INFORMATION REQUIRED IN PROXY STATEMENT
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
/x/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
OMI CORP.
- ------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OMI CORP.
- ------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/x/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or Rule
14a-6(i)(2).
/ / $500 per each party per Exchange Act Rule 14a-6(i)(3), or Rule
14a-6(i)(2).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
<PAGE>
[LOGO}
OMI CORP. o 90 Park Avenue o New York o NY 10016
April 18, 1995
Dear Stockholder:
You are cordially invited to attend the 1995 annual meeting of OMI Corp.
stockholders to be held at The New York Helmsley Hotel, Knickerbocker Suite,
Salon D, third floor, 212 East 42nd Street, New York, New York, on Tuesday, May
23, 1995, at 9:15 in the morning.
Matters to be considered and acted upon by our stockholders include the
election of directors, ratification of the appointment of OMI Corp.'s certified
public accountants and proposals to approve the adoption of the 1995 Stock
Option Plan for Non-Employee Directors and the 1995 Equity Incentive Plan. These
matters and the procedures for voting your shares are discussed in the
accompanying Notice of Annual Meeting and Proxy Statement.
The vote of every stockholder is important regardless of the number of
shares owned. Accordingly, your prompt cooperation in signing, dating, and
mailing the enclosed proxy will be appreciated.
Sincerely,
/s/ JACK GOLDSTEIN
----------------------------
Jack Goldstein
President and
Chief Executive Officer
<PAGE>
Notice of Annual Meeting of Stockholders of OMI Corp.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of OMI Corp.
will be held in the Knickerbocker Suite, Salon D, third floor of The New York
Helmsley Hotel, 212 East 42nd Street, New York, New York, on Tuesday, May 23,
1995, at 9:15 a.m. (Eastern Daylight Savings Time), for the following purposes:
(1) To elect three directors (Class III) for a three-year term, each to
hold office until his successor shall be duly elected and qualified;
(2) To ratify the appointment of Deloitte & Touche LLP as auditors of OMI
Corp. and various subsidiaries for the year ending December 31, 1995;
(3) To consider and vote upon a proposal to approve the adoption by the
Board of Directors of the 1995 Stock Option Plan for Non-Employee
Directors providing for the grant of options of up to 300,000 shares
of the common stock of the Company to Non-Employee Directors, as more
fully set forth in the attached Proxy Statement;
(4) To consider and vote upon a proposal to approve the adoption by the
Board of Directors of the 1995 Equity Incentive Plan providing for the
grant of options and restricted stock of up to 1,000,000 shares of the
common stock of the Company to certain key employees, as more fully
set forth in the attached Proxy Statement;
(5) To consider and act on such other business as may properly come before
the meeting.
The Board of Directors has fixed the close of business on April 5, 1995 as
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting.
A complete list of the stockholders entitled to vote at the meeting will be
located at the offices of OMI Corp., 90 Park Avenue, New York, New York, at
least 10 days prior to the meeting.
By Order of the Board of Directors
/s/ FREDRIC S. LONDON
------------------------------
Fredric S. London
Secretary
New York, NY
April 18, 1995
IMPORTANT
---------
PLEASE DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED STAMPED, ADDRESSED ENVELOPE SO THAT IF YOU ARE
UNABLE TO ATTEND THE MEETING YOUR SHARES MAY NEVERTHELESS BE VOTED.
<PAGE>
PROXY STATEMENT
The following statement is submitted to stockholders in connection with the
solicitation of proxies for the Annual Meeting of Stockholders of OMI Corp.
("OMI" or the "Company") to be held May 23, 1995. OMI's corporate headquarters
is located at 90 Park Avenue, New York, New York 10016, but the Annual Meeting
will be held in the Knickerbocker Suite, Salon D, third floor of The New York
Helmsley Hotel, 212 East 42nd Street, New York, New York. A proxy for this
meeting is enclosed.
The purposes of the meeting are:
(1) to elect three directors for a three-year term, each to hold
office until his successor shall be duly elected and qualified;
(2) to ratify the appointment of Deloitte & Touche LLP as auditors of
OMI and various subsidiaries for the current year;
(3) to consider and vote upon a proposal to approve the adoption by
the Board of Directors of the 1995 Stock Option Plan for Non-Employee
Directors providing for the grant of options of up to 300,000 shares of the
common stock of the Company to Non-Employee Directors;
(4) to consider and vote upon a proposal to approve the adoption by
the Board of Directors of the 1995 Equity Incentive Plan providing for the
grant of options and restricted stock of up to 1,000,000 shares of the
common stock of the Company to certain key employees; and
(5) to consider and act on such other business as may properly come
before the meeting.
The solicitation of the proxy enclosed with this Proxy Statement is made by
and on behalf of the Board of Directors of OMI. The cost of this solicitation
will be paid by OMI. Such costs include preparation, printing and mailing of the
Notice of Annual Meeting, form of proxy and Proxy Statement, which are enclosed.
The solicitation will be conducted principally by mail, although directors,
officers and employees of OMI and its subsidiaries (at no additional
compensation) may solicit proxies personally or by telephone and telegram.
Arrangements will be made with brokerage houses and other custodians, nominees
and fiduciaries for proxy material to be sent to their principals and OMI will
reimburse such persons for their expenses in so doing. OMI is also retaining
D.F. King & Co., Inc. to solicit proxies and will pay D.F. King & Co., Inc. a
fee of $6,500.
The shares represented by all valid proxies in the enclosed form will be
voted if received in time for the meeting and voted in accordance with the
specifications, if any, made on the proxy. If no specification is made, the
proxies will be voted FOR the management slate of directors, FOR the
ratification of the appointment of Deloitte & Touche LLP as auditors, FOR the
adoption of the 1995 Stock Option Plan for Non-Employee Directors and FOR the
adoption of the 1995 Equity Incentive Plan. A proxy is revocable at any time
prior to being voted by giving written notice to the Secretary of OMI or by
attending the meeting and voting in person.
VOTING SECURITIES
As of April 5, 1995, the record date for the meeting, OMI had outstanding
30,670,520 shares of common stock, par value $.50 per share (the "Common
Stock"). Each share of Common Stock is
1
<PAGE>
entitled to one vote per share on all matters to come before the meeting,
including the election of directors. The election for each nominee for director
requires the affirmative vote of the holders of a majority of the shares of
Common Stock cast in the election of directors. Broker non-votes will not be
treated as votes cast with respect to any matter presented at the Annual Meeting
and abstentions will be treated as negative votes on all matters other than
election of directors.
Security Ownership of Certain Beneficial Owners and Management
(a) The following table sets forth, as of March 31, 1995, certain
information with respect to (i) each person known to OMI to be the beneficial
owner of more than five percent (5%) of OMI's Common Stock, which is the only
class of outstanding voting securities, (ii) each director, (iii) each of
certain executive officers and (iv) all directors and all executive officers as
a group:
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership (1) of Class
------------------- ------------------------ --------
Franklin Group of Funds ............... 3,565,100 11.62%
777 Mariners Island Blvd.
P.O. Box 777
San Mateo, CA 94403-7777
Norwest Corporation .................... 2,810,400 9.16%
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Chemical Bank Trust Company ........... 2,333,759 7.61%
as trustee for the OMI Corp.
Employee Stock Ownership Plan
450 West 33rd Street
New York, NY 10001
Lindner Fund, Inc. .................... 2,239,100 7.30%
7711 Carondelet Ave, Suite 700
P.O. Box 16900
(Clayton) St Louis, MO 63105
Wellington Management Co. ............. 2,184,700 7.12%
75 State Street
Boston, Massachusetts 02109
Prudential Insurance Company .......... 2,024,939 6.60%
of America
751 Broad Street
Newark, NJ 07102-3777
Jack Goldstein ........................ 476,100(2) 1.55%
Chaim Barash .......................... 173,405 *
Vincent J. de Sostoa .................. 128,945(3) *
2
<PAGE>
Name of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership (1) of Class
---------------- ------------------------ --------
Fredric S. London .................... 141,554 *
Craig H. Stevenson, Jr. .............. 48,098 *
George W. Vlandis .................... 149,009 *
Livio Borghese ....................... 103,500 *
Constantine G. Caras ................. 5,000(4) *
Steven D. Jellinek ................... 1,000(5) *
Michael Klebanoff .................... 268,044 *
Emanuel L. Rouvelas .................. 18,000(6) *
Franklin W. L. Tsao .................. 100 *
All directors and executive
officers as a group
(20 persons). ...................... 1,888,734 6.16%
- ---------------
* Represents holdings of less than one percent.
(1) Includes all shares with respect to which each person, executive officer or
director directly, through any contract, arrangement, understanding,
relationship or otherwise, has or shares the power to vote or to direct
voting of such shares or to dispose or to direct the disposition of such
shares. With respect to executive officers, includes shares that may be
purchased under currently exercisable stock options granted pursuant to the
OMI Incentive Stock Option Plan, OMI Non-Qualified Stock Option Plan, the
OMI 1990 Equity Incentive Plan and board resolution. Includes restricted
stock granted under the OMI 1990 Equity Incentive Plan and board resolution
and shares that have been allocated under the OMI Employee Stock Ownership
Plan.
(2) Includes 11,100 shares owned jointly with Mr. Goldstein's spouse.
(3) Includes 5,200 shares owned jointly with Mr. de Sostoa's spouse.
(4) Jointly owned with Mr. Caras' spouse.
(5) Jointly owned with Mr. Jellinek's spouse.
(6) Jointly owned with Mr. Rouvelas' spouse.
ELECTION OF DIRECTORS
Pursuant to OMI's Restated Certificate of Incorporation, as amended, and
By-Laws, the Board of Directors of OMI is divided into three classes as set
forth in the following table. Each Class consists of three directors. The
directors in each class hold office for staggered terms of three years. The two
Class III directors, Messrs. Jack Goldstein and Steven D. Jellinek, whose
present terms expire in 1995, are being proposed for reelection for new three
year terms (expiring in 1998) at this Annual Meeting. Chaim Barash whose term
expired in 1995, resigned as director effective January 1, 1995
3
<PAGE>
and as an officer of the Company on November 18, 1994. Craig H. Stevenson, Jr.,
Executive Vice President and Chief Operating Officer of the Company is being
proposed for election to fill the current vacancy.
All nominees in Class III are willing to serve as directors, but if any
nominee becomes unable to serve prior to the Annual Meeting, the persons named
as Proxies have discretionary authority to vote for a substitute nominee named
by Management, or Management may reduce the number of directors to be determined
and elected.
The Board of Directors recommends a vote in favor of the election of the
nominees for directors.
The following table sets forth certain information regarding the members of
and nominees for the Board of Directors:
<TABLE>
<CAPTION>
Class and
Year in First
Name and Other Which Term Principal Became a
Information Age Will Expire Occupation Director
------------- --- ------------ ---------- --------
NOMINEES FOR ELECTION AT THE 1995 ANNUAL MEETING
<S> <C> <C> <C> <C>
Craig H. Stevenson, Jr. ... 41 Class III Executive Vice President and Chief Operating --
Officer
Jack Goldstein ............ 56 Class III President and Chief Executive Officer of 06/11/86
1995 OMI Corp.
Steven D. Jellinek ........ 55 Class III Chairman of the Board, 09/17/91
1995 Jellinek, Schwartz & Connolly, Inc.
DIRECTORS WHOSE TERMS CONTINUE
Livio Borghese ............ 56 Class I Chairman, Curtis Industries, Inc. 01/24/89
1996
Emanuel L. Rouvelas ....... 50 Class I Partner, Preston Gates Ellis & Rouvelas 01/24/89
1996 Meeds, Washington, DC
George W. Vlandis ......... 66 Class I Consultant 05/15/89
1996
Constantine G. Caras ...... 56 Class II Executive Vice President and Chief 11/16/83
1997 Administrative Officer
of Ogden Corporation
Michael Klebanoff ......... 74 Class II Chairman of the Board of 01/29/69*
1997 OMI Corp.
Franklin W. L. Tsao ....... 61 Class II Private Investor, Owner of Shipcentral, 01/04/89
1997 Limited and A. L. Burbank & Company, Ltd.
- -------------
<FN>
* Mr. Klebanoff was a director of OMI during the time that OMI was a
wholly-owned subsidiary of Ogden Corporation and before the distribution of
OMI stock to the Ogden Corporation common stockholders.
</FN>
</TABLE>
4
<PAGE>
ADDITIONAL INFORMATION RELATING TO THE BOARD OF DIRECTORS
During 1994, there were six Board of Directors' meetings of OMI. Messrs.
Goldstein and Jellinek, incumbent directors being nominated for reelection,
attended all of the 1994 meetings of the Board. All other directors attended at
least 75% of the meetings of the Board.
The Audit Committee, comprising Messrs. Caras and Jellinek, recommends to
the Board the auditors to be appointed by the Company, reviews the results of
each year's audit, evaluates any recommendations the auditors may propose with
respect to the Company's internal controls and procedures and oversees the
responses made to any such recommendations. The Compensation Committee,
comprising Messrs. Borghese, Tsao and Rouvelas, reviews and determines the
compensation of the Company's executives. In 1994, the Audit Committee met twice
for the purpose of reviewing audit procedures and inquiring into financial,
legal, and other matters, and the Compensation Committee met three times for the
purpose of reviewing overall compensation and employee benefit practices and
programs. The Company does not have a nominating or similar committee.
Craig H. Stevenson, Jr. was elected Executive Vice President and Chief
Operating Officer in November 1994. He was elected Senior Vice
President/Chartering of the Company in August 1993. For five years prior thereto
he was President of Ocean Specialty Tankers Corp., a marketing manager for
several of the Company's chemical tankers. Mr. Goldstein was appointed President
and Chief Executive Officer of OMI in April 1986. Prior thereto, Mr. Goldstein
was Vice President of Overseas Shipholding Group, Inc. Since 1984, Mr. Jellinek
has been Chairman of Jellinek, Schwartz & Connolly, Inc., a firm specializing in
legislative and regulatory policy, strategic analysis and research management in
the areas of environment, energy and health.
Mr. Caras was a Vice President of Ogden Corporation until June 1986, at
which time he was appointed Executive Vice President and Chief Administrative
Officer of Ogden Allied Services Corporation. In July 1990, Mr. Caras was
appointed Executive Vice President of Ogden Corporation. Mr. Klebanoff, who was
President of the Company from 1969 to 1983, has been the Chairman of the Board
of OMI since 1983. From 1973 until 1994, Mr. Tsao served as President of
Shipcentral, Limited, a shipbrokering and real estate investment firm, and since
1978 as President of A. L. Burbank & Company, Ltd., shipbrokers. In 1994, he
resigned as President but continues to own such entities.
Mr. Borghese is presently Chairman of Curtis Industries, Inc. From October
1988 to December 1989, Mr. Borghese served as Chairman, International Investment
Banking of Prudential-Bache Capital Funding and from 1990 to 1992 Mr. Borghese
was Chairman of Borghese Triguboff Investment Corporation. For more than five
years prior thereto, Mr. Borghese was a Senior Managing Director and member of
the Executive Committee of Bear Stearns & Co., Inc. Mr. Rouvelas has been a
Partner in the law firm of Preston Gates Ellis & Rouvelas Meeds since 1974. Mr.
Vlandis was appointed Assistant Vice President of OMI in 1984 and Vice
President, Chartering in 1985. In 1986, Mr. Vlandis was appointed Senior Vice
President/Chartering, which position he maintained until his retirement in
February, 1994. Mr. Vlandis currently provides consulting services to OMI
pursuant to an agreement with the Company.
5
<PAGE>
Mr. Borghese is a director of United Kingdom Fund, Inc., Curtis Industries,
Inc., Noel Group, Inc. and Revco D. S., Inc. Mr. Caras is a director of
International Terminal Operating Co., Inc. and Ogden Corporation. Mr. Goldstein
is a director of IMC (Holdings) Ltd., a joint venture partner of the Company.
Mr. Jellinek is a director of Lineguard, Inc. Mr. Tsao is a director of Mosaic
Alliance Corporation and Geraldton Navigation Company Incorporated, affiliates
of the Company.
Mr. Tsao and Mr. Vlandis have notified the Company that they intend to
resign as directors during 1995. Following such resignations the Board of
Directors will fill the vacancies, in accordance with the provisions of the
By-laws. The Company is currently in the process of identifying successors to
Messrs. Tsao and Vlandis, who are expected to be persons not previously employed
by the Company.
COMPENSATION OF DIRECTORS
Directors who are also officers or employees of the Company do not receive
any fees or remuneration for services as members of the Board of Directors or of
any Committee thereof. Each outside director in 1994 was compensated $20,000
annually and $750 per board and committee meeting.
Mr. Vlandis has served as a consultant to the Company since his retirement
in February 1994. The term of his agreement with the Company will expire on
February 28, 1996. Payments under his agreement have been fully made as of the
date hereof.
Executive Compensation
The Summary Compensation Table shows the compensation for the past three
years of each of the Company's six most highly compensated executive officers
including the Chief Executive Officer (the "named executive officers").
6
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards
---------------------------------- -----------------------
Other Restricted
Annual Stock All Other
Name and Compensation Awards Options/ Compensation
Principal Position Year Salary ($) Bonus ($) ($) ($)(1) SARs(#)(2) ($)(3)
- ------------------ ---- ---------- --------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Jack Goldstein ....... 1994 $380,000 $ 0 $ 0 $ 0 $ 0 $30,000
1993 333,144 40,000 0 0 0 30,000
1992 327,600 0 0 0 0 30,000
Chaim Barash ......... 1994 273,000 0 0 0 0 29,442
1993 229,418 32,000 0 0 7,000 30,522
1992 225,600 0 0 0 0 30,522
Craig H.
Stevenson, Jr. ...... 1994 225,000 0 0 99,375 40,000 27,306
1993 69,423 10,000 0 0 0 88,109
1992 0 0 0 0 0 0
Vincent J. de Sostoa . 1994 225,000 0 0 0 0 26,824
1993 191,283 25,000 0 0 7,000 30,522
1992 188,100 0 0 0 0 30,522
Fredric S. London .... 1994 218,000 0 0 0 27,242
1993 187,724 25,000 0 0 7,000 30,522
1992 184,600 0 0 0 0 30,522
George W. Vlandis .... 1994 143,384 0 0 0 0 23,089
1993 195,859 15,000 0 0 7,000 32,106
1992 192,600 0 0 0 0 32,106
- -----------------
<FN>
(1) The number and value of restricted stock holdings of each of the named
executive officers on December 31, 1994 was 200,000 and $1,325,000 (Mr.
Goldstein); 15,000 and $99,375 (Messrs. Barash, Stevenson and Vlandis); and
12,000 and $79,500 (Messrs. de Sostoa and London). The value of the
restricted stock is determined by multiplying the total shares awarded by
the closing price on the New York Stock Exchange on December 31, 1994
($6.625). To the extent dividends are declared on OMI Common Stock,
dividends will be paid to these restricted stock holdings.
(2) Options granted under the 1990 Equity Incentive Plan for the named
executive officers, with the exception of Mr. Stevenson who was granted
options in 1994 pursuant to a stock option and restricted stock award
agreement between Mr. Stevenson and the Company as an inducement to enter
into employment.
(3) The amount for 1994 includes purchase value of shares allocated to accounts
of named executive officers under the Company's Employee Stock Ownership
Plan at a value of $14,800 (Mr. Goldstein); $18,000 (Messrs. Stevenson,
Barash, de Sostoa and London); $17,002 (Mr. Vlandis), amounts deferred or
contributed under the OMI Corp. Savings Plan at a value of $15,200 (Mr.
Goldstein); $10,920 (Mr. Barash); $9,000 (Mr. Stevenson); $7,960 (Mr. de
Sostoa); $8,720 (Mr. London); $5,735 (Mr. Vlandis), and amounts reflecting
the cost of group-term life insurance coverage over $50,000 of the named
executive officers, with the exception of Mr. Goldstein, for a combined
value of $163,903 for each of the named executive officers.
The amount for Mr. Stevenson in 1993 includes $73,667 in relocation
expenses paid to or on behalf of Mr. Stevenson, as well as purchase value
of shares allocated to Mr. Stevenson's account under the Company's Employee
Stock Ownership Plan at a value of $11,913, amounts deferred or contributed
under the OMI Corp. Savings Plan at a value of $2,446 and the cost of
group-term life insurance coverage over $50,000 for a combined value of
$88,109.
</FN>
</TABLE>
7
<PAGE>
Employment Contracts
The Company has employment agreements with Messrs. Goldstein, Stevenson, de
Sostoa and London which provide for an annual base salary and a performance
incentive bonus. Each of these agreements also provide that if the employee (i)
is terminated without cause, (ii) voluntarily terminates his employment within
90 days of a relocation or reduction in compensation or responsibilities, or
(iii) is disabled, such employee will continue to receive base salary and other
benefits until December 31, 1996 or twelve months from the date of termination,
whichever is later. In addition, if any such employee is terminated without
cause (other than for reasons of disability) within 2 years of a Change of
Control (as defined in OMI's Separation Allowance Program), OMI will pay such
employee an amount equal to 3 times the sum of his then current base salary and
his maximum incentive bonus.
Option Grants in 1994.
The following table shows information concerning stock options granted to
the named executive officer during calendar year 1994, pursuant to a Stock
Option and Restricted Stock Award Agreement dated February 23, 1994. OMI did not
grant any stock options to executive officers under the OMI 1990 Equity
Incentive Plan, OMI Incentive Stock Option Plan and the OMI Non-Qualified Stock
Option Plan. OMI did not grant any Stock Appreciation Rights in fiscal year
1994.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Grant Date
Individual Grants Value(2)
---------------------------------------------------- -----------
% of Total
Options Grant
Number of Granted to Exercise or Date
Options Employees Base Price Expiration Present
Name Granted (1) in Fiscal Year (per Share) Date Value ($)
---- ----------- -------------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Craig H. Stevenson, Jr. .............. 40,000 100% $6.25 2-23-04 $106,640
- ----------------
<FN>
(1) Options for the named executive officer were granted on February 23, 1994.
33 1/3% of the options became exercisable on August 23, 1994 and the
remaining options will become exercisable at one-third increments on August
23, 1995 and August 23, 1996. The exercise price of the options was the
fair market value of the Company's Common Stock on the date of grant.
(2) The alternative grant value was calculated using the Black-Scholes pricing
model with an assumed volatility of .33, a risk free rate of 6.48%, zero
dividend rate, and a ten year exercise term.
</FN>
</TABLE>
8
<PAGE>
Aggregate Option Exercises in 1994 and Year-End Options Values
The following table shows the exercise of stock options or tandem SARs
during fiscal year 1994 by each of the named executive officers and the fiscal
year-end value of unexercised options and SARs.
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Shares/SARs Options/SARs at Fiscal In-the-Money Options/SARs
Acquired Value Year End (#)(1) at Fiscal Year End ($)(2)
on Exercise Realized ------------------------- --------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jack Goldstein ............. 0 0 142,333 0 $219,770 0
Craig H. Stevenson, Jr. .... 0 0 13,333 26,667 5,000 10,000
Chaim Barash ............... 3,500 9,406 89,565 0 127,148 0
George W. Vlandis .......... 0 0 72,182 4,667 97,895 9,917
Vincent J. de Sostoa ....... 0 0 67,333 4,667 64,958 9,917
Fredric S. London .......... 0 0 67,333 4,667 64,958 9,917
- -------------
<FN>
(1) Under the Company's stock option plans, options vest over a period of three
to five years, are granted at an exercise price of 100% of fair market
value and are exercisable over a period of not more than ten years from the
date of grant.
(2) Based on the closing price on the New York Stock Exchange on December 31,
1994 ($6.625).
</FN>
</TABLE>
9
<PAGE>
Report on Senior Executive Compensation
by the Board of Directors' Compensation Committee
OMI's senior executive compensation program is designed to ensure that OMI
can attract and retain executives who will contribute to OMI's success by their
ability, ingenuity and industry, and to enable these executives to participate
in the long-term success and growth of OMI by giving them a proprietary interest
in OMI. OMI's senior executive compensation program recognizes and encourages
individual skills, commitment to corporate goals, and contributions to Company
and shareholder interests.
Compensation Philosophy
OMI's senior executive program, which governs compensation paid to senior
executive officers (OMI's Chief Executive Officer and next three highest paid
executive officers whose cash compensation exceeded $100,000 for the fiscal year
ended December 31, 1994) as well as other senior executives, is designed to:
o encourage senior executives to identify with the goals and objectives
of the Company and to reward the achievement of those goals and
objectives;
o acknowledge individual contributions of executives in achieving
corporate goals;
o encourage executives to be creative and aggressive, within the bounds
of sound reason, in working toward Company and shareholder objectives;
o sufficiently relate compensation to performance to encourage highly
focused attention to corporate goals, while at the same time
incorporating recognition of the cyclical nature of the shipping
industry;
o provide an appropriate mix of short and long-term compensation to
reward both current performance and future commitment to OMI; and
o establish a working environment that encourages talent, rewards good
judgment, and maintains a quality working environment.
In the highly cyclical bulk shipping market, the knowledge and judgment of
a company's senior executives are particularly critical to the success of the
enterprise. A lost opportunity may not be presented again for many years.
Therefore, the OMI's senior executive compensation program takes into account
not only the normal financial considerations, but also, through discussions with
the Company's senior executives and through presentations at Board of Directors'
meetings, an assessment of how well the executive has judged the problems and
opportunities presented to OMI in the course of market changes.
OMI's senior executive compensation program, which is based on an
assessment undertaken by an independent compensation consultant, includes base
salary, bonus, stock options and grants of restricted stock. Total compensation
considerations include factors such as earnings per share,
10
<PAGE>
strategic decisions that will position the Company for future long-term success,
continued efforts to improve the efficiency, quality and safety of shipping
operations and efforts to develop and improve the business of the Company. No
specific weights are assigned to any factors. The Compensation Committee makes a
subjective judgment based on consideration of all factors.
Annual Compensation
Base salaries of OMI's Chief Executive Officer and other named executive
officers are listed in the Executive Compensation Table on page 7. Base salaries
are reviewed annually. Upward adjustments to base salaries are determined by an
assessment of the base salaries included in employment contracts for the Chief
Executive Officer and the named executive officers, recent issues and
difficulties addressed by the Chief Executive Officer and the named executive
officers, efforts expended to carry out job responsibilities, general pay
practices of similar companies with similar job categories and internal equity
considerations. Base salaries increased in 1991 and 1992 in part as a result of
an independent compensation consultant's conclusion in 1989 that OMI's salary
structure was below or significantly below the competitive market. OMI tries to
maintain a competitive salary structure in comparison to the median salaries
paid in the shipping industry in order to attract and retain the highly
qualified individuals necessary to ensure OMI prospers and rewards shareholder
confidence. While now being within this competitive range, OMI's salary for its
Chief Executive Officer is still at the low end of this range and considered
moderate for the shipping industry. For comparison purposes, the Compensation
Committee considered the salaries paid to reasonably comparable transportation
companies included in the Dow Jones Transportation Average Index and the Dow
Jones Marine Transportation Index.
OMI's Chief Executive Officer and senior executive officers are also
qualified for annual bonuses. Bonuses, along with increases in base salaries,
provide the short-term incentive portion of executive compensation at OMI. The
Board of Directors recently approved a bonus plan which provides bonuses based
exclusively on the Company's cash flow and stock price and upon the performance
of the individual executive. In 1992, no bonuses were paid, reflecting, in large
part, the cyclical nature of the shipping market and its resulting impact on
OMI. In 1993, bonuses were a modest portion of the compensation of OMI's Chief
Executive Officer and other executive officers. In 1993, OMI reported a net loss
of $.29 per share, compared to a net loss of $.36 per share in 1992. 1993 was a
difficult year for bulk shipping companies, including OMI. Despite weak
financial results, however, OMI's Chief Executive Officer and named executive
officers were able to market successfully $170 million of 10-year unsecured
notes at an interest rate of 10.25%. With the proceeds of this sale, OMI
restructured its outstanding debt and undertook new capital investment in
foreign-flag assets, which put it in its best financial position in its history
as a public company. The Compensation Committee carefully considered this factor
in its decision to grant modest bonuses in 1993. In 1994, no bonuses were paid
due to the continuing losses of the Company. No raises were given in 1994 to the
named executive officers except for Mr. Stevenson who assumed additional duties
upon being named Executive Vice President and Chief Operating Officer.
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Long-Term Compensation Awards
OMI's compensation program also includes long-term compensation awards for
OMI's Chief Executive Officer and senior executive officers. Long-term
compensation awards granted from 1992 through 1994 are listed on page 7. Stock
options can be granted to the Chief Executive Officer and named executive
officers as part of OMI's effort to encourage and reward effective leadership
and significant contributions to OMI's long-term growth and development. The
long-term incentive portion of the senior executive compensation plan also
creates further identity of interest between senior executives and shareholders.
Stock options are considered annually for the Chief Executive Officer and named
executive officers, based on financial, operational, and personal performance
considerations, including, with respect to both individual awards and the total
number awarded, the Company's cash position. No stock options were granted to
the Chief Executive Officer nor the named executive officers in 1994, except for
Mr. Stevenson. If the 1995 Incentive Equity Plan is approved, no further awards
would be made under the 1990 Equity Incentive Plan (see the description of
Proposals). In currently existing stock option plans stock options vest over a
three-year period (and in some instances, a five-year period) beginning one year
after the date of the grant. These options encourage long-term commitment to OMI
by its Chief Executive Officer and named executive officers. Pursuant to OMI's
1990 Equity Incentive Plan, the option price per share purchasable under a stock
option is not permitted to be less than fair market value of the stock on the
date of the grant of the option. Only an increase in the value of the stock will
result in additional compensation, linking this portion of the compensation
directly to the long-term success of the Company and the long-term interests of
the shareholders.
The long-term incentive portion of OMI's senior executive compensation plan
also includes annual consideration of the grant of restricted stock to senior
executives. The grant of restricted stock provides an additional long-term
incentive for the Chief Executive Officer and senior executive officers who
provide outstanding leadership for the Company. Restricted stock grants can be
given in combination with other stock options or alone and are based on
individual and Company performance. OMI's grants of restricted stock vest over a
period of three years (except for restricted stock granted to the Chief
Executive Officer which vests over a ten-year period), providing an incentive
for the officers to make a long-term personal investment in the growth and
development of OMI. No grants of restricted stock were given to the Chief
Executive Officer and named executive officers in 1994, except for Mr.
Stevenson.
Policy with respect to Section 162(m)
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the
tax deduction that a company can take with respect to the compensation of
certain of its executive officers to the extent that such compensation of
certain of its executive officers to the extent that such compensation exceeds
$1 million in a taxable year, unless the compensation qualifies for any of
several exemptions provided in the statute, including an exemption for
"performance based" compensation. The Company does not expect that the total
deductible compensation for any of the Company's executive officers will exceed
the amount of $1 million in any year in the immediate future. Therefore, no
action with respect to this limit has been taken by the Company at this time.
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Compensation Committee
The OMI Board of Directors' Compensation Committee, which is responsible
for the administration of OMI's senior executive compensation program, is
composed entirely of independent outside directors. The Compensation Committee
reviews all aspects of senior executive compensation and recommends to the Board
of Directors annual and long-term components of Chief Executive Officer and
named executive officer compensation.
COMPENSATION COMMITTEE
Emanuel L. Rouvelas, Chairman
Livio Borghese
Franklin W. L. Tsao
Compensation Committee Interlocks and Insider Participation
The Compensation Committee comprises Messrs. Borghese, Rouvelas and Tsao,
all of whom are directors of the Company and none of whom are or were officers
of the Company or any of its subsidiaries. Mr. Rouvelas is a partner in the law
firm of Preston Gates Ellis & Rouvelas Meeds which is a partner in Preston Gates
& Ellis which rendered legal services to the Company during 1994 and is expected
to continue to do so. The Company and companies controlled by members of Mr.
Tsao's family formed Mosaic Alliance Corporation and Geraldton Navigation
Company Incorporated which are each 49.9% owned by the Company and which are the
owners and operators of liquid and dry bulk vessels. Mr. Tsao is Chairman of the
Board of Mosaic and a director of Geraldton Navigation. The Company also owns
25% of Gainwell Investment Limited, an investment company which is 75% owned by
companies controlled by members of Mr. Tsao's family. Mr. Tsao is also owner of
A. L. Burbank & Co., Ltd. and Shipcentral, Limited, international shipbrokers
which on occasion represent the Company.
Comparative Performance Graph
Set forth below is a graph comparing the cumulative total shareholder
return on the Company's Common Stock with the cumulative total return of the Dow
Jones Equity Market Index and the Dow Jones Marine Transportation Index for the
five-year period ended December 31, 1994.
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COMPARISION OF FIVE YEAR CUMULATIVE TOTAL RETURNS
Among OMI Corp., Dow Jones Equity Market Index and
Dow Jones Marine Transportation Index
Fiscal Year Ending December 31
GRAPHICAL REPRESENTATION OF DATA TABLE BELOW
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
OMI Corp. ................... 100 80 110 105 130 121
Dow Jones Equity Index ...... 100 125 165 179 190 184
Dow Jones Marine
Transportation Index ...... 100 78 107 60 90 8
- -------------------
The total return on the Company's Common Stock and each index assumes the value
of each investment was $100 on December 31, 1989, and that all dividends were
reinvested.
Employee Benefit Plans
OMI established the OMI Corp. Savings Plan (the "Savings Plan"), effective
July 1, 1993. The Savings Plan covers all employees of the Company, other than
leased employees, non-resident aliens or those employees covered by a negotiated
collective bargaining agreement. The Savings Plan is subject to IRS approval as
a qualified and tax exempt plan and trust so that contributions may be deducted
by the Company for federal income tax purposes. This Savings Plan operates
pursuant to Section 401(k) of the Internal Revenue Code under which eligible
employees are permitted to make before tax salary deferrals to individual
participant accounts. The Savings Plan currently allows participants to defer
receipt of up to 2% of compensation (including bonus and excluding non-cash
compensation or contributions to other benefit plans maintained by the Company,
if any) with the Company matching 100% of employee elective deferrals. Although
discretionary Company profit
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sharing contributions are allowed under the Savings Plan there were no such
contributions made during the year. Participant accounts, other than elective
deferrals and earnings on deferred amounts, vest at a graduated rate of 20% per
year of service to the Company. Matching contributions of $7,600, $4,500,
$5,460, $2,868, $3,980 and $4,360 were made for Messrs. Goldstein, Stevenson,
Barash, Vlandis, de Sostoa and London during 1994.
Proposals to be Acted on
In addition to the election of the three new directors, the following
matters will be acted on:
1. Approval of the 1995 Stock Option Plan for Non-Employee Directors
The Board of Directors has adopted, subject to approval by the
stockholders, the OMI Corp. 1995 Stock Option Plan for Non-Employee Directors
(the "Directors' Plan"). The Directors' Plan is designed to aid the Company in
securing for the Company and its stockholders the benefits of having experienced
and highly qualified non-employee directors and to provide to such directors the
benefits of the incentive inherent in common stock ownership. The Board of
Directors recommends that the stockholders approve the Directors' Plan. The
Directors' Plan will have been approved if a majority of the shares present, or
represented, and entitled to vote at the meeting are voted in favor of it.
The principal features of the Directors' Plan are summarized below, but
this summary is qualified in its entirety by reference to the terms of the
Directors' Plan, which is attached hereto as Exhibit A.
Summary of Directors' Plan
Subject to approval at this annual meeting, grants of stock options were
made, as of April 13, 1995, the date that the Directors' Plan was authorized and
adopted by the Board of Directors, to each person then serving as a director,
and grants of stock options will automatically be made to each individual who is
first elected to the Board of Directors at a meeting of stockholders held at any
time subsequent to such date, provided the individual (i) is not and has not
been an employee of the Company or any of its subsidiaries or affiliates and
(ii) is not otherwise eligible to participate in any plan of the Company or any
of its subsidiaries or affiliates which would entitle such director to acquire
securities or derivative securities of the Company. Grants of stock options will
also automatically be made to each director who is at any time subsequent to
April 13, 1995, appointed by the Board of Directors for the first time to fill a
vacancy on the Board, subject to the same eligibility requirements stated above.
Subject to the maximum number of shares which are subject to the Plan and
the conditions stated above, options were granted to each then eligible director
on the date on which the Directors' Plan was authorized and adopted by the Board
of Directors and options will be granted on the date of each annual meeting of
stockholders held thereafter to each director who is first elected at each such
meeting, or on the date any director is first appointed to the Board of
Directors to fill a vacancy on the Board, until the annual meeting of
stockholders held in the year 2006.
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Each option will permit the non-employee director, for a period of up to
ten years from the date of grant (unless the period is shortened as indicated
below), to purchase from the Company 30,000 shares of the Company's Common Stock
(subject to adjustment as provided in the Directors' Plan) at the option
exercise price. The initial option exercise price is the higher of the fair
market value of such shares on the date the option is granted or the average of
such fair market values for the ten days ending on such date of grant. The
option exercise price with respect to shares which first become exercisable on
the second and third anniversary dates of the date of grant, as discussed in the
next paragraph, will increase by 15% over the option exercise price applicable
to shares which first became exercisable in the year immediately preceding each
such anniversary date.
Except as noted below, an option shall not be exercisable prior to the
expiration of one year from the date of grant. One-third of the total number of
shares covered by the option shall become exercisable on the first anniversary
date of the grant and an additional one-third of the total number of shares
covered by the option shall become exercisable on each of the two succeeding
anniversary dates of the grant date. Except as noted below, an option may be
exercised only if the optionee at the time of exercise is, and at all times
since the grant of the option, has been a director of the Company. Each option
is nonassignable and non-transferable other than by will or the laws of descent
and distribution.
In the event a non-employee director terminates service on the Board of
Directors after December 31, 1995, by reason of retirement, each unexpired
option held by the optionee will, to the extent otherwise exercisable on such
date, remain exercisable until the earlier of ten years from the date of grant
or three years following such retirement. The term "retirement" means
termination after at least six years of service as a director.
In the event a non-employee director terminates service on the Board of
Directors by reason of death or disability, any then unexpired option that has
been outstanding for at least six months will become exercisable in its entirety
and those and all other exercisable options will continue to be exercisable
until the earlier of ten years from the date of grant or one year after such
termination. In the event a non-employee director terminates service on the
Board of Directors other than by reason of retirement, death or disability, all
unexercised options shall terminate upon such termination.
In the event of a "change in control" of the Company at any time on or
after April 13, 1995, then all of the optionee's outstanding options become
immediately exercisable unless a resolution of the Board of Directors
specifically directs otherwise. However, the provisions regarding termination of
service as a director continue to apply and in no event may an option be
exercised prior to the expiration of six months from the date of grant or after
ten years from the date of grant. Change in control is generally defined to
include (i) a change in control with respect to the Company that would be
required to be reported in the Current Report on Form 8-K, as described in the
Directors' Plan, (ii) the acquisition by a "person", as defined in the
Directors' Plan, of 20% or more of the Company's voting securities or (iii) if
individuals constituting the Board of Directors of the Company on April 13,
1995, cease to constitute a majority of the whole Board of Directors of the
Company.
Payment of the option price upon exercise may be made in cash, by the
delivery of Common Stock already owned by the non-employee director for at least
six months, a combination of cash and
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shares, or in accordance with a cashless exercise program under which shares of
Common Stock may be issued directly to the optionee's broker or dealer upon
receipt of the purchase price in cash from the broker or dealer. No optionee
shall have any rights to dividends or other rights of a stockholder with respect
to his or her shares subject to the option until the optionee has given written
notice of exercise and has paid in full for such shares. The optionee shall be
required to pay to the Company, such amount as the Company may demand to satisfy
any tax withholding obligation. Tax withholding obligations may be met by a
withholding of stock otherwise deliverable to the optionee under procedures
approved by the Board of Directors.
An aggregate of 300,000 shares of Common Stock (subject to adjustment as
described below and provided in the Directors' Plan) will be subject to the
Plan. Shares subject to options which terminate or expire unexercised will
become available for future option grants.
The Directors' Plan will be administered by the Board of Directors who will
be authorized to interpret the Directors' Plan. However, the Board will have no
authority in respect of the selection of directors to receive options, the
number of shares subject to the Directors' Plan, the number of options to be
granted, the number of shares in each grant, the option price for shares subject
to options, the period during which options may be granted or exercised, or the
class of persons eligible to receive options. The Board also may not materially
increase the benefits under the Directors' Plan or, without further approval of
the stockholders, amend the Plan in any of the foregoing respects provided,
however, that the Directors' Plan provisions affecting the amount of Common
Stock to be awarded to eligible directors, the timing of those awards or the
determination of those eligible to receive such awards may not be amended more
than once every six months, other than to comport with changes in the Internal
Revenue Code of 1986, as amended (the "Code"), the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder. No shareholder
approval will be required, however, if the Board of Directors obtains a legal
opinion stating that such approval is not required under the Securities Exchange
Act of 1934, in order for the options granted under the Plan to continue to be
exempt from the operation of Section 16(b) of such Act.
Adjustments shall be made in the number and class of shares available under
the Directors' Plan and the number, class and price of shares subject to
outstanding option grants, in each such case to reflect changes in the Company's
Common Stock through changes in the Company's corporate structure or
capitalization such as through a merger or stock split.
Certain United States Federal Income Tax Consequences
The following is a brief description of certain significant United States
federal income tax consequences, under existing law, of the Directors' Plan.
This discussion applies primarily to non-employee directors who are citizens or
resident aliens (as defined in the Code) of the United States whose tax home or
abode (as defined in the Code) is in the United States.
This discussion is based on the Code and applicable regulations thereunder
in effect on the date hereof. Any subsequent changes in the Code or such
regulations may affect the accuracy of this discussion. In addition, this
discussion does not consider any state, local or foreign tax
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consequences or any circumstances that are unique to a particular Directors'
Plan participant that may affect the accuracy or applicability of this
discussion.
The grant of an option under the Directors' Plan will not result in taxable
income to the non-employee director or an income tax deduction to the Company.
The non-employee director recognizes ordinary income at the time the option is
exercised in the amount by which the fair market value of the shares acquired
exceeds the option price. The Company is entitled to a corresponding ordinary
income tax deduction at that time equal to the amount of such ordinary income
that is reported by the non-employee director on his or her federal income tax
return. Taxation and commencement of the holding period with respect to such
shares (and, therefore, the timing of the Company's deduction) may be postponed
if the shares acquired upon exercise are subject to the types of restrictions
described in Section 83 of the Code. Section 83 of the Code provides that so
long as the sale of the stock at a profit could subject a person (an "insider")
to suit under Section 16(b) of the Exchange Act (generally six months after the
exercise date), the shares will be deemed to be subject to such a restriction.
However, a non-employee director/insider receiving stock so restricted may
elect, pursuant to Code Section 83(b), to be taxed on the exercise date by
filing an appropriate form with the Internal Revenue Service within 30 days of
his or her exercise date.
At the close of business on April 5, 1995, the market value of the total
number of shares included in the Directors' Plan was $1,800,000.
The Board of Directors recommends that you vote FOR the proposal.
2. Approval of the 1995 Equity Incentive Plan
The Board of Directors has adopted, subject to approval by the
stockholders, the OMI Corp. 1995 Incentive Equity Plan (the "Incentive Plan")
for key employees, including officers, of the Company and its subsidiaries to
replace the 1990 Equity Incentive Plan currently in effect (the "Current Plan").
The Incentive Plan is more flexible than the Current Plan, containing provisions
which the Company believes are similar to those presently adopted by other large
corporations. The Incentive Plan is designed to provide for the grant of options
that qualify as "incentive stock options" under the Internal Revenue Code of
1986, as amended (the "Code"), options other than "incentive stock options,"
tandem stock appreciation rights related to such options as well as provide for
the award of restricted stock and bonuses payable in stock. In addition to the
replacement of the Current Plan, the purpose of adopting the Incentive Plan is
to continue to have available a stock compensation plan that will (i) encourage
and enable participating employees of the Company and its subsidiaries to
acquire a continuing proprietary interest in the success of the Company and its
subsidiaries through stock ownership and (ii) assist the Company and its
subsidiaries in attracting and retaining highly qualified and experienced
employees.
The Board of Directors recommends that the stockholders approve the
Incentive Plan. The affirmative vote of a majority of the votes cast by the
holders of the outstanding shares of the Company's common stock (the "Common
Stock") entitled to vote is required for the adoption of the Incentive Plan.
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The principal features of the Incentive Plan are summarized below, but this
summary is qualified in its entirety by reference to the terms of the Incentive
Plan, which is attached hereto as Exhibit B. Unless the context clearly
indicates otherwise, references in this Incentive Plan description to "option"
or "options" shall include any tandem stock appreciation right that may be
granted in connection with such option or options under the terms of the
Incentive Plan.
Summary of Incentive Plan
Subject to adjustment as noted below, the total number of shares that may
be optioned or awarded under the Incentive Plan is 1,000,000 shares of Common
Stock. If the Incentive Plan is approved by stockholders, no further awards will
be made under the Current Plan. However, approximately 655,000 shares will
continue to be reserved with respect to options granted under the Current Plan.
No employee may receive, over the term of the Incentive Plan, awards of
restricted stock for more than 150,000 shares of Common Stock or awards in the
form of options, whether incentive stock options or options other than incentive
stock options, to purchase more than 150,000 shares of Common Stock. Any shares
subject to an option under the Incentive Plan which for any reason expires, is
relinquished or is terminated unexercised and any restricted stock which is
forfeited may again be optioned or awarded under the Incentive Plan; provided,
however, that forfeited shares shall not be available for further awards if the
employee has realized any benefits of ownership from such shares.
Key salaried employees, including officers, of the Company and its
subsidiaries (but excluding non-employee directors), shall be eligible to
participate in the Incentive Plan. The Compensation Committee of the Board of
Directors (the "Committee") will administer the Incentive Plan and determine the
recipients of options and awards, their terms and conditions within the
parameters of the Incentive Plan and the number of shares covered by each option
or award. The Committee may adopt rules and regulations to carry out the
Incentive Plan and its decision with regard to any question arising under the
Plan shall be final and conclusive on all employees of the Company or its
subsidiaries participating or eligible to participate in the Plan. The Committee
shall consist of not less than three outside non-employee directors of the
Company. Such directors are not eligible to participate in the Incentive Plan.
Moreover, no director that has been granted an option or awarded restricted
stock or bonuses payable in Common Stock under the Incentive Plan within one
year prior to appointment may serve on the Committee. No award or option may be
granted under the Incentive Plan more than ten years from the date the Incentive
Plan is adopted by the Board of Directors of the Company or the date the
Incentive Plan receives shareholder approval, whichever is earlier, but awards
or options theretofore granted may extend beyond that date. There are currently
approximately 950 employees of the Company and its subsidiaries, including all
executive officers of the Company (13 in number, including the 2 officers who
are also directors) who will be eligible to receive grants and awards under the
Incentive Plan if approved by the stockholders.
The Board of Directors may amend, alter or discontinue the Incentive Plan,
but no amendment, alteration or discontinuation may be made which would without
the approval of the stockholders (A) increase the total number of shares
reserved for the Incentive Plan (unless such increase is a result of
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certain changes in the capital structure of the Company, as described in the
last paragraph before the discussion of "Certain United States Federal Income
Tax Consequences" below), (B) decrease the option price of an option to less
than 100% of the fair market value of the stock on the date the option was
granted (unless such decrease is a result of certain changes in the capital
structure of the Company, as described in the last paragraph before the
discussion of "Certain United States Federal Income Tax Consequences" below),
(C) change the class of persons eligible to receive an award of restricted
stock, options or bonuses payable in Common Stock under the Incentive Plan, or
(D) extend the duration of the Incentive Plan. The Committee may, retroactively
or prospectively, amend the terms of any award of restricted stock or option
already granted, provided no such amendment will impair the rights of any holder
without his or her written consent.
The option price per share shall be determined by the Committee, but shall
not be less than 100% of the fair market value of a share of Common Stock at the
time the option is granted. Options granted under the Incentive Plan will expire
on a date fixed by the Committee, but not more than ten years from the date of
grant. Each option will state whether it is immediately exercisable in full or
when and to what extent it shall be exercisable. Unless otherwise provided in an
optionee's option award agreement ("Agreement"), no option will be exercisable
within six months from the date of grant.
Payment of the option price upon exercise of an option may be made (i) in
cash, (ii) by the delivery of Common Stock already owned by the optionee for at
least six months, (iii) a combination of cash and shares, (iv) in accordance
with a cashless exercise program under which either (A) if so instructed by the
optionee, shares may be issued directly to the optionee's broker or dealer upon
receipt of the purchase price in cash from the broker or dealer, or (B) shares
may be issued by the Company to an optionee's broker or dealer in consideration
of such broker's or dealer's irrevocable commitment to pay to the Company that
portion of the proceeds from the sale of such shares that is equal to the
exercise price of the option(s) relating to such shares, or (v) in such other
manner as permitted by the Committee at the time of grant or thereafter. No
optionee shall have any rights to dividends or other rights of a stockholder
with respect to his or her shares subject to the option until the optionee has
given written notice of exercise and has paid in full for such shares. If any
tax withholding obligations arise under applicable law, such withholding
obligations may be met by a withholding of stock otherwise deliverable to the
optionee under procedures approved by the Committee.
The Committee may, in its sole discretion, with respect to each option
granted under the Incentive Plan, grant tandem stock appreciation rights, that
is, the right to exercise such option in whole or in part without payment of the
option price. If the Committee grants a tandem stock appreciation right with
respect to an option and such option is exercised without payment, the optionee
shall be entitled to receive the excess of the fair market value of the stock
covered by the option over the option price; provided, however, that to the
extent that a stock appreciation right is exercised by certain persons
("Insiders") that are subject to the restrictions imposed by Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), during the
ten-day election period described in Rule 16b-3(e) of the Exchange Act, such
fair market value shall be equal to the highest fair market value of the shares
of Common Stock during such ten-day election period. The
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amount received upon exercise of a stock appreciation right is payable in stock
or in cash or in a combination of stock and cash at the discretion of the
Committee.
Except as provided by the Committee in an Agreement, an option may be
exercised only if at all times during the period beginning with the date of the
granting of the option and ending on the date of such exercise, the optionee was
an employee of the Company or of a subsidiary of the Company or of another
corporation specified under certain provisions of the Code. Each Agreement shall
provide whether, and if so, to what extent, an option may be exercised after
termination of continuous employment (including the permanent disability of the
optionee, as determined by the Committee), but any such exercise shall in no
event be later than the termination date of the option. During the optionee's
lifetime, the option is exercisable only by the optionee and shall not be
transferable except by will or the laws of descent and distribution.
No incentive stock option will be granted to an employee who owns or would
own immediately before the grant of such option, directly or indirectly, stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company. This restriction will not apply if, at the time such
incentive stock option is granted, the option price is at least 110% of the fair
market value of one share of Common Stock on the date of grant and the incentive
stock option by its terms is not exercisable after the expiration of five years
from the date of grant.
Awards of restricted stock may be in addition to or in lieu of option
grants. During the restriction period (which may be a restriction period that
ends after certain period(s) of time and/or upon the attainment of certain
performance objectives, as set by the Committee) the recipient of restricted
stock is not permitted to sell, transfer, pledge, or assign the shares. If so
provided by the Company in a recipient's individual restricted stock award
agreement (a "Stock Agreement"), shares of restricted stock shall become free of
all restrictions if (i) the recipient dies, (ii) the recipient's employment
terminates by reason of permanent disability, as determined by the Committee,
(iii) the recipient retires under specific circumstances set forth in the Stock
Agreement, or (iv) there is a "change in control" of the Company (as defined in
the Stock Agreement). Unless and to the extent otherwise provided in the Stock
Agreement as described in the immediately preceding sentence, shares of
restricted stock shall be forfeited and revert to the Company upon the
recipient's termination of employment during the restriction period, except to
the extent the Committee, in its sole discretion, finds that such forfeiture
might not be in the best interest of the Company.
The recipient of restricted stock shall be entitled to vote the shares and
receive all dividends paid thereon, except that dividends paid in Common Stock
or other property shall also be subject to the same restrictions. If applicable
law imposes tax withholding obligations, such obligations shall be paid in cash
by the recipient or may be met by the withholding of Common Stock otherwise
deliverable to the recipient pursuant to procedures approved by the Committee.
In lieu of cash bonuses otherwise payable to eligible employees under the
Company's or applicable subsidiary's compensation practices, the Committee may
determine that such bonuses shall be payable in Common Stock or partly in Common
Stock and partly in cash. Any such shares of Common Stock shall be subject to
such terms as the Committee may determine in its sole discretion.
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The Company shall first withhold from any such cash bonuses an amount of cash
sufficient to meet its tax withholding obligations before determining the amount
of Common Stock payable in lieu of such cash bonuses.
In the event of a "change in control" of the Company, as defined by the
Committee in an Agreement or Stock Agreement, the Committee may, in its sole
discretion, provide that any of the following applicable actions be taken as a
result, or in anticipation, of any such event to assure fair and equitable
treatment of the employees who hold options or restricted stock: (i) accelerate
restriction periods for purposes of vesting in, or realizing gain from, any
outstanding option or shares of restricted stock; (ii) offer to purchase any
outstanding option or shares of restricted stock from the holder for its
equivalent cash value, as determined by the Committee, as of the date of the
change in control; or (iii) make adjustments or modifications to outstanding
options or with respect to restricted stock as the Committee deems appropriate
to maintain and protect the rights and interests of the Participants following
such change in control. In no event, however, may (i) any option be exercised
prior to the expiration of six months from the date of grant (unless otherwise
provided for in the Agreement), or (ii) any option be exercised after ten years
from the date it was granted. Any such action approved by the Board of Directors
shall be conclusive and binding on the Company, its subsidiaries and all
Participants.
Adjustments shall be made in the number and class of shares available under
the Incentive Plan and the number, class and price of shares subject to
outstanding option grants and awards of restricted stock, in each such case to
reflect changes in the Common Stock through changes in the Company's corporate
structure or capitalization such as through a merger or stock split.
Certain United States Federal Income Tax Consequences
The following is a brief description of certain significant United States
federal income tax consequences, under existing law, of the Incentive Plan.
References to the "Company" under this discussion of "Certain United States
Federal Income Tax Consequences" shall mean the Company or the subsidiary of the
Company that employs the participating employee, as the case may be. In
addition, the following discussion applies primarily to participating employees
that are citizens or resident aliens (as defined in the Code) of the United
States whose tax home or abode (as defined in the Code) is in the United States.
This discussion is based on the Code and applicable regulations thereunder
in effect on the date hereof. Any subsequent changes in the Code or such
regulations may affect the accuracy of this discussion. In addition, this
discussion does not consider any state, local or foreign tax consequences or any
circumstances that are unique to a particular Incentive Plan participant that
may affect the accuracy or applicability of this discussion.
Incentive Stock Options ("ISOs")
(a) Neither the grant nor the exercise of an ISO will be treated as the
receipt of taxable income by the employee or a deductible item by the Company.
The amount by which the fair market value of the shares issued upon exercise
exceeds the option price will constitute an item of "tax preference" to the
employee for purposes of the alternative minimum tax.
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(b) If the employee holds shares acquired by him or her upon the exercise
of an ISO for the two-year period from the date of grant of the option and the
one-year period beginning on the day after such exercise, then any gain realized
by the employee on a later sale or exchange of such shares will be a long-term
capital gain and any loss sustained will be a long-term capital loss. The
Company will realize no tax deduction with respect to any such sale or exchange
of option shares.
(c) If the employee disposes of any shares acquired upon the exercise of an
ISO during the two-year period from the date of grant of the option or the
one-year period beginning on the day after such exercise (i.e., a "disqualifying
disposition"), the employee will generally be obligated to report as ordinary
income for the year in which the disposition occurred the amount by which the
fair market value of such shares on the date of exercise of the option (or, as
noted in clause (d) below, in the case of certain sales or exchanges of such
shares for less than such fair market value, the amount realized upon such sale
or exchange) exceeds the option price, and the Company will be entitled to an
income tax deduction equal to the amount of such ordinary income reported by the
employee on his or her federal income tax return.
(d) If an ISO holder who has acquired stock upon the exercise of an ISO
makes a disqualifying disposition of any such stock, and the disposition is a
sale or exchange with respect to which a loss (if sustained) would be recognized
by the ISO holder, then the amount includible in the ISO holder's gross income,
and the amount deductible by the Company, will not exceed the excess (if any) of
the amount realized on the sale or exchange over the tax basis of the stock.
(e) If an ISO is exercised by the estate of an optionee, the aforementioned
two-year and one-year holding period requirements will not apply. Consequently,
when the estate disposes of the shares acquired by exercise of the ISO, it will
not recognize any ordinary income, but it may recognize long-term or short-term
capital gain. The Company will not be entitled to any deduction under such
circumstances.
Non-Qualified Stock Options ("NSSOs")
In the case of an NSSO, the grant of the option will not result in taxable
income to the option holder or an income tax deduction to the Company. The NSSO
holder recognizes ordinary income at the time the NSSO is exercised in the
amount by which the fair market value of the shares acquired exceeds the option
price. The Company is entitled to a corresponding ordinary income tax deduction
at that time equal to the amount of such ordinary income that is reported by the
NSSO holder on his or her federal income tax return. Taxation and commencement
of the holding period with respect to such shares (and, therefore, the timing of
the Company's deduction) may be postponed if the shares acquired upon exercise
are subject to the types of restrictions described in Section 83 of the Code.
Section 83 of the Code provides that so long as the sale of the stock at a
profit could subject a person (an "insider") to suit under Section 16(b) of the
Exchange Act (generally six months after the exercise date), the shares will be
deemed to be subject to such a restriction. However, an optionee/insider
receiving stock so restricted may elect, pursuant to Code Section 83(b), to be
taxed on the exercise date by filing an appropriate form with the Internal
Revenue Service within 30 days of his or her exercise date.
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Stock Appreciation Rights ("SARs")
The granting of SARs does not produce taxable income to participating
employees or an income tax deduction for the Company. When an employee exercises
a SAR, the tax consequences to the employee and to the Company with respect to
the cash or shares or both received by such employee will be the same as if such
employee had exercised an NSSO having an option price of zero. Any cash received
by such employee will be immediately taxable as will the fair market value of
any shares of Common Stock which are transferred to such employee. However,
shares received by an insider will be subject to the six-month and 30-day rules
discussed in the immediately preceding paragraph.
Bonus Stock
The grantee will realize ordinary income during his or her taxable year in
which the shares of Common Stock are issued pursuant to the award of bonus stock
in an amount equal to the fair market value of the shares of Common Stock at the
date of issue. However, shares received by an insider will be subject to the
six-month and 30-day rules discussed in the last paragraph under "Non-Qualified
Stock Options ("NSSOs")" above. The Company is entitled to a corresponding
income tax deduction equal to the amount of such income that is reported by the
grantee on his or her federal income tax return.
Restricted Stock
A participating employee generally will not recognize any income for
federal income tax purposes upon the award of any restricted stock which is not
vested. Dividends paid with respect to restricted stock prior to the vesting of
such stock will be taxable as compensation income to the employee. Generally, an
employee will recognize ordinary income upon the vesting of restricted stock in
an amount equal to the fair market value of the shares of Common Stock on the
date they become vested. However, pursuant to Section 83(b) of the Code, an
employee may elect to recognize compensation income upon the award of restricted
stock based on the fair market value of the shares of Common Stock subject to
such award on the award date as discussed in the last paragraph under
"Non-Qualified Stock Options ('NSSOs')" above. If an employee makes such an
election, dividends paid with respect to such restricted stock will not be
treated as compensation, but rather as dividend income, and the employee will
not recognize additional income when the restricted shares vest.
The Company will be entitled to an income tax deduction equal to the amount
of ordinary income included by the participant on his or her federal income tax
return for the year when the restricted stock vests (or year in which an
applicable Code Section 83(b) election is made). The Company will also be
entitled to a compensation deduction for the dividends that are paid on
restricted stock that has not yet vested (as described in the immediately
preceding paragraph) when such dividends are reported by the participant on his
or her federal income tax return.
Limitation on Company Deductions for Certain Compensation
Under Section 162(m) of the Code, certain compensation payments in excess
of $1 million are subject to a limitation on deductibility for the Company. This
limitation on deductibility applies with
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respect to that portion of a compensation payment for a taxable year in excess
of $1 million to either the chief executive officer of the Company or any one of
the other four highest paid executive officers who are employed by the Company
on the last day of the taxable year. However, certain "performance-based
compensation" the material terms of which are disclosed to and approved by
stockholders is not subject to this limitation on deductibility. The Company has
structured the stock option and SAR rights portions of the Incentive Plan with
the intention that compensation resulting therefrom would be qualified
performance-based compensation and would be deductible. To qualify, the Company
is seeking stockholder approval of the Incentive Plan. Restricted stock awards
and bonuses payable in stock do not satisfy the definition of performance-based
compensation unless the granting or vesting of the restricted stock or bonus is
based upon the attainment of specified performance goals.
Change in Control
Under certain circumstances, accelerated vesting or exercise of options or
SARs, or the accelerated lapse of restrictions on restricted stock, in
connection with a "change in control" of the Company might be deemed an "excess
parachute payment" for purposes of the golden parachute tax provisions of
Section 280G of the Code. To the extent it is so considered, the optionee or
grantee may be subject to a 20% excise tax and the Company may be denied a tax
deduction.
At the close of business on April 5, 1995, the market value of the total
number of shares included in the Incentive Plan is $6,000,000.
The Board of Directors recommends that you vote FOR the proposal.
Approval of Auditors
The Board of Directors has appointed Deloitte & Touche LLP as auditors of
OMI and various subsidiaries for the year 1995. A representative of Deloitte &
Touche LLP, who were also the auditors of OMI for 1994, is expected to be
present at the meeting with the opportunity to make a statement if she or he
desires to do so and to respond to appropriate questions.
The Board of Directors recommends a vote in favor of ratification of the
appointment of Deloitte & Touche LLP as auditors for 1995.
Section 16(a) Reporting
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors and holders of more than 10% of the Company's common stock
(collectively, "reporting persons") to file reports of ownership and changes in
ownership of the Company's equity securities with the Securities and Exchange
Commission and the New York Stock Exchange. Based upon a review of the copies of
such reports furnished to the Company and written representations from the
reporting persons other than executive officers and directors of the Company
that no reports on Form 5 were required to be filed, the Company believes that
all reports by such reporting persons were timely filed.
In 1994 each of the Company's executive officers was allocated shares of
the Company's common stock under the Company's Employee Stock Ownership Plan
(the "Stock Plan"), which
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allocations were reportable on Form 5. Such reports were due for filing on
February 14, 1995, but were inadvertently not filed until March 1, 1995. The
Form 5 reports related to an aggregate of ten transactions involving allocations
under the Stock Plan. In addition, Richard Halluska, a Vice President of OMI,
sold 400 shares of the Company's common stock on July 29, 1994, which sale
should have been reported on Form 4. Due to an inadvertent failure to file such
report, such sale was reported on Mr. Halluska's report on Form 5 filed on March
1, 1995.
Other Matters
OMI has no knowledge of any matters to be presented to the meeting other
than those set forth above. The persons named in the accompanying form of proxy
will use their own discretion in voting with respect to matters which are not
determined or known at the date hereof.
Copies of OMI's Annual Report on Form 10-K, excluding exhibits, are
available to any stockholder, at no charge, by writing to: Corporate Relations
Department, OMI Corp., 90 Park Avenue, New York, New York 10016-1302.
Shareholder Proposals
Any proposals of stockholders to be presented at OMI's next Annual Meeting
must be received at OMI's principal executive offices, 90 Park Avenue, New York,
New York 10016-1302, Attention: Secretary, not later than December 22, 1995, for
inclusion in OMI's proxy statement and form of proxy relating to that Annual
Meeting.
The Company's Annual Report to Stockholders for the fiscal year ended
December 31, 1994 has been mailed to Stockholders.
By Order of the Board of Directors
/s/ FREDRIC S. LONDON
------------------------------
Fredric S. London
Secretary
New York, NY
April 18, 1995
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EXHIBIT A
OMI CORP.
1995 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. Purpose of the Plan. The purpose of the OMI Corp. 1995 Stock Option Plan
for Non-Employee Directors (the "Plan") is to aid OMI Corp. (the "Company") in
securing for the Company and its stockholders the benefits of having experienced
and highly qualified persons who are not and have never been employees of the
Company or any of its Subsidiaries or affiliates become and remain members of
the Board of Directors (the "Board") of the Company and to provide to such
persons the benefits of the incentive inherent in common stock ownership.
2. Stock Subject to Plan. The stock which may be issued and sold under the
Plan shall be the Common Stock (par value $0.50 per share) of the Company, of a
total number not exceeding 300,000 shares, subject to adjustment as provided in
Section 9. The stock to be issued may be either authorized and unissued shares
or issued shares acquired by the Company. Each stock option granted pursuant to
the Plan is referred to herein as an "Option." In the event that Options granted
under the Plan shall terminate or expire without being exercised in whole or in
part, new Options may be granted covering the shares not purchased under such
lapsed Options.
3. Eligibility. Each member of the Board shall be eligible to receive
Options in accordance with the terms of the Plan, provided he or she, as of the
date of a granting of an Option, (i) is not and has not been an employee of the
Company or any of its Subsidiaries or affiliates and (ii) is otherwise not
eligible for selection to participate in any plan of the Company or any of its
Subsidiaries or affiliates that entitles the participant therein to acquire
securities or derivative securities of the Company. Each member of the Board who
receives an option hereunder is referred to herein as an "Optionee." As used in
the Plan, "Subsidiary" means any corporation in which the Company, directly or
indirectly, controls 50% or more of the total combined voting power of all
classes of such corporation's stock.
4. Option Grants. (a) Subject to the maximum number of shares which may be
purchased pursuant to the exercise of Options, as set forth in Section 2 (as
such number may be adjusted pursuant to the provisions of Section 9), and to the
approval of the Plan by the stockholders of the Company, an Option to purchase,
in the manner and subject to the terms and conditions hereinafter provided,
30,000 shares of the Common Stock of the Company shall be and hereby is granted,
without further action by the Board, as of the close of business on April 13,
1995, that being the date on which the Plan was authorized and adopted by the
Board subject to the conditions aforesaid, to each person who is serving as an
eligible director of the Company on such date. Should the Plan not be approved
by the stockholders of the Company as aforesaid each Option theretofore granted
shall be deemed to have been null and void ab initio.
(b) Each person who subsequent to April 13, 1995, first becomes an eligible
director of the Company shall (i) on the date of the Annual or Special Meeting
of Stockholders of the Company at
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which he or she is first elected to the Board by vote of the stockholders, or
(ii) on the date of appointment to the Board with respect to a director
appointed to the Board by the Board to fill a vacancy on the Board, however
occurring, whether by the death, resignation or removal of any director, any
increase in the number of directors comprising the Board, or otherwise, shall,
by reason of such election or appointment and without further action by the
Board, be granted as of the close of business on said date an Option to
purchase, in the manner and subject to the terms and conditions herein provided
and to the extent such number of shares remain available for such purpose
hereunder, 30,000 shares of the Common Stock of the Company. In the event that
the number of shares available for grants under the Plan is insufficient to make
all grants hereby specified on the applicable date, then all those who become
entitled to a grant on such date shall share ratably in the number of shares
then available for grant under the Plan.
(c) It is understood that the Board may, at any time and from time to time
after the granting of an Option hereunder, specify such additional terms,
conditions and restrictions with respect to such Option as may be deemed
necessary or appropriate to ensure compliance with any and all applicable laws,
including, but not limited to, terms, restrictions and conditions for compliance
with federal and state securities laws and methods of withholding or providing
for the payment of required taxes.
5. General Terms and Conditions of Options. Each Option granted under the
Plan shall be evidenced by an agreement in such form as the Board shall
prescribe from time to time in accordance with the Plan and shall comply with
the following terms and conditions:
(a) The Option exercise price with respect to that portion of the shares of
Common Stock covered by the Option which become exercisable on the first
anniversary date of the grant of the Option (the "Initial Exercise Price") shall
be the higher of: (i) the fair market value (the "Fair Market Value") of the
Common Stock on the date the Option is granted, which shall be the average of
the highest and lowest sale prices of the Common Stock on the date of grant as
reported on the New York Stock Exchange Composite Transactions Tape or, if no
sale of the Common Stock is reported for such date, on the next preceding day
for which there is a reported sale or (ii) the average of the Fair Market Values
of the Common Stock for each of the 10 days ending on the date the Option is
granted. The Option exercise price with respect to that portion of the shares of
Common Stock covered by the Option which first become exercisable on the second
anniversary date of the grant of the Option (the "Second Exercise Price") shall
be equal to the Initial Exercise Price plus 15% of the Initial Exercise Price.
The Option exercise price with respect to that portion of the shares of Common
Stock covered by the Option which first become exercisable on the third
anniversary date of the grant of the Option shall be equal to the Second
Exercise Price plus 15% of the Second Exercise Price.
(b) Each Option granted pursuant to the Plan shall be evidenced by an
Option Agreement. The Option Agreement shall not be a precondition to the
granting of Options; however, no person shall have any rights under any Option
granted under the Plan unless and until the Optionee to whom such Option shall
have been granted shall have executed and delivered to the Company an Option
Agreement. A fully executed original of the Option Agreement shall be provided
to both the Company and the Optionee.
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(c) All Options shall be nonstatutory stock options not intended to qualify
as stock options entitled to special tax treatment under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
(d) Options shall not be transferable by the Optionee otherwise than by
will or the laws of descent and distribution, and shall be exercisable during
the Optionee's lifetime only by the Optionee.
(e) Each Option shall be subject to the following restrictions on exercise:
(i) The Option is not immediately exercisable. Except in the event of
the Optionee's death, an Option shall not be exercisable, in whole or in
part, prior to the expiration of one (1) year from the date of grant or
after the expiration of ten years from the date the Option was granted. In
no event may an Option be exercised prior to the expiration of six (6)
months from the date of grant. To the extent that an Option is not
exercised within the ten-year period of exercisability, it shall expire as
to the then unexercised part.
(ii) Subject to Sections 5(e)(i), 6 and 7, one-third of the total
number of shares of Common Stock covered by the Option (as such number may
be adjusted pursuant to the provisions of Section 9) shall become
exercisable on the first anniversary date of the grant of the Option, and
an additional one-third of said initial total number of shares shall become
cumulatively exercisable on each of the two succeeding anniversary dates of
the grant date.
(iii) An Option shall not be exercisable with respect to a fractional
share or with respect to the lesser of fifty (50) shares or the full number
of shares then subject to the Option.
(iv) Except as provided in Section 6, an Option shall not be
exercisable in whole or in part unless the Optionee, at the time the
Optionee exercises the Option, is, and has been at all times since the date
of grant of the Option, a director of the Company.
(v) An Option may only be exercised by delivery of written notice of
the exercise to the Company specifying the number of shares to be purchased
and by making payment in full for the shares of Common Stock being acquired
thereunder at the time of exercise (including applicable withholding taxes,
if any); unless the Option Agreement shall otherwise provide, such payment
shall be made
(A) in United States dollars by check or bank draft, or
(B) by tendering to the Company Common Stock shares already owned
for at least six (6) months by the person exercising the Option, which
may include shares received as the result of a prior exercise of an
Option, and having a fair market value equal to the cash exercise
price applicable to such Option, such fair market value to be the
average of the high and low sales prices of a Common Stock share on
the date of exercise as reported on the New York Stock Exchange
Composite Transactions Tape, or, if there is no trading of the Common
Stock on said Exchange on the date in question, on the next preceding
day for which there is a reported sale, or
(C) by a combination of United States dollars and Common Stock
shares as aforesaid, or
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(D) in accordance with a cashless exercise program under which,
if so instructed by the Optionee, shares of Common Stock may be issued
directly to the Optionee's broker or dealer upon receipt of the
purchase price in cash from the broker or dealer.
(vi) If at any time the Board shall determine, in its discretion, that
the listing, registration or qualification of shares upon any national
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as
a condition of, or in connection with, the sale or purchase of shares
hereunder, such Option may not be exercised in whole or in part unless and
until such listing, registration, qualification, consent or approval shall
have been effected or obtained, or otherwise provided for, free of any
conditions not acceptable to the Board in the exercise of its reasonable
judgment.
6. Termination of Service. An Option shall terminate upon the termination,
for any reason, of the Optionee's directorship with the Company, and no shares
may thereafter be purchased under such Option except as follows:
(a) Upon retirement as a director of the Company after six (6) years of
service, except if such retirement occurs during the calendar year ended
December 31, 1995, each unexpired Option held by the Optionee shall, to the
extent otherwise exercisable on such date, remain exercisable, in whole or in
part, for a period of three (3) years following such retirement.
(b) Upon termination of service as a director of the Company by reason of
death or disability each unexpired Option held by the Optionee, or in the case
of death, the Optionee's executors, administrators, heirs or distributees, as
the case may be, shall become immediately exercisable and shall remain
exercisable, in whole or in part, for a period of one (1) year after such
termination. Disability shall mean an inability as determined by the Board to
perform duties and services as a director of the Company by reason of a
medically determinable physical or mental impairment, supported by medical
evidence, which can be expected to last for a continuous period of not less than
six (6) months.
In the event any Option is exercised by the executors, administrators,
heirs or distributees of the estate of a deceased Optionee, the Company shall be
under no obligation to issue Common Stock thereunder unless and until the
Company is satisfied that the person or persons exercising the Option are the
duly appointed legal representative of the deceased Optionee's estate or the
proper legatees or distributees thereof.
In no event, however, may an Option be exercised (i) prior to the
expiration of six (6) months from the date of grant, or (ii) after ten (10)
years from the date it was granted.
7. Change in Control. (a) Notwithstanding other provisions of the Plan, but
subject to Section 6 and 7(c), in the event of a change in control of the
Company, (i) all of the Optionee's then outstanding Options shall immediately
become exercisable, unless directed otherwise by a resolution by the Board
adopted prior to and specifically relating to the occurrence of such change in
control, and (ii) each Optionee shall have the right within one (1) year after
such event to exercise the Option in full notwithstanding any limitation or
restriction in any Option Agreement or in the Plan.
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(b) For purposes of this Section 7, a "change in control" shall mean a
change in control with respect to the Company, occurring on or after April 13,
1995, that would be required to be reported in response to Item 1(a) of the
Current Report on Form 8-K, as in effect on April 13, 1995, pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"); provided that, without limitation, such a change in control shall be
deemed to have occurred at such time as any "person" (as defined in Section 3(9)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly of 20% or more of the
securities of the Company which are entitled to vote. Notwithstanding anything
aforesaid to the contrary, a change in control with respect to the Company shall
be deemed to have occurred if individuals who constitute the Board on April 13,
1995, cease for any reason to constitute at least a majority of the Board.
(c) In no event, however, may any Option be exercised (i) prior to the
expiration of six (6) months from the date of grant, or (ii) after ten (10)
years from the date it was granted.
8. Purchase for Investment. (a) Except as hereafter provided, the holder of
an Option shall, upon any exercise thereof, execute and deliver to the Company a
written statement, in form satisfactory to the Company, in which such holder
represents and warrants that such holder is purchasing or acquiring the shares
acquired thereunder for such holder's own account, for investment only and not
with a view to the resale or distribution thereof, and represents and agrees
that any subsequent offer for sale or distribution of any of such shares shall
be made only pursuant to either (i) a registration statement on an appropriate
form under the Securities Act of 1933, as amended (the "Securities Act"), which
registration statement has become effective and is current with regard to the
shares being offered or sold, or (ii) a specific exemption from the registration
requirements of the Securities Act, but in claiming such exemption the holder
shall, prior to any offer for sale or sale of such shares, obtain a prior
favorable written opinion, in form and substance satisfactory to the Company,
from counsel for or approved by the Company, as to the applicability of such
exemption thereto. The foregoing restriction shall not apply to (a) issuances by
the Company so long as the shares being issued are registered under the
Securities Act and a prospectus in respect thereof is current or (b) reofferings
of shares by affiliates of the Company (as defined in Rule 405 or any successor
rule or regulation promulgated under the Securities Act) if the shares being
reoffered are registered under the Securities Act and a prospectus in respect
thereof is current.
(b) The Company may endorse such legend or legends upon the certificates
for shares issued upon exercise of an Option granted hereunder and may issue
such "stop transfer" instructions to its transfer agent in respect of such
shares as, in its discretion, it determines to be necessary or appropriate to
prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act.
9. Adjustment in the Event of Change in Stock. In the event of changes in
the outstanding Common Stock of the Company by reason of stock dividend, reverse
split, subdivision, recapital-ization, merger (whether or not the Company is the
surviving corporation), consolidation, split-up, combination or exchange of
shares, reorganization or liquidation, extraordinary dividend payable in cash or
property, and the like, the aggregate number and class of shares available under
the Plan,
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and the number, class and the price of shares of Common Stock subject to
outstanding Options shall be appropriately adjusted by the Board, whose
determination shall be conclusive.
10. Administration. The Plan shall be administered by the Board. The Board
shall have all the powers vested in it by the terms of the Plan, such powers to
include authority (within the limitations described herein) to prescribe the
form of all Option Agreements. The Board shall, subject to the provisions of the
Plan, have the power to construe the Plan, to determine all questions arising
thereunder and to adopt and amend such rules and regulations for the
administration of the Plan as it may deem desirable. Any decision of the Board
in the administration of the Plan, as described herein, shall be final and
conclusive. The Board may act only by a majority of its members in office,
except that the members thereof may authorize any one or more of their number or
the secretary or any other officer of the Company to execute and deliver
documents on behalf of the Board. No member of the Board shall be liable for
anything done or omitted to be done by such member or by any other member of the
Board in connection with the Plan, except as may expressly be provided by
statute.
11. Miscellaneous Provisions. (a) Except as expressly provided for in the
Plan, no director or other person shall have any claim or right to be granted an
Option under the Plan. Neither the Plan nor any action taken hereunder shall be
construed as giving any eligible director any right to be retained in the
service of the Company as a director or otherwise.
(b) An Optionee's rights and interest under the Plan may not be assigned or
transferred in whole or in part either directly or by operation of law or
otherwise (except in the event of an Optionee's death, by will or the laws of
descent and distribution), including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy or in any other manner, and no
such right or interest of any participant in the Plan shall be subject to any
obligation or liability of such participant.
(c) It shall be a condition to the obligation of the Company to issue
shares of Common Stock upon exercise of an Option that the Optionee (or any
beneficiary or person entitled to act) pay to the Company, upon its demand, such
amount, in cash and/or Common Stock, as may be requested by the Company for the
purpose of satisfying any liability to withhold federal, state, local or foreign
income or other taxes; provided, however, that such withholding obligation may
be met by the withholding of Common Stock otherwise deliverable to the Optionee
in accordance with such procedures as may be adopted by the Board; provided,
further, however, the amount of Common Stock so withheld shall not exceed the
minimum required withholding obligation. If the amount requested is not paid,
the Company may refuse to issue the shares of Common Stock.
(d) The expenses of the Plan shall be borne by the Company.
(e) The Plan shall be unfunded. Neither the Company nor the Board shall be
required to establish any special or separate fund or to make any other
segregation of assets to assure the issuance of shares upon exercise of any
Option under the Plan and issuance of shares upon exercise of Options shall be
subordinate to the claims of the Company's general creditors. Proceeds from the
sale of shares pursuant to Options however shall constitute general funds of the
Company. Neither the Company, a Subsidiary or the Board shall be deemed to be a
trustee of any amounts to be paid under the Plan.
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(f) By accepting any Option or other benefit under the Plan, each Optionee
and each person claiming under or through such person shall be conclusively
deemed to have indicated his acceptance and ratification, and consent to, any
action taken under the Plan by the Company or the Board.
(g) An Optionee shall have no voting rights or other rights of stockholders
with respect to shares which are subject to an Option, nor shall cash dividends
accrue or be payable with respect to any such shares.
(h) The Plan shall be governed by and construed in accordance with the laws
of the State of New York.
(i) No fractional shares shall be issued upon the exercise of an Option. If
a fractional share shall become subject to an Option by reason of a stock
dividend or otherwise, the Optionee shall not be entitled to exercise the Option
with respect to such fractional share.
12. Amendment or Discontinuance. The Plan may be amended at any time and
from time to time by the Board as the Board shall deem advisable including, but
not limited to amendments necessary to qualify for any exemption or to comply
with applicable law or regulations, provided, however, that except as provided
in Section 9 above, the Board may not, without further approval by the
stockholders of the Company, increase the maximum number of shares of Common
Stock as to which Options may be granted under the Plan, increase the number of
shares subject to an Option, reduce the Option exercise price described in
Section 5(a), extend the period during which Options may be granted or exercised
under the Plan or change the class of persons eligible to receive Options under
the Plan; it being the intent to include in this proviso any amendment that
would have the effect of materially increasing the benefits accruing to
Optionees under the Plan, and provided, further, that the Plan provisions
affecting the amount of Common Stock to be awarded eligible directors, the
timing of those awards or the determination of those eligible to receive such
awards may not be amended more than once every six months, other than to comport
with changes in the Code, the Employee Retirement Income Security Act of 1974,
as amended, or the rules thereunder. Notwithstanding the proviso to the
immediately preceding sentence, to the extent that, in the opinion of counsel to
the Company, stockholder approval of an amendment to the Plan is not required
under the Exchange Act (including the rules and regulations promulgated
thereunder), in order for the Options under the Plan to continue to be exempt
from the operation of Section 16(b) of the Exchange Act, such amendment may be
made by the Board acting alone. No amendment of the Plan shall materially and
adversely affect any right of any Optionee with respect to any Option
theretofore granted without such Optionee's written consent.
13. Limits of Liability. (a) Any liability of the Company to any
participant with respect to an Option award shall be based solely upon
contractual obligations, if any, created by the Plan and the Option Agreement.
(b) Neither the Company nor any member of the Board, nor any other person
participating in any determination of any question under the Plan, or in the
interpretation, administration or
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application of the Plan, shall have any liability to any party for any action
taken or not taken in connection with the Plan, except as may expressly be
provided by statute.
14. Termination. This Plan shall terminate upon the earlier of the
following dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating the Plan;
(b) the date all shares of Common Stock subject to the Plan are purchased
according to the Plan's provisions; or
(c) ten years from the date of adoption of the Plan by the Board of
Directors.
No such termination of this Plan shall affect the rights of any Optionee
hereunder and all Options previously granted hereunder shall continue in force
and in operation after termination of the Plan, except as they may be otherwise
terminated in accordance with the terms of the Plan.
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EXHIBIT B
OMI CORP.
1995 EQUITY INCENTIVE PLAN
1. Purpose. The purpose of the OMI Corp. 1995 Equity Incentive Plan (the
"Plan") is to maintain the ability of OMI Corp. (the "Company") and its
subsidiaries to attract and retain highly qualified and experienced employees
and to give such employees a continued proprietary interest in the success of
the Company and its subsidiaries. Pursuant to the Plan, such employees will be
offered the opportunity to acquire common stock through the grant of options,
stock appreciation rights in tandem with such options, the award of restricted
stock under the Plan, bonuses payable in stock or a combination thereof. Unless
the context clearly indicates otherwise, references herein to "option" or
"options" shall include any tandem stock appreciation right that may be granted
in connection with such option or options in accordance with Paragraph 6(f)
hereof.
As used herein, the term "subsidiary" shall mean any present or future
corporation which is or would be a "subsidiary corporation" of the Company as
the term is defined in Section 424(f) of the Internal Revenue Code of 1986, as
amended from time to time (the "Code"). References to the "Exchange Act" are to
the Securities Exchange Act of 1934, as it may be amended from time to time.
2. Administration of the Plan. The Plan shall be administered by a
compensation committee (the "Committee") as appointed from time to time by the
Board of Directors of the Company (the "Board"), which Committee shall consist
of not less than three (3) members of the Board. No member of the Committee
shall be eligible to be granted options or awarded restricted stock or bonuses
payable in stock under the Plan. No member of the Board shall be appointed to
the Committee who has been granted an option or awarded restricted stock or
bonuses payable in stock under the Plan within one year prior to appointment. A
majority of the members of the Committee shall constitute a quorum. The vote of
a majority of a quorum shall constitute action by the Committee.
In administering the Plan, the Committee may adopt rules and regulations
for carrying out the Plan. The interpretation and decision with regard to any
question arising under the Plan made by the Committee shall be final and
conclusive on all employees of the Company and its subsidiaries participating or
eligible to participate in the Plan. The Committee may consult with counsel, who
may be of counsel to the Company, and shall not incur any liability for any
action taken in good faith in reliance upon the advice of counsel. The Committee
shall determine the employees to whom, and the time or times at which, grants or
awards shall be made and the number of shares to be included in the grants or
awards. Within the limitations of the Plan, the number of shares for which
options will be granted from time to time and the periods for which the options
will be outstanding will be determined by the Committee.
Each option or stock or other awards granted pursuant to the Plan shall be
evidenced by an Option Agreement or Award Agreement (the "Agreement"). The
Agreement shall not be a precondition to the granting of options or stock or
other awards; however, no person shall have any
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rights under any option or stock or other awards granted under the Plan unless
and until the person to whom such option or stock or other award shall have been
granted shall have executed and delivered to the Company an Agreement. The
Committee shall prescribe the form of all Agreements. A fully executed original
of the Agreement shall be provided to both the Company and the recipient of the
grant or award.
3. Shares of Stock Subject to the Plan. The total number of shares that may
be optioned or awarded under the Plan is 1,000,000 shares of the $0.50 par value
common stock of the Company (the "Common Stock") except that said number of
shares shall be adjusted as provided in Paragraph 13. No employee shall receive,
over the term of the Plan, awards of restricted stock for more than 150,000
shares of Common Stock or awards in the form of options, whether incentive stock
options or options other than incentive stock options, to purchase more than
150,000 shares of Common Stock. Any shares subject to an option which for any
reason expires or is terminated unexercised and any restricted stock which is
forfeited may again be optioned or awarded under the Plan; provided, however,
that forfeited shares shall not be available for further awards if the employee
has realized any benefits of ownership from such shares. Shares subject to the
Plan may be either authorized and unissued shares or issued shares acquired by
the Company or its subsidiaries.
4. Eligibility. Key salaried employees, including officers, of the Company
and its subsidiaries (but excluding non-employee directors) are eligible to be
granted options and awarded restricted stock under the Plan and to have their
bonuses payable in stock. The employees who shall receive awards or options
under the Plan shall be selected from time to time by the Committee, in its sole
discretion, from among those eligible, which may be based upon information
furnished to the Committee by the Company's management, and the Committee shall
determine, in its sole discretion, the number of shares to be covered by the
award or awards and by the option or options granted to each such employee
selected. Such key salaried employees who are selected to participate in the
Plan shall be referred to collectively herein as "Participants."
5. Duration of the Plan. No award or option may be granted under the Plan
more than ten years from the date the Plan is adopted by the Board or the date
the Plan receives shareholder approval, whichever is earlier, but awards or
options theretofore granted may extend beyond that date.
6. Terms and Conditions of Stock Options. All options granted under this
Plan shall be either incentive stock options, as defined in Section 422 of the
Code, or options other than incentive stock options. Each such option shall be
subject to all the applicable provisions of the Plan, including the following
terms and conditions, and to such other terms and conditions not inconsistent
therewith as the Committee shall determine.
(a) The option price per share shall be determined by the Committee.
However, subject to Paragraph 6(k), the option price of incentive stock
options and other than incentive stock options shall not be less than 100%
of the fair market value of a share of Common Stock at the time the option
is granted. For purposes of the Plan, the fair market value shall be the
mean between the highest and lowest prices at which the Common Stock is
traded on the New York Stock Exchange or any successor thereto on the
relevant date. If there is no sale of the Common Stock
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on such exchange on the date the option is granted, the mean between the
bid and asked prices on such exchange at the close of the market on such
date shall be deemed to be the fair market value of the Common Stock.
(b) Each option shall be exercisable pursuant to the attainment of
such performance goals and/or during and over such period ending not later
than ten years from the date it was granted, as may be determined by the
Committee and stated in the Agreement. In no event may an option be
exercised more than 10 years from the date the option was granted.
(c) Unless otherwise provided in the Agreement, no option shall be
exercisable within six months from the date of the granting of the option.
An option shall not be exercisable with respect to a fractional share of
Common Stock or with respect to the lesser of fifty (50) shares or the full
number of shares then subject to the option. No fractional shares of Common
Stock shall be issued upon the exercise of an option. If a fractional share
of Common Stock shall become subject to an option by reason of a stock
dividend or otherwise, the optionee shall not be entitled to exercise the
option with respect to such fractional share.
(d) Each option shall state whether it will or will not be treated as
an incentive stock option.
(e) Each option may be exercised by giving written notice to the
Company specifying the number of shares to be purchased, which shall be
accompanied by payment in full including, if required by applicable law,
taxes, if any. Payment, except as provided in the Agreement, shall be
(A) in United States dollars by check or bank draft, or
(B) by tendering to the Company Common Stock shares already owned
for at least six months by the person exercising the option, which may
include shares received as the result of a prior exercise of an
option, and having a fair market value, as determined in accordance
with Paragraph 6(a), on the date on which the option is exercised
equal to the cash exercise price applicable to such option, or
(C) by a combination of United States dollars and Common Stock
shares as aforesaid, or
(D) in accordance with a cashless exercise program established by
the Committee in its sole discretion under which either (A) if so
instructed by the optionee, shares may be issued directly to the
optionee's broker or dealer upon receipt of the purchase price in cash
from the broker or dealer, or (B) shares may be issued by the Company
to an optionee's broker or dealer in consideration of such broker's or
dealer's irrevocable commitment to pay to the Company that portion of
the proceeds from the sale of such shares that is equal to the
exercise price of the option(s) relating to such shares, or
(E) in such other manner as permitted by the Committee at the
time of grant or thereafter.
No optionee shall have any rights to dividends or other rights of a
shareholder with respect to shares of Common Stock subject to his or her
option until he or she has given written notice of exercise of his or her
option and paid in full for such shares.
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(f) Notwithstanding the foregoing, the Committee may, in its sole
discretion, grant to a grantee of an option the right (hereinafter referred
to as a "stock appreciation right") to elect, in the manner described
below, in lieu of exercising his or her option for all or a portion of the
shares of Common Stock covered by such option, to relinquish his or her
option with respect to any or all of such shares and to receive from the
Company a payment having a value equal to the amount by which (a) the fair
market value, as determined in accordance with Paragraph 6(a), of a share
of Common Stock on the date of such election, multiplied by the number of
shares as to which the grantee shall have made such election, exceeds (b)
the total exercise price for that number of shares of Common Stock under
the terms of such option; provided, however, that to the extent that a
stock appreciation right is exercised by a Participant who is or may be
subject to Section 16 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), during the ten-day election period described in Rule
16b-3(e) of the Exchange Act, the amount described in Paragraph 6(f)(a)
next above shall be equal to the highest fair market value of the shares of
Common Stock during such ten-day election period. A stock appreciation
right shall be exercisable at the time the tandem option is exercisable,
and the "expiration date" for the stock appreciation right shall be the
expiration date for the tandem option. A grantee who makes such an election
shall receive payment in the sole discretion of the Committee (i) in cash
equal to such excess; or (ii) in the nearest whole number of shares of
Common Stock of the Company having an aggregate fair market value, as
determined in accordance with Paragraph 6(a), which is not greater than the
cash amount calculated in (i) above; or (iii) a combination of (i) and (ii)
above. A stock appreciation right may be exercised only when the amount
described in (a) above exceeds the amount described in (b) above. An
election to exercise stock appreciation rights shall be deemed to have been
made on the day written notice of such election, addressed to the
Committee, is received at the Company's offices at 90 Park Avenue, New
York, New York 10016. An option or any portion thereof with respect to
which a grantee has elected to exercise the stock appreciation rights
described above shall be surrendered to the Company and such option shall
thereafter remain exercisable according to its terms only with respect to
the number of shares as to which it would otherwise be exercisable, less
the number of shares with respect to which stock appreciation rights have
been exercised. The grant of a stock appreciation right shall be evidenced
by such form of Agreement as the Committee may prescribe. The Agreement
evidencing stock appreciation rights shall be personal and will provide
that the stock appreciation rights will not be transferable by the grantee
otherwise than by will or the laws of descent and distribution and that
they will be exercisable, during the lifetime of the grantee, only by him
or her.
(g) Except as provided in the Agreement, an option may be exercised
only if at all times during the period beginning with the date of the
granting of the option and ending on the date of such exercise, the grantee
was an employee of either the Company or of a subsidiary of the Company or
of another corporation referred to in Section 421(a)(2) of the Code. The
Agreement shall provide whether, and if so, to what extent, an option may
be exercised after termination of continuous employment, but any such
exercise shall in no event be later than the termination date of the
option. If the grantee should die, or become permanently disabled as
determined by
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the Committee in accordance with the Agreement, at any time when the
option, or any portion thereof, shall be exercisable by him or her, the
option will be exercisable within a period provided for in the Agreement,
by the optionee or person or persons to whom his or her rights under the
option shall have passed by will or by the laws of descent and
distribution, but in no event at a date later than the termination of the
option. The Committee may require medical evidence of permanent disability,
including medical examinations by physicians selected by it.
(h) The option by its terms shall be personal and shall not be
transferable by the optionee otherwise than by will or by the laws of
descent and distribution as provided in Paragraph 6(g) above. During the
lifetime of an optionee, the option shall be exercisable only by the
optionee. In the event any option is exercised by the executors,
administrators, heirs or distributees of the estate of a deceased optionee
as provided in Paragraph 6(g) above, the Company shall be under no
obligation to issue Common Stock thereunder unless and until the Company is
satisfied that the person or persons exercising the option are the duly
appointed legal representative of the deceased optionee's estate or the
proper legatees or distributees thereof.
(i) Notwithstanding any intent to grant incentive stock options, an
option granted will not be considered an incentive stock option to the
extent that it together with any earlier incentive stock options permits
the exercise for the first time in any calendar year of more than $100,000
in value of Common Stock (determined at the time of grant).
(j) The Committee may, but need not, require such consideration from
an optionee at the time of granting an option as it shall determine, either
in lieu of, or in addition to, the limitations on exercisability provided
in Paragraph 6(e).
(k) No incentive stock option shall be granted to an employee who owns
or would own immediately before the grant of such option, directly or
indirectly, stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company. This restriction does not
apply if, at the time such incentive stock option is granted, the option
price is at least 110% of the fair market value of one share of Common
Stock, as determined in accordance with Paragraph 6(a), on the date of
grant and the incentive stock option by its terms is not exercisable after
the expiration of five years from the date of grant.
(l) An option and any Common Stock received upon the exercise of an
option shall be subject to such other transfer restrictions and/or
legending requirements that are specified in the Agreement.
7. Terms and Conditions of Restricted Stock Awards. All awards of
restricted stock under the Plan shall be subject to all the applicable
provisions of the Plan, including the following terms and conditions, and to
such other terms and conditions not inconsistent therewith, as the Committee
shall determine.
(a) Awards of restricted stock may be in addition to or in lieu of
option grants.
(b) During a period set by, and/or until the attainment of particular
performance goals based upon criteria established by, the Committee at the
time of each award of restricted stock (the "restriction period") as
specified in the Agreement, the recipient shall not be permitted to
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sell, transfer, pledge, or otherwise encumber the shares of restricted
stock; except that such shares may be used, if the Agreement permits, to
pay the option price of any option granted under the Plan provided an equal
number of shares delivered to the recipient shall carry the same
restrictions as the shares so used.
(c) If so provided in the Agreement, shares of restricted stock shall
become free of all restrictions if (i) the recipient dies, (ii) the
recipient's employment terminates by reason of permanent disability, as
determined by the Committee, (iii) the recipient retires under specific
circumstances set forth in the Agreement, or (iv) there is a "change in
control" of the Company (as defined in the Agreement). The Committee may
require medical evidence of permanent disability, including medical
examinations by physicians selected by it. If the Committee determines that
any such recipient is not permanently disabled, the restricted stock held
by such recipient shall be forfeited and revert to the Company.
(d) Unless and to the extent otherwise provided in the Agreement in
accordance with Paragraph 7(c) hereof, shares of restricted stock shall be
forfeited and revert to the Company upon the recipient's termination of
employment during the restriction period, except to the extent the
Committee, in its sole discretion, finds that such forfeiture might not be
in the best interest of the Company and, therefore, waives all or part of
the application of this provision to the restricted stock held by such
recipient.
(e) Stock certificates for restricted stock shall be registered in the
name of the recipient but shall be appropriately legended and returned to
the Company by the recipient, together with a stock power, endorsed in
blank by the recipient. The recipient shall be entitled to vote shares of
restricted stock and shall be entitled to all dividends paid thereon,
except that dividends paid in Common Stock or other property shall also be
subject to the same restrictions.
(f) Restricted stock shall become free of the foregoing restrictions
upon expiration of the applicable restriction period and the Company shall
then deliver Common Stock certificates evidencing such stock to the
recipient.
(g) Restricted stock and any Common Stock received upon the expiration
of the restriction period shall be subject to such other transfer
restrictions and/or legending requirements that are specified in the
Agreement.
8. Bonuses Payable in Stock. In lieu of cash bonuses otherwise payable
under the Company's or applicable subsidiary's compensation practices to
employees eligible to participate in the Plan, the Committee, in its sole
discretion, may determine that such bonuses shall be payable in Common Stock or
partly in Common Stock and partly in cash. Such bonuses shall be in
consideration of services previously performed and as an incentive toward future
services and shall consist of shares of Common Stock subject to such terms as
the Committee may determine in its sole discretion. The number of shares of
Common Stock payable in lieu of a bonus otherwise payable shall be determined by
dividing such amount by the fair market value of one share of Common Stock on
the date the bonus is payable, with fair market value determined as of such date
in accordance with Paragraph 6(a).
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9. Change in Control. (a) In the event of a change in control of the
Company, as defined by the Committee in the Agreement, the Committee may, in its
sole discretion, provide that any of the following applicable actions be taken
as a result, or in anticipation, of any such event to assure fair and equitable
treatment of Participants:
(i) accelerate restriction periods for purposes of vesting in, or
realizing gain from, any outstanding option or shares of restricted stock
awarded pursuant to this Plan;
(ii) offer to purchase any outstanding option or shares of restricted
stock made pursuant to this Plan from the holder for its equivalent cash
value, as determined by the Committee, as of the date of the change in
control; or
(iii) make adjustments or modifications to outstanding options or with
respect to restricted stock as the Committee deems appropriate to maintain
and protect the rights and interests of the Participants following such
change in control.
Any such action approved by the Board shall be conclusive and binding on
the Company, its subsidiaries and all Participants.
(b) In no event, however, may (i) any option be exercised prior to the
expiration of six (6) months from the date of grant (unless otherwise provided
for in the Agreement), or (ii) any option be exercised after ten (10) years from
the date it was granted.
10. Transfer, Leave of Absence. For the purpose of the Plan: (a) a transfer
of an employee from the Company to a subsidiary or affiliate of the Company,
whether or not incorporated, or vice versa, or from one subsidiary or affiliate
of the Company to another, and (b) a leave of absence, duly authorized in
writing by the Company or a subsidiary or affiliate of the Company, shall not be
deemed a termination of employment.
11. Rights of Employees. (a) No person shall have any rights or claims
under the Plan except in accordance with the provisions of the Plan and the
Agreement.
(b) Nothing contained in the Plan or Agreement shall be deemed to give any
employee the right to be retained in the service of the Company or its
subsidiaries.
12. Tax Withholding Obligations. (a) If required by applicable law, the
payment of taxes, upon the exercise of an option pursuant to Paragraph 6(e) or a
stock appreciation right pursuant to Paragraph 6(f), shall be in cash at the
time of exercise or on the applicable tax date under Section 83 of the Code, if
later; provided, however, tax withholding obligations may be met by the
withholding of Common Stock otherwise deliverable to the optionee pursuant to
procedures approved by the Committee; provided, further, however, the amount of
Common Stock so withheld shall not exceed the minimum required withholding
obligation.
(b) If required by applicable law, recipients of restricted stock, pursuant
to Paragraph 7, shall be required to pay taxes to the Company upon the
expiration of restriction periods or such earlier dates as elected pursuant to
Section 83 of the Code; provided, however, tax withholding obligations may be
met by the withholding of Common Stock otherwise deliverable to the recipient
pursuant to
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procedures approved by the Committee. If tax withholding is required by
applicable law, in no event shall Common Stock be delivered to any awardee until
he has paid to the Company in cash the amount of such tax required to be
withheld by the Company or has elected to have his withholding obligations met
by the withholding of Common Stock in accordance with the procedures approved by
the Committee or otherwise entered into an agreement satisfactory to the Company
providing for payment of withholding tax.
(c) The Company shall first withhold from any cash bonus described in
Paragraph 8, an amount of cash sufficient to meet its tax withholding
obligations before the amount of Common Stock paid in accordance with Paragraph
8 is determined.
13. Changes in Capital. Upon changes in the outstanding Common Stock by
reason of a stock dividend, stock split, reverse split, subdivision,
recapitalization, merger, consolidation (whether or not the Company is a
surviving corporation), an extraordinary dividend payable in cash or property,
combination or exchange of shares, separation, reorganization or liquidation,
the aggregate number and class of shares available under the Plan as to which
stock options and restricted stock may be awarded, the number and class of
shares under (i) each option and the option price per share and (ii) each award
of restricted stock shall, in each case, be correspondingly adjusted by the
Committee, such adjustments to be made in the case of outstanding options
without change in the total price applicable to such options.
14. Miscellaneous Provisions. (a) The Plan shall be unfunded. The Company
shall not be required to establish any special or separate fund or to make any
other segregation of assets to assure the issuance of shares or the payment of
cash upon exercise of any option or stock appreciation right under the Plan.
Proceeds from the sale of shares of Common Stock pursuant to options granted
under this Plan shall constitute general funds of the Company. The expenses of
the Plan shall be borne by the Company.
(b) It is understood that the Committee may, at any time and from time to
time after the granting of an option or the award of restricted stock or bonuses
payable in Common Stock hereunder, specify such additional terms, conditions and
restrictions with respect to such option or stock as may be deemed necessary or
appropriate to ensure compliance with any and all applicable laws, including,
but not limited to, terms, restrictions and conditions for compliance with
federal and state securities laws and methods of withholding or providing for
the payment of required taxes.
(c) If at any time the Committee shall determine, in its discretion, that
the listing, registration or qualification of shares of Common Stock upon any
national securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the sale or purchase of shares of Common
Stock hereunder, no option may be exercised or restricted stock or stock bonus
may be transferred in whole or in part unless and until such listing,
registration, qualification, consent or approval shall have been effected or
obtained, or otherwise provided for, free of any conditions not acceptable to
the Committee.
(d) By accepting any benefit under the Plan, each Participant and each
person claiming under or through such Participant shall be conclusively deemed
to have indicated his acceptance and
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ratification, and consent to, any action taken under the Plan by the Committee,
the Company or the Board.
(e) The Plan shall be governed by and construed in accordance with the laws
of the State of New York.
15. Limits of Liability. (a) Any liability of the Company or a subsidiary
of the Company to any Participant with respect to any option or award shall be
based solely upon contractual obligations created by the Plan and the Agreement.
(b) Neither the Company nor a subsidiary of the Company, nor any member of
the Committee or the Board, nor any other person participating in any
determination of any question under the Plan, or in the interpretation,
administration or application of the Plan, shall have any liability to any party
for any action taken or not taken in connection with the Plan, except as may
expressly be provided by statute.
16. Amendments and Termination. The Board may, at any time, amend, alter or
discontinue the Plan; provided, however, no amendment, alteration or
discontinuation shall be made which, without the approval of the shareholders,
would:
(a) except as is provided in Paragraph 13, increase the maximum number
of shares of Common Stock reserved for the purpose of the Plan;
(b) except as is provided in Paragraph 13, decrease the option price
of an option to less than 100% of the fair market value, as determined in
accordance with Paragraph 6(a), of a share of Common Stock on the date of
the granting of the option;
(c) change the class of persons eligible to receive an award of
restricted stock, options or bonuses payable in Common Stock under the
Plan; or
(d) extend the duration of the Plan.
The Committee may amend the terms of any award of restricted stock or
option theretofore granted, retroactively or prospectively, but no such
amendment shall impair the rights of any holder without his or her written
consent.
17. Duration. The Plan shall be adopted by the Board as of the date on
which it is approved by a majority of the Company's stockholders, which approval
must occur within the period ending twelve months after the date the Plan is
adopted. The Plan shall terminate upon the earlier of the following dates or
events to occur:
(a) upon the adoption of a resolution of the Board, terminating the
Plan; or
(b) the date all shares of Common Stock subject to the Plan are
purchased according to the Plan's provisions; or
(c) ten years from the date of adoption of the Plan by the Board.
No such termination of the Plan shall affect the rights of any Participant
hereunder and all options previously granted and restricted stock and stock
bonuses awarded hereunder shall continue in force and in operation after the
termination of the Plan, except as they may be otherwise terminated in
accordance with the terms of the Plan.
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[LOGO]
OMI CORP.
Notice of
Annual Meeting
and
Proxy Statement
Annual Meeting
of Stockholders
May 23, 1995
9:15 A.M.
The New York
Helmsley Hotel
212 East 42nd Street
New York, NY
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APPENDIX
(Pursuant to Rule 304 of Regulation S-T)
1. Page 14 contains a description in tabular form of a graph entitled
"Stockholder Return Performance Graph" which represents the comparison of the
cumulative total stockholder return on the Company's Common Stock against the
cumulative total return of the Dow Jones Equity Market Index and the
Dow Jones Marine Transportation Index for the period of five years
commencing December 31, 1989 and ending December 31, 1994, which graph is
contained in the paper format of this Proxy Statement being sent to
Stockholders.
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OMI CORP.
This proxy is solicited by the Board of Directors
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned stockholder of OMI
CORP. (the "Corporation") does hereby constitute and appoint JACK GOLDSTEIN,
MICHAEL KLEBANOFF and FREDRIC S. LONDON, and each of them, attorneys and proxies
with full power of substitution to each, for and in the name of the undersigned
and with all the powers the undersigned would possess if personally present, to
vote all the shares of Common Stock of the undersigned in the Corporation at the
Annual Meeting of Stockholders of the Corporation, to be held at The New York
Helmsley Hotel, Knickerbocker Suite, Salon D, third floor, 212 East 42nd Street,
New York, New York on Tuesday, May 23, 1995 at 9:15 A.M., on all matters as may
properly come before the meeting, as set forth in the Notice of Annual Meeting
of Stockholders, dated April 18, 1995 and at any and all adjournments thereof.
The Board of Directors recommends that stockholders vote for the election
of the nominees for directors, for the ratification of the appointment of
Deloitte & Touche LLP as auditors, for the adoption of the 1995 Stock Option
Plan for Non-Employee Directors and for the adoption of the 1995 Equity
Incentive Plan. If no specification is made as to any proposal, the shares will
be voted for the election of the nominees for directors, for the ratification of
the appointment of Deloitte & Touche LLP as auditors, for the adoption of the
1995 Stock Option Plan for Non-Employee Directors and for the adoption of the
1995 Equity Incentive Plan.
(Continued and to be signed on the reverse side)
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no such directions are given with respect to
all or some items, as to such items, this Proxy will be voted FOR Proposals 1,
2, 3 and 4.
[X] Please mark your votes like this in blue or black ink
----------
COMMON
The Board of Directors recommends a vote FOR all nominees in Proposal 1, FOR
Proposal 2, FOR Proposal 3 and FOR Proposal 4.
Proposal 1: FOR election of the following three Class III directors for a
three-year term, each to hold office until his successor shall be elected
and qualified: Jack Goldstein, Steven D. Jellinek and Craig H. Stevenson,
Jr.
WITHHOLD
AUTHORITY
to vote
FOR for all nominees
[ ] [ ]
Proposal 2: RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS AUDITORS
OF THE CORPORATION FOR THE YEAR 1995.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Proposal 3: FOR the adoption of the 1995 Stock Option Plan for Non-Employee
Directors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Proposal 4: FOR the adoption of the 1995 Equity Incentive Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
I PLAN TO ATTEND MEETING [ ]
(To withhold authority to vote for any individual nominee, print that nominee's
name below).
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Signature(s)________________________________________ Date_____________
NOTE: Please mark, date, and sign your name as it appears hereon and return in
the enclosed envelope. When signing as an attorney, executor, administrator,
trustee or guardian, please give title as such. If signer is a corporation,
please sign full corporate name by authorized officer and attach corporate seal.
For joint accounts, each joint owner should sign.
