Document:

Exhibit 10.(iii)(z)

 

September 26,
2006

 

Mr. Mats
Berglund

c/o
Overseas Shipholding Group, Inc.

666
Third Avenue

New
York, New York 10017

 

Dear
Mats:

 

                Reference is hereby made to (i) the
letter agreement between you and Overseas Shipholding Group, Inc. (the “Company”)
dated June 29, 2005 (the “Employment Agreement”), (ii) the Overseas
Shipholding Group, Inc. Severance Protection Plan effective January 1,
2006 (the “Severance Plan”) in which you participate and have agreed to be
bound by the restrictive covenants set forth therein pursuant to the Notice of
Eligibility between you and the Company effective January 27, 2006, and (iii) the
Change of Control Protection Agreement between you and the Company as of January 1,
2006 (the “Change of Control Agreement”).

 

                The purpose of this letter
agreement is to reconcile certain terms from the Employment Agreement which may
conflict with the terms of the Severance Plan and the Change of Control
Agreement.  By your execution below, you
hereby agree that:

 

(a)           during your
Protection Period (as defined in the Severance Plan) under the Severance Plan:  (i) in connection with a termination of
your employment by the Company without Cause, Section 7 of the Employment
Agreement shall be replaced with Section 4 of the Severance Plan, (ii) Section 9
of the Employment Agreement shall be replaced by Section 7 of the
Severance Plan and (iii) the definition of “Cause” set forth on Exhibit A
to the Employment Agreement shall be replaced by the definition of “Cause” set
forth on Appendix B to the Severance Plan; and

 

(b)           following a Change
of Control (as defined in the Change of Control Agreement) and prior to
termination of the Change of Control Agreement: 
(i) in connection with a termination of your employment by the
Company without Cause or by you for Good Reason, Section 7 of the
Employment Agreement shall be replaced with Section 4 of the Change of
Control Agreement, (ii) Section 9 of the Employment Agreement shall
be replaced by Section 10 of the Change of Control Agreement, (iii) the
definition of “Cause” set forth on Exhibit A to the Employment Agreement
shall be replaced by the definition of “Cause” set forth in Section 1(ii) of
the Change of Control Agreement and (iv) the definition of “Good Reason”
set forth on Exhibit A to the Employment Agreement shall be replaced by
the definition of “Good Reason” set forth in Section 1(v) of the
Change of Control Agreement.

 

                All other terms of the Employment
Agreement will remain unchanged and the Employment Agreement will remain in full
force and effect.

 

 

 

                Please acknowledge your
agreement by signing below.

 

Sincerely,

 

	
   

  	
  OVERSEAS
  SHIPHOLDING GROUP, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
  /s/Morten
  Arntzen

  
	
   

  	
   

  	
  Name:

  	
  Morten
  Arntzen

  
	
   

  	
   

  	
  Title:

  	
  President

  

 

 

Agreed
to and Accepted:

 

	
  /s/Mats
  Berglund

  	
   

  
	
  Mats
  BerglundExhibit 10. (iii) (aa)

 

September 24, 2006

 

Mr. Jonathan
P. Whitworth

420 Riviera Drive

Tampa,
Florida  33606

 

Dear
Mr. Whitworth:

 

We
are pleased to confirm your employment with Overseas Shipholding Group, Inc.
(the “Company”) effective at, and contingent upon the occurrence of, the
Effective Time (as such term is 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.), as follows:

 

1.  Title and
Position.   At all times during the term of this
Agreement,  you shall be the Senior Vice
President and the highest ranking officer of the Company having
responsibilities for the businesses comprising our U.S. Flag Strategic Business
Unit (the “US SBU”), as structured from time to time, and you shall at all
times report solely to our Chief Executive Officer (“CEO”).   In that capacity, you shall at all times
have those powers and duties normally associated with the position of  head of a strategic business unit of the
Company.  All individuals who are
employed by or perform services for the US SBU shall report to you in a manner
consistent with OSG’s policies and practices. 
You will devote substantially all of your business time and reasonable
best efforts to the performance of your duties and shall discharge your duties
diligently, faithfully and in the best interests of the Company.  Your principal place of business will be
located in Tampa, Florida but you will be required to travel frequently, especially
to the Company’s headquarters in New York City, New York.

 

2.  Compensation
and Benefits.  The Company will pay you a base salary at the
rate of $550,000 (“Base Salary”) per year and you will be eligible for bonuses
in accordance with our bonus plans which, for 2006 will be pro rated for the
portion of the year you are employed by the Company.  The Company’s board of directors (the “Board”)
may increase the amount of such bonuses for 2006 in its sole discretion.  You will participate, to the extent eligible,
in the benefit plans and programs generally applicable to senior executives,
including, but not limited to, the Company’s 401(k) Plan, group health
plan, life insurance benefits and disability insurance benefits.

 

Simultaneously with the signing of this
Agreement, you and the Company are entering into a change in control agreement
that affords the same rights and protections as are afforded to the Company’s
other senior executives in the event of a change in control.  The terms of the change in control agreement
will supersede the terms of this Agreement in connection a change in control.

 

3.  Initial
Stock Option Grant.  You will be granted options to acquire such
number of shares of our common stock as will have an aggregate value
(determined by the Company on a Black-Scholes valuation on the date of grant)
of $250,000, vesting in three equal tranches on the first, second and third
anniversaries of the date of grant, provided that you are employed by the
Company on each such date.  The options
will be granted on the next date on which options are regularly granted to
executives of the Company, which will be in January 2007, or if the 

 

 

 

Effective Time is after the date of such
grant, not later than 30 days after the Effective Time.  The form of grant agreement, including
provisions relating to acceleration of vesting and the duration of rights to
exercise after termination of employment shall otherwise be consistent with the
form of grant agreement used for other senior executives.

 

4.  Initial
Restricted Stock.  You will be awarded such number of shares of
our restricted stock as will have an aggregate value of $250,000, based on our
common stock’s fair market value on the date of grant.  Restrictions on one fourth of the shares will
lapse on each of the next four anniversaries of the date of grant, provided you
are employed by the Company on each such date.  The restricted stock will be awarded on the
next date on which restricted stock is regularly awarded to executives of the
Company, which will be in January 2007, or if the Effective Time is after
the date of such award, not later than 30 days after the Effective Time.  The form of grant agreement, including
provisions relating to acceleration of vesting, shall otherwise be consistent
with the form of grant agreement used for other senior executives.

 

5.  Termination.  If your
employment with the Company terminates as a result of your death, disability or
your voluntary termination, the Company will pay (i) any Base Salary
earned but not yet paid, (ii) any accrued vacation pay, (iii) any
bonus for any prior completed year earned to the extent provided under the
terms of the applicable plan or program but not yet paid, and (iv) any
amounts due under any other plan of the Company applicable to you (the “Accrued
Amounts”).  You will not be entitled to
any other amounts.

 

6.  Termination
Without Cause or For Good Reason. If the Company
terminates your employment without Cause or you terminate your employment for
Good Reason (each as defined in Exhibit A), you will receive your Accrued
Amounts and, provided such termination is prior to the third anniversary of the
Effective Time, subject to your execution of a general release specified by us,
the Company will (i) pay your monthly Base Salary for a period of 24
months, and (ii) provide you and your eligible dependents for a period of
up to 18 months ending in any event when you receive new full-time employment
(subject to you paying the same portion of premiums you paid as an active
employee), continued coverage under Company health plans.  You will not be entitled to any other
amounts.

 

7.  For Cause.  If the Company terminates your
employment for Cause, the Company will pay you the Accrued Amounts other than
any unpaid bonus, and you shall not be entitled to any other amounts.

 

8.  Confidential
Information, Non-Competition and Non-Solicitation.

 

(a)  While you are employed by the Company and
for one year thereafter, you will not engage in Solicitation and will not enter
into Competition with the Company or its affiliates; provided that if your
employment by the Company terminates on or after the third anniversary of the Effective
Time, you will not enter into Competition with the Company or its affiliates
for six months after the end of your employment.

 

(b)  Competition means: participating, 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, or in any country where the
Company or its affiliates do business) in a business in competition with any
business conducted by the Company as of the date of the termination of your
employment.

 

(c)  Solicitation means: (i) recruiting,
soliciting or inducing any employee of the Company or its affiliates to
terminate such employment, or hiring or assisting another person or entity to
hire 

 

 

2

 

any such employee or any person who within six months before had been
such an employee, or (ii) soliciting or inducing any customer or
prospective customer of the Company to become a customer of any other person or
entity with respect to products and/or services then sold or under development
by the Company or to otherwise cease doing (or reduce the amount of) business
with the Company or its affiliates, and you will not authorize or approve the
taking of such actions by any other person or entity.

 

(d)  If any restriction set forth in this Section 8
is unenforceable, (i) it will be interpreted to extend over the maximum
period of time, activities or geographic area as to which it may be
enforceable, and (ii) such invalidity will not affect the remaining
provisions of this Section.

 

(e)  During and after your employment, you will
hold confidentially all confidential information, knowledge or data relating to
the Company and its affiliates, including any confidential information of
customers of the Company and its affiliates.

 

(f)  During and after your employment, you will
not criticize or disparage the Company or its affiliates or their officers,
directors, employees, services or products. 
The foregoing shall not apply to criticisms made by you privately to the
CEO or our Board.

 

(g)  In the event of a breach or potential
breach of this Section 8, the Company and its affiliates will be caused
irreparable injury and money damages may not be an adequate remedy.  The Company will be entitled to injunctive
relief (in addition to other remedies).

 

(h)  In the event of a material breach of this Section 8
by you, the Company may cease paying you, and shall be relieved of any
obligation with regard to, any payments under Section 6.

 

9.  Miscellaneous.  Your employment is at will and
may be terminated by us at any time for any reason or no reason, provided that,
in the event of your voluntary termination of employment prior to the third
anniversary of the Effective Time, you shall give the Company thirty (30) days’
prior written notice.  If the Merger
Agreement is terminated, this Agreement shall be null and void.    Effective at and contingent upon the
occurrence of the Effective Time, this Agreement supersedes all prior
agreements and understandings relating to your employment with Maritrans Inc.
or with the Company, and effective as of the Effective Time you waive all right
and entitlement under any such agreements and understandings (including,
without limitation, the Severance and Non-Competition Agreement between you and
Maritrans Inc., dated as of May 16, 2006. 
Additionally, it is understood that you will adhere to the OSG Policy
relating to the retention of stock for Senior OSG employees.  Notwithstanding any other provision of this
Agreement, however, you shall at all times (i) retain the protections
afforded to third party beneficiaries under the Merger Agreement with respect
to indemnification, advancement of expenses, exculpation from liabilities and
maintenance of directors’ and officers’ liability insurance policies, and
rights under Article II of the Merger Agreement, and (ii) with respect
to your services to the Company after the Effective Time, retain the
protections afforded to officers and directors of the Company with respect to
such matters under the Company’s charter , by-laws, and directors’ and officers’
liability insurance policies.  This
Agreement is governed by the laws of the State of New York, contains the entire
understanding with respect to your employment, and may not be waived or amended
orally.  Our Board will be entitled to
reasonably determine disability, which shall be conclusive.  You represent that you are not subject to any
limitations on your entering into or performing this Agreement.  The Company may withhold taxes from amounts
payable under this Agreement.  This
Agreement is subject to 

 

 

3

 

you providing upon
commencement of employment evidence of your legal right to work in the United
States.

 

 

	
   

  	
  /s/Morten Arntzen

  
	
   

  	
  Morten Arntzen, President

  
	
   

  	
  Chief Executive Officer

  

 

 

Agreed & Accepted:

 

 

	
  /s/Jonathan P. Whitworth

  	
   

  
	
  Jonathan P. Whitworth

  	
   

  

 

 

 

4

 

EXHIBIT
A

“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 contender 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 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 (10) days after written notice thereof
from the Company; (D) the Executive’s breach, if curable, is not cured
within ten (10) days after written notice thereof from the Company; or (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 the
implementation thereof, is illegal and he promptly notifies the Chairman of the
Board in writing.  No act of 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.

 

GOOD
REASON. For purposes of this Agreement, Good Reason means any of the following
events without your prior written consent that is not cured by the Company
within thirty (30) days of written notice given to the Company: (i) the
failure to appoint you, or to continue to maintain you during the term of this
Agreement, as the highest ranking officer of US SBU, with the agreed upon
duties and responsibilities as set forth above; (ii) any material
diminution of your position, duties, responsibilities or authority, including
the appointment of anyone to be responsible for functions that are part of your
agreed responsibilities, or the assignment of duties, responsibilities or
authorities that are materially inconsistent with your position; (iii) a
reduction in base salary, bonus or equity opportunity from that provided for
under this Agreement, (iv) a relocation of your principal place of
business from Tampa, Florida, (v) a material breach by the Company of this
Agreement or your change in control agreement, or (vi) the failure of an
acquirer to assume this Agreement or your change in control agreement.

 

 

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