<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] 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
CONRAD INDUSTRIES, 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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<PAGE>
CONRAD INDUSTRIES, INC.
1501 Front Street
Morgan City, Louisiana 70381
April 20, 2000
TO OUR SHAREHOLDERS:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of Conrad Industries, Inc. to be held on Thursday, May 25, 2000 at 9:00 a.m.,
local time, at the Petroleum Club of Morgan City, 500 Roderick, Morgan City,
Louisiana. A Notice of the Annual Meeting, proxy statement and form of proxy
card are enclosed with this letter.
We encourage you to read the Notice of the Annual Meeting and proxy
statement so that you may be informed about the business to come before the
meeting. Your participation in Conrad Industries' business is important,
regardless of the number of shares that you hold. To ensure your
representation at the meeting, please promptly sign and return the
accompanying proxy card in the enclosed postage-paid envelope.
We look forward to seeing you on May 25, 2000.
Sincerely,
/s/ William H.Hidalgo
William H. Hidalgo
President and Chief Executive
Officer
<PAGE>
CONRAD INDUSTRIES, INC.
1501 Front Street
Morgan City, Louisiana 70381
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 25, 2000
To the Stockholders of Conrad Industries, Inc.:
When and Where. The 2000 Annual Meeting of Stockholders of Conrad
Industries, Inc. will be held on Thursday, May 25, 2000 at 9:00 a.m., local
time, at the Petroleum Club of Morgan City, 500 Roderick, Morgan City,
Louisiana.
Record Date. Only stockholders of record at the close of business on April
12, 2000 will be entitled to notice of and to vote at the Annual Meeting.
Purpose of the Meeting. The Annual Meeting has been called for the following
purposes:
1. To elect two Class II directors of Conrad Industries, each to serve
for three-year terms until the company's 2003 Annual Meeting of
Stockholders or until their respective successors have been duly
elected and qualified;
2. To ratify the appointment of Deloitte & Touche LLP as Conrad
Industries' independent public accountants for its fiscal year ending
December 31, 2000; and
3. To consider and act upon such other business as may properly come
before the meeting or any adjournments thereof.
You will find more information on the nominees for director and the
proposals in the proxy statement. You will find further instructions on how to
vote beginning on page 2 of the proxy statement.
Your Vote Counts! It is important that your shares be represented at the
Annual Meeting regardless of whether you plan to attend. This will ensure the
presence of a quorum at the meeting. Please complete, sign and date the
enclosed proxy card and return it in the envelope provided as promptly as
possible, even if you intend to be present at the meeting. You may revoke your
proxy at any time before it is voted.
By Order of the Board of Directors,
/s/ Cecil A. Hernandez
Cecil A. Hernandez
Secretary
Morgan City, Louisiana
April 20, 2000
<PAGE>
CONRAD INDUSTRIES, INC.
1501 Front Street
Morgan City, Louisiana 70381
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 25, 2000
<TABLE>
<CAPTION>
CONTENTS OF 2000 PROXY STATEMENT Page
- -------------------------------- ----
<S> <C>
Voting Information
General Instructions on How to Vote Your Proxy.......................... 2
Voting Rules............................................................ 3
Proposals
Proposal Number 1: Election of Directors................................ 5
Proposal Number 2: Appointment of Independent Public Accountants........ 6
Company Information
Information about Current and Continuing Directors...................... 7
Directors' Meetings and Compensation.................................... 8
Board Committees and their Functions.................................... 8
Compensation Committee Interlocks and Insider Participation............. 9
Report of the Compensation Committee.................................... 10
Executive Compensation.................................................. 13
Transactions with Certain Affiliates.................................... 17
Stock Ownership by Conrad Industries' Largest Stockholders and
Management............................................................. 19
Compliance with Section 16(a)........................................... 20
Stockholder Proposals for the 2001 Annual Meeting....................... 20
Discretionary Voting of Proxies on Other Matters........................ 20
1999 Form 10-K.......................................................... 21
</TABLE>
The principal executive offices of Conrad Industries are located at 1501
Front Street, Morgan City, Louisiana 70381. This proxy statement, and the
accompanying Notice of 2000 Annual Meeting of Stockholders and proxy card,
are first being mailed to our stockholders on or about April 20, 2000.
<PAGE>
VOTING INFORMATION
GENERAL INSTRUCTIONS ON HOW TO VOTE YOUR PROXY:
Below are instructions on how to vote, as well as information on your rights
as a stockholder as they relate to voting. Some of the instructions will differ
depending on how your stock is held. It is important to follow the instructions
that apply to your situation.
If your shares are held in "street name," you should vote your shares in the
method directed by your broker or other nominee.
If you plan to attend the meeting and vote in person, your instructions will
depend on how your shares are held:
. Shares registered in your name--Check the appropriate box on the
enclosed proxy card and bring evidence of your stock ownership with
you to the meeting. The proxy card and the evidence of your ownership
will serve as your authorization to vote in person.
. Shares registered in the name of your broker or other nominee--Ask
your broker to provide you with a broker's proxy card in your name
(which will allow you to vote your shares in person at the meeting)
and bring evidence of your stock ownership from your broker.
Remember that attendance at the meeting will be limited to stockholders as of
the record date (or their authorized representatives) with evidence of their
share ownership and guests of Conrad Industries.
How to Revoke Your Proxy. If your shares are registered in your name, you
may revoke your proxy at any time before it is exercised by:
. filing with the Secretary of Conrad Industries a written notice
revoking it;
. executing and returning another proxy bearing a later date; or
. attending the Annual Meeting and expressing a desire to vote your
shares of common stock in person.
If your shares are held in street name, you must contact your broker to
revoke your proxy. Written notices to Conrad Industries must be addressed to
Cecil A. Hernandez, Secretary, Conrad Industries, Inc., 1501 Front Street, P.
O. Box 790, Morgan City, Louisiana 70381. No revocation by written notice will
be effective unless such notice has been received by the Secretary of Conrad
Industries prior to the day of the Annual Meeting or by the inspector of
election at the Annual Meeting.
2
<PAGE>
VOTING RULES:
Stockholders Entitled to Vote--The Record Date. The close of business on
April 12, 2000 has been fixed as the record date for the determination of
stockholders entitled to vote at the Annual Meeting and any postponement(s) or
adjournment(s) thereof. As of the record date, Conrad Industries had issued and
outstanding 7,077,723 shares of common stock of Conrad Industries. There are no
other classes of voting securities of Conrad Industries outstanding.
Quorum Required. A quorum must exist for us to hold the Annual Meeting. For
a quorum to exist, we will need the presence, either in person or by proxy, of
holders of a majority of the outstanding shares of Conrad Industries' common
stock as of the record date. Abstentions and broker non-votes are counted for
purposes of determining whether a quorum is present. Generally, broker non-
votes occur when shares held by a broker for a beneficial owner are not voted
with respect to a particular proposal because (1) the broker has not received
voting instructions from the beneficial owner and (2) the broker lacks
discretionary voting power to vote such shares.
Number of Votes. You are entitled to one vote per share of Conrad
Industries' common stock that you own as of the record date on each matter that
is called to vote at the Annual Meeting.
Voting to Elect Directors. When voting to elect directors, you have three
options:
. Vote for both of the nominees;
. Vote for only one of the nominees; or
. Withhold authority to vote for all of the nominees.
If a quorum is present at the Annual Meeting, the two persons receiving the
greatest number of votes will be elected to serve as directors. Because of this
rule, any shares that are not voted or any votes that are withheld will not
influence the outcome of the election of directors. Cumulative voting for the
election of directors is not permitted.
Voting on Other Matters. When voting on all other matters, you will also
have three options, but these options are different from those pertaining to
the election of directors:
. Vote "FOR" a given proposal;
. Vote "AGAINST" a given proposal; or
. ABSTAIN from voting on a given proposal.
Each matter, other than the election of directors, requires the affirmative
vote of a majority of the shares present or represented at the Annual Meeting
and entitled to vote on the proposal. An abstention with respect to a
particular proposal will be treated as a vote not cast with respect to such
proposal. Broker non-votes will not affect the results on a proposal because
shares held by brokers who withhold authority to vote will be considered absent
in the voting tallies on these proposals.
A duly executed proxy confers discretionary authority to the persons named
in the proxy authorizing those persons to vote, in their discretion, on any
other matters properly presented at the Annual Meeting. The Board of Directors
is not currently aware of any such other matters to be presented at the
meeting.
3
<PAGE>
Voting of Proxies with Unmarked Votes. All proxies that are properly
completed, signed and returned prior to the Annual Meeting will be voted. If
you return your proxy with no votes marked, your shares will be voted as
follows:
. "FOR" the election of each of the two nominees for director.
. "FOR" the appointment of Deloitte & Touche LLP as Conrad Industries'
independent public accountants.
It is possible for a proxy to indicate that some of the shares represented
are not being voted as to certain proposals. This occurs, for example, when a
broker is not permitted to vote on a proposal without instructions from the
beneficial owner of the stock. In these cases, non-voted (broker non-votes)
shares are considered absent for those proposals.
Who Counts the Votes. Votes will be counted by American Stock Transfer &
Trust Company, our transfer agent and registrar.
Information about this Solicitation of Proxies. The solicitation of the
proxy accompanying this statement is being made by Conrad Industries' Board of
Directors in connection with the 2000 Annual Meeting of Stockholders. In
addition to the solicitation of proxies by use of this proxy statement,
directors, officers and employees of Conrad Industries may solicit the return
of proxies by mail, personal interview, telephone or telegraph. Officers and
employees of Conrad Industries will not receive additional compensation for
their solicitation efforts, but they will be reimbursed for any out-of-pocket
expenses incurred. Brokerage houses and other custodians, nominees and
fiduciaries will be requested, in connection with the stock registered in their
names, to forward solicitation materials to beneficial owners of such stock.
All costs of preparing, printing, assembling and mailing the Notice of the
2000 Annual Meeting of Stockholders, this proxy statement, the enclosed form of
proxy card and any additional materials, as well as the cost of forwarding
solicitation materials to the beneficial owners of stock and all other costs of
solicitation, will be borne by Conrad Industries.
4
<PAGE>
PROPOSALS
PROPOSAL NUMBER 1: ELECTION OF DIRECTORS
Conrad Industries' Charter divides or "classifies" its Board of Directors
into three classes (Classes I, II and III), with respect to the three-year
terms for which the directors in each class individually hold office. Each
class consists, as nearly as possible, of one third of the entire Board. Conrad
Industries' Board of Directors currently has seven members. Each director is
elected to hold office for a term ending on the date of the third annual
meeting following the annual meeting at which such director was elected, except
that the initial terms of office of the current Class I, Class II and Class III
Directors expire at the annual meetings of stockholders to be held in 2002,
2000 and 2001, respectively. The current term for Class II Directors will
expire at this year's Annual Meeting. The current terms for Class III and Class
I Directors will expire at the 2001 and 2002 Annual Meetings of Stockholders,
respectively.
The Board of Directors has nominated and urges you to vote for the election
of the two nominees identified below to serve as Class II directors for a
three-year term or until their successors are duly elected and qualified. Each
of the nominees listed below is a member of Conrad Industries' present Board of
Directors. Proxies solicited hereby will be voted for both nominees unless
stockholders specify otherwise in their proxies.
If, at the time of or prior to the Annual Meeting, any of the nominees
should be unable or decline to serve, the discretionary authority provided in
the proxy may be used to vote for a substitute or substitutes designated by the
Board of Directors. The Board of Directors has no reason to believe that any
substitute nominee or nominees will be required.
Nominees for Director
Class II--Terms Expiring at 2003 Annual Meeting
The two nominees for re-election as Class II directors, and certain
additional information with respect to each of them, are as follows:
<TABLE>
<CAPTION>
Year First
Name Age Position with Conrad Industries Became a Director
---- --- ---------------------------------- -----------------
<S> <C> <C> <C>
William H. Hidalgo.... 60 President, Chief Executive Officer 1998
and Director (Class II)
Michael J. Harris..... 50 Director (Class II) 1998
</TABLE>
William H. Hidalgo has served as President and Chief Executive Officer of
Conrad Industries since May 1994. Mr. Hidalgo has served as President, Chief
Executive Officer and Director of Conrad Industries since March 1998. Prior to
joining Conrad Industries, Mr. Hidalgo was employed by Oil & Gas Marine
Service, Inc., a marine-related service company, from 1977 to 1994, and from
1988 to 1994 was responsible for all marine operations as Vice President and
General Manager. Mr. Hidalgo has 35 years experience in the marine business and
has been actively involved in the design, construction, repair, conversion,
modification, and operation of marine vessels throughout his career. Mr.
Hidalgo is a licensed professional Civil Engineer with extensive experience in
the design and construction of energy related marine structures.
Michael J. Harris has been a Director of Conrad Industries since the
consummation of the initial public offering in June 1998. Mr. Harris is a
Managing Director of Morgan Keegan & Company, Inc., where he has been employed
since 1986. Morgan Keegan & Company, Inc. is a subsidiary of Morgan Keegan,
Inc., a publicly traded firm providing securities brokerage, investment banking
and other financial services. Mr. Harris has headed the Energy Investment
Banking Group of Morgan Keegan since 1994 and prior to 1994 was the senior
energy securities analyst.
5
<PAGE>
The Board of Directors recommends that stockholders vote "FOR" the election
of Messrs. Hidalgo and Harris as directors to hold office until the 2003 Annual
Meeting of Stockholders and until their successors are elected and qualified.
Proxies executed and returned will be so voted unless contrary instructions are
indicated thereon.
PROPOSAL NUMBER 2:RATIFICATION AND APPROVAL OF INDEPENDENT PUBLIC
ACCOUNTANTS
The Board of Directors has appointed the firm of Deloitte & Touche LLP as
Conrad Industries' independent public accountants to make an examination of the
accounts of Conrad Industries for the fiscal year ending December 31, 2000,
subject to ratification by Conrad Industries' stockholders. Representatives of
Deloitte & Touche LLP will be present at the Annual Meeting and will have an
opportunity to make a statement, if they desire to do so. They will also be
available to respond to appropriate questions from stockholders attending the
Annual Meeting.
The Board of Directors recommends that stockholders vote "FOR" ratification
and approval of Deloitte & Touche LLP's appointment. Proxies executed and
returned will be so voted unless contrary instructions are indicated thereon.
6
<PAGE>
COMPANY INFORMATION
INFORMATION ABOUT THE CURRENT AND CONTINUING DIRECTORS
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
J. Parker Conrad........... 84 Co-Chairman of the Board of Directors (Class
III)
John P. Conrad, Jr......... 57 Co-Chairman of the Board of Directors (Class
III)
William H. Hidalgo......... 60 President, Chief Executive Officer and Director
(Class II)
Cecil A. Hernandez......... 43 Vice President--Finance and Administration,
Chief Financial Officer and Director (Class I)
Michael J. Harris.......... 50 Director (Class II)
Louis J. Michot, Jr........ 77 Director (Class I)
Richard E. Roberson, Jr.... 64 Director (Class III)
</TABLE>
Information regarding the business experience of Mr. Hidalgo and Mr. Harris
is set forth above under the heading "-- Nominees for Director."
J. Parker Conrad founded Conrad Industries and has served as Chairman of the
Board of Conrad Industries from its inception in 1948 and as President of
Conrad Industries from 1948 until 1994. Mr. Conrad has served as Co-Chairman of
the Board of Conrad Industries since March 1998. Mr. Conrad is the father of
John P. Conrad, Jr.
John P. Conrad, Jr. has been with Conrad Industries since 1962, serving as
Vice President of Conrad Industries since 1982 and as Co-Chairman of the Board
of Conrad Industries since March 1998. Mr. Conrad founded Johnny's Propeller
Shop, a marine-related service company, in 1963 and has been Chairman of the
Board of this Company since its inception. Mr. Conrad is also the Chairman and
President of Bay Star, a Houston-based paging company which Mr. Conrad founded
in 1986.
Cecil A. Hernandez joined Conrad Industries in January 1998. Mr. Hernandez
has served as Vice President--Finance and Administration, Chief Financial
Officer and Director of Conrad Industries since March 1998. Mr. Hernandez
founded Hernandez & Blackwell CPAs in 1983 and served as its Managing Partner
until December 1997. Hernandez & Blackwell CPAs merged with Darnall, Sikes &
Frederick CPAs in 1996. Additionally, Mr. Hernandez provided accounting and
consulting services for Conrad Industries as the outside Certified Public
Accountant from 1993 until 1997. From 1982 to 1983, Mr. Hernandez served as
Assistant Controller for Oceaneering International, a publicly traded diving
company. Mr. Hernandez was employed at Deloitte Haskins & Sells, an
international accounting firm, from 1979 to 1982.
Louis J. Michot, Jr. has been a Director of Conrad Industries since the
consummation of the initial public offering in June 1998. Since 1991, Mr.
Michot has been Chairman of the Board of Louis J. Michot & Associates, Inc., a
family-owned holding company which at present deals principally in real estate
sales, development and rentals. From 1952 to 1991, Mr. Michot served as its
President and CEO, during which time he developed a chain of 45 fast food
restaurants in Louisiana, Mississippi and Texas and became actively engaged in
other business ventures. Mr. Michot was one of the organizers of the Bank of
Lafayette and served on its Board of Directors from 1975 to 1980. He served in
the Louisiana Legislature from 1960 to 1964, on the State Board of Education
from 1968 to 1972 and as the State Superintendent of Education from 1972 to
1976. Mr. Michot's wife is a first cousin of J. Parker Conrad.
Richard E. Roberson, Jr. has been a Director of Conrad Industries since the
consummation of the initial public offering in June 1998. Mr. Roberson served
as Vice President, Chief Financial Officer, Treasurer and director of Global
Industries, Ltd. from December 1992 to May 1996, when he retired. From March
1986 until
7
<PAGE>
September 1991, Mr. Roberson served as Vice President--Finance for Ocean
Drilling & Exploration Company. Additionally, Mr. Roberson served as a director
of UNIFAB International, Inc. from September 1997 to August 1998. Mr. Roberson
has over 30 years of experience in the oil and gas and oil service industry,
including over 20 years as an accounting and financial officer.
DIRECTORS' MEETINGS AND COMPENSATION
During 1999, the Board of Directors met four times and took certain
additional actions by unanimous written consent in lieu of meetings. During
1999, no director of Conrad Industries attended fewer than 75 percent of the
meetings of the Board of Directors.
Conrad Industries' directors who are employees do not receive any cash
compensation for service on the Board of Directors or any committee. The
directors are, however, reimbursed for expenses incurred in connection with
attending each board and committee meeting, and for other expenses incurred in
their capacity as Directors. Directors who are not employees of Conrad
Industries receive a fee of $12,000 annually, $1,000 for attendance at each
Board of Directors meeting and $500 for each committee meeting attended (unless
held on the same day as the Board of Directors meeting). Under the 1998 Stock
Plan, each non-employee director receives (1) the grant of options to purchase
1,000 shares of Conrad Industries' common stock upon his initial election to
the Board and (2) an annual grant of options to purchase 1,000 shares of Conrad
Industries' common stock, in each case at the closing sales price of the common
stock on the date of grant.
BOARD COMMITTEES AND THEIR FUNCTIONS
Conrad Industries' Board of Directors has an Audit Committee and a
Compensation Committee, and does not have a Nominating Committee. As of the
current date Conrad Industries has not adopted an audit committee charter.
The Audit Committee's functions include:
. overseeing the performance and reviewing the scope of the audit
function of the company's independent auditors;
. reviewing audit plans and procedures;
. reviewing the company's policies with respect to conflicts of
interest;
. reviewing the prohibition on the use of corporate funds or assets for
improper purposes;
. reviewing changes in accounting policies; and
. reviewing the use of independent auditors for non-audit services.
In addition, the Audit Committee makes annual recommendations to the Board
of Directors for the appointment of independent public accountants for the
ensuing year. Messrs. Roberson (Chairperson), Harris and Michot served as the
members of the Audit Committee during 1999. None of these directors are
employees of Conrad Industries.
The Compensation Committee's functions include:
. reviewing salaries and other compensation of officers and key
employees on an annual basis or whenever it is requested by the Board
of Directors or the Chief Executive Officer;
8
<PAGE>
. preparing a report and submitting recommendations to the Board of
Directors regarding salaries and compensation;
. selecting officers and key employees for participation in incentive
compensation plans and establishing performance goals for those
officers and key employees and reporting to the full Board of
Directors;
. reviewing and monitoring benefits under all employee plans of the
company and reporting, if the Compensation Committee deems it
appropriate, to the full Board of Directors;
. considering and making recommendations to the Board of Directors from
time to time with respect to the management organization of the
company, including recommending the election and appointment of
officers of the company and reviewing plans providing for the orderly
succession of the officers of the company; and
. administering incentive compensation and stock plans, including the
1998 Stock Plan, as may be required by such plans, subject to the
continuing supervision and control of the Board of Directors.
The Compensation Committee also administers Conrad Industries' 1998 Stock
Plan or other similar plan benefiting the employees and officers of Conrad
Industries. Messrs. Harris (Chairperson), Roberson and Michot served as members
of the Compensation Committee during 1999.
During 1999, the Audit Committee met three times and the Compensation
Committee met three times. During 1999, no director of Conrad Industries
attended fewer than 75 percent of the number of meetings of committees on which
he served.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to April 1998, the Board of Directors had no Compensation Committee,
and J. Parker Conrad, John P. Conrad Jr., William H. Hidalgo and Cecil A.
Hernandez participated in deliberations of Conrad Industries' Board of
Directors concerning executive officer compensation.
9
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors currently consists of
Michael J. Harris, Louis Michot, Jr. and Richard E. Roberson, Jr., none of whom
are officers or employees of Conrad Industries. The Compensation Committee is
responsible for evaluating the performance of management, determining salaries
and bonuses for certain executive officers and key employees of Conrad
Industries and administering Conrad Industries' 1998 Stock Plan. The Committee
has furnished the following report on executive compensation for 1999:
Under the supervision of the Compensation Committee, Conrad Industries has
developed a compensation policy which is designated to attract and retain
talented executives and employees responsible for the success of Conrad
Industries and to motivate management to enhance long-term stockholder value.
The annual compensation package for executive officers primarily consists of:
. a cash salary which reflects the responsibilities relating to the
position and individual performance;
. variable performance awards payable in cash or stock and tied to the
individual's or the company's achievement of certain goals or
milestones; and
. long-term stock based incentive awards which strengthen the mutuality
of interests between the executive officers and key employees and the
company's stockholders.
In determining the level and composition of compensation of each of Conrad
Industries' executive officers, including its Chief Executive Officer, the
Compensation Committee takes into account various qualitative and quantitative
indicators of corporate and individual performance. Although no specific target
has been established, the Compensation Committee may review salaries of
comparable peer group companies. In setting such salaries, the Compensation
Committee considers its peer group to be certain companies in the ship building
and marine construction industries with market capitalizations similar to that
of Conrad Industries. Consequently, in evaluating the performance of
management, including that of the Chief Executive Officer, the Compensation
Committee takes into consideration such factors as the company's financial
results and operating performance in comparison with those of other companies
in the industry. In addition, the Compensation Committee recognizes performance
and achievements that are more difficult to quantify, such as the successful
supervision of major corporate projects, demonstrated leadership ability and
contributions to the industry and community development.
Base compensation for executive officers, including the Chief Executive
Officer, is generally established through negotiation between Conrad Industries
and the executive officer at the time the executive is hired, and then
subsequently adjusted when such officer's base compensation is subject to
review or reconsideration. In 1998, Conrad Industries entered into employment
agreements with J. Parker Conrad, John P. Conrad, Jr., William H. Hidalgo and
Cecil A. Hernandez. Such agreements provide for annual base salaries of
$220,500, $200,000, $195,290, and $150,000, respectively, which base salaries
may be increased by the Board of Directors. The Board of Directors has not
taken any action to increase the base salaries of such executive officers for
the 2000 calendar year. When establishing or reviewing base compensation levels
for each executive officer, the Compensation Committee, in accordance with its
general compensation policy, considers numerous factors, including the
responsibilities relating to the position, the qualifications of the executive
and the relevant experience the individual brings to Conrad Industries,
strategic goals for which the executive has responsibility, and compensation
levels of comparable companies, and annual performance of the individual. No
pre-determined weights are given to any one of such factors.
In the first quarter of 1998, Conrad Industries issued shares of common
stock to William H. Hidalgo, the President and Chief Executive Officer, and
Cecil A. Hernandez, the Vice President--Finance and Administration and Chief
Financial Officer, in consideration of past services rendered. The agreements
related
10
<PAGE>
to such restricted stock provide that 50% of the shares of common stock issued
to each such executive would be subject to forfeiture in the event of the
voluntary termination of employment by such executive for other than "good
reason" prior to the expiration of the initial three-year term of employment
specified in the employment agreement of such executive, and that such
restriction would lapse in the event of (1) the termination by the company of
such executive's employment for reasons other than "cause" (as defined) or (2)
the death, disability or retirement (at or after the age of 65) of such
executive and would also lapse with respect to 33 1/3% of such restricted
shares on each of the first three anniversaries of the completion of the
company's initial public offering in June 1998. The shares of common stock of
Conrad Industries issued to Mr. Hidalgo and Mr. Hernandez were exchanged,
respectively, for 385,695 and 153,819 shares of common stock of the company
pursuant to the reorganization of the company completed prior to the initial
public offering. In connection with the issuance of these shares to Messrs.
Hidalgo and Hernandez, the company estimated it would recognize aggregate
compensation expense of $8.6 million, of which $4.3 million was recognized in
the first quarter of 1998 and the remainder was estimated to be recognized over
a three-year vesting period, of which $360,000 was expensed in the second
quarter of 1998. During the third quarter of 1998, the executives surrendered
and the company canceled 247,277 of their restricted shares in order to
eliminate the recurring compensation expense associated with the lapse of the
restrictions. As a result of the cancellation of the shares, the remainder of
the estimated compensation expense of $4.0 million will not be recognized in
the future. On November 3, 1998, Mr. Hidalgo and Mr. Hernandez were granted
stock options to purchase 250,000 and 114,043 shares, respectively, of common
stock at $6.75 per share, the market price of the stock on the date of the
award. On May 4, 1999, Mr. Hidalgo was awarded options to purchase 35,957
shares of common stock at $5.63 per share, the market price of the stock on the
date of the award. On March 2, 1999 and April 15, 1999, Messrs. Hidalgo and
Hernandez executed promissory notes payable to Conrad Industries bearing
interest at 9.0% per annum in the amounts of $ 233,327 and $139,277,
respectively, representing their tax liabilities in connection with common
shares issued to them and surrendered during the third quarter of 1998.
In addition to each executive officer's base compensation, the Compensation
Committee may award cash bonuses under an annual incentive plan and/or grant
awards under Conrad Industries' 1998 Stock Plan to chosen executive officers
depending on the extent to which certain defined personal and corporate
performance goals are achieved. The Board of Directors has determined not to
pay any cash bonuses under the annual incentive plan or make any award under
the 1998 Stock Plan to any executive officer for 1999, except as described
above.
All employees of Conrad Industries, including its executive officers, are
eligible to receive long-term stock based incentive awards under Conrad
Industries' 1998 Stock Plan as a means of providing such individuals with a
continuing proprietary interest in Conrad Industries. Such grants further the
mutuality of interest between Conrad Industries' employees and its stockholders
by providing significant incentives for such employees to achieve and maintain
high levels of performance. Conrad Industries' 1998 Stock Plan enhances the
company's ability to attract and retain the services of qualified individuals.
Factors considered in determining whether such awards are granted to an
executive officer of Conrad Industries include:
.the executive's position in Conrad Industries, his or her performance and
responsibilities;
.the amount of stock options, if any, currently held by the officer;
.the vesting schedules of any such options; and
.the executive officer's other compensation.
While the Compensation Committee does not adhere to any firmly established
formulas or schedules for the issuance of awards such as options or restricted
stock, the Compensation Committee will generally tailor the terms of any such
grant to achieve its goal as a long-term incentive award by providing for a
vesting schedule encompassing several years or tying the vesting dates to
particular corporate or personal milestones.
11
<PAGE>
The management of Conrad (1) reviewed with the Compensation Committee the
substantial decline in the price of Conrad common stock from the date of the
initial public offering to November 3, 1998, (2) compared the Conrad common
stock performance during this period with the common stock performance of
Conrad's peer group, (3) noted that given these facts, competitors could make
job offers to key Conrad employees which could include stock option awards more
valuable than the Conrad stock option awards held by employees and (4)
recommended that the Compensation Committee consider repricing all of the
Conrad stock option awards outstanding. In the fourth quarter of 1998, 125,500
employee stock options which had previously been issued to employees with an
original exercise price of $12.00 per share were repriced at $6.75 per share,
the market price of the common stock of Conrad Industries on the date of
repricing. Additionally, the Board of Directors determined that it was
advisable to reprice options to the non-employee directors in order to
encourage their continued involvement as directors of Conrad Industries. As a
result, 1,000 employee stock options which had been issued to each of the non-
employee directors, Messrs. Harris, Roberson and Michot, with an original
exercise price of $12.00 per share, were also repriced during the fourth
quarter of 1998. The new exercise price of the stock options, $6.75, represents
the market price of the common stock of Conrad Industries on the date of
repricing. The stock option repricing was approved or ratified by the entire
Board of Directors.
The foregoing report is given by the following members of the Compensation
Committee:
Michael J. Harris
Richard E. Roberson, Jr.
Louis Michot, Jr.
12
<PAGE>
EXECUTIVE COMPENSATION
Executive Officers
Set forth below is certain information concerning the executive officers of
Conrad Industries, including the business experience of each during the past
five years.
<TABLE>
<CAPTION>
Name Age Position with Conrad Industries
---- --- -------------------------------
<S> <C> <C>
J. Parker Conrad............. 84 Co-Chairman of the Board
John P. Conrad, Jr........... 57 Co-Chairman of the Board
William H. Hidalgo........... 60 President and Chief Executive Officer
Cecil A. Hernandez........... 43 Vice President--Finance and Administration,
Chief Financial Officer
</TABLE>
Information regarding the business experience of Messrs. Conrad, Conrad,
Jr., Hidalgo and Hernandez is set forth above under the heading "Information
about Current and Continuing Directors."
Compensation of Executive Officers
Summary Compensation Table
The following table provides certain summary information concerning
compensation paid or accrued during the last two fiscal years to Conrad
Industries' Chief Executive Officer and to each of the other executive officers
of the company, determined as of the end of the last fiscal year, whose annual
compensation exceeded $100,000. Further information with respect to each of the
named executive officer's compensation is described below the table.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
----------------------------------- ----------------------
Restricted Securities
Name and Principal Other Annual Stock Underlying All Other
Position Year Salary Bonus Compensation(1) Awards Options (#) Compensation (2)
------------------ ---- -------- ----- --------------- ---------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
J. Parker Conrad........ 1999 $220,500 -- -- -- -- --
Co-Chairman of the
Board 1998 $220,500 -- -- -- -- --
John P. Conrad, Jr...... 1999 $200,000 -- -- -- -- --
Co-Chairman of the
Board 1998 $200,000 -- -- -- -- --
William H. Hidalgo...... 1999 $195,290 -- -- (3) 35,957 $2,232
President and Chief 1998 $195,290 -- -- -- 250,000 $2,500
Executive Officer
Cecil A. Hernandez...... 1999 $150,000 -- -- (3) -- $2,232
Vice President--Finance 1998 $150,000 -- -- -- 114,043 $1,515
and Administration and
Chief Financial Officer
</TABLE>
- --------
(1) None of the executive officers has received perquisites, the value of which
exceeded the lesser of $50,000 or 10% of the salary of such executive
officer.
(2) Consists of payments made by Conrad Industries under the company's 401(k)
plan for the benefit of the executive officers.
(3) Prior to the initial public offering of Conrad Industries, Messrs. Hidalgo
and Hernandez were issued 385,695 and 153,819 shares of restricted common
stock of Conrad Industries, respectively. Subsequently, 176,777 and 70,500
shares of such restricted stock, respectively, were surrendered by such
executive officers. As of December 31, 1999, Messrs. Hidalgo and Hernandez
held 208,918 and 83,319 shares of restricted common stock, respectively,
which at the time of grant, prior to the initial public offering of Conrad
Industries and therefore the existence of a public market for such stock,
were valued at $401,123
13
<PAGE>
and $159,972, respectively. As of March 31, 2000, using the closing sales
price of Conrad Industries' common stock as reported by the Nasdaq Stock
Market of $4.50, such shares of restricted stock were valued at $940,131 and
$374,936, respectively. Of the 208,918 and 83,319 shares of restricted stock
held by Messrs. Hidalgo and Hernandez, respectively, 192,848 and 76,910
shares of restricted stock, respectively, vested on March 31, 1998, and
16,070 and 6,409 shares of restricted stock, respectively, vested on June
10, 1999. Dividends will be paid on the restricted stock reported if any are
declared by the company with respect to its common stock.
Option Grants During 1999
The following table provides certain information with respect to options
granted to the Chief Executive Officer and to each of the executive officers
named below during the fiscal year ended December 31, 1999, under our 1998
Stock Plan. The Securities and Exchange Commission requires disclosure of the
potential realizable value or present value of each grant. The disclosure
assumes the options will be held for the full 10-year term prior to exercise.
These options may be exercised prior to November 2, 2008. The actual value, if
any, an executive officer may realize will depend upon the excess of the stock
price over the exercise price on the date the option is exercised. There can be
no assurance that the stock price will appreciate at the rates shown in the
table. As of March 31, 2000, the closing sales price of our common stock, as
reported by the Nasdaq Stock Market, was $4.50 per share.
<TABLE>
<CAPTION>
Potential
Realizable Value
At Assumed Annual
Rates of Stock
Price
Appreciation for
Individual Grants Option Term
---------------------------------------------------- -----------------
Number of Percent of
Securities Total Options
Underlying Granted to Exercise
Options Employees in Price per Expiration
Name Granted (#) Fiscal Year Share Date 5% 10%
---- ----------- ------------- --------- ---------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
William H. Hidalgo...... 35,957 100% $5.63 November 2, 2008 $127,288 $322,534
</TABLE>
Fiscal Year-End Option Values
The following table sets forth certain information regarding (1) the number
of shares of common stock underlying unexercised options held by the Chief
Executive Officer and each Named Executive Officer as of December 31, 1999 and
(2) the value, at December 31, 1999, of exercisable and unexercisable "in-the-
money" stock options held by the Chief Executive Officer and each executive
officer named in the Summary Compensation Table. Neither the Chief Executive
Officer nor any other Named Executive Officer exercised any stock options
during the year ended December 31, 1999. A stock option is "in-the-money" if
the closing market price of the company's common stock exceeds the exercise
price of the stock option. The value of "in-the-money" unexercised stock
options set forth in the foregoing table represents the difference between the
exercise price of these options and the closing sales price of our common stock
on December 31, 1999, as reported by the Nasdaq Stock Market, $3.25 per share.
1999 Option Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal Year- In-the-Money Options
End at Fiscal Year End
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
William H. Hidalgo.......... 80,504 205,453 -- --
Cecil A. Hernandez.......... 31,103 82,940 -- --
</TABLE>
14
<PAGE>
Performance Graph
The following performance graph compares Conrad Industries' cumulative total
stockholder return on its common stock to the cumulative total return of the
Nasdaq Composite Index and to a peer group stock index which consists of the
publicly-traded companies which perform construction, conversion and repair of
marine equipment. The companies that comprise the peer group index are: Friede
Goldman Halter, Inc., Gulf Island Fabricators, Inc., Universal Fabricators,
Inc. The graph covers the period from June 10, 1998 (the initial trading date
of the common stock) to December 31, 1999. The graph assumes that the value of
the investment in Conrad Industries' common stock and each index was 100 at
June 10, 1998 and that all dividends were reinvested.
COMPARISON OF 18 MONTH CUMULATIVE TOTAL RETURN*
AMONG CONRAD INDUSTRIES, INC., THE S & P SMALLCAP 600 INDEX
AND A PEER GROUP
[Graph]
* $100 INVESTED ON 6/10/98 IN STOCK OR
ON 5/31/98 IN INDEX - INCLUDING
REINVESTMENT OF DIVIDENDS. FISCAL
YEAR ENDING DECEMBER 31.
<TABLE>
<CAPTION>
Cumulative Total
Return
--------------------
6/10/98 12/98 12/99
------- ----- ------
<S> <C> <C> <C>
CONRAD INDUSTRIES, INC..................................... 100.00 32.55 27.08
PEER GROUP................................................. 100.00 39.09 29.37
S & P SMALLCAP 600......................................... 100.00 97.09 109.14
</TABLE>
15
<PAGE>
Stock Plan
The Conrad Industries, Inc. 1998 Stock Plan was adopted by the Board of
Directors of the company and approved by the company's stockholders in March
1998. The 1998 Stock Plan permits the granting of any or all of the following
types of awards ("Awards"): stock appreciation rights, stock options,
restricted stock, dividend equivalents, performance units, automatic director
options, phantom shares, limited stock appreciation rights ("LSARs"), bonus
stock and cash tax rights. All officers and employees of, and any consultants
to, the company or any affiliate of the company will be eligible for
participation in all Awards under the 1998 Stock Plan other than director
options. Each non-employee director of the company is entitled to receive (1)
the grant of options to purchase 1,000 shares of Conrad Industries' common
stock upon his initial election to the Board and (2) an annual grant of options
to purchase 1,000 shares of Conrad Industries' common stock, in each case at
the closing sale price of the common stock on the date of grant.
The Board of Directors and stockholders approved an amendment to the 1998
Stock Plan to increase the maximum number of shares of common stock issuable
under the 1998 Stock Plan from 700,000 shares to 950,000 shares.
An aggregate of 950,000 shares of common stock have been authorized and
reserved for issuance pursuant to the 1998 Stock Plan. As of the date of this
Proxy Statement, options to purchase an aggregate of 547,100 shares of common
stock have been granted under the 1998 Stock Plan. The 1998 Stock Plan is
administered by the Compensation Committee of the company's Board of Directors.
The Compensation Committee selects the participants who will receive Awards,
determine the type and terms of Awards to be granted and interpret and
administer the 1998 Stock Plan. No Awards may be granted under the 1998 Stock
Plan after March 31, 2008.
401(k) Plan
Conrad Industries maintains a retirement savings plan, effective as of
August 1997, in which eligible employees of Conrad Industries may elect to
participate. The plan is an individual account plan providing for deferred
compensation as described in Section 401(k) of the Code and is subject to, and
intended to comply with, the Employee Retirement Income Security Act of 1974.
Each eligible employee is permitted to defer receipt of up to 15% of his annual
salary up to the applicable statutory maximum prescribed in the Code. Conrad
Industries may, in its discretion, match employee deferrals in cash. Conrad
Industries currently has elected to match $0.25 for each $1.00 of employee
deferral. The amounts held under the 401(k) Plan are invested among various
investment funds maintained under the 401(k) Plan in accordance with the
directions of each participant. Salary deferral contributions under the 401(k)
Plan are 100% vested. Matching contributions vest at 20% per year commencing
with the second year of service. Participants or their beneficiaries are
entitled to payment of vested benefits upon termination of employment. Conrad
Industries made contributions of approximately $120,000 under the 401(k) plan
in 1999.
Annual Incentive Plan
Conrad Industries has established an annual incentive plan under which key
employees will be awarded cash payments based upon the achievement of certain
performance goals. The aggregate amount shall not exceed five percent of the
company's EBITDA (defined as operating income before depreciation, amortization
and non-cash compensation expenses related to issuance of stock and stock
options to employees). The Board of Directors will determine the actual amount
of the bonus pool, subject to this limitation, and the key employees who would
be recipients of any such cash bonuses and the individual amount of the cash
bonus for each such key employee.
Employment Agreements with Directors and Executive Officers
Conrad Industries has entered into employment and non-competition agreements
with each of J. Parker Conrad, John P. Conrad, Jr., William H. Hidalgo and
Cecil A. Hernandez. These agreements prohibit such
16
<PAGE>
officers from disclosing Conrad Industries' confidential information and trade
secrets and generally restrict these individuals from competing with Conrad
Industries for a period of two years after the termination of their employment.
Each of these agreements has an initial term of three years and provides for
annual extensions at the end of its initial term, subject to the parties'
mutual agreement, and is terminable by the employer for "cause" upon ten day's
notice and without "cause" (1) by the employee upon 30 days' written notice and
(2) by the employer upon approval by a majority of the Board of Directors. The
employment agreements provide that the employer shall pay a base salary of
$220,500 to J. Parker Conrad, $200,000 to John P. Conrad, Jr., $195,290 to
William H. Hidalgo, and $150,000 to Cecil A. Hernandez, which base salaries may
be increased by the Board of Directors. Such agreements also provide that each
executive officer will be reimbursed for out-of-pocket business expenses and
that each executive officer shall be eligible to participate in all benefit
plans and programs as are maintained from time to time by the employer. Each
employment agreement provides that if the officer's employment is terminated by
the employer without "cause" or is terminated by the officer for "good reason,"
the officer shall 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 the greater of (1) the time period remaining under the term of the
agreement or (2) one year. In addition, the time period during which such
officer is restricted from competing with Conrad Industries will be shortened
from two years to one year.
The employment agreements also provide that if the officer's employment is
terminated within two years following a change in control by Conrad Industries
other than for "cause" or by the officer for "good reason," or the officer is
terminated by Conrad Industries within three months prior to the change in
control at the request for the acquirer in anticipation of the change in
control, (1) the officer will be entitled to receive a lump sum severance
amount equal to the greater of (a) in the case of J. Parker Conrad, John P.
Conrad, Jr., and William H. Hidalgo, three years' base salary and, in the case
of Cecil A. Hernandez, two years' base salary or (b) the base salary for
whatever period is then remaining on the initial term; (2) the provisions which
restrict competition with Conrad Industries shall not apply; and (3) if any
payment to the officer is subject to the 20% excise tax on excess parachute
payments, the officers shall be made "whole" on a net after tax basis. A change
in control is generally defined to occur upon (1) the acquisition by any person
of 50% or more of the total voting power of the outstanding securities of
Conrad Industries, (2) the first purchase pursuant to a tender or exchange
offer for Common Stock, (3) the approval by the stockholders of Conrad
Industries of certain mergers, sale of substantially all the assets, or
dissolution of Conrad Industries or (4) a change in a majority of the members
of Conrad Industries' Board of Directors.
In general, a "parachute payment" is any payment made by Conrad Industries
in the nature of compensation that is contingent on a change in control of
Conrad Industries and includes the present value of the accelerations of
vesting and the payment of options and other deferred compensation amounts upon
a change in control. If the aggregate present value of the parachute payments
to certain individuals, including officers, equals or exceeds three times that
individual's "base amount" (generally, the individual's average annual
compensation from Conrad Industries for the five calendar years ending before
the date of the exchange in control), then all parachute amounts in excess of
the base amount are "excess" parachute payments. An individual will be subject
to a 20% excise tax on excess parachute amounts and Conrad Industries will not
be entitled to a tax deduction for such payments.
TRANSACTIONS WITH CERTAIN AFFILIATES
During 1999, Conrad Industries purchased in its ordinary course of business
certain components from Johnny's Propeller Shop, a company wholly owned by John
P. Conrad, Jr., Co-Chairman of the Board of Directors, in the aggregate amount
of approximately $89,000. The Company believes that such transactions were made
on a competitive basis at market prices.
Conrad Industries operated as an S corporation for federal and state income
tax purposes prior to the initial public offering and made cash distributions
to its then current shareholders in order to provide a cash return to them and
to fund their federal and state income tax liabilities relating to Conrad
Industries' S corporation status. In accordance with this practice, during the
first quarter of 1998, Conrad Industries
17
<PAGE>
distributed approximately $506,000 to its then current shareholders and
distributed an additional $1.8 million prior to the effective date of the
initial public offering to fund the shareholders' federal and state income tax
liabilities estimated through the date of termination of its S corporation
status. On May 22, 1998, Conrad Industries made and additional $10 million
distribution to its shareholders, which amount represented undistributed
earnings of Conrad Industries estimated through the date of the termination of
Conrad Industries' S corporation status. Conrad Industries' shareholders
incurred federal and state income taxes on such distribution. Prior to its
initial public offering, Conrad Industries also distributed certain non-
operating assets with an aggregate fair market value of approximately $406,000
to certain stockholders. These assets included certain vehicles and boats.
In 1991, Conrad Industries and J. Parker Conrad, Co-Chairman of the Board of
Directors, entered into a Key Executive Insurance Agreement pursuant to which
each year Conrad Industries has paid $20,000 of the annual premium due under an
insurance policy on Mr. Conrad's life. Conrad Industries was the beneficiary of
$650,000 of the death benefit under the policy. Conrad Industries and Mr.
Conrad terminated this agreement on January 1, 1998, thereby allowing Mr.
Conrad to select the beneficiary of the death benefit.
Certain members of the immediate families of the company's executive
officers, directors and principal stockholders are employees of Conrad
Industries or its subsidiaries. William A. Hidalgo, Jr., the son of William A.
Hidalgo, the President and Chief Executive Officer, is an employee of Conrad
Industries and was paid aggregate compensation of $87,600 during 1999. Daniel
Conrad, the son of John P. Conrad, Jr., is an employee of Conrad Industries and
was paid aggregate compensation of $97,702 during 1999.
On March 31, 1998, Messrs. Hidalgo and Hernandez executed promissory notes
payable to Conrad Industries bearing interest at 9.0% per annum in the amounts
of $239,870 and $97,400, respectively, representing their tax liabilities paid
by Conrad Industries in connection with the issuance of shares of common stock
of Conrad Industries to them. These notes were repaid in full by Messrs.
Hidalgo and Hernandez in July 1998. On March 2, 1999 and April 15, 1999,
Messrs. Hidalgo and Hernandez executed promissory notes payable to Conrad
Industries bearing interest at 9.0% per annum in the amounts of $ 233,327 and
$139,277, respectively, representing their tax liabilities in connection with
common shares issued to them and surrendered during the third quarter of 1998.
See "Report of the Compensation Committee."
Michael J. Harris, a director of Conrad Industries, is a Managing Director
of Morgan Keegan & Company, Inc. Morgan Keegan was the lead managing
underwriter of the initial public offering of Conrad Industries, which was
completed in June 1998, and has provided and may in the future provide
financial advisory services to Conrad Industries.
18
<PAGE>
STOCK OWNERSHIP BY CONRAD INDUSTRIES' LARGEST STOCKHOLDERS AND MANAGEMENT
The following table presents certain information regarding the beneficial
ownership of equity securities of Conrad Industries (which includes shares that
may be acquired on the exercise of stock options vesting within 60 days of
April 20, 2000) at March 31, 2000 by:
. each person who is known by us to own beneficially more than five
percent of the outstanding shares of common stock;
. each director of Conrad Industries;
. our chief executive officer and each of the other executive officers of
Conrad Industries named in the tables under Executive Compensation; and
. all directors and officers as a group, including all stock options
vested through April 20, 2000.
Except as described below, each of the persons listed in the table has sole
voting and investment power with respect to the shares listed.
<TABLE>
<CAPTION>
% of Total
Outstanding
Number of Stock (including
Name Shares Options options)
- ------------------------------------------------ --------- ------- -----------
<S> <C> <C> <C>
J. Parker Conrad................................ 1,170,270 -- 16.5%
John P. Conrad, Jr. (1)......................... 1,779,403 -- 25.1%
Katherine C. Court (2).......................... 1,712,313 -- 24.2%
William H. Hidalgo.............................. 213,918 183,758 5.4%
Cecil A. Hernandez.............................. 85,319 73,067 2.2%
Michael J. Harris (3)........................... 13,000 3,000 *
Louis J. Michot, Jr............................. 1,533 3,000 *
Richard E. Roberson, Jr......................... 3,000 3,000 *
All directors and executive officers as a group
(4) (7 persons)................................ 3,266,443 265,825 48.1%
</TABLE>
- --------
* Less than one percent.
(1) Includes 374,216 shares held by The John P. Conrad, Jr. Trust, 268,609
shares held by The Daniel T. Conrad Trust, 268,609 shares held by The Glenn
Alan Conrad Trust and 268,609 shares held by The Kenneth C. Conrad Trust.
Mr. Conrad, Jr. exercises voting and investment control over these shares
as Trustee for each of these trusts.
(2) Includes 459,161 shares held by The Katherine C. Court Trust and 275,497
shares held by The James P. Court Trust. Ms. Court exercises voting and
investment control over these shares as Trustee for each of these trusts.
(3) Includes 2,000 shares beneficially owned by Mr. Harris' daughters.
(4) Excludes shares beneficially owned by Katherine Court, who is the daughter
of J. Parker Conrad and the sister of John P. Conrad, Jr.
19
<PAGE>
COMPLIANCE WITH SECTION 16(a)
Section 16(a) of the Securities Exchange Act of 1934 requires the company's
directors and officers, and persons who own more than 10% of the company's
common stock, to file initial reports of ownership and reports of changes in
ownership (Forms 3, 4, and 5) of common stock with the Securities and Exchange
Commission and The Nasdaq Stock Market. Officers, directors and greater than
10% stockholders are required by SEC regulations to furnish Conrad Industries
with copies of all such forms that they file.
To Conrad Industries' knowledge, based solely on the company's review of the
copies of such reports received by Conrad Industries and on written
representations by certain reporting persons that no reports on Form 5 were
required, Conrad Industries believes that during the fiscal year ended December
31, 1999, all Section 16(a) filing requirements applicable to its officers,
directors and 10% stockholders were complied with in a timely manner, with the
exception of one late filing on Form 4 by Louis J. Michot, Jr.
STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Under our Bylaws, if you wish to bring any matter (other than stockholder
nominations of director candidates) before the 2001 Annual Meeting, you must
notify the Secretary of Conrad Industries in writing between 60 and 90 days
prior to the anniversary of the 2000 Annual Meeting. However, if the date of
the Annual Meeting of Stockholders is changed by more than 30 calendar days
from the date contemplated at the time of this proxy statement, the notice must
be received by us at least 45 days prior to the date we intend to distribute
our proxy statement with respect to such meeting. Conrad Industries plans to
hold its 2001 Annual Meeting on May 23, 2001.
Notices regarding each matter must contain:
. a brief description of the business to be brought before the Annual
Meeting and the reason for conducting the business at the Annual
Meeting;
. the name and address of record of the stockholder proposing the
business;
. the class and number of shares of stock that are beneficially owned by
the stockholder; and
. any material interest of the stockholder in the business to be
conducted.
If you do not provide the proper notice by March 23, 2001, the Chairman of
the meeting may exclude the matter and thus, it will not be acted upon at the
meeting. If the Chairman does not exclude the matter, the proxies may vote in
the manner they believe appropriate, as the SEC's rules allow.
For a stockholder proposal to be considered for possible inclusion in the
proxy statement for the 2001Annual Meeting, the proposal must be received by
the Secretary of Conrad Industries no later than December 24, 2000. A
nomination or proposal that does not supply adequate information about the
nominee or proposal will be disregarded.
DISCRETIONARY VOTING OF PROXIES ON OTHER MATTERS
Conrad Industries' management does not currently intend to bring any
proposals to the 2000 Annual Meeting other than the election of directors and
the proposals described in this proxy statement. If new proposals requiring a
vote of the stockholders are brought before the meeting in a proper manner, the
persons named in the accompanying proxy card intend to vote the shares
represented by them in accordance with their best judgement.
20
<PAGE>
1999 FORM 10-K
A copy of the Conrad Industries' Annual Report on Form 10-K, including any
financial statements and schedules and exhibits thereto, may be obtained
without charge by written request to Cecil A. Hernandez, Chief Financial
Officer and Secretary, Conrad Industries, Inc., 1501 Front Street, Morgan City,
Louisiana 70381.
By Order of the Board of Directors
/s/ Cecil A. Hernandez
Cecil A. Hernandez
Secretary
April 20, 2000
Morgan City, Louisiana
21
<PAGE>
CONRAD INDUSTRIES, INC.
2000 ANNUAL MEETING OF STOCKHOLDERS
Solicited by the Board of Directors of Conrad Industries, Inc.
The undersigned hereby appoints William H. Hidalgo and Cecil A. Hernandez, and
each of them individually, as proxies, each with power to act without the other
and with full power of substitution, to vote all shares of Common Stock of
Conrad Industries, Inc. that the undersigned would be entitled to vote if
personally present at the 2000 Annual Meeting of Stockholders to be held on May
25, 2000, at 9:00 a.m., local time, at the Petroleum Club of Morgan City, 500
Roderick, Morgan City, Louisiana, or at any adjournment or postponement thereof,
on the proposals listed below, and, in their discretion, on any other matter
that may properly come before the meeting, or any adjournment or postponement
thereof, and any matter presented at the meeting which was not known to the
Board of Directors a reasonable time before the solicitation of this proxy:
Any executed proxy which does not designate a vote shall be deemed to grant
authority for any item not designated.
PROPOSAL 1: ELECTION OF DIRECTORS
[_] FOR all nominees listed below [_] WITHHOLD AUTHORITY for all
nominees listed below
William H. Hidalgo and Michael J. Harris to hold office until the 2003 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.
PROPOSAL 2: APPOINTMENT OF DELOITTE & TOUCHE LLP AS AUDITORS FOR THE COMPANY
[_] FOR [_] AGAINST [_] ABSTAIN
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.
Dated: _____________________________, 2000
________________________________________
Signature
Please sign exactly as name appears on this card. Joint owners should each sign.
Executors, administrators, trustees, etc., should give their full titles.
PLEASE COMPLETE, SIGN AND PROMPTLY MAIL THIS PROXY CARD IN THE ENCLOSED
ENVELOPE.
