<PAGE>
SCHEDULE 14A INFORMATION STATEMENT
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a (c)
or Section 241.14a-12
INTERNATIONAL SHIPHOLDING CORPORATION
________________________________________________
(Name of Registrant as Specified in its Charter)
____________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which
transaction applies:
_________________________________
2) Aggregate number of securities to which
transaction applies:
_________________________________
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange
Act Rules 0-11 (Set forth the amount on
which the filing fee is calculated and state
how it was determined):
_________________________________
4) Proposed maximum aggregate value of
transaction:
_________________________________
5) Total fee paid:
_________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rules 0-11 (a)(2) and identify the
filing for which the offsetting fee was paid
previously. Identify the previous filing registration
statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
__________________________________
2) Form, Schedule or Registration Statement Number:
________________________________________________
3) Filing Party:
__________________________________
4) Date Filed:
__________________________________
<PAGE>
INTERNATIONAL SHIPHOLDING CORPORATION
17th Floor
Poydras Center
650 Poydras Street
New Orleans, Louisiana 70130
_____________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
_____________________________
TO COMMON STOCKHOLDERS OF INTERNATIONAL SHIPHOLDING CORPORATION:
The annual meeting of stockholders of International Shipholding
Corporation will be held in the Executive Board Room, 17th Floor, Poydras
Center, 650 Poydras Street, New Orleans, Louisiana, on Wednesday, April 15,
1998 at 2:00 p.m., New Orleans time, for the following purposes:
(i) to elect a board of nine directors to serve until the next annual
meeting of stockholders and until their successors are elected and
qualified;
(ii) to consider and vote upon a proposal to approve the International
Shipholding Corporation Stock Incentive Plan;
(iii) to ratify the appointment of Arthur Andersen LLP, certified public
accountants, as independent auditors for the Corporation for the
fiscal year ending December 31, 1998; and
(iv) to transact such other business as may properly come before the
meeting or any adjournment thereof.
Only common stockholders of record at the close of business on
February 27, 1998, are entitled to notice of and to vote at the annual
meeting.
All stockholders are cordially invited to attend the meeting in person.
However, if you are unable to attend in person and wish to have your stock
voted, PLEASE FILL IN, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. Your proxy may be revoked by
appropriate notice to the Secretary of International Shipholding Corporation
at any time prior to the voting thereof.
BY ORDER OF THE BOARD OF DIRECTORS
GEORGE DENEGRE
Secretary
New Orleans, Louisiana
March 10, 1998
<PAGE>1
INTERNATIONAL SHIPHOLDING CORPORATION
17th Floor
Poydras Center
650 Poydras Street
New Orleans, Louisiana
________________________
PROXY STATEMENT
________________________
This Proxy Statement is furnished to stockholders of International
Shipholding Corporation (the "Corporation") in connection with the
solicitation on behalf of the Board of Directors of proxies for use at the
annual meeting of stockholders of the Corporation to be held on Wednesday,
April 15, 1998, at 2:00 p.m., New Orleans time, in the Executive Board
Room, 17th Floor, Poydras Center, 650 Poydras Street, New Orleans, Louisiana.
The approximate date of mailing of this Proxy Statement and the enclosed form
of proxy is March 10, 1998.
Only holders of record of the Corporation's Common Stock at the close
of business on February 27, 1998, are entitled to notice of and to vote at
the meeting. On that date, the Corporation had outstanding 6,682,887 shares
of Common Stock, each of which is entitled to one vote.
The enclosed proxy may be revoked by the stockholder at any time prior
to the exercise thereof by filing with the Secretary of the Corporation a
written revocation or duly executed proxy bearing a later date. The proxy
will be deemed revoked if the stockholder is present at the annual meeting
and elects to vote in person.
The cost of soliciting proxies in the enclosed form will be borne by
the Corporation. In addition to the use of the mails, proxies may be
solicited by personal interview, telephone and telegraph; and banks,
brokerage houses and other institutions, nominees and fiduciaries will be
requested to forward the soliciting material to their principals and to
obtain authorization for the execution of proxies. The Corporation will,
upon request, reimburse such parties for their expenses incurred in
connection therewith.
<PAGE>2
PRINCIPAL STOCKHOLDERS
The following persons were known by the Corporation to own beneficially
more than five percent of its Common Stock (the only outstanding voting
security of the Corporation) as of February 27, 1998 unless otherwise
indicated. The information set forth below has been determined in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934 based upon
information furnished by the persons listed. Unless otherwise indicated, all
shares shown as beneficially owned are held with sole voting and investment
power.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percent
Name and Address Ownership of Class
------------------------ --------------------------------
<S> <C> <C>
Niels W. Johnsen (1)........................ 1,020,595 (2) 15.27%
(Chairman of the Board of the Corporation)
One Whitehall Street
New York, New York 10004
T. Rowe Price Associates, Inc. ............. 859,262 (3) 12.86%
100 E. Pratt Street
Baltimore, Maryland 21202
Erik F. Johnsen (1)......................... 760,260 (4) 11.38%
(President and Director of the Corporation)
650 Poydras Street, Suite 1700
New Orleans, Louisiana 70130
Franklin Resources, Inc. ................... 660,000 (5) 9.88%
777 Mariners Island Blvd.
San Mateo, California 94404
Dimensional Fund Advisors Inc. ............. 481,979 (6) 7.21%
1299 Ocean Avenue
Santa Monica, California 90401
David L. Babson and Company Incorporated.... 453,650 (7) 6.79%
One Memorial Drive
Cambridge, Massachusetts 02142-1300
</TABLE>
_____
(1) Niels W. Johnsen and Erik F. Johnsen are brothers.
(2) Includes 224,622 shares owned by a corporation of which Mr. Johnsen is
a controlling shareholder. Also includes 24,387 shares held in Grantor
Retained Annuity Trusts of which Niels W. Johnsen is income and
principal beneficiary.
(3) Based on information contained in Schedule 13G as of December 31, 1997.
These securities are owned by various individual and institutional
investors including T. Rowe Price Small Cap Value Fund, Inc. (which
owns 664,000 shares, representing 9.9% of the shares outstanding), for
which T. Rowe Price Associates, Inc. (Price Associates) serves as
investment adviser with power to direct investments and/or sole power to
vote the securities. Sole voting power is held only with respect to
33,700 of the shares reported. Sole dispositive power is reported with
respect to all 859,262 shares. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, Price Associates is
deemed to be a beneficial owner of such securities; however, Price
Associates expressly disclaims that it is, in fact, the beneficial owner
of such securities.
(4) Includes 232,319 shares held as Agent and Attorney-in-Fact with full
rights of voting, disposition, or otherwise for the benefit of Erik F.
Johnsen's children and 8,375 shares owned by Mr. Johnsen's wife. Also
includes 505,000 shares held by the Erik F. Johnsen Family Limited
Partnership of which Mr. Johnsen is General Partner with sole voting and
investment power.
<PAGE>3
(5) Based on information contained in a joint filing on Schedule 13G as of
December 31, 1997 by Franklin Resources, Inc. (FRI), Charles B. Johnson,
Rupert H. Johnson, Jr. , and Franklin Advisory Services, Inc. Franklin
Advisory Services, Inc. has sole voting and dispositive power with
respect to all 660,000 shares. FRI is the parent holding company of
Franklin Advisory Services, Inc., an investment advisor. Charles B.
Johnson and Rupert H. Johnson, Jr. are principal shareholders of FRI.
FRI, Charles B. Johnson, Rupert H. Johnson, Jr. and Franklin Advisory
Services, Inc. disclaim any economic interest or beneficial ownership in
any of the shares.
(6) Based on information contained in Schedule 13G as of December 31, 1997.
Includes 353,779 shares beneficially owned with sole voting power. Sole
dispositive power reported with respect to all 481,979 shares.
Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 481,979 shares, all of
which shares are held in portfolios of DFA Investment Dimensions Group
Inc., a registered open-end investment company, or in a series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group
Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund Advisors
Inc. serves as investment manager. Dimensional disclaims beneficial
ownership of all such shares.
(7) Based on information contained in Schedule 13G as of December 31, 1997.
Includes 453,650 shares beneficially owned with sole voting power and
sole dispositive power reported with respect to all 453,650 shares.
As of February 27, 1998, Niels W. Johnsen and Erik F. Johnsen were
the beneficial owners of a total of 1,780,855 shares (26.65%) of the
Corporation's Common Stock, and, to the extent they act together, they may
be deemed to be in control of the Corporation.
<PAGE>4
ELECTION OF DIRECTORS
The by-laws of the Corporation authorize the Board of Directors
to fix the size of the Board. Pursuant thereto, the Board of Directors has
fixed the number of directors at nine and proxies cannot be voted for a
greater number of persons. Unless authority to vote for the election of
directors is withheld, the persons named in the enclosed proxy will vote for
the election of the nine nominees named below to serve until the next annual
meeting and until their successors are duly elected and qualified. In the
unanticipated event that any of the nominees cannot be a candidate at the
annual meeting, the shares represented by the proxies will be voted in favor
of such replacement nominees as may be designated by the Board of Directors.
The following table sets forth certain information as of February 27,
1998, concerning the nominees, all of whom are now serving a one year term
as a director, and all directors and executive officers as a group,
including their beneficial ownership of shares of each class of equity
securities of the Corporation as determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934. Unless otherwise indicated, (i)
each nominee has been engaged in the principal occupation shown for more
than the past five years and (ii) the shares of the Corporation's Common
Stock shown as being beneficially owned are held with sole voting and
investment power. Niels W. Johnsen, Erik F. Johnsen, Laurance Eustis,
Raymond V. O'Brien and Harold S. Grehan, Jr. each first became a director
of the Corporation in early 1979, when the Corporation was formed. Niels
M. Johnsen and Edwin Lupberger became directors in 1988. Edward K.
Trowbridge and Erik L. Johnsen became directors in 1994.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES NAMED
BELOW.
<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION AND SHARES OF COMMON STOCK PERCENT
DIRECTORSHIP IN OTHER PUBLIC CORPORATIONS BENEFICIALLY OWNED OF CLASS
- ------------------------------------------ ---------------------- --------
<S> <C> <C>
Niels W. Johnsen, 75 (1)(2)................. 1,020,595 (10) 15.27%
Chairman of the Board of the Corporation
Erik F. Johnsen, 72 (2)(3).................. 760,260 (11) 11.38%
President of the Corporation; director,
First Commerce Corporation, a bank
holding company
Niels M. Johnsen, 52 (2)(4)................. 301,590 (12) 4.51%
Executive Vice President of the Corporation
Erik L. Johnsen, 40 (2)(5).................. 53,759 (13) .80%
Executive Vice President of the Corporation
Harold S. Grehan, Jr., 70 (6)................ 100,025 1.50%
Laurance Eustis, 84.......................... 15,000 (14) .22%
Chairman of the Board of Eustis Insurance,
Inc., mortgage banking and general insurance;
director, First Commerce Corporation, a bank
holding company; director, Pan American Life
Insurance Company
Edwin Lupberger, 61 (7)...................... 1,249 .02%
Chairman of the Board, Chief Executive
Officer and director of Entergy Corporation
("Entergy") and Entergy Services, Inc. and
its subsidiaries; director, First Commerce
Corporation, a bank holding company
Raymond V. O'Brien, Jr., 70 (8)............... 5,936 .09%
Director, Emigrant Savings Bank, New York
Edward K. Trowbridge, 69 (9) ................. 625 (15) .01%
All executive officers and
directors as a group (12 persons) 1,975,032 29.55%
</TABLE>
__________
(1) Niels W. Johnsen has served as Chairman and Chief Executive Officer of
the Corporation since its formation in 1979. He was one of the founders
of Central Gulf Lines, Inc. ("Central Gulf"), one of the Corporation's
principal subsidiaries, in 1947.
<PAGE>5
(2) Niels W. Johnsen and Erik F. Johnsen are brothers. Niels M.Johnsen is
the son of Niels W. Johnsen. Erik L. Johnsen is the son of Erik F.
Johnsen.
(3) Erik F. Johnsen has been President, Chief Operating Officer and a
director of the Corporation since its formation in 1979. He was one
of the founders of Central Gulf in 1947.
(4) Niels M. Johnsen joined Central Gulf in 1970 and held various positions
before being named Vice President in 1986. In 1997, he was named
Executive Vice President of the Corporation and Chairman and Chief
Executive Officer of each of the Corporation's principal subsidiaries,
except Waterman Steamship Corporation for which he serves as President.
(5) Erik L. Johnsen joined Central Gulf in 1979 and held various positions
before being named Vice President in 1987. In 1997, he was named
Executive Vice President of the Corporation and President and Chief
Operating Officer of each of the Corporation's principal subsidiaries,
except Waterman Steamship Corporation for which he serves as Executive
Vice President.
(6) Mr. Grehan served as Vice President and director of the Corporation
from its formation in 1979 until his retirement at the end of 1997.
(7) Mr. Lupberger has been the Chairman of the Board, Chief Executive
Officer and Director of Entergy since December of 1985.
(8) Mr. O'Brien served as Chairman of the Board and Chief Executive
Officer of the Emigrant Savings Bank from January of 1978 through
December of 1992.
(9) Mr. Trowbridge served as Chairman of the Board and Chief Executive
Officer of Atlantic Mutual Companies from July of 1988 through November
of 1993. He served as President and Chief Operating Officer of the
Atlantic Mutual Companies from 1985 until 1988.
(10) Includes 224,622 shares owned by a corporation of which Niels W.
Johnsen is the controlling shareholder. Also includes 24,387
shares held in a Grantor Retained Annuity Trust of which Niels
W. Johnsen is income and principal beneficiary.
(11) Includes 232,319 shares held as Agent and Attorney-in-Fact with full
rights of voting, disposition, or otherwise for the benefit of Erik
F. Johnsen's children. Mr. Johnsen disclaims beneficial ownership of
such shares. Also includes 8,375 shares owned by Erik F. Johnsen's
wife and 505,000 shares held by the Erik F. Johnsen Limited Family
Partnership of which Mr. Johnsen is General Partner.
(12) Includes 2,968 shares held in trust for Niels M. Johnsen's daughter of
which he is a trustee. Also includes 224,622 shares owned by a
corporation of which Mr. Johnsen is a Vice President and Director and
24,387 shares held as Co-trustee under the Grantor Retained Annuity
Trust referred to in footnote 10. Includes 15,750 shares held by the
Niels W. Johnsen Foundation of which Niels M. Johnsen is director.
(13) Includes 35,022 shares held by Erik F. Johnsen as Agent and Attorney-
in-Fact for benefit of Erik L. Johnsen, referred to in footnote 11 above
and 6,500 shares held in trust for Erik L. Johnsen's two sons of which
he is a trustee.
(14) Total shares in the amount of 15,000 held in trust for Mr. Eustis and
his wife. Mr. Eustis is trustee with full voting and dispository power.
(15) Shares owned jointly with wife.
During 1997, the Board of Directors of the Corporation held four
meetings. Each non-officer director receives fees of $16,000 per year
plus $1,000 for each meeting of the Board or a committee thereof attended.
The Board of Directors has an audit committee on which Messrs.
Eustis, Lupberger, O'Brien and Trowbridge serve. The audit committee has
general responsibility for meeting from time to time with representatives
of the Corporation's independent auditors in order to obtain an assessment
of the financial position and results of operations of the Corporation and
reports to the Board with respect thereto. The audit committee met once in
1997.
During 1997, the Board established a compensation committee to
administer the Stock Incentive Plan on which Messrs. Eustis, Lupberger,
O'Brien and Trowbridge serve. The compensation committee met once during
1997.
<PAGE>6
EXECUTIVE COMPENSATION
SUMMARY OF COMPENSATION
The following table sets forth for the fiscal years ended December 31,
1995, 1996 and 1997 the compensation paid by the Corporation with respect
to the Chief Executive Officer and the four other most highly compensated
executive officers whose annual salary and bonus exceeded an aggregate of
$100,000 for fiscal year 1997:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION
- -------------------------------------- ---- --------- -------- -----------
<S> <C> <C> <C> <C>
Niels W. Johnsen, Chairman
of the Board of the Corporation.... 1997 $ 330,000 $ 24,750 $ 0 (2)
1996 330,000 0 31,344 (2)
1995 330,000 74,250 31,344 (2)
Erik F. Johnsen, President
of the Corporation................. 1997 330,000 24,750 17,132 (3)
1996 330,000 0 17,132 (3)
1995 330,000 74,250 17,132 (3)
Niels M. Johnsen, Executive Vice
President of the Corporation....... 1997 220,000 16,500 1,000 (4)
1996 200,000 0 500 (4)
1995 172,500 45,000 500 (4)
Erik L. Johnsen, Executive Vice
President of the Corporation....... 1997 170,625 13,125 0
1996 145,000 0 0
1995 132,500 32,625 0
Gary L. Ferguson, Vice President and
Chief Financial Officer of the
Corporation........................ 1997 138,000 10,350 1,000 (4)
1996 125,000 0 500 (4)
1995 125,000 28,125 500 (4)
</TABLE>
_____________
(1) Represents cash bonuses earned with respect to services rendered
during the year indicated, 50% of which is paid in the following year
and 25% of which is to be paid in each of the next two years. No bonus
was earned in 1996.
(2) The Corporation has an agreement with Niels W. Johnsen whereby his
estate will be paid approximately $822,000 upon his death. To fund this
death benefit, the Corporation acquired a life insurance policy at a
cost of $31,344 in 1996 and 1995. In 1997, the Corporation chose to
cancel this policy and received $55,156 as its cash surrender value in
March of 1997. The Corporation has since reserved amounts sufficient
to fund this death benefit.
(3) The Corporation has an agreement with Erik F. Johnsen whereby his estate
will be paid approximately $626,000 upon his death. To fund this
death benefit, the Corporation acquired a life insurance policy at a
cost of $17,132 in 1997, 1996 and 1995.
(4) Consists of contributions made by the Corporation to its 401(k) plan on
behalf of the employee.
<PAGE>7
PENSION PLAN
The Corporation has in effect a defined benefit pension plan, in
which all employees of the Corporation and its domestic subsidiaries who
are not covered by union sponsored plans may participate after one year
of service. Computation of benefits payable under the plan is based on
years of service and the employee's highest sixty (60) consecutive months
of compensation, which is defined as a participant's base salary plus
overtime, excluding incentive pay, bonuses or other extra compensation, in
whatever form. The following table reflects the estimated annual retirement
benefits (assuming payment in the form of a straight life annuity) an
executive officer can expect to receive upon retirement at age 65 under the
plan, assuming the years of service and compensation levels indicated below:
<TABLE>
<CAPTION>
YEARS OF SERVICE
_________________________________________________
EARNINGS 15 20 25 30 or more
- ----------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
$100,000 .............. $21,715 $28,953 $36,192 $43,430
$150,000 .............. 34,090 45,453 56,817 68,180
$200,000 .............. 46,465 61,953 77,442 92,930
$250,000 .............. 58,840 78,453 98,067 117,680
$300,000 .............. 71,215 94,953 118,692 142,430
$350,000 .............. 83,590 111,453 139,317 167,180
<FN>
This table does not reflect the fact that the benefit provided by the
Retirement Plan's formula is subject to certain constraints under the
Internal Revenue Code. For 1998, the maximum annual benefit generally is
$130,000 under Code Section 415. Furthermore, under Code Section 401(a)(17),
the maximum annual compensation that may be reflected in 1998 is $160,000.
These dollar limits are subject to cost of living increases in future years.
</TABLE>
Each of the individuals named in the Summary Compensation Table set
forth above is a participant in the plan and, for purposes of the plan,
was credited during 1997 with the salary shown next to his name in such
table. At December 31, 1997, such individuals had 50, 45, 27, 18 and 29
credited years of service, respectively, under the plan. The plan benefits
shown in the above table are not subject to deduction or offset by Social
Security benefits.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
Decisions on compensation of the Corporation's executive officers
for 1997 were made by the Board of Directors. Set forth below is a report
submitted by the Board addressing the Corporation's executive compensation
policies for 1997.
The Corporation's executive compensation structure for 1997 was
comprised of salaries and annual cash bonuses. The salaries of Messrs.
Niels W. and Erik F. Johnsen, Chairman of the Board and President,
respectively, were set at $330,000 by the Board in 1990 and have not been
increased. The Board delegates to Niels W. and Erik F. Johnsen the power
to set the salaries of the other executive officers.
The Board believes that a significant portion of executive compensation
should be tied to corporate performance. The Board also believes that the
efforts of individual officers and employees can have a direct impact
on the ability of the Corporation to reduce and control general and
administrative expenses. The Officers Bonus Plan for 1997 (the "1997 Plan")
adopted by the Board was made up of two components, one based on the
achievement of certain profit levels by the Corporation and the other based
on reductions in the Corporation's administrative and general expenses. The
1997 Plan offered an opportunity for all officers to earn incentive cash
bonuses of up to 30% of salary. An officer had an opportunity to earn a
cash bonus of between 3.75% and 22.5% of salary if certain corporate
profit targets were reached. An officer could earn a cash bonus of between
1.25% and 7.5% of salary if administrative and general expenses were reduced
to certain levels. Based on the reduction of expenses achieved in 1997, each
executive officer earned a cash bonus equal to 7.5% of salary.
<PAGE>8
In order to encourage the executive officers to remain employed by
the Corporation, one-half of the bonus is paid in the following year and
the remaining portion will be paid one-half in each of the next two years, if
the officer remains employed by the Corporation on the date of payment.
Future bonus payments are not forfeited, however, if employment terminates
as the result of eligible retirement, death or curtailment of operations
of the Corporation.
Since each executive officer's annual compensation is substantially
less than $1 million, the Board does not believe that any action is
necessary in order to ensure that all executive compensation paid in
cash will continue to be deductible by the Corporation under Section
162(m) of the Internal Revenue Code. In addition, stock options granted
in accordance with the terms of the Stock Incentive Plan will qualify
as "performance-based" compensation and will be excluded in calculating the
$1 million limit on executive compensation.
Submitted by the Board of Directors
Niels W. Johnsen Erik F. Johnsen
Niels M. Johnsen Erik L. Johnsen
Harold S. Grehan, Jr. Laurance Eustis
Edwin Lupberger Raymond V. O'Brien, Jr.
Edward K. Trowbridge
BOARD OF DIRECTOR INTERLOCKS,
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
AND CERTAIN TRANSACTIONS
Decisions as to the compensation of the executive officers of the
Corporation are made by the Board of Directors. Five of the nine members
of the Board, Messrs. Niels W. Johnsen, Erik F. Johnsen, Niels M. Johnsen,
Erik L. Johnsen and Harold S. Grehan, Jr., are or were executive officers
of the Corporation and participated in decisions as to the 1997 Officer
Bonus Plan. Decisions on salary increases for executive officers other
than themselves were made by Niels W. Johnsen and Erik F. Johnsen. No
executive officer of the Corporation served during the last fiscal year as
a director, or member of the compensation committee, of another entity,
one of whose executive officers served as a director of the Corporation.
Furnished below is information regarding certain transactions in which
officers and directors of the Corporation had an interest during 1997.
A son of the President of the Corporation is a partner in the law firm
of Jones, Walker, Waechter, Poitevent, Carrere and Denegre which has
represented the Corporation since its inception. Fees paid to the firm for
legal services rendered to the Corporation during 1997 were $958,000.
The Corporation believes that these services are provided on terms at least
as favorable to the Corporation as could be obtained from unaffiliated third
parties.
<PAGE>9
PERFORMANCE GRAPH
The following performance graph compares the performance of the
Corporation's Common Stock to the S & P 500 Index and to an Industry Peer
Group (which includes OMI Corporation, Overseas Shipholding Group, Stolt
Nielsen, Sea Containers Limited and Alexander and Baldwin) for the
Corporation's last five fiscal years.
<TABLE>
COMPARATIVE FIVE-YEAR TOTAL RETURNS*
INT'L SHIPHOLDING CORP., S&P 500, PEER GROUP
(PERFORMANCE RESULTS THROUGH 12/31/97)
<CAPTION>
Starting
Description Basis 1993 1994 1995 1996 1997
- ------------ --------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
ISH $100.00 $103.06 $108.93 $146.37 $132.24 $125.07
S & P 500 $100.00 $110.08 $111.53 $153.45 $188.68 $251.63
Peer Group $100.00 $121.90 $117.82 $128.88 $135.04 $164.71
<FN>
_________
Assumes $100 invested at the close of trading on the last trading day
preceding the first day of the fifth preceding fiscal year in ISH common
stock, S&P 500, and Peer Group.
* Cumulative total return assumes reinvestment of dividends.
</TABLE>
<PAGE>10
PROPOSAL TO APPROVE THE INTERNATIONAL SHIPHOLDING CORPORATION
STOCK INCENTIVE PLAN
GENERAL
The Board of Directors of the Company strongly believes that the growth
of the Company depends upon the efforts of its officers and key employees
and that officers and key employees are best motivated to put forth maximum
effort on behalf of the Company if they own an equity interest in the
Company. In accordance with this philosophy, the International Shipholding
Corporation Stock Incentive Plan (the "Plan") was adopted by the Board of
Directors, subject to approval by the shareholders at the 1998 Annual Meeting
of Stockholders. The principal features of the Plan are summarized below.
This summary is qualified in its entirety, however, by reference to the Plan,
which is attached to this Proxy Statement as Exhibit A.
Key employees of the Company (including officers and directors who are
also full-time employees of the Company) will be eligible to receive awards
("Incentives") under the Plan when designated by the Compensation Committee.
The Company currently has approximately ten officers and fifteen key
employees eligible to be granted Incentives under the Plan. Incentives
under the Plan may be granted in any one or a combination of the following
forms: (a) incentive stock options and non-qualified stock options;
(b) restricted stock; and (c) other stock-based awards.
PURPOSE OF THE PROPOSAL
The Board of Directors is interested in creating and maintaining
a compensation system that includes grants of equity-based awards. The Board
of Directors believes that providing members of management and key personnel
with a proprietary interest in the growth and performance of the Company is
crucial to stimulating individual performance while at the same time
enhancing shareholder value. The Board further believes that the Plan will
provide the Company with the ability to attract, retain and motivate key
personnel in a manner that is tied to the interests of shareholders.
TERMS OF THE PLAN
SHARES ISSUABLE THROUGH THE PLAN. A total of 650,000 shares of Common
Stock are authorized to be issued under the Plan, representing less than
10% of the outstanding shares of Common Stock. The Company has not had a
stock incentive plan in the past and, accordingly, has no stock options or
other stock awards outstanding. Incentives with respect to no more than
500,000 shares of Common Stock may be granted to a single participant in a
calendar year. The closing sale price of a share of Common Stock, as
quoted on the New York Stock Exchange on February 24, 1998, was $17.
The number and kind of shares of Common Stock subject to the Plan and
subject to outstanding Incentives would be appropriately adjusted in the
event of any change in the capital structure of the Company. The Compensation
Committee may also amend the terms of any Incentive to the extent
appropriate to provide participants with the same relative rights before
and after the occurrence of such an event. Shares of Common Stock subject
to Incentives that are canceled, terminated or forfeited, or shares of
Common Stock that are issued as Incentives and forfeited or reacquired by
the Company will again be available for issuance under the Plan. Incentives
that are paid in cash are not counted against the total number of shares
issuable through the Plan.
ADMINISTRATION OF THE PLAN. The Compensation Committee administers the
Plan and has authority to award Incentives under the Plan, to interpret the
Plan, to establish any rules or regulations relating to the Plan that
it determines to be appropriate, to make any other determination that it
believes necessary or advisable for the proper administration of the Plan and
to delegate its authority as appropriate.
<PAGE>11
AMENDMENTS TO THE PLAN. The Board may amend or discontinue the Plan at
any time, except that no amendment may be made without stockholder approval
if such approval is necessary to comply with any applicable tax or regulatory
requirement. The Committee may cause an Incentive granted under the Plan
to be canceled in consideration of a cash payment or alternative Incentive
equal in value to the canceled Incentive.
TYPES OF INCENTIVES. The Compensation Committee will be authorized
under the Plan to grant stock options, restricted stock and other stock-
based awards, each of which is described further below.
STOCK OPTIONS. The Compensation Committee may grant non-qualified stock
options or incentive stock options to purchase shares of Common Stock.
The Compensation Committee will determine the number and exercise price of
the options, and the time or times that the options become exercisable,
provided that the option exercise price may not be less than the fair market
value of the Common Stock on the date of grant. The term of an option will
also be determined by the Compensation Committee, provided that the term of
an incentive stock option may not exceed 10 years. The Compensation
Committee may accelerate the exercisability of any stock option at any time.
The Compensation Committee may also approve the purchase by the Company of
an unexercised stock option from the optionee by mutual agreement for the
difference between the exercise price and the fair market value of the shares
covered by the option.
The option exercise price may be paid in cash; unless otherwise
determined by the Committee, in shares of Common Stock held for six months;
in a combination of cash and shares of Common Stock or through a broker
assisted exercise arrangement approved in advance by the Company.
Incentive stock options will be subject to certain additional
requirements necessary in order to qualify as incentive stock options
under 422 of the Internal Revenue Code (the "Code").
RESTRICTED STOCK. Shares of Common Stock may be granted by the
Compensation Committee to an eligible employee and made subject to
restrictions on sale, pledge or other transfer by the employee for a
certain period (the "Restricted Period"). A Restricted Period of at
least three years is required, except that if vesting of the shares is
subject to the attainment of specified performance goals, a Restricted
Period of one year or more is permitted. All shares of restricted
stock will be subject to such restrictions as the Compensation Committee
may provide in an agreement with the employee, including, among other things,
that the shares are required to be forfeited or resold to the Company in the
event of termination of employment or in the event specified performance
goals or targets are not met. Subject to the restrictions provided in
the agreement and the Plan, a participant receiving restricted stock shall
have all of the rights of a shareholder as to such shares.
OTHER STOCK-BASED AWARDS. The Committee is authorized to grant in lieu
of a portion of salary or bonus an "other stock-based award", which shall
consist of an award the value of which is based in whole or in part on the
value of shares of Common Stock. Other stock-based awards may be awards
of shares of Common Stock or may be denominated or payable in, valued in whole
or in part by reference to, or otherwise based on or related to, shares of
Common Stock. The Committee will determine the terms and conditions of any
other stock-based award and may provide that such awards would be payable
in whole or in part in cash. Except in the case of an other stock-based
award granted in substitution for an outstanding award of a company acquired
by the Company or with which the Company combines, the price at which
securities may be purchased pursuant to an other stock-based award shall
not be less than 100% of the fair market value of the securities to which
the award relates on the date of grant. Dividends or dividend equivalents,
payable in cash or shares of Common Stock, may be paid in connection with
an other stock-based award on either a current or deferred basis.
<PAGE>12
RESTRICTED STOCK AND OTHER STOCK-BASED AWARDS AS PERFORMANCE-BASED
COMPENSATION UNDER SECTION 162(m). For restricted stock and other stock-
based awards that are intended to qualify as performance-based compensation
under Section 162(m) of the Code, the Committee will establish specific
performance goals for each performance period not later than 90 days after
the beginning of the performance period. The Committee will also establish
a schedule, setting forth the portion of the award that will be earned or
forfeited based on the degree of achievement, or lack thereof, of the
performance goals at the end of the performance period by the Company, an
operating division or a subsidiary. The Committee will use any or a
combination of the following performance measures: Earnings per share,
return on assets, an economic value added measure, shareholder return,
earnings, stock price, return on equity, return on total capital, reduction
of expenses or increase in cash flow of the Company, a division of the
Company or a subsidiary. For any performance period, the performance
objectives may be measured on an absolute basis or relative to a group of
peer companies selected by the Committee, relative to internal goals or
relative to levels attained in prior years.
The Committee may not waive any of the pre-established performance
goal objectives. Under the terms of the Plan, however, in the event of
a change of control of the Company, the restricted stock and other stock-based
awards will automatically vest. In the event of retirement, death or
disability during the performance period, the Committee may provide that
all or a portion of the restricted stock and other stock-based awards will
vest. The Committee retains authority to adopt different performance
goal objectives with respect to different grants.
TERMINATION OF EMPLOYMENT. If an employee participant ceases to be
an employee of the Company for any reason, including death, any Incentive
may be exercised or shall expire at such time or times as may be
determined by the Committee in the Incentive Agreement.
CHANGE OF CONTROL. In the event of a change of control of the Company,
as defined in the Plan, all outstanding options and Incentives granted
pursuant to the Plan shall become fully exercisable, all restrictions
or limitations on any Incentives shall lapse and all performance criteria
and other conditions relating to the payment of Incentives will be deemed
to be achieved.
In the event of any merger, consolidation or reorganization of the
Company with any other corporation, there shall be substituted for each
of the shares of Common Stock subject to the Plan and subject to outstanding
Incentives, the number and kind of shares of stock or other securities to
which the holders of Common Stock will be entitled in the transaction.
TRANSFERABILITY OF INCENTIVES. Incentives are not transferable except
(a) by will, (b) by the laws of descent and distribution, or (c) pursuant
to a domestic relations order if permitted by the Committee and provided
in the Incentive Agreement, or (d) only in the case of stock options, to
family members, to a family partnership, to a family limited liability
company or to a trust for the benefit of family members, if permitted
by the Committee and so provided in the Incentive Agreement.
AWARDS TO BE GRANTED
The Committee has not yet determined the individuals who will receive
awards under the Plan or the size of such awards to be granted.
FEDERAL INCOME TAX CONSEQUENCES OF STOCK OPTIONS
Under existing federal income tax provisions, a participant who receives
stock options will not normally realize any income, nor will the Company
normally receive any deduction for federal income tax purposes in the year of
grant.
When a non-qualified stock option granted pursuant to the Plan is
exercised, the employee will realize ordinary income measured by the difference
between the aggregate purchase price of the shares of Common Stock as to which
the option is exercised and the aggregate fair market value of the shares of
<PAGE>13
Common Stock on the exercise date and, subject to the limitations of Section
162(m) of the Code, the Company will be entitled to a deduction in the year
the option is exercised equal to the amount the employee is required to
treat as ordinary income.
An employee generally will not recognize any income upon the exercise of
any incentive stock option, but the excess of the fair market value of the
shares at the time of exercise over the option price will be an item of
tax preference, which may, depending on particular factors relating to the
employee, subject the employee to the alternative minimum tax imposed by
Section 55 of the Code. The alternative minimum tax is imposed in addition
to the federal individual income tax, and it is intended to ensure that
individual taxpayers do not completely avoid federal income tax by using
preference items. An employee will recognize capital gain or loss in the
amount of the difference between the exercise price and the sale price on
the sale or exchange of stock acquired pursuant to the exercise of an
incentive stock option, provided the employee does not dispose of such
stock within two years from the date of grant and one year from the date
of exercise of the incentive stock option (the "required holding periods").
An employee disposing of such shares before the expiration of the required
holding period will recognize ordinary income generally equal to the
difference between the option price and the fair market value of the stock
on the date of exercise. The remaining gain, if any, will be capital gain.
The Company will not be entitled to a federal income tax deduction
in connection with the exercise of an incentive stock option, except where
the employee disposes of the Common Stock received upon exercise before
the expiration of the required holding period.
If the exercise price of an option is paid by the surrender of previously
owned shares, the basis of the previously owned shares carries over to the
shares received in replacement therefor. If the option is a non-qualified
option, the income recognized on exercise is added to the basis. If the
option is an incentive stock option, the optionee will recognize gain if
the shares surrendered were acquired through the exercise of an incentive
stock option and have not been held for the applicable holding period. This
gain will be added to the basis of the shares received in replacement of
the previously owned shares.
If, upon a change in control of the Company, the exercisability or
vesting of a stock option granted under the Plan is accelerated, any
excess on the date of the change in control of the fair market value of
the shares subject to the option over the purchase price of such shares,
if any, may be characterized as Parachute Payments (within the meaning
of Section 280G of the Code) if the sum of such amounts and any other
such contingent payments received by the employee exceeds an amount equal
to three times the "Base Amount" for such employee. The Base Amount
generally is the average of the annual compensation of such employee for the
five years preceding such change in ownership or control. An Excess
Parachute Payment, with respect to any employee, is the excess of the
Parachute Payments to such person, in the aggregate, over and above such
person's Base Amount. If the amounts received by an employee upon a change
in control are characterized as Parachute Payments, such employee will be
subject to a 20% excise tax on the Excess Parachute Payment pursuant to
Section 4999 of the Code, and the Company will be denied any deduction with
respect to such Excess Parachute Payment.
This summary of federal income tax consequences of non-qualified and
incentive stock options does not purport to be complete. Reference should
be made to the applicable provisions of the Code. There also may be state
and local income tax consequences applicable to transactions involving
options.
VOTE REQUIRED
Approval of the Plan requires the affirmative vote, cast in person or
by proxy, of the holders of at least a majority of the shares of Common
Stock present and entitled to vote at the Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
STOCK INCENTIVE PLAN.
<PAGE>14
PROPOSAL TO RATIFY THE SELECTION OF INDEPENDENT AUDITORS
The Corporation's 1997 financial statements were audited by Arthur
Andersen LLP. The Board of Directors has appointed Arthur Andersen LLP as
independent auditors of the Corporation for the fiscal year ending
December 31,1998, and is submitting that appointment to its stockholders
for ratification at the annual meeting. Arthur Andersen LLP has served
as the Corporation's auditors since its inception in 1979. If the
stockholders do not ratify the Board of Directors' appointment of Arthur
Andersen LLP by the affirmative vote of at least a majority of the shares of
Common Stock represented at the meeting in person or by proxy, the
selection of independent auditors will be reconsidered by the Board.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
OTHER MATTERS
QUORUM AND VOTING OF PROXIES
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock of the Corporation is necessary to constitute
a quorum. If a quorum is present, the vote of a majority of the Common
Stock present or represented will decide all questions properly brought
before the meeting, except that directors will be elected by plurality vote.
All proxies in the form enclosed received by the Board of Directors
will be voted as specified and, in the absence of instructions to the
contrary, will be voted for the election of the nominees named above and
in favor of the proposals specified above.
The Board of Directors does not know of any matters to be presented
at the annual meeting other than the election of directors, the approval
of the Stock Incentive Plan and the ratification of the selection of
independent auditors. However, if any other matters properly come before
the meeting or any adjournment thereof, it is the intention of the persons
named in the enclosed proxy to vote the shares represented by them in
accordance with their best judgment.
EFFECT OF ABSTENTION AND BROKER NON-VOTES
Because directors are elected by plurality vote, abstentions and broker
non-votes will not affect the election of directors. With respect to the
proposal to approve the Stock Incentive Plan, the proposal to ratify the
selection of independent auditors and any other matter that is properly
before the meeting, an abstention from voting on the proposal by a
shareholder will have the same effect as a vote "against" the proposal, and
a broker non-vote will be counted as "not present" with respect to the
proposal and therefore will have no effect on the outcome of the vote with
respect thereto.
<PAGE>15
STOCKHOLDER PROPOSALS
Any stockholder who desires to present a proposal qualified for
inclusion in the Corporation's proxy material relating to the 1999 annual
meeting must forward the proposal to the Secretary of the Corporation at the
address shown on the first page of this Proxy Statement in time to arrive
at the Corporation prior to November 10, 1998.
BY ORDER OF THE BOARD OF DIRECTORS
GEORGE DENEGRE
Secretary
New Orleans, Louisiana
March 10, 1998
<PAGE>
EXHIBIT A
INTERNATIONAL SHIPHOLDING CORPORATION
STOCK INCENTIVE PLAN
1. PURPOSE. The purpose of the Stock Incentive Plan (the "Plan") of
International Shipholding Corporation ("ISC") is to increase shareholder
value and to advance the interests of ISC and its subsidiaries (collectively,
the "Company") by furnishing a variety of economic incentives (the
"Incentives") designed to attract, retain and motivate key employees and
officers and to strengthen the mutuality of interests between such
employees, officers and ISC's shareholders. Incentives consist of
opportunities to purchase or receive shares of common stock, $1.00 par
value per share, of ISC (the "Common Stock"), on terms determined under the
Plan. As used in the Plan, the term "subsidiary" means any corporation
of which ISC owns (directly or indirectly) within the meaning of Section 425
(f) of the Internal Revenue Code of 1986, as amended (the "Code"), 50% or
more of the total combined voting power of all classes of stock.
2. ADMINISTRATION.
2.1. COMPOSITION. The Plan shall be administered by the
Compensation Committee of the Board of Directors of ISC or by a subcommittee
thereof (the "Committee"). The Committee shall consist of not fewer than
two members of the Board of Directors, each of whom shall (a) qualify as a
"non-employee director" under Rule 16b-3 under the Securities Exchange Act
of 1934 (the "1934 Act") or any successor rule, and (b) qualify as an
"outside director" under Section 162(m) of the Code.
2.2. AUTHORITY. The Committee shall have plenary authority
to award Incentives under the Plan, to interpret the Plan, to establish any
rules or regulations relating to the Plan that it determines to be
appropriate, to enter into agreements with participants as to the terms
of the Incentives (the "Incentive Agreements") and to make any other
determination that it believes necessary or advisable for the proper
administration of the Plan. Its decisions in matters relating to the Plan
shall be final and conclusive on the Company and participants. The
Committee may delegate its authority hereunder to the extent provided
in Section 3 hereof.
3. ELIGIBLE PARTICIPANTS. Key employees and officers of the Company
(including officers who also serve as directors of the Company) shall become
eligible to receive Incentives under the Plan when designated by the
Committee. Employees may be designated individually or by groups or
categories, as the Committee deems appropriate. With respect to participants
not subject to Section 16 of the 1934 Act or Section 162(m) of the Code,
the Committee may delegate to appropriate personnel of the Company its
authority to designate participants, to determine the size and type of
Incentives to be received by those participants and to determine or modify
performance objectives for those participants.
4. TYPES OF INCENTIVES. Incentives may be granted under the Plan to
eligible participants in any of the following forms, either individually or
in combination, (a) incentive stock options and non-qualified stock
options; (b) restricted stock; and (c) other stock-based awards ("Other
Stock-Based Awards").
<PAGE>
5. SHARES SUBJECT TO THE PLAN.
5.1. NUMBER OF SHARES. Subject to adjustment as provided in
Section 9.5, a total of 650,000 shares of Common Stock are authorized to
be issued under the Plan. Incentives with respect to no more than
500,000 shares of Common Stock may be granted through the Plan to a
single participant in one calendar year. In the event that an Incentive
granted hereunder expires or is terminated or cancelled prior to exercise
or payment, any shares of Common Stock that were issuable thereunder may
again be issued under the Plan. In the event that shares of Common Stock
are issued as Incentives under the Plan and thereafter are forfeited or
reacquired by the Company pursuant to rights reserved upon issuance thereof,
such forfeited and reacquired shares may again be issued under the Plan.
If an Other Stock-Based Award is to be paid in cash by its terms, the
Committee need not make a deduction from the shares of Common Stock issuable
under the Plan with respect thereto. If and to the extent that an Other
Stock-Based Award may be paid in cash or shares of Common Stock, the total
number of shares available for issuance hereunder shall be debited by the
number of shares payable under such Incentive, provided that upon any payment
of all or part of such Incentive in cash, the total number of shares
available for issuance hereunder shall be credited with the appropriate
number of shares represented by the cash payment, as determined in the sole
discretion of the Committee. Additional rules for determining the number
of shares granted under the Plan may be made by the Committee, as it
deems necessary or appropriate.
5.2. TYPE OF COMMON STOCK. Common Stock issued under the Plan
may be authorized and unissued shares or issued shares held as treasury shares.
6. STOCK OPTIONS. A stock option is a right to purchase shares
of Common Stock from ISC. Stock options granted under this Plan may be
incentive stock options or non-qualified stock options. Any option that is
designated as a non-qualified stock option shall not be treated as an
incentive stock option. Each stock option granted by the Committee under
this Plan shall be subject to the following terms and conditions:
6.1. PRICE. The exercise price per share shall be determined by
the Committee, subject to adjustment under Section 9.5; provided that in
no event shall the exercise price be less than the Fair Market Value of
a share of Common Stock on the date of grant, except that in
connection with an acquisition, consolidation, merger or other extraordinary
transaction, options may be granted at less than the then Fair Market
Value in order to replace options previously granted by one or more parties
to such transaction (or their affiliates) so long as the aggregate spread
on such replacement options for any recipient of such options is equal to or
less than the aggregate spread on the options being replaced.
6.2. NUMBER. The number of shares of Common Stock subject to the
option shall be determined by the Committee, subject to Section 5.1 and
subject to adjustment as provided in Section 9.5.
6.3. DURATION AND TIME FOR EXERCISE. The term of each stock
option shall be determined by the Committee. Each stock option shall
become exercisable at such time or times during its term as shall be
determined by the Committee. Notwithstanding the foregoing, the Committee
may accelerate the exercisability of any stock option at any time, in
addition to the automatic acceleration of stock options under Section 9.11.
6.4. MANNER OF EXERCISE. A stock option may be exercised, in whole
or in part, by giving written notice to the Company, specifying the number of
shares of Common Stock to be purchased. The exercise notice shall be accompanied
by the full purchase price for such shares. The option price shall be
payable in United States dollars and may be paid by (a) cash; (b) uncertified or
certified check;(c) unless otherwise determined by the Committee, by delivery of
<PAGE>
shares of Common Stock held by the optionee for at least six months, which
shares shall be valued for this purpose at the Fair Market Value on the
business day immediately preceding the date such option is exercised; (d)
through arrangements with a brokerage firm approved by the Company under
which such firm, on behalf of the optionee, will pay the exercise price to
the Company and the Company will promptly deliver to such firm the number of
shares of Common Stock subject to the option so that the firm may sell such
shares, or a portion thereof, for the account of the optionee, or (e) in
such other manner as may be authorized from time to time by the Committee.
6.5. INCENTIVE STOCK OPTIONS. Notwithstanding anything in the
Plan to the contrary, the following additional provisions shall apply
to the grant of stock options that are intended to qualify as Incentive
Stock Options (as such term is defined in Section 422 of the Code):
A. Any Incentive Stock Option agreement authorized
under the Plan shall contain such other provisions as the Committee
shall deem advisable, but shall in all events be consistent with and contain
or be deemed to contain all provisions required in order to qualify the
options as Incentive Stock Options.
B. All Incentive Stock Options must be granted within ten
years from the date on which this Plan is adopted by the Board of Directors.
C. Unless sooner exercised, all Incentive Stock Options
shall expire no later than ten years after the date of grant.
D. No Incentive Stock Options shall be granted to any
participant who, at the time such option is granted, would own (within the
meaning of Section 422 of the Code) stock possessing more than 10% of the
total combined voting power of all classes of stock of the employer
corporation or of its parent or subsidiary corporation.
E. The aggregate Fair Market Value (determined with
respect to each Incentive Stock Option as of the time such Incentive Stock
Option is granted) of the Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by a participant during any
calendar year (under the Plan or any other plan of ISC or any of its
subsidiaries) shall not exceed $100,000. To the extent that such limitation
is exceeded, such options shall not be treated, for federal income tax
purposes, as Incentive Stock Options.
7. RESTRICTED STOCK.
7.1. GRANT OF RESTRICTED STOCK. The Committee may award shares of
restricted stock to such officers and key employees as the Committee
determines pursuant to the terms of Section 3. An award of restricted stock
shall be subject to such restrictions on transfer and forfeitability
provisions and such other terms and conditions as the Committee may
determine, subject to the provisions of the Plan. An award of restricted
stock may also be subject to the attainment of specified performance goals
or targets. To the extent restricted stock is intended to qualify as
performance-based compensation under Section 162(m) of the Code, it must
be granted subject to the attainment of performance goals as described in
Section 7.2 below and meet the additional requirements imposed by Section
162(m).
7.2 PERFORMANCE-BASED RESTRICTED STOCK. To the extent that
restricted stock granted under the Plan is intended to vest based upon
the achievement of pre-established performance goals rather than solely
upon continued employment over a period of time, the performance goals
pursuant to which the restricted stock shall vest shall be any or a
combination of the following performance measures: earnings per share, return
on assets, an economic value added measure, shareholder return, earnings,
stock price, return on equity, return on total capital, reduction of expenses
or increase in cash flow of ISC, a division of ISC or a subsidiary. For any
<PAGE>
performance period, such performance objectives may be measured on an
absolute basis or relative to a group of peer companies selected by the
Committee, relative to internal goals or relative to levels attained in prior
years. The Committee may not waive any of the pre-established performance
goal objectives, except that such objectives shall be waived as provided in
Section 9.11 hereof, or as may be provided by the Committee in the event of
death, disability or retirement.
7.3. THE RESTRICTED PERIOD. At the time an award of restricted
stock is made, the Committee shall establish a period of time during which
the transfer of the shares of restricted stock shall be restricted (the
"Restricted Period"). The Restricted Period shall be a minimum of three
years, except that if the vesting of the shares of restricted stock
is based upon the attainment of performance goals, a minimum Restricted
Period of one year is permitted. Each award of restricted stock may have
a different Restricted Period. The expiration of the Restricted Period
shall also occur as provided under Section 9.3 and under the conditions
described in Section 9.11 hereof.
7.4. ESCROW. The participant receiving restricted stock shall
enter into an Incentive Agreement with the Company setting forth the
conditions of the grant. Certificates representing shares of restricted
stock shall be registered in the name of the participant and deposited with
the Company, together with a stock power endorsed in blank by the participant.
Each such certificate shall bear a legend in substantially the following form:
The transferability of this certificate and the shares of Common
Stock represented by it are subject to the terms and conditions (including
conditions of forfeiture) contained in the International Shipholding
Corporation Stock Incentive Plan (the "Plan"), and an agreement entered into
between the registered owner and International Shipholding Corporation
thereunder. Copies of the Plan and the agreement are on file at
the principal office of the Company.
7.5. DIVIDENDS ON RESTRICTED STOCK. Any and all cash and stock
dividends paid with respect to the shares of restricted stock shall be
subject to any restrictions on transfer, forfeitability provisions or
reinvestment requirements as the Committee may, in its discretion,
prescribe in the Incentive Agreement.
7.6. FORFEITURE. In the event of the forfeiture of any shares of
restricted stock under the terms provided in the Incentive Agreement
(including any additional shares of restricted stock that may result from the
reinvestment of cash and stock dividends, if so provided in the Incentive
Agreement), such forfeited shares shall be surrendered and the certificates
cancelled. The participants shall have the same rights and privileges, and
be subject to the same forfeiture provisions, with respect to any additional
shares received pursuant to Section 9.5 due to a recapitalization, merger or
other change in capitalization.
7.7. EXPIRATION OF RESTRICTED PERIOD. Upon the expiration or
termination of the Restricted Period and the satisfaction of any other
conditions prescribed by the Committee, the restrictions applicable to
the restricted stock shall lapse and a stock certificate for the number of
shares of restricted stock with respect to which the restrictions have
lapsed shall be delivered, free of all such restrictions and legends,
except any that may be imposed by law, to the participant or the
participant's estate, as the case may be.
7.8. RIGHTS AS A SHAREHOLDER. Subject to the terms and conditions
of the Plan and subject to any restrictions on the receipt of dividends
that may be imposed in the Incentive Agreement, each participant receiving
restricted stock shall have all the rights of a shareholder with respect to
shares of stock during the Restricted Period, including without limitation,
the right to vote any shares of Common Stock.
<PAGE>
8. OTHER STOCK-BASED AWARDS.
8.1 TERMS OF OTHER STOCK-BASED AWARDS. The Committee is hereby
authorized to grant to eligible employees in lieu of a portion of salary
or bonus an "Other Stock-Based Award", which shall consist of an award,
other than an award described in Section 6 or 7 hereof, the value of which
is based in whole or in part on the value of shares of Common Stock. Other
Stock-Based Awards may be awards of shares of Common Stock or may be denominated
or payable in, valued in whole or in part by reference to, or otherwise
based on or related to, shares of Common Stock (including, without limitation,
securities convertible or exchangeable into or exercisable for shares of
Common Stock), as deemed by the Committee consistent with the purposes of
the Plan. The Committee shall determine the terms and conditions of any
such Other Stock-Based Award and may provide that such awards would be
payable in whole or in part in cash. Except in the case of an Other Stock-
Based Award granted in assumption of or in substitution for an outstanding
award of a company acquired by the Company or with which the Company combines,
the price at which securities may be purchased pursuant to any Other Stock-
Based Award granted under this Plan, or the provision, if any, of any such
award that is analogous to the purchase or exercise price, shall not be
less than 100% of the Fair Market Value of the securities to which such award
relates on the date of grant.
8.2 DIVIDEND EQUIVALENTS. In the sole and complete discretion
of the Committee, an Other Stock-Based Award under this Section 8 may
provide the holder thereof with dividends or dividend equivalents, payable
in cash or shares of Common Stock on a current or deferred basis.
8.3 PERFORMANCE GOALS. Other Stock-Based Awards intended to
qualify as "performance-based compensation" under Section 162(m) of the
Code shall be paid based upon the achievement of pre-established performance
goals. The performance goals pursuant to which Other Stock-Based Awards
granted under the Plan shall be earned shall be any or a combination of
the following performance measures: earnings per share, return on assets,
an economic value added measure, shareholder return, earnings, stock price,
return on equity, return on total capital, reduction of expenses or increase
in cash flow of the Company, a division of the Company or a subsidiary.
For any performance period, such performance goals may be measured on an
absolute basis or relative to a group of peer companies selected by
the Committee, relative to internal goals or relative to levels attained in
prior years. The Committee may not waive any of the pre-established
performance goal objectives if such Other Stock-Based Award is intended to
constitute "performance-based compensation" under Section 162(m), except
that such objectives shall be waived as provided in Section 9.11 hereof, or
as may be provided by the Committee in the event of death, disability or
retirement.
8.4. NOT A SHAREHOLDER. The grant of an Other Stock-Based Award
to a participant shall not create any rights in such participant as a
shareholder of the Company, until the issuance of shares of Common Stock with
respect to an award, at which time such stock shall be considered issued
and outstanding.
9. GENERAL.
9.1. DURATION. Subject to Section 9.10, the Plan shall remain in
effect until all Incentives granted under the Plan have either been
satisfied by the issuance of shares of Common Stock or the payment of
cash or been terminated under the terms of the Plan and all restrictions
imposed on shares of Common Stock in connection with their issuance under
the Plan have lapsed.
9.2. TRANSFERABILITY. No Incentives granted hereunder may
be transferred, pledged, assigned or otherwise encumbered by a
participant except: (a) by will; (b) by the laws of
<PAGE>
descent and distribution; (c) pursuant to a domestic relations order, as
defined in the Code, if permitted by the Committee and so provided in the
Incentive Agreement or an amendment thereto; or (d) as to options only, if
permitted by the Committee and so provided in the Incentive Agreement or
an amendment thereto, (i) to Immediate Family Members, (ii) to a partnership
in which Immediate Family Members, or entities in which Immediate Family
Members are the sole owners, members or beneficiaries, as appropriate,
are the sole partners, (iii) to a limited liability company in which
Immediate Family Members, or entities in which Immediate Family Members
are the sole owners, members or beneficiaries, as appropriate, are the sole
members, or (iv) to a trust for the sole benefit of Immediate Family Members.
"Immediate Family Members" shall be defined as the spouse and natural or
adopted children or grandchildren of the participant and their spouses.
To the extent that an Incentive Stock Option is permitted to be
transferred during the lifetime of the participant, it shall be treated
thereafter as a nonqualified stock option. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of Incentives, or levy of
attachment or similar process upon Incentives not specifically permitted
herein, shall be null and void and without effect.
9.3. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH. In the event
that a participant ceases to be an employee of the Company for any reason,
including death, disability, early retirement or normal retirement, any
Incentives may be exercised, shall vest or shall expire at such times as may
be determined by the Committee in the Incentive Agreement. The Committee
has complete authority to modify the treatment of an Incentive in the event
of termination of employment of a participant by means of an amendment to
the Incentive Agreement. Consent of the participant to the modification is
required only if the modification materially impairs the rights previously
provided to the participant in the Incentive Agreement.
9.4. ADDITIONAL CONDITION. Anything in this Plan to the contrary
notwithstanding: (a) the Company may, if it shall determine it necessary or
desirable for any reason, at the time of award of any Incentive or the
issuance of any shares of Common Stock pursuant to any Incentive, require
the recipient of the Incentive, as a condition to the receipt thereof or
to the receipt of shares of Common Stock issued pursuant thereto, to deliver
to the Company a written representation of present intention to acquire the
Incentive or the shares of Common Stock issued pursuant thereto for his
own account for investment and not for distribution; and (b) if at any time
the Company further determines, in its sole discretion, that the listing,
registration or qualification (or any updating of any such document) of any
Incentive or the shares of Common Stock issuable pursuant thereto is
necessary on any securities exchange or under any federal or state securities
or blue sky law, or that the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with the award of any Incentive, the issuance of shares of Common Stock
pursuant thereto, or the removal of any restrictions imposed on such
shares, such Incentive shall not be awarded or such shares of Common Stock
shall not be issued or such restrictions shall not be removed, as the case
may be,in whole or in part, unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any
conditions not acceptable to the Company.
9.5. ADJUSTMENT. In the event of any merger, consolidation or
reorganization of the Company with any other corporation or corporations,
there shall be substituted for each of the shares of Common Stock then
subject to the Plan, including shares subject to restrictions, options or
achievement of performance objectives, the number and kind of shares of
stock or other securities to which the holders of the shares of Common
Stock will be entitled pursuant to the transaction. In the event of any
recapitalization, stock dividend, stock split, combination of shares or other
change in the Common Stock, the number of shares of Common Stock then subject
to the Plan, including shares subject to outstanding Incentives, shall be
adjusted in proportion to the change in outstanding shares of Common Stock.
In the event of any such adjustments, the purchase price of any
option, the performance objectives of any Incentive, and the shares of Common
Stock issuable pursuant to any Incentive shall be adjusted as and to the
extent appropriate, in the reasonable discretion of the Committee, to provide
participants with the same relative rights before and after such adjustment.
<PAGE>
No substitution or adjustment shall require the Company to issue a fractional
share under this Plan and the substitution or adjustment shall be limited by
deleting any fractional share.
9.6. INCENTIVE AGREEMENTS. The terms of each Incentive shall
be stated in an agreement approved by the Committee.
9.7. WITHHOLDING.
A. The Company shall have the right to withhold from any
payments made under the Plan or to collect as a condition of payment, any
taxes required by law to be withheld. At any time that a participant is
required to pay to the Company an amount required to be withheld under
applicable income tax laws in connection with the issuance of Common Stock,
the lapse of restrictions on Common Stock or the exercise of an option, the
participant may, subject to disapproval by the Committee, satisfy this
obligation in whole or in part by electing (the "Election") to have the
Company withhold shares of Common Stock having a value equal to the amount
required to be withheld. The value of the shares to be withheld shall be
based on the Fair Market Value of the Common Stock on the date that the
amount of tax to be withheld shall be determined ("Tax Date").
B. Each Election must be made prior to the Tax Date. The
Committee may disapprove of any Election, may suspend or terminate the right
to make Elections, or may provide with respect to any Incentive that the
right to make Elections shall not apply to such Incentive. If a
participant makes an election under Section 83(b) of the Internal Revenue
Code with respect to shares of restricted stock, an Election is not permitted
to be made.
9.8. NO CONTINUED EMPLOYMENT. No participant under the Plan
shall have any right, because of his or her participation, to continue in the
employ of the Company for any period of time or to any right to continue his
or her present or any other rate of compensation.
9.9. DEFERRAL PERMITTED. Payment of cash or distribution of
any shares of Common Stock to which a participant is entitled under any
Incentive shall be made as provided in the Incentive Agreement. Payment
may be deferred at the option of the participant if provided in the Incentive
Agreement.
9.10. AMENDMENTS TO OR TERMINATION OF THE PLAN.
A. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that no amendment shall
be made without stockholder approval if such approval is necessary to comply
with any tax or regulatory requirement, including any approval necessary
to qualify Incentives as "performance-based" compensation under Section
162(m) or any successor provision, if such qualification is deemed
necessary or advisable by the Committee.
B. Any provision of this Plan or any Incentive
Agreement to the contrary notwithstanding, the Committee may cause any
Incentive granted hereunder to be cancelled in consideration of a cash
payment or alternative Incentive made to the holder of such cancelled
Incentive equal in value to such cancelled Incentive. The determinations of
value under this subparagraph shall be made by the Committee in its sole
discretion.
9.11. CHANGE OF CONTROL; TENDER OFFER OR EXCHANGE OFFER.
A. "Change of Control" shall mean:
<PAGE>
1. the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the 1934 Act) of more than 30% of the outstanding shares of the Common Stock;
provided, however, that for purposes of this subsection 1., the following
shall not constitute a Change of Control:
(a) any acquisition of Common Stock directly from ISC,
(b) any acquisition of Common Stock by ISC,
(c) any acquisition of Common Stock by any employee
benefit plan (or related trust) sponsored or maintained by ISC or any
corporation controlled by ISC, or
(d) any acquisition of Common Stock by any
corporation pursuant to a transaction that complies with clauses (a), (b)
and (c) of subsection (A)(3) of this Section 9.11; or
2. individuals who, as of the date of adoption of the
Plan by the Board of Directors of ISC (the "Adoption Date"), constitute
the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the Adoption Date whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered a member of the Incumbent Board,
unless such individual's initial assumption of office occurs as a result of
an actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a person other than the Incumbent Board; or
3. approval by the stockholders of ISC of a reorganization,
merger or consolidation, or sale or other disposition of all of substantially
all of the assets of the Company (a "Business Combination"), in each case,
unless, following such Business Combination,
(a) all or substantially all of the individuals and
entities who were the beneficial owners of ISC's outstanding common stock
and ISC's voting securities entitled to vote generally in the election of
directors immediately prior to such Business Combination have direct or
indirect beneficial ownership, respectively, of more than 50% of the then
outstanding shares of common stock, and more than 50% of the combined voting
power of the then outstanding voting securities entitled to vote
generally in the election of directors, of the corporation resulting from
such Business Combination (which, for purposes of this paragraph (a) and
paragraphs (b) and (c), shall include a corporation which as a result of
such transaction controls the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries), and
(b) except to the extent that such ownership existed
prior to the Business Combination, no person (excluding any corporation
resulting from such Business Combination or any employee benefit plan or
related trust of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 30% or more of
the then outstanding shares of common stock of the corporation resulting
from such Business Combination or 30% or more of the combined voting power of
the then outstanding voting securities of such corporation, and
(c) at least a majority of the members of the
board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board
<PAGE>
at the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or
4. approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
B. Upon a Change of Control, all outstanding
options shall automatically become fully exercisable, all restrictions
or limitations on any Incentives shall lapse and all performance
criteria and other conditions relating to the payment of Incentives shall
be deemed to be achieved or waived by the Company, without the necessity of
any action by any person.
9.12. DEFINITION OF FAIR MARKET VALUE. Whenever "Fair Market
Value" of Common Stock shall be determined for purposes of this Plan,
it shall be the closing sale price on the consolidated transaction reporting
system for New York Stock Exchange issues on the date of reference for a
share of the Common Stock, or if no sale of the Common Stock shall have been
made on that day, on the next preceding day on which there was a sale of
the Common Stock.
<PAGE>
INTERNATIONAL SHIPHOLDING CORPORATION PROXY
650 Poydras Street, New Orleans, Louisiana 70130
- -----------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Niels W. Johnsen, Erik F. Johnsen and
George Denegre, or any one or more of them, as proxies, each with the power
to appoint his substitute, and hereby authorizes each of them to represent and
to vote, as designated below, all the shares of common stock of
International Shipholding Corporation held of record by the undersigned on
February 27, 1998 at the annual meeting of shareholders to be held on
April 15, 1998, or any adjournment thereof.
1. Election of Directors
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary To vote for all nominees
below) _____ listed below _____
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Niels W. Johnsen, Erik F. Johnsen, Niels M. Johnsen, Erik L. Johnsen,
Harold S. Grehan, Jr., Laurance Eustis, Raymond V. O'Brien, Jr.,
Edwin Lupberger, Edward K. Trowbridge
2. Proposal to approve the International Shipholding Corporation Stock
Incentive Plan.
FOR_____ AGAINST_____ ABSTAIN_____
3. Proposal to ratify the appointment of Arthur Andersen LLP, certified
public accountants as the independent auditors for the Corporation for
the fiscal year ending December 31, 1998.
FOR_____ AGAINST_____ ABSTAIN_____
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2, and 3.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation,
please sign full corporate name by President of other authorized officer.
If a partnership, please sign in partnership name by authorized person.
Dated__________________
_______________________
Signature
_______________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
