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 2005,2008, except that a transfer of interests in a family partnership by Mr. Peterkin filedLawrence to his children in 2006 was reported in January 2009 and one late report covering a salerestricted stock award for Gregory R. Binion, President of 500 shares.Kirby Inland Marine, LP, was filed late.
considered the Consultant’s analysis in determining whether 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 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
no significantcertain perquisites
orand other personal benefits to its
named executive officers. Except for accelerated vesting of outstanding stock options,
and 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.
There was one extraordinary element The Company has no employment agreements with any of compensation in 2005. The Chief Executive Officer realized approximately $13.1 millionits executive officers.
Elements of income in 2005 upon the exercise of options to purchase 388,000 shares of common stock of the Company and other executive officers realized approximately $3 million of income in 2005 upon the exercise of options to purchase 90,000 shares. Those options were granted in 1996 (except for 40,000 shares which were granted to a newly-hired officer other than the Chief Executive Officer in 1999) and the income realized in 2005 was therefore a reward for the Company’s performance over a nine-year period and corresponds to a substantial increase in stockholder value over that period of time.Compensation
Salary
The Compensation Committee attempts to set base salaries for the named executive officers at approximately the median for comparablesimilar companies. The Committee and management believe that the Company is the leader in its industry and that its employees are frequently targeted by its competitors. Therefore the Committee attempts to set compensation at levels to keep pace with inflation and the competitive market to avoid losing valuable employees.
For 2008, the Compensation Committee retained
an independent consultant in 2005the Consultant to advise the Committee on executive compensation issues. The
consultantConsultant selected a peer group of
comparablesimilar companies and determined that,
based on information available at the beginning of 2008, the Company’s salaries for its top executive officers
(including the Chief Executive Officer) averaged approximately
95%92% of the median for the peer
group. The Compensation Committee recognizesgroup, although the difficulties in establishing a peer groupbase salaries of companies for compensation comparison purposes because there are few publicly traded marine transportation companies of similar sizeMr. Pyne, the Company’s Chief Executive Officer, and none with a similar service mix. Some other marine transportation companies are limited partnerships or subsidiaries of larger public corporations, making comparisons difficult and resulting inMr. Nolen, the need to consider an expanded universe of companies for comparisons.
Company’s Chief Financial Officer were below the 25th percentile. In setting executive officer salariesthe Company’s overall salary budget for 2005,2008, management and the Compensation Committee considered the Company’s strong performance in 20042007 on financial, operational and strategic levels, and individual performance of the officers, as well as independent survey information indicatingfrom sources other than the Consultant that executiveprojected 3.7-4.0% increases in salary budgets for 2008 for all categories of employees at a broad range of companies, and increased the 2008 salary budget, which included both merit and promotional salary increases, for 2005 would generally beall shore-based employees by 4.5% over 2007. Salary increases for the named executive officers for 2008 were in the 3–3 1/2%4-5% range, except that Mr. Pyne’s salary was increased by 10.5% and decided to increaseMr. Nolen’s salary was increased by 20.8% over the previous year, in both cases because the Committee concluded that their base salaries for executive officers by 3% over 2004were below competitive levels.
Annual Incentive Compensation
With regard to the annual cash incentives for executive officers,
exclusive of base salary, the Compensation Committee attempts to set
bonusesbonus targets at a level such that, with a positive performance by an executive officer and a certain level of
profitabilityperformance by the Company, the total
cash compensation for the executive officer
including base salary and annual cash bonus, will be above the median total cash compensation for similar corporations and positions.
Based on the market analysis provided to the Committee by the Consultant, the Committee determined that the 2008 salaries for the executive officers would be within or below the median range for companies of similar size, while the target total cash compensation, including incentive compensation, would be within or above the median range, which is consistent with the Company’s compensation philosophy. 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
Companythe Company’s success in achieving the targeted performance
factors.measures described in the next paragraph. The annual incentive bonus constitutes a significant portion of direct cash compensation (salary plus bonus) and can vary significantly from year to year depending on the Company’s
performance.achievement of those performance measures.
The Company’s annual incentive bonus plan is based on the achievement of three equally weighted performance measures by each of the Company’s threefour business groups — inland marine transportation, diesel engine services, and offshore marine transportation andcontainer-on-barge service — and by the Company as a whole. The three performance
14
11
performance measures are EBITDA (net earnings 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) net earnings, (ii) depreciation and amortization, (iii) interest expense and (iv) provision for taxes on income. Return on total capital for the year is calculated by dividing (i) earnings before taxes on income plus interest expense by (ii) the average of stockholders’ equity plus long-term debt for the year.
Performance under the annual incentive bonus plan is measured on a calendar year basis. At the beginning of each year, objectives are established for each of the three performance measures for the year, based on the budget for the year that is prepared by management and approved by the Board of Directors. For 2008, the target and actual performance measures for the Company were:
| | | | | | | | | |
| | | Target | | | Actual | |
| |
| EBITDA | | $ | 338 | million | | $ | 360 | million |
| Return on total capital | | | 22.2 | % | | | 23.8 | % |
| Earnings per share | | $ | 2.61 | | | $ | 2.91 | |
The actual numbers include the effect of a $6 million increase in the Company’s reserve for doubtful accounts in the fourth quarter due to the financial condition of certain customers. However, in determining the payouts under the plan, the Committee excluded the effect of the increase in the reserve for doubtful accounts.
In administering the annual incentive plan, the Compensation Committee establishes a target bonus expressed as a percentage of base salary or a dollar amount for each participant. The Committee also establishes a range of possible bonuses, with no bonus earned unless at least 80% of the target performance is achieved and a maximum possible award of 200% of the target bonus if 120% of the target performance is achieved. Bonuses 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. Bonuses 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. Bonuses for all other employees in a business group are based 70% on the performance of the business group and 30% on Company performance.
For 2008, the Compensation Committee set the target bonuses for the named executive officers at the following percentages of base salary: Joseph H. Pyne (90%), C. Berdon Lawrence (90%), Steven P. Valerius (70%), Norman W. Nolen (70%) and Dorman L. Strahan (70%). The target bonuses as a percentage of base salary were established at their current levels in 2000, based on the recommendation of a different executive compensation consulting firm that advised the Company on the design of the plan. Since then, the Committee has generally been satisfied that the annual incentive compensation awards produced by the plan have been reasonable in amount and have correlated with the performance of the Company and its business groups and has therefore not changed the target percentages for the named executive officers. Payouts under the annual incentive plan for 2008 were 153.9% of the target bonus for Messrs. Pyne, Lawrence and Nolen (employees of the parent Company), 161.5% of the target bonus for Mr. Valerius, the President of the Company’s principal inland marine transportation subsidiary for part of the year and an employee of the parent Company for part of the year, and 138.9% of the target bonus for Mr. Strahan, the President of the Company’s diesel engine services subsidiaries.
The annual incentive plan also provides for the allocation of 25% ofthat each participant’s total potential bonus under the plan may be decreased by up to 25% based on a discretionary assessment of individual performance for the year. In 2005, theThe Compensation Committee awarded the full 25% of the plan bonus for 2008 to each named executive officer after determining that the performance of each of the executive 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 the Company’s success in achieving its financial, operational and strategic goals for the year. 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.
15
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 in long-term incentive compensation of similar corporations and
positions, giving effect to the Company’s long-term performance relative to its peers.positions. In addition to retirement, health care and similar benefits, the primary long-term incentives for executive officers are stock options, restricted stock and performance awards.
Generally, stock option and restricted stock awards are made by the Compensation Committee in January of each year. 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.generally, because the Committee believes that such awards provide an incentive for key employees to remain with the Company. That is, regular annual awards at approximately consistent levels are an appropriate component of annual compensation. Bonuses under the Company’s annual incentive
bonus plan vary
directly with
Companythe Company’s achievement of the annual performance
with possible bonuses under parameters established in recent years ranging from zero in a very disappointing year to double the target bonus in an exceptionally good year.targets. The bonus 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
2005,2008, the Compensation Committee granted nonqualified stock options covering
91,700114,095 shares of common stock and
48,00050,032 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 five 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 does generally consider the performance of the Company, the performance of the officer, information from an executive compensation consultant about the level of long-term equity-based incentive compensation awards made by
comparablesimilar companies, the Company’s option overhang (considering both outstanding options and
optionsshares 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.
In 2002, the Board of Directors of the Company instituted a long-term incentive compensation program for selected senior executives, to be 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 when compared to companies or business units of
comparablesimilar size. Under the program, the elements of
12
long-term compensation to be awarded, as well as the executives selected to participate, are determined each year by the Compensation Committee.
For 2005,2008, the Compensation Committee determined that the executives who would receive awards under the long-term incentive compensation program would be Joseph H.Mr. Pyne, PresidentMr. Nolen, Mr. Valerius and Chief Executive Officer, Norman W.Mr. Strahan, that the target value of the awards would be $3,000,000 for Mr. Pyne, $739,000 for Mr. Valerius, $660,000 for Mr. Nolen Executive Vice President and Chief Financial Officer, Steven P. Valerius, President of Kirby Inland Marine, LP, and Dorman Lynn$305,000 for Mr. Strahan, President of Kirby Engine Systems, Inc., 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 performance units tied to the achievement of EBITDA, return on total capital and earnings per share objectives over a three-year period.awards. 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, 2008. The target amounts for the performance awards established for the four executive officers were $1,200,000 for Mr. Pyne, $295,600 for Mr. Valerius, $264,000 for Mr. Nolen and $122,000 for Mr. Strahan. 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
16
advice and recommendations on the form of awards provided by an independent consultantthe Consultant to the Compensation Committee. Based on information provided by the consultant,Consultant, the expected valuetarget values of the awards fell betweenwere above the 50th and 75th percentilespercentile when compared to long-term incentive compensation awards made by comparablesimilar companies. The actualCommittee decided that awards above the Committee’s long-term objective were justified in 2008 because of the Company’s sustained financial and strategic performance over a period of years.
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
fourplan by the Company are allocated among the participants
during 2005according to base salary. All employees of the Company are
includedeligible to participate in the
compensation tables presented elsewhere401(k) Plan, under which the Company will match employee contributions in
this Proxy Statement.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 Internal Revenue Code. The plan is designed to restore benefits for employees being compensated in excess of $220,000certain limits ($230,000 per annum.annum for 2008). In 2005,2008, the Committee approved contributions for each participant at the maximum amounts allowed by the Plan.
Perquisites and Personal Benefits
The
contributionsonly perquisites or other personal benefits that the Company provides to the named executive officers are
shown in the compensation tables presented elsewhere in this Proxy Statement. Section 162(m)an automobile allowance that is given to approximately 60 executive and management employees, payment of the Internal Revenue Code generally disallowscost of club memberships that are used for both business and personal purposes and the payment of a tax deductionportion of the cost of financial planning services provided to public companies for compensation over $1 million paid tofour of the named executive officers during 2008. The Compensation Committee believes the personal benefits are reasonable in amount and help the Company attract and retain key employees.
Chief Executive Officer and the four other most highly compensated executive officers. 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. The Compensation Committee set the 20052008 base salary for Joseph H. Pyne, the Company’s Chief Executive Officer, at $567,800,$680,000, representing a 3%10.5% increase over 2004.2007. 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 comparablesimilar corporations, individual as well as corporate performance and a general correlation with the compensation of other executive officers of the Company. In setting the compensation of the Chief Executive Officer, the Committee also considers 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 of Directors 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 long-term incentive compensation awards. Finally, the marketplace compensation analysis by the Consultant to the Committee indicated that Mr. Pyne’s base salary was below the 25th percentile for comparable positions in the peer group of similar companies selected by the Consultant and the salary increase for 2008 was intended to bring him closer to the median. The $861,069 bonus earned by$2,563,466 in non-equity incentive plan compensation shown for Mr. Pyne in 2005 wasthe Summary Compensation Table consisted of (1) $941,868 determined under the annual incentive bonus plan described above. The $571,865above and (2) a $1,621,598 payment earned by Mr. Pyne for the 2003-20052006-2008 performance period under a performance award granted as part of the Company’s long-term incentive compensation program that was based on the formula for the performance award that was established by the Compensation Committee when the award was made at the beginning of 2003.2006, with the one variation relating to the $6 million increase in the Company’s reserve for doubtful accounts discussed under “Annual Incentive Compensation” above.
17
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. 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 after the earnings release, in which case the later date is considered the date of grant.
Benchmarking
Where the Compensation Committee has used benchmarking against similar companies in determining particular elements of executive compensation, that information has been provided by the Consultant. Marketplace analysis developed by the Consultant has been based on a broad group of 145 general industry companies with annual revenues similar to those of the Company or, where applicable, a particular segment of the Company’s business. The companies represent a wide range of industries because of the difficulty in establishing a peer group of companies for the Company. There are few publicly traded transportation companies of similar size to the Company and none with a similar service mix. In addition, a number of marine transportation companies are limited partnerships or subsidiaries of larger corporations, making comparisons difficult and resulting in the need to consider an expanded universe of companies for comparisons.
18
The peer group used by the Consultant for the information provided to the Committee in connection with its compensation decisions for 2008 included the following companies, each of which had annual revenues of $3 billion or less at the time the Consultant selected the peer group:
| | | | | | |
| A.O. Smith | | Cooper Tire & Rubber | | IDEX | | Powerwave Technologies |
| A.T. Cross | | Crown Castle | | Insituform Technologies | | Proquest |
| Advanced Medical Optics | | Covance | | InterContinental Hotels Group* | | Purdue Pharma |
| Aerojet* | | Cubic | | International Flavors & Fragrances | | Quintiles |
| Alexander & Baldwin | | Dade Behring | | International Game Technology | | Respironics |
| Allergan | | Dentsply | | Invitrogen | | Rich Products |
| American Greetings | | Discovery Communications | | Iron Mountain | | RISO* |
| Amplifon USA* | | Dollar Thrifty Automotive Group | | Irving Oil* | | Scotts Miracle-Gro |
| Angiotech Phamaceuticals | | Donaldson | | J.M. Smucker | | SENCORP |
| Ann Taylor Stores | | Dow Jones | | J.R. Simplot | | Sensata Technologies |
| APAC Customer Service | | Dynea USA* | | Jack in the Box | | Sirius Satellite Radio |
| Applera | | EDO | | Kaman Industrial Technologies* | | Sports Authority |
| Appleton Papers | | eFunds | | Kennametal | | St. Joe Company |
| Arctic Cat | | Equifax | | King Pharmaceuticals | | Steelcase |
| Armstrong World Industries | | Essilor of America* | | Level 3 Communications | | Tektronix |
| Arysta LifeScience North America* | | Experian Americas* | | Louisiana-Pacific | | TeleTech Holdings |
| Bar Laboratories | | FANUC Robotica Americal* | | Magellan Midstream Partners | | Terra Industries |
| Beckman Coulter | | Fleetwood Enterprises | | Makino* | | Thomas & Betts |
| BIC | | Forest Laboratories | | Martin Marietta Materials | | Tiffany |
| Bob Evans Farms | | G&K Services | | Mary Kay | | Toro |
| Bracco Diagnostics* | | GATX | | MDS Pharma Services* | | Trinity Industries |
| Brady | | Genzyme | | Media General | | Tupperware |
| Burger King | | Getty Images | | Medimmune | | UCB* |
| Callaway Golf | | Gilead Sciences | | Milacron | | Valmont Industries |
| Carestream Health | | Global Crossing | | Millennium Pharmaceuticals | | Viad |
| Carpenter Technology | | GTECH | | Millipore | | Vistar |
| Celgene | | H Enterprises International | | MSC Industrial Direct | | Vulcan Materials |
| Cephalon | | H.B. Fuller | | National Semiconductor | | W.R. Grace |
| Ceridian | | Harman International Industries | | New York Times | | Watson Pharmaceuticals |
| Chesapeake | | Harsco | | Norcal Waste Systems | | Wayne Farms* |
| Cincinnati Bell | | Hasbro | | Omnova Solutions | | Wendy’s International |
| Clarke American Checks* | | Hayes-Lemmerz | | Parsons | | Westinghouse Savannah River* |
| COACH | | Hercules | | PerkinElmer | | Winnebago Industries |
| Combe | | High Liner Foods USA* | | Pharmion | | |
| Comfort Systems USA | | HNI | | Plexus | | |
| Connell | | HNTB | | Plum Creek Timber | | |
| Constar International | | Hospira | | PolyOne | | |
| | |
| * | Compensation Committee |
|
| William M. Lamont, Jr.,Chairman |
| Bob G. Gower |
| Robert G. Stone, Jr. |
| Richard C. WebbSubsidiary |
Stock Ownership Guidelines
In 2008, the Board of Directors of the Company established stock ownership guidelines for executive officers and directors of the Company and its subsidiaries. The guidelines were effective January 1, 2009 and 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
19
13
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 Governance Committee of the Board of Directors will monitor compliance with the guidelines and may recommend modifications or exceptions to the Board of Directors.
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 Interlocks and Insider Participation The members of the Compensation Committee are,
and during 2008 were, Mr. Lamont, Mr.
Gower,Day, Mr.
StoneGower and Mr.
Webb. No memberMiller. None of
the Compensation Committeesuch persons is or has been an officer or employee of the Company or any of its subsidiaries. In
2005,2008, no executive
officersofficer 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.
Summary Annual and Long-Term Compensation
The following table summarizes compensation earned by or paid to the Chief Executive Officer and the four other highest paid executive officers (the “named executive officers”) for the last three fiscal years:
Summary Compensation Table| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | Long Term Compensation | | |
| | | | | | | |
| | |
| | | | | | | | | | | | |
| | | | | | | | Awards | | | | |
| | | | | |
| | | | |
| | | | Annual Compensation | | Restricted | | | | | | |
| Name and | | | |
| | Stock | | Shares Subject | | LTIP | | All Other |
| Principal Position | | Year | | Salary | | Bonus | | Awards(1) | | to Options | | Payouts(2) | | Compensation(3) |
| |
| |
| |
| |
| |
| |
| |
|
| Joseph H. Pyne | | | 2005 | | | $ | 577,160 | | | $ | 861,069 | | | $ | 881,800 | | | | 33,300 | | | $ | 571,865 | | | $ | — | |
| | President, Director and | | | 2004 | | | | 560,560 | | | | 605,714 | | | | 848,125 | | | | 26,032 | | | | — | | | | 35,206 | |
| | Chief Executive Officer | | | 2003 | | | | 539,360 | | | | 485,109 | | | | 494,750 | | | | 52,063 | | | | — | | | | 33,623 | |
| C. Berdon Lawrence | | | 2005 | | | $ | 443,860 | | | $ | 658,919 | | | | 396,810 | | | | 30,000 | | | $ | — | | | $ | — | |
| | Chairman of the Board | | | 2004 | | | | 431,160 | | | | 463,516 | | | | | | | | 55,000 | | | | — | | | | 35,206 | |
| | | | | 2003 | | | | 414,960 | | | | 371,246 | | | | | | | | 55,000 | | | | — | | | | 33,623 | |
| Steven P. Valerius | | | 2005 | | | $ | 330,760 | | | $ | 387,416 | | | $ | 251,313 | | | | 9,500 | | | $ | 222,586 | | | $ | — | |
| | President of Kirby Inland | | | 2004 | | | | 321,360 | | | | 273,874 | | | | 224,109 | | | | 8,879 | | | | — | | | | 35,206 | |
| | Marine, LP | | | 2003 | | | | 309,360 | | | | 209,370 | | | | 168,783 | | | | 17,758 | | | | — | | | | 33,623 | |
| Norman W. Nolen | | | 2005 | | | $ | 277,160 | | | $ | 315,870 | | | $ | 220,450 | | | | 8,300 | | | $ | 176,601 | | | $ | — | |
| | Executive Vice President | | | 2004 | | | | 269,360 | | | | 222,222 | | | | 209,860 | | | | 8,315 | | | | — | | | | 35,206 | |
| | and Chief Financial Officer | | | 2003 | | | | 259,360 | | | | 177,975 | | | | 158,052 | | | | 16,630 | | | | — | | | | 33,623 | |
| Mark R. Buese | | | 2005 | | | $ | 215,360 | | | $ | 242,977 | | | $ | 94,005 | | | | 2,500 | | | $ | — | | | $ | — | |
| | Senior Vice President- | | | 2004 | | | | 202,960 | | | | 165,470 | | | | 27,140 | | | | 6,000 | | | | — | | | | 33,249 | |
| | Administration | | | 2003 | | | | 177,060 | | | | 119,386 | | | | | | | | 8,000 | | | | — | | | | 28,193 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | 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 | | | 2008 | | | $ | 680,000 | | | $ | 1,042,853 | | | $ | 621,576 | | | $ | 2,563,466 | | | $ | 33,293 | | | $ | 37,668 | | | $ | 4,978,856 | |
| President, Director and | | | 2007 | | | | 615,600 | | | | 894,208 | | | | 557,407 | | | | 2,169,513 | | | | 11,082 | | | | 36,919 | | | | 4,284,729 | |
| Chief Executive Officer | | | 2006 | | | | 590,600 | | | | 707,569 | | | | 436,334 | | | | 1,418,007 | | | | 15,391 | | | | 136,655 | | | | 3,304,556 | |
| Norman W. Nolen | | | 2008 | | | | 350,000 | | | | 239,673 | | | | 139,785 | | | | 701,711 | | | | — | | | | 28,597 | | | | 1,459,766 | |
| Executive Vice President | | | 2007 | | | | 289,700 | | | | 216,468 | | | | 129,906 | | | | 640,375 | | | | — | | | | 25,689 | | | | 1,302,138 | |
| and Chief Financial Officer | | | 2006 | | | | 278,500 | | | | 180,645 | | | | 110,995 | | | | 482,404 | | | | — | | | | 80,535 | | | | 1,133,079 | |
| C. Berdon Lawrence | | | 2008 | | | | 495,000 | | | | 379,813 | | | | 516,465 | | | | 685,625 | | | | 75,252 | | | | 31,060 | | | | 2,183,215 | |
| Chairman of the Board | | | 2007 | | | | 471,900 | | | | 274,048 | | | | 476,481 | | | | 651,080 | | | | 36,036 | | | | 29,837 | | | | 1,939,382 | |
| | | | 2006 | | | | 451,900 | | | | 170,450 | | | | 483,553 | | | | 588,103 | | | | 30,540 | | | | 100,895 | | | | 1,825,441 | |
| Steven P. Valerius | | | 2008 | | | | 361,600 | | | | 266,072 | | | | 159,023 | | | | 798,168 | | | | 21,780 | | | | 26,474 | | | | 1,633,117 | |
| Executive Vice | | | 2007 | | | | 347,700 | | | | 238,552 | | | | 148,510 | | | | 768,067 | | | | — | | | | 34,089 | | | | 1,536,918 | |
| President and Chief Administrative Officer | | | 2006 | | | | 334,300 | | | | 198,059 | | | | 124,673 | | | | 584,333 | | | | 4,645 | | | | 72,869 | | | | 1,318,879 | |
| Dorman L. Strahan | | | 2008 | | | | 248,800 | | | | 85,777 | | | | 46,061 | | | | 324,775 | | | | — | | | | 25,874 | | | | 731,287 | |
| President of Kirby | | | 2007 | | | | 239,200 | | | | 69,489 | | | | 35,263 | | | | 348,727 | | | | — | | | | 33,260 | | | | 725,939 | |
| Engine Systems, Inc. | | | 2006 | | | | 211,275 | | | | 48,667 | | | | 29,115 | | | | 293,726 | | | | — | | | | 57,626 | | | | 640,409 | |
| | |
| (1) | Represents | The amounts included in the value of“Stock Awards” and “Option Awards” columns represent the compensation cost recognized by the Company related to restricted stock on the date of grant. At December 31, 2005, the value of the restricted stock held by each ofawards and option grants to the named executive officers, basedcomputed in accordance with SFAS No. 123R. For a discussion of valuation assumptions, see Note 7, Stock Award Plans, in the Company’s consolidated financial statements included in the Annual Report onForm 10-K for the $52.17 closing price was $2,894,965 for Mr. Pyne (55,491 shares), $848,702 for Mr. Valerius (16,268 shares), $777,124 for Mr. Nolen (14,896 shares) and $150,771 for Mr. Buese (2,890 shares).year ended December 31, 2008. The restrictedactual number of stock awards wereand options granted on February 7, 2002, January 27, 2003, January 26, 2004, January 24, 2005 and March 2, 2005 and vest over a periodin 2008 is shown in the “Grants of five years, beginning on the first anniversary of the date of grant, subject to continued employment. In the event a change of control occurs, all restricted stock awards become fully vested. The Company does not have an established dividend policy. Should the Board declare a dividend after the restricted stock has been awarded, restricted stock owners shall receive dividends on the shares of restricted stock that have not been forfeited.Plan Based Awards During 2008” table. |
20
| | |
| (2) | Payout for | Amounts include payments under the 2003-2005Company’s annual incentive plan and payments pursuant to three-year performance period underawards. Both the annual incentive plan and the performance awards madeare described in 2003.more detail in the “Compensation Discussion and Analysis” above. |
| |
| (3) | Represents | The amounts for Mr. Pyne reflect the aggregate change during 2008, 2007 and 2006 in the present value of his accumulated benefit under a Deferred Compensation Agreement with Kirby Inland Marine, LP. The amounts for Mr. Lawrence reflect the change in the present value of his accumulated benefits during 2008, 2007 and 2006 under the Kirby Pension Plan. The amounts for Mr. Valerius in 2006 and 2008 reflect the change in present value of accumulated benefits during 2006 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 a annuity payable increase from $6,436 per month to $7,345 per month as of December 31, 2008. Since Mr. Lawrence’s 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 2008 and 2007 include an automobile allowance, club memberships, group life insurance and personal financial planning services for Mr. Pyne, Mr. Nolen, Mr. Valerius and Mr. Strahan, and an automobile allowance, group life insurance and club memberships for Mr. Lawrence. Amounts for 2006 include an automobile allowance, club memberships, group life insurance and personal financial planning services for Mr. Pyne and Mr. Nolen, and an automobile allowance, group life insurance and club memberships for Mr. Lawrence, Mr. Valerius and Mr. Strahan. The Company’s contributions under the Company’s Profit Sharing Plan 401(k) Plan and Deferred Compensation Plan for Key Employees. The Company’s contributions under these deferred compensation plansEmployees for the 2005 year2008, which would otherwise be included in this column, have not been determined as of the date of this Proxy Statement, except forStatement. For 2007, the Company’s matching contributions under the Company’s 401(k)Profit Sharing Plan pursuant to which matching contributions to the individual accounts were as follows: $6,300 each$16,107 to Mr. Pyne, $21,107 to Mr. Nolen, $22,450 to Mr. Lawrence, $16,107 to Mr. Valerius and $17,877 to Mr. Strahan. Also, cash distributions were made in 2008 for excess benefit contributions in 2007 under the Profit Sharing Plan as follows: $16,608 to Mr. Pyne, $11,608 to Mr. Nolen, $10,265 to Mr. Lawrence, $16,608 to Mr. Valerius and $22,512 to Mr. Strahan. For 2007, the Company’s contributions under the Deferred Compensation Plan for Key Employees were as follows: $68,511 to Mr. Pyne, $11,348 to Mr. Nolen, $43,306 to Mr. Lawrence, $21,522 to Mr. Valerius and $2,975 to Mr. Strahan. |
Grants of Plan Based Awards During 2008
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | All Other
| | | All Other
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Stock
| | | Option
| | | Exercise
| | | Grant Date
| | | | | | | |
| | | | | | | | | | | | | | | Awards:
| | | Awards:
| | | or Base
| | | Fair Value
| | | | | | | |
| | | | | | Estimated Future Payouts
| | | Number of
| | | Number of
| | | Price of
| | | of Stock
| | | | | | | |
| | | | | | Under Non-Equity Incentive
| | | Shares of
| | | Securities
| | | Option
| | | and
| | | | | | | |
| | | Grant
| | | Plan Awards(1) | | | Stock or
| | | Underlying
| | | Awards
| | | Option
| | | | | | | |
Name | | Date | | | Threshold | | | Target | | | Maximum | | | Units(2) | | | Options(3) | | | ($/sh) | | | Awards(4) | | | | | | | |
| |
| Joseph H. Pyne | | | 02/08/08 | | | $ | 240,000 | | | $ | 1,200,000 | | | $ | 2,400,000 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 02/08/08 | | | | | | | | | | | | | | | | 25,000 | | | | | | | | | | | $ | 1,222,380 | | | | | | | | | |
| | | | 02/08/08 | | | | | | | | | | | | | | | | | | | | 47,022 | | | $ | 48.00 | | | | 580,722 | | | | | | | | | |
| Norman W. Nolen | | | 02/08/08 | | | | 52,800 | | | | 264,000 | | | | 528,000 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 02/08/08 | | | | | | | | | | | | | | | | 5,500 | | | | | | | | | | | | 268,920 | | | | | | | | | |
| | | | 02/08/08 | | | | | | | | | | | | | | | | | | | | 10,345 | | | | 48.00 | | | | 127,761 | | | | | | | | | |
| C. Berdon Lawrence | | | 02/08/08 | | | | | | | | | | | | | | | | 10,832 | | | | | | | | | | | | 529,620 | | | | | | | | | |
| | | | 02/08/08 | | | | | | | | | | | | | | | | | | | | 40,364 | | | | 48.00 | | | | 498,495 | | | | | | | | | |
| Dorman L. Strahan | | | 02/08/08 | | | | 24,400 | | | | 122,000 | | | | 244,000 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 02/08/08 | | | | | | | | | | | | | | | | 2,542 | | | | | | | | | | | | 124,320 | | | | | | | | | |
| | | | 02/08/08 | | | | | | | | | | | | | | | | | | | | 4,781 | | | | 48.00 | | | | 59,045 | | | | | | | | | |
| Steven P. Valerius | | | 02/08/08 | | | | 59,120 | | | | 295,600 | | | | 591,200 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 02/08/08 | | | | | | | | | | | | | | | | 6,158 | | | | | | | | | | | | 301,080 | | | | | | | | | |
| | | | 02/08/08 | | | | | | | | | | | | | | | | | | | | 11,583 | | | | 48.00 | | | | 143,050 | | | | | | | | | |
21
| | |
| (1) | | Amounts shown represent long-term performance awards made to four of the five named executive officers in 2008 for the2008-2010 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, 2008. 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 and Mr. Nolen) or by the Company and its business groups (in the case of Mr. Valerius and Mr. Nolen,Strahan) on a cumulative basis for the three-year performance period of the objective levels of EBITDA, return on total capital and $6,180earnings 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 2008, the first year of the performance period, the Company and its business groups achieved approximately108-115% of the target performance measures (depending on the weighting for the different participants), but any payout to Mr. Buese. |
14
Stock Options Granted, Option Exercises and Year End Value
The following table includes information on grants of stock options during 2005 to the five named executive officers. The amounts shown for the named executive officers as potential realizable value for such options are based on assumed annual rates of stock price appreciation of 0%, 5% and 10% over the full five-year terms of the options granted. The amounts shown as potential realizable value for all stockholders as a group represent the corresponding increases in the market value of 25,970,766 outstanding shares of common stock held by all stockholders as of December 31, 2005. The potential realizable values are based solely on arbitrarily assumed rates of appreciation required by applicable SEC regulations. Actual gains, if any, on stock option exercises are dependent on the future performance of the common stock and overall market conditions. There can be no assurance that the amounts reflected in this table will be achieved.
Stock Options Granted in 2005
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | Potential Realized Value at Assumed |
| | | | Annual Rates of Stock Price |
| | Individual Grants | | Appreciation for Option Term(3) |
| |
| |
|
| | | | % of Total | | | | |
| | | | Options | | | | 0% | | 5% | | 10% |
| | | | Granted to | | Exercise | | | | Annual | | Annual | | Annual |
| | Options | | Employees | | or Base | | Expiration | | Growth | | Growth | | Growth |
| Name | | Granted(1) | | in 2005 | | Price | | Date | | Rate(2) | | Rate(2) | | Rate(2) |
| |
| |
| |
| |
| |
| |
| |
|
| Mark R. Buese | | | 2,500 | | | | 2.31 | % | | $ | 41.78 | | | | 01/24/10 | | | $ | 0 | | | $ | 28,858 | | | $ | 63,768 | |
| C. Berdon Lawrence | | | 30,000 | | | | 27.73 | % | | | 44.09 | | | | 03/02/10 | | | | 0 | | | | 365,439 | | | | 807,522 | |
| Norman W. Nolen | | | 8,300 | | | | 7.67 | % | | | 44.09 | | | | 03/02/10 | | | | 0 | | | | 101,105 | | | | 223,414 | |
| Joseph H. Pyne | | | 33,300 | | | | 30.78 | % | | | 44.09 | | | | 03/02/10 | | | | 0 | | | | 405,637 | | | | 896,349 | |
| Steven P. Valerius | | | 9,500 | | | | 8.78 | % | | | 44.09 | | | | 03/02/10 | | | | 0 | | | | 115,722 | | | | 255,715 | |
| All stockholders as a group | | | N/A | | | | N/A | | | | 52.17 | (4) | | | N/A | | | | 0 | | | | 374,332,233 | (4) | | | 827,176,688 | (4) |
| the participating executive officers cannot be determined until the remaining two years of the performance period are completed. |
(1) |
| (2) | | Represents the number of shares awarded in 2008 for restricted stock awards under the Company’s 2005 Stock and Incentive Plan. The restricted stock awards vest 20% on January 24th of each year following the original award date. |
|
| (3) | | Represents the number of stock options awarded in 2008 under the Company’s 2005 Stock and Incentive Plan. These options become one-third exercisable 33% after one year, 67%two-thirds exercisable after two years, and 100%are fully exercisable after three years from the date of grant. The exercise price for the options may be paid with already owned shares of common stock.stock owned for at least six months. No stock appreciation rights were granted with the stock options. |
| |
(2) (4) | For stock options, the value is | The grant date fair values are calculated based on the exercise price per shareprovisions of common stock, which wasSFAS 123R. Restricted shares are valued at the average of the high and low sales price per shareprices of the Company’s common stock on the NYSE on the date of grant.grant, resulting in a fair value of $48.895 per share on February 8, 2008. The Black-Scholes option pricing model is used to determine the fair value of stock options, resulting in a value of $12.35 per share on February 8, 2008. |
Outstanding Equity Awards at December 31, 2008
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 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 | | | | 101,988 | | | $ | 2,790,392 | |
| | | | — | | | | 39,258 | | | $ | 35.66 | | | | 01/26/12 | | | | | | | | | |
| | | | — | | | | 47,022 | | | $ | 48.00 | | | | 02/08/13 | | | | | | | | | |
| Norman W. Nolen | | | 5,534 | | | | — | | | $ | 22.05 | | | | 03/02/10 | | | | 23,134 | | | $ | 632,946 | |
| | | | 5,534 | | | | 5,534 | | | $ | 27.60 | | | | 02/15/11 | | | | | | | | | |
| | | | 4,426 | | | | 8,854 | | | $ | 35.66 | | | | 01/26/12 | | | | | | | | | |
| | | | — | | | | 10,345 | | | $ | 48.00 | | | | 02/08/13 | | | | | | | | | |
| C. Berdon Lawrence | | | — | | | | 20,000 | | | $ | 27.60 | | | | 02/15/11 | | | | 40,352 | | | $ | 1,104,031 | |
| | | | 16,000 | | | | 32,000 | | | $ | 35.66 | | | | 01/26/12 | | | | | | | | | |
| | | | — | | | | 40,364 | | | $ | 48.00 | | | | 02/08/13 | | | | | | | | | |
| Dorman L. Strahan | | | 4,200 | | | | — | | | $ | 22.05 | | | | 03/02/10 | | | | 8,492 | | | $ | 232,341 | |
| | | | 2,800 | | | | 1,400 | | | $ | 27.60 | | | | 02/15/11 | | | | | | | | | |
| | | | 1,333 | | | | 2,667 | | �� | $ | 36.94 | | | | 02/15/12 | | | | | | | | | |
| | | | — | | | | 4,781 | | | $ | 48.00 | | | | 02/08/13 | | | | | | | | | |
| Steven P. Valerius | | | 12,666 | | | | 6,334 | | | $ | 27.60 | | | | 02/15/11 | | | | 25,760 | | | $ | 704,794 | |
| | | | 5,066 | | | | 10,134 | | | $ | 35.66 | | | | 01/26/12 | | | | | | | | | |
| | | | — | | | | 11,583 | | | $ | 48.00 | | | | 02/08/13 | | | | | | | | | |
22
| | |
| (1) | | The unexercisable options held by the named executive officers are exercisable or become exercisable, as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Vesting Dates | |
Name | | 01/26/09 | | | 02/08/09 | | | 02/15/09 | | | 01/26/10 | | | 02/08/10 | | | 02/15/10 | | | 02/08/11 | | | Total | |
| |
| Joseph H. Pyne | | | 15,674 | | | | 24,536 | | | | 19,629 | | | | 19,629 | | | | 15,674 | | | | — | | | | 15,674 | | | | 110,816 | |
| Norman W. Nolen | | | 4,427 | | | | 3,448 | | | | 5,534 | | | | 4,427 | | | | 3,448 | | | | — | | | | 3,449 | | | | 24,733 | |
| C. Berdon Lawrence | | | 16,000 | | | | 13,454 | | | | 20,000 | | | | 16,000 | | | | 13,455 | | | | — | | | | 13,455 | | | | 92,364 | |
| Dorman L. Strahan | | | — | | | | 1,593 | | | | 2,733 | | | | — | | | | 1,594 | | | | 1,334 | | | | 1,594 | | | | 8,848 | |
| Steven P. Valerius | | | 5,067 | | | | 3,861 | | | | 6,334 | | | | 5,067 | | | | 3,861 | | | | — | | | | 3,861 | | | | 28,051 | |
| | |
(3) (2) | Potential realizable value amounts | The vesting dates of the restricted stock awards for the named executive officers have been calculated by multiplying the exercise price by the annual appreciation rate shown (compounded for the five-year termare as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Vesting
| | Award Dates | |
Name | | Dates | | 01/26/04 | | | 03/02/05 | | | 02/15/06 | | | 1/22/07 | | | 02/15/07 | | | 02/08/08 | | | Total | |
| |
| Joseph H. Pyne | | 01/26/09 | | | 10,000 | | | | | | | | | | | | 6,579 | | | | | | | | 5,000 | | | | 21,579 | |
| | | 02/17/09 | | | | | | | | | | | 8,224 | | | | | | | | | | | | | | | | 8,224 | |
| | | 03/02/09 | | | | | | | 8,000 | | | | | | | | | | | | | | | | | | | | 8,000 | |
| | | 01/24/10 | | | | | | | | | | | | | | | 6,579 | | | | | | | | 5,000 | | | | 11,579 | |
| | | 02/15/10 | | | | | | | | | | | 8,224 | | | | | | | | | | | | | | | | 8,224 | |
| | | 03/02/10 | | | | | | | 8,000 | | | | | | | | | | | | | | | | | | | | 8,000 | |
| | | 01/24/11 | | | | | | | | | | | | | | | 6,579 | | | | | | | | 5,000 | | | | 11,579 | |
| | | 02/15/11 | | | | | | | | | | | 8,224 | | | | | | | | | | | | | | | | 8,224 | |
| | | 01/24/12 | | | | | | | | | | | | | | | 6,579 | | | | | | | | 5,000 | | | | 11,579 | |
| | | 01/24/13 | | | | | | | | | | | | | | | | | | | | | | | 5,000 | | | | 5,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 101,988 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Norman W. Nolen | | 01/26/09 | | | 2,474 | | | | | | | | | | | | 1,440 | | | | | | | | 1,100 | | | | 5,014 | |
| | | 02/17/09 | | | | | | | | | | | 1,800 | | | | | | | | | | | | | | | | 1,800 | |
| | | 03/02/09 | | | | | | | 2,000 | | | | | | | | | | | | | | | | | | | | 2,000 | |
| | | 01/24/10 | | | | | | | | | | | | | | | 1,440 | | | | | | | | 1,100 | | | | 2,540 | |
| | | 02/15/10 | | | | | | | | | | | 1,800 | | | | | | | | | | | | | | | | 1,800 | |
| | | 03/02/10 | | | | | | | 2,000 | | | | | | | | | | | | | | | | | | | | 2,000 | |
| | | 01/24/11 | | | | | | | | | | | | | | | 1,440 | | | | | | | | 1,100 | | | | 2,540 | |
| | | 02/15/11 | | | | | | | | | | | 1,800 | | | | | | | | | | | | | | | | 1,800 | |
| | | 01/24/12 | | | | | | | | | | | | | | | 1,440 | | | | | | | | 1,100 | | | | 2,540 | |
| | | 01/24/13 | | | | | | | | | | | | | | | | | | | | | | | 1,100 | | | | 1,100 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 23,134 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| C. Berdon Lawrence | | 01/26/09 | | | | | | | | | | | | | | | 2,880 | | | | | | | | 2,166 | | | | 5,046 | |
| | | 02/17/09 | | | | | | | | | | | 3,600 | | | | | | | | | | | | | | | | 3,600 | |
| | | 03/02/09 | | | | | | | 3,600 | | | | | | | | | | | | | | | | | | | | 3,600 | |
| | | 01/24/10 | | | | | | | | | | | | | | | 2,880 | | | | | | | | 2,166 | | | | 5,046 | |
| | | 02/15/10 | | | | | | | | | | | 3,600 | | | | | | | | | | | | | | | | 3,600 | |
| | | 03/02/10 | | | | | | | 3,600 | | | | | | | | | | | | | | | | | | | | 3,600 | |
| | | 01/24/11 | | | | | | | | | | | | | | | 2,880 | | | | | | | | 2,166 | | | | 5,046 | |
| | | 02/15/11 | | | | | | | | | | | 3,600 | | | | | | | | | | | | | | | | 3,600 | |
| | | 01/24/12 | | | | | | | | | | | | | | | 2,880 | | | | | | | | 2,167 | | | | 5,047 | |
| | | 01/24/13 | | | | | | | | | | | | | | | | | | | | | | | 2,167 | | | | 2,167 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 40,352 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Dorman L. Strahan | | 01/26/09 | | | 710 | | | | | | | | | | | | | | | | 720 | | | | 508 | | | | 1,938 | |
| | | 02/17/09 | | | | | | | | | | | 440 | | | | | | | | | | | | | | | | 440 | |
| | | 03/02/09 | | | | | | | 520 | | | | | | | | | | | | | | | | | | | | 520 | |
| | | 01/24/10 | | | | | | | | | | | | | | | | | | | 720 | | | | 508 | | | | 1,228 | |
| | | 02/15/10 | | | | | | | | | | | 440 | | | | | | | | | | | | | | | | 440 | |
| | | 03/02/10 | | | | | | | 520 | | | | | | | | | | | | | | | | | | | | 520 | |
| | | 01/24/11 | | | | | | | | | | | | | | | | | | | 720 | | | | 508 | | | | 1,228 | |
| | | 02/15/11 | | | | | | | | | | | 440 | | | | | | | | | | | | | | | | 440 | |
| | | 01/24/12 | | | | | | | | | | | | | | | | | | | 720 | | | | 509 | | | | 1,229 | |
| | | 01/24/13 | | | | | | | | | | | | | | | | | | | | | | | 509 | | | | 509 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,492 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
23
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Vesting
| | Award Dates | |
Name | | Dates | | 01/26/04 | | | 03/02/05 | | | 02/15/06 | | | 1/22/07 | | | 02/15/07 | | | 02/08/08 | | | Total | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Steven P. Valerius | | 01/26/09 | | | 2,642 | | | | | | | | | | | | 1,600 | | | | | | | | 1,231 | | | | 5,473 | |
| | | 02/17/09 | | | | | | | | | | | 2,000 | | | | | | | | | | | | | | | | 2,000 | |
| | | 03/02/09 | | | | | | | 2,280 | | | | | | | | | | | | | | | | | | | | 2,280 | |
| | | 01/24/10 | | | | | | | | | | | | | | | 1,600 | | | | | | | | 1,231 | | | | 2,831 | |
| | | 02/15/10 | | | | | | | | | | | 2,000 | | | | | | | | | | | | | | | | 2,000 | |
| | | 03/02/10 | | | | | | | 2,280 | | | | | | | | | | | | | | | | | | | | 2,280 | |
| | | 01/24/11 | | | | | | | | | | | | | | | 1,600 | | | | | | | | 1,232 | | | | 2,832 | |
| | | 02/15/11 | | | | | | | | | | | 2,000 | | | | | | | | | | | | | | | | 2,000 | |
| | | 01/24/12 | | | | | | | | | | | | | | | 1,600 | | | | | | | | 1,232 | | | | 2,832 | |
| | | 01/24/13 | | | | | | | | | | | | | | | | | | | | | | | 1,232 | | | | 1,232 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 25,760 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| (3) | | The market value of the options), subtracting the exercise price per share and multiplying the gain per share by the numbershares of shares covered by the option. The derived potential realized valuerestricted stock that had not vested as of December 31, 2008 is the nominal undiscounted future value not adjusted for inflation. |
|
(4) | For stockholders as a group, the potential realized value reflects the appreciation over $52.17 per share of common stock, which wascalculated using the closing price per share of the Company’s common stock on December 31, 2005, for 25,970,766 outstanding shares of common stock as of December 31, 2005.2008, which was $27.36 per share. |
15
The following table summarizes for each of the named executive officers their option exercises in 2005 and the value of their options at December 31, 2005:
Aggregated Option Exercises in 2005 and 2005 Year-End Option ValuesStock Vested During 2008| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | Number of Shares | | |
| | | | | | Underlying Unexercised | | Value of Unexercised |
| | | | | | Options at | | In-The-Money Options at |
| | Shares | | | | December 31, 2005 | | December 31, 2005(2) |
| | Acquired on | | Value | |
| |
|
| Name | | Exercise | | Realized(1) | | Exercisable | | Unexercisable | | Exercisable | | Unexercisable |
| |
| |
| |
| |
| |
| |
|
| Mark R. Buese | | | 13,000 | | | $ | 411,688 | | | | 66,833 | | | | 9,167 | | | $ | 2,063,257 | | | $ | 169,942 | |
| C. Berdon Lawrence | | | 165,000 | | | | 4,265,634 | | | | — | | | | 85,000 | | | | — | | | | 1,399,422 | |
| Norman W. Nolen | | | 137,716 | | | | 4,509,832 | | | | 2,771 | | | | 19,388 | | | | 50,564 | | | | 315,788 | |
| Joseph H. Pyne | | | 498,000 | | | | 15,229,363 | | | | 95,448 | | | | 68,010 | | | | 2,331,499 | | | | 1,047,688 | |
| Steven P. Valerius | | | 17,758 | | | | 437,823 | | | | 34,797 | | | | 21,340 | | | | 1,031,265 | | | | 342,361 | |
| | | | | | | | | | | | | | | | | |
| | | 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 | | | 187,364 | | | $ | 6,144,690 | | | | 40,548 | | | $ | 1,797,007 | |
| Norman W. Nolen | | | — | | | | — | | | | 10,190 | | | | 449,894 | |
| C. Berdon Lawrence | | | 210,000 | | | | 3,234,848 | | | | 10,080 | | | | 461,880 | |
| Dorman L. Strahan | | | 4,764 | | | | 184,450 | | | | 3,100 | | | | 135,901 | |
| Steven P. Valerius | | | 36,758 | | | | 1,237,077 | | | | 11,166 | | | | 493,454 | |
| | |
| (1) | | Based on the average of the high and low sales price per shareprices of the Company’s common stock on the date of exercise. |
| |
| (2) | Value based | Based on $52.17 per sharethe average of common stock, which was the closing price per sharehigh and low prices of the Company’s common stock on the date of vesting. |
Pension Benefits
| | | | | | | | | | | |
| | | | | Years of
| | | Present Value of
| |
| | | | | Credited
| | | Accumulated
| |
Name | | Plan Name | | Service | | | Benefit | |
| |
| Joseph H. Pyne | | Kirby Inland Marine LP — | | | — | | | $ | 447,575 | |
| | | Deferred Compensation Plan(1) | | | | | | | | |
| C. Berdon Lawrence | | Kirby Pension Plan(2) | | | 29 | | | | 957,855 | |
| Steven P. Valerius | | Kirby Pension Plan(2) | | | 21 | | | | 132,070 | |
| | | Supplemental Executive | | | 21 | | | | 235,197 | |
| | | Retirement Plan(3) | | | | | | | | |
| | |
| (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 and Mr. Valerius, also are participants in the Kirby Pension Plan, but ceased to accrue additional benefits effective December 31, 2005.1999. |
24
The following table provides information as of December 31, 2005 with respect to shares of the Company’s common stock that may be issued under the existing equity compensation plans, including the Company’s 1989 Employee Stock Option Plan, the 1994 Employee Stock Option Plan, the 1996 Employee Stock Option Plan, the 2001 Employee Stock Option Plan, the 2002 Stock and Incentive Plan, the 2005 Stock and Incentive Plan, the 1989 Director Stock Option Plan, the 1994 Nonemployee Director Stock Option Plan and the 2000 Nonemployee Director Stock Option Plan:
| | |
| | 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. |
Nonqualified Deferred Compensation
| | | | | | | | | | | | | |
| | | Registrant
| | | | | | | |
| | | Contributions in
| | | Aggregate
| | | Aggregate
| |
| | | Last Fiscal
| | | Earnings (Loss) in
| | | Balance at
| |
Name | | Year(1) | | | Last Fiscal Year(2) | | | Last Fiscal Year End | |
| |
| Joseph H. Pyne | | $ | — | | | $ | (253,104 | ) | | $ | 1,070,827 | |
| Norman W. Nolen | | | — | | | | (33,499 | ) | | | 73,557 | |
| C. Berdon Lawrence | | | — | | | | (120,816 | ) | | | 265,748 | |
| Dorman L. Strahan | | | — | | | | (791 | ) | | | 2,269 | |
| Steven P. Valerius | | | — | | | | (40,652 | ) | | | 355,676 | |
| | |
| (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 ($230,000 for 2008). Contributions for 2008, which would otherwise be included in this column, have not been determined as of the date of this Proxy Statement. For 2007, the Company’s contributions under the Deferred Compensation Plan for Key Employees were as follows: $68,511 to Mr. Pyne, $11,348 to Mr. Nolen, $43,306 to Mr. Lawrence, $21,522 to Mr. Valerius and $2,975 to Mr. Strahan. |
|
| (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. |
Equity Compensation Plan Information as of December 31, 20052008| | | | | | | | | | | | | | |
| | | | | | 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 | | | 928,106 | | | $ | 28.85 | | | | 1,133,325 | |
| Equity compensation plans not approved by stockholders(1) | | | 148,361 | | | $ | 29.46 | | | | 124,593 | |
| | | |
| | | | | | | |
| |
| | Total | | | 1,076,467 | | | $ | 28.93 | | | | 1,257,918 | |
| | | |
| | | | | | | |
| |
| | | | | | | | | | | | | |
| | | | | | | | | Number of Securities
| |
| | | | | | | | | Remaining Available
| |
| | | | | | | | | for Future Issuance
| |
| | | Number of
| | | | | | Under Equity
| |
| | | Securities to be
| | | | | | Compensation Plans
| |
| | | Issued Upon
| | | Weighted-Avereage
| | | (Excluding Securities
| |
| | | Exercise of
| | | Exercise Price of
| | | Reflected in First
| |
Plan Category | | Outstanding Options | | | Outstanding Options | | | Column) | |
| |
| Equity compensation plans approved by stockholders | | | 526,181 | | | $ | 34.71 | | | | 2,146,723 | |
| Equity compensation plans not approved by stockholders(1) | | | 297,572 | | | $ | 31.78 | | | | 442,707 | |
| | | | | | | | | | | | | |
| Total | | | 823,753 | | | $ | 33.65 | | | | 2,589,430 | |
| | | | | | | | | | | | | |
| | |
| (1) | | 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 “THE BOARD“BOARD OF DIRECTORS AND BOARD COMMITTEES — Director Compensation” on page 7.Compensation.” |
16
Long-Term Incentive Plan Awards GrantedPotential Payments Upon Change in 2005ControlThe following table summarizes long-term incentive compensation
If a change in
the form of performance awards made in 2005control were to
eachhave occurred on December 31, 2008, all of the named executive
officers:| | | | | | | | | | | | | | | | | | | | | |
| | | | Performance or Other | | | | | | |
| | | | Period Until | | | | | | |
| | Number of Shares, | | Maturation or | | | | | | |
| Name | | Units or Other Rights | | Payout | | Threshold(1) | | Target | | Maximum |
| |
| |
| |
| |
| |
|
| Norman W. Nolen | | | | | | | 3 years | | | $ | 48,420 | | | $ | 242,100 | | | $ | 484,200 | |
| Joseph H. Pyne | | | | | | | 3 years | | | | 194,000 | | | | 970,000 | | | | 1,940,000 | |
| Steven P. Valerius | | | | | | | 3 years | | | | 55,240 | | | | 276,200 | | | | 552,400 | |
25
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 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 $27.36 per share on December 31, 2008, the last trading day before year-end.
Joseph H. Pyne
Mr. Pyne’s options to purchase an aggregate of 110,816 shares of Company common stock would have become fully exercisable on December 31, 2008, if a change in control had occurred on that date. However, all the option awards have exercise prices higher than the year end stock price of $27.36 resulting in no value.
Mr. Pyne had 101,988 shares of Company restricted stock awards that were not vested as of December 31, 2008. If a change of control had occurred on that date, the 101,988 shares would have become fully vested. The maximum value of the accelerated vesting of Mr. Pyne’s restricted stock awards would have been $2,790,392 ($27.36 per share value on December 31, 2008, multiplied by 101,988 restricted shares).
On December 31, 2008, Mr. Pyne would have become entitled to payments under previously granted performance awards totaling $1,420,397 if a change in control had occurred on that date.
Norman W. Nolen
Mr. Nolen’s options to purchase an aggregate of 40,227 shares of Company common stock would have become fully exercisable on December 31, 2008, if a change in control had occurred on that date. Under the terms of Mr. Nolen’s stock options, he would have to pay $121,997 to purchase 5,534 of these shares. Accordingly, the maximum value of the accelerated vesting of the 5,534 options would have been $29,413 ($27.36 per share value on December 31, 2008, multiplied by 5,534 shares minus $121,997, the aggregate exercise price of the options). All the other option awards have exercise prices higher than the year end stock price of $27.36 resulting in no value.
Mr. Nolen had 23,134 shares of Company restricted stock awards that were not vested as of December 31, 2008. If a change of control had occurred on that date, the 23,134 shares would have become fully vested. The maximum value of the accelerated vesting of Mr. Nolen’s restricted stock awards would have been $632,946 ($27.36 per share value on December 31, 2008, multiplied by 23,134 restricted shares).
On December 31, 2008, Mr. Nolen would have become entitled to payments under previously granted performance awards totaling $311,403 if a change in control had occurred on that date.
| |
(1) C. | Amount payable if 80% of performance target is achieved; if less than 80% is achieved, there is no payment.Berdon Lawrence |
Mr. Lawrence’s options to purchase an aggregate of 108,364 shares of Company common stock would have become fully exercisable on December 31, 2008, if a change in control had occurred on that date. However, all the option awards have exercise prices higher than the year end stock price of $27.36 resulting in no value.
Mr. Lawrence had 40,352 shares of Company restricted stock awards that were not vested as of December 31, 2008. If a change of control had occurred on that date, the 40,352 shares would have become fully vested. The maximum value of the accelerated vesting of Mr. Lawrence’s restricted stock awards would have been $1,104,031 ($27.36 per share value on December 31, 2008, multiplied by 40,352 restricted shares).
Dorman L. Strahan
Mr. Strahan’s options to purchase an aggregate of 17,181 shares of Company common stock would have become fully exercisable on December 31, 2008, if a change in control had occurred on that date. Under the terms of Mr. Strahan’s stock options, he would have to pay $92,589 to purchase 4,200 of these shares. Accordingly, the maximum value of the accelerated vesting of the 4,200 options would have been $22,323 ($27.36 per share value on
26
December 31, 2008, multiplied by 4,200 shares minus $92,589, the aggregate exercise price of the options). All the other option awards have exercise prices higher than the year end stock price of $27.36 resulting in no value.
Mr. Strahan had 8,492 shares of Company restricted stock awards that were not vested as of December 31, 2008. If a change of control had occurred on that date, the 8,492 shares would have become fully vested. The long-termmaximum value of the accelerated vesting of Mr. Strahan’s restricted stock awards would have been $232,341 ($27.36 per share value on December 31, 2008, multiplied by 8,492 restricted shares).
On December 31, 2008, Mr. Strahan would have become entitled to payments under previously granted performance awards madetotaling $148,202 if a change in control had occurred on that date.
Steven P. Valerius
Mr. Valerius’ options to purchase an aggregate of 45,783 shares of Company common stock would have become fully exercisable on December 31, 2008, if a change in control had occurred on that date. However, all the named executive officersoption awards have exercise prices higher than the year end stock price of $27.36 resulting in 2005no value.
Mr. Valerius had 25,760 shares of Company restricted stock awards that were basednot vested as of December 31, 2008. If a change of control had occurred on achievementthat date, the 25,760 shares would have become fully vested. The maximum value of the accelerated vesting of Mr. Valerius’ restricted stock awards would have been $704,794 ($27.36 per share value on December 31, 2008, multiplied by 25,760 restricted shares).
On December 31, 2008, Mr. Valerius would have become entitled to payments under previously granted performance awards totaling $363,988 if a cumulative basis over a three-year performance periodchange in control had occurred on 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 EBITDA (net earnings before interest expense, taxes on income, depreciationfinancial reporting, accounting procedures and amortization), return on total capitalinternal controls. The Audit Committee is composed of four directors, all of whom are independent within the meaning of SEC and earnings per share targets establishedNYSE rules. The Audit Committee operates under a written charter adopted by the Board.
Management is primarily responsible for the Company’s
annual incentive bonus plan.Compensation Agreements
Kirby Inland Marine, LPfinancial 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 a Deferred Compensation Agreement with Mr. Pyne in connection with his previous employment as its President. The agreement provides for benefits to Mr. Pyne totaling $4,175 per month commencing uponreviewed and discussed the later of his severance from the employmentaudited financial statements of the Company or his 65th birthdayfor the year ended December 31, 2008 with management and continuing until the monthindependent auditors. The Audit Committee also (a) discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 114, as amended and as adopted by the Public Company Accounting Oversight Board (the “PCAOB”), (b) received the written disclosures and letter from the independent auditors required by the applicable requirements of his death. If Mr. Pyne should die priorthe 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, 2008 and the Audit Committee’s discussions with management and the independent auditors, the Audit Committee recommended to
receiving such deferred compensation, the
agreement provides for monthly payments to his beneficiary for a periodBoard of
sixty months. The agreement also providesDirectors of the Company that
no benefits willthe audited financial statements be
paid if Mr. Pyne is terminated for cause (as definedincluded in the
agreement).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 being compensated in excess of a certain level ($220,000 per year under current rules). The following table disclosesAnnual Report onForm 10-K for the named executive officersyear ended December 31, 2008, which has been filed with the amount of contributions to the Deferred Compensation Plan for 2003Securities and 2004. Contributions for 2005 have not been determined as of the date of this Proxy Statement.
| | | | | | | | | |
| | |
| | Deferred |
| | Compensation Plan |
| |
|
| | 2004 | | 2003 |
| |
| |
|
| C. Berdon Lawrence | | $ | 37,217 | | | $ | 34,558 | |
| Norman W. Nolen | | | 9,436 | | | | 8,401 | |
| Joseph H. Pyne | | | 59,435 | | | | 55,469 | |
| Steven P. Valerius | | | 18,364 | | | | 16,806 | |
AUDIT COMMITTEE
Bob G. Gower,Chairman
C. Sean Day
David L. Lemmon
George A. Peterkin, Jr.
27
17
Common Stock Performance Graph
The performance graph below shows the cumulative total return on the Company’s common stock compared to the Russell 2000 Index and the Dow Jones Marine Transportation Index over the five-year period beginning December 31, 2000. The results are based on an assumed $100 invested on December 31, 2000, and reinvestment of dividends.
RATIFICATION OF THE AUDIT COMMITTEE’S SELECTION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTSACCOUNTING FIRM (ITEM 2)
The Audit Committee has selected KPMG LLP (“KPMG”) as the Company’s independent registered public
accountantsaccounting firm for the fiscal year ending December 31,
2006.2009. KPMG served as the Company’s independent
accountantsaccounting firm for
2005.2008. Although the Audit Committee has the sole authority and responsibility to select and evaluate the performance of the independent
accountantsaccounting firm for the Company, the Board
has decided to askis requesting, as a matter of good corporate governance, that the Company’s stockholders
to ratify the selection of KPMG for
2006.2009.
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
20062009 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
judgement.18
judgment.
Representatives of KPMG are expected to be present at the
20062009 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.
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 three 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 assessment of, and the effective operation of, 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, 2005 with management and the independent auditors. The Audit Committee also discussed with the independent auditors the matters required by Statement on Auditing Standards No. 61 (Communication with Audit Committees), received written disclosures from the independent auditors required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) and 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, 2005 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 on Form 10-K for the year ended December 31, 2005, which has been filed with the Securities and Exchange Commission.
| |
| AUDIT COMMITTEE |
|
| Bob G. Gower,Chairman |
| C. Sean Day |
| George A. Peterkin, Jr. |
Fees Paid to the Independent Registered Public AccountantsAccounting Firm The following table sets forth the fees billed by KPMG, the Company’s independent registered public
accountant,accounting firm, during the last two fiscal years:
| | | | | | | | | | |
| | 2005 | | 2004 |
| |
| |
|
| Audit Fees | | $ | 810,000 | | | $ | 899,000 | |
| Audit-Related Fees | | | 66,000 | | | | 75,000 | |
| Tax Fees | | | 12,000 | | | | 16,000 | |
| | | |
| | | |
| |
| | TOTAL | | $ | 888,000 | | | $ | 990,000 | |
| | | |
| | | |
| |
| | | | | | | | | |
| | | 2008 | | | 2007 | |
| |
| Audit Fees | | $ | 900,000 | | | $ | 898,500 | |
| Audit-Related Fees | | �� | 108,936 | | | | 85,500 | |
| Tax Fees | | | 25,000 | | | | 30,500 | |
| | | | | | | | | |
| TOTAL | | $ | 1,033,936 | | | $ | 1,014,500 | |
| | | | | | | | | |
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.19
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 20052008 included the review of the Company’s 20042007 federal income tax return and for 2004 included the review of the Company’s 2003 and 2002 amended federal income tax returns.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.
The Board of Directors of the Company unanimously recommends athat you vote “FOR” the ratification of the appointmentselection of KPMG LLP as the Company’s independent registered public accountantsaccounting firm for 2006.2009.
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.
28
STOCKHOLDER PROPOSALS FOR 20072010 ANNUAL MEETING Stockholder proposals must be received by the Company at its principal executive offices no later than November
7, 20065, 2009 to be considered for inclusion in the Company’s proxy statement and form of proxy for the
20072010 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 7, 20065, 2009
Houston, Texas
29
20
| (BAR CODE) (LOGO) (BAR CODE)C123456789 000004 000000000.000000 ext 000000000.000000 ext (BAR CODE)MR A SAMPLE 000000000.000000 ext 000000000.000000 ext DESIGNATION (IF ANY) 000000000.000000 ext 000000000.000000 ext ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 (BAR CODE) Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Annual Meeting Proxy Card 6 PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 6 A Proposals — The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposal 2. 1.Election of Directors: For Against Abstain For AgainstAbstain ForAgainst Abstain + 01 — Bob G. Gower 02 — Monte J. Miller 03 — Joseph H. Pyne For Against Abstain ForAgainstAbstain To ratify the selection of KPMG LLP as Kirby Corporation’s independent In their discretion, the Proxies are authorized to vote upon such 2.registered public accounting firm for 2009. 3. other business as may properly come before the meeting. BNon-Voting Items 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. Date (mm/dd/yyyy) — Please print date below.Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE C 1234567890 J N T 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND 4 3 A M 0 1 6 9 3 0 MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND (BAR CODE)1 MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND+ <STOCK#> 00UPXB |
EXHIBIT A
KIRBY CORPORATION
CRITERIA FOR THE SELECTION OF DIRECTORS
Criteria Applicable to the Board of Directors and Committees:
1. The Board and its Committees must satisfy the independence requirements of applicable law and the New York Stock Exchange.
2. The Board should have diverse experience at management or policy-making levels in areas relevant to Kirby’s business.
3. A sufficient number of directors must have the requisite expertise to enable the Audit Committee as a whole to satisfy the requirements of applicable securities laws, rules and regulations and New York Stock Exchange standards.
Criteria to be Considered in Evaluating the Qualifications of Individual Director Candidates:
1. Reputation for character and integrity.
2. Business or professional experience.
3. Understanding of the marine transportation business, the chemical and refining business and corporate strategy and finance, particularly for public companies.
4. Understanding of the responsibilities of directors of public companies.
5. Willingness to commit sufficient time to Kirby’s business.
6. The number of other boards and board committees on which a person serves.
7. Independence of any particular constituency and the ability to represent the interests of all stockholders of Kirby rather than a particular interest group.
A-1
| 6 PLEASE FOLD ALONG THE PERFORATION, DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL | ZKRB42 |
KIRBY CORPORATION
55 Waugh Drive, Suite 1000
P.O. Box 1745
Houston, Texas 77251-1745
AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 6 (LOGO) 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, Norman W. Nolen, 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, 2006,2, 2009, at the Annual Meeting of Stockholders to be held on April 25, 2006,28, 2009, at 55 Waugh Drive, 8th 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 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 ITEM 2. THE PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO ANY MATTER REFERRED TO IN ITEM 3. |
| | | | |
SEE REVERSE PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
SIDE
| | (Continued and to be signed on reverse side) | | SEE REVERSE
SIDE |
| DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL | ZKRB41 |
| | | | | | |
x | | Please mark votes as in this example. | | | L | #KRB |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL OF THE FOLLOWING ITEMS:
1. | To elect (3) Class II Directors to hold office until the Annual Meeting of Stockholders in 2009. |
| | Nominees:Bob G. Gower, Monte J. Miller and Joseph H. Pyne |
| | | | | | |
FOR
ALL NOMINEES | | o | | o | | WITHHELD FROM ALL NOMINEES |
| | |
o | | |
| | For all nominees except as noted above |
| | | | FOR | | AGAINST | | ABSTAIN |
2. | | To ratify the selection of KPMG LLP as Kirby Corporation’s independent registered public accountants for 2006. | | o | | o | | o |
3. | In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. |
|
| MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT o |
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
Please execute this Proxy as your name(s) appear(s) hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or other fiduciary or representative capacity, please set forth the full title. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, limited liability company or other entity, please sign in entity name by authorized person.
| | | | | | | | | | |
Signature: | | | Date: | | | Signature: | | | Date: | |
