Seaspan Corporation Change of Control Severance Plan for Employees



 Exhibit 4.34 
 

 
 SEASPAN CORPORATION 
 CHANGE OF CONTROL SEVERANCE PLAN 
 FOR EMPLOYEES OF SEASPAN SHIP MANAGEMENT LTD. 
 The Board of Directors of Seaspan Corporation (“Seaspan”) recognizes that the possibility of a Change of Control and the uncertainty it creates may materially
affect the ability of Seaspan Ship Management Ltd. (“SSML”), as one of its management companies, to recruit qualified employees or result in the loss or distraction of qualified employees of SSML to the detriment of Seaspan and its
shareholders. 
 First, the Board believes avoiding aforementioned loss and distraction would protect and enhance the best interests of Seaspan and its
shareholders. Second, the Board believes that when a Change of Control is perceived as imminent, or is occurring, the Board should receive committed service from SSML employees regarding the best interests of Seaspan and its shareholders unaffected
by the personal uncertainties associated with an imminent or occurring Change of Control of Seaspan. 
 Third, the Board believes that it is in the best
interests of Seaspan and its shareholders to treat fairly the employees of SSML, as one of its management companies, 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 Seaspan and SSML of the continued employment, attention and dedication to duty of
SSML employees and to seek to ensure the availability of their continued service, notwithstanding the possibility or occurrence of a Change of Control. 
 In
order to fulfil the above purposes, the following plan has been developed and is hereby adopted. 
  

	1.	Establishment of Plan. As of the Effective Date, the Seaspan Corporation Change of Control Severance Plan for Employees of Seaspan Ship Management Ltd. (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)	“Employee” means any regular, full-time, shore-based employee of SSML based in an office in Canada. 

  

	 	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
SSML as consideration for the Participant’s services. 

  

	 	c)	“Board” means the Board of Directors of Seaspan. 

  

	 	d)	“Bonus Amount” means the cash and share 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. In the event that a cash or share bonus was not paid out in the preceding year, a three year average will apply. 

  

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	 	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 (A) to perform substantially the Participant’s duties with SSML (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 employee of SSML to whom such Participant reports; 

  

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

  

	 	(iv)	any other grounds that would constitute just cause. 

  

	 	f)	“Change of Control” has the meaning ascribed to it in Schedule “A” attached hereto. For purposes of the Change of Control definition, “Seaspan” shall
include any entity that succeeds to all or substantially all of the business of Seaspan. 

  

	 	g)	“Committee” means the Compensation Committee of the Board. 

  

	 	h)	“Company” means Seaspan and its direct and indirect subsidiaries and their respective successor entities. 

  

	 	i)	“Date of Termination” shall have the meaning given in Section 3(b). 

  

	 	j)	“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 SSML, 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. 

  

	 	k)	“Effective Date” means January 1, 2009. 

  

	 	l)	“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 SSML of the Participant’s employment agreement or any other agreement under which the Participant provides services. 

  

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	 	m)	“Participant” means an Employee who is listed in Schedule “B” attached hereto and employed at the time of the Change of Control. The list of Participants may be
amended in accordance with Section 6 of the Plan. 

  

	 	n)	“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 and Tier 3 Participants, by (i) SSML other than for Cause, death or Disability or (ii) the Participant for Good Reason. 

  

	 	o)	“Release” shall have the meaning given in Section 3(f). 

  

	 	p)	“Severance Benefit” shall have the meaning given in Section 3(b). 

  

	 	q)	“Tier 1 Participants” means the Employees designated as Tier 1 Participants on Schedule “B” attached hereto. 

  

	 	r)	“Tier 2 Participants” means the Employees designated as Tier 2 Participants on Schedule “B” attached hereto. 

  

	 	s)	“Tier 3 Participants” means the Employees designated as Tier 3 Participants on Schedule “B” attached hereto. 

  

	 	t)	“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 SSML or its predecessors or successors rounded up to the nearest whole number. 

  

	3.	Severance Benefits. 

  

	 	a)	Right to Severance Benefit. A Participant shall be entitled to receive from Seaspan a Severance Benefit in the amount provided in Section 3(b) if a Participant’s
employment is terminated due to a Qualifying Termination. 

  

	 	b)	Severance Benefits. If a Participant’s employment is terminated due to a Qualifying Termination, Seaspan shall pay such Participant, within fifteen (15) days of the
date the 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”). The Severance Benefit shall be the sum
of such Participant’s then current Base Salary and Bonus Amount equivalent to 30 months for Tier 1 Participants, 18 months for Tier 2 Participants and 9 months for Tier 3 Participants. Such payment will be less any statutory deductions. For
purposes of this Section 3(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). For the
purpose of calculating the Bonus Amount for this Section 3(b), the cash equivalent of any share award granted to the Participant during the period used to determine the Bonus Amount shall be equal to the cash value of the shares as of the date
the share award was originally granted to the Participant. 

  

	 	c)	Full Vesting. In the event that a Participant’s employment is terminated due to a Qualifying Termination, such Participant will become fully vested in all outstanding
incentive awards (including, without limitation, any stock awards), in addition to payment of the Severance Benefit after the Change of Control occurs. 

  

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	 	d)	Group Benefits. In the event that a Participant’s employment is terminated due to a Qualifying Termination, the Participant’s group health, dental and life
insurance benefits will continue for three months subject to permission of the benefits carriers. The Participant will also receive an amount equal to the monthly premiums for a period of six months and individuals will have the option to convert
their group benefits to individual coverage subject to the terms of the benefits carrier. 

  

	 	e)	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 SSML for which a Participant or a Participant’s dependents may qualify. In the event that a Participant’s employment is terminated due to a Qualifying Termination, amounts that are vested benefits
or that a Participant or a Participant’s dependents are otherwise entitled to receive under any plan, program, arrangement, or policy of SSML shall be payable by Seaspan in accordance with such plan, program, arrangement or policy. The
Severance Benefit provided pursuant to Section 3(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. 

  

	 	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 Schedule “C” (a “Release”). 

  

	4.	Mitigation and Fees. A Participant shall not 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. Seaspan shall pay as incurred (within fifteen (15) days following Seaspan’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 Seaspan, the Participant or others of the validity or enforceability of, or liability under, any provision of the Plan or any guarantee of performance thereof provided that Seaspan 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 Seaspan shall be entitled to recoup any such fees and expenses which it has
already paid on behalf of the Participant. 

  

	5.	Controlling Law. The Plan shall be governed by the laws of the Province of British Columbia, without reference to the principles of conflicts of law.


  

	6.	Amendments; Termination. Seaspan reserves the right to amend, modify, suspend or terminate the Plan at any time. Except for the removal of a Participant contemplated below,
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 Participant shall be effective without the written consent of the Participant.
SSML will review the Participants identified in Schedule “B” from time to time and the Chief Executive Officer of SSML may add or remove Participants with the prior written consent of Seaspan. Upon any addition or removal of a Participant
from the Plan, Schedule “B” will be amended as required. 

  

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	7.	Assignment. Seaspan 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 Seaspan to expressly assume and agree to perform, by a written agreement in form and in substance satisfactory to Seaspan, all of the obligations of Seaspan 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. 

  

	8.	Withholding. Seaspan may withhold from any amount payable or benefit provided under the Plan such federal, provincial, local, foreign taxes or any other statutory deduction
as are required to be withheld pursuant to applicable law or regulation. 

  

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


  

	10.	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 Employee, or any person whomsoever, the right to be retained in the service of SSML. 

  

	11.	Indemnification. To the extent permitted by law, Seaspan shall indemnify SSML 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. 

  

	12.	Joint and Several Liability. Seaspan and each of its direct and indirect subsidiaries shall be jointly and severally liable for all obligations of SSML under the Plan.


  

			
	SEASPAN CORPORATION
		
	Per:	 	 /s/ Gerry Wang

	Name:	 	Gerry Wang
	Title:	 	Director
	
	SEASPAN SHIP MANAGEMENT LTD.
		
	Per:	 	 /s/ Kyle Washington

	Name:	 	Kyle Washington
	Title:	 	Director

  

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 SCHEDULE “A” 
 Definition of Change of Control 
 “Change of Control” means: 
  

	 	a)	the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of
Seaspan’s assets, except such a disposition to a member of the Existing Ownership Group; 

  

	 	b)	the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as such term is used in
Section 13(d)(3) of the Exchange Act) becomes the beneficial owner, directly or indirectly, of more than a majority of Seaspan’s Voting Securities (unless such “person” beneficially owns or owned a majority of the Subordinated
Shares or is a member of the Existing Ownership Group), measured by voting power rather than number of shares; 

  

	 	c)	a change in directors after which a majority of the members of the Board are not Continuing Directors; or 

  

	 	d)	the consolidation of Seaspan with, or the merger of Seaspan with or into, any “person” (other than a member of the Existing Ownership Group), or the consolidation of any
“person” (other than a member of the Existing Ownership Group) with, or the merger of any “person” (other than a member of the Existing Ownership Group) with or into, Seaspan, in any such event pursuant to a transaction in which
any of the outstanding Common Shares are converted into or exchanged for cash, securities or other property or receive a payment of cash, securities or other property, other than any such transaction where Seaspan’s voting stock outstanding
immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee “person” constituting a majority of the outstanding shares of such voting stock of such surviving or transferee
“person” immediately after giving effect to such issuance. 

 For the purpose of the above definition, the following terms will have
the following meaning: 
 “Affiliates” means, with respect to any Person as at any particular date, any other Persons that directly or indirectly,
through one or more intermediaries, are Controlled by, controls or are under common Control with the Person in question, and Affiliate means any one of them. 
 “Board” means the board of the directors of Seaspan as the same may be constituted from time to time. 
 “Common Shares” means
the Class A common shares, par value $0.01 per share, of Seaspan. 
 “Continuing Directors” means, as of any date of determination, any member
of the Board who (i) was a member of the Board immediately after the completion of the Public Offering, or (ii) was nominated for election or elected to the Board with the approval of a majority of the directors then still in office who
were either directors immediately after the completion of the Public Offering or whose nomination or election was previously so approved. 
  

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 “Control” or “Controlled” means, with respect to any Person, the right to elect or appoint, directly
or indirectly, a majority of the directors of such Person or a majority of the Persons who have the right, including any contractual right, to manage and direct the business, affairs and operations of such Person, or the possession of the power to
direct or cause the direction of the management and policies of a Person, whether through ownership of Voting Securities, by contract, or otherwise. 
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 “Existing Ownership Group” means: 
  

	 	e)	any of Dennis Washington, Kyle Washington, Kevin Washington, Gerry Wang or Graham Porter or their estate, spouse or descendants; 

  

	 	f)	any trust for the benefit of the persons listed in e) above; or 

  

	 	g)	any Affiliate of any of the persons listed in e) or f) above. 

 “Person” means an individual, corporation, limited liability company, partnership, joint venture, trust or trustee, unincorporated organization, association, government, government agency or political subdivision thereof, or other
entity. 
 “Public Offering” means the initial public offering of Common Shares of Seaspan. 
 “Subordinated Shares” means the Class B common shares, par value $0.01 per share, of the Company. 
 “Voting Securities” means securities of all classes of a Person entitling the holders thereof to vote on a regular basis in the election of members of the
board of directors or other governing body of such Person. 
  

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 SCHEDULE “B” 
 List of Participants 
  

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 SCHEDULE “C” 
 Form of Release 
 Participants will sign a release including the following terms: 
 A. WHEREAS the above parties wish to amicably resolve all issues arising out of the Employee’s employment and its cessation; 
 B. AND WHEREAS the Employee has agreed to accept from Seaspan Corporation (“Seaspan”) severance pay in the sum of [SPELL OUT LUMP SUM AMOUNT IN CAPITALS
($insert numbers in brackets)], less statutory deductions which are to be withheld by Seaspan and remitted directly to Canada Revenue Agency, to be paid to the Employee in accordance with the attached letter of instructions marked Exhibit
“A”. 
 C. AND WHEREAS the Employee agrees that he or she will have no further claim against Seaspan, Seaspan Ship Management Ltd. (the
“Employer”) or their affiliates or any of their respective directors, officers or employees (the “Released Parties”), arising out of or in any way related to the employment or the termination of the Employee’s employment.

 FOR AND IN CONSIDERATION of these premises and of the payment of [SPELL OUT LUMP SUM AMOUNT IN CAPITALS ($insert numbers in brackets)]
less statutory deductions which are to be withheld by the Employer and remitted directly to Canada Revenue Agency, and the other considerations, as directed in the attached letter of instructions marked Exhibit “A” I, [INSERT NAME IN
CAPITALS,] DO HEREBY REMISE, RELEASE AND FOREVER DISCHARGE and by these presents do for myself, my heirs, executors, administrators and assigns, remise, release and forever discharge each of the Released Parties of all and from all actions, causes
of action, suits, debts, contracts, damages, claims of every nature or kind whatsoever which I may have against any of the Released Parties in connection with my employment and, without restricting the generality of the foregoing, of and from all
actions, causes of action, suits, debts, contracts, statutory claims, damages, claims and demands of every nature or kind including any claim pursuant to the Human Rights Code, R.S.B.C. 1996, c.210, as amended, the Employment Standards
Act, R.S.B.C., 1996, c.113, as amended and claims for vacation pay or any other ancillary benefit arising out of or in any way related to my employment by the Employer or the termination of my employment. 
 I SHALL continue to treat in a confidential way all proprietary and confidential information acquired by me in the course of my employment with the
Employer, including but not limited to confidential information pertaining to operations and procedures in place at any facilities of Seaspan, the Employer or their affiliates. 
 I WILL forever treat as confidential the terms of the settlement of this matter, including this Full and Final Release. Without limiting the generality
of the foregoing, I will not discuss the terms of settlement with any employees or former employees of the Employer or any of its affiliates. 
 I FURTHER AGREE that I will forever in no way, form or manner disparage the Employer, Seaspan or their respective affiliates, or any of their personnel, nor will I co-operate or participate in any proceedings, or preparation for any
proceeding or complaint involving the Employer, Seaspan or their respective affiliates in the future. 
 I FURTHER acknowledge that I have
received independent legal advice, or have had every opportunity to do so, in connection with the settlement of this matter, including the execution of this Full and Final Release, and I understand I am making a final settlement of all matters
relating to my employment. 
  

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 IT IS DISTINCTLY UNDERSTOOD AND AGREED THAT this settlement and the payment of the aforesaid sum and
delivery of the aforesaid consideration are made with a denial of liability. The Release herein contained is not to be construed as an admission of liability on the part of Seaspan, the Employer or their affiliates. 
 THIS RELEASE contains the entire agreement between the Employee, [INSERT NAME IN CAPITALS], Seaspan and the Employer, and the terms hereof are
acknowledged to be contractual and not a mere recital. 
 IN WITNESS WHEREOF, Seaspan Corporation, Seaspan Ship Management Ltd. and the said
Employee, [INSERT NAME IN CAPITALS], have hereunto set their hands this     day of                     ,
20        . 
  

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