UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

Filed by the Registrant  x¨

Filed by a Party other than the Registrant  ¨

Check the appropriate box:

FLOTEK INDUSTRIES, INC.

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

FLOTEK INDUSTRIES, INC.

7030 Empire Central Drive2930 W. Sam Houston Pkwy N., Suite 300

Houston, Texas 7704077043

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 18, 200715, 2008

To the Stockholders of Flotek Industries, Inc.:

At the direction of the Board of Directors of Flotek Industries, Inc. (the “Company”), a Delaware corporation, NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of the Company will be held at the Houston Racquet Club, 10709 Memorial Drive, Houston, Texas 77024, on May 18, 200715, 2008 at 2:1:00 p.m. (local time), for the purpose of considering and voting upon the following matters:

1. The election of six directors to serve until the next annual meeting of stockholders of the Company or until their successors are duly elected and qualified, or until their earlier resignation or removal.

2. Approval of the 2007 Long Term Incentive Plan.

3. The ratification of the selection of UHY LLP as the Company’s auditors for the year ended December 31, 2007.2008.

4.3. Any other business which may be properly brought before the meeting or any adjournment thereof.

By order of the Board of Directors

Rosalie Melia

Corporate Secretary

April 20, 200722, 2008

YOUR VOTE IS IMPORTANT

TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND

RETURN YOUR PROXY AS PROMPTLY AS POSSIBLE. AN ENVELOPE, WHICH REQUIRES NO

POSTAGE IF MAILED IN THE UNITED STATES, IS ENCLOSED FOR THIS PURPOSE.

TABLE OF CONTENTS

FLOTEK INDUSTRIES, INC.

7030 Empire Central Drive2930 W. Sam Houston Pkwy N., Suite 300

Houston, Texas 7704077043

PROXY STATEMENT

This Proxy Statement and the accompanying form of proxy are being sent to the stockholders of Flotek Industries, Inc. (the “Company”), a Delaware corporation, in connection with the solicitation by the Board of Directors of the Company (the “Board”) of proxies to be voted at the Annual Meeting of Stockholders of the Company (the “Meeting”) to be held at 2:1:00 p.m. (local time) on Friday,Thursday, May 18, 2007,15, 2008, at the Houston Racquet Club, 10709 Memorial Drive, Houston, Texas 77024 and at any adjournments thereof.

The Notice of Meeting, this Proxy Statement and the accompanying form of proxy are first being mailed to the stockholders on or about April 20, 2007.22, 2008. The Annual Report of the Company for the year 20062007 has been furnished to stockholders with this Proxy Statement.

At the Meeting, stockholders will be asked (i) to consider and vote upon the election of six nominees to serve on the Board of Directors of the Company;Board; (ii) to consider and vote upon the adoption of the 2007 Long-Term Incentive Plan of the Company; (iii) to consider and vote upon the ratification of the selection of the Company’s auditors; and (iv)(iii) to consider and take action upon such other matters as may properly come before the Meeting.

VOTING SECURITIES

The Board has fixed the close of business on April 5, 2007,18, 2008, as the record date for determination of stockholders entitled to notice of, and to vote at, the Meeting. At the close of business on such date, there were outstanding and entitled to vote 9,079,65722,996,870 shares of common stock, $0.0001 par value per share (“Common Stock”) of the Company, which is the Company’s only authorized and outstanding class of stock entitled to vote at the Meeting.

Holders of at least one-third of the outstanding shares of Common Stock are required to be represented at the Meeting, in person or by proxy, to constitute a quorum. Each outstanding share of Common Stock as of the record date is entitled to one vote. There will be no cumulative voting of shares for any matter voted upon at the Meeting.

Directors are elected by a plurality of the votes cast. Abstentions and broker non-votes will be disregarded and have no effect on the outcome of the election of directors.

The affirmative vote of at least a majority of the shares represented at the Meeting is required to approve the 2007 Long-Term Incentive Plan and to ratify the selection of the auditors of the Company. In determining whether these proposals havethis proposal has received the requisite number of affirmative votes, abstentions and broker non-votes will have the same effect as votes against the proposals.proposal.

If the enclosed form of proxy is properly executed and returned to the Company prior to or at the Meeting and is not revoked prior to its exercise, all shares of Common Stock represented thereby will be voted at the Meeting and, where instructions have been given by a stockholder, will be voted in accordance with such instructions.

Any stockholder executing a proxy which is solicited hereby has the power to revoke it prior to its exercise. Revocation may be made by attending the Meeting and voting the shares of Common Stock in person or by delivering to the Secretary of the Company at the principal executive offices of the Company located at 7030 Empire Central Drive,2930 W. Sam Houston Parkway N., Suite 300, Houston, Texas 77040,77043, prior to exercise of the Proxy, a written notice of revocation or a later-dated, properly executed proxy.

The solicitation of proxies will be by mail, but proxies also may be solicited by telephone, telegram or in person by directors, officers and other employees of the Company. The Company will bear all costs of soliciting proxies. Should the Company, in order to solicit proxies, request the assistance of financial institutions, brokerage houses or other custodians, nominees or fiduciaries, the Company will reimburse such persons for their reasonable expenses in forwarding proxy materials to stockholders and obtaining their proxies.

The following table lists all persons who are not officers or directors and who beneficially own more than 5% of our outstanding voting securities, to the knowledge of our management, as of the record date.April 1, 2008:

PROPOSAL 1: ELECTION OF DIRECTORS

Board of Directors.The members of the Board serve one-year terms. Directors are elected by a plurality of the votes cast. Abstentions and broker non-votes will be disregarded and have no effect on the outcome of the election of directors.

Recommendation; Proxies. The Board of Directors recommends a vote “FOR” each of the nominees named below. The persons named in the enclosed proxy card will vote all shares over which they have discretionary authority “FOR” the election of the nominees named below. Although our Board of Directors does not anticipate that any of the nominees will be unable to serve, if such a situation should arise prior to the meeting, the appointed persons will use their discretionary authority pursuant to the proxy and vote in accordance with their best judgment.

Nominees. The following table sets forth information for each nominee. Each nominee has consented to be named in this proxy statement and to serve as a director, if elected.

Name		Principal Occupation		Age		Director Since
Richard O. Wilson		Mr. Wilson was Group Vice President and Deputy General Manager of Brown & Root World Offshore Operations and served as a Director of Brown & Root from 1973 to 1979. Mr. Wilson also served as Chairman of Dolphin Drilling A/S (oil and gas drilling company); and of AOC International and OGC International PLC (manufacturers of video displays) from 1983 to 1997. Mr. Wilson is currently serving as director for Callon Petroleum Inc. (oil and gas exploration and production company) and is an offshore construction consultant with 50 years of experience. He received a Bachelor of Science degree in Civil Engineering from Rice University. Mr. Wilson currently is a Director of the Houston Museum of Printing History. Mr. Wilson serves as a member of the Audit Committee and the Governance and Nominating Committee.		77		2003

Beneficial Ownership of Directors and Executive Officers. The following table sets forth the beneficial ownership of Common Stock as of April 5, 20071, 2008 by each current director (including each nominee), each executive officer named in the Summary Compensation Table and all current directors and executive officers as a group.

BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

Meetings. During 2006,2007, the Board of Directors held 10nine meetings of the full Board and 2019 meetings of committees (six of which were consents).committees. The Nominating and Governance Committee held two meetings, the Executive Compensation Committee held six meetings and the Audit Committee held five11 meetings during 2006.2007. Each director attended at least 75% of the aggregate number of meetings of the Board of Directors and committees of the Board on which he served. It is the policy of the Board of Directors that directors are encouraged to attend each meeting of stockholders, and all of the directors attended the last Annual Meeting of Stockholders.

Compensation. Through September 30, 2006,December 31, 2007, the Company paid non-employee directors on a quarterlymonthly basis an annual retainer of $5,000, an annual retainer of $5,000 to the Audit Committee Chairman, and annual retainer of $5,000 to the Executive Compensation Committee Chairman, an attendance fee of $1,000 for each Board meeting attended, and an attendance fee of $250 for each committee meeting attended.

Effective October 1, 2006, the Company increased the amounts paid to non-employee directors to an annual retainer of $30,000, an annual retainer of $10,000 to the Audit Committee Chairman, an annual retainer of $7,500$9,500 to the Executive Compensation Committee Chairman, an annual retainer of $5,000 to the GovernanceNominating and NominatingGovernance Committee Chairman, an attendance fee of $1,000 for each Board meeting attended, and an attendance fee of $500 for each committee meeting attended.

Directors who are employees of the Company are not paid directors’director fees. The Company reimburses the directors’ out-of-pocket expenses. In addition, under the terms of the 2003, 2005 and 2007 Long Term Incentive Plan and the 2005 Long Term Incentive Plan,Plans, non-employee directors are eligible to receive awards of restricted stock and options to purchase shares of Common Stock. NoIn 2007 awards of restricted stock and stock options were made to non-employee directors for 2006.directors.

Non-Management Sessions; Communications.For 2006,2007 the non-management directors met in two executive sessions without management present. Mr. Ziegler chairs the Executive sessions, and in his absence Mr. Pittman will preside. In the absence of Mr. Ziegler and Mr. Pittman, a majority vote of those directors present will determine who will preside over the meeting.

Independence. The Board has determined that each of the directors except for Mr. Dumas is independent as that term is defined by rules of the AmericanNew York Stock Exchange and, in the case of the Audit Committee, the Securities and Exchange Commission. Mr. Dumas is not an independent director because he is an officer and employee of the Company.

The following table shows the committees on which each director serves:

Audit Committee. The responsibilities of the Audit Committee, composed of Messrs. Stewart (Chairman), Pittman and Wilson, include:

To promote the independence of the audit, the Audit Committee consults separately and jointly with the independent auditors, the internal auditors and management. The Board of Directors has determined that two of the Audit Committee members, Messrs. Stewart and Pittman, are audit committee financial experts. The Board of Directors has adopted a charter for the Audit Committee, a copy of which is available on our website (www.flotekind.com).

Executive Compensation Committee. The responsibilities of the Executive Compensation Committee, composed of Messrs. Pittman (Chairman), Chisholm and Ziegler, include:

The Board of Directors has adopted a charter for the Executive Compensation Committee, a copy of which is available on our website (www.flotekind.com).

Nominating and Governance Committee. The responsibilities of the Nominating and Governance Committee, composed of Messrs. Ziegler (Chairman), Stewart and Wilson, include:

Director nominees may be identified by the Nominating and Governance Committee through current board members, officers, stockholders or other persons. Any stockholder desiring to submit a nomination to the Board of Directors should send the recommendation in writing, together with appropriate background and contact information, to the Secretary of the Company at the address of the Company’s principal executive offices set forth previously. The Board of Directors has not established formal minimum qualifications for a director nominee and evaluates any nominee on a case-by-case basis. The Board of Directors has adopted a charter for the Nominating and Governance Committee, a copy of which is available on our website (www.flotekind.com).

Code of Conduct. The Code of Conduct applies to our directors, executive officers and to all other employees and is available on our website (www.flotekind.com).

Compliance with Section 16(a) of the Securities Exchange Act. Pursuant to Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules issued thereunder, the Company’s directors and executive officers are required to file with the SEC reports of ownership and changes in ownership of Common Stock. Copies of

such forms are required to be filed with the Company. Based solely on its review of copies of such reports furnished to the Company, the Company believes that the directors and executive officers were in compliance with the filing requirements of Section 16(a) during the most recent fiscal year, except that Mr. Chisholm did not timely file three Form 4’s reporting four separate transactions, Mr. Pittman did not timely file three Form 4’s reporting three separate transactions, and Ms. MeierDumas did not timely file one Form 4 reporting a singleone transaction and Mr. Pittman did not timely file one Form 4 reporting one transaction.

EXECUTIVE OFFICERS

The following table provides certain information with respect to the executive officers of the Company.

Biographical information on Mr. Dumas is presented above under Election of Directors - Nominees.

Lisa G. Meier — Mrs. Meier was appointed Chief Financial Officer of the CompanyFlotek in April 2004, and Vice President in January 2005.2005 and Senior Vice President in July 2007. Prior to joining Flotek, Mrs. Meier worked in the energy audit practice of PricewaterhouseCoopers, LLP and worked for three Fortune 500 companies. Mrs. Meier served in various accounting, finance, SEC reporting and risk management positions. Mrs. Meier serves on the board of directors of Northern Oil and Gas, Inc., an American Stock Exchange company specializing in oil and gas exploration and production. She serves as chairman of the audit committee and compensation committee. Mrs. Meier is a Certified Public Accountant and a Chartered Financial Analyst candidate.Accountant. Mrs. Meier is a member of the American Institute of Certified Public Accountants and Financial Executives International. Mrs. Meier holds Bachelor of Business Administration and Masters of Accountancy degrees from the University of Texas.

Glenn S. Penny — Dr. Penny became President, Chief Technical Officer and a Director of the Company with the merger of Flotek and CESI in 2001. Dr. Penny founded CESI in April 2000 and served as its President and Chief Executive Officer. Prior to founding CESI, Dr. Penny served as President of Stim-Lab, Inc., a company specializing in independent testing of completion fluids and methods, from its founding in 1985 to April 2000. Stim-Lab, Inc. was acquired by Core Laboratories N.V., an NYSE-listed oilfield service company, in 1997. Dr. Penny holds a Bachelor of Science degree in Chemistry from Trinity University and a Ph.D. degree in Chemistry from the University of Houston. Dr. Penny resigned his position as President, Chief Technical Officer and Director in December 2006.

AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors consists of three directors who are independent, as defined by the standards of the AmericanNew York Stock Exchange and the rules of the Securities and Exchange Commission. Under the charter approved by the Board, the Committee assists the Board in overseeing matters relating to the accounting and financial reporting practices of the Company, the adequacy of its internal controls and the quality and integrity of its financial statements and is responsible for selecting and retaining the independent auditors. The Company’s management is responsible for preparing the financial statements of the Company, and the independent auditors are responsible for auditing those financial statements. The Audit Committee’s role under the charter is to provide oversight of management’s responsibility. The Committee is not providing any expert or special assurance as to the Company’s financial statements or any professional certification as to the independent auditors’ work. The Committee met five11 times during the year ended December 31, 2006.2007.

The independent auditors provided the Committee a written statement describing all the relationships between the auditors and the Company that might bear on the auditors’ independence consistent with Independence Standards Board Standard No. 1, “Independence Discussions with Audit Committees.” The Committee also discussed with the auditors any relationships that may impact the independence of the auditors.

The Committee discussed and reviewed with the independent auditors all communications required to be discussed by standards of the Public Company Accounting Oversight Board, including those described in Statement of Auditing Standards No. 61, as amended, “Communication with Audit Committees.”

The Committee reviewed the Company’s audited financial statements as of and for the year ended December 31, 2006,2007, and discussed them with management and the independent auditors. Based on such review and discussions, the Committee recommended to the Board that the Company’s audited financial statements be included in its Annual Report on Form 10-K for the year ended December 31, 2006,2007, for filing with the Securities and Exchange Commission.

This report of the Audit Committee shall not be deemed “soliciting material,” or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Securities Exchange Act, of 1934 (the “Exchange Act”), except to the extent that we specifically request that the information be treated as soliciting material or specifically incorporate it by reference into a document filed under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act. Further, this report will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act except to the extent that we specifically incorporate this information by reference.

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis provides an explanation of Flotek’s cash and equity compensation philosophy, and of the policies and practices with respect to our chief executive, financial and technical officers, who are collectively referred to as the named executive officers.

Our compensation philosophy is based on pay-for-performance and contains two primary components – a Performance Pay Plan (PPP)(“PPP”) that provides annual cash bonuses and an Equity Incentive Plan (EIP).(“EIP”), some of the grants from EIP have been for retention purposes. PPP provides cash

payments annually to executives when certain Company, business segment and for the CEO certainand CFO, individual goals or objectives determined by the Board or Committee are achieved. The EIP through 2006, has primarily taken the form of stock options and in one instance restricted stock.

Our executive compensation programs are designed to achieve the following objectives:

Executive Officer Compensation

Principal Components of Compensation of Our Named Executive Officers

Historically, the compensation package offered to our executive officers consisted of:

Historically, Mr. Dumas, our President and Chief Executive Officer, and Mrs. Meier, our Chief Financial Officer and Senior Vice President, have participated in deliberations with the Executive Compensation Committee of the Board of Directors of the Company, which was comprised of all the outside Directors for most of 2007 (the “Committee”), and sometimes the Board of Directors concerning senior executive officer compensation and other employees covered under the Company’s PPP and EIP. NeitherIn July 2007, the Committee nor the management retained a compensation consultant in 2006. Theto review the existing compensation packages for Mr. Dumas and Mrs. Meier and recommend a retention package for each of them. In addition, the Committee did reviewreviewed the proxy statements of multiple public oil field service companies for comparison.

Allocation of Compensation Among the Principal Components

The Committee reviews compensation structures at industry comparables, historical compensation for the participant, participant’s responsibilities, participant’s performance on both financial metrics and individual goals and objectives provided by the Committee, and the individual circumstances of its senior executives when determining the mix of base salary, cash bonus percentages, and annual or retention equity awards to be paid or awarded to our senior executive officers. Our historical practice has been to award a greater percentage of the compensation on the basis of operational performance.

Base Salary

Chief Executive Officer

Mr. Dumas has been our Chairman and CEO since 1998. Due to increasing operational responsibilities stemming from multiple acquisitions, increasedincreasing shareholder relations obligations, the growth in market capitalization, and a more competitive employment environment, the Committee increased Mr. Dumas’ annual

salary in June 2006February 2007 to $360,000 from $335,000 from $250,000.and in July 2007 to $450,000. Historically, Mr. Dumas has expressed no need for an employment contract and did not have an employment agreement in 2006. Given the increasing visibility of Flotek and increasing public float,2007. The Company does not currently have an employment contract may be consideredagreement with Mr. Dumas, but Mr. Dumas was granted an equity based retention grant in the future.July 2007 that promotes retention over a five year period.

Chief Financial Officer

Mrs. Meier has been our CFO since April 2004 and Senior Vice President since January 2005.July 2007. Due to increasing operational responsibilities stemming from multiple acquisitions, increased shareholder relations obligations, a more competitive employment environment, increased compliance responsibilities under the Sarbanes Oxley Act, and to bring Mrs. Meier in line with her peers, the Committee increased Mrs. Meier’s salary from $125,000$200,000 to $135,000$210,000 in January 2006February 2007 and then raised it twice ending at $200,000to $250,000 in June 2006. In 2006, Mrs. Meier requestedJuly 2007. The Company does not have an employment agreement and the Committee has agreed to enter into one with her. No such agreementMrs. Meier, but Mrs. Meier was putgranted an equity based retention grant in place in 2006.

Chief Technology Officer

Dr. Penny’s salary was raised from $145,000 to $159,000 in January 2006 and then to $220,000 in June 2006 to reflect his contributions to Flotek through his efforts in broadening the applications for the micro-emulsion series of products. During most of 2006, Dr. Penny oversaw Research and Development for the Chemical division. Dr. Penny resigned as director, President and Chief Technical Officer in December 2006 and is currently the Director of Technical Communication for the Company. Dr. Penny is not covered by an employment contract.July 2007 that promotes retention over a five year period.

Annual Bonus Compensation – Flotek’s Performance Pay PlanPPP

In the fourth quarter, the Company produces a budget for the upcoming year which forms the basis for the computation of the annual cash bonuses. The budget is vetted by the Board and formally approved after any requested changes are reflected, including acquisitions made throughout the year. This budget provides the financial targets used in the PPP. For 2006,2007, the primary financial metric was Fully Burdened OperatingPre-tax Income (FBOI) as it eliminates the impact of the financing structure employed, the difficulty in forecasting interest rates, and eliminates the impact the estimation of taxes could impose on bonuses. The FBOIPre-tax Income in the budget approved by the Board is used as the target FBOIPre-tax Income on which target bonuses are computed.

A target bonus (TB)(“TB”) percentage is established for each employee eligible to participate in the PPP. The TB percentage varies depending on the employee’s position and responsibilities. The bonus calculation is based on the individual’s average year to date base salary. In addition to the TB, there is a threshold bonus percentage to lessen the penalty of slightly missing athe Pre-tax Income target. Challenge bonus percentage provides an incentive to outperform the budget and lessens the incentive to delay performance to the following year.

Threshold % = 80%90% of Target FBOIPre-tax Income

Target % = Target FBOI,Pre-tax Income, the budget approved by the Board and modified during the year for acquisitions

Challenge % = 140% of Target FBOIPre-tax Income

Subject to some modifications, eligible participants at the division level have 75% of their bonus based on divisiondivisional performance objectives and 25% based on Flotek’s corporate consolidated results. In order to receive payment for the portion of the bonus tied to corporate results, the division performance target objectives first must be met. Eligible

participants at the corporate level receive bonuses based on corporate and each division’sdivisional financial performance. This approach incentivizes management to continue to focus on all business units. The TB levels for the executives in 20062007 were as follows:increased to the following remaining in line with the pay for performance philosophy:

JerryMr. Dumas – 80%110%

LisaMrs. Meier – 50%

Glenn Penny – 50%60%

Flotek has not historically paid any signing or retention bonuses to our executive officers. However, we have in the past paid merit bonuses when the Committee or the Board felt an accomplishment or workload merited such a bonus. No merit bonuses were paid in 2006.2007.

Equity Compensation – Flotek’s Equity Incentive PlanEIP

The historical practice of the Committee has been to grant restricted stock and/or options to attract, retain, motivate and reward employees and executive officers, and to encourage ownership in Flotek. Through 2006,2007, such grants have consisted of incentive stock options, non-qualified stock options and in one instance, restricted stock. Generally, the Committee has granted awards of stock options to our executive officers upon their appointment as executive officers or at the end of a fiscal year, or shortly thereafter for the upcoming fiscal year, or in conjunction with an event that impactedand the value of the Company. Optionsequity grants typically have vested over three or four years. The EIP for 2007 had both a restricted stock and an option component, split almost equally by fair market value. The restricted stock portion of the 2007 EIP grant vests evenly over four years and has a performance condition that required the Company to reach 90% of Pre-Tax Income for the option to vest in that year in addition to the service condition. The option portion of the 2007 EIP grant also vests evenly over four years and only has a service condition.

The Company did not award any options2007 EIP grant to Mr. Dumas made in 2006 as it awardedMarch 2007 was for 22,222 shares of restricted stock and options to its executivespurchase 54,348 shares at $13.81 per share of Common Stock. The 2007 EIP grant to Mrs. Meier made in December 2005. TheseMarch 2007 was for 11,038 shares of restricted stock and options were fully vested upon award withto purchase 26,998 shares of Common Stock at $13.81 per share. All share amounts have been adjusted to reflect the stock split in July 2007. The grants to Mr. Dumas and Mrs. Meier vest immediately if there is a change of control; this condition only applies to one other employee of the Company.

On March 28, 2008 an exercise price setEIP grant was made to Mr. Dumas for 10,556 shares of restricted stock and options to purchase 27,776 shares of Common Stock at market on$22.75 per share and an EIP grant was made to Mrs. Meier for 6,236 shares of restricted stock and options to purchase 16,404 shares of Common Stock at $22.75 per share. The grants to Mr. Dumas and Mrs. Meier vest immediately if there is a change of control; this condition only applies to one other employee of the date of grant. The Company also accelerated the vesting of all options not fully vested prior to December 31, 2006. This acceleration was coupled with the imposition of certain selling restrictions if the options were exercised prior to their originally scheduled vesting date.Company.

All equity-based awards the Committee awarded have been reflected in our consolidated financial statements based upon the applicable accounting guidance. In December 2004, the Financial Accounting Standards Board (“FASB”) published FASB Statement No. 123 (revised 2004),Share-Based Payment (“FAS 123(R)”123R” or the “Statement”). FAS 123(R)123R requires us to recognize in our financial statements the compensation cost relating to share-based payment transactions, including grants of employee stock options. We have to measure the cost based on the fair value of the equity or liability instruments issued. FAS 123(R),123R, which replaces FASB Statement No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25,Accounting for Stock Issued to Employees, and its related interpretive guidance, covers a wide range of share-based compensation arrangements including stock options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. To date, we have only awarded stock options and restricted stock awards under our stock awards plan. Additionally, FAS 123(R)123R requires us to measure the cost of employee services received in exchange for stock options based on the fair value of the award on the grant date, and to recognize the cost over the period the employee is required to provide services for the award. FAS 123(R)123R permits us to use any option-pricing model that meets the fair value objective in the Statement. We adopted FAS 123(R)123R on a prospective basis beginning January 1, 2006, for stock-based compensation awards granted after that date and for unvested awards outstanding at that date using the modified prospective transition method. We recognize the fair value of stock-based compensation awards as compensation expenses in our statement of operations on a straight line basis over the vesting period. As no awards were made in 2006 and all options were fully vested prior to January 1, 2006, no stock based compensation expense was recognized by Flotek in 2006.

Severance and Change of Control Payments

In 2006,2007 the Company did not paymake any severance benefits to our employees nor anyor change of control payments. The Company does not currently have any change of control provisions in any of its existing equity

grants. Given the Company’s growing public profile, the need for change of control provisions in equity grants is changing.payments to our employees. We currently are not making any severance payments to any of our former executive officers.

Equity Retention Grants

Given the shareholder value created by the management team and the desire to retain that team, the Committee decided to investigate equity based retention packages for Mr. Dumas and Mrs. Meier. The purpose of the equity grant was to incentivize management to remain with Flotek and continue to create shareholder value in the future.

To provide the time necessary to interview compensation consultants and keep management focused on operations, the Committee approved a stop gap retention grant to Mr. Dumas and Mrs. Meier in May 2007. This grant consisted of 13,200 and 4,400 shares of restricted stock and options to purchase 66,600 and 22,200 shares of Common Stock, to Mr. Dumas and Mrs. Meier, respectively. Both the restricted stock and the options vest over a one year period.

The Compensation Committee retained a compensation consulting firm to provide assistance in determining appropriate levels of compensation that reward future performance and recognize past services of these two executives and are at the same time reasonable and balanced to protect the interests of shareholders. The study conducted by the compensation consulting firm included 14 peer companies and Flotek’s historical performance in arriving at its conclusions. The Committee reviewed a suite of recommendations by the compensation consultant and the practices of peers which included a mixture of signing bonuses, employment agreements with evergreen features, severance protection, and restricted stock grants. The Committee chose to make a restricted stock grant that vested evenly over the next five years to address the issue of retention. In July 2007, the Committee awarded 180,000 and 60,000 shares of restricted stock to Mr. Dumas and Mrs. Meier, respectively.

Other Benefits

We believe that establishing competitive benefit packages for our employees is an important factor in attracting and retaining highly qualified personnel. Executive officers are eligible to participate in all of our employee benefit plans, including Company-paid medical, and accidental death and dismemberment insurance and our 401(k) plan, on the same basis as other employees. Additionally, we currently provide a matching contribution up to 0.75% on a 3.0% employee contribution under our 401(k) plan. We do not offer pension or retirement benefits. Our international employees may have slightly different employee benefit plans than those we offer domestically, typically based on certain legal requirements in that specific country.

Perquisites

We do not have a formal process for our Board to review regularly the perquisites received by members of senior management. The perquisites received by each senior executive are determined by past practices. The specific perquisites our named executives are currently receiving or have received in the past include:

Board Process

On at least an annual basis, the Executive Compensation Committee or our full Board approves all compensation and awards to our CEO, CFO, and the managers of our business segments.segments and the Board. With respect to equity compensation awarded to other employees, the Executive Compensation Committee grants awards generally based on the recommendation of the CEO and CFO.

Committee Report

The Executive Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis and, based on such review and discussion, has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Summary Compensation Table

The following table sets forth information regarding compensation earned in or with respect to our fiscal years 2006, 20052007 and 20042006 by:

Name and Principal Position		Year		Salary ($)		Bonus ($)		Option Awards ($)(1)		All Other Compensation ($)(2)		Total ($)
Jerry D. Dumas, Sr. – Chairman of the Board, President and Chief Executive Officer		2006		288,631		120,000		–		31,595		440,226
Lisa G. Meier – Vice President and Chief Financial Officer		2006		167,278		58,000		–		–		225,278
Glenn Penny – Chief Technology Officer		2006		191,308		35,816		–		10,951		238,075

Name and Principal Position(*)		Year		Salary ($)		Bonus ($)		Restricted Stock Awards ($)(1)		Stock Options ($)(2)		All Other Compensation ($)(3)		Total ($)
Jerry D. Dumas, Sr. – Chairman of the Board, President and Chief Executive Officer		2007		395,192		230,704		636,250		434,973		58,917		1,756,036
		2006		288,631		120,000		–		–		31,595		440,226
Lisa G. Meier – Sr. Vice President and Chief Financial Officer		2007		222,200		79,194		221,680		154,353		6,153		683,580
		2006		167,278		58,000		–		–		–		225,278

 

(*)	The Company does not have any executive officers other than the Chief Executive Officer and the Chief Financial Officer.

(1)

NoRepresents the amounts recognized for financial reporting purposes in accordance with FAS 123R for the year ended December 31, 2007, related to restricted stock option awards weremade pursuant to our 2005 Long Term Incentive Plan. These amounts include awards granted in 2006.during fiscal 2007 and reflect the proportionate amount of compensation for fiscal 2007 based on the vesting terms of the awards and the fair value of the awards on the date of grant. The restricted stock awards are expensed over a vesting period for each respective grant. The grant date fair value of the restricted stock awards granted to Mr. Dumas and Ms. Meier on March 13, May 17, and July 24, 2007, as determined pursuant to FAS 123R, was $13.81, $22.37 and $29.80 per share, respectively. See our Annual Report on Form 10-K for the fiscal year ended December 31, 2007 for a description of the FAS 123R valuation.

(2)

Represents the amounts recognized for financial reporting purposes in accordance with FAS 123R for the year ended December 31, 2007, related to stock options granted pursuant to our 2005 Long Term Incentive Plan. These amounts include stock options granted during fiscal 2007 and reflect the proportionate amount of compensation for fiscal 2007 based on the vesting terms of the awards and the fair value of the awards on the date of grant. The grant date fair value of the stock option awards granted to Mr. Dumas and Ms. Meier on March 13 and May 17, 2007, as determined pursuant to FAS 123R, was $6.01 and $7.79 per share, respectively. See our Annual Report on Form 10-K for the fiscal year ended December 31, 2007 for a description of the FAS 123R valuation.

(3)

The amount disclosed in this column for Mr. Dumas2007 relates to expenses of $6,782$22,608 for a Company provided vehicle, $15,000$16,088 for the thirdfourth annual payment of five for a golf club membership and $9,813$20,221 for a year of dues and fees to the golf club.club for Mr. Dumas. The entire amount disclosed in this column for Dr. PennyMs. Meier relates to expenses of a Company provided vehicle.

Equity-Related Compensation

There were no stock option orThe following table discloses the number of restricted stock awards and stock options granted byduring the fiscal year ended December 31, 2007, to each Named Executive Compensation CommitteeOfficer, including the grant date fair value of our Board to our named executive officers in 2006.these awards.

Grants of Plan Based Awards

Name

Grant Date

Estimated future payouts under equity incentive plan awards(1)

All other stock awards: Number of shares of stock or units (#)(2)

All other option awards: Number of securities underlying options (#)(3)

Exercise or base price of option awards ($/Sh)

Grant date fair value of stock and option awards ($)(4)

Threshold (#)

Target (#)

Maximum (#)

Jerry D. Dumas, Sr.

3/13/07

–

–

–

–

54,348

13.81

305,250

3/13/07

–

–

22,222

–

–

–

291,436

5/17/07

–

–

–

–

66,600

22.37

513,397

5/17/07

–

–

–

13,200

–

–

280,520

7/24/07

–

–

–

180,000

–

–

5,095,800

Lisa G. Meier

3/13/07

–

–

–

–

26,998

13.81

151,632

3/13/07

–

–

11,038

–

–

–

144,761

5/17/07

–

–

–

–

22,200

22.37

163,661

5/17/07

–

–

–

4,400

–

–

93,507

7/24/07

–

–

–

60,000

–

–

1,698,600

(1)

The target column represents the number of performance shares granted to the named executive officers under the 2005 Long-Term Incentive Plan on March 13, 2007. One-fourth of the shares will vest on each anniversary of the grant date if the Company has met the performance measure of 90% of planned fully burdened operating income for the previous year end.

(2)

This column reports the number of shares of restricted stock granted under the 2005 Long-Term Incentive Plan to each of the named executive officers on May 17, 2007 and July 24, 2007. The May 17, 2007 restricted stock grants will vest 100% on May 17, 2008, assuming the named executive officer is still actively employed by the Company on that date. The July 24, 2007 restricted stock grants vest 1/5 on each anniversary of the grant date over a five-year period, assuming the named executive officer is still actively employed by the Company on each vesting date.

(3)

This column reports the number of shares purchasable upon exercise of stock options granted under the 2005 Long-Term Incentive Plan to each of the named executive officers on March 13, 2007 and May 17, 2007. The March 13, 2007 stock options vest 1/4 on each anniversary of the grant date over a four-year period, assuming the named executive officer is still actively employed by the Company on each vesting date. The May 17, 2007 stock option grants will vest 100% on May 17, 2008, assuming the named executive officer is still actively employed by the Company on that date.

(4)	This column reports the grant date fair value of each equity award granted in 2007 computed in accordance with FAS 123R.

The following table provides information relating to outstanding equity-based awards held by Named Executive Officers as of December 31, 2006,2007.

Outstanding Equity Awards at Fiscal Year-End

Name

Option awards

Stock awards

Number of securities underlying unexercised options exercisable (#)(1)

Number of securities underlying unexercised options unexercisable (#)

Equity Incentive plan awards: number of securities underlying unexercised unearned options (#)

Option exercise price ($)

Option expiration date

Number of shares or units of stock that have not vested (#)(2)

Market value of shares or units of stock that have not vested ($)(3)

Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)(4)

Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(5)

Jerry D. Dumas, Sr.

216,000

(6)

–

–

0.30

5/21/13

–

–

–

–

171,690

(7)

–

–

0.85

9/20/14

–

–

–

–

66,940

(8)

–

–

2.13

12/9/14

–

–

–

–

–

54,348

(9)

–

13.81

3/12/13

–

–

–

–

–

66,600

(10)

–

22.37

5/17/13

–

–

–

–

–

–

–

–

–

–

–

22,222

800,881

–

–

–

–

–

13,200

475,728

–

–

–

–

–

–

–

180,000

6,487,200

–

–

Lisa G. Meier

25,000

(8)

–

–

2.13

12/9/14

–

–

–

–

15,000

(11)

–

–

9.40

12/21/15

–

–

–

–

–

26,998

(9)

–

13.81

3/12/13

–

–

–

–

–

22,200

(10)

–

22.37

5/17/13

–

–

–

–

–

–

–

–

–

–

–

11,038

397,810

–

–

–

–

–

4,400

158,576

–

–

–

–

–

–

–

60,000

2,162,400

–

–

(1)	On December 22, 2005, the Compensation Committee, on behalf of the Board, approved the acceleration of the vesting of all previously unvested stock options granted under the 2003 and 2005 Long Term Incentive Plans.

(2)

The numbers in this column reflect the total number of unvested shares of restricted stock granted on May 17, 2007 and July 24, 2007. The May 17, 2007 grants of 13,200 and 4,400, for Mr. Dumas and Mrs. Meier, respectively, vest 100% on the first anniversary of the date of the grant. The July 24, 2007 grants of 180,000 and 60,000, for Mr. Dumas and Mrs. Meier, respectively, vest 1/5 on each anniversary date of the grant.

(3)	The dollar value of the unvested shares of restricted stock reported in the preceding column valued at the closing price of Flotek’s Common Stock on December 31, 2007 ($36.04 per share).

(4)	The numbers in this column reflect the total number of unvested performance shares, at target level of performance, granted on March 13, 2007. The payout, if any, will occur 1/4 on each anniversary of the date of the grant.

(5)	The dollar value of the unvested performance shares of restricted stock reported in the preceding column valued at the closing price of Flotek’s Common Stock on December 31, 2007 ($36.04 per share).

(6)	These stock options vested in three installments: 45% vested immediately upon the May 22, 2003 grant date; 27.5% vested on December 31, 2004; and 27.5% vested on December 22, 2005 (See (1)).

(7)	These stock options vested in four equal annual installments beginning on September 20, 2005. The remaining three installments vested on December 22, 2005 (See (1)).

(8)	These stock options vested in four equal annual installments beginning on December 10, 2005. The remaining three installments vested on December 22, 2005 (See (1)).

(9)	These stock options vest in four equal annual installments beginning on March 13, 2008.

(10)	These stock options will vest 100% on May 17, 2008.

(11)	These stock options were granted and vested immediately on December 22, 2005.

The following table sets forth certain information regarding vested and unvestedthe value realized upon the exercise of stock options and upon the vesting of restricted stock awards held by each of our named executive officers.the Named Executive Officers during the fiscal year ended December 31, 2007.

Option Exercises and Stock Vested

 

		Option Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date
Jerry D. Dumas, Sr.		125,000		–		0.60		5/21/2013
		125,000		–		1.70		9/20/2014
		62,500		–		4.25		12/9/2014
		30,000		–		18.80		12/21/2015
Lisa G. Meier		5,000		–		0.85		3/31/2014
		15,000		–		4.25		12/9/2014
		7,500		–		18.80		12/21/2015
Glenn Penny		22,000		–		4.68		12/9/2014
		10,000		–		18.80		12/21/2015

Director Compensation

The following table details the compensation (fees earned or paid in cash) in 2006 of the non-employee directors. The directors did not receive stock awards or any other form of compensation in 2006.

		Board Retainer ($)		Committee Chair Retainer ($)		Meeting Fees ($)		Total ($)
John W. Chisholm		11,250		–		12,250		23,500
Gary M. Pittman		11,250		5,625		13,750		30,625
Barry E. Stewart		11,250		6,250		8,250		25,750
Richard O. Wilson		11,250		–		11,500		22,750
William R. Ziegler		11,250		2,500		12,250		26,000

None of our named executive officers are covered by a pension plan or other similar benefit plan that provides for payments or other benefits at, following, or in connection with retirement.

None of our named executive officers are covered by a defined contribution or other plan that provides for the deferral of compensation on a basis that is not tax-qualified.

Name		Option awards				Stock awards
		Number of shares acquired on exercise (#)		Value realized on exercise ($)		Number of shares acquired on vesting (#)		Value realized on vesting ($)
Jerry D. Dumas, Sr.		230,370		4,970,757		–		–
Lisa G. Meier		15,000		503,475		–		–

We are not a party to any employment agreements with the named executive officers as of December 31, 2006. 2007. None of our named executive officers are covered by a defined contribution or other plan that provides for deferral of compensation on a basis that is not tax qualified.

We have not entered into agreements with our named executive officers that require us to make payments upon termination or a change of control of the Company.Company, although certain stock options and restricted stock grants provide for accelerated vesting in such circumstances. The following table describes the circumstances that will trigger acceleration of vesting of certain stock options and restricted stock grants and quantifies the value of the stock options or restricted stock grants the vesting of which would have accelerated upon the occurrence of the specified events, assuming that such event had occurred on December 31, 2007 and based on the closing price of Flotek’s Common Stock on that date ($36.04).

Name		Change in Control ($)		Death or Permanent Disability ($)		Termination without Cause ($)		Termination for Good Reason ($)
Jerry D. Dumas, Sr.
Restricted stock		7,288,081		6,487,200		6,487,200		6,487,200
Stock options		2,118,578		–		–		–
Total		9,406,659		6,487,200		6,487,200		6,487,200
Lisa G. Meier
Restricted stock		2,560,210		2,162,400		2,162,400		2,162,400
Stock options		903,640		–		–		–
Total		3,463,850		2,162,400		2,162,400		2,162,400

PERFORMANCE GRAPHDirector Compensation

The following is a line graph comparingtable details the yearly changecompensation in our cumulative, five-year total stockholder return with a general market index (Russell Microcap TM Index)2007 of the non-employee directors. On May 17, 2007 each director was granted 3,200 restricted stock awards and a peer group index (Philadelphia Oil Service Index). The graph assumes investmentsoptions to purchase 7,800 shares of $100 on December 31, 2001 and that all dividends were reinvested.stock.

Name		Fees ($)(1)		Restricted Stock Awards ($)(2)(3)		Stock Options ($)(4)(5)		All Other Compensation ($)		Total ($)
John W. Chisholm		46,500		9,642		10,059		–		66,201
Gary M. Pittman		58,500		9,642		10,059		–		78,201
Barry E. Stewart		60,000		9,642		10,059		–		79,701
Richard O. Wilson		49,000		9,642		10,059		–		68,701
William R. Ziegler		52,000		9,642		10,059		–		71,701

The graph shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under Securities Act, or the Exchange Act, except to the extent that

(1)	The following tables shows the non-employee director’s fees earned or paid in cash in 2007:

		Board Retainer ($)		Committee Chair Retainer ($)		Meeting Fees ($)		Total ($)
John W. Chisholm		30,000		–		16,500		46,500
Gary M. Pittman		30,000		7,500		21,000		58,500
Barry E. Stewart		30,000		10,000		20,000		60,000
Richard O. Wilson		30,000		–		19,000		49,000
William R. Ziegler		30,000		5,000		17,000		52,000

Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such acts.

(2)

Represents the amounts recognized for financial reporting purposes in accordance with the FAS 123R for the year ended December 31, 2007, related to restricted stock awards made pursuant to our 2005 Long Term Incentive Plan. These amounts include awards granted during the 2007 fiscal year and reflect the proportionate amount of compensation for the 2007 fiscal year based on the vesting terms of the awards and the fair value of the awards on the date of grant. The awards are expensed over a four-year period. The grant date fair value of the restricted stock awards granted during 2007, as determined pursuant to FAS 123R, was $22.37 per share. See our Annual Report on Form 10-K for the fiscal year ended December 31, 2007 for a description of the FAS 123R valuation.

(3)	The following table shows the aggregate number of restricted stock awards outstanding at December 31, 2007 and the grant date fair value of such awards:

		Aggregate Restricted Stock Awards Outstanding (#)		Grant Date Fair Value of Aggregate Restricted Stock Awards ($)
John W. Chisholm		3,200		62,339
Gary M. Pittman		3,200		62,339
Barry E. Stewart		3,200		62,339
Richard O. Wilson		3,200		62,339
William R. Ziegler		3,200		62,339

(4)

Represents the amounts recognized for financial reporting purposes in accordance with FAS 123R for the year ended December 31, 2007, related to stock options granted pursuant to our 2005 Long Term Incentive Plan. These amounts include stock options granted during fiscal 2007 and reflect the proportionate amount of compensation for fiscal 2007 based on the vesting terms of the awards and the fair value of the awards on the date of grant. The grant date fair value of the option awards granted during 2007, as determined pursuant to FAS 123R, was $9.61 per share. See our Annual Report on Form 10-K for the fiscal year ended December 31, 2007 for a description of the FAS 123R valuation.

(5)	The following table shows the aggregate number of stock options outstanding at December 31, 2007 and the grant date fair value of such awards:

		Aggregate Stock Options Outstanding (#)		Grant Date Fair Value of Aggregate Stock Options ($)
John W. Chisholm		7,800		74,958
Gary M. Pittman		7,800		74,958
Barry E. Stewart		7,800		74,958
Richard O. Wilson		7,800		74,958
William R. Ziegler		7,800		74,958

PROPOSAL 2: ADOPTION OF THE 2007 LONG-TERM INCENTIVE PLAN

Description of the Plan

The purpose of the 2007 Plan is to provide employees and directors an opportunity to acquire an equity interest in the Company. The Company intends to use the Plan to link the long-term interests of stockholders of the Company and participants in the 2007 Plan, attract and retain participants’ services, motivate participants to increase the Company’s value and create flexibility in compensating participants.

The 2007 Plan may be administered by the Board of Directors or by a committee (the “Plan Committee”) appointed by the Board of Directors. The Board of Directors of the Company has currently designated the Executive Compensation Committee of the Board of Directors as the Plan Committee.

The 2007 Plan provides for the grant of incentive and nonqualified stock options, stock appreciation rights, restricted stock, performance shares and performance units (individually an “Award” or collectively, “Awards”). All employees and directors of the Company or its subsidiaries will be eligible to receive Awards under the 2007 Plan. The Plan Committee has the discretion to select the individuals to whom the Awards will be granted, to determine the type, size and terms and conditions applicable to each Award and the authority to interpret, construe and implement the provisions of the 2007 Plan. The Plan Committee’s decisions will be binding.

The total number of shares of Common Stock that may be subject to Awards under the 2007 Plan is 1,100,000 shares. No more than 500,000 shares authorized under the 2007 Plan may be issued as restricted stock. Any shares of Common Stock subject to an Award which expires, is canceled, is forfeited or terminated for any reason other than being settled in shares of Common Stock shall again be available for issuance under the Plan.

The Plan Committee intends to grant Awards under the 2007 Plan which strongly link the interests of stockholders and Award recipients. Accordingly, the Plan Committee intends to grant awards to eligible individuals who have demonstrated successful performance in their respective positions with the Company.

Set forth below is a brief description of the types of Awards that may be granted under the 2007 Plan.

Stock Options. Options (each an “Option”) to purchase shares of Common Stock, which may be incentive or nonqualified stock options, may be granted under the 2007 Plan at an exercise price (the “Option Price”) determined by the Plan Committee in its discretion, provided that the Option Price may be no less than the trading price of the Common Stock on the date of grant. Each Option represents the right to purchase one share of Common Stock at the specified Option Price.

Options will expire no later than 10 years after the date on which they are granted and will become exercisable at such times and in such installments as determined by the Plan Committee. Payment of the Option Price must be made in full at the time of exercise in cash, certified or bank check, or by tendering to the Company shares of Common Stock having a fair market value equal to the Option Price.

Options may become vested and exercisable based upon satisfaction of criteria established by the Plan Committee. Such criteria may be time-based vesting based on continuous employment or rendering services to the Company over a specified period of time from the date of grant.

Stock Appreciation Rights. An Award of a stock appreciation right (“SAR”) may be granted under the 2007 Plan with respect to shares of Common Stock. Generally, one SAR is granted with respect to one share of Common Stock. The SAR entitles the participant, upon the exercise of the SAR, to receive an amount equal to the appreciation in the underlying share of Common Stock. The appreciation is equal to the difference between (i) the “base value” of the SAR (which is the trading price of the Common Stock on the date the SAR is granted), and (ii) the closing trading price of the Common Stock on the date preceding the date the SAR is exercised. Upon

the exercise of a vested SAR, the exercising participant will be entitled to receive the appreciation in the value of one share of Common Stock as so determined, payable at the discretion of the Plan Committee in cash or in shares of Common Stock.

SARs will expire no later than 10 years after the date on which they are granted. SARs become exercisable at such times and in such installments as determined by the Plan Committee.

Tandem Option/SARs. An Option and an SAR may be granted “in tandem” with each other. An Option and an SAR are considered to be in tandem with each other because the exercise of the Option aspect of the tandem unit automatically cancels the right to exercise the SAR aspect of the tandem unit, and vice versa. The Option may be an incentive stock option or a nonqualified stock option, and the Option may be coupled with one SAR, more than one SAR or a fractional SAR in any proportionate relationship selected by the Plan Committee.

Restricted Stock. An Award of restricted stock (“Restricted Stock”) is an Award of Common Stock that is subject to such restrictions, if any, as the Plan Committee deems appropriate, including forfeiture conditions and restrictions against transfer for a period specified by the Plan Committee. Restricted Stock Awards may be granted under the 2007 Plan as consideration for services and/or payments of cash by the participant, as determined by the Plan Committee. Restrictions, if any, on Restricted Stock may lapse in installments based on factors selected by the Plan Committee. Prior to the expiration of the restricted period, except as provided by the Plan Committee, a grantee who has received a Restricted Stock Award generally has the rights of a stockholder of the Company, including the right to vote and to receive cash dividends on the shares subject to the Award.

Performance Shares and Performance Units. A performance share Award (a “Performance Share”) and/or a performance unit Award (a “Performance Unit”) may be granted under the 2007 Plan. Each Performance Unit will have an initial value that is established by the Plan Committee at the time of grant. Such Awards may be earned based upon satisfaction of certain specified performance criteria, subject to such other terms and conditions as the Plan Committee deems appropriate. Prior to the end of a performance period, the Plan Committee, in its discretion, may adjust the performance objectives to reflect an event that may materially affect the performance of the Company, including, but not limited to, market conditions or a significant acquisition or disposition of the assets or other property by the Company. The extent to which a grantee is entitled to payment in settlement of such an Award at the end of the performance period will be determined by the Plan Committee, in its sole discretion, based on whether the performance criteria have been met and payment will be made in cash or in shares of Common Stock in accordance with the terms of the applicable Award Agreements.

Adjustments

Under the 2007 Plan, if there is any change in the capitalization of the Company, a reorganization, or a similar transaction, such proportionate adjustments as may be necessary (in the form determined by the Plan Committee) to reflect such change will be made to prevent dilution or enlargement of the rights with respect to the aggregate number of shares of Common Stock for which Awards in respect thereof may be granted under the 2007 Plan, the number of shares of Common Stock covered by each outstanding Award and the price per share in respect thereof. Unless otherwise provided in an Award Agreement, an individual’s rights under the 2007 Plan may not be assigned or transferred (except in the event of death).

The 2007 Plan permits but does not require the Plan Committee to include a provision in an Award Agreement providing for the acceleration of the vesting of the Awards upon a change-in-control of the Company, and also permits the Plan Committee to accelerate the vesting of any Awards upon a change-in-control, regardless of whether required by the Award agreement.

The Awards will provide that in the event of a change-in-control of the Company, each Award will expire as of the effective date of such transaction, provided that to the extent possible the Company is to provide 30 days written notice of such transaction to the participants so as to enable them to exercise their vested awards prior to the change-in-control event.

Termination

The 2007 Plan will remain in effect until December 31, 2027. Awards may not be granted under the 2007 Plan subsequent to December 31, 2017. The Plan Committee may at any time terminate, modify or amend the 2007 Plan, provided however, that no such amendment, modification or termination may (i) materially adversely affect an optionee’s or grantee’s rights under any Award previously granted under the 2007 Plan, except with the consent of such optionee or grantee, or (ii) increase the number of shares subject to the 2007 Plan, or change the designation of the class of persons eligible to receive Awards, unless approved by the stockholders of the Company.

Certain Federal Income Tax Consequences of Awards

An employee to whom an Option, which is an incentive stock option (“ISO”) that qualifies under Section 422 of the Internal Revenue Code, is granted will not recognize income at the time of grant or exercise of such option. No federal income tax deduction will be allowable to the Company upon the grant or exercise of such ISO. However upon the exercise of an ISO, any excess in the fair market price of the Common Stock over the Option Price constitutes an item of adjustment that may have alternative minimum tax consequences for the employee. When the employee sells such shares more than one year after the date of transfer of such shares and more than two years after the date of grant of such ISO (the “ISO Holding Period”), the employee will generally recognize either a long-term or mid-term capital gain or loss equal to the difference, if any, between the sale prices and the aggregate Option Price, and the Company will not be entitled to a federal income tax deduction with respect to the exercise of the ISO or the sale of such shares. The shares must be held for more than 12 months to qualify for long-term capital gains. If the employee does not hold such shares for the required ISO Holding Period, when the employee sells such shares the employee will recognize ordinary compensation income and possibly short-term capital gain or loss in such amounts as are prescribed by the Internal Revenue Code and the regulations thereunder, and the Company will generally be entitled to a federal income tax deduction.

A participant to whom a nonqualified stock option (“NSO”) or SAR is granted will not recognize income at the time of grant of such Option or SAR. When the participant exercises such NSO or SAR, the participant will recognize ordinary compensation income equal to the difference, if any, between the exercise price paid and the fair market value, as of the date of exercise of such NSO or SAR, of the shares of Common Stock the participant receives. The tax basis of such shares to such participant will be equal to the exercise price paid plus the amount includible in the participant’s gross income, and the participant’s holding period for such shares will commence on the date of exercise. Subject to the applicable provisions of the Internal Revenue Code and regulations thereunder, the Company will generally be entitled to a federal income tax deduction in respect of an NSO or SAR in an amount equal to the ordinary compensation income recognized by the employee upon the exercise of the NSO or SAR.

No income generally will be recognized upon the grant of performance shares or performance units. Upon payment in respect of performance shares or earned performance units, the recipient generally will be required to include as taxable ordinary income in the year of receipt an amount equal to the amount of cash received and the fair market value of any non-restricted shares of Common Stock received less any amount paid for such award at the time of payment or transfer pursuant to the fulfillment of the specified conditions or the achievement of the performance goals.

The recipient of Restricted Stock generally will be subject to tax at ordinary income rates on the fair market value of the shares of Common Stock on the first date that such shares either are transferable by the recipient or cease to be subject to forfeiture, and the capital gain or loss holding period for such shares will also commence on that date.

Required Affirmative Vote

The affirmative vote of holders of a majority of the shares of Common Stock present in person or by proxy at the 2007 Annual Meeting of Stockholders is required to approve the Flotek Industries, Inc. 2007 Long-Term Incentive Plan.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” APPROVAL OF THE COMPANY’S 2007 LONG-TERM INCENTIVE PLAN, AND PROXIES EXECUTED AND RETURNED WILL BE SO VOTED UNLESS CONTRARY INSTRUCTIONS ARE INDICATED THEREON.

PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF UHY LLP

The firm of UHY LLP, independent public accountants (“UHY”), audited our consolidated financial statements for the year ended December 31, 2006,2007, and has advised us that it will have a representative available at the 20072008 Annual Meeting to respond to appropriate questions. Such representative will be permitted to make a statement if he or she so desires.

The firm of UHY LLP (“UHY”) acts as our principal independent registered public accounting firm. Through December 31, 2006,and as of March 17, 2008, UHY had a continuing relationship with UHY Advisors, Inc. (“Advisors”) from which it leased auditing staff who were full time, permanent employees of Advisors and through which UHY’s partners provide non-audit services. UHY has noonly a few full time employees and therefore, noneemployees. Therefore, few, if any, of the audit services performed were provided by permanent full-time employees of UHY. UHY manages and supervises the audit services and audit staff, and is exclusively responsible for the opinion rendered in connection with its examination.

The Audit Committee has selected UHY as its independent certified public accountants to audit its fiscal year 20072008 financial statements. The Board recommends a vote FOR ratification of that selection.

UHY has billed the Company and its subsidiaries fees as set forth in the table below for (i) the audits of the Company’s 20062007 and 20052006 annual financial statements, the auditaudits of the 2007 and 2006 report on internal control over financial reporting, reviews of quarterly financial statements, and review of other documents filed with the Securities and Exchange Commission, (ii) assurance and other services reasonably related to the audit or review of the Company’s financial statements, and (iii) services related to tax compliance. There were no other fees billed.

 

		Audit Fees			Audit -Related Fees			Tax Fees			Audit Fees ($)		Audit -Related Fees ($)		Tax Fees ($)
Fiscal Year 2007											980,856		410,447		326,868
Fiscal Year 2006		$	474,736		$	956,970		$	156,101		1,452,126		–		156,101
Fiscal Year 2005		$	418,707		$	–		$	68,319

The Audit Committee of the Board of Directors has adopted policies regarding the pre-approval of auditor services. All additional services must be pre-approved on a case-by-case basis. All of the services provided by UHY during fiscal year 20062007 and 20052006 were approved by the Audit Committee.

OTHER MATTERS

The Board of Directors of the Company is not aware of any other matters that may come before the Meeting. However, the proxies may be voted with discretionary authority with respect to any other matters that may properly come before the Meeting.

ANNUAL REPORT

A Summary Annual Report to Stockholders and an Annual Report on Form 10-K covering the fiscal year of the Company ended December 31, 20062007 are enclosed herewith. These reports do not form any part of the material for solicitation of proxies.

STOCKHOLDER COMMUNICATIONS

Stockholder proposals for inclusion in the proxy statement for the 20082009 Annual Meeting of Stockholders must be received by the Company at itsis principal executive offices by February 15, 200818, 2009 to be considered for inclusion in the proxy statement and form of proxy relating to the 20082009 Annual Meeting of Stockholders. Such stockholder proposals, together with any supporting statements, should be directed to the Secretary of the Company.

Shareholders’Shareholders and interested parties who wish to communicate with the Board, of Directors, or with any individual director, may send such communication in writingdo so by (1) calling Lighthouse Services, Inc., a third party call center, at (800) 785-1003 or (2) correspondence, addressed to the Board, of Directors, or to an individual director, at the principal executive offices of the Company. All communications received from shareholders are sent directly to Board members.

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PROXY

FLOTEK INDUSTRIES INC.

2008 ANNUAL MEETING OF STOCKHOLDERS - MAY 15, 2008

TO BE HELD AT THE HOUSTON RACQUET CLUB

10709 MEMORIAL DR. HOUSTON, TEXAS

ON FRIDAY, MAY 15, 2008 AT 1:00 P.M.

THE UNDERSIGNED STOCKHOLDER OF FLOTEK INDUSTRIES INC. (the “Company”) HEREBY APPOINTS Jerry D. Dumas, Sr., a director of the Company, or failing this person, William R. Ziegler, a director of the Company, or in the place of the foregoing,, (print the name), as proxyholder for and on his behalf, with full power of substitution, to attend, act and vote for and on behalf of the undersigned at the Annual Meeting of Stockholders of the Company (the “Meeting”) to be held on May 15, 2008 and at every adjournment thereof, to the same extent and with the same powers as if the undersigned were present at the Meeting, or any adjournment thereof. The shareholder hereby directs the proxyholder to vote the securities of the Company registered in the name of the undersigned as specified herein.

(Continued and to be signed on the reverse side.)

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ANNUAL MEETING OF STOCKHOLDERS OFTO BE HELD AT THE HOUSTON RACQUET CLUB

10709 MEMORIAL DR. HOUSTON, TEXAS

ON FRIDAY, MAY 15, 2008 AT 1:00 P.M.

THE UNDERSIGNED STOCKHOLDER OF FLOTEK INDUSTRIES INC. (the “Company”) HEREBY APPOINTS Jerry D. Dumas, Sr., a director of the Company, or failing this person, William R. Ziegler, a director of the Company, or in the place of the foregoing,, (print the name), as proxyholder for and on his behalf, with full power of substitution, to attend, act and vote for and on behalf of the undersigned at the Annual Meeting of Stockholders of the Company (the “Meeting”) to be held on May 15, 2008 and at every adjournment thereof, to the same extent and with the same powers as if the undersigned were present at the Meeting, or any adjournment thereof. The shareholder hereby directs the proxyholder to vote the securities of the Company registered in the name of the undersigned as specified herein.

May 18, 2007

Please date, sign(Continued and mail

your proxy card in the

envelope provided as soon

as possible.

ê  Please detach along perforated line and mail into be signed on the envelope provided.  êreverse side.)

n    20633000000000000000    3                                                                              051807

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE  x

PROPOSAL 1: To elect six directors to serve until the next annual meeting of stockholders of the Company. or until their successors are duly elected and qualified, or until their earlier resignation or removal.n

PROPOSAL 2:

Approval of the 2007 Long Term Incentive Plan

FOR ¨14475

AGAINST ¨

ABSTAIN ¨

¨ ¨ ¨

FOR ALL NOMINEES WITHHOLD AUTHORITY FOR ALL NOMINEES FOR ALL EXCEPT (See instructions below)

NOMINEES: m  J. W. Chisholm m  J. D. Dumas, Sr. m  G. M. Pittman m  B. E. Stewart m  R. O. Wilson m  W. R. Ziegler

PROPOSAL 3:

To ratify the appointment of UHY LLP as the company’s auditors for the year ended December 31, 2007.

¨

¨

¨

PROPOSAL 4:

Any other business which may be properly brought before the meeting or any adjournment thereof.

INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here:  l

To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.

¨

Signature of Stockholder

Date:

Signature of Stockholder

Date:

n

Note:

Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

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PROXY

FLOTEK INDUSTRIES INC.

2007 ANNUAL MEETING OF STOCKHOLDERS - MAY 18, 2007

TO BE HELD AT THE HOUSTON RACQUET CLUB

10709 MEMORIAL DR. HOUSTON, TEXAS

ON FRIDAY, MAY 18, 200715, 2008 AT 2:1:00 P.M.

THE UNDERSIGNED STOCKHOLDER OF FLOTEK INDUSTRIES INC. (the “Company”) HEREBY APPOINTS Jerry D. Dumas, Sr., a director of the Company, or failing this person, William R. Ziegler, a director of the Company, or in the place of the foregoing,                                , (print the name), as proxyholder for and on his behalf, with full power of substitution, to attend, act and vote for and on behalf of the undersigned at the Annual Meeting of Stockholders of the Company (the “Meeting”) to be held on May 18, 200715, 2008 and at every adjournment thereof, to the same extent and with the same powers as if the undersigned were present at the Meeting, or any adjournment thereof. The shareholder hereby directs the proxyholder to vote the securities of the Company registered in the name of the undersigned as specified herein.

(Continued and to be signed on the reverse side.)

n		14475  n

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ANNUAL MEETING OF STOCKHOLDERS OF

FLOTEK INDUSTRIES, INC.

May 15, 2008

MAIL-Date, sign and mail your proxy card in the envelope provided as soon as possible. - OR - TELEPHONE-Call toll-free1-800-PROXIES (1-800-776-9437) in the United States or1-718-921-8500from foreign countries and follow the instructions. Have your proxy card available when you call. - OR - - IN PERSON-You may vote your shares in person by attending the Annual Meeting.

You may enter your voting instructions at 1-800-PROXIES in the United States or 1-718-921-8500 from foreign countries up until 11:59 PM Eastern Time the day before the cut-off or meeting date.

ê  Please detach along perforated line and mail in the envelope providedIF you are not voting via telephone.  ê

n    20630000000000000000    6                                                                              051508

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE  x

PROPOSAL 1: To elect six directors to serve until the next annual meeting of stockholders of Flotek Industries, Inc. or until their successors are duly elected and qualified, or until their earlier resignation or removal.

PROPOSAL 2:

To ratify the selection of UHY LLP as the Company’s auditors for the year ending December 31, 2008.

FOR ¨

AGAINST ¨

ABSTAIN ¨

¨ ¨ ¨

FOR ALL NOMINEES WITHHOLD AUTHORITY FOR ALL NOMINEES FOR ALL EXCEPT (See instructions below)

NOMINEES: m  J. W. Chisholm m  J. D. Dumas, Sr. m  G. M. Pittman m  B. E. Stewart m  R. O. Wilson m  W. R. Ziegler

*Note*    Such other business as may properly come before the meeting or any adjournment thereof. The undersigned hereby votes shares that each of the undersigned is entitled to vote at the 2008 Annual Meeting of Stockholders of Flotek Industries, Inc. as follows. All prior proxies are hereby revoked.

INSTRUCTIONS:     To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here:  l

To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.

¨

Signature of Stockholder

Date:

Signature of Stockholder

Date:

n

Note:

Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

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