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UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form 10-K/A
(Amendment
No. 1)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended
December 31, 2007
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OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the transition period
from to
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Commission file
no. 001-32693
Basic Energy Services,
Inc.
(Exact name of registrant as
specified in its charter)
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Delaware
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54-2091194
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(State or other jurisdiction
of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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500 W. Illinois, Suite 100
Midland, Texas
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79701
(Zip code
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(Address of principal executive
offices)
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Registrants telephone number, including area code:
(432) 620-5500
Securities registered pursuant to Section 12(b) of the
Act:
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Common Stock, $0.01 par
value per share
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New York Stock
Exchange
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(Title of Class)
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(Name of each exchange on which
registered)
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Securities registered pursuant to Section 12(g) of the
Act:
None
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o No þ
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Exchange
Act. Yes o No þ
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days. Yes þ No o
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
is not contained herein, and will not be contained, to the best
of the registrants knowledge, in definitive proxy or
information statements incorporated by reference in
Part III of this
Form 10-K
or any amendment to this
Form 10-K. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in Rule
12b-2 of the Exchange Act. (Check one):
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Large accelerated filer
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Accelerated filer
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Non-accelerated
filer o
(Do not check if a smaller reporting company)
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Smaller Reporting
company o
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Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the Exchange
Act). Yes o No þ
The aggregate market value of the registrants Common Stock
held by non-affiliates of the registrant was approximately
$550,036,398 as of June 29, 2007, the last business day of
the registrants most recently completed second fiscal
quarter (based on a closing price of $25.57 per share and
21,511,005 shares held by non-affiliates).
40,925,530 shares of the registrants Common Stock
were outstanding as of March 4, 2008.
Documents incorporated by reference: None.
EXPLANATORY
NOTE
The purpose of this Amendment No. 1 on
Form 10-K/A
(the Amendment) is to amend and restate
Part III, Items 10 through 14 of our previously filed
Annual Report on
Form 10-K
for the year ended December 31, 2007, filed with the
Securities Exchange Commission on March 7, 2008 (the
Original
Form 10-K),
to include information previously omitted in reliance on General
Instruction G to
Form 10-K,
which provides that registrants may incorporate by reference
certain information from a definitive proxy statement prepared
in connection with the election of directors. Basic Energy
Services, Inc. (Basic or the Company)
has determined to include such Part III information by
amendment of the Original
Form 10-K
rather than by incorporation by reference to the proxy
statement. Accordingly, Part III of the Original
Form 10-K
is hereby amended and restated as set forth below.
Also included in this Amendment are the certifications required
by
Rule 12b-15
of the Securities Exchange Act of 1934, as amended.
There are no other changes to the Original
Form 10-K
other than those outlined above. This Amendment does not reflect
events occurring after the filing of the Original
Form 10-K,
nor does it modify or update disclosures therein in any way
other than as required to reflect the amendment set forth below.
Among other things, forward-looking statements made in the
Original
Form 10-K
have not been revised to reflect events that occurred or facts
that became known to us after the filing of the Original
Form 10-K,
and such forward looking statements should be read in their
historical context.
BASIC
ENERGY SERVICES, INC.
Index to
Form 10-K
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CAUTIONARY
STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS
This annual report contains certain statements that are, or may
be deemed to be, forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, or the Exchange Act. We have based these
forward-looking statements largely on our current expectations
and projections about future events and financial trends
affecting the financial condition of our business. These
forward-looking statements are subject to a number of risks,
uncertainties and assumptions, including, among other things,
the risk factors discussed in this annual report and other
factors, most of which are beyond our control.
The words believe, may,
estimate, continue,
anticipate, intend, plan,
expect and similar expressions are intended to
identify forward-looking statements. All statements other than
statements of current or historical fact contained in this
annual report are forward looking-statements. Although we
believe that the forward-looking statements contained in this
annual report are based upon reasonable assumptions, the
forward-looking events and circumstances discussed in this
annual report may not occur and actual results could differ
materially from those anticipated or implied in the
forward-looking statements.
Important factors that may affect our expectations, estimates or
projections include:
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a decline in, or substantial volatility of, oil and gas prices,
and any related changes in expenditures by our customers;
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the effects of future acquisitions on our business;
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changes in customer requirements in markets or industries we
serve;
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competition within our industry;
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general economic and market conditions;
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our access to current or future financing arrangements;
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our ability to replace or add workers at economic rates; and
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environmental and other governmental regulations.
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Our forward-looking statements speak only as of the date of this
annual report. Unless otherwise required by law, we undertake no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future
events or otherwise.
This annual report includes market share, industry data and
forecasts that we obtained from internal company surveys
(including estimates based on our knowledge and experience in
the industry in which we operate), market research, consultant
surveys, publicly available information, industry publications
and surveys. These sources include World Oil magazine, Baker
Hughes Incorporated, the Association of Energy Service
Companies, and the Energy Information Administration of the
U.S. Department of Energy. Industry surveys, publications,
consultant surveys and forecasts generally state that the
information contained therein has been obtained from sources
believed to be reliable. Although we believe such information is
accurate and reliable, we have not independently verified any of
the data from third party sources cited or used for our
managements industry estimates, nor have we ascertained
the underlying economic assumptions relied upon therein. For
example, the number of onshore well servicing rigs in the
U.S. could be lower than our estimate to the extent our two
larger competitors have continued to report as stacked rigs
equipment that is not actually complete or subject to
refurbishment. Statements as to our position relative to our
competitors or as to market share refer to the most recent
available data.
1
PART III
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ITEM 10.
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DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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Directors
The following table sets forth certain information regarding our
directors as of March 31, 2008. The Class I
directors term will expire at the annual meeting of
stockholders in 2011, the Class II directors term
will expire at the annual meeting of stockholders in 2010 and
the Class III directors term will expire at the
annual meeting of stockholders in 2008.
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Name
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Age
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Director Since
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Class
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William E. Chiles
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59
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2003
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II
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James S. DAgostino
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2004
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III
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Robert F. Fulton
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2001
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II
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Kenneth V. Huseman
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1999
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III
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Sylvester P. Johnson, IV
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2001
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Thomas P. Moore, Jr.
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2005
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III
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Steven A. Webster
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2001
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H. H. Wommack, III
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1992
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Set forth below is a description of the backgrounds of our
directors.
James S.
DAgostino. Mr. DAgostino serves
as Chairman of the Board, President and Chief Executive Officer
of Encore Bancshares, Inc., a banking, wealth management and
insurance services holding company currently listed on the
NASDAQ Global Market, and has served in such capacities of its
subsidiary, Encore Bank, N.A., since November 1999. From 1998 to
1999, Mr. DAgostino served as Vice Chairman and Group
Executive and from 1997 until 1998, he served as President,
Member of the Office of Chairman and Director of American
General Corporation. Mr. DAgostino graduated with an
economics degree from Villanova University and a J.D. from Seton
Hall University School of Law.
William E. Chiles. Mr. Chiles has served
as the Chief Executive Officer, President and a Director of
Bristow Group Inc. (formerly Offshore Logistics, Inc.), a
provider of helicopter transportation services to the worldwide
offshore oil and gas industry, since July 2004. Mr. Chiles
served as Executive Vice President and Chief Operating Officer
of Grey Wolf, Inc. from March 2003 until June 2004.
Mr. Chiles served as Vice President of Business Development
at ENSCO International Incorporated from August 2002 until March
2003. From August 1997 until its merger into an ENSCO
International affiliate in August 2002, Mr. Chiles served
as President and Chief Executive Officer of Chiles Offshore Inc.
Mr. Chiles has a B.B.A. in Petroleum Land Management from
The University of Texas and an M.B.A. in Finance and Accounting
with honors from Southern Methodist University, Dallas.
Robert F. Fulton. Mr. Fulton has served
as President and Chief Executive Officer of Frontier Drilling
ASA since September 2002. From December 2001 to August 2002,
Mr. Fulton managed personal investments. He served as
Executive Vice President and Chief Financial Officer of Merlin
Offshore Holdings, Inc. from August 1999 until November 2001.
From 1998 to June 1999, Mr. Fulton served as Executive Vice
President of Finance for R&B Falcon Corporation, during
which time he closed the merger of Falcon Drilling Company with
Reading & Bates Corporation to create R&B Falcon
Corporation and then the merger of R&B Falcon Corporation
and Cliffs Drilling Company. He graduated with a B.S. degree in
Accountancy from the University of Illinois and an M.B.A. in
finance from Northwestern University.
Kenneth V. Huseman (President Chief Executive
Officer and Director) has 29 years of well servicing
experience. He has been our President, Chief Executive Officer
and a director of Basic Energy Services since 1999. Prior to
joining Basic, he was Chief Operating Officer at Key Energy
Services from 1996 to 1999. He was a Divisional Vice President
at WellTech, Inc., from 1993 to 1996. From 1982 to 1993, he was
employed at Pool Energy Services Co., where he managed
operations throughout the United States, including drilling
operations in Alaska. Mr. Huseman graduated with a B.B.A.
degree in Accounting from Texas Tech University.
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Sylvester P. Johnson, IV. Mr. Johnson has
served as President, Chief Executive Officer and a director of
Carrizo Oil & Gas, Inc. since December 1993. Prior to
that, he worked for Shell Oil Company for 15 years. His
managerial positions included Operations Superintendent, Manager
of Planning and Finance and Manager of Development Engineering.
Mr. Johnson is a director of Pinnacle Gas Resources, Inc.
Mr. Johnson is a Registered Petroleum Engineer and has a
B.S. in Mechanical Engineering from the University of Colorado.
Thomas P. Moore, Jr. Mr. Moore has
served as a director of Basic since 2005. Mr. Moore was a
Senior Principal of State Street Global Advisors, the head of
Global Fundamental Strategies, and a member of the Senior
Management Group from 2001 through July 2005. Mr. Moore
retired from this position in July 2005. From 1986 through 2001,
he was a Senior Vice President of State Street
Research & Management Company and was head of the
State Street Research International Equity Team. From 1977 to
1986 he served in positions of increasing responsibility with
Petrolane, Inc., including Administrative Vice President
(1977-1981),
President of Drilling Tools, Inc., an oilfield equipment rental
subsidiary
(1981-1984),
and President of Brinkerhoff-Signal, Inc., an oil well contract
drilling subsidiary
(1984-1986).
Mr. Moore is a Chartered Financial Analyst and holds an
M.B.A. degree from Harvard Business School.
Steven A. Webster. Mr. Webster has served
as Co-Managing Partner and President of Avista Capital Holdings,
L.P., a private equity firm focused on investments in the
energy, media and healthcare sectors, since July 1, 2005.
From 2000 until June 30, 2005, Mr. Webster served as
Chairman of Global Energy Partners, a specialty group within
Credit Suisses Alternative Capital Division that made
investments in energy companies. From 1998 to 1999,
Mr. Webster served as Chief Executive Officer and President
of R&B Falcon Corporation, and from 1988 to 1998,
Mr. Webster served as Chairman of and Chief Executive
Officer of Falcon Drilling Company, both offshore drilling
contractors. Mr. Webster serves as Chairman of Carrizo
Oil & Gas, Inc. and as a director of Grey Wolf, Inc.,
SEACOR Holdings Inc., Hercules Offshore, Inc., Camden Property
Trust, Geokinetics, Inc., Pinnacle Gas Resources, Inc., Encore
Bancshares, Inc. and various privately held companies.
Mr. Webster was the founder and an original shareholder of
Falcon, a predecessor to Transocean, Inc., and was a co-founder
and original shareholder of Carrizo. Mr. Webster holds a
B.S.I.M. from Purdue University and an M.B.A. from Harvard
Business School.
H. H. Wommack, III. Mr. Wommack
was our founder and our Chairman of the Board from 1992 until
January 2001. Mr. Wommack is currently a principal of and
Chief Executive Officer of Saber Resources, LLC, a privately
held oil and gas company that he founded in May 2004.
Mr. Wommack served as Chairman of the Board, President,
Chief Executive Officer and a Director of Southwest Royalties
Holdings, Inc. from its formation in July 1997 until April 2005
and of Southwest Royalties, Inc. from its formation in 1983
until its sale in May 2004. Prior to the formation of Southwest
Royalties, Mr. Wommack was a self-employed independent oil
and gas producer. Mr. Wommack is currently Chairman of the
Board of Midland Red Oak Realty, a commercial real estate
company involved in investments in the Southwest. He graduated
with a B.A. from the University of North Carolina and a J.D.
from the University of Texas School of Law.
Executive
Officers
Our executive officers as of March 31, 2008 and their
respective ages and positions are as follows:
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Name
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Age
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Position
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Kenneth V. Huseman
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President, Chief Executive Officer and Director
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Alan Krenek
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52
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Senior Vice President, Chief Financial Officer, Treasurer and
Secretary
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Charles W. Swift
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Senior Vice President Rig and Truck Operations
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Mark D. Rankin
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Vice President Risk Management
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James E. Tyner
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Vice President Human Resources
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T.M. Roe Patterson
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33
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Group Vice President Completion and Remedial Services
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Spencer D. Armour III
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Vice President Corporate Development
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David W. Sledge
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Vice President Contract Drilling
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Set forth below is a description of the backgrounds of our
executive officers, other than Mr. Huseman, whose biography
is included above in the biographies of our directors.
Alan Krenek (Senior Vice President, Chief Financial Officer,
Treasurer and Secretary) has 20 years of related
industry experience. He has been our Vice President, Chief
Financial Officer and Treasurer since January 2005. He became
Senior Vice President and Secretary in May 2006. From October
2002 to January 2005, he served as Vice President and Controller
of Fleetwood Retail Corp., a subsidiary in the manufactured
housing division of Fleetwood Enterprises, Inc. From March 2002
to August 2002, he was a consultant involved in management,
assessment of operational and financial internal controls, cost
recovery and cash flow management. Mr. Krenek pursued
personal interests from November 2001 to March 2002. He worked
in various financial management positions at Pool Energy
Services Co. from 1980 to 1993 and at Noble Corporation from
1993 to 1995. Mr. Krenek graduated with a B.B.A. degree in
Accounting from Texas A&M University and is a certified
public accountant.
Charles W. Swift (Senior Vice President Rig and
Truck Operations) has 35 years of related industry
experience including 27 years specifically in the domestic
well service business. He was named Senior Vice
President Rig and Truck Operations in July 2006, has
served as a Vice President since 1997 and was involved in
integrating several acquisitions during our expansion phase in
late 1997. He was a co-owner of S&N Well Service from 1986
to 1997 and expanded the business to 17 rigs at the time of sale
of the company to us. From 1980 to 1986, he worked at Pool
Energy Services Co. where he managed well service and fluid
services businesses. Mr. Swift graduated with a B.B.A.
degree in International Trade from Texas Tech University.
Mark D. Rankin (Vice President Risk Management)
has 30 years of related industry experience. He has
been a Vice President since 2004. From 1997 to 2004, he was a
consultant to oil and gas companies and was involved in
operations research and work process redesign. From 1985 to
1995, he acted as Director of International Marketing and
Marketing for U.S. Operations and a District Manager at
Pool Energy Services Co. He was an International Sales Manager
and Director of Planning and Market Research at Zapata Off-Shore
Company from 1979 to 1985. From 1977 to 1979, he was a Contract
Manager at Western Oceanic, Inc. He graduated with a B.A. in
Political Science from Texas A&M University.
James E. Tyner (Vice President Human Resources)
has been a Vice President since January 2004. From 1999 to
June 2003, he was the General Manager of Human Resources at CMS
Panhandle Companies, where he directed delivery of HR Services.
Mr. Tyner was the Director of Human Resources
Administration and Payroll Services at Duke Energys Gas
Transmission Group from 1998 to 1999. From 1981 to 1998,
Mr. Tyner held various positions at Panhandle Eastern
Corporation. At Panhandle, he managed all Human Resources
functions and developed corporate policies and as a Certified
Safety Professional, he designed and implemented programs to
control workplace hazards. Mr. Tyner received a B.S. in
General Science and M.S. in Microbiology from Mississippi State
University.
T. M. Roe Patterson (Group Vice
President Completion and Remedial Services) has
13 years of related industry experience. He has been our
Vice President of Rental and Fishing Tool Operations since July
2006, and also became our Group Vice President of Completion and
Remedial Services in April 2007. He was our Vice President of
Corporate Development from February 2006 through April 2007.
Prior to joining us, he was president of his own manufacturing
and oilfield service company, TMP Companies, Inc., from 2000 to
2006. He was a Contracts/Sales Manager for the Permian Division
of Patterson Drilling Company from 1996 to 2000. He was an
Engine Sales Manager for West Texas Caterpillar from 1995 to
1996. Mr. Patterson graduated with a B.S. degree in Biology
from Texas Tech University.
Spencer D. Armour III (Vice President
Corporate Development) has 29 years of related industry
experience. He has been our Vice President of Corporate
Development since April 2007. Prior to joining us, he served as
CEO of Sledge Drilling Corporation from March 2006 to March
2007. He served as Executive Vice President Sales
and Contracts for Patterson UTI from January 2002
through February 2006 and served on the Board of Directors of
Patterson UTI from 1999 through 2001. He served as
President of Ambar Lone Star Fluid Services, a subsidiary of
Patterson UTI from January 1998 to December 2001.
Mr. Armour founded Lone Star Mud in October 1986 and served
as its President until the Company was acquired by
Patterson UTI in January 1998. He graduated with a
B.S. degree in Economics from the University of Houston.
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David W. Sledge (Vice President Contract
Drilling) has 28 years of related industry experience.
He has been our Vice President of Contract Drilling since April
2007. Prior to joining us he served as President and COO of
Sledge Drilling Corporation from March 2006 to March 2007. He
served as an Area Manager for Patterson UTI from
2004 to 2006. He was involved in private investments from 1997
to 2004. He served with Gene Sledge Drilling Corp. in various
capacities and was President at the time of its sale to
Patterson UTI in 1996. He presently serves on the
Board of Directors for Comstock Resources Inc. and Bois
DArc Energy Corp. Mr. Sledge graduated with a B.B.A.
degree in Management from Baylor University.
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ITEM 11.
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EXECUTIVE
COMPENSATION
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Compensation
Discussion and Analysis
Overview of Our Compensation Policies and
Objectives. Our intent regarding compensation
of its senior executive officers is to provide salary levels and
compensation incentives (1) that are competitive within the
market in which positions are located, (2) that attract and
retain individuals of outstanding ability in these key positions
and (3) that are designed to align the executives
incentives with the Companys short and long-term goals,
including strong pay-for-performance recognition for both
individual performance and the Companys performance
relative to the performance of other companies of comparable
size, complexity and quality. In addition, the Compensation
Committee considers the anticipated tax treatment of the
Companys executive compensation program.
Elements of Compensation. During 2006
and 2007, the executive compensation program for our named
executive officers and other senior executives included four
principal elements that, taken together, constitute a flexible
and balanced method of establishing total compensation. These
elements are:
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base salary;
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quarterly incentive bonus plan cash awards to certain executive
offices (excluding our CEO and CFO);
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annual cash incentive bonuses; and
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long-term incentive awards, which during 2006 consisted solely
of stock option grants and during 2007 consisted of a
combination of stock option grants and restricted stock awards.
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The compensation program for our named executive officers during
2006 and 2007 included only very limited additional perquisites
not offered to employees generally.
Selection of Elements to Provide Competitive Levels of
Compensation. The Compensation Committee
generally attempts to provide the Companys senior
executives with a total compensation package that is competitive
and reflective of the performance achieved by the Company
compared to the performance achieved by the Companys
peers. During 2006, the Compensation Committee attempted to
weight compensation generally toward long-term incentives, with
base compensation targeted in the range of the 25th to
50th percentile of the compensation peer group considered
by the Committee. The Committee determined a competitive level
of compensation for each executive based on information drawn
from a variety of sources, including proxy statements of other
companies and surveys. The Company engaged Pearl
Meyer & Partners during 2005 to perform an executive
compensation review. This review was completed in December 2005.
The peer group was comprised of a combination of the
Companys direct competitors and other energy and energy
services companies that experience similar market forces and are
looked at similarly by the investment community. Compensation
norms for the group were adjusted for comparability of revenue
size to the Company. This review was used by the Compensation
Committee in establishing 2006 executive base salaries, the
range for potential 2006 cash incentive bonuses to be paid in
2007, and aggregate long-term incentive plan payouts and equity
awards. During 2006, the Company elected to make equity grant
levels somewhat higher than the median in order to address
certain retention pressures in the market. Total cash
compensation levels were found near the norm, and increased
generally to move executives closer to the median where
applicable and in accordance with anticipated normal industry
increases (which increases were higher than prior-year normal
increases due to competition and activity in the sector). While
the targeted value of an executives compensation package
may be competitive, its actual value may exceed or fall below
market average levels depending on performance, as discussed
below.
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The Company also engaged Pearl Meyer & Partners during
2006 to review the terms of the employment agreements for its
named executive officers and other senior executives, and to
recommend changes to these agreements. New agreements with the
executive officers were entered into effective December 31,
2006. The principal effect of these new agreements was to
streamline severance and non-competition provisions among our
executive officers into three tiers, with our CEO in one tier,
our CFO and Senior Vice President Rig and Truck
Operations in a second tier, and our other Vice Presidents in a
third tier. Severance benefits are discussed below under
Severance Benefits.
Mix and Allocation of Compensation
Components. As noted above, the salary for our
named executive officers can represent 100% of compensation in
any given year when incentives do not pay out or long-term
awards are not made. However, the general mix of compensation
for target-level performances in the annual incentive plans,
plus the net annualized present value of long-term compensation
grants, can range as follows, depending upon the executive. The
following general percentage mix would apply to the general
approach in establishing the total compensation for the
Companys executives at 2007 target performance. It is
important to note that the influences of the timing of awards,
availability of stock, company financial performance and stock
price performance could significantly change the basic mix of
compensation components as a percentage of total compensation:
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For the CEO:
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Base pay = 25% to 30%
Bonus compensation at target = 25% to 30%
Long-term compensation annualized = 40% to 50%
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For the other named executives:
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Base pay = 35% to 40%
Bonus compensation at target = 20% to 25%
Long-term compensation annualized = 30% to 45%
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Base Salaries. The Compensation Committee
periodically reviews and establishes executive base salaries.
Generally, base salaries are based on (1) the scope and
complexity of the position held, (2) market survey data
from comparable companies and (3) the incumbents
competency level based on overall experience and past
performance. All of the executives employed by the Company
during 2005 who were expected to continue service during 2006
received salary increases for fiscal 2006, including
Mr. Huseman. The base salaries of Messrs. Huseman,
Krenek and Tyner were also increased by the Compensation
Committee for 2007 based on the Compensation Committees
review of its peer group and anticipated design for the overall
2007 compensation program for executive officers.
Quarterly Incentive Bonus Plans. During 2006
and 2007, the Company maintained three individual Quarterly
Incentive Bonus Plans for management and administrative
personnel. These plans address (1) area-level personnel,
(2) region- and division-level personnel and
(3) corporate-level personnel, except for the CEO and CFO.
During 2006 and 2007, the Company also maintained an annual
incentive bonus plan for executive officers. Employees
participating under these plans were eligible for cash bonuses.
Compensation potential and actual compensation received from all
the plans are part of the cash compensation review process.
The purpose of the area, region, and division-level plans is to
tie the compensation of the respective employees directly to the
financial return on assets employed within their particular
operations. During 2006 and 2007, corporate-level bonuses were
tied to the Companys net income.
Messrs. Huseman and Krenek did not participate in any of
the Quarterly Incentive Bonus Plans during 2006 or 2007 and
received only an annual cash bonus in early 2007 and 2008,
respectively. Mr. Swift participated in the
division-level Quarterly Incentive Bonus Plan for the first
three quarters of 2006 and received an annual cash bonus in
early 2007 and he participated in the Quarterly Incentive Bonus
Plan in the third and fourth quarters of 2007 and received an
annual cash bonus in early 2008. Messrs. Patterson and
Tyner each participated in the Quarterly Incentive Bonus Plans
in 2006 and 2007 and received annual cash bonuses in early 2007
and 2008.
Annual Cash Bonuses and Non-Equity Incentive Plan
Compensation. The purpose of annual cash bonuses
under our Second Amended and Restated 2003 Incentive Plan (the
2003 Incentive Plan) is to provide motivation
toward, and reward the accomplishment of, corporate annual
objectives and to provide a competitive compensation package
that will attract, reward and retain individuals of the highest
quality. The cash bonus awards to our named
6
executive officers for 2006 and 2007 were paid as non-equity
incentive plan compensation based upon the achievement of
corporate performance objectives.
During 2006, the Compensation Committee of the Company utilized
a set of metrics, which we refer to as our 2006 annual incentive
compensation plan, for determining aggregate annual bonuses for
our senior executive officers, including each of our named
executive officers, consisting of (including relative weighting):
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EBITDA return on capital employed (EBITDA/net debt and
equity)(40%);
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accident frequency rates (20%);
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revenue growth (15%);
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return on equity (15%); and
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individual performance, including extraordinary efforts and
results (10%).
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Target bonus award levels for the Companys executive
officers during 2006 were established by senior management
working with the Compensation Committee. Target levels represent
the award level attainable when the plans are performed fully to
expectations or plan and individual performance is rated
accordingly. Potential annual cash awards for 2006 ranged from
zero to 100% of base salary, with a target level of 75% based on
the Companys annual budgeted revenue, plus 10%, plus
acquisition-related revenue at budgeted performance. Payments
made under our Quarterly Incentive Bonus Plans offset the annual
bonus awards. The maximum target bonus is granted if total
points for the metrics equal or exceed 2.4 out of a maximum of
3.0 points. The greatest weight is given to EBITDA return on
capital employed. The threshold level for the maximum bonus
level on this metric was below our 2005 and 2006 actual
performance, which actual performance continued to exceed
historical levels. During 2006, the Company exceeded the maximum
threshold level for targeted return on equity, but it did not
exceed the maximum threshold level for either accident record or
revenue growth. All of the executive officers received the
maximum annual cash bonus for 2006, equal to 100% of their base
salary as of December 31, 2006, which cash bonuses were
paid during the first quarter of 2007. Payments under these
metrics were not qualified performance based
compensation within the meaning of Section 162(m) of
the Code.
In addition to the foregoing cash awards, the Compensation
Committee used these metrics to determine the potential value of
equity incentive rewards in the form of options or restricted
stock, which targeted a range from zero to 250% for our CEO,
200% for our CFO and Senior Vice President Rig and
Truck Operations, and 100% for other executive officers. These
awards were issued in March 2007 based on 2006 performance.
During 2007, the Compensation Committee of the Company utilized
a set of metrics as guidelines for determining aggregate annual
bonuses for our senior executive officers, including each of our
named executive officers, consisting of:
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EBITDA return on capital employed (EBITDA/net debt and equity);
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accident record, including both the overall frequency rates and
levels of preventable accidents;
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revenue growth;
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return on equity; and
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individual performance, including extraordinary efforts and
results.
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Target bonus award levels for the Companys executive
officers during 2007 were established by senior management
working with the Compensation Committee. Target levels represent
the award level attainable when the plans are performed fully to
expectations or plan and individual performance is rated
accordingly. Potential annual cash awards for 2007 ranged from
zero to 100% of base salary, with target levels as follows based
on the Companys annual budgeted revenue, plus 5%, plus
acquisition-related revenue at budgeted performance:
Messrs. Huseman and Krenek, 100%; Messrs. Swift and
Patterson, 80%; and Mr. Tyner, 50%. Payments made under our
Quarterly Incentive Bonus Plans offset the annual bonus awards.
The executive officers received annual cash bonuses for 2007
equal to between approximately 96% to 50% of their base salary
as of December 31, 2007,
7
which cash bonuses were paid during the first quarter of 2008.
Payments under these metrics were not qualified
performance based compensation within the meaning of
Section 162(m) of the Code.
In addition to the foregoing cash awards, the Compensation
Committee used these metrics to determine the potential value of
equity incentive rewards in the form of performance-based
restricted 2007 stock or restricted stock, which targeted a
range from zero to 250% for our CEO, 200% for our CFO and Senior
Vice President Rig and Truck Operations, and 100%
for other executive officers. These awards were issued in March
2008 based on 2007 performance.
The Companys annual performance measures for officers
during 2006 and 2007 were recommended by the Chief Executive
Officer and approved by the Compensation Committee. The
Compensation Committee also requested and received a
recommendation from the CEO, based on the report from Pearl
Meyer, regarding the CEOs compensation. Annual cash
bonuses for fiscal 2006 and 2007 were paid to each of our
executive officers during 2007 and 2008, respectively. The
Companys annual performance measures for officers for 2008
other than the Chief Executive Officer have been recommended by
the Chief Executive Officer and are expected to be approved by
the Compensation Committee. The Compensation Committee will base
its determination of CEO levels of performance measures on the
report from Pearl Meyer.
The Compensation Committee periodically monitors the award
target levels and variances to assure their competitiveness and
that they mesh with compensation strategy for incentives and for
total compensation.
During 2007, the Compensation Committee engaged Pearl
Meyer & Associates to assist it in designing a new
long-term incentive program under the 2003 Incentive Plan,
including the development of performance measures to determine
ultimate payouts. After due consideration, pursuant to its
authorization under the 2003 Incentive Plan, the Compensation
Committee approved and implemented in March 2008 a comprehensive
long-term incentive plan, which we refer to as our 2008
Long-Term Incentive Program and discuss further below,
consisting of:
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a performance-based plan looking at a three-year performance
period, which we refer to as our Three-Year LT Incentive
Program, that is based on performance factors contained in the
2003 Incentive Plan; and
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discretionary, time-based restricted stock awards.
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The performance-based Three-Year LT Incentive Program represents
approximately 50% of total potential long-term incentive
compensation, with approximately 50% of our long-term
compensation (including time-based restricted stock grants)
remaining discretionary.
Long-Term Incentive Program. The long-term
incentive program is used to focus management attention on
Company performance over a period of time longer than one year
in recognition of the long-term horizons for return on
investments and strategic decisions in the energy services
industry. The program is designed to motivate management to
assist the Company in achieving a high level of long-term
performance and serves to link this portion of executive
compensation to long-term stockholder value. The Compensation
Committee generally attempts to provide the Companys
executives, including Mr. Huseman, with a total
compensation package that is competitive and reflective of the
performance achieved by the Company compared to its peers, and
is typically weighted toward long-term incentives. Aggregate
stock or option holdings of the executive have no bearing on the
size of a performance award.
The Companys 2003 Incentive Plan, which was adopted by the
board and has been approved by the Companys stockholders
as amended, covers stock awards issued under the Companys
original 2003 Incentive Plan and predecessor equity plan. The
2003 Incentive Plan permits the granting of any or all of the
following types of awards: stock options; restricted stock;
performance awards; phantom shares; other stock based awards;
bonus shares; and cash awards. In fiscal 2006, the Committee
made grants of stock options, which vest in one-fourth
increments on January 1, 2008, 2009, 2010 and 2011.
All non-employee directors and employees of, or consultants to,
the Company or any of its affiliates are eligible for
participation under the 2003 Incentive Plan. The 2003 Incentive
Plan is administered by the Compensation Committee. The
Compensation Committee directly oversees the plan as it relates
to officers of the Company and oversees the plan in general, its
funding and award components, the type and terms of the awards
to
8
be granted and interprets and administers the 2003 Incentive
Plan for all participants. No awards may be granted under the
2003 Incentive Plan after April 12, 2014.
Options granted pursuant to the 2003 Incentive Plan may be
either incentive options qualifying for beneficial tax treatment
for the recipient as incentive stock options under
Section 422 of the Code or non-qualified options. No person
may be issued incentive stock options that first become
exercisable in any calendar year with respect to shares having
an aggregate fair market value, at the date of grant, in excess
of $100,000. No incentive stock option may be granted to a
person if at the time such option is granted the person owns
stock representing more than 10% of the total combined voting
power of all classes of the Companys stock or any of it
subsidiaries as defined in Section 424 of the Code, unless
at the time incentive stock options are granted the purchase
price for the option shares is at least 110% of the fair market
value of the option shares on the date of grant and the
incentive stock options are not exercisable after five years
from the date of grant.
The 2003 Incentive Plan permits the payment of qualified
performance based compensation within the meaning of
Section 162(m) of the Code, which generally limits the
deduction that the Company may take for compensation paid in
excess of $1,000,000 to certain of the Companys
covered officers in any one calendar year unless the
compensation is qualified performance based
compensation within the meaning of Section 162(m) of
the Code. Prior stockholder approval of the 2003 Incentive Plan
(assuming no further material modifications of the plan) will
satisfy the stockholder approval requirements of
Section 162(m) for the transition period beginning with the
Companys initial public offering in December 2005 and
ending not later than the Companys annual meeting of
stockholders in 2009. While the Compensation Committee reserves
the right to grant ad hoc or special awards at any time that are
subject to the limits of deductibility, the main awards under
the plan are administered consistent with the requirements of
162(m) for performance based compensation.
2008 Long-Term Incentive Program. In March
2008, the Compensation Committee, pursuant to its authorization
under the 2003 Incentive Plan, approved and recommended to the
Board, and the Board approved and implemented, the 2008
Long-Term Incentive Program consisting of:
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a performance-based Three-Year LT Incentive Program which
reflects a three-year performance period and is based on
performance factors contained in the 2003 Incentive Plan; and
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discretionary, time-based restricted stock awards.
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The performance-based Three-Year LT Incentive Program represents
approximately 50% of total potential long-term incentive
compensation, with approximately 50% of our long-term
compensation (including time-based restricted stock grants)
remaining discretionary.
Three-Year LT Incentive Program. Under the
Three-Year LT Incentive Program implemented during March 2008,
the executive officers and certain middle management personnel
(total of 178 participants for 2008 awards) may earn restricted
stock at the end of a one-year period, based on the
Companys performance over a three-year period. The
performance measures are based on the Company achieving
pre-established targets relative to its selected peer group (the
PB Peer Group) based on the following
factors/metrics:
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earnings per share (EPS) growth (50% of
performance-based awards), subject to forfeiture or a negative
adjustment of 100% if the Company incurs a net loss based on the
Companys average EPS for the three-year period; and
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return on capital employed (ROCE) (50% of
performance-based awards), subject to forfeiture or a negative
adjustment of 100% if the Companys ROCE for the three-year
period is below the worst performing comparable company in the
PB Peer Group and the Companys ROCE is less than 75% of
the next lowest PB Peer Group member.
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If the performance measures are met, the plan participants will
earn their restricted stock awards, which will then
remain subject to time-based vesting in one-third increments in
each of the subsequent three years. The combination of the
performance period and the vesting schedule results in the
awards being realized by the executive over a period of
3.75 years from the initial award date.
9
Achievement of the maximum goals will require superior
performance of the executives and the Company relative to the
Companys peer group, and the relative difficulty of
achieving this performance may be affected by certain risk
factors outside the control of the Company and the executives,
including risk factors disclosures in this
Form 10-K
and other periodic filings.
Target award levels were set for each participant based on a
multiple of the recommended 2008 base salary of each executive
officer. In determining the number of restricted shares to
award, the Compensation Committee used a
30-day
average of closing prices prior to the date of the
Committees March 11, 2008 meeting at which the awards were
approved. In determining the number of shares of restricted
stock to award, the Committee used this same
30-day
average of closing prices and a Black-Scholes option valuation
methodology.
The PB Peer Group consists of each of the following companies:
(1) Pioneer Drilling Co.; (2) Bronco Drilling Company,
Inc.; (3) Tetra Technologies, Inc.; (4) Oil States
International, Inc.; (5) Union Drilling, Inc.;
(6) Superior Well Services, Inc.; (7) Complete
Production Services, Inc.; (8) W-H Energy Services, Inc.;
(9) Superior Energy Services, Inc.; and (10) Key
Energy Services, Inc.
The total maximum number of shares for all participants for the
Three-Year LT Incentive Program awards granted in March 2008
(150% of target) was 272,450 shares, which earned shares
will then time-vest after the end of 2008 over a three-year
period. Of these shares, 93,250 is the maximum number of shares
which may be earned by the named executive officers if the
Company ranks as the highest in its PB Peer Group for both the
EPS growth and ROCE performance measures. Annual awards earned
are not determinable by the Committee until peer performance
data is available. When available, the data will be compiled and
compared to the pre-established performance goals of the Company
in light of the Companys actual performance for the year.
The 2008 awards under the Three-Year LT Incentive Program,
including performance-based awards, do not comply with the
provisions of Internal Revenue Code Section 162(m) due to
the use of performance periods prior to the grant date.
10
In general terms, if we rank first among our applicable peer
group for both the EPS growth and ROCE measures, our executive
officers will earn all of their restricted shares, equal to 150%
of the target shares, in each case subject to further time-based
vesting. In the event our performance is between the forfeiture
and maximum limits, our executive officers may earn the
percentage of restricted shares set forth in the following LTIP
payout grid (which shows the effect of
2005-2007 as
an example of where the Company would have been if these awards
were earned as of the end of 2007), which percentage earned will
be based on our ranking within the PB Peer Group (including
ourselves):
LTIP
Payout Grid Percentage of Equity Compensation
that may be Retained Based on Relative EPS growth/ ROCE
Ranking
Peer
EPS Changes
(Sample of
2005-2007)
11
Peer ROCE Performance
(Sample
2005-2007
Average)
The Compensation Committee will determine how many, if any, of
the contingent restricted shares granted in 2008 will be
retained or forfeited and restricted shares awarded in 2008 will
be received by each of our named executive officers on the basis
of our EPS change and ROCE performance relative to the
applicable peer group in accordance with the LTIP payout grid
set forth above. For the two-year performance period ended
December 31, 2007, we ranked eighth within our PB Peer
Group (including ourselves) with respect to EPS growth and
fourth within our PB Peer Group (including ourselves) with
respect to ROCE performance. Assuming these levels are
maintained as of the end of 2008, each of our named executive
officers would earn approximately 100% of his target restricted
shares underlying the 2008 awards
Similar to the Quarterly Incentive Bonus Plan for non-executive
officers, the Three-Year LT Incentive Program is consistent with
the Companys philosophy of tying a significant portion of
each executives compensation to performance because this
aligns the executive officers compensation to shareholder
interests. This program differs from the Quarterly Incentive
Bonus Plan in that it also provides retention benefits, because
the executive officers must remain in the employ of the Company
throughout the vesting period of four years from inception to
receive the full benefit, subject to exceptions for termination
of executives not for cause, termination for good reason,
termination due to death or disability and termination due to
change in control.
Discretionary Restricted Stock Grants. It is
the intent of the Committee that traditional discretionary
grants of restricted stock will be used to supplement the
Three-Year LT Incentive Program for approximately 50% of total
potential awards in future years. Because any awards of
restricted stock earned under the Three-Year LT Incentive
Program will not begin to vest until the second year after the
date of grant of the restricted stock in order to provide
continued long-term incentives that are competitive, the
Committee determined in March 2008 to make a special grant of
restricted stock to the executive officers, which grant is
consistent with the equity awards to comparable positions at our
peer companies. These time-based awards also provide an
opportunity for increased equity ownership by the executives to
further the link between the creation of shareholder value and
long term incentive compensation. This restricted stock grant
will vest in four equal portions beginning one year from the
date of the grant.
All restricted stock earned under the Three-Year LT Incentive
Program and the special non-performance based restricted stock
grant, as is the case with the earlier grants of restricted
stock and stock options, will be forfeited if they are not
vested prior to the date the executive officer terminates his
employment, except in the cases of
12
termination of executives not for cause, termination for good
reason, termination due to death or disability and termination
due to change in control.
Compensation for our Named Executive
Officers. The 2006, 2007 and current 2008
salaries of our named executive officers, including our CEO,
were established by the entire Board of Directors at the
recommendation of the Compensation Committee. The basis for
selecting the severance benefits of each of the named executive
officers, including our CEO, as of December 31, 2007 is
discussed below under Severance Benefits.
CEO Compensation. A separate, formal process
of evaluating Mr. Huseman was conducted for purposes of
determining his 2006 annual bonus paid during March 2007.
Specifically, the Committees considerations included:
(1) our EBITDA return on capital employed (EBITDA/net debt
and equity); (2) our accident frequency rates; (3) our
revenue growth; (4) our return on equity; and
(5) whether Mr. Huseman achieved his individual goals
for fiscal 2006. The Committee did not base its considerations
on any single factor but assigned the greatest relative weight
to our EBITDA return on capital employed. Based on these
considerations, Mr. Huseman was granted an annual cash
bonus for 2006 performance of $400,000, equal to 100% of his
base salary in effect on December 31, 2006, which bonus was
paid during the first quarter of 2007.
A separate, formal process of evaluating Mr. Huseman was
conducted for purposes of determining his 2007 annual bonus paid
during March 2008. Specifically, the Committees
considerations included: (1) our EBITDA return on capital
employed (EBITDA/net debt and equity); (2) our accident
record, including both the overall frequency rates and levels of
preventable accidents; (3) our revenue growth; (4) our
return on equity; and (5) whether Mr. Huseman achieved
his individual goals for fiscal 2007. The Committee did not base
its considerations on any single factor but assigned the
greatest relative weight to our EBITDA return on capital
employed. Based on these considerations, Mr. Huseman was
granted an annual cash bonus for 2007 performance of $400,000,
equal to approximately 76% of his base salary in effect on
December 31, 2007, which bonus was paid during the first
quarter of 2008.
Compensation of Other Named Executive
Officers. The Committee reviewed the
recommendations of the CEO regarding 2006 and 2007 bonuses and
awards. The Committees considerations included the same
general Company performance-based factors as well as the
individual performance of each of the officers. As noted above,
the annual cash bonuses paid to each of the other named
executive officers for 2007 performance was equal to between
approximately 96% to 50% of his base salary in effect on
December 31, 2007.
During 2006 and in prior years, long-term incentive awards to
our executive officers have consisted primarily of grants of
options to purchase our common stock. In 2007, the Committee
elected to use restricted stock awards as the primary component
of long-term compensation for our executive officers, with
certain of our executive officers also receiving grants of
options to purchase our common stock. The rationale behind this
shift towards increased restricted stock awards is that we
believe that restricted stock awards provide stronger retention
benefits than stock options, especially in slower economic
markets. Also, we believe that restricted stock awards closer
align the interests of management with the interests of our
other shareholders. Finally, we undertake to provide a
compensation package to our executive officers that is
competitive with our peers, and the use of restricted stock as
long-term incentive compensation is increasing among our peer
group.
In 2008, the Committee approved and implemented the 2008
Long-Term Incentive Program consisting of the Three-Year LT
Incentive Program and discretionary, time-based restricted stock
awards. The rationale behind this was to create a program
consistent with the Companys philosophy of tying a
significant portion of each executives compensation to
performance because this aligns the executive officers
compensation to shareholder interests, while maintaining an
opportunity for increased equity ownership by the executives to
further the link between the creation of shareholder value and
long term incentive compensation.
Perquisites. The Company provides limited
perquisites to its senior executives. Perquisites may include
vehicle allowances, club memberships and long-term disability
insurance. During 2006 and 2007, those perquisites were provided
to senior management based on individual employment agreements.
Severance Benefits. We entered into
amended and restated employment agreements with each of our
named executive officers as of December 31, 2006. Pursuant
to these agreements, each of the named executive officers are
entitled to severance payments in the event the officer is
terminated at any time by us without Cause as
defined in
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the agreements or by the officer for Good Reason. In
addition, each of the named executive officers is entitled to
severance payments in the event of a
change-in-control
if the officers employment is terminated for certain
reasons within the six months preceding or the twelve months
following a change in control of our company.
The severance payments outside a
change-in-control
are based on a multiple (for Mr. Huseman 3.0
times; for Messrs. Krenek and Swift 1.5 times;
and for Messrs. Patterson and Tyner 0.75 times)
of the sum of the officers base salary plus his current
annual incentive target bonus for the full year in which the
termination of employment occurred.
The severance payments associated with a
change-in-control
are based on a multiple (for Mr. Huseman 3.0
times; for Messrs. Krenek and Swift 2.0 times;
and for Messrs. Patterson and Tyner 1.0 times)
of the sum of the officers base salary plus the higher of
(i) his current annual incentive target bonus for the full
year in which the termination of employment occurred or
(ii) the highest annual incentive bonus received by him for
any of the last three fiscal years. Mr. Husemans
current agreement reduced his previous enhanced
change-in-control
benefit level that was agreed upon while the Company was a
private, controlled company prior to its initial public offering.
The officers employment agreements are currently effective
through December 31, 2008 (other than
Mr. Husemans, which is effective through
December 31, 2009) and will automatically renew for
subsequent one year periods unless notice of termination is
properly given by us or the officer. In the event that the
employment agreement of Messrs. Huseman, Krenek or Swift is
not renewed by us and a new employment agreement has not been
entered into, the officer will be entitled to the same severance
benefits described above. We believe this severance requirement
is reasonable and not uncommon for persons in the offices and
rendering the level of services performed by these individuals.
We selected higher multiples for terminations associated with a
change-in-control
to provide additional reasonable protections and benefits to the
officers in such event, while basing these
change-in-control
termination payments on a double trigger requiring
additional reasons such as Good Reason or the officer being
terminated without Cause. We believe that providing higher
multiples for
change-in-control
terminations for up to a one-year period after a change in
control will provide for their commitment to the Company or its
potential acquirer through a
change-in-control
event providing a continuity of leadership and preserving the
shareholders interests before and after a transaction.
The employment agreements for Messrs. Huseman, Krenek and
Swift also provide for gross up payments to the extent
Section 280G of the Internal Revenue Code would apply to
such payments as excess parachute payments. The
employment agreements for the other executive officers do not
contain these provisions.
For information regarding the
change-in-control
benefits to our chief executive officer based on a hypothetical
termination date of December 31, 2007, see Executive
Compensation Matters Potential Payments upon
Termination or
Change-in-Control.
Board Process. The Compensation
Committee of the Board of Directors reviews all compensation and
awards to executive officers. The Compensation Committee on its
own, based on input from the Nominating and Governance Committee
and discussions with other persons and advisors as it deems
appropriate, reviews the performance and compensation of the CEO
and approves his level of compensation. For the other executive
officers, the Compensation Committee receives recommendations
from the CEO. These recommendations are generally approved with
minor adjustments. The Compensation Committee grants options and
restricted stock, generally based on recommendations from the
CEO, pursuant to its authority under the Compensation Committee
Charter and the Companys 2003 Incentive Plan.
Compensation of Directors. The Compensation
Committee is also responsible for determining the annual
retainer, meeting fees, stock options and other benefits for
members of the Board of Directors. The Compensation
Committees objective with respect to director compensation
is to provide compensation incentives that attract and retain
individuals of outstanding ability.
14
Directors who are Company employees do not receive a retainer or
fees for service on the board or any committees. The Company
pays non-employee members of the board for their service as
directors. Directors who are not employees receive, as of March
2007:
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Annual director fee: |
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$35,000 |
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Committee Chairmen annual fees: |
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Audit Committee |
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$15,000 |
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Compensation Committee |
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$10,000 |
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Nominating and Corporate Governance
Committee |
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$10,000 |
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Attendance fees (per meeting): |
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Board |
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$2,000 (whether in person or telephonic) |
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Committee |
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$2,000 (whether in person or telephonic) |
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Equity-based compensation: |
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Upon election |
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37,500 shares of the Companys common stock at the
market price on the date of grant that vest ratably over three
years |
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Annual awards |
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In March 2006, each non-employee director was granted options to
purchase 5,000 shares. These options vest ratably in four
increments of 1,250 shares on January 1, 2008, 2009,
2010 and 2011. In March 2007, each non-employee director was
granted 4,000 shares of restricted stock that vest ratably
in four increments of 1,000 shares on March 15, 2009,
2010, 2011 and 2012. In March 2008, each non-employee director
was granted 4,000 shares of restricted stock that vest
ratably in four increments of 1,000 shares on
March 15, 2010, 2011, 2012 and 2013. Our Chairman was also
granted an additional 4,000 shares of restricted stock in
each of March 2007 and 2008 that was vested upon issuance as
consideration for services in his capacity as Chairman and in
lieu of the 2007 annual director fee (other than $7,500
previously paid to him) and in lieu of the 2008 annual director
fee, respectively. |
Directors are also reimbursed for reasonable out-of-pocket
expenses incurred in attending meetings of the board or
committees and for other reasonable expenses related to the
performance of their duties as directors. Director compensation
currently in effect for 2008 was based in part on a review and
recommendations by Pearl Meyer & Partners.
Compensation
Committee Report
The Compensation Committee has reviewed and discussed the above
Compensation Discussion and Analysis with management and, based
on such review and discussions, the Compensation Committee
recommended to the Board of Directors that the Compensation
Discussion and Analysis be included in this Proxy Statement.
This report of the Compensation Committee shall not be deemed
soliciting material, or to be filed with
the Securities and Exchange Commission or subject to
Regulation 14A or 14C or to the liabilities of
Section 18 of the Securities Exchange Act of 1934 (the
Exchange Act), except to the extent that the Company
specifically requests
15
that the information be treated as soliciting material or
specifically incorporates it by reference into a document filed
under the Securities Act of 1933 (the Securities
Act) or the Exchange Act.
William E. Chiles, Chairman
James S. DAgostino, Jr.
H. H. Wommack, III
Summary
Compensation Table
The following information relates to compensation paid by the
Company for fiscal 2006 and 2007 to the Companys Chief
Executive Officer, Chief Financial Officer and each of the other
three most highly compensated executive officers in fiscal 2006
and 2007:
Summary
Compensation Table
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Change in
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Pension
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Value and
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Non-Equity
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Nonqualified
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Incentive
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Deferred
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Stock
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Option
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Plan
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Compensation
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All Other
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Salary
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Bonus
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Awards
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Awards
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Compensation
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Earnings
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Compensation
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Total
|
Name and Principal Position
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|
Year
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|
($)(1)
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($)
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($)
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($)
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(2)
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($)
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($)(3)
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($)
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Kenneth V. Huseman,
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President and Chief
Executive Officer
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2007
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$
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515,384
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$
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799,460
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$
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322,565
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$
|
400,000
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|
|
$
|
|
|
|
$
|
8,800
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|
|
$
|
2,046,209
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|
|
|
|
2006
|
|
|
$
|
382,692
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|
|
|
|
|
|
$
|
785,250
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|
|
$
|
256,281
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|
|
$
|
400,000
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|
|
$
|
|
|
|
$
|
16,142
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|
|
$
|
1,840,365
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Alan Krenek,
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|
Senior Vice President,
Chief Financial Officer,
Treasurer and Secretary
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2007
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$
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258,462
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$
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28,704
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|
|
$
|
244,738
|
|
|
$
|
240,000
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|
|
$
|
|
|
|
$
|
8,800
|
|
|
$
|
780,704
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|
|
|
|
2006
|
|
|
$
|
227,308
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|
|
|
|
|
|
$
|
|
|
|
$
|
235,719
|
|
|
$
|
240,000
|
|
|
$
|
|
|
|
$
|
10,619
|
|
|
$
|
713,646
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Charles W. Swift,
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|
Senior Vice President,
Rig and Truck Operations
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2007
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$
|
200,000
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|
|
|
|
|
|
$
|
104,474
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|
|
$
|
87,058
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|
|
$
|
160,000
|
|
|
$
|
|
|
|
$
|
10,597
|
|
|
$
|
562,129
|
|
|
|
|
2006
|
|
|
$
|
176,154
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|
|
|
|
|
|
$
|
87,250
|
|
|
$
|
76,067
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|
|
$
|
200,000
|
|
|
$
|
|
|
|
$
|
12,081
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|
|
$
|
551,552
|
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T.M. Roe Patterson,
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|
Group Vice President,
Completion and Remedial Services
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2007
|
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$
|
167,692
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|
|
|
|
|
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$
|
17,224
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|
|
$
|
32,051
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|
|
$
|
140,000
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|
|
$
|
|
|
|
$
|
18,764
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|
|
$
|
375,731
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|
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|
|
2006
|
|
|
$
|
118,462
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|
|
|
|
|
|
$
|
|
|
|
$
|
34,079
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|
|
$
|
140,000
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|
|
$
|
|
|
|
$
|
4,542
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|
|
$
|
297,083
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James E. Tyner
|
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|
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|
Vice President, Human
Resources
|
|
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2007
|
|
|
$
|
158,462
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|
|
|
|
|
|
$
|
11,480
|
|
|
$
|
35,937
|
|
|
$
|
80,000
|
|
|
$
|
|
|
|
$
|
7,219
|
|
|
$
|
293,098
|
|
|
|
|
2006
|
|
|
$
|
135,891
|
|
|
|
|
|
|
$
|
|
|
|
$
|
60,313
|
|
|
$
|
140,000
|
|
|
$
|
|
|
|
$
|
6,484
|
|
|
$
|
342,688
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
|
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|
|
|
|
(1) |
|
Under the terms of their employment agreements,
Messrs. Huseman, Krenek, Swift, Patterson and Tyner are
entitled to the compensation described under Employment
Agreements below. |
|
(2) |
|
Reflect aggregate bonus payments made in accordance with the
metrics under our 2006 annual incentive compensation plan and
division-level Quarterly Incentive Bonus Plan.
Messrs. Huseman and Krenek did not participate in any of
the Quarterly Incentive Bonus Plans during 2006 or 2007 and
received only an annual cash bonus in early 2007 and 2008,
respectively. Mr. Swift participated in the division-level
Quarterly Incentive Bonus Plan for the first three quarters of
2006 and received an annual cash bonus in early 2007 and
participated in the Quarterly Incentive Bonus Plan in the third
and fourth quarters of 2007 and received an annual cash bonus in
early 2008. Messrs. Patterson and Tyner each participated
in the Quarterly Incentive Bonus Plans in 2006 and 2007 and
received an annual cash bonus in early 2007 and 2008,
respectively. |
|
(3) |
|
Includes employer contributions to Executive Deferred
Compensation Plan for 2006 as follows: for Huseman, $16,142; for
Krenek, $10,619; for Swift, $2,481; and for Tyner, $6,484.
Includes employer contributions to Executive Deferred
Compensation Plan for 2007 as follows: for Huseman, $8,800; for
Krenek, $8,800; for |
16
|
|
|
|
|
Swift, $457; for Patterson, $8,624; and for Tyner, $7,218.
Includes vehicle allowance of $9,600 in each of 2006 and 2007
for Mr. Swift and of $4,542 for 2006 and $9,600 for 2007
for Mr. Patterson. |
Grants of
Plan-Based Awards
The following table sets forth information concerning grants of
awards to each of our named executive officers under our 2003
Incentive Plan during fiscal 2007:
Grants of
Plan-Based Awards 2007
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|
|
|
|
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|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
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|
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|
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|
|
Awards:
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
Estimated Future Payouts
|
|
|
Number of
|
|
|
Number of
|
|
|
Exercise or
|
|
|
|
|
|
|
Under Non-Equity Incentive
|
|
|
Under Equity Incentive
|
|
|
Shares of
|
|
|
Securities
|
|
|
Base Price
|
|
|
|
|
|
|
Plan Awards
|
|
|
Plan Awards
|
|
|
Stock or
|
|
|
Underlying
|
|
|
of Option
|
|
|
|
Grant
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Units
|
|
|
Options
|
|
|
Awards
|
|
Name
|
|
Date
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($/Sh)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
(k)
|
|
|
Kenneth V. Huseman
|
|
|
03/15/07
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/15/07
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
22.66
|
|
Alan Krenek
|
|
|
03/15/07
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/15/07
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
22.66
|
|
Charles W. Swift
|
|
|
03/15/07
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/15/07
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
22.66
|
|
T.M. Roe Patterson
|
|
|
03/15/07
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/15/07
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
22.66
|
|
James E. Tyner
|
|
|
03/15/07
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of restricted stock and options to purchase shares of our
common stock were granted by our Compensation Committee to
certain of our employees, including our named executive
officers, on March 15, 2007. The shares of restricted stock
vest in one-fourth increments on each of March 15, 2009,
2010, 2011 and 2012. The options have an exercise price of
$22.66, vest in one-fourth increments on each of January 1,
2009, 2010, 2011 and 2012, and expire on March 15, 2017.
The shares of restricted stock and options were granted pursuant
to our 2003 Incentive Plan.
Employment
Agreements
On December 29, 2006, we entered into new employment
agreements with certain of our executive officers, each
effective as of December 31, 2006. These new agreements
contain the current base salaries being paid to the executive
officers but amend certain provisions relating to severance and
non-competition matters. Pursuant to our employment agreement
effective December 31, 2006 with Kenneth V. Huseman, our
President and Chief Executive Officer, Mr. Huseman is
entitled to an initial annual base salary of $400,000. Under
this employment agreement, Mr. Huseman is eligible from
time to time to receive grants of stock options and other
long-term equity incentive compensation under our Second Amended
and Restated 2003 Incentive Plan. If Mr. Husemans
employment is terminated for certain reasons, he would be
entitled to a lump sum severance payment equal to three times
the sum of his base salary plus his current annual incentive
target bonus for the full year in which the termination of
employment occurred. Additionally, if Mr. Husemans
employment is terminated for certain reasons within the six
months preceding or the twelve months following a change in
control of our company, he would be entitled to a lump sum
severance payment equal to three times the sum of his base
salary plus the higher of (i) his current annual incentive
target bonus for the full year in which the termination of
employment occurred or (ii) the highest annual incentive
bonus received by him for any of the last three fiscal years.
Mr. Husemans employment agreement is effective
through December 31, 2009 and will automatically renew for
subsequent one year periods unless notice of termination is
properly given by us or Mr. Huseman. In the event that
Mr. Husemans employment agreement is not renewed by
us and a new employment agreement has not been entered into,
Mr. Huseman will be entitled to the same severance benefits
described above.
We have also entered into employment agreements effective
December 31, 2006 with Alan Krenek, our Senior Vice
President, Chief Financial Officer, Treasurer and Secretary, and
Charles W. Swift, our Senior Vice
17
President Rig and Truck Operations. Pursuant to
these agreements, Mr. Krenek is entitled to an initial base
salary of $240,000 and Mr. Swift is entitled to an initial
base salary of $200,000. Each of Messrs. Krenek and Swift
will also be entitled to an annual performance bonus if certain
performance criteria are met. Under these employment agreements,
the officer is eligible from time to time to receive grants of
stock options and other long-term equity incentive compensation
under our Second Amended and Restated 2003 Incentive Plan. If
the officers employment is terminated for certain reasons,
he would be entitled to a lump sum severance payment equal to
1.50 times the sum of his base salary plus his current annual
incentive target bonus for the full year in which the
termination of employment occurred. Additionally, if the
officers employment is terminated for certain reasons
within the six months preceding or the twelve months following a
change in control of our company, he would be entitled to a lump
sum severance payment equal to two times the sum of his base
salary plus the higher of (i) his current annual incentive
target bonus for the full year in which the termination of
employment occurred or (ii) the highest annual incentive
bonus received by him for any of the last three fiscal years.
The officers employment agreement is effective through
December 31, 2007 and will automatically renew for
subsequent one year periods unless notice of termination is
properly given by us or the officer. In the event that the
officers employment agreement is not renewed by us and a
new employment agreement has not been entered into, the officer
will be entitled to the same severance benefits described above.
We have also entered into employment agreements effective
December 31, 2006 with the following two other executive
officers who were named executive officer as of
December 31, 2006, Thomas Monroe Patterson, our Group Vice
President Completion and Remedial Services, and
James E. Tyner, our Vice President Human Resources,
as well as Mark David Rankin, our Vice President
Risk Management. Pursuant to these agreements, these officers
are entitled to the following initial base salaries:
Mr. Tyner, $140,000; Mr. Patterson, $140,000; and
Mr. Rankin, $130,000. Each of these officers will also be
entitled to an annual performance bonus if certain performance
criteria are met. Under these employment agreements, the officer
is eligible from time to time to receive grants of stock options
and other long-term equity incentive compensation under our
Second Amended and Restated 2003 Incentive Plan. If the
officers employment is terminated for certain reasons, he
would be entitled to a lump sum severance payment equal to 0.75
times the sum of his base salary plus his current annual
incentive target bonus for the full year in which the
termination of employment occurred. Additionally, if the
officers employment is terminated for certain reasons
within the six months preceding or the twelve months following a
change in control of our company, he would be entitled to a lump
sum severance payment equal to one times the sum of his base
salary plus the higher of (i) his current annual incentive
target bonus for the full year in which the termination of
employment occurred or (ii) the highest annual incentive
bonus received by him for any of the last three fiscal years.
The officers employment agreement is effective through
December 31, 2007 and will automatically renew for
subsequent one year periods unless notice of termination is
properly given by us or the officer. In the event that the
officers employment agreement is not renewed by us and a
new employment agreement has not been entered into within the
six months preceding or the twelve months following a change in
control of our company, the officer will be entitled to the same
severance benefits described above.
As consideration for us entering into the above employment
agreements, Messrs. Huseman, Krenek, Swift, Harrison,
Tyner, Patterson and Rankin have each agreed in his employment
agreement that, for a period of 6 months following the
termination of his employment by us without cause or by him for
good reason, and for a period of two years following the
termination of his employment for retirement or any other
reason, he will not, among other things, engage in any business
competitive with ours, render services to any entity who is
competitive with us or solicit business from certain of our
customers or potential customers. These non-competition
restrictions shall not apply in the event that such termination
is within 12 months of a change in control of our business.
Additionally, the officer has agreed not to solicit any of our
employees to reduce or adversely affect their employment with us
for a period of two years from such officers date of
termination, for whatever reason. The employment agreements for
Messrs. Huseman, Krenek and Swift also provide for gross up
payments to the extent Section 280G of the Internal Revenue
Code would apply to such payments as excess
parachute payments. The employment agreements for
the other executive officers do not contain these provisions.
In March 2008, the Board approved 2008 salaries for each of the
named executive officers as follows: Huseman
$550,000; Krenek $300,000; Swift
$250,000; Patterson $230,000; and Tyner
$190,000.
18
Outstanding
Equity Awards at Fiscal Year-End
The following table sets forth information concerning
unexercised stock options and unvested restricted stock of each
of our named executive officers as of December 31, 2007:
Outstanding
Equity Awards at Fiscal Year-End 2007
|
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|
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Option Awards
|
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Stock Awards
|
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|
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Equity
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Incentive
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Plan
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Equity
|
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Awards:
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Equity
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Incentive
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Market
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Incentive
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Plan
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or Payout
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Plan
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Awards:
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Value of
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Awards:
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Market
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Number of
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Unearned
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Number of
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Number of
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Number
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|
|
|
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Number
|
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Value of
|
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Unearned
|
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Shares,
|
|
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Securities
|
|
Securities
|
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of Securities
|
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|
|
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|
of Shares
|
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Shares or
|
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Shares,
|
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Units or
|
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Underlying
|
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Underlying
|
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Underlying
|
|
|
|
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or Units of
|
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Units of
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|
Units or
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Other
|
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Unexercised
|
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Unexercised
|
|
Unexercised
|
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Option
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|
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Stock That
|
|
Stock That
|
|
OtherRights
|
|
Rights
|
|
|
Options
|
|
Options
|
|
Unearned
|
|
Exercise
|
|
Option
|
|
Have Not
|
|
Have Not
|
|
that Have
|
|
That Have
|
|
|
(#)
|
|
(#)
|
|
Options
|
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Price
|
|
Expiration
|
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Vested
|
|
Vested
|
|
Not Vested
|
|
Not Vested
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Name
|
|
Exercisable
|
|
Unexercisable
|
|
(#)
|
|
($)
|
|
Date
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
Kenneth V. Huseman
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/13/2001
|
|
|
264,405
|
|
|
|
|
|
|
|
|
|
|
$
|
4.00
|
|
|
|
8/12/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/5/2003
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
$
|
4.00
|
|
|
|
5/4/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/22/2004(1)
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|
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|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
112,500
|
|
|
$
|
2,469,375
|
|
|
|
|
|
|
|
|
|
3/2/2005(2)
|
|
|
25,000
|
|
|
|
75,000
|
|
|
|
|
|
|
$
|
6.98
|
|
|
|
3/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2006(3)
|
|
|
|
|
|
|
60,000
|
|
|
|
|
|
|
$
|
26.84
|
|
|
|
3/14/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2007(5)
|
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|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
5,000
|
|
|
$
|
109,750
|
|
|
|
|
|
|
|
|
|
3/15/2007(6)
|
|
|
|
|
|
|
60,000
|
|
|
|
|
|
|
$
|
22.66
|
|
|
|
3/15/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan Krenek
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
1/26/2005(4)
|
|
|
54,670
|
|
|
|
33,330
|
|
|
|
|
|
|
$
|
5.16
|
|
|
|
1/25/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/2/2005(2)
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|
|
6,250
|
|
|
|
18,750
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|
|
|
|
|
|
$
|
6.98
|
|
|
|
3/1/2015
|
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|
|
|
|
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|
|
|
|
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|
|
|
|
|
|
3/15/2006(3)
|
|
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|
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|
25,000
|
|
|
|
|
|
|
$
|
26.84
|
|
|
|
3/14/2016
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
3/15/2007(5)
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|
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|
|
|
|
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|
|
|
$
|
|
|
|
|
|
|
|
|
10,000
|
|
|
$
|
219,500
|
|
|
|
|
|
|
|
|
|
3/15/2007(6)
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
$
|
22.66
|
|
|
|
3/15/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles W. Swift
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/13/2001
|
|
|
33,225
|
|
|
|
|
|
|
|
|
|
|
$
|
4.00
|
|
|
|
8/12/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/5/2003
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
$
|
4.00
|
|
|
|
5/4/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/22/2004(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
12,500
|
|
|
$
|
274,375
|
|
|
|
|
|
|
|
|
|
3/2/2005(2)
|
|
|
8,750
|
|
|
|
26,250
|
|
|
|
|
|
|
$
|
6.98
|
|
|
|
3/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2006(3)
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
$
|
26.84
|
|
|
|
3/14/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2007(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
6,000
|
|
|
$
|
131,700
|
|
|
|
|
|
|
|
|
|
3/15/2007(6)
|
|
|
|
|
|
|
12,000
|
|
|
|
|
|
|
$
|
22.66
|
|
|
|
3/15/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T.M. Roe Patterson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2006(3)
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
$
|
26.84
|
|
|
|
3/14/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2007(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
6,000
|
|
|
$
|
131,700
|
|
|
|
|
|
|
|
|
|
3/15/2007(6)
|
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
$
|
22.66
|
|
|
|
3/15/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James E. Tyner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/2/2005(2)
|
|
|
500
|
|
|
|
7,500
|
|
|
|
|
|
|
$
|
6.98
|
|
|
|
3/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2006(3)
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
$
|
26.84
|
|
|
|
3/14/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2007(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
4,000
|
|
|
$
|
87,800
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Unvested shares of restricted stock vest on February 24,
2008. |
|
(2) |
|
Unvested options vest in one-third increments on March 1,
2008, 2009 and 2010. |
|
(3) |
|
Unvested options vest in one-fourth increments on
January 1, 2008, 2009, 2010 and 2011. |
|
(4) |
|
Unvested options vest on January 2, 2008. |
|
(5) |
|
Unvested shares of restricted stock vest in one-fourth
increments on March 15, 2009, 2010, 2011 and 2012. |
|
(6) |
|
Unvested options vest in one-fourth increments on
January 1, 2009, 2010, 2011 and 2012. |
19
Option
Exercises and Stock Vested
The following table sets forth information concerning exercises
of stock options and vesting of restricted stock of each of our
named executive officers during fiscal 2007:
Option
Exercises and Stock Vested 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
|
Shares
|
|
|
Value
|
|
|
|
Acquired
|
|
|
Realized
|
|
|
Acquired
|
|
|
Realized on
|
|
|
|
on Exercise
|
|
|
on Exercise
|
|
|
on Vesting
|
|
|
Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
Kenneth V. Huseman
|
|
|
|
|
|
|
|
|
|
|
112,500
|
|
|
$
|
2,557,125
|
|
Alan Krenek
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles W. Swift
|
|
|
9,000
|
|
|
$
|
199,000
|
|
|
|
12,500
|
|
|
$
|
284,125
|
|
T.M. Roe Patterson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James E. Tyner
|
|
|
10,800
|
|
|
$
|
216,977
|
|
|
|
|
|
|
|
|
|
Nonqualified
Deferred Compensation Plans
Nonqualified
Deferred Compensation 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
Contributions
|
|
|
Contributions
|
|
|
Earnings in
|
|
|
Withdrawals/
|
|
|
Balance at
|
|
|
|
in Last FY
|
|
|
in Last FY
|
|
|
Last FY
|
|
|
Distributions
|
|
|
Last FY
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
(a)
|
|
(b)(1)
|
|
|
(c)(2)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
Kenneth V. Huseman
|
|
$
|
83,769
|
|
|
$
|
8,800
|
|
|
$
|
37,389
|
|
|
$
|
|
|
|
$
|
223,005
|
|
Alan Krenek
|
|
$
|
40,923
|
|
|
$
|
10,781
|
|
|
$
|
1,949
|
|
|
$
|
|
|
|
$
|
101,316
|
|
Charles W. Swift
|
|
$
|
5,713
|
|
|
$
|
6,975
|
|
|
$
|
(1,894
|
)
|
|
$
|
|
|
|
$
|
79,169
|
|
T.M. Roe Patterson
|
|
$
|
10,780
|
|
|
$
|
8,624
|
|
|
$
|
754
|
|
|
$
|
|
|
|
$
|
20,158
|
|
James E. Tyner
|
|
$
|
93,243
|
|
|
$
|
10,235
|
|
|
$
|
10,392
|
|
|
$
|
|
|
|
$
|
167,312
|
|
|
|
|
(1) |
|
Executive contributions in last fiscal year are included in such
executives salary and bonus amounts, as applicable, as
reported in the Summary Compensation Table. |
|
(2) |
|
Registrant contributions in last fiscal year are included in all
other compensation in the Summary Compensation Table. |
Each of our named executive officers is permitted to participate
in our Executive Deferred Compensation Plan. An executive
permitted to participate in this plan may defer a portion of his
compensation, up to a maximum of 50% of his annual salary and
100% of his annual cash bonus, into his plan account. In
addition, the Company makes an annual matching contribution to
each executives plan account, with the Company matching
100% of the first 3% of the executives salary, and 50% of
the next 2% of the executives salary, up to a plan-year
maximum of $8,800. The Company may also make discretionary
contributions into each executives plan account from time
to time as it deems appropriate. Subject to certain exceptions,
the Company matching and discretionary contributions vest in
one-fourth increments determined by such executives years
of service with the Company, with vesting beginning after two
years of service, and full vesting occurring after five years of
service. The executive is always fully vested in his own
contributions to his plan account. Earnings on an
executives plan account for any given year are dependent
upon the investment options chosen by the executive for such
plan account. Generally, participants under this plan may elect
when and how distributions of vested amounts in a plan account
will be made, including whether such distributions are in annual
installments or a lump sum. However, certain key employees,
including the named executive officers, may not receive
distributions before a date six months after the date such
executive separates service from the Company for any reason
other than death or disability.
20
Potential
Payments upon Termination or
Change-in-Control
Each of our named executive officers is party to an employment
agreement as described above. Pursuant to these agreements, the
officers are entitled to certain severance benefits. In
addition, the grant agreements relating to our executives
stock option and restricted stock awards provide for accelerated
vesting under certain circumstances. The tables below quantify
amounts that would have been paid assuming the following events
took place on December 31, 2007:
Potential
Post-employment Payments as of December 31,
2007 Kenneth V. Huseman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CIC with
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
Control
|
|
|
for Good
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
by Company
|
|
|
by Executive
|
|
|
without
|
|
|
Reason or
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Retirement
|
|
|
for
|
|
|
Except for
|
|
|
for Good
|
|
|
Termination
|
|
|
without
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
(1)
|
|
|
Cause(2)
|
|
|
Cause
|
|
|
Reason(3)
|
|
|
(4)
|
|
|
Cause
|
|
|
Death
|
|
|
Disability
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance(5)
|
|
$
|
|
|
|
|
N/A
|
|
|
$
|
|
|
|
$
|
3,150,000
|
|
|
$
|
3,150,000
|
|
|
$
|
|
|
|
$
|
3,150,000
|
|
|
$
|
|
|
|
$
|
|
|
Bonus(6)
|
|
$
|
|
|
|
|
N/A
|
|
|
$
|
|
|
|
$
|
525,000
|
|
|
$
|
525,000
|
|
|
$
|
|
|
|
$
|
525,000
|
|
|
$
|
525,000
|
|
|
$
|
525,000
|
|
Long-term Incentive(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acceleration of Unvested Stock Options
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,122,750
|
|
|
$
|
|
|
|
$
|
|
|
Acceleration of Unvested Restricted Stock
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,579,125
|
|
|
$
|
2,579,125
|
|
|
$
|
|
|
|
$
|
|
|
Benefits & Perquisites(8):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employer Contributions to Executive Deferred Compensation Plan
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
COBRA Continuation
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
20,153
|
|
|
$
|
20,153
|
|
|
|
N/A
|
|
|
$
|
20,153
|
|
|
$
|
|
|
|
$
|
|
|
280G Tax
Gross-up
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,695,153
|
|
|
$
|
3,695,153
|
|
|
$
|
2,579,125
|
|
|
$
|
7,397,028
|
|
|
$
|
525,000
|
|
|
$
|
525,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential
Post-employment Payments as of December 31,
2007 Alan Krenek
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CIC with
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
Control
|
|
|
for Good
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
by Company
|
|
|
by Executive
|
|
|
without
|
|
|
Reason or
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Retirement
|
|
|
for
|
|
|
Except for
|
|
|
for Good
|
|
|
Termination
|
|
|
without
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
(1)
|
|
|
Cause(2)
|
|
|
Cause
|
|
|
Reason(3)
|
|
|
(4)
|
|
|
Cause
|
|
|
Death
|
|
|
Disability
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance(5)
|
|
$
|
|
|
|
|
N/A
|
|
|
$
|
|
|
|
$
|
780,000
|
|
|
$
|
780,000
|
|
|
$
|
|
|
|
$
|
1,040,000
|
|
|
$
|
|
|
|
$
|
|
|
Bonus(6)
|
|
$
|
|
|
|
|
N/A
|
|
|
$
|
|
|
|
$
|
260,000
|
|
|
$
|
260,000
|
|
|
$
|
|
|
|
$
|
260,000
|
|
|
$
|
260,000
|
|
|
$
|
260,000
|
|
Long-term Incentive(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acceleration of Unvested Stock Options
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
840,299
|
|
|
$
|
|
|
|
$
|
|
|
Acceleration of Unvested Restricted Stock
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
219,500
|
|
|
$
|
219,500
|
|
|
$
|
|
|
|
$
|
|
|
Benefits & Perquisites(8):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employer Contributions to Executive Deferred Compensation Plan
|
|
$
|
|
|
|
$
|
18,112
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
18,112
|
|
|
$
|
18,112
|
|
|
$
|
18,112
|
|
COBRA Continuation
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
20,493
|
|
|
$
|
20,493
|
|
|
|
N/A
|
|
|
$
|
20,493
|
|
|
$
|
|
|
|
$
|
|
|
280G Tax
Gross-up
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
18,112
|
|
|
$
|
|
|
|
$
|
1,060,493
|
|
|
$
|
1,060,493
|
|
|
$
|
219,500
|
|
|
$
|
2,398,404
|
|
|
$
|
278,112
|
|
|
$
|
278,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
Potential
Post-employment Payments as of December 31,
2007 Charles W. Swift
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CIC with
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
Control
|
|
|
for Good
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
by Company
|
|
|
by Executive
|
|
|
without
|
|
|
Reason or
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Retirement
|
|
|
for
|
|
|
Except for
|
|
|
for Good
|
|
|
Termination
|
|
|
without
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
(1)
|
|
|
Cause(2)
|
|
|
Cause
|
|
|
Reason(3)
|
|
|
(4)
|
|
|
Cause
|
|
|
Death
|
|
|
Disability
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance(5)
|
|
$
|
|
|
|
|
N/A
|
|
|
$
|
|
|
|
$
|
540,000
|
|
|
$
|
540,000
|
|
|
$
|
|
|
|
$
|
800,000
|
|
|
$
|
|
|
|
$
|
|
|
Bonus(6)
|
|
$
|
|
|
|
|
N/A
|
|
|
$
|
|
|
|
$
|
160,000
|
|
|
$
|
160,000
|
|
|
$
|
|
|
|
$
|
160,000
|
|
|
$
|
160,000
|
|
|
$
|
160,000
|
|
Long-term Incentive(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acceleration of Unvested Stock Options
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
392,963
|
|
|
$
|
|
|
|
$
|
|
|
Acceleration of Unvested Restricted Stock
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
406,075
|
|
|
$
|
406,075
|
|
|
$
|
|
|
|
$
|
|
|
Benefits & Perquisites(8):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employer Contributions to Executive Deferred Compensation Plan
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
COBRA Continuation
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
20,493
|
|
|
$
|
20,493
|
|
|
|
N/A
|
|
|
$
|
20,493
|
|
|
$
|
|
|
|
$
|
|
|
280G Tax
Gross-up
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
720,493
|
|
|
$
|
720,493
|
|
|
$
|
406,075
|
|
|
$
|
1,779,531
|
|
|
$
|
160,000
|
|
|
$
|
160,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential
Post-employment Payments as of December 31,
2007 T.M. Roe Patterson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CIC with
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
Control
|
|
|
for Good
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
by Company
|
|
|
by Executive
|
|
|
without
|
|
|
Reason or
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Retirement
|
|
|
for
|
|
|
Except for
|
|
|
for Good
|
|
|
Termination
|
|
|
without
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
(1)
|
|
|
Cause(2)
|
|
|
Cause
|
|
|
Reason(3)
|
|
|
(4)
|
|
|
Cause
|
|
|
Death
|
|
|
Disability
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance(5)
|
|
$
|
|
|
|
|
N/A
|
|
|
$
|
|
|
|
$
|
229,500
|
|
|
$
|
229,500
|
|
|
$
|
|
|
|
$
|
306,000
|
|
|
$
|
|
|
|
$
|
|
|
Bonus(6)
|
|
$
|
|
|
|
|
N/A
|
|
|
$
|
|
|
|
$
|
136,000
|
|
|
$
|
136,000
|
|
|
$
|
|
|
|
$
|
136,000
|
|
|
$
|
136,000
|
|
|
$
|
136,000
|
|
Long-term Incentive(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acceleration of Unvested Stock Options
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Acceleration of Unvested Restricted Stock
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
131,700
|
|
|
$
|
|
|
|
$
|
|
|
Benefits & Perquisites(8):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employer Contributions to Executive Deferred Compensation Plan
|
|
$
|
|
|
|
$
|
6,959
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
6,959
|
|
|
$
|
6,959
|
|
|
$
|
6,959
|
|
COBRA Continuation
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
14,676
|
|
|
$
|
14,676
|
|
|
|
N/A
|
|
|
$
|
14,676
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
6,959
|
|
|
$
|
|
|
|
$
|
380,176
|
|
|
$
|
380,176
|
|
|
$
|
|
|
|
$
|
597,335
|
|
|
$
|
144,959
|
|
|
$
|
144,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
Potential
Post-employment Payments as of December 31,
2007 James E. Tyner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CIC with
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
Control
|
|
|
for Good
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
by Company
|
|
|
by Executive
|
|
|
without
|
|
|
Reason or
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
for
|
|
|
except for
|
|
|
for Good
|
|
|
Termination
|
|
|
Without
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Retirement(1)
|
|
|
Cause(2)
|
|
|
Cause
|
|
|
Reason(3)
|
|
|
(4)
|
|
|
Cause
|
|
|
Death
|
|
|
Disability
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance(5)
|
|
$
|
|
|
|
|
N/A
|
|
|
$
|
|
|
|
$
|
180,000
|
|
|
$
|
180,000
|
|
|
$
|
|
|
|
$
|
300,000
|
|
|
$
|
|
|
|
$
|
|
|
Bonus(6)
|
|
$
|
|
|
|
|
N/A
|
|
|
$
|
|
|
|
$
|
80,000
|
|
|
$
|
80,000
|
|
|
$
|
|
|
|
$
|
80,000
|
|
|
$
|
80,000
|
|
|
$
|
80,000
|
|
Long-term Incentive(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acceleration of Unvested Stock Options
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
112,275
|
|
|
$
|
|
|
|
$
|
|
|
Acceleration of Unvested Restricted Stock
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
87,800
|
|
|
$
|
87,800
|
|
|
$
|
|
|
|
$
|
|
|
Benefits & Perquisites(8):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employer Contributions to Executive Deferred Compensation Plan
|
|
$
|
|
|
|
$
|
12,831
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
12,831
|
|
|
$
|
12,831
|
|
|
$
|
12,831
|
|
COBRA Continuation
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
14,676
|
|
|
$
|
14,676
|
|
|
|
N/A
|
|
|
$
|
14,676
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
12,831
|
|
|
$
|
|
|
|
$
|
274,676
|
|
|
$
|
274,676
|
|
|
$
|
87,800
|
|
|
$
|
607,582
|
|
|
$
|
92,831
|
|
|
$
|
92,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Retirement. Under the executives
employment agreement, Retirement is defined for
purposes of Mr. Huseman as attaining age 60 and
accruing five years of service with the Company, and for
purposes of the other named executive officers, as attaining
age 65 and accruing ten years of service. For purposes of
the acceleration of unvested stock options,
Retirement shall mean when the executive has
attained the age of 65. |
|
(2) |
|
Cause. Under the executives employment
agreement, the definition of Cause includes, among
other things, conviction of the officer of a crime involving
moral turpitude or a felony, commission by the officer of fraud
upon, or misappropriation of funds of, the Company, knowing
engagement by the officer in any activity in direct competition
with the Company, and a material breach by the officer of such
employment agreement. For purposes of the acceleration of
unvested stock options, Cause shall have the same
meaning as such term is defined in the 2003 Incentive Plan. For
purposes of the acceleration of unvested restricted stock,
Cause shall have the same meaning as such term is
defined in the executives employment agreement. |
|
(3) |
|
Good Reason. Under the executives
employment agreement, the definition of Good Reason
includes, among other things, a reduction in the officers
base salary or bonus opportunity, a relocation of more than
fifty miles of the officers principal office, a
substantial and adverse change in the officers duties,
control, authority, status or position, failure of he Company to
continue in effect any pension plan, life insurance plan,
health-and-accident
plan, retirement plan, disability plan, stock option plan,
deferred compensation plan or executive incentive compensation
plan under which the officer was receiving material benefits, or
materially reducing his benefits under any such plan, and any
material breach by the Company of any other material provision
of such employment agreement. Prior to terminating his
employment for Good Reason, the officer must comply with the
notice provisions of his employment agreement. For purposes of
the acceleration of unvested stock options, Good
Reason shall have the same meaning as such term is defined
in the 2003 Incentive Plan, except that any reduction in the
executives salary, bonus opportunity or benefit must be
following a change in control. For purposes of the acceleration
of unvested restricted stock, Good Reason shall have
the same meaning as such term is defined in the executives
employment agreement. |
|
(4) |
|
Change in Control. Under the executives
employment agreement, the definition of Change in
Control (or CIC) includes, subject to certain
exceptions, (i) acquisition by any individual, entity or
group of beneficial ownership of 50% or more of either the then
outstanding shares of common stock of the Company or the
combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of
directors, (ii) approval by the shareholders of the Company
of a merger, unless immediately following such merger,
substantially all of the holders of the Companys
securities immediately prior to merger beneficially own more
than 50% of the common stock of the corporation resulting from
such merger, and (iii) the sale or other disposition of all
or substantially all of the assets of the Company. For purposes
of the |
23
|
|
|
|
|
acceleration of unvested stock options, Change in
Control shall have the same meaning as such term is
defined in the 2003 Incentive Plan. For purposes of the
acceleration of unvested restricted stock, Change in
Control shall have the same meaning as such term is
defined in the executives employment agreement. For
purposes of the executive deferred compensation plan,
Change in Control shall mean, subject to certain
exceptions, (i) the acquisition by any person other than
DLJ Merchant Banking and its affiliates of 40% or more of the
combined voting power of the Companys securities,
(ii) the directors serving on the Companys board of
directors at the time the plan was adopted ceasing to constitute
a majority of the Companys board of directors, or
(iii) the liquidation or dissolution of, or the sale of
substantially all of the assets of, the Company. |
|
(5) |
|
Severance. |
|
|
|
Termination except for Cause, termination of his own
employment for Good Reason or Retirement |
Executive would be entitled to a lump sum severance payment
equal to a multiple of the sum of his base salary plus his
current annual incentive target bonus for the full year in which
the termination of employment occurred. For Mr. Huseman,
the multiple is three, for Messrs. Krenek and Swift, the
multiple is 1.50, and for Messrs. Patterson and Tyner, the
multiple is 0.75. During 2007, the annual incentive target bonus
for our named executive officers utilized was 100% for
Messrs. Huseman and Krenek, 80% for Messrs. Swift and
Harrison and 50% for Mr. Tyner, in each case of their
annual salary as of the end of the fiscal year. We paid annual
incentive bonuses for each of our named executive officers of
between approximately 96% and 50% of their annual salary as of
the end of the fiscal year.
|
|
|
|
|
Termination except for Cause, termination of his own
employment for Good Reason or Retirement within the six months
preceding or the twelve months following a Change in Control |
Executive would be entitled to a lump sum severance payment
equal to a multiple of the sum of his base salary plus the
higher of (i) his current annual incentive target bonus for
the full year in which the termination of employment occurred or
(ii) the highest annual incentive bonus received by him for
any of the last three fiscal years. For Mr. Huseman, the
multiple is three, for Messrs. Krenek and Swift, the
multiple is two, and for Messrs. Patterson and Tyner, the
multiple is one.
|
|
|
(6) |
|
Bonus. In addition to severance payments, the
named executive officers are entitled to a pro rata portion of
their estimated bonus upon certain events of termination. The
above tables reflect the annual incentive target bonus for the
named executive officers for 2007. |
|
(7) |
|
Long-Term Incentive. |
|
|
|
Stock Options |
In the event of a termination by the Company for Cause or
voluntary retirement by the executive, all vested and unvested
stock options expire on the termination date. In the event of
Retirement, all unvested stock options expire on the termination
date and all vested options expire six months after the
termination date. In the event of death or disability, all
unvested stock options expire on the termination date and all
vested options expire one year after the termination date. In
the event of any other involuntary or voluntary termination, all
unvested stock options expire on the termination date and all
vested options expire 90 days after the termination date.
In the event of a Change in Control, if the executives
employment is terminated by the Company other than for Cause or
terminated by the executive for Good Reason within two years
after the Change in Control, the executive shall become
immediately vested in all unvested stock options pursuant to the
terms of the grant agreement and the 2003 Incentive Plan.
All unvested shares of restricted stock will be forfeited by the
executive if the executives employment is terminated by
the Company for Cause or by the executive other than for Good
Reason or as a result of a Change in Control. For awards granted
after March 1, 2005, in the event of a Change in Control,
if the executives employment is terminated by the Company
other than for Cause or terminated by the executive for Good
Reason within two years after the Change in Control, the
executive shall become immediately vested in all unvested stock
options pursuant to the terms of the grant agreement. For awards
on or prior to March 1, 2005, in the event of a Change in
Control, the executive shall become immediately vested in all
unvested shares of restricted stock pursuant to the 2003
Incentive Plan.
24
|
|
|
(8) |
|
Other Benefits and Perquisites. |
|
|
|
Employer Contributions to Executive Deferred Compensation
Plan |
The executive shall become fully vested in all unvested matching
and discretionary contributions made by the Company into his
plan account in the event (i) he obtains the age of 65,
(ii) upon his death or disability or (iii) upon a
termination for any reason whatsoever within 24 months
following a Change in Control. Otherwise, the executive shall
forfeit any unvested portion of his plan account upon a
termination for any reason. Additionally, certain key employees,
including the named executive officers, may not receive
distributions before a date six months after the date such
executive separates service from the Company for any reason
other than death or disability.
In addition to the above cash benefits paid pursuant to the
executives employment agreements, the Company will
continue to provide the officer and his dependants with health
benefits for up to 18 months.
The employment agreements for Messrs. Huseman, Krenek and
Swift also provide for gross up payments to the extent
Section 280G of the Internal Revenue Code would apply to
such payments as excess parachute payments. The
employment agreements for the other executive officers do not
contain these provisions.
Any benefits payable pursuant to the above triggering events in
the executives employment agreements are payable in a cash
lump sum not later than 60 calendar days following the
termination date. The employment agreements of the named
executive officers also contain certain non-competition and
non-solicitation provisions. For additional information
regarding these employment agreements, see Executive
Compensation Matters Employment Agreements.
Director
Compensation
The following table sets forth information concerning the
compensation of each of our directors other than Kenneth V.
Huseman, who is a named executive officer, for fiscal 2007:
Director
Compensation 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
Fees
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
Earned or
|
|
|
|
|
|
Non-Equity
|
|
Nonqualified
|
|
|
|
|
|
|
Paid in
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
Deferred
|
|
All Other
|
|
|
|
|
Cash
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
Compensation
|
|
Total
|
Name
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Earnings
|
|
($)
|
|
($)
|
(a)
|
|
(b)
|
|
(c) (1)
|
|
(d) (2)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
Steven A. Webster
|
|
$
|
20,500
|
|
|
$
|
104,273
|
|
|
$
|
44,337
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
169,110
|
|
H.H. Wommack, III
|
|
$
|
60,000
|
|
|
$
|
13,633
|
|
|
$
|
44,337
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
117,970
|
|
Sylvester P. Johnson, IV
|
|
$
|
66,000
|
|
|
$
|
13,633
|
|
|
$
|
44,337
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
123,970
|
|
William E. Chiles
|
|
$
|
83,000
|
|
|
$
|
13,633
|
|
|
$
|
44,337
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
140,970
|
|
Robert F. Fulton
|
|
$
|
45,000
|
|
|
$
|
13,633
|
|
|
$
|
44,337
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
102,970
|
|
James S. DAgostino, Jr.
|
|
$
|
75,000
|
|
|
$
|
13,633
|
|
|
$
|
48,131
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
136,764
|
|
Thomas P. Moore, Jr.
|
|
$
|
84,000
|
|
|
$
|
13,633
|
|
|
$
|
77,649
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
175,282
|
|
|
|
|
(1) |
|
Each of our directors had the following aggregate number of
restricted stock awards outstanding at December 31, 2007:
Steven A. Webster: 8,000; H. H. Wommack, III: 4,000;
Sylvester P. Johnson, IV: 4,000; William E. Chiles: 4,000;
Robert F. Fulton: 4,000; James S. DAgostino, Jr.: 4,000;
and Thomas P. Moore, Jr.: 4,000. |
|
(2) |
|
Each of our directors had the following aggregate number of
option awards outstanding at December 31, 2007: Steven A.
Webster: 97,500; H. H. Wommack, III: 97,500; Sylvester P.
Johnson, IV: 97,500; William E. Chiles: 82,500; Robert F.
Fulton: 97,500; James S. DAgostino, Jr.: 77,500; and
Thomas P. Moore, Jr.: 42,500. |
For additional information regarding fees earned for services as
a director in 2006, including annual retainer fees, committee
and chairmanship fees, and meeting fees, see Board of
Directors and Committees of the Board
25
Board of Directors Compensation. For
additional information regarding fees earned for services as a
director effective beginning in 2007, see Compensation
Discussion and Analysis Board Process
Compensation of Directors.
|
|
ITEM 12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
|
Beneficial
Ownership by Certain Beneficial Owners and Management
The following table sets forth the number of shares of common
stock beneficially owned as of April 11, 2008 by
(1) all persons who beneficially own more than 5% of the
outstanding voting securities of the Company, to the knowledge
of the Companys management, (2) each current
director, (3) each executive officer named in the Summary
Compensation Table and (4) all current directors and
executive officers as a group.
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature
|
|
Percent of
|
|
|
of Beneficial
|
|
Shares
|
Name
|
|
Ownership
|
|
Outstanding
|
|
DLJ Merchant Banking Partners III, L.P. and affiliated funds(1)
|
|
|
18,059,424
|
|
|
|
44.7
|
%
|
FMR LLC(2)
|
|
|
4,435,146
|
|
|
|
11.0
|
%
|
Kenneth V. Huseman(3)
|
|
|
1,049,285
|
|
|
|
2.5
|
%
|
Alan Krenek(4)
|
|
|
139,450
|
|
|
|
|
*
|
Charles W. Swift(5)
|
|
|
177,561
|
|
|
|
|
*
|
T.M. Roe Patterson(6)
|
|
|
29,000
|
|
|
|
|
*
|
James E. Tyner(7)
|
|
|
17,750
|
|
|
|
|
*
|
Steven A. Webster(8)(9)
|
|
|
237,250
|
|
|
|
|
*
|
James S. DAgostino, Jr.(8)(10)
|
|
|
73,450
|
|
|
|
|
*
|
William E. Chiles(8)(11)
|
|
|
74,250
|
|
|
|
|
*
|
Robert F. Fulton(8)(12)
|
|
|
89,250
|
|
|
|
|
*
|
Sylvester P. Johnson, IV(8)(12)
|
|
|
89,250
|
|
|
|
|
*
|
Thomas P. Moore, Jr.(8)(13)
|
|
|
57,250
|
|
|
|
|
*
|
H.H. Wommack, III(8)(14)
|
|
|
559,526
|
|
|
|
1.4
|
%
|
Directors and Executive Officers as a Group (15 persons)(15)
|
|
|
2,783,883
|
|
|
|
6.6
|
%
|
|
|
|
* |
|
Less than one percent. |
|
(1) |
|
Includes 18,059,424 shares of common stock owned by DLJ
Merchant Banking and its affiliates as follows: DLJ Merchant
Banking Partners III, L.P. (12,650,117 shares); DLJ ESC II,
L.P. (1,493,185 shares); DLJ Offshore Partners III, C.V.
(445,865 shares); DLJ Offshore Partners III-1, C.V.
(32,018 shares); DLJ Offshore Partners III-2, C.V.
(22,806 shares); DLJ Merchant Banking III, Inc., as
Advisory General Partner on behalf of DLJ Offshore Partners III,
C.V. (438,666 shares); DLJ Merchant Banking III, Inc., as
Advisory General Partner on behalf of DLJ Offshore Partners
III-1, C.V. and as attorney-in-fact for DLJ Merchant Banking
III, L.P., as Associate General Partner of DLJ Offshore Partners
III-1, C.V. (196,266 shares); DLJ Merchant Banking III,
Inc., as Advisory General Partner on behalf of DLJ Offshore
Partners III-2, C.V. and as attorney-in-fact for DLJ Merchant
Banking III, L.P., as Associate General Partner of DLJ Offshore
Partners III-2, C.V. (139,816 shares); DLJMB
Partners III GmbH & Co. KG (107,898 shares);
DLJMB Funding III, Inc. (132,220 shares); Millennium
Partners II, L.P. (21,516 shares); MBP III Plan Investors,
L.P. (2,379,051 shares). |
|
|
|
Credit Suisse, a Swiss bank, owns the majority of the voting
stock of Credit Suisse Holdings (USA), a Delaware corporation
which in turn owns all of the voting stock of Credit Suisse
(USA) Inc., a Delaware corporation (CS-USA). The
entities discussed in the above paragraph are merchant banking
funds managed by indirect subsidiaries of CS-USA and form part
of Credit Suisses Alternative Capital Division. The
ultimate parent company of Credit Suisse is Credit Suisse Group
(CSG). CSG disclaims beneficial ownership of the
reported common stock that is beneficially owned by its direct
and indirect subsidiaries. Steven A. Webster |
26
|
|
|
|
|
served as the Chairman of Global Energy Partners, a specialty
group within Credit Suisses Alternative Capital Division,
from 1999 until June 30, 2005. |
|
|
|
All of the DLJ Merchant Banking entities can be contacted at
Eleven Madison Avenue, New York, New York
10010-3629
except for the three Offshore Partners entities,
which can be contacted at John B. Gosiraweg, 14, Willemstad,
Curacao, Netherlands Antilles. |
|
(2) |
|
Fidelity Management & Research Company
(Fidelity), a wholly-owned subsidiary of FMR LLC, is
the beneficial owner of all 4,435,146 shares as a result of
acting as investment adviser to various investment companies
registered under Section 8 of the Investment Company Act of
1940. The ownership of one investment company, Fidelity Low
Priced Stock Fund, amounted to 4,089,146 shares of common
stock. Edward C. Johnson 3d and FMR LLC, through its control of
Fidelity, and the funds each has sole power to dispose of the
4,435,146 shares owned by Fidelity. |
|
|
|
Members of the family of Edward C. Johnson 3d, Chairman of FMR
LLC, are the predominant owners, directly or through trusts, of
Series B voting common shares of FMR LLC, representing 49%
of the voting power of FMR LLC. The Johnson family group and all
other Series B shareholders have entered into a
shareholders voting agreement under which all
Series B voting common shares will be voted in accordance
with the majority vote of Series B voting common shares.
Accordingly, through their ownership of voting common shares and
the execution of the shareholders voting agreement,
members of the Johnson family may be deemed, under the
Investment Company Act of 1940, to form a controlling group with
respect to FMR LLC. Neither FMR LLC nor Edward C. Johnson 3d,
Chairman of FMR LLC, has the sole power to vote or direct the
voting of the shares owned directly by the Fidelity Funds, which
power resides with the Funds Boards of Trustees. Fidelity
carries out the voting of the shares under written guidelines
established by the Funds Boards of Trustees. FMR
LLCs address is 82 Devonshire Street, Boston,
Massachusetts 02109. |
|
(3) |
|
Includes 319,060 shares of restricted stock, of which 5,000
remain subject to vesting in one-fourth increments on
March 15, 2009, 2010, 2011 and 2012 and of which 45,000
remain subject to vesting in one-fourth increments on
March 15, 2010, 2011, 2012 and 2013, and
529,405 shares issuable within 60 days upon the
exercise of options granted under our 2003 Incentive Plan. Does
not include 155,000 shares underlying options that are not
exercisable within 60 days granted under our 2003 Incentive
Plan. |
|
(4) |
|
Includes 32,500 shares of restricted stock, of which 10,000
remain subject to vesting in one-fourth increments on
March 15, 2009, 2010, 2011 and 2012 and of which 22,500
remain subject to vesting in one-fourth increments on
March 15, 2010, 2011, 2012 and 2013. Includes
106,750 shares issuable within 60 days upon the
exercise of options granted under our 2003 Incentive Plan. Does
not include 46,250 shares underlying options that are not
exercisable within 60 days granted under our 2003 Incentive
Plan. |
|
(5) |
|
Includes 58,206 shares of restricted stock, of which 6,000
remain subject to vesting in one-fourth increments on
March 15, 2009, 2010, 2011 and 2012 and of which 17,500
remain subject to vesting in one-fourth increments on
March 15, 2010, 2011, 2012 and 2013, and
104,475 shares issuable within 60 days upon the
exercise of options granted under our 2003 Incentive Plan. Does
not include 40,750 shares underlying options that are not
exercisable within 60 days granted under our 2003 Incentive
Plan. |
|
(6) |
|
Includes 22,500 shares of restricted stock, of which 6,000
remain subject to vesting in one-fourth increments on
March 15, 2009, 2010, 2011 and 2012 and of which 16,500
remain subject to vesting in one-fourth increments on
March 15, 2010, 2011, 2012 and 2013, and 3,750 shares
issuable within 60 days upon the exercise of options
granted under our 2003 Incentive Plan. Does not include
16,250 shares underlying options that are not exercisable
within 60 days granted under our 2003 Incentive Plan. |
|
(7) |
|
Includes 11,000 shares of restricted stock, of which 4,000
remain subject to vesting in one-fourth increments on
March 15, 2009, 2010, 2011 and 2012 and of which 7,000
remain subject to vesting in one-fourth increments on
March 15, 2010, 2011, 2012 and 2013. Includes
6,250 shares issuable within 60 days upon the exercise
of options granted under our 2003 Incentive Plan. Does not
include 16,250 shares underlying options that are not
exercisable within 60 days granted under our 2003 Incentive
Plan. |
|
(8) |
|
Includes 16,000 shares of restricted stock, of which 4,000
remain subject to vesting in one-fourth increments on
March 15, 2009, 2010, 2011 and 2012 and of which 4,000
remain subject to vesting in one-fourth increments on
March 15, 2010, 2011, 2012 and 2013. |
27
|
|
|
(9) |
|
Includes 81,250 shares issuable within 60 days upon
the exercise of options granted under our 2003 Incentive Plan.
Does not include 16,250 shares underlying options that are
not exercisable within 60 days granted under our 2003
Incentive Plan. |
|
(10) |
|
Includes 61,250 shares issuable within 60 days upon
the exercise of options granted under our 2003 Incentive Plan.
Does not include 16,250 shares underlying options that are
not exercisable within 60 days granted under our 2003
Incentive Plan. |
|
(11) |
|
Includes 66,250 shares issuable within 60 days upon
the exercise of options granted under our 2003 Incentive Plan.
Does not include 16,250 shares underlying options that are
not exercisable within 60 days granted under our 2003
Incentive Plan. |
|
(12) |
|
Includes 81,250 shares issuable within 60 days upon
the exercise of options granted under our 2003 Incentive Plan.
Does not include 16,250 shares underlying options that are
not exercisable within 60 days granted under our 2003
Incentive Plan. |
|
(13) |
|
Includes 26,250 shares issuable within 60 days upon
the exercise of options granted under our 2003 Incentive Plan.
Does not include 16,250 shares underlying options that are
not exercisable within 60 days granted under our 2003
Incentive Plan. |
|
(14) |
|
Includes 81,250 shares issuable within 60 days upon
the exercise of options granted under our 2003 Incentive Plan.
Does not include 16,250 shares underlying options that are
not exercisable within 60 days granted under our 2003
Incentive Plan. Also reflects the beneficial ownership of
227,461 shares beneficially owned by Galloway Bend Ltd.
(Galloway Bend). Mr. Wommack and certain of his
immediate family members hold the general partner and limited
partner interests in Galloway Bend. Also reflects the beneficial
ownership of 176 shares beneficially owned by Fortress
Holdings, LLC (Fortress), successor in interest to
Southwest Royalties Holdings, Inc. Mr. Wommack owns
approximately 33% of the outstanding units of, and is a manager
and the President of, Fortress. Mr. Wommack disclaims
beneficial ownership of the shares beneficially owned directly
by Fortress and Galloway Bend, other than to the extent of his
pecuniary interest in such shares. |
|
(15) |
|
Includes an aggregate of 567,292 restricted shares, of which
214,500 remain subject to vesting, and an aggregate of
1,263,130 shares issuable within 60 days upon the
exercise of options granted under our 2003 Incentive Plan. Does
not include 404,500 shares underlying options that are not
exercisable within 60 days granted under our 2003 Incentive
Plan. |
Securities
Authorized for Issuance under Equity Compensation
Plans
See Part II, Item 5 of our original Annual Report on
Form 10-K
for the year ended December 31, 2007 for information
relating to Securities Authorized for Issuance under Equity
Compensation Plans.
|
|
ITEM 13.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
Transactions
with Related Persons, Promoters and Certain Control
Persons
Transactions with Related
Persons. During 2007, there were no
transactions with related persons that were required to be
disclosed in this report.
Review, Approval or Ratification of Transactions with Related
Persons. Pursuant to the charter of the Audit
Committee, the Audit Committee is responsible for establishing
procedures for the approval of all related party transactions
between the Company and any officer or director that would
potentially require disclosure. The board of directors has
adopted a written policy regarding related party transactions
that is to be administered by the Audit Committee. The policy
applies generally to transactions, arrangements or relationships
in which the Company was, is or will be a participant, in which
the amount involved exceeds $60,000 and in which any related
person had, has or will have a direct or indirect material
interest. Related persons include, among others, directors and
officers of the Company, beneficial owners of 5% or more of the
Companys voting securities, immediate family members of
the foregoing persons, and any entity in which the foregoing
persons are employed, are a principal or in which such person
has more than a 10% beneficial ownership interest. The
Companys Chief Financial Officer is responsible for
submitting related person transactions to the Audit Committee
for approval by the committee at regularly
28
scheduled meetings, or, if such approval is not practicable, to
the Chairman of the Audit Committee for approval between such
meetings. When considering related person transactions, the
Audit Committee, or where submitted to the Chairman, the
Chairman, will consider all of the relevant facts available,
including, but not limited to: the benefits of the transaction
to the Company; the impact on a directors independence in
the event the related person is a director; the availability of
other sources for comparable products or services; the terms of
the transaction; and the terms of comparable transactions
available to unrelated third parties or to employees of the
Company generally. The Company is not aware of any transaction
that was required to be reported in its filings with the SEC
where such policies and procedures either did not require review
or were not followed.
Independence. Our board of directors
currently consists of eight members, including five members
determined by our Board to be independent
Messrs. DAgostino, Chiles, Johnson, Moore and Wommack.
The Board has determined that Messrs. DAgostino,
Chiles, Johnson, Moore and Wommack are independent as that term
is defined by rules of the New York Stock Exchange and, in the
case of the Audit Committee, rules of the Securities and
Exchange Commission. In determining that each of these directors
is independent, the Board considered that the Company and its
subsidiaries in the ordinary course of business sell products
and services to other companies, including those at which
certain directors serve (or recently served) as executive
officers or directors. In particular, Carrizo Oil &
Gas, Inc., a company on which Mr. Johnson serves as
President, Chief Executive Officer and a Director, uses the
services of the Company, but such services represent less than
2% of Carrizos revenues. Also, although Mr. Wommack
was previously deemed by the Board not to be independent due to
his service as a current employee of a company that made
payments to Basic during 2003 in excess of 2% of the
companys consolidated gross revenues, as of
January 1, 2007, the three-year test under
Section 303A.02(b)(v) of the NYSE Listed Company Manual no
longer prohibits such determination of independence.
Accordingly, as of January 1, 2007, our Board determined
that Mr. Wommack was independent. In each case, the
transactions and contributions did not automatically disqualify
the directors from being considered independent under the NYSE
rules. The Board also determined that these transactions were
not otherwise material to the Company or to the other company
involved in the transactions and that none of our directors had
a material interest in the transactions with these companies.
Based upon its review, the Board of Directors has affirmatively
determined that each of these directors are independent and that
none of these independent directors has a material relationship
with the Company.
|
|
ITEM 14.
|
PRINCIPAL
ACCOUNTING FEES AND SERVICES
|
Independent
Auditor and Fees
KPMG LLP, a registered public accounting firm, audited the
Companys consolidated financial statements for fiscal
2007. KPMG LLP has billed the Company and its subsidiaries fees
as set forth in the table below for (i) the audits of the
Companys 2006 and 2007 annual financial statements,
reviews of quarterly financial statements, and review of the
Companys documents filed with the Securities and Exchange
Commission, (ii) assurance and other services reasonably
related to the audit or review of the Companys financial
statements, and (iii) services related to tax compliance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit-Related
|
|
|
|
|
Audit Fees
|
|
Fees
|
|
Tax Fees(1)
|
|
Fiscal 2007(2)
|
|
$
|
1,250,000
|
|
|
$
|
|
|
|
$
|
|
|
Fiscal 2006(2)
|
|
$
|
1,365,000
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
(1) |
|
The services comprising Tax Fees included tax
compliance, planning and advice. |
|
(2) |
|
There were no fees billed in 2006 or 2007 that would constitute
All Other Fees. |
Audit
Committee Pre-Approved Policies and Procedures
The Audit Committee of the Board of Directors has adopted
policies regarding the pre-approval of auditor services.
Specifically, commencing in 2006, the Audit Committee began
approving at its May meeting all services provided by the
independent public accountants. All additional services must be
pre-approved on a
case-by-case
basis. The Audit Committee reviews the actual and budgeted fees
for the independent public accountants at its
29
1st and 4th meetings. All of the services provided by
KPMG LLP during fiscal 2007 were approved by the Audit Committee.
PART IV
ITEM 15. EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements, Schedules and Exhibits
(1) Financial Statements Basic Energy Services,
Inc. and Subsidiaries:
The Financial Statements listed in the Index to Consolidated
Financial Statements are filed as part of this report on
Form 10-K
(see Part II,
Item 8-Financial
Statements and Supplementary Data included in our Original
Form 10-K
filed on March 7, 2008).
(2) Financial Statement Schedules
With the exception of Schedule II Valuation and
Qualifying Accounts, all other consolidated financial statement
schedules have been omitted because they are not required, are
not applicable, or the required information has been included in
our Original
Form 10-K
filed on March 7, 2008.
(3) Exhibits
|
|
|
|
|
Exhibit
|
|
|
No.
|
|
Description
|
|
|
2
|
.1*
|
|
Agreement and Plan of Merger, dated as of January 8, 2007,
by and among Basic Energy Services, Inc.(the
Company), JS Acquisition LLC and JetStar
Consolidated Holdings, Inc. (Incorporated by reference to
Exhibit 2.1 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on March 8, 2007)
|
|
2
|
.2*
|
|
Amendment to Merger Agreement, dated as of March 5, 2007,
by and among Basic Energy Services, Inc., JS Acquisition LLC and
JetStar Consolidated Holdings, Inc. (Incorporated by reference
to Exhibit 2.2 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on March 8, 2007)
|
|
3
|
.1*
|
|
Amended and Restated Certificate of Incorporation of the
Company, dated September 22, 2005. (Incorporated by
reference to Exhibit 3.1 of the Companys Registration
Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
3
|
.2*
|
|
Amended and Restated Bylaws of the Company, dated
December 14, 2005. (Incorporated by reference to
Exhibit 3.1 to the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on December 14, 2005)
|
|
3
|
.3*
|
|
Amended and Restated Bylaws of the Company, effective as of
December 17, 2007. (Incorporated by reference to
Exhibit 3.1 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on December 18, 2007)
|
|
4
|
.1*
|
|
Specimen Stock Certificate representing common stock of the
Company. (Incorporated by reference to Exhibit 3.1 of the
Companys Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on November 4, 2005)
|
|
4
|
.2*
|
|
Indenture dated April 12, 2006, among Basic Energy
Services, Inc., the guarantors party thereto, and The Bank of
New York Trust Company, N.A., as trustee. (Incorporated by
reference to Exhibit 4.1 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on April 13, 2006)
|
|
4
|
.3*
|
|
Form of 7.125% Senior Note due 2016. (Incorporated by
reference to Exhibit 4.2 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on April 13, 2006)
|
|
4
|
.4*
|
|
First Supplemental Indenture dated as of July 14, 2006 to
Indenture dated as of April 12, 2006 among the Company, as
Issuer, the Subsidiary Guarantors named therein and The Bank of
New York Trust Company, N.A., as trustee. (Incorporated by
reference to Exhibit 4.1 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on July 20, 2006)
|
30
|
|
|
|
|
Exhibit
|
|
|
No.
|
|
Description
|
|
|
4
|
.5*
|
|
Second Supplemental Indenture dated as of April 26, 2007
and effective as of March 7, 2007 to Indenture dated as of
April 12, 2006 among the Company as Issuer, the Subsidiary
Guarantors named therein and the Bank of New York
Trust Company, N.A., as trustee. (Incorporated by reference
to Exhibit 4.1 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693,
filed on May 1, 2007)
|
|
4
|
.6*
|
|
Third Supplement Indenture dated as of April 26, 2007 to
Indenture dated as of April 12, 2006 among the Company as
Issuer, the Subsidiary Guarantors named therein and the Bank of
New York Trust Company, N.A., as trustee. (Incorporated by
reference to Exhibit 4.2 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on May 1, 2007)
|
|
10
|
.1*
|
|
Form of Indemnification Agreement. (Incorporated by reference to
Exhibit 10.1 of the Companys Registration Statement
on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
10
|
.2*
|
|
Second Amended and Restated Stockholders Agreement dated
as of April 2, 2004 among the Company and the stockholders
listed therein. (Incorporated by reference to Exhibit 10.7
of the Companys Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on August 12, 2005)
|
|
10
|
.3*
|
|
Stock Purchase Agreement dated as of September 18, 2003, as
amended on October 1, 2003, among the Company, FESCO
Holdings, Inc. and the sellers named therein. (Incorporated by
reference to Exhibit 10.8 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on August 12, 2005)
|
|
10
|
.4*
|
|
Asset Purchase Agreement dated as of August 14, 2003 among
the Company and PWI, Inc. (Incorporated by reference to
Exhibit 10.9 of the Companys Registration Statement
on
Form S-1
(SEC File
No. 333-127517),
filed on August 12, 2005)
|
|
10
|
.5*
|
|
Fourth Amended and Restated Credit Agreement dated as of
October 3, 2003, amended and restated as of
February 6, 2007, among Basic Energy Services, Inc., the
subsidiary guarantors party thereto, Bank of America, N.A., as
syndication agent, Capital One, National Association, as
documentation agent, BNP Paribas, as documentation agent, UBS
AG, Stamford Branch, as issuing bank, administrative agent and
collateral agent, and the lenders party thereto. (Incorporated
by reference to Exhibit 10.1 to the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on February 12, 2007)
|
|
10
|
.6*
|
|
Second Amended and Restated 2003 Incentive Plan. (Incorporated
by reference to Exhibit 10.11 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on August 12, 2005)
|
|
10
|
.7*
|
|
Form of Non-Qualified Option Grant Agreement (Executive
Officer Pre-March 1, 2005). (Incorporated by
reference to Exhibit 10.12 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
10
|
.8*
|
|
Form of Non-Qualified Option Grant Agreement (Executive
Officer Post-March 1, 2005). (Incorporated by
reference to Exhibit 10.13 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
10
|
.9*
|
|
Form of Non-Qualified Option Grant Agreement (Non-Employee
Director Pre-March 1, 2005). (Incorporated by
reference to Exhibit 10.14 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
10
|
.10*
|
|
Form of Non-Qualified Option Grant Agreement (Non-Employee
Director Post-March 1, 2005). (Incorporated by
reference to Exhibit 10.15 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
10
|
.11*
|
|
Form of Restricted Stock Grant Agreement. (Incorporated by
reference to Exhibit 10.16 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
10
|
.12*
|
|
Form of Amendment to Nonqualified Stock Option Agreement, dated
as of December 31, 2005, by and between the Company and the
optionees party thereto. (Incorporated by reference to
Exhibit 3.1 to the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2006)
|
|
10
|
.13*
|
|
Form of Nonqualified Stock Option Agreement (Director form
effective March 2006). (Incorporated by reference to
Exhibit 10.13 to the Companys Annual Report on
Form 10-K
(SEC File
No. 001-32693),
filed on March 7, 2008)
|
31
|
|
|
|
|
Exhibit
|
|
|
No.
|
|
Description
|
|
|
10
|
.14*
|
|
Form of Nonqualified Stock Option Agreement (Employee form
effective March 2006). (Incorporated by reference to
Exhibit 10.14 to the Companys Annual Report on
Form 10-K
(SEC File
No. 001-32693),
filed on March 7, 2008)
|
|
10
|
.15*
|
|
Form of Restricted Stock Grant Agreement (Officers and
Employees Post-March 1, 2007). (Incorporated by
reference to Exhibit 10.5 to the Companys Quarterly
Report on
Form 10-Q
(SEC File
No. 001-32693),
filed on May 10, 2007)
|
|
10
|
.16*
|
|
Form of Restricted Stock Grant Agreement (Non-Employee
Directors Post-March 1, 2007). (Incorporated by
reference to Exhibit 10.6 to the Companys Quarterly
Report on
Form 10-Q
(SEC File
No. 001-32693),
filed on May 10, 2007)
|
|
10
|
.17*
|
|
Form of Non-Qualified Stock Option Grant Agreement
(Post-March 1, 2007). (Incorporated by reference to
Exhibit 10.7 to the Companys Quarterly Report on
Form 10-Q
(SEC File
No. 001-32693),
filed on May 10, 2007)
|
|
10
|
.18*
|
|
Workover Unit Package Contract and Acceptance Agreement, dated
as of May 17, 2005, between Basic Energy Services, L.P. and
Taylor Rigs, LLC. (Incorporated by reference to
Exhibit 10.17 of the Companys Registration Statement
on
Form S-1
(SEC File
No. 333-127517),
filed on November 4, 2005)
|
|
10
|
.19*
|
|
Share Exchange Agreement, dated as of September 22, 2003,
among BES Holding Co. and the Stockholders named therein.
(Incorporated by reference to Exhibit 10.18 of the
Companys Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
10
|
.20*
|
|
Form of Share Tender and Repurchase Agreement. (Incorporated by
reference to Exhibit 10.19 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on November 4, 2005)
|
|
10
|
.21*
|
|
Workover Unit Package Contract and Acceptance Agreement, dated
as of November 10, 2005, between Basic Energy Services,
L.P. and Taylor Rigs, LLC. (Incorporated by reference to
Exhibit 10.20 of the Companys Registration Statement
on
Form S-1
(SEC File
No. 333-127517),
filed on November 16, 2005)
|
|
10
|
.22*
|
|
Asset Purchase Agreement dated as of February 21, 2006
among Basic Energy Services, LP, Basic Energy Services GP, LLC,
G&L Tool, Ltd., DLH Management, LLC and LJH, Ltd.
(Incorporated by reference to Exhibit 10.1 of the
Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on March 2, 2006)
|
|
10
|
.23*
|
|
Contingent Earn Out Agreement dated as of February 28, 2006
among Basic Energy Services, LP and G&L Tool, Ltd.
(Incorporated by reference to Exhibit 10.2 of the
Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on March 2, 2006)
|
|
10
|
.24*
|
|
Registration Rights Agreement dated April 12, 2006, among
the Company, the guarantors party thereto and the initial
purchasers party thereto. (Incorporated by reference to
Exhibit 10.2 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on April 13, 2006)
|
|
10
|
.25*
|
|
Summary of 2006 salaries and other compensation for named
executive officers and certain employees (Incorporated by
reference to Item 1.01 of the Companys
Form 8-K
filed on March 8, 2006)
|
|
10
|
.26*
|
|
Fee Reimbursement Agreement, dated as of July 24, 2006, by
and among the Company, Southwest Partners II, L.P., Southwest
Partners, III, L.P. and Fortress Holdings, LLC.
(Incorporated by reference to Exhibit 10.23 of the
Companys Registration Statement on
Form S-1
(SEC File
No. 333-136019),
filed on July 25, 2006)
|
|
10
|
.27*
|
|
Employment Agreement of Kenneth V. Huseman, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
|
|
10
|
.28*
|
|
Employment Agreement of Alan Krenek, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.2 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
|
|
10
|
.29*
|
|
Employment Agreement of Charles W. Swift, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.3 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
|
32
|
|
|
|
|
Exhibit
|
|
|
No.
|
|
Description
|
|
|
10
|
.30*
|
|
Employment Agreement of Dub William Harrison, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.4 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
|
|
10
|
.31*
|
|
Employment Agreement of James E. Tyner, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.5 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
|
|
10
|
.32*
|
|
Employment Agreement of Thomas Monroe Patterson, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.6 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
|
|
10
|
.33*
|
|
Employment Agreement of Mark David Rankin, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.7 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
|
|
10
|
.34*
|
|
First Amendment to Employment Agreement of Kenneth V. Huseman,
effective as of January 23, 2007. (Incorporated by
reference to Exhibit 10.1 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 29, 2007)
|
|
10
|
.35*
|
|
Registration Rights Agreement, dated as of March 6, 2007,
by and among Basic Energy Services, Inc. and the JetStar
Stockholders Representative. (Incorporated by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on March 8, 2007)
|
|
10
|
.36*
|
|
Registration Rights Agreement, dated as of April 2, 2007,
by and among the Company and the Holders named therein.
(Incorporated by reference to Exhibit 10.1 of the
Companys current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on April 5, 2007)
|
|
21
|
.1*
|
|
Subsidiaries of the Company (Incorporated by reference to
Exhibit 21.1 of the Companys Annual Report on
Form 10-K
(SEC File
No. 001-32693),
filed on March 7, 2008)
|
|
23
|
.1*
|
|
Consent of KPMG LLP (Incorporated by reference to
Exhibit 23.1 of the Companys Annual Report on
Form 10-K
(SEC File
No. 001-32693),
filed on March 7, 2008)
|
|
31
|
.1
|
|
Certification by Chief Executive Officer required by
Rule 13a-14(a)
and 15d-14(a) under the Exchange Act
|
|
31
|
.2
|
|
Certification by Chief Financial Officer required by
Rule 13a-14(a)
and 15d-14(a) under the Exchange Act
|
|
32
|
.1
|
|
Certification by Chief Executive Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
|
|
32
|
.2
|
|
Certification of Chief Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
* |
|
Incorporated by reference |
|
|
|
Management contract or compensatory plan or arrangement |
33
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BASIC ENERGY SERVICES, INC.
|
|
|
|
By:
|
/s/ Kenneth
V. Huseman
|
Name: Kenneth V. Huseman
|
|
|
|
Title:
|
President, Chief Executive Officer and
|
Director
Date: April 29, 2008
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Date
|
|
|
|
|
|
|
|
|
/s/ Kenneth
V. Huseman
Kenneth
V. Huseman
|
|
President, Chief Executive Officer and Director (Principal
Executive Officer)
|
|
April 29, 2008
|
|
|
|
|
|
/s/ Alan
Krenek
Alan
Krenek
|
|
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
|
|
April 29, 2008
|
|
|
|
|
|
/s/ Steven
A. Webster
Steven
A. Webster
|
|
Chairman of the Board
|
|
April 29, 2008
|
|
|
|
|
|
/s/ James
S. DAgostino, Jr.
James
S. DAgostino, Jr.
|
|
Director
|
|
April 29, 2008
|
|
|
|
|
|
/s/ William
E. Chiles
William
E. Chiles
|
|
Director
|
|
April 29, 2008
|
|
|
|
|
|
/s/ Robert
F. Fulton
Robert
F. Fulton
|
|
Director
|
|
April 29, 2008
|
|
|
|
|
|
/s/ Sylvester
P. Johnson, IV
Sylvester
P. Johnson, IV
|
|
Director
|
|
April 29, 2008
|
|
|
|
|
|
/s/ H.H.
Wommack, III
H.H.
Wommack, III
|
|
Director
|
|
April 29, 2008
|
|
|
|
|
|
/s/ Thomas
P. Moore, Jr.
Thomas
P. Moore, Jr.
|
|
Director
|
|
April 29, 2008
|
34
EXHIBIT INDEX
|
|
|
|
|
Exhibit
|
|
|
No.
|
|
Description
|
|
|
2
|
.1*
|
|
Agreement and Plan of Merger, dated as of January 8, 2007,
by and among Basic Energy Services, Inc.(the
Company), JS Acquisition LLC and JetStar
Consolidated Holdings, Inc. (Incorporated by reference to
Exhibit 2.1 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on March 8, 2007)
|
|
2
|
.2*
|
|
Amendment to Merger Agreement, dated as of March 5, 2007,
by and among Basic Energy Services, Inc., JS Acquisition LLC and
JetStar Consolidated Holdings, Inc. (Incorporated by reference
to Exhibit 2.2 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on March 8, 2007)
|
|
3
|
.1*
|
|
Amended and Restated Certificate of Incorporation of the
Company, dated September 22, 2005. (Incorporated by
reference to Exhibit 3.1 of the Companys Registration
Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
3
|
.2*
|
|
Amended and Restated Bylaws of the Company, dated
December 14, 2005. (Incorporated by reference to
Exhibit 3.1 to the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on December 14, 2005)
|
|
3
|
.3*
|
|
Amended and Restated Bylaws of the Company, effective as of
December 17, 2007. (Incorporated by reference to
Exhibit 3.1 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on December 18, 2007)
|
|
4
|
.1*
|
|
Specimen Stock Certificate representing common stock of the
Company. (Incorporated by reference to Exhibit 3.1 of the
Companys Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on November 4, 2005)
|
|
4
|
.2*
|
|
Indenture dated April 12, 2006, among Basic Energy
Services, Inc., the guarantors party thereto, and The Bank of
New York Trust Company, N.A., as trustee. (Incorporated by
reference to Exhibit 4.1 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on April 13, 2006)
|
|
4
|
.3*
|
|
Form of 7.125% Senior Note due 2016. (Incorporated by
reference to Exhibit 4.2 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on April 13, 2006)
|
|
4
|
.4*
|
|
First Supplemental Indenture dated as of July 14, 2006 to
Indenture dated as of April 12, 2006 among the Company, as
Issuer, the Subsidiary Guarantors named therein and The Bank of
New York Trust Company, N.A., as trustee. (Incorporated by
reference to Exhibit 4.1 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on July 20, 2006)
|
|
4
|
.5*
|
|
Second Supplemental Indenture dated as of April 26, 2007
and effective as of March 7, 2007 to Indenture dated as of
April 12, 2006 among the Company as Issuer, the Subsidiary
Guarantors named therein and the Bank of New York
Trust Company, N.A., as trustee. (Incorporated by reference
to Exhibit 4.1 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693,
filed on May 1, 2007)
|
|
4
|
.6*
|
|
Third Supplement Indenture dated as of April 26, 2007 to
Indenture dated as of April 12, 2006 among the Company as
Issuer, the Subsidiary Guarantors named therein and the Bank of
New York Trust Company, N.A., as trustee. (Incorporated by
reference to Exhibit 4.2 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on May 1, 2007)
|
|
10
|
.1*
|
|
Form of Indemnification Agreement. (Incorporated by reference to
Exhibit 10.1 of the Companys Registration Statement
on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
10
|
.2*
|
|
Second Amended and Restated Stockholders Agreement dated
as of April 2, 2004 among the Company and the stockholders
listed therein. (Incorporated by reference to Exhibit 10.7
of the Companys Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on August 12, 2005)
|
|
10
|
.3*
|
|
Stock Purchase Agreement dated as of September 18, 2003, as
amended on October 1, 2003, among the Company, FESCO
Holdings, Inc. and the sellers named therein. (Incorporated by
reference to Exhibit 10.8 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on August 12, 2005)
|
|
10
|
.4*
|
|
Asset Purchase Agreement dated as of August 14, 2003 among
the Company and PWI, Inc. (Incorporated by reference to
Exhibit 10.9 of the Companys Registration Statement
on
Form S-1
(SEC File
No. 333-127517),
filed on August 12, 2005)
|
|
|
|
|
|
Exhibit
|
|
|
No.
|
|
Description
|
|
|
10
|
.5*
|
|
Fourth Amended and Restated Credit Agreement dated as of
October 3, 2003, amended and restated as of
February 6, 2007, among Basic Energy Services, Inc., the
subsidiary guarantors party thereto, Bank of America, N.A., as
syndication agent, Capital One, National Association, as
documentation agent, BNP Paribas, as documentation agent, UBS
AG, Stamford Branch, as issuing bank, administrative agent and
collateral agent, and the lenders party thereto. (Incorporated
by reference to Exhibit 10.1 to the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on February 12, 2007)
|
|
10
|
.6*
|
|
Second Amended and Restated 2003 Incentive Plan. (Incorporated
by reference to Exhibit 10.11 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on August 12, 2005)
|
|
10
|
.7*
|
|
Form of Non-Qualified Option Grant Agreement (Executive
Officer Pre-March 1, 2005). (Incorporated by
reference to Exhibit 10.12 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
10
|
.8*
|
|
Form of Non-Qualified Option Grant Agreement (Executive
Officer Post-March 1, 2005). (Incorporated by
reference to Exhibit 10.13 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
10
|
.9*
|
|
Form of Non-Qualified Option Grant Agreement (Non-Employee
Director Pre-March 1, 2005). (Incorporated by
reference to Exhibit 10.14 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
10
|
.10*
|
|
Form of Non-Qualified Option Grant Agreement (Non-Employee
Director Post-March 1, 2005). (Incorporated by
reference to Exhibit 10.15 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
10
|
.11*
|
|
Form of Restricted Stock Grant Agreement. (Incorporated by
reference to Exhibit 10.16 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
10
|
.12*
|
|
Form of Amendment to Nonqualified Stock Option Agreement, dated
as of December 31, 2005, by and between the Company and the
optionees party thereto. (Incorporated by reference to
Exhibit 3.1 to the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2006)
|
|
10
|
.13*
|
|
Form of Nonqualified Stock Option Agreement (Director form
effective March 2006) (Incorporated by reference to
Exhibit 10.13 of the Companys Annual Report on
Form 10-K
(SEC File No. 001-32693), filed on March 7, 2008).
|
|
10
|
.14*
|
|
Form of Nonqualified Stock Option Agreement (Employee form
effective March 2006) (Incorporated by reference to
Exhibit 10.14 of the Companys Annual Report on
Form 10-K
(SEC File No. 001-32693), filed on March 7, 2008).
|
|
10
|
.15*
|
|
Form of Restricted Stock Grant Agreement (Officers and
Employees Post-March 1, 2007). (Incorporated by
reference to Exhibit 10.5 to the Companys Quarterly
Report on
Form 10-Q
(SEC File
No. 001-32693),
filed on May 10, 2007)
|
|
10
|
.16*
|
|
Form of Restricted Stock Grant Agreement (Non-Employee
Directors Post-March 1, 2007). (Incorporated by
reference to Exhibit 10.6 to the Companys Quarterly
Report on
Form 10-Q
(SEC File
No. 001-32693),
filed on May 10, 2007)
|
|
10
|
.17*
|
|
Form of Non-Qualified Stock Option Grant Agreement
(Post-March 1, 2007). (Incorporated by reference to
Exhibit 10.7 to the Companys Quarterly Report on
Form 10-Q
(SEC File
No. 001-32693),
filed on May 10, 2007)
|
|
10
|
.18*
|
|
Workover Unit Package Contract and Acceptance Agreement, dated
as of May 17, 2005, between Basic Energy Services, L.P. and
Taylor Rigs, LLC. (Incorporated by reference to
Exhibit 10.17 of the Companys Registration Statement
on
Form S-1
(SEC File
No. 333-127517),
filed on November 4, 2005)
|
|
10
|
.19*
|
|
Share Exchange Agreement, dated as of September 22, 2003,
among BES Holding Co. and the Stockholders named therein.
(Incorporated by reference to Exhibit 10.18 of the
Companys Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
|
|
10
|
.20*
|
|
Form of Share Tender and Repurchase Agreement. (Incorporated by
reference to Exhibit 10.19 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on November 4, 2005)
|
|
10
|
.21*
|
|
Workover Unit Package Contract and Acceptance Agreement, dated
as of November 10, 2005, between Basic Energy Services,
L.P. and Taylor Rigs, LLC. (Incorporated by reference to
Exhibit 10.20 of the Companys Registration Statement
on
Form S-1
(SEC File
No. 333-127517),
filed on November 16, 2005)
|
|
|
|
|
|
Exhibit
|
|
|
No.
|
|
Description
|
|
|
10
|
.22*
|
|
Asset Purchase Agreement dated as of February 21, 2006
among Basic Energy Services, LP, Basic Energy Services GP, LLC,
G&L Tool, Ltd., DLH Management, LLC and LJH, Ltd.
(Incorporated by reference to Exhibit 10.1 of the
Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on March 2, 2006)
|
|
10
|
.23*
|
|
Contingent Earn Out Agreement dated as of February 28, 2006
among Basic Energy Services, LP and G&L Tool, Ltd.
(Incorporated by reference to Exhibit 10.2 of the
Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on March 2, 2006)
|
|
10
|
.24*
|
|
Registration Rights Agreement dated April 12, 2006, among
the Company, the guarantors party thereto and the initial
purchasers party thereto. (Incorporated by reference to
Exhibit 10.2 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on April 13, 2006)
|
|
10
|
.25*
|
|
Summary of 2006 salaries and other compensation for named
executive officers and certain employees (Incorporated by
reference to Item 1.01 of the Companys
Form 8-K
filed on March 8, 2006)
|
|
10
|
.26*
|
|
Fee Reimbursement Agreement, dated as of July 24, 2006, by
and among the Company, Southwest Partners II, L.P., Southwest
Partners, III, L.P. and Fortress Holdings, LLC.
(Incorporated by reference to Exhibit 10.23 of the
Companys Registration Statement on
Form S-1
(SEC File
No. 333-136019),
filed on July 25, 2006)
|
|
10
|
.27*
|
|
Employment Agreement of Kenneth V. Huseman, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
|
|
10
|
.28*
|
|
Employment Agreement of Alan Krenek, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.2 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
|
|
10
|
.29*
|
|
Employment Agreement of Charles W. Swift, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.3 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
|
|
10
|
.30*
|
|
Employment Agreement of Dub William Harrison, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.4 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
|
|
10
|
.31*
|
|
Employment Agreement of James E. Tyner, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.5 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
|
|
10
|
.32*
|
|
Employment Agreement of Thomas Monroe Patterson, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.6 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
|
|
10
|
.33*
|
|
Employment Agreement of Mark David Rankin, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.7 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
|
|
10
|
.34*
|
|
First Amendment to Employment Agreement of Kenneth V. Huseman,
effective as of January 23, 2007. (Incorporated by
reference to Exhibit 10.1 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 29, 2007)
|
|
10
|
.35*
|
|
Registration Rights Agreement, dated as of March 6, 2007,
by and among Basic Energy Services, Inc. and the JetStar
Stockholders Representative. (Incorporated by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on March 8, 2007)
|
|
21
|
.1*
|
|
Subsidiaries of the Company (Incorporated by reference to
Exhibit 21.1 of the Companys Annual Report on
Form 10-K
(SEC File No. 001-32693), filed on March 7, 2008).
|
|
23
|
.1*
|
|
Consent of KPMG LLP (Incorporated by reference to
Exhibit 23.1 of the Companys Annual Report on
Form 10-K
(SEC File
No. 001-32693),
filed on March 7, 2008)
|
|
31
|
.1
|
|
Certification by Chief Executive Officer required by
Rule 13a-14(a)
and 15d-14(a) under the Exchange Act
|
|
31
|
.2
|
|
Certification by Chief Financial Officer required by
Rule 13a-14(a)
and 15d-14(a) under the Exchange Act
|
|
|
|
|
|
Exhibit
|
|
|
No.
|
|
Description
|
|
|
32
|
.1
|
|
Certification by Chief Executive Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
|
|
32
|
.2
|
|
Certification of Chief Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
* |
|
Incorporated by reference |
|
|
|
Management contract or compensatory plan or arrangement |