Exhibit 10.6.2
DIRECTOR AND OFFICER INDEMNITY
AGREEMENT
This agreement (the “
Agreement ”) is made and entered into as of the
20 th day of January, 2009, by and between OSG
America L.P., a Delaware limited partnership (the “
Partnership ”), and Henry P. Flinter, (the “
Indemnitee ”).
RECITALS
A.
The Indemnitee is a Director OSG
America LLC, a Delaware limited liability company and the general
partner of the Partnership (the “ General Partner
”).
B.
Both the Partnership and the
Indemnitee recognize the increased risk of litigation and other
claims being asserted against directors and officers of public
entities in today’s environment.
C.
Section 17-108 of the Delaware
Revised Uniform Limited Partnership Act, 6 Del. C.
Section 17-101, et seq ., (the “ Act
”) expressly recognizes that, subject to such standards and
restrictions as may be set forth in its partnership agreement, a
limited partnership may, and shall have the power to, indemnify and
hold harmless any person from and against any and all claims and
demands whatsoever.
D.
Subject to the limitations set forth
therein, Section 7.07 of the Amended and Restated Agreement of
Limited Partnership of the Partnership (the “ Partnership
Agreement ”) requires the Partnership to indemnify and
advance expenses to the directors and officers of the General
Partner to the fullest extent permitted by law and the Indemnitee
has been serving and continues to serve as a Director of the
General Partner in part in reliance on such provision.
E.
In recognition of the
Indemnitee’s need for substantial protection against any
potential personal liability in order to assure the
Indemnitee’s continued service to the Partnership and General
Partner in an effective manner and the Indemnitee’s reliance
on the provisions of the Partnership Agreement and in part to
provide the Indemnitee with specific contractual assurance that the
protection promised by the Partnership Agreement will be available
to the Indemnitee, the Partnership wishes to provide in this
Agreement for the indemnification of and the advancing of expenses
to the Indemnitee to the fullest extent (whether partial or
complete) permitted by the Partnership Agreement and as set forth
in this Agreement, and, to the extent insurance is maintained, for
the continued coverage of the Indemnitee under the
Partnership’s directors’ and officers’ liability
insurance policies.
In consideration of the foregoing
and the mutual covenants contained herein, and other good and
valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as
follows:
1.
Certain
Definitions .
(a)
“Affiliate”
means, with
respect to any Person, any other Person that directly or indirectly
through one or more intermediaries controls, is controlled by or is
under
common control with, such
Person. As used herein, the term “control” means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or
otherwise.
(b)
“Board
of Directors” means the Board of Directors
of the General Partner.
(c)
“ Change
in Control ” means, and shall be deemed to have occurred
upon one or more of the following events: (i) any transaction
resulting in the Partnership (or its successor or survivor by way
of merger, consolidation, or some other transaction, or a parent or
subsidiary thereof) ceasing to be an Affiliate of OSG (or its
successor or survivor by way of merger, consolidation, or some
other transaction, or a parent or subsidiary thereof);
(ii) the limited partners of the Partnership approve, in one
transaction or a series of transactions, a plan of complete
liquidation of the Partnership; (iii) the sale or other
disposition by either the General Partner or the Partnership of all
or substantially all of its assets, or the sale or other
disposition of all or substantially all of the assets of the
Partnership’s subsidiaries, in one or more transactions to
any Person other than the General Partner or an Affiliate of the
General Partner; or (iv) a transaction resulting in a Person
other than OSG (or its successor or survivor by way of merger,
consolidation, or some other transaction, or a parent or subsidiary
thereof) or an Affiliate thereof being the general partner of the
Partnership (or its successor or survivor by way of merger,
consolidation, or some other transaction, or a parent or subsidiary
thereof).
(d)
“
Expenses ” means all direct and indirect costs of any
type or nature whatsoever (including, without limitation, all
attorneys’ fees and related disbursements and other out-of-
pocket costs) actually and reasonably incurred by the Indemnitee in
connection with the investigation, defense or appeal of or being a
witness in, participating in or preparing to defend a Proceeding or
establishing or enforcing a right to (i) indemnification or
advancement of expenses under this Agreement, the Partnership
Agreement, the Act or otherwise or (ii) directors’ and
officers’ liability insurance coverage; provided ,
however , that Expenses shall not include any judgments,
fines or penalties or amounts paid in settlement of a
Proceeding. Should any payments by the Partnership under this
Agreement be determined to be subject to any federal, state or
local income or excise tax, “Expenses” shall also
include such amounts as are necessary to place the Indemnitee in
the same after-tax position (after giving effect to all applicable
taxes) as the Indemnitee would have been in had no such tax been
determined to apply to such payments.
(e)
“
Indemnifiable Event ” is any event or occurrence
related to the fact that the Indemnitee is or was a director or
officer of the General Partner, or is or was serving at the request
of the General Partner as a director, officer, employee, trustee or
agent of another corporation, partnership, joint venture, trust,
nonprofit entity or other entity (including service with respect to
employee benefit plans), or by reason of anything done or not done
by the Indemnitee in any such capacity.
(f)
“
Indemnification Period ” shall be such period as the
Indemnitee shall continue to serve as a director or officer of the
General Partner, or shall continue at the request of the General
Partner to serve as a director, officer, employee, trustee or agent
of another corporation, partnership, joint venture, trust,
nonprofit entity or other entity, and thereafter so
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long as the Indemnitee shall
be subject to any possible Proceeding arising out of the
Indemnitee’s tenure in the foregoing positions.
(g)
“
Losses ” are any judgments, fines, penalties and
amounts paid in settlement (including all interest assessments and
other charges paid or payable in connection with or in respect of
such judgments, fines, penalties or amounts paid in settlement) of
any Proceeding.
(h)
“OSG”
means Overseas
Shipholding Group, Inc., a Delaware corporation.
(i)
“Person”
means an
individual or a corporation, firm, limited liability company,
partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or
other entity.
(j)
“
Proceeding ” shall mean any completed, actual, pending
or threatened action, suit, claim, inquiry or proceeding, whether
civil, criminal, administrative or investigative (including an
action by or in the right of the Partnership) and whether formal or
informal.
(k)
“
Reviewing Party ” shall mean (i) the Board of
Directors (provided that a majority of directors are not parties to
the Proceeding), (ii) a person or body selected by the Board
of Directors or (iii) if there has been a Change in Control,
the special independent counsel referred to in
Section 5.
2.
Indemnification and
Advancement of Expenses . Subject to the
limitations set forth in Section 4:
(a)
Indemnification
. The
Partnership shall indemnify and hold harmless the Indemnitee, to
the fullest extent permitted by the Partnership Agreement, as soon
as practicable after written demand is presented to the
Partnership, in the event the Indemnitee was or is made or is
threatened to be made a party to or witness in or is otherwise
involved in a Proceeding by reason, in whole or in part, of an
Indemnifiable Event against all Expenses and Losses incurred by the
Indemnitee in connection with such Proceeding. In the event
of any change, after the date of this Agreement, in any applicable
law, statute or rule regarding the right of a Delaware limited
partnership to indemnify any director or officer of its general
partner, such change, to the extent it would expand the
Indemnitee’s rights under this Agreement, shall be included
within the Indemnitee’s rights and the Partnership’s
obligations under this Agreement, and, to the extent it would
narrow the Indemnitee’s rights or the Partnership’s
obligations under this Agreement, shall be excluded from this
Agreement; provided , however , that any change
required by applicable laws, statutes or rules to be applied
to this Agreement shall be so applied regardless of whether the
effect of such change is to narrow the Indemnitee’s rights or
the Partnership’s obligations under this
Agreement.
(b)
Advancement of
Expenses . The Partnership
shall, to the fullest extent permitted by the Partnership
Agreement, pay the Expenses incurred by the Indemnitee as soon as
practicable after written demand is presented to the Partnership in
the event the Indemnitee was or is made or is threatened to be made
a party to or witness in or is otherwise involved in a Proceeding
by reason, in whole or in part, of an Indemnifiable Event in
advance of its final disposition; provided , however
, that, to the extent required by law, such payment of expenses
in
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advance of the final
disposition of the Proceeding shall be made only upon receipt of an
undertaking by the Indemnitee to repay all amounts advanced if it
should be ultimately determined that the Indemnitee is not entitled
to be indemnified under this Agreement, the Act or
otherwise.
(c)
Partial
Indemnity . If the Indemnitee is
entitled under any provision of this Agreement to indemnification
by the Partnership for some or a portion of the Losses or Expenses,
but not, however, for all of the total amount thereof, the
Partnership shall indemnify the Indemnitee for the portion thereof
to which the Indemnitee is entitled. Notwithstanding any
other provision of this Agreement, to the extent that the
Indemnitee has been successful on the merits or otherwise in
defense of any issue or matter therein, including dismissal without
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