Document:

exv10w2

Exhibit 10.2

Execution Version

ARLINGTON TANKERS LTD.

Executive Retention Agreement

     THIS EXECUTIVE RETENTION AGREEMENT (this “Agreement”) by and between Arlington Tankers
Ltd., a company incorporated in the Islands of Bermuda (the “Company”), and Edward Terino
(the “Executive”) is made as of October 17, 2008.

     WHEREAS, the Executive and the Company have entered into that certain Executive Change in
Control Agreement, dated as of October 24, 2005 (the “Change in Control Agreement”),
pursuant to which the Executive would be entitled to the following benefits if the Executive’s
employment with the Company is terminated by the Company without Cause (as defined in the Change in
Control Agreement) or by the Executive for Good Reason (as defined in the Change in Control
Agreement) within 12 months following a Change in Control (as defined in the Change in Control
Agreement): (i) a payment equal to 12 months of the Executive’s base salary, (ii) a payment equal
to the highest bonus paid to the Executive in any of the three years prior to the date of the
Change in Control (as defined in the Change in Control Agreement), (iii) benefits for the Executive
and the Executive’s family for 12 months and (iv) certain outplacement services.

     WHEREAS, the Executive is a “Participant” under the Company’s 2006 Bonus Plan (the “2006
Bonus Plan”) pursuant to which the Executive has received an equity-based award.

     WHEREAS, the Executive is a “Participant” under the Company’s 2008 Bonus Plan (the “2008
Bonus Plan”) pursuant to which the Executive is eligible to be awarded cash incentive bonuses
if specified performance objectives are achieved, and such objectives are the Qualified Transaction
Objective, Other Approved Transaction Objective, and general & administrative budget achievement
objective (each as defined in the 2008 Bonus Plan).

     WHEREAS, the Company has entered into an Agreement and Plan of Merger and Amalgamation, dated
as of August 5, 2008 (the “Merger Agreement”), with General Maritime Corporation and the
other parties thereto, pursuant to which General Maritime Corporation will combine with the
Company. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed
to them in the Merger Agreement.

     WHEREAS, the Executive and the Company agree that if the Executive’s employment with the
Company is terminated by the Company without Cause (as defined in the Change in Control Agreement)
or by the Executive for Good Reason (as defined in the Change in Control Agreement) within 12
months following the Closing of the Combinations, the amount that would be payable to the Executive
pursuant to clauses (i) and (ii) in the first recital above would equal $500,000.

     WHEREAS, the Compensation Committee of the Board has determined that the Combinations do not
constitute Qualified Transactions as defined in and pursuant to the 2008 Bonus Plan.

 

 

     WHEREAS, in connection with entering into the Merger Agreement, the Board has determined that
additional steps should be taken to reinforce and encourage the continued employment and dedication
of the Executive and to recognize the efforts of the Executive in connection with the consummation
of the transactions contemplated by the Merger Agreement, including the granting by the
Compensation Committee of the Board to the Executive of a $750,000 discretionary cash bonus.

     WHEREAS, the Executive and the Company desire for the Executive to receive the benefits set
forth herein upon Closing of the Combinations and upon the termination of the Executive under
certain circumstances.

     NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements
set forth below, the Company and the Executive agree as follows:

     1.   Key Definitions.

     As used herein, the following terms shall have the following respective meanings:

          1.1   “Cause” means:

                (a)   the Executive’s willful and continued failure to substantially perform his reasonable
assigned duties as an officer of the Company (other than any such failure resulting from incapacity
due to physical or mental illness or any failure after the Executive gives notice of termination
for Good Reason), which failure is not cured within 30 days after a written demand for substantial
performance is received by the Executive from the Board of Directors of the Company which
specifically identifies the manner in which the Board of Directors believes the Executive has not
substantially performed the Executive’s duties; or

                (b)   the Executive’s willful engagement in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company.

     For purposes of this Section 1.1, no act or failure to act by the Executive shall be
considered “willful” unless it is done, or omitted to be done, in bad faith and without reasonable
belief that the Executive’s action or omission was in the best interests of the Company.

          1.2   “Disability” means the Executive’s absence from the full-time performance of the
Executive’s duties with the Company for 180 consecutive calendar days as a result of incapacity due
to mental or physical illness which is determined to be total and permanent by a physician selected
by the Company or its insurers and acceptable to the Executive or the Executive’s legal
representative.

          1.3   “Good Reason” means the occurrence, without the Executive’s written consent, of
any of the events or circumstances set forth in clauses (a) through (e) below. Notwithstanding the
occurrence of any such event or circumstance, such occurrence shall not be deemed to constitute
Good Reason if, prior to the Date of Termination specified in the Notice of Termination (each as
defined in Section 3.2(a)) given by the Executive in respect thereof, such event or circumstance
has been fully corrected and the Executive has been reasonably compensated for any losses or
damages resulting therefrom (provided that such right of

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correction by the Company shall only apply to the first Notice of Termination for Good Reason
given by the Executive).

                (a)   the assignment to the Executive of duties inconsistent in any material respect with the
Executive’s position, authority or responsibilities in effect immediately prior to the date of the
Merger Agreement (the “Measurement Date”), or any other action or omission by the Company
which results in a material diminution in such position, authority or responsibilities;

                (b)   a material reduction in the Executive’s annual base salary as in effect on the Measurement
Date or as the same was or may be increased thereafter from time to time;

                (c)   the failure by the Company to (i) continue in effect any material compensation or benefit
plan or program (including without limitation any life insurance, medical, health and accident or
disability plan and any vacation or automobile program or policy) (a “Benefit Plan”) in
which the Executive currently participates or which is applicable to the Executive immediately
prior to the Measurement Date, unless an equitable arrangement (embodied in an ongoing substitute
or alternative plan) has been made with respect to such plan or program or (ii) continue the
Executive’s participation therein (or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount of benefits provided and the level of the
Executive’s participation relative to other participants, than the basis existing immediately prior
to the Measurement Date;

                (d)   a change by the Company in the location at which the Executive performs his principal
duties for the Company to a new location that is outside of the New York City metropolitan area;

                (e)   any material failure of the Company to pay or provide to the Executive any portion of the
Executive’s compensation or benefits due under any Benefit Plan within seven days of the date such
compensation or benefits are due, or any material breach by the Company of this Agreement or any
employment agreement with the Executive.

     Notwithstanding the foregoing provisions of this Section 1.3, Good Reason shall not exist
unless (i) the Executive notifies the Company within 30 days of the date on which a condition
giving rise to Good Reason first existed, and (ii) the Company fails to resolve the condition
within 30 days following receipt of such notice. The Executive’s right to terminate his employment
for Good Reason shall not be affected by his incapacity due to physical or mental illness. The
Executive acknowledges and agrees that neither the Board nor any committee of the Board
contemplates adopting a 2009 Bonus Plan or the payment of any other bonuses in respect of calendar
year 2009 and that such failure to adopt a bonus plan or pay any other bonuses shall not constitute
“Good Reason” under this Agreement.

          1.4   “Triggering Event” means the first to occur (if at all) of any of the following:

                a.   the Executive’s employment with the Company is terminated by the Company (other than for
Cause, Disability or death) or by the Executive for Good Reason, in

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each case prior to the first to occur of (i) termination of the Merger Agreement at any time
prior to the Effective Time or (ii) the Closing of the Combinations, or

                b.   the Closing of the Combinations.

          2.   Term of Agreement. This Agreement, and all rights and obligations of the parties
hereunder, shall take effect upon the date hereof and shall expire upon the first to occur of (a)
the termination of the Merger Agreement at any time prior to the Effective Time, (b) the date 12
months after the Closing Date, if the Executive is still employed by the Company as of such later
date, or (c) the fulfillment by the Company of all of its obligations under Section 4 if the
Executive’s employment with the Company terminates within 12 months following the Closing Date.

          3.   Employment Status; Termination.

                3.1   Not an Employment Contract. The Executive acknowledges that this Agreement does
not constitute a contract of employment or impose on the Company any obligation to retain the
Executive as an employee and that this Agreement does not prevent the Executive from terminating
employment at any time. If the Executive’s employment with the Company terminates for any reason,
the Executive shall not be entitled to any payments or benefits hereunder except as otherwise
provided pursuant to Section 4.

                3.2   Termination of Employment.

                      (a)   Any termination of the Executive’s employment by the Company or by the Executive (other
than due to the death of the Executive) shall be communicated by a written notice to the other
party hereto (the “Notice of Termination”), given in accordance with Section 7. Any Notice
of Termination shall: (i) indicate the specific termination provision (if any) of this Agreement
relied upon by the party giving such notice, (ii) to the extent applicable, set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated and (iii) specify the Date of Termination (as defined
below). The effective date of an employment termination (the “Date of Termination”) shall
be the close of business on the date specified in the Notice of Termination, in the case of a
termination other than one due to the Executive’s death, or the date of the Executive’s death, as
the case may be. In the event the Company fails to satisfy the requirements of this Section 3.2(a)
regarding a Notice of Termination, the purported termination of the Executive’s employment pursuant
to such Notice of Termination shall not be effective for purposes of this Agreement.

                      (b)   The failure by the Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any
right of the Executive or the Company, respectively, hereunder or preclude the Executive or the
Company, respectively, from asserting any such fact or circumstance in enforcing the Executive’s or
the Company’s rights hereunder.

                      (c)   Any Notice of Termination for Cause given by the Company must be given within 30 days of
the occurrence of the event(s) or circumstance(s) which constitute(s) Cause. Prior to any Notice
of Termination for Cause being given (and prior to any termination

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for Cause being effective), the Executive shall be entitled to a hearing before the Board at
which he may, at his election, be represented by counsel and at which he shall have a reasonable
opportunity to be heard. Such hearing shall be held on not less than 15 days prior written notice
to the Executive stating the Board’s intention to terminate the Executive for Cause and stating in
detail the particular event(s) or circumstance(s) which the Board believes constitutes Cause for
termination.

                      (d)   Any Notice of Termination for Good Reason given by the Executive must be given within 30
days of the occurrence of the event(s) or circumstance(s) which constitute(s) Good Reason.

          4.   Benefits to Executive.

                4.1   Bonus Payment. Upon the occurrence of a Triggering Event, then, subject to the
Executive timely delivering an executed release substantially in the form attached hereto as
Exhibit A (the “Release”) and provided that the Executive does not revoke the
Release, no earlier than eight days after the date of execution of the Release and no later than 35
days after the Date of Termination (in the case of clause (a) of the definition of Triggering
Event) or the Closing Date (in the case of clause (b) of the definition of Triggering Event), but
in either case, no earlier than January 2, 2009, the Company shall pay to the Executive a lump sum
cash payment equal to $1,250,000.

                4.2   2006 Bonus Plan Payment. Upon the occurrence of a Triggering Event prior to the
Vesting Date (as defined in the 2006 Bonus Plan), then, subject to the Executive timely delivering
an executed Release and provided that the Executive does not revoke the Release, no earlier than
eight days after the date of execution of the Release and no later than 30 days after the Date of
Termination (in the case of clause (a) of the definition of Triggering Event) or the Closing Date
(in the case of clause (b) of the definition of Triggering Event), but in either case, no earlier
than January 2, 2009, the Company shall pay to the Executive a cash payment equal to the product of
(A) the average daily per share closing price of the Company’s common shares on the New York Stock
Exchange during the 30 trading days preceding the Closing Date, times (B) 3,537 (which represents
the Reference Number of Shares (as defined in the 2006 Bonus Plan)).

                4.3   Compensation for Termination Without Cause or for Good Reason. If (i) the
Executive’s employment with the Company is terminated prior to the first to occur of (A)
termination of the Merger Agreement at any time prior to the Effective Time or (B) the date that is
12 months after the Closing Date and (ii) Executive’s employment with the Company is terminated by
the Company (other than for Cause, Disability or death) or by the Executive for Good Reason, then,
in addition to any payments set forth in Sections 4.1 and 4.2, subject to the Executive delivering
an executed Release and provided that the Executive does not revoke the Release the Executive shall
be entitled to the following benefits:

                      (a)   for 12 months after the Date of Termination, or such longer period as may be provided by
the terms of the appropriate plan, program, practice or policy, the Company shall continue to
provide benefits (including the Company’s 401(k) matching contribution) to the Executive and the
Executive’s family at least equal to those which would

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have been provided to them if the Executive’s employment had not been terminated, in
accordance with the applicable Benefit Plans in effect on the Measurement Date or, if more
favorable to the Executive and his family, in effect generally at any time thereafter with respect
to other peer executives of the Company and its affiliated companies; provided, that (A) if the
Executive becomes reemployed with another employer and is eligible to receive a particular type of
benefits (e.g., health insurance benefits) from such employer on terms at least as favorable to the
Executive and his family as those being provided by the Company, then the Company shall no longer
be required to provide those particular benefits to the Executive and his family, (B) in the event
continuation of such benefits is not permitted under such Benefit Plans or is deemed by the Company
to be too costly, the Company shall pay to Employee the cash equivalent of such benefits, and (C)
the aggregate amount of expense incurred by the Company in providing the benefits under this
Section 4.3(a) shall not exceed $75,000;

                      (b)   for purposes of determining eligibility (but not the time of commencement of benefits) of
the Executive for retiree benefits to which the Executive is entitled in accordance with this
Section 4.3(b), the Executive shall be considered to have remained employed by the Company until 12
months after the Date of Termination; and

                      (c)   within six months following the Date of Termination, the Company shall provide
outplacement services through one or more outside firms of the Executive’s choosing up to an
aggregate of $20,000, with such services to extend until the earlier of (i) 12 months following the
termination of Executive’s employment or (ii) the date the Executive secures full time employment.

                4.4   Termination of Employment Following Termination of Merger Agreement. In the event
that the Merger Agreement terminates at any time prior to the Effective Time and the Executive’s
employment with the Company is terminated by the Company (other than for Cause, Disability or
death) or by the Executive for Good Reason prior to the Vesting Date (as defined in the 2006 Bonus
Plan), subject to the Executive delivering an executed Release and provided that the Executive does
not revoke the Release, the Executive shall be entitled to the following benefit, payable in a lump
sum no earlier than eight days after the date of execution of the Release and no later than 30 days
after the Date of Termination: payment of a cash payment equal to the product of (A) the average
daily per share closing price of the Company’s common shares on the New York Stock Exchange during
the 30 trading days preceding the Date of Termination, times (B) 3,537 (which represents the
Reference Number of Shares (as defined in the 2006 Bonus Plan)). Notwithstanding any other
provision of this Agreement to the contrary, this Section 4.4 will survive the termination of this
Agreement if this Agreement is terminated under clause (a) of Section 2 hereof while the Executive
is still employed by the Company.

                4.5   Termination for Death or Disability. Notwithstanding anything herein to the
contrary, if the Executive’s employment with the Company is terminated by reason of the Executive’s
death or Disability, then the Executive shall not be entitled to any payments or benefits under
this Agreement.

                4.6   Resignation without Good Reason; Termination for Cause. Notwithstanding anything
herein to the contrary, if the Company terminates the Executive’s

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employment with the Company for Cause, or if the Executive voluntarily terminates his
employment with the Company (other than a termination for Good Reason), then the Executive shall
not be entitled to any payments or benefits under this Agreement.

                4.7   Gross-up.

                      (a)   Anything in this Agreement to the contrary notwithstanding, in the event it shall be
determined (as hereafter provided) that any payment, benefit or distribution to or for the
Executive’s benefit, whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise (a “Payment”), would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (or any
successor provision thereto), or any interest or penalties with respect to such excise tax (such
tax, together with any such interest and penalties, hereafter collectively referred to as the
“Excise Tax”), then the Executive shall be entitled to receive an additional payment or
payments (a “Gross-Up Payment”) in an amount such that, after payment by the Executive of
all taxes (including any interest or penalties imposed with respect to such taxes), including any
Excise Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments. For purposes of determining the amount
of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest
marginal rates of federal income taxation applicable to individuals in the calendar year in which
the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates
of taxation applicable to individuals as are in effect in the state and locality of the Executive’s
residence in the calendar year in which the Gross-Up Payment is to be made, net of the maximum
reduction in federal income taxes that can be obtained from deduction of such state and local
taxes, taking into account any limitations applicable to individuals subject to federal income tax
at the highest marginal rates.

                      (b)   All determinations required to be made under this Section 4.7, including whether an Excise
Tax is payable by the Executive, the amount of such Excise Tax, whether a Gross-Up Payment is
required, and the amount of such Gross-Up Payment, shall be made by mutual agreement between the
Executive and the Company. If the parties are not able to reach an agreement with respect to such
determinations, then an independent auditor (the “Firm”) selected by the Executive and the
Company shall make such determinations. The Firm shall be a nationally-recognized United States
public accounting firm which has not, during the two years preceding the date of its selection,
acted in any way for the Company or any affiliate thereof. Either the Company or the Executive may
request that a determination be made. The Firm shall submit its determination and detailed
supporting calculations to the Executive and the Company as promptly as practicable. If the Firm
determines that any Excise Tax is payable by the Executive and that a Gross-Up Payment is required,
the Company shall pay the Executive the required Gross-Up Payment within thirty (30) days of
receipt of such determination and calculations. If the Firm determines that no Excise Tax is
payable by the Executive, it shall, at the same time it makes such determination, furnish the
Executive with an opinion that the Executive has substantial authority not to report any Excise Tax
on the Executive’s federal income tax return. Any determination by the Firm as to the amount of
the Gross-Up Payment shall be binding upon the Executive and the Company.

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                      (c)   As a result of the uncertainty in the application of Section 4999 of the Code (or any
successor provision thereto) at the time of the initial determination by the Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company should have been made
(an “Underpayment”). If the Executive thereafter is required to make a payment of any
Excise Tax, the Firm shall determine the amount of the Underpayment (if any) that has occurred and
submit its determination and detailed supporting calculations to the Executive and the Company as
promptly as possible. Any such Underpayment shall be promptly paid by the Company to the
Executive, or for the Executive’s benefit, within thirty (30) days of receipt of such determination
and calculations.

                      (d)   In the event that the Internal Revenue Service makes any claim, gives notice of any
potential claim or institutes a proceeding against the Executive asserting that any Excise Tax or
additional Excise Tax is due in respect of the Payments, the Executive shall promptly give the
Company notice of any such claim, potential claim or proceeding. The Company shall have the right
to conduct all discussions, negotiations, defenses, actions and proceedings, to the extent
reasonably requested by the Company. The Executive will not settle any claim or proceeding
relating solely to the Excise Tax payable in respect of the Payments without the consent of the
Company, which consent shall not be unreasonably withheld. The Executive shall file, at the
Company’s expense, all requests for refunds of the Gross-Up Amount, or any portion thereof, paid to
any taxing authority as shall be reasonably requested by the Company and shall pay over to the
Company (net of any tax payable thereon) any such refunds, together with any interest thereon, when
and as such refunds and interest are received by the Executive.

                4.8   Payments subject to Section 409A.

                      (a)   Subject to this Section 4.8, payments or benefits due under Sections 4.1 and 4.2 as a
result of the occurrence of clause (a) in the definition of Triggering Event and under Sections 4.3
and 4.4 shall begin only upon the date of a “separation from service” of the Executive (determined
as set forth below) which occurs on or after the termination of the Executive’s employment. The
following rules shall apply with respect to distribution of the payments or benefits, if any, to be
provided to the Executive under Sections 4.1, 4.2, 4.3 and 4.4 as applicable:

                            (i)    It is intended that each installment of the payments and benefits due under Sections 4.1,
4.2, 4.3 and 4.4 shall be treated as a separate “payment” for purposes of Section 409A of the Code
and the guidance issued thereunder (“Section 409A”). Neither the Company nor the Executive
shall have the right to accelerate or defer the delivery of any such payments or benefits except to
the extent specifically permitted or required by Section 409A.

                            (ii)    If, as of the date of the “separation from service” of the Executive from the Company,
the Executive is not a “specified employee” (within the meaning of Section 409A), then each
installment of the payments and benefits shall be made on the dates and terms set forth in Sections
4.1, 4.2, 4.3 and 4.4.

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                            (iii) If, as of the date of the “separation from service” of the Executive from the Company,
the Executive is a “specified employee” (within the meaning of Section 409A), then:

                                   (1)   Each installment of the payments and benefits due under Sections 4.1, 4.2, 4.3 and 4.4
that, in accordance with the dates and terms set forth herein, will in all circumstances,
regardless of when the separation from service occurs, be paid within the Short-Term Deferral
Period (as hereinafter defined) shall be treated as a short-term deferral within the meaning of
Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A.
For purposes of this Agreement, the “Short-Term Deferral Period” means the period ending on the
later of the 15th day of the third month following the end of the Executive’s tax year
in which the separation from service occurs and the 15th day of the third month
following the end of the Company’s tax year in which the separation from service occurs; and

                                   (2)   Each installment of the payments and benefits due under Sections 4.1, 4.2, 4.3 and 4.4
that is not described in Section 4.8(a)(iii)(1) and that would, absent this subsection, be paid
within the six-month period following the “separation from service” of the Executive from the
Company shall not be paid until the date that is six months and one day after such separation from
service (or, if earlier, the Executive’s death), with any such installments that are required to be
delayed being accumulated during the six-month period and paid in a lump sum on the date that is
six months and one day following the Executive’s separation from service and any subsequent
installments, if any, being paid in accordance with the dates and terms set forth herein;
provided, however, that the preceding provisions of this sentence shall not apply
to any installment of payments and benefits if and to the maximum extent that that such installment
is deemed to be paid under a separation pay plan that does not provide for a deferral of
compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to
separation pay upon an involuntary separation from service). Any installments that qualify for the
exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last
day of the Executive’s second taxable year following his taxable year in which the separation from
service occurs.

                      (b)   The determination of whether and when a separation from service of the Executive from the
Company has occurred shall be made and in a manner consistent with, and based on the presumptions
set forth in, Treasury Regulation Section 1.409A-1(h). Solely for purposes of this Section 4.8(b),
“Company” shall include all persons with whom the Company would be considered a single employer
under Section 414(b) and 414(c) of the Code.

                      (c)   All reimbursements and in-kind benefits provided under the Agreement shall be made or
provided in accordance with the requirements of Section 409A to the extent that such reimbursements
or in-kind benefits are subject to Section 409A.

                4.9   Mitigation. The Executive shall not be required to mitigate the amount of any
payment or benefits provided for in this Section 4 by seeking other employment or otherwise.
Further, except as provided in Section 4.3(a), the amount of any payment or benefits provided for
in this Section 4 shall not be reduced by any compensation earned by the Executive

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as a result of employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Executive to the Company or otherwise.

          5.   Settlement of Disputes; Arbitration. All claims by the Executive for benefits
under this Agreement shall be directed to and determined by the Board and shall be in writing. Any
denial by the Board of a claim for benefits under this Agreement shall be delivered to the
Executive in writing and shall set forth the specific reasons for the denial and the specific
provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the
Executive for a review of the decision denying a claim. Any further dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by arbitration in New York,
New York, in accordance with the rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

          6.   Successors.

                6.1   Successor to Company. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company expressly to assume and agree to perform this Agreement to the
same extent that the Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain an assumption of this Agreement at or prior to the effectiveness
of any succession shall be a breach of this Agreement and shall constitute Good Reason if the
Executive elects to terminate employment, except that for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be deemed the Date of Termination.
As used in this Agreement, “Company” shall mean the Company as defined above and any successor to
its business or assets as aforesaid which assumes and agrees to perform this Agreement, by
operation of law or otherwise.

                6.2   Successor to Executive. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should die while any
amount would still be payable to the Executive or his family hereunder if the Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the executors, personal representatives or administrators of
the Executive’s estate.

          7.   Notice. All notices, instructions and other communications given hereunder or in
connection herewith shall be in writing. Any such notice, instruction or communication shall be
sent either (i) by registered or certified mail, return receipt requested, postage prepaid, or (ii)
prepaid via a reputable nationwide overnight courier service, in each case addressed to the
Company, at Arlington Tankers Ltd., c/o Arlington Tankers LLC, 191 Post Road West, Westport,
Connecticut, 06880 United States and to the Executive at the Executive’s address indicated on the
signature page of this Agreement (or to such other address as either the Company or the Executive
may have furnished to the other in writing in accordance herewith). Any such notice, instruction
or communication shall be deemed to have been delivered five business days after it is sent by
registered or certified mail, return receipt requested, postage prepaid, or one business day after
it is sent via a reputable nationwide overnight courier service. Either party may give any notice,
instruction or other communication hereunder using any other

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means, but no such notice, instruction or other communication shall be deemed to have been
duly delivered unless and until it actually is received by the party for whom it is intended.

          8.   Miscellaneous.

                8.1   Employment by Subsidiary. For purposes of this Agreement, the Executive’s
employment with the Company shall not be deemed to have terminated solely as a result of the
Executive continuing to be employed by a wholly-owned subsidiary of the Company.

                8.2   Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

                8.3   Injunctive Relief. The Company and the Executive agree that any breach of this
Agreement by the Company is likely to cause the Executive substantial and irrevocable damage and
therefore, in the event of any such breach, in addition to such other remedies which may be
available, the Executive shall have the right to specific performance and injunctive relief.

                8.4   Governing Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the internal laws of the State of New York, United States, without
regard to conflicts of law principles.

                8.5   Waivers. No waiver by the Executive at any time of any breach of, or compliance
with, any provision of this Agreement to be performed by the Company shall be deemed a waiver of
that or any other provision at any subsequent time.

                8.6   Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original but both of which together shall constitute one and the same
instrument.

                8.7   Tax Withholding. Any payments provided for hereunder shall be paid net of any
applicable tax withholding required under federal, state or local law.

                8.8   Expenses. Each party hereto shall bear its own costs and expenses (including
legal fees and expenses) incurred in connection with entering into this Agreement and performing
its obligations hereunder.

                8.9   Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto in respect of the subject
matter contained herein, including the Change in Control Agreement and the 2008 Bonus Plan; and any
prior agreement of the parties hereto in respect of the subject matter contained herein is hereby
terminated and cancelled. Notwithstanding the foregoing, in the event that this Agreement expires
as a result of the occurrence of clause (a) of Section 2, the Change in Control Agreement and the
2008 Bonus Plan shall not be superseded and shall continue in full force and effect in accordance
with its terms.

11

 

                8.10   Amendments. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Executive.

                8.11   Executive’s Acknowledgements. The Executive acknowledges that he: (a) has read
this Agreement and the Release; (b) has been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of the Executive’s own choice or has voluntarily
declined to seek such counsel; (c) understands the terms and consequences of this Agreement; and
(d) understands that the law firm of Wilmer Cutler Pickering Hale and Dorr LLP is acting as counsel
to the Company in connection with the transactions contemplated by this Agreement, and is not
acting as counsel for the Executive.

                8.12   Section 409A. This Agreement is intended to comply with the provisions of
Section 409A and the Agreement shall, to the extent practicable, be construed in accordance
therewith. The Company makes no representation or warranty and shall have no liability to the
Executive or any other person if any provisions of this Agreement are determined to constitute
deferred compensation subject to Section 409A and do not satisfy an exemption from, or the
conditions of, Section 409A.

12

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first set forth above.

	 	 	 	 	 
	 	

ARLINGTON TANKERS LTD.

 	 
	 	By:  	/s/ E. GRANT GIBBONS
 	 
	 	 	E. Grant Gibbons 	 
	 	 	Director 	 

	 	 	 	 	 
	 	 	 
	 	/s/ EDWARD TERINO
 	 
	 	EDWARD TERINO 	 
	 	 	 

	 	 	 	 	 
	 	Address:

 	 
	 
	 	17 CANTERBURY ROAD
 	 
	 
	 	WINDHAM, NH 03087 	 
	 
	 	 	 
	 

[Signature Page to Executive Retention Agreement]

 

Exhibit A to Executive Retention Agreement

FORM OF

RELEASE

[NOTE: FORM INCLUDES OPTIONS IF EXECUTIVE IS NOT TERMINATED AND RELEASE IS BEING EXECUTED UPON
PAYMENT OF BONUS.]

          This RELEASE (this “Release”) is entered into by and between Arlington Tankers Ltd.
(the “Company”) and Edward Terino (the “Executive”).

          The parties have entered into that certain Executive Retention Agreement, dated as of October
17, 2008 (the “Retention Agreement”).

          The Company has entered into an Agreement and Plan of Merger and Amalgamation, dated as of
August 5, 2008 (the “Merger Agreement”), with General Maritime Corporation and the other
parties thereto.

          [INCLUDE IF NO TERMINATION: The Executive is entitled to a bonus payment pursuant to the
Retention Agreement subject to his timely execution and delivery of this Release and provided he
does not timely revoke such acceptance.]

          [INCLUDE IF TERMINATION: The parties wish to resolve amicably the Executive’s separation from
the Company and establish the terms of the Executive’s severance arrangement.]

          NOW, THEREFORE, in consideration of the promises and conditions set forth herein, the
sufficiency of which is hereby acknowledged, the Company and the Executive agree as follows:

     1. [INCLUDE IF TERMINATION: Termination Date. The Executive’s effective date of
termination from the Company is ___, 20_.]

     2. Consideration. In return for the execution of this Release and it becoming binding
upon the Executive, the Company agrees to pay the Executive the amounts and provide the Executive
the benefits set forth in [INSERT APPLICABLE SECTIONS: Section 4.1 [,/and] Section 4.2 [and]
Section 4.3] of the Retention Agreement (the “Release Benefits”), less applicable taxes and
withholdings.

     3. Release. In consideration of the payment of the Release Benefits, which the
Executive acknowledges he would not otherwise be entitled to receive, the Executive hereby fully,
forever, irrevocably and unconditionally releases, remises and discharges the Company and General
Maritime Corporation and their respective officers, directors, stockholders, corporate affiliates,
subsidiaries, parent companies, agents and Executives (each in their
individual and corporate capacities), all executive benefit plans and plan fiduciaries (hereinafter, the
“Released Parties”) from any and all claims, charges, complaints, demands, actions, causes
of action, suits, rights, debts, sums of money, costs, accounts, reckonings, covenants, contracts,
agreements, promises, doings, omissions, damages, executions, obligations, liabilities, and
expenses

 

 

(including attorneys’ fees and costs), of every kind and nature which the Executive ever
had or now has against the Released Parties, including but not limited to, any and all claims
arising out of the Executive’s employment with [INCLUDE IF TERMINATION and/or separation from] the
Company, including, but not limited to, [INCLUDE IF APPLICABLE: all claims for any payment in
connection with the Closing (as defined in the Merger Agreement) of the Combinations (as defined in
the Merger Agreement),] all employment discrimination claims under Title VII of the Civil Rights
Act of 1964, 42 U.S.C. § 2000e et seq., the Age Discrimination in Employment Act, 29 U.S.C.
§ 621 et seq., the Americans With Disabilities Act of 1990, 42 U.S.C., § 12101
et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et
seq., [Note: If Employer receives any federal funds, insert the Rehabilitation Act of
1973, 29 U.S.C. § 701 et seq.] and the Connecticut Human Rights and Opportunities
Act, Conn. Gen. Stat. § 46a-51 et seq., the Connecticut Equal Pay Law, Conn. Gen. Stat. §
31-75 et seq., the Connecticut Family and Medical Leave
Law, Conn. Gen. Stat. § 31-51kk et seq., Conn. Gen. Stat. § 31-51m (Connecticut whistleblower protection law), all as amended;
all common law claims including, but not limited to, actions in tort, defamation and breach of
contract; all claims to any non-vested ownership interest in the Company, contractual or otherwise,
including but not limited to claims to stock or stock options; and any claim or damage arising out
of the Executive’s employment with [INCLUDE IF TERMINATION or separation from] the Company
(including a claim for retaliation) under any common law theory or any federal, state or local
statute or ordinance not expressly referenced above; provided, however, that nothing in this
Release prevents the Executive from filing, cooperating with, or participating in any proceeding
before the EEOC or a state Fair Employment Practices Agency (except that the Executive acknowledges
that he may not be able to recover any monetary benefits in connection with any such claim, charge
or proceeding).

     4. [INCLUDE IF TERMINATION: Return of Company Property. The Executive agrees to
return all Company property and equipment in his possession or control, including, but not limited
to, all Company files and documents. The Executive further agrees to leave intact all electronic
Company documents including those which he developed or helped develop during his employment.]

     5. [INCLUDE IF TERMINATION: Cooperation. The Executive agrees to cooperate fully with
the Company in the defense or prosecution of any claims or actions now in existence or which may be
brought in the future against or on behalf of the Company, provided such requests are made by the
Company with reasonable notice to the Executive and at reasonable times designated by the Company.
The Executive’s full cooperation in connection with such claims or actions shall include, but not
be limited to, his being available to meet with Company counsel to prepare for trial or discovery
or an administrative hearing and to act as a witness when requested by the Company. The Company
shall pay the Executive a reasonable hourly rate and reimburse the Executive for all reasonable
expenses and out-of-pocket costs incurred in connection with fulfilling the Executive’s obligations
under this Section 5.]

     6. Nature of Agreement. The Executive understands and agrees that this Release is a
[INCLUDE IF TERMINATION: severance and] settlement agreement and does not constitute an admission
of liability or wrongdoing on the part of the Company.

-2-

 

     7. Amendment. This Release shall be binding upon the parties and may not be
abandoned, supplemented, changed or modified in any manner, orally or otherwise, except by an
instrument in writing of concurrent or subsequent date signed by a duly authorized representative
of the parties hereto. This Release is binding upon and shall inure to the benefit of the parties
and their respective agents, assigns, heirs, executors, successors and administrators.

     8. Validity. Should any provision of this Release be declared or be determined by any
court of competent jurisdiction to be illegal or invalid, the validity of the remaining parts,
terms, or provisions shall not be affected thereby and said illegal and invalid part, term or
provision shall be deemed not to be a part of this Release.]

     9. Confidentiality. The Executive acknowledges that as a result of his employment
with the Company, he has come into possession of non-public and/or confidential and/or proprietary
information relating to the Company, General Maritime Corporation and their respective affiliates,
including their respective practices, directors, officers, agents and employees. Except as
otherwise required by court order or subpoena, the Executive agrees that he will not directly or
indirectly use or disclose to any person, firm, or entity such non-public and/or confidential
and/or other proprietary information acquired during his employment unless authorized in writing to
do so by the Company. The Executive further agrees and understands that he is prohibited from
disclosing any terms of this Release to anyone, except that he may disclose the terms of this
Release and the Retention Agreement to his attorneys, accountants, or other advisors, or as
otherwise required by law.

     10. [INCLUDE IF TERMINATION: Non-Disparagement. In return for the execution
of this Release and it becoming binding upon the Executive, and as a condition for payment to the
Executive of the monetary consideration herein, the Executive and the Company agree not to make any
false, disparaging or derogatory statements in public or private to any person or media outlet
regarding each other or any of each other’s directors, officers, executives, agents,
representatives, business affairs or financial condition.]

     11. Tax Acknowledgement: In connection with the payments and consideration provided
to the Executive pursuant to this Release, the Company shall withhold and remit to the tax
authorities the amounts required under applicable law, and the Executive shall be responsible for
all applicable taxes with respect to such payments and consideration under applicable law. The
Executive acknowledges that he is not relying upon the advice or representation of the Company with
respect to the tax treatment of any of the payments set forth in this Release.

     12. Entire Agreement. This Release contains and constitutes the entire understanding
and agreement between the parties hereto with respect to the matters set forth herein and cancels
all previous oral and written negotiations, agreements, commitments, and writings in connection
therewith.

     13. Applicable Law and Consent to Jurisdiction. This Release shall be interpreted and
construed by the laws of the State of Connecticut, without regard to conflict of laws provisions.
The Executive hereby irrevocably submits to and acknowledges and recognizes the jurisdiction of the
courts of the State of Connecticut, or if appropriate, a federal court located in Connecticut
(which courts, for purposes of this Release, are the only courts of competent jurisdiction) over
any suit, action or other proceeding arising out of, under or in connection with this Release or
the subject matter hereof.

-3-

 

     14. Acknowledgments. The Executive acknowledges that he has been given twenty-one
(21) days to consider this Release and that the Company advised him to consult with any attorney of
him own choosing prior to signing this Release. The Executive may revoke this Release for a period
of seven (7) days after the execution of this Release, and the Agreement shall not be effective or
enforceable until the expiration of this seven (7) day revocation period.

     15. Voluntary Assent. The Executive affirms that no other promises or agreements of
any kind have been made to or with him by any person or entity whatsoever to cause him to sign this
Release, and that he fully understands the meaning and intent of this Release. The Executive
states and represents that he has had an opportunity to fully discuss and review the terms of this
Release with an attorney. The Executive further states and represents that he has carefully read
this Release, understands the contents herein, freely and voluntarily assents to all of the terms
and conditions hereof, and signs his name of his own free act.

-4-

 

     IN WITNESS WHEREOF, all parties have set their hand and seal to this Release as of the date
written below.

	 	 	 	 	 
	 	 	 
	EDWARD TERINO	  	Date:
 	 
	 	 	 	 
	 	 	 	 
	 
	ARLINGTON TANKERS LTD.	  	 
 	 
	 
	 	  	Date:
 	 
	 
	By: 	  	 	 
	       Name: 	 	  	      	 
	       Title: 	 	  	 	 

-5-exv10w1

Exhibit
10.1

GARDNER DENVER, INC.

LONG-TERM INCENTIVE PLAN

As Amended and Restated

1. Purpose

     The purpose of the Gardner Denver, Inc. Long-Term Incentive Plan (the “Plan”) is to promote
the long-term financial interests of Gardner Denver, Inc. (the “Company”), including its growth and
performance, by encouraging employees of the Company and its subsidiaries to acquire an ownership
position in the Company, enhancing the ability of the Company to attract and retain employees of
outstanding ability, and providing employees with an interest in the Company parallel to that of
the Company’s stockholders.

2. Definitions

     2.1 “Administrative Policies” means the administrative policies and procedures adopted and
amended from time to time by the Committee to administer the Plan.

     2.2 “Award” means any form of stock option, stock appreciation right, restricted stock award,
restricted stock units performance share or long-term cash bonus granted under the Plan, whether
singly, in combination, or in tandem, to a Participant by the Committee pursuant to such terms,
conditions, restrictions and limitations, if any, as the Committee may establish by the Award
Agreement or otherwise.

     2.3 “Award Agreement” means a written agreement with respect to an Award between the Company
and a Participant establishing the terms, conditions, restrictions and limitations applicable to an
Award. To the extent an Award Agreement is inconsistent with the terms of the Plan, the Plan shall
govern the rights of the Participant thereunder.

     2.4 “Base Salary” means the base salary paid by the Company to the Participant, exclusive of
any bonuses, commissions or other actual or imputed income from any Company-provided benefits or
perquisites, but prior to any reductions for salary deferred pursuant to any deferred compensation
plan or for contributions to a plan qualifying under Section 401(k) of the Code or contributions
pursuant to a cafeteria plan under Section 125 of the Code.

     2.5 “Base Salary Factor” means a multiplier expressed as a percentage of the Executive
Officer’s Base Salary, as determined by the Committee pursuant to Section 13.3 of the Plan for
purposes of calculating an Executive Officer’s Long-Term Cash Bonus.

     2.6 “Board” shall mean the Board of Directors of the Company.

1

 

     2.7 “Business Criteria” means any one, or a combination, of the following: (i) revenues of
the Company; (ii) operating income of the Company; (iii) net income of the Company; (iv) earnings
per share of the Company’s Common Stock; (v) earnings before taxes of the Company; (vi) the
Company’s return on equity; (vii) cash flow of the Company; or (viii) Company stockholder total
return.

     2.8 “Change in Control” means the occurrence of any one of the following events:

     (i) any “person” (as defined in Sections 13(d) and 14(d) of U.S. Securities Exchange
Act of 1934, as amended (the “Exchange Act”)), other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or any subsidiary
of the Company, or any corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the Company,
acquires “beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act) of
securities representing 20% of the combined voting power of the then-outstanding securities
of the Company entitled to vote in the election of directors (the “Voting Securities”); or

     (ii) during any period of not more than two consecutive years, individuals who, at the
beginning of such period, constitute the Board and any new directors (other than any
director designated by a person who has entered into an agreement with the Company to effect
a transaction described in subsections 2.8(i), 2.8(iii), or 2.8(iv) of this Plan) whose
election by the Board or nomination for election by the Company’s stockholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority of the Board;
or

     (iii) the stockholders of the Company approve and the Company consummates a merger

other than (A) a merger that would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), in

combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company and
any Subsidiary, at least 50% of the combined voting power of all classes of stock of the Company or such surviving entity outstanding

immediately after such merger or (B) a merger effected to
implement a recapitalization of the Company (or similar transaction)
in which no person acquires more than 50% of the combined voting power of the Voting Securities; or

     (iv) the stockholders of the Company approve and the Company consummates a plan of
complete liquidation or dissolution of the Company, or a sale of all or substantially all of
the assets of the Company.

2

 

     A Change in Control has not occurred solely because any person acquired beneficial
ownership of 20% or more of the outstanding Voting Securities as a result of the Company’s
acquisition of Voting Securities which reduced the number of Voting Securities outstanding
and increased the person’s number of shares proportionately owned.

     2.9 “Change in Control Price” means the higher of (i) the Fair Market Value on the date of
determination of the Change in Control or (ii) the highest price per share actually paid for the
Common Stock in connection with the Change in Control of the Company.

     2.10 “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     2.11 “Committee” means the Management Development and Compensation Committee of the Board, or
such other committee designated by the Board to administer the Plan, provided that the Committee
shall be constituted so as to satisfy any applicable legal requirements, including the requirements
of Rule 16b-3 promulgated under the Exchange Act and Section 162(m) of the Code, or any respective
successor rule or statute.

     2.12 “Common Stock” means the Common Stock, par value $0.01 per share, of the Company.

     2.13 “Disability” shall mean the “disability” of a person as defined in a then effective
long-term disability plan maintained by the Company that covers such person, or if such a plan does
not exist at any relevant time, “Disability” means the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code. Section 22(e)(3) of the Code provides that an
individual is totally and permanently disabled if he is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a continuous period
of not less than twelve (12) months.

     2.14 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     2.15 “Executive Officer” means the Chairman, Chief Executive Officer, President, any
Executive Vice President, any Senior Vice President, any senior officer reporting directly to the
Chief Executive Officer and any other Vice President or senior executive or officer designated by
the Chief Executive Officer.

     2.16 “Fair Market Value” means the market close price of a share of Common Stock as reported
on the composite tape for securities listed on the Stock Exchange for the applicable date, provided
that if no sales of Common Stock were made on the Stock Exchange on that date, the market close
price as reported on the composite tape for the preceding day on which sales of Common Stock were
made.

     2.17 “Long-Term Cash Bonus” means a payment in cash of an Executive Officer’s Payment
Opportunity.

3

 

     2.18 “Payment Opportunity” means the amount determined pursuant to any bonus formula
established by the Committee for an Executive Officer for a given Performance Period pursuant to
Section 13.3 of the Plan, taking into account the actual achievement of the relevant Performance
Targets and the Executive Officer’s Base Salary Factor.

     2.19 “Performance Period” means a stated period over which the Company’s performance is
measured for purposes of Awards under the Plan. The duration of Performance Periods may vary with
respect to different types of Awards under the Plan, as determined by the Committee.

     2.20 “Performance Shares” means Awards in the form of shares of Common Stock that may be
earned pursuant to the terms set forth in Section 11 of the Plan.

     2.21 “Performance Targets” means the predetermined goal or goals established by the
Committee in writing (which may be cumulative or alternative) based upon one, or any combination,
of the Business Criteria.

     2.22 “Participant” means an officer or employee of the Company or its subsidiaries who is
selected by the Committee to participate in the Plan, and nonemployee directors of the Company to
the extent provided in Section 12 hereof.

     2.23 “Stock Exchange” means the composite tape of the New York Stock Exchange (“NYSE”) or, if
the Common Stock is no longer included on the NYSE, then such other market price reporting system
on which the Common Stock is traded or quoted designated by the Committee after it determines that
such other exchange is both reliable and reasonably accessible.

3. Administration

     3.1 The Plan shall be administered by the Committee. A majority of the Committee shall
constitute a quorum, and the acts of a majority of a quorum shall be the acts of the Committee.

     3.2 Subject to the provisions of the Plan, the Committee (i) shall select the Participants,
determine the type of Awards to be made to Participants, determine the shares or share units
subject to Awards, and (ii) shall have the authority to interpret the Plan, to establish, amend,
and rescind any Administrative Policies, to determine the terms and provisions of any agreements
entered into hereunder, and to make all other determinations necessary or advisable for the
administration of the Plan. The Committee may correct any defect, supply any omission or reconcile
any inconsistency in the Plan or in any Award in the manner and to the extent it shall deem
desirable to carry it into effect. The determinations of the Committee in the administration of the
Plan, as described herein, shall be final and conclusive, provided, however, that no action shall
be taken which will prevent the options granted under Section 12 or any Award granted under the
Plan from meeting the requirements for exemption from Section 16(b) of the Exchange Act, or
subsequent comparable statute, as set forth in Rule 16b-3 of the

4

 

Exchange Act or any subsequent comparable rule; and, provided further, that no action shall be
taken which will prevent Awards that are intended to constitute “qualified performance-based
compensation,” within the meaning of Section 162(m) of the Code, from doing so.

     3.3 Notwithstanding the powers and authorities of the Committee under the Plan, the Committee
shall not permit the repricing of stock options by any method, including by cancellation and
reissuance.

     3.4 In order to enable Participants who are foreign nationals or employed outside the United
States, or both, to receive Awards under the Plan, the Committee may adopt such amendments,
Administrative Policies, subplans and the like as are necessary or advisable, in the opinion of the
Committee, to effectuate the purposes of the Plan.

4. Eligibility

     All employees of the Company and its subsidiaries who have demonstrated significant management
potential or who have the capacity for contributing in a substantial measure to the successful
performance of the Company, as determined by the Committee, are eligible to be Participants in the
Plan. Participants may receive one or more Awards under the Plan. Directors of the Corporation
other than directors who are employees of the Corporation shall be eligible only to receive stock
options, stock appreciation rights, restricted stock and restricted stock units pursuant to Section
12 hereof.

5. Shares Subject to the Plan

     5.1 The aggregate number of shares of Common Stock available for grant of Awards under the
Plan shall be that number of shares remaining available for grant under the Plan on the close of
business on the date immediately prior to the 2007 Annual Meeting of Stockholders plus 1,500,000,
subject to the adjustments provided for in Section 17 hereof. Shares of Common Stock available for
issuance under the Plan may be authorized and unissued shares or treasury shares, as the Company
may from time to time determine.

     5.2 Subject to adjustment as set forth in Section 17 hereof, the maximum aggregate number of
shares of Common Stock that may be granted under the Plan in the form of restricted stock grants
shall not exceed 50% of the aggregate shares of Common Stock available under the Plan.

     5.3 Shares of Common Stock subject to an Award that expires unexercised or that is forfeited,
terminated or canceled, in whole or in part, or is paid in cash in lieu of Common Stock, shall
thereafter again be available for grant under the Plan, except that any such shares attributable to
a Restricted Stock Award (as defined in Section 9) shall be counted against the restricted stock
limit set forth in Section 5.2 hereof.

5

 

6. Awards

     Awards under the Plan may consist of: stock options (either incentive stock options within the
meaning of Section 422 of the Code or nonstatutory stock options), stock appreciation rights,
restricted stock grants, restricted stock units, performance shares and long-term cash bonuses;
provided that no Participant may be granted Awards during any calendar year with respect thereto in
excess of 360,000 shares of Common Stock, subject to the provisions of Section 17. Awards of
performance shares, restricted stock and restricted stock units may provide the Participant with
dividends or dividend equivalents and voting rights prior to vesting (whether based on a period of
time or based on attainment of specified performance conditions). The terms, conditions and
restrictions of each Award shall be set forth in an Award Agreement.

7. Stock Options

     7.1 Grants. Awards may be granted in the form of stock options. Stock options may be
incentive stock options within the meaning of Section 422 of the Code or nonstatutory stock options
(i.e., stock options which are not incentive stock options), or a combination of both, or any
particular type of tax advantage option authorized by the Code from time to time. Awards of stock
options made to Participants subject to Section 162(m) of the Code are intended to qualify as
“qualified performance-based compensation” under Section 162(m) and the provisions of such Awards
shall be interpreted in a manner consistent with that intent, to the extent appropriate.

     7.2 Terms and Conditions of Options. An option shall be exercisable in whole or in such
installments and at such times and upon such terms as may be determined by the Committee; provided,
however, that no stock option shall be exercisable more than ten years after the date of grant
thereof. The option exercise price shall be established by the Committee, but such price shall not
be less than the Fair Market Value on the date of the stock option’s grant, subject to adjustment
as provided in Section 17 hereof.

     7.3 Restrictions Relating to Incentive Stock Options. Stock options issued in the form of
incentive stock options shall, in addition to being subject to all applicable terms, conditions,
restrictions and limitations established by the Committee, comply with Section 422 of the Code.
Incentive stock options shall be granted only to full time employees of the Company and its
subsidiaries within the meaning of Section 424 of the Code. The aggregate Fair Market Value
(determined as of the date the option is granted) of shares with respect to which incentive stock
options are exercisable for the first time by an individual during any calendar year (under this
Plan or any other plan of the Company which provides for the granting of incentive stock options)
may not exceed $100,000 or such other number as may be applicable under the Code from time to time.

     7.4 Payment. Upon exercise, a Participant may pay the option exercise price of a stock option
in cash, shares of Common Stock, stock appreciation rights or a combination of the foregoing, or
such other consideration as the Committee may deem appropriate. The Committee shall establish
appropriate methods for accepting Common Stock and may impose such

6

 

conditions as it deems appropriate on the use of such Common Stock to exercise a stock option.

     7.5 Additional Terms and Conditions. The Committee may, by way of the Award Agreement or
Administrative Policies (or amendments thereto), establish such other terms, conditions or
restrictions, if any, on any stock option award, provided they are consistent with the Plan. The
Committee may condition the vesting of stock options on the achievement of financial performance
criteria established by the Committee at the time of grant.

8. Stock Appreciation Rights

     8.1 Grants. Awards may be granted in the form of stock appreciation rights (“SARs”). Awards
of SARs made to Participants subject to 162(m) of the Code are intended to qualify as “qualified
performance-based compensation” under Section 162(m) and the provisions of such Awards shall be
interpreted in a manner consistent with that intent, to the extent appropriate. SARs shall entitle
the recipient to receive a payment equal to the appreciation in market value of a stated number of
shares of Common Stock from the price stated in the Award Agreement to the Fair Market Value on the
date of exercise or surrender. An SAR may be granted in tandem with all or a portion of a related
stock option under the Plan (“Tandem SARs”), or may be granted separately (“Freestanding SARs”);
provided, however, that Freestanding SARs shall be granted only to Participants who are foreign
nationals or are employed outside of the United States, or both, and as to whom the Committee
determines the interests of the Company could not as conveniently be served by the grant of other
forms of Awards under the Plan. A Tandem SAR may be granted either at the time of the grant of the
related stock option or at any time thereafter during the term of the stock option. In the case of
SARs granted in tandem with stock options granted prior to the grant of such SARs, the appreciation
in value shall be appreciation from the option exercise price of such related stock option to the
Fair Market Value on the date of exercise.

     8.2 Terms and Conditions of Tandem SARs. A Tandem SAR shall be exercisable to the extent, and
only to the extent, that the related stock option is exercisable. Upon exercise of a Tandem SAR as
to some or all of the shares covered in an Award, the related stock option shall be canceled
automatically to the extent of the number of SARs exercised, and such shares shall not thereafter
be eligible for grant under Section 5 hereof.

     8.3 Terms and Conditions of Freestanding SARs. Freestanding SARs shall be exercisable in
whole or in such installments and at such times as may be determined by the Committee. The base
price of a Freestanding SAR shall be determined by the Committee; provided, however, that such
price shall not be less than the Fair Market Value on the date of the award of the Freestanding
SAR.

     8.4 Deemed Exercise. The Committee may provide that an SAR shall be deemed to be exercised at
the close of business on the scheduled expiration date of such SAR, if at such time the SAR by its
terms is otherwise exercisable and, if so exercised, would result in a payment to the Participant.

     8.5 Additional Terms and Conditions. The Committee may, by way of the Award

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Agreement or Administrative Policies, determine such other terms, conditions and restrictions,
if any, on any SAR Award, provided they are consistent with the Plan.

9. Restricted Stock Awards

     9.1 Grants. Awards may be granted in the form of restricted stock (“Restricted Stock
Awards”). Restricted Stock Awards shall be awarded in such numbers and at such times as the
Committee shall determine.

     9.2 Award Restrictions. Restricted Stock Awards shall be subject to such terms, conditions or
restrictions as the Committee deems appropriate including, but not limited to, restrictions on
transferability, requirements of continued employment, achievement of individual performance goals
or Performance Targets. The period of vesting and the forfeiture restrictions shall be established
by the Committee at the time of grant, except that each restriction period shall not be less than
12 months. To the extent Restricted Awards are subject to Performance Targets, it is intended that
all such Restricted Stock Awards granted to Participants subject to Section 162(m) of the Code will
qualify as “qualified performance-based compensation” under Section 162(m) and such Awards shall be
interpreted in a manner consistent with that intent, to the extent appropriate.

     9.3 Rights as Shareholders. During the period in which any restricted shares of Common Stock
are subject to forfeiture restrictions imposed under the preceding paragraph, the Committee may, in
its discretion, grant to the Participant to whom such restricted shares have been awarded, all or
any of the rights of a shareholder with respect to such shares, including, but not limited to, the
right to vote such shares and to receive dividends.

     9.4 Evidence of Award. Any Restricted Stock Award granted under the Plan may be evidenced in
such manner as the Committee deems appropriate, including, without limitation, book entry
registration or issuance of a stock certificate or certificates.

     10. Restricted Stock Units

     10.1 Grants. Awards may be granted in the form of restricted stock units (“Restricted Stock
Units”). Restricted Stock Units shall be awarded in such numbers and at such times as the
Committee shall determine.

     10.2 Award Restrictions. Restricted Stock Units shall be subject to such terms, conditions or
restrictions as the Committee deems appropriate including, but not limited to, restrictions on
transferability, requirements of continued employment, achievement of individual performance goals
or Performance Targets. The period of vesting and the forfeiture restrictions shall be established
by the Committee at the time of grant, except that each restriction period shall not be less than
12 months. To the extent Restricted Units are subject to Performance Targets, it is intended that
all such Restricted Stock Units granted to Participants subject to Section 162(m) of the Code will
qualify as “qualified performance-based compensation” under Section 162(m) and such Awards shall be
interpreted in a manner consistent with that intent, to the extent appropriate.

8

 

     10.3 Rights as Shareholders. During the period in which any Restricted Stock Units are
subject to forfeiture restrictions imposed under the preceding paragraph, the Participant to whom
such Restricted Stock Units have been awarded, will have no rights of ownership in the Restricted
Stock Units or the right to vote them, but the Committee may, at or after the Grant Date authorize
the payment of dividend equivalents on such Restricted Stock Units on either a current, deferred or
contingent basis, either in cash or additional Common Stock.

     10.4 Evidence of Award. Restricted Stock Units granted under the Plan may be evidenced in
such manner as the Committee deems appropriate.

11. Performance Shares

     11.1 Grants. Awards may be granted in the form of shares of Common Stock that are earned only
after the attainment of predetermined performance targets during a performance period as
established by the Committee (“Performance Shares”).

     11.2 Performance Criteria. The Committee may grant an Award of Performance Shares to
Participants as of the first day of each Performance Period established for Performance Shares.
Performance Targets will be established at the beginning of each Performance Period. The Committee
shall be permitted to make adjustments when determining the attainment of the applicable
Performance Targets to reflect extraordinary or nonrecurring items or events, or unusual
nonrecurring gains or losses identified in the Company’s financial statements, as long as any such
adjustments are made in a manner consistent with Section 162(m) to the extent applicable. Awards
of Performance Shares made to Participants subject to Section 162(m) of the Code are intended to
qualify under Section 162(m) and provisions of such Awards shall be interpreted in a manner
consistent with that intent, to the extent appropriate. At the end of the Performance Period,
Performance Shares shall be converted into Common Stock (or cash or a combination of Common Stock
and cash, as determined by the Award Agreement) and distributed to Participants based upon such
entitlement. Award payments made in cash rather than the issuance of Common Stock shall not, by
reason of such payment in cash, result in additional shares being available for reissuance pursuant
to Section 5 hereof.

     11.3 Additional Terms and Conditions. The Committee may, by way of the Award Agreement or
Administrative Policies, determine the manner of payment of Awards of Performance Shares and other
terms, conditions or restrictions, if any, on any Award of Performance Shares, provided they are
consistent with the Plan and to the extent applicable, Section 162(m) of the Code.

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	 	 	12. Directors’ Awards

     12.1 Grants. Awards may be granted to nonemployee directors in the form of stock options
(“Director Stock Options”), stock appreciation rights (“Director SARs”), restricted stock
(“Director Restricted Stock”), restricted stock units (“Director Restricted Stock Units”) or a
combination thereof provided the Awards satisfy the requirements of this Section 12. Subject to
Section 17 hereof, on the date following the commencement of the Company’s annual meeting of
stockholders each year, the Committee, in its sole discretion, shall determine the Award amount
granted to each nonemployee director. All such options shall be nonstatutory stock options. The
terms, conditions and restrictions of each Award shall be set forth in an Award Agreement.

     12.2 Award Agreement. Director Stock Options, Director SARs, Director Restricted Stock and
Director Restricted Stock Units granted to nonemployee directors shall be evidenced by an Award
Agreement in the form of a stock option agreement, stock appreciation agreement, restricted stock
agreement, or restricted stock unit agreement, as applicable, dated as of the date of the grant,
which agreement shall be in such form, consistent with the terms and requirements of this Section
12, as shall be approved by the Committee from time to time and executed on behalf of the Company
by its Chief Executive Officer.

     12.3 Option Exercise Price. The option exercise price of Director Stock Options shall be 100
percent of the Fair Market Value on the date such options are granted. The Committee shall be
authorized to compute the price per share on the date of grant. Payment of the option exercise
price may be made in cash or in shares of Common Stock or a combination of cash and Common Stock.

     12.4 Terms and Conditions of Director Stock Options. Director Stock Options shall become
fully exercisable on the first anniversary of the date of grant and shall terminate upon the
expiration of five years from the date of grant. To the extent an option is not otherwise
exercisable at the date of the nonemployee director’s retirement under a retirement plan or policy
of the Company or at the time a nonemployee director ceases to be a director on account of
disability, it shall become fully exercisable upon such retirement or cessation of service as a
director due to disability. Upon such retirement or cessation of service due to disability, such
options shall be exercisable for a period of five years, subject to the original term thereof.
Options not otherwise exercisable at the time of the death of a nonemployee director during service
with the Company shall become fully exercisable upon his death. Upon the death of a nonemployee
director while in service as a director or within the five-year period during which the options are
exercisable following the retirement or disability of a nonemployee director, such options shall
remain exercisable (subject to the original term of the option) for a period of one year after the
date of death. To the extent an option is exercisable on the date a director ceases to be a
director (other than by reason of disability, death or retirement), the option shall continue to be
exercisable (subject to the original term of the option) for a period of 90 days thereafter.

     12.5 Director SAR Grants. Director SARs shall entitle the recipient to receive a payment
equal to the appreciation in market value of a stated number of shares of Common Stock from the
price stated in the Award Agreement to the Fair Market Value on the date of

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exercise or surrender. A Director SAR may be granted in tandem with all or a portion of a
related stock option under the Plan (“Director Tandem SARs”) and may be granted either at the time
of the grant of the related stock option or at any time thereafter during the term of the stock
option. In the case of Director SARs granted in tandem with stock options granted prior to the
grant of such Director SARs, the appreciation in value shall be appreciation from the option
exercise price of such related stock option to the Fair Market Value on the date of exercise.

     12.6 Terms and Conditions of Director Tandem SARs. A Director Tandem SAR shall be exercisable
to the extent, and only to the extent, that the related stock option is exercisable. Upon exercise
of a Director Tandem SAR as to some or all of the shares covered in an Award, the related stock
option shall be canceled automatically to the extent of the number of Director SARs exercised, and
such shares shall not thereafter be eligible for grant under Section 5 hereof.

     12.7 Deemed Exercise. The Committee may provide that a Director SAR shall be deemed to be
exercised at the close of business on the scheduled expiration date of such Director SAR, if at
such time the Director SAR by its terms is otherwise exercisable and, if so exercised, would result
in a payment to the director.

     12.8 Additional Terms and Conditions. The Committee may, by way of the Award Agreement or
Administrative Policies, determine such other terms, conditions and restrictions, if any, on any
Director SAR Award, provided they are consistent with the Plan.

     12.9 Award Restrictions. Director Restricted Stock and Director Restricted Stock Units awards
shall be subject to such terms, conditions or restrictions as the Committee deems appropriate
including, but not limited to, restrictions on transferability or requirements of continued service
as a nonemployee director. The period of vesting and the forfeiture restrictions shall be
established by the Committee at the time of grant, except that each restriction period shall not be
less than 12 months.

     12.10 Rights as Shareholders. During the period in which any Director Restricted Stock is
subject to forfeiture restrictions imposed under the preceding paragraph, the Committee may, in its
discretion, grant to the Participant to whom such restricted shares have been awarded, all or any
of the rights of a shareholder with respect to such shares, including, but not limited to, the
right to vote such shares and to receive dividends. During the period in which any Restricted Stock
Units are subject to forfeiture restrictions imposed under the preceding paragraph, the Participant
to whom such Restricted Stock Units have been awarded, will have no rights of ownership in the
Restricted Stock Units or the right to vote them, but the Committee may, at or after the Grant Date
authorize the payment of dividend equivalents on such Restricted Stock Units on either a current,
deferred or contingent basis, either in cash or additional Common Stock.

     12.11 Evidence of Award. Any Director Restricted Stock Award or any Director Restricted Stock
Units granted under the Plan may be evidenced in such manner as the Committee deems appropriate,
including, without limitation, book entry registration or issuance of a stock certificate or
certificates for Director Restricted Stock Awards.

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     12.12 Transferability. Except as provided in Section 16 hereof, no option, stock appreciation
right, restricted stock or restricted stock units shall be transferable by a nonemployee director
except by will or the laws of descent and distribution, and during the director’s lifetime options
may be exercised only by him or his legal representative.

     12.13 Change in Control. In the event of a Change in Control, the provisions provided in
Section 21 will apply to all Awards granted to nonemployee directors.

13. Long-Term Cash Bonus

     13.1 Eligibility. Only Executive Officers shall be eligible to receive a Long-Term Cash
Bonus. Not later than ninety (90) days after the commencement of a Performance Period, the
Committee shall select the Executive Officers eligible to receive a Long-Term Cash Bonus for the
Performance Period. Each Executive Officer participating in a Performance Period shall be eligible
to receive a Long-Term Cash Bonus upon completion of a Performance Period only if Executive Officer
is still employed by the Company upon the last day of such Performance Period, provided, however,
that the Committee shall have the discretion to grant eligibility to the Executive Officer in its
discretion, notwithstanding the fact that the Executive Officer is not still employed by the
Company at such point.

     13.2 Performance Target(s); Business Criteria; Base Salary Factors. The applicable Business
Criteria and Performance Targets for a given Performance Period shall be established by the
Committee in advance of the deadlines set forth in the regulations under Section 162(m) of the Code
and while the performance relating to the Performance Targets remains substantially uncertain
within the meaning of Section 162(m) of the Code. The Committee shall be permitted to make
adjustments when determining the attainment of Performance Targets to reflect extraordinary or
nonrecurring items or events, or unusual nonrecurring gains or losses identified in the Company’s
financial statements, as long as any such adjustments are made in a manner consistent with Section
162(m) of the Code, to the extent applicable.

     13.3 Calculation of Long-Term Cash Bonus. At the beginning of each Performance Period, the
Committee shall provide in terms of an objective formula or standard for each Executive Officer:
(a) the method of computing the specific amount that will represent the Executive Officer’s
Long-Term Cash Bonus; and (b) the Base Salary Factor to be used in calculating any Executive
Officer’s Long-Term Cash Bonus. Subject to Section 13.4, at the first meeting of the Committee
after the expiration of the Performance Period, the Committee shall determine the extent to which
the Performance Targets have been achieved, and shall determine each Executive Officer’s Payment
Opportunity based on his or her Base Salary Factor. Notwithstanding the attainment of the
Performance Targets, Long-Term Cash Bonuses for individual Executive Officers may be denied or
adjusted by the Committee, in its sole judgment, based on its assessment of the Executive Officer’s
performance. However, no upward adjustment may be made to a Long-Term Cash Bonus for an Executive
Officer if Section 162(m) of the Code would limit the deduction the Company may claim for that
Executive Officer’s

12

 

compensation.

     13.4 Maximum Long-Term Cash Bonus. Notwithstanding any other provision in the Plan, no
Executive Officer shall receive for any Performance Period any Long-Term Cash Bonus under the Plan
in excess of $3,000,000 or, if less, three times his or her Base Salary as of the last day of the
applicable Performance Cycle. Any Payment Opportunity in excess of the foregoing limits shall be
reduced automatically to the extent of the excess.

     13.5 Payment. Long-Term Cash Bonuses shall be paid in cash or Restricted Stock Awards, as
determined by the Committee and subject to the remaining terms of this Plan. Payment of Long-Term
Cash Bonuses shall occur within a reasonable time after the Committee has certified in writing the
extent to which the Performance Targets have been achieved and determined the amount of each
Executive Officer’s Long-Term Cash Bonus for the given Performance Period pursuant to Sections 13.3
and 13.4 hereof, but in no case shall any such payment be made later than March 15th
following the calendar year in which occurs the later of the time the legally binding right
to the payment arises or the time such right first ceases to be subject to a substantial risk of
forfeiture.

14. Dividends and Dividend Equivalents; Deferrals

     14.1 If an Award is granted in the form of a Restricted Stock Award, Restricted Stock Units
or Performance Shares, the Committee may choose, at the time of the grant of the Award, to include
as part of such Award an entitlement to receive dividends or dividend equivalents, subject to such
terms, conditions, restrictions or limitations, if any, as the Committee may establish. Dividends
and dividend equivalents shall be paid in such form and manner and at such time as the Committee
shall determine.

     14.2 The Committee may permit Participants to elect to defer the issuance of shares or the
settlement of Awards in cash under Administrative Policies established by the Committee. It may
also provide that deferred settlements include the payment or crediting of interest on the deferral
amounts or the payment or crediting of dividend equivalents on deferred settlements denominated in
shares. Notwithstanding the foregoing, to the extent the Award being deferred is that of a
Participant subject to Section 162(m) of the Code, the Committee will ensure that any increase in
the Award will be based upon a reasonable rate of interest or on one or more predetermined actual
investments such that the amount payable at the later date will be based upon actual returns,
including any decrease or increase in the value of the investment(s).

15. Termination of Employment

     Consistent with the requirements of Section 162(m) regarding “qualified performance-based
compensation,” the Committee shall adopt Administrative Policies determining the entitlement of
Participants who cease to be employed by either the Company or its subsidiaries due to death,
disability, resignation, termination or retirement pursuant to an established retirement plan or
policy of the Company or its subsidiaries.

13

 

16. Assignment and Transfer

     
The rights and interests of a Participant under the Plan may not be assigned, encumbered or
transferred except, in the event of the death of a Participant, by will or the laws of descent and
distribution. Notwithstanding the foregoing, the Committee may, in its discretion, grant stock
options to one or more executive officers or nonemployee directors of the Company (or amend
existing stock options) on terms that permit the stock options to be transferred by any such
executive officer or nonemployee director, for estate planning purposes, to (a) the executive
officer’s or nonemployee director’s spouse, children, grandchildren, parents, siblings,
stepchildren, stepgrandchildren or in-laws (“Family Members”), (b) entities that are exclusively
family-related, including trusts for the exclusive benefit of Family Members and limited
partnerships or limited liability companies in which Family Members are the only partners or
members, or (c) such other persons or entities specifically approved by the Committee. The terms
and conditions applicable to the transfer of any such stock options shall be established by the
Committee, in its discretion but consistent with this Section 16, and shall be contained in the
applicable stock option agreement (or an amendment thereto) between the Company and the executive
officer.

17. Adjustments Upon Changes in Capitalization

     In the event of any change in the outstanding shares of Common Stock by reason of a
reorganization, recapitalization, stock split, stock dividend, combination or exchange of shares,
merger, consolidation or any change in the corporate structure or shares of the Company, the
maximum aggregate number and class of shares as to which Awards may be granted under the Plan,
including any limitations upon individual Participants or regarding Director Stock Options, as well
as the number and class of shares issuable, and the related option exercise price, pursuant to then
outstanding Awards, shall be appropriately adjusted by the Committee, whose determination shall be
final.

18. Withholding Taxes

     The Company shall have the right to deduct from any payment to be made pursuant to the Plan
the amount of any taxes required by law to be withheld therefrom, or to require a Participant to
pay to the Company such amount required to be withheld prior to the issuance or delivery of any
shares of Stock or the payment of cash under the Plan. The Committee may, in its discretion, permit
a Participant to elect to satisfy such withholding obligation by having the Company retain the
number of shares of Common Stock whose Fair Market Value equals the amount required to be withheld.
Any fraction of a share of Common Stock required to satisfy such obligation shall be disregarded
and the amount due shall instead be paid in cash to the Participant.

19. Regulatory Approvals and Listings

     Notwithstanding anything contained in this Plan to the contrary, the Company shall have no
obligation to issue or deliver certificates of Common Stock evidencing Restricted Stock Awards,
Restricted Stock Units or any other Award payable in Common Stock prior to (i) the obtaining of any
approval from any governmental agency which the Company shall, in its

14

 

sole discretion, determine to be necessary or advisable, (ii) the admission of such shares to
listing on the Stock Exchange and (iii) the completion of any registration or other qualification
of said shares under any state or federal law or ruling of any governmental body which the Company
shall, in its sole discretion, determine to be necessary or advisable.

20. No Right to Continued Employment or Grants

     No person shall have any claim or right to be granted an Award, and the grant of an Award
shall not be construed as giving a Participant the right to be retained in the employ of the
Company or its subsidiaries. Further, the Company and its subsidiaries expressly reserve the right
at any time to dismiss a Participant free from any liability, or any claim under the Plan, except
as provided herein or in any Award Agreement entered into hereunder.

21. Change in Control

     In the event of a Change in Control, (i) all SARs which have not been granted in tandem with
stock options shall become exercisable in full, (ii) the restrictions applicable to all shares of
restricted stock and restricted stock units shall lapse and such shares shall be deemed fully
vested and all restricted stock granted in the form of share units shall be paid in cash, (iii) all
Performance Shares and Long-Term Cash Bonuses shall be deemed to be earned on a prorated basis at
the Payment Opportunity associated with the achievement of 100% of the Performance Targets assigned
to such Awards, and all Performance Shares granted in the form of share units shall be paid in
cash, and (iv) any Participant who has been granted a stock option which is not exercisable in full
shall be entitled, in lieu of the exercise of the portion of the stock option which is not
exercisable, to obtain a cash payment in an amount equal to the difference between the option price
of such stock option and (A) in the event the Change in Control is the result of a tender offer or
exchange offer for the Common Stock, the final offer price per share paid for the Common Stock, or
such lower price as the Committee may determine with respect to any incentive stock option to
preserve its incentive stock option status, multiplied by the number of shares of Common Stock
covered by such portion of the stock option, or (B) in the event the Change in Control is the
result of any other occurrence, the aggregate value of the Common Stock covered by such portion of
the stock option, as determined by the Committee at such time. The Committee may, in its
discretion, include such further provisions and limitations in, any agreement documenting such
Awards as it may deem equitable and in the best interests of the Company. To the extent that any
payment or benefit is required to be paid under this paragraph, pursuant to a Change in Control,
such payment shall be made no later than March 15th following the calendar year in which
occurs the later of the time the legally binding right to the payment arises or the time such right
first ceases to be subject to a substantial risk of forfeiture.

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22. Amendment

     The Board may amend, suspend or terminate the Plan or any portion thereof at any time,
provided that no amendment shall be made that would impair the rights of a Participant under an
outstanding Award without the Participant’s consent, and no amendment shall be made without
stockholder approval if such approval is necessary in order to preserve the applicability of any
exemption under Rule 16b-3 under the Exchange Act or qualification of any Award under Section
162(m), or is otherwise required as a matter of law. Further, no amendment to the Plan shall be
effective that would: (a) increase the maximum amount that can be paid to a Participant under the
Plan; (b) change the Business Criteria for payment of performance-based Awards; or (c) modify the
eligibility requirements for Participants in the Plan, unless first approved by the Company’s
stockholders. An Award Agreement may be amended by action of the Board or the Committee, provided
that no such amendment shall be made that would impair the rights of a Participant under such Award
Agreement without the Participant’s consent.

23. Governing Law

     The validity, construction and effect of the Plan and any actions taken or relating to the
Plan shall be determined in accordance with the laws of the State of Delaware and applicable
Federal law.

24. Rights as Shareholder

     Except as otherwise provided in the Award Agreement, a Participant shall have no rights as a
shareholder until he or she becomes the holder of record. To the extent any person acquires a right
to receive payments from the Company under this Plan, such rights shall be no greater than the
rights of an unsecured creditor of the Company.

25. Effective Date

     The Plan became effective on December 23, 1993. Subject to earlier termination pursuant to
Section 21, the Plan shall terminate effective December 31, 2012. After termination of the Plan, no
future Awards may be granted but previously made Awards shall remain outstanding in accordance with
their applicable terms and conditions and the terms and conditions of the Plan.

26. Interpretation and Savings

     All terms and conditions of this Plan applicable to qualified performance-based compensation
shall be construed to be in accordance with the qualified performance-based compensation
requirements of Section 162(m) of the Internal Revenue Code, and any offending or non-compliant
terms shall be amended, voided and reformed to the extent necessary to comply with Section 162(m).
Likewise, all terms and conditions of this Plan applicable to any non-qualified deferred
compensation shall be construed to be in accordance with the non-qualified deferred compensation
requirements of Section 409A of the Internal Revenue Code, including but not limited to its short
term deferral exception, and any offending or non-compliant

16

 

terms shall be amended, voided and reformed to the extent necessary to comply with Section 409A.

17

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