<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
KIRBY CORPORATION
- --------------------------------------------------------------------------------
(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):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) 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:
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<PAGE> 2
[KIRBY CORPORATION LOGO]
KIRBY CORPORATION
NOTICE OF
1998
ANNUAL MEETING
AND
PROXY STATEMENT
YOUR VOTE IS IMPORTANT
PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN
YOUR PROXY CARD IN THE ENCLOSED ENVELOPE.
<PAGE> 3
[KIRBY CORPORATION LOGO] KIRBY CORPORATION
1775 ST. JAMES PLACE, SUITE 200
P. O. BOX 1745
HOUSTON, TEXAS 77251-1745
March 4, 1998
Dear Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
Kirby Corporation to be held on Tuesday, April 21, 1998 at 10:00 a.m. (CDT) in
Houston, Texas. Information concerning the meeting is presented on the following
pages.
In addition to the formal items of business to be brought before the
meeting, there will be a report on our Company's operations, followed by a
question and answer period.
Your vote is very important, regardless of the number of shares you own.
Please ensure that your shares will be represented at the meeting by completing,
signing and returning your proxy card in the envelope provided.
Thank you for your continued support of Kirby. We are committed to
continuing to seek ways to grow and to enhance the value of your investment.
Sincerely,
GEORGE A. PETERKIN, JR.
Chairman of the Board
J. H. PYNE
President and Chief Executive
Officer
<PAGE> 4
KIRBY CORPORATION
(A NEVADA CORPORATION)
1775 ST. JAMES PLACE, SUITE 200
P. O. BOX 1745
HOUSTON, TX 77251-1745
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD TUESDAY, APRIL 21, 1998
To the Stockholders of Kirby Corporation:
The Annual Meeting of Stockholders of Kirby Corporation ("the Company")
will be held on Tuesday, April 21, 1998, at The Sheraton Luxury Collection Hotel
(formerly the Ritz Carlton Hotel), 1919 Briar Oaks Lane, Houston, Texas, at
10:00 a.m. (CDT) for the following purposes:
1. Elect nine directors; and
2. Transact such other business as may properly come before the
meeting.
Holders of record of the Company's common stock at the close of business on
March 2, 1998 are entitled to vote at the meeting.
By Order of the Board of Directors,
THOMAS G. ADLER
Secretary
March 4, 1998
<PAGE> 5
KIRBY CORPORATION
---------------------
PROXY STATEMENT
---------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Kirby Corporation (the "Company")
to be voted at the Annual Meeting of Stockholders to be held at The Sheraton
Luxury Collection Hotel (formerly the Ritz Carlton Hotel), 1919 Briar Oaks Lane,
Houston, Texas, on April 21, 1998, at 10:00 a.m. (CDT), and at any adjournments
or postponements thereof. The Notice of Annual Meeting, this Proxy Statement,
the proxy card and the Company's Annual Report, which includes the Annual Report
on Form 10-K for 1997, are being mailed to stockholders on or about March 4,
1998.
Stockholders of record at the close of business on March 2, 1998 will be
entitled to notice of, and to vote at, the Annual Meeting. As of March 2, 1998,
the Company had 24,435,436 outstanding shares of common stock. Each share of
common stock is entitled to one vote. A majority of the outstanding shares of
common stock represented in person or by proxy will constitute a quorum at the
Annual Meeting. Assuming a quorum, the affirmative vote of a plurality of the
votes cast is required for the election of directors. Abstentions and broker
non-votes will be counted for determining a quorum, but not counted as voting
for determining whether a director or proposal has received the necessary number
of votes for election of the director or approval of the proposal.
Your shares will be voted as specified on the enclosed proxy card. If you
do not specify how you want your shares voted, the shares will be voted for the
election of all the directors named in this Proxy Statement and at the
discretion of the proxies on other matters.
You are encouraged to complete, sign and return the proxy card even if you
expect to attend the meeting. You may revoke your proxy at any time before it is
voted at the meeting by executing a later-dated proxy. If you attend the meeting
and wish to vote, your ballot at the meeting will cancel any proxy that you have
previously given.
The cost of soliciting proxies will be borne by the Company. The Company
has retained Corporate Investor Communications, Inc. ("CIC") to solicit proxies
at an estimated cost of $5,000, plus out-of-pocket expenses. Employees of the
Company may also solicit proxies, for which the expense would be nominal and
borne by the Company. Solicitation may be by mail, facsimile, electronic mail,
telephone or personal interview.
ELECTION OF DIRECTORS (ITEM 1)
The Bylaws of the Company provide that the Board of Directors shall consist
of not fewer than three nor more than fifteen members and that the number of
directors, within such limits, shall be determined by resolution of the Board of
Directors at any meeting or by the stockholders at the Annual Meeting. By
resolution of the Board of Directors at its January 20, 1998 meeting, the number
of directors constituting the Board of Directors was set at nine.
It is intended that the shares represented by the enclosed proxy card will
be voted, unless such authority is withheld, for the election of the nine
director nominees named in the following section. Each nominee is presently a
director of the Company. The directors will be elected to serve for the ensuing
year and until their successors have been elected. In the event that any
director nominee should become unavailable to serve as a director, which is not
anticipated, the persons named as proxies in the enclosed proxy card intend to
vote for a nominee who shall be designated by the present Board of Directors to
fill such vacancy.
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<PAGE> 6
RECOMMENDATION OF THE BOARD OF DIRECTORS CONCERNING THE ELECTION OF DIRECTORS
The Board of Directors of the Company unanimously recommends a vote "FOR"
the election of each of the following individuals nominated for election as a
director.
<TABLE>
<S> <C>
George F. Clements, Jr.
[PHOTO] Director since 1985
Age 72
Greenwich, Connecticut
Mr. Clements is an independent oil and gas producer and
private investor. He serves as Chairman of the Audit
Committee and is a member of the Compensation Committee.
C. Sean Day
[PHOTO] Director since 1996
Age 48
Stamford, Connecticut
Mr. Day is President and Chief Executive Officer of Navios
Corporation, a company engaged in the operation of foreign
flag bulk vessels trading worldwide. He serves as a member
of the Audit Committee and Strategic Planning Committee.
Bob G. Gower
[PHOTO] Director since 1998
Age 60
Houston, Texas
Mr. Gower is Chairman and Chief Executive Officer of
Specified Fuels & Chemicals, a custom processor of specialty
chemicals and manufacturer of reference fuels. From 1988 to
1997, he served first as President and then as Chairman of
Lyondell Petrochemical Company. Mr. Gower was appointed to
the Board in January 1998 and serves as a member of the
Audit Committee.
William M. Lamont, Jr.
[PHOTO] Director since 1979
Age 49
Dallas, Texas
Mr. Lamont is a private investor. He serves as Chairman of
the Compensation Committee and is a member of the Executive
Committee and Committee on Directors and Board Governance.
George A. Peterkin, Jr.
[PHOTO] Director since 1973
Age 70
Houston, Texas
Mr. Peterkin has served as Chairman of the Board of the
Company since April 1995. He served as President from 1973
to 1995 and serves as a member of the Executive Committee,
Committee on Directors and Board Governance and Strategic
Planning Committee. He also served as President of the
Company's predecessor company, Kirby Industries, Inc., from
1973 to 1976 and as a Director of Kirby Industries, Inc.
from 1969 to 1976.
</TABLE>
3
<PAGE> 7
<TABLE>
<S> <C>
J. H. Pyne
[PHOTO] Director since 1988
Age 50
Houston, Texas
Mr. Pyne has served as President and Chief Executive Officer
of the Company since April 1995. He served as Executive Vice
President from 1992 to 1995 and has also served as President
of Kirby Inland Marine, Inc. (formerly Dixie Carriers,
Inc.), the Company's principal transportation subsidiary,
since 1984. He serves as a member of the Executive
Committee, Committee on Directors and Board Governance and
Strategic Planning Committee.
Robert G. Stone, Jr.
[PHOTO] Director since 1983
Age 75
Greenwich, Connecticut
Mr. Stone is a private investor. He has served as Chairman
Emeritus of the Company since 1995, and served as Chairman
of the Board of the Company from 1983 to 1995. He serves as
Chairman of the Committee on Directors and Board Governance
and is a member of the Executive Committee, Compensation
Committee and Strategic Planning Committee. He is also a
director of Core Industries Inc., NovaCare, Inc., Russell
Reynolds Associates, Inc. and Tejas Gas Corporation.
Thomas M. Taylor
[PHOTO] Director since 1996
Age 55
Fort Worth, Texas
Mr. Taylor is President of Thomas M. Taylor & Co., an
investment consulting firm. He is a member of the
Compensation Committee, Committee on Directors and Board
Governance and Strategic Planning Committee. He is also a
director of Encal Energy Ltd., La Quinta Inns, Inc.,
MacMillan Bloedel Limited, Moore Corporation Limited, and
John Wiley & Sons, Inc.
J. Virgil Waggoner
[PHOTO] Director since 1993
Age 70
Houston, Texas
Mr. Waggoner is a private investor. He served as President
and Chief Executive Officer of Sterling Chemicals, Inc. from
1986 to 1996. He is a member of the Audit Committee and
Compensation Committee. He is also a director of Sterling
Chemicals, Inc. and Gulfwest Oil Company.
</TABLE>
Except as noted, each of the nominees for director has been engaged in his
principal occupation for more than the past five years.
<TABLE>
<S> <C>
ADVISORY DIRECTOR
Henry Gilchrist
[PHOTO] Advisory Director since 1987
Age 73
Dallas, Texas
Mr. Gilchrist was elected by the Board of Directors in 1987
to serve as an advisory director. Mr. Gilchrist served as a
director of the Company from 1976 to 1987, and served as
Secretary and General Counsel from 1976 to 1997. Mr.
Gilchrist is a member of the law firm of Jenkens &
Gilchrist, a Professional Corporation.
</TABLE>
In his capacity as an advisory director, Mr. Gilchrist is invited to attend
meetings of the Board of Directors and to participate in Board discussions.
However, Mr. Gilchrist is not entitled to vote on matters
4
<PAGE> 8
submitted for Board approval and is not involved in the administration or
management of the Company. Mr. Gilchrist also serves as an advisory member of
the Compensation Committee of the Board. See "Committee Meetings." Mr. Gilchrist
is invited to attend these Committee meetings and participate in Committee
discussions, but is not entitled to vote on matters submitted for Committee
approval. The selection of advisory directors and advisory committee members is
made by the Board of Directors, and stockholders do not have a vote on these
selections. During 1997, the Company retained Jenkens & Gilchrist, a
Professional Corporation, to perform various legal services and expects to
retain such firm to perform legal services in 1998.
BOARD OF DIRECTORS MEETINGS
During 1997, the Board of Directors held eight meetings and each director
attended more than 75% of all meetings of the Board and of each Board Committee
on which such director served. Mr. Peterkin and Mr. Pyne were employed by the
Company for all of 1997 and, therefore, received no remuneration for serving on
the Board of Directors or its Committees.
COMMITTEE MEETINGS
The Board of Directors has established five standing Committees, including
the Audit Committee, the Compensation Committee and the Committee on Directors
and Board Governance, each of which is briefly described below. Each of those
three Committees meets regularly during the year and promptly following each
meeting advises the full Board of Directors of its actions and recommendations.
The other Committees of the Board include the Executive Committee and the
Strategic Planning Committee.
Audit Committee -- The Audit Committee, which consists of Mr. Clements
(Chairman), Mr. Day, Mr. Gower and Mr. Waggoner, all nonemployee directors, held
three meetings during 1997. The Committee has the responsibility for
recommending the engagement or discharge of the Company's independent public
accountants. The Committee reviews with the independent public accountants the
scope of the audit, the fees for the audit and related matters (including
nonaudit services), receives copies of the annual comments from the independent
public accountants on accounting procedures and systems of control, and reviews
with them any questions, comments or suggestions they may have relating to the
internal controls, accounting practices or procedures of the Company. Additional
responsibilities include reviewing the program of the Company's internal
auditor, including procedures for assuring implementation of accepted
recommendations made by the independent public accountants, and receiving
summaries of all audit reports issued by the internal auditor.
Compensation Committee -- The Compensation Committee, which consists of Mr.
Lamont (Chairman), Mr. Clements, Mr. Stone, Mr. Taylor and Mr. Waggoner, all
nonemployee directors, and Mr. Gilchrist, as an advisory member, held six
meetings during 1997. The Committee reviews all compensation of the Company's
officers and key employees and makes compensation recommendations to the Board.
In addition, the Committee administers the Company's stock option plans and
grants stock options under such plans. The Committee's report on executive
compensation is set forth beginning on page 8.
Committee on Directors and Board Governance -- In April 1997, the Board
established a Committee on Directors and Board Governance. The Committee, which
consists of Mr. Stone (Chairman), Mr. Lamont, Mr. Peterkin, Mr. Pyne and Mr.
Taylor, held two meetings during 1997. The Committee maintains oversight of
Board operations and effectiveness, evaluates the performance of the Board and
its individual members, including the Chairman and the Company's President,
reviews the size and composition of the Board and reviews the qualifications of
candidates for Board membership. The Committee will consider candidates
suggested by stockholders. Suggestions for candidates, accompanied by
biographical information for evaluation, may be sent to the Secretary of the
Company at its principal office address.
DIRECTOR COMPENSATION
During 1997, each non-employee director and advisory director received an
annual retainer of $10,000, received $1,000 for each Board meeting attended and
$750 for each Committee meeting attended ($500 if a Committee meets on the same
day and same place as a meeting of the Board). The Chairman of each Committee
received an additional annual retainer of $2,500. Directors and advisory
directors are reimbursed
5
<PAGE> 9
for reasonable expenses incurred for attending the meetings. There are no family
relationships among any directors of the Company.
The Company has two director stock option plans, the 1989 Director Stock
Option Plan (the "1989 Director Plan") and the 1994 Nonemployee Director Stock
Option Plan (the "1994 Director Plan").
The 1989 Director Plan provides for the one-time granting to non-employee
directors of stock options to purchase the Company's common stock. In 1994, the
1989 Director Plan was amended, with the automatic grant to future directors
reduced from 10,000 shares to 5,000 shares of common stock. Currently, Mr.
Clements, Mr. Lamont, Mr. Stone and Mr. Waggoner each hold options under the
1989 Director Plan for 10,000 shares of common stock. Mr. Day, Mr. Gower and Mr.
Taylor each hold options under the 1989 Director Plan for 5,000 shares of common
stock.
The 1994 Director Plan provides for the automatic granting to nonemployee
directors or advisory directors of stock options to purchase the Company's
common stock. In January 1994, each nonemployee director or advisory director
received an option to purchase 1,500 shares of common stock. On the first
business day immediately following the Annual Meeting of Stockholders, beginning
with the 1994 meeting, each nonemployee director or advisory director, received,
or will receive, an option to purchase 1,500 shares of the Company's common
stock at the fair market value of such stock on such date. Currently, under the
1994 Director Plan, Mr. Clements, Mr. Lamont, Mr. Stone, Mr. Waggoner and Mr.
Gilchrist each hold options for 7,500 shares of common stock. Mr. Day and Mr.
Taylor each hold options for 3,000 shares of common stock.
The Company also has a 1993 Nonqualified Stock Option for Robert G. Stone,
Jr. (the "Stone Option"). The Stone Option provided for the grant to Mr. Stone,
in July 1993, of a stock option to purchase 25,000 shares of the Company's
common stock. The purpose of the Stone Option is to provide an incentive to
retain Mr. Stone as Chairman Emeritus of the Board or as a member of the Board.
TRANSACTIONS WITH DIRECTORS AND OFFICERS
During 1997, the Company provided marine transportation services to Navios
Corporation. Mr. Day is President and Chief Executive Officer of Navios
Corporation. Such services were provided in the ordinary course of business of
the Company and Navios Corporation and were entered into on an arm's-length
basis. In 1997, the dollar value of such transactions was approximately
$237,813. The Company anticipates that similar services will be rendered in
1998.
During 1997, the Company provided marine transportation services to
Sterling Chemicals, Inc. Mr. Waggoner is a director and the former President of
Sterling Chemicals, Inc. Such services were provided in the ordinary course of
business of the Company and Sterling Chemicals, Inc. and were entered into on an
arm's-length basis. In 1997, the dollar value of such transactions was
approximately $376,494. The Company anticipates that similar services will be
rendered in 1998.
6
<PAGE> 10
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of March 2, 1998 regarding
beneficial ownership of common stock by each director, each named executive
officer listed in the Summary Compensation Table, and by the directors and
executive officers of the Company as a group. Under rules of the Securities and
Exchange Commission ("SEC"), "beneficial ownership" is deemed to include shares
for which the individual, directly or indirectly, has or shares voting or
investment power, whether or not they are held for the individual's benefit.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED ON MARCH 2, 1998
--------------------------------------------------- PERCENT
VOTING OR OF
INVESTMENT RIGHT TO COMMON
DIRECT(1) POWER(2) ACQUIRE(3) TOTAL STOCK(3)(4)
--------- ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
DIRECTORS
George F. Clements, Jr............... 10,000 17,500 27,500
C. Sean Day.......................... 8,000 8,000
Bob G. Gower......................... 5,000 5,000
William M. Lamont, Jr................ 3,142(5) 17,500 20,642
George A. Peterkin, Jr............... 457,116(6) 93,750 550,866 2.2%
J. H. Pyne........................... 81,868 151,250 233,118
Robert G. Stone, Jr.................. 120,450(7) 42,500 162,950
Thomas M. Taylor..................... 3,218,700 8,000 3,226,700 13.2%
J. Virgil Waggoner................... 6,000 17,500 23,500
NAMED EXECUTIVES
Brian K. Harrington.................. 5,814 108,750 114,564
Ronald C. Dansby..................... 85,000 85,000
Dorman L. Strahan.................... 46,500 46,500
Directors and Executive Officers as a
group (13 in number)............... 698,803 3,218,700 627,875 4,545,378 18.1%
</TABLE>
- ---------------
(1) Shares held individually or jointly with others, or in the name of a bank,
broker or nominee for the individual's account. Also includes shares held
under the Company's 401(k) plan.
(2) Shares with respect to which directors or executive officers have or share
voting or investment power. Mr. Taylor may be deemed to be the beneficial
owner of 3,218,700 shares owned by Portfolio A Investors, L.P. ("PAI")
because he is the sole stockholder of Trinity Capital Management, Inc.,
which is the sole general partner of TF Investors, L.P., which is the sole
general partner of Trinity I Fund, L.P., which is the sole stockholder of
Portfolio Associates, Inc., which is the sole general partner of PAI.
(3) The number of shares and percentage ownership of common stock for each
person named assumes that shares of common stock issuable to that person
upon the exercise of currently exercisable stock options or stock options
exercisable within 60 days after the Record Date are outstanding. The number
of shares and percentage ownership of common stock for the named directors
and executive officers as a group assumes that all of the shares shown as
beneficially owned by each of such persons are outstanding.
(4) Unless otherwise indicated, beneficial ownership of any named individual is
less than 1% of the outstanding shares of common stock.
(5) Does not include 409,069 shares owned by his wife, Mary Noel Lamont, or
505,171 shares owned by trusts of which Ms. Lamont is the beneficiary. Mr.
Lamont disclaims beneficial ownership of all 914,240 shares.
(6) Includes 144,300 shares owned by trusts for which Mr. Peterkin is trustee,
the beneficiaries of which are relatives of his or his wife. Mr. Peterkin
disclaims beneficial ownership of such shares.
(7) Does not include 6,405 shares owned by a trust of which Mr. Stone is the
trustee and in which he has a contingent remainder interest and 10,000
shares owned by a trust of which Mr. Stone is trustee. Also does not include
16,000 shares owned by his wife. Mr. Stone disclaims beneficial ownership of
the foregoing shares.
7
<PAGE> 11
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board of Directors of the Company has a standing Compensation Committee
whose functions are to (1) make recommendations to the Board of Directors
regarding compensation policies, including salary, bonuses and other
compensation, (2) administer all of the Company's stock option plans, and (3)
grant stock options under the Company's stock option plans, except those plans
as to which grants of options are automatic and those as to which no additional
options may be granted. The Compensation Committee held six meetings in 1997. In
1997, the Board of Directors did not modify or reject in any material way any
action or recommendation of the Compensation Committee. The Compensation
Committee is composed of five members and one advisory member, none of whom are
employees of the Company and all of whom are "Disinterested Persons" or "Outside
Directors" as defined in the various Company stock option plans.
Compensation of executive officers is based primarily on three elements:
(1) base salary, (2) annual incentives, such as bonuses, and (3) long-term
incentives, primarily stock options. The basic goal is to pay compensation
comparable to similar corporations, giving due regard to relative financial
performance, and to tie annual incentives and long-term incentives to corporate
performance and a return to the Company's stockholders.
With regard to base salary, the objective is to set compensation at
somewhat below the competitive median for similar positions in similar
companies, and the Compensation Committee believes that this has generally been
achieved.
With regard to the annual cash incentives for an executive officer,
exclusive of base salary, the Compensation Committee attempts to set bonuses at
a level such that, with a positive performance by the executive officer, and a
certain level of profitability by the Company, the total compensation for such
executive officer, being base salary plus annual cash incentives, should be
above the median total cash compensation of similar corporations and positions.
The Compensation Committee believes that total annual cash compensation above
the median for similar corporations and positions is appropriate since a
significant portion of each executive officer's total annual cash compensation
is at risk due to both individual as well as company performance factors.
The executive officers of the Company's marine transportation group are
considered for annual incentive bonuses based on a Return on Invested Capital
formula that calculates a bonus pool and then distributes such bonus pool to
executive officers based on company and individual performance.
Annual incentive bonuses for corporate executive officers who do not work
for any of the Company's operating groups are recommended by the Compensation
Committee and are determined by the nonmanagement members of the Board of
Directors. Major factors in determining these bonuses are the perceived
individual contributions and the correlation of such contributions to the
overall corporate performance, the level of bonuses paid to executive officers
in the marine transportation groups and the strategic and financial performance
of the Company.
Stock options granted to executive officers and other Company employees
have been granted at a price equal to the fair market value of Common Stock on
the date of grant and, except for the Premium Stock Options granted on November
5, 1996 (the "Premium Stock Options"), generally vest in equal increments over a
period of four years and, unless earlier terminated, are for a period of ten
years. The Premium Stock Options are for a period of ten years. Fifty percent of
the Premium Stock Options may be exercised if the price of the Company's Common
Stock exceeds $28.73 per share for twenty consecutive business days prior to the
fourth anniversary of the date of grant. All of the Premium Stock Options may be
exercised if the price of the Company's Common Stock exceeds $30.88 per share
for twenty consecutive business days prior to the fourth anniversary of the date
of the grant. All of the Premium Stock Options may be exercised after the ninth
anniversary of the date of the grant.
The Compensation Committee's objective for long-term incentive compensation
for executive officers is the median for long-term incentive compensation of
similar corporations and positions, giving effect to the Company's long-term
performance relative to its peers.
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<PAGE> 12
In addition to retirement, health care and similar benefits, the primary
long-term incentives for executive officers are options under the Company's
stock option plans. Generally, in January or December of each year, stock option
awards have been considered by the Compensation Committee, which has made
recommendations to the Board of Directors; however, beginning February 1, 1994,
such stock option awards are made by the Compensation Committee. The
Compensation Committee believes that the Company's long-term executive officer
compensation, as evidenced by the options granted to date, does not exceed the
value of stock options granted by similar companies to their executive officers
holding similar positions.
The Compensation Committee encounters certain difficulties in establishing
a peer group of companies for compensation comparison purposes because there are
few publicly traded marine transportation companies of similar size and none
with a similar service mix. Some other marine transportation companies are
limited partnerships or subsidiaries of larger public corporations, again making
comparisons difficult. The Compensation Committee also compares the Company's
executive compensation to the executive compensation of similar-sized publicly
held industrial companies.
Based on information available to it, the Compensation Committee believes
that the Company's executive compensation is consistent with the criteria set
forth above. The Compensation Committee recognizes that certain elements of
executive compensation are determined on a subjective basis; however, the
Compensation Committee believes that, since it is satisfied that total executive
compensation is not excessive, these procedures are better for both the Company
and its executives than would be a rigid formula-driven system. The Compensation
Committee recognizes that external factors, such as flood waters, low water
levels and other weather-related conditions, as well as the general business
climate, and the demand for the movement of refined products and industrial
chemicals, impact the Company's earnings, and the Compensation Committee looks
to longer-term results rather than endeavoring to equate compensation to some
annual percentage of earnings or increased earnings.
On October 18, 1994, on the recommendation of the Compensation Committee,
the Board of Directors adopted an unfunded, non-qualified Deferred Compensation
Plan for Key Employees effective January 1, 1992, which Plan was designed
primarily to provide additional benefits to eligible employees to restore
benefits to which they would be entitled under the Company's Qualified
Retirement Program were it not for certain limits imposed by the Internal
Revenue Code. The Plan is designed to restore benefits for employees being
compensated in excess of $150,000 per annum.
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to any of the Chief Executive Officer and four other most highly
compensated executive officers. Certain performance-based compensation, however,
is specifically exempt from the deduction limit. The Compensation Committee did
take the steps necessary to qualify the Premium Stock Options awarded to
executive officers under the Company's 1996 Employee Stock Option Plan for
deductibility under Section 162(m) of the Internal Revenue Code. The
Compensation Committee considers the net cost to the Company in making all
compensation decisions.
On the recommendation of the Compensation Committee, the 1997 base salary
compensation for J. H. Pyne, the Company's Chief Executive Officer, was
established at $325,000 by the Company's Board of Directors effective January
21, 1997. The $140,103 bonus paid to Mr. Pyne in 1997, which was earned in 1996,
was determined by the Company's Board of Directors on April 15, 1997, on the
recommendation of the Compensation Committee.
The Chief Executive Officer's base pay and bonus were generally based on
the same factors and criteria outlined above, being compensation paid to chief
executives of corporations of similar size, individual as well as corporate
performance and a general correlation with compensation of other executive
officers of the Company.
Following the adoption of the Premium Stock Option Program and the granting
of Premium Stock Options thereunder in 1996, the Compensation Committee did not
grant any stock options to the Company's principal executive officers in 1997.
The Compensation Committee generally has granted stock options based on its
belief that stock options are a key element in the Company's executive
compensation policy. The
9
<PAGE> 13
Compensation Committee grants stock options for executive officers based on its
evaluation of individual performance and the Company's overall performance. The
Compensation Committee recognizes that there is a significant subjective element
in this procedure, but believes that such procedure is better suited to the
Company than would be a formula-driven policy. Total options outstanding at the
end of 1997 were for 1,016,350 shares, excluding the Premium Stock Options,
constituting 4.2% of the then outstanding common stock of the Company, and
901,000 shares in the Premium Stock Option Program, constituting 3.7% of the
then outstanding common stock of the Company, assuming all such options were
fully exercised. The Compensation Committee believes that options in this amount
are justified and are within the range of similar corporations that consider
stock options an important part of their executive compensation package and that
the options held by the Chief Executive Officer are an appropriate portion of
the total options. The Compensation Committee believes that the Premium Stock
Option Program places a greater proportion of the compensation of senior
executives at risk under an incentive program which is clearly aligned with the
creation of stockholder value.
COMPENSATION COMMITTEE
William M. Lamont, Jr., Chairman
George F. Clements, Jr.
Robert G. Stone, Jr.
Thomas M. Taylor
J. Virgil Waggoner
Henry Gilchrist, Advisory Member
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Mr. Lamont, Mr. Clements, Mr.
Stone, Mr. Taylor and Mr. Waggoner. No member of the Compensation Committee is
or has been an officer or employee of the Company or any of its subsidiaries.
Mr. Gilchrist, a nonvoting advisory member of the Compensation Committee, served
as the Secretary of the Company until April 1997, but was not and is not an
employee of the Company. During 1997, the Company provided marine transportation
services to companies with which Mr. Day and Mr. Waggoner have relationships.
See "Transactions with Directors and Officers." In 1997, no executive officers
of the Company served on the board of directors or compensation committee of
another entity, any of whose executive officers served on the Board of Directors
or Compensation Committee of the Company.
10
<PAGE> 14
PRINCIPAL STOCKHOLDERS
The following table and notes set forth information as of the dates
indicated concerning persons known to the Company to be the beneficial owner of
more than 5% of the Company's outstanding common stock:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME AND ADDRESS BENEFICIALLY OWNED(1) OF CLASS
---------------- --------------------- --------
<S> <C> <C>
Portfolio A Investors, L.P............................... 3,218,700(2)(3) 13.2%
201 Main Street, Suite 2600
Fort Worth, Texas 76102
Luther King Capital Management Corporation............... 2,167,345(4) 8.9%
301 Commerce Street, Suite 1600
Fort Worth, Texas 76102
GeoCapital, LLC.......................................... 2,024,130(5) 8.3%
767 Fifth Avenue, 45th Floor
New York, NY 10153
Shapiro Capital Management, Inc.......................... 1,420,100(6) 5.8%
3060 Peachtree Road, Suite 1555
Atlanta, GA 30305
</TABLE>
- ---------------
(1) To the Company's knowledge, all of the shares are directly owned by the
named entities; none were subject to options or other rights to acquire
beneficial ownerships in the future.
(2) Based on information provided to the Company by PAI dated January 22, 1998.
(3) Does not include 8,000 shares subject to presently exercisable stock options
held by Mr. Taylor, a director of the Company, who may also be deemed to be
a beneficial owner of the shares held by PAI as explained in footnote 2 to
the table under "Beneficial Ownership of Common Stock."
(4) Based on Schedule 13D, dated February 11, 1998, filed by Luther King Capital
Management Corporation with the SEC.
(5) Based on Schedule 13G, dated February 13, 1998, filed by GeoCapital, LLC
with the SEC.
(6) Based on information provided to the Company by Shapiro Capital Management,
Inc. dated February 18, 1998.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's directors and officers, and persons who own beneficially more
than 10% of the Company's common stock, are required under Section 16(a) of the
Securities Exchange Act of 1934 to file reports of beneficial ownership and
changes in beneficial ownership of the Company's common stock with the SEC and
the New York Stock Exchange. Based solely on a review of the copies of reports
furnished to the Company and written representations that no other reports were
required, the Company believes that during 1997 all filing requirements were
complied with.
11
<PAGE> 15
SUMMARY COMPENSATION TABLE
The following table summarizes compensation earned in 1995, 1996 and 1997
by the Chief Executive Officer and the four other highest paid executive
officers (the "named officers") for 1997:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
NAME AND --------------------- ------------ ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS COMPENSATION
------------------ ---- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
J. H. Pyne....................................... 1997 $334,360 $ --(1) --(2) $ --(3)
President, Director and 1996 309,360 140,103 475,000 26,555
Chief Executive Officer 1995 288,674 120,000 25,000 87,537
George A. Peterkin, Jr........................... 1997 209,360 --(1) --(2) --(3)
Chairman of the 1996 234,360 85,000 61,000 26,555
Board of Directors 1995 283,046 100,000 25,000 38,650
Brian K. Harrington.............................. 1997 189,360 --(1) --(2) --(3)
Senior Vice President and 1996 180,560 70,000 97,000 26,555
Treasurer 1995 173,960 64,000 15,000 27,042
Ronald C. Dansby................................. 1997 214,380 --(1) --(2) --(3)
President -- Inland Division 1996 193,560 94,000 164,000 26,555
1995 186,360 85,000 25,000 26,324
Dorman L. Strahan................................ 1997 152,760 --(1) --(2) --(3)
President -- Diesel Repair 1996 135,760 60,000 82,000 20,638
Division 1995 129,160 50,000 22,000 16,789
</TABLE>
- ---------------
(1) Bonuses for the 1997 year, payable in 1998, have not been determined as of
the date of this Proxy Statement.
(2) No options were granted to the named officers during 1997.
(3) Represents the aggregate value of the Company's contributions under the
Company's Profit Sharing Plan, 401(k) Plan and Excess Benefit Plan. The
Company's contributions under these deferred contribution plans for the 1997
year have not been determined as of the date of this Proxy Statement, except
for the Company's matching contributions under the Company's 401(k) Plan,
pursuant to which matching contributions to the individual accounts were as
follows: $4,800 each to Mr. Pyne, Mr. Peterkin, Mr. Harrington and Mr.
Dansby and $4,123 to Mr. Strahan.
AGGREGATED OPTION EXERCISES IN 1997 AND 1997 YEAR-END OPTION VALUES
The following table summarizes the value of the options held by the named
officers at year-end 1997. During 1997, no named officer exercised stock
options.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1997 DECEMBER 31, 1997(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
J. H. Pyne...................................... 162,500 487,500 $1,340,469 $66,406
George A. Peterkin, Jr.......................... 151,250 74,750 1,453,750 55,625
Brian K. Harrington............................. 97,500 104,500 652,969 39,844
Ronald C. Dansby................................ 82,500 176,500 582,188 27,500
Dorman L. Strahan............................... 44,000 93,000 210,313 23,000
</TABLE>
- ---------------
(1) Based on the closing price of the Company's common stock of $19.3125 on
December 31, 1997.
12
<PAGE> 16
COMPENSATION AGREEMENTS
Kirby Inland Marine, Inc. (formerly named Dixie Carriers, Inc.) has a
Deferred Compensation Agreement with Mr. Pyne in connection with his employment
as its President. The agreement provides for benefits to Mr. Pyne totaling
$4,175 per month commencing upon the later of his severance from the employment
of Kirby Inland Marine, Inc., or his 65th birthday, and continuing until the
month of his death. If Mr. Pyne should die prior to receiving such deferred
compensation, the agreement provides for monthly payments to his beneficiary for
a period of sixty months. The agreement also provides that no benefits will be
paid if Mr. Pyne is terminated for cause (as defined in the agreement).
The Company has an unfunded, nonqualified Deferred Compensation Plan for
key employees which was adopted in October 1994, effective January 1, 1992. The
Plan, which is designed primarily to provide additional benefits to eligible
employees to restore benefits to which they would be entitled under the
Company's Profit Sharing Plan and 401(k) Plan were it not for certain limits
imposed by the Internal Revenue Code. The benefits under the Deferred
Compensation Plan are designed to restore benefits for employees being
compensated in excess of $150,000 per year. The following table discloses for
the named officers the amount of contributions to the Deferred Compensation Plan
for the 1995 and 1996 years. Contributions for the 1997 year have not been
determined as of the date of this Proxy Statement.
<TABLE>
<CAPTION>
DEFERRED
COMPENSATION PLAN
------------------
1995 1996
------- -------
<S> <C> <C>
J. H. Pyne.................................................. $22,375 $26,545
George A. Peterkin, Jr...................................... 21,402 13,639
Brian K. Harrington......................................... 2,530 3,748
Ronald C. Dansby............................................ 4,675 6,049
</TABLE>
13
<PAGE> 17
COMMON STOCK PERFORMANCE GRAPH
The following performance graph compares the five-year cumulative return of
the Company's Common Stock with that of the Standard & Poor's 500 Index (the
"S&P 500 Index") and the Dow Jones Marine Transportation Index:
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG KIRBY CORPORATION, THE S&P 500 INDEX
AND THE DOW JONES MARINE TRANSPORTATION INDEX
<TABLE>
<CAPTION>
DOW JONES
MEASUREMENT PERIOD KIRBY MARINE
(FISCAL YEAR COVERED) CORPORATION S&P 500 INDEX TRANSPORTATION
<S> <C> <C> <C>
12/92 100 100 100
12/93 163 110 128
12/94 150 112 118
12/95 124 153 134
12/96 150 189 164
12/97 147 252 197
</TABLE>
Each index assumes $100 invested at December 31, 1992, and is calculated
assuming quarterly reinvestment of dividends and quarterly weighting by market
capitalization.
OTHER BUSINESS (ITEM 2)
The Board of Directors knows of no other business to be brought before the
Annual Meeting. However, if any other matters are properly presented, it is the
intention of the persons named in the accompanying proxy to take such action as
in their judgment is in the best interest of the Company and its stockholders.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP served as the Company's principal independent public
accountants during 1997 and will continue to serve as the Company's principal
independent public accountants for the current year. Representatives of KPMG
Peat Marwick LLP are expected to be present at the 1998 Annual Meeting of
Stockholders, with the opportunity to make a statement if they desire to do so,
and are expected to be available to respond to appropriate questions.
14
<PAGE> 18
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Shareholder proposals intended to be presented at the Company's 1999 Annual
Meeting must be received by the Company no later than November 4, 1998 and must
otherwise comply with the requirements of the Securities and Exchange Commission
to be considered for inclusion in the Company's proxy statement and form of
proxy relating to that meeting.
BY ORDER OF THE BOARD OF DIRECTORS
THOMAS G. ADLER
Secretary
March 4, 1998
Houston, Texas
15
<PAGE> 19
KIRBY CORPORATION
1775 ST. JAMES PLACE, SUITE 200
P.O. BOX 1745
HOUSTON, TEXAS 77251-1745
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF KIRBY CORPORATION.
R
The undersigned hereby appoints George A. Peterkin, Jr., J. H. Pyne,
O G. Stephen Holcomb and Thomas G. Adler, and each of them, as Proxies,
each with the power to appoint his substitute, and hereby authorizes each
X to represent and to vote, as designated below, all the shares of common
stock, par value $0.10 per share, of Kirby Corporation (the "Company")
Y held of record by the undersigned on March 2, 1998, the Record Date, at
the Annual Meeting of Stockholders to be held on April 21, 1998, at The
Sheraton Luxury Collection Hotel (formerly the Ritz Carlton Hotel), 1919
Briar Oaks Lane, Houston, Texas, at 10:00 a.m. (CDT) and any
adjournment(s) thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE PERSONS LISTED IN ITEM 1 AND
SHOULD ANY OF THEM BECOME UNAVAILABLE FOR NOMINATION OR ELECTION OR
REFUSE TO BE NOMINATED OR ACCEPT ELECTION AS A DIRECTOR OF THE COMPANY,
THE PROXY WILL BE VOTED FOR THE ELECTION OF SUCH PERSON OR PERSONS AS MAY
BE NOMINATED OR DESIGNATED BY THE BOARD OF DIRECTORS. THE PROXIES WILL
USE THEIR DISCRETION WITH RESPECT TO ANY MATTER REFERRED TO IN ITEM 2.
-----------
SEE REVERSE
SIDE
(PLEASE DATE AND SIGN ON REVERSE SIDE) -----------
<PAGE> 20
PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE.
PLEASE MARK BOXES IN BLUE OR BLACK INK.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL" OF THE FOLLOWING PROPOSALS:
1. To elect nine (9) directors to hold office until the next annual election
of directors by stockholders or until their respective successors shall have
been duly elected and shall have qualified.
NOMINEES: George F. Clements, Jr., C. Sean Day, Bob G. Gower, William M.
Lamont, Jr., George A. Peterkin, Jr., J. H. Pyne, Robert G. Stone, Jr.,
Thomas M. Taylor, J. Virgil Waggoner.
FOR WITHHELD
/ / / /
/ / ______________________________________
For all nominees except as noted above
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
FOR AGAINST ABSTAIN
/ / / / / /
MARK HERE FOR ADDRESS CHANGE AT RIGHT / /
Please execute this proxy as your name(s) appear(s) hereon. When shares are
held by joint owners, both should sign. When signing as attorney, executor,
administrator, trustee, guardian, or other fiduciary or representative
capacity, please set forth the full title. If a corporation, please sign in
full corporate name by president or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
Signature: ____________________________________ Date ___________________
Signature: ____________________________________ Date ___________________
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
