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
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(Name of Registrant as Specified in Its Charter)
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(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):
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4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
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/ / 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:
___________________________________________________________________________
[graphic]
Two Harbour Place
302 Knights Run Avenue
Suite 1200
Tampa, FL 33602
813-209-0600
March 14, 2003
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 Wednesday, April 30,
2003, at 10:30 a.m., local time, at the Hotel DuPont, 11th and Market Streets,
Wilmington, DE 19801.
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 three directors; one director to
serve for a two-year term and 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 30, 2003.
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 2003 ANNUAL MEETING
OF STOCKHOLDERS
To Be Held April 30, 2003
____________________
The Annual Meeting of Stockholders (the "Meeting") of Maritrans Inc., a
Delaware corporation (the "Company"), will be held at the Hotel DuPont, 11th
and Market Streets, Wilmington, DE 19801 on Wednesday, April 30, 2003, at
10:30 a.m. local time, for the purpose of considering and voting upon the
following matters:
1. The election of three directors; one director to serve for a two
(2) year term and 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 14, 2003, 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
Janice M. Van Dyck
Secretary
Tampa, Florida
March 14, 2003
MARITRANS INC.
Two Harbour Place
302 Knights Run Avenue
Suite 1200
Tampa, FL 33602
--------------------
NOTICE OF 2003 ANNUAL MEETING
OF STOCKHOLDERS
To Be Held April 30, 2003
--------------------
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 2003 Annual Meeting (the "Meeting") to be held on
Wednesday, April 30, 2003, at 10:30 a.m., local time at the Hotel DuPont, 11th
and Market Streets, Wilmington, DE 19801. 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 April 1, 2003. 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,
2002, 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, at the Meeting three directors will
be elected; one director to serve for a two-year term and two directors to
serve for a three-year term. The other four 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 14, 2003, are entitled to
vote at the Meeting. As of that date, 8,174,897 shares of the 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 Wednesday, April 23, 2003. 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 six directors serving staggered terms of
office. The term of two current directors, Mr. Stephen A. Van Dyck and Dr.
Robert E. Boni, will expire at the 2003 Annual Meeting. The Board has
nominated Mr. Stephen A. Van Dyck and Dr. Robert E. Boni for election as
directors of the Company. In addition, the Board has nominated Mr. William A.
Smith for election to the Board of Directors to fill the three year term
previously held by Dr. Boni. Dr. Boni's term of office would expire in 2005.
Mr. Van Dyck and Mr. Smith's terms of office would expire in 2006. The
remaining four 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 16, 2003.
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, 2003.
Nominees for Election at the 2003 Annual Meeting for 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., an insurance 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. Dr. Boni is also currently a member of
the Board of Directors of Controlling Technologies International, Inc., a
metals technology company. He is a member of the Company's Audit and
Compensation (Chairman) Committees of the Board of Directors. In February 1999,
Dr. Boni was named Lead Director. Dr. Boni is 75 and has served on the Board of
Directors since 1990.
Nominees for Election at the 2003 Annual Meeting for Terms Expiring in 2006
Stephen A. Van Dyck ............................ Mr. Van Dyck has been Chairman of the Board and Chief Executive Officer of the
Company and its predecessor since April 1987. For the previous year, he was a
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 59 and has served on the Board of
Directors since 1986.
3
William A. Smith ............................... Mr. Smith is Managing Director of Cornerstone Ventures, L.P. since June 2002.
From 1999 to 2002, Mr. Smith worked in various capacities at El Paso, 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. Mr. Smith is 58.
Director Continuing in Office with Term Expiring in 2004
Robert J. Lichtenstein ......................... Mr. Lichtenstein is a partner in the law firm of Morgan, Lewis & Bockius LLP
since 1988. He is a member of the Company's Nominating (Chairman) Committee of
the Board of Directors. See "Certain Transactions -- Other". Mr. Lichtenstein is
55 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. Mr. Haab is 65 and has served on the Board of Directors since
2002.
Director Continuing in Office with Term Expiring in 2005
Dr. Craig E. Dorman ............................ Dr. Dorman is Vice President (Research) at the University of Alaska, Statewide
System. From 1996 thru 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 Committees of the Board of Directors. Dr.
Dorman is 62 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 was employed by Crowley Maritime Corporation in
various capacities since 1975. He is a member of the Company's Audit (Chairman)
Committee of the Board of Directors. Mr. Stienecker is 64 and has served on the
Board of Directors since 1999.
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 as of March 1, 2003:
Shares
Beneficially Percent Voting Power Investment Power
Name and Address of Beneficial Owner Owned Of Class Sole Shared Sole Shared
------------------------------------ ----- -------- ---- ------ ---- ------
Ingalls & Snyder LLC ........................................ 1,305,550 16.00% - - - 1,305,550
61 Broadway
New York, NY 10006
Stephen A. Van Dyck (1) ..................................... 722,984 8.55% 722,984 - 722,984 -
Maritrans Inc.
Two Harbour Place
302 Knights Run Avenue
Suite 1200
Tampa, FL 33602
Kahn Brothers & Co., Inc. ................................... 636,915 7.83% - - - 636,915
555 Madison Avenue
22nd Floor
New York, NY 10022
Dimensional Fund Advisors Inc. (2) .......................... 412,400 5.07% 412,400 - 412,400 -
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
---------------
(1) Mr. Van Dyck disclaims beneficial ownership of an aggregate 206,088
shares. See "Share Ownership of Management and the Board of Directors".
(2) Dimensional Fund Advisors Inc. ("Dimensional"), an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940,
furnishes investment advice to four investment companies registered under
the Investment Advisors Act of 1940, and serves as investment manager to
certain other commingled group trusts and separate accounts. These
investment companies, trusts and accounts are the "Funds". In its role as
investment advisor or manager, Dimensional possesses voting and/or
investment power over the securities of Maritrans Inc. described in this
schedule that are owned by the Funds and may be deemed to be the
beneficial owner of the shares of Maritrans Inc. held by the Funds. All
securities reported in this schedule are owned by the Funds. Dimensional
disclaims beneficial ownership of all such shares.
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
4's filed with the Securities and Exchange Commission.
5
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, 2003.
Share Ownership of Management and the Board of Directors
Shares Beneficially
Owned (1)(2)
-------------------
Name Number Percent
---- ------ -------
Stephen A. Van Dyck (3) ................................. 722,984 8.55%
Dr. Robert E. Boni (4) .................................. 36,572 *
Dr. Craig E. Dorman (5) ................................. 26,849 *
Frederick C. Haab (6) ................................... 2,113 *
Robert J. Lichtenstein (7) .............................. 34,966 *
Brent A. Stienecker (8) ................................. 14,503 *
Philip J. Doherty (9) ................................... 43,536 *
Walter T. Bromfield (10) ................................ 70,983 *
Stephen M. Hackett (11) ................................. 82,398 1.00%
Janice M. Van Dyck (12) ................................. 206,088 2.49%
All directors and executive officers as a group
(12 persons).......................................... 1,288,826 14.85%
---------------
* less than one percent
(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 shareholders are Two Harbour Place, 302 Knights Run
Avenue, Suite 1200, Tampa, FL 33602.
(3) Mr. Van Dyck's shares do not include the 206,088 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, 2003 total 276,483.
(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, 2003 total 11,664.
(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, 2003 total 11,664.
(6) Mr. Haab has sole investment power. There are no shares of Common Stock
subject to options exercisable within 60 days of March 1, 2003.
(7) 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, 2003 total 11,664.
(8) Mr. Stienecker has sole investment power. Shares of Common Stock subject
to options exercisable within 60 days of March 1, 2003 total 7,239.
(9) Mr. Doherty has sole investment power. Shares of Common Stock subject to
options exercisable within 60 days of March 1, 2003 total 11,182.
(10) 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, 2003 total 29,469.
(11) Mr. Hackett has sole investment power. Shares of Common Stock subject to
options exercisable within 60 days of March 1, 2003 total 31,959.
6
(12) Ms. Van Dyck's shares do not include the 722,984 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, 2003 total 92,786.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of Common Stock subject to options
exercisable within 60 days of March 1, 2003, 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, 2003, are considered
beneficially owned with respect to this table.
Equity Compensation Plan Information
-----------------------------------------------------------------------------------------------------------------------------------
(c) Number of
securities remaining
available for
future issuance
(a) Number of securities under equity
to be issued upon (b) Weighted-average compensation plans
exercise of exercise price of (excluding securities
Plan Category outstanding option outstanding options reflected in column (a))
-----------------------------------------------------------------------------------------------------------------------------------
Equity compensation plans approved by security
holders 520,365 $7.34 198,835
-----------------------------------------------------------------------------------------------------------------------------------
Equity compensation plans not approved by security
holders * 419,425 $7.09 165,154
-----------------------------------------------------------------------------------------------------------------------------------
Total 939,790 $7.23 363,989
-----------------------------------------------------------------------------------------------------------------------------------
* 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, 2002.
COMMITTEES OF THE BOARD OF DIRECTORS
There were eight Board of Directors meetings and twelve Board of Directors
Committee meetings during 2002. Each director attended more than 75% 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 Committees. The principal responsibilities of the Committees
are described below. The members of each Committee are identified in the
director biographies set forth under "Information Regarding Nominees for
Election as Directors and Regarding Continuing Directors." All members of the
Committees have been deemed to be independent as defined by Section 303.01
B(2)(a) and (3) of the New York Stock Exchange listing standards.
The Audit Committee, presently consisting of three non-employee directors,
met five times in 2002, and is required to meet four times annually. The
members are appointed annually by the Company's Board of Directors. 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 nonaudit
services with the auditor's independence. The Board of Director's has adopted
a written charter for the Audit Committee.
7
The Compensation Committee, presently consisting of three non-employee
directors, met four times in 2002. The Compensation Committee is required to
meet twice annually. The Company's Board of Directors appoints members
annually. 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 management employees of the
Company (executive management employees 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; determining the compensation paid to the Board of Directors;
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 senior officers who
report to him and in conjunction with the Chief Executive Officer,
establishing and monitoring the succession plan for executive management.
The Finance Committee did not meet in 2002. 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 Committee, presently consisting of two non-employee
directors, met three times in 2002. The chair 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 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 chairs 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;
and leading the Board self evaluation process and, when appropriate,
recommending deletion or creation of additional Committees.
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 and Chief Executive Officer, an employee-director of the Company.
In February 2003, the Board of Directors of Maritrans Inc. announced the
appointment of Philip J. Doherty to Chief Executive Officer effective April 1,
2003. Stephen A. Van Dyck will continue to be employed by the Company as
Chairman of Maritrans Inc.
Mr. Bromfield is Vice President 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. Doherty is President of Maritrans General Partner Inc., a wholly owned
subsidiary of the Company, and has been employed by the Company since 1997.
Previously, Mr. Doherty was Director of Business Development for Computer
Command and Control Company where he had been employed since April 1995.
8
Mr. Hackett is President, Chartering Division of Maritrans Operating Company
L.P., a wholly owned subsidiary of the Company, and has been continuously
employed by the Company or its predecessors in various capacities since 1980.
Mr. Nielsen is President, Operations Division of Maritrans Operating Company
L.P. a wholly owned subsidiary of the Company and began employment with the
Company in 2002. Previously, Mr. Nielsen was Managing Partner of P.G. Nielsen
and Company, LLC. Prior to that, Mr. Nielsen was Managing Director at Seabulk
Offshore, S.A. Prior to Seabulk, Mr. Nielsen was Director, Project Management
at Hvide Marine Inc.
Ms. Van Dyck is Secretary of the Company. Previously, Ms. Van Dyck served as
Senior Vice President and has been continuously employed by the Company or its
predecessors in various capacities since 1982.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Directors' Compensation
During 2002, pursuant to its compensation policy for outside directors, the
Company paid outside directors $1,000 for each Board of Directors meeting
attended and $500 for each Board of Directors Committee meeting attended, plus
expenses. In addition, each outside director was paid Board of Directors
annual retainer fees at the annual rate of $18,000, of which one-half was paid
in Common Stock, resulting in the issuance of 717 shares to each outside
director, with the exception of Mr. Haab who joined the Board during the year.
Mr. Haab received 335 shares. Each outside director also received a retainer
of $1,000 for each Board of Directors Committee on which he served. Aggregate
directors fees paid in 2002 for retainer fees, Board of Directors meetings and
Board of Directors Committee meetings amounted to $144,918.
Executive Compensation
The following Summary Compensation Table sets forth the cash compensation
and certain other components of the compensation received by the Chief
Executive Officer and the other four most highly compensated executive
officers of Maritrans Inc. or its subsidiaries during the three years ended
December 31, 2002, 2001 and 2000.
9
Summary Compensation Table
Annual
Compensation Long-Term Compensation
--------------- ----------------------------------
Awards Payouts
Restricted Securities
Stock Underlying LTIP All Other
Salary Bonus Awards Options Payouts Compensation
Name and Principal Position Year ($) ($) ($)(1) (#) ($) ($)(2)
--------------------------- ---- ------- ----- ---------- ---------- ------- ------------
Stephen A. Van Dyck 2002 440,000 -- 299,669 26,816 332,867 80,042
Chairman of the Board 2001 446,225 -- 281,943 32,642 -- 73,942
and Chief Executive Officer 2000 464,900 -- 387,156 19,274 -- 207,301
Philip J. Doherty 2002 190,040 -- 130,507 11,679 26,107 43,427
President of Maritrans General 2001 143,673 -- 34,798 4,029 -- 42,989
Partner Inc. 2000 120,000 -- 36,960 1,840 -- 9,239
Stephen M. Hackett 2002 180,000 -- 69,605 6,229 115,307 33,558
President, Chartering Division of 2001 180,000 -- 34,798 4,029 -- 25,164
Maritrans General Partner Inc. 2000 180,000 -- 83,154 4,140 -- 31,921
Walter T. Bromfield 2002 179,923 -- 44,014 3,938 39,161 16,387
Chief Financial Officer 2001 160,000 -- 34,834 4,032 -- 11,174
Former Treasurer and Controller 2000 160,000 -- 46,230 2,302 -- 49,135
Janice M. Van Dyck (A) 2002 166,223 -- 121,485 10,872 138,151 14,817
Secretary 2001 245,000 -- 113,404 13,130 -- 14,406
Former Senior Vice President 2000 260,000 -- 157,080 7,820 -- 28,365
---------------
(A) Effective January 2002, Ms. Van Dyck, formerly Ms. Smallacombe, no
longer serves as Senior Vice President of the Company. Ms. Van Dyck
currently serves as Secretary of the Company on a part time basis.
(1) The shares granted carry restrictions, which restrictions lapse based on
the passage of time, up to five years. At December 31, 2002, the named
officers' aggregate restricted shares and values were as follows:
AGGREGATE RESTRICTED STOCK HOLDINGS
# of shares that will vest
# of shares $ value within three years
----------- --------- --------------------------
Stephen A. Van Dyck....................... 122,556 1,654,506 122,556
Philip J. Doherty......................... 21,490 290,115 21,490
Stephen M. Hackett........................ 23,870 322,245 23,870
Walter T. Bromfield....................... 15,485 209,048 15,485
Janice M. Van Dyck........................ 49,604 669,654 49,604
(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 and automobile allowances. See "Certain Transactions."
10
Option Grants in 2002
The following table sets forth certain information concerning options
granted during 2002 to the named executives:
Potential
Realizable
Value at Assumed
Number of % of Total Annual Rates of Stock
Securities Options Price Appreciation
Underlying Granted to Exercise for Option Term (1)
Options Employees Price Expiration -------------------
Name Granted in 2002 ($/Share) Date 5% 10%
---- ---------- ---------- --------- ---------- -- ---
Stephen A. Van Dyck ................................... 26,816 43.90% $ 11.45 2/11/12 $193,098 $489,348
Philip J. Doherty ..................................... 11,679 19.12% $ 11.45 2/11/12 84,099 213,122
Stephen M. Hackett .................................... 6,229 10.20% $ 11.45 2/11/12 44,854 113,669
Walter T. Bromfield ................................... 3,938 6.45% $ 11.45 2/11/12 28,357 71,862
Janice M. Van Dyck .................................... 10,872 17.80% $ 11.45 2/11/12 78,288 198,396
---------------
(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.
Aggregated Option Exercises in 2002 and 2002 Year-end Options Values
The following table summarizes options exercised during 2002 and presents
the value of unexercised options held by the named executives at year-end:
Number of
Securities
Underlying
Unexercised Value of Unexercised
Options In-the-Money Options
Shares at 12/31/02 at 12/31/02
Acquired Value Exercisable (E) Exercisable (E)
Name on Exercise Realized Unexercisable (U) Unexercisable (U)
---- ----------- -------- ----------------- -----------------
Stephen A. Van Dyck ........................... 168,827 1,233,437 296,395 (E) $2,194,935 (E)
144,690 (U) 848,026 (U)
Philip J. Doherty ............................. 0 0 9,226 (E) 65,327 (E)
20,165 (U) 76,102 (U)
Stephen M. Hackett ............................ 0 0 29,236 (E) 194,354 (E)
20,016 (U) 104,692 (U)
Walter T. Bromfield ........................... 9,985 72,195 27,358 (E) 191,420 (E)
18,118 (U) 102,932 (U)
Janice M. Van Dyck ............................ 8,000 52,400 87,788 (E) 628,394 (E)
58,823 (U) 344,502 (U)
11
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
Annual Years of Credited Service
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
The following table sets forth the years of credited service through
December 31, 2002, 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 28.5
Philip J. Doherty 6.0
Stephen M. Hackett 22.5
Walter T. Bromfield 20.0
Janice M. Van Dyck 19.5
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.
12
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 2002 for
the officers listed in the Summary Compensation Table was $440,000 for Mr. Van
Dyck, $190,040 for Mr. Doherty, $180,000 for Mr. Hackett, $179,923 for Mr.
Bromfield, and $166,223 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 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 and 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 Ms. Van Dyck. The Company also entered into Severance and Non-
Competition Agreements with Messrs. Bromfield, Doherty, Hackett and Nielsen.
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.
Bromfield's agreement provides for the payment of 12 months of base
compensation if he is terminated without cause and an additional 12 months of
base compensation 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 single sum payment equal
to 12 months base compensation and an additional single sum payment equal to
12 months of base compensation in exchange for his agreement not to compete
for 12 months. Mr. Doherty's agreement provides for the payment of 12 months
of base compensation if
13
he is terminated without cause and an additional 12 months of base
compensation 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
his base compensation and an additional single sum payment equal to 12 months
of base compensation in exchange for his 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. Nielsen's
agreement provides for the payment of 12 months of base salary if he is
terminated without cause and in exchange for his agreement not to compete for
12 months. In the event of a change of control of the Company, Mr. Nielsen
receives 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.
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, 2002 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 Maritrans Inc. Board of Directors
Mr. Brent A. Stienecker, Chairman
Dr. Robert E. Boni
Mr. Frederick C. Haab
14
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Compensation Committee Interlocks and Insider Participation
During fiscal 2002, 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. Boni, Dr. Dorman and Mr. Stienecker
comprised the Committee until May 2002, when the Board's Committees were
realigned and Mr. Haab, a new director, replaced Mr. Stienecker. None of these
individuals received compensation as an officer of the Company during fiscal
2002 and the Board has determined that each is an "independent director." No
officer of the Company presently serves as a member of the Compensation
Committee.
Report of the Compensation Committee on Executive Compensation
I. Compensation Philosophy and Strategy
Maritrans strives to increase its earnings and to enhance shareholder 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. Maritrans 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 Maritrans' total compensation
program attracts and retains the highest caliber of people necessary to
generate success for the Company and its shareholders.
Maritrans' philosophy for its executive compensation programs has been to
reward the most relevant factors that drive the return to shareholders. For
2002, Maritrans' Board identified the most important factor to be the
achievement of long-term shareholder value.
The Committee and management recognize the need to review continuously 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 shareholder value;
o is cost effective;
o balances shareholder interests with employee rewards;
o is well communicated and understood by program participants;
o is competitive with other similar industry organizations; and
o assures continued awareness of maintaining high levels of safety standards.
A study of the Company's overall executive compensation program was
performed by external consultants in 2001. The focus of this study was to
ensure that jobs had been documented and evaluated appropriately and that
total compensation was consistent with the internal structure and external
market.
II. Program Description
A. Total Compensation Approach
Maritrans' compensation strategy is to place between one-quarter and one-
half of executive total compensation at risk in the form of stock-based
programs. Under this strategy, Maritrans' executives can achieve total
compensation levels significantly above the average peer comparison levels
when long-term performance significantly exceeds established goals and
shareholders are rewarded through stock price growth and dividends. Likewise,
total executive compensation could fall substantially below average levels
when increased shareholder return is not achieved. In recognition of the
Company's reduced size and relocation of its corporate headquarters outside
the Mid-Atlantic metropolitan area, the Committee changed its compensation
philosophy in 2001. Beginning in 2001, the Committee utilized the seventy-
fifth percentile of published survey data for comparing
15
base salaries instead of the ninetieth percentile. 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 of published
survey data only with the attainment of personal goals and goals for Company
financial performance. Beginning in 2002, base salaries were set to reflect
performance and experience with total compensation not to exceed the seventy-
fifth percentile.
B. Base Salaries
Executive base salaries are determined according to job responsibilities,
strategic contribution level, market compensation data, and performance and
experience criteria. Of the named executives, only Mr. Bromfield and Mr.
Doherty received base salary increases. This was in recognition of Mr.
Bromfield being promoted to Chief Financial Officer of Maritrans Inc. and Mr.
Doherty becoming President of Maritrans General Partner Inc. The remaining
three named executives, including Mr. Van Dyck, did not receive base salary
increases for 2002. In fact, Mr. Van Dyck received a base salary decrease in
2001 to reflect the Company's smaller profile. Mr. Van Dyck's compensation
information is available in the "Summary Compensation Table" and is discussed
in Section III, "Chief Executive Officer Compensation."
C. Long-Term Incentives
Compensation from these incentive plans is based on increasing shareholder
value through stock price 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's compensation with the
economic interest of the shareholder of the Company. 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. 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. For the current option position of each executive, refer to the
table, "Aggregated Option Exercises in 2002 and 2002 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.
The Committee also believes that actual and immediate stock ownership is
another integral part of promoting the shareholder economic interest and tying
executive compensation directly to the success of the Company. Accordingly,
all named executives also received restricted stock grants in 2002. 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. 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.
Effective in 2001, non-qualified stock options and restricted stock grants
were awarded based on the achievement of pre-determined personal goals that
were set in the previous year. These personal goals are developed based on the
Company goals and strategy. The Committee believes that it is important to tie
individual performance to long-term compensation. The Committee will determine
the extent to which a goal has been achieved. Since the maximum stock-based
incentive opportunity for executives was reduced in 2000, a long-term cash
plan was introduced. This is a three-year plan tied to financial results in
2000, 2001 and 2002. This long-term cash plan projects a total cash amount
payable to the executive at the end of the three-year period based on targeted
earnings per share or net income results. The Committee will determine the
extent to which payments will be made based on actual financial results over
the period. Fifty percent of the 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.
III. Chief Executive Officer Compensation
The salary, restricted stock, cash long-term incentive and option grant of
the Chief Executive Officer are determined by the Committee in conformance
with the policies described above. Mr. Van Dyck was paid a base salary for the
fiscal year ending December 31, 2002, of $440,000, which was equal to the base
salary he was paid
16
in 2001. The Committee believes its philosophy of placing a substantial
portion of an executive's compensation at risk, dependent upon the Company's
performance, was achieved.
IV. Internal Revenue Code Considerations
Payments made during 2002 to the Chief Executive Officer and the other named
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 CEO were made under the stock
option plan which was approved by shareholders 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 shareholders. 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 Maritrans Inc. Board of Directors
Dr. Robert E. Boni, Chairman
Dr. Craig E. Dorman
Mr. Frederick C. Haab
17
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, 1997 to
December 31, 2002 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.
[graphic omitted]
DJ Equity DJ Marine
Maritrans, Inc. Market Index Transport Index
--------------- ------------ ----------------
Base 100 Base 100 Base 100
100.00 100.00 100.00
70.28 124.90 58.22
61.82 153.28 82.28
101.30 139.07 102.14
153.33 122.50 104.62
179.13 95.45 98.40
18
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 2002 and expects to do so again during 2003.
INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, were the Company's auditors for the
year ended December 31, 2002 and are expected to be retained for the year
ending December 31, 2003. Fees for the 2002 audit were $177,000 and all other
fees were $159,000, including audit related services of $48,000. There were no
fees for financial information design and implementation. Audit related
services include fees for employee benefit plans audits. 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.
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 2004 ANNUAL MEETING
Proposals of stockholders proposed to be presented at the 2004 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 29, 2003, 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, 2002, with the exception of one director,
Mr. Fred Haab whose Form 3 was filed two weeks late.
19
MARITRANS INC. PROXY
This proxy is solicited on behalf of the Board of Directors for the Annual
Meeting on April 30, 2003.
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) Janice M. Van Dyck and
Walter T. Bromfield, 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 Hotel
DuPont, 11th and Market Streets, Wilmington, DE 19801, on April 30, 2003 at
10:30 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
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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. Stephen A. Van Dyck
Mr. William A. Smith
2 Year Term Dr. Robert E. Boni
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
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I wish to attend the Annual Meeting of Maritrans, Inc.
scheduled for Wednesday, April 30, 2003 at 10:30 a.m.
in Wilmington, Delaware. 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.