-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IRxRmESJOqPcOdofTZMJwW39MRipIl+CGMXGCzW0MQy/jAIKgzNSJkY22frFyMW3 Dvu7IIelH8ZxJfy1y3TNug== 0000278041-96-000013.txt : 19960806 0000278041-96-000013.hdr.sgml : 19960806 ACCESSION NUMBER: 0000278041-96-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960805 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL SHIPHOLDING CORP CENTRAL INDEX KEY: 0000278041 STANDARD INDUSTRIAL CLASSIFICATION: DEEP SEA FOREIGN TRANSPORTATION OF FREIGHT [4412] IRS NUMBER: 362989662 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10852 FILM NUMBER: 96603949 BUSINESS ADDRESS: STREET 1: 650 POYDRAS ST STE 1700 CITY: NEW ORLEANS STATE: LA ZIP: 70130 BUSINESS PHONE: 5045295461 10-Q 1 SECOND QUARTER 1996 FORM 10-Q INTERNATIONAL SHIPHOLDING CORPORATION AND SUBSIDIARIES UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 ----------------- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission file number 2-63322 _______________________________________ INTERNATIONAL SHIPHOLDING CORPORATION - ------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 36-2989662 - -------------------- ----------------------------- (State or other (I.R.S. Employer jurisdiction of Identification Number) incorporation or organization) 650 Poydras Street New Orleans, Louisiana 70130 - ------------------------------------------------------------ (Address of principal executive offices) (Zip Code) (504) 529-5461 - ------------------------------------------------------------ (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing for the past 90 days. YES X NO -------- ------- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock $1 Par Value 6,682,887 shares (June 28, 1996) ---------------- PART I - FINANCIAL INFORMATION INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands) (Unaudited)
June 30, December 31, ASSETS 1996 1995 ---------- ------------ Current Assets: Cash and Cash Equivalents $ 67,384 $ 54,281 Marketable Securities 2,727 4,630 Accounts Receivable, Net 51,303 46,834 Deferred Income Taxes 83 - Net Investment in Direct Financing Leases 2,063 2,104 Other Current Assets 2,187 3,521 Material and Supplies Inventory, At Cost 10,370 10,545 ---------- ---------- Total Current Assets 136,117 121,915 ---------- ---------- Net Investment in Direct Financing Leases 23,464 24,482 ---------- ---------- Vessels,Property and Other Equipment, At Cost: Vessels and Barges 644,997 634,905 Other Marine Equipment 7,462 7,570 Terminal Facilities 18,091 18,126 Land 2,317 2,317 Furniture and Equipment 16,658 15,892 ---------- ---------- 689,525 678,810 Less - Accumulated Depreciation (258,442) (243,929) ---------- ---------- 431,083 434,881 ---------- ---------- Other Assets: Deferred Charges in Process of Amortization 29,231 26,952 Acquired Contract Costs, Net of Accumulated Amortization of $17,517 and $16,496 in 1996 and 1995, Respectively 20,507 21,733 Due from Related Parties 472 535 Other 7,479 17,082 ---------- ---------- 57,689 66,302 ---------- ---------- $ 648,353 $ 647,580 ========== ========== The accompanying notes are an integral part of these statements.
INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands) (Unaudited)
June 30, December 31, 1996 1995 ---------- ---------- LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Current Maturities of Long-Term Debt $ 40,365 $ 40,785 Current Maturities of Capital Lease Obligations 1,981 1,469 Accounts Payable and Accrued Liabilities 75,575 77,481 Federal Income Tax Payable 1,608 6,520 Current Deferred Income Tax Liability - 1,283 Current Liabilities to be Refinanced (13,394) (19,030) ---------- ---------- Total Current Liabilities 106,135 108,508 ---------- ---------- Current Liabilities to be Refinanced 13,394 19,030 ---------- ---------- Billings in Excess of Income Earned and Expenses Incurred 5,723 4,639 ---------- ---------- Long-Term Capital Lease Obligations, Less Current Maturities 17,892 19,623 ---------- ---------- Long-Term Debt, Less Current Maturities 276,493 269,872 ---------- ---------- Reserves and Deferred Credits: Deferred Income Taxes 37,788 38,668 Claims and Other 20,765 20,979 ---------- ---------- 58,553 59,647 ---------- ---------- Stockholders' Investment: Common Stock 6,756 6,756 Additional Paid-in Capital 54,450 54,450 Retained Earnings 110,256 106,158 Less - Treasury Stock (1,133) (1,133) Unrealized Holding Gain (Loss) on Marketable Securities (2) 30 Unrealized Translation Loss (164) - ---------- ---------- 170,163 166,261 ---------- ---------- $ 648,353 $ 647,580 ========== ========== The accompanying notes are an integral part of these statements.
INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF INCOME (All Amounts in Thousands Except Per Share Data) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, 1996 1995 1996 1995 --------- --------- --------- -------- Revenues $ 91,135 $ 79,418 $180,625 $157,326 Operating Differential Subsidy 6,640 5,426 12,385 10,820 --------- --------- --------- --------- 97,775 84,844 193,010 168,146 --------- --------- --------- ---------- Operating Expenses: Voyage Expenses 72,276 63,553 142,369 125,818 Vessel and Barge Depreciation 8,040 6,227 16,035 12,294 --------- --------- --------- --------- Gross Voyage Profit 17,459 15,064 34,606 30,034 --------- --------- --------- --------- Administrative and General Expenses 6,705 6,212 13,392 12,674 Gain on Sale of Assets 90 1 87 2 --------- --------- --------- --------- Operating Income 10,844 8,853 21,301 17,362 --------- --------- --------- --------- Interest: Interest Expense 7,081 6,498 14,376 12,812 Investment Income (578) (740) (1,004) (1,516) --------- --------- --------- --------- 6,503 5,758 13,372 11,296 --------- --------- --------- --------- Equity in Net Income of Unconsolidated Entities (Net of Applicable Taxes) - 105 - 331 --------- --------- --------- --------- Income Before Provision for Income Taxes 4,341 3,200 7,929 6,397 --------- --------- --------- --------- Provision for Income Taxes: Current 114 286 1,996 2,091 Deferred 1,414 800 822 21 State 128 94 178 179 --------- --------- --------- --------- 1,656 1,180 2,996 2,291 Net Income $ 2,685 $ 2,020 $ 4,933 $ 4,106 ========= ========= ========= ========= Earnings Per Common Share: Net Income $ 0.40 $ 0.30* $ 0.74 $ 0.61* ========= ========= ========= ========= Weighted Average Shares of Common Stock Outstanding 6,682,887 6,682,887* 6,682,887 6,682,887* * Restated for November 17, 1995, twenty-five percent stock dividend. The accompanying notes are an integral part of these statements.
INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' INVESTMENT (Dollars in Thousands) (Unaudited)
Net Additional Unrealized Unrealized Common Paid-In Retained Treasury Holding Translation Stock Capital Earnings Stock Gain/(Loss) Loss Total ---------------------------------------------------------- Balance at December 31, 1994 $5,405 $54,450 $ 87,757 ($1,133) ($163) $ - $146,316 Net Income for Year Ended December 31, 1995 - - 20,980 - - - 20,980 Cash Dividends - - (1,228) - - - (1,228) 25% Stock Dividend 1,351 - (1,351) - - - - Unrealized Holding Gain on Marketable Securities, Net of Deferred Taxes - - - - 193 - 193 ----------------------------------------------------------- Balance at December 31, 1995 $6,756 $54,450 $106,158 ($1,133) $30 $ - $166,261 Net Income for Six Months Ended June 30, 1996 - - 4,933 - - - 4,933 Cash Dividends - - (835) - - - (835) Unrealized Holding Loss on Marketable Securities, Net of Deferred Taxes - - - - (32) - (32) Unrealized Translation Loss - - - - - (164) (164) -------------------------------------------------------- Balance at June 30, 1996 $6,756 $54,450 $110,256 ($1,133) ($2) ($164) $170,163 ======================================================== The accompanying notes are an integral part of these statements.
INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited)
Six Months Ended June 30, 1996 1995 --------- --------- Cash Flows from Operating Activities: Net Income $ 4,933 $ 4,106 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation 17,097 13,093 Amortization of Deferred Charges and Other Assets 9,002 8,659 Provision for Deferred Income Taxes 2,887 2,112 Equity in Unconsolidated Entities - (372) Gain on Sale of Assets (87) (2) Unearned Income 1,084 1,090 Reserve for Claims and Other Deferred Credits (206) (2,021) Changes in: Accounts Receivable (2,055) 3,534 Net Investment in Direct Financing Leases 1,060 1,065 Other Assets 147 2,890 Inventories and Other Current Assets 1,509 (1,009) Accounts Payable and Accrued Liabilities 4,513 3,822 Federal Income Taxes Payable (9,570) (2,085) --------- --------- Net Cash Provided by Operating Activities 30,314 34,882 --------- --------- Cash Flows from Investing Activities: Purchase of Vessels and Other Property (28,688) (34,242) Additions to Deferred Charges (2,604) (6,073) Proceeds from Sale of Assets 97 - Proceeds from Short-Term Investments 1,799 - Investment in and Advances to Unconsolidated Entities - 13 Other Investing Activities 9,503 (14) --------- --------- Net Cash Used by Investing Activities (19,893) (40,316) --------- --------- Cash Flows from Financing Activities: Proceeds from Issuance of Debt and Capital Lease Obligations 44,628 39,096 Reduction of Debt and Capital Lease Obligations (39,646) (23,848) Additions to Deferred Financing Charges (1,465) - Common Stock Dividends Paid (835) (535) --------- --------- Net Cash Provided by Financing Activities 2,682 14,713 --------- --------- Net Increase in Cash and Cash Equivalents 13,103 9,279 Cash and Cash Equivalents at Beginning of Period 54,281 29,611 --------- --------- Cash and Cash Equivalents at End of Period $ 67,384 $ 38,890 ========= ========= The accompanying notes are an integral part of these statements.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS June 30, 1996 (Unaudited) Note 1. BASIS OF PREPARATION The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures required by generally accepted accounting principles for complete financial statements have been omitted. It is suggested that these interim statements be read in conjunction with the financial statements and notes thereto included in the Form 10-K of International Shipholding Corporation for the year ended December 31, 1995. Certain reclassifications have been made to prior period financial information in order to conform to current year presentations. Interim statements are subject to possible adjustments in connection with the annual audit of the Company's accounts for the full year 1996. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information shown have been included. The foregoing 1996 interim results are not necessarily indicative of the results of the operations for the full year 1996. The Company's policy is to consolidate all subsidiaries in which it holds greater than 50% voting interest. All significant intercompany accounts and transactions have been eliminated. The Company uses the cost method to account for investments in entities in which it holds less than 20% voting interest and in which the Company cannot exercise significant influence over operating and financial activities. The Company uses the equity method to account for investments in entities in which it holds a 20% to 50% voting interest. INTERNATIONAL SHIPHOLDING CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company's vessels are operated under a variety of charters, liner services and contracts. The nature of these arrangements is such that, without a material variation in gross voyage profits (total revenues less voyage expenses and vessel and barge depreciation), the revenues and expenses attributable to a vessel deployed under one type of charter or contract can differ substantially from those attributable to the same vessel if deployed under a different type of charter or contract. Accordingly, depending on the mix of charters or contracts in place during a particular accounting period, the Company's revenues and expenses can fluctuate substantially from one period to another even though the number of vessels deployed, the number of voyages completed, the amount of cargo carried and the gross voyage profit derived from the vessels remain relatively constant. As a result, fluctuations in voyage revenues and expenses are not necessarily indicative of trends in profitability, and management believes that gross voyage profit is a more appropriate measure of performance than revenues. Accordingly, the discussion below addresses variations in gross voyage profits rather than variations in revenues. RESULTS OF OPERATIONS Six Months Ended June 30, 1996 Compared to the Six Months Ended June 30, 1995 GROSS VOYAGE PROFIT Gross voyage profit increased 15.2% to $34.6 million in the first six months of 1996 as compared to $30.0 million in the same period of 1995. Gross voyage profit was favorably impacted by the commencement in February, 1996, of operations of the ENERGY ENTERPRISE, a U. S. Flag Coal Carrier under contract to a major U. S. utility company, and the early first quarter 1996 commencement of operations of two Special Purpose Vessels ("SPV's") under contract to provide transportation services to a major mining company in Indonesia. Improved freight rates in 1996 for the Company's LASH vessels employed in liner service between ports on the U. S. Gulf/U. S. Atlantic Coast and South Asia (Trade Routes 18 and 17) also positively impacted gross voyage profit. Partially offsetting these increases were lower charter rates on the Company's cape-size bulk carrier. Additionally, the second quarter results, on a consolidated basis, were negatively impacted by a damage claim made against our insurance subsidiary. The claim resulted from a propeller shaft accident sustained by one of the vessels operating in the Waterman service requiring an unscheduled drydock of approximately two months duration. The vessel has been fully repaired and returned to service about mid- July. Vessel and barge depreciation for the first six months of 1996 increased 30.4% to $16.0 million as compared to $12.3 million in the same period of 1995 due to the addition of the ENERGY ENTERPRISE and the two SPV's and related barges. OTHER INCOME AND EXPENSES Administrative and general expenses increased 5.67% to $13.4 million in the first six months of 1996 from $12.7 million in the comparable period of 1995 due to additional administrative services required to support new business. Interest expense increased 12.2% from $12.8 million in the first six months of 1995 to $14.4 million in the same period of 1996 primarily due to interest incurred on the financing of the ENERGY ENTERPRISE and the two SPV's and related barges. These increases were partially offset by reductions resulting from regularly scheduled payments on other outstanding debt. Investment income decreased from $1.5 million in the first six months of 1995 to $1.0 million in the same period of 1996 reflecting a reduction in the balance of invested funds. INCOME TAXES The Company provided $2.8 million for federal income taxes in the first six months of 1996 at the statutory rate of 35% as compared to $2.1 million in the first six months of 1995 at the same rate. Income of unconsolidated entities is shown net of applicable taxes. Second Quarter Ended June 30, 1996 Compared to Second Quarter Ended June 30, 1995 GROSS VOYAGE PROFIT Gross voyage profit increased 15.9% to $17.5 million in the second quarter of 1996 as compared to $15.1 million in the same period of 1995. As in the case of the six months comparison discussed above, gross voyage profit was favorably impacted in the second quarter by the commencement of operations of the ENERGY ENTERPRISE and the two SPV's. Improved freight rates for the Company's LASH vessels employed in liner service between ports on the U. S. Gulf/U. S. Atlantic Coast and South Asia (Trade Routes 18 and 17) also positively impacted gross voyage profit. Partially offsetting these increases were lower charter rates on the Company's cape-size bulk carrier and the aforementioned propulsion accident experienced by one of the Company's LASH vessels. Vessel and barge depreciation for the second quarter of 1996 increased 29.1% to $8.0 million as compared to $6.2 million in the same period of 1995 due to the addition of the ENERGY ENTERPRISE and the two SPV's and related barges. OTHER INCOME AND EXPENSES Administrative and general expenses increased 7.94% to $6.7 million in the second quarter of 1996 from $6.2 million in the comparable period of 1995 due to additional administrative services required to support new business. Interest expense increased 9.0% from $6.5 million in the second quarter of 1995 to $7.1 million in the same period of 1996 primarily due to interest incurred on the financing of the ENERGY ENTERPRISE and the two SPV's and related barges. These increases were partially offset by reductions resulting from regularly scheduled payments on other outstanding debt. Investment income decreased slightly from $740,000 in the second quarter of 1995 to $578,000 in the same period of 1996 reflecting a reduction in the balance of invested funds. INCOME TAXES The Company provided $1.5 million for federal income taxes in the second quarter of 1996 at the statutory rate of 35% as compared to $1.1 million in the second quarter of 1995 at the same rate. Income of unconsolidated entities is shown net of applicable taxes. LIQUIDITY AND CAPITAL RESOURCES The Company's working capital increased from $13.4 million at December 31, 1995, to $30.0 million at June 30, 1996, after provision for current maturities of long-term debt of $40.4 million and capital lease obligations of $2.0 million. Cash and cash equivalents increased during the first six months of 1996 by $13.1 million to a total of $67.4 million. Positive cash flows were achieved from operating activities in the first six months of 1996 in the amount of $30.0 million. The major source of cash from operations was net income, adjusted for non-cash provisions such as depreciation and amortization. Net cash used for investing activities amounted to $19.9 million during the first six months of 1996. Major capital investments included $10.8 million for upgrade work on the ENERGY ENTERPRISE to meet classification requirements and for preventative maintenance and $16.0 million for the conversion of two SPV's. Other uses of cash included the addition of $2.6 million in deferred vessel drydocking charges. Proceeds from investing activities included $8.1 million received from the payment of a long-term note receivable, the release of $5.8 million previously held in escrow as collateral for loans and $1.8 million from the maturity of short-term investments. Cash used for other investments included the placement of $4.6 million in escrow for future payments on long-term debt. Net cash provided by financing activities during the first six months of 1996 totaled $2.7 million. Proceeds from the issuance of debt obligations of $44.6 million consisted of $9.6 million received from a long-term loan associated with the acquisition and conversion of the two SPV's and $35.0 million drawn under the Company's lines of credit of which $20.0 million was outstanding as of June 30, 1996. Cash used for financing activities included $9.5 million for prepayment of a long-term debt, $15.0 million to repay amounts drawn under the lines of credit and $15.1 million for regularly scheduled payments on debt and capital lease obligations. Other uses of cash for financing activities included $1.5 million for deferred financing charges primarily related to the ENERGY ENTERPRISE and $835,000 to meet common stock dividend requirements. During early second quarter of 1996, the Company contracted to purchase a LASH vessel for approximately $8.5 million. Assuming all requirements of the purchase contract are met and the purchase is concluded, certain additional costs estimated to total $7.5 million will be incurred to bring the vessel up to the Company's normal operating standards. Additionally, 82 LASH barges will be purchased and refurbished to operate with this vessel at an estimated total cost of $2.0 million. It is anticipated that this vessel will deliver from the shipyard in the fourth quarter of 1996 and will begin operations in the Company's Trans- Atlantic service or one of its other services, depending upon demand, when the ship is ready for operation. Financing for 80% of the total purchase and upgrading costs of the aforementioned vessel and barges has been arranged through a medium-term loan with a commercial bank. To meet short-term requirements when fluctuations occur in working capital, the Company has available four lines of credit totaling $35.0 million of which $20.0 million was drawn at June 30, 1996 and fully repaid in July, 1996. The Company has not been notified that it is a potentially responsible party in connection with any environmental matters. At a regular meeting held July 17, 1996, the Board of Directors declared a quarterly dividend of $.0625 per common share payable on September 20, 1996, to shareholders of record on September 6, 1996. Part II - OTHER INFORMATION Item 2. Changes in Securities (a) An amendment of the Certificate of Incorporation to regulate the ownership of the capital stock of the Corporation by persons who are not citizens of the United States was approved by shareholders at the Company's Annual Meeting on April 17, 1996, and was filed with the State of Delaware May 24, 1996. See "Effect of Amendment on Stockholders" on page 14 of the Company's Definitive Proxy Statement dated March 12, 1996, filed pursuant to Section 14(a) of the Securities Exchange Act of 1934, and incorporated herein by reference. This amendment in its entirety was included as Appendix A of the aforementioned Proxy Statement. Item 4. Submission of Matters to a Vote of Security Holders The matters voted upon and results of the voting at the Company's annual meeting of shareholders held April 17, 1996, were reported in response to Item 4 of the Company's Form 10-Q filed with the Securities and Exchange Commission for the quarterly period ended March 31, 1996, and are incorporated herein by reference. Item 6. Exhibits and Reports on Form 8-K (a) EXHIBIT INDEX Exhibit Number Description -------------- ----------- Part I Exhibits: 27 Financial Data Schedule Part II Exhibits: 3 (a) Restated Certificate of Incorporation (b) By-Laws of the Registrant, as amended 99 Additional Exhibits (a) "Effect of Amendment on Stockholders" on page 14 of the Definitive Proxy Statement dated March 12, 1996, filed pursuant to Section 14(a) of the Securities and Exchange Act of 1934 incorporated herein by reference (b) Item 4 of Form 10-Q filed with the Securities and Exchange Commission for the quarterly period ended March 31, 1996, and incorporated herein by reference (b) No reports on Form 8-K have been filed for the three months ended June 30, 1996. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INTERNATIONAL SHIPHOLDING CORPORATION /S/ Gary L. Ferguson ------------------------------------------ Gary L. Ferguson Vice President and Chief Financial Officer Date August 5, 1996 ______________________________________ EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-31-1996 JUN-30-1996 67,384 2,727 51,303 236 10,370 136,117 689,525 258,442 648,353 106,135 307,779 0 0 6,756 163,407 648,353 0 193,010 0 171,796 14,376 0 14,376 7,929 2,996 4,933 0 0 0 4,933 0.74 0.74
EX-99 3 INTERNATIONAL SHIPHOLDING CORPORATION BY-LAWS ARTICLE I MEETINGS OF STOCKHOLDERS SECTION 1. ANNUAL MEETINGS. --Annual meetings of stockholders for the election of directors and for such other business as may be stated in the notice of the meeting, shall be held at the office of the Company in New Orleans, Louisiana, at 9:30 a.m. on the fourth Thursday in April, or at such place, either within or without the State of Delaware, and at such time and date as the Board of Directors, by resolution, shall determine and set forth in the notice of the meeting. SECTION 2. VOTING.--All elections for directors shall be decided by plurality vote; all other questions shall be decided by the vote of a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat, a quorum being present, except as otherwise provided by the Certificate of Incorporation or the laws of the State of Delaware. The vote for directors shall be by ballot. A complete list of the stockholders entitled to vote at the ensuing election, arranged in alphabetical order, with the address of each, and the number of shares held by each, shall be open to the examination of the stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting; either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. SECTION 3. QUORUM.--Except as otherwise required by law, by the Certificate of Incorporation or by these By-Laws, the presence, in person or by proxy, of stockholders holding a majority of the stock of the Company entitled to vote shall constitute a quorum at all-meetings of the stockholders. In case a quorum shall not be present at any meeting, a majority in interest of the stockholders entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite amount of stock entitled to vote shall be present, except as otherwise provided by the Certificate of Incorporation or the laws of the State of Delaware. SECTION 4. SPECIAL MEETINGS.--Special meetings of the stockholders may be called by the Chairman, President, or Secretary, or by resolution of the Board of Directors, and may be held at such time and in such place and for such purpose as is specified in the notice of meeting. SECTION 5. NOTICE OF MEETINGS.--Unless waived, written notice, stating the place, date and time of the meeting, and the general nature of the business to be considered, shall be given to each stockholder entitled to vote thereat at his address as it appears on the records of the Company, not less than ten nor more than fifty days before the day of the meeting, and such notice shall be deemed to be given at the time when the same shall be deposited, with postage thereon prepaid, in the United States mail. SECTION 6. ORDER OF BUSINESS.--The order of business at each meeting of the stockholders shall be determined by the chairman of such meeting, but such order of business at any meeting at which a quorum is present may be changed by the vote of a majority in voting interest of those present in person or by proxy at such meeting and entitled to vote thereat. ARTICLE II Directors SECTION 1. NUMBER AND TERM.--The number of directors shall consist of such number of persons, not less than three (3), as shall from time to time be fixed by resolution of the Board of Directors. SECTION 2. RESIGNATIONS.--Any director, member of a committee or other officer may resign at any time. Such resignation shall be made in writing, and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the Chairman, President, or Secretary. The acceptance of a resignation, shall be not be necessary to make it effective. SECTION 3. COMMITTEES.--The Board of Directors may, by resolution or resolutions passed by a majority of the whole Board, designate one or more committees, each committee to consist of two or more of the directors of the Company. Any such committee, to the extent provided in the resolution, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Company, and may authorize the seal of the Company to be affixed to all papers which may require it. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee; provided, however, that in the absence of disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent of disqualified member. SECTION 4. MEETINGS.--The newly elected directors may hold their first meeting for the purpose of organization and the transaction of business after the annual meeting of the stockholders, at such time and place as may be fixed by the Board. Regular meetings of the Board may be held without notice at such places and times as shall be determined from time to time by resolution of the Board. Special meetings of the Board may be called by the Chairman, the President, or the Secretary, and shall be called by them on the written request of any two directors. At least 12 hours notice (or at least 36 hours notice of given by mail) shall be given to each director unless waived and such meeting shall be held at such place as may be determined by the Board or as shall be stated in the notice of the meeting. SECTION 5. QUORUM AND MANNER OF ACTING.--A majority of the directors shall constitute a quorum for the transaction of business. The vote of a majority of a quorum of the Board shall be the act of the Board. If at any meeting of the Board there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum is obtained, and no further notice thereof need be given other than by announcement at the meeting which shall be so adjourned. SECTION 6. COMPENSATION.--The Board of Directors shall fix the amount of the fees or other compensation payable to each director who is not otherwise compensated as an officer or employee of the Company or of one of its subsidiaries. Nothing herein contained shall be construed to preclude any director from serving the Company in any other capacity as an officer, agent or otherwise, and receiving compensation therefor. SECTION 7. INDEMNIFICATION.--(a) Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative ("proceeding"), by reason of the fact that he, or a person for whom he is the legal representative, is or was a director or officer of the Company or any of its subsidiaries (including nominees and designees who have not yet taken office) or is or was serving at the request of the Company (including any person who has not been duly elected or appointed) as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans (the "Indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Company to the fullest extent authorized by the Delaware General Corporation Law ("GCL"), as presently existing or as it may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than the GCL permitted the Company to provide prior to such amendment), against any and all expenses, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties, amounts paid in connection with any arbitration or investigation and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith. Indemnitee's rights hereunder shall be contract rights and shall include the right to be paid by the Company for expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that the payment of such expenses incurred by an Indemnitee in advance of the final disposition of such proceeding, shall be made only upon delivery to the Company of an undertaking in a form satisfactory to counsel for the Company, by or on behalf of such Indemnitee, to repay all amounts so advanced if it should be ultimately determined that such Indemnitee is not entitled to be indemnified under this provision or otherwise. For purposes of this provision the term Company shall include any resulting or constitutent entities. (b) Nonexclusivity of Rights. The rights conferred herein on any person shall not be exclusive of any other right which such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, by-law, contract or other agreement, vote of stockholders or disinterested directors or otherwise. (c) Insurance. The Company may maintain insurance at its expense, to protect itself and any such director (including nominees and designees who have not yet taken office), officer, employee or agent of the Company or another corporation, partnership, joint venture, trust or other enterprise (including service with respect to employee benefit plans) against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under the GCL. ARTICLE III Officers SECTION 1. OFFICERS.--The officers of the Company shall be a Chairman, a President, a Vice President, or more than one Vice President, a Treasurer, and a Secretary, all of whom shall be elected by the Board of Directors and who shall hold office until their successors are elected and qualified. In addition, the Board of Directors may elect a Controller, and may appoint or may delegate the appointment of one or more Assistant Secretaries, Assistant Treasurers, Assistant Controllers, and such other officers and agents as they may deem proper. The officers shall be elected at the first meeting of the Board of Directors after each annual meeting. All of the said elected officers shall hold their offices at the pleasure of the Board. SECTION 2. CHAIRMAN.--The Chairman shall be the chief executive officer of the Company and shall have the general powers and duties of supervision and management usually vested in the office of the chief executive of a company. He shall preside at all meetings of the stockholders and of the Board of Directors, and shall have general supervision, direction and control of the business of the Company. Except as the Board of Directors shall authorize the execution thereof in some other manner, the Chairman may execute bonds, mortgages and any other contracts of any nature in behalf of the Company. SECTION 3. PRESIDENT.--The President shall be the chief operating officer of the Company. At the request of the Chairman, or in his absence or during his disability, the President shall perform the duties and exercise the functions of the Chairman. Except as the Board of Directors shall authorize the execution thereof in some other manner, the President may execute bonds, mortgages and any other contracts of any nature in behalf of the Company. SECTION 4. VICE PRESIDENT.--In the event of death, absence or inability of the President to perform any duties imposed upon him by these By-Laws and the order of the Board of Directors, the Vice President, or if there be more than one, the Vice Presidents in the order of seniority, may exercise his powers and perform his duties subject to the control of the Chairman and the Board of Directors. Except as the Board of Directors shall authorize the execution thereof in some other manner, any Vice President may execute bonds, mortgages and any other contracts of any nature in behalf of the Company. SECTION 5. SECRETARY.--The Secretary shall give, or cause to be given, notice of all meetings of stockholders and directors, and all other notices required by law or by these By-Laws, and in case of his absence or refusal or neglect so to do, any such notice may be given by any person thereunto directed by the Chairman, the President, or by the directors, upon whose requisition the meeting is called as provided in these By-Laws. He shall record all the proceedings of the meetings of the Company and of the directors in a book to be kept for that purpose, and shall perform such other duties as may be assigned to him by the directors or the Chairman. He shall have the custody of the seal of the Company and shall affix the same to all instruments requiring it, when authorized by the directors or the Chairman, and attest the same. SECTION 6. TREASURER.--The Treasurer shall have the custody of the Company funds and securities and shall keep full and accurate account of receipts and disbursements in books belonging to the Company. He shall deposit all monies and other valuables in the name and to the credit of the Company in such depositaries as may be designated by the Board of Directors. The treasurer shall disburse the funds of the Company as may be ordered by the Board of Directors, the Chairman, or the President, taking proper vouchers for such disbursements. If required by the Board of Directors, he shall give the Company a bond for the faithful discharge of his duties in such amount and with such surety as the Board shall prescribe. The Treasurer shall sign all checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Company in such manner as shall be determined from time to time by resolution of the Board of Directors; provided, however, that the Directors shall have power by resolution to delegate any of the duties or powers of the Treasurer to other officers. SECTION 7. CONTROLLER.--The Controller shall be in charge of all Company accounting books, records, and procedures, shall perform internal audits, shall prepare budgets, financial statements and reports for the Chairman, the President, and the Board of Directors. He shall keep his accounts in the name of the Company and shall render such reports as may be required by the Board of Directors, the Chairman, or the President. The Controller shall perform such other duties as may, from time to time, be assigned to him by the Chairman or by the Board of Directors; and in the event the office of the Controller is vacant, such duties shall be performed by such person as may be designated by the Chairman. SECTION 8. ASSISTANT SECRETARIES.--Assistant Secretaries, if any shall be appointed, shall, during the absence or disability of the Secretary, perform all the duties of the Secretary and shall have such other powers and shall perform such other duties as shall be assigned to them. SECTION 9. ASSISTANT TREASURERS.--Assistant Treasurers, if any shall be appointed, shall, during the absence or disability of the Treasurer, perform all the duties of the Treasurer and shall have such other power and shall perform such other duties as shall be assigned to them. SECTION 10. ASSISTANT CONTROLLERS.--Assistant Controllers, if any shall be appointed, shall, during the absence or disability of the Controller, perform all the duties of the Controller and shall have such other powers and shall perform such other duties as shall be assigned to them. ARTICLE IV Miscellaneous SECTION 1. STOCKHOLDERS RECORD DATE.--In order that the Company may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to Company action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that if the adjournment is for more than 30 days or if the Board of Directors fixes a new record date for the adjourned meeting, a notice thereof shall be given to each stockholder of record entitled to vote at the meeting. SECTION 2. FISCAL YEAR.--The fiscal year of the Company shall be the calendar year, unless otherwise determined by resolution of the Board of Directors. ARTICLE V Amendments These By-Laws may be altered or repealed and By-Laws may be made by the affirmative vote of a majority of the Board of Directors, at any regular meeting of the Board of Directors, or at any special meeting of the Board of Directors, if notice of the proposed alteration or repeal, or By-Law or By- Laws to be made, be contained in the notice of such special meeting. EX-99 4 RESTATED CERTIFICATE OF INCORPORATION OF INTERNATIONAL SHIPHOLDING CORPORATION We, the undersigned, Erik F. Johnsen and George Denegre, being respectively the President and Secretary of International Shipholding Corporation (the "Company"), a corporation organized and existing under the laws of the State of Delaware, do hereby certify as follows: 1. The name of the Company is International Shipholding Corporation. 2. The Company's original Certificate of Incorporation was filed with the Secretary of State of Delaware on October 20, 1978. 3. Pursuant to Section 242 of the Delaware General Corporation Law (the "DGCL"), an amendment to the Company's Certificate of Incorporation to add a new Article V thereto to provide for limitations on ownership of the Company's capital stock by non-U.S. citizens has been duly adopted by resolution of the Board of Directors of the Company and approved by the holders of the Company's Common Stock entitled to so vote on April 17, 1996. 4. Pursuant to Section 245 of the DGCL, this Restated Certificate of Incorporation was duly adopted by the Board of Directors of the Company and restates and integrates the provisions of the Company's Certificate of Incorporation as theretofore amended or supplemented, provides for the deletion of provisions intentionally omitted in reliance upon Section 245(c) of the DGCL, and also further amends the Company's Certificate of Incorporation by adding a new Article V thereto. 5. As so further amended, the text of the Restated Certificate of Incorporation of the Company shall read in its entirety as follows: ARTICLE I The name of the Company is INTERNATIONAL SHIPHOLDING CORPORATION. ARTICLE II The registered office of the Company is to be located at 1209 Orange Street in the City of Wilmington, County of New Castle, State of Delaware. The name of its registered agent at such address is The Corporation Trust Company. ARTICLE III The nature of the business or purposes to be conducted or promoted is: To carry on and conduct any and every kind of manufacturing, distribution and service business; to manufacture, process, fabricate, rebuild, service, purchase or otherwise acquire, to design, invent or develop, to import or export, and to distribute, lease, sell, assign or otherwise dispose of and generally deal in and with raw materials, products, goods, wares, merchandise and real and personal property of every kind and character; and to provide services of every kind and character. To conduct any lawful business, to exercise any lawful purpose and power, and to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. In general, to possess and exercise all the powers and privileges granted by the General Corporation Law of Delaware or by any other law of Delaware or by this Certificate of Incorporation, together with any powers incidental thereto, so far as such powers and privileges are necessary or convenient to the conduct, promotion or attainment of the business or purposes of the Company. ARTICLE IV A. General. 1. The total number of shares of stock that the Company shall have authority to issue is eleven million shares, of which ten million shall be common stock with a par value of $1.00 per share (the "Common Stock") and one million shall be preferred stock with a par value of $1.00 per share (the "Preferred Stock"). 2. Shares of stock of any class now or hereafter authorized may be issued by the Company from time to time for such consideration (not less than the par value thereof if there be a par value) as shall be fixed from time to time by the Board of Directors of the Company. Any and all shares of stock so issued for which the consideration so fixed has been paid or delivered to the Company shall be declared and taken to be fully paid stock and shall not be liable to any further call or assessment thereon, and the holders of such shares shall not be liable for any further payments in respect of such shares. Subscriptions to, or the purchase price of, shares of stock of the Company may be paid for, wholly or partly, by cash, by labor done, by personal property, or by real property or leases thereof. In the absence of actual fraud in the transaction, the judgment of the directors as to the value of such labor, personal property, real estate or leases thereof shall be conclusive. 3. Any and all right, title, interest and claim in or to any dividends declared by the Company, whether in cash, stock or otherwise, which are unclaimed by the stockholder entitled thereto for a period of six years after the close of business on the payment date, shall be and be deemed to be extinguished and abandoned; and such unclaimed dividends in the possession of the Company, its transfer agents or other agents or depositaries, shall at such time become the absolute property of the Company, free and clear of any and all claims of any person or entity whatsoever. 4. The designation and the powers, preferences, rights, qualifications, limitations and restrictions applicable to the Common Stock and the Preferred Stock shall be, or shall be determined, as hereinafter set forth. B. Common Stock. 1. Dividend Rights. Subject to the provisions of law and the preferences of the Preferred Stock and of any other stock ranking prior to Common Stock as to dividends, the holders of Common Stock will be entitled to receive dividends when, as and if declared by the Board of Directors. 2. Voting Rights. Except as otherwise provided by law or pursuant to this Article IV, the holders of Common Stock shall be entitled to one vote, in person or by proxy, for each share held on each matter submitted to a vote of the shareholders of the Company. Except as otherwise provided by law, by the Certificate of Incorporation or by resolution or resolutions of the Board of Directors providing for the issue of any series of Preferred Stock, the holders of Common Stock will have sole voting power. 3. Liquidation Rights. In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, after payment or provision for payment of the debts and other liabilities of the Company and the preferential amounts to which the holders of any stock ranking prior to the Common Stock in the distribu tion of assets are entitled upon liquidation, the holders of the Common Stock and the holders of any other stock ranking on a parity with the Common Stock in the distribution of assets upon liquidation will be entitled to share in the remaining assets of the Company according to their respective interests. C. Preferred Stock. 1. Authority of the Board of Directors to Issue in Series. Preferred Stock may be issued from time to time in one or more series. All shares of any one series of Preferred Stock shall be identical except as to the dates of issue and the dates from which dividends on shares of the series issued on different dates will cumulate, if cumulative. Authority is hereby expressly granted to the Board of Directors to authorize the issue of one or more series of Preferred Stock, and to fix by resolution or resolutions providing for the issue of each such series the voting powers, designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, of such series, to the full extent now or hereafter permitted by law, including, but not limited to, the following: (a) The number of shares of such series, which may subsequently be increased, except as otherwise provided by the resolution or resolutions of the Board of Directors providing for the issue of such series, or decreased, to a number not less than the number of shares then outstanding, by resolution or resolutions of the Board of Directors, and the distinctive designation thereof; (b) The dividend rights of such series, the preferences, if any, over any other class or series of stock, or of any other class or series of stock over such se ries, as to dividends, the extent, if any, to which shares of such series will be entitled to participate in dividends with shares of any other series or class of stock, whether dividends on shares of such series will be fully, partially or conditionally cumulative, or a combination thereof, and any limitations, restrictions or conditions on the payment of such dividends; (c) The rights of such series, and the preferences, if any, over any other class or series of stock, or of any other class or series of stock over such se ries, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company and the extent, if any, to which shares of any such series will be entitled to participate in such event with any other series or class of stock; (d) The time or times during which, the price or prices at which, and the terms and conditions on which the shares of such series may be redeemed; (e) The terms of any purchase, retirement or sinking funds which may be provided for the shares of such series; (f) The terms and conditions, if any, upon which the shares of such series will be convertible into or exchangeable for shares of any other series, class or classes, or any other securities; (g) The voting powers, if any, of such series. 2. Limitation on Dividends. No holders of any series of Preferred Stock will be entitled to receive any dividends thereon other than those specifically provided for by the Certificate of Incorporation or the resolution or resolutions of the Board of Directors providing for the issue of such series of Preferred Stock, nor will any accu mulated dividends on Preferred Stock bear any interest. 3. Limitation on Liquidating Distributions. In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holders of Preferred Stock of each series will be entitled to receive only such amount or amounts as will have been fixed by the Certificate of Incorporation or by the resolution or resolutions of the Board of Directors providing for the issue of such series. A consolidation or merger of the Company with or into one or more other corporations or a sale, lease or exchange of all or substantially all of the assets of the Company will not be deemed to be a voluntary or involuntary liquidation, dissolution or winding up, within the meaning of this Article IV. ARTICLE V A. Purpose. The provisions of this Article V are intended to assure that the Company remains in continuous compliance with the citizenship requirements of the Merchant Marine Act, 1920, as amended, the Merchant Marine Act, 1936, as amended, the Shipping Act, 1916, as amended, and the regulations promulgated thereunder, as such laws and regulations are amended from time to time (collectively, the "Maritime Laws"). It is the policy of the Company that Non- Citizens should not Beneficially Own, individually or in the aggregate, any shares of the Company's Capital Stock in excess of the Permitted Amount. If the Board of Directors of the Company should conclude in its sole discretion at any time that Non-Citizens have become, or are about to become, the Beneficial Owners, individually or in the aggregate, of shares of Capital Stock in excess of the Permitted Amount, the Board of Directors may by resolution duly adopted declare that any or all of the provisions of subparagraphs C, D and E of this Article V shall apply. B. Definitions. For purposes of this Article V, the following terms shall have the meanings specified below: 1. A Person shall be deemed to be the "Beneficial Owner" of, or to "Beneficially Own," shares of Capital Stock to the extent such Person would be deemed to be the beneficial owner thereof pursuant to Rule 13d-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as such rule may be amended from time to time. 2. "Capital Stock" shall mean any class or series of capital stock of the Company other than any class or series of capital stock of the Company that is permitted by the Maritime Administration of the United States Department of Transportation ("MARAD") to be excluded from the determination of whether the Company is in compliance with the citizenship requirements of the Maritime Laws. 3. "Citizen" shall mean: (a) any individual who is a citizen of the United States, by birth, naturalization or as otherwise authorized by law; (b) any corporation (i) that is organized under the laws of the United States or of a state, territory, district or possession thereof, (ii) not less than 75% of the capital stock of which is Beneficially Owned by Persons who are Citizens, (iii) whose president or chief executive officer, chairman of the board of directors and all officers authorized to act in the absence or disability of such Persons are Citizens and (iv) of which more than 50% of the number of its directors necessary to constitute a quorum are Citizens; (c) any partnership (i) that is organized under the laws of the United States or of a state, territory, district or possession thereof, (ii) all general partners of which are Citizens and (iii) not less than a 75% interest in which is Beneficially Owned by Persons who are Citizens; (d) any association or limited liability company (i) that is organized under the laws of the United States or of a state, territory, district or possession thereof, (ii) whose president or chief executive officer (or the Person serving in an equivalent position), chairman of the board of directors (or equivalent position) and all Persons authorized to act in the absence or disability of such Persons are Citizens, (iii) not less than a 75% interest in which or 75% of the voting power of which is Beneficially Owned by Citizens and (iv) of which more than 50% of the number of its directors (or the Persons serving in equivalent positions) necessary to constitute a quorum are Citizens; (e) any joint venture (if not an association, corporation or partnership) (i) that is organized under the laws of the United States or of a state, territory, district or possession thereof and (ii) all co-venturers of which are Citizens; and (f) any trust (i) that is domiciled in and existing under the laws of the United States or of a state, territory, district or possession thereof, (ii) the trustee of which is a Citizen and (iii) of which not less than a 75% of the beneficial interests in both income and principal are held for the benefit of Citizens. 4. "Non-Citizen" shall mean any Person other than a Citizen. 5. "Permitted Amount" shall mean shares of Capital Stock that, individually or in the aggregate (a) have Voting Power not in excess of 23% of Total Voting Power or (b) constitute not more than 23% of the total number of the issued and outstanding shares of Capital Stock; provided that, if the Maritime Laws are amended to change the amount of Capital Stock that a Non-Citizen may own or have the power to vote, then the Permitted Amount shall be changed to a percentage that is two percentage points less than the percentage that would cause the Company to be no longer qualified under the Maritime Laws, after giving effect to such amendment, as a Citizen qualified to (i) engage in coastwise trade, (ii) participate in MARAD's Title XI or comparable financing programs, or (iii) participate in operating differential subsidies or similar programs. 6. "Person" shall mean an individual, partnership, corporation, limited liability company, trust, joint venture or other entity. 7. "Total Voting Power" shall mean the total number of votes that may be cast by all outstanding shares of Capital Stock having Voting Power. 8. "Voting Power" shall mean the power to vote with respect to the election of the Company's directors. C. Restrictions on Transfer. 1. Any transfer, or attempted or purported transfer, of any shares of the Capital Stock of the Company or any interest therein or right thereof, that would result in the Beneficial Ownership by Non-Citizens, individually or in the aggregate, of shares of Capital Stock in excess of the Permitted Amount will, until such excess no longer exists, be void and ineffective as against the Company and the Company will not recognize, with respect to those shares that caused the Permitted Amount to be exceeded, the purported transferee as a stockholder of the Company for any purpose other than the transfer by the purported transferee of such excess to a person who is not a Non-Citizen or to the extent necessary to effect any other remedy available to the Company under this Article V. 2. The Board of Directors is hereby authorized to effect any and all measures necessary or desirable (consistent with applicable law and the provisions of this Certificate of Incorporation) to fulfill the purpose and implement the provisions of this Article V, including without limitation, obtaining, as a condition to recording the transfer of shares on the stock records of the Company, affidavits or other proof as to the citizenship of existing or prospective stockholders on whose behalf shares of the Capital Stock of the Company or any interest therein or right thereof are or are to be held, or establishing and maintaining a dual stock certificate system under which different forms of stock certificates representing outstanding shares of the Capital Stock of the Company are issued to Citizens or Non-Citizens. D. Suspension of Voting, Dividend and Distribution Rights with Respect to Excess Shares. If any shares of Capital Stock in excess of the Permitted Amount are Beneficially Owned by Non-Citizens, individually or in the aggregate, any such excess shares determined in accordance with this subparagraph D (the "Excess Shares"), shall, until such excess no longer exists, not be entitled to (1) receive any dividends or distributions of assets declared payable or paid to the holders of the Capital Stock of the Company during such period or (2) vote with respect to any matter submitted to a vote of the stockholders of the Company, and such Excess Shares shall not be deemed to be outstanding for purposes of determining the vote required on any matter properly submitted to a vote of the stockholders of the Company. At such time as the Permitted Amount is no longer exceeded, full voting rights shall be restored to any shares previously deemed to be Excess Shares, and any dividends or distributions with respect thereto that have been withheld shall be due and paid to the holders of such shares. If the number of shares of Capital Stock Beneficially Owned by Non- Citizens is in excess of the Permitted Amount, the shares deemed to be Excess Shares for purposes of this Article V will be those shares Beneficially Owned by Non-Citizens that the Board of Directors determines became so Beneficially Owned most recently, and such determination shall be conclusive. E. Redemption of Excess Shares. The Company shall have the power, but not the obligation, to redeem Excess Shares subject to the following terms and conditions: 1. The per share redemption price (the "Redemption Price") to be paid for the Excess Shares to be redeemed shall be the sum of (a) the average closing sales price of the Capital Stock and (b) any dividend or distribution declared with respect to such shares prior to the date such shares are called for redemption hereunder but which has been withheld by the Company pursuant to subparagraph D. As used herein, the term "average closing sales price" shall mean the average of the closing sales prices of the Capital Stock on the New York Stock Exchange during the 10 trading days immediately prior to the date the notice of redemption is given; except that, if the Capital Stock is not traded on the New York Stock Exchange then the closing sales prices of the Capital Stock on any other national securities exchange selected by the Company on which such Capital Stock is listed, and if not listed on any national securities exchange, the closing sales prices as quoted on the Nasdaq National Market, and if not so quoted, the mean between the representative bid and ask prices as quoted by Nasdaq or another generally recognized reporting system, on each of such 10 trading days, and if not so quoted, as may be determined in good faith by the Board of Directors. 2. The Redemption Price may be paid in cash or by delivery of a promissory note of the Company, at the election of the Company. Any such promissory note shall have a maturity of not more than 10 years from the date of issuance and shall bear interest at the rate equal to the then current coupon rate of a 10-year Treasury note as such rate is published in The Wall Street Journal or comparable publication. 3. A notice of redemption shall be given by first class mail, postage prepaid, mailed not less than 10 days prior to the redemption date to each holder of record of the shares to be redeemed, at such holder's address as the same appears on the stock records of the Company. Each such notice shall state (a) the redemption date, (b) the number of shares of Capital Stock to be redeemed from such holder, (c) the Redemption Price, and the manner of payment thereof, (d) the place where certificates for such shares are to be surrendered for payment of the Redemption Price, and (e) that dividends on the shares to be redeemed will cease to accrue on such redemption date. 4. From and after the redemption date, dividends on the shares of Capital Stock called for redemption shall cease to accrue and such shares shall no longer be deemed to be outstanding and all rights of the holders thereof as stockholders of the Company (except the right to receive from the Company the Redemption Price) shall cease. Upon surrender of the certificates for any shares so redeemed in accordance with the requirements of the notice of redemption (properly endorsed or assigned for transfer if the notice shall so state), such shares shall be redeemed by the Company at the Redemption Price. In case fewer than all shares represented by any such certificate are redeemed, a new certificate shall be issued representing the shares not redeemed without cost to the holder thereof. 5. Such other terms and conditions as the Board of Directors may reasonably determine. ARTICLE VI In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized at any regular or special meeting thereof, without stockholder approval: 1. To make By-laws for the Company, and to amend, alter or repeal any By-laws. 2. 2. To authorize and cause to be executed mortgages and liens upon the real and personal property of the Company. 3. To authorize the borrowing of money; the issuance of bonds, notes, debentures and other obligations or evidences of indebtedness of the Company, secured or unsecured, and the inclusion of provisions as to redeemability and convertibility into shares of stock of the Company or otherwise. 4. To authorize the purchase or other acquisition of shares of stock of the Company or any of its bonds, debentures, notes or other securities or evidences of indebtedness. 5. To determine from time to time whether and to what extent, and at what times and places, and under what conditions and regulations, the accounts and books of the Company, or any of them, shall be open to the inspection of the stockholders; and no stockholder shall have any right to inspect any account book or document of the Company, except as conferred by statute or authorized by the Board of Directors, or by resolution of the stockholders. 6. To set apart out of the funds of the Company available for dividends a reserve or reserves for any proper purposes and to abolish any such reserve in the manner in which it was created. 7. To designate one or more committees, each committee to consist of two or more directors of the Company. Any such committee, to the extent provided in the resolution or in the By- laws of the Company, shall have and may exercise the power of the Board of Directors in the management of the business and affairs of the Company, and may authorize the seal of the Company to be affixed to all papers which may require it. The Board of Directors may designate one or more of the directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee; provided, however, the By-laws may provide that in the absence or disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. 8. To provide indemnification to the full extent permitted by Delaware law. ARTICLE VII The number of directors of the Company shall be fixed from time to time by, or in the manner provided in, its By-laws and may be increased or decreased as therein provided. Election of directors need not be by ballot unless the By-laws so provide. The directors of the Company shall be elected annually by the stockholders and shall hold office until their respective successors are duly elected and qualified. The By-laws may prescribe the number of directors necessary to constitute a quorum. ARTICLE VIII Meetings of stockholders may be held within or without the State of Delaware, as the By-laws may provide. The books of the Company may be kept (subject to any provisions contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-laws of the Company. Any corporate action upon which a vote of stockholders is required or permitted may be taken without a meeting and vote of stockholders with the written consent of stockholders having not less than a majority of the total number of votes entitled to be cast upon the action, or such larger percentage required by statute, if a meeting were held. Prompt notice shall be given to all stockholders of the taking of corporate action without a meeting by less than unanimous written consent. ARTICLE IX The Company reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorpora tion, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. ARTICLE X No director shall be personally liable to the Company or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director, except (i) for breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this Article X shall apply to or have any effect on the liability or alleged liability of any director of the Company for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal. ____________________________________________ 6. This Restated Certificate of Incorporation shall be effective upon its filing with the Secretary of State of Delaware pursuant to Section 103 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, International Shipholding Corporation has caused this certificate to be signed by Erik F. Johnsen, its President and attested by George Denegre, its Secretary, this 17th day of April, 1996. INTERNATIONAL SHIPHOLDING CORPORATION BY:/S/ Erik F. Johnsen, President ______________________________________ Erik F. Johnsen, President CORPORATE SEAL ATTEST: BY: /S/George Denegre, Secretary _________________________________________ George Denegre, Secretary -----END PRIVACY-ENHANCED MESSAGE-----