GENCO SHIPPING & TRADING LIMITED
2005 EQUITY INCENTIVE PLAN
(as amended and restated effective December 21, 2005)
ARTICLE I
General
1.1 Purpose
The Genco Shipping & Trading Limited 2005 Equity Incentive Plan (the
"Plan") is designed to provide certain key persons, on whose initiative and
efforts the successful conduct of the business of Genco Shipping & Trading
Limited (the "Company") depends, with incentives to: (a) enter into and remain
in the service of the Company (b) acquire a proprietary interest in the success
of the Company, (c) maximize their performance and (d) enhance the long-term
performance of the Company.
1.2 Administration
(a) Administration by Board of Directors. The Plan shall be administered
by the Company's Board of Directors (the "Administrator"). The Administrator
shall have the authority (i) to exercise all of the powers granted to it under
the Plan, (ii) to construe, interpret and implement the Plan and any Award
Agreements executed pursuant to Section 2.1 in its sole discretion with all such
determination being final, binding and conclusive, (iii) to prescribe, amend and
rescind rules and regulations relating to the Plan, including rules governing
its own operations, (iv) to make all determinations necessary or advisable in
administering the Plan, and (v) to correct any defect, supply any omission and
reconcile any inconsistency in the Plan.
(b) Administrator Action. Actions of the Administrator shall be taken by
the vote of a majority of its members. Any action may be taken by a written
instrument signed by a majority of the Administrator members, and action so
taken shall be fully as effective as if it had been taken by a vote at a
meeting. Except to the extent prohibited by applicable law or the applicable
rules of a stock exchange, the Administrator may allocate all or any portion of
its responsibilities and powers to any one or more of its members and may
delegate all or any part of its responsibilities to any person or persons
selected by it, and may revoke any such allocation or delegation at any time.
(c) Deemed Delegation to Committee. To the extent permitted by law and
except when the Board of Directors elects to act as the Administrator or to
delegate its responsibilities and powers to another person or persons, the Board
of Directors shall be deemed to have delegated its all of its responsibilities
and powers under the Plan, other than the authority to amend or terminate the
Plan, to the Compensation Committee of the Board of Directors or such other
committee or subcommittee as the Board may designate or as shall be formed by
the abstention or recusal of a non-Qualified Member (as defined below) of such
committee (the "Committee"). The members of the Committee shall be appointed by,
and serve at the pleasure of, the Board of Directors. While it is intended that
at all times that the Committee acts in connection with the Plan, the Committee
shall consist solely of Qualified Members, the number of whom shall not be less
than two, the fact that the Committee is not so comprised will not invalidate
any grant hereunder that otherwise satisfies the terms of the Plan. For purposes
of the foregoing, a "Qualified Member" is a "non-employee director" within the
meaning of Rule 16b-3 ("Rule 16b-3") promulgated under the Securities Exchange
Act of 1934 (the "1934 Act") .
1.3 Persons Eligible for Awards
The persons eligible to receive awards under the Plan are those officers,
directors, and executive, managerial, administrative and professional employees
of the Company, (collectively, "key persons") as the Administrator in its sole
discretion shall select, taking into account the duties of the respective
employees, their present and potential contributions to the success of the
Company, and such other factors as the Administrator shall deem relevant in
connection with accomplishing the purpose of the Plan. The Administrator may
from time to time, in its sole discretion, determine that any key person shall
be ineligible to receive awards under the Plan.
1.4 Types of Awards Under Plan
Awards may be made under the Plan in the form of (a) incentive stock
options, (b) non-qualified stock options, (c) stock appreciation rights, (d)
dividend equivalent rights, (e) restricted stock, (f) unrestricted stock, (g)
restricted stock units, and (h) performance shares, all as more fully set forth
in Article II. The term "award" means any of the foregoing. No incentive stock
option may be granted to a person who is not an employee of the Company on the
date of grant. Notwithstanding any provision of the Plan, to the extent any
Award would be subject to Section 409A of the Internal Revenue Code of 1986 (the
"Code"), no such Award may be granted if it would fail to comply with the
requirements set forth in Section 409A of the Code.
1.5 Shares Available for Awards
(a) Subject to the provisions of Section 1.5(c), the aggregate number of
shares of common stock of the Company ("Common Stock") with respect to which
awards may at any time be granted under the Plan are 2,000,000 shares of Common
Stock.
(b) Shares issued pursuant to the Plan may be authorized but unissued
Common Stock. The Administrator may direct that any stock certificate evidencing
shares issued pursuant to the Plan shall bear a legend setting forth such
restrictions on transferability as may apply to such shares.
(c) Adjustment Upon Changes in Common Stock. Upon certain changes in
Common Stock, the number of shares of Common Stock available for issuance with
respect to awards that may be granted under the Plan pursuant to Section 1.5(a),
shall be adjusted pursuant to Section 3.7(a).
(d) Certain Shares to Become Available Again. The following shares of
Common Stock shall again become available for awards under the Plan: any shares
that are subject to an award under the Plan and that remain unissued upon the
cancellation or termination of such award for any reason whatsoever; any shares
of restricted stock forfeited pursuant to Section 2.7(e), provided that any
dividends paid on such shares are also forfeited pursuant to such Section
2.7(e); and any shares in respect of which a stock appreciation right or
performance share award is settled for cash.
(e) Individual Limit. Except for the limits set forth in this Section
1.5(e) and 2.2(i), no provision of this Plan shall be deemed to limit the number
or value of shares with respect to which the Administrator may make awards to
any eligible person. Subject to adjustment as provided in Section 3.7(a), the
total number of shares of Common Stock with respect to which awards may be
granted to any one employee of the Company during any one calendar year shall
not exceed 400,000 shares. Stock options and stock appreciation rights granted
and subsequently canceled or deemed to be canceled in a calendar year count
against this limit even after their cancellation. The provisions of this Section
1.5(e) shall not apply in any circumstance with respect to which the
Administrator determines that compliance with Section 162(m) of the Code is not
necessary.
1.6 Definitions of Certain Terms
(a) The "Fair Market Value" of a share of Common Stock on any day shall
be the closing price on the Nasdaq National Market as reported for such day in
The Wall Street Journal or, if no such price is reported for such day, the
average of the high bid and low asked price of Common Stock as reported for such
day. If no quotation is made for the applicable day, the Fair Market Value of a
share of Common Stock on such day shall be determined in the manner set forth in
the preceding sentence using quotations for the next preceding day for which
there were quotations, provided that such quotations shall have been made within
the ten (10) business days preceding the applicable day. Notwithstanding the
foregoing, if deemed necessary or appropriate by the Administrator, the Fair
Market Value of a share of Common Stock on any day shall be determined by the
Administrator. In no event shall the Fair Market Value of any share of Common
Stock be less than its par value.
(b) The term "incentive stock option" means an option that is intended
to qualify for special federal income tax treatment pursuant to sections 421 and
422 of the Code as now constituted or subsequently amended, or pursuant to a
successor provision of the Code, and which is so designated in the applicable
Grant Certificate. Any
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option that is not specifically designated as an incentive stock option shall
under no circumstances be considered an incentive stock option. Any option that
is not an incentive stock option is referred to herein as a "non-qualified stock
option."
(c) The term "Code" means the Internal Revenue Code of 1986, as amended.
(d) The term "cause" in connection with a termination of employment or
Board membership by reason of a dismissal for cause shall mean:
(i) to the extent that there is an employment, severance or other
agreement governing the relationship between the grantee and the
Company, a Company subsidiary or a Company joint venture, which
agreement contains a definition of "cause," cause shall consist of
those acts or omissions that would constitute "cause" under such
agreement; and otherwise,
(ii) the grantee's termination of employment or Board membership by
the Company or an affiliate on account of any one or more of the
following:
(A) any failure by the grantee substantially to perform the
grantee's employment or Board membership duties;
(B) any excessive unauthorized absenteeism by the grantee;
(C) any refusal by the grantee to obey the lawful orders of
the Board or any other person or Administrator to whom the
grantee reports;
(D) any act or omission by the grantee that is or may be
injurious to the Company, monetarily or otherwise;
(E) any act by the grantee that is inconsistent with the
best interests of the Company;
(F) the grantee's material violation of any of the Company's
policies, including, without limitation, those policies
relating to discrimination or sexual harassment;
(G) the grantee's unauthorized (a) removal from the premises
of the Company or an affiliate of any document (in any medium
or form) relating to the Company or an affiliate or the
customers or clients of the Company or an affiliate or (b)
disclosure to any person or entity of any of the Company's, or
its affiliates' confidential or proprietary information;
(H) the grantee's commission of any felony, or any other
crime involving moral turpitude; and
(I) the grantee's commission of any act involving dishonesty
or fraud.
Any rights the Company may have hereunder in respect of the events
giving rise to cause shall be in addition to the rights the Company may have
under any other agreement with a grantee or at law or in equity. Any
determination of whether a grantee's employment or Board membership is (or is
deemed to have been) terminated for cause shall be made by the Administrator
in its discretion, which determination shall be final, binding and conclusive
on all parties. If, subsequent to a grantee's voluntary termination of
employment or involuntary termination of employment without cause, it is
discovered that the grantee's employment could have been terminated for
cause, the Administrator may deem such grantee's employment or Board
membership to have been terminated for cause. A grantee's termination of
employment or Board membership for cause shall be effective as of the date of
the occurrence of the event giving rise to cause, regardless of when the
determination of cause is made.
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ARTICLE II
Awards Under The Plan
2.1 Agreements Evidencing Awards
Each award granted under the Plan (except an award of unrestricted stock)
shall be evidenced by a written certificate ("Award Agreement") which shall
contain such provisions as the Administrator may, in its sole discretion, deem
necessary or desirable. By executing an Award Agreement pursuant to the Plan, a
grantee thereby agrees that the award shall be subject to all of the terms and
provisions of the Plan and the applicable Award Agreement.
2.2 Grant of Stock Options, Stock Appreciation Rights, Restricted Stock
Units and Dividend Equivalent Rights
(a) Stock Option Grants. The Administrator may grant incentive stock
options and non-qualified stock options ("options") to purchase shares of Common
Stock from the Company, to such key persons, and in such amounts and subject to
such vesting and forfeiture provisions and other terms and conditions, as the
Administrator shall determine, in its sole discretion, subject to the provisions
of the Plan. The Administrator may not grant incentive stock options to
non-employee directors.
(b) Stock Appreciation Right Grants; Types of Stock Appreciation Rights.
The Administrator may grant stock appreciation rights to such key persons, and
in such amounts and subject to such vesting and forfeiture provisions and other
terms and conditions, as the Administrator shall determine, in its sole
discretion, subject to the provisions of the Plan. The terms of a stock
appreciation right may provide that it shall be automatically exercised for a
cash payment upon the happening of a specified event that is outside the control
of the grantee, and that it shall not be otherwise exercisable. Stock
appreciation rights may be granted in connection with all or any part of, or
independently of, any option granted under the Plan. A stock appreciation right
granted in connection with an option may be granted at or after the time of
grant of such option.
(c) Nature of Stock Appreciation Rights. The grantee of a stock
appreciation right shall have the right, subject to the terms of the Plan and
the applicable Award Agreement, to receive from the Company an amount equal to
(i) the excess of the Fair Market Value of a share of Common Stock on the date
of exercise of the stock appreciation right over the Fair Market Value of a
share of Common Stock on the date of grant (or over the option exercise price if
the stock appreciation right is granted in connection with an option),
multiplied by (ii) the number of shares with respect to which the stock
appreciation right is exercised. Payment upon exercise of a stock appreciation
right shall be in cash or in shares of Common Stock (valued at their Fair Market
Value on the date of exercise of the stock appreciation right) or both, all as
the Administrator shall determine in its sole discretion; provided, however,
that a Stock Appreciation Right settled in cash shall be exercisable only to the
extent that such exercise complies with Section 409A of the Code. Upon the
exercise of a stock appreciation right granted in connection with an option, the
number of shares subject to the option shall be reduced by the number of shares
with respect to which the stock appreciation right is exercised. Upon the
exercise of an option in connection with which a stock appreciation right has
been granted, the number of shares subject to the stock appreciation right shall
be reduced by the number of shares with respect to which the option is
exercised.
(d) Option Exercise Price. Each Award Agreement with respect to an
option shall set forth the amount (the "option exercise price") payable by the
grantee to the Company upon exercise of the option evidenced thereby. The option
exercise price per share shall be determined by the Administrator in its sole
discretion; provided, however, that the option exercise price of an incentive
stock option shall be at least 100% of the Fair Market Value of a share of
Common Stock on the date the option is granted, and provided further that in no
event shall the option exercise price be less than the par value of a share of
Common Stock.
(e) Exercise Period. Each Award Agreement with respect to an option or
stock appreciation right shall set forth the periods during which the award
evidenced thereby shall be exercisable, whether in whole or in part. Such
periods shall be determined by the Administrator in its sole discretion;
provided, however, that no option or a stock appreciation right shall be
exercisable more than 10 years after the date of grant, and provided further
that, except as and to the extent that the Administrator may otherwise provide
pursuant to Sections 2.5, 3.7 or 3.8, no
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option or stock appreciation right shall be exercisable prior to the first
anniversary of the date of grant. (See Section 2.3 for additional provisions
relating to the exercise of options and stock appreciation rights.)
(f) Reload Options. The Administrator may, in its sole discretion,
include in any Award Agreement with respect to an option (the "original option")
a provision that an additional option (the "reload option") shall be granted to
any grantee who, pursuant to Section 2.3(e)(ii), delivers shares of Common Stock
in partial or full payment of the exercise price of the original option. The
reload option shall be for a number of shares of Common Stock equal to the
number thus delivered, shall have an exercise price equal to the Fair Market
Value of a share of Common Stock on the date of exercise of the original option,
and shall have an expiration date no later than the expiration date of the
original option. In the event that a Award Agreement provides for the grant of a
reload option, such Agreement shall also provide that the exercise price of the
original option be no less than the Fair Market Value of a share of Common Stock
on its date of grant, and that any shares that are delivered pursuant to Section
2.3 (e) (ii) in payment of such exercise price shall have been held for at least
six months.
(g) Dividend Equivalent Rights. The Administrator may, in its sole
discretion, include in any Award Agreement with respect to an option, stock
appreciation right or performance shares, a dividend equivalent right entitling
the grantee to receive amounts equal to the ordinary dividends that would be
paid, during the time such award is outstanding and unexercised, on the shares
of Common Stock covered by such award if such shares were then outstanding. In
the event such a provision is included in a Award Agreement, the Administrator
shall determine whether such payments shall be made in cash or in shares of
Common Stock, whether they shall be conditioned upon the exercise of the award
to which they relate, the time or times at which they shall be made, and such
other vesting and forfeiture provisions and other terms and conditions as the
Administrator shall deem appropriate.
(h) Restricted Stock Units. The Administrator may, in its sole
discretion, grant restricted stock units to such key persons, and in such
amounts and subject to such vesting and forfeiture provisions and other terms
and conditions, as the Administrator shall determine, in its sole discretion,
subject to the provisions of the Plan. A restricted stock unit granted under the
Plan shall confer upon the grantee a right to receive from the Company, upon the
occurrence of an event specified in the Award Agreement, such grantee's vested
restricted stock units multiplied by the Fair Market Value of a share of Common
Stock. Restricted stock units may be granted in connection with all or any part
of, or independently of, any award granted under the Plan. A restricted stock
unit granted in connection with another award may be granted at or after the
time of grant of such award.
(i) Incentive Stock Option Limitation: Exercisability. To the extent
that the aggregate Fair Market Value (determined as of the time the option is
granted) of the stock with respect to which incentive stock options are first
exercisable by any employee during any calendar year shall exceed $100,000, or
such higher amount as may be permitted from time to time under section 422 of
the Code, such options shall be treated as non-qualified stock options.
(j) Incentive Stock Option Limitation: 10% Owners. Notwithstanding the
provisions of paragraphs (d) and (e) of this Section 2.2, an incentive stock
option may not be granted under the Plan to an individual who, at the time the
option is granted, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of his employer corporation or of its
parent or subsidiary corporations (as such ownership may be determined for
purposes of section 422(b) (6) of the Code) unless (i) at the time such
incentive stock option is granted the option exercise price is at least 110% of
the Fair Market Value of the shares subject thereto and (ii) the incentive stock
option by its terms is not exercisable after the expiration of 5 years from the
date it is granted.
2.3 Exercise of Options and Stock Appreciation Rights
Subject to the other provisions of this Article II, each option and stock
appreciation right granted under the Plan shall be exercisable as follows:
(a) Timing and Extent of Exercise. Options and stock appreciation rights
shall be exercisable at such times and under such conditions as set forth in the
corresponding Award Agreement, but in no event shall any such award be
exercisable prior to the first anniversary or subsequent to the tenth
anniversary of the date on which such award was granted. Unless the applicable
Award Agreement otherwise provides, an option or stock appreciation
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right may be exercised from time to time as to all or part of the shares or
units as to which such award is then exercisable. A stock appreciation right
granted in connection with an option may be exercised at any time when, and to
the same extent that, the related option may be exercised.
(b) Notice of Exercise. An option or stock appreciation right shall be
exercised by the filing of a written notice with the Company or the Company's
designated exchange agent (the "exchange agent"), on such form and in such
manner as the Administrator shall in its sole discretion prescribe.
(c) Payment of Exercise Price. Any written notice of exercise of an
option shall be accompanied by payment for the shares being purchased. Such
payment shall be made: (i) by certified or official bank check (or the
equivalent thereof acceptable to the Company or its exchange agent) for the full
option exercise price; or (ii) with the consent of the Administrator, by
delivery of shares of Common Stock having a Fair Market Value (determined as of
the exercise date) equal to all or part of the option exercise price and a
certified or official bank check (or the equivalent thereof acceptable to the
Company or its exchange agent) for any remaining portion of the full option
exercise price; or (iii) at the discretion of the Administrator and to the
extent permitted by law, by such other provision, consistent with the terms of
the Plan, as the Administrator may from time to time prescribe (whether directly
or indirectly through the exchange agent).
(d) Delivery of Certificates Upon Exercise. Subject to the provision of
section 2.3(e), promptly after receiving payment of the full option exercise
price, or after receiving notice of the exercise of a stock appreciation right
for which payment will be made partly or entirely in shares, the Company or its
exchange agent shall, subject to the provisions of Section 3.2, deliver to the
grantee or to such other person as may then have the right to exercise the
award, a certificate or certificates for the shares of Common Stock for which
the award has been exercised. If the method of payment employed upon option
exercise so requires, and if applicable law permits, an optionee may direct the
Company, or its exchange agent as the case may be, to deliver the stock
certificate(s) to the optionee's stockbroker.
(e) Investment Purpose and Legal Requirements. Notwithstanding the
foregoing, at the time of the exercise of any option, the Company may, if it
shall deem it necessary or advisable for any reason, require the holder of such
option (i) to represent in writing to the Company that it is the optionee's then
intention to acquire the Shares with respect to which the option is to be
exercised for investment and not with a view to the distribution thereof, or
(ii) to postpone the date of exercise until such time as the Company has
available for delivery to the optionee a prospectus meeting the requirements of
all applicable securities laws; and no shares shall be issued or transferred
upon the exercise of any option unless and until all legal requirements
applicable to the issuance or transfer of such Shares have been complied with to
the satisfaction of the Company. The Company shall have the right to condition
any issuance of shares to any optionee hereunder on such optionee's undertaking
in writing to comply with such restrictions on the subsequent transfer of such
shares as the Company shall deem necessary or advisable as a result of any
applicable law, regulation or official interpretation thereof, and certificates
representing such shares may contain a legend to reflect any such restrictions.
(f) No Stockholder Rights. No grantee of an option, stock appreciation
right or restricted stock unit (or other person having the right to exercise
such award) shall have any of the rights of a stockholder of the Company with
respect to shares subject to such award until the issuance of a stock
certificate to such person for such shares. Except as otherwise provided in
Section 1.5(c), no adjustment shall be made for dividends, distributions or
other rights (whether ordinary or extraordinary, and whether in cash, securities
or other property) for which the record date is prior to the date such stock
certificate is issued.
2.4 Compensation in Lieu of Exercise of an Option
Upon written application of the grantee of an option, the Administrator
may in its sole discretion determine to substitute, for the exercise of such
option, compensation to the grantee not in excess of the difference between the
option exercise price and the Fair Market Value of the shares covered by such
written application on the date of such application. Such compensation may be in
cash, in shares of Common Stock, or both, and the payment thereof may be subject
to conditions, all as the Administrator shall determine in its sole discretion.
In the event compensation is substituted pursuant to this Section 2.4 for the
exercise, in whole or in part, of an option, the number of shares subject to the
option shall be reduced by the number of shares for which such compensation is
substituted.
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2.5 Termination of Employment; Death Subsequent to a Termination of
Employment
(a) General Rule. Except to the extent otherwise provided in paragraphs
(b), (c), (d) or (e) of this Section 2.5 or Section 3.8(b)(iii), a grantee who
incurs a termination of employment may exercise any outstanding option or stock
appreciation right on the following terms and conditions: (i) exercise may be
made only to the extent that the grantee was entitled to exercise the award on
the termination of employment date; and (ii) exercise must occur within three
months after termination of employment but in no event after the original
expiration date of the award.
(b) Dismissal for Cause; Resignation. If a grantee incurs a termination
of employment as the result of a dismissal for cause or resignation without the
Company's prior consent, as applicable, all options and stock appreciation
rights not theretofore exercised shall terminate upon the grantee's termination
of employment.
(c) Retirement. If a grantee incurs a termination of employment as the
result of his retirement, then any outstanding option or stock appreciation
right shall be exercisable pursuant to its terms. For this purpose "retirement"
shall mean a grantee's termination of employment, under circumstances other than
those described in paragraph (b) above, on or after: (x) his 65th birthday, (y)
the date on which he has attained age 60 and completed at least five years of
service with the Company, as applicable, (using any method of calculation the
Administrator deems appropriate) or (z) if approved by the Administrator, on or
after he has completed at least 20 years of service.
(d) Disability. If a grantee incurs a termination of employment by
reason of a disability (as defined below), then any outstanding option or stock
appreciation right shall be exercisable pursuant to its terms. For this purpose
"disability" shall mean, except in connection any physical or mental condition
that would qualify a grantee for a disability benefit under the long-term
disability plan maintained by the Company, if there is no such plan, a physical
or mental condition that prevents the grantee from performing the essential
functions of the grantee's position (with or without reasonable accommodation)
for a period of six consecutive months. The existence of a disability shall be
determined by the Administrator in its sole and absolute discretion.
(e) Death.
(i) Termination of Employment as a Result of Grantee's Death. If a
grantee incurs a termination of employment as the result of his
death, then any outstanding option or stock appreciation right shall
be exercisable pursuant to its terms.
(ii) Restrictions on Exercise Following Death. Any such exercise of
an award following a grantee's death shall be made only by the
grantee's executor or administrator or other duly appointed
representative reasonably acceptable to the Administrator, unless
the grantee's will specifically disposes of such award, in which
case such exercise shall be made only by the recipient of such
specific disposition. If a grantee's personal representative or the
recipient of a specific disposition under the grantee's will shall
be entitled to exercise any award pursuant to the preceding
sentence, such representative or recipient shall be bound by all the
terms and conditions of the Plan and the applicable Award Agreement
which would have applied to the grantee including, without
limitation, the provisions of Sections 3.2 and 3.5 hereof.
(f) Special Rules for Incentive Stock Options. No option that remains
exercisable for more than three months following a grantee's termination of
employment for any reason other than death or disability, or for more than one
year following a grantee's termination of employment as the result of his
becoming disabled, may be treated as an incentive stock option.
(g) Administrator Discretion. The Administrator, in the applicable Award
Agreement, may waive or modify the application of the foregoing provisions of
this Section 2.5.
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2.6 Transferability of Options, Stock Appreciation Rights and Restricted
Stock Units
Except as otherwise provided in an applicable Award Agreement evidencing
an option, stock appreciation right or restricted stock unit, during the
lifetime of a grantee, each option or stock appreciation right granted to a
grantee shall be exercisable only by the grantee and no option, stock
appreciation right or restricted stock unit shall be assignable or transferable
otherwise than by will or by the laws of descent and distribution. The
Administrator may, in any applicable Award Agreement evidencing an option (other
than an incentive stock option to the extent inconsistent with the requirements
of section 422 of the Code applicable to incentive stock options), permit a
grantee to transfer all or some of the options to (A) the grantee's spouse,
children or grandchildren ("Immediate Family Members"), (B) a trust or trusts
for the exclusive benefit of such Immediate Family Members, or (C) other parties
approved by the Administrator in its sole and absolute discretion. Following any
such transfer, any transferred options shall continue to be subject to the same
terms and conditions as were applicable immediately prior to the transfer.
2.7 Grant of Restricted Stock
(a) Restricted Stock Grants. The Administrator may grant restricted
shares of Common Stock to such key persons, in such amounts, and subject to such
vesting and forfeiture provisions and other terms and conditions as the
Administrator shall determine in its sole discretion, subject to the provisions
of the Plan. Restricted stock awards may be made independently of or in
connection with any other award under the Plan. A grantee of a restricted stock
award shall have no rights with respect to such award unless such grantee
accepts the award within such period as the Administrator shall specify by
accepting delivery of a restricted stock agreement in such form as the
Administrator shall determine and, in the event the restricted shares are newly
issued by the Company, makes payment to the Company or its exchange agent as
required by the Administrator and in accordance with the Marshall Islands
Business Corporations Act.
(b) Issuance of Stock Certificate(s). Promptly after a grantee accepts a
restricted stock award, the Company or its exchange agent shall issue to the
grantee a stock certificate or stock certificates for the shares of Common Stock
covered by the award or shall establish an account evidencing ownership of the
stock in uncertificated form. Upon the issuance of such stock certificate(s), or
establishment of such account, the grantee shall have the rights of a
stockholder with respect to the restricted stock, subject to: (i) the
nontransferability restrictions and forfeiture provision described in paragraphs
(d) and (e) of this Section 2.7; (ii) in the Administrator's discretion, to a
requirement that any dividends paid on such shares shall be held in escrow until
all restrictions on such shares have lapsed; and (iii) any other restrictions
and conditions contained in the applicable restricted stock agreement.
(c) Custody of Stock Certificate(s). Unless the Administrator shall
otherwise determine, any stock certificates issued evidencing shares of
restricted stock shall remain in the possession of the Company until such shares
are free of any restrictions specified in the applicable restricted stock
agreement. The Administrator may direct that such stock certificate(s) bear a
legend setting forth the applicable restrictions on transferability.
(d) Nontransferability. Shares of restricted stock may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of except as
otherwise specifically provided in this Plan or the applicable restricted stock
agreement. The Administrator at the time of grant shall specify the date or
dates (which may depend upon or be related to the attainment of performance
goals and other conditions) on which the nontransferability of the restricted
stock shall lapse.
(e) Consequence of Termination of Employment. A grantee's termination of
employment for any reason (including death) shall cause the immediate forfeiture
of all shares of restricted stock that have not yet vested as of the date of
such termination of employment. All dividends paid on such shares also shall be
forfeited, whether by termination of any escrow arrangement under which such
dividends are held, by the grantee's repayment of dividends he received
directly, or otherwise, unless the Administrator determines otherwise with
respect to dividends paid in respect of shares of restricted stock granted on or
after December 21, 2005.
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2.8 Grant of Unrestricted Stock
The Administrator may grant (or sell at a purchase price at least equal to
par value) shares of Common Stock free of restrictions under the Plan, to such
key persons and in such amounts and subject to such forfeiture provisions as the
Administrator shall determine in its sole discretion. Shares may be thus granted
or sold in respect of past services or other valid consideration.
2.9 Grant of Performance Shares
(a) Performance Share Grants. The Administrator may grant performance
share awards to such key persons, and in such amounts and subject to such
vesting and forfeiture provisions and other terms and conditions, as the
Administrator shall in its sole discretion determine, subject to the provisions
of the Plan. Such an award shall entitle the grantee to acquire shares of Common
Stock, or to be paid the value thereof in cash, as the Administrator shall
determine, if specified performance goals are met. Performance shares may be
awarded independently of, or in connection with, any other award under the Plan.
A grantee shall have no rights with respect to a performance share award unless
such grantee accepts the award by accepting delivery of a Award Agreement at
such time and in such form as the Administrator shall determine.
(b) Stockholder Rights. The grantee of a performance share award will
have the rights of a stockholder only as to shares for which a stock certificate
has been issued pursuant to the award and not with respect to any other shares
subject to the award.
(c) Consequence of Termination of Employment. Except as may otherwise be
provided by the Administrator at any time prior to a grantee's termination of
employment, the rights of a grantee of a performance share award shall
automatically terminate upon the grantee's termination of employment by the
Company or its subsidiaries for any reason (including death).
(d) Exercise Procedures; Automatic Exercise. At the discretion of the
Administrator, the applicable Award Agreement may set out the procedures to be
followed in exercising a performance share award or it may provide that such
exercise shall be made automatically after satisfaction of the applicable
performance goals.
(e) Tandem Grants; Effect on Exercise. Except as otherwise specified by
the Administrator, (i) a performance share award granted in tandem with an
option may be exercised only while the option is exercisable, (ii) the exercise
of a performance share award granted in tandem with any other award shall reduce
the number of shares subject to such other award in the manner specified in the
applicable Award Agreement, and (iii) the exercise of any award granted in
tandem with a performance share award shall reduce the number of shares subject
to the latter in the manner specified in the applicable Award Agreement.
(f) Nontransferability. Performance shares may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as otherwise
specifically provided in this Plan or the applicable Award Agreement. The
Administrator at the time of grant shall specify the date or dates (which may
depend upon or be related to the attainment of performance goals and other
conditions) on which the nontransferability of the performance shares shall
lapse.
ARTICLE III
Miscellaneous
3.1 Amendment of the Plan; Modification of Awards
(a) Amendment of the Plan. The Board may from time to time suspend,
discontinue, revise or amend the Plan in any respect whatsoever, except that no
such amendment shall materially impair any rights or materially increase any
obligations under any award theretofore made under the Plan without the consent
of the grantee (or, upon the grantee's death, the person having the right to
exercise the award). For purposes of this Section 3.1, any action of the Board
or the Administrator that in any way alters or affects the tax treatment of any
award shall not be considered to materially impair any rights of any grantee.
9
(b) Stockholder Approval Requirement. Stockholder approval shall be
required with respect to any amendment to the Plan that (i) increases the
aggregate number of shares that may be issued pursuant to incentive stock
options or changes the class of employees eligible to receive such options; or
(ii) materially increases the benefits under the Plan to persons whose
transactions in Common Stock are subject to section 16(b) of the 1934 Act or
increases the benefits under the Plan or materially increases the number of
shares which may be issued to such persons, or materially modifies the
eligibility requirements affecting such persons.
(c) Modification of Awards. The Administrator may cancel any award under
the Plan. The Administrator also may amend any outstanding Award Agreement,
including, without limitation, by amendment which would: (i) accelerate the time
or times at which the award becomes unrestricted or may be exercised, provided
that, except as and to the extent that the Administrator may otherwise provide
pursuant to Section 2.5, 3.7 or 3.8, no option or stock appreciation right shall
be exercisable prior to the first anniversary of its date of grant; (ii) waive
or amend any goals, restrictions or conditions set forth in the Agreement; or
(iii) waive or amend the operation of Section 2.5 with respect to the
termination of the award upon termination of employment. However, any such
cancellation or amendment (other than an amendment pursuant to Sections 3.7 or
3.8(b)) that materially impairs the rights or materially increases the
obligations of a grantee under an outstanding award shall be made only with the
consent of the grantee (or, upon the grantee's death, the person having the
right to exercise the award).
3.2 Consent Requirement
(a) No Plan Action Without Required Consent. If the Administrator shall
at any time determine that any Consent (as hereinafter defined) is necessary or
desirable as a condition of, or in connection with, the granting of any award
under the Plan, the issuance or purchase of shares or other rights thereunder,
or the taking of any other action thereunder (each such action being hereinafter
referred to as a "Plan Action"), then such Plan Action shall not be taken, in
whole or in part, unless and until such Consent shall have been effected or
obtained to the full satisfaction of the Administrator.
(b) Consent Defined. The term "Consent" as used herein with respect to
any Plan Action means (i) any and all listings, registrations or qualifications
in respect thereof upon any securities exchange or under any federal, state or
local law, rule or regulation, (ii) any and all written agreements and
representations by the grantee with respect to the disposition of shares, or
with respect to any other matter, which the Administrator shall deem necessary
or desirable to comply with the terms of any such listing, registration or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made and (iii) any and all consents,
clearances and approvals in respect of a Plan Action by any governmental or
other regulatory bodies.
3.3 Nonassignability
Except as provided in Sections 2.5(e), 2.6, 2.7(d) and 2.9(f): (a) no
award or right granted to any person under the Plan or under any Award Agreement
shall be assignable or transferable other than by will or by the laws of descent
and distribution; and (b) all rights granted under the Plan or any Award
Agreement shall be exercisable during the life of the grantee only by the
grantee or the grantee's legal representative.
3.4 Requirement of Notification of Election Under Section 83(b) of the
Code
If any grantee shall, in connection with the acquisition of shares of
Common Stock under the Plan, make the election permitted under section 83(b) of
the Code (i.e., an election to include in gross income in the year of transfer
the amounts specified in section 83(b)), such grantee shall notify the Company
of such election within 10 days of filing notice of the election with the
Internal Revenue Service, in addition to any filing and notification required
pursuant to regulations issued under the authority of Code section 83(b).
3.5 Requirement of Notification Upon Disqualifying Disposition Under
Section 421(b) of the Code
Each Award Agreement with respect to an incentive stock option shall
require the grantee to notify the Company of any disposition of shares of Common
Stock issued pursuant to the exercise of such option under the
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circumstances described in section 421(b) of the Code (relating to certain
disqualifying dispositions), within 10 days of such disposition.
3.6 Withholding Taxes
(a) With Respect to Cash Payments. Whenever cash is to be paid pursuant
to an award under the Plan, the Company shall be entitled to deduct therefrom an
amount sufficient in its opinion to satisfy all federal, state and other
governmental tax withholding requirements related to such payment.
(b) With Respect to Delivery of Common Stock. Whenever shares of Common
Stock are to be delivered pursuant to an award under the Plan, the Company shall
be entitled to require as a condition of delivery that the grantee remit to the
Company an amount sufficient in the opinion of the Company to satisfy all
federal, state and other governmental tax withholding requirements related
thereto. With the approval of the Administrator, which the Administrator shall
have sole discretion whether or not to give, the grantee may satisfy the
foregoing condition by electing to have the Company withhold from delivery
shares having a value equal to the amount of tax to be withheld. Such shares
shall be valued at their Fair Market Value as of the date on which the amount of
tax to be withheld is determined. Fractional share amounts shall be settled in
cash. Such a withholding election may be made with respect to all or any portion
of the shares to be delivered pursuant to an award.
3.7 Adjustment Upon Changes in Common Stock
(a) Shares Available for Grants. In the event of any change in the
number of shares of Common Stock outstanding by reason of any stock dividend or
split, reverse stock split, recapitalization, merger, consolidation, combination
or exchange of shares or similar corporate change, the maximum number of shares
of Common Stock with respect to which the Administrator may grant awards under
Article II hereof, as described in Section 1.5(a), and the individual annual
limit described in Section 1.5(e), shall be appropriately adjusted by the
Administrator. In the event of any change in the number of shares of Common
Stock outstanding by reason of any other event or transaction, the Administrator
may, but need not, make such adjustments in the number and class of shares of
Common Stock with respect to which awards: (i) may be granted under Article II
hereof and (ii) granted to any one employee of the Company or a subsidiary
during any one calendar year, in each case as the Administrator may deem
appropriate.
(b) Outstanding Restricted Stock and Performance Shares. Unless the
Administrator in its sole and absolute discretion otherwise determines, any
securities or other property (including dividends paid in cash) received by a
grantee with respect to a share of restricted stock, the issue date with respect
to which occurs prior to such event, but which has not vested as of the date of
such event, as a result of any dividend, stock split, reverse stock split,
recapitalization, merger, consolidation, combination, exchange of shares or
otherwise will not vest until such share of restricted stock vests, and shall be
promptly deposited with the Company or other custodian designated pursuant to
Section 2.7(c) hereof.
The Administrator may, in its absolute discretion, adjust any grant of
shares of restricted stock, the issue date with respect to which has not
occurred as of the date of the occurrence of any of the following events, or any
grant of performance shares, to reflect any dividend, stock split, reverse stock
split, recapitalization, merger, consolidation, combination, exchange of shares
or similar corporate change as the Administrator may deem appropriate to prevent
the enlargement or dilution of rights of grantees.
(c) Outstanding Options, Stock Appreciation Rights and Dividend
Equivalent Rights -- Increase or Decrease in Issued Shares Without
Consideration. Subject to any required action by the stockholders of the
Company, in the event of any increase or decrease in the number of issued shares
of Common Stock resulting from a subdivision or consolidation of shares of
Common Stock or the payment of a stock dividend (but only on the shares of
Common Stock), or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company, the Administrator
shall proportionally adjust the number of shares of Common Stock subject to each
outstanding option and stock appreciation right, the exercise price-per-share of
Common Stock of each such option and stock appreciation right and the number of
any related dividend equivalent rights.
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(d) Outstanding Options, Stock Appreciation Rights, Restricted Stock
Units and Dividend Equivalent Rights -- Certain Mergers. Subject to any required
action by the stockholders of the Company, in the event that the Company shall
be the surviving corporation in any merger or consolidation (except a merger or
consolidation as a result of which the holders of shares of Common Stock receive
securities of another corporation), each option, stock appreciation right and
dividend equivalent right outstanding on the date of such merger or
consolidation shall pertain to and apply to the securities which a holder of the
number of shares of Common Stock subject to such option, stock appreciation
right, restricted stock unit or dividend equivalent right would have received in
such merger or consolidation.
(e) Outstanding Options, Stock Appreciation Rights, Restricted Stock
Units and Dividend Equivalent Rights -- Certain Other Transactions. In the event
of (i) a dissolution or liquidation of the Company, (ii) a sale of all or
substantially all of the Company's assets, (iii) a merger or consolidation
involving the Company in which the Company is not the surviving corporation or
(iv) a merger or consolidation involving the Company in which the Company is the
surviving corporation but the holders of shares of Common Stock receive
securities of another corporation and/or other property, including cash, the
Administrator shall, in its absolute discretion, have the power to:
(i) cancel, effective immediately prior to the occurrence of such
event, each option, stock appreciation right and restricted stock
unit (including each dividend equivalent right related thereto)
outstanding immediately prior to such event (whether or not then
exercisable), and, in full consideration of such cancellation, pay
to the grantee to whom such option or stock appreciation right was
granted an amount in cash, for each share of Common Stock subject to
such option or stock appreciation right, respectively, equal to the
excess of (x) the value, as determined by the Administrator in its
absolute discretion, of the property (including cash) received by
the holder of a share of Common Stock as a result of such event over
(y) the exercise price of such option or stock appreciation right;
or
(ii) provide for the exchange of each option, stock appreciation
right and restricted stock unit (including any related dividend
equivalent right) outstanding immediately prior to such event
(whether or not then exercisable) for an option on, stock
appreciation right, restricted stock unit and dividend equivalent
right with respect to, as appropriate, some or all of the property
which a holder of the number of shares of Common Stock subject to
such option, stock appreciation right or restricted stock unit would
have received and, incident thereto, make an equitable adjustment as
determined by the Administrator in its absolute discretion in the
exercise price of the option, stock appreciation right or restricted
stock unit, or the number of shares or amount of property subject to
the option, stock appreciation right, restricted stock unit or
dividend equivalent right or, if appropriate, provide for a cash
payment to the grantee to whom such option, stock appreciation right
or restricted stock unit was granted in partial consideration for
the exchange of the option, stock appreciation right or restricted
stock unit.
(f) Outstanding Options, Stock Appreciation Rights, Restricted Stock
Units and Dividend Equivalent Rights -- Other Changes. In the event of any
change in the capitalization of the Company or a corporate change other than
those specifically referred to in Sections 3.7(c), (d) or (e) hereof, the
Administrator may, in its absolute discretion, make such adjustments in the
number and class of shares subject to options, stock appreciation rights,
restricted stock units and dividend equivalent rights outstanding on the date on
which such change occurs and in the per-share exercise price of each such option
and stock appreciation right as the Administrator may consider appropriate to
prevent dilution or enlargement of rights. In addition, if and to the extent the
Administrator determines it is appropriate, the Administrator may elect to
cancel each option and stock appreciation right (including each dividend
equivalent right related thereto) outstanding immediately prior to such event
(whether or not then exercisable), and, in full consideration of such
cancellation, pay to the grantee to whom such option or stock appreciation right
was granted an amount in cash, for each share of Common Stock subject to such
option or stock appreciation right, respectively, equal to the excess of (i) the
Fair Market Value of Common Stock on the date of such cancellation over (ii) the
exercise price of such option or stock appreciation right.
(g) No Other Rights. Except as expressly provided in the Plan, no
grantee shall have any rights by reason of any subdivision or consolidation of
shares of stock of any class, the payment of any dividend, any increase
12
or decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of Common Stock subject to an award or the
exercise price of any option or stock appreciation right.
3.8 Change in Control
(a) Change in Control Defined. For purposes of this Section 3.8, "Change
in Control" shall mean the occurrence of any of the following:
(i) any person or "group" (within the meaning of Section 13(d)(3)
of the 1934 Act), other than Oaktree Capital Management, LLC and its
related entities or Peter C. Georgiopoulos, acquiring "beneficial
ownership" (as defined in Rule 13d-3 under the 1934 Act), directly
or indirectly, of fifty percent (50%) or more of the aggregate
voting power of the capital stock ordinarily entitled to elect
directors of the Company;
(ii) the sale of all or substantially all of the Company's assets
in one or more related transactions to a person other than such a
sale to a subsidiary of the Company which does not involve a change
in the equity holdings of the Company or to an entity which Oaktree
Capital Management, LLC or Peter C. Georgiopoulos directly or
indirectly controls; or
(iii) any merger, consolidation, reorganization or similar event of
the Company or any of its subsidiaries, as a result of which the
holders of the voting stock of the Company immediately prior to such
merger, consolidation, reorganization or similar event do not
directly or indirectly hold at least fifty-one percent (51%) of the
aggregate voting power of the capital stock of the surviving entity.
Notwithstanding the foregoing, for each award subject to Section 409A of
the Code, a Change in Control shall be deemed to occur under this Plan with
respect to such Award only if a change in the ownership or effective control of
the Company or a change in the ownership of a substantial portion of the assets
of the Company shall also be deemed to have occurred under Section 409A of the
Code.
(b) Effect of a Change in Control. Unless the Administrator provides
otherwise in a Award Agreement, upon the occurrence of a Change in Control:
(i) notwithstanding any other provision of this Plan, any award
then outstanding shall become fully vested and any award in the form
of an option or stock appreciation right shall be immediately
exercisable;
(ii) to the extent permitted by law, the Administrator may, in its
sole discretion, amend any Award Agreement in such manner as it
deems appropriate;
(iii) a grantee who incurs a termination of employment for any
reason, other than a dismissal for cause, concurrent with or within
one year following the Change in Control may exercise any
outstanding option or stock appreciation right, but only to the
extent that the grantee was entitled to exercise the award on his
termination of employment date, until the earlier of (A) the
original expiration date of the award and (B) the later of (x) the
date provided for under the terms of Section 2.5 without reference
to this Section 3.8(b)(iii) and (y) the first anniversary of the
grantee's termination of employment.
(c) Miscellaneous. Whenever deemed appropriate by the Administrator, any
action referred to in paragraph (b)(ii) of this Section 3.8 may be made
conditional upon the consummation of the applicable Change in Control
transaction.
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3.9 Right of Discharge Reserved
Nothing in the Plan or in any Award Agreement shall confer upon any
grantee the right to continue his employment with the Company or affect any
right that the Company may have to terminate such employment.
3.10 Non-Uniform Determinations
The Administrator's determinations under the Plan need not be uniform and
may be made by it selectively among persons who receive, or who are eligible to
receive, awards under the Plan (whether or not such persons are similarly
situated). Without limiting the generality of the foregoing, the Administrator
shall be entitled, among other things, to make non-uniform and selective
determinations, and to enter into non-uniform and selective Award Agreements, as
to (a) the persons to receive awards under the Plan, and (b) the terms and
provisions of awards under the Plan.
3.11 Other Payments or Awards
Nothing contained in the Plan shall be deemed in any way to limit or
restrict the Company from making any award or payment to any person under any
other plan, arrangement or understanding, whether now existing or hereafter in
effect.
3.12 Headings
Any section, subsection, paragraph or other subdivision headings contained
herein are for the purpose of convenience only and are not intended to expand,
limit or otherwise define the contents of such subdivisions.
3.13 Effective Date and Term of Plan
(a) Adoption; Stockholder Approval. The Plan was adopted by the Board
and although the Company intends to obtain approval of the Plan by the Company's
stockholders within the time period required to allow grants of options
hereunder to qualify as incentive stock options, awards under the Plan prior to
such stockholder approval may, but need not, be made subject to such approval.
(b) Termination of Plan. Unless sooner terminated by the Board or
pursuant to Paragraph (a) above, the provisions of the Plan respecting the grant
of incentive stock options shall terminate on the tenth anniversary of the
adoption of the Plan by the Board, and no incentive stock option awards shall
thereafter be made under the Plan. All such awards made under the Plan prior to
its termination shall remain in effect until such awards have been satisfied or
terminated in accordance with the terms and provisions of the Plan and the
applicable Award Agreements.
3.14 Restriction on Issuance of Stock Pursuant to Awards
The Company shall not permit any shares of Common Stock to be issued
pursuant to Awards granted under the Plan unless such shares of Common Stock
are fully paid and non-assessable under applicable law.
3.15 Governing Law
Except to the extent preempted by any applicable federal law, the Plan
will be construed and administered in accordance with the laws of the State
of New York, without giving effect to principles of conflict of laws.
3.16 Compliance with Section 409A of the Code
Notwithstanding anything to the contrary contained in the Plan or in
any Agreement, to the extent that the Administrator determines that the Plan
or any Award is subject to Section 409A of the Code and fails to comply with
the requirements of Section 409A of the Code, the Administrator reserves the
right to amend or terminate the
14
Plan and/or amend, restructure, terminate or replace the Award in order to cause
the Award to either not be subject to Section 409A of the Code or to comply with
the applicable provisions of such section.
15
EXHIBIT A
GENCO SHIPPING & TRADING LIMITED
2005 EQUITY INCENTIVE PLAN
FORM OF OPTION AGREEMENT
THIS OPTION AGREEMENT made this [ ] day of , 2005, between Genco Shipping &
Trading Limited, (the "Company") and [ ] (the "Optionee").
WHEREAS, the Company desires to carry out the purpose of the Genco Shipping &
Trading Limited 2005 Equity Incentive Plan (the "Plan"), a copy of which is
attached hereto as Exhibit A, by affording the Optionee an opportunity to
purchase its common stock;
WHEREAS, any terms defined in the Plan shall have the same meaning in this
Agreement;
NOW THEREFORE, under the Plan and in consideration of the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Grant of Option - The Company hereby grants to the Optionee the right
and option (the "Option") to purchase [ ] shares of common
stock of the Company, par value $ per share (the "Shares") on
the terms and conditions set forth under the Plan and this Agreement.
The Options issued pursuant to this Agreement shall constitute
nonqualified stock options.
2. Option Price - Subject to Section 5 below, the purchase price of the
Shares covered by the Option shall be $ . per Share (equaling the
offer price per Share in the Company's follow-on offering) which shall
be paid in full at the time of exercise. The Option Price is the
purchase price per Share times the number of Options to be exercised.
The Option Price may be adjusted by the Administrator as provided in
Section 3.7 of the Plan.
3. Method of Exercise - Subject to the terms and conditions of the Plan
and this Agreement, the vested Options may be exercised upon notice to
the Company on the form provided by the Administrator and delivery of
the Option Price attributable to the optioned Shares to be purchased.
4. Time and Method of Payment - The Option Price for the optioned Shares
to be purchase shall be paid in full at the time an Option is
exercised. The Option Price may be paid in a combination of cash and
Shares having a Market Price equal to the balance of the Option Price.
A valid exercise requires that the Optionee deliver the form of
exercise and full payment for the optioned Shares to be purchased to the
Company.
5. Dividend Equivalents - For any full calendar year following the date of
grant in which the dividends per share distributed to Company
shareholders exceeds three percent (3%) of the Option Price as of the
grant date, the Option Price shall be reduced by the amount of the
dividends the Optionee would have received with respect to the optioned
Shares had the Optionee been a shareholder of record on the record date
with respect to such dividend distribution.
6. Vesting and Term of Option - The Options shall vest with respect to 25% of
the Options on ,[ ] and each of the three anniversaries thereafter,
conditioned upon the Optionee's continued service as an employee of the
Company or an affiliate (an "Employee") or as a director of the Company
from the date of this Agreement until the date such Options vest. In the
event the Optionee's ceases to be a member of the Board or an Employee, as
applicable, for any reason, the Optionee shall forfeit all rights to the
non-vested Options. Except as otherwise permitted by the Administrator,
this Option shall not be exercisable to any extent prior to , [ ] or after
, [ ].
7. Exercise - During the term of the Option, a vested Option may be
exercised in one or more exercises in part or in whole at any time. The
Administrator, as provided in Section 3.1(c) of the Plan, may accelerate
the
16
exercisability of the Option at such time and under such circumstances as
the Administrator, in its sole discretion, deems appropriate.
8. Termination of Employment or Board Membership - Upon the Optionee's
termination of service as an Employee or as a member of the Board for
any reason, any Options not vested shall be forfeited. Except as
provided in the case of the Optionee's termination of employment by
reason of the Optionee's death, Disability or Retirement, each Option
granted hereunder shall expire, to the extent vested and not theretofore
exercised, upon the earlier of the date the Optionee ceases to be an
Employee or a member of the Board, or when the Option would otherwise
expire.
9. Death, Disability or Retirement of Optionee - If an Optionee shall die
or become Disabled while an Employee or member of the Board, or Retire,
all vested Options theretofore granted to such Optionee may be exercised
pursuant to their terms. In the event of death or incapacity an Option
shall be exercised by a legal representative of an Optionee, written
notice of such exercise shall be accompanied by a certified copy of
letters testamentary or equivalent proof of the right of such legal
representative to exercise such Option.
10. Taxes - If the Administrator shall so require, as a condition of
exercise of an Option, the Optionee shall agree that no later than the
date of exercise, the Optionee will pay to the Company or make
arrangements satisfactory to the Administrator regarding payment of any
federal, state or local taxes of any kind required by law to be withheld
in connection with the exercise of an Option.
11. Nontransferability - The Option is nontransferable other than by will
or by the laws of descent and distribution.
12. Legal Requirements - At the time of the exercise of any Option, the
Company or the Administrator may postpone the date of exercise until
such time as the Company has available for delivery to the Optionee a
prospectus meeting the requirements of all applicable securities laws,
and no Shares shall be issued or transferred upon the exercise of any
Option unless and until all legal requirements applicable to the
issuance or transfer of Shares have been complied with to the
satisfaction of the Company.
13. Representation of Optionee - Prior to the issuance of any Shares
pursuant to the exercise of Options hereunder, at the request of the
Administrator, the Optionee shall represent in writing to the Company
that it is the Optionee's intention to acquire the Shares with respect
to which the Option is to be exercised for investment and not with a
view to the distribution thereof.
14. Changes in Capital Structure - As determined by the Administrator within
the discretion granted under Section 7 of the Plan, if any change
described in Section 7 of the Plan is made to the Shares, an appropriate
adjustment in the number of Shares for which Options which have been or
may be granted under the Plan and the Option Price will be made.
15. Rights as a Shareholder - An Optionee shall have no rights as a
shareholder with respect to any Shares covered by the Option until the
date of the issuance of a stock certificate for such Shares. No
adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions of other
rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 5 above and
Section 7 of the Plan.
16. Amendment and Termination of the Plan - The Board at any time and from
time to time may suspend, terminate, modify or amend the Plan; provided,
however, except as provided in Section 7 of the Plan, no suspension,
termination, modification or amendment of the Plan may, without the
express written consent of the Optionee involved, adversely affect any
Option previously granted to the Optionee.
17. Governing Law - The Plan and this Agreement are governed by the internal
substantive laws but not the choice of law rules of New York.
17
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS OPTION AGREEMENT ON
THE DATE FIRST WRITTEN ABOVE.
GENCO SHIPPING & TRADING LIMITED
By:
--------------------
Name: Peter C. Georgiopoulos
Title: Director
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