INTERPOOL, INC.
211 College Road East
Princeton, New Jersey 08540
Mr. Arthur L. Burns
Interpool, Inc.
211 College Road East
Princeton, New Jersey 08540
Dear Mr. Burns:
This
letter agreement (this “ Agreement ”) confirms
the agreement between Interpool, Inc. (the “ Company
”) and you to cancel the stock appreciation rights (the
“ SARs ”) granted to you pursuant to Section
6(e) of your employment agreement with the Company, dated as of
July 1, 2004 (the “ Employment Agreement ”), in
exchange for the grant of a stock option under the 2004 Stock
Option Plan for Key Employees and Directors of Interpool, Inc. (the
“ 2004 Stock Option Plan ”) and payments of cash
to be made by the Company in the future.
1.
Capitalized Terms . All capitalized terms not otherwise
defined herein shall have the meaning as set forth in the
Employment Agreement.
2. Term . This Agreement shall be
effective as of November 18, 2005 (the “ Effective
Date ”) and shall continue in effect until each
“Cash Payment” (as set forth in Paragraph 4 below) has
been paid to you.
3. Cancellation
of Stock Appreciation Rights . You hereby agree to the
cancellation of the SARs effective as of the Effective Date, in
exchange for the Cash Payments and the “Option” (as set
forth in Paragraph 5 below) (the “ SARs Cancellation
”). In addition, you hereby agree that Section 6(e) of the
Employment Agreement is superseded by the terms of this Agreement,
and that effective as of the Effective Date, Section 6(e) of the
Employment Agreement shall be deleted and of no further force or
effect.
4. Cash Payments . You shall be entitled
to receive the following lump sum cash payments: (i) on or prior to
December 31, 2005, an amount equal to the estimated amount of
income and employment taxes expected to be imposed upon you for
calendar year 2005 in connection with the SARs Cancellation (the
“ Tax Payment ”); and (ii) on or prior to June
30, 2006, an amount equal to (A) $708,000.00, minus (B) the amount
of the Tax Payment, to the extent it has already been paid to you
(together with the Tax Payment, the “ Cash Payments
”).
Notwithstanding the foregoing, if prior to
the payment of a Cash Payment, any of the following events shall
occur, you shall become entitled to receive the Cash Payment as
soon as practicable after the occurrence of such event: (i) your
employment with the Company is terminated by the Company without
Cause, by you for Good Reason, or due to your Disability or death;
(ii) a Going Private Transaction, provided you are employed by the
Company as of the effective date of such Going Private Transaction;
or (iii) a Change of Control, provided you are employed by the
Company as of the effective date of such Change of Control.
5. Stock
Option . In addition, effective as of the Effective Date, you
shall be granted a nonqualifie
