SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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 Rule14a-12
OVERSEAS SHIPHOLDING GROUP, INC.
---------------------------------
(Name of Registrant as Specified in its Charter)
OVERSEAS SHIPHOLDING GROUP, INC.
--------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
(x) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or
14a-6(j)(2).
( ) $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
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2) Aggregate number of securities to which transaction
applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
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* Set forth the amount on which the filing fee is calculated
and state how it was determined.
4) Proposed maximum aggregate value of transaction:
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( ) Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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<PAGE>
OVERSEAS SHIPHOLDING GROUP, INC.
1114 AVENUE OF THE AMERICAS, NEW YORK, N.Y. 10036
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 9, 1994
TO THE STOCKHOLDERS OF OVERSEAS SHIPHOLDING GROUP, INC.:
The Annual Meeting of Stockholders of Overseas Shipholding
Group, Inc. will be held at J.P. Morgan Investment Management
Inc., 522 Fifth Avenue (corner West 44th Street), New York, N.Y.,
Second Floor, on Thursday, June 9, 1994, at 2:30 o'clock P.M. for
the following purposes:
(l) To elect twelve directors, each for a term of one year;
(2) To consider and act upon a proposal to approve the
appointment of Ernst & Young as independent auditors for the year
1994; and
(3) To transact such other business as may properly be
brought before the meeting.
Stockholders of record at the close of business on April 18,
1994 will be entitled to vote at the meeting. The stockholders
list will be open to the examination of stockholders for any
purpose germane to the meeting, during ordinary business hours,
for ten days before the meeting at the Corporation's office, 1114
Avenue of the Americas, New York, N.Y.
Whether or not you expect to be present at the meeting in
person, please date and sign the enclosed proxy and return it
without delay in the enclosed envelope, which requires no postage
if mailed in the United States.
We urge you to exercise your privilege of attending the
meeting in person. In that event, the Corporation's receipt of
your proxy will not affect in any way your right to vote in
person.
By order of the Board of Directors,
ROBERT N. COWEN
Senior Vice President & Secretary
New York, N.Y.
April 29, 1994
IMPORTANT
PLEASE SIGN, DATE AND PROMPTLY RETURN THE
ENCLOSED PROXY IN THE ENCLOSED RETURN ENVELOPE
<PAGE>
OVERSEAS SHIPHOLDING GROUP, INC.
1114 Avenue of the Americas, New York, N.Y. 10036
------------
PROXY STATEMENT
The accompanying proxy is solicited on behalf of the Board of
Directors of Overseas Shipholding Group, Inc. (the "Corporation")
for use at the Annual Meeting of Stockholders to be held on June
9, 1994. Any stockholder giving a proxy may revoke it at any
time before it is exercised at the meeting.
Only stockholders of record at the close of business on April
18, 1994 will be entitled to vote at the annual meeting. The
Corporation has one class of voting securities, its Common Stock,
of which 36,203,902 shares were outstanding on said record date
and entitled to one vote each. This proxy statement and the
accompanying proxy will first be sent to stockholders on or about
April 29, 1994.
ELECTION OF DIRECTORS
The twelve nominees for election at the forthcoming meeting,
all of whom are presently directors of the Corporation, are
listed below. Unless otherwise directed, the accompanying proxy
will be voted for the election of these nominees, to serve for
the ensuing year and until their successors are elected and
qualify.
The table below sets forth information as to each nominee,
and includes the amount and percentage of the Corporation's
Common Stock of which each nominee, and all directors and
executive officers as a group, were the "beneficial owners" (as
defined in regulations of the Securities and Exchange Commission)
on April 18, 1994, all as reported to the Corporation. In
accordance with SEC regulations, the table includes, in the case
of certain of the nominees, all shares owned by partnerships or
other entities in which the nominee, by reason of his position or
interest, shares the power to vote or to dispose of securities.
<TABLE>
<CAPTION>
Percentage
Served Shares of of
as Common Stock Common Stock
Principal Director Beneficially Beneficially
Name and Age Occupation Since Owned (a) Owned
- - ------------ ----------- ----- --------- ------
<S> <C> <C> <C> <C>
Raphael Recanati*, 70.... President, 1969 6,647,926 (b)(h) 18.4%
Finmar
Equities Co.,
shipping,
finance and
banking.
Morton P. Hyman*, 58..... President of 1969 190,000 (c) 0.5%
the
Corporation.
Michael A. Recanati*, 36. Executive 1987 91,065 (d)(h) 0.3%
Vice
President of
the
Corporation.
Robert N. Cowen, 45...... Senior Vice 1993 24,500 0.1%
President,
Secretary and
General
Counsel of
the
Corporation.
George C. Blake*, 62..... Executive 1988 49,400 0.1%
Vice
President,
Maritime
Overseas
Corporation,
ship agents
and brokers.
Thomas H. Dean, 65....... Senior Vice 1976 -- --
President-
Corporate
Development
and Planning,
Continental
Grain
Company,
integrated
food company.
Michel Fribourg, 80...... Chairman of 1969 2,823,241(e) 7.8%
the Board,
Continental
Grain
Company.
William L. Frost, 67..... Attorney and 1989 4,000(f) --
President,
Lucius N.
Littauer
Foundation.
Ran Hettena*, 70......... President, 1969 30,241(g)(h) 0.1%
Maritime
Overseas
Corporation.
Stanley Komaroff, 59..... Chairman, law 1993 200 --
firm of
Proskauer
Rose Goetz &
Mendelsohn,
the
Corporation's
counsel.
Solomon N. Merkin, 37.... Vice 1989 (i) --
President,
Leib Merkin,
Inc., private
investment
company.
Joel I. Picket, 55....... President and 1989 200 --
Chairman of
the Board,
Gotham
Organization
Inc., real
estate,
construction
and
development.
All directors and executive officers as a group 9,895,773(j) 27.1%
<PAGE>
- - --------------
* Member of Finance and Development Committee of the Board, of
which Committee Mr. Raphael Recanati is Chairman and Mr.
Michael A. Recanati is Vice Chairman.
(a) Unless otherwise indicated, each of the nominees has the
sole power to vote and direct disposition of the shares
shown as beneficially owned by him. Number of shares shown
includes shares issuable on exercise of vested options held
by Messrs. Hyman (120,000 shares), M. Recanati (90,000
shares), Cowen (24,000 shares) and Blake (48,000 shares),
and all directors and executive officers as a group (336,000
shares).
(b) Includes 5,670,362 shares as to which Mr. Raphael Recanati
shares the power to vote and/or to direct disposition, of
which 2,986,416 shares are owned by OSG Holdings, a
partnership in which Mr. Recanati and his wife, as tenants
in common, have a 25% partnership interest. Mr. Recanati's
address is 511 Fifth Avenue, New York, New York.
(c) Includes 20,000 shares owned by a corporation in which Mr.
Hyman shares the power to vote and/or to direct disposition;
excludes 280 shares owned by Mr. Hyman's wife, beneficial
ownership of which is disclaimed by him.
(d) In addition, Mr. Michael A. Recanati is a 0.57% partner in
OSG Holdings.
(e) All of these shares are owned by Fribourg Enterprises L.P.,
a partnership; Mr. Fribourg has the sole power to vote and
direct the disposition of all of said shares. The address
for Mr. Fribourg and Fribourg Enterprises L.P. is 277 Park
Avenue, New York, New York.
(f) Excludes 400 shares owned by Mr. Frost's wife, beneficial
ownership of which is disclaimed by him.
(g) Excludes 12,493 shares owned by Mr. Hettena's wife,
beneficial ownership of which is disclaimed by him.
(h) Mr. Hettena and Mr. Raphael Recanati are brothers-in-law.
Mr. Michael A. Recanati is a son of Mr. Raphael Recanati and
a nephew of Mr. Hettena.
(i) Mr. Merkin is a 0.91% partner in OSG Holdings.
(j) Of the 9,895,773 shares, persons who are directors or
executive officers have sole power to vote and direct
disposition of 4,225,411 shares (11.6% of the outstanding
shares of the Corporation) and share with other persons the
power to vote and/or direct disposition of 5,670,362 shares
(15.5% of the outstanding shares).
</TABLE>
Each nominee has been principally engaged in his present
employment for the past five years except Mr. Cowen, who has
served as General Counsel of the Corporation since November 1989
and Senior Vice President since February 1993; he also serves as
executive vice president and a director of Overseas Discount
Corporation, which is engaged in the business of finance and
investment. Mr. Komaroff is a director of Club Med, Inc.
Mr. Raphael Recanati is a director of IDB Holding Corporation
Ltd. and several of its subsidiaries. In February 1994, following
a lengthy trial in Israel, the four largest banks in that
country, including Israel Discount Bank Limited, and its former
parent IDB Holding Corporation Ltd., and members of their senior
management were found guilty, in connection with acts that
occurred prior to October 1983, of engaging in fraudulent
securities transactions and making false statements within the
meaning of certain provisions of that country's banking,
securities and other laws. The violations involve activities,
which terminated in October 1983, relating to shares of these
Israeli institutions. Mr. Recanati was chief executive officer
of Israel Discount Bank Limited and is among the defendants found
guilty. Mr. Recanati has categorically denied any wrongdoing and
is appealing. None of the activities in question relate to or
involve the Corporation or its business in any way.
If, for any reason, any nominee should not be available for
election or able to serve as a director, the accompanying proxy
will be voted for the election of a substitute nominee designated
by the Board of Directors. The Board has no reason to believe
that it will be necessary to designate a substitute nominee.
COMPENSATION AND CERTAIN TRANSACTIONS
The following Summary Compensation Table includes individual
compensation information for services in all capacities to the
Corporation and its subsidiaries during the years ended December
31, 1993, 1992 and 1991 by the Chief Executive Officer and the
three other executive officers of the Corporation serving during
1993 whose salary for said year exceeded $100,000.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual
Compensation
------------
Name and Principal All Other
Position Year Salary Compensation
- - ------------------- ---- ----------- ------------
<S> <C> <C> <C>
Morton P. Hyman.......... 1993 $915,000(1)(5) $13,015(2)
President (CEO) 1992 865,000 11,953
1991 815,000 --
Michael A. Recanati...... 1993 735,000(1)(5) 917(3)
Executive Vice President (COO) 1992 397,500 0
1991 375,000 --
Robert N. Cowen.......... 1993 175,000 1,145(4)
Senior Vice President, 1992 175,000 0
Secretary and General Counsel 1991 163,300 --
Gabriel Kahana........... 1993 425,000(1)(5) 0
Senior Vice President and 1992 -- --
Treasurer (CFO) 1991 -- --
- - -----------
(1) Includes a director's fee of $50,000 paid by Celebrity
Cruise Lines Inc., the Corporation's cruise business joint
venture.
(2) Consists of matching contributions by the Corporation under
its Savings Plan ($4,497) and the cost of term life
insurance ($8,518).
(3) Matching contribution by the Corporation under its Savings
Plan.
(4) Cost of term life insurance.
(5) See the third paragraph on page 9 and the first paragraph on
page 10.
</TABLE>
<TABLE>
AGGREGATE OPTION EXERCISES IN 1993
AND YEAR-END OPTION VALUES (1)
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at December 31, 1993 December 31, 1993 (2)
Name Exercisable/Unexercisable Exercisable/Unexercisable
----- ------------------------- -------------------------
<S> <C> <C>
Morton P. Hyman...... 120,000 / 80,000 $1,155,000 / 770,000
Michael A. Recanati.. 90,000 / 60,000 866,250 / 577,500
Robert N. Cowen...... 18,000 / 12,000 173,250 / 115,500
- - -----------
(1) No options were exercised by the named individuals
during 1993.
(2) Reflects market value of underlying shares of the
Corporation's Common Stock on December 31, 1993, minus the
exercise price.
</TABLE>
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly percentage
change in the cumulative total stockholder return on the
Corporation's Common Stock against the cumulative total return of
the published Standard and Poor's 500 Stock Index and the Dow
Jones Marine Transportation Index for the five years ended
December 31, 1993.
S&P 500 Dow Jones Marine
PERIOD OSG Stock Transportation Index
------ --- Index --------------------
---------
1988 100 100 100
1989 120 132 127
1990 89 128 82
1991 110 166 115
1992 101 179 101
1993 142 197 129
- - -------------------
* Assumes that the value of the investment in the Corporation's
Common Stock and each index was $100 on December 31, 1988 and
that all dividends were reinvested. In accordance with rules of
the Securities and Exchange Commission ("SEC"), the
Corporation's Stockholder Return Performance Presentation does
not constitute "soliciting material" and is not incorporated by
reference in any filings with the SEC made pursuant to the
Securities Act of 1933 (the "1933 Act") or the Securities
Exchange Act of 1934 (the "1934 Act").
PENSION PLAN
The Corporation contributes to a pension plan which provides its
employees with annual retirement benefits based upon age,
credited service and average compensation (comprised of salaries,
bonuses and incentive compensation) for the highest five
successive years of the last ten years prior to retirement. The
plan is non-contributory by the employee, and the Corporation's
contributions to the plan are determined on an actuarial basis
without individual allocation. The Corporation is one of several
employers contributing to the plan and pays its proportionate
share of the annual cost. The plan is maintained by Maritime
Overseas Corporation, which acts as agent in respect of the
operation of the Corporation's bulk cargo vessels as described
below.
The following table sets forth the estimated annual pensions
payable under the pension plan (subject to reduction on an
actuarial basis where survivorship benefits are provided), upon
normal retirement, to employees at various compensation levels and
in representative years-of-service classifications, calculated
before application of the Social Security offset provided for in
the plan:
<TABLE>
Years of Credited Service
<CAPTION>
Average
Compen- 10 15 20 25 30 35 40
sation years years years years years years years
<S> <C> <C> <C> <C> <C> <C> <C>
$100,000 15,000 22,500 30,000 37,500 45,000 52,500 60,000
200,000 30,000 45,000 60,000 75,000 90,000 105,000 120,000
300,000 45,000 67,500 90,000 112,500 135,000 157,500 180,000
400,000 60,000 90,000 120,000 150,000 180,000 210,000 240,000
500,000 75,000 112,500 150,000 187,500 225,000 262,500 300,000
600,000 90,000 135,000 180,000 225,000 270,000 315,000 360,000
700,000 105,000 157,500 210,000 262,500 315,000 367,500 420,000
800,000 120,000 180,000 240,000 300,000 360,000 420,000 480,000
900,000 135,000 202,500 270,000 337,500 405,000 472,500 540,000
1,000,000 150,000 225,000 300,000 375,000 450,000 525,000 600,000
- - --------------
The annual pension payable to any employee under the pension
plan may not exceed the limitations imposed for qualified plans
under Federal law. However, separate supplemental arrangements
have been made to provide Messrs. Hyman and Michael Recanati with
the additional benefits that would have been payable to them
under the pension plan in the absence of such limitations.
</TABLE>
The respective number of years of credited service under the
pension plan of the Corporation's executive officers named in the
Summary Compensation Table on page 5 are as follows: Morton P.
Hyman-32 years; Michael A. Recanati-16 years; Robert N. Cowen-14
years; and Gabriel Kahana-10 years.
COMPENSATION OF DIRECTORS
The independent non-employee directors of the Corporation
receive a director's fee of $15,000 per year, payable quarterly,
and a fee of $1,000 for each meeting of the Board of Directors
they attend.
EXECUTIVE COMPENSATION
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
AND THE STOCK OPTION COMMITTEE
In accordance with rules of the SEC, the Report on Executive
Compensation does not constitute "soliciting material" and is not
incorporated by reference in any filings with the SEC made
pursuant to the 1933 Act or the 1934 Act.
The Executive Compensation Committee (the "Committee") of the
Board of Directors reviews and determines compensation for
members of senior management on an annual basis. It is composed
of two non-officer directors of the Corporation: Raphael
Recanati and Michel Fribourg. The Committee's compensation
policies are designed to promote the following objectives:
- - - to attract and motivate talented executives, and to
encourage their long term tenure with the Corporation
- - - to compensate executives based upon the value of their
individual contributions in achieving corporate goals and
objectives
- - - to motivate executives to maximize shareholder values
The Committee seeks to set salaries for its executives at levels
that enable the Corporation to attract and retain talented
personnel. The Committee does not deem it appropriate to base
annual salary adjustments solely upon year-to-year comparisons of
financial performance, particularly since the Corporation's
results over a short term period are significantly influenced by
factors beyond the Corporation's control, reflecting primarily
the dynamics of world bulk shipping markets. These markets are
extremely competitive and highly volatile, influenced by the
worldwide supply and demand for tonnage and general world
economic conditions. Traditionally, the Corporation does not
make significant annual adjustments to compensation levels based
upon short term financial performance, when such performance is
deemed primarily attributable to dramatic short term fluctuations
in charter markets, whether favorable or unfavorable.
The nature of the Corporation's business requires long range
planning that may entail advance commitments for the construction
of costly vessels during periods of unfavorable conditions in
current charter markets. Such commitments are made on the basis
of an analysis of long term trends in demand, utilization and
market forces that suggest future improvement in rates. Under
these circumstances, the Committee believes that short term
financial performance is only one of many guides in determining
executive compensation. Success in meeting corporate goals and
objectives also is considered to be an appropriate measure of
executive performance. Such goals and objectives include success
in meeting specific customer requirements, in reducing financing
and operating costs for the fleet, in anticipating short term
market movements and in improving the quality of customer
service. The Committee considers that these goals and objectives
have been met in 1993.
In setting executive compensation, the Committee also considers
the Corporation's performance in the context of overall industry
conditions and its standing in the industry. The Committee does
not give particular weight to or quantify any one or more
performance factors, but in setting 1993 salaries, the Committee
considered the fact that the Corporation achieved a modest profit
in difficult market conditions, succeeded in raising long term
capital upon attractive terms, placed additional newbuilding
orders in furtherance of the Corporation's ongoing fleet
modernization program, succeeded in maintaining the Corporation's
recognition for high quality within the bulk shipping industry
and initiated a major diversification into the cruise business
through the consummation of a joint venture with an established
cruise ship operator. The Committee takes into consideration an
executive's particular contributions to the Corporation. Length
of service is another important factor taken into account. The
Corporation has not yet formulated a policy with respect to
qualifying compensation paid to executive officers for
deductibility under Section 162 (m) of the Internal Revenue Code
of 1986, as amended (the provision was enacted as part of "OBRA
'93" for compensation exceeding $1 million in a taxable year paid
to an executive officer, effective January 1, 1994).
The Committee believes that the interests of shareholders are
best served by granting stock options to key employees and
thereby giving them the opportunity to participate in
appreciation in the Corporation's stock over an extended period.
In this way, senior management can directly share in the benefits
of maximizing shareholder values. The Corporation's stockholder-
approved amended 1989 Stock Option Plan is administered by the
Stock Option Committee of the Board of Directors, which is
composed of three non-officer directors of the Corporation:
Raphael Recanati, Ran Hettena and Joel I. Picket. The Stock
Option Committee determines the persons to whom stock options
will be granted under the Plan and allocates the amounts to be
granted to such persons. Under the Plan, senior management in
1990 were granted options for 570,000 shares of Common Stock, in
the aggregate, to vest over five years and be exercisable up to
ten years from the date of grant. The Committee and the Stock
Option Committee believe that over such an extended period, stock
performance will to a meaningful extent reflect executive
performance, and that such arrangements further reinforce
management goals and incentives to achieve shareholder
objectives. Accordingly, although compensation paid by the
Corporation for 1993 consisted solely of salary and the
Corporation did not grant options in 1993, the Corporation may
consider authorizing and granting additional stock options in
order to provide its executive officers with satisfactory total
compensation packages and reward them for their contributions to
the Corporation's long-term share performance. The Committee
believes that the total compensation package received by each of
the executive officers last year, taking into consideration
outstanding option grants, was appropriate. In considering
future option grants, the number of options previously granted
will be taken into consideration.
While taking the foregoing factors into account, the Committee's
compensation determinations for the Corporation's relatively
small number of executive officers are to a large extent
subjective and not arrived at by application of any specific
formula.
Mr. Morton P. Hyman has served as a director and officer of the
Corporation since 1969, and as its President and Chief Executive
Officer since 1971. His compensation reflects his many
contributions as a key member of management since the Corporation
was founded. Such compensation is not based primarily upon the
Corporation's short term financial performance nor is it based
upon any formula. To a large extent Mr. Hyman's compensation
reflects an assessment of his performance based upon the
subjective judgment of the Committee. In light of his
contribution to the growth and success of the Corporation, and
his service as its President for 23 years, the Committee believes
his compensation is appropriate and reasonable.
In early 1993, Mr. Michael A. Recanati, who had served as Senior
Vice President and Treasurer of the Corporation, was appointed to
the position of Executive Vice President and Chief Operating
Officer of the Corporation. His compensation for 1993 reflects
Mr. Recanati's increased duties and responsibilities, and the
fact that he has been devoting most of his time directly to the
affairs of the Corporation. In early 1993, Mr. Gabriel Kahana
was appointed to the position of Senior Vice President, Treasurer
and Chief Financial Officer of the Corporation.
Submitted by the Executive Compensation Committee and Stock
Option Committee of the Board of Directors:
Executive Compensation Committee Stock Option Committee
- - -------------------------------- ------------------
Raphael Recanati Raphael Recanati
Michel Fribourg Ran Hettena
Joel I. Picket
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Raphael Recanati and Michel Fribourg served on the
Executive Compensation Committee of the Board of Directors during
1993. Mr. Fribourg is the Chairman of the Board and principal
stockholder of Continental Grain Company (and Mr. Dean, a
director of the Corporation, is an officer of that corporation).
Subsidiaries of the Corporation received revenues of
approximately $611,000 during 1993 and approximately $541,000
during the first three months of 1994 from charters of vessels to
subsidiaries of Continental Grain Company. During 1992, two
partnerships which each owned a vessel, in which subsidiaries of
the Corporation and subsidiaries of Continental Grain Company
owned equal interests, were merged. Thereafter all of the assets
owned by the surviving partnership were distributed to the
partners on an equal basis; in redemption of the partners'
interests, one vessel was sold by the partnership and the
proceeds of sale distributed to subsidiaries of Continental Grain
Company and the other vessel was distributed to a subsidiary of
the Corporation. A subsidiary of the Corporation, together with
Continental Grain Company and an unrelated third party, are
partners in an investment partnership in which the Corporation's
subsidiary has an investment of approximately $789,000.
Messrs. Raphael Recanati, Ran Hettena and Joel I. Picket served
on the Stock Option Committee of the Board of Directors during
1993. Mr. Hettena is President, a director and sole stockholder
of Maritime Overseas Corporation, a New York Corporation ("MOC").
MOC or a subsidiary of MOC, under various agreements with the
Corporation and its majority-owned subsidiaries, acts as agent in
respect of the operation of bulk cargo vessels owned and to be
owned by these subsidiaries and provides certain general and
administrative services required by the Corporation and its
subsidiaries. The Corporation may terminate the agreements at
the end of any year on twelve months' prior notice; MOC may not
terminate the agreements prior to December 31, 1998. Under
agreements between MOC and certain companies in which the
Corporation owns a 50% interest, MOC acts as agent in respect of
the operation of bulk cargo vessels owned by such 50%-owned
companies. Under various agreements, MOC also serves as
exclusive chartering broker for the bulk fleet owned by the
Corporation's majority-owned subsidiaries and 50%-owned companies
and as exclusive broker in connection with sales, purchases or
construction of bulk cargo vessels, and is entitled to receive
commissions therefor either from the owner or from the seller or
builder. Under the various agreements, MOC's total compensation
for any year is limited to the extent its consolidated net income
from shipping operations would exceed specified amounts ($758,170
for 1993).
The aggregate compensation payable to MOC (including its
subsidiaries) under all these agreements for 1993 (excluding
brokerage) was $32,093,047, of which $1,163,520 represented
compensation paid by 50%-owned companies. Brokerage commissions
payable to MOC under all these agreements for 1993 aggregated
$7,684,127, of which $945,000 was paid by shipyards and $74,613
was paid by 50%-owned companies. MOC retains as advances under
the agreements an amount equivalent to a non-current asset (net
of related taxes) recorded by MOC as a result of the application
of a statement of accounting principles adopted by the Financial
Accounting Standards Board; the advances, which approximated
$1,244,000 as of December 31, 1993, are repayable as the asset is
realized or when the agreements terminate, whichever is earlier.
The Corporation advanced to MOC $1,130,000 in 1990 ($678,000 of
which is presently outstanding) to fund certain pension
obligations that were paid by MOC but which, under the agreements
between MOC and the Corporation, are borne by the Corporation
over periods determined in accordance with generally accepted
accounting principles by actuarial calculation. The advance
bears interest at the rate of 10% per annum and is repayable in
ten equal annual installments (which commenced in 1991) or when
the agreements terminate, whichever is earlier. Based on an
audited report furnished by MOC to the Corporation, the
consolidated net income of MOC from shipping operations for the
year ended December 31, 1993 was limited to the agreed maximum
amount described in the preceding paragraph.
Four of the nominees for election as directors of the
Corporation, Messrs. Hettena, Merkin, Cowen and Michael Recanati,
constitute the Board of Directors of MOC; Messrs. Hettena, Blake
and Michael Recanati are senior officers of MOC. All the
outstanding shares of MOC are owned by Mr. Hettena. Mr. Michael
Recanati is a son of Mr. Raphael Recanati and a nephew of Mr.
Hettena.
The MOC 1990 Stock Option Plan, as amended, provides for the
grant of options to employees, officers and directors of MOC to
purchase up to 784,435 shares of Common Stock of the Corporation
(including an increase of 200,000 shares in 1993). In order to
facilitate the MOC 1990 Stock Option Plan, as amended, the
Corporation under an amended agreement with MOC has agreed to
make a total of up to 784,435 shares of the Corporation's Common
Stock available to MOC, as and when required by MOC to meet its
obligations under said Plan, at a price equal to (i) the option
price, or (ii) the market price on the date an option is granted,
or (iii) $14 per share, whichever shall be highest, for shares
purchased by MOC from the Corporation in respect of all option
grants. Through December 31, 1993, the Corporation has provided
an aggregate of 25,444 shares to MOC pursuant to the agreement.
Each of the business transactions referred to above under this
caption and under the "Other Transactions" caption below was
considered to be fair and reasonable to all the parties involved
at the time the transaction was entered into and was in the
opinion of management at least as favorable to the Corporation as
it would have been if made with a non-affiliated party.
OTHER TRANSACTIONS
Subsidiaries of the Corporation received revenues of
approximately $1,637,000 during 1993 from charters of a vessel to
a subsidiary of Archer-Daniels-Midland Company, a company named
as a beneficial owner of more than 5% of the outstanding shares
of the Corporation's Common Stock under "Information as to Stock
Ownership".
COMMITTEES AND MEETINGS
The Board of Directors has established various committees to
assist it in discharging its responsibilities, including an
Executive Compensation Committee and an Audit Committee. The
Executive Compensation Committee reviews and determines the
compensation of the Corporation's executives; it consists of
Messrs. Fribourg and Raphael Recanati and held one meeting during
1993. The Audit Committee recommends to the Board each year the
independent auditors to be selected by the Corporation, reviews
the planned scope and the results of each year's audit, reviews
any recommendations the auditors may make with respect to the
Corporation's internal controls and procedures and oversees the
responses made to any such recommendations; the Committee
consists of Messrs. Dean and Frost and met twice during 1993.
The Corporation does not have a nominating or similar committee.
The Corporation's Board of Directors held five meetings during
1993. Members of the Board are frequently consulted by
management throughout the year, and the Corporation does not
consider percentage attendance information in itself to be a
meaningful indication of the quality or importance of a
director's contribution to the Board. Each director attended at
least 75% of the total number of meetings of the Board and
committees of which he was a member.
INFORMATION AS TO STOCK OWNERSHIP
Set forth below are the names and addresses of those persons,
other than nominees for directors and entities they control (see
"Election of Directors"), that are known by the Corporation to
have been "beneficial owners" (as defined in regulations of the
SEC) of more than 5% of the outstanding shares of the
Corporation's Common Stock, as reported to the Corporation.
OSG Holdings, 511 Fifth Avenue, New York, New York, a
partnership, on April 18, 1994 owned 2,986,416 shares (8.2% of
the outstanding Common Stock). One of the nominees for director
of the Corporation, by reason of his interest and position in OSG
Holdings, may be deemed to be the "beneficial owner" of the
shares owned by OSG Holdings, as disclosed in the table of
nominees.
The other principal partners in OSG Holdings on April 18, 1994
were Hermann Merkin, 415 Madison Avenue, New York, New York, and
EST Associates L.P., 275 Madison Avenue, Suite 902, New York, New
York, a limited partnership. These partners may each be deemed
to share the power to vote and to direct disposition of the
2,986,416 shares owned by OSG Holdings and may therefore be
deemed to be the beneficial owners of the following amounts and
percentages of the outstanding Common Stock: Hermann Merkin,
3,208,337 shares (including 221,921 shares owned directly), or
8.9%; and EST Associates L.P., 4,224,817 shares (including
1,238,401 shares owned directly), or 11.7%. Vivian Ostrovsky, 4
Avenue de Montespan, Paris, France, is the general partner in EST
Associates L.P. and may therefore be deemed the beneficial owner
of all the shares owned by EST Associates L.P. and OSG Holdings.
Except for shares referred to in this paragraph as being owned
directly, each of the persons named shares the power to vote and
dispose of all the shares of which such person is considered the
beneficial owner.
To the best of the Corporation's knowledge, based on reports
filed with the SEC, the only other beneficial owners of more than
5% of the Corporation's Common Stock are: (a) Archer-Daniels-
Midland Company, 4666 Faries Parkway, Decatur, Illinois, which as
of March 31, 1994 owned beneficially an aggregate of 4,450,200
shares (12.3%), which it reported were acquired for investment
purposes, and that it has the sole power to vote and to dispose
of such shares; and (b) Norwest Corporation, Norwest Center,
Sixth and Marquette, Minneapolis, Minnesota, on behalf of itself
and its subsidiaries, Norwest Colorado, Inc., 1700 Lincoln
Street, Denver, Colorado and Norwest Bank Colorado, National
Association, 1700 Broadway, Denver, Colorado, which as of
December 31, 1993 owned beneficially an aggregate of 2,427,275
shares (6.7%), including 2,149,115 shares as to which it has sole
voting power, and 2,403,575 shares as to which it has sole
dispositive power. According to the SEC filings referred to in
this paragraph, the shares mentioned above were not acquired for
the purpose of or having the effect of changing or influencing
control of the Corporation nor in connection with or as a
participant in any transaction having such purpose or effect.
SELECTION OF AUDITORS
On recommendation of the Audit Committee, the Board of Directors
has appointed Ernst & Young as independent auditors for the
Corporation and its subsidiaries for the year 1994 subject to
the approval of the stockholders at the annual meeting. If the
appointment is not approved by the stockholders, the selection of
independent auditors will be reconsidered by the Board of
Directors.
Ernst & Young is a well known and well qualified firm of public
accountants which (including its predecessors) has served as
auditors of the Corporation since the Corporation was organized
in 1969. Representatives of Ernst & Young will attend the annual
meeting and be afforded an opportunity to make a statement, as
well as be available to respond to appropriate questions
submitted by stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE
APPOINTMENT OF ERNST & YOUNG.
PROPOSALS FOR 1995 MEETING
Any proposals of stockholders that are intended to be presented
at the Corporation's 1995 Annual Meeting of Stockholders must be
received at the Corporation's principal executive offices no
later than December 31, 1994, and must comply with all other
applicable legal requirements, in order to be included in the
Corporation's proxy statement and form of proxy for that meeting.
GENERAL INFORMATION
The Board of Directors is not aware of any matters to be
presented at the meeting other than those specified above. If
any other matter should be presented, the holders of the
accompanying proxy will vote the shares represented by the proxy
on such matter in accordance with their best judgment.
All shares represented by the accompanying proxy, if the proxy
is duly executed and received by the Corporation at or prior to
the meeting, will be voted at the meeting in accordance with the
instructions provided therein. If no such instructions are
provided, the proxy will be voted for the election of directors
and for the appointment of Ernst & Young as auditors. Under
Delaware law and the Corporation's Certificate of Incorporation
and By-Laws, if a quorum is present, directors are elected by a
plurality of the votes cast by the holders of the shares present
in person or represented by proxy at the meeting and entitled to
vote on the election of directors. A majority of the outstanding
shares entitled to vote, present in person or represented by
proxy, constitutes a quorum. Shares represented by proxies or
ballots withholding votes from one or more directors will not be
counted in the election of that director but will be counted for
purposes of determining a quorum.
The cost of soliciting proxies for the meeting will be borne by
the Corporation. The Corporation will also reimburse brokers and
others who are only record holders of the Corporation's shares
for their reasonable expenses incurred in obtaining voting
instructions from beneficial owners of such shares. Directors
and officers of the Corporation may solicit proxies personally or
by telephone or telegraph but will not receive additional
compensation for doing so.
The Corporation's Annual Report to Stockholders for the fiscal
year ended December 31, 1993 has been mailed to stockholders.
The Annual Report does not form part of this Proxy Statement.
By order of the Board of Directors,
ROBERT N. COWEN
Senior Vice President & Secretary
New York, N.Y.
April 29, 1994
<PAGE>
OVERSEAS SHIPHOLDING GROUP, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, June 9, 1994
The undersigned hereby appoints MORTON P. HYMAN and RAN HETTENA,
and either of them, proxies, with full power of substitution, to
vote all shares of stock of OVERSEAS SHIPHOLDING GROUP, INC.
which the undersigned is entitled to vote, at the Annual Meeting
of Stockholders of the Corporation to be held at J.P. Morgan
Investment Management Inc., 522 Fifth Avenue (corner West 44th
Street), New York, N.Y., Second Floor, on June 9, 1994, at 2:30
o'clock P.M., notice of which meeting and the related Proxy
Statement have been received by the undersigned, and at any
adjournments thereof.
The undersigned hereby ratifies and confirms all that said
proxies, or either of them, or their substitutes, may lawfully do
in the premises and hereby revokes all proxies heretofore given
by the undersigned to vote at said meeting or any adjournments
thereof. If only one of said proxies, or his substitute, shall
be present and vote at said meeting or any adjournments thereof,
then that one so present and voting shall have and may exercise
all the powers hereby granted.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE CORPORATION. THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED IN THE MANNER INDICATED BY THE STOCKHOLDER. IN THE ABSENCE
OF SUCH INDICATION, SUCH SHARES WILL BE VOTED FOR THE ELECTION OF
DIRECTORS, FOR THE APPOINTMENT OF ERNST & YOUNG AS INDEPENDENT
AUDITORS, AND IN THE DISCRETION OF SAID PROXIES WITH RESPECT TO
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND
ANY ADJOURNMENTS THEREOF.
(Continued, and To Be Signed and Dated on Reverse Side)
<PAGE>
(1) ELECTION OF DIRECTORS: NOMINEES-Raphael Recanati, Morton P.
Hyman, Michael A. Recanati, Robert
For all Nominees N. Cowen, George C. Blake, Thomas H.
(except as Withhold Dean, Michel Fribourg, William L.
withheld in Authority Frost, Ran Hettena, Stanley
the space to Vote for Komaroff, Solomon N. Merkin and Joel
provided) all Nominees I. Picket. (To withhold authority to
vote for any individual Nominee,
( ) ( ) print that Nominee's name on the
following line:)
---------------------------------
(2) APPROVAL OF THE APPOINTMENT
OF ERNST & YOUNG AS INDEPENDENT
AUDITORS FOR THE YEAR 1994:
FOR AGAINST ABSTAIN
( ) ( ) ( )
Please sign exactly as name (or
names)appears at the left. For
joint accounts each owner should
sign. Executors, administrators,
trustees, etc. should give full
title.
DATE: ..............., 1994
--------------------------------
--------------------------------
Signature or Signatures
.
.
.
.......
PLEASE VOTE, SIGN, DATE AND PROMPTLY RETURN THIS CARD
