Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20529
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Filed by the
Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
o Preliminary
Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
þ Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material under
Rule 14a-12
DAWSON GEOPHYSICAL COMPANY
(Name of Registrant as Specified In
Its Charter)
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ No
fee required.
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| 1) | Title of each class of securities to which transaction applies: |
| 2) | Aggregate number of securities to which transaction applies: |
| 3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| 4) | Proposed maximum aggregate value of transaction: |
| 5) | Total fee paid: |
| o | Fee paid previously with preliminary materials. |
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| 1) | Amount Previously Paid: |
| 2) | Form, Schedule or Registration Statement No.: |
| 3) | Filing Party: |
| 4) | Date Filed: |
Table of Contents
DAWSON
GEOPHYSICAL COMPANY
508 West Wall, Suite 800
Midland, TX 79701
432-684-3000
508 West Wall, Suite 800
Midland, TX 79701
432-684-3000
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
To Be Held January 22,
2008
TO THE STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of the
Stockholders of Dawson Geophysical Company will be held at the
Petroleum Club of Midland, 501 West Wall, Midland, Texas
79701 at 10:00 a.m. on January 22, 2008 for the
following purposes:
| 1. | Electing Directors of the Company; | |
| 2. | Considering and voting upon a proposal to ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2008; and | |
| 3. | Considering all other matters as may properly come before the meeting. |
The Board of Directors has fixed the close of business on
November 23, 2007, as the record date for the determination
of stockholders entitled to notice of and to vote at the meeting
and at any adjournment or adjournments thereof.
DATED this 17th day of December, 2007.
BY ORDER OF THE BOARD OF DIRECTORS
Christina W. Hagan,
Secretary
IMPORTANT
Whether or not you expect to attend the meeting, you are
urged to execute the accompanying proxy card, which requires no
postage, and return it promptly. Any stockholder granting a
proxy may revoke the same at any time prior to its exercise by
executing a subsequent proxy or by written notice to the
Secretary of the Company or by attending the meeting and by
withdrawing the proxy. Also, whether or not you grant a proxy,
you may vote in person if you attend the meeting.
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Table of Contents
Dawson
Geophysical Company
508 West Wall, Suite 800
Midland, Texas 79701
PROXY STATEMENT
ANNUAL MEETING OF
STOCKHOLDERS
To Be Held Tuesday, January 22, 2008
The accompanying proxy is solicited on behalf of the Board of
Directors of Dawson Geophysical Company (the “Company”
or “we”) for use at our Annual Meeting of Stockholders
to be held on Tuesday, January 22, 2008, and at any
adjournment or adjournments thereof. In addition to the use of
the mails, proxies may be solicited by personal interview,
telephone and telegraph by officers, directors and other
employees of the Company, who will not receive additional
compensation for such services. We may also request brokerage
houses, nominees, custodians and fiduciaries to forward the
soliciting material to the beneficial owners of stock held of
record and will reimburse such persons for forwarding such
material. We will bear the cost of this solicitation of proxies.
Such costs are expected to be nominal. Proxy solicitation will
commence with the mailing of this Proxy Statement on or about
December 18, 2007.
Any stockholder giving a proxy has the power to revoke the same
at any time prior to its exercise by executing a subsequent
proxy or by written notice to our Secretary or by attending the
meeting and withdrawing the proxy.
As stated in the Notice of Annual Meeting of Stockholders
accompanying this Proxy Statement, the business to be conducted
and the matters to be considered and acted upon at the annual
meeting are as follows:
| 1. | Electing Directors of the Company; | |
| 2. | Considering and voting upon a proposal to ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2008; and | |
| 3. | Considering all other matters as may properly come before the meeting. |
Our voting securities consist solely of common stock, par value
$0.331/3
per share (“Common Stock”).
The record date for stockholders entitled to notice of and to
vote at the meeting is the close of business on
November 23, 2007, at which time there were
7,714,744 shares of Common Stock entitled to vote at the
meeting. Stockholders are entitled to one vote, in person or by
proxy, for each share of Common Stock held in their name on the
record date.
Stockholders representing a majority of the Common Stock
outstanding and entitled to vote must be present or represented
by proxy to constitute a quorum.
All proposals will require the affirmative vote of a majority of
the Common Stock present or represented by proxy at the meeting
and entitled to vote thereon. Cumulative voting for election of
directors is not authorized.
Abstentions and broker non-votes (shares held by brokers or
nominees as to which they have no discretionary power to vote on
a particular matter and have received no instructions from the
beneficial owners of such shares or persons entitled to vote on
the matter) will be counted for the purpose of determining
whether a quorum is present. For purposes of determining the
outcome of any matter to be voted upon as to
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which the broker has indicated on the proxy that the broker does
not have discretionary authority to vote, these shares will be
treated as not present at the meeting and not entitled to vote
with respect to that matter, even though those shares are
considered to be present at the meeting for quorum purposes and
may be entitled to vote on other matters. Abstentions, on the
other hand, are considered to be present at the meeting and
entitled to vote on the matter from which abstained.
With regard to the election of directors, votes may be cast in
favor of or withheld from each nominee. Votes that are withheld
will be excluded entirely from the vote and will have no effect.
Broker non-votes and other limited proxies will have no effect
on the outcome of the election of directors.
With regard to the proposal to ratify the appointment of KPMG
LLP as our independent registered public accounting firm for the
fiscal year ending September 30, 2008, an abstention will
have the same effect as a vote against the proposal. Broker
non-votes and other limited proxies will have no effect on the
outcome of the vote with respect to any of such proposals.
If the enclosed Proxy is properly executed and returned prior to
the Annual Meeting, the shares represented thereby will be voted
as specified therein. IF A STOCKHOLDER DOES NOT SPECIFY
OTHERWISE ON THE RETURNED PROXY, THE SHARES REPRESENTED BY THE
STOCKHOLDER’S PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES LISTED BELOW UNDER “ELECTION OF DIRECTORS”,
FOR THE APPOINTMENT OF KPMG LLP AND ON SUCH OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENTS
THEREOF.
At the Annual Meeting to be held on January 22, 2008, five
persons are to be elected to serve on our Board of Directors for
a term of one year and until their successors are duly elected
and qualified. All of the nominees have announced that they are
available for election to the Board of Directors. Our nominees
for the five directorships are:
Paul H. Brown
L. Decker Dawson
Gary M. Hoover
Stephen C. Jumper
Tim C. Thompson
For information about each nominee, see “Directors,”
below.
Our Board of Directors currently consists of two persons who are
employees of the Company and three persons who are not employees
of the Company (i.e., outside directors). Our Board of Directors
has determined that each of these three outside directors,
namely Messrs. Brown, Hoover and Thompson, are independent
in accordance with NASDAQ rules and under the Exchange Act. Set
forth below are the names, ages and positions of our nominees
for Director.
|
Name
|
Age |
Position
|
||||
|
L. Decker Dawson
|
87 | Chairman of the Board of Directors | ||||
|
Stephen C. Jumper
|
46 | President, Chief Executive Officer and Director | ||||
|
Paul H. Brown
|
76 | Director | ||||
|
Gary M. Hoover, Ph.D.
|
68 | Director | ||||
|
Tim C. Thompson
|
73 | Director | ||||
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Set forth below are descriptions of the principal occupations
during at least the past five years of the Company’s
nominees for director.
L. Decker Dawson. Mr. Dawson founded
the Company in 1952. He served as our President until being
elected as Chairman of the Board of Directors and Chief
Executive Officer in January 2001. In January 2006,
Mr. Dawson was reelected as Chairman of the Board of
Directors and retired as our Chief Executive Officer. Prior to
1952, Mr. Dawson was a geophysicist with Republic
Exploration Company, a geophysical company. Mr. Dawson
served as President of the Society of Exploration Geophysicists
(1989-1990),
received its Enterprise Award in 1997 and was awarded honorary
membership in 2002. He was Chairman of the Board of Directors of
the International Association of Geophysical Contractors in 1981
and is an honorary life member of such association. He was
inducted into the Permian Basin Petroleum Museum’s Hall of
Fame in 1997.
Stephen C. Jumper. Mr. Jumper, a
geophysicist, joined our Company in 1985, was elected Vice
President of Technical Services in September 1997 and was
subsequently elected President, Chief Operating Officer and
Director in January 2001. In January 2006, Mr. Jumper was
elected President, Chief Executive Officer and Director. Prior
to 1997, Mr. Jumper served as our manager of technical
services with an emphasis on
3-D
processing. Mr. Jumper has served the Permian Basin
Geophysical Society as Second Vice President (1991), First Vice
President (1992) and as President (1993).
Paul H. Brown.* Mr. Brown has served as
one of our directors since September 1999. Mr. Brown, an
independent management consultant with various companies since
May 1998, was President and Chief Executive Officer at WEDGE
Energy Group, Inc. from January 1985 to May 1998.
Gary M. Hoover, Ph.D.* Dr. Hoover
has served as one of our directors since December 2002.
Dr. Hoover, currently an independent consultant, retired
from Phillips Petroleum Company in 2002. His responsibilities
for the previous ten years with Phillips included geophysical
research management, geoscience technology coordination,
exploration and production technology consultation and active
research into new seismic data acquisition techniques.
Dr. Hoover served as Vice President of the Society of
Exploration Geophysicists
(1990-1991)
and received its Life Membership Award in 2000. Dr. Hoover
holds a doctorate in physics from Kansas State University.
Tim C. Thompson.* Mr. Thompson has served
as one of our directors since 1995. Mr. Thompson, an
independent management consultant with various companies since
May 1993, was President and Chief Executive Officer of
Production Technologies International, Inc. from November 1989
to May 1993.
| * | Indicates independence has been determined by the Board of Directors in accordance with NASDAQ rules. |
During the fiscal year ended September 30, 2007, the Board
of Directors held five regularly scheduled and five special
meetings. All of the Directors attended these meetings, except
one director was absent from one meeting.
Audit Committee. The Audit Committee is a
standing committee of the Board of Directors and currently
consists of Messrs. Brown, Hoover and Thompson, all of whom
are non-employee directors and “independent” as
defined in Rule 4200(a)(15) of the NASDAQ listing standards
and the Exchange Act. The Board of Directors has determined that
Mr. Thompson, who currently serves as the Chairman of the
Audit Committee, is an “audit committee financial
expert” (as that term is defined under the applicable SEC
rules and regulations) based on the Board’s qualitative
assessment of Mr. Thompson’s level of knowledge,
experience (as described above) and formal education. The
functions of the Audit Committee are to determine whether our
management has established internal controls which are sound,
adequate and working effectively; to ascertain whether our
assets are verified and safeguarded; to review and approve
external audits; to review audit fees and appointment of our
independent public accountants; and to review non-audit services
provided by the independent public accountants. The Audit
Committee held eight meetings during the fiscal year ended
September 30, 2007. All members of the Audit Committee
attended these meetings, except that two members were absent
from one meeting. The Audit Committee operates under a written
charter adopted by the Board of
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Directors that is annually reviewed and approved by the Audit
Committee. The charter is posted on our website at
http://www.dawson3d.com
in the “Corporate Governance” area of the
“Investor Relations” section. The report of the Audit
Committee for fiscal year 2007 is included in this proxy
statement on page 16.
Compensation Committee. The Compensation
Committee is a standing committee of the Board of Directors and
currently consists of Messrs. Brown, Hoover and Thompson,
all of whom are non-employee directors and
“independent” as defined in Rule 4200(a)(15) of
the NASDAQ listing standards and the Exchange Act. The primary
function of the Compensation Committee is to determine
compensation for our officers that is competitive and enables
the Company to motivate and retain the talent needed to lead and
grow our business. The Compensation Committee held three
meetings during the fiscal year ended September 30, 2007.
All members of the Compensation Committee attended each meeting.
The report of the Compensation Committee for fiscal year 2007 is
included in this proxy statement on page 10.
The Compensation Committee currently operates under a written
charter adopted and approved by the Board of Directors on
December 3, 2004. The charter is posted on our website at
http://www.dawson3d.com
in the “Corporate Governance” area of the
“Investor Relations” section.
Nominating Committee. The Nominating Committee
is a standing committee of the Board of Directors and currently
consists of Messrs. Brown, Hoover and Thompson, all of whom
are non-employee directors and “independent” as
defined in Rule 4200(a)(15) of the NASDAQ listing standards
and the Exchange Act. The Nominating Committee held one meeting
during the fiscal year ended September 30, 2007, at which
all members of the Nominating Committee were present. The
primary function of the Nominating Committee is to determine the
slate of Director nominees for election to our Board of
Directors. The Nominating Committee considers candidates
recommended by security holders, directors, officers and outside
sources, and considers each nominee’s personal and
professional integrity, experience, skills, ability and
willingness to devote the time and effort necessary to be an
effective board member with the commitment to acting in the best
interests of our Company and our stockholders. The Nominating
Committee also gives consideration to the Board of
Director’s having an appropriate mix of backgrounds and
skills, qualifications that the Committee believes must be met
by prospective nominees to the Board of Directors, qualities or
skills that the Committee believes are necessary for one or more
of our directors to possess and standards for the overall
structure and composition of our Board of Directors.
In accordance with Article II, Section 13 of our
Bylaws, stockholders who wish to have their nominees for
election to the Board of Directors considered by the Nominating
Committee must submit such nomination to our Secretary for
receipt not less than 80 days prior to the date of the next
Annual Meeting of stockholders and include (i) the name and
address of the stockholder making the nomination,
(ii) information regarding such nominee as would be
required to be included in the proxy statement, (iii) a
representation of the stockholder as to the class and number of
shares of the Company’s stock that are beneficially owned
by such stockholder, and the stockholder’s intent to appear
in person or by proxy at the meeting to propose such nomination,
and (iv) the written consent of the nominee to serve as a
director if so elected.
The Nominating Committee currently operates under a written
charter adopted and approved by the Board of Directors on
December 3, 2004. The charter is posted on our website at
http://www.dawson3d.com
in the “Corporate Governance” area of the
“Investor Relations” section. Following the election
of Directors at the Annual Meeting, the Nominating Committee
will be composed of the three independent, non-employee members
of the Board of Directors, currently Messrs. Brown, Hoover
and Thompson.
Directors who are also full-time officers or employees of our
Company receive no additional compensation for serving as
directors. Mr. Dawson, who serves as Chairman of the Board,
is also an executive officer of the Company and receives a
salary and certain other benefits.
All of our non-employee directors receive annual compensation of
$12,000. Each non-employee director also receives a fee of
$1,000 for each regular board of directors meeting. In addition,
the chairman of the audit committee receives an additional fee
of $500 per month. Each non-employee director also receives a
1,000-share
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grant of our common stock annually. We also reimburse the
reasonable expenses incurred by our directors in attending
meetings and other company business.
The table below summarizes the total compensation paid or earned
by each of our non-employee directors and Mr. Dawson during
fiscal 2007.
|
Fees Earned |
||||||||||||||||
|
or Paid in |
Stock |
All Other |
||||||||||||||
|
Name
|
Cash ($) | Awards ($)(1)(2) | Compensation ($) | Total ($) | ||||||||||||
|
L. Decker Dawson
|
130,070 | — | 289 | 130,359 | ||||||||||||
|
Tim C. Thompson
|
23,000 | 39,770 | — | 62,770 | ||||||||||||
|
Paul H. Brown
|
17,000 | 39,770 | — | 56,770 | ||||||||||||
|
Gary M. Hoover
|
17,000 | 39,770 | — | 56,770 | ||||||||||||
| (1) | The amounts in this column reflect the dollar amount we recognized as an expense with respect to restricted stock awards for financial statement reporting purposes during the year ended September 30, 2007, in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004) “Share-based Payment” (SFAS No. 123(R)). These amounts also reflect the grant date fair value of each stock award ($39.77 per share) as computed in accordance with SFAS No. 123(R). See Note 1 to our audited financial statements included in our 2007 Annual Report on Form 10-K for the assumptions made in our valuation of these stock awards. | |
| (2) | In fiscal 2007 each non-employee director received a 1,000-share grant of stock from the Dawson Geophysical Company 2004 Incentive Stock Plan. At September 30, 2007, the directors listed in the above table held the following aggregate outstanding shares of common stock: Mr. Dawson — 108,192, Mr. Thompson — 6,500, Mr. Brown — 1,000, and Mr. Hoover — 3,000. |
Overview
of Compensation Program
The Compensation Committee of the Board of Directors has
responsibility for establishing, implementing and monitoring
adherence to our compensation philosophy. The Compensation
Committee seeks to provide total compensation paid to our
executive officers that is fair, reasonable and competitive.
In this compensation discussion and analysis, the executive
officers named below who are current employees are referred to
as the “Named Executive Officers.”
|
Stephen C. Jumper
|
Chief Executive Officer, President | |
|
Christina W. Hagan
|
Chief Financial Officer, Executive Vice President, Secretary | |
|
C. Ray Tobias
|
Chief Operating Officer, Executive Vice President | |
|
Howell W. Pardue
|
Executive Vice President | |
|
K.S. Forsdick
|
Vice President |
Compensation
Philosophy and Objectives
The Compensation Committee believes that compensation for
executive officers should be based upon the principle that
compensation must be competitive to enable the Company to
motivate and retain the talent needed to lead and make the
Company grow, reward successful performance and closely align
the interests of our executives with the Company. The ultimate
objective of our compensation program is to improve stockholder
value.
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In setting compensation levels, the Compensation Committee
evaluates both performance and overall compensation. The review
of executive officers’ performance includes a mix of
financial and non-financial measures. In addition to business
results, employees are expected to uphold a commitment to
integrity, maximize the development of each individual, and
continue to improve the environmental quality of the
Company’s services and operations.
In order to continue to attract and retain the best employees,
the Compensation Committee believes the executive compensation
packages provided to the Company’s executives, including
the Named Executive Officers, should include both cash and
stock-based compensation.
The Compensation Committee has not retained a compensation
consultant to review the compensation practices of the
Company’s peers or to advise the Compensation Committee on
compensation matters.
Competitive
Considerations
We believe the competition for talented employees goes well
beyond the seismic industry to include oil and gas exploration
and development companies and oilfield service companies. Many
of the companies with whom we compete for top level talent are
larger and have more financial resources than we do. Both our
Compensation Committee and Chief Executive Officer
(“CEO”) consider known information regarding the
compensation practices of likely competitors when reviewing and
setting the compensation of all our officers, including the
Named Executive Officers.
Role of
Chief Executive Officer in Compensation Decisions
On an annual basis, our CEO reviews the performance of each of
the other Named Executive Officers and, based on this review,
makes recommendations to the Compensation Committee with respect
to the compensation of the Named Executive Officers. The CEO
considers internal pay equity issues, individual contribution
and performance, competitive pressures and company performance
in making his recommendations to the Compensation Committee. The
Compensation Committee may accept or adjust such recommendations.
Establishing
Executive Compensation
Consistent with our compensation objectives, the Compensation
Committee has structured our annual and long-term
incentive-based executive compensation to attract and retain the
best talent, reward financial success and closely align
executives’ interests with the Company’s interests. In
setting the compensation, the Compensation Committee reviews
total direct compensation for the Named Executive Officers,
which includes salary, annual cash incentives and long-term
equity incentives. The appropriate level and mix of incentive
compensation is not based upon a formula, but is a subjective
determination made by the Compensation Committee.
We do not have a policy of stock ownership requirements. In
addition, we do not have any employment contracts or change of
control agreements.
The Compensation Committee reviews compensation matters from
time to time during the year. The Compensation Committee
typically recommends the accrual of amounts for the cash bonus
and profit sharing plan in the first quarter of a fiscal year
and then recommends the allocation of the accrued amounts in the
first quarter of the following fiscal year. In addition, the
Compensation Committee usually performs its annual review of
officer salaries during the second quarter of each fiscal year.
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Elements
of Compensation
For fiscal 2007, the components of compensation for our Named
Executive Officers included the following elements:
|
Element
|
Form of Compensation
|
Purpose
|
||
|
Base Salary
|
Cash | Provide competitive, fixed compensation to attract and retain executive talent. | ||
|
Short-Term Incentive
|
Cash Bonus and Profit Sharing | Create a strong financial incentive for achieving financial success and for the competitive retention of executives. | ||
|
Long Term Equity Incentive
|
Stock Option and Restricted Stock Grants | Provide incentives to strengthen alignment of executive team interests with Company interests, reward long-term achievement and promote executive retention. | ||
|
Health, Retirement and Other Benefits
|
Eligibility to participate in plans generally available to our employees, including 401(k); profit-sharing; health; life insurance and disability plans | Plans are part of broad-based employee benefits. | ||
|
Executive Benefits and Perquisites
|
Club memberships | Provide benefits to promote marketing of the Company. |
Base
Salary
The Compensation Committee believes base salary is a critical
element of executive compensation because it provides executives
with a base level of monthly income. We do not have a formal
salary program with salary grades or salary ranges. Instead
salary increases are awarded periodically based on individual
performance, when allowed by economic conditions. The
Compensation Committee determines the base salary of each Named
Executive Officer based on his or her position and
responsibility. During its review of base salaries for
executives, the Compensation Committee primarily considers the
internal value of the position relative to other positions,
external value of the position or comparable position,
individual performance, and ability to represent our
Company’s values. For Named Executive Officers other than
the CEO, the Compensation Committee also considers the
recommendations of the CEO.
The Compensation Committee typically considers base salary
levels annually as part of its review of our performance and
from time to time upon a promotion or other change in job
responsibilities. As a result of its fiscal 2007 review and in
recognition of outstanding performance by the Named Executive
Officers and our Company, the Compensation Committee made base
salary increases for the following Named Executive Officers
effective as of April 2, 2007. The following table reflects
these increases:
|
Salary Increase |
||||||||
| Effective April, 2007 | ||||||||
|
Name
|
From | To | ||||||
|
Stephen C. Jumper
|
275,000 | 310,000 | ||||||
|
Christina W. Hagan
|
175,000 | 187,500 | ||||||
|
C. Ray Tobias
|
175,000 | 200,000 | ||||||
|
Howell W. Pardue
|
145,000 | 165,000 | ||||||
|
Kermit S. Forsdick
|
140,000 | 162,500 | ||||||
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Short-Term
Incentive Compensation
The Named Executive Officers participate in our profit sharing
program, along with all other eligible employees. The profit
sharing program is designed to award our employees for the
financial success of the Company. In the first quarter of each
year, our Board of Directors, acting on the recommendation of
our Compensation Committee, determines a pool amount available
to be allocated in the following December to all eligible
employees, including the Named Executive Officers. For fiscal
2007, our Board of Directors set the pool at 5% of our pre-tax
net income. The distribution of the pool to eligible employees
is based upon a variety of factors including base salary,
internal value of the position and seniority. The fiscal 2007
profit sharing awards paid to our Named Executive Officers are
set forth in the Summary Compensation Table for Fiscal 2007 on
page 11. In November 2007, our Board of Directors preliminarily
set the fiscal 2008 allocation for the profit sharing plan at 5%
of our pre-tax net income for fiscal 2008.
We also use short-term incentive compensation to meet market and
competitive demands. Accordingly, eligible employees, including
each Named Executive Officer, were awarded a discretionary cash
bonus in December 2007. Bonus amounts were based upon a variety
of factors including perceived competitive pressures, base
salary, internal value of the position and seniority. The fiscal
2007 bonus amounts paid to our Named Executive Officers are
included in the Summary Compensation Table for Fiscal 2007 on
page 11.
Long-Term
Equity Incentive Compensation
Long-term equity incentives encourage participants to focus on
long-term performance and provide an opportunity for executive
officers and certain designated key employees to increase their
stake in our Company through grants of restricted common stock
and stock options. By using a mix of stock options and
restricted stock grants, we are able to compensate our Named
Executive Officers for sustained increases in our stock
performance as well as long-term growth. During the past few
years, we have emphasized grants of restricted stock as our
primary long-term equity incentive compensation tool due to our
management’s belief that such grants are the best method of
rewarding and retaining the Named Executive Officers.
In fiscal 2007, our Compensation Committee approved restricted
stock grants to the Named Executive Officers, other officers and
certain other employees. In addition to rewarding these
individuals for our long-term success and aligning the interests
of the Named Executive Officers with the Company, these grants
also help us to retain talented employees because the shares
cannot be sold during a three-year restricted period. We
calculate the accounting cost of the restricted stock by taking
the average of the high and low price of the our common stock on
the date of grant, and we recognize these costs over the vesting
period of the restricted stock. The restricted shares granted in
fiscal 2007 were awarded under our 2004 Incentive Stock Plan.
In past years, we have also granted stock options to our Named
Executive Officers. In these cases, the exercise price of the
stock options equaled the average of the high and low trading
price of our common stock on the NASDAQ Global Select Market on
the date of grant. We have not granted options with an exercise
price that is less than the average of the high and low trading
price of our common stock on the NASDAQ Global Select Market on
the date of grant, and we have not made grants with a grant date
that occurs before the Board of Directors’ action. We did
not award any stock options in fiscal 2007.
Our Compensation Committee recommends to our Board of Directors
the equity awards to be made to each Named Executive Officer
prior to the grant of such equity awards by the Board of
Directors. Grants of equity may be made at any time during the
year, but in the last few years such awards have been made at
the beginning of each fiscal year. We do not time the release of
material non-public information with the purpose of affecting
the value of executive compensation.
The following sets forth information regarding our incentive
plans.
Stock Plans. We have three equity compensation
plans: the 2000 Incentive Stock Plan (the “2000 Plan); the
2004 Incentive Stock Plan (the “2004 Plan”) and the
2006 Stock and Performance Incentive Plan (the “2006
Plan”) (collectively, the “Stock Plans”).
8
Table of Contents
The 2000 Plan provides options to purchase 500,000 shares
of authorized but unissued common stock of the Company. The
option price is the market value of the Company’s common
stock at date of grant. Options are exercisable 25% annually
from the date of the grant and the options expire five years
from the date of grant. The Company may also award stock and
restricted stock under the 2000 Plan. Restricted stock vests
after three years and is granted at the market value of the
Company’s common stock on the date of grant. The 2000 Plan
provides that 50,000 of the 500,000 shares of authorized
but unissued common stock may be awarded to officers, directors
and employees of the Company for the purpose of additional
compensation.
The 2004 Plan provides 375,000 shares of authorized but
unissued common stock of the Company. The 2004 Plan operates
like the 2000 Plan except that of the 375,000 shares, up to
125,000 shares may be awarded to officers, directors, and
employees of the Company and up to 125,000 shares may be
awarded with restrictions for the purpose of additional
compensation.
Although shares are available under the 2000 and 2004 Plans, we
do not intend to issue shares from these plans in the future.
In fiscal 2007, we adopted the 2006 Plan. The 2006 Plan provides
750,000 shares of authorized but unissued shares of our
common stock to be awarded to our officers, directors, employees
and consultants. These awards can be made in various forms,
including options, grants or restricted stock grants. Stock
option grant prices awarded under the 2006 Plan may not be less
than the fair market value of the common stock subject to such
option on the grant date, and the term of stock options may
extend no more than ten years after the grant date. Our
Compensation Committee selects the employees and consultants to
whom the awards will be granted and determines the number and
type of awards to be granted to such individual. Our Board of
Directors selects the nonemployee directors eligible to whom
awards will be granted and determines the number and type of
award to be granted to such individuals. All of our employees,
nonemployee directors and consultants are eligible to receive
awards under the 2006 Plan. The 2006 Plan has a term of ten
years from the date of shareholder approval such that the Plan
expires January 2017. No awards have been issued under the 2006
Plan as of September 30, 2007.
Health,
Retirement and Other Benefits
401(k) Plan. Effective January 1, 2002,
we initiated a 401(k) plan as part of our employee benefits
package in order to retain quality personnel. This is a
tax-qualified retirement savings plan under which all employees,
including the Named Executive Officers, are able to contribute
to the plan the lesser of up to 100% of their annual salary or
the limits prescribed by the Internal Revenue Service on a
before-tax basis. During fiscal year 2007, we elected to match
100% of employee contributions up to a maximum of 6% of the
participant’s gross salary. Our matching contributions for
all of our employees during fiscal 2007 were approximately
$912,000. All contributions to the plan as well as our matching
contributions are fully vested upon contribution. Our Board of
Directors has determined that we will once again match employee
contributions up to a maximum of 6% of gross salary during
fiscal 2008.
Health and Life. We offer major medical,
dental and life insurance to all eligible employees. We also
provide the following other insurance benefits to the majority
of our salaried employees:
| • | Life insurance — up to two times annual earnings with limitations based on age and a maximum benefit of $400,000; and | |
| • | Long-term disability — 60% of monthly earnings up to $10,000 per month. |
Executive
Benefits and Perquisites
We provide our Named Executive Officers with perquisites and
other personal benefits that are believed to be reasonable and
consistent with the overall compensation program to better
enable us to attract and retain
9
Table of Contents
superior employees for key positions. Our Compensation Committee
reviews the levels of these perquisites and other personal
benefits provided to the Named Executive Officers on an annual
basis.
To the Stockholders of Dawson Geophysical Company:
The Compensation Committee of the Board has reviewed and
discussed the Compensation Discussion and Analysis,
above, with management. Based on this review and discussion, the
Compensation Committee recommended to the Board that the
Compensation Discussion and Analysis be included in this
proxy statement for the fiscal year ended September 30,
2007.
|
December 17, 2007
|
Compensation Committee | |
| Paul H. Brown | ||
| Gary M. Hoover | ||
| Tim C. Thompson |
The following narrative, tables and footnotes describe the
“total compensation” earned during fiscal 2007 by our
Named Executive Officers. The total compensation presented below
in the Summary Compensation Table for Fiscal 2007 does not
reflect the actual compensation received by our Named Executive
Officers in 2007. The actual value realized by our Named
Executive Officers in 2007 from long-term incentives (in this
case, stock options) is presented in the Option Exercises and
Stock Vested table on page 13 of this proxy statement.
Long-term incentive awards for 2007 are presented in the Grants
of Plan-Based Awards table on page 12 of this proxy
statement.
The individual components of the total compensation reflected in
the Summary Compensation Table are broken out below:
Salary — The table reflects base salary
earned during 2007. See “Compensation Discussion and
Analysis — Elements of Compensation — Base
Salary.”
Bonus — In 2007, our Named Executive
Officers were awarded a cash bonus and participated in our
profit sharing plan. See “Compensation Discussion and
Analysis — Elements of Compensation —
Short-Term Incentive Compensation.”
Stock Awards — The awards disclosed under
the heading “Stock Awards” consist of a grant of
restricted stock to our Named Executive Officers. Other details
about the restricted stock grant are included in the Grant of
Plan-Based Awards Table below. See also “Compensation
Discussion and Analysis — Elements of
Compensation — Long-Term Incentive Compensation.”
10
Table of Contents
The following table sets forth information concerning the
compensation paid to our Named Executive Officers for services
to the Company during the fiscal year ended September 30,
2007:
|
Stock |
All other |
|||||||||||||||||||||||
|
Name and |
Salary |
Bonus |
Awards |
Compensation |
Total |
|||||||||||||||||||
|
Principal Position
|
Year | ($) | ($)(1)(2) | ($)(3) | ($)(4) | ($) | ||||||||||||||||||
|
Stephen C. Jumper
|
2007 | 291,545 | 92,034 | 54,100 | 17,197 | 454,876 | ||||||||||||||||||
|
Chief Executive Officer and President
|
||||||||||||||||||||||||
|
Christina W. Hagan
|
2007 | 180,769 | 59,740 | 40,575 | 12,522 | 293,606 | ||||||||||||||||||
|
Executive Vice President and Chief Financial Officer
|
||||||||||||||||||||||||
|
C. Ray Tobias
|
2007 | 187,301 | 60,521 | 40,575 | 12,912 | 301,309 | ||||||||||||||||||
|
Executive Vice President and Chief
Operating Officer |
||||||||||||||||||||||||
|
Howell W. Pardue
|
2007 | 154,511 | 60,827 | 40,575 | 8,300 | 264,213 | ||||||||||||||||||
|
Executive Vice President
|
||||||||||||||||||||||||
|
Kermit S. Forsdick
|
2007 | 151,035 | 53,105 | 27,050 | 10,443 | 241,633 | ||||||||||||||||||
|
Vice President
|
||||||||||||||||||||||||
| (1) | Includes amounts payable pursuant to our profit-sharing plan and the discretionary cash bonus described above in “Short-Term Incentive Compensation.” | |
| (2) | Amounts paid pursuant to our profit-sharing plan in December 2006 for fiscal 2006 were as follows: Mr. Jumper — $35,763, Mr. Tobias — $20,585, Ms. Hagan — $21,444, Mr. Pardue — $21,077, and Mr. Forsdick — $15,268. Such amounts were not determinable at the time of filing of our proxy statement for the year ended 2006 (the “2006 Proxy”). We indicated in our 2006 Proxy that these bonus amounts would be disclosed in this proxy statement. However, under the revised rules of the Commission (which were not applicable to us at the time of the filing of the 2006 Proxy), we are not required to include, and have not included, 2006 compensation in the summary compensation table set forth above. | |
| (3) | The amounts in this column reflect the dollar amount we recognized as an expense with respect to restricted stock awards for financial statement reporting purposes during the year ended September 30, 2007, in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004) “Share-based Payment” (SFAS No. 123(R)). See Note 1 to our audited financial statements included in our 2007 Annual Report on Form 10-K for the assumptions made in our valuation of these stock awards. | |
| (4) | The amount shown in this column includes our matching contributions under our 401(K) plan for the following Named Executive Officers: Mr. Jumper — $15,349; Ms. Hagan — $10,846; and Mr. Tobias — $11,192. |
11
Table of Contents
The following table reports all grants of plan-based awards made
during fiscal 2007 to our Named Executive Officers:
|
All Other Stock |
Grant Date |
|||||||||||||||
|
Awards: Number |
Fair Value of |
|||||||||||||||
|
of Shares of Stock |
Stock and Option |
|||||||||||||||
|
Name
|
Approval Date | Grant Date | or Units (#)(1) | Awards ($)(2) | ||||||||||||
|
Stephen C. Jumper
|
9/26/2006 | 10/04/2006 | 6,000 | 162,300 | ||||||||||||
|
Christina W. Hagan
|
9/26/2006 | 10/04/2006 | 4,500 | 121,725 | ||||||||||||
|
C. Ray Tobias
|
9/26/2006 | 10/04/2006 | 4,500 | 121,725 | ||||||||||||
|
Howell W. Pardue
|
9/26/2006 | 10/04/2006 | 4,500 | 121,725 | ||||||||||||
|
Kermit S. Forsdick
|
9/26/2006 | 10/04/2006 | 3,000 | 81,150 | ||||||||||||
| (1) | All grants made to Named Executive Officers in fiscal 2007 were grants of restricted shares made pursuant to the 2004 Plan. These grants vest on the third anniversary of the original grant date. | |
| (2) | Represents the aggregate grant date fair value of the award computed in accordance with SFAS No. 123(R). |
For a detailed discussion of each of the awards in the above
table and their material terms, refer to “Executive
Compensation — Summary Compensation Table” and
“Compensation Discussion and Analysis — Long-Term
Equity Incentive Compensation” above.
The following table provides information regarding the value of
all unexercised options and unvested restricted stock previously
awarded to our Named Executive Officers:
| Option Awards | Stock Awards | |||||||||||||||||||||||
|
Number of |
||||||||||||||||||||||||
|
Number of Securities |
Shares or |
Market Value |
||||||||||||||||||||||
|
Underlying |
Units of |
of Shares or |
||||||||||||||||||||||
|
Number of Securities |
Unexercised |
Option |
Option |
Stock That |
Units of Stock |
|||||||||||||||||||
|
Underlying Unexercised |
Options (#) |
Exercise |
Expiration |
Have not |
That Have Not |
|||||||||||||||||||
|
Name:
|
Options (#) Exercisable | Unexercisable | Price ($) | Date | Vested (#) | Vested ($)(3) | ||||||||||||||||||
|
Stephen C. Jumper
|
7,500 | 2,500 | (1) | 7.06 | 11/3/2008 | 6,000 | 465,060 | |||||||||||||||||
| 5,000 | 5,000 | (2) | 17.91 | 11/9/2009 | ||||||||||||||||||||
|
Christina W. Hagan
|
3,750 | 1,250 | (1) | 7.06 | 11/3/2008 | 4,500 | 348,795 | |||||||||||||||||
| 2,500 | 2,500 | (2) | 17.91 | 11/9/2009 | ||||||||||||||||||||
|
C. Ray Tobias
|
3,750 | 1,250 | (1) | 7.06 | 11/3/2008 | 4,500 | 348,795 | |||||||||||||||||
| 2,500 | 2,500 | (2) | 17.91 | 11/9/2009 | ||||||||||||||||||||
|
Howell W. Pardue
|
3,750 | 1,250 | (1) | 7.06 | 11/3/2008 | 4,500 | 348,795 | |||||||||||||||||
|
Kermit S. Forsdick
|
3,750 | 1,250 | (1) | 7.06 | 11/3/2008 | 3,000 | 232,530 | |||||||||||||||||
| — | 1,000 | (2) | 17.91 | 11/9/2009 | ||||||||||||||||||||
| (1) | Shares underlying options that vested on 11/3/2007. | |
| (2) | Shares underlying options that vest in equal installments on 11/9/2007 and 11/9/2008. | |
| (3) | The market value was computed by multiplying the closing market price of the common stock at fiscal year-end 2007 ($77.51) times the number of restricted shares that have not vested. |
12
Table of Contents
The following table provides information with respect to the
options exercised by our Named Executive Officers during fiscal
2007. No restricted stock held by the Named Executive Officers
vested during fiscal 2007:
| Option Awards | ||||||||
|
Number of Shares |
Value |
|||||||
|
Acquired on |
Realized on |
|||||||
|
Name
|
Exercise (#) | Exercise ($) | ||||||
|
Stephen C. Jumper
|
20,000 | 978,935 | ||||||
|
Christina W. Hagan
|
20,000 | 1,027,794 | ||||||
|
C. Ray Tobias
|
12,500 | 534,322 | ||||||
|
Howell W. Pardue
|
12,500 | 345,448 | ||||||
|
Kermit S. Forsdick
|
7,250 | 319,358 | ||||||
Our only retirement plan for our employees, including our Named
Executive Officers, is our 401(k) plan. We do not have a pension
plan in which our Named Executive Officers are eligible to
participate.
We do not have a non-qualified deferred compensation plan.
We do not have any employment contracts or change of control
agreements. However, our newest stock plan, the 2006 Stock and
Performance Incentive Plan (the “2006 Plan”), does
permit accelerated vesting of stock awards in the event of a
change of control or upon termination of employment as described
below.
In the event of a “change of control,” all awards
granted under our 2006 Plan immediately vest and become fully
exercisable and any restrictions applicable to the award lapse.
All stock options and stock appreciation rights will remain
exercisable until (a) the expiration of the term of the
award or, (b) if the participant should die before the
expiration of the term of the award, until the earlier of:
(i) the expiration of the term of the award or
(ii) two (2) years following the date of the
participant’s death. Our 2006 Plan form stock option and
restricted stock agreements define a “change of
control” as occurring when (i) any “person”
(as such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) is or becomes a beneficial
owner, directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the total voting
power of the Company’s then outstanding securities;
(ii) the individuals who were members of the Board of
Directors of the Company (the “Board”) immediately
prior to a meeting of the shareholders of the Company involving
a contest for the election of directors shall not constitute a
majority of the Board following such election unless a majority
of the new members of the Board were recommended or approved by
majority vote of members of the Board immediately prior to such
shareholder meeting; (iii) the Company shall have merged
into or consolidated with another corporation, or merged another
corporation into the Company, on a basis whereby less than fifty
percent (50%) of the total voting power of the surviving
corporation is represented by shares held by former shareholders
of the Company prior to such merger or consolidation; or
(iv) the Company shall have sold, transferred or exchanged
all, or substantially all, of its assets to another corporation
or other entity or person.
In addition our form stock option and restricted stock
agreements also provide for accelerated vesting upon death or
disability or if a participant’s employment is terminated
by the Company for reasons other than cause. Stock options which
are accelerated under this provision may be exercised in whole
or in part until their expiration pursuant to the terms of the
stock option agreement or the 2006 Plan.
13
Table of Contents
As of September 30, 2007, none of the Named Executive
Officers held any options, shares of restricted stock or other
awards under the 2006 Plan.
During the fiscal year ended September 30, 2007, our
Compensation Committee was composed of Messrs. Brown,
Hoover and Thompson. No member of the Compensation Committee was
an officer or employee of the Company. None of our executive
officers served on the board of directors or the compensation
committee of any other entity, for which any officers of such
other entity served either on our Board of Directors or our
Compensation Committee.
Transactions with related persons are reviewed, approved or
ratified in accordance with the policies and procedures set
forth in our code of business conduct and ethics, our Audit
Committee charter, the procedures described below with respect
to director and officer questionnaires and the other procedures
described below.
Our code of business conduct and ethics provides that directors,
officers, and employees must avoid situations that involve, or
could appear to involve, “conflicts of interest” with
regard to the Company’s interest. Exceptions may only be
made after review of fully disclosed information and approval of
specific or general categories by senior management (in the case
of employees ) or the Board (in the case of officers or
directors). Any employee, officer or director who becomes aware
of a conflict or potential conflict of interest should bring the
matter to the attention of a supervisor or other appropriate
personnel.
A “conflict of interest” exists when a person’s
private interest interferes in any way with the interests of the
Company. Conflicts of interest generally interfere with the
person’s effective and objective performance of his or her
duties or responsibilities to the Company. Our code of business
conduct and ethics sets forth several examples of how conflicts
of interest may arise, including when:
| • | a director, officer or employee or members of their immediate family, receive improper personal benefits because of their position with the Company; | |
| • | the Company gives loans to, or guarantees of obligations of directors, officers, employees or their immediate family members; or | |
| • | the director, officer, employee or their immediate family members use Company property or confidential information for personal use. |
Our Audit Committee also has the responsibility, according to
its charter, to review, assess and approve or disapprove
conflicts of interest and related-party transactions.
Each year we require all our directors, nominees for director
and executive officers to complete and sign a questionnaire in
connection with the solicitation of proxies for use at our
annual general meeting of members. The purpose of the
questionnaire is to obtain information, including information
regarding transactions with related persons, for inclusion in
our proxy statement or annual report.
In addition, we annually review SEC filings made by beneficial
owners of more than five percent of any class of our voting
securities to determine whether information relating to
transactions with such persons needs to be included in our proxy
statement or annual report.
Based on these reviews, our Board of Directors has determined
that the Company did not engage in any transactions during the
fiscal year ended September 30, 2007 with related persons
which would require disclosure under Item 404 of
Regulation S-K
adopted by the SEC, and there are currently no such proposed
transactions.
14
Table of Contents
The following table sets forth certain information regarding
beneficial ownership of our Common Stock, as of
November 23, 2007, by each of our Directors and executive
officers and by all executive officers and Directors as a group.
As of November 23, 2007, we had no beneficial owner of more
than 5% of any class of our outstanding Common Stock.
|
Amount and |
||||||||
|
Nature of |
Percent of |
|||||||
|
Name of Beneficial Owner
|
Beneficial Ownership | Class(1) | ||||||
|
BENEFICIAL OWNERS OF MORE THAN 5% OF OUR COMMON STOCK
|
||||||||
|
None
|
— | — | ||||||
|
SECURITY OWNERSHIP OF MANAGEMENT
|
||||||||
|
L. Decker Dawson
|
108,192 | 1.40 | % | |||||
|
Christina W. Hagan
|
54,399 | (2)(3) | * | |||||
|
Stephen C. Jumper
|
54,308 | (2)(3) | * | |||||
|
C. Ray Tobias
|
32,275 | (2)(3) | * | |||||
|
Howell W. Pardue
|
17,250 | (2)(3) | * | |||||
|
K.S. Forsdick
|
9,250 | (2)(3) | * | |||||
|
Tim C. Thompson
|
6,500 | * | ||||||
|
Gary M. Hoover
|
3,000 | * | ||||||
|
Paul H. Brown
|
1,000 | * | ||||||
|
All directors and executive officers as a group (9 persons)
|
286,174 | 3.69 | % | |||||
| * | Indicates less than 1% of the outstanding shares of Common Stock. | |
| (1) | As of November 23, 2007, there were 7,714,744 shares of Common Stock issued and outstanding. Unless otherwise indicated, the beneficial owner has sole voting and investment power with respect to all shares listed. | |
| (2) | Includes shares attributable to Common Stock not outstanding but subject to currently exercisable options, as follows: Mr. Jumper — 17,500 shares; Ms. Hagan — 8,750 shares; Mr. Pardue — 5,000 shares; Mr. Tobias — 8,750 shares; Mr. Forsdick — 5,500 shares. There are no shares subject to options exercisable within 60 days of the record date. | |
| (3) | Includes shares attributable to restricted Common Stock, as follows: Mr. Jumper — 6,000 shares; Ms. Hagan — 4,500 shares; Mr. Pardue — 4,500 shares; Mr. Tobias — 4,500 shares; Mr. Forsdick — 3,000 shares. The restricted stock is subject to forfeiture and may not be sold or transferred during the three-year vesting period. Holders of shares of restricted stock have the right to vote. |
PUBLIC ACCOUNTING FIRM
The Board of Directors has selected KPMG LLP for appointment as
our independent registered public accounting firm for the fiscal
year ending September 30, 2008, subject to ratification by
the stockholders. KPMG LLP served as our independent registered
public accountants for the fiscal year ended September 30,
2007. Representatives of KPMG LLP are expected to be present at
the Annual Meeting of stockholders to respond to appropriate
questions and will have an opportunity to make a statement if
they desire to do so. Our Board of Directors recommends that
you vote FOR the appointment of KPMG LLP as our independent
registered public accountants for the fiscal year ending
September 30, 2008.
15
Table of Contents
Audit Fees. The aggregate fees billed for the
fiscal years 2006 and 2007 for professional services rendered by
the principal independent accountant, KPMG LLP, for the audit of
our annual financial statements, review of our quarterly reports
on
Form 10-Q
and audit of our internal controls over financial reporting,
were $661,879 and $418,591, respectively.
Audit-Related Fees. There were no
Audit-Related Fees billed by KPMG during fiscal years 2006 or
2007.
Tax Fees. The aggregate fees billed for the
fiscal year 2006 for professional services rendered by the
principal independent accountant, KPMG LLP, for tax compliance,
tax advice and tax planning were $8,865. KPMG LLP did not
provide professional services for tax compliance, tax advice or
tax planning in fiscal year 2007.
All Other Fees. There were no other fees
billed in each of the last two fiscal years for products or
services provided by the principal independent accountant, KPMG
LLP, other than those reported under the captions “Audit
Fees”, “Audit-Related Fees” and “Tax
Fees” above.
The Audit Committee’s policy on pre-approval of fees and
other compensation paid to the independent registered accounting
firm requires the Chairman of the Audit Committee to sign all
engagement letters of the principal independent accountant prior
to commencement of any services. All of the work performed in
auditing our financial statements for the last two fiscal years
by the principal independent accountants, KPMG LLP, has been
performed by their full-time, permanent employees.
To the Stockholders of Dawson Geophysical Company:
It is the responsibility of the members of the Audit Committee
to contribute to the reliability of the Company’s Financial
Statements. In keeping with this goal, the Board of Directors
adopted a written charter, which is posted on the Company’s
website at
http://www.dawson3d.com
in the “Corporate Governance” area of the
“Investor Relations” section. The Audit Committee is
satisfied with the adequacy of the charter based upon its
evaluation of the charter during fiscal 2007. The Audit
Committee met eight times during fiscal 2007. The members of the
Audit Committee are independent directors.
The Audit Committee oversees the Company’s financial
reporting process on behalf of the entire Board. Management has
the primary responsibility for the Company’s financial
statements and the reporting process, including the systems of
internal controls. The primary responsibilities of the Audit
Committee are to select and retain the Company’s auditors
(including review and approval of the terms of engagement and
fees), to review with the auditors the Company’s financial
reports (and other financial information) provided to the SEC
and the investing public, to prepare and publish this report and
to assist the Board with oversight of the following:
| • | integrity of the Company’s financial statements; | |
| • | compliance by the Company with standards of business ethics and legal and regulatory requirements; | |
| • | qualifications and independence of the Company’s independent auditors; and | |
| • | performance of the Company’s independent auditors. |
The Audit Committee has reviewed and discussed the
Company’s audited financial statements with management. It
has also discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards
No. 61, “Communication with Audit Committees, as
amended.” Additionally, the Audit Committee has received
the written disclosures and the letter from the independent
accountants at KPMG LLP, as required by Independence Standards
Board Standard No. 1, “Independence Discussions with
Audit Committees,” and has discussed with the independent
accountants that firm’s independence from the
16
Table of Contents
Company and its management. The Audit Committee has concluded
that non-audit services provided by KPMG LLP do not result in
conflict in maintaining that firm’s independence.
Audit fees billed to the Company by KPMG LLP during the
Company’s 2007 fiscal year for the audit of the
Company’s annual financial statements and the review of
those financial statements included in the Company’s
quarterly reports of
Form 10-Q
totaled approximately $418,591.
Based on reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the
financial statements for fiscal 2007 be included in the
Company’s Annual Report on
Form 10-K.
Audit Committee
Paul H. Brown
Gary M. Hoover
Tim C. Thompson
Gary M. Hoover
Tim C. Thompson
December 17, 2007
Section 16(a) of the Exchange Act requires our directors
and officers, and persons who own more than 10% of our
outstanding Common Stock, to file with the SEC initial reports
of ownership and reports of changes in ownership of Common Stock
held by such persons. These persons are also required to furnish
us with copies of all forms they file under this regulation.
To our knowledge, based solely on a review of the copies of such
reports furnished to us and without further inquiry, during the
fiscal year ended September 30, 2007, our directors,
officers and beneficial owners of more than 10% of Common Stock
complied with all applicable Section 16(a) filing
requirements, except in the following instances: (1) Stuart
A. Wright and James W. Thomas each filed a late Form 3;
(2) Ms. Hagan and A. Mark Nelson each filed a late
Form 4 reporting a cashless exercise of stock options;
(3) Mr. Tobias and Mr. Thomas each filed a late
Form 4 reporting a sale of shares; and
(4) Mr. Dawson filed a late Form 4 reporting two
sales of stock, which was later amended to correct the amount of
shares sold.
The next Annual Meeting of the Company’s stockholders is
scheduled to be held on January 27, 2009. Stockholders may
submit proposals appropriate for stockholder action at the next
Annual Meeting consistent with the regulations of the Securities
and Exchange Commission. If a stockholder desires to have such
proposal included in the proxy statement and form of proxy
distributed by the Board of Directors with respect to such
meeting, the proposal must be received at our principal
executive offices, 508 West Wall, Suite 800, Midland,
Texas 79701, Attention: Ms. Christina W. Hagan, Secretary,
no later than August 20, 2008.
In addition, our Bylaws establish advance notice procedures with
regard to certain matters, including shareholder proposals not
included in our proxy statement, to be brought before an Annual
Meeting. In general, our corporate secretary must receive notice
of any such proposal not less than 80 days prior to the
date of the Annual Meeting at the address of our principal
executive offices shown above. Such notice must include the
information specified in Article II, Section 14 of our
Bylaws.
The SEC permits a single set of annual reports and proxy
statements to be sent to any household at which two or more
stockholders reside if they appear to be members of the same
family. Each stockholder continues to receive a separate proxy
card. This procedure, referred to as householding, reduces the
volume of duplicate
17
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information stockholders receive and reduces mailing and
printing expenses. A number of brokerage firms have instituted
householding.
As a result, if you hold your shares through a broker and you
reside at an address at which two or more stockholders reside,
you will likely be receiving only one annual report and proxy
statement unless any stockholder at that address has given the
broker contrary instructions. However, if any such beneficial
stockholder residing at such an address wishes to receive a
separate annual report or proxy statement in the future, or if
any such beneficial stockholder that elected to continue to
receive separate annual reports or proxy statements wishes to
receive a single annual report or proxy statement in the future,
that stockholder should contact their broker or send a request
to our corporate secretary at our principal executive offices,
508 West Wall, Suite 800, Midland, Texas 79701,
telephone number
(432) 684-3000.
We will deliver, promptly upon written or oral request to the
corporate secretary, a separate copy of the 2007 Annual Report
and this proxy statement to a beneficial stockholder at a shared
address to which a single copy of the documents was delivered.
We know of no other business which will be presented at the
Annual Meeting other than as explained herein. Our Board of
Directors has approved a process for collecting, organizing and
delivering all stockholder communications to each of its
members. To contact all directors on the Board, all directors on
a Board committee or an individual member or members of the
Board of Directors, a stockholder may mail a written
communication to: Dawson Geophysical Company, Attention:
Secretary, 508 West Wall, Suite 800, Midland, Texas
79701. All communications received in the mail will be opened by
our Secretary, Christina W. Hagan, for the purpose of
determining whether the contents represent a message to the
Board of Directors. The contents of stockholder communications
to the Board of Directors will be promptly relayed to the
appropriate members. We encourage all members of the Board of
Directors to attend the Annual Meeting of stockholders. All
nominees for election to the Board of Directors in 2008 attended
the 2007 Annual Meeting.
You can learn more about the Company and our operations by
visiting our website at www.dawson3d.com. Among other
information we have provided there, you will find:
| • | The charters of each of our standing committees of the Board of Directors; | |
| • | Our code of business conduct and ethics; | |
| • | Information concerning our business and recent news releases and filings with the SEC; and | |
| • | Information concerning our board of directors and stockholder relations. |
For additional information about the Company, please refer to
our 2007 Annual Report, which is being mailed with this proxy
statement.
BY ORDER OF THE BOARD OF DIRECTORS
Christina W. Hagan, Secretary
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508 WEST WALL
SUITE 800
MIDLAND, TX 79701
VOTE BY INTERNET – www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS
If you would like to reduce the costs incurred by Dawson Geophysical Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years.
If you would like to reduce the costs incurred by Dawson Geophysical Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years.
VOTE BY PHONE – 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Dawson Geophysical Company, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Dawson Geophysical Company, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | DGCOM1 | KEEP THIS PORTION FOR YOUR RECORDS | ||
| DETACH AND RETURN THIS PORTION ONLY | ||||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
DAWSON GEOPHYSICAL COMPANY
THE DIRECTORS RECOMMEND A VOTE “FOR”
ITEMS 1 AND 2
ITEMS 1 AND 2
| Vote on Directors | ||||
| 1. | To elect as Directors of Dawson Geophysical Company the nominees listed below. | |||
| 01) Paul H. Brown | 04) Stephen C. Jumper | |||
| 02) L. Decker Dawson | 05) Tim C. Thompson | |||
| 03) Gary M. Hoover | ||||
For All |
Withhold All |
For All Except |
To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | |||
o
|
o | o | ||||
| Vote on Proposal | For | Against | Abstain | |||||
2. |
Proposal to ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2008 | o | o | o | ||||
| The undersigned acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement of the Company dated January 22, 2008. | ||||||||
| Please date and sign exactly as name appears on this proxy. Joint owners should each sign. If the signer is a corporation, please sign full corporate name by duly authorized officer. Executors, administrators, trustees, etc., should give full title as such. | ||||||||
| The shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned Stockholder(s). If no direction is made, this proxy will be voted FOR items 1 and 2. If any other matters properly come before the meeting the persons named in this proxy will vote in their discretion. | ||||||||
For address changes and/or comments, please check this box and write them on the back where indicated. |
o |
Signature [PLEASE SIGN WITHIN BOX] |
Date | Signature (Joint Owners) | Date |
Table of Contents
DAWSON GEOPHYSICAL COMPANY
508 West Wall, Suite 800
Midland, TX 79701
432-684-3000
508 West Wall, Suite 800
Midland, TX 79701
432-684-3000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
January 22, 2008
The stockholder(s) hereby appoint(s) L. Decker Dawson and Tim C. Thompson, or either of them, as
proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and
to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of
Dawson Geophysical Company that the stockholder(s) is/are entitled to vote at the Annual Meeting of
Stockholders to be held at 10:00 A.M., Central Time on January 22, 2008, at the Petroleum Club of
Midland, Midland, Texas, and any adjournment or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH
DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON THE
REVERSE SIDE FOR THE BOARD OF DIRECTORS AND FOR PROPOSAL 2.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE
Address Changes/Comments: |
||
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
CONTINUED AND TO BE SIGNED ON REVERSE SIDE