EXHIBIT 10.9
SUMMARY OF COMPENSATION ARRANGEMENTS WITH EXECUTIVE OFFICERS
AS OF FEBRUARY 28, 2005
The following summarizes the current compensation and benefits received by
the Chief Executive Officer of RPC, Inc. ("the Company") and the Company's other
most highly compensated executive officers (the "Named Executive Officers") as
of February 28, 2005. Compensation paid with respect to fiscal 2004 will be
described in the Company's 2005 Proxy Statement.
This document is intended to be a summary of existing oral, at will
arrangements, and in no way is intended to provide any additional rights to any
of the Named Executive Officers.
Base Salaries
The 2005 annual base salaries for the Company's Named Executive Officers as
of February 28, 2005 are as follows:
R. Randall Rollins, Chairman of the Board $355,000
Richard A. Hubbell, President and Chief Executive Officer $455,000
Linda H. Graham, Vice President and Secretary $120,000
Ben M. Palmer, Vice President, Chief Financial Officer and
Treasurer $150,000
Discretionary Bonuses
All of the Named Executive Officers are eligible for annual cash bonuses
which are awarded on an entirely discretionary basis, following a review by the
Company's Compensation Committee of the performance of the Company and the
executives for the relevant year. The Compensation Committee's decisions are
based upon broad performance objectives. The bonus program focuses on the
achievement of short-term objectives. Bonus decisions are made based on a review
of net income, budget objectives, and other individual-specific performance
objectives. The performance objectives considered by the Committee relate to
each executive officer improving the contribution of their functional area of
responsibility to further enhance the earnings of the Company.
Discretionary bonuses are not made subject to any plan or program, written
or unwritten. No specific performance criteria are established in advance, and
no specific ranges for bonuses are established in advance. Bonuses for a
particular fiscal year are generally determined during the first quarter of the
following fiscal year and paid at the discretion of the Compensation Committee.
Bonuses were paid in the first quarter of 2005 for the year ended December
31, 2004 and totaled $690,000 for all of the executive officers, based on
improved financial performance of the Company in 2004 compared to 2003. As
previously reported, discretionary bonuses for 2004 were paid to each of the
Named Executives in the first quarter of 2005 as follows:
R. Randall Rollins, Chairman of the Board $300,000
Richard A. Hubbell, President and Chief Executive Officer $200,000
Linda H. Graham, Vice President and Secretary $40,000
Ben M. Palmer, Vice President, Chief Financial Officer
and Treasurer $150,000
Stock Options and Other Equity Awards
The Named Executive Officers are eligible to receive options and restricted
stock under the Company's stock incentive plan, in such amounts and with such
terms and conditions as determined by the Committee at the time of grant. The
Company's stock incentive plans and standard forms of option and restricted
stock grant agreements are filed as exhibits to this Form 10-K.
Supplemental Retirement Plan
Salary and Bonus Deferrals
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All of the Named Executive Officers are eligible to participate in the
Company's Supplemental Retirement Plan ("Plan"). Messrs. Rollins and Hubbell,
declined to participate in the Company's Plan with respect to fiscal year 2005.
Mr. Palmer and Ms. Graham have elected to participate in the Company's Plan.
Ms. Graham also participates in the Supplemental Retirement Plan of Marine
Products Corporation ("MPC"), which is described in an exhibit to the Form 10-K
of MPC for fiscal year 2004.
The Plan allows participants to defer up to 25% of base salary and up to
50% of annual bonus and commissions, subject to an overall maximum of $500,000
in any given year, and other terms and conditions set forth in the Plan.
Company Contributions
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The Company makes certain "Enhanced Benefit Contributions" under the Plan
on behalf of certain Participants of long service to the Company who were 40 -
65 years of age or older on December 31, 2002. The Company makes the "Enhanced
Benefit Contributions" (as disclosed in the Company's last filed annual proxy
statement) in lieu of the benefits that previously accrued under the RPC, Inc.
Retirement Income Plan. Additional benefits ceased to accrue under the RPC, Inc.
Retirement Income Plan effective March 31, 2002. Enhanced Benefit Contributions
are made annually, for a maximum of seven years, subject to the Participant's
continued employment with the Company.
Mr. Hubbell is the only Named Executive Officer who receives an Enhanced
Benefit Contribution under the Company's Plan, which totals $26,262.31 per year.
The Company has retained absolute discretion to reduce the amount of Enhanced
Benefit Contributions at any time for any reason, and may elect not to make any
such contributions at all. The Company currently expects that Mr. Hubbell's last
Enhanced Benefit Contribution will be made with respect to fiscal year 2008.
In addition to the Enhanced Benefit Contributions, the Company may make
discretionary contributions on behalf of a Participant under the Plan in any
amount and at any time. The Company has no obligation to make any such
discretionary contribution, has no current plans to make such a contribution on
behalf of any Named Executive Officer, and has never made any such contribution
under the Supplemental Retirement Plan since its creation in August of 2002.
A copy of the Plan is filed as an exhibit to this Form 10-K. The material
terms and conditions of the Plan are more particularly described in the
Company's Form 8-K filed with the U.S. Securities and Exchange Commission on
December 23, 2004.
Automobile Usage
Mr. Hubbell is entitled to the use of a Company owned automobile. The
automobile is self-insured and maintained by the Company. The Company also pays
all fuel expenses. Mr. Hubbell's personal use of the automobile is treated as
taxable income for federal and state income tax purposes. His personal use of
the automobile is valued at approximately $690 per month. Mr. Palmer receives
an automobile allowance of $700 per month in addition to reimbursement of fuel
expenses.
Other Benefits
The Named Executive Officers are eligible to participate in the Company's
regular employee benefit programs, including the 401(k) plan with Company match,
group life insurance, group medical and dental coverage and other group benefit
plans. All of the Named Executives are eligible for the Retirement Income Plan
that was frozen in March 2002. See Supplemental Retirement Plan above for
further discussion.
All of the Named Executive Officers are also executive officers of MPC and
receive compensation from that company. Disclosure regarding such compensation
can be found in MPC's filings with the Securities and Exchange Commission.