Business Context and Reporting Period
This Form 6-K filing, dated August 28, 2009, incorporates by reference the 2009 Proxy Statement of Teekay Tankers Ltd. (the "Company"), dated July 27, 2009. The document serves as notice for the 2009 Annual Meeting of Shareholders, scheduled for September 9, 2009, in Point Roberts, Washington. The primary business to be transacted is the election of six directors to the Board of Directors for a one-year term.
Key Financial Metrics and Governance Data
The filing focuses on corporate governance and shareholder information rather than operational financial results for the current period. Key data points include:
- Capital Structure: As of the record date (July 13, 2009), the Company had 19,500,000 shares of Class A common stock and 12,500,000 shares of Class B common stock outstanding.
- Voting Rights: Class A shares carry one vote per share. Class B shares generally carry five votes per share, but the aggregate voting power of Class B is capped at 49% of the total voting power of all outstanding shares.
- Controlling Interest: Teekay Corporation owns 100% of the Class B common stock and 5.1% of the Class A common stock, representing a 42.2% ownership interest and 52% of the aggregate voting power.
- Auditor Fees: Total fees paid to Ernst & Young LLP were $489,900 for 2008 and $303,800 for 2007.
- Director Compensation (2008): Non-employee directors received an annual cash retainer of $40,000 plus committee fees and an annual award of fully-vested Class A shares valued at approximately $50,000. The Chairman received a $65,000 cash retainer and shares valued at $65,000.
Material Changes and Related Party Transactions
The filing details significant related party arrangements that define the Company's operational structure:
- Management Agreement: Teekay Tankers Ltd. has a long-term agreement with Teekay Tankers Management Services Ltd. (a subsidiary of Teekay Corporation) for commercial, technical, administrative, and strategic services. The agreement expires on December 31, 2022, with automatic five-year renewals unless terminated.
- Performance Fee Structure: The Manager is entitled to a performance fee equal to 20% of Gross Cash Available for Distribution exceeding $3.20 per share, subject to a "Cumulative Dividend Account" mechanism ensuring shareholders receive at least $2.65 per share in annualized dividends before fees are paid.
- Pooling Arrangements: The Company participates in the Teekay Aframax Pool and the Gemini Pool with Teekay Corporation affiliates. Revenues and expenses are pooled and allocated based on vessel weighting systems.
- Asset Acquisitions: Teekay Corporation sold two Suezmax-class oil tankers to the Company in April 2008 and a third in June 2009 under a pre-existing agreement. The deadline for offering a fourth vessel was extended to June 18, 2010.
- Renunciation of Business Opportunities: The Company's articles of incorporation renounce business opportunities in favor of Teekay Corporation, limiting fiduciary duties regarding opportunities attractive to both entities.
Guidance, Outlook, and Risks
The filing does not provide specific financial guidance, revenue forecasts, or management commentary on market outlooks. However, it highlights the following risks and contingencies:
- Control Risk: Due to the dual-class share structure and the renunciation of business opportunities, Teekay Corporation maintains significant control over the Company's affairs, potentially to the detriment of minority shareholders.
- Termination Payments: If the Management Agreement is terminated under specific conditions (e.g., change of control or specific termination windows), the Company may be required to pay a "Termination Payment" equal to the aggregate performance fees payable for the preceding five fiscal years.
- Related Party Dependence: The Company relies on Teekay Corporation and its affiliates for management services, vessel pooling, and potential asset acquisitions.
Important Facts for Investor Verification
- Verify the current status of the "Cumulative Dividend Account" to assess the likelihood of future performance fee payments to the Manager.
- Review the 2008 Annual Report on Form 20-F (filed June 5, 2009) for detailed financial performance, as this proxy statement does not contain current period revenue or profit figures.
- Confirm the terms of the recent Suezmax tanker acquisition in June 2009 and the status of the fourth vessel offer extended to June 2010.
- Assess the impact of the 49% voting cap on Class B shares and the potential for Teekay Corporation to influence corporate decisions despite owning less than 50% of the total equity.
- Monitor the upcoming Annual Meeting on September 9, 2009, for the election of directors, noting that the Board recommends a vote "FOR" all six nominees.