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
( ) Confidential Only (as permitted by Rule 14a-6(e)(2))
( ) 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:
-------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
-------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated
and state how it was determined.
4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------
5) Total fee paid:
-------------------------------------------------------------
( ) Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
-------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------
3) Filing Party:
-------------------------------------------------------------
4) Date Filed:
-------------------------------------------------------------
<PAGE>
OVERSEAS SHIPHOLDING GROUP, INC.
1114 AVENUE OF THE AMERICAS, NEW YORK, N.Y. 10036
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 6, 1995
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 Tuesday, June 6, 1995, 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 LLP as independent auditors for the
year 1995; 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 17,
1995 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 28, 1995
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
6, 1995. 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
17, 1995 will be entitled to vote at the annual meeting. The
Corporation has one class of voting securities, its Common Stock,
of which 36,216,833 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 28, 1995.
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 17, 1995, 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
DIRECTOR BENEFICIALLY BENEFICIALLY
NAME AND AGE PRINCIPAL OCCUPATION SINCE OWNED (A) OWNED
- ------------ -------------------- -------- ------------- ------------
<S> <C> <C> <C> <C>
Raphael Recanati*, 71.... President, Finmar Equities Co., 1969 6,647,926 (b)(h) 18.4%
shipping, finance and banking.
Morton P. Hyman*, 59..... President of the Corporation. 1969 230,000 (c) 0.6%
Michael A. Recanati*,37.. Executive Vice President and 1987 121,065 (d)(h) 0.3%
Treasurer of the Corporation.
Robert N. Cowen, 46...... Senior Vice President, Secretary 1993 36,500 0.1%
and General Counsel of the
Corporation.
George C. Blake*, 63..... Executive Vice President, 1988 65,400 0.2%
Maritime Overseas Corporation,
ship agents and brokers.
Thomas H. Dean, 66....... Senior Vice President-Corporate 1976 -- --
Development and Planning,
Continental Grain Company,
integrated food company.
Michel Fribourg, 81...... Director and Chairman Emeritus 1969 2,823,241(e) 7.8%
of the Board, Continental Grain
Company.
William L. Frost, 68..... Attorney and President, Lucius 1989 4,000(f) --
N. Littauer Foundation.
Ran Hettena*, 71......... President, Maritime Overseas 1969 23,241(g)(h) 0.1%
Corporation.
Stanley Komaroff, 60..... Chairman, law firm of Proskauer 1993 200 --
Rose Goetz & Mendelsohn, the
Corporation's counsel.
Solomon N. Merkin, 38.... Vice President, Leib Merkin, 1989 (i) --
Inc., private investment
company.
Joel I. Picket, 56....... President and Chairman of the 1989 200 --
Board, Gotham Organization Inc.,
real estate, construction and
development.
All directors and executive officers as a group.......... 9,980,773(j) 27.2%
- ----------------
<FN>
* 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 (160,000 shares), M. Recanati (120,000
shares), Cowen (36,000 shares) and Blake (64,000 shares),
and all directors and executive officers as a group (428,000
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 1.05% partner in OSG Holdings.
(j) Of the 9,980,773 shares, persons who are directors or
executive officers have sole power to vote and direct
disposition of 4,310,411 shares (11.7% 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 Senior Vice President of the Corporation since February
1993; he also serves as executive vice president and a director
of Overseas Discount Corporation, a private company 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 has appealed. 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, 1994, 1993 and 1992 by the Chief Executive Officer, and the
two other executive officers and a former executive officer of
the Corporation serving during 1994 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.......... 1994 $915,000(1) $ 11,441(2)
President (CEO) 1993 915,000(1) 13,015
1992 865,000 11,953
Michael A. Recanati...... 1994 765,000(1) 4,826(2)
Executive Vice President 1993 735,000(1) 917
and Treasurer (COO and 1992 397,500 0
CFO)
Robert N. Cowen.......... 1994 200,000 1,145(3)
Senior Vice President, 1993 175,000 1,145
Secretary and General 1992 175,000 0
Counsel
Gabriel Kahana........... 1994 174,519(4) 4,914(2)
former Senior Vice 1993 425,000(1) 0
President and Treasurer 1992 -- --
<FN>
- ------------
(1) Includes a director's fee of $50,000 paid by Celebrity
Cruise Lines Inc., the Corporation's cruise business joint
venture.
(2) For Messrs. Hyman, Recanati and Kahana, consists of matching
contributions by the Corporation under its Savings Plan in
the respective amounts of $2,310, $2,310 and $1,889, and the
cost of term life insurance in the respective amounts of
$9,131, $2,516 and $3,025.
(3) Cost of term life insurance.
(4) Compensation for the portion of the year through late June
1994 during which he was employed by the Corporation.
</TABLE>
<TABLE>
AGGREGATE OPTION EXERCISES IN 1994 AND YEAR-END OPTION VALUES (1)
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at December 31, 1994 December 31, 1994 (2)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- --------------------------- -------------------------
<S> <C> <C>
Morton P. Hyman...... 160,000 / 40,000 $ 1,440,000 / 360,000
Michael A. Recanati.. 120,000 / 30,000 1,080,000 / 270,000
Robert N. Cowen...... 24,000 / 6,000 216,000 / 54,000
<FN>
- --------------
(1) No options were exercised by the named individuals
during 1994.
(2) Reflects market value of underlying shares of the Corporation's
Common Stock on December 31, 1994, 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, 1994.
<TABLE>
STOCK PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
OSG, S&P 500 STOCK INDEX, DOW JONES MARINE TRANSPORTATION INDEX
<CAPTION>
S&P 500 DOW JONES MARINE
PERIOD OSG STOCK INDEX TRANSPORTATION INDEX
------ --- ------------------- --------------------
<C> <C> <C> <C>
1989 100 100 100
1990 74 97 64
1991 92 126 90
1992 84 136 79
1993 119 150 102
1994 119 152 93
<FN>
- ---------------
* Assumes that the value of the investment in the Corporation's
Common Stock and each index was $100 on December 31, 1989 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").
</TABLE>
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
------- ------ ----- ----- ----- ----- ----- -----
<C> <S> <S> <S> <S> <S> <S> <S>
$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
- ---------------
</TABLE>
The annual pension payable to any employee under the pension
plan may not exceed the limitations imposed for qualified plans
under Federal law. However, under a supplemental retirement plan
Messrs. Hyman, Michael Recanati and Cowen will be entitled to the
additional benefits that would have been payable to them under
the pension plan in the absence of such limitations. Payments
under the supplemental retirement plan will be accelerated upon a
"change of control" as defined therein.
The respective number of years of credited service under the
pension plan of the Corporation's present executive officers
named in the Summary Compensation Table on page 5 are as
follows: Morton P. Hyman-35 years; Michael A. Recanati-17 years;
and Robert N. Cowen-15 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. The Corporation does not make significant
annual adjustments to compensation levels based upon changes in
financial performance that in the judgment of the Committee
primarily reflect charter market conditions or other factors over
which the Corporation has no control, whether favorable or
unfavorable.
The nature of the Corporation's business requires long range
planning that may entail advance commitments for the construction
of 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 market movements
and in improving the quality of customer service. The Committee
considers that these goals and objectives have been met in 1994.
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 1994 salaries, the
Committee considered the fact that although the Corporation's
results in 1994 continued to reflect the weakness in world bulk
shipping markets, the Corporation nevertheless successfully
completed a public equity offering of 3,450,000 shares of Common
Stock, refinanced long-term debt 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 participated in decisions related to the
additional new cruise ships ordered for the Celebrity Cruise
Lines Inc. fleet, the Corporation's joint venture in the cruise
industry. 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). None of the executive
officers received compensation in excess of $1 million for 1994.
The Committee believes that the interests of shareholders are
best served by granting stock options to executive officers 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 1994 consisted solely of salary and the
Corporation did not grant options in 1994, 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 24 years, the Committee believes
his compensation is appropriate and reasonable.
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
1994. Mr. Fribourg is a Director and Chairman Emeritus of the
Board and principal stockholder of Continental Grain Company (Mr.
Dean, a director of the Corporation, is an officer of that
corporation). Subsidiaries of the Corporation received revenues
of approximately $918,385 during 1994 from charters of vessels to
subsidiaries of Continental Grain Company. 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
1994. 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 certain 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 ($833,987 for 1994).
The aggregate compensation payable to MOC (including its
subsidiaries) under all these agreements for 1994 (excluding
brokerage) was $32,602,547, of which $1,163,520 represented
compensation paid by 50%-owned companies. Brokerage commissions
payable to MOC under all these agreements for 1994 aggregated
$7,035,543, of which $1,397,320 was paid by shipyards and $40,644
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
$1,777,000 as of December 31, 1994, 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 ($565,000 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. The consolidated
net income of MOC from shipping operations for the year ended
December 31, 1994 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.
In order to facilitate said Plan, the Corporation under an
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, 1994, the Corporation has provided an aggregate of 80,371
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
A subsidiary of the Corporation received revenues of
approximately $2,708,564 during 1994 and approximately $1,790,350
during the first three months of 1995 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
1994. 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 1994.
The Corporation does not have a nominating or similar committee.
The Corporation's Board of Directors held five meetings
during 1994. 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 17, 1995 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 17,
1995 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,
3,189,436 shares (including 203,020 shares owned directly), or
8.8%; 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, 1995 owned beneficially an aggregate of 4,507,200
shares (12.4%), 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, and its
subsidiaries, Norwest Colorado, Inc. and Norwest Bank Colorado,
National Association, both at 1740 Broadway, Denver, Colorado,
which as of December 31, 1994 owned beneficially an aggregate of
2,150,190 shares (5.9%), including 2,010,760 shares as to which
they have sole voting power, and 2,137,950 shares as to which
they have 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 LLP as independent auditors
for the Corporation and its subsidiaries for the year 1995
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 LLP 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 LLP 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 LLP.
PROPOSALS FOR 1996 MEETING
Any proposals of stockholders that are intended to be
presented at the Corporation's 1996 Annual Meeting of
Stockholders must be received at the Corporation's principal
executive offices no later than December 31, 1995, 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 LLP 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, 1994 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 28, 1995
<PAGE>
OVERSEAS SHIPHOLDING GROUP, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, June 6, 1995
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 6, 1995, 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 LLP 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,
For all Nominees Robert N. Cowen, George C.
(except as Withhold Blake, Thomas H. Dean, Michel
withheld in Authority Fribourg, William L. Frost, Ran
the space to Vote for Hettena, Stanley Komaroff,
provided) all Nominees Solomon N. Merkin and Joel 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 LLP as
independent auditors for
the year 1995:
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: ......................., 1995
-----------------------------------
-----------------------------------
Signature or Signatures
.
.
.
.........
PLEASE VOTE, SIGN, DATE AND PROMPTLY RETURN THIS CARD
