Exhibit 10.14

 

EMPLOYMENT AGREEMENT

 

This AGREEMENT, dated as of September 29, 2014 (the “Agreement”), between
Overseas Shipholding Group, Inc. (the “Company”) and Henry P. Flinter (the
“Executive”).

 

WHEREAS, the Company and the Executive mutually desire that the Executive serve
as Co-President of the Company and Head of US Flag SBU on the terms and
conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and
for other good and valuable consideration, the parties agree as follows:

 

1.Position and Duties

 

(a)          The Company hereby agrees to employ the Executive as Co-President
of the Company and Head of US Flag SBU, and the Executive hereby accepts such
position and agrees to serve the Company in such capacity during the Term, as
defined in Section 2 hereof. The Executive shall have such duties and
responsibilities as may be assigned by the Company from time to time in
accordance with the terms hereof. The Executive shall be subject to, and shall
act in accordance with, all lawful instructions and directions of the CEO and
Board of Directors of the Company (the “Board”) and all policies and rules of
the Company applicable to executive officers. The Executive shall report to the
Chairman of the Board, or the CEO..

 

(b)          During the Term, excluding any periods of vacation and sick leave
to which the Executive is entitled, the Executive shall devote his full working
time, energy and attention to the performance of his duties and responsibilities
hereunder and shall diligently endeavor to promote the business and best
interests of the Company. Notwithstanding the foregoing, to the extent that it
does not interfere with the performance of Executive’s duties hereunder,
Executive may (i) with the prior consent of the CEO and the Board, serve on the
boards of directors or equivalent bodies of trade associations and/or charitable
organizations; (ii) engage in charitable activities and community affairs; and
(iii) manage his personal, financial and legal affairs.

 

2.Term

 

The Executive shall serve as Co-President of the Company and Head of US Flag SBU
commencing on September 29, 2014 (the “Effective Date”) and shall continue until
terminated (such period, the “Term”) upon his “Separation from Service” with the
Company in connection with any of the events described in Section 4 hereof.

 

 

 

 

3.Compensation

 

(a)Base Salary

 

As compensation for the agreements made by the Executive herein and the
performance by the Executive of his obligations hereunder, the Company shall pay
the Executive a base salary at the rate of $385,000 per annum (the “Base
Salary”), payable in accordance with the Company’s payroll practice as in effect
from time to time and subject to annual review and possible increase as
determined by the Board in its discretion.

 

(b)Annual Bonus

 

In addition to the Base Salary, with respect to each fiscal year of the Company
during the Term the Executive shall be eligible to earn an annual bonus (the
“Annual Bonus”), with a target Annual Bonus of 125% of Base Salary (the “Target
Bonus”). Actual Annual Bonuses may range from zero up to a maximum of 130% of
Target Bonus, based on the achievement of annual individual and Company
performance objectives established by the Board, subject to the Executive’s
employment with the Company through the applicable payment date for any such
Annual Bonus. Notwithstanding anything to the contrary herein, the Annual Bonus
shall be paid no later than the 15th day of the third month following the close
of the fiscal year to which the Annual Bonus relates.

 

(c)Annual Equity Grants

 

During the term of employment, the Executive may periodically be recommended to
receive equity grants in the form of nonstatutory stock options, restricted
stock, restricted stock units, or performance stock units, subject to the
Board’s approval and further subject to NYSE or other rules and regulations
related to the timing of grants. Any such grants will be subject to terms and
conditions approved by the Board upon the recommendation of the Compensation
Committee. The specific terms and conditions governing all aspects of any such
grants shall be set forth in the Company equity incentive plan and in the grant
agreement evidencing such grants.

 

(d)Reimbursement of Expenses

 

During the Term, the Company shall reimburse the Executive for all business
expenses incurred by the Executive in performing his duties and responsibilities
under this Agreement (“Business Expenses”), in accordance and to the extent
consistent with the Company’s policies for reimbursement of business expenses
incurred by other Company senior executive officers.

 

(e)Other Benefits

 

During the Term, for so long as the Executive meets the eligibility requirements
of the applicable plan, policy or program: (i) except as specifically provided
herein, the Executive shall be entitled to participate in all savings and
retirement plans, policies and programs of the Company which are made available
generally to other executive officers of the Company and (ii) except as
specifically provided herein, the Executive and/or the Executive’s immediate
family including children up to 26 years of age, as the case may be, shall be
entitled to participate in, and shall receive all benefits under, all welfare
benefit plans, policies and programs (including the Company’s health insurance
and disability plans) provided by the Company which are made available to other
executive officers of the Company (for the avoidance of doubt, such plans,
policies or programs shall not include any plan, policy or program which
provides benefits in the nature of severance or continuation pay).

 

2

 

 

4.Separation from Service

 

(a)Death

 

The Executive shall separate from service with the Company, and the Term shall
terminate, upon the Executive’s death.

 

(b)Disability

 

The Executive shall separate from service with the Company, if, as a result of
the Executive’s incapacity due to physical or mental illness or injury, the
Executive (i) shall become eligible to receive a benefit under the Company’s
long-term disability plan applicable to the Executive, or (ii) has been unable,
due to physical or mental illness or incapacity, to perform the essential duties
of his employment with reasonable accommodation for a continuous period of
ninety (90) days or an aggregate of one hundred-eighty (180) days within a
one-year period (“Disability”). The termination of the Executive’s employment
for Disability shall not be considered a termination without Cause for purposes
of this Agreement.

 

(c)Cause

 

The Company may terminate the Executive’s employment for Cause, and upon such
termination the Executive shall separate from service with the Company. For
purposes of this Agreement, the term “Cause” shall mean, when used in connection
with the Executive’s Separation from Service with the Company: (i) the
Executive’s failure to attempt in good faith to perform his duties (other than
as a result of Disability); (ii) the Executive’s willful misconduct or gross
negligence of a material nature in connection with the performance of his duties
as an employee, which is or could reasonably be expected to be injurious to the
Company, or any of its affiliates (whether financially, reputationally or
otherwise); (iii) a breach by the Executive of the Executive’s fiduciary duty or
duty of loyalty to the Company or its affiliates; (iv) the Executive’s
intentional and unauthorized removal, use or disclosure of the Company’s or any
affiliate’s document (in any medium or form) relating to the Company or an
affiliate, or the customers of the Company or an affiliate thereof and which may
be injurious to the Company, its customers or their respective affiliates; (v)
the willful performance by the Executive of any act or acts of dishonesty in
connection with or relating to the Company’s or its affiliates’ business or the
willful misappropriation (or willful attempted misappropriation) of any of the
Company’s or any of its affiliates’ funds or property; (vi) the indictment of
the Executive or a plea of guilty or nolo contendere by the Executive to any
felony or other serious crime involving moral turpitude; (vii) a material breach
of any of the Executive’s obligations under any agreement entered into between
the Executive and the Company or any of its affiliates that is material to the
employment relationship between Company or any of its affiliates and the
Executive or the relationship between the Company and the Executive as investor
or prospective investor in the Company; or (viii) a material breach of the
Company’s policies or procedures, which breach causes or could reasonably be
expected to cause harm to the Company or its business reputation; provided that,
with respect to the events in clauses (i), (ii), (iv) or (vii) herein, the
Company shall have delivered written notice to the Executive of its intention to
terminate the Executive’s employment for Cause, which notice specifies in
reasonable detail the circumstances claimed to give rise to the Company’s right
to terminate the Executive’s employment for Cause and the Executive shall not
have cured such circumstances, to the extent such circumstances are reasonably
susceptible to cure as determined by the Board in good faith, within ten (10)
days following the Company’s delivery of such notice.

 

3

 

 

(d)Without Cause or Voluntarily (Other Than for Good Reason)

 

The Company may terminate the Executive’s employment without Cause. The
Executive may voluntarily terminate his employment, other than for Good Reason,
provided that the Executive provides the Company with notice of his intent to
terminate his employment at least sixty (60) days in advance of the Date of
Separation from Service (as defined below). Upon such termination, in each case,
the Executive shall separate from service with the Company.

 

(e)Good Reason

 

The Executive may terminate his employment and separate from service with the
Company for Good Reason. For purposes of this Agreement, the term “Good Reason”
shall mean, when used in connection with the Executive’s Separation from Service
with the Company, unless the Executive shall have consented in writing thereto,
(i) a material diminution in the Executive’s Base Salary and Target Bonus
percentage, ,(ii) change in title as President of the US Flag business unit,
(iii) a relocation of the Tampa office more than 50 miles from its existing
location or the Executive’s current residence, or (iv) any other action or
inaction that constitutes a material breach of this Agreement by the Company;
provided, in each case, that within thirty (30) days following the initial
occurrence of any of the events set forth herein, the Executive shall have
delivered written notice to the Company of his intention to terminate his
employment for Good Reason, which notice specifies in reasonable detail the
circumstances claimed to give rise to the Executive’s right to terminate
employment for Good Reason, the Company shall not have cured such circumstances
within thirty (30) days following the Company’s receipt of such notice, and the
Executive’s Separation from Service with the Company shall have occurred within
seventy (70) days following the initial occurrence of the applicable event.

 

5.Procedure for Separation from Service

 

(a)          Notice of Separation from Service. Any separation of the Executive
from service with the Company (other than a separation from service on account
of the death of Executive) shall be communicated by written “Notice of
Separation from Service” to the other party hereto in accordance with Section
13(a) hereof.

 

4

 

 

(b)          Date of Separation from Service. The Date of Separation from
Service shall mean: (i) if the Separation from Service occurs due to the
Executive’s death, the date of the Executive’s death; (ii) if the Separation
from Service occurs pursuant to Section 4(b), the date on which the Executive
receives a Notice of Separation from Service from the Company; (iii) if the
Separation from Service occurs due to the Executive’s voluntary termination
without Good Reason, the date specified in the notice given pursuant to Section
4(d) hereof, which shall not be less than thirty (30) days after the Notice of
Separation from Service; (iv) if the Separation from Service occurs due to the
Executive’s termination with Good Reason, the date of his termination in
accordance with Section 4(e) hereof; and (v) if the Separation from Service
occurs for any other reason, the date on which a Notice of Separation from
Service is given or any later date (within thirty (30) days, or any alternative
time period agreed upon by the parties, after the giving of such notice) set
forth in such Notice of Separation from Service.

 

6.Separation Payments

 

(a)Without Cause or for Good Reason

 

In the event of the Executive’s Separation from Service due to termination by
the Company without Cause or by the Executive for Good Reason, the Company shall
pay to the Executive the amounts described in paragraphs (A), (B) and (C) below
at the times specified below, and, except for (x) any vested benefits under any
tax-qualified pension plans of the Company and (y) continuation of health
insurance benefits on the terms and to the extent required by COBRA or such
other analogous legislation as may be applicable to the Executive, the Company
shall have no additional obligations under this Agreement.

 

(A)         Accrued Payments. Within thirty (30) days following the Date of
Separation from Service, (w) any Base Salary earned by the Executive but not
paid through the Date of Separation from Service; (x) any Annual Bonus earned by
the Executive but not paid through the Date of Separation from Service; (y) the
Executive’s accrued but unused vacation pay through the Date of Separation from
Service; and (z) any Business Expenses not reimbursed as of the Date of
Separation from Service (the amounts described in (w) through (z), together, the
“Accrued Payments”).

 

(B)         Salary Continuation. Salary continuation payments paid in accordance
with the Company’s standard payroll practices at the same rate as the
Executive’s then-current annual Base Salary for a period of 24 months measured
from the day of the Executive’s Date of Separation from Service (such period,
the “Severance Period” and such payments, the “Salary Continuation Payments”),
provided that the initial Salary Continuation Payment shall be made on the first
payroll date following the expiration of the Release Period and shall include
the Salary Continuation payments that would have been otherwise due prior
thereto.

 

(C)         Bonus Payment. In a single lump sum within 30 days following the
Date of Separation from Service, an amount equal to the Target Bonus as in
effect for the year in which the Date of Separation from Service occurs (such
lump sum, the “Separation Payment”).

 

5

 

 

(b)Cause or Voluntarily (other than for Good Reason).

 

In the event of the Executive’s Separation from Service with the Company due to
a termination of the Executive’s employment by the Company for Cause or
voluntarily by the Executive other than for Good Reason, the Company shall pay
the Executive the Accrued Payments within thirty (30) days following the Date of
Separation from Service. Except as provided in this Section 6(b), and except for
any vested benefits under any tax qualified pension or equity incentive
compensation plans of the Company, and continuation of health insurance benefits
on the terms and to the extent required by COBRA or any other analogous
legislation as may be applicable to the Executive, the Company shall have no
additional obligations under this Agreement.

 

(c)Disability or Death.

 

In the event of the Executive’s Separation from Service with the Company as a
result of the Executive’s death or Disability, the Company shall pay the
Executive or the Executive’s estate, as the case may be, within thirty (30) days
following the Date of Separation from Service, the Accrued Payments. Except as
provided in this Section 6(c), and except for any vested benefits under any tax
qualified pension or equity incentive compensation plans of the Company, and
continuation of health insurance benefits on the terms and to the extent
required by COBRA or any other analogous legislation as may be applicable to the
Executive, the Company shall have no additional obligations under this
Agreement.

 

(d)Release

 

Notwithstanding anything to the contrary in this Agreement, the Salary
Continuation Payments and the Separation Payment (together, the “Severance
Benefits”) shall be paid to the Executive subject to the condition that (i) the
Executive has delivered to the Company an executed copy of a waiver and general
release of claims (the “Release”) in a form acceptable to the Company, and that
such Release has become effective, enforceable and irrevocable in accordance
with its terms, not later than 30 days after the Date of Separation from Service
and (ii) the Executive complies with the covenants set forth in Section 8 of
this Agreement (the “Restrictive Covenants”). In the event that the thirtieth
day after the Date of Separation from Service occurs in the calendar year
following the year that includes the Date of Separation from Service, no
Severance Benefits that constitute deferred compensation subject to Section 409A
of the Internal Revenue Code shall be paid until the first day of the calendar
year following the year that includes the Date of Separation from Service, and
any Severance Benefits that would otherwise have been paid prior to such date
shall be paid as soon as practical after such date.

 

7.No Mitigation

 

Except as expressly provided herein, the Executive shall not be required to seek
other employment or otherwise mitigate the amount of any payments to be made by
the Company pursuant to this Agreement. Except as otherwise provided herein, the
payments provided pursuant to this Agreement shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer after the termination of the Executive’s employment or otherwise. The
Company’s obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others.

 

6

 

 

8.Restrictive Covenants

 

(a)    Non-Solicitation. During the Term and for 24 months thereafter, the
Executive hereby agrees not to, directly or indirectly, solicit or hire or
assist any other person or entity in soliciting or hiring any employee of the
Company or any of its affiliates to perform services for any entity (other than
the Company or any of its affiliates), or attempt to induce any such employee to
leave the employ of the Company or any of its affiliates, or interfere in any
manner with any such employee’s relationship with the Company or any of its
affiliates, or solicit, hire or engage on behalf of herself or any other Person
(as defined below) any employee of the Company or any of its affiliates or
anyone who was employed by the Company or any of its affiliates during the
six-month period preceding such hiring or engagement. Notwithstanding the
foregoing, the provisions of this Section 8 shall not be violated by (i) the
Executive’s good faith performance of duties during the Term or (ii) an
individual’s response to a broad and general advertisement or solicitation not
specifically targeting or intending to target employees of the Company or any of
its affiliates.

 

(b)    Confidentiality; Non-Competition; Non-Disclosure. The Executive hereby
agrees that, during the Term and thereafter, except in the furtherance of the
Executive’s good faith performance of duties hereunder, he will hold in strict
confidence any proprietary or Confidential Information related to the Company or
any of its affiliates. For purposes of this Agreement, the term “Confidential
Information” shall mean all information of the Company or any of its affiliates
(in whatever form) which is not generally known to the public, including without
limitation any inventions, processes, methods of distribution, customer lists or
customers’ or trade secrets, provided that Confidential Information shall not
include information the Executive is required to disclose by applicable law,
regulation or legal process so long as the Executive notifies the Company
promptly (it being understood that “promptly” shall mean “prior to” unless prior
notice is not possible, in which case “promptly” shall mean as soon as
practicable following) of the Executive’s obligation to disclose Confidential
Information by applicable law, regulation or legal process and cooperates with
the Company to limit the extent of such disclosure. The Executive and the
Company agree that the Company would likely suffer significant harm from the
Executive’s competing with the Company during the Term and for some period of
time thereafter. Accordingly, the Executive agrees that he will not, during the
Term and for a period of 18 months following the Date of Separation from
Service, directly or indirectly, become employed by, engage in business with,
serve as an agent or consultant to, become a partner, member, principal,
stockholder or other owner (other than a holder of less than 1% of the
outstanding voting shares of any publicly held company) of, any Person
competitive with, or otherwise perform services relating to, the Jones Act
business of the Company or its affiliates at the time of the termination (the
“Business”) for any Person (whether or not for compensation) (“Competing”). For
purposes of this Agreement, the term “Person” shall mean any individual,
partnership, corporation, limited liability company, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.

 

7

 

 

9.Injunctive Relief

 

It is impossible to measure in money the damages that will accrue to the Company
or any of its affiliates in the event that the Executive breaches any of the
Restrictive Covenants. In the event that the Executive breaches any such
Restrictive Covenant, the Company or any of its affiliates shall be entitled to
an injunction restraining the Executive from violating such Restrictive Covenant
(without posting any bond). If the Company or any of its affiliates shall
institute any action or proceeding to enforce any such Restrictive Covenant, the
Executive hereby waives the claim or defense that the Company or any of its
affiliates has an adequate remedy at law and agrees not to assert in any such
action or proceeding the claim or defense that the Company or any of its
affiliates has an adequate remedy at law. The foregoing shall not prejudice the
Company’s or any of its affiliates’ right to require the Executive to account
for and pay over to the Company or any of its affiliates, and the Executive
hereby agrees to account for and pay over, the compensation, profits, monies,
accruals or other benefits derived or received by the Executive as a result of
any transaction constituting a breach of any of the Restrictive Covenants.

 

10.Arbitration

 

(a)          Any dispute, claim or controversy arising under or in connection
with this Agreement or the Executive’s employment hereunder or the termination
thereof, other than injunctive relief under Section 9 hereof, shall be settled
exclusively by arbitration administered by the American Arbitration Association
(the “AAA”) and carried out in the State of New York. The arbitration shall be
conducted in accordance with the AAA rules governing commercial arbitration in
effect at the time of the arbitration, except as modified herein. There shall be
three arbitrators, one of whom shall be nominated by the Company and one who
shall be nominated by the Executive within thirty (30) days of receipt by
respondent of the demand for arbitration, and the third arbitrator, who shall
chair the arbitral tribunal, shall be nominated by the party nominated
arbitrators within thirty (30) days of the nomination of the second arbitrator.
If any arbitrator is not appointed within the time limit provided herein, upon
request of any party to the arbitration, such arbitrator shall be appointed by
the AAA within fifteen (15) days of receiving such request.

 

(b)          The arbitration shall commence within forty-five (45) days after
the appointment of the third arbitrator; the arbitration shall be completed
within sixty (60) days of commencement; and the arbitrators’ award shall be made
within thirty (30) days following such completion. The parties may agree to
extend the time limits specified in the foregoing sentence.

 

(c)          The arbitral tribunal may award any form of relief permitted under
this Agreement and applicable law, including damages and temporary or permanent
injunctive relief, except that the arbitral tribunal is not empowered to award
damages in excess of compensatory damages, and each party hereby irrevocably
waives any right to recover punitive, exemplary or similar damages with respect
to any dispute. The award shall be in writing and shall state the reasons for
the award.

 

(d)          The decision rendered by the arbitral tribunal shall be final and
binding on the parties to this Agreement. Judgment may be entered in any court
of competent jurisdiction. The parties hereto waive, to the fullest extent
permitted by law, any rights to appeal to, or to seek review of such award by,
any court. The parties hereto further agree to obtain the arbitral tribunal’s
agreement to preserve the confidentiality of the arbitration.

 

8

 

 

11.Section 409A

 

(a)          The intent of the parties is that payments and benefits under this
Agreement comply with Section 409A of the Internal Revenue Code of 1986 as
amended (“the Code”) and the regulations and guidance promulgated thereunder
(except to the extent exempt as short-term deferrals or otherwise) and,
accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be in compliance therewith. A termination of employment shall not
be deemed to have occurred for purposes of any provision of this Agreement
providing for the payment of any amounts or benefits subject to Section 409A of
the Code upon or following a termination of employment unless such termination
is also a “separation from service” within the meaning of Section 409A of the
Code and, for purposes of any such provision of this Agreement, references to a
“termination,” “termination of employment,” or like terms shall mean “separation
from service.” The determination of whether and when a separation from service
has occurred shall be made in a manner consistent with, and based on the
presumptions set forth in, US Treasury Regulation Section 1.409A-1(h) or any
successor provision thereto. It is intended that each installment, if any, of
the payments and benefits provided hereunder shall be treated as a separate
“payment” for purposes of Section 409A of the Code. Neither the Company nor the
Executive shall have the right to accelerate or defer the delivery of any such
payments or benefits except to the extent specifically permitted or required by
Section 409A of the Code. All reimbursements and in-kind benefits provided under
this Agreement or otherwise to the Executive shall be made or provided in
accordance with the requirements of Section 409A of the Code to the extent that
such reimbursements or in-kind benefits are subject to Section 409A of the Code.
All expenses or other reimbursements paid pursuant herewith and therewith that
are taxable income to the Executive shall in no event be paid later than the end
of the calendar year next following the calendar year in which the Executive
incurs such expense or pays such related tax. With regard to any provision
herein that provides for reimbursement of costs and expenses or in-kind
benefits, except as permitted by Section 409A of the Code, the right to
reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit, the amount of expenses eligible for reimbursement,
or in-kind benefits provided, during any taxable year shall not affect the
expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other taxable year, provided that, the foregoing clause shall not be violated
with regard to expenses reimbursed under any arrangement covered by Section
105(b) of the Code solely because such expenses are subject to a limit related
to the period the arrangement is in effect and such payments shall be made on or
before the last day of the Executive’s taxable year following the taxable year
in which the expense occurred. In no event shall the Company be required to pay
Executive any “gross-up” or other payment with respect to any taxes or penalties
imposed under Section 409A of the Code with respect to any benefit paid or
promised to Executive hereunder. In the event that at the time of a separation
from service the Executive is a “specified employee” as defined by Section 409A,
no amount payable to the Executive by reason of such separation from service
that constitutes deferred compensation subject to Section 409A shall be paid
until the earlier of the first day of the seventh month following the month that
includes the separation from service, or the date of the Executive’s death, and
any amount that would otherwise have been paid prior to such date shall be paid
as soon as practical following such date, in a lump sum without interest.

 

9

 

 

12.Nondisparagement

 

Both during the Term and at all times thereafter, regardless of the reason for
termination, the Executive shall not disparage the Company or its affiliates,
and the Company shall not, and shall use reasonable efforts to not permit the
members of the Board and the senior executives of the Company to disparage the
Executive, provided that nothing in this Section 12 shall limit the right of any
person to respond truthfully to any inquiry arising from any legal proceeding.

 

13.Miscellaneous

 

(a)          Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and shall be deemed to be
given when delivered personally or four days after it is mailed by registered or
certified mail, postage prepaid, return receipt requested or one day after it is
sent by a reputable overnight courier service and, in each case, addressed as
follows (or if it is sent through any other method agreed upon by the parties):

 

If to the Company:

 

Overseas Shipholding Group, Inc.

1301 Avenue of the Americas, 42nd Floor

New York, NY 10019

 

Attn: Chairman of the Board

 

with a copy to:

 

Arthur Kohn

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

 

If to the Executive:

 

At such address on file with the Company

 

or to such other address as any party hereto may designate by notice to the
others.

 

(b)          This Agreement shall constitute the entire agreement among the
parties hereto with respect to the Executive’s employment hereunder, and
supersedes and is in full substitution for any and all prior understandings or
agreements with respect to the Executive’s employment, including, but not
limited to, any understandings or agreements under the Overseas Shipholding
Group, Inc. Severance Plan.

 

10

 

 

(c)          This Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party or parties against whom or which
enforcement of such waiver is sought. The failure of any party hereto at any
time to require the performance by any other party hereto of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by any party hereto of a breach of any
provision hereof be taken or held to be a waiver of any succeeding breach of
such provision or a waiver of the provision itself or a waiver of any other
provision of this Agreement.

 

(d)          The parties hereto acknowledge and agree that each party has
reviewed and negotiated the terms and provisions of this Agreement and has had
the opportunity to contribute to its revision. Accordingly, the rule of
construction to the effect that ambiguities are resolved against the drafting
party shall not be employed in the interpretation of this Agreement. Rather, the
terms of this Agreement shall be construed fairly as to both parties hereto and
not in favor or against either party.

 

(e)          The parties hereto hereby represent that they each have the
authority to enter into this Agreement, and the Executive hereby represents to
the Company that the execution of, and performance of duties under, this
Agreement shall not constitute a breach of or otherwise violate any other
agreement to which the Executive is a party. The Executive hereby further
represents to the Company that he will not utilize or disclose any confidential
information obtained by the Executive in connection with any former employment
with respect to his duties and responsibilities hereunder.

 

(f)          This Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, assigns, heirs, executors,
administrators and other legal representatives. Neither this Agreement nor any
right or obligation hereunder may be assigned by the Executive.

 

(g)          The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume this
Agreement in the same manner and to the same extent that the Company would have
been required to perform it if no such succession had taken place. As used in
the Agreement, “the Company” shall mean both the Company as defined above and
any such successor that assumes this Agreement, by operation of law or
otherwise.

 

(h)          Any provision of this Agreement (or portion thereof) which is
deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction and subject to this Section 14(h), be ineffective to the extent of
such invalidity, illegality or unenforceability, without affecting in any way
the remaining provisions thereof in such jurisdiction or rendering that or any
other provisions of this Agreement invalid, illegal, or unenforceable in any
other jurisdiction. If any covenant should be deemed invalid, illegal or
unenforceable because its scope is considered excessive, such covenant shall be
modified so that the scope of the covenant is reduced only to the minimum extent
necessary to render the modified covenant valid, legal and enforceable. No
waiver of any provision or violation of this Agreement by the Company shall be
implied by the Company’s forbearance or failure to take action.

 

11

 

 

(i)          The Company may withhold from any amounts payable to the Executive
hereunder all federal, state, city or other taxes that the Company may
reasonably determine are required to be withheld pursuant to any applicable law
or regulation, (it being understood that the Executive shall be responsible for
payment of all taxes in respect of the payments and benefits provided herein).

 

(j)          This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without reference to its principles of
conflicts of law.

 

(k)          This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument. A facsimile of a signature shall be deemed to be and have the
effect of an original signature.

 

(l)          The headings in this Agreement are inserted for convenience of
reference only and shall not be a part of or control or affect the meaning of
any provision hereof.

 

* * * * *

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

            /s/ Henry P. Flinter     Name: Henry P. Flinter           Overseas
Shipholding Group, Inc.           /s/ John J. Ray, III     Name: John J. Ray,
III     Title: Chairman of the Board  

 

12