DEF 14A 1 nc10023321x1_def14a.htm DEF 14A

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant
Filed by a party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to §240.14a-12
INTERNATIONAL SEAWAYS, INC.
(Name of Registrant as Specified in Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
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Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
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INTERNATIONAL SEAWAYS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 2, 2021

To the Stockholders of International Seaways, Inc.:
We cordially invite you to attend the Annual Meeting of Stockholders (the “Annual Meeting”) of International Seaways, Inc. (the “Company” or “INSW”), which will be held “virtually” via live webcast at www.virtualshareholdermeeting.com/INSW2021, on Wednesday, June 2, 2021, at 2:00 p.m. Eastern time. You will be able to attend the meeting online, vote your shares and submit questions during the meeting by visiting the website listed above. In order to join the Annual Meeting, you will need to have the 16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials (or in other communications you may have received from the broker, bank or other nominee in whose name your shares are held). The Annual Meeting will be held online only, and will be held for the purposes of:
(1)
Electing the eight directors named in the accompanying Proxy Statement, each to serve until the annual meeting of the Company to be held in 2022;
(2)
Ratifying the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2021; and
(3)
Approving, by advisory vote, the compensation of the Named Executive Officers for 2020 as described in the accompanying proxy statement.
We will also act on any other business that is properly raised.
Only stockholders of record at the close of business on April 19, 2021 are entitled to notice of, and to vote at, the Annual Meeting.
Your vote and that your shares be represented at the meeting are both very important. We urge you to vote as soon as possible by telephone, over the Internet or by marking, signing and returning by mail your proxy or voting instruction card, even if you plan to attend the virtual Annual Meeting. If you attend the virtual meeting and wish to vote, you may withdraw your proxy and vote at that time. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder. Your prompt consideration is greatly appreciated.
The Company’s Proxy Statement is attached. Financial and other information concerning the Company is contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”). The Company is sending you the full set of proxy materials for the Annual Meeting – this Proxy Statement, the 2020 Annual Report and a proxy card for the Annual Meeting.
 
By order of the Board of Directors,
 
JAMES D. SMALL III
 
 
 
Chief Administrative Officer, Senior Vice President,
 
General Counsel and Secretary
 
 
New York, New York
 
April 23, 2021
 

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INTERNATIONAL SEAWAYS, INC.
600 Third Avenue, 39th Floor
New York, New York 10016
PROXY STATEMENT
WHO WE ARE
International Seaways, Inc. (NYSE: INSW) (the “Company” or “INSW”) is one of the world’s largest tanker companies, providing energy transportation services for crude oil and petroleum products in international markets. The Company owns and operates a fleet of 36 vessels, including 34 conventional tankers – comprising 11 VLCCs, two Suezmaxes, four Aframaxes/LR2s, 13 Panamaxes/LR1s and four MR tankers – and, through joint ventures, ownership interests in two floating storage and offloading service vessels. In addition, in March 2021 the Company signed shipbuilding contracts for the construction of three dual fuel LNG VLCCs for delivery during the first quarter of 2023 (as more fully described below under “2020 and First Quarter of 2021 in Review”).
Signing of Merger Agreement with Diamond S Shipping Inc.
Since becoming a stand-alone public company in December 2016, the Company has been committed to enhancing its earnings leverage and financial strength, unlocking value for shareholders, and implementing a disciplined and accretive capital allocation strategy. As part of that commitment, on March 30, 2021, the Company and Diamond S Shipping Inc. (NYSE: DSSI) (“Diamond S”) agreed to merge in a stock-for-stock transaction, pursuant to which INSW stockholders and Diamond S stockholders will own approximately 55.75% and 44.25% of the combined company, respectively, on a fully diluted basis. The merger would create the second largest U.S.-listed tanker company by vessel count and the third largest by deadweight. On a proforma basis the combined company would have 100 vessels, shipping revenues of over $1 billion, over 2,200 employees, and an enterprise value of approximately $2 billion. Prior to the closing of the merger, the Company is permitted to pay a special dividend to its stockholders in an aggregate amount equal to $31,500,000, which special dividend will not result in a change to the exchange ratio.
The completion of the merger is subject to the satisfaction or waiver of certain conditions, including the approval of the merger agreement by a majority of all outstanding shares of Diamond S common stock and approval of the issuance of the newly issued INSW shares by a majority of INSW shares entitled to vote thereon. The relevant Diamond S and INSW shareholder meetings will take place following the Annual Meeting. Completion of the merger is also subject to regulatory approvals and other customary closing conditions.
Assuming the merger is completed as planned, the Company will remain listed on the NYSE under the symbol “INSW” and the INSW shares that are issued and outstanding prior to the closing will remain issued and outstanding following the closing. The Board of Directors of the combined company will be comprised of seven representatives of INSW and three representatives of Diamond S, with Doug Wheat, Lois Zabrocky and Jeffrey Pribor continuing to serve as Chairman of the Board, Chief Executive Officer and Chief Financial Officer of INSW, respectively.
For further information about the merger, please refer to the related Registration Statement on Form S-4 that INSW will file with the Securities and Exchange Commission and the Form 8-K/A filed by the Company on April 6, 2021.
2020 and First Quarter of 2021 in Review
Our goals for 2020 were to (i) execute our business strategy in a manner consistent with our Environmental, Social and Governance (“ESG”) principles, (ii) refinance our high interest debt obligations, (iii) continue to build on our track record as a disciplined capital allocator, (iv) maximize our
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fleet’s earnings potential through opportunistic charter-ins, charter-outs, sales and purchases of vessels and investments in Exhaust Gas Cleaning Systems (“scrubbers”) on our modern VLCCs and (v) execute transactions that would ultimately unlock the value of our shares to investors. During 2020, we successfully addressed each of these goals:
Executed loan agreements in January 2020 with several bank lenders with respect to senior credit facilities aggregating $390 million of which $370 million of proceeds was used to repay existing indebtedness. The combined effect of such refinancing, which lowered our average interest rates on the refinanced portion of our debt by 350 basis points and our overall average interest rates by 200 basis points, and both lower LIBOR rates during 2020 and lower average debt outstanding during 2020, reduced our annual cash interest expense by approximately $25.0 million;
Used available cash on hand to pay off $20 million of outstanding debt in March 2020 and an additional $40 million of outstanding debt in August 2020, further reducing our interest costs;
Initiated a regular quarterly dividend of $0.06 per share and paid dividends aggregating $6.8 million to our stockholders in 2020;
Repurchased and retired approximately 1.4 million shares of common stock in open-market purchases at a total cost of $30.0 million;
Acquired a 2009–built LR1, which we then deployed in our market-leading Panamax International pool;
Sold a 2002-built Aframax, a 2001-built Aframax, a 2003-built VLCC, and a 2002-built VLCC for aggregate net proceeds of approximately $73 million;
Opportunistically locked in four of our VLCCs and our LR2 on time charters for periods ranging from seven months to 36 months with major oil producing and trading companies during a period of time at which charter rates were significantly above historical averages;
Completed scrubber installations on seven of our 10 modern VLCCs;
Issued our inaugural ESG report; and
Signed a 10-year extension on each of our existing service contracts between our FSO Joint Venture and North Oil Company. Based on our 50% ownership interest in the two joint ventures, the 10-year contract extension extensions are expected to generate in excess of $322 million in contract revenues for the Company.
Continuing to pursue the foregoing goals in the first quarter of 2021, the Company signed shipbuilding contracts with the South Korean shipyard Daewoo Shipbuilding and Marine Engineering Limited in March 2021 for the construction of three dual fuel LNG VLCCs which are expected to deliver in the first quarter of 2023, subject to certain conditions customary to similar transactions. Upon delivery to the Company the three vessels will be employed on seven year time charters with oil major – Shell. The total construction cost for the three vessels will be approximately $290 million, which will be paid through a combination of long-term financing and available liquidity. The Company expects the vessels to be well suited to future environmental regulation throughout their life as they meet both current IMO Energy Efficiency Design Index (“EEDI”) and also exceed 2025 Phase III EEDI targets by about eight percent.
2020 Financial Performance Highlights
Shipping revenues and TCE Revenues achieved in 2020 were $421.6 million and $402.0 million, respectively, of which approximately 79%, respectively, were generated from our Crude Tankers segment. Income from vessel operations decreased by $15.3 million to $39.9 million in 2020, from $55.2 million in 2019, primarily driven by $103.0 million of vessel impairment charges recognized during 2020. We achieved Adjusted EBITDA of $220.1 million in 2020 compared to $164.7 million in 2019, a significant increase that was principally driven by high rates in the first half of 2020 caused by market disruptions. “Adjusted EBITDA” represents net loss before interest expense, income taxes and depreciation and amortization expense adjusted for the impact of certain items that INSW does not consider indicative of our ongoing operating performance, as disclosed in Item 6, “Selected Financial Data” in the Company’s
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2020 Annual Report. We have included a reconciliation of Adjusted EBITDA to net loss in the 2020 Annual Report. INSW’s total cash (including restricted cash) as of December 31, 2020 was $215.7 million compared to $150.2 million as of December 31, 2019. We made capital investments totaling $76.2 million during 2020 for vessel purchases, vessel improvements and drydocking, generated $216.1 million in cash from operations, paid cash dividends of $6.8 million and repurchased shares of our Common Stock at a total cost of $30.0 million.
Environmental, Social and Governance
INSW is committed to working to address Environmental, Social and Governance (“ESG”) issues as a part of our core culture. Accordingly, we strive to meet, and when possible and appropriate, exceed minimum compliance levels for all applicable rules and regulations governing the maritime industry. In 2020, we published our first ESG report, which outlined our ESG metrics and performance in 2019 as well as our vision and goal for the future. Our core philosophy is to transport energy safely and efficiently. The ESG report may be accessed at our website https://www.intlseas.com and clicking on ESG Report on the right side of the page. The ESG report is not incorporated by reference in any filings with the SEC made pursuant to the Securities Act of 1933, as amended, or the Securities Exchange of 1934, as amended, including this Proxy Statement. Our forthcoming ESG report will describe in detail the ESG initiatives we undertook in 2020.
We are focused on various matters in connection with ESG issues:
Environment. Due to the nature of our business, environmental and climate change-related risks are key considerations for us. We recognize that greenhouse gas (“GHG”) emissions, which are largely caused by burning fossil fuels, contribute to the warming of the global climate system. Our industry, which is heavily dependent on the burning of fossil fuels, faces the dual challenge of reducing its carbon footprint by transitioning to the use of low-carbon fuels while extending the economic and social benefits of delivering energy to consumers across the globe. We welcome and support efforts to increase transparency and to promote investors’ understanding of how we and our industry peers are addressing the climate change-related risks and opportunities particular to our industry. In 2020, we published our inaugural ESG report. In addition, we are working to meet the carbon efficiency targets included in our sustainability-linked loan and to establish other appropriate metrics by which to measure our performance and drive improvement. The Company’s governance, strategy, risk management and performance monitoring efforts in this area are evolving and will continue to do so over time.
Social. We operate a well-maintained fleet staffed by experienced officers and crews, and we believe that our seafarers are as crucial to our success as the team ashore that supports them. Through our technical and commercial management partners and our own in-house expertise, we have developed a global network to support our seafarers while delivering shipping services safely and effectively to our customers. Our philosophy is one of continual improvement throughout ship and shoreside operations, and we are committed to providing our mariners a safe, high quality place to work in an environment where they can thrive professionally. We maintain a robust safety and compliance culture that reflects the leadership and commitment displayed every day by our senior officers and shoreside staff. Furthermore, we believe in fair and transparent business practices, and we do not tolerate unethical business dealings or facilitation payments.
Governance. ESG matters are of significant relevance to us, and the Board regularly engages in discussions relating to both ESG risks and opportunities. All of the current directors (other than the Chief Executive Officer) are independent for service on the Board, including experts in both shipping and compliance. Our management team, led by the Chief Executive Officer, executes the action plans as approved by the Board and works to manage ESG-related risks and opportunities.
As part of the Company’s approach to ESG issues, the Company has historically focused on inclusion and diversity, both of which are key to its global operations. INSW employs on its vessels seafarers from more than seven countries, predominantly in Asia and Europe, and has employees of more than nine nationalities represented in its shore-based staff. The Board includes two women out of eight directors,
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and the senior leadership team (comprised of the five NEOs, the Controller, and the heads of Information Technology, Human Resources and the lightering business) includes two women (including the CEO, who is also a director) and two members of underrepresented minority groups. The Company’s global mindset, coupled with its focus on fairness, diversity and inclusion, helps drive business success and ensures the Company is committed to its people and the communities in which they work and live.
ESG-related matters are regularly discussed with both the Corporate Governance and Risk Assessment Committee, and with the full Board.
INFORMATION CONCERNING SOLICITATION AND VOTING
The accompanying proxy is solicited on behalf of the Board of Directors (the “Board”) of the Company for use at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held on June 2, 2021 at 2 p.m. Eastern time, or any adjournment or postponement thereof, for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting will be held virtually via live webcast at www.virtualshareholdermeeting.com/INSW2021. You will be able to attend the meeting online, vote your shares and submit questions during the meeting by visiting the website listed above. In order to join the Annual Meeting, you will need to have the 16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials (or in other communications you may have received from the broker, bank or other nominee in whose name your shares are held).
Any stockholder giving a proxy may revoke it at any time before it is exercised at the meeting. This Proxy Statement and the accompanying proxy will first be sent to stockholders on or about April 23, 2021.
Participating in the Annual Meeting in 2021
The Company’s Annual Meeting will be conducted exclusively online via live webcast because of the COVID-19 pandemic and to support the health and wellness of our stockholders, employees, directors and officers. Because the Annual Meeting is virtual and being conducted electronically, stockholders cannot attend the Annual Meeting in person. Stockholders at the close of business on the record date will be allowed to communicate with us and ask questions in our virtual stockholder meeting forum before and during the meeting.
A summary of information about participating in the Annual Meeting online follows:
Any stockholder can attend the Annual Meeting live via the Internet at www.virtualshareholdermeeting.com/INSW2021
Webcast starts at 2:00 p.m., Eastern Time
Online check-in is expected to begin at 1:45 p.m., Eastern time, and you should allow up to 15 minutes for the online check-in procedures.
Stockholders will be able to vote and submit questions while attending the virtual Annual Meeting
Please have your 16-digit control number to enter the virtual Annual Meeting
Information on how to attend and participate via the Internet will be posted at www.virtualshareholdermeeting.com/INSW2021
Stockholders who participate in the virtual Annual Meeting by way of the link above will be deemed to be “present in person,” as such term is used in this Proxy Statement, including for purposes of determining a quorum and counting votes.
Record Date, Shares Outstanding and Voting
Only stockholders of record at the close of business on April 19, 2021 (the “record date”) will be entitled to vote at the Annual Meeting. As of the record date, the Company had one class of voting securities, its Common Stock, of which 28,087,011 shares were outstanding on the record date and entitled to one vote each (the “Common Stock”). A list of our stockholders will be open to the
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examination of stockholders for any purpose germane to the Annual Meeting, during ordinary business hours for ten days prior to the Annual Meeting, at the Company’s offices, 600 Third Avenue, 39th Floor, New York, New York.
All shares represented by the accompanying proxy, if it is duly executed and received by the Company at or prior to the meeting, will be voted at the meeting in accordance with the instructions provided therein. If no instructions are provided, the proxy will be voted (1) FOR the election of directors, (2) FOR ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2021 and (3) FOR approval, in an advisory vote, of the compensation for 2020 of the executive officers named in the Summary Compensation Table in this Proxy Statement (each, a “Named Executive Officer” and collectively, the ”NEOs”), as described in “Compensation Discussion and Analysis” section and in the accompanying compensation tables and narrative in this Proxy Statement.
Each of the election of directors and the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2021 requires the affirmative vote (in person or by proxy) of a majority of the votes cast by the holders of the shares of Common Stock present in person or represented by proxy at the meeting and entitled to vote on the election of directors. The advisory vote on approval of the compensation to the NEOs for 2020 is non-binding, but the Board and the Human Resources and Compensation Committee (the “Compensation Committee”) will review the voting results in connection with their ongoing evaluation of the Company’s compensation program.
Your vote and ensuring that your shares will be represented at the meeting are both very important. We urge you to vote as soon as possible by telephone, over the Internet or by marking, signing and returning your proxy or voting instruction card, even if you plan to attend the Annual Meeting virtually.
Abstentions and broker non-votes will be counted for purposes of determining the presence or absence of a quorum. Abstentions will be counted in tabulations of the votes cast on each of the proposals presented at the Annual Meeting (and will have the same effect as “AGAINST” votes, except with respect to the election of directors where abstentions will not be counted), whereas broker “non-votes” will not be counted for purposes of determining the number of votes cast.
New York Stock Exchange (the “NYSE”) rules permit brokers to vote for routine matters such as the ratification of the appointment of Ernst & Young LLP without receiving instructions from the beneficial owner of the shares. NYSE rules prohibit brokers from voting on the election of directors, executive compensation and other non-routine matters without receiving instructions from the beneficial owner of the shares. In the absence of instructions, the shares are viewed as being subject to “broker non-votes.” “Broker non-votes” will be counted for quorum purposes (as they are present and entitled to vote on the ratification of the appointment of Ernst & Young LLP) but will not affect the outcome of any other matter being voted upon at the Annual Meeting. Under current applicable rules, unless provided with voting instructions, a broker cannot vote shares of Common Stock for the election of directors or on the advisory vote concerning the approval of the compensation of the NEOs for 2020.
All of these matters are very important to the Company, and we urge you to vote your shares by telephone, over the Internet or by marking, signing and returning your proxy or voting instruction card.
Expenses
The cost of soliciting proxies for the meeting will be borne by the Company. The Company has retained Innisfree M&A Incorporated to assist with the solicitation of votes for a fee of up to $20,000 plus reimbursement of expenses, which will be paid by the Company. The Company will also reimburse brokers and others who are only record or nominee holders of the Company’s shares for their reasonable expenses incurred in obtaining voting instructions from beneficial owners. Directors and officers of the Company may solicit proxies personally or by telephone or facsimile, but will not receive additional compensation for doing so.
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Proposals for 2022 Annual Meeting of Stockholders
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “1934 Act”), any proposals of stockholders that are intended to be presented at the Company’s 2022 Annual Meeting of Stockholders must be received at the Company’s principal executive offices no later than December 31, 2021, and must comply with all other applicable legal requirements, in order to be included in the Company’s proxy statement and form of proxy for that meeting.
Stockholders who wish to propose a matter for action at the Company’s 2022 Annual Meeting of Stockholders (the “2022 Annual Meeting”), including the nomination of directors, but who do not wish to have a proposal or nomination included in the proxy statement for that meeting, must notify the Company in writing of the information required by the provisions of the Company’s Amended and Restated By-laws (the “By-laws”) dealing with stockholder proposals. The notice must be delivered to the Company’s Corporate Secretary between March 3, 2022 and April 3, 2022. Stockholders can obtain a copy of the By-laws on the Company’s website https://www.intlseas.com/investor-relations/documents/ or by writing the Corporate Secretary at: Corporate Secretary, International Seaways, Inc., 600 Third Avenue, 39th Floor, New York, New York 10016.
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ELECTION OF DIRECTORS (PROPOSAL NO. 1)
Our Board of Directors currently has eight members, and each director serves for a one-year term. At the Annual Meeting, shareholders will vote on the eight nominees named below, each of whom is an incumbent member of the Board. Each of the director nominees was elected by a majority of shareholders voting at the annual meeting of shareholders held in June 2020.
The nominees identified below were selected by the Board upon the recommendation of the Corporate Governance and Risk Assessment Committee (the “Governance Committee”), and each nominee has consented to serve if elected. Unless otherwise directed, the proxy will be voted for the election of these nominees, to serve until the 2022 Annual Meeting and until their successors are elected and qualify. We are not aware of any reason the nominees would not be able to serve if elected.
There are no family relationships among our directors, or between our directors and executive officers, and the Board has determined that each of the director nominees other than Ms. Zabrocky is independent within the meaning of the applicable rules of the SEC and the listing standards of the NYSE, and that each of the director nominees other than Mr. Kronsberg and Ms. Zabrocky is independent under the rules of the SEC and the NYSE relating to audit committees. See “Corporate Governance And The Board — Independence” below.
Re-election of each nominee for director requires that such nominee receive a majority of the votes cast FOR his or her election. Abstentions and broker non-votes are not counted as votes cast and will have no effect on the outcome of any of these proposals.
Recommendation of the Board
The Board recommends a vote “FOR” the election of each of the nominees for director named in this Proxy Statement.
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Biographical Information
The following is biographical information about each nominee, including a description of the experience, qualifications and skills that have led the Board to determine that each nominee should serve on the Board. The terms of elected directors will expire as of the date of the annual meeting of shareholders to be held in 2022, or will continue until their successors are elected and have qualified. The age of each director is as of the date of this Proxy Statement.
Doug Wheat
Age 70
Chairman of the Board since November 2016
Committees: None
Other Current Public Company Board Service:
Overseas Shipholding Group, Inc.
AMN Healthcare Services, Inc.
Background:
Mr. Wheat is currently the Managing Partner of Wheat Investments, a private investment firm. From 2007 to 2016, he was the founding and Managing Partner of the private equity company Southlake Equity Group. From 1992 until 2006, Mr. Wheat was the President of Haas Wheat & Partners (“Haas Wheat”). Prior to the formation of Haas Wheat, Mr. Wheat was a founding member of the merchant banking group at Donaldson, Lufkin & Jenrette, where he specialized in leveraged buyout financing. From 1974 to 1984, Mr. Wheat practiced corporate and securities law in Dallas, Texas.
Mr. Wheat is currently the Chairman of the Board of Directors of Overseas Shipholding Group, Inc. (ticker: “OSG”) and Chairman of the Board of Directors of AMN Healthcare Services, Inc. (ticker: “AMN”). He has been a director of AMN since 1999, becoming Chairman in 2007. He previously served as Vice Chairman of Dex Media, Inc. and served as Chairman of SuperMedia prior to its merger with Dex One. Mr. Wheat has also previously served as a member of the board of directors of several other companies including among others: Playtex Products (of which he also served as Chairman); Dr. Pepper/Seven-Up Companies, Inc.; Dr. Pepper Bottling of the Southwest, Inc.; Walls Industries, Inc.; Alliance Imaging, Inc.; Thermadyne Industries, Inc.; Sybron International Corporation; Nebraska Book Corporation; ALC Communications Corporation; Mother’s Cookies, Inc.; and Stella Cheese Company. Mr. Wheat received both his Juris Doctor and Bachelor of Science degrees from the University of Kansas.
Skills and expertise: Mr. Wheat’s finance and legal expertise and experience serving on numerous boards of directors make him a valuable asset to the Board.
Timothy J. Bernlohr
Age 62
Director since November 2016
Committees: Compensation (Chair); Governance
Other Current Public Company Board Service:
Atlas Air Worldwide Holdings, Inc.
Skyline Champion Corporation
WestRock Company
Background:
Mr. Bernlohr is the Founder and Managing Member of TJB Management Consulting, LLC, which specializes in providing project specific consulting services to businesses in transformation, including restructurings, interim executive management and strategic planning services. He has held that role since 2005. Prior to that, he was the President and Chief Executive Officer of RBX Industries, Inc. (“RBX”), a nationally recognized leader in the design, manufacture and marketing of rubber and plastic materials to the automotive, construction and industrial markets. Before joining RBX in 1997, Mr. Bernlohr spent 16 years in the International and Industry Products division of Armstrong World Industries and held various management positions.
Mr. Bernlohr is currently a director and the Chairman of the Compensation Committee of Atlas Air Worldwide Holdings, Inc. (ticker: “AAWW”); Chairman of the Board of Directors of Skyline Champion Corporation (ticker: “SKY”); and a director and the Chairman of the Compensation Committee of WestRock Company (ticker: “WRK”). Mr. Bernlohr served as an independent director of the following publicly-held companies: Chemtura Corporation; Rock-Tenn Company (a predecessor of WRK); Cash Store Financial Services, Inc.; and OSG. Mr. Bernlohr is a graduate of Pennsylvania State University.
Skills and expertise: Mr. Bernlohr’s experience serving as a chief executive of an international manufacturing company and his varied directorship positions make him a valuable asset to the Board.
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Ian T. Blackley
Age 66
Director since July 2013
Committees: Audit; Governance
Other Current Public Company Board Service: None
Background:
Mr. Blackley was the President and Chief Executive Officer of OSG (the former parent corporation of the Company) from January 2015 until his retirement in December 2016. From September 2014 until November 2016, he was the Senior Vice President and Chief Financial Officer of the Company. After joining OSG in 1991, Mr. Blackley held numerous operating and financial positions. Before becoming President and Chief Executive Officer of OSG, Mr. Blackley served as Executive Vice President and Chief Operating Officer of OSG from December 2014. Prior to that, Mr. Blackley served as Senior Vice President (from May 2009 to December 2014), as Chief Financial Officer (from April 2013 to December 2014), and as Head of International Shipping (from January 2009 to April 2013). Mr. Blackley also served as Managing Director and Chief Operating Officer of OSG Ship Management (UK) Ltd. from September 2005 through April 2013. Mr. Blackley began his seagoing career in 1971, serving as a captain from 1987 to 1991.
Mr. Blackley currently serves on the board of Gard P. & I. (Bermuda) Ltd. Mr. Blackley served as a director of the Company from July 2013 through November 30, 2016, during which time the Company was a wholly-owned subsidiary of OSG, and served as a director of OSG from 2015 to 2016. He holds a diploma in Nautical Science from Glasgow College of Nautical Studies and a Master Mariner Class I license.
Skills and expertise: Mr. Blackley’s extensive experience both with the shipping industry generally, and the Company in particular, make him a valuable asset to the Board.
Randee E. Day
Age 73
Director since November 2016
Committees: Audit (Chair); Compensation
Other Current Public Company Board Service:
Eagle Bulk Shipping Inc.
Background:
Ms. Day is President and Chief Executive Officer of Day & Partners, LLC, a maritime consulting and advisory company and a senior advisor to the global capital advisory and restructuring firm, Teneo. Prior to founding Day & Partners, LLC in 2011, Ms. Day served as interim Chief Executive Officer of DHT Holdings Inc. (ticker: “DHT”). From 2004 - 2010, Ms. Day was Managing Director at the Seabury Group, a transportation advisory firm, and the Division Head of JP Morgan’s shipping group in New York. Her previous banking experience was at Continental Illinois National Bank in London, Bank of America, San Francisco and the Export-Import Bank of the United States, Washington, D.C.
Ms. Day is a director of Eagle Bulk Shipping Inc. (ticker: “EGLE”), an owner and operator of dry bulk vessels, and is Chairman of its Corporate Governance Committee. She is a former director of DHT Holdings, Inc., TBS International, Inc., Tidewater, Inc., Ocean Rig ASA and Excel Maritime Carriers Inc. Ms. Day is a graduate of the School of International Relations at the University of Southern California and did graduate studies at George Washington University. Ms. Day also is a graduate of Senior Executives in National and International Security Program at the Kennedy School at Harvard University.
Skills and expertise: Ms. Day’s extensive experience in the shipping and banking industries make her a valuable asset to the Board.
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David I. Greenberg
Age 67
Director since June 2017
Committees: Audit; Governance (Chair)
Other Current Public Company Board Service: None
Background:
Mr. Greenberg is Special Advisor (and from 2008 through 2016 was a member of the Executive Committee) for LRN Corporation, which advises global companies on governance, ethics, compliance, culture and strategy issues. For 20 years prior to 2008, Mr. Greenberg served in various senior positions at Altria Group, Inc. then the parent company of Phillip Morris USA, Phillip Morris International, Kraft Foods and Miller Brewing — culminating in his role as Senior Vice President, Chief Compliance Officer and a member of the Corporate Management Committee. Mr. Greenberg is a managing director of Cortina Partners LLC, a private equity firm that invests in and manages companies in the textile, health care, communications, and medical transportation and bedding industries, and is the Chief Executive Officer of Acqua Recovery, a residential drug and alcohol treatment center outside of Park City, Utah. Earlier in his career, Mr. Greenberg was a partner in the Washington, D.C. law firm of Arnold & Porter. He attended Williams College and has Juris Doctor and Master of Business Administration degrees from the University of Chicago.
Skills and expertise: Mr. Greenberg’s investment and legal experience, particularly with respect to governance related matters, make him a valuable asset to the Board.
Joseph I. Kronsberg
Age 38
Director since November 2016
Committees: None
Other Current Public Company Board Service:
Overseas Shipholding Group, Inc.
Background:
Mr. Kronsberg has served in various roles at Cyrus Capital Partners, L.P. since 2006, and he is currently a Partner responsible for certain investments in the financial, shipping and energy sectors. Previously, Mr. Kronsberg worked at Greenhill & Co. as a generalist in its Mergers & Acquisitions and Restructuring departments.
Mr. Kronsberg currently serves as a director of OSG. Mr. Kronsberg has a Bachelor of Science degree in Economics from the Wharton School of the University of Pennsylvania where he graduated summa cum laude.
Skills and expertise: Mr. Kronsberg’s substantial financial expertise and experience in investment management make him a valuable asset to the Board.
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Ty E. Wallach
Age 49
Director since November 2016
Committees: Compensation
Other Current Public Company Board Service: None
Background:
Since September 2019, Mr. Wallach has served as a Managing Director and Chief Investment Officer – Credit of Atlas Merchant Capital LLC, an international financial services investment firm. Until July 2018, Mr. Wallach was a Partner at Paulson & Co. Inc. (“Paulson”) and a Co-Portfolio Manager at Paulson’s credit funds. While at Paulson, he led numerous investments in the debt and equity of distressed and leveraged companies. Prior to joining Paulson, Mr. Wallach was a partner and Managing Director at Oak Hill Advisors, serving most recently as Co-Head of European Investments.
He currently serves on the boards of two non-profit organizations, Focus for a Future Inc. and New Heights Youth, Inc. Mr. Wallach is a graduate of Princeton University.
Skills and expertise: Mr. Wallach’s substantial financial and investment experience make him a valuable asset to the Board.
Lois K. Zabrocky
Age 51
Director since May 2018
Committees: None
Other Current Public Company Board Service:
Tidewater, Inc.
Background:
Ms. Zabrocky has been the President and Chief Executive Officer (“CEO”) of the Company since the spin-off of the Company from OSG on November 30, 2016 (the “Spin-Off”) and was President of the Company from August 2014. Prior to the Spin-Off, Ms. Zabrocky served as Senior Vice President and Head of the International Flag Strategic Business Unit of OSG with responsibility for the strategic plan and profit and loss performance of OSG’s international tanker fleet comprised of 50 vessels and approximately 300 shoreside staff. Ms. Zabrocky served in various roles during her more than 25 years at OSG. She served as Senior Vice President of OSG from June 2008 through August 2014, when she was appointed as Co-President of OSG and Head of the International Flag Strategic Business Unit of OSG. Ms. Zabrocky served as Chief Commercial Officer, International Flag Strategic Business Unit of OSG from May 2011 until her appointment as Head of International Flag Strategic Business Unit and as the Head of International Product Carrier and Gas Strategic Business Unit for at least four years prior to May 2011. She served as a director of the Company from November 2011 through November 2016 during which time the Company was a wholly-owned subsidiary of OSG.
Ms. Zabrocky is a director of Tidewater, Inc. (ticker: “TDW”), an owner and operator of offshore support vessels, and ITOPF Limited, a not for profit ship pollution advisor providing advice worldwide on responses to spills of oil, chemicals and other substances at sea. Ms. Zabrocky holds a Bachelor of Science degree from the United States Merchant Marine Academy and holds a Third Mate’s License. She has also completed the Harvard Business School Strategic Negotiations and Finance for Senior Executives courses.
Skills and expertise: Ms. Zabrocky’s long experience with the Company and the shipping industry make her a valuable asset to the Board.
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DIRECTOR COMPENSATION
During 2020, the Company’s non-executive Chairman of the Board received an annual cash retainer of $172,000 and each of the Company’s other non-employee directors received an annual cash retainer of $80,000, except as described below. The Chairman of each of the Audit Committee, the Compensation Committee and the Governance Committee received an additional cash retainer of $20,000, $20,000 and $13,000, respectively. Each member of the three committees (other than the committee Chairman) received an additional cash retainer of $10,000, except that members of the Governance Committee received an additional cash retainer of $6,500. No director earned any fee for attending any Board meeting or Board committee meeting. The Company reimburses directors for their reasonable travel and lodging expenses in attending in-person Board and Board committee meetings. Directors who are also employees of the Company do not receive any additional compensation for their service on the Board.
Mr. Kronsberg has instructed the Company to pay all compensation (cash and equity) for his service as a director to his current employer, Cyrus Capital Partners, L.P. (“CCP”).
Under the 2020 International Seaways, Inc. Non-Employee Director Incentive Compensation Plan (the “Director Plan”), the Board has discretion to grant various types of equity-based awards to directors. The Board has delegated to the Compensation Committee administration of the Director Plan. The Compensation Committee, based upon consideration of information provided by the Compensation Committee’s independent advisors, has established the annual equity compensation of the non-Executive Chairman of the Board at $220,000 and the annual equity compensation of each other non-employee director at $100,000. On June 26, 2020, the Board granted the non-Executive Chairman of the Board 13,707 shares of Common Stock having a fair market value of $220,000 and granted each other non-employee director, except as described above, and Mr. Kronsberg’s employer, CCP (in lieu of grants to Mr. Kronsberg), 6,230 shares of Common Stock having a fair market value of $100,000, in each case vesting on the earlier of (a) June 22, 2021 and (b) the date of the Annual Meeting of Stockholders of the Company in 2021, subject to the director continuing to provide services to the Company as of such date.
The following table shows the total compensation paid to the Company’s non-employee directors during 2020:
 
Fees earned
or Paid in
Cash
($)(1)
Stock
Awards
($)(2)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
All Other
Compensation
($)
Total
($)
Timothy J. Bernlohr
106,500
100,000
206,500
Ian T. Blackley
87,936
100,000
187,936
Randee E. Day
104,620
100,000
204,620
David I. Greenberg
103,000
100,000
203,000
Joseph I. Kronsberg(3)
80,000
100,000
180,000
Ty E. Wallach
90,000
100,000
190,000
Douglas D. Wheat
172,000
220,000
392,000
Gregory A. Wright(4)
79,875
100,000
179,875
(1)
Consists of annual Board fees, annual Board Chairman and annual Chairman of the Audit, Compensation and Governance Committees fees, and annual committee member fees.
(2)
Stock awards are calculated at grant date fair value in accordance with FASB Topic 718.
(3)
In accordance with Mr. Kronsberg’s instruction, all compensation for his service as a director was paid to his employer, CCP.
(4)
Mr. Wright resigned from the Board of the Company on July 8, 2020. The Board vested his restricted share award as of the date of his separation.
All directors’ cash compensation is payable quarterly in advance.
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Director Stock Ownership Guidelines
The Company encourages stock ownership by directors in order to align interests of directors with the long-term interests of the Company’s stockholders. To further stock ownership by directors, the Board believes that regular grants of equity compensation should be a significant component of director compensation.
The Board has adopted stock ownership guidelines for non-employee directors. Under the stock ownership guidelines, each non-employee director is expected within five years after becoming a director to own shares of the Company’s common stock (including restricted stock units and restricted shares convertible into shares of stock and stock owned by his or her spouse and minor children), with a market value equal to at least three times his or her annual cash base retainer.
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CORPORATE GOVERNANCE AND THE BOARD
General
Corporate Governance Principles. The Board believes that ethics and integrity cannot be legislated or mandated by directive or policy and that the ethics, character, integrity and values of the Company’s directors and senior management remain the most important safeguards in quality corporate governance. The business and affairs of the Company are managed under the direction of the Board in accordance with Marshall Islands law. The Board’s principal responsibilities are to provide direction, oversight and counsel to the Company’s management and to generally maximize the value of the Company for its stockholders.
Corporate Governance Guidelines. The Board has adopted Corporate Governance Guidelines to promote the effective functioning of the Board and its committees, to promote the interests of all stockholders, and to ensure a common set of expectations as to how the Board, its various committees, individual directors and management should perform their functions. The Corporate Governance Guidelines are posted on the Company’s website https://www.intlseas.com/investor-relations/documents/, and are available in print upon request. That website and the information contained on that site, or connected to that site, are not incorporated by reference in this Proxy Statement. Mergers and other business combinations may be approved by the affirmative vote of holders of a majority of outstanding shares of Common Stock (unless the transaction would require the amendment of any provision of the Company’s Articles of Incorporation or By-laws requiring a greater percentage to amend).
Board Leadership Structure. The Corporate Governance Guidelines provide that the Board selects the CEO of the Company and may select a Chairman of the Board (the “Chairman”) in the manner it considers in the best interests of the Company. The Guidelines provide that if the Board determines that there should be a Chairman, he or she may be a non-management director or the CEO. The Company currently separates the role of CEO and Chairman.
The CEO and the Chairman are in frequent contact with one another and with senior management of the Company. They provide advice and recommendations to the full Board for the full Board’s consideration. They each review in advance the schedule of Board and committee meetings and establish the agenda for each Board meeting in order to ensure that the interests and requirements of the stockholders, the directors and other stakeholders are appropriately addressed. The Board believes that the existing leadership structure, with the current individuals in their positions, is in the best interests of stockholders.
The Board, primarily through its Governance Committee, periodically reviews the Company’s leadership structure to determine if it remains appropriate in light of the Company’s specific circumstances and needs, current corporate governance standards, market practices and other factors the Board considers relevant. The Board retains the right to combine the CEO and Chairman roles in the future if it determines that such a combination would be in the best interests of the Company and its stockholders.
Board Oversight of Risk Management. While the responsibility for management of the Company’s material risks lies with management of the Company, the Board provides oversight of risk management, directly and indirectly, through its committee structure. The Board performs this oversight role by using several different levels of review. The Board and the Governance Committee receive regular reports from key members of management responsible for specified areas of material non-financial risk to the Company. In addition, the Board reviews the risks associated with the Company’s strategic plan at an annual strategic planning session and periodically throughout the year as part of its consideration of the strategic direction of the Company.
At the committee level, the Audit Committee regularly reviews the financial statements and financial and other internal controls. Further, the Audit Committee meets in private sessions individually with certain members of management and with representatives of the internal auditors and the independent registered public accounting firm at the conclusion of every regularly scheduled meeting, where aspects of financial risk management are discussed as necessary.
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The Governance Committee manages risk associated with Board independence, corporate governance and potential conflicts of interest as well as oversight over non-financial risk assessments associated with the Company’s operations. Included in such oversight is review of the Company’s business resiliency, data privacy and cybersecurity, both onshore and on the Company’s vessels. The Company’s cybersecurity program is based on the National Institute of Standards and Technology cybersecurity framework and related framework developed for the maritime industry. INSW’s information systems have been enhanced in recent years through the implementation of cloud-based architecture and AI machine-learning based security solutions. Management reports to the Governance Committee on the Company’s information systems and security semi-annually and the Company provides a mandatory on-line information security training program to onshore employees annually.
The Compensation Committee annually reviews executive compensation policies and practices and employee benefits, and associated risks. Both the Audit Committee and the Compensation Committee also rely on the advice and counsel of the Company’s independent registered public accountants and independent compensation consultants, respectively, to raise awareness of any risk issues that may arise during their regular review of the Company’s financial statements, audit work and executive compensation policies and practices, as applicable.
Managing risk is an ongoing process inherent in all decisions made by management. The Company has an enterprise risk management program that is designed to ensure that risks are taken knowingly and purposefully.
Management is responsible for assessing all the risks and related mitigation strategies for all material projects and initiatives of the Company prior to being submitted for consideration by the Board.
Environmental, Social and Governance (“ESG”) Initiatives. The Board regularly engages in discussions relating to ESG risks and opportunities, including INSW’s response to environmental and climate change-related risks and opportunities. The Company’s management team, led by the Chief Executive Officer, has the day-to-day responsibility to execute the action plans as approved by the Board of Directors. The Company is committed to meeting ESG principles as a part of its core culture. Accordingly, INSW strives to meet, and when possible and appropriate, exceed minimum compliance levels for all applicable rules and regulations governing the maritime industry, as described in greater detail in the 2020 Annual Report. The Company’s governance, strategy, risk management and performance monitoring efforts in this area are evolving and will continue to do so over time.
Independence. Under the Corporate Governance Guidelines, which incorporate standards established by the NYSE, the Board must consist of a majority of independent directors. As determined by the Board, as of the date of this Proxy Statement, all of the nominees other than Ms. Lois K. Zabrocky have been determined to be independent under the Corporate Governance Guidelines for purposes of service on the Board, because no relationship was identified that would automatically bar any of them from being characterized as independent, and any relationships identified were not so material as to impair their independence. In addition, the Board has determined that all of the nominees other than Mr. Joseph I. Kronsberg and Ms. Lois K. Zabrocky are independent for purposes of serving on the Audit Committee. The Board annually reviews relationships that directors may have with the Company to make a determination of whether there are any material relationships that would preclude a director from being independent. See “— Related Party Transactions” below.
Executive Sessions of the Board.  To ensure free and open discussion and communication among the non-management directors, the Corporate Governance Guidelines provide that non-management directors meet in executive session at the time of each regular meeting of the Board; at least one of such executive sessions shall exclude non-management directors who do not qualify as independent. In accordance with the Guidelines, the nonexecutive Chairman of the Board chairs the executive sessions. Any non-management director can request that an additional executive session be scheduled.
Meetings of the Board. The Board held eleven meetings during 2020. Each director attended at least 75% of the total number of meetings of the Board and Board committees of which the director was a member. Under the Corporate Governance Guidelines, each director is expected to attend all Board meetings and all meetings of committees of which the director is a member. Meeting materials are
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provided to Board and Committee members prior to meetings, and members are expected to review such materials prior to each meeting.
At the Company’s annual meeting held in June 2020, Mr. Kronsberg received a majority “withhold” vote for his re-election as a director, meaning that a majority of holders who voted at the meeting withheld approval. The Board concluded that the principal reason for that vote was the recommendation of proxy advisory firms that stockholders withhold their votes in response to his reported attendance record. The Board determined that of the two Board meetings Mr. Kronsberg missed (out of the total of seven Board meetings held in 2019) one meeting was missed due to a family medical emergency, and the other meeting was missed only because it had been of a very short duration. In addition, the Board held several two-day meetings in 2019, which Mr. Kronsberg attended in full. Mr. Kronsberg attended more than 90% of the total meetings of the Board in 2019 measured by the aggregate duration of all such meetings. Had even of one of the two-day meetings been counted separately, Mr. Kronsberg would have been in compliance with proxy advisory firm guidelines. In addition, Mr. Kronsberg attended all of the meetings of the Board held in 2020.
Annual Meetings of Stockholders. Directors are not required, but are strongly encouraged, to attend the Annual Meeting of Stockholders in person or telephonically. All of the current directors attended the Annual Meeting of Stockholders in 2020, which was held “virtually” via live webcast.
Communications with Board Members.  Interested parties, including stockholders, may communicate with any director, with the nonexecutive Chairman of the Board or with the non-management directors as a group by sending a letter to the attention of such director, the nonexecutive Chairman of the Board or such non-management directors as a group, as the case may be, in care of the Company’s Corporate Secretary, 600 Third Avenue, 39th Floor, New York, New York 10016. The Corporate Secretary opens and forwards all such correspondence (other than advertisements and other solicitations) to directors unless the director to whom the correspondence is addressed has requested that the Corporate Secretary forward correspondence unopened. Unless the context otherwise requires, the Corporate Secretary will provide any communication addressed to the Board to the director most closely associated with the nature of the request based on Committee membership and other factors.
Business Conduct and Governance Policies. The Company has adopted a number of business conduct and governance policies, including the following:
A Code of Business Conduct and Ethics, which is an integral part of the Company’s business conduct compliance program and embodies the commitment of the Company and its subsidiaries to conduct operations in accordance with the highest legal and ethical standards. The Code of Business Conduct and Ethics applies to all of the Company’s officers, directors and employees. Each is responsible for understanding and complying with the Code of Business Conduct and Ethics.
An Insider Trading Policy which prohibits the Company’s directors and employees from purchasing or selling securities of the Company while in possession of material nonpublic information or otherwise using such information for their personal benefit. The Insider Trading Policy also prohibits the Company’s directors and employees from hedging or pledging their ownership of securities of the Company.
An Anti-Bribery and Corruption Policy which memorializes the Company’s commitment to adhere faithfully to both the letter and spirit of all applicable anti-bribery legislation in the conduct of the Company’s business activities worldwide.
A current copy of each of these policies is available in print upon request to our Investor Relations department at International Seaways, Inc., 600 Third Avenue, New York, New York 10016 and is posted on the Company’s website at https://www.intlseas.com/investor-relations/documents/.  If the Board grants any waivers from the Code of Business Conduct and Ethics to any of our directors or executive officers, or if we amend such policies, we will, if required, disclose these matters through that section of our website on a timely basis.
Other Directorships and Significant Activities. The Company values the experience directors bring from other boards of directors on which they serve, but recognizes that those boards also
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present significant demands on a director’s time and availability and may present conflicts and legal issues. The Corporate Governance Guidelines provide that non-management directors refrain from serving on the boards of directors of more than four publicly-traded companies (other than the Company or a company in which the Company has a significant equity interest) absent special circumstances. A member of the Audit Committee may not serve on more than two other audit committees of publicly-traded companies.
The Corporate Governance Guidelines require the CEO and other members of senior management, whether or not they are members of the Board of the Company, to receive the approval of the Governance Committee before accepting outside board membership. The Corporate Governance Guidelines prohibit the CEO from serving on the board of directors of more than one publicly-traded company (other than the Company or a company in which the Company has a significant equity interest).
If a director’s principal occupation or business association changes substantially during the director’s tenure as a member of the Board, that director is required by the Corporate Governance Guidelines to inform the Chair of the Governance Committee of the change and offer to resign from the Board. In such case, such Committee must recommend to the Board the action, if any, to be taken with respect to the offer of resignation, taking into account the appropriateness of continued Board membership.
Related Party Transactions
Related party transactions may present potential or actual conflicts of interest and create the appearance that Company decisions are based on considerations other than the best interests of the Company and its stockholders. The Company’s Code of Business Conduct and Ethics requires all directors, officers and employees who may have a potential or apparent conflict of interest to disclose fully all the relevant facts to the Company’s legal department. In addition to this reporting requirement, in order to identify related party transactions, each year the Company requires its directors and executive officers to complete Director and Officer questionnaires identifying any transactions with the Company in which the director or officer has an interest. Management and the legal department review the terms of all related party transactions, and management reports to the Board on all proposed related party transactions with directors and executive officers. Upon the presentation of a proposed related party transaction to the Board, the related party (if such related party is a director) is excused from participation and voting on the matter. In deciding whether to approve the related party transaction, the Board determines whether the transaction is on terms that could be obtained in an arm’s length transaction with an unrelated third party. If the related party transaction is not on such terms, it will not be approved.
Committees
The Company has three standing committees of its Board: the Audit Committee, the Governance Committee and the Compensation Committee. Each of the Board committees has a charter that is posted on the Company’s website at https://www.intlseas.com/investor-relations/documents/ and is available in print upon request.
Audit Committee. The Audit Committee is required to have no fewer than three members all of whom must be and are independent directors under the standards set forth in the Company’s Corporate Governance Guidelines. During 2020, the Audit Committee consisted of Ms. Randee E. Day (Chair from July 8, 2020), and Messrs. Gregory A. Wright (Chair until his retirement on July 8, 2020), Ian T. Blackley (from July 8, 2020) and David I. Greenberg. The Board previously determined that Ms. Day is an audit committee financial expert, as defined by rules of the Securities and Exchange Commission (the “SEC”) and NYSE. The Audit Committee met five times in 2020.
Ms. Day was appointed as the Chair of the Audit Committee and Mr. Blackley was appointed to serve on the Audit Committee in July 2020 following Mr. Wright’s resignation. Mr. Wright resigned on July 8, 2020 unexpectedly due to medical reasons, effective the same day, and subsequently passed away during the third quarter of 2020. The Company is grateful for Mr. Wright’s valuable contributions as a director and Audit Committee Chair to the Company's growth and success. Mr. Blackley was appointed to the Audit Committee because of his financial background and his knowledge of the shipping industry, which the Board believed were useful and appropriate skills to add to the committee given the unexpected nature and timing of Mr. Wright’s resignation. The Board had previously determined that Mr. Blackley was
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independent for all relevant SEC and NYSE purposes, and concluded that he was best-positioned to take on the role among the available directors, particularly given the existing commitments of the other independent directors.
The Audit Committee oversees the Company’s accounting, financial reporting process, internal controls and audits and consults with management, internal auditors and the Company’s independent registered public accounting firm on, among other things, matters related to the annual audit, and published financial statements and the accounting principles applied, and the oversight of financial risk assessments associated with the Company’s operations. As part of its duties, the Audit Committee appoints and retains the Company’s independent registered public accounting firm, subject to stockholder ratification (though the stockholder vote is not binding on the Audit Committee, and the Audit Committee may in its sole discretion terminate the engagement of the firm and direct the appointment of another independent auditor at any time during the year if it determines that such an appointment would be in the best interests of the Company and its stockholders).
The Audit Committee maintains direct responsibility for the compensation and oversight of the Company’s independent registered public accounting firm and evaluates the independent registered public accounting firm’s qualifications, performance and independence. The Audit Committee has established policies and procedures for the pre-approval of all services provided by the Company’s independent registered public accounting firm.
Governance Committee. The Governance Committee is required to have no fewer than three members, all of whom must be and are independent directors under the standards set forth in the Company’s Corporate Governance Guidelines. During 2020, the Governance Committee consisted of Messrs. David I. Greenberg (Chair), Timothy J. Bernlohr, Ian T. Blackley (from July 8, 2020) and Gregory A. Wright (until his retirement on July 8, 2020). The Governance Committee met six times in 2020.
Mr. Blackley was appointed to serve on the Governance Committee in July 2020 following Mr. Wright’s resignation. Mr. Wright resigned on July 8, 2020 unexpectedly due to medical reasons, effective the same day, and subsequently passed away during the third quarter of 2020. The Company is grateful for Mr. Wright’s valuable contributions as a director and Governance Committee member to the Company’s growth and success. Mr. Blackley was appointed to the Governance Committee because of his financial background and his knowledge of the shipping industry, which the Board believed were useful and appropriate skills to add to the committee given the unexpected nature and timing of Mr. Wright’s resignation. The Board had previously determined that Mr. Blackley was independent for all relevant SEC and NYSE purposes, and concluded that he was best-positioned to take on the role among the available directors, particularly given the existing commitments of the other independent directors.
The Governance Committee assists the Board by identifying and recommending individuals qualified to become Board members to the Board for nomination at the next annual stockholder meeting. It develops and recommends to the Board the establishment of the Company’s corporate governance guidelines, and it provides oversight over non-financial risk assessments associated with the Company’s operations. The Governance Committee’s risk assessment responsibilities include oversight of the Company’s quality of services, the Company’s vessels’ adherence to environmental and regulatory requirements, and an assessment of the scope and amount of the Company’s insurance coverage. The Governance Committee also meets with the General Counsel (in his capacity as compliance officer) in executive session from time to time as needed. As part of its duties, the Governance Committee also aids the Board by providing a review of the Board performance on an annual basis.
The Governance Committee evaluates prospective nominees identified on its own initiative or referred to it by other Board members, management, stockholders or external sources and all self-nominated candidates. The Governance Committee uses the same criteria for evaluating candidates nominated by stockholders and self-nominated candidates as it does for those proposed by other Board members, management and search consultants.
The Governance Committee considers the following criteria for identifying and recommending qualified candidates for membership on the Board, seeking to maintain within these criteria appropriate diversity of individuals on the basis of gender, ethnic heritage, international background and life experiences:
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judgment, character, age, integrity, expertise, tenure on the Board, skills and knowledge useful to the oversight of the Company’s business;
status as “independent” or an “audit committee financial expert” or “financially literate” as defined by the NYSE or the SEC;
high level managerial, business or other relevant experience, including, but not limited to, experience in the industries in which the Company operates, and, if the candidate is an existing member of the Board, any change in the member’s principal occupation or business associations;
absence of conflicts of interest with the Company; and
ability and willingness of the candidate to spend a sufficient amount of time and energy in furtherance of Board matters.
As part of its annual assessment of Board size, structure and composition, the Governance Committee evaluates the extent to which the Board as a whole satisfies the foregoing criteria. The Governance Committee believes that the current directors have the requisite character, integrity, expertise, skills, and knowledge to oversee the Company’s business in the best interests of the Company’s stockholders and does not believe at this time that the long-term goal of greater Board diversity is sufficient to merit replacing existing directors.
All the director nominees named in this Proxy Statement have been evaluated under the criteria set forth above and recommended by the Governance Committee to the full Board for election by stockholders at the Annual Meeting. The entire Board recommends that stockholders elect all nominees. All director nominees for election at the Annual Meeting were previously elected to the Board by the stockholders at the Annual Meeting of Stockholders in 2020.
A stockholder may recommend a person as a nominee for director by writing to the Corporate Secretary of the Company.
Recommendations must be received by December 31, 2021 in order for a candidate to be considered for election at the 2022 Annual Meeting. Each recommendation for nomination should contain the following information: (a) the name and address of the stockholder who intends to make the nomination and of the person or persons to be nominated; (b) a representation that the stockholder is a holder of record of stock of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (d) such other information regarding each nominee proposed by such stockholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the SEC had such nominee been nominated, or intended to be nominated, by the Board; and (e) the consent of each nominee to serve as a director of the Company if so elected.
Compensation Committee.  The Compensation Committee is required to have no fewer than three members, all of whom must be and are independent directors under the standards set forth in the Company’s Corporate Governance Guidelines. During 2020, the Compensation Committee consisted of Timothy J. Bernlohr (Chair), Randee E. Day and Ty E. Wallach. The Compensation Committee met six times in 2020.
The Compensation Committee establishes, oversees, and carries out the Company’s compensation philosophy and strategy. It implements the Board responsibilities relating to compensation of the Company’s executive officers, and ensures that the Company’s officers and senior executives are compensated in a manner consistent with the Company’s philosophy and competitive with its peers. It annually reviews executive compensation policies and practices and employee benefits, and associated risks. As part of its duties, it monitors and oversees the preparation of the Company’s annual Compensation Discussion and Analysis for inclusion in the annual proxy statement, prepares an annual report on executive compensation, and provides guidance with respect to other compensation matters including recommendations for the CEO and the other NEOs.
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AUDIT COMMITTEE REPORT
Management has primary responsibility for preparing the consolidated financial statements of the Company, for maintaining effective internal control over financial reporting and for assessing the effectiveness of internal control over financial reporting. The Company’s independent registered public accounting firm is responsible for performing independent audits of the Company’s consolidated financial statements in accordance with auditing standards generally accepted in the United States (“U.S. GAAS”) and the effectiveness of the Company’s internal control over financial reporting based on criteria established by the Public Company Accounting Oversight Board (the “PCAOB”). The Audit Committee’s responsibility is to monitor and oversee these processes on behalf of the Board. The Board has adopted a written Audit Committee Charter describing the Audit Committee’s role and responsibilities, which is posted on the Company’s website at https://www.intlseas.com/investor-relations/documents/.
In fulfilling its oversight responsibilities, the Audit Committee met and held discussions with management and the Company’s independent registered public accounting firm concerning the acceptability and quality of the accounting principles, the reasonableness of significant judgments, and the adequacy and clarity of disclosures in the consolidated financial statements to be included in the 2020 Annual Report. Management represented to the Audit Committee that such consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States. The Audit Committee reviewed and discussed such consolidated financial statements with management and the Company’s independent registered public accounting firm. The Audit Committee further discussed with the Company’s independent registered public accounting firm the matters required to be discussed by U.S. GAAS, including those described in the PCAOB Auditing Standard No. 1301 (Communications with Audit Committees).
The Committee also held discussions with the Company’s internal auditors and reviewed management’s report on the assessment of the effectiveness of the Company’s internal control over financial reporting and the Company’s independent registered public accounting firm’s report on the effectiveness of the Company’s internal control over financial reporting.
The Company’s independent registered public accounting firm also provided to the Audit Committee the written disclosures and letter required by PCAOB Rule 3526 (Communication with Audit Committees Concerning Independence), and the Audit Committee discussed with the independent registered public accounting firm their independence from the Company and management, and considered the compatibility of non-audit services with the registered public accounting firm’s independence.
Based upon the Audit Committee’s discussions with management and the Company’s internal auditors and independent registered public accounting firm, the Audit Committee’s review of the representations of management, the certifications of the Company’s chief executive officer and chief financial officer which are required by the Securities and Exchange Commission (“SEC”) and the Sarbanes-Oxley Act of 2002, and the reports, letters and other communications of the independent registered public accounting firm, the Audit Committee recommended to the Board (and the Board approved) that the audited consolidated financial statements and management’s assessment of the Company’s internal control over financial reporting referred to above be included in the 2020 Annual Report for filing with the SEC.
 
International Seaways, Inc. Audit Committee:
 
 
 
Randee E. Day, Chair
 
Ian T. Blackley
 
David I. Greenberg
 
 
 
April 23, 2021
In accordance with the rules of the SEC, this Audit Committee report does not constitute “soliciting material” and shall not be incorporated by reference in any filings with the SEC made pursuant to the 1933 Act or the 1934 Act and shall not otherwise be deemed filed under such Acts.
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RATIFICATION OF APPOINTMENT OF THE COMPANY’S INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM (PROPOSAL NO. 2)
The Audit Committee has reappointed Ernst & Young LLP (“EY”) as the independent registered public accounting firm for the Company and its subsidiaries for the year ending December 31, 2021, subject to ratification of the stockholders at the Annual Meeting. EY has served as the independent registered public accounting firm of the Company since 2017. The lead audit partner was appointed in 2017. As in prior years, management and the Audit Committee engaged in a review of EY in connection with the Audit Committee’s review of whether to recommend that stockholders ratify the selection of EY as the Company’s independent registered public accounting firm for 2021. In that review, the Audit Committee considered, among other factors, (i) the continued independence of EY, (ii) whether retaining EY is in the best interest of the Company and its stockholders, (iii) EY’s known legal risks and significant proceedings that may affect its ability to perform the Company’s annual audit, (iv) EY’s fees and services provided to the Company and (v) the impact of changing independent registered public accounting firms. The Audit Committee considers the appointment of EY to be in the best interest of the Company and its stockholders.
In deciding to engage EY, the Audit Committee reviewed auditor independence and existing commercial relationships with EY, and concluded that EY had no commercial relationship with the Company that would impair its independence.
Representatives of EY will attend the Annual Meeting and be afforded an opportunity to make a statement, as well as be available to respond to appropriate questions submitted by stockholders. If the appointment is not ratified by stockholders, the selection of the Company’s independent registered public accounting firm will be reconsidered by the Audit Committee.
Audit Fees. Audit fees incurred by the Company to EY were $1,013,000 in 2020 and $984,000 in 2019. Audit fees incurred by the Company to EY for 2020 and 2019 include fees for professional services rendered for the audit of the Company’s annual financial statements for the years ended December 31, 2020 and 2019; the review of the financial statements included in the Company’s Forms 10-Q for the respective quarters in the years ended December 31, 2020 and 2019; financial audits and reviews for certain of the Company’s subsidiaries; services associated with documents filed with the SEC; and expenses incurred related to the performance of the services noted above.
Audit-Related Fees. Audit-related fees incurred by the Company to EY in 2020 were $15,700 for services associated with the Company’s registration statement filings. There were no similar expenses incurred in 2019.
Tax Fees. Tax fees incurred by the Company to EY were $8,200 in 2020 and $36,000 in 2019. Tax fees relate to the preparation of certain foreign tax returns.
All Other Fees. There were no other fees incurred by the Company to EY in 2020 and 2019.
The Audit Committee considered whether the provision of services described above under “Tax Fees” are compatible with maintaining EY’s independence. The Company does not believe that any reasonable concerns about the objectivity of EY in conducting the audit of the Company’s financial statements are raised as a result of the fees paid for non-audit-related services in 2020.
The Audit Committee has established policies and procedures for pre-approving audit and permissible non-audit work performed by its independent registered public accounting firm. As set forth in the pre-approval policies and procedures, unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committee if it is to be provided by the independent auditor. Any proposed services exceeding pre-approved cost levels require specific pre-approval by the Audit Committee.
Accordingly, at the Annual Meeting, stockholders will be asked to vote on the following resolution:
RESOLVED, that the action of the Audit Committee of the Board of Directors of the Company in appointing Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021 be, and it hereby is, ratified and approved.
Recommendation of the Board
The Audit Committee and the Board recommends a vote “FOR” such ratification.
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ADVISORY VOTE ON APPROVAL OF THE COMPENSATION OF THE NAMED
EXECUTIVE OFFICERS (PROPOSAL NO. 3)
As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), stockholders are being provided with the opportunity to cast an advisory vote on the compensation of the Named Executive Officers for 2020 as described beginning on the next page of this Proxy Statement in the section titled “Compensation Discussion and Analysis”.
As more fully described in that section, the Company’s executive compensation program is designed to promote the following objectives:
Attract, motivate, retain and reward highly-talented executives and managers, whose leadership and expertise are critical to the Company’s overall growth and success;
Compensate each executive based upon the scope and impact of his or her position as it relates to achieving the Company’s corporate goals and objectives, as well as on the potential of each executive to assume increasing responsibility within the Company;
Align the interests of the Company’s executives with those of its stockholders by linking incentive compensation rewards to the achievement of performance goals that maximize stockholder value; and
Reward the achievement of both the short-term and long-term strategic objectives necessary for sustained optimal business performance.
The Compensation Committee and the Board believe that the design of the executive compensation program, and hence the compensation awarded to the Named Executive Officers, fulfills these objectives.
Stockholders are urged to read the “Compensation Discussion and Analysis” section of this Proxy Statement and the accompanying compensation tables and narrative which describe in detail how the Company’s compensation policies and procedures implement the Company’s compensation philosophy and disclose the compensation paid to the Named Executive Officers for 2020.
Accordingly, at the Annual Meeting, stockholders will be asked to vote on the following resolution:
RESOLVED, that the stockholders of the Company hereby approve, in an advisory vote, the compensation of the Named Executive Officers for 2020 as described in the “Compensation Discussion and Analysis” section and in the accompanying compensation tables and narrative in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders.
As an advisory vote, the results of the vote will not be binding on the Board or the Company. However, the Board and the Compensation Committee value the opinion of the Company’s stockholders and will consider the outcome of the vote when making future decisions on the compensation of the Named Executive Officers and the Company’s executive compensation principles, policies and procedures. The affirmative vote of the holders of a majority of the outstanding shares of Common Stock present in person or represented by proxy and entitled to vote is required to approve the resolution.
Recommendation of the Board
The Board recommends a vote “FOR” advisory approval of the resolution set forth above and approval of the compensation of the Named Executive Officers for 2020 as disclosed in this Proxy Statement.
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COMPENSATION DISCUSSION AND ANALYSIS
General
This Compensation Discussion and Analysis (“CD&A”) discusses our 2020 executive officer compensation program. It describes our compensation philosophy; the objectives of the executive compensation program and policies in 2020; the elements of the compensation program; and how each element fits into our overall compensation philosophy. The Compensation Committee oversees the compensation paid to our executive officers, including under their employment agreements (described below).
The compensation of the executives who constitute INSW’s named executive officers (the “Named Executive Officers” or “NEOs”) is set out in the Summary Compensation Table following this CD&A. In 2020, our NEOs (all of whom were employees of INSW throughout the year) were as follows:
Incumbent
NEOs Position
Lois K. Zabrocky
President and Chief Executive Officer (“CEO”)
Jeffrey D. Pribor
Chief Financial Officer (“CFO”) Senior Vice President and Treasurer
James D. Small III
Chief Administrative Officer, Senior Vice President, General Counsel & Secretary
Derek G. Solon
Vice President (Chief Commercial Officer)
William F. Nugent
Vice President (Head of Ship Operations)
2020 Performance
We have a strong and measurable pay for performance philosophy. Accordingly, our operational and financial performance in fiscal years 2018, 2019 and 2020 are important factors in understanding our 2020 executive compensation. Please refer to “Who We Are – 2020 and First Quarter of 2021 in Review” above for a summary of our recent achievements. We believe that 2020 was a transformative year for the Company, as described in our 2020 Annual Report (a copy of which you can obtain as described in “Other Matters” below).
Say-on-Pay Results
At INSW’s 2020 Annual Meeting, approximately 99.1% of the stockholders who voted on the say-on-pay proposal (excluding broker non-votes) voted in favor of INSW’s executive compensation program. In considering that result, the Compensation Committee acknowledges the support received from its stockholders and views the result as an endorsement of INSW’s existing executive compensation policies and decisions.
The Company holds an annual say-on-pay vote by its stockholders, whose vote frequency was most recently approved by stockholders in 2017. The Company anticipates its next “say-when-on-pay” vote will be conducted at the 2023 Annual Meeting of Stockholders. The Compensation Committee will continue to engage with stockholders and will consider feedback from them, as well as the results from this year’s and future advisory votes on executive compensation, when evaluating INSW’s executive compensation program and policies.
Compensation Philosophy, Objectives and Practices
Compensation Philosophy and Objectives
The Company believes that a well-designed compensation program is a powerful tool to attract, motivate, retain and reward top executive and managerial talent. INSW further believes that the compensation program should align the interests of executives with those of stockholders in achieving and sustaining increases in stockholder value over both the short- and long-term.
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The Company’s compensation program is structured to drive and support these goals, and is designed with the following objectives in mind:
COMPENSATION PROGRAM OBJECTIVES
Overall Objectives
Attract, motivate, retain and reward highly-talented executives and managers, whose leadership and expertise are critical to our overall growth and success.
 
 
 
 
 
Align the interests of our executives with those of our stockholders.
 
 
 
 
 
Support the long-term retention of the Company’s executives to maximize opportunities for teamwork, continuity of management and overall effectiveness.
 
 
 
 
 
Compensate each executive competitively (1) within the marketplace for talent in which we operate; (2) based upon the scope and impact of his or her position as it relates to achieving our corporate goals and objectives; and (3) based on the potential of each executive to assume increasing responsibility within the Company.
 
 
 
 
 
Discourage excessive and imprudent risk-taking.
 
 
 
 
 
Structure the total compensation program to reward the achievement of both the short-term and long-term strategic objectives necessary for sustained optimal business performance.
 
 
 
 
Pay Mix Objectives
Provide a mix of both fixed and variable (“at-risk”) compensation, each of which has a different time horizon and payout form (cash and equity), to reward the achievement of annual and sustained, long-term performance. For the 2020 fiscal year, the pay mix at target for the Chief Executive Officer and the average for the other NEOs is displayed below.
 
 
 
 
 
Pay-For-Performance Objectives
Use our incentive compensation program and plans to align the interests of our executives with those of our stockholders by linking incentive compensation rewards to the achievement of performance goals that maximize stockholder value by:
 
 
 
 
 
 
Ensuring our compensation programs are consistent with, and supportive of, our short-term and long-term strategic, operating and financial objectives.
 
 
 
 
 
 
Placing a significant portion of our executives’ compensation at risk, with payouts dependent on the achievement of both corporate and individual performance goals, which are set annually by the Compensation Committee.
 
 
 
 
 
 
Encouraging balanced performance by employing a variety of performance measures to avoid over-emphasis on the short-term or any one metric.
 
 
 
 
 
 
Applying judgment and reasonable discretion in making compensation decisions to avoid relying solely on formulaic program design, taking into account both what has been accomplished and how it has been accomplished in light of the existing commercial environment.
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Executive Compensation Practices
Our goal is to maintain an executive compensation program that is competitive, rooted in the principles of pay-for-performance and in conformance with best practices in executive compensation and corporate governance. To this end, the Compensation Committee routinely evaluates its practices and programs with respect to executive compensation to identify opportunities for improvement. The Compensation Committee believes a significant portion of the NEOs’ total compensation should be variable and “at risk,” based upon Company earnings from shipping operations (“ESO”) achievement, business/operational metrics and individual performance. To accomplish this, the Compensation Committee uses a balanced weighting of performance measures and metrics in its incentive compensation programs (i) to promote the achievement of its annual operating plan and long-term business strategy; (ii) to build long-term stockholder value; and (iii) to discourage excessive risk taking by eliminating any inducement to over-emphasize one goal to the detriment of others.
The following table summarizes key features of our executive compensation program.
WHAT WE DO
 
 
 
Stock Ownership Guidelines
We maintain, and track progress against stock ownership guidelines for our executives and directors.
 
 
Anti-Hedging and Anti-Pledging Policies
We maintain policies and procedures for transactions in the Company’s securities that are designed to ensure compliance with all insider trading rules and that prohibit all hedging, pledging and short-selling of our stock by all officers and employees.
 
 
Compensation Recoupment (“Clawback”) Policy
All of our incentive compensation plans and the terms of our equity agreements provide that the Compensation Committee may seek reimbursement of incentives paid or equity-related proceeds provided to an executive officer if it is later determined that the executive officer engaged in misconduct, acted in a manner contrary to the Company’s interest or breached a non-competition agreement.
 
 
WHAT WE DO NOT DO
 
 
 
Excise Tax Gross-Ups
We do not provide for excise tax gross-ups.
 
 
Supplemental Executive Retirement Plans (“SERPs”)
We do not provide any SERPs, and our legacy SERP was frozen to new participants in November 2012. In 2020, the Human Resources and Compensation Committee resolved to terminate the INSW legacy SERP.
Roles in Setting Executive Compensation
Role of the Compensation Committee
Structure of the Compensation Committee: In 2020, the Compensation Committee consisted of three members of the Board, each of whom qualified as “independent” under the NYSE listing standards and applicable independence standards under the 1934 Act and the Dodd-Frank Act. Recognizing the importance of independent perspectives, the Compensation Committee regularly meets in executive session, without any members of management present.
Objectives of The Compensation Committee and the Decision-Making Process: The primary goals of the Compensation Committee are to establish the Company’s compensation philosophy and strategy and to ensure that the Company’s executives are compensated in a manner consistent with the articulated philosophy and strategy. The Compensation Committee takes many factors into account when making compensation decisions with respect to the NEOs and other senior executives, including the individual’s performance, tenure and experience; the ability of the individual to affect long-term growth and success;
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INSW’s overall performance; internal equity among the NEOs; and external, publicly available market data on competitive compensation practices and levels.
Role of Outside Advisors: The Compensation Committee has the authority to engage independent advisors to assist in carrying out its duties. The Compensation Committee has engaged Lyons, Benenson & Company Inc. (“LB&Co.”) as its independent compensation consultant to advise on executive and director compensation arrangements and related governance matters. Additionally, LB&Co. assisted management in the preparation of this Proxy Statement.
Compensation Consultant Conflict of Interest Assessment: As required by rules adopted by the SEC under the Dodd-Frank Act, the Compensation Committee assessed all relevant factors and determined that the work of LB&Co. did not raise any conflict of interest in 2020. In making this determination, the Compensation Committee considered all relevant factors, including those set forth in Rule 10C-1(b)(4)(i) through (vi) under the 1934 Act.
Role of the CEO in Setting CEO and Other Executives’ Compensation
All decisions relating to the compensation of Ms. Zabrocky, INSW’s CEO, are made by the Compensation Committee without her or other members of management present. In making determinations regarding compensation for INSW’s other NEOs and other selected senior executives, the Compensation Committee generally considers the recommendations of the CEO (for all executives other than herself), and advice received from LB&Co. The CEO recommends the compensation levels for the other NEOs and for all others whose compensation is determined by the Compensation Committee. In making her recommendations, the CEO evaluates the performance of each executive, considers each executive’s compensation in relation to the other officers and executives (“internal equity”) and assesses retention risks. The CEO’s recommendations are subject to review by and, in some cases modification by, and ultimately approval of, the Compensation Committee or, when sufficiently material, the full Board.
All 2020 compensation decisions (including base salaries, annual incentive and long-term incentive target percentages and annual incentive and long-term incentive performance measures and goals) were made under the auspices of the Compensation Committee. Additionally, the Compensation Committee was responsible for the review and certification of the 2020 performance results that determined the annual incentive and long-term incentive payouts for the NEOs.
Consideration of Compensation Peer Group
The Compensation Committee examines the executive compensation of a group of peer companies to stay current with market pay practices and trends, and to understand the competitiveness of our total compensation and its various elements. In general, we strive for total compensation to be competitive with a select group of companies that the Compensation Committee believes to be an appropriate compensation reference group (the “Peer Group”). The Compensation Committee reviews the Peer Group on a regular basis to affirm that it is comprised of companies that are similar to us in terms of industry focus and scope of operations, size (based on revenues and market capitalization), and the competitive marketplace for talent.
While the Compensation Committee believes the data derived from any peer group is helpful, it also recognizes that benchmarking is not necessarily definitive in every case, as there are unique aspects of company performance – for example, work relating to strategic initiatives – that may not apply to peer companies or be apparent based on benchmarking comparisons. Furthermore, the Peer Group is limited to those companies for which executive compensation data is publicly available, which necessarily eliminates some of INSW’s closest competitors that are privately held and/or incorporated in jurisdictions that do not require public disclosure of executive compensation. The Compensation Committee, therefore, uses the information from the Peer Group for informational and analytical purposes, but does not make compensation decisions based solely on this market data. With this in mind, INSW augments the Peer Group data with publicly-available survey data, and uses all compensation data in conjunction with annual assessments of corporate and individual performance to make recommendations and decisions on the compensation arrangements applicable to the Company’s NEOs.
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2020 Peer Group. The Peer Group for 2020 consisted of 12 publicly traded oil, shipping and transportation companies, with a significant international focus. For the 2019 fiscal year the total revenues of this group ranged between $158 million and just over $2.8 billion, with median revenues of approximately $557.4 million. For the 2020 fiscal year, the total revenues of this group ranged between $141.8 million and $2.38 billion, with median revenues of some $643.5 million. The following 12 companies comprised the 2020 Peer Group:
DHT Holdings, Inc.
Genesis Energy, L.P.
Diamond S Shipping Inc.
Dorian LPG Ltd.
Kirby Corporation
Matson, Inc.
Eagle Bulk Shipping Inc.
SEACOR Holdings Inc.
Euronav NV
SEACOR Marine Holdings Inc.
Genco Shipping & Trading Limited
Tidewater Inc.
2021 Peer Group. At the end of 2020, a decision was made to reassess the Peer Group for 2021. For 2021, the Compensation Committee decided and approved that the Peer Group would remain unchanged.
Elements of the 2020 Executive Officer Compensation Program
The Compensation Committee reviews each element of compensation annually to ensure it aligns with our compensation philosophy and objectives, as well as to assess INSW’s executive compensation program and levels relative to the competitive landscape. The executive compensation program consists of the following:
Base salary
Annual (performance based cash) incentive compensation
Long-term (equity) incentive compensation
Severance arrangements through employment agreements
Retirement benefits generally available to all employees
Welfare and similar benefits (e.g., medical, dental, disability and life insurance)
INSW seeks to provide competitive “fixed” compensation in the form of base salary while emphasizing a pay-for-performance culture in which we place a larger portion of total compensation “at-risk” in the form of annual performance-based cash incentives (which will only be paid if INSW achieves specified performance goals) and long-term equity incentives (which vest over a multi-year period and, in certain cases, also depend on the achievement of specific performance goals).
Base Salary
We strive to pay base salaries that are market competitive to attract talented executives and to provide a secure fixed level of compensation to our executives and managers. The Compensation Committee reviews the base salaries of the executive officers and compares them to the salaries of senior management among the Peer Group companies, bearing in mind that total estimated direct compensation opportunity is the principal comparative measure of the competitiveness of our program. Based on its own experience and that comparison, the Compensation Committee determines whether the NEO salaries, taken together with other elements of compensation, are at levels sufficient to attract, motivate and retain the executives who are essential to leading the Company and driving stockholder value.
Annual adjustments in base salary, if any, consider individual performance, position duties and responsibilities, internal equity and external market practices. The Compensation Committee generally relies on the CEO’s evaluation of each NEO’s performance (other than her own) in deciding whether to recommend and/or approve merit increases for any NEOs in a given year. In those instances where the duties and responsibilities of a NEO change, the CEO may recommend any adjustments believed to be warranted, and the Compensation Committee will consider all the factors above in determining whether to approve any such changes.
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With respect to those employees who were NEOs in 2020, increases in base salary from 2019 to 2020 for Ms. Zabrocky and Messrs. Pribor, Small, Solon and Nugent were 9.8%, 2.0%, 2.1%, 6.7% and 6.7%, respectively. The following table summarizes 2020 base salaries for our NEOs.
Name
Position
2020 Salary
Lois K. Zabrocky
President and Chief Executive Officer
$675,000
Jeffrey D. Pribor
Chief Financial Officer, Senior Vice President and Treasurer
$510,000
James D. Small III
Chief Administrative Officer, Senior Vice President, General Counsel & Secretary
$485,000
Derek G. Solon
Vice President (Chief Commercial Officer)
$320,000
William F. Nugent
Vice President (Head of Ship Operations)
$320,000
2020 Annual (Cash) Incentive Plan
Pursuant to the Company’s currently effective Management Incentive Compensation Plan (the “MICP”), NEOs are eligible to receive annual cash incentives based upon the achievement of specified annual performance goals, which are established and approved by the Compensation Committee during the first quarter of the performance year. Our annual cash incentive plan, which for the NEOs generally reflects the terms of the annual cash incentive plan available to all employees, is intended to focus our NEOs on our critical, short-term financial and operational goals. As in past years, the financial performance measure for 2020 was ESO. ESO is a non-GAAP measure defined as income from vessel operations before depreciation and amortization, gains and losses from vessel sales (including impairments), stock compensation expenses and third-party debt modification fees, reduced by expenditures for drydockings and vessel expenditures, which we use for compensation purposes. ESO for INSW was income of $159.2 million in 2020. The NEO awards were also based on quantifiable measures of our performance against corporate metrics, business/operational metrics (including safety), in addition to individual performance goals. The following table reconciles income from vessel operations for 2020, as reflected in the consolidated statements of operations of the Company for 2020 set forth in the 2020 Annual Report, to ESO:
(Dollars in thousands)
 
Income from vessel operations
$39,880
Depreciation and amortization
74,343
Loss on sale of vessels, including impairments
100,087
Non-cash stock compensation expense
5,631
Third-party debt modification fees
232
 
220,173
Drydock expenditures (accrual basis)
(27,835)
Vessel expenditures (excluding $16,925 for secondhand vessel purchases)
(33,124)
Earnings from Shipping Operations (ESO)
$159,219
For 2020, the annual incentive target for Ms. Zabrocky was 125% of her base salary; the annual incentive targets for Messrs. Pribor and Small were 100% of their respective base salaries and the annual incentive targets for Messrs. Solon and Nugent were 85% of their respective base salaries. Based on the weighting described below, the potential actual incentive payout range for Ms. Zabrocky and Messrs. Pribor and Small was 0% to 142% of target, while for Messrs. Solon and Nugent the range was 0% to 137%.
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NEOs have different weights ascribed to their Company ESO, business/operational and individual goals, each of which is a component of the payout calculation. The specific weights were established based on the scope of each NEO’s role and their respective abilities to affect the results, and were ultimately recommended by the CEO and approved by the Compensation Committee. The following table sets forth the weights by component and NEO.
Individual
Company
ESO
Business/
Operational
Metrics
Individual
Performance
Goals
Ms. Zabrocky
60%
15%
25%
Messrs. Pribor and Small
60%
10%
30%
Messrs. Solon and Nugent
33.3%
33.3%
33.4%
For 2020, each goal was assessed on an achievement scale of between 70% and 130%, with 100% reflecting target level, 130% being the maximum level, and a score of 0% given for achievement below 70%.
For ESO achievement, the performance factor (i.e., payout) can range from 0% to a maximum of 150% (corresponding with a 130% ESO achievement level, as detailed below).
For the business/operational metrics and individual performance goals, the payout can range from 0% to a maximum of 130% (corresponding with actual achievement level).
If the achievement level for ESO is below 70%, the payout on the metrics cannot exceed its target (100%) and the payout on the individual performance goals component (MBO) cannot exceed 50% of the individual performance goals (MBO) target.
If the achievement level for the business/operational metrics is below 70%, the performance factor (payout) for this measure is zero, resulting in no bonus being payable in respect of this measure.
If the individual performance achievement level for any NEO is below 70%, it would result in no bonus being payable on this metric.
2020 Company ESO Goal. For 2020, the table below sets forth the ESO performance thresholds at INSW and the corresponding amounts that would be earned (expressed as percentages of target) by the NEOs at each level of achievement.
($ Thousands)
 
ESO Threshold
Performance Factor (Payout As a % of Target)
%
Achievement
2020
50.00%
70%
(1,839)
58.40%
75%
16,963
66.70%
80%
35,765
75.00%
85%
54,567
83.30%
90%
73,369
91.70%
95%
92,171
100.0%
100%
110,973
108.4%
105%
129,775
116.7%
110%
148,577
125.0%
115%
167,379
133.3%
120%
186,181
141.7%
125%
204,983
150.0%
130%
223,785
In 2020, the ESO result was $159.2 million which was an achievement of 110% for this metric which corresponded to a performance factor (payout) of 116.7%.
INSW Business/Operational Metrics. For 2020, the INSW business and operational metrics were weighted equally.
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The business metrics related to (a) the time charter equivalent (“TCE”) performance of INSW’s VLCCs, Aframaxes, Suezmaxes, Panamaxes and MRs TCE compared with spot TCE rates of competitors or market spot TCE rates published by a third party maritime research service for Panamaxes; and (b) minimizing the discount received on the Company’s older VLCCs compared with the TCE achieved on its more modern units.
The operational metrics included (a) achieving or doing better than the INSW vessel operating budget; (b) vetting observations — a metric that indicates acceptability of our fleet to our customers; (c) total recordable case frequency — a metric that tracks safety within the fleet; (d) vessel visits — number of visits to a vessel by shoreside staff, a metric that indicates corporate culture and “tone at the top.”; (e) time not earning (technical) — a metric that measures operational availability; and (f) an environmental performance metric based on propulsion efficiency, which is intended to encourage environmental efficiency consistent with our stated commitment to ESG initiatives, and which the Company included for the first time. Although it was planned for 2020, vessel visits were not possible due to the COVID-19 pandemic and therefore this metric was not factored in the operational metrics result for 2020.
The overall INSW performance score for business/operational metrics for 2020 was 112%.
Individual Performance Goals. Each of our NEOs also had individual performance goals established by the Compensation Committee. The individual goals for 2020 covered a broad range of performance indicators that included, among others, the following (although not all goals listed below applied to all NEOs):
Identifying, developing and executing business strategy;
Achieving revenue, operating expenses and general and administrative expense targets;
Enhancing lines of communication with key customers and investors;
Evaluating strategic alternatives;
Evaluating financial initiatives, capital allocation choices and balance sheet recapitalization;
Further establishing and executing ESG initiatives, including the Company’s “get to green” initiative;
Reviewing and identifying operational risks and performing risk assessments; and
Assessing and engaging in special projects, including additional fleet renewal assessments, business development, scrubber technology rollout, capital management, leadership development, insurance projects, disaster planning, contingency planning, succession planning and financial strategy and reporting.
After the 2020 performance year, the Compensation Committee assessed the level of achievement of our NEOs relative to their respective individual performance goals. Following this assessment, it was determined that Ms. Zabrocky and Messrs. Pribor, Small, Solon and Nugent achieved their individual goals at above target levels.
2020 Actual Annual Incentive Paid. Based on the foregoing, the NEOs received the following annual cash incentive awards for 2020: Ms. Zabrocky – $971,384; Mr. Pribor – $588,836; Mr. Small – $551,241; Mr. Solon – $305,607; and Mr. Nugent – $308,333.
Equity-Based Compensation
INSW’s equity-based compensation program is intended to align the interests of its executives with those of its stockholders, and to focus executives on achieving long-term performance objectives aligned with the Company’s business strategy, thereby establishing a direct relationship between compensation, long-term operating performance and sustained increases in stockholder value. The MICP became effective as of November 18, 2016 and provided for awards of long-term equity compensation to be made to employees through April 2020 when the Company ceased making awards under such plan. In April 2020, the Company adopted the 2020 Management Incentive Compensation Plan (the “2020 MICP”) and the 2020 Non-Employee Director Incentive Compensation Plan (the “2020 Director Plan”), which
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provide long-term equity compensation for employees and non-employee directors, respectively, and succeed the MICP and a prior Non-Employee Director Incentive Compensation Plan. The 2020 MICP provides for grants of nonqualified stock options, incentive stock options, stock appreciation rights, performance units, performance shares and other performance awards, restricted stock units and restricted stock, and other awards valued in whole or in part by reference to, or otherwise based on, INSW stock. The primary purpose of the 2020 MICP and the 2020 Director Plan is to facilitate the grant of equity and cash incentives to employees (including our NEOs) and equity compensation to non-employee directors of the Company, and to enable the Company to obtain and retain the services of these individuals, which is essential to our long-term success. INSW reserved 1,400,005 shares for issuance under the 2020 MICP (including five shares that were reserved but not granted under the MICP) and 460,774 shares for issuance under the 2020 Director Plan (including 60,774 shares that were reserved but not granted under a prior Non-Employee Director Incentive Compensation Plan). The 2020 MICP contains an anti-dilution provision whereby in the event of certain corporate changes in the Company, outstanding awards may be adjusted, as appropriate, to prevent dilution or enlargement of rights. The terms of the MICP, the 2020 MICP and the 2020 Director Plan are set forth in Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 25, 2016, in Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 8, 2020 (the “April 2020 Form 8-K”) and in Exhibit 10.2 to the April 2020 Form 8-K, respectively.
Consistent with our practices and in each case pursuant to the terms of the MICP, equity awards may be granted from time to time to motivate and retain executives and other key managers and employees and to align their interests with stockholders.
2020 Awards. In April 2020, the Compensation Committee approved the following long-term incentive award date values for Ms. Lois K. Zabrocky and Messrs. Jeffrey D. Pribor, James D. Small III, Derek G. Solon and William F. Nugent:
Incumbent
Total Grant
Date Value
Stock
Options
Time-Based
RSUs
Performance- Based RSUs
Lois K. Zabrocky
$1,687,000
$562,500
$562,500
$562,500
Jeffrey D. Pribor
$765,000
$255,000
$255,000
$255,000
James D. Small III
$606,250
$202,083
$202,083
$202,083
Derek G. Solon
$320,000
$186,667
$186,667
$186,667
William F. Nugent
$320,000
$186,667
$186,667
$186,667
The time-based restricted stock units (“RSUs”) and stock options vest and become exercisable in equal amounts on the first, second and third anniversaries of the grant date of April 2, 2020. The 2020 performance-based restricted stock units (“PRSUs”) awards vest as follows: (i) one-half of the target PRSUs vest on December 31, 2022, subject to INSW’s three-year Return on Invested Capital (“ROIC”) performance; and (ii) one-half of the target PRSUs vest on December 31, 2022, subject to INSW’s three-year total shareholder return (“TSR”) performance relative to that of a performance peer group. Vesting is subject in each case to the Compensation Committee’s certification of achievement of the performance targets no later than March 15, 2023.
The funding formulas applicable to the PRSUs granted in April 2020 are as follows:
The cumulative target ROIC for the three-year period is 5.3% (with a minimum threshold performance achievement of 2.3% resulting in 50% of the applicable PRSUs vesting, and a maximum performance achievement of 8.3% resulting in 150% of the applicable PRSUs vesting).
TSR performance is described in the following table. If the absolute value of three-year TSR is negative, then the payout for the TSR component of the PRSUs is capped at 100%; this was a newly added provision in 2019.
TSR
Threshold
Target
Maximum
Performance Achievement
25th Percentile
50th Percentile
90th Percentile
Payout
50%
100%
150%
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Upon termination of employment for any reason, all unvested PRSUs will be forfeited unless the NEO’s respective employment agreement provides otherwise.

Human Capital Resources
Management depends on the Company’s workforce to provide superior service and to ensure its vessels are operated safely and securely. Seafarers are hired by the technical managers acting as agent for the individual ship owning companies, each of which is a subsidiary of INSW. We are committed to creating a safe, healthy and secure workplace at sea and ashore. We are also committed to providing safe, reliable and environmentally sound transportation to our customers. The development, attraction and retention of employees at sea and ashore is a critical success factor for the Company for succession planning and sustaining our core values.
COVID-19
In March 2020, the World Health Organization (“WHO”) recognized the novel coronavirus (“COVID-19”) as a pandemic. We implemented various measures to protect our seafarers and shore-based personnel and reduce the spread of the virus. Strict quarantine and testing protocols were implemented for personnel on, and visitors to, our vessels. We leveraged our IT infrastructure and various technology tools to enable our shore-based personnel to work seamlessly from home. The COVID-19 pandemic continues to impede our ability to rotate crew members on and off our fleet of vessels in a timely and efficient manner due to changing immigration rules, mandatory quarantine requirements and limited air travel.
ESG
In 2020, INSW issued its inaugural ESG report for 2019. The report outlines our ESG metrics and performance as well as our vision and goals for the future.
2021 Compensation Decisions
Base Salary Decision:
On March 17, 2021, base salaries were increased for Mr. Pribor (from $510,000 to $530,000), Mr. Solon (from $320,000 to $333,000) and Mr. Nugent (from $320,000 to $333,000), in each case retroactive to January 1, 2021. Ms. Zabrocky and Mr. Small’s salary will continue at the same rate for 2021.
Annual Incentive Decisions:
The design of INSW's 2021 annual cash incentive plan is generally consistent with INSW's 2020 annual cash incentive plan. In 2021, pursuant to the terms of their employment agreements with the Company, as amended, Ms. Zabrocky will continue to have a target annual incentive equal to 125% of base
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salary , and Messrs. Pribor and Small will each continue to have a target annual incentive equal to 100% of their base salaries. In addition, Messrs. Solon and Nugent will each have a target annual incentive equal to 85% of base salary.
Long-Term Equity Awards Decisions:
On March 17, 2021, the Compensation Committee awarded each of the NEOs equity grants with a fair market value as of the grant date of approximately (1) for Ms. Zabrocky, 250% of her base salary ; (2) for Mr. Pribor, 150% of his base salary; (3) for Mr. Small, 125% of his base salary; and (4) Messrs. Solon and Nugent, 125% of their respective base salaries (an increase from 100%). These equity grants were divided equally among time-based RSUs, stock options and PRSUs.
Ms. Zabrocky, as President and CEO, does not receive additional compensation for services as a director of the Company.
Employment Agreements with the NEOs
Employees of INSW Classified as NEOs for 2020
INSW has employment agreements with Ms. Zabrocky and Messrs. Pribor and Small. Under the terms of those agreements, Ms. Zabrocky and Messrs. Pribor and Small are entitled to certain compensation arrangements and severance benefits as detailed in the paragraphs below. Although Messrs. Solon and Nugent do not have formal contractual employment agreements with INSW, they are also entitled to certain compensation arrangements and severance benefits. Please see “Potential Payments Upon Termination and Change in Control” in the “Summary Compensation Data” section of this Proxy Statement. In addition, each NEO (whether or not his or her employment relationship with INSW is governed by a formal contractual employment agreement) is entitled to vacation in accordance with INSW policy, and each of them participates in medical, dental, and life insurance, as well as retirement and other benefit plans as may be in effect from time to time on a similar basis to all other INSW employees. Each of the employment agreements also provides for the possibility of annual equity grants at the discretion of the Board upon recommendation from the Compensation Committee.
Under the terms of the employment agreements for Ms. Zabrocky and Messrs. Pribor and Small, if an executive’s employment is terminated by INSW for any reason or terminated voluntarily by the executive, he or she is entitled to the following payments (“Accrued Payments”):
any earned, unpaid base salary through the date of termination;
any earned, unpaid annual bonus applicable to the performance year prior to the termination;
payment for any accrued, but unused vacation through the date of termination; and
reimbursement of any business expenses not reimbursed as of the date of termination.
If any such executive’s employment is terminated by reason of death or permanent disability, INSW will pay the Accrued Payments to the executive or the executive’s estate, and INSW will vest any non-performance-based equity previously granted to the executive that has not yet vested.
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The following table summarizes certain terms of the Company’s employment agreements, including the termination provisions in the event of a termination without cause by the Company, or resignation by the executive with good reason, with Ms. Zabrocky and Messrs. Pribor and Small as in effect on December 31, 2020 (and describing amendments to those agreements made during 2020 and 2021):
Name and
Current
Position
Date of
Original
Agreement
Base
Salary at
12/31/2020
Bonus
Target at
12/31/2020
Additional Terms / Amendments to Employment Agreements in 2020 and 2021
Lois K. Zabrocky
President and CEO
9/29/14 (originally entered into with OSG; assumed in Spin-Off)
$675,000
125%
Severance benefits in the event of termination without cause or resignation with good reason include:
 
salary continuation for 24 months
 
a lump sum payment of $1,049,999
 
accelerated vesting of all outstanding and unvested options, RSUs and other equity-based grants or cash in lieu of grants that in all cases are not performance-based upon a termination without cause, for good reason, by death or disability; performance-based awards will be treated as set out below in the “Potential Payments Upon Termination and change in Control” section
Equity grant target set at 250% of base salary for 2020
Amended as of April 2, 2020 to increase base salary and target bonus for 2020 to $675,000 and 125% of base salary, respectively
 
 
 
 
 
 
 
Jeffrey D. Pribor
Senior Vice President, CFO and Treasurer
11/9/16
$510,000 (increasing to $530,000 for 2021)
100%
Severance benefits in the event of termination without cause or resignation with good reason include:
 
12 months’ continuation of annual base salary plus Target Bonus (18 months’ in the event of a change in control)
 
a lump sum payment of a pro rata portion of his annual bonus based on actual achievement
 
accelerated vesting of the outstanding time-based awards that would have vested on the next regularly scheduled vesting date following the termination date
 
pro-rated vesting of all performance-based RSUs and other equity-based grants, to the extent the applicable performance goals are achieved
Equity grant target set at 150% of base salary for 2020.
Amended on March 17, 2021 to increase base salary to $530,000 for 2021.
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Name and
Current
Position
Date of
Original
Agreement
Base
Salary at
12/31/2020
Bonus
Target at
12/31/2020
Additional Terms / Amendments to Employment Agreements in 2020 and 2021
James D. Small III
Senior Vice President, Chief Administrative Officer, Secretary & General Counsel
2/13/15 (originally entered into with OSG; assumed in Spin-Off)
$485,000
100%
Severance benefits in the event of termination without cause or resignation with good reason include:
 
 
 
 
salary continuation for 24 months
 
 
 
 
a lump sum payment of $950,000
 
 
 
 
accelerated vesting of all outstanding and unvested time-based options, RSUs and other equity-based grants upon a termination without cause, for good reason, by death or disability; performance-based awards will be treated as set out below in the “Potential Payments Upon Termination and Change in Control” section
 
 
 
Equity grant target set at 125% of base salary for 2020 and 2021
 
 
 
Amended as of April 2, 2020 to increase base salary to $485,000 for 2020.
The Company has entered into its standard offer letter with Messrs. Solon and Nugent, except that each of Messrs. Solon and Nugent have an additional letter providing for their years of service to be treated as 26 years of service solely with regard to the terms of the INSW severance plan and the specific terms as described in their equity grant letters. On April 2, 2020, each of their annual base salaries was increased to $320,000 from $300,000 and each of their target bonuses increased to 85% from 70% of base salary. On March 17, 2021, each of their annual base salaries was increased to $333,000 from $320,000 and each of their equity grant targets increased to 125% from 100% of base salary. On March 17, 2021, each of Messrs. Solon and Nugent was elected a Senior Vice President of the Company.
Additional Information
Benefits
In general, INSW provides benefits to its employees that we believe are important to maintaining a competitive total compensation program. Benefits are designed to provide a reasonable level of retirement income and to provide a safety net for protection against the financial concerns and catastrophes that can result from illness, disability or death.
INSW provides a tax-qualified defined contribution employee benefit plan to employees, which for 2021 is the EngagePEO Retirement Savings Plan (the “Savings Plan”). Under the Savings Plan eligible employees may contribute, on a pre-tax basis, an amount up to the limit imposed by and the Internal Revenue Code of 1986, as amended (the “Code”). Under the Savings Plan, INSW will match 100% of the first 6% of a participant’s pre-tax contribution (up to the Code limit) which for 2020 was $17,100.
INSW does not currently have any plans that provide for payments or other benefits at, following or in connection with the retirement of our employees, other than the Savings Plan and the INSW SERP (as described in the following paragraph). INSW also assumed OSG’s obligations under the retiree medical plan with respect to those OSG employees who continued to work for INSW after the Spin-Off.
In December 2017, INSW formally adopted the INSW Supplemental Executive Retirement Plan (“INSW SERP”), pursuant to which INSW formally documented its assumption of existing obligations under OSG’s Supplemental Executive Retirement Plan (the “OSG SERP”), which were assumed in connection with the Spin-Off. INSW employees who participated in the OSG SERP prior to the Spin-Off (including Ms. Zabrocky) now participate in the INSW SERP, which is frozen to new contributions and pays interest on assumed obligations at an annual rate of 2.98%. We do not provide any SERPs, and our legacy SERP was frozen to new participants in November 2012. The Human Resources and Compensation Committee in October 2020 resolved to terminate the INSW SERP.
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Risk Mitigation
Hedging, Pledging and Insider Trading. INSW’s insider trading policy prohibits its directors and employees from hedging their ownership of its securities, including investing in options, puts, calls, short sales, futures contracts or other derivative instruments relating to its securities or pledging securities directly owned by them, regardless of whether such directors and employees have material nonpublic information about INSW. The policy also prohibits INSW directors and employees from purchasing or selling its securities while in possession of material nonpublic information or otherwise using such information for their personal benefit. Directors and employees are permitted to enter into trading plans under Rule 10b5-1 under the 1934 Act. With the approval of INSW’s General Counsel, a 10b5-1 Plan may be entered into during a time when the equity participant is not in possession of material, non-public information. These plans are intended to aid the equity participants in diversifying their portfolios without violating federal securities laws.
Incentive Compensation Recoupment Policy for Executive Officers. INSW’s Incentive Compensation Recoupment Policy generally provides that if an executive officer, including any NEO, receives cash or equity-based incentive compensation based on the achievement of a performance metric and the Board commenced action to restate the calculation of such performance metric within five fiscal years due to a material misstatement or inaccuracy, INSW may require such executive officer to repay all or a portion of the amounts of such incentive compensation that the Board in good faith determines would not have been payable if not for the material misstatement or inaccuracy. The five-year look back limitation does not apply where the Board determines that the executive officer’s fraud, misconduct, negligence or other knowing actual involvement was a contributing factor to the need for the restatement. The Compensation Committee is monitoring the proposed regulations under the Dodd-Frank Act among others relating to incentive compensation recoupment and will amend the policy to the extent necessary to comply with the Dodd-Frank Act among others.
Stock Ownership Guidelines. INSW encourages stock ownership by its executives and non-employee directors in order to align their interests with the long-term interests of its stockholders. INSW has adopted stock ownership guidelines for non-employee directors and executive officers of the Company. As measured on January 1 of each fiscal year, each non-employee director and officer of the Company (including the NEOs) is expected to own a number of shares of INSW common stock priced at the closing price on the last trading day of the prior fiscal year equal to a specified multiple of his or her salary (or, in the case of the independent, non-employee members of the Board, a multiple of his or her annual cash retainer) as follows:
President and CEO — 5 × base salary
Senior Vice Presidents — 2 × base salary
Vice Presidents — 1 × base salary
Independent Non-Employee Directors — 3 × annual board service cash retainer
NEOs and independent, non-employee directors are afforded five years from the later of (1) the adoption of the ownership guidelines following the Spin-Off and (2) the time they first received an equity grant from INSW to achieve these ownership guidelines. For purposes of satisfying the guidelines, shares of common stock deemed to be owned include (a) stock owned outright by the incumbent, his or her spouse and minor children; (b) vested time-based restricted stock or RSUs; (c) vested PRSUs where the performance criteria have been satisfied; (d) vested in-the-money stock options (counted based on the number of shares underlying such in-the-money options); and (e) shares of stock held for the incumbents’ benefit in any pension or 401(k) plan. Unvested time-based RSUs and PRSUs do not count towards satisfying the guidelines. INSW’s directors and executive officers have made progress towards meeting these goals since the Spin-Off.
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Report of the Compensation Committee
The Compensation Committee, comprised entirely of independent directors (as defined under U.S. securities laws, NYSE listing standards and applicable guidelines under the Code), has reviewed the CD&A included in this Proxy Statement and discussed that CD&A with management. Based on its review and discussion with management, the Compensation Committee approved the CD&A and recommended to the INSW Board of Directors that the CD&A be included in this Proxy Statement.
 
Compensation Committee:
 
 
 
Timothy J. Bernlohr, Chair
 
Randee E. Day
 
Ty E. Wallach
 
 
 
April 23, 2021
In accordance with the rules of the SEC, the report of the Compensation Committee does not constitute “soliciting material” and is not incorporated by reference in any filings with the SEC made pursuant to the 1933 Act or the 1934 Act.
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SUMMARY COMPENSATION DATA
Summary Compensation Table
The following Summary Compensation Table includes individual compensation information for services in all capacities for the Company received by the individuals identified as NEOs of the Company.
Name and Principal
Position
Year
Salary(1)
Bonus
Stock
Awards(2)(3)
Option
Awards(4)
Non-Equity
Incentive Plan
Compensation(5)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
All Other
Compensation(6)
Total
Lois Zabrocky President and Chief Executive Officer
2020
$671,539
$—
$1,125,000
$562,500
$971,384
$—
$43,685
$3,374,108
2019
$614,942
$—
$939,989
$410,000
$813,833
$—
$37,153
$2,815,917
2018
$600,000
$—
$800,000
$399,997
$567,720
$—
$36,899
$2,404,616
Jeffrey D. Pribor Senior Vice President, Chief Financial Officer and Treasurer
2020
$509,923
$—
$510,000
$255,000
$588,836
$—
$36,886
$1,900,645
2019
$499,808
$—
$619,989
$250,000
$577,800
$—
$31,952
$1,979,549
2018
$450,000
$—
$657,460
$225,000
$426,645
$—
$24,666
$1,783,771
James D. Small III Senior Vice President, Chief Administrative Officer, Secretary and General Counsel
2020
$484,923
$—
$404,167
$202,083
$551,241
$—
$26,762
$1,669,176
2019
$475,000
$—
$515,822
$197,917
$549,195
$—
$26,221
$1,764,155
2018
$475,000
$—
$316,665
$158,335
$448,153
$—
$26,000
$1,424,153
Derek G. Solon Vice President and Chief Commercial Officer
2020
$319,846
$—
$213,333
$106,667
$305,607
$—
$38,199
$983,652
2019
$299,944
$—
$369,998
$100,000
$238,040
$—
$37,153
$1,045,135
2018
$285,475
$—
$190,317
$95,153
$206,257
$—
$36,899
$814,101
William F. Nugent Vice President and Head of Ship Operations
2020
$319,846
$—
$213,333
$106,667
$308,333
$—
$43,685
$991,864
2019
$299,898
$—
$369,998
$100,000
$237,773
$—
$37,153
$1,044,742
2018
$273,500
$—
$182,333
$91,164
$196,569
$—
$36,899
$780,465
(1)
The salary amounts reflect the actual salary received during the year, including amounts contributed by such individuals to the INSW Savings Plan.
(2)
On April 2, 2020, Ms. Zabrocky and Messrs. Pribor, Small, Solon and Nugent received time-based equity awards. One-third of these awards vests on each of the first, second and third anniversaries of the award. The 2020 amounts in this column represent in the aggregate grant date fair value of the RSU awards calculated in accordance with accounting guidance as follows: Ms. Zabrocky - $562,500, Mr. Pribor - $255,000, Mr. Small - $202,083, Mr. Solon - $106,667 and Mr. Nugent - $106,667.
(3)
Ms. Zabrocky and Messrs. Pribor, Small, Solon and Nugent received PRSU grants on April 2, 2020. The performance awards vest in full on December 31, 2022, subject to the Compensation Committee’s certification of achievement of the performance measures and targets. Settlement of the PRSUs may be either in shares of common stock or cash, as determined by the Compensation Committee in its discretion, and shall occur as soon as practicable following the Compensation Committee’s certification of the achievement of the applicable performance measures and targets for 2022 and in any event no later than March 15, 2023. The number of PRSUs shall be subject to an increase or decrease depending on performance against the applicable performance measures and targets with the maximum number of PRSUs vesting equivalent to 150% of the PRSUs awarded. The 2020 amounts in this column represent the aggregate grant date fair value of the PRSU award at target, calculated in accordance with accounting guidance, as follows: Ms. Zabrocky — $562,500, Mr. Pribor — $255,000, Mr. Small — $202,083, Mr. Solon — $106,667 and Mr. Nugent — $106,667.
(4)
Ms. Zabrocky and Messrs. Pribor, Small, Solon and Nugent received stock option awards on April 2, 2020. One third of each stock option award vests and becomes exercisable on each of the first, second and third anniversaries of April 2, 2020.
(5)
The amounts in this column for 2020, 2019 and 2018 reflect the amounts paid in 2021, 2020 and 2019 under the Company’s Cash Incentive Compensation Plan for performance in 2020, 2019, and 2018, respectively.
(6)
See the “All Other Compensation Table” below for additional information.
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All Other Compensation Table
The following table describes each component of the All Other Compensation column for 2020 in the Summary Compensation Table.
Name
Savings Plan
Matching
Contribution(1)
Qualified
Defined
Contribution
Plan
Life
Insurance
Premiums(2)
Other(3)
Total
Lois K. Zabrocky
$17,100
$—
$1,158
$25,427
$43,685
Jeffrey D. Pribor
$17,100
$—
$1,158
$18,628
$36,886
James D. Small III
$17,100
$—
$1,158
$8,504
$26,762
Derek G. Solon
$17,100
$—
$1,158
$19,941
$38,199
William F. Nugent
$17,100
$—
$1,158
$25,427
$43,685
(1)
Constitutes INSW’s matching contributions under the Savings Plan.
(2)
Life insurance premiums represent the cost of term life insurance paid on behalf of the NEO.
(3)
Includes the following amounts for each NEO under plans and arrangements generally maintained by us for all employees (other than “umbrella” liability insurance coverage): (a) medical and dental coverage premiums of $22,894 for Ms. Zabrocky, Messrs. Pribor, $16,095, Small, $5,971, Solon, $17,408, Nugent, $22,894, (b) long-term and short-term disability plan premiums for each NEO of $735; and (c) a premium for excess liability insurance coverage for each NEO of $1,798.
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Grants of Plan-Based Awards
This following table lists the INSW equity and non-equity awards made in fiscal year 2020 to the NEOs granted under the MICP and the 2020 MICP.
 
 
Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards(1)
Estimated Future Payouts
Under Equity
Incentive Plan Awards(2)
All Other
Stock
Awards:
Number of
Shares of
Stock or
Stock
Units(3)
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(4)
Exercise
or
Base
Price of
Option
Awards
($/Sh)
Grant
Date Fair
Value of
Stock and
Option
Awards(5)
Name
Grant Date
Threshold
Target
Maximum
Threshold
(#)
Target
(#)
Maximum
(#)
 
 
 
 
Lois K. Zabrocky
4/2/2020
$421,875
$843,750
$1,265,625
12,824
25,649
38,473
25,649
58,109
$21.93
$1,574,039
Jeffrey D. Pribor
4/2/2020
$255,000
$510,000
$765,000
5,813
11,627
17,440
11,627
26,342
$21.93
$715,259
James D. Small III
4/2/2020
$242,500
$485,000
$727,500
4,607
9,214
13,821
9,214
20,876
$21.93
$567,482
Derek G. Solon
4/2/2020
$136,000
$272,000
$408,000
2,431
4,863
7,294
4,863
11,019
$21.93
$301,006
William F. Nugent
4/2/2020
$136,000
$272,000
$408,000
2,431
4,863
7,294
4,863
11,019
$21.93
$301,006
(1)
Amounts actually paid under these awards for 2020 are set forth above under “ – Elements of the 2020 Executive Officer Compensation Program – 2020 Actual Annual Incentive Paid.”
(2)
In 2020, Ms. Zabrocky and Messrs. Pribor, Small, Solon and Nugent received PRSU grants on April 2, 2020. These performance awards vest in full on December 31, 2022, subject to the Compensation Committee’s certification of achievement of the performance measures. Settlement of the PRSUs may be either in shares of common stock or cash, as determined by the Compensation Committee in its discretion, and shall occur as soon as practicable following the Compensation Committee’s certification of the achievement of the applicable performance measures and targets for 2022 and in any event no later than March 15, 2023. The number of PRSUs shall be subject to an increase or decrease depending on performance against the applicable performance measures and targets with the maximum number of PRSUs vesting equivalent to 150% of the PRSUs awarded.
(3)
The grants comprise time-based RSUs. The grants made on April 2, 2020 vest in equal installments on the first, second and third anniversaries of the date of grant.
(4)
Ms. Zabrocky and Messrs. Pribor, Small, Solon and Nugent received stock option awards on April 2, 2020. One third of each stock option vests and becomes exercisable on each of the first, second and third anniversaries of April 2, 2020.
(5)
For information with respect to grant date fair values, see Note 13, “Capital Stock and Stock Compensation” to INSW’s consolidated financial statements included in INSW’s 2020 Annual Report.
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Outstanding Equity Awards at Fiscal Year-End
The following table lists outstanding INSW equity awards at December 31, 2020 for NEOs under the MICP.
Name
Year
Option Awards
Stock/RSU Awards
 
Grant
Year
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
Unexercisable
Options
Exercise
Price
Option
Expiration
Date
Number of
Shares or
Units of
Stock
That
Have Not
Vested (#)
Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested (#)(1)
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested (#)
Equity
Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested(1)
Lois K. Zabrocky
2014
14,942(2)
$30.93
9/29/2024
 
 
 
 
 
2016
24,474(2)
$19.04
3/30/2026
 
 
 
 
 
2017
20,348
$19.13
3/29/2027
 
 
 
 
 
2018
34,364
17,182(3)
$17.46
4/4/2028
7,638 (4)
$124,712
(5)
$
 
2019
17,104
34,210(6)
$17.21
4/5/2029
15,882(7)
$259,353
23,822(8)
$389,013
 
2020
58,109(9)
$21.93
4/2/2030
25,649(10)
$418,848
25,649(11)
$418,848
 
 
 
 
 
 
 
 
 
 
 
Jeffrey D. Pribor
2017
79,491
$18.21
2/14/2027
 
 
 
 
 
 
17,442
$19.13
3/29/2027
 
 
 
 
 
2018
19,330
9,665(3)
$17.46
4/4/2028
4,297 (4)
$70,154
(5)
$
 
2019
10,429
20,860 (6)
$17.21
4/5/2029
9,684(7)
$158,140
14,526(8)
$237,210
 
2020
26,342(9)
$21.93
4/2/2030
11,627(10)
$189,869
11,627(11)
$189,869
 
 
 
 
 
 
 
 
 
 
 
James D. Small III
2015
42,452(2)
$27.54
3/11/2025
 
 
 
 
 
2016
41,956(2)
$19.04
3/30/2026
 
 
 
 
 
2017
18,411
$19.13
3/29/2027
 
 
 
 
 
2018
13,602
6,802(3)
$17.46
4/4/2028
3,023(4)
$49,366
(5)
$
 
2019
8,257
16,514(6)
$17.21
4/5/2029
7,667(7)
$125,202
11,500(8)
$187,795
 
2020
20,876(9)
$21.93
4/2/2030
9,214(10)
$150,465
9,214(11)
$150,465
 
 
 
 
 
 
 
 
 
 
 
Derek G. Solon
2017
6,486
—0
$22.42
8/3/2027
 
 
 
 
 
2018
8,174
4,088(3)
$17.46
4/4/2028
1,818 (4)
$29,672
(5)
$
 
2019
4,171
8,344 (6)
$17.21
4/5/2029
3,874(7)
$63,262
5,810(8)
$94,877
 
2020
11,019(9)
$21.93
4/2/2030
4,863(10)
$79,413
4,863(11)
$79,413
 
 
 
 
 
 
 
 
 
 
 
William F. Nugent
2017
6,093
—0
$22.42
8/3/2027
 
 
 
 
 
2018
7,832
3,916(3)
$17.46
4/4/2028
1,741(4)
$28,431
(5)
$
 
2019
4,171