Exhibit 10.12


 


GENERAL MARITIME CORPORATION CHANGE OF CONTROL SEVERANCE PROGRAM FOR
U.S. EMPLOYEES


 


(effective as of December 16, 2008)


 


The
Board of Directors of General Maritime Corporation (“General Maritime”)
recognizes that the possibility of a Change of Control and the uncertainty it
creates may result in the inability to recruit qualified employees or the loss
or distraction of qualified employees of the Company to the detriment of
General Maritime and its shareholders.


 


The
Board considers the avoidance of such inability, loss and distraction to be
essential to protecting and enhancing the best interests of General Maritime
and its shareholders.  The Board also
believes that when a Change of Control is perceived as imminent, or is
occurring, the Board should be able to receive and rely on disinterested
service from employees regarding the best interests of General Maritime and its
shareholders without risk that employees might be distracted or concerned by
the personal uncertainties created by the perception of an imminent or
occurring Change of Control.


 


In
addition, the Board believes that it is consistent with the Company’s
employment practices and policies and in the best interests of General Maritime
and its shareholders to treat fairly its employees whose employment terminates
in connection with or following a Change of Control.


 


Accordingly,
the Board has determined that appropriate steps should be taken to assure the
Company of the continued employment and attention and dedication to duty of its
employees and to seek to ensure the availability of their continued service,
notwithstanding the possibility or occurrence of a Change of Control.


 


Therefore,
in order to fulfill the above purposes, the following plan has been developed
and is hereby adopted.


 


1.              Establishment of Plan. 
As of the Effective Date, the General Maritime Change of Control
Severance Program for U.S. Employees (the “Plan”) is hereby established as set
forth in this document.


 


2.              Definitions.  As used
herein the following words and phrases shall have the following respective
meanings:


 


(a)     “Associate” means any
regular, full-time, shore-based employee of the Company based in an office in
the United States.


 

















 


(b)    “Base Salary” means the
amount a Participant is entitled to receive as salary on an annualized basis,  excluding all bonus, overtime and
incentive compensation, payable by the Company as consideration for the
Participant’s services.


 


(c)     “Board” means the Board of
Directors of General Maritime.


 


(d)    “Bonus Amount” means the
cash bonus on an annualized basis earned by the Participant in the fiscal year
immediately preceding the year in which his or her employment was terminated,
including any amounts which are deferred.


 


(e)     “Cause”
means any termination of a Participant’s employment because of any of the
following events:


 


(i)                                     any act or
failure to act by the Participant involving fraud, theft or embezzlement;


 


(ii)                                  the willful and
continued failure of the Participant to (A) perform substantially the
Participant’s duties with the Company (other than any such failure resulting
from incapacity due to physical or mental illness) or (B) the Participant’s
failure to follow the directions of an officer of the Company to whom such
Participant reports or of the Board of Directors;


 


(iii)                               the willful
engagement by the Participant in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company; or


 


(iv)                              the Participant’s
conviction of (or a plea of nolo  contendere to) a crime that
constitutes a felony or other crime involving moral turpitude, in either case
within the meaning of applicable law.


 


(f)     “Change of Control” means
the first to occur of any of the following events:


 


(i)                                     any “person”
(as such term is used in Sections 3(a)(9) and 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) or “group” (within the
meaning of Section 13(d)(3) of the Exchange Act), other than Peter C.
Georgiopoulos or entities which he directly or indirectly controls (as defined
in Rule 12b-2 under the Exchange Act), acquiring “beneficial ownership”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of thirty percent (30%) or more of the Voting Stock of General Maritime;


 


(ii)                                  the sale of all
or substantially all of General Maritime’s assets in one or more related
transactions to a “person” (as such term is used in Sections 3(a)(9) and
13(d) of the Exchange Act) other than such a sale (x) to a subsidiary
of General Maritime which does not involve a change in the equity holdings of
General Maritime or (y) 


 


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to
Peter C. Georgiopoulos or entities which he directly or indirectly controls;


 


(iii)                               any merger,
consolidation, reorganization or similar event of General Maritime, as a result
of which the holders of the Voting Stock of General Maritime immediately prior
to such merger, consolidation, reorganization or similar event do not directly
or indirectly hold at least fifty-one percent (51%) of the Voting Stock of the
surviving entity;


 


(iv)                              a majority of
the members of the Board of Directors are no longer Continuing Directors; as
used herein, a “Continuing Director” means any member of the Board of Directors
who was a member of such Board of Directors as of the Effective Date; provided
that any person becoming a director subsequent to such date whose election or
nomination for election was supported by a majority of the directors who then
comprised the Continuing Directors shall be considered to be a Continuing
Director; or


 


(v)                                 General
Maritime adopts any plan of liquidation or dissolution providing for the
distribution of all or substantially all of its assets.


 


For purposes of the Change of Control definition, “General Maritime”
shall include any entity that succeeds to all or substantially all of the
business of General Maritime and “Voting Stock” shall mean capital stock of any
class or classes having general voting power, in the absence of specified
contingencies, to elect the directors of a corporation.


 


(g)        “Code” means the Internal
Revenue Code of 1986, as amended.


 


(h)        “Committee” means,
subject to Section 13, the Compensation Committee of the Board.


 


(i)          “Company” means
General Maritime and its direct and indirect subsidiaries and their respective
successor entities.


 


(j)          “Date of Termination”
shall have the meaning given in Section 4(b).


 


(k)         “Disability” means, in
connection with any termination of a Participant’s employment, a disability
entitling him or her to long-term disability benefits under any applicable
long-term disability plan of the Company, or in the absence of any such plan,
the Participant’s inability to perform his or her duties and responsibilities
customary for an employee in the Participant’s position for such period or
periods as the Committee may determine, whether or not continuous, due to
physical or mental incapacity or impairment as reasonably determined by a
qualified physician.


 


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(l)          “Effective Date”
means the date on which the Effective Time as defined in the Agreement and Plan
of Merger and Amalgamation, dated as of August 5, 2008, by and among the
Company, Arlington Tankers Ltd., Archer Amalgamation Limited, Galileo Merger
Corporation and General Maritime Subsidiary Corporation (formerly General Maritime
Corporation) occurs.


 


(m)        “Good Reason” means,
with respect to any Participant, the occurrence of any of the following events
after a Change of Control, without the Participant’s prior written consent: (i) a
reduction in the Participant’s Base Salary; (ii) a material diminution in
the Participant’s responsibilities, duties or authorities in comparison to the
responsibilities, duties or authorities of the Participant immediately prior to
the Change of Control; (iii) a material diminution in the responsibilities,
duties or authorities of the individual or body to whom the Participant
reports, (iv) an assignment of the Participant to an office more than
fifty (50) miles from the location where the Participant was based and
performed services immediately prior to the Change of Control, provided that
such change is a material change in the geographic location of the Participant’s
office, or (v) a material breach by the Company of the Participant’s
employment agreement or any other agreement under which the Participant
provides services.


 


(n)        “Participant” means an
Associate who meets the eligibility requirements of Section 3.


 


(o)        “Plan” means the
General Maritime Corporation Change of Control Severance Program for U.S.
Employees.


 


(p)        “Qualifying Termination”
means a termination of a Participant’s employment within two (2) years
following a Change of Control, in the case of Tier 1 Participants and, within
one (1) year following a Change of Control, in the case of Tier 2
Participants, (i) by the Company other than for Cause, death or Disability
or (ii) by the Participant for Good Reason.


 


(q)        “Release” shall have
the meaning given in Section 4(h).


 


(r)         “Severance Benefit”
shall have the meaning given in Section 4(b).


 


(s)         “Tier 1 Participants”
means the Associates designated on Schedule I attached hereto.


 


(t)         “Tier 2 Participants”
means all Associates other than (i) Tier 1 Participants and (ii) Associates
who have entered into a written employment agreement with the Company as of the
date of a Change of Control which provides for Associate compensation in the
event of any termination of the Associate’s employment following a change of
control by the Company without cause or by the Associate for good reason, each
as defined in such agreement.


 


(u)        “Year of Service” means
a twelve (12) month continuous period of employment or a portion of such
period, including periods of authorized vacation, authorized leave of absence
and short-term disability leave, with the Company or its predecessors or
successors rounded up to the nearest whole number.


 


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3.              Eligibility.  Unless
otherwise determined by the Committee, each Associate (other than Associates
who have entered into a written employment agreement with the Company as of the
date of a Change of Control which provides for Associate compensation in the
event of any termination of the Associate’s employment following a change of
control by the Company without cause or by the Associate for good reason, each
as defined in such agreement) who is an Associate on the date of a Change of
Control shall be a Participant in the Plan.


 


4.              Severance
Benefits.


 


(a)         Right to
Severance Benefit.  A
Participant shall be entitled to receive from the Company a Severance Benefit
in the amount provided in Section 4(b) if a Participant’s employment
is terminated due to a Qualifying Termination.


 


(b)        Severance
Benefits.  In the event that a
Participant’s employment is terminated due to a Qualifying Termination, the
Company shall pay such Participant, within fifteen (15) days of the date such
termination takes effect (the “Date of Termination”) or, if later, on the date
the Participant’s Release ceases to be revocable, a lump sum in cash (the “Severance
Benefit”) equal to (i) the sum of such Participant’s then current Base
Salary and Bonus Amount multiplied by (ii) 2 for Tier 1 Participants and 1
for Tier 2 Participants.  For purposes of
this Section 4(b), the then current Base Salary shall be determined
immediately prior to the Qualifying Termination (without regard to any
reductions therein which constitute Good Reason for termination by such
Participant).


 


(c)         Maximum
Severance Benefit. 
Notwithstanding Section 4(b) above, the maximum amount payable
under Sections 4(b) and (c) shall be the amount required in order for
the Plan to comply with Section 2510.3-2(b)(1)(ii) of the Department
of Labor Regulations.


 


(d)        Other
Benefits Payable.  Nothing in
the Plan shall prevent or limit a Participant’s continuing or future
participation in any benefit, bonus, incentive or other plan, program,
arrangement or policy provided by the Company for which a Participant and/or a
Participant’s dependents may qualify. 
Amounts that are vested benefits or that a Participant and/or a
Participant’s dependents are otherwise entitled to receive under any plan,
program, arrangement, or policy of the Company shall be payable in accordance
with such plan, program, arrangement or policy. 
The Severance Benefit provided pursuant to Section 4(b) above
shall be provided in addition to, and not in lieu of, all other accrued or
vested or earned but deferred compensation, rights, options or other benefits
which may be owed to a Participant upon or following termination, including but
not limited to accrued vacation or sick pay, amounts or benefits payable under
any bonus or other compensation plans, stock incentive plans, life insurance
plans, health plans, disability plans or similar or successor plans.


 


(e)         Certain
Reduction of Payments by the Company.


 


(i)              For
purposes of this Section 4(g): (i) a “Payment” shall mean any payment
or distribution in the nature of compensation to or for the benefit of a
Participant, whether paid or payable pursuant to the Plan or otherwise; (ii) “Severance
Payment” shall mean 


 


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a
Payment paid or payable pursuant to the Plan (disregarding this Section 4(g));
(iii) “Present Value” shall mean such value determined in accordance with
Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code; and (iv) “Reduced
Amount” shall mean an amount expressed in Present Value that maximizes the
aggregate Present Value of Severance Payments without causing any Payment to be
nondeductible because of Section 280G of the Code.


 


(ii)             The
Committee shall select, in its discretion, a nationally recognized accounting
firm (the “Accounting Firm”) to make the determinations contemplated by this Section 4(g).  Anything in the Plan to the contrary
notwithstanding, in the event that the Accounting Firm determines that receipt
of all Payments would subject a Participant to tax under Section 4999 of
the Code, the aggregate Severance Payments to the Participant shall be reduced
(but not below zero) to meet the definition of Reduced Amount.


 


(iii)            If
the Accounting Firm determines that aggregate Severance Payments to the
Participant should be reduced to the Reduced Amount, the Company shall promptly
give the Participant notice to that effect and a copy of the detailed
calculation thereof, and the Participant may then elect, in his or her sole discretion,
which and how much of the Severance Payments shall be eliminated or reduced (as
long as after such election the Present Value of the aggregate Severance
Payments equals the Reduced Amount), and shall advise the Company in writing of
his or her election within fifteen (15) days of his or her receipt of
notice.  If no such election is made by
the Participant within such fifteen (15)-day period, the Company may elect
which of such Severance Payments shall be eliminated or reduced (as long as
after such election the Present Value of the aggregate Severance Payments
equals the Reduced Amount) and shall notify the Participant promptly of such
election.  All determinations made by the
Accounting Firm under this Section 4(g) shall be binding upon the Company
and the Participant and shall be made within 60 days of a termination of
employment of the Participant.  As
promptly as practicable following such determination, the Company shall pay to
or distribute for the benefit of the Participant such Severance Payments as are
then due to the Participant under the Plan and shall promptly pay to or
distribute for the benefit of the Participant in the future such Severance
Payments as become due to the Participant under the Plan.


 


(iv)           As
a result of the uncertainty in the application of Section 4999 of the Code
at the time of the initial determination by the Accounting Firm hereunder, it
is possible that amounts will have been paid or distributed by the Company to
or for the benefit of a Participant pursuant to the Plan which should not have
been so paid or distributed (“Overpayment”) or that additional amounts which
will have not been paid or distributed by the Company to or for the benefit of
a Participant pursuant to the Plan could have been so paid or distributed (“Underpayment”),
in each case, consistent with the calculation of the Reduced Amount
hereunder.  In the event that the
Accounting Firm, based upon the assertion of a deficiency by the Internal
Revenue Service against either the Company or the Participant which the
Accounting Firm believes has a high probability of success determines that an
Overpayment has been made, any such Overpayment paid or distributed by the
Company to or for the benefit of a Participant shall be repaid to the Company
together with interest at the applicable federal rate provided for in Section 7872(f)(2) of
the Code; provided, however, that no such amount shall be payable by a
Participant to the Company if and to the extent such repayment would not either
reduce the amount on which the Participant is subject to tax under Section 1
and Section 


 


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4999
of the Code or result in a refund of such taxes.  In the event that the Accounting Firm, based
upon controlling precedent or substantial authority, determines that an
Underpayment has occurred, any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Participant together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the Code.


 


(v)            All
fees and expenses of the Accounting Firm in implementing the provisions of this
Section 4(g) shall be borne by the Company.


 


(f)         Release and
Waiver.  Notwithstanding any
other provision of the Plan, the right of a Participant to receive severance
benefits hereunder shall be subject to the execution and non-revocation by the
Participant of a release and waiver substantially in the form attached hereto
as Exhibit A (a “Release”) within twenty-one (21) days or, if
applicable, forty-five (45) days after receipt of such Release from the
Company.


 


5.              Full Settlement. 
Subject to Section 4(g), the Company’s obligation to make the
payments provided for in the Plan and otherwise to perform its obligations
hereunder shall be absolute and unconditional and shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action
which the Company may have against a Participant or others.  In no event shall a Participant be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to such Participant under any of the provisions of the
Plan.  The Company shall pay as incurred
(within fifteen (15) days following the Company’s receipt of an invoice from a
Participant), to the full extent permitted by law, all legal fees and expenses
that the Participant may reasonably incur as a result of any contest by the
Company, the Participant or others of the validity or enforceability of, or
liability under, any provision of the Plan or any guarantee of performance
thereof (including as a result of any contest by the Participant about the
amount of any payment pursuant to the Plan), plus, in each case, interest on
any delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of
the Code; provided, that the Company shall not be obligated to reimburse a
Participant for legal fees and expenses incurred in connection with a claim  that is frivolous or maintained in bad faith and in such
event the Company shall be entitled to recoup any such fees and expenses which
it has already paid on behalf of the Participant.


 


6.              Controlling Law.  The
Plan shall be governed by the laws of the State of New York, without reference
to the principles of conflicts of law.


 


7.              Amendments; Termination. 
General Maritime and the Board reserve the right to amend, modify,
suspend or terminate the Plan at any time; provided that no such amendment,
modification, suspension or termination after the occurrence of a Change of
Control that has the effect of reducing or diminishing the right of any
Associate, shall be effective without the written consent of the Associate.


 


8.              Assignment.  General
Maritime shall require any corporation, entity, individual or other person who
is the successor (whether direct or indirect by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all the
business and/or assets of General Maritime to expressly assume and agree to
perform, by a written agreement in form and in 


 


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substance
satisfactory to General Maritime, all of the obligations of General Maritime
under the Plan.  It is a condition of the
Plan, and all rights of each person eligible to receive benefits under the Plan
shall be subject hereto, that no right or interest of any such person in the
Plan shall be assignable or transferable in whole or in part, except by
operation of law, including, but not by way of limitation, lawful execution,
levy, garnishment, attachment, pledge, bankruptcy, alimony, child support or
qualified domestic relations order.


 


9.              Withholding.  The
Company may withhold from any amount payable or benefit provided under the Plan
such federal, state, local, foreign and other taxes as are required to be
withheld pursuant to any applicable law or regulation.


 


10.            Gender and Plurals. 
Wherever used in the Plan document, words in the masculine gender shall
include masculine or feminine gender, and, unless the context otherwise
requires, words in the singular shall include the plural, and words in the
plural shall include the singular.


 


11.            Plan Controls.  In the
event of any inconsistency between the Plan document and any other
communication regarding the Plan, the Plan document controls.


 


12.            Terms of Employment. 
Until the occurrence of a Change of Control, neither the establishment
of the Plan, nor any modification thereof, nor the creation of any fund, trust
or account, nor the payment of any benefits shall be construed as giving any
Associate, or any person whomsoever, the right to be retained in the service of
the Company, and all Associates shall remain subject to discharge to the same
extent as if the Plan had never been adopted.


 


13.            Post-Change of Control Committee.  The Plan shall be administered by the
Committee, provided that in the event of an impending Change of Control, the
Committee may appoint a person independent of the Company or persons operating
under its control or on its behalf to be the Committee effective upon the
occurrence of a Change of Control and such Committee shall not be removed
following a Change of Control.  The
decision of the Committee upon all matters within the scope of its authority
shall be conclusive and binding on all parties.


 


14.            Benefits Claims and Appeals. 
The Committee shall establish a claims and appeals procedure.  The Committee shall have full discretionary
authority to determine the amount and timing of any benefit to be paid under
the Plan.  Unless otherwise required by
applicable law, such procedures will provide that the Participant has not less
than sixty (60) days following receipt of any adverse benefit determination
within which to appeal the determination in writing with the Committee, and
that the Committee must respond in writing within sixty (60) days of receiving the
appeal, specifically identifying those Plan provisions on which the benefit
denial was based and indicating what, if any, information the Participant must
supply in order to perfect a claim for benefits.


 


15.            Indemnification.  To
the extent permitted by law, the Company shall indemnify the Committee from all
claims for liability, loss, or damage (including the payment of expenses in
connection with defense against such claims) arising from any act or failure to
act in connection with the Plan.


 


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16.            Joint and Several Liability. 
General Maritime and each of its direct and indirect subsidiaries shall
be jointly and severally liable for all obligations of the Company under the
Plan.


 


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GENERAL MARITIME CORPORATION CHANGE OF CONTROL SEVERANCE PROGRAM FOR
U.S. EMPLOYEES


 


Schedule I


 


Tier 1 Participants


 


1.                                       Milton Gonzalez


2.                                       John N.
Mortsakis


3.                                       Kevin Coyne


4.                                       Brian D. Kerr


5.                                       Constantine D.
Hatziemanuel


6.                                       Steinar Ropeid


7.                                       Peter J.
Briscoe


8.                                       Peter S. Bell


9.                                       Leonidas
Vrondissis


10.                                 Dean Scaglione


 


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