- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
Form 10-K/A
(Mark One)
|X| Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 1998
|_| Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 0-16572
Avondale Industries, Inc.
(Exact name of registrant as specified in its charter)
Louisiana
(State or other jurisdiction of
incorporation or organization)
39-1097012
(I.R.S. Employer Identification No.)
5100 River Road, Avondale, Louisiana 70094
(Address of principal executive offices) (Zip Code)
(504) 436-2121
(Registrant's telephone number,
including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 par value per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |X|
The aggregate market value of the voting stock held by non-affiliates
(affiliates being directors, executive officers and holders of more than 5% of
the Company's common stock) of the Registrant at March 31, 1999 was
approximately $241,812,090.
The number of shares of the Registrant's common stock, $1.00 par value
per share, outstanding at March 31, 1999 was 13,260,867.
DOCUMENTS INCORPORATED BY REFERENCE
None.
<PAGE>
I. Part III of the annual Report is amended and restated in its entirety
to read as follows:
PART III
Item 10. Directors and Executive Officers of the Registrant.
The following table sets forth certain information relating to the
directors of the Company and certain information concerning the beneficial
ownership of shares of Common Stock by (i) each director, (ii) each executive
officer and (iii) all directors and executive officers of the company as a
group, all as of April 27, 1999, as determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934 (the "Exchange Act"). 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>
Number of
Name, Age, Principal Occupation Shares
and Directorships in Serving Term Director Beneficially
Other Public Corporations Expiring Since Owned(1)
- ----------------------------------------------------------- ------------ -------- ------------
<S> <C> <C> <C>
Thomas M. Kitchen, 51 2001 1987 73,877(4)
Corporate Vice President, Chief Financial
Officer, and Secretary of the Company(2)(3)
Francis R. Donovan, 64 2001 1994 799(6)
President, Designers and Planners, Inc.(5);
Vice Admiral, U.S. Navy (retired)
Albert L. Bossier, Jr., 66 2000 1985 103,376(7)
Chairman of the Board, Chief Executive
Officer, and President of the Company(2)
Hugh A. Thompson, 64 2000 1988 3,299(9)
Retired(8)
Anthony J. Correro, III, 57 1999 1988 1,299(11)
Partner, Correro Fishman Haygood Phelps
Weiss Walmsley & Casteix, L.L.P. (Law
firm)(10)
Kenneth B. Dupont, 60 1999 1987 29,312(13)
Corporate Vice President - Commercial and
Offshore Programs of the Company(2)(12)
R. Dean Church, 56 --- --- 8,476(15)
Corporate Vice President - Chief
Administrative Officer of the Company (2)(14)
Edward C. Mortimer, 64 --- --- 8,322(17)
Corporate Vice President - Government
Programs of the Company(2)(16)
Thomas H. Doussan, 67 --- --- 8,915(19)
Corporate Vice President - Chief Operating
Officer of the Company(18)
Ronald J. McAlear, 51 --- --- 6,948(21)
Corporate Vice President -Advanced Programs
& Marketing of the Company;(20)
All directors and executive officers as a group (10 244,623
persons)
</TABLE>
<PAGE>
- ----------------
(1) None of the directors or executive officers beneficially owns in excess
of one percent of the Common Stock. The 244,623 shares of Common Stock
beneficially owned by all of the Company's directors and executive
officers as a group constitute approximately 1.8% of the outstanding
Common Stock.
(2) Messrs. Bossier, Kitchen, Dupont, Church, and Mortimer are the
executive officers of the Company for whom compensation information is
disclosed in this Form 10-K/A.
(3) Mr. Kitchen has served as Corporate Vice President - Chief Financial
Officer of the Company since December 1, 1997. He has served as Vice
President, Chief Financial Officer, Secretary and a director of the
Company since April 1, 1987.
(4) Includes 2,769 shares allocated to Mr. Kitchen's Avondale Employee
Stock Ownership Plan ("ESOP") account and 18,283 shares that he has the
right to acquire under stock options that are exercisable within 60
days.
(5) Since September 1992, Mr. Donovan has served as a consultant to various
companies on maritime issues, and from November 1994 to June 1996 he
was employed as Strategic Mobility Coordinator, PRC Inc., an
information technology company. Since July 1996 he has served as
President of Designers and Planners, Inc., a marine engineering, naval
architecture and environmental planning firm.
(6) Consists of shares Mr. Donovan has the right to acquire under stock
options that are exercisable within 60 days.
(7) Includes 5,470 shares allocated to Mr. Bossier's ESOP account and
39,076 shares that he has the right to acquire under stock options that
are exercisable within 60 days.
(8) From 1963 to 1996, Dr. Thompson was on the engineering faculty of, and
from 1976 to 1991 Dr. Thompson was the Dean of the School of
Engineering at Tulane University, from which he retired in 1996.
(9) Includes 799 shares Dr. Thompson has the right to acquire under stock
options that are exercisable within 60 days.
(10) For more than five years prior to June 1994, Mr. Correro was a partner
in the law firm of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P.
(11) Includes 799 shares Mr. Correro has the right to acquire under stock
options that are exercisable within 60 days.
(12) Mr. Dupont has served as Corporate Vice President - Commercial and
Offshore Programs of the Company since December 1, 1997. He has served
as Vice President since April 1988 and a director of the Company since
April 1, 1987.
(13) Includes 2,400 shares allocated to Mr. Dupont's ESOP account and 13,708
shares that he has the right to acquire under stock options that are
exercisable within 60 days.
<PAGE>
(14) Mr. Church has served as Corporate Vice President and Chief
Administrative Officer of the Company since December 1, 1997. He served
as the Company's Vice President - Contracts, Legal & Insurance since
1987 and the Company's Vice President - Contracts, Credit and Insurance
from 1982 to 1987.
(15) Includes 1,504 shares allocated to Mr. Church's ESOP account and 6,972
shares that he has the right to acquire under stock options that are
exercisable within 60 days.
(16) Mr. Mortimer has served as Corporate Vice President - Government
Programs of the Company since December 1, 1997. He served as the
Company's Vice President of Program and Contract Management since 1991.
(17) Includes 298 shares allocated to Mr. Mortimer's ESOP account and 7,824
shares that he has the right to acquire under stock options that are
exercisable within 60 days.
(18) Mr. Doussan has served as the Company's Corporate Vice President and
Chief Operating Officer since December 1, 1997. He served as the
Company's Vice President of Commercial Ship Construction from 1994 to
1997 and the Company's Vice President of the Modular Construction
Division from 1991 to 1994.
(19) Includes 1,973 shares allocated to Mr. Doussan's ESOP account and 6,942
shares that he has the right to acquire under stock options that are
exercisable within 60 days.
(20) Mr. McAlear has served as the Company's Corporate Vice President -
Advanced Programs and Marketing since December 1, 1997. He served as
the Company's Vice President Advanced Programs and Marketing since
1991.
(21) Includes 392 shares allocated to Mr. McAlear's ESOP account and 6,556
shares that he has the right to acquire under stock options that are
exercisable within 60 days.
Section 16(a) Beneficial Ownership Reporting Compliance.
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and 10% shareholders to file with the Securities and Exchange
Commission initial reports of beneficial ownership, and changes in beneficial
ownership, of the Common Stock of the Company. During 1998, the Company's
directors and executive officers timely filed all required reports to the
Securities and Exchange Commission in compliance with Section 16(a) of the
Exchange Act.
<PAGE>
Item 11. Executive Compensation.
The following table sets forth certain information regarding the
compensation paid to the Company's Chief Executive Officer and to each of the
four most highly compensated executive officers of the Company whose annual
compensation exceeded $100,000 (collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
-------------
Number of
Name and Annual Shares
Principal Positions Compensation Underlying All Other
Year Salary (2) Bonus Stock Options Compensation
- --------------------------------------- ---- ---------- --------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Albert L. Bossier, Jr. 1998 $ 703,971 $ 308,439 45,000 $ 17,884(3)
Chairman of the Board, 1997 682,822 166,475 10,342
Chief Executive Officer and 1996 684,821 173,870 10,702
President
Thomas M. Kitchen 1998 329,378 145,072 21,055 10,348(4)
Corporate Vice President - 1997 319,480 77,891 7,610
Chief Financial Officer and 1996 320,415 81,351 7,660
Secretary
Kenneth B. Dupont 1998 246,954 108,012 15,786 7,752(5)
Corporate Vice President - 1997 239,530 58,399 7,069
Commercial and Offshore 1996 240,231 60,993 6,423
Programs
R. Dean Church 1998 153,685 67,454 7,000 6,426(6)
Corporate Vice President - 1997 131,019 37,638 4,630
Chief Administrative
Officer(1)
1998 153,685 67,218 7,000 5,402(7)
Edmund C. Mortimer 1997 149,051 36,339 5,602
Corporate Vice President -
Government Programs(1)
</TABLE>
- ----------------
(1) Named an Executive Officer effective December 1, 1997.
(2) Includes lump sum payments of 2.0%, 2.5% and 2.8% of salary made to all
employees in 1998, 1997 and 1996, respectively.
(3) Consists of $6,384 in medical expense reimbursement and $11,500 in
group life and disability insurance premiums.
(4) Consists of $748 in medical expense reimbursement and $9,600 in group
life and disability insurance premiums.
(5) Consists of $752 in medical expense reimbursement and $7,000 in group
life and disability insurance premiums.
(6) Consists of $1,326 in medical expense reimbursement and $5,100 in group
life and disability insurance premiums.
(7) Consists of $602 in medical expense reimbursement and $4,800 in group
life and disability insurance premiums.
<PAGE>
Stock Options and Stock Appreciation Rights
The following table sets forth certain information concerning the grant
of stock options during 1998.
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL YEAR 1998
Potential
Percent of Realizable
Total Value at
Number of Options Assumed Rates of
Securities Granted to Stock Price
Underlying Employees Appreciation for
Options in Fiscal Exercise Expiration Option Term
Name Granted Year Price Date 5% 10%
- ------------------------ ---------- ---------- -------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Albert L. Bossier, Jr. 45,000 20.66% $ 26.88 02/02/08 $ 760,711 $ 1,927,791
Thomas M. Kitchen 21,055 9.67% 26.88 02/02/08 355,928 901,992
Kenneth B. Dupont 15,786 7.25% 26.88 02/02/08 266,857 676,269
R. Dean Church 7,000 3.21% 26.88 02/02/08 118,833 299,879
Edmund C. Mortimer 7,000 3.21% 26.88 02/02/08 118,833 299,879
</TABLE>
The following table sets forth certain information concerning the
exercise of options and stock appreciation rights during 1998 and unexercised
options and stock appreciation rights on December 31, 1998.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
Number of securities Value of Unexercised
Shares underlying unexercised In-the-Money Options/SARs
acquired Value options/SARs at 12/31/98 at 12/31/98
Name on exercise realized Exercisable Unexercisable Exercisable Unexercisable
- ---------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Albert L. Bossier, Jr. -- -- 20,870 65,869 $ 146,921 $ 282,218
Thomas M. Kitchen -- -- 9,765 30,819 68,743 132,324
Kenneth B. Dupont -- -- 7,321 23,107 51,541 99,210
R. Dean Church -- -- 3,916 10,916 27,570 50,186
Edmund C. Mortimer -- -- 4,556 11,555 32,071 56,103
</TABLE>
<PAGE>
Pension Plans
Messrs. Bossier, Kitchen, Dupont, Church, Mortimer, Doussan and McAlear
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").
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 not subject to reduction for Social Security but 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.
<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>
$ 150,000 $ 56,250 $ 67,500 $ 70,750 $ 90,000 $ 101,250 $ 112,500
200,000 75,000 90,000 105,000 120,000 135,000 150,000
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
650,000 243,750 292,500 341,250 390,000 438,750 487,500
700,000 262,500 315,000 367,500 420,000 472,500 525,000
750,000 281,250 337,500 393,750 450,000 506,250 562,500
800,000 300,000 360,000 420,000 480,000 540,000 600,000
850,000 318,750 382,500 446,250 510,000 573,750 637,500
900,000 337,500 405,000 472,500 540,000 607,500 675,000
950,000 356,250 427,500 498,750 570,000 641,250 712,500
</TABLE>
Compensation covered by the plans consists of salary, bonus and an
automobile allowance. Covered compensation for Messrs. Bossier, Kitchen, Dupont,
Church and Mortimer equals the amount reported in the Summary Compensation Table
under the heading "Annual Compensation" plus the automobile allowance. Messrs.
Bossier, Kitchen, Dupont, Church and Mortimer have 42, 21, 35, 32 and 10 years
of service, respectively, under each of the plans.
<PAGE>
Employment and Change of Control Agreements
The Company has entered into Employment Agreements and Change of Control
Agreements with each of the Named Executive Officers. The Employment Agreements
provide for base salaries and for annual bonuses as determined by the
Compensation Committee of the Board of Directors. Under the Employment
Agreements, base salaries may be increased but not decreased by the Board. The
Employment Agreements expire on December 31, 2001. After December 31, 2001, 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, 2001 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, 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. 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.
Each of the Named Executive Officers is also a beneficiary of a Change of
Control Agreement with the Company. The agreements provide for the payment of
certain benefits upon an involuntary or constructive termination of the
officers' employment, except for cause, within three years following a change of
control. Benefits payable under the change in control agreements include (i) a
cash payment in an amount equal to three times salary plus bonus, (ii) continued
health and life insurance benefits for three years after termination, (iii) a
cash payment in the amount of the value of the additional benefits that the
officer would have become entitled to under the Pension Plan if he had been
employed for an additional three years, (iv) accelerated vesting and payout
under the Company's supplemental retirement plans and (v) a "tax gross-up" if
excise taxes are imposed upon certain payments received by the officers. To the
extent payments are made under these change of control agreements, no severance
payments will be made under the Employment Agreements.
<PAGE>
Compensation of Directors.
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, all or a portion of which they are permitted to
defer under a Directors' Deferred Compensation Plan. 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. In addition to the foregoing directors' fees, each director
is reimbursed for expenses incurred in attending meetings, and also receives
options to acquire 1,065 shares of Common Stock on the day following the annual
meeting for each year that the 1997 Stock Incentive Plan remains in effect and
shares of Common Stock are available for grant under such plan on such date.
Compensation Committee Interlocks and Insider Participation.
The members of the Compensation Committee of the Board of Directors are
Dr. Thompson and Mr. Donovan, neither of whom is, or was formerly, an officer or
employee of the Company or any of its subsidiaries, nor has or has had any other
significant relationship with the Company. No executive officer of the Company
served in the last fiscal year as a director or member of the compensation
committee of another entity, one of whose executive officers served as a
director or on the Compensation Committee of the Company.
Compensation Committee Report on Executive Compensation.
The Compensation Committee (the "Committee") of the Board of Directors
furnished the following report with respect to compensation paid to the
executive officers of the Company in 1998:
Under the By-laws of the Company, the Committee, which is required to be
made up of outside independent directors, determines the general compensation
policies of the Company, determines the compensation to be paid to the executive
officers and other employees of the Company and administers the Company's Stock
Appreciation Plan and 1997 Stock Incentive Plan.
As disclosed under the heading "Executive Compensation - Employment and
Change of Control Agreements," each of the Company's executive officers has an
employment agreement with the Company that may not be terminated prior to
December 31, 2001 and that provides among other things, that the Board of
Directors has only the authority to increase, and not decrease, each executive
officer's base salary as compared to the amount paid during the immediately
preceding year. The decision by the Committee in December 1998 to extend the
contracts with Messrs. Bossier, Kitchen and Dupont and to enter into Employment
Agreements with the other executive officers recognized such persons'
significant contributions to the improvement in the Company's financial position
and performance during 1998, evidenced by the Company's expansion into the
commercial shipbuilding business, continued strong earnings and the substantial
increase in shareholder value during 1998. The Committee also believes that the
extension of the Employment Agreements will assure that the Company will
continue to benefit from this management group's experience in order to meet
future challenges and opportunities in the shipbuilding industry.
<PAGE>
Compensation paid to the executive officers during 1998 essentially
consisted of five components, annual salary, a lump sum payment of 2.0% of
salary made to all employees, a performance-based cash bonus payable pursuant to
a Management Incentive Plan adopted by the Committee in early 1995 in which the
executive officers participate, a performance-based cash bonus payable pursuant
to an Executive Officer Incentive Plan adopted by the Committee and effective
January 1, 1998, and stock option grants. The performance-based bonuses paid to
the executive officers were calculated as a percentage of base salary in
accordance with a formula established by the Committee at the beginning of 1998.
The formula for 1998 for the Management Incentive Plan was based on the Company
achieving certain targets with respect to the following criteria (in order of
weight given by the Committee): operating profit less interest charges, major
contract profit estimates at completion, direct man hour estimates at
completion, and operating costs incurred in completing the major contracts. The
formula called for the bonus to be earned by the executive officers in
increments of 1% of their base salary based on their degree of success in
achieving these goals. It was anticipated that if all of the targets established
at the beginning of 1998 were achieved that the bonuses payable to the executive
officers would have been 25% of their respective base salaries. Application of
the formula resulted in a bonus paid of 19.78% of their respective base salaries
related to the Management Incentive Plan. The formula for 1998 for the Executive
Officer Incentive Plan was based on the achievement of both individual and
Company goals. The individual goals for each of the Corporate Vice Presidents
are based upon goals recommended by the Chief Executive Officer and approved by
the Committee. The individual performance portion of the Chief Executive
Officer's bonus shall be based upon the average percentage achieved by each of
the Corporate Vice Presidents for their respective executive officer incentives.
The Company perfromance goals were based upon the Company achieving certain
targets related to the Company's stock price and earnings per share. It was
anticipated that if all of the targets established at the beginning of 1998 were
achieved that the bonuses payable to the executive officers would have been 25%
of their respective base salaries. At the end of 1998, application of the
formula resulted in each executive officer earning approximately 100% of the
bonus available under the Executive Officer Incentive Plan. For future years,
the Committee may establish different performance goals, criteria and formulas
for calculation of each of the bonuses.
At the Company's 1997 annual meeting, the shareholders overwhelmingly
approved a new stock incentive plan under which stock options and various other
stock based incentives may be granted to key personnel. In 1998, the Committee
granted stock options to each of the executive officers, reflecting the
Committee's goal of strengthening the relationship between executive
compensation and increases in the market price of the Common Stock, thereby
better aligning the executive officers' financial interests with those of the
Company's shareholders. The size of the option grant to each officer was tied to
salary level, with the intention being to create greater opportunities for stock
ownership for those officers with greater responsibilities and duties. The
<PAGE>
Committee also considered information furnished by its consultants regarding
stock option practices among comparable companies and overall Company
performance.
Under Section 162(m) of the Internal Revenue Code, publicly held
companies may be prohibited from deducting as compensation expense for federal
income tax purposes total compensation paid in a single year to certain
executive officers that is in excess of $1 million. Although Mr. Bossier's 1998
compensation exceeded the $1 million limit, he elected to defer a portion of
this compensation. As a result, the Company was not prohibited from deducting
any of Mr. Bossier's compensation for federal income tax purposes. No other
executive officer was paid compensation in 1998 that reached the $1 million
threshold. Compensation that qualifies as "performance-based" compensation under
Section 162(m) is excluded from the $1 million limit. The stock options granted
to executive officers have been structured to be "performance-based," such that
any gains realized upon the exercise of such options will not be counted toward
the $1 million limit. When making its future compensation decisions, the
Compensation Committee intends to consider the effects of Section 162(m) on the
Company.
Hugh A. Thompson Francis R. Donovan
<PAGE>
Performance Graph
The graph and corresponding table below compare the cumulative total
shareholder return on the Company's Common Stock from December 31, 1993 to
December 31, 1998 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, 1993
at the closing price on that date and reinvestment of dividends. Through
December 31, 1996, the peer group index consisted of General Dynamics Corp.,
Litton Industries, Inc., McDermott International Inc., Tenneco Inc., and Trinity
Industries Inc., and the returns of each issuer were weighted according to its
stock market capitalization at the beginning of each period for which a return
is indicated. For 1997 and 1998, Halter Marine Group, Inc. and Newport News
Shipbuilding Inc. have been added as they represent the newly created
shipbuilding operations which have been spun off by Trinity Industries Inc. and
Tenneco, Inc. respectively.
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
Cumulative Total Shareholder Return
December 31,
Index 1993 1994 1995 1996 1997 1998
- ----- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
The Company 100.00 105.08 196.61 291.53 402.54 393.22
Peer Group 100.00 86.99 104.85 116.80 136.87 139.77
NASDAQ 100.00 104.99 136.18 169.23 207.00 291.96
</TABLE>
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management.
See Item 10. Directors and Executive Officers of the Registrant for
information on security ownership of management.
PRINCIPAL SHAREHOLDERS
The following persons are, to the knowledge of the Company, the only
persons that beneficially owned, as of March 31, 1999, more than five percent of
the Common Stock, calculated in accordance with Rule 13d-3 under the Exchange
Act. 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 1,685,836(1) 12.7%
R. Dean Church and Rodney J.
Duhon, Jr.,
as Trustees of the Avondale
Employee Stock Ownership Trust
P. O. Box 50280
New Orleans, Louisiana 70150
FMR Corporation 1,276,552(2) 9.6%
82 Devonshire Streeet
Boston, Massachusetts 02109
Perry Corporation 993,300(3) 7.5%
599 Lexington Avenue 36th Floor
New York, New York 10022
Boston Partners Asset Management L. P. 980,100(4) 7.4%
One Financial Center 43rd Floor
Boston, Massachusetts 02111
</TABLE>
<PAGE>
- ------------
(1) The right to vote shares allocated to an ESOP participant's account is
passed through to the participant. There are currently no unallocated
shares other than a nominal number of shares that have been forfeited by
participants since January 1, 1999. Voting rights of unallocated shares
are exercised by the ESOP Trustees at the direction of the ESOP
Administrative Committee, the members of which are the three 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.
(2) Based solely upon information contained in Schedule 13G filed on February
11, 1999 by FMR Corporation. FMR Corporation shares dispositive power with
respect to all of the shares reported.
(3) Based solely upon information contained in Schedule 13G filed on March 1,
1999 by Perry Corporation. Perry Corporation has sole dispositive power
with respect to all of the shares reported
(4) Based solely upon information contained in Schedule 13G filed on February
16, 1999 by Boston Partners Asset Management, L. P. Boston Partners Asset
Management, L. P. shares dispositive power with respect to all of the
shares reported.
Item 13. Certain Relationships and Related 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 one of the partners, was paid approximately $937,250 in 1998 by the
Company for legal services rendered.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange
Act of 1934, the Registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, on April 30, 1999.
AVONDALE INDUSTRIES, INC.
By: /s/ ALBERT L. BOSSIER, JR.
--------------------------
Albert L. Bossier, Jr.
Chairman of the Board,
President and Chief
Executive Officer
