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
Filed
by
the Registrant x
Filed
by
a Party other than the Registrant r
Check
the
appropriate box:
x
Preliminary
Proxy Statement
r
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
r
Definitive
Proxy Statement
r
Definitive
Additional Materials
r
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)
Payment
of Filing Fee (Check the appropriate box):
x
No
fee
required
r
Fee
computed on table
below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title
of
each class of securities to which transaction applies:
_____________________________________________________________
(2) Aggregate
number of securities to which transaction applies:
_____________________________________________________________
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is
calculated and state how it was
determined):
|
_____________________________________________________________
(4) Proposed
maximum aggregate value of transaction:
_____________________________________________________________
(5) Total
fee
paid:
_____________________________________________________________
r
Fee
paid previously
with preliminary materials.
r
Check
box if any part
of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify
the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and
the date of its filing.
(1) Amount
Previously Paid:
_____________________________________________________________
(2) Form,
Schedule or Registration Statement No.:
_____________________________________________________________
(3) Filing
Party:
_____________________________________________________________
(4) Date
Filed:
_____________________________________________________________
Genco
Shipping & Trading Limited
299
Park
Avenue (20th
Floor)
New
York,
New York 10171
(646)
443-8550
April
__,
2006
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 2:00 p.m. on Thursday, May 18, 2006. 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,
_________________________
Chairman
2
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 18, 2006
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 18, 2006 at 2:00 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:
|
1.
|
To
elect three Class I Directors to the Board of Directors of
Genco;
|
|
2.
|
To
ratify the appointment of Deloitte & Touche LLP as the independent
auditors of Genco for the fiscal year ending December 31,
2006;
|
|
3.
|
To
consider and act upon a proposal to amend the Corporation’s Amended and
Restated Certificate of Incorporation limiting the liability of Genco’s
directors;
|
|
4.
|
To
consider and act upon a proposal to amend the Corporation’s Amended and
Restated Certificate of Incorporation permitting the Board of Directors
to
designate the class of a director who is appointed to a vacancy created
by
the Board of Director’s increase of the number of directors;
and
|
|
5.
|
To
transact such other business as may properly come before the Annual
Meeting or at any adjournment or postponement
thereof.
|
Shareholders
of record at the close of business on April 18, 2006 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. 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.
YOUR
VOTE IS IMPORTANT
IF
YOU
ARE UNABLE TO BE PRESENT PERSONALLY, 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,
______________________________
John
C.
Wobensmith
Chief
Financial Officer, Principal
Accounting
Officer, Secretary and Treasurer
New
York,
New York
April
___, 2006
3
299
Park
Avenue (20th
Floor)
New
York,
New York 10171
(646)
443-8550
__________________
PROXY
STATEMENT
ANNUAL
MEETING OF SHAREHOLDERS
TO
BE HELD MAY 18, 2006
___________________
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 18, 2006 at
2:00
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 24, 2006.
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 April 18, 2006 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 April 18, 2006, Genco had
issued and outstanding 25,434,212 shares of common stock. The common stock
comprises all of Genco's issued and outstanding voting stock.
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:
|
·
|
|
·
|
by
submitting another proxy with a later date;
or
|
|
·
|
by
attending the Annual Meeting and voting in
person.
|
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
4
ending
December 31, 2006; (iii) FOR the approval of the amendment to the Corporation’s
Amended and Restated Certificate of Incorporation limiting the liability of
Genco’s directors; (iv) FOR the proposal to amend the Corporation’s Amended and
Restated Certificate of Incorporation permitting the Board of Directors to
designate the class of a director who is appointed to a vacancy created by
the
Board of Director’s increase of the number of directors; and (v) 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.
The
affirmative vote of a majority of the outstanding shares of common stock is
required for approval of each of Proposals Three and Four. Abstentions and
broker non-votes will have the same effect as a vote "against" each of these
Proposals.
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.
5
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 I have terms
expiring at the 2006 Annual Meeting. The Board of Directors
has nominated the Class I directors currently serving on the Board of Directors,
Rear Admiral Robert C. North, USCG (ret.) and Basil G. Mavroleon, for
re-election to serve as Class I directors of the Company for a three-year term
until the 2009 Annual Meeting of Shareholders of the Company and until their
successors are elected and qualified or until their earlier resignation or
removal. Additionally, on August 15, 2005, the Board of Directors nominated
and
elected Harry A. Perrin, to the Board. Pursuant to the Company’s Articles of
Incorporation, as amended and restated, any directorship filled by the Board
by
reason of an increase in the number of directors shall be left unclassified
until such directorship is classified by the shareholders at the next ensuing
annual meeting of shareholders. Accordingly, the Board of Directors nominates
Harry A. Perrin for election to serve as a Class I director of the Company
for a
three year term until the 2009 Annual Meeting of Shareholders of the Company
and
until his successor is elected and qualified or until his 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. NORTH AND MAVROLEON
AS
CLASS I DIRECTORS.
Nominee
Information
The
following table sets forth information regarding the nominees for election
or
re-election as Class I Directors:
| Name |
Age
|
Class
|
Position
|
| Rear Admiral Robert C. North, USCG (ret.) |
61
|
I
|
Director
|
| Basil G. Mavroleon |
58
|
I
|
Director
|
| Harry A. Perrin |
53
|
I
|
Director
|
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 37 years. Since
1986, Mr. Mavroleon
has served as Managing Director of Charles R. Weber Company, Inc. one of
the largest ship brokerages and marine consultants in the United States. 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, the Membership
Committee of the Association of Ship Brokers and Agents, and is Vice Chairman
of
the New York World Scale Committee.
6
Harry
A. Perrin
has
served as a director of our company since August 15, 2005, and currently serves
as the Chairman of our company’s Audit Committee. Mr. Perrin has
worked as an investment banker with Petrie Parkman & Co, an investment
banking and financial advisory firm with offices in Houston, Texas and Denver,
Colorado. Prior to joining Petrie Parkman, Mr. Perrin was a partner for
ten years in the business finance and restructuring group for the Houston office
of Weil Gotshal & Manges. Before joining Weil Gotshal & Manges, in 1981
he formed the law firm of Maddox, Perrin & Kirkendall, where his practice
was focused primarily on bankruptcy, insolvency and creditors’ rights matters.
In 1980, Mr. Perrin began his legal career in the Houston office of Fulbright
& Jaworski. Prior to law school, Mr. Perrin worked in the audit department
of the Dallas office of Touche Ross & Co. Throughout his professional career
he has been involved in a broad range of complex financial, legal and accounting
matters including mergers, acquisitions and divestitures, restructurings and
recapitalizations, litigation, and private placements of debt and equity
securities. 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. Mr. Perrin was recommended to serve on the
Board of Directors by Oaktree Capital Management, LLC, a general partner of
certain funds that have an ownership interest in Fleet Acquisition LLC, our
largest shareholder.
Continuing
Director Information
The
following table sets information regarding our directors whose terms continue
after the 2006 Annual Meeting. The terms for Directors in Class II expire at
the
2007 Annual Meeting, and the terms for Directors in Class III expire at the
2008
Annual Meeting.
| Name |
Age
|
Class
|
Position
|
| Nathaniel C.A. Kramer |
44
|
II
|
Director
|
| Mark F. Polzin |
60
|
II
|
Director
|
| Peter C. Georgiopoulos |
45
|
III
|
Chairman
and
Director
|
| Stephen A. Kaplan |
47
|
III
|
Director
|
Class
II
Directors - Terms Expiring at the 2007 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. Since 1995,
Mr. Polzin has served as the President of Moreland Management Co., a
private asset management company, and has served as Chief Executive
Officer since 2005. Prior to joining Moreland in 1989, Mr. Polzin
served for 18 years as an executive and director of several midwestern community
banking organizations. He is a charter member of the Wealth Management Client
Advisory Board of The Northern Trust Company, Chicago, and a founding member,
director, and officer of the Center for the Study of Taxation, Costa Mesa,
California. He holds a B.S. in Economics from the University of
Wisconsin-Milwaukee and a J.D. from Marquette University Law School.
Class
III
Directors - Terms Expiring at the 2008 Annual Meeting
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
7
ship
ownership company to what today is an industry leader 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 the
present, he has served as a director of General Maritime Corporation. Since
1995, Mr. Kaplan has been a principal of Oaktree Capital Management, LLC, a
private investment management firm, where he co-manages 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
$3.5 billion in assets under his management. Since 1993, he has served as
portfolio manager of all of Oaktree's Principal Opportunities Funds, including
OCM Principal Opportunities III Fund, L.P. and OCM Principal Opportunities
Fund
IIIA, L.P., which collectively owns approximately 66.5% of Fleet Acquisition
LLC, our sole shareholder. From 1993 to 1995, Mr. Kaplan was a Managing
Director of Trust Company of the West. Before joining the 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 and numerous private companies.
Corporate
Governance
Governance
Materials
- All of
the Company’s corporate governance materials, including the committee charters
of the Board of Directors (the “Board”), 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.
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
(either directly or as a partner, shareholder or officer of an organization
that
has a relationship with the Company). The Board follows the criteria set forth
in applicable Nasdaq listing standards to determine director independence.
The
Board will consider all relevant facts and circumstances in making an
independence determination.
Within
one year of the Company’s listing on the Nasdaq Stock Market on July 22, 2005,
all members of the Audit, Compensation and Nominating and Corporate Governance
Committees must be independent directors as defined by applicable Nasdaq 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. Except
with respect to Peter Georgiopoulos, who is currently a member of the
Compensation and the Nominating and Corporate Governance Committees, 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 Nasdaq listing
standards. Mr. Georgiopoulos currently serves on these committees pursuant
to an
exception under the applicable Nasdaq listing standards. He will be replaced
by
an independent director on these committees prior to the first anniversary
of
our initial public offering.
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 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.
8
Communicating
Concerns to Directors
-
Shareholders desiring to communicate directly with the Board of Directors or
with any individual director may do so in writing 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 2005, there were three 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 the unanimous written
consent of the Directors. All directors other than Messrs. Kaplan and North
attended at least 75% of the aggregate of the total number of meetings of the
Board (held while they were directors). All directors other than Mr. Mavroleon
attended at least 75% of the total number of meetings held by all Committees
of
the Board on which they served (during the periods that they served). The
Company encourages all directors to attend each annual meeting of shareholders,
of which the current annual meeting is the Company’s first.
From
August 15, 2005, 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 Nasdaq 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 two
meetings during fiscal year 2005.
Since
July 27, 2005, Genco’s Compensation Committee has been comprised of Peter C.
Georgiopoulos, Basil G. Mavroleon, and Nathaniel C.A. Kramer, all of whom except
for Mr. Georgiopoulos qualify as independent under the listing requirements
of
Nasdaq, and none of whom is an employee of Genco. Through its written charter,
the Compensation Committee administers Genco's stock option plan and other
corporate benefits programs. The Compensation Committee also reviews and
approves bonuses, stock option grants, compensation, philosophy and current
competitive status, and executive officer compensation. The Compensation
Committee held one meeting during fiscal year 2005.
Since
July 27, 2005, Genco’s Nominating and Corporate Governance Committee has been
comprised of Peter C. Georgiopoulos, Rear Admiral Robert C. North, and Basil
G.
Mavroleon, all of whom except for Mr. Georgiopoulos qualify as independent
under
the listing requirements of Nasdaq, 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 a vacancy 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, 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 no meetings during fiscal year 2005.
9
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 |
57
|
President
(Principal Executive
Officer)
|
| John C. Wobensmith |
35
|
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.
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 12 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.
Executive
Compensation
The
following table sets forth in summary form information concerning the
compensation paid by us during the year ended December 31, 2005, to our
Directors and Senior Management.
Summary
Compensation Table
|
Annual
Compenstion
|
||||
|
Name
and Principal Position
|
Fiscal
Year
|
Salary
(1)
|
Bonus
|
Restricted
Stock Awards ($)
|
|
Robert
Gerald Buchanan - President
|
2005
|
$300,000
|
$150,000
|
$668,736
(2) (3)
|
|
|
2004
|
$0
|
$0
|
$0
|
|
John
C. Wobensmith - Chief Financial Officer
|
2005
|
$250,000
|
$425,000
|
$797,515
(2) (3)
|
|
2004
|
$0
|
$0
|
$0
|
|
|
(1)
|
Salary
reflected is the annualized salary. The executives received a pro-rata
portion of the amount listed based on their respective hire dates
during
2005. Messrs. Buchanan and Wobensmith were hired on June 1, 2005 and
April 4, 2005, respectively.
|
10
|
(2)
|
On
October 31, 2005, the Company awarded each of Messrs. Buchanan and
Wobensmith 29,850 and 32,262 shares of restricted stock, respectively.
The
restrictions applicable to the shares will lapse with respect to
25% of
the shares on the first four anniversaries of July 22, 2005. 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 of Control (as defined in the
2005
Equity Incentive Plan). Based
on the closing price of the Company’s common stock of $16.43 on the Nasdaq
on October 31, 2005, the value on that date of the restricted common
shares awarded to Robert
Gerald Buchanan
was $490,436 and to John
C. Wobensmith
was $530,065. 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.
|
|
(3)
|
On
December 21, 2005, the Company has agreed to award each of
Messrs. Buchanan and Wobensmith 10,000 and 15,000 shares of
restricted stock, respectively. The restrictions applicable to the
shares
will lapse with respect to 25% of the shares on each of the four
anniversaries of the determined vesting date beginning with November
15,
2006. 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 of Control (as
defined
in the 2005 Equity Incentive Plan). Based
on the closing price of the Company’s common stock of $17.83 on the Nasdaq
on December 21, 2005, the value on that date of the restricted common
shares awarded to: (1) Robert
Gerald Buchanan
was $178,300, (2) John
C. Wobensmith
was $267,450. 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.
|
Option
Grants for the Year Ended December 31, 2005
We
did
not grant any options to the Named Executive Officers during the fiscal year
ended December 31, 2005, nor were any options exercised during such
time.
Director
Compensation
For
fiscal year 2005, 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, each of which
was prorated based upon length of service. In addition, Peter C. Georgiopoulos,
Chairman of the Board, and Nathaniel C.A. Kramer, Basil G. Mavroleon, Rear
Admiral Robert C. North, USUGC (ret.), Harry A. Perrin, and Mark F. Polzin,
members of the Board, were each granted 1,200 restricted shares of common stock,
with restrictions on all such shares to lapse, if at all, on the earliest of
July 22, 2006, the occurrence of a Change of Control or the date of the
Company’s 2006 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 2006, each of our directors will
receive 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. We expect to make
annual restricted stock grants to directors, and we expect that 1,200 shares
of
restricted stock will be granted to each such director other than Mr. Kaplan
for
2006. We reimburse our directors for all reasonable expenses incurred by them
in
connection with serving on our board of directors.
Employment
Agreements
In
2006,
we intend to enter into employment agreements with our executive officers,
Messrs. Buchanan and Wobensmith.
11
The
Company has an incentive bonus program under which our executive officers and
our other key employees are eligible for cash bonus awards. These awards are
generally made at the end of the fiscal year in amounts determined in the sole
discretion of the Compensation Committee for executive officers and other
eligible key employees. Criteria for executive officer bonuses are discussed
below under the heading “Board Compensation Committee Report on Executive
Compensation” below.
Equity
Compensation Plan Information
The
following table provides information as of December 31, 2005 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
|
||||||
|
remaining
available for
|
||||||
|
|
Number
of securities to
|
Weighted-average
exercise
|
future
issuance under
|
|||
|
|
be
issued upon exercise
|
price
of outstanding
|
equity
compensation plans
|
|||
|
|
of
outstanding options,
|
options,
warrants and
|
(excluding
securities
|
|||
|
|
warrants
and rights
|
rights
|
reflected
in column (a))
|
|||
|
Plan
category
|
(a)
|
(b)
|
(c)
|
|||
|
Equity
compensation plans approved by security
holders
|
__
|
$
__
|
1,825,788
|
|
Equity
compensation plans not approved by security holders
|
__
|
__
|
__
|
| Total |
__
|
$
__
|
1,825,788
|
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.
COMPENSATION
COMMITTEE’S REPORT ON EXECUTIVE COMPENSATION
The
Compensation Committee of the Board of Directors (the "Committee") is composed
entirely of non-employee directors, of whom Basil G. Mavroleon and Nathaniel
C.A. Kramer are independent as defined in the applicable Nasdaq listing
standards. Peter
C.
Georgiopoulos currently serves on the Committee pursuant to an exception under
the applicable Nasdaq listing standards.
The
Committee is responsible for establishing and
administering the overall compensation policies applicable to the Company's
executive officers, and determining the annual cash compensation of the
Company's senior management. The Committee is also responsible for establishing
the general policies applicable to the granting, vesting and other terms of
the
awards made to current and newly hired officers and other key employees under
the Company's 2005 Equity Incentive Plan, and for determining the size and
terms
of the individual awards made to the Company's executive
officers.
The
Committee views its role as being to foster and oversee the creation of
compensation programs for the Company's executive officers and other key
management employees that are structured and implemented in a way that addresses
the Company's need to attract and retain the caliber of senior executives and
other key employees required for the Company to compete effectively in a highly
competitive and rapidly evolving business environment, while recognizing the
importance and value to the Company and its shareholders of achieving annual
and
longer-term performance goals and objectives.
Compensation
Deductibility Policy
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
12
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 2005). 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, 2005, 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 to qualify for exemption under Section 162(m). For purposes of Section
162(m), payments made under qualifying performance-based plans are not taken
into account. The Company's 2005 Stock Incentive Plan is designed and
administered to qualify as "performance-based" and grants thereunder are
therefore not subject to the Section 162(m) limitation.
Performance
and Compensation Review Process
The
review process included a meeting of the Committee, informal consultations
among
the Committee members and several consultations with the Company’s senior
executives. The Committee members reviewed (i) their assessment of the Company’s
performance in 2005 in terms of financial results and strategic initiatives
and
(ii) their assessment of each executive officer’s efforts, performance and
contributions for 2005, including the successful completion of the Company’s
$247 million initial public offering, the Company’s entry into a new, ten-year
term $450 million credit facility, and the Company’s expansion of its fleet to
17 vessels by taking delivery of the Genco Muse. The Committee’s recommendations
were made after due and careful consideration and in the light of the Company’s
performance and the performance of the individual executives. The Committee
duly
reported its findings to the full Board, which accepted the Committee’s
recommendations.
Base
Salary Levels and 2005 Annual Bonus Awards
As
part
of the review process described above, the base salary rate and proposed 2005
annual bonus award of each executive officer was reviewed, taking into account:
(i) each officer’s individual performance for 2005, (ii) the scope and
importance of the functions the officer performed or for which the officer
was
responsible, (iii) an assessment of the officer’s initiative, managerial ability
and overall contributions to corporate performance and (v) internal equity
considerations.
The
weighting given to these factors varied by position, but the Committee intended
that each executive officer’s base salary and annual bonus rates be generally
competitive with the estimated current market rates, and that the annual bonuses
for 2005 properly reflect the efforts and achievements of the Company’s
management team.
For
2005,
the Committee awarded Messrs. Buchanan and Wobensmith cash bonuses of $150,000
and $375,000, respectively. In addition, Mr. Wobensmith was paid a $50,000
bonus
upon the completion of the initial public offering. The bonus amounts awarded
to
these executive officers are set forth in “Summary Compensation Table”
above.
Equity
Grants
As
part
of its officer compensation programs, the Company intends to utilize restricted
share grants and, potentially, stock options priced at 100% of market on the
date of grant as the primary long-term incentive award vehicles. On October
31,
2005, the Company made a grant of 29,850 and 32,262 restricted shares of common
stock to Robert Gerald Buchanan and John C. Wobensmith, respectively, the
restrictions on all such shares to lapse with respect to 25%
of
the shares on each of the first four anniversaries of July 22, 2005. The
restrictions applicable to the shares granted to these two executives 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 of Control (as defined in the
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.
On
December 21, 2005, the Company made a grant of 10,000 and 15,000 restricted
shares of common stock to Robert Gerald Buchanan and John C. Wobensmith,
respectively, the restrictions on all such shares to lapse with respect to
25%
of
the shares on each of the first four anniversaries of November 15, 2005. The
restrictions applicable to the shares granted to these two executives 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 of Control (as defined in the
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 except for grants on or after December 21, 2005, as
to which the Board of Directors may waive the repayment
requirement.
13
The
Committee believes that equity grants can be effective for both new hires and
retention purposes in establishing substantial stock-based investment risks
for
key employees that emphasize the importance of shareholder return and encourage
a focus on long-term results.
Principal
Executive Officer Compensation
The
Committee’s actions regarding Mr. Buchanan’s equity compensation for 2005 as the
Principal Executive Officer are reflected in the “Summary Compensation Table”
set forth above. The Committee’s review of Mr. Buchanan’s compensation occurred
at the same time as the above-discussed review of the compensation of Mr.
Wobensmith, and took into account the factors and data discussed
above.
After
assessing Mr. Buchanan’s performance for 2005, and after taking into account his
existing compensation, his value and importance to the Company, and the benefit
to the Company of providing Mr. Buchanan with long-term incentives, the
Committee determined to award Mr. Buchanan a cash bonus of $150,000 and a grant
of 10,000 restricted shares of common stock. For more information about the
restricted shares granted to Mr. Buchanan, see “Equity Grants”
above.
Conclusion
The
Compensation Committee believes that the Company’s current compensation programs
and practices strike an appropriate balance between risk and reward and are
consistent with the Company’s goals to attract, retain, and incentivize its
executives and employees in both the short and long term.
Submitted
by the Compensation Committee of the Board:
Peter
C.
Georgiopoulos
Basil
G.
Mavroleon
Nathaniel
C.A. Kramer
Performance
Graph
The
following graph illustrates a comparison of the cumulative total shareholder
return (change in stock price plus reinvested dividends) of Genco Shipping
&
Trading Limited’s common stock with the Standard and Poor’s 500 Index and a peer
group consisting of Dryships, Inc., Diana Shipping Inc., Quintana Maritime
Ltd.,
Excel Maritime Carriers Ltd., Navios Maritime Holdings, Inc. and Eagle Bulk
Shipping Inc. The comparison assumes a $100 investment on July 22, 2005. The
comparisons in the graph are required by the Securities and Exchange Commission
and are not intended to forecast or be indicative of possible future performance
of the Company’s common stock. Data for the Standard and Poor’s 500 Index and
the peer group assume reinvestment of dividends.
14
|
|
7/22/2005
|
12/31/2005
|
|
GSTL
|
100
|
85.90
|
|
S&P
500
|
100
|
102.06
|
|
Peer
Group
|
100
|
97.46
|
Our
dividend policy is to declare quarterly distributions to shareholders by each
February, May, August and November, which commenced in November 2005,
substantially equal to our available cash from operations during the previous
quarter, less cash expenses for that quarter (principally vessel operating
expenses and debt service) and any reserves our board of directors determines
we
should maintain. These reserves may cover, among other things, drydocking,
repairs, claims, liabilities and other obligations, interest expense and debt
amortization, acquisitions of additional assets and working capital.
On
October 31, 2005 and on February 9, 2006, the Board of Directors declared a
dividend of $0.60 per share for each respective quarter.
REPORT
OF THE AUDIT COMMITTEE
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 Nasdaq. The Committee operates pursuant to a Charter,
a
copy of which is attached to this Proxy Statement as Appendix I. 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
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 accountants 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, 2005. 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
accountants. 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."
15
Based
upon
the Committee's receipt and review of the various materials and assurances
described above and its discussions with management and independent accountants,
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, 2005, to be filed with the
Securities and Exchange Commission.
Submitted
by the Audit Committee of the Board of Directors:
Harry
A.
Perrin
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 18, 2006 of:
|
·
|
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 18, 2006, a total of 25,434,212 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 (2)
|
13,501,200
(3
|
)
|
53.10
|
%
|
|||
|
Robert
Gerald Buchanan
|
45,200
(4
|
)
|
*
|
||||
|
John
C. Wobensmith
|
53,462
(5
|
)
|
*
|
||||
|
Rear
Admiral Robert C. North, USCG (ret.)
|
1,200
(6
|
)
|
*
|
||||
|
Basil
G. Mavroleon
|
1,200
(6
|
)
|
*
|
||||
|
Nathaniel
C.A. Kramer
|
1,200
(6
|
)
|
*
|
||||
|
Mark
F. Polzin
|
2,400
(6
|
)
|
*
|
||||
|
Harry
A. Perrin
|
1,200
(6
|
)
|
*
|
||||
|
Stephen
A. Kaplan (2)
|
13,500,000
(7
|
)
|
53.10
|
%
|
|||
|
B.
James Ford (2)
|
13,500,000
(7
|
)
|
53.10
|
%
|
|||
|
John
P. Tavlarios (2)
|
13,500,000
|
53.10
|
%
|
||||
|
Fleet
Acquisition LLC (2)
|
13,500,000
|
53.10
|
%
|
||||
|
Neuberger
Berman, LLC (8)
|
1,542,650
|
6.07
|
%
|
||||
|
All
Directors and executive officers as a group (9
persons) (2)
|
13,607,062(7
|
)
|
53.50
|
%
|
|||
16
|
*
|
|
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, New York
10171.
|
|
(2)
|
|
Fleet
Acquisition LLC’s and Mr. Tavlarios’ address is 299 Park Avenue, New York,
New York 10171. OCM Principal Opportunities Fund III, L.P. and OCM
Principal Opportunities Fund IIIA, L.P., or the Oaktree funds, of
which
Mr. Kaplan serves as portfolio manager, own approximately 65.7% of
Fleet
Acquisition LLC, and Peter C. Georgiopoulos owns approximately 26.6%.
The
remaining 6.84% is owned by other investors. Fleet Acquisition LLC
may be
deemed to be affiliated with OCM Investments, LLC, a registered
broker-dealer, by reason of the relationship of the Oaktree funds
with OCM
Investments, LLC. Each of Messrs. Georgiopoulos, Kaplan, Ford, and
Tavlarios is a member of the Management Committee of Fleet Acquisition
LLC. To the extent Messrs. Georgiopoulos, Kaplan, Ford, and Tavlarios
participate in the process to vote or dispose of shares held by 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. Georgiopoulos, Kaplan,
Ford, and Tavlarios disclaim beneficial ownership of these shares
except
to the extent of their pecuniary interest
therein.
|
|
(3)
|
|
Includes
1,200 restricted shares of our common stock granted on October 31,
2005, which will vest on May 18, 2006, the date of the Company’s 2006
Annual Meeting of Shareholders, or the first anniversary of the Company’s
initial public offering, whichever occurs first. This grant is subject
to
accelerated vesting under certain circumstances set forth in the
relevant
grant agreement.
|
|
(4)
|
|
Includes
29,850 restricted shares of our common stock granted on October 31,
2005,
which will vest in four equal installments on the first four anniversaries
of the date of the Company’s initial public offering; and 10,000
restricted shares of our common stock granted on December 21, 2005,
which
will vest in four equal installments commencing on November 15, 2006
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 will vest in four equal installments on the first four anniversaries
of the date of the Company’s initial public offering; and 15,000
restricted shares of our common stock granted on December 21, 2005,
which
will vest in four equal installments commencing on November 15, 2006
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)
|
|
Represents
1,200 restricted shares of our common stock granted on October 31,
2005,
which will vest on May 18, 2006, (the date of the Company’s 2006 Annual
Meeting of Shareholders),
or the first anniversary of the Company’s initial public offering,
whichever occurs first. These grants are subject to accelerated vesting
under certain circumstances set forth in the relevant grant
agreement.
|
|
(7)
|
|
Each
of Mr. Kaplan’s, Mr. Ford’s and Oaktree Capital Management, LLC’s, address
is 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071. Oaktree
Capital Management, LLC, a registered investment adviser under the
Investment Advisers Act of 1940, is the general partner of OCM
Principal Opportunities III Fund, L.P. and OCM Principal Opportunities
Fund IIIA, L.P. Mr.
Kaplan, a director of Genco, is a Principal of Oaktree Capital Management,
LLC. As the general partner of OCM
Principal Opportunities III Fund, L.P. and OCM Principal Opportunities
Fund IIIA, L.P.,
Oaktree Capital Management, LLC has voting and dispositive power
over
their pro-rata ownership in the Fleet Acquisition LLC. Although Oaktree
Capital Management, LLC may be deemed to beneficially own those shares
for
purposes of Section 13 of the Securities Exchange Act of 1934, Oaktree
Capital Management, LLC disclaims beneficial ownership of those shares
except to the extent of its pecuniary interest in them. In addition,
to
the extent Mr. Kaplan participates in the process to vote or dispose
of
its ownership in Fleet Acquisition LLC reported herein, he may be
deemed
under certain circumstances for purposes of Section 13 of the Securities
Exchange Act of 1934 to be the beneficial owner of those shares.
Mr.
Kaplan, however, disclaims beneficial ownership of those shares except
to
the extent of his pecuniary interest in
them.
|
17
|
(8)
|
|
Neuberger
Berman, LLC’s address is 605 Third Ave., New York, NY, 10158-3698.
Neuberger Berman, LLC is deemed to be a beneficial owner since it
has
shared power to make decisions whether to retain or dispose of, and
in
some cases the sole power to vote, the securities of many unrelated
clients. Neuberger Berman, LLC does not, however, have any economic
interest in the securities of those clients. The clients are the
actual
owners of the securities and have the sole right to receive and the
power
to direct the receipt of dividends from or proceeds from the sale
of such
securities. With
regard to these shares, Neuberger Berman, LLC and Neuberger Berman
Management Inc. are deemed to be beneficial owners since they both
have
shared power to make decisions whether to retain or dispose and vote
the
securities. Neuberger Berman, LLC and Neuberger Berman Inc. serve
as a
sub-adviser and investment manager, respectively, of Neuberger Berman's
various Mutual Funds which hold such shares in the ordinary course
of
their business and not with the purpose nor with the effect of changing
or
influencing the control of the issuer.
|
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.
Fleet
Acquisition LLC owns 13,500,000 shares entitled to these registration
rights.
Transactions
with Investors, our Chairman and His Affiliates
We
reimbursed General Maritime Corporation, of which Peter C. Georgiopoulos, our
Chairman, is Chairman and Chief Executive Officer, for services provided by
certain General Maritime employees in connection with the initial public
offering. In the year ended December 31, 2005, we incurred travel related
expenditures totaling $113,363 reimbursable to General Maritime Corporation.
These travel expenditures were paid from the gross proceeds received from the
initial public offering and as such were included in the determination of net
proceeds. In addition, prior to the initial public offering, the Company also
purchased $25,000 of computers and incurred $17,212 of expense for consultative
services provided by General Maritime Corporation. At December 31, 2005, there
are no outstanding amounts owed to General Maritime Corporation.
In
addition, we rented 10,000 sq. feet of office space at 35 West 56th
Street
in New York from GenMar Realty LLC, which is owned by Peter C. Georgiopoulos.
This month to month lease was terminated effective December 31, 2005. For the
year ended 2005, the Company incurred rent expense of $440,000 with GenMar
Realty LLC.
In
addition, we employ the legal services of Constantine P. Georgiopoulos, Peter
C.
Georgiopoulos' father. We incurred fees with Constantine Georgiopoulos of
$175,715 for legal services performed for us for the year ended December 31,
2005. At December 31, 2005, $26,500 remained unpaid.
18
Finally,
Leeds & Leeds Company, Inc., an investor with a limited stake in Fleet
Acquisition LLC, currently provides insurance brokerage services for our
vessels. The Company incurred $2,424,346 of insurance expense to them for the
year ended December 31, 2005 and for the period September 27, 2004 (Date of
Inception) through December 31, 2004, respectively. There were no amounts due
to
Leeds & Leeds Company, Inc at December 31, 2005.
PROPOSAL
NO. 2
RATIFICATION
OF APPOINTMENT OF INDEPENDENT AUDITORS
The
Board
of Directors has selected the firm of Deloitte & Touche LLP as Genco's
independent auditors to audit the financial statements of Genco for the fiscal
year ending December 31, 2006 and recommends that shareholders vote for
ratification of this appointment. Genco engaged Deloitte & Touche LLP as its
independent auditors on October 15, 2005 in anticipation of its initial public
offering. Representatives of Deloitte & Touche LLP are expected to be
present at the Annual Meeting, will have the opportunity to make a statement
if
they desire to do so and are expected to be available to respond to appropriate
questions. The affirmative vote of the holders of a majority of the shares
present in person or represented by proxy and voting at the Annual Meeting
will
be required to ratify the selection of Deloitte & Touche LLP.
If
the
shareholders fail to ratify the selection, the audit committee and the Board
of
Directors will reconsider its selection of auditors. Even if the selection
is
ratified, the Board of Directors in its discretion may direct the appointment
of
different independent auditors at any time during the year if it determines
that
such change would be in the best interests of Genco and its
shareholders.
Fees
to Independent Auditors for Fiscal 2005 and 2004
The
following table presents fees for professional services rendered by Deloitte
& Touche LLP for the audit of the Company’s annual financial statements for
fiscal 2005 and fiscal 2004 and fees billed for audit-related services, tax
services and all other services rendered by Deloitte & Touche LLP for fiscal
2005 and fiscal 2004.
| Type of Fees |
2005
|
2004
|
|
($
in thousands)
|
($
in thousands)
|
|
| Audit Fees |
$862
|
$55
|
| Audit-Related Fees |
$0
|
$0
|
| Tax Fees |
$0
|
$0
|
| All Other Fees |
$0
|
$0
|
| Total |
$862
|
$55
|
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.
Pre-Approval
Policy for Services Performed by Independent Accountant
The
Audit
Committee has responsibility for the appointment, compensation and oversight
of
the work of the independent accountant. As part of this responsibility, the
Audit Committee must pre-approve all permissible services to be performed by
the
independent accountant.
19
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 accountant 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, 2006.
PROPOSAL
NO. 3
APPROVAL
OF AN AMENDMENT TO THE CORPORATION’S
AMENDED
AND RESTATED CERTIFICATE OF INCORPORATION
LIMITING
THE LIABILITY OF THE COMPANY’S DIRECTORS
The
shareholders are being requested to consider and vote upon a proposal pertaining
to the protection of directors of the Company against certain liabilities to
which they may become subject by reason of their service as directors of the
Company. The proposal involves an amendment to the Company’s Amended and
Restated Articles of Incorporation which pertains to indemnification of
directors, officers, employees and agents as more fully described
below.
The
Company is incorporated under the laws of the Republic of the Marshall Islands.
The Marshall Islands Business Corporations Act (the “BCA”) and the Company’s
By-Laws permit a corporation to indemnify its directors and officers against
expenses, judgments, settlement payments and other costs incurred in connection
with litigation or similar proceedings, subject to certain limitations. However,
Section 28 of the BCA also permits a corporation to add a provision to its
articles of incorporation to eliminate or limit the personal liability of its
directors to the corporation or its shareholders for monetary damages for breach
of fiduciary duty as a director. Such a provision cannot eliminate or limit
a
director’s liability for breach of the director’s duty of loyalty to the
corporation or its shareholders, acts or omissions not undertaken in good faith
or which involve intentional misconduct or a knowing violation of law, or any
transaction from which the director derived an improper personal benefit. Also,
such a provision cannot eliminate or limit the liability of a director for
any
act or omission occurring prior to the date when such provision becomes
effective.
The
proposed amendment to the Company’s Amended and Restated Certificate of
Incorporation would add a new Section M that would eliminate the liability
of
the Company’s directors for any breach of duty to the greatest extent permitted
under Section 28 of the BCA as described above. The proposed amendment further
provides that in the event the BCA is amended to allow further elimination
or
limitation of the liability of the directors for their actions or omissions,
the
liability of the directors shall be limited to the fullest extent permitted
in
respect of actions or omissions occurring in the period covered by the BCA
as so
amended. In addition, the amendment provides that if Section M is ever repealed
or modified, the personal liability of directors would be affected prospectively
only, and any limitation on the personal liability of directors existing at
the
time of such repeal or modification would not be adversely affected. The full
text of the proposed amendment is set forth in Appendix II hereto.
The
principal purpose and intent of this amendment is to give the Company’s
directors reasonable assurances that their personal liability exposure is
limited. The Board of Directors believe that the amendment is significant in
order for the Company to attract and retain qualified candidates to serve on
the
Board of Directors and that the amendment is therefore in the best interests
of
the Company and its shareholders. Accordingly, the Board of Directors has
approved the proposed amendment unanimously.
20
It
should
be noted that the members of the Board of Directors have an interest in the
approval of the proposed amendment and such amendment could relieve such members
of a significant potential liability if an applicable claim should arise. The
Board of Directors, however, is not aware of any claim or any basis for a claim
which, if asserted, would be impacted by such amendment.
THE
BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
AMENDMENT OF THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
(ITEM 3 ON THE ENCLOSED PROXY CARD).
PROPOSAL
NO. 4
APPROVAL
OF AN AMENDMENT TO THE CORPORATION’S
AMENDED
AND RESTATED CERTIFICATE OF INCORPORATION
PERMITTING
THE BOARD OF DIRECTORS TO DESIGNATE THE CLASS OF A
DIRECTOR
WHO
IS APPOINTED TO A VACANCY CREATED BY
THE
BOARD OF DIRECTOR’S INCREASE OF THE NUMBER OF DIRECTORS
The
shareholders are being requested to consider and vote upon a proposal pertaining
to the designation of the class to which a director will belong who is appointed
to fill a vacancy in the Board of Directors created by the Board of Directors
increasing the total number of directors. The proposal involves an amendment
to
an existing provision of the Company’s Amended and Restated Articles of
Incorporation relating to the appointment of directors as further described
below.
Under
Section H(a) of the Company’s Amended and Restated Certificate of Incorporation,
the Board of Directors has the authority to appoint new directors to fill any
vacancy in the Board of Directors. Any director appointed to fill a vacancy
in
an existing directorship holds office for the unexpired term of his predecessor.
However, to the extent the size of the Board of Directors increases or
decreases, Section H(a) requires that the increase or decrease be so apportioned
among the classes to make all classes as nearly equal in number as possible.
Section H(a) further provides that if such vacancy resulted from the Board
of
Directors’ increase of the number of directors and the Board of Directors fills
such vacancy, the shareholders shall classify any additional directors at the
next annual meeting of shareholders or by unanimous written consent at any
time
after such increase. Because the Board of Directors voted to increase the number
of directors to seven and appointed Harry A. Perrin to fill the newly-created
vacancy on August 15, 2005, Mr. Perrin’s election as a Class I Director is
currently being submitted to the Company’s shareholders for approval.
The
proposed amendment to the Company’s Amended and Restated Certificate of
Incorporation would revise Section H(a) such that the Board of Directors, by
vote of a majority of the members then in office (although less than a quorum),
would be entitled to classify any director appointed to a vacancy created by
the
Board’s increase of the number of directors. The Board of Directors believes
that, in instances where the Board exercises its power to increase the size
of
the Board, it is more efficient for the Board to classify the person appointed
to the vacancy. Classifying a new director appointee upon appointment would
afford greater certainty in the term for which he would serve, would avoid
the
need for a separate classification by the shareholders in less than a year
after
his appointment, and would therefore lead to greater stability in the operation
of the Board of Directors. The Board of Directors also believes that vesting
such classification power in the Board is consistent with the power of the
Board
to increase the number of directors and would facilitate the prompt satisfaction
of Section H(a)’s existing requirement that any increase or decrease be
apportioned among the classes to make all classes as nearly equal in number
as
possible. Accordingly, the Board of Directors believes that the proposed
amendment to Section H(a) is in the best interests of the Company and its
shareholders and has approved the proposed amendment unanimously. The full
text
of the proposed amendment is set forth in Appendix III hereto.
It
should
be noted that the members of the Board of Directors have an interest in the
approval of the proposed amendment and such amendment would enable the Board
to
appoint new directors to a class serving for a longer term than shareholders
may
desire. Newly-appointed directors whose class is determined by the Board under
the proposed amendment would stand for election at the same time that other
members of their class would stand, which would not necessarily be the next
annual meeting. The time required for shareholders to change a majority
of
21
directors
serving on the Board may therefore be longer under the proposed amendment than
it would be currently under the Company’s Amended and Restated Certificate of
Incorporation. However, the Board has no present intentions to increase the
current number of directors.
The
proposed amendment may enhance the anti-takeover effects that certain existing
provisions of the Company’s Amended and Restated Certificate and its By-Laws may
have. The Company’s Amended and Restated Certificate of Incorporate of
Incorporation and its By-Laws currently contain provisions permitting the Board
to issue up to 25,000,000 shares of blank check preferred stock without any
further vote or action by shareholders; establishing a classified board as
discussed above; prohibiting cumulative voting in the election of directors;
permitting removal of directors only for cause and only upon the affirmative
vote of 66⅔% of the outstanding shares of capital stock entitled to vote for
those directors or by a majority of the members of the Board then in office;
requiring actions to taken by shareholders to be effected at an annual or
special meeting or by unanimous written consent; providing that, subject to
certain exceptions, our Chairman, President, or Secretary at the board of
directors may call special meetings of shareholders, as to which the business
transacted is limited to the purposes stated in the notice; and requiring timely
advance notice in a prescribed form from shareholders seeking to nominate
director candidates. As the proposed amendment may extend the time required
for
shareholders to change a majority of the Company’s directors, the proposed
amendment, together with the foregoing provisions, may further discourage,
delay
or prevent (1) the merger or acquisition of the Company by means of a tender
offer, a proxy contest, or otherwise that a shareholder may consider in its
best
interest and (2) the removal of incumbent directors and officers. However,
proposed amendment is not part of a plan by the Company’s management to adopt
further such measures that may have an anti-takeover effect, nor does the
Company’s management presently intend to propose such measures in future proxy
solicitations.
THE
BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
AMENDMENT OF THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
(ITEM 4 ON THE ENCLOSED PROXY CARD).
SHAREHOLDER
PROPOSALS
Shareholder
proposals to be presented at the 2007 Annual Meeting of Shareholders must be
received by Genco at its offices in New York, New York, addressed to the
Secretary, not later than [_______], 2006,
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 19, 2006 and not later than December 19, 2006 if the proposal is
submitted 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 2006 Annual Meeting
of
Shareholders, if Genco is not provided notice of a shareholder proposal prior
to
on or
after November 19, 2006 but not later than December 19, 2006, 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,
2005 its executive officers, directors, and 10% holders complied with the
Section 16(a) requirements except that the following persons filed late reports
on Form 3: Peter C. Georgiopoulos, Robert Gerald Buchanan, John C. Wobensmith,
Stephen A. Kaplan, B. James Ford, John P. Tavlarios, and Fleet Acquisition
LLC;
and the following persons filed late reports on Form 4: Robert Gerald Buchanan
and John C. Wobensmith. The reports on Form 3 that Messrs. Buchanan and
Wobensmith originally filed have been amended to reflect that they owned no
securities of the Company at the time the Company’s registration statement on
Form 8-A became effective, and each of them has filed a report on Form 4 to
reflect the purchase of shares in a directed share program that had previously
been reflected in their original reports on Form 3.
22
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 27, 2006 (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 2005, 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, management 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
_________________________________________
John
C.
Wobensmith
Chief
Financial
Officer, Principal
Accounting
Officer,
Secretary and Treasurer
Dated:
April
___, 2006
23
Appendix
I
Genco
Shipping & Trading Limited
Audit
Committee Charter
This
Audit Committee Charter (“Charter”) has been adopted by the Board of Directors
(the “Board”) of Genco Shipping & Trading Limited (the “Company”). The Audit
Committee of the Board (the “Committee”) shall review and reassess the adequacy
of this charter annually and recommend any proposed changes to the Board for
approval.
Purpose
The
Committee assists the Board in its oversight of (1) the quality and integrity
of
the Company’s financial statements and its accounting and financial reporting
practices, (2) the Company’s compliance with legal and regulatory requirements,
(3) the independent auditor’s qualifications and independence and (4) the
performance of the Company’s independent auditors. It may also have such other
duties as may from time to time be assigned to it by the Board and are required
by the rules and regulations of the Securities and Exchange Commission and
The
NASDAQ Stock Market, Inc. (“NASDAQ”).
The
Committee shall maintain free and open communication (including periodic private
executive sessions) with the independent auditors and Company management. In
discharging its oversight role, the Committee shall have full access to all
Company books, records, facilities, personnel and outside professionals. The
Committee shall have the authority and shall receive necessary funding from
the
Company to retain special legal, accounting or other consultants or advisors
employed by the Committee and shall obtain such advice and assistance from
such
special legal, accounting or other consultants or advisors as the Committee
deems necessary. The Committee shall have sole authority to approve related
fees
and retention terms. Each member of the Committee shall be entitled to rely
on
(i) the integrity of those persons and organizations within and outside the
Company from which it receives information, (ii) the accuracy of the financial
and other information provided by such persons or organizations absent actual
knowledge to the contrary (which shall be promptly reported to the Board),
and
(iii) representations made by management and the independent auditors as to
all
audit and nonaudit services provided by the independent auditors to the
Company.
Membership
and Structure
The
Committee shall be comprised of at least three directors determined by the
Board
to meet the director and audit committee member independence requirements,
subject to any applicable exemptions and phase-in provisions, and the financial
literacy requirements of NASDAQ. At least one member of the Committee shall
be
financially sophisticated, as determined by the Board, and no Committee member
shall have participated in the preparation of the financial statements of the
Company or any of the Company's current subsidiaries at any time during the
past
three years, each as required by NASDAQ listing standards. Appointment to the
Committee, including the designation of the Chair of the Committee and the
designation of any Committee members as "audit committee financial experts",
shall be made on an annual basis by the full Board. The Chair shall be
responsible for leadership of the Committee, including scheduling and presiding
over meetings, preparing agendas, making regular reports to the Board, and
maintaining regular liaison with the Chief Executive Officer, Chief Financial
Officer and the lead independent audit partner. In fulfilling its
responsibilities the Committee shall have authority to delegate its authority
to
subcommittees, in each case to the extent permitted by applicable
law.
Meetings
of the Committee shall be held at such times and places as the Committee shall
determine, including by written consent. The Committee shall also periodically
meet with the Company’s management and independent auditors separately from the
Board.
Responsibilities
The
Committee’s role is one of oversight. The Company’s management is responsible
for the preparation, presentation and integrity of the Company’s financial
statements. Management is responsible for maintaining appropriate accounting
and
financial reporting principles and practices and internal 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 to be included in the
Company’s
24
Annual
Report on Form 10-K and reviewing the Company’s quarterly financial statements
prior to the filing of any quarterly report on Form 10-Q , and other
procedures.
The
Committee and the Board recognize that management and the independent auditors
have more resources and time and more detailed knowledge and information
regarding the Company’s accounting and financial reporting practices than do
Committee members; accordingly the Committee’s oversight role does not provide
any expert or special assurance as to the Company’s financial statements or any
certification as to the work of the independent auditors. Nor is it the duty
of
the Committee to conduct investigations, to resolve disagreements, if any,
between management and the independent auditors, or to assure compliance with
laws and regulations.
Although
the Board and the Committee may wish to consider other duties from time to
time,
the general recurring activities of the Committee in carrying out its oversight
role are described below. The Committee shall be responsible for:
| • |
The
appointment, replacement, compensation, evaluation and oversight
of the
work of the independent auditors to be retained to audit the annual
financial statements of the Company and review the quarterly financial
statements of the Company.
|
| • |
Annually
obtaining and reviewing the independent auditor’s formal written statement
describing: the firm’s internal quality-control procedures; any material
issues raised by the most recent internal quality-control review,
or peer
review, of the firm, or by any inquiry or investigation by governmental
or
professional authorities, within the preceding five years respecting
one
or more independent audits carried out by the firm, and any steps
taken to
deal with any such issues.
|
| • |
Annually
obtaining from the independent auditors a formal written statement
describing all relationships between the auditors and the Company
and
their independence as required by Independence Standards Board -
ISB1. The
Committee shall actively engage in a dialogue with the independent
auditors with respect to any disclosed relationships that may impact
the
objectivity and independence of the auditors, and shall consider
whether
the independent auditors’ provision of non-audit services to the Company,
if any, is compatible with the auditors’
independence.
|
| • |
Reading
the annual audited financial statements and quarterly financial statements
and discussing them with management and the independent auditors.
These
discussions shall include consideration of the quality of the Company’s
accounting principles as applied in its financial reporting and the
Company’s disclosures under “Management’s Discussion and Analysis of
Financial Condition and Results of Operations.” Such discussions will
include particularly sensitive accounting estimates, reserves and
accruals, judgmental areas, audit adjustments and risk exposures
that may
have a material impact on the Company’s financial statements and the steps
management has taken to monitor and control such exposures, and other
such
inquiries as the Committee, management or the independent auditors
shall
deem appropriate. Based on this process, the Committee shall make
its
recommendation to the Board as to the inclusion of the Company’s audited
financial statements in the Company’s Annual Report on Form 10-K (or the
Annual Report to Shareholders, if distributed prior to the filing
of the
Form 10-K). In connection with such reviews the Committee should
ensure
that the Independent Auditors have fulfilled their responsibilities
under
AICPA SAS 61 “Communication with Audit
Committees.”
|
| • |
Preparing
annually a report to be included in the Company’s proxy statement as
required by the rules of the Securities and Exchange Commission,
and
submitting such report to the Board for
approval.
|
| • |
Overseeing
the relationship with the independent auditors, including discussing
with
the auditors the planning and staffing of the audit and the nature
and
rigor of the audit process, receiving and reading audit reports,
discussing with the auditors any problems or difficulties the auditors
may
have encountered in carrying out their responsibilities and any management
letters provided by the auditors and the Company’s response to such
letters, and providing the auditors full access to the Committee
and the
Board to report on all appropriate
matters.
|
25
| • |
Providing
oversight of the Company’s accounting and financial reporting principles,
policies, controls, procedures and practices, and reviewing significant
changes to the foregoing as suggested by the independent auditors
or
management.
|
| • |
Establishing
procedures for the receipt, retention and treatment of complaints
from the
Company’s employees on accounting, internal controls or auditing matters,
as well as for confidential, anonymous submissions by the Company’s
employees of concerns regarding questionable accounting or reporting
matters.
|
| • |
Establishing
clear hiring policies for employees or former employees of the external
auditors.
|
| • |
Annually
obtaining from the independent auditors a formal written statement
of the
fees billed for audit and non-audit services rendered by the independent
auditors for the most recent fiscal
year.
|
| • |
At
the Committee’s discretion, discussing with management and independent
auditors earnings press releases, as well as financial information
and
earnings guidance provided to analysts and rating
agencies.
|
| • |
Discussing
with management policies with respect to risk assessment and risk
management.
|
| • |
Discussing
with management and/or the Company’s general counsel any legal matters
(including the status of pending litigation) that may have a material
impact on the Company’s financial statements or which might require
disclosure therein, and any material reports or inquiries from regulatory
or governmental agencies.
|
| • |
Regularly
reporting its activities to the full Board and making such recommendations
with respect to the above and any other matters as the Committee
may deem
necessary or appropriate.
|
| • |
Engaging
in an annual self-assessment with the goal of continuing
improvement.
|
26
Appendix
II
Amendment
to Amended and Restated Articles of Incorporation
M.
A
director of the Company shall not be personally liable to the Company or its
shareholders for monetary damages for any breach of fiduciary duty in such
capacity except that the liability of a director shall not be eliminated or
limited (i) for any breach of such director’s duty of loyalty to the Company or
its shareholders; (ii) for acts or omissions not undertaken in good faith or
which involve intentional misconduct or a knowing violation of law; or (iii)
for
any transaction from which such director derived an improper personal benefit.
If the BCA hereafter is amended to authorize the further elimination or
limitation of the liability of directors for actions taken or omitted to be
taken then the liability of a director of the Company, in addition to the
limitation on personal liability provided herein, shall be limited to the
fullest extent permitted by the amended BCA in respect of actions or omissions
to act which occurred during any period to which the BCA’s amended provisions
pertain. Any repeal or modification of this Section M by the shareholders of
the
Company shall be prospective only, and shall not adversely affect any limitation
on the personal liability of the director existing at the time of such repeal
or
modification.
27
Appendix
III
Amendment
to Amended and Restated Articles of Incorporation
H.
(a) The Board of
Directors shall be divided into three (3) classes of directors, which shall
be
as nearly equal in number as the then total number of directors constituting
the
entire Board of Directors will permit, and which are hereby designated as Class
I, Class II and Class III, respectively. The members of the first Board of
Directors shall be elected and classified by the incorporator or by its
proxy. The term of office of each initial Class I director shall expire at
the first annual meeting of shareholders, that of each initial Class II director
shall expire at the second annual meeting of shareholders and that of each
initial Class III director shall expire at the third annual meeting of
shareholders. At each annual meeting of shareholders, directors to succeed
those whose term expire at such annual meeting shall be elected to hold office
for a term expiring at the third succeeding annual meeting of shareholders
and
until their respective successors are elected and have qualified or until their
respective death, resignation, removal or earlier termination of office.
Any vacancies in the Board of Directors for any reason shall be filled by the
vote of a majority of the members of the Board of Directors then in office,
although less than a quorum, and any directors so chosen shall hold office
for
the unexpired term of his predecessor. Any directorship resulting from an
increase in the number of directors shall be filled by the vote of a majority
of
the members of the Board of Directors then in office, although less than a
quorum. Any increase or any decrease in the number of directors
constituting the entire Board of Directors shall be so apportioned among the
classes as to make all classes as nearly equal in number as possible.
Should the number of directors be increased by the Board of Directors and such
directorship are filled by the Board of Directors, the Board of Directors shall
have the power to classify the additional directors by vote of a majority of
the
members of the Board of Directors then in office, although less than a
quorum. No decrease in the number of directors shall shorten the term of
any incumbent director. Directors shall be elected by a plurality of the votes
cast at a meeting of shareholders by the holders of shares entitled to vote
in
the election. Cumulative voting, as defined in Division 7, Section 71(2)
of the BCA, shall not be used to elect directors.
28
r
Please
Mark Here for Address Change or Comments
SEE
REVERSE SIDE
THIS
PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED
"FOR" THE PROPOSALS.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
THE
BOARD
OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
1.
ELECTION OF DIRECTORS
r
FOR
r
WITHHELD
FOR
ALL
NOMINEES:
01
REAR
ADMIRAL ROBERT C. NORTH, USCG (RET.)
02
BASIL G.
MAVROLEON
03
HARRY A.
PERRIN
Withheld
for the nominees you list below: (Write that nominee's name in the space
provided below.)
____________________________________
2.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
r
FOR r
AGAINST r
ABSTAIN
3.
APPROVAL OF AN AMENDMENT TO THE CORPORATION’S AMENDED AND RESTATED CERTIFICATE
OF INCORPORATION LIMITING THE LIABILITY OF THE COMPANY’S DIRECTORS
r
FOR r
AGAINST r
ABSTAIN
4.
APPROVAL
OF AN AMENDMENT TO THE CORPORATION’S AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION PERMITTING THE BOARD OF DIRECTORS TO DESIGNATE THE CLASS OF A
DIRECTOR WHO IS APPOINTED TO A VACANCY CREATED BY THE BOARD OF DIRECTOR’S
INCREASE OF THE NUMBER OF DIRECTORS
r
FOR r
AGAINST r
ABSTAIN
If
you
plan to attend the Annual Meeting, please mark the WILL ATTEND box:
r
WILL
ATTEND
Signature
_______________________
Signature
_______________________
Date
_______________________
NOTE:
Please sign as name appears hereon. Joint owners should each sign. When signing
as attorney, executor, administrator, trustee or guardian, please give full
title as such.
_____________________________________________________________________________________________________________________________
FOLD
AND
DETACH HERE
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
GENCO
SHIPPING & TRADING LIMITED
The
undersigned hereby appoints Robert Gerald Buchanan and John C. Wobensmith,
and
each of them, with power to act without the other and with power of
substitution, as proxies and attorneys-in-fact and hereby authorizes them
to
represent and vote, as provided on the other side, all the shares of Genco
Shipping & Trading Limited Common Stock which the undersigned is entitled to
vote, and, in their discretion, to vote upon such other business as may properly
come before the Annual Meeting of Shareholders of Genco Shipping & Trading
Limited to be held on May 18, 2006 or any adjournment thereof, with all powers
which the undersigned would possess if present at the Meeting.
(Continued,
and to be marked, dated and signed, on the other side)
|
Address
Change/Comments (Mark the corresponding box on the reverse
side)
|
|
|
__________________________________________________________________________________________________________________________
FOLD AND DETACH HERE
FOLD AND DETACH HERE