HOWELL CORPORATION
1111 Fannin, Suite 1500
Houston, Texas 77002
March 25, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to
be held on Wednesday, April 29, 1998, at 10:00 a.m., in the tenth floor
meeting room of the Howell Corporation Building, 1111 Fannin Street,
Houston, Texas 77002.
The accompanying Notice of Annual Meeting and Proxy Statement describe
the formal matters to be acted upon at the meeting. In addition, we will
discuss current matters concerning the future of the Company and review the
Company's operations during the past year. At the conclusion of the formal
meeting, an opportunity will be provided for questions and discussion by the
shareholders. A record of the Company's activities for the year 1997 is
contained in the Annual Report which accompanies this proxy material.
Representation of your shares at the meeting is very important. We urge
each shareholder, whether or not you now plan to attend the meeting, to
promptly date, sign and return the enclosed proxy in the envelope furnished
for that purpose. If you do attend the meeting, you may, if you wish,
revoke your proxy and vote in person.
It is always a pleasure to meet with our shareholders, and I personally
look forward to seeing as many of you as possible at the Annual Meeting.
Sincerely,
Donald W. Clayton
Chairman of the Board
<PAGE>
HOWELL CORPORATION
1111 Fannin, Suite 1500
Houston, Texas 77002
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, APRIL 29, 1998
To the Shareholders of Howell Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of
Howell Corporation, a Delaware corporation, will be held in the tenth floor
meeting room of the Howell Corporation Building, 1111 Fannin Street,
Houston, Texas, on Wednesday, April 29, 1998, at 10:00 a.m. local time, for
the following purposes:
(1) to elect three members to the Board of Directors to serve for a
three-year term as Class I Directors;
(2) to ratify the appointment of Deloitte & Touche LLP as independent
auditors for the Company for the fiscal year ending December 31, 1998; and
(3) to transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on February 27,
1998, as the record date for the determination of shareholders entitled to
receive notice of and to vote at the Annual Meeting. A list of all
shareholders entitled to vote is on file at the principal offices of the
Company, 1111 Fannin, Suite 1500, Houston, Texas, and will be available for
inspection by any shareholder during the meeting.
So that we may be sure your shares will be voted at the Annual Meeting,
please date, sign and return the enclosed proxy promptly. For your
convenience, a postpaid return envelope is enclosed for your use in
returning your proxy. If you attend the meeting, you may revoke your proxy
and vote in person.
By Order of the Board of Directors,
Robert T. Moffett
Vice President,
General Counsel
and Secretary
March 25, 1998
<PAGE>
HOWELL CORPORATION
1111 Fannin, Suite 1500
Houston, Texas 77002
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 29, 1998
Solicitation and Revocability of Proxies
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Howell Corporation ("Company") to be
used at the Annual Meeting of Shareholders to be held in the tenth floor
meeting room of the Howell Corporation Building, 1111 Fannin Street,
Houston, Texas on Wednesday, April 29, 1998, at 10:00 a.m. local time, and
at any and all adjournments thereof. This Proxy Statement and the enclosed
proxy are being mailed to the shareholders on or about March 26, 1998.
Unless otherwise indicated thereon, proxies in the accompanying form
which are properly executed and duly returned to the Company and which are
not revoked will be voted:
(1) for each of the three nominees for director to serve a three-year
term as Class I Directors; and
(2) for ratification of the appointment of Deloitte & Touche LLP as
independent auditors for the Company for the year ending December 31,
1998.
Shares represented by proxies marked as abstentions on any matter will
not be voted on that matter, although they will be counted for quorum
purposes; brokers' shares held in "street name" and not voted by them will
not be counted in tabulating votes. Votes at the Annual Meeting will be
tabulated by an Inspector of Election selected by the Company.
The Board of Directors is not presently aware of other proposals which
may be brought before the Annual Meeting. In the event other proposals are
brought before the Annual Meeting, the persons named in the enclosed form of
proxy will vote in accordance with what they consider to be the best
interests of the Company and its shareholders.
The cost of soliciting proxies will be borne by the Company. In addition
to the Company's solicitation by mail, proxies may be solicited personally
or by telephone by the management of the Company. The Company may request
brokerage houses or other custodians, nominees and fiduciaries to forward
proxies and proxy material to the beneficial owners of the shares held of
record by such persons and will reimburse them for their reasonable
forwarding expenses.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is exercised. Proxies may be revoked
by filing with the Secretary of the Company written notice of revocation, by
executing and delivering a later-dated proxy, or by appearing and voting in
person at the meeting.
Voting Securities and Record Date
The Board of Directors of the Company has fixed the close of business on
February 27, 1998, as the Record Date (the "Record Date") for the
determination of shareholders entitled to notice of and to vote at the
Annual Meeting and any adjournments thereof.
<PAGE>
The issued and outstanding voting securities of the Company as of the
Record Date consist of 5,464,642 shares of common stock, $1.00 par value per
share ("Common Stock"), each of which is entitled to one vote. Shares of
Common Stock are not entitled to cumulative voting rights in the election of
Directors. The presence in person or by proxy of the holders of a majority
of the shares of Common Stock outstanding on the Record Date will be
necessary to constitute a quorum at the Annual Meeting.
Assuming the presence of a quorum of the Common Stock, the affirmative
vote of the holders of a majority of the shares of Common Stock represented
in person or by proxy at the meeting is required for the election of
Directors and for ratification of the appointment of Deloitte & Touche LLP
as independent auditors for the fiscal year ending December 31, 1998.
The Company also has issued and outstanding, as of the Record Date,
690,000 shares of $3.50 convertible preferred stock, par value $1.00 per
share (the Company's 690,000 shares of Preferred Stock issued in April 1993
of $3.50 convertible preferred stock is referred to as the "Series A
Preferred Stock"). The Series A Preferred Stock is not entitled to vote on
the items in this proxy.
Item 1. Election of Directors
The Company's Board of Directors is divided into three classes, each
elected to serve for a term of three years. The Board of Directors, in
accordance with the Company's Certificate of Incorporation, has established
that there shall be three Class I Directors, three Class II Directors and
three Class III Directors.
The three nominees for Class I Directors are Paul N. Howell, Donald W.
Clayton, and Richard K. Hebert. It is the intention of the persons named in
the accompanying proxy that proxies will be voted for the election of these
three nominees unless otherwise indicated thereon. Each of these persons is
now a Director of the Company and is standing for reelection. The Board of
Directors has no reason to believe that any of the nominees will be unable
to serve if elected to office and, to the knowledge of the Board of
Directors, the nominees intend to serve the entire term for which election
is sought. Should any nominee for the office of Director named herein
become unable or unwilling to accept nomination or election, the persons
named in the proxy will vote for such other person as the Board of Directors
may recommend. The Company does not consider security holder nominations.
Directors to be Elected at the Meeting
Set forth below is certain information regarding each of the three
nominees for election as a Director.
Director
Name Occupation, Experience and Directorships Since
---- ---------------------------------------- -----
Paul N. Howell....... President and Chief Executive Officer from 1955
Age: 79 1955 through May 14, 1997. Formerly
Chairman of the Board of the Company
from 1978 to 1995. Director of Genesis
Energy, L.L.C. Director of Lodestar
Logistics Corporation.
Donald W. Clayton.... Chairman and Chief Executive Officer of the 1997
Age 61 Company. From 1993 to 1997, was
co-owner and President of Voyager Energy
Corp. Formerly served as President and
Director of Burlington Resources, Inc.;
and President and Chief Executive
Officer of Meridian Oil, Inc. Prior to
that, he was a senior executive with
Superior Oil Company.
<PAGE>
Director
Name Occupation, Experience and Directorships Since
---- ---------------------------------------- -----
Richard K. Hebert.... President and Chief Operating Officer of 1997
Age: 46 the Company. From 1993 to 1997, was
co-owner of Voyager Energy Corp.
Formerly served as Executive Vice
President and Chief Operating Officer of
Meridian Oil, Inc., now Burlington
Resources, Inc. Prior to that, served
in various engineering and management
positions with Mobil Oil Corporation,
Superior Oil Company and Amoco
Production Company.
The Board of Directors of the Company has unanimously approved the
election of the nominees and recommends a vote "FOR" the election of the
nominees for Class I directors.
Directors whose Term Extends Beyond the Meeting
Set forth below is certain information regarding each of the Directors
whose term extends beyond the meeting. The Class II Directors with terms
expiring in 1999 are Robert M. Ayres, Jr., Ronald E. Hall and Otis A.
Singletary. The Class III Directors with terms expiring in 2000 are Walter
M. Mischer, Paul W. Murrill and Jack T. Trotter.
Director
Name Occupation, Experience and Directorships Since
---- ---------------------------------------- -----
Robert M. Ayres, Jr.. Financial consultant for more than five 1991
Age: 71 years. Vice Chancellor and President
Emeritus, University of the South.
Director: Rail Tex, Inc., Patoil Corp.
and James Avery Craftsman, Inc.
Ronald E. Hall....... Chairman of the Board of the Company from 1995
Age: 65 1995 through May 14, 1997. Formerly
President and Chief Executive Officer of
CITGO Petroleum Corporation, a refining,
marketing and distribution company, from
1985 to 1995. Director of CITGO from
1990 to 1995. Director of Getty
Marketing Company, Genesis Energy,
L.L.C. and Lodestar Logistics
Corporation.
Walter M. Mischer, Sr. President and Chief Executive Officer , 1983
Age: 75 Hallmark Residential Group Inc., a real
estate development company, since 1988.
Director: Southwest Airlines.
Paul W. Murrill...... Professional Engineer for more than five 1994
Age: 63 years. Chairman, Piccadilly Cafeterias,
Inc. Chairman and Chief Executive
Officer of Gulf States Utilities
Company, a public utility, from 1982 to
1987. Director: Entergy Corporation,
Tidewater, Inc., Chemfirst Corporation,
Pavillion Technology, Inc., Piccadilly
Cafeterias, Inc. and Zygo, Inc.
Otis A. Singletary... President Emeritus, University of Kentucky 1977(1)
Age: 76 since 1987.
Jack T. Trotter...... Personal business investments for thirty 1988
Age: 71 years. Director: Weingarten Realty,
Inc.
___________________________
(1) Dr. Singletary also served as a Director in 1969.
<PAGE>
Compensation of Directors
Each member of the Board of Directors who is not an employee of the
Company receives a $5,000 quarterly retainer fee, plus $1,000 per meeting
for attending the meetings of a standing committee, unless the standing
committee meets on the same day as the Board of Directors, in which event no
fee is paid. Commensurate remuneration is also paid for service on other
committees and for special assignments as the occasion arises. Reasonable
out-of-pocket expenses incurred by a director in attending board and
committee meetings are reimbursed by the Company.
Messrs. Ayres, Mischer, Murrill, Singletary and Trotter, non-employee
members of the Board of Directors who are also members of the Stock Option
Committee, all received an option to purchase 10,000 shares of the Common
Stock. The option exercise price was the market price of the Common Stock
on the date of grant. The option becomes exercisable in increments of 25%
of the shares covered by the grant after the lapse of successive periods of
one year each. Each of these options has a ten-year term but in case of
cessation of the individual's directorship of the Company, an otherwise
exercisable option expires after six months.
Mr. Ronald E. Hall received an option for 50,000 shares of the Common
Stock, with the option exercise price equal to the market price of the
Common Stock on the date of the grant. This option is exercisable one year
from date of grant. The option has a ten-year term, but should Mr. Hall
cease to be a director of the Company, an otherwise exercisable option will
expire after two years.
Mr. Paul N. Howell, for his future service as a Director of the Company,
received an option to purchase 10,000 shares of the Common Stock, with the
option exercise price equal to the market price of the Common Stock on the
date of the grant. The option becomes exercisable in increments of 25% of
the shares covered by the grant after the lapse of successive periods of one
year each. This option has a ten-year term but in case of cessation of the
individual's directorship of the Company, an otherwise exercisable option
expires after six months.
Mr. Richard K. Hebert as a non-employee member of the Board of Directors
prior to May 14, 1997, received an option to purchase 10,000 shares of the
Common Stock. The option exercise price was the market price of the Common
Stock on the date of grant. The option becomes exercisable in increments of
25% of the shares covered by the grant after the lapse of successive periods
of one year each. This option has a ten-year term but in case of cessation
of the individual's employment in the Company, an otherwise exercisable
option expires after six months.
Activities of the Board
The Board of Directors held fourteen meetings during 1997, of which seven
were committee meetings. Each Director attended at least 75% of the
meetings of the Board and of any committee of which he was a member.
The Board of Directors has three standing committees: Audit,
Compensation and Nominating, and Stock Option.
Members of the Audit Committee were Jack T. Trotter and Robert M. Ayres,
Jr. The Audit Committee met once in 1997. Functions of the Audit Committee
include recommending to the Board of Directors the independent auditors,
approving the estimated fees for such services, reviewing the audit reports
and making such recommendations to the Board of Directors concerning the
audit reports as may be appropriate, meeting with the independent auditors,
financial officers of the Company and other members of management to review
the results of audits, and evaluating the adequacy of the internal control
system of the Company.
<PAGE>
Members of the Compensation and Nominating Committee were Donald W.
Clayton, Walter M. Mischer, Sr. and Paul W. Murrill. The Compensation and
Nominating Committee met twice in 1997. Functions of the Compensation and
Nominating Committee include establishing compensation for the officers of
the Company and reviewing all employee benefit programs, including the
recommendation of changes in the benefits.
Members of the Stock Option Committee were Messrs. Ayres, Mischer,
Murrill, Singletary and Trotter. The Committee administers the 1988 and
1997 Stock Option Plans and met three times during 1997.
The Board of Directors created a Special Pricing Committee for the Amoco
acquisition which held one meeting during 1997 attended by Messrs. Clayton,
Hall and Hebert.
Compensation and Nominating Committee Report on Executive Compensation
The following report by the Compensation and Nominating Committee to the
Board of Directors discusses the factors the Compensation and Nominating
Committee considers when determining the salary and bonus of the Chief
Executive Officer and other executive officers.
To the Board of Directors:
As members of the Compensation and Nominating Committee, it is our duty
to establish the compensation level of the executive officers, to award
bonuses to the executive officers and to approve the Company's benefit plan
arrangements.
The base salary level of the executive officers is recommended to the
Compensation and Nominating Committee by the Chief Executive Officer.
Factors considered by the Chief Executive Officer are typically subjective,
such as his perception of the individual's performance and any planned
changes in functional responsibility, and also include such factors as prior
year compensation levels and general inflationary considerations. The
profitability of the Company and the market value of its stock are not
primary considerations in setting executive officer base compensation,
although significant changes in these items are subjectively considered.
The increase of 4.68% in base compensation for Mr. Paul N. Howell for 1997
was reflective of general inflation. Mr. Howell served as President and
Chief Executive Officer until his retirement on May 14, 1997. The yearly
base compensation for the new executive officers, Mr. Donald W. Clayton, Mr.
Richard K. Hebert and Mr. John E. Brewster, Jr., was $200,000, $200,000 and
$115,000, respectively for 1997.
The Committee awarded bonuses to the executive officers after
subjectively considering the profitability of the Company and individual
performance. In making such determination, the Committee does not apply any
specific criteria. The perquisites and other benefits received are reported
in the Summary Compensation Table and are provided primarily pursuant to
existing employee benefit programs. The bonuses actually earned by each
individual for fiscal 1997 are to be paid in fiscal 1998. Mr. Clayton and
Mr. Hebert declined any salary increases or bonuses for 1997.
Mr. Clayton is the only member of the Compensation and Nominating
Committee who is a current officer and employee of the Company. No other
member of the Compensation and Nominating Committee is a former or current
officer, nor is an employee of the Company or any of its subsidiaries.
The Committee does not consider security holder nominations.
Compensation and Nominating Committee
Walter M. Mischer, Sr.
Paul W. Murrill
Donald W. Clayton
<PAGE>
Stock Option Committee Report on Executive Compensation
The following report by the Stock Option Committee to the Board of
Directors discusses the factors the Stock Option Committee considers when
determining the number of shares which will be made subject to stock options
granted to the executive officers of the Company.
To the Board of Directors:
As members of the Stock Option Committee it is our duty to administer the
Company's 1988 and 1997 Stock Option Plans. Administering the plans
includes awarding stock options to the executive officers and key employees.
Stock options are a component of compensation that is intended to retain
executives and to motivate executives to improve stock market performance.
The number of options granted to each executive officer was determined by
considering position, potential performance and functional
responsibilities. The option price was the fair market value of the
Company's common stock on the date of the grant.
Stock Option Committee
Robert M. Ayres, Jr.
Walter M. Mischer, Sr.
Paul W. Murrill
Otis A. Singletary
Jack T. Trotter
<PAGE>
Compensation of Executive Officers
Messrs. Donald W. Clayton, Paul N. Howell , Richard K. Hebert, Robert T.
Moffett, J. Richard Lisenby and John E. Brewster, Jr. constituted the
executive officers of the Company during the fiscal year 1997. Mr. Clayton,
Mr. Hebert and Mr. Brewster became executive officers on May 14, 1997. Mr.
Howell was an executive officer until his retirement on May 14, 1997. Mr.
Moffett became an executive officer on October 30, 1995. Mr. Lisenby became
an executive officer on December 2, 1996. The following table summarizes
the compensation paid by the Company, for the three fiscal years ended
December 31, 1997, to its Chief Executive Officer and to all of its other
executive officers. The Company has no restricted stock awards, long-term
incentive plans or pension plans.
<TABLE>
Summary Compensation Table
Annual Compensation
--------------------------
<CAPTION>
Long-term
Compensation
Other Securities All
Annual Underlying Other
Name & Principal Position Year Salary Bonus Compensation(1) Options Compensation
- ------------------------- ---- ------ ----- ------------ ------------ ------------
($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
Donald W. Clayton ............. 1997 126,515 -- 3,795 265,000 --
Chairman and Chief Executive
Officer
Paul N. Howell ................ 1997 170,917 -- 2,227 22,500 127,700(2)
President and Chief Executive 1996 305,700 83,000 6,000 13,200 78,543
Officer through May 14, 1997 1995 295,350 58,000 6,000 17,400 67,390
Richard K. Hebert ............. 1997 126,515 -- 3,795 265,000 350(3)
President, Chief Operating
Officer
Robert T. Moffett ............. 1997 140,000 40,000 6,000 9,680 11,200(4)
Vice President, ............. 1996 127,000 45,000 6,000 4,400 10,602
General Counsel and ......... 1995 118,281 25,000 6,000 5,500 10,340
Secretary
J. Richard Lisenby ............ 1997 136,000 10,000 -- 5,000 940(5)
Vice President and .......... 1996 11,333 1,000 -- 9,000 --
Chief Financial Officer
John E. Brewster, Jr .......... 1997 72,746 30,000 -- 13,800 350(3)
Vice President, Corporate
Development & Planning
</TABLE>
- ------------------------
(1) Other annual compensation is auto allowance.
(2) Represents proceeds from exercise of stock options of $49,062, company
contributions of $6,400 to defined contribution plan, $2,133 to a thrift
plan, $1,188 to a stock purchase plan, $163 for premiums for term life
insurance and $68,754, which is the premium attributable to the term life
portion of a split dollar insurance arrangement and the current dollar
value of the remainder of the premium paid. The total premium paid in 1997
was $232,184.
(3) Premium for term life insurance.
(4) Represents Company contributions of $6,400 to defined contribution plan,
$2,800 to a thrift plan, $1,400 to a stock purchase plan and $600 for
premiums for term life insurance.
(5) Represents contributions of $227 to a thrift plan, $113 to a stock purchase
plan and $600 for premiums for term life insurance.
<PAGE>
Compensation Pursuant to Plans
The Company maintains a 1988 stock option plan, which expired in January
1998, for its executive officers, directors and key employees, which was
administered by the Stock Option Committee. Under this plan the Company
could grant both tax-qualified and nonqualified options to eligible
employees and, subject to certain limitations, members of the Board of
Directors. An aggregate of 750,000 shares of Common Stock had been reserved
for issuance under this plan. The aggregate number of those 750,000 shares
that could be granted to members of the Board of Directors was 150,000.
The Company also maintains a 1997 stock option plan, which expires in
2007, for its executive officers, directors and key employees, which is
administered by the Stock Option Committee. Under this plan the Company may
grant nonqualified options to eligible employees and, subject to certain
limitations, members of the Board of Directors. An aggregate of 538,800
shares of Common Stock has been reserved for issuance under this plan.
The following table sets forth the options granted to the individuals
named in the Summary Compensation Table during the last fiscal year.
<TABLE>
Option Grants in Last Fiscal Year
Individual Grants (1)
--------------------------------------------------
<CAPTION>
Number of
Securities % of Total Potential Realizable
Underlying Options Granted Exercise Value at Assumed Annual
Options to Employees in Price Expiration Rates of Stock Price
Name Granted Year Per Share Date Appreciation for Option Term
---- ------- --------------- --------- ---------- ----------------------------
(#) ($/Sh) 5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
Donald W. Clayton ...... 265,000 37 $13.1250 05/13/2007 $2,187,374 $5,543,235
Paul N. Howell ......... 12,500(2) 2 $15.4375 01/28/2007 $ 121,357 $ 307,542
10,000 1 $18.7500 10/28/2007 $ 117,918 $ 298,827
Richard K. Hebert ...... 10,000 1 $15.4375 01/28/2007 $ 97,086 $ 246,034
255,000 36 $13.1250 05/13/2007 $2,104,832 $5,334,057
Robert T. Moffett ...... 4,680 1 $15.4375 01/28/2007 $ 45,436 $ 115,144
5,000 1 $13.1250 05/13/2007 $ 41,271 $ 104,589
J. Richard Lisenby ..... 5,000 1 $13.1250 05/13/2007 $ 41,271 $ 104,589
John E. Brewster, Jr.... 13,800 2 $13.1250 05/13/2007 $ 113,909 $ 288,667
</TABLE>
- -----------------------------
(1) Except for the 12,500 shares issued to Mr. Howell on January 27, 1997,
options become exercisable in increments of 25% of the shares covered by
the grant after the lapse of successive periods of one year each. Each
option has a ten-year term, but in case of termination of employment,
otherwise exercisable options expire after six months.
(2) Mr. Howell's 12,500 shares, in addition to all previously unexercisable
shares, were accelerated to 100% exercisable upon his May 14, 1997,
retirement. In addition, the six month expiration clause effected as a
result of his retirement was waived by the Company's Board. The options
continue to be subject to their original 10 year life. The total options
accelerated were 35,125.
<PAGE>
The table below shows the number of shares of Common Stock issued upon
the exercise of options by the executive officers in 1997, the value
received upon exercise of those options, the number of exercisable and
unexercisable options at December 31, 1997 and the value of exercisable and
unexercisable options with an option price of less than $175/16 per share,
which was the market value of the Company's common stock on December 31,
1997.
<TABLE>
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
<CAPTION>
Number of Dollar
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Fiscal Options at Fiscal
Year End Year End
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
---- --------------- -------- ------------- -------------
(#) ($) (#) ($)
<S> <C> <C> <C> <C>
Donald W. Clayton - - 0/265,000 0/1,109,688
Paul N. Howell 7,696 49,062 120,830/10,000 730,743/0
Richard K. Hebert - - 0/265,000 0/1,086,563
Robert T. Moffett - - 15,275/17,005 89,055/65,433
J. Richard Lisenby - - 2,250/11,750 6,047/39,078
John E. Brewster, Jr. - - 0/13,800 0/57,788
</TABLE>
Termination Arrangements
The Company has entered into a Deferred Compensation and Salary
Continuation Agreement with Mr. Paul N. Howell. Pursuant to the terms of
that Agreement, the Company has contracted to pay Mr. Howell, or his wife if
she survives his death, certain annual payments upon his termination of
employment for any reason. Those annual payments are $17,500 each year for
the years 1991 through 1996, inclusive, and $30,000 each year for the years
1997 through 1999, inclusive. As Mr. Howell's employment with the Company
continued through a portion of this period of time, the Company was relieved
of its obligation for each annual payment set out above as that year
expires. Since Mr. Howell retired on May 14, 1997, the Company will make
the annual payments of $30,000 in years 1998 and 1999.
Compensation and Nominating Committee Interlocks and Insider Participation
The Compensation and Nominating Committee of the Company's Board of
Directors is composed of the following: Walter M. Mischer, Sr. and Paul W.
Murrill, neither of whom is an employee of the Company; and Donald W.
Clayton who is the Chairman and Chief Executive Officer of the Company.
<PAGE>
Performance Graph
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock
against the cumulative total return of the Dow Jones Industrial Average and
a peer group average for the period of five years commencing December, 31,
1992 and ended December 31, 1997. The peer group average is the Dow Jones
Energy Sector Oil Secondary Group Average, which consists of smaller oil
companies who do the bulk of their business domestically. The historical
stock price performance for the Company's stock shown on the graph below is
not necessarily indicative of future stock performance.
Composite of Five Year Cumulative Total Return*
Howell Corporation Common, Peer Group Average & Dow Jones Industrial Average
Dow Jones
Howell Peer Group Industrial
Year Corporation Average Average
---- ----------- ---------- ----------
1992 100.00 100.00 100.00
1993 99.02 110.95 116.95
1994 108.35 107.45 122.81
1995 132.84 124.31 168.12
1996 137.84 153.19 216.46
1997 163.46 162.72 270.37
* Assumes that the value of the investment in Howell Corporation and each
indices was $100 on December 31, 1992 and that all dividends were reinvested.
Security Ownership of Management and Certain Beneficial Owners
The following table sets forth, as of February 1, 1998, the shares of
Common Stock beneficially owned by (i) any person who, to the knowledge of
the Company, beneficially owns more than 5% of such stock, (ii) each
director and nominee for director of the Company, (iii) each executive
officer of the Company named in the Summary Compensation Table, and (iv) all
directors and executive officers of the Company as a group. The Common
Stock is the only class of voting securities of the Company currently
outstanding. Unless otherwise indicated, each holder in the table below has
sole voting and dispositive power with respect to the shares of Common Stock
owned by such holder.
<PAGE>
Amount and Nature
Name and Address of Beneficial Percent
of Beneficial Owner Ownership of Class
- ------------------- ---------------- --------
Paul N. Howell..................................... 1,239,399 (1) 22.2
Howell Corporation
1111 Fannin, Suite 1500
Houston, Texas 77002
Donald W. Clayton.................................. 217,040 4.0
Howell Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
Richard K. Hebert.................................. 138,103 (2) 2.5
Howell Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
Robert T. Moffett.................................. 23,519 (3) *
Howell Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
J. Richard Lisenby................................. 2,277 (4) *
Howell Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
John E. Brewster, Jr............................... 10,395 (5) *
Howell Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
Robert M. Ayres, Jr................................ 182,631 (6) 3.3
5705 Scout Island Cove
Austin, TX 78731
Ronald E. Hall..................................... 50,000 (7) *
Howell Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
Walter M. Mischer, Sr.............................. 20,000 (8) *
Hallmark Residential Group
2727 North Loop West, Suite 200
Houston, TX 77008
Paul W. Murrill.................................... 8,500 (9) *
206 Sunset Boulevard
Baton Rouge, LA 70808
Otis A. Singletary................................. 15,900 (10) *
780 Chinoe Rd.
Lexington, KY 40502
(table continued on following page)
<PAGE>
Amount and Nature
Name and Address of Beneficial Percent
of Beneficial Owner Ownership of Class
- ------------------- ----------------- --------
Jack T. Trotter.................................... 13,000 (11) *
1000 Louisiana, Suite 3600
Houston, TX 77002
All directors and executive officers as a group
(12 persons)...................................... 1,921,834 (12) 33.7
Dimensional Fund Advisors Inc...................... 361,100 (13) 6.6
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
The Guardian Life Insurance Company of America..... 475,500 (14) 8.5
201 Park Avenue South
New York, NY 10003
Ingalls & Snyder................................... 276,133 (15) 5.0
61 Broadway
New York, NY 10006
FBL Investment Advisory Services, Inc.............. 742,557 (16) 12.4
5400 University Avenue
West Des Moines, IA 50266
Heartland Advisors, Inc............................ 653,700 (17) 12.0
790 North Milwaukee Street
Milwaukee, WI 53202
Equitable Companies, Inc........................... 527,078 (18) 9.7
787 Seventh Avenue
New York, NY 10019
Forest Investment Management LLC/ADV............... 443,029 (19) 8.1
53 Forest Avenue
Old Greenwich, CT 06870
Wellington Management Company, LLP................. 496,500 (20) 9.1
75 State Street
Boston, MA 02109
Bradley N. Howell.................................. 281,988 (21) 5.2
Lodestar Logistics Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
* Less than 1%.
- ---------------------------
(1) Includes 120,830 shares which Mr. Paul N. Howell has the right to acquire
within 60 days pursuant to certain options and 44,500 shares which are
owned by the Howell Foundation, as to which Mr. Howell shares voting and
dispositive power.
(2) Includes 2,500 shares which Mr. Hebert has the right to acquire within 60
days pursuant to certain options.
<PAGE>
(3) Includes 20,195 shares which Mr. Moffett has the right to acquire within 60
days pursuant to certain options.
(4) Includes 2,250 shares which Mr. Lisenby has the right to acquire within 60
days pursuant to certain options.
(5) Includes 400 shares held by Mr. Brewster as custodian for minor children,
as to which he exercises both voting and dispositive power.
(6) Includes 5,250 shares owned by the Shield-Ayres Foundation, as to which Mr.
Ayres disclaims both voting and dispositive power, and 12,490 shares held
by Mr. Ayres' wife, as to which he disclaims both voting and dispositive
power. Includes 1,515 shares of common stock which Mr. Ayres has the right
to receive within 60 days should he elect to convert the 500 shares of
series A Prefered Stock held by him. Also includes 10,000 shares which Mr.
Ayres has the right to acquire within 60 days pursuant to certain options.
(7) Includes 50,000 shares which Mr. Hall has the right to acquire within 60
days pursuant to certain options.
(8) Includes 10,000 shares which Mr. Mischer has the right to acquire within 60
days pursuant to certain options.
(9) Includes 7,500 shares which Dr. Murrill has the right to acquire within 60
days pursuant to certain options.
(10) Includes 15,000 shares held by Dr. Singletary directly, as to which he
exercises both voting and dispositive power, 600 shares held by Dr. and
Mrs. Singletary, as to which Dr. Singletary shares voting and dispositive
power, and 300 shares held by Dr. Singletary as custodian for minor
children, as to which he exercises both voting and dispositive power.
(11) Includes 10,000 shares which Mr. Trotter has the right to acquire within 60
days pursuant to certain options.
(12) Includes 234,790 shares which the Company's directors and executive
officers have the right to acquire within 60 days pursuant to the exercise
of certain options and the conversion of shares of Series A Preferred
Stock.
(13) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 361,100 shares of Howell
Corporation stock as of December 31, 1997, all of which shares are held in
portfolios of DFA Investment Dimensions Group Inc., a registered open-end
investment company, or in series of the DFA Investment Trust Company, a
Delaware business trust, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, all of
which Dimensional Fund Advisors Inc. serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
(14) According to Amendment No. 1 to Schedule 13G filed by The Guardian Life
Insurance Company of America ("Guardian") with the Commission, shares are
beneficially owned by a group comprised of Guardian and certain of its
affiliates, including Guardian Investor Services Corporation, a
wholly-owned subsidiary and registered investment advisor. The group shares
voting rights and dispositive power over all such shares. Shares
beneficially owned include 151,500 shares of Common Stock which the group
has the right to receive within 60 days should it elect to convert the
50,000 shares of Series A Preferred Stock held by it.
(15) Includes 28,861 shares of Common Stock which Ingalls & Snyder has the right
to receive within 60 days should it elect to convert the 9,525 shares of
Series A Preferred Stock held by it. Ingalls & Snyder is registered as a
broker or dealer with the Commission. Based on its Amendment No. 4 to
Schedule 13G filed with the Commission, Ingalls & Snyder has sole voting
power with respect to 7,200 of the shares of Common Stock owned
beneficially and sole dispositive power over all of the shares of Common
Stock owned beneficially.
<PAGE>
(16) Includes 511,570 shares of Common Stock which FBL Investment Advisory
Services, Inc., has the right to receive within 60 days should it elect to
convert the 168,835 shares of Series A Preferred held by it. FBL Investment
Advisory Services, Inc., is registered as an investment adviser with the
Commission. Based on its Schedule 13G filed with the Commission, FBL
Investment Advisory Services, Inc., has sole voting and dispositive power
over all such shares.
(17) According to Schedule 13G filed by Heartland Advisors, Inc. ("Heartland")
with the Commission, Heartland is a registered investment advisor.
Heartland has sole voting power over 611,100 of the shares of Common Stock
owned beneficially and sole dispositive power over all the shares of Common
Stock owned beneficially.
(18) According to Schedule 13G filed by Equitable Companies, Inc. ("Equitable")
with the Commission, shares are beneficially owned by a group comprised of
Equitable and certain of its affiliates, including Alliance Capital
Management, L.P., acquired solely for investment purposes on behalf of
client discretionary investment advisory accounts, Donaldson, Lufkin and
Jenerette Securities Coporation held for investment purposes; and Wood,
Strughers & Winthrop Management Corporation, acquired solely for investment
purposes on behalf of client discretionary investment advisory accounts.
The group shares sole voting power over 486,778 of the shares of Common
Stock owned beneficially and sole dispositive power over all of the shares
of Common Stock owned beneficially.
(19) According to Schedule 13G filed by Forest Investment Management LLC/ADV,
("Forest") with the Commission, Forest is a registered investment advisor.
Forest has sole voting and dispositive power over all of Common Stock owned
beneficially.
(20) According to Schedule 13G filed by Wellington Management Company, L.L.P.,
("Wellington") with the Commission, Wellington is a registered investment
advisor. Wellington has sole voting and dispositive power over all of
Common Stock owned beneficially.
(21) Of these, 35,705 shares are held by Bradley N. Howell as custodian for
minor children, as to which he exercises both voting and dispositive power;
139,546 shares are held in trust for minor children and for himself, as to
which he shares voting and dispositive power; and 14,456 shares are held by
Bradley N. Howell's wife, as to which he disclaims both voting and
dispositive power.
Certain Transactions
Mr. Paul N. Howell and Mr. Ronald E. Hall are employed by the Company as
consultants, and are paid an annual consulting fee of $60,000 and $32,000,
respectively. Mr. Hall also receives a yearly auto allowance of $6,000.
The Board of Directors reviews these agreements on an annual basis.
On October 2, 1997, the Company acquired Voyager Energy Corp. for 352,638
shares of Common Stock of the Company in a tax-free reorganization. The
shares issued by the Company in the merger represent, in the aggregate,
approximately 6.5% of the Company's common stock outstanding after
completion of the transaction. Mr. Donald W. Clayton, Mr. Richard K. Hebert
and Mr. John E. Brewster, Jr. received 207,040, 135,603 and 9,995 shares
respectively. The Company assumed approximately $1.3 million in Voyager
indebtedness as a result of the merger.
On December 31, 1996, the Company sold the stock of Howell Transportation
Services, Inc. (HTS) to its President, Bradley N. Howell, a 6.1% shareholder
of Howell Corporation and a son of Paul N. Howell, President and Chief
Executive Officer of Howell Corporation before his May 14, 1997,
retirement. The sale occurred after the crude oil trucking assets of HTS
were sold to Genesis Crude Oil, L.P. Prior to the sale, the Company
obtained a fairness opinion from the investment banking firm of The GulfStar
Group, Inc.
<PAGE>
In 1990, the Company commenced paying the premiums on an insurance policy
pursuant to a Split Dollar Life Insurance Agreement entered into between the
Company and the trustees of certain trusts established by Paul N. Howell and
his wife. The life insurance policy is a joint and last survivor policy on
the lives of Paul N. Howell and his wife. Pursuant to the terms of the
agreement, upon the first to occur of: (1) the death of the last insured,
(2) the surrender of the policy, or (3) the passing of one year after the
policy is paid up, the Company is entitled to be paid the net cash value of
the policy before any proceeds from the policies are paid to the trustees
named in the agreement. Because the net cash value of the policy is
expected to be almost as much as the cumulative premiums paid over the life
of the Agreement, the effect of the premium payments on the Company's
earnings is not expected to be material.
The Company has entered into a Deferred Compensation and Salary
Continuation Agreement with Paul N. Howell. Pursuant to the terms of that
Agreement, the Company has contracted to pay Mr. Howell, or his wife if she
survives his death, certain annual payments upon his termination of
employment for any reason. Those annual payments are $17,500 each year for
the years 1991 through 1996, inclusive, and $30,000 each year for the years
1997 through 1999, inclusive. As Mr. Howell's employment with the Company
continued through a portion of this period of time, the Company was relieved
of its obligation for each annual payment set out above as that year
expires. Since Mr. Howell retired on May 14, 1997, the Company will make
the annual payments of $30,000 in years 1998 and 1999.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission ("SEC") and the New York Stock Exchange
initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of the Company. Officers, directors and
greater than ten-percent shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all section 16(a) filing requirements applicable to
its officers, directors and greater than ten-percent beneficial owners were
complied with during the fiscal year ended December 31, 1997.
Item 2. Ratification of Appointment of Independent Auditors
Deloitte & Touche LLP has been appointed by the Board of Directors as
independent auditors of the Company and its subsidiaries for the fiscal year
ending December 31, 1998. This appointment is being presented to the
shareholders for ratification. Deloitte & Touche LLP served the Company as
independent auditor for the fiscal year ended December 31, 1997. Although
the Company is not required to obtain shareholder ratification of the
appointment of the independent auditors for the Company for the fiscal year
ended December 31, 1998, the Company has elected to do so.
Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting. While they do not plan to make a statement at the meeting, such
representatives will be available to respond to appropriate questions from
shareholders and will be free to make a statement if they so desire.
In the event that the shareholders do not ratify the appointment of
Deloitte & Touche LLP as the independent auditor of the Company, the Board
of Directors will consider the retention of other independent auditors.
The Board of Directors of the Company has unanimously approved Deloitte &
Touche LLP as the independent auditors for the Company for the fiscal year
ended December 31, 1998 and recommends a vote "FOR" the ratification of the
appointment of Deloitte & Touche LLP as independent auditors for the Company
for such fiscal year.
<PAGE>
Shareholders' Proposals for 1999 Annual Meeting
Proposals of shareholders of the Company which are intended to be
included in the Company's Proxy Statement and proxy relating to the 1999
Annual Meeting of the Company must be received at the Company's principal
executive offices no later than November 27, 1998. Such proposals must be
in conformity with all applicable legal provisions, including Rule 14a-8 of
the General Rules and Regulations under the Securities Exchange Act of 1934.
Other Business
The Board of Directors of the Company does not know of any other matters
which are to be presented for action at the meeting. However, if any other
matters properly come before the meeting, it is intended that the enclosed
proxy will be voted in accordance with the recommendation of the Board of
Directors.
By Order of the Board of Directors,
Donald W. Clayton
Chairman of the Board
Houston, Texas
March 25, 1998
<PAGE>
COMMON SHAREHOLDER'S PROXY
HOWELL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul N. Howell and Otis A. Singletary, and
each of them, as proxies, each with full power of substitution, to represent and
vote as designated below all shares of Common Stock of Howell Corporation
("Company") held of record by the undersigned on February 27, 1998, at the
Annual Meeting of Shareholders to be held on April 29, 1998, or any adjournments
thereof:
(Continued and to be signed on other side)
A [X] Please mark your
votes as in this
example.
(1) ELECTION OF THREE CLASS I DIRECTORS: WITHHOLD AUTHORITY to vote for all
FOR all nominees listed below |_| nominees listed below |_|
(INSTRUCTION: To withhold authority to vote for any individual nominee
strike through the nominee's name below.)
Paul N. Howell Donald W. Clayton Richard K. Hebert
(2) PROPOSAL TO RATIFY THE APPOINTMENT of Deloitte & Touche LLP as independent
auditors for the Company:
FOR |_| AGAINST |_| ABSTAIN |_|
(3) Discretionary authority to vote on other business that may properly come
before the meeting.
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this Proxy will
be voted for Proposals 1 and 2 above.
PLEASE MARK, SIGN, DATE AND RE-TURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Signature________________________________________
Signature________________________________________
Signature, if held jointly
DATED: ____________________, 1998
Note:Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. 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.
