Form 10-K - Amendment No. 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-K/A
Amendment No. 1
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
Commission file number 1-2199
ALLIS-CHALMERS ENERGY INC.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation or organization)
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39-0126090
(I.R.S. Employer
Identification No.) |
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5075 WESTHEIMER, SUITE 890
HOUSTON, TEXAS
(Address of principal executive offices)
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77056
(Zip code) |
(713) 369-0550
Registrants telephone number, including area code
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
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Title of Security: |
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Name of Exchange: |
Common Stock, par value $0.01 per share
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New York Stock Exchange |
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes o No þ
Indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d). Yes o No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on it
corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or
for such shorter period that the registrant was required to submit and post such files).
Yes o No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer þ
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Non-accelerated filer o
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Smaller reporting company o |
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(Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes o No þ
The aggregate market value of the common equity held by non-affiliates of the registrant,
computed using the closing price of the common stock of $17.80 per share on June 30, 2008, as
reported on the New York Stock Exchange, was approximately $372,126,700 (affiliates included for
this computation only: directors, executive officers and holders of more than 5% of the
registrants common stock).
As of April 5, 2009 there were 35,687,288 shares of common stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
None
Explanatory Note
The purpose of this Amendment No. 1 on Form 10-K/A (the Amendment) is to amend and restate
Part III, Items 10 through 14 of our previously filed Annual Report on Form 10-K for the year ended
December 31, 2008, filed with the Securities Exchange Commission, or SEC, on March 9, 2009 (the
Original Form 10-K), to include information previously omitted in reliance on General Instruction
G to Form 10-K, which provides that registrants may incorporate by reference certain information
from a definitive proxy statement prepared in connection with the election of directors.
Allis-Chalmers Energy Inc. has determined to include such Part III information by amendment of the
Original Form 10-K rather than by incorporation by reference to the proxy statement. Accordingly,
Part III of the Original Form 10-K is hereby amended and restated as set forth below.
As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, which we
refer to as the Exchange Act, new certifications by our Chief Executive Officer and Chief Financial
Officer are being filed as exhibits to this Amendment No. 1 on Form 10-K/A under Item 15 of
Part IV.
There are no other changes to the Original Form 10-K other than those outlined above. This
Amendment does not reflect events occurring after the filing of the Original Form 10-K, nor does it
modify or update disclosures therein in any way other than as required to reflect the amendment set
forth below.
As used herein, Allis-Chalmers, we, our and us may refer to Allis-Chalmers Energy Inc.
or its subsidiaries. The use of these terms is not intended to connote any particular corporate
status or relationships.
TABLE OF CONTENTS
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information Regarding Directors
Upon the closing of our acquisition of DLS Drilling, Logistics & Services Corporation, or DLS,
in August 2006, we entered into an investors rights agreement, which provides, among other things,
that the sellers of DLS have the right to designate two nominees for election to our board of
directors. Effective upon the closing of the DLS acquisition, the DLS sellers (pursuant to their
rights as set forth in the investors rights agreement) designated Alejandro P. Bulgheroni and
Carlos A. Bulgheroni as nominees to the board. In accordance with the provisions of the investors
rights agreement, the board appointed Alejandro P. Bulgheroni and Carlos A. Bulgheroni to the board
upon receipt of the nominations and both directors have been re-elected every year since such
appointment. Alejandro P. Bulgheroni and Carlos A. Bulgheroni are brothers. Effective April 7,
2009, Carlos A. Bulgheroni resigned as a member of the board of directors. At this time, the DLS
sellers have not designated a replacement nominee for Carlos A Bulgheroni.
Set forth below is biographical information for each current director.
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Name |
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Age |
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Director Since |
Ali H. M. Afdhal |
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64 |
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September 2006 |
Munir Akram |
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64 |
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September 2008 |
Alejandro P. Bulgheroni |
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65 |
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August 2006 |
Victor F. Germack |
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69 |
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January 2005 |
James M. Hennessy |
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60 |
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April 2007 |
Munawar H. Hidayatallah |
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64 |
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May 2001 |
John E. McConnaughy, Jr. |
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79 |
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May 2004 |
Robert E. Nederlander |
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76 |
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May 1989 |
Zane Tankel |
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69 |
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February 2007 |
Leonard Toboroff |
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76 |
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May 1989 |
Ali H. M. Afdhal was appointed to our board of directors on September 12, 2006. Since 2001,
Mr. Afdhal has operated and managed his familys international and agricultural interests. Mr.
Afdhal is a graduate of The Institute of Chartered Accountants in England and Wales.
Munir Akram was appointed to our board of directors on September 19, 2008. Mr. Akram served
as the Ambassador of Pakistan to the United Nations from 1988 through 2008. Mr. Akram has
represented Pakistan in numerous United Nations bodies and international conferences, including the
Security Council, the Economic and Social Council, the Conference on Disarmament, the UN Conference
on Trade and Development, and the World Trade Organization. From 1995 to 2002, Mr. Akram
represented Pakistan as Permanent Representative to the United Nations in Geneva (1995-2002) and
later in New York (2002-2008). Prior to that, he filled a number of important diplomatic
positions, such as Deputy Foreign Secretary in Pakistans Ministry of Foreign Affairs (1992-1995);
Ambassador of Pakistan to the European Community, Belgium and Luxembourg (1988-1992); Director for
United Nations, Economic Cooperation and Policy Planning, Ministry of Foreign Affairs (1985-1988);
and as Minister/Counselor in Pakistans Embassy to Japan (Tokyo, 1982-1985). Mr. Akram is a
prolific writer and has lectured widely on various strategic, political and economic issues. In
addition, Mr. Akram holds Masters of Arts and Bachelor of Law degrees from Karachi University.
Alejandro P. Bulgheroni was appointed to our board of directors on August 14, 2006. Mr.
Bulgheroni has served as the Chairman of the Management Committee of Pan American Energy LLC, an
oil and gas company, since November 1997. He also served as the Chairman of Bridas SAPIC from 1988
until 1997. He has served as Vice-Chairman and Executive Vice-President of Bridas Corporation since
1993. He also serves as Chairman, President and CEO of Associated Petroleum Investors Ltd., an
international oil and gas holding company, as Chairman and President of Global Oilfield Holdings
Ltd., as Chairman of Beusa Energy, Inc. and as President and CEO of Nuevo Manantial S.A and
Agroland S.A.. Mr. Bulgheroni is a member of the Petroleum and Gas Argentine Institute and of the
Society of Petroleum Engineers (USA), Vice-President of the Argentine Chamber of Hydrocarbons
Producers (CEPH), Vice-President of the
Argentine-Uruguayan Chamber of Commerce, Counselor of the Argentine Business Council for
Sustainable Development (CEADS) and Vice-President of the Educando Foundation (Argentina). Mr.
Bulgheroni is a graduate of the University of Buenos Aires with a degree in Industrial Engineering.
- 2 -
Victor F. Germack was appointed to our board of directors in January 2005. Mr. Germack has
served since 1980 as President of Heritage Capital Corp., a company engaged in investment banking
services. In addition, Mr. Germack formed, and since 2002 has been President of, RateFinancials
Inc., a company that analyzes and ranks the financial reporting of U.S. public companies.
James M. Hennessy was appointed to our board of directors in April 2007. Mr. Hennessy served
as President and Chief Executive Officer of ING Funds, a United States mutual fund business of ING
Group, from 2001 through 2006. While with ING Funds, Mr. Hennessy oversaw approximately 216 mutual
funds with an aggregate of approximately $92 billion in assets under management. From 2003 through
2007, Mr. Hennessy also served on the board of governors of the Investment Company Institute, which
is the national trade association for the mutual fund industry, representing most of the industrys
assets. Mr. Hennessy is currently on the board of directors of Natural Lighting Company and Munder
Capital Holdings, LLC and is a member of the advisory board of the law, science and technology LLM
program of Arizona State University Law School. In addition, Mr. Hennessy has a law degree from
New York University.
Munawar H. Hidayatallah has served as our Chairman of the Board and Chief Executive Officer
since May 2001, and was President from May 2001 through February 2003. Mr. Hidayatallah was Chief
Executive Officer of OilQuip Rentals, Inc., from its formation in February 2000 until it merged
with us in May 2001. From December 1994 until August 1999, Mr. Hidayatallah was the Chief Financial
Officer and a director of IRI International, Inc., which was acquired by National Oilwell, Inc. in
early 2000. IRI International, Inc. manufactured, sold and rented oilfield equipment to the
oilfield and natural gas exploration and production sectors. From August 1999 until February 2001,
Mr. Hidayatallah worked as a consultant to IRI International, Inc. and Riddell Sports Inc.
John E. McConnaughy, Jr. was appointed to our board of directors in May 2004. Mr. McConnaughy
has served as Chairman and Chief Executive Officer of JEMC Corporation, a personal holding company,
since he founded it in 1985. His career includes positions of management with Westinghouse Electric
and the Singer Company, as well as service as a director of numerous public and private companies.
In addition, he previously served as Chairman and Chief Executive Officer of Peabody International
Corp. and Chairman and Chief Executive Officer of GEO International Corp. He retired from Peabody
in February 1986 and GEO in October 1992. Mr. McConnaughy currently serves on the boards of Wave
Systems Corp. and Arrow Resources Development Inc.
Robert E. Nederlander has served as our director since May 1989. Mr. Nederlander served as our
Chairman of the board of directors from May 1989 to 1993, and as our Vice Chairman of the board of
directors from 1993 to 1996. Mr. Nederlander was a Director of Cendant Corp. from December 1997
and Chairman of the Corporate Governance Committee of Cendant Corp. from 2002 until he resigned in
2006 when he became a director of Realogy Corporation, a public company which was a spinoff from
Cendant Corp. Mr. Nederlander resigned as a director of Realogy Corporation on April 10, 2007,
when the company was sold. Mr. Nederlander was a director of HFS, Inc. from July 1995 to December
1997. Since November 1981, Mr. Nederlander has been President and/or Director of the Nederlander
Organization, Inc., owner and operator of legitimate theaters in New York City. Since December
1998, Mr. Nederlander has been a managing partner of the Nederlander Company, LLC, operator of
legitimate theaters outside New York City. Mr. Nederlander was Chairman of the board of directors
of Varsity Brands, Inc. (formerly Riddell Sports Inc.) from April 1988 to September 2003 and was
the Chief Executive Officer of such corporation from 1988 through April 1, 1993. Mr. Nederlander
has been a limited partner and a director of the New York Yankees since 1973. Mr. Nederlander has
been President of Nederlander Television and Film Productions, Inc. since October 1985. In
addition, Mr. Nederlander was Chairman of the Board and Chief Executive Officer of Mego Financial
Corp. from January 1988 to January 2002, when he sold his stock interest and resigned.
Zane Tankel has served as our director since February 2007. Mr. Tankel is currently Chief
Executive Officer of Apple-Metro, Inc., the New York Metropolitan Area franchisee for Applebees
Neighborhood Grill & Bar, and has been the Chairman of the Board of Apple-Metro, Inc. and Chevys
Fresh Mex Restaurants since 1994. Mr. Tankel also serves as a member of the board of directors of
Mortons Restaurant Group, Inc. and Caribbean Restaurant LLC. Mr. Tankel has also served as
Chairman of the Board of the Metro Chapter of the Young Presidents Organization and was a founder
of the advisory board for the Boys and Girls Choir of Harlem. Mr. Tankel is a graduate of the
University of Pennsylvanias Wharton School of Business.
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Leonard Toboroff has served as our director and Vice Chairman of the board of directors since
May 1989 and served as our Executive Vice President from May 1989 until February 2002. Mr. Toboroff
served as a director and Vice President of Varsity Brands, Inc. (formerly Riddell Sports Inc.) from
April 1988 through October 2003, and he is also a director of Engex Corp, Novoste Corporation and
Special Purpose Acquisition Corporation. Mr. Toboroff has been a practicing attorney continuously
since 1961.
Information Regarding Executive Officers
The following table sets forth the names, ages and positions of each of our current executive
officers, all of whom serve at the request of our board of directors and are subject to annual
appointment by the board of directors:
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Name |
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Age |
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Position |
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Munawar H. Hidayatallah |
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64 |
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Chairman and Chief Executive Officer |
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Victor M. Perez |
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55 |
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Chief Financial Officer |
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Theodore F. Pound III |
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54 |
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General Counsel and Secretary |
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Bruce Sauers |
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45 |
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Vice President and Corporate Controller |
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Terrence P. Keane |
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57 |
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Senior Vice PresidentOilfield Services |
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Mark C. Patterson |
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50 |
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Senior Vice PresidentRental Services |
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David K. Bryan |
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52 |
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President and Chief Executive Officer of Strata Directional Technology LLC |
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Steven Collins |
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57 |
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President of Allis-Chalmers Production Services LLC |
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Gary Edwards |
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57 |
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President of Allis-Chalmers Tubular Services LLC |
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John A. Meyers |
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48 |
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President of AirComp LLC |
Munawar H. Hidayatallah has served as our Chairman of the Board and Chief Executive Officer
since May 2001, and was President from May 2001 through February 2003. Mr. Hidayatallah was Chief
Executive Officer of OilQuip Rentals, Inc. from its formation in February 2000 until it merged with
us in May 2001. From December 1994 until August 1999, Mr. Hidayatallah was the Chief Financial
Officer and a director of IRI International, Inc., which was acquired by National Oilwell, Inc. in
early 2000. IRI International, Inc. manufactured, sold and rented oilfield equipment to the
oilfield and natural gas exploration and production sectors. From August 1999 until February 2001,
Mr. Hidayatallah worked as a consultant to IRI International, Inc. and Riddell Sports Inc.
Victor M. Perez became our Chief Financial Officer in August 2004. From July 2003 to July
2004, Mr. Perez was a private consultant engaged in corporate and international finance advisory.
From February 1995 to June 2003, Mr. Perez was Vice President and Chief Financial Officer of Trico
Marine Services, Inc., a marine transportation company serving the offshore energy industry. Trico
Marine Services, Inc. filed a petition under the federal bankruptcy laws in December 2004. Mr.
Perez was Vice President of Corporate Finance with Offshore Pipelines, Inc., an oilfield marine
construction company, from October 1990 to January 1995, when that company merged with a subsidiary
of McDermott International. Mr. Perez also has 15 years of experience in international energy
banking.
Theodore F. Pound III became our General Counsel in October 2004 and was elected Secretary in
January 2005. For ten years prior to joining us, he practiced law with the law firm of Wilson,
Cribbs & Goren, P.C., Houston, Texas. Mr. Pound has more than 27 years of experience in corporate
law. Mr. Pound has represented us and managed each of our acquisitions beginning in 2001 when
Allis-Chalmers moved into the oilfield services industry.
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Bruce Sauers has served as our Vice President and Corporate Controller since July 2005. From
January 2005 until July 2005, Mr. Sauers was Controller of Blast Energy Inc., an oilfield services
company. From June 2004 until January 2005, Mr. Sauers worked as a financial consultant. From July
2003 until June 2004, Mr. Sauers served as controller for HMT, Inc., an above ground storage tank
company. From February 2003 until July 2003, Mr. Sauers served as assistant controller at Todco, an
offshore drilling contractor. Mr. Sauers has served in a financial management role for
approximately 20 years.
Terrence P. Keane became Senior Vice PresidentOilfield Services in January 2008. Prior to
his promotion, Mr. Keane served as President and Chief Executive Officer of AirComp since its
formation on July 1, 2003. In addition, Mr. Keane served as a consultant to M-I LLC in the area of
compressed air drilling from July 2002 until June 2003. From March 1999 until June 2002, Mr. Keane
served as Vice President and General Manager Exploration, Production and Processing Services for
Gas Technology Institute where Mr. Keane was responsible for all sales, marketing, operations and
research and development in the exploration, production and processing business unit. For 15 years
prior to joining the Gas Technology Institute, Mr. Keane held various positions with Smith
International, Inc., Houston, Texas, most recently in the position of Vice President Worldwide
Operations and Sales for Smith Tool.
Mark C. Patterson is Senior Vice PresidentRental Services and President of Allis-Chalmers
Rental Services LLC. Prior to such time, Mr. Patterson served as Executive Vice President of Sales
and Business Development for Allis-Chalmers Rental Services LLC, organizing, managing and
coordinating the sales effort for the company. Mr. Patterson also previously worked for Oil & Gas
Rental Services, Inc. from August 1989 through December 2006 and has over 18 years experience in
the rental service business and over 27 years experience in the oil and gas service sector of the
oil and gas industry. While with Oil & Gas Rental Services, Inc., Mr. Patterson served as Vice
President of Sales in Houston, managing the Houston sales and marketing efforts.
David K. Bryan has served as President and Chief Executive Officer of Strata Directional
Drilling LLC, our directional drilling segment, since February 2005. Mr. Bryan served as Vice
President of Strata from June 2002 until February 2005. From February 2002 to June 2002, he served
as General Manager, and from May 1999 through February 2002, he served as Operations Manager of
Strata. Mr. Bryan has been involved in the directional drilling sector since 1979.
Steven Collins has served as President of Allis-Chalmers Production Services LLC, or
Production Services, since December 2005. Mr. Collins was our corporate Vice President of Sales and
Marketing from June 2005 to December 2005. From 2002 to 2005, Mr. Collins served as Sales Manager
of Well Testing and Corporate Strategic Accounts Manager for TETRA Technologies. From 1997 to 2002,
Mr. Collins was in sales for Production Well Testers. Mr. Collins has over 25 years experience in
various sales and management positions in the oilfield services industry.
Gary Edwards has served as President of Allis-Chalmers Tubular Services LLC, or Tubular, since
December 2005 after serving as Executive Vice President of Tubular since September 2005. From April
1997 to September 2005, Mr. Edwards served as Operations Manager for International
Hammer/Spindletop Tubular Services, a division of Patterson Services, Inc. Mr. Edwards has been in
the casing and tubing industry for the past 29 years.
John A. Meyers was appointed President of AirComp LLC in January 2008. Prior to such
appointment, Mr. Meyers served as Vice President of Percussion Drilling Systems for AirComp LLC
from November 2006. Mr. Meyers has also served in several managerial roles within the company that
have included Engineering, Manufacturing and Product Management responsibilities. Mr. Meyers has
over 25 years experience in the oilfield service industry including 20 years with Smith
International and Halliburton where he had Field Engineering responsibilities for Roller Cone and
PDC Bits, Directional Drilling, Down-hole Motors, MWD and Air Percussion tools. Mr. Meyers holds
several US Patents pertaining to air hammers and bits and has written numerous industry papers on
percussion drilling.
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Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Exchange Act, directors, certain officers, and beneficial owners of
10% or more of any class of our stock (Reporting Persons) are required from time to time to file
with the SEC and the New York Stock Exchange reports of ownership and changes of ownership.
Reporting Persons are required to furnish us with copies of all Section 16(a) reports they file.
Based solely on our review of forms and written representations received from Reporting Persons
with respect to the fiscal year ended December 31, 2008, we believe that all filing requirements
applicable to our
officers, directors and greater than 10% stockholders have been met, except for a late Form 4
filing by Bruce Sauers in connection with the grant of restricted stock in December 2008, a late
Form 4 filing by Zane Tankel in connection with the purchase of stock in February 2008, May 2008
and June 2008, a late Form 4 by Munawar H. Hidayatallah in connection with the vesting of
performance shares in May 2008, a late Form 3 filing by Munir Akram in connection with being
elected a director in September 2008, and a late Form 4 by Carlos A. Bulgheroni in connection with
the grant of restricted stock in December 2008. In addition, John A. Meyers inadvertently omitted
one transaction on his Form 3 for February 2008, which was reported on an amended Form 3 filed in
March 2008.
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics applicable to all employees and
directors of the Company and each of its subsidiaries, including our principal executive officer,
principal financial officer, principal accounting officer and controller, and persons performing
similar functions. The purpose of the Code of Business Conduct and Ethics is: (i) to deter
wrongdoing; (ii) to promote honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interest between personal and professional relationships; (iii) to promote
full, fair, accurate, timely, and understandable disclosure in reports and documents that we file
with the SEC or otherwise communicate to the public; (iv) to promote compliance with applicable
governmental laws, rules and regulations; (v) to promote prompt internal reporting of violations of
the code to an appropriate person; and (vi) to promote accountability for adherence to the code.
We will provide a copy of the Code of Business Conduct and Ethics without charge to any person
upon request by writing our Corporate Secretary at 5075 Westheimer, Suite 890, Houston, Texas
77056. The Code of Business Conduct and Ethics is available on our website at www.alchenergy.com.
Audit Committee
The Audit Committee currently consists of four directors, Messrs. McConnaughy and Germack, who
serve as Co-Chairmen, and Messrs. Hennessy and Nederlander. All of our Audit Committee members are
independent under the applicable New York Stock Exchange, or NYSE, and SEC rules regarding audit
committee membership. Our board of directors has determined that Mr. Germack qualifies as an audit
committee financial expert under applicable SEC rules and regulations governing the composition of
the Audit Committee.
The Audit Committee assists our board of directors in fulfilling its oversight responsibility
by overseeing and evaluating (i) the conduct of our accounting and financial reporting process and
the integrity of our financial statements; (ii) the functioning of our systems of internal
accounting and financial controls; (iii) the performance and independence of our internal audit
function and (iv) the engagement, compensation, performance, qualifications and independence of our
independent auditors.
The independent auditors have unrestricted access and report directly to the Audit Committee.
The Audit Committee meets privately with, and has unrestricted access to, the independent auditors
and all of our personnel.
Our board of directors has adopted a written Audit Committee charter. A copy of the Audit
Committee charter is available on our website (www.alchenergy.com) and we will provide a
copy free of charge to any stockholder who requests it by writing our Corporate Secretary at 5075
Westheimer, Suite 890, Houston, Texas 77056.
ITEM 11. EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The following section is intended to help our stockholders understand our executive
compensation philosophy, objectives and policies and it is also intended to provide context for the
compensation information (set forth in detail in the compensation tables and narrative discussion
below) for the following persons, who are our named executive officers as defined by the SEC, for
the fiscal year ended December 31, 2008:
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Munawar H. Hidayatallah Chairman and Chief Executive Officer |
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Victor M. Perez Chief Financial Officer |
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David K. Bryan President and Chief Executive Officer of Strata Directional Technology
LLC |
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Terrence P. Keane Senior Vice President Oilfield Services |
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Mark C. Patterson Senior Vice President Rental Services |
Executive Compensation Philosophy
It is critical to our long-term success and growth that our business is managed by highly
capable leaders with the experience and dedication to oversee a growing and changing organization.
To achieve this objective, our compensation philosophy is to recruit, retain and motivate talented
and effective employees. We focus on traditional compensation principles that are geared to both
our short-term and long-term performance. We adhere to the following compensation principles which
influence the design and administration of our executive compensation program:
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Compensation decisions should reflect our strategy We have experienced rapid growth in
recent years. As we have grown, we have made compensation decisions that reflect our size
and growth. |
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Total compensation should reflect performance Our compensation program provides
incentives that reward executives for achieving short-term as well as long-term financial
and operational goals. Our total compensation program is managed so that a significant
amount of executive compensation is considered at risk, and conditioned on performance. |
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Compensation levels must be competitive Demand for qualified executive talent in our
industry is high, while the supply for this talent is limited. The level of base salaries,
short-term incentive opportunities, and long-term incentive opportunities established for
our named executive officers are intended to provide a total target compensation
opportunity in the range of the market median for executives in comparable positions and
markets in which we compete for talent. |
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Executive interests should be aligned with those of our stockholders The value of our
executive compensation programs should generally vary as our stockholders interests
increase or decrease in value. Through the use of performance related annual incentives,
stock option grants, and restricted stock grants, we attempt to align the long-term
interests of our executives with those of our stockholders by linking a portion of
executive compensation to our long-term financial performance. |
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Compensation programs should motivate executives to stay with us over the long-term In
addition to providing compensation that is competitive with the market, we attempt to
provide incentive for our executives to stay with the company. We use time vested option
and restricted stock awards in our compensation program, providing retention incentives for
our executives to stay with us. |
Compensation Program Objectives
The following chart shows each element of our compensation program, the form in which the
element is delivered to the executive, its objective, and any performance metric tied to each
element.
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Element |
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Form of Compensation |
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Objectives |
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Base Pay
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Fixed Cash
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Recognize role,
responsibilities and
experience consistent
with market for
comparable positions |
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Annual Bonus
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Variable Cash
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Reward operating
results and to
provide a strong
motivational tool to
achieve earnings
guidance and other
related
pre-established
objectives |
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Long-Term Incentive
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Stock Options and
Restricted Stock
Awards Outcomes at
vesting are variable
as well as grant
levels
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Create strong
financial incentive
for achieving
long-term performance
and encourage a
significant equity
stake in our company |
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|
|
Health, Life,
Retirement Savings
and Other Benefits
|
|
Eligibility to
participate in
benefit plans
generally available
to our employees,
including retirement,
health, life
insurance and
disability plans
|
|
Plans are part of the
broad-based benefits
program offered to
our employees |
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|
Executive Benefits
and Perquisites
|
|
Auto allowance for
our named executive
officers and
furnished apartment
in Houston for our
CEO
|
|
Provide competitive
benefits to round out
a complete
compensation package |
- 7 -
Additional discussion of each element of our compensation is provided below along with
specific 2008 decisions made by the Compensation Committee regarding each element.
Pay for Performance Strategy
Each element of our compensation program described above, in both their fixed and variable
nature, are intended to make up our total pay for performance strategy.
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|
The fixed elements are intended to provide the foundation of compensation paid to our
executives. Such elements recognize the individuals role in the company and are
reflective of experience level. |
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|
The variable compensation elements of the annual bonus focus on our earnings per share
or earnings before interest, taxes, depreciation and amortization (EBITDA) as well as the
executives individual responsibilities and performance outcomes. |
|
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|
Long-term compensation creates a direct link between the executives potential for
capital accumulation and stockholder return. |
Role of Compensation Committee
Executive officer compensation is administered by the Compensation Committee of our board of
directors, which is composed of two non-employee directors who satisfy the independence
requirements of the New York Stock Exchange. Our board of directors appoints the members of the
Compensation Committee, and delegates to the Compensation Committee the responsibility for, among
other matters:
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|
evaluating and approving our overall compensation programs; |
|
|
|
annually reviewing the performance of and setting the compensation (i.e., salary,
incentive awards, and all other elements) for our chief executive officer; |
|
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|
annually reviewing the performance of and recommending the compensation for the other
executive officers; and |
|
|
|
reviewing and approving annual goals and mechanics along with administering our annual
incentive and equity compensation plans and programs. |
Compensation Governance
Each year the compensation paid to our chief executive officer is reviewed and recommended by
the Compensation Committee and approved by the board of directors. The compensation awarded to our
other named executive officers is proposed by the CEO, reviewed by the Compensation Committee and
then recommended to the board of directors for final approval.
- 8 -
Our board of directors approves the compensation plans which govern our various direct
compensation programs and elements. The table below outlines the governance of those programs.
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Reviewed and |
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|
Compensation Element |
|
Plan/Governance |
|
Recommended By: |
|
Approved By: |
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|
CEO
|
|
Base Salary
Annual Bonus
Long-Term Incentives
|
|
Employment Agreement
Employment Agreement
2003 Incentive Stock
Plan
2006 Incentive Plan
|
|
Compensation
Committee
|
|
Board of Directors |
|
|
|
|
|
|
|
|
|
Named
Executive
Officers
|
|
Base Salary
Annual Bonus
Long-Term Incentives
|
|
Employment Agreements
Employment Agreements
2003 Incentive Stock
Plan
2006 Incentive Plan
|
|
CEO & Compensation
Committee
|
|
Board of Directors |
Role of Compensation Consultants
Pursuant to its charter, the Compensation Committee is authorized to retain any compensation
consultants or other advisors as it deems appropriate to assist in compensation matters. The
Compensation Committee has the sole authority to hire and fire our compensation consultant. Since
2007, the Compensation Committee periodically engaged Cogent Compensation Partners, Inc., or
Cogent, to serve as an independent compensation consultant to the Compensation Committee on
executive compensation matters. Cogent performed work at the direction and under the supervision
of the Compensation Committee throughout 2008. Beginning 2009, the Compensation Committee has
engaged Pearl Meyer & Partners to serve as its independent advisor going forward. Pearl Meyer was
retained to provide advice, research and analytical services on a variety of compensation related
subjects.
Role of Our Executive Officers in Establishing Compensation
Mr. Hidayatallah, our chief executive officer, is actively involved in the compensation
process and works closely with the Compensation Committee providing his assessment and
recommendations on the competitiveness of our programs, any performance issues and challenges, and
makes recommendations for consideration pertaining to the management team, which includes their
individual compensation levels. The Committee takes these recommendations into consideration and
either approves them or works with the chief executive officer to develop suitable solutions. In
developing compensation recommendations, Mr. Hidayatallah has relied on his many years of
experience serving as an executive officer in the oilfield service industry as well as publicly
available information for comparable compensation guidance. No other executive officer assumes an
active role in the evaluation, design or administration of our executive officer compensation
programs. Mr. Hidayatallah participates in Committee meetings relating to the compensation of our
other executive officers. Mr. Hidayatallah does not attend Compensation Committee meetings that
pertain to himself. The Committee also meets in executive session, independently of the chief
executive officer and other members of senior management to review not only the CEOs compensation
but those of all named executive officers and other key employees.
Benchmarking
The Compensation Committee analyzes the compensation practices of a group of our peer
companies, consisting of other publicly-traded energy services companies within a range of market
cap and revenue size. Additionally, the Compensation Committee considers the best practices in
compensation policies from other companies and does not structure our compensation on market data
alone. The Committee, historically, has used peer group information and other market data only as
a general guideline for its deliberations.
Our current peer group of companies was established in 2006. The Compensation Committee did
not conduct a formal review of the compensation practices or levels of our peer group in 2008.
However, the Committee plans to use
this type of benchmarking in the future as needed to complement its own analysis, and not as
an independent source for making compensation related decisions.
- 9 -
Composition of the peer group is based upon a combination of the following factors: (1)
companies that are competitors; (2) companies that compete for our specialized talent; (3)
companies that may experience similar market cycles; (4) companies that may be tracked similarly by
analysts; and (5) companies that have generally comparable market cap and/or revenue. These
factors as well as the individual peer group companies are periodically reviewed and may change
over time as needed. Our current peer group consists of the following companies:
|
|
|
Superior Energy Services Inc. |
|
|
|
Superior Well Services Inc. |
|
|
|
Tetra Technologies Inc. |
Components of Executive Compensation
Our executive compensation program consists of the following components: base salary, annual bonus,
long-term incentives, perquisites and benefits.
Base Salary
Competitive base salaries are designed to attract and retain employees by providing them with
a stable source of income. In addition, base salaries for our executive officers are designed to
compensate the executive for the experience, education, personal qualities and other qualifications
of that individual that are essential for the specific role of such executive, while remaining
competitive with the market. This market consists of both the oilfield services industry and other
service-based industries. We have historically set pay at levels that reflect the qualifications of
the individuals and their competing opportunities in the market. Our annual incentive compensation
is expressed as a percentage of base salaries.
Base salaries are generally reviewed on an annual basis. In addition to benchmarking, as
noted above, the Compensation Committee and our chief executive officer consider various factors
when recommending base salaries, including:
|
|
|
the executives individual performance; |
|
|
|
the performance of the executives business unit within Allis-Chalmers; |
|
|
|
company-wide performance; |
|
|
|
the executives experience and expertise; |
|
|
|
the executives position and job responsibility; |
|
|
|
the executives years of service with us; and |
|
|
|
the competitive pay levels for similar positions. |
No specific weight is assigned to any of these factors and our chief executive officer
exercises subjective judgment when making salary recommendations with respect to our executive
officers. The only increases in base salary to our named executive officers in 2008 were to Terry
Keane and Mark Patterson. Both were promoted to Senior Vice President of their respective
divisions and received salary increases in connection with such promotions. The Compensation
Committee agreed to gradually increase Mr. Keanes salary from $225,000 to $300,000 by increasing
his base salary by $50,000 in February 2008 with another $25,000 increase effective January 2009.
The Compensation
Committee also agreed to gradually increase Mr. Pattersons salary from $190,000 to $250,000
by increasing his salary by $35,000 in January 2008 with another $25,000 increase in May 2008.
None of our other named executive officers received salary increases in 2008. Each other named
executive officer received salary increases in connection with their new employment agreements
entered into in 2007.
- 10 -
Annual Incentive Compensation
A significant portion of each executives total compensation is variable and dependent upon
the achievement of one or more goals. Annual incentive compensation primarily consists of cash
bonuses. When determining these bonuses, we rely on performance criteria such as the achievement
of certain earnings per share or earnings before interest, taxes, depreciation and amortization, or
EBITDA, the successful completion of specific job responsibilities or the achievement of other
items integral to our success. For 2008, the primary performance criteria used for our corporate
executives was meeting specified earnings guidance and successfully completing individual goals
pertaining to specified job responsibilities. For our chief financial officer, these goals included
managing our financial reporting function, maintaining Sarbanes-Oxley compliance, obtaining
financing for acquisitions and receiving an unqualified audit opinion. For our division heads,
their performance goals are generally tied to the achievement of established EBITDA goals for each
such division. Our chief executive officer, in conjunction with the Compensation Committee,
evaluates performance in light of the specified performance criteria for each executive and
recommends to the Committee the amount of the annual incentive payment to be awarded. An annual
cash bonus may be more than, less than or equal to the target cash bonus amount set for each
executive.
Due to the operating challenges in the energy services industry presented by the current
condition of the economy, each of our executives have signed a letter of agreement to waive any
right to any bonuses set forth in their respective employment agreements for the 2009 calendar
year.
Annual Incentive Bonus Payouts for 2008
As detailed in the table below, two of our named executive officers received an annual
incentive bonus for 2008. David Bryan received 100% of his annual incentive bonus, which was based
on Strata Directional Technology LLC meeting financial goals of EBITDA of at least $29,037,462 for
the year. Terry Keane received 50% of his annual incentive bonus. Half of his target bonus was
based on AirComp LLC meeting financial goals of EBITDA of at least $9,179,890 for the first half of
2008 and he met this target. The other half of Mr. Keanes bonus was based on the Oilfield
Services segment meeting financial goals of EBITDA of at least $43,627,024 for the last half of
2008, which was not met.
The following table shows the annual incentive bonus target and the actual amount of the
annual incentive bonus paid for each named executive officer for 2008.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target |
|
|
2008 Target |
|
|
Actual 2008 |
|
|
|
Payout % of |
|
|
Bonus |
|
|
Target |
|
Name |
|
Base |
|
|
Award |
|
|
Bonus Paid |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Munawar H. Hidayatallah |
|
|
100 |
% |
|
$ |
500,000 |
|
|
|
|
|
Victor M. Perez |
|
|
50 |
% |
|
$ |
143,000 |
|
|
|
|
|
David K. Bryan |
|
|
100 |
% |
|
$ |
250,000 |
|
|
$ |
250,000 |
|
Terrence P. Keane |
|
|
100 |
% |
|
$ |
275,000 |
|
|
$ |
137,500 |
|
Mark C. Patterson |
|
|
100 |
% |
|
$ |
250,000 |
|
|
|
|
|
- 11 -
Discretionary Bonus Payouts for 2008
In the third quarter of 2008, the Compensation Committee approved discretionary bonuses to
each of Messrs. Hidayatallah and Perez equal to 50% of their target bonus for meeting certain
performance goals as well as meeting their earnings per share target through the third quarter.
Mr. Hidayatallah received a bonus in the amount of $250,000 and Mr. Perez received a bonus in the
amount of $71,500. The Compensation Committee did not award the remainder of their respective
bonuses because their earnings per share target was not met for fiscal year 2008. Specifically,
Messrs. Hidayatallah and Perez did not meet their financial goal of specified earnings guidance of
at least $1.35 per share. In addition, the Compensation Committee approved a discretionary bonus
to Mr. Patterson equal to 100% of his target bonus, or $250,000, although Mr. Patterson did not
meet his performance criteria, which was the Rental Services segment meeting financial goals of
EBITDA of at least $61,270,000 for the year. The Committee decided to award Mr. Patterson a
discretionary bonus equal to the full amount of his target bonus because the Committee determined
that Mr. Patterson substantially met his target financial goal
and the Committee took into consideration
factors that were outside his control, including challenges imposed by the transition to his new
position in connection with his promotion to Senior Vice President of Rental Services in January
2008. The Compensation Committee also approved a discretionary bonus of $60,000 to Mr. Patterson
in 2008. This discretionary bonus was intended to act as an inducement for Mr. Patterson to accept
his new position, with increased responsibility, within the Company.
In December 2008, on the recommendation of the Compensation Committee, our board of directors
approved a discretionary cash bonus of $1,430,000 to our chief executive officer, Mr. Hidayatallah.
The intent behind awarding this discretionary bonus was to (a) promote the retention of Mr.
Hidayatallah, (b) facilitate leadership and management continuity, and (c) better focus Mr.
Hidayatallah on Allis-Chalmers long term strategic success. The Compensation Committee had
previously granted Mr. Hidayatallah a performance award in the amount of 685,000 shares of
restricted shares in connection with his employment agreement entered into in 2007. The shares
were to vest in three annual installments upon achieving 12% growth in total stockholder return.
The sudden downturn in the economy and across the energy services industry which occurred in 2008
played a significant role in making the achievability of the performance hurdles virtually
impossible. Thus, the award lost its intended purpose of motivating high performance. This bonus,
as previously stated, was intended to renew that objective. In connection with this bonus, Mr.
Hidayatallah agreed to (x) extend the term of his employment agreement for an additional year,
ending March 31, 2011, (y) forgo any additional cash bonus for 2008, and (z) forgo any salary
increase in 2009. Mr. Hidayatallahs employment agreement was also amended to require Mr.
Hidayatallah to repay $1,180,000 of the bonus if Mr. Hidayatallah terminates his employment before
the end of the term.
Long-Term Incentive Compensation
We award long-term incentive compensation to focus our executives on our long-term growth and
stockholder return, as well as to encourage our executives to remain with us for the long-term.
Prior to 2006, we primarily granted long-term incentives in the form of stock options pursuant to
our Amended and Restated 2003 Stock Option Plan. We selected this form because of the favorable
accounting and tax treatment and the expectation of key employees in our industry that they would
receive stock options. In 2006, we reassessed our form of award and the Committee adopted the 2006
Incentive Plan, or the 2006 Plan, in order to provide us with a mix of long-term incentive vehicles
to complement our stock option awards, namely restricted stock. We do not have pre-established
target award amounts for long-term incentive grants. Instead, our chief executive officer
recommends the number of awards to grant to each executive and the Compensation Committee considers
the chief executive officers recommendations in making such awards.
Stock Options. Stock options are an important aspect of our long-term compensation
program. Stock options are granted with an exercise price equal to the fair market value of the
option on the date of grant. However, we did not grant options to any of our named executive
officers in 2008.
Restricted Stock. Our use of restricted stock is intended to maintain consistency in
management by encouraging our executives to stay with us for the long-term. Restricted stock
awards provide some value to an employee during periods of stock market volatility, whereas stock
options may have limited perceived value and may do little to retain and motivate employees when
the current value of our stock is less than the option price. Further, restricted stock is a
meaningful mechanism to align the interests of executives with those of our stockholders, without
fostering an environment of undue risks.
- 12 -
In determining long-term incentive awards for the executives, the Compensation Committee
relies on recommendations from our chief executive officer. Our chief executive officer considers
several factors, including our performance, the individual
performance of the executives, the retentive and motivational value of the proposed grant, and
the share usage and associated accounting expense when determining restricted stock awards. In
2008, Mr. Perez was granted 50,000 shares of restricted stock and Mr. Keane was granted 90,000
shares of restricted stock. These grants are intended to further retain and motivate these
executives. In addition, Mr. Patterson received a grant of 10,000 shares of restricted stock in
connection with his promotion in January 2008. Each of these grants vest over three years with 20%
vesting on each of the first and second anniversaries of the grant date and the remaining 60%
vesting on the third anniversary of the grant date. No other named executive officer received any
equity awards in 2008.
Perquisites
Our named executive officers received certain perquisites in 2008 which consisted of health
benefits paid for by us, payment of life insurance premiums and a monthly car allowance. We provide
these benefits to our named executive officers as part of a competitive compensation package. In
addition, we provide Mr. Hidayatallah with access to a company car and driver because we believe
that this allows him to devote optimal time to our business and increases his efficiency.
In addition to the benefits named above, we reimburse Mr. Hidayatallah for maintaining an
apartment in Houston, Texas in close proximity to our corporate office because Mr. Hidayatallah
resides in California. We also reimburse Mr. Hidayatallah for expenses for traveling between Texas
and California. Mr. Hidayatallahs reimbursements for his travel expenses and his apartment in
Houston are provided for in his employment agreement.
We did not provide tax gross-ups related to these perquisites in 2008.
Employee Benefits
We offer our named executive officers standard employee benefits to provide for them in time
of disability and to allow us to remain competitive in the market in order to attract and retain
key employees. Our primary benefits, which are available to all employees, include participation
in our employee health, dental and vision plans, disability and life insurance plans and our 401(k)
savings plan. We currently match 5% of the employees pre-tax contributions up to 3% of the
employees salary (including bonus), subject to contribution limits. We also pay the cost of health
insurance premiums for each of our named executive officers.
Executive Compensation Policies and Processes
Equity Award Grant Practices
We award all stock options to purchase our common stock to executive officers and all other
employees at the market price of our common stock on the grant date. Employees are not allowed to
select the effective date of stock option grants and neither we nor the Compensation Committee has
ever back-dated any option awards. Although the Compensation Committee does not set specific dates
in which it makes equity awards, the Compensation Committee does not time its approval of equity
awards around the release of any material non-public information.
Policy Regarding Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code generally limits our ability to take a federal
income tax deduction for compensation paid to our named executive officers in excess of $1 million.
The stock options we grant have been structured to qualify as performance-based so they are not
subject to this deduction limitation. Although the Compensation Committee will seek to utilize
deductible forms of compensation to the extent practicable, it believes it is important to preserve
flexibility in administering compensation programs. Accordingly, we have not adopted a policy that
all compensation must qualify as deductible under Section 162(m).
The restricted shares granted to our CEO in connection with his 2007 employment agreement were
granted under the stockholder approved 2006 Incentive Plan and are deductible as performance-based
compensation because they vest only upon the achievement of certain performance goals.
- 13 -
Executive Stock Ownership Guidelines
We do not, at this time, have any formal stock ownership and retention guidelines but
recognizes the importance of retention of shares by executives as opposed to cashing them out
routinely at maturity. The board and the Compensation Committee feel that retention of equity and
attaining a significant investment position is important for true stockholder linkage. While we
feel that our current long term incentive grants do provide a significant linkage to stockholder
value we will continue to monitor and assess the need associated with instituting more formal
guidelines.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis
required by Item 402(b) of Regulation S-K with management and, based on such review and
discussions, the Compensation Committee recommended to the board of directors that the Compensation
Discussion and Analysis be included in this Annual Report on Form 10-K/A for the year ended
December 31, 2008.
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The Compensation Committee of the Board of Directors |
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Ali H. M. Afdhal
Zane Tankel |
Summary Compensation Table
The following table provides a summary of the cash and non-cash compensation for the year
ended December 31, 2008, 2007 and 2006 for each of (1) the Chief Executive Officer and the Chief
Financial Officer and (2) each of our three most highly compensated executive officers during 2008
other than the Chief Executive Officer or Chief Financial Officer. We refer to these executives
collectively as the named executive officers.
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Non-Equity |
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Stock |
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|
Option |
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Incentive Plan |
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All Other |
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|
Salary |
|
|
Bonus |
|
|
Awards |
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|
Awards |
|
|
Compensation |
|
|
Compensation |
|
|
Total |
|
Name and Principal Position |
|
Year |
|
($) |
|
|
($) |
|
|
($)(1) |
|
|
($)(2) |
|
|
($)(3) |
|
|
($)(6) |
|
|
($) |
|
Munawar H. Hidayatallah |
|
|
2008 |
|
|
|
500,000 |
|
|
|
1,680,000 |
|
|
|
4,608,455 |
|
|
|
868,914 |
|
|
|
|
|
|
|
148,354 |
|
|
|
7,805,723 |
|
Chairman & Chief |
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2007 |
|
|
|
475,000 |
|
|
|
100,000 |
|
|
|
2,013,444 |
|
|
|
547,115 |
|
|
|
|
|
|
|
139,034 |
|
|
|
3,274,593 |
|
Executive Officer |
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2006 |
|
|
|
400,000 |
|
|
|
|
|
|
|
|
|
|
|
845,694 |
|
|
|
400,000 |
|
|
|
88,240 |
|
|
|
1,733,934 |
|
Victor M. Perez |
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|
2008 |
|
|
|
286,000 |
|
|
|
71,500 |
|
|
|
230,233 |
|
|
|
54,924 |
|
|
|
|
|
|
|
63,334 |
|
|
|
705,991 |
|
Chief Financial Officer |
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|
2007 |
|
|
|
270,833 |
|
|
|
|
|
|
|
63,608 |
|
|
|
81,912 |
|
|
|
|
|
|
|
43,001 |
|
|
|
459,354 |
|
|
|
|
2006 |
|
|
|
248,833 |
|
|
|
100,000 |
|
|
|
|
|
|
|
212,551 |
|
|
|
120,000 |
|
|
|
21,801 |
|
|
|
703,185 |
|
David K. Bryan |
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|
2008 |
|
|
|
250,000 |
|
|
|
|
|
|
|
605,809 |
|
|
|
|
|
|
|
250,000 |
|
|
|
44,084 |
|
|
|
1,149,893 |
|
President and Chief |
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2007 |
|
|
|
250,000 |
|
|
|
|
|
|
|
309,877 |
|
|
|
5,284 |
|
|
|
231,250 |
|
|
|
21,148 |
|
|
|
817,559 |
|
Executive Officer of |
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2006 |
|
|
|
187,000 |
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|
|
|
|
|
|
|
|
|
|
33,038 |
|
|
|
174,996 |
|
|
|
12,941 |
|
|
|
407,975 |
|
Strata Directional |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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|
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Technology LLC |
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|
|
|
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|
|
|
|
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|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
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Terrence P. Keane(4) |
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|
2008 |
|
|
|
272,385 |
|
|
|
|
|
|
|
518,622 |
|
|
|
|
|
|
|
137,500 |
|
|
|
62,269 |
|
|
|
990,776 |
|
Senior Vice President - |
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|
2007 |
|
|
|
202,404 |
|
|
|
|
|
|
|
287,653 |
|
|
|
38,399 |
|
|
|
156,250 |
|
|
|
40,393 |
|
|
|
725,099 |
|
Oilfield Services |
|
|
2006 |
|
|
|
172,038 |
|
|
|
|
|
|
|
|
|
|
|
128,957 |
|
|
|
87,500 |
|
|
|
16,062 |
|
|
|
404,557 |
|
Mark C. Patterson(5) |
|
|
2008 |
|
|
|
241,403 |
|
|
|
310,000 |
|
|
|
38,975 |
|
|
|
|
|
|
|
|
|
|
|
26,939 |
|
|
|
617,317 |
|
Senior Vice President - |
|
|
2007 |
|
|
|
146,655 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,215 |
|
|
|
151,870 |
|
Rental Services LLC |
|
|
2006 |
|
|
|
4,747 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,747 |
|
|
|
|
(1) |
|
The amounts indicated represent the aggregate dollar amount of compensation expense, excluding the
reduction for risk of forfeiture, related to restricted stock awards recognized in our financial
statements during fiscal year 2008. The expense was determined in accordance with FAS 123(R) as
disclosed in Notes 1 and 10 to our financial statements included in our annual report on Form 10-K for
the year ended December 31, 2008. |
|
(2) |
|
The amounts indicated represent the aggregate dollar amount of compensation expense, excluding the
reduction for risk of forfeiture, related to stock option awards recognized in our financial statements
during fiscal year 2008 and includes amounts from awards granted prior to 2007. The expense was
determined in accordance with FAS 123(R) as disclosed in Notes 1 and 10 to our financial statements
included in our annual report on Form 10-K for the year ended December 31, 2008. |
- 14 -
|
|
|
(3) |
|
The amounts indicated represent annual incentive compensation paid pursuant to each executives
employment agreement. |
|
(4) |
|
Mr. Keane was promoted to Senior Vice PresidentOilfield Services in January 2008. Prior to his
promotion, Mr. Keane served as President and Chief Executive Officer of AirComp LLC. |
|
(5) |
|
Mr. Patterson was promoted to Senior Vice President Rental Services in January 2008. Prior to his
promotion, Mr. Patterson served as Vice President of Sales and Business Development for Allis-Chalmers
Rental Services LLC. Mr. Patterson joined our company in December 2006. |
|
(6) |
|
The following table provides a summary of the All Other Compensation column and includes all perquisites: |
Summary of All Other Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
401(k) plan |
|
|
|
|
|
|
Allis-Chalmers |
|
|
|
|
|
|
|
|
|
|
|
|
|
Health |
|
|
Matching |
|
|
Car |
|
|
Provided |
|
|
Other Personal |
|
|
|
|
|
|
|
|
|
|
Benefits |
|
|
Contributions |
|
|
Allowance |
|
|
Car |
|
|
Benefits |
|
|
Total |
|
Name |
|
Year |
|
|
($)(1) |
|
|
($) |
|
|
($) |
|
|
($)(2) |
|
|
($)(3) |
|
|
($) |
|
Munawar H. Hidayatallah |
|
|
2008 |
|
|
|
72,721 |
|
|
|
4,375 |
|
|
|
|
|
|
|
14,543 |
|
|
|
56,715 |
|
|
|
148,354 |
|
|
|
|
2007 |
|
|
|
62,788 |
|
|
|
7,500 |
|
|
|
|
|
|
|
12,302 |
|
|
|
56,444 |
|
|
|
139,034 |
|
|
|
|
2006 |
|
|
|
27,832 |
|
|
|
3,750 |
|
|
|
|
|
|
|
7,023 |
|
|
|
49,635 |
|
|
|
88,240 |
|
Victor M. Perez |
|
|
2008 |
|
|
|
42,647 |
|
|
|
8,687 |
|
|
|
12,000 |
|
|
|
|
|
|
|
|
|
|
|
63,334 |
|
|
|
|
2007 |
|
|
|
23,513 |
|
|
|
7,488 |
|
|
|
12,000 |
|
|
|
|
|
|
|
|
|
|
|
43,001 |
|
|
|
|
2006 |
|
|
|
10,723 |
|
|
|
4,578 |
|
|
|
6,500 |
|
|
|
|
|
|
|
|
|
|
|
21,801 |
|
David K. Bryan |
|
|
2008 |
|
|
|
27,714 |
|
|
|
4,370 |
|
|
|
12,000 |
|
|
|
|
|
|
|
|
|
|
|
44,084 |
|
|
|
|
2007 |
|
|
|
10,801 |
|
|
|
4,347 |
|
|
|
6,000 |
|
|
|
|
|
|
|
|
|
|
|
21,148 |
|
|
|
|
2006 |
|
|
|
6,941 |
|
|
|
|
|
|
|
6,000 |
|
|
|
|
|
|
|
|
|
|
|
12,941 |
|
Terrence P. Keane |
|
|
2008 |
|
|
|
42,294 |
|
|
|
7,975 |
|
|
|
12,000 |
|
|
|
|
|
|
|
|
|
|
|
62,269 |
|
|
|
|
2007 |
|
|
|
22,418 |
|
|
|
5,975 |
|
|
|
12,000 |
|
|
|
|
|
|
|
|
|
|
|
40,393 |
|
|
|
|
2006 |
|
|
|
5,751 |
|
|
|
2,311 |
|
|
|
8,000 |
|
|
|
|
|
|
|
|
|
|
|
16,062 |
|
Mark C. Patterson |
|
|
2008 |
|
|
|
7,944 |
|
|
|
6,995 |
|
|
|
12,000 |
|
|
|
|
|
|
|
|
|
|
|
26,939 |
|
|
|
|
2007 |
|
|
|
815 |
|
|
|
4,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,215 |
|
|
|
|
2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts indicated represent actual health benefit premiums and expenses paid by Allis-Chalmers. |
|
(2) |
|
We provide a company car and driver to Mr. Hidayatallah for business reasons and for commuting to
and from the office. The cost of the driver was determined by allocating a portion of the total
actual employment costs of the administrative employee based on amount of driving time per
employee. The cost of the company car was determined by allocating a portion of the car purchase
price (total cost divided by three for the expected usage of the car in years), annual cost of
insurance, maintenance and other costs based on mileage incurred for commuting and personal use by
each employee. |
|
(3) |
|
Other personal benefits for Mr. Hidayatallah include $24,916 in Allis-Chalmers paid airline
flights and $31,799 in apartment and utility costs for the corporate apartment in Houston, Texas
for the fiscal year 2008. |
- 15 -
Grant of Plan-Based Awards
The following table sets forth the grants of plan-based awards for 2008 as a dollar amount for
each of the named executive officers. All equity-based awards were granted under our 2006
Incentive Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Stock |
|
|
All Other Option |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards: |
|
|
Awards: |
|
|
Exercise or |
|
|
Grant Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
Number of |
|
|
Base Price |
|
|
Fair Value |
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under |
|
|
Estimated Future Payouts Under |
|
|
Shares |
|
|
Securities |
|
|
of |
|
|
of Stock |
|
|
|
|
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards (1) |
|
|
Equity Incentive Plan Awards |
|
|
of Stock |
|
|
Underlying |
|
|
Option |
|
|
and Option |
|
|
|
Grant |
|
|
Approval |
|
|
Threshold |
|
|
Target |
|
|
Maximum |
|
|
Threshold |
|
|
Target |
|
|
Maximum |
|
|
or Units |
|
|
Options |
|
|
Awards |
|
|
Awards |
|
Name |
|
Date |
|
|
Date |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
# |
|
|
# |
|
|
# |
|
|
#(2) |
|
|
# |
|
|
$/sh |
|
|
$(3) |
|
Munawar H. Hidayatallah |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Victor M. Perez |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
143,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/1/2008 |
|
|
|
5/2/2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000 |
|
|
|
|
|
|
|
|
|
|
|
436,000 |
|
|
|
|
12/10/2008 |
|
|
|
12/10/2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000 |
|
|
|
|
|
|
|
|
|
|
|
122,250 |
|
David K. Bryan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrence P. Keane |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
275,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/1/2008 |
|
|
|
5/2/2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,000 |
|
|
|
|
|
|
|
|
|
|
|
784,800 |
|
|
|
|
12/10/2008 |
|
|
|
12/10/2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,000 |
|
|
|
|
|
|
|
|
|
|
|
220,050 |
|
Mark C. Patterson |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/29/2008 |
|
|
|
1/29/2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000 |
|
|
|
|
|
|
|
|
|
|
|
117,300 |
|
|
|
|
(1) |
|
Reflects each named executive officers target amount of the annual
cash incentive bonus under our non-equity incentive compensation plan
for 2008. The amounts of the performance bonus awards made to the
named executive officers pursuant to the incentive compensation plan
for 2008 are set forth in the Non-Equity Incentive Plan Compensation
column of the Summary Compensation Table above. |
|
(2) |
|
The amounts indicated represent restricted stock awards granted during
fiscal year 2008. The vesting schedules for restricted stock awards
granted during the fiscal year 2008 are disclosed in the footnotes in
the following Outstanding Equity Awards table. |
|
(3) |
|
The valuation of restricted stock awards were determined in accordance
with FAS 123(R) as disclosed in Notes 1 and 10 to our financial
statements included in our annual report on Form 10-K for the year
ended December 31, 2008. |
- 16 -
Outstanding Equity Awards at Fiscal Year-End 2008
The following table sets forth information regarding outstanding equity awards for each of our
named executive officers for 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Awards |
|
|
Stock Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive |
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive |
|
|
Plan Awards: |
|
|
|
|
|
|
|
|
|
|
|
Plan Awards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards: |
|
|
Market or |
|
|
|
Number of |
|
|
Number of |
|
|
Number of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number |
|
|
Payout Value |
|
|
|
Securities |
|
|
Securities |
|
|
Securities |
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
Market Value |
|
|
of Unearned |
|
|
of Unearned |
|
|
|
Underlying |
|
|
Underlying |
|
|
Underlying |
|
|
|
|
|
|
|
|
|
|
Shares or |
|
|
of Shares or |
|
|
Shares, Units |
|
|
Shares, Units |
|
|
|
Unexercised |
|
|
Unexercised |
|
|
Unexercised |
|
|
Option |
|
|
|
|
|
|
Units of Stock |
|
|
Units of Stock |
|
|
or Other Rights |
|
|
or Other Rights |
|
|
|
Options |
|
|
Options |
|
|
Unearned |
|
|
Exercise |
|
|
Option |
|
|
That Have |
|
|
That Have |
|
|
That Have |
|
|
That Have |
|
|
|
# |
|
|
# |
|
|
Options |
|
|
Price |
|
|
Expiration |
|
|
Not Vested |
|
|
Not Vested |
|
|
Not Vested |
|
|
Not Vested |
|
Name |
|
Exercisable |
|
|
Unexercisable |
|
|
# |
|
|
$ |
|
|
Date |
|
|
# |
|
|
$ (1) |
|
|
# |
|
|
$ (1) |
|
Munawar H. Hidayatallah |
|
|
200,000 |
|
|
|
|
|
|
|
|
|
|
|
3.86 |
|
|
|
2/2/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83,333 |
|
|
|
|
|
|
|
|
|
|
|
10.85 |
|
|
|
12/15/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000 |
(2) |
|
|
160,000 |
(2) |
|
|
|
|
|
|
21.95 |
|
|
|
8/3/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
456,666 |
(9) |
|
|
2,511,663 |
|
Victor M. Perez |
|
|
25,000 |
|
|
|
|
|
|
|
|
|
|
|
4.85 |
|
|
|
10/11/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,000 |
|
|
|
|
|
|
|
|
|
|
|
10.85 |
|
|
|
12/15/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000 |
(3) |
|
|
21.95 |
|
|
|
8/3/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000 |
(10) |
|
|
137,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000 |
(4) |
|
|
137,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000 |
(5) |
|
|
137,500 |
|
|
|
|
|
|
|
|
|
David K. Bryan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.87 |
|
|
|
5/24/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000 |
(6) |
|
|
165,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000 |
(7) |
|
|
412,500 |
|
|
|
|
|
|
|
|
|
Terrence P. Keane |
|
|
15,000 |
|
|
|
|
|
|
|
|
|
|
|
4.87 |
|
|
|
5/24/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000 |
|
|
|
|
|
|
|
|
|
|
|
10.85 |
|
|
|
12/15/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,000 |
(6) |
|
|
198,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,000 |
(4) |
|
|
247,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,000 |
(5) |
|
|
247,500 |
|
|
|
|
|
|
|
|
|
Mark C. Patterson |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000 |
(8) |
|
|
55,000 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The values represented have been calculated by multiplying $5.50, the
closing price of our common stock on December 31, 2008, by the number
of shares of restricted stock. |
|
(2) |
|
The stock options were granted on August 3, 2007 and vest 20% on
August 3, 2008, 20% on August 3, 2009 and 60% on August 3, 2010. On
March 11, 2009, Mr. Hidayatallah surrendered these options.
|
|
(3) |
|
The performance-based stock options were granted on August 3, 2007
and vest 20% on August 3, 2008, 20% on August 3, 2009 and 60% on
August 3, 2010. Alternatively, the award vests 100% on August 3,
2010 if certain performance goals are met. |
- 17 -
|
|
|
(4) |
|
The restricted stock awards were granted on July 1, 2008 and vest 20%
on July 1, 2009, 20% on July 1, 2010 and 60% on July 1, 2011. |
|
(5) |
|
The restricted stock awards were granted on December 10, 2008 and
vest 20% on December 10, 2009, 20% on December 10, 2010 and 60% on
December 10, 2011. |
|
(6) |
|
The restricted stock awards were granted on June 14, 2007 and vest
20% on June 14, 2008, 20% on June 14, 2009 and 60% on June 14, 2010. |
|
(7) |
|
The restricted stock awards were granted on October 4, 2007 and vest
10% on October 4, 2009, 20% on October 4, 2010, 40% on October 4,
2011 and 30% on October 4, 2012. |
|
(8) |
|
The restricted stock awards were granted on January 29, 2008 and vest
20% on January 29, 2009, 20% on January 29, 2010 and 60% on January
29, 2011. |
|
(9) |
|
The performance-based restricted stock awards were granted on
September 17, 2007 to vest one-third each on April 1, 2008, 2009 and
2010 if certain performance goals are met. Alternatively, the award
would vest 100% on April 1, 2010 if certain performance goals are
met. On March 11, 2009, we amended these shares to, among other
things, extend the cumulative vesting of such restricted stock for an
additional year. |
|
(10) |
|
The performance-based restricted stock awards were granted on August
3, 2007 and vest 20% on August 3, 2008, 20% on August 3, 2009 and 60%
on August 3, 2010. Alternatively, the award vests 100% on the third
anniversary date if certain performance goals are met. |
Option Exercises and Stock Vested During Fiscal Year 2008
The following table sets forth information concerning each exercise of stock options and each
vesting of stock, including restricted stock and similar instruments, during 2008 for each of our
named executive officers on an aggregated basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
Stock |
|
|
|
Number of Shares |
|
|
Value Realized |
|
|
Number of Shares |
|
|
Value Realized |
|
|
|
Acquired on Exercise |
|
|
on Exercise |
|
|
Vested |
|
|
at Vesting |
|
Name |
|
(#) |
|
|
($) |
|
|
(#) |
|
|
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Munawar H. Hidayatallah |
|
|
|
|
|
|
|
|
|
|
228,334 |
|
|
$ |
3,970,728 |
|
Victor M. Perez |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David K. Bryan |
|
|
20,000 |
|
|
$ |
262,610 |
|
|
|
7,500 |
|
|
$ |
128,400 |
|
Terrence P. Keane |
|
|
|
|
|
|
|
|
|
|
9,000 |
|
|
$ |
154,080 |
|
Mark C. Patterson |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director Compensation for Fiscal Year 2008
We use a combination of cash and share-based incentive compensation to attract and retain
qualified candidates to serve on our board of directors. In setting director compensation, we
consider the significant amount of time that directors expend in fulfilling their duties to
Allis-Chalmers, as well as the level of knowledge and experience that we require of members of our
board of directors. Our Compensation Committee is responsible for reviewing and recommending our
compensation policy regarding fees and equity compensation paid and granted to our directors. Our
board of directors approves all director compensation based on the Compensation Committees
recommendations. Directors who are also our employees do not receive cash or equity compensation
for service on the board in addition to compensation payable for their service as employees of
Allis-Chalmers.
Mr. Hidayatallah, our chief executive officer, is actively involved in the compensation
process of our board of directors and provides recommendations to the Compensation Committee in its
evaluation and setting of director compensation. Historically, we have not engaged a compensation
consultant to assist in setting director compensation.
- 18 -
Our current policy is to pay each of our non-management directors (currently all directors
other than Mr. Hidayatallah) a retainer of $10,000 each quarter. Each non-management director
serving on a committee of the board of directors will receive an additional $1,500 each quarter for
service on such committee, and each non-management director serving as chairman or co-chairman of a
committee of the board of directors will receive an additional $1,500 each quarter for acting as
chairman or co-chairman of such committee. In addition, our audit committee financial expert
will receive an additional $12,500 on a quarterly basis. Directors are also compensated for
out-of-pocket travel expenses.
The following table sets forth information concerning the compensation of each of our
directors during 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or |
|
|
Stock |
|
|
Option |
|
|
All Other |
|
|
|
|
|
|
Paid in Cash |
|
|
Awards(2) |
|
|
Awards |
|
|
Compensation |
|
|
Total |
|
Name (1) |
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
Ali H.M. Afdhal |
|
|
52,000 |
|
|
|
59,378 |
|
|
|
|
|
|
|
|
|
|
|
111,378 |
|
Munir Akram(3) |
|
|
10,000 |
|
|
|
1,735 |
|
|
|
|
|
|
|
|
|
|
|
11,735 |
|
Alejandro Bulgheroni |
|
|
40,000 |
|
|
|
59,378 |
|
|
|
|
|
|
|
|
|
|
|
99,378 |
|
Carlos Bulgheroni |
|
|
40,000 |
|
|
|
59,378 |
|
|
|
|
|
|
|
|
|
|
|
99,378 |
|
Victor F. Germack |
|
|
102,000 |
|
|
|
59,378 |
|
|
|
|
|
|
|
|
|
|
|
161,378 |
|
James M. Hennessy |
|
|
47,500 |
|
|
|
59,378 |
|
|
|
|
|
|
|
|
|
|
|
106,878 |
|
John E. McConnaughy Jr. |
|
|
52,000 |
|
|
|
59,378 |
|
|
|
|
|
|
|
|
|
|
|
111,378 |
|
Robert E. Nederlander |
|
|
58,000 |
|
|
|
59,378 |
|
|
|
|
|
|
|
|
|
|
|
117,378 |
|
Zane Tankel |
|
|
52,000 |
|
|
|
59,378 |
|
|
|
|
|
|
|
|
|
|
|
111,378 |
|
Leonard Toboroff |
|
|
180,000 |
(4) |
|
|
59,378 |
|
|
|
|
|
|
|
15,547 |
(5) |
|
|
254,925 |
|
|
|
|
(1) |
|
Mr. Hidayatallah was a member of our board of directors and an executive
officer during 2008 and has been omitted from the table because he did not
receive any additional compensation for serving on our board. Information
regarding Mr. Hidayatallahs compensation is listed in the Summary
Compensation Table in this proxy statement. |
|
(2) |
|
The amounts indicated represent the aggregate dollar amount of
compensation expense, excluding the reduction for risk of forfeiture,
related to restricted stock awards recognized in our financial statements
during fiscal year 2008 and includes amounts from awards granted prior to
2008. Directors were granted 4,000 restricted shares on December 4, 2008
with a grant date fair value of $20,840. The valuation of restricted
stock awards and associated expense were determined in accordance with FAS
123(R) as disclosed in Notes 1 and 10 to our financial statements included
in our annual report on Form 10-K for the year ended December 31, 2008.
As of December 31, 2008, each of our directors, except for Mr.
Hidayatallah, owned 4,000 shares of restricted stock that vests on
December 4, 2009. |
|
(3) |
|
Munir Akram was appointed to our board of directors on September 19, 2008.
|
|
(4) |
|
This amount includes consulting fees paid to Mr. Toboroff of $15,000 per
month, pursuant to an oral consulting agreement. |
|
(5) |
|
This amount includes actual health benefit premiums paid by Allis-Chalmers. |
Employment Agreements and Change-in-Control Arrangements with Management
The following is a description of the employment agreements and change-in-control arrangements
that are currently in effect with respect to each named executive officer. The amount of
compensation payable to each named executive officer upon termination with or without cause,
termination due to death or disability, termination for good reason and various change-in-control
scenarios is shown below. The amounts shown assume that such termination was effective as of
December 28, 2008, and thus includes amounts earned through such time and are estimates of the
amounts which would be paid out to the executives upon their termination. The actual amounts to be
paid out can only be determined at the time of such executives separation from us.
- 19 -
Employment Agreements
Munawar H. Hidayatallah, Chairman and Chief Executive Officer, entered into a three-year
employment agreement with Allis-Chalmers effective April 1, 2007. On December 31, 2008, Mr.
Hidayatallah entered into an amendment to the agreement whereby he agreed to extend the term of his
employment agreement for an additional year, ending March 31, 2011, in consideration of receiving a
cash bonus from the company intending to (a) promote his retention, (b) facilitate leadership and
management continuity and (c) better focus Mr. Hidayatallah on the companys long term strategic
success. In addition, pursuant to the amendment, if Mr. Hidayatallah terminates his employment
before the end of the term, he must reimburse Allis-Chalmers for a portion of the cash bonus
previously received from the company. Pursuant to his original agreement, Mr. Hidayatallah
receives an annual base salary of $500,000 subject to an annual increase and is entitled to receive
a bonus in an amount equal to 100% of his base salary if he meets certain strategic objectives
specified in the agreement. Mr. Hidayatallah is entitled to four weeks vacation per year and is
eligible to participate in all employee incentive compensation plans and to receive all of the
fringe benefits provided to all employees. Pursuant to the original agreement, Mr. Hidayatallah
was also permitted to assume ownership on his life insurance policy that was held by
Allis-Chalmers. The agreement also provides for (a) tax gross-up payments for taxes incurred under
Section 4999 of the Internal Revenue Code, (b) reimbursement of legal fees incurred in connection
with the negotiation of his employment agreement and (c) reimbursements for travel and lodging
related to Mr. Hidayatallahs travel from his principal residence to our headquarters in Houston,
Texas. Mr. Hidayatallah is also subject to customary non-compete and non-solicitation provisions
for the term of his agreement. Information with respect to compensation upon termination with or
without cause, termination due to death or disability, and various change-in-control scenarios is
set forth below under Severance and Change in Control Arrangements.
Victor M. Perez serves as our Chief Financial Officer pursuant to the terms of a three-year
employment agreement effective as of April 3, 2007. Under the terms of the employment agreement,
Mr. Perez receives an annual base salary of $286,000 subject to an annual increase in the
discretion of the board of directors. In addition, Mr. Perez is entitled to receive a bonus in an
amount equal to up to 50% of his base salary if he meets certain strategic objectives specified in
his employment agreement. Mr. Perez is also entitled to four weeks vacation per year and is
eligible to participate in all employee incentive compensation plans and to receive all of the
fringe benefits provided to all employees. Mr. Perez is subject to customary non-compete and
non-solicitation provisions for the term of his agreement. Information with respect to
compensation upon termination with or without cause, termination due to death or disability, and
various change-in-control scenarios is set forth below under Severance and Change in Control
Arrangements.
David Bryan, President and Chief Executive Officer of our subsidiary Strata Directional
Technology LLC, or Strata, is employed pursuant to a three-year employment agreement effective July
1, 2007. Under the terms of the employment agreement, Mr. Bryan receives an annual base salary of
$250,000 subject to an annual increase in the discretion of the board of directors. In addition,
Mr. Bryan is entitled to receive a bonus based on budgeted EBITDA provided that Strata meets
designated minimum earnings targets and provided further that such bonus shall not exceed 100% of
Mr. Bryans base salary. The bonus calculation is subject to adjustment in subsequent years. Mr.
Bryan is also entitled to four weeks vacation per year, a $1,000 monthly car allowance, and is
eligible to participate in all employee incentive compensation plans and to receive all of the
fringe benefits provided to all employees. Mr. Bryan is also subject to customary non-compete and
non-solicitation provisions for the term of his agreement. Information with respect to
compensation upon termination with or without cause, termination due to death or disability, and
various change-in-control scenarios is set forth below under Severance and Change in Control
Arrangements.
Terrence P. Keane was promoted to Senior Vice PresidentOilfield Services in January 2008.
Prior to his promotion, Mr. Keane served as President of Aircomp LLC. In connection with such
promotion, we amended Mr. Keanes previous employment agreement in April 2008. Pursuant to the
amended agreement, Mr. Keane is entitled to a base salary of $275,000, subject to an annual
increase in the discretion of the board of directors. For 2008, Mr. Keane was entitled to receive
(1) a bonus of up to 50% of his base salary based upon AirComp LLC meeting budgeted EBITDA targets
established by management for the first six months of 2008 and (2) a bonus of up to 50% based upon
our Oilfield Services segment meeting budgeted EBITDA targets established by our management for the
last six months of 2008. For the remaining term of his agreement, Mr. Keane is entitled to receive
a bonus of up to 100% of his base salary based upon our Oilfield Services segment meeting budgeted
earnings before taxes, interest and depreciation targets established by management. Mr. Keane is
also entitled to six weeks vacation per year and is eligible to participate in all employee
incentive compensation plans and to receive all of the fringe benefits provided to all employees.
In addition, Mr. Keane is entitled to a $1,000 monthly car allowance. The employment agreement
also contains customary non-compete and non-solicitation provisions. Information with respect to
compensation upon termination with or without cause, termination due
to death or disability, and various change-in-control scenarios is set forth below under
Severance and Change in Control Arrangements.
- 20 -
Mark Patterson was promoted to Senior Vice PresidentRental Services in January 2008. Prior
to such appointment, Mr. Patterson served as Executive Vice President of Sales and Business
Development for Allis-Chalmers Rental Services LLC. Mr. Patterson is employed pursuant to a
three-year contract, and is currently entitled to a base salary of $250,000, subject to an annual
increase in the discretion of the board of directors. Mr. Patterson is also entitled to receive a
bonus of up to 100% of his base salary based upon the Rental Services segment meeting budgeted
earnings before taxes, interest and depreciation targets established by management. Mr. Patterson
is also entitled to three weeks vacation per year and is eligible to participate in all employee
incentive compensation plans and to receive all of the fringe benefits provided to all employees.
In addition, Mr. Patterson is entitled to a $1,000 monthly car allowance. The employment agreement
also contains customary non-compete and non-solicitation provisions. Information with respect to
compensation upon termination with or without cause, termination due to death or disability, and
various change-in-control scenarios is set forth below under Severance and Change in Control
Arrangements
Severance and Change in Control Arrangements
The following severance and change in control arrangements apply to each of the named
executive officers, who are referred to as an executive for purposes of this discussion.
Each executives employment agreement provides that if his employment is terminated by us upon
his death, disability or for cause, we will pay him his earned but unpaid salary as of the date of
termination, any unpaid expense reimbursements, compensation for accrued, unused vacation as of the
date of termination and any further compensation that may be provided by the terms of any benefit
plans in which he participates and the terms of any outstanding equity grants. Termination for
Cause for Messrs. Hidayatallah, Perez and Patterson shall occur immediately if the executive
commits (1) a criminal act involving dishonesty or moral turpitude or (2) a material breach of any
of the terms and provisions of his employment agreement or fails to obey written directions by our
President or Chief Executive Officer (or, in the case of Mr. Hidayatallah, our board of directors)
which are not inconsistent with his employment agreement. Messrs. Bryan and Keanes employment
agreements defines Cause to mean:
|
|
|
the commission of any act of dishonesty, fraud, misrepresentation,
misappropriation, or embezzlement involving Allis-Chalmers; |
|
|
|
the unauthorized use or disclosure of any confidential information or trade
secrets of Allis-Chalmers; |
|
|
|
any violation of a law or regulation applicable to our business, which violation
does or is reasonably like to cause material injury to Allis-Chalmers; |
|
|
|
executives conviction of, or plea of nolo contendere or guilty to (a) a felony
or (b) any other crime which involves moral turpitude; |
|
|
|
executives continued failure, in the sole discretion of the board, to perform
the principal duties, functions and responsibilities of his position (other than any
such failure resulting from executives disability) or to follow the directives of
the board after written notice from Allis-Chalmers identifying the deficiencies in
performance and a reasonable cure period of not less than thirty (30) days of any
breach capable of cure; |
|
|
|
gross negligence or willful misconduct in the performance of executives duties;
or |
|
|
|
a material and willful breach of executives fiduciary duties to Allis-Chalmers. |
- 21 -
Each executives employment agreement provides that if his employment is terminated by us
without cause or if the executive resigns within a six month period of being constructively
terminated (as defined below), we will pay him his earned but unpaid salary, unearned salary for
the lesser of one year following termination of employment or the remainder of the employment
agreement (except for Messrs. Bryan and Keane who will receive payments through the end of their
employment agreement and Mr. Hidayatallah who will receive payments equal to three times his
then current annual salary) in semi-monthly payments, any unpaid expense reimbursements,
compensation for accrued, unused vacation as of the date of termination and any further
compensation that may be provided by the terms of any benefit plans in which he participates and
the terms of any outstanding equity grants. In general, a constructive termination would occur
if we:
|
|
|
demote the executive to a lesser position, either in title or responsibility;, |
|
|
|
decrease the executives salary or benefits below the highest level in effect at
anytime during his employment;, |
|
|
|
require the executive to relocate to a principal place of business more than 50
miles from our current principal place of business, with certain exceptions; |
|
|
|
are subject to a change in control (as defined below), unless executive accepts
employment with the successor; or |
|
|
|
breach any other material term of the employment agreement which is not cured
within 30 days after receiving notice of such breach. |
A change in control as defined in the employment agreements includes:
|
|
|
the acquisition by any individual, entity or group, or person of ownership of
more than 50% of either (1) the then outstanding shares of common stock or (2) the
combined voting power of our then outstanding voting securities entitled to vote,
with certain exceptions; |
|
|
|
individuals who currently constitute the board of directors cease for any reason
to constitute at least a majority of the board, with several exceptions; |
|
|
|
a complete liquidation or dissolution of Allis-Chalmers; or |
|
|
|
(a) the consummation of a reorganization, merger or consolidation or (b) the sale
or other disposition of all or substantially all of our assets unless, in each case,
immediately following the event |
|
|
|
Our stockholders immediately before the event own, directly or indirectly,
at least 50% of the combined voting power of our then outstanding voting
securities in substantially the same proportion as their ownership of us, or |
|
|
|
|
At least a majority of the members of the board of directors of the entity
resulting from the transaction were members of the incumbent board at the time
of the execution of the agreement providing for the transaction. |
- 22 -
The following table sets forth the estimated payments and benefits that would be provided to
each named executive officer, other than Mr. Hidayatallah, if such officers employment had been
terminated on December 31, 2008 by us without cause or upon a change of control:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Unvested |
|
|
Value of Unvested |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Awards if |
|
|
Equity Awards if |
|
|
|
|
|
|
Total if |
|
|
|
|
|
|
|
Change of |
|
|
Terminated |
|
|
Total if Change |
|
|
Terminated |
|
Name |
|
Salary Continuation |
|
|
Control(1) |
|
|
Without Cause |
|
|
of Control |
|
|
Without Cause |
|
|
Victor M. Perez, |
|
$ |
286,000 |
|
|
$ |
412,500 |
(2) |
|
|
|
|
|
$ |
698,500 |
|
|
$ |
286,000 |
|
Chief Financial
Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Bryan, |
|
$ |
375,000 |
|
|
$ |
577,500 |
(3) |
|
|
|
|
|
$ |
952,500 |
|
|
$ |
375,000 |
|
President and Chief
Executive Officer
of Strata
Directional
Technology LLC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrence P. Keane, |
|
$ |
412,500 |
|
|
$ |
693,000 |
(3) |
|
|
|
|
|
$ |
1,105,500 |
|
|
$ |
412,500 |
|
Senior Vice
PresidentOilfield
Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Patterson, |
|
$ |
250,000 |
|
|
$ |
44,000 |
(3) |
|
|
|
|
|
$ |
294,000 |
|
|
$ |
250,000 |
|
Senior Vice
PresidentRental
Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The value of accelerated stock options have been calculated as the difference between
the strike price and the market price of $5.50 per share of our common stock as of December
31, 2008, multiplied by the number of options vesting as a result of the change of control.
The value of restricted stock has been calculated by multiplying $5.50, the closing price
of a share of our common stock on December 31, 2008, by the number of shares of restricted
stock held by each named executive officer that would vest. |
|
(2) |
|
This amount includes 25,000 performance awards in the form of restricted stock that
would automatically vest upon a change in control of Allis-Chalmers and 50,000 shares of
restricted stock that would vest only if there was a change of control of Allis-Chalmers
and the successor company refused to assume or continue the agreement covering these
shares. |
|
(3) |
|
The equity awards represented by this column would vest only if there was a change of
control of Allis-Chalmers and the successor company refused to assume or continue the
agreement covering these shares. |
- 23 -
The following table sets for the estimated payments and benefits that would be provided to Mr.
Hidayatallah if his employment had been terminated on December 31, 2008 by us due to his death or
disability, with or without cause or upon a change of control:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary |
|
|
Value of Unvested |
|
|
|
|
Event |
|
Continuation |
|
|
Equity Awards (1) |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death |
|
|
|
|
|
$ |
2,511,633 |
|
|
$ |
2,511,633 |
|
Disability |
|
|
|
|
|
$ |
2,511,633 |
|
|
$ |
2,511,633 |
|
For Cause |
|
|
|
|
|
|
|
|
|
|
|
|
Without Cause |
|
$ |
1,500,000 |
|
|
$ |
2,511,633 |
|
|
$ |
4,011,663 |
|
Change of Control |
|
$ |
1,500,000 |
|
|
$ |
2,511,633 |
|
|
$ |
4,011,663 |
|
|
|
|
(1) |
|
This amount represents 456,666 shares of performance-based restricted stock
multiplied by $5.50, the closing price of a share of our common stock on December 31,
2008. |
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of our board currently consists of Messrs. Afdhal and Tankel. No
current executive officer has ever served as a member of the board of directors or compensation
committee of any other entity (other than our subsidiaries) that has or has had one or more
executive officers serving as a member of our board or our Compensation Committee.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information as of December 31, 2008 with respect to the shares of
our common stock that may be issued under our existing equity compensation plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
|
|
|
|
Securities to be |
|
|
Weighted |
|
|
|
|
|
|
Issued Upon |
|
|
Average Exercise |
|
|
Number of Securities |
|
|
|
Exercise of |
|
|
Price of |
|
|
Remaining Available |
|
|
|
Outstanding |
|
|
Outstanding |
|
|
for Future Issuance |
|
|
|
Options, Warrants |
|
|
Options, Warrants |
|
|
Under Equity |
|
Plan Category |
|
And Rights |
|
|
and Rights |
|
|
Compensation Plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans approved by security holders |
|
|
1,379,398 |
|
|
$ |
10.94 |
|
|
|
281,789 |
|
Equity compensation plans not approved by security holders |
|
|
4,000 |
|
|
$ |
13.75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
1,383,398 |
|
|
$ |
10.95 |
|
|
|
281,789 |
|
|
|
|
|
|
|
|
|
|
|
|
Equity Compensation Plans Not Approved By Security Holders
These plans comprise the following:
In 1999 and 2000, the board of directors compensated board members who had served from 1989 to
March 31, 1999 without compensation by issuing promissory notes totaling $325,000 and by granting
stock options to these same individuals. Options to purchase 4,800 shares of common stock were
granted with an exercise price of $13.75. These options vested immediately and expire in March
2010. As of December 31, 2008, 4,000 of these options remain outstanding.
- 24 -
Securities Ownership of Management and Certain Beneficial Owners
The following table sets forth the beneficial ownership of outstanding shares of our common
stock as of April 5, 2009 for:
|
|
each of our named executive officers; |
|
|
|
each of our directors; |
|
|
|
all of our directors and executive officers as a group; and |
|
|
|
each other person known by us to be a beneficial owner of more than 5% of our outstanding
common stock. |
Beneficial ownership is determined in accordance with the rules of the SEC. Under the rules of
the SEC, a person is deemed to be a beneficial owner of a security if that person has or shares
voting power, which includes the power to vote or to direct the voting of such security, or
investment power, which includes the power to dispose of or to direct the disposition of such
security. A person is also deemed to be a beneficial owner of any securities of which that person
has a right to acquire beneficial ownership within 60 days. Under these rules, more than one person
may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial
owner of securities as to which he has no economic interest. Except as indicated by footnote, the
persons named in the table below have sole voting and investment power with respect to all shares
shown as beneficially owned by them, subject to community property laws where applicable.
The address of each director and executive officer is c/o Allis-Chalmers Energy Inc., 5075
Westheimer, Suite 890, Houston, Texas 77056.
|
|
|
|
|
|
|
|
|
|
|
Shares Beneficially Owned |
|
Name and Address |
|
Number |
|
|
Percentage(1) |
|
Named Executive Officers: |
|
|
|
|
|
|
|
|
Munawar H. Hidayatallah(2) |
|
|
458,553 |
|
|
|
1.3 |
|
Victor M. Perez(3) |
|
|
145,000 |
|
|
|
* |
|
David Bryan(4) |
|
|
112,500 |
|
|
|
* |
|
Terrence P. Keane(5) |
|
|
175,000 |
|
|
|
* |
|
Mark Patterson(6) |
|
|
10,000 |
|
|
|
* |
|
Directors: |
|
|
|
|
|
|
|
|
Ali H. M. Afdhal(7) |
|
|
11,000 |
|
|
|
* |
|
Munir Akram(8) |
|
|
4,000 |
|
|
|
* |
|
Alejandro P. Bulgheroni(9) |
|
|
4,000,000 |
|
|
|
11.2 |
|
Victor F. Germack(10) |
|
|
20,000 |
|
|
|
* |
|
James M. Hennessy(11) |
|
|
24,200 |
|
|
|
* |
|
John E. McConnaughy, Jr.(12) |
|
|
8,000 |
|
|
|
* |
|
Robert E. Nederlander(13) |
|
|
558,732 |
|
|
|
1.6 |
|
Zane Tankel(14) |
|
|
76,500 |
|
|
|
* |
|
Leonard Toboroff(15) |
|
|
371,594 |
|
|
|
1.0 |
|
All directors and executive officers as a
group (19 persons) |
|
|
6,180,412 |
|
|
|
17.0 |
|
Other 5% Holders: |
|
|
|
|
|
|
|
|
Dimensional Fund Advisors LP(16) |
|
|
2,261,216 |
|
|
|
6.3 |
|
Keeley Asset Management Corp.(17) |
|
|
1,953,000 |
|
|
|
5.5 |
|
Grupo Carso, S.A.B. de C.V. (18) |
|
|
3,297,000 |
|
|
|
9.2 |
|
|
|
|
* |
|
Less than one percent. |
|
(1) |
|
Based on an aggregate of 35,687,288 shares issued and outstanding as of April 5, 2009. |
- 25 -
|
|
|
(2) |
|
Includes 167,220 shares of common stock owned of record by the Hidayatallah Family Trust, of
which Mr. Hidayatallah is the trustee, and 8,000 shares of common stock owned of record by
Munawar Hidayatallah SEP IRA. These shares also include options to purchase 283,333 shares of common stock, which are
exercisable within 60 days. |
|
(3) |
|
Includes (i) 25,000 shares of restricted stock of which 5,000 shares vest on July 1, 2009,
5,000 shares vest on July 1, 2010 and 15,000 shares vest on July 1, 2011; (ii) 25,000 shares
of restricted stock of which 5,000 shares vest on December 10, 2009, 5,000 shares vest on
December 10, 2010 and 15,000 shares vest on December 10, 2011. Also includes options to
purchase 70,000 shares of common stock, which are exercisable within 60 days. |
|
(4) |
|
Includes restricted stock awards in the amount of (i) 30,000 shares, of which 7,500 shares
vest on June 14, 2009 and 22,500 shares vest on June 14, 2010 and (ii) 75,000 shares, of which
7,500 shares vests on October 4, 2009, 15,000 shares vests on October 4, 2010, 30,000 shares
vests on October 4, 2011, and 22,500 shares vests on October 4, 2012. |
|
(5) |
|
Includes restricted stock awards in the amount of (i) 36,000 shares, of which 9,000 shares
vest on June 14, 2009 and 27,000 shares vest on June 14, 2010; (ii) 45,000 shares, of which
9,000 shares vest on July 1, 2009, 9,000 shares vest on July 1, 2010 and 27,000 shares vest on
July 1, 2011 and (iii) 45,000 shares, of which 9,000 shares vest on December 10, 2009, 9,000
shares vest on December 10, 2010 and 27,000 shares vest on December 10, 2011. Also includes
options to purchase 40,000 shares of common stock, which are exercisable within 60 days. |
|
(6) |
|
Includes restricted stock awards in the amount of 8,000 shares, of which 2,000 shares vest on
January, 29, 2010 and 6,000 shares vest on January 29, 2011. |
|
(7) |
|
Includes 4,000 shares of restricted stock that vest on December 4, 2009. |
|
(8) |
|
Includes 4,000 shares of restricted stock that vest on December 4, 2009. |
|
(9) |
|
Includes (i) 1,000,000 shares held of record by Global Oilfield Holdings Ltd. and (ii)
2,989,000 shares held of record by Associated Petroleum Investors Ltd. Each such entity is
indirectly beneficially owned by Mr. Bulgheroni. Mr. Bulgheroni disclaims beneficial
ownership of these securities except to the extent of his pecuniary interest therein. Also
includes 4,000 shares of restricted stock that vest on December 4, 2009. |
|
(10) |
|
Includes 4,000 shares of restricted stock that vest on December 4, 2009. |
|
(11) |
|
Includes 4,000 shares of restricted stock that vest on December 4, 2009. |
|
(12) |
|
Includes 4,000 shares of restricted stock that vest on December 4, 2009. |
|
(13) |
|
206,666 of these shares are owned by RER Corp., a corporation controlled by Mr. Nederlander.
Includes 4,000 shares of restricted stock that vest on December 4, 2009. |
|
(14) |
|
Includes 4,000 shares of restricted stock that vest on December 4, 2009. |
|
(15) |
|
37,860 of these shares are owned by the Leonard Toboroff P.C. Profit Sharing Trust, of which
Mr. Toboroff is the sole trustee and beneficiary, and 5,001 of these shares are owned by Lenny
Corp., of which Mr. Toboroff is the sole shareholder. Includes 4,000 shares of restricted
stock that vest on December 4, 2009. |
|
(16) |
|
Based on information contained in a Schedule 13G filed on February 9, 2009, by Dimensional
Fund Advisors LP (Dimensional). Dimensional is an investment advisor to four investment
companies and serves as investment manager to certain other commingled group trusts and
separate accounts. These investment companies, trusts and accounts are the Funds. In its
role as investment advisor or manager, Dimensional possesses investment and/or voting power
over the reported shares that are owned by the Funds, and may be deemed to be the beneficial
owner of the shares held by the Funds. However, all reported securities are owned by the Funds
and Dimensional disclaims beneficial ownership of such securities. To the knowledge of
Dimensional, the interest of any one such Fund does not exceed 5% of the class of securities.
Dimensional has sole voting and dispositive power over 2,178,782 of the
shares. The principal business address of Dimensional Fund Advisors LP is Palisades West,
Building One, 6300 Bee Cave Road, Austin, Texas, 78746. |
- 26 -
|
|
|
(17) |
|
Based on information contained in a Schedule 13G filed on February 13, 2009, by Keeley Asset
Management Corp. and Keeley Small Cap Value Fund, a series of Keeley Funds, Inc. Keeley Asset
Management Corp. has sole voting and dispositive power over all of the shares. The principal
business address of each of Keeley Asset Management Corp. and Keeley Small Cap Value Fund is
401 South LaSalle Street, Chicago, Illinois 60605. |
|
(18) |
|
Based on information contained in a Schedule 13G/A filed on February 13, 2009, by Carso
Infraestructura y Construcción, S.A.B. de C.V. (Carso Infraestructura), Grupo Carso, S.A.B.
de C.V. (Grupo Carso), Inmobiliaria Carso, S.A. de C.V. (Immobiliaria) and each of Carlos
Slim Helú, Carlos Slim Domit, Marco Antonio Slim Domit, Patrick Slim Domit, María Soumaya Slim
Domit, Vanessa Paola Slim Domit and Johanna Monique Slim Domit (such individuals are
collectively referred to as the Slim Family). Grupo Carso owns a majority of the
outstanding voting securities of Carso Infraestructura, and the members of the Slim Family
beneficially own, directly and indirectly, a majority of the outstanding voting equity
securities of Grupo Carso. The members of the Slim Family are also beneficiaries of a Mexican
trust which in turn owns all of the outstanding voting securities of Inmobiliaria. As a
result, each member of the Slim Family may be deemed to have shared voting and dispositive
power over all of the reported shares. In addition, (i) Carso Infraestructura directly owns
1,816,000 of the shares, and as a result, each of Grupo Carso and Carso Infraestructura have
shared voting and dispositive power over such shares and (ii) Inmobiliaria directly owns
1,481,000 of the shares and has shared voting and dispositive power over such shares. The
principal business address for Carso Infraestructura and Grupo Carso is Miguel de Cervantes
Saveedra #255, Col. Granada CP, 11520 México, D.F., México. The principal business address
for Inmobiliaria is Avenida Insurgentes Sur #3500, PB, Colonia Peña Pobre, Delegación Tlalpan,
CP, 14060 México D.F., México. The principal business address for each member of the Slim
Family is Paseo de las Palmas 736, Colonia Lomas de Chapultepec, 11000 México, D.F., México. |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Certain Relationships and Related Party Transactions
A majority of DLS revenues are currently received pursuant to a strategic agreement with Pan
American Energy, LLC, or Pan American Energy, which is a joint venture owned 60% by British
Petroleum and 40% by Bridas Corporation. Alejandro P. Bulgheroni, a member of our board of
directors, and Carlos A. Bulgheroni, a former member of our board of directors and brother of
Alejandro Bulgheroni, may be deemed to indirectly beneficially own all of the outstanding capital
stock of Bridas Corporation and are members of the Management Committee of Pan American Energy,
and, as a result, have a material interest in the transactions contemplated by the strategic
agreement between DLS and Pan American Energy. During 2008, DLS received approximately $121 million
in revenues from services performed for Pan American Energy.
During 2008, we provided services to Beusa Energy, Inc., in an aggregate amount of
approximately $1 million. Alejandro P. Bulgheroni, one of our directors, serves as Chairman of
Beusa Energy, Inc.
We purchase general oilfield supplies and materials from Ralow Services, Inc., or Ralow. Ralow
is owned by Brad A. Adams and Bruce A. Adams who are brothers of Burt A. Adams, a former member of
our board of directors and our former President and Chief Operating Officer. During 2008, we
purchased supplies and materials from Ralow in an aggregate amount of approximately $747,000.
- 27 -
Related Party Transaction Approval Policy
Our board of directors have adopted a written policy relating to the approval of transactions
with related persons. For purposes of this policy, a related person transaction is one in which
Allis-Chalmers was, is or will be a participant and the amount involved exceeds $120,000, and in
which any related person had, has or will have a direct or indirect material interest. Pursuant to
the policy, all related party transactions must be reviewed and approved by the audit committee of
our board of directors.
Director Independence
Under rules adopted by the New York Stock Exchange, no member of the board of directors
qualifies as independent unless the board of directors affirmatively determines that the director
has no material relationship with us. The board of directors considers all relevant facts and
circumstances in making a determination of independence. In its determination of independence, the
board of directors reviews and considers all relationships and transactions between each director,
his or her family members or any business, charity or other entity in which the director has an
interest, on the one hand, and we, our affiliates or entities in which a member of our senior
management has an interest, on the other. As a result of its independence reviews, the board of
directors has affirmatively determined that Messrs. Afdhal, Akram, Hennessy, Germack, McConnaughy,
Nederlander and Tankel are independent as that term is defined under the corporate governance
rules of the New York Stock Exchange and applicable rules of the Securities and Exchange
Commission.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Principal Accounting Fees and Services
The following table shows the aggregate fees for professional services rendered by UHY LLP
during the years ended December 31, 2008 and 2007.
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year |
|
Fee Category |
|
2008 |
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
Audit Fees(1) |
|
$ |
1,038,459 |
|
|
$ |
1,111,415 |
|
Audit Related Fees(2) |
|
|
189,621 |
|
|
|
88,435 |
|
Tax Fees |
|
|
|
|
|
|
|
|
All Other Fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,228,080 |
|
|
$ |
1,199,850 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes fees and out-of-pocket charges paid for audit of our annual financial statements and
reviews of the related quarterly financial statements. |
|
(2) |
|
Includes fees paid for assurance and related services that are reasonably related to the
performance of the audit or review of our financial statements and are not reported under
Audit Fees. These services include accounting and reporting consultations. |
Pre-Approval Policies and Procedures
We have adopted a policy that the Audit Committee must approve in advance all audit and
non-audit services provided by our independent accountants. All of the audit and audit-related
services, and the fees therefor, provided by UHY LLP in 2008 and 2007 were pre-approved by the
Audit Committee.
- 28 -
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) (1) Financial Statements
None.
(2) Financial Statement Schedules
None.
(3) Exhibits
The exhibits listed on the accompanying Exhibit Index are filed as part of this annual
report on Form 10-K/A or incorporated by reference.
- 29 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized on April 29, 2009.
|
|
|
|
|
|
|
/s/ Munawar H. Hidayatallah
Munawar H. Hidayatallah
|
|
|
|
|
Chief Executive Officer and Chairman |
|
|
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, this report has been signed on the date indicated by the following persons on behalf of
the registrant and in the capacities indicated.
|
|
|
|
|
Name |
|
Title |
|
Date |
|
|
|
|
|
/s/ Munawar H. Hidayatallah
Munawar H. Hidayatallah
|
|
Chairman and Chief Executive Officer
(Principle Executive Officer)
|
|
April 29, 2009 |
|
|
|
|
|
/s/ Victor M. Perez
Victor M. Perez
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
April 29, 2009 |
|
|
|
|
|
/s/ Bruce Sauers
Bruce Sauers
|
|
Chief Accounting Officer
(Principal Accounting Officer)
|
|
April 29, 2009 |
|
|
|
|
|
/s/ Ali H. M. Afdhal
Ali H. M. Afdhal
|
|
Director
|
|
April 29, 2009 |
|
|
|
|
|
|
|
Director
|
|
April 29, 2009 |
|
/s/ Alejandro P. Bulgheroni
Alejandro P. Bulgheroni
|
|
Director
|
|
April 29, 2009 |
|
|
|
|
|
/s/ Victor F. Germack
Victor F. Germack
|
|
Director
|
|
April 29, 2009 |
|
|
|
|
|
|
|
Director
|
|
April 29, 2009 |
|
|
|
|
|
/s/ John E. McConnaughy, Jr.
John E. McConnaughy, Jr.
|
|
Director
|
|
April 29, 2009 |
|
|
|
|
|
|
|
Director
|
|
April 29, 2009 |
|
|
|
|
|
/s/ Zane Tankel
Zane
Tankel
|
|
Director
|
|
April 29, 2009 |
|
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/s/ Leonard Toboroff
Leonard Toboroff
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Director
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April 29, 2009 |
- 30 -
EXHIBIT INDEX
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Exhibit |
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Description |
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2.1 |
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First Amended Disclosure Statement pursuant to Section 1125 of
the Bankruptcy Code, dated September 14, 1988, which includes the
First Amended and Restated Joint Plan of Reorganization dated
September 14, 1988 (incorporated by reference to Registrants
Current Report on Form 8-K dated December 1, 1988). |
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2.2 |
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Reorganization Trust Agreement dated September 14, 1988 by and
between Registrant and John T. Grigsby, Jr., Trustee
(incorporated by reference to Exhibit D of the First Amended and
Restated Joint Plan of Reorganization dated September 14, 1988
included in Registrants Current Report on Form 8-K dated
December 1, 1988). |
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2.3 |
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Agreement and Plan of Merger dated as of May 9, 2001 by and among
Registrant, Allis-Chalmers Acquisition Corp. and Oil Quip
Rentals, Inc. (incorporated by reference to Exhibit 2.1 to the
Registrants Current Report on Form 8-K filed May 15, 2001). |
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2.4 |
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Stock Purchase Agreement dated February 1, 2002 by and between
Registrant and Jens H. Mortensen, Jr. (incorporated by reference
to Exhibit 10.1 to the Registrants Current Report on Form 8-K
filed February 21, 2002). |
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2.5 |
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Stock Purchase Agreement dated February 1, 2002 by and among
Registrant, Energy Spectrum Partners LP, and Strata Directional
Technology, Inc. (incorporated by reference to Exhibit 2.10 to
the Registrants Annual Report on Form 10-K for the year ended
December 31, 2001). |
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2.6 |
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Stock Purchase Agreement dated August 10, 2004 by and among
Allis-Chalmers Corporation and the investors named thereto
(incorporated by reference to Exhibit 10.37 to the Registration
Statement on Form S-1 (Registration No. 118916) filed on
September 10, 2004). |
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2.7 |
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Amendment to Stock Purchase Agreement dated August 10, 2004
(incorporated by reference to Exhibit 10.38 to the Registration
Statement on Form S-1 (Registration No. 118916) filed on
September 10, 2004). |
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2.8 |
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Addendum to Stock Purchase Agreement dated September 24, 2004
(incorporated by reference to Exhibit 10.55 to Registrants
Current Report on Form 8-K filed on September 30, 2004). |
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2.9 |
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Asset Purchase Agreement dated November 10, 2004 by and among
AirComp LLC, a Delaware limited liability company, Diamond Air
Drilling Services, Inc., a Texas corporation, and Marquis Bit
Co., L.L.C., a New Mexico limited liability company, Greg Hawley
and Tammy Hawley, residents of Texas and Clay Wilson and Linda
Wilson, residents of New Mexico (incorporated by reference to
Exhibit 10.61 to the Registrants the Current Report on Form 8-K
filed on November 16, 2004). |
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2.10 |
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Purchase Agreement and related Agreements by and among
Allis-Chalmers Corporation, Chevron USA, Inc., Dale Redman and
others dated December 10, 2004 (incorporated by reference to
Exhibit 10.63 to the Registrants Current Report on Form 8-K
filed on December 16, 2004). |
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2.11 |
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Stock Purchase Agreement dated April 1, 2005, by and among
Allis-Chalmers Energy Inc., Thomas Whittington, Sr., Werlyn R.
Bourgeois and SAM and D, LLC. (incorporated by reference to
Exhibit 10.51 to the Registrants Current Report on Form 8-K
filed on April 5, 2005). |
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2.12 |
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Stock Purchase Agreement effective May 1, 2005, by and among
Allis-Chalmers Energy Inc., Wesley J. Mahone, Mike T. Wilhite,
Andrew D. Mills and Tim Williams (incorporated by reference to
Exhibit 10.51 to the Registrants Current Report on Form 8-K
filed on May 6, 2005). |
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2.13 |
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Purchase Agreement dated July 11, 2005 among Allis-Chalmers
Energy Inc., Mountain Compressed Air, Inc. and M-I, L.L.C.
(incorporated by reference to Exhibit 10.42 to the Registrants
Current Report on Form 8-K filed on July 15, 2005). |
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2.14 |
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Asset Purchase Agreement dated July 11, 2005 between AirComp LLC,
W.T. Enterprises, Inc. and William M. Watts (incorporated by
reference to Exhibit 10.43 to the Registrants Current Report on
Form 8-K filed on July 15, 2005). |
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2.15 |
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Asset Purchase Agreement by and between Patterson Services, Inc.
and Allis-Chalmers Tubular Services, Inc. (incorporated by
reference to Exhibit 10.44 to the Registrants Current Report on
Form 8-K filed on September 8, 2005). |
- 31 -
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Exhibit |
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Description |
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2.16 |
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Stock Purchase Agreement dated as of December 20, 2005 between
the Registrant and Joe Van Matre (incorporated by reference to
Exhibit 10.33 to the Registrants Annual Report on Form 10-K for
the year ended December 31, 2005). |
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2.17 |
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Stock Purchase Agreement, dated as of April 27, 2006, by and
among Bridas International Holdings Ltd., Bridas Central Company
Ltd., Associated Petroleum Investors Limited, and the Registrant.
(incorporated by reference to Exhibit 2.3 to the Registrants
Quarterly Report on Form 10-Q for the quarter ended March 31,
2006). |
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2.18 |
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Stock Purchase Agreement, dated as of October 17, 2006, by and
between Allis-Chalmers Production Services, Inc. and Randolph J.
Hebert (incorporated by reference to Exhibit 10.1 to the
Registrants Current Report on Form 8-K filed on October 19,
2006). |
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2.19 |
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Asset Purchase Agreement, dated as of October 25, 2006, by and
between the Registrant and Oil & Gas Rental Services, Inc.
(incorporated by reference to Exhibit 10.1 to the Registrants
Current Report on Form 8-K filed on October 26, 2006). |
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2.20 |
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Agreement and Plan of Merger by and among the Registrant, Bronco
Drilling Company, Inc. and Elway Merger Sub, Inc., dated as of
January 23, 2008 (incorporated by reference to Exhibit 2.1 to the
Registrants Form 8-K filed on January 24, 2008). |
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2.21 |
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First Amendment, dated as of June 1, 2008, to the Agreement and
Plan of Merger by and among the Registrant, Bronco Drilling
Company, Inc. and Elway Merger Sub, Inc., dated as of January 23,
2008 (incorporated by reference to Exhibit 2.1 to the
Registrants Form 8-K filed on June 2, 2008). |
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2.22 |
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Stock Purchase Agreement, dated December 19, 2008, by and between
the Registrant and BrazAlta Resources Corp. (filed as
Exhibit 2.22 to the Registrants Form 10-K filed on March 9,
2009). |
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3.1 |
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Amended and Restated Certificate of Incorporation of Registrant
(incorporated by reference to Exhibit 3.1 to the Registrants
Annual Report on Form 10-K for the year ended December 31, 2001). |
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3.2 |
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Certificate of Designation, Preferences and Rights of the
Series A 10% Cumulative Convertible Preferred Stock ($.01 Par
Value) of Registrant (incorporated by reference to Exhibit 3.1 to
the Registrants Current Report on Form 8-K filed February 21,
2002). |
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3.3 |
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Second Amended and Restated By-laws of Registrant (incorporated
by reference to Exhibit 3.1 to the Registrants Current Report of
Form 8-K filed April 3, 2008). |
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3.4 |
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Certificate of Amendment of Certificate of Incorporation filed
with the Delaware Secretary of State on June 9, 2004
(incorporated by reference to Exhibit 3.3 to the Registrants
Quarterly Report on Form 10-Q for the quarter ended June 30,
2004). |
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3.5 |
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Certificate of Amendment of Certificate of Incorporation filed
with the Delaware Secretary of State on January 5, 2005
(incorporated by reference to Exhibit 3.5 to the Registrants
Current Report on Form 8-K filed January 11, 2005). |
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3.6 |
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Certificate of Amendment of Certificate of Incorporation filed
with the Delaware Secretary of State on August 16, 2005
(incorporated by reference to Exhibit 3.5 to the Registrants
Current Report on Form 8-K filed August 17, 2005). |
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4.1 |
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Specimen Stock Certificate of Common Stock of Registrant
(incorporated by reference to Exhibit 4.1 to the Registrants
Quarterly Report on Form 10-Q for the quarter ended June 30,
2004). |
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4.2 |
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Registration Rights Agreement dated as of March 31, 1999, by and
between Allis-Chalmers Corporation and the Pension Benefit
Guaranty Corporation (incorporated by reference to Exhibit 10.3
to the Registrants Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999). |
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4.3 |
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Registration Rights Agreement dated as of January 29, 2007 by and
among Allis-Chalmers Energy Inc., the Guarantors named therein
and the Initial Purchasers named therein (incorporated by
reference to Exhibit 10.2 to the Registrants Current Report on
Form 8-K filed on January 29, 2007). |
- 32 -
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Exhibit |
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Description |
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4.4 |
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Registration Rights Agreement dated as of January 18, 2006 by and
among Allis-Chalmers Energy Inc., the Guarantors named therein
and the Initial Purchasers named therein (incorporated by
reference to Exhibit 10.2 to the Registrants Current Report on
Form 8-K filed on January 24, 2006). |
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4.5 |
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Registration Rights Agreement dated as of August 14, 2006 by and
among the Registrant, the guarantors listed on Schedule A thereto
and RBC Capital Markets Corporation (incorporated by reference to
Exhibit 10.1 to the Registrants Form 8-K filed on August 14,
2006). |
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4.6 |
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Indenture dated as of January 18, 2006 by and among the
Registrant, the Guarantors named therein and Wells Fargo Bank,
N.A., as trustee (incorporated by reference to Exhibit 4.1 to the
Registrants Current Report on Form 8-K filed on January 24,
2006). |
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4.7 |
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First Supplemental Indenture dated as of August 11, 2006 by and
among Allis-Chalmers GP, LLC, Allis-Chalmers LP, LLC,
Allis-Chalmers Management, LP, Rogers Oil Tool Services, Inc.,
the Registrant, the other Guarantors (as defined in the Indenture
referred to therein) and Wells Fargo Bank, N.A (incorporated by
reference to Exhibit 4.2 to the Registrants Form 8-K filed on
August 14, 2006). |
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4.8 |
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Second Supplemental Indenture dated as of January 23, 2007 by and
among Petro-Rentals, Incorporated, the Registrant, the other
Guarantor parties thereto and Wells Fargo Bank, N.A., as trustee
(incorporated by reference to Exhibit 10.1 to the Registrants
Current Report on Form 8-K filed on January 24, 2007). |
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4.9 |
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Indenture, dated as of January 29, 2007, by and among the
Registrant, the Guarantors named therein and Wells Fargo Bank,
N.A. (incorporated by reference to Exhibit 4.1 to the
Registrants Current Report on Form 8-K filed on January 29,
2007). |
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4.10 |
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Form of 9.0% Senior Note due 2014 (incorporated by reference to
Exhibit A to Exhibit 4.1 to the Registrants Current Report on
Form 8-K filed on January 24, 2006). |
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4.11 |
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Form of 8.5% Senior Note due 2017 (incorporated by reference to
Exhibit A to Exhibit 4.1 to the Registrants Current Report on
Form 8-K filed on January 29, 2007). |
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10.1 |
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Amended and Restated Retiree Health Trust Agreement dated
September 14, 1988 by and between Registrant and Wells Fargo Bank
(incorporated by reference to Exhibit C-1 of the First Amended
and Restated Joint Plan of Reorganization dated September 14,
1988 included in Registrants Current Report on Form 8-K dated
December 1, 1988). |
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10.2 |
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Amended and Restated Retiree Health Trust Agreement dated
September 18, 1988 by and between Registrant and Firstar Trust
Company (incorporated by reference to Exhibit C-2 of the First
Amended and Restated Joint Plan of Reorganization dated
September 14, 1988 included in Registrants Current Report on
Form 8-K dated December 1, 1988). |
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10.3 |
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Product Liability Trust Agreement dated September 14, 1988 by and
between Registrant and Bruce W. Strausberg, Trustee (incorporated
by reference to Exhibit E of the First Amended and Restated Joint
Plan of Reorganization dated September 14, 1988 included in
Registrants Current Report on Form 8-K dated December 1, 1988). |
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10.4 |
* |
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Allis-Chalmers Savings Plan (incorporated by reference to
Registrants Annual Report on Form 10-K for the year ended
December 31, 1988). |
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10.5 |
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Allis-Chalmers Consolidated Pension Plan (incorporated by
reference to Registrants Annual Report on Form 10-K for the year
ended December 31, 1988). |
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10.6 |
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Agreement dated as of March 31, 1999 by and between Registrant
and the Pension Benefit Guaranty Corporation (incorporated by
reference to Exhibit 10.1 to the Registrants Quarterly Report on
Form 10-Q for the quarter ended June 30, 1999). |
- 33 -
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Exhibit |
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Description |
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10.7 |
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Letter Agreement dated May 9, 2001 by and between Registrant and the Pension Benefit Guarantee
Corporation (incorporated by reference to Exhibit 99.1 to the Registrants Current Report on Form 8-k
filed May 15, 2001). |
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10.8 |
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Termination Agreement dated May 9, 2001 by and between Registrant, the Pension Benefit Guarantee
Corporation and others (incorporated by reference to Exhibit 99.2 Registrants Current Report on
Form 8-K filed on May 15, 2001). |
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10.9 |
* |
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Executive Employment Agreement, dated April 1, 2007, by and between the Registrant and Munawar H.
Hidayatallah (incorporated by reference to Exhibit 10.3 to the Registrants Form 8-K filed on November
6, 2007). |
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10.10 |
* |
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Amendment to Executive Employment Agreement, dated as of December 31, 2008, by and between the
Registrant and Munawar H. Hidayatallah (incorporated by reference to Exhibit 10.2 to the Registrants
Form 8-K filed on January 7, 2009). |
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10.11 |
* |
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Executive Employment Agreement, effective April 3, 2007, by and between the Registrant and Victor M.
Perez (incorporated by reference to Exhibit 10.4 to the Registrants Form 8-K filed on November 6,
2007). |
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10.12 |
* |
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Executive Employment Agreement, effective July 1, 2007, by and between the Registrant and Terrence P.
Keane (incorporated by reference to Exhibit 10.1 to the Registrants Form 8-K filed on July 24, 2007). |
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10.13 |
* |
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Amendment to Employment Agreement among the Registrant, AirComp LLC and Terrene P. Keane, effective
April 1, 2008 (incorporated by reference to Exhibit 10.1 to the Registrants Form 8-K filed on May 1,
2008). |
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10.14 |
* |
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Second Amendment to Executive Employment Agreement, dated December 31, 2008, by and between the
Registrant, and Terrene P. Keane (filed as Exhibit 10.14 to the Registrants Form 10-K filed on March
9, 2009). |
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10.15 |
* |
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Executive Employment Agreement, dated December 3, 2007, by and between the Registrant and Theodore F.
Pound III (incorporated by reference to Exhibit 10.2 to the Registrants Form 8-K filed on December 6,
2007). |
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10.16 |
* |
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Executive Employment Agreement, effective July 1, 2007, by and between the Registrant and David K.
Bryan (incorporated by reference to Exhibit 10.1 to the Registrants Form 8-K filed on July 13, 2007). |
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10.17 |
* |
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Amendment to Executive Employment Agreement, dated December 31, 2008, by and between Strata Directional
Technology LLC and David K. Bryan (filed as Exhibit 10.17 to the Registrants Form 10-K filed on March
9, 2009). |
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10.18 |
* |
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Executive Employment Agreement, effective January 1, 2008, by and between the Registrant and Mark C.
Patterson (incorporated by reference to Exhibit 10.1 to the Registrants Form 8-K filed on February 25,
2008). |
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10.19 |
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Strategic Agreement dated July 1, 2003 between Pan American Energy LLC Sucursal Argentina and DLS
Argentina Limited Sucursal Argentina (incorporated by reference to Exhibit 10.13 to the Registrants
Quarterly Report on Form 10-Q filed on December 29, 2006). |
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10.20 |
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Amendment No. 1 dated May 18, 2005 to Strategic Agreement between Pan American Energy LLC Sucursal
Argentina and DLS Argentina Limited Sucursal Argentina (incorporated by reference to Exhibit 10.14 to
the Registrants Quarterly Report on Form 10-Q filed on December 29, 2006). |
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10.21 |
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Amendment No. 2 dated January 1, 2006 between Pan American Energy LLC Sucursal Argentina and DLS
Argentina Limited Sucursal Argentina (incorporated by reference to Exhibit 10.15 to the Registrants
Quarterly Report on Form 10-Q filed on December 29, 2006). |
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10.22 |
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Investor Rights Agreement, dated December 18, 2006, by and between the Registrant and Oil & Gas Rental
Services, Inc. (incorporated by reference to Exhibit 10.2 to the Registrants Current Report on
Form 8-K filed on December 19, 2006). |
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10.23 |
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First Amendment to Investor Rights Agreement, dated June 23, 2008, by and among the Registrant and the
holders named thereto (incorporated by reference to Exhibit 10.1 to the Registrants Current Report on
Form 8-K filed on June 26, 2008). |
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Exhibit |
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Description |
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10.24 |
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Investors Rights Agreement dated as of August 18, 2006 by and among the Registrant and the investors
named on Exhibit A thereto (incorporated by reference to Exhibit 10.1 to the Registrants Form 8-K
filed on August 14, 2006). |
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10.25 |
* |
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2003 Incentive Stock Plan (incorporated by reference to Exhibit 4.12 to the Registrants Current Report
on Form 8-K filed August 17, 2005). |
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10.26 |
* |
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Form of Option Certificate issued pursuant to 2003 Incentive Stock Plan (incorporated by reference to
Exhibit 10.41 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2003). |
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10.27 |
* |
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2006 Incentive Plan, as amended and restated (filed as Exhibit 10.27 to the Registrants Form 10-K
filed on March 9, 2009). |
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10.28 |
* |
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Form of Employee Restricted Stock Agreement pursuant to the Registrants 2006 Incentive Plan
(incorporated by reference to Exhibit 10.2 to the Registrants Form 8-K filed on September 18, 2006). |
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10.29 |
* |
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Form of Employee Nonqualified Stock Option Agreement pursuant to the Registrants 2006 Incentive Plan
(incorporated by reference to Exhibit 10.3 to the Registrants Form 8-K filed on September 18, 2006). |
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10.30 |
* |
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Form of Employee Incentive Stock Option Agreement pursuant to the Registrants 2006 Incentive Plan
(incorporated by reference to Exhibit 10.4 to the Registrants Form 8-K filed on September 18, 2006). |
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10.31 |
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Form of Non-Employee Director Restricted Stock Agreement pursuant to the Registrants 2006 Incentive
Plan (incorporated by reference to Exhibit 10.5 to the Registrants Form 8-K filed on September 18,
2006). |
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10.32 |
* |
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Form of Non-Employee Director Nonqualified Stock Option Agreement pursuant to the Registrants 2006
Incentive Plan (incorporated by reference to Exhibit 10.6 to the Registrants Form 8-K filed on
September 18, 2006). |
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10.33 |
* |
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Form of Performance Award Agreement, as amended and restated effective December 31, 2008, pursuant to
the Registrants 2006 Incentive Plan (filed as Exhibit 10.33 to the Registrants Form 10-K filed on
March 9, 2009). |
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10.34 |
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Second Amended and Restated Credit Agreement, dated as of April 26, 2007, by and among the Registrant,
as borrower, Royal Bank of Canada, as administrative agent and collateral agent, RBC Capital Markets,
as lead arranger and sole bookrunner, and the lenders party thereto (incorporated by reference to
Exhibit 10.1 to the Registrants Form 8-K filed on January 7, 2009). |
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10.35 |
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First Amendment to Second Amended and Restated Credit Agreement, dated as of December 3, 2007, by and
among the Registrant, the guarantors named thereto, Royal Bank of Canada and the lenders named thereto
(incorporated by reference to Exhibit 10.1 to the Registrants Form 8-K filed on December 6, 2007). |
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10.36 |
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Second Amendment to Second Amended and Restated Credit Agreement, dated as of December 29, 2008, by and
among the Registrant, as borrower, Royal Bank of Canada, as administrative agent, and the lenders named
thereto (incorporated by reference to Exhibit 10.1 to the Registrants Form 8-K filed on January 7,
2009). |
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10.37 |
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Amended and Restated Guaranty, dated April 26, 2007, by each of the guarantors named thereto in favor
of Royal Bank of Canada, as administrative agent and collateral agent (incorporated by reference to
Exhibit 10.2 to the Registrants Form 8-K filed on May 10, 2007). |
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10.38 |
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Amended and Restated Pledge and Security Agreement, dated April 26, 2007, by the Registrant in favor of
Royal Bank of Canada, as administrative agent and collateral agent (incorporated by reference to
Exhibit 10.3 to the Registrants Form 8-K filed on May 10, 2007). |
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Exhibit |
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Description |
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10.39 |
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Credit Agreement, dated January 31, 2008, among the Registrant, as lender, BCH Ltd., as borrower, and
BCH Energy do Brasil Servicos de Petroleo Ltda., as guarantor (incorporated by reference to
Exhibit 10.1 to the Registrants Form 8-K filed on February 6, 2008). |
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10.40 |
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Option to Purchase and Governance Agreement, dated January 31, 2008, among the Registrant, BrazAlta
Resources Corp. and BCH Ltd. (incorporated by reference to Exhibit 10.2 to the Registrants Form 8-K
filed on February 6, 2008). |
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10.41 |
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Subordination Agreement, dated January 31, 2008, among the Registrant, Standard Bank PLC, BCH Ltd., BCH
Energy do Brasil Servicos de Petroleo Ltda. and BrazAlta Resources Corp. (incorporated by reference to
Exhibit 10.3 to the Registrants Form 8-K filed on February 6, 2008). |
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10.42 |
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Form of Convertible Subordinated Secured Debenture (incorporate by reference to Schedule E to
Exhibit 10.1 to the Registrants Form 8-K filed on February 6, 2008). |
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10.43 |
* |
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Agreement, dated April 1, 2007, by and between the Registrant and David Wilde (incorporated by
reference to Exhibit 99.1 to the Registrants Current Report on Form 8-K filed on April 3, 2007). |
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10.44 |
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Mutual Termination and Release Agreement, dated August 8, 2008, by and among the Registrant, Bronco
Drilling Company, Inc. and Elway Merger Sub LLC (incorporated by reference to Exhibit 10.1 to the
Registrants Current Report on Form 8-K filed on August 8, 2008). |
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21.1 |
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Subsidiaries of Registrant (filed as Exhibit 21.1 to the Registrants Form 10-K filed on March 9, 2009). |
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23.1 |
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Consent of UHY LLP (filed as Exhibit 23.1 to the Registrants Form 10-K filed on March 9, 2009). |
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31.1 |
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Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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31.2 |
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Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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32.1 |
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Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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* |
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Compensation Plan or
Agreement. |
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