<PAGE>
===============================================================================
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 Section 240.14a-11(c) or Section 240.14a-12
FRIEDE GOLDMAN INTERNATIONAL 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:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] 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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
FRIEDE GOLDMAN INTERNATIONAL
[Logo of Friede
Goldman appears --------------------------------------------------------------
here] HOUSTON . NEW ORLEANS . JACKSON . PASCAGOULA
April 23, 1998
To Our Stockholders:
On behalf of the Board of Directors, I cordially invite all stockholders to
attend the 1998 Annual Meeting of Stockholders (the "Annual Meeting") of
Friede Goldman International Inc. (the "Company") to be held on Friday, May
15, 1998, at 9:00 a.m. at the Capital Club, Capital Towers, 19th Floor, 125 S.
Congress Street, Jackson, Mississippi 39201. Proxy materials, which include a
Notice of the Meeting, and proxy card, are enclosed with this letter.
At the Annual Meeting, the Stockholders of the Company will be asked to (i)
elect two directors to serve for three-year terms until the 2001 Annual
Meeting of Stockholders and (ii) ratify the appointment of Arthur Andersen LLP
as the Company's auditors for 1998. It is important that your shares be
represented at the Annual Meeting. Whether or not you plan to attend the
Annual Meeting, please complete, date, sign and return the enclosed proxy card
promptly in the enclosed postage paid envelope. If you attend the Annual
Meeting, you may revoke your proxy and vote in person if you wish, even though
you may have previously returned your proxy. If your shares are not registered
in your own name and you would like to attend the meeting, please ask the
broker, trust, bank or other nominee that holds the shares to provide you with
evidence of your share ownership.
Sincerely,
/s/ J. L. Holloway
J. L. Holloway
Chairman of the Board of Directors,
President and Chief Executive
Officer
<PAGE>
FRIEDE GOLDMAN INTERNATIONAL INC.
525 E. CAPITOL STREET, SUITE 402
JACKSON, MISSISSIPPI 39201
----------------
NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 15, 1998
----------------
TO THE STOCKHOLDERS:
The 1998 Annual Meeting of Stockholders of Friede Goldman International
Inc., (the "Company"), will be held at the Capital Club, Capital Towers, 19th
Floor, 125 S. Congress Street, Jackson, Mississippi 39201 at 9:00 a.m. on
Friday, May 15, 1998, for the following purposes:
1. To elect two Class I directors of the Company to hold office until the
third succeeding annual meeting of stockholders after their election
(the 2001 Annual Meeting) and until their respective successors shall
have been elected and qualified.
2. To ratify the selection of Arthur Andersen LLP as the Company's
independent certified public accountants to audit the Company's
consolidated financial statements for the fiscal year ending December
31, 1998.
3. Any and all matters incident to the foregoing, and such other business
as may legally come before the meeting and any adjournments or
postponements thereof.
The close of business on Tuesday, March 31, 1998 has been fixed by the Board
of Directors of the Company as the record date for the determination of
stockholders entitled to notice of and to vote at the Annual Meeting. We urge
you to sign and date the enclosed proxy and return it promptly by mail in the
enclosed envelope, whether or not you plan to attend the meeting in person. No
postage is required if mailed in the United States. If you do attend the
meeting in person, you may withdraw your proxy and vote personally on all
matters brought before the meeting.
By Order of the Board of Directors,
/s/ James A. Lowe, III
James A. Lowe, III
General Counsel and Secretary
<PAGE>
FRIEDE GOLDMAN INTERNATIONAL INC.
525 E. CAPITOL STREET, SUITE 402
JACKSON, MISSISSIPPI 39201
----------------
PROXY STATEMENT
----------------
1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 15, 1998
----------------
This statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Friede Goldman International Inc., a Delaware
corporation (the "Company"), for use at the Company's 1998 Annual Meeting of
Stockholders or any postponement or adjournment thereof (the "Annual Meeting")
to be held at the Capital Club, Capital Towers, 19th Floor, 125 S. Congress
Street, Jackson, Mississippi 39201 at 9:00 a.m. on Friday, May 15, 1998 for
those purposes set forth in the notice attached hereto. This Proxy Statement
and the accompanying proxy card are being mailed to stockholders on or about
April 23, 1998.
VOTING AND VOTE REQUIRED
The Board of Directors has fixed the close of business on Tuesday, March
31,1998 as the record date for the determination of stockholders entitled to
notice of and to vote at the Annual Meeting. At the close of business on the
record date, the Company had outstanding and entitled to vote 24,492,797
shares of its common stock, par value $.01 per share ("Common Stock"). There
are no other classes of voting securities of the Company outstanding. Each
share of Common Stock entitles the holder to one vote on each matter presented
at the Annual Meeting. A proxy will be voted in the manner specified on the
proxy, or if no manner is specified, it will be voted in favor of the
proposals set forth in the notice attached hereto.
The presence of the holders of a majority of the issued and outstanding
shares of Common Stock entitled to vote at the Annual Meeting, either in
person or represented by properly executed proxies, is necessary to constitute
a quorum for the transaction of business at the Annual Meeting. If there are
not sufficient shares represented in person or by proxy at the Annual Meeting
to constitute a quorum, the Annual Meeting may be postponed or adjourned in
order to permit further solicitation of proxies by the Company. Abstentions
are counted as "shares present" at the meeting for purposes of determining the
presence of a quorum while broker non-votes (which result when a broker
holding shares for a beneficial owner has not received timely voting
instructions on certain matters from such beneficial owner) are not considered
"shares present" with respect to any matter.
The election of directors will be determined by a plurality of the votes
cast by holders of shares of Common Stock. Cumulative voting for the election
of directors is not permitted. The approval of all other matters will require
the affirmative vote of holders of a majority of the shares present in person
or represented by duly executed proxy at the Annual Meeting and entitled to
vote on the subject matter. Accordingly, abstentions will have no effect on
the outcome of the election of directors but with respect to any other
proposal will operate to prevent the approval of such proposal to the same
extent as a vote against such proposal.
REVOCATION OF PROXY
Stockholders submitting proxies may revoke them at any time before they are
voted on by (i) notifying Mr. James A. Lowe, III, Secretary of the Company, in
writing of such revocation, (ii) by execution of a subsequent proxy sent to
Mr. Lowe, or (iii) by attending the Annual Meeting in person and giving notice
of revocation. Notices to Mr. Lowe referenced in (i) and (ii) should be
directed to Mr. James A. Lowe, III, Secretary, Friede Goldman International
Inc., 525 E. Capitol Street, Suite 402, Jackson, Mississippi 39201.
<PAGE>
SOLICITATION EXPENSES
The expense of preparing, printing and mailing proxy solicitation materials
will be borne by the Company. In addition to solicitation of proxies by mail,
certain directors, officers, representatives and employees of the Company may
solicit proxies by telephone and personal interview. Such individuals will not
receive additional compensation from the Company for solicitation of proxies,
but may be reimbursed for reasonable out-of-pocket expenses in connection with
such solicitation. Banks, brokers and other custodians, nominees and
fiduciaries also will be reimbursed by the Company for their reasonable
expenses for sending proxy solicitation materials to the beneficial owners of
Common Stock.
ELECTION OF DIRECTORS (PROPOSAL 1)
The Company's Amended and Restated Certificate of Incorporation provides for
three classes of directors as nearly equal in number as possible. The term of
office of Class I directors expires at the 1998 Annual Meeting, the term of
office of Class II directors expires at the 1999 Annual Meeting (i.e., one
year of the term remaining), and the term of office of Class III directors
expires at the 2000 Annual Meeting (i.e., two years of the term remaining).
The directors whose terms will expire at the 1998 Annual Meeting are John G.
Corlew and Raymond E. Mabus, Jr., each of whom has been nominated to stand for
reelection at the 1998 Annual Meeting to hold office until the 2001 Annual
Meeting and until their successors are elected and qualified.
NOMINEES FOR ELECTION
Class I , Terms Expiring at 2001 Annual Meeting
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR MESSRS. CORLEW AND MABUS AS
DIRECTORS TO HOLD OFFICE UNTIL THE 2001 ANNUAL MEETING AND UNTIL THEIR
SUCCESSORS ARE ELECTED AND QUALIFIED. THE SHARES OF COMMON STOCK REPRESENTED
BY RETURNED PROXY CARDS WILL BE VOTED FOR THE ELECTION OF THESE NOMINEES
UNLESS OTHERWISE SPECIFIED.
John G. Corlew has been a director of the Company since 1997. He is
currently a member of the firm Watkins & Eager, PLLC in Jackson, Mississippi
where he has practiced as an attorney since 1984.
Raymond E. Mabus, Jr. has been a director of the Company since 1997. He has
served as Of Counsel to the law firm of Baker, Donelson, Bearman & Caldwell
since October 1996. From July 1994 through May 1996, Mr. Mabus served as
Ambassador to the Kingdom of Saudi Arabia. From February 1992 through June
1994, Mr. Mabus served as Chairman of the Committee on the Future of the South
and as a consultant in the private sector. From January 1988 through January
1992, Mr. Mabus served as Governor of the State of Mississippi. Mr. Mabus also
serves as a director of the Kroll-O'Gara Company, a publicly traded company
which installs armor plating on vehicles.
INCUMBENT DIRECTORS
Class II--Terms Expiring at 1999 Annual Meeting
Jerome L. Goldman has been a director of the Company since 1997. He is
currently the Chairman and sole owner of J. L. Goldman Associates, Inc., naval
architects and marine engineers. Mr. Goldman previously served as Chairman of
Friede & Goldman, Ltd. since co-founding the company in 1949.
T. Jay Collins has been a director of the Company since 1997. He is
currently the Executive Vice President Oilfield Marine Services at Oceaneering
International, Inc., a position he has held since 1996. From 1993 to 1996, Mr.
Collins served as Senior Vice President and Chief Financial Officer of
Oceaneering International Inc. Prior to joining Oceaneering International
Inc., Mr. Collins spent six years at Teleco Oilfield Services, Inc., most
recently as Executive Vice President, Finance and Administration. Mr. Collins
received a BA and ME from Rice University and an MBA from Harvard University.
2
<PAGE>
Class III--Terms Expiring at 2000 Annual Meeting
Alan A Baker has been a director of the Company since 1997. He is the
retired Chairman of Halliburton Energy Services Group, a position he held from
1992 to 1995. He also served as the CEO of Halliburton Energy Services Group
from 1992 to 1993. Mr. Baker is member of the board of the Mid-Continent Oil
and Gas Association.
J. L. Holloway has served as the Chairman of the Board, Chief Executive
Officer and President of the Company since April 1997. In addition, Mr.
Holloway has served as the Chairman of the Board, Chief Executive Officer and
President of HAM Marine from its formation in 1982 until April 1997, and from
April 1997 Mr. Holloway has been the Chairman of the Board of HAM Marine. Mr.
Holloway also serves as a Director of Delta Health Group, a company that
operates and manages health care facilities in the South and as President of
State Street Properties, Inc., a commercial real estate development firm
headquartered in Mississippi.
Howell W. Todd has been a director of the Company since 1997. He has served
as President of Mississippi College since 1994. Dr. Todd previously served as
Executive Director and Chief Executive Officer of the South Dakota Board of
Regents, the governing board for the public higher education system in the
state of South Dakota. Dr. Todd holds a Ph.D. from the University of Illinois.
GENERAL INFORMATION WITH RESPECT
TO THE BOARD OF DIRECTORS
MEETINGS
During the year ended December 31, 1997, the Board of Directors held three
meetings. During 1997, each member of the Board of Directors attended at least
75% of the meetings of the Board of Directors and committees of the Board of
Directors of which such director was a member, other than Mr. Mabus, who was
not present at one meeting of the Board of Directors and one meeting of the
Audit Committee. The Board of Directors also acted eleven times by unanimous
written consent in 1997.
COMMITTEES OF THE BOARD
There are three standby committees of the Board of Directors: the Audit
Committee, the Compensation Committee and the Mergers, Acquisitions and Legal
Committee. The Audit Committee recommends the appointment of auditors and
oversees the accounting and audit functions of the Company. The Compensation
Committee determines executive officers' and key employees' salaries and
bonuses and administers the Company's 1997 Equity Incentive Plan (the "Equity
Incentive Plan"). The Mergers, Acquisitions, and Legal Committee reviews any
proposed mergers and acquisitions and provides legal compliance oversight.
Messrs. Goldman and Mabus serve as members of the Audit Committee, Messrs.
Collins and Todd serve as members of the Compensation Committee and Messrs.
Baker and Corlew serve as members of the Mergers, Acquisitions and Legal
Committee. During 1997 each standby committee held one meeting.
DIRECTORS' COMPENSATION
Each nonemployee director will receive a fee of $2,500 for attendance at
each Board of Directors meeting and $500 for each committee meeting. Upon
election to the Board of Directors, each nonemployee director receives stock
options to purchase 1,000 shares of Common Stock. Each nonemployee director
also receives stock options to purchase 2,000 shares of Common Stock annually.
Each of such options has an exercise price equal to the market price on the
date of grant. Directors of the Company are also reimbursed for out-of-pocket
expenses incurred in attending meetings of the Board of Directors or
committees thereof, and for other expenses incurred in their capacity as
directors of the Company.
3
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table, together with the accompanying footnotes, sets forth
information, as of March 10, 1998, regarding share ownership of all persons
known by the Company to own 5% or more of the outstanding shares of Common
Stock, and all executive officers and directors of the Company.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENT
BENEFICIALLY OF
OWNED(1)(2) OWNERSHIP
------------ ---------
<S> <C> <C>
J. L. Holloway(3)....................................... 10,400,002 42.5%
Carl M. Crawford........................................ 1,537,870 6.3%
John F. Alford.......................................... 133,050 *
Ronald W. Schnoor....................................... 585,262 2.4%
James A. Lowe, III...................................... 110,994 *
Alan A. Baker........................................... 1,000 *
John G. Corlew.......................................... 1,000 *
T. Jay Collins.......................................... 1,000 *
Jerome L. Goldman....................................... 22,002 *
Raymond E. Mabus, Jr.................................... 2,000 *
Howell W. Todd.......................................... 2,000 *
All executive officers and directors as a group (11
persons)............................................... 12,796,180 52.2%
</TABLE>
- --------
* Less than one percent.
(1) Gives effect to a two-for-one stock split effective October 10, 1997.
(2) Includes shares of Common Stock issuable pursuant to stock options
exercisable within 60 days of the date of this Proxy Statement.
(3) Includes 3,841,000 shares of Common Stock owned by a limited partnership
of which Mr. Holloway is a general partner.
4
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table provides certain summary information concerning
compensation earned by the Company's Chief Executive Officer and each of the
four other most highly compensated executive officers (the "Named Executive
Officers") during the year ended December 31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------ ------------
SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS (#) COMPENSATION(1)
------------------ ---- -------- -------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
John L. Holloway........ 1997 $362,232 -- -- -- $2,831
Chief Executive Officer
Carl M. Crawford........ 1997 $114,704 $ 40,000 -- -- $2,831
Executive Vice
President
Ronald W. Schnoor....... 1997 $127,618 $ 60,883 -- -- $2,831
President, HAM Marine
James A. Lowe, III...... 1997 $120,000 -- $1,176,200(2) -- $ 523
General Counsel
John F. Alford.......... 1997 $106,667 $104,231 $ 475,000(3) 76,820 $ 523
Sr. Vice President--
Acquisitions
</TABLE>
- --------
(1) Includes contributions by Company in 1997 to the 401(k) Retirement Plan
account of each of Messrs. Holloway, Crawford, Schnoor, Lowe and Alford in
the amounts of $2,603, $2,603, $2,603, $386 and $386, respectively; and
term life insurance premiums paid by the Company in 1997 on behalf of each
of such Named Executive Officers in the amounts of $228, $228, $228, $137
and $137, respectively.
(2) Mr. Lowe was granted shares in a predecessor of the Company effective
January 1, 1997 pursuant to an employment agreement executed in December
1996, which, after the reorganization of the Company in connection with
its initial public offering and the Company's subsequent 2-for-1 stock
split, amounted to 153,640 shares of the Company's common stock. The
Company charged $1,080,000 to selling, general and administrative expenses
in 1996 representing the value of such shares based on an estimated
initial public offering price for the Company's common stock, less a 10%
discount because the shares received by Mr. Lowe were not registered. In
addition, Mr. Lowe received $96,200 for tax reimbursement in 1997.
(3) Mr. Alford was granted shares in a predecessor of the Company in February
1997, which, after the reorganization of the Company in connection with
its initial public offering and the Company's subsequent 2-for-1 stock
split, amounted to 76,820 shares of the Company's common stock. The
Company recognized selling, general and administrative expenses in 1997 of
$475,000 based on the valuation methodology as used with respect to Mr.
Lowe.
5
<PAGE>
STOCK OPTIONS
The following table reflects certain information regarding stock options
granted to the Named Executive Officers during 1997.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
----------------------------------------------------------------- -------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS GRANTED EXERCISE MARKET PRICE
UNDERLYING TO EMPLOYEES IN PRICE ON GRANT EXPIRATION
NAME OPTIONS GRANTED 1997 ($/SHARE) DATE DATE 5% ($) 10% ($)
---- --------------- --------------- --------- ------------ ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
J. L. Holloway.......... -- -- -- -- -- -- --
Carl M. Crawford........ -- -- -- -- -- -- --
Ronald W. Schnoor....... -- -- -- -- -- -- --
James A. Lowe, III...... -- -- -- -- -- -- --
John F. Alford.......... 76,820 7.5% $1.195 $8.50 12/31/06 $917,819 $1,601,836
</TABLE>
OPTION GRANTS IN 1997
The following table reflects certain information concerning the number of
unexercised options held by the Named Executive Officers and the value of such
officers' unexercised options as of December 31, 1997. None of the Named
Executive Officers exercised any options in 1997.
OPTION EXERCISES IN 1997 AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT "IN-THE-MONEY" OPTIONS
DECEMBER 31, 1997 AT DECEMBER 31, 1997(1)
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
J.L. Holloway............... -- -- -- --
Carl M. Crawford............ -- -- -- --
Ronald W. Schnoor........... -- -- -- --
James A. Lowe, III.......... -- -- -- --
John F. Alford.............. 76,820 -- $2,205,000 --
</TABLE>
- --------
(1) Options are "in-the-money" if the closing market price of the Company's
Common Stock exceeds the exercise price of the options. The value of
unexercised options for each of the Named Executive Officers represents
the difference between the exercise price of such options and the closing
market price of the Company's common stock on December 31, 1997 ($29.875
per share). The exercise price of Mr. Alford's options is set forth in the
Option Grants table above.
6
<PAGE>
STOCK PERFORMANCE GRAPH
The following performance graph compares the Company's cumulative total
stockholder return on its Common Stock with the cumulative total return of the
Nasdaq Composite Index and a peer group stock index (the "Peer Group Index")
which consists of the other publicly-traded companies which perform conversion,
retrofit and repair services on offshore oil rigs. The cumulative total return
computations set forth in the Performance Graph assume the investment of $100
in the Company's Common Stock, the Nasdaq Composite Index and the Peer Group
Index on July 21, 1997.
The three companies that comprise the Peer Group Index are: Halter Marine
Group, Inc., Gulf Island Fabrication Inc. and Unifab International Inc.
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURNS*
LOGO
[Graph appears here]
<TABLE>
<CAPTION>
7/22/97 9/30/97 12/31/97
------- ------- --------
<S> <C> <C> <C>
Friede Goldman International Inc....................... 100 254 253
Peer Group Index....................................... 100 164 111
Nasdaq Composite Index................................. 100 108 101
</TABLE>
- --------
* Assumes $100 invested on July 22, 1997 in each of the Company's Common Stock,
the Nasdaq Composite Index and the Peer Group Index (dividends reinvested).
7
<PAGE>
REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors consists of two
directors who are not employees of the Company. The Committee reviews the
Company's executive compensation program and policies each year and determines
the compensation of the executive officers. The Committee's overall policy
regarding compensation of the Company's executive officers is to provide
competitive salary levels and compensation incentives that (i) attract and
retain highly qualified individuals in these key positions, (ii) recognize
individual performance and the performance of the Company relative to the
performance of other companies of comparable size, complexity and quality and
(iii) support both the short-term and long-term goals of the Company. The
Compensation Committee believes this approach closely links the compensation
of the Company's executives to the accomplishments of Company goals and
coincides with stockholder objectives.
In addition, the Compensation Committee considers the anticipated tax
treatment of the Company's executive compensation program. Section 162(m) of
the Internal Revenue Code generally limits the corporate tax deduction for
compensation paid to executive officers to $1 million annually, unless certain
conditions are met. Except in the case of option exercises or stock grants,
the Committee believes that it is unlikely that any officer will receive
compensation in excess $1 million in the near future. However, it will be the
policy of the Company to consider the impact, if any, of Section 162(m) on the
Company on the Company and to document as necessary specific performance goals
in order to seek to preserve the Company's tax deductions.
BASE SALARY
The Committee periodically reviews and establishes base salaries. Generally,
the base salaries of the Company's executive officers, including its Chief
Executive Officer, are determined according to the following factors: the
individual's experience level, scope and complexity of the position held and
annual performance of the individual.
INCENTIVE COMPENSATION
The Company's executive officers, including its Chief Executive Officer, are
also eligible to earn annual bonuses. The Company's annual bonuses provide
motivation toward and reward the accomplishment of corporate annual objectives
and provide a competitive compensation package that will attract, reward and
retain top-caliber individuals. The annual bonus amounts are based on both
Company and individual performance. Performance goals are both qualitative and
quantitative in nature. Qualitative goals include development and retention of
key personnel, quality of products and services and management effectiveness.
Quantitative goals include revenue and earnings targets and cost containment
goals. At the end of each year, the extent to which individual and Company
goals are met is evaluated. If target goals are met, the executive officers
receive a target bonus. Although specific relative weights are not assigned to
each performance factor, a greater emphasis is placed on increased earnings of
the Company.
This report is furnished by the Compensation Committee of the Board of
Directors.
T. Jay Collins
Howell W. Todd
8
<PAGE>
EMPLOYMENT AGREEMENTS
The Company entered into employment agreements with Messrs. Holloway and
Alford, and HAM Marine, Inc., a wholly owned subsidiary of the Company ("HAM
Marine"), entered into employment agreements with Messrs. Crawford, Schnoor
and Lowe. Pursuant to the terms of such agreements, the salaries of these
persons in 1997 was: Mr. Holloway, $350,000; Mr. Schnoor, $138,000; Mr.
Crawford, $120,000; Mr. Lowe, $120,000; and Mr. Alford, $100,000.
The employment agreements relating to Messrs. Holloway, Crawford and Schnoor
were effective on January 1, 1997, have initial terms of one year and, unless
earlier terminated pursuant to the terms thereof, continue thereafter on a
year-to-year basis. Each of such agreements is terminable by the employer for
"cause" upon ten days written notice and without "cause" by either party upon
thirty days written notice. In the event an officer's employment is terminated
by the employer without "cause," such officer will be entitled to receive a
lump-sum severance payment at the effective time of termination equal to the
base salary at the rate then in effect for a period of 30 days. In addition,
the employment agreements restrict these individuals from competing with the
Company for a period of 30 days from the date of termination.
HAM Marine entered into an employment agreement with Mr. Lowe effective
January 1, 1997, which agreement is terminable by HAM Marine at any time. In
the event the agreement is terminated by HAM Marine for any reason, Mr. Lowe
will receive a lump-sum severance payment of $60,000. Pursuant to the
agreement, Mr. Lowe received shares of common stock in HAM Marine which were
exchanged for 76,820 shares (153,640 shares after the 2-for-1 stock split) of
the Company's Common Stock pursuant to the reorganization of the Company
completed in connection with the initial public offering (the
"Reorganization").
The Company and HAM Marine entered into an employment agreement with Mr.
Alford on May 21, 1997, which agreement is terminable by the Company at any
time. Pursuant to the agreement, Mr. Alford received shares of common stock of
HAM Marine which were exchanged for 38,410 shares (76,820 shares after to 2-
for-1 stock split) of the Company's Common Stock pursuant to the
Reorganization. In addition, Mr. Alford was granted options to purchase
additional shares of common stock of HAM Marine effective as of February 14,
1997 which, upon completion of the Reorganization, were converted into options
to purchase an aggregate of 38,410 shares (76,820 shares as adjusted for the
2-for-1 stock split) of the Company's Common Stock, subject to a vesting
schedule relating to the exercisability of such options, at a purchase price
of $1.195 per share (as adjusted for the 2-for-1 stock split).
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has from time to time made loans to and paid expenditures on
behalf of its stockholders. In March 1997, Mr. Holloway and Mr. Crawford
entered into personal guarantees of $2.5 million each to secure a $10.0
million revolving line of credit for HAM Marine. In September, in connection
with an amendment to the credit facility necessitated by the initial public
offering of the Company's stock, the Company entered into a guarantee of the
credit facility and the guarantees of Messrs. Holloway and Crawford were
terminated.
In March 1997, HAM Marine made a distribution of property, including real
estate previously held for investment, along with the related debt guaranteed
by Mr. Holloway, and an airplane, to Messrs. Holloway, Crawford and Schnoor,
which property, and related liability, was contributed by such stockholders
into a newly formed company owned by Messrs. Holloway, Crawford and Schnoor.
Subsequent to such distribution, the Company chartered the airplane from such
company on a "when needed" basis at fair market charter rates through June
1997.
At December 31, 1996, marketable securities owned by the Company with a
market value of approximately $1.4 million were pledged as collateral for a
loan from a bank to Mr. Holloway to finance a portion of the purchase price of
certain assets of Friede & Goldman, Ltd. ("F&G Ltd."), which loan proceeds
were, in turn,
9
<PAGE>
loaned by Mr. Holloway to such entity. F&G Ltd. recorded a $1.4 million
payable to Mr. Holloway in recognition of the loan. On March 31, 1997, the
Company transferred the pledged marketable securities to Mr. Holloway in
payment of the obligation.
In July 1997, the Company purchased a crane from a company owned by Messrs.
Holloway, Crawford and Schnoor. The Company paid the same price for such crane
as such other company paid to acquire the crane from an unrelated party in
April 1997.
In July 1997, the Company entered into an agreement with a company owned by
Mr. Holloway, Mr. Crawford and Mr. Schnoor pursuant to which the Company
agreed to lease an airplane from such company for a monthly payment of $50,000
per month. In addition, the Company agreed to maintain the airplane in good
working condition, to pay all operating expenses related to the airplane and
to maintain insurance on the airplane. The agreement has a term of one year
and renews automatically on an annual basis unless terminated by either party
upon 30 days written notice to the other party. The Company believes that the
terms of such agreement are no less favorable than the Company could have
received from an unrelated party.
John G. Corlew, a director of the Company, is a member of the Jackson,
Mississippi law firm, Watkins & Eager, PLLC which from time to time performs
legal services on behalf of the Company.
APPOINTMENT OF AUDITORS (PROPOSAL 2)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
SELECTION OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS TO AUDIT THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE
YEAR ENDING DECEMBER 31, 1998. THE SHARES OF COMMON STOCK REPRESENTED BY
RETURNED PROXY CARDS WILL BE VOTED FOR THE RATIFICATION OF ARTHUR ANDERSEN LLP
AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS UNLESS OTHERWISE
SPECIFIED.
At the Annual Meeting a vote will be taken on the proposal to ratify the
appointment by the Board of Directors of Arthur Andersen LLP, independent
certified public accountants, as auditors of the Company's consolidated
financial statements for the year ending December 31, 1998. Arthur Andersen
audited the consolidated financial statements of the Company for the year
ended December 31, 1997.
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting, with the opportunity to make a statement should they choose to
do so, and to be available to respond to appropriate questions.
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
directors, officers and persons holding more than ten percent of a registered
class of the Company's equity securities to file with the Securities and
Exchange Commission ("SEC") and any stock exchange or automated quotation
system on which the Common Stock may then be listed or quoted (i) initial
reports of ownership, (ii) reports of changes in ownership and (iii) annual
reports of ownership of Common Stock and other equity securities of the
Company. Such directors, officers and ten-percent stockholders are also
required to furnish the Company with copies of all such filed reports.
Based solely upon review of the copies of such reports furnished to the
Company and written representations that no other reports were required during
1997, the Company believes that all Section 16(a) reporting requirements
related to the Company's directors and executive officers were timely filed
during 1997 except that a late report on Form 5 was filed for Mr. Goldman with
respect to his purchase of 20,002 shares (as adjusted for the 2-for-1 stock
split) of the Company's common stock in July of 1997.
10
<PAGE>
ANNUAL REPORTS
The Company's Annual Report to stockholders, together with its Annual Report
on Form 10-K, accompanies this Proxy Statement. The Company filed its Annual
Report on Form 10-K with the Securities and Exchange Commission on March 30,
1998. Additional copies of the Form 10-K, including any financial statements
and schedules and a list describing any exhibits not contained therein, may be
obtained without charge by any stockholder. Written requests for copies of the
report should be directed to James A. Lowe, III, Secretary, 525 E. Capitol
Street, Suite 402, Jackson, Mississippi 39201.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the Company's 1999
Annual Meeting of Stockholders must be received by the Secretary of the
Company no later than December 24, 1998 and must otherwise comply with the
requirements of Rule 14a-8 under the Securities Exchange Act of 1934.
OTHER MATTERS
The Board of Directors knows of no matters that are expected to be presented
at the Annual Meeting other than those described in this proxy statement.
Should any other matter properly come before the Annual Meeting, however, the
persons named in the form of proxy accompanying this proxy statement will vote
all shares represented by proxies in accordance with their best judgment on
such matters.
11
<PAGE>
PROXY
FRIEDE GOLDMAN INTERNATIONAL INC.
1998 ANNUAL MEETING OF STOCKHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS OF FRIEDE GOLDMAN INTERNATIONAL INC.
The undersigned hereby appoints J. L. Holloway and James A. Lowe, III, and
each of them individually, as proxies with full power of substitution, to vote
all shares of Common Stock of Friede Goldman International Inc. that the
undersigned is entitled to vote at the 1998 Annual Meeting of Stockholders
thereof to be held on May 15, 1998, or at any adjournment or postponement
thereof, as follows:
Any executed proxy which does not designate a vote shall be deemed to grant
authority for any item not designated.
Please check the following box if you plan to attend the Annual Meeting of
Stockholders in person. [_]
ALL SHARES WILL BE VOTED AS DIRECTED HEREIN AND, UNLESS OTHERWISE DIRECTED,
WILL BE VOTED "FOR" PROPOSAL 1 (ALL NOMINEES, "FOR" PROPOSAL 2, AND IN
ACCORDANCE WITH THE DISCRETION OF THE PERSON VOTING THE PROXY WITH RESPECT TO
ANY OTHER BUSINESS PROPERLY BROUGHT BEFORE THE MEETING.
YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO A VOTE THEREON.
PLEASE COMPLETE, SIGN AND PROMPTLY MAIL THIS PROXY IN THE ENCLOSED ENVELOPE.
(TO BE SIGNED ON REVERSE SIDE)
SEE REVERSE
SIDE
X PLEASE MARK YOUR
VOTES AS IN THIS 4888
EXAMPLE.
1. Election of FOR WITHHELD John G. Corlew and Raymond E. Mabus to hold
Directors [_] [_] office until the 2001 Annual Meeting and until
their successors are elected and qualified.
INSTRUCTION: To withhold authority
to vote for any individual nominee or
nominees, write the appropriate name
or names in the space provided here.
- -------------------------------------
2. Appointment of Arthur Andersen LLP FOR AGAINST ABSTAIN
as Auditors for the Company [_] [_] [_]
Signature(s) Dated: , 1998
-------------------------------------------- ----------
NOTE: Please sign exactly as name appears on this card. Joint owners should
each sign. Executors, administrators, trustees, etc., should give their
full titles.
