Edgar Filing: INTERNATIONAL SHIPHOLDING CORP

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

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INTERNATIONAL SHIPHOLDING CORPORATION

(Name of Registrant as Specified in its Charter)

------------------------------------------------------------------

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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 23,
2003, at 2:00 p.m., New Orleans time, for the following purposes:

(i) to elect a board of eight 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, 2003; 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, 2003, 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 13, 2003

INTERNATIONAL SHIPHOLDING CORPORATION
17TH FLOOR
POYDRAS CENTER
650 POYDRAS STREET
NEW ORLEANS, LOUISIANA

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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
23, 2003, 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 13, 2003.

Only holders of record of the Corporation's Common Stock at the close of
business on February 28, 2003, 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.

PRINCIPAL STOCKHOLDERS

The following persons, in addition to four 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. ......................................... 889,662 (1) 14.63%
100 E. Pratt Street
Baltimore, Maryland 21202

Franklin Resources, Inc. ............................................... 576,500 (2) 9.48%
One Franklin Parkway
San Mateo, California 94403

Dimensional Fund Advisors Inc. ......................................... 434,486 (3) 7.14%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401

Donald Smith & Co., Inc. ............................................... 320,100 (4) 5.26%
East 80 Route 4p, Suite 360
Paramus, New Jersey 07652

(1) Based on information contained in Schedule 13G as of December 31, 2002.
These securities are owned by various individual and institutional
investors including T. Rowe Price Small-Cap Value Fund, Inc. (which owns
695,000 shares, representing 11.43% of the shares outstanding), for which
T. Rowe Price Associates, Inc. (Price Associates) serves as investment
advisor with power to direct investments and/or sole power to vote the
securities. A total of 848,062 shares are held with sole investment power
only. 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, 2002, by Franklin Resources, Inc. (FRI), Charles B. Johnson,
Rupert H. Johnson, Jr., and Franklin Advisory Services, LLC. Franklin
Advisory Services, LLC, has sole voting and dispositive power with respect
to all 576,500 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, 2002.
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, 2002.

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 eight 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 eight
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 28,
2003, concerning the nominees, all of whom are now serving a one year term as a
director, 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. Unless otherwise indicated, the shares of the Corporation's Common Stock
shown as being beneficially owned are held with sole voting and investment
power. Niels W. Johnsen, Erik F. Johnsen, Raymond V. O'Brien, and Harold S.
Grehan, Jr. each first became a director of the Corporation in early 1979, when
the Corporation was formed. Niels M. Johnsen and Edwin Lupberger became
directors in 1988. Edward K. Trowbridge and Erik L. Johnsen became directors in
1994.

The only executive officer named in the Summary Compensation Table who is
not also a nominee for director is Gary L. Ferguson, 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.

The Board recommends a vote FOR each of the nominees named below.

Name, Age, Principal Occupation, and Shares of Common Stock Percent
Directorship in Other Public Corporations Beneficially Owned of Class (1)
-------------------------------------------- ------------------------- ------------

Niels W. Johnsen, 80 (2)(3) ....................... 745,836 (4) 12.26%
Chairman of the Board of the Corporation
One Whitehall Street
New York, New York 10004

Erik F. Johnsen, 77 (3)(5) ........................ 664,053 (6) 10.92%
President of the Corporation
650 Poydras Street, Suite 1700
New Orleans, Louisiana 70130

Niels M. Johnsen, 57 (3)(7) ....................... 751,374 (8) 11.96%
Executive Vice President of the Corporation
One Whitehall Street
New York, New York 10004

Erik L. Johnsen, 45 (3)(9) ........................ 322,699 (10) 5.14%
Executive Vice President of the Corporation
650 Poydras Street, Suite 1700
New Orleans, Louisiana 70130

Harold S. Grehan, Jr., 75 (11) .................... 91,018 1.50%
Fomerly Vice President of the Corporation

(continued on page 4)

Edwin Lupberger, 66 (12) .......................... 728 .01%
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., 75 (13) .................. 5,936 .10%
Director, Emigrant Savings Bank, New York; formerly
Chairman of the Board and Chief Executive Officer of
Emigrant Savings Bank

Edward K. Trowbridge, 74 (14) ..................... 625 (15) .01%

Formerly Chairman of the Board and Chief Executive
Officer of Atlantic Mutual Companies

All executive officers and directors as a group (9 persons) 2,432,619 39.41%

(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.

(2) Niels W. Johnsen has served as Chairman and Chief Executive Officer of the
Corporation since its formation in 1979. He was one of the founders of
Central Gulf Lines, Inc. ("Central Gulf"), one of the Corporation's
principal subsidiaries, in 1947.

(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 has been 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 8,875 shares owned by Erik F. Johnsen's wife and 133,908 shares
held by the Erik F. Johnsen Limited Family Partnership of which Mr.
Johnsen is General Partner. Also includes 49,812 shares owned by the Erik
F. Johnsen Family Foundation of which he claims no beneficial ownership
but maintains voting and disposition rights.

(7) Niels M. Johnsen joined Central Gulf in 1970 and held various positions
before being named Vice President in 1986. In 1997, he was named Executive
Vice President of the Corporation and Chairman and Chief Executive Officer
of each of the Corporation's principal subsidiaries, except Waterman
Steamship Corporation for which he serves as President. Mr. Johnsen became
a director of Atlantic Mutual Companies in 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, 15,750 shares held by the
MAM-NWJ Foundation, Inc. of which Niels M. Johnsen is a director, 174,271
shares held in trust for Niels W. Johnsen of which Niels M. Johnsen is
trustee, 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 and Chief Operating
Officer of each of the Corporation's principal subsidiaries, except
Waterman Steamship Corporation for which he serves as Executive Vice
President.

(10) Includes 9,400 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 became Chairperson of the
Audit Committee of the Board early in January of 2003.

(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 became Chairperson of the Compensation Committee of the Board early in
January of 2003.

(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 became Chairperson of the Nominating
and Governance Committee of the Board early in January of 2003.

(15) Shares owned jointly with wife.

As of February 28, 2003, Niels W. Johnsen, Erik F. Johnsen, and their
spouses, children, and grandchildren (collectively, the "Johnsen Family")
beneficially owned an aggregate of 2,538,738 shares or 41.74% 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.

COMMITTEE AND BOARD MEETINGS

The Corporation's Board has three standing committees, the Audit
Committee, the Compensation Committee, and the Nominating and Governance
Committee. Each of the three committees is composed of the same three directors
and operates under a written charter. The members of the committees are Messrs.
Lupberger, O'Brien, and Trowbridge, all of whom are independent under the New
York Stock Exchange listing standards.

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 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 in 2002. The Audit Committee
Charter, as amended in January of 2003, is included as an exhibit to this Proxy
Statement.

During 2002, the Compensation Committee's responsibility was to administer
the Corporation's Stock Incentive Plan. The Compensation Committee did not meet
during 2002. The Board adopted a charter for this committee in January of 2003
under which their responsibilities now include recommending director
compensation policies to the Board and discharging the Board's responsibilities
relating primarily to the compensation of the Corporation's Chief Executive
Officer. This committee will also continue to administer the Corporation's Stock
Incentive Plan. Mr. O'Brien is the chairperson of this committee.

The Nominating and Governance Committee was formed by the Board in October
of 2002 and first met in January of 2003. This committee's primary
responsibilities, as defined in its charter adopted by the

Board in January of 2003, are to identify individuals qualified to become Board
and Board committee members; select, or to recommend that the Board select, the
director nominees for the next annual meeting of shareholders; and develop and
recommend to the Board a set of corporate governance principles applicable to
the Corporation. This committee does not have specific procedures to receive
director nominations, but will consider those recommended by security holders.
Mr. Trowbridge is the chairperson of this committee.

The Board held five meetings during 2002. 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 2002. Each non-officer director receives
fees of $16,000 per year plus $1,000 for each meeting of the Board or a
committee thereof attended.

AUDIT COMMITTEE REPORT

To the Board of Directors of International Shipholding Corporation:

We have reviewed and discussed with management the Corporation's audited
financial statements as of and for the year ended December 31, 2002.

We have 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.

We 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, 2002.

Audit Fees: Aggregate fees for professional services rendered by Ernst &
Young LLP, the principal accountant, for the audit of the Corporation's
financial statements for the fiscal year ended December 31, 2002, and for
reviewing the financial statements included in the Corporation's Form 10-Qs were
$182,000.

Audit fees for services rendered during 2002 by Arthur Andersen LLP, who
served as the Corporation's principal accountant through June 21, 2002, were
$12,000.

Financial Information Systems Design and Implementation Fees: There were
no fees or costs billed to the Corporation for services rendered by Ernst &
Young LLP or Arthur Andersen LLP relating to financial information systems
design and implementation for the year ended December 31, 2002.

All Other Fees: Aggregate fees and costs billed to the Corporation for
services rendered by Ernst & Young LLP for the fiscal year ended December 31,
2002, other than those discussed above, were $50,600. These included $18,000 for
audit-related fees for employee benefit plan audits and $32,600 for non-audit
related fees for tax compliance and consulting services. The Corporation was
also billed $34,300 for services rendered by Arthur Andersen LLP for non-audit
related fees for tax compliance and consulting.

We have determined that the provision of services covered by the preceding
paragraphs is compatible with maintaining the independence of Ernst & Young LLP
from the Corporation.

Submitted by the Audit Committee:

Edwin Lupberger
Raymond V. O'Brien
Edward K. Trowbridge

EXECUTIVE COMPENSATION

Decisions on cash compensation of the Corporation's executive officers for
2002 were made by the Board. The Compensation Committee of the Board, which is
made up of three independent directors, administers the Corporation's Stock
Incentive Plan and makes decisions on the grant of stock options. Beginning in
January of 2003, the Compensation Committee also will discharge the Board's
responsibilities relating primarily to the compensation of the Corporation's
Chief Executive Officer. Set forth below is a report submitted by the Board and
the Committee addressing the Corporation's executive compensation policies for
2002.

BOARD OF DIRECTORS AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Corporation's executive compensation structure for 2002 was comprised
of salaries. The salaries of Messrs. Niels W. and Erik F. Johnsen, Chairman of
the Board and President, respectively, were set at $330,000 by the Board in 1990
and have not been increased. The Board delegates to Niels W. and Erik F. Johnsen
the power to set the salaries of the other executive officers.

During 2002, no bonus plan was in effect, and no stock options were
granted.

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:

Niels W. Johnsen Erik F. Johnsen
Niels M. Johnsen Erik L. Johnsen
Harold S. Grehan, Jr. Edwin Lupberger*
Raymond V. O'Brien, Jr.* Edward K. Trowbridge*

*Member of the Compensation Committee

SUMMARY OF COMPENSATION

The following table sets forth for the fiscal years ended December 31,
2000, 2001, and 2002, the compensation paid by the Corporation with respect to
the Chief Executive Officer and the four other most highly compensated executive
officers for fiscal year 2002:

SUMMARY COMPENSATION TABLE

Annual
Compensation - All Other
Name and Principal Position Year Salary Compensation
------------------------------------------------------------------ --------------- --------------------- ------------------

Niels W. Johnsen, 2002 $ 330,000 $ -
Chairman of the Board of the Corporation (1) 2001 442,500 (2) -
2000 330,000 -

Erik F. Johnsen, 2002 330,000 17,132 (3)
President of the Corporation 2001 442,500 (2) 17,132 (3)
2000 330,000 17,132 (3)

Niels M. Johnsen, 2002 265,000 1,000 (4)
Executive Vice President of the Corporation 2001 265,000 1,000 (4)
2000 265,000 1,000 (4)

Erik L. Johnsen, 2002 215,000 1,000 (4)
Executive Vice President of the Corporation 2001 215,000 1,000 (4)
2000 215,000 1,000 (4)

Gary L. Ferguson, 2002 160,000 1,000 (4)
Vice President and Chief Financial Officer of the Corporation 2001 160,000 1,000 (4)
2000 160,000 1,000 (4)

(1) The Corporation has an agreement with Niels W. Johnsen whereby his estate
will be paid approximately $822,000 upon his death. The Corporation has
reserved amounts sufficient to fund this death benefit.

(2) The annual salary is $330,000; however, a one-time payment made pursuant
to a commitment entered into in prior years applicable to year 2000 in the
amount of $112,500 was made in January 2001.

(3) 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 a cost of
$17,132 in 2002, 2001, and 2000.

(4) Consists of contributions made by the Corporation to its 401(k) plan on
behalf of the employee.

STOCK INCENTIVE PLAN

The following table presents information with respect to stock option
exercises and values under the Corporation's Stock Incentive Plan for three of
the executive officers named in the Summary Compensation Table. No stock option
grants or repricings occurred in 2002. The two executive officers named in the
Summary Compensation Table that are not listed below, Niels W. Johnsen and Erik
F. Johnsen, have never been granted options under the Stock Incentive Plan.

AGGREGATED OPTION EXERCISES DURING THE FISCAL YEAR ENDED
DECEMBER 31, 2002 AND FISCAL YEAR END OPTION VALUES

Number of
Securities Underlying Value of
Number of Unexercised Options at Unexercised
Shares December 31, 2002 In-the-Money
Acquired Value Exercisable/ Options at
Name on Exercise Realized Unexercisable December 31, 2002
-------------------- ----------------- ------------- ------------------------- ---------------------

Niels M. Johnsen 0 0 200,000 / 0 0

Erik L. Johnsen 0 0 200,000 / 0 0

Gary L. Ferguson 0 0 75,000 / 0 0

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 a 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 .............................. 20,463 27,284 34,105 40,926
$150,000 .............................. 32,838 43,784 54,730 65,676
$200,000 .............................. 45,213 60,284 75,355 90,426
$250,000 ......................... 57,588 76,784 95,980 115,176
$300,000 .............................. 69,963 93,284 116,605 139,926
$350,000 .............................. 82,338 109,784 137,230 164,676

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 2003, the maximum annual benefit generally is $160,000 under
Code Section 415. Furthermore, under Code Section 401(a)(17), the maximum annual
compensation that may be taken into account in calculating benefits in 2003 is
$200,000. 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 2002 with a salary of $200,000, except that Mr. Ferguson was credited
with his actual salary. At December 31, 2002, such individuals had 55, 50, 32,
23, and 34 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.

BOARD OF DIRECTOR INTERLOCKS,
INSIDER PARTICIPATION IN COMPENSATION DECISIONS,
AND CERTAIN TRANSACTIONS

Decisions as to the cash compensation of the executive officers of the
Corporation are made by the Board. Decisions on salary increases for executive
officers other than themselves were made by Niels W. Johnsen and Erik F.
Johnsen. 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.

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 2002.

R. Christian Johnsen, a son of Erik F. Johnsen, the President 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 2002 were
$738,000. 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.

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 Tankers,
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 12/31/02)

[LINE GRAPH]

1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----

ISH --o-- $100.00 $92.37 $69.84 $38.81 $40.30 $38.47
S&P 500 --+-- $100.00 $128.58 $155.64 $141.47 $124.66 $97.11
Peer Group --|X|-- $100.00 $71.01 $74.76 $93.53 $85.39 $66.26

--------

*Assumes $100 invested at the close of trading on the last trading day in 1997
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 2002 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, 2003, 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. On that date, the Board, upon the recommendation of its Audit
Committee, decided to dismiss Arthur Andersen LLP ("Andersen") as the
Corporation's independent auditors and engaged E&Y to serve as the Corporation's
independent auditors for the remainder of the fiscal year 2002. Andersen's
reports on the Corporation's consolidated financial statements for each of the
prior two fiscal years did not contain any adverse opinion or disclaimer of
opinion, nor were they qualified or modified as to uncertainty, audit scope, or
accounting principles. During the Corporation's two fiscal years prior to the
date Andersen was dismissed and for the subsequent interim period through the
date Andersen was dismissed, there were no disagreements between the Corporation
and Andersen on any matters of accounting principles or practices, financial
statement disclosures, or auditing scope or procedures, which disagreements, if
not resolved to Andersen's satisfaction, would have caused Andersen to make
reference to the subject matter of the disagreement in connection with its
reports; and there were no reportable events as listed in Item 304(a)(1)(v) of
Regulation S-K.

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.

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 ABSTENTION 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 shareholder 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

Any stockholder who desires to present a proposal qualified for inclusion
in the Corporation's proxy material relating to the 2004 annual meeting 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 12, 2003. Proxies solicited on behalf of the Board for the
2004 annual meeting will confer discretionary authority to vote with respect to
any other matter properly submitted by a stockholder for action at the 2004
annual meeting if the Corporation does not, on or before January 26, 2004,
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 do so.

BY ORDER OF THE BOARD OF DIRECTORS

R. CHRISTIAN JOHNSEN
Secretary

New Orleans, Louisiana
March 13, 2003

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
independent auditor's qualifications and independence, (3) the performance of
the Company's internal audit function 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, subject to the de minimus exceptions for
non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which
are approved by the Audit Committee prior to the completion of the audit. 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 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

A-1

EXHIBIT A

INTERNATIONAL SHIPHOLDING CORPORATION
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER

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.

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 conjunction 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, 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 once the applicable rules become effective.

(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.

A-2

EXHIBIT A

INTERNATIONAL SHIPHOLDING CORPORATION
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER

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.

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, and 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. 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 the 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.

A-3

EXHIBIT A

INTERNATIONAL SHIPHOLDING CORPORATION
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER

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.

21. Discuss with management and the independent auditor any correspondence
with regulators or governmental agencies and any published reports which
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 of the Comapny's compliance
policies.

23. Meet separately, periodically, with management, with the internal
auditors, 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.

A-4

ANNUAL MEETING OF STOCKHOLDERS OF
INTERNATIONAL SHIPHOLDING CORPORATION

APRIL 23, 2003

PLEASE DATE, SIGN AND MAIL YOUR PROXY COMPANY NUMBER ______
CARD IN THE ENVELOPE PROVIDED AS SOON AS ACCOUNT NUMBER ______
POSSIBLE.

o Please Detach and Mail in the Envelope Provided o

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 o Niels W. Johnsen
o Erik F. Johnsen
[ ] WITHHOLD AUTHORITY o Niels M. Johnsen
FOR ALL NOMINEES o Erik L. Johnsen
o Harold S. Grehan, Jr.
[ ] FOR ALL EXCEPT o Edwin Lupberger
(See instructions below) o Edward K. Trowbridge
o Raymond V. O'Brien, Jr.

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, 2003.

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.

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 23, 2003, 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, 2003, at the annual meeting of stockholders to be
held on April 23, 2003, or any adjournment thereof.

(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)