<PAGE>
Being Filed Pursuant to Rule 901 (d) of Regulation S-T
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934.
For the period from to
Commission File Number
2-87930
OMI CORP.
(Exact name of registrant as specified in its charter)
Delaware 13-2625280
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
90 Park Avenue, New York, N.Y. 10016
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (212) 986-1960
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities and Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of August 14, 1995:
Common Stock, par value 0.50 per share 31,001,057 shares
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OMI CORP. AND SUBSIDIARIES
INDEX
PART I: FINANCIAL INFORMATION Page
Item 1. Financial Statements
Condensed Consolidated Statements of
Operations for the three and six months
ended June 30, 1995 and 1994 3
Condensed Consolidated Balance Sheets-
June 30, 1995 and December 31, 1994 4
Consolidated Statements of Changes in
Stockholders' Equity for the six months
ended June 30, 1995 5
Consolidated Statements of Cash Flows for the six
months ended June 30, 1995 and 1994 7
Notes to Condensed Consolidated Financial
Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
PART II: OTHER INFORMATION 15
SIGNATURES 16
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<TABLE>
<CAPTION>
OMI CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Voyage revenues $60,806 $66,048 $116,269 $131,139
Other income 1,357 1,145 2,884 2,742
Total revenues 62,163 67,193 119,153 133,881
Operating Expenses:
Vessel and voyage 52,329 54,574 102,034 103,609
Depreciation and
amortization 8,499 9,862 17,192 19,603
Operating lease 1,360 1,755 2,963 3,837
General and
administrative 3,842 4,432 7,713 8,634
Total operating
expenses 66,030 70,623 129,902 135,683
Operating loss (3,867) (3,430) (10,749) (1,802)
Other (Expense) Income:
(Loss)gain on disposal of
assets-net (1,128) 105 6,235 2,959
Interest
expense-net (6,214) (6,381) (12,704) (13,340)
Minority interest
in (income) loss
of subsidiary (22) (40) 119 (101)
Other-net 458 883
Net other expense (6,906) (6,316) (5,467) (10,482)
Loss before income
taxes and equity in
operations of joint
ventures (10,773) (9,746) (16,216) (12,284)
Benefit for
income taxes (3,397) (3,517) (5,195) (4,387)
Loss before equity
in operations
of joint ventures (7,376) (6,229) (11,021) (7,897)
Equity in operations
of joint
ventures-net 2,080 854 4,599 759
Net loss $(5,296) $(5,375) $(6,422) $(7,138)
Net loss per
common share $(0.17) $(0.18) $(0.21) $(0.23)
Weighted average
number of shares
of common stock
outstanding 30,533 30,682 30,510 30,670
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
OMI CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JUNE 30, 1995 DEC. 31, 1994
ASSETS (UNAUDITED)
Current assets:
Cash, including cash equivalents: 1995-
$16,980, 1994-$19,734 $ 29,330 $ 31,797
Marketable securities 1,653 14,415
Advances to masters 4,618 635
Receivables:
Traffic 11,554 16,364
Other 14,664 9,442
Prepaid expenses and other current assets 9,241 8,726
Total current assets 71,060 81,379
Capital construction and other restricted funds 9,583 12,961
Vessels and other property, at cost 680,213 695,399
Less accumulated depreciation (290,516) (294,401)
Vessels and other property-net 389,697 400,998
Investments in, and advances to joint ventures 83,536 81,868
Long-term investments 591 3,075
Other assets and deferred charges 23,324 24,851
Total $ 577,791 $ 605,132
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,474 $ 6,842
Accrued liabilities:
Voyage and vessel 30,566 22,075
Interest 4,422 4,563
Other 4,192 5,838
Current portion of long-term debt 19,767 18,900
Total current liabilities 62,421 58,218
Long-term debt 244,303 253,239
Deferred income taxes payable 71,363 79,448
Advance time charter revenues
and other liabilities 27,246 31,509
Minority interest in subsidiary 2,922 3,042
Stockholders' equity 169,536 179,676
Total $ 577,791 $ 605,132
See notes to condensed consolidated financial statements.
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OMI CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
(IN THOUSANDS)
Cumulative
Common Stock Capital Retained Translation
Shares Amount Surplus Earnings Adjustment
Balance at
January 1,
1995 30,672 $15,336 $129,919 $26,631 $4,912
Net loss (6,422)
Exercise of
stock options 84 42 368
Amortization of
unearned
compensation
Net change
in valuation
account
Sale of securities
Sale of treasury stock (130)
Balance at
June 30,1995 30,756 $15,378 $130,157 $20,209 $4,912
See notes to condensed consolidated financial statements.
<PAGE>
OMI CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
(IN THOUSANDS)
Unearned Unrealized
Unearned Compensation Gain on
Compensation Restricted Securities
From ESOP Stock -net
Balance at January 1, 1995 ($663) ($941) $5,684
Net loss
Exercise of stock options
Amortization of unearned
compensation 332 56
Net change in valuation
account 751
Sale of securities (6,119)
Sale of treasury stock
Balance at June 30,1995 ($331) ($885) $316
Total
Treasury Stockholders'
Stock Equity
Balance at January 1, 1995 ($1,202) $179,676
Net loss (6,422)
Exercise of stock options 410
Amortization of unearned
compensation 388
Net change in valuation
account 751
Sale of securities (6,119)
Sale of treasury stock 982 852
Balance at June 30,1995 ($220) $169,536
See notes to condensed consolidated financial statements.
<PAGE>
OMI CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
FOR THE SIX MONTHS
ENDED JUNE 30, 1995 1994
CASH FLOWS (USED) PROVIDED
BY OPERATING ACTIVITIES:
Net loss $(6,422) $(7,138)
Adjustments to reconcile net loss
to net cash used
by operating activities:
Decrease in deferred income taxes payable (5,195) (4,387)
Depreciation and amortization 17,192 19,603
Amortization of unearned compensation 388 921
Gain on disposal of assets-net (6,322) (2,959)
Other - net (883)
Equity in operations of joint ventures
(over) under dividends received (3,399) 206
Changes in assets and liabilities:
Increase in receivables and other current assets (4,637) (7,143)
(Decrease) increase in accounts payable and
accrued expenses (396) 4,944
Advances from (to) joint ventures - net 2,585 (4,771)
Decrease (increase) in other assets and deferred
charges 935 (1,400)
Decrease in advance charter hire and
other liabilities (2,144) (2,038)
Other assets and liabilities - net 1,007 162
Net cash used by operating activities (7,291) (4,000)
CASH FLOWS PROVIDED (USED)
BY INVESTING ACTIVITIES:
Additions to vessels and other property (15,319) (13,924)
Proceeds from disposition of assets 8,938 8
Proceeds received from sale of
marketable securities 13,535 3,749
Return of investment in joint ventures 1,485
Proceeds and interest received and
reinvested in the
Capital construction and other
restricted funds (224) (344)
Withdrawals from Capital construction and other
restricted funds 4,700
Investments in joint ventures (1,597)
Net cash provided (used) by investing activities 11,630 (10,623)
CASH FLOWS (USED) PROVIDED BY FINANCING ACTIVITIES:
Net proceeds from issuance of common stock 137 263
Proceeds from issuance of long-term debt 9,257 12,050
Payments on long-term debt (16,200) (9,574)
Net cash (used) provided by financing activities (6,806) 2,739
Net decrease in cash and cash equivalents (2,467) (11,884)
Cash and cash equivalents at beginning of period 31,797 45,321
Cash and cash equivalents at end of period $29,330 $33,437
See notes to condensed consolidated financial statements.
<PAGE>
OMI CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and,
therefore, do not include all information and footnotes necessary for a fair
presentation of financial position, results of operations and cash flows in
conformity with generally accepted accounting principles. However, in the
opinion of management of OMI Corp. and subsidiaries ("OMI" or the "Company"),
all adjustments (comprising only normal recurring accruals) necessary for a
fair presentation of operating results have been included in the
statements.
NOTE 2 - INCOME TAXES
The benefit for income taxes for the six months ended June 30, 1995 varied
from statutory rates as follows:
(in thousands)
Tax benefit calculated at statutory
rates $ (4,066)
Equity in operations of joint ventures of $3,227,000
(net of dividends declared) not tax effected as
management considers it to be permanently invested (1,129)
Total $ (5,195)
The Company has not provided deferred income taxes on its equity in the
undistributed earnings of foreign corporate joint ventures accounted for
under the equity method other than Amazon Transport, Inc. ("Amazon") and
White Sea Holdings Ltd. These earnings are considered by management to be
permanently invested in the business.
NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments include interest of approximately $13,813,000 and $14,854,000
for the six months ended June 30, 1995 and 1994, respectively. There were no
income taxes paid during the six months ended June 30, 1995 or June 30, 1994.
NOTE 4 - JOINT VENTURE INFORMATION
Amazon and Wilomi, Inc. ("Wilomi") are both 49 percent owned by OMI and are
accounted for using the equity method.
<PAGE>
Summarized income statement information, in accordance with Regulation S-X Rule
10-01 (b) (1), for the three months and six months ended June 30, 1995 and 1994
for Amazon and Wilomi are as follows:
For the Three Months Ended June 30,
Amazon Wilomi
(In thousands) 1995 1994 1995 1994
Revenues $2,084 $1,460 $4,184 $5,154
Expenses 2,568 1,840 3,509 3,254
Operating (loss)
income (484) (380) 675 1,900
Net (loss) income ($460) ($357) ($713) $776
For the Six Months Ended June 30,
Amazon Wilomi
(In thousands) 1995 1994 1995 1994
Revenues $4,758 $3,108 $9,519 $9,936
Expenses 5,176 3,596 6,640 7,119
Operating (loss)
income (418) (488) 2,879 2,817
Net (loss) income ($369) ($426) $251 $810
Note 5 - Net Loss per Common Share
Net loss per common share is determined by dividing net loss by the weighted
average number of common shares outstanding during the period. Shares
issuable upon the exercise of stock options have not been included in the
computation because their effect would be anti-dilutive.
Note 6 - Credit Lines
OMI had available four lines of credit with banks at variable rates based on
LIBOR aggregating a total of $72,000,000; $62,743,000 was unused at June
30, 1995.
Note 7 - Commitments
OMI and a joint venture partner are constructing a vessel in the Peoples
Republic of China for a cost of approximately $54,400,000. The vessel is
scheduled to be delivered in 1996. OMI guarantees 49 percent, through a joint
venture subsidiary, of the shipbuilding contract as a backup guarantor to the
joint venture partner.
Note 8 - Guaranteed Debt
OMI acts as a guarantor for a portion of the debt incurred by joint
ventures with affiliates of two of its joint venture partners. Such debt was
approximately $97,785,000 at June 30, 1995, with OMI's share of such
guarantees being approximately $46,135,000. OMI also is a guarantor for one
of its joint venture's revolving line of credit of $4,000,000, with a
guarantee to OMI from its joint venture partner of $2,000,000.
The Company and its joint venture partners have committed to fund any working
capital deficiencies which may be incurred by their joint venture
investments. At June 30, 1995, no such deficiencies have occurred which have
required funding.
Note 9 - Exchange of Vessels
On June 27, 1995, OMI announced it had reached an agreement with A/S
Dampskibssels Torm and Partners ("TORM") to acquire three 30,000 dwt.,
product carriers in exchange for a large product carrier, other vessels and
monetary consideration in a like kind exchange. The exchange is to be
completed by November 30, 1995.
<PAGE>
Item. 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of operations for the six months ended June 30, 1995 versus June 30,
1994
OMI Corp. ("OMI" or the "Company") is a diversified major bulk shipping
company operating in both the U.S. flag and international markets. OMI's
operating fleet currently totals 44 vessels including ten joint venture
vessels, one leased and six chartered-in vessels. One Suezmax tanker is
currently under construction and scheduled for delivery in 1996 to a 49
percent owned joint venture. The Company is involved in other marine related
activities, including lightering of crude carriers and workboat supply
services in the Gulf of Mexico and ship management for the U.S. Government.
Results of operations of OMI Corp. include operating activities of the
Company's domestic and foreign vessels. The discussion that follows explains
the Company's operating results in terms of net voyage revenue, which is
voyage revenue less vessel and voyage expenses, because fluctuations in
voyage revenues and expenses occur based on the nature of a charter. The
Company's vessels currently operate, or have operated in prior years, on
time charters, short-term time charters ("STC"), bareboat or voyage ("spot")
charters. Each type of charter denotes a method by which revenue and
expenses are recorded. Under a time charter, revenue is measured based on a
daily or monthly rate and the charterer assumes certain operating expenses,
such as bunkers and port charges. Bareboat charters are similar to time
charters but the charterer assumes all operating expenses. The revenue rate
is likely to be lower than a time charter since the costs are covered by the
charterer. Under a voyage charter, revenue is calculated based on the amount
of cargo carried, most expenses are for the ship owner's account and the
length of the charter is one voyage. Revenue may be higher in the spot market
as the owner is responsible for most of the costs of the voyage.
Net voyage revenues of $14,235,000 for the six months ended June 30, 1995,
decreased $13,295,000 or 48 percent, as compared to the six months ended June
30, 1994. The decrease was primarily attributable to the U.S. flag fleet,
which accounted for $12,395,000 of the decline. In comparison to the first
six months of 1994, decreases in 1995 in domestic operations primarily
resulted from the following: (1) three vessels, which had contributed over
three million dollars in net voyage revenues in the first six months of 1994
were sold in July 1994, (2) three vessels were drydocked in the first six
months of 1995 resulting in offhire days and increases to drydock expense
(3) three vessels were affected by the decline in the PL480 program under
which the U. S. Government sells or donates surplus grain for export to
developing countries, (4) lower rates and higher costs for the OMI Columbia
which has been trading in PL480 cargoes during 1995, and (5) less revenue
generated by OMI's 80 percent owned subsidiary OMI Petrolink Corporation, due
to depressed rates for lightering operations in the Gulf of Mexico.
Six domestic vessels share four Operating Differential Subsidy ("ODS")
contracts. Such contracts are issued by the Marine Subsidy Board of the U. S.
Department of Transportation ("Subsidy Board") and provide subsidy for a portion
of the difference in the costs between operating a U.S. Flag vessel versus a
foreign vessel. On August 10, 1995, the Company received permission from the
Subsidy Board to allow the OMI Columbia to participate in the four existing
ODS contracts, bringing the total number of eligible vessels to seven.
In 1994, four product carriers operated in the spot market and received ODS.
Two of these vessels are currently receiving ODS and are operating in foreign
trades with slightly better earnings in 1995 due to
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improved trading patterns. The other two product carriers began time
charters in April 1995 with the Military Sealift Command ("MSC") for
approximately six months. Prior to the commencement of the charters with MSC,
these vessels were offhire an aggregate of 107 days while in drydock
undergoing upgrades. At this time the Company has been notified that the
vessels have been rechartered by MSC. The other two vessels
included in the ODS pool are dry bulk carriers which were previously
operating under PL480 programs that were profitable until 1994, when less
cargo became available under these programs. The decline in tonnage available
in these programs continues, with no expected increase in the foreseeable
future. In 1995, the bulkers were operated in the foreign spot market through
June and July, and then each began time charters in foreign markets for
approximately ten and twelve month periods. While the vessels are operating
in foreign markets, they are eligible for subsidy. The Platte, a dry bulk
carrier not eligible for ODS, has operated in the PL480 programs but has
experienced a significant number of offhire days in both 1994 and 1995. This
vessel is currently operating on a six month commercial time charter expiring
in November. The Company is supporting legislation to reflag this vessel
under foreign registry so that it may compete more effectively in the foreign
market.
The OMI Columbia has incurred significant offhire days due to the periodic
lay-up of the vessel between 1992 and 1995 because of the lack of business.
In 1994, the OMI Columbia operated on four consecutive voyage charters in the
Alaskan North Slope trade. Alaskan crude oil production has decreased in
the last three years, and distribution favors shorter hauls. Since late 1994,
the vessel has been employed sporadically carrying cargo under PL480 programs
at rates lower than rates in crude oil trade. During July 1995, legislation
to lift the ban on exporting Alaskan oil was voted on and approved in the
U.S. House of Representatives. A conference report of a joint House and
Senate committee must still be approved and forwarded to the President for
signature. When this process is completed, it is expected that the demand for
vessels such as the OMI Columbia will improve.
The net decrease in foreign net voyage revenues of $900,000 was primarily the
result of drydocking six vessels in the first half of 1995 for an aggregate
of 206 days compared to two vessels drydocked in the first six months of 1994
for an aggregate of 63 days. The Company drydocked the majority of its
foreign vessels scheduled for drydock in 1995 in the second quarter of 1995
because the second quarter is typically the weakest quarter to trade. Another
contributing factor to the decrease in revenues was that three vessels
currently operating in the spot market were operating on bareboat/time
charters at slightly better rates in 1994. OMI operates 17 wholly owned
vessels in its foreign fleet that comprises a VLCC, a Liquid Petroleum Gas
Carrier ("LPG"), and Suezmax and Product Tankers. In 1995, all markets for
these vessels have shown significant improvements in comparison to 1994
(although rates are improving in the spot market in 1995, time charter rates
in 1994 were still better in comparison). The improvements in the market are
a result of increased demand in the Far East, specifically, Japan, Korea,
Taiwan and China, due to the improving economies of these countries.
Additionally, rates have increased due to the decline in the supply of world
fleet tankers in 1995 in comparison to 1994.
<PAGE>
On June 27, 1995, OMI entered into an agreement with A/S Dampskibssels Torm
and Partners ("TORM") to acquire three 30,000 dwt. product carriers in
exchange for a large product carrier, two other vessels and cash in a
like-kind exchange. The exchange is to be completed by November 30, 1995, and
is in line with OMI's marketing strategy to expand its position in small size
product carriers, while turning over its older vessels for a younger fleet.
Results of operations for the three months ended June 30, 1995 versus June
30, 1994
Net voyage revenue decreased $2,997,000 or 26 percent, for the three months
ended June 30, 1995, as compared to the same period in 1994. Net decreases in
domestic net voyage revenues of $3,471,000 were offset in part by a net
increase in foreign operations of $474,000. The primary reasons for the net
decrease in the second quarter of 1995 were from the decline in net voyage
revenues resulting from the sale of three domestic vessels during July 1994,
offhire due to drydocking vessels, including additional drydock expenses
realized on four vessels, two for work performed for the preparation of the
vessels to trade on time charters with MSC and two for additional
maintenance required to adhere to OMI's corporate policy of efficiency and
safety, and lower net voyage revenues received for lightering operations in
the Gulf of Mexico. Foreign net voyage revenues increased primarily due
to the reversal of the drydock accrual on a vessel that was sold in June
1995, and decreases in vessel expenses on another vessel.
Other Income
Other income consists primarily of management fees and dividend income on
investments. For the six months ended June 30, 1995, other income increased
$142,000 or five percent as compared to the six months ended June 30, 1994.
The increase in the first half of 1995 was primarily from fees received from
the management of vessels for the U.S. government offset by a smaller
dividend received in 1995 then in 1994 on a foreign investment in which OMI
holds a minority position.
Other income increased $212,000 or 19 percent in the second quarter of 1995
primarily because of the management fees mentioned above.
Other Operating Expenses
The Company's operating expenses, other than vessel and voyage expenses,
consist of depreciation and amortization, operating lease expense and general
and administrative expenses. For the six months ended June 30, 1995, these
expenses decreased an aggregate of $4,206,000 or 13 percent. The primarily
reason for the decrease was a reduction in depreciation expense of
$2,411,000, resulting principally from the sale of three domestic vessels
during the third quarter of 1994. Operating lease expense is less in 1995
compared to the first six months of 1994, because of reduced lease expense on
a vessel lease for which an impairment loss was recorded in December 1994..
Salary expense increased for a one time charge of $809,000 for employees
electing to terminate their employment under a voluntary severance program in
February 1995. This increase was offset by decreases in salaries and
employee benefits subsequent to February for fewer individuals employed
compared to the same period 1994. Other reductions in general and
administrative ("G & A") expenses include a decline in professional fees
compared to the six months ended June 30, 1994.
<PAGE>
Other operating expenses decreased $2,363,0000 or 15 percent for the three
months ended June 30, 1995, compared to the three months ended June 30, 1994.
See the previous paragraph for explanations for decreases in depreciation
expense of $1,363,000, operating lease expense and G & A expenses in the
second quarter of 1995.
Other Income (Expense)
Other income (expense) consists of gain on disposal of assets-net, interest
expense-net, minority interest in (income) loss of subsidiary and other-net.
The decrease of $5,015,000 or 48 percent in net other expense for the six
months ended June 30, 1995, compared to the same period in 1994 was primarily
due to the sale of 2,503,389 shares of Noble Drilling Corporation ("Noble")
stock and 58,000 shares of SEACOR Holdings Inc. stock at an aggregate gain of
$8,111,000 compared to a gain on investments of $2,814,000 in 1994. The
gain on sale of stock was offset by the loss on the sale of a vessel of
$1,428,000 during June 1995 and losses on sale of Capital construction fund
("CCF") investments.
Net other expense increased $590,000 or nine percent, in the second quarter
1995 compared to the second quarter 1994 primarily due to the loss on the
sale of the vessel in June 1995 offset by gain on sale of stock.
Benefit for Income Taxes
The benefit for income taxes of $5,195,000 for the six months ended June 30,
1995, varied from statutory rates primarily because deferred taxes are not
recorded for equity in operations of joint ventures, net of dividends
declared, other than Amazon Transport, Inc. and White Sea Holdings Ltd., as
management considers such earnings to be permanently invested.
The benefit for income taxes for the three months ended June 30, 1995, was
$3,397,000.
Equity in Operations of Joint ventures
Equity in operations of joint ventures of $4,599,000 increased $3,840,000 in
the six months ended June 30, 1995, from $759,000 in the first six months in
1994. Increases were primarily attributed to four joint ventures. One 50
percent owned joint venture that operates as technical manager for vessels
recorded significant profits. A 49.9 percent owned joint venture sold a vessel
in the first quarter of 1995 for a gain and achieved earnings from its other
vessel that was delivered in 1994 increased in 1995. Two other joint ventures
contributed to an increase in equity in 1995 due to losses in operations for
the first six months of 1994, one vessel was in drydock and incurred losses in
the spot market and the other joint venture incurred operating losses that
resulted in wrapping-up its business by the end of 1994.
Equity in operations of joint ventures increased $1,226,000 or 144 percent in
the second quarter of 1995 compared to the same period in 1994. Increases
were primarily due to profits from the joint venture that technically manages
vessels, increases in revenue for the vessel that was delivered in 1994 and
from the joint venture that incurred losses in 1994 and began wrapping-up its
operations in December 1994.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital of $8,639,000 at June 30, 1995, decreased
$14,522,000 or 63 percent from $23,161,000 at December 31, 1994. Cash and
cash equivalents of $29,330,000 decreased $2,467,000 or eight percent from
the balance of $31,797,000 at December 31, 1994. For the six months ended
June 30, 1995, net cash used by operating activities was $7,291,000 which was
an increase of $3,291,000 or 82 percent from net cash used by operating
activities of $4,000,000 for the six months ended June 30, 1994.
For the six months ended June 30, 1995, sources of liquidity, other than from
operating activities were primarily from proceeds of $13,535,000 received
from the sale of investments, proceeds of $8,938,000 from the sale of a
vessel, proceeds of $9,257,000 received from a line of credit and qualified
withdrawals of $4,700,000 from the CCF.
The primary uses of cash other than for operating activities during the six
months ended June 30, 1995, were for payments of $16,200,000 of long-term
debt, purchase of a vessel for $9,623,000 and other capital expenditures for
improvements on vessels of $5,696,000.
The Company has four bank lines of credit aggregating $72,000,000 at June 30,
1995, of which $62,743,000 was unused. OMI is in the position to meet its
current and future obligations, and to acquire and dispose of vessels as
opportunity and need arise. Currently, OMI is actively seeking to restructure
its position in the U.S. flag fleet as well as the foreign fleet in
accordance with corporate objectives.
COMMITMENTS
OMI and a joint venture partner have committed to construct a vessel being
built in the Peoples Republic of China for a cost of approximately
$54,400,000. The vessel is scheduled to be delivered in 1996. OMI guarantees
49 percent through a joint venture partner. OMI acts as a co-guarantor for
portion of the debt incurred by joint ventures with affiliates of two of its
joint venture partners. Such debt was approximately $97,785,000 at June 30,
1995, with OMI's share of such guarantees being approximately $46,135,000.
OMI also is guarantor for one of its joint ventures revolving line of credit
of up to $4,000,000 at June 30, 1995, with a guarantee to OMI from its joint
venture partner of 50 percent of the amount guaranteed by OMI.
The Company and its joint venture partners have committed to fund any working
capital deficiencies that may be incurred by their joint venture investments.
At June 30, 1995, no such deficiencies have occurred which have required
funding.
<PAGE>
PART II: OTHER INFORMATION
Item 1 - Legal Proceedings
None.
Item 2 - Changes in Securities
None.
Item 3 - Defaults upon Senior Securities
None.
Item 4 - Submission of Matters to a Vote of Security Holders
On May 23, 1995, OMI Corp. held the annual meeting of shareholders.
At this meeting, the stockholders were asked to consider and vote
upon the following matters:
1) 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 up to 300,000 shares of the common
stock of the Company to Non-Employee Directors, as more fully
set forth in the proxy statement filed with the Securities and
Exchange Commission ("SEC") on April 20, 1995. A total of
24,610,454 votes were cast for, and 1,971,512 votes against
this proposal which was approved.
2) A proposal to approve the adoption by the Board of Directors of
the 1995 Equity Incentive Plan providing for the grant of
options to employees and restricted stock to certain key
employees of up to 1,000,000 shares of common stock of the
Company, as more fully set forth in the proxy statement filed
with the SEC on April 20, 1995. A total of 24,073,983 votes
were cast for, and 2,537,249 votes against this proposal which
was approved.
Item 5 - Other Information
None.
Item 6 - Exhibit and Reports on Form 8-K
a. Exhibits
10.14 OMI Corp. 1995 Stock Option Plan for Non-Employee Directors,
(Executive Compensation Plan).
10.15 OMI Corp. 1995 Incentive Equity Plan, (Executive Compensation
Plan).
27 OMI Corp. - Financial Data Schedule, dated June 30, 1995
b. Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OMI CORP.
(REGISTRANT)
Date: August 14, 1995 By: /s/ Jack Goldstei
Jack Goldstein
President and Chief
Executive Officer
Date: August 14, 1995 By: /s/ Vincent de Sostoa
Vincent de Sostoa
Senior Vice President/
Finance and Chief
Financial Officer
<PAGE>
OMI CORP.
1995 INCENTIVE EQUITY PLAN
1. Purpose. The purpose of the OMI Corp. 1995 Incentive Equity 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,
<PAGE>
who may be of counsel to the Company, and shall not incur any liability for
any actiontaken 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 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 eachsuch employee selected. Such key salaried employees
who are selected to participate in the Plan shall be referred to
collectively herein as "Participants."
<PAGE>
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 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
<PAGE>
Common Stock shall become subject to an option byreason 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.
<PAGE>
(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 andthat they
will be exercisable, during the lifetime of the grantee, only by him or
her.
<PAGE>
(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 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).
<PAGE>
(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 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
examinationsby 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.
<PAGE>
(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 pay-
able 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).
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:
<PAGE>
(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)Eany 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.
<PAGE>
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 procedures approved by the Commit-
tee. 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 applic-
able 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
thepayment 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.
<PAGE>
(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 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 forany action taken or not taken in connection with the Plan, except
as may expressly be provided by statute.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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 SectionE9 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)Eis not and has not been an employee
of the Company or any of its Subsidiaries or affiliates and (ii)Eis 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)EESubject 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 SectionE9), and to
the approval of the Plan by the stockholders of the Company,an Option to
<PAGE>
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 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
<PAGE>
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.
(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 notexercised within the ten-
year period of exercisability, it shall expire as to the then unexercised
part.
<PAGE>
(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 SectionE9) 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
<PAGE>
(C) by a combination of United States dollars and Common Stock shares
as aforesaid, or
(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, theCompany 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.
<PAGE>
In no event, however, may an Option be exercised (i)Eprior to the
expiration of six (6) months from the date of grant, or (ii)Eafter 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
(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 andagrees that any subsequent offer for sale or distribution
<PAGE>
of any of such shares shall be made only pursuant to either (i)Ea
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)Ea 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)Eissuances 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)Ereofferings 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, recapitalization, 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, 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.
<PAGE>
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
andconclusive 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)EEExcept 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
sharesof 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
<PAGE>
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 shallbe
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.
(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 SectionE9 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 SectionE5(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
<PAGE>
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
extentthat, 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 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.
<PAGE>
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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27 contains summary information extracted from OMI Corp. and
subsidiaries Consolidated condensed financial statements and is qualified in its
entirety be reference to such finanical statements.
</LEGEND>
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1
<CASH> 29330
<SECURITIES> 1653
<RECEIVABLES> 11554
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 71060
<PP&E> 680213
<DEPRECIATION> 290516
<TOTAL-ASSETS> 577791
<CURRENT-LIABILITIES> 62421
<BONDS> 244303
<COMMON> 15378
0
0
<OTHER-SE> 154158
<TOTAL-LIABILITY-AND-EQUITY> 577791
<SALES> 0
<TOTAL-REVENUES> 119153
<CGS> 0
<TOTAL-COSTS> 104997
<OTHER-EXPENSES> 24905
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13673
<INCOME-PRETAX> (11617)
<INCOME-TAX> (5195)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6422)
<EPS-PRIMARY> (0.21)
<EPS-DILUTED> (0.21)
</TABLE>
