EXHIBIT 99.1

 

                             ARLINGTON TANKERS LTD.

 

                      Executive Change in Control Agreement

 

      THIS EXECUTIVE CHANGE IN CONTROL AGREEMENT by and between Arlington

Tankers Ltd., a corporation organized under the laws of Bermuda (the "Company"),

and Arthur L. Regan (the "Executive") is made as of October 24, 2005 (the

"Effective Date").

 

      WHEREAS, the Company recognizes that, as is the case with many

publicly-held corporations, the possibility of a change in control of the

Company exists and that such possibility, and the uncertainty and questions

which it may raise among key personnel, may result in the departure or

distraction of key personnel to the detriment of the Company and its

stockholders; and

 

      WHEREAS, the Board of Directors of the Company (the "Board") has

determined that appropriate steps should be taken to reinforce and encourage the

continued employment and dedication of the Company's key personnel without

distraction from the possibility of a change in control of the Company and

related events and circumstances.

 

      NOW, THEREFORE, in consideration of the Executive remaining in the

Company's employ and other good consideration, the receipt and sufficiency of

which is acknowledged by both parties, the Company and the Executive agree as

follows:

 

      1. Key Definitions.

 

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

meanings:

 

            1.1 "Change in Control" means an event or occurrence set forth in

any one or more of subsections (a) through (d) below (including an event or

occurrence that constitutes a Change in Control under one of such subsections

but is specifically exempted from another such subsection):

 

                  (a) the acquisition by an individual, entity or group (within

the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of

1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership of

any capital stock of the Company if, after such acquisition, such Person

beneficially owns (within the meaning of Rule 13d-3 promulgated under the

Exchange Act) 50% or more of either (x) the then-outstanding shares of common

stock of the Company (the "Outstanding Company Common Stock") or (y) the

combined voting power of the then-outstanding securities of the Company entitled

to vote generally in the election of directors (the "Outstanding Company Voting

Securities"); provided, however, that for purposes of this subsection (a), the

following acquisitions shall not constitute a Change in Control: (i) any

acquisition directly from the Company (excluding an acquisition pursuant to the

exercise, conversion or exchange of any security exercisable for, convertible

into or exchangeable for common stock or voting securities of the Company,

unless the Person exercising, converting or exchanging such security acquired

such security directly from the Company or an underwriter or agent of the

Company), (ii) any acquisition by the Company, (iii) any acquisition by any

employee benefit plan (or related trust) sponsored or maintained by the

 

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Company or any corporation controlled by the Company, or (iv) any acquisition by

any corporation pursuant to a transaction which complies with clauses (i) and

(ii) of subsection (c) of this Section 1.1; or

 

                  (b) such time as the Continuing Directors (as defined below)

do not constitute a majority of the Board (or, if applicable, the Board of

Directors of a successor corporation to the Company), where the term "Continuing

Director" means at any date a member of the Board (i) who was a member of the

Board on the date of the execution of this Agreement or (ii) who was nominated

or elected subsequent to such date by at least a majority of the directors who

were Continuing Directors at the time of such nomination or election or whose

election to the Board was recommended or endorsed by at least a majority of the

directors who were Continuing Directors at the time of such nomination or

election; provided, however, that there shall be excluded from this clause (ii)

any individual whose initial assumption of office occurred as a result of an

actual or threatened election contest with respect to the election or removal of

directors or other actual or threatened solicitation of proxies or consents, by

or on behalf of a person other than the Board; or

 

                  (c) the consummation of a merger, consolidation,

reorganization, recapitalization or statutory share exchange involving the

Company or a sale or other disposition of all or substantially all of the assets

of the Company in one or a series of transactions (a "Business Combination"),

unless, immediately following such Business Combination, each of the following

two conditions is satisfied: (i) all or substantially all of the individuals and

entities who were the beneficial owners of the Outstanding Company Common Stock

and Outstanding Company Voting Securities immediately prior to such Business

Combination beneficially own, directly or indirectly, more than 50% of the

then-outstanding shares of common stock and the combined voting power of the

then-outstanding securities entitled to vote generally in the election of

directors, respectively, of the resulting or acquiring corporation in such

Business Combination (which shall include, without limitation, a corporation

which as a result of such transaction owns the Company or substantially all of

the Company's assets either directly or through one or more subsidiaries) (such

resulting or acquiring corporation is referred to herein as the "Acquiring

Corporation") in substantially the same proportions as their ownership,

immediately prior to such Business Combination, of the Outstanding Company

Common Stock and Outstanding Company Voting Securities, respectively; and (ii)

no Person (excluding any employee benefit plan (or related trust) maintained or

sponsored by the Company or by the Acquiring Corporation) beneficially owns,

directly or indirectly, 50% or more of the then outstanding shares of common

stock of the Acquiring Corporation, or of the combined voting power of the

then-outstanding securities of such corporation entitled to vote generally in

the election of directors (except to the extent that such ownership existed

prior to the Business Combination); or

 

                  (d) approval by the stockholders of the Company of a complete

liquidation or dissolution of the Company.

 

            1.2 "Change in Control Date" means the first date during the Term

(as defined in Section 2) on which a Change in Control occurs. Anything in this

Agreement to the contrary notwithstanding, if (a) a Change in Control occurs,

(b) the Executive's employment with the Company is terminated prior to the date

on which the Change in Control occurs, and (c) it is

 

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reasonably demonstrated by the Executive that such termination of employment (i)

was at the request of a third party who has taken steps reasonably calculated to

effect a Change in Control or (ii) otherwise arose in connection with or in

anticipation of a Change in Control, then for all purposes of this Agreement the

"Change in Control Date" shall mean the date immediately prior to the date of

such termination of employment.

 

            1.3 "Cause" means:

 

                  (a) the Executive's willful and continued failure to

substantially perform his reasonable assigned duties as an officer of the

Company (other than any such failure resulting from incapacity due to physical

or mental illness or any failure after the Executive gives notice of termination

for Good Reason), which failure is not cured within 30 days after a written

demand for substantial performance is received by the Executive from the Board

of Directors of the Company which specifically identifies the manner in which

the Board of Directors believes the Executive has not substantially performed

the Executive's duties; or

 

                  (b) the Executive's willful engagement in illegal conduct or

gross misconduct which is materially and demonstrably injurious to the Company.

 

        For purposes of this Section 1.3, no act or failure to act by the

Executive shall be considered "willful" unless it is done, or omitted to be

done, in bad faith and without reasonable belief that the Executive's action or

omission was in the best interests of the Company.

 

            1.4 "Good Reason" means the occurrence, without the Executive's

written consent, of any of the events or circumstances set forth in clauses (a)

through (g) below. Notwithstanding the occurrence of any such event or

circumstance, such occurrence shall not be deemed to constitute Good Reason if,

prior to the Date of Termination specified in the Notice of Termination (each as

defined in Section 3.2(a)) given by the Executive in respect thereof, such event

or circumstance has been fully corrected and the Executive has been reasonably

compensated for any losses or damages resulting therefrom (provided that such

right of correction by the Company shall only apply to the first Notice of

Termination for Good Reason given by the Executive).

 

                  (a) the assignment to the Executive of duties inconsistent in

any material respect with the Executive's position, authority or

responsibilities in effect immediately prior to the earliest to occur of (i) the

Change in Control Date, (ii) the date of the execution by the Company of the

initial written agreement or instrument providing for the Change in Control or

(iii) the date of the adoption by the Board of Directors of a resolution

providing for the Change in Control (with the earliest to occur of such dates

referred to herein as the "Measurement Date"), or any other action or omission

by the Company which results in a material diminution in such position,

authority or responsibilities;

 

                  (b) a reduction in the Executive's annual base salary as in

effect on the Measurement Date or as the same was or may be increased thereafter

from time to time;

 

                  (c) the failure by the Company to (i) continue in effect any

material compensation or benefit plan or program (including without limitation

any life insurance, medical, health and accident or disability plan and any

vacation or automobile program or policy

 

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and any vacation or automobile program or policy) (a "Benefit Plan") in which

the Executive participates or which is applicable to the Executive immediately

prior to the Measurement Date, unless an equitable arrangement (embodied in an

ongoing substitute or alternative plan) has been made with respect to such plan

or program, (ii) continue the Executive's participation therein (or in such

substitute or alternative plan) on a basis not materially less favorable, both

in terms of the amount of benefits provided and the level of the Executive's

participation relative to other participants, than the basis existing

immediately prior to the Measurement Date or (iii) award cash bonuses to the

Executive in amounts and in a manner substantially consistent with past practice

in light of the Company's financial performance;

 

                  (d) a change by the Company in the location at which the

Executive performs his principal duties for the Company to a new location that

is outside of the New York City metropolitan area;

 

                  (e) the failure of the Company to obtain the agreement from

any successor to the Company to assume and agree to perform this Agreement, as

required by Section 6.1; or

 

                  (f) any failure of the Company to pay or provide to the

Executive any portion of the Executive's compensation or benefits due under any

Benefit Plan within seven days of the date such compensation or benefits are

due, or any material breach by the Company of this Agreement or any employment

agreement with the Executive.

 

      The Executive's right to terminate his employment for Good Reason shall

not be affected by his incapacity due to physical or mental illness.

 

            1.5 "Disability" means the Executive's absence from the full-time

performance of the Executive's duties with the Company for 180 consecutive

calendar days as a result of incapacity due to mental or physical illness which

is determined to be total and permanent by a physician selected by the Company

or its insurers and acceptable to the Executive or the Executive's legal

representative.

 

      2. Term of Agreement. This Agreement, and all rights and obligations of

the parties hereunder, shall take effect upon the Effective Date and shall

expire upon the first to occur of (a) the expiration of the Term (as defined

below) if a Change in Control has not occurred during the Term, (b) the

termination of the Executive's employment with the Company prior to the Change

in Control Date, (c) the date 12 months after the Change in Control Date, if the

Executive is still employed by the Company as of such later date, or (d) the

fulfillment by the Company of all of its obligations under Sections 4 and 5.2 if

the Executive's employment with the Company terminates within 12 months

following the Change in Control Date. "Term" shall mean the period commencing as

of the Effective Date and continuing in effect through December 31, 2006;

provided, however, that commencing on January 1, 2007 and each January 1

thereafter, the Term shall be automatically extended for one additional year

unless, not later than 90 days prior to the scheduled expiration of the Term (or

any extension thereof), the Company shall have given the Executive written

notice that the Term will not be extended.

 

      3. Employment Status; Termination Following Change in Control.

 

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            3.1 Not an Employment Contract. The Executive acknowledges that this

Agreement does not constitute a contract of employment or impose on the Company

any obligation to retain the Executive as an employee and that this Agreement

does not prevent the Executive from terminating employment at any time. If the

Executive's employment with the Company terminates for any reason and

subsequently a Change in Control shall occur, the Executive shall not be

entitled to any benefits hereunder except as otherwise provided pursuant to

Section 1.2.

 

            3.2 Termination of Employment.

 

                  (a) If the Change in Control Date occurs during the Term, any

termination of the Executive's employment by the Company or by the Executive

within 12 months following the Change in Control Date (other than due to the

death of the Executive) shall be communicated by a written notice to the other

party hereto (the "Notice of Termination"), given in accordance with Section 7.

Any Notice of Termination shall: (i) indicate the specific termination provision

(if any) of this Agreement relied upon by the party giving such notice, (ii) to

the extent applicable, set forth in reasonable detail the facts and

circumstances claimed to provide a basis for termination of the Executive's

employment under the provision so indicated and (iii) specify the Date of

Termination (as defined below). The effective date of an employment termination

(the "Date of Termination") shall be the close of business on the date specified

in the Notice of Termination (which date may not be less than 15 days or more

than 120 days after the date of delivery of such Notice of Termination), in the

case of a termination other than one due to the Executive's death, or the date

of the Executive's death, as the case may be. In the event the Company fails to

satisfy the requirements of Section 3.2(a) regarding a Notice of Termination,

the purported termination of the Executive's employment pursuant to such Notice

of Termination shall not be effective for purposes of this Agreement.

 

                  (b) The failure by the Executive or the Company to set forth

in the Notice of Termination any fact or circumstance which contributes to a

showing of Good Reason or Cause shall not waive any right of the Executive or

the Company, respectively, hereunder or preclude the Executive or the Company,

respectively, from asserting any such fact or circumstance in enforcing the

Executive's or the Company's rights hereunder.

 

                  (c) Any Notice of Termination for Cause given by the Company

must be given within 90 days of the occurrence of the event(s) or

circumstance(s) which constitute(s) Cause. Prior to any Notice of Termination

for Cause being given (and prior to any termination for Cause being effective),

the Executive shall be entitled to a hearing before the Board of Directors of

the Company at which he may, at his election, be represented by counsel and at

which he shall have a reasonable opportunity to be heard. Such hearing shall be

held on not less than 15 days prior written notice to the Executive stating the

Board of Directors' intention to terminate the Executive for Cause and stating

in detail the particular event(s) or circumstance(s) which the Board of

Directors believes constitutes Cause for termination.

 

                  (d) Any Notice of Termination for Good Reason given by the

Executive must be given within 90 days of the occurrence of the event(s) or

circumstance(s) which constitute(s) Good Reason.

 

<PAGE>

 

      4. Benefits to Executive.

 

            4.1 Stock Acceleration. If the Change in Control Date occurs during

the Term, then, effective upon the Change in Control Date, (a) each outstanding

option to purchase shares of Common Stock of the Company held by the Executive

shall become immediately exercisable in full and shares of Common Stock of the

Company received upon exercise of any options will no longer be subject to a

right of repurchase by the Company, (b) each outstanding restricted stock award

shall be deemed to be fully vested and will no longer be subject to a right of

repurchase by the Company.

 

            4.2 Compensation. If the Change in Control Date occurs during the

Term and the Executive's employment with the Company terminates within 12 months

following the Change in Control Date, the Executive shall be entitled to the

following benefits:

 

                  (a) Termination Without Cause or for Good Reason. If the

Executive's employment with the Company is terminated by the Company (other than

for Cause, Disability or death) or by the Executive for Good Reason within 12

months following the Change in Control Date, then the Executive shall be

entitled to the following benefits:

 

                        (i) the Company shall pay to the Executive in a lump sum

in cash within 30 days after the Date of Termination the aggregate of the

following amounts:

 

                              (1) a payment equal to twelve (12) months of the

base salary he received as of the date of the Change of Control, or termination

of employment, whichever is greater (the "Accrued Obligations"). This payment

shall be subject to required deductions and tax withholdings and shall be paid

within ten (10) business days of the effective date of the release required by

Section 3 and

 

                              (2) a payment equal to the highest bonus paid to

the Executive in any of the three years prior to year in which a Change of

Control occurs. For purposes of this Section, the Executive acknowledges that no

bonus has been paid in any period prior to the date of this Agreement.

 

                        (ii) for 12 months after the Date of Termination, or

such longer period as may be provided by the terms of the appropriate plan,

program, practice or policy, the Company shall continue to provide benefits to

the Executive and the Executive's family at least equal to those which would

have been provided to them if the Executive's employment had not been

terminated, in accordance with the applicable Benefit Plans in effect on the

Measurement Date or, if more favorable to the Executive and his family, in

effect generally at any time thereafter with respect to other peer executives of

the Company and its affiliated companies; provided, however, that if the

Executive becomes reemployed with another employer and is eligible to receive a

particular type of benefits (e.g., health insurance benefits) from such employer

on terms at least as favorable to the Executive and his family as those being

provided by the Company, then the Company shall no longer be required to provide

those particular benefits to the Executive and his family;

 

                        (iii) to the extent not previously paid or provided, the

Company shall timely pay or provide to the Executive any other amounts or

benefits required to be paid or

 

<PAGE>

 

provided or which the Executive is eligible to receive following the Executive's

termination of employment under any plan, program, policy, practice, contract or

agreement of the Company and its affiliated companies (such other amounts and

benefits shall be hereinafter referred to as the "Other Benefits"); and

 

                        (iv) for purposes of determining eligibility (but not

the time of commencement of benefits) of the Executive for retiree benefits to

which the Executive is entitled, the Executive shall be considered to have

remained employed by the Company until 12 months after the Date of Termination.

 

            4.3 Taxes.

 

                  (a) Notwithstanding any other provision of this Agreement, in

the event that the Company undergoes a Change in Ownership or Control (as

defined below), the Company shall not be obligated to provide to the Executive a

portion of any "Contingent Compensation Payments" (as defined below) that the

Executive would otherwise be entitled to receive to the extent necessary to

eliminate any "excess parachute payments" (as defined in Section 280G(b)(1) of

the Internal Revenue Code of 1986, as amended (the "Code")) for the Executive.

For purposes of this Section 4.3, the Contingent Compensation Payments so

eliminated shall be referred to as the "Eliminated Payments" and the aggregate

amount (determined in accordance with Proposed Treasury Regulation Section

1.280G-1, Q/A-30 or any successor provision) of the Contingent Compensation

Payments so eliminated shall be referred to as the "Eliminated Amount."

 

                  (b) For purposes of this Section 4.3, the following terms

shall have the following respective meanings:

 

                        (i) "Change in Ownership or Control" shall mean a change

in the ownership or effective control of the Company or in the ownership of a

substantial portion of the assets of the Company determined in accordance with

Section 280G(b)(2) of the Code.

 

                        (ii) "Contingent Compensation Payment" shall mean any

payment (or benefit) in the nature of compensation that is made or made

available (under this Agreement or otherwise) to a "disqualified individual" (as

defined in Section 280G(c) of the Code) and that is contingent (within the

meaning of Section 280G(b)(2)(A)(i) of the Code) on a Change in Ownership or

Control of the Company.

 

                  (c) Any payments or other benefits otherwise due to the

Executive following a Change in Ownership or Control that could reasonably be

characterized (as determined by the Company) as Contingent Compensation Payments

shall not be made until the determination, pursuant to this Section 4.3(c), of

which Contingent Compensation Payments shall be treated as Eliminated Payments.

Within 30 days after each date on which the Executive first becomes entitled to

receive (whether or not then due) a Contingent Compensation Payment relating to

such Change in Ownership or Control, the Company shall determine and notify the

Executive (with reasonable detail regarding the basis for its determinations)

(i) which of such payments and benefits constitute Contingent Compensation

Payments and (ii) the Eliminated Amount. Within 30 days after delivery of such

notice to the Executive, the Executive shall

 

<PAGE>

 

notify the Company which Contingent Compensation Payments, or portions thereof

(the aggregate amount of which, determined in accordance with Proposed Treasury

Regulation Section 1.280G-1, Q/A-30 or any successor provision, shall be equal

to the Eliminated Amount), shall be treated as Eliminated Payments. In the event

that the Executive fails to notify the Company pursuant to the preceding

sentence on or before the required date, the Contingent Compensation Payments

(or portions thereof) that shall be treated as Eliminated Payments shall be

determined by the Company in its absolute discretion. In no event shall the

Company be liable to the Executive as a result of any factual or legal

determination made by it pursuant to this subsection (c) or for any information

supplied by it to the Executive or his advisors.

 

                  (d) The provisions of this Section 4.3 are intended to apply

to any and all payments or benefits available to the Executive under this

Agreement or any other agreement or plan of the Company under which the

Executive receives Contingent Compensation Payments.

 

            4.4 Mitigation. The Executive shall not be required to mitigate the

amount of any payment or benefits provided for in this Section 4 by seeking

other employment or otherwise. Further, except as provided in Section

4.2(a)(ii), the amount of any payment or benefits provided for in this Section 4

shall not be reduced by any compensation earned by the Executive as a result of

employment by another employer, by retirement benefits, by offset against any

amount claimed to be owed by the Executive to the Company or otherwise.

 

            4.5 Outplacement Services. In the event the Executive is terminated

by the Company (other than for Cause, Disability or death), or the Executive

terminates employment for Good Reason, within 6 months following the Change in

Control Date, the Company shall provide outplacement services through one or

more outside firms of the Executive's choosing up to an aggregate of $20,000,

with such services to extend until the earlier of (i) 12 months following the

termination of Executive's employment or (ii) the date the Executive secures

full time employment.

 

      5. Disputes.

 

            5.1 Settlement of Disputes; Arbitration. All claims by the Executive

for benefits under this Agreement shall be directed to and determined by the

Board of Directors of the Company and shall be in writing. Any denial by the

Board of Directors of a claim for benefits under this Agreement shall be

delivered to the Executive in writing and shall set forth the specific reasons

for the denial and the specific provisions of this Agreement relied upon. The

Board of Directors shall afford a reasonable opportunity to the Executive for a

review of the decision denying a claim. Any further dispute or controversy

arising under or in connection with this Agreement shall be settled exclusively

by arbitration in New York, New York, in accordance with the rules of the

American Arbitration Association then in effect. Judgment may be entered on the

arbitrator's award in any court having jurisdiction.

 

            5.2 Expenses. The Company agrees to pay as incurred, to the full

extent permitted by law, all legal, accounting and other fees and expenses which

the Executive may reasonably incur as a result of any claim or contest

(regardless of the outcome thereof) by the Company, the Executive or others

regarding the validity or enforceability of, or liability under,

 

<PAGE>

 

any provision of this Agreement or any guarantee of performance thereof

(including as a result of any contest by the Executive regarding the amount of

any payment or benefits pursuant to this Agreement), plus in each case interest

on any delayed payment at the applicable Federal rate provided for in Section

7872(f)(2)(A) of the Code.

 

      6. Successors.

 

            6.1 Successor to Company. The Company shall require any successor

(whether direct or indirect, by purchase, merger, consolidation or otherwise) to

all or substantially all of the business or assets of the Company expressly to

assume and agree to perform this Agreement to the same extent that the Company

would be required to perform it if no such succession had taken place. Failure

of the Company to obtain an assumption of this Agreement at or prior to the

effectiveness of any succession shall be a breach of this Agreement and shall

constitute Good Reason if the Executive elects to terminate employment, except

that for purposes of implementing the foregoing, the date on which any such

succession becomes effective shall be deemed the Date of Termination. As used in

this Agreement, "Company" shall mean the Company as defined above and any

successor to its business or assets as aforesaid which assumes and agrees to

perform this Agreement, by operation of law or otherwise.

 

            6.2 Successor to Executive. This Agreement shall inure to the

benefit of and be enforceable by the Executive's personal or legal

representatives, executors, administrators, successors, heirs, distributees,

devisees and legatees. If the Executive should die while any amount would still

be payable to the Executive or his family hereunder if the Executive had

continued to live, all such amounts, unless otherwise provided herein, shall be

paid in accordance with the terms of this Agreement to the executors, personal

representatives or administrators of the Executive's estate.

 

      7. Notice. All notices, instructions and other communications given

hereunder or in connection herewith shall be in writing. Any such notice,

instruction or communication shall be sent either (i) by registered or certified

mail, return receipt requested, postage prepaid, or (ii) prepaid via a reputable

nationwide overnight courier service, in each case addressed to the Company, at

Arlington Tankers Ltd., The Hayward Building, 22 Bermudiana Road, Hamilton HM

11, Bermuda, and to the Executive at the Executive's address indicated on the

signature page of this Agreement (or to such other address as either the Company

or the Executive may have furnished to the other in writing in accordance

herewith). Any such notice, instruction or communication shall be deemed to have

been delivered five business days after it is sent by registered or certified

mail, return receipt requested, postage prepaid, or one business day after it is

sent via a reputable nationwide overnight courier service. Either party may give

any notice, instruction or other communication hereunder using any other means,

but no such notice, instruction or other communication shall be deemed to have

been duly delivered unless and until it actually is received by the party for

whom it is intended.

 

      8. Miscellaneous.

 

            8.1 Employment by Subsidiary. For purposes of this Agreement, the

Executive's employment with the Company shall not be deemed to have terminated

solely as a

 

<PAGE>

 

result of the Executive continuing to be employed by a wholly-owned subsidiary

of the Company.

 

            8.2 Severability. The invalidity or unenforceability of any

provision of this Agreement shall not affect the validity or enforceability of

any other provision of this Agreement, which shall remain in full force and

effect.

 

            8.3 Injunctive Relief. The Company and the Executive agree that any

breach of this Agreement by the Company is likely to cause the Executive

substantial and irrevocable damage and therefore, in the event of any such

breach, in addition to such other remedies which may be available, the Executive

shall have the right to specific performance and injunctive relief.

 

            8.4 Governing Law. The validity, interpretation, construction and

performance of this Agreement shall be governed by the internal laws of the

State of New York, without regard to conflicts of law principles.

 

            8.5 Waivers. No waiver by the Executive at any time of any breach

of, or compliance with, any provision of this Agreement to be performed by the

Company shall be deemed a waiver of that or any other provision at any

subsequent time.

 

            8.6 Counterparts. This Agreement may be executed in counterparts,

each of which shall be deemed to be an original but both of which together shall

constitute one and the same instrument.

 

            8.7 Tax Withholding. Any payments provided for hereunder shall be

paid net of any applicable tax withholding required under federal, state or

local law.

 

            8.8 Entire Agreement. This Agreement sets forth the entire agreement

of the parties hereto in respect of the subject matter contained herein and

supersedes all prior agreements, promises, covenants, arrangements,

communications, representations or warranties, whether oral or written, by any

officer, employee or representative of any party hereto in respect of the

subject matter contained herein; and any prior agreement of the parties hereto

in respect of the subject matter contained herein is hereby terminated and

cancelled.

 

            8.9 Amendments. This Agreement may be amended or modified only by a

written instrument executed by both the Company and the Executive.

 

            8.10 Executive's Acknowledgements. The Executive acknowledges that

he: (a) has read this Agreement; (b) has been represented in the preparation,

negotiation, and execution of this Agreement by legal counsel of the Executive's

own choice or has voluntarily declined to seek such counsel; (c) understands the

terms and consequences of this Agreement; and (d) understands that the law firm

of Wilmer Cutler Pickering Hale and Dorr LLP is acting as counsel to the Company

in connection with the transactions contemplated by this Agreement, and is not

acting as counsel for the Executive.

 

<PAGE>

 

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of

the day and year first set forth above.

 

                                            ARLINGTON TANKERS LTD.

 

                                            /s/ STEPHEN JAEGER

                                            Title: Director

 

 

                                            ARTHUR L. REGAN

 

                                            /s/ ARTHUR L. REGAN