def14a
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 |
OIL STATES INTERNATIONAL, 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)(4) 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:
|
|
|
SEC 1913 (02-02)
|
|
Persons who are to respond to the collection of information contained in this form are not required to
respond unless the form displays a currently valid OMB control number. |
OIL
STATES INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
To Be Held on May 17, 2011
To the Stockholders of
Oil States International, Inc.:
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of Stockholders
of Oil States International, Inc., a Delaware corporation (the
Company), will be held at the Hotel Granduca at 1080
Uptown Park Boulevard, Houston, Texas, 77056 on the
17th day of May, 2011 at 9:00 a.m. central time (the
Annual Meeting), for the following purposes:
(1) To elect three (3) Class I members of the
Board of Directors to serve until the 2014 Annual Meeting of
Stockholders (see page 3);
(2) To ratify the appointment of Ernst & Young
LLP as independent accountants for the year ended
December 31, 2011 (see page 35);
(3) Advisory vote on Executive Compensation (see
page 38);
(4) Advisory vote regarding frequency of Advisory vote on
Executive Compensation (see page 39); and
(5) To transact such other business as may properly come
before the Annual Meeting or any adjournments thereof.
The Company has fixed the close of business on March 31,
2011 as the record date for determining stockholders entitled to
notice of, and to vote at, the Annual Meeting and any
adjournments thereof. Stockholders who execute proxies solicited
by the Board of Directors of the Company retain the right to
revoke them at any time; unless so revoked, the shares of common
stock represented by such proxies will be voted at the Annual
Meeting in accordance with the directions given therein. If a
stockholder does not specify a choice on such stockholders
proxy, the proxy will be voted FOR the nominees for
director named in the attached Proxy Statement and
FOR the ratification of the appointment of the
independent accountants for the Company named in such Proxy
Statement. The list of stockholders of record of the Company may
be examined at the offices of the Company beginning on
April 1, 2011 and at the Annual Meeting.
Further information regarding the Annual Meeting is set forth in
the attached Proxy Statement.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE SHAREHOLDERS MEETING TO BE HELD ON MAY 17,
2011: A COPY OF THIS PROXY STATEMENT, PROXY VOTING CARD AND THE
COMPANYS 2011 ANNUAL SHAREHOLDERS REPORT ARE
AVAILABLE AT HTTP://WWW.OILSTATESINTL.COM/PROXYMATERIALS
By Order of the Board of Directors
Sincerely,
Robert W. Hampton
Corporate Secretary
Houston, Texas
April 1, 2011
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING.
HOWEVER, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN
PERSON, PLEASE COMPLETE, DATE, SIGN AND MAIL PROMPTLY THE
ENCLOSED PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE. THE PROXY
IS REVOCABLE AND WILL NOT BE USED IF YOU ARE PRESENT AT THE
ANNUAL MEETING AND VOTE YOUR SHARES IN PERSON.
OIL
STATES INTERNATIONAL, INC.
PROXY
STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS OF
To Be Held on Thursday, May 17, 2011
TABLE OF
CONTENTS
|
|
|
|
|
|
|
Page
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
3
|
|
|
|
|
4
|
|
|
|
|
7
|
|
|
|
|
9
|
|
|
|
|
14
|
|
|
|
|
14
|
|
|
|
|
22
|
|
|
|
|
23
|
|
|
|
|
25
|
|
|
|
|
26
|
|
|
|
|
27
|
|
|
|
|
28
|
|
|
|
|
28
|
|
|
|
|
29
|
|
|
|
|
30
|
|
|
|
|
32
|
|
|
|
|
34
|
|
|
|
|
35
|
|
|
|
|
35
|
|
|
|
|
36
|
|
|
|
|
38
|
|
|
|
|
39
|
|
|
|
|
39
|
|
|
|
|
40
|
|
OIL
STATES INTERNATIONAL, INC.
Three
Allen Center
333 Clay Street, Suite 4620
Houston, Texas 77002
PROXY
STATEMENT
FOR THE
ANNUAL MEETING OF STOCKHOLDERS
SOLICITATION
The following information is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of
Oil States International, Inc., a Delaware corporation (the
Company), to be voted at the annual meeting of
stockholders of the Company (the Annual Meeting),
which will be held at the Hotel Granduca at 1080 Uptown Park
Boulevard, Houston, Texas, 77056, on the 17th day of May,
2011, at 9:00 a.m. central time, for the following purposes:
(1) To elect three (3) Class I members of the
Board of Directors to serve until the 2014 Annual Meeting of
Stockholders;
(2) To ratify the appointment of Ernst & Young
LLP as independent accountants for the year ended
December 31, 2011;
(3) Advisory vote on Executive Compensation;
(4) Advisory vote regarding frequency of Advisory vote on
Executive Compensation; and
(5) To transact such other business as may properly come
before the Annual Meeting or any adjournments or postponements
thereof.
You may revoke your proxy at any time before it is exercised by:
(1) sending a written statement revoking your proxy to
Robert W. Hampton, Oil States International, Inc., Three Allen
Center, 333 Clay Street, Suite 4620, Houston, Texas 77002;
(2) submitting a properly signed proxy with new voting
instructions with a later date; or (3) voting in person at
the Annual Meeting. If your shares are held in street name and
you vote by proxy, you may change your vote by submitting new
voting instructions to your bank, banker or nominee in
accordance with the entitys procedures. If you return your
signed proxy to us before the Annual Meeting, we will vote your
shares as you direct. If you do not specify on your proxy card
how you want to vote your shares, we will vote them
for the election of all nominees for director as set
forth under Proposal 1: Election of Directors
on page 3; for the ratification of the
appointment of Ernst & Young LLP as independent
accountants as set forth under Proposal 2:
Ratification of Appointment of Independent Accountants on
page 35; for the approval of the
Proposal 3 Advisory Vote on Executive
Compensation on page 38 and for a one
year frequency as set forth under
Proposal 4 Advisory Vote regarding
Frequency of Advisory Vote on Executive Compensation on
page 39. If any other business is brought before the
meeting, any unspecified proxies will be voted in accordance
with the judgment of the persons voting those shares.
The cost of soliciting proxies will be paid by the Company. In
addition to the use of the mail, proxies may be solicited by the
directors, officers and employees of the Company without
additional compensation, by personal interview, telephone,
telegram, or other means of electronic communication.
Arrangements also may be made with brokerage firms and other
custodians, dealers, banks and trustees, or their nominees who
hold the voting securities of record, for sending proxy
materials to beneficial owners. Upon request, the Company will
reimburse the brokers, custodians, dealers, banks, or their
nominees for their reasonable
out-of-pocket
expenses. In addition, the Company has retained
Morrow & Co., LLC to assist in the solicitation of
proxies and to serve as the inspector of election for the Annual
Meeting, for which the Company will pay an estimated fee of
$6,500.
The Companys Annual Report on
Form 10-K
for the year ended December 31, 2010, is being mailed with
this Proxy Statement to all stockholders entitled to vote at the
Annual Meeting but does not constitute a part of the proxy
soliciting material.
This Proxy Statement and the enclosed form of proxy were mailed
to stockholders beginning April 15, 2011.
OUTSTANDING
VOTING SECURITIES AND VOTING RIGHTS
Oil States International, Inc., a Delaware corporation,
(Company, Oil States, we,
us, and our refer to Oil States
International, Inc. and its subsidiaries), has one outstanding
class of security that entitle holders to vote at meetings of
the Companys stockholders, its common stock, par
value $.01 per share. Each share of common stock outstanding on
the record date is entitled to one vote. Stockholders may not
cumulate their votes.
The record date for the stockholders entitled to notice of and
to vote at the Annual Meeting is the close of business on
March 31, 2011. At the record date 51,169,512 shares
of common stock were outstanding and entitled to be voted at the
Annual Meeting.
The presence, in person or by proxy, of the holders of a
majority of the votes eligible to be cast at the Annual Meeting
is necessary to constitute a quorum at the Annual Meeting. If a
quorum is not present, the stockholders entitled to vote who are
present in person or by proxy at the Annual Meeting have the
power to adjourn the Annual Meeting from time to time, without
notice other than an announcement at the Annual Meeting, until a
quorum is present. At any adjourned Annual Meeting at which a
quorum is present, any business may be transacted that might
have been transacted at the Annual Meeting as originally
notified.
Directors will be elected by a plurality of the votes present
and entitled to be voted at the Annual Meeting. However, in
accordance with the Companys corporate governance
guidelines, any director who does not receive a majority of
votes cast in an uncontested election is required to tender his
or her resignation for consideration of the Board of Directors.
Ratification of the selection of the Companys auditors
will require the affirmative vote of the holders of a majority
of the shares present and entitled to be voted at the Annual
Meeting. An automated system that the Companys transfer
agent administers will tabulate the votes. Brokers who hold
shares in street name for customers are required to vote shares
in accordance with instructions received from the beneficial
owners. Brokers are permitted to vote on discretionary items if
they have not received instructions from the beneficial owners,
but they are not permitted to vote (a broker
non-vote) on non-discretionary items absent instructions
from the beneficial owner. An uncontested director election,
like ours in 2011, is not a routine discretionary
matter where a broker is allowed to vote, absent instructions
from beneficial owners. Abstentions and broker non-votes will
count in determining whether a quorum is present at the Annual
Meeting. Both abstentions and broker non-votes will not have any
effect on the outcome of voting on director elections. For
purposes of voting on the ratification of the selection of
auditors and the advisory votes on executive compensation and
regarding the frequency of advisory vote on executive
compensation, broker non-votes are not counted as votes with
respect to the proposal. Abstentions occur when stockholders are
present at the annual meeting but choose to withhold their vote
for any of the matters upon which the stockholders are voting.
Broker non-votes occur when nominees (such as banks
and brokers) that hold shares on behalf of beneficial owners do
not receive voting instructions from the beneficial owners
before the meeting and do not have discretionary authority to
vote those shares under the applicable rules of the New York
Stock Exchange (the NYSE).
A proxy in the accompanying form that is properly signed and
returned will be voted at the Annual Meeting in accordance with
the instructions on the proxy. Any properly executed proxy on
which no contrary instructions have been indicated about a
proposal will be voted as follows with respect to the proposal:
FOR the election of the three persons named in this Proxy
Statement as the Board of Directors nominees for election
to the Board of Directors; FOR the ratification of the selection
of Ernst & Young LLP as the Companys independent
accountants; for the approval of the advisory vote on executive
compensation; for a one year frequency for the advisory vote on
executive compensation; and in accordance with the discretion of
the holders of the Proxy with respect to any other business that
properly comes before the stockholders at the Annual Meeting.
The Board of Directors knows of no matters, other than those
previously stated, to be presented for consideration at the
Annual Meeting. The persons named in the accompanying proxy may
also, in their discretion, vote the proxy to adjourn the Annual
Meeting from time to time.
A copy of the list of stockholders entitled to vote at the
Annual Meeting has been available for inspection by qualified
stockholders for proper purposes at the offices of the Company
during normal business hours beginning on April 1, 2011 and
will be available at the Annual Meeting.
2
PROPOSAL 1:
ELECTION
OF DIRECTORS
The Board of Directors is currently comprised of nine members.
The nine members are divided into three classes having three
members in Class I, Class II and Class III. Each
class is elected for a term of three years, so that the term of
one class of directors expires at each annual meeting of
stockholders. The term of the three current Class I
directors will expire at the Annual Meeting. The term of the
Class II directors expires at the annual meeting of
stockholders to be held in 2012, and the term of the
Class III directors expires at the Annual Meeting of
Stockholders to be held in 2013.
Nominees
Three directors are to be elected to serve as Class I
directors at the Annual Meeting. Based on the recommendation of
our Nominating & Corporate Governance Committee, the
Board of Directors has nominated Christopher T. Seaver, Douglas
E. Swanson and Cindy B. Taylor to fill the three expiring
Class I positions on the Board of Directors, to hold office
for three-year terms expiring at the Annual Meeting of
Stockholders in 2014, and until their respective successors have
been duly elected and qualified, or until their earlier death,
resignation or removal. All of the director nominees,
Messrs. Seaver and Swanson and Mrs. Taylor, presently
serve as Class I directors. Stockholder nominations will
not be accepted for filling Board of Directors seats at the
Annual Meeting because our bylaws require advance notice for
such a nomination, the time for which has passed. Our Board of
Directors has determined that Messrs. Seaver and Swanson
are independent as that term is defined by the
applicable NYSE listing standards. See
Director Independence below for a
discussion of director independence determinations. The enclosed
proxy (unless otherwise directed, revoked or suspended) will be
voted FOR the election of the three nominees for director.
A plurality of votes cast is required for the election of
directors. Our Corporate Governance Guidelines require any
director who does not receive a majority of the votes cast in an
uncontested election to tender their resignation for the
consideration of the Board of Directors. Each of the nominees
has consented to serve as director if so elected. If any nominee
should be unable to serve as a director, the shares represented
by proxies will be voted for the election of a substitute
nominated by the Board of Directors to replace such nominee.
The Board of Directors unanimously recommends that
stockholders vote FOR the election of each of the nominees.
3
Executive
Officers and Directors
Set forth below are the names of, and certain information with
respect to, the Companys executive officers and directors,
including the three nominees for election to the Class I
positions on the Board of Directors.
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
|
|
|
Names
|
|
Class
|
|
Age
|
|
Position(s)
|
|
Stephen A. Wells
|
|
|
III
|
|
|
|
67
|
|
|
Chairman of the Board
|
Cindy B. Taylor*
|
|
|
I
|
|
|
|
49
|
|
|
Director, Chief Executive Officer and President
|
Bradley J. Dodson
|
|
|
|
|
|
|
37
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
Robert W. Hampton
|
|
|
|
|
|
|
59
|
|
|
Senior Vice President, Accounting and Corporate Secretary
|
Christopher E. Cragg
|
|
|
|
|
|
|
50
|
|
|
Senior Vice President, Operations
|
Charles J. Moses
|
|
|
|
|
|
|
66
|
|
|
Senior Vice President, Offshore Products and President, Oil
States Industries, Inc.
|
Ron R. Green
|
|
|
|
|
|
|
61
|
|
|
Senior Vice President, Accommodations and President and Chief
Executive Officer, PTI Group, Inc.
|
Lias J. Steen
|
|
|
|
|
|
|
52
|
|
|
Senior Vice President, Human Resources and Legal
|
Martin A. Lambert
|
|
|
III
|
|
|
|
55
|
|
|
Director
|
S. James Nelson
|
|
|
II
|
|
|
|
69
|
|
|
Director
|
Mark G. Papa
|
|
|
III
|
|
|
|
64
|
|
|
Director
|
Gary L. Rosenthal
|
|
|
II
|
|
|
|
61
|
|
|
Director
|
Christopher T. Seaver*
|
|
|
I
|
|
|
|
62
|
|
|
Director
|
Douglas E. Swanson*
|
|
|
I
|
|
|
|
72
|
|
|
Director
|
William T. Van Kleef
|
|
|
II
|
|
|
|
59
|
|
|
Director
|
|
|
|
* |
|
Nominee for election as Class I director at the Annual
Meeting. |
Stephen A. Wells has served as a Director of our Company
since April 1996 and as Chairman since May 2006. Mr. Wells
is the President of Wells Resources, Inc., a privately owned
oil, gas and ranching company, and has served in that position
since 1983. From October 1993 to February 1996, he was a
director and Chief Executive Officer of Coastwide Energy
Services, Inc., a Gulf Coast marine terminal operator. From
March 1992 to September 1994, he was a director and Chief
Executive Officer of Grasso Corporation, an oil and gas
production management services company. Mr. Wells served as
a director and a member of the audit and executive committees of
Pogo Producing Company (NYSE: PPP), an oil and gas exploration
and production company until it was acquired in November 2007.
Mr. Wells was a director and a member of the audit
committee of Crosstex Energy LP (NASDAQ: XTEX) until December
2005.
Cindy B. Taylor is the Chief Executive Officer and
President of our Company and is a member of the Companys
Board of Directors. She has held these positions since May 2007.
From May 2006 until May 2007, Mrs. Taylor served as
President and Chief Operating Officer of our Company. From May
2000 until May 2006, Mrs. Taylor was the Senior Vice
President Chief Financial Officer and Treasurer of
our Company. From August 1999 to May 2000, Mrs. Taylor was
the Chief Financial Officer of L.E. Simmons &
Associates, Incorporated. Mrs. Taylor served as the Vice
President Controller of Cliffs Drilling Company from
July 1992 to August 1999 and held various management positions
with Ernst & Young LLP, a public accounting firm, from
January 1984 to July 1992. She received a B.B.A. degree from
Texas A&M University and is a Certified Public Accountant.
Mrs. Taylor served on the Board of Boots & Coots
International Well Control, Inc., (AMEX: WEL), an oilfield
services company that provided integrated pressure control and
related services worldwide from March 2006 to May 2008.
Mrs. Taylor was a director and served on the audit and
finance committees of Global Industries LTD (NASDAQ: GLBL), a
company which provides worldwide construction and support
services to the offshore oil and
4
gas industry, from May 2006 until May 2009. She is currently a
director of Tidewater Inc. (NYSE: TDW), a global provider of
vessels serving the offshore energy industry. Mrs. Taylor
currently serves on the audit and finance committees of
Tidewater Inc.
Bradley J. Dodson is the Senior Vice President, Chief
Financial Officer and Treasurer of our Company. He has held this
position since May 2010. Mr. Dodson has held several
positions with our Company since joining in March 2001, most
recently serving as Vice President, Chief Financial Officer and
Treasurer from May 2006 to April 2010 and Vice President,
Corporate Development from March 2003 to May 2006. From June
1998 to March 2001, Mr. Dodson served in several positions
for L.E. Simmons & Associates, Incorporated, a private
equity firm specializing in oilfield service investments. From
July 1996 to June 1998, Mr. Dodson worked in the mergers
and acquisitions group of Merrill Lynch & Co. He holds
a M.B.A. degree from the University of Texas at Austin and a
B.A. degree in economics from Duke University.
Robert W. Hampton is the Senior Vice President,
Accounting and Corporate Secretary of our Company. He has held
this position since May 2006. From February 2001 until May 2006,
Mr. Hampton was the Vice President Finance and
Accounting and Secretary of our Company. From February 1998 to
February 2001, Mr. Hampton served as Vice President and
Chief Financial Officer of HWC Energy Services, Inc., a
predecessor of our Company (HWC). Mr. Hampton
joined HWC from Tidewater Inc., an offshore service vessel
operator, where he was based in Aberdeen and was Area Manager
for the North Sea Operations from March 1996 to February 1998.
He served as Vice President, Treasurer and Chief Financial
Officer of Hornbeck Offshore, an offshore service vessel
operator, from 1990 to March 1996, when it was acquired by
Tidewater. Mr. Hampton worked at Price Waterhouse, a public
accounting firm, from 1973 to 1986. Mr. Hampton is a
Certified Public Accountant and received his B.S. degree from
Pennsylvania State University.
Christopher E. Cragg is the Senior Vice President,
Operations of our Company. He has held this position since May
2006. From February 2001 until May 2006, Mr. Cragg was the
Vice President Tubular Services of our Company.
Mr. Cragg was Executive Vice President Chief
Financial Officer of Sooner Inc., a predecessor of our Company
(Sooner), from December 1999 to February 2001.
Mr. Cragg also served as President of Sooner from October
2003 until May 2006. From April 1994 to June 1999, he was Vice
President and Controller of Ocean Energy, Inc., an independent
oil and gas exploration and production company, and its
predecessor companies. Mr. Cragg served as
Manager Internal Audit with Cooper Industries, a
manufacturer of diversified products, from April 1993 to April
1994 and as a senior manager with Price Waterhouse, a public
accounting firm, from August 1983 to April 1993. Mr. Cragg
is a director and serves on the audit and compensation
committees of Powell Industries, Inc. (NASDAQ: POWL), a company
that manufactures and services electrical energy systems. He
received a B.B.A. degree from Southwestern University and is a
Certified Public Accountant.
Lias J. Steen serves as the Senior Vice President, Human
Resources and Legal for our Company since February 2011. From
June 2008 to January 2011 he was the Vice President, Human
Resources and Legal. A native of Cuero, Texas, Jeff Steen has
been involved in the energy service business in various
capacities since 1978, starting his career as a petroleum
landman. Mr. Steen spent 10 years with Camco
International Inc. as Assistant General Counsel and General
Counsel. Following his tenure at Camco, Mr. Steen served
for 5 years as the General Counsel for North America for
Schlumberger, then, from December 2002 to April 2008, he served
as Vice President of Legal and Human Resources at Grant Prideco.
Mr. Steen is a graduate of Texas A&M University with a
B.S. in Agricultural Economics and received his Juris Doctor
from South Texas College of Law.
Charles J. Moses has been the Companys Senior Vice
President, Offshore Products business since January 1,
2010. Mr. Moses also serves as President of Oil States
Industries, Inc., a wholly owned subsidiary of the Company.
Mr. Moses has served various positions during his career at
the Companys offshore products business spanning the past
38 years. He was the Senior Vice President of Oil States
Industries, Inc., the Companys offshore products
subsidiary from 1996 to December 2009.
Ron R. Green is the Senior Vice President, Accommodations
and President and Chief Executive Officer PTI Group
Inc. (PTI), a wholly owned subsidiary of our
Company. He has held this position since April 2006. From
December 2005 to March 2006 he was Senior Vice President and
Chief Operating Officer of PTI. From November 2004 to November
2005, Mr. Green served as Vice President, Premium Camp
Services for PTI. Prior to joining PTI, Mr. Green served as
Vice President and General Manager of ESS Remote Site Services,
a division of Compass
5
Group PLC from October 1995 to August 2003. From 1975 to 1995,
Mr. Green held various senior executive positions in the
accommodations industry.
Martin A. Lambert has served as a Director of our Company
since February 2001. Mr. Lamberts principal
occupation since November 1, 2008 has been as Chief
Executive Officer, Swan Hills Synfuels LP, an in-situ coal
gasification company. Prior thereto, Mr. Lambert served as
a founder and managing director of Matco Capital Ltd., a private
equity firm focused in the energy sector, since mid-2002.
Mr. Lambert was a partner in the Canadian law firm Bennett
Jones LLP from March 1987 to March 2007 and served as the Chief
Executive Officer of that firm from 1996 to 2000. He served as a
Director of Calfrac Well Services Ltd., from March 2004 to May
2010. Mr. Lambert currently is a director of Zedi, Inc.
(CN: ZED), a public company involved in Canadian, U.S. and
other international oilfield services. He presently serves on
the compensation committee and is Chairman of the Governance and
Nominating Committee of Zedi, Inc. Mr. Lambert received his
LLB degree from the University of Alberta in 1979.
S. James Nelson has served as a Director of our
Company since July 2004. In 2004, he retired, after
15 years of service, from Cal Dive International, Inc.
(now known as Helix Energy Solutions Group, Inc.), a marine
contractor and operator of offshore oil and natural gas
properties and production facilities, where he was a founding
shareholder, Chief Financial Officer from 1990 to 2000, and
director (1990 2004) and director and Vice
Chairman from 2000 to 2004. From 1985 to 1988, Mr. Nelson
was a Senior Vice President and Chief Financial Officer of
Diversified Energies, Inc., (NYSE: DEI). From 1980 to 1985,
Mr. Nelson served as Chief Financial Officer of Apache
Corporation (NYSE: APA), an oil and gas exploration and
production company. From 1966 to 1980, Mr. Nelson was
employed with Arthur Andersen L.L.P., where, from 1976 to 1980,
he was a partner serving on the firms worldwide oil and
gas industry team. He received a B.S. in Accounting from Holy
Cross College and a M.B.A. degree from Harvard University.
Mr. Nelson is also a Certified Public Accountant.
Mr. Nelson is a director and a member of the audit
committee of ION Geophysical Corp. (formerly Input/Output, Inc.)
(NYSE: IO), a seismic services provider; W&T Offshore, Inc.
(NYSE: WTI), an oil and gas exploration and production company
where he is a member of the audit and compensation committees;
and Genesis Energy LP (AMEX: GEL), a U.S. based mid-stream
pipeline transportation, refinery services, industrial gases and
supply and logistics company where he is a member of the audit
committee; and, from 2005 until the companys sale in 2008,
he was also a member of the board of directors and audit and
compensation committees of Quintana Maritime Ltd. (NASDAQ:
QMAR), an international provider of dry bulk cargo marine
transportation services.
Mark G. Papa has served as a Director of our Company
since February 2001. Mr. Papa has served as Chairman of the
Board and Chief Executive Officer of EOG Resources, Inc. (NYSE:
EOG), an oil and gas exploration and production company, since
August 1999. From February 1994 to August 1999, he held a number
of management positions with EOG Resources, Inc. He has a
petroleum engineering degree from the University of Pittsburgh
and a M.B.A. degree from the University of Houston.
Gary L. Rosenthal has served as a Director of our Company
since February 2001. Mr. Rosenthal has been a partner in
The Sterling Group, L.P., a private equity firm since January
2005. Mr. Rosenthal served as Chairman of the Board of
Hydrochem Holdings, Inc. from May 2003 until December 2004. From
August 1998 to April 2001, he served as Chief Executive Officer
of AXIA Incorporated, a diversified manufacturing company. He
holds J.D. and A.B. degrees from Harvard University.
Christopher T. Seaver has served as Director of our
Company since May 2008. Mr. Seaver served as the President
and Chief Executive Officer and a director of Hydril Co.
(Hydril) from February 1997 until Hydril was
acquired in May 2007 at which point he retired. From 1993 until
1997, Mr. Seaver served as President of Hydril.
Mr. Seaver joined Hydril in 1985 and served as Executive
Vice President in charge of Hydrils premium connection and
pressure control businesses prior to February 1993. Prior to
joining Hydril, Mr. Seaver was a corporate and securities
attorney for Paul, Hastings, Janofsky & Walker, and
was a Foreign Service Officer in the U.S. Department of
State with postings in Kinshasa, Republic of Congo and Bogota,
Colombia. He holds a B.A. in economics from Yale University and
M.B.A. and J.D. degrees from Stanford University.
Mr. Seaver is a director and member of the audit committee
and nominating and corporate governance committee of Exterran
Holdings, Inc. (NYSE: EXH), a company that sells, operates and
maintains compression equipment used in the oil and gas industry
worldwide. Mr. Seaver is on the board of directors and is a
member of the audit committee of McCoy Corporation (TSX: MCB),
6
a company that manufactures drilling and completion equipment
and designs and manufactures heavy-duty trailers for the oil and
gas sector in Canada and internationally. Mr. Seaver is on
the board of directors of Innovative Wireline Solutions, a
start-up
wireline services business serving oil and gas operators in
western Canada.
Douglas E. Swanson has served as a Director of our
Company since February 2001 and served as our Chief Executive
Officer from February 2001 until he retired in April 2007. From
January 1992 to August 1999, Mr. Swanson served as
President and Chief Executive Officer of Cliffs Drilling
Company, a contract drilling company. He holds a B.A. degree
from Cornell College and is a Certified Public Accountant.
Mr. Swanson was a director and member of the compensation
committee of Flint Energy Services, Ltd., (Toronto: FEX: TO) a
Canadian integrated midstream oil and gas production services
provider from April 2000 to May 2010. He was Chairman of the
Board of Directors of Boots and Coots International Well
Control, Inc. (AMEX: WEL), an oilfield services company that
provided integrated pressure control and related services
worldwide from March 2006 to September 2010.
William T. Van Kleef has served as a Director of our
Company since May 2006. Mr. Van Kleef has served in
executive management positions at Tesoro Corporation
(Tesoro) (NYSE: TSO) from 1993 until he retired in
March 2005, most recently as Tesoros Executive Vice
President and Chief Operating Officer. During his tenure at
Tesoro, Mr. Van Kleef held various positions, including
President, Tesoro Refining and Marketing, and Executive Vice
President and Chief Financial Officer. Before joining Tesoro,
Mr. Van Kleef, a Certified Public Accountant, served in
various financial and accounting positions with Damson Oil from
1982 to 1991, most recently as Senior Vice President and Chief
Financial Officer. Mr. Van Kleef serves on the board of
directors and the audit committee of Noble Energy (NYSE: NBL),
an independent oil and gas company.
CORPORATE
GOVERNANCE
Corporate
Governance Guidelines
The Company has adopted corporate governance guidelines entitled
Corporate Governance Guidelines, which are available
at www.oilstatesintl.com by first clicking Corporate
Governance and then Corporate Governance
Guidelines. These guidelines were adopted by the Board of
Directors to best ensure that the Board of Directors is
independent from management, that the Board of Directors
adequately performs its function as the overseer of management
and to help ensure that the interests of the Board of Directors
and management are aligned with the interests of the
stockholders.
Board of
Directors Leadership
Since the Companys initial public offering in 2001, the
Chairman of the Board and Chief Executive Officer roles have
been split with the Chairman of the Board role being filled by a
non-executive member of the Board of Directors. We believe the
separation of these two positions leads to a strong independent
leadership structure.
Corporate
Code of Business Conduct and Ethics
All directors, officers and employees of Oil States must act
ethically at all times and in accordance with the policies
comprising Oil States ethics policy entitled Corporate
Code of Business Conduct and Ethics
(Conduct & Ethics Code). This policy is
available at the Companys web site www.oilstatesintl.com
by first clicking Corporate Governance and then
Corporate Code of Business Conduct and Ethics.
Substantially all of our employees are required to complete
online training on an annual basis which includes a review of
the Conduct and Ethics Code policy and an acknowledgement that
the employee has read and understands the policy. The Company
has a Compliance Committee composed of key employees that meets
periodically to assess efforts and processes to ensure
compliance with laws and regulations to which the Company is
subject.
Director
Resignation Policy
If a directors principal occupation or business
association changes substantially during his or her tenure as a
director, that director is required by our Corporate Governance
Guidelines to inform the Chairman of the
7
Nominating & Corporate Governance Committee of the
change and tender his or her resignation to the Committee for
consideration. Such resignation shall not be effective unless
and until the Board of Directors chooses to accept the
resignation in accordance with the Companys Corporate
Governance Guidelines. While not necessarily resulting in a
resignation, the offer will provide the Nominating &
Corporate Governance Committee the opportunity to consider the
appropriateness of continued Board of Directors membership and
make a recommendation to the Board of Directors as to the
directors continuation. The Nominating &
Corporate Governance Committee will recommend to the Board of
Directors the action, if any, to be taken with respect to the
resignation, and the Board of Directors will consider whether
the change in the directors professional responsibilities
directly or indirectly impacts that persons ability to
fulfill directorship obligations.
Similarly, our Corporate Governance Guidelines require a
director who does not receive a majority of the votes cast in an
uncontested election to tender their resignation for
consideration of the Companys Board of Directors.
Director
Independence
To qualify as independent under the NYSE listing
standards, a director must meet objective criteria set forth in
the NYSE listing standards, and the Board of Directors must
affirmatively determine that the director has no material
relationship with us (either directly or as a stockholder or
officer of an organization that has a relationship with us) that
would interfere with his or her exercise of independent judgment
in carrying out his or her responsibilities as a director.
The Board of Directors reviews all direct or indirect business
relationships between each director (including his or her
immediate family) and our Company, as well as each
directors relationships with charitable organizations, to
assess director independence as defined in the listing standards
of the NYSE. The NYSE listing standards include a series of
objective tests, such as that the director is not an employee of
our Company and has not engaged in various types of business
dealings with our Company. In addition, as further required by
the NYSE, the Board of Directors has made a subjective
determination as to each independent director that no material
relationships exist which, in the opinion of the Board of
Directors, would interfere with the exercise of his or her
independent judgment in carrying out the responsibilities of a
director. When assessing the materiality of a directors
relationship with us, the Board of Directors considers the issue
not merely from the standpoint of the director, but also from
the standpoint of the persons or organizations with which the
director has an affiliation. The Board of Directors has
determined that all of our directors, except for Cindy Taylor,
our current President and Chief Executive Officer, qualify as
independent in accordance with NYSE listing
standards.
In particular, in 2011, the Board of Directors evaluated Mark
Papas position as Chairman and Chief Executive Officer of
EOG Resources, Inc. (EOG), even though EOG only
purchased products and services from us in 2010 in an amount
equal to less than 1% of EOGs 2010 revenues. Our Board of
Directors has determined that our relationship with EOG is not
material to the independence of Mr. Papa.
Policies
and Procedures with Respect to Related Party Transactions and
Conflicts of Interest
We review all relationships and transactions in which we and our
directors and executive officers or their immediate family
members are participants to determine whether such persons have
a direct or indirect material interest. Our Corporate
Secretarys office is primarily responsible for the
development and implementation of processes and controls to
obtain information from the directors and executive officers
with respect to related person transactions and for then
determining, based on the facts and circumstances, whether we or
a related person has a direct or indirect material interest in
the transaction. As required under the rules of the Securities
and Exchange Commission (the SEC), transactions that
are determined to be directly or indirectly material to us or a
related person are filed with the SEC when required, and
disclosed in our proxy statement.
Our Conduct and Ethics Code prohibits conflicts of interest. Any
waivers of these guidelines must be approved by the Board of
Directors. Under the Conduct & Ethics Code, conflicts
of interest occur when private or family interests interfere in
any way, or even appear to interfere, with the interests of our
Company. Our prohibition on conflicts of interest under the
Conduct & Ethics Code includes related person
transactions.
8
We have multiple processes for reporting conflicts of interests,
including related person transactions. Under the
Conduct & Ethics Code, all directors and employees are
required to report any actual or apparent conflict of interest,
or potential conflict of interest, to their supervisors. Any
transaction involving related persons must be reported in
writing by our division executives as part of their quarterly
representation letter. This information is then reviewed by
disinterested members of our Nominating & Corporate
Governance Committee, our Board of Directors or our independent
registered public accounting firm, as deemed appropriate, and
discussed with management. As part of this review, the following
factors are generally considered:
|
|
|
|
|
the nature of the related persons interest in the
transaction;
|
|
|
|
the material terms of the transaction, including, without
limitation, the amount and type of transaction;
|
|
|
|
the importance of the transaction to the related person;
|
|
|
|
the importance of the transaction to us;
|
|
|
|
whether the transaction would impair the judgment of a director
or executive officer to act in the best interest of our Company;
|
|
|
|
whether the transaction might affect the status of a director as
independent under the independence standards of the
NYSE; and
|
|
|
|
any other matters deemed appropriate with respect to the
particular transaction.
|
Ultimately, all material related party transactions must be
approved or ratified by the Nominating & Corporate
Governance Committee of our Board of Directors. Any member of
the Nominating & Corporate Governance Committee who is
a related person with respect to a transaction is recused from
the review of the transaction.
In addition, we annually distribute a questionnaire to our
executive officers and members of our Board of Directors
requesting certain information regarding, among other things,
their immediate family members, employment and beneficial
ownership interests. This information is then reviewed for any
conflicts of interest under the Conduct & Ethics Code.
We also have other policies and procedures to prevent conflicts
of interest, including related person transactions. For example,
the charter of our Nominating & Governance Committee
requires that the members of such committee assess the
independence of the non-management directors at least annually,
including a requirement that it determine whether or not any
such directors have a material relationship with us, either
directly or indirectly, as defined therein and as further
described above under Director
Independence.
To establish restrictions with regard to corporate participation
in the political system as imposed by law, the following
guidelines are contained in our Conduct and Ethics Code:
|
|
|
|
|
No funds, assets, or services of the Company will be used for
political contributions, directly or indirectly, unless allowed
by applicable foreign and U.S. law and approved in advance
by the Board of Directors.
|
|
|
|
Company contributions to support or oppose public referenda or
similar ballot issues are only permitted with advance approval
of the Board of Directors.
|
|
|
|
Employees, if eligible under applicable foreign and
U.S. law, may make political contributions through legally
established Company sponsored and approved political support
funds. Any such personal contribution is not a deductible
expense for federal or other applicable income tax purposes and
is not eligible for reimbursement by the Company as a business
expense. To the extent permitted by law, the Companys
resources may be used to establish and administer a political
action committee or separate segregated fund. All proposed
activities shall be submitted for the review of, and approval
by, the Board of Directors prior to their implementation.
|
Committees
and Meetings
The Board of Directors has established three standing
committees: the Audit Committee, the Compensation Committee and
the Nominating & Corporate Governance Committee.
9
Audit
Committee
The Companys Audit Committee presently consists of
Messrs. Van Kleef, Nelson, Rosenthal and Seaver each of
whom is independent, as such term is defined in Section 10A of
the Securities Exchange Act of 1934, as amended (the
Exchange Act), and in the applicable NYSE listing
standards. Mr. Rosenthal will be resigning from this
committee and Mr. Swanson will become a member of the Audit
Committee effective April 27, 2011. The Audit Committee
operates under a written charter as amended and restated by the
Board of Directors effective as of May 15, 2008. A copy of
the charter is available on our website, www.oilstatesintl.com,
by first clicking Corporate Governance and then
Audit Committee under the Committee Charters heading
on the right side of the page. The Audit Committee, which is
chaired by Mr. Van Kleef, meets separately with
representatives of the Companys independent auditors, the
Companys internal audit personnel and with representatives
of senior management in performing its functions. The Audit
Committee reviews the general scope of audit coverages, the fees
charged by the independent auditors, matters relating to
internal control systems and other matters related to accounting
and reporting functions. The Board of Directors has determined
that all of the present members of the Audit Committee and
Mr. Swanson are financially literate and that
Messrs. Van Kleef, Nelson, Seaver and Swanson have
accounting or related financial management expertise, each as
required by the applicable NYSE listing standards. The Board of
Directors has also determined that Messrs. Van Kleef,
Nelson, Seaver and Swanson qualify as audit committee financial
experts under the applicable rules of the Exchange Act.
In addition to serving on the Audit Committee of the
Companys Board of Directors, Mr. Nelson also serves
on the audit committees of Input/Output, Inc., W&T
Offshore, Inc. and Genesis Energy LP. The charter of the Audit
Committee of the Board of Directors provides that no member of
the Audit Committee may simultaneously serve on the audit
committees of more than two other public companies. The Board of
Directors has waived this limitation with respect to
Mr. Nelsons service on more than two other public
company audit committees. Prior to granting this waiver, the
Board of Directors considered the incremental time and
responsibilities that such additional service would require of
Mr. Nelson. Based upon a consideration of the facts and
circumstances related to Mr. Nelsons commitments and
the entities on whose boards he serves, and including the fact
that he is not currently serving in a full time executive role,
the Board of Directors has determined that such additional
service would not impair Mr. Nelsons ability to
effectively serve on the Companys Audit Committee.
Compensation
Committee
The Companys Compensation Committee consists of
Messrs. Rosenthal, Papa and Wells, each of whom is
independent, as defined in the applicable NYSE listing
standards, and is a non-employee director. The Compensation
Committee operates under a written charter approved by the Board
of Directors as amended and restated on May 15, 2008. A
copy of the charter is available on our website,
www.oilstatesintl.com, by first clicking Corporate
Governance and then Compensation Committee
under the Committee Charters heading on the right side of the
page. The Compensation Committee, which is chaired by
Mr. Rosenthal, administers the Oil States International,
Inc. 2001 Equity Participation Plan (the 2001 Equity
Participation Plan), and in this capacity makes a
recommendation to the full Board of Directors concerning all
option grants or stock awards to employees, including executive
officers, under the plan. In addition, the Compensation
Committee is responsible for (i) making recommendations to
the Board of Directors with respect to the compensation of the
Companys Chief Executive Officer and its other executive
officers, (ii) establishing compensation and employee
benefit policies and (iii) reviewing and discussing with
our management the Compensation Discussion and Analysis and
related disclosure included in our annual proxy statement.
Nominating &
Corporate Governance Committee
Our Nominating & Corporate Governance Committee
consists of Messrs. Lambert, Papa and Wells, each of whom
is independent, as such term is defined in the applicable NYSE
listing standards. The Nominating & Corporate
Governance Committee operates under a written charter adopted by
the Board of Directors as amended and restated as of
May 15, 2008. A copy of the charter is available on our
website, www.oilstatesintl.com, by first clicking
Corporate Governance and then Nominating and
Corporate Governance Committee under the Committee
Charters heading on the right side of the page. The Nominating
& Corporate Governance Committee, which is chaired by
Mr. Papa, makes proposals to the Board of Directors for
candidates to be nominated by the
10
Board of Directors to fill vacancies or for new directorship
positions, if any, which may be created from time to time. The
Nominating & Corporate Governance Committee will
consider suggestions from any source, particularly from
stockholders, regarding possible candidates for director. To
submit a recommendation to the committee, a stockholder should
send a written request to the attention of the Companys
Secretary at Oil States International, Inc., Three Allen Center,
333 Clay Street, Suite 4620, Houston, Texas 77002. The
written request must include the nominees name, contact
information, biographical information and qualifications, as
well as the nominees written consent to serve if elected.
The request must also disclose the number of shares of common
stock beneficially owned by the person or group making the
request, the period of time such person or group has owned those
shares and the nature of any arrangement or agreement between
the stockholder making a nomination and other parties with
respect to the nomination. The request must be received by the
Company no later than the 120th day before the anniversary
of the date of the mailing of the prior years proxy, or
December 17, 2011, for the 2012 Annual Shareholders
Meeting. These procedures do not preclude a stockholder from
making nominations in accordance with the process described
below under Stockholder Proposals.
Committee
Composition
Below is a summary of our committee structure and membership
information.
|
|
|
* |
|
Mr. Rosenthal will be resigning from the Audit Committee
and Mr. Swanson plans to join the Audit Committee effective
April 27, 2011. |
Board
of Directors and Committee Meetings
During 2010, the entire Board of Directors held nine meetings,
the Audit Committee held six meetings, the Compensation
Committee held five meetings and the Nominating &
Corporate Governance Committee held two meetings. Each of the
directors attended at least 75% of the meetings of the Board of
Directors and the committees of the Board of Directors on which
they served. All of our directors attended last years
annual meeting. While we understand that scheduling conflicts
may arise, we expect directors to make reasonable efforts to
attend the annual meeting of stockholders and meetings of the
Board of Directors and the committees on which they serve.
Our Corporate Governance Guidelines provide that our
non-employee directors shall meet separately in executive
session at least annually. The director who presides at these
sessions is the Chairman of the Board, assuming such person is a
non-management director. Otherwise, the presiding director will
be chosen by a vote of the non-management directors. In addition
to the executive sessions of our non-management directors, our
independent directors (as defined in the applicable NYSE listing
standards) are required to meet in executive session at least
annually. In the past year, our independent directors met in
executive session several times. Our Chairman of the Board
presided at these sessions.
11
Board
of Directors Oversight of Enterprise Risk
The Board of Directors utilizes our Enterprise Risk Management
(ERM) process to assist in fulfilling its oversight of our
risks. Management, which is responsible for
day-to-day
risk management, conducts a risk assessment of Oil States
business annually. The risk assessment process is global in
nature and has been developed to identify and assess the
Companys risks, including the nature, materiality and
velocity of the risk, as well as to identify steps to mitigate
and manage each risk. Our key business leaders, functional heads
and other managers are surveyed
and/or
interviewed to develop this information.
Risk oversight is a responsibility of the Board of Directors.
The Board of Directors has delegated responsibility for
monitoring certain enterprise risks to its standing committees.
The results of the risk assessment are reviewed with the full
Board of Directors. The centerpiece of the assessment is the
discussion of the key risks of Oil States, which includes the
potential magnitude, likelihood of each risk and the speed with
which the risk could impact the Company. As part of the process
for each risk, management identifies the senior executive
responsible for managing the risk, the potential impact and
managements initiatives to manage the risk.
The results of the risk assessment are considered in the Board
of Directors processes. Risk discussions are integral to
the Board of Directors and its committees deliberations.
Qualifications
of Directors
When identifying director nominees, the Nominating &
Corporate Governance Committee will consider the following:
|
|
|
|
|
the persons reputation, integrity and independence;
|
|
|
|
the persons skills and business, government or other
professional experience and acumen, bearing in mind the
composition of the Board of Directors and the current state of
the Company and the oilfield services industry generally at the
time of determination;
|
|
|
|
the number of other public companies for which the person serves
as a director and the availability of the persons time and
commitment to the Company; and
|
|
|
|
the persons knowledge of areas and businesses in which the
Company operates.
|
The Nominating & Corporate Governance Committee and
the Board of Directors believe the above mentioned attributes,
along with the leadership skills and other experience of its
Board of Directors members described below, provide the Company
with the perspectives and judgment necessary to guide the
Companys strategies and monitor their execution.
The following table notes the breadth and variety of business
experience that each of our directors brings to the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
|
Energy/Oil
|
|
International
|
|
|
|
|
|
|
Leadership
|
|
Financial
|
|
Field Services
|
|
Operations
|
|
CEO
|
|
Director Role
|
|
Stephen A. Wells
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
Cindy B. Taylor
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
Martin A. Lambert
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
S. James Nelson
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
|
|
|
|
√
|
|
Mark E. Papa
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
Gary L. Rosenthal
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
Christopher T. Seaver
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
Douglas E. Swanson
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
William T. Van Kleef
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
√
|
|
|
|
|
|
|
|
√
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
In selecting nominees for the Board of Directors, the
Nominating & Corporate Governance Committee considers,
among other things, the diversity of the Board of Directors in
terms of educational background, business industry experience
and knowledge of different geographic markets and oilfield
services and products. In the case of current directors being
considered for renomination, the Nominating &
Corporate Governance Committee will also take into account the
directors history of attendance at Board of Directors and
committee meetings, the directors tenure as a member of
the Board of Directors and the directors preparation for
and participation in such meetings.
Director
Nomination Process
Our director nomination process for new Board of Directors
members is as follows:
|
|
|
|
|
The Nominating & Corporate Governance Committee, the
Chairman of the Board, or another Board of Directors member
identifies a need to add a new Board of Directors member who
meets specific criteria or to fill a vacancy on the Board of
Directors.
|
|
|
|
The Nominating & Corporate Governance Committee
initiates a search by working with staff support, seeking input
from Board of Directors members and senior management and hiring
a search firm, if necessary.
|
|
|
|
The Nominating & Corporate Governance Committee
considers recommendations for nominees for directorships
submitted by stockholders.
|
|
|
|
The initial slate of candidates that will satisfy specific
criteria and otherwise qualify for membership on the Board of
Directors are identified and presented to the
Nominating & Corporate Governance Committee, which
ranks the candidates.
|
|
|
|
The Chairman of the Board and at least one member of the
Nominating & Corporate Governance Committee interviews
prospective candidate(s).
|
|
|
|
The full Board of Directors is kept informed of progress.
|
|
|
|
The Nominating & Corporate Governance Committee offers
other Board of Directors members the opportunity to interview
the candidate(s) and then meets to consider and approve the
final candidate(s).
|
|
|
|
The Nominating & Corporate Governance Committee seeks
the endorsement of the Board of Directors of the final
candidate(s).
|
The final candidate(s) are nominated by the Board of Directors
or elected to fill a vacancy.
Communications
with Directors
Stockholders or other interested parties may send
communications, directly and confidentially, to the Board of
Directors, to any committee of the Board of Directors, to
non-management directors or any director in particular, by
sending an envelope marked confidential to such
person or persons
c/o Oil
Sates International, Inc., Three Allen Center, 333 Clay Street,
Suite 4620, Houston, Texas 77002. Any such correspondence
will be forwarded by the Secretary of the Company to the
addressee without review by management.
Compensation
Committee Interlocks and Insider Participation
During 2010, the Companys Compensation Committee consisted
of Messrs. Rosenthal, Papa and Wells, each of whom is an
independent, non-employee director. There were no compensation
committee interlock relationships nor any insider participation
in compensation arrangements for the year ended
December 31, 2010.
13
EXECUTIVE
COMPENSATION
COMPENSATION
DISCUSSION AND ANALYSIS
The Compensation Committee of the Board of Directors provides
overall guidance to the Companys executive compensation
program and administers incentive compensation plans.
The executive compensation program includes three primary
elements which are generally performance oriented and, taken
together, constitute a flexible and balanced method of
establishing total compensation for the Companys executive
officers. The three major elements consist of a) base
salary, b) annual incentive plan awards, and
c) long-term incentive awards. The design of this
compensation program supports the Companys executive total
compensation philosophy.
Executive
Total Compensation Philosophy
The Companys philosophy regarding the executive
compensation program for our named executive officers and other
senior managers has been to design a compensation package that
provides competitive base salary levels and compensation
incentives that (i) attract and retain individuals of
outstanding ability in these key positions, (ii) recognize
corporate performance relative to established goals and the
performance of the Company relative to the performance of other
companies of comparable size, complexity and quality and against
budget goals, and (iii) support both the short-term and
long-term strategic goals of the Company. The Committee believes
this approach closely links the compensation of the
Companys executives to the execution of the Companys
strategy and the accomplishment of Company goals that coincide
with stockholder objectives.
Compensation
Program Objectives:
|
|
|
|
|
Attract, motivate, reward and retain key employees and executive
talent required to achieve corporate strategic plans;
|
|
|
|
reinforce the relationship between strong individual performance
of executives and business results;
|
|
|
|
align the interests of executives with the long-term interests
of stockholders; and
|
|
|
|
design a compensation program that neither promotes overly
conservative actions or excessive risk taking.
|
The compensation program is designed to reward executives for
long-term strategic management and the enhancement of
stockholder value. We believe that the compensation program
design and policies contribute to achievement of the
Companys objectives.
Compensation
Benchmarking Relative to Market
The Compensation Committee establishes executive compensation
primarily based on a review of the executives performance
and compensation history and takes into account corporate
performance. In the exercise of its duties, the Compensation
Committee periodically benchmarks the Companys executive
compensation against that of comparable companies. The
Compensation Committee considers the market to consist of both
the oilfield services industry and geographic markets in which
the Company competes for executive talent. Benchmark data is
periodically obtained for a selected peer group approved by the
Compensation Committee as well as for industry companies of
comparable size. The Company currently uses the following
benchmark companies: Complete Production Services, Inc., Core
Laboratories N.V., Dril-Quip, Inc., Exterran Holdings, Inc.,
Global Industries Ltd., Helix Energy Solutions Group, Inc., Key
Energy Services, Inc., Oceaneering International, Inc., Superior
Energy Services, Inc. and Tidewater, Inc. Each of the benchmark
companies at the time of selection had a market capitalization
of between $1.5 and $4.5 billion, and each participates in
the oilfield services industry with the Company.
The Compensation Committee reviews the compensation programs for
comparable positions at similar corporations with which the
Company competes for executive talent, and also considers
relative internal equity within the executive pay structure.
This approach allows the Compensation Committee to respond to
changing business conditions, manage salaries and incentives
more evenly over an individuals career as well as minimize
the
14
potential for automatic
ratcheting-up
of salaries and incentives that could occur with an inflexible
and more narrowly defined approach.
In evaluating the comparison group data for compensation
purposes, the Compensation Committee neither bases its decisions
on quantitative relative weights of various factors, nor follows
mathematical formulas. Rather, the Compensation Committee
exercises its discretion and makes its judgment after
considering the factors it deems relevant.
Elements
of Compensation:
|
|
|
|
|
Base Salary Base salary is the guaranteed
element of an executives direct compensation and is
intended to provide a foundation for a competitive overall
compensation opportunity for the executive. The Compensation
Committee reviews each executives base salary annually.
Executive officer base salaries are based on an evaluation that
considers the executives prior experience and breadth of
knowledge and which also considers benchmark data from other
similarly sized companies in businesses comparable to the
Companys, the Companys and the executives
performance, and any significant changes in the executives
responsibilities. The Compensation Committee considers all these
factors together plus overall industry conditions and retention
risks and makes a subjective determination on base salary
adjustments. Effective March 1, 2010,
Mrs. Taylors base salary was increased 6.3% to
$510,000; it was also increased effective August 26, 2010,
by 13.7% to $580,000. Mr. Dodsons base salary was
increased, effective March 1, 2010, by 30% to $325,000;
Mr. Moses base salary was increased 15.2% to
$280,000; and Mr. Craggs base salary was increased
5.3% to $300,000. Mr. Green received a 4.2% raise effective
March 1, 2010 which increased his base salary to $363,750
(Canadian $375,000). Base salaries were increased in 2010 based
on a number of factors including the absence of raises in 2009,
retention risks, individual performance and in recognition of
the performance of the Companys stock which was in excess
of one year, three year and ten year comparative performance of
the industry peer group. Further, base salary increases were
made after considering benchmark data of the industry peer group
and other publically available compensation data which indicated
that the evaluated executives base pay was below the
mid-point of similarly classified executives in the industry and
marketplace.
|
Mrs. Taylor provides the Compensation Committee with input
regarding the performance of other Company executives and makes
compensation recommendations with respect to these individuals.
However, the Committee makes an independent judgment with
respect to compensation levels for each of
Mrs. Taylors direct reports.
|
|
|
|
|
Annual Cash Incentive Compensation The
Companys Annual Incentive Compensation Plan
(AICP) promotes a
pay-for-performance
philosophy by providing executives with direct financial
incentives in the form of annual cash bonuses based on total
Company and business unit performance. Annual incentive awards
are linked to the achievement of Company-wide and business unit
quantitative performance goals and are designed to place a
significant portion of total compensation at risk. The purpose
of the AICP is to:
|
|
|
|
|
|
create stockholder value;
|
|
|
|
provide focus on the attainment of annual goals that lead to
long-term success of the Company;
|
|
|
|
provide annual performance-based cash incentive compensation;
|
|
|
|
motivate achievement of critical annual operating performance
metrics; and
|
|
|
|
motivate employees to continually improve Company-wide and
business unit performance.
|
The plan is flexible and provides the Compensation Committee the
discretion to set goals and objectives with input from
management that it believes are consistent with creating
stockholder value and include financial measures, growth
objectives, operating objectives, safety goals and other
measures. Under the AICP, an incentive target percentage is
established for each executive officer based upon, among other
factors, the Compensation Committees review of publically
available competitive compensation data for that position, level
of responsibility and ability to impact the Companys
success. The AICP recognizes market differences in incentive
award opportunities between organizational levels. Achieving
results which exceed a minimum, or threshold, level of
performance triggers an AICP payout. Performance results at or
below the threshold (i.e. achieving a percentage
15
ranging from 75% to 85% of the related AICP performance
objective or less) will result in no AICP award. The target
represents achieving 100% of an executive officers AICP
performance objective(s) as well as the targeted payout.
Overachievement (i.e. achieving a percentage ranging from 120%
to 125% of the related AICP performance objective) is the
performance level at which incentive compensation is maximized.
The 2010 award opportunities, expressed as a percentage of
eligible AICP earnings, for the Named Executive Officers are
outlined below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Overachievement
|
|
|
Cindy B. Taylor
|
|
|
0
|
%
|
|
|
80
|
%
|
|
|
160
|
%
|
Bradley J. Dodson
|
|
|
0
|
%
|
|
|
55
|
%
|
|
|
110
|
%
|
Charles J. Moses
|
|
|
0
|
%
|
|
|
60
|
%
|
|
|
120
|
%
|
Ron R. Green
|
|
|
0
|
%
|
|
|
60
|
%
|
|
|
120
|
%
|
Christopher E. Cragg
|
|
|
0
|
%
|
|
|
60
|
%
|
|
|
120
|
%
|
As shown in the table above, the maximum AICP overachievement
percentage is limited to twice the target level percentage which
helps mitigate the potential for excessive risk taking. In
addition, targets and goals are adjusted to incorporate
acquisitions and major capital expenditures which also limits
excessive risk taking.
At the beginning of each year, the Compensation Committee is
responsible for establishing the AICP performance objectives
based on recommendations by the Chief Executive Officer. The
Compensation Committee sets performance goals that are both
measurable and achievable. At the end of each year, the
Compensation Committee reviews the performance results of the
Company and the incentive awards to be paid to each executive
officer and to all participants in the AICP. In its discretion,
the Compensation Committee will interpret the plan and has
authority to make adjustments in individual, business unit or
Company-wide results in its discretion. The Compensation
Committee did not make any discretionary changes to the 2010
incentive payouts to the Named Executive Officers.
Performance measures are selected and weighted by management and
the Compensation Committee annually to give emphasis to
performance for which participants have influence. The
Compensation Committee has established earnings before
interest, taxes, depreciation and amortization
(EBITDA) as the primary corporate financial
performance objective for each executive officer. In addition, a
portion of the incentive potential for certain participants was
based on return on investment (ROI) and, for certain
of the executives other strategic goals as determined
appropriate for the executives areas of responsibilities.
Other strategic goals and objectives varied and included
measures such as safety performance. Performance goals may be
similar for all executives or may be different to reflect more
appropriate measures of corporate and business unit performance.
The EBITDA and ROI targets are generally set based on the
Company or business unit annual budgeted financial statements
which are approved by the Board of Directors. The relative
percentages of EBITDA and ROI used to evaluate our executives
are based upon the nature of each executives role in the
Company and how that role relates to overall goals and
performance of the Company. For example, for those divisions
which have ROI criteria, executives responsible for the
operation of those specific divisions or who have a significant
impact over investment decisions with respect to such businesses
have business-based or Company ROI as part of their performance
measure if achievement of such measure is material to the
Companys performance. Executives who have less control
over segment-based or Company ROI, have performance measures
more heavily weighted towards EBITDA. We believe the use of
tailored performance goals, which are closely aligned with
drivers of the Companys business, furthers our
compensation objective of reinforcing the relationship between
strong individual performance of executives and overall business
performance. Individual objectives are tailored to match areas
of direct responsibility and impact on outcome.
For 2010, Mr. Dodson and Mrs. Taylor had 90% of their
incentive compensation based on the Companys EBITDA and
10% of their incentive compensation based on the Companys
ROI. Mr. Moses incentive compensation was based 80%
on Offshore Products EBITDA, 10% on Offshore
Products ROI and 10% on the Companys EBITDA.
Mr. Greens incentive compensation was based 10% on
the Companys EBITDA and the following PTI Group, Inc.
metrics: 80% EBITDA and 10% ROI. Mr. Craggs incentive
compensation was based on 40% on the Companys EBITDA and
60% on the total of Tubular Services and Well Site Services
EBITDA.
16
At the end of each year, the Compensation Committee reviews the
performance results of the Company and the total incentive
awards to be paid to each executive officer based on such
officers success in achieving his AICP performance
objectives.
All executive officers, including Mrs. Taylor, received
incentive plan payments for 2010 performance, reflecting, in
large part, the Companys and most of its businesses
strong overall performance versus budget. These incentive plan
payments varied based upon Company and business unit achievement
of the related goals and objectives. Twelve of fourteen business
groupings of the Company, for AICP calculation purposes,
including the consolidated group, exceeded their 2010 EBITDA
objectives, and all of the Companys executive officers
received bonuses for 2010 in excess of target. On a consolidated
basis, the Company overachieved its targets for 2010. Each of
the Named Executive Officers for the fiscal year ended
December 31, 2010, received the following payments in
February 2011 under the AICP for fiscal 2010 performance.
|
|
|
|
|
|
|
|
|
|
|
AICP
|
|
|
|
|
Award
|
|
% of Eligible
|
|
|
($)
|
|
AICP Earnings
|
|
Cindy B. Taylor
|
|
$
|
842,092
|
|
|
|
160
|
%
|
Bradley J. Dodson
|
|
$
|
341,635
|
|
|
|
110
|
%
|
Charles J. Moses
|
|
$
|
307,323
|
|
|
|
108
|
%
|
Ron R. Green
|
|
$
|
282,516
|
|
|
|
82
|
%
|
Christopher E. Cragg
|
|
$
|
356,539
|
|
|
|
119
|
%
|
Long-term Incentives The Company makes
certain stock-based awards under the 2001 Equity Participation
Plan, which has been approved by stockholders, to better align
the interests of executive officers with those of stockholders
and to provide retention incentives. Specifically, the
plans purposes are to:
|
|
|
|
|
provide an additional incentive for executives to further the
growth, development and financial success of the Company by
personally benefiting through ownership of Company stock
and/or
rights which recognize growth, development and financial
success; and
|
|
|
|
enable the Company to obtain and retain the services of
executives considered essential to the long term success of the
Company by offering them an opportunity to own stock in the
Company
and/or
rights which will reflect the growth, development and financial
success of the Company.
|
The 2001 Equity Participation Plan provides for the grant of any
combination of:
|
|
|
|
|
stock options, which include both incentive stock options and
nonqualified stock options;
|
|
|
|
restricted stock;
|
|
|
|
performance awards;
|
|
|
|
dividend equivalents;
|
|
|
|
deferred stock; and
|
|
|
|
stock payments.
|
In determining appropriate awards, the Compensation Committee
annually reviews each executives past performance, his or
her ability to contribute to the future success and growth of
the Company, time in the current job and competitive market
data. The Compensation Committee also takes into account the
risk of losing the executive to other employment opportunities
and the value and potential for appreciation in the
Companys stock. The Compensation Committee believes that
stock options and restricted stock grants, along with
significant vesting requirements, are an effective method of
reinforcing the long-term nature of the Companys business
and creating retention incentives. In addition, grants of stock
options
and/or
restricted stock reinforce alignment with stockholder interests.
The Compensation Committee considers the foregoing factors and
any other relevant factors and makes a subjective determination
with respect to awarding equity based compensation to its
executive officers.
Under the 2001 Equity Participation Plan (Plan) the
Company has only granted nonqualified stock options and
time-vested restricted stock awards. The Company amended the
Plan on March 31, 2009, to provide for
17
minimum vesting periods on restricted stocks and similar awards
of one year for performance-based awards and three years for
tenure based awards, except for a small percentage of the
authorized shares under the Plan. As a result of this amendment,
vesting may occur earlier than the minimum vesting periods with
respect to no more than 10% of shares cumulatively authorized
under the Plan. In excess of 99% of the options granted by the
Compensation Committee vest at a rate of 25% per year over the
first four years. Option lives range from six to ten years.
Options are awarded at the NYSEs closing price of the
Companys common stock on the date of the grant, or the
last trading day if the award date is a date when markets are
closed (NYSE Closing Price). The Compensation
Committee has never granted options with an exercise price that
is less than the closing price of the Companys common
stock on the grant date. The Compensation Committee has never
repriced outstanding options. Any repricing of options under our
Equity Participation Plan would require shareholder approval.
Restricted stock awards, which are valued at the NYSE Closing
Price, generally vest over a four year period at a rate of 25%
per year; however, in special situations the Compensation
Committee has approved awards with shorter vesting periods.
Higher-level positions will generally have a greater percentage
of their total compensation based on longer-term incentives. The
size of long-term incentive grants will vary from year to year
and reflects a variety of factors including, among others,
competitive market practices, retention priorities, total
previous grants, current stock valuation, estimated future
charges to earnings, and individual, business unit and company
wide performance. The Compensation Committee determines the
award level for executives, if any, on an annual basis usually
at its February meeting each year.
The Company continues to incorporate a combination of both
nonqualified stock options and restricted stock awards as the
primary executive long-term incentive and retention tool. Awards
are based on a number of factors, including, among others, the
participants position, experience, base compensation,
stock price and opportunity for advancement as well as any
retention issues. Restricted stock awards offers the additional
advantages of potentially reducing overall Company stock
dilution, while improving the Companys executive retention
prospects in a very competitive labor market. We recognize that
options alone may not have adequate retention value in an
industry that has historically been cyclical in nature. The
Compensation Committee weighs the cost of these grants with
their potential benefit as an incentive, retention and
compensation tool.
Restricted stock awards were made to Mrs. Taylor and
Messrs. Dodson, Moses and Cragg on February 19, 2010
at the then fair market value of $37.67 per restricted share.
Stock option awards were made to Mrs. Taylor and
Messrs. Dodson, Moses, Green and Cragg on February 19,
2010 that had an exercise price of $37.67 per share based on the
NYSE Closing Price and that had a Black Scholes fair market
value on the date of grant of $17.12 per option award.
Other than Mr. Green, who only received a grant of stock
options, each of the Named Executive Officers received both
grants of stock options and restricted stock awards. During
2010, a total of 112,500 stock options and 43,500 shares of
restricted stock awards were granted to the Named Executive
Officers.
In administering the long-term incentive plan, the Compensation
Committee is sensitive to the potential for dilution of future
earnings per share. For this reason and because of other
compensation design considerations, the Compensation Committee
does not administer a broad-based stock program. Instead, the
Compensation Committee focuses the long-term incentive plan on
employees who will have the greatest impact on the strategic
direction and long-term results of the Company by virtue of
their senior roles and responsibilities.
Stock option grants and restricted stock awards are expensed to
comply with Statement of Financial Accounting Standards
No. 123R Share Based Payments (FASB
123R). There is no program, plan or practice to time the
grant of stock options and award restricted stock to executives
in coordination with material non-public information. Except in
special circumstances, equity grants are made to employees
annually at the time of the Board of Directors February
meeting. Executive officers are prohibited from trading options
or any derivative type of contract related to the Companys
stock.
18
Benefits
Employee benefits are designed to be broad based, competitive
and to attract and retain employees. From time to time the
Compensation Committee reviews plan updates and recommends that
the Company implement certain changes to existing plans or adopt
new benefit plans.
Health
and Welfare Benefits
The Company offers a standard range of health and welfare
benefits to all employees including executives. These benefits
include: medical, prescription drug, vision and dental
coverages, life insurance, accidental death and dismemberment,
long-term disability insurance, flexible spending accounts,
employee assistance, business travel accident insurance and 529
college savings plans. Executive officers make the same
contributions for the same type of coverage and receive the same
level of benefit as any other employee for each form of
coverage / benefit.
Retirement
Plans
The Company does not offer a defined benefit retirement plan.
The Company does offer a defined contribution 401(k) retirement
plan to substantially all of its U.S. employees.
Participants may contribute from 1% to 50% of their base and
cash incentive compensation (subject to IRS limitations), and
the Company makes matching contributions under this plan on the
first 6% of the participants compensation (100% match of
the first 4% employee contribution and 50% match on the next 2%
contribution). Company matching contributions vest at a rate of
20% per year for each of the employees first five years of
service and then are immediately vested thereafter. A similar
defined contribution retirement plan is in place and available
to our Canadian employees, including Ron Green.
Deferred
Compensation Plan
The Company maintains a nonqualified deferred compensation plan
that permits eligible employees and directors to elect to defer
all or a part of their cash compensation (base
and/or
incentives) from the Company until the termination of their
status as an employee or director. A deferral election may
provide for deferring different forms of compensation (base
salary
and/or
incentive compensation) during the year. The Compensation
Committee administers the plan. Participating employees are
eligible to receive from the Company a matching deferral under
the nonqualified deferred compensation plan that is intended to
compensate them for contributions they could not receive from
the Company under the 401(k) plan due to the various limits
imposed on 401(k) plans by U.S. federal income tax laws.
Directors who elect to participate in the nonqualified deferred
compensation plan do not receive any matching contributions.
Participants in the nonqualified deferred compensation plan are
able to invest contributions made to the nonqualified deferred
compensation plan in investment funds selected by a Retirement
Plan Compensation Committee which also mirrors the 401(k) plan
investment funds. The Retirement Plan Compensation Committee is
composed of employees. The Compensation Committee has
established a grantor trust to hold the amounts deferred under
the plan by the Companys officers and directors. All
amounts deferred under the plan remain subject to the claims of
the Companys creditors.
Allocation of net income (or net loss) in each
participants account is divided into sub accounts to
reflect each participants deemed investment designation in
a particular fund(s). As of each valuation date, the net income
(or net loss) of each fund is allocated among the corresponding
sub accounts of the participants. Each sub account is credited
with (or debited for) that portion of such net income (or net
loss) due to the change in the value of each corresponding sub
account from the prior valuation date.
Generally, each participant in the Deferred Compensation Plan
will receive, at the participants election, a lump sum
distribution or installment payments only upon termination of
the participants service with the Company and its
affiliates. For Key Employees, as defined in IRS
regulations, distributions of deferrals made after 2004 are
delayed at least six months. Any other withdrawals by the
participant will be made in compliance with 409A limitations.
19
Canadian
Retirement Savings Plan
In Canada, the Company contributes, on a matched basis, an
amount up to 5% of each Canadian based, salaried employees
(including the Canadian based NEO) base salary to the legislated
maximum to a Defined Contribution Registered Pension Plan
(Retirement Savings Plan) for the sole benefit of
that employee. Contributions to the Retirement Savings Plan for
the Canadian based NEO (as with all of the Canadian based
salaried employees) is subject to the annual maximum Retirement
Savings Plan contribution limit ($22,000 in 2010) set out
in the Canadian Income Tax Act. Enrollment in the plan begins
upon commencement of employment and contributions vest after two
years of continuous service with the Company. Funds are paid by
the Company to the third party Retirement Savings Plan
administrator, Great West Life Assurance Company (Great
West Life), and the funds are invested by Great West Life
on behalf of the employee from within a broad range of
investment options based on the instructions of each individual
employee. Apart from the annual contributions, any growth in an
individuals Retirement Savings Plan is dependent upon the
investment decisions made by that individual. The Company makes
no investment decisions on behalf of the employee and has no
obligations under the Retirement Savings Plan other than, in
each year, to remit the defined contributions into each
employees Retirement Savings Plan (including the Canadian
based NEOs Retirement Savings Plan) on that individuals
behalf.
Other
Perquisites and Personal Benefits
The Company does not offer any perquisites or other personal
benefits to any executive with a value over $10,000 beyond those
discussed above. Some executives do have Company paid club
memberships, which are used for business purposes.
Compensation
Consultant
The Committee, from time to time, utilizes consultants to
provide independent advice on executive compensation matters and
to perform specific project-related work. The consultants report
directly to the Committee, which pre-approves the scope of the
work and the fees charged. The Committee indicates to the
consultants the role that management has in the analysis of
executive compensation. In the past, consultants utilized by the
Company have worked exclusively for the Committee on executive
compensation projects and performed no other service for the
Company. Fees paid to compensation consultants have never
exceeded $120,000 per year.
Executive
Compensation Policies
|
|
|
|
|
Repricing Stock Options The Companys
practice is to price awards at the market price on the date of
award. The Companys Equity Participation Plan prohibits
any repricing of options without shareholders approval.
|
|
|
|
Securities Trading Policy The Company
prohibits directors, officers and certain other managers from
trading the Companys securities on the basis of material,
non-public information or tipping others who may so
trade on such information. In addition, the policy prohibits
trading in the Companys securities without obtaining prior
approval from the Companys Compliance Officer.
|
|
|
|
Tax Deductibility of Compensation
Section 162(m) of the Internal Revenue
Code, enacted in 1993, imposes a limit of $1 million,
unless compensation is performance based, on the amount that a
publicly held corporation may deduct in any year for the
compensation paid or accrued with respect to its Chief Executive
Officer and each of its four other most highly compensated
executive officers. While the Company cannot predict with
certainty how the compensation of our Named Executive Officers
might be affected in the future by the Section 162(m), or
applicable tax regulations issued hereunder, the Company intends
to preserve the tax deductibility of substantially all of
executive compensation while maintaining the executive
compensation program as described herein. None of the
Companys executive officers currently received
compensation exceeding the limits imposed by Section 162(m).
|
|
|
|
Executive Stock Ownership Guidelines
Effective February 16, 2007, Executive
Stock Ownership Guidelines were adopted by the Compensation
Committee of the Board of Directors of the Company to
|
20
|
|
|
|
|
further align the interests of executives with the interests of
stockholders and further promote the Companys commitment
to sound corporate governance.
|
The Executive Stock Ownership Guidelines are calculated based on
a multiple of the executives base salary, which is then
converted to a fixed number of shares. Once the ownership
guideline is established for an executive and communicated, the
executive has four years to attain the targeted level of
ownership. An executives ownership guideline does not
automatically change as a result of changes in his or her base
salary or fluctuations in Oil States common stock price.
However, the Committee may, from time to time, reevaluate and
revise participants guidelines to incorporate these types
of events. An executives stock ownership guideline may
also increase because of a change in title. The ownership
guidelines for the senior executives are as follows:
Stock
Ownership Level
|
|
|
|
|
|
|
Multiple
|
|
Position
|
|
of Salary
|
|
|
Chief Executive Officer
|
|
|
3
|
X
|
Executive Officers (Section 16)
|
|
|
2
|
X
|
Corporate Administrative Vice Presidents
|
|
|
1
|
X
|
Stock that counts toward satisfaction of the Companys
Stock Ownership Guidelines includes:
|
|
|
|
|
Company shares owned outright (i.e. open market purchases) by
the executive or his or her immediate family members residing in
the same household;
|
|
|
|
Vested Company restricted stock awards that are issued as part
of the executives long-term compensation;
|
|
|
|
Company shares acquired upon option exercise that the executive
continues to hold;
|
|
|
|
Company shares held in the Companys Nonqualified Deferred
Compensation Plan; and
|
|
|
|
Company shares beneficially owned through a trust.
|
Covered executives are required to achieve their Stock Ownership
Guideline within four years from inclusion in the program. All
covered executives have achieved designated ownership
requirements except for Mr. Green for whom the deadline has
been extended due to the tax inefficiencies of issuing
restricted stock in Canada. Once achieved, ownership of the
guideline amount must be maintained for as long as the
individual is subject to Executive Stock Ownership Guidelines.
Executive
and Change of Control Agreements
The Company maintains Executive Agreements with seven executive
officers subject to Section 16 of the Securities and
Exchange Commission regulations. The Executive Agreements are
not considered employment agreements and the executives are
employed at will by the Company. These agreements
provide protection in the event of (i) a qualified
termination, which is defined as an involuntary termination of
the executive officer by the Company other than for
Cause or (ii) either an involuntary termination
or a voluntary termination by the executive for Good
Reason after a corporate Change of Control (as
defined in each Executive Agreement) of the Company. The
triggering events were selected due to the executive not having
complete control of their circumstances. Executives are
exercising control over their circumstances when they resign
voluntarily without Good Reason or are terminated for Cause. As
a result, these events do not trigger any payments.
If a qualified termination occurs other than during the
24-month
period following a corporate Change of Control, the Executive
Agreements provide for payments based on the executive
officers base salary and target annual bonus amount, that
all restrictions on restricted stock awards will lapse and for
continued health benefits for 24 months. Any vested,
non-qualified stock options would expire after 3 months of
the date of termination if not exercised prior to their
expiration.
The Change of Control provision in the Executive Agreement is
intended to encourage continued employment by the Company of its
executive officers and to allow such executive to be in a
position to provide assessment and
21
advice to the Board of Directors regarding any proposed Change
of Control without concern that such executive might be unduly
distracted by the uncertainties and risks created by a proposed
Change of Control. Unlike single trigger plans that
pay out immediately upon a change of control, the Companys
agreement requires a double trigger (i.e. a change
of control along with an involuntary loss of employment). If the
qualified termination occurs during the
24-month
period following a corporate Change of Control, the agreements
provide for a lump sum payment to the executive officer based on
the executive officers base salary and target annual
incentive amount. In addition, with respect to such a qualified
termination, the agreements provide that all restricted stock
awards will become vested, that all restrictions on such awards
will lapse and that outstanding stock options will vest and,
will remain exercisable for the remainder of their terms. The
executive officer will also be entitled to health benefits for
36 months, vesting of all deferred compensation amounts and
outplacement services. Executive agreements entered into prior
to 2010 entitle the executive to be made whole for any excise
taxes incurred with respect to severance payments that are in
excess of the limits set forth under the Internal Revenue Code.
Executive agreements entered into subsequent to 2009 do not
contain excise tax gross up protection. See Potential
Payments Under Termination or Change of Control in this
Proxy Statement for additional disclosures of severance and
Change of Control payments for Named Executive Officers.
The Executive Agreements have a term of three years and are
extended automatically for one additional day on a daily basis
for a period of three years, unless notice of non-extension is
given by the Board of Directors of the Company, in which case
the agreement will terminate on the third anniversary of the
date notice is given. To receive benefits under the Executive
Agreement, the executive officer will be required to execute a
release of all claims against the Company. Certain terms of the
Executive Agreements are summarized below.
Cindy B. Taylor. Under the terms of
Mrs. Taylors Executive Agreement, she will be
entitled to receive a lump sum payment equal to two and a half
times her base salary and target annual incentive amount if a
qualified termination occurs during the
24-month
period following a corporate Change of Control. If a qualified
termination occurs other than during the
24-month
period following a corporate Change of Control, Mrs. Taylor
will be entitled to receive a lump sum payment equal to one and
a half times her base salary and target annual incentive amount.
All Other Section 16 Executive
Officers. Under the terms of each of their
Executive Agreements, the executive officer will be entitled to
receive a lump sum payment equal to two times his base salary
and target annual incentive amount if a qualified termination
occurs during the
24-month
period following a corporate Change of Control. If a qualified
termination occurs other than during the
24-month
period following a Change of Control, the executive officer will
be entitled to receive a lump sum payment equal to his base
salary and target annual incentive amount.
Compensation
Committee Report
The Compensation Committee has reviewed and discussed with
management the Compensation Discussion and Analysis filed in
this document. The Compensation Committee recommended to the
Board of Directors that the Compensation Discussion and Analysis
be included in the Proxy Statement and annual report.
THE COMPENSATION COMMITTEE
Gary L. Rosenthal, Chairman
Mark G. Papa
Stephen A. Wells
22
SUMMARY
COMPENSATION TABLE
The table below summarizes the total compensation paid or earned
by the Named Executive Officers for each fiscal year in the
three year period ended December 31, 2010. The Company has
not entered into any employment agreements with any of the Named
Executive Officers. When setting total compensation for each of
the Named Executive Officers, the Committee reviews tally sheets
which show the executives current compensation, including
equity and non-equity based compensation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Plan
|
|
All Other
|
|
|
|
|
Name and
|
|
|
|
Salary
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
Total
|
|
|
Principal Position
|
|
Year
|
|
($)
|
|
($)(1)
|
|
($)(1)
|
|
($)(3)
|
|
($)(4)
|
|
($)
|
|
|
|
Cindy B. Taylor
|
|
|
2010
|
|
|
|
526,308
|
|
|
|
847,575
|
|
|
|
684,960
|
|
|
|
842,092
|
|
|
|
52,154
|
|
|
|
2,953,089
|
|
|
|
|
|
Chief Executive Officer
|
|
|
2009
|
|
|
|
480,000
|
|
|
|
624,906
|
|
|
|
935,903
|
|
|
|
442,030
|
|
|
|
55,767
|
|
|
|
2,538,606
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
474,231
|
|
|
|
712,335
|
|
|
|
643,519
|
|
|
|
569,077
|
|
|
|
44,857
|
|
|
|
2,444,019
|
|
|
|
|
|
Bradley J. Dodson
|
|
|
2010
|
|
|
|
310,577
|
|
|
|
320,195
|
|
|
|
171,240
|
|
|
|
341,635
|
|
|
|
28,999
|
|
|
|
1,172,646
|
|
|
|
|
|
Senior Vice President, Chief
|
|
|
2009
|
|
|
|
250,000
|
|
|
|
333,354
|
|
|
|
362,386
|
|
|
|
191,853
|
|
|
|
27,501
|
|
|
|
1,165,094
|
|
|
|
|
|
Financial Officer & Treasurer
|
|
|
2008
|
|
|
|
242,308
|
|
|
|
219,180
|
|
|
|
122,575
|
|
|
|
242,308
|
|
|
|
21,846
|
|
|
|
848,217
|
|
|
|
|
|
Charles J. Moses
|
|
|
2010
|
|
|
|
283,392
|
|
|
|
150,680
|
|
|
|
342,480
|
|
|
|
307,323
|
|
|
|
27,395
|
|
|
|
1,111,270
|
|
|
|
|
|
President Oil States
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industries, Inc
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ron R. Green(2)
|
|
|
2010
|
|
|
|
346,424
|
|
|
|
|
|
|
|
556,530
|
|
|
|
282,516
|
|
|
|
35,300
|
|
|
|
1,220,770
|
|
|
|
|
|
President PTI
|
|
|
2009
|
|
|
|
316,800
|
|
|
|
|
|
|
|
224,514
|
|
|
|
308,611
|
|
|
|
31,251
|
|
|
|
881,176
|
|
|
|
|
|
Group, Inc.
|
|
|
2008
|
|
|
|
330,435
|
|
|
|
|
|
|
|
367,725
|
|
|
|
330,435
|
|
|
|
30,233
|
|
|
|
1,058,828
|
|
|
|
|
|
Christopher E. Cragg
|
|
|
2010
|
|
|
|
299,308
|
|
|
|
320,195
|
|
|
|
171,240
|
|
|
|
356,539
|
|
|
|
17,873
|
|
|
|
1,165,155
|
|
|
|
|
|
Senior Vice President,
|
|
|
2009
|
|
|
|
285,000
|
|
|
|
124,875
|
|
|
|
168,386
|
|
|
|
84,539
|
|
|
|
26,639
|
|
|
|
689,439
|
|
|
|
|
|
Operations
|
|
|
2008
|
|
|
|
280,192
|
|
|
|
273,975
|
|
|
|
183,863
|
|
|
|
181,230
|
|
|
|
19,665
|
|
|
|
938,925
|
|
|
|
|
|
|
|
|
(1) |
|
These columns represent the dollar amounts for the years shown
of the aggregate grant date fair value of stock awards and
option awards granted in those years in accordance with SEC
rules. Generally, the aggregate grant date fair value is the
amount that the Company expects to expense in its financial
statements over the awards vesting schedule. Pursuant to
SEC rules, the amounts shown exclude the impact of estimated
forfeitures related to service-based vesting conditions. These
amounts reflect the Companys future accounting expense for
these awards and options, and do not necessarily correspond to
the actual value that will be recognized by the named executive
officers. All options awarded were priced at the date of the
award and have a life of six years. |
|
(2) |
|
Compensation reported for Mr. Green, other than stock
awards and option awards, was made in Canadian dollars and is
reflected in this table in U.S. dollars using the average
exchange rate for each year. U.S. dollar to Canadian dollar
exchange rates as follows: 2010 $0.97,
2009 $0.88 and 2008 $0.94 |
|
(3) |
|
Amounts of Non-Equity Incentive Plan Compensation
paid to each of the Named Executive Officers were made pursuant
to the Companys Annual Incentive Compensation Plan. For a
description of this plan please see Annual Cash Incentive
Compensation. |
|
(4) |
|
The 2010 amount shown in All Other Compensation
column reflects the following for each Named Executive Officer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement or
|
|
|
|
|
|
|
Deferred
|
|
|
|
|
|
|
Compensation
|
|
|
|
|
|
|
Plan Match
|
|
Other
|
|
Total
|
|
|
($)(5)
|
|
($)(6)
|
|
($)
|
|
Cindy B. Taylor
|
|
|
48,417
|
|
|
|
3,737
|
|
|
|
52,154
|
|
Bradley J. Dodson
|
|
|
25,122
|
|
|
|
3,877
|
|
|
|
28,999
|
|
Charles J. Moses
|
|
|
23,890
|
|
|
|
3,505
|
|
|
|
27,395
|
|
Ron R. Green
|
|
|
34,330
|
|
|
|
4,105
|
|
|
|
35,300
|
|
Christopher E. Cragg
|
|
|
14,965
|
|
|
|
2,908
|
|
|
|
17,873
|
|
|
|
|
(5) |
|
Represents the matching contribution allocated by the Company to
each of the Named Executive Officers, except Mr. Green,
pursuant to the 401(K) Retirement Plan or Deferred Compensation
Plan as more fully |
23
|
|
|
|
|
described in Compensation Discussion and
Analysis Retirement Plans, included herein.
Mr. Green received the matching contribution in a Canadian
Retirement Savings Plan. |
|
(6) |
|
The amounts shown in the Other column in the table
above include club dues and the imputed income attributable to
term life insurance program for Messrs. Dodson, Moses and
Cragg and Mrs. Taylor; and club dues paid on behalf of
Mr. Green. |
Each of the Named Executive Officers is party to an Executive
Agreement, which are not considered employment agreements. For a
description of these agreements, please see Executive
Compensation Discussion and Analysis Executive and
Change of Control Agreements. The compensation amounts
described in the preceding tables were determined as described
under Executive Compensation Discussion and
Analysis Elements of Compensation.
24
GRANTS OF
PLAN BASED AWARDS
The following table provides information about equity and
non-equity awards granted to Named Executive Officers in 2010:
(1) the grant date; (2) the estimated future payouts
under the non-equity incentive plan, which is discussed in
Compensation Discussion and Analysis Annual
Cash Incentive Compensation, included herein; (3) the
number of restricted stock awards pursuant to the Companys
2001 Equity Participation Plan; (4) the number of stock
option awards, which consist of the number of shares underlying
stock options awarded, pursuant to the Companys 2001
Equity Participation Plan; (5) the exercise price of the
stock option awards, which reflects the NYSE Closing Price on
grant date; and (6) the fair value of each equity award
computed in accordance with Financial Accounting Standards Board
(FASB) Codification Topic 718,
Compensation Stock Compensation as of the
grant date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
Options
|
|
|
|
|
|
|
|
|
Estimated Payouts for 2010
|
|
Stock
|
|
Awards:
|
|
|
|
|
|
|
|
|
Performance Under
|
|
Awards:
|
|
Number of
|
|
|
|
Grant Date
|
|
|
|
|
Non-Equity Incentive Plan
|
|
Number of
|
|
Securities
|
|
Exercise or
|
|
Fair Value of
|
|
|
|
|
Awards(1)
|
|
Shares of
|
|
Underlying
|
|
Base Price of
|
|
Stock and
|
|
|
Grant
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Stock or Units
|
|
Options
|
|
Options Awards
|
|
Option Awards
|
Name
|
|
Date
|
|
($)
|
|
($)
|
|
($)
|
|
(#)(2)
|
|
(#)(2)
|
|
($/SH)
|
|
($)(3)
|
|
Cindy B. Taylor
|
|
|
|
|
|
|
|
|
|
|
408,000
|
|
|
|
816,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,500
|
|
|
|
|
|
|
|
|
|
|
|
847,575
|
|
|
|
|
2/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
37.67
|
|
|
|
685,000
|
|
Bradley J. Dodson
|
|
|
|
|
|
|
|
|
|
|
178,750
|
|
|
|
357,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,500
|
|
|
|
|
|
|
|
|
|
|
|
320,195
|
|
|
|
|
2/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
37.67
|
|
|
|
171,250
|
|
Charles J. Moses
|
|
|
|
|
|
|
|
|
|
|
168,000
|
|
|
|
336,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
150,680
|
|
|
|
|
2/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
37.67
|
|
|
|
342,500
|
|
Ron R. Green(4)
|
|
|
|
|
|
|
|
|
|
|
218,250
|
|
|
|
436,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,500
|
|
|
|
37.67
|
|
|
|
556,563
|
|
Christopher E. Cragg
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
360,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,500
|
|
|
|
|
|
|
|
|
|
|
|
320,195
|
|
|
|
|
2/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
37.67
|
|
|
|
171,250
|
|
|
|
|
(1) |
|
The amounts shown in the column Target reflect the
target level of bonus payable under the Companys Incentive
Compensation Plan (see discussion in Compensation
Discussion and Analysis Incentive Compensation
Plan, included herein) which is based on an
executives base salary paid during the year multiplied by
the executives bonus percentage. The base salary used in
this table is shown as of the date of the award which has been
assumed to be February 19, 2010; actual awards are
calculated based on a participants eligible AICP earnings
paid in the year. The amount shown in the Maximum
column represents 200% of the target amount. In years when less
than entry level percentage of performance targets established
under the Incentive Compensation Plan are achieved no payments
are made under the Plan. The entry level percentage ranged from
75% to 85% in 2010, depending on the business unit involved. |
|
(2) |
|
The amounts shown in All Other Stock Awards and
All Other Option Awards columns reflect the number
of restricted stock awards and stock options, respectively,
granted in 2010 pursuant to the Companys 2001 Equity
Participation Plan. See Compensation Discussion and
Analysis Equity Participation Plan, included
herein. |
|
(3) |
|
This column shows the full grant date fair value of restricted
stock awards and stock options under FASB Codification Topic
718, Compensation Stock Compensation granted
to the Named Executive Officers during 2010, which is subject to
a four year vesting schedule. Generally, the full grant date
fair value is the amount that the Company would expense in its
financial statements over the award or option vesting schedule. |
|
(4) |
|
Mr. Greens non-equity incentive plan award amounts
were made in Canadian dollars and are reflected in this table in
U.S. dollars using the average exchange rate for 2010 of $0.97
U.S. dollar per Canadian dollar. |
25
OUTSTANDING
EQUITY AWARDS AT 2010 FISCAL YEAR END
The following table provides information on the holdings of
stock options and stock awards by the Named Executive Officers
as of December 31, 2010. This table includes unexercised
and unvested option awards and unvested stock awards. Each
equity grant is shown separately for each Named Executive
Officer. The vesting schedule for each grant is shown following
this table, based on the option or stock award grant date or
other factors, as discussed. The market value of the stock
awards is based on the closing market price of the
Companys common stock as of December 31, 2010, which
was $64.09. For additional information about the option awards
and stock awards, see the description of equity incentive
compensation in Compensation Discussion and
Analysis, included herein.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Awards:
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Plan
|
|
Market or
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
Market
|
|
Awards:
|
|
Payout
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
Value of
|
|
Number of
|
|
Value of
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
Number of
|
|
Shares or
|
|
Unearned
|
|
Unearned
|
|
|
Number of
|
|
Number of
|
|
Securities
|
|
|
|
|
|
Shares or
|
|
Units of
|
|
Shares,
|
|
Shares,
|
|
|
Securities
|
|
Securities
|
|
Underlying
|
|
|
|
|
|
Units of
|
|
Stock
|
|
Units
|
|
Units or
|
|
|
Underlying
|
|
Underlying
|
|
Unexercised
|
|
Option
|
|
|
|
Stock that
|
|
that
|
|
or Other
|
|
Other
|
|
|
Unexercised
|
|
Unexercised
|
|
Unearned
|
|
Exercise
|
|
Option
|
|
Have Not
|
|
Have Not
|
|
Rights that
|
|
Rights
|
|
|
Options (#)
|
|
Options (#)
|
|
Options
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
Have Not
|
|
that Have
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
(#)
|
|
($)
|
|
Date
|
|
(#)
|
|
($)
|
|
Vested
|
|
Not Vested
|
|
Cindy B. Taylor
|
|
|
100,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
11.49
|
|
|
|
2/25/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,671
|
(2)
|
|
|
|
|
|
|
|
|
|
|
34.86
|
|
|
|
2/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,275
|
(3)
|
|
|
9,425
|
(3)
|
|
|
|
|
|
|
28.98
|
|
|
|
2/16/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,070
|
(5)
|
|
|
3,690
|
(5)
|
|
|
|
|
|
|
36.99
|
|
|
|
5/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,250
|
(7)
|
|
|
26,250
|
(7)
|
|
|
|
|
|
|
36.53
|
|
|
|
2/18/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,750
|
(9)
|
|
|
56,250
|
(9)
|
|
|
|
|
|
|
16.65
|
|
|
|
2/19/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,500
|
(11)
|
|
|
|
|
|
|
24.52
|
|
|
|
6/19/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(13)
|
|
|
|
|
|
|
37.67
|
|
|
|
2/19/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,450
|
(4)
|
|
|
221,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,351
|
(6)
|
|
|
86,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,750
|
(8)
|
|
|
624,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,250
|
(10)
|
|
|
721,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,300
|
(12)
|
|
|
980,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,500
|
(14)
|
|
|
1,442,025
|
|
|
|
|
|
|
|
|
|
Bradley J. Dodson
|
|
|
10,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
11.49
|
|
|
|
2/25/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,250
|
(2)
|
|
|
|
|
|
|
|
|
|
|
34.86
|
|
|
|
2/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,500
|
(3)
|
|
|
2,500
|
(3)
|
|
|
|
|
|
|
28.98
|
|
|
|
2/16/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
(7)
|
|
|
5,000
|
(7)
|
|
|
|
|
|
|
36.53
|
|
|
|
2/18/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,750
|
(9)
|
|
|
11,250
|
(9)
|
|
|
|
|
|
|
16.65
|
|
|
|
2/19/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,700
|
(11)
|
|
|
|
|
|
|
24.52
|
|
|
|
6/19/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(13)
|
|
|
|
|
|
|
37.67
|
|
|
|
2/19/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,500
|
(4)
|
|
|
96,135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
(8)
|
|
|
192,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,750
|
(10)
|
|
|
240,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,200
|
(12)
|
|
|
653,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,500
|
(14)
|
|
|
544,765
|
|
|
|
|
|
|
|
|
|
Charles J. Moses
|
|
|
4,500
|
(3)
|
|
|
1,500
|
(3)
|
|
|
|
|
|
|
28.98
|
|
|
|
2/16/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
(7)
|
|
|
3,000
|
(7)
|
|
|
|
|
|
|
36.53
|
|
|
|
2/18/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,750
|
(9)
|
|
|
11,250
|
(9)
|
|
|
|
|
|
|
16.65
|
|
|
|
2/19/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(13)
|
|
|
|
|
|
|
37.67
|
|
|
|
2/19/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
750
|
(4)
|
|
|
48,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,500
|
(8)
|
|
|
160,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
(14)
|
|
|
256,360
|
|
|
|
|
|
|
|
|
|
Ron R. Green
|
|
|
13,125
|
(2)
|
|
|
|
|
|
|
|
|
|
|
34.86
|
|
|
|
2/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,500
|
(3)
|
|
|
7,500
|
(3)
|
|
|
|
|
|
|
28.98
|
|
|
|
2/16/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
(7)
|
|
|
15,000
|
(7)
|
|
|
|
|
|
|
36.53
|
|
|
|
2/18/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,500
|
(9)
|
|
|
22,500
|
(9)
|
|
|
|
|
|
|
16.65
|
|
|
|
2/19/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,500
|
(13)
|
|
|
|
|
|
|
37.67
|
|
|
|
2/19/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher E. Cragg
|
|
|
20,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
11.49
|
|
|
|
2/25/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,500
|
(2)
|
|
|
|
|
|
|
|
|
|
|
34.86
|
|
|
|
2/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,250
|
(3)
|
|
|
3,750
|
(3)
|
|
|
|
|
|
|
28.98
|
|
|
|
2/16/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,500
|
(7)
|
|
|
7,500
|
(7)
|
|
|
|
|
|
|
36.53
|
|
|
|
2/18/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,625
|
(9)
|
|
|
16,875
|
(9)
|
|
|
|
|
|
|
16.65
|
|
|
|
2/19/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(13)
|
|
|
|
|
|
|
37.67
|
|
|
|
2/19/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,250
|
(4)
|
|
|
80,113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,750
|
(8)
|
|
|
240,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,625
|
(10)
|
|
|
360,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,500
|
(14)
|
|
|
544,765
|
|
|
|
|
|
|
|
|
|
26
|
|
|
(1) |
|
Stock option award of 2/25/2003 that vests at the rate of 25%
per year, with vesting dates of 2/25/2004, 2/25/2005, 2/25/2006
and 2/25/2007. |
|
(2) |
|
Stock option award of 2/15/2006 that vests at the rate of 25%
per year, with vesting dates of 2/15/2007, 2/15/2008, 2/15/2009
and 2/15/2010. |
|
(3) |
|
Stock option award of 2/16/2007 that vests at the rate of 25%
per year, with vesting dates of 2/16/2008, 2/16/2009, 2/16/2010
and 2/16/2011. |
|
(4) |
|
Restricted stock award of 2/16/2007 that vests at the rate of
25% per year, with vesting dates of 2/16/2008, 2/16/2009,
2/16/2010 and 2/16/2011. |
|
(5) |
|
Stock option award of 5/17/2007 that vests at the rate of 25%
per year, with vesting dates of 5/17/2008, 5/17/2009, 5/17/2010
and 5/17/2011. |
|
(6) |
|
Restricted stock award of 5/17/2007 that vests at the rate of
25% per year, with vesting dates of 5/17/2008, 5/17/2009,
5/17/2010 and 5/17/2011. |
|
(7) |
|
Stock option award of 2/18/2008 that vests at the rate of 25%
per year, with vesting dates of 2/18/2009, 2/18/2010, 2/18/2011
and 2/18/2012. |
|
(8) |
|
Restricted stock award of 2/18/2008 that vests at the rate of
25% per year, with vesting dates of 2/18/2009, 2/18/2010,
2/18/2011 and 2/18/2012. |
|
(9) |
|
Stock option award of 2/19/2009 that vests at the rate of 25%
per year with vesting dates of 2/19/2010, 2/19/2011, 2/19/2012
and 2/19/2013. |
|
(10) |
|
Restricted stock award of 2/19/2009 that vests at the rate of
25% per year, with vesting dates of 2/19/2010, 2/19/2011,
2/19/2012 and 2/19/2013. |
|
(11) |
|
Stock option award of 6/19/2009 that vests 100% on 6/19/2012,
assuming the executives continued employment at that date. |
|
(12) |
|
Restricted stock award of 6/19/2009 that vests 100% on
6/19/2012, assuming the executives continued employment at
that date. |
|
(13) |
|
Stock option award of 2/19/2010 that vests at the rate of 25%
per year, with vesting dates of 2/19/2011, 2/19/2012, 2/19/2013
and 2/19/2014. |
|
(14) |
|
Restricted stock award of 2/19/2010 that vests at the rate of
25% per year, with vesting dates of 2/19/2011, 2/19/2012,
2/19/2013 and 2/19/2014. |
OPTIONS
EXERCISED AND STOCK VESTED
The following table provides information for the Named Executive
Officers on (1) stock option exercises during 2010,
including the number of shares acquired upon exercise and the
value realized and (2) the number of shares acquired upon
the vesting of stock awards and the value realized, each before
payment of any applicable withholding tax.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards(1)
|
|
|
Number of Shares
|
|
Value Realized
|
|
Number of Shares
|
|
Value Realized on
|
|
|
Acquired on Exercise
|
|
on Exercise
|
|
Acquired on Vesting
|
|
Vesting
|
Name
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
|
Cindy B. Taylor
|
|
|
95,329
|
|
|
|
2,500,713
|
|
|
|
15,052
|
|
|
|
568,670
|
|
Bradley J. Dodson
|
|
|
18,562
|
|
|
|
838,418
|
|
|
|
5,500
|
|
|
|
204,248
|
|
Charles J. Moses
|
|
|
10,812
|
|
|
|
290,555
|
|
|
|
2,250
|
|
|
|
83,485
|
|
Ron R. Green
|
|
|
7,500
|
|
|
|
173,819
|
|
|
|
1,266
|
|
|
|
51,374
|
|
Christopher E. Cragg
|
|
|
24,374
|
|
|
|
1,045,621
|
|
|
|
5,437
|
|
|
|
202,733
|
|
|
|
|
(1) |
|
Reflects shares received pursuant to restricted stock awards
under the 2001 Equity Participation Plan for grants made in 2006
through 2008 to each Named Executive Officer. |
27
EQUITY
PARTICIPATION PLAN INFORMATION
The table below provides information relating to our equity
compensation plans as of December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
|
|
|
Remaining Available for
|
|
|
|
Number of Securities to
|
|
|
Weighted-Average
|
|
|
Future Issuance Under
|
|
|
|
Be Issued Upon Exercise
|
|
|
Exercise Price of
|
|
|
Compensation Plans
|
|
|
|
of Outstanding Options,
|
|
|
Outstanding Options,
|
|
|
(Excluding Securities
|
|
Plan Category
|
|
Warrants and Rights
|
|
|
Warrants and Rights
|
|
|
Reflected in First Column)
|
|
|
Equity compensation plans approved by security holders
|
|
|
1,967,390
|
|
|
$
|
27.42
|
|
|
|
1,934,315
|
|
Equity compensation plans not approved by security holders
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,967,390
|
|
|
$
|
27.42
|
|
|
|
1,934,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our 2001 Equity Participation Plan has been approved by our
stockholders.
DEFERRED
COMPENSATION
Deferred
Compensation Plan and Canadian Deferred Retirement Savings
Plan
The Company maintains a nonqualified deferred compensation plan
for U.S. citizens that permits our directors and eligible
employees to elect to defer all or a part of their cash
compensation (base
and/or
incentive pay) from us until the termination of their status as
a director or employee. In Canada, the Company maintains a
similar plan in which Mr. Green is a participant. See
Compensation Discussion and Analysis Deferred
Compensation Plan, included herein, for details about the
plans.
The investment options currently available to an executive under
the Deferred Compensation Plan are the same mutual funds
available to all employees under the Companys 401(K)
Retirement Plan.
Detailed below is activity in the Deferred Compensation Plan for
each Named Executive Officer. Mr. Green is a Canadian
citizen based in Edmonton, Canada and is not eligible to
participate in the Deferred Compensation Plan; however, he does
participate in a similar Canadian Deferred Retirement Savings
Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
|
|
Aggregate
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Earnings
|
|
|
|
|
|
Balance
|
|
|
|
Contributions
|
|
|
Contribution
|
|
|
(Loss)
|
|
|
Aggregate
|
|
|
At Last
|
|
|
|
in Last
|
|
|
in Last
|
|
|
in Last
|
|
|
Withdrawals/
|
|
|
Fiscal
|
|
|
|
Fiscal Year
|
|
|
Fiscal Year
|
|
|
Fiscal Year
|
|
|
Distributions
|
|
|
Year End
|
|
Name
|
|
($)(1)
|
|
|
($)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)
|
|
|
Cindy B. Taylor
|
|
|
58,100
|
|
|
|
48,417
|
|
|
|
178,720
|
|
|
|
(28,750
|
)
|
|
|
1,042,439
|
|
Bradley J. Dodson
|
|
|
53,624
|
|
|
|
25,122
|
|
|
|
27,310
|
|
|
|
(28,750
|
)
|
|
|
221,243
|
|
Charles J. Moses
|
|
|
28,667
|
|
|
|
23,890
|
|
|
|
75,450
|
|
|
|
(34,250
|
)
|
|
|
346,403
|
|
Ron R. Green
|
|
|
36,928
|
|
|
|
34,330
|
|
|
|
24,653
|
|
|
|
|
|
|
|
321,699
|
|
Christopher E. Cragg
|
|
|
101,272
|
|
|
|
14,965
|
|
|
|
32,717
|
|
|
|
(28,750
|
)
|
|
|
300,312
|
|
|
|
|
(1) |
|
All contribution amounts for the last fiscal year reported in
this deferred compensation table are also included in amounts
reported in the Summary Compensation Table appearing in this
Proxy Statement. |
|
(2) |
|
This column represents net unrealized appreciation, dividends
and distributions from mutual fund investments for 2010
associated with investments held in the Deferred Compensation
Plan for Mrs. Taylor and Messers. Dodson, Moses and Cragg
and in the Deferred Retirement Savings Plan for Mr. Green. |
|
(3) |
|
The Deferred Compensation Plan allows an annual
roll-over of deferred compensation amounts into the
Companys 401(K) Retirement Plan to the maximum extent
permitted by U.S. Internal Revenue Service regulations. |
28
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
The table below reflects the amount of compensation to each of
the Named Executive Officers of the Company in the event of
either (i) an involuntary, not for Cause termination of
such executives employment or (ii) a termination
following a change of control (see Compensation Discussion
and Analysis Executive and Change of Control
Agreements herein; such Executive and Change of Control
Agreements are referred to herein as Executive
Agreements). The scope and terms of compensation due to
each Named Executive Officer upon voluntary terminations, early
retirement, retirement, for cause termination and in the event
of disability or death of the executive are the same as for all
salaried employees. The amounts shown in the table assume that
such termination was effective as of December 31, 2010 and,
therefore, include compensation earned through such time and are
estimates of the amounts which would be paid out to the
executives upon their terminations. The actual amounts to be
paid can only be determined at the time of such executives
separation from the Company.
The following table shows the potential payments upon
termination or a Change of Control of the Company,
as defined in her Executive Agreement, for Cindy B. Taylor, the
Companys President and Chief Executive Officer. Per
Mrs. Taylors Executive Agreement, if Mrs. Taylor
is terminated following a Change of Control (other than
termination by the Company for Cause, as defined in the
agreement, or by reason of death or disability), or if
Mrs. Taylor voluntarily terminates her employment for
Good Reason, as defined in the agreement, during the
24-month
period following a corporate Change of Control, she is entitled
to receive a lump sum severance payment of two and one half
times the sum of her base salary and the target annual bonus
earned by her pursuant to the annual incentive compensation
plan. If Mrs. Taylor is terminated by the Company not for
Cause without a Change of Control, she is entitled to receive a
lump sum severance payment of one and a half times the sum of
her base salary and the target annual bonus earned by her
pursuant to the annual incentive compensation plan.
Pursuant to the other Named Executive Officers Executive
Agreements, if any of them is terminated following a Change of
Control (other than termination by the Company for Cause, as
defined in the agreement, or by reason of death or disability),
or if any of them voluntarily terminate their employment for
Good Reason, as defined in the agreement, during the
24-month
period following a corporate Change of Control, then the
affected Named Executive Officer is entitled to receive a lump
sum severance payment of two times the sum of his base salary
and the target annual bonus earned by him pursuant to the annual
incentive compensation plan. If any of them are terminated by
the Company not for Cause without a Change of Control, he is
entitled to receive a lump sum severance payment of one times
the sum of his base salary and the target annual bonus earned by
him pursuant to the annual incentive compensation plan.
Generally, each participant in the Deferred Compensation Plan
will receive, at the participants election, a lump sum
distribution or installment payments only upon termination of
the participants service with the Company and its
affiliates. For Key Employees, as defined in IRS
regulations, distributions of deferrals made after 2004 are
delayed at least six months. Any other withdrawals by the
participant will be made in good faith compliance with 409A
limitations.
Shown in the table below are potential payments upon the assumed
involuntary not for Cause termination of the named executive
officers and upon an involuntary not for Cause termination
following a Change of Control of the Company as of
December 31, 2010. Only one of the named executive
officers potential payments as of
29
December 31, 2010 would trigger a gross up payment for
excise taxes that would be reimbursed under their Executive
Agreement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cindy B. Taylor
|
|
|
Bradley J. Dodson
|
|
|
Charles J. Moses
|
|
|
Ron R. Green
|
|
|
Christopher E. Cragg
|
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
Not for
|
|
|
|
|
|
Not for
|
|
|
|
|
|
Not for
|
|
|
|
|
|
Not for
|
|
|
|
|
|
Not for
|
|
|
|
|
|
|
|
|
|
Cause
|
|
|
|
|
|
Cause
|
|
|
|
|
|
Cause
|
|
|
|
|
|
Cause
|
|
|
|
|
|
Cause
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
|
|
|
|
without a
|
|
|
with a
|
|
|
without a
|
|
|
with a
|
|
|
without a
|
|
|
with a
|
|
|
without a
|
|
|
with a
|
|
|
without a
|
|
|
with a
|
|
|
|
|
|
|
Change of
|
|
|
Change of
|
|
|
Change of
|
|
|
Change of
|
|
|
Change of
|
|
|
Change of
|
|
|
Change of
|
|
|
Change of
|
|
|
Change of
|
|
|
Change of
|
|
|
|
|
Executive benefits and
|
|
Control
|
|
|
Control
|
|
|
Control
|
|
|
Control
|
|
|
Control
|
|
|
Control
|
|
|
Control
|
|
|
Control
|
|
|
Control
|
|
|
Control
|
|
|
|
|
Payments Upon
|
|
on
|
|
|
on
|
|
|
on
|
|
|
on
|
|
|
on
|
|
|
on
|
|
|
on
|
|
|
on
|
|
|
on
|
|
|
on
|
|
|
|
|
Separation
|
|
12/31/2010
|
|
|
12/31/2010
|
|
|
12/31/2010
|
|
|
12/31/2010
|
|
|
12/31/2010
|
|
|
12/31/2010
|
|
|
12/31/210
|
|
|
12/31/2010
|
|
|
12/31/2010
|
|
|
12/31/2010
|
|
|
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
|
$
|
1,566,000
|
|
|
$
|
2,610,000
|
|
|
$
|
503,750
|
|
|
$
|
1,007,500
|
|
|
$
|
448,000
|
|
|
$
|
896,000
|
|
|
$
|
582,000
|
|
|
$
|
1,164,000
|
|
|
$
|
480,000
|
|
|
$
|
960,000
|
|
|
|
|
|
Stock Options(1)
|
|
$
|
|
|
|
$
|
6,165,686
|
|
|
$
|
|
|
|
$
|
1,882,144
|
|
|
$
|
|
|
|
$
|
1,197,445
|
|
|
$
|
|
|
|
$
|
2,602,775
|
|
|
$
|
|
|
|
$
|
1,403,113
|
|
|
|
|
|
Stock Awards(1)
|
|
$
|
4,076,188
|
|
|
$
|
4,076,190
|
|
|
$
|
1,727,226
|
|
|
$
|
1,727,226
|
|
|
$
|
464,653
|
|
|
$
|
464,653
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,225,721
|
|
|
$
|
1,225,721
|
|
|
|
|
|
Benefits & Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health and Welfare Benefits(2)
|
|
$
|
15,914
|
|
|
$
|
23,649
|
|
|
$
|
7,995
|
|
|
$
|
15,914
|
|
|
$
|
7,995
|
|
|
$
|
15,846
|
|
|
$
|
6,099
|
|
|
$
|
12,141
|
|
|
$
|
7,995
|
|
|
$
|
15,846
|
|
|
|
|
|
Outplacement Assistance(3)
|
|
$
|
|
|
|
$
|
87,000
|
|
|
$
|
|
|
|
$
|
48,750
|
|
|
$
|
|
|
|
$
|
42,000
|
|
|
$
|
|
|
|
$
|
54,563
|
|
|
$
|
|
|
|
$
|
45,000
|
|
|
|
|
|
Tax Gross Up
|
|
$
|
|
|
|
$
|
|
|
|
$
|
475,282
|
|
|
$
|
664,264
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
(1) |
|
Reflects the value of unvested stock options or restricted stock
awards as of December 31, 2010 that would be accelerated as
a result of the separation event based on the Companys
stock price of $64.09. |
|
(2) |
|
Reflects the estimated lump-sum present value of all future
premiums which will be paid on behalf of the Named Executive
Officer under the Companys health and welfare benefit
plans. |
|
(3) |
|
Reflects the amount of estimated outplacement assistance that
would be provided for the Named Executive Officer pursuant to
the Executive Agreement. |
DIRECTOR
COMPENSATION
Directors who are also our employees do not receive a retainer
or fees for service on our Board of Directors or any committees.
Directors who were not employees receive an annual retainer of
$40,000 and fees of $1,500 for attendance at each Board of
Directors or committee meeting. The non-employee director who
serves as the Chairman of the Board receives an additional
annual retainer of $80,000, which is paid quarterly 50% in cash
and 50% in Company stock, and each non-employee director who
serves as the chairman of the Compensation Committee or the
Nominating & Corporate Governance Committee receives
an additional annual retainer of $10,000. The chairman of the
Audit Committee receives an additional annual retainer of
$15,000. Members of the Nominating & Corporate
Governance Committee and the Compensation Committee, other than
the Committee Chairs, receive an additional annual retainer of
$5,000 and members of the Audit Committee, other than the
Committee Chairs, receive an additional annual retainer of
$7,500. Under current guidelines, newly elected directors
receive restricted stock awards of the Companys common
stock valued at $110,000 after their initial election. Directors
receive additional restricted stock awards of the Companys
common stock valued at $110,000 at each annual
stockholders meeting after which they continue to serve.
The directors restricted stock awards are valued on the
award date based on the closing stock price and vest on the
earlier of one year or the next annual stockholders
meeting date following the date of grant. Directors are subject
to the Companys stock ownership guidelines pursuant to
which they are expected to retain all restricted stock award
shares remaining after payment of applicable taxes until
retirement or until leaving the Board of Directors. Prior to
2005, directors received options to purchase shares of our
common stock pursuant to the terms of the 2001 Equity
Participation Plan. All of our directors are reimbursed for
reasonable
out-of-pocket
expenses incurred in attending meetings of our Board of
Directors or committees and for other reasonable expenses
related to the performance of their duties as directors,
including attendance at pertinent continuing education programs
and training.
30
DIRECTOR
SUMMARY COMPENSATION FOR THE CALENDAR YEAR 2010
The table below summarizes the compensation paid by the Company
to non-employee directors for the fiscal year ended
December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or
|
|
|
|
|
|
|
Paid in Cash
|
|
Stock Awards
|
|
Total
|
Name
|
|
($)
|
|
($)(1)
|
|
($)
|
|
Martin A. Lambert
|
|
|
63,000
|
|
|
|
110,000
|
|
|
|
173,000
|
|
S. James Nelson
|
|
|
70,000
|
|
|
|
110,000
|
|
|
|
180,000
|
|
Mark G. Papa
|
|
|
76,000
|
|
|
|
110,000
|
|
|
|
186,000
|
|
Gary L. Rosenthal
|
|
|
87,500
|
|
|
|
110,000
|
|
|
|
197,500
|
|
Christopher T. Seaver
|
|
|
70,000
|
|
|
|
110,000
|
|
|
|
180,000
|
|
Douglas E. Swanson
|
|
|
53,500
|
|
|
|
110,000
|
|
|
|
163,500
|
|
William T. Van Kleef
|
|
|
77,500
|
|
|
|
110,000
|
|
|
|
187,500
|
|
Stephen A. Wells
|
|
|
115,500
|
|
|
|
150,000
|
|
|
|
265,000
|
|
As of December 31, 2010, the aggregate number of shares of
stock awards and the aggregate number of shares underlying
option awards held by directors are as follows:
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
Option Awards
|
Name
|
|
#
|
|
#
|
|
Martin A. Lambert
|
|
|
17,261
|
|
|
|
15,000
|
|
S. James Nelson
|
|
|
17,261
|
|
|
|
5,000
|
|
Mark G. Papa
|
|
|
16,059
|
|
|
|
|
|
Gary L. Rosenthal
|
|
|
17,261
|
|
|
|
|
|
Christopher T. Seaver
|
|
|
9,706
|
|
|
|
|
|
Douglas E. Swanson
|
|
|
11,734
|
|
|
|
|
|
William T. Van Kleef
|
|
|
13,825
|
|
|
|
|
|
Stephen A. Wells
|
|
|
20,704
|
(2)
|
|
|
|
|
|
|
|
(1) |
|
The amounts in the Stock Awards column reflect the
aggregate grant date fair value of restricted stock awards
granted in 2010 in accordance with SEC rules. Pursuant to SEC
rules, the amounts shown exclude the impact of estimated
forfeitures related to service-based vesting conditions. These
amounts reflect the Companys future accounting expense for
these awards, and do not necessarily correspond to the actual
value that will be recognized by the directors. |
|
(2) |
|
Director stock awards include 3,443 shares issued to
Mr. Wells as part of his fees earned for serving as
Chairman of the Board valued at an aggregate of $40,000 per
year, representing the closing per share prices on the award
dates for shares issued. |
31
SECURITY
OWNERSHIP
The following table sets forth, as of March 31, 2011
(except as otherwise indicated), information regarding common
stock beneficially owned by:
|
|
|
|
|
each person we know to be the beneficial owner of more than five
percent of our outstanding shares of common stock;
|
|
|
|
each of the Named Executive Officers;
|
|
|
|
each of our directors; and
|
|
|
|
all current directors and executive officers as a group.
|
To our knowledge, except as indicated in the footnotes to this
table or as provided by applicable community property laws, the
persons named in the table have sole voting and investment power
with respect to the shares of common stock indicated.
|
|
|
|
|
|
|
|
|
|
|
Beneficial Ownership
|
Name and Address of Beneficial Owners(1)
|
|
Shares
|
|
Percentage(2)
|
|
FMR LLC(3)
|
|
|
7,320,837
|
|
|
|
14.3
|
%
|
82 Devonshire Street
|
|
|
|
|
|
|
|
|
Boston, Massachusetts 02109
|
|
|
|
|
|
|
|
|
BlackRock, Inc(4)
|
|
|
3,118,195
|
|
|
|
6.1
|
%
|
40 East 52nd Street
|
|
|
|
|
|
|
|
|
New York, NY 10022
|
|
|
|
|
|
|
|
|
The Vanguard Group, Inc.(5)
|
|
|
2,852,757
|
|
|
|
5.6
|
%
|
100 Vanguard Blvd.
|
|
|
|
|
|
|
|
|
Malvern, PA 19355
|
|
|
|
|
|
|
|
|
Cindy B. Taylor(6)
|
|
|
367,166
|
|
|
|
|
*
|
Bradley J. Dodson(6)
|
|
|
94,113
|
|
|
|
|
*
|
Charles J. Moses(6)
|
|
|
40,463
|
|
|
|
|
*
|
Ron R. Green(6)
|
|
|
102,550
|
|
|
|
|
*
|
Christopher E. Cragg(6)
|
|
|
111,962
|
|
|
|
|
*
|
Martin A. Lambert(6)
|
|
|
40,239
|
|
|
|
|
*
|
S. James Nelson(6)
|
|
|
27,761
|
|
|
|
|
*
|
Mark G. Papa
|
|
|
18,059
|
|
|
|
|
*
|
Christopher T. Seaver
|
|
|
11,706
|
|
|
|
|
*
|
Gary L. Rosenthal
|
|
|
17,261
|
|
|
|
|
*
|
Douglas E. Swanson
|
|
|
59,760
|
|
|
|
|
*
|
William T. Van Kleef
|
|
|
13,825
|
|
|
|
|
*
|
Stephen A. Wells
|
|
|
52,953
|
|
|
|
|
*
|
All directors and executive officers as a group
(15 persons)(6)
|
|
|
1,016,263
|
|
|
|
1.97
|
%
|
|
|
|
* |
|
Less than one percent. |
|
(1) |
|
Unless otherwise indicated, the address of each beneficial owner
is
c/o Oil
States International, Inc., Three Allen Center, 333 Clay Street,
Suite 4620, Houston, Texas 77002. |
|
(2) |
|
Based on total shares outstanding of 51,169,512 as of
March 31, 2011. |
|
(3) |
|
Based on a Schedule 13G (Amendment No. 8) filed
with the SEC pursuant to the Exchange Act in February 2011, the
shares reported represent the aggregated beneficial ownership by
FMR LLC (FMR) (together with its wholly owned
subsidiaries). FMR may be deemed to have sole voting power with
respect to 516,274 shares and sole dispositive power with
respect to 7,320,837 shares. FMR has no shared voting or
dispositive power with respect to any of the shares shown.
Members of the Edward D. Johnson 3d family own approximately 49%
of the voting power of FMR. |
32
|
|
|
(4) |
|
Based on a Schedule 13G filed pursuant to the Exchange Act
in January 2011, the shares reported represent the aggregate
beneficial ownership by BlackRock, Inc. and certain of its
affiliates. BlackRock, Inc. may be deemed to have sole voting
power and sole dispositive power with respect to
3,118,195 shares. |
|
(5) |
|
Based on a Schedule 13G filed with the SEC pursuant to the
Exchange Act in February 2011, the shares reported represent the
aggregated beneficial ownership by The Vanguard Group, Inc. The
Vanguard Group, Inc. may be deemed to have sole voting power
with respect to 33,547 shares, sole dispositive power with
respect to 2,819,210 shares and shared dispositive power
with respect to 33,547 shares. |
|
(6) |
|
Includes shares that may be acquired within 60 days of
March 31, 2011 through the exercise of options to purchase
shares of our common stock as follows:
Mrs. Taylor 240,316;
Mr. Dodson 48,750; Mr. Moses
7,500; Mr. Green 88,750;
Mr. Cragg 77,500; Mr. Lambert
15,000; Mr. Nelson 5,000; and all directors and
executive officers combined 518,566. |
33
PERFORMANCE
GRAPH
The following performance graph and chart compare the cumulative
total stockholder return on the Companys common stock to
the cumulative total return on the Standard &
Poors 500 Stock Index and Philadelphia OSX Index, an index
of oil and gas related companies that represent an industry
composite of the Companys peer group, for the period from
December 31, 2005 to December 31, 2010. The graph and
chart show the value at the dates indicated of $100 invested at
December 31, 2005 and assume the reinvestment of all
dividends.
COMPARISON
OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Oil States International, Inc., the S&P 500 Index
and the PHLX Oil Service Sector Index
Oil States International NYSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative Total Return
|
|
|
|
12/05
|
|
|
12/06
|
|
|
12/07
|
|
|
12/08
|
|
|
12/09
|
|
|
12/10
|
OIL STATES INTERNATIONAL, INC.
|
|
|
$
|
100.00
|
|
|
|
$
|
101.74
|
|
|
|
$
|
107.70
|
|
|
|
$
|
59.00
|
|
|
|
$
|
124.02
|
|
|
|
$
|
202.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S & P 500
|
|
|
|
100.00
|
|
|
|
|
115.80
|
|
|
|
|
122.16
|
|
|
|
|
76.96
|
|
|
|
|
97.33
|
|
|
|
|
111.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PHLX OIL SERVICE SECTOR (OSX)
|
|
|
|
100.00
|
|
|
|
|
115.32
|
|
|
|
|
174.14
|
|
|
|
|
70.63
|
|
|
|
|
116.93
|
|
|
|
|
142.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
$100 invested on 12/31/05 in stock or index-including
reinvestment of dividends. Fiscal year ending December 31. |
|
(1) |
|
This graph is not soliciting material, is not deemed
filed with the SEC and is not to be incorporated by reference in
any filing by us under the Securities Act of 1933, as amended
(the Securities Act), or the Exchange Act, whether made before
or after the date hereof and irrespective of any general
incorporation language in any such filing. |
|
(2) |
|
The stock price performance shown on the graph is not
necessarily indicative of future price performance. Information
used in the graph was obtained from Research Data Group, Inc., a
source believed to be reliable, but we are not responsible for
any errors or omissions in such information. |
Copyright
©
2011, Standard & Poors, a division of The
McGraw-Hill Companies, Inc. All rights reserved.
www.researchdatagroup.com/S&P.htm
34
PROPOSAL 2:
RATIFICATION
OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Audit Committee has appointed Ernst & Young LLP,
independent public accountants, to audit the consolidated
financial statements of the Company for the year ending
December 31, 2010. Ernst & Young LLP has audited
the Companys consolidated financial statements since May
2000. Ratification of Ernst & Young LLP as the
Companys auditors for the year ending December 31,
2011 will require the affirmative vote of the holders of a
majority of the shares present and entitled to be voted at the
Annual Meeting. In the event the appointment is not ratified,
the Audit Committee will consider the appointment of other
independent auditors. Fees paid to Ernst & Young LLP
during the past two fiscal years were as follows:
AUDIT FEE
DISCLOSURE
The following table shows the aggregate fees billed by and paid
to Ernst & Young LLP in each of the last two fiscal
years for the services indicated:
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
2009
|
|
|
|
(In thousands)
|
|
|
Audit Fees
|
|
$
|
1,925
|
|
|
$
|
1,793
|
|
Audit-Related Fees
|
|
|
|
|
|
|
|
|
Tax Fees
|
|
|
837
|
|
|
|
56
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,762
|
|
|
$
|
1,849
|
|
|
|
|
|
|
|
|
|
|
Audit Fees. Audit fees consist primarily of
the audit and quarterly reviews of the consolidated financial
statements, the audit of internal controls over financial
reporting, audits of subsidiaries, statutory audits of
subsidiaries required by governmental or regulatory bodies,
attestation services required by statute or regulation, comfort
letters, consents, assistance with and review of documents filed
with the SEC, work performed by tax professionals in connection
with the audit and quarterly reviews, and accounting and
financial reporting consultations and research work necessary to
comply with generally accepted auditing standards.
Audit-Related Fees. Fees for audit-related
services are fees paid for assurance and related services that
are reasonably related to the performance of the audit or review
of our financial statements not reported above under Audit
Fees and principally include due diligence in connection
with acquisitions and accounting consultations, and
consultations on financial accounting and reporting matters.
Tax Fees. Tax fees include professional
services provided for tax compliance, tax advice and tax
planning, except those rendered in connection with the audit. In
2010, substantially all of the tax fees related to advice
received concerning the tax structure implemented for the
Companys acquisition of The MAC Services Group Limited.
All Other
Fees. None.
The charter of the Audit Committee provides that the Audit
Committee is responsible for the pre-approval of all auditing
services and permitted non-audit services to be performed for
the Company by the independent auditors in order to ensure that
the provision of such services does not impair the independent
auditors independence. The Audit Committee has adopted the
Audit Committee Pre-Approval Policy, effective as of
February 19, 2008, pursuant to which the Audit Committee
has granted general pre-approval of the specified audit,
audit-related, tax and other services. The pre-approval policy
provides that the Audit Committee must be promptly informed of
the provision of any pre-approved services. Services to be
provided by the independent auditor that have not received
general pre-approval as set forth in the pre-approval policy
require specific pre-approval by the Audit Committee and must be
submitted to the Audit Committee by the Chief Financial Officer
or the Senior Vice President, Accounting and Corporate
Secretary. Any such submission must include a statement as to
whether, in such officers view, the request or application
is consistent with maintaining the independence of the
independent auditor in
35
accordance with the SECs rules on auditor independence.
All services rendered by Ernst & Young LLP in 2010
were subject to our predecessor pre-approval policy, which was
not substantively different from our current pre-approval policy
described above. The Company has not agreed to indemnify
Ernst & Young LLP in connection with any of their
work. The Company has a policy that the hiring of any alumni of
the Companys independent accounting firm must be
pre-approved by either the Chief Financial Officer or the Senior
Vice President, Accounting and Corporate Secretary to ensure
compliance with independence regulations.
Representatives of Ernst & Young LLP are expected to
be present at the Annual Meeting and will be offered the
opportunity to make a statement if such representatives desire
to do so. The representatives of Ernst & Young LLP
will also be available to answer questions and discuss matters
pertaining to the Report of Independent Auditors contained in
the financial statements in the Companys Annual Report on
Form 10-K
filed with the SEC on February 22, 2011.
The Board of Directors unanimously recommends that
stockholders vote FOR the ratification of the
appointment of independent accountants.
Audit
Committee Report
The Board of Directors appointed the undersigned directors as
members of the Audit Committee and adopted a written charter
setting forth the procedures and responsibilities of the
committee. Each year, the Audit Committee reviews the charter
and reports to the Board of Directors on its adequacy in light
of applicable NYSE rules. In addition, the Company furnishes an
annual written affirmation to the NYSE relating to Audit
Committee membership, the independence and financial management
expertise of the Audit Committee and the adequacy of the
committee charter.
During the last year, and earlier this year in preparation for
the filing with the SEC of the Companys Annual Report on
Form 10-K
for the year ended December 31, 2010 (the
10-K),
the Audit Committee:
|
|
|
|
|
reviewed and discussed the audited financial statements with
management and the Companys independent auditors;
|
|
|
|
reviewed the overall scope and plans for the audit and the
results of the independent auditors examinations;
|
|
|
|
met with management periodically during the year to consider the
adequacy of the Companys internal controls and the quality
of its financial reporting and discussed these matters with the
Companys independent auditors and with appropriate Company
financial and compliance personnel;
|
|
|
|
discussed with the Companys senior management, independent
auditors and the Internal Audit Director the process used for
the Companys Chief Executive Officer and Chief Financial
Officer to make the certifications required by the SEC and the
Sarbanes-Oxley Act of 2002 in connection with the
10-K and
other periodic filings with the SEC;
|
|
|
|
reviewed and discussed with the independent auditors
(1) their judgments as to the quality (and not just the
acceptability) of the Companys accounting policies,
(2) the written communication required by Independence
Standards Board Standard No. 1, Independence
Discussions with Audit Committees and the independence of
the independent auditors, and (3) the matters required to
be discussed with the committee under auditing standards
generally accepted in the United States, including Statement on
Auditing Standards No. 61, Communication with Audit
Committees;
|
|
|
|
based on these reviews and discussions, as well as private
discussions with the independent auditors and the Companys
Internal Audit Director, recommended to the Board of Directors
the inclusion of the audited financial statements of the Company
and its subsidiaries in the
10-K; and
|
|
|
|
determined that the non-audit services provided to the Company
by the independent auditors (discussed above under the Proposal
to Ratify the Selection of Independent Auditors
(Proposal 2)), are compatible with maintaining the
independence of the independent auditors. The Audit
Committees pre-approval policies and procedures are
discussed above under Proposal 2.
|
36
Notwithstanding the foregoing actions and the responsibilities
set forth in the Audit Committee charter, the charter clarifies
that it is not the duty of the Audit Committee to plan or
conduct audits or to determine that the Companys financial
statements are complete and accurate and in accordance with
generally accepted accounting principles. Management is
responsible for the Companys financial reporting process
including its system of internal controls, and for the
preparation of consolidated financial statements in accordance
with accounting principles generally accepted in the United
States. The independent auditors are responsible for expressing
an opinion on those financial statements and on the
effectiveness of internal control over financial reporting.
Audit Committee members are not employees of the Company or
accountants or auditors by profession or experts in the fields
of accounting or auditing. Therefore, the committee has relied,
without independent verification, on managements
representation that the financial statements have been prepared
with integrity and objectivity and in conformity with accounting
principles generally accepted in the United States, that the
Companys internal controls over financial reporting were
effective as of December 31, 2010 and on the
representations of the independent auditors included in their
report on the Companys financial statements.
The Audit Committee met regularly with management and the
independent and internal auditors, including private discussions
with the independent auditors and the Companys internal
auditors and received the communications described above. The
Audit Committee has also established procedures for (a) the
receipt, retention and treatment of complaints received by the
Company regarding accounting, internal accounting controls or
auditing matters, and (b) the confidential, anonymous
submission by the Companys employees of concerns regarding
questionable accounting or auditing matters. However, this
oversight does not provide us with an independent basis to
determine that management has maintained appropriate accounting
and financial reporting principles or policies, or appropriate
internal controls and procedures designed to assure compliance
with accounting standards and applicable laws and regulations.
Furthermore, our considerations and discussions with management
and the independent auditors do not assure that the
Companys financial statements are presented in accordance
with generally accepted accounting principles or that the audit
of the Companys financial statements has been carried out
in accordance with generally accepted auditing standards.
The information contained in this report shall not be deemed to
be soliciting material or to be filed
with the SEC, nor shall such information be incorporated by
reference into any future filings with the SEC, or subject to
the liabilities of Section 18 of the Exchange Act, except
to the extent that the Company specifically incorporates it by
reference into a document filed under the Securities Act of
1933, as amended, or the Exchange Act.
Respectfully submitted,
Audit Committee
William T. Van Kleef, Chairman
S. James Nelson
Gary L. Rosenthal
Christopher T. Seaver
37
PROPOSAL 3:
ADVISORY
VOTE ON EXECUTIVE COMPENSATION
The Company is asking that you APPROVE the compensation of the
named executive officers as disclosed in this Proxy Statement.
The Companys named executive officers are identified in
the 2010 Summary Compensation Table, and the compensation of the
named executive officers is described on pages 13 through 28.
The Company has long demonstrated its commitment to sound
executive compensation and corporate governance principles,
working to ensure that its practices protect and further the
interests of shareholders.
As discussed in the 2010 Compensation Discussion and Analysis,
the Companys executive compensation programs are designed
to
|
|
|
|
|
Attract, motivate, reward and retain key employees and executive
talent required to achieve corporate strategic plans;
|
|
|
|
reinforce the relationship between strong individual performance
of executives and business results;
|
|
|
|
align the interests of executives with the long-term interests
of stockholders; and
|
|
|
|
design a compensation program that neither promotes overly
conservative actions or excessive risk taking.
|
The compensation program is designed to reward executives for
long-term strategic management and the enhancement of
stockholder value. We believe that the compensation program
design and policies contribute to achievement of the
Companys objectives.
The Companys philosophy regarding the executive
compensation program for our named executive officers and other
senior managers has been to design a compensation package that
provides competitive base salary levels and compensation
incentives that (i) attract and retain individuals of
outstanding ability in these key positions, (ii) recognize
corporate performance relative to established goals and the
performance of the Company relative to the performance of other
companies of comparable size, complexity and quality and against
budget goals, and (iii) support both the short-term and
long-term strategic goals of the Company. The Committee believes
this approach closely links the compensation of the
Companys executives to the execution of the Companys
strategy and the accomplishment of Company goals that coincide
with stockholder objectives.
For the reasons expressed above, the Compensation Committee and
the Board of Directors believe that these policies and practices
are aligned with the interests of our stockholders and reward
for performance.
We are therefore requesting your nonbinding vote on the
following resolution:
Resolved, that the compensation of the Companys
named executive officers as disclosed in this Proxy Statement
pursuant to the compensation disclosure rules of the Securities
and Exchange Commission, including the Compensation Discussion
and Analysis, the executive compensation tables and the
narrative discussion, is approved.
Approval requires the affirmative vote of holders of a majority
of the shares present and entitled to vote at the Annual Meeting.
The Board
Of Directors Recommends A Vote For This
Proposal.
Note: The Company is providing this advisory
vote as required pursuant to Section 14A of the Exchange
Act (15 U.S.C.
78n-1). The
stockholder vote will not be binding on the Company or the Board
of Directors, and it will not be construed as overruling any
decision by the Company or the Board of Directors or creating or
implying any change to, or additional, fiduciary duties for the
Company or the Board of Directors.
38
PROPOSAL 4:
ADVISORY
VOTE REGARDING THE FREQUENCY OF
AN
ADVISORY VOTE ON EXECUTIVE COMPENSATION
This proposal gives stockholders the opportunity to indicate how
frequently we should seek an advisory vote on our executive
compensation, such as Proposal 3 above. By voting on this
Proposal 4, stockholders can indicate whether they would
prefer an advisory vote on executive compensation every one,
two, or three years.
After careful consideration of this proposal, our Board of
Directors has determined that an advisory vote on executive
compensation that occurs each year is the most appropriate
alternative for Oil States International, Inc.; and therefore,
our Board of Directors recommends that you vote for a one-year
interval for the advisory vote on executive compensation.
In formulating its recommendation, our Board of Directors
considered that an annual advisory vote on executive
compensation will allow our stockholders to provide us with
their direct input on our compensation objectives, policies and
practices as disclosed in the proxy statement every year.
You may cast your vote on your preferred voting frequency by
choosing the option of one year, two years, three years or
abstain from voting when you vote in response to the resolution
set forth below.
RESOLVED, that the option of every one year, two years, or
three years that receives the highest number of votes cast for
this resolution will be determined to be the frequency preferred
by stockholders for which the Company is to hold an advisory
stockholder vote to approve the compensation paid to the named
executive officers, as disclosed pursuant to Item 402 of
Regulation S-K,
including the Compensation Discussion and Analysis, compensation
tables and narrative discussion.
The option of one year, two years or three years that receives
the highest number of votes cast by stockholders will be the
frequency for the advisory vote on executive compensation that
has been selected by stockholders. However, because this vote is
advisory and not binding on our Board of Directors or Oil States
International, Inc. in any way, our Board of Directors may
decide that it is in the best interests of our stockholders and
Oil States International, Inc. to hold an advisory vote on
executive compensation more or less frequently than the option
approved by our stockholders.
Approval requires the affirmative vote of holders of a majority
of shares present and entitled to vote at the Annual Meeting.
The Board of Directors unanimously recommends a vote for the
option of every ONE YEAR as the frequency with which
stockholders are provided an advisory vote on the compensation
of our named executive officers.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires executive
officers and directors and persons who own more than 10% of our
common stock to file initial reports of ownership and changes in
ownership with the SEC and the NYSE. Such persons are also
required to furnish the Company with copies of all
Section 16(a) reports they file. Based solely on our review
of the copies of such reports received by us and representations
from certain reporting persons, we believe that during 2010, all
of our directors, executive officers and beneficial owners of
more than 10% of our common stock complied with all
Section 16(a) filing requirements applicable to them.
STOCKHOLDERS
SHARING THE SAME ADDRESS
The Company is sending only one copy of its proxy statement to
stockholders who share the same address, unless they have
notified the Company that they want to continue receiving
multiple copies. This practice, known as
householding, is designed to reduce duplicate
mailings and save significant printing and postage costs as well
as natural resources.
39
If you received householded mailing this year and you would like
to have additional copies of the Companys proxy statement
mailed to you, or you would like to opt out of this practice for
future mailings, please submit your request to the Secretary of
the Company either orally or in writing. You may also contact
the Company if you received multiple copies of the Special
Meeting materials and would prefer to receive a single copy in
the future.
STOCKHOLDER
PROPOSALS
In addition, the Companys Bylaws provide that only such
business as is properly brought before the 2011 annual meeting
of stockholders will be conducted. For business to be properly
brought before the meeting or nominations of persons for
election to the Board of Directors to be properly made at the
annual meeting by a stockholder, notice must be received by the
Secretary at the Companys offices not later than the close
of business on December 17, 2011. For a proposal to be
included in the proxy material for the 2012 annual meeting of
stockholders, it must be received by the Secretary at the
Companys offices not later than the close of business on
December 17, 2011. Please see Committees and
Meetings Nominating & Corporate Governance
Committee for information regarding the submission of
director nominees by stockholders. No stockholder proposal was
received for inclusion in this proxy statement.
By Order of the Board of Directors,
Robert W. Hampton
Corporate Secretary
Houston, Texas
April 1, 2011
IT IS IMPORTANT THAT PROXIES BE RETURNED
PROMPTLY. WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING IN PERSON, YOU ARE URGED TO COMPLETE, SIGN, AND RETURN
THE PROXY IN THE ENCLOSED POSTAGE-PAID, ADDRESSED ENVELOPE.
40
OIL STATES INTERNATIONAL, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 17, 2011
The undersigned hereby (1) acknowledges receipt of the Notice of Annual Meeting
of Stockholders of Oil States International, Inc. (the Company) to be held on May
17, 2011, and the Proxy Statement in connection therewith, each dated April 1, 2011
and (2) constitutes and appoints Cindy B. Taylor and Bradley J. Dodson and each of
her or his attorneys and proxies, with full power of substitution to each, for and in
the name, place, and stead of the undersigned, to vote, and to act with respect to,
all of the shares of common stock of the Company standing in the name of the
undersigned or with respect to which the undersigned is entitled to vote and act at
that meeting and at any meeting(s) (Adjournment(s)) to which that meeting is
adjourned, as indicated on reverse:
PLEASE SIGN BELOW, DATE, AND RETURN PROMPTLY.
Dated:
, 2011
Signed:
IMPORTANT: Please sign exactly as name appears to the left. When signing on behalf
of a corporation, partnership, estate, trust, or in other representative capacity,
please sign named and title. For joint accounts, each joint owner must sign.
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE OF THIS CARD. IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR
THE RATIFICATION OF THE SELECTION OF AUDITORS, FOR THE APPROVAL OF THE ADVISORY VOTE
ON EXECUTIVE COMPENSATION AND FOR ONE YEAR ON THE VOTE REGARDING FREQUENCY OF
ADVISORY VOTE ON EXECUTIVE COMPENSATION. IN ORDER FOR THIS PROXY TO BE VALID, IT
MUST BE SIGNED ON THE REVERSE SIDE OF THIS CARD.
PROXY
|
|
|
|
|
|
|
1.
|
|
ELECTION OF DIRECTORS |
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR all nominees listed below except as |
|
|
|
|
|
|
|
|
|
|
|
|
|
Marked to the contrary below. o |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Christopher T. Seaver
|
|
WITHHOLD AUTHORITY to vote for all |
|
|
|
|
|
|
|
|
|
|
|
(2) Douglas E. Swanson
|
|
nominees listed to the left. o |
|
|
|
|
|
|
|
|
|
|
|
(3) Cindy B. Taylor |
|
|
|
|
|
|
|
|
|
|
|
|
|
INSTRUCTION: To withhold authority to vote |
|
|
|
|
|
|
|
|
|
|
|
|
|
for any individual nominee, write the number |
|
|
|
|
|
|
|
|
|
|
|
|
|
of the nominee in the space provided. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. |
|
RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT ACCOUNTANTS FOR
THE COMPANY FOR THE CURRENT YEAR: |
FOR o AGAINST o ABSTAIN o
3. |
|
PROPOSAL TO APPROVE THE ADVISORY VOTE RELATING TO EXECUTIVE COMPENSATION: |
FOR o AGAINST o ABSTAIN o
4. |
|
EXECUTIVE COMPENSATION PROPOSAL TO APPROVE THE ADVISORY VOTE REGARDING FREQUENCY
OF ADVISORY VOTE ON: |
|
|
|
|
|
|
|
EVERY 1
|
|
EVERY 2
|
|
EVERY 3 |
|
|
YEAR
|
|
YEARS
|
|
YEARS
|
|
ABSTAIN |
o
|
|
o
|
|
o
|
|
o |
5. |
|
IN THE DISCRETION OF THE PROXIES ON ANY OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENTS(S) THEREOF. |
If you plan to attend the Annual Meeting, check this box: o