Exhibit 10.1
RPC, INC.
PERFORMANCE-BASED INCENTIVE CASH COMPENSATION PLAN
1. The Plan. The purpose of this Performance-Based Incentive Cash
Compensation Plan (the "Plan") is to provide "selected executives" of RPC,
Inc. or an affiliate thereof (the "Company") with cash awards (the
"Awards") based upon pre-established, objective performance goals, thereby
promoting alignment of the participating employees' interests with the
interests of the Company and its shareholders, and focusing that
employees' efforts toward enhancing the efficiency, profitability, growth
and value of the Company.
2. Plan Administration. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company or a subcommittee
thereof (the "Committee"). The Committee shall have full authority to
interpret and administer the Plan and establish rules and regulations for
the administration of the Plan. Any actions of the Committee may be taken
by a written instrument signed by all of the members of the Committee and
such action so taken by written consent shall be as fully effective as if
it had been taken by a majority of the members at a meeting duly held and
called. The decisions and determinations of the Committee in all matters
regarding the Plan shall be in its sole discretion. Any decision made, or
action taken, by the Committee in connection with the administration of
the Plan shall be final, binding and conclusive. No member of the
Committee shall be liable to any participant for any action, determination
or decision made in good faith with respect to the Plan or any Award paid
under it. Notwithstanding the foregoing, the Committee may delegate the
administration of the Plan to one or more of its designees, but only with
respect to matters regarding participants who are not in the executive
management class. All matters regarding the participants in the executive
management class shall be the sole responsibility of the Committee.
3. Eligibility. The participants in the Plan (collectively, the
"Participants" or individually, a "Participant") shall be those executive
officers of the Company who are designated each year as Participants by
the Committee. Such designation shall be made during the first 90 days of
each calendar year. Participation in the Plan in any one calendar year
does not guarantee that an executive will be selected to participate in
the Plan in any following calendar year.
4. Size of Awards. Each calendar year, the Committee shall establish a target
award for each Participant in the Plan, which shall be expressed as a
percentage of his "Base Compensation" (the "Target Award"). For this
purpose, "Base Compensation" means the base compensation in effect on the
last day of the final pay period of the current Plan year. If and to the
extent the performance goals established for the Participant by the
Committee pursuant to Section 5 are met, the Participant's Award shall be
determined in part based upon a range from the amount of his "Threshold
Award" to the amount of his "Superior Award as set forth in Section 6. The
Committee will determine the maximum cash award as a percentage of
participants' base compensation for each applicable year but in no event
will a cash award amount exceed 200 percent of participants' base
compensation, or $2,000,000, whichever is less. The Target Award of each
Participant or class of Participants (e.g., executive management) shall be
established in writing by the Committee within the first 90 days of each
calendar year.
5. Establishment of Performance Goals. Within the first 90 days of each
calendar year and at a time when the outcome is substantially uncertain,
the Committee shall establish performance goals for each Participant. The
performance goals established for each Participant or class of
Participants (e.g., executive management) shall be in writing. The
following rules shall apply in establishing performance goals:
a. Types of performance. The performance goals established by the
Committee shall be based on one or more performance measures that
apply to the Participant alone ("Individual Performance"), the
Participant's business unit/function performance ("Business
Unit/Function Performance"), the Company as a whole ("Corporate
Performance"), or any combination of one or more of Individual
Performance, Business Unit/Function Performance or Corporate
Performance. If a Participant's performance goals are based on a
combination of Individual Performance, Business Unit/Function
Performance or Corporate Performance, the Committee shall weight the
importance of each type of performance that applies to such
Participant by assigning a percentage to it (the "Weighted
Percentage"). In no event shall the aggregate Weighted Percentages
exceed 100 percent.
b. Performance measures. The Committee shall establish the performance
measures that apply to Corporate Performance, Business Unit/Function
Performance and Individual Performance.
i. Corporate Performance. The performance measures for Corporate
Performance shall be established based on such measures as
stock price, market share, revenues, earnings per share,
return on equity, return on average assets, return on invested
capital, expense management, or other objective criteria.
ii. Business Unit/Function Performance. The performance measures
for Business Unit/Function Performance shall be established
separately for each Participant whose performance goals are
based in whole or in part on Business Unit/Function
Performance. Such performance measures shall be based on such
business criteria as achievement of financial or non-financial
goals, safety record, training goals, or other objective
criteria.
iii. Individual Performance. The performance measures for
Individual Performance shall be established separately for
each Participant whose performance goals are based in whole or
in part on Individual Performance. Such performance measures
shall be based on such business criteria as process
improvement, expense management, achievement of particular
management objectives, or other objective criteria.
If more than one business criteria is used as a performance measure
for a type of performance (e.g., Corporate Performance), the
Committee shall weight the importance of each business criteria by
assigning a percentage to it. In no event shall the aggregate
percentages exceed 100 percent.
6. Levels of performance. The Committee shall establish a threshold, target
and superior level of performance with respect to each measure of
performance. A "Performance Value" shall be assigned to each such level of
performance as follows:
Level of Performance Performance Value
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Threshold 25%
Target 100%
Superior 200%
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Interpolation shall be used to determine the Performance Value associated
with performance between the threshold, target and superior performance
levels. Performance below the threshold level shall have a 0 value and
performance above the superior level shall have a value equal to 200%.
7. Determination and Payment of Cash Award Amounts. The determination of the
Award (if any) payable to a Participant shall be made as soon as
practicable after the end of each calendar year by the Committee. The Cash
Award Amount shall be determined in accordance with the following formula:
[(AxBxC) + (AxDxE) + (AxFxG)] x Base Compensation = Cash Award Amount
where:
(A) is the Participant's Target Award;
(B) is the Participant's Weighted Percentage (if any) for Individual
Performance;
(C) is the Performance Value assigned to the level of performance
attained by the Participant for Individual Performance;
(D) is the Participant's Weighted Percentage (if any) for Business
Unit/Function Performance;
(E) is the Performance Value assigned to the level of performance
attained by the Participant for Business Unit/Function Performance;
(F) is the Participant's Weighted Percentage (if any) for Corporate
Performance; and
(G) is the Performance Value assigned to the level of performance
attained by the Participant for Corporate Performance.
The Award, if any, earned by a Participant with respect to a calendar year
shall be paid to him in cash as soon as practicable following the
determination of the Award and the Committee's written certification that
the Participant achieved his performance goals. The Committee shall not
have any discretion to increase the amount of an Award otherwise earned
and payable pursuant to the terms of the Plan to a Participant. The
Committee shall have the discretion to reduce or eliminate the amount of
an Award otherwise earned and payable pursuant to the terms of the Plan to
any Participant. No Award shall be paid under the Plan to a Participant
with respect to any particular performance measure if his performance
under the measure is below the threshold level of performance established
by the Committee for that measure. However, see 13.j. where Committee has
discretion to pay amounts outside of the Plan for outstanding performance.
8. Termination For Reasons Other Than Death, Disability or Retirement. If a
Participant's employment as an executive officer with the Company is
terminated for any reason other than death, disability or retirement
during a calendar year or thereafter prior to payment of an Award, he
shall forfeit his right to receive any Award under this Plan, except that
the Committee may elect, in its sole and absolute discretion, to pay an
Award to such Participant based on his performance and Base Compensation
for that portion of the calendar year during which he was employed as an
executive officer of the Company.
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9. Termination Due to Death, Disability or Retirement. If a Participant's
employment with the Company as an executive officer of the Company is
terminated during a calendar year or thereafter prior to payment of an
Award by reason of death, disability or retirement, and the Participant
has been actively employed by the Company as an executive officer of the
Company for a minimum of 6 calendar months during such calendar year, he
shall be eligible for an Award based on his performance and Base
Compensation for that portion of the calendar year in which he was
employed. The determination and payment of such Award shall be made by the
Committee at the end of such calendar year in the manner described in
Section 7. If a Participant's employment as an executive officer of the
Company shall terminate during the calendar year for any reason with less
than 6 calendar months of such employment, he shall forfeit his right to
receive any Award under this Plan, except that the Committee may elect, in
its sole and absolute discretion, to pay an Award to such Participant
based on his performance and Base Compensation for that portion of the
calendar year during which he was employed.
10. No Implied Contract. Nothing contained in this Plan shall be construed as
conferring upon any Participant the right or imposing upon him the
obligation to continue in the employment of the Company, nor shall it be
construed as imposing upon the Company the obligation to continue to
employ the Participant.
11. Amendments. The Board of Directors of the Company or the Committee may
amend or terminate the Plan in whole or in part at any time; provided,
that no such action shall adversely affect any Award earned and payable
under the Plan as of the date of such amendment or termination.
12. Effective Date. The Plan shall become effective on March 31, 2006, subject
to the approval by a majority vote of the stockholders of the Company
voting on the proposal at the annual meeting of stockholders for 2006.
13. Miscellaneous.
a. Taxes and other deductions. Any tax required to be withheld by any
government authority shall be deducted from each Award. Other
deductions such as 401(k) may also be deducted.
b. Non-assignability. Awards under the Plan shall not be subject to
anticipation, alienation, pledge, transfer or assignment by any
person entitled thereto, except by designation of a beneficiary or
by will or the laws of descent and distribution.
c. No trust. The obligation of the Company to make payments hereunder
shall constitute a liability of the Company to the Participants.
Such payments shall be made from the general funds of the Company,
and the Company shall not be required to establish or maintain any
special or separate fund, or otherwise to segregate assets to assure
that such payments shall be made, and neither the Participants nor
their beneficiaries shall have any interest in any particular assets
of the Company by reason of its obligations hereunder. Nothing
contained in this Plan shall create or be construed as creating a
trust of any kind or any other fiduciary relationship between the
Company and the Participants or any other person. To the extent that
any person acquires a right to receive payments from the Company
hereunder, such right shall be no greater than the right of an
unsecured creditor of the Company.
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d. Facility of payments. If a Participant or any other person entitled
to receive an Award under this Plan (the "recipient") shall, at the
time payment of any such amount is due, be incapacitated so that
such recipient cannot legally receive or acknowledge receipt of the
payment, then the Committee, in its sole and absolute discretion,
may but shall not be required to direct that the payment be made to
the legal guardian, attorney-in-fact or person with whom such
recipient is residing, and such payment shall be in full
satisfaction of the Company's obligation under the Plan with respect
to such amount.
e. Beneficiary designation. Each Participant may designate a
beneficiary hereunder. Such designation shall be in writing, shall
be made in the form and manner prescribed by the Committee, and
shall be effective only if filed with the Committee prior to the
Participant's death. A Participant may, at any time prior to his
death, and without the consent of his beneficiary, change his
designation of beneficiary by filing a written notice of such change
with the Committee in the form and manner prescribed by the
Committee. In the absence of a designated beneficiary, or if the
designated beneficiary and any designated contingent beneficiary
predecease the Participant, the beneficiary shall be the
Participant's surviving spouse, or if the Participant has no
surviving spouse, the Participant's estate.
f. Governing Law. The Plan shall be construed and its provisions
enforced and administered in accordance with the laws of the State
of Georgia.
g. A Participant must be employed in the same position on December 31
to be eligible for payment of an Award, except as described below in
i.
h. A Participant will not receive an Award if for any reason he or she
is in a position on December 31 that is not eligible for an Award or
if you are not actively employed on the date that the Award is paid.
i. Actions May Prohibit Bonus. A Participant will not receive any bonus
if he or she shall falsify documents, violate Company policy or know
of such actions by employees under his or her direction without
taking corrective actions.
j. Bonuses Outside the Plan. The Compensation Committee reserves the
right to reward performance in situations by awarding a Participant
an award outside the terms of this Plan.
k. Adjustment or modification of performance goals. The Committee, in
its discretion may adjust or modify the calculation of Performance
Goals in the event of, in recognition of, or in anticipation of, any
unanticipated, unusual nonrecurring or extraordinary corporate item,
transaction, event, or development, or in response to, or in
anticipation of, changes in applicable laws, regulations, accounting
principles, or business conditions.
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This RPC, Inc. Performance-Based Incentive Cash Compensation Plan has been
executed on behalf of the Company as of the 31st day of March, 2006.
RPC, Inc.
By: /s/ Richard A. Hubbell
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President and Chief Executive Officer
Attest:
/s/ Linda H. Graham
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Secretary
[Corporate Seal]
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