Compensation clause samples

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.

After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials or tender offer materials furnished to our stockholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.

3.8.2.Compensation. Except as disclosed in the Registration Statement, the Company shall not pay any Insider or Company Affiliate or any of their affiliates any fees or compensation for services rendered to the Company prior to, or in connection with, either this Offering or the Business Combination.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company.” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd- Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.

After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting, management or other fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination. It is unlikely the amount of such compensation will be known at the time such materials are distributed, because the directors of the post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to our officers will be determined by a compensation committee constituted solely by independent directors.

3.5.3. Compensation. Except as set forth in this Section 3.5, the Company shall not pay any Initial Shareholder or any of their affiliates any fees or compensation from the Company, for services rendered to the Company prior to, or in connection with, the Offering or the consummation of a Business Combination; provided that the Initial Shareholders shall be entitled to reimbursement from the Company for their out-of-pocket expenses incurred on the Company’s behalf, which includes an aggregate of $300,000 in loans which were made to the Company prior to the effective date of the Registration Statement and expenses incurred by them in connection with seeking and consummating a Business Combination as described in the Registration Statement..

Section 3.3. Compensation. Unless otherwise restricted by the Certificate of Incorporation or these By Laws, the Board shall have the authority to fix the compensation of directors. The directors may be reimbursed their expenses, if any, of attendance at each meeting of the Board, including for service on a committee of the Board, and may be paid either a fixed sum for attendance at each meeting of the Board or other compensation as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board may be allowed like compensation and reimbursement of expenses for service on the committee.

After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of a stockholder meeting held to consider our initial business combination, as it will be up to the directors of the post-combination business to determine executive and director compensation. In this event, such compensation will be publicly disclosed at the time of its determination in a Current Report on Form 8-K, as required by the SEC.

After our initial business combination, members of our management team who remain with us may be paid consulting, board, management or other fees from the combined company with any and all amounts being fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of a stockholder meeting held to consider our initial business combination, as it will be up to the directors of the post-combination business to determine executive and director compensation. In this event, such compensation will be publicly disclosed at the time of its determination in a Current Report on Form 8-K, as required by theSEC.

SECTION 2.  Compensation.  The salaries or other compensation of all officers of the Corporation shall be fixed by the Board of Directors.  No officer shall be prevented from receiving a salary or other compensation by reason of the fact that he is also a director.

5.3       Compensation.  The Escrow Agent shall be entitled to reasonable compensation from the Company for all services rendered by it hereunder.  The Escrow Agent shall also be entitled to reimbursement from the Company for all expenses paid or incurred by it in the administration of its duties hereunder including, but not limited to, all counsel, advisors’ and agents’ fees and disbursements and all taxes or other governmental charges.

Historically, the compensation of our executive officers has been recommended by our Chief Executive Officer and approved by the board. In anticipation of becoming a public company, the Board will adopt a written charter for the Compensation Committee that establishes, among other things, the Compensation Committee's purpose and its responsibilities with respect to executive compensation. The charter of the Compensation Committee will provide that, among other things, the Compensation Committee will be responsible for assisting the Board in its oversight of executive compensation, management development and succession, director compensation and executive compensation disclosure.

The compensation (including insurance, indemnification and exculpation) of a public company’s chief executive officer generally requires the approval of first, the company’s compensation committee; second, the company’s board of directors; and third (except for limited exceptions), the company’s shareholders by the Special Majority for Compensation. If the shareholders of the company do not approve the compensation arrangement with the chief executive officer, the compensation committee and board of directors may override the shareholders’ decision, subject to certain conditions. The compensation committee and board of directors approval should be in accordance with the company’s compensation policy; however, in special circumstances, they may approve compensation terms of a chief executive officer that are inconsistent with such policy provided that they have considered the same considerations and matters required for the approval of a compensation policy in accordance with the Companies Law and that shareholder approval was obtained by the Special Majority for Compensation. Under certain circumstances, the compensation committee and board of directors may waive the shareholder approval requirement in respect of the compensation arrangements with a candidate for chief executive officer if they determine that the compensation arrangements are consistent with the company’s stated compensation policy.

On expiration of the royalty period, the license will become non-exclusive and the Company shall be entitled to use the rights granted to it pursuant to the agreement without paying royalties or any other compensation. In addition, and according to a mechanism set in the agreement, the third party would be required to pay royalties to the Company of the total net sales of the device exceeding a certain amount, through the later of the device patents expiration period or 15 years from the first commercial sale of the Company’s Inhaled AAT product.

This document determines (among other things) the maximum values for the various components of compensation. Awarding compensation to an office holder in an amount that is less than the amounts specified in this document shall not be deemed to be a deviation from the provisions of this compensation policy and shall not require the approval of the shareholders that is required by law in the event of deviation from the terms of the compensation policy.

On expiration of the royalty period, the license will become non-exclusive and the Company shall be entitled to use the rights granted to it pursuant to the agreement without paying royalties or any other compensation. In addition, and according to a mechanism set in the agreement, the third party would be required to pay royalties to the Company of the total net sales of the device exceeding a certain amount, through the later of the device patents expiration period or 15 years from the first commercial sale of the Company’s Inhaled AAT product.

3.5.3.Compensation. Except as set forth in this Section 3.5, the Company shall not pay any officer, director or Initial Shareholder, or any of their affiliates, any fees or compensation from the Company, for services rendered to the Company prior to, or in connection with, the Offering or the consummation of a Business Combination .

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firm’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the report of independent registered public accounting firm providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of this offering or until we are no longer an “emerging growth company,” whichever is earlier.

withholding all required payroll taxes and mandated insurance premiums; (4)providing workers’ compensation coverage for employees as required by law; and (5)fulfilling employer’s obligations with respect to unemployment compensation. The Service Provider shall indemnify the Company from a claim made by the Service Provider’s employee or agent against the Company alleging rights or benefits as a Company employee.

• We provide annual incentives designed to reward our executive officers for the attainment of short-term goals, and long-term incentives designed to reward increasing stockholder value over the short, medium and long term. • Performance-based and at-risk compensation represents 88% of our Chief Executive Officer’s total target direct compensation, reflecting the position’s highest level of accountability and responsibility for results. • Performance-based and at-risk compensation represents 72% of the average total target direct compensation for our other named executive officers. • In keeping with our pay-for-performance culture, we expect our executive officers to deliver overall results that exceed performance targets to receive above median market compensation. Below target performance is expected to result in below median market compensation. • Our compensation program is designed to reward exceptional and sustained performance. By combining a three-year vesting period for most equity awards with policies prohibiting hedging or pledging of such shares, a substantial portion of the value of our executives’ compensation package is tied to changes in our stock price, and therefore is at-risk, for a significant period of time. The Compensation Committee believes this design provides an effective way to link executive compensation to long-term stockholder returns. • Outstanding equity awards granted after January 1, 2019 are subject to “double-trigger” accelerated vesting in connection with a change in control, under which the vesting of awards will accelerate only if there is a qualifying termination of employment within two years after the change in control or if the surviving entity does not provide qualifying replacement awards. • Our Clawback Policy permits us to recoup cash- and equity-based incentive compensation payments in the event we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws. Additionally, the terms of both our cash- and equity-based incentive compensation plans permit the recovery of incentive awards if a participant violates our Global Code of Conduct or engages in other activities harmful to the interests of the Company.

To determine what constitutes a “competitive” compensation package, the Compensation Committee considers total target direct compensation, as well as the allocation among the various elements of compensation, at our peer group companies, as well as general industry pay levels as gathered from publicly-available survey sources. Because of significant differences in the pay practices of our peer group companies, the Compensation Committee does not view this market data as a prescriptive determinant of individual compensation. Rather, it is used by the Compensation Committee as a general guide in its decisions on the amount and mix of total target direct compensation. Ultimately, named executive officer compensation is based on the Compensation Committee’s judgment, taking into account factors described elsewhere in this Compensation Discussion and Analysis that are particular to Hanesbrands and our named executive officers, including, most importantly, actual performance.

The Compensation Committee approved, at its December 2018 meeting, LTIP awards that were intended to serve as equity incentive compensation for the following fiscal year. The supplemental table below includes the target value of the 2019 LTIP award in the row for fiscal year 2019, as this corresponds to the analysis undertaken by the Compensation Committee in determining total target direct compensation. Under SEC rules, however, we are required to include the grant date fair value of equity awards in the fiscal year in which the award is granted. Therefore, in the Summary Compensation Table on page 55, the grant date fair value for the 2019 LTIP awards is included in the stock awards column for fiscal year 2018.

In keeping with our pay for performance culture, we expect our named executive officers to deliver overall results that exceed the target level of performance in order to receive above median market compensation. Performance below the target level of performance is expected to result in below median market compensation.

Under the Executive Deferred Compensation Plan, a group of approximately 225 U.S.-based employees, generally at the director level and above, including our named executive officers, may defer receipt of cash and equity compensation. This benefit offers tax advantages to eligible employees, permitting them to defer payment of their compensation and defer taxation on that compensation until a future date. The amount of compensation that may be deferred is determined in accordance with the Executive Deferred Compensation Plan based on elections by each participant. Amounts deferred under the Executive Deferred Compensation Plan may, at the election of the executive, (i) earn a fixed rate of interest, which was 2.03% for 2020; (ii) be deemed to be invested in a stock equivalent account (the “HBI Stock Fund”) and earn a return based on the total shareholder return of Hanesbrands’ stock; or (iii) be deemed to be invested in one of a number of other investment funds designated by us from time to time. The amount payable to participants will be payable either on the withdrawal date elected by the participant or upon the occurrence of certain events as provided under the Executive Deferred Compensation Plan. A participant may designate one or more beneficiaries to receive any portion of the obligations payable in the event of death; however, neither participants nor their beneficiaries may transfer any right or interest in the Executive Deferred Compensation Plan.

At our 2020 Annual Meeting of Stockholders, our stockholders had the opportunity to cast an advisory “say on pay” vote on our executive compensation. Our stockholders approved the compensation of our named executive officers as disclosed in the Proxy Statement for that meeting with over 90% support. Our Board of Directors, and the Compensation Committee in particular, considered this strong level of support, as well as the executive compensation programs of our peer group of companies, our past operating performance and planned strategic initiatives, in making the determination that the fundamental characteristics of our executive compensation program should continue this year.

(y) Deferred Compensation. Upon the consummation of the Initial Business Combination, the Company will pay to the Representatives, on behalf of the Underwriters, the Deferred Discount. Payment of the Deferred Discount will be made out of the proceeds of this Offering held in the Trust Account. The Underwriters shall have no claim to payment of any interest earned on the portion of the proceeds held in the Trust Account representing the Deferred Discount. If the Company fails to consummate its Initial Business Combination within the required time period set forth in the Registration Statement, the Deferred Discount will not be paid to the Representatives, on behalf of the Underwriters, and will, instead, be included in the liquidation distribution of the proceeds held in the Trust Account made to the Public Stockholders. In connection with any such liquidation distribution, the Underwriters will forfeit any rights or claims to the Deferred Discount including any accrued interest thereon.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included elsewhere in this prospectus and in our consolidated financial statements included herein. The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition, allowance for doubtful accounts, inventory reserves, impairment of goodwill, indefinite-lived and long-lived assets, pension and other post-retirement benefits, product warranty, valuation allowances for deferred tax assets, valuation of Common Stock warrants, and share-based compensation. Our financial condition and results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the price of our Common Stock.

Mr. Feintuch’s Employment Agreement. On March 24, 2015, we entered into an employment agreement with Mr. Ira Feintuch to serve as our Chief Operating Officer for an initial three-year term renewable annually unless written notice is provided 60 days prior to the renewal term. Mr. Feintuch is to receive an annual salary of $250,000 and shall participate in all of our benefit programs. Mr. Feintuch may receive a performance-based bonus in the form of cash or securities, at the discretion of our Executive Committee or pursuant to any written incentive plans adopted by the Board. In addition, Mr. Feintuch was due to receive (and received) 1,000,000 Series A Preferred Shares, 1,500 Series C Preferred Shares and 30,000 shares of Common Stock. The stock awards are payable 50% upon the signing of the employment agreement and 50% upon the one-year anniversary of the employment agreement. In addition, options to purchase an aggregate of 29,913 shares of Common Stock held by Mr. Feintuch with exercise prices ranging from $50.00 to $73.00 per share had their expiration dates extended to March 24, 2018. If, at any time prior to the one (1) year anniversary of the employment agreement we experienced a Fundamental Transaction (as defined in the employment agreement), the unvested equity compensation granted pursuant to the employment agreement was entitled to acceleration of vesting. Mr. Feintuch is entitled to paid -time -off of twenty-five (25) days per annum. If Mr. Feintuch is terminated without “cause” (as defined in the employment agreement), we shall continue to be obligated to pay Mr. Feintuch for nine (9) months after written notice of termination. If Mr. Feintuch is terminated for cause, he shall only continue to receive accrued salary for the period ending with the date of such termination, and he shall immediately forfeit any rights and benefits that he may have in respect to any other compensation. Mr. Feintuch is also subject to a covenant not to compete.

Pursuant to the Third Amendment, Mr. Farkas’ salary will be, prior to the closing of the offering, $15,000 per month in cash and $15,000 per month in shares of common stock. After the closing of the offering, Mr. Farkas’ monthly salary will be $40,000 of cash compensation. If the Company has positive EBITDA for a fiscal quarter during the term of Mr. Farkas’ employment, his monthly salary shall be $40,000 of cash compensation for as long as the Company has positive EBITDA as assessed on a quarterly basis. Pursuant to the Third Amendment, Mr. Farkas will be entitled to salary and benefits for eighteen (18) months if he is terminated for a reason other than for cause.

On November 13, 2015, we issued five-year options to purchase 20,400 shares of our Common Stock at an exercise price of $31.50 per share to 21 employees as compensation. The options are fully vested and had an aggregate fair value of $658,350.

2. New Series A Conversion Agreement. The Company and Mr. Farkas hereby agree that upon the closing of the Offering, Mr. Farkas is extinguishing his right to 24,500,000 (twenty-four million five hundred thousand) shares of the Company’s common stock on an as-converted basis. Upon the closing of the Offering, the Series A Shares shall automatically convert into five hundred thousand (500,000) restricted shares of the Company’s common stock instead of the 25,000,000 shares of Common stock Mr. Farkas is entitled to.. 3. Equity. The Company and Mr. Farkas hereby agree that upon the closing of the Offering and simultaneous and pursuant to the actions above, the Company will irrevocably transfer 886,119 restricted shares of the Company’s common stock to Mr. Farkas. 4. Monthly Salary. After the closing of the Offering, the Executive’s monthly salary during the term of his employment, as governed by the Third Amendment, shall be $40,000 of cash compensation. This Section 4 of the Agreement shall supersede the last two sentences of Section 9 of the Third Amendment. 5. Expiration of this Agreement. If the Offering does not close by 5:00 PM Eastern Standard Time on December 29, 2017, this Agreement shall expire. 6. Counterparts. This Agreement may be executed in any number of counterparts, including facsimile and scanned versions, each of which when so executed shall be deemed an original and all of which shall constitute together one and the same instrument, and shall be effective upon execution by all of the parties.

(a)Compensation. The Executive’s cash compensation (inclusive of the statutory welfare reserves that the Company is required to set aside for the Executive under applicable law) shall be provided by the Company in a separate schedule A attached herein (“Schedule A”) or as specified in a separate agreement between the executive and the company’s designated subsidiary or affiliated entity, subject to annual review and adjustment by the Company or the compensation committee of the Board. The cash compensation may be paid by the Company, a subsidiary or affiliated entity or a combination thereof, as designated by the Company from time to time.

8.Compensation. Escrow Agent shall be entitled, for the duties to be performed by it hereunder, to a fee of $4,000.00, which fee shall be paid by the Company upon the signing of this Agreement. In addition, the Company shall be obligated to reimburse Escrow Agent for all fees, costs and expenses incurred or that become due in connection with this Agreement or the Escrow Account, including reasonable attorney’s fees. Neither the modification, cancellation, termination or rescission of this Agreement nor the resignation or termination of the Escrow Agent shall affect the right of Escrow Agent to retain the amount of any fee which has been paid, or to be reimbursed or paid any amount which has been incurred or becomes due, prior to the effective date of any such modification, cancellation, termination, resignation or rescission. To the extent the Escrow Agent has incurred any such expenses, or any such fee becomes due, prior to any closing, the Escrow Agent shall advise the Company and the Company shall direct all such amounts to be paid directly at any such closing. The Escrow Agent shall be entitled to a fee of $1,000 in the event the Agreement is amended for any reason in accordance with Section 10(d).

3.2 Authority, Duties and Compensation. The officers shall have such authority, perform such duties and serve for such compensation as may be determined by resolution of the board of directors. Except as otherwise provided by board resolution, (i)the president shall be the chief executive officer of the Company, shall have general supervision over the business and operations of the Company, may perform any act and execute any instrument for the conduct of such business and operations and shall preside at all meetings of the board and stockholders, (ii)the other officers shall have the duties customarily related to their respective offices, and (iii) any vice president, or vice presidents in the order determined by the board, shall in the absence of the president have the authority and perform the duties of the president.

We are classified as an “emerging growth company” under the JOBS Act. For as long as we are an emerging growth company, which may be up to five full fiscal years, we will not be required to, among other things, (i)provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section404(b) of the Sarbanes-Oxley Act, (ii)comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (iii)provide certain disclosure regarding executive compensation, or (iv)hold nonbinding advisory votes on executive compensation. We will remain an emerging growth company for up to five years, although we will lose that status sooner if we have more than $1.0 billion of revenues in a fiscal year, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over athree-yearperiod. To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find our common stock to be less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

For the year ended January 31, 2019, our operating expenses were $3,288,224, of which $1,763,950 represented stock-based compensation, consisting of $1,374,500 of executive compensation, including compensation for services to a company affiliated with an officer, $74,000 of compensation to our scientific advisory board member who is not an officer, $222,000 of fees paid to our independent directors, and $93,450 paid for consulting and related services, of which $44,800 was paid to an affiliate of an officer for services rendered prior to the date he became an officer. Other selling, general and administrative expenses were $1,524,274, primarily professional fees, marketing expenses, and compensation. For the year ended January 31, 2018 operating expenses were $171,946, principally legal, accounting and payroll expenses. For the year ended January 31, 2018, we incurred an intangible impairment charge of $2,500,000, reflecting a charge with respect to the value of provisional patents acquired in 2017. The patents had been the assets of Advanced Health Brands which we acquired for stock valued at $2,500,000.

+ Details Name: us-gaap_RepaymentsOfRelatedPartyDebt Namespace Prefix: us-gaap_ Data Type: xbrli:monetaryItemType Balance Type: credit Period Type: duration X - DefinitionThe aggregate amount of noncash, equity-based employee remuneration. This may include the value of stock or unit options, amortization of restricted stock or units, and adjustment for officers' compensation. As noncash, this element is an add back when calculating net cash generated by operating activities using the indirect method.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of this offering or until we are no longer an “emerging growth company,” whichever is earlier.

(bb) Deferred Compensation. Upon the consummation of the Initial Business Combination, the Company will cause the Trustee to pay to the Representative, on behalf of the Underwriters, the Deferred Discount. Payment of the Deferred Discount will be made out of the proceeds of the Offering held in the Trust Account. The Underwriters shall have no claim to payment of any interest earned on the portion of the proceeds held in the Trust Account representing the Deferred Discount. If the Company fails to consummate its Initial Business Combination within the time period prescribed in the Certificate of Incorporation, the Deferred Discount will not be paid to the Representative and will, instead, be included in the liquidation distribution of the proceeds held in the Trust Account made to the Public Shareholders. In connection with any such liquidation distribution, the Underwriters will forfeit any rights or claims to the Deferred Discount.

prospectus, unless FINRA determines that such payment would not be deemed underwriters’ compensation in connection with this offering and we may pay the underwriters of this offering or any entity with which it is affiliated a finder’s fee or other compensation for services rendered to us in connection with the completion of a business combination. Any fees we may pay the underwriters or their affiliates for services rendered to us after this offering may be contingent on the completion of a business combination and may include non-cash compensation. The underwriters or their affiliates that provide these services to us may have a potential conflict of interest given that the underwriters are entitled to the deferred portion of their underwriting compensation for this offering only if an initial business combination is completed within the specified timeframe.

After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting, management or other fees from the combined company. All the these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination. It is unlikely the amount of such compensation will be known at the time, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined by a compensation committee constituted solely of independent directors.

3.5.2. Compensation. The Company shall not pay any officer, director or Initial Stockholder, or any of their affiliates, any fees or compensation from the Company, for services rendered to the Company prior to, or in connection with, the Offering or the consummation of a Business Combination;providedthat the officers, directors and Sponsor shall be entitled to reimbursement from the Company for their out-of-pocket expenses incurred on the Company’s behalf, which includes an aggregate of $[______] in loans which were made to the Company prior to the effective date of the Registration Statement and expenses incurred by them in connection with seeking and consummating a Business Combination as described in the Registration Statement.

(8) During Fiscal 2017, Mr.Clarke was eligible to receive $48,913 in pro-rated cash compensation and an annual RSA valued at $250,000. Mr.Clarke elected to receive DSUs in lieu of $25,000 of his cash compensation. The stock awards total in the table includes $80 of value realized as a result of issuing grants rounded up to the nearest whole share. Mr. Clarke’s annual RSA was forfeited when his term on the Board ended in August 2016, and, as a result, the value of the equity received by Mr. Clarke for his service as a director in Fiscal 2017 was $25,012.

• attract and retain the talent needed to lead our Company in the evolving and highly competitive technology industry in which we operate. Our program emphasizes long-term equity awards and annual performance-based cash bonuses so that a substantial portion of the value of each executive’s total compensation opportunity is derived from Company business and stock price performance and the achievement of Company and individual performance goals established by the Compensation Committee. The selected performance metrics emphasize overall Company performance, reflecting the Compensation Committee’s belief that the Named Officers, led by our CEO, are a team, sharing responsibility for Company performance and for execution of Company strategies. The relatively uniform compensation mix for each Named Officer reinforces this view, and in the committee’s view also promotes team cohesion and internal equity. However, the Compensation Committee considers it appropriate for the CEO, who is responsible for developing the overall strategy and direction for the Company, to receive a greater portion of his compensation (in comparison to the other Named Officers) in performance-based compensation. Goals are derived from the Company’s operating plan and business strategy. Performance levels are intended to be challenging and require effective execution in order to obtain a target level payout. The program is designed to have the flexibility to reward superior performance by providing for total earned compensation substantially above the target level and to provide compensation below the target level if performance goals are not met. In making its compensation decisions for individual executives, the Compensation Committee seeks to provide a competitive level of compensation for a position.

• working with the Consultant at the request and in support of the Compensation Committee. From time to time, members of management are invited to attend Compensation Committee meetings. No executive officer participates in deliberations by the Compensation Committee or the Board regarding his or her compensation. In addition, at the request of the Compensation Committee, the CEO provides input regarding the performance and compensation recommendations for his direct reports, including the other Named Officers. The Compensation Committee believes this process is both orderly and fair and preserves the CEO’s ability to have an appropriate impact on compensation for his direct reports. Management did not retain a separate compensation consultant for the compensation of our Named Officers.

5/25/16(5) 5/18/16 10,503 805,580 5/25/16(6) 5/18/16 2,626 10,502 21,004 805,503 5/25/16(7) 5/18/16 2,626 10,502 21,004 858,264 5/18/16 96,000 384,000 768,000 (1) These columns show the potential value of the payout for each Named Officer under the annual cash bonus plan as if the threshold, target or maximum goals had been satisfied for the performance measures established for Fiscal 2017 by the Compensation Committee. If the threshold goal is not satisfied, the Named Officer receives no payout. Actual bonus payments to Named Officers under the annual cash bonus plan for Fiscal 2017 performance are shown in the Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation.” In Fiscal 2017, Mr.Shander participated in the Red Hat Variable Incentive Compensation Plan with a target payout equal to 40% of his annual base salary.

We will continue to engage with our stockholders regarding our executive compensation program in addition to our annual votes on executive compensation. Engagement with our stockholders is a key component of our corporate governance. We appreciate and are open to input from our stockholders regarding board and governance matters, as well as our executive compensation program. Our experience in the past six years has shown that annual votes on executive compensation will not distract from continued stockholder engagement.

Your vote is requested. We therefore request that our stockholders select “1 Year” when voting on the frequency of advisory votes on executive compensation. Stockholders will be able to specify one of four choices for this proposal on the proxy card: 1year, 2years, 3years, or abstain. This advisory vote is non-binding on the Company, the Board and the Compensation Committee, but the Board will give careful consideration to the voting results on this proposal.

All Other Proposals:The affirmative vote of the holders of a majority of the shares of common stock present or represented and voting is required to approve (on an advisory basis) the resolution relating to the Company’s executive compensation, choose (on an advisory basis) one of the three frequency options for future advisory votes on executive compensation and to ratify of the selection of the independent registered public accounting firm. This means that a proposal will be approved if the number of shares voted “For” that proposal or frequency option is greater than 50% of the total number of shares voted “For” and “Against” that proposal or frequency option. With respect to the advisory vote on the frequency of future advisory votes on executive compensation, if none of the three frequency options receives the vote of a majority of the shares of common stock present or represented and voting, we will consider the frequency option receiving the greatest level of support from stockholders to be the frequency preferred by stockholders. However, this proposal is non-binding, and the Board will give careful consideration to the voting results on this proposal when determining the frequency of future advisory votes on executive compensation. For purposes of the advisory vote on a resolution relating to the Company’s executive compensation, the advisory vote on the frequency of future advisory votes on executive compensation and the ratification of the independent registered public accounting firm, abstentions and broker non-votes will not be considered to have been voted, and will have no effect on the results of the vote.

3.7.2. Compensation. Except as set forth in this Section 3.7.2, the Company shall not pay any of its officers, directors or Initial Shareholders or any of their affiliates any fees or compensation from the Company, for services rendered to the Company prior to, or in connection with, this Offering or the consummation of a Business Combination; provided that the officers, directors and the Initial Shareholder shall be entitled to reimbursement from the Company for their out-of-pocket expenses incurred on the Company’s behalf, which includes any loans and advances made to the Company prior to the Closing.

(c)Code Section 409A. Under Code Section 409A, an option that vests after December 31, 2004 (or that vested on or prior to such date but which was materially modified after October 3, 2004) that was granted with a per share exercise price that is determined by the Internal Revenue Service (the “IRS”) to be less than the Fair Market Value of a Share on the date of grant (a “Discount Option”) may be considered “deferred compensation.” A Discount Option may result in (i) income recognition by Participant prior to the exercise of the option, (ii) an additional twenty percent (20%) federal income tax, and (iii) potential penalty and interest charges. The Discount Option may also result in additional state income, penalty and interest charges to the Participant. Participant acknowledges that the Company cannot and has not guaranteed that the IRS will agree that the per Share exercise price of this Option equals or exceeds the Fair Market Value of a Share on the Date of Grant in a later examination. Participant agrees that if the IRS determines that the Option was granted with a per Share exercise price that was less than the Fair Market Value of a Share on the date of grant, Participant will be solely responsible for Participant’s costs related to such a determination.

8.Non-Employee Director Compensation. The Committee shall assist the members of the Compensation Committee of the Board or the Board, as requested, in determining the compensation paid to non-employee directors for their service on the Board and its committees and recommend any changes considered appropriate to the full Board for its approval.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company", we choose to rely on such exemptions we may not be required to, among other things, (i)provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section404, (ii)provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii)comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv)disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of this offering or until we are no longer an "emerging growth company," whichever is earlier.

Board Compensation. A director who is also an officer of the Company shall not receive additional compensation for such service as a director.

The Company believes that compensation for non-employee directors should be competitive and should encourage increased ownership of the Company's shares through the payment of a portion of director compensation in Company shares, options to purchase Company shares or similar compensation. The Compensation Committee will periodically review the level and form of the Company's director compensation, including how such compensation relates to director compensation of companies of comparable size, industry and complexity. Such review will also include a review of both direct and indirect forms of compensation to the Company's directors, including any charitable contributions by the Company to organizations in which a director is affiliated and consulting or other similar arrangements between the Company and a director. Changes to director compensation will be proposed to the Board for consideration.

Number and Names of Board Committees. The Company shall have three standing committees: Audit, Nominating and Corporate Governance, and Compensation. The purpose and responsibilities for the Audit, Nominating and Corporate Governance, and Compensation Committees shall be outlined in committee charters adopted by the Board. The Board may want, from time to time, to disband a current committee depending on circumstances. In addition, the Board may determine to form standing or ad hoc committees from time to time, and determine the composition and areas of competence of such committees.

The purpose of the Compensation Committee includes determining, or, when appropriate, recommending to our Board of Directors for determination, the compensation of the Chief Executive Officer and other executive officers of our company and discharging the responsibilities of our Board of Directors relating to compensation programs of our company. The Compensation Committee currently makes all decisions with respect to executive compensation. The Compensation Committee currently consists of Messrs. Furman and Monheit and Ms. Wadecki. Mr. Furman chairs the Compensation Committee.

Our Board of Directors has appointed a Compensation Committee, currently consisting exclusively of independent directors.The charter of the Compensation Committee authorizes the Compensation Committee to determine and approve, or to make recommendations to our Board of Directors with respect to, the compensation of our Chief Executive Officer and our other executive officers.Our Board of Directors has authorized our Compensation Committee to make all decisions with respect to such executive compensation.Among other things, the Compensation Committee is authorized to determine and approve the base salary of our Chief Executive Officer and other executive officers.Additionally, our Compensation Committee establishes annual cash and stock-based compensation programs for our Chief Executive Officer and other executive officers, providing our executives with variable compensation opportunities, a majority of which are based on key measures tying pay to performance.Our Compensation Committee, with advice from its independent compensation consultant, also determines, or recommends to our Board of Directors for determination, the compensation of our Board of Directors.

We target base salaries at levels required to attract, motivate, and retain highly qualified individuals assuming that they will not receive incentive compensation, but reflecting the possible receipt of incentive compensation. Base salaries for executive officers are established based on an executive’s position, responsibilities, skills, experience, performance, and contributions. In determining base salaries, we also take into account individual performance and contributions, future potential, competitive salary levels for comparable positions at other companies, salary levels relative to other positions within our company, and corporate needs. The Compensation Committee’s evaluation of the foregoing factors is subjective, and the Compensation Committee does not assign a particular weight to any one factor.

In addition, from time to time, we provide certain of our executive officers with other benefits and limited perquisites that we believe are reasonable. These benefits and perquisites include severance and change-in-control benefits, car allowances, housing allowances, relocation assistance, a nonqualified supplemental deferred compensation plan, and, for our Chief Executive Officer, reimbursement of insurance premiums. For more detailed information regarding these other benefits and perquisites for which our named executive officers are eligible, see “Executive Compensation.” We do not view perquisites as a significant element of our executive compensation program, but do believe they can be useful in attracting, motivating, and retaining the executive talent for which we compete. We believe that these additional benefits may assist our executive officers in performing their duties and provide time efficiencies for our executive officers in appropriate circumstances.

In the future, we may provide additional benefits and perquisites to our executive officers as an element of their overall compensation.All future practices regarding perquisites will be approved and subject to periodic review by our Compensation Committee.

As a part of its process, Compensia assisted in determining an appropriate group of peer companies.We use the peer companies at the beginning of the fiscal year to provide market information for cash compensation and at the end of the fiscal year to provide market information for equity compensation.In selecting peer companies, Compensia identified companies deemed generally relevant to us with a focus on companies involved in leisure and consumer products, and supplementing this list with companies involved in manufacturing.Within these industries, Compensia used a rules-based approach to select companies based on similar financial characteristics.Specifically, Compensia selected leisure, cyclical, consumer products, and manufacturing companies with revenue from 50% to 177% of our revenue, and market capitalizations from 45% to 181% of our market capitalization at the time of the peer group review.The selected peer group companies consisted of Albany International, Callaway Golf, ESCO Technologies, Ethan Allen Interiors, Fox Factory Holdings, Gentherm, Gorman-Rupp Company, Infinera, iRobot, Kate Spade & Co., Movado Group, National Presto Industries, Oxford Industries, Plantronics, RBC Bearings, Shutterfly, Simpson Manufacturing, Standex International, Sturm, Ruger & Company, Tumi Holdings, and Universal Electronics.The peer group includes ten additional companies — Albany International, Gentherm, Infinera, Kate Spade & Co., Oxford Industries, Plantronics, RBC Bearings, Shutterfly, Simpson Manufacturing and Tumi Holdings — and deleted eight companies — Alamo Group, Artic Cat, Columbus McKinnon, Harmonic, Johnson Outdoors, LeapFrog Enterprises, Patrick Industries and TASER International — to more closely resemble the financial criteria and business strategy of our company.

· Stock-Based Compensation.All unvested stock-based compensation held by the executive at the time of the termination or resignation that was granted to the executive in his or her capacity as an employee after the effective date of the Executive Severance Plan will vest as of the effective date of such termination.

Base Salaries. We target base salaries at levels required to attract, motivate, and retain highly qualified individuals assuming that they will not receive incentive compensation, but reflecting the possible receipt of incentive compensation. We increased the base salaries of our Chief Executive Officer, Chief Financial Officer, and other executive officers in fiscal 2016.

The Executive Compensation Committee also bases its decisions regarding compensation upon its assessment of each of our Named Executive Officer’s leadership, integrity, individual performance,years of experience, skill set, level of commitment and responsibility required in the position, contributions to our financial performance, creation of stockholder value, and current and past compensation. In determining the mix of compensation elements, the Executive Compensation Committee considers the effect of each element in relation to total compensation. The Executive Compensation Committee specifically considers whether each particular element provides an appropriate incentive and reward for performance that may enhance long-term stockholder value. In determining whether to increase or decrease an element of compensation, we rely upon the business experience of the members of the Executive Compensation Committee, the Executive Compensation Committee’s general understanding of compensation levels at public companies, the historical compensation levels of our Named Executive Officers and, with respect to Named Executive Officers other than the CEO, we consider the recommendations of the CEO. In determining compensation, the Executive Compensation Committee also considers the advice of Compensation Strategies,Inc. (“CSI”), the Executive Compensation Committee’s independent compensation consultant. The Executive Compensation Committee does not typically consider amounts that may be realized by our executive officers from prior compensation awards, such as appreciation or reductions in the value of stock previously acquired pursuant to restricted stock or other equity-based awards, when making decisions regarding current compensation.

Historically, in making its compensation decisions, the Executive Compensation Committee considered, and attempted to comply with, the performance-based compensation exception under Section162(m)of the Code. Prior to the enactment of the Tax Cuts and Jobs Act, as further described below, Section162(m)limited to $1 million the amount of nonperformance-based remuneration that we could deduct from our taxable income in any taxyear with respect to our CEO and the three other most highly compensated executive officers, other than the CFO, at the end of theyear. Section162(m)also provided, however, that we could deduct from our taxable income without regard to the $1 million limit the full value of all “qualified performance-based compensation.” Our base salary, certain equity awards, certain cash bonuses and other personal benefits were not considered “qualified performance-based compensation” and therefore were subject to the limit on deductibility.Our Incentive Plan and certain awards made under our Incentive Plan potentially qualified as “qualified performance-based compensation” if certain requirements were met.

Of the $257,650,000 in proceeds we receive from this offering and the sale of the placement warrants described in this prospectus, or $295,900,000 if the underwriters’ over-allotment option is exercised in full, $250,000,000 ($10.00 per unit), or $287,500,000 if the underwriters’ over-allotment option is exercised in full ($10.00 per unit), will be deposited into a U.S.-based trust account at J.P. Morgan Chase Bank, N.A. (or at another U.S.-chartered commercial bank with consolidated assets of $100billion or more), with Continental Stock Transfer & Trust Company acting as trustee, including $8,750,000, or $10,062,500 if the underwriters’ over-allotment option is exercised in full, in deferred underwriting compensation. We will not be permitted to withdraw any of the principal or interest held in the trust account, except with respect to interest and other income earned on the funds held in the trust account that may be released to us to pay our income taxes, if any, until the earliest of  (i)the completion of our initial business combination, (ii)the redemption of our public shares if we have not consummated an initial business combination within 24months from the closing of this offering, subject to applicable law, or (iii)the redemption of our public shares properly submitted in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (A)that would modify the substance or timing of our obligation to provide holders of our ClassA common stock the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24months from the closing of this offering or (B)with respect to any other provision relating to the rights of holders of our ClassA common stock. Based on current interest rates, we expect that interest income earned on the trust account (if any) will be sufficient to pay our income taxes.

SECTION2.Compensation. The salaries or other compensation of all officers of the corporation shall be fixed by the Board of Directors. No officer shall be prevented from receiving a salary or other compensation by reason of the fact that he or she is also a director.

Prior to July 1, 2018, including for our fiscal year ended December 31, 2017 and 2016, our Board of Directors handled all matters related to compensation. Our board of directors determined the compensation to be paid to our executive officers based on our financial and operating performance and prospects,and contributions made by the officers’ to our success. Prior to closing of this offering and listing on Nasdaq, we will form a Compensation Committee to assess the appropriate level of remuneration for our directors and officers. Each of the named officers will be measured by a series of performance criteria by the board of directors, or the compensation committee on a yearly basis. Such criteria will be set forth based on certain objective parameters such as job characteristics, required professionalism, management skills, interpersonal skills, related experience, personal performance and overall corporate performance.

Any underwriters, agents, or broker-dealers, and any Selling Shareholders who are affiliates of broker-dealers, that participate in the sale of the Ordinary Shares or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act. Selling Shareholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act. We know of no existing arrangements between any of the Selling Shareholders and any other shareholder, broker, dealer, underwriter, or agent relating to the sale or distribution of the shares, nor can we presently estimate the amount, if any, of such compensation. See “Selling Shareholders” for description of any material relationship that a shareholder has with us and the description of such relationship.

(xi) The Escrow Agent shall be entitled to employ such legal counsel and other experts as the Escrow Agent may deem necessary to advise the Escrow Agent in connection with any disputes as to the Escrow Agent’s duties hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation. Counsel may also include partners and legal personnel of the Escrow Agent.

Consideration of Say-on-Pay Vote At Quanta’s 2016 annual meeting of stockholders, approximately 92% of our stockholders voting on the “say-on-pay” proposal approved the compensation of our NEOs as described in our 2016 proxy statement. Accordingly, the Compensation Committee did not implement changes to our executive compensation program as a result of the 2016 stockholder advisory vote. As Quanta moves forward into 2017, the Compensation Committee is aware of the fluid business environment, with gradual improvement in certain markets but continuing uncertainty in the marketplace overall, and the resulting challenges with respect to executive compensation. The Compensation Committee monitors trends and developments to ensure that Quanta provides the appropriate executive compensation incentives to remain competitively positioned to attract and retain executive talent and to ensure that management’s interests are aligned with our stockholders’ interests to support long-term value creation, while not encouraging excessive risk-taking.

Compensation studies assist the Compensation Committee in establishing the overall compensation practices that are consistent with our philosophy and guiding principles on executive compensation. Although these studies provide important data, the Compensation Committee uses such studies only as a point of reference and not as a determinative factor for structuring and determining the amount of our NEOs’ compensation. The Compensation Committee also exercises discretion in its use of these studies, and the studies do not supplant the significance of individual and company performance that the Compensation Committee considers when making compensation decisions.

● The Compensation Committee structures executive compensation at the senior leadership level to consist of both fixed and variable compensation. The fixed or base salary portion of compensation is typically set at market levels and is designed to provide a steady income so that senior leadership does not feel pressured to focus exclusively on stock price performance to the detriment of other important business metrics. The variable portions of compensation are generally designed to reward both short-term and long-term performance as measured under several company and organizational performance metrics. Equity-based awards under our long-term incentive plan vest either at the end of the 3-year performance period or over three years in equal annual installments, which the Compensation Committee believes encourages senior leadership to focus on sustained stock appreciation and promotes retention. The Compensation Committee believes that these variable elements of compensation are a sufficient percentage (generally at or more than 50%) of overall compensation to motivate superior short-term and long-term corporate results, while the fixed element is also sufficiently high that senior leadership is not encouraged to take unnecessary or excessive risks in doing so.

As discussed in “Compensation Discussion & Analysis – Compensation Philosophy and Process – Role of Compensation Consultant,” the Compensation Committee independently retained Deloitte in 2016 to provide benchmarking data, review the competitiveness of Quanta’s executive compensation for the NEOs, and provide advice on the amount and form of executive compensation. Management supported, but did not make or recommend, the decision to engage Deloitte. Deloitte was also engaged to provide certain additional services to Quanta. Management has engaged Deloitte from time to time to provide tax, transaction and management advisory services and valuation assessments.

coverage and other compensation. In addition, during 2016, Quanta granted (i) 12,103 RSUs to Victor Budzinski, with a grant date fair value of $265,177, (ii) 10,758 RSUs to Adam Budzinski, with a grant date fair value of $235,708 and (iii) 705 RSUs to Maureen Budzinski, with a grant date fair value of $16,205. Each of the awards vest in three equal annual installments beginning in the first quarter of 2016 for Victor and Adam Budzinski and in May 2017 for Maureen Budzinski. The RSUs were granted on the same terms and conditions as RSUs granted to other Canadian employees in 2016. The employment of Victor Budzinski, Adam Budzinski, Maureen Budzinski and Alexander Budzinski, as well as William Budzinski’s service as an independent contractor for Valard, predated Quanta’s acquisition of Valard and its affiliates in 2010, and William Budzinski was hired as an employee in 2014.

The Compensation Committee has no authority to recover salary, bonuses or stock option awards or other equity awards made to Named Executive Officers. Although the Compensation Committee has the ability to consider prior compensation (e.g. gains from prior option grants or other equity awards) in setting current compensation, it has no formal procedure or requirement to do so. The Compensation Committee does not set or utilize benchmarks of any kind to set, evaluate or allocate compensation. There have been no actions taken or adjustments made to the process of setting executive compensation discussed herein by the Compensation Committee subsequent to December 31, 2016.

1. To elect 11 directors; 2. To ratify our independent registered public accounting firm; 3. To approve on an advisory basis our named executive officer compensation; and 4. To conduct an advisory vote on the frequency of holding future advisory votes on named executive officer compensation. Shareholders will also transact such other business as may properly come before the meeting or any adjournment or postponement of the meeting.

Without instructions from the beneficial owner, a broker, bank or other nominee is not permitted to vote on the election of directors, the advisory resolution to approve named executive officer compensation or the advisory vote on the frequency of holding future advisory votes on named executive officer compensation. Therefore, if your shares are held in the name of your broker, bank or other nominee, unless you vote your shares, your shares will not be voted regarding these proposals.

Companies are required to hold the “say-on-frequency” vote at least every six years. Our shareholders first voted on the proposal at our 2011 annual meeting of shareholders. At that time, our Board of Directors recommended that shareholders vote for annual advisory votes on executive compensation. Over 92% of the shares voted for annual advisory votes on the non-binding proposal at the 2011 annual meeting.

As a result of having Co-CEOs, the Compensation Committee believes that the evaluation by certain institutional investors and proxy advisory firms of the Company’s pay for performance alignment is distorted by combining the compensation of the two Co-CEOs and representing that the combined compensation reflects “CEO” compensation. The Company’s leadership structure is discussed in more detail above under “Company Information—Corporate Governance—Leadership Structure” beginning on page 17.

perquisites, are deemed by the Compensation Committee to be important elements of an executive’s overall compensation. This also allows the Compensation Committee to make compensation decisions and evaluate management recommendations based upon a complete analysis of a named executive’s total compensation.

The Company views preserving tax deductibility as an important objective, but not the sole objective, in establishing executive compensation. Although the Company has compensation plans that are intended to permit the award of deductible compensation under Section 162(m) of the Internal Revenue Code, the Compensation Committee does not necessarily limit executive compensation to the amount deductible under that provision. Rather, it considers the available alternatives and acts with the intention of preserving the deductibility of compensation to the extent reasonably practicable and consistent with its other compensation objectives, including the attraction and retention of key executives.

Unlike the Equity Bonus Plan, which pays awards in Company shares, awards under the Senior Executive Long Term Incentive Compensation Plan will be payable in cash which will reduce the potential dilution to shareholders that may result from stock-based incentive compensation. Other than with respect to the method of payment of awards, the Senior Executive Long Term Incentive Compensation Plan is substantially identical to the Equity Bonus Plan. The current participants under the Senior Long Term Incentive Compensation Plan are the same as under the Equity Bonus Plan, namely the Co-CEOs, Mr. Consolino and Mr. Berding, and the performance criteria for the first awards granted in 2016 (for the 2016–2018 three-year performance period) remained relative book value per share growth and core return on equity with one-half of target allocated to each metric. Cash awards to the extent earned will be paid in early 2019.

The Company also maintains a Deferred Compensation Plan pursuant to which certain employees of AFG and its subsidiaries (currently those paid $110,000 or more annually) may defer up to 80% of their annual salary and/or bonus. For 2016, participants could elect to have the value of deferrals earn a fixed rate of interest, set annually by the Board of Directors (1.625% in 2016); fluctuate based on the market value of Company common shares, as adjusted to reflect stock splits, distributions, dividends; or earn interest as determined by one or more publicly traded mutual funds. A deferral term of either a fixed number of years or upon termination of employment must be elected at the time of deferral. Under the plan, no federal or state income taxes are paid on deferred compensation. Rather, such taxes will be due upon receipt at the end of the deferral period. The Nonqualified Deferred Compensation Table on page 41 of this proxy statement discloses 2016 compensation earned by the named executive officers in connection with the Deferred Compensation Plan.

The Company also maintains a Deferred Compensation Plan pursuant to which certain key employees of AFG and its subsidiaries may defer up to 80% of their annual salary and/or bonus. The deferral term of either a fixed number of years or upon termination of employment must be elected at the time of deferral. Under the plan, no federal, state or local income taxes are paid on deferred compensation. Rather, such taxes will be due upon receipt at the end of the deferral period.

4.Compensation. The compensation of Nominating and Corporate Governance Committee members shall be as determined by the Board.

5.Compensation. The compensation of Audit Committee members shall be as determined by the Board. No member of the Audit Committee may receive, directly or indirectly, any consulting, advisory or other compensatory fee from the Company or any of its subsidiaries, other than fees paid in his or her capacity as a member of the Board or a committee of the Board.

3.Compensation. The Audit Committee shall have sole and direct responsibility for setting the compensation of the independent auditor. The Audit Committee is empowered, without further action by the Board, to cause the Company to pay the compensation of the independent auditor established by the Audit Committee.

3.5.3 Compensation. Except as disclosed in the Registration Statement or as set forth in this Section 3.5, the Company shall not pay any officer, director or stockholder, or any of their affiliates, any fees or compensation from the Company, for services rendered to the Company prior to, or in connection with, the Offering or the consummation of a Business Combination.

The Governance and Sustainability Committee oversees the setting of compensation for our non-employee members of the Board of Directors. Each year, the Governance and Sustainability Committee works with our compensation consultant to review and evaluate director compensation for the ensuing fiscal year, in light of prevailing market conditions and to attract, retain, and reward qualified non-employee directors. The compensation consultant gathers and reviews market data for non-employee directors from the same Compensation Peer Group used to evaluate officer compensation. For a discussion concerning the companies that comprised our Compensation Peer Group, please see "Executive Compensation and Related Information– Compensation Discussion and Analysis." Upon completion of its review and evaluation, the Governance and Sustainability Committee recommended that the Board of Directors make no changes to director compensation for fiscal 2020.

• base compensation (salary); • short-term incentive compensation (cash bonus programs); and • long-term incentive compensation (stock options, time-based restricted stock and performance-based restricted stock units). We do not require that a particular element comprise a set portion of the total compensation mix. We do believe, however, that a significant portion of the compensation should be variable (such as performance-based incentives and incentives tied to the performance of the Company and its stock) as compared to fixed (such as base salary), and that such variable compensation aligns executives' interests with those of our shareholders. Additionally, although the Compensation Committee reviews total direct compensation (which is the sum of base salary, short-term incentive, and long-term incentive compensation) for each of our Named Executive Officers, it does not have a fixed objective with respect to such total direct compensation. The Compensation Committee's philosophy is to use incentive pay opportunities as a way to ensure we are able to attract and retain top talent, rather than base salary.

Our compensation consultant reviews the most recent available data and identifies the Market Data values for the 25th, 50th(i.e.,median), and 75thpercentile with respect to each position or rank, then compares our compensation data, both as to elements and amounts to be paid or potential value to be delivered, with that of the Market Data and reports its findings to the CEO and the Compensation Committee. Our CEO works with our compensation consultant by providing our financial data with respect to the most-recently completed fiscal year. The CEO also reviews projected financial results for the current fiscal year and our strategic business plan. The CEO makes suggestions as to base salary, recommends a potential set of company-wide and/or business unit metrics and targets for the current fiscal year with respect to short-term incentives, and offers suggestions as to long-term incentive compensation for the executive officers other than himself. He makes no recommendations as to his own level of compensation. The Compensation Committee reviews the Market Data, discusses the Market Data with the CEO and with the compensation consultant, discusses individual officer performance based on input from the CEO and, without the CEO present, discusses the CEO's own performance for the most-recently completed fiscal year and anticipated performance for the current year. The Compensation Committee uses the Market Data and the deliberations to determine whether our compensation is competitive and reasonable as described above and whether, and to what extent, the Compensation Committee believes it would be appropriate to deviate from the Market Data and competitive practices. Following this deliberation, the Compensation Committee exercises its business judgment to certify the payment of compensation based on the financial results for the most-recently completed fiscal year, and approves the compensation for the current fiscal year, including the metrics and targets for the current year.

The Company has engaged a proxy solicitor, Alliance Advisors, LLC, to encourage voting by our stockholders. It is estimated that the total cost for the solicitation campaign will be approximately $10,000. Proxies may also be solicited by certain of the directors, officers and employees of the Company, without additional compensation. The Company will bear the costs of solicitation. In addition, the Company expects to reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding solicitation materials to such beneficial owners.

The Board has adopted a policy providing for annual advisory votes to approve executive compensation. Unless the Board modifies its policy on the frequency of holding advisory votes to approve executive compensation, the next such advisory vote will occur in 2020.

✓  Conduct an Annual Stockholder Advisory Vote on NEO Compensation.We conduct an annual stockholder advisory vote on the compensation of our Named Executive Officers.

For each of the past five years, the Compensation Committee has directed its external compensation consultant to conduct a comparative study and report on compensation levels and practices relative to industry peers, including a competitive assessment of our executive compensation program as compared to the market data for base salaries, target total cash compensation, long-term incentive compensation, and target total direct compensation. Typically, the findings of this study are presented to the Compensation Committee by the compensation consultant in conjunction with the Compensation Committee’s annual review of our executive compensation program.

The Compensation Committee does not consider the specific amounts payable under these agreements when establishing annual compensation. We do believe, however, that these arrangements are necessary to offer compensation packages that are competitive.

(1) Salary includes the office holders’ gross salary plus payment of social benefits made by us on behalf of such office holder. Such benefits may include, to the extent applicable to the office holder, payments, contributions and/or allocations forsavings funds (such as managers’ life insurance policy), education funds (referred to in Hebrew as “keren hishtalmut”), pension, severance, risk insurances (e.g., life, or work disability insurance), payments for social security and tax gross-up payments, vacation, medical insurance and benefits, convalescence or recreation pay and other benefits and perquisites consistent with our policies. (2) Represents the equity-based compensation expenses recorded in the Company’s consolidated financial statements for the year ended December 31, 2019, based on the option’s fair value, calculated in accordance with accounting guidance for equity-based compensation. (3) Includes car expenses. (4) Mr. Rowland stepped down from his position as the Company’s Chief Executive Officer, effective February 28, 2019. Such compensation does not reflect severance payment equal to six (6) months’ in the amount of $157,500 that was included in our financial statements for the year ended December 31, 2018. (5) Mr. Sonnenschein stepped down from his position as the Company’s VP Israel Operations, effective March 31, 2019. (6) Mr. Yoresh has been serving as a member of our Board since September 2018 and as our Chairman of the board since February 2020.

On February 2, 2020, our compensation committee and board of directors approved new compensation terms for Mr. Eliyahu Yoresh in connection with his services as an active chairman of the board of directors. For his services, Mr. Yoresh shall be entitled to receive a monthly payment of NIS15,000 which shall constitute the sole and complete compensation. Mr. Yoresh will not be entitled to a per meeting fee. The aforementioned compensation terms are subject to the approval of the Company’s shareholders in accordance with the Companies Law.

Equity-based compensation is used to link between the Company’s value for its shareholders (which is reflected by the increase of the Company’s price per share) and the compensation of its Office Holders. This component is implemented by one of, or a mix of, equity compensation such as options, restricted stock units (RSUs), restricted shares and other equity-based compensation. Equity-based compensation constitutes an incentive over time, as well as an incentive to be employed by the Company over long periods of time, by setting vesting dates for the granted equity awards, by their expiration pursuant to the termination of the relevant office holder’s tenure, or by conditioning the grant or vesting of equity awards (or portions thereof) on the achievement of objectives. Furthermore, accelerated vesting mechanisms may create incentives for Office Holders to remain employed by the Company and to achieve its objectives even if an extraordinary event, such as the merger or sale of the Company, change of control, or termination of employment in certain circumstances, is expected. Equity-based compensation is an important component in this compensation policy herein, since it is common practice in comparative companies and is important to the Company’s ability to recruit and retain Office Holders, it is an efficient substitute for cash compensation, and is especially appropriate since some of the operations which are crucial for the Company’s success are long-term ones, and some of the Company’s Office Holders’ efforts may only bear fruit over long periods of time.

The payment of variable compensation shall be subject to the provision of a written undertaking by the Executive receiving such variable compensation to repay any amount of such variable compensation paid to him based on data which has later been found to be incorrect, and which has been restated in the Company’s financial statements within a period of three years following the grant of such performance related compensation. The compensation committee and the board of directors shall be authorized not seek recovery to the extent that (i) to do so would be unreasonable or impracticable or (ii) there is low likelihood of success under governing law versus the cost and effort involved; the aforementioned undertaking shall be in accordance with any general claw-back policy as may be adopted by the Company.

The maximum severance bonus that may be paid by the Company is as follows: (i) non-executive directors will not be eligible for severance bonus, (ii) the CEO may be entitled to a severance bonus of up to 50% of the annual fixed compensation, and (iii) other Executives may be entitled to a severance bonus of up to 25% of the annual fixed compensation. An Executive’s severance bonus will be based on his last monthly salary as of the termination date of his service and his or her termination of service must not be in circumstances which, in the Company’s opinion, justify severance pay to be revoked.

3.1.Compensation. In consideration for the Company’s performance of the Services, Company shall be entitled to arm’s length service fees based on the most recent transfer pricing analysis as performed by an external expert, as may be adjusted from time to time and as initially set forth in Exhibit A (the “Consideration”). The Parent agrees to pay the amounts due under this Agreement in accordance with the terms set forth in this Section 3.

At our annual meeting of shareholders held on May 24, 2017, our shareholders voted on an advisory basis with respect to the frequency of future advisory votes on executive compensation. Holders of approximately 77% of the shares represented at that meeting expressed their preference for an annual advisory vote. Accordingly, we intend to hold an annual advisory vote on executive compensation until the next “say-on-frequency” vote at our annual meeting of shareholders in 2023.

Our Board conducts an annual CEO evaluation process, consisting of both a performance review and a compensation analysis. For fiscal 2020, the performance evaluation component was led by our Chair of the Board and the chair of the Compensation Committee and included an assessment of the CEO’s performance in light of set objectives, 360 feedback evaluations provided by individuals who substantively interact with the CEO, and a detailed CEO self-assessment. Separately, the Compensation Committee’s independent compensation consultant conducted a market analysis to assess alignment of CEO compensation with competitive market practices and provided its findings to the Compensation Committee. Once all the relevant performance data had been collected, our Chair and the chair of the Compensation Committee prepared and presented their evaluation on CEO performance to the Board. The Compensation Committee then met in executive session to discuss the CEO performance evaluation results and CEO compensation. After reviewing all the collected data regarding performance, the Compensation Committee made its decision regarding CEO compensation for fiscal 2020. Our CEO abstained from participating in all discussions of the Compensation Committee and Board related to the final determination of his compensation.

Corporate Governance at Splunk Our Compensation Committee has the primary responsibility for reviewing the compensation paid to our non-employee directors and making recommendations for adjustments, as appropriate, to the full Board. The Compensation Committee undertakes an annual review of the type and form of compensation paid to our non-employee directors, which includes a market assessment and analysis by its independent compensation consultant. As part of this analysis, the independent compensation consultant reviews non-employee director compensation trends and data from companies comprising the same executive compensation peer group used by the Compensation Committee in connection with its review of executive compensation. In early fiscal 2020, our Board reviewed a market assessment and analysis prepared by Compensia, Inc. (“Compensia”), the Compensation Committee’s independent compensation consultant, and approved the following increases effective as of March 21, 2019: $10,000 per year for service as non-executive Chair of the Board, $5,000 per year for service as chair of the Audit Committee, and $2,500 per year for service as chair of the Nominating and Corporate Governance Committee. No changes were made to the equity compensation of non-employee directors. The Board made these changes in order to continue to attract, retain and reward qualified non-employee directors, consistent with market practices and the demands placed on our Board.

Advisory Vote to Approve Named Executive Officer Compensation The Board recommends a vote “FOR” the Approval, on an Advisory Basis, of our Named Executive Officer Compensation. As required by SEC rules, we are asking our stockholders to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in the “Compensation Discussion and Analysis” section beginning on page 42, the compensation tables and the related narratives appearing in this proxy statement. This proposal, commonly known as a “Say-on-Pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation as a whole. This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this proxy statement. We currently hold our Say-on-Pay vote every year.

Proposal 2. Advisory Vote to Approve Executive Compensation. If you abstain from voting on the advisory vote to approve executive compensation, you are considered present and entitled to vote, and your shares are considered in the calculation of whether Proposal 2 received the affirmative vote of a majority of shares present and entitled to vote. The effect of an abstention is a vote against Proposal 2. Broker non-votes will have no effect on the outcome of Proposal 2 because broker non-votes are not entitled to vote and are not considered in the calculation of a majority of shares present and entitled to vote.

The following chart shows the performance of a $100 investment in our common stock on December 31, 2011, with dividends invested quarterly, for those who wish to consider total stockholder return when evaluating compensation. The chart also compares the total stockholder return on our common stock to the same investment in the S&P 500 Index and the Dow Jones U.S. Exploration and Production Index over the same period, with dividends invested quarterly. Recent negative performance is a result of the impact of significantly lower prices for natural gas, natural gas liquids, and oil, particularly in the Appalachian basin, and the resulting financial performance of the Company.

Each year, our CEO submits recommendations to the Compensation Committee for adjustments to the salary, bonuses and long-term equity incentive awards payable to all employees, including himself. The Compensation Committee considers the recommendations of our CEO as only one factor, in addition to the other factors described in this Compensation Discussion and Analysis, in setting our Senior Executive and other employee compensation. As Senior Executives, Other Corporate Officers and Key Professional Employees are hired and promoted during the year, our CEO or CFO (to whom the Company’s Human Resources Department reports) make recommendations to the Compensation Committee for long-term equity incentive award grants during interim periods for newly-hired or promoted employees. In the event the Company hired a Senior Executive, our CEO would work closely with the Compensation Committee in negotiating compensation arrangements for potential Senior Executives to ensure that our compensation arrangements are consistent with our existing compensation strategies and philosophy and are approved by the Compensation Committee. At the request of the Compensation Committee, our CEO and our CFO attend certain meetings and work sessions of the Compensation Committee. The Compensation Committee also individually reviews and approves all compensation granted to our Senior Executives and Other Corporate Officers. There are currently eight Senior Executives and 19 Other Corporate Officers.

Since the Compensation Committee retained Alvarez & Marsal, the Company has not engaged, and will not engage, Alvarez & Marsal to advise us on any matters other than those issues authorized by the Compensation Committee. In 2016, the Company paid Alvarez & Marsal a total of $243,000 for consulting services related to executive and director compensation. In June 2013, the Committee was provided a detailed analysis of Alvarez & Marsal’s independence with regard to its relationship to the Company and the Committee concluded that Alvarez & Marsal is, in fact, independent. In 2014, 2015 and 2016, the Committee received additional information about Alvarez & Marsal’s independence and confirmed its previous determination that Alvarez & Marsal remains independent. With the approval of the Compensation Committee, the Company has retained Alvarez & Marsal to provide valuation services relating to the Company’s use of performance restricted stock awards. In particular the valuations of the performance share awards granted in 2014, 2015 and 2016 were calculated by Alvarez & Marsal. Under this engagement, the Company may request Alvarez & Marsal to provide quarterly updates to these valuations. Given the limited scope of these consulting services, the Compensation Committee determined that the Company’s engagement of Alvarez & Marsal did not impair the firm’s independence.

In its analysis of the appropriate compensation for each Senior Executive, the Compensation Committee reviews a summary report or “tally sheet” prepared by Alvarez & Marsal for each individual. This includes each Senior Executive’s salary, performance-based annual cash incentive award, long-term equity incentive awards, retirement and other benefits and any other compensation. The tally sheets reflect the total annual compensation for each Senior Executive, as well as the potential payments under selected performance scenarios, termination of employment and change in control scenarios.

The Committee then considered the same criteria for the Company’s 2015 performance and determined the Company’s actual 2015 performance relative to the Peer Group. This analysis showed that the Company’s performance was at the 74th percentile. The Compensation Committee has determined not to be bound by a formulaic application of the performance percentile when setting total compensation and regularly uses negative discretion to establish the percentile that it applies before the step described below of setting each individual Senior Executive’s total compensation. Negative discretion means that the Compensation Committee reduces the compensation amounts.

Upon the death, Disability (which definition is the same as the definition under the Management CIC Plan) or retirement of a Named Executive Officer or any other employee, certain unvested stock awards and SARs vest under the terms of the award grant. Upon Disability, all employees are covered under a group compensation continuation plan. The group disability coverage provides for compensation continuance of 60% of an employee’s salary and bonus up to a maximum of $180,000 per year until his or her 65th birthday. All of our Named Executive Officers are also covered under supplemental individual executive disability policies. Coverage under these policies would increase the disability coverage from the maximum of $180,000 per year under the group plan to the coverage amounts shown below for each Named Executive Officer. The percent of coverage varies depending on when the policy was put in place for each Named Executive Officer. The executive disability coverage premium is shown as a perquisite in the Summary Compensation Table in column (i)“All Other Compensation.” The following table summarizes the value of the compensation continuation which would be available to each Named Executive Officer assuming that he became disabled as of December31, 2016 under the policies currently in effect until he attained the age of 65years old. The table also summarizes the value of the unvested SARs and Annual Stock Awards, Matching Stock Awards and Performance Awards which would vest upon the death, Disability or retirement assuming that such events occurred on December 31, 2016 based on the value of the Company’s common stock on that date of $34.36. Retirement is defined as reaching the age of 65 years old.

To ensure that its executive officer compensation is competitive in the marketplace, the Company uses a formal job evaluation methodology to determine both the internal and external equity of its NEOs’ total compensation. Internal equity is considered in order to ensure that members of Landauer’s executive management are compensated at an appropriate level relative to other members of its executive management, while external equity is a measure of how the Company’s compensation of its executive management compares to compensation for positions with comparable job content at other companies.

During fiscal 2014, the Compensation Committee worked with Korn Ferry Hay Group to revise its peer group, which historically has been used only to benchmark director compensation. Since fiscal 2015, this revised peer group has been used to (1) benchmark the Company’s director compensation and (2) provide the Committee with supplemental compensation data for NEOs. However, the Compensation Committee will continue to rely primarily on the aforementioned survey data as its primary benchmarking data source for NEOs.

Landauer’s executive officer compensation package includes a combination of annual cash and long-term incentive compensation. Annual cash compensation for executive officers is comprised of base salary plus annual non-equity incentive bonuses. Long-term incentives consist of a combination of restricted share grants with performance-based and time-based vesting characteristics.

Notwithstanding that impressive 15.2% ROTDE, we suffered a share-price drop along with all our peers and experienced a 15.8% decline in TSR. Accordingly, for compensation year 2018 our executives earned $4.5 million in a cash incentive, but received no credit for the 2018 portion of their long-term equity compensation. Put differently, because we failed to meet threshold absolute TSR on the equity portion of the award and because the performance award of the ROTDE is capped at 12%, instead of being on track in year one of three to meet at least target compensation (approximately 33%), our executives have so far received only 18% of targeted compensation.

Amendments to 2018 Plan NEW ● As it pertains to the banking issue, we eliminated banking. ● As it pertains to compounded annual ROTDE and TSR, we increased the threshold and target rates from, respectively, 5% and 8% to 6% and 9%. It is extremely important to highlight the fact that a 1% increase in the TSR threshold and target rates results in nearly a 17% reduction in performance-based compensation. For example, prior to adopting the new targets, if compounded TSR equaled 8% our executives would have received approximately $16 million in RSUs. Now, 8% performance results in a $13.3 million, or 16.7%, decrease. Likewise, prior to adopting the new targets, if compounded ROTDE equaled 8%, our executives would have received a $9 million cash bonus. Now, 8% performance results in a $7.5 million cash bonus, or 16.7% decrease. ● Were we to reduce compensation in 2018 as we did for 2019 and 2020, which for accounting purposes needed to be done via a cash award reduction, it would mean that we would have front-loaded cash compensation into a year in which we already knew that ROTDE was far above the maximum performance threshold, thereby guaranteeing maximum cash payouts after the fact. That outcome seemed neither appropriate nor in keeping with our shareholders’ concerns. Accordingly, we maintained the cash component of the 2018 Plan, keeping future payouts dependent on continued long-term compounded annual ROTDE, but increased the threshold and target levels. As a result of those amendments and TSR, the current estimated value of the 2018 Plan is $14 million, which is substantially below the $26 million we targeted. And, as noted above, unless there is at least a 29.2% compounded growth in TSR between now and the end of fiscal year 2020, the entire equity component of the 2018 Plan, which represents about two-thirds of the targeted compensation, will be eradicated. In light of those considerations, the 2018 Plan does not feature relative TSR because its modifying potential would have been irrelevant.

We provide our named executive officers with medical, dental, life insurance, disability, savings, retirement, deferred compensation opportunities and other similar benefits available to employees generally that are not part of what we consider direct compensation. We intend these benefits to be competitive in order to help recruit and retain talented executives. These benefits are designed to facilitate the productivity of our executives, ensure the well-being of our executives, employees and their families, encourage long-term service to us and generally enable our compensation packages to remain competitive. In the aggregate, we believe our benefits including perquisites are in-line with or more moderate than general business practices for companies of comparable size and character.

Our deferred compensation retirement plan allows employees with compensation in excess of $130,000 the opportunity to receive an employer contribution ranging from 2% of eligible compensation up to 16% of eligible compensation. The plan does not provide for employee contributions. We also have a deferred compensation plan that permits the deferral of compensation and provides a means for our employees to invest in our shares on a tax-deferred basis. These plans are designed as non-qualified deferred compensation plans and are intended to meet the requirements of Section 409A.

To identify the 2018 “median employee” from our employee population, we conducted an analysis of our entire employee population. Given the variety of the jobs filled by our employees across multiple industries, we use a variety of pay elements to compensate our employees. For example, some employees are paid an hourly wage while others are paid a fixed salary. In addition, many of our employees have historically received cash bonuses. Consequently, for purposes of measuring the compensation of our employees, we used payroll data and selected all wages paid (including hourly, overtime and salary) and all bonuses paid as the most appropriate measure of compensation. We converted all foreign currency into U.S. dollars. We used all such compensation paid to our employees for the period January 1, 2018 through September 30, 2018. In making these calculations, we annualized (through September 30, 2018), as permitted, the compensation of those permanent employees who were hired after January 1, 2018.

The numbers above, however, are misleading because this compares three years’ worth of compensation to a single-year median compensation. Were we to use the compensation from our Summary Compensation Table that our Compensation Committee intended to apply to 2018 compensation year, $18,714,250, our CEO’s 2018 annual total compensation was approximately 125 times that of the median of the 2018 annual total compensation of all other employees.

Items of Business 1 To elect eleven members to our Board of Directors, each for a term extending until our 2019 Annual Meeting of Stockholders. 2 To conduct an advisory vote to approve named executive officer compensation. 3 To ratify our Audit Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2018. 4 To transact such other business that properly comes before the meeting or any adjournment thereof. Notice and AccessInstead of mailing a printed copy of our proxy materials, including our Annual Report on Form 10-K, to each stockholder of record, we are providing access to these materials via the Internet. This reduces the amount of paper necessary to produce these materials, as well as the costs associated with mailing these materials to all stockholders. Accordingly, on August 10, 2018, we began mailing a Notice of Internet Availability of Proxy Materials (the “Notice”) to all stockholders of record as of the Record Date, and posted our proxy materials on the Web site referenced in the Notice (www.proxyvote.com). As more fully described in the Notice, all stockholders may choose to access our proxy materials on the Web site referred to in the Notice and/ or may request a printed set of our proxy materials. In addition, the Notice and Web site provide information regarding how you may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis.

●Average annual base salary increases of approximately 6.4% to further align the NEOs’ annual base salaries with market range and, in certain instances, for internal pay equity considerations. ●Increases in annual target bonus awards, resulting in an increase in each NEO’s performance-based compensation. As a result of McDermott’s 2017 financial performance, each NEO was eligible to earn 1.578x of his target EICP award, subject to adjustment by the Compensation Committee based on his achievement of individual performance goals. ●Increases to the value of long-term incentives awarded to Messrs. Dickson and Spence as compared to 2016, based on their individual performance and to further align the value of their LTI with market range. The mix of target total direct compensation for Mr. Dickson for 2017 is shown in the chart below.

The Compensation Committee seeks to provide reasonable and competitive compensation. As a result, it targets the elements of total direct compensation, or “TDC,” for our NEOs generally within approximately 15% of the median compensation of our market for comparable positions. Throughout this CD&A, we refer to compensation that is within approximately 15% of market median as “market range” compensation.

While the Compensation Committee has the responsibility to approve and monitor all compensation for our executive officers, management plays an important role in determining executive compensation. Management, at the request of the Compensation Committee, recommends financial goals that drive the business and works with Meridian to analyze competitive market data and to recommend compensation levels for our executive officers other than our CEO. Our CEO likewise assists the Compensation Committee by providing his evaluation of the performance of our other executive officers and recommending compensation for those officers, including adjustments to their annual incentive compensation, based on individual performance.

After identifying the median employee, based on the process described above, we calculated annual total compensation for that employee using the same methodology we used for determining total compensation for 2017 for our named executive officers as set forth in the Summary Compensation Table. The median employee is an Indian national employed as a Structural Fitter at our fabrication yard in Dubai, paid on an hourly basis in United Arab Emirates Dirham. The median employee’s hourly pay was determined based on a review of market data for companies with individuals in similar positions and location, and such pay is within market range compensation. The median employee’s total compensation is inclusive of holiday pay, vacation pay, religious holiday pay and McDermott provided housing accommodations.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E50402-P11991 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. MCDERMOTT INTERNATIONAL, INC. The Board of Directors recommends you vote FOR the following: ForAll WithholdAll For AllExcept 1. To elect eleven members to our Board of Directors, each for a term extending until our 2019 Annual Meeting of Stockholders. ☐ ☐ ☐ Nominees 01) Forbes I.J. Alexander 07) Gary P. Luquette 02) Philippe Barril 08) James H. Miller 03) John F. Bookout, III 09) William H. Schumann, III 04) David Dickson 10) Mary L. Shafer-Malicki 05) L. Richard Flury 11) Marsha C. Williams 06) W. Craig Kissel To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. The Board of Directors recommends you vote FOR the following proposals: For Against Abstain 2. To conduct an advisory vote to approve named executive officer compensation. ☐ ☐ ☐ 3. To ratify our Audit Committee's appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2018. ☐ ☐ ☐ The shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned Stockholder(s). If no direction is made, the shares represented by this proxy will be voted FOR ALL for item 1 and FOR items 2 and 3. If any other matters properly come before the meeting, including procedural matters and matters relating to the conduct of the meeting, the persons named in this proxy are authorized to vote in their discretion.

on Pay” vote. At our 2018 annual meeting of stockholders in December 2018, the compensation of our named executive officers was approved by approximately 50.6% of votes cast. We strive for significantly higher support from our stockholders in Say on Pay votes and have taken considerable measures in response to last year’s vote. Based on our discussions with our stockholders, we believe the overriding factor that caused a significant percentage of our stockholders to vote against the Say on Pay proposal was the severance paid to our former President and CEO arising out of his legacy employment agreement, which was entered into before the current members of the Compensation Committee joined our Board of Directors. At the same time, we received consistently positive feedback from stockholders regarding the changes the Compensation Committee has made to the Company’s pay practices, specifically the compensation package approved by the Compensation Committee for Mr.Schiller in October 2018, underscoring that the 2018 Say on Pay vote was not a result of stockholder concerns about Mr.Schiller’s compensation. Our key takeaways from stockholders were that we need to continue to move away from severance and change-in-control agreements that provide for payouts like the one to our former President and CEO and that we should incorporate several of the features of Mr.Schiller’s compensation package into our overall program, including his long-term incentive award which is a three-year front-loaded performance share unit (“PSU”) award with rigorous compound annual Total Shareholder Return (“TSR”) performance goals.

We believe we are uniquely situated with respect to having insight into stockholder perspectives on executive compensation. The Chair of our Compensation Committee, Glenn W. Welling, is the principal of Engaged Capital, LLC (“Engaged Capital”), which beneficially owns approximately 20.2% of our outstanding common stock and is our largest stockholder. Accordingly, we have the benefit of inherent alignment of our major compensation decisions with the interests of stockholders.

In January 2019, the Compensation Committee made 2019-2021 LTIP awards to Mr.Langrock and Mses. Meringolo and Faltischek. Messrs. Boever and McGahren received 2019-2021 LTIP awards in February 2019 and May 2019, respectively. All of the awards – the CEO PSU Award and the NEO PSU Awards – are three-year front-loaded PSUs and represent three years’ worth of long-term incentive value. As is the case with the CEO PSU Award, the structure of the NEO PSU Awards aligns with the Company’s turnaround strategy, which involves a focus on longer-term, sustainable improvements that directly drive stockholder value. The Compensation Committee determined that three-year front-loaded awards are the most appropriate structure to align the NEOs with stockholders over the duration of the expected turnaround period. It is the intention of the Board and the Compensation Committee that Mr.Schiller and our other current NEOs will next be eligible to receive long-term incentive awards or other equity awards commencing in fiscal year 2022. Accordingly, the Compensation Committee believes it is helpful in evaluating our NEOs’ compensation to spread the value of the CEO PSU Award and the NEO PSU Awards equally across fiscal years 2019, 2020 and 2021. In addition to the compensation figures required under SEC rules, we have calculated alternative fiscal year 2019 compensation figures for our current NEOs using adjusted amounts of compensation that exclude the portions of PSU awards deemed attributable to fiscal years 2020 and 2021. These alternative compensation figures are not a substitute for the figures calculated under SEC rules, but we believe they are helpful in fully evaluating our current NEOs’ compensation. See the Summary Compensation Table on page 38.

5 Because the CEO PSU Award and the NEO PSU Awards are front-loaded awards intended to cover three years of long-term incentive compensation, the Compensation Committee believes it is helpful in evaluating our current NEOs’ compensation to spread the value of those awards equally across fiscal years 2019, 2020 and 2021. The values of those awards included in the Stock Awards column and the Total column for our current NEOs in accordance with SEC rules are as follows: Mr. Schiller ($7,570,500), Mr. Langrock ($1,538,324), Mr.Boever ($661,799), Mr.McGahren ($757,535) and Ms.Meringolo ($368,905). In addition to those required figures, we have included alternative figures for our current NEOs in the Adjusted Fiscal Year 2019 Total column using adjusted amounts of compensation. The adjusted figures in this column exclude two-thirds of the value of the PSU awards, constituting the portion of the awards deemed attributable to fiscal years 2020 and 2021. The adjusted figures are not a substitute for the figures in the Total column in this Summary Compensation Table.

2 Cash severance is paid out over a period of time that depends on the amount of the severance obligation in relation to the individual’s annual compensation. Severance of one times the sum of annual base salary and an annual bonus amount is payable over one year; severance of two times the sum of annual base salary and an annual bonus amount is payable over two years; and severance of three times the sum of annual base salary and an annual bonus amount is payable over three years.

We believe that both the Company and its stockholders benefit from responsive compensation and corporate governance policies. Recognizing the interest our stockholders expressed in an advisory vote on the compensation of our NEOs, since 2009 the Company has provided its stockholders an annual advisory vote on executive compensation. Since 2011, Section14A of Securities Exchange Act of 1934, as amended (the “Exchange Act”), has required us to provide our stockholders with a non-binding advisory vote to approve the compensation of our NEOs (the “Say on Pay Proposal”) as disclosed in this proxy statement.

Our executive compensation programs are designed to promote the long-term interests of our stockholders by attracting and retaining talented executives and motivating them to achieve our business objectives and to create stockholder value. We believe that our performance, the achievement of strategic business goals and the creation of long-term stockholder value should impact a significant portion of our executive officers’ compensation. Our Compensation Committee oversees our compensation programs and the compensation paid to our executive officers.

We pay our executive officers a base salary to provide each of them with a minimum, base level of cash compensation. During 2016, our Compensation Committee engaged its independent compensation consultant, Semler Brossy Consulting Group, LLC (“Semler Brossy”), to perform a comprehensive analysis of CEO pay levels within our peer group, as well as for similarly situated companies outside of that group. Based on this analysis and our Board’s assessment of Mr.Allman’s performance, our Compensation Committee determined that Mr.Allman’s salary of $1,100,000 should be increased 5% to $1,155,000.

We believe that having a significant ownership interest in our stock is critical to aligning the interests of our executive officers with the long-term interests of our stockholders. Accordingly, restricted stock awards and stock options are an important component of our executive officers’ compensation. Our equity awards are priced based on the closing price on the date of grant, unless the grant date occurs within seven days prior to the release of our financial results. In that event, the grant is effective at the end of the second trading day after the release of the results and priced based on the closing price of our common stock on that date. Our equity awards vest in 20% installments over five years. Five-year vesting defers the executives’ realization of the full benefit of equity-based compensation for a substantial period of time and is longer than typical market practice. The value our executive officers ultimately realize from equity awards depends on the long-term performance of our common stock. Further, equity awards do not vest immediately upon retirement. Instead, following retirement, equity awards generally continue to vest in accordance with the remaining vesting period. Our executive officers understand that our performance will continue to impact them financially even after they retire, thereby reinforcing their focus on the long-term enhancement of stockholder value.

Our approach to executive compensation emphasizes corporate rather than individual performance, echoing our operating strategy that encourages collaboration and cooperation among our businesses and corporate functions. We believe that the effectiveness of our executive compensation programs requires not only objective, formula-based arrangements, but also the exercise of discretion and sound business judgment by our Compensation Committee. Accordingly, our Compensation Committee retains discretion to adjust the mix of cash and equity compensation, adjust the mix of restricted stock and stock options awarded, and offer different forms of equity-based compensation. With this discretion, our Compensation Committee is best able to reward the individual contributions of each executive officer and to respond to an executive’s expanding responsibilities, market practices and our changing business needs.

• Our 2014-2016 Long Term Cash Incentive Program was based on return on invested capital. For the three-year period 2014-2016, we exceeded the target ROIC goal and achieved a performance percentage of 132%. Our executive officers’ potential performance-based compensation represents a significant percentage of total annual target compensation. In 2016, the percentage of total target compensation (base salary, target annual cash bonus and restricted stock award and the target value of long-term incentives) that was performance-based was 86% for our CEO and 73% for our other executive officers.