<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:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] 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):
[X] 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
1999
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 1, 1999
Dear Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
Kirby Corporation to be held on Tuesday, April 20, 1999 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,
/s/ GEORGE A. PETERKIN, JR.
GEORGE A. PETERKIN, JR.
Chairman of the Board
/s/ J. H. PYNE
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, TEXAS 77251-1745
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD TUESDAY, APRIL 20, 1999
To the Stockholders of Kirby Corporation:
The Annual Meeting of Stockholders of Kirby Corporation (the "Company")
will be held on Tuesday, April 20, 1999, at The Sheraton Luxury Collection
Hotel, 1919 Briar Oaks Lane, Houston, Texas, at 10:00 a.m. (CDT) for the
following purposes:
1. Elect eight 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 1, 1999 are entitled to vote at the meeting.
By Order of the Board of Directors,
THOMAS G. ADLER
Secretary
March 1, 1999
<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, 1919 Briar Oaks Lane, Houston, Texas, on April 20,
1999, 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 1998, are being
mailed to stockholders on or about March 5, 1999.
Stockholders of record at the close of business on March 1, 1999 will be
entitled to notice of, and to vote at, the Annual Meeting. As of March 1, 1999,
the Company had 20,141,894 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 19, 1999 meeting, the number
of directors constituting the Board of Directors was set at eight.
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 eight
director nominees named in the following section. Each nominee is presently a
director of the Company. George F. Clements, Jr., who has served as a director
since 1985, has decided not to stand for reelection as a director. 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.
2
<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>
C. Sean Day
[PHOTO] Director since 1996
Age 49
Stamford, Connecticut
Mr. Day served as President and Chief Executive Officer of
Navios Corporation, a foreign flag bulk vessel operator,
until February 28, 1999. He serves as a member of the Audit
Committee and Strategic Planning Committee. He is also a
director of Teekay Shipping Corporation and Sparkling
Springs Water Group.
Bob G. Gower
[PHOTO] Director since 1998
Age 61
Houston, Texas
Mr. Gower is Chairman and Chief Executive Officer of
Specified Fuels & Chemicals L.L.C., 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 serves
as a member of the Audit Committee.
William M. Lamont, Jr.
[PHOTO] Director since 1979
Age 50
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 71
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.
J. H. Pyne
[PHOTO] Director since 1988
Age 51
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., 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.
</TABLE>
3
<PAGE> 7
<TABLE>
<S> <C>
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 56
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 Agrium, Inc., Encal Energy Ltd., The Loewen
Group, Inc., MacMillan Bloedel Limited, Meditrust
Corporation, Moore Corporation Limited and John Wiley &
Sons, Inc.
J. Virgil Waggoner
[PHOTO] Director since 1993
Age 71
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 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 74
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 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
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 1998, the Company
retained Jenkens & Gilchrist, a Professional Corporation, to perform various
legal services and expects to retain such firm to perform legal services in
1999.
4
<PAGE> 8
BOARD OF DIRECTORS MEETINGS
During 1998, the Board of Directors held nine meetings. Each director
attended more than 75% of all meetings of the Board except Mr. Taylor, who
attended six of the nine meetings, and each director attended more than 75% of
all meetings of each Board Committee on which such director served.
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. 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 1998. Because Mr. Clements has decided not to run for
reelection, it is anticipated that Mr. Gower will be appointed as Chairman of
the Audit Committee. 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 five
meetings during 1998. It is anticipated that Mr. Clements, who has decided not
to run for reelection to the Board, will not be replaced on the Compensation
Committee. 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 7.
Committee on Directors and Board Governance -- The Committee on Directors
and Board Governance, which consists of Mr. Stone (Chairman), Mr. Lamont, Mr.
Peterkin, Mr. Pyne and Mr. Taylor, held one meeting during 1998. 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 1998, each nonemployee 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 met 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 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").
5
<PAGE> 9
The 1989 Director Plan provides for the one-time granting to nonemployee
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 9,000 shares of common stock. Mr. Day and Mr.
Taylor each hold options for 4,500 shares of common stock. Mr. Gower holds an
option for 1,500 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.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of March 1, 1999 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 1, 1999
------------------------------------------------
VOTING OR PERCENT 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 19,000 29,000
C. Sean Day......................... 9,500 9,500
Bob G. Gower........................ 30,000 6,500 36,500
William M. Lamont, Jr............... 3,142(5) 19,000 22,142
George A. Peterkin, Jr.............. 400,246(6) 105,000 505,246 2.5%
J. H. Pyne.......................... 82,322 163,750 246,072 1.2%
Robert G. Stone, Jr................. 120,450(7) 44,000 164,450
Thomas M. Taylor.................... 2,823,532 9,500 2,833,032 14.1%
J. Virgil Waggoner.................. 6,000 19,000 25,000
NAMED EXECUTIVES
Mark R. Buese....................... 6,000 27,625 33,625
Ronald C. Dansby.................... 91,250 91,250
Dorman L. Strahan................... 52,000 52,000
Directors and Executive Officers as
a group (14 in number)........... 665,813 2,823,532 612,500 4,101,845 19.8%
</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 2,832,532 shares owned by Portfolio A Investors,
6
<PAGE> 10
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 March 1, 1999 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 406,719 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 911,890 shares.
(6) Includes 100,870 shares owned by trusts of which Mr. Peterkin is the
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 10,450
shares owned by a trust of which Mr. Stone is the trustee. Also does not
include 16,000 shares owned by his wife. Mr. Stone disclaims beneficial
ownership of the foregoing shares.
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 five meetings in 1998.
In 1998, 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 is
an employee of the Company and all of whom are "Disinterested Persons" or
"Outside Directors" as defined in the Company's various 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 competition median for similar positions in similar
companies, and the Compensation Committee believes that this objective 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 and Company performance factors.
The executive officers of the Company's marine transportation subsidiaries
are considered for annual incentive bonuses based on a return on invested
capital formula that calculates a bonus pool and then distributes the bonus pool
to participants based on Company and individual performance.
7
<PAGE> 11
The annual incentive bonuses for the Chairman of the Board and the
President of the Company were recommended by the Compensation Committee and
approved by the nonmanagement members of the Board of Directors. Bonuses for the
other executive officers who do not work for any of the Company's operating
subsidiaries were approved by the Compensation Committee. 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
subsidiaries 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, which cover 778,000 of the shares subject to
unexercisable options shown in the table under "Aggregated Option Exercises in
1998 and 1998 Year-End Option Values" on page 13, 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.
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 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 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, nonqualified Deferred Compensation
Plan for Key Employees effective January 1, 1992, which was designed primarily
to provide additional benefits to eligible employees to restore benefits to
which
8
<PAGE> 12
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 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 the Chief Executive Officer and the 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 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 1998 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 1,
1998. The $153,588 bonus paid to Mr. Pyne in 1998, which was earned in 1997, was
determined by the Company's Board of Directors on April 21, 1998, 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.
In January 1998, the Compensation Committee granted nonqualified stock
options covering 7,500 shares of common stock to persons considered executive
officers of the Company. 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 Compensation Committee grants stock
options to 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 1998 were for
731,950 shares, excluding the Premium Stock Options, constituting 3.5% of the
then outstanding common stock of the Company, and 819,000 shares in the Premium
Stock Option program, constituting 3.9% 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 options granted by 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
9
<PAGE> 13
Committee, served as the Secretary of the Company until April 1997, but was not
and is not an employee of the Company. In 1998, 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.
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............................. 2,823,532(2)(3) 14.0%
201 Main Street, Suite 2600
Fort Worth, Texas 76102
Shapiro Capital Management, Inc........................ 2,141,275(4) 10.6%
3060 Peachtree Road, Suite 1555
Atlanta, Georgia 30305
GeoCapital, LLC........................................ 1,903,930(5) 9.5%
767 Fifth Avenue, 45th Floor
New York, New York 10153
Luther King Capital Management Corporation............. 1,878,907(6) 9.3%
301 Commerce Street, Suite 1600
Fort Worth, Texas 76102
</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 ownership in the future.
(2) Based on information provided to the Company by PAI dated February 3, 1999.
(3) Does not include 9,500 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 13G, dated February 4, 1999, filed by Shapiro Capital
Management, Inc. with the SEC.
(5) Based on Schedule 13G, dated February 10, 1999, filed by GeoCapital, LLC
with the SEC.
(6) Based on Schedule 13G, dated February 10, 1999, filed by Luther King Capital
Management Corporation with the SEC.
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 (the "NYSE"). 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 1998 all filing
requirements were complied with.
10
<PAGE> 14
SUMMARY COMPENSATION TABLE
The following table summarizes compensation earned in 1996, 1997 and 1998
by the Chief Executive Officer and the four other highest paid executive
officers (the "named executive officers") for 1998:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION --------------
NAME AND ------------------- SHARES SUBJECT ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) TO OPTIONS COMPENSATION(2)
------------------ ---- -------- -------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
J. H. Pyne.................................... 1998 $334,360 $ -- -- $ --
President, Director and Chief Executive
Officer 1997 334,360 153,588 -- 27,879
1996 309,360 140,103 475,000 26,555
George A. Peterkin, Jr........................ 1998 209,360 -- -- --
Chairman of the Board of Directors 1997 209,360 80,000 -- 27,879
1996 234,360 85,000 61,000 26,555
Ronald C. Dansby.............................. 1998 221,580 -- -- --
President -- Inland Division of Kirby Inland
Marine, Inc. 1997 214,380 95,000 -- 27,879
1996 193,560 94,000 164,000 26,555
Dorman L. Strahan............................. 1998 158,160 -- -- --
President of Marine Systems, Inc. 1997 152,760 65,000 -- 20,513
1996 135,760 60,000 82,000 20,638
Mark R. Buese................................. 1998 141,840 -- 7,500 --
Vice President -- Administration of Kirby 1997 135,840 60,000 -- 21,880
Marine Transportation Corporation 1996 126,990 55,000 41,000 20,523
</TABLE>
- ---------------
(1) Bonuses for the 1998 year, payable in 1999, have not been determined as of
the date of this Proxy Statement.
(2) 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 compensation plans for the 1998
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 and Mr. Dansby, $4,464 to Mr.
Strahan and $3,974 to Mr. Buese.
11
<PAGE> 15
OPTIONS/SAR GRANTS IN 1998
The following table discloses for one of the named executive officers the
option granted during the year ended December 31, 1998. No options were granted
to any of the other named executive officers during 1998. The amounts shown for
the named executive officer as potential realizable value for such option are
based on assumed annual rates of stock price appreciation of 0%, 5% and 10% over
the full ten-year term of the option. The amounts shown as potential realizable
value for all stockholders as a group represent the corresponding increases in
the market value of 20,769,794 outstanding shares of common stock held by all
stockholders as of December 31, 1998. No gain to the optionee is possible
without an increase in the stock price that would benefit all stockholders
proportionately. These potential realizable values are based solely on
arbitrarily assumed rates of appreciation required by applicable SEC
regulations. Actual gains, if any, on stock option exercises are dependent on
the future performance of the common stock and overall market conditions. There
can be no assurance that the amounts reflected in this table will be achieved.
<TABLE>
<CAPTION>
POTENTIAL REALIZED VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(3)
-------------------------------------------------- -------------------------------------
% OF TOTAL
OPTIONS 0% 5% 10%
GRANTED TO EXERCISE ANNUAL ANNUAL ANNUAL
OPTIONS EMPLOYEES IN OR BASE EXPIRATION GROWTH GROWTH GROWTH
NAME GRANTED(1) FISCAL YEAR PRICE DATE RATE(2) RATE(2) RATE(2)
---- ---------- ------------ -------- ---------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Mark R. Buese......... 7,500 41.67% $ 19.875 01-19-2008 $0 $ 93,745 $ 237,567
All stockholders as a
group............... N/A N/A 19.9375(4) N/A 0 260,424,139 659,964,358
</TABLE>
- ---------------
(1) The option becomes exercisable 25% after one year, 50% after two years, 75%
after three years and 100% after four years of the date of grant. The
exercise price for the option may be paid with already owned shares of
common stock. No stock appreciation rights were granted with the stock
option.
(2) For the stock option, the value is based on the exercise price per share of
common stock, which was the average of the high and low sales price per
share of common stock on the NYSE on the date of grant.
(3) Potential realizable value amounts for the named executive officer have been
calculated by multiplying the exercise price by the annual appreciation rate
shown (compounded for the ten-year term of the options), subtracting the
exercise price per share and multiplying the gain per share by the number of
shares covered by the option. The derived potential realized value is the
nominal undiscounted future value not adjusted for inflation.
(4) For stockholders as a group, the potential realized value reflects the
appreciation over $19.9375 per share of common stock, which was the closing
price per share of common stock on December 31, 1998, for 20,769,794
outstanding shares of common stock as of December 31, 1998.
12
<PAGE> 16
AGGREGATED OPTION EXERCISES IN 1998 AND 1998 YEAR-END OPTION VALUES
The following table summarizes for each of the named executive officers
their option exercises in 1998 and the value of their options at December 31,
1998.
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1998 DECEMBER 31, 1998(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. H. Pyne............. 30,000 $ 471,563 151,250 468,750 $974,844 $53,906
George A. Peterkin,
Jr................... 75,000 $1,272,656 93,750 57,250 345,469 45,156
Ronald C. Dansby....... 88,750 170,250 651,406 17,656
Dorman L. Strahan...... 49,500 87,500 252,750 14,938
Mark R. Buese.......... 29,750 50,750 209,406 6,625
</TABLE>
- ---------------
(1) Based on the average of the high and low sales price per share of common
stock on the date of exercise.
(2) Based on $19.9375 per share of common stock, which was the closing price per
share of common stock on December 31, 1998.
COMPENSATION AGREEMENTS
Kirby Inland Marine, 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 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 executive
officers the amount of contributions to the Deferred Compensation Plan for the
1996 and 1997 years. Contributions for the 1998 year have not been determined as
of the date of this Proxy Statement.
<TABLE>
<CAPTION>
DEFERRED
COMPENSATION PLAN
-----------------
1996 1997
------- -------
<S> <C> <C>
J. H. Pyne.................................................. $26,545 $28,510
George A. Peterkin, Jr...................................... 13,639 7,325
Ronald C. Dansby............................................ 6,049 7,836
</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>
DOWN
JONES
MEASUREMENT PERIOD KIRBY S&P 500 MARINE
(FISCAL YEAR COVERED) CORPORATION INDEX TRANSPORTATION
<S> <C> <C> <C>
12/93 100 100 100
12/94 92 101 92
12/95 76 139 105
12/96 92 171 128
12/97 90 229 154
12/98 93 294 95
</TABLE>
Each index assumes $100 invested at December 31, 1993, 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 LLP served as the Company's principal independent public accountants
during 1998 and will continue to serve as the Company's principal independent
public accountants for the current year. Representatives of KPMG LLP are
expected to be present at the 1999 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 2000 ANNUAL MEETING
Shareholder proposals intended to be presented at the Company's 2000 Annual
Meeting must be received by the Company at its principal executive office no
later than November 1, 1999 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 1, 1999
Houston, Texas
15
<PAGE> 19
KIRBY CORPORATION
1775 ST. JAMES PLACE, SUITE 200
P.O. BOX 1745
HOUSTON, TEXAS 77251-1745
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF KIRBY
CORPORATION.
The undersigned hereby appoints George A. Peterkin, Jr., J. H. Pyne, 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 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") held of record by the undersigned as
of the close of business on March 1, 1999, at the Annual Meeting of Stockholders
to be held on April 20, 1999, at The Sheraton Luxury Collection 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.
(PLEASE DATE AND SIGN ON REVERSE SIDE)
-----------
SEE 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 eight (8) 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: 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 AND [ ]
NOTE
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.
