x |
Preliminary
Proxy Statement
|
o |
Confidential,
Use of the
|
o |
Definitive
Proxy Statement
|
Commission
Only (as permitted by
|
|
o |
Definitive
Additional Materials
|
Rule
14a-6(e)(2)
|
|
o |
Soliciting
Material Pursuant to (§)240.14a-11(c) or (§)240.14a-12
|
RPC,
INC.
|
(Name
of Registrant as Specified In Its
Charter)
|
N/A
|
(Name
of Person(s) Filing Proxy Statement if other than the
Registrant)
|
x |
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:
|
1. |
To
elect three Class II directors to the Board of Directors;
|
2.
|
To
amend the Certificate of Incorporation of the Company to
increase the
number of authorized shares of capital stock to 160,000,000
shares;
|
3.
|
To
approve the performance-based incentive cash compensation plan for
the
executive officers; and
|
4. |
To
transact such other business as may properly come before the meeting
or
any adjournment thereof.
|
BY
ORDER OF THE BOARD OF DIRECTORS
|
|
Linda
H. Graham, Secretary
|
Name
and Address of Beneficial Owner
|
Amount
Beneficially Owned (1)
|
Percent
of Outstanding Shares
|
||
R.
Randall Rollins
Chairman
of the Board
2170
Piedmont Road, NE
Atlanta,
Georgia
|
39,779,983
(2)
|
60.8
|
||
Gary
W. Rollins
President
and Chief Executive Officer, Rollins, Inc.
2170
Piedmont Road, NE
Atlanta,
Georgia
|
40,297,125
(3)
|
61.6
|
||
Richard
A. Hubbell
President
and Chief Executive Officer
2170
Piedmont Road, NE
Atlanta,
Georgia
|
969,522
(4)
|
1.5
|
||
Linda
H. Graham
Vice
President and Secretary
2170
Piedmont Road, NE
Atlanta,
Georgia
|
231,309(5)
|
**
|
||
Ben
M. Palmer
Vice
President, Chief Financial Officer and Treasurer
2170
Piedmont Road, NE
Atlanta,
Georgia
|
237,043
(6)
|
**
|
||
All
Directors and Executive Officers as a group
(10
persons)
|
82,541,607
(7)
|
67.1
|
(1)
|
Except
as otherwise noted, the nature of the beneficial ownership for all
shares
is sole voting and investment power.
|
(2)
|
Includes
4,860 shares of the Company Common Stock held as Trustee, Guardian,
or
Custodian for his children. Also includes 182,160 shares of Company
Common
Stock in two trusts of which he is Co-Trustee and as to which he
shares
voting and investment power. Also includes 38,358,657 shares of the
Company Common Stock held by RFPS Management Company II, L.P. of
which RFA
Management Company, LLC ("General Partner"), a Georgia limited
liability company, is
the general partner. The voting interests of the General Partner
are held
by two revocable trusts, one of which each of Mr. Gary W. Rollins
or Mr.
R.Randall Rollins is the grantor and sole trustee. LOR, Inc. is the
manager of the General Partner. Mr. R. Randall Rollins and Mr. Gary
W.
Rollins have voting control of LOR, Inc. Included
herein are options to purchase 180,000 shares of Company Common Stock
which are currently exercisable or will become exercisable within
60 days
of March 17, 2006, and 65,000 shares of restricted stock awards for
Company Common Stock. This excludes options to purchase 45,000 shares
of
Company Common Stock that are not currently exercisable and will
not
become exercisable within 60 days of March 17, 2006. This also includes
66,587 shares of Company Common Stock held by his wife, as to which
Mr.
Rollins disclaims any beneficial interest. Mr.
Rollins is part of a control group holding Company securities that
includes Mr. Gary W. Rollins, as disclosed on a Schedule 13D on file
with
the U.S. Securities and Exchange Commission.
|
(3)
|
Includes
182,160 shares of the Company Common Stock in two trusts of which
he is
Co-Trustee and as to which he shares voting and investment power.
Also
includes 101,916 shares of Company Common Stock held as Trustee,
Guardian
or Custodian for his children. Also
includes 38,358,657 shares of Company Common Stock held by RFPS Management
Company II, L.P. of which RFA Management Company, LLC ("General Partner"),
a Georgia limited
liability company, is
the general partner. The voting interests of the General Partner
are held
by two revocable trusts, one of which each of Gary or Randall Rollins
is
the grantor and sole
|
(4)
|
Includes
381,210 shares of Company Common Stock subject to options that are
currently exercisable or that become exercisable within 60 days of
March
17, 2006, and 151,653 shares of restricted stock awards for Company
Common
Stock.
|
(5)
|
Includes
43,474 shares of Company Common Stock subject to options that are
currently exercisable or that become exercisable within 60 days of
March
17, 2006, and 42,362 shares of restricted stock awards for Company
Common
Stock.
|
(6)
|
Includes
74,028 shares of Company Common Stock subject to options that are
currently exercisable or that become exercisable within 60 days of
March
17, 2006, and 119,610 shares of restricted stock awards for Company
Common
Stock.
|
(7)
|
Shares
held in trusts as to which more than one officer and/or director
are
Co-Trustees or entities in which there is common ownership have been
included only once. Includes an aggregate of 678,713 shares of Company
Common Stock that may be purchased by four executive officers upon
exercise of options that are currently exercisable or that become
exercisable within 60 days of March 17, 2006, and 378,626 shares
of
restricted stock awards for Company Common Stock earned by them pursuant
to the Company's 1994 Employee Stock Incentive Plan and 2004 Stock
Incentive Plan.
|
Names
of Directors
|
Principal
Occupation (1)
|
Service
as
Director
|
Age
|
Shares
of
Common
Stock (2)
|
Percent
of
Outstanding
Shares
|
|||||
Names
of Director Nominees
|
||||||||||
Class
II (Current Term Expires 2006, New Term Will Expire
2009)
|
||||||||||
Richard
A. Hubbell
|
President
and Chief Executive Officer of the Company since April 2003; President
and
Chief Operating Officer of the Company prior to April 2003; President
and
Chief Executive Officer of Marine Products Corporation (boat
manufacturing) since February 2001.
|
1987
to date
|
61
|
969,522
(3)
|
1.5
|
Linda
H. Graham
|
Vice
President and Secretary of the Company since 1987; Vice President
and
Secretary of Marine Products Corporation (boat manufacturing) since
February 2001.
|
2001
to date
|
69
|
231,309
(4)
|
**
|
|||||
Bill
J. Dismuke
|
|
Retired
President of Edwards Baking Company.
|
January
25, 2005 to date
|
69
|
2,250
|
**
|
||||
Names
of Directors Whose Terms Have Not Expired
|
||||||||||
Class
III (Term Expires 2007)
|
||||||||||
Wilton
Looney
|
Honorary
Chairman of the Board, Genuine Parts Company (automotive parts
distributor).
|
1984
to date
|
86
|
2,700
|
**
|
|||||
Gary
W. Rollins (5)
|
President
and Chief Executive Officer of Rollins, Inc. (consumer services)
since
2001; President and Chief Operating Officer of Rollins, Inc. prior
to
2001.
|
1984
to date
|
61
|
40,297,125
(6)
|
61.6
|
|||||
James
A. Lane, Jr.
|
Executive
Vice President of Marine Products Corporation (boat
manufacturing) since February 2001;
President of Chaparral Boats, Inc. since 1976.
|
1987
to date
|
62
|
259,987
|
**
|
|||||
Class
I (Term Expires 2008)
|
||||||||||
R.
Randall Rollins (5)
|
Chairman
of the Board of the Company since April 2003; Chairman of the Board
and
Chief Executive Officer of the Company prior to April 2003; Chairman
of
the Board of Marine Products Corporation (boat
manufacturing) since
February 2001; Chairman of the Board of Rollins, Inc. (consumer services)
since October 1991.
|
1984
to date
|
74
|
39,779,983
(7)
|
60.8
|
Henry
B. Tippie
|
Presiding
Director of the Company; Chairman of the Board and Chief Executive
Officer
of Tippie Services, Inc. (management services); Chairman of the Board
of
Dover Downs Gaming and Entertainment, Inc. (operator of multi-purpose
gaming and entertainment complex) since January 2003; Chairman of
the
Board of Dover Motorsports, Inc. (operator of motorsports tracks)
since
April 2000 and Vice Chairman prior to April 2000.
|
1984
to date
|
79
|
605,835
(8)
|
**
|
|||||
James
B. Williams
|
Chairman
of the Executive Committee, SunTrust Banks, Inc. (bank holding company)
from 1998
to
April 2004;
Chairman
of the Board and Chief Executive Officer of SunTrust Banks, Inc.
from 1991
to 1998.
|
1984
to date
|
73
|
90,000
|
**
|
(1)
|
Unless
otherwise noted, each of the directors has held the positions of
responsibility set out in this column (but not necessarily his or
her
present title) for more than five years. In addition to the directorships
listed in this column, the following individuals also serve on the
Boards
of Directors of the following companies: James B. Williams: The Coca-Cola
Company and Genuine Parts Company; R. Randall Rollins: Dover Downs
Gaming
and Entertainment, Inc. and Dover Motorsports, Inc.; Gary W. Rollins:
Genuine Parts Company and Emory University. All of the directors
shown in the above table are also directors of Marine Products Corporation
(“Marine Products” or “MPC”) and with the exception of Messrs. Hubbell and
Lane and Ms. Graham are also directors of Rollins,
Inc.
|
(2)
|
Except
as otherwise noted, the nature of the beneficial ownership for all
shares
is sole voting and investment
power.
|
(3) |
See
information contained in footnote (4) to the table appearing in Capital
Stock section.
|
(4) |
See
information contained in footnote (5) to the table appearing in Capital
Stock section.
|
(5) |
R.
Randall Rollins and Gary W. Rollins are brothers.
|
(6) |
See
information contained in footnote (3) to the table appearing in Capital
Stock section.
|
(7) |
See
information contained in footnote (2) to the table appearing in Capital
Stock section.
|
(8) |
Includes
42,660 shares held in trusts of which he is a Trustee or Co-Trustee
and as
to which he shares voting and investment power. Also includes shares
held
by a wholly owned corporation that owns 675
shares.
|
·
|
For
meetings of the Board of Directors, Compensation Committee, Nominating
and
Governance Committee and Diversity Committee, $1,000.
|
·
|
For
meetings of the Audit Committee, $2,000. In addition, the Chairman
of the
Audit Committee receives an additional $1,000 for preparing to conduct
each quarterly Audit Committee meeting.
|
·
|
to
recommend to the Board of Directors nominees for director and to
consider
any nominations properly made by a
stockholder;
|
·
|
upon
request of the Board of Directors, to review and report to the Board
with
regard to matters of corporate governance;
and
|
·
|
to
make recommendations to the Board of Directors regarding the agenda
for
Annual Stockholders’ Meetings and with respect to appropriate action to be
taken in response to any stockholder
proposals.
|
(i) |
If
the director, or a member of the director’s immediate family, has received
less than one hundred thousand dollars (US $100,000) in direct
compensation from the Company (other than director and committee
fees and
compensation for prior service which are not contingent in any way
on
continued services) during every 12 month period within the past
three (3)
years;
|
(ii) |
If
the director is a director or officer, or any member of the director’s
immediate family is a director or officer of a bank to which the
Company
is indebted, and the total amount of the indebtedness does not exceed
one
percent (1%) of the total assets of the bank for any of the past
three (3)
years;
|
(iii) |
If
the director or any member of the director’s immediate family serves as an
officer, director, trustee or primary spokesperson of a charitable
or
educational organization, and donations by the Company do not exceed
the
greater of one million dollars (US $1,000,000) or two percent (2%)
of the
organization’s total annual charitable receipts for any of the past three
(3) years;
|
(iv) |
If
the director has a relationship with the Company of a type covered
by item
404(a) and/or item 404(b) of the Securities and Exchange Commission’s
Regulation S-K (or any successor regulation), and that relationship
need
not, according to the terms of those items and any then-current proxy
regulations, be disclosed in the Company’s annual proxy statement (except
for relationships described elsewhere in the Company’s guidelines in which
case the other guidelines will
govern);
|
(v) |
If
the director, or a member of the director’s immediate family, has direct
or beneficial ownership (as defined by Rule 13d-3 under the Securities
Exchange Act of 1934) of any amount of any class of common stock
of the
Company.
|
1.
|
Mr.
Tippie was employed by Rollins, Inc. (“Rollins”) from 1953 to 1970, and
held several offices with that company during that time, including
as
Executive
Vice President - Finance, Secretary, Treasurer and Chief Financial
Officer.
Messrs. Randall and Gary Rollins are directors and executive officers
of
Rollins and are part of a group that has voting control of Rollins.
|
2.
|
Mr.
Tippie is Chairman of the Board of Directors of Dover Motorsports,
Inc.
and Dover Downs Gaming and Entertainment, Inc. Mr. Randall Rollins
is also
a director of these companies.
|
3.
|
Mr.
Tippie is the trustee of the O. Wayne Rollins Foundation and of the
Rollins Children’s Trust. O. Wayne Rollins is the father of Gary and
Randall Rollins. The beneficiaries of the Rollins Children’s Trust include
the immediate family members of Gary and Randall Rollins.
|
4.
|
Each
of Messrs. Looney, Tippie and Williams also serve on the Boards
of
Rollins, Inc. and Marine Products Corporation, of which Messrs.
Gary and
Randall Rollins are directors, and voting control over which is
held by a
control group of which Messrs. Randall and Gary Rollins are a part.
Mr. Randall Rollins is an executive officer of Marine
Products. Messrs. Gary and Randall Rollins are executive officers of
Rollins, Inc.
|
|
|
· |
Reviewed
with management the interim financial information included in the
Forms
10-Q prior to their being filed with the SEC. In addition, the Committee
reviewed all earnings releases with management prior to their
release;
|
· |
Reviewed
and discussed with the Company’s management and Grant Thornton the audited
consolidated financial statements of the Company as of December 31,
2005
and 2004 and for the three years ended December 31, 2005. The discussion
included matters related to the conduct of the audit, such as the
selection of and changes in accounting policies, significant adjustments
arising from the audit and the absence of any disagreements with
management over the application of accounting principles, the basis
for
management’s accounting estimates and the disclosures in the financial
statements;
|
· |
Reviewed
and discussed with the Company’s management and Grant Thornton,
management’s assessment that the Company maintained effective control over
financial reporting as of December 31,
2005;
|
· |
Discussed
with the independent registered public accountants matters required
to be
discussed by
Statement on Auditing Standards No. 61, “Communications with Audit
Committees;” and
|
· |
Received
from the independent registered public accountants the written disclosures
and the letter required by Independence Standards Board Standard
No. 1,
“Independence Discussions with Audit Committees,” and discussed with the
registered public accountants the firm’s independence from the
Company.
|
Submitted
by the Audit Committee of the Board of Directors.
Henry
B. Tippie, Chairman
Wilton
Looney
James
B. Williams
Bill
J. Dismuke
|
Submitted
by the Compensation Committee of the Board of Directors.
Henry
B. Tippie, Chairman
Wilton
Looney
James
B. Williams
|
Annual
Compensation
|
Long-Term
Compensation Awards
|
|||||||||||||||||||||
Name
and Principal Position
|
Year
|
Salary
|
Bonus
|
Restricted
Stock
Awards
(1)
|
Securities
Underlying Options (#)
|
LTIP
Payouts
|
All
Other Compensation (2)
|
|||||||||||||||
R.
Randall Rollins
|
2005
|
$
|
355,000
|
$
|
500,000
|
$
|
0
|
0
|
0
|
$
|
0
|
|||||||||||
Chairman
of the Board
|
2004
|
355,000
|
300,000
|
276,200
|
0
|
0
|
0
|
|||||||||||||||
2003
|
300,000
|
175,000
|
0
|
225,000
|
0
|
0
|
||||||||||||||||
|
||||||||||||||||||||||
Richard
A. Hubbell
|
2005
|
|
$
|
455,000
|
$
|
450,000
|
$
|
292,680
|
0
|
0
|
$
|
32,562
|
||||||||||
President
and
|
2004
|
455,000
|
200,000
|
276,200
|
0
|
0
|
32,412
|
|||||||||||||||
Chief
Executive Officer
|
2003
|
400,000
|
110,000
|
0
|
56,250
|
0
|
32,262
|
|||||||||||||||
Linda
H. Graham
|
2005
|
$
|
120,000
|
$
|
60,000
|
$
|
121,950
|
0
|
0
|
$
|
3,300
|
|||||||||||
Vice
President and Secretary
|
2004
|
120,000
|
40,000
|
69,050
|
0
|
0
|
3,480
|
|||||||||||||||
2003
|
104,000
|
25,000
|
0
|
22,500
|
0
|
3,120
|
||||||||||||||||
Ben
M. Palmer
|
2005
|
$
|
150,000
|
$
|
200,000
|
$
|
195,120
|
0
|
0
|
$
|
5,424
|
|||||||||||
Vice
President,
|
2004
|
150,000
|
150,000
|
110,480
|
0
|
0
|
6,150
|
|||||||||||||||
Chief
Financial Officer and
|
2003
|
150,000
|
60,000
|
47,450
|
33,750
|
0
|
4,752
|
|||||||||||||||
Treasurer
|
(1)
|
The
Company has granted employees two forms of restricted stock: time
lapse
restricted and performance restricted. During 2005, three Named Executive
Officers received time lapse restricted share grants as follows:
27,000
shares to Mr. Richard A. Hubbell, 11,250 shares to Ms. Linda H. Graham
and
18,000 shares to Mr. Ben M. Palmer. Time lapse restricted shares
vest
after a stipulated number of years from the grant date, depending
on the
terms of the issue. Time lapse restricted shares issued in years
prior to
2003 vest after ten years. Time lapse restricted shares issued in
2005 and
2004 vest in 20 percent increments annually starting with the second
anniversary of the grant, over six years from the date of grant.
Grantees
receive dividends declared and retain voting rights for the granted
shares. The performance restricted shares are granted, but not earned
and
issued until certain five-year tiered performance criteria are met.
The
performance criteria are predetermined market prices of RPC common
stock.
On the date the common stock appreciates to each level (determination
date), 20 percent of performance shares are earned. Once earned,
the
performance shares vest five years from the determination date. After
the
determination date, the grantee will receive dividends declared and
voting
rights to the shares. As
of December 31, 2005, 45,000 time lapse restricted shares were held
for
Mr. Rollins, 155,250 time lapse restricted shares and 16,903 performance
restricted shares were held for Mr. Hubbell, 49,500 time lapse restricted
shares and 1,362 performance restricted shares were held for Ms.
Graham,
and 82,125 time lapse restricted shares and 7,436 performance restricted
shares were held for Mr. Palmer. The total number of restricted shares
held and their values on December 31, 2005 were as follows: Mr. Rollins,
45,000 shares valued at $1,185,300, Mr. Hubbell, 172,153 shares valued
at
$4,534,510, Ms. Graham, 50,862 shares valued at $1,339,705 and Mr.
Palmer,
89,561 shares valued at $2,359,037. The time lapse restricted share
certificates and the performance restricted share certificates that
have
been earned and issued are being held by the Company and may not
be
transferred by the Named Executive Officers until the shares vest.
The
December 31, 2005 values are based on the closing market price of
$26.34
per share and do not take into account any diminution of value
attributable to vesting provisions of these shares.
|
(2)
|
Effective
July 1, 1984, the Company adopted the RPC 401(k) Plan (“401(k) Plan”), a
qualified retirement plan designed to meet the requirements of Section
401(k) of the Internal Revenue Code (the “Code”). The 401(k) Plan provides
for a matching contribution of fifty cents ($0.50) for each dollar
($1.00)
of a participant's contribution to the 401(k) Plan that does not
exceed
six percent of his or her annual compensation (which includes commissions,
overtime and bonuses). A participant’s voluntary pre-tax salary deferrals
made under the 401(k) Plan are in lieu of payment of compensation
to the
participant. The Company’s Retirement Income Plan, a trusteed defined
benefit pension plan, provides monthly benefits upon retirement at
age 65
to eligible employees. In
the first quarter of 2002, the Company's Board of Directors approved
a
resolution to cease all future benefit accruals under the Retirement
Income Plan effective March 31, 2002. In lieu thereof, beginning
in 2002,
the Company began providing enhanced benefits in the form of cash
contributions on behalf of certain long-service employees who were
40 to
65 years of age on or before December 31, 2002. These enhanced benefit
contributions are discretionary and may be made annually, subject
to a
participant’s continued employment, for a maximum of seven years. The
contributions are made either to the non-qualified Supplemental Retirement
Plan (“SRP”) or to the 401(k) Plan for each employee who is entitled to
the enhanced benefits. The
amounts shown in this column represent the Company match under the
401(k)
Plan. In the case of Mr. Hubbell, the amount shown includes $26,262
towards enhanced benefits. Beginning
late in 2002, the Company began permitting selected highly compensated
employees to defer a portion of their compensation into the
SRP.
|
Name
|
Shares
Acquired
on
Exercise
(#)
|
Value
Realized
($)
|
Number
of Securities
Underlying
Unexercised
Options/SARs
at
FY End (#)
Exercisable/Unexercisable
|
Value
of Unexercised
In-the-Money
Options/SARs
At
FY-End ($)(1)
Exercisable/
Unexercisable
|
||||
R.
Randall Rollins
|
0
|
$
0
|
135,000/
90,000
|
$3,023,828/
2,015,886
|
||||
Richard
A. Hubbell
|
0
|
0
|
415,565/
56,249
|
9,520,906/
1,236,354
|
||||
Linda
H. Graham
|
0
|
0
|
36,724/
15,750
|
828,431/
352,665
|
||||
Ben
M. Palmer
|
36,163
|
522,638
|
60,528/
27,000
|
1,317,422/
599,940
|
(1)
|
Based
on the closing price of Company Common Stock on the New York Stock
Exchange on December 31, 2005 of $26.34 per share.
|
Plan
Category
|
(A)
Number
of
Securities
To Be
Issued
Upon
Exercise
of
Outstanding
Options,
Warrants
and Rights
|
(B)
Weighted
Average
Exercise
Price
of
Outstanding
Options,
Warrants
and
Rights
|
(C)
Number
of Securities
Remaining
Available
for
Future Issuance
Under
Equity Compensation
Plans
(Excluding Securities
Reflected
in Column (A))
|
Equity
compensation plans approved by securityholders
|
2,329,110
|
$4.64
|
2,624,625
(1)
|
Equity
compensation plans not approved by securityholders
|
-
|
-
|
-
|
Total
|
2,329,110
|
$4.64
|
2,624,625
|
(1)
|
All
of the securities are available to be issued as restricted stock
or other
stock awards.
|
1. |
Corporate
Performance.
The
performance
measures
for corporate performance will be established based
on such measures
as stock price, market share, revenues, earnings per share, return
on
equity, return on average assets, return on invested capital, expense
management, or other objective criteria.
|
2. |
Business
Unit/Function Performance.
The performance measures for business unit/function performance will
be
established separately for each participant whose performance goals
are
based in whole or in part on business unit/function performance.
Such
performance measures will be
based on such business criteria as achievement of financial or
non-financial goals, safety record, training goals, or other objective
criteria.
|
3. |
Individual
Performance.
The performance measures for individual performance will be established
separately for each participant whose performance goals are based
in whole
or in part on individual performance. Such performance measures will
be
based on such business criteria as process improvement, expense
management, achievement of particular management objectives, or other
objective criteria.
|
· |
threshold
performance level (with a performance value of 25 percent of the
Target
Award),
|
· |
target
performance level (with a performance value up to 100 percent of
the
Target
Award),
to
|
· |
superior
performance level (with a performance value up to 200 percent of
the
Target
Award).
|
|
|
|
Name
and Position
|
Dollar
Value of Maximum 150% of 2005 Base Salary ($) (1)
|
||||||
R.
Randall Rollins
Chairman
of the Board
|
$
|
532,500
|
|||||
Richard
A. Hubbell
President
and Chief Executive Officer
|
$
|
682,500
|
|||||
Linda
H. Graham
Vice
President and Secretary
|
$
|
180,000
|
|||||
Ben
M. Palmer
Vice
President, Chief Financial Officer
and
Treasurer
|
$
|
225,000
|
|||||
Executive
Group
|
$
|
1,620,000
|
(1). |
This
illustration shows a maximum of 150% of base salary in bonus compensation.
Actual 2006 bonus compensation may be less than
150%.
|
1.
|
Ernst
& Young did not advise the Company that the internal controls
necessary to develop reliable financial statements did not
exist,
|
2.
|
Ernst
& Young did not advise the Company that it would be unable to rely
on
management’s representation,
|
3.
|
Ernst
& Young did not advise the Company of the need to significantly expand
the scope of its audit,
|
4.
|
Ernst
& Young did not advise the Company that information had come to its
attention that had caused it to conclude that there was a material
impact
to the fairness or reliability of a previously issued audit report
or the
underlying financial statements.
|
2005
|
2004**
|
||||||
Audit
fees and quarterly reviews (1)
|
$
|
877,200
|
$
|
846,000
|
|||
Audit
related fees (2)
|
15,800
|
12,800
|
|||||
Tax
fees (3)
|
8,500
|
-
|
|||||
All
other fees
|
-
|
-
|
(1)
|
Audit
fees include fees for audit or review services in accordance with
generally accepted auditing standards, such as statutory audits and
services rendered for compliance with Section 404 of the Sarbanes-Oxley
Act. These fees are subject to final approval by the Audit Committee.
|
(2)
|
Audit
related fees represent fees for the audit of the 401(k)
Plan.
|
(3)
|
Tax
fees related to tax planning and advice on international
issues.
|
BY
ORDER OF THE BOARD OF DIRECTORS
|
|
Atlanta,
Georgia
|
|
April
4, 2006
|
|
Linda
H. Graham, Secretary
|
PURPOSE |
MEMBERSHIP |
-
|
Who
are independent of management and the Company. Members of the Committee
shall be considered independent as long as they do not accept any
consulting, advisory, or compensatory fee from the Company and are
not an
affiliated person of the Company or its subsidiaries, and meet the
independence requirements of the New York Stock Exchange. Under Rule
10A-3
to Securities Exchange Act of 1934, disallowed payments to an Audit
Committee member includes payments made directly or indirectly, and
for
these purposes “indirect” acceptance shall include (a) payments to
spouses, minor children or stepchildren or children or stepchildren
sharing a home with the member and (b) payments accepted by an entity
in
which such member is a partner, member, officer such as a managing
director occupying a comparable position or executive officer, or
occupies
a similar position (except limited partners, non-managing members
and
those occupying similar positions who, in each case, have no active
role
in providing services to the entity) and which provides accounting,
consulting, legal, investment banking or financial advisory to the
Company
or any subsidiary.
|
-
|
Who
are financially literate or who become financially literate within
a
reasonable period of time after appointment to the Committee. In
addition,
at least one member of the Committee must be an Audit Committee “financial
expert” as defined by SEC
regulations.
|
KEY RESPONSIBILITIES |
· |
The
firm’s internal quality control
procedures.
|
· |
Any
material issues raised by the most recent internal quality control
review,
or peer review, of the firm, or by any inquiry or investigation by
governmental or professional authorities, within the preceding five
years,
respecting one or more independent audits carried out by the firm,
and any
steps taken to deal with any such
issues.
|
· |
All
relationships between the independent auditor and the Company (to
assess
the auditor’s independence).
|
1.
|
o
|
FOR
RICHARD A. HUBBELL, LINDA H. GRAHAM
AND
BILL J. DISMUKE, AS CLASS II DIRECTORS
EXCEPT
AS INDICATED BELOW
|
o
|
ABSTAIN
FROM VOTING FOR THE
ELECTION
OF ALL CLASS II NOMINEES
|
2. |
TO
APPROVE AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE
THE
NUMBER OF AUTHORIZED SHARES OF CAPITAL STOCK TO 160
MILLION
|
o FOR
|
o AGAINST
|
o ABSTAIN
|
3. |
TO
APPROVE THE PERFORMANCE-BASED INCENTIVE CASH COMPENSATION FOR THE
EXECUTIVE OFFICERS
|
o FOR
|
o AGAINST
|
o ABSTAIN
|
4. |
ON
ALL OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
|
|
PROXY
Please
sign below, date and return promptly.
|
|
Signature
|
||
Dated:
|
__________________________,
2006
(Signature
should conform to name and title stenciled hereon.
Executors, administrators, trustees, guardians and
attorneys should add their title upon signing.)
|