Document:

Exhibit 10.2

 

GENCO SHIPPING & TRADING LIMITED

2005 EQUITY INCENTIVE PLAN

 

ARTICLE I.

General

 

1.1.                            Purpose

 

The
Genco Shipping & Trading Limited 2005 Equity Incentive Plan (the “Plan”)
is designed to provide certain key persons, on whose initiative and efforts the
successful conduct of the business of Genco Shipping & Trading Limited
(the “Company”) depends, with incentives to: (a) enter into and remain in
the service of the Company (b) acquire a proprietary interest in the
success of the Company, (c) maximize their performance and (d) enhance
the long-term performance of the Company.

 

1.2.                            Administration

 

(a)                                  Administration
by Board of Directors.  The Plan shall be
administered by the Company’s Board of Directors (the “Administrator”).  The Administrator shall have the authority (i) to
exercise all of the powers granted to it under the Plan, (ii) to construe,
interpret and implement the Plan and any Award Agreements executed pursuant to Section 2.1
in its sole discretion with all such determination being final, binding and
conclusive, (iii) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules governing its own
operations, (iv) to make all determinations necessary or advisable in
administering the Plan, and (v) to correct any defect, supply any omission
and reconcile any inconsistency in the Plan.

 

(b)                                 Administrator
Action.  Actions of the Administrator
shall be taken by the vote of a majority of its members.  Any action may be taken by a written
instrument signed by a majority of the Administrator members, and action so
taken shall be fully as effective as if it had been taken by a vote at a
meeting.  Except to the extent prohibited
by applicable law or the applicable rules of a stock exchange, the
Administrator may allocate all or any portion of its responsibilities and
powers to any one or more of its members and may delegate all or any part of
its responsibilities to any person or persons selected by it, and may revoke
any such allocation or delegation at any time.

 

1.3.                            Persons Eligible for Awards

 

The
persons eligible to receive awards under the Plan are those officers,
directors, and executive, managerial, administrative and professional employees
of the Company, (collectively, “key persons”) as the Administrator in its sole
discretion shall select, taking into account the duties of the respective
employees, their present and potential contributions to the success of the
Company, and such other factors as the Administrator shall deem relevant in
connection with accomplishing the purpose of the Plan.  The Administrator may from time to 

 

1

 

time, in its sole discretion, determine that any key
person shall be ineligible to receive awards under the Plan.

 

1.4.                            Types of Awards Under Plan

 

Awards
may be made under the Plan in the form of (a) incentive stock options, (b) non-qualified
stock options, (c) stock appreciation rights, (d) dividend equivalent
rights, (e) restricted stock, (f) unrestricted stock, (g) restricted
stock units, and (h) performance shares, all as more fully set forth in Article II.  The term “award” means any of the
foregoing.  No incentive stock option may
be granted to a person who is not an employee of the Company on the date of
grant.  Notwithstanding any provision of
the Plan, to the extent any Award would be subject to Section 409A of the
Code, no such Award may be granted if it would fail to comply with the
requirements set forth in Section 409A of the Code.

 

1.5.                            Shares Available for Awards

 

(a)                                  Subject
to the provisions of Section 1.5(b), the aggregate number of shares of
common stock of the Company (“Common Stock”) with respect to which options or
restricted shares may at any time be granted under the Plan are 2,000,000
shares of Common Stock.

 

(b)                                 Shares
issued pursuant to the Plan may be authorized but unissued Common Stock.  The Administrator may direct that any stock
certificate evidencing shares issued pursuant to the Plan shall bear a legend
setting forth such restrictions on transferability as may apply to such shares.

 

(c)                                  Adjustment
Upon Changes in Common Stock.  Upon
certain changes in Common Stock, the number of shares of Common Stock available
for issuance with respect to awards that may be granted under the Plan pursuant
to Section 1.5(a), shall be adjusted pursuant to Section 3.7(a).

 

(d)                                 Certain
Shares to Become Available Again.  The
following shares of Common Stock shall again become available for awards under
the Plan: any shares that are subject to an award under the Plan and that remain
unissued upon the cancellation or termination of such award for any reason
whatsoever; any shares of restricted stock forfeited pursuant to Section 2.7(e),
provided that any dividends paid on such shares are also forfeited pursuant to
such Section 2.7(e); and any shares in respect of which a stock
appreciation right or performance share award is settled for cash.

 

(e)                                  Individual
Limit.  Except for the limits set forth
in this Section 1.5(d) and 2.2(i), no provision of this Plan shall be
deemed to limit the number or value of shares with respect to which the
Administrator may make awards to any eligible person.  Subject to adjustment as provided in Section 3.7(a),
the total number of shares of Common Stock with respect to which awards may be
granted to any one employee of the Company during any one calendar year shall
not exceed 400,000 shares.  Stock options
and stock appreciation rights granted and subsequently canceled or deemed to be
canceled in a calendar year count against this limit even after their
cancellation.  The provisions of this Section 1.5(e) shall
not apply in any circumstance with respect to which the Committee determines
that compliance with Section 162(m) of the Code is not necessary.

 

 

1.6.                            Definitions of Certain Terms

 

(a)                                  The
“Fair Market Value” of a share of Common Stock on any day shall be the closing
price on the New York Stock Exchange as reported for such day in The Wall
Street Journal or, if no such price is reported for such day, the average of
the high bid and low asked price of Common Stock as reported for such day.  If no quotation is made for the applicable
day, the Fair Market Value of a share of Common Stock on such day shall be
determined in the manner set forth in the preceding sentence using quotations
for the next preceding day for which there were quotations, provided that such
quotations shall have been made within the ten (10) business days
preceding the applicable day. 
Notwithstanding the foregoing, if deemed necessary or appropriate by the
Administrator, the Fair Market Value of a share of Common Stock on any day
shall be determined by the Administrator. 
In no event shall the Fair Market Value of any share of Common Stock be
less than its par value.

 

(b)                                 The
term “incentive stock option” means an option that is intended to qualify for
special federal income tax treatment pursuant to sections 421 and 422 of the
Code as now constituted or subsequently amended, or pursuant to a successor
provision of the Code, and which is so designated in the applicable Grant Certificate.  Any option that is not specifically
designated as an incentive stock option shall under no circumstances be
considered an incentive stock option. 
Any option that is not an incentive stock option is referred to herein
as a “non-qualified stock option.”

 

(c)                                  The
term “Code” means the Internal Revenue Code of 1986, as amended.

 

(d)                                 The
term “cause” in connection with a termination of employment or Board membership
by reason of a dismissal for cause shall mean:

 

(i)                                     to
the extent that there is an employment, severance or other agreement governing
the relationship between the grantee and the Company, a Company subsidiary or a
Company joint venture, which agreement contains a definition of “cause,” cause
shall consist of those acts or omissions that would constitute “cause” under
such agreement; and otherwise,

 

(ii)                                  the
grantee’s termination of employment or Board membership by the Company or an
affiliate on account of any one or more of the following:

 

(A)                              any
failure by the grantee substantially to perform the grantee’s employment or
Board membership duties;

 

(B)                                any
excessive unauthorized absenteeism by the grantee;

 

(C)                                any
refusal by the grantee to obey the lawful orders of the Board or any other
person or Administrator to whom the grantee reports;

 

(D)                               any
act or omission by the grantee that is or may be injurious to the Company,
monetarily or otherwise;

 

(E)                                 any
act by the grantee that is inconsistent with the best interests of the Company;

 

 

(F)                                 the
grantee’s material violation of any of the Company’s policies, including,
without limitation, those policies relating to discrimination or sexual
harassment;

 

(G)                                the
grantee’s unauthorized (a) removal from the premises of the Company or an
affiliate of any document (in any medium or form) relating to the Company or an
affiliate or the customers or clients of the Company or an affiliate or (b) disclosure
to any person or entity of any of the Company’s, or its affiliates’
confidential or proprietary information;

 

(H)                               the
grantee’s commission of any felony, or any other crime involving moral
turpitude; and

 

(I)                                    the
grantee’s commission of any act involving dishonesty or fraud.

 

Any
rights the Company may have hereunder in respect of the events giving rise to
cause shall be in addition to the rights the Company may have under any other
agreement with a grantee or at law or in equity.  Any determination of whether a grantee’s
employment or Board membership is (or is deemed to have been) terminated for
cause shall be made by the Administrator in its discretion, which determination
shall be final, binding and conclusive on all parties.  If, subsequent to a grantee’s voluntary
termination of employment or involuntary termination of employment without
cause, it is discovered that the grantee’s employment could have been
terminated for cause, the Administrator may deem such grantee’s employment or
Board membership to have been terminated for cause.  A grantee’s termination of employment or
Board membership for cause shall be effective as of the date of the occurrence
of the event giving rise to cause, regardless of when the determination of
cause is made.

 

ARTICLE II.

Awards Under The Plan

 

2.1.                            Agreements Evidencing Awards

 

Each
award granted under the Plan (except an award of unrestricted stock) shall be
evidenced by a written certificate (“Award Agreement”) which shall contain such
provisions as the Administrator may, in its sole discretion, deem necessary or
desirable.  By executing an Award
Agreement pursuant to the Plan, a grantee thereby agrees that the award shall
be subject to all of the terms and provisions of the Plan and the applicable
Award Agreement.

 

2.2.                            Grant of Stock Options,
Stock Appreciation Rights, Restricted Stock Units and Dividend Equivalent
Rights

 

(a)                                  Stock
Option Grants.  The Administrator may
grant incentive stock options and non-qualified stock options (“options”) to
purchase shares of Common Stock from the Company, to such key persons, and in
such amounts and subject to such vesting and forfeiture provisions and other
terms and conditions, as the Administrator shall determine, in its sole
discretion, subject to the provisions of the Plan.  The Administrator may not grant incentive
stock options to non-employee directors.

 

 

(b)                                 Stock
Appreciation Right Grants; Types of Stock Appreciation Rights.  The Administrator may grant stock
appreciation rights to such key persons, and in such amounts and subject to
such vesting and forfeiture provisions and other terms and conditions, as the
Administrator shall determine, in its sole discretion, subject to the
provisions of the Plan.  The terms of a
stock appreciation right may provide that it shall be automatically exercised
for a cash payment upon the happening of a specified event that is outside the
control of the grantee, and that it shall not be otherwise exercisable.  Stock appreciation rights may be granted in
connection with all or any part of, or independently of, any option granted
under the Plan.  A stock appreciation
right granted in connection with an option may be granted at or after the time
of grant of such option.

 

(c)                                  Nature
of Stock Appreciation Rights.  The
grantee of a stock appreciation right shall have the right, subject to the
terms of the Plan and the applicable Award Agreement, to receive from the
Company an amount equal to (i) the excess of the Fair Market Value of a
share of Common Stock on the date of exercise of the stock appreciation right
over the Fair Market Value of a share of Common Stock on the date of grant (or
over the option exercise price if the stock appreciation right is granted in
connection with an option), multiplied by (ii) the number of shares with
respect to which the stock appreciation right is exercised.  Payment upon exercise of a stock appreciation
right shall be in cash or in shares of Common Stock (valued at their Fair
Market Value on the date of exercise of the stock appreciation right) or both,
all as the Administrator shall determine in its sole discretion; provided,
however, that a Stock Appreciation Right settled in cash shall be exercisable only
to the extent that such exercise complies with Section 409A of the
Code.  Upon the exercise of a stock
appreciation right granted in connection with an option, the number of shares
subject to the option shall be reduced by the number of shares with respect to
which the stock appreciation right is exercised.  Upon the exercise of an option in connection
with which a stock appreciation right has been granted, the number of shares
subject to the stock appreciation right shall be reduced by the number of shares
with respect to which the option is exercised.

 

(d)                                 Option
Exercise Price.  Each Award Agreement
with respect to an option shall set forth the amount (the “option exercise
price”) payable by the grantee to the Company upon exercise of the option
evidenced thereby.  The option exercise
price per share shall be determined by the Administrator in its sole
discretion; provided, however, that the option exercise price of an incentive
stock option shall be at least 100% of the Fair Market Value of a share of Common
Stock on the date the option is granted, and provided further that in no event
shall the option exercise price be less than the par value of a share of Common
Stock.

 

(e)                                  Exercise
Period.  Each Award Agreement with
respect to an option or stock appreciation right shall set forth the periods
during which the award evidenced thereby shall be exercisable, whether in whole
or in part.  Such periods shall be
determined by the Administrator in its sole discretion; provided, however, that
no option or a stock appreciation right shall be exercisable more than 10 years
after the date of grant, and provided further that, except as and to the extent
that the Administrator may otherwise provide pursuant to Sections 2.5, 3.7 or
3.8, no option or stock appreciation right shall be exercisable prior to the
first anniversary of the date of grant. (See the default exercise period
provided for under Sections 2.3(a) and (b).)

 

(f)                                    Reload
Options.  The Administrator may, in its
sole discretion, include in any Award Agreement with respect to an option (the “original
option”) a provision that an additional option (the “reload option”) shall be
granted to any grantee who, pursuant to Section 2.3(e)(ii), 

 

 

delivers shares of
Common Stock in partial or full payment of the exercise price of the original
option.  The reload option shall be for a
number of shares of Common Stock equal to the number thus delivered, shall have
an exercise price equal to the Fair Market Value of a share of Common Stock on
the date of exercise of the original option, and shall have an expiration date
no later than the expiration date of the original option.  In the event that a Award Agreement provides
for the grant of a reload option, such Agreement shall also provide that the
exercise price of the original option be no less than the Fair Market Value of
a share of Common Stock on its date of grant, and that any shares that are
delivered pursuant to Section 2.3 (e) (ii) in payment of such
exercise price shall have been held for at least six months.

 

(g)                                 Dividend
Equivalent Rights.  The Administrator
may, in its sole discretion, include in any Award Agreement with respect to an
option, stock appreciation right or performance shares, a dividend equivalent
right entitling the grantee to receive amounts equal to the ordinary dividends
that would be paid, during the time such award is outstanding and unexercised,
on the shares of Common Stock covered by such award if such shares were then
outstanding.  In the event such a
provision is included in a Award Agreement, the Administrator shall determine
whether such payments shall be made in cash or in shares of Common Stock,
whether they shall be conditioned upon the exercise of the award to which they
relate, the time or times at which they shall be made, and such other vesting
and forfeiture provisions and other terms and conditions as the Administrator
shall deem appropriate.

 

(h)                                 Restricted Stock Units.  The Administrator may, in its sole
discretion, grant stock restricted stock units to such key persons, and in such
amounts and subject to such vesting and forfeiture provisions and other terms
and conditions, as the Administrator shall determine, in its sole discretion,
subject to the provisions of the Plan.  A
restricted stock unit granted under the Plan shall confer upon the grantee a
right to receive from the Company, upon the occurrence of an event specified in
the Award Agreement, such grantee’s vested restricted stock units multiplied by
the Fair Market Value of a share of Common Stock.  Restricted stock units may be granted in
connection with all or any part of, or independently of, any award granted
under the Plan.  A restricted stock unit
granted in connection with another award may be granted at or after the time of
grant of such award.

 

(i)                                     Incentive
Stock Option Limitation: Exercisability. 
To the extent that the aggregate Fair Market Value (determined as of the
time the option is granted) of the stock with respect to which incentive stock
options are first exercisable by any employee during any calendar year shall
exceed $100,000, or such higher amount as may be permitted from time to time
under section 422 of the Code, such options shall be treated as
non-qualified stock options.

 

(j)                                     Incentive
Stock Option Limitation: 10% Owners. 
Notwithstanding the provisions of paragraphs (d) and (e) of
this Section 2.2, an incentive stock option may not be granted under the
Plan to an individual who, at the time the option is granted, owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of his employer corporation or of its parent or subsidiary corporations
(as such ownership may be determined for purposes of section 422(b) (6) of
the Code) unless (i) at the time such incentive stock option is granted
the option exercise price is at least 110% of the Fair Market Value of the
shares subject thereto and (ii) the incentive stock option by its terms is
not exercisable after the expiration of 5 years from the date it is granted.

 

 

2.3.                            Exercise of Options, Stock
Appreciation Rights and Restricted Stock Units

 

Subject
to the other provisions of this Article II, each option, stock
appreciation right and restricted stock unit granted under the Plan shall be
exercisable as follows:

 

(a)                                  Timing
and Extent of Exercise.  Options, stock
appreciation rights and restricted stock units shall be exercisable at such
times and under such conditions as set forth in the corresponding Award
Agreement, but in no event shall any such award be exercisable prior to the
first anniversary or subsequent to the tenth anniversary of the date on which
such award was granted.  Unless the
applicable Award Agreement otherwise provides, an option, stock appreciation
right or restricted stock unit may be exercised from time to time as to all or
part of the shares or units as to which such award is then exercisable.  A stock appreciation right granted in
connection with an option may be exercised at any time when, and to the same
extent that, the related option may be exercised.

 

(b)                                 Notice
of Exercise.  An option, stock
appreciation right or restricted stock unit shall be exercised by the filing of
a written notice with the Company or the Company’s designated exchange agent
(the “exchange agent”), on such form and in such manner as the Administrator
shall in its sole discretion prescribe.

 

(c)                                  Payment
of Exercise Price.  Any written notice of
exercise of an option shall be accompanied by payment for the shares being
purchased.  Such payment shall be made: (i) by
certified or official bank check (or the equivalent thereof acceptable to the
Company or its exchange agent) for the full option exercise price; or (ii) with
the consent of the Administrator, by delivery of shares of Common Stock having
a Fair Market Value (determined as of the exercise date) equal to all or part
of the option exercise price and a certified or official bank check (or the
equivalent thereof acceptable to the Company or its exchange agent) for any
remaining portion of the full option exercise price; or (iii) at the
discretion of the Administrator and to the extent permitted by law, by such
other provision, consistent with the terms of the Plan, as the Administrator
may from time to time prescribe (whether directly or indirectly through the
exchange agent).

 

(d)                                 Delivery
of Certificates Upon Exercise.  Subject
to the provision of section 2.3(e), promptly after receiving payment of
the full option exercise price, or after receiving notice of the exercise of a
stock appreciation right for which payment will be made partly or entirely in
shares, the Company or its exchange agent shall, subject to the provisions of Section 3.2,
deliver to the grantee or to such other person as may then have the right to
exercise the award, a certificate or certificates for the shares of Common
Stock for which the award has been exercised. 
If the method of payment employed upon option exercise so requires, and
if applicable law permits, an optionee may direct the Company, or its exchange
agent as the case may be, to deliver the stock certificate(s) to the optionee’s
stockbroker.

 

(e)                                  Investment Purpose
and Legal Requirements.  Notwithstanding
the foregoing, at the time of the exercise of any option, the Company may, if
it shall deem it necessary or advisable for any reason, require the holder of such
option (i) to represent in writing to the Company that it is the optionee’s
then intention to acquire the Shares with respect to which the option is to be
exercised for investment and not with a view to the distribution thereof, or (ii) to
postpone the date of exercise until such time as the Company has available for
delivery to the optionee a prospectus meeting the requirements of all
applicable securities laws; and no shares 

 

 

shall be issued or
transferred upon the exercise of any option unless and until all legal requirements
applicable to the issuance or transfer of such Shares have been complied with
to the satisfaction of the Company.  The
Company shall have the right to condition any issuance of shares to any
optionee hereunder on such optionee’s undertaking in writing to comply with
such restrictions on the subsequent transfer of such shares as the Company
shall deem necessary or advisable as a result of any applicable law, regulation
or official interpretation thereof, and certificates representing such shares
may contain a legend to reflect any such restrictions.

 

(f)                                    No
Stockholder Rights.  No grantee of an
option, stock appreciation right or restricted stock unit (or other person
having the right to exercise such award) shall have any of the rights of a
stockholder of the Company with respect to shares subject to such award until
the issuance of a stock certificate to such person for such shares.  Except as otherwise provided in Section 1.5(b),
no adjustment shall be made for dividends, distributions or other rights
(whether ordinary or extraordinary, and whether in cash, securities or other
property) for which the record date is prior to the date such stock certificate
is issued.

 

2.4.                            Compensation in Lieu of
Exercise of an Option

 

Upon
written application of the grantee of an option, the Administrator may in its
sole discretion determine to substitute, for the exercise of such option,
compensation to the grantee not in excess of the difference between the option
exercise price and the Fair Market Value of the shares covered by such written
application on the date of such application. 
Such compensation may be in cash, in shares of Common Stock, or both,
and the payment thereof may be subject to conditions, all as the Administrator
shall determine in its sole discretion. 
In the event compensation is substituted pursuant to this Section 2.4
for the exercise, in whole or in part, of an option, the number of shares
subject to the option shall be reduced by the number of shares for which such
compensation is substituted.

 

2.5.                            Termination of Employment;
Death Subsequent to a Termination of Employment

 

(a)                                  General
Rule.  Except to the extent otherwise
provided in paragraphs (b), (c), (d) or (e) of this Section 2.5
or Section 3.8(b)(iii), a grantee who incurs a termination of employment
may exercise any outstanding option or stock appreciation right on the
following terms and conditions: (i) exercise may be made only to the
extent that the grantee was entitled to exercise the award on the termination
of employment date; and (ii) exercise must occur within three months after
termination of employment but in no event after the original expiration date of
the award.

 

(b)                                 Dismissal
for Cause; Resignation.  If a grantee
incurs a termination of employment as the result of a dismissal for cause or
resignation without the Company’s prior consent, as applicable, all options and
stock appreciation rights not theretofore exercised shall terminate upon the
grantee’s termination of employment.

 

(c)                                  Retirement.  If a grantee incurs a termination of
employment as the result of his retirement, then any outstanding option, stock
appreciation right or restricted stock unit shall be exercisable pursuant to
its terms.  For this purpose “retirement”
shall mean a grantee’s termination of employment, under circumstances other
than those described in paragraph (b) above, on or after: (x) his 65th
birthday, (y) the date on which he has attained age 60 and completed at least
five years of service with the Company, as applicable, (using any method of 

 

 

calculation the
Administrator deems appropriate) or (z) if approved by the Administrator, on or
after he has completed at least 20 years of service.

 

(d)                                 Disability.  If a grantee incurs a termination of
employment by reason of a disability (as defined below), then any outstanding
option, stock appreciation right or restricted stock unit shall be exercisable
pursuant to its terms.  For this purpose “disability”
shall mean, except in connection any physical or mental condition that would
qualify a grantee for a disability benefit under the long-term disability plan
maintained by the Company, if there is no such plan, a physical or mental
condition that prevents the grantee from performing the essential functions of
the grantee’s position (with or without reasonable accommodation) for a period
of six consecutive months.  The existence
of a disability shall be determined by the Administrator in its sole and
absolute discretion.

 

(e)                                  Death.

 

(i)                                     Termination
of Employment as a Result of Grantee’s Death. 
If a grantee incurs a termination of employment as the result of his
death, then any outstanding option, stock appreciation right or restricted
stock unit shall be exercisable pursuant to its terms.

 

(ii)                                  Restrictions
on Exercise Following Death.  Any such
exercise of an award following a grantee’s death shall be made only by the
grantee’s executor or administrator or other duly appointed representative
reasonably acceptable to the Administrator, unless the grantee’s will
specifically disposes of such award, in which case such exercise shall be made
only by the recipient of such specific disposition.  If a grantee’s personal representative or the
recipient of a specific disposition under the grantee’s will shall be entitled
to exercise any award pursuant to the preceding sentence, such representative
or recipient shall be bound by all the terms and conditions of the Plan and the
applicable Award Agreement which would have applied to the grantee including,
without limitation, the provisions of Sections 3.2 and 3.5 hereof.

 

(f)                                    Special
Rules for Incentive Stock Options. 
No option that remains exercisable for more than three months following
a grantee’s termination of employment for any reason other than death or
disability, or for more than one year following a grantee’s termination of
employment as the result of his becoming disabled, may be treated as an
incentive stock option.

 

(g)                                 Administrator
Discretion.  The Administrator, in the
applicable Award Agreement, may waive or modify the application of the
foregoing provisions of this Section 2.5.

 

2.6.                            Transferability of Options,
Stock Appreciation Rights and Restricted Stock Units

 

Except
as otherwise provided in an applicable Award Agreement evidencing an option,
stock appreciation right or restricted stock unit, during the lifetime of a
grantee, each such award granted to a grantee shall be exercisable only by the
grantee and no such award shall be assignable or transferable otherwise than by
will or by the laws of descent and distribution.  The Administrator may, in any applicable
Award Agreement evidencing an option (other than an incentive stock option to
the extent inconsistent with the requirements of section 422 of the Code
applicable to incentive stock options), permit a grantee to transfer all or
some of the options to (A) the grantee’s spouse, children or grandchildren
(“Immediate Family Members”), (B) a trust or trusts for the exclusive
benefit of such Immediate Family 

 

 

Members, or (C) other parties approved by the
Administrator in its sole and absolute discretion.  Following any such transfer, any transferred
options shall continue to be subject to the same terms and conditions as were
applicable immediately prior to the transfer.

 

2.7.                            Grant of Restricted Stock

 

(a)                                  Restricted
Stock Grants.  The Administrator may
grant restricted shares of Common Stock to such key persons, in such amounts,
and subject to such vesting and forfeiture provisions and other terms and
conditions as the Administrator shall determine in its sole discretion, subject
to the provisions of the Plan. 
Restricted stock awards may be made independently of or in connection
with any other award under the Plan.  A
grantee of a restricted stock award shall have no rights with respect to such
award unless such grantee accepts the award within such period as the
Administrator shall specify by accepting delivery of a restricted stock
agreement in such form as the Administrator shall determine and, in the event
the restricted shares are newly issued by the Company, makes payment to the
Company its exchange agent by certified or official bank check (or the
equivalent thereof acceptable to the Company) in an amount at least equal to
the par value of the shares covered by the award.

 

(b)                                 Issuance
of Stock Certificate(s).  Promptly after
a grantee accepts a restricted stock award, the Company or its exchange agent
shall issue to the grantee a stock certificate or stock certificates for the
shares of Common Stock covered by the award or shall establish an account
evidencing ownership of the stock in uncertificated form.  Upon the issuance of such stock
certificate(s), or establishment of such account, the grantee shall have the
rights of a stockholder with respect to the restricted stock, subject to: (i) the
nontransferability restrictions and forfeiture provision described in
paragraphs (d) and (e) of this Section 2.7; (ii) in the
Administrator’s discretion, to a requirement that any dividends paid on such
shares shall be held in escrow until all restrictions on such shares have
lapsed; and (iii) any other restrictions and conditions contained in the
applicable restricted stock agreement.

 

(c)                                  Custody
of Stock Certificate(s).  Unless the
Administrator shall otherwise determine, any stock certificates issued
evidencing shares of restricted stock shall remain in the possession of the
Company until such shares are free of any restrictions specified in the
applicable restricted stock agreement. 
The Administrator may direct that such stock certificate(s) bear a legend
setting forth the applicable restrictions on transferability.

 

(d)                                 Nontransferability.  Shares of restricted stock may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of except as
otherwise specifically provided in this Plan or the applicable restricted stock
agreement.  The Administrator at the time
of grant shall specify the date or dates (which may depend upon or be related
to the attainment of performance goals and other conditions) on which the
nontransferability of the restricted stock shall lapse.

 

(e)                                  Consequence
of Termination of Employment.  A grantee’s
termination of employment for any reason (including death) shall cause the
immediate forfeiture of all shares of restricted stock that have not yet vested
as of the date of such termination of employment.  All dividends paid on such shares also shall
be forfeited, whether by termination of any escrow arrangement under which such
dividends are held, by the grantee’s repayment of dividends he received
directly, or otherwise.

 

 

2.8.                            Grant of Unrestricted Stock

 

The
Administrator may grant (or sell at a purchase price at least equal to par
value) shares of Common Stock free of restrictions under the Plan, to such key
persons and in such amounts and subject to such forfeiture provisions as the
Administrator shall determine in its sole discretion.  Shares may be thus granted or sold in respect
of past services or other valid consideration.

 

2.9.                            Grant of Performance Shares

 

(a)                                  Performance
Share Grants.  The Administrator may
grant performance share awards to such key persons, and in such amounts and
subject to such vesting and forfeiture provisions and other terms and
conditions, as the Administrator shall in its sole discretion determine,
subject to the provisions of the Plan. 
Such an award shall entitle the grantee to acquire shares of Common
Stock, or to be paid the value thereof in cash, as the Administrator shall
determine, if specified performance goals are met.  Performance shares may be awarded
independently of, or in connection with, any other award under the Plan.  A grantee shall have no rights with respect
to a performance share award unless such grantee accepts the award by accepting
delivery of a Award Agreement at such time and in such form as the Administrator
shall determine.

 

(b)                                 Stockholder
Rights.  The grantee of a performance
share award will have the rights of a stockholder only as to shares for which a
stock certificate has been issued pursuant to the award and not with respect to
any other shares subject to the award.

 

(c)                                  Consequence
of Termination of Employment.  Except as
may otherwise be provided by the Administrator at any time prior to a grantee’s
termination of employment, the rights of a grantee of a performance share award
shall automatically terminate upon the grantee’s termination of employment by
the Company or its subsidiaries for any reason (including death).

 

(d)                                 Exercise
Procedures; Automatic Exercise.  At the
discretion of the Administrator, the applicable Award Agreement may set out the
procedures to be followed in exercising a performance share award or it may
provide that such exercise shall be made automatically after satisfaction of
the applicable performance goals.

 

(e)                                  Tandem
Grants; Effect on Exercise.  Except as
otherwise specified by the Administrator, (i) a performance share award
granted in tandem with an option may be exercised only while the option is
exercisable, (ii) the exercise of a performance share award granted in
tandem with any other award shall reduce the number of shares subject to such
other award in the manner specified in the applicable Award Agreement, and (iii) the
exercise of any award granted in tandem with a performance share award shall
reduce the number of shares subject to the latter in the manner specified in
the applicable Award Agreement.

 

(f)                                    Nontransferability.  Performance shares may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as otherwise
specifically provided in this Plan or the applicable Award Agreement.  The Administrator at the time of grant shall
specify the date or dates (which may depend upon or be related to the
attainment of performance goals and other conditions) on which the
nontransferability of the performance shares shall lapse.

 

 

ARTICLE III.

Miscellaneous

 

3.1.                            Amendment of the Plan;
Modification of Awards

 

(a)                                  Amendment
of the Plan.  The Board may from time to
time suspend, discontinue, revise or amend the Plan in any respect whatsoever,
except that no such amendment shall materially impair any rights or materially
increase any obligations under any award theretofore made under the Plan
without the consent of the grantee (or, upon the grantee’s death, the person
having the right to exercise the award). 
For purposes of this Section 3.1, any action of the Board or the
Administrator that in any way alters or affects the tax treatment of any award
shall not be considered to materially impair any rights of any grantee.

 

(b)                                 Stockholder
Approval Requirement.  Stockholder
approval shall be required with respect to any amendment to the Plan that (i) increases
the aggregate number of shares that may be issued pursuant to incentive stock
options or changes the class of employees eligible to receive such options; or (ii) materially
increases the benefits under the Plan to persons whose transactions in Common
Stock are subject to section 16(b) of the 1934 Act or increases the
benefits under the Plan to someone who is, materially increases the number of
shares which may be issued to such persons, or materially modifies the
eligibility requirements affecting such persons.

 

(c)                                  Modification
of Awards.  The Administrator may cancel
any award under the Plan.  The
Administrator also may amend any outstanding Award Agreement, including,
without limitation, by amendment which would: (i) accelerate the time or
times at which the award becomes unrestricted or may be exercised, provided
that, except as and to the extent that the Administrator may otherwise provide
pursuant to Section 2.5, 3.7 or 3.8, no option, stock appreciation right
or restricted stock unit shall be exercisable prior to the first anniversary of
its date of grant; (ii) waive or amend any goals, restrictions or
conditions set forth in the Agreement; or (iii) waive or amend the
operation of Section 2.5 with respect to the termination of the award upon
termination of employment.  However, any
such cancellation or amendment (other than an amendment pursuant to
Sections 3.7 or 3.8(b)) that materially impairs the rights or materially
increases the obligations of a grantee under an outstanding award shall be made
only with the consent of the grantee (or, upon the grantee’s death, the person
having the right to exercise the award).

 

3.2.                            Consent Requirement

 

(a)                                  No
Plan Action Without Required Consent.  If
the Administrator shall at any time determine that any Consent (as hereinafter
defined) is necessary or desirable as a condition of, or in connection with,
the granting of any award under the Plan, the issuance or purchase of shares or
other rights thereunder, or the taking of any other action thereunder (each
such action being hereinafter referred to as a “Plan Action”), then such Plan
Action shall not be taken, in whole or in part, unless and until such Consent
shall have been effected or obtained to the full satisfaction of the Administrator.

 

(b)                                 Consent
Defined.  The term “Consent” as used
herein with respect to any Plan Action means (i) any and all listings,
registrations or qualifications in respect thereof upon any securities exchange
or under any federal, state or local law, rule or regulation, (ii) any
and all written agreements and representations by the grantee with respect to
the disposition of shares, 

 

 

or with respect to
any other matter, which the Administrator shall deem necessary or desirable to
comply with the terms of any such listing, registration or qualification or to
obtain an exemption from the requirement that any such listing, qualification
or registration be made and (iii) any and all consents, clearances and
approvals in respect of a Plan Action by any governmental or other regulatory
bodies.

 

3.3.                            Nonassignability

 

Except
as provided in Sections 2.5(e), 2.6, 2.7(d) and 2.9(f): (a) no award or right granted
to any person under the Plan or under any Award Agreement shall be assignable
or transferable other than by will or by the laws of descent and distribution;
and (b) all rights granted under the Plan or any Award Agreement shall be
exercisable during the life of the grantee only by the grantee or the grantee’s
legal representative.

 

3.4.                            Requirement of Notification
of Election Under Section 83(b) of the Code

 

If any
grantee shall, in connection with the acquisition of shares of Common Stock
under the Plan, make the election permitted under section 83(b) of
the Code (i.e., an election to include in gross income in the year of transfer
the amounts specified in section 83(b)), such grantee shall notify the
Company of such election within 10 days of filing notice of the election with
the Internal Revenue Service, in addition to any filing and notification
required pursuant to regulations issued under the authority of Code section 83(b).

 

3.5.                            Requirement of Notification
Upon Disqualifying Disposition Under Section 421(b) of the Code

 

Each
Award Agreement with respect to an incentive stock option shall require the grantee
to notify the Company of any disposition of shares of Common Stock issued
pursuant to the exercise of such option under the circumstances described in section 421(b) of
the Code (relating to certain disqualifying dispositions), within 10 days of
such disposition.

 

3.6.                            Withholding Taxes

 

(a)                                  With
Respect to Cash Payments.  Whenever cash
is to be paid pursuant to an award under the Plan, the Company shall be
entitled to deduct therefrom an amount sufficient in its opinion to satisfy all
federal, state and other governmental tax withholding requirements related to
such payment.

 

(b)                                 With
Respect to Delivery of Common Stock. 
Whenever shares of Common Stock are to be delivered pursuant to an award
under the Plan, the Company shall be entitled to require as a condition of
delivery that the grantee remit to the Company an amount sufficient in the
opinion of the Company to satisfy all federal, state and other governmental tax
withholding requirements related thereto. 
With the approval of the Administrator, which the Administrator shall
have sole discretion whether or not to give, the grantee may satisfy the
foregoing condition by electing to have the Company withhold from delivery
shares having a value equal to the amount of tax to be withheld. Such shares shall
be valued at their Fair Market Value as of the date on which the amount of tax
to be withheld is determined. Fractional share amounts shall be settled in
cash.  Such a withholding election may be
made with respect to all or any portion of the shares to be delivered pursuant
to an award.

 

 

3.7.                            Adjustment Upon Changes in
Common Stock

 

(a)                                  Shares
Available for Grants.  In the event of
any change in the number of shares of Common Stock outstanding by reason of any
stock dividend or split, reverse stock split, recapitalization, merger,
consolidation, combination or exchange of shares or similar corporate change,
the maximum number of shares of Common Stock with respect to which the
Administrator may grant awards under Article II hereof, as described in Section 1.5(a),
and the individual annual limit described in Section 1.5(d), shall be
appropriately adjusted by the Administrator. 
In the event of any change in the number of shares of Common Stock
outstanding by reason of any other event or transaction, the Administrator may,
but need not, make such adjustments in the number and class of shares of Common
Stock with respect to which awards: (i) may be granted under Article II
hereof and (ii) granted to any one employee of the Company or a subsidiary
during any one calendar year, in each case as the Administrator may deem
appropriate.

 

(b)                                 Outstanding
Restricted Stock and Performance Shares. 
Unless the Administrator in its sole and absolute discretion otherwise
determines, any securities or other property (including dividends paid in cash)
received by a grantee with respect to a share of restricted stock, the issue
date with respect to which occurs prior to such event, but which has not vested
as of the date of such event, as a result of any dividend, stock split, reverse
stock split, recapitalization, merger, consolidation, combination, exchange of
shares or otherwise will not vest until such share of restricted stock vests,
and shall be promptly deposited with the Company or other custodian designated
pursuant to Section 2.7(c) hereof.

 

The
Administrator may, in its absolute discretion, adjust any grant of shares of
restricted stock, the issue date with respect to which has not occurred as of
the date of the occurrence of any of the following events, or any grant of
performance shares, to reflect any dividend, stock split, reverse stock split,
recapitalization, merger, consolidation, combination, exchange of shares or
similar corporate change as the Administrator may deem appropriate to prevent
the enlargement or dilution of rights of grantees.

 

(c)                                  Outstanding
Options, Stock Appreciation Rights and Dividend Equivalent Rights—Increase or
Decrease in Issued Shares Without Consideration.   Subject to any required action by the
stockholders of the Company, in the event of any increase or decrease in the
number of issued shares of Common Stock resulting from a subdivision or
consolidation of shares of Common Stock or the payment of a stock dividend (but
only on the shares of Common Stock), or any other increase or decrease in the
number of such shares effected without receipt of consideration by the Company,
the Administrator shall proportionally adjust the number of shares of Common
Stock subject to each outstanding option and stock appreciation right, and the
exercise price-per-share of Common Stock of each such option and stock
appreciation right and the number of any related dividend equivalent rights.

 

(d)                                 Outstanding
Options, Stock Appreciation Rights, Restricted Stock Units and Dividend
Equivalent Rights—Certain Mergers.  
Subject to any required action by the stockholders of the Company, in
the event that the Company shall be the surviving corporation in any merger or
consolidation (except a merger or consolidation as a result of which the
holders of shares of Common Stock receive securities of another corporation),
each option, stock appreciation right and dividend equivalent right outstanding
on the date of such merger or consolidation shall pertain to and apply to the
securities which a holder of the number of shares 

 

 

of Common Stock
subject to such option, stock appreciation right, restricted stock unit or
dividend equivalent right would have received in such merger or consolidation.

 

(e)                                  Outstanding
Options, Stock Appreciation Rights, Restricted Stock Units and Dividend
Equivalent Rights—Certain Other Transactions.  
In the event of (i) a dissolution or liquidation of the Company, (ii) a
sale of all or substantially all of the Company’s assets, (iii) a merger
or consolidation involving the Company in which the Company is not the
surviving corporation or (iv) a merger or consolidation involving the
Company in which the Company is the surviving corporation but the holders of
shares of Common Stock receive securities of another corporation and/or other
property, including cash, the Administrator shall, in its absolute discretion,
have the power to:

 

(i)                                     cancel,
effective immediately prior to the occurrence of such event, each option, stock
appreciation right and restricted stock unit (including each dividend equivalent
right related thereto) outstanding immediately prior to such event (whether or
not then exercisable), and, in full consideration of such cancellation, pay to
the grantee to whom such option or stock appreciation right was granted an
amount in cash, for each share of Common Stock subject to such option or stock
appreciation right, respectively, equal to the excess of (x) the value, as
determined by the Administrator in its absolute discretion, of the property
(including cash) received by the holder of a share of Common Stock as a result
of such event over (y) the exercise price of such option or stock appreciation
right; or

 

(ii)                                  provide
for the exchange of each option, stock appreciation right and restricted stock
unit (including any related dividend equivalent right) outstanding immediately
prior to such event (whether or not then exercisable) for an option on, stock
appreciation right, restricted stock unit and dividend equivalent right with
respect to, as appropriate, some or all of the property which a holder of the
number of shares of Common Stock subject to such option, stock appreciation
right or restricted stock unit would have received and, incident thereto, make
an equitable adjustment as determined by the Administrator in its absolute discretion
in the exercise price of the option, stock appreciation right or restricted
stock unit, or the number of shares or amount of property subject to the
option, stock appreciation right, restricted stock unit or dividend equivalent
right or, if appropriate, provide for a cash payment to the grantee to whom
such option, stock appreciation right or restricted stock unit was granted in
partial consideration for the exchange of the option, stock appreciation right
or restricted stock unit.

 

(f)                                    Outstanding
Options, Stock Appreciation Rights, Restricted Stock Units and Dividend
Equivalent Rights—Other Changes.   In the
event of any change in the capitalization of the Company or a corporate change
other than those specifically referred to in Sections 3.7(c), (d) or (e) hereof,
the Administrator may, in its absolute discretion, make such adjustments in the
number and class of shares subject to options, stock appreciation rights,
restricted stock units and dividend equivalent rights outstanding on the date
on which such change occurs and in the per-share exercise price of each such
option, stock appreciation right and restricted stock unit as the Administrator
may consider appropriate to prevent dilution or enlargement of rights.  In addition, if and to the extent the
Administrator determines it is appropriate, the Administrator may elect to
cancel each option, stock appreciation right and restricted stock unit
(including each dividend equivalent right related thereto) outstanding
immediately prior to such event (whether or not then exercisable), and, in full
consideration of such cancellation, pay to the grantee to 

 

 

whom such option,
stock appreciation right or restricted stock unit was granted an amount in
cash, for each share of Common Stock subject to such option, stock appreciation
right or restricted stock unit, respectively, equal to the excess of (i) the
Fair Market Value of Common Stock on the date of such cancellation over (ii) the
exercise price of such option, stock appreciation right or restricted stock
unit.

 

(g)                                 No
Other Rights.  Except as expressly
provided in the Plan, no grantee shall have any rights by reason of any
subdivision or consolidation of shares of stock of any class, the payment of
any dividend, any increase or decrease in the number of shares of stock of any
class or any dissolution, liquidation, merger or consolidation of the Company
or any other corporation.  Except as
expressly provided in the Plan, no issuance by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect
to, the number of shares of Common Stock subject to an award or the exercise
price of any option or stock appreciation right.

 

3.8.                            Change in Control

 

(a)                                  Change
in Control Defined.  For purposes of this
Section 3.8, “Change in Control” shall mean the occurrence of any of the
following:

 

(i)                                     any
person or “group” (within the meaning of Section 13(d)(3) of the 1934
Act), other than Oaktree Capital Management, LLC and its related entities or
Peter C. Georgiopoulos, acquiring “beneficial ownership” (as defined in Rule 13d-3
under the 1934 Act), directly or indirectly, of fifty percent (50%) or more of
the aggregate voting power of the capital stock ordinarily entitled to elect
directors of the Company;

 

(ii)                                  the
sale of all or substantially all of the Company’s assets in one or more related
transactions to a person other than such a sale to a subsidiary of the Company
which does not involve a change in the equity holdings of the Company or to an
entity which Oaktree Capital Management, LLC or Peter C. Georgiopoulos directly
or indirectly controls; or

 

(iii)                               any
merger, consolidation, reorganization or similar event of the Company or any of
its subsidiaries, as a result of which the holders of the voting stock of the
Company immediately prior to such merger, consolidation, reorganization or
similar event do not directly or indirectly hold at least fifty-one percent
(51%) of the aggregate voting power of the capital stock of the surviving
entity.

 

Notwithstanding
the foregoing, for each award subject to Section 409A of the Code, a
Change in Control shall be deemed to occur under this Plan with respect to such
Award only if a change in the ownership or effective control of the Company or
a change in the ownership of a substantial portion of the assets of the Company
shall also be deemed to have occurred under Section 409A of the Code.

 

(b)                                 Effect
of a Change in Control.   Unless the
Administrator provides otherwise in a Award Agreement, upon the occurrence of a
Change in Control:

 

(i)                                     notwithstanding
any other provision of this Plan, any award then outstanding shall become fully
vested and any award in the form of an option, stock appreciation right or
restricted stock unit shall be immediately exercisable;

 

 

(ii)                                  to
the extent permitted by law, the Administrator may, in its sole discretion,
amend any Award Agreement in such manner as it deems appropriate;

 

(iii)                               a
grantee who incurs a termination of employment for any reason, other than a
dismissal for cause, concurrent with or within one year following the Change in
Control may exercise any outstanding option, stock appreciation right or
restricted stock unit, but only to the extent that the grantee was entitled to
exercise the award on his termination of employment date, until the earlier of (A) the
original expiration date of the award and (B) the later of (x) the date
provided for under the terms of Section 2.5 without reference to this Section 3.8(b)(iii) and
(y) the first anniversary of the grantee’s termination of employment.

 

(c)                                  Miscellaneous.  Whenever deemed appropriate by the
Administrator, any action referred to in paragraph (b)(ii) of this Section 3.8
may be made conditional upon the consummation of the applicable Change in
Control transaction.

 

3.9.                            Right of Discharge Reserved

 

Nothing
in the Plan or in any Award Agreement shall confer upon any grantee the right
to continue his employment with the Company or affect any right that the
Company may have to terminate such employment.

 

3.10.                      Non-Uniform Determinations

 

The
Administrator’s determinations under the Plan need not be uniform and may be
made by it selectively among persons who receive, or who are eligible to
receive, awards under the Plan (whether or not such persons are similarly
situated).  Without limiting the
generality of the foregoing, the Administrator shall be entitled, among other
things, to make non-uniform and selective determinations, and to enter into
non-uniform and selective Award Agreements, as to (a) the persons to
receive awards under the Plan, and (b) the terms and provisions of awards
under the Plan.

 

3.11.                      Other Payments or Awards

 

Nothing
contained in the Plan shall be deemed in any way to limit or restrict the Company
from making any award or payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in effect.

 

3.12.                      Headings

 

Any
section, subsection, paragraph or other subdivision headings contained herein
are for the purpose of convenience only and are not intended to expand, limit
or otherwise define the contents of such subdivisions.

 

3.13.                      Effective Date and Term of Plan

 

(a)                                  Adoption;
Stockholder Approval.  The Plan was
adopted by the Board and although the Company intends to obtain approval of the
Plan by the Company’s stockholders within the time period required to allow
grants of options hereunder to qualify as incentive 

 

 

stock options,
awards under the Plan prior to such stockholder approval may, but need not, be
made subject to such approval.

 

(b)                                 Termination
of Plan.  Unless sooner terminated by the
Board or pursuant to Paragraph (a) above, the provisions of the Plan
respecting the grant of incentive stock options shall terminate on the tenth
anniversary of the adoption of the Plan by the Board, and no incentive stock
option awards shall thereafter be made under the Plan.  All such awards made under the Plan prior to
its termination shall remain in effect until such awards have been satisfied or
terminated in accordance with the terms and provisions of the Plan and the
applicable Award Agreements.

 

3.14.                      Restriction on Issuance of Stock
Pursuant to Awards

 

The
Company shall not permit any shares of Common Stock to be issued pursuant to
Awards granted under the Plan unless such shares of Common Stock are fully paid
and non-assessable under applicable law.

 

3.15.                      Governing Law

 

Except
to the extent preempted by any applicable federal law, the Plan will be
construed and administered in accordance with the laws of the State of New
York, without giving effect to principles of conflict of laws.

 

3.16.                        Compliance with Section 409A
of the Code

 

Notwithstanding anything to the contrary contained in
the Plan or in any Agreement, to the extent that the Committee determines that
the Plan or any Award is subject to Section 409A of the Code and fails to
comply with the requirements of Section 409A of the Code, the Committee
reserves the right to amend or terminate the Plan and/or amend, restructure,
terminate or replace the Award in order to cause the Award to either not be
subject to Section 409A of the Code or to comply with the applicable
provisions of such section.

 

EXHIBIT A

 

GENCO SHIPPING & TRADING LIMITED

2005 EQUITY INCENTIVE PLAN

 

FORM OF OPTION AGREEMENT

 

THIS OPTION AGREEMENT
made this [    ] day of                         ,
2005, between Genco Shipping & Trading Limited, (the “Company”) and [                        ]
(the “Optionee”).

 

WHEREAS, the Company
desires to carry out the purpose of the Genco Shipping & Trading
Limited 2005 Equity Incentive Plan (the “Plan”), a copy of which is attached
hereto as Exhibit A, by affording the Optionee an opportunity to purchase
its common stock;

 

WHEREAS, any terms
defined in the Plan shall have the same meaning in this Agreement;

 

NOW THEREFORE, under the
Plan and in consideration of the mutual covenants hereinafter set forth, the
parties hereto agree as follows:

 

1.                           Grant
of Option – The Company hereby grants to the Optionee the right and option
(the “Option”) to purchase [          ]
shares of common stock of the Company, par value $          
per share (the “Shares”) on the terms and conditions set forth under the Plan
and this Agreement.  The Options issued
pursuant to this Agreement shall constitute nonqualified stock options.

 

2.                           Option
Price – Subject to Section 5 below, the purchase price of the Shares
covered by the Option shall be $    .    
per Share (equaling the offer price per Share in the Company’s follow-on
offering) which shall be paid in full at the time of exercise.  The Option Price is the purchase price per
Share times the number of Options to be exercised.  The Option Price may be adjusted by the
Administrator as provided in Section 3.7 of the Plan.

 

3.                           Method
of Exercise – Subject to the terms and conditions of the Plan and this
Agreement, the vested Options may be exercised upon notice to the Company on
the form provided by the Administrator and delivery of the Option Price
attributable to the optioned Shares to be purchased. 

 

4.                           Time
and Method of Payment - The Option Price for the optioned Shares to be
purchase shall be paid in full at the time an Option is exercised.  The Option Price may be paid in a combination
of cash and Shares having a Market Price equal to the balance of the Option
Price.  A valid exercise requires that
the Optionee deliver the form of exercise and full payment for the optioned
Shares to be purchased to the Company.

 

5.                           Dividend
Equivalents – For any full calendar year following the date of grant in
which the dividends per share distributed to Company shareholders exceeds three
percent (3%) of the Option Price as of the grant date, the Option Price shall
be reduced by the amount of the dividends the Optionee would have received with
respect to the optioned Shares had the Optionee been a shareholder of record on
the record date with respect to such dividend distribution.

 

 

6.                           Vesting
and Term of Option – The Options shall vest with respect to 25% of the
Options on                   ,
[    ] and each of the three anniversaries
thereafter, conditioned upon the Optionee’s continued service as an employee of
the Company or an affiliate (an “Employee”) or as a director of the Company
from the date of this Agreement until the date such Options vest.  In the event the Optionee’s ceases to be a
member of the Board or an Employee, as applicable, for any reason, the Optionee
shall forfeit all rights to the non-vested Options.  Except as otherwise permitted by the
Administrator, this Option shall not be exercisable to any extent prior to               ,
[   ] or after               ,
[   ].

 

7.                           Exercise
- During the term of the Option, a vested Option may be exercised in one or
more exercises in part or in whole at any time. 
The Administrator, as provided in Section 3.1(c) of the Plan,
may accelerate the exercisability of the Option at such time and under such
circumstances as the Administrator, in its sole discretion, deems appropriate.

 

8.                           Termination
of Employment or Board Membership – Upon the Optionee’s termination of
service as an Employee or as a member of the Board for any reason, any Options
not vested shall be forfeited.  Except as
provided in the case of the Optionee’s termination of employment by reason of
the Optionee’s death, Disability or Retirement, each Option granted hereunder
shall expire, to the extent vested and not theretofore exercised, upon the
earlier of the date the Optionee ceases to be an Employee or a member of the
Board, or when the Option would otherwise expire.

 

9.                           Death,
Disability or Retirement of Optionee - If an Optionee shall die or become
Disabled while an Employee or member of the Board, or Retire, all vested
Options theretofore granted to such Optionee may be exercised pursuant to their
terms.  In the event of death or
incapacity an Option shall be exercised by a legal representative of an
Optionee, written notice of such exercise shall be accompanied by a certified
copy of letters testamentary or equivalent proof of the right of such legal
representative to exercise such Option.

 

10.                     Taxes
- If the Administrator shall so require, as a condition of exercise of an
Option, the Optionee shall agree that no later than the date of exercise, the
Optionee will pay to the Company or make arrangements satisfactory to the
Administrator regarding payment of any federal, state or local taxes of any
kind required by law to be withheld in connection with the exercise of an
Option.

 

11.                     Nontransferability
– The Option is nontransferable other than by will or by the laws of descent
and distribution.

 

12.                     Legal
Requirements – At the time of the exercise of any Option, the Company or
the Administrator may postpone the date of exercise until such time as the
Company has available for delivery to the Optionee a prospectus meeting the
requirements of all applicable securities laws, and no Shares shall be issued
or transferred upon the exercise of any Option unless and until all legal
requirements applicable to the issuance or transfer of Shares have been
complied with to the satisfaction of the Company.

 

13.                     Representation
of Optionee – Prior to the issuance of any Shares pursuant to the exercise
of Options hereunder, at the request of the Administrator, the Optionee shall
represent in writing to the Company that it is the Optionee’s intention to
acquire the Shares with respect 

 

 

to which the
Option is to be exercised for investment and not with a view to the
distribution thereof.

 

14.                     Changes in
Capital Structure – As determined by the Administrator within the
discretion granted under Section 7 of the Plan, if any change described in
Section 7 of the Plan is made to the Shares, an appropriate adjustment in
the number of Shares for which Options which have been or may be granted under
the Plan and the Option Price will be made.

 

15.                     Rights as
a Shareholder - An Optionee shall have no rights as a shareholder with
respect to any Shares covered by the Option until the date of the issuance of a
stock certificate for such Shares.  No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions of other rights for which
the record date is prior to the date such stock certificate is issued, except
as provided in Section 5 above and Section 7 of the Plan.

 

16.                     Amendment
and Termination of the Plan - The Board at any time and from time to time
may suspend, terminate, modify or amend the Plan; provided, however, except as
provided in Section 7 of the Plan, no suspension, termination,
modification or amendment of the Plan may, without the express written consent
of the Optionee involved, adversely affect any Option previously granted to the
Optionee.

 

17.                     Governing
Law - The Plan and this Agreement are governed by the internal substantive
laws but not the choice of law rules of New York.

 

IN WITNESS WHEREOF, THE
PARTIES HERETO HAVE EXECUTED THIS OPTION AGREEMENT ON THE DATE FIRST WRITTEN
ABOVE.

 

	
   

  	
  GENCO
  SHIPPING & TRADING LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Peter C.
  Georgiopoulos

  
	
   

  	
   

  	
  Title: DirectorQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.9    
    

www.ikanos.com

	Ikanos Communications      47669 Fremont Blvd.      Fremont, CA 94538      +1.510.979.0400
phone      +1.510.979.0500 fax

  

February
17, 2005 

Mr.
Christopher Smith 

Dear
Chris: 

        I
am pleased to offer you a position with Ikanos Communications, Inc. (the "Company") as Vice President of Human Resources, reporting to me, commencing sometime during the week of
February 28, 2005. You will receive an annual salary of $170,000.00, which will be paid semi-monthly in accordance with the Company's normal payroll procedures and a bonus of up to 15% per year
based
on individual and company goals attainment. As a Company employee, you are also eligible to receive certain employee benefits including health benefits. You should note that the Company might modify
salaries and benefits from time to time, as it deems necessary. This offer will expire on February 21, 2005. 

        We
will recommend to the Board of Directors of the Company that, at the next Board meeting, you be granted an incentive stock option entitling you to purchase up to 1,200,000 shares of
Common Stock of the Company at the then current fair market value as determined by the Board at that meeting. Such options shall be subject to the terms and conditions of the Company's Stock Option
Plan and Stock Option Agreement, including vesting requirements. (25% of the shares vest 12 months after the vesting commencement date, and 1/48 of the shares vest each month thereafter.) In addition,
should a change in control occur (such as an acquisition) that substantially impacts your employment during the first twelve months of your employment with Ikanos, vesting would be accelerated for 25%
of the stock options issued to you upon hire. 

        You
should be aware that your employment with the Company is for no specified period and constitutes at will employment. As a result, you are free to resign at any time, for any reason
or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time, with or without cause, and with or without notice. 

        For
purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such
documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated. 

        You
agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to
the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the
Company. 

        As
a Company employee, you will be expected to abide by company rules and regulations. You will be specifically required to sign an acknowledgment that you have read and understand the
company rules of conduct, which will be included in a handbook, which the company will soon complete and distribute. You will be expected to sign and comply with an Employment, Confidential
Information, Invention Assignment and Arbitration Agreement which requires, among other provisions, the assignment of patent rights to any invention made during your employment at the Company and non-
disclosure of proprietary information. 

        To
indicate your acceptance of the Company's offer, please sign and date this letter in the space provided below and return it to me. A duplicate original is enclosed for your records.
This letter, along with the agreement relating to proprietary rights between you and the Company, set forth the terms of your employment with the Company and supersede any prior representations or
agreements, whether written or oral. This letter may not be modified or amended except by a written agreement, signed by an officer of the Company and by you. 

        We
look forward to working with you at Ikanos Communications. 

Sincerely,

	

 	
 	

 
	/s/  RAJESH VASHIST      
 Rajesh Vashist

Chairman and CEO	 	 
	

 	
 	

 
	ACCEPTED AND AGREED TO this

22nd day of February, 2005	 	 
	

 	
 	

 
	/s/  CHRISTOPHER SMITH      
 Christopher Smith	 	 
	 	 	 

	Enclosures:	1.	Duplicate Original Letter
	 	2.	Employment, Confidential Information, Invention Assignment and Arbitration Agreement

QuickLinks

Exhibit 10.9

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