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Washington, D.C. 20549
(Rule 14a-101)
Exchange Act of 1934
Filed by a Party other than the Registranto
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12
þ | No fee required. | |
o | 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: |
o | Fee paid previously with preliminary materials: |
(1) | Amount previously paid: | ||
(2) | Form, Schedule or Registration Statement No.: | ||
(3) | Filing party: | ||
(4) | Date filed: |
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• | Young, diverse fleet of 31 vessels (approximately 4.0 million dwt) with an average age of 8.0 years and a presence in both crude and product segments. | |
• | Management team which has experience with consolidations. | |
• | Balance between time charter and spot exposure providing earnings and cash flow stability while creating the potential to benefit from stronger tanker rates. | |
• | Contracted revenue stream with approximately $450 million of revenues contracted through 2013. | |
• | Partial dividend payout strategy providing improved financial flexibility to invest in growth. | |
• | An estimated $7.5 million of cash cost savings expected to be realized in the first full year of operations following the proposed transaction from combining operations and the executive transition. | |
• | Initial cash dividend target of $2.00 per share annually. | |
• | Stronger platform for long-term dividend and fleet growth. |
Sincerely yours, | Sincerely yours, | |
Peter C. Georgiopoulos Chairman and Chief Executive Officer General Maritime Corporation | Edward Terino Chief Executive Officer, President and Chief Financial Officer Arlington Tankers Ltd. |
and is first being mailed to Arlington shareholders and to General Maritime shareholders on or about November 5, 2008.
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Treasurer & Secretary
October 31, 2008
for the Stockholder Meeting to Be Held on December 16, 2008:
available athttp://materials.proxyvote.com/Y2692M.
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Title: Secretary
October 31, 2008
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General Maritime Corporation | Arlington Tankers Ltd. | |
Attention: Jeffrey D. Pribor | c/o Arlington Tankers, LLC | |
Executive Vice President and CFO | 191 Post Road West | |
299 Park Avenue | Westport, Connecticut 06880 | |
New York, New York 10171 | Attention: Edward Terino | |
(212)763-5600 | (203) 221-2765 |
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Q: | Why am I receiving this document? | |
A: | We are delivering this document to you because it is a joint proxy statement being used by both the General Maritime board of directors and the Arlington board of directors to solicit proxies of General Maritime shareholders and Arlington shareholders in connection with the merger agreement and the proposed transaction. In addition, this document is a prospectus being delivered to General Maritime shareholders and Arlington shareholders because New General Maritime is offering shares of its common stock to be issued in exchange for shares of General Maritime common stock and Arlington common shares if the proposed transaction is completed. | |
Q: | What is the proposed transaction for which I am being asked to vote? | |
A: | You are being asked to consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger and Amalgamation, dated as of August 5, 2008, by and among Arlington Tankers Ltd., Galileo Holding Corporation, Archer Amalgamation Limited, Galileo Merger Corporation and General Maritime Corporation, and thereby approve the proposed transaction. Arlington shareholders are also being asked to approve the Amalgamation Agreement, dated as of August 5, 2008, by and among Arlington Tankers Ltd., Galileo Holding Corporation and Archer Amalgamation Limited and thereby approve the amalgamation of Archer Amalgamation Limited with Arlington Tankers Ltd. In this joint proxy statement/prospectus, we refer to General Maritime Corporation as General Maritime, to Arlington Tankers Ltd. as Arlington, to Galileo Holding Corporation as either New General Maritime, the combined company or the holding company, to Archer Amalgamation Limited as amalgamation sub, to Galileo Merger Corporation as merger sub, to the Amalgamation Agreement as the Arlington amalgamation agreement, and to the Agreement and Plan of Merger and Amalgamation as the merger agreement. | |
The proposed transaction will result in the combination of Arlington and General Maritime. To accomplish this combination, General Maritime and Arlington have formed the holding company. Prior to the effective time of such combination, the holding company’s equity will be owned 73% by General Maritime and 27% by Arlington. The holding company has two subsidiaries, merger sub and amalgamation sub. At the time the combination is completed, General Maritime and Arlington will each become a wholly owned subsidiary of the holding company. As a result, General Maritime and Arlington will no longer be publicly traded companies. Following the combination, the holding company will change its name to “General Maritime Corporation” and will become a publicly traded company, and General Maritime will be renamed. In this joint proxy statement/prospectus, we refer to the various steps and actions to accomplish the combination of Arlington and General Maritime as the proposed transaction. In addition, we refer to the merger of Galileo Merger Corporation with and into General Maritime, with General Maritime continuing as the surviving corporation, as the General Maritime merger, and we refer to the amalgamation of Archer Amalgamation Limited with Arlington as the Arlington amalgamation. | ||
Q: | Why are General Maritime and Arlington proposing the transaction? | |
A: | We believe the combination of these two leading tanker companies will create a leading publicly traded tanker company focused on an annual dividend targeted at $2.00 per share and positioned to capitalize |
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on growth opportunities. Upon consummation of the proposed transaction, the combined company will have a young, diverse fleet of 31 vessels and a management team which has experience with consolidations. We also expect to benefit from improved financial flexibility to invest in growth; a partial dividend payout structure, which results in the combined company’s annual dividend target of $2.00 per share and is expected to allow us to retain capital for growth; and anticipated synergies and cost savings for the combined company. We expect to realize an estimated $7.5 million of cash cost savings in the first full calendar year of operations following the proposed transaction from combining operations and the executive transition described below on page 74 under the caption “The Proposed Transaction — Interests of General Maritime’s Directors and Executive Officers in the Proposed Transaction.” We believe that these factors, together with the combined company’s balanced chartering strategy that provides a contracted revenue stream as well as the potential to benefit from increases in products and crude tanker rates, form the basis for success in the future. | ||
Q: | Why is this transaction of particular strategic importance to Arlington? | |
A: | Since its initial public offering in November 2004, Arlington has paid quarterly cash dividends on its common shares that have been substantially the same as the amount of cash Arlington generated from operations in each quarter. As a consequence of this 100% dividend payout structure, Arlington has not built cash reserves for potential business expansion or for refinancing or repayment of its credit facility in January 2011. The refinancing of the credit facility under current market conditions would likely result in an amortizing loan under which the principal repayments would reduce estimated cash available for dividends by more than 40% commencing no later than 2011. Arlington’s cash available for quarterly dividends in years after 2011 would likely remain materially below the range of quarterly dividends paid since its initial public offering. As Arlington’s share price has been primarily influenced by the dividend yield it has provided, Arlington believes that the drop in dividend payment expected with the cash reduction associated with an amortizing loan would cause a substantial decline in the trading price of the Arlington shares. | |
While the annual cash dividend target of $2.00 per share for the combined company is below the level of annual dividend per share paid by Arlington in 2007 and the expected dividend per share for 2008, it approximately equals Arlington’s expected stand-alone dividend per share for 2009, and exceeds Arlington’s expected stand-alone dividend for 2010 and onward in the near future. The payment of the targeted annual $2.00 dividend per share by the combined company reflects a partial dividend payout structure, thereby enabling the combined company to have financial and operational flexibility not available under a 100% dividend payout structure. This is a benefit that Arlington shareholders do not currently have. | ||
Q: | What will I receive in the proposed transaction? | |
A: | General Maritime shareholders will receive 1.34 shares of New General Maritime common stock for each share of General Maritime common stock they own. Arlington shareholders will receive one share of New General Maritime common stock for each Arlington common share they own. New General Maritime will not issue any fractional shares of New General Maritime common stock in the proposed transaction. If you would otherwise be entitled to receive a fractional share of New General Maritime common stock in the proposed transaction, you will instead receive the value of that fractional share in cash (without interest) in lieu of that fractional share. | |
Q: | What percentage of New General Maritime common stock will General Maritime shareholders and Arlington shareholders own after the proposed transaction is completed? | |
A: | If we consummate the proposed transaction, then based on the number of shares of General Maritime common stock and the number of Arlington common shares outstanding on October 30, 2008, New General Maritime would issue approximately 42.0 million shares of New General Maritime common stock to General Maritime shareholders in the proposed transaction, which would represent approximately 73.0% of the shares of New General Maritime common stock outstanding immediately after consummation of the proposed transaction, and New General Maritime would issue approximately |
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15.5 million shares of New General Maritime common stock to Arlington shareholders in the proposed transaction, which would represent approximately 27.0% of the shares of New General Maritime common stock outstanding immediately after consummation of the proposed transaction. Of the approximately 42.0 million shares of New General Maritime common stock that would be issued to General Maritime shareholders, approximately 6,203,570 shares, or approximately 10.79% of the shares of New General Maritime common stock outstanding immediately after consummation of the proposed transaction, would be held by persons who served as named executive officers and/or directors of General Maritime immediately prior to consummation of the proposed transaction, and of the approximately 15.5 million shares of New General Maritime common stock that would be issued to Arlington shareholders, approximately 7,985 shares, or less than 1% of the shares of New General Maritime common stock outstanding immediately after consummation of the proposed transaction, would be held by persons who served as an executive officer and/or directors of Arlington immediately prior to consummation of the proposed transaction. | ||
Q: | Who is entitled to vote at my company’s special meeting? | |
A: | Holders of record of General Maritime common stock as of the close of business on October 27, 2008 will be entitled to notice of and to vote at the General Maritime special meeting. Holders of record of Arlington common shares as of the close of business on October 27, 2008 will be entitled to notice of and to vote at the Arlington special general meeting. | |
Q: | What shareholder approvals are needed? | |
A: | The transactions contemplated by the merger agreement will not be consummated unless the merger agreement is approved and adopted and therefore the proposed transaction is approved by holders of a majority of the outstanding shares of General Maritime common stock and by a majority of the votes cast at the Arlington special general meeting and entitled to vote thereon. In addition, the Arlington amalgamation agreement must be approved and adopted by a majority of the votes cast at the Arlington special general meeting and entitled to vote thereon. Each holder of General Maritime common stock is entitled to one vote per share at the General Maritime special meeting, and each holder of Arlington common shares is entitled to one vote per share at the Arlington special general meeting. | |
Based on the number of shares of General Maritime common stock and the number of Arlington common shares outstanding on October 27, 2008, in order for the proposed transaction to be consummated, holders of approximately 15,661,880 shares of General Maritime common stock would be required to vote to adopt the merger agreement and approve the General Maritime merger at the General Maritime special meeting, and the approval of a majority of the votes cast at the Arlington special general meeting and entitled to vote thereon would be required to vote to approve and adopt the merger agreement and the Arlington amalgamation agreement and thereby approve the proposed transaction. | ||
Adoption of any proposal to postpone or adjourn the General Maritime special meeting to a later date for the purpose of soliciting additional proxies with respect to the proposed transaction requires the approval of holders of a majority of the shares of General Maritime common stock present, in person or by proxy, at the General Maritime special meeting and entitled to vote thereon. Adoption of any proposal to postpone or adjourn the Arlington special general meeting to a later date for the purpose of soliciting additional proxies with respect to the proposed transaction requires the approval of a majority of the votes cast at a quorate Arlington special general meeting. | ||
Q: | When and where will my company’s special meeting be held? | |
A: | The General Maritime special meeting is scheduled to be held on December 16, 2008 at 10:00 a.m. (Eastern time) at the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, New York. The Arlington special general meeting is scheduled to be held on December 16, 2008 at 10:00 a.m. (Eastern time) at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 399 Park Avenue, New York, NY 10022. |
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Q: | Does my company’s board of directors recommend the adoption of the merger agreement? | |
A: | Yes. The boards of directors of both General Maritime and Arlington have unanimously recommended that shareholders approve the merger agreement and thereby approve the proposed transaction. | |
At a special meeting of the General Maritime board held on August 5, 2008, by a unanimous vote, the General Maritime board: declared the merger agreement, the General Maritime merger and the other transactions contemplated by the merger agreement to be advisable and fair to and in the best interests of General Maritime and its shareholders; approved the merger agreement and the transactions contemplated thereby, including, without limitation, the General Maritime merger; and resolved to recommend that the shareholders of General Maritime adopt the merger agreement and approve the General Maritime merger and take any other actions requested in connection with the merger agreement. In view of the variety of factors and the amount of information considered, as well as the complexity of that information, the General Maritime board does not find it practicable to, and did not, quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its decision. In the course of reaching its decision to recommend that General Maritime shareholders adopt the merger agreement and approve the General Maritime merger, the General Maritime board consulted with members of General Maritime’s management, as well as General Maritime’s legal counsel and General Maritime’s financial advisor, and considered a number of factors, which are described in detail in the section captioned “The Proposed Transaction — Recommendation of the General Maritime Board; General Maritime’s Reasons for the Proposed Transaction” beginning on page 60. | ||
The Arlington board has determined that the terms of the Arlington amalgamation and the other transactions contemplated by the merger agreement are advisable, fair to, and in the best interests of Arlington and the holders of Arlington common shares, and therefore has unanimously recommended that Arlington shareholders vote “FOR” the proposal to approve the merger agreement and the proposal to approve the Arlington amalgamation agreement. In reaching its decision, the Arlington board has considered a number of factors. Because of the wide variety of factors considered, the Arlington board does not believe it practicable, nor does it attempt, to quantify or otherwise assign relative weight to the specific factors it considered in reaching its decision. The factors considered by the Arlington board are described in the section captioned “The Proposed Transaction — Recommendation of the Arlington Board; Arlington’s Reasons for the Proposed Transaction” beginning on page 75. | ||
Q: | What do I need to do now? | |
A: | After you have carefully read and considered this joint proxy statement/prospectus in its entirety, please vote your shares as promptly as possible by proxy by: | |
• accessing the Internet website specified on your enclosed proxy card; | ||
• calling the telephone number specified on your proxy card; or | ||
• completing, signing and dating your proxy card and returning it in the postage-paid envelope provided, so that your shares may be represented and voted at your company’s special meeting. | ||
If your shares are held in the name of a bank, broker or other fiduciary, please follow the instructions furnished by the record holder. In order to assure that your vote is obtained and your shares are represented at your company’s special meeting, please vote your shares by proxy as instructed on your proxy card even if you currently plan to attend your company’s special meeting in person. | ||
If you vote your proxy over the Internet or by telephone, you must do so before 11:59 p.m. (Eastern time) on December 15, 2008, the day before the General Maritime special meeting, or before 11:59 p.m. (Eastern time) on December 15, 2008, the day before the Arlington special meeting, as applicable. If you hold shares in the name of a bank or broker, please follow the voting instructions provided by your bank or broker to ensure that your shares are represented at your company’s special meeting. Please note that most banks and brokers permit their beneficial owners to vote by telephone or by Internet. If you hold shares in street name, see the question below regarding what you should do if your shares are held for you in “street name.” |
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Q: | What do I need to do now if I have received restricted stock under the General Maritime Amended and Restated 2001 Stock Incentive Plan, effective March 30, 2006, as amended and restated? | |
A: | If you have received restricted stock under the General Maritime Amended and Restated 2001 Stock Incentive Plan, you do not need to do anything. If you hold any of this restricted stock, your shares of restricted stock will be converted into shares of New General Maritime common stock at the same time and in the same manner as other shares of General Maritime common stock. Each restricted share you hold will be converted into 1.34 restricted shares of New General Maritime common stock. All other terms of your restricted stock, including the vesting schedule, will remain the same. | |
Q: | What do I need to do now if I have received stock options under the General Maritime Amended and Restated 2001 Stock Incentive Plan, effective March 30, 2006, as amended and restated? | |
A: | If you have received stock options under the General Maritime Amended and Restated 2001 Stock Incentive Plan, you do not need to do anything. If you hold any of these stock options, your options will be become options to purchase shares of New General Maritime common stock with the following adjustments: The number of General Maritime common shares currently subject to your options will be multiplied by 1.34 (the same ratio that applies to outstanding shares of General Maritime common stock), rounded down to the nearest whole share, and the exercise price per share of your option will be divided by 1.34, rounded up to the nearest whole cent. For example, if you have an option to purchase 1,500 shares of General Maritime common stock for an exercise price of $14.58 per share, that option would be converted into an option to purchase 2,010 shares (1,500 x 1.34) of New General Maritime common stock with an exercise price of $10.89 per share ($14.58¸ 1.34, rounded up to the nearest whole cent). All the other terms of your stock options, including the vesting schedule, will remain the same. | |
Q: | What if I fail to vote? | |
A: | The affirmative vote of holders of a majority of all of the outstanding shares of General Maritime’s common stock, rather than a majority of only those shares that are represented at General Maritime’s special meeting, is required to adopt the merger agreement and approve the proposed transaction. Therefore, if a General Maritime shareholder does not vote their shares, or does not instruct their broker, bank or other nominee how to vote shares held for them in “street name,” the effect will be the same as a vote “against” the proposed transaction. If they respond and do not indicate how they want to vote, their proxy will be counted as a vote “for” the proposed transaction. If they respond but abstain from voting, their proxy will have the same effect as a vote “against” the proposed transaction. | |
The affirmative vote of a majority of the votes cast at the Arlington special general meeting and entitled to vote thereon is required to approve and adopt the merger agreement and the Arlington amalgamation agreement and thereby approve the proposed transaction. If they respond and do not indicate how they want to vote, their proxy will be counted as a vote “for” the proposed transaction. Shares represented by proxies that are marked “abstain” or “withhold” on any matter will be counted as shares present for purposes of determining the presence of a quorum. Common shares that are represented by broker non-votes will also be counted as shares present for purposes of determining the presence of a quorum. Abstentions, broker non-votes and votes withheld will not be counted as votes cast at the Arlington special general meeting. | ||
Q: | If my shares are held for me in “street name,” will my broker, bank or other nominee vote my shares for me? | |
A: | No. If you do not provide your broker, bank or other nominee with instructions on how to vote the shares held for you in “street name,” your broker, bank or other nominee will not vote those shares. If you do not give voting instructions to your broker, bank or other nominee, you will not be counted as voting, unless you appear in person at your company’s special meeting with a legal, valid proxy from the record holder of those shares.Therefore, if your shares are held in “street name” by your broker, bank or other nominee, you should make certain that you instruct your broker, bank or |
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other nominee how to vote your shares.In the case of General Maritime shareholders, if you do not give voting instructions to your broker, bank or other nominee, the effect will be the same as a vote “against” the proposed transaction. In the case of Arlington shareholders, if you do not give voting instructions to your broker, bank or other nominee, your vote will not be counted as a vote cast. In addition, please check the voting form used by your broker, bank or other nominee to see if that form offers voting by telephone or through the Internet. | ||
Q: | Can I change my vote after I have delivered my proxy? | |
A: | Yes. You can change your vote at any time before your proxy is voted at your company’s special meeting. You can do this in one of the following four ways: |
• | First, you may timely deliver a valid, later-dated proxy. | |
• | Second, you may provide a written notice to your company’s corporate secretary before your company’s special meeting indicating that you have revoked your proxy. The contact information for the corporate secretary of General Maritime and the contact information for the corporate secretary of Arlington are as follows: |
• | General Maritime:c/o John C. Georgiopoulos, Secretary, General Maritime Corporation, 299 Park Avenue, 2nd Floor, New York, New York 10171 | |
• | Arlington: Renee Hill, Company Secretary, Arlington Tankers Ltd., c/o Appleby, Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda, or by facsimile to(441) 298-3482 |
• | Third, you may cast a new proxy vote over the Internet or by telephone. | |
• | Fourth, you may vote in person at your company’s special meeting. |
If you vote your proxy over the Internet or by telephone, you must do so before 11:59 p.m. (Eastern time) on December 15, 2008, the day before the General Maritime special meeting, if you are a General Maritime shareholder, or before 11:59 p.m. (Eastern time) on December 15, 2008, the day before the Arlington special meeting, if you are an Arlington shareholder. | ||
If you have instructed your broker, bank or other nominee how to vote your shares, you must follow the directors you receive from your broker, bank or other nominee to change those instructions. | ||
Q: | Should I send in my stock certificates now? | |
A: | No. Please do not send in any stock certificates with your proxy. | |
If the proposed transaction is consummated, we will send General Maritime shareholders and Arlington shareholders written instructions on how to exchange their stock certificates for the shares of New General Maritime common stock they are entitled to receive in the proposed transaction (as well as any cash they are entitled to receive in lieu of fractional shares). | ||
Q: | Where will my shares of New General Maritime common stock be listed? | |
A: | We intend to apply to list the shares of New General Maritime common stock to be issued in the proposed transaction on the New York Stock Exchange, or the NYSE, under the trading symbol “GMR.” | |
Q: | When do you expect the proposed transaction to be completed? | |
A: | We are working to complete the proposed transaction as quickly as possible, and we currently expect to complete the proposed transaction during the fourth quarter of 2008. However, it is possible that factors outside of our control could require us to complete the proposed transaction at a later time, and it is also possible that the proposed transaction may not be consummated at all. | |
Q: | Can I dissent and require appraisal of my shares? | |
A: | Yes. If you are a General Maritime shareholder, under Marshall Islands law, if the General Maritime merger is consummated, then holders of General Maritime common stock that have properly elected to |
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dissent pursuant to Sections 100 and 101 of the MIBCA, will be entitled to payment of the fair value of their shares in accordance with Marshall Islands law. To exercise your right to dissent, you must strictly follow the procedures prescribed by the MIBCA. See the section captioned “Appraisal Rights of Dissenting Shareholders — General Maritime” beginning on page 162. | ||
If you are an Arlington shareholder, under Bermuda law, if the Arlington amalgamation is approved, then holders of Arlington common shares that did not vote in favor of the Arlington amalgamation and who are not satisfied that they have been offered fair value for their shares may apply to the Supreme Court of Bermuda to request that the Supreme Court appraise the fair value of their shares pursuant to section 106(6) of the Companies Act. To exercise such a right, you must strictly follow the procedures prescribed by the Companies Act. See the section captioned “Appraisal Rights of Dissenting Shareholders — Arlington” beginning on page 162. | ||
Q: | Are there risks I should consider in deciding whether or not to vote in favor of the proposed transaction? | |
A: | Yes. We have set forth a non-exhaustive list of risk factors that you should consider carefully in connection with the proposed transaction. See the section captioned “Risk Factors” beginning on page 20. | |
Q: | What are the material United States federal income tax consequences to me of the proposed transaction? | |
A: | It is a condition to the obligation of each of General Maritime and Arlington to close the proposed transaction that they receive opinions that the General Maritime merger and the Arlington amalgamation will each qualify as a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended, which we refer to as the Code. Assuming the General Maritime merger and Arlington amalgamation qualify as reorganizations, then for U.S. federal income tax purposes: | |
• if you are a General Maritime shareholder, you will not recognize gain or loss on the exchange of your General Maritime common stock for New General Maritime common stock pursuant to the General Maritime merger (except for gain or loss with respect to cash received in lieu of fractional shares); | ||
• if you are an Arlington shareholder, you will not recognize gain or loss on the exchange of your Arlington common shares for New General Maritime common stock pursuant to the Arlington amalgamation (except for gain or loss with respect to cash received in lieu of fractional shares). | ||
It is possible that one or both of the exchanges will be a taxable event for shareholders subject to tax in a jurisdiction other than the United States. | ||
The United States federal income tax consequences of the proposed transaction are discussed in greater detail below in the section captioned “The Proposed Transaction — Material United States Federal Income Tax Consequences to Shareholders — Consequences of the Proposed Transaction” beginning on page 96. | ||
Tax matters are very complicated and the tax consequences to you of the proposed transaction will depend on your particular circumstances. You are urged to consult your own tax advisor to fully understand the tax consequences of the proposed transaction. |
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Q: | Whom can I contact if I have any questions? | |
A: | If you have any questions about your company’s special meeting, the merger agreement or the proposed transaction, or if you need additional copies of this joint proxy statement/prospectus or the enclosed proxy card, you should contact: | |
• if you are a General Maritime shareholder: | ||
D.F. King & Co., Inc. 48 Wall Street, 22nd Floor New York, New York 10005 Telephone: (800) 659-5550 E-mail: proxy@dfking.com | ||
• if you are an Arlington shareholder: | ||
MacKenzie Partners, Inc. 105 Madison Avenue New York, New York 10016 Telephone:(800) 322-2885 (toll free); (212) 929-5500 (collect) E-mail: proxy@mackenziepartners.com |
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299 Park Avenue
New York, New York 10171
(212)763-5600
First Floor, The Hayward Building
22 Bermudiana Road
Hamilton HM 11, Bermuda
(441) 292-4456
c/o General Maritime Corporation
299 Park Avenue
New York, New York 10171
(212) 763-5600
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c/o General Maritime Corporation
299 Park Avenue
New York, New York 10171
(212) 763-5600
c/o General Maritime Corporation
299 Park Avenue
New York, New York 10171
(212) 763-5600
• | merger sub will be merged with and into General Maritime, which we refer to in this joint proxy statement/prospectus as the General Maritime merger, with General Maritime continuing as the surviving corporation; | |
• | amalgamation sub will amalgamate with Arlington, which we refer to in this joint proxy statement/prospectus as the Arlington amalgamation; | |
• | each share of General Maritime common stock will be automatically converted into the right to receive 1.34 shares, which we refer to as the General Maritime exchange ratio, of New General Maritime common stock, other than shares of General Maritime common stock held by a holder who has delivered a written objection to the proposed corporate action and a demand for payment of such shares in accordance with Sections 100 and 101 of the Marshall Islands Business Corporations Act, or MIBCA, and has not voted in favor of the adoption of the merger agreement, until such time as such holder fails to perfect or effectively withdraws or otherwise loses such holder’s right to payment under Sections 100 and 101 of the MIBCA; and | |
• | each Arlington common share will be automatically converted into the right to receive one share, which we refer to as the Arlington exchange ratio, of New General Maritime common stock, other than Arlington common shares held by a holder who has not voted in favor of the Arlington amalgamation or consented thereto in writing and who otherwise properly perfected such holder’s right to appraisal for such shares in accordance with the Companies Act, until such time as such holder withdraws an appraisal application to the applicable Bermuda court. |
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• | New General Maritime’s amended and restated articles of incorporation and its amended and restated by-laws will be substantially in the forms attached as Exhibit A and Exhibit B to Appendix A of this joint proxy statement/prospectus; | |
• | General Maritime’s current directors and one current Arlington director will be the directors of New General Maritime immediately after the effective time of the proposed transaction, and Peter C. Georgiopoulos will continue to serve as Chairman of the Board, as described in the section captioned “The Proposed Transaction — Continuing Board and Management Positions” beginning on page 91; | |
• | General Maritime’s current officers will be the officers of New General Maritime immediately after the effective time of the proposed transaction, except that John Tavlarios will be President of New General Maritime and Peter C. Georgiopoulos, General Maritime’s Chairman, President and Chief Executive Officer, will step down as President and Chief Executive Officer of General Maritime upon consummation of the proposed transaction and will not serve in those capacities for New General Maritime, in each case as described in the sections captioned “The Proposed Transaction — Continuing Board and Management Positions” beginning on page 91; | |
• | General Maritime’s current headquarters will be New General Maritime’s headquarters; and | |
• | shares of New General Maritime common stock are expected to be listed and traded on the NYSE under the trading symbol “GMR,” the trading symbol under which shares of General Maritime common stock currently trade on the NYSE. |
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(1) | Estimated based on the total number of shares of General Maritime common stock and Arlington common shares outstanding as of October 30, 2008. |
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• | the combined company’s potential for revenue growth, including the balance between time charter and spot exposure to provide earnings and cash flow stability while creating the potential to benefit from stronger tanker rates; | |
• | General Maritime’s and Arlington’s complementary businesses and the potential for synergies and cost savings, including an estimated $7.5 million of cash cost savings expected to be realized in the first full year of operations following the proposed transaction from combining operations and the executive transition; and | |
• | the combined company will have a modern, diverse fleet of 31 double-hulled vessels (approximately 4.0 million dwt) with an average age of 8.0 years, with a presence in both the crude oil and the petroleum product segments. |
• | Arlington’s shareholders will have the opportunity to participate in the potential increased future value of a larger company with an attractive business profile; | |
• | the larger scale of the combined company will provide greater opportunities to retain cash to invest in growth, while at the same servicing the debt associated with the combined company’s more moderate leverage; |
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• | the combined company will have an attractive dividend profile for Arlington shareholders; | |
• | the Arlington board anticipated that, on a stand-alone basis, Arlington’s cash available for dividends would decline in 2009 from the cash available in 2008 and for each year thereafter and therefore the dividend level would likely remain materially below the range of dividends paid in all prior years; and | |
• | due to the expected refinancing with amortizing debt of Arlington’s credit facility at or prior to January 2011, a decline in dividends of more than 40% is expected to occur in 2011. |
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• | the shareholders of General Maritime and of Arlington shall each have approved the merger agreement; | |
• | the waiting period under theHart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the HSR Act, shall have expired or been terminated. The Federal Trade Commission, or FTC, and the Antitrust Division of the Department of Justice have granted early termination of the waiting period under the HSR Act. See the section captioned “Regulatory Matters” on page 111; | |
• | all authorizations or consents of any governmental entity in connection with the consummation of the proposed transaction shall have been obtained; | |
• | the registration statement of which this joint proxy statement/prospectus forms a part shall have become effective under the Securities Act and no stop order suspending the effectiveness of the registration statement shall have been issued and no proceeding for that purpose shall have been issued or threatened in writing by the Securities and Exchange Commission, or the SEC, or its staff; |
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• | no governmental entity shall have enacted or issued any order, executive order, stay, decree, temporary restraining order, judgment or injunction which has the effect of making either the General Maritime merger or the Arlington amalgamation illegal or otherwise prohibiting consummation of the transactions contemplated by the merger agreement; | |
• | the shares of New General Maritime common stock to be issued in the proposed transaction shall have been approved for listing on the NYSE; | |
• | there shall not be pending before any governmental entity any actions, suits, claims or proceedings relating to the proposed transaction, or otherwise against the parties to the merger agreement or any of their respective subsidiaries, which have a reasonable likelihood of a judgment against such parties or any of their respective subsidiaries and with respect to which judgments adverse to such parties or any of their respective subsidiaries, have had or are reasonably likely to have in the aggregate a material adverse effect on either General Maritime or Arlington; | |
• | the representations and warranties of each party set forth in the merger agreement shall be true and correct as of the date of the merger agreement and as of the closing date of the proposed transaction as though made on and as of the closing date, except: to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date; for changes contemplated by the merger agreement; and where the failure to be true and correct has not had, and is not reasonably likely to have, individually or in the aggregate, a material adverse effect on the other party; | |
• | each party shall have performed in all material respects all obligations required to be performed by it under the merger agreement on or prior to the closing date; and | |
• | receipt of the opinion of its counsel to the effect that each of the General Maritime merger and the Arlington amalgamation will be treated for United States federal income tax purposes as reorganizations within the meaning of Section 368(a) of the Code. |
• | General Maritime shall have obtained the consent of the agent and the lenders under its existing credit facility to the proposed transaction and to continue the credit facility after the effective time of the proposed transaction; and | |
• | the appraisal rights in connection with the General Maritime merger and the Arlington amalgamation shall not have been properly perfected (i) pursuant to the Companies Act by holders of more than 30% of the outstanding Arlington common shares or (ii) pursuant to the MIBCA of more than 10% of the outstanding shares of General Maritime common stock. |
• | the proposed transaction has not been consummated on or before March 31, 2009; | |
• | any restraint which has the effect of making the proposed transaction illegal or otherwise prohibiting consummation of the proposed transaction or any adverse proceeding results in a judgment that will have become nonappealable and final; | |
• | the shareholders of either General Maritime or Arlington do not approve the merger agreement and therefore the proposed transaction at their company’s special meeting; | |
• | the other party has breached its representations, warranties, covenants or agreements in the merger agreement, which breach would cause the closing conditions relating to representations and warranties |
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or covenants and agreements, as applicable, not to be satisfied, and which breaches have not been cured within 30 days after notice from the party seeking to terminate, or if all of the closing conditions have been satisfied and the other party breaches its obligation to consummate the proposed transaction; |
• | the other party has breached its non-solicitation obligations or its obligation to call its shareholder meeting; or | |
• | the other party’s board: |
• | withdraws or modifies, in a manner materially adverse to the other party, its approval or recommendation of the merger agreement and the proposed transaction; or | |
• | fails to give its recommendation to the approval of the merger agreement and the proposed transaction in this joint proxy statement/prospectus or has withdrawn or modified in a manner materially adverse to the other party its recommendation of the merger agreement and the proposed transaction. |
• | the Arlington board: |
• | has approved or recommended, or has proposed publicly to approve or recommend, to Arlington shareholders an acquisition proposal; or | |
• | has recommended that Arlington shareholders tender their shares in a tender offer or exchange offer for outstanding Arlington common shares commenced by a party other than by General Maritime or an affiliate of General Maritime, or fails to recommend against acceptance of such offer; |
• | after receipt by Arlington of an acquisition proposal that is public information, General Maritime has requested in writing that the Arlington board reconfirm its recommendation of the merger agreement and the transactions contemplated thereby and the Arlington board has failed to do so within five business days after its receipt of General Maritime’s request; | |
• | the General Maritime board, to the extent required by the fiduciary obligations of the General Maritime board, determines in good faith after consultation with outside counsel to enter into a General Maritime acquisition agreement; or | |
• | appraisal rights in connection with the General Maritime merger and the Arlington amalgamation have been properly perfected pursuant to the Companies Act by holders of more than 30% of the outstanding Arlington common shares, or pursuant to the MIBCA by holders of more than 10% of the outstanding shares of General Maritime common stock. |
• | after receipt by General Maritime of a change of control proposal that is public information, Arlington has requested in writing that the General Maritime board reconfirm its recommendation of the merger agreement and the transactions contemplated thereby and the General Maritime board has failed to do so within five business days after its receipt of Arlington’s request; or | |
• | the General Maritime board has approved or recommended, or has proposed publicly to approve or recommend, to General Maritime shareholders a change of control proposal but General Maritime has not terminated the merger agreement. |
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General Maritime | Arlington | |||||||
Common Stock | Common Shares | |||||||
(NYSE) | (NYSE) | |||||||
30 consecutive trading day average ending August 5, 2008 | $ | 25.41 | $ | 21.72 | ||||
60 consecutive trading day average ending August 5, 2008 | $ | 26.69 | $ | 22.61 | ||||
90 consecutive trading day average ending August 5, 2008 | $ | 26.21 | $ | 22.70 |
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Six Months Ended June 30, | Year Ended December 31, | |||||||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||||||
Selected statement of operations data: | ||||||||||||||||||||||||||||
Voyage revenues | $ | 154,523 | $ | 130,963 | $ | 255,015 | $ | 325,984 | $ | 567,901 | $ | 701,291 | $ | 454,456 | ||||||||||||||
Total operating expenses | 107,637 | 90,517 | 183,290 | 171,462 | 273,958 | 340,429 | 334,895 | |||||||||||||||||||||
Operating income | 46,886 | 40,446 | 71,725 | 154,522 | 293,943 | 360,862 | 119,561 | |||||||||||||||||||||
Net income | $ | 17,870 | $ | 28,445 | $ | 44,539 | $ | 156,831 | $ | 212,357 | $ | 315,109 | $ | 84,518 | ||||||||||||||
Earnings per common share: | ||||||||||||||||||||||||||||
Basic | $ | 0.62 | $ | 0.92 | $ | 1.46 | $ | 4.98 | $ | 5.71 | $ | 8.51 | $ | 2.29 | ||||||||||||||
Diluted | 0.60 | $ | 0.90 | $ | 1.43 | $ | 4.87 | $ | 5.61 | $ | 8.33 | $ | 2.26 | |||||||||||||||
Dividends declared per common share | $ | 1.00 | $ | 16.12 | (1) | $ | 17.12 | (1) | $ | 4.80 | $ | 2.86 | $ | — | $ | — | ||||||||||||
Weighted average basic shares outstanding, thousands: | ||||||||||||||||||||||||||||
Basic | 28,957 | 30,799 | 30,403 | 31,472 | 37,164 | 37,049 | 36,967 | |||||||||||||||||||||
Diluted | 29,774 | 31,620 | 31,213 | 32,217 | 37,874 | 37,814 | 37,356 | |||||||||||||||||||||
Selected balance sheet data (at end of period): | ||||||||||||||||||||||||||||
Cash | $ | 42,709 | $ | 44,526 | $ | 107,460 | $ | 96,976 | $ | 46,921 | $ | 38,905 | ||||||||||||||||
Current assets, including cash | 80,397 | 82,494 | 137,865 | 471,324 | 152,145 | 102,473 | ||||||||||||||||||||||
Total assets | 865,428 | 835,035 | 843,690 | 1,149,126 | 1,427,261 | 1,263,578 | ||||||||||||||||||||||
Current liabilities, including current portion of long-term debt | 40,806 | 35,502 | 27,147 | 32,906 | 84,120 | 89,771 | ||||||||||||||||||||||
Long term debt | 611,000 | 565,000 | 50,000 | 135,020 | 446,597 | 596,117 | ||||||||||||||||||||||
Shareholders’ equity | 209,677 | 228,657 | 763,913 | 976,125 | 890,426 | 568,880 | ||||||||||||||||||||||
Selected cash flow data: | ||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 52,478 | $ | 61,121 | $ | 95,833 | $ | 189,717 | $ | 249,614 | $ | 363,238 | $ | 178,112 | ||||||||||||||
Net cash (used) provided by investing activities | (52,779 | ) | (42,248 | ) | (84,516 | ) | 285,264 | 318,169 | (168,477 | ) | (502,919 | ) | ||||||||||||||||
Net cash (used) provided by financing activities | (2,105 | ) | (89,381 | ) | (74,251 | ) | (464,497 | ) | (517,728 | ) | (186,745 | ) | 361,031 | |||||||||||||||
Selected fleet data (end of period): | ||||||||||||||||||||||||||||
Total number of vessels at end of period | 21 | 19 | 20 | 18 | 30 | 43 | 43 |
(1) | Includes a special dividend of $15.00 per share, declared in February 2007. |
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Six Months Ended June 30, | Year Ended December 31, | |||||||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||||||
Selected statement of operations data: | ||||||||||||||||||||||||||||
Total operating revenues, net | $ | 34,996 | $ | 35,117 | $ | 70,198 | $ | 69,435 | $ | 55,455 | $ | 57,958 | $ | 28,838 | ||||||||||||||
Total operating expenses | 19,497 | 18,702 | 38,086 | 37,329 | 28,904 | 30,672 | 14,405 | |||||||||||||||||||||
Operating income | 15,499 | 16,416 | 32,112 | 32,106 | 26,551 | 27,286 | 14,433 | |||||||||||||||||||||
Net income | $ | 9,037 | $ | 12,384 | $ | 11,706 | $ | 21,464 | $ | 21,913 | $ | 20,351 | $ | 5,913 | ||||||||||||||
Earnings per common share — basic and diluted | $ | 0.58 | $ | 0.80 | $ | 0.76 | $ | 1.38 | $ | 1.41 | $ | 0.28 | (1) | — | ||||||||||||||
Cash dividend per share declared during the year(2) | $ | 1.12 | $ | 1.15 | $ | 2.32 | $ | 2.29 | $ | 1.97 | — | — | ||||||||||||||||
Selected balance sheet data (at end of period): | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 12,375 | $ | 6,274 | $ | 3,210 | $ | 11,839 | $ | 5,960 | $ | 1,194 | ||||||||||||||||
Newbuildings | — | — | — | — | — | 36,185 | ||||||||||||||||||||||
Vessels, net | 321,720 | 329,330 | 344,973 | 269,031 | 281,441 | 154,465 | ||||||||||||||||||||||
Total assets | 335,735 | 349,309 | 363,409 | 286,447 | 292,850 | 192,416 | ||||||||||||||||||||||
Amount due to Concordia, current | — | — | — | — | — | 45,899 | ||||||||||||||||||||||
Long term debt | 236,783 | 229,500 | 229,500 | 135,000 | 135,000 | 130,317 | ||||||||||||||||||||||
Combined predecessor equity | — | — | — | — | — | 15,710 | ||||||||||||||||||||||
Shareholders’ equity | 97,889 | 106,212 | 130,620 | 144,651 | 154,487 | — | ||||||||||||||||||||||
Selected cash flow data: | ||||||||||||||||||||||||||||
Net cash provided by operating activities | 10,961 | 17,809 | 38,679 | 34,866 | 35,314 | 31,820 | 15,375 | |||||||||||||||||||||
Net cash provided by (used in) investing activities | 12,500 | 600 | 500 | (102,500 | ) | (2,500 | ) | (102,212 | ) | (36,488 | ) | |||||||||||||||||
Net cash (used in) provided by financing activities | (17,360 | ) | (17,825 | ) | (36,115 | ) | 59,005 | (26,935 | ) | 75,158 | 21,717 | |||||||||||||||||
Selected fleet data (end of period): | ||||||||||||||||||||||||||||
Number of tankers owned | 8 | 8 | 8 | 8 | 6 | 6 | 2 |
(1) | The earnings per share and dividend per share earned during the year 2004 represent the period from November 10, 2004 through December 31, 2004. | |
(2) | Arlington has paid quarterly cash dividends denominated in U.S. dollars to the holders of its common shares since its initial public offering in November 2004 in amounts substantially equal to the charterhire received by it under its time charters, less cash expenses and any cash reserves established by its board of directors. |
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Six Months Ended | Year Ended | |||||||
June 30, | December 31, | |||||||
2008 | 2007 | |||||||
(Dollars in thousands, | ||||||||
except per share data) | ||||||||
Selected combined statement of operations data: | ||||||||
Voyage revenues | $ | 189,519 | $ | 325,214 | ||||
Total operating expenses | 133,719 | 234,225 | ||||||
Operating income | 55,800 | 90,989 | ||||||
Net income | $ | 20,322 | $ | 43,397 | ||||
Earnings per common share: | ||||||||
Basic | $ | 0.37 | $ | 0.77 | ||||
Diluted | $ | 0.37 | $ | 0.76 | ||||
Weighted average shares outstanding: | ||||||||
Basic | 54,302,581 | 56,239,765 | ||||||
Diluted | 55,396,846 | 57,325,061 | ||||||
Selected combined balance sheet data (at end of period): | ||||||||
Cash | $ | 18,084 | ||||||
Current assets, including cash | 56,814 | |||||||
Total assets | 1,447,599 | |||||||
Current liabilities, including current portion of long-term debt | 41,869 | |||||||
Shareholders’ equity | 461,245 |
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Six Months Ended | Year Ended | |||||||
June 30, | December 31, | |||||||
2008 | 2007 | |||||||
General Maritime — Historical | ||||||||
Earnings per share (from continuing operations): | ||||||||
Basic | $ | 0.62 | $ | 1.46 | ||||
Diluted | $ | 0.60 | $ | 1.43 | ||||
Dividends declared per share of common stock | $ | 1.00 | $ | 17.12 | (1) | |||
Book value per share of common stock | $ | 6.69 | $ | 7.14 | ||||
Arlington — Historical | ||||||||
Earnings per share (from continuing operations): | ||||||||
Basic | $ | 0.58 | $ | 0.76 | ||||
Diluted | $ | 0.58 | $ | 0.76 | ||||
Dividends declared per share of common stock | $ | 1.12 | $ | 2.32 | ||||
Book value per share of common stock | $ | 6.32 | $ | 6.85 |
Six Months Ended | Year Ended | |||||||
June 30, | December 31, | |||||||
2008 | 2007 | |||||||
General Maritime (New General Maritime) unaudited pro forma combined amounts: | ||||||||
Earnings per share (from continuing operations): | ||||||||
Basic | $ | 0.37 | $ | 0.77 | ||||
Diluted | $ | 0.37 | $ | 0.76 | ||||
Dividends declared per share of common stock | $ | 1.00 | $ | 17.12 | ||||
Book value per share of common stock | $ | 8.02 | — | |||||
Arlington per share equivalent based on combination of General Maritime and Arlington: | ||||||||
Earnings per share (from continuing operations): | ||||||||
Basic | $ | 0.28 | $ | 0.57 | ||||
Diluted | $ | 0.28 | $ | 0.57 | ||||
Dividends declared per share of common stock | $ | 0.75 | $ | 12.78 | ||||
Book value per share of common stock | $ | 5.99 | — |
(1) | Includes a $15 special dividend declared in February 2007. |
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• | delay, defer or cease purchasing services from or providing goods or services to General Maritime, Arlington or New General Maritime; | |
• | delay or defer other decisions concerning General Maritime, Arlington or the combined company, or refuse to extend credit to General Maritime, Arlington or New General Maritime; | |
• | raise disputes under their business arrangements with General Maritime, Arlington, or New General Maritime or assert purported consent or change of control rights; or | |
• | otherwise seek to change the terms on which they do business with General Maritime, Arlington or New General Maritime. |
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• | demand for and supply of petroleum and petroleum products; | |
• | regional availability of refining capacity; | |
• | environmental and other regulatory developments; | |
• | global and regional economic conditions; | |
• | the distance petroleum and petroleum products are to be moved by sea; and | |
• | changes in seaborne and other transportation patterns. |
• | the number of newbuilding deliveries; | |
• | the scrapping rate of older vessels; | |
• | conversion of tankers to other uses; | |
• | the number of vessels that are out of service; and | |
• | environmental concerns and regulations. |
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• | global and regional economic conditions; | |
• | increases and decreases in production of and demand for crude oil; | |
• | developments in international trade; | |
• | changes in seaborne and other transportation patterns; | |
• | environmental concerns and regulations; and | |
• | weather. |
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• | general economic and market conditions affecting the shipping industry; | |
• | competition from other shipping companies; | |
• | supply and demand for tankers and the types and sizes of tankers we own; | |
• | alternative modes of transportation; | |
• | cost of newbuildings; | |
• | governmental or other regulations; | |
• | prevailing level of charter rates; and | |
• | technological advances. |
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• | identify businesses engaged in managing, operating or owning vessels for acquisitions or joint ventures; | |
• | identify vesselsand/or shipping companies for acquisitions; | |
• | integrate any acquired businesses or vessels successfully with our existing operations; | |
• | hire, train and retain qualified personnel to manage and operate our growing business and fleet; | |
• | identify additional new markets outside of the Atlantic basin; | |
• | improve our operating and financial systems and controls; and | |
• | obtain required financing for our existing and new operations. |
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• | the U.S. Oil Pollution Act of 1990, or OPA, which imposes strict liability for the discharge of oil into the200-mile United States exclusive economic zone, the obligation to obtain certificates of financial responsibility for vessels trading in United States waters and the requirement that newly constructed tankers that trade in United States waters be constructed with double-hulls; | |
• | the International Convention on Civil Liability for Oil Pollution Damage of 1969 entered into by many countries (other than the United States) which imposes strict liability for pollution damage caused by the discharge of oil; | |
• | the International Convention for the Prevention of Pollution from Ships adopted and implemented under the auspices of the International Maritime Organization, or IMO, with respect to strict technical and operational requirements for tankers; | |
• | the IMO International Convention for the Safety of Life at Sea of 1974, or SOLAS, which imposes crew and passenger safety requirements; | |
• | the International Ship and Port Facilities Securities Code, or the ISPS Code, which became effective in 2004; |
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• | the International Convention on Load Lines of 1966 which imposes requirements relating to the safeguarding of life and property through limitations on load capability for vessels on international voyages; and | |
• | the U.S. Maritime Transportation Security Act of 2002 which imposes security requirements for tankers entering U.S. ports. |
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• | incur additional debt; | |
• | pay dividends or make other restricted payments; | |
• | create or permit certain liens; | |
• | sell vessels or other assets; | |
• | create or permit restrictions on the ability of our subsidiaries to pay dividends or make other distributions to us; | |
• | engage in transactions with affiliates; and | |
• | consolidate or merge with or into other companies or sell all or substantially all of our assets. |
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• | If future cash flows are insufficient, we may need to incur further indebtedness in order to make the capital expenditures and other expenses or investments planned by us. | |
• | Our indebtedness will have the general effect of reducing our flexibility to react to changing business and economic conditions insofar as they affect our financial condition and, therefore, may pose substantial risk to our shareholders. | |
• | In the event that we are liquidated, any of our senior or subordinated creditors and any senior or subordinated creditors of our subsidiaries will be entitled to payment in full prior to any distributions to the holders of our shares of common stock. | |
• | Arlington’s credit facility matures in 2011, and General Maritime’s 2005 Credit Agreement and the amended credit agreement, if effective, will mature in 2012. Our ability to secure additional financing prior to or after that time, if needed, may be substantially restricted by the existing level of our indebtedness and the restrictions contained in our debt instruments. Upon maturity, we will be required to dedicate a substantial portion of our cash flow to the payment of such debt, which will reduce the amount of funds available for operations, capital expenditures and future business opportunities. |
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• | authorizing our board of directors to issue “blank check” preferred stock without shareholder approval; | |
• | providing for a classified board of directors with staggered, three-year terms; | |
• | prohibiting us from engaging in a “business combination” with an “interested shareholder” for a period of three years after the date of the transaction in which the person became an interested shareholder unless certain provisions are met; | |
• | prohibiting cumulative voting in the election of directors; | |
• | authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of at least 80% of the outstanding shares of our common stock entitled to vote for the directors; | |
• | prohibiting shareholder action by written consent unless the written consent is signed by all shareholders entitled to vote on the action; | |
• | limiting the persons who may call special meetings of shareholders; and | |
• | establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by shareholders at shareholder meetings. |
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• | statements containing projections of revenues, income (including income loss), earnings (including earnings loss) per share, capital expenditures, dividends, capital structure, or other financial items; | |
• | statements of the plans and objectives of management for future operations, including plans or objectives relating to products or services; | |
• | statements of future economic performance, including statements contained in discussion and analysis of financial condition by management or in results of operations; | |
• | statements of assumptions underlying or relating to the foregoing; | |
• | reports issued by an outside reviewer retained by any of the companies, to the extent any such report assesses aforward-looking statement made by any of the companies; and | |
• | statements containing a projection or estimate of any other item required by applicable regulations. |
• | the factors described under the section captioned “Risk Factors” beginning on page 20; | |
• | the ability to obtain the approval of the transaction by Arlington’s and General Maritime’s shareholders; | |
• | the ability to obtain governmental approvals of the transaction or to satisfy other conditions to the transaction on the proposed terms and timeframe; | |
• | the ability to realize the expected benefits to the degree, in the amounts or in the timeframe anticipated; | |
• | the ability to integrate Arlington’s businesses with those of General Maritime in a timely and cost-efficient manner; | |
• | changes in demand; | |
• | a material decline in rates in the tanker market; | |
• | changes in production of or demand for oil and petroleum products, generally or in particular regions; | |
• | greater than anticipated levels of tanker newbuilding orders or lower than anticipated rates of tanker scrapping; | |
• | changes in rules and regulations applicable to the tanker industry, including, without limitation, legislation adopted by international organizations such as the IMO and the European Union or by individual countries; | |
• | actions taken by regulatory authorities; | |
• | changes in trading patterns significantly impacting overall tanker tonnage requirements; | |
• | changes in the typical seasonal variations in tanker charter rates; | |
• | changes in the cost of other modes of oil transportation; | |
• | changes in oil transportation technology; | |
• | increases in costs, including, without limitation: crew wages, insurance, provisions, repairs and maintenance; |
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• | changes in general domestic and international political conditions; | |
• | changes in the condition of General Maritime’s or Arlington’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, the combined company’s anticipated drydocking or maintenance and repair costs); | |
• | changes in the itineraries of General Maritime’s or Arlington’s vessels; | |
• | the fulfillment of the closing conditions under, or the execution of customary additional documentation for, General Maritime’s agreements to acquire vessels; and | |
• | other factors listed from time to time in General Maritime’s or Arlington’s filings with the Securities and Exchange Commission, including, without limitation, their respective Annual Reports on Form10-K for the year ended December 31, 2007 and their respective subsequent reports onForm 10-Q andForm 8-K. |
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• | adopt the merger agreement and approve the General Maritime merger as described in this joint proxy statement/prospectus; | |
• | consider and vote upon any proposal to approve adjournments or postponements of the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement and approve the General Maritime merger; and | |
• | transact such other business as may be properly presented at the special meeting and any adjournments or postponements of the special meeting. |
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• | declared the merger agreement, the General Maritime merger and the other transactions contemplated by the merger agreement to be advisable and fair to and in the best interests of General Maritime and its shareholders; | |
• | approved the merger agreement and the transactions contemplated thereby, including, without limitation, the General Maritime merger; and | |
• | resolved to recommend that the shareholders of General Maritime adopt the merger agreement and approve the General Maritime merger and take any other actions requested in connection with the merger agreement. |
• | in person by attending the General Maritime special meeting; | |
• | by proxy, by accessing the Internet website specified on your enclosed proxy card; | |
• | by proxy, by calling the telephone number specified on your proxy card; or | |
• | by proxy, by completing, signing and dating your proxy card and returning it in the postage-paid envelope provided. |
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• | First, you may timely deliver a valid, later-dated proxy. | |
• | Second, you may provide a written notice to General Maritime corporate secretary before the General Maritime special meeting indicating that you have revoked your proxy. The contact information for the General Maritime corporate secretary isc/o John C. Georgiopoulos, Secretary, General Maritime Corporation, 299 Park Avenue, 2nd Floor, New York, New York 10171. | |
• | Third, you may cast a new proxy vote over the Internet or by telephone. | |
• | Fourth, if you are a holder of record, you may vote in person at the General Maritime special meeting. |
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• | approve and adopt the merger agreement and thereby approve the proposed transaction; | |
• | approve and adopt the Arlington amalgamation agreement and thereby approve the Arlington amalgamation; | |
• | consider and vote upon any proposal to approve adjournments or postponements of the special general meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special general meeting to approve and adopt the merger agreement and approve and adopt the Arlington amalgamation agreement; and | |
• | transact such other business as may properly come before the special general meeting or any adjournment or postponement thereof. |
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• | bring to the special general meeting a letter or other document from the corporation, on the corporation’s letterhead and signed by an officer of the corporation, that authorizes you to vote its shares on its behalf; OR | |
• | Arlington must have received at its registered office by 11:59 p.m. (Eastern time) on December 15, 2008 a duly executed proxy card from the corporation appointing you as its proxy. |
• | present the proxy at check-in at the special general meeting; AND | |
• | bring to the special general meeting a letter from the person or entity named on the proxy that authorizes you to vote its shares at the special general meeting. |
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• | sending Arlington a written notice of revocation prior to the special general meeting; | |
• | casting a new proxy vote over the Internet or by telephone by 11:59 p.m. (Eastern time) on December 15, 2008; | |
• | attending the special general meeting and voting in person if you are a record holder; OR | |
• | ensuring that Arlington receives from you at Arlington’s Registered office by 11:59 p.m. (Eastern time) on December 15, 2008 a new proxy card with a later date. |
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299 Park Avenue
New York, New York 10171
(212) 763-5600
First Floor, The Hayward Building
22 Bermudiana Road
Hamilton HM 11, Bermuda
(441) 292-4456
c/o General Maritime Corporation
299 Park Avenue
New York, New York 10171
(212) 763-5600
c/o General Maritime Corporation
299 Park Avenue
New York, New York 10171
(212) 763-5600
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c/o General Maritime Corporation
299 Park Avenue
New York, New York 10171
(212) 763-5600
• | merger sub will be merged with and into General Maritime, which we refer to in this joint proxy statement/prospectus as the General Maritime merger, with General Maritime continuing as the surviving corporation; and | |
• | amalgamation sub will amalgamate with Arlington, which we refer to in this joint proxy statement/prospectus as the Arlington amalgamation, with Arlington continuing as the surviving corporation. |
• | the holding company’s name will be changed to “General Maritime Corporation”; | |
• | New General Maritime’s amended and restated certificate of incorporation and amended and restated by-laws will be substantially in the forms attached as Exhibit A and Exhibit B to Appendix A of this joint proxy statement/prospectus; | |
• | General Maritime’s current directors and officers will be the directors and officers of New General Maritime and, immediately after the effective time of the proposed transaction, one current Arlington representative, who is expected to be Dr. E. Grant Gibbons, will be appointed to the New General Maritime board of directors, as described in the section captioned “The Proposed Transaction — Continuing Board and Management Positions” beginning on page 91; | |
• | General Maritime’s current headquarters will be New General Maritime’s headquarters; and | |
• | shares of New General Maritime common stock are expected be listed and traded on the NYSE under the trading symbol “GMR,” the trading symbol under which shares of General Maritime common stock currently trade on the NYSE. |
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• | acquisitions of additional vessels; | |
• | acquisitions of public or private companies; |
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• | a merger of Arlington with a public or private company; | |
• | the sale of Arlington; or | |
• | the continued execution of Arlington’s current operating plan. |
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• | Party A’s proposal was at a 9.5% discount to Arlington’s then current market price and adjusted net asset value, and, as a proposal for a cash transaction, Party A’s proposal did not provide for a possible increase in value in the form of a higher share price and future dividends; | |
• | although the exchange ratio in the General Maritime proposal implied a discount of approximately 14.2% to the then current market price of the Arlington common shares, the Arlington board believed that any definitive transaction with General Maritime would provide Arlington’s shareholders the opportunity to participate in the potential increase in future value in the form of a higher share price and future dividends as compared to a cash transaction that was also at a discount; | |
• | Party A’s proposal had been reduced from Party A’s previous proposal; and | |
• | concern that such offer price could decline further prior to reaching a definitive agreement with Party A. |
• | the Arlington board believed that a definitive agreement could be completed more quickly with General Maritime than with Party B because General Maritime is a public company; | |
• | following the proposed combination with General Maritime, there was a greater likelihood of preserving, or enhancing, the dividends to be received by Arlington shareholders in the future than there was following the proposed combination with Party B; | |
• | General Maritime’s liquidity and its experienced management team; and |
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• | the General Maritime proposal was not contingent on raising additional financing. |
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• | representatives of Bernhard Schulte (Bermuda) Ltd Partnership, Arlington’s technical consulting firm, gave a presentation regarding their due diligence review with respect to General Maritime’s fleet and technical operations; | |
• | representatives of WilmerHale gave a presentation regarding their legal due diligence investigation of General Maritime; and | |
• | representatives of MSPC gave a presentation regarding their accounting due diligence investigation of General Maritime. |
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• | declared the merger agreement, the General Maritime merger and the other transactions contemplated by the merger agreement to be advisable and fair to and in the best interests of General Maritime and its shareholders; |
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• | approved the merger agreement and the transactions contemplated thereby, including, without limitation, the General Maritime merger; and | |
• | resolved to recommend that the shareholders of General Maritime adopt the merger agreement and approve the General Maritime merger and take any other actions requested in connection with the merger agreement. |
• | The combined company’s potential for revenue growth, including the balance between time charter and spot exposure to provide earnings and cash flow stability while creating the potential to benefit from stronger tanker rates. | |
• | The companies’ complementary businesses and the potential for synergies and cost savings, including an estimated $7.5 million of cash cost savings we expect to realize in the first full year of operations following the proposed transaction from combining operations and the executive transition. | |
• | The fact that General Maritime common stock and Arlington common shares had historically performed well. | |
• | The fact that the consideration to be paid to Arlington shareholders and General Maritime shareholders was consistent with recent comparable transactions in the industry, thereby reinforcing the view that the merger consideration was appropriate. | |
• | The fact that the consideration to be paid to Arlington shareholders, as well as the other terms and conditions of the proposed transaction, was the result of a competitive process by Arlington, thereby reducing the likelihood that a competing offer for Arlington would be made after announcement of the proposed transaction and increasing the likelihood that the proposed transaction would be consummated. | |
• | The fact that the exchange ratios in the proposed transaction were determined based on the respective net asset values of General Maritime and Arlington. | |
• | The combined company’s improved financial flexibility to invest in growth and its contemplated cash dividend target of $2.00 per share annually. | |
• | The fact that the combined company will have a modern, diverse fleet of 31 double-hulled vessels (approximately 4.0 million dwt) with an average age of 8.0 years, with a presence in both the crude oil and the petroleum product segments. | |
• | The combined company’s expanded geographic reach, with trading outside of General Maritime’s current routes. | |
• | The combined company’s stronger platform for growth and its positioning to be a leading consolidator in the industry. | |
• | The combined company’s contracted revenue stream of approximately $450 million through 2013. | |
• | The benefits associated with the abilities of the management team of the combined company and its experience with consolidations. | |
• | The terms and conditions of the merger agreement, including the merger consideration and the mechanics of the exchange ratios payable to General Maritime shareholders and Arlington shareholders, the limitations on the interim business operations of General Maritime and Arlington, the conditions to consummation of the proposed transaction, and the terms regarding third party proposals and termination |
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(including the potential payment by Arlington of a termination feeand/or the reimbursement of expenses in specified circumstances), which were favorable to General Maritime shareholders. |
• | The analyses and presentation prepared by UBS and its opinion, dated August 5, 2008, to the effect that, as of such date, and based upon and subject to various assumptions, matters considered and limitations described in the opinion, the General Maritime exchange ratio provided for in the proposed transaction was fair, from a financial point of view, to General Maritime, which is described in the section captioned “The Proposed Transaction — Opinion of General Maritime’s Financial Advisor” beginning on page 63. | |
• | The fact that both companies had the support of their respective existing bank lenders and received preliminary approvals to continue their respective debt facilities following consummation of the proposed transaction. | |
• | The expected qualification of the General Maritime merger and the Arlington amalgamation as reorganizations within the meaning of Section 368(a) of the Code, resulting in none of New General Maritime, General Maritime, Arlington or their respective shareholders recognizing gain or loss for U.S. federal income tax purposes solely as a result of the proposed transaction. | |
• | The relative market capitalization of General Maritime and Arlington and the expected capital structure of the combined company following the proposed transaction, and the fact that General Maritime shareholders would hold approximately 73% of the outstanding shares of the combined company. | |
• | The fact that, after consummation of the proposed transaction, the executive officers of General Maritime will manage the combined company, and the combined company’s board will consist of the six members of the current General Maritime board and one representative of Arlington, who is expected to be Dr. E. Grant Gibbons. |
• | The risks and costs associated with the proposed transaction not being completed in a timely manner or at all, even if approved by both companies’ shareholders. | |
• | The risks and costs associated with diverting management and employee attention and resources for an extended period of time from other strategic opportunities and operational matters while working to implement the proposed transaction. | |
• | The potential adverse effect of the proposed transaction on existing business and customer relationships. | |
• | Potential litigation arising from the merger agreement or the proposed transaction. | |
• | The challenges of completing the transaction and combining the businesses of the two companies, and the risks of not achieving the expected operating efficiencies, growth or cash cost savings of the proposed transaction and the related arrangements. | |
• | The substantial transactional costs and expenses expected to be incurred by General Maritime, as well as by Arlington, in connection with the proposed transaction. | |
• | The fact that the fixed General Maritime exchange ratio would not adjust downwards to compensate for declines in the price of Arlington common shares prior to the closing of the proposed transaction, and that the terms of the merger agreement did not include termination rights triggered expressly by a decrease in value of Arlington due to a decline in the market price of Arlington common shares; the General Maritime board determined that this structure was appropriate and the risk acceptable in view of the General Maritime board’s focus on the relative net asset values of the two companies and the percentage of the combined company to be owned by former General Maritime shareholders based on such net asset values. |
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• | The dilutive effect of the proposed transaction on the share ownership of General Maritime shareholders. | |
• | Restrictions under the merger agreement on the conduct of General Maritime’s business and its ability to pursue other strategic opportunities prior to the completion of the proposed transaction. | |
• | Other applicable risks associated with General Maritime, the merger agreement and the proposed transaction, including those described under the section captioned “Risk Factors” beginning on page 20. |
• | reviewed certain publicly available business and financial information relating to General Maritime and Arlington; |
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• | reviewed certain internal financial information and other data relating to General Maritime’s businesses and financial prospects that were provided to UBS by General Maritime’s management and not publicly available, including financial forecasts and estimates prepared by General Maritime’s management that the General Maritime board directed UBS to utilize for purposes of its analysis; | |
• | reviewed certain internal financial information and other data relating to Arlington’s businesses and financial prospects that were provided to UBS by General Maritime’s management and not publicly available, including financial forecasts and estimates prepared by General Maritime’s management that the General Maritime board directed UBS to utilize for purposes of its analysis; | |
• | reviewed certain estimates of cost savings and the costs and payments to achieve such cost savings, referred to collectively as “Net Cost Savings”, prepared by General Maritime’s management that were provided to UBS by General Maritime and not publicly available that the General Maritime board directed UBS to utilize for purposes of its analysis; | |
• | conducted discussions with members of General Maritime’s senior management concerning the businesses and financial prospects of General Maritime and Arlington; | |
• | reviewed publicly available financial and stock market data with respect to certain other companies UBS believed to be generally relevant; | |
• | compared the financial terms of the proposed transaction with the publicly available financial terms of certain other transactions UBS believed to be generally relevant; | |
• | reviewed current and historical market prices of General Maritime common stock and Arlington common shares; | |
• | considered the combined company’s forecasted financial statements pro forma for the proposed transaction reflecting the financial forecasts and estimates for General Maritime and Arlington referred to above and the estimated Net Cost Savings referred to above; | |
• | reviewed the forecasted earnings and dividends of the combined company pro forma for the proposed transaction reflecting the financial forecasts and estimates for General Maritime and Arlington referred to above and the estimated Net Cost Savings referred to above per share of General Maritime common stock after giving effect to the General Maritime exchange ratio relative to the forecasted earnings per share and dividends per share of General Maritime common stock on a standalone basis; | |
• | reviewed a draft of the merger agreement dated August 5, 2008; and | |
• | conducted such other financial studies, analyses and investigations, and considered such other information, as UBS deemed necessary or appropriate. |
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Illustrative Historical | ||||||||
Trading Ratio | ||||||||
(average of closing price | ||||||||
per share of General | ||||||||
Maritime common stock | Illustrative Implied | |||||||
divided by closing price | Ownership of the | |||||||
per share of Arlington | Combined Company | |||||||
common stock for each | by General Maritime | |||||||
Period | trading day in period) | Shareholders | ||||||
Terms of Proposed Transaction | 1.340 | 73.0 | % | |||||
August 4, 2008 | 1.211 | 71.0 | % | |||||
1-Month | 1.204 | 70.9 | % | |||||
3-Month | 1.206 | 70.9 | % | |||||
1-Year | 1.156 | 70.0 | % | |||||
2-Year | 1.146 | 69.8 | % |
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• | equity value, calculated, in the case of General Maritime, as (a) the number of diluted shares outstanding of General Maritime as of May 6, 2008, based on the treasury stock method for stock options, multiplied by (b) the closing price per share of General Maritime common stock on August 4, 2008, and, in the case of Arlington, as (a) the number of basic shares outstanding of Arlington as of May 6, 2008 multiplied by (b) the closing price per Arlington common share on August 4, 2008; | |
• | cash available for dividends, calculated, in the case of General Maritime, as earnings before interest, taxes, depreciation and amortization, or “EBITDA”, less net cash interest expense, less drydocking costs, and, in the case of Arlington, as EBITDA, less net cash interest expense, plus swap benefits, and in each case excluding any capital expenditures for new vessels, for fiscal year 2007 and estimated for fiscal years 2008 and 2009; | |
• | the average of annual estimated cash available for dividends for fiscal years 2010 through 2013; | |
• | estimated cash available for dividends for fiscal year 2013, as adjusted to reflect, in the case of General Maritime, General Maritime’s normalized level of drydocking costs and, in the case of Arlington, a full year’s estimated revenue from two vessels for which Arlington’s contracts expire during 2013; | |
• | net asset value, as prepared by General Maritime’s management; and | |
• | adjusted net asset value, as prepared by General Maritime’s management, to reflect the net present value of the difference between current vessel charter rates and estimated market vessel charter rates. |
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• | enterprise value, based on the closing prices of General Maritime common stock and Arlington common shares on August 4, 2008; | |
• | EBITDA and earnings before interest and taxes, or “EBIT”, for fiscal year 2007 and estimated for fiscal years 2008 and 2009, with General Maritime’s EBITDA adjusted to reflect the deduction of amortization of drydocking costs; | |
• | the average of annual estimated EBITDA and the average of annual estimated EBIT for fiscal years 2010 through 2013, with General Maritime’s estimated EBITDA adjusted to reflect the deduction of estimated amortization of drydocking costs; and | |
• | estimated EBITDA and estimated EBIT for fiscal year 2013, with General Maritime’s estimated EBITDA adjusted to reflect the deduction of General Maritime’s amortization of drydocking costs, and Arlington’s EBITDA and EBIT adjusted to reflect a full year’s estimated revenue from two vessels for which Arlington’s contracts expire during 2013. |
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Percentage Contribution | ||||||||
Arlington | General | |||||||
Tankers | Maritime | |||||||
Levered Analyses | ||||||||
Implied Equity Value based on General Maritime Closing Stock Price on August 4, 2008 and General Maritime Exchange Ratio | 27.0 | 73.0 | ||||||
Equity Value at August 4, 2008 Closing Stock Prices | 29.0 | 71.0 | ||||||
Cash Available for Dividends | ||||||||
2007A | 27.0 | 73.0 | ||||||
2008E | 20.6 | 79.4 | ||||||
2009E | 22.8 | 77.2 | ||||||
2010E-2013E (average) | 23.7 | 76.3 | ||||||
2013E (adjusted) | 28.5 | 71.5 | ||||||
Net Asset Value | 30.3 | 69.7 | ||||||
Adjusted Net Asset Value | 26.4 | 73.6 | ||||||
Unlevered Analyses | ||||||||
Implied Enterprise Value based on General Maritime Closing Stock Price on August 4, 2008 and General Maritime Exchange Ratio | 25.5 | 74.5 | ||||||
Enterprise Value at August 4, 2008 Closing Stock Prices | 26.6 | 73.4 | ||||||
EBITDA | ||||||||
2007A | 28.1 | 71.9 | ||||||
2008E | 22.6 | 77.4 | ||||||
2009E | 23.9 | 76.1 | ||||||
2010E-2013E (average) | 25.0 | 75.0 | ||||||
2013E (adjusted) | 29.1 | 70.9 | ||||||
EBIT | ||||||||
2007A | 30.8 | 69.2 | ||||||
2008E | 23.4 | 76.6 | ||||||
2009E | 26.0 | 74.0 | ||||||
2010E-2013E (average) | 27.1 | 72.9 | ||||||
2013E (adjusted) | 32.4 | 67.6 |
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• | DHT Maritime, Inc. | |
• | Knightsbridge Tankers Limited | |
• | Nordic American Tanker Shipping Limited | |
• | Omega Navigation Enterprises, Inc. | |
• | Teekay Tankers Ltd. |
• | enterprise value, calculated as diluted equity value, using the treasury stock method for stock options, based on the closing price per share of common stock as of August 4, 2008, plus net debt (calculated as the book value of debt less cash and cash equivalents, each as of the most recently published balance sheet), as a multiple of estimated EBITDA for each of calendar years 2008 and 2009; | |
• | the ratio of closing market price per share of common stock, as of August 4, 2008, to estimated dividends per share of common stock (“DPS”) for each of calendar years 2008 and 2009; and | |
• | closing market price per share of common stock, as of August 4, 2008, as a multiple of net asset value, calculated as “steel value”, as obtained from Shipvalue.net as of July 2008, less net debt, per share of common stock. |
• | Arlington, where price per share of common stock and enterprise value were based on the closing price per Arlington common share on August 4, 2008 and using (i) estimated financial data for Arlington prepared by General Maritime’s management described above, and (ii) estimated financial data for Arlington based on IBES consensus estimates; | |
• | Arlington at Implied Value in the proposed transaction using (i) estimated financial data for Arlington prepared by General Maritime’s management described above and (ii) estimated financial data for Arlington based on IBES consensus estimates; and | |
• | General Maritime, where price per share of common stock and enterprise value were based on the closing price per share of General Maritime common stock on August 4, 2008 and using (i) estimated financial data for General Maritime prepared by General Maritime’s management described above, and (ii) based on estimated financial data for General Maritime based on IBES consensus estimates. |
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Closing Stock | Closing Stock | |||||||||||||||||||
Price on | Price on | |||||||||||||||||||
Enterprise | 8/4/2008/ | 8/4/2008/NAV | ||||||||||||||||||
Value/EBITDA | Estimated DPS | per Share of | ||||||||||||||||||
2008E | 2009E | 2008E | 2009E | Common Stock | ||||||||||||||||
Selected Companies | ||||||||||||||||||||
Mean | 8.5 | 9.0 | 8.1 | 9.1 | 102.3 | |||||||||||||||
Median | 7.9 | 8.6 | 7.5 | 8.7 | 107.7 | |||||||||||||||
High | 10.5 | 10.0 | 11.2 | 12.0 | 129.3 | |||||||||||||||
Low | 7.3 | 8.4 | 6.3 | 7.5 | 59.0 | |||||||||||||||
Arlington at Closing Stock Price on August 4, 2008 | ||||||||||||||||||||
Based on IBES Consensus Estimates | 11.1 | 11.4 | 8.6 | 8.6 | 69.9 | |||||||||||||||
Based on Estimates provided by General Maritime’s Management | 11.1 | 10.0 | 8.7 | 7.6 | 69.9 | |||||||||||||||
Arlington at Implied Value in Proposed Transaction, based on General Maritime Closing Stock Price on August 4, 2008 and General Maritime Exchange Ratio | ||||||||||||||||||||
Based on IBES Consensus Estimates | 10.5 | 10.7 | 7.7 | 7.7 | 63.2 | |||||||||||||||
Based on Estimates provided by General Maritime’s Management | 10.4 | 9.4 | 7.9 | 6.9 | 63.2 | |||||||||||||||
General Maritime at Closing Stock Price on August 4, 2008 | ||||||||||||||||||||
Based on IBES Consensus Estimates | 8.3 | 8.4 | 11.8 | 11.8 | 74.3 | |||||||||||||||
Based on Estimates provided by General Maritime’s Management | 7.7 | 7.3 | 11.8 | 11.8 | 74.3 |
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Implied Enterprise | ||||||
Date Announced | Acquiror | Target | Value/LTM EBITDA | |||
April 17, 2007 | Teekay Shipping Corporation and A/S Dampskibsselskabet TORM | OMI Corporation | 7.7 | |||
December 13, 2004 | Overseas Shipholding Group, Inc. | Stelmar Shipping Ltd. | 11.0 | |||
March 26, 2004 | General Maritime Corporation | Soponata-Sociedade Portugeuesa | nm | |||
March 16, 2004 | Teekay Shipping Corporation | Naviera F. Tapias SA | nm |
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• | Mr. Georgiopoulos will serve as Chairman for three years, if elected. | |
• | Mr. Georgiopoulos’s “evergreen” employment arrangement, as well as all obligations of General Maritime to pay salary or severance, will terminate. | |
• | The obligations of General Maritime to reimburse Mr. Georgiopoulos on a“grossed-up” basis for any excise tax in connection with a change of control of General Maritime will terminate. In the event any payment or benefit (including restricted stock) from New General Maritime or its subsidiaries or affiliates would cause Mr. Georgiopoulos to owe excise tax under Section 280G of the Code, such payments and benefits will be reduced such that they do not exceed the greater of (i) the maximum amount that would be payable to Mr. Georgiopoulos without the imposition of any excise tax with respect to such payments and benefits and (ii) the amount that yields Mr. Georgiopoulos the greatest after-tax amount of such payments or benefits after taking into account any excise tax imposed on him, whether due to such payments or benefits or otherwise. | |
• | Mr. Georgiopoulos will repay an outstanding loan of $485,467 from General Maritime. | |
• | New General Maritime will pay Mr. Georgiopoulos $22 million as consideration for terminating the employment and severance arrangements and guarantee him $8 million as a bonus for 2008. | |
• | Mr. Georgiopoulos’ existing registration rights agreement with General Maritime will be terminated in connection with completion of the proposed transaction, and he and New General Maritime will enter into a new registration rights agreement to be effective as of the effective date of the proposed transaction. | |
• | As Chairman, Mr. Georgiopoulos will receive New General Maritime’s standard director retainer payment and an additional $30,000 per year as a Chairman’s fee. He will be eligible for additional payments (whether cash, stock awards, option grants, or otherwise) at the discretion of the New General Maritime’s independent compensation committee and board. It is expected that these additional payments will be determined based on his involvement in successful strategic and transactional work for New General Maritime. |
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• | Mr. Georgiopoulos will receive healthcare coverage from New General Maritime, and New General Maritime will reimburse Mr. Georgiopoulos for certain legal fees incurred by Mr. Georgiopoulos in connection with negotiating and drafting the letter agreement, up to a maximum of $20,000, as well as for the antitrust filing fee he paid in connection with the proposed transaction. |
• | determined that the transactions contemplated by the merger agreement, including the Arlington amalgamation, were advisable and fair to, and in the best interests of, Arlington and its shareholders; | |
• | approved the merger agreement and the Arlington amalgamation agreement; and | |
• | determined to recommend that Arlington’s shareholders vote“FOR”approving the merger agreement and the Arlington amalgamation agreement. |
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• | If the proposed transaction is completed, Arlington’s shareholders will have the opportunity to participate in the potential increased future value of a larger company with an attractive business profile. In particular: |
• | the combined company will have an enhanced fleet and market presence; | |
• | Arlington’s shareholders will have the potential to benefit from General Maritime’s vessels that are trading in the spot market; | |
• | the combined company will benefit from General Maritime’s management team that has experience both managing a larger fleet and consolidating the industry; | |
• | the combined company’s annual cash dividend target of $2.00 per share compared favorably with Arlington’s expected dividends per share for 2009 and onward; and | |
• | the combined company’s partial dividend payout structure and approximately $165 million of availability under General Maritime’s credit facility provide a stronger platform for growth. |
• | If the proposed transaction is completed, the combined company will have a stronger financial profile than Arlington has on a stand-alone basis. In particular, the larger scale of the combined company will provide greater opportunities to retain cash to invest in growth, while at the same servicing the debt associated with the combined company’s more moderate leverage. | |
• | The combined company will have an attractive dividend profile for Arlington shareholders. Most notably, the combined company will have an initial annual dividend target of $2.00 per share, which is supported by the combined company’s time charter coverage. In addition, the combined company’s partial dividend payout structure, together with its long-term growth prospects, provides opportunities for increased dividends in future years. |
• | Since Arlington had undertaken a robust strategic alternatives analysis to solicit third-party interest in a potential transaction and the fact that Arlington was exploring strategic alternatives had been publicly announced, a wide number of parties had an opportunity to propose possible transactions. After evaluating the terms of the proposals made by the other third parties in Arlington’s process, the risks and uncertainties associated with the ability of any such other parties to enter into or consummate any transaction as well as the risks and benefits of Arlington remaining as a stand-alone, independent company, the Arlington board concluded that the proposed combination with General Maritime is in the best interests of Arlington and its shareholders. | |
• | Based on information concerning Arlington’s and General Maritime’s respective historic businesses, financial results and prospects, including the result of Arlington’s due diligence review of General Maritime, Arlington believes that the two companies can be effectively and efficiently integrated. | |
• | Jefferies (which will receive a fee for its services as financial advisor to Arlington in connection with the proposed transaction, a substantial portion of which is contingent upon the completion of the proposed transaction), has provided a fairness opinion stating that, as of August 5, 2008 and subject to the various assumptions made, procedures followed, matters considered and limitations described in its |
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opinion, the Arlington exchange ratio was fair, from a financial point of view, to the holders of Arlington common shares which is described in the section captioned “The Proposed Transaction — Opinion of Arlington’s Financial Advisor” beginning on page 78. |
• | Since the exchange ratios for the proposed transaction were determined based on the respective net asset values of General Maritime and Arlington, the price can be supported by underlying assets. | |
• | Both parties are strongly committed to completing the proposed transaction pursuant to their respective obligations under the terms of the merger agreement. | |
• | The General Maritime merger and Arlington amalgamation are expected to qualify as reorganizations within the meaning of Section 368(a) of the Code, resulting in none of New General Maritime, General Maritime, Arlington or their respective shareholders recognizing gain or loss for U.S. federal income tax purposes solely as a result of the proposed transaction. | |
• | In the view of the Arlington Board, the terms of the merger agreement, including the termination fee, do not preclude a proposal for an alternative acquisition transaction involving Arlington. In addition, the merger agreement allows the Arlington board to change or withdraw its recommendation of the merger agreement if Arlington receives a superior proposal from a third party and the Arlington board determines that the failure to change its recommendation would be inconsistent with its fiduciary duties under applicable law, subject to the payment of a termination fee upon termination under certain circumstances. | |
• | Since the merger agreement provides that the combined company’s board after the completion of the proposed transaction will include one representative of Arlington, who is expected to be Dr. E. Grant Gibbons, the proposed transaction provides some leadership continuity for Arlington shareholders. |
• | There are certain risks that the proposed transaction is not completed in a timely fashion or at all due to any of the following: |
• | failure of the Arlington shareholders or the General Maritime shareholders to vote in favor of the adoption of the proposed transaction; | |
• | failure of regulatory agencies to approve the proposed transaction; | |
• | imposition of terms and conditions on regulatory approvals that would materially and adversely affect the projected financial results of the combined company; and | |
• | failure to satisfy the closing conditions, some of which are outside of Arlington’s control. |
• | The Arlington exchange ratio in the merger agreement implies a discount of approximately 9.6% to Arlington’s closing share price of August 4, 2008, the day prior to the execution of the merger agreement and one trading day prior to the public announcement of the execution of the merger agreement by the parties. The Arlington board recognized this discount in approving the proposed transaction and determined that even with this discount the proposed transaction provided Arlington’s shareholders with a possible increase in value in the form of a higher share price and future dividends as compared to a cash transaction that was also at a discount and was preferable to not doing any transaction. | |
• | The merger agreement does not include protections against declines in the price of General Maritime common stock prior to the closing of the proposed transaction. In particular, the fixed Arlington exchange ratio does not adjust downwards to compensate for declines in the price of General Maritime common stock prior to the closing of the proposed transaction and Arlington does not have termination rights that are triggered expressly by a decrease in value of General Maritime due to a decline in the market price of General Maritime common stock. The Arlington board determined that this structure was appropriate and the risk acceptable in view of the Arlington board’s focus on the relative net asset values of the two companies and the percentage of the combined company to be owned by former Arlington shareholders based on such net asset values. | |
• | As a result of the fact that Arlington’s shareholders will only own approximately 27% of the combined company following the completion of the proposed transaction, General Maritime’s current shareholders |
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will have the ability to significantly influence the combined company’s business after the completion of the proposed transaction. |
• | Since Arlington will only have one representative on the combined company’s board, who is expected to be Dr. E. Grant Gibbons, General Maritime’s current directors will have the ability to control the direction of the combined company’s business after the completion of the proposed transaction. | |
• | During the period prior to the completion of the proposed transaction, Arlington is restricted under the merger agreement from taking certain actions that it may desire to take. In addition, during this period, there is the potential that management’s attention could be diverted. | |
• | Certain provisions of the merger agreement may have the effect of discouraging proposals for alternative acquisition transactions involving Arlington, including: (1) the restriction on Arlington’s ability to solicit proposals for alternative transactions; (2) the requirement that the Arlington board submit the Arlington voting proposal to Arlington shareholders for approval, even if the Arlington board withdraws its recommendation of the proposed transaction; and (3) the requirement that Arlington pay a termination fee of $11.0 million to General Maritime in certain circumstances following the termination of the merger agreement. | |
• | Certain of Arlington’s directors or its executive officer may have interests in the proposed transaction as individuals that are in addition to, or that may be different from, the interests of Arlington shareholders. | |
• | Arlington will have to incur significant fees and expenses associated with completing the proposed transaction. Moreover there is a risk that anticipated cost savings will not be achieved and that future dividends may not be in the amounts anticipated. | |
• | There are other risks, such as those of the type and nature described in the section captioned “Risk Factors” beginning on page 20. |
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• | reviewed a draft of the merger agreement, dated August 4, 2008; | |
• | reviewed certain publicly available financial and other information about Arlington and General Maritime; | |
• | reviewed certain information furnished to Jefferies by Arlington and General Maritime, including financial forecasts and analyses, relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of Arlington and General Maritime; | |
• | reviewed certain information furnished to Jefferies by General Maritime’s management relating to certain cost savings and operating synergies projected by General Maritime’s management to result from the proposed transaction, which we sometimes refer to as the Synergies; | |
• | assessed the sustainability of Arlington’s current dividend policy; | |
• | held discussions with members of senior management of Arlington and General Maritime concerning the matters described in the second, third and fourth bullet points above and with members of senior management of Arlington concerning the fifth bullet point above; | |
• | reviewed certain publicly available information, including share trading price history and valuation multiples, of Arlington and General Maritime, and certain publicly traded companies that Jefferies deemed comparable to Arlington and General Maritime; | |
• | reviewed the results of operations of Arlington and General Maritime, and compared them with those of certain publicly traded companies that Jefferies deemed to be relevant; | |
• | compared the proposed financial terms of the proposed transaction with the financial terms of certain other transactions that Jefferies deemed relevant; | |
• | considered the potential pro forma impact of the proposed transaction; and | |
• | conducted such other financial studies, analyses and investigations as Jefferies deemed appropriate including Jefferies’ assessment of general economic, market and monetary conditions. |
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Low* | High* | |||||||
Value in $ millions, except per share amounts | ||||||||
Charter-Free Value of Assets | $ | 633.0 | $ | 664.0 | ||||
Less: Charter Adjustment for Charters and Charter Options Below Current Market | (108.9 | ) | (90.2 | ) | ||||
Charter Adjusted Asset Value | 524.1 | 573.8 | ||||||
Plus: Cash (as of June 30, 2008) | 12.4 | 12.4 | ||||||
Less: Debt (as of June 30, 2008) | (229.5 | ) | (229.5 | ) | ||||
NAV | 307.0 | 356.6 | ||||||
Shares Outstanding (Millions) | 15.5 | 15.5 | ||||||
NAV/Share | $ | 19.81 | $ | 23.01 |
* | High and low values based on aggregate charter adjusted NAV for the entire fleet. |
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• | A/S Dampskibsselskabet TORM | |
• | Overseas Shipholding Group, Inc. | |
• | StealthGas Inc. | |
• | Teekay Corporation | |
• | Tsakos Energy Navigation Ltd. |
2008E | 2009E | |||||||
EBITDA | EBITDA | |||||||
Mean | 7.5x | 7.9x | ||||||
Median | 8.0x | 8.3x | ||||||
High | 9.3x | 9.3x | ||||||
Low | 4.6x | 6.2x |
Estimated 2011 EBITDA Multiple | ||||||
8.5x | 9.0x | 9.5x | ||||
Present Value of Future Share Price and Dividends | $12.49 | $13.59 | $14.68 |
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Combined Adjusted Net Asset Value | ||||||||
Low | High | |||||||
(In $ millions, except per share amounts) | ||||||||
Arlington Adjusted Asset Value | $ | 524.1 | $ | 573.8 | ||||
General Maritime Adjusted Asset Value | 1,590.9 | 1,599.9 | ||||||
Combined Adjusted Asset Value | $ | 2,115.0 | $ | 2,173.6 | ||||
Less: Pro Forma Debt (including estimated closing costs of $47.9 million) | (1,011.7 | ) | (1,011.7 | ) | ||||
Plus: Pro Forma Cash | 55.1 | 55.1 | ||||||
Combined NAV | $ | 1,158.4 | $ | 1,217.0 | ||||
Pro Forma Shares Outstanding (Millions) | 57.5 | 57.5 | ||||||
Combined NAV Per Share | $ | 20.15 | $ | 21.17 |
• | Capital Product Partners LP | |
• | DHT Maritime, Inc. | |
• | Knightsbridge Tankers Ltd. | |
• | Nordic American Tanker Shipping Ltd. | |
• | Omega Navigation Enterprises, Inc. | |
• | Ship Finance International Ltd. | |
• | Teekay Tankers Ltd. |
• | August 4, 2008 stock price; | |
• | The ratio of each company’s estimated total enterprise value to estimated EBITDA for the calendar years 2008 and 2009; | |
• | Each company’s estimated dividend yield for the calendar years 2008 and 2009; | |
• | Each company’s estimated payout ratio, which is the ratio of distributable cash paid out as a dividend, for the calendar years 2008 and 2009 (distributable cash is equal to EBITDA minus interest expense and taxes and excludes capitalized drydocking costs); |
Mean | Median | High | Low | |||||||||||||
TEV/Estimated 2008 EBITDA | 9.4 | x | 8.9 | x | 11.9 | x | 7.1 | x | ||||||||
Estimated 2008 Dividend Yield | 11.4 | % | 11.6 | % | 14.5 | % | 8.5 | % | ||||||||
Estimated 2008 Payout Ratio | 74.7 | % | 74.2 | % | 104.0 | % | 43.9 | % | ||||||||
TEV/Estimated 2009 EBITDA | 9.8 | x | 9.9 | x | 11.2 | x | 8.4x | |||||||||
Estimated 2009 Dividend Yield | 10.7 | % | 10.7 | % | 13.4 | % | 8.4 | % | ||||||||
Estimated 2009 Payout Ratio | 78.4 | % | 78.3 | % | 110.9 | % | 43.1 | % |
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General | ||||||||
Arlington | Maritime* | |||||||
TEV/Estimated 2008 EBITDA | 11.0 | x | 8.4 | x | ||||
Estimated 2008 Dividend Yield | 11.7 | % | 8.5 | % | ||||
Estimated 2008 Payout Ratio | 103.7 | % | 43.5 | % | ||||
TEV/Estimated 2009 EBITDA | 11.0 | x | 8.0 | x | ||||
Estimated 2009 Dividend Yield | 11.5 | % | 8.5 | % | ||||
Estimated 2009 Payout Ratio | 102.8 | % | 41.5 | % |
* | General Maritime EBITDA is before amortization of restricted stock. |
General | ||||||||||||||||||||||||||||||||
Maritime | Twelve | Six | Three | One | ||||||||||||||||||||||||||||
Exchange | August 4, | Month | Month | Month | Month | |||||||||||||||||||||||||||
Ratio | High | Low | 2008 | Average | Average | Average | Average | |||||||||||||||||||||||||
Exchange Ratio | 1.34 | x | 1.33 | x | 0.90 | x | 1.21 | x | 1.12 | x | 1.15 | x | 1.18 | x | 1.18x |
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• | Equity value at market price; | |
• | Equity value at exchange ratio (calculated using the transaction exchange ratios and Arlington closing share price of $19.45 as of August 4, 2008); | |
• | Adjusted net asset value (reflecting the mid-point of the valuation range); | |
• | Estimated 2008 net income; | |
• | Estimated 2009 net income; | |
• | Estimated 2010 net income; | |
• | Estimated 2008 distributable cash flow (equal to estimated 2008 EBITDA less interest less tax expense and excluding capitalized drydocking costs); | |
• | Estimated 2009 distributable cash flow (equal to estimated 2009 EBITDA less interest less tax expense and excluding capitalized drydocking costs); | |
• | Estimated 2010 distributable cash flow (equal to estimated 2010 EBITDA less interest less tax expense and excluding capitalized drydocking costs); | |
• | Total enterprise value at market price; | |
• | Total enterprise value at exchange ratio (calculated using the transaction exchange ratios and Arlington closing share price of $19.45 as of August 4, 2008); | |
• | Adjusted asset value; | |
• | Estimated 2008 EBITDA; | |
• | Estimated 2009 EBITDA; and | |
• | Estimated 2010 EBITDA. |
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Arlington | General Maritime | |||||||
Percentage | Percentage | |||||||
Financial Metric | Contribution* | Contribution* | ||||||
Equity Value at Market Price | 29.0 | % | 71.0 | % | ||||
Equity Value at Exchange Ratio | 27.0 | % | 73.0 | % | ||||
Adjusted Net Asset Value | 26.9 | % | 73.1 | % | ||||
Estimated 2008 Net Income | 19.4 | % | 80.6 | % | ||||
Estimated 2009 Net Income | 19.3 | % | 80.7 | % | ||||
Estimated 2010 Net Income | 13.8 | % | 86.2 | % | ||||
Estimated 2008 Distributable Cash Flow | 19.1 | % | 80.9 | % | ||||
Estimated 2009 Distributable Cash Flow | 18.3 | % | 81.7 | % | ||||
Estimated 2010 Distributable Cash Flow | 15.1 | % | 84.9 | % | ||||
Total Enterprise Value at Market Price | 26.6 | % | 73.4 | % | ||||
Total Enterprise Value at Exchange Ratio | 25.6 | % | 74.4 | % | ||||
Adjusted Asset Value | 25.6 | % | 74.4 | % | ||||
Estimated 2008 EBITDA | 21.6 | % | 78.4 | % | ||||
Estimated 2009 EBITDA | 20.9 | % | 79.1 | % | ||||
Estimated 2010 EBITDA | 17.8 | % | 82.2 | % |
* | Excludes potential closing costs and synergies resulting from the proposed transaction. |
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Target | Acquiror | Month and Year Announced | ||
Quintana Maritime Limited | Excel Maritime Carriers Ltd. | February 2008 | ||
Chembulk Tankers LLC | PT Berlian Laju Tanker Tbk | October 2007 | ||
UN Ro-Ro Management Inc | Kohlberg Kravis Roberts & Co | October 2007 | ||
MC Shipping Inc. | Bear Stearns Merchant Banking | July 2007 | ||
OMI Corp | Teekay Shipping/TORM | April 2007 | ||
Maritrans Inc. | Overseas Shipholding Group, Inc. | September 2006 | ||
Songa Shipholding AS | Eitzen Chemical ASA | August 2006 | ||
Delmas | CMA CGM SA | September 2005 | ||
CP Ships Ltd | TUI AG | August 2005 | ||
Koninklijke P&O Nedlloyd NV | AP Moller Maersk A/S | May 2005 | ||
Seabulk International, Inc. | Seacor Holdings, Inc. | March 2005 | ||
Navios Corporation | International Shipping Enterprises, Inc. | February 2005 | ||
Stelmar Shipping Ltd | Overseas Shipholding Group, Inc. | December 2004 |
Transaction | Price/ | |||||||
Value/ | Adjusted | |||||||
LTM EBITDA | NAV | |||||||
Mean | 8.8 | x | 106.9 | % | ||||
Median | 7.7 | x | 106.2 | % | ||||
High | 13.8 | x | 115.4 | % | ||||
Low | 5.6 | x | 92.0 | % |
Premium/(Discount) to Target | ||||||||
1 Day Prior | 4 Weeks Prior | |||||||
Mean | 19.8 | % | 19.4 | % | ||||
Median | 17.1 | % | 18.3 | % | ||||
High | 101.5 | % | 90.7 | % | ||||
Low | (66.7 | )% | (87.9 | )% |
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Acquiror/Surviving Entity | Target | |
Triarc Companies, Inc. | Wendy’s International Inc. | |
Thermo Electron Corp. | Fisher Scientific International Inc. | |
Viisage Technology Inc. | Identix Inc. | |
HealthTronics Inc. | Prime Medical Services, Inc. |
Implied Premium/(Discount) | ||||||||
to Acquiror | ||||||||
1 Day Prior | 4 Weeks Prior | |||||||
Mean | (7.7 | )% | (10.2 | )% | ||||
Median | (6.0 | )% | (7.2 | )% | ||||
High | (3.4 | )% | (4.3 | )% | ||||
Low | (15.6 | )% | (22.3 | )% |
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• | the contracted time charter revenues of General Maritime and Arlington of approximately $247 million for 2009, | |
• | estimated direct vessel operating expenses of approximately $86 million for 2009, which represents General Maritime’s 2008 direct vessel operating expense budget plus five percent and Arlington’s fixed direct vessel operating expenses for 2009, | |
• | estimated cash general and administrative expenses of approximately $25 million for 2009, which represents Arlington’s and General Maritime’s 2009 budget for such expenses minus $7.5 million in cost reductions expected from the proposed transaction, | |
• | estimated net interest expense of approximately $51 million for 2009, and | |
• | estimated capital expenditures for drydocking of approximately $15 million for 2009, |
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• | a fleet utilization rate of 96% minus scheduled drydocking days; | |
• | $230 million of Arlington indebtedness expected to be outstanding following the consummation of the proposed transaction bearing interest at 6.2325% per annum; and | |
• | $761 million of General Maritime indebtedness expected to be outstanding following the consummation of the proposed transaction bearing interest at 5.0125% per annum. |
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• | General Maritime will pay a non-refundable upfront fee in an amount equal to 0.10% of the amount of each lender’s commitment for each lender who executes the amended credit agreement, which fee shall be earned by, and payable, to each of the commitment parties on the closing date of the proposed transaction; | |
• | the definition of the term “EBITDA,” as used in the financial covenants, will be revised to give pro forma effect to the proposed transaction; | |
• | the applicable margin will be increased to 100 basis points without any other adjustments; | |
• | New General Maritime will provide a guarantee and will pledge its equity interest in General Maritime; | |
• | the covenants in the amended credit agreement will generally apply to New General Maritime and all of its subsidiaries (including General Maritime, Arlington and their respective subsidiaries); | |
• | all financial covenants in the amended credit agreement will be tested with respect to New General Maritime and its subsidiaries on a consolidated basis; | |
• | the shareholder payments covenant will apply to dividends and other distributions, including stock buy-backs, in respect of shares of New General Maritime common stock, and will permit General Maritime, as a subsidiary of New General Maritime, to pay dividends to New General Maritime; | |
• | the portion of the dividend covenant that currently allows General Maritime to pay dividends at a rate of up to $0.50 per common share per quarter will allow New General Maritime to pay dividends on shares of its common stock at up to the same rate; | |
• | the portion of the dividend covenant that currently allows General Maritime to pay additional dividends, including stock buy-backs, in an aggregate amount not to exceed the sum of $150 million plus 50% of cumulative net excess cash flow after February 16, 2007 will allow New General Maritime to pay such additional dividends in an aggregate amount not to exceed the sum of $150 million plus 50% of cumulative net excess cash flow after January 1, 2007; and | |
• | certain representations and warranties will be revised to reflect changes, including the structure of the resulting entities, following the consummation of the proposed transaction. |
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• | General Maritime shareholders will not recognize any gain or loss on the exchange of General Maritime common stock for New General Maritime common stock in the General Maritime merger (except for gain or loss with respect to cash received in lieu of fractional shares); | |
• | the aggregate tax basis of New General Maritime common stock received by a General Maritime shareholder, including any fractional share of New General Maritime common stock deemed received, pursuant to the General Maritime merger, will equal such General Maritime shareholder’s aggregate tax basis in the General Maritime common stock surrendered in exchange; | |
• | the holding period of New General Maritime common stock received by a General Maritime shareholder, including any fractional share of New General Maritime common stock deemed received, pursuant to the General Maritime merger, will include the holding period of the General Maritime common stock surrendered in exchange; | |
• | a General Maritime shareholder who receives cash in lieu of a fractional share of New General Maritime common stock pursuant to the General Maritime merger will be treated as having received that cash in exchange for such fractional share and (i) if such shareholder is a U.S. Holder, generally will recognize capital gain or loss on the deemed exchange in an amount equal to the difference between the amount of cash received and the basis of the General Maritime stock allocable to such fractional share; and (ii) if such shareholder is aNon-U.S. Holder, will not be subject to U.S. income or withholding tax except as set forth below under the section captioned “Ownership of New General Maritime Common Stock —Non-U.S. Holders”; and | |
• | no income, gain or loss will be recognized by General Maritime, Arlington, or New General Maritime as a result of the transfer to General Maritime shareholders of New General Maritime common stock pursuant to the General Maritime merger. |
• | Arlington shareholders will not recognize any gain or loss on the exchange of Arlington common shares for New General Maritime common stock in the Arlington amalgamation (except for gain or loss with respect to cash received in lieu of fractional shares); | |
• | the aggregate tax basis of New General Maritime common stock received by an Arlington shareholder, including any fractional share of New General Maritime common stock deemed received, pursuant to the Arlington amalgamation, will equal such Arlington shareholder’s aggregate tax basis in the Arlington common shares surrendered in exchange; | |
• | the holding period of New General Maritime common stock received by an Arlington shareholder, including any fractional share of New General Maritime common stock deemed received, pursuant to the Arlington amalgamation, will include the holding period of the Arlington common shares surrendered in exchange; | |
• | an Arlington shareholder who receives cash in lieu of a fractional share of New General Maritime common stock pursuant to the General Maritime merger will be treated as having received that cash in exchange for such fractional share and (i) if such shareholder is a U.S. Holder, generally will recognize capital gain or loss on the deemed exchange in an amount equal to the difference between the amount of cash received and the basis of the Arlington shares allocable to such fractional share; and (ii) if such shareholder is a |
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Non-U.S. Holder, will not be subject to U.S. income or withholding tax except as set forth below under the section captioned “Ownership of New General Maritime CommonStock — Non-U.S. Holders”; and |
• | no income, gain or loss will be recognized by General Maritime, Arlington, or New General Maritime as a result of the transfer to Arlington shareholders of New General Maritime common stock pursuant to the Arlington amalgamation. |
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• | 75% or more of its gross income in a taxable year consists of “passive income” (generally including dividends, interest, gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business, as defined in applicable Treasury regulations); or | |
• | at least 50% of its assets in a taxable year (averaged over the year and generally determined based upon value) produce or are held for the production of passive income. |
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• | the gain is effectively connected income (and, if a treaty applies, the gain is attributable to a permanent establishment maintained by theNon-U.S. Holder in the United States); or | |
• | theNon-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and certain other conditions are met. |
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• | fail to provide us with an accurate taxpayer identification number; | |
• | are notified by the IRS that you have failed to report all interest or dividends required to be shown on your federal income tax returns; or | |
• | fail to comply with applicable certification requirements. |
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(1) | it is organized in a qualified foreign country, which is one that grants an “equivalent exemption” from tax to corporations organized in the United States in respect of each category of shipping income for which exemption is being claimed under Section 883, and to which we refer as the “Country of Organization Test”; and |
(a) | more than 50% of the value of its stock is beneficially owned, directly or indirectly, by qualified shareholders, which includes individuals who are “residents” of a qualified foreign country, to which we refer as the “50% Ownership Test”; |
(b) | its stock is “primarily and regularly traded on an established securities market” in a qualified foreign country or in the United States, to which we refer as the “Publicly Traded Test”; or |
(c) | it is a “controlled foreign corporation” and it satisfies an ownership test to which, collectively, we refer as the “CFC Test.” |
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• | New General Maritime has, or is considered to have, a fixed place of business in the United States involved in the earning of U.S. source shipping income; and | |
• | substantially all of New General Maritime’s U.S. source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States. |
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• | each person, group or entity known to General Maritime to beneficially own more than 5% of our stock; | |
• | each of General Maritime’s directors; | |
• | each of the following executive officers, who are sometimes referred to as the named executive officers: General Maritime’s Chairman, Chief Executive Officer and President; the Chief Executive Officer of General Maritime’s tanker operating subsidiary, General Maritime Management LLC; General Maritime’s Executive Vice President and Chief Financial Officer; General Maritime’s Executive Vice President, Chief Administrative Officer, Treasurer and Secretary; and the Senior Vice President, Head of Commercial Department of General Maritime Management LLC; and | |
• | all of General Maritime’s current directors and named executive officers as a group. |
Amount of | Percentage of | |||||||
Common Stock | Common Stock | |||||||
Name and Address of Beneficial Owner(1) | Beneficially Owned | Outstanding(2) | ||||||
Peter C. Georgiopoulos | 3,985,701 | (3) | 12.7 | % | ||||
John P. Tavlarios | 319,481 | (4) | 1.0 | % | ||||
Jeffrey D. Pribor | 89,387 | (5) | * | |||||
John C. Georgiopoulos | 134,693 | (6) | * | |||||
Peter S. Bell | 40,193 | (7) | * | |||||
William J. Crabtree | 14,525 | (8) | * | |||||
Rex W. Harrington | 18,350 | (8) | * | |||||
John O. Hatab | 10,100 | (9) | * | |||||
Peter S. Shaerf | 17,100 | (10) | * | |||||
FMR LLC(11) | 4,534,800 | 14.5 | % | |||||
NFJ Investment Group LP(12) | 1,985,200 | 6.3 | % | |||||
All current directors and named executive officers as a group (9 persons) | 4,629,530 | 14.8 | % |
* | Less than 1% of the outstanding shares of common stock. | |
(1) | Unless otherwise indicated the business address of each beneficial owner identified isc/o General Maritime Corporation, 299 Park Avenue, Second Floor, New York, New York 10171. |
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(2) | Based on 31,323,758 shares outstanding as of October 30, 2008. | |
(3) | Includes 500,000 restricted shares of General Maritime common stock granted on November 26, 2002, which will vest on November 26, 2009; 150,000 restricted shares of General Maritime common stock granted on February 9, 2005, which will vest on November 16, 2014; 350,000 restricted shares of General Maritime common stock granted on April 6, 2005, which will vest on December 31, 2014; 250,000 restricted shares of General Maritime common stock granted on December 21, 2005, which will vest on November 15, 2015; 150,000 restricted shares of General Maritime common stock granted on December 18, 2006, which will vest on November 15, 2016; 77,908 restricted shares of General Maritime common stock granted on April 2, 2007, which will vest on November 15, 2016; and 240,000 restricted shares of General Maritime common stock granted on December 21, 2007, which will vest on November 15, 2017. The foregoing grants are subject to accelerated vesting under certain circumstances set forth in the relevant grant agreement. Also includes 2,267,793 shares pledged as security for personal bank loans. | |
(4) | Includes 125,000 restricted shares of General Maritime common stock granted on November 26, 2002, which will vest on November 26, 2009; 50,000 restricted shares of General Maritime common stock granted on February 9, 2005, which will vest in five equal installments commencing on November 16, 2005 and on each of the four anniversaries thereafter; 50,000 restricted shares of General Maritime common stock granted on December 21, 2005, which will vest in five equal installments commencing on November 15, 2006 and on each of the four anniversaries thereafter; 30,000 restricted shares of General Maritime common stock granted on December 18, 2006, which will vest in five equal installments commencing on November 15, 2007 and on each of the four anniversaries thereafter; 15,581 restricted shares of General Maritime common stock granted on April 2, 2007, which will vest in equal installments on the first five anniversaries of November 15, 2006; and 48,000 restricted shares of General Maritime common stock granted on December 21, 2007, which will vest in equal installments on the first five anniversaries of November 15, 2007. The foregoing grants are subject to accelerated vesting under certain circumstances set forth in the relevant grant agreement. | |
(5) | Includes 10,000 restricted shares of General Maritime common stock granted on February 9, 2005, which will vest in five equal installments commencing on November 16, 2005 and on each of the four anniversaries thereafter; 18,000 restricted shares of General Maritime common stock granted on December 21, 2005, which will vest in five equal installments commencing on November 15, 2006 and on each of the four anniversaries thereafter; 20,000 restricted shares of General Maritime common stock granted on December 18, 2006, which will vest in five equal installments commencing on November 15, 2007 and on each of the four anniversaries thereafter; 10,387 restricted shares of General Maritime common stock granted on April 2, 2007, which will vest in equal installments on the first five anniversaries of November 15, 2006; and 30,000 restricted shares of General Maritime common stock granted on December 21, 2007, which will vest in equal installments on the first five anniversaries of November 15, 2007. The foregoing grants are subject to accelerated vesting under certain circumstances set forth in the grant agreement. | |
(6) | Includes 10,000 restricted shares of General Maritime common stock granted on February 9, 2005, which will vest in five equal installments commencing on November 16, 2005 and on each of the four anniversaries thereafter; 15,000 restricted shares of General Maritime common stock granted on December 21, 2005, which will vest in five equal installments commencing on November 15, 2006 and on each of the four anniversaries thereafter; and 10,000 restricted shares of General Maritime common stock granted on December 18, 2006, which will vest in five equal installments commencing on November 15, 2007 and on each of the four anniversaries thereafter; 5,193 restricted shares of General Maritime common stock granted on April 2, 2007, which will vest in equal installments on the first five anniversaries of November 15, 2006. The foregoing grants are subject to accelerated vesting under certain circumstances set forth in the relevant grant agreement. | |
(7) | Includes 10,000 restricted shares of General Maritime common stock granted on December 21, 2005, which will vest in five equal installments commencing on November 15, 2006 and on each of the four anniversaries thereafter; 10,000 restricted shares of General Maritime common stock granted on December 18, 2006, which will vest in five equal installments commencing on November 15, 2007 and |
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on each of the four anniversaries thereafter; 5,193 restricted shares of General Maritime common stock granted on April 2, 2007, which will vest in equal installments on the first five anniversaries of November 15, 2006; and 15,000 restricted shares of General Maritime common stock granted on December 21, 2007, which will vest in equal installments on the first five anniversaries of November 15, 2007. The foregoing grants are subject to accelerated vesting under certain circumstances set forth in the grant agreement. | ||
(8) | In accordance with SEC rules, this number includes 1,250 shares of General Maritime common stock that may be acquired pursuant to stock options that are or will become exercisable within 60 days. Includes 3,250 restricted shares of General Maritime common stock granted on May 14, 2008, which will generally vest on the earlier of May 14, 2009 and the date of the 2009 Annual Meeting of General Maritime Shareholders. The foregoing grants are subject to accelerated vesting under certain circumstances set forth in the relevant grant agreement. | |
(9) | Includes 3,250 restricted shares of General Maritime common stock granted on May 14, 2008, which will generally vest on the earlier of May 14, 2009 and the date of the 2009 Annual Meeting of General Maritime Shareholders. | |
(10) | In accordance with SEC rules, this number includes 2,500 shares of General Maritime common stock that may be acquired pursuant to stock options that are or will become exercisable within 60 days. Includes 3,250 restricted shares of General Maritime common stock granted on May 14, 2008, which will generally vest on the earlier of May 14, 2009 and the date of the 2009 Annual Meeting of General Maritime Shareholders. The foregoing grants are subject to accelerated vesting under certain circumstances set forth in the relevant grant agreement. | |
(11) | Information regarding share ownership was obtained from the Schedule 13G/A filed jointly on February 14, 2008 by FMR LLC and Mr. Edward Johnson III, each of whose address is 82 Devonshire Street, Boston, Massachusetts 02109. Fidelity Management & Research Company (“Fidelity”), a wholly-owned subsidiary of FMR LLC and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 4,328,800 shares or 13.82% of the outstanding General Maritime common stock as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. The ownership of one investment company, Fidelity Leveraged Co Stock Fund, amounted to 2,849,200 shares or 9.1% of General Maritime common stock. Fidelity Leveraged Co Stock Fund has its principal business office at 82 Devonshire Street, Boston, Massachusetts 02109. Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, and the funds each has sole power to dispose of the 4,328,800 shares owned by the Funds. Members of the family of Edward C. Johnson 3d, Chairman of FMR LLC, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Edward C. Johnson 3d, Chairman of FMR LLC, has the sole power to vote or direct the voting of the shares owned directly by the Fidelity Funds, which power resides with the Funds’ Boards of Trustees. Fidelity carries out the voting of the shares under written guidelines established by the Funds’ Boards of Trustees. Pyramis Global Advisors Trust Company (“PGATC”), 53 State Street, Boston, Massachusetts, 02109, an indirect wholly-owned subsidiary of FMR LLC and a bank as defined in Section 3(a)(6) of the Securities Exchange Act of 1934, is the beneficial owner of 206,000 shares or 0.66% of General Maritime common stock as a result of its serving as investment manager of institutional accounts owning such shares. Edward C. Johnson 3d and FMR LLC, through its control of Pyramis Global Advisors Trust Company, each has sole dispositive power over 206,000 shares and sole power to vote or to direct the voting of 206,000 shares of General Maritime common stock owned by the institutional accounts managed by PGATC as reported above. | |
(12) | Information regarding share ownership was obtained from the Schedule 13G/A filed on April 16, 2008 by NFJ Investment Group L.P., whose address is 2100 Ross Avenue, Suite 700, Dallas, TX 75201. NFJ |
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Investment Group L.P. is an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, as amended. The securities reported herein are held by certain investment advisory clients or discretionary accounts of which NFJ is the investment advisor. Investment advisory contracts grant to NFJ all voting and/or investment power of the securities held by such clients or in such counts and, as a result, NFJ may be deemed to be the beneficial owner of such securities within the meaning ofRule 13d-3 under the Act. |
Percentage of | ||||||||
Amount of Common | Common | |||||||
Shares Beneficially | Shares | |||||||
Name and Address of Beneficial Owner(1) | Owned(2) | Outstanding | ||||||
Stena and Concordia entities and related persons(3) | 2,787,772 | 18.0 | ||||||
Wellington Management Company, LLP(4) | 1,688,285 | 10.9 | ||||||
Bank of America Corporation(5) | 1,608,708 | 10.4 | ||||||
NB Holdings Corporation(6) | 1,608,708 | 10.4 | ||||||
U.S. Trust Corporation(7) | 1,135,732 | 7.3 | ||||||
Michael K. Drayton | 1,985 | * | ||||||
E. Grant Gibbons | 0 | * | ||||||
Stephen O. Jaeger | 3,000 | * | ||||||
Arthur L. Regan(8) | 3,000 | * | ||||||
Edward Terino | 3,000 | * | ||||||
All current directors and executive officers as a group (4 persons) | 7,985 | * |
* | Represents less than 1% of Arlington’s outstanding common shares. | |
(1) | Unless otherwise indicated, the address of each beneficial owner listed isc/o Arlington Tankers Ltd., First Floor, The Hayward Building, 22 Bermudiana Road, Hamilton HM 11, Bermuda. | |
(2) | The number of common shares beneficially owned by each person is determined under rules promulgated by the SEC. For each person, the “Amount of Shares Beneficially Owned” column may include common shares attributable to the person because of that person’s voting or investment power or other relationship. Unless otherwise indicated, each person in the table has sole voting and investment power over the shares listed. The inclusion in the table of any shares, however, does not constitute an admission of beneficial ownership of those shares by the named shareholder. | |
(3) | The shares listed were initially purchased by Stena Finance AB, an wholly-owned subsidiary of Stena AB, a Swedish company, and subsequently transferred to Stena (Switzerland) AG, a Swiss company, which is also an wholly-owned subsidiary of Stena AB. Based on the Schedule 13G filed by Stena (Switzerland) AG on May 12, 2008, the total amount of securities owned following the transactions reported includes 1,252,988 shares held by Stena (Switzerland) AG. Approximately 51% of the outstanding capital stock of Stena AB is beneficially owned by Dan Sten Olsson, approximately 24.5% is beneficially owned by Mr. Olsson’s sister, Madeleine Olsson Eriksson, and approximately 24.5% is beneficially owned by Mr. Olsson’s brother, Stefan Sten Olsson. Each reporting person disclaims beneficial ownership of such shares except to the extent of its pecuniary interest therein as defined inRule 16a-1(a)(2)(i) under the Securities and Exchange Act of 1934, as amended. The total amount of securities owned following the transactions reported includes 767,392 shares held by each of CM V-Max I Ltd and CM V-Max II Ltd. |
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CM V-Max I Ltd and CM V-Max II Ltd are Bermuda companies and indirect wholly-owned subsidiaries of Concordia Maritime AB. Approximately 52% of the outstanding capital stock of Concordia Maritime AB (representing approximately 73% of the voting rights) is indirectly beneficially owned by Stena Sessan AB, a Swedish company, and the remaining 48% is publicly traded on the Stockholm Stock Exchange. Approximately 33.33% of the outstanding capital stock of Stena Sessan AB is beneficially owned by Stefan Sten Olsson, approximately 16.66% is beneficially owned by Dan Sten Olsson, approximately 16.66% is beneficially owned by Madeleine Olsson Eriksson, and the remaining 33.33% is beneficially owned equally by children of Dan Sten Olsson and Madeleine Olsson Eriksson. All of the information in this footnote is based on the Form 4 filed by Stena (Switzerland) AG (on behalf of each of the holders referenced by this footnote) on November 19, 2007. The address of the business office of each of Dan Sten Olsson, Madeleine Olsson Eriksson, Stefan Sten Olsson, Stena, Stena Sessan and Concordia is Masthuggskajen, SE-405 19 Gothenburg, Sweden. The address of the business office of each of Stena Switzerland is Bahnhofplatz, CH-6300 Zug, Switzerland. The address of the business office of each ofV-Max I and V-Max II isc/o Codan Services Limited, Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. | ||
(4) | Based on the Schedule 13G filed by Wellington Management Company, LLP on February 14, 2008. The Schedule 13G states that Wellington has shared voting power over 908,185 of Arlington’s common shares and shared dispositive power over 1,688,285 of Arlington’s common shares. The address for Wellington Management Company LLP is 75 State Street Boston, MA 02109. | |
(5) | Based on the Schedule 13G filed by Bank of America Corporation, NB Holdings Corporation, Bank of America N.A., United States Trust Company, N.A., Banc of America Securities Holdings Corporation, Banc of America Securities LLC, Columbia Management Group, LLC and Columbia Management Advisors, LLC on February 11, 2008. The Schedule 13G states that Bank of America has shared voting power over 1,536,208 of Arlington’s common shares and shared dispositive power over 1,608,708 of Arlington’s common shares. The address for Bank of America is 100 North Tryon Street, Floor 25, Bank of America Corporate Center, Charlotte, NC 28255. | |
(6) | Based on the Schedule 13G filed by Bank of America Corporation, NB Holdings Corporation, Bank of America N.A., United States Trust Company, N.A., Banc of America Securities Holdings Corporation, Banc of America Securities LLC, Columbia Management Group, LLC and Columbia Management Advisors, LLC on February 11, 2008. The Schedule 13G states that Bank of America has shared voting power over 1,536,208 of Arlington’s common shares and shared dispositive power over 1,608,708 of Arlington’s common shares. The address for Bank of America is 100 North Tryon Street, Floor 25, Bank of America Corporate Center, Charlotte, NC 28255. | |
(7) | Based on the Schedule 13G filed by Bank of America Corporation, NB Holdings Corporation, Bank of America N.A., United States Trust Company, N.A., Banc of America Securities Holdings Corporation, Banc of America Securities LLC, Columbia Management Group, LLC and Columbia Management Advisors, LLC on February 11, 2008. The Schedule 13G states that U.S. Trust has sole voting power over 1,135,712 of Arlington’s common shares, and sole dispositive power over 1,135,712 of Arlington’s common shares. The address of US Trust is 100 North Tryon Street, Floor 25, Bank of America Corporate Center, Charlotte, NC 28255. | |
(8) | Mr. Regan resigned as President and Co-Chief Executive Officer effective August 17, 2007. |
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• | General Maritime Common Stock. At the effective time of the General Maritime merger, each share of General Maritime common stock outstanding immediately prior to the effective time of the General Maritime merger (other than shares owned by General Maritime as treasury stock, shares owned by any subsidiary of General Maritime, and shares owned by Arlington, any subsidiary of Arlington, Galileo Holding Corporation, merger sub or amalgamation sub, in each case immediately prior to the effective time of the General Maritime merger) will be automatically converted into the right to receive 1.34 shares of New General Maritime common stock, other than shares of General Maritime common stock held by a holder who has delivered a written objection to the proposed corporate action and a demand for payment of such shares in accordance with Sections 100 and 101 of the MIBCA, and has not voted in favor of the adoption of the merger agreement, until such time as such holder fails to |
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perfect or effectively withdraws or otherwise loses such holder’s right to payment under Sections 100 and 101 of the MIBCA. |
• | Unvested Stock. At the effective time of the General Maritime merger, any shares of General Maritime common stock issued with respect to any unvested shares of General Maritime common stock awarded to employees, directors or consultants pursuant to any of General Maritime’s plans or arrangements and outstanding immediately prior to the effective time of the General Maritime merger will be converted into New General Maritime common stock and remain subject to the same terms, restrictions and vesting schedule as in effect immediately prior to the effective time of the General Maritime merger, except to the extent by their terms such unvested shares of General Maritime common stock vest at the effective time of the General Maritime merger. | |
• | Treatment of General Maritime Stock Plans. At the effective time of the General Maritime merger, each outstanding option to purchase General Maritime common stock and all stock option plans or other stock or equity-related plans of General Maritime will be assumed by New General Maritime and will become an option to acquire, on the same terms and conditions as were applicable under the General Maritime stock option immediately prior to the General Maritime merger, the same number of shares of New General Maritime as the holder of the General Maritime stock option would have been entitled to receive pursuant to the General Maritime merger had the holder exercised the option in full immediately prior to the effective time of the General Maritime merger, at a price per share equal to the quotient of: |
• | the aggregate exercise price for the shares of General Maritime common stock purchasable pursuant to such General Maritime stock option immediately prior to the effective time of the General Maritime merger, divided by | |
• | the aggregate number of shares of New General Maritime stock deemed purchasable pursuant to such General Maritime stock option. |
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• | organization, standing, corporate power and authority, execution and delivery, no conflict, necessary consents, approvals, orders and authorizations of governmental entities relating to the merger agreement and related matters; | |
• | capital structure; | |
• | subsidiaries; | |
• | SEC filings, financial statements and information provided; | |
• | absence of undisclosed liabilities; | |
• | absence of certain changes or events; | |
• | filing of tax returns, payment of taxes and other tax matters; | |
• | agreements, contracts and commitments; | |
• | litigation; | |
• | environmental matters; | |
• | employee benefit plans; | |
• | compliance with laws; | |
• | permits; | |
• | employees; | |
• | insurance; | |
• | vessels; | |
• | absence of existing discussions; | |
• | opinion of financial advisor; |
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• | rights agreement; | |
• | brokers; | |
• | controls and procedures, certifications and other matters relating to the Sarbanes-Oxley Act of 2002; | |
• | real property; | |
• | personal property; | |
• | intellectual property; and | |
• | certain business practices. |
• | declaring, setting aside or paying any dividends in respect of any capital stock, other than quarterly dividends made in the ordinary course of business and dividends and distributions by any subsidiary of General Maritime to its parent; | |
• | splitting, combining or reclassifying any of its capital stock or issuing or authorizing the issuance of any other securities; | |
• | purchasing, redeeming or otherwise acquiring any shares of its capital stock or any rights, warrants or options to acquire any such shares other than in connection with the forfeiture or exercise of any stock option, restricted stock, restricted stock units, restricted stock awards or similar awards under the General Maritime’s Amended and Restated 2001 Stock Incentive Plan, as amended; | |
• | except in connection with any “permitted equity issuance,” as that term is defined below, issuing or selling shares of capital stock (other than the issuance of shares of General Maritime common stock upon the exercise of General Maritime stock options outstanding on the date of the merger agreement), and other than rights under the General Maritime rights plan; | |
• | except as or in connection with any permitted transaction, amending its organizational documents; | |
• | except for any permitted transaction, acquiring any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or entity or division thereof or any assets outside of the ordinary course of business; | |
• | except in the ordinary course of business or as or in connection with any permitted transaction, selling or disposing of any properties or assets of General Maritime or any of its subsidiaries; | |
• | except as or in connection with any permitted transaction or as permitted under the merger agreement, entering into an agreement with respect to any change of control proposal, or any acquisition or |
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disposition of all or substantially all of the assets or securities of General Maritime or any of its subsidiaries; |
• | incurring any indebtedness for borrowed money, or guaranteeing the indebtedness of another person, in each case other than (i) indebtedness or guarantees outstanding on the date of the merger agreement, (ii) as or in connection with any permitted transaction and (iii) indebtedness incurred as a result of any payoff or refinancing of Arlington’s credit facility; | |
• | making any changes in accounting methods, principles or practices; | |
• | except as or in connection with any permitted transaction or otherwise in the ordinary course of business, amending or accelerating the payment, right to payment or vesting of any outstanding options or restricted stock awards; | |
• | making or rescinding any tax election, settling or compromising any tax liability or amending any tax return; or | |
• | as to General Maritime only, and not its subsidiaries, liquidating, dissolving or reorganizing or adopting a plan of complete or partial liquidation, dissolution or reorganization. |
• | (i) merging, amalgamating or consolidating with, or purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or entity or division thereof or (ii) incurring any indebtedness for borrowed money, or guaranteeing the indebtedness of another person, in each case other than indebtedness or guarantees outstanding on the date of the merger agreement, as or in connection with any permitted transaction, and indebtedness incurred as a result of any payoff or refinancing of Arlington’s credit facility; | |
• | selling, disposing or transferring of any assets material to General Maritime and its subsidiaries; | |
• | purchasing or constructing any vessel, or entering into of any agreement for the purchase or construction of any vessel; or | |
• | selling or otherwise disposing of any vessel, or entering into any agreement for the sale or disposal of any General Maritime vessel. |
• | the issuance of equity securities by subsidiaries of General Maritime solely to General Maritime or other subsidiaries of General Maritime; | |
• | the issuance by General Maritime of equity securities in transactions approved by the General Maritime board in exchange for cash or assets at a price per share which the General Maritime board determines in its good faith judgment is no less than 95% of the General Maritime adjusted net assets value per share, which means the sum of |
• | the appraised value of the General Maritime vessel, as it may be reduced for any then existing charters, charter options or other similar contractual arrangements relating to the General Maritime vessels, plus | |
• | General Maritime’s cash and cash equivalents at such time, minus |
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• | outstanding General Maritime indebtedness at such time, divided by the total number of shares of General Maritime common stock then outstanding; and |
• | the grant of compensatory awards by General Maritime under General Maritime’s Amended and Restated 2001 Stock Incentive Plan, as amended, in the ordinary course of business, to a new director or, on or after December 15, 2008, in amounts determined by the compensation committee of the General Maritime board in its good faith judgment. |
• | declaring, setting aside or paying any dividends in respect of any capital stock, other than quarterly dividends made in the ordinary course of business and dividends and distributions by any subsidiary of Arlington to its parent; | |
• | splitting, combining or reclassifying any of its capital stock or issuing or authorizing the issuance of any other securities; | |
• | purchasing, redeeming or otherwise acquiring any shares of its capital stock or any rights, warrants or options to acquire any such shares; | |
• | issuing or selling shares of capital stock other than the issuance of rights under the Arlington rights plan; | |
• | amending its organizational documents; | |
• | except for purchases in the ordinary course of business, acquiring any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or entity or division thereof or any assets outside of the ordinary course of business; | |
• | except in the ordinary course of business, selling or disposing of any properties or assets of Arlington or any of its subsidiaries; | |
• | whether or not in the ordinary course of business, selling, disposing of or otherwise transferring any assets material to Arlington and its subsidiaries, taken as a whole; | |
• | approving or implementing any shareholders rights plan or altering or further amending the Arlington rights plan or rights; | |
• | entering into an agreement with respect to any acquisition proposal, or any acquisition or disposition of all or substantially all of the assets or securities of Arlington or any of its subsidiaries; | |
• | incurring or suffering to exist any indebtedness for borrowed money other than the borrowings under the Loan Agreement, dated December 12, 2005, between Arlington and The Royal Bank of Scotland in the ordinary course of business or guaranteeing any such indebtedness of another person; issuing, selling or amending any debt securities or warrants or other rights to acquire any debt securities of Arlington or any of its subsidiaries, guaranteeing any debt securities of another person, entering into any “keep well” or other agreement to maintain any financial statement condition of another person; making any loans, advances (other than routine advances to employees of Arlington in the ordinary |
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course of business) or capital contributions to, or investment in, any other person, other than Arlington or any of its subsidiaries; or entering into any hedging agreement or other financial agreement; |
• | making any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $50,000 in the aggregate for Arlington and its subsidiaries; | |
• | making any changes in accounting methods, principles or practices; | |
• | entering into any material agreement or modifying or amending in any manner which is adverse to Arlington or any of its subsidiaries or terminating any material agreement to which Arlington or any of its subsidiaries is part, or knowingly waiving, releasing or assigning any material rights or claims; | |
• | entering into any agreement with a term extending more than one year that is not terminable by Arlington or any of its subsidiaries without penalty or payment upon less than 30 days prior written notice; | |
• | taking any action with respect to, approving, entering into, terminating or amending any employment, severance or similar agreement or benefit plan for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement; increasing in any material respect the compensation or fringe benefits of, or paying any bonus to, any director, officer, employee or consultant (except for annual increases of the salaries of non-officer employees in the ordinary course of business); amending or accelerating the payment, right to payment or vesting of any compensation or benefits, including any outstanding stock appreciation rights; paying any material benefit not provided for as of the date of the merger agreement under any benefit plan, other than the payment of wages and salaries in the ordinary course of business; granting any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan or removing existing restrictions in any benefit plans or agreements or awards made thereunder; or taking any action other than in the ordinary course of business to fund the payment of compensation or benefits under any employee plan, agreement or benefit plan; | |
• | making or rescinding any tax election, settling or compromising any tax liability or amending any tax return; | |
• | initiating, compromising or settling any material litigation or arbitration proceeding; | |
• | purchasing or constructing any vessel or entering into any agreement for the purchase or construction of any vessel; selling or otherwise disposing of any Arlington vessel; entering into any agreement for the bareboat or time charter-out of any Arlington vessel that |
• | has a term in excess of six months, | |
• | provides for one or more renewal or extension options or | |
• | provides for any purchase option, |
• | entering into any new line of business; or | |
• | liquidating, dissolving or reorganizing or adopting a plan of complete or partial liquidation, dissolution or reorganization. |
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• | the shareholders of General Maritime and of Arlington shall each have approved the merger agreement and the proposed transaction; | |
• | the waiting period under the HSR Act shall have expired or been terminated. The FTC and the Antitrust Division have granted early termination of the waiting period under the HSR Act. See the section captioned “Regulatory Matters” on page 111; | |
• | all authorizations or consents of any governmental entity in connection with the consummation of the proposed transaction shall have been obtained; | |
• | the registration statement of which this joint proxy statement/prospectus forms a part shall have become effective under the Securities Act and no stop order suspending the effectiveness of the registration statement shall have been issued and no proceeding for that purpose shall have been issued or threatened in writing by the SEC or its staff; | |
• | no governmental entity shall have enacted or issued any order, executive, stay, decree, temporary restraining order, judgment or injunction which has the effect of making either the General Maritime merger or the Arlington amalgamation illegal or otherwise prohibiting consummation of the transactions contemplated by the merger agreement; | |
• | the shares of New General Maritime common stock to be issued in the proposed transaction shall have been approved for listing on the NYSE; and | |
• | there shall not be pending before any governmental entity any actions, suits, claims or proceedings relating to the proposed transaction, or otherwise against the parties to the merger agreement or any of their respective subsidiaries, which have a reasonable likelihood of a judgment against such parties or any of their respective subsidiaries and with respect to which judgments adverse to such parties or any of their respective subsidiaries have had or are reasonably likely to have in the aggregate a material adverse effect on either General Maritime or Arlington. |
• | the representations and warranties of Arlington set forth in the merger agreement shall be true and correct as of the date of the merger agreement and as of the closing date of the proposed transaction as though made on and as of the closing date, except: to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date; for changes contemplated by the merger agreement; and where the failure to be true and correct has not had, and is not reasonably likely to have, individually or in the aggregate, a material adverse effect on Arlington; | |
• | Arlington shall have performed in all material respects all obligations required to be performed by it under the merger agreement on or prior to the closing date; | |
• | General Maritime shall have received an opinion of Kramer Levin Naftalis & Frankel LLP, counsel to General Maritime, to the effect that each of the General Maritime merger and the Arlington amalgamation will be treated for United States federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code; | |
• | the General Maritime lender consent shall be in full force and effect; and | |
• | the appraisal rights in connection with the General Maritime merger and the Arlington amalgamation shall not have been properly perfected pursuant to the Companies Act by holders of more than 30% of the outstanding Arlington common shares, or pursuant to the MIBCA of more than 10% of the outstanding shares of General Maritime common stock. |
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• | the representations and warranties of General Maritime set forth in the merger agreement shall be true and correct as of the date of the merger agreement and as of the closing date of the proposed transaction as though made on and as of the closing date, except: to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date; for changes contemplated by the merger agreement; and where the failure to be true and correct has not had, and is not reasonably likely to have, individually or in the aggregate, a material adverse effect on General Maritime; | |
• | General Maritime shall have performed in all material respects all obligations required to be performed by it under the merger agreement on or prior to the closing date; and | |
• | Arlington shall have received an opinion of Wilmer Cutler Pickering Hale and Dorr LLP, counsel to Arlington, to the effect that each of the General Maritime merger and the Arlington amalgamation will be treated for United States federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code. |
• | changes, events, circumstances or developments in prevailing economic or market conditions in the United States or any other jurisdiction in which such party and its subsidiaries have substantial business operations; | |
• | changes, events, circumstances or developments occurring after the date of the merger agreement, affecting the industries in which such company operates generally; | |
• | changes announced or effective after the date of the merger agreement in U.S. GAAP applicable to either party and its subsidiaries; | |
• | changes announced or effective after the date of the merger agreement in laws, rules or regulations of general applicability or interpretations thereof by any governmental entity; | |
• | the announcement and pendency of the merger agreement and the transactions contemplated thereby; or | |
• | any outbreak of major hostilities in which the United States is involved or any act of terrorism within the United States or directed against its facilities or citizens wherever located; and provided, further, that in no event will a change in the trading prices or volume of such party’s capital stock, by itself, be considered a material adverse effect. |
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• | solicit, initiate, encourage or take any other action designed to, or which would reasonably be expected to, facilitate, any inquiries or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to or result in, any change of control proposal; or | |
• | enter into, continue or otherwise participate in any discussions or negotiations regarding, furnish to any person any information with respect to, assist or participate in any effort or attempt by any person with respect to, or otherwise cooperate in any way with respect to, any proposal or offer that constitutes, or would be reasonably expected to lead to or result in, any change of control proposal. |
• | furnish information with respect to General Maritime to the person making the change of control proposal pursuant to a customary confidentiality agreement; and | |
• | participate in discussions or negotiations with the person making the change of control proposal and its representatives regarding such change of control proposal. |
• | withdraw, qualify or modify, in a manner adverse to Arlington, or publicly propose to withdraw, qualify or modify, in a manner adverse to Arlington, its approval or recommendation to its shareholders with respect to the merger agreement and the proposed transaction; | |
• | cause or permit General Maritime to enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership or similar agreement constituting or relating to any change of control proposal that is not a permitted transaction; | |
• | approve or recommend, or propose to approve or recommend, any General Maritime acquisition agreement; or | |
• | cause or permit General Maritime to terminate the merger agreement in connection with entering into a General Maritime acquisition agreement. |
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• | solicit, initiate, encourage or take any other action designed to, or which would reasonably be expected to, facilitate, any inquiries or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to or result in, any acquisition proposal; or | |
• | enter into, continue or otherwise participate in any discussions or negotiations with respect to, furnish to any person any information with respect to, assist or participate in any effort or attempt by any person with respect to, or otherwise cooperate in any way with respect to, any proposal or offer that constitutes, or would be reasonably expected to lead to or result in, any acquisition proposal. |
• | furnish information with respect to Arlington to the person making the acquisition proposal and its representatives pursuant to a customary confidentiality agreement not less restrictive of the other party than Arlington’s confidentiality agreement with General Maritime; and | |
• | participate in discussions or negotiations with the person and its representatives regarding such acquisition proposal. |
• | withdraw, qualify or modify, in a manner adverse to General Maritime, or publicly propose to withdraw, qualify or modify, in a manner adverse to General Maritime, its approval or recommendation to its shareholders; | |
• | cause or permit Arlington to enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement or similar agreement constituting or relating to any acquisition proposal; or | |
• | approve or recommend, or propose to approve or recommend, any acquisition proposal. |
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• | any inquiry, proposal or offer for, relating to, or that would reasonably be expected to lead to or result in a merger, consolidation, dissolution, tender offer, recapitalization, share exchange or other business combination involving Arlington or any of its subsidiaries, | |
• | any proposal for the issuance by Arlington or any of its subsidiaries of over 10% of its equity securities, or | |
• | any proposal to acquire or purchase in any manner, directly or indirectly, in one transaction or a series of transactions, over 10% of the equity securities or consolidated total assets of Arlington or any resulting parent entity of Arlington, in each case other than the transactions contemplated by the merger agreement. |
• | any merger or any acquisition of any capital stock of General Maritime or any similar transaction involving General Maritime, as a result of which the shareholders of General Maritime immediately prior to the consummation of such transaction would own less than 50% of the voting stock of General Maritime or, if General Maritime is not the surviving corporation, the surviving corporation immediately following the consummation of such transaction, or | |
• | the sale of all or substantially all of the assets of General Maritime. |
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• | the parties mutually agree in writing; | |
• | the completion of the proposed transaction does not occur on or before March 31, 2009 (except that a party may not terminate under this provision if its willful breach of a representation or warranty contained in the merger agreement or whose other action or failure to fulfill any obligation under the merger agreement was a principal cause of, or resulted in, such delay); | |
• | any restraint which has the effect of making the proposed transaction illegal or otherwise prohibiting consummation of the proposed transaction or any adverse proceeding results in a judgment that will have become nonappealable and final; or | |
• | at either the General Maritime special meeting or the Arlington special general meeting, the shareholders do not approve the merger agreement and the proposed transaction. |
• | (i) the Arlington board withdraws or modifies, in a manner materially adverse to General Maritime, its approval or recommendation of the merger agreement and the transactions contemplated thereby; (ii) the Arlington board fails to give its recommendation to the approval of the merger agreement and the transactions contemplated thereby in this joint proxy statement/prospectus or has withdrawn or modified in a manner materially adverse to General Maritime its recommendation of the merger agreement and the transactions contemplated thereby; (iii) after receipt by Arlington of an acquisition proposal that is public information, General Maritime has requested in writing that the Arlington board reconfirm its recommendation of the merger agreement and the transactions contemplated thereby and the Arlington board has failed to do so within five business days after its receipt of General Maritime’s request; (iv) the Arlington board has approved or recommended, or has proposed publicly to approve or recommend, to the shareholders of Arlington an acquisition proposal; (v) a tender offer or exchange offer for outstanding Arlington common shares is commenced (other than by General Maritime or an affiliate of General Maritime), and the Arlington board has recommended that the shareholders of Arlington tender their shares in such tender or exchange offer or the Arlington board fails to recommend against acceptance of such offer; or (vi) Arlington has breached its non-solicitation obligations or its obligation to call its shareholder meeting; | |
• | Arlington has breached its representations, warranties, covenants or agreements in the merger agreement, which breach would cause the conditions to closing relating to the accuracy of representations and warranties or compliance with covenants and agreement, as applicable, not to be satisfied, and which breaches have not been cured within 30 days after notice from General Maritime, or all of the conditions of the merger agreement have been satisfied and Arlington breaches its obligations to consummate the transactions contemplated thereby; | |
• | the General Maritime board, to the extent required by its fiduciary obligations, determines in good faith after consultation with outside counsel to enter into a General Maritime acquisition agreement; or | |
• | if appraisal rights in connection with the General Maritime merger and the Arlington amalgamation have been properly perfected pursuant to the Companies Act by holders of more than 30% of the outstanding Arlington common shares; or pursuant to the MIBCA by holders of more than 10% of the outstanding shares of General Maritime common stock. |
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• | (i) the General Maritime board withdraws or modifies, in a manner materially adverse to Arlington, its approval or recommendation of the merger agreement and the transactions contemplated thereby; (ii) the General Maritime board fails to give its recommendation to the approval of the merger agreement and the transactions contemplated thereby in this joint proxy statement/prospectus or has withdrawn or modified in a manner materially adverse to Arlington its recommendation of the merger agreement and the transactions contemplated thereby; or (iii) after receipt by General Maritime of a change of control proposal that is public information, Arlington has requested in writing that the General Maritime board reconfirm its recommendation of the merger agreement and the transactions contemplated thereby and the General Maritime board has failed to do so within five business days after its receipt of Arlington’s request; | |
• | General Maritime has breached its non-solicitation obligations or its obligation to call its shareholder meeting; | |
• | General Maritime has breached its representations, warranties, covenants or agreements in the merger agreement, which breach would cause the conditions to closing relating to the accuracy of representations and warranties or compliance with covenants and agreement, as applicable, not to be satisfied, and which breaches have not been cured within 30 days after notice from Arlington, or all of the conditions of the merger agreement have been satisfied and General Maritime breaches its obligations to consummate the transactions contemplated thereby; or | |
• | if the General Maritime board has approved or recommended, or has proposed publicly to approve or recommend, to the shareholders of General Maritime a change of control proposal but General Maritime has not terminated the merger agreement. |
• | any such termination will not relieve any party from liability for any willful or material breach of the merger agreement; and | |
• | the provisions regarding confidentiality, the effect of termination, fees and expenses and miscellaneous matters of the merger agreement and the confidentiality agreement between Arlington and General Maritime will remain in full force and effect and survive any termination of the merger agreement. |
• | by Arlington or General Maritime as a result of the failure of General Maritime to obtain the approval of General Maritime shareholders, if at or prior to the time of such failure, there has been announced a change of control proposal which has not have been absolutely and unconditionally withdrawn and abandoned, and within 12 months after such termination, General Maritime consummates the transactions contemplated by such change of control proposal; | |
• | by Arlington, if: the General Maritime board withdraws or modifies, in a manner materially adverse to Arlington, its approval or recommendation of the merger agreement and the transactions contemplated thereby; the General Maritime board fails to give its recommendation to the approval of the merger agreement and the transactions contemplated thereby in this joint proxy statement/prospectus or has have withdrawn or modified in a manner materially adverse to Arlington its recommendation of the |
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merger agreement and the transactions contemplated thereby; or after receipt by General Maritime of a change of control proposal that is public information, Arlington has requested in writing that the General Maritime board reconfirm its recommendation of the merger agreement and the transactions contemplated thereby and the General Maritime board has failed to do so within five business days after its receipt of Arlington’s request; |
• | by General Maritime, if General Maritime has breached its non-solicitation obligations or its obligation to call its shareholder meeting; or | |
• | by General Maritime if General Maritime enters into an acquisition agreement. |
• | by Arlington or General Maritime as a result of the failure of Arlington to obtain the approval of Arlington shareholders, if either: at or prior to the time of such failure, there has been announced an acquisition proposal which has not been absolutely and unconditionally withdrawn and abandoned, and within 12 months after such termination, Arlington consummates any acquisition proposal; or within 12 months after such termination, Arlington consummates any acquisition proposal, provided, that for purposes of this provision, the term acquisition proposal will have the meaning described above, except that all references to 10% therein will be deemed to be references to 50%; or | |
• | by General Maritime, if: the Arlington board withdraws or modifies, in a manner materially adverse to General Maritime, its approval or recommendation of the merger agreement and the transactions contemplated thereby; the Arlington board fails to give its recommendation to the approval of the merger agreement and the transactions contemplated thereby in this joint proxy statement/prospectus or has withdrawn or modified in a manner materially adverse to General Maritime its recommendation of the merger agreement and the transactions contemplated thereby; after receipt by Arlington of an acquisition proposal that is public information, General Maritime has requested in writing that the Arlington board reconfirm its recommendation of the merger agreement and the transactions contemplated thereby and the Arlington board has failed to do so within five business days after its receipt of General Maritime’s request; the Arlington board has approved or recommended to the shareholders of Arlington an acquisition proposal; a tender offer or exchange offer for outstanding Arlington common shares is commenced (other than by General Maritime or an affiliate of General Maritime), and the Arlington board has recommended that the shareholders of Arlington tender their shares in such tender or exchange offer or the Arlington board fails to recommend against acceptance of such offer; or Arlington has breached its non-solicitation obligations or its obligation to call its shareholders meeting. |
• | by Arlington or General Maritime as a result of the failure of the closing of the proposed transaction to occur on or before March 31, 2009, if the reason the closing has not occurred is due to General Maritime having breached its representations, warranties, covenants or agreements in the merger agreement or not having performed in all material respects all obligations required to be performed by it under the merger agreement on or prior to the closing date; |
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• | by Arlington or General Maritime if at the General Maritime shareholder meeting, the General Maritime shareholders do not approve the merger agreement and the proposed transaction; | |
• | by Arlington if: the General Maritime board withdraws or modifies, in a manner materially adverse to Arlington, its approval or recommendation of the merger agreement and the transactions contemplated thereby; the General Maritime board fails to give its recommendation to the approval of the merger agreement and the transactions contemplated thereby in this joint proxy statement/prospectus or has withdrawn or modified in a manner materially adverse to Arlington its recommendation of the merger agreement and the transactions contemplated thereby; or after receipt by General Maritime of a change of control proposal that is public information, Arlington has requested in writing that the General Maritime board reconfirm its recommendation of the merger agreement and the transactions contemplated thereby and the General Maritime board has failed to do so within five business days after its receipt of Arlington’s request; | |
• | by Arlington if General Maritime has breached its non-solicitation obligations or its obligation to call its shareholders meeting; | |
• | by Arlington if: General Maritime has breached its representations, warranties, covenants or agreements in the merger agreement, which breach would cause the conditions to closing relating to the accuracy of representations and warranties or compliance with covenants and agreement, as applicable, not to be satisfied, and which breaches have not been cured within 30 days after notice from Arlington; or if all of the conditions of the merger agreement have been satisfied and General Maritime breaches its obligations to consummate the transactions contemplated thereby; or | |
• | by Arlington if the General Maritime board has approved or recommended, or has proposed publicly to approve or recommend, to the shareholders of General Maritime a change of control proposal but General Maritime has not terminated the merger agreement. |
• | by Arlington or General Maritime as a result of the failure of the closing of the proposed transaction to occur on or before March 31, 2009, if the reason the closing has not occurred is due to Arlington having breached its representations, warranties, covenants or agreements in the merger agreement or not having performed in all material respects all obligations required to be performed by it under the merger agreement on or prior to the closing date; | |
• | by Arlington or General Maritime if at the Arlington shareholder meeting, Arlington shareholders do not approve the merger agreement and the proposed transaction; | |
• | by General Maritime if: the Arlington board withdraws or modifies, in a manner materially adverse to General Maritime, its approval or recommendation of the merger agreement and the transactions contemplated thereby; the Arlington board fails to give its recommendation to the approval of the merger agreement and the transactions contemplated thereby in this joint proxy statement/prospectus or has withdrawn or modified in a manner materially adverse to General Maritime its recommendation of the merger agreement and the transactions contemplated thereby; after receipt by Arlington of an acquisition proposal that is public information, General Maritime has requested in writing that the Arlington board reconfirm its recommendation of the merger agreement and the transactions contemplated thereby and the Arlington board has failed to do so within five business days after its receipt of General Maritime’s request; the Arlington board has approved or recommended, to the shareholders of Arlington an acquisition proposal; a tender offer or exchange offer for outstanding Arlington common shares is commenced (other than by General Maritime or an affiliate of General Maritime), and the Arlington board has recommended that the shareholders of Arlington tender their shares in such tender or exchange offer or the Arlington board fails to recommend against acceptance of such offer; or Arlington has breached its non-solicitation obligations or its obligation to call its shareholders meeting; |
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• | by General Maritime if: Arlington has breached its representations, warranties, covenants or agreements in the merger agreement, which breach would cause the conditions to closing relating to the accuracy of representations and warranties or compliance with covenants and agreement, as applicable, not to be satisfied, and which breaches have not been cured within 30 days after notice from General Maritime; or all of the conditions of the merger agreement have been satisfied and Arlington breaches its obligations to consummate the transactions contemplated thereby; or | |
• | by General Maritime if appraisal rights in connection with the Arlington amalgamation and the General Maritime merger have been properly perfected pursuant to the Companies Act by holders of more than 30% of the outstanding Arlington common shares, or pursuant to the MIBCA by holders of more than 10% of the outstanding shares of General Maritime common stock. |
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• | extend the time for the performance of any of the obligations or other acts of the other parties to the merger agreement; | |
• | waive any inaccuracies in the representations and warranties contained in the merger agreement or any document delivered pursuant thereto; or | |
• | waive compliance with any of the agreements or conditions contained in the merger agreement. |
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General Maritime Common Stock | Arlington Common Shares | |||||||||||||||||||||||
High | Low | Dividends | High | Low | Dividends | |||||||||||||||||||
2006 | ||||||||||||||||||||||||
First Quarter | $ | 38.97 | $ | 32.81 | $ | 2.00 | $ | 23.90 | $ | 21.46 | $ | 0.53 | ||||||||||||
Second Quarter | 37.33 | 30.34 | 1.43 | 23.45 | 20.35 | 0.57 | ||||||||||||||||||
Third Quarter | 40.64 | 34.02 | 0.66 | 23.48 | 21.41 | 0.59 | ||||||||||||||||||
Fourth Quarter | 38.07 | 34.28 | 0.71 | 24.24 | 21.92 | 0.60 | ||||||||||||||||||
2007 | ||||||||||||||||||||||||
First Quarter | 45.33 | 27.73 | 15.62 | 24.15 | 21.96 | 0.57 | ||||||||||||||||||
Second Quarter | 33.82 | 26.40 | 0.50 | 29.90 | 23.43 | 0.58 | ||||||||||||||||||
Third Quarter | 29.77 | 22.24 | 0.50 | 29.90 | 21.69 | 0.59 | ||||||||||||||||||
Fourth Quarter | 28.87 | 22.59 | 0.50 | 26.00 | 19.72 | 0.59 | ||||||||||||||||||
2008 | ||||||||||||||||||||||||
First Quarter | 27.77 | 19.81 | 0.50 | 23.00 | 18.93 | 0.56 | ||||||||||||||||||
Second Quarter | 31.00 | 23.19 | 0.50 | 24.32 | 21.09 | 0.56 | ||||||||||||||||||
Third Quarter | 27.50 | 18.22 | 0.50 | 23.04 | 14.16 | 0.56 | ||||||||||||||||||
Fourth Quarter (through October 30, 2008) | 19.55 | 8.72 | 0.50 | 15.04 | 6.20 | 0.57 |
General Maritime | Arlington | |||||||
Common Stock | Common Stock | |||||||
(NYSE) | (NYSE) | |||||||
30 consecutive trading day average ending August 5, 2008 | $ | 25.41 | $ | 21.72 | ||||
60 consecutive trading day average ending August 5, 2008 | $ | 26.69 | $ | 22.61 | ||||
90 consecutive trading day average ending August 5, 2008 | $ | 26.21 | $ | 22.70 |
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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
• | merger sub will be merged with and into General Maritime, which we refer to in this joint proxystatement/prospectus as the General Maritime merger, with General Maritime continuing as the surviving corporation; and | |
• | amalgamation sub will amalgamate with Arlington, which we refer to in this joint proxystatement/prospectus as the Arlington amalgamation. |
(1) | The entity issuing the shares, Galileo Holding Corporation (“New General Maritime”), will be renamed “General Maritime Corporation.” | |
(2) | General Maritime’s current board will maintain six of seven positions on the post merger board. As a result of the merger, New General Maritime will include one new member, designated by Arlington and reasonably acceptable to General Maritime. | |
(3) | General Maritime’s senior management group will continue in similar leadership roles of the post-merger company. |
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Unaudited Pro | ||||||||||||||||
Historical | Forma Condensed | |||||||||||||||
General | Arlington | �� | Pro Forma | Combined Balance | ||||||||||||
Maritime | Tankers Ltd. | Adjustments | Sheet | |||||||||||||
(Note 2) | ||||||||||||||||
ASSETS | ||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||
Cash and cash equivalents | $ | 42,709 | $ | 12,375 | $ | (7,000 | )A(2) | $ | 18,084 | |||||||
(30,000 | )D | |||||||||||||||
Due from charterers, net | 9,951 | 908 | 10,859 | |||||||||||||
Prepaid expenses and other current assets | 27,670 | 134 | 27,804 | |||||||||||||
Derivative asset | 67 | — | 67 | |||||||||||||
Total current assets | 80,397 | 13,417 | (37,000 | ) | 56,814 | |||||||||||
NONCURRENT ASSETS: | ||||||||||||||||
Vessels, net of accumulated depreciation | 728,250 | 321,720 | 279,700 | A(3) | 1,329,670 | |||||||||||
Vessel deposits | 13,708 | — | 13,708 | |||||||||||||
Other fixed assets, net | 11,963 | — | 11,963 | |||||||||||||
Deferred drydock costs, net | 19,756 | — | 19,756 | |||||||||||||
Deferred financing costs, net | 4,678 | 598 | (56 | )A(6) | 5,220 | |||||||||||
Derivative asset | 4,737 | — | 4,737 | |||||||||||||
Other assets | 694 | — | 3,792 | A(5) | 4,486 | |||||||||||
Goodwill | 1,245 | — | 1,245 | |||||||||||||
Total noncurrent assets, net | 785,031 | 322,318 | 283,436 | 1,390,785 | ||||||||||||
TOTAL ASSETS | $ | 865,428 | $ | 335,735 | $ | 246,436 | $ | 1,447,599 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||
Accounts payable and accrued expenses | $ | 20,232 | $ | 1,063 | $ | 21,295 | ||||||||||
Deferred voyage revenue | 11,455 | — | 11,455 | |||||||||||||
Derivative liability | 9,119 | — | 9,119 | |||||||||||||
Total current liabilities | 40,806 | 1,063 | — | 41,869 | ||||||||||||
NONCURRENT LIABILITIES: | ||||||||||||||||
Long-term debt | 611,000 | 229,500 | 840,500 | |||||||||||||
Other noncurrent liabilities | 3,087 | — | 3,087 | |||||||||||||
Fair market value of time charters acquired | — | — | 92,757 | A(4) | 92,757 | |||||||||||
Derivative liabilities | 858 | 7,283 | 8,141 | |||||||||||||
Total noncurrent liabilities | 614,945 | 236,783 | 92,757 | 944,485 | ||||||||||||
TOTAL LIABILITIES | 655,751 | 237,846 | 92,757 | 986,354 | ||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||||
SHAREHOLDERS’ EQUITY: | ||||||||||||||||
Common stock | 314 | 155 | 107 | A(1) | 576 | |||||||||||
Paid-in capital | 207,217 | 97,734 | 183,572 | A(1) | 458,523 | |||||||||||
(30,000 | )D | |||||||||||||||
Retained Earnings | — | — | — | |||||||||||||
Accumulated other comprehensive income | 2,146 | — | 2,146 | |||||||||||||
Total shareholders’ equity | 209,677 | 97,889 | 175,679 | 461,245 | ||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 865,428 | $ | 335,735 | $ | 246,436 | $ | 1,447,599 | ||||||||
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Unaudited Pro | ||||||||||||||||
Forma Condensed | ||||||||||||||||
Historical | Combined | |||||||||||||||
General | Arlington | Pro Forma | Statement of | |||||||||||||
Maritime | Tankers Ltd. | Adjustments | Income | |||||||||||||
(Note 2) | ||||||||||||||||
VOYAGE REVENUES: | ||||||||||||||||
Voyage revenues | $ | 154,523 | $ | 34,996 | $ | 189,519 | ||||||||||
OPERATING EXPENSES: | ||||||||||||||||
Voyage expenses | 24,285 | — | 24,285 | |||||||||||||
Direct vessel expenses | 30,822 | 10,430 | (517 | )B | 40,735 | |||||||||||
General and administrative | 24,355 | 1,457 | 25,812 | |||||||||||||
Depreciation and amortization | 27,080 | 7,610 | 7,102 | C | 41,792 | |||||||||||
Loss on disposal of vessel equipment | 1,095 | 1,095 | ||||||||||||||
Total operating expenses | 107,637 | 19,497 | 6,585 | 133,719 | ||||||||||||
OPERATING INCOME | 46,886 | 15,499 | (6,585 | ) | 55,800 | |||||||||||
OTHER EXPENSE: | ||||||||||||||||
Interest income | 501 | 197 | 698 | |||||||||||||
Interest expense | (13,957 | ) | (6,829 | ) | (20,786 | ) | ||||||||||
Other expense | (15,560 | ) | 170 | (15,390 | ) | |||||||||||
Net other expense | (29,016 | ) | (6,462 | ) | — | (35,478 | ) | |||||||||
NET INCOME | $ | 17,870 | $ | 9,037 | $ | (6,585 | ) | $ | 20,322 | |||||||
Basic earnings per common share | $ | 0.62 | $ | 0.37 | ||||||||||||
Diluted earnings per common share | $ | 0.60 | $ | 0.37 | ||||||||||||
Weighted average shares outstanding(a) | ||||||||||||||||
Basic | 28,957,150 | 54,302,581 | ||||||||||||||
Diluted | 29,773,766 | 55,396,846 |
(a) | The pro forma weighted average shares outstanding has been calculated based on the weighted number of shares of common stock outstanding during the period, adjusted to give effect to shares issued in the transaction as if such shares had been issued at the beginning of the period presented. |
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Pro Forma Condensed | ||||||||||||||||
Historical | Combined | |||||||||||||||
General | Arlington | Pro Forma | Statement of | |||||||||||||
Maritime | Tankers Ltd. | Adjustments | Income | |||||||||||||
(Note 2) | ||||||||||||||||
VOYAGE REVENUES: | ||||||||||||||||
Voyage revenues | $ | 255,015 | $ | 70,199 | $ | 325,214 | ||||||||||
OPERATING EXPENSES: | ||||||||||||||||
Voyage expenses | 38,069 | — | 38,069 | |||||||||||||
Direct vessel expenses | 48,213 | 19,956 | (1,013 | )B | 67,156 | |||||||||||
General and administrative | 46,920 | 2,488 | 49,408 | |||||||||||||
Depreciation and amortization | 49,671 | 15,642 | 13,862 | C | 79,175 | |||||||||||
Loss on disposal of vessel equipment | 417 | — | 417 | |||||||||||||
Total operating expenses | 183,290 | 38,086 | 12,849 | 234,225 | ||||||||||||
OPERATING INCOME | 71,725 | 32,113 | (12,849 | ) | 90,989 | |||||||||||
OTHER EXPENSE: | ||||||||||||||||
Interest income | 2,482 | 828 | 3,310 | |||||||||||||
Interest expense | (25,541 | ) | (13,696 | ) | (39,237 | ) | ||||||||||
Other expense | (4,127 | ) | (7,538 | ) | (11,665 | ) | ||||||||||
Net other expense | (27,186 | ) | (20,406 | ) | — | (47,592 | ) | |||||||||
NET INCOME | $ | 44,539 | $ | 11,707 | $ | (12,849 | ) | $ | 43,397 | |||||||
Basic earnings per common share | $ | 1.46 | $ | 0.77 | ||||||||||||
Diluted earnings per common share | $ | 1.43 | $ | 0.76 | ||||||||||||
Weighted average shares outstanding(a) | ||||||||||||||||
Basic | 30,402,810 | �� | 56,239,765 | |||||||||||||
Diluted | 31,212,732 | 57,325,061 |
(a) | The pro forma weighted average shares outstanding has been calculated based on the weighted number of shares of common stock outstanding during the period, adjusted to give effect to shares issued in the transaction as if such shares had been issued at the beginning of the period presented. |
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Notes to Pro Forma Condensed Combines Financial Statements (Unaudited)
(Amounts expressed in thousands of United States Dollars — except for share and per share data,
unless otherwise stated)
Note 1 — | Description of transaction and basis of presentation: |
Note 2 — | Pro forma adjustments related to the Merger: |
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Shares outstanding of Arlington | 15,500,000 | |||
conversion factor | 1.34 | |||
Equivalent shares in General Maritime | 11,567,164 | |||
Average General Maritime closing share price* | $ | 24.34 | ||
$ | 281,568 | (1) | ||
Estimated transaction costs(2) | $ | 7,000 | ||
Cost of the Acquisition | $ | 288,568 | ||
Book value of net assets acquired | (97,889 | ) | ||
Excess of purchase price over net assets acquired | $ | 190,679 | ||
Allocation of excess of purchase price over net assets acquired: | ||||
Vessels(3) | $ | 279,700 | ||
Unfavorable long-term time charters(4) | (92,757 | ) | ||
Advances for future drydocks(5) | 3,792 | |||
Deferred financing costs(6) | (56 | ) | ||
$ | 190,679 | |||
* | Represents the average closing stock price of General Maritime between August 4, 2008 and August 8, 2008, which encompass the two business days before and after the proposed transaction announcement date of August 6, 2008. | |
(1) | Upon completion of the proposed transaction, New General Maritime will issue 41,973,836 shares of common stock in exchange for the 31,323,758 shares of General Maritime common stock currently outstanding (or 10,650,078 incremental shares). The resulting effect on the allocation of the equity issued by New General Maritime for the Arlington shares is as follows: |
Equity issued to effect merger | $ | 281,568 | ||
Less: Equity of Arlington acquired | (97,889 | ) | ||
Additional equity to be recognized | 183,679 | |||
Less: Par value of incremental shares issued by New Parent at $0.01 per share | (107 | ) | ||
Additional paid-in capital | $ | 183,572 | ||
(2) | These costs represent fees and costs incurred by General Maritime that are directly related to consummating the proposed transaction, which mainly refer to fees payable to investment bankers, attorneys, accountants, printing and filing costs. In total, General Maritime and Arlington expect to incur approximately $7 million and $10 million, respectively, in fees and costs associated with consummating the proposed transaction. | |
(3) | The amount indicates the estimated fair value of Arlington’s fleet, adjusted for the excess of fair value of net assets acquired over consideration paid. | |
(4) | The amount relates to the liability arising from the fair value of Arlington’s leases and time charter contracts (“charters assumed”) to be assumed by General Maritime upon consummation of the proposed transaction. Fair value is determined by reference to market data. The preliminary estimated amounts reflected as a liability in the unaudited pro forma condensed combined balance sheet is based on the difference between the current fair value of charters with similar characteristics as the charters assumed |
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and the net present value of future contractual cash flows from the charter contracts assumed. Such liabilities are amortized as an increase in revenue over the period of the charters assumed. Remaining contractual lives of the charters assumed range from 38 to 64 months. | ||
(5) | The amount relates to Arlington’s technical management contracts. Payments under these contracts represent prepayments for drydockings to be performed in the future. In addition, the amount includes an asset arising from the fair value of Arlington’s technical management agreement to be assumed by General Maritime upon consummation of the proposed transaction. Fair value is determined by reference to market data. The preliminary estimated amounts reflected as an asset in the unaudited pro forma condensed combined balance sheet is based on the difference between the current fair value of technical management agreements with similar characteristics as the technical management contracts assumed and the net present value of the future contractual cashflows from the technical management contracts assumed. Such assets are amortized as an increase in depreciation and amortization over the period of the technical management contracts assumed. The remaining contractual lives of the technical management contracts assumed range from 38 to 64 months. | |
(6) | The amount relates to the allocation of the excess fair value of net assets acquired over consideration paid to Arlington’s deferred financing costs. | |
B. | To record the portion of the technical management contract for drydockings, which under General Maritime’s accounting policy represents a prepaid asset until the date a vessel is drydocked. |
Six Months Ended | Year Ended | |||||||
June 30, | December 31, | |||||||
2008 | 2007 | |||||||
Arlington’s historical direct vessel expense | $ | 10,430 | $ | 19,956 | ||||
Arlington’s historical direct vessel expense excluding provision for drydock | 9,913 | 18,943 | ||||||
$ | 517 | $ | 1,013 | |||||
C. | To record increased depreciation of vessels based on preliminary assigned fair values of the vessels using Arlington’s remaining estimated average useful life of 19 years and the reversal of the depreciation on the vessels’ carrying values: |
Six Months Ended | Year Ended | |||||||
June 30, | December 31, | |||||||
2008 | 2007 | |||||||
Depreciation based on fair value of vessels | $ | 14,712 | $ | 29,504 | ||||
Historical depreciation of vessels | 7,610 | 15,642 | ||||||
$ | 7,102 | $ | 13,862 | |||||
D. | To record the $22 million of consideration for termination of Mr. Georgiopoulos’ employment arrangement and the guaranteed bonus of $8 million expected to be paid to Mr. Georgiopoulos pursuant to the executive transition plan. These amounts have been excluded from the pro forma condensed combined statements of income because such costs are nonrecurring and will not have a continuing impact on the combined company’s results of operations. |
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• | prior to the date of the transaction that resulted in the shareholder becoming an interested shareholder, the New General Maritime board approved the business combination or the transaction that resulted in the shareholder becoming an interested shareholder; | |
• | upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; | |
• | on or subsequent to the date of the transaction that resulted in the shareholder becoming an interested shareholder, the business combination is approved by the board and authorized at an annual or special meeting of shareholders by the affirmative vote of at least 662/3% of the outstanding voting stock that is not owned by the interested shareholder; or | |
• | the shareholder is Peter C. Georgiopoulos or an affiliate or associate thereof. |
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• | the classified board and director removal provisions; | |
• | the requirement that action by written consent of the shareholders be taken by unanimous written consent; | |
• | limitations on the power of New General Maritime shareholders to amend the amended and restated by-laws; | |
• | the limitation on business combinations between New General Maritime and interested shareholders; and | |
• | the provisions requiring the affirmative vote of the holders of not less than 80% of the New General Maritime shares entitled to vote in an election of directors to amend the foregoing provisions. |
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• | prior to the date of the transaction that resulted in the shareholder becoming an interested shareholder, the Arlington board approved either the business combination or the transaction that resulted in the shareholder becoming an interested shareholder; or | |
• | upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of Arlington’s issued and outstanding voting shares at the time the transaction commenced. |
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• | prior to the transaction, the New General Maritime board approves either the business combination or the transaction which resulted in the shareholder becoming an interested shareholder; | |
• | upon consummation of the transaction which resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting stock of New General Maritime outstanding at the time the transaction commenced (excluding those shares owned by directors and officers and employee stock); | |
• | at or subsequent to such time, the business combination is approved by the New General Maritime board and authorized at an annual or special meeting of shareholders by the affirmative vote of at least 662/3% of the outstanding voting stock that is not owned by the interested shareholder; or | |
• | the shareholder is Peter Georgiopoulos or an affiliate or associate thereof. |
• | A shareholder becomes an interested shareholder inadvertently and: |
• | as soon as practicable, sells enough shares to cease being an interested shareholder; and | |
• | would not, at any time within the prior three-year period, have been an interested shareholder but for the inadvertent acquisition of ownership; or |
• | the business combination is proposed prior to the consummation or abandonment of and subsequent to the earlier of the public announcement or the notice required hereunder of a proposed transaction which |
• | constitutes (A) a merger or consolidation of New General Maritime, (B) a sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets of the corporation or any subsidiary of the corporation having an aggregate market value equal to 50% or more of either that aggregate market value of all of the assets of New General Maritime or the aggregate market value of all the outstanding shares of New General Maritime, or (C) a proposed tender or exchange offer for 50% or more of the outstanding voting shares of the New General Maritime; |
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• | is with or by a person who either was not an interested shareholder during the previous three years or who became an interested shareholder with the approval of the New General Maritime board; and | |
• | is approved or not opposed by a majority of the members of the New General Maritime board then in office (but not less than one) who were directors prior to any person becoming an interested shareholder during the previous three years or were recommended for election or elected to succeed such directors by a majority of such directors. |
• | alters or abolishes any preferential right or any outstanding shares having preferences; | |
• | creates, alters, or abolishes any provision or right in respect to the redemption or any outstanding shares; | |
• | alters or abolishes any preemptive right of such holder to acquire shares or other securities; or | |
• | excludes or limits the right of such holder to vote on any matter, except as such right may be limited by the voting rights given to new shares then being authorized of any existing or new class. |
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• | any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favor, or in which he is acquitted, or in connection with any application under relevant Bermuda legislation in which relief from liability is granted to him by the court; and | |
• | any loss or liability resulting from negligence, default, breach of duty or breach of trust, save for fraud and dishonesty. Arlington’s amended bye-laws contain a provision whereby Arlington shareholders waive any claim or right of action that they have, both individually and on Arlington’s behalf, against any director or officer in relation to any action or failure to take action by such director or officer, except in respect of any fraud or dishonesty of such director or officer. Arlington’s amended bye-laws also indemnify Arlington’s directors and officers in respect of their actions and omissions, except in respect of their fraud or dishonesty. The indemnification provided in Arlington’s amended bye-laws is not exclusive of other indemnification rights to which a director or officer may be entitled, provided these rights do not extend to his or her fraud or dishonesty. |
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• | for any breach of the director’s duty of loyalty to the corporation or its shareholders; | |
• | for acts or omissions not undertaken in good faith or which involve intentional misconduct or a knowing violation of law; or | |
• | for any transaction from which the director derived an improper personal benefit. |
• | for any breach of such director’s duty of loyalty to the corporation or its shareholders; | |
• | for acts or omissions not undertaken in good faith or which involve intentional misconduct or a knowing violation of law; or | |
• | for any transaction from which such director derived an improper personal benefit. |
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• | the record date for determining shareholders entitled to notice of or to vote at the meeting will be at the close of business on the day next preceding the day on which notice is first given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; and | |
• | the record date for determining shareholders for any other purpose will be at the close of business on the day on which the New General Maritime board adopts the resolution relating thereto. |
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• | the name, age, and business address of each nominee proposed in such notice; | |
• | the principal occupation or employment of each such nominee; and | |
• | the number of shares of New General Maritime common stock which are beneficially owned by each such nominee. |
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• | the material facts as to his or her relationship or interest and as to the contract or transaction are known to the board or a committee, and the board or committee in good faith authorizes the contract or transaction by the vote of a majority of the disinterested directors, or, if the votes of the disinterested directors are insufficient to constitute an act of the board, by unanimous vote of the disinterested directors; | |
• | the material facts as to his or her relationship or interest and as to the shareholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the shareholders; or | |
• | the contract or transaction is fair as to New General Maritime when it is authorized, approved or ratified, by the New General Maritime board, a committee or the shareholders. |
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• | annual report onForm 10-K for the fiscal year ended December 31, 2007; | |
• | quarterly reports onForm 10-Q for the quarters ended March 31, 2008 and June 30, 2008; and | |
• | current reports onForm 8-K filed on April 1, 2008, May 29, 2008, June 13, 2008, July 3, 2008, July 9, 2008, August 6, 2008 (as amended on August 7, 2008), August 28, 2008, October 23, 2008 and October 27, 2008. |
• | annual report onForm 10-K for the fiscal year ended December 31, 2007; | |
• | amended annual report on Form10-K/A for the fiscal year ended December 31, 2007; | |
• | quarterly reports onForm 10-Q for the quarters ended March 31, 2008 and June 30, 2008; | |
• | amended quarterly reports on Form10-Q/A for the quarters ended March 31, 2008 and June 30, 2008; and | |
• | current reports onForm 8-K filed on April 23, 2008, June 30, 2008, August 6, 2008, August 28, 2008, September 30, 2008 and October 23, 2008. |
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Report of Independent Registered Public Accounting Firm | F-2 | |||
Consolidated Balance Sheet | F-3 | |||
Note to Consolidated Balance Sheet | F-4 |
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August 27, 2008
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As of | ||||
August 5, 2008 | ||||
Total assets | $ | — | ||
Liabilities and shareholders’ equity | ||||
Liabilities | $ | — | ||
Shareholders’ equity | ||||
Common stock, $0.01 par value per share; 100 shares issued and outstanding | 1 | |||
Subscriptions receivable | (1 | ) | ||
Total shareholders’ equity | — | |||
Total liabilities and shareholders’ equity | $ | — | ||
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1. | Nature of Operations |
2. | Basis of Presentation |
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by and among
Arlington Tankers Ltd.,
Galileo Holding Corporation,
Archer Amalgamation Limited,
Galileo Merger Corporation,
and
General Maritime Corporation
Dated as of August 5, 2008
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Page | ||||||
ARTICLE I FORMATION OF NEW PARENT AND MERGER SUBS; THE COMBINATIONS | A-8 | |||||
1.1 | Formation of New Parent and Merger Subs | A-8 | ||||
1.2 | Effective Time | A-9 | ||||
1.3 | Closing | A-9 | ||||
1.4 | Effects of the Combinations | A-10 | ||||
1.5 | Directors of the Surviving Entities | A-10 | ||||
1.6 | Actions of Archer and Galileo | A-10 | ||||
ARTICLE II CONVERSION OF SECURITIES | A-10 | |||||
2.1 | Conversion of Capital Stock | A-10 | ||||
2.2 | Exchange of Certificates | A-12 | ||||
2.3 | Galileo Stock Plans | A-14 | ||||
2.4 | Dissenting Shares | A-15 | ||||
ARTICLE III REPRESENTATIONS AND WARRANTIES OF GALILEO | A-16 | |||||
3.1 | Organization, Standing and Corporate Power | A-16 | ||||
3.2 | Capitalization | A-17 | ||||
3.3 | Subsidiaries | A-18 | ||||
3.4 | Authority; No Conflict; Required Filings and Consents | A-19 | ||||
3.5 | SEC Filings; Financial Statements; Information Provided | A-20 | ||||
3.6 | No Undisclosed Liabilities | A-21 | ||||
3.7 | Absence of Certain Changes or Events | A-21 | ||||
3.8 | Taxes | A-22 | ||||
3.9 | Agreements, Contracts and Commitments | A-23 | ||||
3.10 | Litigation | A-23 | ||||
3.11 | Environmental Matters | A-23 | ||||
3.12 | Employee Benefit Plans | A-24 | ||||
3.13 | Compliance With Laws | A-26 | ||||
3.14 | Permits | A-26 | ||||
3.15 | Employees | A-26 | ||||
3.16 | Insurance | A-26 | ||||
3.17 | Vessels | A-26 | ||||
3.18 | No Existing Discussions | A-27 | ||||
3.19 | Opinion of Financial Advisor | A-27 | ||||
3.20 | Rights Agreement | A-27 | ||||
3.21 | Brokers | A-27 | ||||
3.22 | Controls and Procedures, Certifications and Other Matters Relating to the Sarbanes-Oxley Act of 2002 | A-27 | ||||
3.23 | Real Property | A-28 | ||||
3.24 | Personal Property | A-28 | ||||
3.25 | Intellectual Property | A-28 | ||||
3.26 | Certain Business Practices | A-28 | ||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF ARCHER | A-29 | |||||
4.1 | Organization, Standing and Corporate Power | A-29 | ||||
4.2 | Capitalization | A-30 | ||||
4.3 | Subsidiaries | A-31 | ||||
4.4 | Authority; No Conflict; Required Filings and Consents | A-31 |
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Page | ||||||
4.5 | SEC Filings; Financial Statements; Information Provided | A-32 | ||||
4.6 | No Undisclosed Liabilities | A-33 | ||||
4.7 | Absence of Certain Changes or Events | A-33 | ||||
4.8 | Taxes | A-34 | ||||
4.9 | Agreements, Contracts and Commitments | A-35 | ||||
4.10 | Litigation | A-35 | ||||
4.11 | Environmental Matters | A-35 | ||||
4.12 | Employee Benefit Plans | A-36 | ||||
4.13 | Compliance With Laws | A-37 | ||||
4.14 | Permits | A-37 | ||||
4.15 | Employees | A-37 | ||||
4.16 | Insurance | A-37 | ||||
4.17 | Vessels | A-37 | ||||
4.18 | No Existing Discussions | A-38 | ||||
4.19 | Fairness Opinion | A-38 | ||||
4.20 | Rights Agreement | A-38 | ||||
4.21 | Brokers | A-38 | ||||
4.22 | Controls and Procedures, Certifications and Other Matters Relating to the Sarbanes-Oxley Act of 2002 | A-38 | ||||
4.23 | Real Property | A-39 | ||||
4.24 | Personal Property | A-39 | ||||
4.25 | Intellectual Property | A-39 | ||||
4.26 | Certain Business Practices | A-39 | ||||
ARTICLE V CONDUCT OF BUSINESS | A-40 | |||||
5.1 | Covenants of Galileo | A-40 | ||||
5.2 | Covenants of Archer | A-42 | ||||
5.3 | Confidentiality | A-44 | ||||
5.4 | Control of Other Party’s Business | A-44 | ||||
ARTICLE VI ADDITIONAL AGREEMENTS | A-44 | |||||
6.1 | No Solicitation | A-44 | ||||
6.2 | Joint Proxy Statement/Prospectus; Registration Statement | A-48 | ||||
6.3 | NYSE | A-48 | ||||
6.4 | Access to Information | A-49 | ||||
6.5 | Shareholders Meetings | A-49 | ||||
6.6 | Closing Efforts | A-50 | ||||
6.7 | Public Disclosure | A-51 | ||||
6.8 | Section 368(a) Reorganization | A-51 | ||||
6.9 | NYSE Listing | A-51 | ||||
6.10 | Shareholder Litigation | A-52 | ||||
6.11 | Dividends | A-52 | ||||
6.12 | Indemnification and Insurance | A-52 | ||||
6.13 | Notification of Certain Matters | A-54 | ||||
6.14 | Exemption from Liability Under Section 16(b) | A-54 | ||||
6.15 | Headquarters of New Parent | A-54 |
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Page | ||||||
6.16 | Employee Communications | A-54 | ||||
6.17 | Lenders’ Consents | A-54 | ||||
6.18 | Transfer Taxes | A-55 | ||||
6.19 | 8832 Election | A-55 | ||||
6.20 | Vessel Insurance | A-55 | ||||
ARTICLE VII CONDITIONS TO COMBINATIONS | A-55 | |||||
7.1 | Conditions to Each Party’s Obligation To Effect the Combinations | A-55 | ||||
7.2 | Additional Conditions to the Obligations of Archer | A-56 | ||||
7.3 | Additional Conditions to the Obligations of Galileo | A-56 | ||||
ARTICLE VIII TERMINATION AND AMENDMENT | A-57 | |||||
8.1 | Termination | A-57 | ||||
8.2 | Effect of Termination | A-59 | ||||
8.3 | Fees and Expenses | A-59 | ||||
8.4 | Amendment | A-60 | ||||
8.5 | Extension; Waiver | A-61 | ||||
ARTICLE IX MISCELLANEOUS | A-61 | |||||
9.1 | Nonsurvival of Representations and Warranties | A-61 | ||||
9.2 | Notices | A-61 | ||||
9.3 | Entire Agreement | A-62 | ||||
9.4 | No Third Party Beneficiaries | A-62 | ||||
9.5 | Assignment | A-62 | ||||
9.6 | Severability | A-62 | ||||
9.7 | Counterparts and Signature | A-62 | ||||
9.8 | Interpretation | A-62 | ||||
9.9 | Governing Law | A-63 | ||||
9.10 | Remedies | A-63 | ||||
9.11 | Submission to Jurisdiction | A-63 | ||||
9.12 | WAIVER OF JURY TRIAL | A-63 |
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Cross Reference | ||
Terms | in Agreement | |
Acquisition Proposal | Section 6.1(c)(i) | |
Adverse Proceeding | Section 7.1(g) | |
Affiliate | Section 3.2(d) | |
Agreement | Preamble | |
Amalgamated Company | Section 1.4(b) | |
Amalgamation Agreement | Section 1.2(c) | |
Amalgamation Certificate | Section 1.2(b) | |
Amalgamation Sub | Preamble | |
Amalgamation Sub Common Stock | Section 1.1(c) | |
Antitrust Laws | Section 6.6(b) | |
Antitrust Order | Section 6.6(b) | |
Archer | Preamble | |
Archer Amalgamation | Preamble | |
Archer Balance Sheet | Section 4.5(b) | |
Archer Board | Preamble | |
Archer Common Stock | Section 2.1(b)(ii) | |
Archer Credit Facility | Section 5.2(i) | |
Archer Director | Section 1.1(b) | |
Archer Disclosure Letter | Article IV | |
Archer Dissenting Shares | Section 2.4(b)(i) | |
Archer Employee Plans | Section 4.12(a) | |
Archer Exchange Ratio | Section 2.1(b)(iii) | |
Archer Filed SEC Documents | Article IV | |
Archer Financial Advisor | Section 4.19 | |
Archer Founder Stock | Section 4.2(a) | |
Archer Indemnified Parties | Section 6.12(a)(i) | |
Archer-Leased Real Property | Section 4.23(b) | |
Archer Lender Consent | Section 6.17(a) | |
Archer Maritime Guideline | Section 4.13 | |
Archer Material Adverse Effect | Section 4.1 | |
Archer Material Contracts | Section 4.9(a) | |
Archer Maximum Premium | Section 6.12(a)(iii) | |
Archer Meeting | Section 4.4(d) | |
Archer Permits | Section 4.14 | |
Archer Real Property Leases | Section 4.23(b) | |
Archer Rights | Section 4.2(b) | |
Archer Rights Plan | Section 4.2(b) | |
Archer Rights Plan Amendment | Section 4.20 | |
Archer Preferred Stock | Section 4.2(a) | |
Archer SEC Documents | Section 4.5(a) | |
Archer Shareholder Approval | Section 4.4(a) | |
Archer Vessel | Section 4.11(b) | |
Archer Voting Proposal | Section 4.4(a) | |
Articles of Merger | Section 1.2(a) | |
Bankruptcy and Equity Exception | Section 3.4(a) |
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Cross Reference | ||
Terms | in Agreement | |
BCA | Preamble | |
Certificates | Section 2.2(a) | |
Change of Control Proposal | Section 6.1(c)(ii) | |
Closing | Section 1.3 | |
Closing Date | Section 1.3 | |
Code | Preamble | |
Combinations | Preamble | |
Companies Act | Preamble | |
Confidentiality Agreement | Section 5.3 | |
Current Archer D&O Insurance | Section 6.12(a)(iii) | |
Current Galileo D&O Insurance | Section 6.12(b)(iii) | |
Effective Time | Section 1.2(c) | |
Employee Benefit Plan | Section 3.12(a)(i) | |
Environmental Laws | Section 3.11(b)(i) | |
ERISA | Section 3.12(a)(ii) | |
ERISA Affiliate | Section 3.12(a)(iii) | |
Exchange Act | Section 3.4(c) | |
Exchange Agent | Section 2.2(a) | |
Exchange Fund | Section 2.2(a) | |
GAAP | Section 3.5(b) | |
Galileo | Preamble | |
Galileo Acquisition Agreement | Section 6.1(b)(ii)(B) | |
Galileo Balance Sheet | Section 3.5(b) | |
Galileo Board | Preamble | |
Galileo Common Stock | Section 2.1(a)(ii) | |
Galileo Credit Facility | Section 6.17(b) | |
Galileo Disclosure Letter | Article III | |
Galileo Dissenting Shares | Section 2.4(a)(i) | |
Galileo Employee Plans | Section 3.12(a) | |
Galileo Exchange Ratio | Section 2.1(a)(iii) | |
Galileo Filed SEC Documents | Article III | |
Galileo Financial Advisor | Section 3.19 | |
Galileo Indemnified Parties | Section 6.12(b)(i) | |
Galileo-Leased Real Property | Section 3.23(b) | |
Galileo Lender Consent | Section 6.17(b) | |
Galileo Maritime Guideline | Section 3.13 | |
Galileo Material Adverse Effect | Section 3.1 | |
Galileo Material Contracts | Section 3.9(a) | |
Galileo Maximum Premium | Section 6.12(b)(iii) | |
Galileo Meeting | Section 3.4(d) | |
Galileo Merger | Preamble | |
Galileo Adjusted Net Asset Value Per Share | Section 5.1 | |
Galileo Permits | Section 3.14 | |
Galileo Preferred Stock | Section 3.2(a) | |
Galileo Real Property Leases | Section 3.23(b) | |
Galileo Restricted Shares | Section 3.2(b) | |
Galileo Rights | Section 3.2(d) |
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Cross Reference | ||
Terms | in Agreement | |
Galileo Rights Plan | Section 3.2(d) | |
Galileo Rights Plan Amendment | Section 3.20 | |
Galileo SEC Documents | Section 3.5(a) | |
Galileo Shareholder Approval | Section 3.4(a) | |
Galileo Stock Options | Section 2.3(a) | |
Galileo Stock Plans | Section 2.3(a) | |
Galileo Vessel | Section 3.11(b)(iv) | |
Galileo Voting Proposal | Section 3.4(a) | |
Governmental Entity | Section 3.4(c) | |
Hazardous Materials | Section 3.11(b)(ii) | |
HSR Act | Section 3.4(c) | |
Intellectual Property Rights | Section 3.25(a) | |
IRS | Section 3.12(b) | |
Joint Proxy Statement/Prospectus | Section 3.5(c) | |
Legal Provisions | Section 3.13 | |
Liens | Section 3.4(b) | |
Management Agreements | Section 4.16 | |
Manager | Section 4.16 | |
Merger Sub | Preamble | |
Merger Sub Common Stock | Section 1.1(c) | |
New Parent | Preamble | |
New Parent Common Stock | Section 1.1(a) | |
NYSE | Section 2.2(c) | |
Ordinary Course of Business | Section 3.3(c) | |
Outside Date | Section 8.1(b) | |
Permitted Equity Issuance | Section 5.1 | |
Permitted Transaction | Section 5.1 | |
Proposal | Section 6.1(c)(i) | |
Registration Statement | Section 3.5(c) | |
Regulation M-A Filing | Section 3.5(c) | |
Release | Section 3.11(b)(iii) | |
Representatives | Section 6.1(a)(i) | |
Restraints | Section 7.1(e) | |
SEC | Section 3.4(c) | |
SEC Documents | Article III | |
Securities Act | Section 3.2(d) | |
SOX | Section 3.5(a) | |
Specified Archer Time | Section 6.1(a)(i) | |
Specified Galileo Time | Section 6.1(b)(i) | |
Subsidiary | Section 3.3(a) | |
Superior Proposal | Section 6.1(c)(iii) | |
Surviving Corporation | Section 1.4(a) | |
Takeover Laws | Section 3.4(a) | |
Tax Returns | Section 3.8(a) | |
Taxes | Section 3.8(a) |
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c/o Arlington Tankers, LLC
191 Post Road West
Westport, CT 06880 USA
Attn: Edward Terino
Fax:203-221-2763
Attn: | John A. Burgess, Esq., |
299 Park Avenue
New York, NY 10171
Attn: Jeffery D. Pribor and John C. Georgiopoulos
Fax:212-763-5607
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1177 Avenue of the Americas
New York, NY 10036
Attn: Thomas E. Molner, Esq.
Fax:212-715-8000
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By: | /s/ Edward Terino |
Title: | Chief Executive Officer, President and |
By: | /s/ Jeffrey D. Pribor |
Title: | Executive Vice President and |
By: | /s/ John C. Georgiopoulos |
Title: | Chief Executive Officer |
By: | /s/ John C. Georgiopoulos |
Title: | Secretary |
By: | /s/ John C. Georgiopoulos |
Title: | Secretary |
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AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
GENERAL MARITIME CORPORATION
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AMENDED AND RESTATED
BY-LAWS OF
GENERAL MARITIME CORPORATION
ARTICLE I
SHAREHOLDERS
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UBS Securities LLC 299 Park Avenue New York, NY 10171 www.ubs.com |
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/s/ UBS SECURITIES LLC |
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/s/ Jefferies & Company, Inc. |
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THE MARSHALL ISLANDS — DISSENTERS’ RIGHTS
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your proxy card in the
envelope provided as soon
as possible.
n 00030030300000001000 7 | 121608 | |||
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. | o | |
FOR | AGAINST | ABSTAIN | ||||||||
1. | Approval and adoption of an agreement and plan of merger and amalgamation, dated as of August 5, 2008, by and among Arlington Tankers Ltd., General Maritime Corporation, Galileo Holding Corporation, Galileo Merger Corporation and Archer Amalgamation Limited. | o | o | o | ||||||
2. | Approval and adoption of an amalgamation agreement, dated as of August 5, 2008, by and among Arlington Tankers Ltd., Galileo Holding Corporation and Archer Amalgamation Limited. | o | o | o | ||||||
3. | Approval of any motion to adjourn or postpone the Arlington special general meeting to another time or place, if necessary, to solicit additional proxies if there are insufficient votes for each of the foregoing proposals at the time of the special general meeting. | o | o | o |
Please indicate if you plan to attend this meeting | o |
Signature of Shareholder | | Date: | | Signature of Shareholder | | Date: | |
Note: | Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. |
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