<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 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)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
N/A
------------------------------------------------------------------------
(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):
N/A
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
------------------------------------------------------------------------
(5) Total fee paid:
N/A
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / 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:
N/A
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
N/A
------------------------------------------------------------------------
(3) Filing Party:
N/A
------------------------------------------------------------------------
(4) Date Filed:
N/A
------------------------------------------------------------------------
<PAGE>
RPC, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
2170 PIEDMONT ROAD, NE, ATLANTA, GEORGIA 30324
TO THE HOLDERS OF THE COMMON STOCK:
PLEASE TAKE NOTICE that the 1996 Annual Meeting of Stockholders of RPC,
Inc., a Delaware corporation (the "Company"), will be held at the Company's
offices located at 2170 Piedmont Road, NE, Atlanta, Georgia, on Tuesday, April
23, 1996, at 9:00 A.M., or any adjournment thereof, for the following purposes:
(1) To elect four Class I directors to the Board of Directors; and
(2) To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Proxy Statement dated March 18, 1996 is attached.
The Board of Directors has fixed the close of business on February 29, 1996
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the meeting.
Stockholders who do not expect to be present at the meeting are urged to
complete, date, sign and return the enclosed proxy. No postage is required if
the enclosed envelope is used and mailed in the United States.
BY ORDER OF THE BOARD OF DIRECTORS
Linda H. Graham, Secretary
Atlanta, Georgia
March 18, 1996
<PAGE>
PROXY STATEMENT
This Proxy Statement and a form of proxy were first mailed to stockholders
on or about March 18, 1996.
The following information concerning the enclosed proxy and the matters to
be acted upon at the Annual Meeting of Stockholders to be held on April 23,
1996, is submitted to the stockholders for their information.
SOLICITATION OF AND POWER TO REVOKE PROXY
A form of proxy is enclosed. Each proxy submitted will be voted as directed,
but if not otherwise specified, proxies solicited by the Board of Directors of
the Company will be voted in favor of the candidates for election to the Board
of Directors.
A stockholder executing and delivering a proxy has power to revoke the same
and the authority thereby given at any time prior to the exercise of such
authority if he so elects, by contacting either proxyholder.
CAPITAL STOCK
The outstanding capital stock of the Company on February 29, 1996 consisted
of 14,541,331 shares of Common Stock, par value $0.10 per share (excluding
68,723 treasury shares). Holders of Common Stock are entitled to one vote
(non-cumulative) for each share of such stock registered in their respective
names at the close of business on February 29, 1996, the record date for
determining stockholders entitled to notice of and to vote at the meeting or any
adjournment thereof.
The name and address of each stockholder who owned beneficially five percent
(5%) or more of the shares of Common Stock of the Company on February 29, 1996,
together with the number of shares so owned and the percentage of outstanding
shares that ownership represents, and information as to Common Stock ownership
of the Company's Chief Executive Officer and the other four most highly
compensated executive officers of the Company, (the "Named Executives") and the
executive officers and directors of the Company as a group (according to
information received by the Company), is set out below:
<TABLE>
<CAPTION>
AMOUNT PERCENT OF
NAME AND ADDRESS BENEFICIALLY OUTSTANDING
OF BENEFICIAL OWNER OWNED(1) SHARES
--------------------- ------------ ---------------
<S> <C> <C>
R. Randall Rollins ......................................................... 7,898,882(2) 54.3
2170 Piedmont Road, NE
Atlanta, Georgia
Gary W. Rollins ............................................................ 7,785,903(3) 53.5
2170 Piedmont Road, NE
Atlanta, Georgia
Mario Gabelli .............................................................. 1,090,100(4) 7.5
655 Third Avenue
New York, New York
Richard A. Hubbell ......................................................... 82,765(5) 0.6
2170 Piedmont Road, NE
Atlanta, Georgia
Bobby Joe Cudd ............................................................. 25,800 0.2
2170 Piedmont Road, NE
Atlanta, Georgia
James A. Lane, Jr .......................................................... 75,715(6) 0.5
2170 Piedmont Road, NE
Atlanta, Georgia
William S. Pegg ............................................................ 79,715(6) 0.5
2170 Piedmont Road, NE
Atlanta, Georgia
All Directors and Executive Officers as a group (13 persons)................ 9,048,729(7) 61.1
<FN>
(1) Except as otherwise noted, the nature of the beneficial ownership for all
shares is sole voting and investment power.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(2) Includes 308,048 shares of the Company held as Trustee, Guardian, or
Custodian for his children or as Custodian for the children of his brother,
Gary W. Rollins. Also includes 402,580 shares of the Company in three
trusts of which he is a Co-Trustee and as to which he shares voting and
investment power. Also includes 6,246,914 shares owned by LOR, Inc. Mr.
Rollins is an officer, director and stockholder of LOR, Inc. Also includes
432,000 shares owned by The May Partnership. Mr. Rollins is an officer,
director and stockholder of Rollins Holding Company, Inc., the corporation
which is the sole general partner of The May Partnership. Also includes
133,484 shares held by Rollins Investment Fund, a Georgia general
partnership, of which Mr. Rollins is a general partner. Also includes
82,752 shares indirectly owned by Mr. O. Wayne Rollins' Estate. Mr. Rollins
is the Co-Executor and Co-Trustee of this estate. Does not include 10,890*
shares of the Company held by his wife.
(3) Includes 163,972 shares of the Company held as Trustee or Custodian for his
children or as Custodian for the grandchildren of his brother, R. Randall
Rollins. Also includes 389,140 shares of the Company in three trusts of
which he is Co-Trustee and as to which he shares voting and investment
power. Also includes 6,246,914 shares owned by LOR, Inc. Mr. Rollins is an
officer, director and stockholder of LOR, Inc. Also includes 432,000 shares
owned by The May Partnership. Mr. Rollins is an officer, director and
stockholder of Rollins Holding Company, Inc., the corporation which is the
sole general partner of The May Partnership. Also includes 133,484 shares
held by Rollins Investment Fund, a Georgia general partnership, of which
Mr. Rollins is a general partner. Also includes 82,752 shares indirectly
owned by Mr. O. Wayne Rollins' Estate. Mr. Rollins is the Co-Executor and
Co-Trustee of this estate. Does not include 50,002* shares of the Company
held by his wife.
(4) Based upon information received by the Company, an aggregate of 1,090,100
shares of Company Common Stock are beneficially owned by entities
controlled directly or indirectly by Mario Gabelli, as follows: 860,100
shares by GAMCO Investors, Inc. and 230,000 shares by Gabelli Funds, Inc.
GAMCO Investors, Inc. does not have authority to vote 136,000 shares of the
total 860,100 held. Gabelli Funds, Inc. has sole voting and disposition
powers with respect to the 230,000 shares held.
(5) Includes 51,465 shares subject to exercisable options, and 28,000 shares of
restricted stock grants.
(6) Includes 47,065 shares subject to exercisable options, and 20,000 shares of
restricted stock grants.
(7) Shares held in trusts as to which more than one officer and/or director are
Co-Trustees have been included only once. Includes an aggregate of 254,875
shares which may be purchased by 5 executive officers upon exercise of
currently exercisable options or restricted stock grants granted to them
pursuant to the Company's 1984 Incentive Stock Option Plan and 1994 Stock
Incentive Plan.
*Messrs. R. Randall Rollins and Gary W. Rollins disclaim any beneficial
interest in these holdings.
</TABLE>
ELECTION OF DIRECTORS
Four individuals are to be elected at the Annual Meeting to serve as Class I
directors for a term of three years, and until the election and qualification of
their successors. Six other individuals serve as directors but are not standing
for re-election because their terms as directors extend past this Annual Meeting
pursuant to provisions of the Company's bylaws which provide for the election of
directors for staggered terms, with each director serving a three-year term.
Unless authority is withheld, the proxy holders will vote for the election of
the first 4 persons named below to 3 year terms as directors. Although
Management does not contemplate the possibility, in the event any nominee is not
a candidate or is unable to serve as a director at the time of the election,
unless authority is withheld, the proxies will be voted for any nominee who
shall be designated by the present Board of Directors to fill such vacancy.
The name and age of each of the 4 nominees, his principal occupation,
together with the number of shares of Common Stock beneficially owned, directly
or indirectly, by him and the percentage of outstanding shares that ownership
represents, all as of the close of business February 29, 1996, (according to
information received by the Company) are set out below. Similar information is
also provided for those directors whose terms expire in future years. Each
director was originally elected as a director shortly after incorporation of the
Company in January 1984, with the exception of James A. Lane, Jr. and Richard A.
Hubbell, who were elected as directors on January 27, 1987.
3
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
COMMON OUTSTANDING
NAMES OF NOMINEES PRINCIPAL OCCUPATION(1) AGE STOCK(2) SHARES
------------------------- --------------------------------------------- --- ------------ -------------
CLASS I (TERM EXPIRES 1999)
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
R. Randall Rollins(3) Chairman of the Board and Chief Executive
Officer of the Company; Chairman of the Board
and Chief Executive Officer of Rollins, Inc.
(consumer services) (since October 1991);
Vice Chairman of the Board of Rollins, Inc.
(prior to October 1991). 64 7,898,882(4) 54.3
Henry B. Tippie Chairman of the Board and Chief Executive
Officer of Tippie Communications, Inc. (radio
stations). 69 578,139(5) 4.0
James B. Williams Chairman and Chief Executive Officer of
SunTrust Banks, Inc. (bank holding company). 62 20,000 0.1
James A. Lane, Jr. Executive Vice President of the Company;
President of Chaparral Boats, Inc.
(subsidiary of the Company). 53 75,715(6) 0.5
</TABLE>
<TABLE>
<CAPTION>
NAMES OF DIRECTORS
WHOSE TERMS HAVE
NOT EXPIRED
-------------------------
CLASS II (TERM EXPIRES 1997)
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John W. Rollins(3) Chairman of the Board and Chief Executive
Officer of Rollins Truck Leasing Corp.
(vehicle leasing and transportation);
Chairman of the Board and Chief Executive
Officer of Rollins Environmental Services,
Inc. (hazardous waste treatment and less than
disposal). 79 6,204(7) 0.1
Bobby Joe Cudd Executive Vice President of the Company;
President of Cudd Pressure Control, Inc.
(subsidiary of the Company). 66 25,800 0.2
Richard A. Hubbell President and Chief Operating Officer of the
Company. 51 82,765(8) 0.6
</TABLE>
<TABLE>
<CAPTION>
CLASS III (NEW TERM EXPIRES 1998)
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Wilton Looney Honorary Chairman of the Board of Genuine less than
Parts Company (Automotive parts distributor). 76 600 0.1
Charles R. Patterson, Jr. Retired (since July, 1992); Executive Vice
President of the Company and President of
Patterson Services, Inc. (subsidiary of the
Company) (prior to July, 1992). 69 0 0
Gary W. Rollins(3) President and Chief Operating Officer of
Rollins, Inc. (consumer services). 51 7,785,903(9) 53.5
</TABLE>
(1) Unless otherwise noted, each of the directors has held the positions of
responsibility set out in this column (but not necessarily his 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: Henry B. Tippie: Rollins
Environmental Services, Inc., Rollins Truck Leasing Corp. and Matlack
Systems, Inc.; John W. Rollins: Matlack Systems, Inc. and FPA Corp.; James
B. Williams: The Coca-Cola Company, Genuine Parts Company, Sonat Inc., and
Georgia-Pacific Corporation; Gary W. Rollins: Rollins Truck Leasing Corp.;
R. Randall Rollins: SunTrust Banks Inc. and SunTrust Banks of Georgia; and
Charles R. Patterson, Jr.: Premier Bank, NA. All of the directors shown in
the above table, with the exception of Messrs. Patterson, Hubbell, Lane and
Cudd, 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) R. Randall Rollins and Gary W. Rollins are brothers. John W. Rollins is
their uncle.
(4) See information contained in footnote (2) to the table appearing in Capital
Stock section.
(5) Includes 453,139 shares of Common Stock of the Company in trusts of which he
is a Trustee or Co-Trustee and as to which he shares voting and investment
power.
(6) See information contained in footnote (6) to the table appearing in Capital
Stock section.
(7) Does not include 7,804 shares held by his wife as custodian for his
children. Mr. Rollins disclaims any beneficial interest in these holdings.
(8) See information contained in footnote (5) to the table appearing in Capital
Stock section.
(9) See information contained in footnote (3) to the table appearing in Capital
Stock section.
4
<PAGE>
BOARD OF DIRECTORS COMPENSATION, COMMITTEES AND MEETINGS
During 1995 non-employee Directors received from the Company $750 for each
meeting of the Board of Directors or committee they attended, plus $10,000 per
year.
The Audit Committee of the Board of Directors of the Company consists of
Henry B. Tippie, Chairman, Wilton Looney and James B. Williams. The Audit
Committee held two meetings during the fiscal year ended December 31, 1995. Its
functions are to select a firm of independent public accountants whose duty it
is to audit the books and accounts of the Company and its subsidiaries for the
fiscal year for which they are appointed and to monitor the effectiveness of the
audit effort and the Company's financial and accounting organization and
financial reporting. The Compensation Committee of the Board of Directors of the
Company consists of Henry B. Tippie, Chairman, Wilton Looney and James B.
Williams. It held one meeting during the fiscal year ended December 31, 1995.
The functions of the Compensation Committee are to review the Company's
executive compensation structure and to report to the Board any changes to
insure continued effectiveness. The Board of Directors met four times during the
fiscal year ended December 31, 1995. The Company does not have a nominating
committee of the Board of Directors. No director attended fewer than 75 percent
of Board Meetings and meetings of committees on which he served during the
fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the directors named above who serve on the Company's Compensation
Committee are or have ever been employees of the Company. No executive officer
of the Company serves on a Compensation Committee of another company. R. Randall
Rollins, an executive of the Company, serves on the Board of Directors of both
SunTrust Banks, Inc. and SunTrust Banks of Georgia, a subsidiary of SunTrust
Banks, Inc. Mr. Williams is the Chairman and Chief Executive Officer of
SunTrust. Mr. Rollins is not on the Compensation Committee of either SunTrust
Banks, Inc. or SunTrust Banks of Georgia.
5
<PAGE>
EXECUTIVE COMPENSATION
Shown below is information concerning the annual and long-term compensation
for services in all capacities to the Company for the calendar years ended
December 31, 1995, 1994 and 1993 of those persons who were at December 31, 1995
(i) the chief executive officer and (ii) the other Named Executives of the
Company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
----------------------
ANNUAL RESTRICTED SECURITIES
COMPENSATION STOCK UNDERLYING
----------------- AWARDS OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS ($) (1) (#) COMPENSATION(2)
- ---------------------------------------- ---- -------- ------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
R. Randall Rollins 1995 $340,000 $ 0 0 0 $ 0
Chairman of the Board & 1994 320,000 0 0 0 0
Chief Executive Officer 1993 320,000 0 0 0 0
Richard A. Hubbell 1995 256,042 126,000 0 0 1,800
President & Chief Operating Officer 1994 243,333 127,500 176,000 11,000 1,800
1993 222,500 100,000 0 0 2,670
Bobby Joe Cudd 1995 118,229 1,720 0 0 1,423
Executive Vice President, & 1994 110,090 7,360 0 0 1,409
President, Cudd Pressure Control 1993 110,090 27,381 0 0 1,650
James A. Lane, Jr. 1995 67,580 1,012,633 0 0 1,800
Executive Vice President, & 1994 67,841 926,885 160,000 0 1,800
President, Chaparral Boats, Inc. 1993 67,841 555,347 0 0 2,830
William S. Pegg 1995 67,580 1,012,633 0 0 1,800
Executive Vice President, & 1994 67,841 926,885 160,000 0 1,800
Executive Vice President, Chaparral 1993 67,841 555,347 0 0 2,830
Boats, Inc.
</TABLE>
(1) The values set forth for restricted stock awards are as of April 26, 1994,
the date of grant of Time Lapse Restricted Stock. On December 31, 1995,
these were the only shares of restricted stock held by the Named Executives.
The number of shares held and their values on December 31, 1995 were as
follows: Mr. Hubbell, 22,000 shares valued at $200,750; Mr. Lane, 20,000
shares valued at $182,500; and Mr. Pegg, 20,000 shares valued at $182,500.
The December 31, 1995 values are based on the December 31, 1995 closing
market stock price of $9.125 and do not take into account any diminution of
value attributable to time lapse restrictions on these shares. Time Lapse
Restricted Stock vests ten years from the date of grant. This stock is
forfeited if the employment of the Named Executive terminates prior to
vesting for reasons other than death, retirement or permanent disability.
During these ten years, grantees receive all dividends declared and retain
voting rights for the granted shares.
(2) Effective July 1, 1984, the Company adopted the RPC, Inc. 401(k) Plan
("401(k) Plan"), a qualified retirement plan designed to meet the
requirements of Section 401(k) of the Internal Revenue Code. The 401(k) Plan
provides for a matching contribution of forty cents ($.40) for each one
dollar ($1.00) of a participant's contribution to the 401(k) Plan, not to
exceed 3 percent of his or her annual compensation (which includes
commissions, overtime and bonuses). A participant's voluntary pretax salary
deferrals made under the 401(k) Plan are in lieu of payment of compensation
to the participant. The amounts shown in this column represent the Company
match for the Named Executives.
(3) During the fiscal year ending December 31, 1995 there were no awards under
the Company's long-term incentive plan and no grants under the Company's
1994 Employee Stock Incentive Option Plan.
6
<PAGE>
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SAR'S OPTIONS/SAR'S
VALUE AT FY-END (#) AT FY-END ($) (1)
SHARES ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERICSE (#) ($) UNEXERCISABLE UNEXERCISABLE
- --------------------------------------------- --------------- ----------- --------------- ------------------
<S> <C> <C> <C> <C>
R. Randall Rollins........................... 0 $ 0 0/0 $ 0/0
Richard A. Hubbell........................... 0 0 49,265/8,800 232,119/9,900
Bobby Joe Cudd............................... 0 0 0/0 0/0
James A. Lane, Jr............................ 0 0 47,065/0 229,644/0
William S. Pegg.............................. 0 0 47,065/0 229,644/0
</TABLE>
(1) Based on the closing price of Company Common Stock on the New York Stock
Exchange on December 31, 1995 of $9.125 per share.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE EXCHANGE
ACT THAT MIGHT INCORPORATE FUTURE FILINGS, INCLUDING THIS PROXY STATEMENT, IN
WHOLE OR IN PART, THE FOLLOWING REPORT AND THE PERFORMANCE GRAPH INCLUDED HEREIN
SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
OVERVIEW
The Compensation Committee (the "Committee") is comprised of outside
directors who are not eligible to participate in the compensation plans and over
whose names this report is presented. The Committee reviews and approves the
compensation of the Company's executive officers annually. The actions of
executive officers have a profound impact on the short-term and long-term
profitability of the Company. Therefore, the design of the executive officer
compensation package is very important.
The Company has an executive compensation package that is driven by an
increase in shareholder value, the overall performance of the Company, and the
individual performance of the executive. The measures of the Company's
performance include revenue and net income. The 3 main components of the
executive compensation package are base salary, cash incentive plans, and stock-
based incentive plans.
BASE SALARY
The first component is base salary. The Company believes that it is
important for the Named Executives to receive acceptable salaries so the Company
can keep the senior executive talent it needs to meet the challenges in today's
environment. The factors subjectively used in determining base salary include
the recent profit performance of the Company, the magnitude of responsibilities,
the scope of the position, individual performance and the pay received by others
in similar positions. Approximately one-half of the merit percentage increases
are based on attainment of the net income objectives for each appropriate
functional area of responsibility. The remaining 50 percent of the merit salary
increase is subjectively based on the other aforementioned criteria. The
decisions of the Committee are very subjective and these factors are not used in
any specific formula or weighting. The salaries of the Named Executives are
reviewed annually, but increases are awarded only when justified by the increase
in the Company's shareholder value and the overall performance of the Company.
As a result of the improvement in net income in 1995, increases to base pay
ranged up to 10 percent for the Named Executives.
CASH BASED INCENTIVE PLANS
The second component of the executive compensation package consists of
several cash-based incentive plans. The Company has a variety of individualized
cash based incentive plans which have
7
<PAGE>
been developed to reward individual performance. The Company includes several
subsidiaries in unrelated industries, so each compensation plan was designed to
be motivational and appropriate, based on the norms in that industry.
The annual incentive compensation package for executive officers is
developed by the Chief Executive Officer of the Company prior to the end of each
fiscal year. It is based upon a performance formula for the ensuing fiscal year.
That performance formula and incentive package is then reviewed by the Committee
and is either accepted, amended or modified.
Two of the Named Executives, James A. Lane, Jr. and William S. Pegg, have
employment agreements with the Company that were first entered into as part of
the Company's acquisition of Chaparral Boats, Inc. on November 4, 1986. Under
these agreements, each individual receives an annual cash incentive bonus of 10
percent of pretax profit of Chaparral Boats, Inc. These incentive payments were
approximately 94 percent of the total cash compensation paid to these executives
in 1995. During 1995, these 2 executives received in excess of $1 million in
aggregate compensation (the maximum amount for which an employer may claim a
compensation deduction pursuant to Section 162(m) of the Internal Revenue Code
of 1986, as amended, unless certain performance related compensation exemptions
are met during one fiscal year.) The Company had obtained stockholder approval
of these agreements at the April 25, 1995 Stockholders' Meeting in order to
qualify for the performance related compensation exemption.
The other Named Executives participate in a variety of individualized
performance bonus plans designed to encourage achievement of short-term
objectives. These plans all have payouts subjectively based on net income,
budget objectives, and other individual specific performance objectives.
Subjective compensation decisions are based upon these specific performance
objectives, which relate to each executive improving the contribution of his
functional areas of responsibility to further enhance the earnings of the
Company. The Company's philosophy is that the executive should receive a bonus
only if certain performance targets are met. This means that a significant
portion of the compensation package is at risk. The performance bonus as a
percent of total compensation will vary in accordance with the type of executive
position, ranging up to 100 percent.
Richard A. Hubbell, the President of the Company earned a $126,000 bonus in
1995 under one of these plans.
STOCK BASED INCENTIVE PLANS
The 1994 Employee Stock Incentive Option Plan was approved by stockholders
at the April 26, 1994 meeting. There were no awards made under this plan during
1995.
CEO PAY
The 1995 cash compensation of R. Randall Rollins, Chairman and Chief
Executive Officer, was $340,000. The Committee feels that due to the significant
level of ownership in the Company, the Chief Executive Officer will not
participate in an incentive plan at this time. The Committee considers several
factors when determining the CEO's salary. These factors include long-term
growth in net income, stockholder value improvements as well as his individual
performance. The decision of the Committee is subjective and these factors are
not used in any specific formula or weighting. The CEO does not participate in
the deliberations of the Committee when his salary or incentive is determined.
8
<PAGE>
CONCLUSION
The Committee believes that this mix of conservative market-based salaries,
cash incentives for both long-term and short-term performance, and stock based
incentives for long-term performance in the Company represent a balance that
will motivate the executive team to continue to produce the best results
possible given the economic conditions and the cyclical nature of the industries
of the subsidiaries. The Committee further believes this program strikes an
appropriate balance between the interest of the Company in operating its
businesses and appropriate rewards based on shareholder value.
COMPENSATION COMMITTEE
Henry B. Tippie, Chairman
Wilton Looney
James B. Williams
COMMON STOCK PERFORMANCE
As part of the executive compensation information presented in this Proxy
Statement, the Securities and Exchange Commission requires a 5 year comparison
of the cumulative total stockholder return based on the performance of the stock
of the Company, assuming dividend reinvestment, as compared with both a broad
equity market index and an industry or peer group index. The indices included in
the following graph are the S & P 500 Index and a peer group which includes
those companies that are considered peers of the subsidiaries of the Company.
The companies included in the peer group have been weighted according to the
respective issuer's stock market capitalization at the beginning of each year.
The companies are Brunswick Corporation and Outboard Marine Corporation, which
compete with the Company's boat manufacturing subsidiary; and Weatherford
International, Inc. and Nowsco Well Service Company, which compete with each of
the 2 largest oil and gas services subsidiaries of the Company.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
RPC COMMON STOCK S&P 500 PEER GROUP
<S> <C> <C> <C>
90 100.00 100.00 100.00
91 98.55 130.37 124.90
92 76.81 140.41 151.71
93 98.55 154.56 186.19
94 88.41 156.60 183.56
95 105.80 214.86 238.01
</TABLE>
9
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to June 30, 1984, the Company was a wholly-owned subsidiary of
Rollins, Inc. ("Rollins"). On June 30, 1984, Rollins effected a spin-off
distribution to its stockholders of all of the outstanding shares of the Company
(the "Spin-off"). Messrs. Gary W. Rollins and R. Randall Rollins, named in the
table under "Capital Stock" on page 2, have substantially similar interests in
Rollins.
The Company receives certain administrative services from Rollins, and also
rents office space from Rollins. The service agreements between Rollins and the
Company provide for the provision of services on a cost reimbursement basis and
are terminable on six months notice. The services covered by these agreements
include office space, data processing, administration of certain employee
benefit programs, and other administrative services. Charges to the Company (or
to corporations which are subsidiaries of the Company) for such services and
rent aggregated $376,000 in 1995.
BENEFIT PLANS
The Company's Retirement Income Plan, effective July 1, 1984, is a trusteed
defined benefit pension plan. The amounts shown on the following table are those
annual benefits payable for life on retirement at age 65. The amounts computed
in this table assume: (a) that the participant remains in the service of the
Company until his normal retirement date at age 65; (b) that the participant's
earnings continue at the same rate as paid in the fiscal year ended December 31,
1995 during the remainder of his service until age 65; (c) that the normal form
of benefit is a single-life annuity, and (d) that the Plan continues without
substantial modification. The column entitled remuneration represents all
compensation in the Summary Compensation Table included herein.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
REMUNERATION 15 20 25 30 35
- ------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 45,000
200,000 45,000 60,000 75,000 90,000 90,000
300,000 67,500 90,000 112,500 135,000 135,000
400,000 90,000 120,000 150,000 180,000 180,000
500,000 112,500 150,000 187,500 225,000 225,000
600,000 135,000 180,000 225,000 270,000 270,000
700,000 157,500 210,000 262,500 315,000 315,000
800,000 180,000 240,000 300,000 360,000 360,000
900,000 202,500 270,000 337,500 405,000 405,000
1,000,000 225,000 300,000 375,000 450,000 450,000
</TABLE>
The above table does not reflect the Plan offset for Social Security average
earnings, the maximum benefit limitations under Section 415 of the Internal
Revenue Code, or the maximum pay limitation under Section 401(a)(17) of the
Internal Revenue Code.
Retirement income benefits are based on the average of the employee's
compensation from the Company for the five consecutive complete calendar years
of highest compensation during the last ten consecutive complete calendar years
("final average compensation") immediately preceding the employee's retirement
date or, if earlier, the date of his termination of employment. All full-time
corporate employees of the Company and its subsidiaries (other than employees
subject to collective bargaining agreements) are eligible to participate in the
Retirement Income Plan after completing 1 year of service as an employee. The
benefit formula is 1 1/2 percent of final average compensation less 3/4 percent
of final average FICA earnings multiplied by years of service (maximum 30
years). The Plan also provides reduced early retirement benefits under certain
conditions. In accordance with the Internal Revenue Code of 1986, as amended
(the "Code"), the maximum annual benefit that could be payable to a Retirement
Income Plan beneficiary in 1995 is $120,000. However, this limitation does not
affect previously accrued benefits of those individuals who became entitled to
benefits in excess of
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$120,000 prior to the effective date of the applicable provisions of the Tax
Equity and Fiscal Responsibility Act of 1982 and the Tax Reform Act of 1986. In
accordance with the Code (as amended by the Omnibus Budget Reconciliation Act of
1993), the maximum compensation recognized by the Retirement Income Plan was
$150,000 in 1995. Retirement benefits at the end of any calendar year will not
be reduced by any subsequent changes in the maximum compensation limit.
Participants in the Rollins, Inc. Retirement Income Plan who transferred their
employment to the Company as a result of the Spin-off participated immediately
in the Plan. The current credited years of service for the 5 individuals named
in the executive compensation table are: R. Randall Rollins -- 30, Bobby Joe
Cudd -- 18, Richard A. Hubbell -- 9, James A. Lane, Jr. -- 8, William S. Pegg --
8.
Effective July 1, 1984, the Company adopted a qualified retirement plan
designed to meet the requirements of Section 401(k) of the Internal Revenue Code
("401(k) Plan"). The only form of benefit payment under the 401(k) Plan from and
after October 24, 1995 is a single lump-sum payment equal to the balance in the
participant's account on the date the distribution is processed. Prior to such
date, the only form of benefit payment under the 401(k) Plan was a single
lump-sum payment equal to the balance in the participant's account on the
quarterly valuative date preceding the date of distribution. Under the 401(k)
Plan, the full amount of a participant's accrued benefit is payable upon his
termination of employment, attainment of age 59 1/2 (with respect to pre-tax
deferrals only), retirement, total and permanent disability, or death. Amounts
contributed to the accounts of Named Executives for 1995 under this plan are
reported in the "All Other Compensation" column of the Summary Compensation
Table included herein.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP served as the auditors for the Company for the fiscal
year ended December 31, 1995. As is its policy, upon the recommendation of the
Audit Committee, the Board of Directors shall select a firm of independent
public accountants for fiscal 1996. It is anticipated that a representative of
Arthur Andersen LLP will be present at the Annual Meeting to answer questions
and make a statement should such representative so desire.
SECTION 16 COMPLIANCE
The Company has completed a review of Forms 3, 4, and 5 and amendments
thereto furnished to the Company by all Directors, Officers and greater than 10
percent stockholders subject to the provisions of Section 16 of the Securities
Exchange Act of 1934. In addition, the Company has a written representation from
all Directors, Officers and greater than 10 percent stockholders from whom no
Form 5 was received, indicating that no Form 5 filing was required. Based solely
on this review, the Company believes that filing requirements of such persons
under Section 16 for the fiscal year ended December 31, 1995 have been
satisfied.
STOCKHOLDER PROPOSALS
Appropriate proposals of stockholders intended to be presented at the
Company's 1997 Annual Meeting of Stockholders must be received by the Company by
November 18, 1996 for inclusion in its proxy statement and form of proxy
relating to that meeting. If the date of the next annual meeting is advanced by
more than 30 calendar days or delayed by more than 90 calendar days from the
date of the annual meeting to which this proxy statement relates, the Company
shall, in a timely manner, inform its stockholders of the change and the date by
which proposals of stockholders must be received.
VOTING PROCEDURES AND VOTE REQUIRED
The Chairman of the Board of Directors of the Company will select a
representative of the Company's transfer agent as Inspector of the Election, to
determine the eligibility of persons present at the Meeting to vote and to
determine whether the name signed on each proxy card corresponds to the name of
a stockholder of the Company. The Inspector shall also determine whether or not
a
11
<PAGE>
quorum of the shares of the Company (consisting of a majority of the votes
entitled to be cast at the Meeting) exists at the Meeting. A majority of the
outstanding shares will constitute a quorum at the meeting. Abstentions and
broker non-votes are counted for purposes of determining the presence or absence
of a quorum for the transaction of business. If a quorum exists and a vote is
taken at the Meeting, the Inspector shall tabulate (i) the votes cast for or
against each proposal and (ii) the abstentions in respect of each proposal.
In accordance with the Delaware General Corporation Law, the election of the
nominees named herein as directors will require the affirmative vote of a
plurality of the votes cast by the shares of Company Common Stock entitled to
vote in the election provided that a quorum is present at the Meeting. In the
case of a plurality vote requirement (as in the election of directors), where no
particular percentage vote is required, the outcome is solely a matter of
comparing the number of votes cast in favor of a proposal to the number of votes
cast against the proposal, and hence only votes for or against the proposal (and
not abstentions or broker non-votes) are relevant to the outcome.
MISCELLANEOUS
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995, is being mailed to stockholders with this proxy statement.
Management knows of no business other than the matter set forth herein which
will be presented at the meeting. Inasmuch as matters not known at this time may
come before the meeting, the enclosed proxy confers discretionary authority with
respect to such matters as may properly come before the meeting; and it is the
intention of the persons named in the proxy to vote in accordance with their
best judgment on such matters.
BY ORDER OF THE BOARD OF DIRECTORS
Linda H. Graham, Secretary
Atlanta, Georgia
March 18, 1996
12
<PAGE>
RPC, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF RPC, INC.
FOR ANNUAL MEETING OF STOCKHOLDERS TUESDAY, APRIL 23, 1996, 9:00 A.M.
The undersigned hereby constitutes and appoints GARY W. ROLLINS, R.
RANDALL ROLLINS, and each of them, jointly and severally, proxies, with full
power of substitution, to vote all shares of Common Stock which the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be
held on April 23, 1996 at 9:00 A.M., at 2170 Piedmont Road, NE, Atlanta,
Georgia, or any adjournment thereof.
The undersigned acknowledges receipt of Notice of the aforesaid Annual
Meeting and Proxy Statement, each dated March 18, 1996, grants authority to
said proxies, or either of them, or their substitutes, to act in the absence
of others, with all the powers which the undersigned would possess if
personally present at such meeting and hereby ratifies and confirms all that
said proxies or their substitutes may lawfully do in the undersigned's name,
place and stead. The undersigned instructs said proxies, or either of them,
to vote as follows:
TRIANGLE FOLD AND DETACH HERE TRIANGLE
<PAGE>
1. FOR all Class I nominees: / /
FOR all Class I nominees,
EXCEPT AS INDICATED BELOW: / /
ABSTAIN from voting for the election of R. Randall Rollins,
Henry B. Tipple, James B. Williams and James A. Lane, Jr.,
as Class I Directors. / /
(INSTRUCTIONS: TO REFRAIN FROM VOTING FOR ANY INDIVIDUAL NOMINEE, WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW)
______________________________________________________________________________
2. ON ALL OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
ALL PROXIES SIGNED AND RETURNED WILL BE VOTED OR NOT VOTED IN ACCORDANCE WITH
YOUR INSTRUCTIONS, BUT THOSE WITH NO CHOICE WILL BE VOTED "FOR" THE
ABOVE-NAMED NOMINEES FOR DIRECTOR. THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY.
PROXY
Please sign below, date and return promptly.
_____________________________________________________
_____________________________________________________
(Signature)
Dated:_________________________________________, 1996
(Signature should conform to name and title stenciled
hereon. Executors, administrators, trustees, guardians
and attorneys should add their title upon signing.)
NO POSTAGE REQUIRED IF THIS PROXY IS RETURNED IN THE ENCLOSED ENVELOPE AND
MAILED IN THE UNITED STATES.
TRIANGLE FOLD AND DETACH HERE TRIANGLE
