UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of Report (Date of earliest event reported): January 23,
2006
Kirby
Corporation
(Exact
name of registrant as specified in its charter)
|
Nevada
(State
or other jurisdiction
of
incorporation)
|
1-7615
(Commission
File
Number)
|
75-1884980
(IRS
Employer
Identification
No.)
|
55
Waugh Drive, Suite 1000
Houston,
Texas 77007
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: (713) 435-1000
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
£
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
£
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
£
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
£
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
|
Item
1.01
|
Entry
into a Material Definitive
Agreement.
|
2005
Bonuses
On
January 23, 2006, the Compensation Committee of Kirby’s Board of Directors
awarded discretionary bonuses to the Company’s Chief Executive Officer and four
other most highly compensated executive officers (the “named executive
officers”) under the Company’s incentive bonus plan for 2005.
The
Company’s 2005 incentive bonus plan is based on the achievement of three equally
weighted performance measures by each of the Company’s three business groups —
inland marine transportation, diesel engine services and offshore marine
transportation — and by the Company as a whole. The three performance measures
are EBITDA (net earnings before interest expense, taxes on income, depreciation
and amortization), return on total capital and earnings per share.
At
the
beginning of the year, the Compensation Committee established objectives for
each of the three performance measures for the year, based on the budget for
the
year approved by the Board of Directors. A target bonus expressed as a
percentage of base salary was established for each participant. There is a
range
of possible bonuses under the plan, with no bonus earned unless at least 80%
of
the target performance is achieved and a maximum possible award of 200% of
the
target bonus if 120% of the target performance is achieved. Bonuses for
employees of the Company itself (a holding company which conducts operations
through its subsidiaries) are based entirely on the performance of the Company
as a whole. Bonuses for the heads of the Company’s business groups are based 50%
on the performance of the business group and 50% on overall Company performance.
Bonuses for all other employees in a business group are based 70% on the
performance of the business group and 30% on Company performance.
Seventy-five
percent of each participant’s bonus is based on the achievement of the target
performance by the Company and its business groups for the year (shown as the
“formula bonus” in the table below); 25% of each participant’s bonus is
allocated based on a discretionary assessment of individual performance for
the
year (shown as the “discretionary bonus” in the table below).
At
its
January 23 meeting, the Compensation Committee awarded the full discretionary
25% of the bonus award to each named executive officer. The total bonuses earned
by each named executive officer for 2005 were as follows:
|
Officer
|
Formula
Bonus
|
Discretionary
Bonus
|
|||||
|
Joseph
H. Pyne
|
$
|
645,802
|
$
|
215,267
|
|||
|
President
and Chief Executive
Officer
|
|||||||
|
C.
Berdon Lawrence
|
$
|
494,189
|
$
|
164,730
|
|||
|
Chairman
of the Board
|
|||||||
|
Stephen
P. Valerius
|
$
|
290,562
|
$
|
96,854
|
|||
|
President,
Kirby Inland Marine,
LP
|
|||||||
|
Norman
W. Nolen
|
$
|
236,903
|
$
|
78,967
|
|||
|
Executive
Vice President,
Treasurer
and Chief Financial
Officer
|
|||||||
|
Mark
R. Buese
|
$
|
182,233
|
$
|
60,744
|
|||
|
Senior
Vice President-
Administration
|
|||||||
2006
Target Bonuses
For
2006,
the Compensation Committee modified the annual incentive plan to identify a
fourth business group, Osprey Line, L.L.C., approved EBITDA, return on total
capital and earnings per share as the three performance measures under the
plan
for 2006 and set the target bonuses for participants in the annual incentive
plan, including target bonuses at the following percentages of base salary
for
the named executive officers:
|
Joseph
H. Pyne
|
90
|
%
|
||
|
President
and Chief Executive Officer
|
||||
|
C.
Berdon Lawrence
|
90
|
%
|
||
|
Chairman
of the Board
|
||||
|
Steven
P. Valerius
|
70
|
%
|
||
|
President
of Kirby Inland Marine, LP
|
||||
|
Norman
W. Nolen
|
70
|
%
|
||
|
Executive
Vice President, Treasurer and Chief Financial Officer
|
||||
|
Mark
R. Buese
|
70
|
%
|
||
|
Senior
Vice President-Administration
|
The
range
of possible bonuses under the plan and the weighting between Company and
business group performance remain the same as they were for 2005.
|
Item
9.01.
|
Financial
Statements and Exhibits.
|
(c)
Exhibits
|
Exhibit
Number
|
Description
of Exhibit
|
|
10.1
|
Annual
Incentive Plan Guidelines (2006 Plan
Year)
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated
January 27, 2006.
| KIRBY CORPORATION | ||
| (Registrant) | ||
| By |
/s/
G. Stephen Holcomb
|
|
|
G.
Stephen Holcomb
|
||
|
Vice
President
|
||
EXHIBIT
INDEX
|
Exhibit
Number
|
Description
of Exhibit
|
|
10.1
|
Annual
Incentive Plan Guidelines (2006 Plan
Year)
|
Exhibit
10.1
ANNUAL
INCENTIVE PLAN
2006
Plan
Year
Guidelines
KIRBY
CORPORATION
January
2006
TABLE
OF CONTENTS
|
Introduction
|
2
|
|
The
Annual Incentive Plan
|
3
|
|
Performance
Measurement Period
|
3
|
|
Eligibility
|
3
|
|
Plan
Objectives
|
4
|
|
Performance
Measures
|
4
|
|
Corporate
and Business Group Weighting
|
5
|
|
Individual
Bonus Targets
|
6
|
|
Annual
Incentive Plan Concept
|
6
|
|
Performance
Measures and Weighting
|
7
|
|
Performance
Standards and Award Opportunities
|
7
|
|
Example
Award Calculation
|
8
|
|
Administration
|
9
|
1
Introduction
Kirby
Corporation established its Annual Incentive Plan to focus employees on
identifying and achieving business strategies that will grow the business
and
lead to an increase in shareholder value. The Annual Incentive Plan is also
intended to reward superior performance by employees, for their contributions
toward achieving Kirby’s objectives. This program may be offered, in whole or in
part, to wholly owned subsidiaries of the Company, at the Company’s
discretion.
Certain
aspects of this Bonus Plan are complex. Although these guidelines establish
rules for Plan operation, those rules may not work in all cases. Therefore,
the
Compensation Committee of the Kirby Board of Directors shall have the
discretionary authority to interpret, and if determined appropriate, deviate
from the Guide to insure that the awards are consistent with the Plan’s purposes
and the Company’s interests. All decisions by the Compensation Committee shall
be final and binding.
This
Plan, or any part thereof, may be amended, modified, or terminated at any
time,
without prior notice, by written authorization of the President and Chief
Executive Officer of the Company.
This
Plan
supercedes all prior annual incentive bonus plans or programs maintained
by the
Company.
The
initial Plan became effective January 1, 2003.
2
The
Annual Incentive Plan
The
Annual Incentive Plan is an award for total Company performance, and for
the
performance of our four Business Groups; Kirby Inland Marine, Kirby Engine
Systems, Dixie Offshore Transportation and Osprey, Line. Awards are 75%
formula-driven and 25% driven by individual performance, and are based on
achieving Company, Business Group and individual performance
objectives.
Performance
Measurement Period
Performance
is measured on a calendar year basis for the Annual Incentive Plan. The
Performance Period begins on January 1 and ends on December 31.
Eligibility
|
·
|
Generally,
shore staff managerial employees in salary grades 15 and above,
and
Wheelhouse employees classified as Captain, Relief Captain or Pilot,
will
be eligible for consideration to be participants. Selection for
participation in the Plan will be based upon each position’s ability to
impact long-term financial results of the Company. Consequently,
all
employees in positions at salary grades 15 and above might not
be included
in the Plan, and employees in positions below salary grade 15 might
be
included.
|
|
·
|
In
order to be eligible to receive an award participants must be employed
on
the last day of the Performance Period, and on the date bonuses
are
actually paid for the respective Performance Period, unless their
earlier
termination is due to death, normal retirement1
or
disability1.
|
|
·
|
It
should also be noted that participation in the Bonus Plan in one
year does
not guarantee participation in future years. Participants in the
Plan will
be notified annually of their selection for
participation.
|
_____________________________
1
Normal
retirement or disability as defined for shore based employees in the Company’s
Profit Sharing Plan, and as defined for wheelhouse employees in the Vessel
Pension Plan
3
Plan
Objectives
The
Annual Incentive Plan has five key objectives:
|
·
|
Provide
an annual incentive plan that drives performance toward objectives
critical to creating shareholder
value.
|
|
·
|
Offer
competitive cash compensation opportunities to key Kirby
employees.
|
|
·
|
Award
outstanding achievement among employees who can directly affect
Kirby’s
results.
|
|
·
|
Assist
Kirby in attracting and retaining high quality
employees.
|
|
·
|
Reflect
both quantitative and qualitative performance factors in actual
bonus
payouts.
|
Performance
Measures
The
performance measures for the Annual Incentive Plan are:
|
·
|
EBITDA
|
|
·
|
Return on Total Capital |
|
·
|
Earnings per share |
Annual
performance targets will be established for each measure based on Kirby’s
projected budget, and individual bonus payments will be based on a combination
of Company performance and individual performance.
Participants
will receive 75% of their award based on Company performance in achieving
the
three performance measures, with the remaining 25% based on an assessment
of
individual performance for the year.
Each
of
the performance measures will have equal weight in calculating the bonus
payout
pool.
4
Corporate
& Business Group Weighting
The
Annual Incentive Plan bonus is calculated at the end of the year based on
the
performance of Kirby and the performance of our four Business Groups, Kirby
Inland Marine, Kirby Engine Systems, Dixie Offshore Transportation and Osprey
Line, relative to objectives established at the beginning of the
year.
The
award
for Business Group employees will be primarily tied to Business Group
performance, with a defined portion tied to Company performance.
The
award
for Corporate employees will be tied entirely to total Kirby
performance.
|
Annual
Incentive Plan
Calculation
|
|||||||
|
Incentive
Bonus
Calculation %
|
|||||||
|
Kirby
(Company)
|
Business
Group
|
||||||
|
All
Corporate Employees
|
100
|
%
|
0
|
%
|
|||
|
Business
Group Employees
|
|||||||
|
(Inland,
Engine Systems, Offshore and Osprey)
|
30
|
%
|
70
|
%
|
|||
|
Inland
& Engine Systems Presidents
|
50
|
%
|
50
|
%
|
|||
5
Individual
Bonus Targets
Each
participant will be assigned a bonus level which is based on competitive
market
practices, as well as the employee’s ability to impact long-term Company
performance. Market practices will be determined using data from either general
industry, the marine transportation industry, or the diesel repair industry,
depending upon the individual position being considered. It is the Company’s
intent that salary plus target annual bonus be positioned to provide a
competitive market opportunity for target performance.
Annual
Incentive Plan Concept
6
Performance
Measures and Weighting
|
Measure
|
Weight
|
|||
|
n
EBITDA (Earnings Before Interst, Taxes, Depreciation
and Ammortization)
|
33-1/3
|
%
|
||
|
n
Return on Total Capital (Earnings before interest and taxes divided
by
average beginning and ending shareholders equity plus long-term
debt)
|
33-1/3
|
%
|
||
|
n
Earnings per Share
|
33-1/3
|
%
|
||
|
100
|
%
|
|||
Performance
Standards & Award Opportunities
|
Performance
Level
|
Definition
|
Relationship
to
Budget
|
%
of Target
Earned
|
|
Threshold
|
Minimal
acceptable performance for payout
|
80%
of Budget
|
50%
|
|
Target
|
Expected
performance at a stretch level
|
100%
of Budget
|
100%
|
|
Maximum
|
Outstanding
performance
|
120%
of Budget
|
200%
|
Performance
must be at least to Threshold to earn a bonus payment.
7
Example
Award Calculation
|
Performance
Standards
|
Example
Calculation
|
|||||||
|
Performance
Objectives
|
Below
Threshold
|
Threshold
|
Target
|
Maximum
|
Assumed
Actual Results (% Budget Achieved)
|
Percent
of Target Award Earned
|
Objective
Weight
|
Weighted
Percent of Target Award Earned
|
|
Percent
of Target Award Earned:
|
0%
|
50%
|
100%
|
200%
|
||||
|
EBITDA
(%
Budget Achieved)
|
<
80%
|
80%
|
100%
|
120%
|
90%
|
75%
|
33-1/3%
|
25%
|
|
Return
on Total Capital (% Budget Achieved)
|
<
80%
|
80%
|
100%
|
120%
|
110%
|
150%
|
33-1/3%
|
50%
|
|
Earnings
per Share (% Budget Achieved)
|
<
80%
|
80%
|
100%
|
120%
|
100%
|
100%
|
33-1/3%
|
33.3%
|
|
Total
Percent of Target Awards Earned for Bonus Pool:
|
108.3%
|
|||||||
|
n
|
As
shown in the exhibit, actual performance on each objective results
in a
corresponding percent of target award
earned.
|
|
n
|
The
percents of target award earned for each objective are then multiplied
by
the weight for the objective, producing a weighted percent of
target award
earned for each objective.
|
|
n
|
The
weighted percents of target award earned for all objectives
are summed to
produce a total percent of target awards earned. This factor,
when
multiplied by the sum of target bonuses for plan participants,
equals the
bonus funding pool.
|
|
n
|
75%
of the total pool is paid to participants pro-rata, based
on their
individual bonus level and their applicable base salary for
the
period.
|
|
n
|
The
remaining 25% is awarded to participants based on individual
performance.
|
8
Administration
Award
Payout
A
participant’s Final Award is paid out in cash within 90 days following the end
of the Company’s fiscal year, based on audited financials.
Eligibility
Limitation
Unless
otherwise provided for as a special circumstance (below), selected participants
must be employed by the Company on the last day of the Performance Period,
and
on the date bonuses are actually paid for the respective Performance Period,
in
order to be eligible to receive a bonus award.
Special
Circumstances
Listed
below are guidelines addressing termination and other events. The Committee
will
have the sole authority to resolve disputes related to Plan administration.
Decisions made by the Committee will be final and binding on all
participants.
New
Employees.
New
employees hired after the beginning of a Performance Period who are selected
for
participation in the Plan, will receive prorated awards for the then current
Performance Period, subject to the Termination of Employment restrictions.
Termination
of Employment.
If
employment terminates before the end of the full Performance Period, or before
the date bonuses are actually paid for the respective Performance Period,
as a
result of death, normal retirement3,
or
disability3,
the
participant (or the participant’s heirs) will be entitled to receive a prorated
award at the end of the Performance Period, based upon base wages earned
while
employed during the Performance Period.
If
employment terminates prior to the last day of the applicable Performance
Period, or prior to the date bonuses are actually paid for the respective
Performance Period, for any reason other then death, normal
retirement3,
or
disability3,
the
participant will be ineligible to receive an award.
________________________
3
Normal
retirement or disability as defined for shore based employees in the Company’s
Profit Sharing Plan, and as defined for wheelhouse employees in the Vessel
Pension Plan.
9
Transfer.
A
participant who is transferred between business units of the Company will
be
entitled to receive a weighted award based upon the time spent at each of
the
units. The weighted award is calculated by adding (1) the participant’s prorated
award for time spent at the first business unit, to (2) the participant’s
prorated award for time spent at the second business unit4.
Promotions.
A
participant who is promoted or reassigned during any Performance Period,
and
whose bonus target is subsequently increased or decreased, will be eligible
to
receive a weighted award. The award is calculated by adding (1) the prorated
award for service before the promotion or reassignment, to (2) the prorated
award for service after the promotion or reassignment4.
Compensation
Committee
The
Compensation Committee has the responsibility for the overall governance
and
administration of the Plan. In fulfilling its duties, the Committee will
be
responsible for interpreting the Plan and will rely on these guidelines in
making all determinations that are necessary or advisable for administration
of
the Plan.
In
administering the Plan the Committee will, on an annual basis:
|
·
|
Approve
the designation of Business Groups within the
Company
|
|
·
|
Approve
the Performance Measures and the Threshold, Target and Maximum
budget
performance levels
|
|
·
|
Approve
linkage for participants to Company and Business Group
performance
|
|
·
|
Approve
the Bonus Levels for all participants whose salaries are at or
above
$100,000
|
President
& CEO
The
CEO
will have primary responsibility for recommending Plan guidelines to the
Committee, and for carrying out the administrative duties associated with
annual
award calculations. In addition, the Compensation Committee may delegate
additional administrative duties to the CEO or any Company officer.
_______________________
4
Company
and Business Group performance factors are calculated using performance for
the
entire Performance Period.
10
CFO
The
CFO
will be responsible for calculating performance under the Plan and recommending
adjustments to the performance objectives. In this capacity, the CFO
will:
|
·
|
Provide
annual reports to the Compensation Committee and the CEO on each
Business
Group’s performance at the end of the Company’s fiscal
year
|
|
·
|
Maintain
a financial information system that reports results on an estimated
quarterly and annual basis
|
|
·
|
Coordinate
with the Company’s auditors to properly recognize any accounting expense
associated with awards under the
Plan
|
|
·
|
Provide
the VP of Human Resources with the performance results of each
Business
Group as well as overall Company
performance
|
|
·
|
Calculate
new Threshold, Target and Maximum performance objectives as required
by
the Plan
|
VP
of Human Resources
The
VP of
Human Resources will have primary responsibility for the day-to-day
administration of the Plan. In this capacity, the VP of Human Resources
will:
|
·
|
Develop
and recommend Target Award Guidelines and eligible participants
for each
new Performance Period to the CEO for
approval
|
|
·
|
Coordinate
communications with participants, including materials to facilitate
understanding the Plan’s objectives and
goals
|
|
·
|
Provide
quarterly performance updates to Plan
participants
|
|
·
|
Calculate
participants’ awards, using the performance factors provided by the
CFO
|
|
·
|
Process
paperwork approving individual award
payments
|
Business
Group Presidents and Vice Presidents
Business
Group Presidents and Vice Presidents will:
|
·
|
Recommend
participants for each Performance
Period
|
|
·
|
Coordinate
with the CFO to determine any significant changes in business conditions
for purposes of reviewing the Threshold, Target and Maximum performance
objectives
|
|
·
|
Insure
that participants are informed of the actual award earned for each
Performance Period
|
11