SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
Trailer Bridge, Inc.
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(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)(1) and 0-11.
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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:
[_] Fee paid previously with preliminary materials:
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[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
TRAILER BRIDGE, INC.
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Trailer Bridge, Inc.:
The Annual Meeting of Stockholders of Trailer Bridge, Inc. a Delaware
corporation (the "Company"), will be held at the company's facility at 10405 New
Berlin Road East, Jacksonville, Florida 32226 at 1:00 P.M. Jacksonville time on
Wednesday, May 17, 2000 for the following purposes:
(1) To elect five directors of the Company to hold office until the next
annual meeting of stockholders; and
(2) To transact such other business as may properly be presented at the
Annual Meeting or any adjournment thereof.
A proxy statement with respect to the Annual Meeting accompanies and forms
a part of this Notice. The Company's Annual Report to Stockholders for the
fiscal year ended December 31, 1999 also accompanies this Notice.
The Board of Directors has fixed the close of business on March 31, 2000,
as the record date for determining stockholders entitled to notice of, and to
vote at, the Annual Meeting and at any adjournments or postponements thereof.
Each holder of shares of the Company's Common Stock is entitled to one (1) vote
for each share of Common Stock held on the record date.
By order of the Board of Directors,
WILLIAM G. GOTIMER, JR.
Secretary and General Counsel
Jacksonville, Florida
April 20, 2000
PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING.
<PAGE>
TRAILER BRIDGE, INC.
10405 NEW BERLIN ROAD EAST
JACKSONVILLE, FLORIDA 32226
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Trailer Bridge, Inc., a Delaware corporation (the
"Company"), of proxies for use at the 2000 Annual Meeting of Stockholders of the
Company to be held on Wednesday, May 17, 2000, and any adjournment thereof (the
"Annual Meeting"). This Proxy Statement and accompanying form of proxy are first
being sent to stockholders on or about April 20, 2000.
The Company's common stock, $.01 par value (the "Common Stock") is the only
issued and outstanding class of stock. Only stockholders of record at the close
of business on March 31, 2000 (the "Record Date"), are entitled to notice of and
to vote at the Annual Meeting. As of the Record Date, the Company had 9,777,500
shares of Common Stock outstanding and entitled to vote.
VOTING RIGHTS AND PROCEDURES
Shares represented by an effective proxy given by a stockholder will be
voted as directed by the stockholder. If a properly signed proxy form is
returned to the Company and is not marked, it will be voted in accordance with
the recommendation of the Board of Directors on all proposals. A stockholder
giving a proxy may revoke it at any time prior to the voting of the proxy by
giving written notice to the Secretary of the Company, by executing a later
dated proxy or by attending the Annual Meeting and voting in person.
Each share of Common Stock is entitled to one (1) vote. The holders of
Shares having a majority of the votes which could be cast by the holders of all
Shares, present in person or represented by proxy, will constitute a quorum at
the Annual Meeting. Abstentions will be treated as Shares that are present and
entitled to vote for purposes of determining the presence of a quorum, but as
not present or represented at the Annual Meeting for purposes of determining the
approval of any matter submitted to the stockholders for a vote. If a broker
indicates on the proxy that it does not have discretionary authority as to
certain Shares to vote on a particular matter, those Shares will not be
considered as present and entitled to vote with respect to that matter. M. P.
McLean owns 5,338,000 shares of Common Stock. Consequently, M. P. McLean
controls approximately 55% of the voting power of the Company on all matters
presented for stockholder action.
Directors are elected by a plurality of the votes present in person or
represented by proxy at the Annual Meeting and entitled to vote for the election
of directors, provided a quorum is present. Stockholders are not allowed to
cumulate their votes in the election of directors. Shares represented at the
Annual Meeting in person or by proxy but withheld or otherwise not cast for the
election of directors will have no effect on the outcome of the election.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the election inspectors appointed for the meeting and such election inspectors
will determine whether or not a quorum is present.
The Board of Directors knows of no matters to be presented at the Annual
Meeting other than those set forth in the Notice of 2000 Annual Meeting of
Stockholders enclosed herewith. However, if any other matters do come before the
meeting, it is intended that the holders of the proxies will vote thereon in
their discretion. Any such other matter will require for its approval the
affirmative vote of the holders of Common Stock having a majority of the votes
present in person or represented by proxy at the Annual Meeting, provided a
quorum is present, or such greater vote as may be required under the Company's
Certificate of Incorporation, the Company's By-laws or applicable law. A list of
stockholders as of the record date will be available for inspection at the
Annual Meeting and for a period of ten days prior to the Annual Meeting at the
Company's offices in Jacksonville.
ELECTION OF DIRECTORS
The number of directors of the Company, as determined by the Board of
Directors under Article III of the Company's By-laws, is currently five. Each
director holds office until his or her successor is elected and qualified or
until his or her earlier death, resignation, retirement, disqualification or
removal.
The nominees for whom the enclosed proxy is intended to be voted are set
forth below. Each nominee for election as director currently serves as a
director of the Company. Charles R. Cushing joined the Board of Directors by
election of the Board of Directors on January 6, 2000. It is not contemplated
that any of these nominees will be unavailable for election, but if such a
situation should arise, the proxy will be voted in accordance with the best
judgment of the proxy holder for such person or persons as may be designated by
the Board of Directors.
1
<PAGE>
Nominees for Election as Directors
Business Experience During the Past Five Years
Name Age and Other Information
- ---- --- ----------------------------------------------
M.P. McLean 86 Mr. McLean, a director since April 1991, is the
founder and principal stockholder of Trailer Bridge.
His principal business activity during the past five
years has related to developing Trailer Bridge. He
served as President from June 1991 to July 1992 and
from January 1995 to November 1995. Mr. McLean is a
pioneer in transportation who is responsible for a
number of innovations in both trucking and shipping
and who is best known as the founder of container
shipping. He built McLean Trucking Company into one
of the largest and most profitable trucking companies
in the U.S., where it was the first major user of
diesel engines in its tractors. In the mid-1950's, he
purchased two steamship companies which were combined
to form Sea-Land Service, Inc. ("Sea-Land") which
introduced and developed container shipping.
Following the sale of Sea-Land in 1968, Mr. McLean
went on to found McLean Industries whose principal
subsidiary, U.S. Lines, became the largest container
shipping company in the world. His business
accomplishments led to his induction in the Fortune
Magazine Business Hall of Fame, and he was referred
to by a leading business magazine as "one of the few
men who changed the world."
John D. McCown 45 Mr. McCown, a director since April 1991, has served
as the Chairman of the Board and Chief Executive
Officer since November 1995. From July 1992 to
November 1995, Mr. McCown was Vice President of the
Company. In addition to his role at Trailer Bridge,
he is President and Chief Executive Officer of
Kadampanattu Corp., an affiliate of Trailer Bridge
that owns two vessels now utilized by Trailer Bridge
in its present Puerto Rico service. Mr. McCown has
worked for Malcom P. McLean in various capacities
since 1980. Mr. McCown is a graduate of Harvard
Business School (MBA, 1980) and Louisiana State
University (BBA, 1975). Mr. McCown also serves on
the Audit Committee.
Kenneth G. Younger 74 Mr. Younger, a director since September 1997, is the
former Chairman and Chief Executive Officer of
Carolina Freight Corporation, a position he held from
1977 to 1990 and 1993-1994. Prior to joining
Carolina Freight Corporation, a large less-than-
truckload trucking concern, in 1970, Mr. Younger held
various management positions with Sea-Land Services.
Mr. Younger also serves on the board of directors of
Kenan Transport Company. Mr. Younger serves on both
the Compensation and Audit Committees.
Artis E. James 53 Mr. James, a director since September 1997, is the
President and Chief Executive Officer of Purcell Co.,
Inc., a real estate development company with
properties in the southeastern U.S. Mr. James has
held that position since 1979. Purcell Co., Inc. is
a subsidiary of a company where M. P. McLean is the
majority stockholder. Mr. James serves on both the
Compensation and Audit Committees.
Charles R. Cushing 64 Mr. Cushing, a director since January 2000, is the
President of C. R. Cushing & Co., Inc., an
international firm of naval architects and marine
engineers, since 1968. From 1961 to 1968 Mr. Cushing
was Chief Naval Architect for Sea-Land Service, Inc.
Mr. Cushing is founder and a principal in Oiltest,
Inc., a firm providing testing and inspection
services throughout the world.
The Board of Directors recommends that the stockholders vote FOR the
election of each nominee for director named above. Because M. P. McLean, the
owner of approximately 55% of the outstanding Common Stock, intends to vote for
the election of each nominee for director named above, such election is assured.
2
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
Executive officers of the Company serve at the will of the Board of
Directors. The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
John D. McCown................................. 45 Chairman of the Board and Chief Executive Officer
Ralph W. Heim.................................. 53 President and Chief Operating Officer
David A. Miskowiec............................. 52 Vice President of Sales
J. Edward Morley............................... 52 Vice President of Operations
Mark A. Tanner................................. 48 Vice President of Administration and Chief
Financial Officer
Robert van Dijk................................ 53 Vice President of Pricing
Michael J. McGeehan............................ 41 Vice President of Truck Operations
William G. Gotimer, Jr......................... 40 Secretary and General Counsel
</TABLE>
Mr. Heim has served as President since November 1995 and Chief Operating
Officer since January 1992. From May 1991 until November 1995, Mr. Heim served
as Vice President of the Company. Prior to joining Trailer Bridge in 1991, Mr.
Heim worked at Crowley Maritime Corporation for five years in various operating
capacities primarily related to its Puerto Rico service. His other
transportation experience includes more than 15 years with Sea-Land, Puerto Rico
Marine Management and U.S. Lines in diverse domestic and international
assignments. Mr. Heim graduated from Jacksonville University with a B.S. in
Business Management.
Mr. Miskowiec has served as Vice President of Sales since November 1998.
Prior to joining Trailer Bridge in 1997, Mr. Miskowiec worked at Crowley
American Transport where he held a variety of sales and management positions.
From 1994 until 1997 he served as Director of Corporate Accounts, Director of
Puerto Rico Trade and Area Manager Commodity Sales for Crowley American
Transport. Mr. Miskowiec graduated from the University of Minnesota with a B.A.
in Political Science.
Mr. Morley has served as Vice President of Operations since July 1992 and
is responsible for marine and terminal operations. Prior to joining Trailer
Bridge in 1991, Mr. Morley was with Sea-Land where he was responsible for
operations in Puerto Rico from 1990 to 1991. Mr. Morley's overall transportation
experience with major container transportation companies spans over 25 years.
Mr. Tanner, a CPA, has served as Vice President of Administration and Chief
Financial Officer since January 1992. Mr. Tanner joined Trailer Bridge in 1991
from Crowley Maritime where he was Manager of Analysis and Statistics for four
years. His prior experience includes three years as Manager of Corporate
Planning for The Charter Company, which was a Jacksonville based $5 billion
publicly-held company, and five years in public accounting.
Mr. van Dijk has served as Vice President of Pricing since July 1992 and
directs all pricing related activities. Prior to joining Trailer Bridge in
1991, Mr. van Dijk worked for Crowley Maritime, where he directed pricing for
the Puerto Rico service. Mr. van Dijk's pricing related experience includes
over 30 years with American Transport, U.S. Lines, Weyerhauser Shipping,
Sea-Land and Holland America Lines.
Mr. McGeehan has served as Vice President of Truck Operations since October
1998. Prior to joining Trailer Bridge in 1998, Mr. McGeehan worked for Wal-Mart
Stores where he was responsible for transportation operations at various
locations from 1992 to 1998. Mr. McGeehan's experience prior to his position at
Wal-Mart Stores included positions at TNT Red Star Express between 1983 and
1992. Mr. McGeehan graduated from Longwood College with a BS degree in business
administration.
Mr. Gotimer has served as General Counsel since 1991. Mr. Gotimer also acts
as legal counsel for Malcom P. McLean, including General Counsel for
Kadampanattu Corp. His previous experience includes legal counsel with British
Airways, Plc., Pan American World Airways and McLean Industries. Mr. Gotimer
has an LL.M. degree in Taxation from New York University School of Law and both
a JD and BS degree in accounting from St. John's University.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors has both an Audit Committee and a Compensation
Committee. The Board of Directors does not have a Nominating Committee. During
the fiscal year ended December 31, 1999, the Board of Directors met four times
and the Audit and Compensation Committees met once. During 1999, all directors
attended 100% of the meetings of the Board of Directors and of the committees
thereof on which they served.
3
<PAGE>
The duties of the Audit Committee are to oversee the Company's internal
control structure; review the Company's financial statements and other financial
information to be included in the Company's 10-K and annual report to
stockholders; select the independent auditors for the Company; and review the
Company's annual audit plan. The members of the Audit Committee are Messrs.
McCown, Younger and James.
The duties of the Compensation Committee are to make recommendations to the
Board of Directors concerning the salaries of the Company's officers; to
exercise the authority of the Board of Directors concerning the Company's 1997
Incentive Stock Plan; and to advise the Board of Directors on other compensation
and benefit matters. The members of the Compensation Committee are Messrs.
Younger and James.
OWNERSHIP OF THE CAPITAL STOCK OF THE COMPANY
The following table sets forth information with respect to the number of
shares of Common Stock beneficially owned by (i) each director of the Company,
(ii) the executive officers of the Company named in the table under
"Compensation of Directors and Executive Officers-- Summary Compensation Table,"
(iii) all directors and executive officers of the Company as a group, and (iv)
based on information available to the Company and a review of statements filed
with the Commission pursuant to Section 13(d) and 13(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), each person that owns
beneficially (directly or together with affiliates) more than 5% of the Common
Stock as of December 31, 1999. The Company believes that each individual or
entity named has sole investment and voting power with respect to shares of the
Common Stock indicated as beneficially owned by them, except as otherwise noted.
<TABLE>
<CAPTION>
Number (1)
Name Shares Percentage
---- ---------- ----------
<S> <C> <C>
Malcom P. McLean(1)(3)........................................... 5,338,000 55.6%
John D. McCown(1)(3)............................................. 1,408,800 14.4%
Ralph W. Heim(2)................................................. 106,550 1.6%
Mark A. Tanner(2)................................................ 37,210 .4%
J. Edward Morley(2).............................................. 32,210 .3%
Robert Van Dijk(2) ........................................... 31,210 .3%
Artis E. James................................................... 10,000 .1%
Kenneth G. Younger............................................... 3,000 .1%
Charles R. Cushing............................................... 0 0%
Clara L. McLean(3)............................................... 1,334,500 13.6%
All Directors and Executive Officers As A Group.................. 5,701,976 58.3%
</TABLE>
(1) Includes 1,334,500 shares subject to immediately exercisable options
granted by Malcom P. McLean to Mr. McCown in February 1994 and May 1997.
(2) Shares subject to options granted in July 1997; January 1998 and March 1999
under the Company's Incentive Stock Plan that become exercisable 20% per year
beginning on the first anniversary of the grant. Only presently exercisable
shares are included.
(3) The address of each individual is 660 Madison Avenue, 10th Floor, New York,
New York 10021.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the Commission initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors, and greater than
ten-percent stockholders are required by Commission regulation to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the Company's 1999 fiscal year all applicable
Section 16(a) filing requirements were complied with by the officers, directors,
and greater than ten-percent beneficial owners.
4
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Summary Compensation Table
The following table sets forth a summary of the annual, long-term, and
other compensation for services rendered to the Company for the fiscal years
ended December 31, 1997; December 31, 1998 and December 31, 1999 paid or awarded
to those persons who were, at December 31, 1999: (i) the Company's chief
executive officer, and (ii) the Company's four most highly compensated executive
officers other than the chief executive officer (collectively, including the
Company's chief executive officer, the "Named Executive Officers").
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Annual Compensation Compensation
Other Annual Options/ All Other
Name and Salary Bonus Compensation SARs Compensation
Principal Position Year ($) ($) ($) (#) ($)(2)
- ------------------ ---- ------ ----- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
John D. McCown (3) 1999 262,500 -- -- -- 1,300
Chairman of the Board and 1998 262,500 2,082 -- -- 1,005
CEO 1997 260,443 64,231 -- -- 8,529,096(1)
Ralph W. Heim 1999 165,000 -- -- 48,000 5,899
President and 1998 165,000 3,597 -- 40,000 6,413
Chief Operating Officer 1997 165,000 110,945 -- 137,375 6,113
J. Edward Morley 1999 112,070 -- -- 24,000 2,221
Vice President of 1998 112,070 2,082 -- 15,000 5,803
Operations 1997 112,070 64,231 -- 51,025 3,390
Robert Van Dijk 1999 108,724 -- -- 24,000 4,236
Vice President of 1998 108,724 2,082 -- 15,000 5,701
Pricing 1997 108,724 64,231 -- 51,025 4,417
Mark A. Tanner 1999 108,000 -- -- 24,000 3,939
Vice President of 1998 108,000 2,082 -- 20,000 5,337
Administration & CFO 1997 108,000 64,231 -- 51,025 4,008
</TABLE>
(1) Representing the difference between the exercise price and the initial
public offering price on shares granted by the majority stockholder of the
Company. In connection with this option, the Company recorded a non-recurring,
non-cash charge for compensation expense and a credit to paid in capital in the
same amount. This option does not involve the issuance of additional shares of
Common Stock and therefore any subsequent purchase of shares under the option
will not have a dilutive effect on the Company's book value or earnings per
share amounts.
(2) Represents the Company's matching contribution to the Company's Section
401(k) deferred compensation plan and excess group life insurance premiums
respectively, as follows: In 1997 Mr. McCown, $0 and $425; Mr. Heim, $4,500 and
$1,613; Mr. Morley, $3,120 and $270; Mr. van Dijk, $3,452 and $964; and Mr.
Tanner, $3,431 and $578. In 1998 Mr. McCown, $0 and $1,005; Mr. Heim, $4,800 and
$1,613; Mr. Morley, $4,800 and $1,003; Mr. van Dijk, $4,737 and $964; and Mr.
Tanner, $4,759 and $578. In 1999 Mr. McCown, $0 and $1,300; Mr. Heim, $4,706 and
$1,193; Mr. Morley, $1,479 and $742; Mr. van Dijk, $3,523 and $713; and Mr.
Tanner, $3,501 and $438.
(3) In 1997 until the closing of the Company's public offering, Mr. McCown
provided services to the Company in connection with the Company's vessel charter
from its affiliate, Kadampanattu Corp. Commencing with the closing of the
initial public offering, Mr. McCown's compensation has been paid directly by the
Company and the Company's charter payments were reduced in a corresponding
amount.
5
<PAGE>
Option/SAR Grants In Last Fiscal Year
The following table summarizes the grants of stock options awarded to the
Named Executive Officers during the fiscal year ended December 31, 1999, under
the Company's Incentive Stock Plan.
<TABLE>
<CAPTION>
Individual Grants
----------------- Potential Realizable Value
% of at Assumed Annual Rates
Options/ Total of Stock Price Appreciation
SAR Options/ for Option Term (3)
Granted SARs Exercise Expiration ---------------------------
Name (#) Granted Price ($/sh)(1) Date(2) 5%($) 10%($)
---- -------- -------- --------------- ----------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
John D. McCown...... 0 0% n/a n/a 0 0
Ralph W. Heim....... 48,000 22.6% 2.25 03/23/09 $67,921 $172,124
Mark A. Tanner...... 24,000 11.3% 2.25 03/23/09 33,960 86,062
Robert Van Dijk..... 24,000 11.3% 2.25 03/23/09 33,960 86,062
J. Edward Morley.... 24,000 11.3% 2.25 03/23/09 33,960 86,062
</TABLE>
(1) The exercise price equals the price of the Common Stock on the date of
grant.
(2) The options were granted on March 23, 1999 and vest ratably over a
five-year period, expiring ten years after their grant date.
(3) The potential realizable dollar value of a grant is the product of: (a) the
difference between (i) the product of the per-share market price at the time of
the grant and the sum of 1 plus the stock appreciation rate compounded annually
over the term of the option (here, 5% and 10%), and (ii) the per-share exercise
price of the option, and (b) the number of securities underlying the grant at
fiscal year-end.
Aggregated Option/SAR Exercises In Last Fiscal Year and Fiscal Year-End
Option/SAR Values
The following table provides information concerning options exercised by
the Named Executive Officers during the fiscal year ended December 31, 1999, and
the value at December 31, 1999, of unexercised options under the Company's
Incentive Stock Plan.
<TABLE>
<CAPTION>
Number of Value ($) of
Unexercised Unexercised In-the-
Shares Options at Money Options at
Acquired December 31, 1999 December 31, 1999
on ----------------- -----------------
Exercise Value Exercisable/ Exercisable/
Name (#) Realized ($) Unexercisable Unexercisable
---- -------- ------------ ----------------- --------------------
<S> <C> <C> <C> <C>
John D. McCown 0 0 0/0 0/0
Ralph W. Heim 0 0 62,950/225,375 0/0
J. Edward Morley 0 0 23,410/ 90,025 0/0
Robert Van Dijk 0 0 23,410/ 90,025 0/0
Mark A. Tanner 0 0 24,410/ 95,025 0/0
</TABLE>
Compensation of Directors
Directors who are not employees of the Company receive an annual retainer
of $5,000 and $1,000 for each meeting of the Board of Directors or committee of
the Board of Directors attended by such director (if such committee meeting is
held other than on the day of a Board meeting), plus reimbursement of expenses
incurred in attending such meetings. Directors who are employees of the Company
do not receive additional compensation for such services.
6
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee approves the policies under which compensation
is paid or awarded to the Company's executive officers. The Compensation
Committee consists of the two independent members of the Board. The 1997
compensation structure was already determined when the Compensation Committee
assumed its responsibilities in September 1997.
Board of Directors Compensation Committee Philosophy & Description of
Compensation Programs
The Company's compensation philosophy is designed to link executive
performance to long-term stockholder value, connect pay with individual
performance, maintain a compensation system that is competitive with the
industry standards and attract and retain outstanding executives.
The Company's executive compensation program has three components--base
salary, annual incentives, and incentive stock plan options. Base salary and
annual incentives are primarily designed to reward current and past performance.
Long-term incentives are primarily designed to provide strong incentives for
long-term future Company growth.
In reviewing base salaries of senior management for 1999 and salary
compensation for 2000, including the salary of Mr. John D. McCown, the Company's
Chief Executive Officer, the Compensation Committee reviewed and considered (i)
compensation information disclosed by similarly-sized publicly held
transportation companies; (ii) the financial performance of the Company, as well
as the role and contribution of the particular executive with respect to such
performance and (iii) non-financial performance related to the individual
executive's contributions.
Base Salary: To attract and retain qualified executives, base salary is
determined using competitive criteria within the transportation industry. Salary
increases are based on individual performance and, to a lesser extent, trends
within the industry.
Annual Incentive: The Company's bonus plan recognizes and rewards
executives for taking actions that build the value of the Company, generate
competitive total returns for stockholders, and provide value-added solutions
for the Company's customers. Bonus compensation is based upon a point system
that allocates an overall bonus based upon Company performance. The allocation
of points under this system is based upon the subjective decision of the
compensation committee.
Incentive Stock Plan Options: The Company's Incentive Stock Plan Options
serve to reward executive performance that successfully executes the Company's
long-term business strategy and builds stockholder value. During fiscal year
1999, stock options were granted to the Company's executive officers in March.
The grants were designed to motivate each executive officer to continue the
Company's growth.
COMPENSATION COMMITTEE
Artis E. James
Kenneth G. Younger
Compensation Administration
The Compensation Committee will follow an annual cycle to administer each
of the three components of executive compensation. The integrity of the
Company's compensation program relies on an annual performance evaluation
process.
7
<PAGE>
Performance Graph
The following line graph compares the Company's cumulative total
stockholder return on its Common Stock since July 29, 1997, the date that the
Common Stock began trading, with the cumulative total return of the Nasdaq US
Index and the S & P Truckers Index. These comparisons assume the investment of
$100 on July 29, 1997 in each index and in the Company's Common Stock and the
reinvestment of dividends. The graph assumes that $100 of the Company's Common
Stock was purchased on July 29, 1997, at the initial public offering price of
$10.00 per share. The Company has paid no dividends since its inception. There
is no assurance that the Company's stock performance will continue into the
future with the same or similar trends depicted in the graph below. The Company
makes no predictions as to the future performance of its stock.
[Object omitted]
7/29/97 12/31/97 12/31/98 12/31/99
Trailer Bridge, Inc. (1) 100 88.75 15.31 12.50
Nasdaq US Index 100 99.16 139.39 251.82
S&P Truckers Index 100 111.47 92.29 88.95
(the "Peer Group")
(1) Based on the Company's initial public offering price of $10.00 per share
8
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CERTAIN TRANSACTIONS
The Company charters two roll-on/roll-off barge vessels and the right
to use a related ramp structure in San Juan, Puerto Rico from Kadampanattu Corp.
("K Corp"), which is wholly owned by Malcom P. McLean, the Company's founder,
controlling stockholder and a director. The charters currently provide for a per
vessel payment to K Corp of $10,050 per day and also require the Company to
maintain and repair the vessels and ramp. The charters expire at the later of
September 1, 2010 or the repayment of all obligations under K Corp's
construction loan for the 1996 mid-body expansion program. Such obligations are
scheduled to be repaid in quarterly installments ending June 30, 2003. Upon the
expiration of the charters, the Company has the option to extend the charters
for an additional eight years at $11,000 per day per vessel, or may purchase the
vessels at their then fair market value. Total expense under these charters from
K Corp was $7.5 million in 1999. The charter payments were increased from $5,000
per day per vessel in 1996 following completion of the mid-body expansion. In
the opinion of the Board of Directors, the terms of the charters are at least as
favorable as those that could be obtained from unaffiliated third parties.
In December 1998, the Jacksonville ramp structure suffered a casualty and
was rendered unusable and irreparably damaged. In 1999 the Jacksonville ramp
structure was removed and disposed of. Since the Company incurred significant
additional operating expenses due to the unavailability of the ramp structures
provided by Kadampanattu Corp., in December 1999, Kadampanattu Corp. reimbursed
the Company $3.7 million of such additional operating expenses. In return the
Company waived any claim it might have to insurance proceeds for the insured
value of the Jacksonville ramp structure. There will be no change in the charter
agreement between Kadampanattu Corp. and the Company due to the casualties to
the ramp structures.
The Company will continue a policy that any transactions with affiliated
persons or entities will be on terms no less favorable to the Company than those
that could have been obtained on an arms-length basis from unaffiliated third
parties.
AUDITORS
The Board of Directors has selected Deloitte & Touche LLP as the
independent accountant of the Company. Representatives of Deloitte & Touche LLP
will be present at the Annual Meeting and will be given the opportunity to make
a statement if they desire to do so. They will also be available to respond to
appropriate questions.
PROXY SOLICITATION EXPENSE
The expense of proxy solicitation will be paid by the Company. In addition
to the solicitation of proxies by use of the mails, solicitation also may be
made by telephone, telegraph or personal interview by directors, officers, and
regular employees of the Company, none of whom will receive additional
compensation for any such solicitation. The Company will, upon request,
reimburse brokers, banks, and similar organizations for out-of-pocket and
reasonable clerical expenses incurred in forwarding proxy material to their
principals.
STOCKHOLDER PROPOSALS
Proposals of stockholders must be received in writing by the Secretary of
the Company at the principal executive offices of the Company no later than
December 22, 2000, in order to be considered for inclusion in the Company's
proxy statement and form of proxy relating to the next annual meeting of
stockholders. The persons named in proxies solicited by the Company's Board of
Directors for the next annual Meeting may exercise discretionary voting power
with respect to any shareholder proposal which is not required to be included in
the Company's proxy statement and which is received later than March 6, 2001.
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OTHER MATTERS
The Board of Directors does not intend to present at the Annual Meeting any
matters other than those described herein and does not presently know of any
matters that will be presented by other parties. If any other matters properly
come before the Annual Meeting, it is intended that the accompanying proxy may
be voted on such matters in accordance with the views of management.
Each stockholder, whether or not he or she expects to be present in person
at the Annual Meeting, is requested to MARK, SIGN, DATE, and RETURN THE ENCLOSED
PROXY in the accompanying envelope as promptly as possible. A stockholder may
revoke his or her proxy at any time prior to voting.
By order of the Board of Directors,
WILLIAM G. GOTIMER, JR.
Secretary and General Counsel
Jacksonville, Florida
April 20, 2000
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PROXY
TRAILER BRIDGE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all previous proxies, hereby appoints JOHN D.
McCOWN and WILLIAM G. GOTIMER, JR., and each of them, proxies with power of
substitution to each, to vote and act at the annual meeting of common
shareholders of TRAILER BRIDGE, INC. to be held at the office of the Company,
10405 New Berlin Road East, Jacksonville, Florida 32226, on Wednesday, May 17,
2000 at 1:00 P.M., and at any adjournment thereof, on and with respect to the
Common Stock of the undersigned, or on and with respect to which the undersigned
is entitled to vote or act.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING, AND AT ANY ADJOURNMENT THEREOF.
IMPORTANT- TO BE SIGNED AND DATED ON THE REVERSE SIDE
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THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE HEREON. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE
VOTED FOR ITEM 1.
1. To elect five Directors:
Nominees: Charles R. Cushing, Artis E. James, John D. McCown,
Malcom P. McLean and Kenneth G. Younger
FOR WITHHELD
--------------------------------
For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
Please sign your name(s) exactly as it
appears hereon. If signing as attorney or
for estates, trusts or corporations,
title or capacity should be indicated.
PLEASE RETURN THIS PROXY PROMPTLY.
Signature:__________ Date:__________ Signature:__________ Date:__________
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