EXHIBIT 10.29




EMPLOYMENT AGREEMENT


 


This AGREEMENT, dated
as of February 13, 2015 (the “Agreement”), between Overseas Shipholding Group, Inc., a Delaware Corporation
(the “Company”), and James D. Small III (the “Executive”).


 


WHEREAS, the Company
and the Executive mutually desire that the Executive serve as Senior Vice President (“SVP”), Secretary and General
Counsel (“GC”) of the Company 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 SVP, Secretary and GC, 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 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 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 SVP, Secretary and GC commencing on March 2, 2015 or such later date as may reasonably be required by Executive’s current
employer (such date, 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 $475,000 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, but not decrease, 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 150% of Base Salary (the “Target Bonus”).
The actual Annual Bonus shall be equal to the sum of (i) 50% of the product of (w) the Target Bonus and (x) a percentage, calculated
on a range of zero up to a maximum of 120%, corresponding to the Executive’s achievement of annual individual performance
objectives and (ii) 50% of the product of (y) the Target Bonus and (z) a percentage, calculated on a range of zero up to a maximum
of 130%, corresponding to the Executive’s achievement of Company annual performance objectives, in all cases such objectives
as established by the CEO, subject to the Executive’s employment with the Company through the applicable payment date for
any such Annual Bonus. For fiscal year 2015, the Annual Bonus period will begin as of January 1, 2015. For fiscal year 2016, the
Annual Bonus will be guaranteed to be paid at an amount not less than $150,000. 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)   Sign-on
Bonus


 


In addition to the Base Salary
and Annual Bonus, the Company shall pay the Executive an additional lump sum cash payment of One Hundred Fifty Thousand Dollars
($150,000) (the Sign-on Bonus”) for the execution of this Agreement within 30 days of the Effective Date of the Executive’s
employment with the Company.


 




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(d)   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 (the “Plan”) and in the grant agreement evidencing such
grants, except as in accordance as provided for in Section 6(a) hereof. In the event of any change in the number of shares of Common
Stock outstanding by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of
shares or similar corporate change, the awards will be adjusted in a manner consistent with adjustments made generally to similar
awards under the Plan held by senior executives of the Company. The initial grant, upon execution of a Stock Option Grant Agreement
(the “Option Agreement”) and Restricted Stock Unit Grant Agreements (time-based and performance-based) (the “RSU
Agreements”) as soon as practicable following the Effective Date, will be $1,500,000, one-third as stock options, one-third
as time-based restricted stock units and one-third as performance-based restricted stock units. Vesting will be over a three year
period, in equal one-third portions, as outlined in the individual equity agreements. For calendar year 2016, the Company shall
recommend to the Board for approval an equity incentive award with a value (determined in good faith by the Company) equal to $600,000
(or an equivalent cash award), one-third as stock options, one-third as time-based restricted stock units and one-third as performance-based
restricted stock units. Vesting will be over a three year period, in equal one-third portions, as outlined in the individual equity
agreements.


 


(e)   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.


 


(f)   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).


 


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.


 




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(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.


 




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(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 lawful 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 materially injurious
to the Company, or any of its affiliates (whether financially, reputationally or otherwise) (“Injurious”); (iii) a
breach by the Executive of the Executive’s fiduciary duty or duty of loyalty to the Company or its affiliates which is or
could reasonably be expected to be Injurious; (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 is not pursuant to his lawful duties and 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 which is or could reasonably be expected to
be Injurious, 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 for, 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 either (A)
the employment relationship between Company or any of its affiliates and the Executive or (B) 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 material 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 thirty (30) days following the Company’s delivery of such notice.


 


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


 


The Company may terminate
the Executive’s employment without Cause, and the Executive may voluntarily terminate his employment, other than for Good
Reason, provided that the Executive provides the Company, or the Company provides the Executive, with notice of the 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.


 




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(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 or (ii) a material reduction in either his title as set forth in Section 1 or in his duties associated with such
title, (iii) a relocation of the New York Office to more than 50 miles from the current location or the Executive’s current
residence, or a reassignment of Executive’s place of work from the New York Office to another office located more than 50
miles from the current 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.


 


(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; (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; (v) if the Separation from Service occurs due to the Company’s
termination for Cause, the date of the termination in accordance with Section 4(c) hereof; and (vi) 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.


 




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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), (C), and (D) 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 (as defined below) 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”).


 


(D)         Vesting
of Equity Awards. Notwithstanding anything to the contrary contact in any relevant equity grand agreement, all Option Shares
and RSUs (and any other equity based grants or cash in lieu of grants) granted to the Executive, to the extent not otherwise vested,
shall be vested as of the Date of Separation from Service in the event of termination of the Executive without Cause or by the
Executive for Good Reason, death or Disability (the “Accelerated Vesting”).


 




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(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, the Separation Payment, the Accelerated Vesting and the Pro-Rata
Bonus 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.


 




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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.


 


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 himself 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 International Crude and Product, LNG and FSO business, and the US Flag Crude and Product 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.


 




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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.


 




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(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.


 


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.


 




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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: Chief Executive Officer


 


with a copy to:


 


Arthur Kohn


Cleary Gottlieb Steen & Hamilton
LLP


One Liberty Plaza


 




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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, the Option Agreement, and RSU Agreements, 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.


 


(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.


 




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(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 13(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.


 


(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.


 




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* * * * *


 


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


 


	 	James D. Small III
	 	 
	 	/s/James D. Small III
	 	Name: James D. Small III
	 	 
	 	Overseas Shipholding Group, Inc.
	 	 
	 	/s/Ian T. Blackley
	 	Name: Ian T. Blackley
	 	Title: President and CEO


 




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