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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): DECEMBER 21, 2004
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RPC, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 1-8726 58-1550825
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.
2170 PIEDMONT ROAD NE, ATLANTA, GEORGIA 30324
(Address of principal executive office) (zip code)
Registrant's telephone number, including area code: (404) 321-2140
N/A
(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Amended and Restated Supplemental Retirement Plan.
On December 21, 2004, RPC, Inc. (the "Company") amended and restated the
RPC, Inc. Supplemental Retirement Plan (the "Plan"). The amendments become
effective on January 1, 2005. All deferrals of compensation and all company
contributions under the Plan, including those made prior to January 1, 2005 but
not yet distributed, will be subject to the new terms. The Company intends the
Plan, as restated, to comply with the provisions of the American Jobs Creation
Act of 2004 (which added Section 409A to the Internal Revenue Code and imposed
new requirements on deferred compensation arrangements), and the provisions of
the Plan will be construed in a manner consistent with those requirements.
Participants. The employees eligible to participate in the Plan are those
who are both A) eligible to participate in top hat plans generally under ERISA
and B) selected by the Committee administrating the Plan (the "Committee"). The
Committee must consist of at least two officers and/or directors of the Company
appointed by the Company's Compensation Committee. The current members of the
Committee are Richard A. Hubbell, President and Chief Executive Officer, and Ben
M. Palmer, Vice President, Chief Financial Officer and Treasurer.
All of the "Named Executive Officers" of the Company have been invited by
the Committee to participate with respect to fiscal year 2005. R. Randall
Rollins, Chairman of the Board, declined to participate in the Plan. The other
Named Executive Officers (named in the table below) will participate with
respect to fiscal year 2005. Mr. Hubbell's participation is limited to the
"Enhanced Benefit Contribution" described in more detail below.
PARTICIPATING NAMED EXECUTIVE OFFICERS:
Name Title
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Richard A. Hubbell President and Chief Executive Officer
Linda H. Graham Vice President and Secretary
Ben M. Palmer Vice President, Chief Financial Officer,
and Treasurer
Ms. Graham is also a Participant in the Supplemental Retirement Plan of Marine
Products Corporation ("Marine Products"), which is described in a Current Report
on Form 8-K filed with the U.S. Securities and Exchange Commission on this date
by Marine Products Corporation. None of the Participating Named Executive
Officers has any material relationships with the Company or any of its
affiliates, including Marine Products, apart from their respective relationships
as directors and employees of the Company and its affiliates, ownership of
Company and affiliate securities, and as otherwise previously disclosed in the
Company's last-filed annual proxy statement. Each of the above-named Named
Executive Officers serves in the same capacity with Marine Products, an
affiliate of RPC.
Salary and Bonus Deferrals. Participants may defer up to 25% of base salary
and up to 50% of their annual bonus and commissions, subject to an overall
maximum of $500,000 in any given year. However, deferral amounts may be reduced
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if necessary to allow the Company to satisfy withholding and similar
obligations. Participants must make their deferral elections for base salary
during a single annual enrollment period ending prior to the end of the calendar
year preceding the year in which the services will be performed (or in such
other time and manner that complies with Section 409A of the Code and any
regulatory or other guidance issued thereunder). Deferral elections for
performance-based compensation must be made at least six months before the end
of the performance period. Deferral elections for all other compensation must be
made no later than the close of the calendar year prior to the beginning of the
period during which services are performed for which the compensation is paid,
unless the Committee determines otherwise.
Company Contributions. The Company makes certain "Enhanced Benefit
Contributions" under the Plan on behalf of certain Participants of long service
to the Company who were forty years of age or older on December 31, 2002. The
Company makes the "Enhanced Benefit Contributions" (as disclosed in the
Company's last filed annual proxy statement) in lieu of the benefits that
previously accrued under the Company's "Retirement Income Plan," which existed
prior to the spin-off from the Company of Marine Products. The Company ceased to
accrue additional benefits under the Retirement Income Plan effective March 31,
2002. Enhanced Benefit Contributions are made annually, for a maximum of 7
years, subject to the Participant's continued employment with the Company.
Comparable payments are made on behalf of qualifying employees through the
Company's 401(k) plan. (Marine Products also makes Enhanced Benefit
Contributions under its Supplemental Retirement and 401(k) plans.)
Mr. Hubbell is the only Named Executive Officer of the Company who receives
an Enhanced Benefit Contribution under the Plan. Mr. Hubbell's Enhanced Benefit
is $26,262.31 per year. The Company has retained absolute discretion to reduce
the amount of Enhanced Benefit Contributions at any time for any reason, and may
elect not to make any such contributions at all. The Company currently expects
that Mr. Hubbell's last Enhanced Benefit Contribution will be made with respect
to fiscal year 2008.
In addition to the Enhanced Benefit Contributions, the Company may make
discretionary contributions on behalf of a Participant under the Plan in any
amount and at any time. The Company has no obligation to make any such
discretionary contribution, has no current plans to make such a contribution on
behalf of any Named Executive Officer, and has never made any such contribution
under the Supplemental Retirement Plan since its creation in August of 2002.
Account Maintenance, Accounting and Earnings. The Company maintains
bookkeeping accounts with respect to all deferrals and Company contributions.
The accounts are entirely unfunded. Participants are generally 100% vested in
the amounts credited to their accounts, but discretionary contributions may be
subject to a vesting schedule. Accounts are credited with hypothetical earnings
based on certain "Deemed Investments." Participants select Deemed Investments
from a list of third-party investment vehicles selected by the Committee and
specify an allocation among them. Subject to restrictions on the timing and
number of permitted changes established by the Committee, and other conditions
specified in the Plan, Participants may alter the allocation of their Deemed
Investments on any business day. Altered allocations generally become effective
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on the first business day following the date the change is requested by the
Participant.
Account values are calculated as if the funds from deferrals and Company
contributions had been converted into shares or other ownership units of
selected Deemed Investments by purchasing (or selling, where relevant) same at
the current purchase price of the relevant Deemed Investment at the time of the
Participant's selection. No such purchases are actually made on behalf of
Participants, and Participants do not have any real or beneficial ownership in
the actual securities which a Deemed Investment tracks.
Plan benefits are unsecured general obligations of the Company to the
Participants, and these obligations rank in parity with the Company's other
unsecured and unsubordinated indebtedness. Thus, deferrals of compensation and
Company contributions are recorded on the Company's balance sheet as pension
liabilities, and changes in the fair value of these liabilities are recorded as
compensation cost on the Company's statement of income.
The Company has established a "rabbi trust," which it uses to voluntarily
set aside amounts that approximate deferrals and contributions under the Plan.
The purpose of the trust is to use the amounts set aside in the trust and the
earnings thereon to fund distributions under the Plan. Trust assets cannot be
used for any other purpose unless the Company becomes insolvent, in which event
they may become subject to claims of the Company's other creditors. Trust assets
are marked to market and reported as "other assets" on the Company's balance
sheet. However, because the trust is nonrevocable, trust assets are no longer
available to fund future operations by the Company. There is no tax deduction
available for amounts contributed to the trust or earnings thereon, nor is there
a deduction at the time compensation is deferred under the Plan. However, the
Company will generally be entitled to deduct amounts distributed to a
Participant when the Participant includes the amounts distributed in his or her
income for federal income tax purposes, which would generally be expected to
occur at the time the distribution is made.
While the Company expects the funds in the trust to be sufficient to fund
its liability to Participants under the Plan, there is no guarantee that trust
assets will always be sufficient to fund Plan benefits. To the extent that the
Company's obligations under the Plan exceed assets available under the trust,
the Company would be required to seek additional funding sources to fund its
liability under the Plan. The Company may decide to cease future funding of the
trust, or alter the way in which funds held thereby are invested, at any time
for any reason.
Prior to the restatement of the Plan, the Company invested assets held by
the rabbi trust in mutual funds, as previously disclosed. The amount of trust
assets and liabilities under the Plan have remained substantially equal.
However, tax liabilities accruing with respect to earnings on trust assets were
not charged to the trust. In connection with the restatement of the Plan, the
Company has altered the investment policies of the trust in a way that is
designed to prevent trust earnings from producing taxable income to the Company.
Distributions. Generally, distributions of deferred amounts are made upon
the earliest of death, disability, retirement or other termination of employment
(a "Termination Event"). However, for deferrals of salary and bonus (but not
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Company contributions), Participants may designate a distribution date which is
prior to a Termination Event (an "In Service Distribution Date"). In order to
designate an In Service Distribution Date, the designation must be made at the
time the Participant elects to defer the compensation. A Participant may not
have more than three In Service Distribution Dates designated at any given time.
Subject to certain requirements imposed by Section 409A of the Internal
Revenue Code, Participants may extend an In Service Distribution Date to a later
In Service Distribution Date. However, the extension must be for at least five
years, and it must be made at least 13 months before the unextended In Service
Distribution Date. If a Termination Event occurs before an In Service
Distribution Date, all amounts will be distributable upon the Termination Event,
regardless of any In Service Distribution Dates that may have been designated.
Generally, a Participant may elect to receive distributions under the Plan
in installments or lump sum payments. However, account balances of less than
$10,000 must be paid in a single lump sum.
Material Changes. The material amendments to the Plan include the
following:
o Certain key employees (which includes all of the Company's current
Named Executive Officers) must now wait 6 months after separation of
service before receiving termination payments.
o Participants may now select In Service Distribution Dates for
deferrals, subject to certain limitations set forth in the Plan and
described further above.
o The amount of compensation that may be deferred under the Plan has
been increased from the previous limitations of 20% of annual
compensation and an overall cap of $200,000 in a given year.
In addition, as noted above, the Company has altered the investment strategy of
the related rabbi trust (which, as discussed above, was created to provide a
source of funding for Plan benefits) in a way designed to prevent trust earnings
from producing taxable income to the Company.
A copy of the Plan is filed with this Current Report on Form 8-K as Exhibit
99.1 and is incorporated herein by reference.
ITEM 1.02 TERMINATION OF MATERIAL DEFINITIVE AGREEMENT.
On December 21, 2004, the Company amended and restated the Plan as
described in Item 1.01 above, the contents of which are incorporated herein by
reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
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(b) Pro Forma Financial Information
(c) Exhibits.
Exhibit
Number Description
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99.1 RPC, Inc. Supplemental Retirement Plan, as amended and
restated on December 21, 2004
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, RPC,
Inc. has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
RPC, INC.
Date: December 22, 2004 /s/Ben M. Palmer
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Ben M. Palmer, Vice President,
Chief Financial Officer and Treasurer
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