SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12
MARITRANS INC.
-----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
Two Harbour Place
302 Knights Run Avenue
Suite 1200
Tampa, FL 33602
813-209-0600
March 12, 2004
Dear Fellow Maritrans Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Maritrans Inc. (the "Company"), which will be held on Thursday, April 29, 2004,
at 9:00 a.m., local time, at the Wyndham Harbour Island Hotel, 725 S. Harbour
Island Boulevard, Tampa, FL 33602.
We plan to review the business and finances of the Company as well as answer
stockholder questions. The only business matter to be considered and voted upon
at the meeting will be the election of two directors to serve for three-year
terms as more specifically discussed in the attached Proxy Statement. Also,
attached you will find the Notice of the Annual Meeting and your Proxy Form.
It is important that your shares be represented at the meeting, and we hope
you will be able to attend the meeting in person. Whether or not you plan to
attend the meeting, please be sure to complete and sign the enclosed Proxy Form
and return it to us in the envelope provided as soon as possible so that your
shares may be voted in accordance with your instructions. Your prompt response
will save the Company the cost of further solicitation of unreturned proxies.
We look forward to seeing you in person on April 29, 2004.
Sincerely,
/s/ Stephen A. Van Dyck
---------------------------
Stephen A. Van Dyck
Chairman of the Board
MARITRANS INC.
Two Harbour Place
302 Knights Run Avenue
Suite 1200
Tampa, FL 33602
---------------------------------------
NOTICE OF 2004 ANNUAL MEETING
OF STOCKHOLDERS
To Be Held April 29, 2004
---------------------------------------
The Annual Meeting of Stockholders (the "Meeting") of Maritrans Inc., a
Delaware corporation (the "Company"), will be held at the Wyndham Harbour Island
Hotel, 725 S. Harbour Island Boulevard, Tampa, FL 33602 on Thursday, April 29,
2004, at 9:00 a.m. local time, for the purpose of considering and voting upon
the following matters:
1. The election of two directors to serve for a three (3) year term, and
2. The transaction of such other business as may properly come before the
Meeting and any adjournments or postponements thereof.
The close of business on March 12, 2004, has been fixed as the date of
record for determining stockholders of the Company entitled to receive notice of
and to vote at the Meeting and any adjournments or postponements thereof.
Your attention is invited to the accompanying Proxy Statement, which
forms a part of this Notice. Your vote is important. Stockholders are
respectfully requested by the Board of Directors to complete and sign the
accompanying Proxy Form and return it to the Company in the enclosed,
postage-paid envelope, whether or not you plan to attend the meeting. If you
attend the Meeting, you may revoke your proxy, if you wish, and vote in person.
By Order of the Board of Directors
Walter T. Bromfield
Secretary
Tampa, Florida
March 12, 2004
MARITRANS INC.
Two Harbour Place
302 Knights Run Avenue
Suite 1200
Tampa, FL 33602
---------------------------------------
NOTICE OF 2004 ANNUAL MEETING
OF STOCKHOLDERS
To Be Held April 29, 2004
---------------------------------------
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of Maritrans Inc. (the
"Company") for use at the 2004 Annual Meeting of Stockholders (the "Meeting") to
be held on Thursday, April 29, 2004, at 9:00 a.m., local time, at the Wyndham
Harbour Island Hotel, 725 S. Harbour Island Boulevard, Tampa, FL 33602. Each
proxy that is properly executed and returned in time for use at the Meeting will
be voted at the Meeting and any adjournments or postponements thereof in
accordance with the choices specified. Each proxy may be revoked by the person
giving the same at any time before its exercise by notice in writing received by
the Secretary.
The cost of solicitation of proxies will be borne by the Company.
Solicitation will be made by mail. Additional solicitation may be made by means
of follow-up letter, telephone or fax by officers and employees of the Company,
who will not be specially compensated for such services. Proxy forms and
materials also will be distributed to beneficial owners through brokers,
custodians, nominees and similar parties, and the Company intends to reimburse
such parties, upon request, for reasonable expenses incurred by them in
connection with such distribution.
The Proxy Statement and the enclosed Proxy Form are first being mailed
to stockholders on or about March 31, 2004. The address of the principal
executive offices of the Company is: Maritrans Inc., Two Harbour Place, 302
Knights Run Avenue, Suite 1200, Tampa, FL 33602.
The Company's annual report to stockholders for the year ended December
31, 2003, including audited financial statements, is being mailed to
stockholders with this Proxy Statement, but does not constitute a part of this
Proxy Statement.
MATTERS TO BE ACTED UPON AT THE MEETING
As indicated in the Notice of Meeting, two directors will be elected at
the Meeting to serve for a three-year term. The other five members of the Board,
who are not standing for election at the meeting because their terms have not
expired, will continue to serve on the Board.
VOTING AT THE MEETING
Holders of the shares of the Company's common stock, $.01 par value
("Common Stock"), of record at the close of business on March 12, 2004, are
entitled to vote at the Meeting. As of close of business on the record date,
8,152,381 shares of Common Stock were outstanding. Each stockholder entitled to
vote shall have the right to one vote for each share outstanding in such
stockholder's name. The presence in person or by proxy of the holders of record
of a majority of the shares entitled to vote at the Meeting shall constitute a
quorum.
The Company presently has no other class of stock outstanding and
entitled to be voted at the Meeting. The holders of a majority of the shares
entitled to vote, present in person or represented by proxy, constitute a
quorum. A plurality of votes cast at the Meeting is required for the election of
each director. The affirmative vote of a majority of the shares present in
person or represented by proxy at the Meeting and entitled to vote is required
to take action with respect to any other matter as may be properly brought
before the meeting, unless a different vote is required by law, the Company's
Restated Certificate of Incorporation or the Company's By-Laws.
1
With regard to the election of the directors, votes may be cast in favor
or withheld. Votes that are withheld will be excluded entirely from the vote and
will have no effect.
Brokers that are member firms of the New York Stock Exchange and who
hold shares in street name for customers have the authority to vote those shares
with respect to the election of the directors if they have not received
instructions from a beneficial owner. A failure by brokers to vote shares will
have no effect in the outcome of the election of a director, because a director
is to be elected by a plurality of the votes cast.
Shares cannot be voted at the Meeting unless the holder of record is
present in person or represented by proxy. The enclosed Proxy Form is a means by
which a stockholder may authorize the voting of his or her shares at the
Meeting. The shares of Common Stock represented by each properly executed Proxy
Form will be voted at the Meeting in accordance with each stockholder's
directions. Stockholders are urged to specify their choices by marking the
appropriate boxes on the enclosed Proxy Form; if no choice has been specified,
the shares will be voted as recommended by the Board. If any other matters are
properly presented to the Meeting for action, the proxy holders will vote the
proxies (which confer discretionary authority to vote on such matters) in
accordance with their best judgment.
Execution of the accompanying Proxy Form will not affect a stockholder's
right to revoke it by giving written notice of revocation to the Secretary of
the Company before the proxy is voted, by voting in person at the Meeting, or by
executing a later-dated proxy that is received by the Company before the
Meeting.
Your proxy vote is important to the Company. Accordingly, you are asked
to complete, sign and return the accompanying Proxy Form, whether or not you
plan to attend the Meeting, by Thursday, April 22, 2004. If you plan to attend
the Meeting to vote in person and your shares are registered with the Company's
transfer agent (American Stock Transfer & Trust Company) in the name of a
broker, bank or other custodian, nominee or fiduciary, you must secure a proxy
from such person assigning you the right to vote your shares.
ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation provides that the
Board of Directors of the Company is classified into three classes of directors
having staggered terms of office.
The Board currently is comprised of seven directors serving staggered
terms of office. The term of two current directors, Robert J. Lichtenstein and
Frederick C. Haab, will expire at the 2004 Annual Meeting. The Board has
nominated Mr. Lichtenstein and Mr. Haab for election as directors of the Company
for a term of office which would expire in 2007. The remaining five directors
will continue to serve in accordance with their prior election.
Unless instructed otherwise, the persons named in the enclosed proxy, or
their substitutes, will vote signed and returned proxies FOR the nominees. The
nominees have agreed to serve if elected. The directors are to be elected by a
plurality of the votes cast at the Meeting.
If for any reason not presently known, a nominee is not available for
election, another person may be nominated by the Board and voted for in the
discretion of the persons named in the enclosed proxy. Vacancies on the Board
occurring after the election will be filled by Board appointment to serve as
provided by the Company's By-Laws.
The Board of Directors recommends a vote FOR each nominee.
Requirements for Advance Notification of Nominees
Section 4.13(b) of the Company's By-Laws provides that any stockholder
entitled to vote for the election of a director at a meeting may nominate a
director for election if written notice of the stockholder's intent to make such
a nomination is received by the Secretary of the Company not less than 14 days
nor more than 50 days prior to any meeting of the stockholders called for the
election of directors, with certain exceptions. This notice must contain or be
accompanied by the following information:
2
(a) the name of the stockholder who intends to make the nomination;
(b) a representation that the stockholder is a holder of record of the
Company's voting stock and intends to appear in person or by proxy
at the meeting to nominate the person or persons specified in the
notice;
(c) such information regarding each nominee that would be required in a
proxy statement filed pursuant to the rules of the Securities and
Exchange Commission if proxies had been solicited with respect to
the nominee by the management or Board of Directors of the Company;
(d) a description of all arrangements or understandings among the
stockholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; and
(e) the consent of each nominee to serve as a director of the Company.
Pursuant to the above requirements, the Secretary of the Company must
receive appropriate notices in respect of nominations for directors no later
than April 15, 2004.
INFORMATION REGARDING NOMINEES FOR ELECTION AS DIRECTORS AND
REGARDING CONTINUING DIRECTORS
The information provided herein as to personal background has been
provided by each director and nominee as of March 1, 2004.
Nominees for Election at the 2004 Annual Meeting for Terms Expiring
in 2007
Robert J. Lichtenstein .....Mr. Lichtenstein has been a partner in the
law firm of Morgan, Lewis & Bockius LLP
since 1988. He is the Chairman of the
Company's Nominating and Corporate
Governance Committee of the Board of
Directors. See "Certain Transactions --
Other". Mr. Lichtenstein is 56 and has
served on the Board of Directors since 1995.
Frederick C. Haab ..........Mr. Haab is President and Chief Executive
Officer of F.C. Haab Co., Inc., a petroleum
products and HVAC services company. Mr. Haab
is presently on the Regional Board of PNC
Bank of Philadelphia having previously
served as Audit Committee Chairman on the
Midlantic Bank Board of Directors. He is a
member of The Lankenau Hospital Foundation,
The Episcopal Academy and The Union League
of Philadelphia. He is a member of the
Company's Audit and Nominating and Corporate
Governance Committees of the Board of
Directors. Mr. Haab is 66 and has served on
the Board of Directors since 2002.
Directors Continuing in Office with Terms Expiring in 2005
Dr. Robert E. Boni .........Dr. Boni retired as Chairman of Armco Inc.,
a steel, oil field equipment and insurance
corporation on November 30, 1990. Dr. Boni
became Chief Executive Officer of Armco Inc.
in 1985 and Chairman in 1986. He served as
Non-Executive Chairman of the Board of and
consultant for Alexander & Alexander
Services Inc., a financial services company,
during 1994 and as a consultant for that
company during January 1995. Since 1997, he
has served as Non-Executive Chairman of the
Board of Chitogenics, Inc., a biomaterials
and research and development company. He has
been a partner at Lane McVicker, a property
and casualty insurance company, since 1999
and Non-Executive Chairman since January 1,
2004. Dr. Boni is also currently a member of
the Board of Directors of Controlling
Technologies International, Inc., a metals
technology company. He is the Chairman of
the Company's Compensation Committee of the
Board of Directors. In February 1999, Dr.
Boni was named Lead Director. Dr. Boni is 76
and has served on the Board of Directors
since 1990.
3
Dr. Craig E. Dorman ........Dr. Dorman is Vice President (Research) at
the University of Alaska, Statewide System.
From 1996 through early 2002, Dr. Dorman was
on an Intergovernmental Personnel Act (IPA)
assignment to the Office of Naval Research
(ONR) from Pennsylvania State University,
where he was a Senior Scientist at the
Applied Research Lab. In 1994 through
mid-1995, he served as Deputy Director
Defense Research and Engineering for
Laboratory Management, U.S. Department of
Defense, on an IPA assignment from Woods
Hole Oceanographic Institute (WHOI). He was
Director and Chief Executive Officer of WHOI
from 1989 through 1993. From 1962 to 1989,
Dr. Dorman was an officer in the U.S. Navy,
most recently Rear Admiral and Program
Director for Anti-Submarine Warfare. He is a
member of the Company's Compensation and
Nominating and Corporate Governance
Committees of the Board of Directors. Dr.
Dorman is 63 and has served on the Board of
Directors since 1991.
Brent A. Stienecker ........Mr. Stienecker retired as President of
Crowley Marine Services, a tug and barge and
specialized contract services subsidiary of
Crowley Maritime Corporation on December 31,
1998. He served as President of Crowley
Marine Services from 1992 through 1998. Mr.
Stienecker had been employed by Crowley
Maritime Corporation in various capacities
since 1975. He is the Chairman of the
Company's Audit Committee of the Board of
Directors. Mr. Stienecker is 65 and has
served on the Board of Directors since 1999.
Directors Continuing in Office with Terms Expiring in 2006
Stephen A. Van Dyck........Mr. Van Dyck has been Chairman of the Board
of Directors of the Company and its
predecessor since April 1987. Previously he
was Chief Executive Officer from April 1987
through March 2003. For the year prior to
1987, he was Senior Vice President -- Oil
Services, of Sonat Inc. and Chairman of the
Boards of the Sonat Marine Group, another
predecessor, and Sonat Offshore Drilling
Inc. For more than five years prior to April
1986, Mr. Van Dyck was the President and a
director of the Sonat Marine Group and Vice
President of Sonat Inc. Mr. Van Dyck is a
member of the Board of Directors of Amerigas
Propane, Inc. Mr. Van Dyck is also the
Chairman of the Board and a director of the
West of England Ship Owners Mutual Insurance
Association (Luxembourg), a mutual insurance
association. See "Compensation of Directors
and Executive Officers -- Employment
Agreements." Mr. Van Dyck is 60 and has
served on the Board of Directors since 1986.
William A. Smith............Mr. Smith has been a Managing Director of
Galway Group, L.P., an investment banking
and energy consulting firm, or its
affiliates, since September 2002. From 1999
to 2002, Mr. Smith worked in various
capacities at El Paso Corporation, most
recently Chairman of El Paso Merchant
Energy's Global Gas Group. Previous
positions at El Paso included President of
El Paso Global LNG and Executive Vice
President of Corporate Development. Prior to
Sonat Inc.'s merger with El Paso in 1999,
Mr. Smith held various executive positions
with Sonat, including Executive Vice
President and General Counsel for several
years before the merger. He is a member of
the Company's Audit and Compensation
Committees of the Board of Directors. Mr.
Smith is 59 and has served on the Board of
Directors since 2003.
4
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock by certain stockholders beneficially
owning greater than 5% of the Common Shares as of March 1, 2004:
Shares
Beneficially Percent Voting Power Dispositive Power
Name and Address of Beneficial Owner Owned Of Class Sole Shared Sole Shared
----- -------- ---- ------ ---- ------
Ingalls & Snyder LLC (1).................. 1,320,000 16.19% -- -- -- 1,320,000
61 Broadway
New York, NY 10006
Stephen A. Van Dyck (2)................... 707,659 8.32% 707,659 -- 707,659 --
Maritrans Inc.
Two Harbour Place
302 Knights Run Avenue
Suite 1200
Tampa, FL 33602
Kahn Brothers & Co., Inc. ................ 632,415 7.76% -- -- -- 632,415
555 Madison Avenue
22nd Floor
New York, NY 10022
---------------------
(1)Securities reported under shared dispositive power include securities
owned by clients of Ingalls & Snyder LLC, a registered broker dealer and
a registered investment advisor, in accounts over which employees hold
discretionary investment authority. In addition to the Schedule 13G filed
by Ingalls & Snyder, Robert L. Gibson also filed a Schedule 13G/A which
lists 1,032,400 shares beneficially owned. Robert L. Gibson is a Senior
Director at Ingalls & Snyder. The shares reported in Mr. Gibson's filing
are held in the Ingalls & Snyder accounts referred to above, where Mr.
Gibson holds discretionary investment authority.
(2)Mr. Van Dyck disclaims beneficial ownership of an aggregate 209,966
shares. See "Share Ownership of Management and the Board of Directors".
All the information in the table is presented in reliance on information
disclosed by the named individuals and groups in Schedule 13D or 13Gs or Form 4s
filed with the Securities and Exchange Commission.
The following table sets forth certain information regarding the
beneficial ownership of Common Stock by each director of Maritrans Inc., by each
executive officer named in the Summary Compensation Table under "Compensation of
Directors and Executive Officers -- Executive Compensation," and by all
directors and executive officers of Maritrans Inc. and its subsidiaries, as a
group, as of March 1, 2004.
Share Ownership of Management and the Board of Directors
Shares Beneficially Owned
(1)(2)
-----------------------------
Name Number Percent
---- ------ -------
Stephen A. Van Dyck (3) ................................................ 707,659 8.32%
Dr. Robert E. Boni (4) ................................................. 45,128 *
Dr. Craig E. Dorman (5) ................................................ 35,405 *
Frederick C. Haab ...................................................... 3,289 *
Robert J. Lichtenstein (6) ............................................. 43,522 *
William A. Smith ....................................................... 3,576 *
Brent A. Stienecker (7) ................................................ 22,348 *
Philip J. Doherty (8) .................................................. 44,004 *
Walter T. Bromfield (9) ................................................ 79,950 *
Stephen M. Hackett (10) ................................................ 88,921 1.09%
Janice M. Van Dyck (11) ................................................ 209,966 2.54%
All directors and executive officers as a group (13 persons) ........... 1,289,680 14.66%
---------------------
* less than one percent
5
(1) Unless otherwise indicated, each person has sole voting and
investment power with respect to all Common Stock owned by such
person.
(2) The addresses of the stockholders are Two Harbour Place, 302
Knights Run Avenue, Suite 1200, Tampa, FL 33602.
(3) Mr. Van Dyck's shares do not include the 209,966 shares
beneficially owned by his wife, Janice M. Van Dyck, to which Mr.
Van Dyck disclaims beneficial ownership. Shares of Common Stock
subject to options exercisable within 60 days of March 1, 2004
total 355,561.
(4) Dr. Boni has shared investment power for a portion of the shares
with his wife. Shares of Common Stock subject to options
exercisable within 60 days of March 1, 2004 total 19,477.
(5) Dr. Dorman has shared investment power for a portion of the
shares with his wife. Shares of Common Stock subject to options
exercisable within 60 days of March 1, 2004 total 19,477.
(6) Mr. Lichtenstein has shared investment power for a portion of
the shares with his wife. Shares of Common Stock subject to
options exercisable within 60 days of March 1, 2004 total
19,477.
(7) Shares of Common Stock subject to options exercisable within 60
days of March 1, 2004 total 14,341.
(8) Shares of Common Stock subject to options exercisable within 60
days of March 1, 2004 total 15,026.
(9) Mr. Bromfield has shared investment power for a portion of the
shares with his wife. Shares of Common Stock subject to options
exercisable within 60 days of March 1, 2004 total 38,850.
(10) Shares of Common Stock subject to options exercisable within 60
days of March 1, 2004 total 40,337.
(11) Ms. Van Dyck's shares do not include the 707,659 shares
beneficially owned by her husband, Stephen A. Van Dyck, to which
Ms. Van Dyck disclaims beneficial ownership. Shares of Common
Stock subject to options exercisable within 60 days of March 1,
2004 total 125,001.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes securities over which
voting or investment power is held. Shares of Common Stock subject to options
exercisable within 60 days of March 1, 2004, are deemed outstanding for
computing the percentage of the person or entity holding such securities but are
not outstanding for computing the percentage of any other person or entity.
Shares that carry restrictions as to vesting and shares subject to options
currently exercisable within 60 days of March 1, 2004, are considered
beneficially owned with respect to this table.
6
Equity Compensation Plan Information
------------------------------------ -------------------------------- -------------------------- --------------------------
(c) Number of securities
remaining available for
future issuance under
equity compensation
(a) Number of securities to be (b) Weighted-average plans (excluding
issued upon exercise of exercise price of securities reflected in
Plan Category outstanding option outstanding options column (a))
------------------------------------ -------------------------------- -------------------------- --------------------------
Equity compensation plans
approved by security holders 513,135 $7.27 --
------------------------------------ -------------------------------- -------------------------- --------------------------
Equity compensation plans not
approved by security holders * 414,773 $7.53 138,970
------------------------------------ -------------------------------- -------------------------- --------------------------
Total 927,908 $7.39 138,970
------------------------------------ -------------------------------- -------------------------- --------------------------
* These securities are issuable pursuant to the Maritrans Inc. 1999
Directors and Key Employees Equity Compensation Plan, a description of which is
included in Footnote 5 "Stock Incentive Plans" to our consolidated financial
statements contained in our Annual Report on Form 10-K for the year ended
December 31, 2003.
COMMITTEES OF THE BOARD OF DIRECTORS
There were four Board of Directors meetings and twelve Board of
Directors Committee meetings during 2003. Each director attended 100% of the
combined number of meetings of the Board of Directors and Committees thereof on
which he served.
The Board of Directors has established standing Audit, Compensation,
Finance and Nominating and Corporate Governance Committees. The principal
responsibilities of the Committees are described below. Information regarding
the members of each Committee is included in the director biographies set forth
under "Information Regarding Nominees for Election as Directors and Regarding
Continuing Directors."
The Audit Committee presently consists of three non-employee directors:
Brent A. Stienecker (Chairman), Frederick C. Haab and William A. Smith. The
Audit Committee met six times in 2003 and is required to meet four times
annually. The Company's independent auditors attended all Audit Committee
meetings. The members are appointed annually by the Company's Board of
Directors. The Board of Directors has determined that all members of the Audit
Committee are financially literate and that Brent A. Stienecker possesses the
accounting and financial management expertise as defined by the New York Stock
Exchange listing standards and is the Audit Committee financial expert pursuant
to the applicable Securities and Exchange Commission rules. The Committee has
responsibility for overseeing the Company's financial reporting process on
behalf of the Board of Directors; reviewing the independence of the Company's
independent auditors; recommending to the Board of Directors the independent
auditors to be retained by the Company; reviewing the audited financial results
for the Company; reviewing with the Company's independent auditors the scope and
results of their quarterly reviews and annual audits; reviewing with the
independent auditors and with Company management the Company's accounting and
reporting principles, practices and policies and the adequacy of the Company's
accounting, operating and financial methods and controls. The Audit Committee
has considered the compatibility of non-audit services with the auditor's
independence. The Board of Director's has adopted a written charter for the
Audit Committee, which is attached as Appendix A to this Proxy Statement.
The Compensation Committee presently consists of three non-employee
directors: Dr. Robert E. Boni (Chairman), Dr. Craig E. Dorman and William A.
Smith. The Compensation Committee met five times in 2003 and is required to meet
three times annually. The members are appointed annually by the Company's Board
of Directors. The primary duties of the Compensation Committee are annually
reviewing and recommending to the Board of Directors, for final approval, the
total compensation package for all executive officers of the Company (executive
7
officers are defined as the CEO, CFO, Business Leaders and others designated as
"Executives" under the Company's incentive compensation plans); annually
reviewing and approving the general compensation policy and practice for all
other employees of the Company and its subsidiaries; administering the Equity
Compensation Plan and the 1999 Directors and Key Employees Equity Compensation
Plan; reviewing and monitoring the Company's investment policy and practices
with respect to the assets of the Retirement Plan and the Profit Sharing and
Savings Plan; determining the contribution to the profit sharing portion of the
Profit Sharing and Savings Plan; considering and recommending to the Board of
Directors, when appropriate, amendments or modifications to existing
compensation and employee benefit programs and the adoption of new plans;
evaluating the performance of the Company's Chief Executive Officer against
pre-established criteria; reviewing with the Company's Chief Executive Officer
the performance of the executive officers who report to him and in conjunction
with the Chief Executive Officer, establishing and monitoring the succession
plan for executive management; determining the compensation paid to the Board of
Directors. In February 2004, the duty of determining the compensation paid to
the Board of Directors was moved to the Nominating and Corporate Governance
Committee.
The Finance Committee did not meet in 2003. At its last meeting in 1999,
the Finance Committee recommended and the Board subsequently adopted a
redistribution of the Finance Committee's responsibilities and the suspension of
the Committee to avoid redundancies and to streamline the Board processes. The
Board implemented the recommendations and now, as a full Board, periodically
reviews investment policies and practices and the amounts and nature of
financings available to the Company and subsidiaries; monitors the status of
existing financings; and considers and implements the dividend policy of the
Company. The Board assigned the responsibility of reviewing and monitoring the
Company's investment policy and practices with respect to the assets of the
Retirement Plan and the Profit Sharing and Savings Plan to the Compensation
Committee of the Board.
The Nominating and Corporate Governance Committee presently consists of
three non-employee directors: Robert J. Lichtenstein (Chairman), Dr. Craig E.
Dorman and Frederick C. Haab. The Nominating and Corporate Governance Committee
met twice in 2003 and, beginning in 2004, is required to meet three times
annually. The chairman of the Committee must be a non-employee director, as must
be a majority of its members. The members are appointed annually by the
Company's Board of Directors. The primary duties and responsibilities of the
Nominating and Corporate Governance Committee include annually determining and
recommending to the Board the slate of nominees to be members of the Board that
will be submitted to, and voted upon by, the stockholders; determining and
recommending to the Board any individual who is to be elected by the Board as a
member to fill a vacancy; annually determining and recommending to the Board
those directors who are to serve as members of the various Committees of the
Board and recommending the chairman of each of the Committees; periodically
considering the size of the Board and, when appropriate, recommending changes to
the Board; periodically evaluating the standing Committees of the Board; leading
the Board and Committee self-evaluation process and, when appropriate,
recommending deletion or creation of additional Committees; and developing and
implementing policies and procedures related to corporate governance, including
reviewing and monitoring implementation of the Company's Corporate Governance
Guidelines. In February 2004, the duty of determining the compensation paid to
the Board of Directors was moved to the Nominating and Corporate Governance
Committee.
CORPORATE GOVERNANCE
Director Independence
The Board of Directors has relied upon the New York Stock Exchange
definition of "independence" in determining the independence of the members of
the Board. The New York Stock Exchange independence tests state (a) no director
qualifies as independent unless the Board of Directors affirmatively determines
that the director has no material relationship with the Company that could
interfere with the person's ability to exercise independent judgment; (b) a
director who is an employee, or whose immediate family member is an executive
officer, of the Company is not independent until three years after the end of
the employment relationship; (c) a director who receives, or whose immediate
family member receives, more than $100,000 per year in direct compensation from
the Company, other than directors and committee fees and pension or other forms
of deferred compensation for prior service, is not independent until three years
after he or she ceases to receive more than $100,000 per year in such
compensation; (d) a director who is affiliated with or employed by, or whose
immediate family member is affiliated with or employed in a professional
capacity by, a present or former internal or external auditor of the Company is
8
not independent until three years after the end of the affiliation or the
employment or auditing relationship; (e) a director who is employed, or whose
immediate family member is employed, as an executive officer of another company
where any of the Company's present executives serve on that company's
compensation committee is not independent until three years after the end of
such service or employment relationship; and (f) a director who is an executive
officer or an employee, or whose immediate family member is an executive
officer, of a company that makes payments to, or receives payments from, the
Company for property or services in an amount which, in any single fiscal year,
exceeds the greater of $1 million, or 2% of such other company's consolidated
gross revenues, is not independent until three years after falling below such
threshold.
The Board of Directors, in applying the above referenced independence
tests, has affirmatively determined that the Company's current independent
directors are Dr. Robert E. Boni, Dr. Craig E. Dorman, Frederick C. Haab, Robert
J. Lichtenstein, William A. Smith and Brent A. Stienecker. As part of the
Board's process of making the independence determination, each director provided
written assurances that all of the above criteria have been satisfied and he has
no other material relationship with the Company that could interfere with his
ability to exercise independent judgment. A majority of the Company's Board of
Directors have been determined to meet the New York Stock Exchange's standards
for independence.
The Company's independent directors held four formal meetings
independent from management during 2003. Dr. Robert E. Boni acted as Chairman at
the meeting of the independent directors.
Audit Committee
o The Board of Directors has determined that each member of the Audit
Committee is independent in accordance with applicable New York
Stock Exchange and Securities and Exchange Commission guidelines.
See discussion in "Director Independence" above.
o The Board of Directors has determined that all members of the Audit
Committee are financially literate and that Brent A. Stienecker
possesses the accounting and financial management expertise as
defined by the New York Stock Exchange listing standards and is the
Audit Committee financial expert pursuant to the applicable
Securities and Exchange Commission rules.
o The Board of Directors has adopted a formal charter under which the
Audit Committee operates. The charter governs the duties,
responsibilities and conduct of the Audit Committee. The Audit
Committee charter is attached as Appendix A to this Proxy
Statement. Copies of the charter can be accessed on the Company's
website, www.maritrans.com or by contacting the Company at the
address listed on the first page of this Proxy Statement
(Attention: Investor Relations) or by calling (813) 209-0600 ext.
520.
o The Company's independent auditors, Ernst & Young LLP, report
directly to the Audit Committee.
o The Audit Committee meets with management and Ernst & Young LLP
prior to the filing of all officers' certifications with the
Securities and Exchange Commission.
o The Audit Committee has adopted a confidential and anonymous
reporting hotline for employees to contact the Committee with any
concerns regarding questionable accounting or auditing practices.
Nominating and Corporate Governance Committee
o The Board of Directors has determined that each member of the
Nominating and Corporate Governance Committee is independent in
accordance with applicable New York Stock Exchange and Securities
and Exchange Commission guidelines. See discussion in "Director
Independence" above.
o The Board of Directors has adopted a formal charter under which the
Nominating and Corporate Governance Committee operates. The charter
governs the duties, responsibilities and conduct of the Nominating
and Corporate Governance Committee. Copies of the charter can be
accessed on the Company's website, www.maritrans.com or by
contacting the Company at the address listed on the first page of
this Proxy Statement (Attention: Investor Relations) or by calling
(813) 209-0600 ext.520.
9
o The Nominating and Corporate Governance Committee considers
candidates to be recommended to the stockholders for membership on
the Board of Directors as suggested by the existing Board members
(including members of the Committee) as well as by management or
stockholders. A stockholder who wishes to recommend a prospective
nominee for consideration by the Committee must follow the
procedures described in the section entitled "Requirements for
Advance Notification of Nominees" in this Proxy Statement. Upon
identifying a prospective nominee, the Nominating and Corporate
Governance Committee makes an initial determination as to whether
to conduct a full evaluation of the candidate based on the
information provided to the Committee along with the Committee's
knowledge of the prospective candidate. The preliminary
determination is based on the size, function and needs of the
Board. Once the Committee determines that they will proceed will a
full evaluation, the Committee assesses the candidate's
qualifications in light of the Company's Corporate Governance
Guidelines, including each candidate's competency in the following
areas: (i) industry knowledge; (ii) accounting and finance; (iii)
business judgment; (iv) management; (v) leadership; (vi) business
strategy; (vii) crisis management; (viii) corporate governance; and
(ix) risk management. The Committee also considers any other
relevant factors as it deems appropriate. In conjunction with the
evaluation, the Committee determines whether it will conduct an
interview with the candidate. If an interview is warranted, either
one member of the Committee, the full Committee or the Committee as
well as other Board members conduct the interview. Once the
evaluation and interview is complete and the Committee has
determined that they would like to recommend the candidate, the
candidate is recommended to the full Board. The Board will
determine the nominees after considering the recommendations of the
Committee. The Company does not make any distinction between
internally recommended candidates and candidates recommended by
stockholders.
Compensation Committee
o The Board of Directors has determined that each member of the
Compensation Committee is independent in accordance with the New
York Stock Exchange and Securities and Exchange Commission
guidelines. See discussion in "Director Independence" above.
o The Board of Directors has adopted a formal charter under which the
Compensation Committee operates. The charter governs the duties,
responsibilities and conduct of the Compensation Committee. Copies
of the charter can be accessed on the Company's website,
www.maritrans.com or by contacting the Company at the address
listed on the first page of this Proxy Statement (Attention:
Investor Relations) or by calling (813) 209-0600 ext.520.
Corporate Governance Guidelines
o The Board of Directors has adopted formal guidelines under which
the Board of Directors operates. The guidelines govern the duties,
responsibilities and conduct of the Board of Directors. Copies of
the guidelines can be accessed on the Company's website,
www.maritrans.com or by contacting the Company at the address
listed on the first page of this Proxy Statement (Attention:
Investor Relations) or by calling (813) 209-0600 ext. 520.
Business Ethics Policy
o The Board of Directors has adopted a Business Ethics Policy. The
Policy includes provisions including, but not limited to, conflicts
of interest, corporate opportunities, confidentiality, fair
dealing, protection and proper use of Company assets, compliance
with laws, rules and regulations and encouraging the reporting of
any illegal or unethical behavior. The Policy also includes Special
Ethics Guidelines for Employees with Financial Reporting
Responsibilities. Copies of the Policy can be accessed on the
Company's website, www.maritrans.com or by contacting the Company
at the address listed on the first page of this Proxy Statement
(Attention: Investor Relations) or by calling (813) 209-0600 ext.
520.
10
Loans to Executive Officers and Directors
It is the Company's policy to comply with and operate in a manner
consistent with legislation in existence prohibiting the granting of personal
loans to executive officers and directors.
Attendance at Annual Meeting of Stockholders
It is the Board of Director's policy to expect that all directors will
attend the annual meeting of stockholders, except where failure to attend
resulted from unavoidable circumstances discussed in advance with the Chairman
of the Board. All members of the Board of Directors attended the 2003 Annual
Meeting of Stockholders.
Communication with the Board of Directors
A stockholder who wishes to communicate with the Board of Directors may
do so by sending an e-mail to BOD@maritrans.com or by sending a written request
addressed to the Directors in care of Judith M. Cortina, Controller, at the
address appearing on the front page of this Proxy Statement. Communications will
be relayed to the intended Board recipient except in instances where it is
deemed unnecessary or inappropriate to do so pursuant to the procedures
established by the Nominating and Corporate Governance Committee. Any
communications withheld will nonetheless be recorded and available for any
director who wishes to review it.
EXECUTIVE OFFICERS OF THE COMPANY
See "Information Regarding Nominees For Election As Directors And
Regarding Continuing Directors" for information concerning Mr. Van Dyck,
Chairman of the Board, an employee-director of the Company.
Mr. Doherty is Chief Executive Officer of the Company and President of
Maritrans General Partner Inc., a wholly owned subsidiary of the Company. Mr.
Doherty was appointed to Chief Executive Officer in 2003 and has been
continuously employed by Maritrans since 1997. Previously, Mr. Doherty was
Director of Business Development for Computer Command and Control Company where
he had been employed since April 1995.
Mr. Bromfield is Vice President, Secretary and Chief Financial Officer
of the Company. Previously, Mr. Bromfield served as Treasurer and Controller of
the Company and has been continuously employed in various capacities by
Maritrans or its predecessors since 1981.
Mr. Hackett is Executive Vice President, Maritrans Operating Company
L.P., a wholly owned subsidiary of the Company, and has been continuously
employed in various capacities by Maritrans or its predecessors since 1980.
Mr. Sparks is Executive Vice President of Maritrans Operating Company
L.P., a wholly owned subsidiary of the Company. Mr. Sparks was appointed
Executive Vice President in July 2003. Prior to July 2003, he held various
positions in operations and engineering management with the Company and began
employment with the Company in 2000. Prior to joining the Company, Mr. Sparks
was employed by Hvide Marine Inc. since 1991.
Ms. Fortune is President, Maritrans Business Services Co., Inc. a wholly
owned subsidiary of the Company and began employment with the Company in 2003.
Previously Ms. Fortune was a senior executive at the Don CeSar Hotel, a Loews
Hotels, where she had been employed since 2000. Prior to that, Ms. Fortune had
served as the Vice President of Human Resources at Fairmont Hotels Management
Co., where she had been employed since 1995.
Ms. Van Dyck is the former Secretary of the Company. As of February
2004, Ms. Van Dyck no longer serves as Secretary of the Company. Previously, Ms.
Van Dyck served as Senior Vice President of the Company and has been
continuously employed by the Company or its predecessors in various capacities
since 1982.
11
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Directors' Compensation
During 2003 pursuant to its compensation policy for independent
directors, each independent director was paid an annual retainer fee of $18,000,
of which one-half was paid in Company Common Stock, resulting in the issuance of
618 shares to each independent director, with the exception of William A. Smith
who joined the Board during the year and received 291 shares. Each independent
director also received a retainer of $1,000 for each Board of Directors
Committee on which he served. The Company also paid independent directors $1,000
for each Board of Directors meeting attended and $500 for each Board of
Directors Committee meeting attended, plus expenses. The aggregate amount of
directors' fees paid in 2003 was $125,000.
In February 2004, the Compensation Committee of the Board of Directors
approved a new compensation policy for the Board of Directors. Each independent
director will be paid an annual retainer fee of $30,000, of which one-half is
paid in cash and one-half is paid in Company Common Stock if a minimum stock
ownership requirement of $150,000 is not then satisfied. If the independent
director owns stock in excess of $150,000, then the total retainer will be paid
in cash. The chairman of each committee receives an annual retainer fee of
$5,000. Each audit committee member receives an additional annual amount of
$2,500. The lead director receives an additional annual fee of $5,000. Directors
no longer receive amounts for attending meetings. In addition, the Directors
receive an annual stock grant with a present value equal to $20,000.
Executive Compensation
The following Summary Compensation Table sets forth the cash
compensation and certain other components of the compensation received by the
Chief Executive Officer and the other four most highly compensated executive
officers of Maritrans Inc. or its subsidiaries during the three years ended
December 31, 2003, 2002 and 2001.
Summary Compensation Table
Annual Compensation Long-Term Compensation
---------------------- --------------------------------
Awards Payouts
Restricted Securities
Stock Underlying LTIP All Other
Salary Bonus Awards Options Payouts Compensation
Name and Principal Position Year ($) ($) ($)(1) (#) ($) ($)(2)
--------------------------- ---- ----------- ------- --------- -------- ------- -------------
Stephen A. Van Dyck (A) 2003 440,000 -- 221,028 18,367 -- 140,547
Chairman of the Board 2002 440,000 -- 299,669 26,816 332,867 80,042
2001 446,225 -- 281,943 32,642 -- 73,942
Philip J. Doherty (A) 2003 241,154 -- 97,876 8,134 -- 50,470
Chief Executive Officer 2002 190,040 -- 130,507 11,679 26,107 43,427
and President of Maritrans General 2001 143,673 -- 34,798 4,029 -- 42,989
Partner Inc.
Stephen M. Hackett 2003 180,000 -- 41,762 3,470 -- 30,254
Executive Vice President, Maritrans 2002 180,000 -- 69,605 6,229 115,307 33,558
Operating Company L.P. 2001 180,000 -- 34,798 4,029 -- 25,164
Walter T. Bromfield 2003 180,000 -- 43,118 3,583 -- 20,643
Vice President, Secretary and Chief 2002 179,923 -- 44,014 3,938 39,161 16,387
Financial Officer 2001 160,000 -- 34,834 4,032 -- 11,174
Janice M. Van Dyck (B) 2003 315,900 -- -- -- -- 19,930
Former Secretary 2002 166,223 -- 121,485 10,872 138,151 14,817
2001 245,000 -- 113,404 13,130 -- 14,406
12
---------------------
(A) Effective April 1, 2003, Mr. Doherty began serving as Chief Executive
Officer of the Company. Mr. Van Dyck has continued to be employed by the
Company as Chairman of the Board of Directors of Maritrans Inc.
(B) From January 2002 to February 2004, Ms. Van Dyck served as Secretary of
the Company. Prior to January 2002, Ms. Van Dyck served as Senior Vice
President of the Company. In 2003, Ms. Van Dyck was compensated for the
number of days worked, and worked more days than anticipated to perform
strategic and organizational development consulting and tasks related to
business services prior to the hiring of a president of Maritrans
Business Services Co., Inc. As of May 2004, Ms. Van Dyck will no longer
be an employee of the Company but will provide consulting services to the
Company as needed.
(1) The shares granted carry restrictions, which lapse on the third
anniversary of the grant date. At December 31, 2003, the aggregate number
of restricted shares held by each executive officer and the value of such
shares were as follows:
AGGREGATE RESTRICTED STOCK HOLDINGS
# of shares $ value
----------- -------
Stephen A. Van Dyck .............. 75,956 1,269,225
Philip J. Doherty ................ 23,268 388,808
Stephen M. Hackett ............... 13,398 223,881
Walter T. Bromfield .............. 11,277 188,439
Janice M. Van Dyck ............... 23,424 391,415
(2) Amounts shown in this column represent, as applicable, moving expenses
and relocation benefits, Company contributions under the Maritrans Inc.
Profit Sharing and Savings Plan, accruals under the Excess Benefit Plan,
insurance premiums paid pursuant to such officers' employment agreement,
country club dues, loan forgiveness and automobile allowances. See
"Certain Transactions."
Option Grants in 2003
The following table sets forth certain information concerning options
granted during 2003 to the named executive officers:
Potential Realizable Value at
Number of % of Total Assumed Annual Rates of
Securities Options Stock Price Appreciation for
Underlying Granted to Exercise Option Term (1)
Options Employees Price Expiration -----------------------
Name Granted in 2003 ($/Share) Date 5% 10%
---- ------- ------- --------- ------- -- ---
Stephen A. Van Dyck ....................... 18,367 41.74% 12.33 2/11/13 142,423 360,927
Philip J. Doherty ......................... 8,134 18.49% 12.33 2/11/13 63,073 159,840
Stephen M. Hackett ........................ 3,470 7.89% 12.33 2/11/13 26,907 68,188
Walter T. Bromfield ....................... 3,583 8.14% 12.33 2/11/13 27,784 70,409
Janice M. Van Dyck ........................ -- -- -- -- -- --
---------------------
(1) The dollar amounts under these columns are the result of calculations at
5% and 10% rates set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation of
the price of the Common Stock. The Company did not use an alternative
formula for a grant valuation, an approach that would state gains at
present, and therefore lower, value.
13
Aggregated Option Exercises in 2003 and 2003 Year-end Options Values
The following table summarizes options exercised during 2003 and presents the
value of unexercised options held by the named executive officers at year-end:
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-the-Money Options
Shares at 12/31/03 at 12/31/03
Acquired Value Exercisable (E) Exercisable (E)
Name on Exercise Realized Unexercisable (U) Unexercisable (U)
---- ----------- -------- ----------------- -----------------
Stephen A. Van Dyck ................... 37,217 $261,636 349,136 (E) $3,642,994 (E)
73,369 (U) $ 461,352 (U)
Philip J. Doherty ..................... -- -- 14,413 (E) $ 146,662 (E)
23,112 (U) $ 124,739 (U)
Stephen M. Hackett..................... -- -- 38,957 (E) $ 388,489 (E)
13,765 (U) $ 83,855 (U)
Walter T. Bromfield.................... -- -- 38,083 (E) $ 390,270 (E)
10,976 (U) $ 65,753 (U)
Janice M. Van Dyck .................... 1,985 $13,955 122,394 (E) $1,266,368 (E)
22,232 (U) $ 153,905 (U)
Retirement Plan
The following table sets forth the estimated annual benefits payable upon
retirement under the Maritrans Inc. Retirement Plan and Excess Benefit Plan.
PENSION PLAN TABLE
Years of Credited Service
Annual
Compensation 15 20 25 30
---------------- -------- -------- -------- --------
$100,000 $ 24,000 $ 32,000 $ 40,000 $ 48,000
125,000 30,000 40,000 50,000 60,000
150,000 36,000 48,000 60,000 72,000
175,000 42,000 56,000 70,000 84,000
200,000 48,000 64,000 80,000 96,000
225,000 54,000 72,000 90,000 108,000
250,000 60,000 80,000 100,000 120,000
275,000 66,000 88,000 110,000 132,000
300,000 72,000 96,000 120,000 144,000
325,000 78,000 104,000 130,000 156,000
350,000 84,000 112,000 140,000 168,000
375,000 90,000 120,000 150,000 180,000
400,000 96,000 128,000 160,000 192,000
425,000 102,000 136,000 170,000 204,000
450,000 108,000 144,000 180,000 216,000
475,000 114,000 152,000 190,000 228,000
500,000 120,000 160,000 200,000 240,000
14
The following table sets forth the years of credited service through December
31, 2003, for the Chief Executive Officer and the other four most highly
compensated executive officers of Maritrans Inc. or its subsidiaries.
YEARS OF CREDITED SERVICE
Years of
Recipient Credited Service
--------- ----------------
Stephen A. Van Dyck 29.5
Philip J. Doherty 7.0
Stephen M. Hackett 23.5
Walter T. Bromfield 21.0
Janice M. Van Dyck 20.5
Each eligible employee who has completed 1,000 hours of service in an
eligibility computation period becomes a participant in the Maritrans Inc.
Retirement Plan. The Retirement Plan is a noncontributory defined benefit
pension plan under which the contributions are actuarially determined each year.
Retirement benefits are calculated, for those employees who commenced
participation on or after August 14, 1984, as 48% of the average basic monthly
compensation reduced by 1/30th for each year of service at retirement which is
under 30 years of service, or for those employees who commenced participation
before August 14, 1984, the greater of (i) the foregoing benefit or (ii) 38.5%
of average basic monthly compensation reduced by 1/15th for each year of service
at retirement which is under 15 years of service. Average basic monthly
compensation is determined by averaging compensation for the five consecutive
plan years that will produce the highest amount.
Benefits are paid in the form of a joint and survivor annuity for married
participants and in the form of a ten-year certain single life annuity for
unmarried participants, unless an actuarially equivalent payment option is
selected. The preceding "Pension Plan Table" shows estimated annual retirement
benefits, payable in the form of a ten-year certain single life annuity, at the
normal retirement age of 65 for specified compensation and years of credited
service classifications.
The Internal Revenue Code limits annual benefits that may be paid under tax
qualified plans. Benefits under the Retirement Plan which exceed such
limitations are payable under the Excess Benefit Plan. The Excess Benefit Plan
pays a monthly benefit to the participant equal to the amount by which monthly
benefits under the Retirement Plan would exceed the Internal Revenue Code
limitations.
Annual compensation taken into account under the foregoing plans in 2003 for
the officers listed in the Summary Compensation Table was $440,000 for Mr. Van
Dyck, $241,154 for Mr. Doherty, $180,000 for Mr. Hackett, $180,000 for Mr.
Bromfield, and $315,900 for Ms. Van Dyck. Pension amounts are not subject to
reduction for Social Security benefits.
Employment Agreements
On October 5, 1993, the Company entered into an Employment Agreement with Mr.
Van Dyck. On April 1, 2003, the contract was amended; the resulting changes are
included in the discussion below. The terms of the Employment Agreement continue
until written notice of termination is given by one of the parties. The contract
provides for a base salary that is set by the Company's Board of Directors and
adjusted pursuant to its normal review policies. The Employment Agreement also
provides for participation in the Company's cash long-term incentive plan and
other benefits in accordance with the Company's current policies for senior
executive officers. In addition, the Employment Agreement provides for a Special
Retirement Benefit equal to a total of $300,000 annually under the Company's
qualified Retirement Plan and the Excess Benefit Plan. Mr. Van Dyck is eligible
for this benefit at age 63, provided he remains an employee until age 63, unless
terminated without cause or by reason of disability. A lump sum severance
payment equal to 12 months of then base salary plus target incentive
compensation would be payable if Mr. Van Dyck is terminated without cause. In
the event Mr. Van Dyck is terminated for cause, only such compensation as has
already been accrued will be paid. In the event of his termination of employment
upon a change of control, the agreement provides for a lump sum payment equal to
12 months of the employee's base compensation (base salary averaged over the
prior three years) and a lump sum payment equal to target incentive
compensation. In addition, the agreement provides that 24 months base salary (or
base compensation, if following a change of control) plus incentive compensation
would be payable in exchange for an agreement not to compete. Termination of
employment upon a change of control is broadly defined to include involuntary
termination as well as constructive termination. Mr. Van Dyck's Employment
Agreement provides for payments prescribed under the death benefit plan for its
senior executive officers as well as a pro rata portion of the incentive
15
compensation, as well as a $2.0 million insured death benefit. The Employment
Agreement for Mr. Van Dyck also provides for 24 months of base salary plus
incentive compensation in the event of disability, which amounts are reduced by
any amounts paid under the Company's Long-Term Disability Plan. In return, Mr.
Van Dyck promises to hold in confidence confidential information about the
Company and its business and not to compete with the Company (or solicit its
employees) for two years following termination through any connection with a
customer or competitor of the Company in a defined geographical area in which
the Company does business.
Severance and Non-Competition Agreements
The Company entered into an Employment, Severance and Non-Competition
Agreement with Janice M. Van Dyck. The Company also entered into Severance and
Non-Competition Agreements with Philip J. Doherty, Walter T. Bromfield, Stephen
M. Hackett, Douglas R. Sparks and Rosalee R. Fortune. The terms of all of the
agreements are for two years and are automatically renewed for successive
one-year periods unless the Company gives written notice of termination.
Ms. Van Dyck's agreement provides for payment equal to the preceding twelve
months salary if she is terminated without cause and payment equal to the
preceding twelve months salary in exchange for her agreement not to compete for
a 12 month period. In the event of a termination immediately preceding or
following a change of control of the Company, her agreement provides for a
payment equal to 1.99 times the preceding twelve months salary plus an
additional 12 months of the preceding twelve months salary in exchange for her
agreement not to compete for 12 months.
Mr. Doherty's and Mr. Bromfield's agreements provide for the payment of 12
months of base compensation if either of them is terminated without cause and an
additional 12 months of base compensation in exchange for the agreement not to
compete for 12 months. In the event of a termination immediately preceding or
following a change of control of the Company, the agreement provides for a lump
sum payment equal to base compensation and an additional single sum payment
equal to 12 months of base compensation in exchange for the agreement not to
compete for 12 months.
Mr. Hackett's agreement provides for the payment of 12 months of base salary
if he is terminated without cause and an additional 12 months of base salary in
exchange for his agreement not to compete for 12 months. In the event of a
termination immediately preceding or following a change of control of the
Company, his agreement provides for a lump sum payment equal to 1.99 times the
base compensation and an additional 12 months of base compensation in exchange
for his agreement not to compete for 12 months.
Mr. Sparks' and Ms. Fortune's agreements provide for the payment of 12 months
of base salary if either of them is terminated without cause and in exchange for
the agreement not to compete for 12 months. In the event of a change of control
of the Company, Mr. Sparks and Ms. Fortune receive a single sum cash payment
equal to 12 months of base salary offset by any payments made under the
termination provision.
If any individual covered under the above agreements is terminated for cause,
only such compensation as has already been accrued will be paid. In return for
the compensation outlined above, each individual promises to hold in confidence
confidential information about the Company and its business and not to compete
with the Company for a year following termination through any connection with a
customer or competitor of the Company in a defined geographical area in which
the Company does business.
16
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for
the financial statements and the reporting process including the systems of
internal controls. In fulfilling its oversight responsibilities, the Committee
reviewed the audited financial statements included in the Annual Report with
management including a discussion of the quality, not just acceptability, of
accounting principles, the reasonableness of significant judgments, and the
clarity of disclosure in the financial statements.
The Committee reviewed with the independent auditors, who are responsible for
expressing an opinion on the conformity of the audited financial statements with
generally accepted accounting principles, their judgment as to the quality, not
just the acceptability, of the Company's accounting principles and such other
matters as are required to be discussed with the Committee under generally
accepted auditing standards in accordance with Statement of Auditing Standards
No. 61. In addition, the Committee has discussed with the independent auditors
the auditors' independence from management and the Company including the matters
in the written disclosures required by the Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees).
The Committee discussed with the Company's independent auditors the overall
scope and plans for their respective audits. The Committee met with the
independent auditors to discuss the results of their examinations, their
evaluations of the Company's internal controls and the overall quality of the
Company's financial reporting.
Based on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors, and the Board has approved, that the
audited financial statements be included in the Annual Report on Form 10-K for
the year ended December 31, 2003 for filing with the Securities and Exchange
Commission. The Committee and the Board have also approved the selection of the
Company's independent auditors.
Respectfully Submitted,
Audit Committee of the Maritrans Inc. Board of Directors
Brent A. Stienecker, Chairman
Frederick C. Haab
William A. Smith
INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, were the Company's auditors for the
year ended December 31, 2003. The Audit Committee has reappointed Ernst & Young
LLP to be the Company's auditors in 2004. Ernst & Young LLP has advised the
Company that neither the firm, nor any member of the firm has any relationship
or interest in the Company that would cause Ernst & Young LLP to not be deemed
independent.
Fees for the 2003 and 2002 audits were as follows:
2003 2002
-------- --------
Audit fees $263,500 $202,000
Audit related fees 20,000 18,000
Tax fees 103,000 96,000
All other fees 1,500 3,000
-------- --------
Total $388,000 $319,000
======== ========
In the above table, "audit fees" are fees paid to Ernst & Young LLP for
professional services for the audit of Maritrans Inc.'s consolidated financial
statements included in Form 10-K and review of financial statements included in
Form 10-Qs, and for services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements; "audit-related
fees" are fees for the performance of the audits of the Maritrans Inc.
Retirement Plan and Profit Sharing and Savings Plan financial statements; "tax
fees" are fees for tax compliance, tax advice and tax planning; and "all other
fees" are fees for any services not included in the first three categories and
consist of accounting research performed by Ernst & Young LLP and access to
Ernst & Young LLP's research website.
17
The Audit Committee reviews and approves the annual audit fee directly with
Ernst & Young LLP. The Audit Committee has established a pre-approval process
for all services to be provided to the Company by the independent auditors. The
Committee sets specific limits on the amount of services provided by Ernst &
Young LLP the data on which the Company would obtain from Ernst & Young LLP. The
Committee has required management to report the specific engagements to the
Committee on a quarterly basis and to obtain specific pre-approval from the
Committee. Pre-approval may be performed by the full Audit Committee or may be
delegated to the Chairman of the Audit Committee with prompt notice given to the
other members of the Committee. All fees incurred for 2003 services were
approved by the Audit Committee.
Representatives of Ernst & Young LLP are expected to be present at the
Meeting and shall have the opportunity to make a statement and to respond to
appropriate questions.
18
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Compensation Committee Interlocks and Insider Participation
During fiscal 2003, the members of the Compensation Committee of Maritrans
Inc.'s Board of Directors (the "Committee") were responsible for approving all
forms of executive compensation. Dr. Robert E. Boni, Dr. Craig E. Dorman and
Frederick C. Haab comprised the Committee until May 2003, when the Board's
Committees were realigned. William A. Smith, a new director in April 2003,
replaced Mr. Haab. None of the Committee members received compensation as an
executive officer of the Company during fiscal 2003, and the Board has
determined that each member is independent in accordance with the applicable New
York Stock Exchange and Securities and Exchange Commission guidelines.
Report of the Compensation Committee on Executive Compensation
I. Compensation Philosophy and Strategy
Maritrans strives to increase its earnings and to enhance stockholder value
by assuring an appropriate return on its assets and equity. Three elements of
the business strategy critical to achieving growth in earnings are minimizing
the financial risks and costs associated with a traditional marine
transportation business, operating safely and positioning the Company as a
long-term Jones Act carrier.
The business environment in the core business continues to be intensely
competitive and subject to many rigid environmental laws and operating
regulations. The Company believes that to be successful under these conditions
requires great ingenuity, continuous learning and personal dedication in its key
employees. Therefore, it is critical that the Company's total compensation
program attracts and retains the highest caliber of people necessary to generate
success for the Company and its stockholders.
Maritrans' philosophy for its executive compensation programs has been to
reward the most relevant factors that drive the return to stockholders. The
Board has identified the most important factor to be the achievement of
long-term stockholder value.
The Committee and management recognize the need to continuously review the
Company's executive compensation program to ensure that it:
o is effective in driving performance to achieve long-term strategic
goals;
o results in increased stockholder value;
o is cost effective;
o balances stockholder interests with employee rewards;
o is well communicated and understood by program participants; and
o is competitive with other similar industry organizations.
A review of the Company's executive job documentation was performed by
external consultants in 2003. The focus of this study was to ensure that jobs
had been properly documented and appropriately evaluated.
19
II. Program Description
A. Total Compensation Approach
Maritrans' compensation strategy is to place between one-quarter and
one-half of an executive officer's total compensation at risk in the form of
long-term incentives. Under this strategy, executive officers can achieve total
compensation levels significantly above the average peer comparison levels when
long-term performance significantly exceeds established goals and stockholders
are rewarded through stock price growth and dividends. Likewise, total executive
officer compensation could fall substantially below average levels when targeted
levels of stockholder return are not achieved. Base salaries are set to reflect
the performance and experience of the incumbent, and are compared to the
seventy-fifth percentile of published survey data. The total compensation
opportunity is set not to exceed the seventy-fifth percentile, and the actual
award is based on the attainment of personal goals and goals for Company
financial performance. In 2003, the Committee maintained its goal of delivering
maximum total compensation (base salary plus long-term incentives) at a level
not to exceed the seventy-fifth percentile.
B. Base Salaries
Executive officers base salaries are determined according to job
responsibilities, strategic contribution level, market compensation data, and
performance and experience criteria. In 2003, Mr. Doherty received a base salary
increase to accompany his appointment to Chief Executive Officer. Ms. Van Dyck
received a base daily rate increase. No other executive officer named in the
"Summary Compensation Table" received a base salary increase in 2003. Mr. Van
Dyck's and Mr. Doherty's compensation information is available in the "Summary
Compensation Table" and is discussed in Section III, "Chairman and the Chief
Executive Officer Compensation."
C. Long-Term Incentives
Compensation from the Company's incentive plans is based on increasing
stockholder value through stock price growth and improving the long-term results
of the Company.
The Committee believes that stock ownership by executive officers is
important as it aligns a portion of each executive officer's compensation with
the economic interest of the stockholders of the Company. To stress the
importance of linking executive officer and stockholder interests, the Committee
adopted stock ownership requirements for executive officers in 2004. The Stock
Ownership Requirements ("SOR") are as follows: Chairman of the Board - 5 times
base salary; Chief Executive Officer - 3 times base salary; Chief Financial
Officer - 2 times base salary; and Business Leaders - 2 times base salary. Until
the executive officer meets the ownership requirement for their respective
level, 100% of all restricted stock and stock acquired through stock option
exercises must be retained. Executive officers may reach their respective level
over a multiple year period. The executive officer stock ownership consists of
shares the executive officer purchased directly, shares received under the
Company's equity compensation plan and shares obtained through the exercise of
stock options (net of shares surrendered to pay the exercise price and/or tax
withholding). Once the executive officer has met their SOR as an active
employee, they must maintain stock ownership at this level but may sell shares
in excess of the ownership requirement in accordance with the Company's insider
trading policy.
The Committee believes that stock option grants provide opportunities for
capital accumulation, promote long-term retention and foster an executive
officer's proprietary interest in the Company. Accordingly, all eligible named
executive officers received stock option grants in 2003. Under the stock option
plans, options are issued at a price equal to the fair market value of a share
on the date of grant, vest in two years, and expire after ten years. The grant
of stock options is discretionary, based on the performance of the executive
officer in the prior year. For the current option position of each executive
officer, refer to the table, "Aggregated Option Exercises in 2003 and 2003
Year-End Options Values". Because the Company and the Committee believe that
stock options are a valuable incentive, stock options have, from time to time,
been extended to other individuals employed by the Company.
20
The Committee also believes that actual and immediate stock ownership is
another integral part of promoting the stockholder economic interest and tying
executive compensation directly to the success of the Company. Accordingly, all
eligible named executive officers also received restricted stock grants in 2003.
The shares were issued at a price equal to the fair market value of a share on
the date the stock was granted. Restrictions on these shares lapse on the
three-year anniversary of the grant. The grant of restricted stock is
discretionary, based on the performance of the executive officer in the prior
year. Because the Company and the Committee believe that restricted stock is a
valuable incentive, restricted stock has, from time to time, also been awarded
to other individuals employed by the Company. All named executives, except for
Ms. Van Dyck, are eligible to participate in the stock award program. Effective
2004, Mr. Van Dyck will not participate in the stock award program.
A long-term incentive cash plan was introduced in 2000, and the maximum
stock-based incentive opportunity was reduced for executive officers. The
three-year plan was tied to financial results in 2000, 2001 and 2002. Fifty
percent of the earned cash award was paid to active participants during the
fourth quarter of 2002 and the aggregate amount was $328,180. The remaining
fifty percent due was paid to active participants during the first quarter of
2003 and the aggregate amount was $323,412. A new cycle for the long-term
incentive cash plan was implemented in 2003. The three-year plan is tied to
cumulative financial results for 2003, 2004 and 2005. All named executives, with
the exception of Ms. Van Dyck, are participants in the Plan. Other executive
officers, upon approval of the Committee, also participate in this plan.
III. Compensation of the Chairman and the Chief Executive Officer
The salary, restricted stock, option grant, and cash long-term incentive
of the Chairman and the Chief Executive Officer are determined by the Committee
in conformance with the policies described above. Mr. Van Dyck was paid a base
salary in 2003 of $440,000, which was equal to the base salary he was paid in
2002 and 2001. Accompanying the 2003 change in Mr. Van Dyck's role from Chairman
and Chief Executive Officer to Chairman only, Mr. Van Dyck will no longer
participate in the stock long-term incentive plans. Mr. Van Dyck continues to
participate in the cash-long-term incentive plan.
Mr. Doherty was paid a base salary in 2003 of $260,000, a thirty-seven
percent increase over his 2002 base salary. Mr. Doherty's overall total
compensation opportunity increased by fifty-six percent over his 2002 total
compensation opportunity. This increase was in recognition of his promotion to
Chief Executive Officer effective April 2003. Mr. Doherty participates in the
stock and cash long-term incentive plans.
The Committee believes its philosophy of placing a substantial portion of
an executive officer's compensation at risk, dependent upon the Company's
performance, was achieved.
IV. Internal Revenue Code Considerations
Payments made during 2003 to the Chairman, the Chief Executive Officer and
the other named executive officers under the plans discussed above (other than
the Equity Compensation Plan) were made without regard to the provisions of
Section 162(m) of the Internal Revenue Code of 1986, as amended. That section
restricts the federal income tax deduction that may be claimed by a "public
company" for compensation paid to the chief executive officer and any of the
four most highly compensated other officers to $1.0 million except to the extent
that any amount in excess of such limit is paid pursuant to a plan containing a
performance standard or a stock option plan that meets certain requirements.
Stock option and restricted stock grants to the Chief Executive Officer were
made under the stock option plan which was approved by stockholders in April
1994, and amended and restated in May 1997, and the stock options (but not the
restricted stock) meet the requirements of Section 162(m). Certain stock option
and restricted stock grants to other named officers were made under a stock
option plan that was approved by the Board of Directors but not the
stockholders. While stock grants will not qualify for an exception under Section
162(m), the compensation of these officers, including expected option values, is
unlikely to approach the deductible limit. Accordingly, the Committee does not
believe that the provisions of Section 162(m) will have any adverse effect on
the Company.
Respectfully Submitted,
Compensation Committee of the Maritrans Inc. Board of Directors
Dr. Robert E. Boni, Chairman
Dr. Craig E. Dorman
William A. Smith
21
TOTAL STOCKHOLDER RETURN GRAPH
The following chart shows a five-year comparison of cumulative total
returns for the Company's Common Stock during the period from December 31, 1998
to December 31, 2003 with the Dow Jones Equity Market Index and the Dow Jones
Marine Transportation Index over the same period. The comparison assumes an
investment of $100 on December 31, 1997 in each index and the Company's Common
Stock and that all dividends and distributions were reinvested.
UPDATING
-------------- --------------- ----------------- ---------------- ----------- --------------- ----------- -----------
As of TUG Base 100 DOW Base 100 Transport Base 100
-------------- --------------- ----------------- ---------------- ----------- --------------- ----------- -----------
12/31/98 5.14 100.00 328.28 100.00 106.39 100.00 1998
-------------- --------------- ----------------- ---------------- ----------- --------------- ----------- -----------
12/31/99 4.52 87.97 402.88 122.72 150.35 141.32 1999
-------------- --------------- ----------------- ---------------- ----------- --------------- ----------- -----------
12/31/00 7.40 144.15 365.68 111.39 186.64 175.43 2000
-------------- --------------- ----------------- ---------------- ----------- --------------- ----------- -----------
12/31/01 11.21 218.18 321.97 98.08 191.18 179.70 2001
-------------- --------------- ----------------- ---------------- ----------- --------------- ----------- -----------
12/31/02 13.09 254.89 250.89 76.43 179.80 169.00 2002
-------------- --------------- ----------------- ---------------- ----------- --------------- ----------- -----------
12/31/03 16.71 325.33 328.03 99.92 273.48 257.05 2003
-------------- --------------- ----------------- ---------------- ----------- --------------- ----------- -----------
22
CERTAIN TRANSACTIONS
For a description of employment agreements and severance and
non-competition agreements with the executive officers of the Company see
"Compensation of Directors and Executive Officers--Employment Agreements" and
"Compensation of Directors and Executive Officers--Severance and Non-Competition
Agreements."
Other
Robert J. Lichtenstein, a director of the Company, is a partner in the
law firm of Morgan, Lewis & Bockius LLP. The Company retained this firm for
various matters during 2003 and expects to do so again during 2004.
OTHER MATTERS
Management is not aware of any matters to come before the Meeting which
will require the vote of stockholders other than those matters indicated in the
Notice of Meeting and this Proxy Statement. However, if any other matter
requiring stockholder action should properly come before the Meeting or any
adjournments or postponements thereof, those persons named as proxies on the
enclosed Proxy Form will vote thereon according to their best judgment.
STOCKHOLDER PROPOSALS FOR THE 2005 ANNUAL MEETING
Proposals of stockholders proposed to be presented at the 2005 Annual
Meeting of Stockholders must be received by the Company at the offices shown on
the first page of the Proxy Statement on or before November 28, 2004, in order
to be considered for inclusion in the proxy material to be issued in connection
with such meeting. Proposals should be directed to the attention of the
Secretary of the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers, and persons who own
more than 10% of a registered class of the Company's Common Stock to file
initial reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission. Such persons are required to furnish the
Company with copies of all such reports they file.
Based solely on written representations of purchases and sales of the
Company's Common Stock from reporting persons, the Company believes that all
filing requirements applicable to its directors, executive officers and persons
who own more than 10% of the Company's Common Stock have been observed in
respect to the year ended December 31, 2003.
23
Appendix A
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF MARITRANS INC.
I. Purpose
The Audit Committee (the "Committee") of the Board of Directors (the
"Board") of Maritrans Inc. (the "Company") is appointed by, and
generally acts on behalf of, the Board. The Committee's purposes shall
be:
A. To assist the Board in its oversight of (1) the integrity of
the Company's financial statements; and (2) the Company's
compliance with legal and regulatory requirements;
B. To interact directly with and evaluate the performance of the
independent auditors, including determining whether to engage
or dismiss the independent auditors and to monitor the
independent auditors' qualifications and independence;
C. To interact directly with and evaluate the performance of the
internal auditor service providers, including to determine
whether to engage or dismiss the providers and to monitor the
providers qualifications and independence; and
D. To prepare the report required by the rules of the Securities
and Exchange Commission (the "SEC") to be included in the
Company's proxy statement.
Although the Committee has the powers and responsibilities set forth in
this Charter, the role of the Committee is oversight. The members of
the Committee are not full-time employees of the Company and may or may
not be accountants or auditors by profession or experts in the fields
of accounting or auditing and, in any event, do not serve in such
capacity. Consequently, it is not the duty of the Committee to conduct
audits, to independently verify management's representations, or to
determine that the Company's financial statements are complete and
accurate, prepared in accordance with generally accepted accounting
principles ("GAAP"), or fairly present the financial condition, results
of operations, and cash flows of the Company in accordance with GAAP.
These are the responsibilities of management and the independent
auditors. The Committee's considerations and discussions with
management and the independent auditors do not assure that the
Company's financial statements are presented in accordance with GAAP,
that the audit of the Company's financial statements has been carried
out in accordance with generally accepted auditing standards, or that
the Company's independent auditors are in fact "independent."
II. Membership
A. The Committee shall be composed of at least three directors,
each of whom must be independent. A director shall qualify as
independent if the Board has affirmatively determined that the
member has met the independence criteria set forth in the
Company's Corporate Governance Guidelines. In addition,
members of the Committee must also satisfy the following
additional requirements in order to be independent:
1. No Committee member or immediate family member of
such Committee member may be an affiliated person of
the Company or any of its subsidiaries, as that term
is defined by the SEC; and
2. No Committee member shall accept, directly or
indirectly, any consulting, advisory, or other
compensatory fees from the Company or any of its
subsidiaries, except for fees for services as a
director and member of the Audit Committee and any
other Board committee.
24
B. All members of the Committee must be financially literate or
become financially literate within a reasonable time after
appointment to the Committee. At least one member shall have
accounting or related financial management expertise. To the
extent possible, at least one member of the Committee shall be
an "audit committee financial expert" as that term is defined
by the SEC.
C. The members of the Committee shall be nominated by the
Nominating and Corporate Governance Committee and appointed by
a majority of the Board for one-year terms. The Nominating and
Corporate Governance Committee shall recommend, and the Board
shall designate, one member of the Committee to serve as
Chairperson. The members of the Committee shall serve until
their resignation, retirement, or removal by the Board or
until their successors shall be appointed. No member of the
Committee shall be removed except by majority vote of the
independent directors of the full Board then in office.
D. Generally, no member of the Committee may serve simultaneously
on the audit committees of more than three public companies
without a specific Board determination that such simultaneous
service will not impair the ability of such Committee member
to serve on the Committee.
III. Meetings and Procedures
A. The Committee shall meet as often as it may deem necessary and
appropriate in its judgment, but in no event less than four
times per year. A majority of the members of the Committee
shall constitute a quorum.
B. The Committee shall meet with the independent auditors, the
senior personnel providing the Company's internal audit
services, and management in separate meetings, as often as it
deems necessary and appropriate in its judgment.
C. The Chairperson of the Committee or a majority of the members
of the Committee may call a special meeting of the Committee.
D. The Committee may request that any directors, officers, or
employees of the Company, or other persons whose advice and
counsel are sought by the Committee, attend any meeting to
provide such information as the Committee requests.
E. The Committee shall fix its own rules of procedure, which
shall be consistent with the Bylaws of the Company and this
Charter.
F. The Committee shall report to the Board on the matters
discussed at each meeting of the Committee, including
describing all actions taken by the Committee at the meeting.
G. The Committee shall keep written minutes of its meetings,
which minutes shall be maintained with the books and records
of the Company.
H. The Committee may delegate authority to one or more members of
the Committee where appropriate, but no such delegation shall
be permitted if the authority is required by a law,
regulation, or listing standard to be exercised by the
Committee as a whole.
I. The Committee shall have the authority to obtain advice and
assistance from internal and external legal, accounting and
other advisors, and the Company shall provide appropriate
funding for the Committee to retain any such advisors without
requiring the Committee to seek Board approval.
25
IV. Duties and Responsibilities
A. Financial Reporting Process
1. The Committee shall review and discuss with
management and the independent auditors the annual
audited financial statements to be included in the
Company's annual report on Form 10-K, the quarterly
financial statements to be included in the Company's
Form 10-Qs, the Company's disclosures under
"Management's Discussion and Analysis of Financial
Condition and Results of Operations," and any other
financial disclosures to be included in SEC filings
prior to their release. This discussion should
include, where appropriate, a discussion about the
Company's accounting principles, critical accounting
estimates, financial statement presentation,
significant financial reporting issues and judgments
(including the use of pro forma or non-GAAP financial
information), the adequacy of the Company's internal
controls, and any regulatory and accounting
initiatives, correspondence with regulators, or
published reports that raise material issues with
respect to, or that could have a significant effect
on, the Company's financial statements.
2. The Committee shall recommend to the Board whether
the audited financial statements should be included
in the Company's Form 10-K.
3. The Committee shall review earnings press releases
prior to their release.
4. The Committee shall prepare the report required by
the rules of the SEC to be included in the Company's
annual proxy statement.
B. Risks and Control Environment
1. The Committee shall discuss periodically with
management the Company's policies and guidelines
regarding risk assessment and risk management, as
well as the Company's major financial risk exposures
and the steps that management has taken to monitor
and control such exposures.
2. The Committee shall review periodically the Company's
Business Ethics Policy, and shall have the authority
to grant waivers of the Company's Business Ethics
Policy to the Company's directors and executive
officers.
3. The Committee shall meet periodically with the senior
personnel providing the internal audit services, the
general counsel's office, and the independent
auditors to review the Company's policies and
procedures regarding disclosures that may impact the
financial statements and compliance with applicable
laws and regulations and the Company's Business
Ethics Policy.
4. The Committee shall oversee the Company's disclosure
controls and procedures, including applicable
internal controls and procedures for financial
reporting, and internal controls relating to the
authorization of transactions and the safeguarding
and control of assets, and, where applicable, shall
oversee the changes in internal controls intended to
address any significant deficiencies in the design or
operation of internal controls or material weaknesses
therein and any fraud involving management or other
employees that are reported to the Committee. In
addition, the Committee shall review and discuss the
annual internal control report of management and the
independent auditors' report on, and attestation of,
management's evaluation of internal controls and
procedures for financial reporting, when those
reports are required by SEC rules.
C. Independent Auditors
1. The Committee shall have the sole authority to
retain, set compensation and retention terms for,
terminate, oversee, and evaluate the activities of
the Company's independent auditors. The independent
auditors shall report directly to the Committee. The
Company shall provide for appropriate funding, as
determined by the Committee, for payment of
compensation to the independent auditors.
26
2. The Committee shall review and approve in advance the
retention of the independent auditors for the
performance of all audit and lawfully permitted
non-audit services and the fees for such services.
Pre-approval of lawfully permitted non-audit services
may be pursuant to appropriate policies and
procedures established by the Committee for the
pre-approval of such non-audit services, provided
that any such pre-approved non-audit services are
reported to the full Committee at its next scheduled
meeting.
3. Prior to initiation of the audit, the Committee shall
meet with the independent auditors to discuss the
planning and staffing of the audit, including the
impact of applicable rotation requirements and other
independence rules on the staffing.
4. The Committee shall, at least annually, obtain and
review a report by the independent auditors
describing: (i) the independent auditors' internal
quality-control procedures; (ii) any material issues
raised by the most recent internal quality-control
review, or peer review, of the firm, or by any
inquiry or investigation by governmental or
professional authorities or a private sector
regulatory board, within the preceding five years,
respecting one or more independent audits performed
by the firm, and any steps taken to deal with any
such issues; (iii) any material litigation the firm
is involved in, respecting one or more independent
audits performed by the firm, and any steps taken to
deal with any such issues; and (iv) in order to
assess the firm's independence, all relationships
between the firm and the Company.
5. The Committee shall review periodically any reports
prepared by the independent auditors and provided to
the Committee relating to significant financial
reporting issues and judgments including, among other
things, the Company's selection, application, and
disclosure of critical accounting policies and
practices, all alternative treatments, assumptions,
estimates or methods that have been discussed with
management, including the ramifications of such
treatments and the treatment preferred by the
independent auditors, and any other material written
communications between the independent auditors and
management, such as any management letter or schedule
of unadjusted differences.
6. The Committee shall discuss with the independent
auditors any audit problems or difficulties,
including any restrictions on the scope of the
independent auditors' activities or on access to
requested information, and management's response to
same, shall discuss with the independent auditors any
other matters required to be brought to its attention
under auditing standards (e.g., SAS 61 and
Independent Standards Board No. 1), and shall resolve
any disagreements between the independent auditors
and management.
7. After reviewing the reports from the independent
auditors and the independent auditors' work
throughout the audit period, the Committee will
conduct an annual evaluation of the independent
auditors' performance and independence, including
considering whether the independent auditors' quality
controls are adequate. This evaluation also shall
include the review and evaluation of the audit
engagement team, including the lead partner. In
making its evaluation, the Committee shall take into
account the opinions of management and the senior
personnel providing the Company's internal audit
services. The Committee shall present its conclusions
with respect to the evaluation of the independent
auditors to the Board.
8. The Committee shall set clear policies for the hiring
by the Company of employees or former employees of
the independent auditors.
27
D. Internal Audit Function
1. The Committee shall oversee the activities,
organizational structure, and qualifications of the
persons providing the internal audit services.
2. The Committee shall review and approve the
appointment and replacement of the senior personnel
performing the internal audit services.
3. The Committee shall review and approve the annual
internal audit plan of, and any special projects
undertaken by, the personnel performing the internal
audit services.
4. The Committee shall discuss with the personnel
performing the internal audit services any changes
to, and the implementation of, the internal audit
plan and any special projects and discuss the results
of the internal audits and special projects.
5. The Committee shall review any significant reports to
management prepared by the internal audit service
providers and management's responses.
E. Evaluations and Reports
1. The Committee shall annually review and assess the
performance of the Committee and each Committee
member and deliver a report to the Board setting
forth the results of its evaluation. In conducting
this review, the Committee shall address matters that
it considers relevant to its performance, including
at a minimum, the adequacy, appropriateness, and
quality of the information and recommendations
presented to the Board, the manner in which they were
discussed or debated, and whether the number and
length of meetings of the Committee were adequate for
the Committee to complete its work in a thorough and
thoughtful manner.
2. The Committee shall make regular reports to the Board
on its activities, including reviewing any issues
that arise respecting the quality and integrity of
the Company's public reporting, the Company's
compliance with legal and regulatory requirements,
the performance and independence of the Company's
independent auditors, the performance of the
Company's internal audit service providers, and the
effectiveness of the Company's disclosure controls
and procedures.
F. Other Matters
1. The Committee shall establish procedures for the
approval of all related-party transactions involving
executive officers and directors.
2. The Committee shall establish procedures for (i) the
receipt, retention, and treatment of complaints
received by the Company regarding accounting,
internal accounting controls, or auditing matters,
and (ii) the confidential, anonymous submission by
Company employees of concerns regarding questionable
accounting or auditing matters.
3. The Committee shall review and reassess the adequacy
of this Charter annually and recommend any proposed
changes to the Board for its approval.
4. The Committee shall maintain free and open
communication with the Board, management, the
internal auditor service provider, and the
independent auditors.
5. The Committee shall perform any other activities
consistent with this Charter, the Company's
Certificate of Incorporation, the Company's Bylaws,
and governing law, as the Committee or the Board may
deem necessary or appropriate.
28
MARITRANS INC. PROXY
This proxy is solicited on behalf of the Board of Directors for the Annual
Meeting on April 29,2004.
This proxy will be voted as specified by the stockholder. If no
specification is made, all shares will be voted as set forth in the proxy
statement FOR the election of the Directors.
The stockholder(s) represented herein appoint(s) Walter T. Bromfield, and
Judith M. Cortina, or any of them, proxies with the power of substitution to
vote all shares of Common Stock entitled to be voted by said stockholder(s) at
the Annual Meeting of Stockholders of Maritrans Inc. to be held at the Wyndham
Harbour Island Hotel, 725 S. Harbour Island Boulevard, Tampa, FL 33602, on April
29, 2004 at 9:00 a.m., and in any adjournment or postponement thereof, as
specified in this proxy:
(To Be Signed on Reverse Side.)
Please Detach and Mail in Envelope Provided
________________________________________________________________________________
A /X/ Please mark your votes as in this example.
The Board of Directors recommends a vote FOR Item 1.
Item 1:
Election of the Director Nominee
3 Year Term FOR / / WITHHELD / / Mr. Robert J. Lichtenstein
Mr. Frederick C. Haab
In their discretion, proxies are entitled to vote upon such other matters as may
properly come before the meeting, or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD
IN THE ENCLOSED ENVELOPE
--------------------------------------------------------------------------------
I wish to attend the Annual Meeting of
Maritrans, Inc. Scheduled for Thursday,
April 29, 2004 at 9:00 a.m. in Tampa,
Florida. Please provide me with an
admittance card. / /
Change of Address Please Note Below / /
Change of Address
Signature__________________________ Date:______________________________________
Signature__________________________ Date:______________________________________
(Signature, if shares held jointly)
NOTE: Please sign above exactly as your name appears on this card. Joint owners
should each sign personally. Corporate proxies should be signed by an authorized
officer. Executors, Administrators, Trustee, etc. should so indicate when
signing.