Edgar Filing: GULF ISLAND FABRICATION INC

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No. )

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¨	Soliciting Material Pursuant to § 240.14a-12

GULF ISLAND FABRICATION, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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SEC 1913 (04-05)

LOGO

GULF ISLAND FABRICATION, INC.

16225 PARK TEN PLACE

SUITE 280

HOUSTON, TEXAS 77084

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD APRIL 24, 2014

TO THE SHAREHOLDERS OF GULF ISLAND FABRICATION, INC.:

The annual meeting of shareholders of Gulf Island Fabrication, Inc. (the “Company”) will be held at 10:00 a.m., local time, on Thursday, April 24, 2014, at the Company’s headquarters located at 16225 Park Ten Place, Suite 280, Houston, Texas, for the following purposes, more fully described in the accompanying proxy statement:

To elect the three Class II director nominees named in the proxy statement;

To approve, on an advisory basis, the compensation of the Company’s named executive officers;

To ratify the appointment of the Company’s independent registered public accounting firm; and

To transact such other business as may properly come before the annual meeting and any adjournments thereof.

The Board of Directors recommends that you vote “FOR” each of these proposals. The Board of Directors has fixed the close of business on March 6, 2014 as the record date for the determination of shareholders entitled to notice of and to vote at the annual meeting and all adjournments thereof.

Your vote is important regardless of the number of shares of the Company’s common stock you own. Whether or not you plan to attend the annual meeting, please complete, date and sign the enclosed proxy card and return it promptly in the enclosed stamped envelope. Furnishing the enclosed proxy card will not prevent you from voting in person at the annual meeting should you wish to do so. To obtain directions to attend the annual meeting and vote in person, please contact Deborah Kern-Knoblock at (713) 714.6100.

By Order of the Board of Directors

LOGO

DEBORAH KERN-KNOBLOCK

Secretary

Houston, Texas

March 14, 2014

IMPORTANT NOTICE REGARDING THE AVAILIBILITY

OF THE PROXY MATERIALS FOR THE SHAREHOLDER

MEETING TO BE HELD ON APRIL 24, 2014.

The accompanying proxy statement and the 2013 annual report are available at www.gulfisland.com/eproxy

LOGO

GULF ISLAND FABRICATION, INC.

16225 PARK TEN PLACE, SUITE 280

HOUSTON, TEXAS 77084

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD APRIL 24, 2014

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING

Q: Why am I receiving this proxy statement?

A: Our Board of Directors (our “Board”) is soliciting your proxy to vote at the 2014 annual meeting of shareholders and at any adjournment thereof because you owned shares of our common stock at the close of business on March 6, 2014, the record date for determining shareholders entitled to vote at the annual meeting. The proxy statement, along with a proxy card or a voting instruction card, and our 2013 annual report are being mailed to shareholders on or about March 17, 2014. We have also made these materials available to you on the internet. This proxy statement summarizes the information you need to know to vote at the annual meeting. You do not need to attend the annual meeting to vote your shares of our common stock.

Q: When and where will the annual meeting be held?

A: The annual meeting will be held at 10:00 a.m., local time, on Thursday, April 24, 2014, at our headquarters located at 16225 Park Ten Place, Suite 280, Houston, Texas 77084.

Q: Who is soliciting my proxy?

A: Our Board, on behalf of Gulf Island Fabrication, Inc. (the Company), is soliciting your proxy to vote your shares of our common stock on all matters scheduled to come before the 2014 annual meeting of shareholders, whether or not you attend in person. By completing and returning the proxy card or voting instruction card, you are authorizing the proxy holder to vote your shares of our common stock at our annual meeting as you have instructed.

Q: On what matters will I be voting? How does the Board of Directors recommend that I cast my vote?

A: At the annual meeting, our shareholders will be asked to elect the three Class II director nominees named in this proxy statement, to approve, on an advisory basis, the compensation of our named executive officers, to ratify the appointment of our independent registered public accounting firm and to consider any other matter that properly comes before the annual meeting.

Our Board unanimously recommends that you vote:

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FOR the election of the three Class II director nominees;

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FOR the approval, on an advisory basis, of the compensation of our named executive officers (the “say-on-pay proposal”); and

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FOR the ratification of the appointment of our independent registered public accounting firm.

Q: How many votes may I cast?

A: You may cast one vote for every share of our common stock that you owned on March 6, 2014, the record date of the annual meeting.

Q: How many shares are eligible to be voted?

A: As of the record date, we had 14,497,908 shares of our common stock outstanding, each of which is entitled to one vote.

Q: How many shares must be present to hold the annual meeting?

A: Under Louisiana law and our By-laws, the presence, in person or by proxy, of a majority of the outstanding shares of our common stock is necessary to constitute a quorum at the annual meeting. As of the record date, 7,248,955 shares constitute a majority of our outstanding stock entitled to vote at the annual meeting. The inspector of elections will determine whether a quorum is present at the annual meeting. If you are a beneficial owner (as defined below) of shares of our common stock and you do not instruct your broker, bank or other nominee how to vote your shares on any of the proposals, your shares of our common stock will be counted as present at the annual meeting for purposes of determining whether a quorum exists. In addition, if you are a shareholder of record present at the annual meeting in person or by proxy, your shares of our common stock will be counted as present at the annual meeting for purposes of determining whether a quorum exists, whether or not you abstain from voting on any or all of the proposals.

Q: What is the difference between holding shares as a shareholder of record and as a beneficial owner?

A: If your shares of our common stock are registered directly in your name with our transfer agent, American Stock Transfer and Trust Company, LLC, you are considered, with respect to those shares, the “shareholder of record.” The proxy materials have been mailed to such shareholders of record by us.

If your shares of our common stock are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of shares held in “street name.” The proxy materials have been forwarded to such beneficial owners by the organization that holds your shares of our common stock, which is considered, with respect to those shares, the shareholder of record. As the beneficial owner, you have the right to instruct your broker, bank or other nominee how to vote your shares by completing and returning the voting instruction card included in their mailing or by following the voting instructions you received from your broker, bank or other nominee.

Q: What happens if I don’t vote for a proposal? What is discretionary voting? What is a broker non-vote?

A: If you properly complete and return a proxy or voting instruction card, your shares will be voted as you specify.

Shareholders of Record

If you are a shareholder of record and you sign and return your proxy card without giving specific voting instructions on some or all of the proposals, then the proxy holders will vote your shares of our common stock in the manner recommended by our Board on all matters presented in this proxy statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the annual meeting.

Beneficial Owners of the Shares Held in Street Name

If you are a beneficial owner of shares held in street name and do not provide specific voting instructions to the broker, bank or other nominee that holds your shares of our common stock, the organization that holds your shares of our common stock has discretion to vote on routine matters but cannot vote on non-routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, such organization will inform the inspector of elections that it does not have the authority to vote on this matter with respect to your shares of our common stock. This is generally referred to as a “broker non-vote.”

Q: Which proposals are considered “routine” and which are considered “non-routine”?

A: The proposal relating to the ratification of the appointment of our independent registered public accounting firm is the only routine matter being considered at the annual meeting. The proposal relating to the election of directors and the say-on-pay proposal are non-routine matters. A broker, bank or other nominee cannot vote without instruction on non-routine matters, in which case there would be broker non-votes on such proposals. Shares subject to broker non-votes will not be counted as votes for or against and will not be included in calculating the number of votes necessary for approval of such non-routine matters to be presented at the annual meeting; however, such shares will be considered present at the annual meeting for purposes of determining the existence of a quorum.

Q: What vote is required to approve each item?

A: The election of directors will be decided by plurality vote, that is, the three nominees receiving the highest number of affirmative votes will be elected. The say-on-pay proposal and the ratification of the appointment of our independent registered public accounting firm will be decided by a majority of votes actually cast. All other matters properly brought before the annual meeting for a vote of shareholders will be decided by a majority of the votes actually cast.

Abstentions and broker non-votes will have no effect on the voting calculations for any of the proposals.

Q: How do I vote?

A: You may vote submit your proxy and/or voting instructions for your shares of our common stock by using any of the following methods:

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Proxy card or voting instruction card: Be sure to complete, sign and date your proxy card or voting instruction card and return it in the prepaid envelope provided.

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By telephone or Internet: Shareholders of record cannot vote by telephone or Internet. The availability of telephone and Internet voting for beneficial owners will depend on the voting processes of your broker, bank or other nominee. Therefore, we recommend that you follow the instructions on how to submit your voting instruction in the materials you receive from your broker, bank or other nominee.

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In person at the annual meeting: All shareholders may vote in person at the annual meeting. You may also be represented by another person at the annual meeting by executing a proper proxy designating that person as your representative. If you are a beneficial owner of shares of our common stock, you must obtain a legal proxy from your broker, bank or other nominee and present it to the inspectors of election with your ballot when you vote at the annual meeting.

Q: Can I revoke or change my voting instructions after I deliver my proxy?

A: Yes. Your proxy may be revoked or changed at any time before it is exercised by filing with our Secretary an instrument revoking it or a duly executed proxy bearing a later date, or by attending the annual meeting and voting in person. Your attendance alone at the annual meeting will not be enough to revoke your proxy.

Q: Who pays for soliciting proxies?

A: We pay all expenses incurred in connection with the solicitation of proxies for the annual meeting. We will also request banks, brokers, and other nominees holding shares of our common stock beneficially owned by others to send these proxy materials and 2013 annual report to, and obtain voting instructions from, the beneficial owners and will reimburse such shareholders of record for their reasonable expenses in so doing. Solicitation of proxies by mail may be supplemented by telephone, email and other electronic means, advertisements and personal solicitation by our directors, officers and employees. No additional compensation will be paid to directors, officers or employees for such solicitation efforts.

Q: Could other matters be decided at the annual meeting?

A: Our Board does not expect to bring any other matter before the annual meeting, and it is not aware of any other matter that may be considered at the annual meeting. In addition, the time has passed for any shareholder to properly bring a matter before the annual meeting. The enclosed proxy will, however, confer discretionary authority with respect to any other matter that may properly come before the annual meeting or any adjournment thereof. It is the intention of the person(s) named in the enclosed proxy to vote any shares of our common stock for which he has a proxy to vote at the annual meeting in accordance with his best judgment on any such matter.

Q: What happens if the annual meeting is postponed or adjourned?

A: Unless a new record date is fixed, your proxy will be valid and may be voted at the annual meeting, whether postponed or adjourned. You will still be able to change or revoke your proxy until your shares of our common stock are voted.

Q: I share an address with another shareholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?

A: Some banks, brokers and other nominees are “householding” our proxy materials for their customers. This means that only one copy of our proxy materials may have been sent to multiple shareholders in your household. We will promptly deliver a separate copy of any of these proxy materials and the 2013 annual report to you if you call us at (713) 714-6100 or write to us at: Gulf Island Fabrication, Inc., 16225 Park Ten Place, Suite 280, Houston, Texas 77084.

If you would like to receive separate copies of our annual report and proxy statement in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other nominee or you may contact us at the above address and telephone number.

Shareholder Proposals and Nominations for 2015 annual meeting

Any shareholder who wishes to bring a matter, other than shareholder nominations of directors, before the 2015 annual meeting must notify our Secretary, in writing at the address shown on the first page of this proxy statement, no later than January 28, 2015. However, if the date of the 2015 annual meeting is changed by more than 30 calendar days from the date of the anniversary of the 2014 annual meeting, the notice must be received by our Secretary at least 45 days prior to the date we intend to distribute our proxy materials with respect to the 2015 annual meeting. If a shareholder does not provide such notice timely, proxies solicited on behalf of our Board for the 2015 annual meeting will confer discretionary authority to vote with respect to any such matter, as permitted by the proxy rules of the Securities and Exchange Commission (the “SEC”).

Shareholders intending to nominate a director for consideration at the 2015 annual meeting of shareholders may do so if they comply with our Amended and Restated Articles of Incorporation by furnishing timely written notice containing specified information concerning, among other things, information about the nominee and the shareholder making the nomination. See “Corporate Governance—Consideration of Director Nominees” for more information. To be timely, any shareholder who wishes to nominate a director for consideration at the 2015 annual meeting must notify our Secretary, in writing at the address shown on the first page of this proxy statement, no later than January 28, 2015, unless we provide less than 55 days’ notice of the 2015 annual meeting then the shareholder must provide notice to our Secretary no later than ten days following the date on which such notice of the 2015 annual meeting was given.

Any shareholder who desires to submit a proposal for inclusion in our proxy materials for the 2015 annual meeting must forward the proposal in writing to our Secretary at the address shown on the first page of this proxy statement in time to arrive no later than November 14, 2014, and the proposal must comply with applicable federal proxy rules.

Corporate Governance

Board Structure and Committee Composition; Board Independence; Board and Committee Meetings and Attendance

Our Board currently consists of nine members. Effective January 1, 2013, John P. Laborde assumed the role of Chairman of our Board and effective November 25, 2013, Ken C. Tamblyn resigned as a member of our Board. Upon notice of Mr. Tamblyn’s departure, our Board determined not to fill the vacancy and instead decreased the size of our Board from seven to six members. On March 13, 2014, our Board increased the size of our Board from six to nine members and appointed Messrs. William E. Chiles, Murray W. Burns and Michael J. Keeffe.

Our Board met six times during 2013. Our Board has established two standing committees: the Audit Committee and the Compensation Committee. Each committee operates under a written charter adopted by our Board, and such charters are available on our website at www.gulfisland.com under Investors—Corporate Governance. The composition of each committee is reviewed annually at the meeting of our Board following the annual meeting of shareholders. During 2013, each of our incumbent directors attended at least 75% of the aggregate of the total number of meetings of our Board and the total number of meetings held by all committees of our Board on which he served during the periods of his Board membership and committee service.

Director Emeritus—Alden J. (Doc) Laborde

Upon his retirement, our Board appointed Mr. Alden J. (Doc) Laborde as director emeritus in honor of his position as co-founder of the Company and his service on our Board for over 25 years. Mr. Laborde, upon invitation of our Board, has the privilege to receive notice of and to attend regular meetings of our Board and its committees. Mr. Laborde serves at the pleasure of our Board, is not entitled to vote on any matter brought before our Board or its committees and is not considered a director of the Company for any purpose. Mr. Laborde receives attendance fees for attending the meetings of our Board and its committees.

Board Independence

Our Board determined that all of our directors who served during 2013 and each of the directors appointed on March 13, 2014 (Messrs. Chiles, Burns and Keeffe) are “independent” as such term is defined in the NASDAQ Stock Market LLC (“NASDAQ”) listing standards, except for Mr. Meche. In making this determination, our Board evaluated responses to a questionnaire completed by each director regarding relationships and possible conflicts of interest between each director, the Company and management. In its review of director independence, our Board considered all commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships any director may have with the Company or management. Kirk J. Meche, President and Chief Executive Officer during 2013, was not independent as defined by NASDAQ’s listing standards.

Audit Committee

The Audit Committee currently consists of the following three directors: Gregory J. Cotter (Chairman), John P. (Jack) Laborde and Michael A. Flick. Each of these directors is “independent” as such term is defined in the NASDAQ listing standards, and also satisfies the additional requirements applicable to an audit committee member under the NASDAQ listing standards. Our Board has determined that Mr. Flick is an “audit committee financial expert” as such term is defined within the applicable rules of the SEC.

The Audit Committee met five times during 2013. The Audit Committee’s primary function is to assist our Board in fulfilling its oversight responsibilities by monitoring (i) the continued development and performance of our system of financial reporting, accounting, auditing, disclosure controls and procedures and internal control over financial reporting, (ii) the operation and integrity of our financial reporting system, (iii) the performance and qualifications of our independent registered public accounting firm (external auditors) and internal auditors, (iv) the independence of our independent registered public accounting firm (external auditors), and (v) risk assessment.

Compensation Committee

The Compensation Committee currently consists of the following five directors: Gregory J. Cotter, John P. (Jack) Laborde (Chairman), Jerry D. Dumas, Sr. Michael A. Flick and Christopher M. Harding. Each of these directors is “independent” as such term is defined in the NASDAQ listing standards, and also satisfies the additional requirements applicable to a compensation committee member under the NASDAQ listing standards. The Compensation Committee met four times during 2013. The Compensation Committee (i) reviews, approves and recommends to our Board goals and objectives relating to the compensation of our officers and the compensation of the president of each of our subsidiaries (including the specific relationship of corporate performance to such officers’ compensation), (ii) evaluates at least annually the performance of our officers and the performance of the vice president and general manager of each of our subsidiaries in light of these goals and objectives, (iii) recommends to our Board the compensation of our officers and the compensation of the vice president and general manager of each of our subsidiaries based on such evaluations, (iv) grants awards under our incentive compensation plans and programs, (v) otherwise administers our incentive compensation plans and programs, and (vi) performs such other functions as may be prescribed by our Board.

The Compensation Committee seeks the input of our Chief Executive Officer in connection with performance evaluations and compensation decisions for our executive officers; however, our Chief Executive Officer is not present when the Compensation Committee meets to evaluate his performance nor when our Board determines his compensation. The terms of our stock incentive plans permit the Compensation Committee to delegate to appropriate personnel its authority to make awards to employees other than those subject to Section 16 of the Exchange Act. However, the Compensation Committee has not delegated this authority to any individual.

Board Leadership Structure

Jack Laborde serves as Chairman of our Board and Kirk Meche serves as President and Chief Executive Officer. We separated the positions of chairman of the board and chief executive officer effective January 1, 2013 in connection with the retirement of Mr. Chauvin who served as both Chairman of our Board and Chief Executive Officer. Our Board determined that separation of these roles would maximize management’s efficiency by allowing the Chief Executive Officer to focus on our day-to-day business and the Chairman of our Board to lead the Board of Directors in its fundamental role of providing guidance to and oversight of management. While our By-laws and corporate governance guidelines do not require the chairman of the board and chief executive officer positions to be separate, our Board believes that having separate positions is the appropriate leadership structure for the Company at this time. Our Board, however, periodically reviews the leadership structure and may make such changes in the future as it deems appropriate.

During 2013, each of the directors other than Mr. Meche were determined to be independent and our Board believes that the independent directors provided effective oversight of management. Moreover, in addition to feedback provided during the course of meetings of our Board, the independent directors are given the opportunity to meet in executive session after each regular meeting of our Board or more frequently, as needed. During 2013, Mr. J. Laborde, an independent director and Chairman of our Board, served as chairperson for all of the executive sessions of independent directors and acted as the liaison between the independent directors and the Chief Executive Officer.

In addition, our two standing committees are composed entirely of independent directors, and have the power and authority to engage legal, financial and other advisors as they may deem necessary, without consulting or obtaining the approval of the full Board or management.

Board’s Role in Risk Oversight

Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including economic, environmental and regulatory risks, as well as risks associated with the impact of competition and weather conditions. Management is responsible for the day-to-day

management of risks we face, while our Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, our Board has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.

The Board conducts certain risk oversight activities through its committees, which oversee specific areas and provide reports to the full Board regarding such committee’s considerations and actions. The Audit Committee reviews and considers financial, accounting, internal controls and regulatory compliance risks, including those that could arise from our accounting and financial reporting processes. The Audit Committee also reviews and monitors risks through various reports presented by our internal auditors and our registered public accounting firm (external auditors). The Compensation Committee reviews and considers risks related to our compensation policies, including incentive plans, to determine whether those plans subject the Company to excessive risks. Senior management attends the quarterly meetings of our Board and is available to address any questions or concerns raised by our Board on risk management topics and any other matters.

Consideration of Director Nominees

Our Board has elected not to have a separate nominating committee. Our Board made this determination after considering its nomination process and concluding that as many directors as possible should participate in that process. As stated above, our Board has determined that all of our current directors are independent except for Mr. Meche, who has served as Chief Executive Officer since January 1, 2013 and President since January 2009. Accordingly, our Board has decided that nominations of directors and related matters will be considered and voted upon by all of the independent directors while meeting in executive session. In this manner, should the proposed slate of directors be elected, all but one of the current directors will have been involved in the nominations process.

In evaluating the suitability of nominees for membership on our Board, the independent directors consider many factors, including personal and professional integrity, general understanding of and particular operational experience in the construction and oil and gas industries, finance and other elements relevant to the success of a publicly-traded company in today’s business environment, educational and professional background, independence and an ability and willingness to work cooperatively with other members of our Board and with our senior management. The independent directors evaluate each individual in the context of our Board as a whole, with the objective of nominating persons for election to our Board who can best perpetuate the success of our business, be an effective director in conjunction with our full Board, and represent shareholder interests through the exercise of sound judgment.

The independent directors will regularly assess the appropriate size of our Board, and whether any vacancies on our Board are expected due to retirement or otherwise and whether such vacancies should be filled. In the event that any vacancies are anticipated, or otherwise arise, the independent directors will consider various potential candidates for director who may come to the attention of our Board through current members of our Board, professional search firms, shareholders or other persons. Each candidate brought to the attention of our Board is considered on the basis of the criteria set forth above. During 2013, we had one resignation from our Board. Upon notice of his departure, our Board determined not to fill the vacancy and instead decreased the size of our Board from seven to six members. On March 13, 2014, our Board increased the size of our Board from six to nine members and appointed Messrs. Chiles, Burns and Keeffe.

As set forth in our Corporate Governance Guidelines, our Board is open to suggestions from our shareholders on candidates for nomination for election to our Board. Any shareholder may suggest a nominee by sending the following information to our Board: (i) the proposing shareholder’s name, address and telephone number, (ii) the number of shares of our common stock beneficially owned by the proposing shareholder and the suggested nominee, (iii) the suggested nominee’s name, age, business and residential addresses and telephone number, (iv) a statement whether the suggested nominee knows that his or her name is being suggested by the proposing shareholder, and whether he or she has consented to being suggested and is willing to serve, (v) the

suggested nominee’s résumé or other description of his or her background and experience, and (vi) the proposing shareholder’s reasons for suggesting that the individual be considered. The information should be sent to the independent directors of our Board addressed as follows: Secretary of Gulf Island Fabrication, Inc., 16225 Park Ten Place, Suite 280, Houston, Texas 77084, and our Secretary will forward the information to the independent directors.

Our Amended and Restated Articles of Incorporation also permit shareholders to directly nominate directors for consideration at an annual shareholder meeting. In general, to be timely, a shareholder’s notice must be in writing, must include certain specified information about the nominee and the shareholder making the nomination, and must be received by our Secretary at our principal executive offices no less than 45 days or more than 90 days prior to the shareholder meeting.

Communications with our Board; 2013 Annual Meeting Attendance by Directors

Any shareholder may communicate with our Board (or with any individual director) by sending a letter by mail addressed to the Chairman of the Board of Directors of Gulf Island Fabrication, Inc., 16225 Park Ten Place, Suite 280, Houston, Texas, 77084. The Chairman of our Board will forward the shareholder’s communication directly to the appropriate director or directors.

Our Board has adopted a policy that recommends that all directors personally attend each annual and special meeting of our shareholders. At the last annual meeting of shareholders held on April 25, 2013, all seven of the members of our Board at the time were in attendance.

Ethics and Business Conduct Policies

We have adopted a Code of Ethics for our Chief Executive Officer and senior financial officers and a Code of Business Conduct and Ethics, which applies to all employees and directors, including our Chief Executive Officer and senior financial officers. These codes are posted on our website at www.gulfisland.com under Investors—Corporate Governance. Any substantive amendments to the Code of Ethics or any waivers granted under the Code of Ethics will be disclosed within four business days of such event on our website.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than 10% shareholders are required by the regulations of the SEC to furnish the Company with copies of all Section 16(a) reports they file. Based solely on our review of copies of such reports and written representations from our officers and directors that no other reports were required for those persons, we believe that all of our officers, directors and greater than 10% shareholders complied with the filing requirements applicable to such persons for the fiscal year ended December 31, 2013.

Compensation Committee Interlocks and Insider Participation

During 2013, none of Messrs. John P. (Jack) Laborde (Chairman), Gregory J. Cotter, Jerry D. Dumas, Sr., Michael A. Flick or Christopher M. Harding, who comprised the Compensation Committee, were officers or employees of the Company or any of its subsidiaries or had any relationships requiring disclosure in this proxy statement under “Certain Transactions,” and none of our executive officers served as a member of the compensation committee of another entity or as a director of another entity, one of whose executive officers served on the Compensation Committee or our Board. No member of the Compensation Committee is a former officer of the Company.

Director Compensation

Beginning in 2013, we use a combination of cash and equity-based incentive compensation to attract and retain qualified candidates to serve on our Board. In setting director compensation, we consider the significant amount of time directors dedicate in fulfilling their duties as directors, as well as the skill-level required by the Company to be an effective member of our Board. For 2013, the form and amount of director compensation was reviewed by our full Board, which includes Mr. Meche, our President and Chief Executive Officer.

Cash Compensation

For service as a director during 2013, each non-employee director, except Messrs. Cotter, Laborde and Tamblyn, received an annual fee of $22,000 for his services as a director. Mr. Cotter, as Chairman of the Audit Committee, and Mr. Tamblyn, as the Audit Committee Financial Expert, each received an annual fee of $24,000, which, in the case of Mr. Tamblyn, was prorated based on the amount of time he served as a director during 2013. In March, 2013, our Board approved an annual retainer of $65,000 for Mr. J. Laborde for serving as Chairman of the Board, effective January 1, 2013. In addition, each non-employee director received an attendance fee of $2,000 for each meeting of our Board and its committees attended, including Mr. A. Laborde as a director emeritus. Beginning April 1, 2013, in connection with his increased retainer fee, the Chairman of our Board no longer receives attendance fees in addition to his retainer fee. All directors are reimbursed for reasonable out-of-pocket expenses incurred in attending meetings of our Board and its committees, including Mr. A. Laborde as a director emeritus.

Equity-Based Compensation

Beginning in 2013, each non-employee director also received equity-based compensation under our stock incentive plans, which were approved by our shareholders. On April 25, 2013, the non-employee directors were each granted 1,000 shares of restricted stock, which vested on October 25, 2013. In addition, on December 6, 2013, each of the five then current non-employee directors, Messrs. Cotter, Dumas, Flick, Harding and J. Laborde, were granted 2,000 restricted stock units (RSUs), which vest on June 6, 2014, six months after the date of grant. Upon vesting, each RSU entitles the non-employee director, at his sole option, to receive either (i) one share of our common stock or (ii) in lieu of a share of our common stock, up to fifty percent (50%) of the fair market value of the share of our common stock in cash. We expect to continue to make one annual grant of RSUs to our non-employee directors.

2013 Director Compensation

The table below summarizes the compensation paid in 2013 to each person serving as a director during 2013, with the exception of Mr. Meche. Mr. Meche did not receive any compensation as a director and his compensation as an executive of the Company is fully reflected in the 2013 Summary Compensation Table on page 22.


Name	Fees Earned or Paid in Cash ($)(1)		Stock Awards ($)(2)		Total ($)
Gregory J. Cotter		58,000		67,880		125,880
Jerry D. Dumas, Sr.		46,000		67,880		113,880
Michael A. Flick		58,000		67,880		125,880
Christopher M. Harding		46,000		67,880		113,880
John P. Laborde		71,000		67,880		138,880
Ken C. Tamblyn (3)		43,667		20,400		64,067

(1)	Reflects fees earned by the directors during 2013 for their service on our Board and its committees, if any, which includes fees paid for each director’s service during the fourth quarter of 2013 paid during 2014.

(2)

Reflect the aggregate grant date fair value of the restricted stock and RSUs. Restricted stock and RSUs are valued on the date of grant at the closing sale price per share of our common stock. On April 25, 2013, each non-employee director was granted 1,000 restricted stock, which had a grant date fair value of $20.40 per share of restricted stock. In addition, on December 6, 2013, each of our then-current non-employee directors, Messrs. Cotter, Dumas, Flick, Harding and J. Laborde, was granted 2,000 RSUs, which had a grant date fair value of $23.74 per units of restricted stock. As of December 31, 2013, each of Cotter, Dumas, Flick, Harding and J. Laborde had 2,000 RSUs outstanding.

(3)	Effective November 25, 2013, Mr. Tamblyn resigned as a member of our Board. Mr. Tamblyn’s annual fee for serving as the Audit Committee Financial Expert was prorated based on the amount of time he served as a director during 2013.

**********************************

PROPOSAL 1: ELECTION OF DIRECTORS

Our Amended and Restated Articles of Incorporation provide for a Board of Directors consisting of three classes, with the number of directors to be set forth in our By-laws. Effective April 26, 2012, our Board approved an amendment to our By-laws to allow for the number of directors constituting the entire Board of Directors to be a range of not less than three nor more than twelve, with the exact number of directors to be fixed by a duly adopted resolution of the Board of Directors. The size of our Board is currently set at nine directors. The term of office of the Class II directors will expire at the annual meeting, and, in accordance with the recommendations of the independent directors, our Board has nominated the three persons listed as the Class II director nominees in the table below for election to our Board for a term expiring in 2017.

Proxies cannot be voted more than one time for each of the three director nominees named in this proxy statement. In the unanticipated event that any nominee is unavailable as a candidate for director, the persons named in the accompanying proxy will vote your shares of our common stock for a substitute candidate nominated by our Board.

Under our By-Laws, directors are elected by a plurality vote, with the three Class II director nominees who receive the most votes being elected.

Our Board recommends that shareholders vote FOR the election of the three Class II director nominees named in this proxy statement.

Information about the Directors, Director Nominees and Executive Officers

The following table sets forth, as of March 6, 2014, for each director nominee, each other director of the Company whose term will continue after the annual meeting and each of our executive officers, the age, any positions with the Company, and principal occupations and employment during the past five years, any family relationships among such persons, and, if a director nominee or a director, each such person’s directorships in other public corporations during the past five years and the year that such person was first elected a director of the Company or our predecessor. We have also included information about each director and director nominee’s specific experience, qualifications, attributes, or skills that led the independent directors of our Board to conclude that such person should serve as one of our directors at the time we file this proxy statement, in light of our business and structure. All executive officers serve at the pleasure of our Board.


Name and Age	Positions with the Company, Principal Occupations, Directorships in Other Public Companies, and Family Relationships	Director Since

Nominees for Election as Class II Directors (term expires in 2017)

Gregory J. Cotter, 65	Wealth Management Consultant since 2009. Employed by Huey Wilson Interest, Inc., a business management service company, and its affiliates in various executive capacities, including Director, President, Chief Operating Officer and Chief Financial Officer from 1989 through 2008. Director, President, and Chief Operating Officer of a publicly traded multibank holding company from 1986 to 1988. Senior Vice-President and Chief Financial Officer of H.J. Wilson Co. Inc., a publicly traded retailer, from 1977 to May 1985. Mr. Cotter’s extensive career in the banking and financial industries provided him with a knowledge of financial reporting, accounting and controls as well as a knowledge of operations making him highly qualified to lead the Audit Committee as Chairman and serve as a member of the Compensation Committee and our Board.		1985

John P. (Jack) Laborde, 64	Chairman of our Board since 2013. President of Overboard Holdings, L.L.C. (Overboard), a management company engaged in oil and gas exploration and development since January 2002. President since 1997 of All Aboard Development Corporation (All Aboard), an independent oil and gas exploration and production company. All Aboard is currently being managed by Overboard. Employed by the Company from 1992 until 1996 in various capacities, including International Marketing Manager. Prior to 1992, he worked as an engineer for Exxon Corporation and in various capacities for Ocean Drilling & Exploration Company and Murphy Oil Corporation. Son of Alden J. (Doc) Laborde, co-founder of the Company, former director and current director emeritus. Mr. Laborde’s knowledge of engineering, construction and oil and gas operations as well as his experience managing and overseeing the expansion of businesses makes him a valued member as Chairman of our Board, Chairman of the Compensation Committee and as a member of the Audit Committee.		1997


Name and Age	Positions with the Company, Principal Occupations, Directorships in Other Public Companies, and Family Relationships	Director Since

Christopher M. Harding, 62	Vice President Horton Wison Deepwater, a technology development company for the offshore and marine industries, since 2012. Executive Vice President G.L. Noble Denton from 2009 until 2012. Independent Consultant from 2004 until 2009. President of the engineering division of Technip USA from 1999 to 2004. Founder and President of Genesis Oil & Gas Consultants, a privately-owned consulting and engineering company servicing both independent and major oil and gas companies, from 1988 until acquired by Technip USA in 1998. Mr. Harding’s experience in the engineering and construction industries and in international operations gives him the skills necessary to serve as a member of our Board and the Compensation Committee.		2007

Continuing Class III Directors (term expires in 2015)

Jerry D. Dumas, Sr., 78	Private investor. Chairman of the Board, President and Chief Executive Officer from 1998 to 2009 and non-executive Chairman of the Board from 2009 to 2010 of Flotek Industries. Vice President of Corporate and Executive Services of Merrill Lynch from 1988 to 1998. Served in various capacities, including Group Division President of Hughes Tool Company (now Baker Hughes Incorporated), a position responsible for the offshore division and the drilling fluids and chemical group, from 1968 to 1985. Mr. Dumas’s extensive career in the financial and oil and gas industries as well as his experience managing a publicly traded company provided him with knowledge of risk management, finance and operations and makes him a valued member of our Board and the Compensation Committee.		2011

Kirk J. Meche, 51	Chief Executive Officer of the Company since 2013. President of the Company since 2009 and Chief Operating Officer from 2009 to 2012. Executive Vice President—Operations of the Company from 2001 to 2009. President and Chief Executive Officer of Gulf Marine Fabricators, L.P., a wholly-owned fabrication subsidiary of the Company, from February 2006 to October 2006. President and Chief Executive Officer of Gulf Island, L.L.C., a wholly-owned fabrication subsidiary of the Company, from 2001 until 2006. President and Chief Executive Officer of Southport, Inc., a wholly-owned fabrication subsidiary of the Company, from 1999 to 2001. Project Manager of the Company from 1996 to 1999. Held various engineering positions for J. Ray McDermott and McDermott, Inc. from 1985 to 1996. Mr. Meche’s experience in the energy and marine construction industries, in particular his over 18 years of experience in various leadership roles with the Company and 29 years in the industry, provides him with knowledge of managing operations and overseeing the expansion of business making him highly qualified to serve as a member of our Board.		2012


Name and Age	Positions with the Company, Principal Occupations, Directorships in Other Public Companies, and Family Relationships	Director Since

Michael J. Keeffe, 61	Prior to his retirement in 2011, Mr. Keeffe was a Senior Audit Partner with Deloitte & Touche LLP. He has 35 years of public accounting experience at Deloitte & Touche directing financial statement audits of public companies, principally in the oil field service and engineering and construction industries, most with significant international operations. He also served as a senior risk management and quality assurance partner in the firm’s consultation network. He is a Certified Public Accountant and holds a Bachelor of Arts and a Masters of Business Administration both from Tulane University. We believe Mr. Keeffe is a valuable member of the Board because of his extensive accounting and financial expertise, particularly in our industry and related industries.		2014

Continuing Class I Directors (term expires in 2016)

Michael A. Flick, 65	Private Investor. Member of the Board of Directors, Audit Committee and Governance and Nominating Committee of the Bristow Group, Inc. From 1970 to 1998 employed by First Commerce Corporation and First National Bank of Commerce, its wholly-owned subsidiary, in various executive capacities including Chief Financial Officer and Chief Credit Policy Officer and Executive Vice President and Chief Administrative Officer. Mr. Flick’s experience in the banking and financial services industries provided him with extensive knowledge of financial reporting, legal and audit compliance and risk management making him highly qualified to serve as a member and financial expert of the Audit Committee, the Compensation Committee and our Board.		2007

William E. Chiles, 65	President, CEO and a director of Bristow Group, Inc. since 2004. From 2003 to 2004, served as Executive Vice President and COO of Grey Wolf Inc., a publically traded onshore oil & gas drilling company. In 1977, co-founded Chiles Offshore Inc. (formerly, Chiles Drilling Company) and served as President and CEO until its merger with ENSCO International Incorporated (ENSCO) in 2002. From 2002 to 2003, served as Vice President of Business Development of ENSCO. In 1992, founded Southwestern Offshore Corporation and served as CEO and President until acquired by Cliffs Drilling Company (Cliffs) in 1996. From 1996 to 1997, served as Senior Vice President—Drilling Operations of Cliffs. Prior to 1977, worked as VP—Domestic Operations at Western Oceanic, Inc. as well as various other capacities. Mr. Chiles serves on the board of directors of Basic Energy Services. We believe Mr. Chiles is a valuable member of the Board because of his broad international experience and knowledge of the oil and gas industry and our customer base, as well as his executive experience with various publicly traded companies.		2014


Name and Age	Positions with the Company, Principal Occupations, Directorships in Other Public Companies, and Family Relationships	Director Since

Murray W. Burns, 68	Project management, engineering, and business development consultant through MBurns Consulting since 2013. From 1980 to 2013, employed by Technip USA, Inc. and its affiliates in various executive capacities, including Vice President—Offshore Business Unit, Vice President—Topsides and Fixed Platforms, Vice President—Engineering Operations, Vice President—Engineering, President and COO (Technip Upstream Houston, Inc.) and Vice President. From 1976 to 1980, Project Manager, Group Manager, Manager of Facilities and Supervising Engineer with Petro-Marine Engineering, Inc. Prior to 1976, worked in various engineering capacities at Shell Oil Company. Mr. Burns experience in the engineering and offshore fabrication industries provides valuable insight and makes him highly qualified to serve as a member of our Board.		2014

Current Executive Officers not Serving as Directors

Jeffrey Favret, 52	Vice President of Finance, Chief Financial Officer and Treasurer since May 2013. Mr. Favret has worked with companies in oil and gas exploration and production, vessel construction, offshore drilling construction and offshore vessel/marine transportation industries, among others. Mr. Favret previously served as Director of Finance, Energy Infrastructure Segment, of FMC Technologies, Inc., a leading global provider of technology solutions for the energy industry, from May 2012 to May 2013. Mr. Favret also served as the Chief Accounting Officer for Trico Marine Services, Inc., a provider of marine support vessel and subsea services to the offshore oil and gas industry, from April 2010 to May 2012. Prior to that, Mr. Favret served as Director (Partner) of the accounting firm Postlethwaite & Netterville, after serving in various roles at Ernst & Young in its Assurance and Advisory practice.		N/A

Todd F. Ladd, 47	Chief Operating Officer as of February 2014. Mr. Ladd previously served as Vice President and General Manager of the Company since July 2013. Mr. Ladd has over 25 years industry experience in the offshore fabrication sector. From 2001 to 2013, Mr. Ladd served as Senior Project Manager with Paloma Energy Consultants, an offshore construction project management firm. From 1996 to 2001, Mr. Ladd served as Project Manager for Gulf Island LLC. Mr. Ladd also served as Production Engineer and Facility Engineer at McDermott Marine Construction from 1996 to 1998.		N/A

Stock Ownership

The following table sets forth, as of March 6, 2014, certain information regarding beneficial ownership of shares of our common stock by (i) each of our current directors and director nominees, (ii) each of our named executive officers, (iii) all of our director nominees and current directors and executive officers as a group, and (iv) each other shareholder known by us to be the beneficial owner of more than 5% of our outstanding common stock. Unless otherwise indicated, we believe that the shareholders listed below have sole investment and voting power with respect to their shares of our common stock based on filings with the SEC and/or information furnished to us by such shareholders.


Name of Beneficial Owner	Number of Shares Beneficially Owned(1)			Shares Percentage of Outstanding Common Stock(2)
Directors, Director Nominees and Named Executive Officers:
Roy F. Breerwood, III (5)		1,902			*
Murry W. Burns		—			*
William E.Chiles		—			*
Gregory J. Cotter		6,000			*
Jerry D. Dumas		3,056			*
Jeffrey M. Favret		8,000			*
Michael A. Flick		1,500			*
Christopher M. Harding		1,500			*
Michael J. Keeffe		—			*
John P. Laborde (3)		11,000			*
Todd F. Ladd		10,000			*
Kirk J. Meche		72,612			*
All director nominees and current directors and executive officers of the Company as a group (11 persons) (4)(5)		113,668			*
5% or Greater Shareholders:
BlackRock, Inc. (6)		1,251,014	(7)		8.6	%
Dimensional Fund Advisors LP (8)		937,943	(9)		6.5	%
Heartland Advisors, Inc. (10)
William J. Nasgovitz		1,544,655	(11)		10.7	%
Alden J. Laborde (12)		1,060,452	(13)		7.3	%
T. Rowe Price Associates, Inc. (14)
T. Rowe Price Small-Cap Stock Fund, Inc.		1,803,230	(15)		12.4	%

*	Less than one percent.

1.	Includes unvested shares of restricted stock and shares of our common stock that could be acquired within sixty days after March 6, 2014, upon the exercise of stock options granted pursuant to our stock incentive plans, including Mr. Meche: 10,000 shares of our common stock.

In addition, each non-employee director holds 2,000 RSUs, vesting June 6, 2014, which are not included in the table above.

2.	Based on 14,497,908 shares of our common stock outstanding as of March 6, 2014.

Mr. J. Laborde has sole voting and dispositive power with respect to 11,000 shares of our common stock. This amount does not include: (i) 3,371 shares held in trust for his benefit, (ii) his indirect interest in the shares of our common stock held by Starboard Enterprises, L.L.C. (Starboard) and All Aboard Development Corporation (All Aboard) as a result of his ownership interest in those entities, which interests equate to an aggregate of 118,922 shares of our common stock, of which (a) 1,115,135 shares of our common stock are held by Starboard and relate to his interest in Starboard held in trust for his benefit and (b) 1,769 shares of our common stock are held by Starboard and are attributable to his direct ownership in Starboard and (c) 1,998 shares of our common stock are held by All Aboard and relate to his interest in All Aboard held in trust for his benefit and (d) 20 shares of our common stock are held by All Aboard and are attributable to his

direct ownership in Overboard Holdings, LLC, the parent company of All Aboard and (iii) 100,000 shares of our common stock held by the Almar Foundation, a charitable Louisiana trust of which Mr. J. Laborde serves as a trustee and as to which shares he disclaims beneficial ownership.

4.	Includes our director nominees and current directors and executive officers as of March 6, 2014.

Effective April 5, 2013, Roy F. Breerwood, III, resigned as our Vice President of Finance, Chief Financial Officer and Treasurer. Accordingly, the number of shares of common stock beneficially owned by Mr. Breerwood is not included in the total number of shares beneficially owned by all director nominees and current directors and executive officers of the Company as a group.

6.	The address of BlackRock, Inc. is 40 East 52^nd Street, New York, New York 10022.

7.	Based on information contained in the Schedule 13G/A filed with the SEC on January 29, 2014 by BlackRock, Inc.

8.	The address of Dimensional Fund Advisors LP is Palisades West, Building One, 6300 Bee Cave Road, Austin, Texas, 78746.

Based on information contained in the amended Schedule 13G filed with the SEC on February 10, 2014, all of the shares reported are owned by investment advisory clients of Dimensional Fund Advisory LP (Dimensional Fund). To Dimensional Fund’s knowledge, no such client has an interest relating to more than 5% of our outstanding common stock. As investment advisor, Dimensional Fund has (i) sole voting power with respect to 909,511 shares of our common stock and (ii) sole dispositive power with respect to 937,943 all of the shares reported. Dimensional Fund expressly disclaims beneficial ownership.

10.	The address of Heartland Advisors, Inc. (Heartland) and William J. Nasgovitz is 789 North Water Street, Milwaukee, Wisconsin 53202.

11.

Based on information contained in the amended Schedule 13G jointly filed with the SEC on February 6, 2014, all of the shares reported are owned by investment advisory clients of Heartland Advisors, Inc. To Heartland’s knowledge, no such client has an interest relating to more than 5% of our outstanding common stock. As investment advisor, the reporting persons have shared investment and dispositive power with respect to all of the shares reported. Heartland expressly disclaims beneficial ownership.

12.	The address of Mr. Laborde is 601 Poydras Street, Suite 1726, New Orleans, LA, 70130.

13.

Mr. A. Laborde has sole voting and dispositive power with respect to 15,752 shares of our common stock and shares voting and dispositive power with respect to 1,004,700 shares of our common stock, of which 884,700 shares of our common stock are held by Starboard, 20,000 shares of our common stock are held by All Aboard and 100,000 shares of our common stock are held by the Almar Foundation, a charitable Louisiana trust of which Mr. A. Laborde serves as a trustee and as to which shares he disclaims beneficial ownership. As a result of the settlement of Mr. A. Laborde’s deceased spouse’s estate, certain of the shares of our common stock and interest in the companies mentioned above that were owned by Mr. and Mrs. A. Laborde were transferred to trusts for the benefit of their descendants.

14.	The address of T. Rowe Price Associates, Inc. and T. Rowe Price Small-Cap Stock Fund, Inc. is 100 E. Pratt Street, Baltimore, Maryland, 21202.

15.

Based on information contained in the amended Schedule 13G jointly filed with the SEC on February 7, 2014, all of the shares reported by T. Rowe Price Associates, Inc. (Price Associates) are owned by investment advisory clients of and such clients have the right to receive dividends from and proceeds from the sale of the shares of our common stock. With respect to the shares reported to be owned by T. Rowe Price Small-Cap Stock Fund, Inc. (T. Rowe Price Fund), a registered investment company sponsored by Price Associates to which it also serves as investment advisor, only State Street Bank and Trust Company, as custodian for T. Rowe Price Fund, has the right to receive dividends paid with respect to, and proceeds from the sale of, such shares. To Price Associates’ knowledge, no other advisory client has an interest relating to more than 5% of our outstanding common stock. As investment advisor, Price Associates has (i) sole voting power with respect to 328,660 shares of common stock and (ii) sole dispositive power with respect to all of the shares, reported and T. Rowe Price Fund has sole voting power over 800,000 shares.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Introduction

This section of the proxy statement describes and analyzes our executive compensation philosophy and program in the context of the compensation paid during the last fiscal year to our chief executive officer, each person serving as our chief financial officer during 2013, and our chief operating officer (our “named executive officers”). Our fiscal 2013 named executive officers are:

•

Kirk J. Meche, President and Chief Executive Officer;

•

Jeffrey Favret, Vice President of Finance, Treasurer and Chief Financial Officer;

•

Roy F. Breerwood, III, former Vice President of Finance, Treasurer and Chief Financial Officer;

•

Todd F. Ladd, Vice President and Chief Operating Officer.

In this CD&A, we first provide an Executive Summary of our actions and highlights from 2013. We next explain the principles that guide our Compensation Committee’s (the committee) executive compensation decisions and the process we follow when setting executive compensation. Finally, we discuss each component of executive compensation, including the actual results yielded for each named executive officer in fiscal 2013. You should read this section of the proxy statement in conjunction with the advisory vote that we are conducting on the compensation of our named executive officers (see proposal 2), as it contains information that is relevant to your voting decision.

Executive Summary

The committee is committed to and responsible for designing, implementing, and administering a compensation program for executive officers that ensures appropriate linkage among pay, Company performance, and results for shareholders, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking. The committee seeks to increase shareholder value by rewarding performance with cost-effective compensation and ensuring that we can attract and retain the best executive talent available. While our executive officer compensation program is simple in design, we believe it serves the Company well by providing a mix of annual cash compensation, including base salary and performance based annual incentive awards, with long-term awards in the form of restricted stock.

We experienced an increase in production activity in 2013, and our consolidated income before taxes, for the year ended December 31, 2013 (the financial metric used to determine a portion of the annual cash incentives awarded to our named executive officers) was approximately $11.5 million. As a result and consistent with our pay-for-performance philosophy, our named executive officers who were employed by the Company at the end of the year received an annual cash incentive award for 2013 under this component of our annual incentive program. Additionally, awards were earned under the safety component of the program by two of our named executive officers.

As more fully described in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our Annual Report on Form 10-K, we continue to believe demand for deepwater and marine related projects will be driven by this increased production activity. In the long term, demand for our products and services will continue to depend largely upon prices for oil and gas and the capital outlay decisions of oil and gas exploration and production companies, which is difficult to predict. Our primary focus continues to be managing contract costs, particularly those associated with maintaining our labor force, as we and our customers face increasing challenges associated with developing and fabricating complex projects, particularly for use by oil and gas customers in deepwater locations. To that end, during the first quarter, 2013, we began implementing new tracking and reporting procedures and have hired key executives and additional staff in order to more effectively monitor and control the progress, efficiency and safety on our projects. While we believe these efforts have positively impacted our ability to better manage projects, these initiatives remain in the early stages of implementation.

All of our employment relationships with our named executive officers, including our Chief Executive Officer, are at-will relationships. Although the committee has considered the use of employment agreements at the executive level in the past, it does not believe such agreements would provide any appreciable retentive or motivational value. In addition, except for limited benefits available to certain executives in connection with a termination due to a change in control, we do not provide severance or retirement benefits to our executives other than those provided to all of our employees generally.

Compensation Decision-Making Process

In 2013, the Compensation Committee engaged Aon Hewitt as a compensation consultant to review compensation practices and policies. Compensation consultants have direct access to Compensation Committee members and participate in Compensation Committee meetings, as requested by the Compensation Committee Chairman. They may also provide compensation data and advice to management with the knowledge and consent of the Compensation Committee. Although we have not formally benchmarked our compensation to the compensation paid by our peers and competitors, we have designed our executive compensation program based on our general understanding of the compensation paid in the energy and marine construction industry. Our Chief Executive Officer attends the committee’s meetings, assists in the committee’s evaluation of Company and executive officer performance (other than himself), and recommends the specific elements and amounts of compensation to be paid to the other executive officers. Our Chief Executive Officer is not present or otherwise involved when the committee reviews his performance and develops recommendations regarding his compensation.

The committee typically meets at the end of each fiscal year to review the performance of the Company and its executives. This meeting is generally scheduled approximately one year in advance, and is scheduled to fall within a window period in which directors and officers are permitted to trade following the release of our earnings for the third quarter of the year. At this meeting, all compensation recommendations are made, including recommendations regarding adjustments to the annual base salaries of the executive officers, the adoption of a cash incentive program for the following fiscal year, and whether any equity awards will be made. The committee has not delegated authority to any officer to grant equity awards. The Board of Directors typically makes compensation decisions based on the committee’s recommendations during its first quarter meeting in February or March.

Consideration of Say-on-Pay Vote Results

At our 2013 annual meeting, we held a non-binding shareholder advisory vote on executive compensation (“say-on-pay”). Our shareholders approved our fiscal 2012 executive compensation, with more than 95% of voting shareholders casting their vote in favor of the say-on-pay resolution, excluding abstentions and broker non-votes which are not considered votes cast. Because certain fiscal 2013 compensation decisions had already been made at the time of the vote (executive base salary adjustments and the structure of the annual cash incentive program), the committee primarily considered the results of the 2013 say-on-pay vote relating to fiscal 2012 executive compensation, along with recommendations from our compensation consultant, among other factors for purposes of setting executive annual base salaries for fiscal 2014. The Compensation committee is currently reviewing annual and long-term incentive compensation components with the assistance of a compensation consultant. In making executive compensation decisions for fiscal 2014, the committee will consider, among other factors, our shareholders’ support for our executive compensation program and the committee’s satisfaction with the fiscal 2013 pay mix and levels. The committee will continue to consider our shareholders’ views when making executive compensation decisions in the future.

Components of Executive Compensation

Our executive officer compensation program for 2013 included (i) salaries, (ii) annual cash incentive bonuses, and (iii) long-term incentive compensation in the form of restricted stock. The committee reviewed and

quantified all components of our named executive officers’ compensation, including salary, non-equity and equity incentive plan compensation, accumulated realized and non-realized stock option gains, and the incremental cost to the Company of all perquisites and other benefits for 2013, and determined that such officers’ total compensation in the aggregate is reasonable and not excessive.

Salaries. Our philosophy is that base salaries, which provide fixed compensation, should meet the objective of attracting and retaining the executive officers needed to manage our business successfully. The actual salaries of our named executive officers are based on their individual levels of responsibility and the committee’s general knowledge of the competitive compensation levels in the energy and marine construction industry. In 2013, the Committee approved a 38% base salary increase for Mr. Meche, which is commensurate with increased levels of responsibilities with his promotion to Chief Executive Officer. Both Messrs. Ladd and Favret commenced employment in 2013. For 2014, the committee approved base salary increases for our executive officers as follows: Mr. Meche—11%, Mr. Favret—6%, and Mr. Ladd—27%. Mr. Ladd’s increase is commensurate with increased levels of responsibility associated with his promotion to Chief Operations Officer. All increases were primarily driven by the need to retain key executives during a period of record activity for the Company. The current base salary of each of our named executive officers is as follows: Mr. Meche—$500,000, Mr. Favret—$340,000, Mr. Ladd—$350,000.

Annual Cash Incentives. For 2013, we did not have a formal bonus plan, but adopted an annual incentive program that ties a portion of executive compensation to the annual financial and safety performance of the Company. Under the financial component, our executive officers are paid bonuses equal to a specified percentage of our consolidated income before taxes and before deduction of the executive bonuses based on each officer’s level of responsibility. The committee believes consolidated income before taxes is an appropriate measure on which to base our annual bonus because the level of income before taxes generated is directly tied to management’s success in growing our business. In December 2012, the committee set the participation percentage of our named executive officers in this program for 2013, except for Mr. Favret and Mr. Ladd, whose respective percentage interests were set at date of hire. The participation percentages for 2013 were as follows:


Named Executive Officer	% of Consolidated Income Before Taxes
Mr. Meche		0.86	%
Mr. Favret		0.67	%
Mr. Ladd		0.53	%
Mr. Breerwood		0.67	%

These percentages were based on each officer’s position with the Company, and the committee retains the right to reduce or eliminate these payments prior to payout. Our consolidated income before taxes for 2013 was $11.5 million, and as a result the annual incentive awards received by our named executive officers under the financial component were as follows: Mr. Meche—$234,351 Mr. Favret—$115,601 Mr. Ladd—$71,864.

Our annual incentive program includes a safety component for our named executive officers other than our Chief Financial Officer in recognition of the importance that we and our customers place on this element of our operations. The safety component is measured based on the safety performance of the Company and the applicable subsidiaries and each of Messrs. Meche and Ladd were eligible for a potential bonus of up to 20% of the officer’s annual base salary.

For 2013, 50% of the safety component was based on the level of lost time accidents (LTA) and the other 50% was based on the total recordable incident rate (TRIR) of the applicable subsidiary, with the Chief Executive Officer and Chief Operating Officer’s results being determined by the worst subsidiary safety performance during the year. In the event of a fatality, no portion of the safety component would be paid for such fiscal year. The portion of the safety component based on the level of LTA was reduced 50% for each lost time accident incurred by the subsidiary and was reduced to zero if two or more were incurred for the year. The

portion of the safety component based on the TRIR was earned as follows: 1.00 TRIR or less = 100%; TRIR between 1.01 and 1.50 = 75%; TRIR between 1.51 and 2.00 = 50% and a TRIR 2.01 and above results in no TRIR portion of the safety component for the year.

The annual incentive awards received by our named executive officers for 2013 pursuant to the safety component were as follows:


Named Executive Officer	Safety Award		Subsidiary LTA		% LTA Achieved		Subsidiary TRIR		% TRIR Achieved
Mr. Meche	$	33,750		2		0		1.14		75
Mr. Ladd		10,313		2		0		1.14		75

Restricted Stock. In December 2013, the committee awarded annual grants of restricted stock. The committee has utilized restricted stock as a long-term incentive vehicle for the past six years. The committee believes use of restricted stock as an equity compensation vehicle is consistent with the grant practices of our competitors and peers in the energy and marine construction industry. The restricted stock grants are intended to reinforce the relationship between compensation and increases in the market price of our common stock and to align the executive officers’ financial interests with that of our shareholders. The size of annual awards is based upon the position of each participating officer and remained consistent in 2013 as compared to the previous year. We did not target a particular grant value when making these awards.

These annual awards of restricted stock vest in annual 20% increments, beginning on the first anniversary of the date of grant. Dividends will be paid on the restricted stock to the same extent dividends are paid on unrestricted shares of our common stock.

Each of Messrs. Meche, Favret and Ladd also received a pro-rated grant of restricted stock on his date of promotion (Mr. Meche) or hire date (Messrs. Favret and Ladd). In 2013, the following restricted stock awards were granted to named executive officers: Mr. Meche—13,200 shares; Mr. Favret—8,000 shares, Mr. Ladd—10,000 shares. The restricted stock awards to named executive officers included both pro-rated grants and annual grants.

Perquisites. We also provide very limited perquisites and personal benefits to certain of our named executive officers, consisting of automobile related expenses and benefits. However, the aggregate value of these benefits for our named executive officers did not exceed $10,000 for any executive during 2013.

Relocation Incentive. A relocation incentive was paid to Mr. Meche and other key personnel, in regard to relocation to our corporate headquarters in Houston, Texas. These relocation benefits were necessary as part of the strategic move of our corporate headquarters, enabling our company to retain key personnel, and facilitate a smooth and orderly transition from Houma, LA to Houston, TX. The value of these benefits for our named executive officers during 2013 is reported below in the Summary Compensation Table, and is included in All Other Compensation.

Post-Employment Compensation

We maintain a retirement plan qualified under Section 401(k) of the Internal Revenue Code that is available to all qualified employees. Our named executive officers participate in this retirement plan under the same terms as eligible employees. In addition, we currently have change of control agreements with all of our named executive officers. We believe that severance protections, when provided in the context of a change of control transaction, can play a valuable role in attracting and retaining key executives. The occurrence, or potential occurrence, of a change of control transaction can create uncertainty regarding the continued employment of our executive officers, in particular those officers whose primary functions relate to management of the parent company. This uncertainty occurs because many change of control transactions result in significant

organizational changes, particularly at the senior executive level. In order to encourage our executive officers to remain employed with the Company during a critical time when their prospects for continued employment following the transaction are often uncertain, we have elected to provide severance benefits if their employment is terminated by the Company without cause or, in limited circumstances, by the executive for good reason in connection with a change of control. Because we believe that a termination by the executive for good reason may be conceptually the same as a termination by the Company without cause, and because we believe that in the context of a change of control, potential acquirers would otherwise have an incentive to constructively terminate the executive’s employment to avoid paying severance, we believe it is appropriate to provide severance benefits in these circumstances. We do not provide excise tax gross-up protections in change of control arrangements.

The benefits provided to our named executive officers in connection with a termination following a change of control are described below under “Potential Payments upon Termination or Change of Control.” We do not believe that our executive officers should be entitled to receive cash severance benefits merely because a change of control transaction occurs. The payment of cash severance benefits is only triggered by an actual or constructive termination of employment following a change of control (i.e. a “double trigger”). Under their respective incentive agreements, however, our named executive officers would be entitled to accelerated vesting of their outstanding equity awards automatically upon a change of control of the Company, whether or not the officer’s employment is terminated. This treatment of the equity awards in connection with a change of control applies to all award recipients, not just our named executive officers.

Section 162(m)

Section 162(m) of the Internal Revenue Code limits the tax deduction to $1 million for compensation paid to certain highly compensated executive officers. Qualified performance-based compensation is excluded from this deduction limitation if certain requirements are met. The committee does not expect the base salary, annual cash incentive or the restricted stock granted to executive officers, as discussed above, to qualify for the exclusion from the deduction limitation under Section 162(m); however, the level of compensation currently paid to our executive officers does not often implicate the Section 162(m) limit absent special one-time benefits such as the relocation benefits paid to Mr. Meche in 2013. The committee intends to continue to establish executive officer compensation programs that will maximize our income tax deduction, assuming the committee determines that such actions are consistent with its philosophy and in the best interest of the Company and our shareholders.

Compensation Committee Report

The Compensation Committee of our Board has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management, and based on such review and discussions, the Compensation Committee recommended to our Board that the Compensation Discussion and Analysis be included in this proxy statement.

Submitted by the committee on March 11, 2014.


John P. Laborde		Gregory J. Cotter		Jerry D. Dumas, Sr.		Michael A. Flick		Christopher M. Harding

Executive Compensation Tables

The table below summarizes the total compensation paid to or earned by our named executive officers. The amounts represented in the “Stock Awards” column reflect the estimated fair value of the stock awards on the grant date and do not necessarily reflect the income that will ultimately be realized by our named executive officers for these awards.

2013 Summary Compensation Table


Name and Principal Position	Year		Salary ($)(1)		Stock Awards ($)(2)		Non-Equity Incentive Plan Compensation ($)(3)		All Other Compensation ($)(4)(5)		Total ($)
Kirk J. Meche President and Chief Executive Officer		2013 2012 2011		450,000 325,000 310,000		317,240 158,576 193,324		268,101 16,250 —		285,205 9,690 9,555		1,320,546 509,529 512,879
Jeffrey Favret Vice President of Finance Chief Financial Officer and Treasurer		2013		203,741		174,280		115,601		4,070		497,692
Roy F. Breerwood, III (6) Former Vice President of Finance; Chief Financial Officer and Treasurer		2013 2012		57,102 169,000		— 120,070		— —		2,300 6,836		59,402 295,912
Todd F. Ladd Vice President and General Manager		2013		137,506		217,100		82,177		392		437,175

(1)	For Mr. Meche, amount reflects his annual base salary, For each other named executive officer, amounts reflect annual base salary pro-rated for his service with the Company during 2013.

(2)	Amounts shown reflect the aggregate grant date fair value of restricted stock granted during the applicable fiscal year. The grant date fair value of restricted stock is the closing price of our common stock on the date of the grant.

(3)	See “Grants of Plan-Based Awards” below for a description of our annual incentive compensation program.

(4)	For 2013, includes (i) matching and profit-sharing contributions to our 401(k) plan and (ii) premium payments under a long-term disability insurance plan, which premium payments are attributable to benefits in excess of those benefits provided generally for other employees, as set forth below:


Name	401(k) Plan Contributions		Disability Insurance Premiums
Mr. Meche		8,131		940
Mr. Favret		3,600		470
Mr. Breerwood		2,003		297
Mr. Ladd		—		392

(5)	Included in Mr. Meche’s all other compensation for 2013 was a relocation bonus of $276,118.38. This was paid as part of our overall effort to relocate our corporate office to Houston, Texas.

(6)	As previously disclosed, effective April 5, 2013, Mr. Breerwood resigned as Vice President—Finance, Chief Financial Officer and Treasurer of the Company. Mr. Breerwood received compensation through the date of his resignation at his then-current annual base salary.

*************************

Grants of Plan-Based Awards

in Fiscal Year 2013


Name	Grant Date		Estimated Possible Payouts Under Non-Equity Incentive Plan Awards		All Other Stock Awards: Number of Shares of Stock or Units		Grant Date Fair Value of Stock and Option Awards
Name	Grant Date		Target ($)		All Other Stock Awards: Number of Shares of Stock or Units		Grant Date Fair Value of Stock and Option Awards
Kirk J. Meche
Annual Cash Incentive:
—Financial Component (1)		—		—		—		—
—Safety Component (2)		—		16,250		—		—
Restricted Stock Grants (4)		1/1/13		—		3,200		79,840
		12/6/13		—		10,000		237,400

Jeffrey Favret
Annual Cash Incentive:
—Financial Component (1)		—		—		—		—
—Safety Component (2)		—		—		—		—
Restricted Stock Grants (4)		5/13/13		—		4,000		79,320
		12/6/13		—		4,000		94,960

Roy F. Breerwood, III (3)
Annual Cash Incentive:
—Financial Component		—		—		—		—
—Safety Component		—		—		—		—
Restricted Stock Grants		—		—		—		—

Todd F. Ladd
Annual Cash Incentive:
—Financial Component (1)		—		—		—		—
—Safety Component (2)		—		—		—		—
Restricted Stock Grants (4)		7/1/13		—		5,000		98,400
		12/6/13		—		5,000		118,700

(1)

Under our annual incentive compensation program, our executive officers received awards equal to a specified percentage of our consolidated income before taxes for fiscal year 2013, before deduction of the executive bonuses. There are no threshold or maximum estimates. The estimated possible payouts reflected above represent amounts that would be payable to our named executive officers under our annual incentive compensation program based on fiscal year 2012 performance, which would have yielded no payout.

(2)

The estimated possible payouts reflected above represent amounts that would be payable to our named executive officers under our safety bonus program based on fiscal year 2012 performance, which would have yielded no payout. The amounts actually paid to our named executive officers for 2013 pursuant to this non-equity incentive plan are reflected in the 2013 Summary Compensation Table.

(3)	As previously disclosed, effective April 5, 2013, Mr. Breerwood resigned as Vice President—Finance, Chief Financial Officer and Treasurer of the Company, and as such, did not receive any grants under our plans during 2013.

(4)	Each of Messers. Meche, Favret and Ladd received a pro-rated grant of restricted stock on his date of promotion (Mr. Meche) or date of hire (Messers. Favret and Ladd).

*************************

Outstanding Equity Awards at December 31, 2013

As of December 31, 2013, our named executive officers had the following outstanding equity awards.


	Option Awards (1)								Stock Awards
Name	Date of Grant		Number of Securities Underlying Unexercised Options (#) Exercisable		Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)(2)		Market Value of Shares or Units of Stock That Have Not Vested ($)
Kirk J. Meche		12/10/04		10,000		21.85		12/10/2014		25,440		590,717
Jeffrey Favret		—		—		—		—		8,000		185,760
Roy F. Breerwood, III (3)		—		—		—		—		—		—
Todd F. Ladd		—		—		—		—		10,000		232,200

(1)	Options vest in 20% increments beginning on the first anniversary of the grant date, and on each of the four subsequent anniversaries thereof.

(2)	The unvested shares of restricted stock held by the named executive offices will vest as set forth below:


Name	Shares of Restricted Stock		Vesting Schedule
Mr. Meche		680	100% on February 9, 2014
		680	100% on December 4, 2014
		1,360	50% on December 1, 2014 and on the next anniversary thereof
		4,080	33% on November 30, 2014 and on each of the two subsequent anniversaries thereof
		5,440	25% on December 7, 2014 and on each of the three subsequent anniversaries thereof
		3,200	20% on January 1, 2014 and on each of the four subsequent anniversaries thereof
		10,000	20% on December 6, 2014 and on each of the four subsequent anniversaries thereof

Mr. Favret		4,000	20% on May 13, 2014 and on each of the four subsequent anniversaries thereof
		4,000	20% on December 6, 2014 and on each of the four subsequent anniversaries thereof

Mr. Ladd		5,000	20% on July 1, 2014 and on each of the four subsequent anniversaries thereof
		5,000	20% on December 6, 2014 and on each of the four subsequent anniversaries thereof

(3)

As previously disclosed, effective April 5, 2013, Mr. Breerwood resigned as Vice President—Finance, Chief Financial Officer and Treasurer of the Company. As a result of his resignation, all of his outstanding shares of restricted stock were forfeited and he was given thirty days to exercise his outstanding stock options, and, therefore, had no outstanding equity awards as of December 31, 2013.

*************************

Option Exercises and Stock Vested

During Fiscal Year 2013

The following table sets forth certain information regarding the vesting of restricted stock during the fiscal year ended December 31, 2013 for each of the named executive officers. There were no stock option exercises during 2013.


	Stock Awards
Name	Number of Shares Acquired on Vesting (#)		Value Realized on Vesting ($)(1)
Kirk J. Meche		4,760		117,830
Jeffrey Favret		—		—
Roy F. Breerwood		200		4,560
Todd F. Ladd		—		—

(1)	Value Realized is determined by reference to the closing market price of the shares of our common stock on the vesting date.

*****************************

Potential Payments upon Termination or Change-of-Control

Pursuant to the terms of our stock incentive plans and the agreements thereunder, in the event of a change of control, all outstanding unvested stock options, if any, will become exercisable and the restrictions on all shares of restricted stock will lapse. Currently, none of our named executive officers hold any unvested options.

Change of Control Agreement—Mr. Meche In January 2013, we entered into a change of control agreement with Mr. Meche. This agreement entitles Mr. Meche to receive additional benefits in the event of the termination of his employment under certain circumstances following a change of control. The agreement provides that if, during the 24-month period following a change of control, the Company or its successor terminates Mr. Meche other than by reason of death, disability or cause, the executive will receive:

•

any accrued but unpaid salary and a pro-rata bonus for the year in which he was terminated;

•

a lump-sum cash payment equal to 2.0 times the sum of (a) Mr. Meche’s base salary in effect at the time of termination and (b) the highest annual bonus awarded to Mr. Meche during the three fiscal years immediately preceding the termination date; and

•

continuation of insurance and welfare benefits until the earlier of (a) December 31 of the first calendar year following the calendar year of the termination or (b) the date Mr. Meche accepts new employment.

Change of Control Agreement—Messrs. Favret and Ladd. In May 2013, we entered into a change of control agreement with Mr. Favret, and in July 2013, we entered into a change of control agreement with Mr. Ladd. These agreements entitle each executive to receive additional benefits in the event of the termination of his employment under certain circumstances following a change of control. Each agreement provides that if, during the 18-month period following a change of control, the Company or its successor terminates the executive other than by reason of death, disability or cause, the executive will receive:

•

any accrued but unpaid salary and a pro-rata bonus for the year in which he was terminated;

•

a lump-sum cash payment equal to 1.5 times the sum of (a) the executive’s base salary in effect at the time of termination and (b) the highest annual bonus awarded to the executive during the three fiscal years immediately preceding the termination date; and

•

continuation of insurance and welfare benefits until the earlier of (a) December 31 of the first calendar year following the calendar year of the termination or (b) the date the executive accepts new employment.

In addition, all of the above described agreements also provide that if the executive terminates his employment during the respective protected period following a change of control by reason of death, disability or retirement, the Company or its successor shall pay to the executive any accrued but unpaid salary and a pro-rata bonus for the year in which he was terminated. The pro-rata bonus shall be calculated based on the average of the annual bonuses received by the executive in the three most recently completed fiscal years prior to the termination date, and multiplying such amount by the fraction obtained by dividing the number of days in the year through the date of termination of termination by 365. Also, all of the above described agreements provide that any payments under such agreement may be offset by any damages owed to the Company for the executive’s breach of his nondisclosure and proprietary rights covenant contained in such agreement.

The above described change of control agreements with Messrs. Meche, Favret, and Ladd expired on December 31, 2013. Effective January 1, 2014, we entered into new change of control agreements with Messrs. Meche, Favret, and Ladd to replace the expired agreements, each with substantially similar terms to the expired agreements.

The benefits provided under the agreements are in addition to the value of any shares of restricted stock, the vesting of which is accelerated pursuant to the terms of the restricted stock agreement, and any other incentive or similar plan adopted by the Company.

If any part of the payments or benefits received by the executive in connection with a termination following a change of control constitutes an excess parachute payment under Section 4999 of the Internal Revenue Code, the executive will receive the greater of (1) the amount of such payments and benefits reduced so that none of the amount constitutes an excess parachute payment, net of income taxes, or (2) the amount of such payments and benefits, net of income taxes and net of excise taxes under Section 4999 of the Internal Revenue Code.

The following table quantifies the potential payments to our named executive officers under the contracts, arrangements or plans discussed above, for a change of control or termination of employment of each of our named executive officers, assuming a December 31, 2013 termination date, and where applicable, using the closing price of our common stock of $23.22 (as reported on the Nasdaq as of December 31, 2013). The table does not include amounts that may be payable under our 401(k) plan, or amounts that are not accelerated as a result of the termination or change of control, such as accrued salary or pro-rata bonus payments.


Name	Lump Sum Severance Payment		Restricted Stock (Unvested and Accelerated)(1)		Health Benefits		Total
Kirk J. Meche
• Termination w/o Cause/For Good Reason after Change of Control (2)	$	1,436,202	$	560,066	$	13,529	$	2,009,797
Jeffrey Favret
• Termination w/o Cause/For Good Reason after Change of Control (2)		653,402		185,760		13,529		852,691
Todd F. Ladd
• Termination w/o Cause/For Good Reason after Change of Control (2)		535,783		232,200		13,529		781,512

(1)	The restricted stock will vest upon a change of control alone regardless of subsequent termination. The value of the restricted stock that would have vested for each of our named executive officer is based on the closing market price on December 31, 2013.

(2)	Pursuant to the terms of the executive’s change of control agreement, the total payments may be subject to reduction if such payments result in the imposition of an excise tax under Section 280G of the Internal Revenue Code.

*****************************

As previously disclosed, effective April 5, 2013, Roy F. Breerwood, III resigned as Vice President—Finance, Chief Financial Officer and Treasurer of the Company. As a result of his resignation, all of his outstanding shares of restricted stock were forfeited and he was given thirty days to exercise his outstanding stock options.

Certain Transactions

In accordance with the provisions of our Audit Committee Charter, any transaction which would require disclosure under Item 404(a) of Regulation S-K of the rules and regulations of the SEC, with respect to a director or executive officer, must be reviewed and approved, or ratified, annually by the Audit Committee of our Board. Any such related party transactions will only be approved or ratified if the Audit Committee determines that such transaction will not impair the involved person’s service to, and exercise of judgment on behalf of, the Company, or otherwise create a conflict of interest that would be detrimental to the Company.

In connection with the initial public offering of our common stock, we entered into a registration rights agreement with Alden J. Laborde, co-founder of the Company, former director and current director emeritus. If we propose to register any of our common stock under the Securities Act in connection with a public offering,

Mr. A. Laborde may require us to include all or a portion of the shares of our common stock held by him. We have agreed under the registration rights agreement to pay all the expenses of registration, other than underwriting discounts and commissions.

PROPOSAL 2: ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED

EXECUTIVE OFFICERS

The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010, requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the rules of the SEC. This vote is not intended to address any specific item of compensation but rather the overall compensation of our named executive officers and our compensation philosophy and practices as disclosed under the “Executive Compensation” section of this proxy statement. This disclosure includes the Compensation Discussion and Analysis and the executive compensation tables and accompanying narrative disclosures.

At last year’s annual meeting, we provided our stockholders with the opportunity to cast a non-binding advisory vote regarding the compensation of our named executive officers as disclosed in our proxy statement for our 2013 annual meeting of stockholders. Our stockholders approved the “say-on-pay” proposal, with approximately 98% of the total votes cast voted for the proposal. We are again asking our stockholders to vote on the following resolution:

RESOLVED, that the shareholders of Gulf Island Fabrication, Inc. (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in the proxy statement for the Company’s 2014 annual meeting of shareholders pursuant to Item 402 of Regulation S-K of the rules of the Securities and Exchange Commission.

We understand that executive compensation is an important matter for our shareholders. Our core executive compensation philosophy and practice continue to be based on pay for performance, and we believe that our compensation program is strongly aligned with the long-term interests of our shareholders. In considering how to vote on this proposal, we encourage you to review all the relevant information in this proxy statement—our Compensation Discussion and Analysis (including its Executive Summary), the executive compensation tables, and the rest of the narrative disclosures regarding our executive compensation program.

While this advisory vote, commonly referred to as a “say-on-pay” vote, is not binding, our Board and the Compensation Committee value the opinion of our shareholders and will consider the outcome of the vote when making future compensation decisions for our named executive officers. Following the recommendation of our stockholders at our 2011 annual meeting, we will hold a “say-on-pay” vote at each annual meeting until the next required vote of our stockholders regarding the frequency of “say-on-pay.” We invite shareholders who wish to communicate with our Board on executive compensation or any other matters to contact us as provided under “Corporate Governance—Communication with our Board.”

Approval of this proposal requires the affirmative vote of at least a majority of the votes cast at the annual meeting. See “Questions and Answers about the Annual Meeting and Voting.”

Our Board unanimously recommends that you vote to approve the compensation of our named executive officers as disclosed in this proxy statement by voting FOR this proposal.

Audit Committee Report

The Audit Committee of the Board of Directors of Gulf Island Fabrication, Inc. (the “Company”) is composed of three directors and operates under a written charter adopted by the Board of Directors, which is posted on the Company’s website at www.gulfisland.com under Investors—Corporate Governance. The current members of the Audit Committee, Gregory J. Cotter (Chairman), John P. Laborde, and Michael A. Flick are independent as such term is defined under the NASDAQ listing standards.

We review the Company’s financial reporting process on behalf of the Board of Directors. We are responsible for monitoring this process, but we are not responsible for preparing the Company’s financial statements or auditing those financial statements. Those are the responsibilities of management and the Company’s independent registered public accounting firm, respectively.

During 2013, management assessed the effectiveness of the Company’s system of internal control over financial reporting in connection with the Company’s compliance with Section 404 of the Sarbanes-Oxley Act of 2002. We reviewed and discussed with management, PricewaterhouseCoopers LLP (the Company’s internal auditors) and Ernst & Young LLP (“E&Y”) (the Company’s independent registered public accounting firm) management’s report on internal control over financial reporting and E&Y’s report on their audit of the Company’s internal control over financial reporting, both of which are included in the Company’s annual report on Form 10-K for the year ended December 31, 2013.

Appointment of the Company’s Independent Registered Public Accounting Firm; Financial Statement Review

In April 2013, in accordance with the Audit Committee’s charter, we appointed Ernst & Young LLP as the Company’s independent registered public accounting firm for 2013. We have reviewed and discussed the Company’s audited financial statements for the 2013 fiscal year with management and E&Y. Management represented to us that the audited financial statements fairly present, in all material respects, the financial condition, results of operations and cash flows of the Company as of and for the periods presented in the financial statements in accordance with accounting principles generally accepted in the United States, and E&Y provided an audit opinion to the same effect.

We have received from E&Y the written disclosures and the letter required by Rule 3526 of the Public Company Accounting Oversight Board, Communication with Audit Committees Concerning Independence and we have discussed with them their independence from the Company and management. We have also discussed with E&Y the matters required to be discussed by PCAOB Auditing Standard No. 16—Communication with Audit Committees (PCAOB Release No. 2012-004, August 15, 2012), effective pursuant to SEC Release No. 34-68453 (December 17, 2012).

In addition, we discussed with E&Y the overall scope and plans for their audit, and we have met with E&Y and management to discuss the results of E&Y’s examination, E&Y’s understanding and evaluation of the Company’s internal controls as E&Y considered necessary to support its opinion on the financial statements for the 2013 fiscal year, and various factors affecting the overall quality of accounting principles applied in the Company’s financial reporting. E&Y also met with the Audit Committee without management being present to discuss these matters.

In reliance on these reviews and discussions, we recommended to the Board of Directors, and the Board of Directors approved, the inclusion of the audited financial statements referred to above in the Company’s annual report on Form 10-K for the year ended December 31, 2013.

Internal Audit

We also review the Company’s outsourced internal audit function, and discuss with the internal auditors the scope of their audit plan, and have met with the internal auditors to discuss the results of their reviews, their review of management’s documentation, testing and evaluation of the Company’s system of internal control over financial reporting, any difficulties or disputes with management encountered during the course of their reviews and other matters relating to the internal audit process. The internal auditors were also given the opportunity to meet with the Audit Committee without management being present to discuss these matters.

Dated: March 11, 2014

The Audit Committee:


Gregory J. Cotter, Chairman		John P. Laborde		Michael A. Flick

Independent Registered Public Accounting Firm

Fees and Related Disclosures for Accounting Services

The following table discloses fees billed to us for services provided by our independent registered public accounting firm, Ernst & Young LLP, for each of the last two fiscal years:


	2013		2012
Audit Fees	$	425,624	$	437,885
Audit-Related Fees		—		—
Tax Fees		—		—
All Other Fees		—		—

The Audit Committee has considered and determined that the provision of the above services is compatible with maintaining the independence of our independent registered public accounting firm.

Pre-Approval Policies and Procedures. The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm. The Audit Committee will generally pre-approve a list of specific services and categories of services, including audit, audit-related and tax services, for the upcoming or current fiscal year, subject to a specified cost level. Any service that is not included in the approved list of services must be separately pre-approved by the Audit Committee in increments of $10,000. In addition, if fees for any service exceed the amount that has been pre-approved, then payment of additional fees for such service must be specifically pre-approved by the Audit Committee.

At each regularly-scheduled Audit Committee meeting, management updates the Audit Committee on the scope and anticipated cost of any service pre-approved by the Audit Committee since the last meeting of the Audit Committee, as well as the projected fees for each service or group of services being provided by our independent registered public accounting firm.

Since the May 6, 2003 effective date of the SEC rules stating that an auditor is not independent of an audit client if the services it provides to the client are not appropriately approved, each service provided by our independent registered public accounting firm was approved in advance by the Audit Committee, and none of those services required use of the de minimis exception to the pre-approval requirement contained in the SEC’s rules.

PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

Ernst & Young LLP has served as our independent registered public accounting firm providing auditing and financial services since their engagement in fiscal year 1997. Our Board has ratified the decision of the Audit Committee to appoint Ernst & Young LLP to serve as our independent registered public accounting firm to audit our financial statements for the year ending December 31, 2014. Although we are not required to seek shareholder approval of this appointment, we have decided to do so. No determination has been made as to what action the Audit Committee and our Board would take if our shareholders fail to ratify the appointment. Even if the appointment is ratified, the Audit Committee retains discretion to appoint a new independent registered public accounting firm at any time if the Audit Committee concludes such a change would be in the best interests of the Company. We expect that representatives of Ernst & Young LLP will be present at the annual meeting and will have the opportunity to make a statement if they desire to do so. They will also be available to respond to appropriate questions.

Approval of this proposal requires the affirmative vote of at least a majority of the votes cast at the annual meeting. See “Questions and Answers about the Annual Meeting and Voting.”

Our Board unanimously recommends that you vote for the ratification of the appointment of our independent registered public accounting firm.

By Order of the Board of Directors

LOGO

DEBORAH KERN-KNOBLOCK

Secretary

Houma, Louisiana

March 14, 2014

ANNUAL MEETING OF SHAREHOLDERS OF

GULF ISLAND FABRICATION, INC.

April 24, 2014

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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE THREE CLASS II DIRECTOR NOMINEES LISTED BELOW, FOR THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AND FOR THE RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY IN THE ENVELOPE PROVIDED. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x

FOR

AGAINST

ABSTAIN

1. Election of the three Class II director nominees.

To approve, on an advisory basis, the compensation of our named executive officers;

NOMINEES:

To ratify the appointment of our independent registered public accounting firm; and

FOR ALL NOMINEES

O Gregory J. Cotter

O Christopher M. Harding

To transact such other business as may properly come before the annual meeting and any adjournments thereof.

WITHHOLD AUTHORITY

FOR ALL NOMINEES

O John P. “Jack” Laborde

Please complete, sign, date and return this proxy card promptly using the envelope provided.

FOR ALL EXCEPT

(See instructions below)

INSTRUCTIONS: To withhold authority to vote for any individual director nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each director nominee you wish to withhold, as shown here: l

To change the address on your account, please check the box at right and indicate your new address in the space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.

Signature of Shareholder

Date:

Signature of Shareholder

Date:

Note:

Please sign exactly as your name(s) appear on this proxy card. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.


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This Proxy is Solicited on Behalf of the Board of Directors of

GULF ISLAND FABRICATION, INC.

The undersigned hereby constitutes and appoints Kirk J. Meche and Deborah Kern-Knoblock, or either of them, proxy for the undersigned, with full power of substitution, to represent the undersigned and to vote, as designated on the reverse side, all of the shares of Common Stock of Gulf Island Fabrication, Inc. (the “Company”) held of record by the undersigned on March 6, 2014 that the undersigned is entitled to vote at the annual meeting of shareholders of the Company to be held on April 24, 2014 (the “Annual Meeting”), and at all adjournments thereof.

This proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder. If no direction is made on a matter listed on the back of this proxy card, this proxy will be voted as the Board of Directors recommends. The individuals designated above will vote in their discretion on any other matter that may properly come before the Annual Meeting.

(Please See Reverse Side)


¢		14475 ¢