Exhibit 10.5


 


EMPLOYMENT AGREEMENT


 


This AGREEMENT, dated
as of July 17, 2016 (the “Agreement”), between Overseas Shipholding Group, Inc. (the “Company”)
and Samuel H. Norton (the “Executive”).


 


WHEREAS, the Company
and the Executive mutually desire that the Executive serve as Senior Vice President of the Company and President and Chief Executive
Officer of the U.S. Flag Strategic Business Unit 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 Senior Vice President of the Company and President and Chief Executive Officer
of the U.S. Flag Strategic Business Unit. The Executive hereby 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 are customary and reasonable to such
positions, as may be assigned to him by the Board of Directors of the Company (the “Board”) from time to time.
The Executive shall be subject to, and shall act in accordance with, all lawful instructions and directions of, and shall report
to, the Board and all policies and rules of the Company applicable to
executive officers.


 


(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; (iii) manage his personal, financial and legal affairs; and (iv) continue to hold his 50% stake in, and
participate in the businesses that are owned by, SeaChange Partners LLC.


 


(c)   The
Executive’s principal place of employment shall be Tampa, Florida.


 


(d)   During
the Term, the Company shall put Executive up for election to serve as a member of the Board. The Executive will receive no additional
compensation in respect of his service on the Board, but shall retain and continue to vest in the equity awards granted coincident
with the 2016 annual meeting of the Company’s shareholders, in accordance with the terms and conditions of such awards.


 


2.    Term


 


The Executive shall serve
as Senior Vice President of the Company and President and Chief Executive Officer of the U.S. Flag Strategic Business Unit (including
as President and Chief Executive Officer of OSG Bulk Ships, Inc.) commencing on July [18], 2016 (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.


 




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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 $395,000 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
Incentives


 


In addition to the Base
Salary, with respect to each fiscal year of the Company during the Term, the Executive shall be eligible for annual performance-based
compensation (the “Annual Bonus”), with a target value of $1,250,000 (the “Target Bonus”).
The amount of the actual Annual Bonus that may be paid with respect to any such fiscal year shall be based on the relative achievement
of annual individual and Company performance objectives established by the Board at the beginning of the applicable fiscal year,
as determined by the Board, and subject to the Executive’s employment with the Company through the applicable payment date
for any such Annual Bonus. Following the end of the fiscal year to which the Annual Bonus relates, fifty percent (50%) of the Annual
Bonus shall be paid in (i) fully vested non-qualified stock options with an exercise price equal to the closing price of a share
of Company Class A common stock on the date of grant (the “Closing Price”), with an aggregate grant date Black-Scholes
present value equal to fifty percent (50%) of the earned Annual Bonus; and (ii) fully vested shares of Company Class A common stock
with an aggregate grant date value based on the Closing Price equal to fifty percent (50%) of the earned Annual Bonus, in either
case granted under the Overseas Shipholding Group, Inc. Management Incentive Compensation Plan, dated as of September 23, 2014
and as amended from time in accordance with its terms (the “Plan”) or such other plan as may be in effect from
time to time.


 


(c)   Initial
Equity Award; Special One-Time Incentive Compensation


 


The Executive will
receive an initial grant pursuant to the Plan, comprised of non-qualified stock options and restricted stock units (“RSUs”)
with an aggregate grant date value equal to the face value of 208,333 shares of Class A common stock of the Company on the date
of grant (such grant, the “Initial Equity Award”). The grant of the Initial Equity Award shall be made promptly
following the Effective Date. Seventy-five percent (75%) of the award shall be time-based vesting RSUs and the remaining twenty-five
percent (25%) shall be time-based vesting stock options, determined using the Black-Scholes present value on the date of grant
and with an exercise price equal to the Closing Price on the date of grant. The RSUs and options shall vest in three substantially
equal tranches on January 1 of each of 2017, 2018 and 2019, and the Executive shall only be entitled to elect to use net settlement
with respect to the Initial Equity Award with the consent of either (i) the Compensation Committee of the Board or (ii) the Board.
In the event the Company completes the contemplated spin-off of its International Flag business, the awards will be adjusted in
the most efficient tax manner possible to preserve the Executive’s economic interests to the maximum extent possible while
providing the Executive with shares of Company Class A common stock rather than shares in the spun-off business, such that the
Executive’s economic interests are substantially the same on the business day immediately prior to the spin-off and on the
business day on which the spin-off occurs. In addition, the Executive may from time to time be eligible to earn supplemental performance-based
incentive compensation at, and on such terms and conditions as may be determined in, the discretion of the Compensation Committee
of the Board.


 


(d)  Holding
Requirement; Certain Forfeitures 


 


Shares of Company Class
A common stock acquired by the Executive other than pursuant to the Initial Equity Award shall be held by the Executive at least
until the earliest to occur of (i) a Change in Control, as defined in the Plan, (ii) the Separation from Service Date (as defined
below), solely in the event of a termination of the Executive’s employment and the Term by the Company without Cause or by
the Executive for Good Reason and (iii) the third (3rd) anniversary of the date of such acquisition; provided,
that the Executive shall be permitted to elect to use net settlement to satisfy any exercise price or taxes due thereon, in the
Executive’s discretion. In addition, notwithstanding anything to the contrary in this Agreement, in the event the Company
experiences a major safety and/or containment incident which results from gross negligence or willful misconduct of management
or results from a violation of federal operation, safety or construction regulations, or if the responsible party fails to report
the incident or to cooperate with relevant authorities in responding to such incident, all incentive based compensation other than
the Initial Equity Award, whether such incentive based compensation is subject to short or long term performance criteria and/or
time based vesting, and whether denominated or payable in cash, shares of Class A common stock or other property, to the extent
unvested at the time the incident occurs may be cancelled at the discretion of the Compensation Committee of the Board, and the
Executive shall forfeit any rights with respect to such awards without consideration therefor.


 




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(e)   Allowances;
Reimbursement of Expenses


 


The Company will cover
up to (i) $5,200 in 2016 and $7,300 in 2017 in air travel expenses for the Executive between Tampa, Florida and Miami, Florida
and (ii) up to $200 per day for hotel accommodations for the two months immediately following the Effective Date until local housing
is concluded. During the Term, except with respect to the foregoing reimbursements, 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)   Attorney’s
Fees


 


The Company shall reimburse
the Executive for all reasonable and customary attorney’s fees incurred in connection with the negotiation and execution
of this Agreement.


 


(g)  Change
in Control Bonus


 


In the event a Change
in Control, as defined in the Plan, is consummated before July 15, 2018, the Executive will receive, no later than thirty (30)
days following consummation of such Change in Control, an award of cash and/or equity with an aggregate value equal to no less
than $2,500,000, the proportion of which is paid in cash and/or equity to be determined by the Board in its discretion; provided
that if the value of any equity delivered as a result of the foregoing equals or exceeds $2,500,000, then no cash shall be paid
pursuant hereto. In the event of such a Change in Control on or after July 15, 2018, but prior to July 15, 2019, the aggregate
value of the award shall be no less than $1,250,000; provided that if the value of any equity delivered as a result of the foregoing
equals or exceeds $1,250,000, then no cash shall be paid pursuant hereto.


 


(h)  Other
Benefits


 


During the Term, for
so long as the Executive meets the eligibility requirements of the applicable plan, policy or program: (i) 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) 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).


 




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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 and the Term shall terminate, 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
and the Term shall terminate. 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 illness or injury); (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 is or could
reasonably be expected to 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 conviction 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
fifteen (15) 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. 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 and the Term shall terminate.


 




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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; (ii) a material
change in the Executive’s principal place of employment; (iii) any material diminution in the Executive’s authority,
duties or responsibilities; (iv) the Executive shall not have been appointed the President and Chief Executive Officer of the Company
on or before June 30, 2017; or (v) 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 in
(i) – (iii) or (v) herein or within thirty days following June 30, 2017 in the case of (iv) 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) following the initial
occurrence (or June 30, 2017, in the case of clause (iv)) of the applicable event. Upon such termination the Executive shall separate
from service with the Company and the Term shall terminate.


 


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 14(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 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 sixty (60) 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 or provide to the Executive the amounts or benefits 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 ten (10) 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 expenses not reimbursed pursuant to Section 3(e) as of the Date of Separation from Service (the amounts described in
(w) through (z), together, the “Accrued Payments”);


 




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(B)         Salary
Continuation; Benefits.  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 and continued welfare benefits on the same terms as applied
as of immediately prior to the Date of Separation from Service, in either case for a period of 12 months measured from the day
of the Executive’s Date of Separation from Service (such period, the “Severance Period” and such payments
and benefits, the “Continuation Payments”), provided that the initial Continuation Payment shall be made or
provided on the first payroll date following the expiration of the Release Period (as defined below) and shall include the Continuation
Payments that would have been otherwise due prior thereto.


 


(C)         Annual
Incentives. Any incentive compensation to which Executive may have been entitled with respect to the fiscal year in which the
Date of Separation from Service occurs pursuant to Section 3(b) of this Agreement shall remain outstanding and shall be paid, following
the end of such fiscal year in accordance with the terms thereof; provided, that the Annual Bonus that may become payable
shall be pro rated to reflect the number of days in such fiscal year that have lapsed as of the Date of Separation from
Service.


 


(D)         Vesting
of Equity Awards. All awards of options and RSUs that vest solely based upon the continued provision of services and without
regard to any performance criteria, in either case granted to the Executive and outstanding and 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, or by reason of death or Disability.


 


(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 ten (10) 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 Section 6(a)(D) and 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 payments and benefits described in Section 6(a) and 6(c) above (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 attached hereto as Exhibit
A, 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 


 


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 in Section 6(d), 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 12 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-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 has not been disclosed to the public
other than by Executive in violation of his obligations hereunder, 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, unless such notification would expose the Executive to legal jeopardy (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 reasonably cooperates with the Company, at the Company’s expense, to limit the extent of such disclosure.
 


 


(c)   Non-Competition.
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 12 months following the termination of the Term, 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 engaged in a maritime business
involved in Jones Act trade (whether or not for compensation) . 


 


(d)  For
purposes of this Section 8, 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 . 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 Florida. 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.


 




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11.  Section
409A


 


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 if such
acceleration or deferral would result in the imposition of an additional tax under 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, unless the Company shall unilaterally and not in good faith or on the basis of advice of counsel
take action that results in the imposition of such taxes or penalties. In the event that at the time of a separation from service
the Executive is a “specified employee” as defined by Section 409A of the Code, no amount payable to the Executive
by reason of such separation from service that constitutes deferred compensation subject to Section 409A of the Code 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.


 


12.  Section
280G


 


If any payment(s) or
benefit(s) the Executive would receive pursuant to this Agreement and/or pursuant to any other agreement, plan, policy or arrangement
would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code and the applicable regulations,
and (ii) but for this Section 12 would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”),
then the Executive shall be entitled to receive either (A) the full amount of the parachute payments, or (B) the maximum amount
that may be provided to the Executive without resulting in any portion of such parachute payments being subject to the Excise Tax,
whichever of clauses (A) and (B), after taking into account applicable federal, state, and local taxes and the Excise Tax, results
in the receipt by the Executive, on an after-tax basis, of the greatest portion of the parachute payments. The parachute payments
shall be reduced in a manner that maximizes the Executive’s economic position. Any reduction of parachute payments pursuant
to the preceding sentence shall be made in a manner consistent with the requirements of Section 409A of the Code, and where two
economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro
rata basis but not below zero.


 


13.  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 13 shall limit the right of any person to respond truthfully to any inquiry
arising from any legal proceeding.


 




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14.  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.


600 Third Avenue, 39th Floor

New York, NY 10016


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.


 


(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.


 




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(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.


 


(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)          Notwithstanding
anything herein or in any other agreement with or policy of the Company, nothing herein or therein shall (i) prohibit the Executive
from making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with
the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley
Act of 2002, or of any other whistleblower protection provisions of state or federal law or regulation, or (ii) require notification
or prior approval by the Company of any reporting described in clause (i); provided, however, that the Executive is not authorized
to disclose communications with counsel that were made for the purpose of receiving legal advice or that contain legal advice or
that are protected by the attorney work product or similar privilege. Furthermore, the Executive shall not be held criminally or
civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (1) in confidence
to a federal, state or local government official, either directly or indirectly, or to an attorney, in each case, solely for the
purpose of reporting or investigating a suspected violation of law or (2) in a complaint or other document filed in a lawsuit or
proceeding, if such filings are made under seal.


 


(m)          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.


 


	 	Samuel H. Norton
	 	 
	 	/s/ Samuel H Norton
	 	Name: Samuel H. Norton
	 	 
	 	Overseas Shipholding Group, Inc.
	 	 
	 	/s/ Ian T. Blackley
	 	Name:  Ian T. Blackley
	 	Title:    President and CEO


 




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EXHIBIT A


 


RELEASE AGREEMENT


This Release Agreement
(“Release”) is hereby made between Samuel H. Norton (“Executive”) and Overseas Shipholding
Group, Inc.1 (the “Company”),


 


I.           RECITALS


 


WHEREAS, Executive and the Company
have entered into an Employment Agreement dated July [●], 2016 (the “Employment Agreement”), pursuant
to which Executive may be entitled to receive severance and certain benefits pursuant to Section 6(a) of the Employment Agreement,
as applicable (the “Severance Benefits”) in the event of certain specified terminations of employment, subject
to and conditioned upon his execution of a general release.


 


WHEREAS, Executive and the Company
desire to enter into this Release, in satisfaction of such condition under the Employment Agreement.


 


II.          TERMS
AND CONDITIONS


 


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


 


1.          Separation.  Executive’s
employment with the Company and all of its subsidiaries and Affiliates ended effective                      ,
____.  Executive has the right to receive Severance Benefits subject to his execution of this Release, as provided under
the Employment Agreement.


 


2.          General
Release and Covenant Not to Sue. Executive hereby releases, remises and acquits the Company and/or its direct or indirect parents,
subsidiaries, affiliates and related entities, and all of their predecessors, successors, assigns, trustees and current or former
officers, directors, shareholders, members, partners, agents, employees, consultants, independent contractors, attorneys and advisers
(collectively, the “Releasees”), jointly and severally, from any and all claims, known or unknown, which Executive
or Executive’s heirs, successors or assigns have or may have against any of the Releasees arising on or prior to the date
of execution of this Agreement and any and all liability which any of the Releasees may have to Executive, heirs, successors and
assigns whether denominated claims, demands, causes of action, obligations, damages or liabilities relating to or arising from
his employment with or service as a director on the board of directors of the Company or any other Releasee or the termination
of that employment or service from the beginning of the world until the date of the execution hereof, however, denominated, including
but not limited to, the Age Discrimination in Employment Act (“ADEA”), the Americans with Disabilities Act of
1990, the Family and Medical Leave Act of 1993, Title VII of the United States Civil Rights Act of 1964, 42 U.S.C. § 1981,
any other federal, state or local law (including any civil or human rights law) and any workers’ compensation or disability
claims under any such laws or claims under any contract. Executive further agrees that Executive will not file or permit to be
filed on Executive’s behalf any such claim. Notwithstanding the preceding sentence or any other provision of this Agreement,
this release is not intended to interfere with Executive’s right to file a charge with the Equal Employment Opportunity Commission
(the “EEOC”) in connection with any claim he believes he may have against the Company. However, by executing
this Agreement, Executive hereby waives the right to recover in any proceeding Executive may bring before the EEOC or any state
or local human rights commission or in any proceeding brought by the EEOC or any state or local human rights commission on Executive’s
behalf. In addition, this release is not intended to interfere with Executive’s right to challenge that his waiver of any
and all ADEA claims pursuant to this Agreement is a knowing and voluntary waiver, notwithstanding Executive’s specific representation
that he has entered into this Agreement knowingly and voluntarily. This release is for any relief, no matter how denominated, including,
but not limited to, injunctive relief, wages, back pay, front pay, compensatory damages, or punitive damages. This release shall
not apply to any obligation of the Company pursuant to the Employment Agreement or any equity award not covered by the Employment
Agreement, any rights in the nature of indemnification which Executive may have (including, without limitation, under any insurance
policy) with respect to claims against Executive relating to or arising out of his employment with or service as a director of
the Company or his employment with or service as a director of any other Releasee, any vested benefit to which Executive is entitled
under any tax qualified pension plan of the Company, any unpaid health benefits, reimbursement for any business expenses to which
the Executive is entitled under the Company’s policies for reimbursement of expenses, COBRA continuation coverage benefits
or any other similar benefits required to be provided by statute. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IS IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.


 





 






1
To be updated to reflect change to employing entity as of time of termination, if any.


 




    	 	 	13



     


    

 


3.          Voluntary
Agreement. Executive understands and acknowledges the significance and consequences of this Release, that it is voluntary,
that it has not been given as a result of any coercion, and expressly confirms that it is to be given full force and effect according
to all of its terms, including those relating to unknown Claims. Executive was hereby advised of Executive’s right to seek
the advice of an attorney prior to signing this Release. Executive acknowledges and agrees he has signed this Release only after
full reflection and analysis, that he understands it and is entering into it voluntarily.


 


4.          Period
for Consideration of Agreement and Other Matters.  Executive acknowledges that, before signing this Release, Executive was
given a period of at least twenty-one (21) days to consider this Release. Executive also understands that he has the right to change
his mind and cancel this Release by providing written notice to the Company no later than seven (7) days following the date that
Executive has signed it. This Release will not be effective until the end of this seven (7) day period. Executive acknowledges
that Executive was advised to consult with legal counsel prior to executing a copy of this Release.


 


5.          Non-Admission.
Executive and the Company agree that this Agreement does not constitute and shall not be construed, interpreted, or treated in
any respect as an admission of any liability or wrongdoing by Executive or the Releasees. Executive and the Company further agree
that this Release shall not be admissible in any proceeding without Executive’s and the Company’s written consent,
except for a proceeding instituted by Executive or the Company challenging the validity of this Release, a proceeding by Executive
or the Company alleging a breach of this Release or the Employment Agreement, any proceeding in which a defense is asserted based
on any provisions of this Release, or as otherwise required by law.


 


6.          Choice
of Law, Interpretation and Severability. Executive and the Company agree that this Agreement shall be governed by Florida law
and may be modified by the Company, from time to time, to reflect any applicable changes in Florida law. Executive and the Company
agree that this Agreement shall not be construed against any party on account of authorship and, if a court finds any part of this
Agreement to be illegal or invalid, the illegal or invalid portion of the Agreement shall be severed and the rest of the Agreement
will be enforceable. Moreover, if any one or more of the provisions contained in this Agreement is held to be excessively broad
as to duration, scope, activity or subject, such provisions will be construed by limiting and reducing them so as to be enforceable
to the maximum extent compatible with applicable law.


 


7.          Execution.
This Agreement may be executed in two or more facsimiled counterparts, each of which shall be equivalent to an original, but
which collectively shall constitute one Agreement.


 


8.          Entire
Agreement. Except as otherwise set forth herein, the terms contained in this Agreement constitute the entire agreement between
the parties with respect to the subject matter hereof and supersede all prior agreements relating thereto whether written or oral.


 




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9.


 


AGREED TO AND ACCEPTED BY:


 


	Executive	 	Overseas Shipholding Group, Inc2
	 	 	 
	 	 	 
	 	 	 	 	 
	Date:	 	 	Name:	 
	 	 	 	Title:	 


 





 






2
To be updated to reflect change to employing entity as of time of termination, if any.


 




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