 |  | KIRBY CORPORATION |
Notice of 20102013
Annual Meeting of Stockholders
and
Proxy Statement
Meeting Date: April 27, 201023, 2013
YOUR VOTE IS IMPORTANT
PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN
YOUR PROXY CARD IN THE ENCLOSED ENVELOPE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Kirby Corporation
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| | KIRBY CORPORATION |
Notice of 20102013
Annual Meeting of Stockholders
and
Proxy Statement
Meeting Date: April 27, 201023, 2013
YOUR VOTE IS IMPORTANT
PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN
YOUR PROXY CARD IN THE ENCLOSED ENVELOPE
55 Waugh Drive, Suite 1000
P. O. Box 1745
Houston, Texas77251-1745
March 10, 2010
Dear Fellow Stockholders:
On behalf of the Board of Directors, we cordially invite you to attend the 20102013 Annual Meeting of Stockholders of Kirby Corporation to be held on Tuesday, April 27, 2010,23, 2013, at 10:00 a.m. (CDT). The meeting will be held at the Four Seasons Hotel, 1300 Lamar Street,55 Waugh Drive, 9th Floor, Houston, Texas 77010.77007. We look forward to personally greeting those stockholders who will be able to attend the meeting.
This booklet contains the notice of the Annual Meeting and the Proxy Statement, which contains information about the formal items of businessproposals to be conductedvoted on at the meeting, Kirby’s Board of Directors and its committees and certain executive officers. This year you are being asked to elect three Class III directors, reapprove the material terms of the performance objectives under Kirby’s 2005 Stock and Incentive Plan and ratify the Audit Committee’s selection of KPMG LLP as Kirby’s independent registered public accounting firm for 2010.
In addition to the formal items of businessproposals to be brought before the Annual Meeting, there will be a report on our Company’s operations, followed by a question and answer period.
Your vote is important. Please ensure that your shares will be represented at the meeting by completing, signing and returning your proxy card in the envelope provided whether or not you plan to attend personally.
Thank you for your continued support and interest in Kirby Corporation.
| Sincerely, |
 |
| JOSEPH H. PYNE |
Chairman of the Board and Chief Executive Officer |
55 Waugh Drive, Suite 1000
P. O. Box 1745
Houston, Texas77251-1745
NOTICE OF 20102013 ANNUAL MEETING OF STOCKHOLDERS
| Date: | Tuesday, April | |||
| Time: | 10:00 a.m. CDT | |||
| Place: | 55 Waugh Drive | |||
| 9th Floor | ||||
| Houston, Texas |
Proposals to be voted on at the Kirby Corporation 20102013 Annual Meeting of Stockholders are as follows:
1. Election of three Class III directors;
2. Reapproval of the material terms of the performance objectives under Kirby’s 2005 Stock and Incentive Plan;
3. Advisory vote on the approval of the compensation of Kirby’s named executive officers; and
4. Consideration of any other business that properly comes before the meeting.
You have the right to receive this notice and vote at the Annual Meeting if you were a stockholder of record at the close of business on March 1, 2010.2013. Please remember that your shares cannot be voted unless you sign and return the enclosed proxy card, vote in person at the Annual Meeting, or make other arrangements to vote your shares.
We have enclosed a copy of Kirby Corporation’s 20092012 Annual Report to stockholders with this notice and Proxy Statement.
| For the Board of Directors, |
| THOMAS G. ADLER |
Secretary |
March 10, 2010
8, 2013
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of proxies on behalf of the Board of Directors (the “Board”) of Kirby Corporation (the “Company”) to be voted at the Annual Meeting of Stockholders to be held at the Four Seasons Hotel, 1300 Lamar Street,55 Waugh Drive, 9th Floor, Houston, Texas, on April 27, 2010,23, 2013, at 10:00 a.m. (CDT).
Whenever we refer in this Proxy Statement to the Annual Meeting, we are also referring to any meeting that results from an adjournment or postponement of the Annual Meeting. The Notice of Annual Meeting, this Proxy Statement, the proxy card and the Company’s Annual Report, which includes the Annual Report onForm 10-K for 2009,2012, are being mailed to stockholders on or about March 17, 2010.
SOLICITATION OF PROXIES
The Proxy Card
Your shares will be voted as specified on the enclosed proxy card. If a proxy is signed without choices specified, those shares will be voted for the election of the Class III directors named in this Proxy Statement, for the reapproval of the material terms of the performance objectives under the Company’s 2005 Stock and Incentive Plan, for the ratification of the Audit Committee’s selection of KPMG LLP as the Company’s independent registered public accounting firm for 20102013, for the approval on an advisory basis of executive compensation and at the discretion of the proxies on other matters.
You are encouraged to complete, sign and return the proxy card even if you expect to attend the meeting. If you sign a proxy card and deliver it to us, but then want to change your vote, you may revoke your proxy at any time prior to the Annual Meeting by sending us a written revocation or a new proxy, or by attending the Annual Meeting and voting your shares in person.
Cost of Soliciting Proxies
The cost of soliciting proxies will be paid by the Company. The Company has retained Georgeson Inc. to solicit proxies at an estimated cost of $5,500,$6,000, plusout-of-pocket expenses. Employees of the Company may also solicit proxies, for which the expense would be nominal and borne by the Company. Solicitation may be by mail, facsimile, electronic mail, telephone or personal interview.
VOTING
Stockholders Entitled to Vote
Stockholders of record at the close of business on March 1, 20102013 will be entitled to notice of, and to vote at, the Annual Meeting. As of the close of business on March 1, 2010,2013, the Company had 54,009,85756,719,387 outstanding shares of common stock. Each share of common stock is entitled to one vote on each matter to come before the meeting.
Quorum and Votes Necessary to Adopt Proposals
In order to transact business at the Annual Meeting, a quorum consisting of a majority of all outstanding shares entitled to vote must be present. Abstentions and proxies returned by brokerage firms for which no voting instructions have been received from their principalsbeneficial owners will be counted for the purpose of determining
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whether a quorum is present. Once a share is represented for any purpose at the Annual Meeting, it will be deemed present for quorum purposes for the entirety of the meeting. A majority of the votes cast (not counting abstentions and broker nonvotes) is required for the election of directors.directors (Proposal 1). A majority of the outstanding shares entitled to vote that are represented at the meeting in person or by proxy is required for the reapproval of the material terms of the performance objectives under the Company’s 2005 Stock and Incentive Plan and for the ratification of the selection
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Please note that if your shares are held in the name of a brokerage firm on your behalf, your broker may not vote your shares on the election of directors or the matters that may be presented at the meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 27, 2010
This Proxy Statement and the Company’s 20092012 Annual Report, which includes the Annual Report onForm 10-K filed with the Securities and Exchange Commission (“SEC”), are available electronically at www.edocumentview.com/kex.
The following proposals will be considered at the meeting:
Proposal 1 | — | Election of three Class III directors | |||||||
Proposal 2 — | Ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for | ||||||||
Proposal 3 — | Advisory vote on the approval of the compensation of the Company’s named executive officers | ||||||||
The Board of Directors of the Company unanimously recommends that you vote “FOR” eachthe Board’s nominees for director, “FOR” the selection of the proposals.KPMG LLP as our independent registered public accounting firm for 2013 and “FOR” approval of our executive compensation
ELECTION OF DIRECTORS (ITEM(PROPOSAL 1)
The Bylaws of the Company provide that the Board shall consist of not fewer than three nor more than fifteen members and that, within those limits, the number of directors shall be determined by the Board. The Bylaws further provide that the Board shall be divided into three classes, with the classes being as nearly equal in number as possible and with one class being elected each year for a three-year term. The size of the Board is currently set at ten. Three Class III directors are to be elected at the 20102013 Annual Meeting to serve until the Annual Meeting of Stockholders in 2013.
Each nominee named below is currently serving as a director and each has consented to serve for the new term if elected. If any nominee becomes unable to serve as a director, an event currently not anticipated, the persons named as proxies in the enclosed proxy card intend to vote for a nominee selected by the present Board to fill the vacancy.
In addition to satisfying, individually and collectively, the Company’s Criteria for the Selection of Directors discussed under the “THE BOARD OF DIRECTORS — Governance Committee” below, each of the directors has extensive experience with the Company or in a business similar to one or more of the Company’s principal businesses or the principal businesses of significant customers of the Company. The brief biographies of each of the nominees and continuing directors below includes a summary of the particular experience and qualifications that led the Board to conclude that he should serve as a director.
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Nominees for Election
The Board of Directors of the Company unanimously recommends that you vote “FOR” the election of each of the following nominees for election as a director.
Nominees for Election as Class III directors to serve until the Annual Meeting of Stockholders in 20132016
| C. Sean Day | Director since 1996 | |
| Greenwich, Connecticut | Age |
Mr. Day is Chairman of Teekay Corporation, a foreign flag tank vessel owner and operator. He serves as Chairman of the Governance Committee and is a member of the Compensation Committee. He is also Chairman of Teekay GP L.L.C., the general partner of Teekay LNG Partners L.P., Chairman of Teekay Offshore GP L.L.C., the general partner of Teekay Offshore Partners L.P., Chairman of Teekay Tankers Ltd. and Chairman of Compass Diversified Holdings.
Mr. Day has over 40 years of experience in the marine transportation business, currently serving for the past 15 years as Chairman of one of the largest tanker companies in the world and formerlyfor 10 years before that as chief executive officer of an international bulk shipping
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| William M. Lamont, Jr. | Director since 1979 | |
| Dallas, Texas | Age |
Mr. Lamont is a private investor. He serves as Chairman of the Compensation Committee and is a member of the Executive Committee and Governance Committee.
Mr. Lamont and his family have been major stockholders of the Company since its formation and he has been a director of the Company throughout its transformation from a company engaged in the oil and gas and insurance businesses, among others, into the largest inlanddomestic tank barge company in the United States.States, as well as a significant presence in the diesel engine services business. Through his private investment activities, Mr. Lamont also has extensive experience in financial analysis and in financial markets.
| Director since | ||
| Age |
Mr. Lawrence hasWaterman served as ChairmanPresident and Chief Executive Officer of the Board of the Company since 1999. He was the founder and former President of Hollywood Marine,Penn Maritime Inc. (“Hollywood”Penn”), an inland tank barge company acquired from 1983 through 2012 until the acquisition of Penn by the Company in 1999. Mr. Lawrence serves as Chairmanon December 14, 2012. Penn is a coastwise tank barge operator, transporting primarily refinery feedstocks, asphalt and crude oil along the East Coast and Gulf Coast of the Executive Committee. Mr. LawrenceUnited States. He is also a director of Kinder Morgan Energy Partners, L.P. On October 12, 2009, the Company announced the retirement of Mr. Lawrence asand past Chairman of The American Waterways Operators, the Board ofnational trade association for the Company effective April 27, 2010.
Mr. LawrenceWaterman has over 4036 years of experience in the inlandcoastal tank barge business with Penn and predecessor companies, building HollywoodPenn into one of the largest coastal tank barge operators in the United States beforeStates. The Company significantly expanded its mergercoastal marine transportation business with several major acquisitions in 2011 and 2012. Mr. Waterman’s extensive experience in that business and knowledge of its markets and customers are valuable to the Company. Since the merger, he and Mr. Pyne have successfully integrated the two companies into an efficient and safety-conscious operation with the size and flexibility to serve the needs of the largest customers. In addition to Mr. Lawrence’s extensive knowledgeBoard in its oversight of the Company’s operationsexpanding coastwise business and customer base, he has long been active in industry associations that monitor significant legislative and regulatory developments along with other issues critical tocomplement the inland marine transportation industry.
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Directors Continuing in Office
The following persons are directors of the Company who will continue in office.
Continuing Class I directors, serving until the Annual Meeting of Stockholders in 20112014
| Director since | ||
| Age |
Mr. Clark served asAlario is Chairman of the Board, President and Chief OperatingExecutive Officer of Baker Hughes IncorporatedKey Energy Services, Inc. (“Baker Hughes”Key Energy”) from 2004 until his retirement, a publicly traded oilfield service company listed on the New York Stock Exchange (“NYSE”). He has served in January 2008. From 2003senior executive positions with Key Energy since 2004. Prior to 2004, hejoining Key Energy, Mr. Alario served as Vice President Marketingof BJ Services Company, an oilfield service company, from 2002 to 2004, and Technology of Baker Hughes, and from 2001 to 2003, he served asfor over 21 years in various capacities, most recently Executive Vice President, of Baker Petrolite Corporation,OSCA, Inc., also an oilfield service company. He currently serves as Vice Chairman, Director and Executive Committee member of the National Ocean Industries Association and serves as a subsidiarymember of Baker Hughes.the American Association of Drilling Engineers and the Petroleum Equipment Suppliers Association. He serves as a member of the GovernanceAudit Committee. Mr. Clark isAlario also served as a director of Teekay Corporation and ENSCO International Incorporated.
Mr. Clark gainedAlario has over 30 years of experience in the domestic and international oilfield service industry,business, currently serving as Chief Executive Officer with both operating and financial responsibility for one of the principal markets forlargest oilfield service companies in the United States. That experience is valuable to the Board in its oversight of the Company’s diesel engine services business and inwhich serves the areasoilfield services industry as a significant part of its customer base. Mr. Alario also adds a current public company governance, finance, mergers and acquisitions, risk management and compliance for a Fortune 500 company.
| David L. Lemmon | Director since 2006 | |
| Las Vegas, Nevada | Age |
Mr. Lemmon is a private investor. He served as President and Chief Executive Officer of Colonial Pipeline Company, an interstate common carrier of refined liquid petroleum products, from 1997 to 2006. Prior to that, he held management positions with Amoco Corporation and Amoco Pipeline. He serves as a member of the Audit Committee. Mr. Lemmon is also a director of Teekay Offshore GP L.L.C., the general partner of Teekay Offshore Partners L.P., and Deltic Timber Corporation. Mr. Lemmon was a director of Pacific Energy GP L.L.C., the general partner of Pacific Energy Partners L.P., from 2002 to 2006.
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| George A. Peterkin, Jr. | Director since 1973 | |
| Houston, Texas | Age |
Mr. Peterkin is a private investor. He has served as Chairman Emeritus of the Board of the Company since 1999 and served as Chairman of the Board of the Company from 1995 to 1999. He served as President of the Company from 1973 to 1995 and serves as a member of the Audit Committee and Executive Committee.
Mr. Peterkin has served in executive positions in the marine transportation business with the Company and its predecessor companies for over 50 years. During his tenure as President and then Chairman of the Board of the Company, he presided over the Company’s transition from an oil and gas and insurance company with a small
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barge line to the largest inland tank barge company in the United States. Mr. Peterkin’s knowledge of and perspective on the Company and its history, growth and principal businesses are a valuable resource for the Board.
| Richard R. Stewart | Director since 2008 | |
| Houston, Texas | Age |
Mr. Stewart served as President and Chief Executive Officer of GE Aero Energy, a division of GE Energy, and as an officer of General Electric Company, from 1998 until his retirement in December 2006. From 1972 to 1998, Mr. Stewart served in various positions at Stewart & Stevenson Services, Inc., including Group President and member of the Board of Directors. He serves as a member of the Audit Committee. Mr. Stewart is also a director of Eagle Materials Inc. and Lufkin Industries, Inc.
During a35-year business career, Mr. Stewart has been the principal executive officer with both operating and financial responsibility for the diesel engine power and service businesses at Stewart & Stevenson and then at GE Aero Energy. Mr. Stewart’s extensive experience in the diesel engine business is valuable to the Board in its oversight of the Company’s diesel engine services business and complements the predominately marine transportation and petrochemical industry experience of a number of the Company’s other directors.
Continuing Class II directors, serving until the Annual Meeting of Stockholders in 20122015
| Bob G. Gower | Director since 1998 | |
| Houston, Texas | Age |
Mr. Gower is a private investor. He has served as President and Chief Executive OfficerChairman of Carbon Nanotechnologies,the Board of Ensysce Biosciences, Inc., a technology leader in small-diameter carbon nanotubes, until 2007.company developing cancer therapeutics using nanotechnology, since 2008. Mr. Gower serves as Chairman of the Audit Committee, is a member of the Executive Committee and Compensation Committee, and has been chosen by the non-management directors to serve as the presiding director at executive sessions of the non-management directors.
Mr. Gower has 46 years of experience in the chemical business, including 11 years as the Chief Executive Officer of Lyondell Petrochemical Company. The transportation of petrochemicals generates a major portion of the Company’s marine transportation revenues and Mr. Gower’s knowledge of the chemical business is valuable to the Board.
| Monte J. Miller | Director since 2006 | |
| Durango, Colorado | Age |
Mr. Miller is a consultant and private investor. He served as Executive Vice President, Chemicals, of Flint Hills Resources, LP (“Flint Hills”), a company engaged in crude oil refining, transportation and marketing, and the production of petrochemicals, from 2003 to 2006. From 1999 to 2003, he was Senior Vice President of Koch Chemical Company, a predecessor company of Flint Hills. Mr. Miller serves as a member of the Compensation Committee and Governance Committee.
Mr. Miller has 30 years of experience in the petrochemical and refining business. A significant volume of petrochemical products is transported coastwise and on the inland waterways and petrochemicals represent a major portion of the Company’s business, so Mr. Miller’s extensive knowledge about petrochemical and refining companies, which constitute a substantial part of the Company’s customer base, as well as the products they ship and the end users of
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| Joseph H. Pyne | Director since 1988 | |
| Houston, Texas | Age |
Mr. Pyne is the PresidentChairman of the Board and Chief Executive Officer of the Company. He serves as a member of the Executive Committee.
Mr. Pyne has been with the Company for 3235 years, servinghaving served as President of its principal marine transportation subsidiary prior to becoming President and Chief Executive Officer of the Company. In April 2010, he was elected Chairman of the Board, President and Chief Executive Officer of the Company and in April 2011 was elected Chairman of the Board and Chief Executive Officer of the Company. He has primary responsibility for the business and strategic direction of the Company and is an essential link between the Board and the Company’sday-to-day operations. Mr. Pyne has overall knowledge of all aspects of the Company, its operations, customers, financial condition and strategic planning. With the announced retirement of Mr. Lawrence as Chairman of the Board of the Company, Mr. Pyne will beis the only management representative on the Board following the Annual Meeting of Stockholders.
Except as noted, each of the nominees for director and each of the continuing directors has been engaged in his principal occupation for more than the past five years.
THE BOARD OF DIRECTORS
The Company’s business is managed under the direction of the Board, which is responsible for broad corporate policy and for monitoring the effectiveness of Company management. Members of the Board are kept informed about the Company’s businesses by participating in meetings of the Board and its committees, through operating and financial reports made at Board and committee meetings by Company management, through various reports and documents sent to the directors for their review and by visiting Company facilities.
Director Independence
The New York Stock Exchange (“NYSE”)NYSE listing standards require listed companies to have at least a majority of independent directors. For a director to be considered independent, the Board must determine that the director does not have any direct or indirect material relationship with the Company.
The Board has determined that the following incumbent directorsC. Sean Day, Bob G. Gower, William M. Lamont, Jr., David L. Lemmon, Monte J. Miller, George A. Peterkin, Jr. and Richard R. Stewart have no relationship with the Company except as directors and stockholders and are independent within the meaning of the NYSE corporate governance rules:
The Board has determined that an indirect relationship between Richard J. Alario and the Company through Key Energy is not material and that Mr. Alario is also independent. Key Energy is a customer of United Holdings LLC (“United Holdings”), a wholly owned subsidiary of the Company that provided diesel engine equipment, parts and service to Key Energy in the ordinary course of business in 2012. The volume of business done between Key Energy and United Holdings during 2012 was $13,152,000, which represents less than 1% of Key Energy’s total revenues for 2012. The business relationship between Key Energy and United Holdings predates both the Company’s acquisition of United Holdings in April 2011 and the election of Mr. Alario to the Board.
The Board has determined that the acquisition of Penn and an affiliated company from Mr. Waterman and members of his family for approximately $175 million in cash and Company stock in December 2012 does not affect his independence since he and his family sold their entire interest in Penn and affiliated companies to the Company and he resigned from all director and officer positions he held with Penn and affiliated companies contemporaneously with the closing of the acquisition by the Company. In connection with the acquisition, Mr. Waterman entered into a three-year noncompetition agreement with the Company that is not in any way contingent on continued service with the Company or any of its subsidiaries. In addition, in 2012, Penn paid the Company $1,253,000 for diesel engine services relating to the repair and maintenance of Penn’s vessels. The Board determined that relationship between Penn and the Company does not affect Mr. Waterman’s independence since Mr. Waterman no longer has any ownership in or position with Penn, which is now a wholly owned subsidiary of the Company.
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Board Committees
The Board has established four standing committees, including the Audit Committee, the Compensation Committee and the Governance Committee, each of which is briefly described below. The fourth committee, the Executive Committee, may exercise all of the power and authority of the Board in the management of the business and affairs of the Company when the Board is not in session, except the power or authority to fill vacancies in the membership of the Board, to amend the Bylaws of the Company and to fill vacancies in the membership of the Executive Committee.
Audit Committee
All of the members of the Audit Committee are independent, as that term is defined in applicable SEC and NYSE rules. In addition, the Board has determined that all of the members of the Audit Committee are “audit committee financial experts,” as that term is defined in SEC rules. The Audit Committee operates under a written
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| Principal Functions | Members | |
• Monitor the Company’s financial reporting, accounting procedures and systems of internal control | Bob G. Gower (Chairman) Richard J. Alario David L. Lemmon Richard R. Stewart | |
• Select the independent auditors for the Company | ||
• Review the Company’s audited annual and unaudited quarterly financial statements with management and the independent auditors | ||
• Monitor the independence and performance of the Company’s independent auditors and internal audit function | ||
• Monitor the Company’s compliance with legal and regulatory requirements |
Compensation Committee
All of the members of the Compensation Committee are independent, as that term is defined in NYSE rules. In addition, all of the members of the Committee are “Non-Employee Directors” and “outside directors” as defined in relevant federal securities and tax regulations. The Compensation Committee operates under a written charter adopted by the Board. A copy of the charter is available on the Company’s web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance.
| Principal Functions | Members | |
• Determine the compensation of executive officers of the Company | William M. Lamont, Jr. (Chairman) C. Sean Day Bob G. Gower Monte J. Miller | |
• Administer the Company’s annual incentive bonus program | ||
• Administer the Company’s stock option, restricted stock and incentive plans and grant stock options, restricted stock and performance awards under such plans |
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Governance Committee
All of the members of the Governance Committee are independent, as that term is defined in NYSE rules. The Committee operates under a written charter adopted by the Board. A copy of the charter is available on the Company’s web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance.
| Principal Functions | Members | |
• Perform the function of a nominating committee in recommending candidates for election to the Board | C. Sean Day (Chairman) William M. Lamont, Jr. Monte J. Miller | |
• Review all related party transactions | ||
• Oversee the operation and effectiveness of the Board | ||
The Governance Committee will consider director candidates recommended by stockholders. Recommendations may be sent to the Chairman of the Governance Committee, Kirby Corporation, 55 Waugh Drive, Suite 1000, Houston, Texas 77007, accompanied by biographical information for evaluation. The Board of the Company has approved Criteria for the Selection of Directors which the Governance Committee will consider in evaluating director candidates. The criteria address compliance with SEC and NYSE requirements relating to the composition of the Board and its committees, as well as character, integrity, experience, understanding of the Company’s business and willingness to commit sufficient time to the Company’s business. The criteria are available on the Company’s web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance.
In addition to the criteria, the Governance Committee and the Board will consider diversity in business experience, professional expertise, gender and ethnic background in evaluating potential nominees for director. While the Board has in the past sought the most qualified candidates for nomination as directors without regard to gender or ethnic background, in January 2009, theThe Company’s Corporate Governance Guidelines and Governance
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When there is a vacancy on the Board (i.e., in cases other than the nomination of an existing director for reelection), the Board and the Governance Committee have considered candidates identified by executive search firms, candidates recommended by stockholders and candidates recommended by other directors. The Governance Committee will continue to consider candidates from any of those sources when future vacancies occur. The Governance Committee does not evaluate a candidate differently based on whether or not the candidate is recommended by a stockholder.
Attendance at Meetings
It is the Company’s policy that directors are expected to attend Board meetings and meetings of committees on which they serve and are expected to attend the Annual Meeting of Stockholders of the Company. During 2009,2012, the Board met nineeight times, the Audit Committee met eight times, the Compensation Committee met sevensix times and the Governance Committee met five times. Each director attended all of the meetings of the Board and of the committees on which theyhe served. All directors attended the 20092012 Annual Meeting of Stockholders of the Company.
Director Compensation
Directors who are employees of the Company receive no additional compensation for their servicesservice on the Board or Board committees.Board. Compensation of nonemployee directors is determined by the full Board, which may consider recommendations of the Compensation Committee. Past practice has been to review director compensation when the Board believes that an adjustment may be necessary in order to remain competitive with director compensation of comparable companies. Management of the Company periodically collects published survey information on director compensation for purposes of comparison.
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Each nonemployee director receives an annual fee of $24,000, a fee of $1,250 for each Board meeting and a fee of $3,000 for each Committeecommittee meeting attended. A director may elect to receive the annual fee in cash, stock options or restricted stock. The Compensation and Governance Committee Chairmen receive an additional $10,000 retainer per year, the Audit Committee Chairman receives an additional $15,000 retainer per year and the presiding director at executive sessions of the non-management directors receives an additional $5,000 retainer per year. Directors are reimbursed for reasonable expenses incurred in attending meetings.
In addition to the fees provided to the directors described above, the Company has a nonemployee director stock option plan under which nonemployee directors are granted stock options and restricted stock awards. The Company’s 2000 Nonemployee Director Stock Option Plan (the “2000 Director Plan”) provides for the automatic grant to nonemployee directors of stock options for 10,000 shares of common stock on the date of first election as a director and stock options for 6,000 shares and 1,000 shares of restricted stock immediately after each annual meeting of stockholders. The 2000 Plan also provides for discretionary grants of an aggregate of 10,000 shares in the form of stock options or restricted stock. In addition, the 2000 Director Plan provides for the issuance of stock options or restricted stock in lieu of cash for all or part of the annual director fee. A director who elects to receive options in lieu of the annual cash fee will be granted an option for a number of shares equal to (a) the amount of the fee for which the election is made divided by (b) the fair market value per share of the common stock on the date of grant multiplied by (c) 3. A director who elects to receive restricted stock in lieu of the annual cash fee will be issued a number of shares of restricted stock equal to (a) the amount of the fee for which the election is made divided by (b) the fair market value per share of the common stock on the date of grant multiplied by (c) 1.2. The exercise price for all options granted under the 2000 Director Plan is the fair market value per share of the Company’s common stock on the date of grant. The options granted on first election as a director vest immediately. The options granted and restricted stock issued immediately after each annual meeting of stockholders vest six months after the date of grant or issuance. Options granted and restricted stock issued in lieu of cash director fees vest in equal quarterly increments during the year to which they relate. The options generally remain exercisable for ten years after the date of grant.
In 2008, the Board established stock ownership guidelines for officers and directors of the Company. The guidelines were effective January 1, 2009 and nonemployee directors must be in compliance within five years after the adoption of the guidelines or five years after first election as a director, whichever is later, but are expected to accumulate the required number of shares ratably over the applicable five-year period. Under the guidelines,
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The following table summarizes the cash and equity compensation for nonemployee directors for the year ended December 31, 2009:
Director Compensation for 20092012
| Fees Earned | ||||||||||||||||
Name | or Paid in Cash | Stock Awards(1)(2) | Option Awards(1)(2) | Total | ||||||||||||
| James R. Clark | $ | 50,250 | $ | 29,772 | $ | 80,700 | $ | 160,722 | ||||||||
| C. Sean Day | 57,250 | 58,740 | 80,700 | 196,690 | ||||||||||||
| Bob G. Gower | 76,250 | 29,772 | 113,424 | 219,446 | ||||||||||||
| William M. Lamont, Jr. | 81,250 | 29,772 | 80,700 | 191,722 | ||||||||||||
| David L. Lemmon | 59,250 | 29,772 | 80,700 | 169,722 | ||||||||||||
| Monte J. Miller | 32,250 | 58,740 | 80,700 | 171,690 | ||||||||||||
| George A. Peterkin, Jr. | 35,250 | 58,740 | 80,700 | 174,690 | ||||||||||||
| Richard R. Stewart | 59,250 | 29,772 | 80,700 | 169,722 | ||||||||||||
Name | Fees Earned or Paid in Cash | Stock Awards(1)(2) | Option Awards(1)(2) | Total | ||||||||||||
Richard J. Alario | $ | 31,000 | $ | 62,988 | $ | 165,234 | $ | 259,222 | ||||||||
C. Sean Day | 53,000 | 92,028 | 138,600 | 283,628 | ||||||||||||
Bob G. Gower | 72,000 | 92,028 | 138,600 | 302,628 | ||||||||||||
William M. Lamont, Jr. | 77,000 | 62,988 | 138,600 | 278,588 | ||||||||||||
C. Berdon Lawrence(3) | 34,000 | 62,988 | 138,600 | 235,588 | ||||||||||||
David L. Lemmon | 58,000 | 62,988 | 138,600 | 259,588 | ||||||||||||
Monte J. Miller | 43,000 | 92,028 | 138,600 | 273,628 | ||||||||||||
George A. Peterkin, Jr. | 16,000 | 62,988 | 165,234 | 244,222 | ||||||||||||
Richard R. Stewart | 58,000 | 62,988 | 138,600 | 259,588 | ||||||||||||
William M. Waterman(4) | — | — | 229,896 | 229,896 | ||||||||||||
9
| (1) | The amounts included in the “Stock Awards” and “Option Awards” columns represent the grant date fair value related to restricted stock awards and option grants to the directors, computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note | |
| (2) | Each director was granted 1,000 shares of restricted stock on April |
The following table shows the aggregate number of shares of unvested restricted stock and stock options outstanding for each director as of December 31, 2012, as well as the grant date fair value of restricted stock and stock option grants made during 2012:
Name | Aggregate Shares of Unvested Restricted Stock as of December 31, 2012 | Aggregate Stock Options Outstanding as of December 31, 2012 | Grant Date Fair Value of Restricted Stock and Stock Options Awarded during 2012 | |||||||||
Richard J. Alario | — | 17,153 | $ | 228,222 | ||||||||
C. Sean Day | 116 | 24,000 | 230,628 | |||||||||
Bob G. Gower | 116 | 20,574 | 230,628 | |||||||||
William M. Lamont, Jr. | — | 60,000 | 201,588 | |||||||||
David L. Lemmon | — | 42,000 | 201,588 | |||||||||
Monte J. Miller | 116 | 55,264 | 230,628 | |||||||||
George A. Peterkin, Jr. | — | 64,947 | 228,222 | |||||||||
Richard R. Stewart | — | 34,000 | 201,588 | |||||||||
William M. Waterman | — | 10,000 | 229,896 | |||||||||
| (3) | Mr. Lawrence retired from the Board on December 31, |
| (4) | Mr. Waterman was elected to the |
| Aggregate Shares | Aggregate | Grant Date | ||||||||||
| of Restricted Stock | Stock Options | Fair Value of | ||||||||||
| Outstanding | Outstanding | Restricted Stock and | ||||||||||
| as of | as of | Stock Options | ||||||||||
Name | December 31, 2009 | December 31, 2009 | Awarded during 2009 | |||||||||
| James R. Clark | — | 22,000 | $ | 110,472 | ||||||||
| C. Sean Day | 244 | 36,000 | 139,440 | |||||||||
| Bob G. Gower | — | 27,731 | 143,196 | |||||||||
| William M. Lamont, Jr. | — | 57,000 | 110,472 | |||||||||
| David L. Lemmon | — | 34,000 | 110,472 | |||||||||
| Monte J. Miller | 244 | 35,988 | 139,440 | |||||||||
| George A. Peterkin, Jr. | 244 | 67,218 | 139,440 | |||||||||
| Richard R. Stewart | — | 22,000 | 110,472 | |||||||||
Board Leadership Structure
9
The Board does not have a “lead director,” but has chosen Mr. Gower to be the “presiding director” to preside at the regular executive sessions of the non-management directors that are held at least quarterly. Mr. Gower also serves as a liaison between the independent directors and management on certain matters that are not within the area of responsibility of a particular committee of the Board.
10
Risk Oversight
The Board carries out its risk oversight function primarily through the Audit Committee. Management prepares and reviews with the Audit Committee annually a comprehensive assessment of the identified internal and external risks of the Company that includes evaluations of the potential impact of each identified risk, its probability of occurrence and the effectiveness of the controls that are in place to mitigate the risk. The Audit Committee then brings to the attention of the Board any issues that warrant further discussion or action. The Audit Committee and the Board also receive regular reports of any events or circumstances involving risks outside the normal course of business of the Company. At times, a particular risk will be monitored and evaluated by another Board committee with primary responsibility in the area involved, such as the Compensation Committee’s review of the risks related to the Company’s compensation policies and practices. The Board’s administration of its risk oversight function has not affected the Board’s leadership structure.
TRANSACTIONS WITH RELATED PERSONS
The Board has adopted a written policy on transactions with related persons that provides that certain transactions involving the Company and any of its directors, executive officers or major stockholders or members of their immediate families, including all transactions that would be required to be disclosed as transactions with related persons in the Company’s Proxy Statement, are subject to approval in advance by the Governance Committee, except that a member of the Committee will not participate in the review of a transaction in which that member has an interest. The Committee has the discretion to approve any transaction which it determines is in, or not inconsistent with, the best interests of the Company and its stockholders. If for any reason a transaction with a related person has not previously been approved, the Committee will review the transaction within a reasonable period of time and either ratify the transaction or recommend other actions, including modification, rescission or termination, taking into consideration the Company’s contractual obligations. If a transaction is ongoing or consists of a series of similar transactions, the Committee will review the transaction at least annually and either ratify the continuation of the transaction or recommend other actions, including modification, rescission or termination, taking into consideration the Company’s contractual obligations. The policy provides certain exceptions, including compensation approved by the Board or its Compensation Committee.
During 2009, the Company and its subsidiaries paid HMC Interests LLC (“HMC”), a company owned by C. Berdon Lawrence, the Chairman of the Board of the Company, $155,000 for air transportation services provided by HMC. Such services were in the ordinary course of business of the Company and HMC.
10The Company is a 50% owner of The Hollywood Camp, L.L.C. (“The Hollywood Camp”), a company that owns and operates a hunting and fishing facility used by the Company and L3 Partners, LLC (“L3P”), a company owned by Mr. Lawrence, which is also a 50% owner. The Company uses The Hollywood Camp primarily for customer entertainment. L3P acts as manager of The Hollywood Camp. The Hollywood Camp allocates lease and lodging expenses to its members based on their usage of the facilities. The Company paid The Hollywood Camp $2,392,000 in 2012 for its share of facility expenses.
The Company paid L3P $144,000 in 2012 for air transportation services provided by L3P in the ordinary course of business of the Company.
The son of Mr. Lawrence is the Chairman of the Board and Chief Executive Officer, and owns 70% of the common stock of Bayou City Pumps, Inc. (“Bayou City”). Bayou City provides overhauls of black oil barge pumps to the Company. Bayou City acquired Engineering Pump Services (“EPS”), previously the Company’s primary vendor for overhauls of black oil barge pumps, in the first quarter of 2012. The Company paid Bayou City $1,409,000 in 2012 for overhauls of black oil barge pumps in the ordinary course of business of the
11
Company. In addition, the Company specified the use of a particular EPS pump in certain of its shipyard contracts for new barge construction, resulting in payments of approximately $3,700,000 from the shipyard to Bayou City in 2012.
Mr. Alario, a director of the Company, is the Chairman of the Board, President and Chief Executive Officer of Key Energy. Key Energy paid the Company $13,152,000 in 2012 for oilfield service equipment and for parts and service in the ordinary course of business of the Company. In addition, Key Energy paid The Hollywood Camp $463,000 for use of the facility during 2012.During 2012, Penn paid the Company $1,253,000 for diesel engine services related to the repair and maintenance of Penn’s vessels in the ordinary course of business of the Company.
The husband of Amy D. Husted, Vice President — Legal of the Company, is a partner in the law firm of Strasburger & Price, LLP. In 2009, theThe Company paid the law firm $333,000$384,000 in 2012 for legal services in connection with matters in the ordinary course of business of the Company.
Wayne G. Strahan, the brother of Dorman L. Strahan, the President of one of the Company’s two principal diesel engine services subsidiaries, is the Service Manager of the Company’s diesel engine services facility in Tampa, Florida. In 2012, Wayne G. Strahan received compensation of $128,878 from the Company.
Bernard L. Casey, the brother of Timothy J. Casey, former President of one of the Company’s marine transportation subsidiaries, is the West Coast Division Manager of the Company’s coastal marine transportation operations. In 2012, Bernard L. Casey received compensation of $159,884 from the Company.
In 2012, United Holdings, a subsidiary of the Company, paid Midwest Hoses and Specialty, Inc. (“Midwest”) $2,422,000 for fabrication services at one of its manufacturing and remanufacturing facilities. The stepdaughter of Bill F. Moore, Jr., the President of United Holdings, is an account representative for Midwest and received approximately $12,000 in commissions from Midwest in 2012 on the business done by Midwest with United Holdings.
CORPORATE GOVERNANCE
Business Ethics Guidelines
The Board has adopted Business Ethics Guidelines that apply to all directors, officers and employees of the Company. A copy of the Business Ethics Guidelines is available on the Company’s web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance. The Company is required to make prompt disclosure of any amendment to or waiver of any provision of its Business Ethics Guidelines that applies to any director or executive officer or to its chief executive officer, chief financial officer, chief accounting officer or controller, or persons performing similar functions. The Company will make any such disclosure that may be necessary by posting the disclosure on its web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance.
Corporate Governance Guidelines
The Board has adopted Corporate Governance Guidelines. A copy of the guidelines is available on the Company’s web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance.
12
Communication with Directors
Interested parties may communicate with the full Board or any individual directors, including the Chairmen of the Audit, Compensation and Governance Committees, the presiding director or the non-management or independent directors as a group, by writing to themc/o Kirby Corporation, 55 Waugh Drive, Suite 1000, Houston, Texas 77007. Complaints about accounting, internal accounting controls or auditing matters should be directed to the Chairman of the Audit Committee at the same address. All communications will be forwarded to the person(s) to whom they are addressed.
Web Site Disclosures
The following documents and information are available on the Company’s web site at www.kirbycorp.com in the Investor Relations section under Corporate Governance:
Audit Committee Charter
Compensation Committee Charter
Governance Committee Charter
Criteria for the Selection of Directors
Business Ethics Guidelines
Corporate Governance Guidelines
Communication with Directors
BENEFICIAL OWNERSHIP OF COMMON STOCK
Beneficial Ownership of Directors and Executive Officers
The following table shows the number of shares of common stock beneficially owned by each director, each named executive officer listed in the Summary Compensation Table, and by the directors and executive officers of the Company as a group as of March 1, 2010.2013. Under rules of the SEC, “beneficial ownership” is deemed to include shares for which the individual, directly or indirectly, has or shares voting or investment power, whether or not they
11
| Shares of Common Stock | ||||||||||||||||||||
| Beneficially Owned on March 1, 2010 | Percent of | |||||||||||||||||||
| Right to | Common | |||||||||||||||||||
| Direct(1) | Indirect | Acquire(2) | Total | Stock(3) | ||||||||||||||||
| DIRECTORS | ||||||||||||||||||||
| James R. Clark | 2,000 | — | 22,000 | 24,000 | ||||||||||||||||
| C. Sean Day | 29,424 | — | 36,000 | 65,424 | ||||||||||||||||
| Bob G. Gower | 41,922 | — | 27,731 | 69,653 | ||||||||||||||||
| William M. Lamont, Jr. | 36,284 | (4) | — | 57,000 | 93,284 | |||||||||||||||
| C. Berdon Lawrence | 645,337 | 84,227 | (5) | 92,982 | 822,546 | 1.5 | % | |||||||||||||
| David L. Lemmon | 4,000 | — | 34,000 | 38,000 | ||||||||||||||||
| Monte J. Miller | 6,274 | — | 35,988 | 42,262 | ||||||||||||||||
| George A. Peterkin, Jr. | 201,013 | (6) | 63,840 | (7) | 67,218 | 332,071 | ||||||||||||||
| Joseph H. Pyne | 409,782 | — | 116,942 | 526,724 | ||||||||||||||||
| Richard R. Stewart | 2,000 | — | 22,000 | 24,000 | ||||||||||||||||
| NAMED EXECUTIVES | ||||||||||||||||||||
| Gregory R. Binion | 45,537 | — | 18,782 | 64,319 | ||||||||||||||||
| Norman W. Nolen | 53,203 | — | 24,972 | 78,175 | ||||||||||||||||
| Dorman L. Strahan | 46,046 | — | 17,803 | 63,849 | ||||||||||||||||
| Steven P. Valerius | 47,288 | (8) | — | — | 47,288 | |||||||||||||||
| Directors and Executive Officers as a group (21 in number) | 1,714,058 | 148,067 | 604,635 | 2,466,760 | 4.5 | % | ||||||||||||||
| Shares of Common Stock Beneficially Owned on March 1, 2013 | Percent of Common Stock(3) | |||||||||||||||||||
| Direct(1) | Indirect | Right to Acquire(2) | Total | |||||||||||||||||
DIRECTORS | ||||||||||||||||||||
Richard J. Alario | 1,479 | — | 17,153 | 18,632 | ||||||||||||||||
C. Sean Day | 54,095 | — | 24,000 | 78,095 | ||||||||||||||||
Bob G. Gower | 36,383 | — | 20,574 | 56,957 | ||||||||||||||||
William M. Lamont, Jr. | 54,284 | (4) | — | 60,000 | 114,284 | |||||||||||||||
David L. Lemmon | 7,000 | — | 36,000 | 43,000 | ||||||||||||||||
Monte J. Miller | 2,636 | — | 55,264 | 57,900 | ||||||||||||||||
George A. Peterkin, Jr. | 149,418 | (5) | 69,920 | (6) | 64,947 | 284,285 | ||||||||||||||
Joseph H. Pyne | 427,226 | — | 70,850 | 498,076 | ||||||||||||||||
Richard R. Stewart | 8,000 | — | 34,000 | 42,000 | ||||||||||||||||
William M. Waterman | 150,001 | (8) | 349,999 | (7)(8) | 10,000 | 510,000 | ||||||||||||||
NAMED EXECUTIVES | ||||||||||||||||||||
Gregory R. Binion | 73,243 | — | 29,532 | 102,775 | ||||||||||||||||
David W. Grzebinski | 37,580 | — | 15,679 | 53,259 | ||||||||||||||||
William G. Ivey | 29,854 | — | 22,430 | 52,284 | ||||||||||||||||
James F. Farley | 45,863 | — | 21,046 | 66,909 | ||||||||||||||||
Directors and Executive Officers as a group | 1,226,626 | 421,439 | 531,798 | 2,179,863 | 3.8 | % | ||||||||||||||
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| (1) | Shares owned as of March 1, | |
| (2) | Shares with respect to which a director or executive officer has the right to acquire beneficial ownership within 60 days after March 1, | |
| (3) | No percent of class is shown for holdings of less than 1%. | |
| (4) | Does not include | |
| (5) | ||
| Does not include 8,000 shares owned by Mr. Peterkin’s wife. Mr. Peterkin disclaims beneficial ownership of those shares. |
| (6) | Shares owned by trusts of which Mr. Peterkin is trustee, the beneficiaries of which are relatives of his or his wife’s. Mr. Peterkin disclaims beneficial ownership of those shares. |
| (7) | Shares are held by a grantor retained annuity trust for the benefit of Mr. Waterman and, following the expiration of the two-year annuity term, for the benefit of Mr. Waterman’s wife and Mr. Waterman’s two adult children. |
| (8) |
12
The following table and notes set forth information as of the dates indicated concerning persons known to the Company to be the beneficial owner of more than 5% of the Company’s outstanding common stock, based on filings with the SEC:
| Number of Shares | Percent | |||||||
Name and Address | Beneficially Owned | of Class(1) | ||||||
| PRIMECAP Management Company | 3,229,014 | (2) | 5.98 | % | ||||
| 225 South Lake Avenue, Suite 400 Pasadena, California 91101 | ||||||||
| Araltec, S.L. | 2,990,190 | (3) | 5.54 | % | ||||
| Calle Santisima Trinidad, 2 | ||||||||
| Madrid, Spain 28010 | ||||||||
| Select Equity Group, Inc. and Select Offshore Advisors, LLC | 2,916,196 | (4) | 5.40 | % | ||||
| 380 Lafayette Street, 6th Floor New York, New York 10003 | ||||||||
| Harris Associates Inc. | 2,881,240 | (5) | 5.33 | % | ||||
| Two North LaSalle Street, Suite 500 | ||||||||
| Chicago, Illinois60602-3790 | �� | |||||||
Name and Address | Number of Shares Beneficially Owned | Percent of Class(1) | ||||||
Select Equity Group, Inc. and 380 Lafayette Street, 6th Floor New York, NY 10003 |
| 4,171,573 | (2) |
| 7.4 | % | ||
Atlanta Capital Investment Managers 1075 Peachtree Street NE, Suite 2100 Atlanta, GA 30309 | 3,449,500 | (3) | 6.1 | % | ||||
BlackRock, Inc. 40 East 52nd Street New York, NY 10022 | 3,295,927 | (4) | 5.8 | % | ||||
Araltec, S.L. Calle Santisima Trinidad, 2 Madrid, Spain 28010 | 2,990,190 | (5) | 5.3 | % | ||||
| (1) | Based on the Company’s outstanding shares of common stock on March 1, | |
| (2) | Based on Schedule 13G, dated February | |
| (3) | Based on Schedule 13G, dated January 29, 2013, filed by Eaton Vance Management for its subsidiary, Atlanta Capital Investment Managers, with the SEC. |
| (4) | Based on Schedule 13G, dated January 30, 2013, filed by BlackRock, Inc. with the SEC. |
| (5) | Based on Schedule 13G, dated December 23, 2009, filed by Araltec, S.L. with the SEC. | |
14
Section 16(a) Beneficial Ownership Reporting Compliance
The Company’s directors and executive officers, and persons who own beneficially more than 10% of the Company’s common stock, are required under Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) to file reports of beneficial ownership and changes in beneficial ownership of the Company’s common stock with the SEC and the NYSE. Based solely on a review of the copies of reports furnished to the Company and written representations that no other reports were required, the Company believes that its executive officers and directors complied with all Section 16(a) filing requirements during 2009,2012, except that onea report covering a saletwo sales on February 13, 2012 and February 14, 2012 for an aggregate of 53610,000 shares by Amy D. Husted, Vice President-Legal,a trust for the benefit of Mr. Lamont’s wife was filed late,on March 19, 2012 and one reportthe reports covering a 5,000 share charitable contribution bythe stock option grants and restricted stock awards to Mr. Pyne in 2009 was reported in March 2010.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Compensation CommitteeExecutive Summary
13
Compensation Objectives
The objectives of the compensation program are:
to attract and retain senior executives with competitive compensation opportunities; | ||
14
The Company’s executive compensation program is designed to reward:
performance that contributes to the long-term growth and stability of the Company and the effectiveness of management in carrying out strategic objectives identified for the Company (through the base salary);
the financial and operational success of the Company for the current year (through the annual incentive plan); and
the future growth and profitability of the Company (through long-term incentive compensation awards). Chief Executive Officer Compensation for 2012 Mr. Pyne’s salary increased from $710,000 to $772,500 in 2012 (an increase of 8.8% over 2011). He earned cash incentive compensation payments of $2,334,224 (a decrease of 17.1% from 2011) and received equity compensation awards with a grant date fair value of $1,853,172 (an increase of 9.0% over 2011). A total of 59% of his direct compensation (annual bonus, three-year performance award and stock options) was performance-based. 15 Highlights of Company Performance in 2012 The Company achieved strong financial results in 2012. The following table summarizes a number of key financial measures for 2011 and 2012 (dollars in millions except per share amounts):
The Company’s total stockholder return was (6%) for the last year and 78% for the last three years. During 2012, the Company further expanded and consolidated its position in the coastal marine transportation business through two significant acquisitions and made significant progress in changing the primary focus of the land-based diesel engine business acquired in 2011 from manufacturing to a more stable and predictable remanufacturing and service operation. Compensation Committee The Compensation Committee (the “Committee”) of the Board of Directors of the Company has the authority and responsibility to (1) determine the salaries for executive officers of the Company, (2) administer the Company’s annual incentive compensation program, (3) administer all of the Company’s stock option and incentive compensation plans and grant stock options, restricted stock and other awards under the plans and (4) review and make recommendations to the Board of Directors with respect to incentive and equity-based compensation plans and any other forms of compensation for executive officers of the Company. The Compensation Committee is composed of four members, all of whom are “independent directors,” “Non-Employee Directors” and “outside directors” as those terms are defined in relevant NYSE standards and federal securities and tax regulations. The Committee does not delegate any of its authority to determine executive compensation. The Committee considers recommendations from the Chief Executive Officer in making its compensation decisions for executive officers other than the Chief Executive Officer. The Committee will usually follow those recommendations when setting compensation for other executive officers since the Chief Executive Officer is in the best position to evaluate the contributions of the other executive officers to the success of the Company. The Committee undertakes an independent evaluation of the individual performance of the Chief Executive Officer prior to setting his compensation. The Committee also engaged a compensation consultant in connection with its compensation decisions for 2012. In determining the compensation of the named executive officers, the Compensation Committee considered all elements of total compensation, including salary, annual incentive compensation, equity-based and other long-term incentive compensation and projected payouts under the Company’s retirement plans. The Compensation Committee also relied in part on the marketplace analysis prepared by Cogent Compensation Partners, a compensation consulting firm retained by the 16 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. Say on Pay At the Company’s 2012 Annual Meeting, stockholders approved the compensation of the Company’s named executive Compensation Consultant For 2012, the Compensation Committee engaged the Consultant to provide information for the Committee to consider in making compensation decisions. The Consultant was engaged directly by the Compensation Committee to: review the reference group of comparable companies used for comparisons of Company performance and executive compensation; perform a marketplace analysis of direct compensation for senior executive officers compared to the reference group of companies and published compensation surveys; update the Committee on current issues in executive compensation; consult with the Committee concerning risks of the Company’s compensation policies and practices; consult with the Committee concerning the structure of the annual incentive plan; and consult with the Committee concerning the evaluation of executive compensation by proxy advisory firms. At the Compensation Committee’s request, the Consultant has addressed the six independence factors for compensation committee advisers that were identified in a recently adopted SEC regulation. The Committee concluded that there are no During 2012, Cogent Compensation Partners was acquired by another executive Consultant had previously provided. Elements of Compensation Salary The Compensation Committee attempts to set base salaries for the named executive officers at approximately the median for comparable companies. The Committee and management believe that the Company is 17 Based on information available responsibilities. Annual Incentive Compensation With regard to the annual cash incentives for executive officers, the Compensation Committee attempts to set annual incentive compensation targets at a level such that, with
Following the 2011 evaluation of the Company’s annual incentive plan The three additional performance measures are EBITDA, 18 Performance under the annual incentive plan is measured on a calendar year basis. At the beginning of Board, to serve as the basis for determining the total amount to be paid out pursuant to the annual incentive plan. For
In addition to the For
The Compensation Committee awarded the 19 Long-Term Incentive Compensation The Compensation Committee’s objective for long-term incentive compensation for executive officers is generally to fall between the 50th and 75th percentiles (depending on performance) in long-term incentive compensation of similar corporations and positions. In The Company maintains a long-term incentive compensation program for selected senior executives Under the program, the elements of long-term compensation to be awarded, as well as the executives selected to participate, are determined each year by the Compensation Committee.
For
The Committee granted Mr. Farley options to purchase 6,540 shares of common stock and 3,400 shares of restricted stock at the beginning of the year when he was Executive Vice President-Operations of the Company’s principal inland marine transportation subsidiary. Then when he was subsequently named President of the 20 Company’s principal offshore marine transportation subsidiary, the Committee granted him a three-year cash performance award with a target value of $224,000 to increase his long-term incentive compensation to a level commensurate with his increased responsibilities. The options vest over a three-year period and the restricted stock vests over a five-year period. The performance awards are based on a three-year performance period beginning January 1, The amount and form of the long-term incentive compensation awards, including the specific mix of long-term incentive compensation elements, were based in part on an analysis of market data on the amounts of awards and recommendations on the form of awards provided by the Consultant to the Compensation Committee.
The Compensation Committee set the base salary for Joseph H. Pyne, the Company’s Chairman of the Board and Chief
Retirement Plans The Company maintains two primary retirement plans in which the named executive officers are eligible to participate on the same basis as broad categories of employees — a Profit Sharing Plan and a 401(k) Plan. Most of the Company’s shore-based employees are eligible to participate in the Profit Sharing Plan. The aggregate contributions made to the plan by the Company are allocated among the participants according to base salary. All employees of the Company are eligible to participate in the 401(k) Plan, under which the Company will match employee contributions in an amount up to 3% of an employee’s base salary. The Company maintains an unfunded, nonqualified Deferred Compensation Plan for Key Employees, which is designed primarily to provide additional benefits to eligible employees to restore benefits to which they would be entitled under the Company’s Profit Sharing Plan and 401(k) Plan were it not for certain limits imposed by the 21 Internal Revenue Code. The plan is designed to restore benefits for employees being compensated in excess of certain limits ($ Perquisites and Personal Benefits The only perquisites or other personal benefits that the Company provides to the named executive officers are an automobile allowance that is given to approximately
cost of financial planning services provided to
Except for accelerated vesting of outstanding stock options, restricted stock and performance awards upon a change in control of the Company, there are no special compensation arrangements related to severance or change-in-control events. The Company has no employment agreements with any of its executive officers. Benchmarking Information used by the Compensation Committee The Consultant reevaluated the reference group used for Kirby in 2011 in light of the Company’s
22 Based on the most recent executive compensation review prepared by the Consultant for the Compensation Committee (for which the Consultant removed from the original reference group one company that separated its shipping business from its other business during the year and another company that filed for bankruptcy during the year): the base salaries of total cash compensation long-term incentive compensation total direct compensation Mr. Farley was promoted from Executive Vice President of the Company’s principal inland marine transportation subsidiary to President of the Company’s principal offshore marine transportation subsidiary during the year and The Consultant also gathered data on the Company’s financial performance relative to the reference group of comparable companies based on public information. The Company, which is slightly below the Other Compensation Matters Compensation Related Risk With the assistance of the Consultant, the Compensation Committee Company’s compensation programs do not encourage excessive risk taking and do not present risks that are reasonably likely to have a material adverse effect on the Company. Tax Considerations Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public companies for compensation over $1 million paid to the Chief Executive Officer and the three other most highly compensated executive officers other than the Chief Financial Officer. Certain performance-based compensation, however, is specifically exempt from the deduction limit. The Committee does take steps to qualify compensation for deductibility to the extent practical, but may award compensation that is not deductible when such an award would be in the Company’s best interests. Timing of Compensation Decisions The Compensation Committee generally makes executive compensation decisions in January of each year. Options have always been granted at an exercise price equal to the fair market value of the Company’s stock on the date of grant. Options granted at the regular January meeting of the Committee, which takes place several days before the Company’s public release of earnings information for the previous year, are granted at an exercise price equal to the fair market value of the Company’s stock on a specified date shortly after the earnings release, in which case the later date is considered the date of grant.
23 Stock Ownership Effective January 1, 2009, the Board established stock ownership guidelines for executive officers and directors of the Company and its subsidiaries. Executive officers must be in compliance within five years after the adoption of the guidelines or five years after becoming an executive officer, whichever is later, but are expected to accumulate the required number of shares ratably over the applicable five-year period. Under the guidelines, the Chief Executive Officer is required to own common stock of the Company having a value equal to four times his base salary. For the other named executive officers, the requirement is three times base salary. The guidelines do not address hedging the economic risk of stock ownership, but the Company’s insider trading policy prohibits employees and directors from engaging in short sales of the Company’s stock or in transactions involving options to buy or sell the Company’s stock (other than stock options granted by the Company). The Governance Committee of the Board will monitor compliance with the guidelines and may recommend modifications or exceptions to the Board. Compensation Committee Report The Compensation Committee of the Board of Directors of the Company has reviewed and discussed with management the Compensation Discussion and Analysis in this Proxy Statement. Based on that review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
Compensation Committee Interlocks and Insider Participation The members of the Compensation Committee are, and during
24 Compensation Tables Summary Compensation Table
25
Grants of Plan Based Awards During
26
Outstanding Equity Awards at December 31,
27
Option Exercises and Stock Vested During
28 Pension Benefits
Nonqualified Deferred Compensation
29 Equity Compensation Plan Information as of December 31,
Potential Payments Upon Change in Control If a change in control were to have occurred on December 31,
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 2012. Joseph H. Pyne Mr. Pyne’s options to purchase an aggregate of $61.89. Mr. Pyne had 30 On December 31,
Mr.
$61.89. Mr. Binion had On December 31,
Mr. $61.89. Mr. On December 31,
Mr. Ivey’s options to purchase an aggregate of 11,634 shares of common stock would have become fully exercisable on December 31, 2012, if a change in control had occurred on that date. Under the Mr. Ivey had 17,496 shares of restricted stock that were not vested as of December 31, 2012. If a change of control had occurred on that date, the 31 On December 31, 2012, Mr. Ivey would have become entitled to payments under previously granted performance awards totaling $88,740 if a change in control had occurred on that date. James F. Farley Mr. Farley’s options to purchase an aggregate of 10,867 shares of common stock would have become fully exercisable on December 31, 2012, if a change in control had occurred on that date. Under the terms of Mr. Farley’s stock options, he would have to pay $451,204 to purchase the shares. Accordingly, the maximum value of the accelerated vesting of the 10,867 options would have been $221,355 ($61.89 per share value on December 31, 2012, multiplied by 10,867 shares minus $451,204, the aggregate exercise price of the options). All other options held by Mr. Farley on December 31, 2012 have an exercise price higher than the year end stock price of $61.89. Mr. Farley had 16,760 shares of restricted stock that were not On December 31, 2012, Mr. Farley would have become entitled to that date. AUDIT COMMITTEE REPORT The Audit Committee of the Board of Directors of the Company is responsible for monitoring the integrity of the Company’s financial reporting, accounting procedures and internal controls. The Audit Committee is composed of four directors, all of whom are independent within the meaning of SEC and NYSE rules. The Audit Committee operates under a written charter adopted by the Board. Management is primarily responsible for the Company’s financial reporting process and internal controls. The Company’s independent auditors are responsible for performing an audit of the Company’s financial statements and issuing a report on the conformity of the financial statements with generally accepted accounting principles. The Company’s independent auditors are also responsible for performing an audit of the Company’s internal control over financial reporting. The Audit Committee is responsible for overseeing those processes. The Audit Committee has reviewed and discussed the audited financial statements of the Company for the year ended December 31,
amended and as adopted by the Public Company Accounting Oversight Board (the “PCAOB”) Based on the Audit Committee’s review of the audited financial statements for the year ended December 31,
RATIFICATION OF THE AUDIT COMMITTEE’S SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee has selected KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2013. The Board of Directors of the Company unanimously recommends that you vote “FOR” the ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2013. Ratification of the selection of KPMG requires the affirmative vote of a majority of the shares represented at the meeting in person or by proxy. If the stockholders do not ratify the selection of KPMG, the Audit Committee will reconsider the selection. However, because of the difficulty and expense of changing independent auditors at this point in the year, the selection of KPMG will probably be continued for Representatives of KPMG are expected to be present at the Fees Paid to the Independent Registered Public Accounting Firm The following table sets forth the fees billed by KPMG, the Company’s independent registered public accounting firm, during the last two fiscal years:
Audit Feesare fees for professional services rendered by KPMG for the audit of the Company’s annual financial statements, audit of internal control over financial reporting, review of the Company’s quarterly financial statements or services normally provided in connection with statutory or regulatory filings. Audit-Related Feesare fees for assurance and related services reasonably related to the performance of the audit or review of the Company’s financial statements. Services performed by KPMG in this category consisted of the audit of the Company’s benefit plans. Tax Feesare fees for professional services rendered by KPMG for tax compliance, tax advice and tax planning. Services performed by KPMG in this category for 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.
33 ADVISORY VOTE ON EXECUTIVE COMPENSATION (PROPOSAL 3) The Company is requesting your approval, on a non-binding advisory basis, of the compensation of the Company’s named executive officers as disclosed and discussed under “EXECUTIVE COMPENSATION” on pages 15-24 of this Proxy Statement. We believe that our executive compensation:is competitive as necessary to attract and retain qualified executives; is appropriately tied to Company and individual performance; is designed with both short-term and long-term business objectives of the Company in mind; does not encourage excessive risk-taking by the Company’s management; and properly aligns the interests of management with those of the Company’s stockholders. For those reasons, we are asking you to approve the following resolution: RESOLVED that the compensation of the Company’s named executive officers as described under “EXECUTIVE COMPENSATION” in the Company’s Proxy Statement for its 2013 Annual Meeting of Stockholders is approved. Although the vote on approval of executive compensation is not binding, the Compensation Committee and the Board will consider the result of the vote in making future compensation decisions. The Board of Directors of the Company unanimously recommends that you vote “FOR” Proposal 3 approving the compensation of the named executive officers as disclosed in this Proxy Statement. OTHER BUSINESS The Board knows of no other business to be brought before the Annual Meeting. However, if any other matters are properly presented, it is the intention of the persons named in the accompanying proxy to take such action as in their judgment is in the best interest of the Company and its stockholders. STOCKHOLDER PROPOSALS FOR Stockholder proposals must be received by the Company at its principal executive offices no later than November 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.
March 8, 2013 Houston, Texas
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q PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Change of Address— Please print new address 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.
q PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Proxy — Kirby Corporation 55 Waugh Drive, Suite 1000 P.O. Box 1745 Houston, Texas 77251-1745 This Proxy is solicited on behalf of the Board of Directors of Kirby Corporation. The undersigned hereby appoints Joseph H. Pyne, David W. Grzebinski, G. Stephen Holcomb and Thomas G. Adler, and each of them, as Proxies, each with the power to appoint his substitute, and hereby authorizes each to represent and to vote, as designated below, all the shares of common stock, par value $0.10 per share, of Kirby Corporation (the “Company”) held of record by the undersigned as of the close of business on March 1, 2013, at the Annual Meeting of Stockholders to be held on April 23, 2013, at 55 Waugh Drive, 9th floor, Houston, Texas 77007 at 10:00 A.M. (CDT) and any adjournment(s) thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE PERSONS LISTED IN PROPOSAL 1. SHOULD ANY OF THEM REFUSE OR BECOME UNABLE TO ACCEPT ELECTION AS A DIRECTOR OF THE COMPANY, THE PROXY WILL BE VOTED FOR THE ELECTION OF SUCH PERSON OR PERSONS AS MAY BE NOMINATED OR DESIGNATED BY THE BOARD OF DIRECTORS. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 2 AND 3. THE PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO ANY MATTER REFERRED TO IN ITEM 4. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE. (Continued and to be signed on reverse side) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
