EXHIBIT 10(d)(4)
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AGREEMENT
Agreement made as of the 30th day of October, 1998, by and
between Overseas Shipholding Group, Inc., a corporation
incorporated under the laws of Delaware with its principal office
at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company") and
Xxxxxx X. Xxxxxxxx, residing at (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 of the Company (as defined in Section 1
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 of the Company.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto hereby agree as
follows:
1. A CHANGE OF CONTROL shall be deemed to have occurred
if: (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, Maritime Overseas Corporation, any "Subsidiary" of
either, any employee benefit plan sponsored or maintained by the
Company, Maritime Overseas Corporation or any Subsidiary of
either (including any trustee of any such plan acting in his
capacity as trustee) and any person who (or group which includes
a person who) is the beneficial owner (as defined in Rule 13(d)-3
under the Exchange Act) as of January 1, 1994 of at least fifteen
percent (15%) of the common stock of the Company, 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; (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 (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 (excluding for this purpose any shareholder of the Company
owning directly or indirectly more than ten percent (10%) of the
shares of the other company involved in the Transaction if such
shareholder is not as of January 1, 1994, the beneficial owner
(as defined in Rule 13(d)-3 under the Exchange Act) of at least
fifteen percent (15%) of the common stock of the Company); or
(iii) during any period of two (2) consecutive years beginning on
or after October 21, 1996, 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 of
directors of the Company or the board of directors of any
successor to the Company, provided that, any director who was not
a director as of October 21, 1996 shall be deemed to be an
Incumbent Director if such director was elected to the board of
directors 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.
2. TERM. This Agreement shall commence on the date hereof
and shall expire on the earliest of (i) October 21, 1999, subject
to the right of the Board of Directors of the Company (the
"Board") and the Executive to extend it, provided that if a
Change of Control takes place prior to October 21, 1999, the
duration of this Agreement under this subpart (i) shall be until
two (2) years after the Change of Control whether such two (2)
year period ends before or after the end of such three (3) year
period; (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 (as defined below) or by the Executive with Good Reason (as
defined below); or (iii) one hundred twenty (120) days after a
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. 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 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(a), (d) and (e)
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, a
Change of Control occurs and one (1) of the following occurs:
(i) the Executive's employment with the Company is terminated by
the Company without Cause (provided that for purposes of this
Section (i), Cause shall not include (ii)(E) below) or by the
Executive for Good Reason at any time within two (2) years after
the Change of Control, (ii) the Executive's employment with the
Company terminates for any reason whatsoever, including but not
limited to termination by the Executive voluntarily with or
without Good Reason, within thirty (30) days after the end of the
one (1) year period running from the date of the Change of
Control, or (iii) the Executive's employment with the Company
terminates as a result of the Executive's death after the Change
of Control, but prior to the end of the thirty (30) day period
after the end of the one (1) year period running from the date of
the Change of Control, the Executive shall be entitled to the
amounts provided in Section 4 upon such termination. In
addition, notwithstanding the foregoing, in the event the
Executive is terminated without Cause or terminates employment
(as a result of an event occurring within one hundred twenty
(120) days prior to the occurrence of a Change of Control) for
Good Reason within one hundred twenty (120) days prior to the
occurrence of a Change of Control, such termination shall, upon
the occurrence of a Change of Control, be deemed to be covered
under the Agreement and the Executive shall be entitled to the
amounts provided under Section 4 hereof reduced by any amounts
otherwise received in connection with his termination of
employment. The foregoing terms shall have the following
meanings:
(i) TERMINATION FOR GOOD REASON. For purposes of this
Agreement, termination for Good Reason shall mean a
termination by the Executive effected by a written notice
given within sixty (60) days after the occurrence of the
Good Reason event. For purposes of this Agreement, "Good
Reason" shall mean the occurrence of any of the following
events without the Executive's express written consent:
(A) following a Change of Control, any material diminution in the
Executive's duties and responsibilities, authority, or any
diminution in the Executive's title, or the assignment to the
Executive of duties and responsibilities materially inconsistent
with the position held by the Executive immediately prior to the
Change of Control, except in each case in connection with the
termination of the Executive's employment for Cause or as a
result of the Executive's death, or temporarily as a result of
the Executive's illness or other absence; (B) a reduction in the
Executive's annual base salary; (C) a relocation of the
Executive's principal business location to an area outside a
fifty (50) mile radius of the Executive's current principal
business location; or (D) a material breach by the Company of any
other agreement with the Executive without proper justification
that remains uncured for ten (10) days after written notice of
such breach is given to the Company.
(ii) CAUSE. As used herein, the term "Cause" shall
mean: (A) the willful engaging by the Executive in gross
misconduct which is materially injurious to the Company,
with written notice of the specific misconduct given to the
Executive; (B) Executive's conviction of (or pleading of
NOLO CONTENDERE to) a crime involving any financial
impropriety or other crime which would materially interfere
with the Executive's ability to perform his services to the
Company or otherwise be materially injurious to the Company;
(C) the willful breach by the Executive of any of his
material obligations under any agreement with the Company
without proper justification, which breach is not cured
within ten (10) days after written notice thereof from the
Company; (D) refusal to follow the proper and achievable
written direction of the Board within five (5) business days
of it being given, provided that the foregoing refusal shall
not be "Cause" if the Executive in good faith believes that
such direction is illegal, unethical or immoral and
Executive promptly so notifies the Board; or (E) the
Executive's inability to perform his material duties and
responsibilities due to the same or related physical or
mental illness for one hundred eighty (180) consecutive
days. For purposes of this paragraph, no act, or failure to
act, on the Executive's part shall be considered "willful"
unless done, or omitted to be done, by the Executive in bad
faith and without reasonable belief that such action or
omission was in the best interest of the Company.
The Executive's continued employment for a period of up to
sixty (60) days after the occurrence of any act or failure to act
constituting Good Reason hereunder shall not constitute consent
to, or a waiver of rights with respect to, any such act or
failure to act.
4. COMPENSATION ON CHANGE OF CONTROL TERMINATION. If,
pursuant to Section 3, the Executive is entitled to amounts and
benefits under this Section 4, the Company shall, subject to
Section 8, pay and provide to Executive: (A) in a lump sum
within five (5) days after such termination (or, if such
termination occurred prior to a Change of Control, within five
(5) days after the Change of Control) (i) two (2) times
Executive's highest annual base salary in effect within one
hundred twenty-one (121) days prior to, or at any time after, the
Change of Control, (ii) subject to submission of documentation,
any incurred but unreimbursed business expenses for the period
prior to termination payable in accordance with the Company's
policies, and (iii) 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; (B) any other amounts or benefits due under the then
applicable employee benefit (including without limitation any
Supplemental Executive Retirement Plan), equity or incentive
plans of the Company applicable to the Executive as shall be
determined and paid in accordance with such plans; (C) two (2)
years of additional service and compensation credit (at
Executive's highest compensation level in the one hundred twenty-
one (121) day period prior to, or at any time after, the Change
of Control) for pension purposes, and an increase in his age by
two (2) years for purposes of calculating any early retirement
subsidy or actuarial reduction, under any defined benefit type
qualified or nonqualified pension plan or arrangement of the
Company and its affiliates applicable to Executive, measured from
the date of termination of employment and not credited to the
extent that the Executive is otherwise entitled to such credit
during such two (2) year period, which payments shall be made
through and in accordance with the terms of the nonqualified
defined benefit pension plan or arrangement if any then exists
that is not purely an excess plan within the meaning of 4 U.S.C.
Section 114(b)(1)(I)(ii), or, if not, in an actuarially
equivalent lump sum (using the actuarial factors then applying in
the Company's defined benefit plan covering the Executive);
(D) continued coverage under the Company health plans in which
the Executive participates (whether as an active or former
employee) immediately prior to the Change of Control or
equivalent plans thereto (the "Health Plans") for the Executive
(except in the case of the Executive's death) and the Executive's
dependents for two (2) years from the date of termination of the
Executive's employment, provided that premiums for such coverage
shall be paid by the Executive on the same basis as prior to the
Change of Control; and further provided that such coverage shall
cease to the extent that the providing of such coverage would
violate applicable law or result in other participants being
taxed on the benefits under such Health Plans; and (E) continued
coverage under the Company life insurance plan in which the
Executive participates (at the same cost as for active employees
of equivalent age) at a benefit level equal to the higher level
in effect immediately prior to the Change of Control or
immediately prior to the Executive's termination or,
alternatively, equivalent coverage (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 Company's life insurance plan) for two (2) years from the
date of termination of the Executive's employment.
5. EXCISE TAX LIMIT. Notwithstanding anything else
herein, to the extent that the Executive would be subject to the
excise tax imposed under Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") (and any similar tax that
may hereafter be imposed) on the payments and/or benefits
provided by Section 4 or any other amounts (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, the amounts
to be paid under this Agreement shall be automatically reduced to
an amount one dollar less than that, when combined with such
other amounts and benefits required to be so included, would
subject the Executive to excise tax under Section 4999 of the
Code. Such amount shall be reduced from the lump sum due under
Section 4(A) hereof.
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 14. 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 Notification 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 (which, in the case of a
termination by the Company, shall not be less than thirty (30)
days (except in the case of a termination for Cause which shall
be 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 of
Notice of Termination by the Company, the Executive may treat
such notice as having a date of termination at any date between
the date of the 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.
8. NO DUTY TO MITIGATE/SET-OFF. 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 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.
9. 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.
10. CONFIDENTIALITY; NO NON-COMPETITION; NO RESIGNATION.
(a) The Executive shall not at any time during the term of this
Agreement, or thereafter, 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, any proprietary
processes, trade secrets or other confidential data or infor
mation 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 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, or (ii) become known
to and available for use by the public other than by the
Executive's wrongful act or omission.
(b) 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 date
hereof, except the foregoing shall not apply after a Change of
Control.
(c) In consideration of this Agreement, the Executive
agrees that he will, following a Change of Control and timely
payment of amounts due him hereunder, consult in a senior
advisory capacity to assist in the orderly transition to new
management for a period of ninety (90) days following a Change of
Control.
(d) 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 or its affiliates. Such coverage shall continue for any
period during which the Executive may have any liability for the
aforesaid actions or omissions.
(e) Following a Change of Control, the Company shall
indemnify the Executive to the fullest extent permitted by law
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.
11. 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 adminis
trators 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.
12. 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.
13. 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.
14. 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.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chairman
(ii) If to the Executive, to his or her last 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.
15. 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.
16. LEGAL FEES. In the event the Company does not make the
payments due hereunder on a timely basis and the Executive
collects any part or all of the payments provided for hereunder
or otherwise successfully enforces the terms of this Agreement by
or through a lawyer or lawyers, the Company shall pay all costs
of such collection or enforcement, including reasonable legal
fees and other reasonable fees and expenses which the Executive
may incur. 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.
17. 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 entered on the arbitrators' award in any
court having jurisdiction. The Company shall pay all costs of
the American Arbitration Association and the arbitrator.
18. 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
8) 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 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. 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.
19. 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 such
termination is after, or within ninety (90) days prior to a
Change of Control, as defined herein. 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.
20. 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.
21. 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.
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:-------------------------------
Title:
EXECUTIVE
------------------------------------
Xxxxxx X. Xxxxxxxx
