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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
 
 
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Definitive Proxy Statement
 
 
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Soliciting Material under Rule 14a-12
Civeo Corporation
(Name of registrant as specified in its charter)
 
(Name(s) of person(s) filing proxy statement, if other than the registrant)
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CIVEO CORPORATION
Three Allen Center
333 Clay Street, Suite 4980
Houston, Texas 77002
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
To Be Held On May 16, 2019
To the Shareholders of Civeo Corporation:
NOTICE IS HEREBY GIVEN THAT the 2019 annual general meeting of shareholders (the “annual general meeting”) of Civeo Corporation, a British Columbia, Canada limited company (“Civeo”), will be held on May 16, 2019, at 9:00 a.m., local time, at the Hyatt Regency, 1200 Louisiana Street, Houston, Texas 77002, for the following purposes:
1.
To elect the following three persons as Class II members of Civeo’s board of directors: Richard A. Navarre, Martin A. Lambert and Constance B. Moore, each for a term of three years ending at the 2022 annual general meeting of shareholders or until their successors are duly elected and qualified;
2.
To ratify the appointment of Ernst & Young LLP as Civeo’s independent registered public accounting firm for the year ending December 31, 2019 and until the next annual general meeting of shareholders and to authorize the directors of Civeo, acting through the Audit Committee, to determine the remuneration to be paid to Ernst & Young LLP for 2019;
3.
To approve, on an advisory basis, the compensation of Civeo’s named executive officers;
4.
To receive and consider the audited financial statements of Civeo for the financial year ended December 31, 2018, and the auditors’ report thereon; and
5.
To conduct any other business as may properly come before the annual general meeting or any adjournment or postponement thereof.

 The proposals are more fully described in the proxy statement accompanying this notice. Please give your attention to all of the information in the accompanying proxy statement.
Only shareholders of record at the close of business on March 27, 2019 are entitled to notice of and to vote at the annual general meeting or at any adjournment or postponement thereof that may take place.
Please note that space limitations make it necessary to limit attendance at the annual general meeting to shareholders, though each shareholder may be accompanied by one guest. Shareholders of record attending the annual general meeting should be prepared to present government-issued photo identification for admission. Shareholders owning Civeo common shares through a broker, bank or other record holder should be prepared to present government-issued photo identification and evidence of share ownership as of March 27, 2019, such as an account statement, voting instruction card issued by the broker, bank or other record holder, or other acceptable document, for admission into the annual general meeting. Check-in at the annual general meeting will begin at 8:30 a.m., and you should plan to allow ample time for check-in procedures. Seating at the annual general meeting is limited and admission is on a first-come, first-served basis. Cameras, cell phones, recording equipment and other electronic devices will not be permitted at the annual general meeting.
As owners of Civeo, your vote is important. Whether or not you are able to attend the annual general meeting in person, it is important that your shares be represented. Please vote as soon as possible. Voting your shares by returning your proxy card or voting instruction card or voting through the Internet or by telephone does not affect your right to vote in person if you attend


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the annual general meeting. For specific information regarding the voting of your shares, please refer to the section entitled “General Information About the Annual General Meeting,” beginning on page 2 of the accompanying proxy statement.
By Order of the Board of Directors,
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Carolyn J. Stone
Corporate Secretary
Houston, Texas
April 3, 2019
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL GENERAL MEETING TO BE HELD ON MAY 16, 2019: A COPY OF THIS PROXY STATEMENT, PROXY VOTING CARD AND THE CIVEO 2018 ANNUAL REPORT ARE AVAILABLE AT WWW.INVESTORVOTE.COM.


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http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12820431&doc=5
CIVEO CORPORATION
Three Allen Center
333 Clay Street, Suite 4980
Houston, Texas 77002
Proxy Statement
This proxy statement is being furnished to shareholders of Civeo Corporation, a British Columbia, Canada limited company (“Civeo”), in connection with the solicitation of proxies by its board of directors for use at the 2019 annual general meeting of shareholders (the “annual general meeting”) to be held on May 16, 2019 at 9:00 a.m., local time, at the Hyatt Regency, 1200 Louisiana Street, Houston, Texas 77002, at which shareholders will have the opportunity to vote on the proposals to elect the following three persons as Class II members of Civeo’s board of directors: Richard A. Navarre, Martin A. Lambert and Constance B. Moore, each for a term of three years ending at the 2022 annual general meeting of shareholders or until their successors are duly elected and qualified (the “Director Proposal”); to ratify the appointment of Ernst & Young LLP as Civeo’s independent registered public accounting firm for the year ending December 31, 2019 and until the next annual general meeting of shareholders and to authorize the directors, acting through the Audit Committee, to determine the remuneration to be paid to Ernst & Young LLP for 2019 (the “Auditor Proposal”); to approve, on an advisory basis, the compensation of Civeo’s named executive officers (the “Say-on-Pay Proposal”); and to conduct any other business as may properly come before the annual general meeting or any adjournment or postponement thereof. The approximate date of first mailing of this proxy statement, the accompanying proxy and Civeo’s 2018 annual report is April 11, 2019.
In this proxy statement, we sometimes refer to Civeo and its subsidiaries as “we,” “us,” “our,” or “Civeo.” Unless otherwise indicated, all references in this proxy statement to “dollars” or “$” are to U.S. dollars.


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GENERAL INFORMATION ABOUT THE ANNUAL GENERAL MEETING
The following questions and answers are intended to address briefly some commonly asked questions regarding the annual general meeting. These questions and answers may not address all questions that may be important to you. Please refer to the more detailed information contained elsewhere in this proxy statement and its annexes for more information.
 
Q: Why am I receiving this proxy statement?

A: At the annual general meeting, you will be asked to vote on several proposals, including:
 
the election of three persons as Class II members of Civeo’s board of directors: Richard A. Navarre, Martin A. Lambert and Constance B. Moore;
the ratification of the appointment of Ernst & Young LLP as Civeo’s independent registered public accounting firm for the year ending December 31, 2019 and until the next annual general meeting of shareholders and the authorization of the directors, acting through the Audit Committee, to determine the remuneration to be paid to Ernst & Young LLP for 2019;
the approval, on an advisory basis, of the compensation of Civeo’s named executive officers; and
the conduct of any other business as may properly come before Civeo’s annual general meeting or any adjournment or postponement thereof.
The board of directors knows of no matters, other than those stated in this proxy statement, to be presented for consideration at the annual general meeting.
We encourage you to read this proxy statement carefully, as it contains important information about these proposals and the annual general meeting.
Your vote is important. You do not need to attend the annual general meeting in person to vote. We encourage you to vote as soon as possible.

Q: What vote of shareholders is required to approve the proposals at the annual general meeting?
A: For the Say-on-Pay Proposal, you may vote "FOR", "AGAINST" or "ABSTAIN". To approve the Say-on-Pay Proposal, the votes cast in favor of the proposal must exceed the votes cast against the proposal.

For the Director Proposal and the Auditor Proposal, you may vote either “FOR” or “WITHHOLD.” A plurality of the votes cast by shareholders at the meeting is required to approve the Director Proposal and the Auditor Proposal. Votes cast with respect to the Director Proposal and the Auditor Proposal include only those votes cast “FOR” the proposal, and a vote marked “WITHHOLD” with respect to the proposal will not be voted and will not count for or against the proposal. Cumulative voting is not permitted in the election of directors. In accordance with our corporate governance guidelines, however, any director who receives a greater number of votes “WITHHELD” from his or her election than votes “FOR” such election is required to tender his or her resignation for consideration by the Nominating and Corporate Governance Committee following certification of the shareholder vote. For more information, please read “Management—Director Resignation Policy.”


Q: What vote does the board of directors recommend?

A: The board of directors recommends shareholders of Civeo vote “FOR” each of the director nominees named in the Director Proposal, “FOR” the Auditor Proposal and “FOR” the Say-on-Pay Proposal.


Q: When and where will the annual general meeting be held?
 
A: The annual general meeting will be held at the Hyatt Regency, 1200 Louisiana Street, Houston, Texas 77002 on May 16, 2019 at 9:00 a.m., local time. For directions to be able to attend the meeting, please review the information included in the notice or contact our Corporate Secretary at Civeo Corporation, Three Allen Center, 333 Clay Street, Suite 4980, Houston, TX 77002.



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Q: Who is entitled to vote at the annual general meeting?

A: We have fixed March 27, 2019 as the record date for the annual general meeting. Civeo has one outstanding class of common shares that entitles holders to vote at meetings of Civeo’s shareholders. If you were a shareholder of Civeo as of the close of business, U.S. Eastern Time, on such date, you are entitled to vote on matters that come before the annual general meeting.


Q: How many votes do I have?

A: You are entitled to one vote for each share you owned as of the close of business, U.S. Eastern Time, on the record date. As of the close of business on the record date, there were approximately 169,297,453 Civeo common shares outstanding.


Q: How do I vote?

A: If you are a registered shareholder of Civeo as of the close of business, U.S. Eastern Time, on the record date for the annual general meeting, you may vote in person by attending the annual general meeting or, to ensure your shares are represented at the annual general meeting, you may authorize a proxy to vote by:

 
accessing the Internet website specified on your proxy card;
calling the toll-free number specified on your proxy card; or
signing and returning your proxy card in the postage-paid envelope provided.
A proxy card is being sent with this proxy statement to each shareholder of record as of the record date for the annual general meeting.
If you hold shares in “street name” through a stock brokerage account or through a bank or other nominee, please follow the voting instructions provided by your broker, bank or other nominee to ensure that your shares are represented at the annual general meeting.

Q: If my shares are held in “street name” by my nominee, when will my nominee vote shares for me?

A: For the annual general meeting, if you are a beneficial owner whose shares are held by a bank, broker or other nominee of record, your bank, broker or other nominee of record has discretionary voting authority under NYSE rules to vote your shares on the Auditor Proposal, even if it has not received voting instructions from you. However, such nominee does not have discretionary authority to vote on the Director Proposal or the Say-on-Pay Proposal without instructions from you, in which case a broker non-vote will result and your shares will not be voted on those matters and will have no effect on the outcome of these votes. In these cases, the bank, broker or other nominee can include your shares as being present at the annual general meeting for purposes of determining the presence of a quorum but will not be able to vote on these matters for which specific authorization is required under the rules of the NYSE. Your nominee can give you directions on how to instruct the voting of your shares. We encourage you to instruct your nominee how to vote your shares.


Q: Are shareholders able to exercise appraisal rights?

A: Appraisal rights are not available to shareholders in connection with any of the proposals.



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Q: Can I change my vote after I grant my proxy?
 
A: Yes. You can change your vote at any time before your proxy is voted at the annual general meeting. In addition to revocation in any other manner permitted by law, you can revoke your proxy in one of the following ways:
filing a written revocation with the Secretary prior to the voting of such proxy;
giving a duly executed proxy bearing a later date; or
attending the annual general meeting and voting in person.
Your attendance at the annual general meeting will not itself revoke your proxy.
If you have instructed a broker to vote your shares, you must follow the procedure provided by your broker to change those instructions.

Q: What will happen if I fail to vote or I abstain from voting?

A: Under applicable local law, if you are a shareholder of Civeo and (1) are present in person or by proxy at the annual general meeting and mark your proxy or voting instructions to abstain, (2) are not present in person at the annual general meeting and do not respond by proxy or (3) fail to instruct your broker, bank or other nominee to vote, this will have no effect on the Say-on-Pay Proposal.

If you are a shareholder of Civeo and are present in person or by proxy at the annual general meeting and mark your proxy or voting instructions to withhold, this will have the effect of a vote withheld from the Director Proposal. If you are a shareholder of Civeo and are present in person or by proxy at the annual general meeting and mark your proxy or voting instructions to withhold, this will have no effect on the Auditor Proposal. If you are a shareholder of Civeo and are not present in person at the annual general meeting and do not respond by proxy, this will have no effect on the Director Proposal or the Auditor Proposal.

Q: What will happen if I return my proxy card without indicating how to vote?

A: If you are a holder of record of shares of Civeo and sign and return your proxy card without indicating how to vote on any particular proposal, the shares of Civeo represented by your proxy will be voted as recommended by the Civeo board of directors with respect to that proposal.


Q: What is the quorum requirement for the annual general meeting?

A: The presence of shareholders, in person or by proxy, holding at least a majority of the outstanding common shares will be required to establish a quorum. The shareholders present in person or by proxy at a duly called meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Abstentions, withheld votes and broker non-votes will be counted as present for purposes of determining whether there is a quorum.


Q: Who is soliciting my proxy?

A: Proxies are being solicited by our board of directors for use at the annual general meeting and any adjournment or postponement thereof.


Q: Who is paying for the cost of this proxy solicitation?

A: We are paying the costs of soliciting proxies. Upon request, we will reimburse brokers, banks, trusts and other nominees for reasonable expenses incurred by them in forwarding the proxy materials to beneficial owners of our shares.
In addition to soliciting proxies by mail, our board of directors, our officers and employees, or our transfer agent, may solicit proxies on our behalf, personally or by telephone, and we have engaged a proxy solicitor to solicit proxies on our behalf by telephone and by other means. We expect the cost of Okapi Partners LLC, our proxy solicitor, to be approximately $9,000. Computershare, our transfer agent, will serve as the inspector of election for the annual general meeting.

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ELECTION OF DIRECTORS
(Proposal 1)
Three directors have been nominated for election at the annual general meeting to serve as Class II members of Civeo’s board of directors. Based on the recommendation of our Nominating and Corporate Governance Committee, Civeo’s board of directors has nominated Richard A. Navarre, Martin A. Lambert and Constance B. Moore for election to the three expiring Class II positions on the board of directors currently held by them, to hold office for three-year terms expiring at the annual general meeting of shareholders in 2022, and until their respective successors have been duly elected and qualified, or until their earlier death, resignation or removal. Shareholder nominations will not be accepted for filling board of directors seats at the annual general meeting because our articles require advance notice for such a nomination, the time for which has passed. Our board of directors has determined that Richard A. Navarre, Martin A. Lambert and Constance B. Moore are “independent,” as that term is defined by the applicable NYSE listing standards. See “Management—Director Independence” for a discussion of director independence determinations. See “Management” for a brief biography of all directors, including the director nominees.
Each of the nominees is a current member of the Civeo board of directors. Each of the nominees has consented to being named as a nominee in this proxy statement and to continue serving as director if re-elected at the annual general meeting. Although management does not contemplate the possibility, if any nominee withdraws or otherwise becomes unable to serve as a director at the time of the election, the shares represented by proxies will be voted for the election of a substitute nominated by the board of directors to replace such nominee.
Civeo’s board of directors recommends that you vote “FOR” each of the director nominees named above. The persons named in the accompanying proxy intend to vote all proxies received in favor of the election of the nominees named below, except in any case where authority to vote for the directors is withheld.


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MANAGEMENT
Executive Officers and Directors
The following table sets forth information as of March 31, 2019 regarding the individuals who serve as our executive officers and directors, including the three nominees for election to the Class II positions on the board of directors at the annual general meeting.
 
Name
 
 
Position(s)
 
Age
 
Class
Richard A. Navarre
*
 
Chairman of the Board
 
58
 
Class II
Bradley J. Dodson
 
 
President, Chief Executive Officer and Director
 
45
 
Class III
Frank C. Steininger
 
 
Executive Vice President, Chief Financial Officer and Treasurer
 
61
 
Peter L. McCann
 
 
Senior Vice President, Australia
 
52
 
Allan D. Schoening
 
 
Senior Vice President, Canada
 
60
 
C. Ronald Blankenship
 
 
Director
 
69
 
Class I
Martin A. Lambert
*
 
Director
 
63
 
Class II
Constance B. Moore
*
 
Director
 
63
 
Class II
Charles Szalkowski
 
 
Director
 
70
 
Class I
Timothy O. Wall
 
 
Director
 
57
 
Class III
 
*
Nominee for election as Class II director at the annual general meeting.
Richard A. Navarre has been a director of Civeo since June 2014 and currently serves as Chairman of the board of directors of Civeo. Mr. Navarre served as the President and Chief Commercial Officer of Peabody Energy Corporation from February 2008 until he retired in June 2012. He previously served as the Peabody Energy Corporation Executive Vice President of Corporate Development and Chief Financial Officer from July 2006 to January 2008 and as Chief Financial Officer from October 1999 to June 2008. Mr. Navarre currently provides advisory services to the energy industry and investment firms. Mr. Navarre is currently an independent director, member of the audit committee and Chairman of Conflicts Committee for Natural Resource Partners LP (NYSE: NRP), independent director, chairman of the compensation committee, and member of the nominating and governance committee for Arch Coal, Inc. (NYSE:ARCH), and independent director and Chairman of the board of directors of Covia Corporation (NYSE:CVIA) and was previously the Chairman of the board of directors of United Coal Company, LLC. He is a member of the Hall of Fame of the College of Business at Southern Illinois University-Carbondale, and a member of the Board of Advisors of the College of Business and Administration. Mr. Navarre is a Certified Public Accountant and received his B.S. in Accounting from Southern Illinois University-Carbondale.
Bradley J. Dodson has been President and Chief Executive Officer and director of Civeo since May 2014. Mr. Dodson held several executive positions with Oil States International, Inc. (“Oil States”), a global provider of integrated energy systems and solutions, from March 2001 to May 2014, including serving as Executive Vice President, Accommodations from December 2013 to May 2014, Senior Vice President, Chief Financial Officer and Treasurer from April 2010 to December 2013, Vice President, Chief Financial Officer and Treasurer from May 2006 to April 2010, Vice President, Corporate Development from March 2003 to May 2006 and Director of Business Development from March 2001 to February 2003. From June 1998 to March 2001, Mr. Dodson served in several positions for L.E. Simmons & Associates, Incorporated, a private equity firm specializing in oilfield service investments. From July 1996 to June 1998, Mr. Dodson worked in the mergers and acquisitions group of Merrill Lynch & Co. He holds a M.B.A. degree from The University of Texas at Austin and a B.A. degree in economics from Duke University.
Frank C. Steininger has served as Executive Vice President, Chief Financial Officer and Treasurer of Civeo since March 2018. From May 2014 to February 2018, Mr. Steininger served as Senior Vice President, Chief Financial Officer and Treasurer of Civeo. From March 2014 to May 2014, Mr. Steininger was a consultant to Oil States. From August 1980 to March 2014, Mr. Steininger worked for PricewaterhouseCoopers LLP (“PwC”), where he was admitted to the partnership in 1991. From 1997 to 2014, Mr. Steininger was an Assurance Partner in PwC’s Global Energy practice. He holds a B.S. degree in accounting from the University of Akron.


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Peter L. McCann has served as Senior Vice President, Australia since June 2014. Mr. McCann was Managing Director of The MAC, a wholly owned subsidiary of Civeo, from June 2012 to June 2014. From January 2010 through June 2012, Mr. McCann was the Executive General Manager, Finance for The MAC. From 2004 to 2010, Mr. McCann served as Chief Financial Officer of Royal Wolf Trading. Mr. McCann holds a Bachelor of Commerce degree in accountancy from the University of New South Wales.
Allan D. Schoening has served as Senior Vice President, Canada since November 2018. Prior to his appointment, Mr. Schoening served as Senior Vice President, Corporate Affairs of Civeo since June 2017. From April 2014 to May 2017, he served as Senior Vice President, Human Resources & Health, Safety and Environment of Civeo. From June 2012 to April 2014, Mr. Schoening served as Senior Director and then Vice President, Human Resources and Health, Safety and Environment for PTI Group Inc., a subsidiary of Oil States. From June 2009 to May 2012, Mr. Schoening was self-employed as an independent business consultant. Prior to 2009, Mr. Schoening was based in London, England where he served as Senior Vice President for Katanga Mining Limited, a Canadian listed mining company with operations in Africa, for the period from 2005 to 2009. From 1995 to 2004, Mr. Schoening served in senior and executive management positions with Barrick Gold Corporation and Kinross Gold. Mr. Schoening’s career also includes domestic and international assignments with the completions division of Schlumberger Limited. He holds a B.A., Psychology (Spec.) from the University of Alberta.
C. Ronald Blankenship has been a director of Civeo since July 2014 and is currently the Chairman of the Finance and Investment Committee. Mr. Blankenship served as President and Chief Executive Officer of Verde Realty in January 2009 and he assumed the additional responsibilities of Chairman of the Board from January 2012 to December 2012. Prior to 2009, he served as Co-Chairman of Verde Group beginning in 2003. From 1998 until 2003, he was Vice Chairman of Security Capital Group Incorporated. Prior to his role as Vice Chairman, he served as Chief Operating Officer of Security Capital from 1998 to 2002 and Managing Director of Security Capital from 1991 until 1998. Prior to 1997, he was the Chief Executive Officer of Archstone Communities Trust. Prior to 1991, Mr. Blankenship was a regional partner at Trammell Crow Residential and was on the management board for Trammell Crow Residential Services. Prior to that, Mr. Blankenship was the chief financial officer and president of office development for Mischer Corporation, a Houston-based real estate development company. Mr. Blankenship began his career at Peat Marwick Mitchell & Company. Mr. Blankenship currently serves on the boards of Regency Centers Corp. (NYSE:REG), Pacolet Milliken Enterprises, Inc., a private investment company, Berkshire Group, a private investment management company, and Merit Hill, a privately owned and operated real estate company. Mr. Blankenship is a certified public accountant and a graduate of the University of Texas at Austin.
Martin A. Lambert has been a director of Civeo since May 2014 and is currently the Chairman of the Compensation Committee. Mr. Lambert is retired. He served as Chief Executive Officer of Swan Hills Synfuels LP, an energy conversion company, from November 2008 until July 2014. Prior thereto, Mr. Lambert served as a founder and managing director of Matco Capital Ltd., a private equity firm focused in the energy sector, since mid-2002. Mr. Lambert was a partner of Bennett Jones LLP, a Canadian law firm, from March 1987 to March 2007 and served as the Chief Executive Officer of that firm from 1996 to 2000. He served as a director of Oil States from February 2001 to May 2014 and Calfrac Well Services Ltd., from March 2004 to May 2010. Mr. Lambert currently serves as lead director, compensation, and as a member of the audit committee of Zedi, Inc., a private company involved in Canadian, U.S. and other international oilfield services. Mr. Lambert received his LLB degree from the University of Alberta in 1979.
Constance B. Moore has been a director of Civeo since June 2014 and is currently the Chairman of the Audit Committee. Ms. Moore has served as a director of TriPointe Group (NYSE: TPH) since July 2014 and is currently the Chairman of the compensation committee as well as a member of its audit committee. Ms. Moore has served as a director of Columbia Property Trust (NYSE: CXP) since November 2017 and is a member of its audit and nominating and corporate governance committees. Ms. Moore was a director of BRE Properties, Inc. (BRE) (NYSE: BRE) from September 2002 until BRE was acquired in April 2014. Ms. Moore served as President and Chief Executive Officer of BRE from January 2005 until April 2014 and served as President and Chief Operating Officer of BRE from January 2004 until December 2004. Ms. Moore has more than 35 years of experience in the real estate industry. Prior to joining BRE in 2002, she was the managing director of Security Capital Group & Affiliates. From 1993 to 2002, Ms. Moore held several executive positions with Security Capital Group, including co-chairman and chief operating officer of Archstone Communities Trust (NYSE:ASN). Ms. Moore holds an M.B.A. from the University of California, Berkeley, Haas School of Business, and a bachelor’s degree from San Jose State University. In 2009, she served as chair of the National Association of Real Estate Investment Trusts. Currently, she is chair of the Fisher Center for Real Estate and Urban Economics Policy Advisory Board at UC Berkeley; serves on the board of Haas School of Business, UC Berkeley; serves on the board of Bridge Housing Corporation; is a Governor and Trustee of the Urban Land Institute (ULI); serves on the board of the ULI-Foundation and the ULI Global Board; and serves on the board of the Tower Foundation at San Jose State University.

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Charles Szalkowski has been a director of Civeo since June 2014 and is currently the Chairman of the Nominating and Corporate Governance Committee. Mr. Szalkowski worked with the law firm of Baker Botts L.L.P. from 1975 until he retired as a partner and general counsel of the firm in December 2012. Since his retirement, Mr. Szalkowski has pursued his personal interests. Mr. Szalkowski is an emeritus member of the Rice University Board of Trustees, where he had previously chaired the Board’s audit committee and served on the compensation committee. He remains on the Rice audit committee. He was previously on the board of directors of Accelerate Learning Inc. (formerly Stemscopes Inc.). Mr. Szalkowski became a Certified Public Accountant in 1971 and received his J.D. and M.B.A. degrees from Harvard University in 1975 and B.S. in Accounting and B.A. in economics and political science from Rice University in 1971.
Timothy O. Wall has been a director of Civeo since March 2017. Mr. Wall served as the President of Kitimat LNG Upstream Operations, a division of Apache Canada Ltd. (a subsidiary of Apache Corporation, an oil and gas exploration and production company), from March 2013 until June 2015. He previously served as the President of Apache Canada Ltd. from May 2009 to March 2013 and as Managing Director and Regional Vice President, Australia of Apache Corporation from August 2005 to May 2009. From 1990 until August 2005, Mr. Wall served in various other positions within Apache Corporation. Mr. Wall currently provides advisory services to the energy industry. Mr. Wall has been a member of the board for several industry organizations, including the Canadian Association of Petroleum Producers, Australian Petroleum Production and Exploration Association and the Australian Minerals and Mines Association. Mr. Wall received his B.S. in Petroleum Engineering from Texas A&M University.
Qualifications of Directors and Nomination Process
When identifying our directors appointed to our board, the following are considered:
 
the person’s reputation, integrity and independence;
the person’s qualifications as an independent, disinterested, non-employee or outside director;
the person’s skills and business, government or other professional experience and acumen, bearing in mind the composition of the board of directors and the current state of Civeo and the accommodations industry generally at the time of determination;
the number of other public companies for which the person serves as a director and the availability of the person’s time and commitment to Civeo; and
the person’s knowledge of areas and businesses in which we operate or another area of our operational environment.
We believe that the above-mentioned attributes, along with the leadership skills and other experience of the Civeo board of directors described below, provide Civeo with the perspectives and judgment necessary to guide its strategies and monitor their execution.
We believe the breadth and variety of business experience of each of our directors and director nominees identified in the following table make each of them well qualified to serve on our board of directors.
 
Executive
Leadership
  
Financial
  
Accommodations,
Real Estate and
Hospitality
  
International
Operations
  
Past or
Present
CEO or
C-Suite
Experience
  
Director
Experience
Richard A. Navarre
ü
  
ü
  
 
  
ü
  
ü
  
ü
C. Ronald Blankenship
ü
  
ü
  
ü
  
ü
  
ü
  
ü
Bradley J. Dodson
ü
  
ü
  
ü
  
ü
  
ü
  
ü
Martin A. Lambert
ü
  
ü
  
ü
  
ü
  
ü
  
ü
Constance B. Moore
ü
  
ü
  
ü
  
 
  
ü
  
ü
Charles Szalkowski
ü
  
ü
  
 
  
ü
  
 
  
ü
Timothy O. Wall
ü
  
ü
  
 
  
ü
  
 
  
ü
In selecting nominees for the board of directors, the Nominating and Corporate Governance Committee considers, among other things, the diversity of the board of directors in terms of educational background, business industry experience, and knowledge of different geographic markets and the accommodations industry, and these factors are considered by the board of directors when identifying individuals for board membership. In the case of each current director being considered for

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renomination, the Nominating and Corporate Governance Committee took into account the director’s history of attendance at board of directors and committee meetings, the director’s tenure as a member of the board of directors and the director’s preparation for and participation in such meetings.
In identifying prospective director candidates, the Nominating and Corporate Governance Committee may seek referrals from other members of the board of directors, management, shareholders and other sources. The Nominating and Corporate Governance Committee also may, but need not, retain a professional search firm in order to identify, recruit and evaluate qualified candidates for the board of directors.
The Nominating and Corporate Governance Committee will consider recommendations from various sources, including from shareholders, regarding possible candidates for director. To submit a recommendation to the Nominating and Corporate Governance Committee, a shareholder should send a written request to the attention of Civeo’s Secretary at Civeo Corporation, Three Allen Center, 333 Clay Street, Suite 4980, Houston, Texas 77002. The written request must include the nominee’s name, contact information, biographical information and qualifications, as well as the nominee’s written consent to serve, if elected, and any other information the shareholder may deem relevant to the committee’s evaluation. The request must also disclose the number of common shares beneficially owned by the person or group making the request, the period of time such person or group has owned those shares and the nature of any arrangement or agreement between the shareholder making a nomination and other parties with respect to the nomination. Candidates recommended by shareholders are evaluated on the same basis as candidates recommended by our directors, executive officers, third-party search firms or other sources. These procedures do not preclude a shareholder from making nominations in accordance with the process described below under “Future Shareholder Proposals.”
Director Independence
Under rules adopted by the NYSE, our board of directors must have a majority of independent directors. To qualify as “independent” under the NYSE listing standards, a director must meet objective criteria set forth in the NYSE listing standards, and the board of directors must affirmatively determine that the director has no material relationship with us (either directly or as a partner, shareholder or officer of an organization that has a relationship with us).
The Civeo board of directors reviews, as appropriate, material or relevant direct or indirect business relationships between each director (including his or her immediate family) and our company, as well as each director’s relationships with charitable organizations, to assess director independence as defined in the listing standards of the NYSE. The NYSE listing standards include a series of objective tests, such as that the director is not an employee of Civeo and has not engaged in various types of business dealings with Civeo. In addition, as further required by the NYSE, the Civeo board of directors has made a subjective determination that each independent director has no material relationship with Civeo (either directly or as a partner, shareholder or officer of an organization that has a relationship with Civeo). When assessing the materiality of a director’s relationship with us, the board of directors considers the issue not merely from the standpoint of the director, but also from the standpoint of the persons or organizations with which the director has an affiliation.

The Civeo board of directors has determined that, except for Bradley Dodson, our President and Chief Executive Officer, all of the Civeo directors, including Ronald J. Gilbertson, throughout the period he served on the board, qualify as “independent” in accordance with the applicable NYSE listing standards. Mr. Gilbertson resigned from the board of directors effective March 31, 2019.
Board Structure
The Civeo board of directors is divided into three classes, each of roughly equal size. There are currently two directors of Class I, three directors of Class II and two directors of Class III. The members of each class serve for three years following their election, with one class being elected each year. The directors designated as Class II directors will have terms expiring at the annual general meeting. If elected at the annual general meeting, Messrs. Navarre and Lambert and Ms. Moore, as Class II directors, will have terms expiring in 2022. The directors designated as Class III directors have terms expiring in 2020, and the directors designated as Class I directors have terms expiring in 2021.
Board Committees
The Civeo board of directors has established several standing committees in connection with the discharge of its responsibilities.

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Audit Committee
Civeo’s board of directors has established an Audit Committee, consisting entirely of independent directors. The members of the audit committee are Messrs. Blankenship and Szalkowski and Ms. Moore, each of whom the board of directors has determined is independent under applicable NYSE and SEC rules for board of director and audit committee independence.
The Audit Committee meets separately with representatives of our independent auditors, our internal audit personnel and representatives of senior management in performing its functions. The Audit Committee appoints our independent auditors and reviews the general scope of audit coverage, the fees charged by the independent auditors, matters relating to internal control systems and other matters related to accounting and reporting functions. The board of directors has determined that each of Messrs. Blankenship and Szalkowski and Ms. Moore is financially literate and has accounting or related financial management expertise, each as required by the applicable New York Stock Exchange (“NYSE”) listing standards. The board of directors also has determined that Mr. Blankenship and Ms. Moore qualify as audit committee financial experts under the applicable rules of the Exchange Act. A more detailed discussion of the Audit Committee’s mission, composition and responsibilities is contained in the Audit Committee charter, which is available on our website, www.civeo.com, by first clicking “Corporate Governance” under the “Investor Relations” heading and then “Audit Committee Charter” at the bottom of the page.
Compensation Committee
Civeo’s board of directors has established a Compensation Committee, consisting entirely of independent directors. The members of the compensation committee are Messrs. Blankenship and Lambert and Ms. Moore, each of whom the board of directors has determined is independent under applicable NYSE and SEC rules for board of director and compensation committee independence.
The Compensation Committee administers the Equity Participation Plan (“EPP”) , and in this capacity makes a recommendation to the full board of directors concerning the aggregate amount of all option grants or share awards to employees as well as specific awards to executive officers under the EPP. In addition, the Compensation Committee is responsible for (i) determining the compensation of our chief executive officer and other executive officers, (ii) overseeing and approving compensation and employee benefit policies and (iii) reviewing and discussing with our management the Compensation Discussion and Analysis and related disclosure included in our annual proxy statement. A more detailed discussion of the Compensation Committee’s mission, composition and responsibilities is contained in the Compensation Committee charter, which is available on our website, www.civeo.com, by first clicking “Corporate Governance” under the “Investor Relations” heading and then “Compensation Committee Charter” at the bottom of the page.
Nominating and Corporate Governance Committee
Civeo’s board of directors has established a Nominating and Corporate Governance Committee, consisting entirely of independent directors. The members of the Nominating and Corporate Governance Committee are Messrs. Navarre, Szalkowski and Wall, each of whom the board of directors has determined is independent under applicable NYSE rules.
The Nominating and Corporate Governance Committee makes proposals to the board of directors for candidates to be nominated by the board of directors to fill vacancies or for new directorship positions, if any, which may be created from time to time. A more detailed discussion of the Nominating and Corporate Governance Committee’s mission, composition and responsibilities is contained in the Nominating and Corporate Governance Committee charter, which is available on our website, www.civeo.com, by first clicking “Corporate Governance” under the “Investor Relations” heading and then “Nominating and Corporate Governance Committee Charter” at the bottom of the page.
Finance and Investment Committee
Civeo’s board of directors has established a Finance and Investment Committee. The members of the Finance and Investment Committee are Messrs. Blankenship, Lambert and Wall.
The Finance and Investment Committee assists the board of directors in its consideration of opportunities to enhance our long-term performance and valuation, including reviewing and making recommendations to the board of directors with respect to our strategic objectives and financial and operating metrics and performance. A more detailed discussion of the Finance and Investment Committee’s mission, composition and responsibilities is contained in the Finance and Investment Committee charter, which is available on our website, www.civeo.com, by first clicking “Corporate Governance” under the “Investor Relations” heading and then “Finance and Investment Committee Charter” at the bottom of the page.

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Committee Composition
Below is a summary of our committee structure and membership information.
C - Chairperson             M - Member                 FE - Financial Expert
 
 
Audit Committee
Compensation
Committee
Nominating and
Corporate Governance
Committee
Finance and Investment
Committee
Richard A. Navarre
 
 
 
M
 
C. Ronald Blankenship
FE
M
M
 
C
Martin A. Lambert
 
 
C
 
M
Constance B. Moore
FE
C
M
 
 
Charles Szalkowski
 
M
 
C
 
Timothy O. Wall
 
 
 
M
M

Board of Directors and Committee Meetings
During 2018, the Civeo board of directors held eight meetings, the Audit Committee held seven meetings, the Compensation Committee held seven meetings, the Nominating and Corporate Governance Committee held four meetings and the Finance and Investment Committee held five meetings. Each of the directors attended at least 75% of the meetings of the board of directors and the committees on which he or she served. While we understand that scheduling conflicts may arise, we expect directors to make reasonable efforts to attend the annual general meeting of shareholders and meetings of the board of directors and the committees on which they serve. All of our directors who served at the time of our 2018 annual general meeting of shareholders attended the meeting.
Executive Sessions
Our independent directors regularly meet in executive session with no members of management present and generally meet at each board meeting. Our Chairman of the Board, Richard Navarre, who is an independent director, presides at these sessions.
Board of Directors Oversight of Enterprise Risk
Risk oversight is a responsibility of the board of directors. The board of directors has delegated responsibility for monitoring certain enterprise risks to its standing committees. The Civeo board of directors and its committees utilize our Enterprise Risk Management (ERM) process to assist in the oversight of our risks. Management and employees are responsible for day-to-day risk management, and management conducts a risk assessment of our business annually. The risk assessment process is global in nature and has been developed to identify and assess our risks, including the nature, likelihood of occurrence, materiality and anticipated timing of impact of the risk, as well as to identify steps to mitigate and manage each key risk. Our key business leaders, functional heads and other managers are surveyed and/or interviewed to develop this information.
The results of the risk assessments are reviewed with the Audit Committee and with the full board of directors annually. The centerpiece of the assessment is the discussion of our key risks, which include strategic, operational, regulatory, cybersecurity and other risks and the factors discussed above. As part of the process for evaluating each key risk, a senior manager is identified to manage the risk, monitor potential impact of the risk and execute initiatives to mitigate the risk.
Corporate Governance Guidelines
Civeo has adopted Corporate Governance Guidelines to best ensure that the board of directors has the necessary authority and practices in place to make decisions that are independent from management, that the board of directors adequately performs its function as the overseer of management and to help ensure that the interests of the board of directors and management are aligned with the interests of the shareholders. Civeo’s Corporate Governance Guidelines are available at

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www.civeo.com by first clicking “Corporate Governance” under the “Investor Relations” heading and then “Corporate Governance Guidelines.”
Board of Directors Leadership
Our board of directors is led by our independent Chairman of the Board, and the Chief Executive Officer position is currently separate from the Chairman role. The board of directors maintains the flexibility to determine whether the roles of Chair and Chief Executive Officer should be combined or separated, based on what it believes is in the best interests of the Civeo at a given point in time. We believe the separation of these two positions is appropriate corporate governance for us at this time because it promotes a strong independent leadership structure. In addition, we believe this structure facilitates effective oversight of management and enables the board to fulfill its risk oversight responsibilities.
Corporate Code of Business Conduct & Ethics
Civeo has adopted a Corporate Code of Business Conduct and Ethics (the “Code of Conduct”), which requires that all directors, officers and employees of Civeo act ethically at all times. This Code of Conduct is available at Civeo’s web site www.civeo.com by first clicking “Corporate Governance” under the “Investor Relations” heading and then “Corporate Code of Business Conduct and Ethics.”
Substantially all of our employees are required to complete online training on a regular basis. That training includes a review of our Corporate Code of Conduct and an acknowledgement that the employee has read and understands the policy.
Financial Code of Ethics for Senior Officers
Civeo has adopted a Financial Code of Ethics for Senior Officers (the “Financial Code of Ethics”) that applies to our chief executive officer, chief financial officer, principal accounting officer and other senior officers (“Senior Officers”). The Financial Code of Ethics is available at Civeo’s website www.civeo.com by first clicking “Corporate Governance” under the “Investor Relations” heading and then “Financial Code of Ethics for Senior Officers.”
Ethical principles set forth in the Financial Code of Ethics include, among other principles, matters such as:
 
Acting ethically with honesty and integrity;
Avoiding conflicts of interest;
Complying with disclosure and reporting obligations with full, fair accurate, timely and understandable disclosures;
Complying with applicable laws, rules and regulations;
Acting in good faith, responsibly with due care, competence and diligence;
Promoting honest and ethical behavior by others in the work environment;
Respecting confidentiality of information acquired in the course of his or her work; and
Responsibly using and maintaining assets and resources employed or entrusted to the Senior Officer.
Senior Officers must also comply with the Code of Conduct.
Director Resignation Policy
We have adopted a director resignation policy, which is included in Civeo’s Corporate Governance Guidelines. The director resignation policy provides that, if a director receives a greater number of “withheld” votes than votes “for” his or her election, that director is required by our Corporate Governance Guidelines to tender his or her resignation to the Nominating and Corporate Governance Committee for consideration. The Nominating and Corporate Governance Committee will recommend to the board of directors the action, if any, to be taken with respect to the resignation. Any such resignation shall not be effective unless and until the board of directors chooses to accept the resignation in accordance with our Corporate Governance Guidelines. While not necessarily resulting in a resignation, the offer will provide the Nominating and Corporate Governance Committee the opportunity to consider the appropriateness of continued membership on the board of directors of the director who tendered resignation and make a recommendation to the board of directors as to the director’s continued service on the board. In making this recommendation, the Committee will consider all factors deemed relevant by its members including, without limitation, (1) the underlying reasons why shareholders may have “withheld” votes for election from such director, if known; (2) the length of service and qualifications of the director whose resignation has been tendered; (3) the director’s past and potential future contributions to us; (4) the current mix of skills and attributes of directors on the board; (5) whether, by accepting the resignation, we will no longer be in compliance with any applicable law, rule, regulation, or governing instrument; and (6) whether accepting the resignation would be in our best interests and those of our shareholders.

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Civeo’s Corporate Governance Guidelines also provide that, if a director changes his or her employer or otherwise has a significant change in job responsibilities during his or her tenure as a director, that director is required to inform the Nominating and Corporate Governance Committee of the change and tender his or her resignation to the board of directors for consideration. Such resignation shall not be effective unless and until the board of directors chooses to accept the resignation. The board of directors, through the Nominating and Corporate Governance Committee, shall review the matter in order to evaluate the continued appropriateness of such director’s membership on the board of directors and each applicable board committee under these circumstances, taking into account all relevant factors and may accept or reject a proffered resignation.
Compensation Committee Interlocks and Insider Participation
During 2018, none of our executive officers served as: (1) a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on our Compensation Committee; (2) a director of another entity, one of whose executive officers served on our Compensation Committee; or (3) a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served as one of our directors. In addition, each of Messrs. Blankenship and Lambert and Ms. Moore served as members of our Compensation Committee during 2018, none of whom: (1) was an officer or employee of Civeo during 2018, (2) was formerly an officer of Civeo, or (3) had any relationship requiring disclosure under any paragraph of Item 404 of Regulation S-K.
Communications with Directors
Shareholders or other interested parties may send communications, directly and confidentially, to our board of directors, to any committee of our board of directors, to non-management directors or to any director in particular by sending an envelope marked “confidential” to such person or persons c/o Civeo Corporation, Three Allen Center, 333 Clay Street, Suite 4980, Houston, Texas 77002. Any such correspondence will be forwarded by the Secretary of Civeo to the addressee without review by management.
Accounting and Auditing Concerns
The Audit Committee has established procedures to receive, retain and treat complaints regarding accounting, internal accounting controls or auditing matters and to allow for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters.


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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS
Overview
In this section, we describe and discuss our executive compensation program, including the objectives and elements of compensation, as well as determinations made by the Compensation Committee of the board of directors regarding the compensation of our named executive officers for 2018. Our named executive officers are:
 
Bradley J. Dodson, President, Chief Executive Officer and Director;
Frank C. Steininger, Executive Vice President, Chief Financial Officer and Treasurer;
Peter L. McCann, Senior Vice President, Australia; and
Allan D. Schoening, Senior Vice President, Canada.*
*
Mr. Schoening was promoted from Senior Vice President, Corporate Affairs to Senior Vice President, Canada effective November, 2018.
Compensation Governance
In keeping with our commitment to strong governance standards across our business, our executive compensation governance framework is built around the following:
 
A Compensation Committee comprised of individuals with deep relevant business experience, all of whom have served previously as chief executive officers of energy industry or real estate related companies. All members of the Compensation Committee are independent in accordance with NYSE listing standards;
A clearly defined decision-making framework and delegation of authority that ensures all material compensation decisions for named executive officers are made on behalf of Civeo solely by the Compensation Committee, whose priority is to ensure our policies and procedures allow Civeo to attract, reward and retain executives who are focused on delivering long-term results for shareholders; and
Clearly defined compensation policies structured to accommodate circumstances that are characteristic of a cyclical industry sector.
For further information on the background and qualifications of the members of our Compensation Committee, please see “Management—Executive Officers and Directors,” “Management—Board Committees” and “Management—Compensation Committee” in this proxy statement.
Policies and Practices
The following are key policies and practices of our executive compensation program, which we believe align the interests of management with those of our shareholders and represent among the best practices in compensation and governance.
Equity Awards Pricing. Civeo’s practice is to price awards at the closing price on the date of grant.
Insider Trading Policy. Civeo prohibits directors, officers and other employees from trading Civeo’s securities on the basis of or in the possession of material, non-public information or “tipping” others who may so trade on such information. In addition, the policy prohibits directors, officers and designated managers from trading in Civeo’s securities without obtaining prior approval from Civeo’s Vice President, Controller and Corporate Secretary. Executive officers and directors are prohibited from trading options, pledging, or entering into any hedging transactions related to Civeo shares.
Clawback Policy. Civeo’s clawback policy allows Civeo to recoup incentive-based compensation from current or former executive officers if the consolidated financial statements of Civeo are materially restated within three years of their initial public release or filing, and the board of directors determines, in its reasonable discretion, that any current or former executive officer has engaged in intentional misconduct, and such misconduct caused or partially caused the need for such restatement. In that case, the board of directors may within 12 months after such a material restatement, require that the executive forfeit and/or return to Civeo all or a portion of the compensation vested, awarded or received under any bonus, equity or other award during the period subject to restatement and the 12-month period following the initial public release or filing of the restated financial statements. The forfeiture and/or return of compensation under the policy would be limited to any portion that the executive officer would not have received if the consolidated financial statements had been reported properly at the time of

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their initial public release or filing. The clawback policy would not apply to restatements following a change of control, as defined in the EPP, and the policy does not limit the ability of Civeo to otherwise pursue forfeiture or reclamation of amounts under applicable law.
Executive Share Ownership Requirements. Civeo has established executive share ownership requirements to further align the interests of key executives with those of its shareholders. Our Executive Share Ownership Guidelines are calculated based on a multiple of the executive’s base salary, as set forth below:
 
Chief Executive Officer
5X
Other Named Executive Officers
2X
Other Section 16 Officers
1X
Executives who are covered by these guidelines have five years to reach their respective share ownership levels. On an annual basis, the Compensation Committee monitors compliance with these guidelines. As of December 31, 2018, all executive officers were in compliance with the guidelines (or otherwise within the initial five-year period for compliance).
Independent Compensation Consultant. Mercer, LLC (“Mercer”), an independent compensation consultant, was engaged by the Compensation Committee and reports directly to the Compensation Committee. Their reappointment is reviewed and approved annually by the Compensation Committee.
Performance Share Awards. Long-term incentive awards made to named executive officers are 50% performance based.
Prohibited Practices. We do not allow any of the following:
 
Buying or selling puts, calls or options in respect of our securities, or pledging shares (including holding shares in a margin account) by directors and officers;
Excise tax gross-ups in any executive or change of control agreement entered into following our spin-off from Oil States International in May 2014;
Severance multipliers in excess of 3x;
Liberal share recycling in our long-term incentive plan;
Repricing of stock options or stock appreciation rights without shareholder approval;
Single-trigger vesting of equity awards upon a change of control; or
Unreasonably long terms for options.

We expect that over time, the governance landscape will continue to evolve and require both refinement of existing policies and adoption of new ones. Our Compensation Committee is committed to staying current with evolving governance standards and, where it feels that changes are warranted, to respond accordingly.
Executive Total Compensation Philosophy and Objectives
Civeo’s philosophy regarding its executive compensation programs for named executive officers is to provide a comprehensive and competitive total compensation program with the following objectives:
 
To attract, motivate, reward and retain executives with the experience and talent to achieve short-term goals and objectives and successfully execute longer-term strategic plans;
To reinforce the linkage between individual performance of executives and business results;
To align the interests of executives with the long-term interests of our shareholders; and
To ensure compensation neither promotes overly conservative actions nor excessive risk taking.
To this end, Civeo’s total compensation program uses a blend of base salary, annual performance incentives and long-term equity incentives to achieve the four objectives described above. Broadly speaking, we target median pay levels for all components of executive compensation; however, when warranted in the discretion of the Compensation Committee, awards above or below median levels of our peer group may be considered.
Compensation and Risk Management. Civeo’s compensation programs have been designed (i) to promote financial, operational and organizational growth, while giving due consideration to broader enterprise risk management issues and (ii) to maintain a balance between short and long-term incentive compensation, company growth, shareholder returns and risk. The Compensation Committee, in its sole discretion, retains full authority to adjust any aspect of Civeo’s compensation programs.

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Our Compensation Committee has reviewed our compensation policies and believes that our policies do not encourage excessive or unnecessary risk-taking, and that the level of risk that they do encourage is not reasonably likely to have a material adverse effect on us. The Compensation Committee performs this assessment annually.
Our compensation philosophy and culture support the use of base salary, certain performance-based compensation plans and benefit programs that are generally uniform in design and operation in the markets where we operate. These compensation policies and practices are centrally designed and administered. In addition, the following specific factors, in particular, reduce the likelihood of excessive risk-taking:
 
Our overall executive compensation levels are competitive with the market, based on information provided by the Compensation Committee’s independent consultant and reviewed by the Compensation Committee;
Our executive compensation mix is balanced among (i) fixed components including salary and benefits, (ii) annual incentives that reward our overall financial and operating performance and (iii) long-term incentives, 50% of which are performance-based for named executive officers, to more closely tie executive compensation to shareholder interests and to provide for a substantial portion of at-risk compensation in relation to share price performance;
We implement what our Compensation Committee believes to be rigorous performance measures for executive compensation each year, whether absolute or relative, and set performance goals that we believe are reasonable in light of market conditions; and
We have established maximum award levels to cap any performance incentives in place.
In summary, although a portion of the compensation provided to our named executive officers is based on our overall performance or division performance, we believe our compensation programs do not encourage
excessive or unnecessary risk-taking by our named executive officers (or other employees) because these programs are designed to encourage employees to remain focused on both our short-term and long-term operational and financial goals.
Executive Retention. The Compensation Committee is sensitive to the critical importance of key employee and executive retention, recognizing the costs, potential impacts and replacement challenges that accompany the loss of talented leadership particularly in a difficult market environment. For 2018 and 2019, executive retention was carefully considered by the Compensation Committee in arriving at its long-term incentive award determinations for our named executive officers, all of which remained consistent with our past practices.
Executive Compensation Decision-Making and Approval Process. All executive compensation decisions for named executive officers are made on behalf of Civeo solely by the Compensation Committee. Where appropriate, the Compensation Committee engages Mercer to research and make recommendations on issues considered important to executive compensation, as well to provide the Compensation Committee with insights on evolving compensation trends in relevant industry sectors.
Role of Executive Officers. The Compensation Committee consults our Chief Executive Officer in its determination of compensation matters related to the executive officers reporting directly to the Chief Executive Officer. The Chief Executive Officer makes recommendations to the Compensation Committee on matters such as salary adjustments, target annual incentive opportunities and the value of long-term incentive awards. In making his recommendations, the Chief Executive Officer considers such factors as experience level, individual performance, overall contribution to company performance and market data for similar positions. The Compensation Committee takes the Chief Executive Officer’s recommendations under advisement; however, the Compensation Committee makes all final decisions regarding such compensation matters. Our Chief Executive Officer’s compensation is reviewed annually and determined solely by the Compensation Committee, giving due consideration to performance against goals and objectives and other factors the Compensation Committee deems appropriate.
Role of Compensation Consultant. The Compensation Committee engages Mercer as its independent compensation consultant. Subsequent to its initial engagement of Mercer, the Compensation Committee has reviewed and confirmed its selection of Mercer on an annual basis.
Mercer’s role is to advise the Compensation Committee on matters relating to executive compensation and to help guide, develop and implement our executive compensation programs. Mercer reports directly to the Compensation Committee, and any requests management may have of Mercer throughout the course of its engagement must be approved by the Compensation Committee before any work is undertaken. Mercer has performed work for Civeo outside of the scope of its engagement by the Compensation Committee, but the Compensation Committee reviews and approves all such assignments to ensure that the independence of its compensation consultant is not compromised. The Compensation Committee conducted a review of its relationship with Mercer in 2018 and determined that Mercer’s work for the Compensation Committee did not raise any conflicts of interest or independence concerns, consistent with the guidance provided under the Dodd-Frank Act and by the SEC and NYSE. In making this determination, the Compensation Committee noted that during 2018:

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Mercer did not provide any services to Civeo or management other than services requested by or with the approval of the Compensation Committee;
Mercer maintains a conflicts policy, which was provided to the Compensation Committee, with specific policies and procedures designed to ensure independence;
Fees paid to Mercer by Civeo during 2018 were less than 1% of Mercer’s total revenue;
None of the Mercer consultants working on matters with us had any business or personal relationship with Compensation Committee members (other than in connection with working on matters with us);
None of the Mercer consultants working on matters with us (or any consultants at Mercer) had any business or personal relationship with any of our executive officers; and
None of the Mercer consultants working on matters with us own our common shares.
Since 2015, the Compensation Committee also approved the engagement of Mercer to provide benefits consulting services to Civeo. During 2018, fees paid to Mercer in the form of commissions by our Canadian insurer and retirement plan fund manager totaled $32,881 and $18,936, respectively, for benefits consulting services provided to our Canadian operations. During 2018, fees paid to Mercer in the form of commission by our U.S. insurers and retirement plan administrator totaled $134,520 and $26,600, respectively, for consulting services provided to our U.S. operations. In the opinion of the Compensation Committee, the scale of these fees does not compromise Mercer’s independence with regards executive and director compensation advisory services it provides directly to the Compensation Committee. This independence is and will continue to be monitored on an ongoing basis. Fees paid to Mercer for compensation consulting services to the Compensation Committee totaled $54,805 in 2018.
Peer Group and Benchmarking. In their 2018 review process, Mercer evaluated companies in the diversified support services, oil and gas equipment and services sectors whose business results are influenced by similar industry and commodity factors as Civeo. As a consequence of this review, Savanna Energy Services Corp. was removed from the peer group and the recommendation was made to add five additional companies to the peer group including Exterran Corp., Willbros Group Corp., Unit Corp., STEP Energy Services Ltd. and Source Energy Services Ltd. The addition of these companies to the peer group was approved by Compensation Committee. The primary review and selection criteria for the peer group remained unchanged and included the following: revenue size, market value, enterprise value, number of employees, business/operational characteristics and geographic footprint.
 
Basic Energy Services Inc.
Parker Drilling Co.
 
 
Black Diamond Group Ltd.
Pioneer Energy Services Corp.
 
 
Exterran Corp.
Precision Drilling Corp.
 
 
Forum Energy Technologies Inc.
Source Energy Services Ltd.
 
 
Horizon North Logistics Inc.
STEP Energy Services Ltd.
 
 
Matrix Service Co.
TETRA Technologies Inc.
 
 
Newalta Corp.
Tesco Corp.
 
 
Newpark Resources Inc.
Unit Corp.
 
 
Oil States International Inc.
Willbros Group Corp.
For the 2018 Performance Share Awards, the Compensation Committee determined that the same peer group would also be used as peers for relative total shareholder return (“TSR”) purposes, based on their customer and asset bases, service offerings or levels of exposure to the natural resources sectors where earnings can be impacted by commodity prices.

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In late 2018, Mercer reviewed Civeo’s peer group of companies used for benchmarking purposes to assess the competitiveness and suitability of Civeo’s compensation programs and practices. Following that review, Mercer recommended that Newalta Corp., Willbros Group Corp. and Tesco Corp. be removed as they had been acquired in 2018 and Parker Drilling Co. be removed as it had filed for bankruptcy protection under Chapter 11 in December 2018. Further, Mercer recommended that Nine Energy Service, Inc., Select Energy Services, Inc., and Total Energy Services Inc. be added to the peer group based on their comparability with other companies in the peer group. The Compensation Committee approved these changes to the peer group and it was determined that, unless otherwise determined in subsequent peer group evaluations, this new peer group is intended to be used by the Compensation Committee for compensation evaluation purposes for 2019.
Compensation Program Components
This section outlines each of the components of our compensation program. Compensation decisions specific to our named executive officers for 2018 for each of these components are discussed in greater detail immediately following this section. Overall compensation consists of base salary, annual performance incentive awards and long-term incentive awards.
Base Salary. Base salaries form the foundation of Civeo’s compensation program. Base salary recognizes the job being performed and the value of that job in the competitive market. Base salary must be sufficient to attract and retain the executive talent necessary for our continued success and provides an element of compensation that is not at risk to avoid fluctuations in compensation that could distract our executives from the performance of their responsibilities. Base salaries for named executive officers are reviewed annually by the Compensation Committee and, where deemed appropriate, adjusted to reflect competitive market conditions, as well as other internal factors, including performance, internal equity and changes to job scope and responsibility. In general, base salaries are targeted at median levels compared to comparable positions within the peer group but vary from this reference point when and where deemed appropriate by the Compensation Committee.
Short-Term Incentive Plan. The key objective of Civeo’s Annual Incentive Compensation Plan (“AICP”) is to reward the achievement of defined annual operating and financial objectives and to incentivize employee activities that will continually improve Civeo, both on a business unit and company-wide basis. Awards made under the AICP are designed to represent a material component of target total cash compensation for our named executive officers.
Under the AICP, the Compensation Committee establishes an incentive target, expressed as a percent of base salary, for each executive officer based upon, among other factors including geographic market differences, the Compensation Committee’s review of publicly available competitive compensation data for each position, level of responsibility and ability to impact or influence business results. For 2018, achieving results which exceeded a minimum, or threshold, level of performance triggered an AICP payout. Performance results at or below threshold (i.e., typically achieving a percentage less than 85% of the related AICP performance objective) results in no AICP award. Targeted performance is earned when an executive achieves 100% of his or her budgeted safety and financial performance objectives. Overachievement is earned when performance results are above 100% of budgeted safety and financial performance, with the maximum being 120%. Where performance results fall between the threshold and target level, a pro rata percentage of the target amount is paid out. Where performance results fall between the target and overachievement level, 100-200% of the target amount is paid out proportionately.
The performance metrics for our AICP consist of financial metrics, typically budgeted earnings before interest, taxes, depreciation and amortization (“EBITDA”), as adjusted where deemed appropriate by the Compensation Committee, and safety performance.
The maximum AICP overachievement percentage permitted under the AICP is capped at two times the target level to mitigate the potential for excessive risk taking.
At the beginning of each year, our Compensation Committee is responsible for reviewing and recommending for approval by our board of directors, quantifiable corporate performance objectives, including those specific to our Chief Executive Officer. At the end of each year, the Compensation Committee reviews Civeo’s performance results, as well as incentive awards to be paid to each executive officer and, in aggregate, to other AICP participants. In its sole discretion, the Compensation Committee interprets all provisions of the AICP and has authority to make positive or negative adjustments in individual, business unit or Civeo's consolidated results.
Long-Term Incentive Plan. Civeo’s long-term incentive plan (“LTIP”), established under the EPP, is designed to provide an additional incentive to executives to grow shareholder value through ownership of Civeo common shares or incentive awards directly linked to Civeo’s share price and to support our efforts to attract and retain highly qualified executives to grow and develop Civeo in our highly competitive and cyclical industry.

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The EPP provides for the grant of any combination of restricted share awards, restricted share units, performance awards, dividend equivalents, phantom share awards, deferred share awards, share payments or options. Broadly speaking, we award three types of long-term incentives to balance liquidity and dilution considerations and to ensure we deliver tax effective incentives to plan participants. These awards may be cash or share settled, depending on their type. For our U.S. named executive officers, we award performance shares, restricted stock awards and/or phantom units. For our Canadian named executive officer, we award performance shares, restricted share units and/or phantom units, and for our Australian named executive officer, we grant performance shares, deferred share awards and/or phantom units. All long-term incentive awards made to employees are generally subject to a three-year vesting period, with time-based awards vesting equally each year from date of grant and performance-based awards vesting on the third anniversary of the grant. All awards are subject to the approval of our Compensation Committee.
In determining the value of award levels, the ratio of long-term incentives as a percentage of base salary is considered relative to a range of factors including market competitiveness, internal equity and individual performance. As a general rule, long-term incentive award values increase with position responsibility and are intended to comprise a larger component of an executive’s total direct compensation as his or her responsibility increases.
Performance Share Award Program. In 2016, the Compensation Committee introduced a Performance Share Award Program under the EPP to further promote the linkage between shareholder and executive management interests. Our Performance Share Award Program is comprised of the following key elements:
 
Performance metric:
Relative TSR (compared against our defined peer group as described above)
 
 
Performance period:
Three years, commencing from the date of grant
 
 
Participants:
All named executive officers
 
 
Vesting:
Cliff vesting following completion of the performance period
 
 
Award amount:
Comprises 50% of a named executive officer’s annual long-term incentive award, as determined by the Compensation Committee
 
 
Payout:
Settled in either cash or shares, or a combination of both, at the discretion of the Compensation Committee

Calculation of our relative TSR will be conducted by a third party designated by the Compensation Committee following completion of the three-year performance cycle. Performance share awards granted in 2018 will be earned in amounts between 0% and 200% of the participant’s target performance share award, based on the payout percentage associated with Civeo’s absolute rank among the peer group as illustrated below:
 
Performance Measures
 
 
Absolute Rank
 
Approximate
Decile
Implied
Percentile Rank
 
Payout Percentage
1st or 2nd
 
1st
 
90%-100%
 
200%
3rd or 4th
 
2nd
 
80%-89.9%
 
175%
5th or 6th
 
3rd
 
70%-79.9%
 
150%
7th or 8th
 
4th
 
60%-69.9%
 
125%
9th or 10th
 
5th
 
50%-59.9%
 
100%
11th or 12th
 
6th
 
40%-49.9%
 
75%
13th or 14th
 
7th
 
30%-39.9%
 
50%
15th or 16th
 
8th
 
20%-29.9%
 
25%
17th - 19th
 
9th – 10th
 
0%-19.9%
 
0%

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If the performance metric yields a payout percentage of 0%, participants will not earn any performance shares for the applicable three-year performance period. Calculation of relative TSR includes all dividends paid over the performance cycle.
In the event a change of control of Civeo occurs prior to the end of a performance period, the payout percentage will be determined by the Compensation Committee as if the date of the change of control is the last day of the performance period. In determining the payout percentage, the performance metric to be applied will be the absolute rank which is attained through the date of change of control. Payout of performance share awards will be made following the completion of the performance period subject to the participant’s continued employment through the end of the performance period. Should, however, the participant’s employment be terminated (1) by Civeo without cause or by the participant for good reason (as defined in the Performance Share Award Program) or (2) as a result of the participant’s death or disability, in either case following a change of control and prior to the payout of performance share awards, then the participant is entitled to payout of the performance share award under terms provided within the Performance Share Award Program.
All performance share awards have been approved by the Compensation Committee.
All long-term incentive awards under the EPP are expensed in a manner to comply with Financial Accounting Standards Board, Accounting Standards codification, Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718—Stock Compensation”). Except in special circumstances, long-term incentive awards are made to participants in these plans annually, in conjunction with approval of annual year-end audited financial statements by the board of directors.
Free Cash Flow Incentive Plan. Our Free Cash Flow Incentive Plan is designed to promote the interests of Civeo and its shareholders by incentivizing eligible employees to identify and implement actions that generate incremental free cash flow. For 2018, actual free cash flow did not meet the budgeted target. Accordingly, no free cash flow awards were made attributable to the 2018 plan year. The Compensation Committee determines, in its sole discretion, those employees who are eligible to participate in the Free Cash Flow program, which may include, in exceptional circumstances, our named executive officers and the award amount allocated to each eligible employee. Eligible employees must be in continuous employment with Civeo through the date the award payment is made.
Other Perquisites and Personal Benefits. In general, Civeo does not offer perquisites or other personal benefits to any executive with an aggregate annual value over $10,000. Some executives are provided paid club memberships, which are used for business purposes.
Dual employment contract provisions for Messrs. Dodson, Steininger and Schoening provide for income tax preparation services to satisfy their annual filing obligations and for tax equalization for Messrs. Dodson and Steininger for pro rata compensation earned in Canada.
Benefit Plans. Civeo’s employee benefit plans are designed from a market competitive perspective with the objective of attracting and retaining talented employees. The Compensation Committee conducts periodic reviews of Civeo’s employee benefit plans to ensure the plans meet these objectives and where, in the Compensation Committee’s sole discretion, the Compensation Committee believes changes to these plans are warranted, the Compensation Committee will authorize such changes.
Civeo’s health and welfare benefits are provided to all North American employees, including U.S. or Canada-based executives. These benefits include comprehensive coverage for medical, prescription drug, vision and dental expenses, as well as life insurance, long-term disability, accidental death and dismemberment, business travel, employee assistance and flexible spending accounts. Contributions for these benefits, except the flexible spending account program, are based on a cost-sharing model between the employee and Civeo and are the same for employees and executives.
Retirement Plans. Civeo offers a defined contribution 401(k) retirement plan to all of its U.S. employees, including its U.S.-based executives. Those participating in the plan can make contributions from their base salaries and cash incentive compensation up to annual limits defined by the IRS. Civeo makes matching contributions under this plan on the first 6% of the participant’s compensation, providing 100% match on the employee’s contribution up to 4% of his or her compensation and a 50% match on the employee’s contribution up to an additional 2% of the employee’s compensation. A similar defined contribution plan, which uses the same contribution formula, is in place in Canada and is structured pursuant to regulations established by the Canadian Revenue Agency. In Australia, employees and executives must contribute 9.5% of base salary (to an annual capped limit established by the Australia Taxation Office) to a superannuation fund administered by the Government. This contribution is paid for by Civeo.

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2018 Executive Compensation
All executive compensation decisions, as well as decisions including aggregate AICP and long-term incentive awards to non-executive plan participants, were made by our Compensation Committee in conjunction with the approval of our audited 2018 year-end financials by the board of directors.
Base salaries and target AICP. Salary adjustments were made in 2018 for designated executives. Mr. Dodson received an increase in base salary to $600,000 in March, 2018 to reflect a more competitive salary as compared to other CEO’s of companies in our peer group. Mr. Steininger received an increase in base salary to $450,000 per year accompanying his promotion to Executive Vice President in March, 2018. Mr. Schoening’s salary was adjusted to CAD $400,000 in March, 2018 and then again in November, 2018 to CAD $475,000 accompanying his promotion to Senior Vice President, Canada.

During 2018, based on peer group compensation data presented by Mercer, the Compensation Committee approved an increase in AICP targets for Messrs. Steininger and Schoening to 70% and 60% respectively.

Annualized base salaries, as in effect on December 31, 2018, and target AICP levels for 2018 are set forth below for each named executive officer.
 
Name
 
Position (December 31, 2018)
 
Base Salary
(USD)
 
Target
AICP
Bradley J. Dodson
 
President and Chief Executive Officer
 
$
600,000

 
100%
Frank C. Steininger
 
Executive Vice President, Chief Financial Officer and Treasurer
 
$
450,000

 
70%
Peter L. McCann
 
Senior Vice President, Australia
 
$
314,160

 
65%
Allan D. Schoening
 
Senior Vice President, Canada
 
$
366,653

 
60%
2018 AICP Awards. The following performance metrics formed the basis for annual incentive award determinations for our named executive officers for 2018:
 
Name
 
Position (December 31, 2018)
 
Financial Performance (1)
 
Safety
Performance
Corporate
 
Division
 
Bradley J. Dodson
 
President and Chief Executive Officer
 
80%
 
0%
 
20%
Frank C. Steininger
 
Executive Vice President, Chief Financial Officer and Treasurer
 
80%
 
0%
 
20%
Peter L. McCann
 
Senior Vice President, Australia
 
40%
 
40%
 
20%
Allan D. Schoening
 
Senior Vice President, Canada
 
80%
 
0%
 
20%
(1) Mr. Schoening's AICP changes to 40% Corporate, 40% Division and 20% Safety, effective January 1, 2019 in conjunction with his promotion to Senior Vice President, Canada.
Our sole metric for evaluating financial performance for AICP purposes in 2018 was Adjusted EBITDA. EBITDA is widely recognized as a primary valuation and comparison metric used in the industry and, for this reason, was selected as the most suitable metric for 2018. EBITDA is a non-GAAP financial measure that is defined as net income plus interest, taxes, depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure that is defined as EBITDA adjusted to exclude impairment charges, certain costs associated with Civeo's acquisition of Noralta Lodge Ltd. (“Noralta”) and certain other costs.
Adjustments to EBITDA under the AICP for 2018 reflected one-time, unanticipated financial events incurred following approval of the 2018 budget. For 2018, specific adjustments included impairment expenses, expenses related to unbudgeted variability in stock-based compensation expense, changes in foreign exchange rates, transaction related costs and certain other costs. All adjustments to EBITDA for AICP purposes were reviewed and approved by the Compensation Committee.
In 2018, the following performance results under the AICP were considered for award determination purposes:
 
Consolidated Adjusted EBITDA of $85.1 million versus a budget of $102.0 million (83.4% of budget);
Adjusted EBITDA for our Canadian division of 79.5% of budget;
Adjusted EBITDA for our Australian division of 105.4% of budget; and

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Improvements in total recordable incident rate (“TRIR”) safety performance of 24% and 27% in Canada and Australia, respectively.
Based on these results, the following AICP payouts were approved by the Compensation Committee. These payouts are stated in U.S. dollars. Mr. McCann’s bonus, which is paid out in Australian dollars, has been converted to U.S. dollars below at an exchange rate of $0.7480 U.S. dollar per Australian dollar, the average exchange rate for 2018. Mr. Schoening’s bonus, which is paid out in Canadian dollars, has been converted to U.S. dollars below at an exchange rate of $0.7719 U.S. dollar per Canadian dollar, the average exchange rate for 2018.
 
Name
 
Position
 
Business Performance
 
Total AICP Payout
Financial
 
Safety
 
$
 
% of Target
Bradley J. Dodson
 
President and Chief Executive Officer
 
$0
 
$214,338
 
$214,338
 
36%
Frank C. Steininger
 
Executive Vice President, Chief Financial Officer and Treasurer
 
$0
 
$112,004
 
$112,004
 
36%
Peter L. McCann
 
Senior Vice President, Australia
 
$86,080
 
$81,682
 
$167,762
 
82%
Allan D. Schoening
 
Senior Vice President, Canada
 
$0
 
$56,859
 
$56,859
 
36%
2018 Long-Term Incentive Awards. For 2018, Civeo incorporated a combination of performance share awards, restricted stock awards, restricted share units and deferred share awards as long-term incentives to its named executive officers and other key employees. The type and value of award made to individuals in this group took into consideration the following factors:
 
Corporate, business unit and individual performance;
Competitive market practice;
Executive retention;
Impact of awards and quantum of awards on dilution and liquidity; and
Tax considerations in the U.S., Canada and Australia.
LTIP awards approved by the Compensation Committee were made at levels generally consistent with past practice.
 
Name
 
Position
 
LTIP Award (#)
 
Valuation (1)
Restricted
Stock
Awards
 
Restricted
Share
Units
 
Deferred
Share
Awards
 
Performance
Share Awards
 
Stock price at Date of Grant
($)
 
Bradley J. Dodson
 
President and Chief Executive Officer
 
300,898

 

 

 
300,899

 
$
3.34

 
$2,599,764
Frank C. Steininger
 
Executive Vice President, Chief Financial Officer and Treasurer
 
288,420

 

 

 
134,731

 
$
3.34

 
$1,726,578
Peter L. McCann
 
Senior Vice President, Australia
 

 

 
62,010

 
62,010

 
$
3.34

 
$535,766
Allan D. Schoening
 
Senior Vice President, Canada
 

 
71,856

 

 
71,857

 
$
3.34

 
$620,841
(1)
This column shows the full grant date fair value of restricted stock awards, restricted share units, deferred share awards and performance share awards as computed under FASB ASC Topic 718—Stock Compensation and granted to the named executive officers during 2018. Generally, the grant date fair value is the amount that Civeo would expense in its financial statements over the vesting schedule of the awards. For purposes of all awards, other than performance share awards, the value in this column is based upon the stock price on date of grant. For purposes of the performance share awards, the per share grant date fair value was $5.30, which was calculated using a Monte Carlo simulation pricing model. See Note 19 to Civeo’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018 for additional detail regarding assumptions underlying the value of these awards.
At its January 25, 2018 meeting, the Compensation Committee approved the promotion of Mr. Steininger to Executive Vice President, Chief Financial Officer and Treasurer, effective March 1, 2018. Accompanying this promotion, the Compensation Committee approved a special promotional restricted stock award of 153,689 shares valued at $562,502 that vests in full two years following the date of grant. This special equity award is included in restricted stock awards reported

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above. All LTIP awards, other than the performance share awards and Mr. Steininger's special promotional equity award, vest ratably over a 3-year period.
Chief Executive Officer Compensation
During 2018, several important corporate initiatives were advanced under Mr. Dodson’s leadership. On the corporate development front, two accretive acquisitions were completed, these being Noralta Lodge in Canada and Lakeland LLC in the United States. Financially, several key objectives were accomplished during the year including free cash flow remaining positive, continued progress made in the pay down of debt and additional amendments to our revolving credit facility were secured. From an operational perspective, strong results were achieved in the areas of cost control and safety performance. In evaluating Mr. Dodson’s performance for the year, the Compensation Committee considered the following specific accomplishments:

Consolidated Adjusted EBITDA grew by 28%, year-over-year;
Integration of the Noralta acquisition was successfully completed with synergies exceeding plan;
Year over year EBITDA improvement of over $10 million generated by our US businesses;
Debt payments of $47 million were made during the year; and
Significant improvements in safety performance in our Canadian and Australian operations, with total recordable incident rates declining by 24% and 27% respectively, in relation to prior year end incident rates.
2018 Compensation. In March 2018, Mr. Dodson’s base salary was adjusted from $575,000 to $600,000 to more closely align with CEO salary levels of our peer group. For 2018, Mr. Dodson’s total direct compensation remained between the 25th and 50th percentile of other CEO’s in our peer group.
In consideration of 2018 performance results, the Compensation Committee approved an AICP payment of $214,338 for Mr. Dodson reflecting over-target performance for safety results. No AICP payment was made for consolidated financial performance. This payment was approved at the Compensation Committee’s meeting on February 25, 2019 in conjunction with approval of Civeo’s 2018 audited year-end financial results.
Recognizing that Mr. Dodson’s total direct compensation has remained low relative to his peers for the past four years, the Compensation Committee approved an increase in his 2018 long-term incentive award target to $2,010,000 to more equitably position him against other CEO’s in Civeo’s peer group. This award was comprised of performance share and restricted share awards with the target award value split evenly between those two types of awards. Performance share awards granted Mr. Dodson vest on the third anniversary of date of grant and are subject to specific performance criteria more fully described above. Time vested awards granted to Mr. Dodson vest equally over three years from the date of grant.
The following graph describes the composition of Mr. Dodson’s compensation for 2018.
 http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12820431&doc=2
Executive and Change of Control Agreements
Civeo maintains Executive Agreements with Messrs. Dodson, Steininger and McCann and a Change of Control Agreement with Mr. Schoening. These agreements are not considered long-term employment agreements and as such, U.S. executives are employed “at will” by Civeo. The agreements for Messrs. Dodson, Steininger and McCann provide protection in the event of a qualified termination, which is defined as an (i) involuntary termination of the executive officer by Civeo other than for “Cause” or (ii) a voluntary termination by the executive for “Good Reason” during a specified period of time after a corporate “Change of Control” (as defined in each Executive Agreement) of Civeo. Mr. Schoening’s Change of Control Agreement provides protection only following a termination other than for “Cause” during a specified period of time following

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a Change of Control. The triggering events were selected due to the executive not having complete control in either of these circumstances. Executives exercise control over their circumstances when they resign voluntarily without Good Reason or are terminated for Cause. As a result, these events do not trigger any payments.
The Change of Control provisions under both types of agreements are intended to encourage continued employment by Civeo of its executive officers and minimize distractions around related uncertainties and risks created by a proposed Change of Control. Unlike “single-trigger” arrangements that pay out immediately upon a change of control, Civeo’s agreements require a “double-trigger” (i.e., a change of control along with a qualifying loss of employment). Where a qualified termination occurs during the protection period following a Change of Control, the agreements provide for a lump-sum payment to the executive officer based on his base salary and target annual incentive amount in place on the date of termination. Under the terms of their Executive Agreements, Messrs. Dodson, Steininger and McCann are each entitled to receive a lump-sum payment equal to two times their base salary and target annual incentive amount if a qualified termination occurs during the protection period following a Change of Control. Where a qualified termination occurs beyond the protection period following a Change of Control, Messrs. Dodson, Steininger and McCann will be entitled to receive a lump-sum payment equal to one year’s base salary and target annual bonus amount as well as other benefits described below. Under the terms of his Change of Control Agreement, Mr. Schoening is entitled to receive a lump-sum payment equal to 1.75 times his base salary and target annual incentive amount if a qualified termination occurs during the 18-month period following a Change of Control. This multiple was increased to 2 times his annual salary and target annual incentive amount accompanying his promotion in November 2018.
In addition, the agreements provide that all restricted stock awards, restricted share units, performance shares, deferred shares, phantom units and options will vest immediately, that all restrictions on such awards will lapse upon a Change of Control and a qualified termination and that outstanding options will remain exercisable for a period of 90 days. The executive officer will also be entitled to (A) in the case of Messrs. Dodson, Steininger, and Schoening, health benefits until the earlier of (i) 36 months (in the case of Mr. Dodson, 24 months (in the case of Mr. Steininger) or 12 months (in the case of Mr. Schoening)) and (ii) the date the executive began receiving comparable benefits from a subsequent employer, (B) in the case of Messrs. Dodson, Steininger, and Schoening, vesting of all employer contributions to our 401(k) plan to the extent not already vested and (C) outplacement services equal to a maximum of 15% of the executive’s salary at the time of termination until the earliest to occur of (i) December 31 of the second calendar year following the year of termination and (ii) the date the executive accepts subsequent employment. The executive agreement entered into with Mr. Dodson while employed by Oil States International Inc. entitled Mr. Dodson to be made whole for any excise taxes incurred with respect to severance payments that were in excess of the limits set forth under the Internal Revenue Code. No excise tax gross-up protection is available to Mr. Steininger, Mr. McCann or Mr. Schoening. See “Potential Payments Under Termination or Change of Control” in this proxy statement for additional disclosures of severance and Change of Control payments for named executive officers.
Civeo’s Executive Agreements have a term of three years, Mr. Schoening’s Change of Control Agreement has a term of two years and each of the agreements are extended automatically for one additional day on a daily basis, unless notice of non-extension is served by the board of directors. Where notice is served, the agreement will terminate on the third anniversary or the second anniversary in the case of Mr. Schoening, of the date notice was given. To receive benefits under the Executive Agreement or Change of Control Agreement, the executive officer is required to execute a release of all claims against Civeo.
For additional information on non-change of control severance payments available under the Executive Agreements as well as additional information on these benefits, see the section entitled “Potential Payments Upon Termination or Change of Control” below.
Dual Employment Contracts. Messrs. Dodson, Steininger and Schoening are all parties to dual employment contracts with Canadian and U.S. legal entities of Civeo. These contracts are in place to permit each such executive to execute contracts and other legal agreements on behalf of entities in either jurisdiction and to work and perform cross-border services on an uninterrupted basis. The terms of these contracts allocate a portion of each such executive’s time to services performed in the United States and Canada and in the case of Messrs. Dodson and Steininger, provide for tax equalization payments intended to put the executive in the same position as if his or her employment income were all earned in the State of Texas.
Accounting and Tax Considerations. Under Section 162(m) of the Code, a limitation exists on tax deductions of any publicly-held corporation for individual compensation to certain “covered employees” of such corporation exceeding $1,000,000 in any taxable year. For taxable years beginning after December 31, 2017, the previously existing exemption from Section 162(m)’s deduction limit for certain “performance-based” compensation was repealed for all but certain grandfathered compensation arrangements that were in effect as of November 2, 2017. However, the rules and regulations promulgated under Section 162(m) are complicated and subject to change and the scope of relief for grandfathered arrangements is currently uncertain. As such, there can be no assurance that any compensation awarded will be fully tax deductible.

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If an executive is entitled to nonqualified deferred compensation benefits that are subject to Section 409A of the Code, and such compensation does not comply with Section 409A, then the benefits are taxable in the first year they are not subject to a substantial risk of forfeiture and are subject to certain additional adverse tax consequences. We intend to design such arrangements to comply with (or be exempt from) Section 409A to the extent that the design is also appropriate for our business goals with respect to those arrangements.
All equity awards to our employees, including executive officers, and to our directors will be granted and reflected in our consolidated financial statements, based upon the applicable accounting guidance, at fair market value on the grant date in accordance with FASB ASC Topic 718—Stock Compensation.
Response to Say-on-Pay Vote. At our 2018 annual meeting, we obtained a 98.5% approval by our shareholders casting votes on our Say on Pay proposal. Our Compensation Committee considered that approval level in making its compensation-related decisions in 2018, but did not make any specific changes to its compensation program as a result of such vote.


COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed with Civeo’s management the Compensation Discussion and Analysis included in this proxy statement. Based on that review and discussion, the Compensation Committee has recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement.
Respectfully submitted,
Martin A. Lambert, Chairperson
C. Ronald Blankenship
Constance B. Moore


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SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation paid in respect of specified periods to our named executive officers.
 
Name and Principal Position
 
Year
 
Salary ($)
 
Bonus ($)
 
Share
Awards ($)(1)
 
Option
Awards ($)
 
Non-Equity
Incentive Plan
Compensation  ($)(5)
 
All Other
Compensation
($)(6)
 
Total
Bradley J. Dodson(2)
 
2018
 
$
595,385

 
$—
 
$
2,599,764

 
$

 
$
214,338

 
$
24,378

 
$
3,433,865

President and Chief Executive Officer
 
2017
 
575,000

 
 
2,047,890

 

 
851,644

 
38,638

 
3,513,172

2016
 
520,192

 
 
2,266,668

 

 
93,635

 
126,973

 
3,007,468

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Frank C. Steininger
 
2018
 
$
444,462

 
$—
 
$
1,726,578

 
$

 
$
112,004

 
$
29,158

 
$
2,312,202

Executive Vice President, Chief Financial Officer and Treasurer
 
2017
 
416,846

 
 
1,087,892

 

 
370,440

 
31,971

 
1,907,149

 
2016
 
400,000

 
 
1,586,667

 

 
48,000

 
41,107

 
2,075,774

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Peter L. McCann(3)
 
2018
 
$
314,160

 
$—
 
$
535,766

 
$

 
$
167,762

 
$
16,637

 
$
1,034,325

Senior Vice President, Australia
 
2017
 
322,098

 
 
522,322

 

 
336,718

 
23,206

 
1,204,344

 
2016
 
312,438

 
 
946,288

 

 
160,369

 
24,248

 
1,443,343

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allan D. Schoening(4)
 
2018
 
$
309,552

 
$—
 
$
620,841

 
$

 
$
56,859

 
$
102,086

 
$
1,089,338

Senior Vice President, Canada
 
2017
 
273,757

 
 
532,351

 

 
202,733

 
58,242

 
1,067,083

 
2016
 
245,408

 
 
850,000

 

 
50,000

 
60,394

 
1,205,802

 
(1)
This column represents the dollar amounts, for years shown, of the aggregate grant date fair value of performance share, restricted stock award, restricted share unit, deferred share, and phantom unit awards, as applicable, granted in those years computed in accordance with FASB ASC Topic 718—Stock Compensation. Generally, the aggregate grant date fair value is the aggregate amount that Civeo expects to expense in its financial statements over the award’s vesting schedule and, for performance share awards, is based upon the probable outcome of the applicable performance conditions. If the maximum performance level were achieved for the performance shares included in this column, the following amounts would have been included for Messrs. Dodson, Steininger, McCann and Schoening, respectively, $3,189,529, $1,428,149, $657,306 and $761,684. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. These amounts reflect Civeo’s future accounting expense for these awards and options, and do not necessarily correspond to the actual value that will be recognized by the named executive officers. See Note 19 to Civeo’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018 for additional detail regarding assumptions underlying the value of these awards.
(2)
The annual salary reported for Mr. Dodson was adjusted down to $500,000 during 2015, increased to $575,000 during 2016 and to $600,000 during 2018.
(3)
Compensation reported for Mr. McCann, other than share awards, was made in Australian dollars and is reflected in this table in U.S. dollars using the average exchange rate for each year. The U.S. dollar to Australian dollar average exchange rate for 2018, 2017, and 2016 was $0.7480, $0.7669, and $0.7439 respectively.
(4)
Compensation reported for Mr. Schoening, other than share awards, was made in Canadian dollars and is reflected in this table in U.S. dollars using the average exchange rate for each year. The U.S. dollar to Canadian dollar average exchange rate for 2018, 2017 and 2016 was $0.7719, $0.7712 and $0.7551 respectively.
(5)
Amounts for “Non-Equity Incentive Plan Compensation” paid to each of the named executive officers were made pursuant to Civeo’s AICP and were paid in 2017, 2018 and 2019, respectively. For a description of Civeo’s plan, see “Compensation Discussion and Analysis—Compensation Program Components—Short-Term Incentive Plan.”
(6)
The amounts shown in the “All Other Compensation” column reflect the following for each Named Executive Officer:
Name and Principal Position
 
Year
 
Retirement
Plan Match ($)(a)
 
Non-Registered
Savings Plan
Match  ($)(a)
 
Dividends ($)(b)
 
Other ($)(c)
 
Total
Bradley J. Dodson
 
12/31/2018
 
$
13,750

 

 

 
$
10,628

 
$
24,378

Frank C. Steininger
 
12/31/2018
 
$
13,750

 

 

 
$
15,408

 
$
29,158

Peter L. McCann
 
12/31/2018
 
$
15,177

 

 

 
$
1,460

 
$
16,637

Allan D. Schoening
 
12/31/2018
 
$
10,228

 
$
15,340

 

 
$
76,517

 
$
102,085

(a)
Represents the matching contributions allocated by Civeo, as applicable, to Messrs. Dodson, Steininger and Schoening pursuant to the 401(k) Retirement Plan and Canadian Retirement Plan, as more fully described in “Compensation Discussion and Analysis Compensation Program Components—Retirement Plans” and “—Deferred Compensation Plan,” included herein. For Mr. McCann, represents a contribution to his Australian Superannuation fund as required by Australian law. For Mr. Schoening such amount also reflects additional contributions made to our Canadian Non-Registered Savings Plan in excess of contribution limits applicable to the Canadian Retirement Plan under the Canadian Tax Act.
(b)
No dividends were paid in 2018 on any long-term incentive awards.
(c)
The amounts shown in the “Other” column for Mr. Dodson include $1,856 in imputed income attributable to life insurance benefits and $8,772 in Canadian taxes paid by Civeo in relation to his Dual Employment contract. The amounts in the “Other” column for Mr. Steininger include $4,200 in

26

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imputed income attributable to life insurance benefits and $11,208 in Canadian taxes paid by Civeo on his behalf in relation to his Dual Employment contract. The amounts in “Other” for Mr. Schoening and Mr. McCann are attributable payments made under the Company’s Free Cash Flow Incentive Plan for 2017, which were paid in 2018. Also included for Mr. Schoening is a one-time transaction related bonus.

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GRANTS OF PLAN BASED AWARDS FOR 2018
The following table provides information about equity and non-equity awards granted to our named executive officers in 2018.
 
 
 
 
 
 
 
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)
 
Estimated Future Payouts
Under Equity Incentive Plan
Awards(2)
 
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)(3)
 
Grant Date
Fair Value
of Stock
Awards
($)(4)
Name
 
Award Type
 
Grant Date
 
Threshold
($)
 
Target
($)
 
Maximum
($)
 
Threshold
(#)
 
Target
(#)
 
Maximum
(#)
 
Bradley J. Dodson
 
AICP
 
 
 
$

 
$
600,000

 
$
1,200,000

 
 
 
 
 
 
 
 
 
 
 
 
Restricted Stock
 
2/20/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
300,898

 
$
1,004,999

 
 
Performance Shares
 
2/20/2018
 
 
 
 
 
 
 

 
300,899

 
601,798

 
 
 
$
1,594,765

Frank C. Steininger
 
AICP
 
 
 
$

 
$
315,000

 
$
630,000

 
 
 
 
 
 
 
 
 
 
 
 
Restricted Stock
 
2/20/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
134,731

 
$
450,002

 
 
Restricted Stock
 
3/1/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
153,689

 
$
562,502

 
 
Performance Shares
 
2/20/2018
 
 
 
 
 
 
 

 
134,731

 
269,462

 
 
 
$
714,074

Peter L. McCann(5)
 
AICP
 
 
 
$

 
$
204,204

 
$
408,408

 
 
 
 
 
 
 
 
 
 
 
 
Deferred Shares
 
2/20/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
62,010

 
$
207,113

 
 
Performance Shares
 
2/20/2018
 
 
 
 
 
 
 

 
62,010

 
124,020

 
 
 
$
328,653

Allan D. Schoening(6)
 
AICP
 
 
 
$

 
$
154,380

 
$
308,760

 
 
 
 
 
 
 
 
 
 
 
 
Restricted Stock Units
 
2/20/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
71,856

 
$
239,999

 
 
Performance Shares
 
2/20/2018
 
 
 
 
 
 
 

 
71,857

 
143,714

 
 
 
$
380,842

 
(1)
The amounts shown in the columns “Threshold”, “Target” and “Maximum” reflect the threshold, target and overachievement levels of bonus payable under the AICP (see discussion in “Compensation Discussion and Analysis—Compensation Program Components—Short-Term Incentive Plan”), which is based on an executive’s base salary paid during the year multiplied by the executive’s applicable bonus percentage for that level. The base salary used in this table is the base salary in effect as of December 31, 2018; however, actual awards are calculated based on a participant’s eligible AICP earnings paid in the year. Performance results at or below the threshold level percentage of performance targets established under the AICP will result in no payments being made under the AICP.
(2)
The amounts shown in the “Threshold”, “Target” and “Maximum” columns reflect the potential number of shares that may be earned under 2018 grants under our Performance Share Awards Program based on our relative TSR over the applicable three-year performance period (see discussion in “Compensation Discussion and Analysis- Compensation Program Components-Performance Share Award Program”). Earned shares will vest in full on the third anniversary of the grant date.
(3)
The following tables summarizes the awards included in the “All Other Stock Awards” column:
Type of Award
 
Vesting Details
 
Bradley J.
Dodson
 
Frank C.
Steininger
 
Peter L.
McCann
 
Allan D.
Schoening
Restricted Stock Award
 
Vest annually at a rate of one-third per year on each of the first three anniversaries of the grant date
 
300,898

 
288,420

 

 

Deferred Share Award
 
Vest annually at a rate of one-third per year on each of the first three anniversaries of the grant date
 

 

 
62,010

 

Restricted Stock Unit
 
Vest annually at a rate of one-third per year on each of the first three anniversaries of the grant date
 

 

 

 
71,856

 
(4)
This column shows the full grant date fair value of performance share awards (at target performance, which was the probable outcome of the performance conditions as of the grant date), restricted stock awards, restricted share units, phantom unit awards and deferred share awards computed under FASB ASC Topic 718—Stock Compensation and granted to the named executive officers during 2018. Generally, the full grant date fair value is the amount that Civeo would expense in its financial statements over the vesting schedule of the awards. For purposes of the performance share awards, the per share fair value of the awards of $5.30 was calculated using a Monte Carlo simulation pricing model. See Note 19 to Civeo’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018 for additional detail regarding assumptions underlying the value of these awards.
(5)
Mr. McCann’s AICP award amounts were paid in Australian dollars and are reflected in this table in U.S. dollars using an average exchange rate for 2018 of $0.7480 U.S. dollar per Australian dollar.
(6)
Mr. Schoening’s AICP award amounts were paid in Canadian dollars and are reflected in this table in U.S. dollars using an average exchange rate for 2018 of $0.7719 U.S. dollar per Canadian dollar.

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OUTSTANDING EQUITY AWARDS AT 2018 FISCAL YEAR END
The following table provides information on the holdings of options and share awards by our named executive officers as of December 31, 2018. The market value of the share awards is based on the closing market price of Civeo’s common shares as of December 28, 2018, which was $1.43.
 
 
 
Option Awards
 
Share Awards
Name
 
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
 
 
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
 
 
Option
Exercise
Price
($)
 
Option
Expiration
Date
 
Number of
Shares or
Units of
Stock that
Have Not
Vested
(#)
 
 
Market
Value of
Shares or
Units of
Stock that
Have Not
Vested
($)
 
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares or
Units of
Stock that
Have  Not
Vested
(#)
 
 
Equity
Incentive
Plan
Awards:
Market
Value of
Unearned
Shares or
Units of
Stock that
Have  Not
Vested ($)
Bradley J. Dodson
 
13,777
(1) 
 
(1) 
 
$
16.43

 
2/17/2021
 
 
 
 
 
 
 
 
 
 
 
 
22,961
(2) 
 
(2) 
 
$
18.43

 
2/16/2022
 
 
 
 
 
 
 
 
 
 
 
 
18,369
(3) 
 
(3) 
 
$
17.48

 
2/19/2023
 
 
 
 
 
 
 
 
 
 
 
 
18,369
(4) 
 
(4) 
 
$
21.87

 
2/19/2024
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
39,820
(5) 
 
$
56,943

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
39,820
(6) 
 
$
56,943

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
92,593
(7) 
 
$
132,408

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
92,593
(8) 
 
$
132,408

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
555,556
(9)
 
$
794,445

 
 
 
 
 
 
 
 
 
 
 
 
120,891
(10) 
 
$
172,874

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
40,297
(11) 
 
$
57,625

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
241,782
(12) 
 
$
345,748

 
 
 
 
 
 
 
 
 
 
 
 
300,898
(13) 
 
$
430,284

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
300,899
(14) 
 
$
430,286

Frank C. Steininger
 
 
 
 
 
 
 
 
 
 
 
24,238
(5) 
 
$
34,660

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
24,239
(6) 
 
$
34,662

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
64,814
(7) 
 
$
92,684

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
64,815
(8) 
 
$
92,685

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
388,889
(9) 
 
$
556,111

 
 
 
 
 
 
 
 
 
 
 
 
64,220
(10) 
 
$
91,835

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
21,407
(11) 
 
$
30,612

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
128,441
(12) 
 
$
183,671

 
 
 
 
 
 
 
 
 
 
 
 
134,731
(13) 
 
$
192,665

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
134,731
(14) 
 
$
192,665

 
 
 
 
 
 
 
 
 
 
 
 
153,689
(15) 
 
$
219,775

 
 
 
 
 
Peter L. McCann
 
 
 
 
 
 
 
 
 
 
 
33,012
(5) 
 
$
47,207

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
77,312
(7) 
 
$
110,556

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
231,933
(9) 
 
$
331,664

 
 
 
 
 
 
 
 
 
 
 
 
30,834
(10) 
 
$
44,093

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,278
(11) 
 
$
14,698

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
61,667
(12) 
 
$
88,184

 
 
 
 
 
 
 
 
 
 
 
 
62,010
(13) 
 
$
88,674

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
62,010
(14) 
 
$
88,674

Allan D. Schoening
 
 
 
 
 
 
 
 
 
 
 
69,445
(8) 
 
$
99,306

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
208,333
(9) 
 
$
297,916

 
 
 
 
 
 
 
 
 
 
 
 
31,426
(10) 
 
$
44,939

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,476
(11) 
 
$
14,981

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
62,851
(12) 
 
$
89,877

 
 
 
 
 
 
 
 
 
 
 
 
71,856
(13) 
 
$
102,754

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
71,857
(14) 
 
$
102,756


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Table of Contents

 
(1)
Option award of February 17, 2011 that was fully vested at December 31, 2018.
(2)
Option award of February 16, 2012 that was fully vested at December 31, 2018.
(3)
Option award of February 19, 2013 that was fully vested at December 31, 2018.
(4)
Option award of February 19, 2014 that was fully vested at December 31, 2018.
(5)
Restricted share award or deferred share award of February 11, 2015 that vests at the rate of 25% per year, with vesting dates of February 11, 2016, February 11, 2017, February 11, 2018 and February 11, 2019.
(6)
Phantom share units award of February 11, 2015 that vests at the rate of 25% per year, with vesting dates of February 11, 2016, February 11, 2017, February 11, 2018, and February 11, 2019.
(7)
Restricted share unit award or deferred share award of February 23, 2016 that vests at the rate of 33.33% per year, with vesting dates of February 23, 2017, February 23, 2018, and February 23, 2019.
(8)
Phantom share units award of February 23, 2016 that vests at the rate of 33.33% per year, with vesting dates of February 23, 2017, February 23, 2018, and February 23, 2019.
(9)
Performance share award of February 23, 2016 that vests on February 23, 2019, which is reported assuming target level achievement of the relative TSR performance metric.
(10)
Restricted share award, restricted share unit award or deferred share award of February 21, 2017 that vests at the rate of 33.33% per year, with vesting dates of February 21, 2018, February 21, 2019, and February 21, 2020.
(11)
Phantom share units award of February 21, 2017 that vests at the rate of 33.33% per year, with vesting dates of February 21, 2018, February 21, 2019, and February 21, 2020.
(12)
Performance share award of February 21, 2017 that vests on February 21, 2020, which is reported assuming target level achievement of the relative TSR performance metric.
(13)
Restricted share award, restricted share unit award or deferred share award of February 20, 2018 that vests at the rate of 33.33% per year, with vesting dates of February 20, 2019, February 20, 2020 and February 20, 2021.
(14)
Performance share award of February 20, 2018 that vests on February 20, 2021, which is reported assuming target level achievement of the relative TSR performance metric.
(15)
Restricted share award of March 1, 2018 that vests on March 1, 2020.


30

Table of Contents

OPTIONS EXERCISED AND SHARES VESTED
The following table provides information for our named executive officers for the period from January 1, 2018 to December 31, 2018 regarding the number of our common shares acquired upon the vesting of share awards and the value realized, each before payment of any applicable withholding tax. Reported values for the stock awards were calculated based on the number of share awards vesting multiplied by closing share price on the date of vesting.
 
 
Option Awards
 
Stock Awards
Name                
Number of Shares
Acquired on Exercise
(#)
 
Pre-tax Value
Realized
on Exercise
($)
 
Number of Shares
Acquired on Vesting
(#)
 
Pre-tax 
Value Realized
on Vesting
($)
Bradley J. Dodson

 
$

 
358,310

 
$
1,256,147

Frank C. Steininger

 
$

 
229,592

 
$
811,864

Peter L. McCann

 
$

 
138,915

 
$
488,502

Allan D. Schoening

 
$

 
125,022

 
$
438,417



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NONQUALIFIED DEFERRED COMPENSATION
Civeo maintains a non-qualified style of plan in Canada in which Mr. Schoening is a participant. Civeo previously maintained a non-qualified Deferred Compensation Plan that permitted our directors and eligible U.S. employees to elect to defer all or a part of their cash compensation (base and/or incentive pay) from Civeo until the termination of their status as a director or employee or a change of control. This plan was terminated in 2016, and account balances were distributed in 2017 and 2018. Civeo no longer maintains a Deferred Compensation Plan in the United States.
The investment alternatives available under the Canadian non-qualified deferred compensation plan during 2018 were the same mutual funds available to all employees under Civeo’s Group RRSP/DPSP Retirement Plan. Selection of these funds are at the discretion of the executive. Payout terms, withdrawals and other distributions are made at the discretion of the executive subject to corresponding plan terms and conditions.
Detailed below is 2018 activity in the Deferred Compensation Plan for Mr. Dodson and the Canadian non-qualified Deferred Compensation Plan for Mr. Schoening. All amounts listed below for Mr. Schoening have been converted to U.S. dollars an exchange rate of $0.7719. Messrs. McCann and Steininger did not participate in either of these plans.
 
Name                
Executive
Contributions
in Last
Fiscal Year
($)(1)
 
Registrant
Contribution
in Last
Fiscal Year
($)(2)
 
Aggregate
Earnings
(Loss)
in Last
Fiscal Year
($)(3)
 
Aggregate
Withdrawals/
Distributions
($)
 
Aggregate
Balance
At Last
Fiscal
Year End
($)
Bradley J. Dodson(4)
$

 
$

 
$
9,201

 
$
(300,892
)
 
$

Allan D. Schoening
$
20,558

 
$
15,340

 
$
(2,617
)
 

 
$
91,299

 
(1)
All contribution amounts for the last fiscal year reported in this table are also included in the “Salary” and “Non-Equity Incentive Plan Compensation” columns in the Summary Compensation Table for 2018.
(2)
The $15,340 reported for Mr. Schoening in this column is also included in the “All Other Compensation” column of the Summary Compensation Table for 2018.
(3)
This column represents net unrealized appreciation, loss, dividends and distributions for Messrs. Dodson and Schoening for mutual fund investments for 2018 associated with investments held in the Deferred Compensation Plan.
(4)
Mr. Dodson received the final distribution in January 2018.


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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
The table below reflects the amount of compensation that would be payable to Messrs. Dodson, Steininger and McCann in the event of a qualified termination, which is defined as (i) an involuntary termination of the executive officer by Civeo other than for “Cause” or (ii) either an involuntary termination other than for “Cause” or a voluntary termination by the executive for “Good Reason,” in each case, during a specified period of time after a “Change of Control” of Civeo. The table below also reflects the amount of compensation that would be payable to Mr. Schoening in the event of a qualified termination during a specified period time after a “Change of Control” (as defined in his Change of Control Agreement) of Civeo. Mr. Schoening’s Change of Control Agreement does not provide for any severance benefits on a termination prior to a Change of Control. The scope and terms of compensation due to each named executive officer upon non-change of control voluntary terminations, early retirement, retirement, for “Cause” termination and in the event of disability or death of the executive are the same as for all salaried employees. The amounts shown in the table assume that such qualified termination was effective as of December 31, 2018 and, therefore, include compensation earned through such time and are estimates of the amounts which would be paid out to the executives upon their terminations. The actual amounts to be paid can only be determined at the time of such executive’s separation from Civeo. For a discussion of the terms of the Executive and Change of Control Agreements, see “Compensation Discussion and Analysis—Executive and Change of Control Agreements.”
For purposes of the Executive Agreements, “Cause” generally includes conviction of or guilty plea to a felony, dishonesty or breach of trust, commission of any act of theft, embezzlement or fraud regardless of criminal conviction, continued failure to devote substantially all of the executive’s business time to our affairs or unauthorized disclosure of our confidential information. “Good Reason” includes material reduction in the executive’s authorities, duties or responsibilities, material reduction in the executive’s compensation and benefits, failure of a successor to assume the agreement or a relocation of executive’s principal place of employment more than 50 miles from its previous location.
“Change of Control” includes (i) any person acquiring beneficial ownership of 35% or more of the combined voting power of our capital stock, (ii) turnover of a majority of the board of directors unless such turnover is approved by incumbent directors, (iii) any merger unless our shareholders own at least 50% of the combined voting power of the surviving parent company’s capital stock following the merger, (iv) shareholder approval of a complete liquidation or (v) sale of all or substantially all of our assets.
Equity Awards
Civeo’s option agreements provide that, in the event of an employee’s disability, retirement or death, outstanding unvested options will become fully vested and will be exercisable for a period of one year following the employee’s date of termination due to disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code), retirement (on or after attainment of age 65 or, with the Civeo Compensation Committee’s express written consent, on or after the age of 55) or death. Civeo restricted share unit, restricted stock award, phantom unit, and deferred share agreements provide that awards would become fully vested on (i) the date a Change of Control occurs or (ii) the termination of an employee’s employment due to his death or a disability that entitles the employee to receive benefits under a long term disability plan of Civeo. All outstanding awards would fully vest following a Change of Control where such awards are not assumed or converted following Change of Control. Civeo’s performance share awards granted beginning in 2016 provide that in the event a Change of Control occurs prior to the end of a performance period, the payout percentage will be determined by the Compensation Committee as if the date of Change of Control is the last day of the performance period. In determining payout percentage, the performance metric to be applied will be rank, which is attained through the date of Change of Control. Payout of performance awards will be made following the completion of the performance period subject to the executive’s continued employment through the end of the performance period. Should, however, the executive’s employment be terminated (1) by Civeo without Cause (as defined above) or by the executive for Good Reason (as defined above) or (2) as a result of the executive’s death or
disability, in either case following a Change of Control (as defined above) and prior to the payout of performance share awards, the executive is entitled to payout of the performance share awards under the terms provided within the performance share award program.
Quantification of Payments
Shown in the table below are potential payments upon the assumed (A) involuntary not for Cause termination of Messrs. Dodson, Steininger or McCann by Civeo on December 31, 2018, other than during the 24-month period following a Change of Control, (B) involuntary not for Cause termination or termination by the named executive officer for “Good Reason,” in either case, during the 24-month period (for Mr. Dodson) or (18-month period in the case of Messrs. Steininger, McCann or Schoening) following a Change of Control of Civeo, occurring as of December 31, 2018, or (C) termination as a result of death,

33

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disability, or qualifying retirement on December 31, 2018. None of Mr. Dodson’s potential payments as of December 31, 2018 would trigger a gross-up payment for excise taxes that would be reimbursed under his Executive Agreement.
 
 
Bradley J. Dodson
 
Frank C. Steininger
 
A
 
B
 
 
 
C
 
A
 
B
 
C
Benefits and Payments due on Separation
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash Severance
$
1,200,000

 
$
2,400,000

 
 
 

 
$
765,000

 
$
1,530,000

 

Stock Options(1)

 

 
 
 

 

 

 

Stock Awards(1)
$
2,496,076

 
$
2,496,076

 
 
 
$
2,496,076

 
$
866,925

 
$
1,652,702

 
$
1,652,702

Benefits & Perquisites
 
 
 
 
 
 
 
 
 
 
 
 
 
Health & Welfare Benefits(2)
$
34,257

 
$
51,385

 
 
 

 

 

 

Outplacement Assistance(3)

 
$
90,000

 
 
 

 

 
$
67,500

 

Tax Gross-Up

 

 
 
 

 
n/a

 
n/a

 
n/a

 
Allan D. Schoening (5)
 
Peter L. McCann (4)
 
A
 
B
 
 
 
C
 
A
 
B
 
C
Compensation
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash Severance

 
$
1,026,629

 
 
 

 
$
518,364

 
$
1,036,728

 

Stock Options(1)

 

 
 
 

 

 

 

Stock Awards(1)

 
$
752,529

 
 
 
$
752,529

 
$
501,174

 
$
766,543

 
$
766,543

Benefits & Perquisites
 
 
 
 
 
 
 
 
 
 
 
 
 
Health & Welfare Benefits(2)

 
$
2,455

 
 
 

 

 

 

Outplacement Assistance(3)

 
$
54,998

 
 
 

 

 
$
47,124

 

Tax Gross-Up
n/a

 
n/a

 
 
 
n/a

 
n/a

 
n/a

 
n/a

 
(1)
Reflects the value of unvested options, restricted stock awards, restricted stock units, phantom units and deferred share awards as of December 28, 2018 that would be accelerated as a result of the separation event based on Civeo’s share price of $1.43, which was the closing market price of Civeo’s common shares on December 28, 2018. For performance shares, the payout is assumed at target level. Due to the exercise price for the unvested options that would become vested and exercisable on a Change of Control and the price of Civeo’s common shares as of December 28, 2018, the aggregate value of such stock options would be zero. In addition, the amounts reported in the “Stock Awards” row would be realized by the named executive officers in the event of the occurrence of a Change of Control (without the occurrence of a qualified termination if the awards are not assumed by the successor in the change of control transaction) or upon the named executive officer’s death or disability, in each case, occurring on December 28, 2018. The treatment of Performance Share Awards during a Change of Control is described more fully under “Compensation Program Components—Performance Share Award Program”.
(2)
Reflects the estimated lump-sum present value of all future premiums which would be paid on behalf of the named executive officer under Civeo’s health and welfare benefit plans for the applicable continuation period specified in both Executive and Change of Control Agreements.
(3)
Reflects the maximum amount of outplacement assistance that would be provided for the named executive officer pursuant to the Executive Agreement.
(4)
Cash severance amounts and Outplacement Assistance for Mr. McCann would be made in Australian dollars and are reflected in this table in U.S. dollars using the average exchange rate for 2018 of $0.7480.
(5)
Cash severance amounts, Health and Welfare Benefits and Outplacement Assistance for Mr. Schoening would be made in Canadian dollars and are reflected in this table in U.S. dollars using the average exchange rate for 2018 of $0.7719.


34

Table of Contents

DIRECTOR COMPENSATION
Our non-employee directors receive compensation for their services on the board of directors. Directors who are also our employees do not receive a retainer or fees for service on our board of directors or any committees. Accordingly, Mr. Dodson, a director of Civeo and Civeo’s President and Chief Executive Officer, does not receive director compensation. Beginning in 2019, directors who are not employees receive an annual retainer of $65,000. The non-employee director who serves as the Chairman of the Board receives an additional annual retainer of $75,000, which is paid quarterly 50% in cash and 50% in fully vested common shares. Each non-employee director who serves as the chairman of a committee receives an additional annual retainer. The chairman of the Compensation Committee receives an additional $23,000, the Nominating and Corporate Governance Committee and the Finance and Investment Committee chairman receives an additional $18,000. The chairman of the Audit Committee receives an additional annual retainer of $27,500. Members of the Nominating and Corporate Governance Committee, the Compensation Committee and the Finance and Investment Committee, other than the Committee chairman, receive an additional annual retainer of $13,000 and members of the Audit Committee, other than the Committee chairman, receive an additional annual retainer of $18,000. All committee retainers are paid in cash. Newly elected non-employee directors receive restricted stock awards valued at $125,000 after their initial election. In addition, non-employee directors who have served for not less than six months receive additional restricted stock awards valued at $125,000 at each annual shareholders’ meeting after which they continue to serve. The non-employee directors’ restricted stock awards are valued on the award date based on the closing share price and vest on the earlier of one year from