SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
INTERNATIONAL SHIPHOLDING CORPORATION
(Name of Registrant as Specified in its Charter)
---------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 Rule 0-11:
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
<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 12, 2000
at 2:00 p.m., New Orleans time, for the following purposes:
(i) to elect a board of eight directors to serve until the next annual
meeting of stockholders and until their successors are elected and
qualified;
(ii) to ratify the appointment of Arthur Andersen LLP, certified public
accountants, as independent auditors for the Corporation for the fiscal
year ending December 31, 2000; and
(iii) 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 March 3,
2000, 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
R. CHRISTIAN JOHNSEN
SECRETARY
New Orleans, Louisiana
March 14, 2000
<PAGE>
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 12, 2000, 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 14, 2000.
Only holders of record of the Corporation's Common Stock at the close of
business on March 3, 2000, are entitled to notice of and to vote at the meeting.
On that date, the Corporation had outstanding 6,082,887 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, telegraph, facsimile or e-mail; 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.
1
<PAGE>
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 March 3, 2000, 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.
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
NAME AND ADDRESS OWNERSHIP CLASS(2)
----------------------- ----------- -------
Niels W. Johnsen (1) ............................. 1,020,095(3) 16.77%
(Chairman of the Board of the Corporation)
One Whitehall Street
New York, New York 10004
Erik F. Johnsen (1) .............................. 927,672(4) 15.25%
(President and Director of the Corporation)
650 Poydras Street, Suite 1700
New Orleans, Louisiana 70130
T. Rowe Price Associates, Inc. ................... 914,562(5) 15.03%
100 E. Pratt Street
Baltimore, Maryland 21202
Franklin Resources, Inc. ......................... 570,000(6) 9.37%
777 Mariners Island Boulevard
San Mateo, California 94404
Niels M. Johnsen(1) .............................. 477,103(7) 7.59%
(Executive Vice President of the Corporation)
One Whitehall Street
New York, New York 10004
Dimensional Fund Advisors Inc. ................... 470,429(8) 7.73%
1299 Ocean Avenue
Santa Monica, California 90401
Donald Smith & Co., Inc. ......................... 320,100(9) 5.26%
East 80 Route 4, Suite 360
Paramus, New Jersey 07652
Erik L. Johnsen (1) .............................. 319,799(10) 5.09%
(Executive Vice President of the Corporation)
650 Poydras Street, Suite 1700
New Orleans, Louisiana 70130
- -----
(1) Niels W. Johnsen and Erik F. Johnsen are brothers. Niels M. Johnsen is the
son of Niels W. Johnsen and Erik L. Johnsen is the son of Erik F. Johnsen.
(2) Shares subject to currently exercisable options are deemed to be
outstanding for purposes of computing the percentage of outstanding common
stock owned by the person holding such options but are not deemed to be
outstanding for the purpose of computing the individual ownership
percentage of any other person.
(3) Includes 224,622 shares owned by a corporation of which Mr. Johnsen is a
controlling shareholder.
(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 8,875 shares owned by Mr. Johnsen's wife. Also includes
133,908 shares held by the Erik F. Johnsen Family Limited Partnership of
which Mr. Johnsen is General Partner with sole voting and investment power.
Also includes 49,812 shares
2
<PAGE>
owned by the Erik F. Johnsen Family Foundation of which he claims no
beneficial ownership but maintains voting and disposition rights.
(5) Based on information contained in Schedule 13G as of December 31, 1999.
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 10.9% of the shares outstanding), for which T.
Rowe Price Associates, Inc. (Price Associates) serves as investment advisor
with power to direct investments and/or sole power to vote the securities.
Sole voting power is held only with respect to 81,300 of the shares
reported. Sole dispositive power is reported with respect to all 914,562
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.
(6) Based on information contained in a joint filing on Schedule 13G as of
December 31, 1999 by Franklin Resources, Inc. (FRI), Charles B. Johnson,
Rupert H. Johnson, Jr., and Franklin Advisory Services, LLC. Franklin
Advisory Services, LLC, has sole voting and dispositive power with respect
to all 570,000 shares. FRI is the parent holding company of Franklin
Advisory Services, LLC., an investment advisor. Charles B. Johnson and
Rupert H. Johnson are principal shareholders of FRI. FRI, Charles B.
Johnson, Rupert H. Johnson and Franklin Advisory Services, LLC disclaim any
economic interest or beneficial ownership in any of the shares.
(7) Includes 2,968 shares held in trust for Niels M. Johnsen's daughter of
which he is a trustee, 224,622 shares owned by a corporation of which Mr.
Johnsen is a Vice President and director, 15,750 shares held by the Niels
W. Johnsen Foundation of which Niels M. Johnsen is a director, and 200,000
shares that Mr. Johnsen has the right to acquire pursuant to currently
exercisable stock options.
(8) Based on information contained in Schedule 13G as of December 31, 1999.
Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, furnishes investment advice to four registered investment
companies, and serves as investment manager to certain other investment
vehicles, including commingled group trusts. Dimensional possesses both
voting and investment power over the securities. Dimensional disclaims
beneficial ownership of such securities.
(9) Based on information contained in Schedule 13G as of December 31, 1999.
(10) 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
(3) above, 6,500 shares held in trust for Erik L. Johnsen's two sons of
which he is a trustee, and 200,000 shares that Mr. Johnsen has the right to
acquire pursuant to currently exercisable stock options.
As of March 3, 2000, Niels W. Johnsen and Erik F. Johnsen were the
beneficial owners of a total of 1,947,767 shares (32.02%) of the Corporation's
Common Stock, and, to the extent they act together, they may be deemed to be in
control of the Corporation.
3
<PAGE>
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 eight 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 eight
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 March 3, 2000,
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, 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, 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 only executive officer named in the Summary of Compensation Table
who is not also a nominee for director is Gary L. Ferguson, Vice President and
Chief Financial Officer, who beneficially owns 75,012 shares (1.22% of the
class) including 75,000 shares he has the right to acquire upon the exercise of
currently exercisable stock options.
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(10)
----------------------------------------- ---------------------- ------------
<S> <C> <C>
Niels W. Johnsen, 77 (1)(2) ................................ 1,020,095(11) 16.77%
Chairman of the Board of the Corporation
Erik F. Johnsen, 74 (2)(3) ................................. 927,672(12) 15.25%
President of the Corporation
Niels M. Johnsen, 54 (2)(4) ................................ 477,103(13) 7.59%
Executive Vice President of the Corporation
Erik L. Johnsen, 42 (2)(5) ................................. 319,799(14) 5.09%
Executive Vice President of the Corporation
Harold S. Grehan, Jr., 72 (6) .............................. 92,750 1.52%
Edwin Lupberger, 63 (7) .................................... 1,249 .02%
President, Nesher Investments, LLC; formerly
Chairman of the Board and Chief Executive Officer
of Entergy Corporation; trustee, The Lupberger
Foundation; Advisory Director, Bank One, New Orleans
Raymond V. O'Brien, Jr., 72 (8) ............................ 5,936 .10%
Director, Emigrant Savings Bank, New York
Edward K. Trowbridge, 71 (9) ............................... 625(15) .01%
All executive officers and directors as a group (11 persons) 2,660,568 40.57%
</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.
(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.
4
<PAGE>
(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 has served as a director of the Corporation from its formation
in 1979. He also served as Vice President of the Corporation from its
formation until his retirement at the end of 1997.
(7) Mr. Lupberger served as Chairman of the Board and Chief Executive Officer
of Entergy Corporation from 1985 to 1998.
(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) Shares subject to currently exercisable options are deemed to be
outstanding for purposes of computing the percentage of outstanding common
stock owned by the person holding such options and by all directors and
executive officers as a group but are not deemed to be outstanding for the
purpose of computing the individual ownership percentage of any other
person.
(11) Includes 224,622 shares owned by a corporation of which Niels W. Johnsen is
the controlling shareholder.
(12) 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 8,875 shares owned by Erik F. Johnsen's wife and 103,908 shares
held by the Erik F. Johnsen Limited Family Partnership of which Mr. Johnsen
is General Partner. Also includes 49,812 shares owned by the Erik F.
Johnsen Family Foundation of which he claims no beneficial ownership but
maintains voting and disposition rights.
(13) Includes 2,968 shares held in trust for Niels M. Johnsen's daughter of
which he is a trustee, 224,622 shares owned by a corporation of which Mr.
Johnsen is a Vice President and director, 15,750 shares held by the Niels
W. Johnsen Foundation of which Niels M. Johnsen is a director, and 200,000
shares that Mr. Johnsen has the right to acquire pursuant to currently
exercisable stock options.
(14) 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, 6,500 shares held in trust for Erik L. Johnsen's two sons of
which he is a trustee, and 200,000 shares that Mr. Johnsen has the right to
acquire pursuant to currently exercisable stock options.
(15) Shares owned jointly with wife.
During 1999, 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.
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 1999.
The Board of Directors also has a compensation committee that
administers the Stock Incentive Plan on which Messrs. Lupberger, O'Brien and
Trowbridge serve. The compensation committee met once during 1999.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF COMPENSATION
The following table sets forth for the fiscal years ended December 31,
1997, 1998 and 1999 the compensation paid by the Corporation with respect to the
Chief Executive Officer and the four other most highly compensated executive
officers for fiscal year 1999:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION ALL OTHER
ANNUAL COMPENSATION AWARDS COMPENSATION
-----------------------------------------------------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS(5)
--------------------------- ---- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Niels W. Johnsen, Chairman 1999 $330,000 $ 0 $ 0 $ 0
of the Board of the Corporation (2) 1998 330,000 90,750 0 0
1997 330,000 24,750 0 0
Erik F. Johnsen, President 1999 330,000 0 0 17,132(3)
of the Corporation ................ 1998 330,000 90,750 0 17,132(3)
1997 330,000 24,750 0 17,132(3)
Niels M. Johnsen, Executive Vice 1999 250,000 0 200,000 1,000(4)
President of the Corporation ...... 1998 237,500 68,750 200,000(6) 1,000(4)
1997 220,000 16,500 0 1,000(4)
Erik L. Johnsen, Executive Vice 1999 200,000 0 200,000 1,000(4)
President of the Corporation ...... 1998 189,583 55,000 200,000(6) 0
1997 170,625 13,125 0 0
Gary L. Ferguson, Vice President 1999 148,000 0 75,000 1,000(4)
and Chief Financial Officer 1998 143,833 40,700 75,000(6) 1,000(4)
of the Corporation ................ 1997 138,000 10,350 0 1,000(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 paid in each of the next two years, if the officer remains employed.
(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. 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 1999, 1998 and 1997.
6
<PAGE>
(4) Consists of contributions made by the Corporation to its 401(k) plan on
behalf of the employee.
(5) In 1999 the compensation committee of the Board granted replacement options
with an exercise price of $14.125 in exchange for the surrender of an equal
number of options granted in 1998 with an exercise price of $17.1875 per
share. The surrendered options were canceled.
(6) Surrendered and canceled under the Plan; see footnote (5) above.
STOCK INCENTIVE PLAN
The following three tables present information with respect to stock
option grants, repricings, exercises and values under the Corporation's Stock
Incentive Plan for the executive officers named in the Summary Compensation
Table. Niels W. Johnsen and Erik F. Johnsen have never been granted options
under the Stock Incentive Plan.
OPTIONS GRANTED DURING THE FISCAL YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE
SECURITIES OF TOTAL GRANT
UNDERLYING OPTIONS GRANTED DATE
OPTIONS TO EMPLOYEES EXERCISE EXPIRATION PRESENT
NAME GRANTED(1) IN 1999 PRICE PER SHARE DATE VALUE(2)
---- ----------- --------------- --------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Niels M. Johnsen 200,000 42.11% $14.125 April 15, 2008 $1,246,000
Erik L. Johnsen 200,000 42.11% $14.125 April 15, 2008 $1,246,000
Gary L. Ferguson 75,000 15.79% $14.125 April 15, 2008 $ 467,250
</TABLE>
(1) Immediately exercisable in full. Granted in substitution of an equal number
of options that were cancelled.
(2) The fair value of each of the 475,000 options granted during 1999 estimated
on the date of grant was $6.23 using the Black-Scholes option-pricing model
assuming expected volatility of 18.42% and a risk-free rate of 5.99%.
7
<PAGE>
TEN-YEAR OPTION REPRICING
<TABLE>
<CAPTION>
NUMBER OF LENGTH OF
SECURITIES MARKET PRICE ORIGINAL
UNDERLYING OF STOCK AT EXERCISE PRICE OPTION
OPTIONS TIME OF AT TIME OF NEW REMAINING
REPRICED OR REPRICING OR REPRICING OR EXERCISE AT DATE OF
NAME DATE AMENDED AMENDMENT AMENDMENT PRICE EXCHANGE
---- ---- ----------- ------------ ------------ ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Niels M. Johnsen July 20, 1999 200,000 $14.125 $17.1875 $14.125 105 Months
Erik L. Johnsen July 20, 1999 200,000 $14.125 $17.1875 $14.125 105 Months
Gary L. Ferguson July 20, 1999 75,000 $14.125 $17.1875 $14.125 105 Months
</TABLE>
AGGREGATED OPTION EXERCISES DURING THE FISCAL YEAR ENDED
DECEMBER 31, 1999 AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF
NUMBER OF UNEXERCISED OPTIONS AT UNEXERCISED
SHARES DECEMBER 31, 1999 IN-THE-MONEY
ACQUIRED VALUE EXERCISABLE/ OPTIONS AT
NAME ON EXERCISE REALIZED UNEXERCISABLE DECEMBER 31, 1999
---- ----------- -------- ---------------------- -----------------
<S> <C> <C> <C> <C> <C>
Niels M. Johnsen 0 0 200,000 / 0 0
Erik L. Johnsen 0 0 200,000 / 0 0
Gary L. Ferguson 0 0 75,000 / 0 0
</TABLE>
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, up
to thirty years, and the employee's highest sixty 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:
YEARS OF SERVICE
----------------------------------------------
EARNINGS 15 20 25 30 OR MORE
- -------- -------- -------- -------- ----------
$100,000 $ 21,328 $ 28,437 $ 35,546 $ 42,656
$150,000 33,703 44,937 56,171 67,406
$200,000 46,078 61,437 76,796 92,156
$250,000 58,453 77,937 97,421 116,906
$300,000 70,828 94,437 118,046 141,656
$350,000 83,203 110,937 138,671 166,406
8
<PAGE>
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 2000, the maximum annual benefit generally is $135,000 under
Code Section 415. Furthermore, under Code Section 401(a)(17), the maximum annual
compensation that may be taken into account in calculating benefits in 2000 is
$170,000. These dollar limits are subject to cost of living increases in future
years.
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 1999 with a salary of $170,000, except that Mr. Ferguson was
credited with his actual salary. At December 31, 1999, such individuals had 52,
47, 29, 20 and 31 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 AND COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Decisions on cash compensation of the Corporation's executive officers
for 1999 were made by the Board of Directors. The Compensation Committee of the
Board, which is made up of three independent directors, administers the
Corporation's Stock Incentive Plan and makes decisions on the grant of stock
options. Set forth below is a report submitted by the Board and the Committee
addressing the Corporation's executive compensation policies for 1999.
The Corporation's executive compensation structure for 1999 was
comprised of salaries, annual cash bonuses, and stock option grants. 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 1999 (the "1999 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 1999 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. The profit and expense
reduction targets were not met, and, accordingly, no bonuses were earned by
executive officers in 1999.
In order to encourage the executive officers to remain employed by the
Corporation, one-half of the bonus is paid in the year following that in which
it is earned and the remaining portion is 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.
9
<PAGE>
In 1998, the Compensation Committee granted stock options to Niels M.
Johnsen, Erik L. Johnsen and Gary L. Ferguson, reflecting the Committee's goal
of strengthening the relationship between executive compensation and increases
in the market price of the Common Stock, thereby better aligning the executive
officers' financial interests with those of the Corporation's stockholders. The
size of the option grant to each executive officer was tied to that officer's
level of corporate responsibility. (The Committee also considered information
furnished by executive compensation consultants regarding stock option practices
among comparable companies.)
In July of 1999, the Compensation Committee reviewed the outstanding
options under the Company's Stock Option Plan and determined that the optionees
held options at exercise prices that limited their effectiveness as a tool for
employee retention and as a long-term incentive. To address this problem the
Committee adopted a Stock Option Exchange Program whereby options granted in
1998 with an exercise price of $17.1875 were cancelled and replacement options
were granted at an exercise price of $14.125. The new options maintained the
same vesting schedule as the exchanged options.
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 qualify as "performance-based" compensation and are excluded in
calculating the $1 million limit on executive compensation.
Submitted by the Board of Directors and the Compensation Committee
Niels W. Johnsen Erik F. Johnsen
Niels M. Johnsen Erik L. Johnsen
Harold S. Grehan, Jr. Edwin Lupberger*
Raymond V. O'Brien, Jr.* Edward K. Trowbridge*
- --------------
*Member of the Compensation Committee
BOARD OF DIRECTOR INTERLOCKS,
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
AND CERTAIN TRANSACTIONS
Decisions as to the cash compensation of the executive officers of the
Corporation are made by the Board of Directors. Five of the eight members of the
Board, Messrs. Niels W. Johnsen, Erik F. Johnsen, Niels M. Johnsen, Erik L.
Johnsen and Harold S. Grehan, Jr. (retired), are or were executive officers of
the Corporation and participated in decisions as to the 1999 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 1999.
The Secretary of the Corporation is a son of the President of the
Corporation and 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 1999 were $1,533,000. 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.
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<PAGE>
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 Tankers, Sea
Containers Limited and Alexander and Baldwin) for the Corporation's last five
fiscal years.
COMPARISON OF CUMULATIVE TOTAL RETURNS*
INT'L SHIPHOLDING CORP., S&P 500, PEER GROUP
(PERFORMANCE RESULTS THROUGH 12/31/99)
[LINEAR GRAPH PLOTTED FROM PLOT POINTS BELOW]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
ISH --o-- $100.00 $134.37 $121.40 $114.82 $106.07 $80.19
S & P 500 --o-- $100.00 $137.58 $169.17 $225.60 $290.08 $351.12
Peer Group --|X|-- $100.00 $110.28 $113.16 $140.95 $100.09 $105.37
</TABLE>
*Assumes $100 invested at the close of trading on the last trading day in 1994
in ISH common stock, S&P 500, and Industry Peer Group. Also assumes reinvestment
of dividends.
11
<PAGE>
PROPOSAL TO RATIFY THE SELECTION OF INDEPENDENT AUDITORS
The Corporation's 1999 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,
2000, 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.
Management has not received any notice that a stockholder desires to
present any matter for action by stockholders at the annual meeting and does not
know of any matters to be presented at the annual meeting other than the
election of directors and the ratification of the selection of independent
auditors. The enclosed proxy will confer discretionary authority with respect to
any other matters that may properly come before the meeting or any adjournment
thereof. It is the intention of the persons named in the enclosed proxy to vote
in accordance with their best judgment on any such matter.
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 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.
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<PAGE>
STOCKHOLDER PROPOSALS
Any stockholder who desires to present a proposal qualified for
inclusion in the Corporation's proxy material relating to the 2001 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 15, 2000. Proxies solicited on behalf of the Board
of Directors for the 2001 annual meeting will confer discretionary authority to
vote with respect to any other matter properly submitted by a stockholder for
action at the 2001 annual meeting if the Corporation does not, on or before
January 28, 2001, receive written notice, addressed to the Secretary of the
Corporation at the address shown on the first page of this Proxy Statement, that
the stockholder intends to do so.
BY ORDER OF THE BOARD OF DIRECTORS
R. CHRISTIAN JOHNSEN
Secretary
New Orleans, Louisiana
March 14, 2000
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<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
INTERNATIONAL SHIPHOLDING CORPORATION
APRIL 12, 2000
A[X] Please mark your
votes as in this
example
WITHHOLD AUTHORITY
FOR TO VOTE FOR
ALL NOMINEES NOMINEES
LISTED AT RIGHT LISTED AT RIGHT
<TABLE>
<CAPTION>
<S><C>
1. Election of [ ] [ ] Nominee: Niels W. Johnsen
Directors Erik F.Johnsen
To withhold authority to vote for any individual Niels M. Johnsen
nominee, strike a line through that nominee's name Erik L. Johnsen
in the list at right. Harold S. Grehan, Jr.
Raymond V. O'Brien, Jr.
Edwin Lupberger
Edward K. Trowbridge
2. Proposal to ratify the appointment of Arthur FOR AGAINST ABSTAIN
Andersen LLP, certified public accountants as [ ] [ ] [ ]
the independent auditors for the Corporation for
the fiscal year ending December 31, 1999.
</TABLE>
3. 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 shareholder. If no direction is made, this proxy will be voted
FOR proposals 1 and 2.
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
SIGNATURE DATE .
------------------------------------------------ -------------------
SIGNATURE DATE .
------------------------------------------------ -------------------
SIGNATURE IF HELD JOINTLY
NOTE: 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 or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
14
