General Maritime
Corporation
299 Park Avenue, Second Floor
New York, New York 10171
Peter C.
Georgiopoulos
47 Charles Street
New York, New York 10014
Reference is
hereby made to that certain letter agreement, dated April 5,
2005 (the “ Employment Letter Agreement ”),
between you and General Maritime Corporation, a Marshall Islands
corporation (“ Historic General Maritime ”). As
you know, Historic General Maritime has entered into an Agreement
and Plan of Merger and Amalgamation, dated as of August 5,
2008 (as amended from time to time, the “ Merger
Agreement ”), with Arlington Tankers Ltd., Galileo
Holding Corporation, Archer Amalgamation Limited and Galileo Merger
Corporation (“ Merger Sub ”). Pursuant to the
Merger Agreement, among other things, subject to the terms and
conditions thereof, Merger Sub will merge with and into Historic
General Maritime, with Historic General Maritime continuing as the
surviving corporation and a wholly-owned subsidiary of Galileo
Holding Corporation, with Galileo Holding Corporation to be renamed
“General Maritime Corporation” (which we refer to
herein as “ New General Maritime ” or the
“ Company ”). New General Maritime will continue
to be a Marshall Islands corporation with its principal place of
business in New York, New York.
The Company
desires to retain you in the capacity of Chairman of the Board of
Directors of the Company (the “ Board of Directors
”), and you desire to be so retained by the Company, upon the
terms and conditions set forth in this letter agreement (this
“ Agreement ”). Therefore, the Company and you
are entering into this Agreement to be effective as of the date on
which the effective time of the transactions contemplated by the
Merger Agreement (collectively, the “ Merger ”)
occurs (the “ Effective Date ”), and contingent
upon and subject to the consummation of the Merger. Contingent upon
and subject to the consummation of the Merger, the Employment
Letter Agreement shall be terminated as described herein upon the
Effective Date, and thereafter the Company shall make the payments
to you described herein.
As used in this
Agreement, the term “ GenMar Group ” means and
includes the Company and each of its subsidiaries and affiliates
from time to time. For purposes of this Agreement, an “
affiliate ” of a person or other entity shall mean a
person or other entity that directly or indirectly controls, is
controlled by, or is under common control with the person or other
entity specified.
Accordingly, in
consideration of the mutual covenants hereinafter set forth and
intending to be legally bound, the Company and you hereby agree as
follows:
Peter C.
Georgiopoulos
October 24, 2008
Page 2
1.
Agreement to Serve; Effect of this Agreement .
(a) You
hereby agree to serve as Chairman of the Board of Directors from
the Effective Date until the third (3 rd )
anniversary of the Effective Date (the “ Expiration
Date ”), or such earlier time as the Board of Directors
or its Nominating and Corporate Governance Committee declines to
nominate you to such position or the shareholders of the Company
either decline to re-elect you to the Board of Directors or remove
you from the Board of Directors (such period, the “
Term ”). You will exercise your powers and discharge
your duties as a director of the Company in accordance with
applicable Marshall Islands law.
(b) Upon
the Effective Date, and contingent upon and subject to the
consummation of the Merger, the Employment Letter Agreement shall
be terminated and superseded by this Agreement. The parties hereto
agree that the termination of the Employment Letter Agreement shall
not be construed or considered an early termination of said
Employment Letter Agreement, and you hereby specifically waive any
and all right and entitlement to any termination payment or benefit
provided for under the Employment Letter Agreement, except as
specifically provided in Section 3 hereof.
(c) In
the event that the Merger has not been consummated by
March 31, 2009 or the Merger Agreement is terminated in
accordance with its terms, this Agreement shall be null and void
and of no force or effect, and the Employment Letter Agreement (as
well as the Existing Registration Rights Agreement (as defined
below) and the existing Grant Agreements (as defined below)) shall
continue in full force and effect in accordance with the terms
thereof.
(a) During
the Term, you will hold the title and office, and serve in the
position of, Chairman of the Board of Directors, with such duties
and authority as provided in the Amended and Restated By-laws of
the Company (as amended from time to time). You shall report
directly to the Board of Directors and, in addition to the
foregoing, shall assist and advise the Company with respect to
strategic and transactional matters and shall perform such other
specific duties and services (including service as a director or
equivalent position of any subsidiary or affiliate of the Company,
without additional compensation) as the Board of Directors shall
reasonably request consistent with your position. You shall not be
an employee of the Company or any of its subsidiaries, and any
services you provide to the Company shall be provided solely in
your capacity as Chairman of the Board of Directors.
(b) During
the Term, you shall not take personal advantage of any business
opportunity relating to the operation of tankers transporting crude
oil or other petroleum products anywhere in the world if such
opportunity is or reasonably could become competitive with the
business of the Company or any natural expansion of the business of
the Company within the tanker industry at the time of such
opportunity, or a business that the Company is actively
contemplating entering at such time. You further agree to disclose
in writing all such opportunities and the material facts attendant
thereto, to the Board of Directors for consideration by the
Company. If within ten (10) business days of your disclosing
such business opportunities to the Board of Directors, the Board of
Directors fails to adopt a resolution (and to provide a
Peter C.
Georgiopoulos
October 24, 2008
Page 3
copy of same to
you) that it may pursue such business opportunity, the Company will
be deemed to have declined to pursue such opportunity, in which
event you shall be free to pursue it. You shall be at liberty to
take personal advantage of any other business opportunities,
whether or not such opportunities arise during the performance of
your services hereunder and whether or not such opportunities could
reasonably be expected to be business opportunities that the
Company might pursue.
3.
Certain Payments . Contingent upon and subject to the
occurrence of the Effective Date and the consummation of the
Merger:
(a) The
Company shall make the following payments to you, in lieu of any
further Company obligations to you under Sections 3 and 5 of
the Employment Letter Agreement:
(i)
A payment in the amount of Twenty-Two Million Dollars ($22,000,000)
in cash by wire transfer of immediately available funds, to the
account designated by you in a written notice to the Company prior
to the date of such payment, shall be made on July 1,
2009;
(ii)
A payment in the amount of Eight Million Dollars ($8,000,000) in
cash, to be paid by the Company on January 2, 2009, by wire
transfer of immediately available funds to the account designated
by you in a written notice to the Company prior to the date of such
payment, which payment shall be in lieu of any annual bonus for
2008 pursuant to Section 3(b) of the Employment Letter Agreement;
and
(iii)
A payment equal to the sum of (A) the amount of any expenses
incurred through the Effective Date required to be reimbursed under
Section 3(d) of the Employment Letter Agreement, plus
(B) the amount of your accrued but unpaid Base Salary (as
defined in Section 3(a) of the Employment Letter Agreement) through
the Effective Date, as provided in Section 3(a) of the Employment
Letter Agreement.
(b) You
shall be entitled to any other payments, entitlements and benefits,
if any, in accordance with applicable plans, programs, arrangements
of, or any agreement, including the Employment Letter Agreement,
with, Historic General Maritime or any other member of the GenMar
Group.
(c) The
aggregate amount of the outstanding loan made by Historic General
Maritime to you shall become due and payable as of the Effective
Date.
(d) Each
of the restricted stock grant agreements between you and Historic
General Maritime listed below (collectively, as they may be amended
from time to time, the “ Grant Agreements ”)
shall be amended to delete therefrom Section 16 (“
Excise Tax ”) thereof in its entirety, with no further
action required by you, Historic General Maritime or the Company,
with each such amendment to be effective as of the Effective
Date:
(i) Restricted
Stock Grant Agreement, dated November 26, 2002;
Peter C.
Georgiopoulos
October 24, 2008
Page 4
(ii) Restricted
Stock Grant Agreement, dated February 9, 2005;
(iii) Restricted
Stock Grant Agreement, dated April 6, 2005;
(iv) Restricted
Stock Grant Agreement, dated December 21, 2005;
(v) Restricted
Stock Grant Agreement, dated December 18, 2006;
(vi) Restricted
Stock Grant Agreement, dated April 2, 2007; and
(vii) Restricted
Stock Grant Agreement, dated December 21, 2007.
4.
Compensation; Perquisites and Benefits .
(a) For
your service as Chairman of the Board of Directors, you shall be
eligible to receive the annual fee paid to the other non-employee
members of the Board of Directors and an additional fee for your
services as Chairman in the amount of $30,000 per year (such fees,
the “ Annual Fee ”). The Annual Fee shall be
paid to you in accordance with the Company’s standard
practice.
(b) You
will be eligible to receive additional payments (whether cash,
stock awards, option grants, or otherwise) in the discretion of the
Board of Directors or an appropriate committee thereof.
(c) During
the Term, to the extent permitted by the applicable insurance
company, you will be eligible to participate in the Company’s
health care benefits at the same contribution level as active
executives of the Company (but you recognize that you may have
different tax results).
(d) The
Company will reimburse you, in accordance with its standard
policies from time to time in effect, for such reasonable and
necessary out-of-pocket business expenses as may be incurred by you
during the Term in the performance of your duties and
responsibilities for any member of the GenMar Group. You will
provide documentation of such expenses as reasonably required under
standard Company policies from time to time. The Company will also
reimburse you for the legal and other advisor fees incurred by you
relating to the negotiation and drafting of this Agreement as a
replacement of the Employment Letter Agreement, up to a maximum of
$20,000.
(e) The
Company will reimburse you for the fee you paid in connection with
the filing you made under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and the rules and regulations thereunder
in connection with the Merger.
(f) That
certain Registration Rights Agreement, dated as of June 12,
2001, by and between you and Historic General Maritime (the “
Existing Registration Rights Agreement ”) shall
terminate effective as of the Effective Date. You and the Company
shall enter into a new registration rights agreement, in form and
substance reasonably satisfactory to you and the Company, to be
effective as of the Effective Date.
Peter C.
Georgiopoulos
October 24, 2008
Page 5
5.
Compensation, Benefits and Entitlements upon Expiration or
Termination of Services Hereunder . On the Expiration Date, or
in the event your services hereunder are terminated prior to the
Expiration Date as provided in Section 1 hereof, you
shall be entitled only to: (a) any expenses required to be
reimbursed under Section 4(d) hereof and incurred
through the Expiration Date, or the date on which your services
hereunder are so terminated (the “ Termination Date
”), as the case may be; (b) any unpaid and owing Annual
Fee in accordance with the Company’s standard practice;
(c) any existing post-termination Restricted Stock (as defined
in the Grant Agreements) rights (if any) that you have under the
Grant Agreements referred to above or under any subsequent grant
agreements, as well as any then-existing post-termination rights
under any other stock-based awards then existing; (d) any
accrued amounts payable under Section 4(b)-(e) above;
(e) any liability insurance and indemnification coverage
rights that you have under Section 12 below; (f) the
unpaid portion of any amounts required to be paid under
Section 3(a) hereof, but not yet paid; (g) any
post-termination rights (if any) applicable under
Section 3(b) hereof; and (h) any COBRA-related
rights to health care benefit coverage continuation that may then
apply under applicable law.
6.
Reduction in Benefits . Unless you and the Company agree
otherwise in writing, in the event that you would incur an Excise
Tax on any payments or benefits under this Agreement, any of your
Restricted Stock or any other payment or benefit from the GenMar
Group (collectively, “ Benefits ”) as a result
of any transaction (a “ Transaction ”) described
in Section 280G(b)(2)(A)(i) of the Internal Revenue Code of 1986,
as amended (the “ Code ”), such Benefits shall
not exceed the greater of (i) the maximum amount that would be
payable to you without the imposition of any Excise Tax with
respect to such Benefits, or (ii) the amount that yields you
the greatest after-tax amount of Benefits after taking into account
any Excise Tax imposed on you, whether due to such Benefits or
otherwise, with any such reduction being applied to the payments
under the Grant Agreements in the order set forth in
Section 3(d) hereof. For purposes of this Agreement,
the term “ Excise Tax ” means the tax imposed by
Section 4999 of the Code and any successor tax. The
determination of whether your Benefits should be reduced, and the
amount of any such reduction, shall be made by independent counsel
selected by you and reasonably acceptable to the Company (“
Independent Counsel ”). For purposes of such
determination, (x) the total amount of Benefits received by
you as a result of a Transaction shall be treated as
“parachute payments” within the meaning of
Section 280G(b)(2) of the Code, and all “excess
parachute payments” within the meaning of
Section 280G(b)(1) of the Code shall be treated as subject to
the Excise Tax, except to the extent that, in the opinion of
Independent Counsel, a Benefit (in whole or in part) does not
constitute a “parachute payment” within the meaning of
Section 280G(b)(2) of the Code and the Treasury Regulations
under Section 280G of the Code (the “ Regulations
”), or such “excess parachute payments” (in whole
or in part) are not subject to the Excise Tax; (y) the amount
of the Benefits that shall be treated as subject to the Excise Tax
shall be equal to the lesser of (A) the total amount of such
Benefits and (B) the amount of “excess parachute
payments” within the meaning of Section 280G(b)(1) of
the Code (after applying clause (x) hereof); and (z) the
value of any noncash benefits or any deferred payment or benefit
shall be determined by Independent Counsel in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code.
All fees and expenses of Independent Counsel shall be borne by the
Company. The parties agree the Merger shall not itself constitute a
Transaction for purposes of any compensation and benefits payable
to you. In no event shall
Peter C.
Georgiopoulos
October 24, 2008
Page 6
you have any
rights to a gross-up as a result of any amounts due from you
pursuant to Section 4999 of the Code.
7.
Confidential Information .
(a) The
GenMar Group owns and has developed and compiled, and will own,
develop and compile, certain techniques, information, and materials
tangible or intangible, relating to itself, its customers,
suppliers and others, which are secret, proprietary and
confidential, and which have great value to its business (referred
to in this Agreement, collectively, as “ Confidential
Information ”). Confidential Information shall not in any
event include information which (i) was generally known or
generally available to the public or within the relevant trade or
industry prior to its disclosure to you by the Company or
(ii) becomes generally known or generally available to the
public or within the relevant trade or industry subsequent to
disclosure to you other than due to your violation of this
Section 7 . Confidential information includes, but is
not limited to, information contained in manuals, documents,
computer programs, compilations of technical, financial, legal or
other data, specifications, designs, business or marketing plans,
forecasts, financial information, work in progress, and other
technical or business information which is confidential and
proprietary information of the Company or any other member of the
GenMar Group.
(b) You
acknowledge and agree that (i) in the performance of your
duties hereunder you will generate or develop, and the GenMar Group
otherwise will from time to time disclose to you and entrust you
with, Confidential Information, and (ii) in the performance of
your duties under the Employment Letter Agreement the GenMar Group
did disclose to you and entrust you with Confidential Information.
You also acknowledge and agree that the unauthorized disclosure of
Confidential Information obtained by you during the performance of
your duties hereunder or under the Employment Letter Agreement,
among other things, may be prejudicial to the GenMar Group’s
interests and an improper disclosure of trade secrets. Unless the
Company otherwise consents, you agree that during the Term
hereunder and for three (3) years thereafter, you shall not,
except as otherwise provided herein, directly or indirectly, use,
make available, sell, disclose or otherwise communicate to any
corporation, partnership, individual or other third party, in all
cases unrelated to the GenMar Group, other than in the ordinary
course of performing your duties hereunder, any Confidential
Information obtained by you during the performance of your duties
hereunder or under the Employment Letter Agreement. Anything herein
to the contrary notwithstanding, the provisions of this
Section 7 shall not apply (x) when disclosure is
required by law or by any court, arbitrator, or administrative or
legislative body (including any committee thereof) with actual or
apparent jurisdiction to order you to disclose or make accessible
any information or (y) with respect to any other litigation,
arbitration or mediation involving this Agreement or any other
agreement between you and the GenMar Group, including, but not
limited to, the enforcement of such agreements (provided that in
the case of clause (x), unless otherwise prohibited by law, you
provide the Company with prior notice of the contemplated
disclosure and reasonably cooperate with the Company at the
Company’s expense in seeking a protective order or other
appropriate protection of such information). Notwithstanding the
above, nothing herein shall preclude you
Peter C.
Georgiopoulos
October 24, 2008
Page 7
from discussing
your employment and compensation arrangements, this Agreement and
any related matters with your attorney(s) and other advisors on a
confidential basis.
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