incentive fee upon the closing of certain refinancing transactions with respect to our credit facilities and a fee equal to 5% of annualized cost-savings initiated by Mr. Caruso. We also retain Alvarez & Marsal for other professional services not directly related to the services of Mr. Caruso.
2020 SAY-ON-PAY VOTE
At our 2020 annual meeting, we received roughly 77% approval on our advisory vote to approve NEO compensation. We considered this in general as an affirmation that our stockholders support our executive compensation program, but we hope to achieve higher levels of support in future votes and intend to continue our efforts to engage with our stockholders for their views on our compensation programs.
WE HAVE ENGAGED WITH OUR STOCKHOLDERS
Our board of directors contains two individuals designated to the board by our two largest stockholders, Vintage and B. Riley. Each of Vintage and B. Riley has designated one of the six directors serving on the Board, with Mr. Bartoli being nominated by Vintage and Mr. Howe being nominated by B. Riley. These directors provide valuable ongoing feedback on behalf of Vintage and B. Riley, respectively, feedback we believe is consistent with the views held by a number of our other stockholders on the best ways to align our executive compensation program and strategies to strengthen the Company and better position us for success. Generally, these investors have supported our executive compensation program goals, encouraged us to focus on paying for demonstrable performance, and asked that we carefully consider eliminating our classified board structure.
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2020 COMPENSATION PROGRAM DESIGN
The Compensation Committee took the following key actions with respect to the 2020 executive compensation program design, each as further described below:
•modified the annual cash incentive program by aligning of the annual cash incentives to the achievement of adjusted EBITDA and Company bookings as well as Company refinancing and rebranding, which we believe motivates our executives to maximize our operational performance, and, consequently, stockholder value;
•providing an annual cash incentive program for all NEOs except Mr. Caruso to properly motivate these executives, in particular, to improve our financial performance as measured with respect to adjusted EBITDA;
•modified our compensation practices with respect to long-term equity compensation by transitioning away from stock options and making equity grants in 2020 in the form of time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) which align the interests of our executives with our stockholders and enhances our ability to retain our executives;
•reviewed and approved certain changes to the Compensation Committee Charter.

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2020 COMPENSATION MIX
The following charts illustrate the target mix of base salary, annual incentive awards and equity incentive awards (based on the grant date fair value of the award as determined for accounting purposes) for Mr. Young and our other NEOs who were serving as executive officers as of the end of 2020 (other than Mr. Caruso who is compensated pursuant to a consulting agreement as described above), highlighting the performance-driven focus of the compensation opportunities:
2020 Target Total Direct Compensation
Mr. Young, Chief Executive Officer(1)
Other NEOs
image1a.jpgimage2a.jpg
(1)Mr. Young serves as chief executive officer pursuant to a third-party consulting agreement with the B. Riley Affiliate. Base salary is payable to the B. Riley Affiliate. Long-term incentive compensation is payable directly to Mr. Young.
KEY 2020 PROGRAM ELEMENTS
The main elements of our 2020 executive compensation program, a description of each element, and an explanation as to why we pay each element, are provided below (although not all NEOs received some or all of these compensation elements, as discussed above):
Compensation Element
Description
Objectives
Base SalaryFixed cash compensation; reviewed annually and subject to adjustmentAttract, retain and motivate the NEO
Annual Cash Incentive CompensationShort-term cash incentive compensation paid based on performance against annually established financial performance goalsReward and motivate the NEO for achieving key short-term performance objectives
Long-Term Equity Compensation
Annual equity compensation awards of restricted stock units and performance-based restricted stock units
Align NEO interests with those of our stockholders by rewarding the creation of long-term stockholder value and encouraging stock ownership
Health, Welfare and Retirement Benefits
Qualified retirement plans and health care and insurance
Attract and retain the NEO by providing market-competitive benefits
Severance and Change in Control ArrangementsReasonable severance payments and benefits provided upon an involuntary termination, including an involuntary termination following a change in control of the CompanyHelp attract and retain high quality talent by providing market-competitive severance protection, and help encourage the NEO to direct his or her attention to stockholders’ interests, notwithstanding the potential for loss of employment in connection with a change in control
Limited PerquisitesAirline club memberships and commuting expenses to including transportation and lodgingAttract and retain high quality talent
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We Are Committed to Compensation Best Practices
The Compensation Committee believes that our executive compensation program follows best practices aligned to stockholder interests, summarized below:
WHAT WE DO
WHAT WE DON’T DO
Pay-for-performance philosophy emphasizes compensation tied to creation of stockholder value, with a significant portion of NEOs’ overall compensation tied to our performance
No excise tax gross-ups upon a change in control
Robust compensation governance practices, including annual CEO performance evaluation process by independent directors, thorough process for setting rigorous performance goals, compensation committee comprised solely of independent directors and use of an independent compensation consultant
No discounting, reloading or re-pricing of stock options without stockholder approval
Limited perquisites and reasonable severance and change in control protection that requires involuntary termination
Mix of short-term and long-term incentives
No guaranteed incentive awards for executives
 Clawback provisions in annual and equity incentive compensation plans
 Policies prohibiting executives from hedging or pledging our stock
No “single trigger” change in control acceleration of equity awards or severance payments
 Strong stock ownership guidelines for executives
(five times base salary for CEO and three times base salary for other NEOs)
 Annual say-on-pay vote to approve compensation paid to our NEOs.
Annual say-on-pay vote to approve compensation paid to our NEOs.
OUR COMPENSATION PHILOSOPHY
We emphasize pay-for-performance, rewarding those who achieve or exceed their goals, and we use annual cash incentives and equity incentives to drive for strong results for our stockholders.
Our compensation program is designed to:
•Incent and reward annual and long-term performance;
•Set rigorous, but motivating goals;
•Align interests of our executives with our stockholders; and
•Attract and retain well-qualified executives.
The Compensation Committee generally works with management to help ensure the compensation program aligns with industry standards and has a balanced design that will achieve the desired objectives.
The roles and the responsibilities of the Compensation Committee, management and our independent compensation consultant for 2020 are summarized here.
Compensation Committee (Three Independent Directors)
•Established and implemented our executive compensation philosophy;
•Aimed to ensure the total compensation paid to our NEOs was fair and competitive, and motivated high performance; and
•Subscribed to a “pay-for-performance” philosophy when designing executive compensation programs that intended generally to place a substantial portion of each executive’s target compensation “at risk” and make it performance-
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based, where the value of one or more elements of compensation was tied to the achievement of financial or other measures we considered important drivers in the creation of stockholder value.
B&W Management
•Prepared information and materials for the Compensation Committee relevant to matters under consideration by the Compensation Committee;
•Messrs. Young and Salamone each provided recommendations regarding compensation of certain of the other NEOs (Messrs. Morgan, Dziewisz and Caruso); and
•Messrs. Young and Salamone and senior human resources personnel attended Compensation Committee meetings and, as requested by the Compensation Committee, participated in deliberations on executive compensation (other than their own).
Consultant to our Compensation Committee
In 2020, we hired Willis Towers Watson (WTW) as an independent compensation consultant to:
•Provide the Compensation Committee with information and advice on the design and structure of executive and director compensation;
•Review market survey and proxy compensation data for comparative market analysis;
•Advise the Compensation Committee on external market factors and evolving compensation trends; and
•Provide the Company assistance with regulatory compliance and changes regarding compensation matters.
During 2020, WTW did not perform work for the Company other than pursuant to its engagement by the Compensation Committee therefore the engagement of WTW does not raise any conflict of interest with the Company or any of its directors or executive officers.
Plan Design and Risk Management
We subscribe to a “pay-for-performance” philosophy. As such:
•Incentive Compensation Tied to Performance – Generally, our participating NEOs’ annual cash incentive compensation is “at risk,” with the value tied to the achievement of financial and other measures we consider important drivers of stockholder value. For 2020, equity incentive awards were granted in the form of time-based RSUs and PSUs which would vest only if we achieve a $7 or higher closing stock price, which we believe aligns management’s interests with our shareholders’ interests and provides incentives for long-term value creation.
•Equity Incentive Compensation Subject to Forfeiture for Certain Acts — The Compensation Committee may generally terminate outstanding equity awards if the recipient (1) is convicted of a misdemeanor involving fraud, dishonesty or moral turpitude or a felony, or (2) engages in conduct that adversely affects or may reasonably be expected to adversely affect the business reputation or economic interests of the Company.
•Annual and Equity Compensation Subject to Clawbacks — Incentive compensation awards include provisions allowing us to recover excess amounts paid to individuals who knowingly engaged in a fraud resulting in a restatement.
•Use of Appropriate Performance Measures — Our annual incentive program was based on adjusted EBITDA to align with the way we and our investors generally measure our profitability.
•Stock Ownership Guidelines — Our executive officers and directors are subject to stock ownership guidelines, which help to promote longer-term perspectives and align the interests of our executive officers and directors with those of our stockholders.
The Compensation Committee reviewed the risks and rewards associated with our compensation programs. The programs were designed with features that mitigate risk without diminishing the incentive nature of the compensation. We believe our compensation programs encourage and reward prudent business judgment and appropriate risk-taking over the short term and the long term. Management and the Compensation Committee do not believe any of our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on us.
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Key 2020 Compensation Decisions
BASE SALARIES
The Compensation Committee believes that the payment of a competitive base salary is a necessary element of any compensation program. Base salary levels also affect short-term cash incentive compensation because each NEO’s target opportunity is expressed as a percentage of base salary.
In setting base salaries, the Compensation Committee considers, among other things, comparability to compensation practices and compensation data from companies with whom we compete for executive talent from the engineering and construction, aerospace and defense, heavy electrical equipment and industrial machinery industries, our financial resources, our contractual obligations to our NEO’s and certain third party service providers, as well as the level of experience and expertise of individuals. No particular weight is assigned to any individual item.
The Compensation Committee increased Mr. Morgan’s salary to $500,000 per year effective April 1, 2020, in recognition of the scope of Mr. Morgan’s responsibilities as the newly named Chief Operating Officer.
On January 1, 2020, the Compensation Committee increased Mr. Dziewisz’s salary to $325,000 in connection with being named Senior Vice President and Corporate Secretary of the Company, and General Counsel of The Babcock & Wilcox Company. Mr. Dziewisz’s salary was once more increased on November 15, 2020 to $365,000 in recognition of his taking on increased responsibilities which allowed the Company to reduce its reliance on outside firms for certain aspects of reporting.
The following table shows the 2020 annual base salary approved by the Compensation Committee for each of the NEOs.
NAME
ANNUAL BASE SALARY
AS DECEMBER 31, 2020
ANNUAL BASE SALARY
AS OF DECEMBER 31, 2019
PERCENTAGE INCREASE
Louis Salamone Jr.$475,000 $475,000 — 
Jimmy B. Morgan$500,000 $475,000 5.26 %
John J. Dziewisz$365,000 $252,500 44.55 %
As discussed above, Mr. Young continued to receive his annual salary from B. Riley Financial, Inc., and Mr. Caruso was paid his annual salary by Alvarez & Marsal, while we paid compensation with respect to these individuals pursuant to third-party arrangements.
ANNUAL CASH INCENTIVES
The Compensation Committee believes that providing an annual cash incentive opportunity is a necessary element of any compensation program, which motivates management to achieve thoughtfully determined strategic objectives, including financial performance objectives.
Executives such as Mr. Caruso, who serve us as consultants through third party relationships are not generally invited to participate in the annual cash incentives provided to our employee-executives. In addition, executives who serve on our board of directors, such as Mr. Bartoli are also not considered eligible for annual cash incentives. As described below, the Compensation Committee did establish an annual cash incentive opportunity for Mr. Young, despite Mr. Young’s consultancy arrangement with us.
2020 Executive Cash Incentive Plan
For 2020, we provided participating NEOs with a performance bonus opportunity called the Executive Cash Incentive Plan (the “2020 ECIP”) that challenged them to enhance Company performance with respect to adjusted EBITDA and Company bookings as well as Company refinancing and rebranding. The Committee structured 100% of their incentive opportunities based on the achievement of these initiatives.
Target Awards. Each participating NEO had a target annual incentive award. The target award amounts were established by the Compensation Committee taking into account each participating NEO’s experience, role and scope of duties.
All NEOs except Mr. Caruso were participants in the 2020 ECIP.
2020 Performance Bonus Payout. As described in more detail below, based on our 2020 performance, no payments were made under the 2020 ECIP.
2020 ECIP Design. The Compensation Committee determined that, in order to better align our executives’ interests with those of our investors with respect to enhanced financial performance and to align our compensation regime with investor communications and internal management of our business, the awards under the 2020 ECIP would be based on adjusted
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EBITDA, a booking target, completion of the Company’s refinancing and the overall rebranding of the Company. There were no specific weights given to any of the measures since all goals needed to be met in order for a payout to occur.
For purpose of the 2020 performance bonus adjusted EBITDA meant our adjusted earnings before interest, taxes, depreciation and amortization. In order for these measures to reflect core operating results, the Compensation Committee determined that adjusted EBITDA also exclude the following items: (1) acquisition, disposition and divestiture costs; (2) restructuring expenses (including termination costs and advisor fees); (3) expenses associated with the spin-off; (4) pension mark-to-market adjustments; (5) acquisition related amortization; (6) losses from divestitures; (7) impairments of tangible and intangible assets; (8) losses in respect of legal proceedings and dispute resolutions; (9) changes in accounting policies/standards and tax regulations; and (10) foreign exchange impacts recorded in “Other Income.” These adjustments allowed for changing business strategies, fostered consistency in the incentive plan, facilitated flexibility in assessing goal attainment, and promoted objective business decision making.
The Compensation Committee believes that our forecasting process produces rigorous goals that are reasonably achievable if the businesses perform as expected. As a result, the Compensation Committee set the target level of performance based on forecast.
The Compensation Committee established the following goals for the 2020 ECIP.
•Adjusted EBITDA of $20M
•Company bookings of $500M
•Completion of Company refinancing
•Completion of Company rebranding
In early 2021, our Compensation Committee reviewed the 2020 financial performance results and determined that for purposes of our 2020 ECIP, our adjusted EBITDA was $19.1 million. Accordingly, we did not achieve the adjusted EBITDA goal, and as a result, the 2020 ECIP payout percentage was determined to be 0% for all participants.
LONG-TERM CASH INCENTIVE AWARDS
On September 11, 2020, the Compensation Committee approved and established a long-term cash incentive structure for certain eligible employees including all of the NEOs. The long-term cash incentive awards are to incentivize growth in our adjusted EBITDA over the next two years. Each recipient of a long-term cash incentive award has a bonus opportunity based 50% on our adjusted EBITDA for 2021 and 50% on our adjusted EBITDA for 2022. To the extent a award recipient is eligible for a bonus based on our adjusted EBITDA for 2021 or 2022 and except as the Compensation Committee may otherwise provide, the participant will only earn the bonus if the participant remains employed with us or one of our subsidiaries through December 31, 2023; provided that the Compensation Committee may pay up to half of any such bonus opportunity corresponding to 2021 or 2022 following the end of that year (subject to clawback, unless otherwise provided by the Compensation Committee, if the participant ceases to be employed with us or one of our subsidiaries prior to December 31, 2023). The total long-term cash incentive opportunity for each of our NEOs is as follows: Kenneth M. Young- $1,500,000; Jimmy B. Morgan- $1,500,000; Louis Salamone- $950,000; and John Dziewisz- $650,000.
EQUITY INCENTIVE AWARDS
The Compensation Committee believes that it is important to attract and retain qualified personnel by offering an equity-based program that is competitive and that is designed to encourage each of our NEOs to balance short-term Company goals with long-term performance and to foster executive retention.
In 2020, we provided equity incentive compensation awards to our NEOs in the form of (1) time-based RSUs and (2) PSUs that vest based on the attainment of a $7 or higher closing stock price, which represented almost a 200% increase from the stock price at the time of grant. The decision by the Compensation Committee to grant restricted stock units and performance stock units rather than stock options was based on the belief that fewer RSUs and PSUs could be granted (relative to stock options) to deliver the same grant date fair value, RSUs have retentive value even if our stock price does not appreciate, the value of PSUs remains subject to the attainment of a performance-based vesting goals, and both RSUs and PSUs continue to align the executives’ interests with the interests of stockholders as the value of the awards is dependent upon our stock price. In determining to grant RSUs and PSUs to our executives, the Compensation Committee took into account the need to provide meaningful long-term incentives to our executives and employees in light of the fact that previously issued performance stock units granted in 2016 had not paid out and our outstanding stock options and SARs were underwater, and therefore had limited incentive and retention value. For all executives, the time-based RSU awards vest ratably over three years and the PSUs have a five year timeline to achieve the defined closing stock price goal. The 2020 RSU and PSU awards were generally granted by the Compensation Committee effective August 25, 2020.
The aggregate value of the awards granted in 2020 was generally based on the Compensation Committee’s review of each participating NEO’s experience, role and scope of duties, in order to provide competitive equity incentive opportunities. Use of equity-based awards, together with our meaningful stock ownership requirements, was intended to further align the interests of
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participating NEOs with the interests of our stockholders, which is another important objective of our executive compensation program.
The following table summarizes the number of shares subject to the 2020 equity incentive awards for each participating NEO:
2020 Long-Term Incentive Awards
NAME
RESTRICTED
STOCK UNITS
PERFORMANCE-BASED STOCK UNITS
Kenneth M. Young
200,000 250,000 
Louis Salamone Jr.
150,000 200,000 
Jimmy B. Morgan
150,000 200,000 
John J. Dziewisz
100,000 150,000 
Executives such as Mr. Caruso who serve us as consultants through third party relationships are not generally eligible annual equity incentive awards from us. As described below, the Compensation Committee did grant RSUs and PSUs to Mr. Young, despite Mr. Young’s consultancy arrangement with us, in order to better retain his services and align his interests with those of our shareholders. Such RSUs and PSUs were granted to Mr. Young directly and not the B. Riley Affiliate, in order to provide an incentive directly to Mr. Young.
In February 2021, our closing stock price exceeded the $7 per share target set for the PSUs granted to the NEOs in 2020 and, accordingly, each of the PSU awards described above vested in full at that time.
2020 Long-Term Incentive Performance Update
In April 2020, the Compensation Committee reviewed our performance against the goals established for performance-based RSUs granted to certain of our NEOs in 2017 (“2017 PSUs”). From 0% to 200% of the target levels of the 2017 PSU awards could have been earned based on achievement with respect to cumulative adjusted diluted earnings per share (“Cumulative EPS”), average annual return on invested capital (“ROIC”), and relative total shareholder return (“RTSR”) performance for the period beginning on January 1, 2017 and ending on December 31, 2019 (the “2017-2019 Performance Period”).
For purposes of the 2017 PSUs:
•Cumulative EPS was the net income attributable to our common stock over the 2017-2019 Performance Period divided by our weighted average diluted shares outstanding for that period;
•ROIC was a ratio of our net operating profit after tax (“NOPAT”) in relation to our invested capital, with NOPAT defined as operating income less tax expense, and “invested capital” defined as our total debt (short- and long-term) plus total stockholders’ equity; and
•RTSR was a measure comparing our total shareholder return over the 2017-2019 Performance Period to that of the companies in the custom peer group described in our 2017 proxy statement. For this purpose, “total shareholder return” was [(a) – (b) + (c)]/b, where (a) is the Stock Price (as defined below) on the last business day of the 2017-2019 Performance Period, (b) is the Stock Price on the first business day of the 2017-2019 Performance Period and (c) is dividends paid and reinvested during the 2017-2019 Performance Period. The term “Stock Price” means the average daily closing price of a share of common stock of the applicable company during the preceding 30 calendar days.
In order for Cumulative EPS and ROIC to reflect core operating results, the Compensation Committee determined that the measures should be adjusted for the following items: (1) acquisition, disposition and divestiture costs; (2) restructuring expenses (including termination costs and advisor fees); (3) expenses associated with the spin-off; (4) pension mark-to market adjustments; (5) acquisition related amortization; (6) losses from divestitures; (7) impairments of tangible and intangible assets; (8) losses in respect of legal proceedings and dispute resolutions; and (9) changes in accounting policies/standards and tax regulations. These adjustments allowed for changing business strategies, fostered consistency in the long-term incentive program, facilitated flexibility in assessing goal attainment, and promoted objective business decision making.
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Each participating NEO earned 0% of the target 2017 PSU award, as reflected in the table below:
METRIC
THRESHOLD
TARGET
MAX
ACTUAL
WEIGHTING
RESULT
Cumulative EPS (60%)
Goal$2.19$2.73$3.05$(17.67)
Payout %50%100%200%60/1000%
ROIC (20%)
Goal6.2%6.7%7.5%(46)%
Payout %50%100%200%20/1000%
RTSR (20%)
Goal
25Th percentile
50th percentile
≥75th percentile
< 25Th percentile
Payout %50%100%200%20/1000%
Total Payout %0%
As a result, no payouts were earned with respect to the 2017 PSUs. Among the NEOs, Messrs. Morgan and Dziewisz held 2017 PSUs, as each of the other NEOs commenced service to the Company after the applicable grant date.
OTHER OUTSTANDING RETENTION AWARDS
In 2019, the Compensation Committee approved a special, cash-settled award to Mr. Morgan of $100,000. This award was granted as a retention tool, in light of Mr. Morgan’s critical position as the new Chief Operating Officer. The award to Mr. Morgan provided for the payment of $50,000 in each of October 2020 and October 2021, subject to his continued employment through the applicable vesting date.
BENEFITS
To the extent they are eligible, NEOs may participate in our tax-qualified 401(k) plan and various health and welfare plans on the same basis as other eligible employees of the Company. The 401(k) plan included an employer matching contribution of up to 4% of eligible compensation for participants who are not eligible for a defined benefit pension plan through April 30, 2020 after which the match was suspended by the Company.
Certain NEOs also participate in a non-qualified defined contribution retirement plan, referred to as the “Restoration Plan”. The plan permits our participating NEOs to choose to defer eligible compensation above the limited amounts permitted under the 401(k) plan. The Restoration Plan provides for an employer match on the same basis as under the 401(k) plan but without regard to certain limits that otherwise apply to the 401(k) plan under U.S. Internal Revenue Code rules. The Compensation Committee believes that the opportunities to defer compensation and receive employer contributions under the Restoration Plan reflects competitive market practices and provide our participating NEOs with reasonable retirement benefit opportunities given their compensation. The Restoration Plan does not provide for above-market earnings on any deferred amounts. In November 2019, the Compensation Committee elected to freeze all employee deferrals and Company contributions to the Restoration Plan with respect to compensation earned for services beginning on or after January 1, 2020. See “2020 Non-qualified Deferred Compensation” for additional information about these plans.
Participating NEOs also receive limited perquisites for items such as annual airline club memberships and commuting expenses, which included lodging and transportation. The Compensation Committee views these benefits as customary arrangements and a standard part of a competitive total compensation package.
SEVERANCE AND CHANGE IN CONTROL PROTECTION
Participating NEOs are eligible to receive certain severance benefits in case of an involuntary termination without “cause,” including a resignation by the executive due to certain adverse changes in employment that constitute “good reason.” Different provisions apply for an involuntary termination that occurs before or following a change in control of the Company. Severance benefits for a termination occurring before a change in control are generally provided for the participating NEOs in accordance with our Executive Severance Plan. Messrs. Morgan and Dziewisz participate in the Executive Severance Plan. Severance benefits for an involuntary termination during a two-year protected period following a change in control are provided under a separate change in control agreement with each participating NEO. Mr. Morgan is the only participating NEO with a change in control agreement, which requires both a change in control and a “Covered Termination” (in other words, a double trigger) for any severance payments thereunder. The Compensation Committee believes the severance benefits provided to these NEOs are reasonable in both amount and type. These arrangements do not provide for any tax gross-ups. The change in control agreements with each participating NEO include covenants regarding protection of confidential information, non-solicitation of employees and customers and non-competition as a condition to the severance benefits. Our equity grant agreements also provide for double-trigger vesting upon a change in control.
The benefits under the Executive Severance Plan and the change in control agreements are further described below under “Potential Payments Upon Termination or Change in Control.”
The Compensation Committee believes that these arrangements serve a number of important purposes for our stockholders. They help us attract and retain top quality executives and represent standard arrangements at most public companies as part of
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a competitive total compensation package. The change in control agreements also better allow executives to objectively evaluate potential transactions.
STOCK OWNERSHIP REQUIREMENTS
We maintain stock ownership guidelines that apply to our NEOs, with the exception of Mr. Caruso who doesn’t receive equity grants through the Company. These guidelines establish minimum stock ownership levels of two to five times annual base salary for executives. The ownership multiples applicable to our continuing NEOs are:
•CEO – Five times base salary; and
•Other NEOs – Three times base salary.
Continuing NEOs have five years to achieve their respective minimum ownership levels. The Governance Committee annually reviews the compliance with these guidelines and has discretion to waive or modify the stock ownership guidelines. All continuing NEOs are currently in compliance with our stock ownership guidelines.
NO HEDGING OR PLEDGING TRANSACTIONS
We maintain a policy that prohibits all directors, officers and employees from trading in puts, calls or other options on our common stock or otherwise engaging in hedging transactions that are designed to hedge or offset any decrease in the market value of our common stock. The directors, officers and employees are also prohibited from pledging our securities and engaging in short sales of our securities.
COMPENSATION RECOVERY (CLAWBACK) POLICY
Annual and equity incentive compensation awards generally include provisions allowing us to recover excess amounts paid to individuals who knowingly engaged in a fraud resulting in a restatement.
TIMING OF EQUITY AWARD APPROVALS
To avoid timing stock awards ahead of the release of material nonpublic information, the Compensation Committee generally approves the annual stock option and other stock awards effective as of the third day following the filing of our annual report on Form 10-K or quarterly report on Form 10-Q with the SEC.
TAX CONSIDERATIONS
Federal income tax law generally prohibits a publicly-held company from deducting compensation paid to a current or former named executive officer that exceeds $1 million during the tax year. Certain awards granted before November 2, 2017 that were based upon attaining pre-established performance measures that were set by the Company’s Compensation Committee under a plan approved by the Company’s stockholders, as well as amounts payable to former executives pursuant to a written binding contract that was in effect on November 2, 2017, may qualify for an exception to the $1 million deductibility limit.
As one of the factors in its consideration of compensation matters, the Compensation Committee notes this deductibility limitation. However, the Compensation Committee has the flexibility to take any compensation-related actions that it determines are in the best interests of the Company and its stockholders, including awarding compensation that may not be deductible for tax purposes. There can be no assurance that any compensation will in fact be deductible.
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COMPENSATION COMMITTEE REPORT
The following report of the Compensation Committee shall not be deemed to be “soliciting material” or to otherwise be considered “filed” with the SEC or be subject to Regulation 14A or 14C (other than as provided in Item 407 of Regulation S-K) or to the liabilities of Section 18 of the Exchange Act, nor shall such information be incorporated by reference into any future filing under the Securities Act, except to the extent that we specifically incorporate it by reference into such filing.
We have reviewed and discussed the Compensation Discussion and Analysis with our management and, based on such review and discussions, we recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and our Form 10-K.
The Compensation Committee
Alan B. Howe (Chair)
Philip B. Moeller
Rebecca L. Stahl
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COMPENSATION OF NAMED EXECUTIVE OFFICERS
The following table summarizes (as applicable) the compensation of each person who served as our Chief Executive Officer (“CEO”) during 2020, each person who served as our Chief Financial Officer (“CFOs”) during 2020 and the three highest-paid executive officers other than the CEOs and CFOs who were still serving as executive officers as of December 31, 2020. We refer to these persons as our Named Executive Officers or NEOs.
2020 Summary Compensation Table
NAME AND
PRINCIPAL
POSITION
YEAR
SALARY ($)(1)
BONUS ($)(2)
STOCK
AWARDS ($)(3)
OPTION
AWARDS
($)
NON-EQUITY
INCENTIVE
PLAN
COMPENSATION ($)
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)
ALL OTHER
COMPENSATION (4)
TOTAL ($)
Kenneth M. Young
Chief Executive Officer
2020$750,000 $— $1,125,000 $— $— $— $102,204 $1,977,204 
2019$750,000 $2,000,000 $2,226,000 $— $1,000,000 $— $34,636 $6,010,636 
2018$88,356 $— $— $1,536,405 $— $— $— $1,624,761 
Louis Salamone Jr.
Chief Financial Officer
2020$475,000 $— $875,000 $— $— $— $192,242 $1,542,242 
2019$475,000 $750,000 $742,000 $— $300,000 $— $45,736 $2,312,736 
Jimmy B. Morgan
Chief Operating Officer
2020$493,750 $50,000 $875,000 $— $— $— $100,138 $1,518,888 
2019$415,625 $82,000 $659,750 $— $21,075 $— $30,468 $1,208,918 
2018$351,250 $82,500 $69,549 $19,500 $— $13,865 $536,664 
John J. Dziewisz
Sr. Vice President & Corporate Secretary
2020$330,000 $— $804,600 $$$120,212 $3,792 $1,258,604 
Robert M. Caruso
Chief Implementation Officer
2020$956,568 $— $— $— $— $— $— $956,568 
2019$1,389,040 $— $— $— $— $— $— $1,389,040 
2018$341,062 $— $— $88,786 $— $— $199,841 $629,689 
(1)With respect to each of Messrs. Young and Caruso, represents consultant fees paid to third party providers, with respect to such executive’s salary. Mr. Young serves as CEO pursuant to a consulting agreement with the B. Riley Affiliate. Mr. Caruso serves as Chief Implementation Officer pursuant to a Consulting Agreement with Alvarez & Marshall. See “Compensation Discussion and Analysis — Third Party Compensation Arrangements.” The Company maintains other consulting engagements with Alvarez & Marshall unrelated to the compensation of Mr. Caruso. Mr. Caruso stepped down as our Chief Implementation Officer effective March 4, 2021.
(2)With respect to Mr. Morgan, represents the payout during 2020 of a portion of the special cash retention bonus granted in 2019, which vests over two years. See “Compensation Discussion and Analysis — Other Outstanding Long-Term Performance and Retention Awards.”
(3)Represents the aggregate grant date fair value of time-based RSUs and PSUs granted during the applicable fiscal year and computed in accordance with FASB ASC Topic 718. With respect to Messrs. Young, Salamone, Morgan and Dziewisz time-based RSUs vest ratably in three annual installments beginning on August 25, 2021. All such future vesting events are subject to continued employment through the date of vesting. With respect to Messrs. Young, Salamone, Morgan and Dziewisz PSUs vest at a $7 or higher closing stock price within a performance period of 5 years. For additional information, see Note 17 (“Stock-Based Compensation”) to our audited financial statements for the fiscal year ended December 31, 2020, included in our annual report on Form 10-K for the year ended December 31, 2020 (and, for awards granted in prior fiscal years, the corresponding note to our audited financial statements in our annual report on Form 10-K for that year).
(4)The amounts reported for 2020 in the “All Other Compensation” column are attributable to the following:
401(k) Plan Contributions(a)
Perquisites(b)
Total All Other Compensation
Mr. Young
— $102,204 $102,204 
Mr. Salamone
$5,542 $186,700 $192,242 
Mr. Morgan
$5,583 $94,554 $100,137 
Mr. Dziewisz
$3,792 — $3,792 
Mr. Caruso
— — — 
(a)The amounts reported in this column represent the total amount of matching and service-based contributions made to each participating NEO under the Company’s 401(k) plan. Under the Company’s 401(k) plan, the Company will match 50% of the first 8% of an employee’s contributions to the plan. The Company match was suspended effective April 30, 2020 due to the COVID-19 pandemic.
(b)The amounts reported in this column represent the commuting expenses for travel from the executive’s home to the Corporate headquarters in Akron, OH. These commuting expenses include lodging, travel and airline club fees.
The amounts reported for 2019 in the “All Other Compensation” column for Messrs. Young, Salamone and Morgan (and the corresponding amounts in the Total column for each executive) have been increased from the amounts reported in the Company’s proxy statement for the 2020


annual meeting of stockholders to include the following amounts paid by the Company for commuting expenses in 2019: Mr. Young - $34,636, Mr. Salamone - $36,236, and Mr. Morgan - $20,157.
2020 Grants of Plan-Based Awards
The following table provides additional information on stock awards and option awards, plus non-equity incentive plan awards, made to our participating NEOs by us during the year ended December 31, 2020. With respect to stock awards and option awards, the amounts of such awards in this table and the tables that follow reflect adjustments to such awards that were approved by the Compensation Committee, as described below.
NAME
GRANT
DATE
COMMITTEE
ACTION
DATE
ESTIMATED POSSIBLE PAYOUTS
UNDER NON-EQUITY INCENTIVE PLAN AWARDS (1)
ESTIMATED POSSIBLE PAYOUTS
UNDER EQUITY INCENTIVE PLAN AWARDS (2)
ALL OTHER
STOCK
AWARDS:
NUMBER OF
SHARES OF
STOCK OR
UNITS (#)(3)
EXERCISE OR
BASE PRICE
OF OPTION
AWARDS($/S)
GRANT DATE
FAIR VALUE
OF STOCK
AND OPTION
AWARDS ($)(4)
THRESHOLD ($)TARGET ($)MAXIMUM ($)THRESHOLD (#)
TARGET
(#)
MAXIMUM
(#)
Mr. Young— — N/A$600,000 N/A— — — — 
9/11/20209/11/2020N/A
$1,500,000(5)
N/A— — — — 
8/25/20208/25/2020— — — — 200,000 — $500,000 
8/25/20208/25/2020— — — 250,000 — — $625,000 
Mr. SalamoneN/A$400,000 N/A
9/11/20209/11/2020N/A
$1,500,000(5)
N/A— — — — 
8/25/20208/25/2020— — — — 150,000 — $375,000 
8/25/20208/25/2020— — — 200,000 — — $500,000 
Mr. MorganN/A$450,000 N/A
9/11/20209/11/2020N/A
$950,000(5)
N/A— — — — 
8/25/20208/25/2020— — — — 150,000 — $375,000 
8/25/20208/25/2020— — — 200,000 — — $500,000 
Mr. DziewiszN/A$150,000 N/A
9/11/20209/11/2020N/A
$650,000(5)
N/A— — — — 
2/1/202012/19/2019— — — — 40,000 — $179,600 
8/25/20208/25/2020— — — — 100,000 — $250,000 
8/25/20208/25/2020— — — 150,000 — — $375,000 
Mr. Caruso— — — — — — — — — 
(1)Except as disclosed in footnote (5), these columns reflect the target annual cash incentive opportunities under the special performance bonus opportunity for all NEOs (pursuant to the 2020 ECIP described above in the “Compensation Discussion and Analysis”), except Mr. Caruso who was not eligible to participate. At the time of the filing of this proxy statement, the actual results of our special performance bonus opportunity were certified, and our NEOs did not receive any payout amounts under the 2020 ECIP (as reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table).
The amounts reflected in the “target” column under “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” represent the value of the payout opportunity at target financial performance levels.
See “Compensation Discussion and Analysis — Key 2020 Compensation Decisions” for more information about the annual incentive awards and performance goals for 2020.
(2)These columns represent the number of PSUs granted in 2020. With respect to all executives the PSUs vest when the closing stock price is $7.00 or higher within the performance period of August 25, 2021 through August 24, 2025. For additional information, See “Compensation Discussion and Analysis — Equity Incentive Awards” above.
(3)This column represents the number of time-based RSUs granted in 2020. With respect to all executives the time-based RSUs vest ratably in three annual installments beginning on August 25, 2021. All such future vesting events are subject to continued employment through the date of vesting. For additional information, See “Compensation Discussion and Analysis — Equity Incentive Awards” above.
(4)This column represents the aggregate grant date fair value of equity awards granted in 2020, calculated in accordance with FASB ASC Topic 718.
(5)These amounts reflect the target long-term cash incentive awards approved in September 2020. See “Compensation Discussion and Analysis — September 2020 Long-Term Cash Incentive Awards” for more information.
Employment Agreement and Severance Arrangements
We have entered into an executive employment agreement with Mr. Salamone dated November 19, 2018. The agreement had an initial term of two years and provides for an automatic extension of the term each year by one additional year unless either party has given at least 90-days advance notice. The agreement provides that Mr. Salamone will serve as Chief Financial Officer of the Company and our affiliates and will receive an annual base salary of not less than $475,000. Mr. Salamone is also entitled
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to participate in our annual bonus program, receives Company benefits for employees of similar rank, and is entitled to reimbursement for certain commuting and lodging expenses.
For a discussion of the severance provisions of Mr. Salamone’s employment agreement, the executive severance plan applicable to Messrs. Morgan and Dziewisz, and the change in control provisions applicable to Mr. Morgan, see “Potential Payments Upon Termination or Change in Control” below.
Outstanding Equity Awards at 2020 Fiscal Year-End
The following “Outstanding Equity Awards at 2020 Fiscal Year-End” table summarizes the equity awards with respect to shares of our common stock that were held by our NEOs and outstanding as of December 31, 2020.
NAMEGRANT DATEOPTION AWARDSSTOCK AWARDS
NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLENUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) UNEXERCISABLEOPTION EXERCISE PRICE ($)OPTION EXPIRATION DATENUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#)
MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($)(1)
EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED (#)
EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($)(1)
Mr. Young
SARS12/18/2018843,500 — $20.00 12/18/2028— — — — 
RSU8/13/2019— — — —
600,000(2)
$2,106,000 — — 
RSU8/25/2020— — — —
200,000(3)
$702,000 — — 
PSU8/25/2020— — — —
250,000(4)
$877,500 
Mr. Salamone
SARS12/18/2018168,700 — $20.00 12/18/2028— — — — 
RSU8/13/2019— — — —
200,000(2)
$702,000 — — 
RSU8/25/2020— — — —
150,000(3)
$526,500 — — 
PSU8/25/2020— — — —
200,000(4)
$702,000 
Mr. Morgan
Stock Options3/1/20161,239 — $137.60 3/1/2026— — — — 
Stock Options3/6/20185,995 — $41.70 3/6/2028— — — — 
RSU8/13/2019— — — —
100,000(5)
$351,000 — — 
RSU10/8/2019— — — —
25,000(7)
$87,750 — — 
RSU8/25/2020— — — —
150,000(3)
$526,500 — — 
PSU8/25/2020— — — —
200,000(4)
$702,000 
Mr. Caruso—— — — —— — — — 
Mr. Dziewisz
Stock Options3/3/2014258 — $140.30 3/3/2024— — — — 
Stock Options3/2/20151,328 — $132.70 3/2/2025— — — — 
Stock Options3/1/2016619 — $137.60 3/1/2026— — — — 
Stock Options3/6/20181,913 — $41.70 3/6/2028— — — — 
RSU8/13/2019— — — —
26,667(5)
$93,601 — — 
RSU2/1/2020— — — —
40,000(6)
$140,400 — — 
RSU8/25/2020— — — —
100,000(3)
$351,000 — — 
PSU8/25/2020— — — —
150,000(4)
$526,500 
(1)Based on the closing market price of our common stock on December 31, 2020 of $3.51, as reported on the New York Stock Exchange.
(2)These time-based RSUs are scheduled to vest on January 2, 2021.
(3)These time-based RSUs are scheduled to vest in ratable installments on August 25, 2021, 2022 and 2023.
(4)These performance-based stock units (“PSUs”) are scheduled to vest when the closing price of the B&W stock is $7.00 or more within the performance period of August 25, 2020 through August 24, 2025. As noted above, these PSUs vested upon achievement of the stock price target in February 2021.
(5)These time-based RSUs are scheduled to vest in equal installments on August 13, 2021 and August 13, 2022.
(6)These time-based RSUs are scheduled to vest in equal installments on February 1, 2021 and February 1, 2022.
(7)These time-based RSUs are scheduled to vest on October 8, 2021.
In accordance with the terms of the 2015 LTIP, the Compensation Committee approved equitable adjustments to then-outstanding awards in connection with the one-for-ten reverse stock split which became effective on July 24, 2019.
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2020 Option Exercises and Stock Vested
The following “2020 Option Exercises and Stock Vested” table provides additional information about the value realized by our NEOs on exercises of option awards and vesting of stock awards with respect to our common stock during the year ended December 31, 2020.
NAMEOPTION AWARDSSTOCK AWARDS
NUMBER OF SHARES ACQUIRED ON EXERCISE (#)VALUE REALIZED
ON EXERCISE ($)
NUMBER OF SHARES ACQUIRED ON VESTING (#)(1)
VALUE REALIZED
ON VESTING ($)(1)
Mr. Young— — — — 
Mr. Salamone— — — — 
Mr. Morgan— — 55,697 $156,075 
Mr. Dziewisz— — 14,996 $42,086 
Mr. Caruso— — — — 
(1)For each NEO, the amounts reported in the “number of shares acquired on vesting” column in the table above represent the aggregate number of shares of common stock acquired by the NEO upon vesting of the award. The amounts reported in the “value realized on vesting” column were calculated by multiplying the number of shares acquired on the date of vesting by the closing price of our common stock on the date of vesting. The number of shares acquired in connection with the vesting of RSUs includes shares withheld by us to satisfy the minimum statutory withholding tax due on vesting.
2020 Pension Benefits
The following “2020 Pension Benefits” table summarizes our NEOs’ benefits under our tax-qualified defined benefit plans and supplemental executive retirement plans (other than our non-qualified defined contribution plans). None of the NEOs other than Mr. Dziewisz participated in these plans.
NAMEPLAN NAMENUMBER OF YEARS OF CREDITED SERVICE(#)
PRESENT VALUE OF ACCUMULATED BENEFIT ($)(1)
PAYMENTS DURING LAST FISCAL YEAR ($)
Mr. DziewiszQualified Plan23.333$892,390—
Excess PlanN/A——
(1)Present value of accumulated benefits is based on a discount rate of 2.53% for the Qualified Plan.
Overview of Qualified Plans
The Company maintains retirement plans that are funded by trusts and cover certain eligible regular full-time employees, described below in the section entitled “Participation and Eligibility.” Mr. Dziewisz is the only NEO who participates in the Retirement Plan for Employees of Babcock & Wilcox Commercial Operations (the “Qualified Plan”).
Participation and Eligibility
Generally, certain salaried employees over the age of 21 years participate in the pension plans, as follows:
•For salaried participants hired before April 1, 2001, benefit accruals were frozen as of December 31, 2015. Beginning January 1, 2016, affected employees will receive a service-based cash contribution to their 401(k) plan account; and
•For salaried participants hired on or after April 1, 2001, benefit accruals were frozen as of March 31, 2006, subject to cost of living adjustments. Beginning January 1, 2016, the cost of living adjustments were discontinued. Affected employees receive a service-based cash contribution to their 401(k) account.
Benefits
For eligible NEOs, benefits under the Qualified Plan are based on years of credited service and final average cash compensation (including bonuses).
The present value of accumulated benefits reflected in the “2020 Pension Benefits” table above is based on a discount rate at December 31, 2020 and the PRI2012 mortality table projected with the MP2020 Buck modified white collar mortality improvement scale. The discount rate applicable to the pension plans at December 31, 2020 was 2.53% for the Qualified Plan. Additional benefit accruals offset by reductions in the discount rate, among other factors, result in an increase in the present value of the pension benefits.
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Retirement
Under the Qualified Plan, normal retirement is age 65. The normal form of payment is a single-life annuity or a 50% joint and survivor annuity, depending on the employee’s marital status when payments are scheduled to begin.
2020 Non-qualified Deferred Compensation
The following “2020 Non-qualified Deferred Compensation” table summarizes our NEOs’ compensation under our non-qualified defined contribution plans. None of the NEOs other than Mr. Morgan participated in the Company’s Restoration Plan, and none of the NEOs has elected to defer payment of any outstanding RSU awards.
NAMEPLAN NAMEEXECUTIVE CONTRIBUTIONS IN 2020 ($)REGISTRANT CONTRIBUTIONS IN 2020 ($)
AGGREGATE EARNINGS IN 2020 ($)(1)
AGGREGATE WITHDRAWALS/ DISTRIBUTIONS ($)AGGREGATE BALANCE AT 12/31/20 ($)
Mr. MorganRestoration Plan——$277.08—$2,149.73
(1)The amounts reported in this column represent hypothetical amounts of earnings or losses and dividends credited during 2020 on all accounts for each NEO under the Company’s Restoration Plan. These gains and losses are not reported as compensation in the “2020 Summary Compensation Table” as the Company has determined they are not above-market as determined under applicable SEC rules.
RESTORATION PLAN
The Company’s Restoration Plan is an unfunded, non-qualified defined contribution plan through which the Company previously provided annual contributions to each participant’s notional accounts, which are referred to as a participant’s company matching account and company service-based account. Benefits under the Restoration Plan are based on a participant’s vested percentage in his or her notional account balance at the time of distribution. Each participant generally vests 100% in his or her company matching account and company service-based account upon completing three years of service with the Company, subject to accelerated vesting for death, disability, termination by the Company without cause or retirement, or on a change in control. Under this plan, each participant elects to have his or her notional accounts hypothetically invested in one or more of the investment funds designated by the Compensation Committee. Each participant’s notional accounts are credited and debited to reflect gains and losses on the hypothetical investments.
Effective July 1, 2018, the Company discontinued any further service-based contributions to the Restoration Plan. In November 2019, the Compensation Committee elected to freeze all employee deferrals and Company contributions to the Restoration Plan with respect to compensation earned for services beginning on or after January 1, 2020.
DEFERRED RESTRICTED STOCK UNITS UNDER LTIP
Under the terms of the 2015 LTIP, the Compensation Committee has the discretion to permit selected participants to defer all or a portion of their stock awards. These deferred RSUs will be paid by the Company in the form of Company common stock. As noted above, no NEOs elected to defer any RSUs during 2020 of held any outstanding deferred RSUs as of December 31, 2020.
Potential Payments Upon Termination or Change In Control
The following table shows potential payments to our NEOs under existing contracts, agreements, plans or arrangements, whether written or unwritten, for various scenarios under which a payment would be due in the event of a change in control or termination of employment of our NEOs, assuming a December 31, 2020 termination date. Where applicable, the amounts listed below use the closing price of the Company’s common stock of $3.51 (as reported on the NYSE) as of December 31, 2020. These tables do not reflect amounts that would be payable to the NEOs pursuant to benefits or awards that are already vested.
Except as otherwise indicated, amounts reported in the below tables for options, SARs, time-based RSUs and PSUs represent the value of unvested and accelerated shares or units, as applicable, calculated by:
•for options and SARs: multiplying the number of accelerated stock options or SARs by the difference between the exercise price or base price and $3.51 (the closing price of the Company’s common stock on December 31, 2020); and
•for RSUs and PSUs: multiplying the number of accelerated units by $3.51 (the closing price of the Company’s common stock on December 31, 2020).
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NAMETERMINATION SCENARIO
CASH
($)
ACCELERATED VESTING
OF EQUITY AWARDS
($)
HEALTH AND
WELFARE BENEFITS
($)
OUTPLACEMENT SERVICES ($)
TOTAL
($)
Mr. YoungTermination Without Cause/For Good Reason— 526,500 — — 526,500 
 Change in Control— — — — — 
 Death/Disability— 2,808,000 — — 2,808,000 
       
Mr. SalamoneTermination Without Cause/For Good Reason475,000 175,500 — — 650,500 
 Change in Control— — — — — 
 Death/Disability— 1,228,500 — — 1,228,500 
      
Mr. MorganTermination Without Cause/For Good Reason500,000 109,688 7,225 12,000 628,913 
 Termination in Connection with Change in Control2,500,000 1,667,250 86,705 12,000 4,265,955 
Change in Control— — — — — 
 Death/Disability500,000 965,250 7,225 — 1,472,475 
Mr. DziewiszTermination Without Cause/For Good Reason365,000 58,501 7,136 12,000 442,637 
 Change in Control— — — — — 
 Death/Disability365,000 585,001 7,136 — 957,137 
       
Mr. CarusoTermination Without Cause/For Good Reason— — —  — 
 Change in Control— — —  — 
 Death/Disability— — —  — 
THIRD-PARTY COMPENSATION ARRANGEMENTS – Messrs. Young and Caruso
As noted above, the services of Mr. Young are provided pursuant to a consulting arrangement with the B. Riley Affiliate and the services of Mr. Caruso are provided pursuant to a consulting arrangement with Alvarez & Marshall. Neither consulting arrangement provides for any severance or benefits upon a cessation of services.
In addition to his consulting arrangement, Mr. Young may be eligible for acceleration of any RSUs or PSUs in accordance with the terms of the 2015 LTIP, described below.
EXECUTIVE EMPLOYMENT AGREEMENTS – Mr. Salamone
The Company has entered into an executive employment agreement with Mr. Salamone dated November 19, 2018. Under this agreement, in the event of a termination of the Company other than for “cause” or by the executive for “good reason” (as such terms are defined in the agreement), Mr. Salamone shall be entitled to continuation of base salary for a period of 52 weeks. Receipt of the severance benefits under the employment agreement is subject to the executive delivering a general release of claims and agreeing to certain non-compete, nondisclosure and other restrictive covenants.
The employment agreement does not provide for enhanced severance protection in the event of a termination of employment following a change in control.
EXECUTIVE SEVERANCE PLAN– Messrs. Morgan and Dziewisz
The Company maintains an executive severance plan pursuant to which participants (including Messrs. Morgan and Dziewisz) are eligible to receive certain severance benefits in case of an involuntary termination without “cause,” including a termination for “good reason.”
Severance. The severance payment reported for Messrs. Morgan and Dziewisz represents salary continuation payments equal to 52 weeks of base salary as in effect on the date of termination. Receipt of the severance benefits under the Executive Severance Plan is generally subject to executing a general release of claims and agreeing to certain non-compete, nondisclosure and other restrictive covenants.
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Reimbursement of Health Care Premiums. Upon a termination by the Company for any reason other than cause under our Executive Severance Plan, Messrs. Morgan and Dziewisz would be entitled to reimbursement of the employer share of the “applicable premium” for continuation coverage under COBRA for the medical, dental and/or vision benefits in effect for the participating NEO and his qualified beneficiaries as of the date of termination for a period of three months. The amounts reported were determined by multiplying the monthly employer cost of 2021 medical, dental and/or vision benefits for the participating NEO and his qualified beneficiaries by three. These payments are subject to the same conditions described above for severance payments.
Outplacement Services. Messrs. Morgan and Dziewisz would be entitled to 12 months of employer-paid outplacement services under our Executive Severance Plan following his termination by the Company for reasons other than cause. The amount reported represents the cost the Company would incur to engage our third-party service provider for 12 months of executive outplacement services.
CHANGE IN CONTROL AGREEMENT– Mr. Morgan
The Company has change in control agreements with various officers elected prior to August 4, 2016, including Mr. Morgan (but none of the other NEOs). Generally, under the Company’s change in control agreements and certain other compensation arrangements, if an NEO is terminated within two years following a change in control (as defined in the agreement) either (1) by the Company for any reason other than cause or death or disability, or (2) by the NEO for good reason (in each case, a “qualifying termination”), the NEO is entitled to receive:
•accelerated vesting in the executive’s Restoration Plan account;
•accelerated vesting in any outstanding equity awards;
•a cash severance payment;
•a prorated target bonus payment;
•payment of the prior year’s bonus payment, if unpaid at termination; and
•a cash payment representing health benefits coverage costs.
In addition to these payments, the NEO would be entitled to various accrued benefits earned through the date of termination, such as earned but unpaid salary and earned but unused reimbursements.
Severance. The severance payment made to Mr. Morgan in connection with a qualifying termination following a change in control is a cash payment equal to two times the sum of (1) the executive’s annual base salary prior to termination and (2) the same annual base salary multiplied by the executive’s target annual incentive compensation percentage for the year in which the termination occurs. Assuming a termination as of December 31, 2020, the severance payment on a qualifying termination following a change in control would have been calculated based on the following for Mr. Morgan: $500,000 base salary and $500,000 target annual incentive compensation (100% of his annual base salary).
Incentive Component of Severance. The severance amount for Mr. Morgan in connection with a qualifying termination following a change in control also includes his target annual incentive amount for 2020. We have assumed for purposes of this disclosure that, in the event of a December 31, 2020 termination date, he would have been entitled to a payment equal to 100% of his 2020 target incentive, as in effect immediately prior to the date of termination.
Benefits. The amount reported for Mr. Morgan represents three times the full annual cost that would be payable by the NEO for continuation of coverage for medical, dental and vision benefits if elected by the NEO for himself and his eligible dependents under COBRA for the year ended December 31, 2020, which would be paid in a lump sum.
Tax Reimbursements. The change in control agreements do not provide for any tax reimbursement on the benefits. Instead, the agreements contain a “modified cutback” provision, which acts to reduce the benefits payable to a NEO to the extent necessary so that no excise tax would be imposed on the benefits paid, but only if doing so would result in the NEO retaining a larger after-tax amount.
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TREATMENT OF LONG TERM INCENTIVE AWARDS UNDER PLAN
Under the terms of the Company’s outstanding awards (including awards held by the NEOs), all unvested RSUs and PSUs would become vested on a qualifying termination following a change in control (as defined in the applicable award agreements).
Executives are entitled to acceleration of unvested RSUs in the event that employment is terminated by reason of a Reduction in Force (as defined in the applicable RSU agreement) on or after the first anniversary of the date of grant, then (i) 25% of the then-remaining outstanding RSUs will vest on the date of such termination if the termination occurs prior to the second anniversary of the date of grant and (ii) 50% of the then remaining outstanding RSUs will vest on the date of such termination if the termination occurs on or after the second anniversary of the date of grant. The term “Reduction in Force” means a termination of employment under circumstances that would result in the payment of benefits under The Babcock & Wilcox Employee Severance Plan or a successor plan (whether or not the executive is a participant in such plan), termination of employment in connection with a voluntary exit incentive program, or termination of employment under other circumstances which the Committee designates as a reduction in force.
Executives are entitled to full acceleration of unvested RSUs in the event of a termination of employment due to death or disability, or upon a termination of employment by the Company other than for “cause” or by the executive for “good reason”, in each case within two years following a change in control. For the unvested PSUs, acceleration occurs upon a change in control (except to the extent the Committee provides for a replacement award that satisfies certain requirements specified in the PSU award agreement, in which case the award will remain outstanding after the change in control and subject to acceleration in connection with a qualifying termination of the holder’s employment).
RESTORATION PLAN
Under our Restoration Plan, an executive’s Company matching account and Company service-based account become fully vested on, among other events, a change in control or the date of the executive’s death or disability. Mr. Morgan is 100% vested in his Restoration Plan accounts as of December 31, 2020. Accordingly, none of the amounts in his Company matching accounts and Company service-based accounts would be subject to accelerated vesting.
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CEO PAY RATIO
Pursuant to the Exchange Act, we are required to disclose in this proxy statement the ratio of the total annual compensation of our CEO to the median of the total annual compensation of all of our employees (excluding our CEO). Based on SEC rules for this disclosure and applying the methodology described below, we have determined that our CEO’s total compensation for 2020 was $1,977,204, and the median of the total 2020 compensation of all of our employees (excluding our CEO) was $50,823. Accordingly, we estimate the ratio of our CEO’s total compensation for 2020 to the median of the total 2020 compensation of all of our employees (excluding our CEO) to be 39 to 1.
Applicable SEC rules permit us to use the same median employee in calculating the pay ratio above as the median employee we identified in 2020 in presenting the pay ratio in our proxy statement for our annual meeting of stockholders held in 2020 (the “2020 median employee”) if there have been no changes that we reasonably believe would significantly affect this pay ratio disclosure. We believe that there have been no changes to our employee population or compensation arrangements that would result in a significant change to the pay ratio disclosure. Accordingly, we used the 2020 median employee to calculate the pay ratio above. The median employee’s total annual compensation for 2020 used in presenting the pay ratio above was determined using the same rules that apply to reporting the compensation of our NEOs (including our CEO) in the “Total” column of the “2020 Summary Compensation Table.”
We note that, due to our permitted use of reasonable estimates and assumptions in preparing this pay ratio disclosure, the disclosure may involve a degree of imprecision, and thus this ratio disclosure is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
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STOCKHOLDERS’ PROPOSALS
Any stockholder who wishes to have a qualified proposal considered for inclusion in our proxy statement for the Annual Meeting must send notice of the proposal to our Corporate Secretary at our principal executive office no later than December 6, 2021 2022. If you make such a proposal, you must provide your name, address, the number of shares of common stock you hold of record or beneficially, the date or dates on which such common stock was acquired and documentary support for any claim of beneficial ownership.
In addition, any stockholder who intends to submit a proposal for consideration at our 2022 annual meeting of stockholders, but not for inclusion in our proxy materials, or who intends to submit nominees for election as directors at the meeting must notify our Corporate Secretary. Under our bylaws, such notice must (1) be received at our principal executive offices no earlier than close of business on January 20, 2022 and no later than February 19, 2022 and (2) satisfy specified requirements set forth in our bylaws. A copy of the pertinent bylaw provisions can be found on our website at www.babcock.com at “Investors — Corporate Governance — Governance Documents.”
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on May 20, 2021.
The Proxy Statement and 2020 Annual Report are available on the Internet at www.proxyvote.com.
The following information applicable to the Annual Meeting may be found in the proxy statement and accompanying proxy card:
•The date, time and location of the Annual Meeting;
•A list of the matters intended to be acted on and our recommendations regarding those matters;
•Any control/identification numbers that you need to access your proxy card; and
•Information about attending the Annual Meeting.
GENERAL INFORMATION
The Board has made these materials available to you over the Internet and has mailed you a printed version of these materials in connection with the Annual Meeting, which will take place on May 20, 2021. We mailed our proxy materials to our stockholders beginning on April 5, 2021, and our proxy materials were posted at www.proxyvote.com on that same date.
We have sent and provided access to the materials to you because the Board is soliciting your proxy to vote your shares at the Annual Meeting. We will bear all expenses incurred in connection with this proxy solicitation. We have engaged D. F. King & Co., Inc. to assist in the solicitation for a fee that will not exceed $17,500.00. In addition, our officers and employees may solicit your proxy by telephone, by facsimile transmission or in person and they will not be separately compensated for such services. We solicit proxies to give all stockholders an opportunity to vote on matters that will be presented at the Annual Meeting. In this proxy statement, you will find information on these matters, which is provided to assist you in voting your shares. If your shares are held through a broker or other nominee (i.e., in “street name”) and you have requested printed versions of these materials, we have requested that your broker or nominee forward this proxy statement to you and obtain your voting instructions, for which we will reimburse them for reasonable out-of-pocket expenses. If your shares are held through the B&W Thrift Plan and you have requested printed versions of these materials, the trustee of that plan has sent you this proxy statement and you should instruct the trustee on how to vote your plan shares.
VOTING INFORMATION
Record Date and Who May Vote
The Board selected March 23, 2021 as the record date for determining stockholders entitled to vote at the Annual Meeting. This means that if you were a registered stockholder with our transfer agent and registrar, Computershare Trust Company, N.A., on the record date, you may vote your shares on the matters to be considered at the Annual Meeting. If your shares were held in street name on that date, you should refer to the instructions provided by your broker or nominee for further information. They are seeking your instructions on how you want your shares voted. Brokers holding shares in street name can vote those shares
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on routine matters if the beneficial owner has not provided voting instructions at least 10 days before a meeting. Under the rules of the NYSE, none of the proposals presented at the Annual Meeting are considered “routine” matters except for the ratification of the appointment of the independent auditor (Proposal 5). That means that for those proposals that are considered “non-routine” matters, brokers may not vote your shares if you have not given your broker specific instructions as to how to vote, and your shares will not be represented in those matters. Brokers may only vote your shares for the ratification of the appointment of the independent auditor (Proposal 5). Please be sure to give specific voting instructions to your broker.
On the record date, 85,663,813 shares of our common stock were outstanding. Each outstanding share of common stock entitles its holder to one vote on each matter to be acted on at the Annual Meeting.
How to Vote
Most stockholders can vote by proxy in three ways:
•by Internet at www.proxyvote.com;
•by telephone; or
•by mail.
If you are a stockholder of record, you can vote your shares by voting by Internet, telephone, mailing in your proxy or virtually at the Annual Meeting. You may give us your proxy by following the instructions included in the enclosed proxy card.
By giving us your proxy, you will be directing us how to vote your shares at the Annual Meeting. Even if you plan on attending the meeting, we urge you to vote now by giving us your proxy. This will ensure that your vote is represented at the meeting. If you do attend the meeting, you can change your vote at that time, if you then desire to do so.
If you are the beneficial owner of shares held in street name, the methods by which you can access the proxy materials and give the voting instructions to the broker or nominee may vary. Accordingly, beneficial owners should follow the instructions provided by their brokers or nominees to vote by Internet, telephone or mail. If you want to vote your shares virtually at the Annual Meeting, you must obtain a valid proxy from your broker or nominee. You should contact your broker or nominee or refer to the instructions provided by your broker or nominee for further information. Additionally, the availability of Internet or telephone voting depends on the voting process used by the broker or nominee that holds your shares.
You may receive more than one proxy statement and proxy card or voting instruction form if your shares are held through more than one account (e.g., through different brokers or nominees). Each proxy card or voting instruction form only covers those shares held in the applicable account. If you hold shares in more than one account, you will have to provide voting instructions as to all your accounts to vote all your shares.
How to Change Your Vote or Revoke Your Proxy
For stockholders of record, you may change your vote or revoke your proxy by written notice to our Corporate Secretary at 1200 East Market Street, Suite 650, Akron, Ohio 44305, granting a new later dated proxy, submitting a later dated vote by telephone or on the Internet, or by voting virtually at the Annual Meeting. Unless you attend the meeting and vote your shares, you should change your vote using the same method (by Internet, telephone or mail) that you first used to vote your shares. This will help the inspector of election for the meeting verify your latest vote.
For beneficial owners of shares held in street name, you should follow the instructions in the information provided by your broker or nominee to change your vote or revoke your proxy. If you want to change your vote as to shares held in street name by voting virtually at the Annual Meeting, you must obtain a valid proxy from the broker or nominee that holds those shares for you.
How to Participate in the Annual Meeting
This year’s Annual Meeting will be held exclusively via live webcast enabling stockholders from around the world to participate, submit questions in writing and vote. Stockholders of record as of the close of business on March 23, 2021, are entitled to participate in and vote at the Annual Meeting by visiting www.virtualshareholdermeeting.com/BW2021. To participate in the Annual Meeting via live webcast, you will need the 16-digit control number included on your proxy card and on the instructions
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that accompanied your proxy materials. The Annual Meeting will begin promptly at 10:30 a.m. Eastern Time. Online check-in will begin at 10:25 a.m. Eastern Time. Please allow ample time for the online check-in procedures.
The online format for the Annual Meeting also allows us to communicate more effectively with you via www.virtualshareholdermeeting.com/BW2021.
How to locate your 16-digit control number prior to the day of the Annual Meeting
Prior to the day of the Annual Meeting, if you need assistance with your 16-digit control number and you hold your shares in your own name, please email investors@babcock.com. If you hold your shares in the name of a bank or brokerage firm, you will need to contact your bank or brokerage firm for assistance with your 16-digit control number.
Quorum
The Annual Meeting will be held only if a quorum exists. The presence at the Annual Meeting, in person or by proxy, of the holders of shares of stock having a majority of the votes the holders of all outstanding shares of capital stock of the Company entitled to vote at the Annual Meeting could cast will be necessary and sufficient to constitute a quorum. If you attend the meeting or vote your shares by Internet, telephone or mail, your shares will be counted toward a quorum, even if you abstain from voting on a particular matter. Shares held by brokers and other nominees as to which they have not received voting instructions from the beneficial owners and lack the discretionary authority to vote on a particular matter are called “broker non-votes” and will count for quorum purposes.
Proposals Presented for Vote
We are asking you to vote on the following:
•Proposal 1: approve amendments to our Certificate of Incorporation to declassify the Board and provide for annual elections of all directors beginning at the 2023 annual meeting of stockholders;
•Proposal 2: If Proposal 1 is approved, elect Henry E. Bartoli and Philip D. Moeller as Class I directors of the Company to serve a term of two years;
•Proposal 3: If Proposal 1 is not approved, elect Henry E. Bartoli and Philip D. Moeller as Class III directors of the Company to serve a term of three years;
•Proposal 4: Approve amendments to our Certificate of Incorporation to remove provisions that require the affirmative vote of holders of at least 80% of the voting power to approve certain amendments to the Certificate of Incorporation and Bylaws;
•Proposal 5: Ratify our Audit and Finance Committee’s appointment of Deloitte as our independent registered public accounting firm for the year ending December 31, 2021; and
•Proposal 6: Approve, on a non-binding advisory basis, the compensation of our named executive officers.
•Proposal 7: Approve the Babcock & Wilcox Enterprises, Inc. 2021 Long-Term Incentive Plan.
Vote Required
For Proposal 1, you may vote “FOR” or “AGAINST” or abstain from voting. This proposal requires the affirmative vote of at least 80% of the outstanding shares of our common stock. Accordingly, abstentions and broker non-votes will have the effect of a vote against Proposal 1.
For Proposal 2, you may vote “FOR” all director nominees or withhold your vote for any one or more of the director nominees
For Proposal 3, you may vote “FOR” all director nominees or withhold your vote for any one or more of the director nominees. Subject to our majority voting requirements described below, director nominees are elected by a plurality of the votes cast by the shares of our common stock entitled to vote in the election of directors at a meeting of stockholders at which a quorum is present. Abstentions and broker non-votes will have no effect on the election of directors. This means that the individuals
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nominated for election to the Board who receive the most “FOR” votes (among votes properly cast in person or by proxy) will be elected. However, under our bylaws, any nominee for director is required to submit an irrevocable contingent resignation letter. If a nominee for director does not receive a majority of the votes cast "FOR" his or her election (not counting any abstentions or broker non-votes as being cast), the Board will act on an expedited basis to determine whether to accept the resignation.
For Proposal 4, you may vote “FOR” or “AGAINST” or abstain from voting. This proposal requires the affirmative vote of at least 80% of the outstanding shares of our common stock. Accordingly, abstentions and broker non-votes will have the effect of a vote against Proposal 4.
For Proposal 5, you may vote “FOR” or “AGAINST” or abstain from voting. This proposal requires the affirmative vote of a majority of the shares cast on the matter. Abstentions will not be considered as cast and, as a result, will not have any effect on the proposal. Because the ratification of the appointment of the independent auditor is considered a “routine” matter, there will be no broker non-votes with respect to Proposal 5.
For Proposal 6, you may vote “FOR” or “AGAINST” or abstain from voting. Proposal 6 requires the affirmative vote of a majority of the shares of our common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter in order to be adopted. Abstentions are counted for purposes of determining a quorum and are considered present and entitled to vote on Proposal 6. As a result, abstentions have the effect of an “AGAINST” vote. Broker non-votes will not be considered as entitled to vote on Proposal 6, even though they are considered present for purposes of determining a quorum and may be entitled to vote on other matters. As a result, broker non-votes will not have any effect on Proposal 6.
For Proposal 7, you may vote "FOR" or "AGAINST" or abstain from voting. This proposal requires the affirmative vote of a majority of the shares cast on the matter. Abstentions will not be considered as cast and, as a result, will not have any effect on the proposal.
How Votes are Counted
For stockholders of record, all shares represented by the proxies will be voted at the Annual Meeting in accordance with instructions given by the stockholders. Where a stockholder returns their proxy and no instructions are given with respect to a given matter, the shares will be voted: (1) “FOR” the approval of amendments to our Certificate of Incorporation to declassify the Board and provide for annual elections of all directors beginning at the 2023 annual meeting of stockholders; (2) if Proposal 1 is approved, “FOR” the election of the Board’s nominees as Class I directors for a term of two years; (3) if Proposal 1 is not approved, “FOR” the election of the Board’s nominees as Class III directors for a term of three years; "(4) FOR" the approval of amendments to our Certificate of Incorporation to remove provisions that require the affirmative vote of holders of at least 80% of the voting power to approve certain amendments to our Certificate of Incorporation and Bylaws; (5) “FOR” the ratification of the appointment of Deloitte as our independent registered public accounting firm; (6) “FOR” the approval, on a non-binding advisory basis, of the compensation of our named executive officers; (7) "FOR" the approval of the Babcock & Wilcox Enterprises, Inc. 2021 Long-Term Incentive Plan; and (8) in the discretion of the proxy holders upon such other business as may properly come before the Annual Meeting. If you are a stockholder of record and you do not return your proxy, no votes will be cast on your behalf on any of the items of business at the Annual Meeting.
For beneficial owners of shares held in street name, the brokers, banks, or nominees holding shares for beneficial owners must vote those shares as instructed. Absent instructions from you, brokers, banks and nominees may vote your shares only as they decide as to matters for which they have discretionary authority under the applicable NYSE rules. A broker, bank or nominee does not have discretion to vote on the election of directors or approval of executive compensation. If you do not instruct your broker, bank or nominee how to vote on those matters, no votes will be cast on your behalf on the election of directors or the advisory vote on executive compensation. Your broker will be entitled to vote your shares in its discretion, absent instructions from you, on the ratification of the appointment of Deloitte as our independent registered public accounting firm.
Any shares of our common stock held in the Thrift Plan that are not voted or for which Vanguard does not receive timely voting instructions, will be voted in the same proportion as the shares for which Vanguard receives timely voting instructions from other participants in the Thrift Plan.
We are not aware of any other matters that may be presented or acted on at the Annual Meeting. If you vote by signing and returning the enclosed proxy card or using the Internet or telephone voting procedures, the individuals named as proxies on the card may vote your shares, in their discretion, on any other matter requiring a stockholder vote that comes before the Annual Meeting.
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Notice of Internet Availability of Proxy Materials
Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials to our stockholders. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice of Internet Availability of Proxy Materials or request to receive an electronic copy or printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request an electronic copy or printed copy may be found in the Notice of Internet Availability of Proxy Materials. In addition, stockholders may request to receive the proxy materials in printed form by mail or electronically by email on an ongoing basis.
Confidential Voting
All voted proxies and ballots will be handled to protect your voting privacy as a stockholder. Your vote will not be disclosed except:
•to meet any legal requirements;
•in limited circumstances such as a proxy contest in opposition to the Board;
•to permit independent inspectors of election to tabulate and certify your vote; or
•to adequately respond to your written comments on your proxy card.
By Order of the Board of Directors,
sign1a.jpg
John J. Dziewisz
Corporate Secretary
Dated: April 5, 2021
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APPENDIX A
Non-GAAP Financial Measures
Babcock and Wilcox Enterprises, Inc. (the “Company”) has supplemented net income/(loss) information determined in accordance with GAAP by providing adjusted EBITDA as a supplemental non-GAAP measure in this proxy statement to assist with evaluating performance. Disclosures of adjusted EBITDA presented herein should not be considered in isolation of, as a substitute for, or superior to, financial information prepared in accordance with GAAP, and such measure may not be comparable to those reported by other companies. When viewed in conjunction with GAAP results and the accompanying reconciliation, the Company believes that its presentation of adjusted EBITDA provides investors with greater transparency and a greater understanding of factors affecting our financial condition and results of operations than GAAP measures alone. Management uses adjusted EBITDA as a financial performance measure for financial and operational decision making and as a means to evaluate period-to-period comparisons. Management also uses adjusted EBITDA, together with other metrics, to set goals for and measure the performance of the business as a whole and segments of the business and to determine incentive compensation, as more fully described in ‘‘Compensation Discussion and Analysis-Key 2020 Compensation Decisions-Annual Cash Incentives.’’ Adjusted EBITDA does not purport to be an alternative to cash flows from operating activities as a measure of liquidity, and is not intended to be a measure of free cash flow available for management’s discretionary use as it does not consider certain cash requirements such as tax payments, interest payments and debt service requirements. Further, adjusted EBITDA does not purport to be an alternative to net income as a measure of operating performance. This measure, or measures similar to it, are also frequently used by analysts, investors and other interested parties to evaluate companies in the industry.
Adjusted EBITDA on a consolidated basis is defined by the Company as the sum of the adjusted EBITDA for each of the segments, less corporate costs and research and development costs. At a segment level, the adjusted EBITDA presented is consistent with the way the Company's chief operating decision maker reviews the results of operations and makes strategic decisions about the business and is calculated as earnings before interest, tax, depreciation and amortization adjusted for items such as gains or losses on asset sales and business divestitures, mark to market (“MTM”) pension adjustments, stock compensation, interest on letters of credit included in cost of operations, losses from a non-strategic business and a business held for sale, restructuring costs, losses on debt extinguishment, costs related to financial consulting required under the revolving credit facility and other costs that may not be directly controllable by segment management and are not allocated to the segments.
The calculation of adjusted EBITDA has limitations as an analytical tool, including: (a) it does not reflect the Company’s cash expenditures, or future requirements for capital expenditures or contractual commitments; (b) it does not reflect changes in, or cash requirements for, the Company’s working capital needs; (c) it does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on the Company’s indebtedness; (d) it does not reflect the Company’s tax expense or the cash requirements to pay the Company’s taxes; and (e) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and this measure does not reflect any cash requirements for such replacements.
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Babcock & Wilcox Enterprises, Inc.
Reconciliation of Adjusted EBITDA(4)
(In millions)
Twelve months ended December 31,
20202019
Adjusted EBITDA (1)(2)
B&W Renewable segment$25.0 $1.6 
B&W Environmental segment3.5 12.5 
B&W Thermal segment
35.4 51.4 
Corporate(14.4)(17.6)
Research and development costs(4.4)(2.9)
45.1 45.0 
Restructuring activities(11.8)(11.7)
Financial advisory services(4.4)(9.1)
Settlement cost to exit Vølund contract (3)
— (6.6)
Advisory fees for settlement costs and liquidity planning(6.4)(11.8)
Litigation fees and settlement(2.1)(0.5)
Loss on business held for sale(0.5)(5.9)
Stock compensation(4.6)(3.4)
Interest on letters of credit included in cost of operations(0.9)(0.4)
Depreciation & amortization(16.8)(23.6)
Loss from a non-strategic business(2.6)(5.5)
Gain on asset disposals, net3.3 3.9 
Operating income (loss)(1.7)(29.4)
Interest expense, net(59.2)(94.0)
Loss on debt extinguishment(6.2)(4.0)
Loss on sale of business(0.1)(3.6)
Net pension benefit before MTM28.8 14.0 
MTM (loss) gain from benefit plans(23.2)8.8 
Foreign exchange58.8 (16.6)
Other – net(1.1)0.3 
Total other income (expense)(2.2)(95.1)
Income (loss) before income tax expense(3.9)(124.4)
Income tax expense8.2 5.3 
Income (loss) from continuing operations(12.1)(129.7)
Income from discontinued operations, net of tax1.8 0.7 
Net income (loss)(10.3)(129.0)
Net (income) loss attributable to non-controlling interest— 7.1 
Net income (loss) attributable to stockholders$(10.3)$(122.0)
(1)During the year ended December 31, 2020, we redefined our definition of adjusted EBITDA to eliminate the effects of certain items including loss from a non-strategic business, interest on letters of credit included in cost of operations and loss on business held for sale. Consequently, adjusted EBITDA in prior periods have been revised to conform with the revised definition and present separate reconciling items in our reconciliation.
(2)Adjusted EBITDA for the twelve months ended December 31, 2020, include the recognition of a $26.0 million loss recovery settlement related to certain historical EPC loss contracts in the third quarter.
(3)In March 2019, we entered into a settlement in connection with an additional B&W Renewable waste-to-energy EPC contract, for which notice to proceed was not given and the contract was not started. The settlement eliminated our obligations to act, and our risk related to acting, as the prime EPC should the project have moved forward.
(4)Figures may not be clerically accurate due to rounding.
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APPENDIX B
*If Proposal 1 is approved, Article FIFTH of the Company's Certificate of Incorporation will be amended as set forth in this Appendix B. If Proposal 4 is also approved, Article FIFTH of the Company's Certificate of Incorporation will be further amended as set forth in Appendix C.
FIFTH: (a) Directors. The business and affairs of the Corporation will be managed by or under the direction of the Board of Directors. In addition to the authority and powers conferred on the Board of Directors by the DGCL or by the other provisions of this Certificate of Incorporation, the Board of Directors hereby is authorized and empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject to the provisions of the DGCL, this Certificate of Incorporation and any Bylaws of the Corporation; provided, however, that no Bylaws hereafter adopted, or any amendments thereto, will invalidate any prior act of the Board of Directors that would have been valid if such Bylaws or amendment had not been adopted.
(b) Number, Election, Classification and Terms of Directors. The number of the directors which will constitute the wholeof the Company will be determined solely by resolution of the Board of Directors shall be fixed from time to time exclusively by, and may be increased or decreased from time to time exclusively by, the affirmative vote of at least a majority of the directors then in office (subject to such rights of holders of a class or series of shares of Preferred Stock to elect one or more directors pursuant to any provisions contained in a Directors’ Resolution with respect to such series), but in any event will not be less than three. The directors, other than those who may be elected by. Subject to such rights of the holders of anya class or series of Preferred Stock:
, will be(i)Prior to the election of directors at the 2021 annual meeting of stockholders (the “2021 Annual Meeting”), the Board Directors was divided into three classes:, Class I, Class II and Class III. Each director will serve for a term ending on the third annual meeting of stockholders of the Corporation following the annual meeting of stockholders at which that director was elected; provided, however, that, with the directors first designated asin Class I directors will serve forhaving a term expiring at the annual meeting2022 annual meeting of stockholders (the “2022 Annual Meeting”) of stockholders following the end of the calendar year 2015, the directors first designated asin Class II directors will serve forhaving a term expiring at the 2023 annual meeting of stockholders (the “2023 Annual Meeting”) next following the end of the calendar year 2016, and the directors first designated asin Class III directors will serve forhaving a term expiring at the annual meeting of stockholders next following the end of the calendar year 2017. Each director will hold office until the annual meeting of stockholders at which that director’s term expires and, the foregoing notwithstanding, each director will serve until his or her successor shall have been duly elected and qualified or until his or her earlier death, resignation or removal.2021 Annual Meeting.
(ii)    Following the election of directors at the 2021 Annual Meeting, the Board of Directors will be divided into two classes, Class I and Class II, with the directors in Class I having a term expiring at the 2023 Annual Meeting and the directors in Class II having a term expiring at the 2022 Annual Meeting. The directors in Class I will be the directors elected to the Board of Directors at the 2021 Annual Meeting and the directors who, immediately prior to the 2021 Annual Meeting, were in Class II or III and had terms expiring at the 2021 or 2022 Annual Meetings; the directors in Class II will be the directors who, immediately prior to the 2021 Annual Meeting, were in Class I and had terms expiring at the 2022 Annual Meeting.
(iii)    Commencing with the election of directors at the 2022 Annual Meeting, the directors in Class II will be up for election for a one-year term ending at the 2023 Annual Meeting and, commencing with the election of directors at the 2023 Annual Meeting, the Board of Directors will no longer have classified terms and all directors will be elected for a term expiring at the following annual meeting of stockholders, or if earlier, their death or resignation and may be removed with or without cause as provided in the DGCL.
At each annual election prior to the 2023 Annual Meeting, the directors chosen to succeed those whose terms then expire will be of the same class as the directors they succeed, unless, by reason of any intervening changes in the authorized number of directors, the Board of Directors shall havehas designated one or more directorships whose term then expires as directorships of another class in order more nearly to achieve equality of number of directors among the classes.
Prior to the 2023 Annual Meeting, (i) in In the event of any change in the authorized number of directors, each director then continuing to serve as such will nevertheless continue as a director of the class of which he or she is a member until the expiration of his or her current term, or his or her prior death, resignation or removal. The, and (ii) the Board of Directors will specify the class to which a newly created directorship will be allocated.
Election of directors need not be by written ballot unless the Bylaws of the Corporation so provide.
(c) Removal of Directors. No director of the Corporation may be removed from office as a director by vote or other action of the stockholders or otherwise, except for cause or a Board Determination (as defined below), and then only by the affirmative
B-1

vote of the holders of at least eighty percent (80%) of the voting power of all then outstanding shares of capital stock of the Corporation generally entitled to vote in the election of directors, voting together as a single class. Except as applicable law otherwise provides and unless the Board of Directors has made a determination that removal is in the best interests of the Corporation (in which case a finding of cause is not required for removal), which determination shall require the affirmative vote of at least eighty percent (80%) of the directors then in office at any meeting of the Board of Directors called for that purpose (a “Board Determination”), “cause” for the removal of a director will be deemed to exist only if the director whose removal is proposed: (i) has been convicted, or has been granted immunity to testify in any proceeding in which another has been convicted, of a felony by a court of competent jurisdiction and that conviction is no longer subject to direct appeal; (ii) has been found to have been grossly negligent or guilty of misconduct in the performance of his duties to the Corporation in any matter of substantial importance to the Corporation by (A) the affirmative vote of at least eighty percent (80%) of the directors then in office at any meeting of the Board of Directors called for that purpose or (B) a court of competent jurisdiction; or (iii) has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetency directly affects his ability to serve as a director of the Corporation. Notwithstanding the foregoing, whenever holders of outstanding shares of one or more series of Preferred Stock are entitled to elect members of the Board of Directors voting separately as a class pursuant to the provisions applicable in the case of arrearages in the payment of dividends or other defaults contained in the Directors’ Resolution providing for the establishment of any series of Preferred Stock, any such director of the Corporation so elected may be removed in accordance with the provisions of that Directors’ Resolution. The foregoing provisions of this Article FIFTH are subject to the terms of any series of Preferred Stock with respect to the directors to be elected solely by the holders of such series of Preferred Stock.
(dc) Vacancies. Except as a Directors’ Resolution providing for the establishment of any series of Preferred Stock may provide otherwise, newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from death, resignation, removal or other cause will be filled by the affirmative vote of at least a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors, or by the sole remaining director. Any director elected in accordance with the preceding sentence will hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until that director’s successor shall have been elected and qualified or until his or her earlier death, resignation or removal. Except as a Directors’ Resolution providing for the establishment of any series of Preferred Stock may provide otherwise with respect to directors elected pursuant to any provisions contained in a Directors’ Resolution with respect to such series, no decrease in the number of directors constituting the Board of Directors will shorten the term of any incumbent director.
(ed) Amendment of Bylaws. The Board of Directors shall have the power to adopt, amend or repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of the Bylaws of the Corporation by the Board of Directors shall require the approval of at least a majority of the directors then in office. The stockholders shall also have the power to adopt, amend or repeal the Bylaws of the Corporation at any annual meeting before which such matter has been properly brought in accordance with the Bylaws of the Corporation, or at any special meeting if notice of the proposed amendment is contained in the notice of said special meeting; provided, however, that, in addition to any vote of the holders of any class or series of capital stock of the Corporation required by law or by this Certificate of Incorporation, the affirmative vote of the holders of at least eighty percent (80%) of the voting power of all then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the Bylaws of the Corporation.
(fe) Certain Amendments. Notwithstanding anything in this Certificate of Incorporation or the Bylaws of the Corporation to the contrary, the affirmative vote of the holders of at least 80% of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend or adopt any provision inconsistent with, or to repeal, this Article FIFTH or Article SIXTH.
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APPENDIX C
*If Proposal 4 is approved, Article FIFTH of the Company's Certificate of Incorporation will be amended as set forth in this Appendix C. If Proposal 1 is also approved, Article FIFTH of the Company's Certificate of Incorporation will be further amended as set forth in Appendix B.
FIFTH: (a) Directors. The business and affairs of the Corporation will be managed by or under the direction of the Board of Directors. In addition to the authority and powers conferred on the Board of Directors by the DGCL or by the other provisions of this Certificate of Incorporation, the Board of Directors hereby is authorized and empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject to the provisions of the DGCL, this Certificate of Incorporation and any Bylaws of the Corporation; provided, however, that no Bylaws hereafter adopted, or any amendments thereto, will invalidate any prior act of the Board of Directors that would have been valid if such Bylaws or amendment had not been adopted.
(b) Number, Election, Classification and Terms of Directors. The number of directors which will constitute the whole Board of Directors shall be fixed from time to time exclusively by, and may be increased or decreased from time to time exclusively by, the affirmative vote of at least a majority of the directors then in office (subject to such rights of holders of a series of shares of Preferred Stock to elect one or more directors pursuant to any provisions contained in a Directors’ Resolution with respect to such series), but in any event will not be less than three. The directors, other than those who may be elected by the holders of any series of Preferred Stock, will be divided into three classes: Class I, Class II and Class III. Each director will serve for a term ending on the third annual meeting of stockholders of the Corporation following the annual meeting of stockholders at which that director was elected; provided, however, that the directors first designated as Class I directors will serve for a term expiring at the annual meeting of stockholders next following the end of the calendar year 2015, the directors first designated as Class II directors will serve for a term expiring at the annual meeting of stockholders next following the end of the calendar year 2016, and the directors first designated as Class III directors will serve for a term expiring at the annual meeting of stockholders next following the end of the calendar year 2017. Each director will hold office until the annual meeting of stockholders at which that director’s term expires and, the foregoing notwithstanding, each director will serve until his or her successor shall have been duly elected and qualified or until his or her earlier death, resignation or removal.
At each annual election, the directors chosen to succeed those whose terms then expire will be of the same class as the directors they succeed, unless, by reason of any intervening changes in the authorized number of directors, the Board of Directors shall have designated one or more directorships whose term then expires as directorships of another class in order more nearly to achieve equality of number of directors among the classes.
In the event of any change in the authorized number of directors, each director then continuing to serve as such will nevertheless continue as a director of the class of which he or she is a member until the expiration of his or her current term, or his or her prior death, resignation or removal. The Board of Directors will specify the class to which a newly created directorship will be allocated.
Election of directors need not be by written ballot unless the Bylaws of the Corporation so provide.
(c) Removal of Directors. No director of the Corporation may be removed from office as a director by vote or other action of the stockholders or otherwise, except for cause or a Board Determination (as defined below), and then only by the affirmative vote of the holders of at least eighty percent (80%) of the voting power of all then outstanding shares of capital stock of the Corporation generally entitled to vote in the election of directors, voting together as a single class. Except as applicable law otherwise provides and unless the Board of Directors has made a determination that removal is in the best interests of the Corporation (in which case a finding of cause is not required for removal), which determination shall require the affirmative vote of at least eighty percent (80%) of the directors then in office at any meeting of the Board of Directors called for that purpose (a “Board Determination”), “cause” for the removal of a director will be deemed to exist only if the director whose removal is proposed: (i) has been convicted, or has been granted immunity to testify in any proceeding in which another has been convicted, of a felony by a court of competent jurisdiction and that conviction is no longer subject to direct appeal; (ii) has been found to have been grossly negligent or guilty of misconduct in the performance of his duties to the Corporation in any matter of substantial importance to the Corporation by (A) the affirmative vote of at least eighty percent (80%) of the directors then in office at any meeting of the Board of Directors called for that purpose or (B) a court of competent jurisdiction; or (iii) has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetency directly affects his ability to serve as a director of the Corporation. Notwithstanding the foregoing, whenever holders of outstanding shares of one or more series of Preferred Stock are entitled to elect members of the Board of Directors voting separately as a class pursuant to the provisions applicable in the case of arrearages in the payment of dividends or other defaults contained in the Directors’ Resolution providing for the establishment of any series of Preferred Stock, any such director of the Corporation so elected may be removed in accordance with the provisions of that Directors’ Resolution. The foregoing provisions of this Article FIFTH are subject to the terms of any series of Preferred Stock with respect to the directors to be elected solely by the holders of such series of Preferred Stock.
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(d) Vacancies. Except as a Directors’ Resolution providing for the establishment of any series of Preferred Stock may provide otherwise, newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from death, resignation, removal or other cause will be filled by the affirmative vote of at least a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors, or by the sole remaining director. Any director elected in accordance with the preceding sentence will hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until that director’s successor shall have been elected and qualified or until his or her earlier death, resignation or removal. Except as a Directors’ Resolution providing for the establishment of any series of Preferred Stock may provide otherwise with respect to directors elected pursuant to any provisions contained in a Directors’ Resolution with respect to such series, no decrease in the number of directors constituting the Board of Directors will shorten the term of any incumbent director.
(e) Amendment of Bylaws. The Board of Directors shallwill have the power to adopt, amend or repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of the Bylaws of the Corporation by the Board of Directors shallwill require the approval of at least a majority of the directors then in office. The stockholders shallwill also have the power to adopt, amend or repeal the Bylaws of the Corporation at any annual meeting before which such matter has been properly brought in accordance with the Bylaws of the Corporation, or at any special meeting if notice of the proposed amendment is contained in the notice of said special meeting; provided, however, that, in addition to any vote of the holders of any class or series of capital stock of the Corporation required by law or by this Certificate of Incorporation, the affirmative vote of the holders of at least eighty percent (80%)a majority of the voting power of all then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shallwill be required to adopt, amend or repeal any provision of the Bylaws of the Corporation.
(f) Certain Amendments. Notwithstanding anything in this Certificate of Incorporation or the Bylaws of the Corporation to the contrary, the affirmative vote of the holders of at least 80% of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend or adopt any provision inconsistent with, or to repeal, this Article FIFTH or Article SIXTH.
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