UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant
þ
Filed by a Party other than the Registrant
o
Check the appropriate box:
o
Preliminary Proxy Statement
o
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ
Definitive Proxy Statement
o
Definitive Additional Materials
o
Soliciting Material Pursuant to §240.14a-12
CARBO CERAMICS INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ
No fee required.
o
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
o
Fee paid previously with preliminary materials.
o
Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
CARBO
CERAMICS INC.
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
The Stockholders of CARBO Ceramics Inc.:
Notice is hereby given that the Annual Meeting of Stockholders
of CARBO Ceramics Inc. will be held Tuesday, May 18, 2010,
at 9:00 A.M. local time, at The St. Regis Hotel, 1919 Briar
Oaks Lane, Houston, Texas 77027, for the following purposes:
1. To elect seven Directors, the names of whom are set
forth in the accompanying proxy statement, to serve until the
2011 Annual Meeting.
2. To ratify the appointment of Ernst & Young LLP
as the Companys independent registered public accounting
firm.
3. To transact such other business as may properly be
brought before the meeting.
Stockholders of record at the close of business on
March 22, 2010 are the only stockholders entitled to notice
of, and to vote at, the Annual Meeting of Stockholders. A
complete list of stockholders entitled to vote at the Annual
Meeting will be available for examination at the Companys
principal offices located at 575 N. Dairy Ashford,
Suite 300, Houston, Texas 77079, for a period of ten days
prior to the Annual Meeting. This list of stockholders will also
be available for inspection at the Annual Meeting and may be
inspected by any stockholder for any purpose germane to the
Annual Meeting.
It is important that your shares be represented at the meeting.
Accordingly, even if you plan to attend the meeting in person,
please complete, sign, date and promptly return the enclosed
proxy card in the postage-prepaid envelope prior to the Annual
Meeting or follow the Internet or telephone voting procedures
described on the proxy card. If you attend the meeting and wish
to vote in person, you may withdraw your proxy and vote in
person. Your prompt consideration is greatly appreciated.
By Order of the Board of Directors,
R. Sean Elliott
Corporate Secretary
April 1, 2010
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 18,
2010: The Proxy Statement and Annual Report to Stockholders are
available at
www.carboannualmeeting.com
.
TABLE OF CONTENTS
CARBO
CERAMICS INC.
575 N. Dairy Ashford,
Suite 300
Houston, Texas 77079
INFORMATION
CONCERNING SOLICITATION AND VOTING
The enclosed proxy is solicited on behalf of the Board of
Directors (the Board) of CARBO Ceramics Inc. (the
Company) for use at the Companys Annual
Meeting of Stockholders (the Annual Meeting) to be
held May 18, 2010, at 9:00 A.M. local time, or at any
adjournment or postponement thereof, for the purposes set forth
herein and in the accompanying Notice of Annual Meeting of
Stockholders. The Annual Meeting will be held at The St. Regis
Hotel, 1919 Briar Oaks Lane, Houston, Texas 77027.
The Companys principal executive offices are located at
575 N. Dairy Ashford, Suite 300, Houston,
Texas 77079. The telephone number at that address is
(281) 921-6400.
Most stockholders (including participants in the Company stock
fund in the Companys Savings and Profit Sharing Plan) have
a choice of granting their proxies by telephone, over the
Internet or by using a traditional proxy card. You should refer
to your proxy or voting instruction card to see which options
are available to you and how to use them. The Internet and
telephone voting procedures are designed to authenticate
stockholders identities and to confirm that their
instructions have been properly recorded.
The cost of preparing, assembling and mailing the proxy material
and of reimbursing brokers, nominees and fiduciaries for the
out-of-pocket
and clerical expenses of transmitting copies of the proxy
material to the beneficial owners of shares held of record by
such persons, will be borne by the Company. The Company has
retained Mellon Investor Services LLC (Mellon) to
aid in the solicitation of proxies. It is estimated that the
cost of Mellons services will be approximately $6,500 plus
expenses. In addition to the solicitation of proxies by mail,
proxies may also be solicited by telephone, electronic
communication, or personal communication by employees of Mellon
and the Company. These proxy solicitation materials are being
mailed on or about April 9, 2010 to all stockholders
entitled to vote at the Annual Meeting.
A stockholder giving a proxy pursuant to this solicitation
(including via telephone or via the Internet) may revoke it at
any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a valid proxy
(including via telephone or via the Internet) bearing a later
date or by attending the Annual Meeting and voting in person.
Deadline
for Receipt of Stockholder Proposals
Pursuant to regulations of the SEC, in order to be included in
the Companys Proxy Statement for its 2011 Annual Meeting,
stockholder proposals must be received at the Companys
principal offices, 575 N. Dairy Ashford,
Suite 300, Houston, Texas 77079, Attention: Secretary, no
later than December 10, 2010 and must comply with
additional requirements established by the SEC. In addition, the
Companys Second Amended and Restated By-Laws provide that
any stockholder who desires either to bring a stockholder
proposal before an annual meeting of stockholders or to present
a nomination for director at an annual meeting of stockholders
must give advance notice to the Secretary of the Company with
respect to such proposal or nominee. The Companys Second
Amended and Restated Bylaws generally require that written
notice be delivered to the Secretary of the Company at the
Companys principal offices not less than 90 days nor
more than 120 days prior to the anniversary of the
preceding years annual meeting of stockholders and contain
certain information regarding the stockholder desiring to
present a proposal or make a nomination and, in the case of a
nomination, information regarding the proposed director nominee.
For the 2011 Annual Meeting, the Secretary of the Company must
receive written notice on or after January 18, 2011 and on
or before February 17, 2011. A copy of the Companys
Second Amended and Restated Bylaws is available upon request
from the Secretary of the Company.
Record
Date, Shares Outstanding and Voting
Only stockholders of record at the close of business on
March 22, 2010 are entitled to notice of, and to vote at,
the Annual Meeting. At the record date, 23,124,688 shares
of the Companys Common Stock were issued and outstanding
and entitled to be voted at the meeting. The presence, in person
or by proxy, of stockholders holding a majority of the shares of
the Companys Common Stock entitled to vote will constitute
a quorum for the Annual Meeting.
Every stockholder is entitled to one vote for each share held
with respect to each matter, including the election of
Directors, which comes before the Annual Meeting. Stockholders
do not have the right to cumulate their votes in the election of
Directors. If a stockholder specifies how the proxy is to be
voted with respect to any of the proposals for which a choice is
provided, the proxy will be voted in accordance with such
specifications. If a stockholder fails to specify a choice with
respect to such proposals, the proxy will be voted FOR all
director nominees and FOR the ratification of the appointment of
Ernst & Young LLP (Ernst &
Young) as the Companys independent registered public
accounting firm. The affirmative vote of holders of a plurality
of the shares of Common Stock present in person or represented
by proxy at the meeting and entitled to vote is required to
elect each Director nominee. The affirmative vote of a majority
of the shares of Common Stock present in person or represented
by proxy at the meeting and entitled to vote is required to
ratify the appointment of Ernst & Young as the
Companys independent registered public accounting firm.
New York Stock Exchange (NYSE) rules permit brokers
to vote for routine matters such as the ratification of the
appointment of Ernst & Young without receiving
instructions from the beneficial owner of the shares. NYSE rules
prohibit brokers from voting on the election of directors
without receiving instructions from the beneficial owner of the
shares. In the absence of instructions, the shares are viewed as
being subject to broker non-votes, in regard to the
election of directors. Broker non-votes will be
counted for quorum purposes (as they are present and entitled to
vote on the ratification of Ernst & Youngs
appointment) but will not be treated as votes cast in regard to,
and will have no effect upon, the election of directors. Under
Delaware law, abstentions are treated as present and entitled to
vote and thus, will be counted in determining whether a quorum
is present and will have the effect of a vote cast against a
matter, except for the election of Directors in which case an
abstention will have no effect.
Householding
of Proxy Materials
The SEC has adopted rules that permit companies and
intermediaries such as brokers to satisfy delivery requirements
for proxy statements with respect to two or more stockholders
sharing the same address by delivering a single proxy statement
addressed to those stockholders. This process, which is commonly
referred to as householding, potentially provides
extra convenience for stockholders and cost savings for
companies. The Company and some brokers household proxy
materials, delivering a single proxy statement to multiple
stockholders sharing an address unless contrary instructions
have been received from the affected stockholders. Once you have
received notice from your broker or the Company that they will
be householding materials to your address, householding will
continue until you are notified otherwise or until you revoke
your consent. If, at any time, you no longer wish to participate
in householding and would prefer to receive a separate proxy
statement, or if you are receiving multiple copies of the proxy
statement and wish to receive only one, please notify your
broker if your shares are held in a brokerage account or the
Company if you hold shares registered in your name, and the
Company will promptly undertake to carry out your request. You
can notify the Company by sending a written request to the
Company at 575 N. Dairy Ashford, Suite 300,
Houston, Texas 77079, or by telephone at
(281) 921-6400.
2
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists as of March 22, 2010, with
respect to each person who is known to the Company to be the
beneficial owner of more than 5% of the outstanding shares of
Common Stock of the Company, the name and address of such owner,
the number of shares of Common Stock beneficially owned and the
percentage such shares comprised of the outstanding shares of
Common Stock of the Company. Except as indicated, each holder
has sole voting and dispositive power over the listed shares.
Percentage of beneficial ownership is based on
23,124,688 shares of Common Stock outstanding on
March 22, 2010.
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Shares Beneficially
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Name and Address
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Owned
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of Beneficial Owner
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Number
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Percent
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William C. Morris(1)
60 East
42
nd
Street, Suite 3210
New York, New York 10165
|
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3,214,250
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|
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13.9
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%
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Neuberger Berman Group LLC(2)
605 Third Avenue
New York, New York 10158
|
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3,032,124
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|
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13.1
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%
|
BlackRock, Inc.(3)
40 East
52
nd
Street
New York, New York 10022
|
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1,730,107
|
|
|
|
7.5
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%
|
Kayne Anderson Investment Management LLC(4)
1800 Avenue of the Stars
2
nd
Floor
Los Angeles, CA 90067
|
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1,579,271
|
|
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6.8
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%
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(1)
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Based on a Schedule 13G/A filing with the SEC, as of
December 31, 2009, Mr. Morris reported sole voting
power as to 3,199,250 shares of Common Stock. Shares shown
as beneficially owned by Mr. Morris include
15,000 shares of Common Stock owned by a charitable trust
as to which Mr. Morris disclaims any beneficial ownership.
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(2)
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Based on a Schedule 13G/A filing with the SEC, as of
December 31, 2009 Neuberger Berman Group LLC reported
shared voting power as to 2,588,024 shares of Common Stock,
and shared dispositive power as to 3,032,124 shares of
Common Stock with Neuberger Berman, LLC, Neuberger Berman
Management LLC and Neuberger Berman Equity Funds.
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(3)
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Based on a Schedule 13G filing with the SEC, as of
December 31, 2009, BlackRock, Inc. reported sole voting and
dispositive power as to 1,730,107 shares of Common Stock.
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(4)
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Based on a Schedule 13G filing with the SEC, as of
December 31, 2009, Kayne Anderson Rudnick Investment
Management LLC reported sole voting and dispositive power as to
1,579,271 shares of Common Stock.
|
3
The following table sets forth the number of shares of Common
Stock of the Company beneficially owned by (i) each
Director of the Company, (ii) each named executive officer
of the Company, and (iii) Directors and all executive
officers of the Company as a group, as of March 22, 2010.
For purposes of this proxy statement, Gary A. Kolstad, Ernesto
Bautista, III, Paul G. Vitek, Mark L. Edmunds, David G.
Gallagher and R. Sean Elliott are referred to as the
Companys named executive officers. Except as
indicated, each holder has sole voting and dispositive power
over the listed shares. No current Director, nominee Director or
executive officer has pledged any of the shares of Common Stock
disclosed below. Percentage of beneficial ownership is based on
23,124,688 shares of Common Stock outstanding on
March 22, 2010. The number and percentage of shares of
Common Stock beneficially owned is determined under the rules of
the SEC and is not necessarily indicative of beneficial
ownership for any other purpose. Under these rules, beneficial
ownership includes any shares of Common Stock for which a person
has sole or shared voting power or investment power and also any
shares of Common Stock underlying options that are exercisable
by that person within 60 days of March 22, 2010.
Unless otherwise indicated in the footnotes, the address for
each executive officer and Director is
c/o CARBO
Ceramics Inc., 575 N. Dairy Ashford, Suite 300,
Houston, Texas 77079.
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Percent of
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Amount and Nature of
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Common
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Beneficial Ownership
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Stock
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Currently
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Acquirable
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Beneficially
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Owned
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Within 60 Days(1)
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Owned
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Directors
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Sigmund L. Cornelius
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2,000
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*
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James B. Jennings
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2,000
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2,051
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*
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H. E. Lentz, Jr.
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8,000
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*
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Randy L. Limbacher
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2,000
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1,977
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*
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Gary A. Kolstad(2)
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68,131
|
|
|
|
|
|
|
|
*
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William C. Morris(3)
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3,214,250
|
|
|
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|
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13.9
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%
|
Robert S. Rubin
|
|
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700,350
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|
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3.0
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%
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Other Named Executive Officers
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|
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Ernesto Bautista, III
|
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10,635
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|
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|
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|
|
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*
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Mark L. Edmunds
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16,511
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*
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R. Sean Elliott
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7,154
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|
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*
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David G. Gallagher(4)
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17,515
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|
*
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|
Paul G. Vitek(5)
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9,000
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*
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Directors and All Executive Officers as a Group
(12 persons)
(2)(3)(4)
|
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4,057,546
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|
|
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4,028
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|
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17.6
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%
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|
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|
*
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Less than 1%.
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(1)
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|
With respect to the Directors set forth in the table, amounts
represent shares in bookkeeping accounts for each Director in
the Director Deferred Fee Plan. See Director
Compensation below.
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(2)
|
|
Shares shown as beneficially owned by Mr. Kolstad include
2,750 shares of Common Stock held jointly with his spouse,
with whom Mr. Kolstad shares voting and dispositive power.
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(3)
|
|
Shares shown as beneficially owned by Mr. Morris include
15,000 shares of Common Stock owned by a charitable trust
as to which Mr. Morris disclaims any beneficial ownership.
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(4)
|
|
Shares shown as beneficially owned by Mr. Gallagher include
5,607 shares of Common Stock jointly held with his spouse,
with whom Mr. Gallagher shares voting and dispositive power.
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(5)
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|
Mr. Vitek retired from the Company in January 2009.
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4
ELECTION
OF DIRECTORS (PROPOSAL NO. 1)
Nominees.
A board of seven Directors is to be
elected at the meeting. Each Director elected to the Board will
hold office until the next Annual Meeting or until his or her
successor has been elected and qualified. Unless otherwise
instructed, the proxy holders will vote the proxies received by
them for the seven nominees named below, all of whom are
presently Directors of the Company. In the event that any
nominee is unable or declines to serve as a Director at the time
of the Annual Meeting, the proxies will be voted for any nominee
who shall be designated by the present Board to fill the
vacancy, unless the size of the Board is reduced. The proxies
cannot be voted for a greater number of persons than the number
of nominees named in this proxy statement. It is not expected
that any nominee will be unable or will decline to serve as a
Director. Biographical information regarding each nominee is set
forth below, as well as a summary of the experiences,
qualifications, attributes or skills that caused the Nominating
and Corporate Governance Committee and the Board to determine
that the nominee should serve as a Director of the Company. Each
nominees experience and understanding is evaluated in
determining the overall composition of the Board.
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Director
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Name (Age)
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|
Business Experience During Past 5 Years and Other
Information
|
|
Since
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William C. Morris(71)
|
|
Mr. Morris currently serves as Chairman of the Board of the
Company. From December 1988 until November 2008, he served as
Chairman of the Board of Directors of J. & W.
Seligman & Co. Incorporated (a New York-based
investment advisory firm); Chairman of the Board of
Tri-Continental Corporation; and Chairman of each of the
investment companies in the Seligman Group of Funds.
Mr. Morris retired as a Director of Kerr-McGee Corporation
in 2003. Mr. Morris has extensive experience in the areas
of corporate finance, mergers and acquisitions and strategic
planning. He also possesses a strong understanding of corporate
governance matters. In addition, his long tenure as a director
of the Company is of particular value to the Board in the course
of its discussions and deliberations.
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1987
|
Sigmund L. Cornelius(55)
|
|
Since October 2008, Mr. Cornelius has served as Senior Vice
President, Finance, and Chief Financial Officer of
ConocoPhillips (a Houston-based energy company). Prior to that,
he served as Senior Vice President, Planning, Strategy and
Corporate Affairs of ConocoPhillips since September 2007, having
previously served as President, Exploration and
Production Lower 48 since 2006. He served as
President, Global Gas of ConocoPhillips since 2004, and prior to
that served as President, Lower 48, Latin America and Midstream
since 2003. Mr. Cornelius was a director of DCP Midstream
GP, LLC from November 2007 to October 2008. Mr. Cornelius
has significant domestic and international executive experience
in the oil and natural gas industry, which is the primary end
user of the Companys products and services. In addition,
as the Chief Financial Officer of a public company, he has
extensive experience and skills in the areas of corporate
finance, accounting, strategic planning and risk oversight.
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2009
|
James B. Jennings(69)
|
|
Mr. Jennings currently serves as a Senior Advisor to Brown
Brothers Harriman & Co. (a banking and financial
services firm) (Brown Brothers Harriman). From April
2004 until December 2007, Mr. Jennings served as Chairman
of the Board of Hunt Oil Company (a Dallas-based oil and natural
gas company) and presently holds the position of Chairman
Emeritus. Prior to that time, Mr. Jennings held various
executive positions with Hunt Oil Company, including
President/Director and Executive Vice President of International
and U.S. Exploration, and Group Vice President World
Exploration and Production. Mr. Jennings served on the
Board of Directors of Hunt Oil Company from 1991 to 2007.
Mr. Jennings has extensive senior leadership experience in
the oil and natural gas industry, including international
operations. He also possesses valuable skills in the area of
strategic planning.
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2007
|
5
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Director
|
Name (Age)
|
|
Business Experience During Past 5 Years and Other
Information
|
|
Since
|
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Gary A. Kolstad(51)
|
|
Mr. Kolstad was appointed by the Board of Directors to
serve as President and Chief Executive Officer and a Director of
the Company, effective as of June 1, 2006. Mr. Kolstad
was previously employed by Schlumberger, Ltd. (a Paris- and
Houston-based oilfield services company), from 1985 to June
2006, where he most recently served as Vice President, Global
Accounts for Schlumberger Oilfield Services and previously led
Schlumbergers onshore business unit as Vice
President/General Manager, Oilfield Services U.S.
Onshore. Mr. Kolstad has a Bachelor of Science degree in
Petroleum Engineering and a strong executive background in the
oil field services business, which is the primary industry that
purchases products and services from the Company. He also has a
solid understanding of international operations and strategic
planning.
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2006
|
H. E. Lentz, Jr.(65)
|
|
Managing Director of Lazard Frères & Co. (an
investment banking firm) since June 2009. Formerly Managing
Director of Barclays Capital, an investment banking firm and
successor to Lehman Brothers, from September 2008 to March 2009.
Managing Director of Lehman Brothers from 1993 to 2002;
consultant to Lehman in 2003 and Advisory Director of Lehman
from 2004 to September 2008. He also serves as the non-executive
Chairman of the Board of Rowan Companies, Inc., and as a
director of Peabody Energy Corporation. Mr. Lentz has
significant experience in the areas of corporate finance,
mergers and acquisitions and strategic planning. As a director
of two other public companies, he also has experience in the
area of corporate governance.
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|
2003
|
Randy L. Limbacher(51)
|
|
Since November 2007, Mr. Limbacher has served as President
and Chief Executive Officer and a Director of Rosetta Resources,
Inc. (a Houston-based oil and natural gas company).
Mr. Limbacher was also appointed as Chairman of the Board
of Rosetta in February 2010. From April 2006 until November
2007, Mr. Limbacher held the position of President,
Exploration and Production Americas for
ConocoPhillips (a Houston-based energy company). Prior to that
time, Mr. Limbacher spent over twenty years with Burlington
Resources Inc. (a Houston-based oil and natural gas company),
where he served as Executive Vice President and Chief Operating
Officer from 2002 until acquired by ConocoPhillips in April
2006. He was a Director of Burlington Resources from January
2004 until the sale of the company. Mr. Limbacher has
significant executive experience in the oil and natural gas
industry. He also possesses skills in the area of strategic
planning.
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2007
|
Robert S. Rubin(78)
|
|
Mr. Rubin has served as a Senior Vice President of JPMorgan
Chase & Co. (a New York-based financial holding
company) (JP Morgan) and a predecessor firm since
2001. He has extensive experience in the areas of corporate
finance, accounting, mergers and acquisitions, strategic
planning and risk oversight.
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|
1997
|
The Board of Directors recommends a vote FOR the election of
each of the nominees for Director named in this proxy
statement.
The Board has determined that each of the following Directors is
(or, in the cases of Messrs. Cooke and Deaton, was during
the time of their Board service in 2009) independent within
the meaning of the applicable rules of the SEC and the listing
standards of the NYSE:
William C. Morris
Claude E. Cooke, Jr.
Sigmund Cornelius
Chad C. Deaton
James B. Jennings
H. E. Lentz, Jr.
Randy L. Limbacher
Robert S. Rubin
The Board has evaluated the independence of the members of the
Board under the independence standards promulgated by the NYSE.
In conducting this evaluation, the Board and Audit Committee
considered transactions and relationships between each Director
nominee or his immediate family and the Company to determine
whether
6
any such transactions or relationships were material and,
therefore, inconsistent with a determination that each such
Director nominee is independent. Based upon that evaluation, the
Board determined that Messrs. Morris, Cornelius, Jennings,
Limbacher, Lentz and Rubin have no material relationship with
the Company and, as a result, are independent. In determining
the independence of Mr. Morris, the Board specifically
considered that the Company reimburses Directors for direct
expenses incurred in connection with Company related-travel, and
that Mr. Morris may travel on Company business by means of
a private aircraft owned by Mr. Morris. The Board concluded
that such expense reimbursements are not inconsistent with a
determination that Mr. Morris is independent. In
determining the independence of Mr. Cornelius, the Board
specifically considered his employment as a Senior Vice
President and Chief Financial Officer of ConocoPhillips and
ConocoPhillips status as a customer of the Company and one
of its subsidiaries and concluded that such employment was not
inconsistent with a determination that Mr. Cornelius is
independent. In determining the independence of
Mr. Jennings, the Board specifically considered that he
provides consulting services to Brown Brothers Harriman and that
the Company formerly maintained a credit facility with Brown
Brothers Harriman, and concluded that such consulting services
were not inconsistent with a determination that
Mr. Jennings is independent. In determining the
independence of Mr. Lentz, the Board specifically
considered his prior employment as a Managing Director to
Barclays Capital and their provision of brokerage services to
the Company in connection with its stock repurchase program and
concluded that such prior employment was not inconsistent with a
determination that Mr. Lentz is independent. In determining
the independence of Mr. Rubin, the Board specifically
considered his employment as a Senior Vice President of JP
Morgan and that the Company previously placed funds on deposit
at JP Morgan, and concluded that such employment was not
inconsistent with a determination that Mr. Rubin is
independent.
Please see the Companys Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009 for information
about the Companys executive officers.
Interested parties may contact the Board, or the non-management
Directors as a group, at the following address:
Board of Directors
Or
Non-Management Directors
c/o CARBO
Ceramics Inc.
575 N. Dairy Ashford
Suite 300
Houston, Texas 77079
Communications may also be sent to individual Directors at the
above address. Communications to Directors will be reviewed and
referred in compliance with the Procedures for Unsolicited
Communications, as approved by the Nominating and Corporate
Governance Committee of the Board on July 12, 2004 (which
comprise a majority of the Boards independent directors).
Communications to the Board, the non-management Directors or any
individual Director that relate to the Companys
accounting, internal accounting controls or auditing matters
will also be referred to the Chairman of the Audit Committee.
Other communications will be referred to the appropriate
Committee chairman and may also be sent, as appropriate, to the
Companys Chief Compliance Officer.
BOARD OF
DIRECTORS, COMMITTEES OF THE BOARD OF DIRECTORS AND
MEETING ATTENDANCE
The Board met eight times during the last fiscal year. Each
Director attended at least 75% of all meetings of the Board and
the Committees of which such Director is a member. Although
there is no formal policy as to Director attendance at the
Annual Meeting of Stockholders, all Directors (other than
Mr. Cornelius who was elected to the Board on
November 17, 2009) attended the 2009 Annual Meeting of
Stockholders and all are anticipated to attend the 2010 Annual
Meeting of Stockholders as well.
The primary function of the Board is oversight, which includes
among other matters, oversight of the principal risk exposures
to the Company. To assist the Board in this role, the Audit
Committee periodically requests the Companys internal
auditor to conduct a review of enterprise risks associated with
the Company. The internal audit
7
firm reports its findings and assessments to the Audit
Committee, which then reports the findings to the Board as a
whole.
Pursuant to the Companys corporate governance guidelines,
the offices of Chairman of the Board and Chief Executive Officer
are currently separated. The positions of the Chairman of the
Board and the Chief Executive Officer are not held by the same
person and the Chairman of the Board is not an employee of the
Company. The Board views this separation as a means to allow the
Board to fulfill its role in risk oversight through a
collaborative, yet independent, interaction with Company
management.
The Board has an Audit Committee currently comprised of five
members and a Compensation Committee and Nominating and
Corporate Governance Committee, each of which is currently
comprised of six members. The charters of each of these
Committees and the Companys Corporate Governance
Guidelines are available free of charge on the Companys
website at www.carboceramics.com or by writing to the Company
at: CARBO Ceramics Inc.,
c/o Corporate
Secretary, 575 N. Dairy Ashford, Suite 300,
Houston, Texas 77079. The Board votes annually on the membership
and chairmanship of all Committees.
Audit Committee.
The Audit Committee currently
consists of Robert S. Rubin (Chairman), Sigmund L. Cornelius,
James B. Jennings, H.E. Lentz, Jr. and Randy L. Limbacher.
The Committee met nine times during the last fiscal year. The
Board has determined that all of the members of the Audit
Committee are independent within the meaning of the applicable
rules of the SEC and the listing standards of the NYSE. The
Board has also determined that Robert S. Rubin meets the
requirements for being an audit committee financial
expert, as that term is defined by applicable SEC and NYSE
rules. The Audit Committee appoints and retains the
Companys independent registered public accounting firm,
approves the fee arrangement and scope of the audit, reviews the
financial statements and the independent registered public
accounting firms report, considers comments made by the
independent registered public accounting firm with respect to
the Companys internal control structure and reviews
internal accounting procedures and controls with the
Companys financial and accounting staff. The Audit
Committee also conducts the review of the non-audit services
provided by the independent registered public accounting firm to
determine their compatibility with its independence. The Audit
Committee reviews the independent registered public accounting
firms performance, qualification and quality control
procedures and establishes policies for: (i) the
pre-approval of audit and permitted non-audit services by the
independent registered public accounting firm; (ii) the
hiring of former employees of the independent registered public
accounting firm; and (iii) the submission and confidential
treatment of concerns from employees or others about accounting,
internal controls, auditing or other matters.
The Audit Committee reviews with management the Companys
disclosure controls and procedures and internal control over
financial reporting and the processes supporting the
certifications of the Chief Executive Officer and Chief
Financial Officer. It also reviews with management and the
Companys independent registered public accounting firm the
Companys critical accounting policies. The Audit Committee
reviews the Companys annual and quarterly SEC filings and
other related Company disclosures. The Audit Committee reviews
the Companys compliance with the Code of Business Conduct
and Ethics as well as other legal and regulatory matters. The
Committee reviews and approves related person transactions in
accordance with the Companys Code of Business Conduct and
Ethics and applicable SEC guidelines. Such reviews are conducted
periodically, but no less frequently than annually, and are
reflected in the minutes of the Audit Committee.
In performing these duties, the Audit Committee has full
authority to: (i) investigate any matter brought to its
attention with full access to all books, records, facilities and
personnel of the Company; (ii) retain outside legal,
accounting or other consultants to advise the Committee; and
(iii) request any officer or employee of the Company, the
Companys in-house or outside counsel, internal auditor,
internal audit service providers or independent registered
public accounting firm to attend a meeting of the Committee or
to meet with any members of, or consultants to, the Committee.
Compensation Committee.
The Compensation
Committee currently consists of H.E. Lentz, Jr. (Chairman),
Sigmund L. Cornelius, James B. Jennings, Randy L. Limbacher,
William C. Morris and Robert S. Rubin. The Committee met five
times during the last fiscal year. The Board has determined that
all of the members of the Compensation Committee are independent
within the meaning of the listing standards of the NYSE. The
Compensation Committee (i) establishes policies relating to
the compensation of the non-employee Directors,
8
officers and key management employees of the Company;
(ii) reviews and approves the compensation of the
non-employee Directors, officers and the President and Chief
Executive Officer; (iii) reviews the President and Chief
Executive Officers recommendations with respect to cash
incentive compensation awards for non-officer employees;
(iv) oversees the administration of the Companys
equity compensation plans; and (v) reviews and approves
periodically, but no less than annually, the Companys
compensation goals and objectives with respect to its officers,
including oversight of the risks associated with the
Companys compensation programs. The Compensation Committee
also evaluates and approves post-service arrangements with
management and establishes and reviews periodically the
Companys perquisite policies for management and Directors.
In performing its duties, the Compensation Committee has
ultimate authority and responsibility to engage and terminate
any outside consultant to assist in determining appropriate
compensation levels for the Chief Executive Officer or any other
member of the Companys management and to approve the terms
of any such engagement and the fees of any such consultant. For
2009 the Company engaged Stone Partners, Inc. as a compensation
consultant to review and recommend executive compensation and to
assist in the compensation decisions made by the Compensation
Committee and the Board. In addition, the Committee has full
access to any relevant records of the Company and may also
request that any officer or other employee of the Company
(including the Companys senior compensation or human
resources executives), the Companys in-house or outside
counsel, or any other person meet with any members of, or
consultant to, the Committee. In addition to information
provided by outside compensation consultants, the officers of
the Company may also collect peer group compensation data for
review by the Committee.
The Committee sets the compensation policy for the Company as a
whole and specifically decides all compensation matters related
to the officers of the Company. The Committee also delegated to
its Chairman the ability to grant interim equity awards to
non-officer employees of the Company under the
stockholder-approved equity plans of the Company in an amount
not to exceed 1,000 shares of Company Common Stock per
employee award with such awards reported to the full Committee
at its next meeting.
Nominating and Corporate Governance
Committee.
The Nominating and Corporate
Governance Committee currently consists of William C. Morris
(Chairman), Sigmund L. Cornelius, James B. Jennings, Randy L.
Limbacher, H. E. Lentz, Jr. and Robert S. Rubin. The
Nominating and Corporate Governance Committee acted unanimously
in recommending the nomination of the Directors in
Proposal One. The Committee met five times during the last
fiscal year. The Board has determined that all of the members of
the Nominating and Corporate Governance Committee are
independent within the meaning of the listing standards of the
NYSE. The Nominating and Corporate Governance Committee
establishes the Companys corporate governance principles
and guidelines. These principles and guidelines address, among
other matters, the size, composition and responsibilities of the
Board and its Committees, including their oversight of
management. The Committee also advises the Board with respect to
the charter, structure and operation of each Committee of the
Board. The Nominating and Corporate Governance Committee
oversees the evaluation of the Board and senior executives of
the Company and reviews and periodically reports to the Board on
matters concerning Company succession planning. The Committee
has full access to any relevant records of the Company and may
retain outside consultants to advise it. The Committee has the
ultimate authority and responsibility to engage or terminate any
outside consultant to identify Director candidate(s) and to
approve the terms and fees of such engagement of any such
consultant. The Committee may also request that any officer or
other employee of the Company, the Companys outside
counsel, or any other person meet with any members of, or
consultant to, the Committee.
The Companys Board has charged the Nominating and
Corporate Governance Committee with identifying individuals
qualified to become members of the Board and recommending
Director nominees for each Annual Meeting of Stockholders,
including the recommendation of nominees to fill any vacancies
on the Board. The Nominating and Corporate Governance Committee
considers Director candidates suggested by its members, other
Directors, senior management and stockholders. Stockholders
desiring to make such recommendations should timely submit the
candidates name, together with biographical information
and the candidates written consent to be nominated and, if
elected, to serve to: Chairman, Nominating and Corporate
Governance Committee of the Board of Directors of CARBO Ceramics
Inc., 575 N. Dairy Ashford, Suite 300, Houston,
Texas 77079. To assist it in identifying Director candidates,
the Committee is also authorized to retain, at the expense of
the Company, third party search firms and legal, accounting, or
other advisors, including for purposes of performing background
9
reviews of potential candidates. The Committee provides guidance
to search firms it retains about the particular qualifications
the Board is then seeking. In 2009, the Committee retained
Russell Reynolds Associates to explore the availability of
Director candidates.
All Director candidates, including those recommended by
stockholders, are evaluated on the same basis. Candidates are
selected for their character, judgment, business experience and
specific areas of expertise, among other relevant
considerations, such as the requirements of applicable law and
listing standards (including independence standards) and
diversity of membership. While the Companys Corporate
Governance Guidelines do not prescribe diversity standards, as a
matter of practice, the Nominating and Corporate Governance
Committee considers diversity in the context of the Board as a
whole, taking into account personal characteristics and
experience of current and prospective directors in order to
facilitate Board deliberations that reflect an appropriate range
of perspective. The Board of Directors recognizes the importance
of soliciting new candidates for membership on the Board of
Directors and that the needs of the Board of Directors, in terms
of the relative experience and other qualifications of
candidates, may change over time. In determining the needs of
the Board of Directors and the Company, the Nominating and
Corporate Governance Committee considers the qualifications of
sitting Directors and consults with other members of the Board
of Directors (including as part of the Boards annual
self-evaluation), the Chief Executive Officer and other members
of senior management and, where appropriate, external advisors.
All Directors are expected to exemplify the highest standards of
personal and professional integrity and to assume the
responsibility of challenging management through their active
and constructive participation and questioning in meetings of
the Board of Directors and its various Committees, as well as in
less formal contacts with management. Director candidates, other
than sitting Directors, are interviewed at the direction of the
Committee, which may include (at the Committees direction)
interviews by the Chairman of the Board of Directors, other
Directors, the Chief Executive Officer and other key management
personnel, and the results of those interviews are considered by
the Committee in its deliberations.
The members of the Nominating and Corporate Governance Committee
constitute all of the non-management Directors on the
Companys Board of Directors. As the Chairman of the
Nominating and Corporate Governance Committee, William C. Morris
serves as the presiding Director for non-management executive
sessions of these Directors.
CODE OF
BUSINESS CONDUCT AND ETHICS
The Company has adopted a Code of Business Conduct and Ethics
that applies to its Directors and employees, including its Chief
Executive Officer, Chief Financial Officer and Controller. The
Code of Business Conduct and Ethics, including future
amendments, is available free of charge on the Companys
website at www.carboceramics.com or by writing to the Company
at: CARBO Ceramics Inc.,
c/o General
Counsel, 575 N. Dairy Ashford, Suite 300,
Houston, Texas 77079. The Company will also post on its website
any amendment to or waiver under the Code of Business Conduct
and Ethics granted to any of its Directors or executive
officers. No such waivers were requested or granted in 2009.
10
DIRECTOR
COMPENSATION
The following table sets forth information regarding the
compensation of the Companys non-employee Directors.
Mr. Kolstad did not receive any additional compensation for
his service on the Board in 2009. Compensation received by
Mr. Kolstad in his capacity as President and Chief
Executive Officer is disclosed under Compensation of
Executive Officers below.
Director
Compensation for Fiscal Year 2009
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Change in
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Pension
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Value and
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Fees
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Nonqualified
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Earned
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Non-Equity
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Deferred
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or Paid in
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Stock
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Option
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Incentive Plan
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Compensation
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All Other
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Cash
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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
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Name
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($)(1)
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($)(2)(3)
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($)
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($)
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($)
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($)
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($)
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Claude E. Cooke, Jr.(4)
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19,500
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19,500
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Sigmund L. Cornelius
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7,750
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127,100
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134,850
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Chad C. Deaton(5)
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28,250
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28,250
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James B. Jennings
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41,500
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41,500
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H.E. Lentz, Jr.
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51,500
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51,500
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Randy L. Limbacher
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39,500
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39,500
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William C. Morris
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56,500
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56,500
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Robert S. Rubin
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49,500
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49,500
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(1)
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Messrs. Jennings and Limbacher elected to defer all, and
Messrs. Cooke and Deaton deferred a portion, of their cash
fees under the Director Deferred Fee Plan (described below),
resulting in the crediting of an aggregate of 3,255 shares
of Common Stock, collectively, to bookkeeping accounts in fiscal
year 2009. Of the total shares credited in fiscal year 2009,
Messrs. Cooke, Deaton, Jennings, and Limbacher were
credited 416, 690, 1,111, and 1,038 shares of Common Stock,
respectively. As of December 31, 2009,
Messrs. Jennings and Limbacher had 2,045, and
1,972 shares of Common Stock in total credited to each of
their accounts, respectively. Upon Dr. Cookes
retirement from the Board in May 2009 and Mr. Deatons
resignation from the Board in September 2009, they were each
issued shares of Common Stock in exchange for their account
balances in the Director Deferred Fee Plan.
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(2)
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Amount shown does not reflect compensation actually received by
Directors. Rather, amounts set forth in the Stock Awards column
represent the aggregate grant date fair value of awards computed
in accordance with FASB ASC Topic 718 for financial statement
reporting purposes in fiscal year 2009 by the Company with
respect to restricted stock awards. A discussion of the
assumptions used in this valuation with respect to restricted
stock awards made in fiscal year 2009 may be found in
Note 9 to the Companys financial statements contained
in the Companys Annual Report on
Form 10-K
for 2009. Dividends are paid on shares of restricted stock at
the same rate, and at the same time, that dividends are paid to
stockholders of the Company.
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(3)
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Each non-employee Director other than Messrs. Cornelius,
Jennings and Limbacher received a grant of 2,000 shares of
restricted stock in April 2006. Mr. Cornelius received a
grant of 2,000 shares of restricted stock in November 2009
upon his becoming a non-employee Director. Additionally,
Messrs. Jennings and Limbacher each received a similar
grant of 2,000 shares of restricted stock in July 2007 upon
joining the Board of Directors. These awards vest ratably over a
period of three years from their date of grant, but will vest
immediately upon termination of service on the Board as a result
of death, disability or retirement at age 62 or older. As
of December 31, 2009, Messrs. Cornelius, Limbacher and
Jennings held 2,000, 667 and 667 shares of restricted
Common Stock respectively.
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(4)
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Dr. Cooke retired as a Director in May 2009.
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(5)
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Mr. Deaton resigned as a Director in September 2009.
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11
Directors who are not employees of the Company are paid
retainers of $6,250 per calendar quarter plus $1,500 per meeting
for attending meetings of the Board of Directors. Directors are
also paid $1,000 for each Committee meeting that does not
immediately precede or follow a meeting of the Board of
Directors. In addition to their compensation as Directors, the
Chairmen of the Audit and Compensation Committees each receive
$10,000 annually as compensation for their service as Chairmen
of these Committees. The Chairman of the Nominating and
Corporate Governance Committee does not currently receive a
separate payment for service as Chairman of this Committee. In
addition to his compensation as a Director, the Chairman of the
Board of Directors receives $20,000 annually as compensation for
his service as Chairman of the Board. All Directors are
reimbursed for
out-of-pocket
expenses incurred by them in attending meetings of the Board of
Directors and its Committees and otherwise in performing their
duties. All retainers are paid quarterly and all meeting
attendance payments are made at the end of each quarter in which
the meeting(s) took place. Additionally, payments of annual
compensation amounts are paid quarterly in equal installments.
Each newly elected or appointed non-employee Director receives a
grant of 2,000 shares of restricted stock on the first day
he or she is elected or appointed as a non-employee Director.
Generally, one-third of the shares of such restricted stock
vests on each anniversary of the grant date provided the grantee
is still serving as a Director on each such anniversary. In the
event the Directors service with the Company terminates
prior to the applicable vesting date, other than as a result of
such Directors death, disability, or retirement at
age 62 or older, all restricted shares are immediately
forfeited. However, if the Directors service is terminated
due to his or her death, disability or retirement, then such
unvested shares immediately vest. The terms of the grants also
provide for accelerated vesting upon a change in control of the
Company. For more information regarding such accelerated
vesting, see Potential Termination and Change in Control
Payments below.
Under the terms of the Director Deferred Fee Plan (as amended,
the Deferral Plan), Directors are permitted to defer
their annual cash compensation otherwise payable in a given
fiscal year and to receive such fees instead in the form of
shares of the Companys Common Stock on the later of a date
certain chosen by the Director or the cessation of the
Directors service on the Board, either in a lump sum or in
installment payments. The Deferral Plan requires each Director
who wishes to defer compensation for any fiscal year to have
notified the Company in writing no later than 10 calendar days
before the beginning of such fiscal year. In January 2010, the
Deferral Plan was discontinued and account balances will be
distributed no later than January 2011 in accordance with the
terms of the Deferral Plan.
Each non-employee Director is required to hold 2,000 shares
of Company stock (including shares of restricted stock) so long
as he or she is a member of the Board of Directors. Each
non-employee Director currently meets this requirement.
COMPENSATION
OF EXECUTIVE OFFICERS
Compensation
Discussion and Analysis
Compensation Policy.
The goal of the
Companys compensation policy is to ensure that executive
compensation aligns managements overall goals and
objectives for improving profitability and enhancing stockholder
value with those of stockholders. To achieve this goal, the
Compensation Committee has adopted the following guidelines to
direct compensation decisions:
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provide a competitive compensation package that enables the
Company to attract and retain superior management personnel;
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relate compensation to the performance of the Company and the
individual; and
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align employee objectives with the objectives of stockholders by
encouraging executive stock ownership.
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12
Elements of Compensation.
In order to achieve
its objectives, the Committee has combined current and deferred
cash compensation with equity-based compensation. The
Companys compensation program for executive officers
consists of:
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base salary;
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performance-based bonuses based upon individual performance and
the Companys annual net income before tax under incentive
compensation plans or individual employment agreements;
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restricted stock grants;
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performance-based cash awards; and
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matching and discretionary contributions under the
Companys Savings and Profit Sharing Plan.
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In recent years, 100% of each executive officers long term
incentive award was granted in the form of restricted stock. In
2009, approximately 75% of each executive officers long
term incentive award was made in the form of restricted stock,
with 25% of such award being provided in the form of
performance-based cash awards. The Committee made this change in
order to increase the correlation between Company performance
and executive compensation.
Base Salary.
Officer base salary levels are
reviewed annually to determine whether they are near the median
range for persons holding similar positions with companies that
are of a similar size and nature and companies that are included
in the S&P Small Cap 600 Index, Oil and Gas Equipment and
Services
sub-industry
group. Annually, the officers of the Company collect and collate
for the Compensation Committees review, publicly available
information about the compensation of comparable executives of
the Companys peer group companies, as well as information
regarding compensation from any third party sources which they
determine to be relevant, such as Stone Partners, Inc. or other
similar sources. The Compensation Committee is provided with
this data and has the authority to engage directly any
consultants that the Committee deems necessary in the course of
determining executive compensation.
For purposes of setting 2009 compensation, the peer group
companies submitted to the Committee by the Companys
officers included Allis-Chalmers Energy Inc., Basic Energy
Services, Inc., Cal-Dive International, Inc., Complete
Production Services, Inc., Core Laboratories N.V., Drill-Quip,
Inc., Hornbeck Offshore Services, Inc., ION Geophysical
Corporation, Lufkin Industries, Inc., Newpark Resources, Inc.,
RPC, Inc., Superior Energy Services Inc., Superior Well
Services, Inc., TESCO Corporation,, and Unit Corporation
(Similar Companies). Many of the Companys
direct competitors cannot be included in such comparisons as
they are private
and/or
foreign entities and, as such, relevant compensation data may
not be readily available to the public. The Compensation
Committee reviews spreadsheets with respect to the Chief
Executive Officer, the Chief Financial Officer and other
executive officers that compare their base salaries to those of
executives in similar positions at the Similar Companies and
with various compensation survey sources (collectively,
Market Data). The spreadsheets are prepared for the
Compensation Committee and show the Companys position with
respect to market capitalization, revenue, net income and
compensation.
The Compensation Committee typically targets base salaries for
the Companys executive officers at the
50th percentile of base salary ranges of the Market Data in
order to stay competitive with its market peers. Individual
salaries are then set based on individual performance in the
most recently completed twelve months, subject, for
Mr. Kolstad, to the base salary requirements set forth in
his employment agreement. For 2009, Mr. Kolstads base
salary was $500,000 pursuant to the terms of his employment
agreement. To further emphasize the correlation between Company
performance and executive pay, the Compensation Committee
typically uses the 50th to 75th percentile range of
the total equity and cash compensation as reflected by Market
Data to set the range of total compensation for its executive
officers. Individual performance is rated annually against the
achievement of performance objectives specific to the
individuals roles and responsibilities. The executive
officers are evaluated by the Nominating and Corporate
Governance Committee, which then communicates their evaluation
results to the Compensation Committee to use in setting the
following years compensation.
Annual Bonuses.
Since its inception, the
Company has sought to have a significant portion of key employee
compensation be performance-based. In order to achieve this
objective, the Company established its first incentive
13
compensation plan in 1987. For 2009, the Compensation Committee
approved the CARBO Ceramics Inc. Incentive Compensation Plan for
Key Employees (the 2009 ICP).
The 2009 ICP provides for cash incentive payments to key
employees (including Messrs. Bautista, Edmunds, Gallagher
and Elliott) based on components of both Company and individual
performance as described in Compensation of Executive
Officers. Mr. Vitek did not participate in or receive
any amounts under the 2009 ICP due to his retirement from the
Company in January 2009. For 2009, the majority of cash
incentive payments earned by Messrs. Bautista, Edmunds,
Gallagher and Elliott were based on Company or Company business
unit performance, with no more than 20% of any such incentive
payment based on individual performance. The Company further
believes that its net income before taxes (NIBT)
overall Company and business unit targets under the 2009 ICP
were appropriate aggressive benchmarks for performance. The
Companys actual 2009 NIBT of $79.8 million was
approximately 13% less than the target NIBT under the 2009 ICP
of $91.5 million, with the actual NIBT for the
Companys proppant business unit being approximately 8%
less than the 2009 target NIBT of $89.7 million for that
business unit. The Companys NIBT for 2009 is equal to
income before income taxes as reported on its consolidated
statement of income.
For 2009, the bonuses for each of Messrs. Bautista,
Edmunds, Gallagher and Elliott were established pursuant to the
2009 ICP with target incentive percentages of 90%, 85%, 85% and
60% of base salary, respectively. Of these targets, (i) 90%
of Mr. Bautistas target award was based on Company
performance and 10% was based on personal performance,
(ii) 85% of Mr. Edmunds target award was based
on Company and the Companys proppant business unit
performance and 15% was based on personal performance, and
(iii) 80% of each of Mr. Gallaghers and
Mr. Elliotts target award was based on Company
performance and 20% was based on personal performance. Personal
performance of executive officers is assessed by the
Compensation Committee on an annual basis.
Mr. Kolstads annual cash bonus is determined in
accordance with his employment agreement, rather than the 2009
ICP. Mr. Kolstads bonus is equal to the sum of
(i) 0.5% of the Companys earnings before interest
income and expense and taxes (EBIT) for such fiscal
year up to $75,000,000 of EBIT, plus (ii) 1.0% of EBIT in
excess of $75,000,000. The Compensation Committee determined
that with respect to the Chief Executive Officer, 100% of his
bonus should be determined by Company performance, and EBIT was
determined to be the appropriate performance measure because it
closely aligns the performance of the Chief Executive Officer
with stockholder goals and interests.
On January 18, 2010, the Committee approved the CARBO
Ceramics Inc. Annual Incentive Arrangement (the
AIA). Beginning in 2010 each officer of the Company,
other than Mr. Kolstad, will have their bonus opportunity
under the AIA established by the Committee as a percentage of
EBIT for the applicable annual period, subject to a
pre-determined dollar cap. An executive officers personal
performance will not be a separate performance metric under the
AIA.
Restricted Stock.
The Company strongly
believes that the interests of stockholders and executives
become more closely aligned when executives are provided with an
opportunity to acquire an equity interest in the Company through
ownership of the Companys Common Stock. Accordingly, in
2004, the Company established the CARBO Ceramics Inc. Long-Term
Incentive Plan (the Restricted Stock Plan). See
Employment Agreements and Other Plans
Restricted Stock Plan below. When the Restricted Stock
Plan expired in April 2009, it was replaced by the CARBO
Ceramics Inc. Omnibus Incentive Plan (the Omnibus
Plan). See Employment Agreements and Other
Plans Omnibus Plan below.
Individual restricted stock grants are determined based on
individual and Company performance. In recognition of their
responsibility for the Companys financial performance, a
portion of compensation is given in the form of equity to senior
management. Annual equity grants are traditionally given at the
first Board of Directors meeting held shortly after the year-end
close of the Companys books.
In addition, executive officers generally are required to hold
their restricted shares for an additional two years after the
initial three-year vesting period.
Performance-Based Cash Awards.
In 2009, the
Committee granted performance-based cash awards to named
executive officers (other than Mr. Vitek) under the terms
of the Omnibus Plan. Awards granted in 2009 are subject to a
performance period beginning on January 1, 2009 and ending
on December 31, 2011. Earnings before
14
interest income and expense, taxes, depreciation and
amortization (EBITDA) for the performance period was
established as the benchmark for performance under the awards. A
cumulative EBITDA target for the performance period was
established at $316,225,000, representing a 5% growth from the
cumulative EBITDA of the Company for the three years immediately
prior to the current performance period. The Compensation
Committee viewed this growth percentage as an appropriate and
aggressive goal, especially given industry conditions at the
time the awards were made. Payment under the 2009
performance-based cash awards, if any, will be paid at the end
of the performance period based upon the Companys actual
cumulative EBITDA during such period. If actual cumulative
EBITDA is at least $301,167,000, which is the minimum level of
achievement required before any payments are made, the payment
will be 25% of the targeted award amount. If actual cumulative
EBITDA is $316,225,000, the payment will be 100% of the targeted
award amount. If actual cumulative EBITDA is $331,284,000 or
more, the payment will be 150% of the targeted award amount. In
no event will any payments made under the performance-based cash
awards be greater than 150% of the targeted award amount. If the
amount of actual cumulative EBITDA achieved during the
performance period is between any two of the amounts mentioned
above, the percentage of the target award paid will be
calculated using straight-line interpolation between the
applicable EBITDA levels and corresponding payout percentages.
For more information regarding the potential payouts to named
executive officers under the 2009 grants of performance based
cash awards, see Grants of Plan-Based Awards in Fiscal
Year 2009 below.
By reference to Market Data, for the executive officers, grants
of restricted stock and performance-based cash awards are
designed to target the 50th to 75th percentile range
with respect to the mix of equity and cash compensation.
Termination and Change in
Control.
Mr. Kolstads employment
agreement provides for certain payments to be made in the event
of his termination of employment both before and following a
change in control. These provisions were part of the employment
agreement negotiated with Mr. Kolstad in connection with
his joining the Company. The Company believes that having these
provisions in the employment agreement enables Mr. Kolstad
to focus solely on the performance of his job by providing him
with security in the event of certain terminations of employment
or change in control.
As is typical of many companies, the restricted stock issued by
the Company vests immediately upon a change in control of the
Company. Additionally, the performance-based cash awards made
under the Omnibus Plan in 2009 vest upon a change of control
based on the number of days elapsed under the applicable
performance period. These vesting provisions are designed to
preserve employee productivity during the potentially disruptive
time prior to a change in control by assuring them of their
opportunity to realize the value of their stock and
performance-based cash awards.
Retirement.
The Company does not provide
retirement benefits to its executive officers other than
pursuant to its tax-qualified Savings and Profit Sharing Plans
available to all employees. It does provide that restricted
stock awards will vest upon Retirement, which is
defined as a participants voluntary termination of
employment at or after age 62 (unless otherwise defined in
the award agreement). Performance-based cash awards made under
the Omnibus Plan vest immediately upon Retirement, but the
payment of the award, if any, is delayed until after the
performance period is completed so that the applicable amount
can be determined.
Perquisites.
The Companys named
executive officers are primarily compensated with cash and
incentive awards and not perquisites. Perquisites provided to
our named executive officers are usually limited to items such
as reimbursement for club dues and education expenses. In 2009,
the Company decided to move and consolidate its headquarters
office and other personnel in one location in Houston, Texas.
Among other reasons, this decision was made to increase the
efficiency of the Companys overall operations and to place
the Companys headquarters in closer proximity to several
of its customers. The Company has a relocation policy that
provides assistance to all officer and non-officer employees who
move to Houston, which includes shipment of household goods, an
incentive to complete a timely sale of an employees home,
reimbursement of costs associated with the sale and purchase of
homes, reimbursement for temporary living arrangements and a
miscellaneous expense allowance. In addition, if an employee is
not able to timely sell his or her home, the Company provides
him or her with an offer to purchase it at the employees
original purchase price. For more information concerning the
relocation assistance provided to Messrs. Edmunds, Elliott
and Kolstad in 2009, see Summary Compensation Table
below. These perquisites were
15
provided to Messrs. Edmunds, Elliott and Kolstad
specifically in connection with the Companys relocation in
2009 and the Company will not provide these perquisites to them
on an on-going basis.
Internal Revenue Code
Section 162(m).
Internal Revenue Code
Section 162(m), and the regulations thereunder, place a
limit of $1,000,000 on the amount of compensation that may be
deducted by the Company in any year with respect to certain of
the Companys most highly compensated officers. The limit
imposed by Section 162(m) does not however, apply to
deductions for qualified performance-based
compensation, the material terms of which are disclosed to
and approved by stockholders. The Companys policy is to
carefully monitor the potential impact of Section 162(m) on
the tax deductibility of executive compensation, and to pay
executive compensation that may not be deductible if it believes
it is necessary and appropriate in light of the Companys
compensation objectives and in the interests of the Company and
its stockholders.
Summary
Compensation Table
The following table sets forth information concerning
(i) annual compensation paid during fiscal years ended
December 31, 2007, 2008 and 2009 to the Companys
Chief Executive Officer and those individuals who served as
Chief Financial Officer during 2009, and (ii) annual
compensation during such periods for the Companys three
most highly compensated executive officers, other than the Chief
Executive Officer and Chief Financial Officer, who were serving
as executive officers as of December 31, 2009.
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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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Name and Principal
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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
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Position
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Year
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($)
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($)
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($)(2)
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($)
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($)
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($)
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($)
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($)
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Gary A. Kolstad,
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2009
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500,000
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418,430
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675,028
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222,580
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(3)
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1,816,038
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President and Chief
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2008
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500,000
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596,877
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179,600
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16,788
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1,293,265
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Executive Officer
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2007
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300,000
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434,810
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154,784
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16,336
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905,930
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Paul G. Vitek,
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2009
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32,858
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236,820
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(4)
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269,678
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Former Senior Vice
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2008
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214,167
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338,741
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110,095
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16,788
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679,791
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President Finance &
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2007
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196,250
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150,079
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103,190
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14,899
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464,418
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Administration, Chief
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Financial Officer and Treasurer
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Ernesto Bautista, III
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2009
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267,038
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201,241
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240,131
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16,718
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(5)
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725,128
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Vice President and Chief
Financial Officer(1)
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Mark L. Edmunds,
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2009
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224,250
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166,107
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188,987
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125,472
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(6)
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704,816
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Vice President of Operations
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2008
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203,500
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280,899
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110,095
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16,788
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611,282
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2007
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191,250
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133,719
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103,190
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15,153
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443,312
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David G. Gallagher,
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2009
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234,250
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162,317
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198,795
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34,840
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(5)
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630,202
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Vice President of Marketing
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2008
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213,383
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302,249
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70,044
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32,402
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618,078
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and Sales
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2007
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149,390
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109,928
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477,800
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82,068
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819,186
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R. Sean Elliott,
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2009
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212,750
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105,336
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112,446
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102,024
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(7)
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532,556
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General Counsel, Corporate
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2008
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189,250
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188,606
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29,993
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16,788
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424,637
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Secretary and Chief
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Compliance Officer
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(1)
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Mr. Bautista joined the Company in January 2009 as Vice
President and Chief Financial Officer.
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(2)
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Amounts shown do not reflect compensation actually received by
the named executive officer. Rather, amounts set forth in the
Stock Awards column represents the aggregate grant date fair
value of awards computed in accordance with FASB ASC Topic 718
(formerly FAS 123(R)) for financial statement reporting
purposes in fiscal year 2009 by the Company with respect to
restricted stock awards. A discussion of the assumptions used in
this valuation with respect to awards made in fiscal year
2009 may be found in Note 9 to the Companys
financial statements contained in the Companys Annual
Report on
Form 10-K
for 2009. A discussion of the assumptions used in this valuation
with respect to awards made in fiscal years prior to fiscal year
2009 may be found in the corresponding sections of the
Companys financial statements and accompanying footnotes
for the
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16
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fiscal year in which the award was made. Dividends are paid on
shares of restricted stock at the same rate, and at the same
time, that dividends are paid to stockholders of the Company.
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(3)
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The amount disclosed for Mr. Kolstad includes
(i) contributions under the Companys Savings and
Profit Sharing Plan of $16,718 (ii) reimbursement of club
dues and (iii) relocation assistance in connection with the
Companys move of its headquarters to Houston in the amount
of $191,100.
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(4)
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Mr. Vitek retired as an executive officer of the Company in
January 2009. After and separate from this retirement,
Mr. Vitek was engaged to provide consulting services for
the Company, and to act as a financial advisor in connection
with an acquisition that the Company completed in October 2009.
The amount disclosed for Mr. Vitek includes Company
contributions under the Companys Savings Plan of $9,220,
$27,600 of consulting fees and financial advisory fees of
$200,000 in connection with the completion of the acquisition.
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(5)
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The amounts disclosed for Mr. Bautista and
Mr. Gallagher each include Company contributions under the
Companys Savings and Profit Sharing Plan of $16,718. In
addition, the amount disclosed for Mr. Gallagher includes
reimbursement of club membership dues and the payment of
educational expenses.
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(6)
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The amount disclosed for Mr. Edmunds includes contributions
under the Companys Savings and Profit Sharing Plan of
$16,718 and relocation assistance in connection with the
Companys move of its headquarters to Houston in the amount
of $108,754. The relocation assistance includes, among other
items, tax reimbursements of $11,563 relating to relocation
expenses incurred by Mr. Edmunds.
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(7)
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The amount disclosed for Mr. Elliott includes contributions
under the Companys Savings and Profit Sharing Plan of
$16,718 and relocation assistance in connection with the
Companys move of its headquarters to Houston in the amount
of $85,306.
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Grants of
Plan-Based Awards in Fiscal Year 2009
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All
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All
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Other
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Other
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Grant
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Stock
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Option
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Date
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Awards:
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Awards:
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Fair
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Estimated Future Payouts
|
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Estimated Future Payouts
|
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Number of
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Number of
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Exercise
|
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Value of
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Under Non-Equity Incentive
|
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Under Equity Incentive Plan
|
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Shares of
|
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Securities
|
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Price of
|
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Stock and
|
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Plan Awards(1)
|
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Awards
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Stock or
|
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Underlying
|
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Option
|
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Option
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Threshold
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Target
|
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Maximum
|
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Threshold
|
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Target
|
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Maximum
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Units
|
|
Options
|
|
Awards
|
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Awards
|
Name
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Grant Date
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($)
|
|
($)
|
|
($)
|
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(#)
|
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(#)
|
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(#)
|
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(#)
|
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(#)
|
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($/Sh)
|
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($)(2)
|
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Gary A. Kolstad
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$
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56,250
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$
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225,000
|
|
|
$
|
337,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President and Chief
|
|
|
1/19/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,270
|
|
|
|
|
|
|
|
|
|
|
|
675,028
|
|
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul G. Vitek
Former Senior Vice President Finance & Administration,
Chief Financial Officer and Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ernesto Bautista, III,
|
|
|
|
|
|
$
|
17,500
|
|
|
$
|
70,000
|
|
|
$
|
105,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice President and
|
|
|
1/19/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,855
|
|
|
|
|
|
|
|
|
|
|
|
240,131
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark L. Edmunds
|
|
|
|
|
|
$
|
15,750
|
|
|
$
|
63,000
|
|
|
$
|
94,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice President of
|
|
|
1/19/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,395
|
|
|
|
|
|
|
|
|
|
|
|
188,987
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David G. Gallagher
|
|
|
|
|
|
$
|
16,563
|
|
|
$
|
66,250
|
|
|
$
|
99,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice President of
|
|
|
1/19/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,675
|
|
|
|
|
|
|
|
|
|
|
|
198,795
|
|
Marketing and Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Sean Elliott
|
|
|
|
|
|
$
|
9,375
|
|
|
$
|
37,500
|
|
|
$
|
56,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Counsel,
|
|
|
1/19/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,210
|
|
|
|
|
|
|
|
|
|
|
|
112,446
|
|
Corporate Secretary and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Compliance Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amounts represent potential amounts payable related to the
performance-based cash awards issued in 2009 pursuant to the
Omnibus Plan.
|
17
|
|
|
(2)
|
|
Amounts shown do not reflect compensation actually received by
the named executive officer. Rather, amounts set forth in the
stock award column represent the grant date fair value of awards
computed in accordance with FASB ASC Topic 718 for financial
statement reporting purposes in fiscal year 2009 by the Company
with respect to restricted stock awards.
|
Employment
Agreements and Other Plans
Kolstad Employment Agreement.
The Company
entered into an employment agreement with Gary A. Kolstad, dated
May 10, 2006, which was amended and restated as of
October 31, 2008, pursuant to which Mr. Kolstad is
employed as President and Chief Executive Officer of the
Company. The agreement currently runs through December 31,
2010, with automatic extensions for successive one-year periods
unless written notice of an election not to extend is given by
either party, or unless the Company or Mr. Kolstad
terminates his employment earlier. Mr. Kolstads
agreement was automatically extended for 2010. From June 1,
2006 until December 31, 2007, Mr. Kolstad received an
annual base salary of $300,000. Based on a variety of factors,
including the base salary range for Chief Executive Officers of
the Similar Companies, effective January 1, 2008,
Mr. Kolstads annual base salary was increased to
$500,000, and effective January 1, 2010, was increased to
$600,000. The employment agreement gives the Company the right
to increase Mr. Kolstads annual base salary, but does
not expressly permit for it to be decreased. Mr. Kolstad is
eligible to receive an incentive bonus for each fiscal year
equal to the sum of (i) 0.5% of the Companys EBIT for
such fiscal year up to $75,000,000 of EBIT, plus (ii) 1.0%
of EBIT in excess of $75,000,000. Mr. Kolstad is entitled
to four weeks of paid vacation per year, subject to the
Companys applicable policies. Mr. Kolstad shall be
reimbursed for all reasonable, ordinary and necessary expenses
incurred in the performance of his duties, provided he accounts
to the Company for such expenses. Mr. Kolstad shall also be
entitled to such benefits and perquisites as are generally made
available to senior executive officers of the Company except
that he shall not be eligible to participate in the
Companys annual incentive compensation plans. For more
information regarding Mr. Kolstads employment
agreement, see Potential Termination and Change in Control
Payments below.
Restricted Stock Plan.
The Restricted Stock
Plan expired in April 2009; however, awards granted prior to its
expiration remain outstanding. Shares of restricted stock
granted pursuant to the Companys Restricted Stock Plan are
subject to transfer restrictions and forfeiture during the
three-year period following the date of grant. Generally,
one-third of the shares subject to each award will vest
(
i.e.
, will no longer be subject to transfer restrictions
or forfeiture) on the first, second and third anniversaries of
the date of grant. Generally, awards that have not vested will
be forfeited upon any termination of employment other than
termination due to death, disability or retirement in which case
the awards will immediately vest. To encourage officers to
retain their ownership of the Companys stock, the
Compensation Committee generally provided that officers
restricted shares would continue to be subject to transfer
restrictions for an additional two-year period, except that if
an officers employment terminates prior to the end of such
two-year period, the shares will cease to be subject to transfer
restrictions at the time of termination. All shares of
restricted stock will vest upon a change in control of the
Company. Dividends are paid currently with respect to shares of
restricted stock granted pursuant to the Restricted Stock Plan.
For more information regarding the Restricted Stock Plan, see
Potential Termination and Change in Control Payments
below.
Omnibus Plan.
On May 19, 2009, the
Companys stockholders approved the Omnibus Plan. The
Omnibus Plan is available to directors and key employees
(including officers of the Company, whether or not they are
members of the Board of Directors) of the Company and its
affiliates who have made or who the Compensation Committee of
the Board of Directors believes will make substantial
contributions to the management, growth and protection of the
Companys business. The Omnibus Plan allows the Company to
grant restricted stock and other long term incentives to
executive officers and key employees of the Company, including
awards that are performance-based, in an effort to align the
elements of compensation with the compensation policy of the
Company. In 2009, the Committee made cash-based performance
awards to named executive officers under the Omnibus Plan. For
more information, see Compensation Discussion and
Analysis Performance-Based Cash Awards above,
and Potential Termination and Change in Control
Payments below.
Incentive Compensation Plan.
For each plan
year, target incentive payments (stated as a percentage of base
salary) are determined for each plan participant. In addition, a
target is established annually for the Companys financial
performance. For 2009, the Company established a NIBT goal to
measure financial performance.
18
Payments to plan participants are calculated based on a formula
that takes into consideration both the individuals
performance and the Companys actual performance relative
to the NIBT target under the 2009 ICP. For executive officers,
the weighting between the two factors is determined by the
Compensation Committee and is based primarily upon the
participants position in the Company. With respect to
Company performance under the 2009 ICP, the percentage of
incentive payment target earned runs from 0% (if actual NIBT is
less than 75% of target NIBT) to 200% (if actual NIBT is 140% or
more above target NIBT). Individual performance is rated on a
scale of 1 to 5. If a plan participants performance
appraisal rating is less than 3, then the participant is not
eligible to receive any payment regardless of company
performance. Between a performance appraisal rating of 3 and 5,
the percentage of incentive payment target earned runs from 80%
to 120%. Alternatively, individual performance may be based on
revenue generation, NIBT or other measures approved by the
Compensation Committee. In order for individual performance
awards to be earned under this alternative, performance must
meet or exceed a minimum of 75% of the applicable goal or 75% of
the corresponding prior periods actual performance result.
The portion of the bonus determined by individual performance is
paid regardless of the level of NIBT achieved by the Company.
The 2009 ICP allows the Compensation Committee to interpret the
plan, and to adopt rules and regulations that are necessary or
advisable for the proper administration of the plan. During
2009, the Compensation Committee did not take any action that
resulted in an award of compensation absent the attainment of
the relevant performance goal or reduce or increase the size of
any award or payout under the 2009 ICP.
The following table sets forth information regarding outstanding
equity awards held by the Companys named executive
officers as of December 31, 2009.
Outstanding
Equity Awards at End of Fiscal Year 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Awards:
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Market or
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
Payout
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
Market
|
|
Number of
|
|
Value
|
|
|
Number of
|
|
Number of
|
|
Number of
|
|
|
|
|
|
Number of
|
|
Value of
|
|
Unearned
|
|
of Unearned
|
|
|
Securities
|
|
Securities
|
|
Securities
|
|
|
|
|
|
Shares or
|
|
Shares or
|
|
Shares Units
|
|
Shares, Units
|
|
|
Underlying
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
Units of
|
|
Units of
|
|
or Other
|
|
or Other
|
|
|
Unexercised
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
|
|
Stock That
|
|
Stock That
|
|
Rights That
|
|
Rights That
|
|
|
Options
|
|
Options
|
|
Unearned
|
|
Exercise
|
|
Option
|
|
Have Not
|
|
Have Not
|
|
Have Not
|
|
Have Not
|
|
|
(#)
|
|
(#)
|
|
Options
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
Vested
|
|
Vested
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
(#)
|
|
($)
|
|
Date
|
|
(#)(1)
|
|
($)(2)
|
|
(#)
|
|
($)
|
|
Gary A. Kolstad,
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,046
|
|
|
|
1,639,216
|
|
|
|
|
|
|
|
|
|
Paul G. Vitek,
Former Senior Vice President Finance and Administration, Chief
Financial Officer and Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ernesto Bautista, III
Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,855
|
|
|
|
467,305
|
|
|
|
|
|
|
|
|
|
Mark L. Edmunds,
Vice President of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,401
|
|
|
|
572,696
|
|
|
|
|
|
|
|
|
|
David G. Gallagher,
Vice President of Marketing and Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,309
|
|
|
|
702,765
|
|
|
|
|
|
|
|
|
|
R. Sean Elliott,
General Counsel, Corporate Secretary and Chief Compliance Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,101
|
|
|
|
279,565
|
|
|
|
|
|
|
|
|
|
19
|
|
|
(1)
|
|
Pursuant to the Restricted Stock Plan, one-third of the shares
subject to award vest on each of the first three anniversaries
of the grant date. For Mr. Kolstad, 1,667 shares
vested on January 15, 2010, 1,442 shares vested on
January 16, 2010, 6,423 shares vested on
January 19, 2010, 1,667 shares will vest on
January 15, 2011, 6,423 shares will vest on
January 19, 2011 and 6,424 shares will vest on
January 19, 2012. For Mr. Bautista, 2,285 shares
vested on January 19, 2010, 2,285 shares will vest on
January 19, 2011 and 2,285 shares will vest on
January 19, 2012. For Mr. Edmunds, 1,022 shares
vested on January 15, 2010, 962 shares vested on
January 16, 2010, 1,798 shares vested on
January 19, 2010, 1,022 shares will vest on
January 15, 2011, 1,798 shares will vest on
January 19, 2011 and 1,799 shares will vest on
January 19, 2012. For Mr. Gallagher, 650 shares
vested on January 15, 2010, 1,891 shares vested on
January 19, 2010, 3,334 shares will vest on
April 17, 2010, 650 shares will vest on
January 15, 2011, 1,892 shares will vest on
January 19, 2011 and 1,892 shares will vest on
January 19, 2012. For Mr. Elliott, 278 shares
vested on January 15, 2010, 1,070 shares vested on
January 19, 2010, 334 shares will vest on
November 21, 2010, 279 shares will vest on
January 15, 2011, 1,070 shares will vest on
January 19, 2011, and 1,070 shares will vest on
January 19, 2012.
|
|
(2)
|
|
Market Value is computed by multiplying the closing market price
of the Companys stock at the end of fiscal year 2009 of
$68.17 by the number of shares subject to the award.
|
The following table sets forth information regarding equity
awards held by the Companys named executive officers that
were exercised or that vested during fiscal year 2009.
Option
Exercises and Stock Vested in Fiscal Year 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of
|
|
|
|
Number of
|
|
|
|
|
Shares
|
|
Value
|
|
Shares
|
|
Value
|
|
|
Acquired
|
|
Realized
|
|
Acquired
|
|
Realized
|
|
|
on Exercise
|
|
on Exercise
|
|
on Vesting
|
|
on Vesting
|
Name
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
|
Gary A. Kolstad,
|
|
|
|
|
|
|
|
|
|
|
9,774
|
|
|
|
371,697
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul G. Vitek,
|
|
|
6,000
|
|
|
|
97,995
|
|
|
|
2,532
|
|
|
|
89,217
|
|
Former Senior Vice President Finance & Administration,
Chief Financial Officer and Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ernesto Bautista, III
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark L. Edmunds,
|
|
|
|
|
|
|
|
|
|
|
2,532
|
|
|
|
89,217
|
|
Vice President of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David G. Gallagher,
|
|
|
|
|
|
|
|
|
|
|
3,983
|
|
|
|
131,845
|
|
Vice President of Marketing and Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Sean Elliott,
|
|
|
|
|
|
|
|
|
|
|
611
|
|
|
|
29,544
|
|
General Counsel, Corporate Secretary and Chief Compliance
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
EQUITY
COMPENSATION PLAN INFORMATION
The following table sets forth certain information regarding the
Companys equity compensation plans as of December 31,
2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C.
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
A.
|
|
|
|
|
|
Remaining Available
|
|
|
|
Number of
|
|
|
|
|
|
for Future Issuance
|
|
|
|
Securities to be
|
|
|
B.
|
|
|
Under Equity
|
|
|
|
Issued Upon
|
|
|
Weighted-Average
|
|
|
Compensation Plans
|
|
|
|
Exercise of
|
|
|
Exercise Price of
|
|
|
(Excluding
|
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
Securities
|
|
|
|
Options, Warrants
|
|
|
Options, Warrants
|
|
|
Reflected in Column
|
|
Plan Category
|
|
and Rights
|
|
|
and Rights
|
|
|
(A))
|
|
|
Equity compensation plans approved by security holders
|
|
|
13,425
|
|
|
$
|
28.59
|
|
|
|
728,681(2)
|
|
Equity compensation plans not approved by security holders(1)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
Total(1)
|
|
|
13,425
|
|
|
$
|
28.59
|
|
|
|
728,681(2)
|
|
|
|
|
(1)
|
|
In December 2005, the Board of Directors adopted the CARBO
Ceramics Inc. Director Deferred Fee Plan (the Deferral
Plan). Pursuant to the Deferral Plan, Directors of the
Company are permitted to defer their annual cash compensation
for Board of Directors service that is otherwise payable in a
given fiscal year and receive such fees in shares of the
Companys Common Stock upon their retirement from the Board
of Directors, or such later date as the Director may specify. As
fees are earned, shares of Common Stock are credited to
bookkeeping accounts for future issuance. No set amount of
shares is authorized for issuance under the terms of the
Deferral Plan. As of December 31, 2009, the outstanding
balance for all bookkeeping accounts under the Deferral Plan was
4,017 shares. The Deferral Plan was discontinued in January
2010.
|
|
(2)
|
|
Represents shares available for issuance under the Omnibus Plan
as of December 31, 2009.
|
POTENTIAL
TERMINATION AND CHANGE IN CONTROL PAYMENTS
The following tables set forth the estimated value of payments
and benefits that the Companys named executive officers
would be entitled to receive assuming certain terminations of
employment
and/or
assuming a change in control of the Company, in each case
occurring on December 31, 2009 and using the closing market
price of the Common Stock at the end of fiscal year 2009 of
$68.17. Mr. Vitek did not receive any such payments upon
retiring in January 2009, as he had not obtained the required
retirement age of 62.
Gary
A. Kolstad
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash-Out Value of
|
|
Cash-Out Value of
|
|
|
|
|
Equity-Based Awards
|
|
Cash-Based Awards
|
|
|
|
|
that Vest as
|
|
that Vest as
|
|
|
|
|
a Result of a
|
|
a Result of a
|
|
Value of Salary
|
Triggering Event
|
|
Triggering Event ($)
|
|
Triggering Event ($)
|
|
Continuation ($)
|
|
Termination of Employment Prior to a Change In Control without
Cause
|
|
|
|
|
|
|
418,430
|
|
|
|
1,000,000
|
|
After a Change In Control without Cause or for Good Reason
|
|
|
1,639,216
|
|
|
|
596,877
|
|
|
|
1,000,000
|
|
Retirement
|
|
|
1,639,216
|
|
|
|
(1
|
)
|
|
|
|
|
Disability
|
|
|
1,639,216
|
|
|
|
643,430
|
|
|
|
|
|
Death
|
|
|
1,639,216
|
|
|
|
643,430
|
|
|
|
|
|
Voluntary Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Control
|
|
|
1,639,216
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
(1)
|
|
Performance-based award vests, but amount of payment is not
determined until end of applicable performance period.
|
21
Ernesto
Bautista, III
|
|
|
|
|
|
|
|
|
|
|
Cash-Out Value of
|
|
Cash-Out Value of
|
|
|
Equity-Based Awards
|
|
Cash-Based Awards
|
|
|
that Vest as
|
|
that Vest as
|
|
|
a Result of a
|
|
a Result of a
|
Triggering Event
|
|
Triggering Event ($)
|
|
Triggering Event ($)
|
|
Termination of Employment
|
|
|
|
|
|
|
|
|
Without Cause
|
|
|
|
|
|
|
|
|
For Cause
|
|
|
|
|
|
|
|
|
Retirement
|
|
|
467,305
|
|
|
|
(1
|
)
|
Disability
|
|
|
467,305
|
|
|
|
70,000
|
|
Death
|
|
|
467,305
|
|
|
|
70,000
|
|
Voluntary Termination
|
|
|
|
|
|
|
|
|
Change in Control
|
|
|
467,305
|
|
|
|
23,333
|
|
|
|
|
(1)
|
|
Performance-based award vests, but amount of payment is not
determined until end of applicable performance period.
|
Mark
L. Edmunds
|
|
|
|
|
|
|
|
|
|
|
Cash-Out Value of
|
|
Cash-Out Value of
|
|
|
Equity-Based Awards
|
|
Cash-Based Awards
|
|
|
that Vest as
|
|
that Vest as
|
|
|
a Result of a
|
|
a Result of a
|
Triggering Event
|
|
Triggering Event ($)
|
|
Triggering Event ($)
|
|
Termination of Employment
|
|
|
|
|
|
|
|
|
Without Cause
|
|
|
|
|
|
|
|
|
For Cause
|
|
|
|
|
|
|
|
|
Retirement
|
|
|
572,696
|
|
|
|
(1
|
)
|
Disability
|
|
|
572,696
|
|
|
|
63,000
|
|
Death
|
|
|
572,696
|
|
|
|
63,000
|
|
Voluntary Termination
|
|
|
|
|
|
|
|
|
Change in Control
|
|
|
572,696
|
|
|
|
22,000
|
|
|
|
|
(1)
|
|
Performance-based award vests, but amount of payment is not
determined until end of applicable performance period.
|
22
David
G. Gallagher
|
|
|
|
|
|
|
|
|
|
|
Cash-Out Value of
|
|
Cash-Out Value of
|
|
|
Equity-Based Awards
|
|
Cash-Based Awards
|
|
|
that Vest as
|
|
that Vest as
|
|
|
a Result of a
|
|
a Result of a
|
Triggering Event
|
|
Triggering Event ($)
|
|
Triggering Event ($)
|
|
Termination of Employment
|
|
|
|
|
|
|
|
|
Without Cause
|
|
|
|
|
|
|
|
|
For Cause
|
|
|
|
|
|
|
|
|
Retirement
|
|
|
702,765
|
|
|
|
(1
|
)
|
Disability
|
|
|
702,765
|
|
|
|
66,250
|
|
Death
|
|
|
702,765
|
|
|
|
66,250
|
|
Voluntary Termination
|
|
|
|
|
|
|
|
|
Change in Control
|
|
|
702,765
|
|
|
|
22,083
|
|
|
|
|
(1)
|
|
Performance-based award vests, but amount of payment is not
determined until end of applicable performance period.
|
R.
Sean Elliott
|
|
|
|
|
|
|
|
|
|
|
Cash-Out Value of
|
|
Cash-Out Value of
|
|
|
Equity-Based Awards
|
|
Cash-Based Awards
|
|
|
that Vest as
|
|
that Vest as
|
|
|
a Result of a
|
|
a Result of a
|
Triggering Event
|
|
Triggering Event ($)
|
|
Triggering Event ($)
|
|
Termination of Employment
|
|
|
|
|
|
|
|
|
Without Cause
|
|
|
|
|
|
|
|
|
For Cause
|
|
|
|
|
|
|
|
|
Retirement
|
|
|
279,565
|
|
|
|
(1
|
)
|
Disability
|
|
|
279,565
|
|
|
|
37,500
|
|
Death
|
|
|
279,565
|
|
|
|
37,500
|
|
Voluntary Termination
|
|
|
|
|
|
|
|
|
Change in Control
|
|
|
279,565
|
|
|
|
12,500
|
|
|
|
|
(1)
|
|
Performance-based award vests, but amount of payment is not
determined until end of applicable performance period.
|
Kolstad Employment Agreement.
In the event
that Mr. Kolstads employment is terminated due to
disability or death, Mr. Kolstad, or his estate, shall be
entitled to receive (i) all earned but unpaid base salary,
(ii) payment for all earned but unused vacation time, and
(iii) reimbursement for business expenses incurred prior to
the date of termination (together, the Accrued
Obligations). He, or his estate, shall also receive a
pro-rated bonus based on the bonus he would have received for
the year in which his employment terminated had his employment
continued. If the Company terminates Mr. Kolstads
employment for Cause, he shall only be entitled to receive the
Accrued Obligations. In the event the Company terminates
Mr. Kolstads employment without Cause, he shall be
entitled to receive (i) the Accrued Obligations,
(ii) a pro-rated bonus based on the bonus he would have
received for the year in which his employment terminated had his
employment continued and (iii) contingent upon his
execution of a general release of claims against the Company, an
amount equal to two times his base salary. The Accrued
Obligations, pro-rated bonus and a portion of the base salary
payment would be paid in a lump sum, and the remaining portion
of the base salary payment would be paid over an 18 month
period. Notwithstanding the foregoing, in the event
Mr. Kolstads employment is terminated by the Company
without Cause or by him for Good Reason, and in either case,
during the one-year period following a change in control of the
Company, he shall be entitled to receive (i) the Accrued
Obligations, (ii) a pro-rated bonus based on the bonus he
received in the year prior to his termination of employment and
(iii) an amount equal to two times his base salary. In this
instance, the Accrued
23
Obligations and a portion of the bonus and base salary payment
would be paid in a lump sum, with the remaining portion of the
bonus and base salary payment to be paid over an 18 month
period.
In Mr. Kolstads employment agreement,
Cause is defined as (i) any material violation
by Mr. Kolstad of the agreement; (ii) any failure by
Mr. Kolstad to substantially perform his duties thereunder;
(iii) any act or omission involving dishonesty, fraud,
willful misconduct or gross negligence on the part of
Mr. Kolstad that is or may be materially injurious to the
Company; and (iv) commission of any felony or other crime
involving moral turpitude.
Good Reason is defined as, without
Mr. Kolstads express written consent, the occurrence
of any one or more of the following: (i) the assignment of
Mr. Kolstad to duties materially inconsistent with his
authorities, duties, responsibilities and status (including
offices, titles and reporting requirements) as an officer of the
Company, or a reduction or alteration in the nature or status of
his authorities, duties or responsibilities from those in effect
immediately prior to a change in control, including a failure to
reelect him to, or a removal of him from, any office of the
Company that he held immediately prior to a change in control;
or (ii) the Companys requiring Mr. Kolstad to be
based at a location more than 50 miles from Houston, Texas,
except for required travel on the Companys business to an
extent substantially consistent with his business obligations
immediately prior to a change in control; or (iii) the
Company materially breaches the agreement or any other written
agreement with Mr. Kolstad; or (iv) a material
reduction in his level of participation in any of the
Companys welfare benefit, retirement or other employee
benefit plans, policies, practices or arrangements in which he
participates as of the date of the change in control. The
Company is entitled to written notice and a 30 day cure
period for any event that may constitute Good Reason.
Mr. Kolstad is subject to a covenant not to compete for a
period of two years following the termination of his employment
with the Company. He is also subject to standard covenants not
to solicit employees and not to solicit clients for a period of
one year following a termination.
Restricted Stock Plan.
All named executive
officers (other than Mr. Vitek) were participants in the
Restricted Stock Plan and had unvested awards of restricted
shares pursuant to this plan as of December 31, 2009. The
Restricted Stock Plan provides that upon a termination of
employment or service, other than due to death, disability or
retirement, a participant forfeits any unvested shares of
restricted stock. If the participants employment or
service terminates due to death, disability or retirement, all
unvested shares shall immediately vest. Retirement
is defined as a participants voluntary termination of
employment or service on the Board of Directors (with the
approval of the Board of Directors) at or after age 62
(unless otherwise defined in the award agreement). None of the
named executive officers is currently eligible for retirement.
The Restricted Stock Plan provides that unvested awards shall
immediately vest upon a change in control.
Omnibus Plan.
All named executive officers
(other than Mr. Vitek) are participants in the Omnibus Plan
and had unvested performance-based cash awards pursuant to this
plan as of December 31, 2009. Each award agreement under
the Omnibus Plan specifies the consequences with respect to such
award upon any termination of employment. For the
performance-based cash awards made in 2009, the applicable award
agreements specify that the awards shall vest at the targeted
award amount upon any death or disability. Additionally, the
award agreement specifies that awards shall vest upon retirement
at or after age 62, but the amount of payment (if any)
shall not be determined until the end of the applicable
performance period. None of the named executive officers is
currently eligible for retirement. Pursuant to the terms of the
Omnibus Plan, the performance-based cash awards immediately vest
upon a change of control, at the targeted award amount, with
actual payment to be prorated for the number of days elapsed in
the performance period prior to the change of control.
CARBO Ceramics Inc. 2009 Incentive Compensation Plan for Key
Employees.
The 2009 ICP was adopted effective
January 1, 2009, and sets forth the terms and conditions of
the incentive payments for Messrs. Bautista, Edmunds,
Gallagher and Elliott for the 2009 fiscal year. The 2009 ICP
does not have any provisions for accelerated vesting upon
termination of employment (regardless of the reason) or upon a
change of control of the Company.
24
REPORT OF
THE COMPENSATION COMMITTEE
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis required by the Securities
Exchange Act of 1934, as amended (the Exchange Act)
with management and, based on the Compensation Committees
review and discussions with management, the Compensation
Committee recommended to the Board that the Compensation
Discussion and Analysis be included in this proxy statement.
The report of the Compensation Committee is not
solicitation material and shall not be deemed
incorporated by reference by any general statement incorporating
by reference this proxy statement into any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except
to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed
filed under such acts.
CARBO Ceramics Inc. Compensation Committee
H.E. Lentz, Jr., Chairman
Sigmund L. Cornelius
James B. Jennings
Randy L. Limbacher
William C. Morris
Robert S. Rubin
March 16, 2010
SECTION 16(a)
BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Companys directors, executive
officers and persons who are beneficial owners of more than 10%
of the Common Stock to file with the SEC initial reports of
ownership and reports of changes in ownership of shares of
Common Stock beneficially owned by them. Directors, executive
officers and beneficial owners of more than 10% of the Common
Stock are also required to furnish the Company with copies of
all Section 16(a) reports that they file with the SEC.
To the Companys knowledge, no director, executive officer
or other greater than 10% beneficial owner of the Common Stock
failed to timely file with the SEC one or more required reports
on Form 3, 4 or 5, during 2009.
25
REPORT OF
THE AUDIT COMMITTEE
The Audit Committee met nine times during 2009. The Audit
Committee reviewed with management and the independent
registered public accounting firm the interim financial
information included in the March 31, June 30 and
September 30, 2009 Quarterly Reports on
Form 10-Q
prior to their filing with the SEC. In addition, the Audit
Committee reviewed all earnings releases with management and the
Companys independent registered public accounting firm
prior to their release.
Consistent with the applicable requirements of the Public
Company Accounting Oversight Board, the Companys
independent registered public accounting firm provided the Audit
Committee a written statement describing all the relationships
between it and the Company that might bear on its independence.
The Audit Committee also discussed and reviewed with the
Companys independent registered public accounting firm all
communications required by generally accepted auditing
standards, including those described in Statement on Auditing
Standards No. 114 (The Auditors Communication with
Those Charged with Governance), which supersedes Statement on
Auditing Standards No. 61.
The Audit Committee oversees the Companys financial
reporting process on behalf of the Board of Directors.
Management has the primary responsibility for the financial
statements and the reporting process including the systems of
internal controls. In fulfilling its oversight responsibilities,
the Audit Committee reviews and discusses with management the
audited financial statements in the Companys Annual Report
on
Form 10-K,
including a discussion of the acceptability and quality of the
accounting principles, the reasonableness of significant
judgments and the clarity of disclosures in the financial
statements.
The Audit Committee reviewed with the Companys independent
registered public accounting firm, which is responsible for
expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting
principles, their judgments as to the acceptability and quality
of the Companys accounting principles and such other
matters appropriate for discussion with the Audit Committee
under generally accepted auditing standards. In addition, the
Audit Committee has discussed with the independent registered
public accounting firm its independence from management and the
Company and considered the compatibility of non-audit services
with its independence.
The Audit Committee discussed with the Companys
independent registered public accounting firm the overall scope
and plans for its audit. The Audit Committee meets with the
independent registered public accounting firm, with and without
management present, to discuss the results of its examinations,
its evaluations of the Companys internal controls and the
overall quality of the Companys financial reporting.
In reliance on the reviews and discussions referred to above,
the Audit Committee recommended to the Board of Directors that
the audited financial statements be included in the Annual
Report on
Form 10-K
for the fiscal year ended December 31, 2009, for filing
with the SEC. The Audit Committee also approved, subject to
stockholders ratification, the selection of the
Companys independent registered public accounting firm.
This report of the Audit Committee is not solicitation
material and shall not be deemed incorporated by reference
by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended,
except to the extent that the Company specifically incorporates
this information by reference, and shall not otherwise be deemed
filed under such acts.
CARBO Ceramics Inc. Audit Committee
Robert S. Rubin, Chairman
Sigmund L. Cornelius
James B. Jennings
H. E. Lentz, Jr.
Randy L. Limbacher
March 15, 2010
26
RATIFICATION
OF APPOINTMENT OF THE COMPANYS INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM (PROPOSAL NO. 2)
Subject to ratification by the stockholders, the Audit Committee
of the Board of Directors intends to reappoint Ernst &
Young as the Companys independent registered public
accounting firm to audit the financial statements of the Company
for 2010. Ernst & Young has acted as the
Companys independent registered public accounting firm
since its formation in 1987. Representatives of the firm of
Ernst & Young are expected to be present at the Annual
Meeting and will have an opportunity to make a statement if they
so desire and will be available to respond to appropriate
questions.
Audit Fees.
Ernst & Youngs
fees for the Companys annual audit and review of interim
financial statements were $644,206 in 2009, $745,462 in 2008 and
$624,206 in 2007.
Audit-Related Fees.
Ernst &
Youngs fees for audit-related services were $28,000 in
2009, $35,749 in 2008 and $33,388 in 2007. Audit-related
services for 2009, 2008 and 2007 primarily include fees for
employee benefit plan audits.
Tax Fees.
Ernst & Youngs fees
for tax services were $178,020 in 2009, $144,135 in 2008 and
$134,663 in 2007. Tax services primarily involve assistance with
tax return compliance and consultations regarding foreign tax
jurisdictions.
All Other Fees.
Ernst & Youngs
fees for all other products and services were $3,618 in 2009,
$6,924 in 2008 and $2,592 in 2007. These other products and
services include various training and consultation services.
Under the Audit Committees Pre-Approval Procedures for
Audit and permitted Non-Audit Services, the Chairman of the
Audit Committee is allowed to pre-approve audit and non-audit
services if such services will commence prior to the next
regularly scheduled meeting of the Audit Committee and where the
cost of such services in the aggregate will not exceed $50,000.
The Audit Committee is then informed of such pre-approval at its
next meeting. For 2009, there were no non-audit related services
approved in this manner.
The Audit Committee and the Board of Directors recommend the
stockholders vote FOR such ratification.
OTHER
MATTERS
The Board of Directors knows of no other matters to be brought
before the Annual Meeting. However, if other matters should
properly come before the Annual Meeting, it is the intention of
each of the persons named in the proxy to vote in accordance
with his judgment on such matters.
27
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY. We encourage you to take advantage of Internet or
telephone voting. Both are available 24 hours a day, 7 days a week. Internet and telephone voting
is available through 11:59 PM Eastern Time the day prior to the annual meeting date. INTERNET
http://www.proxyvoting.com/crr CARBO CERAMICS INC. Use the Internet to vote your proxy. Have your
proxy card in hand when you access the web site. OR TELEPHONE 1-866-540-5760 Use any touch-tone
telephone to vote your proxy. Have your proxy card in hand when you call. If you vote your proxy by
Internet or by telephone, you do NOT need to mail back your proxy card. To vote by mail, mark, sign
and date your proxy card and return it in the enclosed postage-paid envelope. Your Internet or
telephone vote authorizes the named proxies to vote your shares in the same manner as if you
marked, signed and returned your proxy card. 69120-bl FOLD AND DETACH HERE THIS PROXY WILL BE VOTED
AS DIRECTED, OR IF NO DIRECTIONS Please mark your votes as ARE INDICATED, WILL BE VOTED FOR THE
NOMINEES AND PROPOSAL. indicated in this example X FOR WITHHOLD *EXCEPTIONS ALL FOR ALL FOR AGAINST
ABSTAIN 1. To elect seven Directors. The Board of Directors 2. Proposal to ratify the appointment
of Ernst & Young LLP, recommends a vote FOR the nominees listed below. certified public
accountants, as the Companys independent registered public accounting firm for the fiscal year
ending Nominees: December 31, 2010. 01 Sigmund L. Cornelius 05 Randy L. Limbacher 02 James B.
Jennings 06 William C. Morris 3. In their discretion, to vote upon such other business as may
properly come before the 03 Gary A. Kolstad 07 Robert S. Rubin meeting. 04 H. E. Lentz, Jr. The
Board of Directors recommends that you vote FOR the nominees and proposal listed (INSTRUCTIONS: To
withhold authority to vote for any individual nominee, mark the above. This proxy when properly
executed will be voted in the manner directed herein by Exceptions box above and write that
nominees name in the space provided below.) the undersigned shareholder. If no direction is given,
this proxy will be voted FOR the nominees and proposal. *Exceptions Mark Here for Address Change or
Comments SEE REVERSE Signature Signature Date NOTE: Please sign as name appears hereon. Joint
owners should each sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
|
Important notice regarding the Internet availability of proxy materials for the Annual Meeting
of Shareholders. The Proxy Statement and the 2009 Annual Report to Shareholders are available at:
http://www.carboannualmeeting.com FOLD AND DETACH HERE PROXY THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF CARBO CERAMICS INC. The undersigned hereby appoints Gary A. Kolstad, R.
Sean Elliott, Ernesto Bautista, III, or any one of them, as proxies, each with the power to appoint
his substitute, and hereby authorizes each of them to represent and to vote, as designated on the
reverse side, all the shares of Common Stock of CARBO Ceramics Inc., held of record by the
undersigned on March 22, 2010, at the Annual Meeting of Shareholders to be held on May 18, 2010, or
any adjournment or continuation thereof. Address Change/Comments (Mark the corresponding box on the
reverse side) BNY MELLON SHAREOWNER SERVICES P.O. BOX 3550 SOUTH HACKENSACK, NJ 07606-9250
(Continued and to be marked, dated and signed, on the other side) 69120-bl
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