TODD SHIPYARDS CORPORATION
1801 16th Avenue Southwest
Seattle, Washington 98134
- - -----------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
September 18, 1998
- - ---------------------------
GENERAL INFORMATION
This proxy statement and the accompanying proxy card or voting
instruction card (as the case may be) are being furnished in
connection with the solicitation of proxies by and on behalf of
the Board of Directors (the "Board of Directors" or the "Board")
of Todd Shipyards Corporation, a Delaware corporation ("Todd" or
the "Company"), to be used at the 1998 Annual Meeting of
Stockholders of the Company to be held on Friday, September 18,
1998 at 9:00 a.m. local time, in the Meisnest Room (3rd Floor) of
the Washington Athletic Club, 1325 Sixth Avenue, Seattle,
Washington, and at any adjournment or postponement thereof (the
"Meeting"). This proxy statement and the accompanying proxy card
or voting instruction card are first being mailed to the holders
of the Company's common stock, $.01 par value per share (the
"Common Stock"), on or about July 28, 1998.
Stockholders of the Company represented at the meeting in person
or by proxy will consider and vote upon (i) the election of seven
directors to serve until the 1999 Annual Meeting of Stockholders
of the Company and until their successors are duly elected and
qualified, (ii) a proposal to ratify the appointment of Ernst &
Young LLP as independent public accountants, and (iii) such other
business as may properly come before the Meeting. The Company is
not aware of any other business to be presented for consideration
at the Meeting.
______________________________________________
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Meeting, stockholders will elect seven directors, each of
whom will serve until the next Annual Meeting of Stockholders or
until his respective successor shall have been elected and
qualified or until his earlier resignation or removal. The
shares represented by proxy will be voted in favor of the
election of the persons named below unless authorization to do so
is withheld in the proxy. In the event that any of the nominees
should be unavailable to serve as a Director, which is not
presently anticipated, it is the intention of the persons named
in the proxy card to select and cast their votes for the election
of such other person or persons as the Board of Directors may
designate.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE ELECTION OF THE NOMINEES IDENTIFIED BELOW.
______________________________________________
Information Concerning the Nominees
The following sets forth the name of each Nominee for election to
the Board of Directors, his age, his principal occupation for at
least the past five years and the period during which he has
served as a Director of the Company. All Nominees except Stephen
G. Welch are currently Directors. Each Nominee was nominated by
the Board of Directors for election as Director.
Brent D. Baird (Age 59) - Director since 1992
Since January 1992 to the present, Mr. Baird has been a private
investor. Mr. Baird was a general partner with Trubee, Collins &
Co., a member firm of the New York Stock Exchange, from April
1970 to December 1983. From January 1984 through December 1991,
Mr. Baird was a limited partner with Trubee, Collins & Co. Mr.
Baird serves as a member of the Board of Directors of First
Empire State Corporation, Oglebay Norton Company, First Carolina
Investors, Inc., Merchant's Group, Inc., Exolon-ESK, Inc., and
Barrister Information Systems Corporation.
Steven A. Clifford (Age 55) - Director since 1993
Since 1992, Mr. Clifford has served as Chairman and CEO of
National Mobile Television, Inc. From 1979-1992 he served as
President and CEO (1987-1992) of King Broadcasting Company, Inc.
and as Vice President-Finance (1979-1987). Mr. Clifford serves
on the Board of Directors of U.S. Bank, and Harbor Properties
Inc.
Patrick W.E. Hodgson (Age 58) - Director since 1992, Chairman
since 1993
Mr. Hodgson has served as President of Cinnamon Investments, Ltd.
(real estate and other investments) since 1981. From 1964 to 1989
he was also President of London Machinery Co. Ltd., a
manufacturer of concrete and road machinery. Mr. Hodgson serves
as a member of the Board of Directors of First Empire State
Corporation, Exolon-ESK, Inc., First Carolina Investors, Inc. and
Scott's Restaurants, Inc.
Joseph D. Lehrer (Age 49) - Director since 1992
Mr. Lehrer has been a stockholder and officer of Greensfelder,
Hemker & Gale, P.C. and a partner of its previous partnership
(law firm) since 1980, and presently serves as its President. He
has specialized in a corporate finance and mergers and
acquisition practice involving public and private corporations.
Mr. Lehrer serves as a Director or advisory board member of a
number of privately-held corporations.
Philip N. Robinson (Age 61) - Director since 1992
Since May 1992, Mr. Robinson has been Vice President of Van
Kasper & Company (private brokerage). From 1981 to 1987 and from
1988 to May 1992 Mr. Robinson was a Senior Vice President with
Seidler Amdec Securities. Mr. Robinson was a Vice-President with
Froley Revy & Co. from 1987 to 1988.
John D. Weil (Age 57) - Director since 1993
Since 1973, Mr. Weil has been the President of Clayton Management
Co., a private investment management company. Mr. Weil is a
member of the board of directors of PICO, Inc., Cliffs Drilling
Company, CleveTrust Realty Investors, Oglebay Norton Company,
Allied Healthcare Products, Inc., Baldwin & Lyons, Inc., and
Southern Investors Services, Inc.
Stephen G. Welch (age 41) - Officer since 1994; Nominee to Board
of Directors
Mr. Welch joined the Company in March 1994 as Vice President of
the Company and Chief Operating Officer of TSI Management, Inc.,
a wholly owned subsidiary of the Company. Mr. Welch was elected
Chief Executive Officer of Elettra Broadcasting, Inc., another
wholly owned subsidiary of the Company in May 1995. Mr. Welch
was appointed Acting Chief Financial Officer in March 1995 and
served in that capacity until July 1995. Mr. Welch was again
appointed Acting Chief Financial Officer and Treasurer and served
in that capacity until his appointment to Chief Financial Officer
and Treasurer in June 1997. In September 1997, Mr. Welch was
elected to the positions of Chief Executive Officer and President
of the Company, and Chairman and Chief Executive Officer of Todd
Pacific Shipyards Corporation, the Company's wholly owned
subsidiary ("Todd Pacific"). Mr. Welch was also President of San
Francisco Radio, Inc. (from 1992 to 1997) and was President of
Portland Radio, Inc. (during 1992). Mr. Welch is on the Board of
Directors and the Executive Committee of the Foundation for
Health Care Quality.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors held four (4) meetings during the
Company's 1998 fiscal year. Attendance at Board and committee
meetings averaged 93 percent. Each of the Directors attended at
least 80 percent of the meetings of the Board and the committees
on which he served. The Board of Directors has established the
following standing committees:
Executive Audit
Compensation
Brent D. Baird Brent D. Baird Steven
A. Clifford
Patrick W.E. Hodgson Joseph D. Lehrer John
D. Weil
John D. Weil Philip N. Robinson
Executive Committee. During intervals between meetings of the
Board of Directors, the Executive Committee exercises all the
powers of the Board (except those powers specifically reserved by
Delaware law to the full Board of Directors) in the management
and direction of the Company's business and conduct of the
Company's affairs in all cases in which specific directions have
not been given by the Board. The Executive Committee did not meet
during the Company's 1998 fiscal year.
Audit Committee. The principal responsibilities of the Audit
Committee are to recommend an accounting firm to conduct an
annual audit of the Company's consolidated financial statements
and to review with such firm the plan, scope and results of such
audit, and the fees for the services performed. The Audit
Committee is composed exclusively of directors who are not
salaried employees of the Company and who are, in the opinion of
the Board of Directors, free from any relationship which would
interfere with the exercise of independent judgment as a
Committee member. The Audit Committee held one (1) meeting during
fiscal year 1998.
Compensation Committee. The principal responsibilities of the
Compensation Committee are to establish and periodically review
matters involving executive compensation; to recommend changes in
employee benefit programs; and to provide counsel on key
personnel selection, effective succession planning and
development programs for all corporate officers. The Compensation
Committee held one (1) meeting during the Company's 1998 fiscal
year.
Fees for Board and Committee Service
Directors who are compensated as full-time employees of the
Company receive no additional compensation for service on the
Board of Directors or its committees. Each Director who is not a
full-time employee of the Company is paid $12,000 per annum.
Directors also receive an attendance fee of $1,000 for each
meeting and are reimbursed expenses for attendance at Board and
committee meetings.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), requires directors, certain officers and
greater-than-10% shareholders ("Reporting Persons") of all
publicly-held companies to file certain reports ("Section 16
Reports") with respect to beneficial ownership of such companies'
equity securities.
Based solely on its review of the Section 16 Reports furnished to
the Company by its Reporting Persons and, where applicable, any
written representation by them that no Form 5 was required, all
Section 16(a) filing requirements applicable to the Company's
Reporting Persons during and with respect to fiscal year 1998
have been complied with on a timely basis.
EXECUTIVE OFFICERS
The following is a list of the Executive Officers of the Company:
Patrick W.E. Hodgson Chairman of the Board
Stephen G. Welch Chief Executive Officer and President
Scott H. Wiscomb Chief Financial Officer and Treasurer
Michael G. Marsh Secretary and General Counsel
Roland H. Webb Chief Operating Officer and President
(Todd Pacific Shipyards Corporation)
Biographical information with respect to executive officers who
have been employed by the Company for less than five years is
presented below except as to Stephen G. Welch, who is a Nominee;
his biography appears above.
Scott H. Wiscomb (age 52) - Officer since 1997
Mr. Wiscomb has been in his current position as Chief Financial
Officer of the Company and Todd Pacific since November, 1997.
Prior to joining Todd, he served as a consultant and then as
Chief Financial Officer of Alaska Diesel Electric, Inc., a
Seattle-based manufacturer of marine propulsion engines and
generators. From 1991 to 1995, Mr. Wiscomb was Vice President,
Finance and Administration of ARCO Coal Australia, Inc., a
Brisbane, Australia-based coal mining and marketing division of
Atlantic Richfield Company.
Roland H. Webb (age 47) - Officer since 1994
Mr. Webb has been in his current position as President and Chief
Operating Officer of Todd Pacific since March 1995. Mr. Webb
joined Todd Pacific in August 1993, first as a consultant and
then was elected to the position of Vice President and General
Manager of Todd Pacific. Mr. Webb is a marine engineer and has
been involved in commercial shipyard operations management since
1979. Prior to his arrival at Todd Pacific, he was the Project
Director for Integrated Ferry Constructors of a major contract in
British Columbia, Canada to construct the largest passenger car
ferries in Canada.
EXECUTIVE COMPENSATION
CASH COMPENSATION
The following table sets forth all compensation awarded to,
earned by, or paid to the Company's Chief Executive Officer and
each of the Company's four most highly compensated executive
officers of the Company whose compensation exceeded $100,000:
Long All
Term Other
Compen- Compen-
sation
sation
------- -----
- - -
Stock
Option
Name and Annual Compensation Awards
Principal Position Year Salary Bonus (Shares) Other
=================================================================
Patrick W.E. Hodgson (1)1998 $127,716 $ - - $ 787
Chairman of the 1997 150,000 - - 900
Board of Directors 1996 150,000 - 20,000 675
Todd Shipyards
Michael G. Marsh 1998 110,956 30,000 10,000 110
Secretary and General 1997 103,231 - - 103
Counsel 1996 99,189 - 15,000 91
Todd Shipyards and
Todd Pacific
Roland H. Webb 1998 137,342 14,000 15,000 169
President 1997 133,480 - - 164
Todd Pacific 1996 130,000 - 20,000 162
Stephen G. Welch (2) 1998 180,005 65,070 - 216
Chief Executive Officer 1997 124,250 - - 88
Todd Shipyards and 1996 109,615 - 20,000 76
Todd Pacific
Scott H. Wiscomb (3) 1998 39,298 4,440 30,000 67
Chief Financial
Officer and Treasurer
Todd Shipyards and
Todd Pacific
(1) Mr. Hodgson's salary was reduced at his request from
$150,000 to $100,000
in September 1997 when Mr. Welch was elected Chief Executive
Officer.
(2) Mr. Welch was elected to his present position on September
30, 1997 at an
annual salary of $225,000.
(3) Mr. Wiscomb joined the Company on November 17, 1997 at an
annual
salary of $120,000.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
% of
Potential
Number of Total
Realized Value at
Securities Options Assumed
Annual
Underlying Granted to Exercise Rates
of Stock Price
Options Employees or Base
Appreciation
Granted in Fiscal Price Expiration for
Option Term (2)
Name (#)(1) Year ($/Sh) Date 5%
10%
M. Marsh 10,000 18% $4.375 12/16/02 $12,087
$26,710
R. Webb 15,000 27% 4.375 12/16/02 18,131
40,065
S. Wiscomb 30,000 55% 4.563 11/17/02 37,820
83,573
(1) Each of the indicated options is for a term expiring on the
fifth
anniversary of the date of grant or termination of
employment if
earlier. Each option vests and becomes exercisable as to
one-third of
the shares on the first anniversary of the date of grant, an
additional
one third of the shares on the second anniversary of the
date of grant,
and as to all shares on the third anniversary of the date of
grant.
Under the terms of the options and the Company's Incentive
Stock Plan,
vesting and the right to exercise may be accelerated under
certain
circumstances.
(2) The dollar amounts illustrate value that might be realized
upon the
exercise of options immediately prior to the expiration of
their term,
covering the specific compounded rates of appreciation set
by the
Securities and Exchange Commission (5% and 10%) and are not,
therefore,
intended to be forecasts by the Company of possible future
appreciation,
if any, of the stock price of the Company or the value to be
realized by
optionees.
The following table sets forth certain information regarding
options exercised by the named executives during the fiscal year
ended March 29, 1998, the total gain realized upon exercise, the
number of stock options held at the end of the year, and the
realizable gain of the stock options that are "in-the-money." In-
the-money stock options are stock options with exercise prices
that are below the year-end stock price because the stock value
increased from the grant value.
Total Value of
Number of Unexercised
Shares Value Unexercised In-The-Money
Acquired Realized Options at Options at
on on Fiscal year- Fiscal year-
Exercise Exercise end (#) (1) end($) (1)(2)
(1) Exercisable/ Exercisable/
Unexercisable Unexercisable
P. Hodgson 0 0 120,000 $150,000
0 0
M. Marsh 0 0 20,000 12,500
15,000 13,750
R. Webb 0 0 38,332 37,500
21,668 20,625
S. Welch 0 0 88,332 93,750
6,668 0
S. Wiscomb 0 0 0 0
30,000 35,610
(1) The Company has no granted or outstanding Stock Appreciation
Rights.
(2) The Value of Unexercised In-the-Money Options is based upon
the closing price of the Company's Common Stock on the New York
Stock Exchange on March 29, 1998 of $5.75 per share.
The Company did not have any Restricted Stock Awards or Long-Term
Incentive Payouts either granted or outstanding in fiscal year
1998. As a result of the foregoing, the Company has not included
such information in the above presented tables since disclosure
is not applicable.
TODD SHIPYARDS CORPORATION RETIREMENT SYSTEM.
The Todd Shipyards Corporation Retirement System as amended as of
July 1, 1991 (the "Retirement Plan") is a pension plan originally
established by the Company on August 1, 1940 to provide lifetime
retirement benefits to eligible employees. The Retirement Plan is
a qualified defined benefit plan under ERISA and covers
substantially all employees of the Company who have completed six
months of continuous service (as defined). The Retirement Plan is
administered by a committee (the "Retirement Board") of not less
than three persons appointed by the Board of Directors. On June
30, 1993 the Board of Directors approved an amendment to the
Retirement Plan to freeze membership in the Retirement Plan,
declining membership to any persons hired after July 1, 1993.
Accordingly, Messrs. Hodgson, Welch, Webb and Wiscomb do not
participate in the Retirement System.
A participant is generally eligible for a benefit under the
Retirement Plan on his or her normal retirement date, which is
age 65. The annual normal retirement allowance payable upon
retirement is equal to 1 3/4% of the participant's average final
compensation (as defined) multiplied by his years of credited
service (as defined), reduced by the lesser of (i) 1/2% of the
employee's covered compensation (as defined) for each year of
credited service not in excess of 35 years or (ii) 50% of the
benefit that would be provided if the benefit were limited to the
employer-provided portion based on the employee's covered
compensation and had been determined without regard to the
reduction.
Payment of benefits under the Retirement Plan are normally paid
in an annuity form beginning at age 65, with reductions for
commencement of benefits prior to age 65. Participants
demonstrating good health can elect a lump sum form of payment.
Pension Plan Table
Years of Service
Average Final
_______________________________________________
Compensation 15 20 25 30
35
$100,000 $23,923 $31,897 $39,871 $47,845
$55,819
150,000 37,048 49,397 61,746 74,095
86,444
200,000 50,173 66,897 83,621 100,345
117,069
Compensation covered by the Retirement Plan includes salary and
any cash bonuses as indicated in the Cash Compensation Table
above. The preceding Pension Plan Table indicates the annual
pension benefits payable as a straight life annuity upon
retirement for individuals with specified compensation levels and
years of service. The benefits reflect an estimated deduction
for the offset described above. The estimated credited years of
service for Mr. Marsh is 37 years at age 65.
TODD SHIPYARDS CORPORATION SAVINGS INVESTMENT PLAN.
The Todd Shipyards Corporation Savings Investment Plan as amended
and restated as of April 1, 1989 (the "Savings Plan") is a profit
sharing plan originally established on July 1, 1984 to provide
retirement benefits to participating employees. The Savings Plan
is intended to comply with Section 401(k) of the Internal Revenue
Code of 1986, as amended, and the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations
thereunder.
The Savings Plan covers all full-time employees of the Company
with at least six months of service. Under the Savings Plan, a
participant may elect to make before-tax contributions by
reducing eligible compensation (as defined) to an amount equal to
a percentage of such compensation from 1% up to and including
16%. Prior to March 31, 1989, participants were permitted to
make after-tax contributions to the Savings Plan; however, no
such contributions have been permitted since such date although
such accounts continue to be credited with investment earnings
and losses. Each participant may direct the committee which
administers the Savings Plan to invest his or her before-tax
contributions among the available investment subfunds which
include, at present, a range of domestic and foreign equities and
bond funds.
Employer contributions, if any, to the Savings Plan are made in
amount equal to a specified percentage of the first 6% of each
participant's pre-tax contributions as determined by the Board,
in its sole discretion, for each calendar quarter depending on
the profits and performance of the Company. The Company made no
matching contributions to the Savings Plan during fiscal year
1998.
Each participant has a 100% vested, nonforfeitable right to all
before-tax contributions. Each participant has a vested,
nonforfeitable right to any employer matching contributions made
to his or her account based on a vesting schedule which provides
for 20% of the account to become vested for each of the
participant's first five years of service.
For employees hired on or after March 31, 1989, benefits under
the Savings Plan are payable only in the form of a lump sum
payment payable upon request at any time after termination of
employment. Employees hired before March 31, 1989 will be paid in
the form of annuities unless they elect a lump sum form of
payment.
Employment Arrangements
Stephen G. Welch Employment Agreement. In September 1997, the
Company entered into a three-year employment agreement with
Stephen G. Welch upon his election as Chief Executive Officer and
President of the Company (the "Welch Agreement"). Mr. Welch was
also elected to the serve as Chairman and Chief Executive Officer
of Todd Pacific. The Welch Agreement provides for an annual
salary of $225,000 which may be increased from time to time at
the discretion of the Board of Directors. The Welch Agreement
further provides for a bonus structure of no less than 25% and no
more than 100% of base salary in the event certain goals
established by the Board of Directors are met. Mr. Welch also
participates in the employee benefits programs generally
available to the full-time salaried employees of the Company.
ADDITIONAL INFORMATION WITH RESPECT TO
COMPENSATION INTERLOCKS AND INSIDER PARTICIPATION
IN COMPENSATION DECISIONS
None of the members of the Company's Compensation Committee (i)
were, during the fiscal year, an officer or employee of the
Company; (ii) were formerly an officer or employee of the
Company; or, (iii) had any relationship requiring disclosure by
the Company as Certain Relationships and Related Transactions
other than the Company's engagement of the law firm of
Greensfelder, Hemker & Gale, P.C. of which Mr. Lehrer is a
stockholder and officer.
None of the executive officers of the Company served as a member
of a compensation committee of any entity whose executive
officers or directors served on the Compensation Committee of the
Company.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee (the "Committee") of the Board of
Directors establishes the general compensation policies of the
Company, administers the Company's Incentive Stock Compensation
Plan and establishes the cash compensation of executive officers.
The Compensation Committee is currently composed of two
independent, non-employee directors who have no interlocking
relationships as defined by the SEC.
In September 1997, Stephen G. Welch was elected Chief Executive
Officer and President of the Company. Patrick W.E. Hodgson
retained his position as Chairman of the Board of Directors.
Scott H. Wiscomb joined the Company in November 1997 and was
elected Chief Financial Officer and Treasurer.
During fiscal year 1998, the Committee performed a full review of
the compensation plans of the Chairman, Chief Executive Officer
and other executive officers of the Company. The Chairman's base
compensation was reduced at his request to reflect the assumption
of certain responsibilities by the new Chief Executive Officer.
New compensation plans were approved for the Chief Executive
Officer and other executive officers of the Company as a result
of the compensation review performed. Where possible, direct
comparisons were made to companies in the same or similar
industries in order to establish compensation practices
consistent with the marine industry as a whole. Nationally and
regionally recognized surveys and sources were utilized to
evaluate the cash and incentive compensation practices of the
Company. The Committee believes that the exercise undertaken
resulted in accurate data from which to establish proper market
placement of the Company's executive officers. Results of the
Committee actions were reviewed by an outside independent
consultant whose opinions and conclusions supported the actions
taken.
The Committee believes that executive officer compensation,
including that of the Chief Executive Officer's should be heavily
influenced by Company performance and achievement of goals.
Annually, the Committee establishes each executive officer's cash
and incentive compensation based on the Board of Directors'
evaluation of the Chief Executive Officer, and the evaluation by
the Board of Directors and Chief Executive Officer of the other
executive officers, including in such evaluation their past
performance and relative impact on the success of the Company and
the achievement of its goals.
The Committee has developed a compensation strategy for the
Company's executive officers which provides incentives for (i)
short and long-term strategic management, (ii) enhancement of
stockholder value, (iii) improving the Company's annual and long-
term performance, (iv) individual performance, and (v) other
criteria designed to further align the interests of the Company's
officers with those of its stockholders. The Committee and the
Board of Directors believe that management's ownership of an
equity interest in the Company is an incentive in building
shareholder value and aligning the long term interests of
management and shareholders. During fiscal year 1998, the Board
of Directors granted stock options to Mr. Wiscomb as part of his
compensation as the new Chief Financial Officer and granted
additional stock options to Messrs. Webb and Marsh.
Steven A. Clifford
John D. Weil
PERFORMANCE GRAPH
The following graph compares the Company's Common Stock
performance (Company-Index) to that of the Dow Jones Industrial
Average (DJIA-Index) and the Dow Jones Transportation Equipment
Average (DJTE-Index). The Dow Jones Industrial Average and the
Dow Jones Transportation Equipment Average assume the
reinvestment of dividends. No such assumption was used in
computing the Company Index as the Company has not paid any
dividends for the last five years and therefore the values
presented represent only the stock prices.
(Graph deleted in version of Proxy filed with EDGAR.)
The following table outlines the points used in the performance
graph. Company = Todd Shipyards Corporation; DJTE = Dow Jones
Industrial Average-Transportation Equipment; DOW = Dow Jones
Industrial Average.
Dates Company Index DJTE Index DOW Index
- - -------------- ---------- ---------- -------------
March 28, 1993 100.00 100.00 100.00
April 3, 1994 83.33 117.56 103.06
April 2, 1995 107.14 101.49 117.13
March 31, 1996 140.48 109.53 154.55
March 30, 1997 107.14 131.47 188.50
March 29, 1998 109.52 233.70 272.21
The information presented in the performance graph indicates that
$100 invested in the Company's Common Stock on March 28, 1993
would be worth $109.52 on March 29, 1998 which represents a
compounded rate of return of 1.84% The same amount
hypothetically invested in the Dow Jones Transportation Equipment
and Dow Jones Industrial Averages would be worth $233.70 or
$272.21, respectively, which represent a compounded rate of
return of 18.5% and 22.2%, respectively.
______________________________________________
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF THE INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, after consideration of the recommendation
of the Audit Committee, appointed Ernst & Young LLP to serve as
independent public accountants for the fiscal year ending March
28, 1999 and at the Meeting, the Board will recommend that
stockholders ratify such appointment. Representatives of Ernst &
Young LLP are expected to be present at the Meeting with the
opportunity to make a statement if they so desire and be
available at that time to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP
AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE FISCAL YEAR 1999
______________________________________________
PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to shares
of the Common Stock which are held by (i) persons known to the
Company to be the beneficial owners of more than 5% of said
stock, (ii) each current Director, (iii) each Nominee, (iv) all
current executive officers and Directors as a group, and (v) all
Nominees as a group. For purposes of this proxy statement,
beneficial ownership of securities is defined in accordance with
the rules of the SEC and more generally as the power to vote or
dispose of securities regardless of any economic interest
therein. Unless otherwise indicated, the stockholders have sole
voting and investment power with respect to the shares indicated.
All information set forth on the following table is as of March
29, 1998, except as otherwise noted, and is taken from or based
upon ownership filings made by such persons with the SEC or upon
information provided by such persons to the Company.
Amount and Nature
Name of of Beneficial Percent of
Beneficial Owner Ownership (1) Class (2)
- - ------------------------------ ------------------ ------------
Brent D. Baird 1,638,900(3) 15.67%
1350 One M&T Plaza
Buffalo, NY 14203
Steven A. Clifford 8,000 ---
Patrick W.E. Hodgson 165,000(4) 1.63%
Joseph D. Lehrer 2,000 ---
Philip N. Robinson 115,500(5) 1.17%
John D. Weil 1,020,600(6) 10.30%
200 North Broadway, Ste. 825
St. Louis, MO 63102-2573
Peter Cundill & Associates 676,100 6.82%
c/o John P. Walsh, Esq.
101 South Hanley Road, Suite 1600
St. Louis, MO 63105
All Current Directors, Nominees, 3,261,489(7) 29.60%
and Executive Officers as a Group
(10 persons)
All Nominees as a Group (7 persons) 2,935,302(8) 28.35%
(1) All beneficial ownership is sole and direct unless otherwise
noted.
(2) No percent of class is given for holdings less than one
percent of the outstanding Common Stock.
(3) Brent Baird owns directly 50,000 shares; Mr. Baird also holds
indirectly 40,000 shares in a personal holding company, 15,000
shares in a retirement fund, 5,000 shares as trustee for Jane D.
Baird, and 20,000 held by his spouse. The figure in the table
also includes shares held by persons and organizations who may be
deemed to be Mr. Baird's associates, as defined in Rule 14a-1(a)
under the Securities Exchange Act of 1934, as amended. Mr. Baird
may be deemed to have shared voting power and/or dispositive
power over such shares. However, Mr. Baird disclaims shared
voting power, shared dispositive power and/or beneficial
ownership of all such shares.
(4) Includes 45,000 shares directly beneficially owned by
Cinnamon Investments Limited and options for 120,000 shares
granted to Mr. Hodgson and currently exercisable. Mr. Hodgson
owns 100% of Cinnamon Investments Limited and has sole voting and
investment control over such shares.
(5) Philip N. Robinson owns directly 8,500 shares. The figure in
the table includes shares held by persons and organizations who
may be deemed to be Mr. Robinson's associates, as defined in Rule
14a-1(a) under the Securities Exchange Act of 1934, as amended.
Individual members and organizations in the Robinson Family
beneficially own shares of stock as follows: Robinson Investment,
a general partnership of Mr. Robinson's four children, directly
beneficially owns 95,000 shares; Mr. Robinson's son Todd Robinson
directly beneficially owns 12,000 shares. Mr. Robinson may be
deemed to share voting and investment power over all such shares,
and therefore may be deemed to have beneficial ownership of an
aggregate of 107,000 shares; Mr. Robinson disclaims beneficial
ownership of all such shares.
(6) John D. Weil may be deemed to have sole voting and
dispositive power with respect to 988,600 shares which include
976,600 shares held by a family partnership of which Clayton
Management Co. is the general partner. Mr. Weil is the President
and sole shareholder of Clayton Management Co. The remaining
32,000 shares represent shares held by persons and organizations
who may be deemed to be Mr. Weil's associates, as defined in Rule
14a-1(a) under the Securities Exchange Act of 1934, as amended,
and Mr. Weil may be deemed to have indirect shared beneficial
ownership with respect to such shares.
(7) Includes an aggregate of 285,000 shares subject to options
exercisable at June 20, 1998 (or becoming exercisable within 60
days thereafter) and an aggregate of 15,491 shares held through
the Savings Plan. Does not include 172,000 shares of Common
Stock held by the Retirement System, of which Mr. Hodgson is a co-
trustee. All four co-trustees participate equally in voting
securities, including the Common Stock, held by the Retirement
System. Mr. Hodgson disclaims beneficial ownership of the
172,000 shares held by the Retirement System.
(8) Includes an aggregate of 215,000 shares subject to options
exercisable at June 20, 1998 (or becoming exercisable within 60
days thereafter) and an aggregate of 5,803 shares held through
the Savings Plan.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The Company has retained the law firm of Greensfelder, Hemker &
Gale, P.C., of which Mr. Lehrer is a stockholder and officer,
relating to various corporate issues.
Messrs. Hodgson and Baird are members of the Board of Directors
of First Empire State Corporation whose wholly owned subsidiary,
M&T Bank, serves as the Company's principal depository. The
Company pays to M&T Bank usual and customary fees for its banking
services.
Mr. Robinson is Vice President of Van Kasper & Company (private
brokerage) who has served as broker in certain purchases by the
Company of its Common Shares on the open market. For its
services, Van Kasper & Company received the usual and customary
commissions for like or similar transactions.
VOTING AND SOLICITATION OF PROXIES
Only holders of record of the Common Stock at the close of
business on July 20, 1998 (the "Record Date") will be entitled to
notice of and to vote at the Meeting. As of the date of filing
this proxy statement, there were 9,910,180 outstanding shares of
Common Stock.
Each stockholder is entitled to one vote for each share held of
record on that date on all matters which may come before the
Meeting. The presence, in person or by proxy, of the holders of
a majority of the shares of Common Stock entitled to vote at the
Meeting is necessary to constitute a quorum for the conduct of
business at the Meeting. At the Meeting, Directors of the
Company will be elected by a plurality of the votes of the shares
present in person or represented by proxy and entitled to vote on
the election of Directors. Thus, the candidates, up to the
number of directors to be elected, receiving the highest number
of votes will be elected. The election of the nominees for
Director and the ratification of the appointment of independent
public accountants will require the affirmative vote of the
holders of a majority of the Common Stock present at the meeting
in person or represented by proxy and entitled to vote thereon.
Any proxy given pursuant to this solicitation is revocable by the
communication of such revocation in writing to the Secretary of
the Company at any time prior to the exercise thereof, and any
person executing a proxy who attends the Meeting may vote in
person by ballot instead of by proxy, thereby revoking any
previously executed proxy. All shares represented by properly
executed proxies will, unless such proxies have been previously
revoked, be voted at the Meeting in accordance with the
directions on the proxies. If no direction is indicated, the
shares will be voted in favor of the nominees for the Board of
Directors listed in this proxy statement (Proposal No. 1), and in
favor of the ratification of the appointment of Ernst & Young LLP
as independent public accountants (Proposal No. 2). The persons
named in the proxies will have discretionary authority to vote
all proxies with respect to additional matters that are properly
presented for action at the Meeting.
The Company will bear the entire cost of preparing, assembling,
printing and mailing this proxy statement and the enclosed form
of proxy or voting instruction form (as the case may be), and of
soliciting proxies. The Company will request banks and brokers
to solicit their customers who beneficially own shares listed of
record in names of nominees, and will reimburse those banks and
brokers for their reasonable out-of-pocket expenses in connection
with such solicitation. The initial solicitation of proxies by
mail may be supplemented by telephone, telegram and in-person
solicitation by Directors, nominees for director, officers and
other regular employees of the Company, but no additional
compensation will be paid to such individuals.
The Company has retained W.F. Doring and Company to solicit
proxies from individuals, brokers, bank nominees and other
institutional holders. W.F. Doring and Company will be paid fees
of approximately $2,000, and will be reimbursed for their
reasonable expenses in connection with this solicitation.
Except as described in this proxy statement, to the best of the
Company's knowledge, no person who has been a Director or
executive officer of the Company since the beginning of its last
fiscal year, no Nominee, nor any associate of the foregoing, has
any substantial interest, direct or indirect, by security
holdings or otherwise, in any matter to be acted upon, other than
elections to office.
Individuals, brokers, banks and other institutional holders
should direct questions concerning this solicitation or the
procedure to be followed to execute and deliver a proxy to W.F.
Doring and Company at (201) 420-6262.
STOCKHOLDER NOMINATIONS
Nominations of persons for election to the Board of Directors of
the Company may be made at a meeting of stockholders by any
stockholder of the Company entitled to vote for the election of
Directors at such meeting who complies with the following
procedures. Such nominations made by a stockholder shall be made
pursuant to a written notice received by the Secretary of the
Company not less than 90 days prior to such meeting. Such
stockholder's notice to the Secretary must set forth (a) the
name, age and address, as they appear on the Company's books, of
the stockholder who intends to make the nomination, (b) the name,
age, occupation, business and residence addresses, if known, and
the principal occupation of each person whom the stockholder
intends to nominate, (c) a representation that the stockholder is
a holder of record of the Company's stock entitled to vote at the
meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the
notice, (d) a description of all arrangements and understandings
between the stockholder and each person the stockholder intends
to nominate and each other person or persons if any (naming such
person or persons and stating the beneficial ownership of
securities of the Company or each such person), (e) such
additional information with respect to each nominee proposed by
the stockholder as would have been required to be included in a
proxy statement pursuant to the then effective proxy rules of the
SEC had each such proposed nominee been nominated by the Board of
Directors of the Company, and (f) a consent to be nominated and
to serve as a director, if elected, signed by each such proposed
nominee.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Stockholders desiring to exercise their rights under the SEC's
proxy rules to submit proposals for consideration by the
stockholders at the 1999 Annual Meeting are advised that their
proposals must be received by the Company no later than March 27,
1999 in order to be eligible for inclusion in the Company's proxy
statement and form of proxy relating to that meeting.
ANNUAL REPORT TO STOCKHOLDERS
The 1998 Annual Report of the Company, which includes financial
statements for the fiscal periods ended March 29, 1998 was mailed
to the stockholders on or about June 26, 1998. The Annual Report
is not to be considered part of the soliciting material.
OTHER MATTERS
The Board of Directors is not aware of any business to be
presented at the Meeting except the matters set forth in the
Notice of Annual Meeting and described in this proxy statement.
If any other matters properly come before the Meeting, the
persons designated as agents in the enclosed form of proxy will
vote on such matters in accordance with their best judgment.
COPIES OF THE COMPANY'S REPORT ON FORM 10-K TO THE SEC CAN BE
OBTAINED WITHOUT CHARGE BY STOCKHOLDERS (INCLUDING BENEFICIAL
OWNERS OF THE COMPANY'S COMMON STOCK).
SHAREHOLDER RELATIONS DEPARTMENT
TODD SHIPYARDS CORPORATION
1801-16TH AVENUE SW
SEATTLE, WASHINGTON 98134
Michael G. Marsh
Secretary and General Counsel
July 22, 1998
