RPC,
INC.
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
2801
Buford Highway, Suite 520, Atlanta, Georgia 30329
TO THE
HOLDERS OF THE COMMON STOCK:
PLEASE TAKE NOTICE that the
2008 Annual Meeting of Stockholders of RPC, Inc., a Delaware corporation (“RPC”
or the “Company”), will be held at 2170 Piedmont Road, NE, Atlanta, Georgia, on
Tuesday, April 22, 2008, at 12:15 P.M., or any adjournment thereof, for the
following purposes:
1.
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To
elect three Class I directors to the Board of Directors;
and
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2.
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To
transact such other business as may properly come before the meeting or
any adjournment thereof.
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The
Proxy Statement dated March 17, 2008 is attached.
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The
Board of Directors has fixed the close of business on February 29, 2008 as
the record date for the determination of stockholders entitled to notice
of, and to vote at, the meeting.
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Stockholders
who do not expect to be present at the meeting are urged to complete,
date, sign and return the enclosed proxy. No postage is
required if the enclosed envelope is mailed in the United
States.
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BY
ORDER OF THE BOARD OF DIRECTORS
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Linda
H. Graham, Secretary
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Atlanta,
Georgia
March 17,
2008
PROXY
STATEMENT
This
Proxy Statement and a form of proxy were first mailed to stockholders on or
about March 17, 2008. The following information concerning the
enclosed proxy and the matters to be acted upon at the Annual Meeting of the
Stockholders to be held on April 22, 2008, is submitted by the Company to the
stockholders in connection with the solicitation of proxies on behalf of the
Company’s Board of Directors.
SOLICITATION
OF AND POWER TO REVOKE PROXY
A form of
proxy is enclosed. Each proxy submitted will be voted as directed,
but if not otherwise specified, proxies solicited by the Board of Directors of
the Company will be voted in favor of the candidates for election to the Board
of Directors.
A
stockholder executing and delivering a proxy has power to revoke the same and
the authority thereby given at any time prior to the exercise of such authority,
if he so elects, by contacting either proxy holder or by attending the meeting
and voting in person. However, a beneficial stockholder who holds his
shares in street name must secure a proxy from his broker before he can attend
the meeting and vote.
CAPITAL
STOCK
The
outstanding capital stock of the Company on February 29, 2008 consisted of
98,564,106 shares of Common Stock, par value $0.10 per share. Holders
of Common Stock are entitled to one vote (non-cumulative) for each share of such
stock registered in their respective names at the close of business on February
29, 2008, the record date for determining stockholders entitled to notice of,
and to vote at, the meeting or any adjournment thereof.
A
majority of the outstanding shares will constitute a quorum at the Annual
Meeting. Abstentions will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business. In accordance with the
General Corporation Law of the state of Delaware, the election of the nominees
named herein as Directors will require the affirmative vote of a plurality of
the votes cast by the shares of Company Common Stock entitled to vote in the
election provided that a quorum is present at the Annual Meeting. In the case of
a plurality vote requirement (as in the election of directors), where no
particular percentage vote is required, the outcome is solely a matter of
comparing the number of votes cast for each nominee, with those nominees
receiving the most votes being elected, and hence only votes for director
nominees (and not abstentions) are relevant to the outcome. In this
case, the three nominees receiving the most votes will be elected. There
are no rights of appraisal or similar dissenter's rights with respect to any
matter to be acted upon pursuant to this Proxy Statement. It is expected that
shares held of record by officers and directors of the Company, which in the
aggregate represent approximately 71 percent of the outstanding shares of Common
Stock, will be voted for the nominees for directors.
The
executives named in the Summary Compensation Table, and the name and address of
each stockholder (or “group” as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended) who owned beneficially five percent
(5%) or more of the shares of Common Stock of the Company on February 29, 2008,
together with the number of shares owned by each such person and the percentage
of outstanding shares that ownership represents, and information as to Common
Stock ownership of the directors and executive officers of the Company as a
group (according to information received by the Company), are set out
below:
Name and Address of Beneficial
Owner
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Amount Beneficially Owned (1)
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Percent of Outstanding
Shares
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R.
Randall Rollins
Chairman
of the Board
2170
Piedmont Road, NE
Atlanta,
Georgia 30324
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64,599,898
(2)
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65.2
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Gary
W. Rollins
President
and Chief Executive Officer, Rollins, Inc.
2170
Piedmont Road, NE
Atlanta,
Georgia 30324
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65,929,508
(3)
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66.6
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Royce
& Associates LLC
1414
Avenue of the Americas
New
York, NY 10019
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6,268,431
(4)
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6.3
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GAMCO
Investors, Inc.
One
Corporate Center
401
Theodore Fremd Avenue
Rye,
NY 10580 -1433
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5,398,570
(5)
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5.5
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Artisan
Partners Limited Partnership
875
East Wisconsin Avenue – 800
Milwaukee,
WI 53202-5408
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5,073,050 (6)
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5.1
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Richard
A. Hubbell
President
and Chief Executive Officer
2801
Buford Highway, Suite 520
Atlanta,
Georgia 30329
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1,351,077
(7)
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1.4
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Linda
H. Graham
Vice
President and Secretary
2170
Piedmont Road, NE
Atlanta,
Georgia 30324
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368,517
(8)
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**
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Ben
M. Palmer
Vice
President, Chief Financial Officer and Treasurer
2801
Buford Highway, Suite 520
Atlanta,
Georgia 30329
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295,716
(9)
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**
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All
Directors and Executive Officers as a group
(10
persons)
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70,565,349
(10)
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71.2
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__________________________________
**
Less than one percent
(1)
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Except
as otherwise noted, the nature of the beneficial ownership for all shares
is sole voting and investment power.
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(2)
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Includes
9,276 shares of the Company Common Stock held as Trustee, Guardian, or
Custodian for his children. Also includes 687,148 shares of
Company Common Stock in two trusts of which he is Co-Trustee and as to
which he shares voting and investment power. Also includes 57,537,985
shares of the Company Common Stock held by RFPS Management Company II,
L.P. of which RFA Management Company, LLC ("General Partner"), a
Georgia limited liability
company, is
the general partner. The voting interests of the General
Partner are held by two revocable trusts, one of which each of Mr. Gary W.
Rollins or Mr. R. Randall Rollins is the grantor and sole
trustee. LOR, Inc. is the manager of the General
Partner. Also includes 5,018,900 shares of the Company Common
Stock held by RFT Investment Company, LLC of which LOR, Inc. is the
manager. Mr.
R. Randall Rollins and Mr. Gary W. Rollins have voting control of LOR,
Inc. Included herein are 104,500 shares of restricted stock
awards for Company Common Stock. This also includes 103,240
shares of Company Common Stock held by his wife, as to which Mr. Rollins
disclaims any beneficial interest. Mr. Rollins is part of a
control group holding Company securities that includes Mr. Gary W.
Rollins, as disclosed on a Schedule 13D on file with the U.S. Securities
and Exchange Commission.
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(3)
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Includes
687,148 shares of the Company Common Stock in two trusts of which he is
Co-Trustee and as to which he shares voting and investment
power. Also includes 203,886 shares of Company Common Stock
held as Trustee, Guardian or Custodian for his children. Also
includes 57,537,985 shares of the Company Common Stock held by RFPS
Management Company II, L.P. of which RFA Management Company, LLC ("General
Partner"), a Georgia limited liability
company, is
the general partner. The voting interests of the General
Partner are held by two revocable trusts, one of which each of Mr. Gary W.
Rollins or Mr. R. Randall Rollins is the grantor and sole
trustee. LOR, Inc. is the manager of the General
Partner. Also includes 5,018,900 shares of the Company Common
Stock held by RFT Investment Company, LLC of which LOR, Inc. is the
manager. Mr.
R. Randall Rollins and Mr. Gary W. Rollins have voting control of LOR,
Inc. This also includes 202,513 shares of the Company Common
Stock held by his wife, as to which Mr. Rollins disclaims any beneficial
interest. Mr. Rollins is part of a control group holding
Company securities that includes Mr. R. Randall Rollins, as disclosed on a
Schedule 13D on file with the U.S. Securities and Exchange
Commission.
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(4)
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Per
Schedule 13G filed with the Securities and Exchange Commission (“SEC”) on
January 31, 2008.
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(5)
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Per
Schedule 13D filed with the SEC on February 11, 2008.
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(6)
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Per
Schedule 13F filed with the SEC on February 13, 2008.
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(7)
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Includes
426,792 shares of Company Common Stock subject to options that are
currently exercisable or that become exercisable within 60 days of
February 29, 2008, and 179,425 shares of restricted stock awards for
Company Common Stock.
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(8)
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Includes
63,391 shares of Company Common Stock subject to options that are
currently exercisable or that become exercisable within 60 days of
February 29, 2008, and 36,250 shares of restricted stock awards for
Company Common Stock.
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(9)
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Includes
10,125 shares of Company Common Stock subject to options that are
currently exercisable or that become exercisable within 60 days of
February 29, 2008, and 127,500 shares of restricted stock awards for
Company Common Stock.
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(10)
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Shares
held in trusts as to which more than one officer and/or director are
Co-Trustees or entities in which there is common ownership have been
included only once. Includes an aggregate of 500,308 shares of
Company Common Stock that may be purchased by four executive officers upon
exercise of options that are currently exercisable or that become
exercisable within 60 days of February 29, 2008, and 447,675 shares of
restricted stock awards for Company Common Stock awarded and issued to
them pursuant to the Company's 1994 Employee Stock Incentive Plan and 2004
Stock Incentive Plan.
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ELECTION
OF DIRECTORS
At the
Annual Meeting, Messrs. R. Randall Rollins, Henry B. Tippie and James B.
Williams, will be nominated to serve as Class I directors. The
directors in each class serve for a term of three years. The director
nominees will serve in their respective class until their successors are elected
and qualified. Six other individuals serve as directors but are not
standing for re-election because their terms as directors extend past this
Annual Meeting pursuant to provisions of the Company's Bylaws that provide for
the election of directors for staggered terms, with each director serving a term
of three years. Unless authority is withheld, the proxy holders will
vote for the election of each nominee named below. Although
management does not contemplate the possibility, in the event any nominee is not
a candidate or is unable to serve as a director at the time of the election,
unless authority is withheld, the proxies will be voted for any nominee who
shall be designated by the present Board of Directors and recommended by the
Nominating and Governance Committee, to fill such vacancy.
The name
and age of the director nominees, their principal occupations, together with the
number of shares of Common Stock beneficially owned, directly or indirectly, by
each and the percentage of outstanding shares that ownership represents, all as
of the close of business on February 29, 2008 (according to information received
by the Company) are set out below. Similar information is also
provided for those directors whose terms expire in future years.
Names
of Directors
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Principal
Occupation (1)
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Service
as
Director
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Age
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Shares
of
Common
Stock
(2)
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Percent
of
Outstanding
Shares
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Names
of Director Nominees
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Class I (Current Term
Expires 2008, New Term Will Expire 2011)
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R.
Randall Rollins (3)
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Chairman
of the Board of the Company since April 2003; Chairman of the Board and
Chief Executive Officer of the Company prior to April 2003; Chairman of
the Board of Marine Products Corporation (boat manufacturing); Chairman of
the Board of Rollins, Inc. (consumer services).
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1984
to date
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76
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64,599,898
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(4)
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65.2
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Henry
B. Tippie
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Presiding
Director of the Company; Chairman of the Board and Chief Executive Officer
of Tippie Services, Inc. (management services); Chairman of the Board of
Dover Downs Gaming and Entertainment, Inc. (operator of multi-purpose
gaming and entertainment complex) and Chairman of the Board of Dover
Motorsports, Inc. (operator of motor racing tracks).
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1984
to date
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81
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908,752
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(5)
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**
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James
B. Williams
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Chairman
of the Executive Committee, SunTrust Banks, Inc. (bank holding company)
from 1998 to
April 2004.
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1984
to date
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75
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135,000
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**
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Names of Directors
Whose Terms Have Not Expired
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Class II (Term Expires
2009)
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Richard
A. Hubbell
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President
and Chief Executive Officer of the Company since April 2003; President and
Chief Operating Officer of the Company prior to April 2003; President and
Chief Executive Officer of Marine Products Corporation (boat
manufacturing).
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1987
to date
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63
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1,351,077
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(6)
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1.4
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Linda
H. Graham
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Vice
President and Secretary of the Company; Vice President and Secretary of
Marine Products Corporation (boat manufacturing).
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2001
to date
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71
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368,517
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(7)
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**
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Bill
J. Dismuke
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Retired
President of Edwards Baking Company (manufacturer of pies and pie
parts).
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January
25, 2005
to
date
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71
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3,375
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**
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Names
of Directors
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Principal
Occupation (1)
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Service
as
Director
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Age
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Shares
of
Common
Stock
(2)
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Percent
of
Outstanding
Shares
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Class III (Term
Expires 2010)
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Wilton
Looney
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Honorary
Chairman of the Board, Genuine Parts Company (automotive parts
distributor).
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1984
to date
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88
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4,050
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**
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Gary
W. Rollins (3)
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President
and Chief Executive Officer of Rollins, Inc. (consumer
services).
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1984
to date
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63
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65,929,508
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(8)
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66.6
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James
A. Lane, Jr.
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Executive
Vice President of Marine Products Corporation (boat manufacturing) and
President of Chaparral Boats, Inc.
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1987
to date
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65
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277,480
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**
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_____________________
** less
than one percent
(1)
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Unless
otherwise noted, each of the directors has held the positions of
responsibility set out in this column (but not necessarily his or her
present title) for more than five years. In addition to the
directorships listed in this column, the following individuals also serve
on the Boards of Directors of the following companies: James B.
Williams: The Coca-Cola Company; R. Randall
Rollins: Dover Downs Gaming and Entertainment, Inc. and Dover
Motorsports, Inc.; Gary W. Rollins: Genuine Parts Company and Emory
University; All of the directors shown in the above table are
also directors of Marine Products Corporation
(“Marine Products” or “MPC”) and with the exception of Messrs. Hubbell and
Lane and Ms. Graham are also directors of Rollins, Inc.
(“Rollins”).
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(2)
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Except
as otherwise noted, the nature of the beneficial ownership for all shares
is sole voting and investment power.
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(3)
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R.
Randall Rollins and Gary W. Rollins are brothers.
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(4)
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See
information contained in footnote (2) to the table appearing in Capital
Stock section.
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(5)
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Includes
63,990 shares held in trusts of which he is a Trustee or Co-Trustee and as
to which he shares voting and investment power. Also includes
shares held by a wholly owned corporation that owns 1,012
shares.
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(6)
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See
information contained in footnote (7) to the table appearing in Capital
Stock section.
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(7)
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See
information contained in footnote (8) to the table appearing in Capital
Stock section.
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(8)
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See
information contained in footnote (3) to the table appearing in Capital
Stock section.
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Our
Board of Directors recommends a vote FOR the nominees listed.
CORPORATE
GOVERNANCE AND BOARD OF DIRECTORS COMMITTEES AND MEETINGS
Board
Meetings and Compensation
The Board
of Directors met five times during the fiscal year ended December 31,
2007. No director attended fewer than 75 percent of the aggregate of
all Board meetings and meetings of committees on which he or she served during
2007. Board members are encouraged to attend the Company’s Annual
Stockholder Meetings and all Board members were in attendance at last year's
meeting.
The Board
of Directors has an Audit Committee, a Compensation Committee and a Nominating
and Governance Committee.
Audit
Committee
The Audit
Committee of the Board of Directors of the Company consists of Henry B. Tippie
(Chairman), Wilton Looney, Bill J. Dismuke and James B. Williams. The
Audit Committee held five meetings during the fiscal year ended December 31,
2007. The Board of Directors has determined that all of the Audit
Committee members are independent as that term is defined by the rules of the
Securities and Exchange Commission (“SEC”) and the New York Stock Exchange
(“NYSE”). The Board of Directors has also determined that all
of the Audit Committee members are “Audit Committee Financial Experts” as
defined in the SEC rules. Additionally, the Board of Directors
has determined that the simultaneous service by Mr. James B. Williams on
the Audit Committees of three other publicly traded companies does not impair
his ability to effectively serve on the Audit Committee of RPC. The Audit
Committee meets with the Company’s independent registered public accountants,
internal auditor, Chief Executive Officer and Chief Financial Officer to review
the scope and results of audits and recommendations made with respect to
controls over financial reporting and specific accounting and financial
reporting issues. The Audit Committee has the authority to obtain
advice and assistance from, and receive appropriate funding from the Company
for, outside legal, accounting or other advisors as it deems necessary to carry
out its duties. The Audit Committee charter is available on the
Company’s website at www.rpc.net under the
Governance section. A written copy of the charter can be obtained
free of charge by writing to The Secretary, RPC, Inc., 2170 Piedmont Road NE,
Atlanta, Georgia 30324.
Compensation
Committee
The
Compensation Committee of the Board of Directors of the Company consists of
Henry B. Tippie (Chairman), Wilton Looney, and James B. Williams. It
held two meetings during the fiscal year ended December 31, 2007. The function
of the Compensation Committee is to set the base salary and cash based incentive
compensation of all of the executive officers. The Compensation Committee also
administers the RPC, Inc. Stock Incentive Plans. The Compensation
Committee does not have a formal charter, and is not required to have one under
the “controlled company” exemption under the NYSE rules, as described in the
section titled “Director Independence and NYSE Requirements” below.
Nominating
and Governance Committee
The
Nominating and Governance Committee of the Board of Directors of the Company
consists of Henry B. Tippie (Chairman), Wilton Looney, and James B. Williams,
each of whom is independent, as discussed more fully under “Director
Independence and NYSE Requirements.” The Committee was formed in 2002
pursuant to a resolution passed by the Board of Directors for the following
purposes:
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to
recommend to the Board of Directors nominees for director and to consider
any nominations properly made by a stockholder;
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upon
request of the Board of Directors, to review and report to the Board with
regard to matters of corporate governance; and
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·
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to
make recommendations to the Board of Directors regarding the agenda for
Annual Stockholders’ Meetings and with respect to appropriate action to be
taken in response to any stockholder
proposals.
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The
Nominating and Governance Committee held one meeting during the fiscal year
ended December 31, 2007.
Director
Nominations
Under
Delaware law, there are no statutory criteria or qualifications for
directors. No criteria or qualifications have been prescribed by the
Board at this time. The Nominating and Governance Committee does not
have a charter or a formal policy with regard to the consideration of director
candidates. However, it acts under the guidance of the Corporate
Governance Guidelines approved by the Board of Directors and posted on the
Company’s website at www.rpc.net under the
Governance section. A written copy of the Corporate Governance
Guidelines can be obtained free of charge by writing to the Secretary, RPC,
Inc., 2170 Piedmont Road NE, Atlanta, Georgia 30324. The Board
believes that it should preserve maximum flexibility in order to select
directors with sound judgment and other desirable
qualities. According to the Company’s Corporate Governance
Guidelines, the Board of Directors will be responsible for selecting nominees
for election to the Board of Directors. The Board delegates the
screening process to the Nominating and Governance Committee. This
Committee is responsible for determining the appropriate skills and
characteristics required of Board members in the context of the then current
make-up of the Board. This determination takes into account all
factors which the Committee considers appropriate, such as independence,
experience, strength of character, mature judgment, technical skills, diversity,
age and the extent to which the individual would fill a present need on the
Board. The Company’s Bylaws provide that nominations for the election
of directors may be made by any stockholder entitled to vote for the election of
directors. Nominations must comply with an advance notice procedure which
generally requires, with respect to nominations for directors for election at an
annual meeting, that written notice be addressed to: Secretary, RPC,
Inc., 2170 Piedmont Road, NE, Atlanta, Georgia 30324, not less than ninety days
prior to the anniversary of the prior year's annual meeting and set forth the
name, age, business address and, if known, residence address of the nominee
proposed in the notice, the principal occupation or employment of the nominee
for the past five years, the class or series and number of shares of capital
stock of the Company which are owned beneficially or of record by the person and
any other information relating to the person that would be required to be
disclosed in a proxy statement or other filings. Other requirements related
to the notice are contained in the Company’s Bylaws. The Committee
will consider nominations from stockholders who satisfy these
requirements. The Committee is responsible for screening the nominees
that are selected by the Board of Directors for nomination to the Board and for
service on committees of the Board. To date, the Company has not
received a recommendation for a director nominee from a
stockholder. All of the nominees for directors being voted upon at
the Annual Meeting to be held on April 22, 2008 are directors standing for
re-election.
Director
Independence and NYSE Requirements
Controlled Company
Exemption
The
Company is not required by law or NYSE listing requirements to have a Nominating
or Compensation Committee composed of independent directors, nor to have a Board
of Directors, the majority of which are independent. Because the
Company is a “controlled corporation,” as defined by NYSE Rule 303A.00, the
Company is exempt from NYSE Rules 303A.01, 303A.04 and 303A.05 and does not
undertake compliance with those provisions. The Company is a
“controlled corporation” because a group that includes the Company’s Chairman of
the Board, R. Randall Rollins, his brother Gary W. Rollins who is also a
director and certain companies under their control, possesses in excess of fifty
percent of the Company’s voting power.
The
Company’s Audit Committee is composed of four “independent” directors as defined
by the Company’s Corporate Governance Guidelines, the NYSE rules, the Exchange
Act, SEC regulations there under, and the Company’s Audit Committee
Charter. All of the members of the Compensation and Nominating and
Governance Committees are also independent directors. The independent
directors of the Company are Henry B. Tippie, Wilton Looney, James B. Williams
and Bill J. Dismuke.
Independence
Guidelines
Under
NYSE listing standards, to be considered independent, a director must be
determined to have no material relationship with the Company other than as a
director. The NYSE standards set forth a nonexclusive list of
relationships which are conclusively deemed material.
The
Company's Independence Guidelines (Appendix A to the Company’s Corporate
Governance Guidelines) are posted on the Company’s website at www.rpc.net under the
Governance section. These independence guidelines provide that
to be independent, a director must not have any relationship that would be
considered material under NYSE standards and that except in special
circumstances as determined by a majority of the Board, the following
relationships are not material:
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(i)
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If
the director, or a member of the director’s immediate family, has received
less than one hundred thousand dollars (US $100,000) in direct
compensation from the Company (other than director and committee fees and
compensation for prior service which are not contingent in any way on
continued services) during every 12 month period within the past three (3)
years;
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(ii)
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If
the director is a director or officer, or any member of the director’s
immediate family is a director or officer of a bank to which the Company
is indebted, and the total amount of the indebtedness does not exceed one
percent (1%) of the total assets of the bank for any of the past three (3)
years;
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(iii)
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If
the director or any member of the director’s immediate family is an
employee of a charitable or educational organization, and donations by the
Company do not exceed the greater of one million dollars (US $1,000,000)
or two percent (2%) of the organization’s consolidated gross revenues
within the preceding three (3) years;
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(iv)
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If
the director has a relationship with the Company of a type covered by item
404(a) and/or item 407 of the Securities and Exchange Commission’s
Regulation S-K (or any successor regulation), and that relationship need
not, according to the terms of those items and any then- current proxy
regulations, be disclosed in the Company’s annual Proxy Statement (except
for relationships described elsewhere in the Company’s guidelines in which
case the other guidelines will govern);
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(v)
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If
the director, or a member of the director’s immediate family, has direct
or beneficial ownership (as defined by Rule 13d-3 under the Exchange Act)
of any amount of any class of common stock of the
Company.
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Audit Committee
Charter
Under the
Company’s Audit Committee Charter, in accordance with NYSE listing requirements
and the Securities Exchange Act of 1934, all members of the Audit Committee must
be independent of management and the Company. A member of the Audit Committee is
considered independent as long as he or she (i) does not accept any consulting,
advisory, or compensatory fee from the Company, other than as a director or
committee member; (ii) is not an affiliated person of the Company or its
subsidiaries; and (iii) otherwise meets the independence requirements of the
NYSE and the Company’s Corporate Governance Guidelines.
Nonmaterial
Relationships
After
reviewing all of the relationships between the members of the Audit Committee
and the Company, the Board of Directors determined that none of the members of
the Audit Committee had any relationships not included within the categorical
standards set forth in the Independence Guidelines and disclosed above except as
follows:
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1.
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Mr.
Tippie was employed by Rollins from 1953 to 1970, and held several offices
with that company during that time, including as Executive Vice President
– Finance, Secretary, Treasurer and Chief Financial
Officer. Messrs. Randall and Gary Rollins are directors and
executive officers of Rollins and are part of a group that has voting
control of Rollins.
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2.
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Mr.
Tippie is Chairman of the Board of Directors of Dover Motorsports, Inc.
and Dover Downs Gaming and Entertainment, Inc. Mr. Randall Rollins is also
a director of these companies.
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3.
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Mr.
Tippie is the trustee of the O. Wayne Rollins Foundation and of the
Rollins Children’s Trust. O. Wayne Rollins is the father of
Gary and Randall Rollins. The beneficiaries of the Rollins
Children’s Trust include the immediate family members of Randall and Gary
Rollins.
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4.
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Each
of Messrs. Dismuke, Looney, Tippie and Williams also serve on the Boards
of Rollins and Marine Products, of which Messrs. Gary and Randall Rollins
are directors, and voting control over which is held by a control group of
which Messrs. Randall and Gary Rollins are a part. Mr. Randall Rollins is
an executive officer of Marine
Products.
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As
required by the Independence Guidelines, the Board of Directors unanimously
concluded that the above-listed relationships would not affect the independent
judgment of the independent directors, based on their experience, character and
independent means, and therefore do not preclude an independence
determination. All of the members are also independent under the
heightened standards required for Audit Committee members.
In
accordance with the NYSE corporate governance listing standards, Mr. Henry B.
Tippie was elected as the Presiding Director. The Company’s
non-management directors meet at regularly scheduled executive sessions without
management. Mr. Tippie presides during these executive
sessions.
Corporate
Governance Guidelines
We have
adopted Corporate Governance Guidelines to promote better understanding of our
policies and procedures. At least annually, the Board reviews these
guidelines. As required by the rules of the New York Stock Exchange,
our Corporate Governance Guidelines require that our non-management directors
meet in at least two regularly scheduled executive sessions per year without
management.
At the
Company’s website at www.rpc.net, under
the Governance section, you may access a copy of our Corporate Governance
Guidelines, our Audit Committee Charter, our Code of Business Conduct and our
Code of Business Conduct and Ethics for Directors and Executive Officers and
Related Party Transactions. Copies are also available in print,
without charge, to any shareholder who requests one by writing to: The
Secretary, RPC, Inc., 2170 Piedmont Road NE, Atlanta, Georgia
30324.
Code
of Business Conduct
The
Company has adopted a Code of Business Conduct applicable to all directors,
officers and employees generally, as well as a Code of Business Conduct and
Ethics for Directors and Executive Officers and Related Party Transaction Policy
applicable to the principal executive officer, principal financial officer, and
directors. Both codes are available on the Company’s website at www.rpc.net under the
Governance section. Copies are also available in print, without
charge, to any shareholder who requests one by writing to: The Secretary, RPC,
Inc., 2170 Piedmont Road NE, Atlanta, Georgia 30324.
Director
Communications
The
Company also has a process for interested parties, including stockholders, to
send communications to the Board of Directors, Presiding Director, any of the
Board Committees or the non-management directors as a group. Such
communications should be addressed as follows:
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Mr.
Henry B. Tippie
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c/o
Internal Audit Department
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RPC,
Inc.
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2801
Buford Highway, Suite 520
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Atlanta,
Georgia 30329.
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The above
instructions for communications with the directors are also posted on our
website at www.rpc.net under the
Governance section. All communications received from interested
parties are forwarded to the Board of Directors. Any communication
addressed solely to the Presiding Director or the non-management directors will
be forwarded directly to the appropriate addressee(s).
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of
the directors named above who serve on the Company's Compensation Committee are
or have ever been employees of the Company. There are no Compensation
Committee interlocks requiring disclosure.
DIRECTOR
COMPENSATION
The
following table sets forth compensation to the Company’s directors for services
rendered as a director. Three of the directors, Messrs. R. Randall
Rollins, Richard A. Hubbell and Ms. Linda H. Graham are employees of the
Company. Their compensation is set forth in the Summary Compensation
Table under Executive Compensation. The directors listed below have
never been employed by the Company or paid a salary or bonus by the Company;
have never been granted any options or other stock-based awards, and do not
participate in any Company sponsored retirement plans, with the exception of Mr.
James A. Lane, Jr. who was an employee of the Company until the spin-off of
Marine Products in 2001.
Name
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Fees
Earned or
Paid
in Cash
($)
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Stock
Awards(1)
($)
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Option
Awards(1)
($)
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Total
($)
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Henry
B. Tippie
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78,500
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––
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––
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78,500
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James
B. Williams
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41,500
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––
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––
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41,500
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Wilton
Looney
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41,500
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––
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––
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41,500
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Bill
J. Dismuke
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36,500
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––
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––
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36,500
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Gary
W. Rollins
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26,250
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––
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––
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26,250
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James
A. Lane, Jr.
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27,500
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––
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––
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27,500
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(1)
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Directors
are eligible for grants of stock awards under the Company’s 2004 Stock
Incentive Plan (“SIP”). No stock awards have been granted to
the non-management directors under the 2004
SIP.
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Directors
that are our employees do not receive additional compensation for services
rendered as a director. During 2007, the Company paid the following
cash fees to non-employee directors.
Annual
retainer
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$ |
20,000 |
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Audit
Committee Chair Additional Annual Retainer
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$ |
14,000 |
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Compensation
Committee Chair Additional Annual Retainer
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$ |
8,000 |
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Nominating
and Corporate Governance Committee Chair Additional Annual
Retainer
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$ |
5,000 |
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Diversity
Committee Chair Additional Annual Retainer
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$ |
5,000 |
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In
Person Board Meetings
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$ |
1,250 |
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In
Person Committee Meeting
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$ |
1,250 |
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Telephonic
Board Meeting
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$ |
1,250 |
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In
Person Audit Committee Meeting
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$ |
2,250 |
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Telephonic
Audit Committee Meeting
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$ |
1,250 |
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Pre-Board
Meeting
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$ |
1,250 |
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Under
current compensation arrangements effective January 1, 2008, non-management
directors each receive an annual retainer fee of $24,000. In addition, the
Chairman of the Audit Committee receives an annual retainer of $16,000, the
Chairman of the Compensation Committee receives an annual retainer of $9,000,
and the Chairman of each of the Nominating and Governance Committee and
Diversity Committee receives an annual retainer of $6,000. A director
that chairs more than one committee receives a retainer with respect to each
committee he chairs. All of the retainers are paid on a quarterly
basis. Per meeting fees for non-management directors are as
follows:
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·
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For
meetings of the Board of Directors, Compensation Committee, Nominating and
Governance Committee and Diversity Committee, $1,500 and telephonic
meetings of the Audit Committee, $1,250.
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For
in person meetings of the Audit Committee, $2,500. In addition,
the Chairman of the Audit Committee receives an additional $1,500 for
pre-board meetings.
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All
non-management directors are also entitled to reimbursement of expenses for all
services as a director, including committee participation or special
assignments.
Notwithstanding
anything to the contrary set forth in any of the Company’s previous filings
under the Securities Act of 1933 or the Securities Exchange Act of 1934, that
might incorporate future filings, including the Proxy Statement, in whole or in
part, the Report of the Audit Committee shall not be incorporated by reference
into any such filings.
REPORT
OF THE AUDIT COMMITTEE
Management
is responsible for the Company’s internal controls, assessing the effectiveness
of these controls and the financial reporting process. The Company’s
independent registered public accounting firm is responsible for performing
independent audits of the Company’s consolidated financial statements and the
effectiveness of the Company’s internal control over financial reporting in
accordance with the standards of the Public Company Accounting Oversight Board
(United States) and for issuing reports thereon. The Audit
Committee’s responsibility is generally to monitor and oversee these processes,
as described in the Audit Committee Charter. It is not the duty of
the Audit Committee to plan or conduct audits or to determine that the Company’s
financial statements are complete and accurate and in accordance with generally
accepted accounting principles; that is the responsibility of
management.
In
fulfilling its oversight responsibilities with respect to the year ended
December 31, 2007, the Audit Committee:
·
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Approved
the terms of engagement of Grant Thornton LLP as the Company’s independent
registered public accounting firm for the year ended December 31,
2007;
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·
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Reviewed
with management the interim financial information included in the Forms
10-Q prior to their being filed with the SEC. In addition, the
Committee reviewed all earnings releases with management and independent
public accountants prior to their release;
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·
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Reviewed
and discussed with the Company’s management and the independent registered
public accounting firm the audited consolidated financial statements of
the Company as of December 31, 2007 and 2006 and for the three years ended
December 31, 2007;
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·
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Reviewed
and discussed with the Company’s management and the independent registered
public accounting firm, management’s assessment that the Company
maintained effective control over financial reporting as of December 31,
2007;
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·
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Discussed
with the independent registered public accounting firm matters required to
be discussed by
the American Institute of Certified Public Accountants Statement on
Auditing Standards (“SAS”) No. 61, “Communications with Audit Committees,”
as amended by SAS 90, “Audit Committee Communications,” the rules of the
Securities and Exchange Commission and the standards of the Public Company
Accounting Oversight Board (United States); and
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·
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Received
from the independent registered public accounting firm the written
disclosures and the letter required by Independence Standards Board
Standard No. 1, “Independence Discussions with Audit Committees,” as
amended, as adopted by the Public Company Accounting Oversight Board, and
discussed the registered public accounting firm’s independence from the
Company.
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Based
upon the review and discussions referred to above, the Committee recommended to
the Board of Directors that the audited consolidated financial statements of the
Company and subsidiaries as of December 31, 2007 and 2006 and for the three
years ended December 31, 2007 be included in the Company’s Annual Report on Form
10-K for the year ended December 31, 2007 and for filing with the Securities and
Exchange Commission.
In giving
its recommendation to the Board of Directors, the Audit Committee has relied on
(i) management’s representation that such financial statements have been
prepared with integrity and objectivity and in conformity with accounting
principles generally accepted in the United States of America and (ii) the
report of the Company’s independent registered public accounting firm with
respect to such financial statements.
Submitted by the Audit Committee of the
Board of Directors.
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Henry
B. Tippie, Chairman
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Wilton
Looney
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James
B. Williams
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Bill
J. Dismuke
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COMPENSATION
DISCUSSION AND ANALYSIS
Compensation
Committee
During
the fiscal year ended December 31, 2007, the members of our Compensation
Committee held primary responsibility for determining executive compensation
levels. The Committee is composed of three of our non-management
directors who do not participate in the Company’s compensation
plans. The Committee determines the compensation and administers the
performance-based cash compensation plan for our executive
officers. In addition, the Committee also administers our Stock
Incentive Plan for all the employees.
The
members of our Compensation Committee have extensive and varied experience with
various public and private corporations - as investors and stockholders, as
senior executives, and as directors charged with the oversight of management and
the setting of executive compensation levels. Henry B. Tippie, the
Chairman of the Compensation Committee, has served on the board of directors of
twelve different publicly traded companies and has been involved in setting
executive compensation levels at all of these companies. Messrs.
Wilton Looney and James B. Williams have served on the board of directors of
several different publicly traded companies and have similarly been involved in
setting executive compensation levels at many of these companies.
The
Compensation Committee has authority to engage attorneys, accountants and
consultants, including executive compensation consultants, to solicit input from
management concerning compensation matters, and to delegate any of its
responsibilities to one or more directors or members of management where it
deems such delegation appropriate and permitted under applicable
law. The Committee has not used the services of any compensation
consultants in determining or recommending the amount or form of executive
compensation.
The
Compensation Committee believes that determinations relative to executive
compensation levels are best left to the discretion of the
Committee. In addition to the extensive experience and expertise of
the Committee’s members and their familiarity with the Company’s performance and
the performance of our executive officers, the Committee is able to draw on the
experience of other Directors and on various legal and accounting executives
employed by the Company, and the Committee has access to the wealth of readily
available public information relative to structuring executive compensation
programs and setting appropriate compensation levels. The Committee
also believes that the structure of our executive compensation programs should
not become overly complicated or difficult to understand. The
Committee solicits input from our Chairman with respect to the performance of
our executive officers and their compensation levels.
General
Compensation Objectives and Guidelines
The
Company is engaged in a highly competitive industry. The success of
the Company depends on its ability to attract and retain highly qualified and
motivated executives. In order to accomplish this objective, the
Company structures the executive compensation in a fashion that takes into
account the Company’s overall performance and the individual performance of the
executive.
The
Compensation Committee endorses the philosophy that executive compensation
should reflect Company performance and the contribution of executive officers to
that performance. The Company’s compensation policy is designed to
reward growth in revenues, net income and increase in shareholder
value. The Committee recognizes that there are many intangibles
involved in evaluating performance and in motivating performance, and that
determining an appropriate compensation level is a highly subjective
endeavor. The analysis of the Committee is not based upon a
structured formula and the objectives referred to above are not weighted in any
formal manner.
The
Company’s executive officers are also executive officers of Marine Products and
receive compensation directly from Marine Products. The members of
the Company’s Compensation Committee also constitute the Compensation Committee
of Marine Products. In determining the compensation for the executive
officers at the Company, the Committee considers the dual responsibilities and
sources of compensation. The Company sets compensation of its
executives at such levels so that the aggregate compensation received from both
Marine Products and the Company is reasonable in light of their respective
responsibilities and the performance of both companies, and the compensation
from the Company for services solely to the Company is reasonable. A
discussion of the Company’s executive officers’ compensation at Marine Products
is contained in its annual Proxy Statement filed with the SEC.
Pursuant
to the Company’s compensation philosophy, the total annual compensation of its
executive officers is primarily made up of base salary, performance-based
incentive cash compensation and stock-based incentive
compensation. In addition, the Company provides retirement
compensation plans, group welfare benefits and certain perquisites.
We
believe a competitive base salary is important to attract, retain and motivate
top executives. We believe a performance-based incentive cash
compensation plan is valuable in recognizing and rewarding individual
achievement. Finally, we believe stock-based incentives make
executives “think like owners” and, therefore, align their interests with those
of our stockholders.
The
Company does not have any formal stock ownership requirements for its executive
officers but notes that its directors and executive officers are stockholders of
the Company, as is disclosed elsewhere in this Proxy Statement. The
Company is mindful of the stock ownership of our directors and executive
officers but does not believe that it is appropriate to provide a mechanism or
formula to take stock ownership (or gains from prior option or stock awards)
into account when setting compensation levels. The Company provides in its
insider trading policies that directors and executive officers may not sell
Company securities short and may not sell puts, calls or other derivative
securities tied to our Common Stock.
The
Company does not have a formal policy relative to the adjustment or recovery of
incentives or awards in the event that the performance measures upon which
incentives or awards were based are later restated or otherwise adjusted in a
manner that would have reduced the size of an incentive or
award. However, as all incentives and awards remain within the
discretion of the Compensation Committee, the Committee retains the ability to
take any such restatements or adjustments into account in subsequent
years. In addition, the Sarbanes-Oxley Act requires in the case of
accounting restatements that result from material non-compliance with SEC
financial reporting requirements, that Chief Executive Officers and Chief
Financial Officers must disgorge bonuses and other incentive-based compensation
and profits on stock sales, if the non-compliance results from
misconduct.
Base
Salary
The
salary of each executive officer is determined by the Compensation
Committee. In making its determinations, the Committee gives
consideration to the recent financial performance of the Company, the magnitude
of responsibilities, the scope of the position, individual performance and
compensation paid by Marine Products. The Committee solicits input
from our Chairman with respect to the performance of our executive officers and
their compensation levels. During 2007, the base salaries of our
executive officers were increased to the following amounts: Mr.
Richard A. Hubbell: $600,000 ($100,000 increase from 2006); Mr. Ben M. Palmer:
$200,000 ($25,000 increase from 2006); Mr. R. Randall Rollins: $500,000
($100,000 increase from 2006); and Ms. Linda H. Graham: $150,000 ($15,000
increase from 2006). These increases were subjectively based on
growth in revenues, recent profit performance of the Company and return on
invested capital. On January 22, 2008, the Committee approved for its
executive officers the following base salary for 2008: Mr. Richard A. Hubbell:
$700,000; Mr. Ben M. Palmer: $250,000; Mr. R. Randall Rollins: $600,000; and Ms.
Linda H. Graham: $165,000.
Performance-Based
Incentive Cash Compensation
The
Company implemented the Performance-Based Incentive Cash Compensation Plan (the
“Management Incentive Plan”) for the executive officers in
2006. Under the Management Incentive Plan, the Compensation Committee
establishes performance goals annually within ninety days after the commencement
of the performance period to which such goals relate. Performance
goals for each participant may be based on corporate, business unit/function or
individual performance, or a combination of one or more such
measures.
In
connection with the annual establishment of performance goals, the Compensation
Committee sets a target award for each participant in the Management Incentive
Plan for the applicable year, which is expressed as a percentage of the
participant’s base compensation (the “Target Award”) in effect on the last day
of the final pay period of that year. If the
participant’s performance goals are based upon a combination of performance
measures, the Compensation Committee will weigh the importance of each
performance measure by assigning a percentage (the “Weighted Percentage”) to
those performance measures. The participant’s cash
award amount will also depend in part upon the level of
achievement that the participant attained with respect to each such performance
measure utilizing the formula set out in the Management Incentive Plan. This
formula provides for a performance value (“Performance Value”) which ranges
from:
|
·
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threshold
performance level (with a performance value of 25 percent of the Target
Award),
|
|
·
|
target
performance level (with a performance value up to 100 percent of the
Target Award), to
|
|
·
|
superior
performance level (with a performance value up to 200 percent of the
Target Award).
|
Subject
to the limitations set forth in the next sentence, a participant’s cash award
amount for each year under the Management Incentive Plan equals the product of
the Target Award multiplied by the Weighted Percentage assigned to each
performance measure used for a participant, multiplied by the Performance Value
attained for each performance measure, multiplied by base compensation. The Committee will determine
the maximum cash award as a percentage of participants’ base compensation for
each applicable year.
For 2007,
the Compensation Committee established the target incentive award under the
Management Incentive Plan for the Chief Executive Officer and for the other
members of executive management at the amounts shown in the table
below. The target awards that could be earned under the Management
Incentive Plan for 2007 are the same as for the prior year.
Executive
Officer
|
|
Target
Award as a percentage
of
base salary
|
Richard
A. Hubbell
President
and Chief Executive Officer
|
|
100%
|
Ben
M. Palmer
Vice
President, Chief Financial Officer and Treasurer
|
|
80%
|
R.
Randall Rollins
Chairman
of the Board
|
|
100%
|
Linda
H. Graham
Vice
President and Secretary
|
|
40%
|
The
maximum bonus award for each participant under the Plan for 2007 was established
at 150 percent of such participant's base salary. The performance criteria
applicable to the participants under the Management Incentive Plan for 2007 were
determined based solely on corporate performance. The Compensation
Committee established corporate performance goals for 2007 under the Management
Incentive Plan based on return on invested capital, with specific goals
established by a review of peer groups and prior year results. Return
on invested capital is a widely used performance measure that typically
correlates with long-term changes in shareholder value. The Company
uses return on invested capital for internal measurement and chose to formalize
it as a computation for the Management Incentive Plan. The target
performance was established at a level that was difficult to achieve but not
extraordinarily so.
For 2007,
the Named Executive Officers earned awards that were higher than target but
lower than the superior performance level which qualified the officers to
receive bonus awards up to 163 percent of the target incentive award, limited in
2007 to 150 percent of base compensation. Performance-based cash
compensation earned under the Management Incentive Plan for 2007 was as follows:
Mr. Richard A. Hubbell: $900,000; Mr. Ben M. Palmer: $260,000; Mr. R. Randall
Rollins: $750,000; and Ms. Linda H. Graham $97,500. For 2008, the
Compensation Committee has increased the Target Award of Mr. Ben M. Palmer, Vice
President, Chief Financial Officer and Treasurer to 100 percent. The
target awards of the other members of executive management, performance criteria
and maximum awards were established at the same levels as 2007.
Stock
Based Incentive Plans
Our Stock
Incentive Plan allows for a wide variety of stock based awards such as stock
options and restricted stock. We last issued stock options in fiscal year ended
2003 and have no current plans to issue additional stock options. We
have never issued any stock appreciation rights. Partially in
response to changes relative to the manner in which stock options are accounted
for under generally accepted accounting principles, we have modified the
structure and composition of the long-term equity based component of our
executive compensation. In recent years, we have awarded time-based
restricted stock in lieu of granting stock options. The terms and
conditions of these awards are described in more detail below.
Awards
under the Company’s Stock Incentive Plan are purely discretionary, are not based
upon any specific formula and may or may not be granted in any given fiscal
year. For the past three years, we have granted time-based restricted
stock to various employees, including our executive officers, in early January
during our regularly scheduled meetings of the Compensation Committee during
which the Committee reviews executive compensation. Consistent with this
practice, we granted restricted stock awards to our executive officers in
January 2007 and January 2008 in amounts which are reasonably comparable to
grants made in prior years. The number of shares awarded was as
follows: Mr. Richard A. Hubbell: 20,000 shares in 2007 (20,000 shares
in 2008); Mr. Ben M. Palmer: 8,000 shares in 2007 (10,000 shares in 2008); Mr.
R. Randall Rollins: 20,000 shares in 2007 (20,000 shares in 2008); and Ms. Linda
H. Graham: 5,000 shares in 2007 (5,000 shares in 2008). When
considering the grant of stock based awards, the Committee gives consideration
to our overall performance and the performance of individual
employees. It is our expectation to continue yearly grants of
restricted stock awards although we reserve the right to modify or discontinue
this or any of our other compensation practices at any time.
All of
our restricted stock awards granted since 2004 have had the same
features. The shares vest one-fifth per year beginning on the second
anniversary of the grant date. Restricted shares have full voting and
dividend rights. However, until the shares vest, they cannot be sold,
transferred or pledged. Should the executive leave our employment for
any reason prior to the vesting dates (other than due to death, disability or
retirement on or after age 65), the unvested shares will be
forfeited. In the event of a “change in control” of the Company, the
Compensation Committee has the discretion to accelerate vesting of the
shares.
Employment
Agreements
There are
no agreements or understandings between the Company and any executive officer
which guarantee continued employment or guarantee any level of compensation,
including incentive or bonus payments, to the executive officer.
Retirement
Plans
The
Company maintains a defined benefit pension plan (called the Retirement Income
Plan) for all our eligible employees, a non-qualified supplemental retirement
plan for our executives and certain other highly compensated employees and a
401(k) Plan for the benefit of all regular full time employees. In 2002, the
Company's Board of Directors approved a resolution to cease all future benefit
accruals under the Retirement Income Plan effective March 31, 2002. In lieu
thereof, beginning in 2002, the Company began providing enhanced benefits in the
form of cash contributions on behalf of certain long-service employees who were
40 to 65 years of age on or before December 31, 2002. These enhanced
benefit contributions are discretionary and may be made annually, subject to a
participant’s continued employment, for a maximum of seven years. The
contributions are made either to the non-qualified Supplemental Retirement Plan
(“SRP”) or to the 401(k) Plan for each employee who is entitled to the enhanced
benefits. The Company contributed $26,262 towards enhanced benefits
for Mr. Hubbell in 2007. Beginning late in 2002, the Company began
permitting selected highly compensated employees to defer a portion of their
compensation into the SRP.
Other
Compensation
Other
compensation to our executives includes typical employee benefits such as group
medical, dental and vision coverage and group life insurance. The
Company provides an automobile (or an automobile allowance) to Messrs. Richard
A. Hubbell and Ben M. Palmer.
The
following Compensation Committee Report shall not be incorporated by reference
by any general statement incorporating by reference this Proxy Statement into
any filing under the Securities Act of 1933, as amended (the “Securities Act”),
except to the extent that the Company specifically incorporates this information
by reference, and shall not otherwise be deemed filed under the Securities Act
or the Exchange Act.
COMPENSATION
COMMITTEE REPORT
We have
reviewed and discussed the above “Compensation Discussion and Analysis” with
management.
Based
upon this review and discussion, we have recommended to the Board of Directors
that the “Compensation Discussion and Analysis” be included in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2007 and this Proxy
Statement.
Submitted by the Compensation
Committee of the Board of Directors.
|
Henry
B. Tippie, Chairman
|
|
Wilton
Looney
|
|
James
B. Williams
|
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The
Company has completed a review of Forms 3, 4, and 5 and amendments thereto
furnished to the Company by all directors, officers and greater than 10 percent
stockholders subject to the provisions of Section 16 of the Securities Exchange
Act of 1934, as amended. In addition, the Company has a written
representation from all directors, officers and greater than 10 percent
stockholders from whom no Form 5 was received indicating that no Form 5 filing
was required. Based solely on this review, the Company believes that filing
requirements of such persons under Section 16 for the fiscal year ended December
31, 2007 have been satisfied.
EXECUTIVE
COMPENSATION
Shown
below is information concerning the annual and long-term compensation for
services in all capacities to the Company for the calendar years ended December
31, 2007 and 2006 of those persons who were at December 31, 2007,
|
·
|
our
Principal Executive Officer and Principal Financial Officer;
and
|
|
·
|
our
two other executive officers of the
Company:
|
SUMMARY
COMPENSATION TABLE
Name and Principal
Position
|
Year
|
Salary
($)
|
Stock
Awards
($) (1)
|
Option
Awards
($) (1)
|
Non-Equity
Incentive
Plan
Compensation
(2)
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings ($) (3)
|
All Other
Compensation
($) (4)
|
Total
($)
|
Richard
A. Hubbell
|
2007
|
600,000
|
271,950
|
19,910
|
900,000
|
––
|
39,550
|
1,831,410
|
President
and
|
2006
|
500,000
|
217,770
|
41,290
|
750,000
|
102,950
|
37,780
|
1,649,790
|
Chief
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ben
M. Palmer
|
2007
|
200,000
|
163,560
|
11,950
|
260,000
|
––
|
16,970
|
652,480
|
Vice
President,
|
2006
|
175,000
|
150,130
|
18,360
|
262,500
|
9,880
|
16,250
|
632,120
|
Chief
Financial Officer and
|
|
|
|
|
|
|
|
|
Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R.
Randall Rollins
|
2007
|
500,000
|
212,250
|
79,650
|
750,000
|
––
|
––
|
1,541,900
|
Chairman
of the Board
|
2006
|
400,000
|
148,300
|
79,650
|
600,000
|
––
|
––
|
1,227,950
|
|
|
|
|
|
|
|
|
|
Linda
H. Graham
|
2007
|
150,000
|
76,200
|
7,970
|
97,500
|
––
|
4,990
|
336,660
|
Vice
President and Secretary
|
2006
|
135,000
|
63,280
|
10,100
|
108,000
|
––
|
3,940
|
320,320
|
|
|
|
|
|
|
|
|
|
(1)
|
These
respective amounts represent the dollar amount recognized for financial
reporting purposes with respect to each fiscal year for prior
year option grants and current year and prior year grants of restricted
Common Stock awarded under our Stock Incentive Plan, all computed in
accordance with Statement of Financial Accounting Standard (“SFAS”) No.
123R. Please refer to Note 10 to our Financial Statements
contained in our Form 10-K for the period ended December 31, 2007 for a
discussion of the assumptions used in these computations. For
this computation, we do not include an assumption for estimated
forfeitures. Our Form 10-K has been included in our Annual
Report and provided to our stockholders.
|
|
|
(2)
|
Bonuses
under the Management Incentive Plan are accrued in the fiscal year earned
and paid in the following fiscal year.
|
|
|
(3)
|
The
actuarial present value of the executive officers’ accumulated benefit
under the defined benefit plan decreased during 2007 as
follows: Messrs. Richard A. Hubbell $55,530, Ben M. Palmer
$9,150, R.Randall Rollins $211,300 and Ms. Linda H. Graham
$19,860. Change represents impact of lower discount rate only
as no additional benefits are being accrued.
|
|
|
(4)
|
All
other compensation for 2007 includes the following items
for:
|
Mr.
Richard A. Hubbell:
|
Insurance
on automobile provided by the Company, cost of dining club dues, cost of
gasoline for personal automobile, 401(k) Plan Company match of $6,750 and
contribution towards enhanced benefits of $26,262.
|
|
|
Mr.
Ben M. Palmer:
|
Automobile
allowance of $8,400, cost of gasoline for personal automobile and 401(k)
Plan Company match of $6,750.
|
|
|
Ms.
Linda H. Graham:
|
401(k)
Plan Company match of $4,990.
|
GRANTS
OF PLAN-BASED AWARDS
Name
|
Grant
Date
|
Estimated
Future Payouts
Under
Non-Equity
Incentive
Plan Awards (1)
|
All
Other
Stock
Awards:
Number
of
Shares
of
Stock
or
Units
(#)
|
Grant
Date
Fair
Value
of
Stock and
Option
Awards
($)
(2)
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Mr.
Richard A. Hubbell
|
1/23/07
|
150,000
|
600,000
|
900,000
|
|
|
|
1/23/07
|
|
|
|
20,000
|
357,600
|
|
|
|
|
|
|
|
Mr.
Ben M. Palmer
|
1/23/07
|
40,000
|
160,000
|
300,000
|
|
|
|
1/23/07
|
|
|
|
8,000
|
143,040
|
|
|
|
|
|
|
|
Mr.
R. Randall Rollins
|
1/23/07
|
125,000
|
500,000
|
750,000
|
|
|
|
1/23/07
|
|
|
|
20,000
|
357,600
|
|
|
|
|
|
|
|
Ms.
Linda H. Graham
|
1/23/07
|
15,000
|
37,500
|
120,000
|
|
|
|
1/23/07
|
|
|
|
5,000
|
89,400
|
|
(1)
|
These
amounts illustrate the potential bonus awards under the Management
Incentive Plan for 2007 that were paid out in early 2008. See
Summary Compensation Table on page 18 for actual amounts awarded in
2007.
|
|
|
|
|
(2)
|
These
amounts represent aggregate grant date fair value for grants of restricted
shares of Common Stock awarded in fiscal year 2007 under our Stock
Incentive Plan computed in accordance with SFAS 123R. Please
refer to Note 10 to our Financial Statements contained in our Form 10-K
for the period ended December 31, 2007 for a discussion of assumptions
used in this computation. For this computation, we do not
include an assumption for estimated forfeitures. Our Form 10-K has been
included in our Annual Report and provided to our
stockholders.
|
The table
above reflects grants of restricted shares of Company Common Stock under our
Stock Incentive Plan awarded in fiscal year 2007. All grants of
restricted shares of Common Stock vest one-fifth per year beginning on the
second anniversary of the grant date. Restricted shares have full
voting and dividend rights. However, until the shares vest, they
cannot be sold, transferred or pledged. Should the executive leave
our employment for any reason prior to the vesting dates (other than due to
death, disability or retirement on or after age 65), the unvested shares will be
forfeited. We have not issued any stock options since 2003 and have
no immediate plans to issue additional stock options.
The
Company’s employment contracts with its Chief Executive Officer and the
Company’s other executive officers are oral, at will arrangements. All of the
executive officers are eligible for annual cash bonuses which are awarded under
the Management Incentive Plan. The Compensation Committee’s decisions are based
upon broad performance objectives under that plan. The executive officers are
eligible to receive shares of Company Common Stock subject to options and
restricted shares of Company Common Stock under the Company’s Stock Incentive
Plans, in such amounts and with such terms and conditions as determined by the
Compensation Committee at the time of grant. All of the executive officers are
eligible to participate in the Company’s SRP. The executive officers are
eligible to participate in the Company’s regular employee benefit programs,
including the 401(k) Plan with Company match, group life insurance, group
medical and dental coverage and other group benefit plans. All of the executive
officers are eligible for the Retirement Income Plan that was frozen in March
2002. For more information on these plans, see “Compensation
Discussion and Analysis” at page 13, and “Benefit Plans” at page
22.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
The table
below sets forth details concerning outstanding option awards made in prior
years to the executives named in our Summary Compensation Table, including the
grant date, the expiration date, the option exercise price, and the number of
shares of Common Stock underlying the grants both exercisable and
un-exercisable. The grant dates for all of these options are from
fiscal year ended 2003 and earlier since we have not issued any stock options
after 2003. The table below also sets forth the total number of
restricted shares of Common Stock that were granted in prior years to the
executives named in our Summary Compensation Table but which have not yet
vested, together with the market value of these unvested shares based on the
$11.71 closing price of our Common Stock on December 31, 2007.
|
Option
Awards
|
Stock
Awards
|
Name
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration
Date(1)
|
Number
of
Shares
or
Units
of Stock
That
Have Not
Vested
(#)
|
Market
Value
of
Shares or
Units
of Stock
That
Have
Not
Vested
($)
|
Richard
A. Hubbell
|
127,695
|
–– |
3.33
|
1/27/2008(2)(7)
|
173,525(9)
|
2,031,980
|
|
173,669
|
–– |
1.79
|
1/26/2009(3)(8)
|
|
|
|
168,748
|
–– |
3.88
|
4/24/2011(4)
|
|
|
|
67,500
|
16,875
|
2.81
|
1/28/2013(5)
|
|
|
Ben
M. Palmer
|
––
|
10,125
|
2.81
|
1/28/2013(5)
|
138,800(9)
|
1,625,350
|
R.
Randall Rollins
|
177,812
|
––
|
3.09
|
1/28/2008(6)
|
90,500(8)
|
1,059,760
|
|
159,688
|
––
|
2.81
|
1/28/2008(6)
|
|
|
Linda
H. Graham
|
10,215
|
––
|
3.33
|
1/27/2008(2)
|
42,875(9)
|
502,070
|
|
12,766
|
–– |
1.79
|
1/26/2009(3)
|
|
|
|
16,875
|
–– |
3.88
|
4/24/2011(4)
|
|
|
|
27,000
|
6,750
|
2.81
|
1/28/2013(5)
|
|
|
|
(1)
|
Unless
otherwise noted, all options have ten year terms with vesting as
follows: The options vest one-fifth per year beginning on the
first anniversary of the grant date.
|
|
|
|
|
(2)
|
Options
granted 01/27/1998.
|
|
|
|
|
(3)
|
Options
granted 01/26/1999.
|
|
|
|
|
(4)
|
Options
granted 04/24/2001.
|
|
|
|
|
(5)
|
Options
granted 01/28/2003.
|
|
|
|
|
(6)
|
Options
granted 01/28/2003 with vesting as follows: The options vest
one-fifth per year beginning on the grant
date.
|
|
(7)
|
Includes
76,443 options granted 01/27/1998, that vest as follows: 22,153 in 1999,
18,633 in 2000, 18,630 in 2001, 11,519 in 2002 and 5,508 in
2003.
|
|
|
|
|
(8)
|
Also
includes 138,934 options granted 01/26/1999 that vest ratably over four
years.
|
|
|
|
|
(9)
|
The
Company has granted employees two forms of restricted stock: time lapse
restricted and performance restricted. Time lapse restricted shares vest
after a stipulated number of years from the grant date, depending on the
terms of the issue. Time lapse restricted shares issued in years 2003 and
prior vest after ten years. Time lapse restricted shares issued
starting in 2004 vest one-fifth per year beginning on the second
anniversary of the grant date. The performance restricted
shares are granted, but not earned and issued until certain five-year
tiered performance criteria are met. The performance criteria are
predetermined market prices of RPC common stock. On the date the common
stock appreciates to each level (determination date), 20 percent of
performance shares are earned. Once earned, the performance shares vest
five years from the determination date. The Company has not
granted performance restricted shares since 2003. Shares of
restricted stock granted to the executive officers that have not vested as
of December 31, 2007 are summarized in the table
below:
|
Name
|
Number
of shares
|
Grant
Date
|
Date
fully vested
|
Richard
A. Hubbell
|
50,625
40,500
32,400
30,000
20,000
|
1/26/1999
4/27/2004
1/25/2005
1/24/2006
1/23/2007
|
1/26/2009
4/27/2010
1/25/2011
1/24/2012
1/23/2013
|
Ben
M. Palmer
|
13,500
10,125
40,500
16,875
16,200
21,600
12,000
8,000
|
1/27/1998
1/26/1999
4/24/2001
1/28/2003
4/27/2004
1/25/2005
1/24/2006
1/23/2007
|
1/27/2008
1/26/2009
4/24/2011
10/28/2009
4/27/2010
1/25/2011
1/24/2012
1/23/2013
|
R.
Randall Rollins
|
40,500
30,000
20,000
|
4/27/2004
1/24/2006
1/23/2007
|
4/27/2010
1/24/2012
1/23/2013
|
Linda
H. Graham
|
6,750
10,125
13,500
7,500
5,000
|
1/27/1998
4/27/2004
1/25/2005
1/24/2006
1/23/2007
|
1/27/2008
4/27/2010
1/25/2011
1/24/2012
1/23/2013
|
OPTION
EXERCISES AND STOCK VESTED
The following table sets
forth:
|
·
|
the
number of shares of Common Stock acquired by the executives named in the
Summary Compensation Table upon the exercise of stock options during the
fiscal year ended December 31, 2007;
|
|
|
|
|
·
|
the
aggregate dollar amount realized on the exercise date for such options
computed by multiplying the number of shares acquired by the difference
between the market value of the shares on the exercise date and the
exercise price of the options;
|
|
|
|
|
·
|
the
number of restricted shares of Common Stock acquired by the executives
named in the Summary Compensation Table upon the vesting of shares during
the fiscal year ended December 31, 2007; and
|
|
|
|
|
·
|
the
aggregate dollar amount realized on the vesting date for such restricted
stock computed by multiplying the number of shares which vested by the
market value of the shares on the vesting
date.
|
|
Option
Awards (1)
|
Stock
Awards
|
Name
|
Number
of Shares
Acquired
on Exercise
(#)
|
Value
Realized on
Exercise
($)
|
Number
of Shares
Acquired
on Vesting
(#)
|
Value
Realized on
Vesting
($)
|
Richard
A. Hubbell
|
51,076
|
826,920
|
55,350
|
877,700
|
Ben
M. Palmer
|
83,625
|
1,136,310
|
36,112
|
576,200
|
R.
Randall Rollins
|
––
|
––
|
13,500
|
236,800
|
Linda
H. Graham
|
5,106
|
82,670
|
20,250
|
318,000
|
|
(1)
|
The
shares acquired on exercise of options are restricted for a period of one
year from the date of exercise.
|
BENEFIT
PLANS
The table
below shows the present value of accumulated benefits payable to each of the
named executive officers, including the number of years of service credited to
each such named executive officer, under the Retirement Income Plan determined
using interest rate and mortality rate assumptions consistent with those used in
the Company’s financial statements. Information regarding the Retirement Income
Plan can be found under Note 10 to our Financial Statements contained in our
Form 10-K for the period ending December 31, 2007.
Pension
Benefits
Name
|
Plan
Name
|
Number
of
Years
Credited
Service
(#)
(1)
|
Present
Value
of
Accumulated
Benefit
($)
|
Payments
During
Last
Fiscal Year
($)
|
Mr.
Richard A. Hubbell
|
Retirement
Income Plan
|
15
|
371,550
|
––
|
Mr.
Ben M. Palmer
|
Retirement
Income Plan
|
4
|
31,835
|
––
|
Mr.
R. Randall Rollins
|
Retirement
Income Plan
|
30
|
1,820,100
|
261,600
|
Ms.
Linda H. Graham
|
Retirement
Income Plan
|
15
|
232,091
|
––
|
|
(1)
|
The
difference in years of credited and actual service is due to the freezing
of benefit accruals in 2002. See discussion below for further
details.
|
The
Company’s Retirement Income Plan, a trusteed defined benefit pension plan,
provides monthly benefits upon retirement at age 65 to eligible
employees. In 2002, the Company's Board of Directors approved a
resolution to cease all future benefit accruals under the Retirement Income Plan
effective March 31, 2002. Retirement Income Plan benefits are based
on the average of the employee's compensation from the Company for the five
consecutive complete calendar years of highest compensation during the last ten
consecutive complete calendar years (“final average compensation”) immediately
preceding March 31, 2002. The benefits are computed as the product of
1.5 percent of final average compensation multiplied by years of credited
service (up to 30 years) reduced by an adjustment for benefits drawn from social
security. Adjustments have been made for age and IRS mandated
compensation limitations. The final average compensation for Mr.
Hubbell is $205,890, Mr. Palmer is $179,900 and Ms. Graham is
$127,325.
The
annual benefit payable at the later of retirement age or 65 for the named
executive officers is $261,600 for Mr. Rollins, $41,400 for Mr. Hubbell, $24,900
for Ms. Graham and $9,400 for Mr. Palmer. In accordance with the
Internal Revenue Code (as amended by the Economic Growth and Tax Relief
Reconciliation Act of 2001), the maximum annual benefit payable to a Retirement
Income Plan beneficiary in 2007 was $180,000. Retirement benefits
accrued at the end of any calendar year or as of March 31, 2002 will not be
reduced or increased by any subsequent changes in the maximum compensation
limit.
The Plan
also provides reduced early retirement benefits at age 55 or older with 15 or
more years of service. Mr. Hubbell and Ms. Graham are eligible for
early retirement benefits and the amounts payable to them in such an
event are calculated using the computation described above reduced by a
certain percentage for each incremental month of early retirement. In
addition, as an owner with stock ownership in excess of five percent of the
Company’s voting securities, Mr. Rollins is required to receive mandatory
distributions currently, even though he has not retired from the
Company. The amount of distribution received during 2007 has been
disclosed in the table above and is not subject to change after
retirement.
In 2002,
the Company began providing additional benefits on behalf of certain
long-service employees in the form of discretionary cash contributions made
either to the Company’s 401(k) Plan (which is described below) or the SRP as
described in the section below titled “Nonqualified Deferred
Compensation.” Amounts contributed by the Company to the accounts of
the executive officers are reported in the “All Other Compensation” column of
the Summary Compensation Table on page 18.
401(k)
Plan
Effective
July 1, 1984, the Company adopted a qualified retirement plan designed to meet
the requirements of Section 401(k) of the Code. The Company makes
matching contributions of fifty cents ($0.50) for each dollar ($1.00) of a
participant’s contribution to the 401(k) Plan that does not exceed six percent
of his or her annual compensation. The only form of benefit payment
under the 401(k) Plan is a single lump-sum payment equal to the vested balance
in the participant’s account on the date the distribution is
processed. Under the 401(k) Plan, the full amount of a participant’s
vested accrued benefit is payable upon his termination of employment,
retirement, total and permanent disability, or death. Also under the
401(k) Plan, a participant may withdraw his or her pre-tax contributions to the
extent of certain specified instances of financial hardship and may withdraw any
amount from his or her pre-tax contribution account for any reason after
attaining age 59 ½. In addition, a participant may withdraw any
amount from his or her rollover account for any reason. Amounts contributed by
the Company to the accounts of the named executive officers under this plan are
reported in the “All Other Compensation” column of the Summary Compensation
Table on page 18.
NONQUALIFIED
DEFERRED COMPENSATION
The SRP
has been established as a non-qualified plan that is designed to comply with the
provisions of the American Jobs Creation Act of 2004 (including Section 409A of
the Internal Revenue Code) for the cash contributions made to certain longer
serviced employees in lieu of freezing of benefit accruals effective in 2002;
the SRP also has a compensation deferral option for eligible
employees. The contributions and deferrals to the SRP are invested in
funds held in a rabbi trust.
Name
|
Executive
Contributions
in
last
FY ($) (1)
|
Registrant
contributions
in
last
FY ($) (2)
|
Aggregate
earnings
in last
FY
($)
|
Aggregate
withdrawals/
distributions
($)
|
Aggregate
balance
at last
FYE
($)
|
|
|
|
|
|
|
Richard
A. Hubbell
|
––
|
25,880
|
11,270
|
––
|
192,550
|
Ben
M. Palmer
|
37,180
|
––
|
7,370
|
––
|
131,850
|
R.
Randall Rollins
|
––
|
––
|
––
|
––
|
––
|
Linda
H. Graham
|
91,500
|
––
|
16,450
|
––
|
294,850
|
(1)
|
Includes
the following amounts related to the base salary for 2007 which have been
deferred by the executive officer pursuant to the SRP and which are
included in the Summary Compensation Table: Mr. Ben M. Palmer:
$16,200 and Ms. Linda H. Graham: $37,500. The remaining amounts
represent deferrals of bonus compensation related to 2006 that were paid
in 2007.
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(2)
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Reflects
the amounts for each of the named executive officers which are reported as
compensation to such named executive officer in the “All Other
Compensation” column of the Summary Compensation Table on page
18.
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The
deferral option provides that participants may defer up to 50 percent of their
base salary and up to 100 percent of their annual bonus with respect to any
given plan year, subject to a $2,000 per plan year minimum. The
deferred amounts are voluntarily funded on a monthly basis; salary and bonus
deferrals are generally 100 percent vested. Accounts are credited
with hypothetical earnings, and/or debited with hypothetical losses, based on
the performance of certain “Measurement Funds.” Account values are
calculated as if the funds from deferrals and contributions had been converted
into shares or other ownership units of selected Measurement Funds by purchasing
(or selling, where relevant) such shares or units at the current purchase price
of the relevant Measurement Fund at the time of the participant's
selection. The benefits are unsecured general obligations of the
Company to the participants, and these obligations rank in parity with the
Company's other unsecured and unsubordinated indebtedness. To the extent that
the Company's obligations under the SRP exceed assets available under the trust,
the Company would be required to seek additional funding sources to fund its
liability under the SRP.
Generally,
the SRP provides for distributions of any deferred amounts upon the earliest to
occur of a participant's death, disability, retirement or other termination of
employment (a “Termination Event”). However, for any deferrals of
base salary and bonus compensation (but not Company contributions), participants
would be entitled to designate a distribution date which is prior to a
Termination Event. The SRP allows a participant to elect to receive
distributions in installments or lump-sum payments.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
The
following table describes the potential payments and benefits under the
Company’s compensation and benefit plans and arrangements to which the named
executive officers would be entitled upon termination of employment. There
are no other agreements, arrangements or plans that entitle executive officers
to severance, perquisites, or other enhanced benefits upon termination of their
employment except as described below. Additional payments or benefits to a
terminating executive officer would be at the discretion of the Compensation
Committee.
The
executive officers are not entitled to additional benefits at death or
disability per the terms of the defined benefit plan. The amounts
payable at retirement are disclosed in the “Benefit Plans” section on page
22. The executive officers can choose to receive the amounts
accumulated in the SRP either as a lump-sum or in installments at retirement,
death or disability. These amounts have been disclosed under the
“Nonqualified Deferred Compensation” section on page 23. The table
below shows the incremental restricted shares that would become vested as of
December 31, 2007 at the closing market price of $11.71 per share for our Common
Stock, as of that date in the case of retirement, death or
disability.
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Stock
Awards
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Name
|
Number
of shares
underlying
unvested
stock
(#)
|
Unrealized
value of
unvested
stock ($)
|
Richard
A. Hubbell
·Retirement
·Disability
·Death
|
––
98,280
98,280
|
––
1,150,860
1,150,860
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Ben
M. Palmer
·Retirement
·Disability
·Death
|
––
99,340
99,340
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––
1,163,270
1,163,270
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R.
Randall Rollins
·Retirement
·Disability
·Death
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37,389
37,389
37,389
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437,830
437,830
437,830
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Linda
H. Graham
·Retirement
·Disability
·Death
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22,603
22,603
22,603
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264,680
264.680
264.680
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Accrued Pay and Regular Retirement
Benefits. The amounts shown in
the table above do not include the following since they are provided on a
non-discriminatory basis to salaried employees generally upon termination of
employment. These include:
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·
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Accrued
salary and vacation pay.
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·
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Distributions
of plan balances under the 401(k) Plan.
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·
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The
value of option continuation upon termination, as described
below. When an employee terminates prior to retirement, his or
her stock options are terminated immediately, except that the options may
be exercised for a period after termination (not to exceed the original
option termination date) in the following
circumstances:
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Ø
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Permanent
Disability – one year after termination
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Ø
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Death
– six months after the date of death
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Ø
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Normal
or Early Retirement – one day less than three months after
retirement
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The termination of employment for any
reason shall not accelerate the vesting of options.
Pension Benefit and Deferred
Compensation. The Retirement
Income Plan does not provide for lump sum payments for a participant including
executive officers for instances other than retirement. The
Retirement Income Plan is described at “Pension Benefits” above. Upon
termination, the executive officers will receive a distribution of the balance
in their SRP account. These amounts are disclosed under the
“Nonqualified Deferred Compensation” section on page 23.
Change in Control or
Severance. The Company does not have any change in control or
severance arrangements for its executive officers. However, amounts
may be paid at the discretion of the Compensation Committee.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Effective
with the spin-off in 2001, the Company began providing certain administrative
services to Marine Products. The service agreements between Marine Products and
the Company provide for the provision of services on a cost reimbursement basis
and may be terminated upon six months notice. The services covered by
these agreements include administration of certain employee benefit programs and
other administrative services. Charges from the Company (or from
corporations which are subsidiaries of the Company) for such services aggregated
approximately $957,000 in 2007.
During
2007, a subsidiary of RPC conducted business with companies owned by LOR,
Inc. Mr. R. Randall Rollins, Chairman, and Mr. Gary W. Rollins,
Director are officers, directors and controlling stockholders of LOR,
Inc. In 2007, payments totaling approximately $1,035,000 were made to
these LOR, Inc. companies for the purchase of parts and repair services related
to certain of RPC’s oilfield operating equipment. RPC believes the charges
incurred by its subsidiary are at least as favorable as the charges that would
have been incurred for similar services from unaffiliated third
parties.
RPC
receives certain administrative services including an allocation for office
space from Rollins. The service agreements between Rollins and the
Company provide for the provision of services on a cost reimbursement basis and
are terminable on six months notice. The services covered by these
agreements include office space, administration of certain employee benefit
programs, and other administrative services. Charges to the Company (or to
corporations which are subsidiaries of the Company) for such services and rent
aggregated approximately $72,000 in 2007.
A group
that includes the Company’s Chairman of the Board, R. Randall Rollins, his
brother Gary W. Rollins who is also a director and certain companies under their
control, possesses in excess of fifty percent of the Company’s voting
power. Please refer to the discussion above under the heading,
“Corporate Governance and Board of Directors Committees and Meetings, Director
Independence and NYSE Requirements, Controlled Company
Exemption.” The group discussed above also controls in excess of
fifty percent of Marine Products’ voting power.
Our Code
of Business Conduct and Ethics for Directors and Executive Officers and Related
Party Transactions Policy provides that related party transactions, as defined
in Regulation S-K, Item 404(a) must be reviewed, approved and/or ratified by our
Nominating and Corporate Governance Committee. As set forth in our
Code, our Nominating and Corporate Governance Committee has the responsibility
to ensure that it only approve or ratify related party transactions that are in
compliance with applicable law, consistent with the Company’s corporate
governance policies (including those relative to conflicts of interest and
usurpation of corporate opportunities) and on terms that are deemed to be fair
to the Company. The Committee has the authority to hire legal,
accounting, financial or other advisors as it may deem necessary or desirable
and/or to delegate responsibilities to executive officers of the Company in
connection with discharging its duties. A copy of the Code is
available on our website at www.rpc.net, under
the Governance section. All related party transactions for fiscal
year ended December 31, 2007 were reviewed, approved and/or ratified by the
Nominating and Corporate Governance Committee in accordance with the
Code.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS
Principal
Auditor
Grant
Thornton LLP (“Grant Thornton”) served as the Company's independent registered
public accountants for the fiscal years ended December 31, 2007 and
2006. In addition to performing the audit of the Company’s consolidated
financial statements, Grant Thornton provided various other services during 2007
and 2006.
The Audit
Committee has appointed Grant Thornton as the Company’s independent registered
public accountants for the fiscal year ending December 31,
2008. Representatives of Grant Thornton are expected to be present at
the Annual Meeting and will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
The
aggregate fees billed by the Company’s independent registered public accountants
are set forth below:
|
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2007
|
|
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2006
|
|
Audit
fees and quarterly reviews (1)
|
|
$ |
893,690 |
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$ |
967,570 |
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Audit
related fees (2)
|
|
|
–– |
|
|
|
16,730 |
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Tax
fees (3)
|
|
|
–– |
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–– |
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All
other fees
|
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|
–– |
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–– |
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(1)
|
Audit
fees include fees for audit or review services in accordance with
generally accepted auditing standards, such as statutory audits and
services rendered for compliance with Section 404 of the Sarbanes-Oxley
Act.
|
(2)
|
Tax
fees related to tax planning and advice on international
issues.
|
Pre-approval
of Services
All of
the services described above were pre-approved by the Company’s Audit
Committee. The Audit Committee has determined that the payments made
to its independent registered public accountants for these services are
compatible with maintaining such auditors’ independence. All of the hours
expended on the principal accountant’s engagement to audit the financial
statements of the Company for the year 2007 were attributable to work performed
by full-time, permanent employees of the principal accountant.
The Audit
Committee is directly responsible for the appointment and termination,
compensation, and oversight of the work of the independent registered public
accountants, including resolution of disagreements between management and the
independent registered public accountants regarding financial reporting. The
Audit Committee is responsible for pre-approving all audit and non-audit
services provided by the independent registered public accountants and ensuring
that they are not engaged to perform the specific non-audit services proscribed
by law or regulation. The Audit Committee has delegated pre-approval authority
to its Chairman with the stipulation that his decision is to be presented to the
full Committee at its next scheduled meeting. The Audit Committee has
no other pre-approval policies.
STOCKHOLDER
PROPOSALS
Appropriate
proposals of stockholders intended to be presented at the Company’s 2009 Annual
Meeting of the Stockholders must be received by the Company by November 20,
2008, in order to be included, pursuant to Rule 14a-8 promulgated under the
Securities Exchange Act of 1934, as amended, in the Proxy Statement and form of
proxy relating to that meeting. In accordance with Rule 14a-4(c)(1)
of the Securities Exchange Act of 1934, management proxy holders intend to use
their discretionary voting authority with respect to any stockholder proposal
raised at the Company’s 2008 Annual Meeting as to which the proponent fails to
notify the Company on or before January 31, 2009. With regard to such
stockholder proposals, if the date of the next Annual Meeting of the
Stockholders is advanced or delayed more than 30 calendar days from April 22,
2009, the Company will, in a timely manner, inform its stockholders of the
change and of the date by which such proposals must be received.
With
respect to stockholder nomination of directors, the Company’s Bylaws provide
that nominations for the election of directors may be made by any stockholder
entitled to vote for the election of directors. Nominations must
comply with an advance notice procedure which generally requires with respect to
nominations for directors for election at an Annual Meeting, that written notice
be addressed to: Secretary, RPC, Inc., 2170 Piedmont Road NE,
Atlanta, Georgia 30324, not less than ninety days prior to the anniversary of
the prior year’s Annual Meeting and set forth the name, age, business address
and, if known, residence address of the nominee proposed in the notice, the
principal occupation or employment of the nominee for the past five years, the
nominee's qualifications, the class or series and number of shares of capital
stock of the Company which are owned beneficially or of record by the person and
any other information relating to the person that would be required to be
disclosed in a proxy statement or other filings. Other specific requirements
related to such notice, including required disclosures concerning the
stockholder intending to present the nomination, are set forth in the Company’s
Bylaws. Notices of nominations must be received by the Secretary of
the Company no later than January 24, 2009 and no earlier than
December 15, 2008 with respect to directors to be elected at the 2009
Annual Meeting of Stockholders.
EXPENSES
OF SOLICITATION
The
Company will bear the cost of soliciting proxies. Upon request, we
will reimburse brokers, dealers and banks, or their nominees, for reasonable
expenses incurred in forwarding copies of the proxy material to their beneficial
shareholders of record. Solicitation of proxies will be made principally by
mail. Proxies also may be solicited in person or by telephone, facsimile or
other means by our directors, officers and regular employees. These individuals
will receive no additional compensation for these services. The Company has
retained Georgeson Shareholder Communications, Inc. to conduct a broker search
and to send proxies by mail for an estimated fee of approximately $7,500 plus
shipping expenses.
MISCELLANEOUS
The
Company’s Annual Report to Stockholders, including its Annual Report on Form
10-K for the fiscal year ended December 31, 2007, without exhibits, is being
mailed to stockholders with this Proxy Statement.
Upon the written request of any
record or beneficial owner of the Company’s Common Stock whose proxy was
solicited in connection with the 2008 Annual Meeting of Stockholders, the
Company will furnish such owner, without charge, a copy of its Annual Report on
Form 10-K, including the financial statements and the financial statement
schedules (but without exhibits), for its fiscal year ended December 31,
2007. Requests for a copy of such Annual Report on Form 10-K should
be addressed to Ms. Linda H. Graham, Secretary, at RPC, Inc., 2170 Piedmont Road
NE, Atlanta, Georgia 30324.
Management
knows of no business other than the matters set forth herein which will be
presented at the Annual Meeting. Inasmuch as matters not known at this time may
come before the Annual Meeting, the enclosed proxy confers discretionary
authority with respect to such matters as may properly come before the Annual
Meeting; and it is the intention of the persons named in the proxy to vote in
accordance with their best judgment on such matters.
|
BY
ORDER OF THE BOARD OF DIRECTORS
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Atlanta,
Georgia
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March
17, 2008
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Linda
H. Graham, Secretary
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RPC,
INC.
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DESIGNATION (IF
ANY)
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ADD 1
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Electronic Voting
Instructions
You can vote by Internet or
telephone!
Available 24 hours a day, 7 days a
week!
Instead of mailing your proxy, you
may choose one of the two voting
methods outlined below to vote
your proxy.
VALIDATION DETAILS ARE LOCATED
BELOW IN THE TITLE BAR.
Proxies submitted by the Internet
or telephone must be received by
1:00 a.m., Central Time, on April
22, 2008.
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ADD 2
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Vote by
Internet
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• ● Log on to
the Internet and go to
www.investorvote.com
• ● Follow the
steps outlined on the secured website.
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Vote by
telephone
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• ● Call toll
free 1-800-652-VOTE (8683) within the United
States, Canada &
Puerto Rico any time on a touch tone
telephone.
There is NO CHARGE
to you for the
call.
• ● Follow the
instructions provided by the recorded message.
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Using a black
ink pen, mark your
votes with an X as shown in
this example. Please do not write
outside the designated areas.
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Annual
Meeting Proxy Card
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123456
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C0123456789
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12345
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IF YOU HAVE NOT VOTED VIA THE INTERNET
OR
TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM
PORTION IN THE ENCLOSED ENVELOPE.
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A
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Elections of Class I
Directors — The Board of Directors recommends a vote FOR all the nominees
listed.
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1.
Nominees:
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01 - R. RANDALL
ROLLINS
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02 - HENRY B.
TIPPIE
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03 - JAMES B.
WILLIAMS
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Mark here to vote FOR all
nominees
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Mark here to WITHHOLD vote from all
nominees
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01
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02
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03
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For All
EXCEPT - To withhold a vote for one or more
nominees, mark
the box to the left and the
corresponding numbered box(es) to the right.
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2. IN THE DISCRETION OF THE
PROXIES ON ALL OTHER MATTERS WHICH MAY
PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
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Change of
Address — Please
print new address below. |
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C
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Authorized Signatures — This
section must be completed for your vote to be counted. — Date and Sign
Below
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Signature should conform to name
and title stenciled hereon. Executors, administrators, trustees, guardians
and attorneys should add their title upon
signing.
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Date (mm/dd/yyyy) — Please print
date below.
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Signature 1 — Please keep
signature within the box.
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Signature 2 — Please keep
signature within the box.
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/ /
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C
1234567890
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J N T
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MR A SAMPLE (THIS AREA IS SET UP
TO ACCOMMODATE
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1 U P X
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0 1 6 4 9 7 1
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140 CHARACTERS) MR A SAMPLE AND MR
A SAMPLE AND
MR A SAMPLE AND MR A SAMPLE AND MR
A SAMPLE AND
MR A SAMPLE AND MR A SAMPLE AND MR
A SAMPLE AND
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IF YOU
HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG
THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE.
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Proxy
Solicited by the Board of Directors of RPC, Inc.
For
Annual Meeting of Stockholders on Tuesday, April 22, 2008, 12:15
P.M.
The
undersigned hereby constitutes and appoints GARY W. ROLLINS and R. RANDALL
ROLLINS, and each of them, jointly and severally, proxies, with full power of
substitution, to vote all shares of Common Stock which the undersigned is
entitled to vote at the Annual Meeting of Stockholders to be held on April 22,
2008, at 12:15 P.M. at 2170 Piedmont Road, NE, Atlanta, Georgia, or any
adjournment thereof.
The
undersigned acknowledges receipt of Notice of Annual Meeting of Stockholders and
Proxy Statement, each dated March 17, 2008, grants authority to said proxies, or
either of them, or their substitutes, to act in the absence of others, with all
the powers which the undersigned would possess if personally present at such
meeting and hereby ratifies and confirms all that said proxies or their
substitutes may lawfully do in the undersigned’s name, place and
stead. The undersigned instructs said proxies, or either of them, to vote as
stated on the reverse side.
ALL
PROXIES SIGNED AND RETURNED WILL BE VOTED OR NOT VOTED IN ACCORDANCE WITH YOUR
INSTRUCTIONS, BUT THOSE WITH NO CHOICE WILL BE VOTED “FOR” THE ABOVE-NAMED
NOMINEES FOR DIRECTOR. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF THE COMPANY.
NO
POSTAGE REQUIRED IF THIS PROXY IS RETURNED IN THE ENCLOSED ENVELOPE AND MAILED
IN THE UNITED STATES.