SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
- - ------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - ------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
HOWELL CORPORATION
1111 Fannin, Suite 1500
Houston, Texas 77002
March 21, 2001
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held on Wednesday, April 25, 2001, at 10:00 a.m., in the tenth floor meeting
room of the Howell Corporation Building, 1111 Fannin Street, Houston, Texas
77002.
The accompanying Notice of Annual Meeting and Proxy Statement describe the
formal matters to be acted upon at the meeting. In addition, we will discuss
current matters concerning the future of the Company and review the Company's
operations during the past year. At the conclusion of the formal meeting, an
opportunity will be provided for questions and discussion by the shareholders. A
record of the Company's activities for the year 2000 is contained in the Annual
Report which accompanies this proxy material.
Representation of your shares at the meeting is very important. We urge each
shareholder, whether or not you now plan to attend the meeting, to promptly
date, sign and return the enclosed proxy in the envelope furnished for that
purpose. If you do attend the meeting, you may, if you wish, revoke your proxy
and vote in person.
It is always a pleasure to meet with our shareholders, and I personally look
forward to seeing as many of you as possible at the Annual Meeting.
Sincerely,
/s/ DONALD W. CLAYTON
DONALD W. CLAYTON
Chairman of the Board
HOWELL CORPORATION
1111 Fannin, Suite 1500
Houston, Texas 77002
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, APRIL 25, 2001
To the Shareholders of Howell Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of Howell
Corporation, a Delaware corporation, will be held in the tenth floor meeting
room of the Howell Corporation Building, 1111 Fannin Street, Houston, Texas, on
Wednesday, April 25, 2001, at 10:00 a.m. local time, for the following purposes:
1. to elect three members to the Board of Directors to serve for a
three-year term as Class I Directors;
2. to ratify the appointment of Deloitte & Touche LLP as independent
auditors for the Company for the fiscal year ending December 31, 2001;
and
3. to transact such other business as may properly come before the meeting
or any adjournments thereof.
The Board of Directors has fixed the close of business on February 28, 2001, as
the record date for the determination of shareholders entitled to receive notice
of and to vote at the Annual Meeting. A list of all shareholders entitled to
vote is on file at the principal offices of the Company, 1111 Fannin, Suite
1500, Houston, Texas, and will be available for inspection by any shareholder
during the meeting.
So that we may be sure your shares will be voted at the Annual Meeting, please
date, sign and return the enclosed proxy promptly. For your convenience, a
postpaid return envelope is enclosed for your use in returning your proxy. If
you attend the meeting, you may revoke your proxy and vote in person.
By Order of the Board of Directors,
/s/ ROBERT T. MOFFETT
ROBERT T. MOFFETT
Vice President,
General Counsel
and Secretary
March 21, 2001
HOWELL CORPORATION
1111 Fannin, Suite 1500
Houston, Texas 77002
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 25, 2001
Solicitation and Revocability of Proxies
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Howell Corporation ("Company") to be used
at the Annual Meeting of Shareholders to be held in the tenth floor meeting room
of the Howell Corporation Building, 1111 Fannin Street, Houston, Texas on
Wednesday, April 25, 2001, at 10:00 a.m. local time, and at any and all
adjournments thereof. This Proxy Statement and the enclosed proxy are being
mailed to the shareholders on or about March 21, 2001.
Unless otherwise indicated thereon, proxies in the accompanying form which
are properly executed and duly returned to the Company and which are not revoked
will be voted:
1. for each of the three nominees for director to serve a three-year term
as Class I Directors; and
2. for ratification of the appointment of Deloitte & Touche LLP as
independent auditors for the Company for the year ending December 31,
2001.
Shares represented by proxies marked as abstentions on any matter will not be
voted on that matter, although they will be counted for quorum purposes;
brokers' shares held in "street name" and not voted by them will not be counted
in tabulating votes. An Inspector of Election selected by the Company will
tabulate votes at the Annual Meeting.
The Board of Directors is not presently aware of other proposals that may be
brought before the Annual Meeting. In the event other proposals are brought
before the Annual Meeting, the persons named in the enclosed form of proxy will
vote in accordance with what they consider to be the best interests of the
Company and its shareholders. The proxy also confers on persons named therein,
discretionary authority to vote with respect to any matter presented at the
Annual Meeting for which advance notice was not received by the Company prior to
February 24, 2001.
The cost of soliciting proxies will be borne by the Company. In addition to
the Company's solicitation by mail, proxies may be solicited personally or by
telephone by the management of the Company. The Company may request brokerage
houses or other custodians, nominees and fiduciaries to forward proxies and
proxy material to the beneficial owners of the shares held of record by such
persons and will reimburse them for their reasonable forwarding expenses.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is exercised. Proxies may be revoked by filing
with the Secretary of the Company written notice of revocation, by executing and
delivering a later-dated proxy, or by appearing and voting in person at the
meeting.
Voting Securities and Record Date
The Board of Directors of the Company has fixed the close of business on
February 28, 2001, as the record date ("Record Date") for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting and any
adjournments thereof. Shares held by brokers and not voted by them ("broker
non-votes") and abstentions will be counted as present at the Annual Meeting for
purposes of determining the presence of a quorum. An Inspector of Election
selected by the Company will tabulate votes at the Annual Meeting.
The issued and outstanding voting securities of the Company as of the Record
Date consist of 5,535,733 shares of common stock, $1.00 par value per share
("Common Stock") each of which is entitled to one vote. Shares of Common Stock
are not entitled to cumulative voting rights in the election of Directors. The
presence in person or by proxy of the holders of a majority of the shares of
Common Stock outstanding on the Record Date will be necessary to constitute a
quorum at the Annual Meeting.
Assuming the presence of a quorum of the Common Stock, the affirmative vote
of the holders of a majority of the shares of Common Stock represented in person
or by proxy at the meeting is required for the election of Directors and for
ratification of the appointment of Deloitte & Touche LLP as independent auditors
for the fiscal year ending December 31, 2001. Abstentions will have the effect
of negative votes on these proposals.
The Company also has issued and outstanding, as of the Record Date, 690,000
shares of $3.50 convertible preferred stock, par value $1.00 per share ("Series
A Preferred Stock"). Holders of the Series A Preferred Stock are not entitled to
vote with respect to any matter referred to in this Proxy Statement.
Item 1. Election of Directors
The Company's Board of Directors is divided into three classes, each elected
to serve for a term of three years. The Board of Directors, in accordance with
the Company's Certificate of Incorporation, has established that there shall be
three Class I Directors, three Class II Directors and three Class III Directors.
The three nominees for Class I Directors are Paul N. Howell, Donald W.
Clayton and Richard K. Hebert. It is the intention of the persons named in the
accompanying proxy that proxies will be voted for the election of these three
nominees unless otherwise indicated thereon. Each of the nominees is now a
Director of the Company and is standing for reelection. The Board of Directors
has no reason to believe that any of the nominees will be unable to serve if
elected to office and, to the knowledge of the Board of Directors, the nominees
intend to serve the entire term for which election is sought. Should any nominee
for the office of Director named herein become unable or unwilling to accept
nomination or election, the persons named in the proxy will vote for such other
person as the Board of Directors may recommend. The Company does not consider
security holder nominations.
-2-
Directors to be Elected at the Meeting
Set forth below is certain information regarding each of the three nominees
for election as a Director.
Occupation, Experience and Director
Name and Age Directorships Since
- ------------ ------------- -----
Paul N. Howell.... Retired. Chief Executive Officer 1955
Age: 82 of the Company from 1955 to May
1997. Formerly Chairman of the
Board of the Company from 1978
to 1995. Director of Lodestar
Logistics Corporation.
Donald W. Clayton. Chairman of the Company since May 1997
Age: 64 1997; Chief Executive Officer
from May 1997 to December 2000.
From 1993 to 1997, was co-owner
and President of Voyager Energy
Corp., a privately held oil and
gas exploration company. Served
as President and Director of
Burlington Resources, Inc. and
President and Chief Executive
Officer of Meridian Oil, Inc.
Prior to that, he was a senior
executive with Superior Oil
Company.
Richard K. Hebert. President and Chief Executive 1997
Age: 49 Officer of the Company since
January 2001; President and Chief
Operating Officer from May 1997
to December 2000. From 1993 to
1997, was co-owner and Chief
Executive Officer of Voyager
Energy Corp., a privately held
oil and gas exploration company.
Served as Executive Vice
President and Chief Operating
Officer of Meridian Oil, Inc.,
now Burlington Resources, Inc.
Prior to that, served in various
engineering and management
positions with Mobil Oil
Corporation, Superior Oil Company
and Amoco Production Company.
The Board of Directors of the Company has unanimously approved the election
of the nominees and recommends a vote "FOR" the election of the nominees for
Class I Directors.
Directors Whose Term Extends Beyond the Meeting
Set forth below is certain information regarding each of the
Directors whose term extends beyond the meeting. The Class II
Directors with terms expiring in 2002 are Robert M. Ayres, Jr.,
Ronald E. Hall and Otis A. Singletary. The Class III Directors
with terms expiring in 2003 are Paul W. Murrill, Ken C. Tamblyn
and Khoi V. Tran.
Occupation, Experience and Director
Name and Age Directorships Since
- ------------ ------------- -----
Robert M. Ayres, Jr. Financial consultant for more than 1991
Age: 74 five years. Vice Chancellor and
President Emeritus, University
of the South. Director: James
Avery Craftsman, Inc.
Ronald E. Hall.... Retired. Chairman of the Board of 1995
Age: 68 the Company from 1995 to May
1997. Formerly President and
Chief Executive Officer of CITGO
Petroleum Corporation, a
refining, marketing and
distribution company, from 1985
to 1995. Director of CITGO from
1990 to 1995.
-3-
Paul W. Murrill... Professional Engineer for more than 1994
Age: 66 five years. Chairman and Chief
Executive Officer of Gulf States
Utilities Company, a public
utility, from 1982 to 1987.
Director: Entergy Corporation,
Tidewater, Inc., DTM Corporation
and ChemFirst Inc.
Otis A. Singletary President Emeritus, University of 1977(1)
Age: 79 Kentucky since 1987.
Ken C. Tamblyn.... Retired. Executive Vice President 2000(2)
Age: 57 and Chief Financial Officer of
Tidewater, Inc., from 1992 until
August 2000.
Khoi V. Tran...... Retired. Commercial Manager of the 2000
Age: 58 International Exploration and
Production Division of Pennzoil /
PennzEnergy from 1992 until 1999.
Compensation of Directors
Each member of the Board of Directors who is not an employee of the Company
receives a $5,000 quarterly retainer fee. Members receive $1,000 for attending
Audit Committee meetings. Members of the other committees receive attendance
fees of $1,000 per meeting for attending the meetings of these committees,
unless the committee meets on the same day as the Board of Directors, in which
event no fee is paid. Commensurate remuneration is also paid for service on
other committees and for special assignments as the occasion arises. The Company
reimburses reasonable out-of-pocket expenses incurred by a director in attending
board and committee meetings. Upon election to the Board, each Director receives
an option to acquire 10,000 shares of common stock. Annually, each Director
receives an option to acquire 1,000 additional shares. All options are granted
at market value and have a ten-year term.
Activities of the Board
The Board of Directors held five meetings during 2000. Each Director attended
at least 75% of the meetings of the Board and of any committee of which he was a
member.
The Board of Directors has three standing committees: Audit, Compensation
and Nominating, and Stock Option.
Members of the Audit Committee are Ken C. Tamblyn, Ronald E. Hall and Robert M.
Ayres, Jr.(3) The Audit Committee met three times in 2000. Functions of the
Audit Committee include recommending to the Board of Directors the independent
auditors, approving the estimated fees for such services, reviewing the audit
reports and making such recommendations to the Board of Directors concerning the
audit reports as may be appropriate, meeting with the independent auditors,
financial officers of the Company and other members of management to review the
results of audits, and evaluating the adequacy of the internal control system of
the Company.
- -----------------------
(1) Dr. Singletary also served as a Director in 1969.
(2) Mr. Tamblyn was elected to the Board of Directors by a vote of the Board to
fill the unexpired term of Jack T. Trotter who retired from the Board on
February 28, 2001. Mr. Trotter had served on the Board since 1988.
(3) Mr. Trotter served on the Audit Committee until his retirement.
-4-
Members of the Compensation and Nominating Committee are Donald W. Clayton,
Otis A. Singletary and Paul W. Murrill. The Compensation and Nominating
Committee met twice in 2000. Functions of the Compensation and Nominating
Committee include establishing compensation for the officers of the Company and
reviewing all employee benefit programs, including the recommendation of changes
in the benefits. Additionally, the Committee is responsible for making
nominations to the Board of Directors. The Committee does not consider security
holder nominations.
Members of the Stock Option Committee are Messrs. Ayres, Murrill,
Singletary and Tran. Mr. Trotter served on the Committee until his retirement.
The Committee administers the 1988, 1997 and 1999 Stock Option Plans. The
Committee did not meet formally in 2000.
Compensation and Nominating Committee Report on Executive Compensation
The following report by the Compensation and Nominating Committee to the
Board of Directors discusses the factors the Compensation and Nominating
Committee considers when determining the salary and bonus of the Chief Executive
Officer and other executive officers.
To the Board of Directors:
As members of the Compensation and Nominating Committee, it is our duty to
establish the compensation level of the executive officers, to award bonuses to
the executive officers and to approve the Company's benefit plan arrangements.
The base salary level of the executive officers is recommended to the
Compensation and Nominating Committee by the Chairman of the Board. Factors
considered by the Chairman are typically subjective, such as his perception of
the individual's performance and any planned changes in functional
responsibility, and also include such factors as prior year compensation levels
and general inflationary considerations. The profitability of the Company and
the market value of its stock are not primary considerations in setting
executive officer base compensation, although significant changes in these items
are subjectively considered. Additionally, the Committee considered a report
prepared by a firm of compensation specialists in making its determinations.
The Committee awarded bonuses to the executive officers after subjectively
considering the profitability of the Company and individual performance. In
making such determination, the Committee does not apply any specific criteria.
The perquisites and other benefits received are reported in the Summary
Compensation Table and are provided primarily pursuant to existing employee
benefit programs.
Mr. Clayton is the only member of the Compensation and Nominating Committee
who is a current officer and employee of the Company. No other member of the
Compensation and Nominating Committee is a former or current officer, nor is an
employee of the Company or any of its subsidiaries.
Compensation and Nominating Committee
Paul W. Murrill
Otis A. Singletary
Donald W. Clayton
-5-
Stock Option Committee Report on Executive Compensation
The following report by the Stock Option Committee to the Board of Directors
discusses the factors the Stock Option Committee considers when evaluating the
use of equity-based incentives in compensating the executive officers and key
employees of the Company.
To the Board of Directors:
As members of the Stock Option Committee, it is our duty to administer the
Company's stock option plans. The Committee believes that stock options are an
important component of executive compensation. Administering the Company's plans
includes awarding stock options to executive officers and key employees. The
Company has four stock option plans in effect: the Howell Corporation Omnibus
Stock Awards and Incentive Plan ("Omnibus Plan"); the Howell Corporation
Nonqualified Stock Option Plan for Non-Employee Directors ("Director Plan"); the
Howell Corporation 1997 Nonqualified Stock Option Plan ("1997 Plan"); and the
Howell Corporation 1988 Stock Option Plan ("1988 Plan"). At December 31, 2000,
352,575 options were outstanding with 206,050 options available for grant under
the Omnibus Plan. The 1997 Plan had 18,800 options outstanding and the 1988 Plan
had 333,526 options outstanding. No further options may be granted under the
1997 Plan or the 1988 Plan.
The Committee believes that stock options are important in retaining
executives and motivating them to improve stock market performance. The number
of options granted to each executive officer was determined by considering
position, potential performance and functional responsibilities.
Stock Option Committee
Robert M. Ayres, Jr.
Paul W. Murrill
Otis A. Singletary
Khoi V. Tran
Jack T. Trotter
-6-
Compensation of Executive Officers
Messrs. Donald W. Clayton, Richard K. Hebert, Robert T. Moffett, Allyn R.
Skelton, II, and John E. Brewster, Jr. constituted the executive officers of the
Company at the end of 2000. Mr. Clayton, Mr. Hebert and Mr. Brewster became
executive officers on May 14, 1997. Mr. Moffett became an executive officer on
October 30, 1995. Mr. Skelton became an executive officer on May 18, 1999. The
following table summarizes the compensation paid by the Company, for the three
fiscal years ended December 31, 2000, to each of the named executive officers.
During the period covered by the table, the Company had no long-term incentive
plans or pension plans.
Summary Compensation Table
Annual Compensation Long-term Compensation
------------------------------ -------------------------------------
Other Restricted Securities All
Annual Stock Underlying Other
Name & Principal Position Year Salary Bonus Compensation(1) Awards Options Compensation
($) ($) ($) ($) (#) ($)
Donald W. Clayton 2000 225,000 110,000 6,000 139,063(2) 44,000 15,300(3)
Chairman and 1999 200,000 60,000 6,000 - - 9,600
Chief Executive Officer 1998 200,000 - 6,000 - - 4,667
Richard K. Hebert 2000 225,000 110,000 6,000 139,063(4) 44,000 15,888(5)
President and 1999 200,000 60,000 6,000 - - 10,248
Chief Operating Officer 1998 200,000 - 6,000 - - 5,315
Robert T. Moffett 2000 165,000 100,000 6,000 - 8,000 15,438(6)
Vice President, 1999 150,000 70,000 6,000 - 15,000 9,648
General Counsel and 1998 150,000 - 6,000 - 4,000 10,257
Secretary
Allyn R. Skelton, II 2000 160,000 100,000 6,000 - 8,000 14,988(7)
Vice President and 1999 93,182 40,000 3,730 - 15,000 5,628
Chief Financial Officer 1998 - - - - - -
John E. Brewster, Jr. 2000 150,000 60,000 - - 8,000 14,088(8)
Vice President, Corporate 1999 130,000 65,000 - - 15,000 8,448
Development & Planning 1998 130,000 - - - 4,000 3,681
- ---------
(1) Other annual compensation is auto allowance.
(2) Mr. Clayton has 25,000 restricted shares of common stock valued at $307,813
on December 31, 2000. Dividends are paid on these restricted shares.
(3) Represents Company contributions to a 401(k) plan.
(4) Mr. Hebert has 25,000 restricted shares of common stock valued at $307,813
on December 31, 2000. Dividends are paid on these restricted shares.
(5) Represents Company contributions of $15,300 to a 401(k) plan and $588 for
premiums for term life insurance.
(6) Represents Company contributions of $14,850 to a 401(k) plan and $588 for
premiums for term life insurance.
(7) Represents Company contributions of $14,400 to a 401(k) plan and $588 for
premiums for term life insurance.
(8) Represents Company contributions of $13,500 to a 401(k) plan and $588 for
premiums for term life insurance.
-7-
Compensation Pursuant to Plans
The Stock Option Committee continues to administer the 1988 Plan, a stock
option plan for its executive officers, directors and key employees. Under this
plan the Stock Option Committee could grant options to eligible employees and,
subject to certain limitations, members of the Board of Directors. As of
December 31, 2000, options with respect to 333,526 shares of Common Stock were
outstanding. No additional options may be granted under this Plan.
The 1997 Plan, which expires in 2007, is administered by the Stock Option
Committee for the Company's executive officers, directors and key employees.
Under this plan the Company may grant nonqualified options to eligible employees
and members of the Board of Directors. As of December 31, 2000, options with
respect to 18,800 shares of Common Stock were outstanding. No additional options
may be granted under this Plan.
The Stock Option Committee also administers the Omnibus Plan. The Omnibus
Plan allows the Company to grant stock options and other forms of incentives,
including stock appreciation rights, performance awards and restricted stock
awards, to the Company's executives and key employees. As of December 31, 2000,
options with respect to 352,575 shares of Common Stock were outstanding and
206,050 additional shares were reserved for issuance under this plan.
The following table sets forth the options granted to the individuals named
in the Summary Compensation Table during the last fiscal year.
Option Grants in Last Fiscal Year
Individual Grants(1)
----------------------------------------------
Number of % of Total
Securities Options Potential Realizable
Underlying Granted to Exercise value at Assumed Annual
Options Employees Price Expiration Rates of Stock Price
Name Granted in Year Per Share Date Appreciation for Option Term
--------------------- ---------- ---------- --------- ---------- ----------------------------
(#) (%) ($/Share) 5% 10%
-- ---
Donald W. Clayton 44,000 23 $5.5625 01/02/10 $153,922 $390,068
Richard K. Hebert 44,000 23 $5.5625 01/02/10 $153,922 $390,068
Robert T. Moffett 8,000 4 $5.5625 01/02/10 $27,986 $70,922
Allyn R. Skelton, II 8,000 4 $5.5625 01/02/10 $27,986 $70,922
John E. Brewster, Jr. 8,000 4 $5.5625 01/02/10 $27,986 $70,922
- -------------
(1)Options become exercisable in increments of 25% of the shares covered by the
grant after the lapse of successive one-year periods. Each option has a
ten-year term, but in case of termination of employment, otherwise
exercisable options expire after six months.
-8-
The table below shows the number of shares of Common Stock issued upon the
exercise of options by the executive officers in 2000, the value received upon
exercise of those options, the number of exercisable and unexercisable options
at December 31, 2000, and the value of exercisable and unexercisable options
with an option price of less than $12.3125 per share, which was the market value
of the Company's common stock on December 31, 2000.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-end Option Values
Number of Dollar
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Fiscal Options at Fiscal
Year End Year End
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
---- ----------- -------- ------------- -------------
(#) ($) (#) ($)
Donald W. Clayton - - 0/44,000 0/297,000
Richard K. Hebert - - 0/44,000 0/297,000
Robert T. Moffett - - 35,610/23,670 59,603/168,609
Allyn R. Skelton, II - - 3,750/19,250 30,703/146,109
John E. Brewster, Jr. - - 16,100/24,700 38,203/168,609
Compensation Committee Interlocks and Insider Participation
The Compensation and Nominating Committee of the Company's Board of Directors
is composed of the following: Otis A. Singletary and Paul W. Murrill, neither of
whom is an employee of the Company; and Donald W. Clayton who is the Chairman of
the Company.
-9-
Audit Committee Report
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are to:
Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance.
Monitor the independence and performance of the Company's independent
auditors.
Provide an avenue of communication among the independent auditors,
management, and the Board of Directors.
The Audit Committee is composed of three independent directors and operates
under a written charter adopted by the Board of Directors (attached as Exhibit A
to this Proxy Statement).
The Audit Committee reviewed, and discussed with management and the
independent auditors, the audited financial statements as of and for the year
ended December 31, 2000. Management has the responsibility for the preparation
of the Company's financial statements and the independent auditors have the
responsibility for the examination of those statements. The Audit Committee
reviewed with the independent auditors, who are responsible for expressing an
opinion on the conformity of those audited financial statements with generally
accepted accounting principles, their judgment as to the quality, not just the
acceptability, of the Company's accounting principles and such other matters as
are required to be discussed with the Audit Committee under generally accepted
auditing standards. In addition, the Audit Committee discussed with the
independent auditors the auditors' independence from management and the Company
including the matters in the written disclosures required by the Independence
Standards Board.
The Audit Committee also discussed with the Company's independent auditors
the overall scope and plans for their audit. The Audit Committee meets with the
independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors (and the Board has approved)
that the audited financial statements be included in the Annual Report on Form
10-K for the year ended December 31, 2000 for filing with the Securities and
Exchange Commission. The Audit Committee and the Board of Directors have also
recommended, subject to shareholder ratification, the selection of Deloitte &
Touche LLP as the Company's independent auditors for fiscal 2001.
Audit Committee
Jack T. Trotter, Chairman
Robert M. Ayres, Jr.
Ronald E. Hall
-10-
Performance Graph
Set forth below is a line graph comparing the yearly percentage change in the
cumulative total shareholder return on the Company's Common Stock against the
cumulative total return of the Dow Jones Industrial Average and a peer group
average for the period of five years commencing December, 31, 1995 and ended
December 31, 2000. The peer group average is the Dow Jones Energy Sector Oil
Secondary Group Average, which consists of smaller oil companies who do the bulk
of their business domestically. The historical stock price performance for the
Company's stock shown on the graph below is not necessarily indicative of future
stock performance.
Composite of Five Year Cumulative Total Return*
Howell Corporation Common, Peer Group Average & Dow Jones Industrial Average
The data points on the performance graph are as follows.
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
Howell Corporation 100.00% 103.77% 123.06% 14.95% 43.27% 94.33%
Peer Group 100.00% 126.68% 126.30% 86.65% 100.00% 159.71%
Dow Jones Industrial Average 100.00% 122.02% 160.84% 200.88% 246.53% 223.68%
*Assumes that the value of the investment in Howell Corporation and each indices
was $100 on December 31, 1995 and that all dividends were reinvested.
Security Ownership of Management and Certain Beneficial Owners
The following table sets forth, as of February 1, 2001, the shares of Common
Stock beneficially owned by (i) any person who, to the knowledge of the Company,
beneficially owns more than 5% of such stock, (ii) each director and nominee for
director of the Company, (iii) each executive officer of the Company named in
the Summary Compensation Table, and (iv) all directors and executive officers of
the Company as a group. The Common Stock is the only class of voting securities
of the Company currently outstanding. Unless otherwise indicated, each holder in
the table below has sole voting and dispositive power with respect to the shares
of Common Stock owned by such holder.
-11-
Amount and Nature
Name and Address of Beneficial Percent
of Beneficial Owner Ownership of Class
- ------------------- --------- --------
Paul N. Howell............................. 1,244,255(1) 22.1
Howell Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
Donald W. Clayton.......................... 321,030(2) 5.8
Howell Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
Richard K. Hebert.......................... 184,103(3) 3.3
Howell Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
Robert T. Moffett.......................... 53,925(4) *
Howell Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
Allyn R. Skelton, II....................... 11,139 *
Howell Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
John E. Brewster, Jr....................... 37,275(5) *
Howell Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
Robert M. Ayres, Jr........................ 225,396(6) 4.1
5705 Scout Island Cove
Austin, TX 78731
Ronald E. Hall............................. 75,650(7) 1.4
Howell Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
Paul W. Murrill............................ 11,250(8) *
206 Sunset Blvd.
Baton Rouge, LA 70808
Otis A. Singletary......................... 21,150(9) *
780 Chinoe Road
Lexington, KY 40502
Ken C. Tamblyn............................. - *
1410 East Cherry Court
Folson, LA 70437
(table continues on following page)
-12-
Name and Address of Beneficial Percent
of Beneficial Owner Ownership of Class
- ------------------- --------- --------
Khoi V. Tran............................... 2,000 *
10718 Sagetrail
Houston, TX 77089
All directors and executive officers as a
group (12 persons)......................... 2,187,173(10) 37.7
Dimensional Fund Advisors Inc.............. 479,600(11) 8.7
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Ingalls & Snyder LLC....................... 573,725(12) 10.1
61 Broadway
New York, NY 10006
Fidelity Management & Research Company..... 528,500(13) 9.6
82 Devonshire Street
Boston, MA 02109
Bradley N. Howell.......................... 307,505(14) 5.6
Lodestar Logistics Corporation
1111 Fannin, Suite 1500
Houston, TX 77002
*Less than 1%.
- --------
(1) Includes 95,950 shares which Mr. Paul N. Howell has the right to acquire
within 60 days pursuant to certain options and 44,500 shares which are owned
by the Howell Foundation, as to which Mr. Howell shares voting and
dispositive power.
(2) Includes 25,000 restricted shares which Mr. Clayton has the right to vote.
He does not have dispositive power until the lapse of certain restrictions
that burden such shares. Includes 9,090 shares of common stock which Mr.
Clayton has the right to receive within 60 days should he elect to convert
the 3,000 shares of Series A Preferred Stock held by him. Also includes
11,000 shares which Mr. Clayton has the right to acquire within 60 days
pursuant to certain options.
(3) Includes 25,000 restricted shares which Mr. Hebert has the right to vote. He
does not have dispositive power until the lapse of certain restrictions that
burden such shares. Also includes 11,000 shares which Mr. Hebert has the
right to acquire within 60 days pursuant to certain options.
(4) Includes 50,130 shares which Mr. Moffett has the right to acquire within 60
days pursuant to certain options.
(5) Includes 400 shares held by Mr. Brewster as custodian for his children, as
to which he exercises both voting and dispositive power; 22,850 shares which
he has the right to acquire within 60 days pursuant to certain options;
and 3,030 shares of common stock which Mr. Brewster has the right to
receive within 60 days should he elect to convert the 1,000 shares of
Series A Preferred Stock held by him.
(6) Includes 5,250 shares owned by the Shield-Ayres Foundation, as to which Mr.
Ayres disclaims both voting and dispositive power, and 12,490 shares held by
Mr. Ayres' wife, as to which he disclaims both voting and dispositive power.
Includes 3,030 shares of common stock which Mr. Ayres has the right to
receive within 60 days should he elect to convert the 1,000 shares of Series
A Preferred Stock held by him. Also includes 10,250 shares which Mr. Ayres
has the right to acquire within 60 days pursuant to certain options.
-13-
(7) Includes 50,250 shares which Mr. Hall has the right to acquire within 60
days pursuant to certain options.
(8) Includes 10,250 shares which Dr. Murrill has the right to acquire within 60
days pursuant to certain options.
(9) Includes 600 shares held by Dr. and Mrs. Singletary, as to which Dr.
Singletary shares voting and dispositive power, and 300 shares held by Dr.
Singletary as custodian for minor children, as to which he exercises both
voting and dispositive power. Also includes 250 shares which Dr. Singletary
has the right to acquire within 60 days pursuant to certain options.
(10)Includes 273,740 shares which the Company's directors and executive officers
have the right to acquire within 60 days pursuant to the exercise of certain
options and the conversion of shares of Series A Preferred Stock.
(11)Dimensional Fund Advisors Inc. ("DFA"), a registered investment advisor,
furnishes investment advice to four investment companies and serves as
investment manager to certain other commingled group trusts and separate
accounts. In its role as investment adviser or manager, DFA possesses voting
and/or investment power over 479,600 shares of Common Stock that are owned
by the accounts it manages or advises. DFA disclaims beneficial ownership of
all such shares.
(12)Includes 178,575 shares of Common Stock which Ingalls & Snyder LLC has the
right to receive within 60 days should it elect to convert the 58,930 shares
of Series A Preferred Stock held by it. Ingalls & Snyder LLC is registered
as a broker or dealer with the commission. Based on Amendment No. 17 to
Schedule 13G filed with the Commission, Ingalls & Snyder LLC has sole
voting and dispositive power with respect to 147,000 of the shares of Common
Stock owned beneficially.
(13)Fidelity Management & Research Company is the beneficial owner of 528,500
shares as a result of acting as a registered investment advisor to various
investment companies.
(14)Of these, 33,399 shares are held by Bradley N. Howell as custodian for minor
children, as to which he exercises sole voting and dispositive power,
142,147 shares are held in trust for minor children and for himself, as to
which he shares voting and dispositive power, and 14,273 shares are held by
Bradley N. Howell's wife, as to which he disclaims both voting and
dispositive power.
Certain Transactions
Mr. Paul N. Howell and Mr. Ronald E. Hall receive annual consulting fees of
$60,000 and $32,000, respectively. Mr. Hall also receives a yearly auto
allowance of $6,000. The Board of Directors reviews these arrangements on an
annual basis.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission ("SEC") and the New York Stock Exchange initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Officers, directors and greater than
ten-percent shareholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
-14-
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all section 16(a) filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were complied
with during the fiscal year ended December 31, 2000.
-15-
Item 2. Ratification of Appointment of Independent Auditors
Deloitte & Touche LLP has been appointed by the Board of Directors as
independent auditors of the Company and its subsidiaries for the fiscal year
ending December 31, 2001. This appointment is being presented to the
shareholders for ratification. Deloitte & Touche LLP served the Company as
independent auditors for the fiscal year ended December 31, 2000. Although the
Company is not required to obtain shareholder ratification of the appointment of
the independent auditors for the Company for the fiscal year ended December 31,
2001, the Company has elected to do so.
Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting. While they do not plan to make a statement at the meeting, such
representatives will be available to respond to appropriate questions from
shareholders and will be free to make a statement if they so desire.
In the event that the shareholders do not ratify the appointment of Deloitte
& Touche LLP as the independent auditor of the Company, the Board of Directors
will consider the retention of other independent auditors.
Audit Fees
Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and
their respective affiliates (collectively, "Deloitte") billed the Company
$127,000 for professional services rendered for the audit of its annual
financial statements for the year ended December 31, 2000, and for the reviews
of the financial statements included in the Company's Forms 10-Q for that year.
Financial Information Systems Design and Implementation Fees
The Company did not engage Deloitte to render any services in conjunction
with information systems design and implementation during the prior fiscal year.
All Other Fees
The aggregate fees billed for services rendered by Deloitte, other than the
services described above, for the year ended December 31, 2000, totaled $16,144.
The Audit Committee of the Board of Directors has considered whether the
provision by Deloitte of the non-audit services disclosed above, is compatible
with maintaining their independence.
The Board of Directors of the Company has unanimously approved Deloitte &
Touche LLP as the independent auditors for the Company for the fiscal year ended
December 31, 2001, and recommends a vote "FOR" the ratification of the
appointment of Deloitte & Touche LLP as independent auditors for the Company for
such fiscal year.
Shareholders' Proposals for 2002 Annual Meeting
In order for proposals submitted by shareholders of the Company pursuant to
Rule 14a-8 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended, to be included in the Company's Proxy Statement and
form of proxy relating to the 2002 Annual Meeting of the Shareholders, such
proposals must be received at the Company's principal executive offices no later
than November 21, 2001. A Stockholder choosing not to use the procedures
established in Rule 14a-8 must deliver the proposal at the Company's principal
executive office no later than February 7, 2002. All such proposals must be in
conformity with all applicable legal provisions.
-16-
Other Business
The Board of Directors of the Company does not know of any other matters
which are to be presented for action at the meeting. However, if any other
matters properly come before the meeting, it is intended that the enclosed proxy
will be voted in accordance with the recommendation of the Board of Directors.
By Order of the Board of Directors,
/s/ DONALD W. CLAYTON
DONALD W. CLAYTON
Chairman of the Board
Houston, Texas
March 21, 2001
-17-
EXHIBIT A
Howell Corporation
Charter of the Audit Committee
of the Board of Directors
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are to:
Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance.
Monitor the independence and performance of the Company's independent
auditors.
Provide an avenue of communication among the independent auditors,
management, and the Board of Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to
the independent auditors as well as anyone in the organization. The Audit
Committee has the ability to retain, at the Company's expense, special
legal, accounting, or other consultants or experts it deems necessary in
the performance of its duties.
II. Audit Committee Composition and Meetings
Audit Committee members shall meet the requirements of the New York Stock
Exchange as well as the National Association of Securities Dealers. The
Audit Committee shall be comprised of three or more directors as determined
by the Board, each of whom shall be independent non-executive directors,
free from any relationship that would interfere with the exercise of his or
her independent judgment. All members of the Committee shall have a basic
understanding of finance and accounting and be able to read and understand
fundamental financial statements, and at least one member of the Committee
shall have accounting or related financial management expertise.(1)
Audit Committee members shall be appointed by the Board. If an audit
committee Chair is not designated or present, the members of the Committee
may designate a Chair by majority vote of the Committee membership.
The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. The Audit Committee Chair shall prepare and/or
approve an agenda in advance of each meeting. The Committee should meet
privately in executive session at least annually with management, the
independent auditors, and as a committee to discuss any matters that the
Committee or any of these groups believe should be discussed.(2) In
addition, the Committee, or at least its Chair, should communicate with
management and the independent auditors quarterly to review the Company's
financial statements and significant findings based upon the auditors
limited review procedures.
III.Audit Committee Responsibilities and Duties
Review Procedures
1. Review and reassess the adequacy of this Charter at least annually.
Submit the charter to the Board of Directors for approval and have the
document published at least every three years in accordance with SEC
regulations.
-18-
2. Review the Company's annual audited financial statements prior to filing
or distribution. Review should include discussion with management and the
independent auditors of significant issues regarding accounting
principles, practices, and judgments.
3. In consultation with management and the independent auditors, consider
the integrity of the Company's financial reporting processes and
controls. Discuss significant financial risk exposures and the steps
management has taken to monitor, control, and report such exposures.
Review significant findings prepared by the independent auditors together
with management's responses.
4. Review with financial management and the independent auditors the
Company's quarterly financial statements prior to filing or distribution.
Discuss any significant changes to the Company's accounting principles
and any items required to be communicated by the independent auditors in
accordance with SAS 61 (see item 8).(3) The Chair of the Committee may
represent the entire Audit Committee for purposes of this review.
Independent Auditors
5. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee shall review
the independence and performance of the auditors and annually recommend
to the Board of Directors the appointment of the independent auditors or
approve any discharge of auditors when circumstances warrant.
6. Approve the fees and other significant compensation to be paid to the
independent auditors.
7. On an annual basis, the Committee should review and discuss with the
independent auditors all significant relationships they have with the
Company that could impair the auditors' independence.
8. Prior to releasing the year-end earnings, discuss the results of the
audit with the independent auditors. Discuss certain matters required to
be communicated to audit committees in accordance with AICPA SAS 61.(4)
9. Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in its
financial reporting.
10. Discuss with the independent auditors the clarity of the financial
disclosure practices used or proposed by the Company.
11. Inquire as to the independent auditors' views about whether management's
choices of accounting principles appear reasonable from the perspective
of income, asset, and liability recognition, and whether those principles
are common practices or are minority practices.
Legal Compliance
12. On at least an annual basis, review with the Company's counsel, any legal
matters that could have a significant impact on the organization's
financial statements, the Company's compliance with applicable laws and
regulations, and inquiries received from regulators or governmental
agencies.
Other Audit Committee Responsibilities
13. Annually prepare a report to shareholders as required by the Securities
and Exchange Commission. The report should be included in the Company's
annual proxy statement.(5)
14. Maintain minutes of meetings and periodically report to the Board of
Directors as deemed necessary.
-19-
15. Minutes from Committee meetings shall be distributed to each board member
prior to the subsequent Board of Directors meeting.
Approved and Adopted by the Board of Directors
April 26, 2000
- ----------------
(1)For NYSE, one member must have accounting or related financial management
expertise. For NASD / AMEX, one member must have past employment experience
in finance or accounting, requisite professional certification in accounting,
or any other comparable experience or background which results in the
individual's financial sophistication, including being or having been a chief
executive officer, chief financial officer or other senior officer with
financial oversight responsibilities.
(2)The Committee may ask members of management or others to attend meetings and
provide pertinent information as necessary.
(3)If matters are identified during the interim review which would need to be
communicated under SAS 61, the auditor must communicate them to the audit
committee or be satisfied that they have been communicated to the audit
committee by management. Therefore, quarterly communications may not be
required.
(4)Statement of Auditing Standards (SAS) No. 61 requires that auditors discuss
certain matters with audit committees of all SEC engagements. The
communication may be in writing or oral and may take place before or after
the financial statements are issued. Items to be communicated include:
The auditor's responsibility under Generally Accepted Auditing Standards
(GAAS);
Significant accounting policies; Management judgments and accounting
estimates; Significant audit adjustments; Other information in documents
containing audited financial statements;
Disagreements with management - including accounting
principles, scope of audit, disclosures;
Consultation with other accountants by management; Major issues discussed
with management prior to retention; and Difficulties encountered in
performing the audit.
(5)The SEC requires that the Audit Committee issue a report to shareholders
stating whether they have:
Reviewed and discussed the audited financial statements with management;
Discussed with the independent auditors the matters required to be
discussed by SAS 61; and
Received certain disclosures from the auditors regarding their independence
as required by the ISB and then include a statement if based on this review
if the audit committee recommended to the board to include the audited
financial statements in the annual report filed with the SEC.
-20-
COMMON SHAREHOLDER'S PROXY
HOWELL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul N. Howell and Otis A. Singletary, and
each of them, as proxies, each with full power of substitution, to represent and
vote as designated on the reverse all shares of Common Stock of Howell
Corporation ("Company") held of record by the undersigned on February 28, 2001,
at the Annual Meeting of Shareholders to be held on April 25, 2001, or any
adjournments thereof.
(Continued and to be signed on other side)
A [X] Please mark your
votes as in this
example.
(1) ELECTION OF THREE CLASS I DIRECTORS: WITHHOLD AUTHORITY to vote for all
FOR all nominees listed below |_| nominees listed below |_|
(INSTRUCTION: To withhold authority to vote for any individual nominee
strike through the nominee's name below.)
Paul N. Howell Donald W. Clayton Richard K. Hebert
(2) PROPOSAL TO RATIFY THE APPOINTMENT of Deloitte & Touche LLP as independent
auditors for the Company:
FOR |_| AGAINST |_| ABSTAIN |_|
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this Proxy will
be voted for Proposals 1 and 2 above.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Signature________________________________________
Signature________________________________________
Signature, if held jointly
DATE: ____________________, 2001
Note:Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.