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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
HALTER MARINE GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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[Halter Marine Group, Inc. Logo Appears Here]
13085 Seaway Road
Gulfport, Mississippi 39503
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on August 10, 1999
Notice is hereby given that the 1999 Annual Meeting of Stockholders of
Halter Marine Group, Inc. (the "Company"), a Delaware corporation, will be
held at the Great Southern Club, One Hancock Plaza, Suite 1112, Gulfport,
Mississippi 39501, on Tuesday, August 10, 1999, at 9:00 a.m., Central Daylight
Time, for the following purposes:
1) to elect two (2) directors to hold office until the Annual Meeting of
Stockholders in the year 2002 and until their successors are elected and
qualified; and
2) to transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on June 21, 1999 will
be entitled to notice of, and to vote at, the 1999 Annual Meeting, or any
adjournment thereof, notwithstanding the transfer of any stock on the books of
the Company after such record date. A list of the stockholders will be open
for examination by any stockholder for any purpose germane to the 1999 Annual
Meeting, for a period of ten (10) days prior to the meeting at the Company's
offices, 13085 Seaway Road, Gulfport, Mississippi 39503.
Please forward your proxy in order that you will be represented at the 1999
Annual Meeting, whether or not you expect to attend in person. Stockholders
who attend the 1999 Annual Meeting may revoke their proxies and vote in
person, if they so desire.
By Order of the Board of Directors
MAUREEN O'CONNOR SULLIVAN
Senior Vice President, General
Counsel
and Secretary
Gulfport, Mississippi
July 7, 1999
<PAGE>
Halter Marine Group, Inc.
13085 Seaway Road
Gulfport, Mississippi 39503
The 1999 Annual Report to Stockholders, including financial statements, is
being mailed to stockholders together with these proxy materials on or about
July 7, 1999.
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on August 10, 1999
This Proxy Statement is furnished to the stockholders of Halter Marine
Group, Inc. (the "Company") in connection with the solicitation of proxies by
the Board of Directors of the Company (the "Board of Directors" or the
"Board") for use at the Annual Meeting of Stockholders of the Company to be
held at the Great Southern Club, One Hancock Plaza, Suite 1112, Gulfport,
Mississippi 39501, on Tuesday, August 10, 1999, at 9:00 a.m., Central Daylight
Time (the "1999 Annual Meeting" or the "Meeting"), or at any adjournment
thereof, for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders.
About the 1999 Annual Meeting
Voting Procedures
Stockholders of record at the close of business on June 21, 1999 (the
"Record Date") will be entitled to vote at the Meeting. On the Record Date,
there were outstanding 28,856,661 shares of the Company's Common Stock (the
"Company Shares") represented by approximately 24,400 holders of record. The
holders of a majority of the Company Shares issued and outstanding and
entitled to vote at the Meeting, present in person or represented by proxy,
will constitute a quorum. The persons whom the Company appoints to act as
inspectors of election will treat all Company Shares represented by a
returned, properly executed proxy as present for purposes of determining the
existence of a quorum at the Meeting. The Company Shares present at the
meeting, in person or by proxy, that are abstained from voting or that are the
subject of broker non-votes will be counted as present for determining the
existence of a quorum. A broker non-vote occurs when a nominee holding Company
Shares for a beneficial owner does not vote on a matter because the nominee
does not have discretionary voting power with respect to the matter and has
not received voting instructions from the beneficial owner.
Each of the Company Shares will entitle the holder to one vote. In
connection with the election of directors, a plurality of votes cast at the
meeting is required for election and cumulative voting is not permitted. All
other matters to be submitted to the stockholders require an affirmative vote
of the majority of votes cast. Votes cast at the meeting will be counted by
the inspectors of election.
The Board of Directors is soliciting your proxy on the enclosed form to
provide you with an opportunity to vote on all matters to come before the
meeting, whether or not you attend in person. If you properly execute and
return a proxy in the enclosed form, your shares will be voted as you specify.
If you do not specify how you want your shares to be voted, your shares will
be voted in accordance with the recommendations of the Board, as set forth
below. If you submit a proxy, you may subsequently revoke it by submitting a
revised proxy or a written revocation at any time before your original proxy
is voted. You may also attend the meeting in person and vote in person by
ballot, which would cancel any proxy you previously gave. Unless you revoke
your proxy, it will be voted at the 1999 Annual Meeting, and at any
adjournment thereof, in the manner specified therein, or if not specified, in
the following manner:
(1) FOR election of the two (2) nominees, Mr. Angus R. Cooper, II and Mr.
Burt H. Keenan, as members of the Board of Directors of the Company to hold
office until the Annual Meeting of Stockholders in the year 2002, and until
their successors are elected and qualified; and
<PAGE>
(2) At the discretion of the persons named in the enclosed form of proxy,
on any other matter that may properly come before the 1999 Annual Meeting,
and any adjournment thereof.
Proxy Solicitation
The enclosed proxy is solicited by and on behalf of the Board of Directors
of the Company. In addition to solicitations by mail, arrangements have been
made for brokers or nominees to send proxy materials to their principals, and
the Company will reimburse them for their reasonable expenses in doing so. The
expense of the solicitation of proxies for the 1999 Annual Meeting, including
the cost of mailing, will be borne by the Company. Certain regular employees
of the Company, at no additional compensation, may also solicit proxies
personally, by telephone, facsimile or mail. Stockholders are urged to send in
their proxies without delay to avoid additional expense to the Company.
Ownership of Company Stock by Certain Beneficial Owners and Management
Beneficial Ownership of Directors and of Certain Executive Officers
The following table shows the number of shares of Common Stock beneficially
owned by each director; by the Company's Chief Executive Officer; by each
executive officer of the Company named in the "Summary Compensation Table" set
forth below under "Executive Compensation and Other Matters"; by all directors
and executive officers (11 persons) as a group; and by such persons known to
the Company to own beneficially more than five (5%) of the outstanding Common
Stock of the Company. The information set forth below, except where indicated,
is as of the Record Date and, is based upon information supplied by the named
individuals:
<TABLE>
<CAPTION>
Number of Shares Percent
Name Beneficially Owned(1) of Class
---- --------------------- --------
<S> <C> <C>
Angus R. Cooper, II............................. 83,500(4) *
Don O. Covington................................ 70,000(4) *
John Dane III................................... 566,742(2)(4) 2.0%
Barry J. Galt................................... 3,586(4) *
Richard J. Juelich.............................. 164,809(4) *
Burt H. Keenan.................................. 6,000(3)(4) *
Kenneth W. Lewis................................ 37,273(4) *
Daniel J. Mortimer.............................. 124,607(4)(6) *
Rick S. Rees.................................... 222,000(4) *
Directors and Executive Officers as a Group..... 1,326,213(2)(4) 5.5%
David L. Babson & Co., Inc...................... 1,978,864(5) 6.9%
Pioneering Management Corporation............... 2,513,084(5) 8.7%
</TABLE>
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* Less than one percent (1%)
(1) Unless otherwise noted, all shares are owned directly and the owner has
the right to vote the shares.
(2) Includes shares held beneficially under the Company's 401(k) plan as of
May 3, 1999 by Mr. Dane (1,568 shares) and Directors and Executive
Officers as a Group (2,216 shares).
(3) Does not include 600 shares owned by Mr. Keenan's wife, as to which he
disclaims any beneficial interest.
(4) Includes shares which the individual has the right to acquire within sixty
(60) days of June 21, 1999, pursuant to exercise of options granted under
the Stock Option Plan for Mr. Cooper (4,500 shares); Mr. Covington (40,000
shares); Mr. Dane (374,000 shares); Mr. Galt (3,000 shares); Mr. Juelich
(22,000 shares); Mr. Keenan (4,500 shares); Mr. Lewis (4,500 shares); Mr.
Rees (164,000 shares); Directors and Executive Officers as a Group
(660,100 shares).
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(5) Based on information included in Schedules 13G filed by David L. Babson &
Co., Inc. and Pioneering Management Corporation with the Commission on
June 9, 1999 and January 11, 1999, respectively. The shares of Common
Stock to which such Schedule 13G of David L. Babson & Co., Inc. relate are
beneficially held by it on behalf of numerous investment clients for whom
it serves as investment adviser. The shares of Common Stock to which such
Schedule 13G of Pioneering Management Corporation relate are held directly
by one or more mutual funds in the Pioneer family of funds.
(6) Mr. Mortimer resigned as Executive Vice President and Chief Operating
Officer in May 1999 and as a director in June 1999.
MATTERS TO BE PRESENTED TO THE STOCKHOLDERS AT THE MEETING
ITEM 1--ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation and Bylaws provide that
the Board of Directors is divided into three classes. Each year the
stockholders are asked to elect the members of a class for a term of three (3)
years.
At the 1999 Annual Meeting, two (2) directors are to be elected who will
hold office until the Annual Meeting of Stockholders in the year 2002 and
until their respective successors are duly elected and qualified. The persons
named as proxies in the enclosed form of proxy intend to vote for the election
of each of the two (2) nominees listed below, unless otherwise directed. The
Board has nominated Mr. Angus R. Cooper, II and Mr. Burt H. Keenan, the
directors whose terms are expiring this year, for election as members of the
Board to serve for three year terms until the Annual Meeting of Stockholders
in 2002. The nominees have consented to be named herein and to serve, if
elected.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE TWO
(2) NOMINEES: MR. COOPER and MR. KEENAN
Information About Nominees and Continuing Directors
Nominees for Election at the 1999 Meeting
Angus R. Cooper, II, age 57. Director since April 1, 1997, Mr. Cooper is
Chairman of the Board and Chief Executive Officer of Cooper/T. Smith
Corporation, a shipping service company headquartered in Mobile, Alabama which
operates in 30 ports on the East, Gulf and West Coasts of the United States,
plus operations in Brazil, Colombia, Mexico and Venezuela. He currently serves
on the Board of Directors of the Whitney National Bank, Coast Guard
Foundation, World Business Council and the Executive Hall of Fame.
Burt H. Keenan, age 60. Director since April 1, 1997. Mr. Keenan is Chairman
of the Board and Chief Executive Officer of Independent Energy Holdings, a
London listed United Kingdom corporation, that develops and markets
electricity in the United Kingdom's deregulated electricity industry. He is a
director of Telescan, a NASDAQ listed company which conducts an interactive
online information business. From 1969 to 1986, Mr. Keenan was the Chairman
and Chief Executive Officer of Offshore Logistics, Inc., a NASDAQ listed
marine and aviation oil and gas service company. Since 1987, he has been
associated with Chaffe and Associates, Inc., an investment banking firm in New
Orleans, Louisiana. Under the Carter and Reagan Administrations, Mr. Keenan
was a member of the National Advisory Council on Oceans and Atmosphere, a
United States Presidential Commission.
Continuing Directors
Terms Expiring in 2000
There is one vacancy in the class of 2000.
John Dane III, age 48. Director, Chairman of the Board and President and
Chief Executive Officer of the Company. Mr. Dane has over 23 years of marine
management experience. He founded Moss Point Marine, Inc. in 1980, which was
acquired in 1987 by Trinity Industries, Inc., at which time he became
president of Trinity
3
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Marine Group, the predecessor of the Company. During his tenure, Trinity
Marine Group grew to 22 shipyards with revenues exceeding $400 million. Mr.
Dane holds a B.S. and a Ph.D in civil engineering from Tulane University. He
is a member of the Board of Advisors, Tulane School of Engineering, the Navy
League, the U.S. Coast Guard Foundation, the Society of Naval Architects and
the Federal Reserve Bank of Atlanta. He is a registered engineer and a member
of the American Bureau of Shipping.
Terms Expiring in 2001
Barry J. Galt, age 65. Director since November 8, 1997. Mr. Galt is a
director, and prior to his retirement on March 30, 1999, served since 1983 as
Chairman and Chief Executive Officer of Ocean Energy, Inc., formerly named
Seagull Energy Corporation, a diversified energy company engaged in oil and
gas exploration and development. He is also a director of Trinity Industries,
Inc., a director of StanCorp Financial Corp., Inc., an insurance company, and
a Houston area advisory director of Chase Bank of Texas, National Association,
a national bank.
Kenneth W. Lewis, age 60. Director since 1996. Mr. Lewis was Senior Vice
President and Chief Financial Officer of Trinity Industries, Inc. at the time
of his retirement in January 1996 after 32 years of service. He was a director
of McConway & Torley Corporation, a privately held manufacturer of products
for the railcar industry until its acquisition in 1999, and is a director of
Lambert Fenchurch US Holdings, Inc., which is owned principally by Lambert
Fenchurch Group Holdings PLC, an international broker conducting all classes
of insurance and reinsurance brokering and risk management headquartered in
London, England and having offices worldwide.
Rick S. Rees, age 46. Director since 1996. Mr. Rees joined the Company in
April 1997 and is an Executive Vice President and the Chief Financial Officer.
Mr. Rees has been involved in the marine industry since obtaining his MBA from
A. B. Freeman School of Business, Tulane University in 1975. Prior to joining
the Company, Mr. Rees was President of Maritime Holdings, Inc., the parent
company of Texas Drydock, Inc., a company with operations in the offshore rig
construction, conversion and repair business which was acquired by the Company
in fiscal 1998. From 1989 to 1996, he was President of Maritime Capital
Corporation, a marine finance company. From 1975 to 1983, he was with Halter
Marine, Inc., an antecedent of Halter Marine Group, Inc., and served in
several capacities, including Chief Financial Officer and as a director of the
Company. Mr. Rees serves on the Advisory Board of the A.B. Freeman School of
Business of Tulane University, and has served as President of the Tulane
Association of Business Alumni. He is a Certified Public Accountant and is a
member of the American Institute of Certified Public Accountants, and the
Financial Executives Institute.
Corporate Governance
The Board of Directors
The directors hold regular quarterly meetings, attend special meetings, as
required, and spend such time on the affairs of the Company as their duties
require. During the Company's fiscal year ended March 31, 1999, the Board of
Directors held a total of seven (7) meetings, quarterly and special. All
directors of the Company attended at least seventy-five percent (75%) of the
meetings of the Board of Directors, and the committees on which they served,
during fiscal 1999.
Committees of the Board
The Board of Directors has established an Audit Committee, the current
members of which are Messrs. Barry J. Galt, Chairman, Kenneth W. Lewis, Burt
H. Keenan and Angus R. Cooper II. The responsibilities and authorities of the
Audit Committee include: (1) to recommend to the Board of Directors the firm
or persons to be employed by the Company as its independent auditors (subject
to contractual obligations of the Company, if any, relating to the retention
of independent auditors), (2) to consult with the independent auditors as to
their plan of audit and to review non-audit services to be performed for the
Company, (3) to review and evaluate with the independent auditors the results
of their audit, their audit report and any related management letter and the
4
<PAGE>
annual financial statements of the Company, (4) to review and evaluate with
senior financial management of the Company and the independent auditors the
appropriateness of, and compliance with, the Company's accounting policies,
internal control systems, business practices and ethics policies, and
financial record keeping and reporting procedures, and (5) to take such other
actions as may be appropriate or as directed by the Board of Directors to
assure that the financial information to be provided by the Company to its
stockholders and others is reliable and the policies, systems of control and
procedures established by management effectively safeguard the assets and
other interests of the Company. During fiscal 1999, the Audit Committee held
five (5) meetings.
The Board of Directors has also established a Compensation Committee, the
current members of which are Messrs. Kenneth W. Lewis, Chairman, Angus R.
Cooper, II, Burt H. Keenan and Barry J. Galt. The responsibilities and
authorities of the Compensation Committee include: (1) to determine the
salaries, incentive compensation and other remuneration of the executive
officers of the Company, (2) to review the compensation policies and general
guidelines being used to compensate employees of the Company who are officers,
(3) to make grants and awards under the Company's 1996 Stock Option and
Incentive Plan , as amended and supplemented (the "Stock Option Plan"), (4) to
grant contingent performance bonuses to officers and other key employees of
the Company under the Stock Option Plan and the Company's Annual Incentive
Compensation Plan in such amounts and subject to such terms and conditions,
including conditions to vesting, as the Compensation Committee may deem
appropriate, and (5) to take such other action as may be appropriate or as
directed by the Board of Directors to assure that the compensation policies of
the Company are reasonable and fair. During fiscal 1999, the Compensation
Committee held four (4) meetings.
During the first fiscal quarter of 2000, the Board of Directors formed a
Strategic Options Committee, the current members of which are Messrs. John
Dane III, Burt H. Keenan, Kenneth W. Lewis, and Rick S. Rees. The
responsibilities and authorities of the Strategic Options Committee include:
(1) to consider any strategic options available to the Company by way of sale,
merger or otherwise, (2) to act in evaluation of any strategic options that
may become available to the Company, and (3) to take such other actions as may
be appropriate or as may be directed by the Board of Directors relative to
strategic options of the Company.
The entire Board of Directors acts as a nominating committee.
Compensation of Directors
Each director, who is not a compensated officer or employee of the Company,
currently receives $1,250 for each meeting of the Board attended, plus
reimbursement of reasonable out-of-pocket expenses incurred in connection
therewith. Each director, who is not a compensated officer or employee of the
Company, also receives a fee of $30,000 per annum, payable in equal monthly
installments, for serving as a director. The Chairman of the Audit and
Compensation Committees each receive an additional $2,000 per annum for
serving in those capacities, and each member of those committees receive
$1,250 for each meeting attended. In addition, each director, who is not a
compensated officer or employee of the Company, may be granted under the Stock
Option Plan, on an annual basis, options to purchase 7,500 shares of the
Common Stock of the Company at the closing price per share as of the date of
the Company's Annual Meeting of Stockholders for that year. Such options were
granted in fiscal 1999.
5
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Executive Compensation and Other Matters
Cash Compensation
The following table sets forth information, for the Company's fiscal year
ended March 31, 1999, with regard to the compensation for their services to
the Company and its subsidiaries in all capacities, for the Chief Executive
Officer and each of the other four (4) most highly compensated executive
officers of the Company at the close of fiscal 1999.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
--------------------------------- ------------
Stock Option
Name and Principal Other Annual Awards All Other
Position Year Salary Bonus(1) Compensation(2) (Shares) Compensation(3)
------------------ ---- ------ -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
John Dane III........... 1999 $553,334 $282,150 $83,548 70,000 $ 33,108
Chairman, President and 1998 550,000 580,000 113,000 750,000 28,625
Chief Executive Officer 1997 491,667 857,880 134,947 150,000 18,312
Daniel J. Mortimer(4)... 1999 $503,334 $ -- $ -- 55,000 $232,976
Former Executive Vice 1998 176,532 105,000 28,153 207,500 371,250
President and Chief 1997 -- -- -- -- --
Operating Officer
Rick S. Rees............ 1999 $353,334 $134,925 $48,826 55,000 $ 23,876
Executive Vice 1998 344,340 280,000 62,434 375,000 22,219
President and 1997 -- -- -- -- --
Chief Financial Officer
Richard J. Juelich(5)... 1999 $252,915 $125,000 $ -- 20,000 $ 57,903
Group President, 1998 104,845 -- -- 110,000 20,287
Engineered 1997 -- -- -- -- --
Products Group
Don O. Covington........ 1999 $280,000 $ -- $ -- 20,000 $ --
Group President, 1998 278,663 125,000 -- 90,000 --
TDI--Halter, L.P. 1997 -- -- -- -- --
</TABLE>
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(1) Fifty percent (50%) of the annual incentive bonus is paid within ninety
(90) days of the close of the Company's fiscal year, except for Mr.
Juelich for whom no deferral was made and for Messrs. Dane and Rees for
whom one hundred percent (100%) of their respective bonuses for fiscal
1999 was deferred for one (1) year, provided that the executive's
employment with the Company has not been terminated for any reason other
than death, disability, retirement, or change of control prior to payment
(in the case of cash deferrals), or prior to removal of restrictions (in
the case of receipt of restricted Company shares). The amounts shown for
bonuses during fiscal 1998 in the foregoing table, except for Mr.
Covington and Mr. Juelich, include the fifty percent (50%) deferred to the
subsequent year, which deferred bonus amounts total for Messrs. Dane,
$290,000; Rees, $140,000; and Mortimer, $52,500, except that the following
individuals elected to receive all of their deferred bonus for fiscal 1998
in restricted Company stock; Messrs. Dane, 16,000 shares, and Mortimer,
2,897 shares. The bonus amount for fiscal 1997 includes a one-time special
bonus awarded by the Compensation Committee for the year to certain
officers and employees, the amount of which was $442,000 for Mr. Dane.
(2) An amount equal to ten percent (10%) of salary and incentive bonus was set
aside pursuant to a long term deferred compensation plan in fiscal 1997,
1998 and 1999 for Mr. Dane; in fiscal 1998 and 1999 for Mr. Rees and in
fiscal 1998 for Mr. Mortimer.
(3) All Other Compensation consists principally of the Company's matching
contribution under the 401(k) plan previously available to executives and
under the non-qualified deferred compensation plan currently available to
executives, and automobile allowances. All Other Compensation for Mr.
Mortimer during fiscal 1999 also included payment of $250,000 under a non-
compete agreement net of $27,500 in certain directors fees overpaid to Mr.
Mortimer in fiscal 1998 for which Mr. Mortimer reimbursed the company,
and, during fiscal 1998, consulting fees of $336,000 paid to him by the
Company prior to his employment by the Company.
(4) Mr. Mortimer joined the Company as Executive Vice President and Chief
Operating Officer in November 1997 and resigned in this capacity in May
1999. Mr. Mortimer joined the Company as a member of the Board of
Directors in April 1997 and resigned in this capacity in June 1999.
(5) Mr. Juelich joined the Company in November 1997 and became Group
President--Engineered Products Group in April 1998.
6
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Incentive and Other Employee Benefit Plans
1996 Stock Option and Incentive Plan
The Company has adopted the Amended and Restated 1996 Stock Option and
Incentive Plan as amended and supplemented (the "Stock Option Plan") in order
to attract and retain key employees and directors of the Company, to encourage
the sense of proprietorship of such persons and to stimulate the active
interest of such persons in the development and financial success of the
Company. These objectives are to be accomplished by making awards under the
Stock Option Plan and thereby providing participants with a proprietary
interest in the growth and performance of the Company.
The Compensation Committee of the Board of Directors determines the officers
and key employees to whom options are granted, the type of options, the number
of shares covered by such options and the option vesting schedule. In the case
of incentive stock options, the Internal Revenue Code requires that the option
exercise price must not be less than the fair market value of the stock at the
time that the option is granted. Options become exercisable as set forth in
the option agreements pursuant to which they are issued, but in no event are
incentive stock options exercisable after the expiration of ten (10) years
from the date of grant (or, in the case of an employee owning directly or
indirectly more than ten (10%) percent of the total outstanding Common Stock,
five (5) years from the date of grant). Regardless of any vesting schedule
contained in an option agreement, the plan provides for the acceleration of
vesting in certain events, including the optionee's death, disability or
retirement, the dissolution or liquidation of the Company, certain
reorganizations of the Company or the acquisition of fifty percent (50%) or
more of the Company's outstanding Common Stock as a result of a tender or
exchange offer other than by the Company. The following types of awards may be
made pursuant to the Stock Option Plan: (i) stock option, including incentive
stock options; (ii) stock appreciation right, in tandem with stock options or
freestanding; (iii) restricted stock; (iv) performance awards; (v) dividend
equivalent rights, in tandem with other awards or freestanding; and (vi) other
awards based on, payable in, or otherwise related to Common Stock. The Stock
Option Plan provides that the maximum number of shares of Common Stock shares
with respect to which awards may be granted is 3,600,000 shares. As awards
under such plan expire, terminate, or are surrendered unexercised, the shares
underlying such awards are available for further awards. The terms of the plan
currently provide that all rights to exercise an option terminate immediately
upon an employee's discharge for cause; ten days after an employee's
resignation; three months after an employee's disability; twelve months after
an employee's death and three months after the employee's retirement. The
Stock Option Plan provides that if the terms of a non-qualified option
prohibit its exercise before the expiration of a specified period of time and
if the optionee ceases to be an officer, director or employee for any reason
other than discharge for cause, then the vested portion of the option will not
terminate until three months after the expiration of the period during which
the exercise of the option is prohibited.
Recipients of options may pay the option exercise price in cash or by
delivering to the Company shares of the Company's Common Stock already owned
by the optionee having a fair market value equal to the option exercise price.
When the optionee surrenders stock already owned by him in payment of the
exercise price, the optionee will be granted, except in limited instances, a
new option on shares equal in number to those surrendered at an option
exercise price that is the fair market value of the Company's Common Stock on
the date of the new grant and exercisable no earlier than six months after the
date of such new grant. An optionee also may elect to satisfy the income tax
withholding requirement upon the exercise of a non-incentive stock option
either by payment of the amount of such withholding obligation in cash or
through the retention by the Company of a number of shares of Common Stock out
of the shares being purchased with a fair market value equal to the amount of
the withholding obligation, but no new option is awarded for the shares
retained to satisfy the employee's income tax withholding requirement.
The provisions of the Stock Option Plan may be modified or amended at any
time or from time to time by the Board of Directors; provided, however, no
option at any time outstanding may be impaired or canceled adversely to the
holder without the consent of the holder thereof, and no amendment can
increase the maximum number of shares subject to the plan, to materially
increase the benefits accruing to participants, or materially modify the
requirements as to eligibility for participation in the plan, without
stockholder approval.
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The following table contains information concerning the grant of stock
options with respect to fiscal 1999 for each of the executives named in the
Summary Compensation Table.
Option Grants In Last Fiscal Year
<TABLE>
<CAPTION>
Potential
Realizable Value at
Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants(1) For Option Term
- ------------------------------------------------------------------------ -------------------
Percent of Market
Total Price
Options Exercise on
Granted to or Base Date At 5% At 10%
Options Employees in Price of Expiration Annual Annual
Name Granted Fiscal Year ($/Sh) Grant Date Growth Growth
---- ------- ------------ -------- ------ ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
John Dane III........... 70,000 20.2% $16.50 $16.50 04/28/08 $726,373 $1,840,773
Rick S. Rees............ 55,000 15.9% $16.50 $16.50 04/28/08 $570,722 $1,446,321
Daniel J. Mortimer(2)... 55,000 15.9% $16.50 $16.50 04/28/08 $570,722 $1,446,321
Richard J. Juelich...... 20,000 5.8% $16.50 $16.50 04/28/08 $207,535 $ 525,935
Don O. Covington........ 20,000 5.8% $16.50 $16.50 04/28/08 $207,535 $ 525,935
</TABLE>
- --------
(1) The stock options shown in the table were granted pursuant to the
Company's Stock Option Plan. The Company has not granted any stock
appreciation rights. The Company's Stock Option Plan provides that, in the
event of acquisition of fifty percent (50%) or more of the Company Shares
as a result of any tender or exchange offer, all unexercised options may
be exercised even though such option would not otherwise be exercisable
under the option vesting schedule and all such options must be exercised
during a thirty (30) day period to be fixed by the Board, after which such
options will be expire and be of no further effect.
(2) Mr. Mortimer joined the Company as Executive Vice President and Chief
Operating Officer in November 1997 and resigned in this capacity in May
1999.
The table below sets forth information concerning each exercise of stock
options by each of the named executive officers during the most recently
completed fiscal year and the number of exercisable and unexercisable stock
options held by them and the fiscal year-end value of the exercisable and
unexercisable options.
Aggregated Option Exercised In Last Fiscal Year And Fiscal Year-End Option
Values
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Options at Fiscal in-the-Money Options at
Acquired Year End Fiscal Year End
On Value ------------------------- -------------------------
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- -------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
John Dane III........... -- -- 210,000 $--
760,000 $--
Rick S. Rees............ -- -- 78,000 $--
359,500 $--
Daniel J. Mortimer(1)... -- -- 41,500 $--
221,000 $--
Richard J. Juelich...... -- -- 18,000 $--
92,000 $--
Don O. Covington........ -- -- 18,000 $--
92,000 $--
</TABLE>
- --------
(1) Mr. Mortimer joined the Company as Executive Vice President and Chief
Operating Officer in November 1997 and resigned in this capacity in May
1999.
Retirement Plans
Defined Benefit Plan. The Company has a noncontributory, defined benefit
retirement plan (the "defined benefit plan") which was, until March 31, 1998,
available to all eligible employees who had completed a
8
<PAGE>
specified period of employment. The Company has frozen the defined benefit
plan as of March 31, 1998. The defined benefit plan provides for the payment
of monthly retirement benefits determined under a calculation based on
credited years of service and a percentage of average monthly compensation
over a five consecutive year period.
Retirement benefits are paid to participants upon retirement, as defined in
the plan. A participant is one hundred percent vested after five or more years
of service but forfeits his benefits in case of a severance from service
before five years except upon death or actual retirement. The plan also
provides for the payment of certain benefits upon the death of a vested
participant.
No employees or officers will become participants in the defined benefit
plan after March 31, 1998, and no additional benefits will accrue for
participants after March 31, 1998. Of the individuals listed in the "Summary
Compensation Table" in this proxy statement, only Mr. Dane has had sufficient
years of service, which includes certain service with Trinity, for payment of
benefits under the defined benefit plan.
Supplemental Retirement Plan. The Company has established a supplemental
retirement plan, which is a nonqualified, deferred compensation plan available
to a select group of highly compensated employees providing benefits in an
amount equal to the amount participants would have received under the defined
benefit plan, but for the limitations of Section 401(a)(17) and Section 415 of
the Internal Revenue Code. A participant is entitled to benefits upon his
retirement.
In light of the freezing of the Company's defined benefit plan, effective
March 31, 1998, there were no further benefit accruals under this supplemental
retirement plan after March 31, 1998. All benefits under this supplemental
retirement plan will be paid out of the general assets of the Company. Only
Mr. Dane has had sufficient years of service, which includes certain service
with Trinity, for payment of benefits under the supplemental retirement plan.
The approximate level of annual benefit payable to Mr. Dane under the
defined benefit plan and the supplemental retirement plan, assuming retirement
from the Company at age 65 and an average annual compensation in the five
years preceding retirement of $1,100,000, is $90,750.
Section 401(k) Plan. The Company maintains a Section 401(k) plan (the
"401(k) plan") that permits employees to elect to contribute not less that two
percent (2%) nor more than fifteen percent (15%) of their compensation to a
trust to pay future retirement benefits, subject to the maximum limit on the
amount of compensation permitted to be deferred for this purpose. The Company,
in its discretion for each plan year, makes monthly contributions to the plan.
The Company currently matches fifty percent (50%) of the lesser of (i) the
amount of the employee's contribution or (ii) six percent (6%) of the
employee's compensation. Participants are 100% vested in the salary reduction
contributions made by them, and vest in the employer contributions over a four
(4) year period at the rate of twenty-five percent (25%) per year or upon
normal retirement, death or disability. Effective April 1, 1998, highly
compensated employees, including each individual listed in the "Summary
Compensation Table," were no longer eligible to participate in the Company's
401(k) plan.
Nonqualified Deferred Compensation Plan. The Company had established a
Supplemental Profit Sharing Plan which, effective April 1, 1998, has been
amended and renamed as the Company's Nonqualified Deferred Compensation Plan
(the "nonqualified deferred compensation plan"). Under this nonqualified
deferred compensation plan, certain highly compensated employees are permitted
to defer compensation, and the Company credits to an account for each such
employee an amount equal to the deferred portion of his compensation plus
matching contribution. For deferrals made on or after April 1, 1998, the
Company matches fifty (50%) percent of the amount of the employee's base
salary deferrals, not in excess of six (6%) percent of base salary. The
Company may also make additional contributions on behalf of one or more
participants in its discretion for each plan year. The bookkeeping accounts
that are maintained on behalf of participants under this plan are credited
with earnings and losses based on deemed investments made at the direction of
the participant in specified investment funds. The Company has also assumed an
obligation to provide benefits under its nonqualified deferred compensation
plan based on deferrals and matching contributions made by certain Company
employees to a deferred compensation plan maintained by Trinity. Benefits are
paid in a lump sum payment at termination of employment or may be paid in
installments if the participant retires after age 55. Certain pre-termination
distributions are also available. Contributions to the nonqualified deferred
compensation
9
<PAGE>
plan are not deductible by the Company for federal income tax purposes until
benefits are paid to participants. The Company has established a grantor trust
under the plan, and the assets of the trust are considered part of the general
assets of the Company.
Executive Severance Agreements
The Company has entered into agreements (the "Executive Severance
Agreements") with certain of the executive officers named in the Summary
Compensation Table and others which provide certain severance benefits in the
event of a termination of employment following a Change of Control of the
Company (as defined). Each Executive Severance Agreement provides that,
following a change of control of the Company, and only if the executive's
employment is terminated, other than as a result of the executive's death,
disability or retirement, or for cause (as defined) or, if the executive
terminates his employment for good reason (as defined), then the Company will
pay to such executive a lump sum equal to 2.99 times the amount of the
executive's base salary and bonus paid by the Company and its subsidiaries to
the executive during the twelve (12) months prior to termination or, if
higher, the twelve (12) months prior to the Change of Control. The Executive
Severance Agreements also include certain fringe benefits to which each
executive would have been entitled if the executive had remained in the
employment of the Company and a supplemental benefit based on the Company's
pension plan, which benefit is payable in a series of cash payments. The
Executive Severance Agreements also provide that, if any payment to which the
executive is entitled would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code, then the Company will pay to the executive
an additional amount so that the net amount retained by the executive is equal
to the amount that otherwise would be payable to the executive if no such
excise tax had been imposed.
On June 1, 1999, the Company and Friede Goldman International, Inc., a
Mississippi corporation ("Friede Goldman"), entered into an Agreement and Plan
of Merger (the "Merger Agreement"). Pursuant to the Merger Agreement, the
Company may merge with and into Friede Goldman (the "Merger") and upon
consummation of any such Merger, Friede Goldman will be the surviving
corporation.
Consummation of the Merger is subject to various conditions, including the
expiration or termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the approval of the Merger
by the stockholders of the Company and of Friede Goldman. The Merger, should
it be consummated, would constitute a Change of Control, under the Executive
Severance Agreements.
Report of the Compensation Committee on Executive Compensation
The following report is submitted by the Compensation Committee for
inclusion in this proxy pursuant to the rules of the Securities and Exchange
Commission with respect to Executive Compensation:
The Compensation Committee (the "Committee"), subject to direction from the
Board of Directors, determines the general compensation policies of the
Company, determines the compensation to be paid to certain officers and
certain other persons in senior management positions and administers the
Company's Stock Option Plan. The Committee is composed of four independent,
non-employee directors.
Philosophy of Compensation
The objectives of the Company's compensation policies are (i) to attract and
retain the best possible executive talent, (ii) to motivate executives to
achieve the Company's goals, (iii) to link the executive and stockholder
interests through performance rewards, and (iv) to provide a compensation that
appropriately recognizes individual and corporate contributions. The
Committee's compensation programs are designed to make a substantial component
of each executive's potential compensation dependent upon improving the
profitability of the Company. The Committee will do this by providing
incentives to achieve short-term and long-
10
<PAGE>
term objectives and by rewarding exceptional performance and accomplishments.
The Committee engages outside compensation consultants to assist the Committee
in determining appropriate levels of compensation.
Types of Compensation
The Company provides two main types of compensation:
(1) Annual compensation, consisting generally of a base salary and an
incentive bonus payable only when profits for the year meet specified
target levels; and
(2) Long-term compensation, consisting primarily of stock options,
deferred compensation and other long-term incentive awards. The value of
these awards are directly related to an increase in the value of a share of
the Company's Common Stock.
Annual Compensation
At least once each year, the Committee reviews the Company's executive
compensation program. The Committee predetermines, for each executive, a base
salary and an incentive bonus formula. The annual base salary of each
executive is determined by a number of factors, including position in the
Company, the executive's duties and responsibilities, the executive's past and
expected future financial and other performance, the executive's leadership
ability, initiative, development of a team spirit, adaptability in a rapidly
changing competitive environment, strategic decisions, relative position in
the salary structure of the Company and information relating to compensation
paid to other executive officers in similar positions. The Committee accepts a
recommendation from the Company's Chief Executive Officer but exercises its
own judgment and makes its own determination. A competitive base salary is
consistent with the Company's long-term business objectives of attracting and
retaining highly qualified, competent executives.
The incentive bonus is particularly aligned with the interests of the
Company's stockholders. The incentive bonuses as paid to executives in fiscal
1999, including the Company's Chief Executive Officer, were based upon the
achievement of predetermined goals. The formula was based upon a percentage of
base salary in relation to the Company's financial performance for the year.
The maximum incentive bonus is limited to a percentage of base salary.
Long-Term Compensation
The Company has adopted the Stock Option Plan, which permits the Committee
to make the following types of awards: (1) stock options, including incentive
stock options; (2) stock appreciation rights, in tandem with stock options or
freestanding, (3) restricted stock; (4) performance awards; (5) dividend
equivalent rights, in tandem with other awards or freestanding; and (6) other
awards based on, payable in, or otherwise related to the Common Stock of the
Company. Stock options were awarded but the Committee made no other type of
award in fiscal 1999.
The Committee considers stock options to be an important part of the
Company's long-term incentive program. The employees who are awarded stock
options gain only when the Company's stockholders gain--when the value of a
share of Common Stock increases. The Committee believes that stock options
come closer to aligning stockholder and executive interests than almost any
other type of long-term incentive compensation that the Committee can award at
this time. The number of shares for which options were granted in fiscal 1999
to the Chief Executive Officer and to next four most highly compensated
executive officers are set forth in the table, "Option Grants in the Last
fiscal Year" contained in this proxy.
Compensation of Chief Executive Officer in Fiscal 1999
Mr. Dane's base salary for fiscal 1999 was $553,334 and, under a
predetermined formula as a percentage of salary based upon profits of the
Company for the fiscal year, he earned a bonus of $282,150 which is to be
11
<PAGE>
paid upon the earlier of June 15, 2000, if still employed by the Company, or
upon a change of control of the Company. The terms of the incentive formula
for Mr. Dane limit his maximum incentive bonus in any particular year to two
hundred percent (200%) of his base salary. Mr. Dane also earned $83,548 under
a deferred compensation plan which provides that an amount equal to ten
percent (10%) of his annual base salary and incentive compensation be
contributed to his account in the Company's non-qualified deferred
compensation plan. The amount in his deferred account will be paid to him in
accordance with the terms of the plan.
Policy on Deductibility of Compensation
Section 162(m) of the Internal Revenue Code of 1986 limits the deductibility
for federal income taxes of compensation in excess of $1 million paid to a
publicly held company's chief executive officer and any of the other four
highest-paid executive officers, except for "performance-based" compensation.
The Committee is aware of this limitation and intends to consider the effects
of Section 162(m) on the Company when making compensation decisions.
Compensation Committee Kenneth W. Lewis, Chairman
Angus R. Cooper II, Member
Burt J. Keenan, Member
Barry J. Galt, Member
Compensation Committee Interlocks and Insider Participation
At the Company's initial public offering in September 1996, the Board
appointed a Compensation Committee, composed of Messrs. Kenneth W. Lewis and
Rick S. Rees, the only directors at that time who were not employees of the
Company or of Trinity, and decisions of the Committee were subject to the
approval of the Chairman and Chief Executive Officer of Trinity. In April
1997, after the Company's separation from Trinity and the resignation of those
members of the Company's Board then employed by Trinity, the Board named
Messrs. Lewis, Keenan and Cooper to its Compensation Committee, and in fiscal
1998, Mr. Galt was added to the Committee after his election to the Board. No
member of the Compensation Committee is or was a current or former officer or
employee of the Company and no Company executive officer serves as a director
or member of the compensation committee of any entity in which a Company
director or executive officer is a director or executive officer.
12
<PAGE>
Performance Graph
The following graph shows a comparison of cumulative return (assuming
reinvestment of any dividends) for the Company, the S&P Small Cap 600 Index and
a peer group composed of Avondale Industries, Inc., Friede Goldman Intl., Inc.,
Gulf Island Fabrication, Inc., McDermott Incorporated and Unifab International.
Since there is no widely recognized standard industry group comprising the
Company and peer companies, the peer groups are composed of companies which
have one or more products that compete with products of the Company and are
believed by the Company to be companies that analysts frequently use to compare
with an investment in the Company. The information contained in this table was
compiled by Research Data Group.
<TABLE>
<CAPTION>
% Peer Group
Weighted Cumulative Total Return Market Cap
--------------------------------------- ------------
September 27, March March March March 31,
1996 1997 1998 1999 1999
------------- ----- ----- ----- ------------
<S> <C> <C> <C> <C> <C>
Peer Group Weighted Average: 100 85 147 103 100%
Avondale Inds Inc 100 95 159 163 13.29%
Friede Goldman Intl Inc 100 244 135 22.55%
Gulf Is Fabrication Inc 100 220 125 6.86%
J Ray McDermott 100 83 145 103 54.48%
Unifab Intl Inc 100 48 22 2.82%
</TABLE>
13
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE
ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who own more than ten percent (10%)
of the Company's Common Stock to file initial reports of ownership and changes
in ownership with the Securities and Exchange Commission ("SEC"). These
reports are also filed with the American Stock Exchange and a copy of each
report is required to be furnished to the Company.
Additionally, SEC regulations require that the Company identify any
individuals for whom one of the referenced reports was not filed on a timely
basis during the most recent fiscal year. To the Company's knowledge, based
solely on review of reports furnished to it and written representations that
no other reports were required during and with respect to the fiscal year
ended March 31, 1999, each individual who was required to file such reports
during the fiscal year complied with the applicable filing requirements.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
With John Dane III, Chairman, President and Chief Executive Officer
Mr. Dane acquired 25% of the stock of United States Marine, Inc. ("USMI") in
June 1996 with a commitment to acquire up to an additional 50% over the next
five years. USMI performs services for the Company as a subcontractor with
respect to the production of high speed composite vessels for the U.S. Navy,
and the Company paid USMI approximately $5.7 million during fiscal 1999 for
subcontractor services. The Company believes that the terms on which the
Company has been supplied subcontractor services by USMI were at least as
favorable as those which could have been obtained by the Company in arm's-
length transactions with unrelated parties. To the extent that the Company
does business with USMI, such transactions have been and will continue to be
subject to review procedures recommended by the Company's auditors and adopted
by the Audit Committee of the Company's Board of Directors. During fiscal
1999, the Company also paid to entities owned fifty percent (50%) by Mr. Dane,
a total of $16,400 in lease payments for real and personal property. This
rental ceased in December 1998.
With Rick S. Rees, Executive Vice President, Chief Financial Officer and
Director
The Company, during fiscal 1999, purchased products in the aggregate of
$602,977 from Southeastern Pump and Compressor, Inc., an industrial
distribution company, in which Mr. Rees owned an 18.6% interest. Mr. Rees
disposed of his interest in this entity in April 1999.
With Daniel J. Mortimer, Former Executive Vice President, Chief Operating
Officer and Former Director
During fiscal 1999, the Company leased certain equipment and purchased
certain materials from Gulf Coast Industries, Inc. ("GCI"), a company 50%
percent owned by Mr. Mortimer, making payments totalling $166,800. During
fiscal 1998, GCI acquired Cajan Wire, Inc., which, from time to time, is a
vendor to the Company. During fiscal 1999, the Company purchased goods or
services from Cajan Wire totaling $1.2 million. Mr. Mortimer also owns 50% of
an entity which owns an aircraft; during fiscal 1999, the Company paid such
entity $38,390 for use of the aircraft.
In April 1998, Mr. Mortimer received a payment of $250,000 in respect of a
non-compete covenant. Such non-compete covenant related to the preservation of
goodwill of Gulf Coast Fabrication, Inc., which was acquired by a predecessor
of the Company from Mr. Mortimer and another person in 1994.
The Audit Committee of the Board of Directors of the Company is currently
conducting an investigation into various matters relating to the Company's
Gulf Coast Fabrication Shipyard and certain activities of Mr. Mortimer and
affiliated persons and entities, including Mr. Mortimer's relationship to Gulf
Coast Coatings, LLC, and Mississippi Coatings, LLC and those entity's business
relationships with the Company. Gulf Coast Coatings, LLC and Mississippi
Coatings, LLC invoiced the Company in the aggregate amount of approximately
$6.9 million during the period July 1996 through December 1998. Mr. Mortimer
resigned his position as an executive officer of the Company in May 1999 and
resigned his position as a director in June 1999.
14
<PAGE>
With The Independent Auditors
Ernst & Young LLP, independent auditors, or a predecessor of that firm, were
the auditors of Trinity Industries, Inc. for many years and are the
independent auditors of the accounts of the Company for its fiscal year ended
March 31, 1999. It is anticipated that representatives of Ernst & Young LLP
will be present at the 1999 Annual Meeting; will have the opportunity to make
a statement, if they so desire; and will be available to respond to
appropriate questions raised at the 1999 Annual Meeting or submitted to them
in writing before the 1999 Annual Meeting.
Ernst & Young LLP has informed the Company that it does not have any direct
financial interest in the Company and that it has not had any direct
connection with the Company in the capacity of promoter, underwriter,
director, officer or employee.
Under certain agreements entered into with Trinity Industries, Inc. in
connection with the Company's initial public offering on September 26, 1996,
for a period of three (3) years, the Company agreed to retain Ernst & Young
LLP as its auditing firm. Such agreement expires on September 26, 1999;
however, it is the intention of the Company to maintain the appointment of
Ernst & Young LLP as its independent auditors for the balance of fiscal 2000.
OTHER MATTERS
Management of the Company is not aware of other matters to be presented for
action at the 1999 Annual Meeting; however, if other matters are presented, it
is the intention of the persons named in the accompanying form of proxy to
vote in accordance with their judgment on such matters.
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Stockholders' proposals to be presented at the 2000 Annual Meeting of
Stockholders, for inclusion in the Company's proxy statement and form of proxy
relating to that meeting, must be received by the Company at its offices in
Gulfport, Mississippi, addressed to the Secretary of the Company, not later
than February 26, 2000. Upon timely receipt of any such proposal, the Company
will determine whether or not to include such proposal in the proxy materials
for the 2000 Annual Meeting, all in accordance with applicable regulations and
provisions governing the solicitation of proxies.
PLEASE SIGN, DATE, AND RETURN YOUR PROXY PROMPTLY TO AVOID UNNECESSARY
EXPENSE. ALL STOCKHOLDERS ARE URGED, REGARDLESS OF THE NUMBER SHARES OWNED, TO
PARTICIPATE IN THE 1999 ANNUAL MEETING BY RETURNING THEIR PROXY IN THE
ENCLOSED BUSINESS REPLY ENVELOPE.
By Order of the Board of Directors
JOHN DANE III
Chairman, President and Chief
Executive Officer
Gulfport, Mississippi
July 7, 1999
15
<PAGE>
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
[ ]
(1) Election of two (2) Directors: FOR all nominees [X] WITHHOLD AUTHORITY to vote [X] *EXCEPTIONS [X]
listed below for all nominees listed
below.
Nominees: Mr. Angus R. Cooper II and Mr. Burt H. Keenan.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the "Exceptions" box and strike a line through
that nominee's name.)
(2) In their discretion on such other matters as may properly come before the meeting.
Change of Address and [X]
or Comments Mark Here
Please sign exactly as your name appears on the proxy. If
your stock is jointly owned, both parties must sign.
Fiduciaries and representatives should so indicate when
signing, and when more than one is named, a majority
should sign. If signed by a corporation, the seal should be
affixed.
Dated: ____________________________________________________
|
| ___________________________________________________________
| Signature
__________|
___________________________________________________________
Signature
Votes must be indicated
(x) in Black or Blue Ink. [ ]
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGES REQUIRED.
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
HALTER MARINE GROUP, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS -- August 10, 1999
The undersigned hereby appoints Mr. Rick S. Rees and Mr. Kenneth W. Lewis and each of them, with full power of substitution,
as the attorneys, agents and proxies of the undersigned to vote as directed on the reverse side hereof the shares of stock which the
undersigned would be entitled to vote, if personally present, at the Annual Meeting of Stockholders of Halter Marine Group, Inc. to
be held at the Great Southern Club, One Hancock Plaza, Suite 1112, Gulfport, Mississippi 39501, on Tuesday, August 10, 1999 at
9:00 a.m. Central Daylight Time, and at any adjournment or adjournments thereof. Either of the above proxies present, in person or
by substitution, at such meeting or at any adjournment thereof, so present and voting, either in person or by substitution, shall
exercise all of the powers hereby given. The undersigned hereby revokes any proxy or proxies heretofore given to vote upon or act
with respect to such shares of stock and hereby ratifies and confirms all that said proxies, their substitutes, or any of them, may
lawfully do by virtue hereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED. IF NO DIRECTION IS MADE. THIS PROXY WILL BE VOTED
FOR EACH OF THE NAMED NOMINEES FOR DIRECTOR.
(Continued and to be marked, dated and signed on reverse side)
HALTER MARINE GROUP, INC.
P.O. BOX 11417
NEW YORK, N.Y. 10203-0417
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</TABLE>
