SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
Avondale Industries, Inc.
_________________________
(Name of Registrant as Specified In Its Charter)
Board of Directors of Avondale Industries, Inc.
_______________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
_______________________________________________________
2) Aggregate number of securities to which transaction
applies:
_______________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:<FN1>
_______________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________
<FN1> Set forth the amount on which the filing fee is calculated
and state how it was determined.
[ ] 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:
_____________________________________________
<PAGE>
[LETTERHEAD OF AVONDALE]
April 6, 1994
Dear Shareholder:
We invite you to attend the 1994 Annual Meeting of Shareholders
of Avondale Industries, Inc. to be held on May 6, 1994.
It is important that your shares are represented at this meeting.
Whether or not you plan to attend the meeting, please review the
enclosed proxy materials, complete the attached proxy form below, and
return it promptly in the envelope provided.
<PAGE>
Avondale Industries, Inc.
5100 River Road
Avondale, Louisiana 70094
______________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
______________________________
TO STOCKHOLDERS OF AVONDALE INDUSTRIES, INC.:
The Annual Meeting of Stockholders of Avondale Industries,
Inc. (the "Company") will be held at 10:00 a.m. local time on
Friday, May 6, 1994, in the main conference room on the second
floor of the Company's Administration Building, 5100 River Road,
Avondale, Louisiana, to elect two directors and transact such
other business as may properly come before the meeting or any
adjournment thereof.
Only holders of record of common stock of the Company at the
close of business on April 5, 1994, are entitled to notice of and
to vote at the annual meeting.
All stockholders are cordially invited to attend the meeting
in person. However, if you are unable to attend in person and
wish to have your stock voted, PLEASE COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING POSTPAID
ENVELOPE AS PROMPTLY AS POSSIBLE. Your proxy may be revoked by
appropriate notice to the Secretary of the Company at any time
prior to the voting thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Thomas M. Kitchen
Secretary
Avondale, Louisiana
April 6, 1994
<PAGE>
Avondale Industries, Inc.
5100 River Road
Avondale, Louisiana 70094
April 6, 1994
PROXY STATEMENT
This Proxy Statement is furnished to the stockholders of
Avondale Industries, Inc. (the "Company") in connection with the
solicitation on behalf of the Board of Directors of proxies for
use at the Annual Meeting of Stockholders of the Company
scheduled to be held on Friday, May 6, 1994, at 10:00 a.m. local
time, in the main conference room on the second floor of the
Company's Administration Building, 5100 River Road, Avondale,
Louisiana, and at any adjournment thereof (the "Annual Meeting").
Only holders of record of common stock of the Company
("Common Stock") at the close of business on April 5, 1994 are
entitled to notice of and to vote at the Annual Meeting. On that
date, the Company had outstanding 14,464,175 shares of Common
Stock, each of which is entitled to one vote with respect to each
matter considered at the Annual Meeting.
The enclosed proxy may be revoked by a stockholder at any
time prior to its exercise by filing with the Secretary of the
Company a written revocation or duly executed proxy bearing a
later date. The proxy will also be deemed revoked if the stock-
holder votes in person at the Annual Meeting.
This Proxy Statement is first being mailed to stockholders
on or about April 6, 1994, and the cost of soliciting proxies
hereunder will be borne by the Company. In addition to the use
of the mails, proxies may be solicited by personal interview,
telephone or telegraph. Banks, brokerage houses and other
institutions, nominees and fiduciaries will be requested to
forward the soliciting material to their principals and to obtain
authorization for the execution of proxies, and the Company will,
upon request, reimburse them for their expenses in so acting. In
addition, proxies will be solicited by Corporate Communications,
Inc., an investor relations firm that is paid $2,500 per month
plus its out-of-pocket expenses to perform a variety of services
on behalf of the Company, including the solicitation of proxies.
ELECTION OF DIRECTORS
The Company's Articles of Incorporation and By-laws provide
for a Board of Directors of six persons allocated among three
classes of directors who serve three-year staggered terms, with
one class to be elected at each annual stockholders' meeting.
The term of office of one class of two directors expires at the
Annual Meeting. Accordingly, proxies cannot be voted for more
than two nominees.
Unless authority to vote for the election of directors is
withheld, the persons named in the enclosed proxy will vote all
shares represented by the proxies received by them for the
election of each of the below-named nominees proposed for
election by the Board of Directors. In accordance with the
Company's By-laws, if either of these nominees should decline or
become unable to serve for any reason, votes will be cast instead
for a substitute nominee designated by the Board of Directors or,
if none is designated, the number of authorized directors shall
be automatically reduced by the total number of nominees
withdrawn from consideration. Under the Company's By-laws,
directors are elected by plurality vote.
The following table sets forth certain information relating
to the directors of the Company as of March 25, 1994, including
their beneficial ownership of shares of Common Stock as
determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934. Unless otherwise indicated, (i) each
director has been engaged in the principal occupation shown for
more than the past five years and (ii) the shares shown as being
beneficially owned are held with sole voting and investment
power.
<TABLE>
<CAPTION>
Proposed Nominees for Election:
Number of
Name, Age, Principal Occupation Nominated Shares
and Directorships in For Term Director Beneficially
Other Public Corporations Expiring Since Owned<FN1>
_______________________________ ________ ________ ____________
<S> <C> <C> <C>
Albert L. Bossier, Jr., 61
Chairman of the Board, Chief Executive
Officer, and President of the Company<FN2> 1997 1985 290,346<FN3>
Hugh A. Thompson, 59
Professor, School of Engineering,
Tulane University<FN4> 1997 1988 2,000
The Board of Directors recommends a vote
FOR each of the proposed nominees.
Other Directors:
Number of
Name, Age, Principal Occupation Serving Shares
and Directorships in Term Director Beneficially
Other Public Corporations Expiring Since Owned<FN1>
_______________________________ ________ ________ ____________
William A. Harmeyer, 73 1995 1993 500
Retired; former Vice President of
the Company<FN5>
Thomas M. Kitchen, 46 1995 1987 130,044<FN6>
Vice President, Chief Financial
Officer and Secretary of the
Company<FN2>
Anthony J. Correro, III, 52 1996 1988 500
Partner, Jones, Walker, Waechter,
Poitevent, Carrere & Denegre (law
firm)
Kenneth B. Dupont, 55 1996 1987 38,882<FN8>
Vice President of the Company;
President of Avondale Gulfport
Marine, Inc. and Avondale
Enterprises, Inc.; Chief
Executive Officer of Genco
Industries, Inc. and affiliated
companies; Director of First
Citizens Bancstock, Inc. (bank
holding company)<FN2><FN7>
All directors and executive officers
as a group (6 persons) 462,272
</TABLE>
_________________________
<FN1> None of the proposed nominees or directors beneficially own
in excess of 1.0% of the Common Stock, except Mr. Bossier,
who beneficially owns 2.0% of such stock. The 462,272
shares of Common Stock beneficially owned by all of the
Company's directors and executive officers as a group
constitute 3.1% of the Common Stock.
<FN2> Messrs. Bossier, Kitchen and Dupont are the executive
officers of the Company for whom compensation information is
disclosed in this Proxy Statement.
<FN3> Includes 18,506 shares allocated to Mr. Bossier's Employee
Stock Ownership Plan ("ESOP") account and 159,851 shares
that he has the right to acquire under currently exercisable
stock options.
<FN4> Mr. Thompson was the Dean of the School of Engineering,
Tulane University, from 1976 to 1991.
<FN5> Effective March 12, 1993, the Board of Directors appointed
Mr. Harmeyer to fill the vacancy created as a result of Mr.
Richard F. Brunner's death on March 6, 1993. Mr. Harmeyer
retired from the Company effective February 1, 1986. From
1978 until his retirement, Mr. Harmeyer served as Shipyard
Division, Group Vice President-Production.
<FN6> Includes 9,227 shares allocated to Mr. Kitchen's ESOP
account and 68,000 shares that he has the right to acquire
under currently exercisable stock options.
<FN7> Mr. Dupont was named President of Avondale Enterprises, Inc.
in November 1989, and was named Chief Executive Officer of
Genco Industries, Inc. and three other affiliated companies
in October 1990.
<FN8> Includes 8,678 shares allocated to Mr. Dupont's ESOP account
and 17,000 shares that he has the right to acquire under
currently exercisable stock options.
_____________________
During 1993, the Board of Directors held five regular
meetings and two special meetings. Each director of the Company
attended at least 75% of the aggregate number of meetings held
during 1993 of the Board and any committees on which he served.
Members of the Board who are not officers receive an annual fee
of $12,000 and an additional fee of $1,500 for each meeting of
the Board or committee thereof attended, and they are permitted
to defer all or some of their fees under a Directors' Deferred
Compensation Plan adopted by the Company in 1989. Deferred fees
earn interest at a rate of 8.5% per annum compounded annually,
and are payable in five equal installments or a lump sum upon the
earliest of the director's resignation, removal, attainment of
age 65, or death. The provisions of the plan, including the
interest rate payable on deferred fees, may be amended at any
time by the Board of Directors. Each director is reimbursed for
expenses incurred in attending meetings.
The Board has an Audit Committee, of which Messrs. Correro,
Harmeyer and Thompson are members, that meets periodically with
the Company's management, independent public accountants and
internal auditors to obtain an assessment of the financial
condition and results of operations of the Company, to ensure the
independence of the Company's independent accountants and to
report to the Board with respect thereto. The committee met
twice during 1993. The Board also has a Compensation Committee,
on which Messrs. Correro and Thompson serve, that determines the
general compensation payable to employees of the Company. The
committee met once during 1993. The Board also has a Stock
Awards Committee, on which Messrs. Correro and Thompson serve,
that administers the Company's Performance Share Plan and Stock
Appreciation Plan. The Stock Awards Committee did not meet
during 1993.
The Board of Directors does not have a nominating committee.
Any stockholder desiring to nominate persons for election to the
Board must comply with the procedures established by the
Company's Articles of Incorporation and By-laws. Such
nominations must be made by written notice delivered to the
Company's Secretary at its principal executive offices, 5100
River Road, Avondale, Louisiana 70094, and generally must be
received no later than the close of business on the tenth day
following the date on which notice of the annual meeting is
mailed. The notice must include the following information with
respect to each person the stockholder proposes to nominate: (i)
the name, age, business address and residence address of such
person, (ii) the principal occupation or employment of such
person, (iii) the class and number of shares of capital stock of
the Company of which such person is the beneficial owner
(determined in accordance with Article VA. of the Company's
Articles of Incorporation), and (iv) any other information
relating to such person that would be required to be disclosed in
solicitations of proxies for election of directors, or would be
otherwise required, in each case pursuant to Regulation 14A under
the Securities Exchange Act of 1934. The notice must also
include the following information with respect to the stockholder
giving the notice: (i) the name and address of such stockholder
and (ii) the class and number of shares of capital stock of the
Company of which such stockholder is the beneficial owner
(determined in accordance with Article VA. of the Company's
Articles of Incorporation).
PRINCIPAL STOCKHOLDERS
The following persons are, to the knowledge of the Company,
the only persons that beneficially owned, as of March 25, 1994,
more than five percent of the Common Stock, calculated in
accordance with Rule 13d-3 under the Securities Exchange Act of
1934. Unless otherwise indicated, all shares indicated as
beneficially owned are held with sole voting and investment
power.
<TABLE>
<CAPTION>
Number of Shares
Name and Address Beneficially Owned Percent of Class
<S> <C> <C>
Blanche S. Barlotta, R. Dean
Church and Rodney J. Duhon, Jr., 7,296,341<FN1> 50.4%
as ESOP Trustees
P. O. Box 50280
New Orleans, Louisiana 70150
R. B. Haave Associates, Inc.
270 Madison Avenue, 13th Floor 1,178,200<FN2> 8.1%
New York, New York 10016
Chestnut Hill Management Corp.
One Boston Place 964,600<FN3> 6.7%
Boston, Massachusetts 02108
</TABLE>
_________________
<FN1> Voting rights of the 7,292,432 shares allocated to ESOP
participants' accounts are passed through to the participants.
Voting rights of the 3,909 unallocated shares are exercised by
the ESOP Trustees at the direction of the ESOP Administrative
Committee, the members of which are the ESOP Trustees and two
other officers of the Company, Ernest F. Griffin, Jr. and Eugene
E. Blanchard, Jr. Investment power over the ESOP shares is
exercised by the ESOP Trustees at the direction of the ESOP
Administrative Committee, provided the ESOP Trustees determine
such direction to be consistent with their fiduciary duties.
<FN2> Based solely upon information as of February 2, 1994
provided by R. B. Haave Associates, Inc. to the Company. R. B.
Haave Associates, Inc. is an investment adviser registered under
the Investment Advisers Act of 1940.
<FN3> Chestnut Hill Management Corp., a Delaware corporation
("Chestnut Hill Management"), is the general partner of Chestnut
Hill Capital, L.P., a Delaware limited partnership ("Chestnut
Hill Capital"), and is an investment adviser registered under the
Investment Advisers Act of 1940. Information contained herein is
based solely upon information contained in a Schedule 13D filed
by Chestnut Hill Capital with the SEC on February 28, 1994. In
its Schedule 13D, Chestnut Hill Capital describes the nature of
the beneficial ownership of the Common Stock as follows:
"[Chestnut Hill Capital] has sole voting and dispositive control
over 800,000 shares of Common Stock of Avondale, which voting and
dispositive control is exercised by Chestnut Hill Management in
its capacity as general partner of [Chestnut Hill Capital].
Chestnut Hill Management has sole voting and dispositive control
over 964,600 shares of Common Stock of Avondale (including shares
it controls in its capacity as General Partner of [Chestnut Hill
Capital])." The Schedule 13D also discloses that certain
persons, in their capacity as controlling persons of Chestnut
Hill Management, may be deemed to share voting and dispositive
control with each other over such 964,600 shares and that a vice
president of Chestnut Hill Management who is also portfolio
manager of [Chestnut Hill Capital] may be deemed to share voting
and dispositive control over 800,000 of those shares.
________________________
EXECUTIVE COMPENSATION
Summary of Executive Compensation
The following table sets forth certain information regarding
the compensation of the Company's Chief Executive Officer and
each of the Company's other executive officers.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual
Compensation Long Term Compensation
____________ ______________________
Awards Payouts
________ _______
Name Securities
and Underlying
Principal Options/ LTIP All Other
Positions Year Salary SARs(#)<FN1> Payouts<FN1><FN2> Compensation<FN3>
_________ ____ ______ ____________ ___________ _______________
<S> <C> <C> <C> <C> <C>
Albert L. Bossier, Jr. 1993 $543,224 0 $ 0 $17,384<FN4>
Chairman of the Board, 1992 545,728 7,650 35,640 17,718
Chief Executive Officer 1991 600,816 6,120 49,005
and President
Thomas M. Kitchen 1993 254,179 0 0 13,551<FN5>
Vice President, Chief 1992 255,350 3,400 15,840 14,565
Financial Officer and 1991 281,112 2,720 21,780
Secretary
Kenneth B. Dupont 1993 190,526 0 0 4,145<FN6>
Vice President of the 1992 191,404 850 3,960 6,424
Company 1991 210,720 680 5,445
</TABLE>
______________________________
<FN1> Each of the named executive officers is a participant in the
Company's Performance Share Plan and in the Company's Stock
Appreciation Plan, both of which were adopted by the Company
in 1985 prior to the sale (the "Spin-Off") of its Common Stock
by its former corporate parent to a newly-formed Employee Stock
Ownership Plan of which the Company's employees are
participants. The ESOP borrowed a substantial portion of
the purchase price from the Company (which in turn borrowed
funds from a bank group) and, as an incentive to reduce this
debt, at the time of the Spin-Off Mr. Bossier was awarded,
pursuant to the terms of the Performance Share Plan, rights to
acquire shares of the Company's Common Stock. Messrs. Kitchen
and Dupont were awarded similar rights shortly before the
execution of their respective Employment Agreements. The
rights vested as certain Company performance goals,
principally the reduction of the ESOP loan, were achieved. The
LTIP Payouts disclosed in the Long-Term Compensation columns
were non-discretionary and reflect, as of the date such shares
were earned, the fair market value of the shares of Common
Stock earned in accordance with the terms of each executive
officer's award. Under the Performance Share Plan, each
participant received cash, in lieu of shares of Common
Stock, equal to the assumed income tax liability
resulting from the settlement of the award. Options
awarded in 1991 and 1992 were granted pursuant to the terms
of the Stock Appreciation Plan, which permits the Company
to award options to acquire that number of shares of Common Stock
for which cash has been received under the Performance Share
Plan. With the retirement of the remaining balance of the
ESOP loan in 1992, all rights awarded pursuant to the
Performance Share Plan vested and all shares have been delivered
to the participants.
<FN2> Reflects the value of awards settled during the year indicated
pursuant to the Company's Performance Share Plan. Awards
are valued as of the date performance goals are met, and are
settled with Common Stock and cash. The cash portion is equal
to the assumed income tax liability resulting from the
settlement of the award.
<FN3> In accordance with the transitional provisions of the revised
proxy rules, information with respect to fiscal year 1991 has
not been included.
<FN4> Consists of $3,978 in medical expense reimbursement and $13,406
in group life and disability insurance premiums.
<FN5> Consists of $2,899 in medical expense reimbursement and
$10,652 in group life and disability insurance premiums.
<FN6> Consists of $956 in medical expense reimbursement and $3,189
in group life and disability insurance premiums.
_______________________________
Stock Options and Stock Appreciation Rights
The following table sets forth certain information
concerning the exercise of options and stock appreciation rights
during 1993 and unexercised options and stock appreciation rights
on December 31, 1993.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN 1993 AND
FISCAL YEAR-END OPTION/SAR VALUES
Number of Securities Value of Unexercised
Number of Underlying Unexercised In-the-Money Options/SARs
Shares Options/SARs at 12/31/93 at 12/31/93
Acquired Value _______________________________ ___________________________
Name on Exercise Realized Exercisable<FN1> Unexercisable Exercisable Unexercisable
____ ___________ ________ ___________ _____________ ___________ _____________
<S> <C> <C> <C> <C> <C> <C>
Albert L. Bossier, Jr. None $0 159,851 0 $49,343 0
Thomas M. Kitchen None 0 68,000 0 21,930 0
Kenneth B. Dupont None 0 17,000 0 5,483 0
______________________________
</TABLE>
<FN1> All options are in tandem with stock appreciation rights.
_______________________
Pension Plans
Messrs. Bossier, Kitchen and Dupont participate in a
qualified defined-benefit pension plan (the "Qualified
Pension Plan"), a non-qualified supplemental pension plan
(the "Supplemental Pension Plan") and a non-qualified
executive excess retirement plan (the "Excess Retirement
Plan"), each of which is described below.
Qualified Pension Plan. The Qualified Pension Plan covers
all employees of the Company and certain subsidiaries who have
attained the age of 21 and completed one year of service
other than certain employees covered by collective bargaining
agreements. The annual benefit payable to each participant
upon retirement at age 65 is based upon (i) his or her total years
of service with the Company, including credit for employment by
the former corporate parent of the Company, and (ii) his or her
average annual total compensation for the five consecutive
calendar year period that is within the ten consecutive calendar
years immediately preceding the calendar year of the earlier of his
or her retirement or termination of employment and that results
in the highest aggregate earnings. Reduced benefits are also
payable upon a participant's death, disability or early retirement
at age 55.
A participant's benefit, which becomes vested after five years
of service, is not subject to reduction for social security
benefits but is reduced by the amount of an annuity purchased for
each participant in 1985. The balance of a participant's benefit is
then compared with the actuarially equivalent value of the shares of
Common Stock and other assets allocated to his or her ESOP
account. If the actuarially equivalent value of such shares is
equal to or greater than the benefit (reduced as described above),
no benefit is payable under the Qualified Pension Plan. If the
actuarially equivalent value of such shares is less than the
benefit (reduced as described above), the Qualified Pension Plan
pays a benefit equal to the difference. Subject to certain
exceptions and the right of participants in certain circumstances
to elect otherwise, benefits are payable to the executive officers
in the form of joint and survivor annuities under which payments
are guaranteed for 10 years to the participant, his beneficiary or
the beneficiary's estate and payments in the amount of one-half
the participant's benefit are paid following the participant's
death to his surviving spouse for the remainder of the spouse's
life.
The Internal Revenue Code of 1986, as amended (the "Code")
limits the annual compensation upon which benefits may be
calculated to $150,000 for 1994 and restricts a participant's
maximum annual benefit under a qualified pension plan to $118,000
for 1994. These limits are adjusted annually for inflation.
Supplemental Pension Plan. The Supplemental Pension Plan
covers those officers of the Company selected by the Board
of Directors and certain participants in a prior pension plan of a
predecessor corporation of the Company. Each participant receives
a monthly benefit, payable when he attains age 65, equal to 15% of
his total average monthly compensation for the five consecutive
years out of the last ten consecutive years of his employment that
results in the highest total monthly average compensation
multiplied by a fraction (which cannot exceed one) the numerator
of which is the participant's actual years of service and the
denominator of which is the years of service the participant would
have if his employment continued until he was at least 55 and had
ten years of service. The benefit is not subject to reduction for
amounts paid under the Qualified Pension Plan, social security
benefits or the compensation and benefit limits imposed by the
Code. Benefits are payable in reduced amounts to employees who
retire between the ages of 55 and 65 and in further reduced
amounts to employees with at least ten years of service who
terminate their employment prior to the attainment of age 55.
Following the death of a participant, his surviving spouse will
continue to receive, for the remainder of the spouse's life,
payments in an amount equal to one-half the participant's benefit.
Excess Retirement Plan. The Excess Retirement Plan
covers those participants in the Qualified Pension Plan and
ESOP that the Board of Directors designates as participants in
the Excess Retirement Plan. The benefits payable under this plan
are derived from a formula that is designed to reimburse
participants for certain benefits not otherwise payable under the
Qualified Pension Plan and ESOP, including benefits not otherwise
payable because of the (i) annual compensation and benefit limits
imposed by the Code on qualified plans, which are discussed above in
the sections describing the Qualified Pension Plan and the ESOP,
and (ii) provisions of the Qualified Pension Plan that operate
to reduce benefits for participants who retire or terminate their
service prior to age 65. Benefits payable under the plan are
in addition to amounts payable under the Qualified Pension
Plan and the Supplemental Pension Plan, and are not subject
to reduction for social security benefits.
Benefits are payable under the Excess Retirement Plan within 90
days of the end of the calendar year in which the participant
attains age 65, retires or dies, whichever is earlier. Subject to
certain restrictions, amounts are paid in the same manner as
provided under the Qualified Pension Plan.
Aggregate Benefits Payable Under the Pension Plans. The
following table reflects the aggregate annual benefits under the
Qualified Pension Plan, Supplemental Pension Plan and Excess
Retirement Plan that an executive officer with the years of service
and average annual earnings (as calculated in accordance with
the Qualified Pension Plan and Supplemental Pension Plan)
indicated can expect to receive under the plans upon retirement
at age 65. The benefits under the Qualified Pension Plan and the
Excess Retirement Plan are offset by the actuarially equivalent
value of the shares of Common Stock and other assets allocated to
the ESOP account of each participant. This offset is not
reflected in the table below. The table assumes benefits are
paid under a life annuity with ten years certain payment, but
before reduction for the annuities purchased in Pension Plan.
<TABLE>
<CAPTION>
Avondale Industries,Inc.
Estimated Annual Retirement Benefits
(Before Reduction for ESOP Benefits)
Average Years of Service
Annual _______________________________________________________________
Earnings 15 years 20 years 25 years 30 years 35 years 40 years
________ ________ ________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
$200,000 $75,000 $90,000 $105,000 $120,000 $135,000 $150,000
225,000 84,375 101,250 118,125 135,000 151,875 168,750
250,000 93,750 112,500 131,250 150,000 168,750 187,500
300,000 112,500 135,000 157,500 180,000 202,500 225,000
350,000 131,250 157,500 183,750 210,000 236,250 262,500
400,000 150,000 180,000 210,000 240,000 270,000 300,000
450,000 168,750 202,500 236,250 270,000 303,750 337,500
500,000 187,500 225,000 262,500 300,000 337,500 375,000
550,000 206,250 247,500 288,750 330,000 371,250 412,500
600,000 225,000 270,000 315,000 360,000 405,000 450,000
</TABLE>
Compensation covered by the plans consists of
salary, bonus and automobile allowance. Covered
compensation for Messrs. Bossier, Kitchen and Dupont
equals the amount reported in the Summary Compensation
Table under the heading "Annual Compensation - Salary,"
plus the automobile allowance. Messrs. Bossier,
Kitchen and Dupont have 37, 16 and 30 years of service,
respectively, under each of the plans. The Company may
establish a trust to fund the amounts accruing under
the Supplemental Pension Plan and the Excess Retirement
Plan, but participants' rights to these trust assets
would be no greater than the rights of unsecured
creditors.
Employment Agreements
All amounts set forth under the heading "Salary"
in the Summary Compensation Table are payable under
employment agreements between the Company and each
executive officer (the "Employment Agreements") which
provide for fixed base salaries and for annual bonuses
as determined by the Board of Directors. The Company
entered into the Employment Agreement with Mr. Bossier
at the time of the Spin-Off in 1985 and with Messrs.
Kitchen and Dupont in 1987, the year preceding the
Company's initial public offering. In January 1994 the
Company extended the term of the Employment Agreements
from December 31, 1994 to December 31, 1996. After
December 31, 1996, the employment of each executive
officer continues from year to year, subject to the
right of the Company or the employee to terminate such
employment without cause at December 31, 1996 or on any
subsequent December 31 (a "normal termination date"),
by giving at least 60 days prior written notice to the
other. Termination of employment that is properly
effected by either party with respect to a normal
termination date is not a breach of the Employment
Agreement. Under the Employment Agreements, base
salaries may be increased but not decreased by the
Board and bonuses are fixed from time to time by the
Board, provided that Mr. Bossier may not be paid a
bonus in an amount less than the bonus paid for the
immediately preceding year.
Under the Employment Agreements, if the employment
of an executive officer is terminated by the executive
officer for certain specified reasons or by the Company
(at any time other than a normal termination date) for
any reason other than cause (as defined therein), the
executive officer is entitled to a lump sum severance
payment equal to three times the sum of his annual
salary and annual bonus, which amount is reduced if the
executive officer's employment is terminated after age
62. If the employment of any of Messrs. Bossier,
Kitchen or Dupont is terminated under circumstances
giving rise to their entitlement to claim their
severance benefits, the lump sum severance payments to
which each would currently be entitled are
approximately $1,865,592, $872,856 and $654,336,
respectively.
The severance benefits payable under the
Employment Agreements also include the continuation of
health and insurance benefits, and supplemental lump
sum pension benefits. These supplemental pension
benefits are based upon compensation and are reduced by
benefits earned under the Qualified Pension Plan. If
supplemental pension benefits are paid as part of an
executive officer's severance benefits under an
Employment Agreement, benefits otherwise payable to him
under the Excess Retirement Plan are reduced. To the
extent that any executive officer had shares of Common
Stock withheld from allocation to his ESOP account
because of the limits imposed by the Code, the Company
has agreed to pay to him the fair market value of such
shares upon termination of his employment.
Compensation Committee Interlocks and Insider
Participation
The members of the Compensation Committee of the
Board of Directors are Hugh A. Thompson and Anthony J.
Correro, III. The Compensation Committee makes
recommendations to the Board as to executive
compensation. The Stock Awards Committee, of which Mr.
Correro and Mr. Thompson are members, administers the
Company's Performance Share Plan and Stock Appreciation
Plan.
The law firm of Jones, Walker, Waechter,
Poitevent, Carrere & Denegre, of which Mr. Correro is
one of 85 partners, was paid $813,879 in 1993 by the
Company for legal services rendered.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of
Directors has furnished the following report on
executive compensation:
Pursuant to the By-laws of the Company, the Board
of Directors has established a Compensation Committee
consisting of two Board members designated by the
Company's Chairman of the Board, Chief Executive
Officer and President. Messrs. Correro and Thompson,
who have comprised the Compensation Committee since
July 16, 1992, are both outside directors of the
Company. Under the By-laws, the Compensation Committee
has the responsibility of determining the general
compensation payable to the employees of the Company.
As disclosed under the heading "Executive
Compensation-Employment Agreements", each of the
Company's three executive officers has an employment
agreement with the Company that, as extended by the
Company in January 1994, may not be terminated prior to
December 31, 1996 and which provides, among other
things, that the Board of Directors has only the
authority to increase, and not decrease, each executive
officer's base salary (and, in the case of Mr. Bossier,
his annual bonus) as compared to the amount paid in the
immediately preceding year. The Compensation Committee
approved the contract extension in recognition of such
persons' significant contributions to the Company's
successful bids for significant U.S. Navy shipbuilding
contracts awarded in 1993 and to the successful
resolution in December 1993 of certain Requests for
Equitable Adjustment that the Company had previously
submitted to the U.S. Navy. Mr. Bossier entered into
his Employment Agreement at the time of the Spin-Off in
1985, and Messrs. Kitchen and Dupont entered into their
respective Employment Agreements in 1987, the year
preceding the Company's initial public offering.
No increases in cash compensation of the executive
officers have been made since 1990, and, in February
1992, each executive officer agreed to a ten percent
reduction in his cash compensation as part of an
overall ten percent reduction in compensation paid to
all of the officers of the Company. The ten percent
reduction was rescinded in December 1993 following the
successful settlement in December 1993 of the Requests
for Equitable Adjustment.
As noted in footnote 1 to the Summary Compensation
Table, each of the named executive officers is a
participant in the Company's Performance Share Plan and
in the Company's Stock Appreciation Plan. Both of
these plans were adopted by the Company in 1985
immediately prior to the sale of its Common Stock (the
"Spin-Off") by its former corporate parent to a newly-
formed Employee Stock Ownership Plan of which the
Company's employees are participants. The ESOP
borrowed a substantial portion of the purchase price
from the Company (the "ESOP Loan") (with the Company in
turn borrowing funds from a bank group) and, as an
incentive to reduce this debt, at the time of the Spin-
Off Mr. Bossier was awarded, pursuant to the terms of
the Performance Share Plan, rights to acquire shares of
the Company's Common Stock. Messrs. Kitchen and Dupont
were awarded similar rights shortly before the
execution of their respective Employment Agreements.
The rights vested as certain Company performance goals,
principally the reduction of the ESOP Loan, were
achieved. The LTIP Payouts disclosed for the years
1991 and 1992 in the Summary Compensation Table were
non-discretionary and reflect, as of the date such
shares were earned, the fair market value of the shares
of Common Stock earned in accordance with the terms of
the individual awards. The ESOP Loan was fully paid in
1992 and no further shares are issuable under the
current terms of the Performance Share Plan.
In addition, the Summary Compensation Table
discloses that during the years 1991 and 1992 the
Company awarded options to the named executive
officers. All such options were awarded pursuant to
the Company's Stock Appreciation Plan and were awarded
to participants in the Performance Share Plan solely to
replace the shares of the Company's Common Stock for
which such participants were required, under the
Performance Share Plan, to receive cash. No additional
stock options will be awarded for this purpose.
Under the Omnibus Budget Reconciliation Act
enacted in 1993, publicly held companies may be
prohibited from deducting as compensation expense for
federal income tax purposes total remuneration paid in
a single year to certain executive officers that is in
excess of certain statutory limits. When making its
future compensation decisions, the Compensation
Committee intends to consider the effects of this new
law on the Company.
Anthony J. Correro, III Hugh A. Thompson
Performance Graph
The graph and corresponding table below compare
the cumulative total stockholder return on the
Company's Common Stock from December 31, 1988 to
December 31, 1993 with the cumulative total return on a
NASDAQ index and a peer group index, in each case
assuming the investment of $100 on December 31, 1988 at
the closing price on that date and reinvestment of
dividends. The peer group index consists of the
Company, Bethlehem Steel Co., General Dynamics Corp.,
Litton Industries Inc., McDermott International Inc.,
Tenneco Inc., Todd Shipyards Corp. and Trinity
Industries Inc., and the returns of each issuer are
weighted according to its stock market capitalization
at the beginning of each period for which a return is
indicated. American Ship Building Co., which was
included in the peer group index in the Company's proxy
statement dated October 29, 1993, is omitted from the
peer group index herein because it is no longer
publicly traded.
[insert graph here]
<TABLE>
<CAPTION>
Cumulative Total Stockholder Return
Index December 31,
_____ _________________________________________________
1989 1990 1991 1992 1993
____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C>
The Company 90.13 45.78 32.14 18.51 57.47
Peer Group 119.83 95.65 83.34 121.48 189.54
NASDAQ 121.24 102.96 195.21 192.10 219.21
</TABLE>
_______________________________________
CERTAIN TRANSACTIONS
The law firm of Blue Williams, L.L.P., of which a
son of Mr. Albert L. Bossier, Jr., a director and the
chief executive officer of the Company, is a partner,
was paid $997,935 in 1993 by the Company for legal
services rendered.
OTHER MATTERS
Quorum and Voting of Proxies
The presence, in person or by proxy, of a majority
of the outstanding shares of Common Stock of the
Company is necessary to constitute a quorum. If a
quorum is present, directors will be elected by
plurality vote and the vote of a majority of the shares
of Common Stock present or represented at the Annual
Meeting will decide all other questions properly
brought before such meeting. If a quorum is not
present, those stockholders present may adjourn the
meeting to such time and place as they may determine;
however, with respect to the election of directors, the
meeting may be adjourned only from day to day until
such directors are elected. Those stockholders who
attend the second of such adjourned meetings will
constitute a quorum for the purpose of electing
directors.
All proxies in the form enclosed that are received
by the Board of Directors will be voted as specified
and, in the absence of instructions to the contrary,
will be voted for the election of the nominees named
above.
Shares as to which proxy authority to vote for any
nominee for election as a director is withheld by a
shareholder and shares that have not been voted by
brokers who hold shares on behalf of the beneficial
owner ("broker non-votes") will not be counted as voted
for any affected nominees. With respect to any matter
other than the election of directors that is properly
before the Annual Meeting, abstentions will have the
effect of a vote against the proposal and broker non-
votes will be counted as not present with respect to
the proposal.
The Board of Directors does not know of any
matters to be presented at the Annual Meeting other
than the election of directors. However, if any other
matters properly come before the meeting or any
adjournment thereof, it is the intention of the persons
named in the enclosed proxy to vote the shares
represented by them in accordance with their best
judgment.
Independent Public Auditors
The Board of Directors has appointed Deloitte &
Touche as independent auditors of the Company for the
fiscal year ended December 31, 1994. Deloitte & Touche
and its predecessors have served as the Company's
auditors since 1987. Representatives of Deloitte &
Touche are expected to be present at the Annual
Meeting. They will have the opportunity to make a
statement if they desire to do so and will be available
to respond to appropriate questions.
Stockholder Proposals
Any stockholder who desires to present a proposal
qualified for inclusion in the Company's proxy
materials relating to the 1995 annual stockholders'
meeting must forward the proposal to the Secretary of
the Company at the address shown on the first page of
this Proxy Statement in time to arrive at the Company
prior to December 7, 1994.
BY ORDER OF THE BOARD OF DIRECTORS
Thomas M. Kitchen
Secretary
Avondale, Louisiana
April 6, 1994
<PAGE>
AVONDALE INDUSTRIES, INC.
POST OFFICE BOX 50280
AVONDALE, LOUISIANA 70150
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
AVONDALE INDUSTRIES, INC.
The undersigned hereby appoints Bruce L. Hicks and Joseph W.
Mangin, Jr., or either of them, as proxies, each with full power
of substitution, and hereby authorizes each of them to represent
and to vote, as designated below, all shares of common stock of
Avondale Industries, Inc. held of record by the undersigned on
April 5, 1994 at the annual meeting of stockholders to be held
on May 6, 1994, or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR BOTH OF THE NOMINEES
LISTED BELOW:
Election of Directors
[ ] FOR both nominees [ ] WITHHOLD AUTHORITY
listed below
(except as marked to the to vote for both
contrary below) nominees listed below
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR EITHER
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME LISTED
BELOW.
Albert L. Bossier, Jr. Hugh A. Thompson
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION
IS GIVEN, THIS PROXY WILL BE VOTED FOR BOTH OF THE DIRECTOR
NOMINEES NAMED ABOVE. THE PROXY HOLDERS NAMED ABOVE WILL VOTE IN
THEIR DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME
BEFORE THE MEETING.
Dated: , 1994
Signature of Stockholder
Additional Signature, if held jointly
PLEASE SIGN EXACTLY AS NAME
APPEARS HEREON. WHEN SIGNING
AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN FULL
CORPORATE NAME BY PRESIDENT OR
OTHER AUTHORIZED OFFICER. IF
A PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED
PERSON.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
