UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. )

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Kirby Corporation

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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(KIRBY CORP LOGO)KIRBY CORPORATION

LOGO
  KIRBY CORPORATION

Notice of 20102013

Annual Meeting of Stockholders

and

Proxy Statement

Meeting Date: April 27, 201023, 2013

YOUR VOTE IS IMPORTANT

PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN

YOUR PROXY CARD IN THE ENCLOSED ENVELOPE


KIRBY CORPORATION

55 Waugh Drive, Suite 1000

P. O. Box 1745

Houston, Texas77251-1745

March 10, 2010

8, 2013

Dear Fellow Stockholders:

On behalf of the Board of Directors, we cordially invite you to attend the 20102013 Annual Meeting of Stockholders of Kirby Corporation to be held on Tuesday, April 27, 2010,23, 2013, at 10:00 a.m. (CDT). The meeting will be held at the Four Seasons Hotel, 1300 Lamar Street,55 Waugh Drive, 9th Floor, Houston, Texas 77010.77007. We look forward to personally greeting those stockholders who will be able to attend the meeting.

This booklet contains the notice of the Annual Meeting and the Proxy Statement, which contains information about the formal items of businessproposals to be conductedvoted on at the meeting, Kirby’s Board of Directors and its committees and certain executive officers. This year you are being asked to elect three Class III directors, reapprove the material terms of the performance objectives under Kirby’s 2005 Stock and Incentive Plan and ratify the Audit Committee’s selection of KPMG LLP as Kirby’s independent registered public accounting firm for 2010.

2013 and cast an advisory vote on executive compensation.

In addition to the formal items of businessproposals to be brought before the Annual Meeting, there will be a report on our Company’s operations, followed by a question and answer period.

Your vote is important. Please ensure that your shares will be represented at the meeting by completing, signing and returning your proxy card in the envelope provided whether or not you plan to attend personally.

Thank you for your continued support and interest in Kirby Corporation.

Sincerely,
-s- Berdon Lawrence
C. Berdon Lawrence
Chairman of the Board
-s- Joseph H. Pyne
Joseph H. Pyne
President and Chief Executive Officer
Sincerely,
LOGO
JOSEPH H. PYNE

Chairman of the Board and

Chief Executive Officer


KIRBY CORPORATION

55 Waugh Drive, Suite 1000

P. O. Box 1745

Houston, Texas77251-1745

NOTICE OF 20102013 ANNUAL MEETING OF STOCKHOLDERS

  Date:  Tuesday, April 27, 201023, 2013
  Time:  10:00 a.m. CDT
  Place:  Four Seasons Hotel
1300 Lamar Street
55 Waugh Drive
9th Floor
Houston, Texas 7701077007
Items of business

Proposals to be voted on at the Kirby Corporation 20102013 Annual Meeting of Stockholders are as follows:

1.  Election of three Class III directors;

2. Reapproval of the material terms of the performance objectives under Kirby’s 2005 Stock and Incentive Plan;

3.  Ratification of the Audit Committee’s selection of KPMG LLP as Kirby’s independent registered public accounting firm for 2010;2013;

3.  Advisory vote on the approval of the compensation of Kirby’s named executive officers; and

4.  Consideration of any other business that properly comes before the meeting.

You have the right to receive this notice and vote at the Annual Meeting if you were a stockholder of record at the close of business on March 1, 2010.2013. Please remember that your shares cannot be voted unless you sign and return the enclosed proxy card, vote in person at the Annual Meeting, or make other arrangements to vote your shares.

We have enclosed a copy of Kirby Corporation’s 20092012 Annual Report to stockholders with this notice and Proxy Statement.

For the Board of Directors,
THOMAS G. ADLER

Secretary

For the Board of Directors,
Thomas G. Adler
Secretary

March 10, 2010

8, 2013


KIRBY CORPORATION

PROXY STATEMENT

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation of proxies on behalf of the Board of Directors (the “Board”) of Kirby Corporation (the “Company”) to be voted at the Annual Meeting of Stockholders to be held at the Four Seasons Hotel, 1300 Lamar Street,55 Waugh Drive, 9th Floor, Houston, Texas, on April 27, 2010,23, 2013, at 10:00 a.m. (CDT).

Whenever we refer in this Proxy Statement to the Annual Meeting, we are also referring to any meeting that results from an adjournment or postponement of the Annual Meeting. The Notice of Annual Meeting, this Proxy Statement, the proxy card and the Company’s Annual Report, which includes the Annual Report onForm 10-K for 2009,2012, are being mailed to stockholders on or about March 17, 2010.

18, 2013.

SOLICITATION OF PROXIES

The Proxy Card

Your shares will be voted as specified on the enclosed proxy card. If a proxy is signed without choices specified, those shares will be voted for the election of the Class III directors named in this Proxy Statement, for the reapproval of the material terms of the performance objectives under the Company’s 2005 Stock and Incentive Plan, for the ratification of the Audit Committee’s selection of KPMG LLP as the Company’s independent registered public accounting firm for 20102013, for the approval on an advisory basis of executive compensation and at the discretion of the proxies on other matters.

You are encouraged to complete, sign and return the proxy card even if you expect to attend the meeting. If you sign a proxy card and deliver it to us, but then want to change your vote, you may revoke your proxy at any time prior to the Annual Meeting by sending us a written revocation or a new proxy, or by attending the Annual Meeting and voting your shares in person.

Cost of Soliciting Proxies

The cost of soliciting proxies will be paid by the Company. The Company has retained Georgeson Inc. to solicit proxies at an estimated cost of $5,500,$6,000, plusout-of-pocket expenses. Employees of the Company may also solicit proxies, for which the expense would be nominal and borne by the Company. Solicitation may be by mail, facsimile, electronic mail, telephone or personal interview.

VOTING

Stockholders Entitled to Vote

Stockholders of record at the close of business on March 1, 20102013 will be entitled to notice of, and to vote at, the Annual Meeting. As of the close of business on March 1, 2010,2013, the Company had 54,009,85756,719,387 outstanding shares of common stock. Each share of common stock is entitled to one vote on each matter to come before the meeting.

Quorum and Votes Necessary to Adopt Proposals

In order to transact business at the Annual Meeting, a quorum consisting of a majority of all outstanding shares entitled to vote must be present. Abstentions and proxies returned by brokerage firms for which no voting instructions have been received from their principalsbeneficial owners will be counted for the purpose of determining

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whether a quorum is present. Once a share is represented for any purpose at the Annual Meeting, it will be deemed present for quorum purposes for the entirety of the meeting. A majority of the votes cast (not counting abstentions and broker nonvotes) is required for the election of directors.directors (Proposal 1). A majority of the outstanding shares entitled to vote that are represented at the meeting in person or by proxy is required for the reapproval of the material terms of the performance objectives under the Company’s 2005 Stock and Incentive Plan and for the ratification of the selection


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of KPMG LLP as the Company’s independent registered public accounting firm for 20102013 (Proposal 2). Proposal 3 is a non-binding advisory vote on executive compensation and any othertherefore there is no voting standard for that proposal, since the voting results will be informational only.

Please note that if your shares are held in the name of a brokerage firm on your behalf, your broker may not vote your shares on the election of directors or the matters that may be presented at the meeting.

related to executive compensation without voting instructions from you.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 27, 2010

23, 2013

This Proxy Statement and the Company’s 20092012 Annual Report, which includes the Annual Report onForm 10-K filed with the Securities and Exchange Commission (“SEC”), are available electronically at www.edocumentview.com/kex.

The following proposals will be considered at the meeting:

Item

Proposal 1

  Election of three Class III directors
Item 2Reapproval of the material terms of the performance objectives under the Company’s 2005 Stock and Incentive Plan
Item 3

Proposal 2  

  Ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 20102013

Proposal 3  —

Advisory vote on the approval of the compensation of the Company’s named executive officers

The Board of Directors of the Company unanimously recommends that you vote “FOR” eachthe Board’s nominees for director, “FOR” the selection of the proposals.KPMG LLP as our independent registered public accounting firm for 2013 and “FOR” approval of our executive compensation

.

ELECTION OF DIRECTORS (ITEM(PROPOSAL 1)

The Bylaws of the Company provide that the Board shall consist of not fewer than three nor more than fifteen members and that, within those limits, the number of directors shall be determined by the Board. The Bylaws further provide that the Board shall be divided into three classes, with the classes being as nearly equal in number as possible and with one class being elected each year for a three-year term. The size of the Board is currently set at ten. Three Class III directors are to be elected at the 20102013 Annual Meeting to serve until the Annual Meeting of Stockholders in 2013.

2016.

Each nominee named below is currently serving as a director and each has consented to serve for the new term if elected. If any nominee becomes unable to serve as a director, an event currently not anticipated, the persons named as proxies in the enclosed proxy card intend to vote for a nominee selected by the present Board to fill the vacancy.

In addition to satisfying, individually and collectively, the Company’s Criteria for the Selection of Directors discussed under the “THE BOARD OF DIRECTORS — Governance Committee” below, each of the directors has extensive experience with the Company or in a business similar to one or more of the Company’s principal businesses or the principal businesses of significant customers of the Company. The brief biographies of each of the nominees and continuing directors below includes a summary of the particular experience and qualifications that led the Board to conclude that he should serve as a director.

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Nominees for Election

The Board of Directors of the Company unanimously recommends that you vote “FOR” the election of each of the following nominees for election as a director.

Nominees for Election as Class III directors to serve until the Annual Meeting of Stockholders in 20132016

C. Sean Day  Director since 1996
Greenwich, Connecticut  Age 6063

Mr. Day is Chairman of Teekay Corporation, a foreign flag tank vessel owner and operator. He serves as Chairman of the Governance Committee and is a member of the Compensation Committee. He is also Chairman of Teekay GP L.L.C., the general partner of Teekay LNG Partners L.P., Chairman of Teekay Offshore GP L.L.C., the general partner of Teekay Offshore Partners L.P., Chairman of Teekay Tankers Ltd. and Chairman of Compass Diversified Holdings.

Mr. Day has over 40 years of experience in the marine transportation business, currently serving for the past 15 years as Chairman of one of the largest tanker companies in the world and formerlyfor 10 years before that as chief executive officer of an international bulk shipping


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company. In addition, Mr. Day has been active in the private equity investment business for the last 2528 years, gaining extensive experience in financial management and analysis.

William M. Lamont, Jr.  Director since 1979
Dallas, Texas  Age 6164

Mr. Lamont is a private investor. He serves as Chairman of the Compensation Committee and is a member of the Executive Committee and Governance Committee.

Mr. Lamont and his family have been major stockholders of the Company since its formation and he has been a director of the Company throughout its transformation from a company engaged in the oil and gas and insurance businesses, among others, into the largest inlanddomestic tank barge company in the United States.States, as well as a significant presence in the diesel engine services business. Through his private investment activities, Mr. Lamont also has extensive experience in financial analysis and in financial markets.

C. Berdon LawrenceWilliam M. Waterman  Director since 19992012
Houston, TexasBedford, New York  Age 6759

Mr. Lawrence hasWaterman served as ChairmanPresident and Chief Executive Officer of the Board of the Company since 1999. He was the founder and former President of Hollywood Marine,Penn Maritime Inc. (“Hollywood”Penn”), an inland tank barge company acquired from 1983 through 2012 until the acquisition of Penn by the Company in 1999. Mr. Lawrence serves as Chairmanon December 14, 2012. Penn is a coastwise tank barge operator, transporting primarily refinery feedstocks, asphalt and crude oil along the East Coast and Gulf Coast of the Executive Committee. Mr. LawrenceUnited States. He is also a director of Kinder Morgan Energy Partners, L.P. On October 12, 2009, the Company announced the retirement of Mr. Lawrence asand past Chairman of The American Waterways Operators, the Board ofnational trade association for the Company effective April 27, 2010.

United States barge industry.

Mr. LawrenceWaterman has over 4036 years of experience in the inlandcoastal tank barge business with Penn and predecessor companies, building HollywoodPenn into one of the largest coastal tank barge operators in the United States beforeStates. The Company significantly expanded its mergercoastal marine transportation business with several major acquisitions in 2011 and 2012. Mr. Waterman’s extensive experience in that business and knowledge of its markets and customers are valuable to the Company. Since the merger, he and Mr. Pyne have successfully integrated the two companies into an efficient and safety-conscious operation with the size and flexibility to serve the needs of the largest customers. In addition to Mr. Lawrence’s extensive knowledgeBoard in its oversight of the Company’s operationsexpanding coastwise business and customer base, he has long been active in industry associations that monitor significant legislative and regulatory developments along with other issues critical tocomplement the inland marine transportation industry.

and petrochemical industry experience of other Company directors.

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Directors Continuing in Office

The following persons are directors of the Company who will continue in office.

Continuing Class I directors, serving until the Annual Meeting of Stockholders in 20112014

James R. ClarkRichard J. Alario  Director since 20082011
Fort Worth,Houston, Texas  Age 5958

Mr. Clark served asAlario is Chairman of the Board, President and Chief OperatingExecutive Officer of Baker Hughes IncorporatedKey Energy Services, Inc. (“Baker Hughes”Key Energy”) from 2004 until his retirement, a publicly traded oilfield service company listed on the New York Stock Exchange (“NYSE”). He has served in January 2008. From 2003senior executive positions with Key Energy since 2004. Prior to 2004, hejoining Key Energy, Mr. Alario served as Vice President Marketingof BJ Services Company, an oilfield service company, from 2002 to 2004, and Technology of Baker Hughes, and from 2001 to 2003, he served asfor over 21 years in various capacities, most recently Executive Vice President, of Baker Petrolite Corporation,OSCA, Inc., also an oilfield service company. He currently serves as Vice Chairman, Director and Executive Committee member of the National Ocean Industries Association and serves as a subsidiarymember of Baker Hughes.the American Association of Drilling Engineers and the Petroleum Equipment Suppliers Association. He serves as a member of the GovernanceAudit Committee. Mr. Clark isAlario also served as a director of Teekay Corporation and ENSCO International Incorporated.

During his career at Baker Hughes, Seahawk Drilling, Inc. from 2009 to 2011.

Mr. Clark gainedAlario has over 30 years of experience in the domestic and international oilfield service industry,business, currently serving as Chief Executive Officer with both operating and financial responsibility for one of the principal markets forlargest oilfield service companies in the United States. That experience is valuable to the Board in its oversight of the Company’s diesel engine services business and inwhich serves the areasoilfield services industry as a significant part of its customer base. Mr. Alario also adds a current public company governance, finance, mergers and acquisitions, risk management and compliance for a Fortune 500 company.

Chief Executive Officer to the Board.

David L. Lemmon  Director since 2006
Las Vegas, Nevada  Age 6770

Mr. Lemmon is a private investor. He served as President and Chief Executive Officer of Colonial Pipeline Company, an interstate common carrier of refined liquid petroleum products, from 1997 to 2006. Prior to that, he held management positions with Amoco Corporation and Amoco Pipeline. He serves as a member of the Audit Committee. Mr. Lemmon is also a director of Teekay Offshore GP L.L.C., the general partner of Teekay Offshore Partners L.P., and Deltic Timber Corporation. Mr. Lemmon was a director of Pacific Energy GP L.L.C., the general partner of Pacific Energy Partners L.P., from 2002 to 2006.


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Colonial Pipeline Company is the world’s largest refined liquid petroleum products pipeline and a competing mode of transportation for the Company’s inland tank barge business. Under Mr. Lemmon’s leadership, Colonial placed a strong emphasis on safety and environmental compliance in its operations, which mirrorsreceiving the American Petroleum Institute’s “Most Distinguished Pipeline Award for Safety and Environmental Leadership” for four years in a row from 2002 through 2005. Mr. Lemmon’s accomplishments reinforce the Company’s emphasis on safety and its achievement of one of the best safety records in the inland tank barge industry.

George A. Peterkin, Jr.  Director since 1973
Houston, Texas  Age 8285

Mr. Peterkin is a private investor. He has served as Chairman Emeritus of the Board of the Company since 1999 and served as Chairman of the Board of the Company from 1995 to 1999. He served as President of the Company from 1973 to 1995 and serves as a member of the Audit Committee and Executive Committee.

Mr. Peterkin has served in executive positions in the marine transportation business with the Company and its predecessor companies for over 50 years. During his tenure as President and then Chairman of the Board of the Company, he presided over the Company’s transition from an oil and gas and insurance company with a small

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barge line to the largest inland tank barge company in the United States. Mr. Peterkin’s knowledge of and perspective on the Company and its history, growth and principal businesses are a valuable resource for the Board.

Richard R. Stewart  Director since 2008
Houston, Texas  Age 6063

Mr. Stewart served as President and Chief Executive Officer of GE Aero Energy, a division of GE Energy, and as an officer of General Electric Company, from 1998 until his retirement in December 2006. From 1972 to 1998, Mr. Stewart served in various positions at Stewart & Stevenson Services, Inc., including Group President and member of the Board of Directors. He serves as a member of the Audit Committee. Mr. Stewart is also a director of Eagle Materials Inc. and Lufkin Industries, Inc.

During a35-year business career, Mr. Stewart has been the principal executive officer with both operating and financial responsibility for the diesel engine power and service businesses at Stewart & Stevenson and then at GE Aero Energy. Mr. Stewart’s extensive experience in the diesel engine business is valuable to the Board in its oversight of the Company’s diesel engine services business and complements the predominately marine transportation and petrochemical industry experience of a number of the Company’s other directors.

Continuing Class II directors, serving until the Annual Meeting of Stockholders in 20122015

Bob G. Gower  Director since 1998
Houston, Texas  Age 7275

Mr. Gower is a private investor. He has served as President and Chief Executive OfficerChairman of Carbon Nanotechnologies,the Board of Ensysce Biosciences, Inc., a technology leader in small-diameter carbon nanotubes, until 2007.company developing cancer therapeutics using nanotechnology, since 2008. Mr. Gower serves as Chairman of the Audit Committee, is a member of the Executive Committee and Compensation Committee, and has been chosen by the non-management directors to serve as the presiding director at executive sessions of the non-management directors.

Mr. Gower has 46 years of experience in the chemical business, including 11 years as the Chief Executive Officer of Lyondell Petrochemical Company. The transportation of petrochemicals generates a major portion of the Company’s marine transportation revenues and Mr. Gower’s knowledge of the chemical business is valuable to the Board.

Monte J. Miller  Director since 2006
Durango, Colorado  Age 6669

Mr. Miller is a consultant and private investor. He served as Executive Vice President, Chemicals, of Flint Hills Resources, LP (“Flint Hills”), a company engaged in crude oil refining, transportation and marketing, and the production of petrochemicals, from 2003 to 2006. From 1999 to 2003, he was Senior Vice President of Koch Chemical Company, a predecessor company of Flint Hills. Mr. Miller serves as a member of the Compensation Committee and Governance Committee.

Mr. Miller has 30 years of experience in the petrochemical and refining business. A significant volume of petrochemical products is transported coastwise and on the inland waterways and petrochemicals represent a major portion of the Company’s business, so Mr. Miller’s extensive knowledge about petrochemical and refining companies, which constitute a substantial part of the Company’s customer base, as well as the products they ship and the end users of


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the products, is valuable to the Board. He also has experience in developing and administering incentive compensation programs at companies similar in size to the Company.

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Joseph H. Pyne  Director since 1988
Houston, Texas  Age 6265

Mr. Pyne is the PresidentChairman of the Board and Chief Executive Officer of the Company. He serves as a member of the Executive Committee.

Mr. Pyne has been with the Company for 3235 years, servinghaving served as President of its principal marine transportation subsidiary prior to becoming President and Chief Executive Officer of the Company. In April 2010, he was elected Chairman of the Board, President and Chief Executive Officer of the Company and in April 2011 was elected Chairman of the Board and Chief Executive Officer of the Company. He has primary responsibility for the business and strategic direction of the Company and is an essential link between the Board and the Company’sday-to-day operations. Mr. Pyne has overall knowledge of all aspects of the Company, its operations, customers, financial condition and strategic planning. With the announced retirement of Mr. Lawrence as Chairman of the Board of the Company, Mr. Pyne will beis the only management representative on the Board following the Annual Meeting of Stockholders.

Board.

Except as noted, each of the nominees for director and each of the continuing directors has been engaged in his principal occupation for more than the past five years.

THE BOARD OF DIRECTORS

The Company’s business is managed under the direction of the Board, which is responsible for broad corporate policy and for monitoring the effectiveness of Company management. Members of the Board are kept informed about the Company’s businesses by participating in meetings of the Board and its committees, through operating and financial reports made at Board and committee meetings by Company management, through various reports and documents sent to the directors for their review and by visiting Company facilities.

Director Independence

The New York Stock Exchange (“NYSE”)NYSE listing standards require listed companies to have at least a majority of independent directors. For a director to be considered independent, the Board must determine that the director does not have any direct or indirect material relationship with the Company.

The Board has determined that the following incumbent directorsC. Sean Day, Bob G. Gower, William M. Lamont, Jr., David L. Lemmon, Monte J. Miller, George A. Peterkin, Jr. and Richard R. Stewart have no relationship with the Company except as directors and stockholders and are independent within the meaning of the NYSE corporate governance rules:

James R. ClarkDavid L. Lemmon
C. Sean DayMonte J. Miller
Bob G. GowerGeorge A. Peterkin, Jr.
William M. Lamont, Jr. Richard R. Stewart
rules.

The Board has determined that an indirect relationship between Richard J. Alario and the Company through Key Energy is not material and that Mr. Alario is also independent. Key Energy is a customer of United Holdings LLC (“United Holdings”), a wholly owned subsidiary of the Company that provided diesel engine equipment, parts and service to Key Energy in the ordinary course of business in 2012. The volume of business done between Key Energy and United Holdings during 2012 was $13,152,000, which represents less than 1% of Key Energy’s total revenues for 2012. The business relationship between Key Energy and United Holdings predates both the Company’s acquisition of United Holdings in April 2011 and the election of Mr. Alario to the Board.

The Board has determined that the acquisition of Penn and an affiliated company from Mr. Waterman and members of his family for approximately $175 million in cash and Company stock in December 2012 does not affect his independence since he and his family sold their entire interest in Penn and affiliated companies to the Company and he resigned from all director and officer positions he held with Penn and affiliated companies contemporaneously with the closing of the acquisition by the Company. In connection with the acquisition, Mr. Waterman entered into a three-year noncompetition agreement with the Company that is not in any way contingent on continued service with the Company or any of its subsidiaries. In addition, in 2012, Penn paid the Company $1,253,000 for diesel engine services relating to the repair and maintenance of Penn’s vessels. The Board determined that relationship between Penn and the Company does not affect Mr. Waterman’s independence since Mr. Waterman no longer has any ownership in or position with Penn, which is now a wholly owned subsidiary of the Company.

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Board Committees

The Board has established four standing committees, including the Audit Committee, the Compensation Committee and the Governance Committee, each of which is briefly described below. The fourth committee, the Executive Committee, may exercise all of the power and authority of the Board in the management of the business and affairs of the Company when the Board is not in session, except the power or authority to fill vacancies in the membership of the Board, to amend the Bylaws of the Company and to fill vacancies in the membership of the Executive Committee.

Audit Committee

All of the members of the Audit Committee are independent, as that term is defined in applicable SEC and NYSE rules. In addition, the Board has determined that all of the members of the Audit Committee are “audit committee financial experts,” as that term is defined in SEC rules. The Audit Committee operates under a written


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charter adopted by the Board. A copy of the charter is available on the Company’s web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance.

Principal Functions  Members
Principal FunctionsMembers

• Monitor the Company’s financial reporting, accounting procedures and systems of internal control

  

Bob G. Gower (Chairman)

Richard J. Alario

David L. Lemmon

Richard R. Stewart

• Select the independent auditors for the Company

  George A. Peterkin, Jr.

• Review the Company’s audited annual and unaudited quarterly financial statements with management and the independent auditors

  Richard R. Stewart

• Monitor the independence and performance of the Company’s independent auditors and internal audit function

  

• Monitor the Company’s compliance with legal and regulatory requirements

  

Compensation Committee

All of the members of the Compensation Committee are independent, as that term is defined in NYSE rules. In addition, all of the members of the Committee are “Non-Employee Directors” and “outside directors” as defined in relevant federal securities and tax regulations. The Compensation Committee operates under a written charter adopted by the Board. A copy of the charter is available on the Company’s web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance.

Principal Functions  Members
Principal FunctionsMembers

• Determine the compensation of executive officers of the Company

  

William M. Lamont, Jr. (Chairman)

C. Sean Day

Bob G. Gower

Monte J. Miller

• Administer the Company’s annual incentive bonus program

  C. Sean Day

• Administer the Company’s stock option, restricted stock and incentive plans and grant stock options, restricted stock and performance awards under such plans

  Bob G. Gower
Monte J. Miller

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Governance Committee

All of the members of the Governance Committee are independent, as that term is defined in NYSE rules. The Committee operates under a written charter adopted by the Board. A copy of the charter is available on the Company’s web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance.

Principal Functions  Members
Principal FunctionsMembers

•  Perform the function of a nominating committee in recommending candidates for election to the Board

  

C. Sean Day (Chairman)
James R. Clark

William M. Lamont, Jr.

Monte J. Miller

•  Review all related party transactions

•  Oversee the operation and effectiveness of the Board

  William M. Lamont, Jr.

The Governance Committee will consider director candidates recommended by stockholders. Recommendations may be sent to the Chairman of the Governance Committee, Kirby Corporation, 55 Waugh Drive, Suite 1000, Houston, Texas 77007, accompanied by biographical information for evaluation. The Board of the Company has approved Criteria for the Selection of Directors which the Governance Committee will consider in evaluating director candidates. The criteria address compliance with SEC and NYSE requirements relating to the composition of the Board and its committees, as well as character, integrity, experience, understanding of the Company’s business and willingness to commit sufficient time to the Company’s business. The criteria are available on the Company’s web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance.

In addition to the criteria, the Governance Committee and the Board will consider diversity in business experience, professional expertise, gender and ethnic background in evaluating potential nominees for director. While the Board has in the past sought the most qualified candidates for nomination as directors without regard to gender or ethnic background, in January 2009, theThe Company’s Corporate Governance Guidelines and Governance


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Committee Charter were amended to addinclude provisions concerning the consideration of diversity in business experience, professional skills, gender and ethnic background in selecting nominees for director.

When there is a vacancy on the Board (i.e., in cases other than the nomination of an existing director for reelection), the Board and the Governance Committee have considered candidates identified by executive search firms, candidates recommended by stockholders and candidates recommended by other directors. The Governance Committee will continue to consider candidates from any of those sources when future vacancies occur. The Governance Committee does not evaluate a candidate differently based on whether or not the candidate is recommended by a stockholder.

Attendance at Meetings

It is the Company’s policy that directors are expected to attend Board meetings and meetings of committees on which they serve and are expected to attend the Annual Meeting of Stockholders of the Company. During 2009,2012, the Board met nineeight times, the Audit Committee met eight times, the Compensation Committee met sevensix times and the Governance Committee met five times. Each director attended all of the meetings of the Board and of the committees on which theyhe served. All directors attended the 20092012 Annual Meeting of Stockholders of the Company.

Director Compensation

Directors who are employees of the Company receive no additional compensation for their servicesservice on the Board or Board committees.Board. Compensation of nonemployee directors is determined by the full Board, which may consider recommendations of the Compensation Committee. Past practice has been to review director compensation when the Board believes that an adjustment may be necessary in order to remain competitive with director compensation of comparable companies. Management of the Company periodically collects published survey information on director compensation for purposes of comparison.

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Each nonemployee director receives an annual fee of $24,000, a fee of $1,250 for each Board meeting and a fee of $3,000 for each Committeecommittee meeting attended. A director may elect to receive the annual fee in cash, stock options or restricted stock. The Compensation and Governance Committee Chairmen receive an additional $10,000 retainer per year, the Audit Committee Chairman receives an additional $15,000 retainer per year and the presiding director at executive sessions of the non-management directors receives an additional $5,000 retainer per year. Directors are reimbursed for reasonable expenses incurred in attending meetings.

In addition to the fees provided to the directors described above, the Company has a nonemployee director stock option plan under which nonemployee directors are granted stock options and restricted stock awards. The Company’s 2000 Nonemployee Director Stock Option Plan (the “2000 Director Plan”) provides for the automatic grant to nonemployee directors of stock options for 10,000 shares of common stock on the date of first election as a director and stock options for 6,000 shares and 1,000 shares of restricted stock immediately after each annual meeting of stockholders. The 2000 Plan also provides for discretionary grants of an aggregate of 10,000 shares in the form of stock options or restricted stock. In addition, the 2000 Director Plan provides for the issuance of stock options or restricted stock in lieu of cash for all or part of the annual director fee. A director who elects to receive options in lieu of the annual cash fee will be granted an option for a number of shares equal to (a) the amount of the fee for which the election is made divided by (b) the fair market value per share of the common stock on the date of grant multiplied by (c) 3. A director who elects to receive restricted stock in lieu of the annual cash fee will be issued a number of shares of restricted stock equal to (a) the amount of the fee for which the election is made divided by (b) the fair market value per share of the common stock on the date of grant multiplied by (c) 1.2. The exercise price for all options granted under the 2000 Director Plan is the fair market value per share of the Company’s common stock on the date of grant. The options granted on first election as a director vest immediately. The options granted and restricted stock issued immediately after each annual meeting of stockholders vest six months after the date of grant or issuance. Options granted and restricted stock issued in lieu of cash director fees vest in equal quarterly increments during the year to which they relate. The options generally remain exercisable for ten years after the date of grant.

In 2008, the Board established stock ownership guidelines for officers and directors of the Company. The guidelines were effective January 1, 2009 and nonemployee directors must be in compliance within five years after the adoption of the guidelines or five years after first election as a director, whichever is later, but are expected to accumulate the required number of shares ratably over the applicable five-year period. Under the guidelines,


8


nonemployee directors are required to own common stock of the Company having a value equal to four times the annual cash director fee. The Governance Committee of the Board will monitor compliance with the guidelines and may recommend modifications or exceptions to the Board.

The following table summarizes the cash and equity compensation for nonemployee directors for the year ended December 31, 2009:

2012:

Director Compensation for 20092012

                 
  Fees Earned
          
Name
 or Paid in Cash  Stock Awards(1)(2)  Option Awards(1)(2)  Total 
 
James R. Clark $50,250  $29,772  $80,700  $160,722 
C. Sean Day  57,250   58,740   80,700   196,690 
Bob G. Gower  76,250   29,772   113,424   219,446 
William M. Lamont, Jr.   81,250   29,772   80,700   191,722 
David L. Lemmon  59,250   29,772   80,700   169,722 
Monte J. Miller  32,250   58,740   80,700   171,690 
George A. Peterkin, Jr.   35,250   58,740   80,700   174,690 
Richard R. Stewart  59,250   29,772   80,700   169,722 

Name

  Fees Earned
or Paid in Cash
   Stock Awards(1)(2)   Option Awards(1)(2)   Total 

Richard J. Alario

  $31,000    $62,988    $165,234    $259,222  

C. Sean Day

   53,000     92,028     138,600     283,628  

Bob G. Gower

   72,000     92,028     138,600     302,628  

William M. Lamont, Jr. 

   77,000     62,988     138,600     278,588  

C. Berdon Lawrence(3)

   34,000     62,988     138,600     235,588  

David L. Lemmon

   58,000     62,988     138,600     259,588  

Monte J. Miller

   43,000     92,028     138,600     273,628  

George A. Peterkin, Jr.

   16,000     62,988     165,234     244,222  

Richard R. Stewart

   58,000     62,988     138,600     259,588  

William M. Waterman(4)

             229,896     229,896  

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(1)The amounts included in the “Stock Awards” and “Option Awards” columns represent the grant date fair value related to restricted stock awards and option grants to the directors, computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 8,9, Stock Award Plans, in the Company’s consolidated financial statements included in the Annual Report onForm 10-K for the year ended December 31, 2009.2012.

(2)Each director was granted 1,000 shares of restricted stock on April 28, 200924, 2012 at a value of $29.77$62.99 per share. Each director was granted stock options for 6,000 shares on April 28, 200924, 2012 at an exercise price of $29.60$62.48 per share. Mr. Waterman was granted stock options for 10,000 shares at an exercise price of $61.89 per share on December 31, 2012, the date of his first election as a director. Mr. Day, Mr. MillerGower and Mr. PeterkinMiller were each granted 973461 shares of restricted stock on April 28, 200924, 2012 at a value of $29.77,$62.99, as they elected to receive their annual director fee in the form of restricted stock awards. Mr. Gower wasAlario and Mr. Peterkin were each granted stock options for 2,4331,153 shares on April 28, 200924, 2012 at an exercise price of $29.60$62.48 per share, as hethey elected to receive histheir annual director fee in the form of stock options.

The following table shows the aggregate number of shares of unvested restricted stock and stock options outstanding for each director as of December 31, 2012, as well as the grant date fair value of restricted stock and stock option grants made during 2012:

Name

  Aggregate Shares
of Unvested
Restricted Stock
as of
December 31, 2012
   Aggregate
Stock Options
Outstanding
as of
December 31, 2012
   Grant Date
Fair Value of
Restricted Stock and
Stock Options
Awarded during 2012
 

Richard J. Alario

        17,153    $228,222  

C. Sean Day

   116     24,000     230,628  

Bob G. Gower

   116     20,574     230,628  

William M. Lamont, Jr. 

        60,000     201,588  

David L. Lemmon

        42,000     201,588  

Monte J. Miller

   116     55,264     230,628  

George A. Peterkin, Jr. 

        64,947     228,222  

Richard R. Stewart

        34,000     201,588  

William M. Waterman

        10,000     229,896  

(3)Mr. Lawrence retired from the Board on December 31, 2009, as well as2012.

(4)Mr. Waterman was elected to the grant date fair value of restricted stock and stock option grants made during 2009:Board on December 31, 2012.
             
  Aggregate Shares
  Aggregate
  Grant Date
 
  of Restricted Stock
  Stock Options
  Fair Value of
 
  Outstanding
  Outstanding
  Restricted Stock and
 
  as of
  as of
  Stock Options
 
Name
 December 31, 2009  December 31, 2009  Awarded during 2009 
 
James R. Clark     22,000  $110,472 
C. Sean Day  244   36,000   139,440 
Bob G. Gower     27,731   143,196 
William M. Lamont, Jr.      57,000   110,472 
David L. Lemmon     34,000   110,472 
Monte J. Miller  244   35,988   139,440 
George A. Peterkin, Jr.   244   67,218   139,440 
Richard R. Stewart     22,000   110,472 

Board Leadership Structure

The roles of Chief Executive Officer and Chairman of the Board of the Company have been separated for many years. Since the merger of Hollywood with the Company in 1999, Mr. Lawrence has been Chairman of the Board and Mr. Pyne has been President and Chief Executive Officer of the Company. Following the merger, the Board decided that dual leadership of the Company by Mr. Pyne, who had previously been the Company’s Chief Executive Officer, and Mr. Lawrence, who had previously been Chief Executive Officer of Hollywood, would be the best


9


structure to achieve the successful integration of the two companies and position the Company for further growth. The Board has no set policy concerning the separation of the two offices of Chairman of the Board and Chief Executive Officer, but retains the flexibility to decide how the two positions should be filled based on the circumstances existing at any given time. In light of the economic conditions during recent years and the significant acquisitions completed by the Company during 2011 and 2012 and the challenge of integrating these acquisitions with the Company’s operations, the Board considers it important to continue to have someone in the role of Chairman of the Board with a comprehensive understanding of, as well as primary responsibility for, the Company’s businesses and strategic direction. The Board also determined that having Mr. Pyne serve as Chairman of the Board and Chief Executive Officer for a period of time would facilitate the management succession process.

The Board does not have a “lead director,” but has chosen Mr. Gower to be the “presiding director” to preside at the regular executive sessions of the non-management directors that are held at least quarterly. Mr. Gower also serves as a liaison between the independent directors and management on certain matters that are not within the area of responsibility of a particular committee of the Board.

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Risk Oversight

The Board carries out its risk oversight function primarily through the Audit Committee. Management prepares and reviews with the Audit Committee annually a comprehensive assessment of the identified internal and external risks of the Company that includes evaluations of the potential impact of each identified risk, its probability of occurrence and the effectiveness of the controls that are in place to mitigate the risk. The Audit Committee then brings to the attention of the Board any issues that warrant further discussion or action. The Audit Committee and the Board also receive regular reports of any events or circumstances involving risks outside the normal course of business of the Company. At times, a particular risk will be monitored and evaluated by another Board committee with primary responsibility in the area involved, such as the Compensation Committee’s review of the risks related to the Company’s compensation policies and practices. The Board’s administration of its risk oversight function has not affected the Board’s leadership structure.

TRANSACTIONS WITH RELATED PERSONS

The Board has adopted a written policy on transactions with related persons that provides that certain transactions involving the Company and any of its directors, executive officers or major stockholders or members of their immediate families, including all transactions that would be required to be disclosed as transactions with related persons in the Company’s Proxy Statement, are subject to approval in advance by the Governance Committee, except that a member of the Committee will not participate in the review of a transaction in which that member has an interest. The Committee has the discretion to approve any transaction which it determines is in, or not inconsistent with, the best interests of the Company and its stockholders. If for any reason a transaction with a related person has not previously been approved, the Committee will review the transaction within a reasonable period of time and either ratify the transaction or recommend other actions, including modification, rescission or termination, taking into consideration the Company’s contractual obligations. If a transaction is ongoing or consists of a series of similar transactions, the Committee will review the transaction at least annually and either ratify the continuation of the transaction or recommend other actions, including modification, rescission or termination, taking into consideration the Company’s contractual obligations. The policy provides certain exceptions, including compensation approved by the Board or its Compensation Committee.

During 2009, the Company and its subsidiaries paid HMC Interests LLC (“HMC”), a company owned by C. Berdon Lawrence, the Chairman of the Board of the Company, $155,000 for air transportation services provided by HMC. Such services were in the ordinary course of business of the Company and HMC.

The Company is a 50% owner of The Hollywood Camp, L.L.C. (“The Hollywood Camp”), a company that owns and operates a hunting and fishing facility used by the Company and L3 Partners, LLC (“L3P”), which is also a 50% owner. L3P is a company owned by Mr. Lawrence. The Company uses The Hollywood Camp primarily for customer entertainment. L3P acts as manager of The Hollywood Camp. The Hollywood Camp allocates lease and lodging expenses to its members based on their usage of the facilities. During 2009, the Company paid $2,240,000 to The Hollywood Camp for its share of facility expenses.
During 2009,2012, the Company and its subsidiaries paid 55 Waugh, LP, a partnership owned 60% by Mr. Lawrence and his family, $1,394,000$1,487,000 for the rental of office space in a building owned by 55 Waugh, LP. The Company’s headquarters are located in the building under a lease that was signed in 2005, prior to the purchase of the building by 55 Waugh, LP, and expires at the end of 2015. The aggregate amount of rent due from January 1, 20092012 to the end of the lease term on December 31, 2015 is approximately $8,779,000.
$5,498,000. Mr. Lawrence resigned from the Company’s Board of Directors effective December 31, 2012.


10The Company is a 50% owner of The Hollywood Camp, L.L.C. (“The Hollywood Camp”), a company that owns and operates a hunting and fishing facility used by the Company and L3 Partners, LLC (“L3P”), a company owned by Mr. Lawrence, which is also a 50% owner. The Company uses The Hollywood Camp primarily for customer entertainment. L3P acts as manager of The Hollywood Camp. The Hollywood Camp allocates lease and lodging expenses to its members based on their usage of the facilities. The Company paid The Hollywood Camp $2,392,000 in 2012 for its share of facility expenses.

The Company paid L3P $144,000 in 2012 for air transportation services provided by L3P in the ordinary course of business of the Company.

The son of Mr. Lawrence is the Chairman of the Board and Chief Executive Officer, and owns 70% of the common stock of Bayou City Pumps, Inc. (“Bayou City”). Bayou City provides overhauls of black oil barge pumps to the Company. Bayou City acquired Engineering Pump Services (“EPS”), previously the Company’s primary vendor for overhauls of black oil barge pumps, in the first quarter of 2012. The Company paid Bayou City $1,409,000 in 2012 for overhauls of black oil barge pumps in the ordinary course of business of the

11


Company. In addition, the Company specified the use of a particular EPS pump in certain of its shipyard contracts for new barge construction, resulting in payments of approximately $3,700,000 from the shipyard to Bayou City in 2012.

Mr. Alario, a director of the Company, is the Chairman of the Board, President and Chief Executive Officer of Key Energy. Key Energy paid the Company $13,152,000 in 2012 for oilfield service equipment and for parts and service in the ordinary course of business of the Company. In addition, Key Energy paid The Hollywood Camp $463,000 for use of the facility during 2012.

In December 2012, the Company acquired Penn and an affiliated company from Mr. Waterman and his family for approximately $175 million in cash and Company stock. Contemporaneously with the closing of the acquisition, Mr. Waterman resigned from all director and officer positions with Penn and affiliated companies and no longer has any ownership in or position with Penn or any of its affiliated companies.

During 2012, Penn paid the Company $1,253,000 for diesel engine services related to the repair and maintenance of Penn’s vessels in the ordinary course of business of the Company.

The husband of Amy D. Husted, Vice President — Legal of the Company, is a partner in the law firm of Strasburger & Price, LLP. In 2009, theThe Company paid the law firm $333,000$384,000 in 2012 for legal services in connection with matters in the ordinary course of business of the Company.

Wayne G. Strahan, the brother of Dorman L. Strahan, the President of one of the Company’s two principal diesel engine services subsidiaries, is the Service Manager of the Company’s diesel engine services facility in Tampa, Florida. In 2012, Wayne G. Strahan received compensation of $128,878 from the Company.

Bernard L. Casey, the brother of Timothy J. Casey, former President of one of the Company’s marine transportation subsidiaries, is the West Coast Division Manager of the Company’s coastal marine transportation operations. In 2012, Bernard L. Casey received compensation of $159,884 from the Company.

In 2012, United Holdings, a subsidiary of the Company, paid Midwest Hoses and Specialty, Inc. (“Midwest”) $2,422,000 for fabrication services at one of its manufacturing and remanufacturing facilities. The stepdaughter of Bill F. Moore, Jr., the President of United Holdings, is an account representative for Midwest and received approximately $12,000 in commissions from Midwest in 2012 on the business done by Midwest with United Holdings.

CORPORATE GOVERNANCE

Business Ethics Guidelines

The Board has adopted Business Ethics Guidelines that apply to all directors, officers and employees of the Company. A copy of the Business Ethics Guidelines is available on the Company’s web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance. The Company is required to make prompt disclosure of any amendment to or waiver of any provision of its Business Ethics Guidelines that applies to any director or executive officer or to its chief executive officer, chief financial officer, chief accounting officer or controller, or persons performing similar functions. The Company will make any such disclosure that may be necessary by posting the disclosure on its web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance.

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines. A copy of the guidelines is available on the Company’s web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance.

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Communication with Directors

Interested parties may communicate with the full Board or any individual directors, including the Chairmen of the Audit, Compensation and Governance Committees, the presiding director or the non-management or independent directors as a group, by writing to themc/o Kirby Corporation, 55 Waugh Drive, Suite 1000, Houston, Texas 77007. Complaints about accounting, internal accounting controls or auditing matters should be directed to the Chairman of the Audit Committee at the same address. All communications will be forwarded to the person(s) to whom they are addressed.

Web Site Disclosures

The following documents and information are available on the Company’s web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance:

Audit Committee Charter

Compensation Committee Charter

• Audit Committee Charter
• Compensation Committee Charter
• Governance Committee Charter
• Criteria for the Selection of Directors
• Business Ethics Guidelines
• Corporate Governance Guidelines
• Communication with Directors

Governance Committee Charter

Criteria for the Selection of Directors

Business Ethics Guidelines

Corporate Governance Guidelines

Communication with Directors

BENEFICIAL OWNERSHIP OF COMMON STOCK

Beneficial Ownership of Directors and Executive Officers

The following table shows the number of shares of common stock beneficially owned by each director, each named executive officer listed in the Summary Compensation Table, and by the directors and executive officers of the Company as a group as of March 1, 2010.2013. Under rules of the SEC, “beneficial ownership” is deemed to include shares for which the individual, directly or indirectly, has or shares voting or investment power, whether or not they


11


are held for the individual’s benefit. Except as otherwise indicated, the persons named have sole voting and investment power over the shares shown.
                     
  Shares of Common Stock
    
  Beneficially Owned on March 1, 2010  Percent of
 
        Right to
     Common
 
  Direct(1)  Indirect  Acquire(2)  Total  Stock(3) 
 
DIRECTORS                    
James R. Clark  2,000      22,000   24,000     
C. Sean Day  29,424      36,000   65,424     
Bob G. Gower  41,922      27,731   69,653     
William M. Lamont, Jr.   36,284(4)     57,000   93,284     
C. Berdon Lawrence  645,337   84,227(5)  92,982   822,546   1.5%
David L. Lemmon  4,000      34,000   38,000     
                     
Monte J. Miller  6,274      35,988   42,262     
George A. Peterkin, Jr.   201,013(6)  63,840(7)  67,218   332,071     
Joseph H. Pyne  409,782      116,942   526,724     
Richard R. Stewart  2,000      22,000   24,000     
NAMED EXECUTIVES                    
Gregory R. Binion  45,537      18,782   64,319     
Norman W. Nolen  53,203      24,972   78,175     
Dorman L. Strahan  46,046      17,803   63,849     
Steven P. Valerius  47,288(8)        47,288     
Directors and Executive Officers as a group (21 in number)  1,714,058   148,067   604,635   2,466,760   4.5%

  Shares of Common Stock
Beneficially Owned on March 1, 2013
   Percent of
Common
Stock(3)
 
  Direct(1)  Indirect  Right to
Acquire(2)
  Total   

DIRECTORS

      

Richard J. Alario

  1,479        17,153    18,632    

C. Sean Day

  54,095        24,000    78,095    

Bob G. Gower

  36,383        20,574    56,957    

William M. Lamont, Jr.

  54,284(4)       60,000    114,284    

David L. Lemmon

  7,000        36,000    43,000    

Monte J. Miller

  2,636        55,264    57,900    

George A. Peterkin, Jr.

  149,418(5)   69,920(6)   64,947    284,285    

Joseph H. Pyne

  427,226        70,850    498,076    

Richard R. Stewart

  8,000        34,000    42,000    

William M. Waterman

  150,001(8)   349,999(7)(8)   10,000    510,000    

NAMED EXECUTIVES

      

Gregory R. Binion

  73,243        29,532    102,775    

David W. Grzebinski

  37,580        15,679    53,259    

William G. Ivey

  29,854        22,430    52,284    

James F. Farley

  45,863        21,046    66,909    

Directors and Executive Officers as a group
(24 in number)

  1,226,626    421,439    531,798    2,179,863     3.8

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(1)Shares owned as of March 1, 20102013 and held individually or jointly with others, or in the name of a bank, broker or nominee for the individual’s account. Also includes shares held under the Company’s 401(k) Plan.

(2)Shares with respect to which a director or executive officer has the right to acquire beneficial ownership within 60 days after March 1, 2010.2013.

(3)No percent of class is shown for holdings of less than 1%.

(4)Does not include 498,070395,170 shares owned by Mr. Lamont’s wife, or 733,342682,662 shares owned by trusts of which Mr. Lamont’s wife is the beneficiary. Mr. Lamont disclaims beneficial ownership of all 1,231,4121,077,832 shares. A total of 176,000 of such shares are pledged as security for a credit facility.

(5)Owned by a limited partnership of which entities wholly owned by Mr. Lawrence and his wife are the general partners, and of which Mr. Lawrence’s children and three trusts for his children are the limited partners.
(6)Does not include 8,000 shares owned by Mr. Peterkin’s wife. Mr. Peterkin disclaims beneficial ownership of those shares.

(7)(6)Shares owned by trusts of which Mr. Peterkin is trustee, the beneficiaries of which are relatives of his or his wife’s. Mr. Peterkin disclaims beneficial ownership of those shares.

(7)Shares are held by a grantor retained annuity trust for the benefit of Mr. Waterman and, following the expiration of the two-year annuity term, for the benefit of Mr. Waterman’s wife and Mr. Waterman’s two adult children.

(8)Does not include 28,549A total of 83,825 of the shares owned by Mr. Valerius’ wife. Mr. Valerius disclaims beneficial ownershipWaterman and the grantor retained annuity trust are held in escrow to secure potential indemnification obligations to the Company under the purchase agreement for the acquisition of those shares.Penn by the Company.


12


Principal Stockholders

The following table and notes set forth information as of the dates indicated concerning persons known to the Company to be the beneficial owner of more than 5% of the Company’s outstanding common stock, based on filings with the SEC:

         
  Number of Shares
  Percent
 
Name and Address
 Beneficially Owned  of Class(1) 
 
PRIMECAP Management Company  3,229,014(2)  5.98%
225 South Lake Avenue, Suite 400
Pasadena, California 91101
        
Araltec, S.L.   2,990,190(3)  5.54%
Calle Santisima Trinidad, 2        
Madrid, Spain 28010        
Select Equity Group, Inc. and Select Offshore Advisors, LLC  2,916,196(4)  5.40%
380 Lafayette Street, 6th Floor
New York, New York 10003
        
Harris Associates Inc.   2,881,240(5)  5.33%
Two North LaSalle Street, Suite 500        
Chicago, Illinois60602-3790��       

Name and Address

  Number of Shares
Beneficially Owned
  Percent
of Class(1)
 

Select Equity Group, Inc. and
Select Offshore Advisors, LLC

380 Lafayette Street, 6th Floor

New York, NY 10003

  

 

4,171,573

(2) 

 

 

7.4

Atlanta Capital Investment Managers

1075 Peachtree Street NE, Suite 2100

Atlanta, GA 30309

   3,449,500(3)   6.1

BlackRock, Inc.

40 East 52nd Street

New York, NY 10022

   3,295,927(4)   5.8

Araltec, S.L.

Calle Santisima Trinidad, 2

Madrid, Spain 28010

   2,990,190(5)   5.3

(1)Based on the Company’s outstanding shares of common stock on March 1, 2010.2013.

(2)Based on Schedule 13G, dated February 9, 2010,14, 2013, filed by PRIMECAP Management CompanySelect Equity Group, Inc. and Select Offshore Advisors, LLC with the SEC.

(3)Based on Schedule 13G, dated January 29, 2013, filed by Eaton Vance Management for its subsidiary, Atlanta Capital Investment Managers, with the SEC.

(4)Based on Schedule 13G, dated January 30, 2013, filed by BlackRock, Inc. with the SEC.

(5)Based on Schedule 13G, dated December 23, 2009, filed by Araltec, S.L. with the SEC.
(4)Based on Schedule 13G, dated February 16, 2010, filed by Select Equity Group, Inc. and Select Offshore Advisors, LLC with the SEC.
(5)Based on Schedule 13G, dated February 11, 2010, filed by Harris Associates L.P. and Harris Associates Inc. with the SEC.

14


Section 16(a) Beneficial Ownership Reporting Compliance

The Company’s directors and executive officers, and persons who own beneficially more than 10% of the Company’s common stock, are required under Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) to file reports of beneficial ownership and changes in beneficial ownership of the Company’s common stock with the SEC and the NYSE. Based solely on a review of the copies of reports furnished to the Company and written representations that no other reports were required, the Company believes that its executive officers and directors complied with all Section 16(a) filing requirements during 2009,2012, except that onea report covering a saletwo sales on February 13, 2012 and February 14, 2012 for an aggregate of 53610,000 shares by Amy D. Husted, Vice President-Legal,a trust for the benefit of Mr. Lamont’s wife was filed late,on March 19, 2012 and one reportthe reports covering a 5,000 share charitable contribution bythe stock option grants and restricted stock awards to Mr. Pyne in 2009 was reported in March 2010.

Alario, Mr. Day, Mr. Gower, Mr. Lamont, Mr. Lawrence, Mr. Lemmon, Mr. Miller, Mr. Peterkin and Mr. Stewart on April 24, 2012 for an aggregate of 56,306 stock option grants and 10,383 restricted stock awards were filed on April 30, 2012.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Compensation CommitteeExecutive Summary

The Compensation Committee of the Board of Directors of the Company has the authority and responsibility to (1) determine the salaries for executive officers of the Company, (2) administer the Company’s annual incentive compensation program, (3) administer all of the Company’s stock option and incentive compensation plans and grant stock options, restricted stock and other awards under the plans (except those plans under which grants are automatic) and (4) review and make recommendations to the Board with respect to incentive and equity-based compensation plans and any other forms of compensation for executive officers of the Company. The Compensation Committee is composed of four members, all of whom are “independent directors,” “Non-Employee Directors” and “outside directors” as those terms are defined in relevant NYSE standards and federal securities and tax regulations.


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Named Executive Officers

The Committee does not delegate any of its authority to determine executive compensation. The Committee considers recommendations from the Chief Executive Officer in making its compensation decisions for executive officers other than the Chief Executive Officer and the Chairman of the Board. The Committee will usually, but not always, follow those recommendations in setting compensation for other executive officers since the Chief Executive Officer is in the best position to evaluate the contributions of the other executive officers to the success of the Company. The Committee considers input from the Chairman of the Board in determining the compensation of the Chief Executive Officer, but undertakes a more thorough evaluation of the individual performance of the Chief Executive Officer prior to setting his compensation than it does for the other executive officers. The Committee also engaged a compensation consultant in connection with its compensation decisions for 2009.
Compensation Consultant
For 2009, the Compensation Committee engaged Cogent Compensation Partners, a compensation consulting firm (the “Consultant”), to provide information for the Committee to consider in making compensation decisions. The Consultant was engaged directly by the Compensation Committee to:
• conduct an overall review of the Company’s compensation strategy and incentive compensation plans;
• develop a reference group of comparable companies for comparisons of Company performance and executive compensation;
• conduct a review of total compensation for the Company’s senior executive officers;
• conduct a review of the Company’s compensation for outside directors;
• perform a marketplace analysis of direct compensation for senior executive officers compared to the reference group of companies and published compensation surveys;
• update the Committee on current trends in executive compensation;
• consult with the Committee concerning a risk analysis of the Company’s compensation policies and practices; and
• consult with the Committee on the compensation package for the Company’s new Chief Financial Officer.
The consultant was not retained by the Company or any of its affiliates (other than the Compensation Committee) to perform any services during 2009.
Overview
The Company’s “named executive officers” for 20092012 are Joseph H. Pyne, Chairman of the Board and Chief Executive Officer, Joseph H. Pyne, theDavid W. Grzebinski, Executive Vice President and Chief Financial Officer, Norman W. Nolen, and the fourthree other most highly compensated executive officers for 2009,2012, consisting of C. Berdon Lawrence, Chairman of the Board of the Company, Gregory R. Binion, President and Chief Operating Officer, William G. Ivey, President of the Company’s principal inland marine transportation subsidiary, Dorman L. Strahan,and James F. Farley, President of the Company’s diesel engine services subsidiaries, and Steven P. Valerius, Executive Vice President and Chief Administrative Officer of the Company until December 30, 2009.principal offshore marine transportation subsidiary. Compensation of the named executive officers is based primarily on three elements: (1) base salary, (2) annual incentive compensation and (3) long-term incentives, including stock options, restricted stock and performance awards. The overall goal of the Company’s compensation program is to pay compensation competitive with similar corporations and to tie annual incentives and long-term incentives to corporate performance and a return to the Company’s stockholders.

Compensation Objectives

The objectives of the compensation program are:

• 

to attract and retain senior executives with competitive compensation opportunities;

• to achieve consistent performance over time; and
• to achieve performance that results in increased profitability and stockholder value.


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to achieve consistent performance over time; and

to achieve performance that results in increased profitability and stockholder value.

The Company’s executive compensation program is designed to reward:

performance that contributes to the long-term growth and stability of the Company and the effectiveness of management in carrying out strategic objectives identified for the Company (through the base salary);

the financial and operational success of the Company for the current year (through the annual incentive plan); and

• performance that contributes to the long-term growth and stability of the Company and the effectiveness of management in carrying out strategic objectives identified for the Company (through the base salary);
• the financial and operational success of the Company for the current year (through the annual incentive plan); and
• 

the future growth and profitability of the Company (through long-term incentive compensation awards).

Chief Executive Officer Compensation for 2012

Mr. Pyne’s salary increased from $710,000 to $772,500 in 2012 (an increase of 8.8% over 2011). He earned cash incentive compensation payments of $2,334,224 (a decrease of 17.1% from 2011) and received equity compensation awards with a grant date fair value of $1,853,172 (an increase of 9.0% over 2011). A total of 59% of his direct compensation (annual bonus, three-year performance award and stock options) was performance-based.

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Highlights of Company Performance in 2012

The Company achieved strong financial results in 2012. The following table summarizes a number of key financial measures for 2011 and 2012 (dollars in millions except per share amounts):

   2011  2012  Increase
(Decrease)
 

Total assets

  $2,960   $3,653    23

Total revenues

  $1,850   $2,113    14

Net earnings attributable to Kirby

  $183   $209    14

EBITDA(1)

  $436   $507    16

Earnings per share (diluted)(1)

  $3.33   $3.73    12

Return on total capital(1)

   17.2  15.2  (13%) 

(1)Performance measures for annual and long-term incentive compensation awards).discussed under “Elements of Compensation — Annual Incentive Compensation” below.

The Company’s total stockholder return was (6%) for the last year and 78% for the last three years. During 2012, the Company further expanded and consolidated its position in the coastal marine transportation business through two significant acquisitions and made significant progress in changing the primary focus of the land-based diesel engine business acquired in 2011 from manufacturing to a more stable and predictable remanufacturing and service operation.

Compensation Committee

The Compensation Committee (the “Committee”) of the Board of Directors of the Company has the authority and responsibility to (1) determine the salaries for executive officers of the Company, (2) administer the Company’s annual incentive compensation program, (3) administer all of the Company’s stock option and incentive compensation plans and grant stock options, restricted stock and other awards under the plans and (4) review and make recommendations to the Board of Directors with respect to incentive and equity-based compensation plans and any other forms of compensation for executive officers of the Company. The Compensation Committee is composed of four members, all of whom are “independent directors,” “Non-Employee Directors” and “outside directors” as those terms are defined in relevant NYSE standards and federal securities and tax regulations.

The Committee does not delegate any of its authority to determine executive compensation. The Committee considers recommendations from the Chief Executive Officer in making its compensation decisions for executive officers other than the Chief Executive Officer. The Committee will usually follow those recommendations when setting compensation for other executive officers since the Chief Executive Officer is in the best position to evaluate the contributions of the other executive officers to the success of the Company. The Committee undertakes an independent evaluation of the individual performance of the Chief Executive Officer prior to setting his compensation. The Committee also engaged a compensation consultant in connection with its compensation decisions for 2012.

In determining the compensation of the named executive officers, the Compensation Committee considered all elements of total compensation, including salary, annual incentive compensation, equity-based and other long-term incentive compensation and projected payouts under the Company’s retirement plans. The Compensation Committee also relied in part on the marketplace analysis prepared by Cogent Compensation Partners, a compensation consulting firm retained by the ConsultantCompensation Committee (the “Consultant”), to determine that the Committee’s compensation decisions, both as to specific elements of compensation and as to aggregate compensation, were in a reasonable range for comparable companies and for the positions held by the named executive officers. The Committee also considered the Consultant’s analysis in determining whetherevaluating internal pay equity among the compensation awarded to each named executive officer bears a reasonable relationship to the compensation awarded to the other named executive officers. From that foundation, the Committee refined the individual compensation decisions based on a number of factors, including such factors as the prior year’s compensation, the performance of the

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Company or its business groups, individual performance of the named executive officer, any increased responsibilities assigned to a particular executive officer, the recommendations of the Chief Executive Officer (except as to his own compensation) and considerations of internal pay equity. However, the final decisions of the Committee are to some extent subjective and do not result from a formulaic application of any of those factors.

The Company also provides certain perquisites and other personal benefits to its

Say on Pay

At the Company’s 2012 Annual Meeting, stockholders approved the compensation of the Company’s named executive officers. Except for accelerated vesting of outstanding stock options, restricted stock and performance awards upon a change in controlofficers by 95% of the votes cast. Although the Company interpreted the vote as an endorsement of its executive compensation policies and practices, the Compensation Committee continues to reevaluate the principal elements of the Company’s executive compensation and for 2012 modified the structure of the annual incentive plan as described under “Elements of Compensation — Annual Incentive Compensation” below.

Compensation Consultant

For 2012, the Compensation Committee engaged the Consultant to provide information for the Committee to consider in making compensation decisions. The Consultant was engaged directly by the Compensation Committee to:

review the reference group of comparable companies used for comparisons of Company performance and executive compensation;

perform a marketplace analysis of direct compensation for senior executive officers compared to the reference group of companies and published compensation surveys;

update the Committee on current issues in executive compensation;

consult with the Committee concerning risks of the Company’s compensation policies and practices;

consult with the Committee concerning the structure of the annual incentive plan; and

consult with the Committee concerning the evaluation of executive compensation by proxy advisory firms.

At the Compensation Committee’s request, the Consultant has addressed the six independence factors for compensation committee advisers that were identified in a recently adopted SEC regulation. The Committee concluded that there are no special compensation arrangements related to severanceconflicts of interest that affect the work of the Consultant for the Committee. The Consultant was not retained by the Company orchange-in-control events. The Company has no employment agreements with any of its affiliates (other than the Compensation Committee) to perform any services during 2012.

During 2012, Cogent Compensation Partners was acquired by another executive officers.

Mr. Valerius resigned from his position as Executive Vice Presidentcompensation consulting firm, Frederic W. Cook & Co., Inc. (“FWC”). The acquisition did not result in any conflicts of interest or other impediments to continuing work for the Committee by FWC and Chief Administrative Officerthe Committee continued to engage FWC after the acquisition to perform the same types of services that the Company on December 30, 2009 after more than 30 years of service at an executive level with the Company and a predecessor company. His compensation is discussed separately under “Severance Compensation” below.
Consultant had previously provided.

Elements of Compensation

Salary

The Compensation Committee attempts to set base salaries for the named executive officers at approximately the median for comparable companies. The Committee and management believe that the Company is thea leader in its industrythe industries in which it operates and that its employees are frequently targeted by its competitors. Therefore the Committee generally attempts to set compensation at levels to keep pace with inflation and the competitive market to avoid losing valuable employees.

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Based on information available at the beginning of 2009,in January 2012, the Consultant determined that the Company’s salaries for its top executive officers averaged approximately 91%89% of the median for the reference group. In settinggroup and that salaries for four of the five named executive officers were 84% to 92% of the market median for comparable positions. Salary increases for those four executive officers for 2012 ranged from 5% to 14%, depending on the amount of the increase necessary to bring them closer to the market median. The Committee determined that the increases were warranted by the performance of the executives and the Company and were consistent with the Company’s overall salary budget for 2009, management andcompensation philosophy. One of the Compensation Committee considerednamed executive officers, Mr. Farley, was not covered by the Consultant’s executive compensation review. He was promoted during the year to President of the Company’s performance in 2008 on financial, operational and strategic levels, as well as independent survey information from sources other than the Consultantprincipal offshore marine transportation subsidiary. His salary was increased by 3% at that projected 3.7-4.0% increases in salary budgets for 2009 for all categories of employees at a broad range of companies. Because of the deteriorating business conditions at the beginning of 2009 and the Company’s ongoing efforttime to reduce expenses, the Company insteadreflect his increased shore staff salaries by 1.7-2.5% over 2008, but did not increase the salaries of executive officers.

responsibilities.

Annual Incentive Compensation

With regard to the annual cash incentives for executive officers, the Compensation Committee attempts to set annual incentive compensation targets at a level such that, with a positivetarget performance by an executive officer and the Company, the total cash compensation (base salary plus annual incentive bonus) for the executive officer will be at approximately the median for comparable companies and positions, but with a certain level ofsuperior performance by an executive officer and the Company, the total cash compensation for the executive officer will be above the


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median total cash compensation for similar corporations and positions. median. Based on the market analysis provided to the Committee by the Consultant, the Committee determined that the 20092012 salaries for the executive officers would be within or below the median range and that, except in the case of Mr. Binion, the target total cash compensation including incentive compensation, would be within or above the median range and could reach a range around the 75th percentile with strong company performance, which is consistent with the Company’s compensation philosophy. Mr. Binion’s targetWith the Company’s strong performance in 2012, actual total cash compensation was belowbetween the median because he was promoted to his current position late in 200850th and 75th percentiles for four of the compensation increase he received at that time did not fully bring his compensation into line withfive named executive officers, including the competitive market amounts provided byChief Executive Officer, and slightly above the Consultant.75th percentile for the other named executive officer. The Compensation Committee believes that total annual cash compensation above the median for similar corporations and positions is appropriate since a significant portion of each executive officer’s total annual cash compensation is at risk due to both individual performance factors and the Company’s success in achieving the targeted performance measures described in the next paragraph. The annual incentive compensation constitutes a significant portion of direct cash compensation and can vary significantly from year to year depending on the Company’s achievement of those performance measures.
The

Following the 2011 evaluation of the Company’s annual incentive plan isby the Compensation Committee, the Committee decided in 2012 to modify the structure of the plan to allow more flexibility in determining awards to individual participants. Bonuses paid under the plan are intended to qualify as performance-based compensation for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended. For 2012, the performance goal required in order for any participants in the plan to receive a bonus was the achievement by the Company of net earnings greater than $1,000,000. Target annual incentive compensation expressed as a percentage of a participant’s base salary was established for each participant in the plan and a recommended bonus was determined for each participant based on the achievement ofextent to which three additional equally weighted performance measures were achieved by each of the Company’s three business groups — inland marine transportation, diesel engine services and offshore marine transportation — and by the Company as a whole. The aggregate amount of the bonus pool for the year was equal to the sum of the recommended bonuses so determined for all participants. The recommended bonus for each participant serves as a guideline for the individual awards, but each individual bonus may be increased or decreased from that level. However, in no event will a bonus paid to any participant exceed 200% of the target bonus for that participant. The Compensation Committee may decrease (but not increase) the bonus paid to any participant below that maximum amount based on such quantitative or qualitative criteria as the Compensation Committee determines to be appropriate.

The three additional performance measures are EBITDA, (net earnings attributable to Kirby before interest expense, taxes on income, depreciation and amortization), return on total capital and earnings per share. EBITDA for the year is calculated by adding the following amounts shown in the Company’s audited financial statements: (i)(1) net earnings attributable to Kirby, (ii)(2) depreciation and amortization, (iii)(3) interest expense and (iv)(4) provision for taxes on income. Return on total capital for the year is calculated by dividing (i) net earnings attributable to Kirby plus provision for taxes on income plus interest expense by (ii) the average of total equity plus long-term debt for the year.

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Performance under the annual incentive plan is measured on a calendar year basis. At the beginning of eachthe year, the Committee established the sole performance goal under the plan of net earnings greater than $1,000,000. The Committee also established objectives are established for each of the three additional performance measures for the year, based on the budget for the year that is prepared by management and approved by the Board.

Board, to serve as the basis for determining the total amount to be paid out pursuant to the annual incentive plan.

For 2009,2012, the Company exceeded $1,000,000 in net earnings, the performance goal that had to be achieved for any plan participants to receive incentive payments. In addition, the target and actual amounts for the three additional performance measures for the Company were:

     
  Target Actual
 
EBITDA $319 million $309 million
Return on total capital  19.0%  18.2%
Earnings per share $2.45 $2.34
The actual numbers include the effect of a $2.5 million decrease in the Company’s reserve for doubtful accounts due

         Target             Actual      

EBITDA

  $520 million $507 million

Return on total capital

    16.0%   15.2%

Earnings per share

  $3.80 $3.73

In addition to the improved financial condition of its customers and a $4.8 million chargetarget bonus established for staff reductions. However,each participant in determining the payouts under the plan, the Committee excluded the effect of the decrease in the reserve for doubtful accounts and the charge for staff reductions.

In administering the annual incentive plan, the Compensation Committee establishes a target amount expressed as a percentage of base salary for each participant. The Committee also establishesestablished a range of possible incentive compensation payments, with no payment earned unless at least 80% of the target performance is achieved and a maximum possible award of 200% of the target amount if 120% of the target performance is achieved. Annual incentive compensation payments for employees of the Company itself (a holding company which conducts operations through its subsidiaries) are based entirely on the performance of the Company as a whole. Payments for the heads of the Company’s business groups are based 50% on the performance of the business group and 50% on overall Company performance. Payments for all other employees in a business group are based 70% on the performance of the business group and 30% on Company performance.

For 2009,2012, the Compensation Committee set the target annual incentive compensation for the named executive officers at the following percentages of base salary: Joseph H. Pyne (90%), C. Berdon Lawrence (90%), Norman W. Nolen (70%(105%), Gregory R. Binion (70%), Dorman L. StrahanDavid W. Grzebinski (70%), William G. Ivey (70%) and Steven P. ValeriusJames F. Farley (70%). Mr. Pyne’s target percentage represented an increase from 2011, when his target percentage was 90%. The target amounts as a percentageCommittee approved the increase with the objective of base salary were established atpaying Mr. Pyne total cash compensation (salary plus annual incentive payment) between the median and the 75th percentile for comparable companies, depending on the Company’s performance. The other four named executive officers have all been hired for, or promoted to, their current positions in the last three years. Their target percentages, which were unchanged from 2011, were set at levels in 2000,which the Committee determined, based on analysis by the recommendation of a differentConsultant, are commensurate with their increased responsibilities, consistent with the Company’s executive compensation consulting firm that advisedphilosophy and the Company on the design of the plan. Since then, the Committee has generally been satisfied that the annual incentive compensation awards produced by


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the plan have been reasonable in amount and have correlated with the performancetarget percentages for other officers of the Company and its business groupscompetitive for executives with their qualifications and has therefore not changed the target percentages for the named executive officers.experience. Payouts under the annual incentive plan for 20092012 were 83.6% of the target amount for Messrs. Pyne, Lawrence, Nolen and Valerius (employees of the parent Company), 86.7%91.9% of the target amount for Mr. Pyne, Mr. Binion and Mr. Grzebinski (employees of the parent Company), 97.1% of the target amount for Mr. Ivey, the President of the Company’s principal inland marine transportation subsidiary, and 54.4%102.3% of the target amount for Mr. Strahan,Farley, the President of the Company’s diesel engine services subsidiaries.
The annual incentive plan also provides that each participant’s total potential payment under the plan may be decreased by up to 25% based on a discretionary assessment of individual performance for the year. principal offshore marine transportation subsidiary.

The Compensation Committee awarded the fullrecommended bonus calculated under the plan, payment for 2009without adjustment, to each named executive officer for 2012 after determining that the performance of each of the officers met expectations for the year. That determination for the Chief Executive Officer was based on the performance evaluation of the Chief Executive Officer conducted by the Board of Directors under the guidance of the Governance Committee and on the extent of the Company’s performance in achievingachievement of its level of profitability, generating substantial cash flow, retaining its market sharefinancial, operational and reducing costs during a difficult year.strategic goals for 2012. The determination for the other named executive officers was based primarily on evaluations and recommendations made by the Chief Executive Officer, as well as on the Board’s interaction with the other named executive officers during the previous year in relation to matters in their areas of responsibility.

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Long-Term Incentive Compensation

The Compensation Committee’s objective for long-term incentive compensation for executive officers is generally to fall between the 50th and 75th percentiles (depending on performance) in long-term incentive compensation of similar corporations and positions. In addition to retirement, health care and similar benefits, theThe primary long-term incentives for executive officers are stock options, restricted stock and performance awards. The Committee views stock option and restricted stock awards as a regular component of compensation for executive officers, as well as for managerial level employees generally, because the Committee believes that such awards provide an incentive for key employees to remain with the Company. Incentive compensation underCompany and focus on the Company’s annual incentive plan varies with the Company’s achievementlong-term performance of the annual performance targets.Company. The long-term incentive compensation therefore supplies the incentive of tying a meaningful portion of total compensation to Company performance, as well as business group and individual performance. In addition, the ultimate value of the options and shares of restricted stock granted depends on the Company’s stock price, aligning the interests of recipients of those awards with the interests of the Company’s stockholders.

In 2009,2012, the Compensation Committee granted nonqualified stock options covering 171,39660,637 shares of common stock and 98,26936,335 shares of restricted stock to the named executive officers. Those numbers include options and shares granted under the long-term incentive compensation program discussed below. The options were granted at a price equal to the fair market value of the Company’s common stock on the date of grant, vest in equal increments over three years and have a term of fiveseven years. The restricted stock vests in equal increments over five years. In deciding on the number of options and shares of restricted stock to award to executive officers other than the four named in the discussion of the long-term incentive compensation program below, the Committee considered the performance of the Company, the performance of the officer, information from the Consultant about the level of long-term equity-based incentive compensation awards made by comparable companies, the Company’s option overhang (considering both outstanding options and shares remaining available to be granted under the Company’s plans) and recommendations from the Chief Executive Officer. Those factors are not weighted in any specific manner and the resulting awards are therefore to some extent subjective.

The Company maintains a long-term incentive compensation program for selected senior executives to bethat is administered by the Compensation Committee. The program allows the grant of incentive stock options, nonincentive stock options, restricted stock, performance shares and performance units (or any combination thereof). The objective of the program is to provide long-term incentive compensation to the specified executives in an amount that falls between the 50th and 75th percentiles (depending on performance) when compared to companies or business units of similar size. For 2012, the value of long-term incentive compensation awards to the named executive officers actually ranged from 73% to 92% of the market median.

Under the program, the elements of long-term compensation to be awarded, as well as the executives selected to participate, are determined each year by the Compensation Committee.


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For 2009,2012, the Compensation Committee determined that the executives who would receive awards under the long-term incentive compensation program would include Mr. Pyne, Mr. Nolen, Mr. Binion, Mr. Strahan and Mr. Valerius, that the target value of the awards would be $3,000,000 for Mr. Pyne, $750,000 for Mr. Binion, $660,000 for Mr. Nolen, $660,000 for Mr. Valerius and $305,000 for Mr. Strahan,five named executive officers and that 20% of the target value of the awards would be in the form of stock options, 40% in the form of restricted stock and 40% in the form of cash performance awards. The target values of the awards, broken down by the three components, were as follows:

   Stock
Options
   Restricted
Stock
   Performance
Awards
   Total 

Joseph H. Pyne

  $600,000    $1,200,000    $1,200,000    $3,000,000  

Gregory R. Binion

   180,000     360,000     360,000     900,000  

David W. Grzebinski

   160,000     320,000     320,000     800,000  

William G. Ivey

   135,000     270,000     270,000     675,000  

The Committee granted Mr. Farley options to purchase 6,540 shares of common stock and 3,400 shares of restricted stock at the beginning of the year when he was Executive Vice President-Operations of the Company’s principal inland marine transportation subsidiary. Then when he was subsequently named President of the

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Company’s principal offshore marine transportation subsidiary, the Committee granted him a three-year cash performance award with a target value of $224,000 to increase his long-term incentive compensation to a level commensurate with his increased responsibilities.

The options vest over a three-year period and the restricted stock vests over a five-year period. The performance awards are based on a three-year performance period beginning January 1, 2009. The target amounts for the performance awards established for the five executive officers were $1,200,000 for Mr. Pyne, $300,000 for Mr. Binion, $264,000 for Mr. Nolen, $264,000 for Mr. Valerius and $122,000 for Mr. Strahan.2012. The percentage of the target award paid at the end of the performance period will be based on the Company’s achievement on a cumulative basis for the three-year period of the objective levels of EBITDA, return on total capital and earnings per share established under its annual incentive plan, with the three factors equally weighted. The officers will be paid the target amount if 100% of the objective performance measures is achieved over the three-year period. The payment can range from zero if less than 80% of the objective performance measures is achieved to a maximum of 200% of the target award for the achievement of 130% or more of the objective performance measures.

The amount and form of the long-term incentive compensation awards, including the specific mix of long-term incentive compensation elements, were based in part on an analysis of market data on the amounts of awards and recommendations on the form of awards provided by the Consultant to the Compensation Committee.

Severance Compensation

Effective on December 30, 2009, Mr. Valerius resigned from his position asChief Executive Vice PresidentOfficer

The Compensation Committee set the base salary for Joseph H. Pyne, the Company’s Chairman of the Board and Chief AdministrativeExecutive Officer, at $790,000 effective April 1, 2012, which resulted in a total salary for 2012 of $772,500, an 8.8% increase over his salary for 2011. The Chief Executive Officer’s base salary was generally based on the same factors and criteria outlined above, which include compensation paid to chief executives of similar corporations, individual as well as corporate performance and a general correlation with the compensation of other executive officers of the Company. In particular, the analysis by the Consultant indicated that Mr. Valerius had served for over 30 years as an executivePyne’s salary was at 87% of the median for comparable companies prior to the increase. In setting the compensation of Mr. Pyne, the Committee also considered the Company’s success in achieving the financial, operational and strategic corporate goals established for each year, as well as the annual evaluation of the Chief Executive Officer’s performance conducted by the Board under the guidance of its Governance Committee. However, neither the achievement of corporate goals, the performance evaluation nor any other particular aspect of Company and a predecessor company. In additionor individual performance is given any specific weighting or tied by any type of formula to hisdecisions on the Chief Executive Officer’s base salary andor long-term incentive compensation awards. The $2,334,224 in non-equity incentive plan compensation shown for Mr. Pyne in the Summary Compensation Table consisted of (1) $745,424 determined under the annual incentive compensationplan described above and (2) a $1,588,800 payment earned by Mr. Pyne for 2009 and his paymentthe 2010-2012 performance period under a three-year performance award granted as part of the Company’s long-term incentive compensation program that was based on the formula for the performance period2007-2009,award that was established by the Compensation Committee approved severance compensation for Mr. Valerius consistingwhen the award was made at the beginning of $1,600,455 in cash, in part in lieu of any rights Mr. Valerius had under performance awards covering the performance periods2010.

2008-2010 and2009-2011, and accelerated vesting of unvested stock options and restricted stock held by Mr. Valerius that were valued at $1,084,166. The Committee determined, based in part on input from the Consultant, that the severance compensation for Mr. Valerius was reasonable in amount when compared to the current market for executives and appropriate in light of Mr. Valerius’ position, experience and long-term contributions to the Company.

Retirement Plans

The Company maintains two primary retirement plans in which the named executive officers are eligible to participate on the same basis as broad categories of employees — a Profit Sharing Plan and a 401(k) Plan. Most of the Company’s shore-based employees are eligible to participate in the Profit Sharing Plan. The aggregate contributions made to the plan by the Company are allocated among the participants according to base salary. All employees of the Company are eligible to participate in the 401(k) Plan, under which the Company will match employee contributions in an amount up to 3% of an employee’s base salary.

The Company maintains an unfunded, nonqualified Deferred Compensation Plan for Key Employees, which is designed primarily to provide additional benefits to eligible employees to restore benefits to which they would be entitled under the Company’s Profit Sharing Plan and 401(k) Plan were it not for certain limits imposed by the

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Internal Revenue Code. The plan is designed to restore benefits for employees being compensated in excess of certain limits ($245,000250,000 per annum for 2009)2012). In 2009,2012, the Committee approved contributions for each participant at the maximum amounts allowed by the Plan.

Perquisites and Personal Benefits

The only perquisites or other personal benefits that the Company provides to the named executive officers are an automobile allowance that is given to approximately 70123 executive and management employees, payment of the cost of club memberships that are used for both business and personal purposes and the payment of a portion of the


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cost of financial planning services provided to fourone of the named executive officers during 2009.2012. The Compensation Committee believes the personal benefits are reasonable in amount and help the Company attract and retain key employees.

Chief Executive OfficerEmployment/Severance Agreements

Except for accelerated vesting of outstanding stock options, restricted stock and performance awards upon a change in control of the Company, there are no special compensation arrangements related to severance or change-in-control events. The Company has no employment agreements with any of its executive officers.

Benchmarking

Information used by the Compensation Committee setto benchmark against comparable companies in determining particular elements of executive compensation has been provided by the 2009 base salaryConsultant. Marketplace analysis developed by the Consultant has been based in part on a reference group of companies selected because they are of a similar size to the Company by various measures including revenue and market capitalization, generate comparable returns on assets, equity and capital and have primary operations in at least one of the same business segments as the Company. In determining competitive market levels for Joseph H. Pyne,the elements of executive compensation, the Consultant used a combination of data on the companies in the reference group and data from published compensation surveys.

The Consultant reevaluated the reference group used for Kirby in 2011 in light of the Company’s Chief Executive Officer, at $680,000, the same as his salary for 2008. The Compensation Committee took into account the uncertain state of the economy and the Company’s emphasis on reduction of costsincreased size after its significant acquisitions in deciding to hold the salary of the Chief Executive Officer for 2009 at the same level as in 2008. The Chief Executive Officer’s base salary was generally based on the same factors and criteria outlined above, which include compensation paid to chief executives of similar corporations, individual2011, as well as corporate performancedevelopments affecting some of the companies in the group. As a result, the Consultant proposed and a general correlationthe Committee approved changes in the composition of the reference group used by the Consultant for the information provided to the Committee in connection with its compensation decisions for 2012 to include the following companies:

ABM Industries IncorporatedOceaneering International, Inc.
Alexander & Baldwin, Inc.Oil States International, Inc.
Bristow Group Inc.Overseas Shipholding Group, Inc.
Cameron International CorporationSEACOR Holdings Inc.
Exterran Holdings, Inc.Superior Energy Services, Inc.
FMC Technologies, Inc.Tidewater Inc.
Helix Energy Solutions Group, Inc.UTi Worldwide Inc.
Key Energy Services, Inc.Waste Connections, Inc.
McDermott International, Inc.Werner Enterprises, Inc.

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Based on the most recent executive compensation review prepared by the Consultant for the Compensation Committee (for which the Consultant removed from the original reference group one company that separated its shipping business from its other business during the year and another company that filed for bankruptcy during the year):

the base salaries of otherthe five named executive officers ranged from 85% to 97% of the Company. In settingmedian for the reference group;

total cash compensation of(salary plus annual incentive compensation) fell between the Chief Executive Officer,median and the Committee also considers the Company’s success in achieving the financial, operational and strategic corporate goals established75th percentile (except for each year, as well as the annual evaluation of the Chief Executive Officer’s performance conducted by the Board under the guidance of its Governance Committee. However, neither the achievement of corporate goals, the performance evaluation nor any other particular aspect of Company or individual performance is given any specific weighting or tied by any type of formula to decisions on the Chief Executive Officer’s base salary or Mr. Farley);

long-term incentive compensation awards. The $1,899,019 in non-equity incentive planranged from 73% to 92% of the median; and

total direct compensation shown for Mr. Pyne inand Mr. Grzebinski was between the Summary Compensation Table consistedmedian and the 75th percentile and for the other three named executive officers ranged from 86% to 99% of (1) $511,632 determined under the annual incentive plan described abovemedian.

Mr. Farley was promoted from Executive Vice President of the Company’s principal inland marine transportation subsidiary to President of the Company’s principal offshore marine transportation subsidiary during the year and (2) a $1,387,387 payment earned by Mr. Pyne for the2007-2009 performance period under a performance award granted as part ofwas also included in the Company’s long-term incentive compensation program thatfor the first time after the beginning of the year. As a result of those circumstances and related compensation adjustments during the year, his total cash compensation was slightly above the 75th percentile for the year and his long-term incentive compensation was below the median for the year.

The Consultant also gathered data on the Company’s financial performance relative to the reference group of comparable companies based on public information. The Company, which is slightly below the formulamedian size of the companies in the reference group, ranked above the median for the reference group, and in most cases above the 80th percentile, for both one-year (2011) and three-year (2009-2011) periods on a broad range of financial performance award thatmeasures, including return on equity, return on assets, return on total capital and growth in revenues and in earnings per share. The only exception was established bythe one-year total shareholder return which was below the median, although the three-year total shareholder return was near the 90th percentile.

Other Compensation Matters

Compensation Related Risk

With the assistance of the Consultant, the Compensation Committee whenundertook a review of the award was made atCompany’s compensation policies and practices and concluded that the beginning of 2007.

Company’s compensation programs do not encourage excessive risk taking and do not present risks that are reasonably likely to have a material adverse effect on the Company.

Tax Considerations

Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public companies for compensation over $1 million paid to the Chief Executive Officer and the three other most highly compensated executive officers other than the Chief Financial Officer. Certain performance-based compensation, however, is specifically exempt from the deduction limit. The Committee does take steps to qualify compensation for deductibility to the extent practical, but may award compensation that is not deductible when such an award would be in the Company’s best interests.

Timing of Compensation Decisions

The Compensation Committee generally makes executive compensation decisions in January of each year. Options have always been granted at an exercise price equal to the fair market value of the Company’s stock on the date of grant. Options granted at the regular January meeting of the Committee, which takes place several days before the Company’s public release of earnings information for the previous year, are granted at an exercise price equal to the fair market value of the Company’s stock on a specified date shortly after the earnings release, in which case the later date is considered the date of grant.

Benchmarking
Information used by the Compensation Committee to benchmark against comparable companies in determining particular elements of executive compensation has been provided by the Consultant. Marketplace analysis developed by the Consultant has been based in part on a reference group of 18 companies selected because they are of a similar size to the Company, have similar business characteristics (such as levels of capital or people intensity, cyclicality and use of technology) and have primary operations in at least one of the same business segments as the Company. In determining competitive market levels for the elements of executive compensation, the Consultant used a combination of data on the companies in the reference group and data from the Mercer 2008 U.S. Benchmark Database for Executives.


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23


The reference group used by the Consultant for the information provided to the Committee in connection with its compensation decisions for 2009 included the following companies:
Horizon Lines International, Inc. Key Energy Services, Inc.
Overseas Shipholding Group, Inc. Superior Energy Services, Inc.
Seacor Holdings Inc. Helix Energy Solutions Group, Inc.
Tidewater Inc. Oceaneering International, Inc.
Hornbeck Offshore Services, Inc. Oil States International, Inc.
GulfMark Offshore, Inc. Alexander & Baldwin, Inc.
Trico Marine Services, Inc. American Commercial Lines Inc.
General Maritime CorporationBristow Group Inc.
Global Industries, Ltd. Werner Enterprises, Inc.
Stock Ownership GuidelinesGuidelines; Hedging

Effective January 1, 2009, the Board established stock ownership guidelines for executive officers and directors of the Company and its subsidiaries. Executive officers must be in compliance within five years after the adoption of the guidelines or five years after becoming an executive officer, whichever is later, but are expected to accumulate the required number of shares ratably over the applicable five-year period. Under the guidelines, the Chief Executive Officer is required to own common stock of the Company having a value equal to four times his base salary. For the other named executive officers, the requirement is three times base salary. The guidelines do not address hedging the economic risk of stock ownership, but the Company’s insider trading policy prohibits employees and directors from engaging in short sales of the Company’s stock or in transactions involving options to buy or sell the Company’s stock (other than stock options granted by the Company). The Governance Committee of the Board will monitor compliance with the guidelines and may recommend modifications or exceptions to the Board.

Compensation Committee Report

The Compensation Committee of the Board of Directors of the Company has reviewed and discussed with management the Compensation Discussion and Analysis in this Proxy Statement. Based on that review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

COMPENSATION COMMITTEE

William M. Lamont, Jr.,Chairman

C. Sean Day

Bob G. Gower

Monte J. Miller

COMPENSATION COMMITTEE
William M. Lamont, Jr.,Chairman
C. Sean Day
Bob G. Gower
Monte J. Miller

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee are, and during 20092012 were, Mr. Lamont, Mr. Day, Mr. Gower and Mr. Miller. None of such persons is or has been an officer or employee of the Company or any of its subsidiaries. In 2009,2012, no executive officer of the Company served on the board of directors or compensation committee of another entity, any of whose executive officers served on the Board or Compensation Committee of the Company.


20

24


Compensation Tables

Summary Compensation Table
                                 
                 Change in
       
                 Pension Value and
       
                 Non-Qualified
       
              Non-Equity
  Deferred
       
        Stock
  Option
  Incentive Plan
  Compensation
  All Other
    
Name and Principal Position
    Salary  Awards(1)  Awards(1)  Compensation(2)  Earnings(3)  Compensation(4)  Total 
 
Joseph H. Pyne  2009  $680,000  $1,090,680  $456,516  $1,899,019  $28,210  $42,735  $4,197,160 
President, Director and  2008   680,000   1,222,380   580,716   2,563,466   33,293   149,978   5,229,833 
Chief Executive Officer  2007   615,600   1,187,640   631,836   2,169,513   11,082   138,145   4,753,816 
Norman W. Nolen  2009   350,000   239,940   100,440   508,498      32,798   1,231,676 
Executive Vice President  2008   350,000   268,920   127,764   701,711      83,058   1,531,453 
and Chief Financial Officer  2007   289,700   259,980   142,488   640,375      69,753   1,402,296 
C. Berdon Lawrence  2009   495,000   472,560   378,432   372,438   83,545   30,028   1,832,003 
Chairman of the Board  2008   495,000   529,620   498,492   685,625   75,252   110,940   2,394,929 
   2007   471,900   519,900   515,052   651,080   36,036   105,858   2,299,826 
Gregory R. Binion  2009   305,000   272,700   114,120   185,104   2,864   20,039   899,827 
President of Kirby  2008   263,750   471,000   316,980   289,761   2,696   54,673   1,398,860 
Inland Marine, LP  2007   210,000   115,560      169,418      44,510   539,488 
Dorman L. Strahan  2009   248,800   110,880   46,404   220,864      28,648   655,596 
President of Kirby  2008   248,800   124,320   59,040   324,775      70,180   827,115 
Engine Systems, Inc.   2007   239,200   133,020   43,632   348,727      76,625   841,204 
Steven P. Valerius  2009   360,209   239,940   100,440   2,167,667   23,148   32,055   2,923,459 
Executive Vice President  2008   361,600   301,080   143,064   798,168   21,780   82,968   1,708,660 
Chief Administrative Officer  2007   347,700   288,840   163,080   768,067      88,326   1,656,013 

Name and Principal Position

    Salary  Stock
Awards(1)
  Option
Awards(1)
  Non-Equity
Incentive Plan
Compensation(2)
  Change in
Pension Value and
Non-Qualified
Deferred
Compensation
Earnings(3)
  All Other
Compensation(4)
  Total 

Joseph H. Pyne

  2012   $772,500   $1,204,920   $648,252   $2,334,224   $46,210   $43,354   $5,049,460  

Chairman of the Board

  2011    710,000    1,212,600    486,792    2,817,297    77,839    162,465    5,466,993  

and Chief Executive Officer

  2010    680,000    1,202,940    497,448    2,446,392    59,596    150,943    5,037,319  

Gregory R. Binion

  2012    445,000    361,500    194,472    725,391    14,553    21,446    1,762,362  

President and Chief Operating Officer

  2011    410,000    329,400    132,228    942,001    19,257    90,506    1,923,392  
  2010    338,750    326,820    135,144    397,659    11,468    80,897    1,290,738  

David W. Grzebinski(5)

  2012    395,000    321,300    172,872    585,103        18,626    1,492,901  

Executive Vice President

  2011    345,000    252,660    101,412    440,254        72,435    1,211,761  

and Chief Financial Officer

  2010    295,096    1,426,798    102,996    344,141        60,682    2,229,713  

William G. Ivey

  2012    342,500    271,140    145,872    232,797        26,678    1,018,987  

President of Kirby Inland Marine, LP

  2011    326,800    240,720    182,880    406,277        77,039    1,233,716  
  2010    305,625    221,340    267,571    361,644        71,769    1,227,949  

James F. Farley

  2012    326,375    234,720    143,172    233,717        22,261    960,245  

President of Kirby Offshore Marine,

  2011    315,500    240,720    170,460    379,341        70,431    1,176,452  

LLC

  2010    307,500    221,340    144,972    361,127        65,974    1,100,913  

(1)The amounts included in the “Stock Awards” and “Option Awards” columns represent the grant date fair value related to restricted stock awards and option grants to the named executive officers, computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 8,9, Stock Award Plans, in the Company’s consolidated financial statements included in the Annual Report onForm 10-K for the year ended December 31, 2009.2012. The actual number of stock awards and options granted in 20092012 is shown in the “Grants of Plan Based Awards During 2009”2012” table.

(2)Amounts include payments under the Company’s annual incentive plan and payments pursuant to three-year performance awards. Both the annual incentive plan and the performance awards are described in more detail in the “Compensation Discussion and Analysis” above. The amount shown for Mr. Valerius for 2009 includes $1,600,455 of severance compensation as explained in “Compensation Discussion and Analysis —Severance Compensation” above.

(3)The amounts for Mr. Pyne reflect the aggregate change during 2009, 20082012, 2011 and 20072010 in the present value of his accumulated benefit under a Deferred Compensation Agreement with Kirby Inland Marine, LP. The amounts for Mr. LawrenceBinion reflect the change in the present value of his accumulated benefits during 2009, 20082012, 2011 and 20072010 under the Kirby Pension Plan. The amounts for Mr. Binion in 2009 and 2008 reflect the change in present value of accumulated benefits during 2009 and 2008 under the Kirby Pension Plan. Mr. Binion’s December 31, 2007 pension value dropped by $2,062 when compared with his December 31, 2006 pension value primarily due to an increase in the discount rate assumption from 5.7% to 6.1%. The amounts for Mr. Valerius in 2009 and 2008 reflect the change in present value of accumulated benefits during 2009 and 2008 from the Kirby Pension Plan and an unfunded defined benefit executive retirement plan (“SERP”) that was assumed in the Company’s acquisition of Hollywood in 1999. Mr. Valerius’ December 31, 2007 pension value dropped by $3,899 when compared with his December 31, 2006 pension value primarily due to an increase in the discount rate assumption from 5.7% to 6.1%. The change in pension value of $3,899 represents a drop in the Kirby Pension Plan benefit of $1,402 and a drop in the SERP benefit of $2,497. Since Mr. Lawrence is past the actuarial normal retirement date, an actuarial increase from the normal retirement age of 65 to his current age has been reflected in an annuity payable increase from $6,436 per month to $8,134 per month as of December 31, 2009. Since Mr. Lawrence’s and Mr. Binion’s benefits in the Kirby Pension Plan and Mr. Valerius’ benefits in both plans were frozen as of December 31, 1999, the changes in present value are due only to changes in assumptions and the passage of time.

(4)

Amounts for 20092012 include an automobile allowance, club memberships, group life insurance, personal travel and personal financial planning services and a service award for Mr. Pyne, an automobile allowance, club memberships and group life insurance and personal financial planning services for Mr. Nolen, Mr. StrahanBinion and Mr. ValeriusIvey and an automobile allowance and group life insurance and club memberships for Mr. LawrenceGrzebinski and Mr. Binion.Farley. Amounts


21


for 20082011 include an automobile allowance, club memberships, group life insurance and personal financial planning services for Mr. Pyne, Mr. Nolen, Mr. Strahan and Mr. Valerius, an automobile allowance, group life insurance and club memberships for Mr. LawrenceBinion, Mr. Grzebinski and Mr. Ivey and an automobile allowance and group life insurance for Mr. Binion.Farley. Amounts for 20072010 include an automobile allowance, club memberships, group life insurance, personal financial planning services and a service award for Mr. Strahan, an automobile allowance, club memberships, group life insurance and personal financial planning services for Mr. Pyne, Mr. Nolen, and Mr. Valerius, an automobile allowance, group life insurance and club memberships for Mr. LawrenceBinion, Mr. Grzebinski and Mr. Ivey and an automobile allowance and group life insurance for Mr. Binion.Farley. The Company’s contributions under the Company’s Profit Sharing Plan and Deferred Compensation Plan for Key Employees for 2009,2012, which would otherwise be included in this column, have not been determined as of the date of this Proxy Statement. For 2008,2011, the Company’s contributions under the Profit Sharing Plan were as follows: $17,338$17,792 to Mr. Pyne, $22,338 to Mr. Nolen, $22,988 to Mr. Lawrence, $24,344$26,405 to Mr. Binion, $18,985$27,730 to Mr. Strahan and $17,338Grzebinski, $17,793 to Mr. Valerius.Ivey and $22,556 to Mr. Farley. Also, cash distributions were made in 20092012 for excess benefit contributions in 20082011 under the Profit Sharing Plan as

25


follows: $16,087$18,387 to Mr. Pyne, $11,087 to Mr. Nolen, $10,437 to Mr. Lawrence, $9,081$9,826 to Mr. Binion, $21,452$8,501 to Mr. Strahan and $16,087Grzebinski, $18,438 to Mr. Valerius.Ivey and $13,675 to Mr. Farley. For 2008,2011, the Company’s contributions under the Deferred Compensation Plan for Key Employees were as follows: $78,885$82,724 to Mr. Pyne, $21,036 to Mr. Nolen, $46,455 to Mr. Lawrence, $5,916$29,354 to Mr. Binion, $3,869$17,790 to Mr. Strahan and $23,069Grzebinski, $14,552 to Mr. Valerius.Ivey and $12,186 to Mr. Farley.

(5)Mr. Grzebinski became an employee of the Company in February 2010. He has served as Executive Vice President and Chief Financial Officer since March 2010.

Grants of Plan Based Awards During 20092012

                                         
              All Other
  All Other
             
              Stock
  Option
     Grant Date
       
              Awards:
  Awards:
  Exercise
  Fair Value
       
     Estimated Future Payouts
  Number of
  Number of
  Price of
  of Stock
       
     Under Non-Equity Incentive
  Shares of
  Securities
  Option
  and
       
  Grant
  Plan Awards(1)  Stock or
  Underlying
  Awards
  Option
       
Name
 Date  Threshold  Target  Maximum  Units(2)  Options(3)  ($/sh)(4)  Awards(5)       
 
Joseph H. Pyne  01/26/09  $240,000  $1,200,000  $2,400,000                         
   01/26/09               44,166          $1,090,680         
   01/30/09                   65,402  $23.98   456,516         
Norman W. Nolen  01/26/09   52,800   264,000   528,000                         
   01/26/09               9,717           239,940         
   01/30/09                   14,388   23.98   100,440         
                                         
C. Berdon Lawrence  01/26/09               19,136           472,560         
   01/30/09                   54,219   23.98   378,432         
Gregory R. Binion  01/26/09   60,000   300,000   600,000                         
   01/26/09               11,042           272,700         
   01/30/09                   16,350   23.98   114,120         
                                         
Dorman L. Strahan  01/26/09   24,400   122,000   244,000                         
   01/26/09               4,491           110,880         
   01/30/09                   6,649   23.98   46,404         
Steven P. Valerius  01/26/09   52,800   264,000   528,000                         
   01/26/09               9,717           239,940         
   01/30/09                   14,388   23.98   100,440         

  Grant
Date
  Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)
  All Other
Stock
Awards:

Number of
Shares of
Stock or
Units(2)
  All Other
Option
Awards:

Number of
Securities
Underlying
Options(3)
  Exercise
Price of
Option
Awards
($/sh)(4)
  Grant Date
Fair Value
of Stock
and
Option
Awards(5)
 

Name

  Threshold  Target  Maximum     

Joseph H. Pyne

  02/15/12   $240,000   $1,200,000   $2,400,000      
  02/15/12       18,382     $1,204,920  
  02/15/12        30,193   $65.28    648,252  

Gregory R. Binion

  02/15/12    72,000    360,000    720,000      
  02/15/12       5,515      361,500  
  02/15/12        9,058    65.28    194,472  

David W. Grzebinski

  02/15/12    64,000    320,000    640,000      
  02/15/12       4,902      321,300  
  02/15/12        8,052    65.28    172,872  

William G. Ivey

  02/15/12    54,000    270,000    540,000      
  02/15/12       4,136      271,140  
  02/15/12        6,794    65.28    145,872  

James F. Farley

  02/15/12    44,800    224,000    448,000      
  01/23/12       3,400      234,720  
  02/06/12        6,540    66.72    143,172  

(1)Amounts shown represent long-term performance awards made to five of the six named executive officers in 20092012 for the2009-2011 2012-2014 performance period under the Company’s long-term incentive compensation program. The performance awards are based on a three-year performance period beginning January 1, 2009.2012. The percentage of the target award paid at the end of the performance period will be based on the achievement by the Company (in the case of Mr. Pyne, Mr. NolenBinion and Mr. Valerius)Grzebinski) or by the Company and its business groups (in the case of Mr. BinionIvey and Mr. Strahan)Farley) on a cumulative basis for the three-year performance period of the objective levels of EBITDA, return on total capital and earnings per share established under the Company’s annual incentive plan. The threshold amount is payable if 80% of the performance target is achieved and the maximum amount is payable if 130% or more of the performance target is achieved; if less than 80% is achieved, there is no payment. For 2009,2012, the first year of the performance period, the Company and its business groups achieved approximately81-98% 66-121%, of the target performance measures (depending on the weighting for


22


the different participants), but any payout to the participating executive officers cannot be determined until the remaining two years of the performance period are completed.

(2)Represents the number of shares of restricted stock awarded in 2009 for restricted stock awards2012 under the Company’s 2005 Stock and Incentive Plan. The restricted stock awards vestvests 20% on January 24th of each year following the original award date.dates.

(3)Represents the number of stock options awarded in 20092012 under the Company’s 2005 Stock and Incentive Plan. These options become exercisable one-third exercisable after one year, two-thirds exercisable after two years, and are fully exercisable after three years from the date of grant. The exercise price for the options may be paid with shares of common stock owned for at least six months. No stock appreciation rights were granted with the stock options.

26


(4)The exercise price per share is equal to the closing price per share of the Company’s common stock on the date of grant.

(5)The grant date fair values are calculated based in accordance with FASB ASC Topic 718. Restricted shares are valued at the average of the high and low prices of the Company’s common stock on the date of grant, resulting in a fair value of $24.695$69.03 and $65.55 per share on January 26, 2009.23, 2012 and February 15, 2012, respectively. The Black-Scholes option pricing model is used to determine the fair value of stock options, resulting in a value of $6.98$21.89 and $21.47 per share on January 30, 2009.February 6, 2012 and February 15, 2012, respectively.

Outstanding Equity Awards at December 31, 20092012

                         
  Option Awards  Stock Awards 
  Number of
  Number of
             
  Securities
  Securities
        Number of
  Market Value of
 
  Underlying
  Underlying
        Shares or Units
  Shares or Units
 
  Unexercised
  Unexercised
  Option
  Option
  of Stock That
  of Stock That
 
  Options
  Options
  Exercise
  Expiration
  Have Not
  Have Not
 
Name
 Exercisable  Unexercisable(1)  Price  Date  Vested(2)  Vested(3) 
 
Joseph H. Pyne  24,536     $27.60   02/15/11   108,351  $3,773,865 
   19,629   19,629  $35.66   01/26/12         
   15,674   31,348  $48.00   02/08/13         
      65,402  $23.98   01/30/14         
Norman W. Nolen  8,853   4,427  $35.66   01/26/12   24,037  $837,209 
   3,448   6,897  $48.00   02/08/13         
      14,388  $23.98   01/30/14         
C. Berdon Lawrence  32,000   16,000  $35.66   01/26/12   47,242  $1,645,439 
   13,454   26,910  $48.00   02/08/13         
      54,219  $23.98   01/30/14         
Gregory R. Binion  3,333   6,667  $48.65   02/01/13   26,562  $925,154 
   6,666   13,334  $34.40   11/03/13         
      16,350  $23.98   01/30/14         
Dorman L. Strahan  4,200     $22.05   03/02/10   10,085  $351,261 
   4,200     $27.60   02/15/11         
   2,666   1,334  $36.94   02/15/12         
   1,593   3,188  $48.00   02/08/13         
      6,649  $23.98   01/30/14         
Steven P. Valerius(4)  19,000     $27.60   01/29/10     $ 
   15,200     $35.66   01/29/10         
   11,583     $48.00   01/29/10         
   14,388     $23.98   01/29/10         


23


   Option Awards   Stock Awards 

Name

  Number of
Securities
Underlying
Unexercised
Options
Exercisable
   Number of
Securities
Underlying
Unexercised
Options
Unexercisable(1)
   Option
Exercise
Price
   Option
Expiration
Date
   Number of
Shares or Units
of Stock That
Have Not
Vested(2)
   Market Value of
Shares or Units
of Stock That
Have Not
Vested(3)
 

Joseph H. Pyne

   27,452     13,726    $32.56     02/01/17     83,702    $5,180,317  
   9,804     19,609    $46.74     01/31/18      
        30,193    $65.28     02/15/19      

Gregory R. Binion

   20,000         $34.40     11/03/13     24,321    $1,505,227  
   7,458     3,729    $32.56     02/01/17      
   2,663     5,327    $46.74     01/31/18      
        9,058    $65.28     02/15/19      

David W. Grzebinski

   5,940     2,970    $31.35     02/08/17     13,967    $864,418  
   2,042     4,086    $46.74     01/31/18      
        8,052    $65.28     02/15/19      

William G. Ivey

   6,400         $23.98     01/30/14     17,496     1,082,827  
   8,533     4,267    $32.56     02/01/17      
   3,683     7,367    $46.74     01/31/18      
        6,794    $65.28     02/15/19      

James F. Farley

   8,000     4,000    $32.56     02/01/17     16,760     1,037,276  
   3,433     6,867    $46.74     01/31/18      
        6,540    $66.72     02/06/19      

(1)The unexercisable options held by the named executive officers are exercisable or become exercisable, as follows:
                         
Grant Date
 Vesting Date  Joseph H. Pyne  Norman W. Nolen  C. Berdon Lawrence  Gregory R. Binion  Dorman L. Strahan 
 
01/26/07  01/26/10   19,629   4,427   16,000       
01/30/09  01/30/10   21,800   4,796   18,073   5,450   2,216 
   01/30/11   21,801   4,796   18,073   5,450   2,216 
   01/30/12   21,801   4,796   18,073   5,450   2,217 
02/01/08  02/01/10            3,333    
   02/01/11            3,334    
02/08/08  02/08/10   15,674   3,448   13,455      1,594 
   02/08/11   15,674   3,449   13,455      1,594 
02/15/07  02/15/10               1,334 
11/03/08  11/03/10            6,667    
   11/03/11            6,667    

Grant Date

 Vesting Date  Joseph H. Pyne  Gregory R. Binion  David W. Grzebinski  William G. Ivey  James F. Farley 

02/01/10

  02/01/13    13,726    3,729        4,267    4,000  

02/08/10

  02/08/13            2,970          

01/31/11

  

 

01/31/13

01/31/14

  

  

  

 

9,804

9,805

  

  

  

 

2,663

2,664

  

  

  

 

2,043

2,043

  

  

  

 

3,683

3,684

  

  

  

 

3,433

3,434

  

  

02/06/12

  

 

 

02/06/13

02/06/14

02/06/15

  

  

  

  

 

 


  

  

  

  

 

 


  

  

  

  

 

 


  

  

  

  

 

 


  

  

  

  

 

 

2,180

2,180

2,180

  

  

  

02/15/12

  

 

 

02/15/13

02/15/14

02/15/15

  

  

  

  

 

 

10,064

10,064

10,065

  

  

  

  

 

 

3,019

3,019

3,020

  

  

  

  

 

 

2,684

2,684

2,684

  

  

  

  

 

 

2,264

2,265

2,265

  

  

  

  

 

 


  

  

  

27


(2)The vesting dates of the restricted stock awards for the named executive officers are as follows:
                                                 
     Award Dates 
Name
 Vesting Dates  01/24/05  03/02/05  01/23/06  02/15/06  01/22/07  02/15/07  01/22/07  01/28/08  02/08/08  10/27/08  01/26/09 
 
                                                 
Joseph H. Pyne  01/24/10                     6,579      5,000      8,833 
                                                 
   02/15/10            8,224                       
                                                 
   03/02/10      8,000                             
                                                 
   01/24/11                     6,579      5,000      8,833 
                                                 
   02/15/11            8,224                       
                                                 
   01/24/12                     6,579      5,000      8,833 
                                                 
   01/24/13                           5,000      8,833 
                                                 
   01/24/14                                  8,834 
                                                 
Norman W. Nolen  01/24/10                     1,440      1,100      1,943 
                                                 
   02/15/10            1,800                      
                                                 
   03/02/10      2,000                            
                                                 
   01/24/11                     1,440      1,100      1,943 
                                                 
   02/15/11            1,800                       
                                                 
   01/24/12                     1,440      1,100      1,943 
                                                 
   01/24/13                           1,100      1,944 
                                                 
   01/24/14                                  1,944 
                                                 
C. Berdon Lawrence  01/24/10                     2,880      2,166      3,827 
                                                 
   02/15/10            3,600                      
                                                 
   03/02/10      3,600                            
                                                 
   01/24/11                     2,880      2,166      3,827 
                                                 
   02/15/11            3,600                      
                                                 
   01/24/12                     2,880      2,167      3,827 
                                                 
   01/24/13                           2,167      3,827 
                                                 
   01/24/14                                 3,828 
                                                 
Gregory R. Binion  01/24/10   800      800      640         1,000         2,208 
                                                 
   10/27/10                              1,800    
                                                 
   01/24/11         800      640         1,000         2,208 
                                                 
   10/27/11                              1,800     
                                                 
   01/24/12               640         1,000         2,208 
                                                 
   10/27/12                              1,800    
                                                 
   01/24/13                        1,000         2,209 
                                                 
   10/24/13                              1,800    
                                                 
   01/24/13                                 2,209 
                                                 
Dorman L. Strahan  01/24/10                  720         508      898 
                                                 
   02/15/10            440                      
                                                 
   03/02/10      520                            
                                                 
   01/24/11                  720         508      898 
                                                 
   02/15/11            440                      
                                                 
   01/24/12                  720         509      898 
                                                 
   01/24/13                           509      898 
                                                 
   01/24/14                                 899 


24

Name

 Vesting Dates  01/28/08  02/08/08  10/27/08  01/26/09  01/25/10  02/01/10  02/08/10  01/24/11  01/31/11  01/23/12  02/15/12  TOTAL 

Joseph H. Pyne

  01/24/13        5,000        8,833        7,371            5,135        3,676    30,015  
  01/24/14                8,834        7,371            5,135        3,676    25,016  
  01/24/15                        7,371            5,135        3,676    16,182  
  01/24/16                                    5,135        3,677    8,812  
  01/24/17                                            3,677    3,677  

Gregory R. Binion

  01/24/13    1,000            2,209        2,002            1,395            6,606  
  10/24/13            1,800                                1,103    2,903  
  01/24/14                2,209        2,003            1,395        1,103    6,710  
  01/24/15                        2,003            1,395        1,103    4,501  
  01/24/16                                 1,395        1,103    2,498  
  01/24/17                                            1,103    1,103  

David W. Grzebinski

  01/24/13                            1,595        1,070        980    3,645  
  01/24/14                            1,595        1,070        980    3,645  
  01/24/15                            1,595        1,070        980    3,645  
  01/24/16                                    1,070        981    2,051  
  01/24/17                                            981    981  

William G. Ivey

  01/24/13    1,280            1,920    1,280            1,100            827    6,407  
  01/24/14                1,920    1,280            1,100            827    5,127  
  01/24/15                    1,280            1,100            827    3,207  
  01/24/16                                1,100            827    1,927  
  01/24/17                                   828    828  

James F. Farley

  01/24/13    1,280            1,920    1,280            1,100        680        6,260  
  01/24/14                1,920    1,280            1,100        680        4,980  
  01/24/15                    1,280            1,100        680        3,060  
  01/24/16                                1,100        680        1,780  
  01/24/17                                        680        680  


(3)The market value of the shares of restricted stock that had not vested as of December 31, 20092012 is calculated using the closing price of the Company’s common stock on December 31, 2009,2012, which was $34.83$61.89 per share.
(4)Effective on December 30, 2009, Mr. Valerius resigned from his position as Executive Vice President and Chief Administrative Officer of the Company. As part of Mr. Valerius’ severance compensation, the vesting of his unvested stock options and restricted stock was accelerated to December 30, 2009.

Option Exercises and Stock Vested During 20092012

                 
  Option Awards  Stock Awards 
  Number of Shares
     Number of Shares
    
  Acquired on
  Value Realized
  Acquired on
  Value Realized
 
Name
 Exercise  on Exercise(1)  Vesting  on Vesting(2) 
 
Joseph H. Pyne    $   37,803  $894,240 
Norman W. Nolen  16,602   126,148   8,814   208,093 
C. Berdon Lawrence  20,000   96,150   12,246   284,829 
Gregory R. Binion        5,340   151,392 
Dorman L. Strahan        2,898   69,106 
Steven P. Valerius        35,477   1,150,141 

   Option Awards   Stock Awards 

Name

  Number of Shares
Acquired on
Exercise
   Value Realized
on Exercise(1)
   Number of Shares
Acquired on
Vesting
   Value Realized
on Vesting(2)
 

Joseph H. Pyne

   112,424    $2,624,288     32,917    $2,221,898  

Gregory R. Binion

   26,350     702,642     9,045     592,502  

David W. Grzebinski

             26,113     1,702,364  

William G. Ivey

   12,800     119,168     6,860     463,050  

James F. Farley

   30,000     707,880     6,860     463,050  

(1)Based on the average of the high and low pricesclosing price of the Company’s common stock on the date of exercise.

(2)Based on the average of the high and low pricesclosing price of the Company’s common stock on the date of vesting.

28


Pension Benefits

           
    Years of
  Present Value of
 
    Credited
  Accumulated
 
Name
 Plan Name Service  Benefit 
 
Joseph H. Pyne Kirby Inland Marine LP —    $475,785 
  Deferred Compensation Plan(1)        
C. Berdon Lawrence Kirby Pension Plan(2)  29   1,041,400 
Gregory R. Binion Kirby Pension Plan(2)  11   48,311 
Steven P. Valerius Kirby Pension Plan(2)  21   140,394 
  Supplemental Executive  21   250,021 
  Retirement Plan(3)        

Name

  Plan Name Years of
Credited
Service
   Present
Value of
Accumulated
Benefit
 

Joseph H. Pyne

  Kirby Inland Marine LP —
Deferred Compensation Plan(1)
      $659,430  

Gregory R. Binion

  Kirby Pension Plan(2)  11     93,589  

(1)Kirby Inland Marine, LP has an unfunded Deferred Compensation Agreement with Mr. Pyne in connection with his previous employment as its President. Mr. Pyne has enough years of service to qualify for the maximum payment of $4,175 per month under the agreement. The agreement provides for benefits to Mr. Pyne of $4,175 per month commencing upon the later of his severance from the employment of the Company or his 65th birthday and continuing until the month of his death. If Mr. Pyne should die prior to receiving such deferred compensation, the agreement provides for monthly payments to his beneficiary for a period of not less than 60 nor more than 120 months, depending on the circumstances. The agreement also provides that no benefits will be paid if Mr. Pyne is terminated for a “wrongful action” (as defined in the agreement).

(2)The Company sponsors a defined benefit plan, the Kirby Pension Plan, for vessel personnel and shore based tankermen employed by certain subsidiaries of the Company. Shoreside personnel employed by Hollywood prior to its merger with a subsidiary of the Company in 1999, including Mr. Lawrence, Mr. Binion, and Mr. Valerius, also are participants in the Kirby Pension Plan, but ceased to accrue additional benefits effective December 31, 1999. The Company contributes such amounts as are necessary on an actuarial basis to provide the Kirby Pension Plan with assets sufficient to meet the benefits paid to participants.
(3)The Company also has an unfunded SERP that was assumed in the Hollywood acquisition in which Mr. Valerius is a participant. That plan ceased to accrue additional benefits effective December 31, 1999.


25


Nonqualified Deferred Compensation
             
  Registrant
       
  Contributions in
  Aggregate
  Aggregate
 
  Last Fiscal
  Earnings in
  Balance at
 
Name
 Year(1)  Last Fiscal Year(2)  Last Fiscal Year End 
 
Joseph H. Pyne $  $213,258  $1,362,970 
Norman W. Nolen     23,756   118,349 
C. Berdon Lawrence     80,996   393,199 
Gregory R. Binion     967   6,883 
Dorman L. Strahan     1,259   7,397 
Steven P. Valerius     51,874   430,619 

Name

  Registrant
Contributions in
Last Fiscal
Year(1)
   Aggregate
Earnings in
Last Fiscal Year(2)
   Aggregate
Balance at
Last Fiscal Year End
 

Joseph H. Pyne

  $    $202,321    $2,081,369  

Gregory R. Binion

        6,447     71,715  

David W. Grzebinski

        2,188     28,259  

William G. Ivey

        18,450     170,445  

James F. Farley

        6,794     66,187  

(1)The Company has an unfunded, nonqualified Deferred Compensation Plan for Key Employees which was adopted in October 1994, effective January 1, 1992. The Plan is designed primarily to provide additional benefits to eligible employees to restore benefits to which they would be entitled under the Company’s Profit Sharing Plan and 401(k) Plan were it not for certain limits imposed by the Internal Revenue Code. The benefits under the Deferred Compensation Plan are designed to restore benefits for employees with base salary in excess of a certain level ($245,000250,000 for 2009)2012). Contributions for 2009,2012, which would otherwise be included in this column, have not been determined as of the date of this Proxy Statement. For 2008,2011, the Company’s contributions under the Deferred Compensation Plan for Key Employees were as follows: $78,885$82,724 to Mr. Pyne, $21,036 to Mr. Nolen, $46,455 to Mr. Lawrence, $5,916$29,354 to Mr. Binion, $3,869$17,790 to Mr. Strahan and $23,069Grzebinski, $14,552 to Mr. Valerius.Ivey and $12,186 to Mr. Farley.

(2)Earnings on deferred compensation under the Deferred Compensation Plan for Key Employees are calculated in the same manner and at the same rate as earnings on externally managed investments of salaried employees participating in the Company’s Profit Sharing Plan.

29


Equity Compensation Plan Information as of December 31, 20092012

             
        Number of Securities
 
        Remaining Available
 
        for Future Issuance
 
  Number of
     Under Equity
 
  Securities to be
     Compensation Plans
 
  Issued Upon
  Weighted-Average
  (Excluding Securities
 
  Exercise of
  Exercise Price of
  Reflected in First
 
Plan Category
 Outstanding Options  Outstanding Options  Column) 
 
Equity compensation plans approved by stockholders  643,483  $33.29   1,671,510 
Equity compensation plans not approved by stockholders(1)  298,937  $33.65   393,355 
             
Total  942,420  $33.40   2,064,865 
             

Plan Category

  Number of
Securities to be
Issued Upon
Exercise of
Outstanding Options
   Weighted-Average
Exercise Price of
Outstanding Options
   Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(Excluding Securities
Reflected in First
Column)(1)
 

Equity compensation plans approved by stockholders

   351,173    $45.54     2,909,458  

Equity compensation plans not approved by stockholders(2)

   345,938    $45.84     675,535  

Total

   697,111    $45.69     3,584,993  

(1)On April 24, 2012, the stockholders approved a 2,000,000 share increase in the number of shares that may be issued under the 2005 Stock and Incentive Plan and a 500,000 share increase in the number of shares that may be issued under the 2000 Nonemployee Director Stock Plan.

(2)The only plan included in the table that was adopted without stockholder approval was the 2000 Nonemployee Director Stock Option Plan, the material features of which are summarized under “BOARD OF DIRECTORS — Director Compensation.” Subsequent increases in the number of shares that may be issued under that plan were approved by the stockholders in 2008 and 2012.

Potential Payments Upon Change in Control

If a change in control were to have occurred on December 31, 2009,2012, all of the named executive officers’ outstanding options to acquire Company common stock would have become immediately exercisable. The options were granted at a price equal to the fair market value of the Company’s common stock on the date of grant, vest in equal increments over three years and have a term of fiveseven years. Restricted stock awards granted to the named executive officers would have immediately vested. The restricted stock awards vest in equal increments over five years. Performance awards would have been considered earned so that holders of the awards would have been entitled to receive the target performance award the holder could have earned for the proportionate part of the


26


performance period prior to the change in control. The outstanding options would have become immediately exercisable and the restricted stock award and performance awards would have become immediately vested regardless of whether the named executive officer was terminated or voluntarily terminated employment following the change of control. The value of the stock options and restricted stock awards is based on the Company’s closing market price of $34.83$61.89 per share on December 31, 2009, the last trading day before year-end.
2012.

Joseph H. Pyne

Mr. Pyne’s options to purchase an aggregate of 65,40233,335 shares of common stock would have become fully exercisable on December 31, 2009,2012, if a change in control had occurred on that date. Under the terms of Mr. Pyne’s stock options, he would have to pay $1,568,340$1,363,443 to purchase the shares. Accordingly, the maximum value of the accelerated vesting of the 65,40233,335 options would have been $709,612$699,660 ($34.8361.89 per share value on December 31, 2009,2012, multiplied by 65,40233,335 shares minus $1,568,340,$1,363,443, the aggregate exercise price of the options). All of the other options held by Mr. Pyne on December 31, 20092012 have an exercise pricesprice higher than the year end stock price of $34.83.

$61.89.

Mr. Pyne had 108,35183,702 shares of restricted stock that were not vested as of December 31, 2009.2012. If a change of control had occurred on that date, the 108,35183,702 shares would have become fully vested. The maximum value of the accelerated vesting of Mr. Pyne’s restricted stock would have been $3,773,865$5,180,317 ($34.8361.89 per share value on December 31, 2009,2012, multiplied by 108,35183,702 restricted shares).

30


On December 31, 2009,2012, Mr. Pyne would have become entitled to payments under previously granted performance awards totaling $1,220,000$1,324,800 if a change in control had occurred on that date.

Norman W. NolenGregory R. Binion

Mr. Nolen’sBinion’s options to purchase an aggregate of 14,3889,056 shares of common stock would have become fully exercisable on December 31, 2009, if a change in control had occurred on that date. Under the terms of Mr. Nolen’s stock options, he would have to pay $345,024 to purchase the shares. Accordingly, the maximum value of the accelerated vesting of the 14,388 options would have been $156,110 ($34.83 per share value on December 31, 2009, multiplied by 14,388 shares minus $345,024, the aggregate exercise price of the options). All the other options held by Mr. Nolen on December 31, 2009 have exercise prices higher than the year end stock price of $34.83.

Mr. Nolen had 24,037 shares of restricted stock that were not vested as of December 31, 2009. If a change of control had occurred on that date, the 24,037 shares would have become fully vested. The maximum value of the accelerated vesting of Mr. Nolen’s restricted stock would have been $837,209 ($34.83 per share value on December 31, 2009, multiplied by 24,037 restricted shares).
On December 31, 2009, Mr. Nolen would have become entitled to payments under previously granted performance awards totaling $268,400 if a change in control had occurred on that date.
C. Berdon Lawrence
Mr. Lawrence’s options to purchase an aggregate of 54,219 shares of common stock would have become fully exercisable on December 31, 2009, if a change in control had occurred on that date. Under the terms of Mr. Lawrence’s stock options, he would have to pay $1,300,172 to purchase the shares. Accordingly, the maximum value of the accelerated vesting of the 54,219 options would have been $588,276 ($34.83 per share value on December 31, 2009, multiplied by 54,219 shares minus $1,300,172, the aggregate exercise price of the options). All the other options held by Mr. Lawrence on December 31, 2009 have exercise prices higher than the year end stock price of $34.83.
Mr. Lawrence had 47,242 shares of restricted stock that were not vested as of December 31, 2009. If a change of control had occurred on that date, the 47,242 shares would have become fully vested. The maximum value of the accelerated vesting of Mr. Lawrence’s restricted stock would have been $1,645,439 ($34.83 per share value on December 31, 2009, multiplied by 47,242 restricted shares).


27


Gregory R. Binion
Mr. Binion’s options to purchase an aggregate of 29,684 shares of common stock would have become fully exercisable on December 31, 2009,2012, if a change in control had occurred on that date. Under the terms of Mr. Binion’s stock options, he would have to pay $850,763$370,400 to purchase the shares. Accordingly, the maximum value of the accelerated vesting of the 29,6849,056 options would have been $183,131$190,076 ($34.8361.89 per share value on December 31, 2009,2012, multiplied by 29,6849,056 shares minus $850,763,$370,400, the aggregate exercise price of the options). All the other options held by Mr. Binion on December 31, 20092012 have an exercise pricesprice higher than the year end stock price of $34.83.
$61.89.

Mr. Binion had 26,56224,321 shares of restricted stock that were not vested as of December 31, 2009.2012. If a change of control had occurred on that date, the 26,56224,321 shares would have become fully vested. The maximum value of the accelerated vesting of Mr. Binion’s restricted stock would have been $925,154$1,505,227 ($34.8361.89 per share value on December 31, 2009,2012, multiplied by 26,56224,321 restricted shares).

On December 31, 2009,2012, Mr. Binion would have become entitled to payments under previously granted performance awards totaling $95,600$370,739 if a change in control had occurred on that date.

Dorman L. StrahanDavid W. Grzebinski

Mr. Strahan’sGrzebinski’s options to purchase an aggregate of 6,6497,056 shares of common stock would have become fully exercisable on December 31, 2009,2012, if a change in control had occurred on that date. Under the terms of Mr. Strahan’sGrzebinski’s stock options, he would have to pay $159,443$284,089 to purchase the shares. Accordingly, the maximum value of the accelerated vesting of the 6,6497,056 options would have been $72,142$152,607 ($34.8361.89 per share value on December 31, 2009,2012, multiplied by 6,6497,056 shares minus $159,443,$284,089, the aggregate exercise price of the options). All the other options held by Mr. StrahanGrzebinski on December 31, 20092012 have an exercise pricesprice higher than the year end stock price of $34.83.

$61.89.

Mr. StrahanGrzebinski had 10,08513,967 shares of restricted stock that were not vested as of December 31, 2009.2012. If a change of control had occurred on that date, the 10,08513,967 shares would have become fully vested. The maximum value of the accelerated vesting of Mr. Strahan’sGrzebinski’s restricted stock would have been $351,261$864,418 ($34.8361.89 per share value on December 31, 2009,2012, multiplied by 10,08513,967 restricted shares).

On December 31, 2009,2012, Mr. StrahanGrzebinski would have become entitled to payments under previously granted performance awards totaling $94,754$298,306 if a change in control had occurred on that date.

Compensation Related RiskWilliam G. Ivey

With

Mr. Ivey’s options to purchase an aggregate of 11,634 shares of common stock would have become fully exercisable on December 31, 2012, if a change in control had occurred on that date. Under the assistanceterms of Mr. Ivey’s stock options, he would have to pay $483,267 to purchase the shares. Accordingly, the maximum value of the Consultant, the Compensation Committee undertook a reviewaccelerated vesting of the Company’s compensation policies and practices and concluded11,634 options would have been $236,761 ($61.89 per share value on December 31, 2012, multiplied by 11,634 shares minus $483,267, the aggregate exercise price of the options). All other options held by Mr. Ivey on December 31, 2012 have an exercise price higher than the year end stock price of $61.89.

Mr. Ivey had 17,496 shares of restricted stock that were not vested as of December 31, 2012. If a change of control had occurred on that date, the Company’s compensation programs do17,496 shares would have become fully vested. The maximum value of the accelerated vesting of Mr. Ivey’s restricted stock would have been $1,082,827 ($61.89 per share value on December 31, 2012, multiplied by 17,496 restricted shares).

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On December 31, 2012, Mr. Ivey would have become entitled to payments under previously granted performance awards totaling $88,740 if a change in control had occurred on that date.

James F. Farley

Mr. Farley’s options to purchase an aggregate of 10,867 shares of common stock would have become fully exercisable on December 31, 2012, if a change in control had occurred on that date. Under the terms of Mr. Farley’s stock options, he would have to pay $451,204 to purchase the shares. Accordingly, the maximum value of the accelerated vesting of the 10,867 options would have been $221,355 ($61.89 per share value on December 31, 2012, multiplied by 10,867 shares minus $451,204, the aggregate exercise price of the options). All other options held by Mr. Farley on December 31, 2012 have an exercise price higher than the year end stock price of $61.89.

Mr. Farley had 16,760 shares of restricted stock that were not encourage excessive risk taking and do not present risksvested as of December 31, 2012. If a change of control had occurred on that are reasonably likelydate, the 16,760 shares would have become fully vested. The maximum value of the accelerated vesting of Mr. Farley’s restricted stock would have been $1,037,276 ($61.89 per share value on December 31, 2012, multiplied by 16,760 restricted shares).

On December 31, 2012, Mr. Farley would have become entitled to havepayments under previously granted performance awards totaling $56,075 if a material adverse effectchange in control had occurred on the Company.

that date.

AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors of the Company is responsible for monitoring the integrity of the Company’s financial reporting, accounting procedures and internal controls. The Audit Committee is composed of four directors, all of whom are independent within the meaning of SEC and NYSE rules. The Audit Committee operates under a written charter adopted by the Board.

Management is primarily responsible for the Company’s financial reporting process and internal controls. The Company’s independent auditors are responsible for performing an audit of the Company’s financial statements and issuing a report on the conformity of the financial statements with generally accepted accounting principles. The Company’s independent auditors are also responsible for performing an audit of the Company’s internal control over financial reporting. The Audit Committee is responsible for overseeing those processes.

The Audit Committee has reviewed and discussed the audited financial statements of the Company for the year ended December 31, 20092012 with management and the independent auditors. The Audit Committee also (a) discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 114,61, as


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amended and as adopted by the Public Company Accounting Oversight Board (the “PCAOB”), in Rule 3200T, (b) received the written disclosures and letter from the independent auditors required by the applicable requirements of the PCAOB regarding the independent auditors’ communications with the Audit Committee concerning independence and (c) discussed with the independent auditors their independence.

Based on the Audit Committee’s review of the audited financial statements for the year ended December 31, 20092012 and the Audit Committee’s discussions with management and the independent auditors, the Audit Committee recommended to the Board of Directors of the Company that the audited financial statements be included in the Company’s Annual Report onForm 10-K for the year ended December 31, 2009,2012, which has been filed with the Securities and Exchange Commission.

AUDIT COMMITTEE
Bob G. Gower,Chairman
David L. Lemmon
George A. Peterkin, Jr.
Richard R. Stewart
REAPPROVAL OF THE MATERIAL TERMS OF THE PERFORMANCE OBJECTIVES UNDER THE 2005 STOCK AND INCENTIVE PLAN (ITEM 2)
The Company is asking stockholders to reapprove the material terms of the performance objectives that may be established for performance awards granted under the Company’s 2005 Stock and Incentive Plan, as amended to date (the “2005 Plan”). The approval is necessary to preserve the Company’s federal income tax deduction for performance-based compensation paid to certain executive officers under section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the “Code”).
The Board of Directors of the Company unanimously recommends that you vote “FOR” the reapproval of the material terms of the performance objectives under the 2005 Plan.
Background
Section 162(m) imposes an annual deduction limit of $1 million on the amount of compensation paid to each of the Chief Executive Officer and the three other most highly compensated officers of the Company other than the Chief Financial Officer. The deduction limit does not apply to performance-based compensation that satisfies the requirements of Section 162(m). The 2005 Plan was adopted by the Board of Directors and originally approved by stockholders in 2005. One of the requirements of Section 162(m) for performance-based compensation is that the material terms of the performance objectives under the 2005 Plan be reapproved by the Company’s stockholders every five years. The material terms include (1) the employees eligible to receive compensation under the 2005 Plan, (2) the business criteria on which the performance objectives may be based and (3) the maximum amount of cash that may be paid to any participant in the 2005 Plan pursuant to a performance award in any calendar year. Employees of the Company or its subsidiaries are eligible to receive awards under the 2005 Plan. Performance awards granted under the 2005 Plan may be payable in cash, stock or a combination and are subject to the achievement of one or more performance objectives established by the Compensation Committee of the Board of Directors of the Company. The performance objectives must be based on earnings, cash flow, economic value added, total stockholder return, return on equity, return on capital, return on assets, revenues, operating profit, EBITDA, net profit, earnings per share, stock price, cost reduction goals, debt to capital ratio, financial return ratios, profit or operating margins, working capital or other comparable objective tests selected by the Compensation Committee, or any combination of those measures, for the Company as a whole or for one or more of its subsidiaries or other business units. The 2005 Plan provides that the maximum amount of cash that may be paid to any participant in the Plan pursuant to any performance award during any calendar year is $3,000,000.
The material terms of the performance objectives that stockholders are being asked to approve are unchanged from those previously approved by stockholders. There are no amendments to the 2005 Plan proposed for this Annual Meeting.


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The following table shows the target values of annual incentive compensation awards for 2010 and cash performance awards covering three-year performance periods ending in 2010 or later made to the named executive officers and the identified groups under the 2005 Plan. The actual payments under the awards cannot be determined until the end of 2010 or the end of the three-year performance periods, as the case may be, when the Company’s achievement of the performance objectives for the awards can be measured and each officer’s eligibility for a payment under the terms of the annual incentive plan and the 2005 Plan can be determined.
                 
  Annual
          
  Incentive
          
  Compensation
  Three-Year Performance Awards 
Name
 2010  2008-10  2009-11  2010-12 
 
Joseph H. Pyne $612,000  $1,200,000  $1,200,000  $1,200,000 
Norman W. Nolen  245,000   264,000   264,000    
C. Berdon Lawrence  445,500          
Gregory R. Binion  237,000      300,000   326,000 
Dorman L. Strahan  178,500   122,000   122,000   126,000 
All current executive officers as a group  2,389,856   1,586,000   1,886,000   1,902,000 
All employees (other than executive officers) as a group  9,535,748          
Non-officer directors as a group            
A total of 3,000,000 shares of common stock may be issued under the 2005 Plan, of which a total of 1,309,151 remain available for future awards. The terms of options and restricted stock granted under the 2005 Plan are described in the “Compensation Discussion and Analysis” above. The following table shows the number of shares of common stock subject to option and restricted stock grants that have been awarded to the named executive officers and the identified groups under the 2005 Plan since its inception.
         
  Shares
  Shares of
 
Name
 Subject to Options  Restricted Stock 
 
Joseph H. Pyne  286,096   180,033 
Norman W. Nolen  54,613   31,417 
C. Berdon Lawrence  202,583   62,368 
Gregory R. Binion  57,537   38,254 
Dorman L. Strahan  23,954   16,703 
Steven P. Valerius  33,388   33,875 
All current executive officers as a group  682,143   422,522 
All employees (other than executive officers) as a group  148,988   437,196 
Non-officer directors as a group      
The amounts of future cash or equity awards that may be made to officers of the Company under the 2005 Plan are not determinable at this time, since any such awards are made in the discretion of the Compensation Committee. Nonemployee directors are not eligible for awards under the 2005 Plan.
Summary of the 2005 Plan
The material features of the 2005 Plan are discussed below. The discussion is subject to, and is qualified in its entirety by, the full text of the 2005 Plan, which is attached as Exhibit A to this Proxy Statement.
General
Purpose
The purpose of the 2005 Plan is to advance the interests of the Company by providing an additional incentive to attract and retain qualified and competent employees for the Company and its subsidiaries, upon whose efforts and


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judgment the success of the Company is largely dependent, through the award of options to purchase shares of common stock, shares of restricted stock and performance awards.
Eligibility
Employees of the Company and its subsidiaries are eligible to participate in the 2005 Plan.
Types of Awards
The 2005 Plan authorizes the granting of incentive stock options (“Incentive Options”) and nonincentive stock options (“Nonincentive Options”) to purchase common stock of the Company to employees of the Company. Unless the context otherwise requires, the term “Options” includes both Incentive Options and Nonincentive Options.
The 2005 Plan also authorizes awards of restricted stock (“Restricted Stock”). The vesting and number of shares of a Restricted Stock award may be conditioned upon one or a combination of:
• the completion of a specified period of service with the Company;AUDIT COMMITTEE
Bob G. Gower,Chairman
• the attainment of goals related to the performance of the Company or a division, department or unit of the Company;Richard J. Alario
David L. Lemmon
• the performance of the Company’s common stock; or
• the performance of the recipient of the Restricted Stock award.Richard R. Stewart
The 2005 Plan also authorizes awards intended to be “performance-based compensation” which are payable in stock, cash or a combination of stock and cash (“Performance Awards”). Any Performance Awards granted will vest upon the achievement of performance objectives. The Compensation Committee establishes the performance objectives, the length of the performance period and the form and time of payment of the award.
Administration
The 2005 Plan is administered by the Compensation Committee. The Compensation Committee has the authority to interpret and adopt rules and regulations for carrying out the 2005 Plan.
Shares of Common Stock Subject to the 2005 Plan
A total of 3,000,000 shares of common stock (subject to adjustment as discussed below) may be issued under the 2005 Plan.
Exercise Price of Options
The exercise price of Options granted under the 2005 Plan shall be any price determined by the Compensation Committee, but may not be less than the fair market value of the common stock on the date of grant. The exercise price of Incentive Options shall not be less than 110% of the fair market value on the date of grant if the optionee owns, directly or indirectly, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company.
Price of Restricted Stock
The price, if any, to be paid by a recipient for Restricted Stock awarded under the 2005 Plan shall be determined by the Compensation Committee.
Restrictions on Transfer of Awards
No award granted under the 2005 Plan is transferable otherwise than by will or by the laws of descent and distribution. During the lifetime of a participant, each award will be exercisable only by the participant or the guardian or legal representative of the participant.


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Restrictions on Transfer of Restricted Stock
A participant may not sell, transfer, assign or pledge shares of Restricted Stock until the shares have vested.
Exercisability of Options
In granting Options, the Compensation Committee, in its sole discretion, may determine the terms and conditions under which the Options shall be exercisable.
The Compensation Committee also has the right, exercisable in its sole discretion, to accelerate the date on which all or any portion of an Option may be exercised or otherwise waive or amend any conditions in respect of all or a portion of the Options held by an optionee.
In the event of a Change in Control (as defined in the 2005 Plan), all Options outstanding at the time of the Change in Control will become immediately exercisable unless otherwise provided in the option agreement. In the event of a merger, consolidation or other reorganization of the Company in which the Company is not the surviving entity, the Compensation Committee may provide for payment of cash or securities of the Company in satisfaction of the Options.
Vesting of Restricted Stock
In granting Restricted Stock awards, the Compensation Committee, in its sole discretion, may determine the terms and conditions under which the Restricted Stock awards shall vest.
The Compensation Committee also has the right, exercisable in its sole discretion, to accelerate the date on which Restricted Stock may vest or otherwise waive or amend any conditions in respect of a grant of Restricted Stock.
In the event of a Change in Control, all shares of Restricted Stock will vest unless the restricted stock agreement with the recipient specifies otherwise.
Terms of Performance Awards
In granting performance awards, the Compensation Committee may determine the target and maximum value of the performance award and the date or dates when performance awards are earned. However, for performance awards granted to the chief executive officer or the three most highly compensated officers of the Company other than the chief executive officer and the chief financial officer, the Compensation Committee may not grant performance awards after the earlier of:
• 90 days after the beginning of the performance period;
• the date on which 25% of the performance period has elapsed; or
• the date on which the satisfaction of the performance objectives becomes substantially certain.
Expiration of Options
The expiration date of an Option is determined by the Compensation Committee at the time of the grant. If an optionee’s employment is terminated for cause, any Options held by the optionee terminate automatically and without notice. The 2005 Plan further provides that in most instances an Option must be exercised by the optionee within 30 days after the termination of an optionee’s employment with the Company (for any reason other than termination for cause, mental or physical disability or death), if and to the extent such Option was exercisable on the date of such termination.
Expiration of Restricted Stock Awards
The requirements for vesting of Restricted Stock are determined by the Compensation Committee at the time of the grant. If an employee’s employment is terminated before all of the Restricted Stock held by the employee has vested, the shares of Restricted Stock that have not vested shall be forfeited and any purchase price paid by the


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employee for the forfeited shares shall be returned to the employee. If other conditions to the vesting of Restricted Stock have not been satisfied prior to any deadline for the satisfaction of the conditions established by the Compensation Committee, the shares of Restricted Stock shall be forfeited and any purchase price paid by the employee shall be returned to the employee.
Expiration of Performance Awards
The performance periods are determined by the Compensation Committee at the time of grant. If a participant’s employment is terminated due to death, disability or retirement before the end of a performance period, a proportional portion of the performance award, to the extent earned as a result of the full or partial achievement of the performance objectives during the performance period, will be paid after the end of the performance period. If a participant’s employment is terminated for any other reason, the participant shall not be entitled to any part of the performance award.
Term of the 2005 Plan
The 2005 Plan is of unlimited duration. However, no Incentive Options shall be granted on or after the tenth anniversary of the effective date of the 2005 Plan.
Adjustments
The 2005 Plan gives the Compensation Committee authority to make appropriate adjustments to the number of shares with respect to which Options may be granted, to the number of shares subject to outstanding Options and to the exercise price of outstanding Options in the event of a change in the capitalization of the Company, a distribution to stockholders other than regular cash dividends, a recapitalization resulting in asplit-up or consolidation of shares or a share repurchase at a price in excess of the market price of the shares at the time the repurchase is announced.
Amendments
The Board may amend or modify the 2005 Plan at any time, subject to stockholder approval if required by applicable law or regulation or by applicable stock exchange rules; provided that the action may not impair the rights of a participant with respect to an outstanding award without the written consent of such participant.
Federal Income Tax Consequences
The following discussion summarizes certain federal income tax consequences of the issuance and receipt of options and awards pursuant to the 2005 Plan under the law as in effect on the date of this Proxy Statement. The rules governing the tax treatment of such options and awards are quite technical, so the following discussion of tax consequences is necessarily general in nature and is not complete. In addition, statutory provisions are subject to change, as are their interpretations, and their application may vary in individual circumstances. This summary does not purport to cover all federal employment tax or other federal tax consequences associated with the 2005 Plan, nor does it address state, local ornon-U.S. taxes.
Grants of Options
Under current tax laws, the grant of an Option will not be a taxable event to the optionee and the Company will not be entitled to a deduction with respect to the grant.
Exercise of Options
Upon the exercise of a Nonincentive Option, an optionee will recognize ordinary income in the year of exercise equal to the excess of the then fair market value of the shares of common stock on the exercise date over the exercise price. The taxable income recognized upon exercise of a Nonincentive Option will be treated as compensation income subject to withholding and, subject to Section 162(m) and the requirement of reasonableness, the Company will be entitled to deduct as a compensation expense an amount equal to the ordinary income an optionee recognizes with respect to such exercise.


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The general rule for Incentive Options is that gain or loss from the sale or exchange of shares acquired on the exercise of an Incentive Option will be treated as capital gain or loss. However, if shares acquired on the exercise of an Incentive Option are disposed of within two years from the date of grant or within one year after exercise (a “disqualifying disposition”), the optionee will recognize ordinary income in the year of the disqualifying disposition equal to the lower of (i) the excess of the amount realized over the exercise price or (ii) excess of the fair market value of the common stock at the time of the exercise over the exercise price and the Company generally will be entitled to a deduction for the amount of ordinary income recognized by the optionee. In addition, the optionee will recognize on the disqualifying disposition, as long-term or short-term capital gain depending on the length of time the stock was held after the Option was exercised, the amount, if any, by which the amount realized in the disqualifying disposition exceeds the fair market value of the common stock at the time of the exercise. If, however, the sales price is less than the fair market value at the date of exercise, then the ordinary income recognized by the optionee is generally limited to the excess of the sales price over the option price. In both situations, the Company’s tax deduction is limited to the amount of ordinary income recognized by the optionee. Different consequences apply for an optionee subject to the alternative minimum tax, and special tax rules apply when all or a portion of the exercise price of an Incentive Option is paid by delivery of already owned shares.
Restricted Stock
Unless a recipient who receives Restricted Stock makes an election under Section 83(b) of the Code, the recipient generally is not required to recognize ordinary income on the award of the Restricted Stock. Instead, on the date the shares vest (i.e., become transferable and no longer subject to forfeiture), the recipient will be required to recognize ordinary income in an amount equal to the excess, if any, of the fair market value of the shares on such date over the amount, if any, paid for such shares. If a recipient makes a Section 83(b) election, the recipient will recognize ordinary income on the date the shares are awarded. The amount of ordinary income required to be recognized is an amount equal to the excess, if any, of the fair market value of the shares on the date of award over the amount, if any, paid for such shares. In such case, the recipient will not be required to recognize additional ordinary income when the shares vest.
Performance Awards
Upon payment of a Performance Award in cash, the recipient is required to recognize ordinary income in the amount of the payment. Upon payment of a performance award in shares of common stock, the recipient will be taxed at ordinary income tax rates on the fair market value of the stock received. In both cases, the Company will generally be entitled to a corresponding tax deduction.
Section 162(m) Effect on Deductibility
Section 162(m) generally disallows a tax deduction to publicly held companies for compensation exceeding $1 million paid to certain of the company’s most highly paid executives, subject to an exception that would allow the deduction of certain performance-based compensation. The Options and Performance Awards granted under the 2005 Plan are intended to qualify as performance-based compensation that will not be subject to the $1 million limitation.
Withholding
The Company has the right to reduce the number of shares of common stock deliverable pursuant to the 2005 Plan by an amount having a fair market value equal to the minimum statutory amount necessary to satisfy all federal and state tax withholding requirements or to deduct a corresponding amount from any cash payment to be made pursuant to the 2005 Plan. The Compensation Committee may permit participants to satisfy all or a portion of the minimum statutory withholding requirement by having shares withheld from the award.
Parachute Payments
Under the so-called “golden parachute” provisions of the Code, the accelerated vesting of Options, Restricted Stock, Performance Awards and benefits paid under any other awards in connection with a change of control of a corporation may be required to be valued and taken into account in determining whether participants have received


34


compensatory payments, contingent on the change of control, in excess of certain limits. If those limits are exceeded, a portion of the amounts payable to the participant may be subject to an additional 20% federal tax and may be nondeductible to the Company.
RATIFICATION OF THE AUDIT COMMITTEE’S SELECTION OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM (ITEM 3)(PROPOSAL 2)

The Audit Committee has selected KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2010.2013. KPMG served as the Company’s independent accounting firm for 2009.2012. Although the Audit Committee has the sole authority and responsibility to select and evaluate the performance of the independent accounting firm for the Company, the Board is requesting, as a matter of good corporate governance, that the Company’s stockholders ratify the selection of KPMG for 2010.

2013.

The Board of Directors of the Company unanimously recommends that you vote “FOR” the ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2010.

2013.

Ratification of the selection of KPMG requires the affirmative vote of a majority of the shares represented at the meeting in person or by proxy. If the stockholders do not ratify the selection of KPMG, the Audit Committee will reconsider the selection. However, because of the difficulty and expense of changing independent auditors at this point in the year, the selection of KPMG will probably be continued for 20102013 in the absence of extraordinary reasons for making an immediate change. If the stockholders do ratify the selection of KPMG, the Audit Committee will retain the authority to make a change if warranted in its judgment.

Representatives of KPMG are expected to be present at the 20102013 Annual Meeting of Stockholders, with the opportunity to make a statement if they desire to do so, and are expected to be available to respond to appropriate questions.

Fees Paid to the Independent Registered Public Accounting Firm

The following table sets forth the fees billed by KPMG, the Company’s independent registered public accounting firm, during the last two fiscal years:

         
  2009  2008 
 
Audit Fees $900,000  $900,000 
Audit-Related Fees  110,000   108,936 
Tax Fees  25,000   25,000 
         
TOTAL $1,035,000  $1,033,936 
         

   2012   2011 

Audit Fees

  $1,561,000    $1,777,000  

Audit-Related Fees

   110,000     92,000  

Tax Fees

   96,000     32,000  
  

 

 

   

 

 

 

TOTAL

  $1,767,000    $1,901,000  
  

 

 

   

 

 

 

Audit Feesare fees for professional services rendered by KPMG for the audit of the Company’s annual financial statements, audit of internal control over financial reporting, review of the Company’s quarterly financial statements or services normally provided in connection with statutory or regulatory filings.

Audit-Related Feesare fees for assurance and related services reasonably related to the performance of the audit or review of the Company’s financial statements. Services performed by KPMG in this category consisted of the audit of the Company’s benefit plans.

Tax Feesare fees for professional services rendered by KPMG for tax compliance, tax advice and tax planning. Services performed by KPMG in this category for 20092012 included the review of the Company’s 20082011 federal income tax return.

Each engagement of the independent registered public accounting firm to perform audit or non-audit services must be approved in advance by the Company’s Audit Committee or by its Chairman pursuant to delegated authority.


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ADVISORY VOTE ON EXECUTIVE COMPENSATION (PROPOSAL 3)

The Company is requesting your approval, on a non-binding advisory basis, of the compensation of the Company’s named executive officers as disclosed and discussed under “EXECUTIVE COMPENSATION” on pages 15-24 of this Proxy Statement. We believe that our executive compensation:

is competitive as necessary to attract and retain qualified executives;

is appropriately tied to Company and individual performance;

is designed with both short-term and long-term business objectives of the Company in mind;

does not encourage excessive risk-taking by the Company’s management; and

properly aligns the interests of management with those of the Company’s stockholders.

For those reasons, we are asking you to approve the following resolution:

RESOLVED that the compensation of the Company’s named executive officers as described under “EXECUTIVE COMPENSATION” in the Company’s Proxy Statement for its 2013 Annual Meeting of Stockholders is approved.

Although the vote on approval of executive compensation is not binding, the Compensation Committee and the Board will consider the result of the vote in making future compensation decisions.

The Board of Directors of the Company unanimously recommends that you vote “FOR” Proposal 3 approving the compensation of the named executive officers as disclosed in this Proxy Statement.

OTHER BUSINESS (ITEM(PROPOSAL 4)

The Board knows of no other business to be brought before the Annual Meeting. However, if any other matters are properly presented, it is the intention of the persons named in the accompanying proxy to take such action as in their judgment is in the best interest of the Company and its stockholders.

STOCKHOLDER PROPOSALS FOR 20112014 ANNUAL MEETING

Stockholder proposals must be received by the Company at its principal executive offices no later than November 10, 20108, 2013 to be considered for inclusion in the Company’s proxy statement and form of proxy for the 20112014 Annual Meeting of Stockholders.

Under the Company’s Bylaws, written notice (containing the information required by the Bylaws) of any stockholder proposal for action at an annual meeting of stockholders (whether or not proposed for inclusion in the Company’s proxy materials) must be received by the Company at its principal executive offices not less than 90 nor more than 120 days prior to the anniversary date of the prior year’s annual meeting of stockholders and must be a proper subject for stockholder action.

BY ORDER OF THE BOARD OF DIRECTORS

THOMAS G. ADLER

Secretary

BY ORDER OF THE BOARD OF DIRECTORS
Thomas G. Adler
Secretary

March 10, 2010

8, 2013

Houston, Texas


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Exhibit A
KIRBY CORPORATION
2005Stock and Incentive Plan
ARTICLE I
GENERAL
Section 1.1.  Purpose.  The purpose of this Plan is to advance the interests of Kirby Corporation, a Nevada corporation (the “Company”), by providing an additional incentive to attract and retain qualified and competent employees for the Company and its subsidiaries, upon whose efforts and judgment the success of the Company is largely dependent, through the award of (i) Options to purchase shares of Common Stock (which Options may be Incentive Stock Options or Nonincentive Stock Options); (ii) shares of Restricted Stock; and (iii) Performance Awards.
Section 1.2.  Definitions.  As used herein, the following terms shall have the meaning indicated:
(a) “Award” means a grant under this Plan in the form of Options, Restricted Stock, Performance Awards or any combination of the foregoing.
(b) “Board” means the Board of Directors of the Company.
(c) “Change in Control” means the occurrence of any of the following events:
(i) Any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) becomes the beneficial owner, directly or indirectly, of voting securities representing thirty percent (30%) or more of the combined voting power of the Company’s then outstanding voting securities;
(ii) The Board ceases to consist of a majority of Continuing Directors, with the term “Continuing Director” meaning a Director who (A) is a Director on the effective date of the Plan or (B) is nominated or appointed to serve as a Director by a majority of the then Continuing Directors;
(iii) (A) Any consolidation or merger of the Company or any Subsidiary that results in the holders of the Company’s voting securities immediately prior to the consolidation or merger having (directly or indirectly) less than a majority ownership interest in the outstanding voting securities of the surviving entity immediately after the consolidation or merger, (B) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company or (C) the liquidation or dissolution of the Company;
(iv) The stockholders of the Company accept a share exchange, with the result that stockholders of the Company immediately before such share exchange do not own, immediately following such share exchange, at least a majority of the voting securities of the entity resulting from such share exchange in substantially the same proportion as their ownership of the voting securities outstanding immediately before such share exchange; or
(v) Any tender or exchange offer is made to acquire thirty percent (30%) or more of the voting securities of the Company, other than an offer made by the Company, and shares are acquired pursuant to that offer.
For purposes of this definition, the term “voting securities” means equity securities, or securities that are convertible or exchangeable into equity securities, that have the right to vote generally in the election of Directors.
(d) “Code” means the Internal Revenue Code of 1986, as amended.
(e) “Committee” means the Compensation Committee, if any, appointed by the Board.
(f) “Date of Grant” means the date on which the Committee takes formal action to grant an Award to an Eligible Person or such later date as may be specified by the Committee when approving the Award.


A-1


(g) “Director” means a member of the Board.
(h) “Disability” means mental or physical disability as determined by a medical doctor satisfactory to the Committee.
(i) “Eligible Person” means an employee of the Company or a Subsidiary.
(j) “Existing Plan” means the 2005 Stock and Incentive Plan as approved by the stockholders of the Company on April 26, 2005, as amended by the Board on January 22, 2007 and as amended by the Board on March 6, 2008 and approved by the stockholders of the Company on April 22, 2008.
(k) “Fair Market Value” of a Share means the closing price on the New York Stock Exchange on the day of reference. If the Shares are not listed for trading on the New York Stock Exchange, the Fair Market Value on the date of reference shall be determined by any fair and reasonable means prescribed by the Committee.
(l) “Incentive Stock Option” means an option that is an incentive stock option as defined in Section 422 of the Code.
(m) “Nonincentive Stock Option” means an option that is not an Incentive Stock Option.
(n) “Option” means any option granted under this Plan.
(o) “Optionee” means a person to whom a stock option is granted under this Plan or any successor to the rights of such person under this Plan by reason of the death of such person.
(p) “Participant” means a person to whom an Award is granted under the Plan.
(q) “Performance Award” means an Award granted pursuant to Article IV.
(r) “Performance Objectives” means the objectives established by the Committee pursuant to Section 4.1(b).
(s) “Performance Period” means the period over which the performance of a holder of a Performance Award is measured.
(t) “Plan” means this Kirby Corporation 2005 Stock and Incentive Plan.
(u) “Restricted Stock” means Shares granted under this Plan that are subject to restrictions imposed by the Committee pursuant to Article III.
(v) “Restricted Stock Award” means an award of Restricted Stock under this Plan.
(w) “Section 162(m) Participant” means each Participant who would be a “covered employee” under Section 162(m) of the Code.
(x) “Share” means a share of the common stock, par value ten cents ($0.10) per share, of the Company.
(y) “Subsidiary” means any corporation (other than the Company) in any unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.
Section 1.3.  Total Shares and Limitations.
(a) The maximum number of Shares that may be issued under the Plan shall be Three Million (3,000,000) Shares, which may be from Shares held in the Company’s treasury or from authorized and unissued Shares. If any Award granted under the Plan shall terminate, expire or be cancelled or surrendered as to any Shares, or the Award is paid in cash in lieu of Shares, the Shares that were subject to such Award shall not count against the above limit and shall again be available for grants under the Plan. Shares equal in number to the Shares surrendered in payment of the option price of an Option and Shares that are withheld in order to satisfy federal, state or local tax liability, shall not count against the above limit and shall be available for grants under the Plan. All Share numbers in the Plan reflect the2-for-1 split of the common stock of the Company effected on May 31, 2006.


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(b) The maximum aggregate number of Shares that may be issued under the Plan pursuant to the exercise of Incentive Stock Options shall be 1,000,000.
(c) The maximum number of Shares that may be issued to any Participant pursuant to the exercise of Options during any calendar year shall be 500,000.
(d) The maximum number of Shares that may be issued to any Participant pursuant to any Performance Award during the term of the Plan shall be 400,000.
(e) The maximum amount of cash that may be paid to any Participant pursuant to any Performance Award during any calendar year shall be $3,000,000.
Section 1.4.  Awards Under the Plan.
(a) Only Eligible Persons may receive awards under the Plan. Awards to Eligible Persons may be in the form of (i) Options; (ii) shares of Restricted Stock; (iii) Performance Awards; or (iv) any combination of the foregoing. No Award shall confer on any person any right to continue as an employee of the Company or any Subsidiary.
(b) Each Award shall be evidenced by an agreement containing any terms deemed necessary or desirable by the Committee that are not inconsistent with the Plan or applicable law.
ARTICLE II
STOCK OPTIONS
Section 2.1.  Grant of Options.  The Committee may from time to time grant Options to Eligible Persons. Options may be Incentive Stock Options or Nonincentive Stock Options as designated by the Committee on or before the Date of Grant. If no such designation is made by the Committee for an Option, the Option shall be a Nonincentive Stock Option. The aggregate Fair Market Value (determined as of the Date of Grant) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by an Optionee during any calendar year under the Plan and all such plans of the Company and any parent or subsidiary of the Company (as defined in Section 424 of the Code) shall not exceed $100,000.
Section 2.2.  Exercise Price.  The exercise price per Share for any Option shall be determined by the Committee, but shall not be less than the Fair Market Value on the Date of Grant and shall not be less than 110% of the Fair Market Value on the Date of Grant for any Incentive Stock Option if the Optionee is a person who owns directly or indirectly (within the meaning of Section 422(b)(6) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company.
Section 2.3.  Term of Option.  The term of an Option shall be determined by the Committee, provided that, in the case of an Incentive Stock Option, if the grant is to a person who owns directly or indirectly (within the meaning of Section 422(b)(6) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, the term of the Option shall not exceed five years from the Date of Grant. Notwithstanding any other provision of this Plan, no Option shall be exercised after the expiration of its term.
Section 2.4.  Vesting.  Options shall be exercisable at such times and subject to such terms and conditions as the Committee shall specify in the option agreement. Unless the option agreement specifies otherwise, the Committee shall have discretion at any time to accelerate such times and otherwise waive or amend any conditions in respect of all or any portion of any Options. Notwithstanding the other provisions of this Section 2.4 and unless otherwise provided in the option agreement, upon the occurrence of a Change in Control, all Options outstanding at the time of the Change in Control shall become immediately exercisable.
Section 2.5.  Termination of Options.
(a) Except as otherwise provided in the option agreement, the portion of an Option that is exercisable shall automatically and without notice terminate upon the earliest to occur of the following:
(i) thirty (30) days after the date on which the Optionee ceases to be an Employee for any reason other than (x) death, (y) Disability or (z) termination for cause;


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(ii) one (1) year after the date on which the Optionee ceases to be an Employee as a result of a Disability;
(iii) either (y) one (1) year after the death of the Optionee or (z) six (6) months after the death of the Optionee if the Optionee dies during the30-day period described in Section 2.5(a)(i) or the one-year period described in Section 2.5(a)(ii);
(iv) the date on which the Optionee ceases to be an Employee as a result of a termination for cause; and
(v) the tenth anniversary of the Date of Grant of the Option.
(b) The portion of an Option that is not exercisable shall automatically and without notice terminate on the date on which the Optionee ceases to be an Employee for any reason.
(c) The Committee shall have discretion at any time to extend the term of any Nonincentive Stock Option to any date that is not later than the date described in Section 2.5(a)(v).
Section 2.6.  Exercise of Options.  An Option may be exercised in whole or in part to the extent exercisable in accordance with Section 2.4 and the option agreement. An Option shall be deemed exercised when (i) the Company has received written notice of such exercise in accordance with the terms of the Option and (ii) full payment of the aggregate exercise price of the Shares as to which the Option is exercised has been made. Unless further limited by the Committee for any Option, the exercise price of any Shares purchased shall be paid solely in cash, by certified or cashier’s check, by money order, by personal check or with Shares owned by the Optionee for at least six months, or by a combination of the foregoing. If the exercise price is paid in whole or in part with Shares, the value of the Shares surrendered shall be their Fair Market Value on the date received by the Company.
Section 2.7.  Corporate Transactions.
(a) In the event of a merger, consolidation or other reorganization of the Company in which the Company is not the surviving entity, the Board or the Committee may provide for payment in cash or in securities of the Company or the surviving entity in lieu of and in complete satisfaction of Options.
(b) Except as otherwise expressly provided herein, the issuance by the Company of shares of its capital stock of any class, or securities convertible into shares of capital stock of any class, either in connection with direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of or exercise price of Shares then subject to outstanding Options granted under the Plan.
(c) Without limiting the generality of the foregoing, the existence of outstanding Options granted under the Plan shall not affect in any manner the right or power of the Company to make, authorize or consummate (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; (ii) any merger or consolidation of the Company; (iii) any issue by the Company of debt securities, or preferred or preference stock that would rank above the Shares subject to outstanding Options; (iv) the dissolution or liquidation of the Company; (v) any sale, transfer or assignment of all or any part of the assets or business of the Company; or (vi) any other corporate act or proceeding, whether of a similar character or otherwise.
Section 2.8.  Issuance of Shares.  No person shall be, or have any of the rights or privileges of, a stockholder of the Company with respect to any of the Shares subject to any Option unless and until such Shares (whether represented by certificates or in book-entry or other electronic form) shall have been issued and delivered to such person.
ARTICLE III
RESTRICTED STOCK
Section 3.1.  Grant of Restricted Stock Awards.  The Committee may from time to time grant Restricted Stock Awards to Eligible Persons.


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Section 3.2.  Terms and Conditions of Restricted Stock Awards.  Each Restricted Stock Award shall specify the number of shares of Restricted Stock awarded, the price, if any, to be paid by the Participant receiving the Restricted Stock Award, the date or dates on which the Restricted Stock will vest and any other terms and conditions that the Committee may determine. The vesting and number of shares of Restricted Stock may be conditioned upon the completion of a specified period of service with the Company or its Subsidiaries or upon the attainment of any performance goals established by the Committee, including without limitation goals related to the performance of the Company or any Subsidiary, division, department or other unit of the Company, the performance of the Company’s common stock or other securities, the performance of the recipient of the Restricted Stock Award or any combination of the foregoing.
Section 3.3.  Restrictions on Transfer.  Unless otherwise provided in the grant relating to a Restricted Stock Award, the Restricted Stock granted to a Participant (whether represented by certificates or in book-entry or other electronic form) shall be registered in the Participant’s name or, at the option of the Committee, not issued until such time as the Restricted Stock shall become vested or as otherwise determined by the Committee. If certificates are issued prior to the shares of Restricted Stock becoming vested, such certificates shall either be held by the Company on behalf of the Participant, or delivered to the Participant bearing a legend to restrict transfer of the certificate until the Restricted Stock has vested, as determined by the Committee. The Committee shall determine whether the Participant shall have the right to voteand/or receive dividends on the Restricted Stock before it has vested. Except as may otherwise be expressly permitted by the Committee, no share of Restricted Stock may be sold, transferred, assigned or pledged by the Participant until such share has vested in accordance with the terms of the Restricted Stock Award. Unless the grant of a Restricted Stock Award specifies otherwise, in the event that a Participant ceases to be an Employee before all the Participant’s Restricted Stock has vested, or in the event other conditions to the vesting of Restricted Stock have not been satisfied prior to any deadline for the satisfaction of such conditions set forth in the award agreement, the shares of Restricted Stock that have not vested shall be forfeited and any purchase price paid by the Participant for the forfeited Shares shall be returned to the Participant. At the time Restricted Stock vests (and, if the Participant has been issued legended certificates for Restricted Stock, upon the return of such certificates to the Company), such vested shares shall be issued to the Participant (or the beneficiary designated by the Participant in the event of death), in certificated or book entry or other electronic form, free of all restrictions.
Section 3.4.  Accelerated Vesting.  Notwithstanding the vesting conditions set forth in a Restricted Stock Award, unless the Restricted Stock Award grant or other agreement with the Participant specifies otherwise:
(a) the Committee may in its discretion at any time accelerate the vesting of Restricted Stock or otherwise waive or amend any conditions of a grant of a Restricted Stock Award, and
(b) all shares of Restricted Stock shall vest upon a Change in Control of the Company.
Section 3.5.  Section 83(b) Election.  If a Participant receives Restricted Stock that is subject to a “substantial risk of forfeiture,” such Participant may elect under Section 83(b) of the Code to include in his or her gross income, for the taxable year in which the Restricted Stock is received, the excess of the Fair Market Value of such Restricted Stock on the Date of Grant (determined without regard to any restriction other than one which by its terms will never lapse), over the amount paid for the Restricted Stock. If the Participant makes the Section 83(b) election, the Participant shall (a) make such election in a manner that is satisfactory to the Committee, (b) provide the Company with a copy of such election, (c) agree to notify the Company promptly if any Internal Revenue Service or state tax agent, on audit or otherwise, questions the validity or correctness of such election or of the amount of income reportable on account of such election and (d) agree to such federal and state income tax withholding as the Committee may reasonably require in its sole discretion.
ARTICLE IV
PERFORMANCE AWARDS
Section 4.1.  Terms and Conditions of Performance Awards.  The Committee may from time to time grant Awards that are intended to be “performance-based compensation,” which are payable in stock, cash or a combination thereof, at the discretion of the Committee.


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(a) Performance Period.  The Committee shall establish a Performance Period for each Performance Award at the time such Performance Award is granted. A Performance Period may overlap with Performance Periods relating to other Performance Awards granted hereunder to the same Participant. The Committee shall not grant Performance Awards to Section 162(m) Participants after the earliest to occur of (i) the 90th day after the start of the Performance Period, (ii) the date on which 25% of the Performance Period has elapsed or (iii) the date on which the satisfaction of the Performance Objectives becomes substantially certain.
(b) Performance Objectives.  The Committee shall establish written performance objectives for the Participant at the time of the grant of each Performance Award. Each Performance Award shall be contingent upon the achievement of the Performance Objectives established by the Committee. Performance Objectives shall be based on earnings, cash flow, economic value added, total stockholder return, return on equity, return on capital, return on assets, revenues, operating profit, EBITDA, net profit, earnings per share, stock price, cost reduction goals, debt to capital ratio, financial return ratios, profit or operating margins, working capital or other comparable objective tests selected by the Committee, or any combination of the foregoing, for the Company on a consolidated basis or, if applicable, for one or more Subsidiaries, divisions, departments or other units of the Company or one or more of its Subsidiaries.
(c) Amount; Frequency.  The Committee shall determine at the time of grant of Performance Awards the target and maximum values of Performance Awards and the date or dates when Performance Awards are earned.
(d) Payment.  Following the end of each Performance Period, the holder of each Performance Award will be entitled to receive payment of an amount, not exceeding the maximum value of the Performance Award, based on the achievement of the Performance Objectives for such Performance Period, as determined in writing by the Committee. Unless otherwise provided in the Performance Award, if the Participant exceeds the specified minimum level of acceptable achievement but does not attain the Performance Objectives, the Participant shall be deemed to have partly earned the Performance Award, and shall become entitled to receive a portion of the total award, as determined by the Committee. Unless otherwise provided in the Performance Award, if a Performance Award is granted after the start of a Performance Period, the Performance Award shall be reduced to reflect the portion of the Performance Period during which the Performance Award was in effect.
(e) Termination of Employment.  Unless otherwise provided in the Performance Award, a Participant who receives a Performance Award and who ceases to be an Employee as a result of death, Disability or retirement before the end of the applicable Performance Period shall be entitled to receive, to the extent earned as a result of the full or partial achievement of the Performance Objectives during the Performance Period, a portion of the Performance Award that is proportional to the portion of the Performance Period during which the Participant was employed, with payment to be made following the end of the Performance Period. Unless otherwise provided in the Performance Award, a Participant who receives a Performance Award who ceases to be an Employee for any reason other than death, Disability or retirement shall not be entitled to any part of the Performance Award unless the Committee determines otherwise.
(f) Accelerated Vesting.  Notwithstanding the vesting conditions set forth in a Performance Award, unless the Performance Award specifies otherwise (i) the Committee may in its discretion at any time accelerate the time at which the Performance Award is considered to have been earned or otherwise waive or amend any conditions (including but not limited to Performance Objectives) in respect of a Performance Award, and (ii) all Performance Awards shall be considered earned upon a Change in Control of the Company. In addition, upon a Change in Control of the Company, unless a Performance Award specifies otherwise, each Participant shall receive the target Performance Award such Participant could have earned for the proportionate part of the Performance Period prior to the Change in Control, and shall retain the right to earn any additional portion of his or her Performance Award if such Participant remains in the Company’s employ through the end of the Performance Period.
(g) Stockholder Rights.  The holder of a Performance Award shall, as such, have none of the rights of a stockholder of the Company.
(h) Annual Incentive Plan.  Cash awards based on the attainment of the performance objectives established under the Company’s Annual Incentive Plan may, in the Committee’s discretion, be considered Performance Awards granted under the Plan, provided that such awards are subject to the terms and conditions of this Article IV.


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ARTICLE V
ADDITIONAL PROVISIONS
Section 5.1.  Administration of the Plan.  The Plan shall be administered by the Committee. The Committee shall have the authority to interpret the provisions of the Plan, to adopt such rules and regulations for carrying out the Plan as it may deem advisable, to decide conclusively all questions arising with respect to the Plan, to establish performance criteria in respect of Awards under the Plan, to determine whether Plan requirements have been met for any Participant in the Plan and to make all other determinations and take all other actions necessary or desirable for the administration of the Plan. All decisions and acts of the Committee shall be final and binding upon all affected Participants. If there is no Committee, the Board shall administer the Plan and in such case all references to the Committee shall be deemed to be references to the Board.
Section 5.2.  Adjustments for Changes in Capitalization.  In the event of any (a) stock dividends, stock splits, recapitalizations, combinations, exchanges of shares, mergers, consolidations, liquidations,split-ups, split-offs, spin-offs or other similar changes in capitalization, (b) distributions to stockholders, including a rights offering, other than regular cash dividends, (c) changes in the outstanding stock of the Company by reason of any increase or decrease in the number of issued Shares resulting from asplit-up or consolidation of Shares or any similar capital adjustment or the payment of any stock dividend, (d) Share repurchase at a price in excess of the market price of the Shares at the time such repurchase is announced or (e) other similar increase or decrease in the number of the Shares, the Committee, in its sole discretion, shall make appropriate adjustment in the number and kind of shares authorized by the Plan in the number, price or kind of shares covered by the Awards and in any outstanding Awards under the Plan. In addition, upon the occurrence of any event described in this Section 5.2, the Committee, in its sole discretion, shall make appropriate adjustment in the limits specified in Section 1.3(b), (c) and (d) so that the effect of such limits is, as nearly as practicable, equivalent to the effect of such limits prior to the event in question, provided that any such adjustment complies with applicable laws and does not cause an award that is intended to satisfy the performance-based compensation exception under Section 162(m) of the Code to fail to satisfy the exception. In the event of any adjustment in the number of Shares covered by any Award, any fractional Shares resulting from such adjustment shall be disregarded and each such Award shall cover only the number of full Shares resulting from such adjustment.
Section 5.3.  Amendment.
(a) The Board may amend or modify the Plan in any respect at any time, subject to stockholder approval if required by applicable law or regulation or by applicable stock exchange rules. Such action shall not impair any of the rights of any Participant with respect to any Award outstanding on the date of the amendment or modification without the Participant’s written consent.
(b) The Committee shall have the authority to amend any Award to include any provision which, at the time of such amendment, is authorized under the terms of the Plan; however, no outstanding Award may be revoked or altered in a manner unfavorable to the Participant without the written consent of the Participant.
Section 5.4.  Transferability of Awards.  An Award shall not be transferable by the Participant otherwise than by will or the laws of descent and distribution. So long as a Participant lives, only such Participant or his or her guardian or legal representative shall have the right to exercise such Award.
Section 5.5.  Beneficiary.  A Participant may file with the Company a written designation of beneficiary, on such form as may be prescribed by the Committee, to receive any Shares, Awards or payments that become deliverable to the Participant pursuant to the Plan after the Participant’s death. A Participant may, from time to time, amend or revoke a designation of beneficiary. If no designated beneficiary survives the Participant, the executor or administrator of the Participant’s estate shall be deemed to be the Participant’s beneficiary.
Section 5.6.  Non-uniform Determinations.  Determinations by the Committee under the Plan (including, without limitation, determinations of the Eligible Persons to receive Awards, the form, amount and timing of Awards, the terms and provisions of Awards and the agreements evidencing Awards and provisions with respect to termination of employment) need not be uniform and may be made by the Committee selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated.


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Section 5.7.  Duration and Termination.  The Plan shall be of unlimited duration, provided that no Incentive Stock Option shall be granted under the Plan on or after the tenth anniversary of the effective date of the Plan. The Board may suspend, discontinue or terminate the Plan at any time. Such action shall not impair any of the rights of any holder of any Award outstanding on the date of the Plan’s suspension, discontinuance or termination without the holder’s written consent.
Section 5.8.  Withholding.  Prior to the issuance of any Shares under the Plan, arrangements satisfactory to the Committee in its sole discretion shall have been made for the Participant’s payment to the Company of the amount, if any, that the Committee determines to be necessary for the Company or Subsidiary employing the Participant to withhold in accordance with applicable federal or state income tax withholding requirements. If the Committee allows Shares to be withheld from an Award to satisfy such withholding requirements, the amount withheld in Shares shall not exceed the minimum amount required to be withheld, determined on the date that the amount of tax to be withheld is to be determined. When payments under the Plan are made in cash, such payments shall be net of an amount sufficient to satisfy such withholding requirements.
Section 5.9.  Agreements and Undertakings.  As a condition of any issuance or transfer of Shares, the Committee may obtain such agreements or undertakings, if any, as it may deem necessary or advisable to assure compliance with any provision of the Plan, any agreement or any law or regulation including, but not limited to, the following:
(a) a representation, warranty or agreement by the Participant to the Company that the Participant is acquiring the Shares for investment and not with a view to, or for sale in connection with, the distribution of any such Shares; and
(b) a representation, warranty or agreement to be bound by any restrictions that are, in the opinion of the Committee, necessary or appropriate to comply with the provisions of any securities law deemed by the Committee to be applicable to the issuance of the Shares.
Section 5.10.  Uncertificated Shares.  In lieu of issuing stock certificates for Shares acquired pursuant to the Plan, the Company may issue such Shares in book-entry or other electronic or uncertificated form, unless prohibited by applicable law or regulation or by applicable stock exchange rules.
Section 5.11.  Governing Law.  The Plan shall be governed by the laws of the State of Texas except to the extent that federal law or Nevada corporate law is controlling.
Section 5.12.  Effective Date.  The Plan amends and restates the Existing Plan in its entirety, effective upon approval by the Board on July 22, 2008.


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(PROXY CARD)
. MMMMMMMMMMMM MMMMMMMMMMMMMMM C123456789 000004 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext MR A SAMPLE DESIGNATION (IF ANY) 000000000.000000 ext 000000000.000000 ext ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 MMMMMMMMM ADD 6

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Using a black ink pen, mark your votes with an X as shown  in X

this example. Please do not write outside the designated areas. Annual Meeting Proxy Card 3 PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 3

x

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q  PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.  q

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 A Proposals — The Board of Directors recommends a voteFOR all the nominees listed andFOR Proposals 2 and 3.
1.Election of Directors:ForAgainstAbstainForAgainstAbstainForAgainstAbstain+
01 - C. Sean Day¨¨¨02 - William M. Lamont, Jr.¨¨¨03 — C. Berdon Lawrence For Against Abstain For Against Abstain 2. Reapproval of the material terms of the performance 3. Ratification of the selection of KPMG LLP as Kirby’s objectives under Kirby’s 2005 Stock and Incentive Plan. independent registered public accounting firm for 2010. 4. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.- William M. Waterman¨¨¨

    For Against Abstain     For Against Abstain
2. Ratification of the selection of KPMG LLP as Kirby’s independent registered public accounting firm for 2013. ¨ ¨ ¨ 3. Advisory vote on the approval of the compensation of Kirby’s named executive officers. ¨ ¨ ¨
4. The Proxies are authorized to vote in their discretion upon such other business as may properly come before the meeting.        

 B Non-Voting Items Change of Address

Change of Address— Please print new address below.

 C Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.

Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.

Date (mm/dd/yyyy) — Please print date below.Signature 1 — Please keep signature within the box.Signature 2 — Please keep signature within the box. C 1234567890 J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MMMMMMM3 2 A M 0 2 4 9 0 2 1 MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + <STOCK#> 015KFB
//

 

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(PROXY CARD)
3 PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 3 Proxy — Kirby Corporation 55 Waugh Drive, Suite 1000 P.O. Box 1745 Houston, Texas 77251-1745 This Proxy is solicited on behalf of the Board of Directors of Kirby Corporation. The undersigned hereby appoints Joseph H. Pyne, David W. Grzebinski, G. Stephen Holcomb and Thomas G. Adler, and each of them, as Proxies, each with the power to appoint his substitute, and hereby authorizes each to represent and to vote, as designated below, all the shares of common stock, par value $0.10 per share, of Kirby Corporation (the “Company”) held of record by the undersigned as of the close of business on March 1, 2010, at the Annual Meeting of Stockholders to be held on April 27, 2010, at the Four Seasons Hotel, 1300 Lamar Street, Houston, Texas 77010 at 10:00 A.M. (CDT) and any adjournment(s) thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE PERSONS LISTED IN ITEM 1. SHOULD ANY OF THEM BECOME UNAVAILABLE FOR NOMINATION OR ELECTION OR REFUSE TO BE NOMINATED OR ACCEPT ELECTION AS A DIRECTOR OF THE COMPANY, THE PROXY WILL BE VOTED FOR THE ELECTION OF SUCH PERSON OR PERSONS AS MAY BE NOMINATED OR DESIGNATED BY THE BOARD OF DIRECTORS. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 2 AND 3. THE PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO ANY MATTER REFERRED TO IN ITEM 4. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE. (Continued and to be signed on reverse side)

 

q  PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.  q

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Proxy — Kirby Corporation

55 Waugh Drive, Suite 1000

P.O. Box 1745

Houston, Texas 77251-1745

This Proxy is solicited on behalf of the Board of Directors of Kirby Corporation.

The undersigned hereby appoints Joseph H. Pyne, David W. Grzebinski, G. Stephen Holcomb and Thomas G. Adler, and each of them, as Proxies, each with the power to appoint his substitute, and hereby authorizes each to represent and to vote, as designated below, all the shares of common stock, par value $0.10 per share, of Kirby Corporation (the “Company”) held of record by the undersigned as of the close of business on March 1, 2013, at the Annual Meeting of Stockholders to be held on April 23, 2013, at 55 Waugh Drive, 9th floor, Houston, Texas 77007 at 10:00 A.M. (CDT) and any adjournment(s) thereof.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE PERSONS LISTED IN PROPOSAL 1. SHOULD ANY OF THEM REFUSE OR BECOME UNABLE TO ACCEPT ELECTION AS A DIRECTOR OF THE COMPANY, THE PROXY WILL BE VOTED FOR THE ELECTION OF SUCH PERSON OR PERSONS AS MAY BE NOMINATED OR DESIGNATED BY THE BOARD OF DIRECTORS. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 2 AND 3. THE PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO ANY MATTER REFERRED TO IN ITEM 4.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.

(Continued and to be signed on reverse side)