UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
INTERNATIONAL SHIPHOLDING CORPORATION
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
INTERNATIONAL SHIPHOLDING CORPORATION
17TH FLOOR
POYDRAS CENTER
650 POYDRAS STREET
NEW ORLEANS, LOUISIANA 70130
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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TO COMMON STOCKHOLDERS OF INTERNATIONAL SHIPHOLDING CORPORATION:
The annual meeting of stockholders of International Shipholding
Corporation will be held in the Executive Board Room, 17th Floor, Poydras
Center, 650 Poydras Street, New Orleans, Louisiana, on Wednesday, April 27,
2005, at 2:00 p.m., New Orleans time, for the following purposes:
(i) to elect a board of nine directors to serve until the next annual meeting
of stockholders and until their successors are elected and qualified;
(ii) to ratify the appointment of Ernst & Young LLP, certified public
accountants, as independent auditors for the Corporation for the fiscal
year ending December 31, 2005; and
(iii)to transact such other business as may properly come before the
meeting or any adjournment thereof.
Only common stockholders of record at the close of business on February
28, 2005, are entitled to notice of and to vote at the annual meeting.
All stockholders are cordially invited to attend the meeting in person.
However, if you are unable to attend in person and wish to have your stock
voted, PLEASE FILL IN, SIGN, AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. Your proxy may be revoked by
appropriate notice to the Secretary of International Shipholding Corporation at
any time prior to the voting thereof.
BY ORDER OF THE BOARD OF DIRECTORS
R. CHRISTIAN JOHNSEN
Secretary
New Orleans, Louisiana
March 14, 2005
INTERNATIONAL SHIPHOLDING CORPORATION
17TH FLOOR
POYDRAS CENTER
650 POYDRAS STREET
NEW ORLEANS, LOUISIANA 70130
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PROXY STATEMENT
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This Proxy Statement is furnished to stockholders of International
Shipholding Corporation (the "Corporation") in connection with the solicitation
on behalf of the Board of Directors (the "Board") of proxies for use at the
annual meeting of stockholders of the Corporation to be held on Wednesday, April
27, 2005, at 2:00 p.m., New Orleans time, in the Executive Board Room, 17th
Floor, Poydras Center, 650 Poydras Street, New Orleans, Louisiana. The
approximate date of mailing of this Proxy Statement and the enclosed form of
proxy is March 14, 2005.
Only holders of record of the Corporation's Common Stock at the close of
business on February 28, 2005, are entitled to notice of and to vote at the
meeting. On that date, the Corporation had outstanding 6,082,887 shares of
Common Stock, each of which is entitled to one vote.
The enclosed proxy may be revoked by the stockholder at any time prior to
the exercise thereof by filing with the Secretary of the Corporation a written
revocation or duly executed proxy bearing a later date. The proxy will be deemed
revoked if the stockholder is present at the annual meeting and elects to vote
in person.
The cost of soliciting proxies in the enclosed form will be borne by the
Corporation. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone, telegraph, facsimile, or e-mail; and banks,
brokerage houses and other institutions, nominees, and fiduciaries will be
requested to forward the soliciting material to their principals and to obtain
authorization for the execution of proxies. The Corporation will, upon request,
reimburse such parties for their expenses incurred in connection therewith.
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PRINCIPAL STOCKHOLDERS
The following persons, in addition to three directors whose ownership
information is set forth under "Election of Directors," were known by the
Corporation to own beneficially more than five percent of its Common Stock (the
only outstanding voting security of the Corporation) as of the date noted below.
The information set forth below has been determined in accordance with Rule
13d-3 under the Securities Exchange Act of 1934 based upon information furnished
by the persons listed. Unless otherwise indicated, all shares shown as
beneficially owned are held with sole voting and investment power.
Amount and
Nature of Percent
Beneficial of
Name and Address Ownership Class
---------------- --------- ------
T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, Maryland 21202 914,462 (1) 15.03%
Franklin Resources, Inc.
One Franklin Parkway
San Mateo, California 94403 480,000 (2) 7.89%
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 316,324 (3) 5.20%
Donald Smith & Co., Inc.
152 West 57th Street
New York, New York 10019 307,300 (4) 5.05%
(1) Based on information contained in Schedule 13G as of December 31, 2004,
filed jointly with T. Rowe Price Small-Cap Value Fund, Inc. (which holds
sole voting power with respect to 912,562 shares, representing 15.00% of
the shares outstanding). T. Rowe Price Associates, Inc. (Price Associates)
serves as investment advisor with power to direct investments with respect
to all reported shares. For purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates is deemed to be a
beneficial owner of such securities; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such securities.
(2) Based on information contained in a joint filing on Schedule 13G as of
December 31, 2003, by Franklin Resources, Inc. (FRI), Charles B. Johnson,
Rupert H. Johnson, Jr., and Franklin Advisory Services, LLC. No changes in
their beneficial ownership were reported to the Corporation as of December
31, 2004. Franklin Advisory Services, LLC, has sole voting and dispositive
power with respect to all 480,000 shares. FRI is the parent holding
company of Franklin Advisory Services, LLC, an investment advisor. Charles
B. Johnson and Rupert H. Johnson, Jr., are principal shareholders of FRI.
FRI, Charles B. Johnson, Rupert H. Johnson, Jr. and Franklin Advisory
Services, LLC disclaim any economic interest or beneficial ownership in
any of the shares.
(3) Based on information contained in Schedule 13G as of December 31, 2004.
Dimensional Fund Advisors Inc. (Dimensional), a registered investment
advisor, furnishes investment advice to four registered investment
companies, and serves as investment manager to certain other investment
vehicles, including commingled group trusts and separate accounts.
Dimensional disclaims beneficial ownership of the securities.
(4) Based on information contained in Schedule 13G as of December 31, 2004.
Donald Smith & Co., Inc. is a registered investment advisor and has sole
voting power with respect to 306,597 shares and sole dispositve power with
respect to all 307,300 shares.
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ELECTION OF DIRECTORS
The by-laws of the Corporation authorize the Board of Directors to fix the
size of the Board. Pursuant thereto, the Board of Directors has fixed the number
of directors at nine and proxies cannot be voted for a greater number of
persons. Unless authority to vote for the election of directors is withheld, the
persons named in the enclosed proxy will vote for the election of the nine
nominees named below to serve until the next annual meeting and until their
successors are duly elected and qualified. In the unanticipated event that any
of the nominees cannot be a candidate at the annual meeting, the shares
represented by the proxies will be voted in favor of such replacement nominees
as may be designated by the Board.
The following table sets forth certain information as of February 25,
2005, concerning the nominees and all directors and executive officers as a
group, including their beneficial ownership of shares of the Common Stock of the
Corporation as determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934. All of the director nominees are now serving a one-year
term as a director. Unless otherwise indicated, the shares of the Corporation's
Common Stock shown as being beneficially owned are held with sole voting and
investment power.
The only executive officer named in the Summary Compensation Table who is
not also a nominee for director is Gary L. Ferguson, 64, Vice President and
Chief Financial Officer, who beneficially owns 75,012 shares (1.22% of the
class), including 75,000 shares he has the right to acquire upon the exercise of
currently exercisable stock options.
A majority of the director nominees are "independent directors" as defined
by the New York Stock Exchange ("NYSE") and the Securities and Exchange
Commission ("SEC"). The Board has determined that such independent directors,
who are Messrs. Grehan, Lane, Lupberger, O'Brien, and Trowbridge, have no
relationship with the Corporation that would prevent them from qualifying as
independent under the requirements of the NYSE and the SEC, including the
relationships described under "Board of Director and Compensation Committee
Interlocks, Insider Participation in Compensation Decisions and Certain
Transactions" later in this report involving transactions in which members of
Mr. Grehan's family have an interest.
THE BOARD RECOMMENDS A VOTE FOR EACH OF THE NOMINEES NAMED BELOW.
Name, Age, Principal Occupation, and Director Shares of Common Stock Percent
Directorship in Other Public Corporations Since Beneficially Owned of Class (1)
------------------------------------------------------ -------- ---------------------- ------------
Niels W. Johnsen, 82 (2)(3) .............................. 1979 919,107 (4) 15.11%
Formerly Chairman of the Board and
Chief Executive Officer of the Corporation
One Whitehall Street
New York, New York 10004
Erik F. Johnsen, 79 (3)(5) ................................ 1979 611,078 (6) 10.05%
Chairman of the Board and
Chief Executive Officer of the Corporation
650 Poydras Street, Suite 1700
New Orleans, Louisiana 70130
Niels M. Johnsen, 59 (3)(7) ............................... 1988 561,353 (8) 8.93%
President of the Corporation
One Whitehall Street
New York, New York 10004
Erik L. Johnsen, 47 (3)(9) ................................ 1994 313,640 (10) 4.99%
Executive Vice President of the Corporation
650 Poydras Street, Suite 1700
New Orleans, Louisiana 70130
(continued on page 4)
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Name, Age, Principal Occupation, and Director Shares of Common Stock Percent
Directorship in Other Public Corporations Since Beneficially Owned of Class (1)
------------------------------------------------------ -------- ---------------------- ------------
Harold S. Grehan, Jr., 77 (11) ............................ 1979 95,518 1.57%
Formerly Vice President of the Corporation
Edwin Lupberger, 68 (12) .................................. 1988 1,728 *
President, Nesher Investments, LLC; formerly
Chairman of the Board and Chief Executive
Officer of Entergy Corporation; trustee,
The Lupberger Foundation
Raymond V. O'Brien, Jr., 77 (13) .......................... 1979 1,000 *
Formerly Chairman of the Board and Chief
Executive Officer of Emigrant Savings Bank
Edward K. Trowbridge, 76 (14) ............................. 1994 625 (15) *
Formerly Chairman of the Board and Chief
Executive Officer of Atlantic Mutual Companies
H. Merritt Lane, III, 43 (16) ............................. 2004 0 *
President, Chief Executive Officer, and a director
of Canal Barge Company, Inc.
All executive officers and directors as a group (10 persons) 2,354,399 (17) 35.90%
(1) Shares subject to currently exercisable options are deemed to be
outstanding for purposes of computing the percentage of outstanding common
stock owned by the person holding such options and by all directors and
executive officers as a group but are not deemed to be outstanding for the
purpose of computing the individual ownership percentage of any other
person. Shares reported in this table include 475,000 shares subject to
currently exercisable options that are beneficially owned by Gary L.
Ferguson (75,000), Niels M. Johnsen (200,000), and Erik L. Johnsen
(200,000). An asterisk indicates ownership of less than 1% of the
Corporation's common stock.
(2) Niels W. Johnsen served as Chairman and Chief Executive Officer of the
Corporation from its formation in 1979 until his retirement in 2003. He
was one of the founders of Central Gulf Lines, Inc. ("Central Gulf"), one
of the Corporation's principal subsidiaries, in 1947. Mr. Johnsen has
served as a consultant for the Corporation since retiring as Chairman and
Chief Executive Officer.
(3) Niels W. Johnsen and Erik F. Johnsen are brothers. Niels M. Johnsen is the
son of Niels W. Johnsen. Erik L. Johnsen is the son of Erik F. Johnsen.
(4) Includes 224,622 shares owned by a corporation of which Niels W. Johnsen
is the controlling shareholder, President, and a director.
(5) Erik F. Johnsen became Chairman and Chief Executive Officer of the
Corporation during 2003. He previously served as President, Chief
Operating Officer, and a director of the Corporation since its formation
in 1979. He was one of the founders of Central Gulf in 1947.
(6) Includes 133,908 shares held by the Erik F. Johnsen Family Limited
Partnership of which Mr. Johnsen is General Partner and 43,812 shares
owned by the Erik F. Johnsen Family Foundation of which he claims no
beneficial ownership but maintains voting and disposition rights.
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(7) Niels M. Johnsen joined Central Gulf in 1970 and held various positions
before being named President of the Corporation in 2003. He also serves as
Chairman of each of the Corporation's principal subsidiaries, except
Waterman Steamship Corporation for which he serves as President. Mr.
Johnsen has been a trustee and director of Atlantic Mutual Companies since
2002.
(8) Includes 2,968 shares held in trust for Niels M. Johnsen's child of which
he is a trustee, 224,622 shares owned by a corporation of which Mr.
Johnsen is a Vice President and director, and 200,000 shares that Mr.
Johnsen has the right to acquire pursuant to currently exercisable stock
options.
(9) Erik L. Johnsen joined Central Gulf in 1979 and held various positions
before being named Vice President in 1987. In 1997, he was named Executive
Vice President of the Corporation and President of each of the
Corporation's principal subsidiaries, except Waterman Steamship
Corporation for which he serves as Executive Vice President.
(10) Includes 13,600 shares held in trust for Erik L. Johnsen's children of
which he is a trustee, and 200,000 shares that Mr. Johnsen has the right
to acquire pursuant to currently exercisable stock options.
(11) Mr. Grehan has served as a director of the Corporation since its formation
in 1979. He also served as Vice President of the Corporation from its
formation until his retirement at the end of 1997.
(12) Mr. Lupberger served as Chairman of the Board and Chief Executive Officer
of Entergy Corporation from 1985 to 1998. He is the Chairperson of the
Audit Committee of the Board.
(13) Mr. O'Brien served as Chairman of the Board and Chief Executive Officer of
the Emigrant Savings Bank from January of 1978 through December of 1992.
He is the Chairperson of the Compensation Committee of the Board.
(14) Mr. Trowbridge served as Chairman of the Board and Chief Executive Officer
of Atlantic Mutual Companies from July of 1988 through November of 1993.
He served as President and Chief Operating Officer of the Atlantic Mutual
Companies from 1985 until 1988. He is the Chairperson of the Nominating
and Governance Committee of the Board.
(15) Shares owned jointly with wife.
(16) Mr. Lane has served as President and Chief Executive Officer of Canal
Barge Company, Inc. since January of 1994 and as a director of that
company since October of 1988.
As of February 25, 2005, Niels W. Johnsen, Erik F. Johnsen, and their
spouses, children, and grandchildren (collectively, the "Johnsen Family")
beneficially owned an aggregate of 2,485,354 shares or 38.34% of the
Corporation's Common Stock (which includes currently exercisable options to
acquire 400,000 shares), and, to the extent they act together, they may be
deemed to be in control of the Corporation.
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OTHER INFORMATION ABOUT THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Corporation's Board has three standing committees, the Audit
Committee, the Compensation Committee, and the Nominating and Governance
Committee, that operate under written charters adopted by the Board. The Audit
and the Nominating and Governance Committees are each composed of the same five
directors, Messrs. Grehan, Lane, Lupberger, O'Brien, and Trowbridge, who are all
independent under the NYSE listing standards. The Compensation Committee is
composed of Messrs. Lane, Lupberger, O'Brien, and Trowbridge. Mr. Grehan was
appointed to the Audit and the Nominating and Governance Committeees in January
of 2004.
The Audit Committee assists the Board in monitoring the integrity of the
financial statements of the Corporation; the qualifications and independence of
the independent auditors; the performance of the Corporation's internal audit
function and internal audit personnel and independent auditors; and the
compliance by the Corporation with legal and regulatory requirements. The Audit
Committee has at least one audit committee financial expert, Mr. Lupberger, who
also serves as the chairperson of this committee. The Audit Committee met four
times during 2004.
The Compensation Committee, which is comprised solely of independent
directors, discharges the Board's responsibilities related to the CEO's
compensation, and beginning in 2005, makes recommendations to the Board with
respect to non-CEO executive compensation. The Compensation Committee also
administers the Corporation's Stock Incentive Plan and makes decisions on the
grant of stock options. Mr. O'Brien is the chairperson of this committee. The
Compensation Committee met once during 2004.
The Nominating and Governance Committee's primary responsibilities include
identifying individuals qualified to become Board and Board committee members;
selecting, or recommending that the Board select, the director nominees for the
next annual meeting of stockholders; and developing and recommending to the
Board a set of corporate governance principles applicable to the Corporation.
The Nominating and Governance Committee's policy is to identify individuals
qualified to fill vacant director positions or to stand for re-election based on
input from all Board members and the following general criteria: Generally,
directors should possess practical wisdom, sound judgment and a broad range of
experience that is relevant to the Corporation's business and is complementary
to the background of the other directors. They should be committed to devoting
the time necessary to carry out their responsibilities, serving on the Board for
a sufficient period of time to develop knowledge about the business, and
objectively representing the best interests of the Corporation's stockholders.
The Nominating and Governance Committee will evaluate director nominations from
stockholders using the same criteria used for all other nominees. Stockholders
may submit director nominations as described in "Stockholder Proposals and
Nominations" later in this report. Mr. Trowbridge is the chairperson of this
committee. The Nominating and Governance Committee met twice during 2004.
The Charters of the Audit Committee, Compensation Committee, and
Nominating and Governance Committee are available on the Investor Relations
section of the Corporation's website at www.intship.com. Since the Audit
Committee's Charter was amended in January of 2005, an amended copy is also
included as Exhibit A to this report.
The Board held four meetings during 2004. Each member of the Board
attended at least 75% of the aggregate number of meetings of the Board and
committees of which he was a member in 2004. Each non-officer director other
than Niels W. Johnsen received a fee of $16,000 per year, except that Mr. Lane's
fee was pro-rated beginning with his appointment March 1, 2004. This annual fee
was increased to $25,000 effective in 2005. Additionally, each non-officer
director other than Niels W. Johnsen receives $1,000 for each meeting of the
Board or a committee thereof attended. Directors are expected to attend the
annual meeting of the Corporation's stockholders. All directors attended the
2004 annual meeting.
Since his retirement as Chairman of the Board and Chief Executive Officer
in 2003, Niels W. Johnsen has provided consulting services in the areas of
vessel chartering and finance to the Corporation. The consulting agreement
between Mr. Johnsen and the Corporation was for a term of one year. Mr. Johnsen
was paid an annual fee of $100,000 during 2004 under this agreement. On January
1, 2005, this consulting agreement was renewed for an additional year and the
annual fee was increased to $125,000. Following the one-year term, unless
otherwise terminated, the consulting agreement is automatically extended on a
month-to-month basis. Mr. Johnsen was also paid $38,900 for additional services
provided to the Corporation during 2004. Additionally, when Mr. Johnsen
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served as CEO, the Corporation entered into an agreement with him whereby his
estate will be paid approximately $822,000 upon his death. The Corporation has
reserved amounts sufficient to fund this death benefit.
The non-management members of the Board met four times in executive
sessions during 2004. All of the non-management directors, including Messrs.
Grehan, Lane, Lupberger, O'Brien, and Trowbridge, attended all four sessions
except that Mr. Lane only attended the three sessions held after he was
appointed to the Board in March of 2004. During 2004, selection of the presiding
director at these meetings followed the established procedure by which the role
of presiding director rotates in order among the non-management directors.
Stockholders may communicate directly with the Board of Directors, or with
any individual director, by writing to the Chairman of the Board of Directors of
the Corporation at the address shown on the first page of this Proxy Statement.
The Chairman will forward the stockholder's communication to the appropriate
director or officer for response. Stockholders who wish to communicate directly
with the non-management members of the Board of Directors as a group should
direct their correspondence to: International Shipholding Corporation, Attn:
Non-Management Members of the Board of Directors (c/o Director of Internal
Audit), 650 Poydras Street Suite 1700, New Orleans, LA 70130. The Director of
Internal Audit will not share such communications or their subject matter with
the Corporation's management and will provide all such communications to the
non-management director who will preside at the next scheduled executive session
of non-management directors, prior to that meeting.
The Board has adopted a Code of Business Conduct and Ethics for Officers,
Directors and Employees, including the Corporation's principal executive
officer, principal financial officer, and principal accounting officer, and has
adopted Corporate Governance Guidelines. These are available on the Investor
Relations section of the Corporation's website at www.intship.com or can be
obtained in print without charge by writing to International Shipholding
Corporation, Attention: Gary L. Ferguson, Vice President, 1700 Poydras Center,
650 Poydras Street, New Orleans, LA 70130.
AUDIT COMMITTEE REPORT
To the Board of Directors of International Shipholding Corporation:
In connection with the Corporation's Annual Report on Form 10-K for the
year ended December 31, 2004, we have (i) reviewed and discussed with management
the audited financial statements as of and for the year ended December 31, 2004,
(ii) discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended, by the Auditing Standards Board of the American
Institute of Certified Public Accountants, and (iii) have received and reviewed
the written disclosures and the letter from the independent auditors required by
Independence Standard No. 1, Independence Discussions with Audit Committees, as
amended, by the Independence Standards Board, and have discussed with the
auditors the auditors' independence. Based on the reviews and discussions
referred to above, we recommend to the Board that the financial statements
referred to above be included in the Corporation's Annual Report on Form 10-K
for the year ended December 31, 2004.
Submitted by the Audit Committee members:
Harold S. Grehan, Jr., H. Merritt Lane, III, Edwin Lupberger, Raymond V.
O'Brien, Jr., and Edward K. Trowbridge
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AUDIT FEES
The following table sets forth the fees for professional services rendered
by Ernst & Young LLP, the Corporation's principal independent accountants, for
the fiscal years ended December 31, 2004 and 2003:
2004 2003
-------- --------
Audit Fees (1) $366,400 $257,000
Audit Related Fees (2) 35,815 18,000
Tax Fees (3) 53,400 51,700
-------- --------
Total Fees $455,615 $326,700
(1) Audit Fees include fees for the audit of the Corporation's consolidated
financial statements and review of interim consolidated financial
statements included in quarterly reports and services related to statutory
audits of certain of the Corporation's subsidiaries. During 2004, Audit
Fees also included fees for assistance with a registration statement filed
with the Securities and Exchange Commission ("SEC") related to the
Corporation's preferred stock offering and responses to comments received
from the SEC during a routine review.
(2) Audit Related Fees include fees for audits of the Corporation's employee
benefit plans and fees for assistance with determining the accounting
implications of the changes in tax regulations resulting from the American
Jobs Creation Act of 2004.
(3) Tax Fees include fees for tax compliance and consulting services.
The Audit Committee's policy is to pre-approve all audit and permissible
non-audit services provided by the independent auditor. These services may
include audit services, audit-related services, tax services, and other
services. Pre-approval is generally provided for up to one year and is detailed
as to the particular service or category of services. The Audit Committee may
also pre-approve particular services on a case-by-case basis. The Audit
Committee pre-approved 100% of the audit fees, audit-related fees, and tax fees
for the fiscal year ended December 31, 2004.
The Audit Committee determined that the provision of services discussed
above is compatible with maintaining the independence of Ernst & Young LLP from
the Corporation.
EXECUTIVE COMPENSATION
The Compensation Committee, which is made up solely of independent
directors, discharges the Board's responsibilities related to the CEO's
compensation, and beginning in 2005, will make recommendations to the Board with
respect to non-CEO executive compensation. The Compensation Committee also
administers the Corporation's Stock Incentive Plan and makes decisions on the
grant of stock options. Set forth below is a report submitted by the Board and
the Committee addressing the Corporation's executive compensation policies for
2004.
BOARD OF DIRECTORS AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Corporation's executive compensation structure for 2004 was comprised
of salaries and cash bonuses. The salary of Erik F. Johnsen, Chairman of the
Board and Chief Executive Officer, was set at $330,000 by the Board in 1990 and
has not been increased. During 2004, the Board delegated the responsibility for
determining the salaries of the executive officers other than himself to Erik F.
Johnsen. In January 2005, the Board amended the Compensation Committee's Charter
to provide that the Committee shall make recommendations to the Board regarding
non-CEO executive compensation.
The Board believes that a portion of executive compensation should be tied
to corporate performance. Accordingly, the Bonus Plan for 2004 (the "2004 Plan")
adopted by the Board was based on the achievement of certain quarterly and
annual profit levels by the Corporation. The 2004 Plan offered an opportunity
for all employees, including the executive officers, to earn incentive cash
bonuses of up to four weeks of their annual
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salaries. The target profit levels for the full year 2004 were achieved
resulting in the full bonus being earned by all eligible employees.
The Board and the Compensation Committee believe that the compensation
paid to the executive officers of the Corporation is reasonable.
Since each executive officer's annual compensation is substantially less
than $1 million, the Board does not believe that any action is necessary in
order to ensure that all executive compensation paid in cash will continue to be
deductible by the Corporation under Section 162(m) of the Internal Revenue Code.
In addition, stock options granted in accordance with the terms of the Stock
Incentive Plan qualify as "performance-based" compensation and are excluded in
calculating the $1 million limit on executive compensation.
Submitted by the Board of Directors and the Compensation Committee:
Erik F. Johnsen, Niels M. Johnsen, Erik L. Johnsen, Niels W. Johnsen,
Harold S. Grehan, Jr., H. Merritt Lane, III*, Edwin Lupberger*,
Raymond V. O'Brien, Jr.*, and Edward K. Trowbridge*
*Member of the Compensation Committee
SUMMARY OF COMPENSATION
The following table sets forth for the fiscal years ended December 31,
2002, 2003, and 2004, the compensation paid by the Corporation with respect to
the Chief Executive Officer and the three other executive officers of the
Corporation. The four individuals included in the table represent all executive
officers of the Corporation during 2004.
SUMMARY COMPENSATION TABLE
Annual Compensation
------------------- All Other
Name and Principal Position Year Salary Bonus Compensation
--------------------------- ---- ------ ------ ------------
Erik F. Johnsen, 2004 330,000 25,385 17,132 (1)
Chairman of the Board and Chief Executive 2003 330,000 - 17,132 (1)
Officer of the Corporation 2002 330,000 - 17,132 (1)
Niels M. Johnsen, 2004 300,000 23,077 1,000 (2)
President of the Corporation 2003 272,950 20,996 1,000 (2)
2002 265,000 - 1,000 (2)
Erik L. Johnsen, 2004 275,000 21,154 1,000 (2)
Executive Vice President of the Corporation 2003 221,450 17,350 1,000 (2)
2002 215,000 - 1,000 (2)
Gary L. Ferguson, 2004 173,000 13,308 1,000 (2)
Vice President and Chief Financial Officer 2003 164,800 12,677 1,000 (2)
of the Corporation 2002 160,000 - 1,000 (2)
(1) The Corporation has an agreement with Erik F. Johnsen whereby his estate
will be paid approximately $626,000 upon his death. To fund this death
benefit, the Corporation maintains a life insurance policy at an annual
cost of $17,132.
(2) Consists of contributions made by the Corporation to its 401(k) plan on
behalf of the employee.
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STOCK INCENTIVE PLAN
The following table presents information with respect to stock option
exercises and values under the Corporation's Stock Incentive Plan. No stock
option grants occurred in 2004. The only person named in the Summary
Compensation Table who is not listed below, Erik F. Johnsen, has never been
granted options under the Stock Incentive Plan.
AGGREGATED OPTION EXERCISES DURING THE YEAR ENDED DECEMBER 31, 2004
AND FISCAL YEAR END OPTION VALUES
Number of Value of
Securities Underlying Unexercised
Number of Unexercised Options at In-the-Money
Shares Acquired Value December 31, 2004 Options at
Name on Exercise Realized Exercisable/Unexercisable December 31, 2004
---- --------------- --------- -------------------------- -----------------
Niels M. Johnsen 0 0 200,000/0 $155,000
Erik L. Johnsen 0 0 200,000/0 $155,000
Gary L. Ferguson 0 0 75,000/0 $ 58,125
PENSION PLAN
The Corporation has in effect a defined benefit pension plan, in which all
employees of the Corporation and its domestic subsidiaries who are not covered
by union sponsored plans may participate after one year of service. Computation
of benefits payable under the plan is based on years of service, up to thirty
years, and the employee's highest sixty consecutive months of compensation,
which is defined as the participant's base salary plus overtime, excluding
incentive pay, bonuses or other extra compensation, in whatever form. The
following table reflects the estimated annual retirement benefits (assuming
payment in the form of a straight life annuity) an executive officer can expect
to receive upon retirement at age 65 under the plan, assuming the years of
service and compensation levels indicated below:
Years of Service
------------------------------------------------
Earnings 15 20 25 30 or more
----------------------------- -------- -------- -------- ----------
$100,000.................... $ 20,002 $ 26,670 $ 33,337 $ 40,004
150,000.................... 32,377 43,170 53,962 64,754
200,000.................... 44,752 59,670 74,587 89,504
250,000.................... 57,127 76,170 95,212 114,254
300,000.................... 69,502 92,670 115,837 139,004
350,000.................... 81,877 109,170 136,462 163,754
This table does not reflect the fact that the benefit provided by the
Retirement Plan's formula is subject to certain constraints under the Internal
Revenue Code. For 2005, the maximum annual benefit generally is $170,000 under
Code Section 415. Furthermore, under Code Section 401(a)(17), the maximum annual
compensation that may be reflected in 2005 is $210,000. These dollar limits are
subject to cost of living increases in future years. Each of the individuals
named in the Summary Compensation Table set forth above is a participant in the
plan and, for purposes of the plan, was credited during 2004 with a salary of
$205,000, except that Mr. Ferguson was credited with his actual salary. At
December 31, 2004, such individuals had 52, 34, 25, and 36 credited years of
service, respectively, under the plan. The plan benefits shown in the above
table are not subject to deduction or offset by Social Security benefits.
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BOARD OF DIRECTOR AND COMPENSATION COMMITTEE INTERLOCKS,
INSIDER PARTICIPATION IN COMPENSATION DECISIONS, AND CERTAIN TRANSACTIONS
No executive officer of the Corporation served during the last fiscal year
as a director, or member of the Compensation Committee, of another entity, one
of whose executive officers served as a director of the Corporation. During
2004, the Board delegated the responsibility for determining the salaries of the
executive officers other than himself to Erik F. Johnsen. Beginning in January
2005, the Compensation Committee will make recommendations to the Board
regarding non-CEO executive compensation.
Furnished below is information regarding certain transactions in which
executive officers and directors of the Corporation or members of their
immediate families had an interest during 2004.
R. Christian Johnsen, a son of Erik F. Johnsen, Chairman of the Board of
the Corporation, serves as the Secretary of the Corporation and is a partner in
the law firm of Jones, Walker, Waechter, Poitevent, Carrere and Denegre, which
has represented the Corporation since its inception. H. Hughes Grehan, a son of
Harold S. Grehan, Jr., a director of the Corporation, serves as Assistant
Secretary of the Corporation and is a partner in the same law firm. Fees paid to
the firm for legal services rendered to the Corporation during 2004 were
$1,001,000. The Corporation believes that these services are provided on terms
at least as favorable to the Corporation as could be obtained from unaffiliated
third parties.
James M. Baldwin, a son-in-law of Erik F. Johnsen, Chairman of the Board
of the Corporation, and brother-in-law of Erik L. Johnsen, Executive Vice
President of the Corporation, is employed by the Corporation in a non-executive
officer position and received compensation for the year ended December 31, 2004,
of $156,154. Brooke Y. Grehan, a son of Harold S. Grehan, Jr., a director of the
Corporation, is also employed by the Corporation in a non-executive officer
position and received compensation for the year ended December 31, 2004, of
$91,538. Compensation includes annual salaries and bonuses earned during 2004.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Corporation's executive officers and directors, and persons who beneficially
own more than ten percent of the Corporation's common stock, to file initial
reports of ownership and reports of changes in ownership with the SEC. Executive
officers, directors, and persons who beneficially own more than ten percent of
the Corporation's common stock are required by SEC regulations to furnish the
Corporation with copies of all Section 16(a) forms they file.
Based solely upon review of the copies of reporting forms furnished to the
Corporation, and written representations that no other reports were required,
the Corporation believes all filing requirements under Section 16(a) of the
Securities Exchange Act of 1934 applicable to directors, officers, and any
persons holding more than ten percent of the Corporation's common stock with
respect to the fiscal year ended December 31, 2004, were satisfied on a timely
basis.
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PERFORMANCE GRAPH
The following performance graph compares the performance of the
Corporation's Common Stock to the S&P 500 Index and to an Industry Peer Group
(which consists of OMI Corporation, Overseas Shipholding Group, Stolt-Nielsen,
Sea Containers Limited, and Alexander and Baldwin) for the Corporation's last
five fiscal years.
COMPARISON OF CUMULATIVE TOTAL RETURNS*
INTERNATIONAL SHIPHOLDING CORPORATION (ISH), S&P 500, PEER GROUP
(PERFORMANCE RESULTS THROUGH DECEMBER 31, 2004)
[PERFORMANCE GRAPH]
1999 2000 2001 2002 2003 2004
---- ---- ---- ---- ---- ----
ISH $100.00 $ 55.58 $ 57.72 $ 55.11 $133.25 $134.59
S&P 500 $100.00 $ 90.90 $ 80.10 $ 62.39 $ 80.29 $ 89.02
Peer Group $100.00 $131.84 $120.79 $110.26 $186.33 $280.34
*Assumes $100 invested at the close of trading on the last trading day in 1999
in ISH common stock, the S&P 500, and the Industry Peer Group. Also assumes
reinvestment of dividends.
PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS
The Corporation's 2004 financial statements were audited by Ernst & Young
LLP ("E&Y"). The Audit Committee of the Board has appointed E&Y as independent
auditors of the Corporation for the fiscal year ending December 31, 2005, and
the Board is submitting that appointment to its stockholders for ratification at
the annual meeting. E&Y became the Corporation's independent auditors on June
21, 2002. Representatives of E&Y will be present at the annual meeting, are
expected to be available to respond to appropriate questions, and will have an
opportunity to make a statement if they wish. If the stockholders do not ratify
the appointment of E&Y by the affirmative vote of at least a majority of the
shares of Common Stock represented at the meeting in person or by proxy, the
Audit Committee and the Board will reconsider the selection of independent
auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
- 12 -
OTHER MATTERS
QUORUM AND VOTING OF PROXIES
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock of the Corporation is necessary to constitute a quorum.
If a quorum is present, the vote of a majority of the Common Stock present or
represented will decide all questions properly brought before the meeting,
except that directors will be elected by plurality vote.
All proxies in the form enclosed received by the Board will be voted as
specified and, in the absence of instructions to the contrary, will be voted for
the election of the nominees named in the "Election of Directors" section of
this Proxy Statement.
Management has not received any notice that a stockholder desires to
present any matter for action by stockholders at the annual meeting and does not
know of any matters to be presented at the annual meeting other than the
election of directors and the ratification of the appointment of the independent
auditors. The enclosed proxy will confer discretionary authority with respect to
any other matters that may properly come before the meeting or any adjournment
thereof. It is the intention of the persons named in the enclosed proxy to vote
in accordance with their best judgment on any such matter.
EFFECT OF ABSTENTIONS AND BROKER NON-VOTES
Because directors are elected by plurality vote, abstentions and broker
non-votes will not affect the election of directors. With respect to any other
matter that is properly before the meeting, an abstention from voting on the
proposal by a stockholder will have the same effect as a vote "against" the
proposal, and a broker non-vote will be counted as "not present" with respect to
the proposal and therefore will have no effect on the outcome of the vote with
respect thereto.
STOCKHOLDER PROPOSALS AND NOMINATIONS
Any stockholder who desires to present a proposal qualified for inclusion
in the Corporation's proxy material relating to the 2006 annual meeting,
including stockholder nominations of directors, must forward the proposal to the
Secretary of the Corporation at the address shown on the first page of this
Proxy Statement in time to arrive at the Corporation prior to November 14, 2005.
Proxies solicited on behalf of the Board for the 2006 annual meeting will confer
discretionary authority to vote with respect to any other matter properly
submitted by a stockholder for action at the 2006 annual meeting if the
Corporation does not, on or before January 28, 2006, receive written notice,
addressed to the Secretary of the Corporation at the address shown on the first
page of this Proxy Statement, that the stockholder intends to submit a matter
for action.
BY ORDER OF THE BOARD OF DIRECTORS
R. CHRISTIAN JOHNSEN
Secretary
New Orleans, Louisiana
March 14, 2005
- 13 -
EXHIBIT A
INTERNATIONAL SHIPHOLDING CORPORATION
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
PURPOSE
The Audit Committee is appointed by the Board to assist the Board in monitoring
(1) the integrity of the financial statements of the Company, (2) the Company's
independent auditor's qualifications and independence, (3) the performance of
the Company's internal audit function and internal audit personnel and
independent auditors, and (4) the compliance by the Company with legal and
regulatory requirements.
The Audit Committee shall prepare the report required by the rules of the
Securities and Exchange Commission (the "Commission") to be included in the
Company's annual proxy statement.
COMMITTEE MEMBERSHIP
The Audit Committee shall consist of no fewer than three members. The members of
the Audit Committee shall meet the independence and experience requirements of
the New York Stock Exchange, Section 10A(m)(3) of the Securities Exchange Act of
1934 (the "Exchange Act") and the rules and regulations of the Commission. At
least one member of the Audit Committee shall be a financial expert as defined
by the Commission. Audit Committee members shall not simultaneously serve on the
audit committees of more than two other public companies.
The members of the Audit Committee shall be appointed by the Board on the
recommendation of the Nominating and Governance Committee. Audit Committee
members may be replaced by the Board.
MEETINGS
The Audit Committee shall meet as often as it determines, but not less
frequently than quarterly. The Audit Committee shall meet periodically with
management, the internal auditors and the independent auditor in separate
executive sessions. The Audit Committee may request any officer or employee of
the Company or the Company's outside counsel or independent auditor to attend a
meeting of the Committee or to meet with any members of, or consultants to, the
Committee.
COMMITTEE AUTHORITY AND RESPONSIBILITIES
The Audit Committee shall have the sole authority to appoint or replace the
independent auditor (subject, if applicable, to shareholder ratification). The
Audit Committee shall be directly responsible for the compensation and oversight
of the work of the independent auditor (including resolution of disagreements
between management and the independent auditor regarding financial reporting)
for the purpose of preparing or issuing an audit report or related work. The
independent auditor shall report directly to the Audit Committee.
The Audit Committee shall preapprove all auditing services and permitted
non-audit services (including the fees and terms thereof) to be performed for
the Company by its independent auditor. The Audit Committee may form and
delegate authority to subcommittees consisting of one or more members when
appropriate, including the authority to grant preapprovals of audit and
permitted non-audit services, provided that decisions of any such subcommittee
to grant preapprovals shall be presented to the full Audit Committee at its next
scheduled meeting.
The Audit Committee shall have the authority, to the extent it deems necessary
or appropriate, to retain independent legal, accounting or other advisors. The
Company shall provide for appropriate funding, as determined by the Audit
Committee, for payment of compensation to the independent auditor for the
purpose of rendering or issuing an audit report and to any advisors employed by
the Audit Committee and for the ordinary administrative expenses of the Audit
Committee that are necessary or appropriate in carrying out its duties.
The Audit Committee shall make regular reports to the Board. The Audit Committee
shall review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval. In consultation with the
Nominating and Governance Committee, the Audit Committee shall undertake an
annual evaluation of its own performance.
The Audit Committee, to the extent it deems necessary or appropriate, shall:
FINANCIAL STATEMENT AND DISCLOSURE MATTERS
1. Review and discuss with management and the independent auditor the annual
audited financial statements, including disclosures made in "Management's
Discussion and Analysis of Financial Condition and Results of Operations",
and recommend to the Board whether the audited financial statements should
be included in the Company's Form 10-K.
2. Review and discuss with management and the independent auditor the
Company's interim financial statements prior to the filing of each Form
10-Q, including the results of the independent auditor's review of the
interim financial statements in accordance with generally accepted
auditing standards for conducting such review (currently Statement on
Auditing Standards No. 71).
3. Discuss with management and the independent auditor significant financial
reporting issues and judgments made in connection with the preparation of
the Company's financial statements, including any significant changes in
the Company's selection or application of accounting principles, any major
issues as to the adequacy of the Company's internal controls and any
special steps adopted in light of material control deficiencies.
4. Review and discuss quarterly reports from the independent auditors on:
(a) All critical accounting policies and practices to be used.
(b) All alternative treatments of financial information within generally
accepted accounting principles that have been discussed with
management, ramifications of the use of such alternative disclosures
and treatments, and the treatment preferred by the independent
auditor.
(c) Other material written communications between the independent
auditor and management, such as any management letter or schedule of
unadjusted differences.
(d) Consultations with the independent auditor's national office by the
Company's audit team to discuss issues regarding the Company.
5. Discuss with management the Company's earnings press releases, including
the use of "pro forma" or "adjusted" non-GAAP information, as well as
financial information and earnings guidance provided to analysts and
rating agencies.
6. Discuss with management and the independent auditor the effect of
regulatory and accounting initiatives as well as off-balance sheet
structures on the Company's financial statements.
7. Discuss with management the Company's major financial risk exposures and
the steps management has taken to monitor and control such exposures,
including the Company's risk assessment and risk management policies.
8. Discuss with the independent auditor the matters required to be discussed
by Statement on Auditing Standards No. 61 relating to the conduct of the
audit, including any difficulties encountered in the course of the audit
work, any restrictions on the scope of activities or access to requested
information, and any significant disagreements with management.
Exhibit A
Page 2 of 4
9. Discuss with the Company's CEO and CFO their certifications contained in
the Company's Forms 10-K and 10-Q regarding any significant deficiencies
in the design or operation of internal controls or material weaknesses
therein and any fraud involving management or other employees who have a
significant role in the Company's internal controls.
OVERSIGHT OF THE COMPANY'S RELATIONSHIP WITH THE INDEPENDENT AUDITOR
10. Review and evaluate the lead review and lead audit partner of the
independent auditor team.
11. Obtain and review a report from the independent auditor at least annually
regarding (a) the independent auditor's internal quality-control
procedures, (b) any material issues raised by the most recent internal
quality-control review, or peer review, of the firm, or by any inquiry or
investigation by governmental or professional authorities within the
preceding five years respecting one or more independent audits carried out
by the firm, (c) any steps taken to deal with any such issues, and (d) all
relationships between the independent auditor and the Company. Evaluate
the qualifications, performance and independence of the independent
auditor, including considering whether the auditor's quality controls are
adequate and the provision of permitted non-audit services is compatible
with maintaining the auditor's independence, taking into account the
opinions of management and the internal auditors. The Audit Committee
shall present its conclusions with respect to the independent auditor to
the Board.
12. Ensure the rotation of the lead audit partner having primary
responsibility for the audit and the audit partner responsible for
reviewing the audit as required by law and the rules of the Commission.
Consider whether, in order to assure continuing auditor independence, it
is appropriate to adopt a policy of rotating the independent auditing firm
on a regular basis.
13. Recommend to the Board policies for the Company's hiring of employees or
former employees of the independent auditor who participated in any
capacity in the audit of the Company.
14. Meet with the independent auditor prior to the audit to discuss the
planning and staffing of the audit.
OVERSIGHT OF THE COMPANY'S INTERNAL AUDIT FUNCTION
15. Review the appointment and replacement of any senior internal auditing
executive.
16. Review the significant reports to management prepared by the internal
auditing department and management's responses.
17. Discuss with the independent auditor and management the internal audit
department responsibilities, budget and staffing and any recommended
changes in the planned scope of the internal audit.
COMPLIANCE OVERSIGHT RESPONSIBILITIES
18. Obtain from the independent auditor assurance that Section 10A(b) of the
Exchange Act has not been implicated.
19. Obtain reports from management, the Company's senior internal auditing
executive and the independent auditor that the Company and its
subsidiary/foreign affiliated entities are in conformity with applicable
legal requirements. Review reports and disclosures of insider and
affiliated party transactions. Advise the Board with respect to the
Company's policies and procedures regarding compliance with applicable
laws and regulations.
20. Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters, and the confidential, anonymous
submissions by employees of concerns regarding questionable accounting or
auditing matters.
Exhibit A
Page 3 of 4
21. Discuss with management and the independent auditor any correspondence
with regulators or governmental agencies and any published reports that
raise material issues regarding the Company's financial statements or
accounting policies.
22. Discuss with the Company's outside counsel matters that may have a
material impact on the financial statements or the Company's compliance
policies.
23. Meet separately, periodically, with management, with the internal auditors
(or other personnel responsible for the internal audit function), and with
the independent auditors.
LIMITATION OF AUDIT COMMITTEE'S ROLE
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements and disclosures are
complete and accurate and are in accordance with generally accepted accounting
principles and applicable rules and regulations. These are the responsibilities
of management and the independent auditor.
Exhibit A
Page 4 of 4
FORM OF PROXY
This Proxy is Solicited on Behalf of the Board of Directors of
INTERNATIONAL SHIPHOLDING CORPORATION
The undersigned hereby (a) acknowledges receipt of the notice of annual
meeting of stockholders of International Shipholding Corporation to be held in
the Executive Board Room, 17th Floor, Poydras Center, 650 Poydras Street, New
Orleans, Louisiana, on Wednesday, April 27, 2005, at 2:00 p.m., New Orleans
time; (b) appoints Niels W. Johnsen, Erik F. Johnsen and William H. Hines, or
any one or more of them, as proxies, each with the power to appoint his
substitute, and hereby authorizes each of them to represent and to vote, as
designated on the reverse side of this Form of Proxy, all of the shares of
common stock of International Shipholding Corporation held of record by the
undersigned on February 28, 2005, at the annual meeting of stockholders to be
held on April 27, 2005, or any adjournment thereof.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
ANNUAL MEETING OF STOCKHOLDERS OF
INTERNATIONAL SHIPHOLDING CORPORATION
APRIL 27, 2005
PLEASE DATE, SIGN AND MAIL YOUR PROXY COMPANY NUMBER ______
CARD IN THE ENVELOPE PROVIDED AS SOON AS POSSIBLE. ACCOUNT NUMBER ______
- Please Detach and Mail in the Envelope Provided -
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
1. Election of Directors:
NOMINEES:
[ ] FOR ALL NOMINEES - Niels W. Johnsen
- Erik F. Johnsen
[ ] WITHHOLD AUTHORITY - Niels M. Johnsen
FOR ALL NOMINEES - Erik L. Johnsen
- Harold S. Grehan, Jr.
[ ] FOR ALL EXCEPT - Edwin Lupberger
(See instructions below) - Raymond V. O'Brien, Jr.
- Edward K. Trowbridge
- H. Merritt Lane, III
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to
withhold, as shown here: -
2. Proposal to ratify the appointment of Ernst & Young LLP, certified public
accountants, as the independent auditors for the Corporation for the
fiscal year ending December 31, 2005.
FOR_____ AGAINST_____ ABSTAIN_____
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 and 2.
To change the address on your account, please check the box at right and
indicate your new address in the space above. Please note that changes to the
registered name(s) on the account may not be submitted via this method. [ ]
Signature of Stockholder _________________________ Date:____________
Signature of Stockholder _________________________ Date:____________
NOTE: This proxy must be signed exactly as the name appears hereon. When shares
are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If the signer is a partnership, please sign
in partnership name by authorized person.