Document:

Exhibit 10. (iii)(bb)

 

CHANGE OF CONTROL

 

PROTECTION AGREEMENT

 

Agreement
(this “Agreement”) made as of September 24, 2006, by and between Overseas
Shipholding Group, Inc., a corporation incorporated under the laws of
Delaware with its principal office at 666 Third Avenue, New York, New York
10017 (the “Company”) and Jonathan P. Whitworth (the “Executive”).

 

W I T N E S S E T H:

 

WHEREAS,
the Company believes that the establishment and maintenance of a sound and
vital management of the Company and its affiliates is essential to the
protection and enhancement of the interests of the Company and its
stockholders;

 

WHEREAS,
the Company also recognizes that the possibility of a Change of Control (as
defined in Section 1(iii) hereof), with the attendant uncertainties
and risks, might result in the departure or distraction of key employees of the
Company to the detriment of the Company; and

 

WHEREAS,
the Company has determined that it is appropriate to take steps to induce key
employees to remain with the Company, and to reinforce and encourage their
continued attention and dedication, when faced with the possibility of a Change
of Control.

 

NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereto hereby agree as follows:

 

1.             Definitions.           The foregoing terms shall have the
following meaning:

 

(i)            Anticipatory Termination” means a Termination without
Cause or for Good Reason that occurs after a tender offer is announced for the
Company or after material discussions have occurred with a possible acquirer
with regard to a Transaction, provided, that such offer or discussions have not
terminated.

 

(ii)           “Cause” shall mean: (A) the Executive’s willful
misconduct involving the Company or its assets, business or employees or in the
performance of his duties which is materially injurious to the Company (in a
manner which would effect the Company economically or as to its reputation); (B) the
Executive’s indictment for, or conviction of , or pleading guilty or nolo
contendre to, a felony (provided that for this purpose, a felony shall cover
any action or inaction that is a felony or crime under federal, state or local
law in the United States (collectively, “U.S. law”) and any action or inaction
which takes place outside of the United States, if it would be a felony under
U.S. law); (C) the Executive’s continued and substantial failure to
attempt in good faith to perform his duties with the Company (other than
failure resulting from his incapacity due to physical or mental illness or
injury), which failure has continued for a period of at least ten (10) days
after written notice thereof from the Company; (D) the Executive’s breach
of any material provisions of any agreement with the Company, which breach, if
curable, is not cured within ten (10) days after written notice thereof
from the Company; (E) the Executive’s failure to attempt in good faith to
promptly follow a written

 

 

direction
of the Board of Directors of the Company (the “Board”) or a more senior
officer, provided that the failure shall not be considered “Cause” if the
Executive, in good faith, believes that such direction, or implementation
thereof, is illegal and he promptly so notifies the Chairman of the Board in
writing; or (F) the determination by the Company after the Effective Time (as
defined in Section 2) that the certificate delivered to the Company
pursuant to Section 6.02(a) of the Merger Agreement (as defined in Section 2)
was not true and correct.  No act or failure to act by the Executive shall
be deemed to be “willful” if he believed in good faith that such action or
non-action was in or not opposed to, the best interests of the Company.

 

(iii)          A “Change of Control” shall mean the occurrence of any of
the following events:  (i) any
person (as defined in Section 3(a)(9) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) and as used in Sections 13(d) and
14(d) thereof), excluding the Company, any “Subsidiary,” any employee
benefit plan sponsored or maintained by the Company, or any Subsidiary
(including any trustee of any such plan acting in his capacity as trustee),
becomes the beneficial owner (as defined in Rule 13(d)-3 under the
Exchange Act) of shares of the Company having at least thirty percent (30%) of
the total number of votes that may be cast for the election of directors of the
Company; provided, that no Change of Control will be deemed to have occurred as
a result of an increase in ownership percentage in excess of thirty percent
(30%) resulting solely from an acquisition of securities by the Company unless
and until such person acquires additional shares of the Company; (ii) there
is a merger or other business combination of the Company, sale of all or
substantially all of the Company’s assets or combination of the foregoing transactions
or a liquidation of the Company, (a “Transaction”), other than a Transaction
involving only the Company and one or more of its Subsidiaries, or a
Transaction immediately following which the shareholders of the Company
immediately prior to the Transaction continue to have a majority of the voting
power in the resulting entity in approximately the same proportion as they had
in the Company immediately prior to the Transaction; or (iii) during any
period of two (2) consecutive years beginning on or after the date hereof,
the persons who were directors of the Company immediately before the beginning
of such period (the “Incumbent Directors”) shall cease (for any reason other
than death) to constitute at least a majority of the Board or the board of directors
of any successor to the Company, provided that, any director who was not a
director as of the date hereof shall be deemed to be an Incumbent Director if
such director was elected to the Board by, or on the recommendation of or with
the approval of, at least two-thirds (2/3) of the directors who then qualified
as Incumbent Directors either actually or by prior operation of the foregoing
unless such election, recommendation or approval occurs as a result of an
actual or threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act or any successor
provision) or other actual or threatened solicitation of proxies or contests by
or on behalf of a person other than a member of the Board.  Only one (1) Change of Control may occur
under this Agreement.

 

(iv)          “Disability”
shall mean the Executive’s failure to have performed his material duties and
responsibilities as a result of physical or mental illness or injury for more
than one hundred eighty (180) days during a three hundred sixty-five (365) day
period.

 

(v)           “Good
Reason” shall mean a termination by the Executive effected by a written notice
given within ninety (90) days after the occurrence of the Good Reason
event.  For purposes of this Agreement, “Good
Reason” shall mean the occurrence of any of the

 

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following events without the Executive’s express written consent which
event is not cured within ten (10) days after written notice thereof from
the Executive to the Company: (A) any material diminution in the Executive’s
position, duties, responsibilities, title or authority, or the assignment to
the Executive of duties and responsibilities materially inconsistent with his
position, except in connection with the Executive’s termination for Cause or as
a result of death, or temporarily as a result of the Executive’s incapacity or
other absence for an extended period; (B) a reduction in the Executive’s
annual base salary; (C) a relocation of the Executive’s principal business
location to an area outside of a fifty (50) mile radius of both the Executive’s
current principal business location and the Executive’s principal residence; or
(D) any breach of Section 13 of this Agreement.

 

(vi)          A termination “without Cause” shall mean a termination of
the Executive’s employment by the Company other than for a termination for
Cause or due to Disability.

 

2.             Term.      This Agreement shall commence at the
Effective Time (as defined in the Agreement and Plan of Merger dated as of September 25,
2006 (the “Merger Agreement”) among the Company, Marlin Acquisition Corporation
and Maritrans Inc.) and shall expire on the earliest of (i) December 31,
2008, subject to the right of the Board and the Executive to extend it, provided
that, if a Change of Control takes place prior to such date, the duration of
this Agreement under this subpart (i) shall be until two (2) years
after the Change of Control; (ii) the date of the death of the Executive
or retirement or other termination of the Executive’s employment (voluntarily
or involuntarily) with the Company prior to a Change of Control other than as a
result of a termination by the Company without Cause or by the Executive for
Good Reason that is an Anticipatory Termination; or (iii) ninety (90) days
after an Anticipatory Termination by the Company without Cause or by the
Executive with Good Reason if a Change of Control does not occur on or prior to
such date.  If the Merger Agreement is
terminated, this Agreement shall be null and void.  Notwithstanding anything in this Agreement to
the contrary, if the Company becomes obligated to make any payment to the
Executive pursuant to the terms hereof at or prior to the expiration of this
Agreement, then this Agreement shall remain in effect for such and related
purposes (including but not limited to under Section 5 hereof) until all
of the Company’s obligations hereunder are fulfilled.  Further, provided that a Change of Control
has taken place prior to the termination of this Agreement, the provisions of
Sections 10 and 12 hereof shall survive and remain in effect notwithstanding
the termination of this Agreement, the termination of the Executive’s
employment or any breach or repudiation or alleged breach or repudiation by the
Company or the Executive of this Agreement or any one or more of its terms.

 

3.             Termination
Following Change of Control.     If,
and only if, (i) a Change of Control occurs and the Executive’s employment
with the Company is terminated by the Company without Cause or by the Executive
for Good Reason at any time within two (2) years after the Change of
Control or (ii) there was an Anticipatory Termination and the Change of
Control has taken place within ninety (90) days thereafter, the Executive shall
be entitled to the amounts provided in Section 4 upon such
termination.  In the event of an
Anticipatory Termination, if any equity grants which were granted prior to a
Change of Control would vest on a Change of Control after an Anticipatory
Termination, any such equity grants that otherwise would be forfeited (after
application of any other accelerated vesting provision) shall not be forfeited
pending a determination of whether or not a Change of Control occurs within ninety

 

 

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(90) days thereafter (the “Determination
Period”), but during the Determination Period no unvested option shall vest or
be exercisable, no other unvested equity grant shall vest and no dividends
shall be payable unless and until the Change of Control takes place during the
Determination Period.  If a Change of
Control occurs during the Determination Period, and the option exercise period
would otherwise have expired, then the exercise period for any equity grants
which otherwise would have expired during the Determination Period shall
automatically be deemed to have been extended to the date which is thirty (30)
days following the first date after such Change of Control in which shares of
the Company could be traded by the Executive on the applicable market under the
Company’s trading window policies but, with regard to any outstanding options
on the date hereof, not beyond the last day of extension permitted under Section 409A
(“Code Section 409A”) of the Internal Revenue Code of 1986, as amended
(the “Code”), without such option being deemed subject to Code Section 409A
as of the date granted.

 

4.             Compensation on Change of
Control Termination.        (a)  If,
pursuant to Section 3, the Executive is entitled to amounts and benefits
under this Section 4, the Executive shall receive the following payments
and benefits from the Company:

 

(A)          (i)  subject to submission
of appropriate documentation, any incurred but unreimbursed business expenses
for the period prior to the Executive’s termination payable in accordance with
the Company’s policies and practices; (ii) any base salary, bonus,
vacation pay or other compensation accrued or earned under law or in accordance
with the Company’s policies applicable to the Executive but not yet paid; and (iii) any
other amounts or vested benefits due under the then applicable employee benefit
(including, without limitation, any non-qualified pension plan or arrangement),
equity or incentive plans of the Company then in effect, applicable to the
Executive as shall be determined and paid in accordance with such plans;

 

(B)           subject to Section 4(b) and
Section 8 hereof, in a lump sum (without regard to any interest which may
have accrued thereon) within ten (10) days after the satisfaction of the
requirements of Section 8 hereof (or, if such termination occurred prior
to a Change of Control, within ten (10) days after the latter of the
aforesaid date or the Change of Control), (i) two (2) times the sum
of (x) the Executive’s annual base salary rate in effect immediately prior
to his termination (or if such termination is by the Executive pursuant to Section 1(v)(B),
Executive’s annual base salary rate in effect immediately prior to such
reduction of the rate of his annual base salary), plus (y) the Executive’s
highest target annual incentive compensation in effect within one hundred
eighty (180) days prior to, or at any time after, the Change of Control; provided,
that if no target annual incentive compensation is in effect during such
period, then for the purpose of this Section 4(a)(B)(i)(y), the Executive’s
target incentive compensation shall be deemed to be 50% of the Executive’s
annual base salary rate in effect immediately prior to his termination (or if
such termination is by the Executive pursuant to Section 1(v)(B),
Executive’s annual base salary rate in effect immediately prior to such
reduction of the rate of his annual base salary); (ii) a lump sum amount
equal to twenty-four (24) months of additional employer contributions under any
qualified or nonqualified defined contribution pension plan or arrangement of
the Company applicable to the Executive, measured from the date of termination
of employment and not contributed to the extent that the Executive would
otherwise be entitled to such contributions during such period if he had contributed
at the maximum permitted salary reduction level during such period; (iii) a
pro rata target bonus for the year in which Executive is terminated based on
the portion of the year the Executive was employed, provided that, if no

 

 

4

 

target
annual incentive compensation is in effect during such period, then for the
purpose of this Section 4(a)(B)(iii), the Executive’s target incentive
compensation shall be deemed to be 50% of the Executive’s annual base salary
rate in effect immediately prior to his termination (or if such termination is
by the Executive pursuant to Section 1(v)(B), Executive’s annual base
salary rate in effect immediately prior to such reduction of the rate of his
annual base salary); and (iv) to the extent not paid pursuant to Section 4(a)(A) above,
any earned but unpaid bonus for a previously completed fiscal year of the
Company; provided that such bonus shall be paid to the Executive in the year
following the completed fiscal year of the Company when other executive’s of
the Company receive their bonuses; and

 

(C)           subject to Section 4(b) and
Section 8 hereof, (i) continued coverage pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”) under the Company health
plans in which the Executive participated immediately prior to the date of
termination of the Executive’s employment, or materially equivalent plans
thereto (the “Health Plans”), for the Executive and the Executive’s dependents
until the earliest of (a) the Executive or the Executive’s eligible
dependents, as the case may be, ceasing to be eligible under COBRA, (b) twenty-four
(24) months following the date of termination of the Executive’s employment,
and (c) the Executive’s commencement of other substantially full-time
employment; provided that the Executive timely elects such COBRA coverage and
pays the same premium amount for such coverage as the Executive would pay if an
active employee; and further provided that such coverage shall cease to the extent
that the providing of such coverage would violate applicable law or result in
the Executive or other participants being taxed on the benefits under such
Health Plan, and, in such event, alternative materially equivalent coverage or
a payment therefor shall be provided (on a tax grossed up basis, to the extent
the amount taxable to the Executive is greater than the amount taxable to him
if he was an employee and participated in the Health Plans); and (ii) all
of the Executive’s then unvested equity awards which were granted prior to a
Change of Control shall automatically vest and all restrictions thereon shall
lapse.

 

(b)           If the Company
determines in good faith that any payment under Section 4(a) would
cause a violation of Code Section 409A if paid within the first six (6) months
after termination of the Executive’s employment, such amount(s) shall not
be paid during such six (6) month period but shall instead be paid in a
lump sum (without interest) immediately after the end of such six (6) month
period.  Thereafter, payments shall be
made in accordance with the Company’s normal payroll practices.

 

5.             Excise
Tax.             In the event that the
Executive shall become entitled to payments and/or benefits provided by this
Agreement or any other amounts in the “nature of compensation” (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Company, any person whose actions result in a change of
ownership or effective control covered by Section 280G(b)(2) of the
Code or any person affiliated with the Company or such person) as a result of a
Change of Control (collectively the “Company Payments”), and if such Company
Payments will be subject to the tax (the “Excise Tax”) imposed by Section 4999
of the Code (and any similar tax that may hereafter be imposed by any taxing
authority) the amounts of any Company Payments shall be automatically reduced
to an amount one dollar less than an amount that would subject the Executive to
the Excise Tax; provided, however, that the reduction shall occur only if the
reduced Company Payments received by the Executive (after taking into account
further reductions for applicable federal,

 

 

5

 

state
and local income, social security and other taxes) would be greater than the
unreduced Company Payments to be received by the Executive minus (i) the
Excise Tax payable with respect to such Company Payments and (ii) all
applicable federal, state and local income, social security and other taxes on
such Company Payments.  The Executive may
elect which payments and benefits shall be reduced to accomplish the foregoing,
but, if the Executive does not make such an election, cash payments shall be
reduced first.

 

(a)           For purposes of
determining whether any of the Company Payments will be subject to the Excise
Tax and the amount of such Excise Tax, (x) the Company Payments shall be
treated as “parachute payments” within the meaning of Section 280G(b)(2) of
the Code, and all “parachute payments” in excess of the “base amount” (as
defined under Code Section 280G(b)(3) of the Code) shall be treated
as subject to the Excise Tax, unless and except to the extent that, in the
opinion of the Company’s independent certified public accountants appointed
prior to any change in ownership (as defined under Code Section 280G(b)(2))
or tax counsel selected by such accountants (the “Accountants”) such Company
Payments (in whole or in part) either do not constitute “parachute payments,”
including giving effect to the recalculation of stock options in accordance
with Treasury Regulation Section 1.280G-1 Q/A33, represent reasonable
compensation for services actually rendered within the meaning of Section 280G(b)(4) of
the Code in excess of the “base amount” or are otherwise not subject to the
Excise Tax, and (y) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the Accountants in accordance with
the principles of Section 280G of the Code.  To the extent permitted under Revenue
Procedure 2003-68, the value determination shall be recalculated to the extent
it would be beneficial to the Executive, at the request of the Executive.

 

(b)           For purposes of
making the calculation hereunder, the Executive shall be deemed to pay U.S.
federal income taxes at the highest marginal rate of U.S. federal income
taxation in the calendar year in which the Company Payments are to be made and
state and local income taxes at the highest marginal rate of taxation in the
state and locality of the Executive’s residence for the calendar year in which
the Company Payments are to be made, net of the maximum reduction in U.S.
federal income taxes which could be obtained from deduction of such state and
local taxes if paid in such year.

 

(c)           In the event of any
controversy with the Internal Revenue Service (or other taxing authority) with
regard to the Excise Tax, the Executive shall permit the Company to control
issues related to the Excise Tax (at its expense), provided that such issues do
not potentially materially adversely affect the Executive, but the Executive
shall control any other issues.  In the
event the issues are interrelated, the Executive and the Company shall in good
faith cooperate so as not to jeopardize resolution of either issue, but if the
parties cannot agree the Executive shall make the final determination with
regard to the issues.  In the event of
any conference with any taxing authority as to the Excise Tax or associated
income taxes, the Executive shall permit the representative of the Company to
accompany the Executive, and the Executive and the Executive’s representative
shall cooperate with the Company and its representative.

 

(d)           The Company shall be
responsible for all charges of the Accountants.

 

 

6

 

(e)           The Company and the
Executive shall promptly deliver to each other copies of any written
communications, and summaries of any verbal communications, with any taxing
authority regarding the Excise Tax.

 

6.             Notice of
Termination.        After a Change of
Control, any purported termination of the Executive’s employment (other than by
reason of death) shall be communicated by written Notice of Termination from
one party hereto to the other party hereto in accordance with Section 16.  For purposes of this Agreement, a “Notice of
Termination” shall mean a notice which shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive’s employment.  Further, a
Notice of Termination for Cause after a Change of Control is required to
include a copy of a resolution duly adopted by the affirmative vote of not less
than two-thirds (2/3) of the entire membership of the Board at a meeting of the
Board which was called and held for the purpose of considering such termination
and which the Executive had the right to attend and speak finding that, in the
good faith opinion of the Board, the Executive has engaged in conduct set forth
in the definition of Cause herein, and specifying the particulars thereof in
detail.

 

7.             Date of
Termination.            “Date of
termination,” with respect to any purported termination of the Executive’s
employment after a Change of Control, shall mean the date specified in the
Notice of Termination and, in the case of a termination by the Executive for
Good Reason, shall not be less than five (5) days nor more than sixty (60)
days, from the date such Notice of Termination is given.  In the event a Notice of Termination is given
by the Company, the Executive may treat such notice as having a date of
termination at any date between the date of receipt of such notice and the date
of termination indicated in the Notice of Termination by the Company; provided,
that the Executive must give the Company written notice of the date of
termination if he deems it to have occurred prior to the date of termination
indicated in the Notice of Termination.

 

8.             Acceptance and
Release.   Any and all amounts payable
and benefits or additional rights provided pursuant to Sections 4(a)(B) and
(C) above shall only be payable if the Executive executes and delivers to
the Company an Acceptance Form and Release in the form attached hereto as Exhibit A
discharging all claims of the Executive which may have occurred up to the date of
termination (with such changes therein as may be necessary to make it valid and
encompassing under applicable law) within the appropriate time described in the
Acceptance Form and Release presented by the Company to the
Executive.  Notwithstanding anything
herein to the contrary, if the Executive materially breaches any of the
provisions of Section 10 of this Agreement, the Company may cease all
payments and benefits due to the Executive thereafter under Sections 4(a)(B) and
(C) above (other than as required by law).

 

9.             No Duty to
Mitigate/Set-off.              Other
than as set forth in Section 4(a)(C), the Company agrees that if the
Executive’s employment with the Company is terminated pursuant to this
Agreement during the term of this Agreement, the Executive shall not be
required to seek other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant to this
Agreement.  Further, the amount of any
payment or benefit provided for in this Agreement shall not be reduced by any
compensation earned by the Executive or benefit provided to the Executive as
the result of employment by another employer or otherwise.  Except as otherwise provided herein and apart
from any disagreement

 

 

7

 

between the Executive and
the Company concerning interpretation of this Agreement or any term or
provision hereof, the Company’s obligations to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any circumstances, including without limitation, any set-off,
counterclaim, recoupment, defense or other right which the Company may have
against the Executive.  The amounts due
under Section 4 are inclusive, and in lieu of, any amounts payable under
any other salary continuation or cash severance arrangement of the Company and
to the extent paid or provided under any other such arrangement shall be offset
against the amount due hereunder.

 

10.   Confidentiality,
Non-Competition, Non-Solicitation and Cooperation.

 

(a)           During the Executive’s
employment with the Company and thereafter, the Executive agrees not to,
directly or indirectly, for any reason whatsoever, communicate or disclose to
any unauthorized person, firm or corporation, or use for the Executive’s own
account, without the prior written consent of the Board or the Chief Executive
Officer of the Company (the “CEO”), any proprietary processes, trade secrets or
other confidential data or information of the Company and its related and
affiliated companies concerning their businesses or affairs, accounts,
products, services or customers, it being understood, however, that the
obligations of this Section 10(a) shall not apply to the extent that
the aforesaid matters (i) are disclosed in circumstances in which the
Executive is legally required to do so, provided that the Executive gives the
Company prompt written notice of receipt of notice of any legal proceedings so
as the Company has the opportunity to obtain a protective order, or (ii) become
known to and available for use by the public other than by the Executive’s
wrongful act or omission.

 

(b)           During the Executive’s
employment with the Company and thereafter, the Executive agrees to fully
cooperate with the Company or its counsel in connection with any matter,
investigation, proceeding or litigation regarding any matter in which the
Executive was involved during the Executive’s employment with the Company or to
which the Executive has knowledge based on the Executive’s employment with the
Company.

 

(c)           During the Executive’s
employment with the Company and, if the Executive is receiving the amounts and
benefits provided under Section 4, for the one (1) year period following
the termination of the Executive’s employment with the Company, the Executive
agrees not to participate, directly or indirectly, as an individual proprietor,
partner, stockholder, officer, employee, director, joint venturer, investor,
lender, consultant or in any capacity whatsoever (within the United States of
America, or in any country where the Company or its affiliates do business) in
a business in competition with any Material Business (as defined below)
conducted by the Company as of the date of the termination of the Executive’s
employment (“Competitor”), provided, however, that such participation will not
include (i) the mere ownership of not more than one percent (1%) of the
total outstanding stock of a publicly held company, (ii) engaging in any
activity with, or for, a non-competitive division, subsidiary or affiliate of
any Competitor, or (iii) any activity engaged in with the prior written
approval of the Board or the CEO.  A
business shall be deemed to be a “Material Business” of the Company if it
generated more than 5% of the Company’s revenues in the fiscal year ending
immediately prior to termination of the Executive’s employment or is projected
to generate more than 5% of the Company’s revenues in the fiscal year of
termination of the Executive’s employment.

 

 

 

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(d)           During the Executive’s
employment with the Company and, if the Executive is receiving the amounts and
benefits provided under Section 4, for the one (1) year period following
the termination of the Executive’s employment with the Company, the Executive
agrees that he will not, directly or indirectly, individually or on behalf of
any other person, firm, corporation or other entity, solicit, induce, hire or
retain any employee of the Company (or any person who had been such an employee
in the prior six (6) months) to leave the employ of the Company or to
accept employment or retention as an independent contractor with, or render
services to or with any other person, firm, corporation or other entity
unaffiliated with the Company or take any action to assist or aid any other
person, firm, corporation or other entity in identifying, soliciting, hiring or
retaining any such employee; provided, the Executive may serve as a reference
after the Executive is no longer employed by the Company, but not with regard
to any entity with which the Executive is affiliated or from which the
Executive is receiving compensation and this provision shall not be violated by
general advertising not specifically targeted at employees of the Company.

 

(e)           During the Executive’s
employment with the Company and, if the Executive is receiving the amounts and
benefits provided under Section 4, for the one (1) year period following
the termination of the Executive’s employment with the Company, the Executive
will not solicit or induce any customer of the Company to purchase goods or
services offered by the Company from another person, firm, corporation or other
entity or assist or aid any other persons or entity in identifying or
soliciting any such customer.

 

(f)            Because the Company’s
remedies at law for a breach or threatened breach of any of the provisions of
this Section would be inadequate, the Executive acknowledges and agrees
that, in the event of such a breach or threatened breach, in addition to any
remedies at law, the Company shall be entitled to obtain equitable relief in the
form of specific performance, a temporary restraining order, a temporary or
permanent injunction or any other equitable remedy which may then be available.

 

(g)           If it is determined
by a court of competent jurisdiction that any restriction in this Section 10
is excessive in duration or scope or is unreasonable or unenforceable, it is
the intention of the parties that such restriction may be modified or amended
by the court to render it enforceable to the maximum extent permitted.

 

(h)           The obligations contained
in this Section 10 shall survive the termination, separation, or
expiration of the Executive’s employment with the Company and shall be fully
enforceable thereafter.

 

11.           Service with
Subsidiaries.   For purposes of this
Agreement, employment by a subsidiary or a parent of the Company shall be
deemed to be employment by the Company and references to the Company shall
include all such entities, except that the payment obligation hereunder shall
be solely that of the Company.  A Change
of Control, however, as used in this Agreement, shall refer only to a Change of
Control of the Company.

 

9

 

12.           No Resignation.

 

(a)           In consideration of
this Agreement, the Executive agrees that he will not resign from the Company
without Good Reason for at least one hundred eighty (180) days from the Effective
Time, except the foregoing shall not apply after a Change of Control.

 

(b)           The Company shall
continue to cover the Executive, or cause the Executive to be covered, under
any director and officer insurance maintained after the Change of Control for
directors and officers of the Company (whether by the Company or another
entity) at the highest level so maintained for any other past or active
director or officer with regard to any action or omission of the Executive
while an officer or director of the Company. 
Such coverage shall continue for any period during which the Executive
may have any liability for the aforesaid actions or omissions.

 

(c)           Following a Change
of Control, the Company shall, with regard to matters related to Executive’s period
of employment with the Company, indemnify the Executive to the fullest extent
permitted or authorized by the Company’s bylaws against any claims, suits,
judgments, expenses (including reasonable attorney fees), with advancement of
legal fees and disbursements to the fullest extent permitted by law, arising
from, out of, or in connection with the Executive’s services as an officer or
director of the Company, as an officer or director of any affiliate for which
the Executive was required to serve as such by the Company or as a fiduciary of
any benefit plan of the Company or any affiliate.

 

13.           Successors;
Binding Agreement.      In addition to
any obligations imposed by law upon any successor to the Company, the Company
will 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 expressly assume and agree in writing to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.  This Agreement shall inure to the benefit of
and be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.  If the Executive shall die
while any amount would still be payable to the Executive hereunder if the
Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of the Executive’s
estate.  This Agreement is personal to
the Executive and neither this Agreement or any rights hereunder may be
assigned by the Executive.

 

14.           Miscellaneous.     No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer as may be
specifically designated by the Board.  No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.  This Agreement
constitutes the entire Agreement between the parties hereto pertaining to the
subject matter hereof.  No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly
set forth in this Agreement.  All
references to any law shall be deemed also to refer to any successor provisions
to such laws.

 

 

10

 

15.           Counterparts.        This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument.

 

16.           Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally, or
sent by registered mail, postage prepaid. 
Any such notice shall be deemed given when so delivered personally, or,
if mailed, five days after the date of deposit in the United States mails, or
as follows:

 

(i)            If to the Company, to:

Overseas Shipholding Group, Inc.

666 Third Avenue

New York, New York  10017

Attention: Chairman

 

 

(ii)           If to the Executive,
to his shown address on

the books of the Company.

 

 

Any party may by notice given in accordance
with this Section to the other parties, designate another address or
person for receipt of notices hereunder.

 

17.           Separability.          If any provisions of this Agreement
shall be declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions hereof
which shall remain in full force and effect.

 

18.           Legal Fees.            In the event the Company does not
make the payments due hereunder on a timely basis (as determined by an arbitrator)
and the matter is arbitrated pursuant to Section 19 below, if the Executive
prevails in such arbitration, the Company shall pay all costs of such arbitration,
including reasonable legal fees and other reasonable fees and expenses which
the Executive may incur (on a tax grossed up basis, to the extent such amounts
are taxable to the Executive).  The
Company shall pay to the Executive interest at the prime lending rate (as
announced from time to time by Citibank, N.A.) on all or any part of any amount
to be paid to Executive hereunder that is not paid when due.  The prime rate for each calendar quarter
shall be the prime rate in effect on the first day of the calendar quarter.

 

19.           Arbitration.           Any dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration conducted in the City of New York in the State of New York under
the Commercial Arbitration Rules then prevailing of the American
Arbitration Association and such submission shall request the American
Arbitration Association to:  (i) appoint
an arbitrator experienced and knowledgeable concerning the matter then in
dispute; (ii) require the testimony to be transcribed; (iii) require
the award to be accompanied by findings of fact and the statement for reasons
for the decision; and (iv) request the matter to be handled by and in
accordance with the expedited procedures provided for in the Commercial
Arbitration Rules.  The determination of
the arbitrators, which shall be based upon a de novo interpretation of this
Agreement, shall be final and binding and judgment may be

 

 

11

 

entered on the arbitrators’
award in any court having jurisdiction. 
The Company shall pay all costs of the American Arbitration Association
and the arbitrator.

 

20.           Withholding.        Any payments made or benefits provided
to the Executive under this Agreement shall be reduced by any applicable
withholding taxes or other amounts required to be withheld by law or contract.

 

21.           Code Section 409A.             If any provision of this Agreement
would cause the Executive to incur any additional tax or interest under Code Section 409A
or any regulations or Treasury guidance promulgated thereunder, the Company
shall, after consulting with the Executive, reform such provision; provided
that the Company agrees to maintain, to the maximum extent practicable, the
original intent and economic benefit to the Executive of the applicable
provision without violating the provisions of Code Section 409A.  The
Company shall indemnify and hold the Executive harmless, on an after-tax basis,
for any additional tax (including interest and penalties with respect thereto)
imposed on the Executive as a result of Code Section 409A with regard to
the payments and benefits hereunder.

 

22.           Non-Exclusivity
of Rights. Nothing in this Agreement
shall prevent or limit the Executive’s continuing or future participation in
any benefit, bonus, incentive, equity or other plan or program provided by the
Company and for which the Executive may qualify, nor shall anything herein
(except Section 9) limit or otherwise prejudice such rights as the
Executive may have under any other currently existing plan, agreement as to
employment or severance from employment with the Company or statutory
entitlements, provided, that (i) to the extent such amounts are paid under
Section 4 hereof or otherwise, they shall not be due under any such
program, plan, agreement, or statute, and (ii) to the extent such amounts
are paid under any such program, plan, agreement, statute, or otherwise, they
shall not be due under Section 4 hereof. 
Amounts that are vested benefits or which the Executive is otherwise
entitled to receive under any plan or program of the Company, at or subsequent
to the date of termination shall be payable in accordance with such plan or
program, except as otherwise specifically provided herein.

 

23.           Not an Agreement
of Employment.   This is not an
agreement assuring employment and, subject to any other agreement between the
Executive and the Company, the Company reserves the right to terminate the
Executive’s employment at any time with or without cause, subject to the
payment provisions hereof, if any, that are applicable.  The Executive acknowledges that he is aware
that he shall have no claim against the Company hereunder or for deprivation of
the right to receive the amounts hereunder as a result of any termination that
does not specifically satisfy the requirements hereof or as a result of any
other action taken by the Company.

 

24.           Independent
Representation.            The
Executive acknowledges that he has been advised by the Company to have the
Agreement reviewed by independent counsel and has been given the opportunity to
do so.

 

25.           Governing Law.    This Agreement shall be construed,
interpreted, and governed in accordance with the laws of the State of Delaware
without reference to rules relating to conflicts of law.

 

 

12

 

IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and
the Executive has hereunto set his hand as of the date first set forth above.

 

	
   

  	
  OVERSEAS
  SHIPHOLDING GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Morten
  Arntzen

  
	
   

  	
  Name:

  	
  Morten
  Arntzen

  
	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Jonathan P. Whitworth

  
	
   

  	
   

  	
  Jonathan
  P. Whitworth

  
				

 

 

13

 

EXHIBIT A

 

ACCEPTANCE FORM AND
RELEASE

 

Release

 

 

1.             I
agree and acknowledge that the payments and other benefits provided pursuant to
the Change of Control Protection Agreement (“Agreement”), dated as of September 24,
2006: (i) are in full discharge of any and all liabilities and obligations
of the Company to me, monetarily or with respect to employee benefits or
otherwise, including but not limited to any and all obligations arising under
any alleged written or oral employment agreement, policy, plan or procedure of
the Company and/or any alleged understanding or arrangement between me and the
Company; and (ii) exceed any payment, benefit, or other thing of value to
which I might otherwise be entitled under any policy, plan or procedure of the
Company and/or any agreement between me and the Company.

 

2.             In consideration
for the payments and benefits to be provided to me pursuant to the Agreement, I
forever release and discharge the Company from any and all claims.  This includes claims that are not specified
in this Acceptance Form and Release (this “Release”), claims of which I am
not currently aware, claims under: (i) the Age Discrimination in
Employment Act, as amended; (ii) Title VII of the Civil Rights Act of
1964, as amended; (iii) the Americans with Disabilities Act, as amended; (iv) the
Employee Retirement Income Security Act of 1974, as amended (excluding claims
for accrued, vested benefits under any employee benefit pension plan of the
Company in accordance with the terms and conditions of such plan and applicable
law); (v) the Workers’ Adjustment and Retraining Notification Act; (vi) the
Family and Medical Leave Act; (vii) any claim under the New York State
Human Rights Law and the New York City Administrative Code; (viii) any
other claim (whether based on federal, state, or local law, statutory or
decisional) relating to or arising out of my employment, the terms and
conditions of such employment, the separation of such employment, and/or any of
the events relating directly or indirectly to or surrounding the separation of
that employment, including, but not limited to, breach of contract (express or
implied), wrongful discharge, detrimental reliance, defamation, emotional
distress or compensatory or punitive damages; and (ix) any claim for
attorneys’ fees, costs, disbursements and/or the like.  Notwithstanding anything herein to the
contrary, the sole matters to which this Release does not apply are (i) the
rights of indemnification and directors and officers liability insurance
coverage to which I was entitled immediately prior to my termination; and (ii) my
rights under any tax-qualified pension plan or claims for accrued vested
benefits under any other employee benefit plan, policy or arrangement
maintained by the Company or under the Consolidated Omnibus Budget
Reconciliation Act of 1985.

 

3.             This Release
applies to me and to anyone who succeeds to my rights, such as my heirs,
executors, administrators of my estate, trustees, and assigns.  This Release is for the benefit of (i) the
Company, (ii) any related corporation or entity, (iii) any director,
officer, employee, or agent of the Company or of any such related corporation
or entity, or (iv) any person, corporation or entity who or that succeeds
to the rights of the Company or of any such person, corporation or entity.

 

4.             I acknowledge that
I: (a) have carefully read in their entirety the Agreement, this

 

 

14

 

Release [and the information attached as Appendix I provided pursuant
to the Older Workers Benefit Protection Act]; (b) have had an opportunity
to consider fully for at least [twenty-one (21)] [forty-five (45)] days the
terms of the Agreement, this Release [and information attached as Appendix I]; (c) have
been advised by the Company in writing to consult with an attorney of my
choosing in connection with the Agreement, this Release [and the information
attached as Appendix I]; (d) fully understand the significance of all of
the terms and conditions of the Agreement, Release [and the information
attached as Appendix I], and have discussed them with my independent legal
counsel, or have had a reasonable opportunity to do so; (e) have had
answered to my satisfaction any questions I have asked with regard to the
meaning and significance of any of the provisions of the Agreement, this
Release [and the information attached as Appendix I]; and (f) am signing
this Release voluntarily and of my own free will and assent to all the terms
and conditions contained herein and contained in the Agreement and the Release.

 

5.             I understand that I
will have [twenty-one (21)] [forty-five (45)] days from the date of receipt of
this Release [and information attached as Appendix I] to consider the terms and
conditions of those documents. I may accept this Release by signing and
returning it to                             .  After executing this Release and returning it
to                           ,
I shall have seven (7) days (the “Revocation Period”) to revoke this
Release by indicating my desire to do so in writing delivered by no later than
5:00 p.m. on the seventh (7th) day following the date I sign and return
this Release.  The effective date of this
Release shall be the eighth (8th) day following my signing and return of this
Release.  If the last day of the
Revocation Period falls on a Saturday, Sunday or holiday, the last day of the
Revocation Period will be deemed to be the next business day. In the event I do
not accept this Release, or in the event I revoke this Release during the
Revocation Period, my rights under the Agreement, this Release, including but
not limited to my rights to receive payments and other benefits from the
Company, shall be deemed automatically null and void.

 

	
  Print Name:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
  Employee

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
   

  
	
  Employee

  	
   

  
	
   

  	
   

  	
   

  
	
  STATE OF NEW YORK

  	
  )

  	
   

  
	
   

  	
  ) 

  	
  ss:

  	
   

  
	
  COUNTY OF

  	
  )

  	
   

  
								

 

 

On this        day of                                       ,
before me personally came                          to
be known and known to me to be the person described and who executed the
foregoing Release, and (s)he duly acknowledged to me that (s)he executed the
same.

 

	
  /s/

  	
   

  
	
  Notary
  Public

  	
   

  

 

 

 

 

15

 

ACCEPTANCE FORM AND
RELEASE

 

Acceptance
Form:

 

I have read the Change of
Control Protection Agreement, dated as of September 24, 2006 (“Agreement”)
and the accompanying Release [and the information attached as Appendix I] and
hereby accept the benefits provided under the Agreement, subject to the terms
and conditions set forth in the Agreement and Release.

 

	
  Print Name:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
  Employee

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
   

  
	
  Employee

  	
   

  
	
   

  	
   

  	
   

  
	
  STATE OF NEW YORK

  	
  )

  	
   

  
	
   

  	
  ) 

  	
  ss:

  	
   

  
	
  COUNTY OF

  	
  )

  	
   

  
								

 

 

On this        day of                                       ,
before me personally came                           to
be known and known to me to be the person described and who executed the
foregoing Release, and (s)he duly acknowledged to me that (s)he executed the
same.

 

	
   

  	
   

  
	
  Notary
  PublicExhibit 4(a)  

NUMBER

BG  

	PAR VALUE

$1.00 PER SHARE	 	COMMON STOCK
	    	 	 
	INCORPORATED UNDER THE LAWS

OF THE STATE OF DELAWARE	[PICTURE]	THIS CERTIFICATE IS TRANSFERABLE

IN NEW YORK,

NEW YORK, OR

BEVERLY HILLS, CALIFORNIA

City National Corporation  

	THIS CERTIFIES THAT             	 	CUSIP 178566 10 5	 	SEE REVERSE FOR

CERTAIN DEFINITIONS

IS THE RECORD

HOLDER OF               

FULLY PAID AND NONASSESSABLE SHARES OF THE COMMON STOCK OF 

City National Corporation, transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This
Certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar.

Witness the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.

Dated              

[City
National Corporation SEAL] 

	 	 	COUNTERSIGNED AND REGISTERED:
 CONTINENTAL STOCK TRANSFER & TRUST COMPANY
	 	 	 	 	(Jersey City, NJ)
	 	 	 	 	TRANSFER AGENT

AND REGISTRAR
	 	 	BY	 	 
	 	 	 	 	AUTHORIZED OFFICER
	    	 	 	 	 
	[ILLEGIBLE]

SECRETARY	 	 	 	[ILLEGIBLE]

CHAIRMAN OF THE BOARD

        The
Corporation shall furnish without charge to each stockholder who so requests a statement of the powers, designations, preferences and relative, participating, optional or other
special rights of each class of stock of the Corporation or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Such requests shall be made to the
Corporation's Secretary at the principal office of the Corporation. 

        The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to
applicable laws or regulations:

	TEN COM — as tenants in common	 	UNIF GIFT MIN ACT—	 	    
 (Cust)	 	Custodian	 	    
 (Minor)
	TEN ENT — as tenants by the entireties	 	 	 	 	 	 	 	 
	JT TEN — as joint tenants with right of survivorship and not as tenants in common	 	 	 	Under Uniform Gifts to Minors Act

    
 (State)
	    	 	 	 	 	 	 	 	 
	 	 	UNIF TRF MIN ACT—	 	    
 (Cust)	 	Custodian (until age     )	 	    
 (Minor)
	    	 	 	 	 	 	 	 	 
	 	 	 	 	under Uniform Transfers to Minors Act

    
 (State)

Additional
abbreviations may also be used though not in the above list. 

        FOR
VALUE RECEIVED,                                      hereby
sell, assign and transfer unto 

        PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE 

	    
	 	Shares

of
the common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint 

	    
	 	Attorney

to
transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. 

Dated
                                     

	X	 	    

	    	 	 
	X	 	    

	    	 	 
	NOTICE:	 	THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UP THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

Signature(s)
Guaranteed 

By

THE SIGNATURE(S) SHOULD BE GUARANTEED AND ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. 

This certificate also evidences and entitles the holder hereof to certain Rights as set forth in a Rights Agreement dated as of February 26, 1997, by and between City
National Corporation and Continental Stock Transfer & Trust Company, as Rights Agent (the "Rights Agreement"), as amended to date, the terms and conditions of which are hereby incorporated
herein by reference and a copy of which is on file at the principal executive offices of City National Corporation. Under certain circumstances specified in the Rights Agreement, such Rights will be
represented by separate certificates and will no longer be represented by this certificate. Under certain circumstances specified in the Rights Agreement, Rights beneficially owned by certain persons
may become null and void. City National Corporation will mail to the record holder of this certificate a copy of the Rights Agreement without charge promptly following receipt of a written request
therefore. As described in the Rights Agreement, Rights issued to any Person who becomes an Acquiring Person (as defined in the Rights Agreement) shall become null and void.

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