UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
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the Registrant |X|
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[
] Preliminary Proxy Statement
[ ]
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14a-6(e)(2))
[x] Definitive
Proxy Statement
[
] Definitive Additional
Materials
[
] Soliciting Material under Rule
14a-12
GENCO
SHIPPING & TRADING LIMITED
(Name of
Registrant as Specified in Its Charter)
------------------------------------------------------------
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
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299 Park
Avenue (20th
Floor)
New York,
New York 10171
(646)
443-8550
April 16,
2008
Dear
Shareholder:
You are
cordially invited to attend the Annual Meeting of Shareholders which will be
held at the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of
the Americas, New York, NY at 1:00 p.m. on Wednesday, May 14,
2008. Your Board of Directors looks forward to greeting those
shareholders that are able to attend. On the following pages you will
find the formal Notice of Annual Meeting and Proxy Statement.
Whether
or not you plan to attend the meeting in person, it is important that your
shares be represented and voted at the Annual Meeting. Accordingly, please date,
sign and return the enclosed proxy card as soon as possible in the envelope
provided. Your cooperation will ensure that your shares are
voted.
I hope
that you will attend the Annual Meeting, and I look forward to seeing you
there.
Sincerely,
Peter C.
Georgiopoulos
Chairman
Genco
Shipping & Trading Limited
299 Park
Avenue (20th
Floor)
New York,
New York 10171
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE
HELD ON MAY 14, 2008
NOTICE IS
HEREBY GIVEN that the Annual Meeting of Shareholders (the “Annual Meeting”) of
Genco Shipping & Trading Limited, a Marshall Islands corporation (“Genco”),
will be held on May 14, 2008 at 1:00 p.m. (local time), at the offices of Kramer
Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York,
NY for the following purposes:
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1.
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To
elect two Class III Directors to the Board of Directors of
Genco;
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2.
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To
ratify the appointment of Deloitte & Touche LLP as the independent
auditors of Genco for the fiscal year ending December 31, 2008;
and
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3.
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To
transact such other business as may properly come before the Annual
Meeting or at any adjournment or postponement
thereof.
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Shareholders
of record at the close of business on March 18, 2008 are entitled to notice of,
and to vote at, the Annual Meeting or any adjournment or postponement thereof. A
list of such shareholders will be available at the Annual Meeting.
All
shareholders are cordially invited to attend the Annual Meeting. If you do not
expect to be present at the Annual Meeting, you are requested to fill in, date
and sign the enclosed proxy and mail it promptly in the enclosed envelope to
make sure that your shares are represented at the Annual Meeting.
Shareholders of record also have the option of voting by using a toll-free
telephone number or via the Internet. Instructions for using these services are
included on the proxy card. In the event you decide to attend the
Annual Meeting in person, you may, if you desire, revoke your proxy and vote
your shares in person in accordance with the procedures described in the
accompanying proxy statement.
YOUR
VOTE IS IMPORTANT
IF YOU
ARE UNABLE TO BE PRESENT PERSONALLY, PLEASE VOTE BY TELEPHONE, INTERNET, OR BY
MAIL. PLEASE REFER TO THE ENCLOSED PROXY FOR INFORMATION ON HOW TO
VOTE BY TELEPHONE OR INTERNET. IF YOU CHOOSE TO VOTE BY MAIL, PLEASE
MARK, SIGN AND DATE THE ENCLOSED PROXY, WHICH IS BEING SOLICITED BY THE
BOARD OF DIRECTORS, AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
By Order of the Board
of Directors,
/s/ John C. Wobensmith
John C.
Wobensmith
Chief Financial
Officer, Principal
Accounting Officer,
Secretary and Treasurer
New York, New
York
Genco
Shipping & Trading Limited
299 Park
Avenue (20th
Floor)
New York,
New York 10171
(646)
443-8550
__________________
PROXY
STATEMENT
ANNUAL
MEETING OF SHAREHOLDERS
TO
BE HELD MAY 14, 2008
__________________
This
proxy statement is furnished to shareholders of Genco Shipping & Trading
Limited (“Genco” or the “Company”) in connection with the solicitation of
proxies, in the accompanying form, by the Board of Directors of Genco (the
“Board”) for use in voting at the Annual Meeting of Shareholders (the “Annual
Meeting”) to be held at the offices of Kramer Levin Naftalis & Frankel LLP,
1177 Avenue of the Americas, New York, NY, on May 14, 2008 at 1:00 p.m., and at
any adjournment or postponement thereof.
This
proxy statement, and the accompanying form of proxy, are first being mailed to
shareholders on or about April 16, 2008.
VOTING
RIGHTS AND SOLICITATION OF PROXIES
Purpose
of the Annual Meeting
The
specific proposals to be considered and acted upon at the Annual Meeting are
summarized in the accompanying Notice of Annual Meeting of Shareholders. Each
proposal is described in more detail in this proxy statement.
Record
Date and Outstanding Shares
The Board
has fixed the close of business on March 18, 2008 as the record date (the
“Record Date”) for the determination of shareholders entitled to notice of, and
to vote at, the Annual Meeting. Only shareholders of record at the close of
business on that date will be entitled to vote at the Annual Meeting or any and
all adjournments or postponements thereof. As of March 18, 2008, Genco had
issued and outstanding 29,078,309 shares of common stock. The common stock
comprises all of Genco's issued and outstanding voting stock. Genco’s
common stock began trading on the New York Stock Exchange (NYSE) on April 11,
2007. Prior to this date, Genco’s common stock traded on the NASDAQ
Global Select Market.
Revocability
and Voting of Proxies
Any
person signing a proxy in the form accompanying this proxy statement has the
power to revoke it prior to the Annual Meeting or at the Annual Meeting prior to
the vote pursuant to the proxy. A proxy may be revoked by any of the following
methods:
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·
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·
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by
submitting another proxy with a later date;
or
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·
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by
attending the Annual Meeting and voting in
person.
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Please
note, however, that if a shareholder's shares are held of record by a broker,
bank or other nominee and that shareholder wishes to vote at the Annual Meeting,
the shareholder must bring to the Annual Meeting a letter from the broker, bank
or other nominee confirming that shareholder's beneficial ownership of the
shares.
Unless we
receive specific instructions to the contrary or unless such proxy is revoked,
shares represented by each properly executed proxy will be voted: (i) FOR the
election of each of Genco’s nominees as a director; (ii) FOR the ratification of
the appointment of Deloitte & Touche LLP as the independent auditors of
Genco for the fiscal year ending December 31, 2008; and (iii) with respect to
any other matters that may properly come before the Annual Meeting, at the
discretion of the proxy holders. Genco does not presently anticipate any other
business will be presented for action at the Annual Meeting.
Voting
at the Annual Meeting
Each
share of common stock outstanding on the Record Date will be entitled to one
vote on each matter submitted to a vote of the shareholders, including the
election of directors. Cumulative voting by shareholders is not
permitted.
The
presence, in person or by proxy, of the holders of a majority of the votes
entitled to be cast by the shareholders entitled to vote at the Annual Meeting
is necessary to constitute a quorum. Abstentions and broker “non-votes” are
counted as present and entitled to vote for purposes of determining a quorum. A
broker “non-vote” occurs when a nominee holding shares for a beneficial owner
does not vote on a particular proposal because the nominee does not have
discretionary voting power for that particular item and has not received
instructions from the beneficial owner.
A
plurality of the votes cast is required for the election of directors.
Abstentions and broker non-votes are not counted for the purpose of the election
of directors.
The
affirmative vote of a majority of the shares of common stock represented and
voted at the Annual Meeting is required for approval of Proposal Two.
Abstentions will have the same effect as a vote “against” Proposal Two, whereas
broker non-votes are not considered to have been voted on Proposal
Two.
Solicitation
We will
pay the costs relating to this proxy statement, the proxy and the Annual
Meeting. We may reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
material to beneficial owners. Directors, officers and regular employees may
also solicit proxies. They will not receive any additional pay for the
solicitation.
Important
Notice Regarding the Availability of Proxy Materials for the
Annual
Meeting of Shareholders to Be Held May 14, 2008.
The
following materials, also included with this Notice, are available for view
on
the
Internet:
Proxy
Statement for the 2008 Annual Meeting of Shareholders
2007
Annual Report to Shareholders
To
view this Proxy Statement and the 2007 AnnualReport to
Shareholders,
visit
http://ww3.ics.adp.com/streetlink/gnk.
Your
vote is important. Thank you for voting.
2
ELECTION
OF DIRECTORS
Under
Genco’s Certificate of Incorporation, as amended, the Board of Directors is
classified into three classes. The two directors serving in Class III have terms
expiring at the 2008 Annual Meeting. The Board of Directors
has nominated the Class III directors currently serving on the Board of
Directors, Peter C. Georgiopoulos and Stephen A. Kaplan, for re-election to
serve as Class III directors of the Company for a three-year term until the 2011
Annual Meeting of Shareholders of the Company and until their successors are
elected and qualified or until their earlier resignation or
removal. Although management has no reason to believe that the
nominees will not be available as candidates, should such a situation arise,
proxies may be voted for the election of such other persons as the holders of
the proxies may, in their discretion, determine.
Directors
are elected by a plurality of the votes cast at the Annual Meeting, either in
person or by proxy. Votes that are withheld will be excluded entirely from the
vote and will have no effect.
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE
ELECTION (ITEM 1 ON THE ENCLOSED PROXY CARD) OF MESSRS. GEORGIOPOULOS AND KAPLAN
AS CLASS III DIRECTORS.
Nominee
Information
The
following table sets forth information regarding the nominees for election or
re-election as Class III Directors:
Name
Age Class Position
Peter C.
Georgiopoulos 47 III Chairman and
Director
Stephen
A. Kaplan 49 III Director
Peter C. Georgiopoulos has
served as Chairman and as a member of our Board of Directors since our
inception. Since 1997, Peter C. Georgiopoulos served as Chairman and CEO of
General Maritime Corporation, a company he founded. Under the leadership of Mr.
Georgiopoulos, General Maritime Corporation grew from a single ship ownership
company to what today is an industry leader listed on the New York Stock
Exchange. Mr. Georgiopoulos is also Chairman and a director of Aegean Marine
Petroleum Network, Inc., a company listed on the New York Stock Exchange. From
1991 to 1997, he was the principal of Maritime Equity Management, a ship-owning
and investment company that he founded in 1991. From 1990 to 1991, he was
affiliated with Mallory Jones Lynch & Associates, an oil tanker brokerage
firm. From 1987 to 1990, Mr. Georgiopoulos was an investment banker at Drexel
Burnham Lambert. Before entering the investment banking business, he had
extensive experience in the sale, purchase and chartering of vessels while
working for shipowners in New York and Piraeus, Greece. Mr. Georgiopoulos is a
member of the American Bureau of Shipping. He holds an MBA from Dartmouth
College.
Stephen A. Kaplan has served
as a director of our company since July 27, 2005. From 2001 to December 2007, he
served as a director of General Maritime Corporation. Since 1995, Mr. Kaplan has
been a principal of Oaktree Capital Management, L.P., formerly Oaktree Capital
Management, LLC, an investment management firm, where he heads Oaktree's
Principal Activities Group which invests in majority and significant minority
positions in both private and public companies. Mr. Kaplan currently has in
excess of $8 billion in assets under his management. Since 1993, he has served
as a portfolio manager of all of Oaktree's Principal Opportunities Funds,
including OCM Principal Opportunities Fund III, L.P. and OCM Principal
Opportunities Fund IIIA, L.P., which collectively owns approximately 71.4% of
OCM Fleet Acquisition LLC, one of our shareholders. From 1993 to 1995, Mr.
Kaplan was a
Managing Director of Trust Company of the West. Before joining Trust Company of
the West, Mr. Kaplan was a partner of the law firm of Gibson, Dunn &
Crutcher. Mr. Kaplan currently serves as a director of Regal Entertainment
Group, Alliance Imaging, Inc., Oaktree Capital Group, LLC and numerous
private companies.
3
Continuing
Director Information
The
following table sets information regarding our directors whose terms continue
after the 2008 Annual Meeting. The terms for Directors in Class I expire at the
2009 Annual Meeting, and the terms for Directors in Class II expire at the 2010
Annual Meeting.
| Name | Age |
Class
|
Position
|
| Rear Admiral Robert C. North, USCG (ret. | 63 |
I
|
Director
|
| Basil G. Mavroleon | 60 |
I
|
Director
|
| Harry A. Perrin | 55 |
I
|
Director
|
| Nathaniel C.A. Kramer | 46 |
II
|
Director
|
| Mark F. Polzin | 62 |
II
|
Director
|
Class I
Directors - Terms Expiring at the 2009 Annual Meeting
Rear Admiral Robert C. North, USCG
(ret.) has served as a director of our company since July 27, 2005. Since
his retirement from the active duty with the U.S. Coast Guard in April of 2001,
Rear Admiral North has served as the president of North Star Maritime, Inc., a
marine industry consulting firm, specializing in international and domestic
maritime safety, security and environmental protection issues. While on active
duty with the U.S. Coast Guard, Rear Admiral North reached the position of
Assistant Commandant for Marine Safety, Security and Environmental Protection,
where he directed national and international programs for commercial vessel
safety, merchant mariner licensing and documentation, port safety and security
and waterways management. He is a graduate of the Baltimore Polytechnic
Institute, State University of New York Maritime College at Fort Schuyler and
the U.S. Army War College.
Basil G. Mavroleon has served
as a director of our company since July 27, 2005. Mr. Mavroleon has been
employed in the shipping industry for the last 38 years. Since 1986, Mr.
Mavroleon is Manager of the Projects Group of Charles R. Weber Company, Inc. one
of the largest ship brokerages and marine consultants in the United States. Mr.
Mavroleon also serves as Managing Director of WeberSeas (Hellas) S.A., a
comprehensive sale and purchase, marine projects and tanker chartering brokerage
based in Piraeus, Greece. Since its inception in 2003 through
its liquidation in December 2005, Mr. Mavroleon has also served as Chairman of
Azimuth Fund Management (Jersey) Limited, a hedge fund dealing with tanker
freight forward agreements and derivatives. Mr. Mavroleon is a member of the
Baltic Exchange and is on the board of the Associate Membership Committee of
Intertanko, a member of the Association of Ship Brokers and Agents, on the
advisory board of NAMMA (North American Maritime Ministry Association), a board
member of NAMEPA (North American Marine Environmental Protection Association),
is Vice Chairman of the New York World Scale Committee, a member of the Hellenic
Chamber of Commerce, a member of the Connecticut Maritime Association and a
member of NYMAR (New York Maritime Inc.).
Harry A. Perrin has served as
a director of the Company since August 15, 2005, and currently serves as the
Chairman of the Company’s Audit Committee. Mr. Perrin is a partner in the
Houston office of Vinson & Elkins, where he has been employed since August
2007. From June 2001 through November 2006, Mr. Perrin worked as an investment
banker with Petrie Parkman & Co, an investment banking and financial
advisory firm with offices in Houston, Texas and Denver, Colorado. In December
2006, Merrill Lynch acquired Petrie Parkman, and at that time, Mr. Perrin was
hired as an investment banker at Merrill Lynch where he was employed until May
2007. Prior to joining Petrie Parkman, Mr. Perrin was a partner for ten years in
the business finance and restructuring group of the Houston office of Weil
Gotshal & Manges. Mr. Perrin received his Bachelor of Business
Administration in Accounting with Honors from the University of Texas at Austin
in 1975. He received his J.D. with High Honors from the University of Houston in
1980. Mr. Perrin is a member of the State Bar of Texas, and is a licensed
Certified Public Accountant in the State of Texas.
4
Class II
Directors – Terms Expiring at the 2010 Annual Meeting
Nathaniel C. A. Kramer has
served as director of our company since July 27, 2005. Mr. Kramer is a principal
at Mercantile Capital Group LLC, a private equity firm with offices in New York
and Chicago, and Managing Director of his firm's New York office from 1999 to
present. He brings over 20 years of investment experience in both the public and
private capital markets. He started his career with Allen and Company, a private
equity firm, and recently served as its Vice President. Mr. Kramer has led
investments in a wide range of industries including telecommunications, wireless
infrastructure, waste management, data communications, B2B commerce and Internet
infrastructure sectors. Mr. Kramer also serves on the boards of MoveOnIn, Inc.
and Environmental Asset Management.
Mark F. Polzin has served as a
director of our company since July 27, 2005. Mr. Polzin is President of Ranch
Fiduciary Corporation, Farms Fiduciary Corporation, and Laurel Fiduciary
Corporation. Mr. Polzin is also Managing Director of The Oversight Company and
Manager of Wyoming Consulting LLC, and a senior consultant to Cymric Family
Office Services and Family Office Exchange. On July 1, 2007, Mr. Polzin retired
as President and Chief Executive Officer of Moreland Management Company, where
he had served as an officer since 1989. Prior to joining Moreland he was an
executive and director of several mid-western community banking organizations.
He holds a B.S. in Economics from the University of Wisconsin-Milwaukee and a
J.D. from Marquette University Law School. Mr. Polzin is a Regent of Concordia
University Wisconsin.
Corporate
Governance
Governance Materials
- All of the Company’s corporate governance materials, including the committee
charters of the Board of Directors (the “Board”) and the Company’s Corporate
Governance Guidelines, are published on the Corporate Governance section of the
Company’s website under “Investor” at www.gencoshipping.com. These
materials are also available in print to any shareholder upon request. The Board
regularly reviews corporate governance developments and modifies its committee
charters as warranted. Any modifications are reflected on the
Company’s website, including modifications recently made to all of its committee
charters in connection with the Company’s listing on the NYSE.
Director Independence
- It is the Board’s objective that a majority of the Board consist of
independent directors. For a director to be considered independent, the Board
must determine that the director does not have any material relationship with
the Company. The Board follows the criteria set forth in applicable NYSE listing
standards to determine director independence. The Board will consider
all relevant facts and circumstances in making an independence
determination.
All
members of the Audit, Compensation and Nominating and Corporate Governance
Committees must be independent directors as defined by applicable NYSE listing
standards. Members of the Audit Committee must also satisfy a
separate Securities and Exchange Commission independence requirement, which
provides that they may not accept directly or indirectly any consulting,
advisory or other compensatory fee from the Company or any of its subsidiaries
other than their director compensation.
The
independent directors of the Company are Rear Admiral Robert C. North, Basil G.
Mavroleon, Harry A. Perrin,
Nathaniel C.A. Kramer, and Mark F. Polzin. The Board of Directors has
determined that each of the members of the
Audit, the Compensation and the Nominating and Corporate Governance Committees,
respectively, are independent
as defined in the applicable NYSE listing standards. In
determining that Mr. Mavroleon is independent, the Board
considered the engagement of a shipbroker of which Mr. Mavroleon is a Managing
Director to which a commission
of $131,500 was paid in connection with the sale of one of our vessels, the
Genco Glory. Mr. Mavroleon is also a
Managing Director and a shareholder of a company owning 50% of this
shipbroker. In determining that Rear Admiral
North is independent, the Board considered that during 2007, the Company paid
$11,743 for the services of North
Star Maritime, Inc., a marine industry consulting firm owned and operated by
Rear Admiral North. The Board did not
believe that these transactions would impair Mr. Mavroleon’s or Mr. North’s
ability to act independently of management. See
“Certain Relationships and Related Transactions”.
Code of Ethics - All
directors, officers, employees and agents of the Company must act ethically at
all times and in
accordance with the policies comprising the Company’s code of ethics set forth
in the Company’s Code of
5
Ethics.
Under the Company’s Code of Ethics, the Board will only grant waivers for a
director or an executive officer in limited circumstances and where
circumstances would support a waiver. Such waivers may only be made by the Audit
Committee.
The
Company’s Code of Ethics is available on the Company’s website at
www.gencoshipping.com and is available in print to any shareholder upon
request.
Communicating Concerns to
Directors – Shareholders or other interested parties may communicate
directly with any individual director, with the Board of Directors as a group,
with the Chairman or other presiding director for the non-management directors,
or with non-management directors as a group pursuant to Section 303A.03 of the
NYSE’s Listed Company Manual. All of Genco’s directors are currently
non-management directors. All communications should be in
writing and should be addressed to the intended recipient(s), c/o John C.
Wobensmith, Secretary, 299 Park Avenue (20th Floor), New York, New York
10171. Once the communication is received by the Secretary, the
Secretary reviews the communication. Communications that comprise
advertisements, solicitations for business, requests for employment, requests
for contributions or other inappropriate material will not be forwarded to our
directors. Other communications are promptly forwarded to the addressee.
Board
Meetings and Committees
During
fiscal year 2007, there were five meetings of the Board of
Directors. A quorum of Directors was present, either in person or
telephonically, for all of the meetings. Actions were also taken
during the year by unanimous written consent of the Directors. All
directors attended at least 75% of the aggregate of the total number of meetings
of the Board and at least 75% of the total number of meetings held by all
Committees of the Board on which they served. The Company encourages
all directors to attend each annual meeting of shareholders.
During
fiscal year 2007, Genco’s Audit Committee was comprised of Harry A. Perrin,
Nathaniel C.A. Kramer and Mark F. Polzin, all of whom qualify as independent
under the listing requirements of the NYSE and are financially
literate. Mr. Perrin is also a financial expert as defined under Item
401(h)(2) of Regulation S-K. Through its written charter, the Audit
Committee has been delegated the responsibility of reviewing with the
independent auditors the plans and results of the audit engagement, reviewing
the adequacy, scope and results of the internal accounting controls and
procedures, reviewing the degree of independence of the auditors, reviewing the
auditor’s fees and recommending the engagement of the auditors to the full
Board. The Audit Committee held five meetings during fiscal year
2007.
During
fiscal year 2007, Genco’s Compensation Committee was comprised of Harry A.
Perrin, Basil G. Mavroleon, and Nathaniel C.A. Kramer, all of whom qualify as
independent under the listing requirements of the NYSE, and none of whom is an
employee of Genco. Through its written charter, the Compensation
Committee administers Genco's equity incentive plan and other corporate benefits
programs. The Compensation Committee also considers from time to time
matters of compensation philosophy and competitive status, and also reviews,
approves, or recommends executive officer bonuses, equity grants and other
compensation. The Compensation Committee generally does not
delegate its authority, although Genco’s officers are responsible for the
day-to-day administration of Genco’s 2005 Equity Incentive Plan. The
committee’s primary processes for establishing and overseeing executive
compensation can be found under “Compensation Discussion and
Analysis” below. Directors’ compensation is established by the
Board of Directors upon the recommendation of the Compensation
Committee. The Compensation Committee held four meetings during
fiscal year 2007.
During
fiscal year 2007, Genco’s Nominating and Corporate Governance Committee was
comprised of Rear Admiral
Robert C. North, Basil G. Mavroleon and Mark F. Polzin, all of whom qualify as
independent under the listing
requirements of the NYSE, and none of whom is an employee of
Genco. Through its written charter, the Nominating
and Corporate Governance Committee assists the Board in identifying qualified
individuals to become Board
members, in determining the composition of the Board and its committees, in
monitoring a process to assess Board
effectiveness and in developing and implementing the Company’s corporate
governance guidelines. When avacancy
exists on the Board, or when the Board determines to add an additional director,
the nominating and corporate governance
committee seeks out appropriate candidates from various sources, which may
include directors, officers, employees
and others. The committee may use consultants and search firms who may be paid
fees for their assistance in
identifying and evaluating candidates, but has not done so to
date. The committee does not have a set of minimum, specific
qualifications that must be met by a candidate for director and will review the
candidate's background,
6
experience
and abilities, and the contributions the candidate can be expected to make to
the collective functioning of the Board
and the needs of the Board at the time. The committee considers candidates based
on materials provided, and will
consider whether an interview is appropriate. The committee will
consider shareholder recommendations of director
candidates, which should be sent to the attention of the corporate secretary at
the Company's headquarters, on the same
basis. The Nominating and Corporate Governance Committee held one
meeting during fiscal year 2007.
Executive
Sessions
Under the
Corporate Governance Guidelines that the Company adopted last year in connection
with its listing on the New York Stock Exchange to assure free and open
discussion and communication among the non-management directors, the
non-management directors will seek to meet at least annually and may meet as the
non-management directors deem appropriate. In addition, if there are
any non-management directors who are not independent directors, the independent
directors shall meet in executive session at least once each
year. The presiding director at any executive session with the
non-management or independent directors will be the Chairman if the Chairman is
present and is a non-management or independent director (as applicable) and will
otherwise be selected by a majority of the non-management or independent
directors (as applicable) present at the meeting. All of Genco’s
directors are currently non-management directors, and one executive session of
independent directors was held in fiscal year 2007.
Director
Compensation
For
fiscal year 2007, each of our directors received an annual fee of $30,000, a fee
of $20,000 for an Audit Committee assignment, $15,000 for a Compensation
Committee assignment and $7,500 for a Nominating and Corporate Governance
Committee assignment. In addition, Peter C. Georgiopoulos, Chairman
of the Board, was granted 100,000 restricted shares of common stock, with
restrictions to lapse in ten equal installments commencing on November 15,
2008 and on each of the first nine anniversaries
thereafter. Restrictions on Mr. Georgiopoulos’ shares also
lapse in full immediately upon the occurrence of a change of control (as defined
under our 2005 Equity Incentive Plan) or the termination of Mr. Georgiopoulos’
service as a director, employee or consultant unless Mr. Georgiopoulos
voluntarily terminates his service or he is removed as a director for cause in
accordance with the Company’s Amended and Restated By-Laws. Upon the
recommendation of the Compensation Committee, the Board determined to make this
grant to Mr. Georgiopoulos in recognition of his efforts to facilitate the
Company’s extraordinary achievements in 2007, notably the Company’s agreement to
acquire nine Capesize vessels from companies within the Metrostar Management
Corporation group for an aggregate purchase price of approximately $1.1
billion. Nathaniel C.A. Kramer, Basil G. Mavroleon, Rear Admiral
Robert C. North, USCG (ret.), Harry A. Perrin, and Mark F. Polzin, members of
the Board, were each granted 2,500 restricted shares of common stock, with
restrictions on all such shares to lapse, if at all, on the earliest of February
13, 2009, the occurrence of a change of control or the date of the Company’s
2008 Annual Meeting of Shareholders. Restrictions on a pro rata percentage of
each director’s restricted shares will also lapse upon such director’s death or
disability. For fiscal year 2008, the amounts of the annual fee for
each director and fees for committee assignments are yet to be
determined. We also expect to make annual restricted stock grants to
each director other than Mr. Kaplan for 2009 in an amount yet to be
determined. We reimburse our directors for all reasonable expenses
incurred by them in connection with serving on our board of
directors. The following table summarizes compensation earned by
directors for the year ended December 31, 2007:
|
Name
of Director
(a)
|
Fees
Earned
or
Paid in
Cash
($) (1)
(b)
|
Stock
Awards
($) (2)(3)
(c)
|
All
Other
Compensation
($)(4)
(g)
|
Total
($)
(h)
|
||||
|
Peter
C. Georgiopoulos
|
$30,000
|
$36,624
|
$141,714
|
$208,338
|
||||
|
Nathaniel C.A.
Kramer
|
$65,000
|
$36,624
|
$ —
|
$101,624
|
||||
|
Basil
G. Mavroleon
|
$52,500
|
$36,624
|
$ —
|
$89,124
|
||||
|
Rear
Admiral Robert C. North, USCG (ret.)
|
$37,500
|
$36,624
|
$ —
|
$74,124
|
||||
|
Harry
A. Perrin
|
$65,000
|
$36,624
|
$ —
|
$101,624
|
||||
|
Mark
F. Polzin
|
$57,500
|
$36,624
|
$ —
|
$94,124
|
||||
|
Stephen
A. Kaplan
|
$ —
|
$ —
|
$ —
|
$ —
|
|
(1)
|
Directors
received an annual fee of $30,000, a fee of $20,000 for an Audit Committee
assignment, $15,000 for a Compensation Committee assignment and $7,500 for
a Nominating and Corporate Governance Committee
assignment.
|
7
|
(2)
|
The
amounts in column (c) reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal year ended December 31, 2007,
in accordance with FASB SFAS No. 123R, Share-Based Payment (“FAS 123R”),
of awards pursuant to the Company’s 2005 Equity Incentive Plan and
includes amounts from awards granted prior to 2007. Details regarding
the calculation of these amounts are included in Notes 2 and 18 to the
Company’s audited financial statements for the fiscal year ended December
31, 2007 included in the Company’s Annual Report on Form 10-K filed with
the Securities and Exchange Commission on February 29, 2008. The actual
amount realized by the director will likely vary based on a number of
factors, including the Company’s performance, stock price fluctuations and
applicable vesting.
|
|
(3)
|
On
January 10, 2008, Mr. Georgiopoulos received a grant of 100,000 nonvested
shares. The fair value on the date of grant for Mr.
Georgiopoulos’ award is $4,191,000. Restrictions on such shares
lapse in ten equal installments commencing on November 15, 2008 and on
each of the first nine anniversaries thereafter. On February
13, 2008, the five directors listed in the table other than Messrs.
Georgiopoulos and Kaplan each received a grant of 2,500 nonvested
shares. The fair value on the date of grant for each such
director’s award is $137,725. Restrictions on all such shares lapse,
if at all, on the earliest of February 13, 2009, the occurrence of a
Change in Control as defined under the Company’s 2005 Equity Incentive
Plan or the date of the Company’s 2008 Annual Meeting of
Shareholders. No amount is recognized for this grant for 2007 in
column (c).
|
|
(4)
|
The
amount in column (g) for Mr. Georgiopoulos represents the payment by the
Company of $125,000 in filing fees and approximately $16,714 in legal fees
incurred in the first quarter of 2008 which relate to a filing required
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, in connection with the grant to Mr. Georgiopoulos of 100,000
nonvested shares.
|
Compensation
Committee Interlocks and Insider Participation
No
interlocking relationship exists between any of Genco’s executive officers or
members of Genco's Board of Directors or compensation committee and any other
company's executive officers, Board of Directors or compensation
committee.
MANAGEMENT
Executive
Officers
The
following tables set forth certain information with respect to the executive
officers of Genco:
Executive
Officers
| Name | Age | Position |
| Robert Gerald Buchanan | 59 | President (Principal Executive Officer) |
| John C. Wobensmith | 37 | Chief Financial Officer, Principal Accounting Officer, Secretary and Treasurer |
Robert Gerald Buchanan has
served as a President of our company since June 1, 2005. Mr. Buchanan has 40
years of shipping experience, holding various senior operating, engineering and
management positions. Before joining our company, Mr. Buchanan spent eight years
as a Managing Director of Wallem, a leading technical management company. As the
senior executive at Wallem, Mr. Buchanan was responsible for the safe and
efficient operations of close to 200 vessels, as well as management of
approximately 500 onshore and seagoing staff. From 1990 to 1996, Mr. Buchanan
was Technical Director of Canada Steamships Lines of Montreal, overseeing a
fleet of bulk carriers. Before this, Mr. Buchanan managed an oceanographic
research vessel for NATO from 1986 to 1990, was Superintendent Engineer of
Denholm Ship Management's United Kingdom office from 1982 to 1986, and Chief
Engineer of Denholm Ship Management from 1969 to 1982. Mr. Buchanan was educated
at Glasgow Nautical College and obtained a First Class Engineers license for the
both steam and motor ships. Among his industry affiliations, Mr. Buchanan was a
member of the International Committee for Gard Protection & Indemnity
Association.
8
John C. Wobensmith has served
as our Chief Financial Officer and Principal Accounting Officer since April 4,
2005. Mr. Wobensmith is responsible for overseeing our accounting and financial
matters. Mr. Wobensmith has over 14 years of experience in the shipping
industry, with a concentration in shipping finance. Before becoming our Chief
Financial Officer, Mr. Wobensmith served as a Senior Vice President with
American Marine Advisors, Inc., an investment bank focused on the shipping
industry. While at American Marine Advisors, Inc., Mr. Wobensmith was involved
in mergers and acquisitions, equity fund management, debt placement and equity
placement in the shipping industry. From 1993 through 2000, he worked in the
international maritime lending group of The First National Bank of Maryland
serving as a Vice President from 1998. He has a bachelors degree in economics
from St. Mary's College of Maryland, and holds the Chartered Financial Analyst
designation.
COMPENSATION
DISCUSSION AND ANALYSIS
Overview
of compensation program
The
Compensation Committee of the Board is responsible for establishing,
implementing, and monitoring adherence to the Company’s compensation
philosophy. The Compensation Committee’s goal is to ensure that the
total compensation paid to the Company’s executive officers is fair, reasonable,
and competitive.
Throughout
this proxy statement, Robert Gerald Buchanan, the Company’s President, and John
C. Wobensmith, the Company’s Chief Financial Officer, are referred to as the
“named executive officers”.
Compensation
philosophy and objectives
The
Compensation Committee believes that its executive compensation program should
reward executives for enhancing the Company’s long-term performance while
delivering favorable annual operating results. The Compensation
Committee evaluates both performance and compensation to attract and retain
superior executives and maintain compensation competitive to the Company’s
peers.
Elements
of compensation
The
Compensation Committee believes the Company’s executive compensation packages
should include both cash and stock-based compensation to meet the objectives
stated above. The current principal components of our executive
compensation are base salary, annual cash bonuses, equity awards in the form of
restricted stock grants, and other benefits.
The two
cash components of compensation provide immediately realizable rewards to our
executives for annual performance. Given the responsibility our
two named executive officers bear for the Company’s performance, we allocate
much of their cash compensation to annual bonus, which can be adjusted to
reflect the Company’s performance.
We also
allocate a significant portion of annual compensation to restricted stock grants
that vest in portions over a period of time, currently four years. We
do so because we believe that equity awards help to align our executive’s
interests with those of our shareholders and enhance the retention of our
executives. Unless the Compensation Committee determines otherwise,
each executive is entitled to receive dividends on restricted stock at the same
rate paid to other holders of our common stock. Our executives
therefore share with other shareholders in receiving dividends as well as the
recognition of current income generation and future changes in stock
price. However, if any such restricted shares do not vest, the
holders of the non-vesting shares must repay any dividends on the non-vesting
shares unless the Board or the Compensation Committee determines otherwise for
dividends paid on shares of restricted stock granted on or after December 21,
2005. The Compensation Committee seeks to balance cash and
stock-based executive compensation to provide incentives for both short- and
long-term performance.
Benefits
are part of a competitive compensation package to attract and retain employees,
including executives. Our named executive officers participate in the
same benefit plans as our salaried employees.
9
Employment
agreements and severance benefits
On
September 21, 2007, we entered into an employment agreement with Mr. Wobensmith
for a two-year term. The agreement provides for a base salary of
$300,000 during the term, which may be increased but not
decreased. The agreement also confirms Mr. Wobensmith’s eligibility
to receive cash bonuses and awards under our 2005 Equity Incentive Plan or other
successor plan in amounts that the Compensation Committee may determine.
The
general terms of Mr. Wobensmith’s employment agreement are described in greater
detail under the heading “Executive Employment Agreement” on page
15. His employment agreement additionally provides for payments upon
termination of his employment under certain conditions, which are described
under the heading “Potential Payments upon Termination or
Change-in-Control—Executive Employment Agreement” on page 16.
We
entered into this agreement with Mr. Wobensmith to enhance our retention of
Mr. Wobensmith, particularly in the event of an actual or rumored change in
control. The provisions relating to a change in control serve to
align his and our shareholders’ interests by enabling Mr. Wobensmith to consider
corporate transactions that are in the best interests of shareholders and our
other constituents without undue concern over whether the transactions may
jeopardize his employment. The change of control payments under
Mr. Wobensmith’s employment agreement are subject to a “double trigger,” meaning
that the payments are not awarded upon a change of control unless he
terminates his employment for good reason or his employment is terminated
without cause (other than for death or disability) within two years of a change
of control. The vesting of Mr. Wobensmith’s restricted stock, as with
all restricted stock granted to directors, officers, and other employees to
date, remains subject to a “single trigger” and thus vests immediately upon a
change of control. We believe this structure strikes a balance
between providing appropriate performance incentives and our executive retention
goals.
How
we determine the amount of compensation
Generally,
the Compensation Committee recommends executive compensation on a discretionary
basis. The Compensation Committee prefers this approach because it
allows flexibility in awards based on the Compensation Committee’s assessment of
each executive’s performance. As discussed below, the
Company believes that its shipping income is not subject to tax under Section
883 of the U.S. Internal Revenue Code of 1986, as amended, or the Internal
Revenue Code. Accordingly, it can award discretionary retroactive
bonuses to its executives regardless of the issues of the deductibility of
expenses for such bonuses for U.S. income tax purposes. Given the
foregoing considerations, as well as the cyclical nature of the shipping
industry and the volatile and unpredictable markets in which the Company
operates, we do not set incentive targets for purposes of executive pay
determination, nor do we determine executive compensation through the use of
formulas or a benchmarking process. In the exercise of its discretion, the
Compensation Committee recommends executive compensation primarily based on
consideration of the following three factors:
|
·
|
the
executive’s individual performance;
|
|
·
|
an
internal review of the executive’s compensation;
and
|
|
·
|
market
data obtained by the Company on peer
companies.
|
For
fiscal year 2007, the Compensation Committee recommended compensation packages
for each named executive officer following consultations with the Company’s
Chairman as well as discussions with the officers. The Compensation
Committee referred these packages to the Board for final approval, which the
Board granted unanimously.
Role
of compensation consultant
For 2007,
the Compensation Committee retained Steven Hall & Partners, a compensation
consultant, to assist it in reviewing executive compensation data and
performance data on groups of peer companies prepared or obtained by the
Company. Steven Hall & Partners also provided the Compensation
Committee with an analysis of director compensation at peer companies and
assisted in developing compensation recommendations for directors, including
compensation for our Chairman, Peter C. Georgiopoulos for his extraordinary
assistance to the Company in 2007. However, the Compensation
Committee did not solicit recommendations from this or any other consultant as
to the
10
form or
amounts of compensation to be awarded to the Company’s executive
officers. In the future, either the Company or the Committee may
engage or seek the advice of other compensation consultants.
Performance
factors
The
Compensation Committee takes into account the contributions of each named
executive officer to the performance of the Company as a whole in establishing
his compensation. The Compensation Committee viewed 2007 as
successful for the Company, during which our executives completed a number of
significant accomplishments, including the following:
|
·
|
The
increase of the Company’s 2005 credit facility from $450 million to $550
million.
|
|
·
|
Performance
of the Company enabling an increase in the target dividend from $0.60 to
$0.66 per share and the declaration of four consecutive quarterly
dividends at the higher target
rate.
|
|
·
|
The
successful completion of a secondary offering of the Company’s common
stock by Fleet Acquisition LLC for gross proceeds of approximately $148
million, which was priced at the
market.
|
|
·
|
The
completion of the sale of the Genco Glory for a gain of $3.6
million.
|
|
·
|
The
transfer of the listing of the Company’s securities from the NASDAQ
National Market to the New York Stock
Exchange.
|
|
·
|
Agreement
on the acquisition of nine Capesize vessels from companies within the
Metrostar Management Corporation group for an aggregate purchase price of
approximately $1.1 billion, four of which were delivered in
2007.
|
|
·
|
The
establishment of a new $1.4 billion revolving credit facility on favorable
terms, which was used to refinance the Company’s 2005 credit facility and
$155 million short-term credit
facility.
|
|
·
|
Agreement
on the acquisition of six drybulk vessels from affiliates of Evalend
Shipping Co. S.A. for an aggregate purchase price of $336 million, all of
which were delivered in 2007.
|
|
·
|
Agreement
on the sale of the Genco Commander for a gross purchase price of $44.45
million, representing a net gain of approximately $24
million.
|
|
·
|
Completion
of a $225 million follow-on offering (including full exercise of the
overallotment option as to the Company) together with another secondary
offering by Fleet Acquisition LLC at $67.00 per
share.
|
|
·
|
The
appreciation of the Company’s stock and the overall performance of the
Company.
|
|
·
|
Effective
management of the Company’s chartering affairs, realizing a fleet average
utilization rate of 98.7% and a fleet average time charter equivalent rate
of $24,650 per day.
|
|
·
|
Proficient
supervision of the activities of four separate management companies, and
avoiding the need and related expense for an in-house chartering
department.
|
|
·
|
Efficient
management of the Corporations’ cash flow, breakeven levels, interest rate
swaps, and currency swaps.
|
Review
of executive compensation
In
evaluating compensation for the named executive officers, the Compensation
Committee also reviews tally sheets that include the following
information:
|
·
|
Salary
and cash bonus compensation for prior years since the Company’s IPO in
2005;
|
|
·
|
Restricted
stock granted since the Company’s
IPO;
|
|
·
|
Vested
and unvested shares of restricted stock held;
and
|
11
|
·
|
The
value of benefits and perquisites.
|
In
determining total compensation amounts and the proper balance of compensation
types to provide appropriate incentives for performance, the Compensation
Committee analyzes the historical compensation information in the tally sheets,
including amounts potentially realizable on prior awards of restricted
stock.
Peer
group information
As the
Company’s overall performance is a factor in executive compensation, the
Compensation Committee compares the Company’s performance to a peer group of
publicly-traded shipping and tanker companies, the former of which are
competitors of the Company and consist of Jinhui Shipping & Transportation
Limited, Quintana Maritime Limited, and Eagle Bulk Shipping Inc. on such metrics
as market capitalization, return on equity, total shareholder return, EBITDA
margin and profit margin. A detailed analysis of our financial and
operational performance is contained in the Management’s Discussion &
Analysis section of our 2007 Annual Report filed with the SEC.
In order
to maintain the competitiveness of the Company’s executive compensation, the
Compensation Committee also compares its executive compensation arrangements to
those of another group of publicly-traded drybulk shipping and tanker companies
deemed to be similarly situated to the Company, which include Quintana Maritime
Limited and Eagle Bulk Shipping Inc. This second group is used to
compare compensation arrangements because some of the Company’s competitors are
not required to disclose all of the relevant compensation
information. The Compensation Committee uses this second group as a
general frame of reference only and does not target the Company’s executive
compensation as a specific percentile of the executive compensation awarded in
this group.
Determination
of executive compensation
In
consideration of the various factors described above, the compensation packages
recommended by the Compensation Committee and approved by the Board of Directors
in its last fiscal year reflected increases in accordance with the Committee’s
assessment of the extraordinary performance of the Company’s named executive
officers in such year. The Compensation Committee considered Mr.
Buchanan’s compensation in light of his efficient and profitable management of
operation of the Company's vessels. For Mr. Buchanan, the approved
package thus consisted of an increased base salary of $350,000, representing an
increase of $50,000 over the prior year; a cash bonus of $450,000, representing
an increase of $200,000 over the prior year, and a grant of 15,000 shares of
restricted stock, the same amount granted in the prior year. The
Compensation Committee recommended Mr. Wobensmith’s compensation based on his
roles in arranging for the Company’s vessel acquisitions and new credit
facilities in the past year as well as serving as the Company’s main
representative to investors and lenders, roles which the Compensation Committee
believe go beyond what is typically expected of a public company chief financial
officer. For Mr. Wobensmith, the approved package therefore consisted
of an increased base salary of $350,000, representing an increase of $50,000
over the prior year; a cash bonus of $1,000,000, representing an increase of
$350,000 over the prior year, and a grant of 50,000 shares of restricted stock,
representing an increase of 30,000 shares over the prior
year. Further details of the compensation awarded, including the
terms applicable to the restricted stock grants, are set forth below in this
proxy statement under “Executive Compensation.”
Tax
and accounting implications
Deductibility
of executive compensation
Section
162(m) of the Internal Revenue Code limits the deductibility of compensation to
certain employees in excess of $1 million. So long as the Company qualifies for
the exemption pursuant to Section 883 of the Internal Revenue Code of 1986, as
amended, it is not subject to United States federal income tax on its shipping
income (which comprised substantially all of its gross revenue in
2007). If the Company does not qualify for the Section 883
exemption, its shipping income derived from U.S. sources, or 50% of its gross
shipping income attributable to transportation beginning or ending in the United
States, would be subject to a 4% tax imposed without allowance for deductions.
Further discussion of this exemption is provided in the Company’s Annual Report
on Form 10-K for the Fiscal Year ended December 31, 2007, under the
heading “Risk Factors—Company Specific Risk Factors—We may have to
pay tax on U.S. source income . . .” For these reasons, the Company
has not sought to structure its cash bonus plan or grants under its 2005 Stock
Incentive Plan to qualify for exemption under Section 162(m).
12
Accounting
for stock-based compensation
In 2006,
the Company adopted FAS 123R for accounting for nonvested stock issued under its
2005 Stock Incentive Plan.
COMPENSATION
COMMITTEE REPORT
The
Compensation Committee of the Board has reviewed and discussed the Compensation
Discussion and Analysis required by Item 402(b) of Regulation S-K with
management and, based on such review and discussions, the Compensation Committee
recommended to the Board that the Compensation Discussion and Analysis be
included in this Proxy Statement.
Submitted
by the Compensation Committee of the Board of Directors:
Basil G.
Mavroleon, Chairman
Nathaniel
C.A. Kramer
Harry A.
Perrin
EXECUTIVE
COMPENSATION
The
following table sets forth in summary form information concerning the
compensation paid by us during the years ended December 31, 2007 and December
31, 2006, to our named executive officers:
|
Summary
Compensation Table
|
||||||||||||
|
Name
and Principal Position
(a)
|
Year
(b)
|
Salary
($)
(c)
|
Bonus
($)
(d)
|
Stock
Awards
($)(1)
(e)
|
All
Other Compensation ($)
(i)
|
Total
($)
(j)
|
||||||
|
Robert
G. Buchanan
President
|
2007
|
$300,000
|
$450,000
|
$391,591
|
$ —
|
$1,141,591
|
||||||
|
2006
|
$300,000
|
$250,000
|
$357,154
|
$ —
|
$907,154
|
|||||||
|
John
C. Wobensmith
Chief
Financial
Officer,
Principal
Accounting
Officer,
Secretary
and
Treasurer
|
2007
|
$300,000
|
$1,000,000
|
$529,815
|
$13,500(2)
|
$1,843,315
|
||||||
|
2006
|
$250,000
|
$650,000
|
$427,880
|
$13,200(2)
|
$1,327,880
|
|||||||
|
(1)
|
The
amounts in column (e) reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal years ended December 31, 2006
and 2007, in accordance with FAS 123R, of awards pursuant to the Company’s
2005 Equity Incentive Plan and includes amounts from awards granted both
in and prior to 2006 and 2007, respectively. Details regarding the
calculation of these amounts are included in Notes 2 and 16 to the
Company’s audited financial statements for the fiscal year ended December
31, 2006, included in the Company’s Annual Report on Form 10-K filed with
the Securities and Exchange Commission on February 9, 2007, and in Notes 2
and 18 to the Company’s audited financial statements for the fiscal year
ended December 31, 2007, included in the Company’s Annual Report on Form
10-K filed with the Securities and Exchange Commission on February 29,
2008. The actual amount realized by the named executive will
likely vary based on a number of factors, including the Company’s
performance, stock price fluctuations and applicable
vesting. Additional information regarding stock awards is
provided in the Grants of Plan-Based Awards table
below.
|
13
|
(2)
|
Represents
payments made to the 401(k) Plan.
|
The
following table reflects awards of restricted stock under the Company’s 2005
Equity Incentive Plan during the year ended December 31, 2007:
|
Grants
of Plan-Based Awards
|
|||||
|
Name
(a)
|
Grant
Date
(b)
|
All
Other Stock Awards: Number of Shares of Stock
(i)
|
Grant
Date Fair Value of Stock
Awards
($)
(l)
|
||
|
Robert
G. Buchanan
|
12/21/07
|
15,000
(1)
|
$795,900
|
||
|
John
C. Wobensmith
|
12/21/07
|
50,000
(1)
|
$2,653,000
|
||
|
(1)
|
The
restrictions applicable to the shares will lapse with respect to 25% of
the shares on each of the first four anniversaries of November 15, 2007.
The restrictions applicable to the shares granted will also lapse with
respect to a pro rata percentage of the shares upon their death or
disability or termination without cause between two vesting dates, and
will lapse in full upon the occurrence of a Change in Control (as defined
in the 2005 Equity Incentive Plan). Recipients of restricted
share grants will receive dividends thereon at the same rate as is paid to
other holders of common stock but must repay dividends on any shares
subject to forfeiture under the terms of such recipient's grant agreement
unless the Board of Directors waives the repayment requirement as to
dividends on such shares.
|
The
following table provides information on restricted stock awards under the 2005
Equity Incentive Plan that were not vested as of December 31, 2007:
|
Outstanding
Equity Awards at Fiscal Year-End
|
||||
|
Name
(a)
|
Number
of Shares of Stock That Have Not Vested
(g)
|
Market
Value of Shares
of
Stock that Have Not
Vested
($) (3)
(h)
|
||
|
Robert
G. Buchanan
|
46,175(1)
|
$2,528,543
|
||
|
John
C. Wobensmith
|
88,631(2)
|
$4,853,434
|
||
|
(1)
|
Represents
the unvested portions of: 29,850 restricted shares of our common stock
granted on October 31, 2005, which vest in four equal installments on the
first four anniversaries of the date of the Company’s initial public
offering; 10,000 restricted shares of our common stock granted on December
21, 2005, which vest in four equal installments commencing on November 15,
2006 and on each of the first three anniversaries thereafter; 15,000
restricted shares of our common stock granted on December 22, 2006, which
vest in four equal installments commencing on November 15, 2007 and on
each of the first three anniversaries thereafter; and 15,000 restricted
shares of our common stock granted on December 21, 2007, which vest in
four equal installments commencing on November 15, 2008 and on each of the
first three anniversaries thereafter. The foregoing grants are subject to
accelerated vesting under certain circumstances set forth in the relevant
grant agreement.
|
|
(2)
|
Represents
the unvested portions of: 32,262 restricted shares of our common stock
granted on October 31, 2005, which vest in four equal installments on the
first four anniversaries of the date of the Company’s initial public
offering; 15,000 restricted shares of our common stock granted
on December 21, 2005, which vest in four equal installments commencing on
November 15, 2006 and on each of the first three anniversaries thereafter;
20,000 restricted shares of our common stock granted on December 22, 2006,
which vest in four equal installments commencing on November 15, 2007 and
on each of the first three anniversaries thereafter; and 50,000 restricted
shares of our common stock granted on December 21, 2007, which vest in
four equal installments commencing on November 15, 2008 and on each of the
first three anniversaries thereafter. The foregoing grants are subject to
accelerated vesting under certain circumstances set forth in the relevant
grant agreement.
|
14
|
(3)
|
The
value of the unvested stock awards equals the number of unvested shares
held multiplied by $54.76, the closing price of the Company’s common stock
on the NYSE on December 31, 2007, which was the last trading date of the
year ended December 31, 2007.
|
The
following table provides information regarding the number of restricted stock
awards that vested during the year ended December 31, 2007:
|
Stock
Vested
|
||||
|
Name
(a)
|
Number
of Shares Acquired on Vesting
(d)
|
Value
Realized on Vesting ($) (1)
(e)
|
||
|
Robert
G. Buchanan
|
13,713
|
$785,562
|
||
|
John
C. Wobensmith
|
16,816
|
$960,798
|
||
|
(1)
|
The
value of the unvested stock awards that vested during the year ended
December 31, 2007 equals the number of shares vested multiplied by the
closing price of the Company’s common stock on the NYSE on the vesting
date of each grant.
|
Executive
Employment Agreement
We
entered into a letter agreement (the “Employment Agreement”) with John C.
Wobensmith, our Chief Financial Officer, Principal Accounting Officer, Secretary
and Treasurer, effective as of September 21, 2007, with a term continuing
through September 20, 2009. The Employment Agreement provides for
automatic renewal for additional one year terms, unless either party terminates
the Employment Agreement on at least 90 days’ notice. The Employment
Agreement provides for a base salary per annum of $300,000 as well as
discretionary bonuses as determined by the Compensation Committee of the Board
of Directors in its sole discretion. Mr. Wobensmith will also be
eligible to receive restricted stock and other equity grants from time to time
pursuant to our 2005 Equity Incentive Plan, or any successor employee stock
incentive or option plan. We will pay for life insurance and
long-term disability insurance for Mr. Wobensmith pursuant to the Employment
Agreement at a cost of no more than $20,000 per annum.
Mr.
Wobensmith’s Employment Agreement provides for certain payments and benefits
upon termination of his employment. For details, please see “Potential
Payments upon Termination or Change-in-Control—Executive Employment Agreement”
below.
Under his
Employment Agreement, Mr. Wobensmith has agreed to protect our confidential
information and not to solicit our employees for other employment for two years
after termination. He has also agreed not to engage in certain
defined competitive activities described in the Employment Agreement for two
years after the termination of his employment with us. Certain
provisions regarding competitive activities will not apply following a change of
control or in the event of termination of Mr. Wobensmith by us without cause or
by Mr. Wobensmith for good reason. For purposes of the Employment
Agreement, change of control is defined generally as the acquisition of
beneficial ownership of 30% or more of the voting power of the Company within a
12-month period or of more than 50% of such aggregate voting power or the value
of our capital stock by any person or group other than Peter C. Georgiopoulos or
Oaktree Capital Management, L.P., formerly Oaktree Capital Management, LLC, and
its related entities; the sale of all or substantially all of our assets within
a 12-month period; any merger or similar transaction in which holders of our
voting stock immediately prior to such transaction do not hold at least 50% of
the voting stock of the surviving entity; or a majority of the members of our
Board of Directors being replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of our Board of Directors
before the date of such appointment or election.
15
Potential
Payments upon Termination or Change-in-Control
Executive
Employment Agreement
Mr.
Wobensmith’s Employment Agreement calls for him to receive payments under
certain circumstances following a termination of his employment. If
Mr. Wobensmith is terminated without cause or resigns for good reason, we will
pay him a pro rata bonus for the year of termination, plus a lump sum equal to
double the average of his prior three years’ annual incentive awards, plus
double his annualized base salary, and provide medical, dental, long-term
disability, and life insurance benefit plan coverage for him and his eligible
dependents for a period of two years. For these purposes, we will
treat Mr. Wobensmith as having received an annual incentive award of not less
than $500,000 for each of 2005 and 2006. If a termination without
cause or resignation for good reason occurs within two years of a change in
control, the amounts that are doubled above become tripled, and the coverage
period of two years becomes three years. Mr. Wobensmith’s annual
incentive award for a given year is his cash bonus earned for that year and, if
a termination without cause or resignation for good reason occurs within two
years of a change in control, the grant date value of any equity awards granted
for such year.
If a
payment to Mr. Wobensmith under the Employment Agreement or otherwise after a
change of control causes him to owe excise tax under Section 4999 of the
Internal Revenue Code, we will fund the amount of this tax on a fully
“grossed-up” basis, intended to ensure that after payment of the excise tax and
any related taxes and penalties, Mr. Wobensmith retains the full amount of the
payment that gave rise to the excise tax liability.
In the
event of termination of Mr. Wobensmith’s employment due to his death or
disability, we will pay him, or his estate, a pro rata bonus for the year of
termination and one year’s salary and, in the case of disability, to provide
medical coverage for him and his eligible dependents for a period of one
year.
The table
below sets forth the payments and other benefits that would be provided to Mr.
Wobensmith upon termination of his employment by us without cause or by him for
good reason under the following sets of circumstances as described more fully
above: change of control, no change of control, and death or disability. In each
set of circumstances, we have assumed a termination as of the end of the day on
December 31, 2007 and used the closing price of our common stock on that date of
$54.76 per share for purposes of the calculations for the table
below:
|
Termination
by Executive for Good Reason or by Company without Cause
|
||||||||||||
|
Change
of Control (1)
|
No
Change of Control
|
Death
or Disability
|
||||||||||
|
Cash
Severance Payment
|
$ | 7,636,070 | $ | 2,325,000 | $ | 300,000 | ||||||
|
Estimated
Present Value of Continued Benefits Following Termination
(2)
|
$ | 83,883 | $ | 56,229 | $ | 28,314 | ||||||
|
(1)
|
Includes
funding of excise tax under Section 280G of the Internal Revenue Code on a
fully “grossed-up” basis on severance payments made and on the value of
restricted stock subject to accelerated vesting. See “Potential Payments
upon Termination or Change-in-Control—Executive Employment Agreement”
above and “— Accelerated Vesting of Restricted Stock”
below.
|
|
(2)
|
Mr.
Wobensmith and his dependents are entitled to medical, dental and certain
other insurance coverage substantially identical to the coverage in place
prior to termination. This benefit period is two years if we
terminate Mr. Wobensmith’s employment without cause or if he terminates
his employment with good reason, three years if such a termination occurs
within two years following a change in control, or twelve months in the
event of his death or disability. The amounts presented for
termination for good reason or without cause assume a discount rate of 6%
per annum and annual cost increases of 16% for health
insurance. The amounts presented for death or disability assume
circumstances which would provide the maximum benefit (i.e., disability of
the executive).
|
16
Accelerated
Vesting of Restricted Stock
Under the
terms of the restricted stock grant agreements between the Company and its named
executive officers, all shares of restricted stock vest in full automatically
upon the occurrence of a change of control (as defined under our 2005 Equity
Incentive Plan). In addition, if the officer’s service to the Company
is terminated by the Company without cause or by reason of his death or
disability (each as defined under our 2005 Equity Incentive Plan), the
restrictions lapse as to a pro rata percentage of the shares, calculated
monthly, that would otherwise vest at the next anniversary of the grant
date. For purposes of these agreements, “service” means a
continuous time period during which recipient of a restricted stock grant is at
least one of the following: an employee or a director of, or a
consultant to, the Company.
The
tables below set forth the vesting of restricted stock that the named executive
officers would receive upon termination of their service to the Company under
the following sets of circumstances: change of control and
termination without cause or by reason of death or
disability. In each set of circumstances, we have assumed a
termination as of the end of the day on December 31, 2007 and used the closing
price of our common stock on that date of
$54.76 per share for purposes of the calculations for the tables
below:
|
Name
|
Value
of Restricted Stock Subject to Accelerated
Vesting
($)
|
|||||||
|
Change
of Control
|
Termination
without Cause or by Reason of Death or Disability
|
|||||||
|
Robert
G. Buchanan
|
$ | 2,528,543 | $ | 198,779 | ||||
|
John
C. Wobensmith
|
$ | 4,853,434 | $ | 223,968 | ||||
Equity
Compensation Plan Information
The
following table provides information as of December 31, 2007 regarding the
number of shares of the Company’s common stock that may be issued under the
Company’s 2005 Equity Incentive Plan, which is the Company’s sole equity
compensation plan:
|
|
|
|
|||||||||||
|
Number
of securities to be issued
upon exercise of outstanding
options,
|
Weighted-average
exercise price of outstanding options,
warrants and |
Number
of securities remaining
available for |
|||||||||||
|
Plan
category
|
(a)
|
(b)
|
(c)
|
||||||||||
|
Equity
compensation plans approved by security holders
|
—
|
$
|
—
|
1,652,401
|
|||||||||
|
Equity
compensation plans not approved by security holders
|
—
|
—
|
—
|
||||||||||
|
Total
|
—
|
$
|
—
|
1,652,401
|
|||||||||
The role
of the Audit Committee is to assist the Board of Directors in its oversight of
the quality and integrity of the accounting, auditing and financial reporting
practices of the Company and the independence and performance of the Company's
auditors. The Board of Directors, in its business judgment, has determined that
all members of the Committee are “independent,” as provided under the applicable
listing standards of the NYSE. The Committee operates pursuant to a
Charter. As set forth in the Charter, the Committee's job is one of
oversight. Management is responsible for the preparation, presentation and
integrity of the Company's financial statements. Management is also responsible
for maintaining appropriate accounting and financial reporting principles and
practices and internal
17
controls
and procedures designed to assure compliance with accounting standards and
applicable laws and regulations. The independent auditors are responsible for
auditing the annual financial statements, expressing an opinion based on their
audit as to the statements' conformity with generally accepted accounting
principles, monitoring the effectiveness of the Company's internal controls,
reviewing the Company's quarterly financial statements prior to the filing of
each quarterly report on Form 10-Q and discussing with the Committee any issues
they believe should be raised with the Committee.
The
Committee met with the Company's independent auditors to review and discuss the
overall scope and plans for the audit of the Company's consolidated financial
statements for the year ended December 31, 2007. The Committee has considered
and discussed with management and the independent auditors (both alone and with
management present) the audited financial statements and the overall quality of
the Company's financial reporting. Management represented to the Committee that
the Company's financial statements were prepared in accordance with generally
accepted accounting principles, and the Committee reviewed and discussed the
financial statements with management.
The
Committee has also discussed with the independent auditors the matters required
to be discussed by Statement on Auditing Standards No. 61, Communication with
Audit Committees, as currently in effect. Finally, the Committee has
received written disclosures and the letter from the independent auditors
required by Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees, as currently in effect. The
Committee has considered whether the provision of non-audit services by the
independent auditors to the Company is compatible with maintaining the auditor's
independence and has discussed with the auditors the auditors'
independence.
The
members of the Audit Committee are not professionally engaged in the practice of
auditing or accounting and are not experts in the field of auditing or
accounting, including in respect of auditor independence. Members of the
Committee rely, without independent verification, on the information provided to
them and on the representations made by management and the independent auditors.
Accordingly, the Audit Committee's activities do not provide an independent
basis to determine that management has maintained appropriate internal control
and procedures designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee's
considerations and discussions referred to above do not assure that the audit of
the Company's financial statements has been carried out in accordance with
generally accepted auditing standards, that the financial statements are
presented in accordance with generally accepted accounting principles or that
the Company's auditors are in fact “independent.”
Based
upon the Committee's receipt and review of the various materials and assurances
described above and its discussions with management and independent auditors,
and subject to the limitations on the role and responsibilities of the Committee
referred to above and in the Charter, the Committee recommended to the Board
that the audited financial statements be included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2007, to be filed with the
Securities and Exchange Commission.
Submitted
by the Audit Committee of the Board of Directors:
Harry A.
Perrin, Chairman
Nathaniel
C.A. Kramer
Mark F.
Polzin
The
Report of the Audit Committee does not constitute soliciting material, and shall
not be deemed to be filed or incorporated by reference into any other Company
filing under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, except to the extent that the Company specifically
incorporates the Report of the Audit Committee by reference
therein.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS
AND MANAGEMENT
The
following table sets forth certain information regarding the beneficial
ownership of Genco’s voting common stock as of April 8, 2008 of:
18
|
·
|
each
person, group or entity known to Genco to beneficially own more than 5% of
our stock;
|
|
·
|
each
of our directors;
|
|
·
|
each
of our Named Executive Officers;
and
|
|
·
|
all
of our directors and executive officers as a
group.
|
As of
April 8, 2008, a total of 29,078,309 shares of common stock were outstanding and
entitled to vote at the Annual Meeting. Each share of common stock is entitled
to one vote on matters on which common shareholders are eligible to vote. The
amounts and percentages of common stock beneficially owned are reported on the
basis of regulations of the Securities and Exchange Commission governing the
determination of beneficial ownership of securities. Under the rules of the
Securities and Exchange Commission, a person is deemed to be a “beneficial
owner” of a security if that person has or shares “voting power,” which includes
the power to vote or to direct the voting of that security, or “investment
power,” which includes the power to dispose of or to direct the disposition of
that security. A person is also deemed to be a beneficial owner of any
securities as to which that person has a right to acquire beneficial ownership
presently or within 60 days. Under these rules, more than one person may be
deemed a beneficial owner of the same securities, and a person may be deemed to
be the beneficial owner of securities as to which that person has no economic
interest.
|
Name
and Address of Beneficial Owner (1)
|
Amount
of
Common
Stock
Beneficially
Owned
|
Percentage
of Common Stock
Outstanding
|
||||||
|
Peter
C. Georgiopoulos
|
4,135,316 | (3) | 14.22 | % | ||||
|
Robert
Gerald Buchanan
|
59,887 | (4) | * | |||||
|
John
C. Wobensmith
|
123,462 | (5) | * | |||||
|
Rear
Admiral Robert C. North, USCG (ret.)
|
4,900 | (6) | * | |||||
|
Basil
G. Mavroleon
|
4,900 | (6) | * | |||||
|
Nathaniel
C.A. Kramer
|
4,900 | (6) | * | |||||
|
Mark
F. Polzin
|
6,700 | (6) | * | |||||
|
Harry
A. Perrin
|
4,900 | (6) | * | |||||
|
Stephen
A. Kaplan (2)
|
2,512,532 | (7) | 8.64 | % | ||||
|
FMR
LLC
|
3,672,040 | (8) | 12.63 | % | ||||
|
B.
James Ford (2)
|
2,512,532 | (7) | 8.64 | % | ||||
|
OCM
Fleet Acquisition LLC (2)
|
2,512,532 | (9) | 8.64 | % | ||||
|
All
Directors and executive officers as a group
(9
persons)
|
4,344,965 | (7) | 14.94 | % | ||||
|
*
|
Less
than 1% of the outstanding shares of common
stock.
|
|
(1)
|
Unless
otherwise indicated, the business address of each beneficial owner
identified is c/o Genco Shipping & Trading Limited, 299 Park Avenue,
20th
Floor, New York, NY 10171.
|
|
(2)
|
Each
of Mr. Kaplan’s, Mr. Ford’s, and OCM Fleet Acquisition LLC’s address is
333 South Grand Avenue, 28th
Floor, Los Angeles, CA 90071.
|
|
(3)
|
Includes
1,200 restricted shares of our common stock granted on October 31, 2005,
which vested on May 18, 2006. Also includes 1,849 shares of
common stock distributed to Mr. Georgiopoulos by Fleet Acquisition LLC on
April 14, 2006 and 3,587,361 shares of common stock distributed to Mr.
Georgiopoulos by Fleet Acquisition LLC on December 15, 2006. On February
8, 2007, Mr. Georgiopoulos received a grant of 1,200 restricted shares
which vest on the earliest of February 8, 2008, the occurrence of a Change
in Control or the date of the Company’s 2007 Annual Meeting of
Shareholders. On January 10, 2008, Mr. Georgiopoulos received a
grant of 100,000 restricted shares which vest in ten equal installments
commencing on November
|
19
15, 2008
and on each of the first nine anniversaries thereafter. In addition,
this includes 443,606 shares of common stock owned by Fleet Acquisition LLC,
which may be deemed beneficially owned by Mr. Georgiopoulos by virtue of his
membership on the Management Committee of Fleet Acquisition LLC. Mr.
Georgiopoulos disclaims beneficial ownership of the securities owned by Fleet
Acquisition LLC except to the extent of his pecuniary interest
therein.
|
(4)
|
Includes
29,850 restricted shares of our common stock granted on October 31, 2005,
which vest in four equal installments on the first four anniversaries of
the date of the Company’s initial public offering; 10,000 restricted
shares of our common stock granted on December 21, 2005, which vest in
four equal installments commencing on November 15, 2006 and on each of the
first three anniversaries thereafter; 15,000 restricted shares of our
common stock granted on December 22, 2006, which vest in four equal
installments commencing on November 15, 2007 and on each of the first
three anniversaries thereafter; and 15,000 restricted shares of our common
stock granted on December 21, 2007, which vest in four equal installments
commencing on November 15, 2008 and on each of the first three
anniversaries thereafter. The foregoing grants are subject to accelerated
vesting under certain circumstances set forth in the relevant grant
agreement.
|
|
(5)
|
Includes
32,262 restricted shares of our common stock granted on October 31, 2005,
which vest in four equal installments on the first four anniversaries of
the date of the Company’s initial public offering; 15,000
restricted shares of our common stock granted on December 21, 2005, which
vest in four equal installments commencing on November 15, 2006 and on
each of the first three anniversaries thereafter; 20,000 restricted shares
of our common stock granted on December 22, 2006, which vest in four equal
installments commencing on November 15, 2007 and on each of the first
three anniversaries thereafter; and 50,000 restricted shares of our common
stock granted on December 21, 2007, which vest in four equal installments
commencing on November 15, 2008 and on each of the first three
anniversaries thereafter. The foregoing grants are subject to accelerated
vesting under certain circumstances set forth in the relevant grant
agreement.
|
|
|
(6)
|
Includes
1,200 restricted shares of our common stock granted on October 31, 2005,
which vested on May 18, 2006 and 1,200 restricted shares of our common
stock granted on February 8, 2007 which vested on May 16,
2007. On February 13, 2008, each member of the board other than
Messrs. Georgiopoulos and Kaplan received a grant of 2,500 nonvested
shares which vest on the earlier of February 13, 2009 or the date of the
Company’s 2008 Annual Meeting of Shareholders.
|
|
|
(7)
|
Oaktree
Capital Group Holdings GP, LLC (“Oaktree Group”) ultimately controls OCM
Principal Opportunities Fund III, L.P. and OCM Principal Opportunities
Fund IIIA, L.P., or the Oaktree funds. Oaktree Group is a
limited liability company managed by an executive committee, the members
of which are Howard S. Marks, Bruce A. Karsh, Sheldon M. Stone, D. Richard
Masson, Larry W. Keele, Stephen A. Kaplan (who is a director of the
Company), John B. Frank, David Kirchheimer and Kevin L.
Clayton. Oaktree Group and each such person disclaim beneficial
ownership of the shares listed except to the extent of its pecuniary
interest in them. The Oaktree funds, of which Messrs. Kaplan and Ford
serve as portfolio managers, own OCM Fleet Acquisition LLC, which in turn
owns a nominal equity interest in Fleet Acquisition LLC. OCM
Fleet Acquisition LLC may be deemed to be affiliated with Oaktree Group by
reason of the relationship of the Oaktree funds with Oaktree
Group. To the extent Messrs. Kaplan and Ford participate in the
process to vote or dispose of shares held by OCM Fleet Acquisition LLC,
each of them may be deemed under certain circumstances to beneficially own
those shares for purposes of Section 13 of the Securities Exchange Act of
1934. However, each of Messrs. Kaplan and Ford disclaim beneficial
ownership of these shares except to the extent of their pecuniary interest
therein.
|
|
|
(8)
|
Information
regarding share ownership was obtained from the Schedule 13G/A filed
jointly on March 10, 2008 by FMR LLC, Edward C. Johnson 3d, and Fidelity
Management & Research Company (“Fidelity”), each of whose address is
82 Devonshire Street, Boston, MA 02109. Fidelity, a
wholly-owned subsidiary of FMR LLC and an investment adviser registered
under Section 203 of the Investment Advisers Act of 1940 with the same
address as FMR LLC, is the beneficial owner of 3,375,940 shares of the
Company’s outstanding Common Stock as a result of acting as investment
adviser to various investment companies registered under Section 8 of the
Investment Company Act of 1940. Members of the family of Edward
C. Johnson 3d, Chairman of FMR LLC, own 49% of the voting power of FMR
LLC. Pyramis Global Advisors Trust
Company (“PGATC”), an indirect wholly-owned subsidiary of FMR LLC with an
address of 53 State
|
|
20
Street,
Boston, Massachusetts, 02109 and a bank as defined in Section 3(a)(6) of the
Securities Exchange Act of 1934, is the beneficial owner of 203,400 shares of
the Company’s outstanding Common Stock of the Company as a result of its serving
as investment manager of institutional accounts owning such
shares. FIL Limited, formerly known as Fidelity International Limited
(“FIL”), with an address of Pembroke Hall, 42 Crow Lane, Hamilton, Bermuda, and
various foreign-based subsidiaries provide investment advisory and management
services to a number of non-U.S. investment companies and certain institutional
investors. FIL is the beneficial owner of 92,700 shares of the
Company’s outstanding Common Stock. Partnerships controlled
predominantly by members of the family of Edward C. Johnson 3d, Chairman of FMR
LLC and FIL, or trusts for their benefit, own shares of FIL voting stock with
the right to cast approximately 47% of the total votes which may be cast by all
holders of FIL voting stock. FMR LLC and FIL are separate and
independent corporate entities, and their Boards of Directors are generally
composed of different individuals. However, FMR made a filing on
Schedule 13G on a voluntary basis as if all of the shares are beneficially owned
by FMR LLC and FIL on a joint basis.
|
(9)
|
On
March 10, 2008, Fleet Acquisition LLC distributed 2,512,532 shares of the
Company’s common stock to OCM Fleet Acquisition LLC, as a member thereof,
pursuant to an agreement among Fleet Acquisition LLC’s
members.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Registration
Rights Agreement
We
entered into a registration rights agreement on July 15, 2005, with Fleet
Acquisition LLC, pursuant to which we granted it, its affiliates and certain of
its transferees, the right, under specified circumstances and subject to
specified restrictions, including restrictions included in the lock-up
agreements to which Fleet Acquisition is a party, to require us to register
under the Securities Act shares of our common stock held by it. Under the
registration rights agreement, these persons have the right to request us to
register the sale of shares held by them on their behalf and may require us to
make available shelf registration statements that will permit sales of shares
into the market from time to time over an extended period. In addition, these
persons have the ability to exercise certain piggyback registration rights in
connection with registered offerings requested by shareholders or initiated by
us. To date, Fleet Acquisition LLC has exercised its registration
rights with respect to 5,906,291 shares of our common stock, which were sold on
February 20, 2007 and September 26, 2007 in two secondary offerings under our
shelf registration statement on Form S-3. Fleet Acquisition LLC
currently owns 443,606 shares entitled to these registration rights, and the
2,512,532 shares of the Company’s Common Stock distributed by Fleet Acquisition
LLC to its member OCM Fleet Acquisition LLC on March 10, 2008 are also entitled
to these registration rights.
Transactions
with General Maritime Corporation
In June
2006, the Company made an employee performing internal audit services available
to General Maritime Corporation (“GMC”), where the Company’s Chairman,
Peter C. Georgiopoulos, also serves as Chairman of the Board, Chief Executive
Officer and President. For the year ended December 31, 2007, the
Company invoiced $167,016 to GMC for the time associated with such internal
audit services. At December 31, 2007, the amount due GMC from the
Company was $4,687.
During
2007, the Company incurred travel-related and miscellaneous expenditures
totaling $248,261. These travel-related expenditures are reimbursable
to GMC or its service provider.
Other
Transactions
During
2007, the Company incurred legal services (primarily in connection with vessel
acquisitions) aggregating $219,020 from Constantine Georgiopoulos, the father of
Peter C. Georgiopoulos, Chairman of the Board. At December 31, 2007, $86,424 was
outstanding to Constantine Georgiopoulos.
21
During
2007, the Company utilized the services of North Star Maritime, Inc. (“NSM”),
which is owned and operated by one of our directors, Rear Admiral Robert C.
North, USCG (ret.). NSM, a marine industry consulting firm,
specializes in international and domestic maritime safety, security and
environmental protection issues. NSM billed the Company $11,743 for
services rendered. There are no amounts due to NSM at December 31,
2007.
In
December 2006, the Company engaged the services of WeberCompass (Hellas) S.A.
(“WC”), a shipbroker, to facilitate the sale of the Genco Glory, which was
completed on February 21, 2007. One of our directors, Basil G.
Mavroleon, is a Managing Director of WC and a Managing Director and shareholder
of Charles R. Weber Company, Inc., which is 50% shareholder of WC. WC
received a commission of $131,500, or 1% of the gross selling price of the Genco
Glory.
Review
and Approval of Transactions with Related Persons
In April
2007, our Board of Directors adopted a policy and procedures for review,
approval and monitoring of transactions involving the Company and “related
persons” (generally, directors and executive officers, director nominees,
shareholders owning five percent or greater of any class of the Company’s voting
securities, immediate family members of the foregoing). The policy
covers any related person transaction that meets the minimum threshold for
disclosure in the proxy statement under the relevant SEC rules (generally,
transactions involving amounts exceeding $120,000 in which a related person has
a direct or indirect material interest) and will be applied to any such
transactions proposed after its adoption.
Related
person transactions must be approved by the Board or by a committee of the Board
consisting solely of independent directors, who will approve the transaction
only if they determine that it is in the best interests of the
Company. In considering the transaction, the Board or committee will
consider all relevant factors, including as applicable (i) the related person’s
interest in the transaction; (ii) the approximate dollar value of the amount
involved in the transaction; (iii) the approximate dollar value of the
amount of the related person’s interest in the transaction without regard to the
amount of any profit or loss; (iv) the Company’s business rationale for entering
into the transaction; (v) the alternatives to entering into a related person
transaction; (vi) whether the transaction is on terms no less favorable to the
Company than terms that could have been reached with an unrelated third party;
(vii) the potential for the transaction to lead to an actual or apparent
conflict of interest and any safeguards imposed to prevent such actual or
apparent conflicts; (viii) the overall fairness of the transaction to the
Company; and (ix) any other information regarding the transaction or the related
person in the context of the proposed transaction that would be material to
investors in light of the circumstances of the particular
transaction. If a director is involved in the transaction, he or she
will not cast a vote regarding the transaction.
PROPOSAL
NO. 2
RATIFICATION
OF APPOINTMENT OF INDEPENDENT AUDITORS
Our Audit
Committee has selected the firm of Deloitte & Touche LLP as Genco's
independent auditors to audit the financial statements of Genco for the fiscal
year ending December 31, 2008 and recommends that shareholders vote for
ratification of this appointment. Representatives of Deloitte & Touche LLP
are expected to be present at the Annual Meeting, will have the opportunity to
make a statement if they desire to do so and are expected to be available to
respond to appropriate questions. The affirmative vote of the holders of a
majority of the shares present in person or represented by proxy and voting at
the Annual Meeting will be required to ratify the selection of Deloitte &
Touche LLP.
If the
shareholders fail to ratify the selection, our Audit Committee will
reconsider its selection of auditors. Even if the selection is ratified, our
Audit Committee in its discretion may direct the appointment of different
independent auditors at any time during the year if it determines that such
change would be in the best interests of Genco and its
shareholders.
22
Fees
to Independent Auditors for Fiscal 2007 and 2006
The
following table presents fees for professional services rendered by Deloitte
& Touche LLP for the audit of the Company’s annual financial statements for
fiscal 2007 and fiscal 2006 and fees billed for audit-related services, tax
services and all other services rendered by Deloitte & Touche LLP for fiscal
2007 and fiscal 2006.
| Type of Fees |
2007
($ in
thousands)
|
2006
($ in
thousands)
|
||||||
| Audit Fees | $ | 870 | $ | 572 | ||||
| Audit-Related Fees | $ | 0 | $ | 0 | ||||
| Tax Fees | $ | 0 | $ | 0 | ||||
| All Other Fees | $ | 0 | $ | 0 | ||||
| Total | $ | 870 | $ | 572 | ||||
In the
above table, in accordance with the SEC’s definitions and rules, “audit fees”
are fees that the Company paid to the auditor for the audit of the Company’s
annual financial statements included in its Form 10-K and review of financial
statements included in its Form 10-Qs and for services that are normally
provided by the auditor in connection with statutory and regulatory filings or
engagements. “Audit-related fees” are fees for assurance and related
services that are reasonably related to the performance of the audit or review
of the Company’s financial statements; “tax fees” are fees for tax compliance,
tax advice and tax planning; and “all other fees” are fees for any services not
included in the first three categories.
The Audit
Committee has responsibility for the appointment, compensation and oversight of
the work of the independent auditor. As part of this responsibility, the Audit
Committee must pre-approve all permissible services to be performed by the
independent auditor.
The Audit
Committee has adopted an auditor pre-approval policy which sets forth the
procedures and conditions pursuant to which pre-approval may be given for
services performed by the independent auditor. Under the policy, the Committee
must give prior approval for any amount or type of service within four
categories: audit, audit-related, tax services or, to the extent
permitted by law, other services that the independent auditor provides. Prior to
the annual engagement, the Audit Committee may grant general pre-approval for
independent auditor services within these four categories at maximum
pre-approved fee levels. During the year, circumstances may arise when it may
become necessary to engage the independent auditor for additional services not
contemplated in the original pre-approval and, in those instances, such service
will require separate pre-approval by the Audit Committee if it is to be
provided by the independent auditor. For any pre-approval, the Audit Committee
will consider whether such services are consistent with the SEC’s rules on
auditor independence, whether the auditor is best positioned to provide the most
cost effective and efficient service and whether the service might enhance the
Company's ability to manage or control risk or improve audit quality. The Audit
Committee may delegate to one or more of its members authority to approve a
request for pre-approval provided the member reports any approval so given to
the Audit Committee at its next scheduled meeting.
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE
RATIFICATION (ITEM 2 OF THE ENCLOSED PROXY CARD) OF THE APPOINTMENT OF DELOITTE
& TOUCHE LLP AS GENCO'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2008.
SHAREHOLDER
PROPOSALS
Shareholder
proposals to be presented at the 2009 Annual Meeting of Shareholders must be
received by Genco at its offices in New York, New York, addressed to the
Secretary, not later than January 1, 2009, if the proposal is submitted for
inclusion in Genco’s proxy materials for that meeting pursuant to Rule 14a-8
under the Securities Act of 1934, or not earlier than November 15, 2008 and not
later than December 15, 2008 if the proposal is submitted
23
pursuant
to Genco’s By-Laws. Such proposals must comply with Genco's By-Laws
and the requirements of Regulation 14A of the 1934 Act.
In
addition, Rule 14a-4 of the 1934 Act governs Genco's use of its discretionary
proxy voting authority with respect to a shareholder proposal that is not
addressed in the proxy statement. With respect to Genco's 2009 Annual Meeting of
Shareholders, if Genco is not provided notice of a shareholder proposal on or
after November 15, 2008, but not later than December 15,
2008 Genco will be allowed to use its discretionary voting authority when the
proposal is raised at the meeting, without any discussion of the matter in the
proxy statement.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant
to Section 16(a) of the 1934 Act and the rules thereunder, Genco's executive
officers and directors and persons who own more than 10% of a registered class
of Genco's equity securities, or 10% holders, are required to file with the
Securities and Exchange Commission reports of their ownership of, and
transactions in, Genco's common stock. Based solely on a review of copies of
such reports furnished to Genco, and written representations that no reports
were required, Genco believes that during the fiscal year ended December 31,
2007 its executive officers, directors, and 10% holders complied with the
Section 16(a) requirements.
ANNUAL
REPORT ON FORM 10-K
Genco
will provide without charge a copy of its Annual Report on Form 10-K filed with
the Securities and Exchange Commission on February 29, 2008 (without the
exhibits attached thereto) to any person who was a holder of Genco common stock
on the Record Date. Requests for the Annual Report on Form 10-K should be made
in writing, should state that the requesting person held Genco common stock on
the Record Date and should be submitted to John C. Wobensmith, Chief Financial
Officer, Principal Accounting Officer, Secretary and Treasurer of Genco, at 299
Park Avenue (20th Floor), New York, New York 10019.
CHARITABLE
CONTRIBUTIONS
During
fiscal year 2007, the Company did not make any contributions, to any charitable
organization in which an independent director served as an executive officer,
which exceeded the greater of $1 million or 2% of the charitable organization’s
consolidated gross revenues.
OTHER
MATTERS
At the
date of this proxy statement, anagement was not aware that any matters not
referred to in this proxy statement would be presented for action at the Annual
Meeting. If any other matters should come before the Annual Meeting, the persons
named in the accompanying proxy will have discretionary authority to vote all
proxies in accordance with their best judgment, unless otherwise restricted by
law.
BY
ORDER OF THE BOARD OF DIRECTORS
/s/ John C. Wobensmith
John C.
Wobensmith
Chief Financial
Officer, Principal
Accounting Officer,
Secretary and Treasurer
Dated: April 16, 2008
24
VOTE
BY INTERNET - www.proxyvote.com
Use the Internet to transmit
your voting instructions and for electronic delivery of information up until
11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have
your proxy card in hand
card in hand when you access the web site and follow the instructions to obtain
your records and to create an electronic voting instruction
form.
ELECTRONIC
DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If you
would like to reduce the costs incurred by Genco Shipping & Trading Limited
in mailing proxy materials, you can consent to receiving all future proxy
statements, proxy cards and annual reports electronically via e-mail or
the
Internet. To sign up for electronic delivery, please follow the instructions
above to vote using the Internet and, when prompted, indicate that you agree to
receive or access shareholder communications electonically in future
years.
VOTE
BY PHONE - 1-800-690-6903
Use any
touch-tone telephone to transmit your voting instructions up until 11:59
P.M. Eastern Time the day before the cut-off date or meeting date.
Have your
proxy card in hand when you call and then follow the instructions.
VOTE
BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid
envelope
we have provided or return it to Genco Shipping & Trading Limited, c/o
Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE,
MARK BLOCKS BELOW IN BLUE OR BLACK INK AS
FOLLOWS:
GSHPL1
KEEP THIS
PORTION FOR YOUR RECORDS
DETACH AND
RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
GENCO
SHIPPING & TRADING LIMITED
For Withhold For All To withhold authority to vote for
any individual
All
All
Except
nominee(s), mark “For All Except” and write the
THE BOARD OF DIRECTORS RECOMMEND A VOTE "FOR" number(s) of the nominee(s) on the line below.
ITEMS 1 AND 2.
__________________________________.
Vote
on Directors [ ]
[ ]
[ ]
1.
ELECTION OF DIRECTORS
Nominees:
01) Peter
C. Georgiopoulos
02) Stephen
A. Kaplan
Vote
on Proposals
For
Against Abstain
2.
Ratification of appointment of independent auditors. [
] [
] [ ]
3. In their
discretion, upon such other matters that may properly come before the meeting or
any adjournment or adjournments thereof.
[
] [
]
[ ]
The shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned
shareholder(s).
If no direction is made, this proxy will be voted FOR items 1 and 2. If any other matters
properly come before the meeting, or if cumulative voting is
required,
the person named in this proxy will vote in their discretion.
For
address changes and/or comments, please check this box and write them on the
back where indicated. [
]
If you plan to attend the Annual Meeting, please check this box: [
]
Please sign your name exactly as it appears hereon. When
signing as attorney,
executor, administrator, trustee or
guardian, please add your title as such.
When
signing as joint tenants, all parties in the joint tenancy must sign. If a
signer
is a
corporation, please sign in full corporate name by duly authorized
officer.
_________________________________
____________ ___________________________ ______________
Signature
[PLEASE SIGN WITHIN BOX]
Date Signature
(Joint Owners)
Date
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting:
The
Company's Proxy Statement for the 2008 Annual Meeting of Shareholders and its
2007 Annual Report to Shareholders
are available at http://ww3.ics.adp.com/streetlink/gnk
GENCO
SHIPPING & TRADING LIMITED
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL
MEETING OF SHAREHOLDERS
MAY
14, 2008
The shareholder(s) hereby
appoint(s) Robert Gerald Buchanan and John C. Wobensmith, or either of them, as
proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated on the
reverse side of this ballot, all of the shares of Common Stock of Genco Shipping
& Trading Limited that the shareholder(s) is/are entitled to vote at the
Annual Meeting of Shareholders to be held at 1:00 p.m. Eastern Time on Wednesday, May 14,
2008, at the the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue
of the Americas, New York, NY, and any adjournment or postponement
thereof.
THIS
PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD
OF DIRECTORS AND FOR EACH PROPOSAL.
PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY
ENVELOPE
CONTINUED
AND TO BE SIGNED ON REVERSE SIDE
Address Changes/Comments: ________________________________________________________________________
________________________________________________________________________________________________
(If you
noted any Address Changes/Comments above, please mark corresponding box on the
reverse side.)