Document:

exv10w27

Exhibit 10.27

JPMorgan Chase & Co.

PERFORMANCE-BASED INCENTIVE COMPENSATION PLAN

Effective as of January 1, 2006, as amended

SECTION 1

PREAMBLE

     The purpose of the Performance-Based Incentive Compensation Plan (“Plan”) is to provide a
program that aligns annual performance-based incentive compensation awards levels to the
performance of Eligible Employees during such period, taking into account the performance of
JPMorgan Chase & Co., the Participating Company, the Business Unit employing the Eligible Employee
and the Eligible Employee. It is designed to attract, motivate and retain those individuals
employed by JPMorgan Chase & Co. and its Subsidiaries with an opportunity to receive
performance-based incentive compensation described in the Plan. In order to realize these
objectives, Stock-Based Awards are intended to further motivate the individual to remain in the
employ of the Participating Company for future years.

     Nothing in this Plan shall be construed to alter the at-will employment relationship between
the Employees and any Participating Company. The provisions of this Plan reflect the policies of
the Participating Companies in providing performance-based incentive compensation years prior to
the effective date.

     Further, this Plan is intended to be a performance-based compensation plan within the meaning
of Section 409A of the Internal Revenue Code and Treasury regulations promulgated thereunder. By
way of further clarification, Section 4.3 off the Plan is intended to satisfy the final Treasury
regulations dealing with subjective performance criteria.

SECTION 2

DEFINITIONS

     The following terms shall have the meaning set forth below, unless a different meaning is
plainly required by the context.

(a) “Award” shall mean an amount of performance-based incentive compensation determined under the
Plan, which may be paid in the form of cash, restricted stock units, options, stock appreciation
rights or such other form of compensation as JPMorgan Chase may specify.

(b) “Award Agreement” shall mean a document provided to a recipient of an Award that evidences the
grant of a Stock-Based Award or another form of compensation awarded under the Plan and specifies
the terms and conditions of such award.

(c) “Business Unit” shall mean a division, department or a function of a Participating Company.

 

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(d) “Effective Date” shall mean January 1, 2006. This Plan shall be effective for the 2006
Performance Year and thereafter.

(e) “Eligible Employee” shall mean an Employee described in Section 5.3.

(f) “Employee” shall mean any person employed by a Participating Company, whether or not an
Eligible Employee. An individual is not an Employee for purposes of this Plan if (i) his/her
compensation is paid solely in the form of a commission or fee under contract, (ii) he/she is
classified by the Participating Company as an independent contractor or agent, (iii) he/she is
classified by the Participating Company as an employee of an independent contractor or agent, or
(iv) he/she is classified by the Participating Company as any status other than that of a common
law employee of the Participating Company, regardless of whether such individual (whether or not
described in (i), (ii) or (iii) above) is subsequently determined to be a common law employee of a
Participating Company as the result of administrative agency or judicial proceeding.

(g) “JPMorgan Chase” shall mean JPMorgan Chase & Co. or any successor thereto.

(h) “Participating Companies” or “Company” shall mean JPMorgan Chase and/or any Subsidiary which,
with the consent of the JPMorgan Chase, participates in the Plan.

(i) “Payment Date” shall have the meaning ascribed to it in Section 5.2(a).

(j) “Performance Year” shall mean the calendar year unless JPMorgan Chase designates a different
period.

(k) “Plan” shall mean this JPMorgan Chase & Co. Performance-Based Incentive Compensation Plan.
Participating Companies and Business Units may refer to the Plan with reference to their internal
business names, such as the Investment Bank Incentive Compensation Plan.

(l) “Stock-Based Awards” shall have the meaning set forth in the JPMorgan Chase & Co. 2005 Long
Term Incentive Plan or successor plan.

(m) “Subsidiary” shall mean any corporate entity in which JPMorgan Chase owns directly or
indirectly eighty percent or more of the outstanding stock.

(n) “162(m) Plan” shall mean the Key Executive Performance Plan of JPMorgan Chase & Co., a
performance-based plan adopted to satisfy the requirements of Section 162(m) of the Code.

SECTION 3

ADMINISTRATION

     The Plan shall be administered by JPMorgan Chase which shall have the authority to

	 	•	 	determine whether performance-based incentive compensation funding shall be
established for any particular Performance Year;
	 
	 	•	 	select Eligible Employees who may be granted Awards;
	 
	 	•	 	determine

 

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	 	o	 	individual performance criteria applicable to an
Eligible Employee;
	 
	 	o	 	whether the individual performance criteria have been
satisfied;

	 	•	 	determine the terms and conditions of Awards and the Award Agreement,
including the amount of any Award;
	 
	 	•	 	interpret the provisions of the Plan and the Award Agreements;
	 
	 	•	 	establish, amend, and rescind any rules and regulations relating to the Plan;
and
	 
	 	•	 	make all other determinations necessary or advisable for the administration of
the Plan.

JPMorgan Chase may also correct any defect, supply any omission, and reconcile any inconsistency
in the Plan or in any Award, or between the Plan and any Award Agreement, in the manner and to the
extent it shall deem desirable to effectuate the purposes of the Plan. JPMorgan Chase may
delegate its authority and responsibilities under the Plan to any person or persons or committee
in its discretion, including Business Units or Participating Companies. The determinations and
actions of the JPMorgan Chase or its delegate in the administration of the Plan shall be final,
conclusive and binding on all parties.

SECTION 4

PERFORMANCE-BASED COMPENSATION ORGANIZATIONAL AND

INDIVIDUAL CRITERIA; FUNDING; PARTICIPATION

	4.1	 	Establishment of Incentive Funding. The funding of the annual performance-based
incentive compensation under this Plan is discretionary, subject to the determination of the
Compensation and Management Development Committee of the Board of Directors of JPMorgan Chase (or
any successor committee); provided that the funding for any Eligible Employee covered by the
162(m) plan shall be based on that Plan. A Business Unit or Participating Company is not
required to make individual Awards equal to the incentive funding available for a particular year.

	4.2	 	Participation in the Plan. JPMorgan Chase or (if so delegated, the Business
Unit or Participating Company) may designate an Employee as eligible for an Award (“Eligible
Employee”). Such Eligible Employee may receive an Award; provided that

	 	•	 	funding is established for a Performance Year pursuant to Section 4.1,

	 	•	 	the performance of the Eligible Employee satisfies applicable criteria set forth in
Section 4.3 for the Performance Year, as determined by JPMorgan Chase or its delegate.

Notwithstanding the above, an Award is only made to the Eligible Employee under this Plan if
he/she is employed on the Payment Date specified by the JPMorgan Chase.

 

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The amount and the form of any Award shall be determined in the sole and absolute discretion of
JPMorgan Chase, including the requirement for the execution by such Eligible Employee of such
agreements as JPMorgan Chase shall specify. No individual Awards under this Plan are guaranteed
at any time during the Performance Year; provided that in the case of new hire and retention
agreements, an Award specified therein may guaranteed as to amount but all other terms and
conditions of this Plan shall apply.

     4.3 Individual Performance Criteria. In determining whether an Award shall be made
to an Eligible Employee, JPMorgan Chase (or if so delegated, each Business Unit or Participating
Company) shall measure the performance of an Eligible Employee based its assessment of the
contributions made to the employing Business Unit during the Performance Year using the subjective
performance criteria so determined:

	 	•	 	Profitability — Success in

	 	o	 	Financial performance as compared to budget, prior year or
competitors, including expense controls, net income and other financial
measures.
	 
	 	o	 	Improving the quality of earnings.
	 
	 	o	 	Achieving expense reduction goals.
	 
	 	o	 	Maintaining capital and leverage ratios in accordance with
targeted levels.

	 	•	 	Investing for Growth— Success in

	 	o	 	Executing investment plans.
	 
	 	o	 	Achieving real revenue growth by market share gains and
performance as compared to competitors.
	 
	 	o	 	Deepening relations with customers.
	 
	 	o	 	Leveraging the JPMorgan Chase product platform.

	 	•	 	Executing Major Projects—Success in

	 	o	 	Reaching mission critical project milestones with respect to,
and in completing, major corporate and Business Unit projects.
	 
	 	o	 	Mitigating operational risks associated with such projects.
	 
	 	o	 	Insuring that clients (internal and external) consider the
completion of the project as a success.

	 	•	 	Managing People and Developing Talent—Success in

	 	o	 	Increasing diversity representation.
	 
	 	o	 	Recruiting, developing and training top talent.

 

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	 	o	 	Developing a strong leadership culture.

	 	•	 	Operating with Integrity/Protecting the Franchise—Success in

	 	o	 	Living up to JPMorgan Chase’s Operating Principles, as well as
compliance with the Code of Conduct.
	 
	 	o	 	Maintaining good standing with regulators and sustaining a
company wide culture of compliance with law and ethical standards.
	 
	 	o	 	Avoiding reputational and litigation issues.
	 
	 	o	 	Maintaining a strong control environment.
	 
	 	o	 	Managing risk.

	 	•	 	Other criteria

	 	o	 	Generation of revenue from efforts of an Employee, including
that derived from management of a team.
	 
	 	o	 	Performance of complex work assignments without supervision and
level of skill shown in such performance.
	 
	 	o	 	Adherence to the work ethic of the Business Unit.
	 
	 	o	 	Performance reviews exceeding expectations.
	 
	 	o	 	Such other subjective performance-based criteria as JPMorgan
Chase may deem appropriate for the particular job function, so long as
determined within 90 days after the start of the Performance Year.

In evaluating the performance contribution of an Eligible Employee, those criteria that are not
applicable to the job function or role of the Employee shall be disregarded and such determination
shall be that solely of JPMorgan Chase. The determination of the applicable criteria and whether
the Eligible Employee has satisfied such performance-based criteria sufficiently to be entitled to
an Award shall also be in the sole discretion of the JPMorgan Chase (or if so delegated, the
management of the Business Unit or the Participating Company). Such evaluations shall occur as
of the end of the Performance Year. By way of further clarification, the determination that any
subjective performance criteria have been met shall not made by the Eligible Employee or a family
member of the Eligible Employee as defined in the final regulations promulgated under Section
409A.

SECTION 5

AWARDS

     5.1 Determination of Awards. As soon as reasonably practical following the end of the
applicable Performance Year, and
after having determined the contribution of, and

 

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performance made
by, an Eligible Employee, JPMorgan Chase (or if so delegated, the Business Unit or Participating
Company) shall determine the amount of each individual Award.

     5.2 Payment of Awards. (a) JPMorgan Chase shall specify a payment/distribution date
of the Awards (“Payment Date”) in the calendar year following the end of the Performance Year
(“Payment Date”); provided that no Award shall be made to an Eligible Employee unless employed on
the Payment Date. Accordingly, an Eligible Employee has no interest in an Award until paid.

     (b) Each individual Award shall specify the amount or percentage of the performance-based
incentive compensation that shall be distributed in the form of cash, Stock-Based Awards or such
other form as may be designated by JPMorgan Chase. Notwithstanding the foregoing, if the Award
Agreement of a Participant who is not a United States citizen and who works outside of the United
States so provides, a Participating Company may deliver property or make contributions to a trust
in lieu of providing incentive compensation hereunder.

     (c) If JPMorgan Chase so advises an Eligible Employee, the cash portion of any
performance-based incentive compensation may be deferred pursuant to the terms of the 2005 Deferred
Compensation Program of JP Morgan Chase & Co. and Participating Companies, or any successor plan or
any applicable deferral program available to Eligible Employees who are based in locations outside
the United States.

     (d) The portion of any performance-based incentive compensation payable as a Stock-Based Award
shall be granted pursuant to the terms of an approved equity compensation plan or arrangement as
determined by JPMorgan Chase in its sole discretion. Unless changed by JPMorgan Chase in writing
on or before June 30th of each performance year hereunder, to the extent any Stock-Based
Award represents deferred compensation within the meaning of Section 409A of the Code, fifty
percent of such Award shall vest during the second calendar year immediately following the date of
grant of the Award and the remaining fifty percent of such Award shall vest during the third
calendar year immediately following the date of grant and, in each case, each vested portion of the
Award shall be distributable not later than the end of the end of the calendar year in which it
vests.

     (e) It is expressly intended that the Awards whether or not vested or immediately payable are
designed to promote continued employment and future services from an Eligible Employee, as well as
reward for performance.

     (g) All Awards will be reflected in Award Agreements signed by an authorized officer of
JPMorgan Chase. No employee or officer of JPMorgan Chase is authorized to make oral promises or
representations about Awards under this Plan.

TAXES AND OTHER WITHHOLDING

     Participating Companies shall have the right to (i) deduct from all amounts payable to any
recipient of an Award (whether amounts are payable in cash), and each recipient shall make
appropriate arrangements to pay the withholding amounts related to any taxes or other amounts
required by law to be withheld, and (ii) offset any amounts otherwise payable hereunder by any
amount the recipient owes a Participating Company, to the full extent permitted by law.

 

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SECTION 7

NON-TRANSFERABILITY

     No rights hereunder or Awards shall be assignable or transferable except as specified, and no
right or interest in any Award shall be subject to any lien, obligation or liability of the
Eligible Employee.

SECTION 8

NO RIGHT TO EMPLOYMENT/CONTINUED PLAN PARTICIPATION

     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 the Employee recipient the right to be retained in the employ of a
Participating Company. In addition, no Award under the Plan made during or in respect of any
Performance Year or other period shall confer on an Employee any right or entitlement to, nor shall
any Award impose any obligation on a Participating Company to provide, the same or any similar
Award in the future, and all Plan awards are made wholly at the sole and unrestricted discretion of
JPMorgan Chase. Further, each Participating Company expressly reserves the right at any time to
terminate an Employee or Eligible Employee employed by it or free from any liability or any claim
under the Plan, except as provided herein or in any Award granted hereunder.

SECTION 9

AMENDMENT AND TERMINATION

     JPMorgan Chase may amend or terminate the Plan or any portion hereof at any time and in any
manner; provided that the subjective individual performance criteria set forth in Section 4.4 can
only be amended prior to the expiration of the Performance Year to which such criteria pertain.

SECTION 10

STATUS OF PLAN

     The Plan is intended to constitute an “unfunded” bonus plan. With respect to any payments not
yet made to a recipient of an Award by a Participating Company, nothing herein contained shall
provide any such individual with any rights that are greater than those of a general, unsecured
creditor of the Participating Company. No such individual shall at any time possess any interest
whatsoever in the assets of the Participating Company. No payments under this Plan shall be taken
into account as salary or other relevant compensation in determining an Employee’s benefits under
any compensation, pension or welfare plan (unless the plan specifically permits the inclusion of
such Award), program or arrangement maintained by the Participating Company. In
addition, the terms of this document and any particular Award document granted to an Employee shall
exclusively embody the complete terms of the Plan as
applied to such an individual and shall supersede any other documents or representations that
in any way relate to any Award.

 

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SECTION 11

WAIVER

     No failure on the part of the Participating Company to exercise, and no delay in exercising,
any right or power under the Plan shall operate as a waiver of any such right or power; nor shall
any single or partial exercise preclude any other or further exercise of a right or power or the
exercise of any other right or power.

SECTION 12

SEVERABILITY

     Each provision of the Plan will be interpreted in such manner as to be valid and effective but
if any provision shall be ruled invalid or unenforceable in any jurisdiction by any court of
competent jurisdiction, the invalidity or unenforceability of such provision in such jurisdiction
shall not affect any of the remaining provisions of the Plan and the invalid term shall be deemed
to be replaced in such jurisdiction by a valid term which most closely reflects the intent of the
Plan.

SECTION 13

ASSIGNMENT

     If JPMorgan Chase shall be merged into or consolidated with another entity, this Plan shall be
binding upon the entity surviving such merger or resulting from such consolidation. JPMorgan Chase
shall require any successor to all or substantially all of JPMorgan Chase’s equity or assets
(whether by direct or indirect purchase, merger, consolidation or otherwise) to, either expressly
or by operation of law, assume and agree to perform under this Plan as if no such succession had
taken place, and all references to the “JPMorgan Chase” herein shall become references to such
successor.

SECTION 14

GOVERNING LAW

     The validity, construction and effect of the Awards, the Plan and any rules and regulations
relating to the Plan shall be determined in accordance with the laws of the State of New York,
without regard to conflicts of laws principles.

SECTION 15

EFFECTIVE DATE

     The Plan shall be effective as of the Effective Date and shall continue until terminated by
the JPMorgan Chase.exv4w1

Exhibit 4.1

DESCRIPTION OF GULFMARK COMMON STOCK

We have summarized certain provisions of our certificate of incorporation and bylaws below, but you
should read them for a more complete description of the rights of holders of shares of our common
stock.

General

Our certificate of incorporation authorizes us to issue up to 60 million shares of Class A common
stock, par value $0.01 per share, and up to 60 million shares of Class B common stock, par value
$0.01 per share. As of February 24, 2010, 25,905,711 shares of our Class A common stock
were issued and outstanding (including treasury shares)
and no shares
of Class B common stock or preferred stock have been issued. The shares of our Class A common
stock are subject to the Maritime Restrictions as described under “—Maritime Restrictions” below.

Subject to the limitations in our certificate of incorporation or applicable law, the shares of our
Class A common stock have, and if issued, the shares of our Class B common stock will have, all
rights ordinarily associated with shares of common stock under Delaware law, including, but not
limited to, general voting rights and general rights to dividends and distributions and, except for
the Maritime Restrictions and conversion provisions, which are only applicable to the shares of our
Class A common stock, the rights of the shares of our Class A common stock and our Class B common
stock are identical.

The shares of our Class B common stock are not subject to the Maritime Restrictions. Shares of our
Class B common stock were not issued in the Reorganization. Initially, the shares of our Class B
common stock are only issuable upon the conversion of all of the outstanding and treasury shares of
our Class A common stock into shares of our Class B common stock in the event our Board of
Directors determines that either:

	 	•	 	the U.S. ownership requirements of the applicable U.S. maritime and vessel
documentation laws are no longer applicable to us (or have been amended so that the
Maritime Restrictions are no longer necessary); or
	 
	 	•	 	the elimination of such restrictions is in our best interest and the best interest of
our stockholders. Thereafter, the converted shares of our Class A common stock will be
canceled, will no longer be outstanding and cannot be reissued.

Voting and Dividend Rights

Each record holder of shares of our common stock is entitled to one vote per share held by such
holder on all matters on which stockholders generally are entitled to vote; provided, however, that
except as otherwise required by applicable law, a holder of shares of our common stock will not

 

 

be entitled to vote on any amendment to our certificate of incorporation that relates solely to the
terms of one or more outstanding series of our preferred stock if the holders of such affected
series are entitled under our certificate of incorporation to vote on any such amendment. Except
as may be provided in our certificate of incorporation or by applicable law, the holders of shares
of our common stock have the exclusive right to vote in the election of directors and for all other
purposes. The voting rights of shares of our Class A common stock are subject to additional
restrictions described under “—Maritime Restrictions” below. If issued, the shares of our Class B
common stock will not be subject to the Maritime Restrictions.

Subject to any preferences that may be applicable to any then-outstanding series of preferred
stock, holders of shares of our common stock are entitled to receive dividends and distributions on
such shares at such times and amounts as may be declared by our Board of Directors out of funds
legally available for that purpose. The dividend and distribution rights of the shares of our
Class A common stock are subject to additional restrictions described under “—Maritime
Restrictions” below. If issued, shares of our Class B common stock will not be subject to the
Maritime Restrictions. The number of authorized shares of our common stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of
the holders of a majority in voting power of our outstanding capital stock irrespective of the
class voting provisions of Section 242(b)(2) of the General Corporation Law of the State of
Delaware.

We have no specific plans to pay any dividends on the shares of our common stock in the foreseeable
future. Certain of the financing arrangements that we assumed in the Reorganization restrict the
payment of cash dividends.

Number of Directors and Vacancies and Newly Created Directorships

Subject to any special rights of holders of any then-outstanding series of preferred stock to elect
directors, our certificate of incorporation provides that our Board of Directors will have no less
than three and no more than fifteen directors, with the precise number of directors to be fixed in
the manner prescribed in the bylaws. Our bylaws provide for the number of directors to be
determined from time to time by a resolution of the Board of Directors. Newly created
directorships or vacancies occurring on the Board of Directors may be filled by the vote of a
majority of the remaining directors then in office, even though less than a quorum, or by a
plurality of votes cast at a meeting of our stockholders. Any director elected to fill a newly
created directorship or vacancy on the Board of Directors serves until the expiration of the term
of office of the director whom he or she replaced or until his or her successor is elected and
qualified, subject to such director’s earlier death, resignation, disqualification or removal.

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Special Meetings of the Stockholders

Subject to any rights of holders of any then-outstanding series of preferred stock or applicable
law, our bylaws provide that a special meeting of stockholders may only be called by the Board of
Directors pursuant to a resolution adopted by a majority of directors. Subject to the foregoing
provisions, holders of shares of our common stock do not have the power to call a special meeting.

Stockholder Action by Written Consent

Our certificate of incorporation does not prohibit our stockholders from acting by written consent;
therefore, under Delaware law, our stockholders may take any action which could otherwise be taken
at any annual or special meeting of the stockholders by written consent without a meeting, notice
or vote. Our bylaws provide for a set of mechanics for such stockholder consent solicitations by,
among other things, requiring a stockholder seeking to take such action to make a written request
of our Board of Directors to set a record date for the consent solicitation and establishing other
ministerial functions.

Liquidation or Dissolution

In the event we liquidate, dissolve or wind up our affairs, prior to any distributions to the
holders of our common stock, our creditors and the holders of our preferred stock, if any, will
receive any payments to which they are entitled. Subsequent to those payments, the holders of our
common stock will share ratably, according to the number of shares of common stock held, in our
remaining assets, if any. Notwithstanding the foregoing, the rights of owners of shares of our
Class A common stock to receive distributions (upon liquidation or otherwise) are subject to the
Maritime Restrictions as described under “—Maritime Restrictions” below.

Conversion

The conversion of shares of our Class A common stock into shares of our Class B common stock is
described under “—General” above.

Redemption

Shares of our common stock are not redeemable (except for any shares of our Class A common stock
that are Excess Shares) and have no subscription or preemptive rights. For a description of our
right to redeem Excess Shares, see “—Maritime Restrictions—Redemption of Excess Shares” below.

Transfer Agent and Registrar

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The Transfer Agent and Registrar for shares of our common stock is American Stock Transfer & Trust
Company.

Limitation of Directors’ Liability and Indemnification

Our certificate of incorporation contains provisions eliminating the personal liability of our
directors to the Company and our stockholders for monetary damages for breaches of their fiduciary
duties as directors to the fullest extent permitted by the General Corporation Law of the State of
Delaware or any other applicable law as it exists on the date of our certificate of incorporation
or as it may be amended. The General Corporation Law of the State of Delaware prohibits such
elimination of personal liability of a director for:

	 	•	 	any breach of the director’s duty of loyalty to us or our stockholders;
	 
	 	•	 	acts or omissions not in good faith or involving intentional misconduct or a knowing
violation of law;
	 
	 	•	 	the payment of dividends, stock repurchases or redemptions that are unlawful under
Delaware law; and
	 
	 	•	 	any transaction in which the director receives an improper personal benefit.

These provisions only apply to breaches of duty by directors as directors and not in any other
corporate capacity, such as officers. In addition, these provisions limit liability only for
breaches of fiduciary duties under the General Corporation Law of the State of Delaware and not for
violations of other laws such as the U.S. Federal securities laws and U.S. Federal and state
environmental laws. As a result of these provisions in our certificate of incorporation, our
stockholders may be unable to recover monetary damages against directors for actions taken by them
that constitute negligence or gross negligence or that are in violation of their fiduciary duties.
However, our stockholders may obtain injunctive or other equitable relief for these actions. These
provisions also reduce the likelihood of derivative litigation against directors that might benefit
us.

In addition, our certificate of incorporation and bylaws provide that we will indemnify and advance
expenses to, and hold harmless, each of our directors and officers (each, an “indemnitee”), to the
fullest extent permitted by applicable law, who was or is made or is threatened to be made a party
or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he, or a person for whom he is the legal
representative, is or was a director or officer of the Company or, while a director or officer of
the Company, is or was serving at our request as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including
service with respect to

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employee benefit plans, against all liability and loss suffered and
expenses (including attorneys’ fees) reasonably incurred by such indemnitee. Notwithstanding the
preceding sentence, except as otherwise provided in our certificate of incorporation and bylaws, we will be required under our
certificate of incorporation and bylaws to indemnify, or advance expenses to, an indemnitee in
connection with a proceeding (or part thereof) commenced by such indemnitee only if the
commencement of such proceeding (or part thereof) by the indemnitee was authorized by our Board of
Directors.

In connection with the Reorganization, we entered into indemnification agreements with each of our
directors and certain of our officers (each, an “Contractual Indemnitee”). Pursuant to the
indemnification agreements, we will be obligated to indemnify the applicable Contractual Indemnitee
to the fullest extent permitted by applicable law in the event that such Contractual Indemnitee, by
reason of such Contractual Indemnitee’s relationship with us, was, is or is threatened to be made a
party to or participant in any threatened, pending or completed action or proceeding, other than an
action or proceeding by or in our right against all expenses, judgments, penalties, fines
(including any excise taxes assessed on the Contractual Indemnitee with respect to an employee
benefit plan) and amounts paid in settlement actually and reasonably incurred by such Contractual
Indemnitee in connection with such action or proceeding, provided that such Contractual Indemnitee
acted in good faith and in a manner he or she reasonably believed to be in or not opposed to our
best interests, and, with respect to any criminal action or proceeding, provided that he or she
also had no reasonable cause to believe his or her conduct was unlawful. We will also be obligated
to indemnify such Contractual Indemnitee to the fullest extent permitted by applicable law in the
event that such Contractual Indemnitee, by reason of such Contractual Indemnitee’s relationship
with us, was, is or is threatened to be made a party to or participant in any threatened, pending
or completed action or proceeding brought by or in our right to procure a judgment in our favor,
against all expenses actually and reasonably incurred by such Contractual Indemnitee in connection
with such action or proceeding, provided that such Contractual Indemnitee acted in good faith and
in a manner he or she reasonably believed to be in or not opposed to our best interests.
Notwithstanding the foregoing sentence, no indemnification against expenses incurred by such
Contractual Indemnitee in connection with such an action or proceeding brought by or in our right
will be made in respect of any claim, issue or matter as to which such Contractual Indemnitee is
adjudged to be liable to us or if applicable law prohibits such indemnification being made;
provided, however, that, in such event, if applicable law so permits, indemnification against such
expenses will nevertheless be made by us if and to the extent that the court in which such action
or proceeding has been brought or is pending determines that, despite the adjudication of liability
but in view of all the circumstances of the case, the Contractual Indemnitee is fairly and
reasonably entitled to indemnity for such expenses.

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The indemnification agreements also provide
for the advancement of all reasonable expenses incurred by such Contractual Indemnitee in
connection with any action or proceeding covered by the indemnification agreement. The Contractual
Indemnitee will be required to repay any amounts so advanced if, and to the extent that, it is
ultimately determined that he or she is not entitled to be indemnified by us against such expenses.
The Contractual Indemnitee will further be required to return any such advance to us which remains
unspent at the conclusion of the action or proceeding to which the advance related.

Delaware Section 203

As a Delaware corporation, we are subject to Section 203 of the General Corporation Law of the
State of Delaware. Section 203 imposes a three-year moratorium on the ability of public Delaware
corporations to engage in a wide range of specified transactions with any “interested stockholder”.
An interested stockholder includes, among other things, any person other than the corporation and
its majority-owned subsidiaries who owns 15% or more of the outstanding voting stock of the
corporation. However, the moratorium will not apply if, among other things, the transaction is
approved by:

	 	•	 	the board of directors of the corporation prior to the time the interested stockholder
became an interested stockholder; or
	 
	 	•	 	at or after the time the interested stockholder became an interested stockholder, the
board of directors of the corporation and, at a meeting of stockholders, the holders of
two-thirds of the outstanding voting stock of the corporation, not including those shares
owned by the interested stockholder.

We do not have a stockholder that owns 15% or more of our common stock. If a stockholder acquired
more than 15% of our common stock, then such stockholder would be subject to the restrictions under
Section 203.

Anti-takeover Effects

The Maritime Restrictions may have anti-takeover effects because they will restrict the ability of
non-U.S. citizens to own, in the aggregate, more than 22% of the outstanding shares of our Class A
common stock. Our Board of Directors considers the Maritime Restrictions to be reasonable and in
our best interests and the best interests of our stockholders because the Maritime Restrictions
reduce the risk that the Company will not be a U.S. citizen under the U.S. maritime and vessel
documentation laws applicable to registering vessels in the United States and operating those
vessels in Coastwise Trade. In the opinion of our Board of Directors, the fundamental importance
to our stockholders of maintaining eligibility under these laws is a more significant consideration
than the indirect “anti-takeover” effect the Maritime Restrictions may

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have or the cost and expense of preparing this proxy statement, soliciting proxies in favor of the Reorganization and holding
the special meeting.

The availability for issuance of additional shares of our common stock could have the effect of
rendering more difficult or discouraging an attempt to obtain control of the Company. For example,
the issuance of shares of our common stock (within the limits imposed by applicable law and the
rules of any exchange upon which the common stock may then be listed) in a public or private sale,
merger or similar transaction would increase the number of outstanding shares, thereby possibly
diluting the interest of a party attempting to obtain control of the Company. The issuance of
additional shares of our common stock could also be used to render more difficult a merger or
similar transaction even if it appears to be desirable to a majority of our stockholders.

Maritime Restrictions

The following is a summary of the Maritime Restrictions in our certificate of incorporation. This
summary is qualified in its entirety by reference to the full text of our certificate of
incorporation.

We urge stockholders to and potential investors to carefully read our certificate
of incorporation in its entirety.

General

In order to protect our ability to register vessels in the U.S. under the applicable U.S. maritime
and vessel documentation laws and operate those vessels in Coastwise Trade, our certificate of
incorporation limits the aggregate ownership (record or beneficial) or control of shares of our
Class A common stock by non-U.S. citizens (as such term is determined by the applicable U.S.
maritime and vessel documentation laws for purposes of Coastwise Trade) to 22% of the total issued
and outstanding shares of such class. We refer to such percentage limitation on foreign ownership
of shares of our Class A common stock as the “Maximum Permitted Percentage” and any such shares
owned by non-U.S. citizens in excess of the Maximum Permitted Percentage as “Excess Shares”. To
the extent the applicable U.S. maritime and vessel documentation laws are amended to change the
legal foreign ownership maximum percentage, our certificate of incorporation provides that the
Maximum Permitted Percentage will automatically be changed to a percentage that is three percentage
points lower than the legal foreign ownership maximum percentage, as amended. In the event we are
subject to any other U.S. Federal law that restricts the ownership of shares of our capital stock
by non-U.S. citizens, our Board of Directors will have
discretion to impose ownership restrictions and other provisions that are substantially consistent
with such applicable law on the shares of our capital stock (so long as such restrictions and other
provisions are no more restrictive than the Maritime Restrictions). In addition, our certificate
of incorporation provides that a person will not be deemed to be a “record owner”, “beneficial
owner”

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or “controller” of shares of our Class A common stock, if our Board of Directors determines,
in good faith, that such person is not an owner of such shares in accordance with and for the
purposes of the applicable U.S. maritime and vessel documentation laws.

Restriction on Transfers of Excess Shares

Our certificate of incorporation provides that any purported transfer of any shares of our Class A
common stock that would result in the aggregate ownership of shares of our Class A common stock in
excess of the Maximum Permitted Percentage by one or more persons who is not a U.S. citizen will be
void and ineffective, and neither the Company nor our transfer agent will register any such
purported transfer on our stock transfer records or recognize any such purported transferee as a
stockholder of the Company for any purpose (including for purposes of voting, dividends and
distributions), except to the extent necessary to effect the remedies available to us under our
certificate of incorporation (as described under “—Additional Remedies for Exceeding the Maximum
Permitted Percentage” and “—Redemption of Excess Shares” below).

Additional Remedies for Exceeding the Maximum Permitted Percentage

In the event such restrictions voiding purported transfers would be ineffective for any reason, our
certificate of incorporation provides that if any transfer (a “Proposed Transfer”) to a proposed
transferee (a “Proposed Transferee”) would otherwise result in the ownership by non-U.S. citizens
of an aggregate number of shares of our Class A common stock in excess of the Maximum Permitted
Percentage, such Excess Shares will automatically be transferred to a trust for the exclusive
benefit of one or more charitable beneficiaries that are U.S. citizens. The Proposed Transferee
will not acquire any rights in the Excess Shares transferred into the trust.

Our certificate of incorporation also provides that the above trust transfer provisions apply to
(1) any change in the status (a “Status Change”) of an owner of shares of our Class A common stock
from a U.S. citizen to a non-U.S. citizen (a “Disqualified Recipient”) that results in non-U.S.
citizens, in the aggregate, owning shares of our Class A common stock in excess of the Maximum
Permitted Percentage and (2) any issuance of shares of our Class A common stock (including the
shares of our Class A common stock that were issued in the Reorganization) (a “Deemed Original
Issuance” and, together with a Proposed Transfer and a Status Change, each, a “Restricted Event”)
to a non-U.S. citizen (a “Disqualified Recipient” and, together with a Proposed Transferee and
Disqualified Person, a “Restricted Person”) that would result in non-U.S. citizens, in the
aggregate, owning shares of our Class A common stock in excess of the Maximum Permitted Percentage.

8

 

The automatic transfer will be deemed to be effective as of immediately before the consummation of
the Restricted Event. Shares of our Class A common stock held in the trust will remain issued and
outstanding shares. Any Restricted Person will not profit from ownership of any shares of our
Class A common stock held in the trust, will have no rights to dividends or distributions and will
have no rights to vote or other rights attributable to the shares of our Class A common stock held
in the trust. The trustee of the trust, who will be a U.S. citizen chosen by us and unaffiliated
with us or any owner of such Excess Shares, will have all voting rights and rights to dividends or
other distributions with respect to Excess Shares held in the trust. The trustee of the trust may
rescind as void any vote given by a holder with respect to Excess Shares and revoke any proxy given
by such holder with respect to Excess Shares and recast such vote or resubmit such proxy for the
benefit of the charitable beneficiary of such trust, unless prohibited from doing so by applicable
law or we have already taken corporate action in respect of which such vote was cast or proxy was
given. These rights will be exercised by the trustee of the trust for the exclusive benefit of the
charitable beneficiary of such trust. In each case, any dividend or distribution
authorized and paid by us to a Restricted Person with respect to such Restricted Person’s Excess
Shares after the automatic transfer of such Excess Shares into a trust must be paid by the
Restricted Person to the trustee. Any dividend or distribution authorized with respect to any
Excess Shares after the automatic transfer of such Excess Shares into the trust but unpaid will be
paid when due to the trustee. Any dividend or distribution paid to the trustee will be held in
trust for distribution to the charitable beneficiary. The amount of any such dividends or
distribution received by a Restricted Person with respect to Excess Shares and not paid to the
trustee may be withheld by the trustee from the proceeds of the sale of such Excess Shares remitted
to such Restricted Person (as further described below).

Within 20 days of receiving notice from the Company that shares of our Class A common stock have
been transferred to the trust, the trustee will sell the shares to a U.S. citizen designated by the
trustee (or to us in accordance with the procedures described below). Upon the sale, the interest
of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the
proceeds of the sale (net of broker’s commissions and other selling expenses, applicable taxes and
other costs and expenses of the trust) to the Restricted Person and to the charitable beneficiary
as follows:

	 	•	 	In the case of Excess Shares transferred into the trust as a result of a Proposed
Transfer, the Proposed Transferee will receive the lesser of (1) the price paid by the
Proposed Transferee for the shares or, if the Proposed Transferee did not give value for
the shares in connection with the event causing the shares to be held in the trust (e.g.,
a gift, devise or other similar transaction), the fair market value (determined in
accordance with the formula set forth in our certificate of incorporation) of the shares
on the date of the Proposed Transfer (the “Proposed Transfer Price”) and (2) the price
received by the trustee from the sale of the shares.

9

 

	 	•	 	In the case of Excess Shares transferred into the trust as a result of a Status Change,
the Disqualified Recipient will receive the lesser of (1) the fair market value
(determined in accordance with the formula set forth in our certificate of incorporation)
of the shares on the date of the Status Change (the “Status Change Price”) and (2) the
price received by the trustee from the sale of the shares.
	 
	 	•	 	In the case of Excess Shares transferred into the trust as a result of a Deemed
Original Issuance (including any shares of our Class A common stock which were issued in
the Reorganization), the Disqualified Recipient will receive the lesser of (1) the price
paid by the Disqualified Recipient for the shares or, if the Disqualified Recipient did
not give value for the shares in connection with the Original Issuance, the fair market
value (determined in accordance with the formula set forth in our certificate of
incorporation) of the shares on the date of the Deemed Original Issuance (the “Deemed
Original Issuance Price”) and (2) the price received by the trustee from the sale of the
shares.

Any net sale proceeds in excess of the amount payable to the Restricted Person will be promptly
paid to the charitable beneficiary. If such shares are sold by the Restricted Person prior to our
discovery that shares of our Class A common stock should have been transferred to the trust, then
(1) the shares will be deemed to have been sold on behalf of the trust and (2) to the extent that
the Restricted Person received an amount for the shares that exceeds the amount such Restricted
Person was entitled to receive, the excess will be paid to the trustee upon demand. In addition,
shares of our Class A common stock held in the trust will be deemed to have been offered for sale
to the Company at a price per share equal to the lesser of (1) the fair market value (determined in
accordance with the formula set forth in our certificate of incorporation) on the date we accept
the offer and (2) the Proposed Transfer Price, the Status Change Price or the Deemed Original
Issuance Price, as the case may be, of such Excess Shares. We will have the right to accept the
offer until the trustee has sold the shares. Upon a sale to the Company, the interest of the
charitable beneficiary in the shares sold will terminate and the trustee will distribute
to the Restricted Person the portion of the net proceeds from the sale due to the Restricted Person
and pay the remainder, if any, to the charitable beneficiary of the trust.

Redemption of Excess Shares

To the extent that the above trust transfer provisions would be ineffective for any reason, our
certificate of incorporation provides that, to prevent the percentage of aggregate shares of our
Class A common stock owned by non-U.S. citizens from exceeding the Maximum Permitted Percentage,
we, by action of our Board of Directors, in its sole discretion, will have the power (but not the
obligation) to redeem all or any portion of such Excess Shares, unless such redemption is not
permitted under applicable law.

Until such Excess Shares are redeemed, the Restricted Persons owning such shares will not be
entitled to any voting rights with respect to such shares and we will pay any dividends or
distributions with respect to such shares into an escrow account. Full voting, distribution and

10

 

dividend rights will be restored to such Excess Shares (and any dividends or distributions paid
into an escrow account will be paid to holders of record of such shares), promptly after the time
and to the extent the Board of Directors determines that such shares no long constitute Excess
Shares, unless such shares have already been redeemed by the Company.

If our Board of Directors determines to redeem Excess Shares, the redemption price of such Excess
Shares will be an amount equal to (1) the lesser of (x) the fair market value (determined in
accordance with the formula set forth in our certificate of incorporation) on the redemption date
and (y) in the case of a Proposed Transfer, the Proposed Transfer Price of such Excess Shares, in
the case of a Status Change, the Status Change Price of such Excess Shares or, in the case of a
Deemed Original Issuance, the Deemed Original Issuance Price of such Excess Shares, minus (2) any
dividends or distributions received by such Restricted Person with respect to such Excess Shares
prior to and including the redemption date instead of being paid into the escrow account. Our
Board of Directors may, in its discretion, pay the redemption price in cash or by the issuance of
interest-bearing promissory notes with a maturity of up to 10 years and bearing a fixed rate equal
to the yield on the U.S. Treasury Note of comparable maturity. Upon redemption, any dividends or
distributions that have been paid into an escrow account with respect to such redeemed shares will
be paid by the escrow agent for such account to a charitable organization that is a U.S. citizen
designated by the Company, net of any taxes and other costs and expenses of the escrow agent.

Permitted Actions by the Board of Directors Relating to the Maritime Restrictions

In addition to the foregoing restrictions, so that we may assure compliance with the applicable
U.S. maritime and vessel documentation laws, our certificate of incorporation authorizes our Board
of Directors to effect any and all measures necessary or desirable (consistent with the provisions
of our certificate of incorporation) to fulfill the purpose of and to implement the Maritime
Restrictions, including:

	 	•	 	obtaining, as a condition precedent to the transfer of shares of our Class A common
stock, a citizenship certification and any other documentation we or our transfer agent
deems advisable from the transferee of such shares (and persons on whose behalf shares of
our Class A common stock are to be held);
	 
	 	•	 	determining the citizenship of any owner of shares of our Class A common stock and, in
making such determination, relying upon the stock transfer records of the Company, the
citizenship certificates and other documentation given by owners or their transferees and
such other written statements and affidavits and such other proof as we may deem
reasonable;
	 
	 	•	 	developing issuance, transfer, redemption, escrow and legend notice provisions and
procedures regarding certificated and uncertificated shares of our Class A common stock;

11

 

	 	•	 	establishing and maintaining a dual stock certificate system under which different
forms of certificates are issued to U.S. citizens and non-U.S. citizens; and
	 
	 	•	 	mandating that all shares of Class A common stock issued by the Company include the
legend specified in our certificate of incorporation (or other appropriate legend
reflecting the Maritime Restrictions) or, in the case of uncertificated shares, mandating
that the record holder thereof be sent a written notice containing the information in the
applicable legend within a reasonable time after the issuance or transfer thereof in
accordance with Delaware law.

Maritime Restrictions Severable

The Maritime Restrictions are intended to be severable. If any one or more of the Maritime
Restrictions is held to be invalid, illegal or unenforceable, our certificate of incorporation
provides that the validity, legality or enforceability of any other provision will not be affected.

National Securities Exchange

In order for us to comply with any conditions to listing the shares of our Class A common stock
that may be specified by any applicable national securities exchange or automated inter-dealer
quotation service, our certificate of incorporation also provides that nothing therein, such as the
provisions voiding transfers to non-U.S. citizens, will preclude the settlement of any transaction
entered into through any such applicable national securities exchange or automated inter-dealer
quotation service if such preclusion is prohibited by such exchange or quotation service.

Our Class B Common Stock, Termination of Maritime Restrictions

Shares of our Class B common stock were not issued in the Reorganization and will not be subject to
the Maritime Restrictions. Initially, shares of our Class B common stock will only be issued upon
the conversion of all of the outstanding and treasury shares of our Class A common stock into
outstanding or treasury shares of our Class B common stock, as the case may be. Each outstanding
and treasury share of our Class A common stock will be automatically converted into one share of
our Class B common stock in the event our Board determines that either:

	 	•	 	the U.S. ownership requirements of the applicable U.S. maritime and vessel
documentation laws are no longer applicable to the Company (or have been amended so that
the Maritime Restrictions are no longer necessary); or
	 
	 	•	 	the elimination of such restrictions is in the best interest of the Company and our
stockholders. Thereafter, the converted shares of our Class A common stock will be
canceled, will no longer be outstanding and cannot be reissued.

12

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