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:
TABLE OF CONTENTS
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 17, 2011,
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
2012 Annual Meeting of Stockholders.
2. To ratify the appointment of Ernst & Young LLP
as the Companys independent registered public accounting
firm.
3. To hold a non-binding advisory vote on the compensation
of the named executive officers.
4. To hold a non-binding advisory vote on the frequency of
future advisory votes on the compensation of the named executive
officers.
5. To transact such other business as may properly be
brought before the meeting.
Stockholders of record at the close of business on
March 21, 2011 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 of Stockholders 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 of
Stockholders. This list of stockholders will also be available
for inspection at the Annual Meeting of Stockholders and may be
inspected by any stockholder for any purpose germane to the
Annual Meeting of Stockholders.
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 of Stockholders 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, 2011
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
MAY 17, 2011: The Proxy Statement and Annual Report to
Stockholders are available at
www.carboannualmeeting.com
.
CARBO
CERAMICS INC.
575 N. Dairy Ashford,
Suite 300
Houston, Texas 77079
PROXY
STATEMENT
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 17, 2011, 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 Phoenix Advisory Partners (Phoenix) to aid
in the solicitation of proxies. It is estimated that the cost of
Phoenixs 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 Phoenix
and the Company. These proxy solicitation materials are being
mailed on or about April 8, 2011 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 2012 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, 2011, 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 2012 Annual Meeting, the Secretary of the Company must
receive written notice on or after January 18, 2012, and on
or before February 17, 2012. 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 21, 2011 are entitled to notice of, and to vote at,
the Annual Meeting. At the record date, 23,161,193 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 (i) FOR
all Director nominees, (ii) FOR the ratification of the
appointment of Ernst & Young LLP
(Ernst & Young) as the Companys
independent registered public accounting firm, (iii) FOR
the advisory vote to approve the compensation of the named
executive officers, and (iv) for the advisory vote to
approve the compensation for the named executive officers to
occur every ONE YEAR.
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. With respect to
the advisory proposal regarding the compensation of the named
executive officers as disclosed in this proxy statement, the
proposal will be considered approved if it receives 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. With respect to the advisory vote regarding
the frequency of the stockholder vote to approve the
compensation of the named executive officers, the Company will
treat the selection of every one year, every two years, or every
three years that receives the greatest number of votes as the
option that is approved by its stockholders. Both advisory votes
are non-binding on the Company and the Board of Directors.
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 and
executive compensation and other non-routine matters 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 (Proposal 1), the advisory vote
regarding the compensation of named executive officers
(Proposal 3), and the advisory vote regarding the frequency
of the stockholder vote to approve the compensation of the named
executive officers (Proposal 4). 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 otherwise will
not affect the outcome of any matter being voted upon at the
Annual Meeting. Abstentions are treated as present and entitled
to vote and thus, will be counted in determining whether a
quorum is present. Abstentions will have the effect of a vote
cast against Proposal 2, but otherwise will not be counted
as a vote cast and will not have an effect on the outcome of
Proposals 1, 3 or 4.
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 use this process for
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
2
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.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists as of March 21, 2011, 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
23,161,193 shares of Common Stock outstanding on
March 21, 2011.
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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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3,214,450
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13.9
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%
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Neuberger Berman Group LLC(2)
605 Third Avenue
New York, NY 10158
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2,805,740
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12.1
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%
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Baron Capital Group, Inc.(3)
767 Fifth Avenue,
49
th
Floor
New York, NY 10153
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1,787,979
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7.7
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%
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BlackRock, Inc.(4)
40 East
52
nd
Street
New York, New York 10022
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1,569,441
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|
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6.8
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%
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T. Rowe Price Associates, Inc.(5)
100 E. Pratt Street
Baltimore, Maryland 21202
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1,279,299
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5.5
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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, 2010, Mr. Morris reported sole voting
power as to 3,199,450 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, 2010, Neuberger Berman Group LLC reported
shared voting power as to 2,491,490 shares of Common Stock,
and shared dispositive power as to 2,805,740 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, 2010, Baron Capital Group reported shared
voting power as to 1,633,056 shares of Common Stock and
shared dispositive power of 1,787,979 shares of Common
Stock with BAMCO Inc., Baron Capital Management, Inc. and Ronald
Baron.
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(4)
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Based on a Schedule 13G/A filing with the SEC, as of
December 31, 2010, BlackRock, Inc. reported sole voting and
dispositive power as to 1,569,441 shares of Common Stock.
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(5)
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Based on a Schedule 13G filing with the SEC, as of
December 31, 2010, these securities are owned by various
individual and institutional investors which T. Rowe Price
Associates, Inc. serves as an investment adviser with sole
voting power as to 350,524 shares of Common Stock and sole
dispositive power as to 1,279,299 shares of Common Stock;
however, T. Rowe Price Associates, Inc. expressly disclaims that
it is, in fact, the beneficial owner of such securities.
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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 21, 2011.
For purposes of this proxy statement, Gary A. Kolstad, Ernesto
Bautista, III, 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
23,161,193 shares of Common Stock outstanding on
March 21, 2011. 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 21, 2011.
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
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Owned
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Directors
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Sigmund L. Cornelius(1)
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2,200
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*
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James B. Jennings
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4,266
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*
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H. E. Lentz, Jr.
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8,200
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*
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Randy L. Limbacher
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4,192
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*
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Gary A. Kolstad(1)(2)
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84,131
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*
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William C. Morris(3)
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3,214,450
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13.9
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%
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Robert S. Rubin
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600,550
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2.6
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%
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Other Named Executive Officers
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Ernesto Bautista, III(1)
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14,303
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*
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Mark L. Edmunds(1)
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14,783
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*
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R. Sean Elliott(1)
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10,050
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*
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David G. Gallagher(1)(4)
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20,261
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*
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Directors and All Executive Officers as a Group
(11 persons)
(1)(2)(3)(4)
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3,977,386
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17.2
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%
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*
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Less than 1%.
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(1)
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|
Shares shown above for Messrs. Cornelius, Kolstad,
Bautista, Edmunds, Elliott and Gallagher include 1,334, 31,114,
8,473, 8,421, 5,996, and 8,657 shares of unvested
restricted stock, respectively, which the holder has sole voting
but no dispositive power.
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(2)
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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,
and 200 shares held by a limited liability company that is
controlled by Mr. Kolstad.
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(3)
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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)
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Shares shown as beneficially owned by Mr. Gallagher include
11,604 shares of Common Stock jointly held with his spouse,
with whom Mr. Gallagher shares voting and dispositive power.
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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
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Since
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William C. Morris(72)
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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
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Sigmund L. Cornelius(56)
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|
From October 2008 until December 2010, Mr. Cornelius 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 retired from ConocoPhillips in
December 2010 after 30 years of service with the company.
Mr. Cornelius was a Director of DCP Midstream GP, LLC from
November 2007 to October 2008 and currently serves as a Director
of USEC Inc. 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 former CFO 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
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James B. Jennings(70)
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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
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Name (Age)
|
|
Business Experience During Past 5 Years and Other
Information
|
|
Since
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Gary A. Kolstad(52)
|
|
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 U.S. Onshore business unit as Vice
President, Oilfield Services. 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 global operations
and strategic planning.
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2006
|
H. E. Lentz, Jr.(66)
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|
Mr. Lentz has been a Managing Director of Lazard Frères
& Co. (an investment banking firm) since June 2009.
Formerly, he served as 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(52)
|
|
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
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Robert S. Rubin(79)
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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
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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
independent within the meaning of the applicable rules of the
SEC and the listing standards of the NYSE:
William C. Morris
Sigmund L. Cornelius
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 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,
6
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 prior
employment as a Senior Vice President and Chief Financial
Officer of ConocoPhillips and ConocoPhillips status as a
customer of the Company and its subsidiaries and concluded that
such previous 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, 2010 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 seven 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, all Directors attended the 2010 Annual Meeting
and all are anticipated to attend the 2011 Annual Meeting 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 firm reports its findings and
assessments to the Audit Committee, which then reports the
findings to the Board as a whole.
7
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 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 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 four
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, 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 recommendations with
8
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
2010 Stone Partners, Inc. (Stone Partners) and
Cogent Compensation Partners (Cogent) provided
compensation consulting services in connection with the review
and summary of executive compensation. Cogent was engaged by the
Committee to replace Stone Partners; however neither Cogent nor
Stone Partners provided any other services to the Company in
2010. 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 two 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 officers 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, 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,
officers 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
reviews of potential
9
candidates. The Committee provides guidance to search firms it
retains about the particular qualifications the Board is then
seeking.
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 the Board of Directors
(including as part of the Boards annual self-evaluation),
the Chief Executive Officer and certain other officers 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 certain other officers, 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 2010.
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 2010. 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 2010
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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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($)
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($)(1)
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($)
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($)
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($)
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($)
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($)
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Sigmund L. Cornelius
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39,500
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13,304
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52,804
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James B. Jennings
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39,500
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13,304
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|
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|
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52,804
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H.E. Lentz, Jr.
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48,000
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13,304
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|
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61,304
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Randy L. Limbacher
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39,500
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13,304
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|
|
|
|
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|
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52,804
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William C. Morris
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55,500
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13,304
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|
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68,804
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Robert S. Rubin
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49,500
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13,304
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|
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|
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62,804
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(1)
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Amounts shown represent the value of the 200 shares of
stock granted to each director on May 19, 2010, the first
business day after last years Annual Meeting, computed by
multiplying the closing price of the Companys stock on the
date of grant by the number of shares subject to the grant.
|
Directors who are not employees of the Company are paid a
quarterly cash retainer. The amount of the quarterly retainer
has been increased to $10,000 beginning in April 2011. Prior to
this increase, the quarterly retainer amount was $6,250.
Non-employee directors are also paid $1,500 for attending each
meeting of the Board of Directors and $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. In
each case, one-third of the shares of such restricted stock
grant generally 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, subject to, in the
case of retirement, Board approval of such retirement. 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. Additionally, each non-employee
Director who is serving in such capacity on the first business
day after each Annual Meeting of Stockholders receives an annual
grant of Common Stock on such date (each, an Annual
Director Stock Grant). In 2010, each non-employee director
received 200 shares of Common Stock. Beginning with the
2011 Annual Director Stock Grant, the number of shares granted
will increase to 250 shares.
11
Each non-employee Director is required to hold a minimum amount
of shares of Common Stock (including shares of restricted stock)
equal to the sum of 2,000 shares plus the number of shares
received as Annual Director Stock Grants, 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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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 annual incentive payments based upon the
Companys annual earnings before interest and tax under
incentive compensation plans or individual employment agreements;
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restricted stock grants;
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long-term 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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To 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 various compensation survey
sources (Market Data) to set the range of total
compensation for its executive officers. Individual performance
is rated annually in light of objectives specific to the
executives roles and responsibilities. In determining
Mr. Kolstads 2010 compensation, the Committee
reviewed, among other factors, the financial results of the
Company and relative shareholder return, and
Mr. Kolstads ability to coordinate the efforts of the
other named executive officers in achieving strategic Company
objectives. Mr. Bautistas 2010 compensation was
reviewed in light of his responsibilities to plan and oversee
the financial affairs of the Company. The ability of the Company
to maintain production volumes at or near planned levels and to
implement the growth and expansion of new and existing
manufacturing facilities, including the progress towards the new
Line 3 production at its Georgia facility, are considerations
the Committee reviewed in determining the compensation of
Mr. Edmunds for 2010. Mr. Gallaghers 2010
compensation was assessed in light of his teams ability to
meet the demands of the Companys customers, introduce new
products into the marketplace, and assess and implement
expansion into current as well as future markets for the
Companys products. Mr. Elliotts 2010
compensation was established in connection with his duties to
oversee and manage the legal affairs of the Company, including
oversight with respect to compliance, litigation management and
integration of acquisitions of new businesses. Executive
officers are evaluated annually 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.
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, including
12
companies from the S&P Small Cap 600 Index, Oil and Gas
Equipment and Services
sub-industry
group. In 2010, the Compensation Committee reviewed 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, Cogent 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 2010 compensation, the peer group
companies submitted to the Committee by the Companys
officers included 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., 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 considers the Companys position with respect to
market capitalization, revenue, net income and compensation as
compared to the Similar Companies. The base salaries of the
Chief Executive Officer, the Chief Financial Officer and other
executive officers are compared to base salaries of executives
in similar positions at the Similar Companies and with the
Market Data. 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.
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
compensation plan in 1987. In 2010, the Compensation Committee,
pursuant to its authority to administer the CARBO Ceramics Inc.
Omnibus Incentive Plan (the Omnibus Plan), approved
the CARBO Ceramics Inc. Annual Incentive Arrangement (the
AIA). Under the AIA, an executive officers
individual performance is not a separate performance metric. The
Compensation Committee determined that 100% of an executive
officers bonus should be determined by Company
performance, and earnings before interest income and expense and
taxes (EBIT) was determined to be the appropriate
performance measure because it closely aligns the performance of
the executive officers with stockholder goals and interests.
Under the AIA, the Compensation Committee has granted
performance-based cash awards to each of the executive officers
other than Mr. Kolstad, whose bonus calculation is
determined under the terms of his employment agreement as
further described below. Such awards generally have a
performance period of one fiscal year of the Company and are
measured based on the Companys EBIT for such fiscal year.
Each award is determined as a percentage of EBIT and is subject
to a pre-determined dollar cap, which in no event can exceed the
dollar cap set under the Omnibus Plan.
For 2010, the cash incentive payments earned by
Messrs. Bautista, Edmunds, Gallagher and Elliott were based
on the AIA. The bonuses for each of Messrs. Bautista,
Edmunds, Gallagher and Elliott were established pursuant to the
AIA with target incentive percentages of .305%, .300%, .305% and
.215%, respectively, of 2010 EBIT. For 2010, the Companys
EBIT was approximately $119,171,000. While individual
performance is not a separate performance metric in determining
incentive payouts, target incentive percentages are established
at the beginning of each fiscal year based upon the executive
officers position within the Company as well as previous
fiscal years individual performance, taking into account
factors that include those described above under
-Elements of Compensation.
Mr. Kolstads annual cash bonus is determined in
accordance with his employment agreement, rather than the AIA.
Mr. Kolstads bonus is 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.
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
13
Plans Restricted Stock Plan below. When the
Restricted Stock Plan expired in April 2009, it was replaced by
the Omnibus Plan. See Employment Agreements and Other
Plans Omnibus Plan below.
In recognition of their responsibility for the Companys
financial performance, a portion of compensation is given in the
form of equity to management. Individual restricted stock grants
are determined based on individual and Company performance,
including the factors described above under
-Elements of Compensation. Annual equity
grants are traditionally given at the first Board of Directors
meeting held shortly after the year-end close of the
Companys books. Executive officers generally are required
to hold their restricted shares for an additional two years
after the initial three-year vesting period.
Long-Term Performance-Based Cash Awards.
Under
the terms of the Omnibus Plan, the Committee may grant
performance-based cash awards to named executive officers which
are paid depending upon achieving certain pre-determined
financial benchmarks measured over a specified performance
period. Payments under such grants, if any, are to be paid at
the end of the applicable performance period based upon the
Companys actual performance against the benchmark during
such period. No long-term performance-based cash awards were
granted in 2010 although the named executive officers hold
outstanding awards granted in 2009.
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) and is further subject to Board consent.
Awards granted under the Restricted Stock Plan vest immediately
upon Retirement. For awards granted under the Omnibus Plan, only
that portion of restricted stock scheduled to vest within one
year of Retirement vests on the scheduled vesting date. Awards
scheduled to vest later than one year after Retirement are
forfeited. 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 payment or reimbursement for club dues and fees and education
expenses. In connection with the Companys relocation of
its corporate headquarters to Houston in 2009,
Messrs. Edmunds, Elliott and Kolstad received relocation
assistance from the Company. These relocation benefits are not
being provided 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
14
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, 2008, 2009 and 2010 to the Companys
Chief Executive Officer and Chief Financial Officer, 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, 2010.
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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
|
|
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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($)
|
|
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($)
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|
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($)
|
|
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Gary A. Kolstad,
|
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2010
|
|
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600,000
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|
|
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816,710
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|
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1,000,008
|
|
|
|
|
|
|
|
|
|
|
|
|
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34,357
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(3)
|
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2,451,075
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President and Chief
|
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2009
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|
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500,000
|
|
|
|
418,430
|
|
|
|
675,028
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
222,580
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|
|
|
1,816,038
|
|
Executive Officer
|
|
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2008
|
|
|
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500,000
|
|
|
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596,877
|
|
|
|
179,600
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|
|
|
|
|
|
|
|
|
|
|
|
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|
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16,788
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|
|
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1,293,265
|
|
Ernesto Bautista, III
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2010
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272,500
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|
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363,472
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|
|
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260,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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18,517
|
(4)
|
|
|
914,553
|
|
Vice President and
|
|
|
2009
|
|
|
|
267,038
|
|
|
|
201,241
|
|
|
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240,131
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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16,718
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|
|
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725,128
|
|
Chief Financial Officer(1)
|
|
|
|
|
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|
|
|
|
|
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|
|
|
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Mark L. Edmunds,
|
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2010
|
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245,000
|
|
|
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357,513
|
|
|
|
275,200
|
|
|
|
|
|
|
|
|
|
|
|
|
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18,517
|
(4)
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896,230
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|
Vice President of Operations
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|
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2009
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|
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224,250
|
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|
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166,107
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|
|
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188,987
|
|
|
|
|
|
|
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|
|
|
|
|
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|
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125,472
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|
|
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704,816
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|
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|
|
2008
|
|
|
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203,500
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|
|
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280,899
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|
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110,095
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|
|
|
|
|
|
|
|
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|
|
|
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16,788
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|
|
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611,282
|
|
David G. Gallagher,
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2010
|
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258,750
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|
|
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363,472
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|
|
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284,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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18,232
|
(4)
|
|
|
925,286
|
|
Vice President of Marketing
|
|
|
2009
|
|
|
|
234,250
|
|
|
|
162,317
|
|
|
|
198,795
|
|
|
|
|
|
|
|
|
|
|
|
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34,840
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630,202
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|
and Sales
|
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2008
|
|
|
|
213,383
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|
302,249
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|
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|
70,044
|
|
|
|
|
|
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32,402
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|
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618,078
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|
R. Sean Elliott,
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2010
|
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231,250
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256,218
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175,096
|
|
|
|
|
|
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18,517
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(4)
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|
|
681,081
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|
General Counsel, Corporate
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|
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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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|
|
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102,024
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|
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532,556
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|
Secretary and Chief
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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
|
|
Compliance Officer
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(1)
|
|
Mr. Bautista joined the Company in January 2009 as Vice
President and Chief Financial Officer.
|
|
(2)
|
|
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 2010 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
2010 may be found in Note 9 to the Companys
financial statements contained in the Companys Annual
Report on
Form 10-K
for 2010. A discussion of the assumptions used in this valuation
with respect to awards made in fiscal years prior to fiscal year
2010 may be found in the corresponding sections of the
Companys financial statements and accompanying footnotes
for the 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.
|
|
(3)
|
|
The amount disclosed for Mr. Kolstad includes
(i) contributions under the Companys Savings and
Profit Sharing Plan of $18,517, (ii) final moving expenses
associated with the Companys headquarters relocation in
2009 of $10,504, and (iii) reimbursement of club dues.
|
|
(4)
|
|
The amounts disclosed for Messrs. Bautista, Edmunds,
Elliott and Gallagher in 2010 represent contributions under the
Companys Savings and Profit Sharing Plan.
|
15
Grants of
Plan-Based Awards in Fiscal Year 2010
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|
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|
|
|
All
|
|
All
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
Other
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Awards:
|
|
|
|
Fair
|
|
|
|
|
Estimated Future Payouts
|
|
Estimated Future Payouts
|
|
Number of
|
|
Number of
|
|
Exercise
|
|
Value of
|
|
|
|
|
Under Non-Equity Incentive
|
|
Under Equity Incentive Plan
|
|
Shares of
|
|
Securities
|
|
Price of
|
|
Stock and
|
|
|
|
|
Plan Awards
|
|
Awards
|
|
Stock or
|
|
Underlying
|
|
Option
|
|
Option
|
|
|
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Units
|
|
Options
|
|
Awards
|
|
Awards
|
Name
|
|
Grant Date
|
|
($)
|
|
($)
|
|
($)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
($/Sh)
|
|
($)(1)
|
|
Gary A. Kolstad
|
|
|
1/18/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,535
|
|
|
|
|
|
|
|
|
|
|
|
1,000,008
|
|
President and Chief
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ernesto Bautista, III,
|
|
|
1/18/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,780
|
|
|
|
|
|
|
|
|
|
|
|
260,064
|
|
Vice President and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark L. Edmunds
|
|
|
1/18/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
275,200
|
|
Vice President of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David G. Gallagher
|
|
|
1/18/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,140
|
|
|
|
|
|
|
|
|
|
|
|
284,832
|
|
Vice President of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing and Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Sean Elliott
|
|
|
1/18/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,545
|
|
|
|
|
|
|
|
|
|
|
|
175,096
|
|
General Counsel,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Secretary and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Compliance Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
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 (formerly
FAS 123(R)) for financial statement reporting purposes in
fiscal year 2010 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 and further amended on March 19,
2010, pursuant to which Mr. Kolstad is employed as
President and Chief Executive Officer of the Company. The 2010
amendment made certain administrative changes to
Mr. Kolstads employment agreement to reflect that the
Companys headquarters is now located in Houston. The
agreement currently runs through December 31, 2011, 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 2011. The Company annually reviews
Mr. Kolstads annual base salary based on a variety of
factors, including the base salary range for Chief Executive
Officers of the Similar Companies. Effective January 1,
2010, Mr. Kolstads annual base salary 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
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 and Omnibus Plan.
The
Restricted Stock Plan expired in April 2009 and was replaced
with the Omnibus Plan, which was approved by the Companys
stockholders at the 2009 Annual Meeting; however, awards granted
prior to its expiration remain outstanding. 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
16
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. Shares of restricted stock
granted pursuant to the Companys Restricted Stock Plan and
Omnibus 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 awards outstanding under the Restricted Stock Plan
will immediately vest. Under the Omnibus Plan, upon termination
of employment due to death, disability or Retirement, awards
scheduled to vest within one year following such termination
will vest on the scheduled vesting date and awards scheduled to
vest more than one year following termination will be forfeited.
To encourage officers to retain their ownership of the
Companys stock, the Compensation Committee generally
provides that officers restricted shares will 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 on shares
of restricted stock at the same rate, and at the same time, that
dividends are paid to stockholders of the Company. For more
information regarding the Restricted Stock Plan and Omnibus
Plan, see Potential Termination and Change in Control
Payments below. In 2010, no cash-based performance awards
were granted 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.
Annual Incentive Arrangement.
In 2010, the
Committee adopted the AIA, pursuant to its authority to
administer the Omnibus Plan, to grant performance-based cash
awards to each of the executive officers other than
Mr. Kolstad. The AIA presently is available to the
executive officers of the Company other than Mr. Kolstad,
whose bonus is determined in accordance with his employment
agreement. Each year target incentive payments (stated as a
percentage of EBIT) are determined for each executive officer
and are determined by the Compensation Committee based primarily
upon the factors described under Compensation Discussion
and Analysis Elements of Compensation above.
Such awards generally have a performance period of one fiscal
year of the Company and are measured based on the Companys
EBIT for such fiscal year. Each award is determined as a
percentage of EBIT and will be subject to a pre-determined
dollar cap, which in no event can exceed the dollar cap set
under the Omnibus Plan. An executive officers personal
performance is not a separate performance metric under the 2010
AIA. The Compensation Committee determined that 100% of an
executive officers incentive payment should be determined
by Company performance, and EBIT was determined to be the
appropriate performance measure because it closely aligns the
performance of the executive officers with stockholder goals and
interests.
The AIA 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
2010, 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 AIA.
17
The following table sets forth information regarding outstanding
equity awards held by the Companys named executive
officers as of December 31, 2010.
Outstanding
Equity Awards at End of Fiscal Year 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,049
|
|
|
|
3,007,733
|
|
|
|
|
|
|
|
|
|
Ernesto Bautista, III
Vice President and
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,350
|
|
|
|
864,559
|
|
|
|
|
|
|
|
|
|
Mark L. Edmunds,
Vice President of
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,619
|
|
|
|
892,411
|
|
|
|
|
|
|
|
|
|
David G. Gallagher,
Vice President of
Marketing and Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,574
|
|
|
|
887,752
|
|
|
|
|
|
|
|
|
|
R. Sean Elliott,
General Counsel,
Corporate Secretary
and Chief Compliance
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,964
|
|
|
|
513,973
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Pursuant to grants made under the Restricted Stock Plan and
Omnibus 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,
2011, 4,845 shares vested on January 18, 2011,
6,423 shares vested on January 19, 2011,
4,845 shares will vest on January 18, 2012,
6,424 shares will vest on January 19, 2012, and
4,845 shares will vest on January 18, 2013. For
Mr. Bautista, 1,260 shares vested on January 18,
2011, 2,285 shares vested on January 19, 2011,
1,260 shares will vest on January 18, 2012,
2,285 shares will vest on January 19, 2012 and
1,260 shares will vest on January 18, 2013. For
Mr. Edmunds, 1,022 shares vested on January 15,
2011, 1,333 shares vested on January 18, 2011,
1,798 shares vested on January 19, 2011,
1,333 shares will vest on January 18, 2012,
1,799 shares will vest on January 19, 2012 and
1,334 shares will vest on January 18, 2013. For
Mr. Gallagher, 650 shares vested on January 15,
2011, 1,380 shares vested on January 18, 2011,
1,892 shares vested on January 19, 2011,
1,380 shares will vest on January 18, 2012,
1,892 shares will vest on January 19, 2012 and
1,380 shares will vest on January 18, 2013. For
Mr. Elliott, 279 shares vested on January 15,
2011, 848 shares vested on January 18, 2011,
1,070 shares vested on January 19, 2011,
848 shares will vest on January 18, 2012,
1,070 shares will vest on January 19, 2012, and
849 shares will vest on January 18, 2013.
|
|
(2)
|
|
Market Value is computed by multiplying the closing market price
of the Companys stock at the end of fiscal year 2010 of
$103.54 by the number of shares subject to the award.
|
18
The following table sets forth information regarding equity
awards held by the Companys named executive officers that
were exercised or that vested during fiscal year 2010.
Option
Exercises and Stock Vested in Fiscal Year 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of
|
|
|
|
Number of
|
|
|
|
|
Shares
|
|
Value
|
|
Shares
|
|
Value
|
|
|
Acquired
|
|
Realized
|
|
Acquired
|
|
Realized
|
|
|
on Exercise
|
|
on Exercise
|
|
on Vesting
|
|
on Vesting
|
Name
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
|
Gary A. Kolstad,
|
|
|
|
|
|
|
|
|
|
|
9,532
|
|
|
|
658,114
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ernesto Bautista, III
|
|
|
|
|
|
|
|
|
|
|
2,285
|
|
|
|
158,031
|
|
Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark L. Edmunds,
|
|
|
|
|
|
|
|
|
|
|
3,782
|
|
|
|
260,849
|
|
Vice President of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David G. Gallagher,
|
|
|
|
|
|
|
|
|
|
|
5,875
|
|
|
|
417,383
|
|
Vice President of Marketing and Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Sean Elliott,
|
|
|
|
|
|
|
|
|
|
|
1,682
|
|
|
|
124,240
|
|
General Counsel, Corporate Secretary and Chief Compliance
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
COMPENSATION PLAN INFORMATION
The following table sets forth certain information regarding the
Companys equity compensation plans as of December 31,
2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
5,900
|
|
|
$
|
22.04
|
|
|
|
670,621(1)
|
|
Equity compensation plans not approved by security holders
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
Total
|
|
|
5,900
|
|
|
$
|
22.04
|
|
|
|
670,621(1)
|
|
|
|
|
(1)
|
|
Represents shares available for issuance under the Omnibus Plan
as of December 31, 2010.
|
19
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, 2010 and using the closing market
price of the Common Stock at the end of fiscal year 2010 of
$103.54.
Gary
A. Kolstad
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash-Out Value of
|
|
Cash-Out Value of
|
|
|
|
|
Equity-Based Awards
|
|
Cash-Based Awards
|
|
|
|
|
that Vest as
|
|
that Vest as
|
|
|
|
|
a Result of a
|
|
a Result of a
|
|
Value of Salary
|
Triggering Event
|
|
Triggering Event ($)
|
|
Triggering Event ($)
|
|
Continuation ($)
|
|
Termination of Employment Prior to a Change In Control without
Cause
|
|
|
|
|
|
|
816,710
|
|
|
|
1,200,000
|
|
After a Change In Control without Cause or for Good Reason
|
|
|
|
|
|
|
418,430
|
|
|
|
1,200,000
|
|
Retirement
|
|
|
2,004,431
|
|
|
|
(1
|
)
|
|
|
|
|
Disability
|
|
|
2,004,431
|
|
|
|
1,041,710
|
|
|
|
|
|
Death
|
|
|
2,004,431
|
|
|
|
1,041,710
|
|
|
|
|
|
Voluntary Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Control
|
|
|
3,007,733
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
(1)
|
|
Performance-based award granted in 2009 vests, but amount of
payment is not determined until end of applicable performance
period.
|
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
|
|
|
603,638
|
|
|
|
(1
|
)
|
Disability
|
|
|
603,638
|
|
|
|
70,000
|
|
Death
|
|
|
603,638
|
|
|
|
70,000
|
|
Voluntary Termination
|
|
|
|
|
|
|
|
|
Change in Control
|
|
|
864,559
|
|
|
|
46,667
|
|
|
|
|
(1)
|
|
Performance-based award granted in 2009 vests, but amount of
payment is not determined until end of applicable performance
period.
|
20
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
|
|
|
616,270
|
|
|
|
(1
|
)
|
Disability
|
|
|
616,270
|
|
|
|
63,000
|
|
Death
|
|
|
616,270
|
|
|
|
63,000
|
|
Voluntary Termination
|
|
|
|
|
|
|
|
|
Change in Control
|
|
|
892,411
|
|
|
|
42,000
|
|
|
|
|
(1)
|
|
Performance-based award granted in 2009 vests, but amount of
payment is not determined until end of applicable performance
period.
|
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
|
|
|
601,982
|
|
|
|
(1
|
)
|
Disability
|
|
|
601,982
|
|
|
|
66,250
|
|
Death
|
|
|
601,982
|
|
|
|
66,250
|
|
Voluntary Termination
|
|
|
|
|
|
|
|
|
Change in Control
|
|
|
887,752
|
|
|
|
44,167
|
|
|
|
|
(1)
|
|
Performance-based award granted in 2009 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
|
|
|
338,265
|
|
|
|
(1
|
)
|
Disability
|
|
|
338,265
|
|
|
|
37,500
|
|
Death
|
|
|
338,265
|
|
|
|
37,500
|
|
Voluntary Termination
|
|
|
|
|
|
|
|
|
Change in Control
|
|
|
513,973
|
|
|
|
25,000
|
|
21
|
|
|
(1)
|
|
Performance-based award granted in 2009 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 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 were participants in the Restricted Stock Plan prior to
its termination and continue to hold unvested awards of
restricted shares pursuant to that plan as of December 31,
2010. 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.
22
Omnibus Plan.
All named executive officers are
participants in the Omnibus Plan and continue to hold unvested
awards of restricted stock and unvested performance-based cash
awards pursuant to this plan as of December 31, 2010. 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
performance-based cash 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. The
applicable award agreements for the unvested awards of
restricted stock made in 2010 provide for the same treatment of
unvested shares upon a change in control as the Restricted Stock
Plan. Under the applicable award agreements, upon a termination
of employment due to death, disability or Retirement unvested
awards of restricted stock that otherwise would vest one year
following termination of employment vest on their scheduled date
and any unvested awards scheduled to vest more than one year
following the date of termination are forfeited.
Annual Incentive Arrangement.
The AIA was
adopted in January 2010, and sets forth the terms and conditions
of the incentive payments for Messrs. Bautista, Edmunds,
Gallagher and Elliott for the 2010 fiscal year. The AIA does not
have any provisions for accelerated vesting upon termination of
employment. Upon a change of control of the Company, AIA awards
do not automatically vest; however the Committee may consider
the effects of a change of control in determining whether or not
to accelerate the vesting of AIA awards.
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 (the Securities
Act), 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 22, 2011
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act 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 2010.
23
REPORT OF
THE AUDIT COMMITTEE
The Audit Committee met nine times during 2010. 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, 2010 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, 2010, 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 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. Audit Committee
Robert S. Rubin, Chairman
Sigmund L. Cornelius
James B. Jennings
H. E. Lentz, Jr.
Randy L. Limbacher
March 21, 2011
24
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 has reappointed Ernst &
Young as the Companys independent registered public
accounting firm to audit the financial statements of the Company
for 2011. 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 $570,335 in 2010, $644,206 in 2009,
and $745,462 in 2008.
Audit-Related Fees.
Ernst &
Youngs fees for audit-related services were $28,000 in
2010, $28,000 in 2009, and $35,749 in 2008. Audit-related
services for 2010, 2009, and 2008 primarily include fees for
employee benefit plan audits.
Tax Fees.
Ernst & Youngs fees
for tax services were $49,585 in 2010, $178,020 in 2009, and
$144,135 in 2008. 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 $0 in 2010, $3,618
in 2009, and $6,924 in 2008. 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 2010, 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.
APPROVAL
OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS
(PROPOSAL NO. 3)
Under the Dodd-Frank Wall Street Reform and Consumer Protection
Act enacted in July 2010 (the Dodd-Frank Act), the
stockholders of the Company are entitled to vote at the Annual
Meeting to approve the compensation of the Companys named
executive officers, as disclosed in this proxy statement
pursuant to Item 402 of
Regulation S-K
under the Exchange Act. Pursuant to the Dodd-Frank Act, the
stockholder vote on executive compensation is an advisory vote
only, and it is not binding on the Company or the Board.
As described more fully in the Compensation Discussion and
Analysis section of this proxy statement, the Companys
compensation policy is designed to attract and retain superior
management personnel and to ensure that executive compensation
aligns managements overall goals and objectives for
improving profitability and enhancing stockholder value with
those of stockholders. The program seeks to align executive
compensation with stockholder value on an annual and long-term
basis through a combination of base pay, annual incentives, and
long-term incentives. The annual component is performance-based
bonuses based entirely upon Company earnings before interest
income and expense and taxes. In addition, long-term incentive
awards are comprised of restricted stock and performance-based
cash awards. The Company also has programs in place to align
executive compensation with stockholder interests and mitigate
risks in its plans, such as stock retention guidelines and
limited perquisites.
25
The Board strongly endorses the Companys executive
compensation program and recommends that the stockholders vote
in favor of the following resolution:
RESOLVED, that the stockholders approve, on an advisory basis,
the compensation of the Companys named executive officers
as described in this proxy statement under Compensation of
Executive Officers, including the Compensation Discussion
and Analysis and the tabular and narrative disclosure contained
in this proxy statement.
The Board of Directors recommend that the stockholders vote
FOR the resolution above and approval of the
compensation of the named executive officers as disclosed in
this proxy statement.
FREQUENCY
OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
(PROPOSAL NO. 4)
Under the Dodd-Frank Act, the stockholders of the Company are
entitled to vote at the Annual Meeting regarding whether the
stockholder vote to approve the compensation of the named
executive officers as required by Section 14A(a)(2) of the
Exchange Act (and as described in Proposal No. 3 of
this proxy statement) should occur every one, two, or three
years. Under regulations issued by the SEC, stockholders shall
also have the option to abstain from voting on the matter.
Pursuant to the Dodd-Frank Act, the stockholder vote on the
frequency of the stockholder vote to approve executive
compensation is an advisory vote only, and it is not binding on
the Company or the Board of Directors.
Although the vote is non-binding, the Compensation Committee and
the Board of Directors value the opinions of the stockholders
and will consider the outcome of the vote when determining the
frequency of the stockholder vote on executive compensation.
The Board of Directors recommends that an advisory stockholder
vote on executive compensation be held annually. The
Boards recommendation is based upon the premise that the
compensation of the named executive officers is evaluated,
adjusted if needed, and approved by the Compensation Committee
on an annual basis.
The Board of Directors recommends that the stockholders vote
for ONE YEAR regarding the frequency of the
stockholder vote to approve the compensation of the named
executive officers.
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.
26
SET ON PN 100 & UP 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 are available through 11:59 PM Eastern Time the day prior to the
annual meeting date. INTERNET SET AS GRAPHIC WITH http://www.proxyvoting.com/crr SEARCHABLE TEXT
Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site. OR
CARBO CERAMICS INC. 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. 94734-1 FOLD AND DETACH HERE THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTIONS
ARE INDICATED, WILL BE Please mark your votes as indicated in this example X VOTED FOR THE
NOMINEES, FOR PROPOSALS 2 AND 3 AND 1 YEAR ON PROPOSAL 4. 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, 2011. 01 Sigmund L. Cornelius 05 Randy L. Limbacher FOR AGAINST
ABSTAIN 02 James B. Jennings 06 William C. Morris 03 Gary A. Kolstad 07 Robert S. Rubin 3. Proposal
to approve, by advisory vote, the compensation of 04 H. E. Lentz, Jr. the named executive officers.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the Exceptions box
above and write that nominees name in the space provided below.) 1 year 2 years 3 years Abstain
*Exceptions 4. Proposal to recommend, by advisory vote, the frequency of future advisory votes on
executive compensation.
_________________________________________________________________________________ 5. In their
discretion, to vote upon such other business as may properly come before the meeting. The Board of
Directors recommends that you vote FOR the nominees, FOR proposals 2 and 3 and 1 year on proposal
4 listed above. This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is given, this proxy will be voted FOR the nominees,
FOR proposals 2 and 3 and 1 year on proposal 4. Mark Here for Address Change or Comments SEE
REVERSE 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 BOD80962 such. 6
Signature Signature Date
|
Important notice regarding the Internet availability of proxy materials for the Annual Meeting
of Shareholders. The Proxy Statement and the 2010 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 21, 2011, at the Annual Meeting of Shareholders to be held on May 17, 2011, 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
|
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