UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14D-9
(Rule
14d-101)
Solicitation/Recommendation
Statement
Under
Section 14(d)(4) of the Securities Exchange Act of 1934
OVERSEAS
SHIPHOLDING GROUP, INC.
(Name
of Subject Company)
OVERSEAS
SHIPHOLDING GROUP, INC.
(Name
of Person(s) Filing Statement)
Class
A Common Stock, $0.01 par value per share
(Title
of Class of Securities)
69036R863
(CUSIP
Number of Common Stock)
Samuel
H. Norton
Chief
Executive Officer
Overseas
Shipholding Group, Inc.
Two
Harbour Place
302
Knights Run Avenue, Suite 1200
Tampa,
Florida 33602
(813)
209-0600
(Name,
Address and Telephone Number of Person Authorized
to
Receive Notices and Communications on Behalf of the Person(s) Filing Statement)
With
copies to:
Philip
Richter
Ryan
Messier
Fried,
Frank, Harris, Shriver & Jacobson LLP
One
New York Plaza
New
York, New York 10004
(212)
859-8000
| ☐ |
Check the box if the filing
relates solely to preliminary communications made before the commencement of a tender offer. |
TABLE
OF CONTENTS
ITEM
1. SUBJECT COMPANY INFORMATION
Name
and Address
The
name to which this Schedule 14D-9 (together with any exhibits and annexes attached hereto, as it may be amended or supplemented, this
“Schedule 14D-9”) relates is Overseas Shipholding Group, Inc., a Delaware corporation (“OSG” or
the “Company”). The address of OSG’s principal executive office is 302 Knights Run Avenue, Suite 1200, Tampa,
Florida 33602. The business telephone number of OSG’s principal executive office is (813) 209-0600.
Securities
The
title of the class of equity securities to which this Schedule 14D-9 relate is OSG’s Class A common stock, par value $0.01 per
share (the “Shares” or “Class A Common Stock”). At the close of business on June 6, 2024, there
were (i) 72,030,977 shares of Class A Common Stock issued and outstanding, (ii) outstanding options to acquire a total of 1,478,756 shares
of Class A Common Stock (“Company Stock Options”), (iii) outstanding restricted stock unit awards (“Company
RSU Awards” and together with the Company Stock Options, the “Company Equity Awards”) for a total of 3,310,622
shares of Class A Common Stock (assuming maximum (150% of target level) achievement of performance goals for performance-based Company
RSU Awards) and (iv) outstanding Company Warrants (as defined below) to acquire a total of 507,535 shares of Class A Common Stock.
ITEM
2. IDENTITY AND BACKGROUND OF FILING PERSON
Name
and Address
The
name, business address and business telephone number of the Company, which is both the person filing this Schedule 14D-9 and the subject
company, are set forth below in Item 1 under the heading “Subject Company Information—Name and Address,” which
information is incorporated herein by reference.
Tender
Offer and Merger
This
Schedule 14D-9 relates to a tender offer by Seahawk MergeCo., Inc., a Delaware corporation (“Purchaser”) and wholly
owned subsidiary of Saltchuk Resources, Inc., a Washington corporation (“Parent” or “Saltchuk”),
to purchase all of the issued and outstanding shares of Class A Common Stock of OSG for $8.50 per Share (the “Offer Price”),
without interest and subject to any applicable withholding taxes. The tender offer is being made subject to the terms and conditions
set forth in the Purchaser’s Offer to Purchase, dated June 10, 2024 (as amended or supplemented from time to time, the “Offer
to Purchase”), and in the related Letter of Transmittal (as amended or supplemented from time to time, the “Letter
of Transmittal” which, together with the Offer to Purchase, constitutes the “Offer”).
The
Offer is described in the Tender Offer Statement on Schedule TO (as amended or supplemented from time to time, the “Schedule
TO”) filed by Purchaser and Parent with the Securities and Exchange Commission (the “SEC”) on June 10, 2024.
The Offer to Purchase and the form of Letter of Transmittal are filed as Exhibits (a)(1)(A) and (a)(1)(B) to the Schedule TO, respectively,
are included as Exhibits (a)(1)(i) and (a)(1)(ii) to this Schedule 14D-9, respectively, and are incorporated herein by reference. The
Offer to Purchase and form of Letter of Transmittal are being mailed to OSG’s stockholders together with this Schedule 14D-9.
The
Offer is being made pursuant to an Agreement and Plan of Merger (as amended or supplemented from time to time, the “Merger Agreement”),
dated as of May 19, 2024, among Parent, Purchaser and OSG.
Pursuant
to the Offer, subject to the satisfaction (or to the extent permitted, waiver) of conditions to the Offer, under the terms set forth
in the Merger Agreement, the Purchaser is required to, and Parent is required to cause the Purchaser to, consummate the Offer, accept
for payment and thereafter pay for all Shares validly tendered and not validly withdrawn pursuant to the Offer, at the Offer Price.
The
Offer will expire at one (1) minute after 11:59 p.m., New York City time, on July 9, 2024, the date that is twenty (20) business days
(as determined as set forth in Rule 14d-1(g)(3) under the Exchange Act (as defined below)) from commencement of the Offer, unless the
Offer is extended under the circumstances outlined below, as set forth in the Merger Agreement and described in the Offer to Purchase.
For the purpose of this Schedule 14D-9, the “Initial Expiration Date” means the 11:59 p.m., New York City time, on
July 9, 2024, and “Expiration Date” means the Initial Expiration Date, unless the Offer is extended pursuant to and
in accordance with the Merger Agreement and the applicable rules and regulations of the SEC, in which case the “Expiration Date”
will be that date and time to which the Offer is extended pursuant to and in accordance with the Merger Agreement and the applicable
rules and regulations of the SEC.
The
Offer may be extended under the following circumstances: (i) if, as of the then-scheduled Expiration Date, any Offer Condition (as defined
below) is not satisfied and, if waivable, has not been waived by Purchaser or Parent, Purchaser may, in its discretion (and without the
consent of OSG or any other person), extend the Offer on up to two (2) occasions, for an additional period of up to ten (10) business
days (as determined as set forth in Rule 14d-1(g)(3) under the Exchange Act) per extension (or such longer period as OSG and Purchaser
may mutually agree in writing), to permit such Offer Condition to be satisfied, (ii) Purchaser shall, and Parent shall cause Purchaser
to, extend the Offer from time to time for the minimum period required by any law, any interpretation or position of the SEC, the staff
thereof or any rules and regulations of the New York Stock Exchange applicable to the Offer, and (iii) if, as of any then-scheduled Expiration
Date, any Offer Condition is not satisfied and has not been waived, OSG may require Purchaser to extend the Offer on one or more occasions,
for an additional period of up to ten (10) business days (as determined as set forth in Rule 14d-1(g)(3) under the Exchange Act) per
extension (or such longer period as the parties may mutually agree in writing), to permit such Offer Condition to be satisfied (provided,
that (A) in no event shall Purchaser be required to extend the Offer beyond the valid termination of the Merger Agreement or beyond February
19, 2025 and (B) in the event that the Minimum Condition (as defined below) is the only Offer Condition not satisfied or waived (other
than the Offer Conditions that by their nature are only satisfied as of the Offer Acceptance Time (as defined below)), OSG may not require
Purchaser to extend the Offer on more than five (5) such occasions of ten (10) business days (as determined as set forth in Rule 14d-1(g)(3)
under the Exchange Act)).
Consummation
of the Offer is subject to the satisfaction (or, to the extent permitted, waiver) of certain conditions set forth in the Merger Agreement,
including, but not limited to, (i) the number of Shares validly tendered and “received” (within the meaning of Section 251(h)
of the DGCL (“Section 251(h)”)) and not validly withdrawn prior to the expiration of the Offer (excluding any Shares
tendered pursuant to guaranteed delivery procedures that have not yet been “received” (as defined in Section 251(h))), together
with the Shares owned by Parent, Purchaser and any of their respective affiliates as of expiration of the Offer, equals at least one
Share more than a majority of all issued and outstanding Shares as of the expiration of the Offer, other than any Shares held in treasury
by the Company as of the expiration of the Offer or any other Shares acquired by the Company prior to the expiration of the Offer (the
“Minimum Condition”), (ii) the accuracy of the representations and warranties of the Company set forth in the Merger
Agreement (subject to certain exceptions and qualifications described in the Merger Agreement and except, generally, for inaccuracies
that do not constitute a Company Material Adverse Effect (as defined in the Merger Agreement)), (iii) the Company’s performance
and compliance in all material respects of its agreements and covenants contained in the Merger Agreement that are required to be performed
or complied with by it at or prior to the Offer Acceptance Time (defined below), (iv) no governmental entity of competent jurisdiction
enacting or promulgating any law after May 19, 2024, the date of the Merger Agreement, or issued any order after May 19, 2024, that is
in effect and restrains, enjoins or otherwise prohibits the acquisition of or payment for the Shares pursuant to the Offer or consummation
of the Merger, (v) the expiration or termination of the waiting period applicable to the Offer (and any extension thereof) under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) (vi) no Company Material Adverse
Effect occurring since May 19, 2024, (vii) Parent and Purchaser receiving a certificate of the Company, signed by an executive officer
of the Company and dated as of the date of the Offer Acceptance Time, to the effect that the conditions referenced in (ii), (iii) and
(vi) above have been satisfied and (viii) the Merger Agreement not being terminated in accordance with its terms, such conditions referenced
in (i) through (viii) above and as further detailed in Annex I to the Merger Agreement (the “Offer Conditions”). The
obligations of Parent and Purchaser to consummate the Offer and the Merger under the Merger Agreement are not subject to a financing
condition.
On
the terms and subject to the conditions of the Offer and the Merger Agreement, including the satisfaction or, to the extent waivable
by Purchaser or Parent, waiver by Purchaser or Parent of each of the Offer Conditions, Purchaser is required to (and Parent is required
to cause Purchaser to) (A) promptly, and in no event later than 9:00 a.m. Eastern Time one (1) business day (as determined as set forth
in Rule 14d-1(g)(3) under the Exchange Act) after the Expiration Date, irrevocably accept for payment all Shares validly tendered (and
not validly withdrawn) pursuant to the Offer (the time of such acceptance, the “Offer Acceptance Time”) and (B) as
promptly as practicable after the Offer Acceptance Time (and in any event within two (2) business days (as determined as set forth in
Rule 14d-1(g)(3) under the Exchange Act) thereafter) pay (subject to any required tax withholdings as provided in the Merger Agreement)
for such Shares.
Pursuant
to the Merger Agreement, after all Shares tendered into the Offer have been accepted for payment by or on behalf of Purchaser and the
satisfaction or waiver of certain conditions set forth in the Merger Agreement, and in accordance with the General Corporation Law of
the State of Delaware, as amended (the “DGCL”), Purchaser will merge with and into OSG (the “Merger”
and together with the Offer and the other transactions contemplated by the Merger Agreement, the “Transactions”),
with OSG continuing as the surviving corporation in the Merger (the “Surviving Corporation”) and as a wholly owned
subsidiary of Parent. The Merger will be consummated in accordance with Section 251(h) of the DGCL, which provides that, following consummation
of a successful tender offer for a public corporation, and subject to certain statutory provisions, if the shares irrevocably accepted
for purchase in the offer together with the shares otherwise owned by the acquiring corporation and its affiliates equals at least the
number of shares of each class of stock of the target corporation that would otherwise be required to adopt a merger agreement for the
target corporation, and the other stockholders receive the same consideration for their stock in the merger as was payable in the tender
offer, the acquiring corporation may effect a merger without the action of the other stockholders of the target corporation. Accordingly,
if Purchaser consummates the Offer, the Merger Agreement contemplates that the parties will effect the closing of the Merger without
a vote of the stockholders of OSG in accordance with Section 251(h).
At
the effective time of the Merger (the “Effective Time”), the Shares not tendered pursuant to the Offer (other than
(i) any Shares held by OSG in treasury or by Parent or Purchaser (or any other wholly owned subsidiary of Parent) immediately prior to
the Effective Time (including any Shares irrevocably accepted for purchase by Purchaser in the Offer), which shall at the Effective Time
automatically be cancelled and shall cease to exist, and no consideration shall be delivered or deliverable in exchange therefor and
(ii) any Shares that are issued and outstanding immediately prior to the Effective Time and are held by a holder who is entitled to,
and has properly demanded, appraisal rights under the DGCL and has not validly revoked such demand) shall be automatically cancelled
and converted into the right to receive an amount in cash equal to the Offer Price (the “Merger Consideration”), without
interest and subject to applicable withholding taxes.
The
Merger Agreement has been filed herewith as Exhibit (e)(1) and is incorporated herein by reference. The Merger Agreement is summarized
in Section 11 under the heading “The Tender Offer—Summary of the Merger Agreement and Certain Other
Agreements” of the Offer to Purchase.
The
foregoing summary and description of the Merger Agreement and the Transactions are qualified in their entirety by the more detailed description
contained in the Offer to Purchase and accompanying Letter of Transmittal and the Merger Agreement.
Parent
represented to the Company that it formed Purchaser for the purpose of effecting the Offer and the Merger. As set forth in the Schedule
TO, the address of Parent and Purchaser is Saltchuk Resources, Inc., 450 Alaskan Way South, Suite 780, Seattle, Washington 98104. The
business telephone number of each of Parent and Purchaser is (206) 652-1111.
OSG
has made information relating to the Offer available online at www.osg.com/investors and OSG has filed this Schedule 14D-9, and Parent
and Purchaser have filed the Schedule TO, with the SEC, and these documents are available free of charge at the website maintained by
the SEC at www.sec.gov. The information contained in, accessible from or connected to OSG’s website is not incorporated
into, or otherwise a part of, this Schedule 14D-9 or any of OSG’s filings with the SEC. The website addresses referred to in this
paragraph are inactive text references and are not intended to be actual links to the websites.
ITEM
3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
Except
as set forth in this Schedule 14D-9 or as otherwise incorporated herein by reference, as of the date hereof, to the knowledge of the
Company, there are no material agreements, arrangements or understandings, or any actual or potential conflicts of interest, between
the Company or any of its affiliates on the one hand, and (i) the Company’s executive offers, directors or affiliates or (ii) Parent
or Purchaser or their respective executive officers, directors or affiliates, on the other hand.
Any
information that is incorporated herein by reference shall be deemed modified or superseded for purposes of this Schedule 14D-9 to the
extent that any information contained herein modifies or supersedes such information.
Arrangements
Between the Company and its Directors and Executive Officers
Interests
of Certain Persons
The
executive officers and members of the board of directors of OSG (the “Company Board”) may be deemed to have interests
in the Offer and the Merger that may be different from, or in addition to, those of the Company’s stockholders generally. The Company
Board was aware of these interests and considered them, among other matters, below during its deliberations of the merits of the Merger
Agreement and in determining to make the recommendations set forth in this Schedule 14D-9, these interests include:
| ● | Cash
payments in respect of their outstanding Company Stock Options, whether vested or unvested,
shortly after the Offer Acceptance Time; |
| | | |
| ● | Accelerated
vesting and cash payments in respect of their time-vesting Company RSU Awards (including
any then-unpaid “cash award” granted in connection with the Company’s retention
program in 2022) and certain performance-vesting Company RSU Awards shortly after the Offer
Acceptance Time; |
| | | |
| ● | Conversion
of certain of their performance-vesting Company RSU Awards into unvested cash awards at the
Offer Acceptance Time, with such unvested cash awards no longer subject to any performance
goal(s) that applied prior to the consummation of the Merger and instead subject only to
potential increase by up to 50% based on performance goal(s) to be mutually agreed by Parent
and Company management and potential accelerated vesting in connection with qualifying terminations
of employment; |
| | | |
| ● | The
potential receipt of severance payments and benefits by the executive officers under their
respective employment agreements if their employment is terminated; and |
| | | |
| ● | The
potential receipt of transaction bonuses by the executive officers pursuant to the Good Reason
Waivers and transaction bonus agreements, as applicable. |
Shares
Held by Directors and Executive Officers
If
the directors and executive officers of the Company who own Shares tender their Shares for purchase pursuant to the Offer or their Shares
are cancelled in the Merger, they will receive the same cash consideration on the same terms and conditions as the other stockholders
of the Company, as described in the Merger Agreement. As of June 6, 2024, the directors and executive officers of the Company beneficially
own, in the aggregate, 4,938,681 Shares (excluding Shares subject to outstanding Company Stock Options and Company RSU Awards).
The
following table sets forth (i) the number of Shares owned as of June 6, 2024, by each of the directors and executive officers (excluding
Shares subject to outstanding Company Stock Options and Company RSU Awards) and (ii) the aggregate cash consideration that would be payable
for such Shares pursuant to the Offer based on an Offer Price of $8.50 per Share.
| Name | |
Shares (#) | | |
Cash
Amount for Shares ($) | |
| Directors: | |
| | | |
| | |
| Douglas D. Wheat | |
| 196,933 | | |
| 1,673,931 | |
| Rebecca K. DeLaet | |
| 115,300 | | |
| 980,050 | |
| Joseph I. Kronsberg | |
| 227,500 | | |
| 1,933,750 | |
| Elaine G. Luria | |
| 40,000 | | |
| 340,000 | |
| Samuel H. Norton | |
| 2,252,479 | | |
| 19,146,072 | |
| John P. Reddy | |
| 186,353 | | |
| 1,584,001 | |
| Julie E. Silcock | |
| 134,212 | | |
| 1,140,802 | |
| Gary E. Taylor | |
| 203,541 | | |
| 1,730,099 | |
| Other Executive Officers: | |
| | | |
| | |
| Richard L. Trueblood | |
| 433,311 | | |
| 3,683,144 | |
| Patrick J. O’Halloran | |
| 410,365 | | |
| 3,488,103 | |
| Damon M. Mote | |
| 409,709 | | |
| 3,482,527 | |
| Susan M. Allan | |
| 328,978 | | |
| 2,796,313 | |
Treatment
of Company Equity Awards in the Transactions
Treatment
of Company Stock Options
As
of the Offer Acceptance Time, each then-outstanding Company Stock Option, whether vested or unvested, will, immediately prior to the
Offer Acceptance Time, be canceled and converted into the right to receive an amount in cash equal to the product of (i) the excess,
if any, of the Offer Price over the exercise price per Share of such Company Stock Option, multiplied by (ii) the total number of Shares
subject to such Company Stock Option, subject to applicable tax withholding. Any Company Stock Option that has an exercise price per
Share that is greater than or equal to the Offer Price will be canceled for no consideration.
The
following table sets forth (i) the aggregate number of Shares, both vested and unvested, subject to Company Stock Options held by the
Company’s directors and executive officers as of June 6, 2024, and (ii) the aggregate cash consideration that will be payable in
respect of such Company Stock Options at the Offer Acceptance Time, calculated by multiplying (A) the excess of the Offer Price of $8.50
per Share over the respective per Share exercise prices of such Company Stock Options, by (B) the number of Shares subject to such Company
Stock Options.
| Name | |
Shares
Subject to Company Stock Options (#) | | |
Cash
Amount for Company Stock Options ($) | |
| Directors: | |
| | | |
| | |
| Douglas D. Wheat | |
| - | | |
| - | |
| Rebecca K. DeLaet | |
| - | | |
| - | |
| Joseph I. Kronsberg | |
| - | | |
| - | |
| Elaine G. Luria | |
| - | | |
| - | |
| Samuel H. Norton | |
| 1,422,318 | | |
| 8,404,407 | |
| John P. Reddy | |
| - | | |
| - | |
| Julie E. Silcock | |
| - | | |
| - | |
| Gary E. Taylor | |
| - | | |
| - | |
| Other Executive Officers: | |
| | | |
| | |
| Richard L. Trueblood | |
| - | | |
| - | |
| Patrick J. O’Halloran | |
| 18,078 | | |
| 80,628 | |
| Damon M. Mote | |
| 18,078 | | |
| 80,628 | |
| Susan M. Allan | |
| 20,282 | | |
| 90,458 | |
Treatment
of Time-Based Company RSU Awards
Immediately
prior to the Offer Acceptance Time, each then-outstanding time-vesting Company RSU Award (other than the 2024 Director Awards (defined
below)) will be canceled in exchange for the right to receive an amount in cash equal to the sum of (i) the product of (A) the Offer
Price, multiplied by (B) the total number of Shares subject to such Company RSU Award, plus (ii) an amount equal to any dividend equivalent
rights then accrued with respect to such Company RSU Award, plus (iii) any then-unpaid “cash award” granted in connection
with the Company’s retention program in 2022. This cash amount will be subject to applicable tax withholding.
On
June 6, 2024, the Company granted each of its non-employee directors an award of such number of time-vesting restricted stock units equal
to $100,000, rounded to the nearest 100 shares of Class A Common Stock and based on a 20-trading day volume-weighted average price ending
the day prior to the date of the grant (or, in the case of the Company’s Chairman, Mr. Wheat, such number of time-vesting restricted
stock units equal to $150,000, rounded to the nearest 100 shares of Class A Common Stock and based on a 20-trading day volume-weighted
average price ending the day prior to the date of the grant) (collectively, the “2024 Director Awards”). The 2024
Director Awards provide for vesting upon the Offer Acceptance Time only with respect to that number of Shares subject thereto equal to
(i) a fraction, the numerator of which is the number of calendar months that have elapsed in whole or in part from and after June 6,
2024 through the Offer Acceptance Time and the denominator of which is twelve (12), multiplied by (ii) the total number of Shares subject
thereto (rounded up), and all remaining Shares subject thereto shall be forfeited.
The
following table sets forth the aggregate number of Shares subject to time-vesting Company RSU Awards held by each of the Company’s
directors and executive officers as of June 6, 2024, and the aggregate cash consideration that would be payable upon consummation of
the Merger for such Company RSU Awards based on the Offer Price of $8.50 per Share at the Offer Acceptance Time.
| Name | |
Shares
Subject to Time-Vesting Company RSU Awards (#) | | |
Cash
Amount for Time-Vesting Company RSU Awards ($) | |
| Directors: | |
| | | |
| | |
| Douglas D.
Wheat(1) | |
| 57,300 | | |
| 363,546 | |
| Rebecca K. DeLaet(1) | |
| 38,100 | | |
| 241,982 | |
| Joseph I. Kronsberg(1) | |
| 38,100 | | |
| 241,982 | |
| Elaine G. Luria(1) | |
| 38,100 | | |
| 241,982 | |
| Samuel H. Norton | |
| 552,075 | | |
| 4,889,096 | |
| John P. Reddy(1) | |
| 38,100 | | |
| 241,982 | |
| Julie E. Silcock(1) | |
| 38,100 | | |
| 241,982 | |
| Gary E. Taylor(1) | |
| 38,100 | | |
| 241,982 | |
| Other Executive Officers: | |
| | | |
| | |
| Richard L. Trueblood | |
| 121,967 | | |
| 1,199,328 | |
| Patrick J. O’Halloran | |
| 112,822 | | |
| 1,100,654 | |
| Damon M. Mote | |
| 111,300 | | |
| 1,087,566 | |
| Susan M. Allan | |
| 81,938 | | |
| 812,383 | |
| (1) | Outstanding
Company RSU Awards held by each of the Company’s non-employee directors that were granted
on June 15, 2023 will vest on June 15, 2024. |
Treatment
of Performance-Based Company RSU Awards
Immediately
prior to the Offer Acceptance Time, each then-outstanding Company RSU Award that is subject to performance goal(s) for which the performance
period is set to end in year 2024 (“2024 Company PRSU Awards”) will be canceled in exchange for the right to receive
an amount in cash equal to the sum of (i) the product of (A) the Offer Price, multiplied by (B) the total number of Shares subject to
such 2024 Company PRSU Award plus (ii) an amount equal to any dividend equivalent rights then accrued with respect to such 2024 Company
PRSU Award, subject to applicable tax withholding. The number of Shares subject to a 2024 Company PRSU Award (and any related dividend
equivalent rights), as applicable, will be determined based on the actual achievement of such performance goal(s), measured through the
Offer Acceptance Time, up to a maximum of 150% of target level.
Immediately
prior to the Offer Acceptance Time, each then-outstanding Company RSU Award that is subject to performance goal(s) as of immediately
prior to the Offer Acceptance Time for which the performance period is originally scheduled to end in 2025 or 2026 will be canceled in
exchange for the right to receive an amount in cash equal to the sum of (i) the product of (A) the Offer Price, multiplied by (B) the
total number of Shares subject to such Company RSU Award, assuming target level achievement, plus (ii) an amount equal to any dividend
equivalent rights then accrued with respect to such Company RSU Award or portion thereof (and any related dividend equivalent rights),
as applicable, subject to applicable tax withholding (a “Target Cash Award”). Each Target Cash Award will no longer
be subject to such performance goal(s), and will otherwise remain subject to the same terms, conditions, restrictions and vesting arrangements
that were applicable to the corresponding Company RSU Award immediately prior to the Offer Acceptance Time. Each Target Cash Award will
become payable by Parent (through the Company’s payroll) on the date that the applicable Company RSU Award would have become vested
in accordance with its terms immediately prior to the Offer Acceptance Time or on the applicable holder’s earlier Good Leaver Termination
(as defined below), and may be increased, but not decreased, by up to 50% based on performance goal(s) to be mutually determined by Parent
and Company management as soon as practicable following the Effective Time. For purposes of each Target Cash Award, “Good Leaver
Termination” means a termination of the employment of the holder of such award that, per the terms of the corresponding Company
RSU Award, any employment agreement with such holder, or any other employee benefit plan of the Company in effect as of the Offer Acceptance
Time, would have triggered accelerated vesting and payment of the corresponding Company RSU Award.
The
following table sets forth the aggregate number of Shares subject to performance-vesting Company RSU Awards held by each of the Company’s
directors and executive officers as of June 6, 2024, the aggregate cash consideration that would be payable upon consummation of the
Merger for the 2024 Company PRSU Awards based on the Offer Price of $8.50 per Share at the Offer Acceptance Time (assuming that 2024
Company PRSU Awards are earned at 150% of target), and the aggregate cash consideration that would be payable for Target Cash Awards
after all applicable time-vesting conditions are satisfied following consummation of the Merger based on the Offer Price of $8.50 per
Share following the Offer Acceptance Time (assuming such awards are paid at target once earned).
| Name | |
Shares
Subject to Performance-Vesting Company RSU Awards (#) | | |
Cash
Amount for 2024 Company PRSU Awards Payable at Closing ($) | | |
Amount
of Target Cash Awards Eligible to be Earned After Closing ($) | |
| Directors: | |
| | |
| | |
| |
| Douglas D. Wheat | |
| - | | |
| - | | |
| - | |
| Rebecca K. DeLaet | |
| - | | |
| - | | |
| - | |
| Joseph I. Kronsberg | |
| - | | |
| - | | |
| - | |
| Elaine G. Luria | |
| - | | |
| - | | |
| - | |
| Samuel H. Norton | |
| 714,367 | | |
| 3,286,625 | | |
| 2,863,928 | |
| John P. Reddy | |
| - | | |
| - | | |
| - | |
| Julie E. Silcock | |
| - | | |
| - | | |
| - | |
| Gary E. Taylor | |
| - | | |
| - | | |
| - | |
| Other Executive Officers: | |
| | | |
| | | |
| | |
| Richard L. Trueblood | |
| 209,252 | | |
| 1,005,333 | | |
| 796,392 | |
| Patrick J. O’Halloran | |
| 193,153 | | |
| 927,986 | | |
| 735,121 | |
| Damon M. Mote | |
| 189,935 | | |
| 912,522 | | |
| 722,878 | |
| Susan M. Allan | |
| 128,875 | | |
| 573,032 | | |
| 536,449 | |
Payments
Upon Termination or Change of Control
CEO
Employment Agreement
The
Company previously entered into an employment agreement with Samuel H. Norton, OSG’s President, Chief Executive Officer and Director.
This employment agreement provides that, if Mr. Norton is terminated without “Cause” or resigns for “Good Reason”
(each, as defined in his employment agreement) during the two-year period following a change in control of the Company (such as the Offer
and the Merger), then Mr. Norton will receive the following, in exchange for a release of claims:
| ● | Accrued
or earned but unpaid amounts through the date of separation of service, including base salary,
unused vacation time, business expense reimbursement, annual incentives, and vested but unsettled
equity awards; |
| | | |
| ● | Twelve
(12) months’ continuation of annual base salary; |
| | | |
| ● | continued
exercisability of his vested stock options through the earlier of (i) one year from the date
of termination and (ii) the full term of the stock option; |
| | | |
| ● | his
full annual bonus for the year of separation; |
| | | |
| ● | accelerated
vesting of any unvested time-based equity awards; and |
| | | |
| ● | vesting
of unvested performance-based equity awards in accordance with the terms of the grant agreements,
which provide for a prorated portion to vest at the end of the performance period to the
extent the performance goals are achieved. |
Other
Executive Officer Employment Agreements
The
Company previously entered into an employment agreement with Richard L. Trueblood, Vice President and Chief Financial Officer; Patrick
J. O’Halloran, Vice President and Chief Operations Officer; Damon Mote, Vice President and Chief Administrative Officer; and Susan
M. Allan, Vice President, General Counsel and Corporate Secretary. Each employment agreement provides that, if the executive officer
is terminated without “Cause” or resigns for “Good Reason” (each, as defined in the applicable employment agreement)
during the two-year period following a change in control of the Company (such the Offer and the Merger), then the executive officer will
receive the following, in exchange for a release of claims:
| ● | accrued
or earned but unpaid amounts through the date of separation of service, including base salary,
unused vacation time, and business expense reimbursement; |
| | | |
| ● | twelve
(12) months’ continuation of annual base salary; |
| | | |
| ● | the
executive officer’s full target bonus for the year of separation; |
| | | |
| ● | vesting
and continued exercisability of all stock options through the earlier of (i) one year from
the date of termination or (ii) the full term of the stock option; and |
| | | |
| ● | accelerated
vesting of all unvested equity awards (time-based and performance-based), with performance-based
awards satisfied at the maximum level and vesting pro rata based on the date of separation. |
Good
Reason Waivers and Transaction Bonuses
The
Company and Parent have entered into Good Reason Waivers with each of Messrs. Norton, O’Halloran, and Mote and Ms. Allan (each
individually a “Waiver Executive” and, collectively, “Waiver Executives”), pursuant to which each
Waiver Executive has waived his or her ability to resign for “Good Reason” under his or her employment agreement due to the
mere occurrence of the Offer and Merger or any change in employment duties and responsibilities that reasonably result from the fact
that the Company will cease to be publicly traded.
As
an inducement for the Waiver Executives to waive his or her ability to resign for “Good Reason” under his or her employment
agreement in connection with the Offer and Merger, Parent has agreed to negotiate new employment agreements with each of the Waiver Executives
in good faith, which will provide for (i) compensation and benefits that are consistent in all respects with Parent’s employee-related
obligations under the Merger Agreement, which are described under “—Treatment
of Continuing Employees” below, and (ii) long-term incentive opportunities that provide substantially equivalent value as each
Waiver Executive’s annual long-term equity-based compensation granted in 2024. If Parent fails to enter into a new employment agreement
with any Waiver Executive before the 60th day following consummation of the Merger, that Waiver Executive’s Target Cash Awards
will be accelerated and paid in full promptly thereafter, with performance-based awards paid assuming performance achievement at target.
As
an additional inducement for the Good Reason Waivers and in recognition of the Waiver Executives’ contributions to the transaction,
the Company agreed to pay the Waiver Executives the following transaction bonuses, subject to their continued employment with the Company
through consummation of the Merger:
| Name | |
Transaction
Bonus Amount ($) | |
| Samuel H. Norton | |
| 475,000 | |
| Patrick J. O’Halloran | |
| 125,000 | |
| Damon M. Mote | |
| 125,000 | |
| Susan M. Allan | |
| 125,000 | |
Additionally,
the Company agreed to provide Mr. Trueblood with a transaction bonus equal to $150,000 (“Transaction Bonus Letter”),
less applicable withholdings and deductions, in recognition of his contributions to the Merger and subject to his continued employment
with the Company through consummation of the Merger.
The
foregoing summaries and descriptions of the material terms of the Transaction Bonus Letter and Good Reason Waivers do not purport to
be complete and are qualified in their entirety by reference to the full text of the Transaction Bonus Letter, which is filed as Exhibit
(e)(3)(v) hereto and is incorporated herein by reference, and the full text of the Good Reason Waivers, which are filed as Exhibit (e)(3)(i),
(ii),(iii), and (iv) and are incorporated herein by reference.
Treatment
of Continuing Employees
Parent
has agreed to, or to cause an applicable subsidiary to, during the period commencing on the date on which the Merger closes (the “Closing
Date”) and ending on December 31, 2025, provide each employee of the Company or any subsidiary for whom a contract with a union,
labor organization or works council does not govern the terms and conditions of employment (a “Nonunion Employee”),
who was a Nonunion Employee immediately prior to the Offer Acceptance Time, and who continues in employment with Parent or any subsidiary
following the Effective Time (collectively, the “Continuing Employees”) with (i) a principal work assignment located
at the same or a reasonably similar geographic location to such Continuing Employee’s geographic work location as in effect as
of immediately prior to the Closing Date (including, if applicable, a remote work arrangement consistent with any such arrangement in
effect as of the Closing Date), (ii) job responsibilities that are substantially comparable to the responsibilities of such Continuing
Employee as of the Closing Date, other than job responsibilities that reasonably result from the Company’s transition to a non-publicly
traded company, (iii) a base salary, base compensation, or regular hourly wage (whichever is applicable) and an annual or shorter-term
cash incentive compensation opportunity that, in each case, is not less than the base salary, base compensation, or regular hourly wage
and such short-term cash incentive compensation opportunity in effect for the applicable Continuing Employee as of immediately prior
to the Effective Time (excluding, for the avoidance of doubt, any special cash-based retention awards), and (iv) retirement, health,
and welfare benefits (including, but not limited to, any health, welfare, vacation and select time, severance benefits, and retirement
benefits) that are substantially similar (including, if applicable, with respect to costs for the applicable Continuing Employee) in
the aggregate to the retirement, health, and welfare (including, but not limited to, any health, welfare, vacation and select time, severance
benefits, and retirement benefits) provided or available to the applicable Continuing Employee as of immediately prior to the Effective
Time.
In
addition, for fiscal year 2025, Parent will, or will cause its applicable subsidiary to, provide each Continuing Employee with a long-term
cash compensation opportunity that is substantially similar (including, at the discretion of Parent, shorter-term compensation opportunities
with a substantially similar quantum of payment opportunities) to the long-term equity compensation opportunity granted to such Continuing
Employee for fiscal year 2024, based on the dollar value of the target Shares covered by such long-term equity compensation opportunity
on the grant date, and excluding any special retention or similar equity-based compensation provided prior to the Effective Time.
During
the period commencing on the Closing Date and ending on the second anniversary thereof, the Company will provide each Continuing Employee
whose employment is terminated by Parent or one of its subsidiaries with severance benefits and on terms and conditions, in each case,
that are no less favorable than the severance benefits and protections such Continuing Employee had as of the date the Merger Agreement
was executed.
Parent
will also cause any employee benefit plans of Parent and its subsidiaries in which the Continuing Employees are entitled to participate
after the Closing Date to take into account, for purposes of eligibility, vesting, and benefit accruals (other than benefit accruals
under any defined benefit pension plan or as would result in a duplication of benefits), the Continuing Employees’ years of service
prior to the Effective Time, as if such service were with Parent or its subsidiaries.
With
respect to any employee benefit plans maintained by Parent and its subsidiaries for the benefit of the Continuing Employees following
the Closing Date, Parent will, and will cause the Surviving Corporation and its subsidiaries to, use commercially reasonable efforts
to (i) waive any eligibility requirements or pre-existing condition limitations or waiting period requirements with respect to any such
plan providing medical, dental, pharmaceutical, vision, or mental health benefits to any Continuing Employee to the same extent waived
under the analogous benefit plan of the Company prior to the Closing Date, and (ii) give effect, in determining any deductible, co-insurance,
and maximum out-of-pocket limitations, to any eligible expenses paid by such employees during the calendar year in which the Effective
Time occurs (or such later date on which a Continuing Employee commences participation in any new plan of the Surviving Corporation and
its subsidiaries) under any analogous benefit plan of the Company.
For
fiscal year 2025 and 2026, Parent will, or will cause its applicable subsidiary to, continue to maintain the Company’s annual bonus
program for Continuing Employees who were executive officers immediately prior to the Offer Acceptance Time, with objective performance
metrics equitably adjusted as needed to reflect the post-closing structure of the Company (which, pursuant to such adjustments, will
be no less favorable to the executive officers than the terms of the Company’s annual bonus program).
Golden
Parachute Compensation
For
purposes of this Schedule 14D-9, the Company’s named executive officers consist of each of Messrs. Norton, Trueblood, O’Halloran,
and Mote and Ms. Allan.
The
table below assumes that (i) the Offer Acceptance Time occurs on June 6, 2024 (which is the assumed date solely for purposes of this
golden parachute compensation disclosure), (ii) each named executive officer who remains in employment with the Company as of the date
hereof experiences a termination without cause immediately following the Effective Time, (iii) the named executive officers’ base
salaries remain unchanged from those in place as of the date of this Schedule 14D-9, (iv) no named executive officer receives any additional
equity awards following the date of this Schedule 14D-9, (v) no named executive officer enters into any new agreement with the Company
following the date of this Schedule 14D-9 or otherwise becomes legally entitled to additional compensation or benefits, and (vi) no payments
or benefits are subject to a “net best cut-back” such that the payments or benefits that the executive receives in connection
with a change in control would be reduced to the extent necessary to avoid the imposition of any excise tax under Sections 280G and 4999
of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, if such reduction would result in a greater
after-tax payment amount for the executive.
The
amounts shown in the table below includes the value of each named executive officer’s Company RSU Awards that will either be accelerated
and paid out as of the Offer Acceptance Time or converted into Target Cash Awards but otherwise do not include amounts that the named
executive officers would have been entitled to receive regardless of whether the Offer Acceptance Time has occurred, that were vested
as of June 6, 2024, or that are provided under contracts, agreements, plans, or arrangements to the extent they do not discriminate in
scope, terms, or operation in favor of a named executive officer and that are generally available to all of the Company’s salaried
employees.
The
estimated amounts below are based on multiple assumptions that may not actually occur, including assumptions described in this Schedule
14D-9. As a result, the actual amounts, if any, that a named executive officer receives may materially differ from the amounts set forth
in the tables below.
| Name | |
Cash ($)(1) | | |
Equity ($)(2) | | |
Total ($) | |
| Samuel H. Norton | |
| 1,434,438 | | |
| 11,039,649 | | |
| 12,474,087 | |
| Richard L. Trueblood | |
| 781,313 | | |
| 3,001,054 | | |
| 3,782,367 | |
| Patrick J. O’Halloran | |
| 707,750 | | |
| 2,763,761 | | |
| 3,471,511 | |
| Damon M. Mote | |
| 698,038 | | |
| 2,722,966 | | |
| 3,421,004 | |
| Susan M. Allan | |
| 678,613 | | |
| 1,921,864 | | |
| 2,600,477 | |
| (1) | Cash.
Represents (i) cash severance payments under each named executive officer’s employment
agreement, as described in this Item 3 under the heading “Past Contacts, Transactions,
Negotiations and Agreements —Arrangements
Between the Company and its Directors and Executive Officers—Payments
Upon Termination or Change of Control” above, and equal to 100% of the sum of the
named executive officer’s base salary and annual bonus and (ii) each named executive
officer’s transaction bonus payment, as described this Item 3 under the heading “Past
Contacts, Transactions, Negotiations and Agreements —Arrangements
Between the Company and its Directors and Executive Officers—Good
Reason Waivers and Transaction Bonuses” above. The estimated amount of each type
of payment is shown in the following table. |
| Name | |
Severance ($)(a) | | |
Transaction
Bonus ($)(b) | | |
Total ($) | |
| Samuel H. Norton | |
| 959,438 | | |
| 475,000 | | |
| 1,434,438 | |
| Richard L. Trueblood | |
| 631,313 | | |
| 150,000 | | |
| 781,313 | |
| Patrick J. O’Halloran | |
| 582,750 | | |
| 125,000 | | |
| 707,750 | |
| Damon M. Mote | |
| 573,038 | | |
| 125,000 | | |
| 698,038 | |
| Susan M. Allan | |
| 553,613 | | |
| 125,000 | | |
| 678,613 | |
| (a) | Represent
“double trigger” payments (that is, payable by reason of the Merger, subject
to a qualifying termination of the named executive officer’s employment within the
two-year period following the Merger). |
| (b) | Represent
“single trigger” payments (that is, payable solely by reason of the Merger, subject
to each named executive officer’s continued employment or other service relationship
through the Effective Time). |
| (2) | Equity.
Represents (i) the value of Company RSU Awards held by each named executive officer that
will be accelerated and cashed out at the Offer Acceptance Time, as described in this Item
3 under the heading “Past Contacts, Transactions, Negotiations and Agreements —Arrangements
Between the Company and its Directors and Executive Officers—Treatment
of Company Equity Awards in the Transactions” above, and (ii) the value of Target
Cash Awards that will be held by each named executive officer and accelerated upon a qualifying
termination, as described in this Item 3 under the heading “Past Contacts, Transactions,
Negotiations and Agreements —Arrangements
Between the Company and its Directors and Executive Officers—Treatment
of Company Equity Awards in the Transactions” above, in each case, based on the
Offer Price of $8.50 per Share. The estimated amount of each type of payment is shown in
the following table. |
| Name | |
Company
RSU Awards ($)(a) | | |
Target
Cash Awards ($)(b) | | |
Total ($) | |
| Samuel H. Norton | |
| 8,175,721 | | |
| 2,863,928 | | |
| 11,039,649 | |
| Richard L. Trueblood | |
| 2,204,662 | | |
| 796,392 | | |
| 3,001,054 | |
| Patrick J. O’Halloran | |
| 2,028,640 | | |
| 735,121 | | |
| 2,763,761 | |
| Damon M. Mote | |
| 2,000,088 | | |
| 722,878 | | |
| 2,722,966 | |
| Susan M. Allan | |
| 1,385,415 | | |
| 536,449 | | |
| 1,921,864 | |
| (a) | Represent
“single trigger” payments (that is, payable solely by reason of the Merger, subject
to each named executive officer’s continued employment or other service relationship
through the Effective Time). |
| (b) | Represent
“double trigger” payments (that is, payable by reason of the Merger, subject
to a qualifying termination of the named executive officer’s employment at any time
prior to the date the corresponding Company RSU Award would have become vested in accordance
with its terms immediately prior to its conversion to a Target Cash Award). |
Section
16 Matters
The
Company Board intends to adopt a resolution that, to the extent permitted, the disposition and conversion of all Company equity securities
(including derivative securities) pursuant to the Merger Agreement by any officer or director of the Company who is a covered person
for purposes of Section 16 of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”), will be an exempt
transaction for purposes of Section 16 of the Exchange Act.
Rule
14d-10(d) Matters
Prior
to the Offer Acceptance Time, the Company Board will take all steps reasonably required to approve, as an employment compensation, severance
or other employee benefit arrangement within the meaning of Rule 14d-10(d) under the Exchange Act, and to satisfy the requirements of
the non-exclusive safe harbor set forth in Rule 14d-10(d) under the Exchange Act, certain compensation actions taken on and after May
19, 2024 that have not already been so approved.
Indemnification;
Directors’ and Officers’ Insurance
OSG’s
amended and restated certificate of incorporation (the “Charter”) and amended and restated bylaws (the “Bylaws”)
provide that it will indemnify the directors and officers of OSG to the fullest extent permitted by applicable law. In addition, OSG
(i) has in effect insurance policies for general officers’ and directors’ liability insurance covering all of its officers
and directors and (ii) has entered into indemnification agreements with its current directors and certain of its officers. Each indemnification
agreement provides, among other things, for indemnification to the fullest extent permitted by law against any and all expenses, judgments,
fines, penalties and amounts paid in settlement of any claim. The indemnification agreements also provide for the advancement or payment
of all expenses to the current directors and officers and for reimbursement to the Company if it is found that such director or officer
is not entitled to such indemnification under applicable law.
All
rights to indemnification, advancement of expenses and exculpation by OSG existing in favor of the current and former directors, officers,
employees or agents of OSG or any of its subsidiaries and each person who served as a director, officer, member, trustee or fiduciary
of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise at the request of or
for the benefit of OSG or any of its subsidiaries (each, an “Indemnified Party” and, collectively, together with such
person’s heirs, executors or administrators, the “Indemnified Parties”), as provided for in the Charter, the
Bylaws, the certificate of incorporation or bylaws of any of OSG’s subsidiaries, in each case as in effect on the date of the Merger
Agreement, or any other contract in effect on the date of the Merger Agreement will survive the Merger and will continue in full force
and effect in accordance with their terms. For a period of six (6) years from the Effective Time, the Surviving Corporation shall, and
Parent shall cause the Surviving Corporation to, cause the amended Charter and the certificates of incorporation of any subsidiary of
OSG to contain provisions with respect to indemnification, advancement of expenses and exculpation that are at least as favorable to
the Indemnified Parties as the indemnification, advancement of expenses and exculpation provisions set forth in the Charter and certificates
of incorporation of any subsidiary of OSG in effect as of the Merger Agreement. During such six (6) period (and for so long as any claim
for indemnification remains pending thereafter), such provisions may not be repealed, amended or otherwise modified in any manner except
as required by applicable law. Each of Parent and the Surviving Corporation shall, to the fullest extent permitted under applicable law,
indemnify and hold harmless (and advance funds in respect of each of the foregoing) any Indemnified Parties against any damages arising
out of, relating to or in connection with the fact that such person is or was a director, officer, employee or agent of OSG or any of
OSG’s subsidiaries or a director, officer, member, trustee or fiduciary of another corporation, partnership, joint venture, trust,
pension or other employee benefit plan or enterprise at the request of or for the benefit of OSG or any of OSG’s subsidiaries and
(including in connection with any action or omission occurring or alleged to have occurred whether before or after the Effective Time).
In the event of any such actual or threatened action, Parent and the Surviving Corporation shall cooperate with the Indemnified Party
in the defense of any such actual or threatened action and Parent shall pay to the fullest extent permitted under applicable law, subject
to a receipt of an undertaking from any applicable Indemnified Party to whom expenses are advanced that such Indemnified Party will repay
all such advances if it is ultimately determined by final and unappealable order that such Indemnified Party is not entitled to be indemnified
or entitled to such advanced expenses, all reasonable expenses, including reasonable attorneys’ fees, that may be incurred by any
Indemnified Party in enforcing the indemnity and other obligations provided in the Merger Agreement.
For
a period of six (6) years from the Effective Time, Parent shall cause to be maintained in effect the current policies of directors’
and officers’ liability insurance and fiduciary liability insurance maintained by OSG and any of OSG’s subsidiaries with
respect to matters arising on or before the Effective Time; provided, however, that after the Effective Time, Parent shall not be required
to pay annual premiums in excess of 300% of the last annual premium paid by OSG prior to the date of the Merger Agreement in respect
of the coverage required to be obtained pursuant to the Merger Agreement, but in such case shall purchase as much coverage as reasonably
practicable for such amount. OSG shall purchase, prior to the Offer Acceptance Time, a six (6) year prepaid “tail” policy
on terms and conditions providing substantially equivalent benefits as the current policies of directors’ and officers’ liability
insurance, fiduciary liability insurance and employment practices liability insurance maintained by OSG and any of OSG’s subsidiaries
with respect to matters arising on or before the Effective Time, covering without limitation the Transactions. If such “tail”
prepaid policy has been obtained by OSG prior to the Offer Acceptance Time,
Parent shall cause such policy to be maintained in full force and effect, for its full term, and cause all obligations thereunder to
be honored by the Surviving Corporation, and no other party shall have any further obligation to purchase or pay for insurance under
the Merger Agreement.
The
indemnification obligations in the Merger Agreement shall survive the consummation of the Offer and the Merger and shall not be terminated
or modified in such a manner as to adversely affect any Indemnified Party without the consent of such affected Indemnified Party.
In
the event that the Surviving Corporation or any of their respective successors or assigns: (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (ii) transfers all or substantially
all of its properties and assets to any person, then, and in either such case, proper provision shall be made so that the successors
and assigns of the Surviving Corporation, as the case may be, shall assume all of the indemnification obligations in the Merger Agreement.
The agreements and covenants contained in the Merger Agreement shall not be deemed to be exclusive of any other rights to which any Indemnified
Party is entitled, whether pursuant to law, contract, or otherwise. Additionally, nothing in the Merger Agreement is intended to, shall
be construed to, or shall release, waive, or impair any rights to directors’ and officers’ insurance claims under any policy
that is or has been in existence with respect to OSG or its officers, directors, and employees, it being understood and agreed that the
indemnification provided for in the Merger Agreement is not prior to, or in substitution for, any such claims under any such policies.
The
foregoing summary of the indemnification of executive officers and directors and directors’ and officers’ insurance does
not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, the Charter, the Bylaws, and the form
of indemnification agreement, which are filed as Exhibits (e)(1), (e)(9), (e)(10) and (e)(11) to this Schedule 14D-9, respectively and
are incorporated herein by reference.
Arrangements
with Parent, Purchaser and their Affiliates
Ownership
As
of May 16th, 2024, Parent and its parent company, Saltchuk Holdings, Inc., beneficially owned 15,203,554 Shares, or approximately
21.1%, of the Company’s outstanding Shares, based on 72,030,977 Shares outstanding as of May 16, 2024, excluding the Company Warrants
(as defined below) exercisable for 507,535 Shares as of May 16, 2024.
Merger
Agreement
On
May 19, 2024, OSG, Parent and Purchaser entered into the Merger Agreement. The summary of material provisions of the Merger Agreement
in Section 11 under the heading “The Tender Offer—Summary of the Merger Agreement and Certain Other
Agreements” of the Offer to Purchase and the description of the conditions of the Offer in Section 15 under the heading
“The Tender Offer—Conditions of the Offer” of the Offer to Purchase are incorporated herein by
reference. Such summary and description are qualified in their entirety by reference to the full text of the Merger Agreement, which
is filed as Exhibit (e)(1) to this Schedule 14D-9 and incorporated herein by reference.
The
Merger Agreement governs the contractual rights among OSG, Parent and Purchaser in relation to the Offer and the Merger. The Merger Agreement
has been included as an exhibit to this Schedule 14D-9 to provide OSG’s stockholders with information regarding the terms and conditions
of the Merger Agreement. The Merger Agreement contains representations and warranties made by OSG to Parent and Purchaser and representations
and warranties made by Parent and Purchaser to OSG. Neither the inclusion of the Merger Agreement nor the summary of the Merger Agreement
herein is intended to modify or supplement any factual disclosures about OSG, Parent or Purchaser in OSG’s public reports filed
with the SEC. In particular, the assertions embodied in these representations and warranties are qualified by information in a confidential
disclosure schedule provided by OSG to Parent and Purchaser in connection with the signing of the Merger Agreement. This disclosure schedule
contains information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger Agreement.
In addition, the representations and warranties in the Merger Agreement were negotiated with the principal purpose of allocating risk
among OSG, Parent and Purchaser, rather than establishing matters of fact. Additionally, such representations and warranties were made
as of a specified date and may also be subject to a contractual standard of materiality that is different from what may be viewed as
material by holders of Shares or from the standard of materiality generally applicable to reports or documents filed with the SEC. Accordingly,
the representations and warranties in the Merger Agreement may not constitute the actual state of facts about OSG, Parent or Purchaser.
Other than the indemnification provisions of the Merger Agreement (which are discussed in Item 3 under the heading “Past Contacts,
Transactions, Negotiations and Agreements—Indemnification; Directors’ and Officers’ Insurance” below), the
rights of holders of Shares to receive the Offer Price and the Merger Consideration, as applicable, and the holders of Company Equity
Awards and Company Warrants to receive the consideration described in the Merger Agreement, the rights of OSG (on behalf of stockholders)
to pursue certain remedies on the stockholders’ behalf and the rights of certain financing sources of Parent and Purchaser as set
forth in the Merger Agreement, nothing in the Merger Agreement confers any rights or remedies upon any person other than the parties
to the Merger Agreement. Information concerning the subject matter of such representations, warranties and covenants, which do not purport
to be accurate as of the date of this Schedule 14D-9, may have changed since the date of the Merger Agreement, which subsequent information
may or may not be fully reflected in OSG’s or Parent’s public disclosure. Additionally, under the terms of the Merger Agreement,
the Company is not permitted to declare, set aside or pay any dividends on or make other distributions in respect of any of its capital
stock or equity securities (other than dividends or distributions by a wholly owned subsidiary of the Company to the Company or to another
wholly owned subsidiary of the Company), except that if the Offer Acceptance Time has not occurred on or prior to August 31, 2024, the
Company Board may declare and the Company may pay to holders of Shares in cash each regular quarterly dividend that would have otherwise
been declared and paid after August 31, 2024 at a rate not to exceed $0.06 per quarter and with record and payment dates consistent with
past practice of OSG and corresponding distributions to the holders of Company Warrants in respect of the Shares into which the Company
Warrants are exercisable.
Pursuant
to the Merger Agreement, and in accordance with the terms of the Warrant Agreement, dated as of August 5, 2014, by and among the Company,
Computershare Inc. and Computershare Trust Company, N.A. (the “Warrant Agreement”), any warrant to purchase Shares
(each, a “Company Warrant”) surrendered at any time from or after the Offer Acceptance Time that has an exercise price
per Share that is less than the Offer Price shall entitle the holder thereof to receive, upon the surrender of such Company Warrant in
accordance with its terms, an amount in cash equal to the product of (x) the excess of the Offer Price over the applicable exercise price
per Share of such Company Warrant and (y) the total number of Shares subject to such Company Warrant. As of June 6, 2024, there were
outstanding Company Warrants to acquire a total of 507,535 shares of Class A Common Stock. The directors and executive officers of the
Company hold no Company Warrants.
The
summary of the material terms of the Merger Agreement and the descriptions of the conditions to the Offer contained in the Offer to Purchase
and incorporated herein by reference do not purport to be complete and are qualified in their entirety by reference to the full text
of the Merger Agreement, which is filed as Exhibit (e)(1) hereto and is incorporated herein by reference.
Confidentiality
Agreement
On
February 27, 2024, Parent and OSG entered into a non-disclosure agreement (the “Confidentiality Agreement”), pursuant
to which Parent agreed, subject to certain exceptions, to keep confidential nonpublic information about the Company in connection with
Parent’s evaluation of OSG. The Confidentiality Agreement included a twelve (12) month standstill, which would cease to bind Parent
upon the Company’s announcement of its entry into a transaction with another party. The Confidentiality Agreement is effective
for an eighteen (18) month period.
The
foregoing summary and description of the material terms of the Confidentiality Agreement do not purport to be complete and are qualified
in their entirety by reference to the full text of the Confidentiality Agreement, which is filed as Exhibit (e)(2) hereto and is incorporated
herein by reference.
Good
Reason Waivers
Concurrently
with the execution of the Merger Agreement, OSG and Parent have duly executed and entered into Good Reason Waivers (the “Good
Reason Waivers”) with the four (4) Waiver Executives. The summary of the Good Reason Waivers under the heading “Past
Contacts, Transactions, Negotiations and Agreements—Arrangements Between the Company and its Directors and Executive Officers—Payments
Upon Termination or Change of Control Good Reason Waivers and Transaction Bonuses” is incorporated herein by reference.
ITEM
4. THE SOLICITATION OR RECOMMENDATION
Recommendation
of the Company Board
At
a meeting of the Company Board held on May 19, 2024, the Company Board unanimously:
| ● | determined
that the terms of the Merger Agreement and all agreements and documents related thereto and
contemplated thereby, were fair to and in the best interest of the Company and the Company’s
stockholders; |
| | | |
| ● | declared
that the Merger Agreement and the Transactions, including the Offer and the Merger, are advisable; |
| | | |
| ● | approved
and adopted the Merger Agreement and the Transactions, including the Merger and the Offer,
in accordance with the DGCL; |
| | | |
| ● | directed
that the Merger be effected and governed by Section 251(h) and that the Merger be consummated
as soon as practicable following the Offer Acceptance Time; |
| | | |
| ● | recommended
that the stockholders of the Company accept the Offer and tender their Shares to Purchaser
pursuant to the Offer; and |
| | | |
| ● | authorized
and approved the execution, delivery and performance by the Company of the Merger Agreement
and the consummation of the Transactions. |
Accordingly,
for the reasons described in more detail below the Company Board unanimously recommends that the stockholders, other than Parent and
its affiliates, accept the Offer and tender their Shares to Purchaser pursuant to the Offer.
Based
on the knowledge and analysis of available information regarding the Company and consideration of factors described herein, the Company
reasonably believes that the terms of the Merger Agreement and the Offer are fair to the stockholders other than Parent, Purchaser and
their respective subsidiaries and affiliates. A joint press release, dated May 20, 2024, issued by the Company and Parent announcing
the Offer and the entry into the Merger Agreement, is included as Exhibit (a)(5)(ii) hereto and is incorporated herein by reference.
Background
of the Offer and the Merger
The
Company Board and the Company’s senior management team, with the assistance of the Company’s advisors, regularly review the
near-term and long-term strategy, performance, positioning, and operating prospects of the Company with a view toward maximizing stockholder
value. These reviews have included, from time to time, discussions as to the best use of the Company’s excess cash, including whether
to repurchase Shares, issue dividends or raise capital and whether the continued execution of the Company’s strategy as a stand-alone
company or potential mergers and acquisitions transactions (including a possible business combination with a third party or a possible
sale of the Company to a third party) were likely to provide the best opportunity to maximize stockholder value.
In
June 2021, Saltchuk Holdings, Inc. (“Saltchuk Holdings”), the parent company of Saltchuk Resources, Inc. (“Saltchuk”
or “Parent”), the holder of 15,203,554 Shares, then representing approximately
17.5% of all outstanding Shares, submitted to the Company Board a written, unsolicited non-binding expression of interest pursuant
to which Saltchuk Holdings proposed to acquire all of the outstanding Shares of the Company not already owned by Parent for $3.00 per
Share in cash (the “June 2021 Saltchuk Proposal”). With the assistance of its financial advisor, Evercore, the Company
approached several other potential acquirors of the Company to ascertain their interest in an acquisition transaction. The Company Board
ultimately decided to enter into exclusive negotiations with Parent with respect to a potential transaction with Parent. In September
2021, Saltchuk Holdings notified the Company that, in light of continued uncertainty with respect
to the pace and trajectory of the global pandemic recovery and its effects on the Company’s business and operations, Saltchuk Holdings
was suspending discussions with the Company regarding a possible transaction.
Thereafter,
Samuel H. Norton, the Chief Executive Officer of the Company, periodically engaged in dialogue with members of management of Saltchuk
regarding the Company’s publicly disclosed financial results and other publicly disclosed developments with respect to the Company’s
business.
On
November 30, 2023, Mr. Norton met in person with representatives of a party with whom the Company has a significant commercial relationship,
which we refer to as “Party A”. During the meeting, Mr. Norton and the representatives of Party A discussed a variety
of topics. During the course of these discussions, the representatives of Party A indicated to Mr. Norton that Party A might be interested
in exploring a potential acquisition of the Company in 2024. No transaction proposal was made by Party A or its representatives.
On
December 5, 2023, the Company Board held a regularly scheduled meeting. During the meeting, Mr. Norton provided the Company Board with
an overview of his discussion with the representatives of Party A, including their indication that Party A might be interested in exploring
a potential acquisition in 2024. Following the meeting, Mr. Norton contacted Evercore to seek its advice regarding potential engagement
by the Company with Party A with respect to its potential interest in a transaction with the Company.
On
January 15, 2024, Mark N. Tabbutt, the President and Chairman of Saltchuk Holdings and Parent, called Mr. Norton to indicate that Saltchuk
was considering submitting an indication of interest in pursuing a potential acquisition of the Company. No transaction proposal was
made by Saltchuk or its representatives.
On
January 16, 2024, at the direction of the Company, a representative of Evercore contacted a representative of Party A to ascertain whether
Party A would be interested in pursuing a potential acquisition of the Company. The representative of Party A indicated that it may be
interested and requested that the Company provide Party A with a draft non-disclosure agreement pursuant to which the Company could provide
Party A with non-public information regarding the Company, to allow Party A to determine the extent of its interest in a transaction.
On
January 18, 2024, a representative of the Company provided Party A with a draft non-disclosure agreement.
On
January 26, 2024, Mr. Tabbutt contacted Mr. Norton to inform him that Saltchuk would be sending a letter to the Company with respect
to a potential acquisition of the Shares of the Company. Later that day, Saltchuk Holdings, on behalf of Saltchuk, submitted to the Company
Board a written, unsolicited non-binding expression of interest in acquiring all of the outstanding Shares of the Company not already
owned by Saltchuk for $6.25 per share in cash (the “January 26 Saltchuk Proposal”).
On
January 29, 2024, Saltchuk filed with the SEC an amendment to its Schedule 13D containing the January 26 Saltchuk Proposal. The Company
issued a press release announcing the receipt of the January 26 Saltchuk Proposal.
On
January 29, 2024, the Company Board held a meeting to discuss the January 26 Saltchuk Proposal, Party A’s potential interest in
an acquisition of the Company and the possibility of the Company Board exploring strategic alternatives for the Company. Members of management,
representatives of Evercore and representatives of Fried, Frank, Harris, Shriver & Jacobson LLP (“Fried Frank”)
were present. At the meeting, representatives of Fried Frank presented an overview of the Company Board’s fiduciary duties in the
context of the January 26 Saltchuk Proposal and the Company Board’s exploration of strategic alternatives generally. A representative
of Evercore then reviewed with the Company Board the financial terms of the January 26 Saltchuk Proposal, the indication of interest
that the Company Board had received from Saltchuk Holdings in June of 2021 and expressions of interest previously made by other parties,
financial information regarding the Company and the Shares and potential next steps that may be taken by the Company Board. After discussion,
the Company Board instructed Evercore to prepare a financial analysis of the January 26 Saltchuk Proposal based on the Company management’s
financial projections for the Company. The Company Board also instructed Evercore to communicate to BDT & MSD Partners, LLC, Saltchuk’s
financial advisor (“BDT & MSD”), that the Company Board was in the process of analyzing the January 26 Saltchuk
Proposal with the assistance of Evercore and would respond in due course. Following that discussion, representatives of Evercore and
Fried Frank left the meeting. The Company Board then approved the engagement of Evercore to serve as the Company’s financial advisor
in connection with any evaluation of strategic alternatives undertaken by the Company Board. The Company Board approved the engagement
of Evercore to serve as the Company’s financial advisor because it is a highly regarded investment banking firm with substantial
experience with the Company and with transactions involving the shipping industry and did not, in the judgment of the Company Board,
have any conflicts of interest that would impair its ability to serve as the Company’s financial advisor. The Company Board also
approved the engagement of Fried Frank to serve as outside counsel to the Company. The Company Board approved the engagement of Fried
Frank to serve as outside counsel to the Company because it is a highly regarded law firm with significant experience in mergers and
acquisitions transactions.
On
February 13, 2024, the Company Board held a meeting to discuss next steps with respect to its engagement with Saltchuk, Party A and other
potential transaction counterparties. Members of management, representatives of Evercore and representatives of Fried Frank were present.
A representative of Evercore reviewed with the Company Board the Company management’s financial projections for the Company and
Evercore’s preliminary financial analysis of the January 26 Saltchuk Proposal and an analysis of other potential transaction alternatives.
A representative of Evercore then led a discussion of potential responses to the January 26 Saltchuk Proposal, potential outreach to
other third parties, including Party A, who might be interested in exploring a transaction involving the Company and a potential timeline
to complete this outreach. After discussion, the Company Board instructed Evercore to reach out on behalf of the Company to other potential
transaction counterparties, including Party A.
During
the period from January 17, 2024 to February 27, 2024, Evercore contacted twenty-three (23) parties, of which nine (9) were potential
strategic acquirors, and fourteen (14) were financial sponsors. These parties included Saltchuk, Party A, “Party B,”
“Party C” and “Party D”. The Company also began to populate a comprehensive virtual data room (which
we refer to as the “Data Room”).
During
the period from January 18, 2024 to March 20, 2024, the Company negotiated and executed non-disclosure agreements with five (5) of the
twenty-three (23) parties contacted by representatives of Evercore: Saltchuk, Party A, Party B, Party C and Party D. All five (5) of
the negotiated non-disclosure agreements included standstill provisions that terminated upon the Company’s entry into or public
announcement of an acquisition transaction, such that none of such parties that entered into a non-disclosure agreement with the Company
is currently restricted from making a proposal to acquire the Company.
During
the period from February 26, 2024 to March 23, 2024, the Company provided Saltchuk, Party A, Party B and Party C with access to the Data
Room. Party D declined to engage with the Company following its execution of a non-disclosure agreement and so was not granted access
to the Data Room.
On
March 14, 2024, the Company Board held a meeting to discuss next steps with respect to the potential exploration of a strategic alternatives
process. Members of management, representatives of Evercore and representatives of Fried Frank were present. A representative of Evercore
provided the Company Board with an update on the status of Evercore’s outreach to potential transaction counterparties, including
a description of the status of discussions with parties that had expressed an interest in participating in the process, as well as feedback
received from parties that declined to participate in the process. The Company Board asked questions and a discussion ensued. After discussion,
a representative of Evercore presented to the Company Board certain financial information and discussed a potential timeline for next
steps in the process. A representative of Fried Frank then provided an overview of a key terms and conditions proposed to be reflected
in the draft merger agreement that would be provided to potential counterparties. After discussion, the Company Board determined to establish
a transaction committee of independent members of the Company Board (which we refer to as the “Committee”) to assist
the Company Board in overseeing the strategic alternatives process. The Committee consisted of Douglas Wheat, the independent Chair of
the Company Board and directors Rebecca DeLaet and Joseph Kronsberg.
On
March 18, 2024, a representative of Party B communicated to representatives of Evercore that Party B was no longer interested in pursuing
an acquisition of the Company due to its inability to devise a tax efficient structure for a potential transaction with the Company.
Shortly
thereafter, members of the Company’s management team met in person with representatives of each of Saltchuk and Party A to review
the Company’s business and performance. Representatives of Saltchuk and Party A submitted follow-up questions regarding the Company’s
business and financial performance to representatives of Evercore, who worked with the Company’s management team to respond to
those questions. During this time, representatives of Evercore held discussions with representatives of Saltchuk and Party A to answer
additional questions about the Company’s business. In addition, during this time the Company and its representatives responded
to various legal and accounting due diligence inquiries from representatives of Saltchuk and Party A.
On
March 22, 2024, Mr. Tabbutt met in person with Mr. Norton, during which Mr. Tabbutt discussed the operations and governance of the Saltchuk
family of companies and conveyed to Mr. Norton that the continuity of the Company’s existing management team after a potential
transaction was an important factor in Saltchuk’s evaluation of a potential acquisition of the Company. Mr. Norton indicated that
he would be open to, and believed the vast majority of the Company’s management team would be open to, continuing to serve as executives
of the Company following a transaction with Saltchuk.
Also
on March 22, 2024, in a conversation between Mr. Norton and representatives of Party A, Mr. Norton communicated to Party A that he would
be open to, and believed the vast majority of the Company’s management team would be open to, continuing to serve as executives
of the Company following a transaction with Party A.
On
March 25, 2024, at the direction of the Company, Evercore sent a process letter to Saltchuk, Party A and Party C, each of which had executed
non-disclosure agreements. (As noted above, the other two (2) parties that signed non-disclosure agreements declined to engage further
in the process and, therefore, were not provided with a process letter.) The process letter requested that indications of interest be
submitted by 12:00 p.m. ET on April 10, 2024.
On
April 2, 2024, a representative of Party C communicated to representatives of Evercore that Party C was not interested in an acquisition
of the Company, but was potentially interested in acquiring only certain assets of the Company. Evercore communicated to Party C that
the Company Board was not inclined to pursue a sale of a portion of the Company’s assets.
On
April 8, 2024, a potential strategic acquiror, which we refer to as “Party E”, submitted to a member of management
of the Company a written, unsolicited non-binding expression of interest in exploring a combination of Party E and the Company (the “April
8 Party E Communication”). The April 8 Party E Communication did not include any information regarding potential values of
Party E or the Company in connection with any such combination, but nonetheless requested access to non-public information regarding
the Company.
On
April 10, 2024, representatives of Evercore received an indication of interest from each of Saltchuk and Party A. In its indication of
interest, Saltchuk (i) proposed to acquire all of the outstanding Shares of the Company not already owned by Saltchuk for $6.55 per share
in cash and (ii) requested a thirty (30) day period of exclusivity to complete its due diligence and enter into a definitive merger agreement
(the “April 10 Saltchuk Proposal”). In its indication of interest, Party A proposed to acquire all of the outstanding
Shares of the Company for $7.00 - $7.50 per share in cash (the “April 10 Party A Proposal”).
Later
in the day on April 10, 2024, the Committee met to review the April 8 Party E Communication, the April 10 Saltchuk Proposal and the April
10 Party A Proposal and to discuss next steps. Members of management and a representative of Evercore were present. The representative
of Evercore provided an overview of the April 8 Party E Communication and the financial terms of the April 10 Saltchuk Proposal and the
April 10 Party A Proposal. The members of the Committee asked questions and a discussion ensued.
On
April 12, 2024, the Company Board held a meeting to review the April 8 Party E Communication, the April 10 Saltchuk Proposal and the
April 10 Party A Proposal and to discuss next steps. Members of management, representatives of Evercore and representatives of Fried
Frank were present. A representative of Evercore provided an update with respect to recent developments related to the Company’s
process, including the receipt of the April 8 Party E Communication. Evercore then reviewed with the Company Board the financial terms
of the April 10 Saltchuk Proposal and the April 10 Party A Proposal. Representatives of Evercore then reviewed with the Company Board
Evercore’s preliminary financial analysis of the April 10 Saltchuk Proposal and the April 10 Party A Proposal. After discussion,
representatives of Evercore and Fried Frank discussed with the Company Board potential next steps. After discussion, the Company Board
authorized management and Evercore to (i) communicate to representatives of Saltchuk that the April 10 Saltchuk Proposal was not at a
price per Share of interest to the Company Board and that it would need to raise its proposed price to at least $8.50 per share for the
Company Board to be prepared to engage further with Saltchuk and (ii) communicate to representatives of Party A that it would need to
submit a revised proposal at a price of at least $8.50 per share for the Company Board to be prepared to engage further with Party A.
The Company Board also determined not to engage further with Party E unless it provided a satisfactory explanation as to how it would
finance a transaction, which Evercore was instructed to request from Party E.
On
April 16, 2024, representatives of Evercore reached out to representatives of BDT & MSD and communicated the Company Board’s
message to the BDT & MSD representatives.
On
April 17, 2024, representatives of Evercore had a conversation with representatives of Party E, during which representatives of Evercore
communicated to representatives of Party E that the Company Board was not interested in a strategic combination with Party E and would
instead prefer an all cash offer and that management of Party E should speak with their controlling shareholders and revert. Following
this conversation, Party E did not engage further with Evercore or the Company.
On
April 19, 2024, Mr. Norton contacted a representative of Party A and communicated the Company Board’s message to the Party A representatives.
On
April 23, 2024, Saltchuk submitted a revised proposal pursuant to which it (i) proposed to acquire all of the outstanding Shares of the
Company not already owned by Saltchuk for $8.50 per share in cash and (ii) requested a three (3) week period of exclusivity to complete
its due diligence and enter into a definitive merger agreement (the “April 23 Saltchuk Proposal”).
On
April 24, 2024, the Committee met to review the April 23 Saltchuk Proposal and to discuss next steps. Members of management, representatives
of Evercore and representatives of Fried Frank were present. A representative of Evercore provided an overview of the financial terms
of the April 23 Saltchuk Proposal and the messages that were delivered to both Saltchuk and Party A on April 16, 2024 and April 19, 2024,
respectively, and also noted that Party A had indicated that it was interested in submitting a revised proposal to acquire all of the
outstanding Shares of the Company. The members of the Committee asked questions and a discussion ensued. The members of the Committee
considered that the Company had not yet received a revised proposal from Party A. A representative of Fried Frank then described to the
Company Board Saltchuk’s request for exclusivity. After discussion, the Committee directed management and Evercore to (i) encourage
Party A to submit a revised proposal as soon as possible, in light of the receipt of the April 23 Saltchuk Proposal, (ii) provide a draft
merger agreement to Saltchuk and indicate to Saltchuk that the Company would consider granting exclusivity to Saltchuk but would first
require feedback from Saltchuk with respect to any material issues related to the draft merger agreement and (iii) withhold any such
grant of exclusivity until the Company had received and evaluated a revised proposal from Party A (or received an indication from Party
A that it would not be submitting a revised proposal). Following the meeting, an initial draft of the merger agreement was provided to
Saltchuk along with the request to provide feedback as soon as possible with respect to any material issues related to the draft merger
agreement.
During
the morning of April 26, 2024, Party A submitted a revised proposal pursuant to which it proposed to acquire all of the outstanding shares
of the Company for $8.00 per share in cash (the “April 26 Party A Proposal”).
During
the afternoon of April 26, 2024, the Committee met to review the April 26 Party A Proposal and to discuss next steps, including Saltchuk’s
request for exclusivity. Members of management, representatives of Evercore and representatives of Fried Frank were present. A representative
of Evercore provided an overview of the financial terms of the April 26 Party A Proposal. A representative of Evercore provided an overview
of his discussions with representatives of BDT & MSD in which they indicated that Saltchuk had already secured (subject to completion
of definitive documentation) financing to fund a transaction on the terms set forth in the April 23 Saltchuk Proposal. The representative
of Evercore noted that representatives of Saltchuk had scheduled a meeting with Fried Frank to provide their feedback on the draft merger
agreement that had been previously provided to Saltchuk. A representative of Fried Frank then led a discussion regarding Saltchuk’s
request for exclusivity. After discussion, the Committee determined that it was in the Company’s best interest to grant Saltchuk
a period of exclusivity and work expeditiously to enter into a definitive merger agreement based on the terms of the April 23 Saltchuk
Proposal, assuming no concerning issues were raised during the meeting with Saltchuk’s representatives to discuss the draft merger
agreement. Following the meeting, representatives of Fried Frank met with K&L Gates LLP, counsel to Saltchuk (“K&L Gates”),
to discuss the draft merger agreement and later provided the Committee with a summary of that discussion, including that from Fried Frank’s
perspective, no concerning issues had been raised by K&L Gates. Taking into account the terms of the April 23 Saltchuk Proposal,
the terms of the April 26 Party A Proposal and the discussion between representatives of Fried Frank and K&L Gates, the Committee
agreed to grant Saltchuk exclusivity and, during the evening of April 26, 2024, the Company entered into an exclusivity agreement with
Saltchuk providing for an exclusivity period of three weeks in order for Saltchuk to complete its due diligence and enter into a definitive
merger agreement.
On
April 26, 2024, following the entry into the exclusivity arrangement between the Company and Saltchuk, Mr. Tabbutt and Mr. Norton exchanged
messages regarding scheduling a meeting to discuss at a high level the going forward arrangements with members of management of the Company.
With
the prior approval of Mr. Wheat, the independent Chairman of the Company Board, on May 1, 2024, Mr. Norton met in person with members
of management of Saltchuk to discuss at a high level the going forward governance of the Company following the consummation of a potential
transaction and Saltchuk’s general philosophy regarding compensation matters.
On
May 5, 2024, representatives of K&L Gates provided representatives of Fried Frank with a mark-up of the draft merger agreement.
Between
May 5, 2024 and May 19, 2024, representatives of Fried Frank and K&L Gates exchanged drafts of the merger agreement and participated
in multiple discussions regarding the agreement. Representatives of Saltchuk and its advisors continued their due diligence review of
the Company during this time.
On
May 9, 2024, a meeting of the Company Board took place to consider the proposed acquisition of the Company by Saltchuk for a purchase
price of $8.50 per share in cash (the “Proposed Transaction”). Members of management, representatives of Evercore
and representatives of Fried Frank were present. Representatives of Fried Frank reviewed the fiduciary duties of the Company Board with
the directors and outlined the potential timetable to close the Proposed Transaction with Saltchuk. Representatives of Fried Frank also
reviewed the key aspects of the revised drafts of the merger agreement received from K&L Gates, including remaining open points,
particularly, Saltchuk’s proposed restriction on the Company’s ability to pay its regular quarterly dividend between the
signing and closing of the Proposed Transaction. Representatives of Evercore then reviewed Evercore’s financial analysis with respect
to the Proposed Transaction. Following that discussion, representatives of Evercore indicated that, if requested, Evercore would be prepared
to render to the Company Board its opinion with respect to the fairness of $8.50 per Share in cash to be received by the holders of Class
A Common Stock in the Proposed Transaction. The Company Board instructed management, Evercore and Fried Frank to continue to move forward
with negotiations with Saltchuk with respect to the Proposed Transaction.
On
May 15, 2024, representatives of Saltchuk indicated that it would require certain members of management to enter into waiver agreements
concurrently with the execution of the definitive merger agreement, under which those members of management would waive their right to
claim that the consummation of the Proposed Transaction constituted a “good reason” termination under their employment arrangements
(the “Good Reason Waivers”). The Good Reason Waivers are summarized in more detail below (see “— Arrangements
with Parent, Offeror and their Affiliates”).
On
May 17, 2024, representatives of Fried Frank provided representatives of K&L Gates with an initial draft of the form of Good Reason
Waiver. Between May 17, 2024 and May 19, 2024, representatives of Fried Frank and K&L Gates exchanged drafts of the form of Good
Reason Waiver and participated in multiple discussions regarding the agreements. In addition, during this time, Mr. Norton and members
of management of Saltchuk engaged in conversations regarding the terms of the form of Good Reason Waiver.
On
May 17, 2024, Saltchuk’s three week exclusivity period expired and, at the request of Saltchuk, the Company agreed to extend the
exclusivity period through May 19, 2024.
During
the afternoon of May 19, 2024, a meeting of the Company Board took place to consider the Proposed Transaction. Members of management,
representatives of Evercore and representatives of Fried Frank were present. Representatives of Evercore and Fried Frank provided the
Company Board with an overview of recent developments since the meeting of the Company Board on May 9, 2024, including the status of
the various documents to be entered into in connection with the Proposed Transaction. Representatives of Fried Frank then provided an
overview of the negotiations with Saltchuk, noting that such negotiations were substantially complete and that, following the meeting
of the Company Board, Saltchuk should be in a position to enter into a definitive merger agreement with respect to the Proposed Transaction.
Following that discussion a representative of Evercore reviewed Evercore’s financial analysis with respect to the Proposed Transaction
summarized below (see “— Opinion of Evercore”) and rendered to the Company Board Evercore’s oral opinion
which was, following execution of the definitive documentation in respect of the Proposed Transaction, subsequently confirmed by delivery
of a written opinion from Evercore, dated as of May 19, 2024, to the effect that, as of that date and subject to the limitations, qualifications
and assumptions set forth in the written opinion, the $8.50 in cash per Share to be received by the holders of Class A Common Stock in
the Offer and the Merger was fair, from a financial point of view, to such holders, other than Parent and its affiliates (see “—
Opinion of Evercore” for further details). Representatives of Fried Frank then provided an overview of the resolutions to
be adopted by the Company Board in connection with approving the Proposed Transaction. After considering the foregoing and taking into
consideration the factors described under “—The Solicitation or Recommendation”,
the Company Board unanimously: (i) determined that it was fair to and in the best interests of the Company and its stockholders for the
Company to enter into the Merger Agreement and declared the Merger Agreement and the transactions contemplated by the Merger Agreement,
including the Offer and the Merger, advisable, (ii) approved and adopted the Merger Agreement and the transactions contemplated thereby,
including the Merger and the Offer, in accordance with the DGCL, (iii) resolved that the Merger would be effected under and governed
by Section 251(h) of the DGCL and that the Merger would be consummated as soon as practicable following the Offer Acceptance Time and
(iv) resolved to recommend that the holders of Shares accept the Offer and tender their Shares to Offeror pursuant to the Offer, in each
case, on the terms and conditions of the Merger Agreement.
Following
the meeting of the Company Board on May 19, 2024, the Company, Parent and Offeror executed the Merger Agreement. Certain members of management
of the Company entered into Good Reason Waivers with Parent and the Company concurrently with the execution of the Merger Agreement.
The Good Reason Waivers are summarized in more detail below (see “—Arrangements with Parent, Offeror and their Affiliates”).
The following morning, on May 20, 2024, the Company and Parent issued a joint press release announcing the execution of the Merger Agreement.
On
June 10, 2024, Parent and Offeror commenced the Offer and filed the Schedule TO.
Reasons
for the Recommendation; Fairness of the Offer and Merger
In
evaluating the Merger Agreement, the Company Board consulted with the Company’s senior management, Fried Frank, counsel to OSG,
and Evercore Group L.L.C. (“Evercore”), OSG’s financial advisor, and unanimously:
| ● | determined
that the terms of the Merger Agreement and all agreements and documents related thereto and
contemplated thereby, were fair to and in the best interest of the Company and the Company’s
stockholders; |
| | | |
| ● | declared
that the Merger Agreement and the Transactions, including the Offer and the Merger, are advisable; |
| | | |
| ● | approved
and adopted the Merger Agreement and the Transactions, including the Merger and the Offer,
in accordance with the DGCL; |
| | | |
| ● | directed
that the Merger be effected and governed by Section 251(h) and that the Merger be consummated
as soon as practicable following the Offer Acceptance Time; and |
| | | |
| ● | recommended
that the stockholders of the Company accept the Offer and tender their Shares to Purchaser
pursuant to the Offer. |
In
reaching these conclusions, the Company Board considered a number of factors including, without limitation, the following (not necessarily
in the order of importance):
| ● | Attractive
Price. The fact that, in the judgment of the Company Board, the $8.50 per share in cash
payable under the Merger Agreement, taking into account the business, operations, prospects,
strategic and short and long term operating plans, assets, liabilities and financial condition
of the Company, and the relative certainty and liquidity of the all-cash consideration, is
more favorable to the Company stockholders than the potential value expected from the alternative
of the Company continuing to operate independently and pursuing its current business and
financial plans on a standalone basis, taking into account near-term and longer term uncertainties
associated with continued independence. |
| | | |
| ● | Extensive
Strategic Alternatives Review. The fact that the Company Board had engaged in an extensive
and lengthy review of strategic alternatives, with the assistance of Evercore, and explored
solicited and unsolicited interest in a potential sale of the Company, including the fact
that, at the direction of the Company Board, prior to the signing of the Merger Agreement,
Evercore contacted twenty-three (23) third parties who the Company Board and management believed
would be among the most likely to be interested in a potential acquisition of the Company
about such an acquisition. In particular, the Company considered the fact that it negotiated
six (6) confidentiality agreements, five (5) of which were executed, and that, in addition
to Saltchuk, only one other party contacted by Evercore provided an offer to acquire the
Company as part of the process and that offer was at $8.00 per Share, less than the $8.50
per Share payable under the Merger Agreement. |
| | | |
| ● | Compelling
Premium. The $8.50 per Share in cash payable under the Merger Agreement represents a
compelling premium to historical market prices for the shares of the Class A Common Stock.
Such per Share amount represents a premium of approximately: |
| ● | (i)
sixty-one percent (61%) over the Company’s 30-day volume-weighted average price on
January 26, 2024, the last day of trading before Saltchuk submitted its initial non-binding
indication of interest; |
| | | |
| ● | (ii)
forty-four percent (44%) over the Company’s closing stock price of $5.90 on January
26, 2024; and |
| | | |
| ● | (iii)
thirty-six percent (36%) over Saltchuk’s initial indicative price of $6.25 per share. |
| ● | Cash
Consideration. The Merger Agreement provides for the consideration to be paid in the
Offer and the Merger to be so paid solely in cash, which provides certainty and immediate
liquidity and value to the Company’s stockholders, enabling the Company’s stockholders
to realize the value that has been created while eliminating long-term business and execution
risk. |
| | | |
| ● | Negotiations
with Saltchuk. The arm’s-length negotiations with Saltchuk undertaken by the Company
Board and its advisors following Saltchuk’s submission of its initial unsolicited indication
of interest, and the terms of the Merger Agreement that have been obtained through such negotiations. |
| ● | Saltchuk’s
acquisition proposal on January 27, 2024 proposed to acquire all of the Company’s outstanding
Class A Common Stock at a price of $6.25 per share in cash. |
| | | |
| ● | After
the Company Board received Saltchuk’s initial proposal, the Company Board and Saltchuk
engaged in negotiations, which led to the terms set forth in the Merger Agreement, providing
for Saltchuk’s acquisition of the Company at a price of $8.50 per share in cash. |
| ● | The
Company’s Current Condition. The Company’s financial condition (including
cash position and liabilities), results of operations, competitive position and business
strategy (as well as the accompanying risks), the nature of the shipping industry, on both
historical and prospective bases, the current and historical trading prices of the Company’s
stock, including the trading price of the Company’s stock relative to those of other
industry participants and general market indices, and current industry, regulatory, economic
and market conditions, trends and cycles. |
| ● | The
Company’s Future Prospects. The Company’s future prospects if it were to
remain independent, including the prospects with respect to its current and future bareboat
and time charter contracts, the Company’s financing needs, the Company’s relationship
with its manufacturers, vendors and other commercial counterparties and the risks associated
with the foregoing, including as noted below. |
| ● | Risks
Associated with Continued Independence. The risks associated with continuing to operate
the Company as a stand-alone public company, including financing-related risks, risks related
to acts of war or any outbreak or escalation of hostilities, sabotage or terrorism, cyber-terrorism,
cyber-espionage or cyber-war, risks related to the price of ship fuel, piracy, international
or intranational hostilities, disputes or conflicts affecting shipping, execution risks,
risks relating to the achievability of the Company’s financial projections and the
potential risk that the market may not fully reflect the value of the Company’s programs
in the Company’s stock price. |
| ● | Strategic
Alternatives. The potential values, benefits, risks and uncertainties facing the Company’s
stockholders associated with possible alternatives to the Transaction (including the alternative
of remaining as a stand-alone public company), and the timing and likelihood of accomplishing
any alternatives, including whether any such alternative, on a risk-adjusted basis, is reasonably
likely to create value for the Company’s stockholders greater than or equal to the
Offer Price, and the Company’s ability, subject to the terms and conditions of the
Merger Agreement, to respond to competing proposals, engage in discussions and negotiations
regarding competing proposals and ultimately accept a superior proposal from another acquiror. |
| ● | Financial
Advisor and Fairness Opinion. The advice and financial analyses provided by the Company’s
Board’s financial advisor, Evercore, and the oral opinion rendered by Evercore, which
was subsequently confirmed by delivery of a written opinion dated May 19, 2024, that, as
of such date and based upon and subject to the various factors and assumptions set forth
therein, the Offer Price and the Merger Consideration (as defined in Evercore’s opinion)
proposed to be paid to the holders of Shares (other than as specified in Evercore’s
opinion) was fair, from a financial point of view, to such holders, other than Parent and
its affiliates. |
| ● | Independent
Legal Counsel. The Company’s retention of Fried Frank as independent legal counsel
to the Company. |
| ● | Terms
of the Merger Agreement. The terms of the Merger Agreement, including the parties’
respective representations, warranties and covenants, the conditions to their respective
obligations to consummate the Transactions and their respective ability to terminate the
Merger Agreement. The Company Board considered the following, among other terms of the Merger
Agreement, in connection with its evaluation of the Merger Agreement: |
| ● | Unsolicited
Acquisition Proposals. While the terms of the Merger Agreement restrict the Company from
soliciting alternative acquisition proposals, the Merger Agreement permits the Company to
enter into discussions or negotiations with a person that has made an unsolicited acquisition
proposal and/or furnish to any such person non-public information relating to the Company
pursuant to a confidentiality agreement if the Company determines in good faith (after consultation
with its financial advisor and outside legal counsel) that the proposal constitutes, or is
reasonably expected to result in, a “Superior Proposal” (as defined in the Merger
Agreement) and that the failure to take such action would be inconsistent with the Company
Board’s fiduciary duties under applicable law, subject to certain restrictions and
procedures imposed by the Merger Agreement. |
| ● | Change
of Recommendation. The Merger Agreement permits the Company Board to withdraw or modify
its respective recommendation (subject to certain restrictions and compliance with certain
procedures imposed by the Merger Agreement) either: |
| ● | following
the receipt of an unsolicited, written, bona fide acquisition proposal that the Company Board
determines in good faith (after consultation with its outside legal counsel and financial
advisors) constitutes a Superior Proposal and that failure to effect a change in recommendation
in light of such Superior Proposal would be inconsistent with the Company Board’s fiduciary
duties under applicable law; or |
| ● | in
response to an “Intervening Event” (as defined in the Merger Agreement). |
| ● | Termination
of Merger Agreement to Accept a Superior Company Proposal. The Merger Agreement permits
the Company to terminate the Merger Agreement to accept a Superior Proposal, subject to certain
restrictions and requirements, including the Company’s payment of the Company Termination
Fee (as defined below). |
| ● | Company
Termination Fee; Limitations on Liability Except for Fraud and Willful Breach. The
Merger Agreement obligates the Company to pay a termination fee (the “Company Termination
Fee”) of $19,600,000 (representing approximately 3% of the equity value implied
by the Offer Price) in certain circumstances in which the Merger Agreement is terminated
(including in the event of a termination related to a Superior Proposal). In circumstances
where the Company Termination Fee is paid, the Merger Agreement provides that it shall be
the sole and exclusive remedy of Parent, except in the case of actual or intentional fraud
under Delaware law or “Willful Breach” (as defined in the Merger Agreement). |
| ● | Lack
of Financing Condition. The Transactions are not subject to a financing condition and
Parent represented to the Company in the Merger Agreement that it will have sufficient financial
resources at the Closing (as defined in the Merger Agreement) to pay the $8.50 per share
in cash payable under the Merger Agreement. |
| ● | Interim
Covenants. The Merger Agreement provides for certain interim covenants restricting the
Company’s ability to take certain actions prior to closing without Parent’s consent
while still leaving sufficient flexibility to allow the Company to continue its operations
in the ordinary course. |
| ● | February
19, 2025 Termination Date. The Merger Agreement provides for an approximately 9-month
period before the occurrence of the “Termination Date,” upon which either party
may generally terminate the Merger Agreement if the Offer Acceptance Time shall not have
occurred. |
| ● | Company
Material Adverse Effect. The Merger Agreement includes a “Company Material Adverse
Effect” definition that includes a number of customary exceptions and is generally
difficult to establish under Delaware law. |
| ● | Specific
Performance. The Merger Agreement provides that the Company may obtain specific performance
of Parent’s obligations under the Merger Agreement. |
| ● | Speed
and Likelihood of Consummation. The anticipated timing of the consummation of the Transactions,
including the structure of the Transactions as a cash tender offer for all outstanding Shares,
with the anticipated result of allowing stockholders who tender their Shares in the Offer
to receive their Merger Consideration in a relatively short time frame. Additionally, the
fact that it is likely that the Transactions will be consummated in light of, among other
things, (i) the Merger Agreement’s limited closing conditions (including the absence
of any financing condition or any condition requiring a minimum level of cash held by the
Company and the fact that the Transactions are not subject to the conditionality and execution
risk of any required approval by Parent’s stockholders) and (ii) the fact that Saltchuk
is a beneficial owner of 21.1% of the outstanding Class A Common Stock (based on 72,030,977
Shares outstanding as of May 16, 2024, excluding the Company Warrants exercisable for 507,535
Shares as of May 16, 2024), which increases the likelihood that the Minimum Condition will
be satisfied. |
| ● | Business
Reputation of Saltchuk and Purchaser. The Company Board considered the positive business
reputation, management and financial resources of Saltchuk and Purchaser with respect to
the Transactions and their ability to fund the Transactions and continue to successfully
operate the Company upon consummation of the Transactions. |
| ● | Other
Indications of Value. The indications of the Company’s value derived from various
past events and market information. |
| ● | Appraisal
Rights. The Company’s stockholders who do not tender their Shares in the Offer
and are entitled to demand appraisal for such Shares in accordance with, and otherwise comply
with, with the requirements of Section 262 of the DGCL will have the right to seek appraisal
for the fair value of such Shares in accordance with the DGCL unless and until any such stockholder
fails to perfect or effectively withdraws or loses its rights to appraisal and payment under
the DGCL. |
Without
limiting the foregoing, in the course of reaching any decision, the Company Board also considered certain countervailing factors and
risks to the Company and its stockholders relating to the Transactions including, but not limited to, the following (which are not necessarily
in the order of relative importance):
| ● | Risks
Associated with the Failure to Consummate the Merger. The risks and costs to the Company
if it fails to consummate the Transactions, including the transaction expenses and opportunity
costs associated therewith and the possibility of disruption to the Company’s operations,
diversion of management and employee attention, increased employee attrition, adverse effects
on the Company’s business, vendor and other commercial relationships, a decline in
the trading price of the Company’s stock and adverse effects on the market’s
perception of the Company and its prospects. |
| ● | Restrictions
on the Interim Operation of the Company’s Business. The restrictions on the conduct
of the Company’s business prior to the consummation of the Merger provided for under
the Merger Agreement, including covenants that the Company operate in the ordinary course
of business and refrain from taking certain actions without Parent’s consent, including
financing transactions, which, in the event Parent’s consent is withheld, could delay
or prevent the Company from undertaking business opportunities that may arise pending the
consummation of the Merger and otherwise limit the Company’s operations prior to closing. |
| ● | Company
Termination Fee; Liability for Willful Breach. The possibility that the Company
may be obligated to pay the Company Termination Fee in certain circumstances, and the possibility
that, even in circumstances where the Company Termination Fee is paid, the Company could
still be subject to liability for actual or intentional fraud under Delaware law or Willful
Breach. The possibility that Parent could breach the Merger Agreement, and the Company could
be unsuccessful in obtaining specific performance. |
| ● | Other
Restrictions in the Merger Agreement; The Existing Ownership by Saltchuk. The other
restrictions in the Merger Agreement, including with respect to soliciting other proposals
and the ability of the Company Board to change its recommendation. Saltchuk owns approximately
21.1% of the outstanding Shares of the Company. As a result, the Minimum Condition will be
satisfied if 29% of the Company’s outstanding Class A Common Stock validly tender and
do not validly withdraw their Shares in the Offer. The directors and executive officers own
approximately 6.9% of the outstanding Class A Common Stock of the Company. |
| ● | Participation
in Future Gains. If the Transactions are consummated, the Company will no longer be a
stand-alone public company and the Company’s stockholders will forgo any future increase
in the Company’s value that might result from its earnings or possible growth. |
| ● | Stockholder
Litigation. The prospect of litigation from stockholders or other constituents relating
to the Transactions and the potential costs and distractions associated therewith. |
| ● | Insider
Interests. The fact that the Company’s directors and officers may have interests
in the Transactions that may be different from, or in addition to, those of the Company’s
stockholders (for more information, please see the section “— Arrangements
Between the Company and its Directors and Executive Officers”). |
| ● | Taxable
Transaction. The fact that an all-cash transaction would generally be taxable to the
Company’s stockholders that are U.S. persons for U.S. federal income tax purposes. |
The
foregoing discussion is not intended to be an exhaustive list of the information and factors considered by the Company Board in its consideration
of the Offer, the Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement, but instead includes
specified factors that the Company Board considered in evaluating the Offer, the Merger, the Merger Agreement and the other transactions
contemplated by the Merger Agreement. In view of the complexity and wide variety of factors in connection with the Company Board’s
evaluation of the Offer, the Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement, the Company
Board may not find it practical to quantify, rank or otherwise assign relative weights to the different factors in reaching their respective
decisions. In addition, in considering the factors described above, the Company Board may give different weight to different factors.
Intent
to Tender
To
the Company’s knowledge, after making reasonable inquiry, all of the Company’s executive officers and directors currently
intend to tender, or cause to be tendered, all Shares held of record or beneficially owned by such persons pursuant to the Offer, as
it may be extended (other than Shares for which such holder does not have discretionary authority), although there are no agreements
requiring such persons to do so. The foregoing does not include any Shares over which, or with respect to which, any such executive officer
or director acts in a fiduciary or representative capacity or is subject to the instructions of a third party with respect to such tender.
Certain
Financial Projections
The
Company does not, as a matter of course, regularly prepare long-term projections or publicly disclose long-term forecasts or internal
projections as to future performance or results of operations, including future earnings, or other results, due to, among other things,
the inherent unpredictability of the underlying assumptions, estimates and projections.
However,
in connection with the Company Board’s review and evaluation of the Transactions and other strategic alternatives available to
the Company, the Company’s management, at the direction of the Company Board, prepared certain non-public, unaudited prospective
financial information for fiscal years 2024 through 2030 of the Company on a standalone basis (as summarized below), reflecting the currently
available estimates and judgments of the Company’s management (the “Projections”). The Projections were provided
to the Company Board for purposes of considering, analyzing and evaluating the Transactions. In addition, the Projections were provided
to Evercore, and the Company Board directed Evercore to use the Projections in its financial analyses and fairness opinion, as described
in Item 4 under the heading “The Solicitation or Recommendation—Opinion of Evercore Group L.L.C.” The Projections
were made available to other bidders (including Parent) as part of the strategic review process.
Cautionary
Statements
The
summary of the Projections is included in this Schedule 14D-9 solely to provide the Company’s stockholders access to certain financial
information that was made available to the Company Board and Evercore, and is not being included in this Schedule 14D-9 to influence
the decision of any stockholder of the Company regarding whether to tender Shares in the Offer or for any other purpose. The Projections
may differ from publicly available analyst estimates and projections and do not take into account any events or circumstances after the
date they were prepared, including the Transactions and the announcement of the Transactions. In addition, the Projections do not take
into account any adverse effects that may arise out of the termination of the Transactions, and should not be viewed in that context.
The Projections should not be utilized as public guidance and will not be provided in the ordinary course of the Company’s business
in the future.
The
Projections, while presented with numerical specificity, necessarily were based on numerous variables and assumptions that are inherently
uncertain and many of which are beyond the Company’s control. The Projections reflect numerous estimates and assumptions made by
the Company’s management, based on information available at the time the Projections were developed, with respect to industry performance,
general business, economic, competitive, regulatory, market and financial conditions and other future events, as well as matters specific
to the Company’s business, all of which are difficult to predict and many of which are beyond the Company’s control. The
Projections may be affected by the Company’s ability to achieve strategic goals, objectives and targets over the applicable periods.
Accordingly, there can be no assurance that the Projections will be realized, and actual results may vary materially from those shown.
Since the Projections cover multiple years, by their nature, they become subject to greater uncertainty with each successive year and
are unlikely to anticipate each circumstance that will have an effect on the Company’s product candidates, business or results
of operations.
The
Projections were not prepared with a view toward public disclosure or with a view toward complying with U.S. generally accepted accounting
principles (“GAAP”), the published guidelines of the SEC regarding projections or the guidelines established by the
American Institute of Certified Public Accountants. In addition, no independent registered public accounting firm or any other independent
accountant provided any assistance in preparing the Projections. Accordingly, no independent registered public accounting firm or any
other independent accountant has audited, reviewed, compiled, examined or otherwise performed any procedures with respect to the Projections
or expressed any opinion or any form of assurance with respect thereto.
The
inclusion of the Projections in this Schedule 14D-9 should not be regarded as an indication that the Company or any of its affiliates,
officers, directors, advisors or other representatives considered or consider the Projections to be predictive of actual future events,
and the Projections should not be relied upon as such or construed as financial guidance. None of the Company, its affiliates, officers,
directors, advisors or other representatives assumes any responsibility for the validity, reasonableness, accuracy or completeness of
the Projections. None of the Company or any of its affiliates, officers, directors, advisors or other representatives has made or makes
any representation or warranty to any of the Company’s stockholders or other person regarding the information included in the Projections
or the ultimate performance of the Company compared to the information contained in the Projections, the likelihood that the Projections
will be achieved or the overall future performance of the Company. The Projections also reflect subjective judgment in many respects
and thus are susceptible to multiple interpretations and periodic revisions based on actual experience and business developments.
The
Projections were prepared assuming the Company’s continued operation as a standalone, publicly traded company, without giving effect
to the Transactions, any changes to the Company’s operations or strategy that may be implemented following consummation of the
Transactions, any costs incurred in connection with the Transactions, or the effect of any business or strategic decision or action that
has been or will be taken as a result of the execution of the Merger Agreement. The Company’s actual future financial results may
differ materially from those expressed or implied in the Projections, including many that are beyond the Company’s ability to control
or predict. The Company cannot assure you that any of the Projections will be realized or that the Company’s future financial results
will not materially vary from the Projections. The Company’s management believed the assumptions used in the preparation of the
Projections to be reasonable at the time they were made, including, but not limited to, assumptions relating to the general business,
market share, the effect of global economic, geopolitical, regulatory, market and financial conditions, competition, pricing, market
exclusivity, selling, general and administrative expenses, effective tax rate, ability to raise future capital and other relevant factors
specific to the Company’s business, such as future rates for chartering of vessels. The foregoing is a summary of certain key assumptions
and does not purport to be a comprehensive overview of all assumptions reflected in the Projections.
Certain
of the measures included in the Projections, including unlevered free cash flow, levered free cash flow, and EBITDA, are financial measures
that are not calculated in accordance with GAAP. The Company’s management included such measures in the Projections because it
believes that such measures may be useful in evaluating, on a prospective basis, the potential operating results and cash flow of the
Company. Such non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented
in accordance with GAAP, and may not be comparable with similar titles used by other companies. Furthermore, there are limitations inherent
in non-GAAP financial measures because they exclude charges and credits that are required to be included in a GAAP presentation.
Financial
measures provided to a financial advisor are excluded from the definition of non-GAAP financial measures and, therefore, are not subject
to SEC rules regarding disclosures of non-GAAP financial measures, which would otherwise require a reconciliation of a non-GAAP financial
measure to a GAAP financial measure. Reconciliations of non-GAAP financial measures were not relied upon by Evercore for purposes of
their financial analyses as described in Item 4 under the heading “The Solicitation or Recommendation—Opinion of Evercore
Group L.L.C.” or by the Company Board in connection with its consideration of the Offer and the Merger. Accordingly, the Company
has not provided a reconciliation of any financial measures included in the Projections.
None
of the Company or any of its affiliates, officers, directors, advisors or other representatives undertakes any obligation to update or
otherwise revise or reconcile any information contained in the Projections to reflect circumstances existing after the date the Projections
were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the Projections
are shown to be in error. The Company does not intend to make publicly available any update or other revision to the Projections, except
as otherwise required by law.
The
summary below of the Projections should be evaluated, if at all, in conjunction with the historical financial statements and other information
regarding the Company contained in its public filings with the SEC. In light of the foregoing factors and the uncertainties inherent
in the Projections, stockholders are cautioned not to place undue, if any, reliance on the summary of the Projections included below,
including in making decisions as to whether to tender their Shares in the Offer.
Projections
| ($ in millions) | |
| Q2 ‘24 | | |
| Q3 ‘24 | | |
| Q4 ‘24 | | |
| 2024 | E | |
| 2025 | E | |
| 2026 | E | |
| 2027 | E | |
| 2028 | E | |
| 2029 | E | |
| 2030 | E |
| Total Revenue | |
$ | 113 | | |
$ | 113 | | |
$ | 124 | | |
$ | 461 | | |
$ | 500 | | |
$ | 532 | | |
$ | 512 | | |
$ | 503 | | |
$ | 483 | | |
$ | 448 | |
| Less: Vessel Operating Expenses | |
$ | (42 | ) | |
$ | (42 | ) | |
$ | (44 | ) | |
$ | (169 | ) | |
$ | (183 | ) | |
$ | (187 | ) | |
$ | (192 | ) | |
$ | (197 | ) | |
$ | (192 | ) | |
$ | (185 | ) |
| Less: Charter-in Expenses | |
$ | (17 | ) | |
$ | (17 | ) | |
$ | (17 | ) | |
$ | (68 | ) | |
$ | (68 | ) | |
$ | (68 | ) | |
$ | (68 | ) | |
$ | (68 | ) | |
$ | (64 | ) | |
$ | (64 | ) |
| Less: Profit Sharing (BB-Chartered Jones Act MR Tanker) | |
| - | | |
| - | | |
| - | | |
| - | | |
$ | (10 | ) | |
$ | (18 | ) | |
$ | (12 | ) | |
$ | (10 | ) | |
$ | (8 | ) | |
$ | (7 | ) |
| Less: Start Expense Amortization | |
$ | (0 | ) | |
$ | (0 | ) | |
$ | (0 | ) | |
$ | (0 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Less: G&A | |
$ | (8 | ) | |
$ | (8 | ) | |
$ | (8 | ) | |
$ | (32 | ) | |
$ | (33 | ) | |
$ | (34 | ) | |
$ | (35 | ) | |
$ | (36 | ) | |
$ | (35 | ) | |
$ | (33 | ) |
| Adjusted EBITDA | |
$ | 47 | | |
$ | 46 | | |
$ | 55 | | |
$ | 191 | | |
$ | 207 | | |
$ | 225 | | |
$ | 206 | | |
$ | 192 | | |
$ | 183 | | |
$ | 159 | |
| Plus: Proceeds on Vessel Disposal | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
$ | 9 | |
| Less: Drydock Capex | |
$ | (5 | ) | |
$ | (11 | ) | |
$ | (7 | ) | |
$ | (28 | ) | |
$ | (50 | ) | |
$ | (9 | ) | |
$ | (28 | ) | |
$ | (35 | ) | |
$ | (32 | ) | |
$ | (55 | ) |
| Less: Suezmax Engine Upgrade / Other Vessel Capex | |
$ | (7 | ) | |
$ | (19 | ) | |
$ | (4 | ) | |
$ | (37 | ) | |
$ | (18 | ) | |
$ | (11 | ) | |
| - | | |
| - | | |
| - | | |
| - | |
| Less: Other Capex | |
$ | (0 | ) | |
$ | (0 | ) | |
$ | (0 | ) | |
$ | (1 | ) | |
$ | (1 | ) | |
$ | (1 | ) | |
$ | (1 | ) | |
$ | (1 | ) | |
$ | (1 | ) | |
$ | (1 | ) |
| Less: Change in Net Working Capital | |
$ | (1 | ) | |
$ | (1 | ) | |
$ | 7 | | |
$ | 6 | | |
$ | (4 | ) | |
$ | 5 | | |
$ | (1 | ) | |
$ | (3 | ) | |
$ | 1 | | |
$ | (7 | ) |
| Less: Unlevered Cash Taxes | |
$ | (0 | ) | |
$ | (0 | ) | |
$ | (0 | ) | |
$ | (0 | ) | |
$ | (0 | ) | |
$ | (24 | ) | |
$ | (21 | ) | |
$ | (18 | ) | |
$ | (16 | ) | |
$ | (14 | ) |
| Unlevered Free Cash Flow | |
$ | 34 | | |
$ | 14 | | |
$ | 50 | | |
$ | 130 | | |
$ | 134 | | |
$ | 185 | | |
$ | 154 | | |
$ | 135 | | |
$ | 134 | | |
$ | 89 | |
Opinion
of Evercore Group L.L.C.
The
Company retained Evercore to act as its financial advisor in connection with the Company’s evaluation of strategic and financial
alternatives, including the Transactions. As part of this engagement, the Company requested that Evercore evaluate the fairness, from
a financial point of view, of the Offer Price and the Merger Consideration to be received by the holders of Class A Common Stock, other
than Parent and its affiliates, in the Transactions. At a meeting of the Company Board held on May 19, 2024, Evercore rendered to the
Company Board its opinion to the effect that, as of that date, and based upon and subject to the assumptions, limitations, qualifications
and conditions described in Evercore’s opinion, the Offer Price and the Merger Consideration to be received by the holders of Class
A Common Stock in the Transactions was fair, from a financial point of view, to such holders of Class A Common Stock, other than Parent
and its affiliates.
The
full text of the written opinion of Evercore, dated May 19, 2024, which sets forth, among other things, the procedures followed, assumptions
made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as
Annex A to this Schedule 14D-9 and is incorporated herein by reference. The Company encourages you to read the opinion carefully and
in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the Company Board (in its
capacity as such) in connection with its evaluation of the proposed Transactions. The opinion does not constitute a recommendation to
the Company Board or to any other persons in respect of the Transactions, including as to whether any holder of Class A Common Stock
should tender shares of Class A Common Stock pursuant to the Offer or take any other actions in respect of the Transactions. Evercore’s
opinion does not address the relative merits of the Transactions as compared to other business or financial strategies that might be
available to the Company, nor does it address the underlying business decision of the Company to engage in the Transactions.
In
connection with rendering its opinion, Evercore, among other things:
| ● | reviewed
certain publicly available business and financial information relating to the Company that
Evercore deemed to be relevant; |
| ● | reviewed
certain internal projected financial data relating to the Company prepared and furnished
to Evercore by management of the Company, as subjected to certain sensitivity analyses conducted
by Evercore at the direction of management of the Company and, on such basis, as approved
for Evercore’s use by the Company, which we refer to as the Projections and which are
described in more detail in this Item 4 under the heading “The Solicitation or Recommendation—Certain
Financial Projections”; |
| ● | discussed
with management of the Company their assessment of the past and current operations of the
Company, the current financial condition and prospects of the Company, and the Projections
(including their views on the risks and uncertainties of achieving the Projections); |
| ● | reviewed
the reported prices and the historical trading activity of the Class A Common Stock; |
| ● | compared
the financial performance of the Company and its stock market trading multiples with those
of certain other publicly traded companies that Evercore deemed relevant; |
| ● | compared
the financial performance of the Company and the valuation multiples relating to the Transactions
with the financial terms, to the extent publicly available, of certain other transactions
that Evercore deemed relevant; |
| ● | reviewed
the financial terms and conditions of the Merger Agreement; and |
| ● | performed
such other analyses and examinations and considered such other factors that Evercore deemed
appropriate. |
For
purposes of its analysis and opinion, Evercore assumed and relied upon the accuracy and completeness of the financial and other information
publicly available, and all of the information supplied or otherwise made available to, discussed with, or reviewed by Evercore, without
any independent verification of such information (and Evercore has not assumed responsibility or liability for any independent verification
of such information), and Evercore further relied upon the assurances of the management of the Company that they are not aware of any
facts or circumstances that would make such information inaccurate or misleading. With respect to the Projections, Evercore assumed with
the Company’s consent that they were reasonably prepared on bases reflecting the best currently available estimates and good-faith
judgments of management of the Company as to the future financial performance of the Company. Evercore expressed no view as to the Projections
or the assumptions on which they are based.
For
purposes of Evercore’s analysis and opinion, Evercore assumed, in all respects material to its analysis, that the representations
and warranties of each party contained in the Merger Agreement were true and correct, that each party would perform all of the covenants
and agreements required to be performed by it under the Merger Agreement and that all conditions to the consummation of the Transactions
would be satisfied without waiver or modification thereof. Evercore further assumed, in all respects material to its analysis, that all
governmental, regulatory or other consents, approvals or releases necessary for the consummation of the Transactions would be obtained
without any delay, limitation, restriction or condition that would have an adverse effect on the Company or the consummation of the Transactions
or reduce the contemplated benefits to the holders of Class A Common Stock of the Transactions.
Evercore
did not conduct a physical inspection of the properties or facilities of the Company and did not make or assume any responsibility for
making any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or other off-balance
sheet assets and liabilities) of the Company, nor was Evercore furnished with any such valuations or appraisals, nor did Evercore evaluate
the solvency or fair value of the Company under any state or federal laws relating to bankruptcy, insolvency or similar matters. Evercore’s
opinion was necessarily based upon information made available to Evercore as of May 19, 2024 and the financial, economic, market and
other conditions as they existed and could be evaluated as of that date. Subsequent developments may affect Evercore’s opinion
and Evercore does not have any obligation to update, revise or reaffirm its opinion.
Evercore
was not asked to pass upon, and expressed no opinion with respect to, any matter other than the fairness to the holders of Class A Common
Stock, other than Parent and its affiliates, from a financial point of view, of the Offer Price and the Merger Consideration. Evercore
did not express any view on, and its opinion did not address, the fairness of the proposed Transactions to, or any consideration received
in connection therewith by, the holders of any other class of securities, creditors or other constituencies of the Company, nor as to
the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of the
Company, or any class of such persons, whether relative to the Offer Price, the Merger Consideration or otherwise. Evercore was not asked
to, nor did Evercore express any view on, and its opinion did not address, any other term or aspect of the Merger Agreement or the Transactions,
including, without limitation, the structure or form of the Transactions, or any term or aspect of any other agreement or instrument
contemplated by the Merger Agreement or entered into or amended in connection with the Merger Agreement. Evercore’s opinion did
not address the relative merits of the Transaction as compared to other business or financial strategies that might have been available
to the Company, nor did it address the underlying business decision of the Company to engage in the Transactions. Evercore’s opinion
did not constitute a recommendation to the Company Board or to any other persons in respect of the Transactions, including as to whether
any person should tender shares of Class A Common Stock in the Offer or take any other action in respect of the Transactions. Evercore
is not a legal, regulatory, accounting or tax expert and assumed the accuracy and completeness of assessments by the Company and its
advisors with respect to legal, regulatory, accounting and tax matters.
Set
forth below is a summary of the material financial analyses reviewed by Evercore with the Company Board on May 19, 2024, in connection
with rendering its opinion. The following summary, however, does not purport to be a complete description of the analyses performed by
Evercore. The order of the analyses described and the results of these analyses do not represent relative importance or weight given
to these analyses by Evercore in connection with its opinion. Except as otherwise noted, the following quantitative information, to the
extent that it is based on market data, is based on market data that existed on or before May 19, 2024, and is not necessarily indicative
of current market conditions.
For
purposes of its analyses and reviews, Evercore considered industry performance, general business, economic, market and financial conditions,
and other matters, as they existed and could be evaluated as of the date of its opinion, many of which were beyond the control of the
Company. The estimates contained in Evercore’s analyses and reviews, and the ranges of valuations resulting from any particular
analysis or review, were not necessarily indicative of actual values or predictive of future results or values, which may have been significantly
more or less favorable than those suggested by Evercore’s analyses and reviews. In addition, analyses and reviews relating to the
value of companies, businesses or securities did not purport to be appraisals or to reflect the prices at which companies, businesses
or securities actually may have been sold. Accordingly, the estimates used in, and the results derived from, Evercore’s analyses
and reviews were inherently subject to substantial uncertainty.
The
following summary of Evercore’s financial analyses includes information presented in tabular format. In order to fully understand
the analyses, the tables should be read together with the full text of each summary. The tables are not intended to stand alone and alone
do not constitute a complete description of Evercore’s financial analyses. Considering the tables below without considering the
full narrative description of Evercore’s financial analyses, including the methodologies and assumptions underlying such analyses,
could create a misleading or incomplete view of such analyses.
Summary
of Evercore’s Financial Analyses
Discounted
Cash Flow Analysis
Evercore
performed discounted cash flow analyses of the Company to calculate the estimated present value of the unlevered free cash flow (as described
in this Item 4 under the heading “The Solicitation or Recommendation—Certain Financial Projections”) that the
Company was forecasted to generate during the Company’s fiscal years 2024 through 2050 based on the Projections. Evercore analyzed
the Company’s cash flows across multiple scenarios by applying a sensitivity analysis to long-term charter rates (after firm charters
and likely option extensions have expired) of positive 5.0% to negative 15.0%, which range was selected based on guidance from Company
management and Evercore’s professional judgment and experience, to estimate the unlevered, after-tax free cash flows that the Company
was forecasted to generate. The cash flows in each case were then discounted to present value as of March 31, 2024 using discount rates
ranging from 10.00% to 11.00%, which were based on an estimate of the Company’s weighted average cost of capital, and the mid-year
cash flow discounting convention taking into account, among other factors, the impact of estimated cost of equity based on application
of the capital asset pricing model, details regarding the capitalization of the Company and other public companies deemed most relevant
to consider, and its professional judgment given the nature of the Company’s business and its industry. Based on this range of
implied enterprise values, the Company’s estimated net debt as of March 31, 2024 (calculated as total debt (excluding the Company’s
right-of-use operating lease liability), less cash and cash equivalents), and the number of fully diluted shares of Class A Common Stock,
in each case as provided by the Company’s management, this analysis indicated a range of implied equity values per share of Class
A Common Stock of $5.86 to $10.65.
Selected
Public Companies Trading Analysis
Evercore
reviewed and compared certain financial information of the Company to corresponding financial multiples for the selected publicly traded
companies that are in the international shipping industry, which we refer to as International Tanker Companies.
Evercore
considered companies that are subject to the Jones Act (specifically, Kirby Corporation and Matson, Inc.), but ultimately decided that
the business models and dynamics in the markets in which these companies operate were too different to be relevant for analytical purposes.
For
each of the International Tanker Companies, which included (i) product tanker companies Scorpio Tankers Inc., Hafnia Limited, TORM plc
and Ardmore Shipping Corporation, (ii) crude tanker companies DHT Holdings, Inc. and Okeanis Eco Tankers Corp., and (iii) crude / product
mixed tanker companies Frontline plc, International Seaways, Inc., Teekay Tankers Ltd. and Tsakos Energy Navigation (TEN) Ltd, Evercore
calculated enterprise value (defined as equity market capitalization plus total debt, plus preferred equity, plus minority interest,
less unconsolidated assets, less cash and cash equivalents, as applicable) as a multiple of the estimated EBITDA (defined as earnings
before interest, taxes, depreciation and amortization) for the 2024 and 2025 calendar years, which we refer to as 2024E Enterprise Value
/ EBITDA and 2025E Enterprise Value / EBITDA; in each case, based on closing share prices as of May 17, 2024. Estimated financial data
of the selected companies were based on publicly available research analysts’ estimates.
| | |
Enterprise Value / EBITDA | |
| International Tanker
Companies | |
| 2024E | | |
| 2025E | |
| Product Tankers | |
| | | |
| | |
| Mean | |
| 5.2 | x | |
| 6.2 | x |
| Median | |
| 5.1 | x | |
| 6.1 | x |
| Crude Tankers | |
| | | |
| | |
| Mean | |
| 6.6 | x | |
| 5.7 | x |
| Median | |
| 6.6 | x | |
| 5.7 | x |
| Crude / Product Mixed | |
| | | |
| | |
| Mean | |
| 4.9 | x | |
| 5.2 | x |
| Median | |
| 4.5 | x | |
| 5.2 | x |
| Total Mean | |
| 5.3 | x | |
| 5.7 | x |
| Total Median | |
| 5.2 | x | |
| 6.0 | x |
Based
on the multiples it derived and based on its professional judgment and experience, Evercore selected a reference range of 2024E Enterprise
Value / EBITDA and 2025E Enterprise Value / EBITDA multiples of 4.0x—6.0x and applied this range of multiples to the Company’s
calendar year 2024 and 2025 Adjusted EBITDA as set forth in the Projections. Based on this range of implied enterprise values, this analysis
indicated ranges of implied equity values per share of Class A Common Stock as shown below, compared to the consideration of $8.50 per
share of Class A Common Stock in the Transactions.
| Reference
Range | |
| Implied
Equity Value Per Share of Class A Common Stock | |
| 2024E EBITDA | |
| $6.10 to $11.09 | |
| 2025E EBITDA | |
| $6.91 to $12.30 | |
Although
none of the selected companies is directly comparable to the Company, Evercore selected these companies because they are publicly traded
companies that Evercore, in its professional judgment and experience, considered relevant to the Company. In evaluating the selected
companies, Evercore made judgments and assumptions with regard to general business, economic and market conditions affecting the selected
companies and other matters, as well as differences in the selected companies’ financial, business and operating characteristics.
Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations
and judgments regarding many factors that could affect the relative values of the selected companies and the multiples derived from the
selected companies. Mathematical analysis, such as determining the mean or median, is not in itself a meaningful method of using the
data of the selected companies.
Selected
Transactions Analysis
Evercore
reviewed financial information related to selected transactions involving target companies in the shipping industry, which we refer to
collectively as the Selected Transactions.
For
the Selected Transactions, Evercore calculated the total enterprise value (defined as the target company’s implied equity value
based on the consideration paid in the applicable transaction plus total debt, plus preferred equity, plus minority interest, less unconsolidated
assets, less cash and cash equivalents, as applicable) as a multiple of the target company’s EBITDA for the 12-month period preceding
the announcement of the relevant transaction, which we refer to as TEV / LTM EBITDA.
Based
on the multiples it derived from the Selected Transactions and based on its professional judgment and experience, Evercore selected a
reference range of TEV / LTM EBITDA multiples of 5.0x to 9.0x and applied this range of multiples to the Company’s 2024A Adjusted
EBITDA as of March 31, 2024, as set forth in the Projections. Based on this range of implied enterprise values and the Company’s
estimated net debt (calculated as total debt (excluding the Company’s right-of-use operating lease liability), less cash and cash
equivalents) as of March 31, 2024, this analysis indicated ranges of implied equity values per share of Class A Common Stock of $7.78
to $17.10, compared to the consideration of $8.50 per share of Class A Common Stock in the Transactions.
Although
none of the Selected Transactions are directly comparable to the Transactions, Evercore selected the Selected Transactions because they
are transactions that Evercore, in its professional judgment and experience, considered relevant to the Transactions. In evaluating the
Selected Transactions, Evercore made judgments and assumptions with regard to general business, economic and market conditions affecting
the Selected Transactions and other matters, as well as differences in the selected target companies’ financial, business and operating
characteristics. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves
complex considerations and judgments regarding many factors that could affect the relative values of the selected companies and the multiples
derived from the Selected Transactions. Mathematical analysis, such as determining the mean or median, is not in itself a meaningful
method of using the data of the selected transactions.
Other
Factors
Evercore
also reviewed and considered other factors, which were not considered part of its financial analyses in connection with rendering its
opinion, but were referenced for informational purposes, including, among other things, the reference precedent premia and 52-week trading
range analyses described below.
Premium
Paid Analysis
Evercore
reviewed and analyzed premia paid in transactions (and specifically all-cash transactions) with transaction values between $700 million
and $1 billion since January 2010. Using publicly available information, Evercore calculated the premia paid as the percentage by which
the per share consideration paid or proposed to be paid in each such transaction exceeded the closing market prices per share of the
target companies one day, one week and one month prior to announcement of each transaction.
This
analysis indicated the following:
All
Transactions
| | |
One Day Prior | | |
One Week Prior | | |
One Month Prior | |
| Median | |
| 31.1 | % | |
| 31.5 | % | |
| 37.4 | % |
| 75th Percentile | |
| 50.1 | % | |
| 45.8 | % | |
| 62.0 | % |
| Mean | |
| 40.3 | % | |
| 40.0 | % | |
| 48.3 | % |
| 25th Percentile | |
| 15.3 | % | |
| 16.5 | % | |
| 19.7 | % |
All
Cash Transactions
| | |
One Day Prior | | |
One Week Prior | | |
One Month Prior | |
| Median | |
| 32.5 | % | |
| 32.8 | % | |
| 40.8 | % |
| 75th Percentile | |
| 55.4 | % | |
| 56.3 | % | |
| 62.8 | % |
| Mean | |
| 43.4 | % | |
| 44.0 | % | |
| 51.1 | % |
| 25th Percentile | |
| 17.8 | % | |
| 20.7 | % | |
| 27.7 | % |
Based
on the results of this analysis, its professional judgment and experience, Evercore applied a reference range of premia of 20.0% to 40.0%
to the unaffected closing share price of Class A Common Stock as of January 26, 2024 of $5.90. This analysis indicated implied equity
values per share of Class A Common Stock as of January 26, 2024 of approximately $7.08 to $8.26, compared to the Merger Consideration
of $8.50 per Share.
52-Week
Trading Range
Evercore
reviewed historical trading prices of the shares of Class A Common Stock during the 52-week period ended May 17, 2024, noting that the
low and high closing prices during such period ranged from $3.64 to $6.89.
Miscellaneous
The
foregoing summary of Evercore’s financial analyses does not purport to be a complete description of the analyses or data
presented by Evercore to the Company Board. In connection with the review of the Transactions by the Company Board, Evercore
performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a fairness
opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of
the analyses or of the summary described above, without considering the analyses as a whole, could create an incomplete view of the
processes underlying Evercore’s opinion. In arriving at its fairness determination, Evercore considered the results of all the
analyses and did not draw, in isolation, conclusions from or with regard to any one analysis or factor considered by it for purposes
of its opinion. Rather, Evercore made its determination as to fairness on the basis of its professional judgment and experience
after considering the results of all the analyses. In addition, Evercore may have given various analyses and factors more or less
weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a
result, the ranges of valuations resulting from any particular analysis or combination of analyses described above should not be
taken to be the view of Evercore with respect to the actual value of the Class A Common Stock. Rounding may result in total sums set
forth in this section not equaling the total of the figures shown. Evercore prepared these analyses for the purpose of providing an
opinion to the Company Board as to the fairness, from a financial point of view, of the Offer Price and the Merger Consideration to
the holders of Class A Common Stock, other than Parent and its affiliates, in the Transactions. These analyses do not purport to be
appraisals or to necessarily reflect the prices at which the business or securities actually may be sold. Any estimates contained in
these analyses are not necessarily indicative of actual future results, which may be significantly more or less favorable than those
suggested by such estimates. Accordingly, estimates used in, and the results derived from, Evercore’s analyses are inherently
subject to substantial uncertainty, and Evercore assumes no responsibility if future results are materially different from those
forecasted in such estimates.
Evercore’s
financial advisory services and its opinion were provided for the information and benefit of the Company Board (in its capacity as such)
in connection with its evaluation of the proposed Transactions. The issuance of Evercore’s opinion was approved by an Opinion Committee
of Evercore.
Evercore
did not recommend any specific amount of consideration to the Company Board or the Company’s management or that any specific amount
of consideration constituted the only appropriate consideration in the Transactions for the holders of Class A Common Stock.
Pursuant
to the terms of Evercore’s engagement letter with the Company, the Company has agreed to pay Evercore a fee for its services in
the amount of approximately $11.05 million, of which $100,000 was paid upon the execution of the engagement letter, $1 million was paid
upon delivery of Evercore’s opinion, and the balance of which will be payable contingent upon the consummation of the Transactions.
The Company has also agreed to reimburse Evercore for certain of its expenses (estimated to be approximately $200,000) and to indemnify
Evercore against certain liabilities arising out of its engagement.
During
the two (2) year period prior to the date of its opinion, Evercore and its affiliates have provided financial advisory services to the
Company and did not receive any fees for the rendering of these services during such period. In addition, during the two-year period
prior to the date of its opinion, Evercore and its affiliates have not been engaged to provide financial advisory or other services to
Parent or its affiliates, and Evercore has not received any compensation from Parent or its affiliates during such period. Evercore may
provide financial advisory or other services to the Company and Parent in the future, and in connection with any such services Evercore
may receive compensation.
Evercore
and its affiliates engage in a wide range of activities for its and their own accounts and the accounts of customers, including corporate
finance, mergers and acquisitions, equity sales, trading and research, private equity, placement agent, asset management and related
activities. In connection with these businesses or otherwise, Evercore and its affiliates and/or its or their respective employees, as
well as investment funds in which any of them may have a financial interest, may at any time, directly or indirectly, hold long or short
positions and may trade or otherwise effect transactions for their own accounts or the accounts of customers, in debt or equity securities,
senior loans and/or derivative products or other financial instruments of or relating to the Company, Parent, potential parties to the
Transactions and/or any of their respective affiliates or persons that are competitors, customers or suppliers of the Company or Parent.
The
Company engaged Evercore to act as a financial advisor based on Evercore’s qualifications, experience and reputation. Evercore
is an internationally recognized investment banking firm and regularly provides fairness opinions to its clients in connection with mergers
and acquisitions, leveraged buyouts and valuations for corporate and other purposes.
ITEM
5. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED
Neither
OSG nor any person acting on its behalf has employed, retained or compensated any person to make solicitations or recommendations to
OSG’s stockholders on its behalf concerning the Offer or the Merger, except that such solicitations or recommendations may be made
by directors, officers or employees of OSG, for which services no additional compensation will be paid.
The
Company Board engaged Evercore as its financial advisor in connection with its review and assessment of various strategic and financial
alternatives, including with respect to its evaluation of the Offer Price and the Merger Consideration. In connection with such engagement,
Evercore provided to the Company Board Evercore’s opinion described in Item 4 under the headings “The Solicitation or
Recommendation—Opinion of Evercore Group L.L.C.” and “The Solicitation or Recommendation—Background
of the Offer and the Merger” and filed as Annex A hereto and incorporated herein by reference. Evercore’s opinion and
any materials provided in connection therewith do not constitute advice or a recommendation to any stockholder of the Company as to whether
to tender any Shares pursuant to the Offer, or otherwise act with respect to the Transactions or any other matter. In connection with
Evercore’s services as the financial advisor to the Company Board, OSG agreed to pay Evercore a cash transaction fee upon consummation
of the Transactions, which cash transaction fee is currently estimated to be approximately $11.05 million. OSG has previously paid Evercore
a cash opinion fee of $1.0 million that became payable upon the rendering of Evercore’s opinion with respect to the Transactions,
which will be credited against the foregoing cash transaction fee. In addition, OSG has agreed to reimburse Evercore for certain expenses
(estimated to be approximately $200,000) and indemnify Evercore against certain liabilities arising out of its engagement.
Additional
information related to Evercore’s retention as OSG’s financial advisor is set forth in Item 4 under the headings “The
Solicitation or Recommendation—Opinion of Evercore Group L.L.C.” and “The Solicitation or Recommendation—Background
of the Offer and the Merger” and is hereby incorporated herein by reference. OSG selected Evercore as its financial advisor
based upon, among other things, Evercore’s qualifications, professional reputation and industry experience.
ITEM
6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
Information
regarding the beneficial ownership of shares by the current executive officer and directors of the Company in Item 3 under the heading
“Past Contacts, Transactions, Negotiations and Agreements—Arrangements Between the Company and its Directors and Executive
Officers” is incorporated into this Item 6 by reference.
Other
than (i) exercise of Company Warrants, (ii) the scheduled vesting of Company Stock Options and Company RSU Awards, (iii) the acceleration
of vesting of all Company Stock Options and Company RSU Awards at the Offer Acceptance Time, (iv) issuances by OSG of Shares upon the
exercise of vested Company Stock Options, (v) on June 6, 2024, the granting of the 2024 Director Awards in the ordinary course of business
in accordance with the Company’s Non-Employee Director Incentive Compensation Plan, (vi) the disposition of any Shares pursuant
to and in accordance with that certain Rule 10b5-1 Sales Plan, dated as of May 11, 2023, by and between Samuel Norton and Stifel, Nicolaus
& Company, Incorporated, pursuant to which 50,000 shares of Class A Common Stock held by Mr. Norton are disposed of on the fifteenth
(15th) of each month, and (vii) on May 31, 2024, Mr. Norton made a charitable donation of (A) 25,000 shares of Class A Common
Stock to the Noble and Greenough School and (B) 180,000 shares of Class A Common Stock to The Miami Foundation Inc., no transactions
with respect to the Shares have been effected by OSG or, to the knowledge of OSG after making reasonable inquiry, by any of its executive
officers, directors, affiliates or subsidiaries during the sixty (60) days prior to the date of this Schedule 14D-9.
ITEM
7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS
Except
as set forth in this Schedule 14D-9 (including the exhibits to this Schedule 14D-9) or incorporated in this Schedule 14D-9 by reference,
OSG is not undertaking or engaged in any negotiations in response to the Offer that relate to:
| ● | a
tender offer for or other acquisition of OSG’s securities by OSG, any of its subsidiaries
or any other person; |
| ● | any
extraordinary transaction, such as a merger, reorganization or liquidation, involving OSG
or any of its subsidiaries; |
| ● | any
purchase, sale or transfer of a material amount of assets of OSG or any of its subsidiaries;
or |
| ● | any
material change in the present dividend rate or policy or indebtedness or capitalization
of OSG. |
Except
as set forth in this Schedule 14D-9 (including the exhibits to this Schedule 14D-9) or incorporated in this Schedule 14D-9 by reference,
there are no transactions, resolutions of the Company Board, agreements in principle or signed contracts entered into in response to
the Offer that relate to, or result in, one or more of the matters referred to in the preceding paragraph.
The
information contained in this Schedule 14D-9 set forth above under the heading “The Solicitation of Recommendation—Background
and Reasons for the Company’s Board Recommendation” is hereby incorporated by reference. The information contained in
the Offer to Purchase in Section 12 under the caption “The Tender Offer— Purpose of the Offer
and Plans for OSG ” is
also hereby incorporated by reference.
ITEM
8. ADDITIONAL INFORMATION
The
information set forth under the heading “Past Contacts, Transactions, Negotiations and Agreements—Arrangements Between
the Company and its Directors and Executive Officers” is incorporated herein by reference.
Named
Executive Officer Golden Parachute Compensation.
See
above under the heading “Past Contacts, Transactions, Negotiations and Agreements—Arrangements Between the Company and
its Directors and Executive Officers—Golden Parachute Compensation” for information required by Item 402(t) of Regulation
S-K regarding the compensation of each of the Company’s named executive officers that is based on or otherwise relates to the Offer
and the Merger, which is incorporated herein by reference.
Appraisal
Rights
Holders
of the Shares will not have appraisal rights in connection with the Offer. However, if the Offer is successful and the Merger is consummated,
OSG stockholders and beneficial owners who continuously hold or own Shares through the Effective Time, who do not tender their Shares
in the Offer (or, if tendered, validly and subsequently withdraw such Shares prior to the time Purchaser accepts properly tendered Shares
for purchase and do not otherwise waive their appraisal rights), who are entitled to appraisal rights under the DGCL, who properly demand
and perfect appraisal of their Shares under Section 262 of the DGCL (“Section 262”), who do not withdraw their demands
or otherwise lose their rights of appraisal prior to the Effective Time, and who otherwise timely and strictly comply with the statutory
requirements of Section 262 will be entitled to seek appraisal of their Shares and to receive payment in cash for the “fair value”
of their Shares in connection with the Merger under Section 262. The following discussion is not a complete statement of the law pertaining
to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262, which may be accessed without subscription
or cost at the following publicly available website: https://delcode.delaware.gov/title8/c001/sc09/index.html#262. The following summary
does not constitute any legal or other advice and does not constitute a recommendation that record holders or beneficial owners of Class
A Common Stock exercise their appraisal rights under Section 262.
Any
person contemplating the exercise of such appraisal rights should carefully review the provisions of Section 262, which may be accessed
without subscription or cost at the link in the preceding paragraph, particularly the procedural steps required to properly demand and
perfect such rights. Failure to follow the steps required by Section 262 for demanding and perfecting appraisal rights may result in
the loss of such rights. All references in Section 262 and in this summary to a (i) “stockholder” are to the record holder
of Shares unless otherwise expressly noted herein, (ii) “beneficial owner” are to a person who is the beneficial owner of
Shares held either in voting trust or by a nominee on behalf of such person, and (iii) “person” are to an individual, corporation,
partnership, unincorporated association or other entity.
Under
Section 262, if the Merger is completed, OSG stockholders and beneficial owners who: (i) properly submit a written demand for appraisal
of their Shares; (ii) do not tender their Shares in the Offer (or, if tendered, validly and subsequently withdraw such Shares prior to
the time Purchaser accepts properly tendered Shares for purchase and do not otherwise waive their appraisal rights); (iii) hold such
Shares on the date of the making of a demand under clause (i) and continue to hold their Shares of record or beneficially, as applicable,
through the effective date of the Merger; (iv) do not thereafter withdraw their demand for appraisal of their Shares or otherwise lose
their appraisal rights, each in accordance with the DGCL; and (v) otherwise timely and strictly comply with the statutory requirements
and satisfy certain ownership thresholds set forth in Section 262, may be entitled to have their Shares appraised by the Delaware Court
of Chancery and to receive payment in cash of the “fair value” of the Shares, exclusive of any element of value arising from
the accomplishment or expectation of the Merger, together with interest to be paid on the amount determined to be “fair value,”
if any, as determined by the Delaware Court of Chancery. A beneficial owner may, in such person’s name, demand in writing an appraisal
of such beneficial owner’s Shares in accordance with the procedures of subsection (d)(3) of Section 262 summarized herein, provided
that (i) such beneficial owner continuously owns such Shares through the effective date of the Merger and otherwise satisfies the requirements
applicable to a stockholder under the first sentence of subsection (a) of Section 262, and (ii) the demand made by such beneficial owner
reasonably identifies the holder of record of the Shares for which that demand is made, is accompanied by documentary evidence of such
beneficial owner’s beneficial ownership of Shares and a statement that such documentary evidence is a true and correct copy of
what it purports to be, and provides an address at which such beneficial owner consents to receive notices given by the Surviving Corporation
under Section 262 and to be set forth on the Verified List (as defined below) required by Section 262(f). The Shares are currently listed
on a national securities exchange, and, assuming such Shares remain listed on a national securities exchange immediately prior to the
Merger (which OSG expects to be the case), after an appraisal petition has been filed, the Delaware Court of Chancery will dismiss appraisal
proceedings as to all persons who are otherwise entitled to appraisal rights unless (i) the total number of Shares entitled to appraisal
exceeds 1% of the outstanding Shares eligible for appraisal as measured in accordance with subsection (g) of Section 262; or (ii)
the value of the aggregate Merger Consideration provided for such total number of Shares exceeds $1,000,000 (conditions (i) and (ii)
referred to as the “ownership thresholds”).
Unless
the Delaware Court of Chancery, in its discretion, determines otherwise for good cause shown, and except as otherwise provided in subsection
(h) of Section 262, interest on an appraisal award from the effective date of the Merger through the date of payment of the judgment
will be compounded quarterly and accrue at five percent (5%) over the Federal Reserve System (the “Federal Reserve”)
discount rate (including any surcharge) as established from time to time during the period between the effective date of the Merger and
the date the judgment is paid. However, at any time before the Delaware Court of Chancery enters judgment in the appraisal proceedings,
the Surviving Corporation may voluntarily pay to each person entitled to appraisal an amount in cash pursuant to subsection (h) of Section
262, in which case interest will accrue after the time of such payment as provided herein only on the sum of (i) the difference, if any,
between the amount so paid and the “fair value” of the Shares as determined by the Delaware Court of Chancery, and (ii) any
interest theretofore accrued prior to the time of such payment. The Surviving Corporation is under no obligation to make such voluntary
cash payment prior to such entry of judgment. Persons considering seeking appraisal should be aware that the “fair value”
of their Shares as determined pursuant to Section 262 of the DGCL could be more than, the same as, or less than the value of the Merger
Consideration that they would receive pursuant to the Merger Agreement if they did not seek appraisal of their Shares.
Under
Section 262, if the Merger is approved pursuant to Section 251(h) of the DGCL, OSG, before the effective date of the Merger, or the Surviving
Corporation, within ten (10) days after the effective date of the Merger, must notify each of its stockholders who is entitled to appraisal
rights of the approval of the Merger and that appraisal rights are available for any or all of the Shares and include in the notice either
a copy of Section 262 or information directing the stockholders to a publicly available electronic resource at which Section 262 may
be accessed without subscription or cost. This Schedule 14D-9 constitutes OSG’s notice to the OSG stockholders that appraisal
rights are available in connection with the Merger, and the full text of Section 262 may be accessed without subscription or cost at
the following publicly available website: https://delcode.delaware.gov/title8/c001/sc09/index.html#262. In connection with the Merger,
any person who wishes to exercise appraisal rights, or who wishes to preserve his, her or its right to do so, should review Section 262
carefully. Failure to comply with the requirements of Section 262 in a timely and proper manner may result in the loss of appraisal rights
under the DGCL. A person who loses his, her or its appraisal rights will be entitled to receive the Merger Consideration if his, her
or its Shares are not tendered (or, if tendered, are validly and subsequently withdrawn prior to the time Purchaser accepts properly
tendered Shares for purchase). Moreover, because of the complexity of the procedures for exercising the right to seek appraisal, OSG
believes that if a person considers exercising such rights, that person should seek the advice of legal counsel.
Stockholders
and beneficial owners wishing to exercise the right to seek an appraisal of their Shares must satisfy ALL of the following conditions:
| ● | within
the later of the consummation of the Offer and twenty (20) days after the mailing of this
Schedule 14D-9 (which date of mailing is on or about June 10, 2024), deliver to OSG a written
demand for appraisal of Shares held, which demand must reasonably inform OSG of the identity
of the stockholder or beneficial owner and that such stockholder or beneficial owner is demanding
appraisal and, in the case of a demand made by a beneficial owner of Shares, must also reasonably
identify the holder of record of the Shares for which the demand is being made, be accompanied
by documentary evidence of such beneficial owner’s beneficial ownership of Shares and
a statement that such documentary evidence is a true and correct copy of what it purports
to be, and provide an address at which such beneficial owner consents to receive notices
given by the Surviving Corporation and to be set forth on the Verified List (as defined below); |
| ● | not
tender such stockholder’s or beneficial owner’s Shares in the Offer (or, if tendered,
validly and subsequently withdraw such Shares prior to the time Purchaser accepts properly
tendered Shares for purchase and do not otherwise waive their appraisal rights); |
| ● | continuously
hold of record or beneficially own the Shares from the date on which the written demand for
appraisal is made through the effective date of the Merger; and |
| ● | otherwise
timely and strictly comply with the procedures of Section 262. |
Within
one hundred and twenty (120) days after the effective date of the Merger, any person who has complied with the applicable requirements
of Section 262 and is otherwise entitled to appraisal rights, or the Surviving Corporation, may commence an appraisal proceeding by filing
a petition in the Delaware Court of Chancery, with a copy served on the Surviving Corporation in the case of a petition filed by a person,
demanding a determination of the fair value of the Shares held by all such persons that have demanded appraisal. The Surviving Corporation
is under no obligation to file any petition and has no intention of doing so.
In
addition, after an appraisal petition has been filed, the Delaware Court of Chancery, at a hearing to determine persons entitled to appraisal
rights, will dismiss appraisal proceedings as to all persons who asserted appraisal rights unless one of the ownership thresholds is
met.
Filing
Written Demand
Any
OSG stockholder or beneficial owner wishing to exercise appraisal rights must deliver to OSG, within the later of the consummation of
the Offer and twenty (20) days after the mailing of this Schedule 14D-9 (which date of mailing is on or about June 10, 2024), a written
demand for the appraisal of such person’s Shares. A person exercising appraisal rights must hold the Shares for which they will
seek appraisal upon the making of the demand for appraisal and must continue to hold the Shares through the effective date of the Merger.
A stockholder’s or beneficial owner’s failure to make the written demand within the requisite time period described above
will constitute a waiver of appraisal rights.
Record
Holders
A
stockholder is entitled to demand appraisal rights for the Shares registered in that stockholder’s name, provided that (i) such
stockholder continuously owns such Shares through the effective date of the Merger and otherwise satisfies the requirements applicable
to a stockholder under the first sentence of subsection (a) of Section 262, and (ii) the demand made by such stockholder for appraisal
in respect of such Shares reasonably informs OSG of the identity of the stockholder and states that the stockholder intends thereby to
demand appraisal of the stockholder’s Shares in connection with the Merger.
Beneficial
Owners
A
beneficial owner may, in such person’s name, demand in writing an appraisal of such beneficial owner’s Shares in accordance
with the procedures of subsection (d)(3) of Section 262 summarized herein, provided that (i) such beneficial owner continuously owns
such Shares through the effective date of the Merger and otherwise satisfies the requirements applicable to a stockholder under the first
sentence of subsection (a) of Section 262, and (ii) the demand made by such beneficial owner reasonably identifies the holder of record
of the Shares for which the demand is made, is accompanied by documentary evidence of such beneficial owner’s beneficial ownership
of stock and a statement that such documentary evidence is a true and correct copy of what it purports to be, and provides an address
at which such beneficial owner consents to receive notices given by the Surviving Corporation under Section 262 and to be set forth on
the Verified List (as defined below).
All
written demands for appraisal pursuant to Section 262 should be mailed or delivered to:
Overseas
Shipholding Group, Inc.
302 Knights Run Avenue, Suite 1200
Tampa, Florida 33602
Attn: Susan Allan, General Counsel
Any
person entitled to appraisal rights who has delivered a written demand to OSG and who has not commenced an appraisal proceeding or joined
that proceeding as a named party may withdraw his, her or its demand for appraisal and accept the Merger Consideration by delivering
to OSG a written withdrawal of the demand for appraisal at any time within sixty (60) days after the effective date of the Merger. No
appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any person without the approval of the Delaware Court
of Chancery, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just; provided, however,
that this shall not affect the right of any person who has not commenced an appraisal proceeding or joined that proceeding as a named
party to withdraw such person’s demand for appraisal and to accept the Merger Consideration within sixty (60) days after the effective
date of the Merger. If an appraisal proceeding is commenced, except with respect to any person who withdraws such person’s demand
in accordance with the proviso in the immediately preceding sentence, if the Delaware Court of Chancery does not approve the dismissal
of an appraisal proceeding with respect to a stockholder or beneficial owner, such stockholder or beneficial owner will be entitled to
receive only the appraised value determined in any such appraisal proceeding, which value could be less than, equal to or more than the
Merger Consideration.
Notice
by the Surviving Corporation
If
the Merger is completed, within ten (10) days after the effective date of the Merger, the Surviving Corporation will notify each stockholder
who has properly made a written demand for appraisal pursuant to Section 262 and who has not tendered their Shares, and any beneficial
owner who has demanded appraisal in accordance with Section 262, that the Merger has become effective and the effective date of the Merger.
Filing
a Petition for Appraisal
Within
one hundred and twenty (120) days after the effective date of the Merger, but not thereafter, the Surviving Corporation or any person
who has complied with Section 262 and who is otherwise entitled to seek appraisal under Section 262 (including for this purpose any beneficial
owner of the relevant Shares) may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery, with a copy
served on the Surviving Corporation in the case of a petition filed by a stockholder or beneficial owner, demanding a determination of
the fair value of the Shares held by all such persons that have demanded appraisal. The Surviving Corporation is under no obligation,
and has no present intention, to file a petition, and no person should assume that the Surviving Corporation will file a petition or
initiate any negotiations with respect to the “fair value” of the Shares. Accordingly, any stockholders or beneficial owners
who desire to have their Shares appraised should initiate all necessary action to perfect their appraisal rights in respect of their
Shares within the time and in the manner prescribed in Section 262. The failure of a stockholder or beneficial owner to file such a petition
within the period specified in Section 262 could nullify such person’s previous written demand for appraisal.
Within
one hundred and twenty (120) days after the effective date of the Merger, any person who has complied with the requirements of Section
262 and who is entitled to appraisal rights thereunder will be entitled, upon written request, to receive from the Surviving Corporation
a statement setting forth the aggregate number of Shares not tendered into, and accepted for purchase in, the Offer and with respect
to which OSG has received demands for appraisal, and the aggregate number of stockholders or beneficial owners holding or owning such
Shares (provided that, where a beneficial owner makes a demand on his, her or its own behalf, the record holder of such Shares shall
not be considered a separate stockholder holding such Shares for purposes of such aggregate number). The Surviving Corporation must send
this statement to the requesting stockholder or beneficial owner within ten (10) days after receipt by the Surviving Corporation of the
written request for such a statement or within ten (10) days after the expiration of the period for delivery of demands for appraisal,
whichever is later.
If
a petition for an appraisal is duly filed by any person other than the Surviving Corporation and a copy thereof is served upon the Surviving
Corporation, the Surviving Corporation will then be obligated within twenty (20) days after such service to file with the Delaware Register
in Chancery in which the petition was filed a duly verified list (the “Verified List”) containing the names and addresses
of all persons who have demanded appraisal for their Shares and with whom agreements as to the value of their Shares have not been reached.
Upon the filing of any such petition, the Delaware Court of Chancery may order that notice of the time and place fixed for the hearing
on the petition be mailed to the Surviving Corporation and all of the persons shown on the Verified List at the addresses stated therein.
The form of the notice by mail and by publication shall be approved by the Delaware Court of Chancery, and the costs thereof shall be
borne by the Surviving Corporation.
After
notice to the persons shown on the Verified List as required by the Delaware Court of Chancery, such court is empowered to conduct a
hearing on the petition to determine those persons who have complied with Section 262 and who have become entitled to appraisal rights
thereunder. The Delaware Court of Chancery may require persons who have demanded an appraisal for their Shares and who hold Shares represented
by certificates (if any) to submit their stock certificates to the Delaware Register in Chancery for notation thereon of the pendency
of the appraisal proceedings and, if any person fails to comply with the direction, the Delaware Court of Chancery may dismiss the proceedings
as to such person. In addition, assuming the Class A Common Stock remained listed on a national securities exchange immediately prior
to the Effective Time, the Delaware Court of Chancery will dismiss appraisal proceedings as to all persons who have asserted appraisal
rights if neither of the ownership thresholds is met.
Determination
of “Fair Value”
After
the Delaware Court of Chancery determines which persons are entitled to appraisal and that at least one (1) of the ownership thresholds
described above has been satisfied, the appraisal proceeding will be conducted in accordance with the rules of the Delaware Court of
Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding, the Delaware Court of Chancery will
determine the “fair value” of the Shares, exclusive of any element of value arising from the accomplishment or expectation
of the Merger, together with interest, if any, to be paid upon the amount determined to be the “fair value.” In determining
“fair value,” the Delaware Court of Chancery will take into account all relevant factors. Unless the Delaware Court of Chancery
in its discretion determines otherwise for good cause shown, interest from the effective date of the Merger through the date of payment
of the judgment will be compounded quarterly and accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established
from time to time during the period between the effective date of the Merger and the date the judgment is paid. However, at any time
before the Delaware Court of Chancery enters judgment in the appraisal proceedings, the Surviving Corporation may pay to each person
entitled to appraisal an amount in cash, in which case such interest will accrue after the time of such payment only on the sum of (i)
the difference, if any, between the amount so paid by the Surviving Corporation and the “fair value” of the Shares as determined
by the Delaware Court of Chancery, and (ii) interest accrued prior to the time of such voluntary payment, unless paid at that time.
In
Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors that could be considered in determining “fair
value” in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered
acceptable in the financial community and otherwise admissible in court” should be considered, and that “fair price obviously
requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court stated that, in making
this determination of “fair value,” the court must consider market value, asset value, dividends, earnings prospects, the
nature of the enterprise and any other facts that could be ascertained as of the date of the Merger that throw any light on future prospects
of the merged corporation. Section 262 provides that “fair value” is to be “exclusive of any element of value arising
from the accomplishment or expectation of the Merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court
stated that such exclusion is a “narrow exclusion that does not encompass known elements of value,” but which rather applies
only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme
Court also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof
as of the date of the Merger and not the product of speculation, may be considered.”
Persons
considering seeking appraisal should be aware that the “fair value” of their Shares as so determined by the Delaware Court
of Chancery could be more than, the same as or less than the Merger Consideration they would receive pursuant to the Merger if they did
not seek appraisal of their Shares and that an opinion of an investment banking firm as to the fairness from a financial point of view
of the Merger Consideration is not an opinion as to, and may not in any manner address, “fair value” under Section 262. Although
OSG believes that the Merger Consideration is fair, no representation is made as to the outcome of the appraisal of “fair value”
as determined by the Delaware Court of Chancery, and persons seeking appraisal should recognize that such an appraisal could result in
a determination of a value higher or lower than, or the same as, the Merger Consideration. Neither OSG nor Parent anticipates offering
more than the Merger Consideration to any person exercising appraisal rights, and each of OSG and Parent reserves the rights to make
a voluntary cash payment pursuant to subsection (h) of Section 262 and to assert, in any appraisal proceeding, that for purposes of Section
262, the “fair value” of a Share is less than the Merger Consideration. If a demand for appraisal is duly withdrawn, if a
petition for appraisal is not timely filed, if neither of the ownership thresholds described above has been satisfied (assuming the Class
A Common Stock remains listed on a national securities exchange immediately prior to the Effective Time), or other requirements imposed
by Section 262 to perfect and seek appraisal are not satisfied, then the right to an appraisal will cease.
Upon
application by the Surviving Corporation or by any person entitled to participate in the appraisal proceeding, the Delaware Court of
Chancery may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the persons entitled to an appraisal.
Any person whose name appears on the Verified List may participate fully in all proceedings until it is finally determined that such
person is not entitled to appraisal rights under Section 262.
The
Delaware Court of Chancery will direct the payment of the fair value of the Shares, together with interest, if any, by the Surviving
Corporation to the persons entitled thereto. Payment will be made to each such person upon such terms and conditions as the Delaware
Court of Chancery may order. The Delaware Court of Chancery’s decree may be enforced as other decrees in the Delaware Court of
Chancery may be enforced.
The
costs of the appraisal proceedings (which do not include attorneys’ fees or the fees and expenses of experts) may be determined
by the Delaware Court of Chancery and charged upon the parties as the Delaware Court of Chancery deems equitable under the circumstances.
Upon application of a person whose name appears on the Verified List who participated in the proceeding and incurred expenses in connection
therewith, the Delaware Court of Chancery may also order that all or a portion of such expenses, including, without limitation, reasonable
attorneys’ fees and the fees and expenses of experts, be charged pro rata against the value of all the Shares entitled to appraisal
not dismissed pursuant to subsection (k) of Section 262 or subject to such an award pursuant to a reservation of jurisdiction under subsection
(k) of Section 262. In the absence of such determination or assessment, each party bears its own expenses.
If
any person who demands appraisal of his, her or its Shares under Section 262 fails to perfect, or effectively loses or withdraws, such
person’s right to appraisal, the person’s Shares will be deemed to have been converted, at the Effective Time into the right
to receive the Merger Consideration, without interest. A person will fail to perfect, or effectively lose, such person’s right
to appraisal if no petition for appraisal is filed within one hundred and twenty (120) days after the effective date of the Merger, if
neither of the ownership thresholds described above has been satisfied (assuming the Class A Common Stock remains listed on a national
securities exchange immediately prior to the Effective Time) or if the person delivers to the Surviving Corporation a written withdrawal
of the person’s demand for appraisal in accordance with Section 262.
From
and after the Effective Time, no person who has demanded appraisal rights with respect to some or all of such person’s Shares in
compliance with Section 262 will be entitled to tender such Shares or to receive payment of dividends or other distributions on such
Shares, except dividends or other distributions payable to stockholders as of a record date which is prior to the Effective Time. If
a person who has made a demand for appraisal delivers to the Surviving Corporation a written withdrawal of the demand for an appraisal
in respect of some or all of such person’s Shares within sixty (60) days after the effective date of the Merger, then the right
of such person to an appraisal of the Shares subject to the withdrawal will cease. Once a petition for appraisal is filed with the Delaware
Court of Chancery, however, the appraisal proceeding may not be dismissed as to any person without the approval of the Delaware Court
of Chancery, and such approval may be conditioned upon such terms as such court deems just, including without limitation a reservation
of jurisdiction for any application to the Delaware Court of Chancery made under subsection (j) of Section 262; provided, however, that
the foregoing shall not affect the right of any person who has not commenced an appraisal proceeding or joined that proceeding as a named
party to withdraw such person’s demand for appraisal and to accept the terms offered upon the Merger within sixty (60) days after
the effective date of the Merger.
Failure
to comply with all of the procedures set forth in Section 262 may result in the loss of a record holder’s or beneficial owner’s
statutory appraisal rights. In that event, if you have not tendered your Shares (or, if tendered, you have validly and subsequently withdrawn
such Shares prior to the time Purchaser accepts properly tendered Shares for purchase), you will be entitled to receive the Merger Consideration
for your dissenting Shares in accordance with the Merger, without interest, less any applicable withholding taxes. Consequently, any
stockholder or beneficial owner wishing to exercise appraisal rights is encouraged to consult legal counsel before attempting to exercise
those rights.
STOCKHOLDERS
OR BENEFICIAL OWNERS WHO SELL SHARES IN THE OFFER AND DO NOT WITHDRAW THEIR TENDERED SHARES PRIOR TO THE ACCEPTANCE TIME WILL NOT BE
ENTITLED TO EXERCISE APPRAISAL RIGHTS WITH RESPECT THERETO BUT, RATHER, WILL RECEIVE THE OFFER PRICE.
Anti-Takeover
Statute
The
Company is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prohibits a publicly held Delaware
corporation from engaging in a business combination, such as a merger, with a person or group owning 15% or more of the corporations’
voting stock for a period of three years following the date the person became an interested stockholder, unless (with certain exceptions)
the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner.
However, the Company has expressly opted out of Section 203 of the DGCL in the Charter and therefore the provisions of Section 203 of
the DGCL are inapplicable to the Company.
The
Company conducts business in a number of states throughout the United States, some of which have enacted takeover laws. The Company is
not aware of any other state takeover laws or regulations that are applicable to the Offer or the Merger and has not attempted to comply
with any state takeover laws or regulations. If any government official or third party should seek to apply any such state takeover law
to the Transactions, the Company Board will grant such approvals and take such actions as are necessary so that the Transactions may
be consummated as promptly as practicable on the terms contemplated by the Merger Agreement. In the event it is asserted that one or
more state takeover statutes is applicable to the Offer or the Merger and an appropriate court does not determine that it is inapplicable
or invalid as applied to the Offer or the Merger, Purchaser might be required to file certain information with, or to receive approvals
from, the relevant state authorities or holders of Shares, and Purchaser might be unable to accept for payment or pay for Shares tendered
pursuant to the Offer, or be delayed in continuing or consummating the Offer or the Merger.
Annual
and Quarterly Reports
For
additional information regarding the business and the financial results of OSG, please see the Company’s Annual Report on Form
10-K for the year ended December 31, 2023, which has been filed with the SEC on March 11, 2024, as amended by a filing with the SEC on
March 25, 2024, and the Company’s subsequent Quarterly Report on Form 10-Q, which has been filed with the SEC on May 10, 2024.
Legal
Proceedings
As
of the date of filing this Schedule 14D-9, there is no pending litigation that OSG is aware of challenging the Offer, the Merger or the
other Transactions.
Regulatory
Approvals
Under
the HSR Act and the rules promulgated thereunder, certain acquisition transactions may not be consummated unless certain information
has been furnished to the Antitrust Division of the Department of Justice (the “Antitrust Division”) and the Federal
Trade Commission (“FTC”) in Notification and Report Forms filed by the acquiring and acquired persons, and certain
waiting period requirements have been satisfied. The purchase of Shares pursuant to the Offer is subject to such requirements. Under
the HSR Act and the rules and regulations promulgated thereunder by the FTC, the waiting period for the acquisition of Shares by Purchaser
pursuant to the Offer is fifteen (15) days from the date of filing by the acquiring person. Parent and OSG plan to submit their respective
HSR filings on June 10, 2024, in which case the waiting period would expire at 11:59 p.m. Eastern Time on June 25, 2024. However, this
period may be extended if the acquiring person voluntarily withdraws and refiles to allow a second fifteen (15)-day waiting period, or
if the reviewing agency issues a formal request for additional information and documentary material, in which case the waiting period
expires ten (10) days after the date when the acquiring person has certified its substantial compliance with such request. The Antitrust
Division and the FTC assess the legality under the antitrust laws of transactions such as the acquisition of Shares by Purchaser pursuant
to the Offer. At any time before or after the consummation of any such transactions, the Antitrust Division or the FTC could take such
action under the antitrust laws of the United States as it deems necessary or desirable in the public interest, including seeking to
enjoin the purchase of Shares pursuant to the Offer or seeking divestiture of Shares so acquired or divestiture of substantial assets
of Parent or OSG. Private parties and individual states of the United States may also bring legal actions under the antitrust laws of
the United States or state antitrust laws. Parent and OSG do not believe that the consummation of the Offer will result in a violation
of any applicable antitrust laws. However, there can be no assurance that a challenge to the Offer on antitrust grounds will not be made
or, if such a challenge is made, what the result would be.
Parent
and OSG are not currently aware of any other material governmental consents, approvals or filings that are required prior to the parties’
completion of the Offer or the Merger.
Stockholder
Approval of the Merger Not Required
Because
the Merger will be consummated in accordance with Section 251(h) of the DGCL, no stockholder vote or consent will be necessary to effect
the Merger. Section 251(h) provides that, subject to certain statutory provisions, if immediately following consummation of a tender
offer for any and all shares of the stock of a public corporation (other than stock for which appraisal rights have been validly perfected
or stock owned by the acquiror, the target corporation or any of their respective wholly owned subsidiaries or rollover stock (as defined
in Section 251(h))), the acquiror holds at least the percentage of stock, and of each class or series thereof, of the target corporation
that, absent Section 251(h), would be required to adopt a merger agreement, and the holders of stock that was the subject of the tender
offer but not tendered into the tender offer is converted into the same consideration for their stock in the merger as was payable in
the tender offer, the acquiror can effect a merger without the vote of the stockholders of the target corporation. The parties have agreed
that, subject to the conditions specified in the Merger Agreement, the Merger will become effective as soon as practicable after the
consummation of the Offer, without a vote of OSG’s stockholders, in accordance with Section 251(h).
Forward-Looking
Statements
Statements
contained in this Schedule 14D-9 regarding matters that are not historical facts are “forward-looking statements”. Words
such as “believes,” “estimates,” “expects,” “focused,” “continuing to,” “seeking,”
“will” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances)
are intended to identify forward-looking statements. These statements include those related to: the ability of the Company and Saltchuk
to complete the transactions contemplated by the Merger Agreement, including the parties’ ability to satisfy the conditions to
the consummation of the tender offer contemplated thereby and the other conditions set forth in the Merger Agreement, statements about
the expected timetable for completing the transactions. Because such statements deal with future events and are based on the Company
and Saltchuk’s current expectations, they are subject to various risks and uncertainties and actual results could differ materially
from those described in or implied by the statements in this communication. These forward-looking statements are subject to risks and
uncertainties, including, without limitation, risks and uncertainties associated with: the timing of the tender offer and the subsequent
merger; uncertainties as to how many shares of the Company will be tendered into the tender offer; the risk that competing offers or
acquisition proposals will be made; the possibility that various conditions to the consummation of the tender offer and the subsequent
merger may not be satisfied or waived; the occurrence of any event, change or other circumstance that could give rise to the termination
of the Merger Agreement and other risks and uncertainties affecting the Company, including those discussed in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 11, 2024, as amended by a filing with the SEC on
March 25, 2024, subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings and reports that the Company
makes from time to time with the SEC. Except as may be required by law, neither the Company nor Saltchuk assumes any obligation to update
these forward-looking statements, which speak only as of the date they are made, or to update the reasons if actual results differ materially
from those anticipated in the forward-looking statements.
The
Company’s stockholders and other investors can obtain the Schedule TO, this Schedule 14D-9 and other filed documents for free at
the SEC’s website at www.sec.gov. Copies of the documents filed with the SEC by the Company and Saltchuk will be available free
of charge under “SEC Filings” on the Investors page of the Company’s website, www.osg.com. In addition, the Company’s
stockholders may obtain free copies of the tender offer materials by contacting the information agent for the tender offer, Georgeson
LLC, as named
in the Offer to Purchase included in the Schedule TO.
The
information set forth in the Offer to Purchase under the heading “Summary Term Sheet,” in Section
1 under the heading “The Tender Offer—Terms of the Offer ,” in Section 5 under
the heading “The Tender Offer —Certain U.S. Federal Income Tax Consequences of the Offer and the Merger ,”
in Section 8 under the heading “The Tender Offer—Certain Information Concerning Parent and Purchaser ,”
in Section 9 under the heading “The Tender Offer—Source and Amount of Funds,” in Section 10 under
the heading “The Tender Offer— Background of the Offer; Contacts with OSG ,” in Section
11 under the heading “The Tender Offer—Summary of the Merger Agreement and Certain Other Agreements ,”
in Section 12 under the heading “The Tender Offer —Purpose of the Offer and Plans for OSG ,”
in Section 13 under the heading “The Tender Offer—Certain Effects of the Offer,” in Section 14 under
the heading “The Tender Offer—Dividends and Distributions ,” in Section 16
under the heading “The Tender Offer—Certain Legal Matters; Regulatory Approvals; Appraisal Rights ,”
in Section 17 under the heading “The Tender Offer—Fees and Expenses ” and
in Section 18 under the heading “The Tender Offer— Miscellaneous ” are
incorporated herein by reference.
ITEM
9. EXHIBITS
The following Exhibits are filed with this Schedule 14D-9:
Exhibit
No. |
|
Description |
| (a)(1)(i) |
|
Offer to Purchase, dated June 10, 2024. |
| (a)(1)(ii) |
|
Form of Letter of Transmittal. |
| (a)(1)(iii) |
|
Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees. |
| (a)(1)(iv) |
|
Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees. |
| (a)(1)(v) |
|
Summary Advertisement as published on June 10, 2024 in The New York Times. |
| (a)(5)(i) |
|
Opinion of Evercore Group L.L.C. to the Company Board, dated May 19, 2024. |
| (a)(5)(ii) |
|
Press Release issued by OSG on May 20, 2024 (incorporated herein by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by OSG with the SEC on May 20, 2024). |
| (e)(1) |
|
Agreement and Plan of Merger, dated May 19, 2024, among OSG, Parent and Purchaser (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by OSG with the SEC on May 20, 2024). |
| (e)(2) |
|
Non-Disclosure Agreement, dated February 27, 2024, between OSG and Parent. |
| (e)(3)(i) |
|
Good Reason Waiver Letter dated as May 19, 2024 between the Company, Parent, and Samuel H. Norton. |
| (e)(3)(ii) |
|
Good Reason Waiver Letter dated as May 19, 2024 between the Company, Parent, and Patrick J. O’Halloran. |
| (e)(3)(iii) |
|
Good Reason Waiver Letter dated as May 19, 2024 between the Company, Parent, and Damon M. Mote. |
| (e)(3)(iv) |
|
Good Reason Waiver Letter dated as May 19, 2024 between the Company, Parent, and Susan M. Allan. |
| (e)(3)(v) |
|
Transaction Bonus Letter dated as May 19, 2024 between the Company and Richard L. Trueblood. |
| (e)(4) |
|
Employment Agreement dated as of December 15, 2018 between the Company and Samuel H. Norton (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 15, 2018). |
| (e)(5) |
|
Employment Agreement dated as of November 30, 2017 between the Company and Susan Allan (incorporated herein by reference to Exhibit 10.59 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017). |
| (e)(6) |
|
Employment Agreement dated as of November 30, 2017 between the Company and Damon Mote (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated December 4, 2017). |
| (e)(7) |
|
Employment Agreement dated as of November 30, 2017 between the Company and Richard Trueblood (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 4, 2017). |
| (e)(8) |
|
Employment Agreement dated as of November 30, 2017 between the Company and Patrick O’Halloran (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated December 4, 2017). |
| (e)(9) |
|
Amended and Restated Certificate of Incorporation of Overseas Shipholding Group, Inc. dated as of July 11, 2023 (incorporated herein by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, dated August 9, 2016). |
| (e)(10) |
|
Amended and Restated Bylaws of Overseas Shipholding Group, Inc. dated as of August 5, 2014 (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, dated August 8, 2014). |
| (e)(11) |
|
Form of Director Indemnity Agreement for the Directors of the Company (incorporated herein by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-1, filed on August 20, 2014). |
| (e)(12) |
|
Form of Officers Indemnity Agreement for the Officers of the Company (incorporated herein by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014). |
SIGNATURE
After
due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete
and correct.
| Date:
June 10, 2024 |
|
|
| |
Overseas Shipholding Group, Inc. |
| |
|
|
| |
By:
|
/s/ Susan
Allan
|
| |
Name: |
Susan Allan |
| |
Title: |
Vice President, General Counsel and Corporate Secretary |
ANNEX
A
OPINION
OF EVERCORE GROUP L.L.C.
May
19, 2024
The
Board of Directors
Overseas
Shipholding Group, Inc.
302
Knights Run Avenue, Suite 1200
Tampa,
Florida 33602
Members
of the Board of Directors:
We
understand that Overseas Shipholding Group, Inc., a Delaware corporation (the “Company”), proposes to enter into an
Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), with Saltchuk Resources, Inc.,
a Washington corporation (“Parent”), and Seahawk MergeCo., Inc., a Delaware corporation and a wholly owned subsidiary
of Parent (“Merger Sub”). Pursuant to the Merger Agreement, (i) Parent will cause Merger Sub to commence a cash tender
offer (the “Offer”) to acquire all of the issued and outstanding shares of Class A common stock, $0.01 par value per
share, of the Company (the “Class A Common Stock”; each such share of Class A Common Stock, a “Share”)
for $8.50 per Share, net to the holder of such Share in cash (the “Offer Price”), and (ii) following the consummation
of the Offer, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger
as a wholly owned subsidiary of Parent, and each Share issued and outstanding immediately prior to the effective time of the Merger (other
than (i) Shares held by the Company in treasury or by Parent or Merger Sub (including Shares irrevocably accepted for purchase by Merger
Sub in the Offer) or any other wholly owned subsidiary of Parent or (ii) Shares held by a holder who has properly demanded appraisal
rights with respect thereto under applicable Delaware law) will at the effective time of the Merger be automatically be cancelled and
converted into the right to receive an amount in cash equal to the Offer Price (the “Merger Consideration”) (clause
(i) and clause (ii), collectively, the “Transaction”). The terms and conditions of the Transaction are more fully
set forth in the Merger Agreement.
The
Board of Directors has asked us whether, in our opinion, the Offer Price and the Merger Consideration to be received by holders of Class
A Common Stock in the Transaction is fair, from a financial point of view, to such holders, other than Parent and its affiliates.
In
connection with rendering our opinion, we have, among other things:
| |
(i) |
reviewed
certain publicly available business and financial information relating to the Company that we deemed to be relevant; |
| |
|
|
| |
(ii) |
reviewed
certain internal projected financial data relating to the Company prepared and furnished to us by management of the Company, as subjected
to certain sensitivity analyses conducted by us at the direction of management of the Company and, on such basis, as approved for
our use by the Company (the “Forecasts”); |
| |
|
|
| |
(iii) |
discussed
with management of the Company their assessment of the past and current operations of the Company, the current financial condition
and prospects of the Company, and the Forecasts (including their views on the risks and uncertainties of achieving the Forecasts); |
| |
|
|
| |
(iv) |
reviewed
the reported prices and the historical trading activity of the Class A Common Stock; |
The
Board of Directors
Overseas
Shipholding Group, Inc.
Page
2
| |
(v) |
compared
the financial performance of the Company and its stock market trading multiples with those of certain other publicly traded companies
that we deemed relevant; |
| |
|
|
| |
(vi) |
compared
the financial performance of the Company and the valuation multiples relating to the Transaction with the financial terms, to the
extent publicly available, of certain other transactions that we deemed relevant; |
| |
|
|
| |
(vii) |
reviewed
the financial terms and conditions of the Merger Agreement; and |
| |
|
|
| |
(viii) |
performed
such other analyses and examinations and considered such other factors that we deemed appropriate. |
For
purposes of our analysis and opinion, we have assumed and relied upon the accuracy and completeness of the financial and other information
publicly available, and all of the information supplied or otherwise made available to, discussed with, or reviewed by us, without any
independent verification of such information (and have not assumed responsibility or liability for any independent verification of such
information), and have further relied upon the assurances of the management of the Company that they are not aware of any facts or circumstances
that would make such information inaccurate or misleading. With respect to the Forecasts, we have assumed with your consent that they
have been reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of the
Company as to the future financial performance of the Company. We express no view as to the Forecasts or the assumptions on which they
are based.
For
purposes of our analysis and opinion, we have assumed, in all respects material to our analysis, that the representations and warranties
of each party contained in the Merger Agreement are true and correct, that each party will perform all of the covenants and agreements
required to be performed by it under the Merger Agreement and that all conditions to the consummation of the Transaction will be satisfied
without waiver or modification thereof. We have further assumed, in all respects material to our analysis, that all governmental, regulatory
or other consents, approvals or releases necessary for the consummation of the Transaction will be obtained without any delay, limitation,
restriction or condition that would have an adverse effect on the Company or the consummation of the Transaction or reduce the contemplated
benefits to the holders of Class A Common Stock of the Transaction.
We
have not conducted a physical inspection of the properties or facilities of the Company and have not made or assumed any responsibility
for making any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or other off-balance
sheet assets and liabilities) of the Company, nor have we been furnished with any such valuations or appraisals, nor have we evaluated
the solvency or fair value of the Company under any state or federal laws relating to bankruptcy, insolvency or similar matters. Our
opinion is necessarily based upon information made available to us as of the date hereof and financial, economic, market and other conditions
as they exist and as can be evaluated on the date hereof. It is understood that subsequent developments may affect this opinion and that
we do not have any obligation to update, revise or reaffirm this opinion.
The
Board of Directors
Overseas
Shipholding Group, Inc.
Page
3
We
have not been asked to pass upon, and express no opinion with respect to, any matter other than the fairness to the holders of Class
A Common Stock, other than Parent and its affiliates, from a financial point of view, of the Offer Price and the Merger Consideration.
We do not express any view on, and our opinion does not address, the fairness of the proposed transaction to, or any consideration received
in connection therewith by, the holders of any other class of securities, creditors or other constituencies of the Company, nor as to
the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of the
Company, or any class of such persons, whether relative to the Offer Price, the Merger Consideration or otherwise. We have not been asked
to, nor do we express any view on, and our opinion does not address, any other term or aspect of the Merger Agreement or the Transaction,
including, without limitation, the structure or form of the Transaction, or any term or aspect of any other agreement or instrument contemplated
by the Merger Agreement or entered into or amended in connection with the Merger Agreement. Our opinion does not address the relative
merits of the Transaction as compared to other business or financial strategies that might be available to the Company, nor does it address
the underlying business decision of the Company to engage in the Transaction. Our opinion does not constitute a recommendation to the
Board of Directors or to any other persons in respect of the Transaction, including as to whether any person should tender shares of
Class A Common Stock in the Offer or take any other action in respect of the Transaction. We are not legal, regulatory, accounting or
tax experts and have assumed the accuracy and completeness of assessments by the Company and its advisors with respect to legal, regulatory,
accounting and tax matters.
We
have acted as financial advisor to the Company in connection with the Transaction and have received retainer fees for our services and
will receive additional fees, a portion of which is payable upon rendering this opinion and a substantial portion of which is contingent
upon the consummation of the Transaction. The Company has also agreed to reimburse our expenses and to indemnify us against certain liabilities
arising out of our engagement. During the two year period prior to the date hereof, Evercore Group L.L.C. and its affiliates have provided
financial advisory services to the Company and received fees for the rendering of these services. In addition, during the two year period
prior to the date hereof, Evercore Group L.L.C. and its affiliates have not been engaged to provide financial advisory or other services
to Parent or its affiliates, and we have not received any compensation from Parent or its affiliates during such period. We may provide
financial advisory or other services to the Company and Parent in the future, and in connection with any such services we may receive
compensation.
Evercore
Group L.L.C. and its affiliates engage in a wide range of activities for our and their own accounts and the accounts of customers, including
corporate finance, mergers and acquisitions, equity sales, trading and research, private equity, placement agent, asset management and
related activities. In connection with these businesses or otherwise, Evercore Group L.L.C. and its affiliates and/or our or their respective
employees, as well as investment funds in which any of them may have a financial interest, may at any time, directly or indirectly, hold
long or short positions and may trade or otherwise effect transactions for their own accounts or the accounts of customers, in debt or
equity securities, senior loans and/or derivative products or other financial instruments of or relating to the Company, Parent, potential
parties to the Transaction and/or any of their respective affiliates or persons that are competitors, customers or suppliers of the Company
or Parent.
Our
financial advisory services and this opinion are provided for the information and benefit of the Board of Directors (in its capacity
as such) in connection with its evaluation of the proposed Transaction. The issuance of this opinion has been approved by an Opinion
Committee of Evercore Group L.L.C.
This
opinion may not be disclosed, quoted, referred to or communicated (in whole or in part) to any third party for any purpose whatsoever
except with our prior written approval, except the Company may reproduce this opinion in full in any document that is required to be
filed with the U.S. Securities and Exchange Commission and required to be mailed by the Company to its stockholders relating to the Transaction.
The
Board of Directors
Overseas
Shipholding Group, Inc.
Page
4
Based
upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Offer Price and the Merger Consideration to be
received by holders of Class A Common Stock in the Transaction is fair, from a financial point of view, to such holders, other than Parent
and its affiliates.
| |
Very
truly yours, |
| |
|
| |
EVERCORE
GROUP L.L.C. |
| |
|
| |
By: |
/s/
Mark Friedman |
Exhibit
(a)(1)(i)
Offer
to Purchase
All
Outstanding Shares of Class A Common Stock of
OVERSEAS
SHIPHOLDING GROUP, INC. (NYSE: OSG)
at
An
Offer Price of $8.50 per Share in Cash
by
SEAHAWK
MERGECO., INC.,
a
wholly owned subsidiary of
SALTCHUK
RESOURCES, INC.
THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE ONE MINUTE AFTER
11:59 P.M. EASTERN TIME ON JULY 9, 2024 (THE “EXPIRATION DATE”),
UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
Seahawk
MergeCo., Inc., a Delaware corporation (“Purchaser”) and a wholly owned subsidiary of Saltchuk Resources, Inc., a
Washington corporation (“Parent”), is offering to purchase (the “Offer”) all of the issued and
outstanding shares of Class A common stock, par value $0.01 per share (the “Shares”), of Overseas Shipholding Group,
Inc., a Delaware corporation (NYSE:OSG) (“OSG”), other than the Shares owned by Parent, Purchaser or any of their
respective affiliates, for $8.50 per Share in cash (the “Offer Price”), upon the terms and subject to the conditions
described in this Offer to Purchase (together with any amendments or supplements hereto, this “Offer to Purchase”)
and in the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal”).
Subject to the terms of the Agreement and Plan of Merger, dated as of May 19, 2024, by and among OSG, Parent and Purchaser (together
with any amendments or supplements thereto, the “Merger Agreement”), the Offer Price will be paid subject to any applicable
tax withholding and without interest.
The
Offer is being made pursuant to the Merger Agreement, pursuant to which, after the completion of the Offer and the satisfaction or, to
the extent permitted, waiver of certain conditions, Purchaser will be merged with and into OSG, without a meeting, vote or any further
action of OSG’s stockholders (the “OSG Stockholders”) in accordance with Section 251(h) of the General Corporation
Law of the State of Delaware (the “DGCL”), and OSG will be the surviving corporation and a wholly owned subsidiary
of Parent (such corporation, the “Surviving Corporation”, such merger, the “Merger” and the Merger,
together with the Offer and the other transactions contemplated by the Merger Agreement, the “Transactions”). The
date and time at which the Merger becomes effective is referred to in this Offer to Purchase as the “Effective Time.”
Upon the terms and subject to the conditions of the Offer and the Merger Agreement, including the satisfaction or, to the extent permitted,
waiver of the conditions of the Offer, Purchaser will (and Parent will cause Purchaser to), (i) promptly, and in no event later than
9:00 a.m. Eastern Time one (1) business day after the Expiration Date, irrevocably accept for payment all Shares validly tendered (and
not validly withdrawn) pursuant to the Offer (the time of such acceptance, the “Offer Acceptance Time”) and (ii) as
promptly as practicable after the Offer Acceptance Time (and in any event within two (2) business days thereafter), pay for such Shares.
The
Offer and withdrawal rights will expire at one minute past 11:59 p.m. Eastern Time on July 9, 2024, unless extended in accordance with
the terms of the Merger Agreement and the applicable rules and regulations of the Securities and Exchange Commission, in which event
the term “Expiration Date” will mean the date to which the Expiration Date is so extended.
Pursuant
to the Merger Agreement, at the Effective Time, by virtue of the Merger and without any action on the part of the holders of Shares,
each outstanding Share (other than (a) any Shares held by OSG in treasury, (b) any Shares held by Parent, Purchaser or any other wholly
owned subsidiary of Parent, (c) any Shares irrevocably accepted for purchase by Purchaser in the Offer and (d) any Shares owned by any
of the OSG Stockholders who are entitled to, and who properly demand, appraisal rights under Section 262 of the DGCL and have not validly
revoked such demand) will be cancelled and converted automatically into the right to receive an amount in cash equal to the Offer Price,
without interest thereon and subject to any applicable withholding taxes (the “Merger Consideration”).
Pursuant
to the Merger Agreement, as of immediately prior to the Offer Acceptance Time, each option (the “Company Stock Options”)
to purchase Shares will become fully vested (to the extent unvested) and (i) each Company Stock Option that has an exercise price per
Share that is less than the Offer Price (each, an “In-the-Money Option”) that is then outstanding will be cancelled
and, in exchange therefor, the holder of such cancelled In-the-Money Option will be entitled to receive, in consideration of the cancellation
of such In-the-Money Option, an amount in cash, without any interest thereon and subject to applicable tax withholding, equal to the
product of (x) the excess of the Offer Price over the applicable exercise price per Share of such In-the-Money Option and (y) the total
number of Shares underlying such In-the-Money Option as of immediately prior to the Offer Acceptance Time, and (ii) each Company Stock
Option that is not an In-the-Money Option will be cancelled for no consideration.
Pursuant
to the Merger Agreement, as of immediately prior to the Offer Acceptance Time, each restricted stock unit award of OSG (the “Company
RSU Award”), or portion thereof, that is not subject to one or more performance goals as of immediately prior to the Offer
Acceptance Time and that is then outstanding will be cancelled and the holder of each such cancelled Company RSU Award will be entitled
to receive an amount in cash, without any interest thereon and subject to applicable tax withholding, equal to the sum of (i) the product
of (x) the Offer Price and (y) the total number of Shares subject to such Company RSU Award or portion thereof, as applicable, plus (ii)
an amount equal to any dividend equivalent rights then accrued with respect to such Company RSU Award or portion thereof, as applicable,
plus (iii) any then-unpaid “cash award” granted in connection with OSG’s retention program in 2022, as set forth in
the applicable Company RSU Award grant agreement, as applicable.
Pursuant
to the Merger Agreement, as of immediately prior to the Offer Acceptance Time, each Company RSU Award, or portion thereof, that is (x)
subject to one or more performance goals as of immediately prior to the Offer Acceptance Time and (y) for which the performance period
is originally scheduled to end in fiscal year 2024 and that is then outstanding will be cancelled and the holder of each such cancelled
Company RSU Award will be entitled to receive an amount in cash, without any interest thereon and subject to applicable tax withholding,
equal to the sum of (i) the product of (x) the Offer Price and (y) the total number of Shares subject to such Company RSU Award or portion
thereof, as applicable, plus (ii) an amount equal to any dividend equivalent rights then accrued with respect to such Company RSU Award
or portion thereof, as applicable. The number of Shares subject to a Company RSU Award or portion thereof (and any related dividend equivalent
rights), as applicable, shall be determined based on the actual achievement of such performance goal(s), measured through the Offer Acceptance
Time, up to a maximum of 150% of the target level. OSG shall pay the holder of each such Company RSU Award the amount described in this
paragraph through OSG’s payroll system no later than the second payroll date after the Effective Time.
Pursuant
to the Merger Agreement, as of immediately prior to the Offer Acceptance Time, each Company RSU Award, or portion thereof, that is (x)
subject to one or more performance goals as of immediately prior to the Offer Acceptance Time and (y) for which the performance period
is originally scheduled to end in fiscal year 2025 or fiscal year 2026 and that is then outstanding will be cancelled and converted into
a new award granting the holder thereof the right to receive an amount in cash, without any interest thereon and subject to applicable
tax withholding, equal to the sum of (i) the product of (x) the Offer Price and (y) the total number of Shares subject to such Company
RSU Award or portion thereof, as applicable, assuming target level achievement, plus (ii) an amount equal to any dividend equivalent
rights then accrued with respect to such Company RSU Award or portion thereof, as applicable (each, a “Cash Award”).
Each such Cash Award shall no longer be subject to the performance goal(s) in effect immediately prior to the Offer Acceptance Time,
but shall otherwise remain subject to the same terms, conditions, restrictions and vesting arrangements that were applicable to the corresponding
Company RSU Award immediately prior to the Offer Acceptance Time. Each Cash Award may be increased, but not decreased, by up to 50% based
on performance goal(s) to be mutually determined by Parent and OSG management as soon as possible following the Effective Time. To the
extent vested, OSG shall make such payments in respect of each Cash Award no later than the end of the second completed payroll cycle
following the date on which the applicable Company RSU Award would have become vested under the vesting schedule in place for such award
as of immediately prior to the Offer Acceptance Time (and in no event later than two and one-half months following the end of the calendar
year in which the applicable Company RSU Award would have become vested), or on the applicable holder’s earlier termination of
employment that would have triggered an accelerated vesting and payment of the Company RSU Award per the terms of such Company RSU Award,
any employment agreement with such holder or any other OSG benefit plan in effect as of the Offer Acceptance Time.
Pursuant
to the Merger Agreement, in accordance with the terms of the Warrant Agreement, dated as of August 5, 2014, by and among OSG, Computershare
Inc. and Computershare Trust Company, N.A. (the “Warrant Agreement”), any warrant to purchase Shares (each, a “Company
Warrant”) surrendered at any time from or after the Offer Acceptance Time that has an exercise price per Share that is less
than the Offer Price shall entitle the holder thereof to receive, upon the surrender of such Company Warrant in accordance with its terms,
an amount in cash equal to the product of (x) the excess of the Offer Price over the applicable exercise price per Share of such Company
Warrant and (y) the total number of Shares subject to such Company Warrant.
If
any former holder of shares of Class B common stock, par value $0.01 per share, of OSG desires to exchange certificates for shares of
such Class B common stock for Shares in order to tender such Shares in the Offer or to exchange such certificates for Merger Consideration
following the Offer Acceptance Time, they should contact Computershare Transfer Agency, OSG’s transfer agent, or their broker,
dealer, commercial bank, trust company or other nominee for assistance.
After
careful consideration, the members of OSG’s board of directors (the “OSG Board”) have unanimously: (i) determined
that the terms of the Merger Agreement and all agreements and documents related thereto and contemplated thereby were fair to and in
the best interest of OSG and OSG’s Stockholders; (ii) declared that the Merger Agreement and the Transactions, including the
Offer and the Merger, are advisable; (iii) approved and adopted the Merger Agreement and the Transactions, including the Merger and the
Offer, in accordance with the DGCL; (iv) directed that the Merger be effected and governed by Section 251(h) of the DGCL and that the
Merger be consummated as soon as practicable following the Offer Acceptance Time; (v) recommended that the OSG Stockholders accept the
Offer and tender their Shares to Purchaser pursuant to the Offer; and (vi) authorized and approved the execution, delivery and performance
by OSG of the Merger Agreement and the consummation of the Transactions.
The
Offer is subject to various conditions including, among others, the Minimum Condition. See “The Tender Offer—Section 15.
Conditions of the Offer.” A summary of the principal terms of the Offer appears on pages 1 through 9 of this Offer to Purchase.
You should read this entire document carefully before deciding whether to tender your Shares.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Transactions, passed upon
the merits or fairness of the Transactions or passed upon the adequacy or accuracy of the information contained in this document. Any
representation to the contrary is a criminal offense.
June
10, 2024
IMPORTANT
If
you desire to tender all or any portion of your Shares to us pursuant to the Offer, you should either: (i) if you hold your Shares directly
as the registered owner, complete and sign the Letter of Transmittal for the Offer, which is enclosed with this Offer to Purchase, in
accordance with the instructions contained in the Letter of Transmittal, mail or deliver the Letter of Transmittal and any other required
documents to Computershare Inc. and Computershare Trust Company, N.A., the joint depositary and paying agent for the Offer (the “Depositary
and Paying Agent”), and either deliver the certificates for your Shares to the Depositary and Paying Agent along with the Letter
of Transmittal or tender your Shares by book-entry transfer by following the procedures described in “The Tender Offer—Section
3. Procedures for Tendering Shares” of this Offer to Purchase prior to the expiration of the Offer; or (ii) if you hold
your Shares in “street name,” request that your broker, dealer, commercial bank, trust company or other nominee effect the
transaction for you. If you hold Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee
you must contact that institution in order to tender your Shares to us pursuant to the Offer.
*
* *
Questions
and requests for assistance may be directed to Georgeson LLC (the “Information Agent”) at its address and telephone
number set forth on the back cover of this Offer to Purchase. Requests for additional copies of this Offer to Purchase, the Letter of
Transmittal and other tender offer materials may be directed to the Information Agent. You may also contact your broker, dealer, commercial
bank, trust company or other nominee for assistance.
This
Offer to Purchase and the Letter of Transmittal contain important information, and you should read both carefully and in their entirety
before making any decision with respect to the Offer.
TABLE
OF CONTENTS
| |
|
|
Page |
| |
|
|
|
| IMPORTANT |
iv |
| |
|
|
|
| SUMMARY TERM SHEET |
1 |
| |
|
|
|
| INTRODUCTION |
10 |
| |
|
|
|
| THE TENDER OFFER |
13 |
| |
|
|
|
| |
1. |
TERMS
OF THE OFFER. |
13 |
| |
|
|
|
| |
2. |
ACCEPTANCE
FOR PAYMENT AND PAYMENT FOR SHARES. |
14 |
| |
|
|
|
| |
3. |
PROCEDURES
FOR TENDERING SHARES. |
15 |
| |
|
|
|
| |
4. |
WITHDRAWAL
RIGHTS. |
17 |
| |
|
|
|
| |
5. |
CERTAIN
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER AND THE MERGER. |
18 |
| |
|
|
|
| |
6. |
PRICE
RANGE OF SHARES. |
21 |
| |
|
|
|
| |
7. |
CERTAIN
INFORMATION CONCERNING OSG. |
21 |
| |
|
|
|
| |
8. |
CERTAIN
INFORMATION CONCERNING PARENT AND PURCHASER. |
22 |
| |
|
|
|
| |
9. |
SOURCE
AND AMOUNT OF FUNDS. |
23 |
| |
|
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|
| |
10. |
BACKGROUND
OF THE OFFER; CONTACTS WITH OSG. |
24 |
| |
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| |
11. |
SUMMARY
OF THE MERGER AGREEMENT AND CERTAIN OTHER AGREEMENTS. |
27 |
| |
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| |
12. |
PURPOSE
OF THE OFFER AND PLANS FOR OSG. |
47 |
| |
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|
| |
13. |
CERTAIN
EFFECTS OF THE OFFER. |
48 |
| |
|
|
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| |
14. |
DIVIDENDS
AND DISTRIBUTIONS. |
49 |
| |
|
|
|
| |
15. |
CONDITIONS
OF THE OFFER. |
49 |
| |
|
|
|
| |
16. |
CERTAIN
LEGAL MATTERS; REGULATORY APPROVALS; APPRAISAL RIGHTS. |
50 |
| |
|
|
|
| |
17. |
FEES
AND EXPENSES. |
54 |
| |
|
|
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| |
18. |
MISCELLANEOUS. |
54 |
SUMMARY
TERM SHEET
This
Summary Term Sheet highlights selected information from this Offer to Purchase, and may not contain all of the information that is important
to you and is qualified in its entirety by the more detailed descriptions and explanations contained in the Merger Agreement, this Offer
to Purchase, the related Letter of Transmittal and other materials related to the Offer. You are urged to read this Offer to Purchase,
the related Letter of Transmittal and other materials related to the Offer carefully and in their entirety. Additionally, below are some
questions that you, as a stockholder of OSG, may have, and answers to those questions. Questions or requests for assistance may be directed
to Georgeson LLC (the “Information Agent”) at its address and telephone number, as set forth on the back cover of
this Offer to Purchase. Unless otherwise indicated in this Offer to Purchase or the context otherwise requires, all references in this
Offer to Purchase to “we,” “our,” or “us” refer to Purchaser or Parent as the context requires.
| Securities
Sought |
|
All
issued and outstanding shares of Class A common stock, par value $0.01 per share (the “Shares”), of Overseas Shipholding
Group, Inc., a Delaware corporation (“OSG”), other than Shares owned by Parent, Purchaser or any of their respective
affiliates. |
| Price
Offered Per Share |
|
$8.50
per Share in cash (the “Offer Price”), upon the terms and subject to the conditions described in this Offer to
Purchase (together with any amendments or supplements hereto, this “Offer to Purchase”) and in the related Letter
of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal”), subject to
any applicable withholding tax and without interest. |
| Scheduled
Expiration Date |
|
The
Offer will expire at one minute past 11:59 p.m. Eastern Time on July 9, 2024, unless extended in accordance with the terms of the
Merger Agreement and the applicable rules and regulations of the Securities and Exchange Commission, in which event the term “Expiration
Date” will mean the date to which the Expiration Date is so extended. |
| Purchaser |
|
Seahawk
MergeCo., Inc., a Delaware corporation (“Purchaser”) and a wholly owned subsidiary of Saltchuk Resources, Inc.,
a Washington corporation (“Parent”). As used herein, the defined term “Purchaser Parties” refers
to Purchaser and Parent. |
| OSG
Board Recommendation |
|
The
board of directors of OSG (the “OSG Board”) unanimously resolved to recommend that OSG’s stockholders (the
“OSG Stockholders”) accept the Offer and tender their Shares pursuant to the Offer. |
WHO
IS OFFERING TO BUY MY SHARES?
| ● | Purchaser,
a wholly owned subsidiary of Parent, is offering to buy your Shares. Purchaser has been organized
in connection with this Offer and has not carried on any activities other than entering into
the Merger Agreement and activities in connection with the Offer. See “The Tender
Offer—Section 8. Certain Information Concerning Parent and Purchaser.” |
| ● | Parent
is Saltchuk Resources, Inc. See “The Tender Offer—Section 8. Certain Information
Concerning Parent and Purchaser.” |
| ● | Purchaser
is Seahawk MergeCo., Inc. See “The Tender Offer—Section 8. Certain Information
Concerning Parent and Purchaser.” |
WHO
CAN PARTICIPATE IN THE OFFER?
| ● | The
Offer is open to all holders and beneficial owners of the Shares, other than Shares owned
by Parent, Purchaser or any of their respective affiliates. |
DOES
PARENT, PURCHASER OR ANY OF THEIR RESPECTIVE AFFILIATES ALREADY BENEFICIALLY OWN SHARES?
| ● | As
of May 16, 2024, Parent was the beneficial owner of 15,203,554 Shares of OSG, representing
approximately 21.1% of the outstanding Shares of OSG, based on 72,030,977 Shares outstanding
as of May 16, 2024, excluding the Company Warrants (as defined below) exercisable for 507,535
Shares as of May 16, 2024. See “The Tender Offer—Section 8. Certain Information
Concerning Parent and Purchaser.” |
WHAT
ARE THE CLASSES AND AMOUNTS OF SHARES SOUGHT IN THE OFFER?
| ● | Purchaser
is seeking to purchase all of the outstanding Shares, other than the Shares owned by Parent,
Purchaser and any of their respective affiliates. See the “Introduction”
and “The Tender Offer—Section 1. Terms of the Offer.” |
| ● | The
Offer applies only to Shares. If any former holders of shares of Class B common stock, par
value $0.01 per share, of OSG desire to exchange their certificates previously representing
shares of such Class B common stock for Shares in order to tender such Shares in the Offer
or to exchange such certificates for Merger Consideration following the time that Purchaser
irrevocably accepts the Shares for payment (the “Offer Acceptance Time”),
they should contact Computershare Transfer Agency, OSG’s transfer agent, or their broker, dealer,
commercial bank, trust company or other nominee for assistance. |
HOW
MUCH IS PURCHASER OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?
| ● | Purchaser
is offering to pay an Offer Price of $8.50 per Share in cash to you, without interest and
subject to any applicable tax withholding, upon the terms and subject to the conditions contained
in this Offer to Purchase and in the related Letter of Transmittal. See the “Introduction”
and “The Tender Offer—Section 1. Terms of the Offer.” |
WILL
I HAVE TO PAY ANY FEES OR COMMISSIONS?
| ● | If
your Shares are registered in your name and you tender your Shares, you will not be obligated
to pay brokerage fees or commissions or similar expenses. If you hold your Shares through
a broker, dealer, commercial bank, trust company or other nominee and your broker, dealer,
commercial bank, trust company or other nominee tenders your Shares on your behalf, your
broker, dealer, commercial bank, trust company or other nominee may charge a fee for doing
so. You should consult your broker, dealer, commercial bank, trust company or other nominee
to determine whether any charges will apply. See the “Introduction” and
“The Tender Offer—Section 3. Procedures for Tendering Shares.” |
WHY
IS PURCHASER MAKING THE OFFER?
| ● | Purchaser
is making the Offer because it wants to acquire control of, and ultimately own the entire
equity interest in, OSG. Following the consummation of the Offer, we intend to complete the
Merger (as defined below) as soon as practicable. Upon completion of the Merger, OSG will
become a wholly owned subsidiary of Parent. In addition, we intend to cause the Shares to
be delisted from the New York Stock Exchange (“NYSE”) and deregistered
under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”),
after completion of the Merger. See “The Tender Offer—Section 12. Purpose
of the Offer and Plans for OSG,” “The Tender Offer—Section 13. Certain
Effects of the Offer” and “The Tender Offer—Section 1. Terms of
the Offer.” |
IS
THERE A MINIMUM NUMBER OF SHARES THAT MUST BE TENDERED IN ORDER FOR YOU TO PURCHASE ANY SECURITIES?
| ● | Yes.
The obligation of Purchaser to accept for payment or pay for any Shares tendered pursuant
to the Offer is subject to the various conditions set forth in “The Tender Offer—Section
15. Conditions of the Offer,” including the “Minimum Condition.” The
“Minimum Condition” means that the number of Shares validly tendered and “received”
(within the meaning of Section 251(h) of the DGCL) and not validly withdrawn prior to the
expiration of the Offer (excluding any Shares tendered pursuant to guaranteed delivery procedures
that have not yet been “received” (within the meaning of Section 251(h) of the
DGCL)), together with any Shares owned by Parent, Purchaser, or any of their respective affiliates
as of the Expiration Date, equals at least one (1) Share more than a majority of all issued
and outstanding Shares as of the expiration of the Offer, other than any Shares held by OSG
in treasury as of the expiration of the Offer or any other Shares acquired by OSG prior to
the expiration of the Offer. |
| ● | A
more detailed discussion of the Minimum Condition is contained in the “Introduction,”
“The Tender Offer—Section 1. Terms of the Offer” and “The
Tender Offer—Section 15. Conditions of the Offer.” |
WHAT
ARE THE MOST SIGNIFICANT CONDITIONS OF THE OFFER?
| ● | Consummation
of the Offer is subject to the satisfaction (or, to the extent permitted, waiver) of certain
conditions set forth in the Merger Agreement, including, but not limited to: |
| (A) | the
Minimum Condition; |
| (B) | no
governmental entity of competent jurisdiction enacting or promulgating any law after May
19, 2024, the date of the Merger Agreement, or issued any order after May 19, 2024, that
is in effect and restrains, enjoins or otherwise prohibits the acquisition of or payment
for the Shares pursuant to the Offer or consummation of the Merger; |
| (C) | the
accuracy of the representations and warranties of OSG set forth in the Merger Agreement (subject
to certain exceptions and qualifications described in the Merger Agreement); |
| (D) | OSG’s
performance and compliance in all material respects with its agreements and covenants contained
in the Merger Agreement that are required to be performed or complied with by it at or prior
to the Offer Acceptance Time; |
| | | |
| | (E) | Parent
and Purchaser receiving a certificate of OSG, signed by an executive officer of OSG and dated
as of the date of the Offer Acceptance Time, to the effect that the conditions referenced
in clauses (C) and (D) above and clause (F) below have been satisfied; |
| | | |
| | (F) | no
Company Material Adverse Effect has occurred since May 19, 2024; |
| (G) | the
expiration or termination of the waiting period applicable to the Offer (and any extension
thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
“HSR Act”); and |
| (H) | the
Merger Agreement not being terminated in accordance with its terms (collectively, (A) through
(H), the “Offer Conditions”). |
| ● | Purchaser
and Parent reserve the right to waive certain of the conditions to the Offer in their sole
discretion to the extent permitted by applicable law; provided that the Minimum Condition
may be waived by Purchaser only with the prior written consent of OSG. |
| ● | A
more detailed discussion of the Offer Conditions is contained in the “Introduction,”
“The Tender Offer—Section 1. Terms of the Offer” and “The
Tender Offer—Section 15. Conditions of the Offer.” |
IS
THERE AN AGREEMENT GOVERNING THE OFFER?
| ● | Yes.
OSG, Parent and Purchaser have entered into the Merger Agreement. The Merger Agreement provides,
among other things, for the terms and conditions of the Offer and, following consummation
of the Offer, the Merger. See “The Tender Offer—Section 11. Summary of the
Merger Agreement and Certain Other Agreements.” |
DOES
PARENT HAVE FINANCIAL RESOURCES TO MAKE PAYMENTS IN THE OFFER?
| ● | Yes.
Parent and Purchaser estimate that the total amount of funds required from Parent and Purchaser
to purchase all Shares pursuant to the Offer, consummate the Merger and otherwise satisfy
their respective obligations under the Merger Agreement (including payments for the settlement
and cancellation of Company Stock Options, Company RSU Awards and Company Warrants, repayment
of OSG indebtedness and payment of associated breakage costs, payment of retention and other
bonus payments to OSG employees) and pay associated estimated fees and expenses is approximately
$948 million. Parent and Purchaser expect to fund such payments from a combination of Parent’s
and OSG’s available cash (subject to the requirement under the Merger Agreement that
OSG have cash on its consolidated balance sheet as of the Closing of $25.0 million), borrowings
under Parent’s existing credit facilities and, if completed prior to the Effective
Time, proceeds from an offering of Parent’s senior notes, each of which is described
below. To the extent required, Parent will provide Purchaser with sufficient funds to satisfy
Purchaser’s obligations. No alternative arrangements or alternative financing plans
have been made. See “The Tender Offer—Section 9. Source and Amount of Funds,”
“The Tender Offer—Section 11. Summary of the Merger Agreement and Certain
Other Agreements” and “The Tender Offer—Section 12. Purpose of the
Offer and Plans for OSG.” |
SHOULD
PURCHASER’S FINANCIAL CONDITION BE RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
| ● | No,
we do not believe it is relevant because: |
| ○ | the
consummation of the Offer is not subject to any financing condition; |
| ○ | the
Offer is being made for all Shares (other than Shares owned by Parent, Purchaser or any of
their respective affiliates) solely for cash; |
| ○ | if
the Offer is consummated, we will acquire all remaining Shares in the Merger for the same
cash price as was paid in the Offer (i.e., the Offer Price), subject to any applicable withholding
taxes; and |
| ○ | we
have all of the financial resources, including committed corporate loan facilities and cash
on hand, to purchase all Shares validly tendered and not properly withdrawn pursuant to the
Offer and to provide funding for the Merger and related fees and expenses. |
See
“The Tender Offer—Section 9. Source and Amount of Funds” and “The Tender Offer—Section 11. Summary
of the Merger Agreement and Certain Other Agreements.”
HOW
LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
| ● | Pursuant
to the Merger Agreement, the Offer and withdrawal rights will expire at one minute past 11:59
p.m. Eastern Time on July 9, 2024. You will have until one minute after 11:59 p.m. Eastern
Time on July 9, 2024, to tender your Shares in the Offer, unless Purchaser extends the Offer,
in which event you will have until the Expiration Date as so extended. |
CAN
THE OFFER BE EXTENDED, AND UNDER WHAT CIRCUMSTANCES?
| ● | Yes,
the Offer can be extended. The Merger Agreement provides that, subject to the parties’
termination rights under the Merger Agreement, (A) (i) if, as of any then-scheduled Expiration
Date, any Offer Condition is not satisfied and has not been waived by Purchaser or Parent,
to the extent waivable by Purchaser or Parent, then Purchaser may, in its discretion, and
without the consent of OSG or any other person, extend the Offer on up to two (2) occasions,
for an additional period of up to ten (10) business days per extension (or such longer period
as the parties may mutually agree in writing), to permit such Offer Condition to be satisfied,
and (ii) Purchaser shall, and Parent shall cause Purchaser to, extend the Offer from time
to time for the minimum period required by any law, any interpretation or position of the
SEC, the staff thereof or any rules and regulations of the NYSE applicable to the Offer,
and (B) if, as of any then-scheduled Expiration Date, any Offer Condition is not satisfied
and has not been waived, OSG may require Purchaser to extend the Offer on one or more occasions,
for an additional period of up to ten (10) business days per extension (or such longer period
as the parties may mutually agree in writing), to permit such Offer Condition to be satisfied
(provided that (x) in no event shall Purchaser be required to extend the Offer beyond the
valid termination of the Merger Agreement or beyond February 19, 2025, and (y) in the event
that the Minimum Condition is the only Offer Condition not satisfied or waived (other than
the Offer Conditions that by their nature are only satisfied as of the Offer Acceptance Time),
OSG may not require Purchaser to extend the Offer on more than five (5) such occasions of
ten (10) business days). See “The Tender Offer—Section 11. Summary of the
Merger Agreement and Certain Other Agreements” and “The Tender Offer—Section
15. Conditions of the Offer.” |
HOW
WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
| ● | If
Purchaser extends the Offer, we will inform Computershare Inc. and Computershare Trust Company,
N.A., the joint depositary and paying agent for the Offer (the “Depositary and Paying
Agent”), of that fact and will issue a press release giving the new Expiration
Date no later than 9:00 a.m. Eastern Time on the next business day after the day on which
the Offer was previously scheduled to expire. See “The Tender Offer—Section
1. Terms of the Offer.” |
HOW
DO I TENDER MY SHARES?
| ● | If
you hold your Shares directly as the registered owner, you can (i) tender your Shares in
the Offer by delivering the certificates representing your Shares, together with a completed
Letter of Transmittal and any other documents required by the Letter of Transmittal, to the
Depositary and Paying Agent or (ii) tender your Shares by following the book-entry procedures
set forth in “The Tender Offer—Section 3. Procedures for Tendering Shares”
not later than the expiration of the Offer. See “The Tender Offer—Section
3. Procedures for Tendering Shares” The Letter of Transmittal is enclosed with
this Offer to Purchase. |
| ● | If
you hold your Shares in street name (i.e., through a broker, dealer, commercial bank, trust
company or other nominee), you must contact the institution that holds your Shares and give
instructions that your Shares be tendered. You should contact the institution that holds
your Shares for more details. |
| ● | In
all cases, payment for tendered Shares will be made only after timely receipt by the Depositary
and Paying Agent of (i) certificates for such Shares or (ii) confirmation of a book-entry
transfer of such Shares as described in “The Tender Offer—Section 3. Procedures
for Tendering Shares” and a properly completed and duly executed Letter of Transmittal
and any other required documents for such Shares. See also “The Tender Offer—Section
2. Acceptance for Payment and Payment for Shares.” |
UNTIL
WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
| ● | You
may withdraw previously tendered Shares any time prior to one minute after 11:59 p.m. Eastern
Time on July 9, 2024 or the date to which Purchaser further extends the Offer. See “The
Tender Offer—Section 4. Withdrawal Rights.” |
| ● | In
addition, pursuant to Section 14(d)(5) of the Exchange Act, Shares may be withdrawn at any
time after August 9, 2024, which is the 60th day after the date of the commencement of the
Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to
the Offer. |
HOW
DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
| ● | To
withdraw previously tendered Shares, you must deliver a written or facsimile notice of withdrawal
with the required information to the Depositary and Paying Agent while you still have the
right to withdraw. If you tendered Shares by giving instructions to a broker, dealer, commercial
bank, trust company or other nominee, you must instruct the broker, dealer, commercial bank,
trust company or other nominee to arrange for the withdrawal of your Shares. See “The
Tender Offer—Section 4. Withdrawal Rights.” |
WHAT
DOES THE OSG BOARD THINK OF THE OFFER?
| ● | After
careful consideration, the members of the OSG Board have unanimously recommended that you
accept the Offer and tender your Shares pursuant to the Offer. |
| ● | OSG’s
full statement on the Offer is set forth in its Solicitation/Recommendation Statement on
Schedule 14D-9, which it has filed with the SEC on the date hereof. See also the “Introduction”
below. |
WILL
THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE SHARES ARE NOT TENDERED?
| ● | If
we accept Shares for payment pursuant to the Offer, then the Minimum Condition will have
been satisfied and we will hold a sufficient number of Shares to effect the Merger without
a vote or meeting by the OSG Stockholders under the DGCL. |
| ● | If
the Merger occurs, OSG will become a wholly owned subsidiary of Parent and each issued and
then outstanding Share (other than (a) any Shares held by OSG in treasury, (b) any Shares
held by Parent, Purchaser or any other wholly-owned subsidiary of Parent, (c) any Shares
irrevocably accepted for purchase by Purchaser in the Offer and (d) any Shares owned by any
of the OSG Stockholders who are entitled to and who properly demand appraisal rights pursuant
to Section 262 of the DGCL and have not validly revoked that demand) will be cancelled and
converted automatically into the right to receive the Merger Consideration. For more information,
see the “Introduction” below. |
| ● | Because
the Merger will be governed by Section 251(h) of the DGCL, no stockholder vote will be required
to consummate the Merger. As required by Section 251(h) of the DGCL, the Merger Agreement
provides that the Merger shall be effected as soon as practicable following the consummation
of the Offer. See the “Introduction” below and “The Tender Offer—Section
11. Summary of the Merger Agreement and Certain Other Agreements,” “The
Tender Offer—Section 12. Purpose of the Offer and Plans for OSG” and “The
Tender Offer—Section 16. Certain Legal Matters; Regulatory Approvals; Appraisal Rights.” |
IF
THE OFFER IS COMPLETED, WILL OSG CONTINUE AS A PUBLIC COMPANY?
| ● | No.
Immediately following consummation of the Offer and satisfaction or waiver (to the extent
permitted by applicable law) of the conditions to the Merger, we expect to complete the Merger
pursuant to applicable provisions of the DGCL, after which the Surviving Corporation will
be a wholly owned subsidiary of Parent, and the Shares will be delisted from the NYSE and
OSG’s obligations to file periodic reports under the Exchange Act will be suspended,
and OSG will be privately held. See “The Tender Offer—Section 13. Certain
Effects of the Offer.” |
IF
I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
| ● | If
you decide not to tender your Shares in the Offer and the Merger occurs as described above,
you will receive in the Merger the right to receive the Merger Consideration, which is same
amount as if you had tendered your Shares in the Offer (i.e., the Offer Price). |
| ● | If
you decide not to tender your Shares in the Offer and Purchaser purchases the Shares that
have been tendered, but the Merger does not occur, you will remain a stockholder of OSG.
Subject to limited conditions, if we purchase Shares in the Offer, we are obligated under
the Merger Agreement to cause the Merger to occur. See “The Tender Offer—Section
13. Certain Effects of the Offer.” |
| ● | Following
the Offer, the Shares may no longer constitute “margin securities” for purposes
of the margin regulations of the Federal Reserve Board, in which case your Shares may no
longer be used as collateral for loans made by brokers. See “The Tender Offer—Section
13. Certain Effects of the Offer.” |
WHAT
IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
| ● | On
June 7, 2024, the last full trading day prior to the date of this Offer to Purchase, the
last reported closing price per Share reported on the NYSE was $8.43, which is lower than
the Offer Price of $8.50 per Share. See “The Tender Offer—Section 6. Price
Range of Shares.” |
| ● | On
January 26, 2024, the last full trading day before public disclosure that Parent provided
the Board Letter (as defined below in “The Tender Offer—Section 10. Background
of the Offer; Contacts with OSG”) to the OSG Board, the last reported closing
price per Share on the NYSE was $5.90, which is lower than the Offer Price of $8.50 per Share. |
IF
I ACCEPT THE OFFER, WHEN AND HOW WILL I GET PAID?
| ● | If
the conditions to the Offer as set forth in the “Introduction” and “The
Tender Offer—Section 15. Conditions of the Offer” are satisfied or waived
and Purchaser consummates the Offer and accepts your Shares for payment, we will pay you
a dollar amount in cash equal to the number of Shares you tendered multiplied by the Offer
Price, without interest and subject to any applicable tax withholding, promptly following
the time at which Purchaser accepts for payment Shares tendered in the Offer (and in any
event within two (2) business days). See “The Tender Offer—Section 1. Terms
of the Offer” and “The Tender Offer—Section 2. Acceptance for Payment
and Payment for Shares.” |
IF
I AM AN EMPLOYEE OF OSG, HOW WILL MY OUTSTANDING EQUITY AWARDS BE TREATED IN THE OFFER AND THE MERGER?
| ● | As
of immediately prior to the Offer Acceptance Time, each option (the “Company Stock
Options”) to purchase Shares will become fully vested (to the extent unvested)
and (i) each Company Stock Option that has an exercise price per Share that is less than
the Offer Price (each, an “In-the-Money Option”) that is then outstanding
will be cancelled and, in exchange therefor, the holder of such cancelled In-the-Money Option
will be entitled to receive, in consideration of the cancellation of such In-the-Money Option,
an amount in cash, without any interest thereon and subject to applicable tax withholding,
equal to the product of (x) the excess of the Offer Price over the applicable exercise price
per Share of such In-the-Money Option and (y) the total number of Shares underlying such
In-the-Money Option as of immediately prior to the Offer Acceptance Time, and (ii) each Company
Stock Option that is not an In-the-Money Option will be cancelled for no consideration. |
| ● | As
of immediately prior to the Offer Acceptance Time, each restricted stock unit award of OSG
(the “Company RSU Award”), or portion thereof, that is not subject to
one or more performance goals as of immediately prior to the Offer Acceptance Time and that
is then outstanding will be cancelled and the holder of each such cancelled Company RSU Award
will be entitled to receive an amount in cash, without any interest thereon and subject to
applicable tax withholding, equal to the sum of (i) the product of (x) the Offer Price and
(y) the total number of Shares subject to such Company RSU Award or portion thereof, as applicable,
plus (ii) an amount equal to any dividend equivalent rights then accrued with respect to
such Company RSU Award or portion thereof, as applicable, plus (iii) any then-unpaid “cash
award” granted in connection with OSG’s retention program in 2022, as set forth
in the applicable Company RSU Award grant agreement, as applicable. |
| ● | As
of immediately prior to the Offer Acceptance Time, each Company RSU Award, or portion thereof,
that is (x) subject to one or more performance goals as of immediately prior to the Offer
Acceptance Time and (y) for which the performance period is originally scheduled to end in
fiscal year 2024 and that is then outstanding will be cancelled and the holder of each such
cancelled Company RSU Award will be entitled to receive an amount in cash, without any interest
thereon and subject to applicable tax withholding, equal to the sum of (i) the product of
(x) the Offer Price and (y) the total number of Shares subject to such Company RSU Award
or portion thereof, as applicable, plus (ii) an amount equal to any dividend equivalent rights
then accrued with respect to such Company RSU Award or portion thereof, as applicable. The
number of Shares subject to a Company RSU Award or portion thereof (and any related dividend
equivalent rights), as applicable, shall be determined based on the actual achievement of
such performance goal(s), measured through the Offer Acceptance Time, up to a maximum of
150% of the target level. OSG shall pay the holder of each such Company RSU Award the amount
described in this paragraph through OSG’s payroll system no later than the second payroll
date after the Effective Time. |
| ● | As
of immediately prior to the Offer Acceptance Time, each Company RSU Award, or portion thereof,
that is (x) subject to one or more performance goals as of immediately prior to the Offer
Acceptance Time and (y) for which the performance period is originally scheduled to end in
fiscal year 2025 or fiscal year 2026 and that is then outstanding will be cancelled and converted
into a new award granting the holder thereof the right to receive an amount in cash, without
any interest thereon and subject to applicable tax withholding, equal to the sum of (i) the
product of (x) the Offer Price and (y) the total number of Shares subject to such Company
RSU Award or portion thereof, as applicable, assuming target level achievement, plus (ii)
an amount equal to any dividend equivalent rights then accrued with respect to such Company
RSU Award or portion thereof, as applicable (each, a “Cash Award”). Each
such Cash Award shall no longer be subject to the performance goal(s) in effect immediately
prior to the Offer Acceptance Time, but shall otherwise remain subject to the same terms,
conditions, restrictions and vesting arrangements that were applicable to the corresponding
Company RSU Award immediately prior to the Offer Acceptance Time. Each Cash Award may be
increased, but not decreased, by up to 50% based on performance goal(s) to be mutually determined
by Parent and OSG management as soon as possible following the Effective Time. To the extent
vested, OSG shall make such payments in respect of each Cash Award no later than the end
of the second completed payroll cycle following the date on which the applicable Company
RSU Award would have become vested under the vesting schedule in place for such award as
of immediately prior to the Offer Acceptance Time (and in no event later than two and one-half
months following the end of the calendar year in which the applicable Company RSU Award would
have become vested), or on the applicable holder’s earlier termination of employment
that would have triggered an accelerated vesting and payment of the Company RSU Award per
the terms of such Company RSU Award, any employment agreement with such holder or any other
OSG benefit plan in effect as of the Offer Acceptance Time. |
HOW
WILL MY COMPANY WARRANTS BE TREATED IN THE OFFER AND THE MERGER?
| ● | Pursuant
to the Merger Agreement, in accordance with the terms of the Warrant Agreement, any Company
Warrant surrendered at any time from or after the Offer Acceptance Time that has an exercise
price per Share that is less than the Offer Price shall entitle the holder thereof to receive,
upon the surrender of such Company Warrant in accordance with its terms, an amount in cash
equal to the product of (x) the excess of the Offer Price over the applicable exercise price
per Share of such Company Warrant and (y) the total number of Shares subject to such Company
Warrant. |
WHAT
ARE THE PRINCIPAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF TENDERING MY SHARES IN THE OFFER OR HAVING MY SHARES EXCHANGED FOR THE MERGER
CONSIDERATION PURSUANT TO THE MERGER?
| ● | In
general, the exchange of Shares for cash pursuant to the Offer or the Merger will be a taxable
transaction for U.S. federal income tax purposes. A U.S. Holder (as defined below in “The
Tender Offer—Section 5. Certain U.S. Federal Income Tax Consequences of the Offer and
the Merger”) who sells Shares pursuant to the Offer or receives cash in exchange
for Shares pursuant to the Merger generally will recognize capital gain or loss for U.S.
federal income tax purposes in an amount equal to the difference, if any, between (i) the
amount of cash received (determined before deduction of any applicable withholding taxes)
and (ii) the U.S. Holder’s adjusted tax basis in the Shares sold pursuant to the Offer
or converted pursuant to the Merger. See “The Tender Offer—Section 5. Certain
U.S. Federal Income Tax Consequences of the Offer and the Merger” for a more detailed
discussion of the U.S. federal income tax considerations generally applicable to the Offer
and the Merger. |
| ● | If
you are a Non-U.S. Holder (as defined below in “The Tender Offer—Section 5.
Certain U.S. Federal Income Tax Consequences of the Offer and the Merger”), you
generally will not be subject to U.S. federal income tax with respect to the sale of Shares
pursuant to the Offer or receipt of cash in exchange for Shares pursuant to the Merger unless
you have certain connections to the United States described in detail below, but you may
be subject to backup withholding tax unless you comply with certain certification procedures
or otherwise establish a valid exemption from backup withholding tax. See “The Tender
Offer—Section 5. Certain U.S. Federal Income Tax Consequences of the Offer and the
Merger” for a more detailed discussion of the U.S. federal income tax considerations
generally applicable to the Offer and the Merger. |
The
U.S. federal, state, local and non-U.S. income and other tax consequences of the Offer and Merger to holders or beneficial owners of
Company Stock Options, Company RSU Awards or Company Warrants with respect to such Company Stock Options, Company RSU Awards and Company
Warrants are not discussed herein, and such holders and beneficial owners of Company Stock Options, Company RSU Awards and Company Warrants
are encouraged to consult their own tax advisors regarding such tax consequences.
WILL
I HAVE THE RIGHT TO HAVE MY SHARES APPRAISED?
| ● | No
appraisal rights are available to the holders of Shares in connection with the Offer. However,
if Purchaser purchases Shares in the Offer and the Merger is consummated, holders of Shares
outstanding as of immediately prior to the Effective Time who: (i) did not tender their Shares
in the Offer (or, if tendered, validly and subsequently withdrew such Shares prior to the
time Purchaser accepts properly tendered Shares for purchase and did not otherwise waive
their appraisal rights); (ii) comply with the applicable procedures under Section 262 of
the DGCL; and (iii) do not withdraw their demand for appraisal of such Shares or otherwise
lose their appraisal rights, in each case in accordance with the DGCL, will be entitled to
demand appraisal of their Shares and receive in lieu of the consideration payable in the
Merger a cash payment equal to the “fair value” of their Shares exclusive of
any element of value arising from the accomplishment or expectation of the Merger, as determined
by the Delaware Court of Chancery, in accordance with Section 262 of the DGCL plus interest,
if any, on the amount determined to be the fair value. |
| ● | The
“fair value” of the Shares as determined by the Delaware Court of Chancery could
be based upon considerations other than, or in addition to, the price paid in the Offer and
the Merger and the market value of such Shares. Stockholders and beneficial owners of Shares
should recognize that the value determined in an appraisal proceeding of the Delaware Court
of Chancery could be higher or lower than, or the same as, the Offer Price and that an investment
banking opinion as to the fairness, from a financial point of view, of the consideration
payable in a sale transaction, such as the Offer and the Merger, is not an opinion as to,
and does not otherwise address, fair value under the DGCL. Moreover, Parent and OSG may argue
in an appraisal proceeding that, for purposes of such proceeding, the “fair value”
of such Shares is less than the Offer Price. |
| ● | Any
stockholder or beneficial owner of Shares who desires to exercise his, her or its appraisal
rights should review carefully Section 262 of the DGCL and is urged to consult his, her or
its legal advisor before electing or attempting to exercise such rights. |
| ● | The
foregoing summary of appraisal rights under the DGCL does not purport to be a statement of
the procedures to be followed by stockholders or beneficial owners of Shares desiring to
demand any appraisal rights under Delaware law. The preservation and demand of appraisal
rights require strict and timely adherence to the applicable provisions of Delaware law,
which are contained in Section 262 of the DGCL and will be further summarized in a notice
of the availability of appraisal rights to be sent by OSG. The foregoing discussion is not
a complete statement of law pertaining to appraisal rights under Delaware law and is qualified
in its entirety by reference to Delaware law, including without limitation, Section 262 of
the DGCL, a copy of which may be accessed without subscription or cost at the following publicly
available website: https://delcode.delaware.gov/title8/c001/sc09/index.html#262. For more
information regarding appraisal rights, see “The Tender Offer—Section 16.
Certain Legal Matters; Regulatory Approvals; Appraisal Rights.” |
| ● | If
you tender your Shares in the Offer, you will not be entitled to demand appraisal rights
with respect to your Shares but, instead, subject to the conditions to the Offer, you will
receive the Offer Price for your Shares. |
WITH
WHOM MAY I SPEAK IF I HAVE QUESTIONS ABOUT THE OFFER?
| ● | You
can call Georgeson LLC, the Information Agent, toll-free at (866) 643-6206. See the back
cover of this Offer to Purchase.
|
To
All Holders of Shares of
Overseas
Shipholding Group, Inc.
INTRODUCTION
Purchaser,
a wholly owned subsidiary of Parent, is making the Offer to acquire all issued and outstanding Shares of OSG, other than any Shares owned
by Parent, Purchaser or any of their respective affiliates, for the Offer Price, upon the terms and subject to the conditions described
in this Offer to Purchase and in the related Letter of Transmittal. Subject to the terms of the Merger Agreement, the Offer Price will
be paid subject to any applicable tax withholding and without interest. The Offer is being made pursuant to the Merger Agreement, pursuant
to which, after the completion of the Offer and the satisfaction or, to the extent permitted, waiver of certain conditions, Purchaser
will be merged with and into OSG, without a meeting, vote or any further action of the OSG Stockholders in accordance with Section 251(h)
of the DGCL, and OSG will be the Surviving Corporation and a wholly owned subsidiary of Parent. Upon the terms and subject to the conditions
of the Offer and the Merger Agreement, including the satisfaction or, to the extent permitted, waiver of the conditions of the Offer,
Purchaser will (and Parent will cause Purchaser to), (A) promptly, and in no event later than 9:00 a.m. Eastern Time one (1) business
day (determined as set forth in Rule 14d-1(g)(3) under the Exchange Act) after the Expiration Date, irrevocably accept for payment all
Shares validly tendered (and not validly withdrawn) pursuant to the Offer (the time of such acceptance, the “Offer Acceptance
Time”) and (B) as promptly as practicable after the Offer Acceptance Time (and in any event within two (2) business days (determined
as set forth in Rule 14d-1(g)(3) under the Exchange Act) thereafter), pay for such Shares.
If
your Shares are registered in your name and you tender directly to the Depositary and Paying Agent, you will not be obligated to pay
brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase
of Shares by Purchaser pursuant to the Offer. If you hold your Shares through a broker, dealer, commercial bank, trust company or other
nominee you should check with such institution as to whether they charge any service fees or commissions.
We
will pay all charges and expenses of the Depositary and Paying Agent and the Information Agent.
Purchaser
will not be required to accept for payment or, prior to the Offer Acceptance Time and subject to any applicable rules and regulations
of the SEC, including Rule 14e-1(c) under the Exchange Act, to pay for any Shares tendered pursuant to the Offer, if:
| (i) | prior
to the Expiration Date, the Minimum Condition shall have not been satisfied; or |
| (iii) | any
of the conditions set forth in “The Tender Offer—Section 15. Conditions of
the Offer” shall exist or shall have occurred and be continuing at the Expiration
Date. |
If
the Merger Agreement has been validly terminated in accordance with the termination provisions therein, Purchaser must, and Parent must
cause Purchaser to, immediately and unconditionally terminate the Offer (prior to the Offer Acceptance Time and subject to any applicable
rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act) and not acquire any Shares pursuant to the Offer. If
the Offer is terminated in accordance with the terms of the Merger Agreement, Purchaser will promptly (and in no event more than one
(1) business day after such termination) return, and shall cause the Depositary and Paying Agent to return, in accordance with applicable
laws, all tendered Shares to the registered holders thereof.
Purchaser
and Parent reserve the right to waive certain of the conditions to the Offer in their sole discretion to the extent permitted by applicable
law; provided that the Minimum Condition may be waived by Purchaser only with the prior written consent of OSG. See “The Tender
Offer—Section 15. Conditions of the Offer.”
Pursuant
to the Merger Agreement, the Offer and withdrawal rights will expire at one minute past 11:59 p.m. Eastern Time on July 9, 2024. See
“The Tender Offer —Section 1. Terms of the Offer,” “The Tender Offer—Section 15. Conditions of
the Offer” and “The Tender Offer—Section 16. Certain Legal Matters; Regulatory Approvals; Appraisal Rights.”
After
careful consideration, the OSG Board has unanimously: (i) determined that the terms of the Merger Agreement and all agreements and documents
related thereto and contemplated thereby were fair to and in the best interest of OSG and the OSG Stockholders; (ii) declared that
the Merger Agreement and the Offer, the Merger and the other transactions contemplated by the Merger Agreement (the “Transactions”)
are advisable; (iii) approved and adopted the Merger Agreement and the Transactions, including the Merger and the Offer, in accordance
with the DGCL; (iv) directed that the Merger be effected and governed by Section 251(h) of the DGCL and that the Merger be consummated
as soon as practicable following the Offer Acceptance Time; (v) recommended that the OSG Stockholders accept the Offer and tender their
Shares to Purchaser pursuant to the Offer; and (vi) authorized and approved the execution, delivery and performance by OSG of the Merger
Agreement and the consummation of the Transactions.
For
reasons considered by the OSG Board, see OSG’s Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule
14D-9”) filed with the SEC on the date hereof in connection with the Offer, a copy of which (without certain exhibits) is being
furnished to the OSG Stockholders concurrently herewith.
The
Offer is being made in connection with the Merger Agreement, pursuant to which, after the completion of the Offer and the satisfaction
or waiver of certain conditions, the Merger will be effected. The Merger shall become effective when a certificate of merger is filed
with the Secretary of State of the State of Delaware (or at such subsequent date and time as may be agreed by Parent, OSG and Purchaser
in writing prior to the Offer Acceptance Time and specified in the certificate of merger).
Pursuant
to the Merger Agreement, at the Effective Time, by virtue of the Merger and without any action on the part of the holders of Shares,
each outstanding Share (other than (a) any Shares held by OSG in treasury, (b) any Shares held by Parent, Purchaser or any other wholly
owned subsidiary of Parent, (c) any Shares irrevocably accepted for purchase by Purchaser in the Offer and (d) any Shares owned by any
of the OSG Stockholders who are entitled to, and who properly demand, appraisal rights pursuant to Section 262 of the DGCL and have not
validly revoked such demand) will be cancelled and converted automatically into the right to receive the Merger Consideration.
Pursuant
to the Merger Agreement, as of immediately prior to the Offer Acceptance Time, each option (the “Company Stock Options”)
to purchase Shares will become fully vested (to the extent unvested) and (i) each Company Stock Option that has an exercise price per
Share that is less than the Offer Price (each, an “In-the-Money Option”) that is then outstanding will be cancelled
and, in exchange therefor, the holder of such cancelled In-the-Money Option will be entitled to receive, in consideration of the cancellation
of such In-the-Money Option, an amount in cash, without any interest thereon and subject to applicable tax withholding, equal to the
product of (x) the excess of the Offer Price over the applicable exercise price per Share of such In-the-Money Option and (y) the total
number of Shares underlying such In-the-Money Option as of immediately prior to the Offer Acceptance Time, and (ii) each Company Stock
Option that is not an In-the-Money Option will be cancelled for no consideration.
Pursuant
to the Merger Agreement, as of immediately prior to the Offer Acceptance Time, each restricted stock unit award of OSG (the “Company
RSU Award”), or portion thereof, that is not subject to one or more performance goals as of immediately prior to the Offer
Acceptance Time and that is then outstanding will be cancelled and the holder of each such cancelled Company RSU Award will be entitled
to receive an amount in cash, without any interest thereon and subject to applicable tax withholding, equal to the sum of (i) the product
of (x) the Offer Price and (y) the total number of Shares subject to such Company RSU Award or portion thereof, as applicable, plus (ii)
an amount equal to any dividend equivalent rights then accrued with respect to such Company RSU Award or portion thereof, as applicable,
plus (iii) any then-unpaid “cash award” granted in connection with OSG’s retention program in 2022, as set forth in
the applicable Company RSU Award grant agreement, as applicable.
Pursuant
to the Merger Agreement, as of immediately prior to the Offer Acceptance Time, each Company RSU Award, or portion thereof, that is (x)
subject to one or more performance goals as of immediately prior to the Offer Acceptance Time and (y) for which the performance period
is originally scheduled to end in fiscal year 2024 and that is then outstanding will be cancelled and the holder of each such cancelled
Company RSU Award will be entitled to receive an amount in cash, without any interest thereon and subject to applicable tax withholding,
equal to the sum of (i) the product of (x) the Offer Price and (y) the total number of Shares subject to such Company RSU Award or portion
thereof, as applicable, plus (ii) an amount equal to any dividend equivalent rights then accrued with respect to such Company RSU Award
or portion thereof, as applicable. The number of Shares subject to a Company RSU Award or portion thereof (and any related dividend equivalent
rights), as applicable, shall be determined based on the actual achievement of such performance goal(s), measured through the Offer Acceptance
Time, up to a maximum of 150% of the target level. OSG shall pay the holder of each such Company RSU Award the amount described in this
paragraph through OSG’s payroll system no later than the second payroll date after the Effective Time.
Pursuant
to the Merger Agreement, as of immediately prior to the Offer Acceptance Time, each Company RSU Award, or portion thereof, that is (x)
subject to one or more performance goals as of immediately prior to the Offer Acceptance Time and (y) for which the performance period
is originally scheduled to end in fiscal year 2025 or fiscal year 2026 and that is then outstanding will be cancelled and converted into
a new award granting the holder thereof the right to receive an amount in cash, without any interest thereon and subject to applicable
tax withholding, equal to the sum of (i) the product of (x) the Offer Price and (y) the total number of Shares subject to such Company
RSU Award or portion thereof, as applicable, assuming target level achievement, plus (ii) an amount equal to any dividend equivalent
rights then accrued with respect to such Company RSU Award or portion thereof, as applicable (each, a “Cash Award”).
Each such Cash Award shall no longer be subject to the performance goal(s) in effect immediately prior to the Offer Acceptance Time,
but shall otherwise remain subject to the same terms, conditions, restrictions and vesting arrangements that were applicable to the corresponding
Company RSU Award immediately prior to the Offer Acceptance Time. Each Cash Award may be increased, but not decreased, by up to 50% based
on performance goal(s) to be mutually determined by Parent and OSG management as soon as possible following the Effective Time. To the
extent vested, OSG shall make such payments in respect of each Cash Award no later than the end of the second completed payroll cycle
following the date on which the applicable Company RSU Award would have become vested under the vesting schedule in place for such award
as of immediately prior to the Offer Acceptance Time (and in no event later than two and one-half months following the end of the calendar
year in which the applicable Company RSU Award would have become vested), or on the applicable holder’s earlier termination of
employment that would have triggered an accelerated vesting and payment of the Company RSU Award per the terms of such Company RSU Award,
any employment agreement with such holder or any other OSG benefit plan in effect as of the Offer Acceptance Time.
Pursuant
to the Merger Agreement, in accordance with the terms of the Warrant Agreement, any Company Warrant surrendered at any time from or after
the Offer Acceptance Time that has an exercise price per Share that is less than the Offer Price shall entitle the holder thereof to
receive, upon the surrender of such Company Warrant in accordance with its terms, an amount in cash equal to the product of (x) the excess
of the Offer Price over the applicable exercise price per Share of such Company Warrant and (y) the total number of Shares subject to
such Company Warrant.
If
any former holder of shares of Class B common stock, par value $0.01 per share, of OSG desires to exchange certificates for shares of
such Class B common stock for Shares in order to tender such Shares in the Offer or to exchange such certificates for Merger Consideration
following the Offer Acceptance Time, they should contact Computershare Transfer Agency, OSG’s transfer agent, or their broker,
dealer, commercial bank, trust company or other nominee for assistance.
The
Merger Agreement is more fully described in “The Tender Offer—Section 11. Summary of the Merger Agreement and Certain
Other Agreements,” which also contains a discussion of the treatment of Company Stock Options, Company RSU Awards and Company
Warrants in the Merger. “The Tender Offer—Section 5. Certain U.S. Federal Income Tax Consequences of the Offer and the
Merger” below describes certain U.S. federal income tax consequences generally applicable to Holders (as defined below in “The
Tender Offer—Section 5. Certain U.S. Federal Income Tax Consequences of the Offer and the Merger”) whose Shares are tendered
and accepted for purchase pursuant to the Offer or whose Shares are converted into the right to receive cash in the Merger.
Because
the Merger will be consummated in accordance with Section 251(h) of the DGCL, approval of the Merger will not require a vote of the OSG
Stockholders. Section 251(h) of the DGCL provides that stockholder approval of a merger is not required if certain requirements are met,
including that: (i) the acquiring company consummates a tender offer for any and all of the outstanding stock of OSG that, absent Section
251(h) of the DGCL, would be entitled to vote on the merger; (ii) following the consummation of such tender offer, the stock irrevocably
accepted for purchase pursuant to such offer and received by the Depositary and Paying Agent prior to expiration of such offer, together
with the stock otherwise owned by the consummating corporation or its affiliates and any “rollover stock” (as defined in
Section 251(h) of the DGCL), equals at least such percentage of the stock of OSG to be acquired that, absent Section 251(h) of the DGCL,
would be required to adopt the Merger Agreement; and (iii) each outstanding share (other than “excluded stock” (as defined
in Section 251(h) of the DGCL)) of the company that is subject of and not irrevocably accepted for purchase in such offer is converted
in such merger into the right to receive the same amount and kind of cash, property, rights or securities paid for such shares pursuant
to such offer. If the Minimum Condition is satisfied and we accept Shares for payment pursuant to the Offer, we will hold a sufficient
number of Shares to ensure that OSG will not be required to submit the adoption of the Merger Agreement to a vote of the OSG Stockholders.
As a result of the Merger, OSG will cease to be a publicly traded company and will become a wholly owned subsidiary of Parent. See “The
Tender Offer—Section 11. Summary of the Merger Agreement and Certain Other Agreements,” “The Tender Offer—Section
12. Purpose of the Offer and Plans for OSG” and “The Tender Offer—Section 16. Certain Legal Matters; Regulatory
Approvals; Appraisal Rights.”
The
Merger Agreement, this Offer to Purchase and the related Letter of Transmittal contain important information and each document should
be read carefully and in their entirety before any decision is made with respect to the Offer.
THE
TENDER OFFER
Upon
the terms and subject to the conditions of the Offer and the Merger Agreement, including the satisfaction or, to the extent permitted,
waiver of the conditions of the Offer, Purchaser will (and Parent will cause Purchaser to), (i) promptly, and in no event later than
9:00 a.m. Eastern Time one (1) business day (determined as set forth in Rule 14d-1(g)(3) under the Exchange Act) after the Expiration
Date, irrevocably accept for payment all Shares validly tendered (and not validly withdrawn in accordance with the procedures set forth
in “The Tender Offer—Section 4. Withdrawal Rights”) pursuant to the Offer (the time of such acceptance,
the “Offer Acceptance Time”) and (ii) as promptly as practicable after the Offer Acceptance Time (and in any event
within two (2) business days (determined as set forth in Rule 14d-1(g)(3) under the Exchange Act) thereafter), pay for such Shares. The
Offer will expire at one minute after 11:59 p.m. Eastern Time on July 9, 2024, the date that is twenty (20) business days (determined
as set forth in Rule 14d-1(g)(3) under the Exchange Act) from commencement of the Offer, unless extended in accordance with the terms
of the Merger Agreement and the applicable rules and regulations of the SEC, in which event the term “Expiration Date” will
mean the date to which the Expiration Date is so extended.
Purchaser
is offering to pay an Offer Price of $8.50 per Share in cash to you, without interest and subject to any applicable tax withholding,
upon the terms and subject to the conditions contained in this Offer to Purchase and in the related Letter of Transmittal.
The
Offer is conditioned upon the satisfaction of the Minimum Condition and the other conditions described in “The Tender Offer—Section
15. Conditions of the Offer.” We may, subject to the terms and conditions of the Merger Agreement, terminate the Offer without
purchasing any Shares if certain events described in “The Tender Offer—Section 11. Summary of the Merger Agreement and
Certain Other Agreements—Summary of the Merger Agreement—Termination” occur.
Pursuant
to the Merger Agreement, Purchaser has reserved the right, to the extent permitted by applicable law, to: (i) increase the amount of
cash constituting the Offer Price and/or (ii) waive any Offer Condition (to the extent permitted under applicable laws), except that,
without the prior written consent of OSG, Purchaser may not (a) amend or waive the Minimum Condition; (b) decrease the Offer Price; (c)
make any change to the Offer that (1) changes the form of consideration to be delivered by Purchaser pursuant to the Offer; (2) decreases
the number of Shares sought to be purchased by Purchaser in the Offer; (3) imposes conditions or requirements to the Offer in addition
to the existing Offer Conditions; (4) except as provided in the Merger Agreement with respect to the extension of the Offer, terminates
the Offer or accelerates, extends or otherwise changes the Expiration Date of the Offer; (5) otherwise amends or modifies any of the
terms of the Offer in a manner that adversely affects any holder of Shares or that would, individually or in the aggregate, reasonably
be expected to prevent or delay the consummation of the Offer or prevent, delay or impair the ability of Parent or Purchaser to consummate
the Offer or the Merger; or (6) provides for any “subsequent offering period” within the meaning of Rule 14d-11 promulgated
under the Exchange Act.
If,
on or before the Expiration Date, we increase the consideration being paid for Shares accepted for payment in the Offer, such increased
consideration will be paid to all stockholders whose Shares are purchased in the Offer, whether or not such Shares were tendered before
the announcement of the increase in consideration.
The
Merger Agreement provides that, subject to the parties’ termination rights under the Merger Agreement, (A) (i) if, as of any then-scheduled
Expiration Date, any Offer Condition is not satisfied and has not been waived by Purchaser or Parent, to the extent waivable by Purchaser
or Parent, then Purchaser may, in its discretion, and without the consent of OSG or any other person, extend the Offer on up to two (2)
occasions, for an additional period of up to ten (10) business days (as determined as set forth in Rule 14d-1(g)(3) under the Exchange
Act) per extension (or such longer period as the parties may mutually agree in writing), to permit such Offer Condition to be satisfied
and (ii) Purchaser shall, and Parent shall cause Purchaser to, extend the Offer from time to time for the minimum period required by
any law, any interpretation or position of the SEC, the staff thereof or any rules and regulations of the NYSE applicable to the Offer,
and (B) if, as of any then-scheduled Expiration Date, any Offer Condition is not satisfied and has not been waived, OSG may require Purchaser
to extend the Offer on one or more occasions, for an additional period of up to ten (10) business days (as determined as set forth in
Rule 14d-1(g)(3) under the Exchange Act) per extension (or such longer period as the parties may mutually agree in writing), to permit
such Offer Condition to be satisfied (provided that (x) in no event shall Purchaser be required to extend the Offer beyond the valid
termination of the Merger Agreement or beyond February 19, 2025 and (y) in the event that the Minimum Condition is the only Offer Condition
not satisfied or waived (other than the Offer Conditions that by their nature are only satisfied as of the Offer Acceptance Time), OSG
may not require Purchaser to extend the Offer on more than five (5) such occasions of ten (10) business days (as determined as set forth
in Rule 14d-1(g)(3) under the Exchange Act)). See “The Tender Offer—Section 11. Summary of the Merger Agreement and Certain
Other Agreements” and “The Tender Offer—Section 15. Conditions of the Offer.”
Except
as set forth above, there can be no assurance that we will be required under the Merger Agreement to extend the Offer. During any extension
of the initial offering period pursuant to the paragraphs above, all Shares previously tendered and not validly withdrawn will remain
subject to the Offer and subject to withdrawal rights. See “The Tender Offer—Section 4. Withdrawal Rights.”
Without
OSG’s consent, there will not be a subsequent offering period for the Offer.
If,
subject to the terms of the Merger Agreement, we make a material change in the terms of the Offer or the information concerning the Offer,
or if we waive a material condition of the Offer, we will disseminate additional tender offer materials and extend the Offer if and to
the extent required by Rules 14d-3(b)(1), 14d-4(d), 14d-6(c) and l4e-1 under the Exchange Act or otherwise. The minimum period during
which a tender offer must remain open following material changes in the terms of the tender offer or the information concerning the tender
offer, other than a change in the consideration offered or a change in the percentage of securities sought, will depend upon the facts
and circumstances, including the relative materiality of the terms or information changes. With respect to a change in the consideration
offered or a change in the percentage of securities sought, a tender offer generally must remain open for a minimum of 10 business days
following such change to allow for adequate disclosure to stockholders.
We
expressly reserve the right, in our sole discretion, subject to the terms and upon the conditions of the Merger Agreement and the applicable
rules and regulations of the SEC, to not accept for payment any Shares if, at the expiration of the Offer, any of the conditions to the
Offer set forth in “The Tender Offer—Section 15. Conditions of the Offer” have not been satisfied. Under certain
circumstances, Parent and Purchaser may terminate the Merger Agreement and the Offer.
Any
extension, waiver or amendment of the Offer or termination of the Offer will be followed, as promptly as practicable, by public announcement
thereof, such announcement in the case of an extension to be issued not later than 9:00 a.m. Eastern Time on the next business day after
the Expiration Date in accordance with the public announcement requirements of Rules 14d-3(b)(1), 14d-4(d) and 14e-1(d) under the Exchange
Act. Without limiting our obligation under such rule or the manner in which we may choose to make any public announcement, we currently
intend to make announcements by issuing a press release to the PR Newswire (or such other national media outlet or outlets we deem prudent)
and making any appropriate filing with the SEC.
Promptly
following the purchase of Shares in the Offer, we expect to complete the Merger without a vote of the OSG Stockholders pursuant to Section
251(h) of the DGCL.
OSG
has agreed to provide us with its list of stockholders and security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares whose names appear
on OSG’s stockholder list and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing
agency’s security position listing, for subsequent transmittal to beneficial owners of Shares.
| 2. | ACCEPTANCE
FOR PAYMENT AND PAYMENT FOR SHARES. |
Subject
to the satisfaction or waiver, to the extent permitted, of all the conditions to the Offer set forth in “The Tender Offer—Section
15. Conditions of the Offer,” we will, promptly, and in no event later than 9:00 a.m. Eastern Time one (1) business day after
the Expiration Date, irrevocably accept for payment all Shares validly tendered (and not validly withdrawn) pursuant to the Offer and,
as promptly as practicable after the Offer Acceptance Time (and in any event within two business days), pay for such Shares.
In
all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary
and Paying Agent of (i) certificates representing such Shares or confirmation of the book-entry transfer of such Shares into the Depositary
and Paying Agent’s account at The Depository Trust Company (“DTC”) pursuant to the procedures set forth in “The
Tender Offer—Section 3. Procedures for Tendering Shares,” (ii) a Letter of Transmittal, properly completed and duly executed,
with any required signature guarantees in customary form (or, in the case of a book-entry transfer, an Agent’s Message (as defined
below) in lieu of the Letter of Transmittal), and (iii) any other documents required by the Letter of Transmittal or any other customary
documents required by Depositary and Paying Agent. See “The Tender Offer—Section 3. Procedures for Tendering Shares.”
For
purposes of the Offer, if and when Purchaser gives oral or written notice to the Depositary and Paying Agent of its acceptance for payment
of such Shares pursuant to the Offer, then Purchaser has accepted for payment and thereby purchased Shares validly tendered and not validly
withdrawn pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant
to the Offer will be made by deposit of the aggregate Offer Price (subject to any applicable tax withholding) therefor with the Depositary
and Paying Agent, which will act as agent for the tendering stockholders for purposes of receiving payments from us and transmitting
such payments to the tendering stockholders. Under no circumstances will interest be paid on the Offer Price for Shares, regardless
of any extension of the Offer or any delay in payment for Shares.
If
any tendered Shares are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, or if certificates
are submitted for more Shares than are tendered, certificates for such unpurchased Shares will be returned (or new certificates for the
Shares not tendered will be sent), without expense to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer
into the Depositary and Paying Agent’s account at DTC pursuant to the procedures set forth in “The Tender Offer—Section
3. Procedures for Tendering Shares,” such Shares will be credited to an account maintained with DTC) promptly following expiration
or termination of the Offer.
| 3. | PROCEDURES
FOR TENDERING SHARES. |
Valid
Tender of Shares. Except as set forth below, to validly tender Shares pursuant to the Offer, a properly completed and duly executed
Letter of Transmittal in accordance with the instructions of the Letter of Transmittal, with any required signature guarantees, or an
Agent’s Message (as defined below) in connection with a book-entry delivery of shares, and any other documents required by the
Letter of Transmittal and any other customary documents required by the Depositary and Paying Agent, must be received by the Depositary
and Paying Agent at one of its addresses set forth on the back cover of this Offer to Purchase prior to the expiration of the Offer and
(a) certificates representing Shares tendered must be properly delivered to the Depositary and Paying Agent at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the expiration of the Offer or (b) such Shares must be properly delivered
pursuant to the procedures for book-entry transfer described below and a confirmation of such delivery received by the Depositary and
Paying Agent (which confirmation must include an Agent’s Message (as defined below) if the tendering stockholder has not delivered
a Letter of Transmittal), in each case, prior to the Expiration Date. The term “Agent’s Message” means a message,
transmitted by DTC to, and received by, the Depositary and Paying Agent and forming a part of a Book-Entry Confirmation (as defined below),
which states that DTC has received an express acknowledgment from the participant in DTC tendering the Shares which are the subject of
such Book-Entry Confirmation (as defined below) that such participant has received and agrees to be bound by the terms of the Letter
of Transmittal and that Purchaser may enforce such agreement against the participant.
Book-Entry
Transfer. The Depositary and Paying Agent will take steps to establish and maintain an account with respect to the Shares at DTC
for purposes of the Offer. Any financial institution that is a participant in DTC’s systems may make a book-entry transfer of Shares
by causing DTC to transfer such Shares into the Depositary and Paying Agent’s account in accordance with DTC’s procedures
for such transfer. However, although delivery of Shares may be effected through book-entry transfer, either the Letter of Transmittal,
properly completed and duly executed, together with any required signature guarantees, or an Agent’s Message in lieu of the Letter
of Transmittal, and any other required documents, must, in any case, be transmitted to and received by the Depositary and Paying Agent
at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date. The confirmation of a book-entry
transfer of Shares into the Depositary and Paying Agent’s account at DTC as described above is referred to herein as a “Book-Entry
Confirmation.”
Delivery
of documents to DTC in accordance with DTC’s procedures does not constitute delivery to the Depositary and Paying Agent.
No
Guaranteed Delivery. We are not providing for guaranteed delivery procedures. Therefore, OSG Stockholders must allow sufficient time
for the necessary tender procedures to be completed during normal business hours of DTC, which end earlier than the Expiration Date.
Normal business hours of DTC are between 8:00 a.m. and 5:00 p.m., Eastern Time, Monday through Friday. OSG Stockholders must tender their
Shares in accordance with the procedures set forth in this Offer to Purchase and the related Letter of Transmittal prior to the Expiration
Date. Tenders received by the Depositary and Paying Agent after the Expiration Date will be disregarded and of no effect.
Signature
Guarantees and Stock Powers. Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by
a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good
standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including the Security Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Program and the Stock Exchanges Medallion Program (each, an “Eligible
Institution”). Signatures on a Letter of Transmittal need not be guaranteed: (i) if the Letter of Transmittal is signed by
the registered owner(s) (which term, for purposes of this section, includes any participant in any of DTC’s systems whose name
appears on a security position listing as the owner of the Shares) of Shares tendered therewith and such registered owner has not completed
the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions”
on the Letter of Transmittal; or (ii) if such Shares are tendered for the account of an Eligible Institution. See Instructions 1 and
5 of the Letter of Transmittal. If the certificates for Shares are registered in the name of a person other than the signer of the Letter
of Transmittal, or if payment is to be made or certificates for Shares not tendered or not accepted for payment are to be returned to
a person other than the registered owner of the certificates surrendered, then the tendered certificates must be registered or accompanied
by appropriate stock powers, in either case, signed exactly as the name or names of the registered owner(s) or holder(s) appear on the
certificates, with the signatures on the certificates or stock powers guaranteed as described above. See Instructions 1 and 5 of the
Letter of Transmittal.
If
certificates representing Shares are forwarded separately to the Depositary and Paying Agent, a properly completed and duly executed
Letter of Transmittal must accompany each delivery of certificates.
THE
METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE ELECTION
AND RISK OF THE TENDERING STOCKHOLDER. DELIVERY OF ALL SUCH DOCUMENTS WILL BE DEEMED MADE, AND RISK OF LOSS THEREOF SHALL PASS, ONLY
WHEN ACTUALLY RECEIVED BY THE DEPOSITARY AND PAYING AGENT (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY PRIOR TO THE EXPIRATION DATE.
Other
Requirements. Notwithstanding any provision of the Merger Agreement, Purchaser will pay for Shares tendered (and not validly withdrawn)
pursuant to the Offer only after timely receipt by the Depositary and Paying Agent of: (i) certificates for, or a timely Book-Entry Confirmation
with respect to, such Shares; (ii) a Letter of Transmittal, properly completed and duly executed, with any required signature guarantees
(or an Agent’s Message in lieu of the Letter of Transmittal); and (iii) any other documents required by the Letter of Transmittal
or any other customary documents required by the Depositary and Paying Agent. Accordingly, tendering stockholders may be paid at different
times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares, as the case may be, and other documents
described above are actually received by the Depositary and Paying Agent. Under no circumstances will Purchaser pay interest on the
purchase price of Shares, regardless of any extension of the Offer or any delay in making such payment. If your Shares are held in
street name (i.e., through a broker, dealer, commercial bank, trust company or other nominee), your Shares can be tendered by your nominee
by book-entry transfer through the Depositary and Paying Agent.
Binding
Agreement. Our acceptance for payment of Shares tendered pursuant to one of the procedures described above will constitute a binding
agreement between the tendering stockholder and us upon the terms and subject to the conditions of the Offer.
Appointment
as Proxy. By executing and delivering a Letter of Transmittal as set forth above (or, in the case of a book-entry transfer, by delivery
of an Agent’s Message in lieu of a Letter of Transmittal), the tendering stockholder irrevocably appoints Purchaser’s designees
as such stockholder’s proxies, each with full power of substitution, to the full extent of such stockholder’s rights with
respect to the Shares tendered by such stockholder and accepted for payment by us and with respect to any and all other Shares or other
securities issued or issuable in respect of such Shares on or after the date of the Merger Agreement. All such proxies and powers of
attorney will be considered coupled with an interest in the tendered Shares. Such appointment is effective when, and only to the extent
that, we accept for payment Shares tendered by such stockholder as provided herein. Upon the effectiveness of such appointment, all prior
powers of attorney, proxies and consents given by such stockholder will be revoked, and no subsequent powers of attorney, proxies and
consents may be given (and, if given, will not be deemed effective). Our designees will, with respect to the Shares or other securities
and rights for which the appointment is effective, be empowered to exercise all voting and other rights of such stockholder as they,
in their sole discretion, may deem proper at any annual, special, adjourned or postponed meeting of the stockholders of OSG, by written
consent in lieu of any such meeting or otherwise. We reserve the right to require that, in order for Shares to be deemed validly tendered,
immediately upon our payment for such Shares we must be able to exercise full voting, consent and other rights to the extent permitted
under applicable law with respect to such Shares and other securities, including voting at any meeting of stockholders or executing a
written consent concerning any matter.
Determination
of Validity. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by us in our sole and absolute discretion, which determination will be final and binding, subject to the rights of
the tendering holders of Shares to challenge our determination in a court of competent jurisdiction. Purchaser reserves the absolute
right to reject any and all tenders determined by us not to be in proper form or the acceptance for payment of or payment for which may,
in our opinion, be unlawful. Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of any Shares
of any particular stockholder whether or not similar defects or irregularities are waived in the case of any other stockholder. No tender
of Shares will be deemed to have been validly made until all defects and irregularities relating thereto have been cured or waived. None
of Parent, Purchaser or any of their respective affiliates or assigns, the Depositary and Paying Agent, the Information Agent, or any
other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure
to give any such notification. Purchaser’s interpretation of the terms and conditions of the Offer (including the Letter of Transmittal
and the instructions thereto and any other documents related to the Offer) will be final and binding, subject to the rights of the tendering
holders of Shares to challenge our determination in a court of competent jurisdiction.
Information
Reporting and Backup Withholding. Payments made to stockholders of OSG in the Offer or the
Merger generally will be subject to information reporting and may be subject to backup withholding of U.S. federal income tax on payments
for Shares made in the Offer or the Merger (currently at a rate of 24%). To avoid backup withholding, any stockholder that is a U.S.
person that does not otherwise establish an exemption from U.S. federal backup withholding in a manner satisfactory to Purchaser should
complete and return the IRS Form W-9 included in the Letter of Transmittal, certifying that such stockholder is a U.S. person, that the
taxpayer identification number provided is correct, and that such stockholder is not subject to backup withholding. Any stockholder that
is not a U.S. person should submit an IRS Form W-8BEN or IRS Form W-8BEN-E (or other applicable IRS Form W-8) attesting to such stockholder’s
foreign status, or otherwise establish an exemption from information reporting and backup withholding in a manner satisfactory to Purchaser.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will generally be allowed as a refund
from the IRS or a credit against a stockholder’s U.S. federal income tax liability, if any, provided the required information is
timely furnished to the IRS.
Except
as otherwise provided in this Section 4, tenders of Shares pursuant to the Offer are irrevocable. However, a stockholder has withdrawal
rights that are exercisable until the expiration of the Offer (i.e., at any time prior to one minute after 11:59 p.m. Eastern Time on
July 9, 2024), or in the event the Offer is extended, on such date and time to which the Offer is extended. In addition, pursuant to
Section 14(d)(5) of the Exchange Act, Shares may be withdrawn at any time after August 9, 2024, which is the 60th day after
the date of the commencement of the Offer, unless prior to that date Purchaser has accepted for payment the Shares validly tendered in
the Offer.
For
a withdrawal of Shares to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary
and Paying Agent at one of its addresses set forth on the back cover of this Offer to Purchase. Any notice of withdrawal must specify
the name of the person having tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the record holder
of the Shares to be withdrawn, if different from that of the person who tendered such Shares. The signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of any Eligible Institution. If
Shares have been tendered pursuant to the procedures for book-entry transfer as set forth in “The Tender Offer—Section
3. Procedures for Tendering Shares,” any notice of withdrawal must specify the name and number of the account at DTC to be
credited with the withdrawn Shares. If certificates representing the Shares to be withdrawn have been delivered or otherwise identified
to the Depositary and Paying Agent, the name of the registered holder and the serial numbers shown on such certificates must also be
furnished to the Depositary and Paying Agent prior to the physical release of such certificates.
All
questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by us, in our sole discretion,
which determination will be final and binding, subject to the rights of the tendering holders of Shares to challenge our determination
in a court of competent jurisdiction. No withdrawal of tendered Shares will be deemed to have been properly made until all defects and
irregularities have been cured or waived. None of Parent, Purchaser or any of their respective affiliates or assigns, the Depositary
and Paying Agent, the Information Agent, or any other person will be under any duty to give notification of any defects or irregularities
in any notice of withdrawal or incur any liability for failure to give such notification. Withdrawals of tenders of Shares may not be
rescinded, and any Shares properly withdrawn will be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn
Shares may be re-tendered by following one of the procedures for tendering Shares described in “The Tender Offer—Section
3. Procedures for Tendering Shares” at any time prior to the expiration of the Offer.
If
Purchaser extends the Offer, delays its acceptance for payment of Shares, or is unable to accept for payment Shares pursuant to the Offer,
for any reason, then, without prejudice to Purchaser’s rights pursuant to the Offer, the Depositary and Paying Agent may nevertheless,
on Purchaser’s behalf, retain tendered Shares, and such Shares may not be withdrawn except to the extent that tendering stockholder’s
exercise of withdrawal rights as described in this Section 4.
We
will determine, in our sole discretion, all questions as to the form and validity (including time of receipt) of any notice of withdrawal
and our determination will be final and binding to the fullest extent permitted by law, subject to the rights of holders of Shares to
challenge such decision in a court of competent jurisdiction. None of Purchaser, Parent, the Depositary and Paying Agent, the
Information Agent or any other person will be under any duty to give notice of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
| 5. | CERTAIN
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER AND THE MERGER. |
The
following is a discussion of U.S. federal income tax considerations generally applicable to U.S. Holders and Non-U.S. Holders (each as
defined below) whose Shares are tendered and accepted for payment pursuant to the Offer or whose Shares are converted into the right
to receive cash in the Merger. This summary is based on provisions of the Internal Revenue Code of 1986, as amended (the “Code”),
Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, each in effect as of the date of
this Offer, and all of which are subject to change, possibly with retroactive effect. We have not sought, and do not intend to seek,
any ruling from the IRS or any opinion of counsel with respect to the statements made and the conclusions reached in the following summary,
and no assurance can be given that the IRS will agree with the views expressed herein, or that a court will not sustain any challenge
by the IRS in the event of litigation.
This
summary applies only to stockholders who hold their Shares as “capital assets” within the meaning of Section 1221 of the
Code (generally, property held for investment). This summary does not address all aspects of U.S. federal income taxation that may be
relevant to a stockholder in light of its particular circumstances, or that may apply to stockholders subject to special treatment under
U.S. federal income tax laws (e.g., regulated investment companies, real estate investment trusts, mutual funds, controlled foreign corporations,
passive foreign investment companies, cooperatives, banks and certain other financial institutions, insurance companies, government organizations,
tax-exempt organizations, retirement plans or other tax-deferred accounts, a corporation that accumulates earnings to avoid U.S. federal
income tax, stockholders that are, or hold Shares through, partnerships or other pass-through entities for U.S. federal income tax purposes,
U.S. Holders (as defined below) whose functional currency is not the United States dollar, dealers or brokers in stocks, securities,
commodities or foreign currency, dealers or traders that mark-to-market their securities, expatriates and former long-term residents
of the United States, persons that own or have owned (or are deemed to own or have owned under certain constructive ownership rules)
5% or more of the outstanding Shares (by vote or value), stockholders holding Shares as part of a straddle, hedging, constructive sale
or conversion transaction or other risk reduction transaction or integrated instrument, stockholders that purchase or sell Shares as
part of a wash sale for tax purposes, stockholders required to recognize income or gain with respect to the Offer or the Merger no later
than such income or gain is required to be reported on an applicable financial statement (as defined in the Code), stockholders holding
Shares as qualified small business stock for purposes of Sections 1045 and/or 1202 of the Code or as “Section 1244 stock”,
stockholders who exercise their appraisal rights in the Merger, and stockholders who received their Shares in compensatory transactions,
pursuant to the exercise of employee stock options, stock purchase rights or stock appreciation rights, as restricted stock or otherwise
as compensation). In addition, this discussion does not address any tax consequences related to (i) any aspect of the alternative minimum
tax, (ii) the Medicare contribution tax on net investment income, (iii) the U.S. federal gift or estate tax, or any tax considerations
under state, local or non-U.S. laws or U.S. federal laws other than those pertaining to the U.S. federal income tax, or (iv) holders
of options or warrants to purchase Shares, similar rights to purchase Shares or restricted stock units.
For
purposes of this summary, the term “U.S. Holder” means a beneficial owner of Shares that, for U.S. federal income tax purposes,
is: (i) an individual who is a citizen or resident of the United States; (ii) a corporation, or an entity classified as a corporation,
created or organized under the laws of the United States, any state thereof or the District of Columbia; (iii) an estate, the income
of which is subject to U.S. federal income tax regardless of its source; or (iv) a trust, if (A) a United States court is able to exercise
primary supervision over the trust’s administration and one or more U.S. persons (within the meaning of Section 7701(a)(30) of
the Code) have authority to control all of the trust’s substantial decisions or (B) the trust has validly elected to be treated
as a U.S. person for U.S. federal income tax purposes.
For
purposes of this summary, the term “Non-U.S. Holder” means a beneficial owner of Shares that is neither a U.S. Holder nor
a partnership (or any other entity or arrangement classified as a partnership for U.S. federal income tax purposes).
The
term “Holder” or “Holders” means a U.S. Holder or a Non-U.S. Holder.
If
a partnership, or another entity or arrangement classified as a partnership for U.S. federal income tax purposes, is the beneficial owner
of Shares, the tax treatment of its partners or members generally will depend upon the status of the partner or member and the partnership’s
activities. Accordingly, partnerships or other entities or arrangements classified as partnerships for U.S. federal income tax purposes
that beneficially own Shares, and partners or members in those partnerships or other entities or arrangements, are urged to consult their
own tax advisors regarding the specific U.S. federal income tax consequences to them of the Offer and the Merger.
This
summary is for general informational purposes only and is not tax advice. Because individual circumstances may differ, each Holder should
consult its own tax advisor as to the applicability and effect of the rules summarized below and the particular tax consequences of the
Offer and the Merger to it, including the application and effect of the alternative minimum tax, the Medicare contribution tax on net
investment income, and any U.S. federal, state, local and non-U.S. tax laws.
Tax
Considerations for U.S. Holders
The
exchange of Shares for cash pursuant to the Offer or the Merger will generally be a taxable transaction for U.S. federal income tax purposes.
A
U.S. Holder who sells Shares pursuant to the Offer or receives cash in exchange for Shares pursuant to the Merger generally will recognize
capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between (i) the amount of cash
received (determined before deduction of any applicable withholding taxes) and (ii) the U.S. Holder’s adjusted tax basis in the
Shares sold pursuant to the Offer or converted pursuant to the Merger. A U.S. Holder’s adjusted tax basis will generally equal
the price the U.S. Holder paid for such Shares. Any capital gain or loss recognized will be long-term capital gain or loss if the U.S.
Holder’s holding period for such Shares exceeds one year as of the closing of the Offer or the Effective Time, as the case may
be. Long-term capital gains recognized by certain non-corporate U.S. Holders, including individuals, are currently taxed at preferential
U.S. federal income tax rates. The deductibility of capital losses is subject to limitations. Gain or loss generally will be determined
separately for each block of Shares (that is, Shares acquired at the same cost in a single transaction) tendered pursuant to the Offer
or exchanged pursuant to the Merger.
Tax
Considerations for Non-U.S. Holders
Subject
to the discussion under “Information Reporting and Backup Withholding” below, any
gain realized by a Non-U.S. Holder upon exchange of Shares pursuant to the Offer or the Merger generally will not be subject to U.S.
federal income tax unless (i) such gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the
United States (and, if required by an applicable tax treaty, is attributable to a permanent establishment maintained by such Non-U.S.
Holder in the United States), in which case the Non-U.S. Holder generally will be taxed on a net income basis generally in the same manner
as a U.S. Holder, except that if the Non-U.S. Holder is a foreign corporation, an additional branch profits tax may apply at a rate of
30% (or a lower applicable treaty rate), or (ii) such Non-U.S. Holder is an individual who is present in the United States for 183 days
or more in the taxable year of the closing of the Offer or the Effective Time, as the case may be, and certain other conditions are met,
in which case such Non-U.S. Holder generally will be subject to a 30% U.S. federal income tax (or a lower rate under an applicable income
tax treaty) on such gain.
Information
Reporting and Backup Withholding
Information
reporting generally will apply to payments to a Holder pursuant to the Offer or the Merger, unless such Holder is an entity that is exempt
from information reporting and, when required, properly demonstrates its eligibility for exemption. Payments to a Holder pursuant to
the Offer or the Merger generally will also be subject to backup withholding (currently, at a rate of twenty-four percent (24%)), unless
(i) in the case of a U.S. Holder, such U.S. Holder provides the appropriate documentation (generally, IRS Form W-9) to the applicable
withholding agent certifying that, among other things, its taxpayer identification number is correct, or otherwise establishes an exemption
and (ii) in the case of a Non-U.S. Holder, such Non-U.S. Holder certifies under penalties of perjury that it is not a U.S. person (generally
by providing an IRS Form W-8BEN, IRS Form W-8BEN-E or other applicable IRS Form W-8) or otherwise establishes an exemption. Non-U.S.
Holders are urged to consult their own tax advisors to determine which IRS Form W-8 is appropriate.
Certain
Holders (including corporations) generally are not subject to backup withholding. Backup withholding is not an additional tax. Any amounts
withheld under the backup withholding rules generally will be allowed as a refund or a credit against a U.S. Holder’s U.S. federal
income tax liability if the required information is properly and timely furnished by such U.S. Holder to the IRS.
THE
FOREGOING DOES NOT SUMMARIZE ALL ASPECTS OF U.S. FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO PARTICULAR HOLDERS. HOLDERS ARE URGED
TO CONSULT THEIR OWN TAX ADVISOR REGARDING THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE OFFER OR THE MERGER IN LIGHT OF THEIR PARTICULAR
CIRCUMSTANCES, INCLUDING THE APPLICATION AND EFFECT OF ANY FEDERAL, STATE, LOCAL, NON-UNITED STATES, OR OTHER LAWS.
The
Shares are traded on the NYSE under the symbol “OSG.” OSG has advised Parent that, as of the close of business on June 6,
2024, there were: (i) 72,030,977 Shares issued and outstanding, (ii) 1,478,756 Shares issuable under outstanding Company Stock
Options, all of which were In-the-Money Options, (iii) 3,310,622 Shares issuable under outstanding Company RSU Awards (determined at
the maximum level of performance for any Company RSU Award subject to performance-based vesting conditions for which the applicable performance
period had not ended as of June 6, 2024); and (iv) outstanding Company Warrants to acquire a total of 507,535 Shares. The following
table sets forth, for the fiscal quarters indicated, the high and low closing sales prices per Share on the NYSE with respect to the
fiscal years ended December 31, 2023 and December 31, 2022 and the current fiscal year.
| Current
Fiscal Year | |
High | | |
Low | |
| First Quarter | |
$ | 6.61 | | |
$ | 5.11 | |
| Second Quarter (through June 7, 2024) | |
| 8.46 | | |
| 5.85 | |
| Fiscal
Year Ended December 31, 2023 | |
| High | | |
| Low | |
| First Quarter | |
$ | 3.91 | | |
$ | 2.86 | |
| Second Quarter | |
| 4.43 | | |
| 3.49 | |
| Third Quarter | |
| 4.40 | | |
| 3.97 | |
| Fourth Quarter | |
| 5.43 | | |
| 4.29 | |
| Fiscal
Year Ended December 31, 2022 | |
| High | | |
| Low | |
| First Quarter | |
$ | 2.19 | | |
$ | 1.73 | |
| Second Quarter | |
| 2.40 | | |
| 2.00 | |
| Third Quarter | |
| 3.38 | | |
| 1.96 | |
| Fourth Quarter | |
| 3.04 | | |
| 2.75 | |
On
June 7, 2024, the last full trading day prior to the date of this Offer to Purchase, the reported closing price per Share on the NYSE
during normal trading hours was $8.43 per Share, which is lower than the Offer Price of $8.50 per Share.
| 7. | CERTAIN
INFORMATION CONCERNING OSG. |
The
following description of OSG and its business was provided by OSG; for further information on OSG’s business, see OSG’s Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 2024, filed with the SEC on May 10, 2024, and OSG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 11, 2024, as amended by that
certain Amendment No. 1 to the Annual Report, filed with the SEC on March 25, 2024 (the “Annual Report”).
OSG,
and its wholly owned subsidiaries, own and operate a fleet of oceangoing vessels engaged in the transportation of crude oil, petroleum,
and renewable transportation fuels in the U.S. Flag trade. The address of OSG’s principal executive office is 302 Knights Run Avenue,
Suite 1200, Tampa, Florida 33602. The business telephone number of OSG’s principal executive office is (813) 209-0600.
In
connection with our due diligence review of OSG, OSG made available to us certain financial information described in Item 4 under the
heading “The Solicitation or Recommendation-Certain Financial Projections” of the Schedule 14D-9.
Available
Information. The Shares are registered under the Exchange Act. Accordingly, OSG is subject to the information and reporting requirements
of the Exchange Act and in accordance therewith is obligated to file reports and other information with the SEC relating to its business,
financial condition and other matters. Certain information, as of particular dates, concerning OSG’s business, principal physical
properties, capital structure, material pending litigation, operating results, financial condition, directors and officers (and their
compensation, including Company Stock Options and Company RSU Awards), the principal holders of OSG’s securities, any material
interests of such persons in transactions with OSG, and other matters is required to be disclosed in proxy statements and periodic reports
distributed to the OSG Stockholders and filed with the SEC. The SEC maintains an Internet website that contains reports, proxy statements
and other information about issuers, such as OSG, who file electronically with the SEC. The address of that site is https://www.sec.gov.
OSG also maintains an Internet website at https://www.osg.com (see Investors page). The information contained in, accessible from or
connected to OSG’s website is not incorporated into, or otherwise a part of, this Offer to Purchase or any of OSG’s filings
with the SEC. The website addresses referred to in this paragraph are inactive text references and are not intended to be actual links
to the websites.
Sources
of Information. Except as otherwise set forth herein, the information concerning OSG contained in this Offer to Purchase has been
based upon publicly available documents and records on file with the SEC, other public sources and information provided by OSG. Although
we have no knowledge that any such information contains any misstatements or omissions, none of Parent, Purchaser or any of their respective
affiliates or assigns, the Information Agent or the Depositary and Paying Agent assumes responsibility for the accuracy or completeness
of the information concerning OSG contained in such documents and records or for any failure by OSG to disclose events which may have
occurred or may affect the significance or accuracy of any such information.
| 8. | CERTAIN
INFORMATION CONCERNING PARENT AND PURCHASER. |
General.
Purchaser is a Delaware corporation with its business address at Seahawk MergeCo., Inc., c/o Saltchuk Resources, Inc., 450 Alaskan Way
South, Suite 708, Seattle, Washington 98104. The business telephone number of Purchaser is (206) 652-1111. Purchaser is a wholly owned
subsidiary of Parent. Purchaser was formed for the purpose of making a tender offer for any and all of the outstanding Shares of OSG
and has not engaged, and does not expect to engage, in any business other than in connection with the Offer and the Merger.
Parent
is a Washington corporation with its business address at Saltchuk Resources, Inc., 450 Alaskan Way South, Suite 708, Seattle, Washington
98104. The business telephone number of Parent is (206) 652-1111. Parent, through its subsidiary business units and operating companies,
provides air cargo, marine services, energy distribution, domestic shipping, international shipping and logistics services.
The
name, citizenship, business address, business phone number, present principal occupation or employment and past material occupation,
positions, offices or employment for at least the last five years for each director and each of the executive officers of the Purchaser
Parties, as applicable, and certain other information are set forth in Schedule A hereto. We refer to the individuals and entities listed
in Schedule A (excluding the Parent and Purchaser) as the “Item 3 Persons.”
During
the last five years, none of the Purchaser Parties or, to the knowledge of the Purchaser Parties, any of the Item 3 Persons: (i) has
been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors); or (ii) was a party to any judicial
or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree
or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws,
or a finding of any violation of such laws.
Certain
Relationships and Related Person Transactions
As
of May 19, 2024, Parent owned 15,203,554 Shares of OSG, or approximately 21.1% of the outstanding Shares of OSG, based on 72,030,977
Shares outstanding as of May 16, 2024, excluding the Company Warrants exercisable for 507,535 Shares as of May 16, 2024. Except as set
forth in the preceding sentences or as otherwise described in this Offer to Purchase: none of Parent, Purchaser, any majority-owned subsidiary
of Parent or Purchaser, or, to the knowledge of Parent and Purchaser, any of the Item 3 Persons or any associates of any of the foregoing
(A) beneficially owns or has any right to acquire, directly or indirectly, any Shares or (B) has effected any transaction in the Shares
during the past 60 days. As discussed in “The Tender Offer—Section 10. Background of the Offer; Contacts with OSG,”
any Shares owned directly or indirectly by Parent or Purchaser as of immediately prior to the Effective Time will be cancelled in the
Merger for no consideration. There are no restrictions on any OSG Stockholder with respect to transferring or disposing of any such Shares
prior to the Effective Time.
Except
as set forth in this Offer to Purchase, none of Parent or Purchaser or, to the knowledge of Parent and Purchaser, any of the Item 3 Persons,
has had any present or proposed material agreement, arrangement, understanding or relationship with OSG or any of its executive officers,
directors, controlling persons or subsidiaries that is required to be reported under the rules and regulations of the SEC applicable
to the Offer. Except as set forth in this Offer to Purchase, there have been no contacts, negotiations or transactions between Parent,
Purchaser or any of their subsidiaries or, to the knowledge of Parent and Purchaser, any of the Item 3 Persons, on the one hand, and
OSG or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of assets during the past two years.
Available
Information. Pursuant to Rule 14d-3 under the Exchange Act, Parent and Purchaser filed with the SEC a Tender Offer Statement on Schedule
TO (as amended through the date hereof, the “Schedule TO”), of which this Offer to Purchase forms a part, and exhibits
to the Schedule TO. The Schedule TO and the exhibits thereto, as well as other information filed by Parent and Purchaser with the SEC,
are available at the SEC’s website on the Internet at www.sec.gov. Requests for additional copies of this Offer to Purchase,
the Letter of Transmittal and other tender offer materials may be directed to the Information Agent at its address and telephone number
set forth on the back cover of this Offer to Purchase.
| 9. | SOURCE
AND AMOUNT OF FUNDS. |
The
Offer is not conditioned upon Parent’s or Purchaser’s ability to finance the purchase of Shares pursuant to the Offer. Parent
and Purchaser estimate that the total amount of funds required from Parent and Purchaser to purchase all Shares pursuant to the Offer,
consummate the Merger and otherwise satisfy their respective obligations under the Merger Agreement (including payments for the settlement
and cancellation of Company Stock Options, Company RSU Awards and Company Warrants, repayment of OSG indebtedness and payment of associated
breakage costs, payment of retention and other bonus payments to OSG employees) and pay associated estimated fees and expenses is approximately
$948 million. Parent and Purchaser expect to fund such payments from a combination of Parent’s and OSG’s available cash (subject
to the requirement under the Merger Agreement that OSG have cash on its consolidated balance sheet as of the Closing of $25.0 million),
borrowings under Parent’s existing credit facilities and, if completed prior to the Effective Time, proceeds from an offering of
Parent’s senior notes, each of which is described below. To the extent required, Parent will provide Purchaser with sufficient
funds to satisfy Purchaser’s obligations. No alternative arrangements or alternative financing plans have been made.
The
summaries below do not purport to be complete. The summary of the Parent Credit Agreement is qualified in its entirety by reference to
the full text of the Parent Credit Agreement (as defined below), a copy of which is filed as Exhibit (b)(1) to the Schedule TO, which
is incorporated in this document by reference. Stockholders of OSG and other interested parties should read the full agreement for a
more complete description of the provisions summarized below.
Parent
and certain of its subsidiaries are parties to Credit Agreement, dated May 21, 2024 (the “Parent Credit Agreement”),
with Bank of America, N.A., as Administrative Agent, L/C Issuer and a Lender, Wells Fargo Bank, National Association, as Swing Line Lender
and a Lender, U.S. Bank National Association, as a Lender, JPMorgan Chase Bank, N.A., as a Lender, PNC Bank, National Association, as
a Lender, Zions Bancorporation, N.A. d/b/a The Commerce Bank of Washington, as a Lender, Washington Federal Bank, as a Lender, First
Hawaiian Bank, as a Lender, and Bank of Hawaii, as a Lender (each, a “Lender”).
The
Parent Credit Agreement provides for (a) an $800 million revolving credit facility, (b) a $400 million delayed draw term loan “A-1”
facility, and (c) a $180 million delayed draw term loan “A-2” facility. The term loan “A-2” was drawn on May
21, 2024. The maturity date for the revolving credit facility and $400 million delayed draw term loan “A-1” facility is May
21, 2029. The maturity date for the $180 million delayed draw term loan “A-2” facility is the earlier of November 21, 2024
and the date on which the closing of Parent’s planned offering of approximately $250 million of senior unsecured notes (as discussed
below) occurs. Parent’s obligations under the Parent Credit Agreement are unsecured, but are guaranteed by certain subsidiaries
of Parent.
Borrowings
under the Parent Credit Agreement may take the form of Base Rate Loans, Term SOFR Loans, or SOFR Daily Floating Rate Loans (as each such
term is defined in the Parent Credit Agreement). Base Rate Loans bear interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate (as defined in the Parent Credit Agreement and discussed below) plus the Applicable
Rate (as defined in the Parent Credit Agreement and discussed below). Term SOFR Loans bear interest on the outstanding principal amount
thereof for each Interest Period (as defined in the Parent Credit Agreement) at a rate per annum equal to Term SOFR (as defined in the
Parent Credit Agreement) for such Interest Period plus a SOFR Adjustment of 0.10% plus the Applicable Rate. SOFR Daily Floating
Rate Loans bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to
the SOFR Daily Floating Rate plus a SOFR Adjustment of 0.10% plus the Applicable Rate.
The
Applicable Rate is based upon Parent’s Consolidated Net Leverage Ratio (as defined in the Parent Credit Agreement) for the applicable
period. For Base Rate Loans, the Applicable Rate ranges from 0.375% to 1.375%. For Term SOFR Loans and SOFR Daily Floating Rate Loans,
the Applicable Rate ranges from 1.375% to 2.375%.
The
Base Rate is, for any day, a fluctuating rate of interest per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b)
the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate”,
and (c) Term SOFR plus 1.00%, subject to the interest rate floors set forth therein (provided, that if the Base Rate calculation results
in an amount less than zero, the Base Rate is deemed to be zero).
All
borrowings under the Parent Credit Agreement may be prepaid at any time or from time to time without premium or penalty.
The
Lenders’ obligations to make Commitments (as defined in the Parent Credit Agreement) available under the Parent Credit Agreement
are subject to several conditions customary for a credit agreement of this type, each as set forth in the Parent Credit Agreement, which
include, among others, the accuracy of representations and warranties of Parent and its subsidiaries party to the Parent Credit Agreement
(which are deemed to be restated on the date of each Credit Extension (as defined in the Parent Credit Agreement) and which relate to,
among other things, existence, qualification and power, authorization and non-contravention, compliance with applicable laws, solvency
and other matters customary for this type of credit agreement), the non-existence of any Default (as defined in the Parent Credit Agreement),
and, solely with respect to the borrowing of the delayed draw term loan “A-1,” Parent’s pro-forma compliance with each
financial covenant set forth in the Parent Credit Agreement.
In
addition, Parent is engaged in a private offering (the “Note Offering”) of approximately $250 million in senior unsecured
notes (the “Senior Notes”) to institutional investors. The total amount of the Note Offering is subject to increase
or decrease at Parent’s option. The Senior Notes would feature 7-, 10- and/or 12-year bullet maturities, with pricing to be determined
at the time of circle and calculated at a spread above the yield on the applicable U.S. Treasury Note as shown on Bloomberg PX1. The
Senior Notes would be prepayable in whole or in part at any time, and in the event of prepayment, Parent would pay accrued interest on
the principal amount of the Senior Notes subject to optional prepayment to the date set for prepayment, plus the greater of (a) the outstanding
principal amount of the Senior Notes subject to optional prepayment or (b) the present value of the remaining principal payments and
interest payments on the Senior Notes (or portions thereof) subject to optional prepayment, discounted at a rate equal to the sum of
50 basis points plus the yield of the U.S. Treasury securities with maturities corresponding to the scheduled dates of principal and
interest payments calculated at the time of the prepayment. The Senior Notes would be issued pursuant to a Master Note Purchase Agreement
(the “Master Note Purchase Agreement”) containing customary representations and warranties, customary affirmative
and covenants, customary events of default, and financial covenants substantially identical to the financial covenants set forth in the
Parent Credit Agreement. Because the Note Offering is ongoing as of the date of this Offer to Purchase, both the specific terms and conditions
of the Senior Notes and whether the Note Offering will be consummated are undetermined and cannot be guaranteed; however, Parent’s
ability to finance the purchase of the Shares pursuant to the Offer and to consummate the Merger is not affected by or dependent on the
consummation of the Note Offering or the specific terms and conditions of the Senior Notes.
| 10. | BACKGROUND
OF THE OFFER; CONTACTS WITH OSG. |
The
following is a description of contacts between representatives of Parent and Purchaser with representatives of OSG that resulted in the
execution of the Merger Agreement and the agreements related to the Offer. For a review of OSG’s activities relating to these contacts,
please refer to OSG’s Schedule 14D-9 being mailed to the OSG Stockholders with this Offer to Purchase. For additional information
regarding the OSG Board’s process and the strategic alternatives that OSG considered, please refer to OSG’s Schedule 14D-9
filed with the SEC on the date hereof.
Background
of the Offer and the Merger.
On
June 30, 2021, Saltchuk Holdings, Inc. (“Saltchuk Holdings”), the parent company of Parent, the holder of 15,203,554
Shares, then representing approximately 17.5% of all outstanding Shares, submitted to the OSG Board a written, unsolicited non-binding
proposal pursuant to which Saltchuk Holdings proposed to acquire all of the outstanding Shares of OSG not already owned by Parent for
$3.00 per Share in cash. On July 2, 2021, Parent filed an amendment to its Schedule 13D disclosing the submission of that proposal. Between
June 2021 and September 2021, Parent and OSG engaged in discussions concerning a possible transaction. In September 2021, Parent notified
OSG that, in light of continued uncertainty with respect to the pace and trajectory of the global
pandemic recovery and its effects on OSG’s business and operations, Parent was suspending discussions with OSG regarding a possible
transaction. On September 7, 2021, Parent filed an amendment to its Schedule 13D disclosing that notification.
On
January 15, 2024, Mark N. Tabbutt, the President and Chairman of Saltchuk Holdings and Parent, called Samuel H. Norton, the Chief Executive
Officer of the OSG, to indicate that Parent was considering submitting an indication of interest in pursuing a potential acquisition
of OSG. No transaction proposal was made by Parent or its representatives.
On
January 23, 2024, representatives of BDT & MSD Partners, LLC (“BDT & MSD”), Parent’s financial advisor,
and Evercore Group L.L.C. (“Evercore”), OSG’s financial advisor, discussed Parent’s potential interest
in resuming discussions regarding a potential acquisition transaction involving OSG.
On
January 26, 2024, Mr. Tabbutt contacted Mr. Norton to inform him that Parent would be sending a letter to OSG with respect to a potential
acquisition of the Shares of OSG. Later on the same day, Saltchuk Holdings, on behalf of Parent, submitted to the OSG Board a written,
unsolicited non-binding indication of interest in exploring and evaluating a potential acquisition of all shares of OSG not already owned
by Parent in a going-private transaction (the “Board Letter”). In the Board Letter, Saltchuk Holdings proposed to
acquire all outstanding shares of OSG that Parent did not already own at a price of $6.25 per share in cash, representing a premium of
5.9% to the closing price per share of $5.90 as of January 26, 2024 (the last closing price per share before the Board Letter was publicly
announced), a 21.9% premium above the trailing three-month volume weighted average stock price of $5.13 and a 30.2% premium to the most
recent privately negotiated share repurchase by OSG consummated on November 10, 2023 of $4.80.
On
January 29, 2024, Parent filed an amendment to its Schedule 13D disclosing the Board Letter and Parent’s proposal to acquire all
outstanding Shares not already owned by Parent.
On
February 14, 2024, representatives of Evercore informed representatives of BDT & MSD that the OSG Board had held a preliminary meeting
regarding the proposal described in the Board Letter and that the OSG Board was interested in engaging in discussions with Parent and
would propose a non-disclosure and standstill agreement for consideration by Parent.
On
February 16, 2024, representatives of Evercore provided to representatives of BDT & MSD a draft non-disclosure agreement that would
establish the non-disclosure and other terms (including a standstill obligation of Parent) regarding any confidential information shared
by OSG with Parent in connection with a potential transaction between OSG and Parent (the “Confidentiality Agreement”).
Between
February 16, 2024 and February 27, 2024, representatives of Fried, Frank, Harris, Shriver & Jacobson LLP (“Fried Frank”),
counsel to OSG, and representatives of K&L Gates LLP (“K&L Gates”), counsel to Parent, exchanged drafts of
the Confidentiality Agreement and participated in multiple discussions regarding the Confidentiality Agreement.
On
February 27, 2024, Parent entered into the Confidentiality Agreement with OSG and, on the same day, representatives of Parent and K&L
Gates were given access to a virtual data room for purposes of engaging in a business and legal due diligence review of OSG.
On
February 28, 2024, OSG provided certain material due diligence information to Parent and its representatives via the virtual data room,
including a long-term financial model for OSG. On the same day, representatives of BDT & MSD and Evercore discussed timing with respect
to the transaction process and scheduling of anticipated due diligence and management meetings.
On
March 21, 2024, members of management of Parent met in person with members of management of OSG to review OSG’s business and performance.
On
March 22, 2024, Mr. Tabbutt met in person with Mr. Norton, during which Mr. Tabbutt discussed the operations and governance of the Saltchuk
family of companies and conveyed to Mr. Norton that the continuity of OSG’s existing management team after a potential transaction
was an important factor in Parent’s evaluation of a potential acquisition of OSG. Mr. Norton indicated that he would be open to,
and believed the vast majority of OSG’s management team would be open to, continuing serving as executives of OSG following a transaction
with Parent.
On
March 25, 2024, representatives of Evercore provided to BDT & MSD a letter outlining a formal process for the submission of written,
non-binding proposals with respect to a potential acquisition of OSG, with indications of interest to be submitted by April 10, 2024.
On
April 10, 2024, representatives of BDT & MSD submitted to Evercore, on behalf of Parent, a written, non-binding proposal to acquire
all outstanding Shares not already owned by Parent at a price of $6.55 per share in cash, representing a premium of 11% to the closing
price per share of $5.90 as of January 26, 2024 (the last closing price per share before the Board Letter was publicly announced) and
proposing a period of 30 days in which OSG would negotiate exclusively with Parent with respect to the transactions contemplated by the
updated proposal.
On
April 16, 2024, representatives of BDT & MSD and Evercore discussed OSG’s feedback on Parent’s April 10, 2024 proposal
and Evercore provided guidance regarding a potential subsequent proposal by Parent.
On
April 23, 2024, representatives of BDT & MSD delivered to Evercore a written, non-binding updated proposal pursuant to which Parent
would acquire all outstanding shares of OSG that it did not already own at a price of $8.50 per share in cash and proposing a period
of three weeks in which OSG would negotiate exclusively with Parent with respect to the transactions contemplated by the updated proposal
(the “Revised Proposal”). On the same day, representatives of BDT & MSD and Evercore discussed OSG’s feedback
on the Revised Proposal and next steps in the process.
On
April 24, 2024, representatives of Evercore informed representatives of BDT & MSD that the OSG Board desired to continue to engage
with Parent with respect to a potential transaction and discussed next steps. On the same day, representatives of Fried Frank provided
an initial draft of the Merger Agreement to representatives of K&L Gates. The draft Merger Agreement contemplated a “two step”
transaction of a tender offer for all Shares not owned by Parent, followed by a merger between the purchaser entity and OSG. The draft
Merger Agreement provided for, among other things, a termination fee, payable to Parent in certain circumstances, equal to 2.75% of total
equity value.
On
April 26, 2024, representatives of Fried Frank and K&L Gates discussed Parent’s key issues with the terms of the proposed draft
Merger Agreement. Later on the same day, OSG entered into an exclusivity agreement with Parent providing for an exclusivity period of
three weeks in order for Parent to complete its due diligence and enter into a definitive merger agreement.
On
April 26, 2024, following the entry into the exclusivity arrangement between Parent and OSG, Mr. Tabbutt and Mr. Norton exchanged messages
regarding scheduling a meeting to discuss at a high level the going forward arrangements with members of management of OSG.
On
May 1, 2024, members of management of Parent met in person with Mr. Norton to discuss at a high level the going forward governance of
OSG following the consummation of a potential transaction and Parent’s general philosophy regarding compensation matters. Prior
to this meeting, representatives of Fried Frank had indicated to representatives of K&L Gates that Mr. Norton had pre-cleared with
representatives of the OSG Board his attendance at the meeting and the topics to be discussed with members of management of Parent.
On
May 5, 2024, representatives of K&L Gates provided a revised draft of the Merger Agreement to representatives of Fried Frank, which
provided for, among other things, a termination fee payable to Parent in certain circumstances equal to 3.0% of total equity value.
Between
May 5, 2024 and May 19, 2024, representatives of Fried Frank and K&L Gates exchanged drafts of the Merger Agreement and participated
in multiple discussions regarding the draft Merger Agreement. Representatives of Parent and its advisors continued their due diligence
review of OSG during this time. On May 7, 2024, representatives of Fried Frank provided a revised draft of the Merger Agreement to representatives
of K&L Gates, providing for, among other things, acceptance of Parent’s proposed termination fee payable in certain circumstances
equal to 3.0% of total equity value.
On
May 15, 2024, representatives of Parent indicated to OSG that Parent would require certain members of management to enter into waiver
agreements concurrently with the execution of the definitive merger agreement, under which those members of management would waive their
right to claim that the consummation of the proposed transaction constituted a “good reason” termination under their employment
arrangements (the “Good Reason Waivers”). The Good Reason Waivers are summarized in more detail below (see “The
Tender Offer—Section 11. Summary of the Merger Agreement and Certain Other Agreements—Summary of the Good Reason Waivers.”).
On
May 17, 2024, representatives of Fried Frank provided representatives of K&L Gates with an initial draft of the form of Good Reason
Waiver. Between May 17, 2024 and May 19, 2024, representatives of Fried Frank and K&L Gates exchanged drafts of the form of Good
Reason Waiver and participated in multiple discussions regarding the agreements. In addition, during this time members of management
of Parent and Mr. Norton engaged in conversations regarding the terms of the form of Good Reason Waiver.
On
May 17, 2024, Parent’s three-week exclusivity period expired and, at the request of Parent, OSG agreed to extend the exclusivity
period through May 19, 2024.
On
May 19, 2024, representatives of K&L Gates and Fried Frank exchanged drafts of the Merger Agreement, the Company Disclosure Schedule
and the Parent Disclosure Schedule and reached agreement with respect to open issues in each document. That evening, the OSG Board held
a meeting, during which Evercore rendered to the OSG Board Evercore’s oral opinion which was, following execution of the definitive
documentation in respect of the proposed transaction, subsequently confirmed by delivery of a written opinion from Evercore, dated as
of May 19, 2024, to the effect that, as of that date and subject to the limitations, qualifications and assumptions set forth in the
written opinion, the $8.50 in cash per Share to be received by the holders of Class A Common Stock in the Offer and the Merger was fair,
from a financial point of view, to such holders, other than Parent and its affiliates. At the conclusion of the meeting, the OSG Board
unanimously authorized and approved the Merger Agreement and the transactions contemplated by the Merger Agreement. Later that evening,
following the OSG Board meeting, the Merger Agreement and related transaction documents, including the Good Reason Waivers, were executed.
On
May 20, 2024, prior to the opening of trading of OSG’s shares on the NYSE, OSG and Parent issued a joint press release announcing
the execution of the Merger Agreement. On the same day, following the closing of trading of OSG’s shares on the NYSE, Parent filed
an amendment to its Schedule 13D disclosing execution of the Merger Agreement.
| 11. | SUMMARY
OF THE MERGER AGREEMENT AND CERTAIN OTHER AGREEMENTS. |
Summary
of the Merger Agreement.
The
following summary of certain provisions of the Merger Agreement and all other provisions of the Merger Agreement discussed herein are
qualified by reference to the Merger Agreement itself, which is incorporated herein by reference. The Merger Agreement was filed as Exhibit
2.1 to the Current Report on Form 8-K that OSG filed with the SEC on May 20, 2024. The Merger Agreement may be examined and copies may
be obtained at the places and in the manner set forth in “The Tender Offer—Section 8. Certain Information Concerning Parent
and Purchaser.” Stockholders and other interested parties should read the Merger Agreement for a more complete description
of the provisions summarized below. Capitalized terms used herein and not otherwise defined have the respective meanings set forth in
the Merger Agreement.
The
Merger Agreement has been included to provide investors and security holders with information regarding the terms of the Transactions.
It is not intended to provide any other factual information about OSG, Parent, Purchaser, or their respective subsidiaries and affiliates.
The Merger Agreement contains representations and warranties by OSG, on the one hand, and Parent and Purchaser, on the other hand, made
solely for the benefit of the other. The assertions embodied in those representations and warranties are subject to qualifications and
limitations agreed to by the respective parties in negotiating the terms of the Merger Agreement, including information in confidential
disclosure schedules of OSG delivered in connection with the signing of the Merger Agreement (the “Company Disclosure Schedule”).
Moreover, certain representations and warranties in the Merger Agreement were made as of a specified date, may be subject to a contractual
standard of materiality different from what might be viewed as material to investors, or may have been used for the purpose of allocating
risk between OSG, on the one hand, and Parent and Purchaser, on the other hand, rather than establishing matters as facts. Accordingly,
the representations and warranties in the Merger Agreement should not be relied on by any persons as characterizations of the actual
state of facts about OSG, Parent, Purchaser or their respective subsidiaries or affiliates at the time they were made or otherwise. In
addition, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement,
which subsequent information may or may not be fully reflected in OSG’s public disclosures.
The
Offer. The Merger Agreement provides that Purchaser will (or Parent will cause Purchaser to) commence the Offer as promptly as practicable,
but in no event later than fifteen (15) business days after the date of the Merger Agreement. Subject to the satisfaction of the Minimum
Condition and the other Offer Conditions that are described in “The Tender Offer—Section 15. Conditions of the Offer,”
Purchaser will (and Parent will cause Purchaser to) promptly, and in no event later than 9:00 a.m., Eastern Time, one (1) business day
after the Expiration Date, accept for payment all Shares validly tendered (and not validly withdrawn) pursuant to the Offer and, as promptly
as practicable after the Offer Acceptance Time (and in any event within two business days thereafter) pay for such Shares. If the Offer
is consummated, each OSG Stockholder will receive the Offer Price for each Share validly tendered and not properly withdrawn by such
stockholder prior to the Expiration Date, to such stockholder in cash, without interest thereon and subject to any withholding taxes.
The Offer is initially scheduled to expire at one minute after 11:59 p.m. New York City time, at the end of the day on July 9, 2024,
unless extended and re-extended as described below.
Pursuant
to the Merger Agreement, Purchaser has reserved the right, to the extent permitted by applicable law, to (i) increase the amount of cash
constituting the Offer Price and/or (ii) waive any Offer Condition, except that, without the prior written consent of OSG, Purchaser
may not (a) amend or waive the Minimum Condition; (b) decrease the Offer Price; or (c) make any change to the Offer that (1) changes
the form of consideration to be delivered by Purchaser pursuant to the Offer; (2) decreases the number of Shares sought to be purchased
by Purchaser in the Offer; (3) imposes conditions or requirements to the Offer in addition to the existing Offer Conditions; (4) except
as provided in the Merger Agreement with respect to the extension of the Offer, terminates the Offer or accelerates, extends or otherwise
changes the Expiration Date of the Offer; (5) otherwise amends or modifies any of the terms of the Offer in a manner that adversely affects
any holder of Shares or that would, individually or in the aggregate, reasonably be expected to prevent or delay the consummation of
the Offer or prevent, delay or impair the ability of Parent or Purchaser to consummate the Offer or the Merger; or (6) provides for any
“subsequent offering period” within the meaning of Rule 14d-11 promulgated under the Exchange Act.
Extensions
of the Offer. The Merger Agreement provides that, subject to the parties’ termination rights under the Merger Agreement, (A)
(i) if, as of any then-scheduled Expiration Date, any Offer Condition is not satisfied and has not been waived by Purchaser or Parent,
to the extent waivable by Purchaser or Parent, then Purchaser may, in its discretion, and without the consent of OSG or any other person,
extend the Offer on up to two (2) occasions, for an additional period of up to ten (10) business days (as determined as set forth in
Rule 14d-1(g)(3) under the Exchange Act) per extension (or such longer period as the parties may mutually agree in writing), to permit
such Offer Condition to be satisfied, and (ii) Purchaser shall, and Parent shall cause Purchaser to, extend the Offer from time to time
for the minimum period required by any law, any interpretation or position of the SEC, the staff thereof or any rules and regulations
of the NYSE applicable to the Offer, and (B) if, as of any then-scheduled Expiration Date, any Offer Condition is not satisfied and has
not been waived, OSG may require Purchaser to extend the Offer on one or more occasions, for an additional period of up to ten (10) business
days (as determined as set forth in Rule 14d-1(g)(3) under the Exchange Act) per extension (or such longer period as the parties may
mutually agree in writing), to permit such Offer Condition to be satisfied (provided that (x) in no event shall Purchaser be required
to extend the Offer beyond the valid termination of the Merger Agreement or beyond February 19, 2025 and (y) in the event that the Minimum
Condition is the only Offer Condition not satisfied or waived (other than the Offer Conditions that by their nature are only satisfied
as of the Offer Acceptance Time), OSG may not require Purchaser to extend the Offer on more than five (5) such occasions of ten (10)
business days (as determined as set forth in Rule 14d-1(g)(3) under the Exchange Act)). In no event shall Purchaser (X) be required to
extend the Offer beyond the valid termination of the Merger Agreement in compliance with the terms thereof or (Y) be permitted to extend
the Offer beyond the valid termination of the Merger Agreement in compliance with the terms thereof without the prior written consent
of OSG.
Termination
of the Offer. The Merger Agreement provides that Purchaser may not terminate or withdraw the Offer prior to the Expiration Date,
except in the event that the Merger Agreement is terminated pursuant to its terms. In such event that the Merger Agreement is terminated
pursuant to its terms, Purchaser will (and Parent will cause Purchaser to) immediately and unconditionally terminate the Offer, not acquire
any Shares pursuant thereto, and promptly (and in no event more than one (1) business day after such termination) return or cause any
depository acting on its behalf to return, in accordance with applicable law, all tendered Shares to the registered holders thereof.
Effects
of the Merger; Directors and Officers; Certificate of Incorporation; Bylaws. The Merger Agreement provides that, subject to the terms
and conditions of the Merger Agreement, at the Effective Time, Purchaser will be merged with and into OSG in accordance with the DGCL,
with OSG surviving the Merger as a wholly owned subsidiary of Parent, and the separate corporate existence of Purchaser will thereupon
cease. The Merger shall be governed by and effected pursuant to Section 251(h) of the DGCL.
At
the Effective Time, the board of directors of the Surviving Corporation will consist of the directors of Purchaser as of immediately
prior to the Effective Time, to hold office in accordance with applicable law until their successors are duly elected or appointed and
qualified. At the Effective Time, the officers of OSG as of immediately prior to the Effective Time will be the officers of the Surviving
Corporation, until their successors are duly appointed and qualified in accordance with applicable law. OSG has agreed to use its reasonable
best efforts to cause each director of OSG immediately prior to the Effective Time to execute and deliver a letter effectuating his or
her resignation as a director of OSG, conditioned upon and effective as of the Effective Time.
At
the Effective Time, subject to the applicable terms of the Merger Agreement, (i) the certificate of incorporation of OSG will be amended
and restated in its entirety to be in the form of the certificate of incorporation of Purchaser (except with respect to the name of the
Surviving Corporation and provisions naming the initial board of directors or the incorporator) as in effect immediately prior to the
Effective Time and, as so amended and restated, shall be the certificate of incorporation of the Surviving Corporation until thereafter
amended or restated as provided therein or by applicable law, and (ii) the bylaws of Purchaser, as in effect immediately prior to the
Effective Time, will become the bylaws of the Surviving Corporation, until thereafter amended as provided therein, in the certificate
of incorporation of the Surviving Corporation or by applicable law, except that the references to the name of Purchaser shall be replaced
with the name of the Surviving Corporation.
Closing
and Effective Time. The closing of the Merger (the “Closing”) will take place (i) as promptly as practicable following
the consummation (as defined in Section 251(h) of the DGCL) of the Offer, but in no event later than the date of the consummation of
the Offer, except if the conditions to the Closing shall not be satisfied or waived by such date, in which case on no later than the
first business day on which such conditions are satisfied or waived, or (ii) at another date, time, or place as agreed to in writing
prior to the Offer Acceptance Time between OSG and Parent. The date on which the Closing actually occurs is referred to herein as the
“Closing Date.” For purposes of the Merger Agreement, “business day” refers to any day except a Saturday
or Sunday or any other day on which commercial banks are required or authorized by law to close in New York, New York.
On
the Closing Date, OSG and Parent will cause the Merger to be consummated pursuant to the DGCL (including Section 251(h) thereof) by causing
a certificate of merger to be filed with the Secretary of State of the State of Delaware. The Merger will become effective at the time
when the certificate of merger has been duly filed with the Secretary of State of the State of Delaware, or at such later time as may
be agreed by Parent and OSG in writing prior to the Offer Acceptance Time and specified in the certificate of merger (the “Effective
Time”).
Conversion
of Shares at the Effective Time. At the Effective Time, and without any action required by any party to the Merger Agreement or any
OSG Stockholder, each Share issued and outstanding immediately prior to the Effective Time (other than Shares as to which the holder
thereof has properly and validly exercised their statutory rights of appraisal in accordance with Section 262 of the DGCL (the “Dissenting
Shares”) and the Shares that immediately prior to the Effective Time are held by OSG in treasury or by Parent, Purchaser (including
Shares irrevocably accepted for purchase by Purchaser in the Offer) or any other wholly owned subsidiary of Parent (the “Cancelled
Shares” and, together with the Dissenting Shares, the “Excluded Shares”)) will be cancelled and converted
into the right to receive the Merger Consideration. At the Effective Time, Cancelled Shares will be cancelled and no consideration paid
in exchange therefor.
Treatment
of Outstanding Company Equity Awards. Each Company Stock Option, whether vested or unvested, that is outstanding and unexercised
immediately prior to the Offer Acceptance Time shall, as of immediately prior to the Offer Acceptance Time, become fully vested and be
cancelled and converted into the right to receive an amount in cash qual to the product of (i) the excess, if any, of the Offer Price
over the exercise price per Share of such Company Stock Option, multiplied by (ii) the total number of Shares subject to such Company
Stock Option, subject to applicable tax withholding. Any Company Stock Option with an exercise price per Share greater than or equal
to the Offer Price will be cancelled from no consideration.
Parent
will not assume the obligation to deliver Shares with respect to any Company RSU Award outstanding as of immediately prior to the Offer
Acceptance Time (the Company RSU Awards, together with the Company Stock Options, the “Company Equity Awards”). Immediately
prior to the Offer Acceptance Time, without the need for any further action on the part of the holder thereof or any other person, each
Company RSU Award or portion thereof, that is not subject to one or more performance goals as of immediately prior to the Offer Acceptance
Time shall be cancelled and converted into the right to receive an amount in cash equal to the sum of (i) the product of (a) the Offer
Price, multiplied by (b) the total number of Shares subject to such Company RSU Award or portion thereof, as applicable, plus (ii) an
amount equal to any dividend equivalent rights then accrued with respect to such Company RSU Award or portion thereof, plus (iii) any
then-unpaid “cash award” granted in connection with OSG’s retention program in 2022, as set forth in the applicable
award agreement for such Company RSU Award, in each case subject to applicable tax withholding.
In
addition, immediately prior to the Offer Acceptance Time, without the need for any further action on the part of the holder thereof or
any other person:
| ● | Each
Company RSU Award or portion thereof, that is (i) subject to one or more performance goals
as of immediately prior to the Offer Acceptance Time, and (ii) for which the performance
period is originally scheduled to end in fiscal year 2024, shall be cancelled and converted
into the right to receive an amount in cash equal to the sum of (a) the product of (1) the
Offer Price, multiplied by (2) the total number of Shares subject to such Company RSU Award
or portion thereof, as applicable, plus (b) an amount equal to any dividend equivalent rights
then accrued with respect to such Company RSU Award or portion thereof, as applicable, subject
to applicable tax withholding. For purposes of this calculation, the number of Shares subject
to a Company RSU Award or portion thereof (and any related dividend equivalent rights), as
applicable, shall be determined based on the actual achievement of such performance goal(s),
measured through the Offer Acceptance Time, up to a maximum of 150% of the target level. |
| ● | Each
Company RSU Award or portion thereof, that is (i) subject to one or more performance goals
as of immediately prior to the Offer Acceptance Time, and (ii) for which the performance
period is originally scheduled to end in fiscal year 2025 or fiscal year 2026, shall be cancelled
and converted into the right to receive a Cash Award. Each Cash Award shall no longer be
subject to such performance goal(s), shall otherwise remain subject to the same terms, conditions,
restrictions and vesting arrangements that were applicable to the corresponding Company RSU
Award immediately prior to the Offer Acceptance Time and shall become vested and payable
in accordance with its terms immediately prior to the Offer Acceptance Time or upon the applicable
holder’s earlier termination of employment that, per the terms of the holder’s
corresponding Company RSU Award, the holder’s employment agreement or any other OSG
benefit plan in effect as of the Offer Acceptance Time would have triggered an accelerated
vesting and payment of such Company RSU Award. Each Cash Award may be increased, but not
decreased, by up to 50% based on performance goal(s) to be mutually determined by Parent
and OSG management as soon as practicable following the Effective Time. |
Exchange
and Payment Procedures. Substantially concurrently with the Offer Acceptance Time, Parent will deposit (or cause to be deposited)
with the Depositary and Paying Agent, a cash amount sufficient to make the payment of the aggregate Offer Price payable pursuant to the
Merger Agreement. Substantially concurrently with the Closing, Parent will deposit (or cause to be deposited) with the Depositary and
Paying Agent cash sufficient to pay the aggregate Merger Consideration payable pursuant to the Merger Agreement.
Promptly
after the Effective Time (and in any event within two (2) business days), the Surviving Corporation will cause the Depositary and Paying
Agent to mail or otherwise provide to each former holder of record of a certificate or certificates that immediately prior to the Effective
Time represented outstanding Shares (a “Certificate”) (other than holders of Excluded Shares) or of Shares held in
book-entry form (“Book-Entry Shares”) (other than holders of Excluded Shares), (i) transmittal materials (including
for any Book-Entry Shares, specification that delivery shall be effected, and risk of loss and title to the Book-Entry Shares will pass
only, upon receipt of an “Agent’s Message” by the Depositary and Paying Agent with respect to such Book-Entry Shares)
and (ii) instructions for use in effecting the surrender of the Certificate or Book-Entry Shares in exchange for payment of the Merger
Consideration.
Upon,
(i) in the case of Shares represented by a Certificate, surrender to the Depositary and Paying Agent of such Certificate, together with
a duly completed and validly executed letter of transmittal and such other customary documents as may be required by the Depositary and
Paying Agent; or (ii) in the case of Book-Entry Shares, receipt of an “Agent’s Message” by the Depositary and Paying
Agent (or such other evidence, if any, of transfer as the Depositary and Paying Agent may reasonably request), the holder of such Certificate
or Book-Entry Share will be entitled to receive in exchange therefor the Merger Consideration for each Share formerly represented by
such Certificate or Book-Entry Share, and the Certificate or Book-Entry Share so surrendered will immediately be cancelled.
If
any portion of the cash deposited with the Depositary and Paying Agent is not claimed within one (1) year following the Effective Time,
such cash will be returned to the Surviving Corporation, and any holders of Shares (other than Excluded Shares) who have not complied
with the exchange procedures in the Merger Agreement will thereafter look only to the Surviving Corporation and Parent, as general creditors
for payment of the Merger Consideration for such Shares, without any interest thereon (subject to abandoned property, escheat, or other
similar laws).
Treatment
of Company Warrants. Pursuant to the Merger Agreement, in accordance with the terms of the Warrant Agreement, any Company Warrant
surrendered at any time from or after the Offer Acceptance Time that has an exercise price per Share that is less than the Offer Price
shall entitle the holder thereof to receive, upon the surrender of such Company Warrant in accordance with its terms, an amount in cash
equal to the product of (x) the excess of the Offer Price over the applicable exercise price per Share of such Company Warrant and (y)
the total number of Shares subject to such Company Warrant. Substantially concurrently with the Offer Acceptance Time, Parent shall deposit,
or cause to be deposited, with the warrant agent under the Warrant Agreement, a cash amount sufficient to make the payment of the aggregate
Offer Price payable in respect of the then outstanding Company Warrants in accordance with the Merger Agreement.
Repayment
of Indebtedness. Prior to the Closing, OSG will use its commercially reasonable efforts to cause the lender or, if applicable, agent
for the lenders, under each credit agreement of OSG and/or any of its subsidiaries identified by OSG and Parent for repayment at the
Closing (each, a “Credit Agreement”) to deliver to Parent duly executed payoff letters with respect to the obligations
under the Credit Agreements in form and substance reasonably satisfactory to Parent (the “Payoff Letters”). At the
Closing, Parent will repay, or cause to be repaid, on behalf of OSG and its subsidiaries, the indebtedness of OSG and its subsidiaries
outstanding under the Credit Agreements required to be repaid at the Closing in accordance with the Payoff Letters. OSG will use its
commercially reasonable efforts to effect the release of all other liens on the assets of OSG and its subsidiaries in connection with
the Credit Agreements in accordance with the Payoff Letters at or promptly following the Closing.
Representations
and Warranties. The Merger Agreement contains representations and warranties of OSG, Parent and Purchaser.
The
Merger Agreement contains representations and warranties of OSG, subject to certain exceptions in the Merger Agreement, in the Company
Disclosure Schedule delivered in connection with the Merger Agreement and in OSG’s public filings, as to, among other things:
| ● | organization
and power to do business; |
| ● | corporate
power and authority relating to the execution, delivery and performance of the Merger Agreement; |
| ● | consents
and approvals relating to the execution, delivery and performance of the Merger Agreement
and consummation of the Transactions and the absence of certain violations; |
| ● | timely
filing of SEC filings, accuracy and completeness of the SEC filings, absence of certain SEC
investigations, and compliance with rules and regulations of the NYSE |
| ● | the
absence of certain changes or events affecting OSG; |
| ● | the
accuracy of the information supplied for the purposes of Parent’s and Purchaser’s
Schedule TO, together with all exhibits, amendments and supplements thereto, including this
Offer to Purchase, or OSG’s corresponding Schedule 14D-9; |
| ● | compliance
with applicable laws; |
| ● | tax
returns and other tax matters; |
| ● | the
absence of certain liabilities; |
| ● | the
absence of certain actions, proceedings or orders; |
| ● | employee
benefit plans and other agreements, plans and policies with or concerning employees; |
| ● | intellectual
property, privacy and information technology; |
| ● | real
and personal property matters; |
| ● | the
absence of certain liabilities relating to, and violations of, environmental laws; |
| ● | material
customers and material suppliers; |
| ● | vessels
owned by the Company or its subsidiaries and vessels owned by a third party and chartered
in by the Company or its subsidiaries pursuant to a bareboat charter (“Company Vessels”); |
| ● | takeover
statutes and anti-takeover provisions in OSG’s certificate of incorporation and bylaws; |
| ● | related
party transactions; |
| ● | the
opinion of the financial advisor to the OSG Board; and |
| ● | exclusivity
of OSG’s representations and warranties in the Merger Agreement. |
The
Merger Agreement also contains representations and warranties of Parent and Purchaser, subject to certain exceptions in the Merger Agreement
and in the parent disclosure schedule delivered in connection with the Merger Agreement, as to, among other things:
| ● | organization
and power to do business; |
| ● | capitalization
and activities of Purchaser; |
| ● | corporate
power and authority relating to the execution, delivery and performance of the Merger Agreement; |
| ● | consents
and approvals relating to the execution, delivery and performance of the Merger Agreement
and consummation of the transaction, the absence of certain violations, and the U.S. citizenship
status of both Purchaser and Parent for purposes of Jones Act compliance; |
| ● | the
accuracy of the information supplied for the purposes of the Schedule TO, together with all
exhibits, amendments and supplements thereto, including this Offer to Purchase; |
| ● | the
absence of certain actions, proceedings or orders; |
| ● | the
Parent Credit Agreement, the executed commitment letters related thereto, and the transaction
update presentation prepared in connection therewith (collectively, the “Debt Commitment
Letter”) reflecting commitments from lenders to provide debt financing in the amounts
set forth in the Debt Commitment Letter to Parent for the purpose of funding the transactions
contemplated by the Merger Agreement, and the sufficiency and enforceability of such debt
financing; |
| ● | except
as otherwise provided in Parent’s filings with the SEC, the absence of beneficial ownership
of Shares by Parent and its subsidiaries; |
| ● | the
absence of any arrangements between Parent or Purchaser (or their respective affiliates),
on the one hand, and, on the other hand, any stockholder, director, officer or other affiliate
of Purchaser or any of its subsidiaries relating to the Merger Agreement (or the transactions
contemplated thereby) or the Surviving Corporation or any of its subsidiaries, businesses
or operations (including as to continuing employment), except as expressly authorized by
OSG; |
| ● | exclusivity
of Parent’s and Purchaser’s representations and warranties in the Merger Agreement;
and |
| ● | no
other representations and warranties. |
The
representations and warranties contained in the Merger Agreement will not survive the consummation of the Merger.
Some
of the representations and warranties in the Merger Agreement are qualified by materiality qualifications or a “Company Material
Adverse Effect” or “Parent Material Adverse Effect” qualification, as discussed below.
For
purposes of the Merger Agreement, a “Company Material Adverse Effect” means any fact, circumstance, change, event,
occurrence or effect that has had, or would reasonably be expected to have, individually or in the aggregate, (i) a material adverse
effect on the assets, financial condition, business or results of operations of OSG and its subsidiaries, taken as a whole, or (ii) a
material adverse effect on, or prevents or materially delays, the ability of OSG to consummate the transactions contemplated by the Merger
Agreement. However, for the purposes of clause (i), none of the following, and no effect arising out of, relating to or resulting from
the following, will constitute or be taken into account in determining whether a Company Material Adverse Effect has occurred or would
reasonably be expected to occur: any facts, circumstances, changes, events, occurrences or effects resulting from or attributable to:
| (a) | changes
in any of the industries in which OSG or its subsidiaries operate; |
| (b) | changes
in economic conditions or the credit, debt, securities, financial or capital markets in the
United States or elsewhere in the world; |
| (c) | changes
in applicable law, in United States generally accepted accounting principles (“GAAP”)
or in accounting standards, or any changes in the interpretation thereof after the date of
the Merger Agreement; |
| (d) | the
execution and delivery of the Merger Agreement or the public announcement or pendency of
the Offer, the Merger or the other transactions contemplated by the Merger Agreement or the
identity of, or any facts or circumstances relating to, Parent, Purchaser or their respective
affiliates, including any impact thereof on relationships, contractual or otherwise, with
customers, lessors, suppliers, vendors, investors, lenders, partners, contractors or employees
of OSG or its subsidiaries; |
| (e) | compliance
with the covenants expressly set forth in the Merger Agreement and any action taken, or omitted
to be taken, by OSG or any of its subsidiaries with the express prior written consent of
Parent; |
| (f) | acts
of war (whether or not declared) or any outbreak of hostilities, sabotage or terrorism, cyber-terrorism,
cyber-espionage, or cyber-war, or any escalation or worsening of any such acts; |
| (g) | weather,
earthquakes, hurricanes, tornados, natural disasters, climatic conditions, epidemics, pandemics
or outbreaks of illness (including escalations or resurgences of COVID-19) or other public
health event or other force majeure events; |
| (h) | any
civil unrest, regulatory and political conditions or developments (including any government
shutdowns or debt payment defaults), or any response of any government entity thereto; |
| (i) | any
Transaction Litigation (as defined below); |
| (j) | any
change in the price or trading volume of the Shares or the credit rating of OSG or any of
its subsidiaries, in each case, in and of itself; |
| (k) | any
failure to meet any published analyst estimates or expectations of the revenue, earnings
or other financial performance or results of operations for any period, in and of itself,
or any failure to meet internal or published projections, budgets, plans or forecasts of
its revenues, earnings or other financial performance or results of operations, in and of
itself (provided that, except as otherwise provided in this definition, the underlying causes
of such failure or decline may be considered in determining whether there is a Company Material
Adverse Effect); or |
| (l) | the
price of ship fuel, piracy, or international or intranational hostilities, disputes or conflicts
affecting shipping (including with respect to the Suez Canal, the Panama Canal, the Houthis,
the Ukrainian-Russian conflict, the Israel-Hamas conflict and the territorial disputes in
the South China Sea); |
provided,
that facts, circumstances, changes, events, occurrences or effects set forth in clauses (a), (b), (c), (f), (g), (h) and (l) above may
be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect
to the extent such facts, circumstances, changes, events, occurrences or effects have a disproportionate adverse effect on OSG and its
subsidiaries, taken as a whole, in relation to similarly situated businesses operating in the industries in which OSG and its subsidiaries
operate (provided, that only the incremental disproportionate adverse effects of such facts, circumstances, changes, events, occurrences
or effects may be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material
Adverse Effect).
For
purposes of the Merger Agreement, a “Parent Material Adverse Effect” means any event, condition, change, occurrence
or development of a state of circumstances or facts that, individually or when taken together with all such all other events, conditions,
changes, occurrences or developments of a state of circumstances or facts, would prevent, impair or materially delay the consummation
of the Offer or the Merger or prevent or materially impair or delay the ability of Parent or Purchaser to perform its obligations under
the Merger Agreement.
Conduct
of Business Pending the Offer Acceptance Time. OSG has agreed that during the period from and after the date of the Merger Agreement
until the earlier of the Offer Acceptance Time or termination of the Merger Agreement (in accordance with its terms) (the “Pre-Closing
Period”), except: (i) with Parent’s prior written consent (which may not be unreasonably withheld, delayed or conditioned),
(ii) as required by applicable law, (iii) as expressly contemplated by the Merger Agreement or (iv) as set forth in the Company Disclosure
Schedule, OSG will, and will cause its subsidiaries to, (a) carry on their respective businesses in all material respects in the ordinary
course of business, and (b) use commercially reasonable efforts to (1) preserve substantially intact their business organization, assets
(including the Company Vessels), properties and business relations, (2) keep available the services of their executive officers and key
employees on commercially reasonable terms, (3) maintain in effect all licenses, certificates, authorizations, consents, permits, approvals
and other similar authorizations of, from or by a governmental entity necessary for OSG to own, lease or operate its properties and assets,
including the Company Vessels, and to carry on its business as currently conducted, and (4) maintain the goodwill and existing relationships
with any person with which OSG or any of its subsidiaries has material business relations and with governmental entities that have jurisdiction
over their business and operations.
Further,
OSG has agreed that subject to the exceptions in the immediately preceding paragraph, during the Pre-Closing Period, OSG will not, and
will not permit its subsidiaries to, without the prior written consent of Parent (which consent will not be unreasonably withheld, conditioned
or delayed), among other things, take any of the following actions:
| ● | declare,
set aside or pay any dividends on, or make any other distributions in respect of, any of
its capital stock or equity interests, subject to certain exceptions (including that, if
the Offer Acceptance Time has not occurred on or prior to August 31, 2024, the OSG Board
may declare and OSG may pay to holders of Shares in cash each regular quarterly dividend
that would have otherwise been declared and paid after August 31, 2024 in an amount per Share
not to exceed $0.06 per quarter and with record and payment dates consistent with past practice
of OSG and corresponding distributions to the holders of Company Warrants in respect of the
Shares into which the Company Warrants are exercisable); |
| ● | split,
combine, subdivide, adjust, amend the terms of or reclassify any of its capital stock or
equity interests; |
| ● | issue,
deliver, sell, pledge, grant, transfer or otherwise encumber any shares of its capital stock
or other equity securities or any option, warrant or other right to acquire or receive shares
of its capital stock or other equity securities, or redeem, purchase or otherwise acquire
any shares of its capital stock or other equity securities, subject to certain exceptions
including in connection with Company Warrants and the Company Equity Awards; |
| ● | amend
OSG’s or any of its subsidiary’s organizational documents, subject to certain
exceptions; |
| ● | other
than in transactions among wholly owned subsidiaries of OSG or between OSG and its wholly
owned subsidiaries, acquire by any means any entity, business or assets that constitute a
business or division of any person; |
| ● | sell,
lease, license, encumber (other than certain permitted liens) or otherwise dispose of by
any means any entity, business or any material assets, properties (including any Company
Vessel), rights or other interest therein, subject to certain exceptions; |
| ● | create,
incur or assume any indebtedness for borrowed money or issue any debt securities, or issue
or sell options, warrants, calls or other rights to acquire any of its debt securities, or
assume, guarantee, endorse or otherwise become liable or responsible for the indebtedness
or other obligations of another person, subject to certain exceptions; |
| ● | merge,
combine or consolidate OSG or any of its subsidiaries with and into any other person, subject
to certain exceptions; |
| ● | adopt
or enter into a plan of complete or partial liquidation, restructuring, capitalization, reorganization
or dissolution; |
| ● | waive,
settle (or propose to settle) or compromise any pending or threatened action against OSG
or any of its subsidiaries, subject to certain exceptions; |
| ● | except
as required by any OSG benefit plan, any bargaining agreement entered into by OSG or any
employment agreement with an officer, employee or independent contract of OSG, in each case,
as disclosed in the company disclosure schedule, (a) grant any equity-based compensation,
including any Company Equity Awards not otherwise permitted by third bullet point of this
section, (b) increase the compensation or benefits (including base salary, base wages, short-term
cash compensation, long-term cash compensation, and severance entitlements) of any executive
officer or director of OSG, (c) increase the compensation or benefits (including base salary,
base wages, short-term cash compensation, long-term cash compensation, and severance entitlements)
of any employee or independent contractor who is not covered by the preceding clause (b),
other than increases in base salaries, wages and annual or shorter-term cash incentive opportunities
in the ordinary course consistent with past practice, not to exceed, (1) in the aggregate,
2.0% relative to the prior fiscal year, and (2) individually, 4.0% relative to the prior
fiscal year, (d) subject to the foregoing, adopt any new employee benefit plan or arrangement
(other than offer letters that are entered into in the ordinary course of business consistent
with past practice with newly hired or promoted employees who are not executive officers
and that do not provide for any severance benefits or otherwise deviate from the standard
terms and conditions of the offer letters disclosed to Parent), (e) subject to the foregoing,
adopt a new arrangement that constitutes an OSG benefit plan under the Merger Agreement,
or amend, modify or terminate any existing OSG benefit plan, other than in the ordinary course
of business consistent with past practice, or (f) take any action to accelerate the vesting,
payment, or funding of any payment or benefit under any OSG benefit plan; |
| ● | make
any change in financial accounting methods, principles, policies or practices of OSG or any
of its subsidiaries, except insofar as may be required by GAAP (or any interpretation or
enforcement thereof) or applicable law; |
| ● | other
than in the ordinary course of business (a) make, change or revoke any material tax election,
(b) settle or compromise of any material tax liability for an amount materially in excess
of the amount accrued or reserved in OSG’s financial statements, (c) file or amend
any material tax return, (d) adopt or change any method of tax accounting or annual tax accounting
period, (e) enter into any closing agreement relating to any material tax liability, (f)
agree to extend the statute of limitations in respect of any material amount of taxes (other
than pursuant to automatic extensions of time to file tax returns) or (g) surrender any right
to claim a material tax refund; |
| ● | enter
into or amend any contract with, or make any payment to, any former or present director or
officer of OSG or any of its subsidiaries, or affiliates of any of the foregoing persons
or any other person covered under Item 404 of Regulation S-K under the Securities Act (other
than any payments pursuant to the eleventh bullet point in this section); |
| ● | enter
into, amend, waiver any rights under, or terminate any material contract (or any other contract
that would be deemed a material contract if it had been entered into prior to May 19, 2024)
other than in the ordinary course of business in all material respects; |
| ● | authorize,
or make any commitment with respect to, capital expenditures that would exceed $5 million
individually or $25 million in the aggregate, other than in accordance with OSG’s annual
capital expenditures budget made available to Parent; |
| ● | except
as otherwise permitted in the foregoing bullet, with respect to any Company Vessel, (a) modify
the use, operation, maintenance or repair of the Company Vessels in a matter outside the
ordinary course of business or not in material compliance with applicable law or (b) deplete
inventory, supplies and spare parts in a manner outside the ordinary course of business;
or |
| ● | agree
to take, or make any commitment to take, any of the foregoing. |
Non-Solicitation.
Except as permitted by the Merger Agreement, during the Pre-Closing Period, OSG will not, and will cause its subsidiaries and its and
their directors and officers not to, and will instruct and use its reasonable best efforts to cause its and their directors, officers,
employees, investment bankers, attorneys, accountants and other advisors or representatives (collectively, “Representatives”)
not to, directly or indirectly:
| ● | solicit,
initiate, knowingly facilitate or knowingly encourage any inquiries regarding, or the making
of any proposal or offer that constitutes, or could reasonably be expected to lead to an
Acquisition Proposal (as defined below); |
| ● | enter
into or participate in any discussions with (including through the providing of access or
non-public information relating to OSG) any person regarding an Acquisition Proposal (other
than to state that OSG is not permitted to have discussions and to refer such person to the
provisions of the Merger Agreement); or |
| ● | enter
into any other acquisition agreement, option agreement, joint venture agreement, partnership
agreement, letter of intent, term sheet, merger agreement or similar agreement (other than
a confidentiality agreement permitted under the Merger Agreement) with respect to an Acquisition
Proposal (an “Alternative Acquisition Agreement”). |
OSG
also will, and will cause its subsidiaries and its and their directors and officers and will instruct and use its reasonable best efforts
to cause its and their Representatives to, immediately cease all solicitations, discussions and negotiations with any persons (other
than Parent, its affiliates and their respective Representatives) that may be ongoing with respect to an Acquisition Proposal and request
that each such person promptly return or destroy all confidential information furnished to such person by or on behalf of OSG in connection
with any such Acquisition Proposal.
However,
at any time during the Pre-Closing Period, if the OSG Board, directly or indirectly through any Representatives, receives an unsolicited,
bona fide, written Acquisition Proposal that did not result from a material breach of the non-solicitation provisions in the Merger Agreement,
OSG and its Representatives may contact the person or group of persons making such Acquisition Proposal to clarify the terms and conditions
thereof so as to determine whether such Acquisition Proposal constitutes, or could reasonably be expected to result in, a Superior Proposal
(as defined below), and may (i) provide information to such person or group of persons (including their respective Representatives) if
OSG receives from such person or group of persons (or has received from such person or group of persons) an executed confidentiality
agreement containing confidentiality terms that are not less favorable in any material respect to OSG than those contained in the Non-Disclosure
Agreement, dated as of February 27, 2024, by and between Parent and OSG, except that OSG will make available to Parent and Purchaser
any non-public information concerning OSG or its subsidiaries that is provided to any such person or group of persons which was not previously
made available to Parent or Purchaser no later than 24 hours thereafter, and (ii) engage or participate in any discussions or negotiations
with such person or group of persons, if prior to taking any action described in clause (i) or (ii) above, the OSG Board determines in
good faith after consultation with its financial advisor and outside legal counsel that such Acquisition Proposal constitutes, or would
reasonably be expected to result in, a Superior Proposal and that the failure to take such action would be inconsistent with the OSG
Board’s fiduciary duties under applicable law.
For
purposes of the Merger Agreement, an “Acquisition Proposal” means any proposal or offer from any person or group of
persons (other than Parent and its affiliates) for:
| ● | a
merger, consolidation, business combination, share exchange, recapitalization, liquidation,
dissolution or similar transaction involving OSG as a result of which any person or group
of persons (or the stockholders of any person or group) would beneficially own, directly
or indirectly, 20% or more of the outstanding common stock of OSG or 20% or more of the total
voting power of OSG or any surviving entity (or any direct or indirect parent company thereof)
immediately following such transaction; |
| ● | any
direct or indirect acquisition by any person or group of persons of more than 20% of the
outstanding common stock of OSG (or any securities convertible into, or exchangeable for,
such Shares) or total voting power represented by the outstanding voting securities of OSG; |
| ● | a
tender offer or exchange offer or other transaction which, if consummated, would result in
a direct or indirect acquisition by any person or group of persons (or the stockholders of
any person or group) of more than 20% of the outstanding common stock of OSG (or any securities
convertible into, or exchangeable for, such common stock) or total voting power represented
by the outstanding voting securities of OSG; or |
| ● | the
acquisition in any manner, directly or indirectly, of over 20% of the fair market value of
the consolidated assets of OSG and its subsidiaries (as determined in good faith by the OSG
Board). |
For
purposes of the Merger Agreement, “Superior Proposal” means any bona fide written Acquisition Proposal (defined by
substituting the references to “20%” for “50%”) made by any person or group of persons (other than Parent and
its affiliates after the date of the Merger Agreement), which Acquisition Proposal did not result from a breach (or deemed breach) of
the non-solicitation provisions of the Merger Agreement that (i) the OSG Board has determined in its good faith judgment is on terms
(after consultation with its financial advisor and outside legal counsel and after taking into account all the terms and conditions of
the Acquisition Proposal) more favorable to the OSG Stockholders from a financial point of view than the transactions contemplated by
the Merger Agreement, considering any revisions to the Merger Agreement made or proposed in writing by Parent pursuant to the terms of
the Merger Agreement, and (ii) the OSG Board determines (after consultation with its financial advisor and outside legal counsel) is
reasonably capable of being consummated in accordance with its terms, taking into account all financial, regulatory, legal and other
aspects (including certainty of closing, certainty of financing and the identity of the person making the Acquisition Proposal) of such
proposal.
The
OSG Board’s Recommendation; OSG Board Recommendation Change. As described above, and subject to the provisions described below,
the OSG Board has unanimously made the recommendation that the OSG Stockholders tender their Shares to Purchaser pursuant to the Offer
on the terms and conditions set forth in the Merger Agreement (the “Company Recommendation”). Except as expressly
permitted by the Merger Agreement, neither the OSG Board nor any committee thereof may:
| ● | withhold,
withdraw, qualify or modify (or publicly propose to withhold, withdraw, qualify or modify),
in each case in a manner adverse to Parent, the Company Recommendation; |
| ● | fail
to include the Company Recommendation in the Schedule 14D-9; |
| ● | adopt,
approve, recommend, endorse or otherwise declare advisable, or publicly propose to adopt,
approve or recommend, any Acquisition Proposal; |
| ● | fail
to recommend against acceptance of any third-party tender offer or exchange offer constituting
an Acquisition Proposal within 10 business days after the commencement of such offer; or |
| ● | if
an Acquisition Proposal has been publicly disclosed, fail to affirm publicly the Company
Recommendation within 10 business days after Parent so requests in writing. |
The
actions described in the bullet points above are referred to in this Offer as a “Change of Recommendation,” except that any
“stop-look-and-listen” communication to the OSG Stockholders pursuant to Rule 14d-9(f) under the Exchange Act or any similar
communications to the OSG Stockholders shall not be deemed a Change of Recommendation if such communication is made prior to the 10th
business day after the commencement of a tender offer or exchange offer and does not include a recommendation by OSG that stockholders
of OSG tender their Shares into such tender offer or exchange offer.
However,
prior to the Offer Acceptance Time, (i) if an intervening event (as defined below) occurs and the OSG Board determines in good faith,
after consultation with its outside legal counsel, that the failure to effect a Change of Recommendation in light of such intervening
event would be inconsistent with its fiduciary duties under applicable law, the OSG Board may make a Change of Recommendation contemplated
by the first and second bullet points above or (ii) if OSG receives, directly or indirectly through one or more of its Representatives,
an unsolicited, written, bona fide Acquisition Proposal that the OSG Board concludes in good faith, after consultation with its financial
advisor and outside legal counsel, constitutes a Superior Proposal and that the failure to effect a Change of Recommendation in light
of such Superior Proposal would be inconsistent with the OSG Board’s fiduciary duties under applicable law, and such Acquisition
Proposal did not result from a breach of the non-solicitation provisions of the Merger Agreement, the OSG Board may effect a Change of
Recommendation and/or terminate the Merger Agreement in order to enter into an Alternative Acquisition Agreement providing for such Superior
Proposal provided that in either case:
| ● | OSG
must have given Parent at least four business days’ prior written notice that it intends
to make a Change of Recommendation (a “Change Notice”) and/or terminate
the Merger Agreement, which notice must specify, in the case of a Superior Proposal, the
material terms thereof, along with a copy of the proposed agreement in respect of such Superior
Proposal (or, if there is no such proposed agreement, a written summary of the material terms
and conditions of such Superior Proposal), and, in the case of an intervening event, reasonable
detail regarding such intervening event and the reasons for the Change of Recommendation; |
| ● | after
providing such notice and prior to making a Change of Recommendation and/or terminating the
Merger Agreement, OSG must have caused its Representatives to be reasonably available to
negotiate, in good faith with Parent and Purchaser (to the extent Parent and Purchaser desire
to negotiate) during the four business day notice period (the “Notice Period”)
to make adjustments to the terms and conditions of the Merger Agreement as would obviate
the need for OSG to effect a Change of Recommendation and/or terminate the Merger Agreement;
and |
| ● | at
the end of the Notice Period, the OSG Board must have determined in good faith, after consultation
with its outside legal counsel and, with respect to the Superior Proposal giving rise to
the Change Notice, its financial advisor, taking into account any changes to the Merger Agreement
proposed in writing by Parent in response to the Change Notice, that, (a) in the case of
a Superior Proposal, the Superior Proposal giving rise to the Change Notice continues to
be a Superior Proposal and that the failure to make a Change of Recommendation or to terminate
the Merger Agreement in connection therewith would be inconsistent with its fiduciary duties
under applicable law or (b) in the case of an intervening event, the failure of the OSG Board
to make a Change of Recommendation would still be inconsistent with its fiduciary duties
under applicable law. |
Any
amendment to the financial terms or any other material change to the terms of a Superior Proposal requires OSG to deliver a new Change
Notice and to comply with the requirements in the bullets above, provided, that subsequent to the initial Notice Period, the Notice Period
will only be three business days instead of four business days.
Under
the Merger Agreement, an “intervening event” means a material event, occurrence, development or change in circumstances with
respect to OSG and its subsidiaries, taken as a whole, that was not known or reasonably foreseeable by the OSG Board as of the date of
the Merger Agreement and becomes known to or by the OSG Board after the date of the Merger Agreement, provided that the following do
not constitute, and will not be considered in determining whether there has been, an intervening event: (i) the receipt of any Acquisition
Proposal; (ii) the execution and delivery of the Merger Agreement or the public announcement or pendency of the Offer, the Merger or
the transactions contemplated thereby or the identify of, or any facts or circumstances relating to, Parent, Purchaser or their respective
affiliates; (iii) any change in the price or trading volume of the Shares or the credit rating of OSG or any of its subsidiaries, in
each case, in and of itself; (iv) the fact that OSG meets or exceeds any internal or published budgets, projections, forecasts or predictions
of financial performance for any period, in each case, in and of itself; or (v) any changes in general economic or political conditions,
or in the financial, credit or securities markets in general.
The
Merger Agreement does not prohibit OSG, the OSG Board or any committee thereof from (i) making any required disclosure to the OSG Stockholders
if, in the good faith judgment of the OSG Board, after consultation with its outside legal counsel, failure to make such disclosure would
be inconsistent with its fiduciary duties under applicable law, (ii) complying with its disclosure or fiduciary obligations under applicable
law or disclosure obligations under NYSE rules, including taking and disclosing to its stockholders a position contemplated by Rule 14d-9
or Rule 14e-2(a) under the Exchange Act (or any similar communication to stockholders) or (iii) making any “stop-look-and-listen”
communication to stockholders of OSG pursuant to Rule 14d-9(f) under the Exchange Act (or any similar communications to stockholders,
including any similar communication in response to an Acquisition Proposal that is not a tender offer or exchange offer). Any “stop-look-and-listen”
or similar communication permitted under clause (iii) will not constitute a Change of Recommendation or otherwise constitute a basis
for Parent to terminate the Merger Agreement.
OSG
must promptly (and in any event within 24 hours) notify Parent in writing if any Acquisition Proposal is received by OSG, any of its
subsidiaries or any of its Representatives, indicating (except to the extent prohibited by any applicable law or contract in effect as
of the date of the Merger Agreement) the material terms and conditions of such Acquisition Proposal. OSG must (i) promptly (and in any
event within 24 hours) notify Parent of any change to the financial or other material terms and conditions of any Acquisition Proposal,
and (ii) otherwise keep Parent reasonably informed of the status and material terms of any such Acquisition Proposal, discussions or
negotiations on a reasonably prompt basis.
In
addition, notwithstanding anything to the contrary contained in the Merger Agreement, OSG may terminate, waive, amend or release any
provision of any confidentiality, “standstill” or similar obligation of any person (i) if the OSG Board determines in good
faith after consultation with its outside legal counsel that failure to take such action would be inconsistent with its fiduciary duties
under applicable law and (ii) to the extent such provisions would prohibit any person or group from making an Acquisition Proposal privately
to the OSG Board.
Reasonable
Best Efforts; Filings. OSG, Parent and Purchaser have agreed to, and to cause their respective affiliates to, use their respective
reasonable best efforts to take, or cause to be taken, all actions, and to do, or to cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or advisable to consummate and make effective, and to satisfy all conditions
to, the Offer, the Merger and the other transactions contemplated by the Merger Agreement, as expeditiously as reasonably practicable,
including:
| ● | obtain
all necessary permits, waivers, and actions or nonactions from governmental entities and
the making of all necessary registrations, filings, and notifications (including filings
with governmental entities); |
| ● | execute
and deliver any additional instruments necessary to consummate the Offer and the Merger and
to fully carry out the purposes of the Merger Agreement; |
| ● | comply
to the extent necessary with any request for information by any governmental entity in connection
with the Merger Agreement, including any request for additional information and documentary
material by the Federal Trade Commission (the “FTC”) or the Antitrust
Division of the Department of Justice (the “Antitrust Division”) under
the HSR Act; and |
| ● | resolving
questions or objections, if any, as may be asserted by any governmental entity with respect
to the Merger Agreement, including under applicable regulatory laws. |
In
addition, OSG, Parent and Purchaser have agreed to cooperate and consult with each other in connection with obtaining any authorizations,
approvals, consents, registrations, permits, and other confirmations from any governmental entity required to consummate the transactions
contemplated by the Merger Agreement, and to, unless prohibited by law:
| ● | furnish
to the other party such information as the other party may reasonably require in connection
with the preparation of any filing or submission under the HSR Act or applicable regulatory
laws and subject to customary confidentiality obligations and all applicable privileges; |
| ● | notify
each other promptly of any oral communication with, and upon request, provide copies of any
written communications, correspondence and filings with, any governmental entity; |
| ● | consult
and cooperate with, and consider in good faith the views of, one another, in connection with
any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals
made or submitted by or on behalf of any party in connection with proceedings under the HSR
Act or the antitrust laws of any other governmental entity; |
| ● | use
good faith efforts to give each other reasonable advance notice of all meetings with any
governmental entity; and |
| ● | unless
prohibited by law or by a governmental entity, not participate independently in any meeting
with a governmental entity without providing reasonable advance notice to the other party
and an opportunity to attend and participate in such meeting or, if the other party is prohibited
by law or governmental entity from participating in or attending any such meeting, keep the
other party reasonably apprised with respect thereto. |
Neither
Parent nor OSG shall commit to or agree (or permit any of their respective affiliates to commit to or agree) with any governmental entity
to stay, toll, or extend any applicable waiting period under the HSR Act or other applicable regulatory laws or refrain from closing
of the Offer, the Merger or the other transactions contemplated by the Merger Agreement, without the prior written consent of the other
(such consent not to be unreasonably withheld, conditioned, or delayed).
However,
OSG and its controlled affiliates will not be required to (i) pay prior to the Effective Time any material fee, penalty or other consideration
to any third party to obtain consent or approval required under any contract for the consummation of the Offer, the Merger or the other
transactions contemplated by the Merger Agreement, other than as expressly required under the terms of any contract or (ii) agree to
any material term, condition, obligation, restriction, requirement, limitation, qualification, remedy or other action imposed, required
or requested by any governmental entity in connection with its grant of any permits, approvals, waivers, and actions or nonactions with
respect to the Offer, the Merger or the other transactions contemplated by the Merger Agreement, unless such term, condition, obligation,
restriction, requirement, limitation, qualification, remedy or other action imposed is binding on OSG or any of its controlled affiliates
only in the event that the Closing occurs.
OSG
will use reasonable best efforts to cooperate with Parent to obtain any consents or waivers from third parties (other than governmental
entities) that are required in connection with the Transactions.
OSG,
Parent and Purchaser have agreed to (i) provide or cause to be provided as promptly as reasonably practicable to governmental entities
with jurisdiction over the applicable regulatory laws information and documents requested by any such governmental entity as necessary,
proper, or advisable to permit consummation of the transactions contemplated by the Merger Agreement, including preparing and filing
any notification and report form and related material required under the HSR Act and any additional consents and filings required under
any other applicable regulatory laws as promptly as practicable following the date of the Merger Agreement (provided, that the filing
under the HSR Act must be made within 15 business days of the date of the Merger Agreement) and thereafter to respond as promptly as
practicable to any request for additional information or documentary material that may be made under the HSR Act or any other applicable
regulatory laws and (ii) take such actions as are necessary or advisable to obtain prompt approval of the consummation of the transactions
contemplated by the Merger Agreement by any governmental entity or expiration of any applicable waiting periods. Parent has agreed to
pay and be solely responsible for all filing fees under the HSR Act and any additional consents and filings required under any other
applicable regulatory laws.
The
Merger Agreement further provides that Parent will, and will cause its affiliates to, use its and their reasonable best efforts take
any and all steps and actions necessary to avoid or eliminate impediments or objections, if any, that may be asserted with respect to
the Offer, the Merger or the other transactions contemplated by the Merger Agreement under any applicable regulatory laws so as to enable
the parties to consummate such transactions as promptly as practicable, but in no event later than the Termination Date, including (i)
proposing, negotiating, committing to and effecting by consent decree, hold separate orders or otherwise, the sale, divesture, licensing
or disposition of any assets, properties or businesses of Parent or its affiliates or of OSG or its subsidiaries and (ii) otherwise taking
or committing to take any actions that would limit the freedom of action of Parent or any of its affiliates with respect to, or its or
their ability to retain, one or more of the businesses, product lines or assets of Parent or any of its affiliates, or the assets, properties
or businesses of OSG or its subsidiaries, in each case as may be advisable in order to avoid the entry of, or to effect the dissolution
of, any administrative or judicial action or proceeding or any decree, judgment, injunction temporary restraining order, or other order
in any suit or proceeding, which would otherwise have the effect of preventing or delaying the Effective Time; provided that none of
Parent or its affiliates or OSG or its subsidiaries will be required to take or agree to take any action that would, individually or
in the aggregate, reasonably be expected to have a material adverse effect on the business, operations, financial condition or results
of operations of Parent and its affiliates after giving effect to the Offer and the Merger, taken as a whole; provided, that, for purposes
of this sentence, “Parent and its affiliates after giving effect to the Offer and the Merger” shall be deemed to have the
size, financial condition and results of operations of OSG and its subsidiaries prior to the consummation of the Offer and the Merger.
Employee
Matters. During the period commencing on the Closing Date and ending on December 31, 2025, Parent will, or will cause its applicable
subsidiary to, provide each nonunionized employee who was such as of immediately prior to the Offer Acceptance Time and who continues
in employment with Parent, the Surviving Corporation or their subsidiaries following the Effective Time (collectively, the “Continuing
Employees”) with (i) a principal work assignment located at the same or a reasonably similar geographic location to such Continuing
Employee’s geographic work location as in effect as of immediately prior to the Closing Date (including, if applicable, a remote
work arrangement consistent with any such arrangement in effect as of the Closing Date), (ii) job responsibilities that are substantially
comparable to the responsibilities of such Continuing Employee as of the Closing Date, other than job responsibilities that reasonably
result from OSG’s transition to a non-publicly traded company, (iii) a base salary, base compensation or regular hourly wage (whichever
is applicable) and an annual or shorter-term cash incentive compensation opportunity, that, in each case, is not less than the base salary,
base compensation or regular hourly wage and such short-term cash incentive compensation opportunity in effect for the applicable Continuing
Employee as of immediately prior to the Effective Time (and excluding, for the avoidance of doubt, any special cash-based retention awards)
and (iv) retirement, health and welfare benefits (including, but not limited to, any health, welfare, vacation and select time, severance
benefits and retirement benefits) that are substantially similar (including, if applicable, with respect to costs for the applicable
Continuing Employee) in the aggregate to the retirement, health and welfare (including, but not limited to, any health, welfare, vacation
and select time, severance benefits and retirement benefits) provided or available to the applicable Continuing Employee as of immediately
prior to the Effective Time.
In
addition, for fiscal year 2025, Parent will, and will cause its applicable subsidiary to, provide each Continuing Employee with a long-term
cash compensation opportunity that is substantially similar (including, at the discretion of Parent, shorter-term compensation opportunities
with a substantially similar quantum of payment opportunities) to the long-term equity compensation opportunity granted to such Continuing
Employee for fiscal year 2024, based on the dollar value of the target Shares covered by such long-term equity compensation opportunity
on the grant date, and excluding any special retention or similar equity-based compensation provided prior to the Effective Time.
During
the period commencing on the Closing Date and ending on the second anniversary thereof, the Surviving Corporation will provide each Continuing
Employee whose employment is terminated by Parent or one of its subsidiaries with severance benefits and on terms and conditions, in
each case, that are no less favorable than the severance benefits and protections existing as of the date of the Merger Agreement that
are identified in the company disclosure schedule.
Parent
has further agreed that, for fiscal years 2025 and 2026, it shall, or shall cause its applicable subsidiary to, continue to maintain
OSG’s annual bonus program for Continuing Employees who were OSG executive officers immediately prior to the Offer Acceptance Time,
with objective performance metrics equitably adjusted as needed to reflect the post-Closing structure of OSG (which, pursuant to such
adjustments, shall be no less favorable to such executive officers than the terms of OSG’s annual bonus program).
Parent
will cause any employee benefit plans of Parent and its subsidiaries in which the Continuing Employees are entitled to participate after
the Closing Date to take into account, for purposes of eligibility, vesting and benefit accruals (other than benefit accruals under any
defined benefit pension plan or as would result in a duplication of benefits), service prior to the Effective Time by such employees
to OSG and its subsidiaries (and any predecessors) as if such service were with Parent or its subsidiaries. With respect to any employee
benefit plans maintained by Parent and its subsidiaries for the benefit of the Continuing Employees following the Closing Date, Parent
will, and will cause the Surviving Corporation and its subsidiaries to, use commercially reasonable efforts to (i) waive any eligibility
requirements or pre-existing condition limitations or waiting period requirements with respect to any such plan providing medical, dental,
pharmaceutical, vision or mental health benefits to any Continuing Employee to the same extent waived under the analogous OSG benefit
plan prior to the Closing Date, and (ii) give effect, in determining any deductible, co-insurance and maximum out-of-pocket limitations,
to any eligible expenses paid by such employees during the calendar year in which the Effective Time occurs (or such later date on which
a Continuing Employee commences participation in any new plan of the Surviving Corporation and its subsidiaries) under analogous OSG
benefit plans.
Cooperation
with Transaction Financing. Parent and Purchaser have agreed to use reasonable best efforts to obtain the transaction debt financing
as contemplated by the Debt Commitment Letter on the terms and conditions (including the “market flex” provisions, provided
that such provisions do not reduce the amount or adversely affect the availability of the transaction debt financing to be funded at
Closing or the ability of Parent and Purchaser to timely pay the Required Payment Amount as contemplated by the Merger Agreement) described
therein at the Closing, and to not, without the prior written consent of OSG, agree to or permit any amendment or modification to be
made to, or any waiver of any provision under, the Debt Commitment Letter or the definitive agreements relating to such transaction debt
financing that (i) reduces the aggregate amount of the transaction debt financing (including by changing the amount of fees to be paid
or original issue discount of the transaction debt financing or similar fees), or (ii) imposes new or additional conditions precedent
or other terms of the transaction debt financing, otherwise adversely expands, amends or modifies any of the conditions precedent to
the transaction debt financing, or otherwise expands, amends or modifies any other provision of the Debt Commitment Letter, in the case
of clause (ii), in a manner that would reasonably be expected to (a) delay, prevent or impede the ability of Parent and Purchaser to
consummate the transactions contemplated by the Merger Agreement, (b) make the timely funding of the transaction debt financing contemplated
by the Debt Commitment Letter (or satisfaction of the conditions precedent to the transaction debt financing) or the timely payment of
all of Parent’s and Purchaser’s cash payment obligations under the Merger Agreement (the “Required Payment Amount”)
as contemplated by the Merger Agreement on the Closing Date less likely to occur or (c) adversely impact the ability of each of Parent
and Purchaser to enforce its rights against the other parties to the Debt Commitment Letter or the definitive agreements with respect
thereto, except that Parent and Purchaser may, without the consent of OSG, amend the Debt Commitment Letter to (1) add additional lenders,
arrangers, bookrunners and agents, (2) implement or exercise any of the “market flex” provisions (including pricing terms)
contained in the fee letter executed in connection with the Debt Commitment Letter, or (3) to reduce the size of Parent’s new credit
facility to an amount at least equal to $1.38 billion, if such amendments do not reduce the amount or adversely affect the availability
of the transaction debt financing to be funded at the Closing or the ability of Parent and Purchaser to timely pay the Required Payment
Amount as contemplated by the Merger Agreement.
Each
of Parent and Purchaser will use its reasonable best efforts (i) to maintain in effect the Debt Commitment Letter and comply with its
obligations thereunder, (ii) to enter into definitive agreements pursuant to the Debt Commitment Letter, consistent in all material respects
with the terms and conditions contained in the Debt Commitment Letter (including the “market flex” provisions, provided that
such provisions do not reduce the amount or adversely affect the availability of the transaction debt financing to be funded at Closing
or the ability of Parent and Purchaser to timely pay the Required Payment Amount as contemplated by the Merger Agreement), (iii) to satisfy
(or obtain the waiver of) on a timely basis all conditions precedent to funding in the Debt Commitment Letter and such definitive agreements
that are within Parent’s control and to consummate the transaction debt financing provided for thereunder at the Closing, and (iv)
enforce all of its respective rights under the Debt Commitment Letter and such definitive agreements, including in the event of a breach
(including an improper refusal to fund the debt contemplated by the Debt Commitment Letter) that impedes or delays the Closing by seeking
specific performance of the parties thereunder if necessary. Parent shall keep OSG reasonably informed in reasonable detail of the status
of its efforts to arrange the transaction debt financing and provide to OSG copies of the material definitive agreements with respect
to the transaction debt financing and provide OSG with prompt notice upon the occurrence of certain events specified by the Merger Agreement.
If all or any portion of the transaction debt financing under the Debt Commitment Letter becomes unavailable on the terms contemplated
thereby (including any “market flex” provisions applicable to the transaction debt financing) for any reason, and such portion
is reasonably required to pay the Required Payment Amount, then Parent will promptly notify OSG and Parent and Purchaser will use their
reasonable best efforts to arrange and obtain in replacement thereof alternative debt transaction debt financing from alternative sources
in an amount sufficient, when taken together with (i) available cash of Parent and its subsidiaries, (ii) available capacity on existing
credit facilities of Parent and its subsidiaries, (iii) cash of OSG in an amount that does not exceed the amount that, after giving effect
to all payments required to be made or funded by OSG in connection with the transactions contemplated by the Merger Agreement prior to
the Closing, would result in OSG having $25 million in cash on its consolidated balance sheet as of the Closing, and (iv) any then-available
transaction debt financing pursuant to the Debt Commitment Letter, to fund the Required Payment Amount with conditions not materially
less favorable (taken as a whole) to Parent and Purchaser than the conditions (taken as a whole) set forth in the Debt Commitment Letter,
as promptly as reasonably practicable following the occurrence of such event.
Indemnification
and Insurance. From and after the Effective Time, Parent and the Surviving Corporation must, jointly and severally, indemnify and
hold harmless (and advance funds in respect of each of the foregoing), to the fullest extent permitted under applicable law, each current
and former director, officer, employee or agent of OSG or any of its subsidiaries and each person who served as a director, officer,
member, trustee or fiduciary of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise
at the request of or for the benefit of OSG or any of its subsidiaries (collectively, together with such person’s heirs, executors
or administrators, the “Indemnified Parties”), against any loss, damage, liability, claim, demand, settlement, judgment,
award, fine, penalty, fee (including reasonable fees of attorneys, experts and other professionals), charge, interest, cost or expense
of any nature (collectively, “Damages”) arising out of, relating to or in connection with such Indemnified Parties’
service as a director, officer, employee or agent of OSG or any of its subsidiaries or a director, officer, member, trustee or fiduciary
of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise at the request of or
for the benefit of OSG or any of its subsidiaries (including in connection with any action or omission occurring or alleged to have occurred
whether before or after the Effective Time). For a period of six years from and after the Effective Time, the Surviving Corporation will,
and Parent will cause the Surviving Corporation to, (i) cause the certificate of incorporation and bylaws of the Surviving Corporation
to contain provisions that are at least as favorable to the Indemnified Parties with respect to indemnification, advancement of expenses,
and exculpation as those set forth in the certificate of incorporation and bylaws of OSG as of the date of the Merger Agreement, and
(ii) including any period during which a claim for indemnification is pending thereunder after the end of such six-year period, not repeal,
amend or otherwise modify those provisions in any manner except as required by applicable law. In addition, Parent and the Surviving
Corporation must pay all reasonable expenses (including attorneys’ fees) that may be incurred by any Indemnified Party in enforcing
the foregoing indemnity and the other obligations described above, subject to a receipt of an undertaking from any applicable Indemnified
Party to whom expenses are advanced that such Indemnified Party will repay all such advances if it is ultimately determined by final
and unappealable order that such Indemnified Party is not entitled to be indemnified or entitled to such advanced expenses.
In
addition, for a period of six years from the Effective Time, Parent must cause to be maintained in effect the current policies of directors’
and officers’ liability insurance and fiduciary liability insurance maintained by OSG and its subsidiaries with respect to matters
arising on or before the Effective Time; provided that after the Effective Time, Parent will not be required to pay annual premiums in
excess of 300% of the last annual premium paid by OSG prior to the date of the Merger Agreement in respect of the foregoing coverage,
but in such case will purchase as much coverage as reasonably practicable for such amount. Prior to the Offer Acceptance Time, OSG will
obtain a six-year prepaid “tail” policy on terms and conditions providing substantially equivalent benefits as the current
policies of directors’ and officers’ liability insurance, fiduciary liability insurance and employment practices liability
insurance maintained by OSG and its subsidiaries with respect to matters arising on or before the Effective Time, covering without limitation
the transactions contemplated by the Merger Agreement. For any such “tail” prepaid policy obtained by OSG prior to the Offer
Acceptance Time, Parent will cause such policy to be maintained in full force and effect, for its full term, and cause all obligations
thereunder to be honored by the Surviving Corporation.
For
additional information, please refer to OSG’s Schedule 14D-9 being mailed to stockholders with this Offer to Purchase.
Coordination
of Transaction Litigation. OSG, on the one hand, and Parent and Purchaser, on the other hand, have agreed to keep the other reasonably
informed on a current basis with respect to any actions commenced against it or any of its affiliates arising from or relating to the
Merger Agreement or the transactions contemplated by the Merger Agreement (“Transaction Litigation”), to reasonably
consult with the other and give consideration to the other’s advice regarding Transaction Litigation, and to give the other the
opportunity to participate at its or their own expense in the defense, settlement or prosecution of any Transaction Litigation, provided
that OSG will in any event control any such defense, settlement or prosecution and OSG may not compromise, settle or agree to compromise
or settle any Transaction Litigation unless Parent has consented in writing (such consent not to be unreasonably withheld, delayed or
conditioned).
Conditions
to the Completion of the Offer and the Merger. The Offer Conditions are described in “The Tender Offer—Section 15.
Conditions of the Offer.” In addition, each party’s obligation to complete the Merger is subject to the satisfaction
or waiver at or prior to the Effective Time of the following conditions:
| ● | no
governmental entity of competent jurisdiction having enacted or promulgated any law, rule
or regulation or issued any order after the date of the Merger Agreement that is in effect
and restrains, enjoins or otherwise prohibits the consummation of the Merger; and |
| ● | Purchaser
(or Parent on Purchaser’s behalf) having irrevocably accepted for payment all Shares
validly tendered and not validly withdrawn pursuant to the Offer and consummated the Offer. |
Termination.
The Merger Agreement may be terminated, and the Offer and the Merger may be abandoned, in the following circumstances at any time prior
to the Offer Acceptance Time:
| ● | by
the mutual written consent of OSG and Parent; |
| ● | by
either OSG or Parent: |
| ○ | if
the Offer Acceptance Time has not occurred on or before one minute after 11:59 p.m., New
York City time, on the Termination Date; provided that the right to terminate the Merger
Agreement pursuant to the termination provision referred to in this bullet point will not
be available to a party if the failure of the Offer to have been completed on or before the
Termination Date was primarily caused by the failure of such party to perform any of its
obligations under the Merger Agreement; |
| ○ | if
the Offer has expired in accordance with its terms without the Minimum Condition having been
satisfied or the other Offer Conditions having been satisfied or waived by Parent, in each
case without the acceptance for payment of any Shares validly tendered in the Offer; provided
that the right to terminate the Merger Agreement pursuant to the termination provision referred
to in this bullet point will not be available to any party whose failure to satisfy any agreements
or covenants under the Merger Agreement has primarily caused or resulted in the non-satisfaction
of the Minimum Condition or any of the other Offer Conditions or the non-acceptance for payment
of Shares validly tendered in the Offer; or |
| ○ | if
a court or other governmental entity of competent jurisdiction has enacted or promulgated
any law, rule or regulation or issued any order after the date of the Merger Agreement that
has become final and non-appealable and that restrains, enjoins or otherwise prohibits the
acquisition of or payment for the Shares pursuant to the Offer or the consummation of the
Merger; provided that the right to terminate the Merger Agreement pursuant to the termination
provision referred to in this bullet point will not be available to a party if the enactment,
promulgation, or issuance of such law or order, or such law or order becoming final and non-appealable,
was primarily caused by the failure of such party to perform any of its obligations under
the Merger Agreement. |
| ○ | in
order to substantially concurrently enter into an Alternative Acquisition Agreement providing
for a Superior Proposal in accordance with the Merger Agreement, subject to complying with
the terms of the Merger Agreement; provided that prior to or substantially concurrently with,
and as a condition to, such termination, OSG pays to Parent (or its designee) the Company
Termination Fee described below; or |
| ○ | if
Parent or Purchaser has breached any of its representations, warranties, covenants or agreements
in the Merger Agreement, which breach (i) could reasonably be expected to prevent Parent
or Purchaser from consummating the Offer and (ii) is either not capable of being cured before
the Termination Date or is not cured before the earlier of 20 business days following receipt
of written notice from OSG of such breach or the Termination Date; provided that OSG will
not have the right to terminate the Merger Agreement pursuant to the termination provision
referred to in this bullet point if it is then in breach of any of its representations, warranties,
covenants or agreements in the Merger Agreement, such that any Offer Condition or any condition
to the obligations of Parent and Purchaser to consummate the Merger would not then be satisfied
if the Closing Date were the date of such termination; |
| ○ | if
the OSG Board has made a Change of Recommendation; or |
| ○ | if
OSG has breached any of its representations, warranties, covenants or agreements in the Merger
Agreement, which breach (i) would give rise to the failure of the Offer Condition with respect
to OSG’s representations and warranties being true and correct or the Offer Condition
with respect to OSG’s compliance with or performance of its agreements and covenants
in the Merger Agreement in all material respects and (ii) is either not capable of being
cured before the Termination Date or is not cured before the earlier of 20 business days
following receipt of written notice from Parent of such breach or the Termination Date; provided
that neither Parent nor Purchaser will have the right to terminate the Merger Agreement pursuant
to the termination provision referred to in this bullet point if either of them is then in
material breach of any of their representations, warranties, covenants or agreements in the
Merger Agreement. |
Company
Termination Fee. OSG will pay Parent (or its designee) a termination fee in an amount equal to approximately $19.6 million (the “Company
Termination Fee”) in the following circumstances:
| ● | if
the Merger Agreement is terminated by OSG at any time prior to the Offer Acceptance Time,
in order to substantially concurrently enter into an Alternative Acquisition Agreement providing
for a Superior Proposal; |
| ● | if
the Merger Agreement is terminated by Parent because the OSG Board has made a Change of Recommendation;
or |
| ● | if
all of the following conditions are satisfied: |
| ○ | the
Merger Agreement is terminated by (i) either OSG or Parent because the Offer Acceptance Time
has not occurred on or prior to the Termination Date (and at the time of such termination,
Parent and Purchaser are then permitted to terminate the Merger Agreement on account of the
Offer expiring in accordance with its terms without the Minimum Condition or the other Offer
Conditions having been satisfied or waived by Parent), (ii) by Parent on account of the Offer
expiring in accordance with its terms without the Minimum Condition or the other Offer Conditions
having been satisfied or waived by Parent (but only if the Offer Conditions relating to the
issuance of a law or order by a governmental entity and to the expiration or termination
of the waiting period under the HSR Act have been satisfied but the Minimum Condition has
not been satisfied) or (iii) by Parent due a breach of any representation, warranty, covenant
or agreement of OSG in the Merger Agreement that cannot be, or has not been, cured; |
| ○ | any
person has publicly proposed, announced or made an Acquisition Proposal (or in the case of
a termination for a breach by OSG, an Acquisition Proposal has been made to OSG’s management,
the OSG Board or any committee thereof) after the date of the Merger Agreement and prior
to the Offer Acceptance Time and has not been withdrawn prior to such termination; and |
| ○ | within
12 months after the termination, OSG consummates an Acquisition Proposal or the OSG Board
approves, or OSG enters into, a definitive agreement for an Acquisition Proposal that is
subsequently consummated (whether or not within such 12-month period or thereafter); provided
that, for purposes of the provision referred to in this bullet point and the preceding bullet
point, the references to “20%” in the definition of “Acquisition Proposal”
are deemed to be references to “50%”. |
In
no event will OSG be required to pay the Company Termination Fee on more than one occasion (whether or not the Company Termination Fee
may be payable under more than one provision of the Merger Agreement at the same or at different times and upon the occurrence of different
events). OSG, Parent and Purchaser have agreed that any amounts payable by OSG pursuant to the termination provisions of the Merger Agreement,
including the Company Termination Fee, do not constitute a penalty but rather constitute liquidated damages in a reasonable amount that
will compensate Parent for the disposition of its rights under the Merger Agreement in the circumstances in which such amounts are due
and payable, which amounts would otherwise be impossible to calculate with precision. Parent’s receipt of the Company Termination
Fee will be the sole and exclusive remedy (whether at law, in equity, in contract, tort or otherwise) of Parent and its affiliates for
Damages suffered as a result of the failure of the transactions contemplated by the Merger Agreement to be consummated and any other
Damages suffered as a result of or under the Merger Agreement and transactions contemplated thereby, and upon payment of the Company
Termination Fee, none of OSG, its subsidiaries or any of their related parties shall have any further liability relating to or arising
out of the Merger Agreement or the transactions contemplated thereby; provided, that the foregoing shall not relieve any party from liability
for actual and intentional fraud under Delaware law or a willful breach of the Merger Agreement prior to any termination or impair the
rights of Parent and Purchaser, if any, to obtain injunctive relief pursuant to the terms of the Merger Agreement prior to any termination
thereof or to compel the payment by OSG of the Company Termination Fee.
Limitation
on Remedies. In the event of the termination of the Merger Agreement and the abandonment of the Offer and the Merger in accordance
with the provisions described above, the Merger Agreement will become void and of no effect with no liability to any party, except that
no such termination will relieve any party from any Damages resulting from actual and intentional fraud under Delaware law or a willful
breach of the Merger Agreement prior to any termination, in which case the non-breaching party shall be entitled to all rights and remedies
available at Law or in equity. In addition, certain sections of the Merger Agreement, including, among others, sections relating to termination,
the Company Termination Fee and expenses and confidentiality, will survive termination. Subject to the terms of the Merger Agreement,
in the case of willful breach of the Merger Agreement by Parent or Purchaser, OSG has the right, as the sole and exclusive agent for
and on behalf of the stockholders of OSG (as third party beneficiaries under the Merger Agreement solely with respect to the provisions
expressly identified therein), to pursue any Damages, including Damages based on loss of the economic benefit of the transactions contemplated
by the Merger Agreement and loss of other opportunities to OSG and the stockholders of OSG.
Expenses.
Except as otherwise provided in the Merger Agreement, whether or not the Offer and the Merger are completed, all costs and expenses
incurred in connection with the Merger Agreement and the transactions contemplated by the Merger Agreement will be paid by the party
incurring such expense, except that all filing fees under the HSR Act in connection with the transactions contemplated by the Merger
Agreement will be borne by Parent.
Amendment
and Modification. Subject to the provisions of applicable law, the Merger Agreement may be modified or amended by written agreement
executed and delivered by the duly authorized officers of each of the respective parties; provided that no amendment may be made after
the Offer Acceptance Time and that the provisions of the Merger Agreement to which the lenders under the Debt Commitment Letter and their
respective representatives are third party beneficiaries may not be amended in any way adverse to such lenders or their representatives
without the prior written consent of such lenders.
Governing
Law. The Merger Agreement is governed by Delaware law; except that any claim brought against the lenders party to the Debt Commitment
Letter or their representatives arising out of or relating to the Merger Agreement or any of the transactions contemplated by the Merger
Agreement shall be governed by New York law.
Jurisdiction;
Specific Enforcement. Under the Merger Agreement, each of the parties has agreed that it will bring any action or proceeding in respect
of any claim arising out of or relating to the Merger Agreement or the transactions contemplated by the Merger Agreement exclusively
in the Court of Chancery of the State of Delaware or, if that court lacks or declines to accept jurisdiction, another federal or state
court located in the State of Delaware. However, each of the parties has agreed that it will not be permitted to bring or support any
action or claim against the lenders party to the Debt Commitment Letters or their affiliates or representatives arising out of or relating
to the Merger Agreement or any of the transactions contemplated by the Merger Agreement in any forum other than any state or federal
court sitting in the State of New York, County of New York.
Each
of the parties has agreed that if, for any reason, any of the provisions of the Merger Agreement are not performed in accordance with
their specific terms or are otherwise breached or threatened to be breached, irreparable damage would occur for which monetary damages
would not be an adequate remedy. Accordingly, in addition to any other available remedies a party may have in equity or at law, each
party will be entitled to an injunction, specific performance and other equitable relief to prevent breaches or threatened breaches of
the Merger Agreement and to enforce specifically the terms and provisions of the Merger Agreement. In the event of a failure or threatened
failure of Parent to enforce the terms of the Debt Commitment Letter, OSG will be entitled to specific performance to cause Parent to
enforce the terms of the Debt Commitment Letter (or any financing agreements related thereto or related to the alternative financing),
as applicable. Pursuant to the Merger Agreement, each of the parties has agreed that it will not oppose the granting of an injunction,
specific performance and other equitable relief on the basis that there is adequate remedy at law or that an award of specific performance
is not an appropriate remedy.
Summary
of the Non-Disclosure Agreement. On February 27, 2024, OSG and Parent entered into the Confidentiality Agreement, pursuant to which
Parent agreed, subject to certain exceptions, to keep confidential all proprietary, nonpublic and/or confidential information about OSG
or its businesses, affairs, assets, properties or prospects furnished in connection with a potential transaction. Pursuant to the Confidentiality
Agreement, Parent also agreed to certain “standstill” restrictions for a period of twelve months following the date of the
Confidentiality Agreement (subject to immediate expiration under certain circumstances), including with respect to offers or proposals
to acquire OSG (other than offers and proposals submitted directly to the OSG Board or senior management team on a confidential basis)
and acquisitions of ownership of securities of OSG. Pursuant to the Confidentiality Agreement, Parent also agreed to customary non-solicitation
restrictions and restrictions on contacting employees, customers and suppliers of OSG for a period of twelve months following the date
of the Confidentiality Agreement. Parent’s obligations under the Confidentiality Agreement will expire 18 months after the date
of the Confidentiality Agreement, except as set forth above or as otherwise provided therein.
This
summary and description of the material terms of the Confidentiality Agreement does not purport to be complete and is qualified in its
entirety by reference to the Confidentiality Agreement, which is filed as Exhibit (d)(2) to the Schedule TO and is incorporated by reference
herein.
Summary
of the Good Reason Waivers and Transaction Bonus Letter. Concurrently with the execution of the Merger Agreement, (i) Parent
and OSG entered into a letter agreement with each of Samual H. Norton, OSG’s Chief Executive Officer and President, Patrick J.
O’Halloran, OSG’s Vice President and Chief Operations Officer, Damon M. Mote, OSG’s Vice President and Chief Administrative
Officer, and Susan Allan, OSG’s Vice President, General Counsel and Corporate Secretary, providing for (1) an acknowledgment from
each such executive that the consummation of the Offer and the Merger and any changes to such executives’ duties and responsibilities
reasonably resulting from OSG ceasing to be a public company as a result of the Offer and the Merger will not constitute “Good
Reason” under such executives’ existing employment agreement, (2) certain parameters with respect to the future negotiation
in good faith of new employment agreements among such executives, Parent and OSG and (3) a transaction bonus to be paid to such executives
by OSG following the consummation of the Merger and (ii) OSG entered into a letter agreement with Richard Trueblood, OSG’s Vice
President and Chief Financial Officer, regarding a transaction bonus to be paid to him by OSG following the consummation of the Merger
(the “Transaction Bonus Letter”).
This
summary and description of the material terms of the Good Reason Waivers and the Transaction Bonus Letter does not purport to be complete
and is qualified in its entirety by reference to the Good Reason Waivers and the Transaction Bonus Letter, which are filed as Exhibits
(d)(3) — (d)(7) to the Schedule TO and are incorporated in this document by reference.
| 12. | PURPOSE
OF THE OFFER AND PLANS FOR OSG. |
Purpose
of the Offer. Parent, through Purchaser, has undertaken to acquire control of, and the entire equity interest in, OSG because Parent
believes that Parent would be an ideal long-term home for OSG. OSG is a niche business having a core focus on the shipping of crude oil,
petroleum and renewable transportation fuels under the Jones Act, which would complement and diversify Parent’s business. If the
Offer is consummated, OSG will become a wholly-owned subsidiary of Parent and operate as a stand-alone operating company and Parent’s
seventh business unit. OSG would add a complementary third major operating company engaged in shipping to Parent’s business, while
providing end-market diversification (energy versus consumer goods). Parent believes that, by its nature, OSG’s business has multi-decade
investment cycles and shorter-term economic cycles, both of which are better supported by a privately held family business versus being
traded in the public markets. Parent seeks to operate OSG as a private corporation going forward because Parent believes that this transaction
will reduce regulatory compliance costs. Further, Parent has significant experience with, and confidence in the future of, the Jones
Act and the benefits that it provides the United States. Pursuant to the Merger, Parent will acquire any Shares of OSG not purchased
pursuant to the Offer or otherwise. The United States citizenship and cabotage laws principally contained in 46 U.S.C. § 50501 and
46 U.S.C. Chapter § 551, as well as 46 U.S.C. § 56101, each as amended from time to time and any successor or replacement statutes,
and the regulations promulgated thereunder relating to the ownership and operation of U.S. flag vessels in the United States coastwide
trade are referred to herein as the “Jones Act”.
The
OSG Stockholders who sell their Shares in the Offer will cease to have any equity interest in OSG or any right to participate in its
earnings and future growth.
Merger
Without a Stockholder Vote. If the Offer is consummated, we do not anticipate seeking the approval of OSG’s remaining public
stockholders before effecting the Merger. Section 251(h) of the DGCL provides that following consummation of a successful tender offer
for a public corporation, and subject to certain statutory provisions, if the stock irrevocably accepted for purchase pursuant to such
offer, together with the stock otherwise owned by the corporation making the offer and its affiliates and any “rollover stock”
(as defined in Section 251(h) of the DGCL), equals at least the amount of shares of each class of stock of the target corporation that
would otherwise be required to adopt a merger agreement for the target corporation, and the other stockholders receive the same consideration
for their stock in the merger as was payable in the tender offer, the acquiring corporation can effect a merger without the action of
the other stockholders of the target corporation. Accordingly, if we consummate the Offer, we intend to effect the closing of the Merger
without a vote of the stockholders of OSG in accordance with Section 251(h) of the DGCL, upon the terms and subject to the satisfaction
or waiver of the conditions to the Merger, promptly after the consummation of the Offer. Accordingly, we do not expect there to be a
significant period of time between the consummation of the Offer and the consummation of the Merger.
Plans
for OSG. Immediately following the Effective Time, the certificate of incorporation of OSG will be amended and restated in its entirety
to conform to the certificate of incorporation of Purchaser, except that references to the name of Purchaser will be replaced by references
to the name of the Surviving Corporation and except with respect to provisions naming the initial board of directors and the incorporator,
which will be omitted. Immediately following the Effective Time, the bylaws of the Surviving Corporation will be amended and restated
to conform to the bylaws of Purchaser as in effect immediately prior to the Effective Time, except that references to the name of Purchaser
will be replaced by references to the name of the Surviving Corporation. The directors of Purchaser immediately prior to the Effective
Time will be the initial directors of the Surviving Corporation, and the officers of the Surviving Corporation shall be the respective
individuals who served as the officers of OSG as of immediately prior to the Effective Time, in each case, until their respective successors
are duly elected and qualified, or their earlier death, resignation or removal. Promptly following the Effective Time, Parent anticipates
that (i) Mr. Samual H. Norton, OSG’s Chief Executive Officer and President, will be appointed as a director of the Surviving Corporation
by Parent, and (ii) Mr. Jerald W. Richards will be appointed as Assistant Secretary of the Surviving Corporation. See “The Tender
Offer—Section 11. Summary of the Merger Agreement and Certain Other Agreements—Effects of the Merger; Directors and Officers;
Certificate of Incorporation; Bylaws” below.
At
the Effective Time, Purchaser will be merged with and into OSG, the separate existence of Purchaser will cease, and OSG will continue
as the Surviving Corporation in the Merger. The common stock of OSG will be delisted and will no longer be traded on the NYSE, OSG’s
obligation to file periodic reports under the Exchange Act will be suspended, and OSG will be privately held.
Except
as disclosed in this Offer to Purchase, Parent and Purchaser do not have any present plan or proposal that would result in the acquisition
by any person of additional securities of OSG, the disposition of securities of OSG, an extraordinary corporate transaction, such as
a merger, reorganization or liquidation, involving OSG or any of its subsidiaries or the purchase, sale or transfer of a material amount
of assets of OSG or any of its subsidiaries.
As
provided in the Merger Agreement, at the Closing, Parent will repay, or cause to be repaid, the indebtedness of OSG and its subsidiaries
under the Credit Agreements required to be repaid at Closing in accordance with the Payoff Letters. See “The Tender Offer—Section
11. Summary of the Merger Agreement and Certain Other Agreements—Repayment of Indebtedness.” Following the Effective
Time, OSG will become a guarantor of Parent’s obligations under the Parent Credit Agreement and the Master Note Purchase Agreement.
See “The Tender Offer—Section 9. Source and Amount of Funds.”
Parent,
OSG and certain executive officers of OSG intend to negotiate in good faith new employment agreements between such executives, on the
one hand, and Parent and OSG, on the other hand. See “The Tender Offer—Section 10. Background of the Offer; Contacts
with OSG” and “The Tender Offer—Section 11. Summary of the Merger Agreement and Certain Other Agreements—Summary
of the Good Reason Waivers.” Further, the Merger Agreement addresses various matters affecting compensation and benefits of
OSG employees following the Effective Time, including the executive officers of OSG. See “The Tender Offer—Section 11.
Summary of the Merger Agreement and Certain Other Agreements—Treatment of Outstanding Equity Awards” and “—Employee
Matters.”
| 13. | CERTAIN
EFFECTS OF THE OFFER. |
Possible
Effects of the Offer on the Market for the Shares; NYSE Listing. Immediately following consummation of the Offer and satisfaction
or waiver (to the extent permitted by applicable law) of the conditions to the Merger, we expect to complete the Merger pursuant to applicable
provisions of the DGCL, after which the OSG will continue as the Surviving Corporation in the Merger and as a wholly owned subsidiary
of Parent. Immediately following the consummation of the Merger, the Shares will be delisted from the NYSE, OSG’s obligations to
file periodic reports under the Exchange Act will be suspended, and OSG will be privately held. As a result, there will be no market
for the Shares if the Offer and Merger are consummated.
Trading
in the Shares will cease upon consummation of the Merger if trading has not ceased earlier as discussed above. See “The Tender
Offer—Section 12. Purpose of the Offer and Plans for OSG.”
Exchange
Act Registration. The Shares currently are registered under the Exchange Act. The purchase of the Shares pursuant to the Offer may
result in the Shares becoming eligible for deregistration under the Exchange Act. Registration of the Shares may be suspended by OSG
upon application to the SEC if the outstanding Shares are not listed on a “national securities exchange” and if there are
fewer than 300 holders of record of Shares.
We
intend to seek to cause OSG to apply for suspension of registration of the Shares as soon as possible after consummation of the Offer
if the requirements for suspension of registration are met. Suspension of registration of the Shares under the Exchange Act would reduce
the information required to be furnished by OSG to its stockholders and to the SEC and would make certain provisions of the Exchange
Act (such as the short-swing profit recovery provisions of Section 16(b), the requirement of furnishing a proxy statement or information
statement in connection with stockholders’ meetings or actions in lieu of a stockholders’ meeting pursuant to Sections 14(a)
and 14(c) under the Exchange Act and the related requirement of furnishing an annual report on Form 10-K to stockholders) no longer applicable
with respect to the Shares. In addition, if the Shares are no longer registered under the Exchange Act, the requirements of Rule 13e-3
under the Exchange Act with respect to “going private” transactions would no longer be applicable to OSG. Furthermore, the
ability of “affiliates” of OSG and persons holding “restricted securities” of OSG to dispose of such securities
pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), may be impaired or eliminated.
If registration of the Shares under the Exchange Act were suspended, the Shares would no longer be eligible for continued inclusion on
the Board of Governors of the Federal Reserve System’s (the “Federal Reserve Board”) list of “margin securities”
or eligible for stock exchange listing.
If
registration of the Shares is not suspended prior to the Merger, then the registration of the Shares under the Exchange Act will be suspended
following completion of the Merger.
Margin
Regulations. The Shares are currently “margin securities” under the regulations of the Federal Reserve Board, which has
the effect, among other things, of allowing brokers to extend credit using such Shares as collateral. Depending upon factors similar
to those described above regarding listing and market quotations, following the Offer, the Shares may no longer constitute “margin
securities” for the purposes of the margin regulations of the Federal Reserve Board, in which event the Shares would be ineligible
as collateral for margin loans made by brokers.
| 14. | DIVIDENDS
AND DISTRIBUTIONS. |
In
each of December 2023 and March 2024, OSG’s Board of Directors declared a cash dividend of $0.06 per Share. In the Annual Report,
OSG stated that the declaration and timing of future cash dividends, if any, will be at the discretion of the OSG Board and will depend
upon, among other things, OSG’s future operations and earnings, capital requirements, general financial condition, contractual
restrictions, restrictions imposed by applicable law and such other factors as the OSG Board may deem relevant and that, in addition,
OSG’s ability to pay cash dividends in the future may be limited by certain of OSG’s loan agreements. Under the terms of
the Merger Agreement, OSG is not permitted to declare, set aside or pay any dividends on or make other distributions in respect of any
of its capital stock or equity securities (other than dividends or distributions by a wholly owned subsidiary of OSG to OSG or to another
wholly owned subsidiary of OSG), except that if the Offer Acceptance Time has not occurred on or prior to August 31, 2024, the OSG Board
may declare and OSG may pay to holders of Shares in cash each regular quarterly dividend that would have otherwise been declared and
paid after August 31, 2024 in an amount per Share not to exceed $0.06 per quarter and with record and payment dates consistent with past
practice of OSG and corresponding distributions to the holders of Company Warrants in respect of the Shares into which the Company Warrants
are exercisable. Stockholders are urged to obtain a current market quotation for the Shares. See “Section 11. Summary of the
Merger Agreement and Certain Other Agreements.”
| 15. | CONDITIONS
OF THE OFFER. |
Purchaser’s
obligation to accept for payment Shares tendered in the Offer is subject to the satisfaction or waiver of certain conditions. Purchaser
will not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under
the Exchange Act (relating to Purchaser’s obligation to pay for or return tendered Shares promptly after the termination or withdrawal
of the Offer), to pay for any Shares tendered pursuant to the Offer and, subject to the terms of the Merger Agreement, may delay the
acceptance for payment of or payment for Shares or may terminate or amend the Offer, if, at any scheduled Expiration Date (as it may
have been extended as described “The Tender Offer—Section 1. Terms of the Offer”):
| (i) | The
Minimum Condition shall not have been satisfied. The “Minimum Condition” means
that the number of Shares validly tendered and “received” (within the meaning
of Section 251(h) of the DGCL) and not validly withdrawn prior to the expiration of the Offer
(excluding any Shares tendered pursuant to guaranteed delivery procedures that have not yet
been “received” (within the meaning of Section 251(h) of the DGCL)), together
with any Shares owned by Parent, Purchaser, or any of their respective affiliates as of the
Expiration Date, equals at least one (1) Share more than a majority of all issued and outstanding
Shares as of the Expiration Date, other than any Shares held in treasury by OSG as of the
expiration of the Offer or any other Shares acquired by OSG prior to the expiration of the
Offer; or |
| (ii) | any
of the following conditions shall exist or shall have occurred and be continuing: |
| (A) | any
governmental entity of competent jurisdiction shall have enacted or promulgated any law,
rule or regulation after the date of the Merger Agreement or issued any order after the date
of the Merger Agreement that is in effect as of such time and restrains, enjoins or otherwise
prohibits the acquisition of or payment for the Shares pursuant to the Offer or consummation
of the Merger; |
| (B) | (1)
any representation or warranty of OSG set forth in Section 5.3(a) of the Merger Agreement
shall not be true and correct in all respects, except for inaccuracies that are de minimis,
as of the Offer Acceptance Time as if made at and as of the Offer Acceptance Time (except
to the extent such representations and warranties speak as of a specified date, in which
case they need only be true and correct as of such specified date), (2) any representation
or warranty of OSG set forth in Section 5.1, the first sentence of Section 5.3(b), Section
5.21, and Section 5.22 of the Merger Agreement shall not be true and correct in all material
respects as of the Offer Acceptance Time as if made at and as of the Offer Acceptance Time
(except to the extent such representations and warranties speak as of a specified date, in
which case they need only be true and correct as of such specified date) and (3) any representation
or warranty of OSG set forth in Article V of the Merger Agreement (other than those set forth
in Section 5.1, Section 5.3(a), the first sentence of Section 5.3(b), Section 5.21, and Section
5.22 of the Merger Agreement) shall not be true and correct (interpreted without giving effect
to the words “materially” or “material” or to any qualifications
based on such terms or based on the term “Company Material Adverse Effect”) as
of the Offer Acceptance Time as if made at and as of the Offer Acceptance Time (except to
the extent such representations and warranties speak as of a specified date, in which case
they need only be true and correct as of such specified date), except where the failure of
such representations and warranties to be true and correct, in the aggregate, does not constitute
a Company Material Adverse Effect; |
| (C) | OSG
shall have failed to perform or comply in all material respects with its agreements and covenants
in the Merger Agreement that are required to be performed or complied with by it at or prior
to the Offer Acceptance Time; |
| (D) | Parent
and Purchaser shall have failed to receive from OSG a certificate, signed by an executive
officer of OSG and dated as of the Offer Acceptance Time, to the effect that the Offer Conditions
set forth in clauses (B) and (C) above and clause (E) below have been satisfied; |
| (E) | any
Company Material Adverse Effect has occurred since the date of the Merger Agreement; |
| (F) | the
waiting period (and any extension thereof) applicable to the Offer under the HSR Act shall
not have expired or been terminated; or |
| (G) | the
Merger Agreement has been terminated in accordance with its terms. |
The
foregoing conditions are for the sole benefit of Parent and Purchaser and, subject to the terms and conditions of the Merger Agreement
and the applicable rules and regulations of the SEC, may be waived by Parent and Purchaser in whole or in part at any time and from time
to time in their sole discretion (other than the Minimum Condition, which may only be waived with the prior written consent of OSG).
In accordance with SEC rules and regulations, upon discovery of a condition that gives rise to termination of the Offer, Parent and Purchaser
will undertake to promptly notify the OSG Stockholders of a decision to either terminate the Offer, or to waive the condition and proceed
with the Offer.
| 16. | CERTAIN
LEGAL MATTERS; REGULATORY APPROVALS; APPRAISAL RIGHTS. |
General.
Except as otherwise set forth in this Offer to Purchase, based on Parent’s and Purchaser’s review of publicly available filings
by OSG with the SEC and other information regarding OSG, Parent and Purchaser are not aware of any licenses or other regulatory permits
which appear to be material to the business of OSG and which might be adversely affected by the acquisition of Shares by Purchaser pursuant
to the Offer or of any approval or other action by any governmental, administrative or regulatory agency or authority which would be
required for the acquisition or ownership of Shares by Purchaser or Parent pursuant to the Offer. In addition, except as set forth below,
Parent and Purchaser are not aware of any filings, approvals or other actions by or with any governmental body or administrative or regulatory
agency that would be required for Parent’s and Purchaser’s acquisition or ownership of the Shares. Should any such approval
or other action be required, Parent, Purchaser and OSG have agreed to use reasonable best efforts to, as expeditiously as reasonably
practicable, (i) obtain all necessary permits, waivers, and actions or nonactions from governmental entities, and make all necessary
registrations, filings and notifications (including filings with governmental entities), (ii) execute and deliver any additional instruments
necessary to consummate the Offer and the Merger, and (iii) resolve questions or objections, if any, as may be asserted by a governmental
entity with respect to the Merger Agreement. The parties currently expect that no such approval or action would be sought or taken. There
can be no assurance that any such approval or action, if needed, would be obtained or, if obtained, that it will be obtained without
substantial conditions; and there can be no assurance that, in the event that such approvals were not obtained or such other actions
were not taken, adverse consequences might not result to OSG’s or Parent’s business or that certain parts of OSG’s
or Parent’s business might not have to be disposed of or held separate. In such an event, we may not be required to purchase any
Shares in the Offer. See “The Tender Offer—Section 15. Conditions of the Offer.”
Antitrust.
Under the HSR Act and the related rules and regulations that have been promulgated thereunder by the FTC, certain acquisition transactions
may not be consummated unless certain information and documentary materials have been furnished to the Antitrust Division and the FTC
in Notification and Report Forms filed by acquiring and acquired persons, and certain waiting period requirements have been satisfied.
The requirements of the HSR Act apply to the acquisition of Shares in the Offer and the Merger.
Under
the HSR Act and the rules and regulations promulgated thereunder by the FTC, the waiting period for a cash tender offer is fifteen (15)
days from the date of filing by the acquiring person. Historically, the Antitrust Division and the FTC would grant early termination
of the waiting period for certain transactions upon request by the filing parties; however, the Antitrust Division and the FTC have suspended
this practice, although it could be reinstated prior to closing. The waiting period may be lengthened if the acquiring person voluntarily
withdraws and re-files its Notification and Report Form to allow a second 15-day waiting period, or if the reviewing agency issues a
formal request for additional information and documentary material, in which case the waiting period expires ten (10) days after the
date on which both parties have certified substantial compliance with such request. Parent and OSG intend to submit their respective
HSR filings on June 10, 2024, in which case the 15-day waiting period would expire at 11:59 p.m. Eastern Time on June 25, 2024, unless
otherwise extended.
The
FTC and the Antitrust Division will consider the legality under the antitrust laws of the Purchaser’s proposed acquisition of Shares
pursuant to the Offer. At any time before or after the consummation of any such transactions, the Antitrust Division or the FTC could
take such action under the antitrust laws of the United States as it deems necessary or desirable in the public interest, including seeking
a federal court order enjoining the transaction or, if Shares have already been acquired, requiring disposition of such Shares, or the
divestiture of substantial assets of OSG, Purchaser, Parent or any of their respective subsidiaries or affiliates. Private parties and
individual states of the United States may also bring legal actions under the antitrust laws of the United States or state antitrust
laws seeking similar relief or seeking conditions to the completion of the Offer. While Parent and OSG do not believe that the consummation
of the Offer and the Merger will violate applicable antitrust laws, there can be no assurance that a challenge to the Offer on antitrust
grounds will not be made or, if a challenge is made, what the result will be. See “The Tender Offer—Section 15. Conditions
of the Offer.”
Stockholder
Approval Not Required. Assuming the Offer and the Merger are consummated in accordance with Section 251(h) of the DGCL, OSG has represented
in the Merger Agreement that execution, delivery and performance of the Merger Agreement by OSG and the consummation by OSG of the Offer
and the Merger have been duly validly authorized by all necessary corporate action on the part of OSG, and no other corporate proceedings
on the part of OSG are necessary to authorize the Merger Agreement or to consummate the Offer and the Merger. Section 251(h) of the DGCL
provides that approval by stockholders of a public constituent company in a merger is not required if certain requirements are met, including
that: (i) the acquiring company consummates an offer for all of the outstanding stock of the company to be acquired that, absent Section
251(h) of the DGCL, would be entitled to vote on such merger, provided, however, among other things, that such offer may be conditioned
on the tender of a minimum number or percentage of shares of stock, and such offer may exclude any “excluded stock” (as defined
in Section 251(h) of the DGCL), which includes stock that is owned at the commencement of the offer by any person that owns, directly
or indirectly, all of the outstanding stock of the corporation making the offer; (ii) immediately following the consummation of such
tender offer, the stock irrevocably accepted for purchase pursuant to the offer, together with the stock otherwise owned by the consummating
company and its affiliates and any “rollover stock” (as defined in Section 251(h) of the DGCL), equals at least such percentage
of the stock of the company to be acquired that, absent Section 251(h) of the DGCL, would be required to adopt the merger agreement;
and (iii) the stockholders at the time of the merger receive the same consideration for their stock in the merger as was payable in the
tender offer. If the Minimum Condition is satisfied and we accept Shares for payment pursuant to the Offer, we will hold a sufficient
number of Shares to ensure that OSG will not be required to submit the adoption of the Merger Agreement to a vote of its stockholders.
Following the consummation of the Offer and subject to the satisfaction of the remaining conditions set forth in the Merger Agreement,
Purchaser, Parent and OSG will take all necessary and appropriate action to effect the Merger as promptly as practicable without a meeting
of stockholders of OSG in accordance with Section 251(h) the DGCL. See “The Tender Offer—Section 11. Summary of the Merger
Agreement and Certain Other Agreements” and “The Tender Offer—Section 12. Purpose of the Offer and Plans for
OSG.”
Takeover
Laws. OSG is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents a Delaware corporation
from engaging in a “business combination” (defined to include mergers and certain other actions) with an “interested
stockholder” (including a person or group who owns or has the right to acquire 15% or more of a corporation’s outstanding
voting stock) for a period of three years following the date such person became an “interested stockholder” unless, among
other things, the “business combination” or the transaction in which the person became an “interested stockholder”
is approved in a prescribed manner. However, OSG has opted out of Section 203 and therefore the provisions of Section 203 are inapplicable
to OSG. In addition to Section 203 of the DGCL, a number of other states have adopted laws which purport, to varying degrees, to apply
to attempts to acquire corporations that are incorporated in, or which have substantial assets, stockholders, principal executive offices
or principal places of business or whose business operations otherwise have substantial economic effects in, such states. OSG, directly
or through subsidiaries, conducts business in a number of states throughout the United States, some of which may have enacted such takeover
laws. Except as described herein, we do not know whether any of these laws will, by their terms, apply to the Offer or the Merger, and
we have not attempted to comply with any such laws.
OSG
is not aware of any other state takeover laws or regulations that are applicable to the Transaction and has not attempted to comply with
any state takeover laws or regulations. If any government official or third party seeks to apply any state takeover law to the Offer
or the Merger, the OSG Board will grant such approvals and take such action are necessary so that the Transactions may be consummated
as promptly as practicable on the terms contemplated by the Merger Agreement. If it is asserted that one or more state takeover statutes
is applicable to the Offer or the Merger and an appropriate court does not determine that it is inapplicable or invalid as applied to
the Offer or the Merger, we may be required to file certain information with, or to receive approvals from, the relevant state authorities
or holders of Shares, and we may be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in continuing
or consummating the Offer or the Merger. See “The Tender Offer—Section 15. Conditions of the Offer.”
Appraisal
Rights. No appraisal rights are available to the holders of Shares in connection with the Offer. However, if the Offer is successful
and the Merger is consummated, stockholders and beneficial owners of Shares of OSG who: (i) did not tender their Shares in the Offer
(or who had tendered but subsequently validly withdrawn such tender, and not otherwise waived their appraisal rights); (ii) otherwise
comply with the applicable requirements and procedures of Section 262 of the DGCL; and (iii) do not thereafter withdraw their demand
for appraisal of such Shares or otherwise lose their appraisal rights, in each case in accordance with the DGCL, will be entitled to
demand appraisal of their Shares and receive in lieu of the consideration payable in the Merger a cash payment equal to the “fair
value” of their Shares exclusive of any element of value arising from the accomplishment or expectation of the Merger, as determined
by the Delaware Court of Chancery, in accordance with Section 262 of the DGCL, plus interest, if any, on the amount determined to be
fair value. If you choose to demand appraisal rights in connection with the Merger and you properly demand and perfect such rights in
accordance with Section 262 of the DGCL, you may be entitled to payment for your Shares based on a judicial determination of the fair
value of your Shares plus interest, if any, on the amount determined to be fair value.
The
following discussion is not a complete statement of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety
by the full text of Section 262 of the DGCL, a copy of which may be accessed without subscription or cost at the following publicly available
website: https://delcode.delaware.gov/title8/c001/sc09/index.html#262. All references in Section 262 of the DGCL and in this summary
to a (i) “stockholder” are to the record holder of Shares unless otherwise expressly noted herein, (ii) “beneficial
owner” are to a person who is the beneficial owner of Shares held either in voting trust or by a nominee on behalf of such person,
and (iii) “person” are to an individual, corporation, partnership, unincorporated association or other entity. Stockholders
and beneficial owners of Shares should carefully review the full text of Section 262 of the DGCL as well as the information discussed
herein. Stockholders and beneficial owners of Shares should assume that OSG will take no action to perfect any appraisal rights of any
person.
The
“fair value” of the Shares as determined by the Delaware Court of Chancery could be based upon considerations other than,
or in addition to, the price paid in the Offer and the Merger and the market value of such Shares. Stockholders and beneficial owners
of Shares should recognize that the value determined in an appraisal proceeding of the Delaware Court of Chancery could be higher or
lower than, or the same as, the Offer Price and that an investment banking opinion as to the fairness, from a financial point of view,
of the consideration payable in a sale transaction, such as the Offer and the Merger, is not an opinion as to, and does not otherwise
address, fair value under the DGCL. Moreover, Parent and OSG may argue in an appraisal proceeding that, for purposes of such proceeding,
the “fair value” of such Shares is less than the Offer Price.
Any
stockholder or beneficial owner of Shares who desires to demand appraisal rights should review carefully Section 262 of the DGCL and
is urged to consult his, her or its legal advisor before electing or attempting to demand such rights.
Under
Section 262 of the DGCL, if a merger is approved under Section 251(h) of the DGCL, either a constituent corporation before the effective
date of the merger, or the surviving corporation within 10 days thereafter, must notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal
rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such
notice either a copy of Section 262 of the DGCL or information directing the stockholders to a publicly available electronic resource
at which Section 262 of the DGCL may be accessed without subscription or cost. THE SCHEDULE 14D-9 CONSTITUTES THE FORMAL NOTICE OF
APPRAISAL RIGHTS UNDER SECTION 262 OF THE DGCL. FAILURE TO FOLLOW THE STEPS REQUIRED BY SECTION 262 OF THE DGCL FOR EXERCISING AND PERFECTING
APPRAISAL RIGHTS WILL RESULT IN THE LOSS OF SUCH RIGHTS.
As
discussed in the Schedule 14D-9, stockholders and beneficial owners of Shares wishing to exercise the right to seek an appraisal of their
Shares under Section 262 of the DGCL must do ALL of the following:
| ● | within
the later of the consummation of the Offer (which will occur at the date and time of the
acceptance for payment of Shares pursuant to and subject to the conditions of the Offer)
and 20 days after the mailing of the Schedule 14D-9, deliver to OSG at the address indicated
in the Schedule 14D-9 a written demand for appraisal of their Shares, which demand must reasonably
inform OSG of the identity of the person making the demand and that the person is demanding
appraisal and, in the case of a demand made by a beneficial owner of Shares, must also reasonably
identify the holder of record of the Shares for which the demand is made, be accompanied
by documentary evidence of such beneficial owner’s beneficial ownership of Shares and
a statement that such documentary evidence is a true and correct copy of what it purports
to be, and provide an address at which such beneficial owner consents to receive notices
given by the surviving corporation and to be set forth on the verified list required by subsection
(f) of Section 262 of the DGCL; |
| ● | not
tender his, her or its Shares pursuant to the Offer (or, if tendered, validly and subsequently
withdraw such Shares prior to the time Parent accepts properly tendered Shares for purchase); |
| ● | continuously
hold of record or beneficially own, as applicable, the Shares from the date on which the
written demand for appraisal is made through the Effective Time; and |
| ● | otherwise
timely and strictly comply with the procedures of Section 262 of the DGCL. |
Any
stockholder or beneficial owner of Shares who sells Shares in the Offer will not be entitled to demand appraisal rights with respect
thereto but rather will receive the Offer Price, subject to the terms and conditions of the Merger Agreement, as well as the Offer to
Purchase and related Letter of Transmittal, as applicable.
The
preservation and demand of appraisal rights require strict and timely adherence to the applicable provisions of Delaware law which will
be set forth in their entirety in the Schedule 14D-9. The foregoing discussion is not a complete statement of law pertaining to appraisal
rights under Delaware law and is qualified in its entirety by reference to Delaware law, including without limitation, Section 262 of
the DGCL, a copy of which may be accessed without subscription or cost at the following publicly available website: https://delcode.delaware.gov/title8/c001/sc09/index.html#262.
The
information provided above is for informational purposes only with respect to your alternatives if the Merger is consummated. Any person
who desires to demand appraisal rights should review carefully Section 262 of the DGCL and is urged to consult his, her or its legal
advisor before electing or attempting to demand such rights. The foregoing summary does not constitute any legal or other advice nor
does it constitute a recommendation that the OSG Stockholders or beneficial owners of Shares demand appraisal rights under Section 262
of the DGCL.
If
you tender your Shares into the Offer, you will not be entitled to demand appraisal rights with respect to your Shares but, instead,
subject to the conditions to the Offer, you will receive the Offer Price for your Shares.
Parent
and Purchaser have made no arrangements in connection with the Offer to provide the OSG Stockholders access to our corporate files or
to obtain counsel or appraisal services at our expense.
Going
Private Transactions. The SEC has adopted Rule 13e-3 under the Exchange Act which is applicable to certain “going private”
transactions and which may under certain circumstances be applicable to the Merger or another business combination following the purchase
of Shares pursuant to the Offer in which the Purchaser seeks to acquire the remaining Shares not held by it. Rule 13e-3 will not be applicable
to the Merger because (i) we were not, at the time the Merger Agreement was executed, and are not, an affiliate of OSG for purposes of
the Exchange Act; (ii) it is anticipated that the Merger will be effected as soon as practicable after the consummation of the Offer
(and in any event within one (1) year following the consummation of the Offer); and (iii), in the Merger, stockholders will receive the
same price per Share as paid in the Offer.
Litigation.
As of June 7, 2024, OSG has not received any complaints seeking to enjoin OSG from consummating or otherwise opposing the Offer or Merger,
or any demand letters requesting corrective disclosure. Lawsuits may be filed against OSG and the OSG Board, and lawsuits may be filed
against Parent and Purchaser, in connection with the Offer, the Merger and the related disclosures. Depending on the nature and materiality
of the allegations, Parent and Purchaser will not, and understand that OSG will not, necessarily announce such filings.
Parent
has retained the Depositary and Paying Agent and the Information Agent in connection with the Offer. The Depositary and Paying Agent
and the Information Agent will receive customary compensation, reimbursement for reasonable out-of-pocket expenses and indemnification
against certain liabilities in connection with the Offer, including certain liabilities under the federal securities laws.
As
part of the services included in such retention, the Information Agent may contact holders of Shares by personal interview, mail, electronic
mail, telephone, telex, telegraph and other methods of electronic communication and may request brokers, dealers, commercial banks, trust
companies and other nominees to forward the Offer materials to beneficial holders of Shares.
Except
as set forth above, neither Parent nor Purchaser will pay any fees or commissions to any broker or dealer or other person for soliciting
tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will upon request be reimbursed by us
for customary mailing and handling expenses incurred by them in forwarding the offering material to their customers.
OSG
will incur its own fees and expenses in connection with the Transactions.
The
Offer is being made to all holders of the Shares. We are not aware of any jurisdiction in which the making of the Offer or the acceptance
thereof would be prohibited by securities, “blue sky” or other valid laws of such jurisdiction. If we become aware of any
U.S. state in which the making of the Offer or the acceptance of Shares pursuant thereto would not be in compliance with an administrative
or judicial action taken pursuant to a U.S. state statute, we will make a good faith effort to comply with any such law. If, after such
good faith effort, we cannot comply with any such law, the Offer will not be made to (nor will tenders be accepted from or on behalf
of) the holders of Shares in such state. In any jurisdictions where applicable laws require the Offer to be made by a licensed broker
or dealer, the Offer shall be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the
laws of such jurisdiction to be designated by Purchaser.
Parent
and Purchaser have filed with the SEC the Schedule TO (including exhibits) in accordance with the Exchange Act, furnishing certain additional
information with respect to the Offer, and may file amendments thereto. The Schedule TO and any amendments thereto, including exhibits,
may be examined and copies may be obtained from the SEC in the manner set forth in “The Tender Offer—Section 7. Certain
Information Concerning OSG—Available Information.”
The
Offer does not constitute a solicitation of proxies for any meeting of the OSG Stockholders. Any solicitation of proxies which Purchaser
or any of its affiliates might seek would be made only pursuant to separate proxy materials complying with the requirements of Section
14(a) of the Exchange Act.
No
person has been authorized to give any information or make any representation on behalf of Parent or the Purchaser not contained in this
Offer to Purchase or in the Letter of Transmittal and, if given or made, such information or representation must not be relied upon as
having been authorized. No broker, dealer, bank, trust company, fiduciary or other person shall be deemed to be an agent of Parent, Purchaser,
the Depositary and Paying Agent or the Information Agent for the purpose of the Offer. Neither delivery of this Offer to Purchase nor
any purchase pursuant to the Offer will, under any circumstances, create any implication that there has been no change in the affairs
of Parent, Purchaser, OSG or any of their respective subsidiaries since the date as of which information is furnished or the date of
this Offer to Purchase.
| |
Seahawk
MergeCo., Inc.
|
| |
|
| |
Saltchuk Resources, Inc. |
June
10, 2024
SCHEDULE
A
INFORMATION
CONCERNING MEMBERS OF THE BOARDS OF DIRECTORS AND THE EXECUTIVE OFFICERS OF PURCHASER, PARENT AND SALTCHUK HOLDINGS, INC. AND THEIR RESPECTIVE
CONTROLLING CORPORATIONS
Seahawk
MergeCo, Inc. is a Delaware corporation with its business address at Seahawk MergeCo., Inc., c/o Saltchuk Resources, Inc., 450 Alaskan
Way South, Suite 708, Seattle, Washington 98104. The business telephone number of Purchaser is (206) 652-1111. Purchaser is a wholly
owned subsidiary of Parent. Purchaser was formed for the purpose of making a tender offer for any and all of the outstanding Shares of
OSG and has not engaged, and does not expect to engage, in any business other than in connection with the Offer and the Merger. The following
table sets forth information about the directors, executive officers, sole stockholder and ultimate parent corporation of Purchaser as
of June 7, 2024.
Name,
Position,
Country of Citizenship
or Jurisdiction of Incorporation |
|
Present
Principal Occupation or Employment; Material Positions Held During the Past Five Years |
Mark
N. Tabbutt
President;
Director
United
States |
|
Mr.
Mark Tabbutt serves as a Director and the President and Chairman of Parent and Saltchuk Holdings and as a Director and the President
of Purchaser. Mr. Tabbutt began working at Saltchuk in 1995. He served as General Manager of Alaska for Totem Ocean Trailer Express
from 1996 – 1999; President of Parent from 1999 – 2007; and was elected Chairman of Parent in 2007. He became a Director
and the President and Chairman of Saltchuk Holdings upon its formation in December 2020. Mr. Tabbutt holds a Bachelor’s Degree
from Whitman College, a Juris Doctor degree from the University of Puget Sound / Seattle University, and completed the Owner-President
Managed Program, unit #32, of the Harvard Business School’s Executive Education Program. |
| |
|
|
Jerald
W. Richards
Treasurer
& Assistant Secretary; Director
United
States |
|
Mr.
Jerald W. Richards serves as a Director and the Senior Vice President, Chief Financial Officer & Assistant Secretary of Parent,
the Senior Vice President, Chief Financial Officer & Assistant Secretary of Saltchuk Holdings and as a Director and the Treasurer
& Assistant Secretary of Purchaser. Prior to joining Parent and Saltchuk Holdings in 2023, Mr. Richards held the position of
Vice President and Chief Financial Officer at PotlatchDeltic Corporation, a publicly traded company headquartered in Spokane,
Washington, for a decade. He also worked at Weyerhaeuser Company for eleven years before that, including serving as the company’s
Chief Accounting Officer for three years. Mr. Richards holds a Bachelor’s Degree from Lewis & Clark College in Portland. |
| |
|
|
David
R. Stewart
Secretary;
Director
United
States |
|
Mr.
David R. Stewart serves as a Director and Senior Vice President, General Counsel, Chief Ethics Officer & Secretary of Parent,
Senior Vice President, General Counsel, Chief Ethics Officer & Secretary of Saltchuk Holdings and as a Director and the Secretary
of Purchaser. Mr. Stewart joined Parent in 2022 following a year of public service in Washington DC, where he served as General Counsel
for the U.S. Senate Committee on Commerce, Science, and Transportation. Prior to that, Dave served as the Chief Investment Officer
and General Counsel of Copper Leaf, a diversified family investment fund, from 2019 through 2021 and the EVP, General Counsel, and
Strategic Advisor, Philanthropy for Vulcan from 2012 through 2018. Dave graduated from Harvard College and earned law degrees from
the University of California, Berkeley, and the University of Edinburgh in Scotland. |
| |
|
|
Colleen
Rosas
Director
United
States |
|
Ms.
Colleen Rosas serves as a Director and the Senior Vice President, Human Resources of Parent, as a Director of Purchaser, and as Senior
Vice President, Human Resources of Saltchuk Holdings. Ms. Rosas joined Parent in 2014 from subsidiary Foss Maritime where she served
as the Vice President of Human Resources. She became the Senior Vice President, Human Resources of Saltchuk Holdings upon its formation
in December 2020. Her professional background includes 20+ years of HR leadership in a variety of industries including retail, hospitality,
manufacturing, architecture, and healthcare. Ms. Rosas joined the Saltchuk family of companies after spending four years with Swedish
Health Services, where she provided strategic HR leadership for one of the largest physician groups in the U.S. Prior to joining
Swedish, she was the Director of Human Resources for a large architectural firm, with offices throughout the United States and China.
She has had the distinction of earning “Best Company to Work For” designations in many of her prior roles. Ms. Rosas
received her Bachelor of Arts Degree in Business Administration with a concentration in Human Resources Management from Western Washington
University, and is certified as a Senior Professional in Human Resources (SPHR). |
| |
|
|
| Saltchuk
Resources, Inc., a Washington corporation |
|
Saltchuk
Resources, Inc. is the parent and sole stockholder of Purchaser. Refer to “2. Saltchuk Resources, Inc.” below for further
information. |
| |
|
|
| Saltchuk
Holdings, Inc., a Washington corporation |
|
Saltchuk
Holdings is the corporation ultimately in control of Purchaser. |
The
common business address and telephone number for all the directors and executive officers of Purchaser are as follows: Seahawk MergeCo,
Inc., c/o Saltchuk Resources, Inc., 450 Alaskan Way South, Suite 708, Seattle, Washington 98104, (206) 652-1111.
| 2. | Saltchuk
Resources, Inc. |
Saltchuk
Resources, Inc. is a Washington corporation with its business address at Saltchuk Resources, Inc., 450 Alaskan Way South, Suite 708,
Seattle, Washington 98104. The business telephone number of Parent is (206) 652-1111. Parent, through its subsidiary business units and
operating companies, provides air cargo, marine services, energy distribution, domestic shipping, international shipping and logistics
services. The following table sets forth information about the directors, executive officers and sole shareholder of Parent as of June
7, 2024.
Name,
Position,
Country of Citizenship
or Jurisdiction of Incorporation |
|
Present
Principal Occupation or Employment; Material Positions Held During the Past Five Years |
Mark
N. Tabbutt
President
and Chairman; Director
United
States |
|
Refer
to “1. Seahawk MergeCo, Inc.” above for further information. |
| |
|
|
Jerald
W. Richards
Senior
Vice President, Chief Financial Officer & Assistant Secretary; Director
United
States |
|
Refer
to “1. Seahawk MergeCo, Inc.” above for further information. |
| |
|
|
David
R. Stewart
Senior
Vice President, General Counsel, Chief Ethics Officer & Secretary; Director
United
States |
|
Refer
to “1. Seahawk MergeCo, Inc.” above for further information. |
| |
|
|
Colleen
Rosas
Senior
Vice President, Human Resources; Director
United
States |
|
Refer
to “1. Seahawk MergeCo, Inc.” above for further information. |
| |
|
|
Brian
Reid
Vice
President, Controller & Assistant Treasurer
United
States |
|
Mr.
Brian Reid serves as the Vice President, Controller & Assistant Treasurer of Parent and
Saltchuk Holdings. Mr. Reid joined Parent and Saltchuk Holdings in 2021. He was previously
the Corporate Controller of Saltchuk Marine from 2019 through 2021. Prior to Parent and Saltchuk
Holdings, he worked at Esterline, a global aerospace manufacturer, in a variety of finance
and accounting roles from 2009 through 2019. Mr. Reid graduated from Washington State University
with a degree in accounting.
|
| |
|
|
Christopher
Coakley
Vice
President, Government Affairs
United
States |
|
Mr.
Christoper Coakley services as the Vice President, Government Affairs of Parent and Saltchuk Holdings. Prior to joining Parent in
2012 (and Saltchuk Holdings upon its formation in December 2020), Mr. Coakley spent four years as vice president of legislative affairs
for the American Waterways Operators, an industry association representing the U.S. tugboat, towboat, and barge industry, and for
the three prior years he served as vice president for AWO’s Atlantic Region. Before joining AWO, Mr. Coakley was a government
affairs associate at the law firm of Preston Gates Ellis & Rouvelas Meeds. For three years immediately following college, he
worked in the office of Democratic Leader Richard Gephardt (D-MO) in the House of Representatives. Mr. Coakley received his Master’s
Degree in transportation policy, operations, and logistics from the School of Public Policy at George Mason University. A graduate
of Colby College, he also studied at the London School of Economics and was an intern at the British Parliament. Following college
graduation, he participated in the “Business Bridge” program in accounting, finance, and marketing at Dartmouth University’s
Tuck School. |
| |
|
|
Elizabeth
Joy
Vice
President, Finance & Treasurer
United
States |
|
Ms.
Elizabeth Joy serves as the Vice President, Finance & Treasurer of Parent and Saltchuk Holdings. Ms. Joy joined Parent in November
2023. Before joining Parent and Saltchuk Holdings, Ms. Joy gained broad finance experience through a career with companies such as
Chase Manhattan Bank, Microsoft, Vulcan, and, most recently, Dell Technologies, where she served from 2014 through 2023. She has
held progressive roles in banking, treasury, sales operations and finance, planning & analysis (FP&A). Ms. Joy is a Yale
University graduate and earned her MBA at UC Berkeley’s Haas School of Business. |
| |
|
|
| Saltchuk
Holdings, Inc., a Washington corporation |
|
Saltchuk
Holdings is the corporation ultimately in control of Parent. |
The
common business address and telephone number for all the directors and executive officers of Parent are as follows: Saltchuk Resources,
Inc., 450 Alaskan Way South, Suite 708, Seattle, Washington 98104, (206) 652-1111.
| 3. | Saltchuk
Holdings, Inc. |
Saltchuk
Holdings, Inc. is a Washington corporation with its business address at Saltchuk Holdings, Inc., c/o Saltchuk Resources, Inc., 450 Alaskan
Way South, Suite 708, Seattle, Washington 98104. The business telephone number of Parent is (206) 652-1111. Saltchuk Holdings, Inc. is
the holding company for Saltchuk Resources, Inc. and its subsidiaries. The following table sets forth information about the directors
and executive officers of Saltchuk Holdings, Inc. as of June 7, 2024.
Name,
Position,
Country of Citizenship
or Jurisdiction of Incorporation |
|
Present
Principal Occupation or Employment; Material Positions Held During the Past Five Years |
Mark
N. Tabbutt
President
and Chairman; Director
United
States |
|
Refer
to “1. Seahawk MergeCo., Inc.” above for further information. |
| |
|
|
Jerald
W. Richards
Senior
Vice President, Chief Financial Officer & Assistant Secretary
United
States |
|
Refer
to “1. Seahawk MergeCo., Inc.” above for further information. |
| |
|
|
David
R. Stewart
Senior
Vice President, General Counsel, Chief Ethics Officer & Secretary
United
States |
|
Refer
to “1. Seahawk MergeCo., Inc.” above for further information. |
| |
|
|
Colleen
Rosas
Senior
Vice President, Human Resources
United
States |
|
Refer
to “1. Seahawk MergeCo., Inc.” above for further information. |
| |
|
|
Brian
Reid
Vice
President, Controller & Assistant Treasurer
United
States |
|
Refer
to “2. Saltchuk Resources, Inc.” above for further information. |
| |
|
|
Christopher
Coakley
Vice
President, Government Affairs
United
States |
|
Refer
to “2. Saltchuk Resources, Inc.” above for further information. |
| |
|
|
Elizabeth
Joy
Vice
President, Finance & Treasurer
United
States |
|
Refer
to “2. Saltchuk Resources, Inc.” above for further information. |
| |
|
|
Scott
Anderson
Director
United
States |
|
Mr.
Scott Anderson serves as a Director of Saltchuk Holdings. Mr. Anderson has been a principal of Cedar Grove Partners, LLC, an investment
and consulting/advisory partnership, since 1997, and a principal of Cedar Grove Investments, LLC, a private seed capital firm, since
1998. Prior to founding Cedar Grove, Mr. Anderson was with McCaw Cellular/AT&T Wireless, most recently as Senior Vice President
of the Acquisitions and Development group. Before joining McCaw Cellular in 1986, he was engaged in private law practice. Scott received
a bachelor’s degree in History from the University of Washington, magna cum laude, and a law degree from the University of
Washington Law School, with the highest honors. |
| |
|
|
Timothy
B. Engle
Director
United
States |
|
Mr.
Timothy B. Engle serves as a Director of Saltchuk Holdings. He is a member of Vistage International and currently serves on the University
of Washington Foster School of Business Dean’s Advisory Board and the board of The Commerce Bank of Washington. He served as
President of Parent from 2007 to 2019. Before that, he was a Director of Foss Maritime Company and held positions in the San Francisco
and Seattle offices. He also worked for TOTE Maritime Alaska for three years. Mr. Engle holds a B.A. in Communication Studies from
Seattle University, an M.B.A. from the University of Washington, and completed the Owner/President Management Program of Executive
Education at Harvard Business School. |
Name,
Position,
Country of Citizenship
or Jurisdiction of Incorporation |
|
Present
Principal Occupation or Employment; Material Positions Held During the Past Five Years |
| |
|
|
Daniel
Stuart Fulton
Director
United
States |
|
Mr.
Daniel Stuart Fulton serves as a Director of Saltchuk Holdings. Mr. Fulton served as CEO and director of Weyerhaeuser Company from
2008 through 2013, when he retired after nearly 38 years with the company. Prior to becoming Weyerhaeuser’s CEO, he served
in a number of finance and real estate related positions, including president and CEO of Weyerhaeuser Real Estate Company, and president
of Weyerhaeuser Realty Investors. During his Weyerhaeuser career, Mr. Fulton served on numerous boards related to the forest products
and homebuilding industries. He is an executive fellow and past chair of the Policy Advisory Board of the Joint Center for Housing
Studies at Harvard University, a member and past-chair of the Washington Roundtable, past-chair of the United Way of King County,
and is a member of the Advisory Board for the Foster School of Business at the University of Washington. Mr. Fulton holds a BA in
Economics from Miami University (Ohio), an MBA in finance from the University of Washington, and he completed the Stanford University
Executive Program. From 1970 to 1974 he served on active duty as an officer in the U.S. Navy Supply Corps. |
| |
|
|
Leslie
Paul Goldberg
Director
United
States |
|
Mr.
Leslie Paul Goldberg serves as a Director of Saltchuk Holdings. Mr. Goldberg is the founder and CEO of Pure Audio, Inc., a leading
broadcast audio production facility in Seattle since 1996. For the past 13 years, Mr. Goldberg has served on the board of directors
for the Evergreen State College Foundation. He has served on the board of directors for TVW.org since 2006. Mr. Goldberg graduated
from The Evergreen State College with a Bachelor of Arts degree; he later went on to complete the Executive Education Program at
the University of Washington Foster School of Business. |
| |
|
|
Brandon
Pedersen
Director
United
States |
|
Mr.
Brandon Pedersen serves as a Director of Saltchuk Holdings. Mr. Pedersen retired from Alaska Airlines in 2020 after nearly 10 years
as CFO and 16 years as a member of the executive team. He brings his experience as a public company CFO and a “Big 4”
audit partner to the board in the areas of strategy, risk management, and governance. He is active in the Seattle area, serving on
the board of Northwest Harvest, and as an adjunct faculty member at the UW Foster School of Business teaches about leadership and
the role of the board. He earned his BA in Accounting and Economics from the University of Washington and is a licensed CPA. |
| |
|
|
Susan
Mullaney
Director
United
States |
|
Ms.
Susan Mullaney serves as a Director of Saltchuk Holdings. Ms. Mullaney currently serves as a Senior Advisor with The Boston Consulting
Group, a position that she has held since 2023. She is the former President of Kaiser Permanente Washington, a nonprofit health plan
providing high-quality, affordable health care to more than 681,000 members in Northwest, Central and Eastern Washington, Coastal
and Olympic regions, and Puget Sound, where she served from 2016 through 2022. She served on the board of directors at the American
Heart Association and the Oregon Hospital Association, where she served as board chairman in her final year. Ms. Mullaney received
a master’s degree in Health Care Policy and Management from the University of Massachusetts, Amherst, and a bachelor’s
degree from Eastern Connecticut State University. She is a member of the American College of Healthcare Executives. She represents
Kaiser Permanente at the International Federation of Health Plans’ Executive Development Programme, which includes a respected
cohort of global healthcare leaders. |
Name,
Position,
Country of Citizenship
or Jurisdiction of Incorporation |
|
Present
Principal Occupation or Employment; Material Positions Held During the Past Five Years |
| |
|
|
Nicole
Piasecki
Director
United
States |
|
Ms.
Nicole Piasecki serves as a Director of Saltchuk Holdings. Ms. Piasecki retired from Boeing in 2017 as the Vice President and General
Manager of the Propulsion Systems Division of Boeing Commercial Airplanes. During 25 years with The Boeing Company, she held a number
of senior roles, from Senior Vice President of Business Development & Strategic Integration to President of Boeing Japan. Ms.
Piasecki is the Chairman of the Seattle University Board of Trustees and a member of the board of directors of Weyerhaeuser. She
earned her Bachelor of Science in Mechanical Engineering from Yale University and an MBA from the Wharton School of Business at the
University of Pennsylvania, which included studies at the Keio Business School in Japan. |
| |
|
|
Mark
Sterrett
Director
United
States |
|
Mr.
Mark Sterrett serves as a Director of Saltchuk Holdings. Mr. Sterrett is a Principal at Makai Advisory Services in Seattle, where
he has served since 2019. Prior to that, he has worked at a variety of banks, including, most recently, MUFG Union Bank, N.A., where
he served in 2019, and Bank of Hawaii, where he served in 2018 He brings to the board 15+ years of experience in corporate and commercial
banking and deep knowledge of our companies as part of the Saltchuk Holdings shareholder group. Mr. Sterrett earned his BA in Accounting
from the University of Denver, is a CPA, and has completed the Management Program at the University of Washington as well as the
Corporate Governance program through Kellogg Executive Education. He is a board member for the Ronald McDonald House Charities of
Western Washington. |
| |
|
|
Denise
G. Tabbutt
Director
United
States |
|
Ms.
Denise G. Tabbutt serves as a Director of Saltchuk Holdings. Ms. Tabbutt has served on the Saltchuk Holdings Board of Directors
as the Chair of Saltchuk Holdings’ Governance Committee since Saltchuk Holdings’ formation in 2020, and held similar
positions at Parent from 2007 through Saltchuk Holdings’ formation in 2020. She has also served on the Board of Directors for
SeaBear Smokehouse since 1996. Committed to education and youth development, Ms. Tabbutt joined the board of Seattle Nativity School,
an independent middle school serving low-income students in the Seattle area, in 2020. She served on the board of Seattle Preparatory
School from 2011 to 2018 and the Board of Trustees at Westside School from 2001 to 2013. In addition, Ms. Tabbutt was on the Whitman
College Board of Overseers from 2011 to 2015. She was named to the Board of Trustees for Whitman College in 2015. She also served
on the Board of YouthCare, a non-profit organization dedicated to ending youth homelessness, from 2010 to 2014. Ms. Tabbutt received
a Bachelor of Arts in Psychology and French from Whitman College in 1987 and completed Finance for Senior Executives and the Executive
Education Program from Harvard Business School in 2002. |
The
common business address and telephone number for all the directors and executive officers of Saltchuk Holdings, Inc. are as follows:
Saltchuk Holdings, Inc., 450 Alaskan Way South, Suite 708, Seattle, Washington 98104, (206) 652-1111.
| 4. | Security
Ownership of Certain Beneficial Owners |
As
of May 19, 2024, Parent owned 15,203,554 Shares of OSG, or 21.1% of the outstanding Shares of OSG, based on 72,030,977 Shares outstanding
as of May 16, 2024, excluding the Company Warrants exercisable for 507,535 Shares as of May 16, 2024.
None
of the directors, executive officers, general partners, controlling persons, associates or majority-owned subsidiaries of Parent beneficially
own any Shares or transacted in the Shares during the past 60 days.
The
Letter of Transmittal and any other required documents should be sent by each stockholder of OSG or such stockholder’s broker,
dealer, commercial bank, trust company or other nominee to the Depositary and Paying Agent as follows:
The
Depositary and Paying Agent for the Offer is:
| If
delivering by hand, express mail, courier or other expedited service: |
|
If
delivering by mail: |
| |
|
|
Computershare
Trust Company, N.A.
c/o
Voluntary Corporate Actions
150
Royall Street, Suite V
Canton,
MA 02021 |
|
Computershare
Trust Company, N.A.
c/o
Voluntary Corporate Actions
PO
Box 43011
Providence,
RI 02940-3011 |
Other
Information:
Questions
or requests for assistance or additional copies of this Offer to Purchase, the Letter of Transmittal, and the Schedule TO may be directed
to the Information Agent at its location and telephone numbers set forth below. Stockholders may also contact their broker, dealer, commercial
bank or trust company for assistance concerning the Offer.
The
Information Agent for the Offer is:
Georgeson
LLC
1290
Avenue of the Americas, 9th Floor
New
York, NY 10104
Stockholders,
banks and brokers may call Georgeson LLC, the Information Agent for the Offer, toll-free at (866) 643-6206.
Exhibit
(a)(1)(ii)
Letter
of Transmittal
To
Tender Shares of Class A Common Stock of
OVERSEAS
SHIPHOLDING GROUP, INC. (NYSE: OSG)
a
Delaware corporation
at
AN
OFFER PRICE OF $8.50 PER SHARE IN CASH
Pursuant
to the Offer to Purchase
Dated
June 10, 2024
by
SEAHAWK
MERGECO., INC.,
a
wholly owned subsidiary of
SALTCHUK
RESOURCES, INC.
| THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON JULY 9, 2024, UNLESS THE OFFER IS EXTENDED OR
EARLIER TERMINATED. |
The
Depositary and Paying Agent for the Offer Is:
| By
First Class, Registered or Certified Mail: |
|
By
Express or Overnight Delivery: |
Computershare
Trust Company, N.A.
c/o
Voluntary Corporate Actions
PO
Box 43011
Providence,
RI 02940-3011 |
|
Computershare
Trust Company, N.A.
c/o
Voluntary Corporate Actions
150
Royall Street, Suite V
Canton,
MA 02021 |
DELIVERY
OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY AND
PAYING AGENT.
| DESCRIPTION
OF SHARES TENDERED |
Name(s)
and Address(es) of
Holder(s) of Record
(If blank, please fill in
exactly
as name(s) appear(s) on share certificate(s))
|
|
Shares
Tendered
(attach additional list, if necessary)
|
| |
|
Certificated
Shares* |
|
Book-Entry
Shares
|
| |
Certificate
Number(s)
and/or
Indicate
Book-Entry*
|
|
Total
Number of Shares
Represented by
Certificate(s)
being
Tendered* |
|
Total
Number of
Book-Entry
Shares
Tendered
|
| |
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
Total
Shares |
|
|
|
|
| * All shares of common stock represented by certificates described above will be deemed to have been tendered hereby. See Instruction 4. |
Delivery
of this Letter of Transmittal to an address other than as set forth above will not constitute a valid delivery to Computershare Inc.
and Computershare Trust Company, N.A., the joint depositary and paying agent for the Offer (the “Depositary and Paying Agent”).
You must sign this Letter of Transmittal in the appropriate space provided therefor below, with signature guaranteed, if required, and
complete and sign the Internal Revenue Service (the “IRS”) Form W-9 included in this Letter of Transmittal, if the
stockholder is a United States person. Stockholders who are not United States persons should submit a properly completed and signed IRS
Form W-8BEN or IRS Form W-8BEN-E, as applicable, or other appropriate IRS Form W-8. Failure to provide the information on IRS Form W-9,
IRS Form W-8BEN, IRS Form W-8BEN-E or another appropriate IRS Form W-8, as applicable, may subject you to United States backup withholding
on any payments made to you pursuant to the Offer (as defined below). The instructions set forth in this Letter of Transmittal should
be read carefully before you tender any of your Shares (as defined below) into the Offer (as defined below).
ALL
QUESTIONS REGARDING THE OFFER SHOULD BE DIRECTED TO THE INFORMATION AGENT, GEORGESON LLC, AT (866) 643-6206 OR AT THE ADDRESS SET FORTH
ON THE BACK PAGE OF THIS LETTER OF TRANSMITTAL.
IF
YOU WOULD LIKE ADDITIONAL COPIES OF THIS LETTER OF TRANSMITTAL OR ANY OF THE OTHER MATERIALS RELATED TO THE OFFER, YOU SHOULD CONTACT
THE INFORMATION AGENT, GEORGESON LLC, AT (866) 643-6206.
PLEASE
READ THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL.
The
Offer is being made to all holders of the Shares. Purchaser is not aware of any jurisdiction in which the making of the Offer or the
acceptance thereof would be prohibited by securities, “blue sky” or other valid laws or regulations of such jurisdiction.
If Purchaser becomes aware of any U.S. state in which the making of the Offer or the acceptance of Shares pursuant thereto would not
be in compliance with an administrative or judicial action taken pursuant to a U.S. state statute, Purchaser will make a good faith effort
to comply with any such law or regulation. If, after such good faith effort, Purchaser cannot comply with any such law or regulation,
the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares in such state. In any jurisdictions
where applicable laws or regulations require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made
on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws or regulations of such jurisdiction to be
designated by Purchaser.
This
Letter of Transmittal is being delivered to you in connection with the offer by Seahawk MergeCo., Inc., a Delaware corporation (“Purchaser”)
and a wholly owned subsidiary of Saltchuk Resources, Inc., a Washington corporation (“Parent”) to purchase all of
the issued and outstanding shares of Class A common stock, par value $0.01 per share, (the “Shares”) of Overseas Shipholding
Group, Inc. (NYSE: OSG) (“OSG”), for $8.50 per Share in cash, subject to applicable tax withholding and without interest
(the “Offer Price”). You should use this Letter of Transmittal if you are tendering Shares represented by stock certificates
or held in book-entry form on the books of OSG’s stock transfer agent, Computershare Transfer Agency (the “Transfer Agent”)
(as described in the Summary Term Sheet of the Offer to Purchase and pursuant to the procedures set forth in “The Tender Offer—Section
3. Procedures for Tendering Shares” thereof).
The
Offer expires at the Expiration Date. The term “Expiration Date” means one minute past 11:59 p.m., Eastern Time, on
July 9, 2024, the date that is twenty (20) business days (as determined as set forth in Rule 14d-1(g)(3) under the Securities and Exchange
Act of 1934, as amended) from commencement of the Offer, unless the expiration of the Offer is extended to a subsequent date in accordance
with the terms of the Agreement and Plan of Merger, dated as of May 19, 2024, by and among OSG, Parent and Purchaser (together with any
amendments or supplements thereto, the “Merger Agreement”), and the applicable rules and regulations of the Securities
and Exchange Commission, in which case the term “Expiration Date” means the date and time to which the Expiration Date is
so extended.
| ☐ |
CHECK
HERE IF TENDERED SHARES ARE BEING DELIVERED HEREWITH. |
| |
|
| ☐ |
CHECK
HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY AND PAYING AGENT
WITH DTC AND COMPLETE THE FOLLOWING (NOTE THAT ONLY FINANCIAL INSTITUTIONS THAT ARE PARTICIPANTS IN THE SYSTEM OF DTC MAY DELIVER
SHARES BY BOOK-ENTRY TRANSFER): |
| Name
of Tendering Institution: |
|
| |
|
| DTC
Participant Number: |
|
| |
|
| Transaction
Code Number: |
|
NOTE:
SIGNATURES MUST BE PROVIDED BELOW
PLEASE
READ ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies
and Gentlemen:
The
undersigned hereby tenders to Seahawk MergeCo., Inc., a Delaware corporation (“Purchaser”), and a wholly owned subsidiary
of Saltchuk Resources, Inc., a Washington corporation (“Parent”), the above described issued and outstanding shares
of Class A common stock, par value $0.01 per share (the “Shares”), of Overseas Shipholding Group, Inc., a Delaware
corporation (“OSG”), pursuant to Purchaser’s offer to purchase each outstanding Share that is validly tendered
and not properly withdrawn for $8.50 per Share in cash, subject to applicable withholding tax and without interest (the “Offer
Price”), upon the terms and subject to the conditions described in the Offer to Purchase, dated June 10, 2024 (together with
any amendments or supplements thereto, the “Offer to Purchase”) and in this Letter of Transmittal (together with any
amendments or supplements thereto, the “Letter of Transmittal” which, together with the Offer to Purchase, as each
may be amended and supplemented from time to time, collectively constitute the “Offer”), receipt of which is hereby
acknowledged.
Upon
the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms of any such extension or amendment),
and effective upon acceptance for payment of the Shares validly tendered herewith and not properly withdrawn on or prior to the Expiration
Date in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to or upon the order of Purchaser
all right, title and interest in and to all of the Shares that are being tendered hereby (and any and all dividends, distributions, rights,
other Shares or other securities issued or issuable in respect thereof on or after the date hereof (collectively, “Distributions”))
and irrevocably constitutes and appoints Computershare Inc. and Computershare Trust Company, N.A., the joint depositary and paying agent
for the Offer (the “Depositary and Paying Agent”) the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares (and any and all Distributions), with full power of substitution (such power of attorney being deemed to
be an irrevocable power coupled with an interest in the Shares tendered by this Letter of Transmittal), to: (i) deliver certificates
representing such Shares (the “Share Certificates”) (and any and all Distributions), or transfer ownership of such
Shares (and any and all Distributions) on the account books maintained by The Depository Trust Company (“DTC”) or
otherwise held in book-entry form, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon
the order of Purchaser; (ii) present such Shares (and any and all Distributions) for transfer on the books of OSG; and (iii) receive
all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any and all Distributions), all in accordance
with the terms and subject to the conditions of the Offer.
By
executing this Letter of Transmittal (or taking action resulting in the delivery of an Agent’s Message, as defined in “The
Tender Offer—Section 3. Procedures for Tendering Shares” of the Offer to Purchase), the undersigned hereby irrevocably
appoints each of the designees of Purchaser as the attorneys-in-fact and proxies of the undersigned, each with full power of substitution,
to the full extent of such stockholder’s rights with respect to the Shares tendered hereby and with respect to any and all Distributions
in respect of such Shares, subject to, and effective upon, acceptance for payment of the Shares validly tendered herewith and not properly
withdrawn prior to the Expiration Date in accordance with the terms of the Offer. The designees of Purchaser will, with respect to such
Shares and Distributions, be empowered to exercise all voting and any other rights of such stockholder, as they, in their sole discretion,
may deem proper at any annual, special, adjourned or postponed meeting of the OSG’s stockholders, by written consent in lieu of
any such meeting or otherwise. This appointment will be effective if and when, and only to the extent that, Purchaser accepts such Shares
tendered with this Letter of Transmittal for payment pursuant to the Offer. This power of attorney and proxy are irrevocable and are
granted in consideration of the acceptance for payment of such Shares in accordance with the terms of the Offer. Upon the effectiveness
of the appointment herein, without further action, all prior powers of attorney, consents and proxies granted by the undersigned at any
time with respect to such Shares (and any and all Distributions) will be revoked, and no subsequent powers of attorney, proxies, and
consents may be given by the undersigned with respect thereto (and, if given, will not be deemed effective). Purchaser reserves the right
to require that, in order for the Shares to be deemed validly tendered, immediately upon Purchaser’s acceptance for payment of
such Shares, Purchaser or its designees must be able to exercise full voting, consent and other rights to the extent permitted under
applicable law with respect to such Shares (and any and all Distributions), including voting at any meeting of OSG stockholders or executing
a written consent concerning any matter.
The
undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer any
and all of the Shares tendered hereby (and any and all Distributions) and that, when the same are accepted for payment by Purchaser,
Purchaser will acquire good, marketable and unencumbered title to such Shares (and such Distributions), free and clear of all liens,
restrictions, charges and encumbrances and the same will not be subject to any adverse claims. The undersigned hereby represents and
warrants that the undersigned is the registered owner of the Shares, or the Share Certificates have been endorsed to the undersigned
in blank, or the undersigned is a participant in DTC whose name appears on a security position listing as the owner of the Shares. The
undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary and Paying Agent or Purchaser to
be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and any and all Distributions).
In addition, the undersigned shall remit and transfer promptly to the Depositary and Paying Agent for the account of Purchaser all Distributions
in respect of any and all of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance
and transfer or appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of each such Distribution
and may withhold the entire Offer Price of the Shares tendered hereby or deduct from such Offer Price the amount or value of such Distribution
as determined by Purchaser in its sole discretion.
All
authority conferred or agreed to be conferred pursuant to this Letter of Transmittal shall not be affected by, and shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators,
personal representatives, trustees in bankruptcy, successors and assigns of the undersigned. Except as stated in the Offer to Purchase,
this tender is irrevocable.
It
is understood that the undersigned will not receive payment for the Shares unless and until the Shares are accepted for payment and until
the Share Certificates are received by the Depositary and Paying Agent at the address set forth above, together with such additional
documents as the Depositary and Paying Agent may require, or, in the case of Shares held in book-entry form, ownership of Shares is validly
transferred on the account books maintained by DTC, and until the same are processed for payment by the Depositary and Paying Agent.
THE
METHOD OF DELIVERY OF SHARES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE
ELECTION AND RISK OF THE TENDERING STOCKHOLDER. DELIVERY OF ALL SUCH DOCUMENTS WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY AND PAYING AGENT (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF SUCH DELIVERY IS BY MAIL,
IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
The
undersigned understands that the valid tender of Shares pursuant to any of the procedures described in the Offer to Purchase and in the
instructions hereto will constitute the undersigned’s acceptance of the terms and conditions of the Offer. Purchaser’s acceptance
of such Shares for payment will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the
conditions of the Offer (and if the Offer is extended or amended, the terms and conditions of such extension or amendment). The undersigned
recognizes that under certain circumstances set forth in the Offer, Purchaser may not be required to accept for payment any Shares tendered
hereby.
Unless
otherwise indicated under “Special Payment Instructions,” please issue the check for the Offer Price in the name(s) of, and/or
issue any Share Certificates representing Shares not tendered or accepted for payment to, the registered owner(s) appearing under “Description
of Shares Tendered.” Similarly, unless otherwise indicated under “Special Delivery Instructions,” please mail the check
for the Offer Price and/or return any Share Certificates representing Shares not tendered or accepted for payment (and accompanying documents,
as appropriate) to the address(es) of the registered owner(s) appearing under “Description of Shares Tendered.” In the event
that both the Special Delivery Instructions and the Special Payment Instructions are completed, please issue the check for the Offer
Price and/or issue any Share Certificates representing Shares not tendered or accepted for payment in the name(s) of, and deliver such
check and/or return such Share Certificates (and accompanying documents, as appropriate) to, the person or persons so indicated. Unless
otherwise indicated under “Special Payment Instructions,” please credit any Shares tendered hereby or by an Agent’s
Message and delivered by book-entry transfer, but which are not purchased, by crediting the account at DTC designated above. The undersigned
recognizes that Purchaser has no obligation pursuant to the Special Payment Instructions to transfer any Shares from the name of the
registered owner thereof if Purchaser does not accept for payment any of the Shares so tendered.
SPECIAL
PAYMENT INSTRUCTIONS
|
|
SPECIAL
DELIVERY INSTRUCTIONS
|
| (See
Instructions 1, 4, 5, 6 and 7) |
|
(See
Instructions 1, 4, 5, 6 and 7) |
| To
be completed ONLY if Share Certificate(s) not tendered or not accepted for payment and/or the check for the Offer Price for Shares
accepted for payment are to be issued in the name of someone other than the undersigned or if Shares tendered by book-entry transfer
which are not accepted for payment are to be returned by credit to an account maintained at DTC other than that designated above. |
|
To
be completed ONLY if Share Certificate(s) not tendered or not accepted for payment and/or the check for the Offer Price for Shares
accepted for payment is to be sent to someone other than the undersigned or to the undersigned at an address other than that shown
above. |
| |
|
|
| Issue:
☐ Check and/or ☐ Share Certificates to: |
|
Deliver:
☐ Check(s) and/or ☐ Share Certificates to: |
| |
|
|
| Name:
_________________________________________ |
|
Name:
_________________________________________ |
| (Please
Print) |
|
(Please
Print) |
| |
|
|
| Address:
|
|
Address:
|
| __________________________ |
|
__________________________ |
| ______________________________________ |
|
____________________________________ |
| (Include
Zip Code) |
|
(Include
Zip Code) |
| |
|
|
| |
|
|
| (Tax
Identification or Social Security Number) |
|
|
IMPORTANT
STOCKHOLDER:
YOU MUST SIGN BELOW
(U.S.
Holders: Please complete and return the IRS Form W-9 included below)
(Non-U.S.
Holders: Please obtain, complete and return appropriate IRS Form W-8BEN or Other Applicable IRS Form W-8)
_____________________________________________________________________________________________
(Signature(s)
of Holder(s) of Shares)
Dated:
______________, 2024
Name(s):
(Please
Print)
Capacity
(Full Title) (See Instruction 5):
_______________________________________________________________________________________________
Address:
(Include
Zip Code)
Area
Code and Telephone No.:
_______________________________________________________________________________________________
Tax
Identification No. (e.g., Social Security No.) (See IRS Form W-9 included below):
_______________________________________________________________________________________________
(Must
be signed by registered holder(s) exactly as name(s) appear(s) on a security position listing and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting
in a fiduciary or representative capacity, please set forth full title and see Instruction 5. For information concerning signature guarantees,
see Instruction 1.)
Guarantee
of Signature(s)
(If
Required-See Instructions)
[Place
Stamp Here]
Authorized
Signature:
Name:
(Please
Print)
Name
of
Firm:___________________________________________________________________________________________
Address:
(Include
Zip Code)
Area
Code and Telephone No.:
_______________________________________________________________________________________________
Dated:
, 2024
INSTRUCTIONS
FORMING
PART OF THE TERMS AND CONDITIONS OF THE OFFER
1.
GUARANTEE OF SIGNATURES. No signature guarantee is required on this Letter of Transmittal: (a) if this Letter of Transmittal is signed
by the registered holder(s) (which term, for purposes of this Instruction, includes any participant in DTC’s systems whose name
appears on a security position listing as the owner of the Shares) of Shares tendered herewith, unless such registered holder has completed
either the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions” on
this Letter of Transmittal; or (b) if such Shares are tendered for the account of a financial institution (including most commercial
banks, savings and loan associations and brokerage houses) that is a member in good standing of a recognized Medallion Program approved
by the Securities Transfer Association, Inc., including the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Program and the Stock Exchanges Medallion Program (each, an “Eligible Institution”). In all other cases,
all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5. If the Share Certificates
are registered in the name of a person other than the signer of this Letter of Transmittal, or if payment is to be made or Share Certificates
not tendered or accepted for payment are to be issued or returned to a person other than the registered owner of the Share Certificates
surrendered, then the tendered Share Certificates must be registered or accompanied by appropriate stock powers, in either case, signed
exactly as the name or names of the registered owner(s) or holder(s) appear on the Share Certificates, with the signatures on the Share
Certificates or stock powers guaranteed as described above. See Instruction 5. If Share Certificates representing Shares are forwarded
separately to the Depositary and Paying Agent, a properly completed and duly executed Letter of Transmittal must accompany each delivery
of the Share Certificates.
2.
REQUIREMENTS OF TENDER. This Letter of Transmittal must be completed by stockholders that are tendering Shares represented by Share
Certificates or held in book-entry form on the books of the Transfer Agent, or if the Shares are being tendered pursuant to the procedures
for book-entry transfer as set forth in “The Tender Offer—Section 3. Procedures for Tendering Shares” of the
Offer to Purchase, unless, in the case of Shares held or transferred in book-entry form, an Agent’s Message is being delivered
to the Depositary and Paying Agent in lieu of this Letter of Transmittal. Payment for Shares accepted for payment pursuant to the Offer
will in all cases only be made after timely receipt by the Depositary and Paying Agent of (i) to the extent the Shares are not already
held with the Depositary and Paying Agent, Share Certificates or a Book-Entry Confirmation (as defined in the Offer to Purchase) pursuant
to the procedures set forth in “The Tender Offer—Section 3. Procedures for Tendering Shares” of the Offer to
Purchase, (ii) this Letter of Transmittal, properly completed and duly executed, with any required signature guarantees and (iii) any
other documents required by this Letter of Transmittal or the Depositary and Paying Agent, in each case prior to the Expiration Date.
Under no circumstances will Purchaser pay interest on the Offer Price, regardless of any extension of the Offer or any delay in making
such payment. If your Shares are held in street name (i.e., through a broker, dealer, commercial bank, trust company or other nominee),
your Shares can be tendered by your nominee by book-entry transfer through the Depositary and Paying Agent.
The
term “Agent’s Message” means a message transmitted by DTC to, and received by, the Depositary and Paying Agent and
forming part of a Book-Entry Confirmation, that states that DTC has received an express acknowledgment from the participant in DTC tendering
the Shares that are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms
of this Letter of Transmittal, and that Purchaser may enforce such agreement against such participant.
Delivery
of documents to DTC in accordance with DTC’s procedures does not constitute delivery to the Depositary and Paying Agent.
THE
METHOD OF DELIVERY OF SHARES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE
ELECTION AND RISK OF THE TENDERING STOCKHOLDER. DELIVERY OF ALL SUCH DOCUMENTS WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY AND PAYING AGENT (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF SUCH DELIVERY IS BY MAIL,
IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No
alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. By executing this Letter
of Transmittal, the tendering stockholder waives any right to receive any notice of the acceptance for payment of Shares.
3.
INADEQUATE SPACE. If the space provided herein is inadequate, the Share Certificate numbers and/or the number of Shares tendered
should be listed on a separate signed schedule attached hereto.
4.
PARTIAL TENDERS (APPLICABLE TO CERTIFICATED STOCKHOLDERS ONLY). If fewer than all the Shares evidenced by any Share Certificate delivered
to the Depositary and Paying Agent are to be tendered, stockholders should contact the Transfer Agent by phone at 1-800-546-5141
(toll free in the United States) to arrange to have such Share Certificate divided into separate Share Certificates representing the
number of shares to be tendered and the number of shares to not be tendered. The stockholder should then tender the Share Certificate
representing the number of Shares to be tendered as set forth in this Letter of Transmittal. All Shares represented by Share Certificates
delivered to the Depositary and Paying Agent will be deemed to have been tendered.
5.
SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS.
| |
(a) |
Joint Holders. If
any of the Shares tendered hereby are held of record by two or more persons, all such persons must sign this Letter of Transmittal. |
| |
|
|
| |
(b) |
Evidence of Fiduciary
or Representative Capacity. If this Letter of Transmittal or any Share Certificates or stock powers is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other legal entity or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Depositary and Paying
Agent of the authority of such person so to act must be submitted. Proper evidence of authority includes a power of attorney, a letter
of testamentary or a letter of appointment. |
| |
|
|
| |
(c) |
Certificated Shares.
If this Letter of Transmittal is signed by the holder(s) of record of the Shares tendered hereby, the signature(s) must correspond
with the name(s) as written on the face of the Share Certificate(s) without alteration or any other change whatsoever. If this Letter
of Transmittal is signed by the holder(s) of record of the Shares listed and transmitted hereby, no endorsements of Share Certificates
or separate stock powers are required unless payment is to be made to, or Share Certificates representing Shares not tendered or accepted
for payment are to be issued in the name of, a person other than the holder(s) of record, in which case the Share Certificates representing
the Shares tendered by this Letter of Transmittal must be endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the holder(s) of record appear(s) on the Share Certificates. Signatures on such Share Certificates or stock
powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the holder(s)
of record of the Share(s) listed, the Share Certificate(s) must be endorsed or accompanied by the appropriate stock powers, in either
case, signed exactly as the name or names of the holder(s) of record appear(s) on the Share Certificate(s). Signatures on such Share
Certificates or stock powers must be guaranteed by an Eligible Institution. |
6.
STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction 6, Parent or Purchaser (each as defined in the Merger Agreement)
will pay all stock transfer taxes with respect to the transfer and sale of any Shares pursuant to the Offer (for the avoidance of doubt,
transfer taxes do not include U.S. federal income taxes or withholding taxes). If, however, consideration is to be paid to any person(s)
other than the registered holder(s), Parent and Purchaser will not be responsible for any stock transfer or similar taxes (whether imposed
on the registered holder(s) or such other person(s) or otherwise) payable on account of the transfer to such other person(s) and no consideration
shall be paid in respect of such Share(s) unless evidence of the payment of such taxes, or the inapplicability of such taxes, is submitted.
7.
SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued for the Offer Price of any Shares tendered by this Letter of
Transmittal or if Share Certificate(s) representing Shares not tendered or accepted for payment are to be issued in the name of any person(s)
other than the signer(s) of this Letter of Transmittal, or if a check for the Offer Price is to be mailed or if Share Certificate(s)
representing Shares not tendered or accepted for payment (and accompanying documents, as appropriate) are to be returned to any person(s)
other than the signer(s) of this Letter of Transmittal or an address other than that shown in this Letter of Transmittal, the appropriate
boxes on this Letter of Transmittal must be completed.
8.
TAX WITHHOLDING. Under U.S. federal income tax laws, the Depositary and Paying Agent may be required to backup withhold a portion
of the amount of any payments made to certain stockholders (or other payees) pursuant to the Offer, as applicable. To avoid such backup
withholding, each tendering stockholder (or other payee) that is or is treated as a United States person (for U.S. federal income tax
purposes) and that does not otherwise establish an exemption from U.S. federal backup withholding should complete and return the attached
Internal Revenue Service (“IRS”) Form W-9, certifying that such stockholder (or other payee) is a United States person,
that the taxpayer identification number (“TIN”) provided is correct, and that such stockholder (or other payee) is
not subject to backup withholding.
Certain
stockholders and other payees (including, among others, corporations, non-resident foreign individuals and foreign entities) generally
are not subject to these backup withholding and reporting requirements if they properly demonstrate eligibility for exemption. Exempt
United States persons should indicate their exempt status on IRS Form W-9. Exempt non-United States persons should complete, sign, and
submit to the Depositary and Paying Agent the appropriate IRS Form W-8. The appropriate IRS Form W-8 may be downloaded from the Internal
Revenue Service’s website at the following address: www.irs.gov. Failure to complete the IRS Form W-9 or the appropriate IRS Form
W-8 will not, by itself, cause Shares to be deemed invalidly tendered, but may require the Depositary and Paying Agent to withhold a
portion of the amount of any payments made of the Offer Price pursuant to the Offer.
Tendering
stockholders (or other payees) should consult their tax advisors as to any qualification for exemption from backup withholding, and the
procedure for obtaining the exemption.
NOTE:
FAILURE TO COMPLETE AND RETURN THE IRS FORM W-9 (OR APPROPRIATE IRS FORM W-8, AS APPLICABLE) MAY RESULT IN BACKUP WITHHOLDING OF A PORTION
OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE “IMPORTANT U.S. TAX INFORMATION” SECTION BELOW.
9.
IRREGULARITIES. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by Purchaser, in its sole discretion, which determination shall be final and binding on all parties.
However, stockholders may challenge Purchaser’s determinations in a court of competent jurisdiction. Purchaser reserves the absolute
right to reject any and all tenders determined by Purchaser not to be in proper form or the acceptance for payment of or payment for
which may, in Purchaser’s opinion, be unlawful. Purchaser also reserves the absolute right to waive any defect or irregularity
in the tender of any Shares of any particular stockholder, whether or not similar defects or irregularities are waived in the case of
other stockholders. No tender of Shares will be deemed to have been validly made until all defects and irregularities relating thereto
have been waived or cured. None of Parent, Purchaser, or any of their respective affiliates or assigns, the Depositary and Paying Agent,
the Information Agent or any other person will be under any duty to give notice of any defects or irregularities in tenders or incur
any liability for failure to give any such notice. Purchaser’s interpretation of the terms and conditions of the Offer (including
this Letter of Transmittal and the instructions thereto and any other documents related to the Offer) will be final and binding, subject
to the rights of the tendering holders of Shares to challenge Purchaser’s determination in a court of competent jurisdiction.
10.
QUESTIONS AND REQUESTS FOR ADDITIONAL COPIES. The Information Agent may be contacted at the address and telephone number set forth
on the last page of this Letter of Transmittal for questions and/or requests for additional copies of the Offer to Purchase, this Letter
of Transmittal and other tender offer materials. You may also contact your broker, dealer, commercial bank, trust company or other nominee
for assistance. Such copies will be furnished promptly at Purchaser’s expense.
11.
LOST, STOLEN OR DESTROYED SHARE CERTIFICATES. If any Share Certificate has been lost, stolen or destroyed, you should promptly notify
the Transfer Agent at 1-800-546-5141 (toll free in the United States). You will then be instructed as to the steps that must be taken
in order to replace such Share Certificates. You may be required to post a bond to secure against the risk that the Share Certificates
may be subsequently recirculated. You are urged to contact the Transfer Agent immediately in order to receive further instructions and
for a determination of whether you will need to post a bond and to permit timely processing of this documentation. This Letter of Transmittal
and related documents cannot be processed until the procedures for replacing lost, stolen or destroyed Share Certificates have been followed.
12.
WAIVER OF CONDITIONS. Subject to the terms and conditions of the Merger Agreement and the applicable laws, the conditions to the
Offer may be waived by Purchaser in whole or in part at any time and from time to time in its sole discretion.
A
BOOK-ENTRY CONFIRMATION INTO THE DEPOSITARY AND PAYING AGENT’S ACCOUNT AT DTC, AS WELL AS THIS LETTER OF TRANSMITTAL, PROPERLY
COMPLETED AND DULY EXECUTED, WITH ANY REQUIRED SIGNATURE GUARANTEES, OR AN AGENT’S MESSAGE (IF UTILIZED IN LIEU OF THIS LETTER
OF TRANSMITTAL), AND ANY OTHER DOCUMENTS REQUIRED BY THIS LETTER OF TRANSMITTAL, MUST BE RECEIVED BEFORE THE EXPIRATION DATE.
IMPORTANT
TAX INFORMATION
Under
federal income tax law, a stockholder who is a United States person surrendering Shares must, unless an exemption applies, provide the
Depositary and Paying Agent (as payer) with the stockholder’s correct TIN on IRS Form W-9, a copy of which is included in this
Letter of Transmittal. If the stockholder is an individual, then the stockholder’s TIN is generally such stockholder’s Social
Security number. If the correct TIN is not provided, then the stockholder may be subject to a penalty imposed by the IRS and payments
of cash to the stockholder (or other payee) pursuant to the Offer may be subject to U.S. federal backup withholding (currently imposed
at a rate of 24%).
Certain
stockholders (including, among others, certain corporations and certain foreign individuals and entities) generally are not subject to
backup withholding and reporting requirements if they properly demonstrate eligibility for exemption. Exempt United States persons should
furnish their TIN, provide the applicable information on the IRS Form W-9 and sign, date and return the IRS Form W-9 to the Depositary
and Paying Agent in order to avoid erroneous backup withholding. See the instructions enclosed with the IRS Form W-9 included in this
Letter of Transmittal for additional instructions. In order for an exempt stockholder who is not a United States person to avoid backup
withholding, such person should complete, sign and submit an appropriate IRS Form W-8 signed under penalties of perjury, attesting to
his, her or its exempt status. IRS Forms W-8 can be obtained from the Depositary and Paying Agent, or from the IRS website (www.irs.gov).
Such stockholders should consult a tax advisor to determine which version of IRS Form W-8 is appropriate.
If
backup withholding applies, the Depositary and Paying Agent is required to withhold and pay over to the IRS a portion of any payment
made to a stockholder. Backup withholding is not an additional tax. If backup withholding results in an overpayment of taxes, a refund
may be obtained from the IRS provided the required information is timely provided to the IRS.
Purpose
of IRS Form W-9
To
prevent backup withholding on payments that are made to a stockholder with respect to Shares purchased pursuant to the Offer, the stockholder
is required to notify the Depositary and Paying Agent of the stockholder’s correct TIN by completing the IRS Form W-9 included
in this Letter of Transmittal certifying that (1) the TIN provided on the IRS Form W-9 is correct (or that such stockholder is awaiting
a TIN), (2) the stockholder is not subject to backup withholding because (i) the stockholder is exempt from backup withholding, (ii)
the stockholder has not been notified by the IRS that the stockholder is subject to backup withholding as a result of a failure to report
all interest and dividends or (iii) the IRS has notified the stockholder that the stockholder is no longer subject to backup withholding,
and (3) the stockholder is a United States person.
What
Number to Give the Depositary and Paying Agent
The
tendering stockholder is required to give the Depositary and Paying Agent the TIN, generally the Social Security number or employer identification
number, of the record holder of all Shares tendered hereby. If such Shares are in more than one name or are not in the name of the actual
owner, consult the instructions enclosed with the IRS Form W-9 included in this Letter of Transmittal for additional guidance on which
number to report. If the tendering stockholder has not been issued a TIN and has applied for a number, such stockholder should write
“Applied For” in the space for the TIN on the IRS Form W-9, sign and date the IRS Form W-9 and sign and date the Certificate
of Awaiting Taxpayer Identification Number below. If the tendering stockholder writes “Applied For” in the space for the
TIN and the Depositary and Paying Agent is not provided with a TIN by the time of payment, the Depositary and Paying Agent will withhold
a portion of all payments of the Offer Price, which will be refunded if a TIN is provided to the Depositary and Paying Agent within sixty
(60) days of the Depositary and Paying Agent’s receipt of the Certificate of Awaiting Taxpayer Identification Number. If the Depositary
and Paying Agent is provided with an incorrect TIN in connection with such payments, then the stockholder may be subject to a penalty
imposed by the IRS.
NOTE:
FAILURE BY A UNITED STATES PERSON TO COMPLETE AND RETURN THE IRS FORM W-9 INCLUDED IN THIS LETTER OF TRANSMITTAL MAY RESULT IN BACKUP
WITHHOLDING OF A PORTION OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE INSTRUCTIONS ENCLOSED WITH THE IRS FORM
W-9 INCLUDED IN THIS LETTER OF TRANSMITTAL FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE “APPLIED
FOR” IN THE SPACE FOR THE TIN ON THE IRS FORM W-9.
CERTIFICATE
OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I
certify under penalties of perjury that a taxpayer identification number has not been issued
to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification
number to the appropriate IRS Center or Social Security Administration Office, or (2) I intend
to mail or deliver an application in the near future. I understand that if I do not provide
a taxpayer identification number by the time of payment, a portion of all reportable payments
made to me will be withheld, but that such amounts will be refunded to me if I then provide
a Taxpayer Identification Number within sixty (60) days. |
| Signature |
|
|
Date |
| |
|
|
|
The
Depositary and Paying Agent for the Offer Is:
| By
First Class, Registered or Certified Mail: |
|
By
Express or Overnight Delivery: |
Computershare
Trust Company, N.A.
c/o
Voluntary Corporate Actions
PO
Box 43011
Providence,
RI 02940-3011 |
|
Computershare
Trust Company, N.A.
c/o
Voluntary Corporate Actions
150
Royall Street, Suite V
Canton,
MA 02021 |
Georgeson
LLC (the “Information Agent”) may be contacted at its address and telephone number listed below for questions and/or
requests for additional copies of the Offer to Purchase, this Letter of Transmittal and other tender offer materials. You may also contact
your broker, dealer, commercial bank, trust company or other nominee for assistance. Such copies will be furnished promptly at Purchaser’s
expense.
The
Information Agent for the Offer is:
1290
Avenue of the Americas, 9th Floor
New
York, NY 10104
Shareholders,
Banks and Brokers
Call
Toll Free: (866) 643-6206
Exhibit
(a)(1)(iii)
Offer
to Purchase
All
Outstanding Shares of Class A Common Stock of
OVERSEAS
SHIPHOLDING GROUP, INC. (NYSE: OSG)
a
Delaware corporation
at
AN
OFFER PRICE OF $8.50 PER SHARE IN CASH
Pursuant
to the Offer to Purchase
Dated
June 10, 2024
by
SEAHAWK
MERGECO., INC.,
a
wholly owned subsidiary of
SALTCHUK
RESOURCES, INC.
| THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON JULY 9, 2024, UNLESS THE OFFER IS EXTENDED OR EARLIER
TERMINATED. |
June
10, 2024
To
Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We
have been engaged by Seahawk MergeCo., Inc., a Delaware corporation (“Purchaser”) and a wholly owned subsidiary of
Saltchuk Resources, Inc., a Washington corporation (“Parent”), to act as Information Agent in connection with Purchaser’s
offer to purchase all of the issued and outstanding shares of Class A common stock, par value $0.01 per share (the “Shares”),
of Overseas Shipholding Group, Inc., a Delaware corporation (NYSE: OSG) (“OSG”), for $8.50 per Share in cash ( the
“Offer Price”) upon the terms and subject to the conditions described in the Offer to Purchase (together with any
amendments or supplements thereto, the “Offer to Purchase”) and in the related Letter of Transmittal (together with
any amendments or supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”)
enclosed herewith. Please furnish copies of the enclosed materials to those of your clients for whom you hold Shares registered in your
name or in the name of your nominee.
After
careful consideration, the members of OSG’s board of directors have unanimously: (i) determined that the terms of the Merger Agreement
and all agreements and documents related thereto and contemplated thereby are fair to and in the best interests of OSG and OSG’s
stockholders; (ii) declared that the Merger Agreement (as defined below) and the Transactions (as defined below), including the Offer
and the Merger (as defined below), are advisable; (iii) approved and adopted the Merger Agreement and the Transactions, including the
Merger and the Offer, in accordance with the General Corporation Law of the State of Delaware (the “DGCL”); (iv) directed
that the Merger be effected and governed by Section 251(h) of the DGCL and that the Merger be consummated as soon as practicable following
Purchaser’s acceptance for payment of the Shares tendered in the Offer; (v) recommended that the stockholders of OSG accept the
Offer and tender their Shares to Purchaser pursuant to the Offer; and (vi) authorized and approved the execution, delivery and performance
by OSG of the Merger Agreement and the consummation of the Transactions.
The
Offer is not subject to any financing condition. The conditions to the Offer are described in “The Tender Offer—Section
15. Conditions of the Offer” of the Offer to Purchase.
For
your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominee,
we are enclosing the following documents:
| 1. | The
Offer to Purchase; |
| | | |
| 2. | The
Letter of Transmittal for your use in accepting the Offer and tendering Shares and for the
information of your clients, together with “Important Tax Information” providing
information relating to backup U.S. federal income tax withholding; |
| | | |
| 3. | A
form of letter which may be sent to your clients for whose accounts you hold Shares registered
in your name or in the name of your nominee, with space provided for obtaining such clients’
instructions with regard to the Offer; and |
| | | |
| 4. | OSG’s
Solicitation/Recommendation Statement on Schedule 14D-9 pursuant to Section 14(f) and of
the Securities Exchange Act. |
Your
prompt action is requested. We urge you to contact your clients as promptly as possible. Please note that the Offer and withdrawal rights
will expire one minute after 11:59 p.m., Eastern Time, on July 9, 2024, unless the Offer is extended or earlier terminated.
The
Offer is being made in connection with the Agreement and Plan of Merger, dated as of May 19, 2024, among OSG, Parent and Purchaser (together
with any amendments or supplements thereto, the “Merger Agreement”), pursuant to which, after the completion of the
Offer and the satisfaction or, to the extent permitted, waiver of certain conditions, Purchaser will be merged with and into OSG, without
a meeting, vote or any further action of OSG’s stockholders in accordance with 251(h) of the DGCL, and OSG will be the surviving
corporation and a wholly owned subsidiary of Parent after such merger (the “Merger” and together with the Offer and
the other transactions contemplated by the Merger Agreement, the “Transactions”). At the effective time of the Merger,
each outstanding Share (other than (a) any Shares held by OSG in treasury, (b) any Shares held by Parent, Purchaser or any other wholly
owned subsidiary of Parent, (c) any Shares irrevocably accepted for purchase by Purchaser in the Offer and (d) any Shares owned by any
of the stockholders of OSG who are entitled to, and who properly demand, appraisal rights under Section 262 of the DGCL and have not
validly revoked such demand) will, by virtue of the Merger, be cancelled and converted into the right to receive an amount equal to the
Offer Price, subject to any applicable tax withholding and without interest.
For
Shares to be properly tendered pursuant to the Offer, Computershare Inc. and Computershare Trust Company, N.A., the joint depositary
and paying agent for the Offer (the “Depositary and Paying Agent”), must be
in timely receipt of (i) the certificates evidencing such Shares or confirmation of a book-entry transfer of such Shares into the Depositary
and Paying Agent’s account at The Depository Trust Company pursuant to the procedures
set forth in “The Tender Offer—Section 3. Procedures for Tendering Shares” of the Offer
to Purchase, (ii) the Letter of Transmittal, properly completed and duly executed, with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent’s Message (as defined in the Offer to Purchase) in lieu of the Letter of Transmittal) and
(iii) any other customary documents required by the Letter of Transmittal or the Depositary and Paying Agent, in each case prior to the
expiration of the Offer in accordance with the Offer to Purchase and the Letter of Transmittal.
Except
as set forth in the Offer to Purchase, Purchaser will not pay any fees or commissions to any broker or dealer or other person (other
than the Depositary and Paying Agent and the Information Agent as described in the Offer to Purchase) for soliciting tenders of Shares
pursuant to the Offer. Purchaser will, however, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable
and necessary costs and expenses incurred by them in forwarding materials to their customers. Parent and Purchaser will pay all stock
transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the Letter of Transmittal.
Any
inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained
from, the undersigned at the addresses and telephone numbers set forth on the back cover of the Offer to Purchase.
Very
truly yours,
Georgeson
LLC
Nothing
contained herein or in the enclosed documents shall render you the agent of the Purchaser, the Information Agent or the Depositary and
Paying Agent or any affiliate of any of them or authorize you or any other person to use any document or make any statement on behalf
of any of them in connection with the Offer other than the enclosed documents and the statements contained therein.
Exhibit
(a)(1)(iv)
Offer
to Purchase
All
Outstanding Shares of Class A Common Stock of
OVERSEAS
SHIPHOLDING GROUP, INC. (NYSE: OSG)
a
Delaware corporation
at
AN
OFFER PRICE OF $8.50 PER SHARE IN CASH
Pursuant
to the Offer to Purchase
Dated
June 10, 2024
by
SEAHAWK
MERGECO., INC.,
a
wholly owned subsidiary of
SALTCHUK
RESOURCES, INC.
THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON JULY 9, 2024, UNLESS THE OFFER IS EXTENDED OR EARLIER
TERMINATED.
June
10, 2024
To
Our Clients:
Enclosed
for your consideration are the Offer to Purchase, dated June 10, 2024 (together with any amendments or supplements thereto, the “Offer
to Purchase”), and the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter
of Transmittal” and, together with the Offer to Purchase, the “Offer”) in connection with the Offer by Seahawk
MergeCo., Inc., a Delaware corporation (“Purchaser”) and a wholly owned subsidiary of Saltchuk Resources, Inc., a
Washington corporation (“Parent”), to purchase all of the issued and outstanding shares of Class A common stock, par
value $0.01 per share (the “Shares”), of Overseas Shipholding Group, Inc., a Delaware corporation (NYSE: OSG) (“OSG”),
for $8.50 per Share in cash (the “Offer Price”) upon the terms and subject to the conditions described in the Offer
to Purchase and in the Letter of Transmittal.
Also
enclosed is OSG’s Solicitation/Recommendation Statement on Schedule 14D-9. The OSG Board (as defined below) has recommended
that you accept the Offer and tender your Shares pursuant to the Offer.
We
or our nominees are the holder of record of Shares held for your account. A tender of such Shares can be made only by us as the holder
of record and pursuant to your instructions. The Letter of Transmittal accompanying this letter is furnished to you for your information
only and cannot be used by you to tender Shares held by us for your account.
We
request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject
to the conditions set forth in the enclosed Offer to Purchase and the Letter of Transmittal.
Please
note carefully the following:
1.
The Offer Price for the Offer is $8.50 per Share in cash, to be paid to you subject to any applicable tax withholding and without interest.
2.
The Offer is being made for all issued and outstanding Shares.
3.
The Offer is being made in connection with the Agreement and Plan of Merger, dated as of May 19, 2024, among OSG, Parent and Purchaser
(together with any amendments or supplements thereto, the “Merger Agreement”), pursuant to which, after the completion
of the Offer and the satisfaction or, to the extent permitted, waiver of certain conditions, Purchaser will be merged with and into OSG,
without a meeting, vote or any further action of OSG’s stockholders in accordance with Section 251(h) of the General Corporation
Law of the State of Delaware (the “DGCL”), and OSG will be the surviving corporation and a wholly owned subsidiary
of Parent after such merger (the “Merger” and together with the Offer and the other transactions contemplated by the
Merger Agreement, the “Transactions”). At the effective time of the Merger, each outstanding Share (other than (a)
any Shares held by OSG in treasury, (b) any Shares held by Parent, Purchaser or any other wholly owned subsidiary of Parent, (c) any
Shares irrevocably accepted for purchase by Purchaser in the Offer and (d) any Shares owned by any of the stockholders of OSG who are
entitled to, and who properly demand, appraisal rights under Section 262 of the DGCL and have not validly revoked such demand) will,
by virtue of the Merger, be cancelled and converted into the right to receive an amount equal to the Offer Price, subject to any applicable
tax withholding and without interest.
4.
Appraisal rights are not available as a result of the Offer. However, if the Offer is successful and the Merger is consummated, holders
of Shares who: (i) did not tender their Shares in the Offer (or who had tendered but subsequently validly withdrawn such tender, and
not otherwise waived their appraisal rights); (ii) otherwise comply with the applicable requirements and procedures of Section 262 of
the DGCL; and (iii) do not thereafter withdraw their demand for appraisal of such Shares or otherwise lose their appraisal rights, in
each case in accordance with the DGCL, will be entitled to demand appraisal of their Shares and receive in lieu of the consideration
payable in the Merger a cash payment equal to the “fair value” of their Shares exclusive of any element of value arising
from the accomplishment or expectation of the Merger, as determined by the Delaware Court of Chancery, in accordance with Section 262
of the DGCL, plus interest, if any, on the amount determined to be the fair value.
5.
After careful consideration, the members of OSG’s board of directors (the “OSG Board”) have unanimously: (i)
determined that the terms of the Merger Agreement and all agreements and documents related thereto and contemplated thereby are fair
to and in the best interests of OSG and OSG’s stockholders; (ii) declared that the Merger Agreement and the Transactions, including
the Offer and the Merger, are advisable; (iii) approved and adopted the Merger Agreement and the Transactions, including the Merger and
the Offer, in accordance with the DGCL; (iv) directed that the Merger be effected and governed by Section 251(h) of the DGCL and that
the Merger be consummated as soon as practicable following Purchaser’s acceptance for payment of the Shares tendered in the Offer;
(v) recommended that the stockholders of OSG accept the Offer and tender their Shares to Purchaser pursuant to the Offer; and (vi) authorized
and approved the execution, delivery and performance by OSG of the Merger Agreement and the consummation of the Transactions.
6.
The Offer and withdrawal rights will expire one minute after 11:59 p.m., Eastern time, on July 9, 2024, unless the Offer is extended
or earlier terminated by Purchaser.
7.
The Offer and the Merger are not subject to any financing condition. The Offer is subject
to certain conditions described in “The Tender Offer—Section 15. Conditions of the Offer” of the Offer to Purchase.
8.
Any transfer taxes applicable to the sale of Shares to Purchaser pursuant to the Offer will be paid by Parent and Purchaser, except as
otherwise provided in the Letter of Transmittal.
If
you wish to have us tender any or all of your Shares, then please so instruct us by completing, executing, detaching and returning to
us the Instruction Form on the detachable part hereof. An envelope to return your instructions to us is enclosed. If you authorize tender
of your Shares, then all such Shares will be tendered unless otherwise specified on the Instruction Form.
Your
prompt action is requested. Your Instruction Form should be forwarded to us in ample time to permit us to submit the tender on your behalf
before the expiration of the Offer.
The
Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making
of the Offer or acceptance thereof would not be in compliance with the laws of such jurisdiction, and Purchaser is not aware of any jurisdiction
in which the making of the Offer or the tender of Shares in connection therewith would not be in compliance with the laws of such jurisdiction.
If Purchaser becomes aware of any jurisdiction in which the making of the Offer would not be in compliance with applicable law, Purchaser
will make a good faith effort to comply with any such law. If, after such good faith effort, Purchaser cannot comply with any such law,
the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares residing in such jurisdiction.
In those jurisdictions where applicable laws require that the Offer be made by a licensed broker or dealer, the Offer will be deemed
to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated
by Purchaser.
INSTRUCTION
FORM
With
Respect to the Offer to Purchase
All
Outstanding Shares of Class A Common Stock of
OVERSEAS
SHIPHOLDING GROUP, INC. (NYSE: OSG)
a
Delaware corporation
at
AN
OFFER PRICE OF $8.50 PER SHARE IN CASH
Pursuant
to the Offer to Purchase
Dated
June 10, 2024
by
SEAHAWK
MERGECO., INC.,
a
wholly owned subsidiary of
SALTCHUK
RESOURCES, INC.
The
undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated June 10, 2024 (together with any amendments
or supplements thereto, the “Offer to Purchase”), and the related Letter of Transmittal (together with any amendments
or supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”),
in connection with the offer by Seahawk MergeCo., Inc., a Delaware corporation (“Purchaser”) and a wholly owned subsidiary
of Saltchuk Resources, Inc., a Washington corporation (“Parent”), to purchase all of the issued and outstanding shares
of Class A common stock, par value $0.01 per share (the “Shares”), of Overseas Shipholding Group, Inc., a Delaware corporation
(NYSE:OSG) (“OSG”), for $8.50 per Share in cash, upon the terms and subject to the conditions described in the Offer
to Purchase and in the Letter of Transmittal. The Offer Price will be paid subject to any applicable tax withholding and without interest.
The undersigned hereby instruct(s) you to tender to Purchaser the number of Shares indicated below (or, if no number is indicated, all
Shares) that are held by you or your nominees for the account of the undersigned, upon the terms and subject to the conditions set forth
in the Offer.
The
undersigned understand(s) and acknowledge(s) that all questions as to the validity, form, eligibility (including time of receipt) and
acceptance for payment of any tender of Shares and of the surrender of any certificate representing Shares submitted on my/our behalf,
will be determined by Purchaser, in its sole discretion, which determination will be final and binding on all parties, subject to the
rights of holders of Shares to challenge such determination with respect to their Shares in a court of competent jurisdiction. In addition,
the undersigned understands and acknowledges that:
1.
Purchaser reserves the absolute right to (i) reject any and all tenders determined by it not to be in proper form or the acceptance for
payment of which may, in Purchaser’s opinion, be unlawful and (ii) waive any defect or irregularity in the tender of any Shares
of any particular stockholder, whether or not similar defects or irregularities are waived in the case of other stockholders.
2.
No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived to Purchaser’s
satisfaction.
3.
None of Purchaser, Parent or any of their respective affiliates or assigns, Computershare Inc. and Computershare Trust Company, N.A.,
in their capacity as joint depositary and paying agent, Georgeson LLC, in its capacity as the information agent, or any other person
will be under any duty to give any notification of any defects or irregularities in tenders or incur any liability for failure to give
any such notification.
The
method of delivery of this document is at the election and risk of the tendering stockholder. If delivery is by mail, then registered
mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely
delivery.
| Number of Shares to be Tendered: |
|
SIGN HERE |
| |
|
|
| Shares* |
|
|
Signature(s) |
|
| Account No.: |
|
|
|
| Dated: |
|
|
|
| |
|
Please Print Name(s) and Address(es) Here |
| Area Code and Phone Number |
|
|
| |
|
|
| Tax Identification Number or Social Security Number |
|
|
| |
|
|
| |
|
| * |
Unless
otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. |
Exhibit
(a)(1)(v)
This
announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined
below) is made solely by the Offer to Purchase (as defined below), dated June 10, 2024, and the related Letter of Transmittal (as defined
below) and any amendments or supplements thereto. The Offer is not being made to, nor will tenders be accepted from or on behalf of,
holders of Shares in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the laws
of such jurisdiction. In those jurisdictions where applicable laws require that the Offer be made by a licensed broker or dealer, the
Offer will be deemed to be made on behalf of Purchaser (as defined below) by one or more registered brokers or dealers licensed under
the laws of such jurisdiction to be designated by Purchaser.
Notice
of Offer to Purchase
All
Outstanding Shares of Class A Common Stock of
OVERSEAS
SHIPHOLDING GROUP, INC.
a
Delaware corporation
at
AN
OFFER PRICE OF $8.50 PER SHARE IN CASH
Pursuant
to the Offer to Purchase
Dated
June 10, 2024
by
SEAHAWK
MERGECO., INC.,
a
wholly owned subsidiary of
SALTCHUK
RESOURCES, INC.
Seahawk
MergeCo., Inc., a Delaware corporation (“Purchaser”) and a wholly owned subsidiary of Saltchuk Resources, Inc., a
Washington corporation (“Parent”), is offering to purchase (the “Offer”) all of the issued and
outstanding shares of Class A common stock, par value $0.01 per share (the “Shares”), of Overseas Shipholding Group,
Inc., a Delaware corporation (“OSG”), for $8.50 per Share in cash (the “Offer Price”) upon the
terms and subject to the conditions described in the Offer to Purchase dated June 10, 2024 (together with any amendments or supplements
thereto, the “Offer to Purchase”) and in the related Letter of Transmittal (together with any amendments or supplements
thereto, the “Letter of Transmittal”). Subject to the terms of the Agreement and Plan of Merger, dated as of May 19,
2024, by and among OSG, Parent and Purchaser (together with any amendments or supplements thereto, the “Merger Agreement”),
the Offer Price will be paid subject to any applicable tax withholding and without interest. Stockholders who hold their Shares through
a broker, dealer, commercial bank or other nominee should consult with such institution as to whether it charges any service charges
or commissions.
THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE ONE MINUTE AFTER 11:59 P.M. EASTERN TIME ON JULY 9, 2024 (THE “EXPIRATION DATE”),
UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
The
Offer is being made pursuant to the Merger Agreement, pursuant to which, after the completion of the Offer and the satisfaction or, to
the extent permitted, waiver of certain conditions, Purchaser will be merged with and into OSG, with OSG being the surviving corporation
and a wholly owned subsidiary of Parent after such merger (the “Merger” and together with the Offer and the other
transactions contemplated by the Merger Agreement, the “Transactions”). At the effective time of the Merger, each
outstanding Share (other than (a) any Shares held by OSG in treasury, (b) any Shares held by Parent, Purchaser or any other wholly-owned
subsidiary of Parent, (c) any Shares irrevocably accepted for purchase by Purchaser in the Offer and (d) Shares owned by any of the stockholders
of OSG who are entitled to, and who properly demand, appraisal rights under the General Corporation Law of the State of Delaware (the
“DGCL”) and have not validly revoked such demand) will, by virtue of the Merger, be cancelled and converted into the
right to receive an amount equal to the Offer Price, subject to any applicable tax withholding and without interest. Upon the terms and
subject to the conditions specified in the Merger Agreement, the Merger will become effective as soon as practicable after the consummation
of the Offer, without a meeting, vote or any further action of OSG’s stockholders to adopt the Merger Agreement, in accordance
with Section 251(h) of the DGCL. As a result of the Merger, OSG will cease to be a publicly traded company and will become wholly-owned
by Parent. The Merger Agreement is more fully described in the Offer to Purchase.
Purchaser’s
obligation to accept for payment Shares tendered in the Offer (the time of such acceptance, the “Offer Acceptance Time”)
is subject to conditions, including: (i) that the number of Shares validly tendered and not validly withdrawn prior to the expiration
of the Offer (excluding any Shares tendered pursuant to guaranteed delivery procedures that have not yet been “received”
(within the meaning of Section 251(h) of the DGCL)), together with any Shares owned by Parent, Purchaser, or any of their respective
affiliates, equals at least one (1) Share more than a majority of all issued and outstanding Shares as of the expiration of the Offer,
other than any Shares held by OSG in treasury as of, or acquired by OSG prior to, the expiration of the Offer (the “Minimum
Condition”), (ii) the accuracy of OSG’s representations and warranties contained in the Merger Agreement (subject to
certain exceptions and qualifications described in the Merger Agreement and the Offer to Purchase), (iii) OSG’s performance in
all material respects of its obligations under the Merger Agreement, (iv) the expiration of the waiting period, and any extensions thereof,
applicable to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder and (v) the other conditions set forth in Annex I to the Merger Agreement (collectively, the “Offer Conditions”).
The obligations of Parent and Purchaser to consummate the Offer and the Merger under the Merger Agreement are not subject to a financing
condition. Purchaser and Parent reserve the right to waive certain of the conditions to the Offer in their sole discretion; provided
that they may not waive the Minimum Condition other than with the prior written consent of OSG.
The
purpose of the Offer and the Merger is for Parent, through Purchaser, to acquire control of, and ultimately own the entire equity interest
in, OSG. Following the consummation of the Offer, Purchaser intends to effect the Merger pursuant to Section 251(h) of the DGCL as promptly
as practicable, subject to the satisfaction of certain conditions. If the Merger is so effected pursuant to Section 251(h) of the DGCL,
no vote of OSG’s stockholders will be required to adopt the Merger Agreement or consummate the Merger.
After
careful consideration, the members of the board of directors of OSG (the “OSG Board”) have unanimously: (i) determined
that the terms of the Merger Agreement and all agreements and documents related thereto and contemplated thereby are fair to and in the
best interests of OSG and OSG’s stockholders; (ii) declared that the Merger Agreement and the Transactions, including the Offer
and the Merger, are advisable; (iii) approved and adopted the Merger Agreement and the Transactions, including the Merger and the Offer,
in accordance with the DGCL; (iv) directed that the Merger be effected and governed by Section 251(h) of the DGCL and that the Merger
be consummated as soon as practicable following the Offer Acceptance Time; (v) recommended that the stockholders of OSG accept the Offer
and tender their Shares to Purchaser pursuant to the Offer; and (vi) authorized and approved the execution, delivery and performance
by OSG of the Merger Agreement and the consummation of the Transactions.
Descriptions
of the reasons for the OSG Board’s recommendation and approval of the Offer are set forth in OSG’s Solicitation/Recommendation
Statement on Schedule 14D-9 (the “Schedule 14D-9”), which is being mailed to OSG’s stockholders together with
the Offer materials (including the Offer to Purchase and the related Letter of Transmittal). Stockholders should carefully read the information
set forth in the Schedule 14D-9, including the information set forth in Item 4 thereof under the sub-headings “Recommendations
of the Company Board” and “Background and Reasons for the Company Board’s Recommendation.”
The
Merger Agreement provides that, subject to the parties’ termination rights under the Merger Agreement, (A) (i) if, as of any then-scheduled
Expiration Date, any Offer Condition is not satisfied, and has not been waived by Purchaser or Parent, to the extent waivable by Purchaser
or Parent, then Purchaser may, in its discretion, and without the consent of OSG or any other person, extend the Offer on up to two (2)
occasions, for an additional period of up to ten (10) business days (determined as set forth in Rule 14d-1(g)(3) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) per extension (or such longer period as the parties may mutually
agree to in writing), to permit such Offer Condition to be satisfied, and (ii) Purchaser shall, and Parent shall cause Purchaser to,
extend the Offer from time to time for the minimum period required by any law, any interpretation or position of the Securities and Exchange
Commission or the staff thereof or any rules and regulations of the New York Stock Exchange applicable to the Offer, and (B) if, as of
any then-scheduled Expiration Date, any Offer Condition is not satisfied and has not been waived, OSG may require Purchaser to extend
the Offer on one or more occasions, for an additional period of up to ten (10) business days (as determined as set forth in Rule 14d-1(g)(3)
under the Exchange Act) per extension (or such longer period as the parties may mutually agree in writing), to permit such Offer Condition
to be satisfied; provided, that (x) in no event will Purchaser be required to extend the Offer beyond the valid termination of the
Merger Agreement or beyond February 19, 2025 and (y) in the event that the Minimum Condition is the only Offer Condition not satisfied
or waived (other than the Offer Conditions that by their nature are only satisfied as of the Offer Acceptance Time), OSG may not require
Purchaser to extend the Offer on more than five (5) such occasions of ten (10) business days each.
Any
extension, waiver or amendment of the Offer or termination of the Offer will be followed, as promptly as practicable, by public announcement
thereof, such announcement in the case of an extension to be issued not later than 9:00 a.m. Eastern Time on the next business day after
the day on which the Offer was previously scheduled to expire in accordance with the public announcement requirements of Rules 14d-3(b)(1),
14d-4(d) and 14e-1(d) under the Exchange Act.
For
purposes of the Offer, if and when Purchaser gives oral or written notice to Computershare Inc. and Computershare Trust Company, N.A.,
the joint depositary and paying agent for the Offer (the “Depositary and Paying
Agent”) of its acceptance for payment of such Shares pursuant to the Offer, then Purchaser has accepted for payment and thereby
purchased Shares validly tendered and not validly withdrawn pursuant to the Offer. Upon the terms and subject to the conditions of the
Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the aggregate Offer Price (subject to
any applicable withholding tax) therefor with the Depositary and Paying Agent, which will act as agent for the tendering stockholders
for purposes of receiving payments from Purchaser and transmitting such payments to the tendering stockholders. Under no circumstances
will interest be paid on the Offer Price for Shares, regardless of any extension of the Offer or any delay in payment for Shares.
Purchaser
will pay for Shares tendered (and not validly withdrawn) pursuant to the Offer only after timely receipt by the Depositary and Paying
Agent of: (i) the certificates evidencing such Shares (the “Share Certificates”) or a timely confirmation of the book-entry
transfer of such Shares (the “Book-Entry Confirmations”) into the Depositary and Paying Agent’s account at The
Depository Trust Company pursuant to the procedures set forth in “Tender Offer—Section 3. Procedures for Tendering
Shares” of the Offer to Purchase; (ii) a Letter of Transmittal, properly completed and duly executed, with any required signature
guarantees (or an Agent’s Message (as defined in the Offer to Purchase) in lieu of the Letter of Transmittal); and (iii) any other
documents required by the Letter of Transmittal or any other customary documents required by the Depositary and Paying Agent. Accordingly,
tendering stockholders may be paid at different times depending upon when the Share Certificates or Book-Entry Confirmations, as the
case may be, with respect to Shares, and other documents described above are actually received by the Depositary and Paying Agent.
Tenders
of Shares pursuant to the Offer are irrevocable. However, a stockholder has withdrawal rights that are exercisable until the expiration
of the Offer (i.e., at any time prior to one minute after 11:59 p.m. Eastern Time on July 9, 2024), or in the event the Offer
is extended, on such date and time to which the Offer is extended. In addition, pursuant to Section 14(d)(5) of the Exchange Act, Shares
may be withdrawn at any time after August 9, 2024, which is the 60th day after the date of the commencement of the Offer,
unless prior to that date Purchaser has accepted for payment the Shares validly tendered in the Offer. Withdrawals of tenders of Shares
may not be rescinded, and any Shares properly withdrawn will be deemed not to have been validly tendered for purposes of the Offer. However,
withdrawn Shares may be re-tendered by following one of the procedures for tendering Shares described in the Offer to Purchase at any
time prior to the expiration of the Offer.
The
receipt of the Offer Price in exchange for Shares pursuant to the Offer or the Merger will, depending on the particular circumstances
of each holder of Shares, generally be a taxable transaction for U.S. federal income tax purposes. For a summary of certain U.S. federal
income tax consequences of the Offer and the Merger, see the Offer to Purchase. Holders of Shares should consult their own tax advisors
regarding the particular tax consequences of the Offer and the Merger in light of their particular circumstances, including the application
and effect of any U.S. federal, state, local and non-U.S. tax laws.
The
information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Exchange Act is
contained in the Offer to Purchase and is incorporated herein by reference.
The
Offer to Purchase, the related Letter of Transmittal and the other exhibits to the Schedule TO, and OSG’s Schedule 14D-9, contain
important information and all documents should be read carefully and in their entirety before any decision is made with respect to the
Offer.
Questions
and requests for assistance may be directed to Georgeson LLC (the “Information Agent”) at the address and telephone
number set forth below. Requests for copies of the Offer to Purchase and the related Letter of Transmittal may be directed to the Information
Agent or to brokers, dealers, commercial banks or trust companies. Such copies will be furnished promptly at Purchaser’s expense.
Neither Parent nor Purchaser will pay any fees or commissions to any broker or dealer or to any other person (other than to the Depositary
and Paying Agent and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer.
The
Information Agent for the Offer is:
1290
Avenue of the Americas, 9th Floor
New
York, NY 10104
Shareholders,
Banks and Brokers
Call
Toll Free: (866) 643-6206
June
10, 2024
Exhibit
(a)(5)(i)
May
19, 2024
The
Board of Directors
Overseas
Shipholding Group, Inc.
302
Knights Run Avenue, Suite 1200
Tampa,
Florida 33602
Members
of the Board of Directors:
We
understand that Overseas Shipholding Group, Inc., a Delaware corporation (the “Company”), proposes to enter into an
Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), with Saltchuk Resources, Inc.,
a Washington corporation (“Parent”), and Seahawk MergeCo., Inc., a Delaware corporation and a wholly owned subsidiary
of Parent (“Merger Sub”). Pursuant to the Merger Agreement, (i) Parent will cause Merger Sub to commence a cash tender
offer (the “Offer”) to acquire all of the issued and outstanding shares of Class A common stock, $0.01 par value per
share, of the Company (the “Class A Common Stock”; each such share of Class A Common Stock, a “Share”)
for $8.50 per Share, net to the holder of such Share in cash (the “Offer Price”), and (ii) following the consummation
of the Offer, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger
as a wholly owned subsidiary of Parent, and each Share issued and outstanding immediately prior to the effective time of the Merger (other
than (i) Shares held by the Company in treasury or by Parent or Merger Sub (including Shares irrevocably accepted for purchase by Merger
Sub in the Offer) or any other wholly owned subsidiary of Parent or (ii) Shares held by a holder who has properly demanded appraisal
rights with respect thereto under applicable Delaware law) will at the effective time of the Merger be automatically be cancelled and
converted into the right to receive an amount in cash equal to the Offer Price (the “Merger Consideration”) (clause
(i) and clause (ii), collectively, the “Transaction”). The terms and conditions of the Transaction are more fully
set forth in the Merger Agreement.
The
Board of Directors has asked us whether, in our opinion, the Offer Price and the Merger Consideration to be received by holders of Class
A Common Stock in the Transaction is fair, from a financial point of view, to such holders, other than Parent and its affiliates.
In
connection with rendering our opinion, we have, among other things:
| |
(i) |
reviewed
certain publicly available business and financial information relating to the Company that we deemed to be relevant; |
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|
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(ii) |
reviewed
certain internal projected financial data relating to the Company prepared and furnished to us by management of the Company, as subjected
to certain sensitivity analyses conducted by us at the direction of management of the Company and, on such basis, as approved for
our use by the Company (the “Forecasts”); |
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|
|
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(iii) |
discussed
with management of the Company their assessment of the past and current operations of the Company, the current financial condition
and prospects of the Company, and the Forecasts (including their views on the risks and uncertainties of achieving the Forecasts); |
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|
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(iv) |
reviewed
the reported prices and the historical trading activity of the Class A Common Stock; |
The
Board of Directors
Overseas
Shipholding Group, Inc.
Page
2
| |
(v) |
compared
the financial performance of the Company and its stock market trading multiples with those of certain other publicly traded companies
that we deemed relevant; |
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|
|
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(vi) |
compared
the financial performance of the Company and the valuation multiples relating to the Transaction with the financial terms, to the
extent publicly available, of certain other transactions that we deemed relevant; |
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|
|
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(vii) |
reviewed
the financial terms and conditions of the Merger Agreement; and |
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|
|
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(viii) |
performed
such other analyses and examinations and considered such other factors that we deemed appropriate. |
For
purposes of our analysis and opinion, we have assumed and relied upon the accuracy and completeness of the financial and other information
publicly available, and all of the information supplied or otherwise made available to, discussed with, or reviewed by us, without any
independent verification of such information (and have not assumed responsibility or liability for any independent verification of such
information), and have further relied upon the assurances of the management of the Company that they are not aware of any facts or circumstances
that would make such information inaccurate or misleading. With respect to the Forecasts, we have assumed with your consent that they
have been reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of the
Company as to the future financial performance of the Company. We express no view as to the Forecasts or the assumptions on which they
are based.
For
purposes of our analysis and opinion, we have assumed, in all respects material to our analysis, that the representations and warranties
of each party contained in the Merger Agreement are true and correct, that each party will perform all of the covenants and agreements
required to be performed by it under the Merger Agreement and that all conditions to the consummation of the Transaction will be satisfied
without waiver or modification thereof. We have further assumed, in all respects material to our analysis, that all governmental, regulatory
or other consents, approvals or releases necessary for the consummation of the Transaction will be obtained without any delay, limitation,
restriction or condition that would have an adverse effect on the Company or the consummation of the Transaction or reduce the contemplated
benefits to the holders of Class A Common Stock of the Transaction.
We
have not conducted a physical inspection of the properties or facilities of the Company and have not made or assumed any responsibility
for making any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or other off-balance
sheet assets and liabilities) of the Company, nor have we been furnished with any such valuations or appraisals, nor have we evaluated
the solvency or fair value of the Company under any state or federal laws relating to bankruptcy, insolvency or similar matters. Our
opinion is necessarily based upon information made available to us as of the date hereof and financial, economic, market and other conditions
as they exist and as can be evaluated on the date hereof. It is understood that subsequent developments may affect this opinion and that
we do not have any obligation to update, revise or reaffirm this opinion.
The
Board of Directors
Overseas
Shipholding Group, Inc.
Page
3
We
have not been asked to pass upon, and express no opinion with respect to, any matter other than the fairness to the holders of Class
A Common Stock, other than Parent and its affiliates, from a financial point of view, of the Offer Price and the Merger Consideration.
We do not express any view on, and our opinion does not address, the fairness of the proposed transaction to, or any consideration received
in connection therewith by, the holders of any other class of securities, creditors or other constituencies of the Company, nor as to
the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of the
Company, or any class of such persons, whether relative to the Offer Price, the Merger Consideration or otherwise. We have not been asked
to, nor do we express any view on, and our opinion does not address, any other term or aspect of the Merger Agreement or the Transaction,
including, without limitation, the structure or form of the Transaction, or any term or aspect of any other agreement or instrument contemplated
by the Merger Agreement or entered into or amended in connection with the Merger Agreement. Our opinion does not address the relative
merits of the Transaction as compared to other business or financial strategies that might be available to the Company, nor does it address
the underlying business decision of the Company to engage in the Transaction. Our opinion does not constitute a recommendation to the
Board of Directors or to any other persons in respect of the Transaction, including as to whether any person should tender shares of
Class A Common Stock in the Offer or take any other action in respect of the Transaction. We are not legal, regulatory, accounting or
tax experts and have assumed the accuracy and completeness of assessments by the Company and its advisors with respect to legal, regulatory,
accounting and tax matters.
We
have acted as financial advisor to the Company in connection with the Transaction and have received retainer fees for our services and
will receive additional fees, a portion of which is payable upon rendering this opinion and a substantial portion of which is contingent
upon the consummation of the Transaction. The Company has also agreed to reimburse our expenses and to indemnify us against certain liabilities
arising out of our engagement. During the two year period prior to the date hereof, Evercore Group L.L.C. and its affiliates have provided
financial advisory services to the Company and received fees for the rendering of these services. In addition, during the two year period
prior to the date hereof, Evercore Group L.L.C. and its affiliates have not been engaged to provide financial advisory or other services
to Parent or its affiliates, and we have not received any compensation from Parent or its affiliates during such period. We may provide
financial advisory or other services to the Company and Parent in the future, and in connection with any such services we may receive
compensation.
Evercore
Group L.L.C. and its affiliates engage in a wide range of activities for our and their own accounts and the accounts of customers, including
corporate finance, mergers and acquisitions, equity sales, trading and research, private equity, placement agent, asset management and
related activities. In connection with these businesses or otherwise, Evercore Group L.L.C. and its affiliates and/or our or their respective
employees, as well as investment funds in which any of them may have a financial interest, may at any time, directly or indirectly, hold
long or short positions and may trade or otherwise effect transactions for their own accounts or the accounts of customers, in debt or
equity securities, senior loans and/or derivative products or other financial instruments of or relating to the Company, Parent, potential
parties to the Transaction and/or any of their respective affiliates or persons that are competitors, customers or suppliers of the Company
or Parent.
Our
financial advisory services and this opinion are provided for the information and benefit of the Board of Directors (in its capacity
as such) in connection with its evaluation of the proposed Transaction. The issuance of this opinion has been approved by an Opinion
Committee of Evercore Group L.L.C.
This
opinion may not be disclosed, quoted, referred to or communicated (in whole or in part) to any third party for any purpose whatsoever
except with our prior written approval, except the Company may reproduce this opinion in full in any document that is required to be
filed with the U.S. Securities and Exchange Commission and required to be mailed by the Company to its stockholders relating to the Transaction.
The
Board of Directors
Overseas
Shipholding Group, Inc.
Page
4
Based
upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Offer Price and the Merger Consideration to be
received by holders of Class A Common Stock in the Transaction is fair, from a financial point of view, to such holders, other than Parent
and its affiliates.
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Very
truly yours, |
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|
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EVERCORE
GROUP L.L.C. |
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|
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By: |
/s/
Mark Friedman |
Exhibit
(e)(2)
NON-DISCLOSURE
AGREEMENT
THIS
NON-DISCLOSURE AGREEMENT (this “Agreement”) is made as of February 27, 2024 (the “Effective Date”)
by and between Overseas Shipholding Group, Inc. (together with its direct and indirect subsidiaries, the “Company”)
and Saltchuk Resources, Inc. (“Recipient”). For the purposes of this Agreement, each of Recipient and the Company
are sometimes referred to as a “Party” and together, the “Parties”.
BACKGROUND
The
Parties are prepared to engage in discussions with respect to a potential transaction involving the Company and Recipient or an Affiliate
thereof (the “Transaction”), and during the course of such discussions the Company may disclose and make available
to Recipient certain information.
NOW,
THEREFORE, in consideration of the foregoing, and as a condition to the exchange of Confidential Information, the Parties agree as
follows:
1.
Definitions.
(a)
“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the Person specified. The term “control” (including the terms
“controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract
or otherwise.
(b)
“Confidential Information” means all information, data, documents, agreements, files, and other materials (in any
form or medium of communication, including whether disclosed orally or disclosed or stored in written, electronic, or other form or media)
that is obtained from or disclosed by or on behalf of the Company or its Representatives, and obtained on or after the Effective Date,
relating directly or indirectly to the Company or its businesses, affairs, assets, properties, or prospects, including, without limitation,
all notes, analyses, compilations, reports, forecasts, data, studies, samples, interpretations, summaries, and other documents and materials
(in any form or medium of communication, whether oral, written, electronic, or other form or media) prepared by or for Recipient to the
extent that they contain or otherwise reflect or are derived from or based on such information, data, documents, agreements, files, or
other materials. The term “Confidential Information” does not include information that: (i) at the time of disclosure is
or thereafter becomes available to and known by the public (other than as a result of its disclosure directly or indirectly by Recipient
or any of its Representatives in violation of this Agreement); (ii) was available to Recipient on a non-confidential basis from a source
other than the Company or its Representatives, provided that, to Recipient’s knowledge after due inquiry, such source is
not and was not bound by a confidentiality agreement with respect to such information or otherwise prohibited from transmitting such
information by a contractual, legal, or fiduciary obligation; (iii) was or is already in the possession of Recipient or any of its Representatives
prior to the time of disclosure by the Company, as shown by Recipient’s or such Representatives’ files and records and such
information was not obtained, to Recipient’s knowledge after due inquiry, in violation of any obligation of confidentiality with
respect to such information; or (iv) is independently developed by Recipient without reference to the Confidential Information and without
violating any of its obligations under this Agreement, as shown by Recipient’s or such Representatives’ files and records.
(c)
“Person” means any individual, corporation, limited or general partnership, limited liability company, limited liability
partnership, trust, association, joint venture, governmental entity, or other entity.
(d)
“Representatives” means, as to any Person, (a) such Person’s Affiliates and its and their directors, officers,
employees, managing members, general partners, agents and consultants (including attorneys, financial advisors, and accountants) or (b)
any actual or potential sources of debt or equity financing of such Person approved in writing by the Company (which approval shall not
be unreasonably withheld, conditioned or delayed).
Other
terms not specifically defined in this Section 1 shall have the meanings given to them elsewhere in this Agreement.
2.
Non-Disclosure of Confidential Information.
(a)
Recipient shall (i) use the Confidential Information furnished to or prepared by it solely for the purpose of evaluating, negotiating,
financing, documenting and/or effectuating the Transaction and for no competitive or other purpose; (ii) not disclose the Confidential
Information furnished to or prepared by it to any third party, except for disclosures to its Representatives, who in each case, in Recipient’s
reasonable judgment, have a bona fide need to know such information for the purpose of evaluating, negotiating, financing, documenting
and/or effectuating the Transaction; (iii) inform its Representatives of the confidential nature of the Confidential Information furnished
to or prepared by it and direct its Representatives to treat such Confidential Information confidentially and subject to the same obligations
as are applicable to Recipient in respect of such Confidential Information, provided, however, that the requirement in this subclause
(iii) regarding informing the Representatives shall not apply to Recipient’s attorneys; (iv) take such additional commercially
reasonable precautions to prevent the disclosure of the Confidential Information furnished to or prepared by its Representatives to any
third party or its use by its Representatives for any purpose other than evaluating, negotiating, financing, documenting and/or effectuating
the Transaction; and (v) be responsible for any breach of this Agreement by its Representatives unless any such Representative enters
into a non-disclosure agreement with the Company.
(b)
In the event that Recipient or any of its Representatives is requested (by interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any Confidential Information furnished to or prepared by it, Recipient shall
provide the Company, to the extent permitted by applicable law, rule or regulation, with prompt notice of such request so that the Company,
at the Company’s expense, may seek an appropriate protective order, and Recipient shall provide all commercially reasonable assistance
to the Company in its reasonable efforts to do so (at the expense of the Company). Recipient and its Representatives may disclose without
liability under this Agreement only that portion of the Confidential Information that it is advised by counsel is legally required to
be disclosed; provided that, to the extent permitted by applicable law, rule or regulation, Recipient gives the Company written
notice of the Confidential Information to be disclosed as far in advance of its disclosure as is reasonably practicable and, upon the
Company’s request and at the Company’s expense, uses reasonable efforts to cooperate with the Company to obtain assurances
that confidential treatment will be accorded to such Confidential Information, provided, however, that disclosure of Confidential
Information may be made in the course of inspections, examinations or inquiries by federal or state governmental authorities or other
regulatory agencies and self-regulatory organizations with regulatory authority over Recipient or the Representative(s) that have requested
or required the inspection of records that contain such Confidential Information without notice to the Company.
(c)
Recipient acknowledges that the Confidential Information of the Company is and remains the property of the Company. In no event shall
Recipient be deemed, by virtue of this Agreement, to have acquired any right or interest of any kind or nature whatsoever, in or to,
the Confidential Information of the Company. Each of the Parties acknowledges that certain of the Confidential Information of the Company
may be information to which attorney-client privilege and/or work product privilege attaches and agrees that access to such Confidential
Information is being provided solely for the purposes set out in this Agreement and that such access is not intended, and shall not constitute,
a waiver of any privilege or any right to assert or claim privilege. The Parties understand and agree that they have a commonality of
interest with respect to such matters and it is their desire, intention, and mutual understanding that the sharing of such material or
other information is not intended to, and shall not, waive or diminish in any way the confidentiality of such material or information
or its continued protection under the attorney-client privilege, work product doctrine, or other applicable privilege or doctrine as
a result of disclosing any Confidential Information (including Confidential Information related to pending or threatened litigation)
to Recipient or any of its Representatives. To the extent that there is any waiver of privilege, it is intended to be a limited waiver
in respect of Recipient solely for the purpose, and on the terms and conditions, set out in this Agreement.
(d)
The Parties acknowledge that it may be necessary for the Parties to enter into a customary Clean Team Agreement in connection with the
sharing of Confidential Information that is competitively sensitive.
3.
Non-Disclosure of Negotiations or Agreements. Recipient shall not disclose to any Person, except for its Representatives, the
status or terms of any discussions, negotiations or agreements concerning the Transaction, including without limitation this Agreement
and any offer, letter of intent, proposal, price, value or valuation, or any similar terms, agreements or understandings between the
Company and Recipient with respect thereto, without obtaining the prior written consent of the Company, all such information being deemed
Confidential Information. Notwithstanding the foregoing, (a) Recipient or its Representatives may publicly disclose information regarding
the Transaction to the extent such Person is advised by its counsel that such disclosure must be made in order to comply with applicable
laws, the rules of a regulatory agency or self-regulatory organization (including a stock exchange) or a subpoena, civil investigative
demand, regulatory demand or similar process by which such party is bound; and (b) subject to the terms of this Agreement, including
Section 5, Recipient may disclose the status or terms of discussions, negotiations or agreements concerning the Transaction in
order to comply with Recipient’s obligations under Section 13(d) of the Exchange Act and the rules and regulations thereunder.
In the event of a disclosure in accordance with clause (a) of the preceding sentence, Recipient shall comply with the provisions of Section
2(b), use reasonable efforts to minimize the disclosure of information regarding the Transaction, and give the Company reasonable
advance notice, to the extent permitted by applicable law, rule or regulation, of such planned disclosure, with a copy of the proposed
text of the disclosure.
4.
Return or Destruction of Confidential Information. Recipient agrees that, if it determines not to pursue the Transaction, it will
promptly notify the Company of such determination. At the time of such notice or, at any earlier time and upon the written request of
the Company, Recipient shall promptly (a) return or destroy such Confidential Information and shall not retain any copies or other reproductions
or extracts thereof, and (b) destroy or have destroyed all memoranda, notes, reports, analyses, compilations, studies, interpretations,
or other documents containing or reflecting any such Confidential Information, and all copies and other reproductions and extracts thereof.
Upon written request by the Company, Recipient shall promptly provide written confirmation to the Company confirming that the foregoing
materials have, in fact, been destroyed or returned, and which shall be signed by an authorized signatory of Recipient. Notwithstanding
the foregoing, (x) the obligation to return or destroy Confidential Information shall not cover Confidential Information maintained on
routine computer system backup tapes, disks or other backup storage devices or is maintained (whether in physical or electronic form)
in accordance with applicable law or Recipient’s document retention policies or that is otherwise not capable of deletion or destruction,
and (y) Recipient’s Representatives may retain copies of the Confidential Information to the extent necessary to comply with policies
and procedures implemented by such Representatives which are necessary to comply with law, regulation or professional standards. All
Confidential Information that is retained in accordance with the immediately foregoing sentence shall remain subject to this Agreement
for as long as such Confidential Information is so retained. Notwithstanding the return or destruction of the Confidential Information,
Recipient and its Representatives shall continue to be bound by the confidentiality and other obligations in accordance with the terms
of this Agreement.
5.
Standstill Agreement.
5.1
Unless approved in advance by the Board of Directors of the Company in writing, the Recipient agrees that neither it nor any of its Affiliates
will, for a period of twelve (12) months after the date hereof (such period, the “Standstill Period”):
(a)
(1) effect, offer, or propose to effect or offer (i) any tender or exchange offer, merger or other business combination involving the
Company or any of its subsidiaries; (ii) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction
with respect to the Company or any of its subsidiaries; or (iii) any “solicitation” of “proxies” or shareholder
“consents” (as such terms are defined or used in Regulation 14A under the Securities Exchange Act of 1934 (as amended and
restated, the “Exchange Act”)) with respect to any shares or other securities of the Company or become a “participant”
in any “election contest” or other proxy contest (as such terms are defined or used in Rule 14a-11 under the Exchange Act)
with respect to the Company; (2) form, join or in any way participate in a “group” (as defined under the Exchange Act) with
respect to the Company or the acquisition or voting of any of the Company’s voting shares (other than a group consisting solely
of Recipient and its Affiliates); (3) initiate, or propose any shareholder proposals for submission to a vote or written consent of the
Company’s shareholders or propose any Person for election to or seek representation on the Company’s Board of Directors;
(4) otherwise act, alone or in concert with others, to seek to control the management, Board of Directors or policies of the Company;
(5) take any action which might force the Company to make a public announcement regarding the matters set forth in clauses (a)(1) through
(4) above or in Section 5.1(b); or (6) enter into any discussions, arrangements or agreements with any third party, other than
its financial, legal or other advisors, with respect to any of the foregoing or the matters set forth in Section 5.1(b); or
(b)
acquire (or propose or agree to acquire) ownership (including, but not limited to, beneficial ownership as defined in Rule 13d-3 under
the Exchange Act) or control of, by purchase or otherwise, any loans, debt securities or equity securities of the Company or any of its
subsidiaries, or rights or options to acquire interests in any of the Company’s loans, debt securities, equity securities, or assets,
except to the extent resulting exclusively from actions taken by the Company; or
(c)
publicly make or announce, or otherwise publicly disclose an intent to propose, any demand, request or proposal to amend, waive or terminate
any provision of this Agreement, including requesting a waiver or modification of this Section 5.1.
5.2
Notwithstanding anything to the contrary in Section 5.1, Recipient may submit to the Company one or more offers, proposals or
indications of interest related to a Transaction between Recipient or its Affiliates and the Company; provided that each submission
is made solely to the Company’s Board of Directors or senior management team on a confidential basis and in a manner that would
not reasonably be expected to require the Company to make public disclosure of such offer, proposal or indication of interest as reasonably
determined by the Company.
5.3
Notwithstanding the foregoing provisions of Section 5.1, the Standstill Period shall expire immediately if (1) the Company enters
into a definitive agreement with any Person(s) other than Recipient or its Affiliates or any group containing Recipient or its Affiliates
(a “Third Party”), which definitive agreement provides for (a) a tender or exchange offer to acquire directly or indirectly
common stock under circumstances such that, immediately after such acquisition, such Third Party would beneficially own more than a majority
of the voting power of the outstanding equity securities of the Company or (b) a merger, consolidation or other business combination
that would result in the Company’s stockholders immediately prior to the consummation of such transaction owning less than a majority
of the voting power of the outstanding equity securities of the resulting entity (and in the ultimate parent company of such resulting
company) immediately following consummation of such transaction; or (2) a tender or exchange offer is made for the common stock of the
Company which, if consummated, would result in a Third Party beneficially owning more than a majority of the voting power of the outstanding
equity securities of the Company and the Board of Directors of the Company either accepts such offer or fails to recommend that its shareholders
reject such offer within ten business days from the date of commencement of such offer.
6.
Non-Solicitation. In consideration of the Confidential Information being furnished, Recipient agrees that, for a period of twelve
(12) months from the date hereof, neither the Recipient nor any of its Affiliates will, directly or indirectly, solicit for employment,
or hire, any of the current officers or employees of the Company or any of its subsidiaries, without obtaining the prior written consent
of the Company; provided, that, notwithstanding the foregoing, nothing herein shall restrict or preclude Recipient’s or
its Affiliates’ right to solicit for employment, or hire any such person (a) who contacts Recipient or its Affiliate as a result
of generalized searches for employees by use of advertisements in any medium, (b) who is referred to Recipient or its Affiliate through
any recruiting firm that does not specifically target or is not directed to specifically target the Company’s or any of its subsidiary’s
employees or (c) who ceases to be employed by the Company or any of its subsidiaries at least six (6) months prior to such solicitation
for employment or hiring.
7.
No Contact. Neither the Recipient nor any of its Affiliates will, directly or indirectly, initiate contact or discussions with
any Persons known by Recipient or any of its Affiliates to be an employee, customer or supplier of the Company or any of its subsidiaries
in any way regarding the Company or the Transaction without obtaining the prior written consent of the Company, except that Recipient
and its Affiliates shall not be prohibited from any contacts made in the ordinary course of business and which do not in any way reference
the Transaction; provided, however, that the foregoing will not prohibit Recipient or any of its Affiliates from conducting general
market research on a “no names” basis; provided, that Recipient and its Affiliates do not reveal the Confidential
Information, the fact that Recipient received the Confidential Information, the fact that Recipient is considering the Transaction (other
than as publicly disclosed in connection with Recipient’s obligations under Section 13(d) of the Exchange Act and the rules and
regulations thereunder), or any terms or conditions with respect to the Transaction that have not been publicly disclosed.
8.
Securities Law Compliance. Recipient hereby acknowledges that it is aware that the United States securities laws prohibit any
Person who is in possession of material, non-public information concerning an issuer with respect to matters that are of the nature of
those covered by this Agreement from purchasing or selling securities of such issuer or from communicating such information to any other
Person under circumstances in which it is reasonably foreseeable that such Person may purchase or sell such securities. Recipient agrees
that it and its Affiliates will not, and Recipient will instruct its Representatives not to, trade in the Company’s securities
while in possession of material nonpublic information or at all until the Recipient, such Affiliates and such Representatives can do
so in compliance with all applicable laws and without breach of this Agreement.
9.
No Representations or Warranties. Nothing in this Agreement shall be deemed to be a representation or warranty by the Company
or its Representatives about any Confidential Information. Recipient acknowledges and agrees that neither the Company nor any of its
Representatives has made any representation or warranty, express or implied, as to the accuracy and completeness of any Confidential
Information provided by it or its Representatives. Any such representations and warranties shall only be made in a definitive agreement
that is duly executed and delivered by the Parties (or their Affiliates) relating to a Transaction.
10.
No Agreement. Except as may be set forth in a definitive agreement for a Transaction, the Company has the absolute right to determine
what information, properties and personnel it wishes to make available to Recipient and its Representatives. Unless a definitive agreement
regarding a Transaction has been executed and delivered by the Parties, neither Party, nor any of their stockholders, Affiliates or Representatives,
shall be under any legal obligation of any kind whatsoever with respect to such a Transaction by virtue of this Agreement except as expressly
set forth in this Agreement. The Parties further acknowledge and agree that each Party reserves the right, in its sole discretion, to
reject any and all proposals made by the other Party or any of its Representatives with regard to a Transaction, and to suspend or terminate
discussions and negotiations with the other Party at any time.
11.
Negotiated Agreement. The Parties each acknowledge that this Agreement was negotiated by sophisticated parties at arms’
length and this Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against
the Party drafting or causing any instrument to be drafted.
12.
Remedies. It is understood and agreed that money damages will not be a sufficient remedy for any breach of this Agreement by Recipient
or its Representatives and that the Company shall be entitled to equitable relief, including specific performance and injunction, as
a remedy for any such breach or threatened breach. Recipient agrees to waive, and to use its commercially reasonable efforts to cause
its directors, officers, employees or agents to waive, any requirement for the securing or posting of any bond or other security in connection
with such remedy. Such remedies shall not be deemed to be the exclusive remedies for a breach of this Agreement by Recipient or its Representatives,
but shall be in addition to all other remedies available at law or in equity to the Company including remedies pursuant to applicable
laws relating to trade secrets.
13.
Governing Law; Jurisdiction; Venue. This Agreement is for the benefit of each of the Parties and is governed by the laws of the
State of Delaware without regard to any conflict of laws principles thereof. Any action brought in connection with this Agreement shall
be brought in the Delaware Court of Chancery located in County of Wilmington in the State of Delaware, and the Parties hereby irrevocably
consent to the jurisdiction of such courts and waive any objections as to venue or inconvenient forum. EACH OF THE PARTIES HERETO IRREVOCABLY
AGREES TO WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) RELATED TO OR ARISING OUT OF THIS AGREEMENT.
14.
Assignment. This Agreement may not be assigned by either Party without the prior written consent of the other Party. This Agreement
shall be binding on the successors and permitted assigns of each Party.
15.
Entire Agreement; No Waiver. This Agreement sets forth the entire agreement between the Parties as to the subject matter hereof
and supersedes all prior written and oral agreements between the Parties regarding such subject matter. No failure or delay by a Party
in exercising any right, power or privilege under this Agreement shall operate as a waiver, nor shall any single or partial exercise
preclude any other or further exercise, or the exercise of any other right, power or privilege under this Agreement.
16.
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute but one and the same Agreement. Signatures to this Agreement transmitted by facsimile transmission,
by electronic mail in PDF form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of
a document, will have the same effect as physical delivery of the paper document bearing the original signature.
17.
Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable,
such provision will be deemed limited by construction in scope and effect to the minimum extent necessary to render it valid and enforceable
and, in the event no such limiting construction is possible, the invalid or unenforceable provision will be deemed severed from this
Agreement without affecting the validity of any other term or provision.
18.
Modifications. No provision of this Agreement may be waived, amended or otherwise modified except by a writing signed by the Parties.
19.
Term. Except as otherwise provided herein, the obligations of the Parties under this Agreement shall terminate 18 months from
the date hereof (the “Termination Date”); provided that the provisions of Sections 8 through 20,
shall survive the Termination Date.
20.
Notices. All notices hereunder shall be deemed given if in writing and delivered by facsimile, courier, electronic mail or by
registered or certified mail (return receipt requested) to the Parties and their respective addresses, email addresses and facsimile
numbers (or at such other addresses, email addresses or facsimile numbers as shall be specified by like notice) set forth on the signature
page(s) to this Agreement. Any notice given by delivery, mail (including electronic mail) or courier shall be effective when received.
Any notice given by facsimile shall be effective upon oral or machine confirmation of transmission.
[Intentionally
left blank]
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
| |
Overseas
Shipholding Group, Inc., on its behalf and on behalf of its direct and indirect subsidiaries |
| |
|
|
| |
By:
|
/s/
Susan Allan |
| |
Name: |
Susan
Allan |
| |
Title: |
VP,
General Counsel and Corporate Secretary |
| |
|
|
| |
Address
for Notices: |
| |
|
| |
302
Knights Run Avenue |
| |
Suite
1200 |
| |
Tampa,
Florida 33602 |
| |
|
|
| |
Saltchuk
Resources, Inc., on its behalf and on behalf of its affiliates and any successor thereto |
| |
|
|
| |
By:
|
/s/
David Stewart |
| |
Name: |
David
Stewart |
| |
Title:
|
SVP,
General Counsel |
| |
Address
for Notices: |
| |
|
| |
450
Alaskan Way South, Ste 708 |
| |
Seattle,
WA 98104 |
| |
Attention:
|
General
Counsel |
Exhibit
(e)(3)(i)
Execution
Version
OVERSEAS
SHIPHOLDING GROUP, INC.
May
19, 2024
Samuel
H. Norton
302
Knights Run Avenue
Suite
1200
Tampa,
FL 33602
Dear
Mr. Norton:
As
you know, Overseas Shipholding Group, Inc. (“OSG”), is contemplating entering into an Agreement and Plan of Merger
(the “Merger Agreement”) with Saltchuk Resources, Inc. (“Saltchuk”), and a wholly owned subsidiary
of Saltchuk (“Saltchuk Subsidiary”), whereby Saltchuk will acquire all of the outstanding equity securities of OSG
by means of a tender offer by the Saltchuk Subsidiary (the “Tender Offer”) followed by a merger of the Saltchuk Subsidiary
with and into OSG (the “Merger”).
Saltchuk
intends to engage in good-faith discussions with you regarding the terms and conditions of your continuing employment, including your
post-closing compensation package. In order to facilitate these negotiations, you agree, via your signature to this letter agreement,
that the following will not, individually or in the aggregate, constitute “Good Reason” pursuant to Section 4(e) of your
employment agreement with OSG (your “Employment Agreement”): (x) the mere consummation of the Tender Offer and/or
the Merger, or (y) any change in your employment duties and responsibilities that reasonably result from the fact that OSG will, by reason
of the Tender Offer and the Merger, cease to be publicly traded. Nothing in this letter constitutes a waiver of any other rights or entitlements
that you may have under your Employment Agreement or otherwise, including any rights that you may have to claim “Good Reason”
due to the occurrence of any other facts, circumstances, or events either before or after the date of this letter agreement.
As
an inducement for you to provide the waiver described above, Saltchuk agrees to the following:
| |
● |
Beginning
promptly after the date hereof, Saltchuk will in good faith negotiate with you the terms of a new employment agreement between you,
OSG and Saltchuk (a “New Employment Agreement”) that provides for (x) compensation and benefits opportunities
that are consistent in all respects with Saltchuk’s employee-related obligations under the Merger Agreement, and (y) long-term
incentive opportunities that provide substantially equivalent value as your annual long-term equity-based compensation opportunities
granted to you in 2024 (both as to annual target grant date award value as well as opportunity for upside based on business performance,
adjusted to reflect the fact that the Company is no longer publicly traded). |
If
OSG and Saltchuk fail to enter into a New Employment Agreement with you prior to the 60th day following the consummation of the Merger
(or such later date to which you and Saltchuk may agree), all of your then-outstanding rights to cash payments in respect of your OSG
time- and performance-based restricted stock units (i.e., “Target Cash Awards” as defined in the Merger Agreement) will be
accelerated and paid in full promptly thereafter, with performance-based awards paid assuming performance achievement at target (100%),
and if you are so paid in full in accordance with the foregoing, you will not be entitled to any other severance benefits (including
cash severance benefits under your Employment Agreement).
As
an additional inducement to provide the waiver and in recognition of your contribution to the transactions contemplated by the Merger
Agreement, subject to your continued employment with the Company through the consummation of the Merger, you will be entitled to receive
a transaction bonus equal to $475,000, less applicable withholdings and deductions, paid in a single lump sum on or as soon as reasonably
practicable following the consummation of the Merger.
Please
sign below to indicate your agreement to the foregoing. Except as provided above, the terms of your Employment Agreement will remain
in full force and effect, and your rights under your Employment Agreement will not be affected by the limited waiver set forth above.
If the closing of the Merger does not occur for any reason, this letter agreement will be null and void ab initio.
| |
Sincerely, |
| |
|
| |
OVERSEAS
SHIPHOLDING GROUP, INC. |
| |
|
| |
By: |
/s/ Susan
Allan |
| |
Name:
|
Susan
Allan |
| |
Title:
|
Vice
President, General Counsel and Corporate Secretary |
| |
|
| |
SALTCHUK
RESOURCES, INC. |
| |
|
| |
By: |
/s/
Colleen Rosas |
| |
Name:
|
Colleen
Rosas |
| |
Title:
|
SVP,
Human Resources |
ACCEPTED
AND AGREED:
| By: |
/s/
Samuel H. Norton |
|
| Name: |
Samuel
H. Norton |
|
| Date: |
May 19, 2024 |
|
[Signature
Page – Good Reason Waiver]
Exhibit
(e)(3)(ii)
Execution
Version
OVERSEAS
SHIPHOLDING GROUP, INC.
May
19, 2024
Patrick
J. O’Halloran
302
Knights Run Avenue
Suite
1200
Tampa,
FL 33602
Dear
Mr. O’Halloran:
As
you know, Overseas Shipholding Group, Inc. (“OSG”), is contemplating entering into an Agreement and Plan of Merger
(the “Merger Agreement”) with Saltchuk Resources, Inc. (“Saltchuk”), and a wholly owned subsidiary
of Saltchuk (“Saltchuk Subsidiary”), whereby Saltchuk will acquire all of the outstanding equity securities of OSG
by means of a tender offer by the Saltchuk Subsidiary (the “Tender Offer”) followed by a merger of the Saltchuk Subsidiary
with and into OSG (the “Merger”).
Saltchuk
intends to engage in good-faith discussions with you regarding the terms and conditions of your continuing employment, including your
post-closing compensation package. In order to facilitate these negotiations, you agree, via your signature to this letter agreement,
that the following will not, individually or in the aggregate, constitute “Good Reason” pursuant to Section 4(e) of your
employment agreement with OSG (your “Employment Agreement”): (x) the mere consummation of the Tender Offer and/or
the Merger, or (y) any change in your employment duties and responsibilities that reasonably result from the fact that OSG will, by reason
of the Tender Offer and the Merger, cease to be publicly traded. Nothing in this letter constitutes a waiver of any other rights or entitlements
that you may have under your Employment Agreement or otherwise, including any rights that you may have to claim “Good Reason”
due to the occurrence of any other facts, circumstances, or events either before or after the date of this letter agreement.
As
an inducement for you to provide the waiver described above, Saltchuk agrees to the following:
| |
● |
Beginning
promptly after the date hereof, Saltchuk will in good faith negotiate with you the terms of a new employment agreement between you,
OSG and Saltchuk (a “New Employment Agreement”) that provides for (x) compensation and benefits opportunities
that are consistent in all respects with Saltchuk’s employee-related obligations under the Merger Agreement, and (y) long-term
incentive opportunities that provide substantially equivalent value as your annual long-term equity-based compensation opportunities
granted to you in 2024 (both as to annual target grant date award value as well as opportunity for upside based on business performance,
adjusted to reflect the fact that the Company is no longer publicly traded). |
If
OSG and Saltchuk fail to enter into a New Employment Agreement with you prior to the 60th day following the consummation of the Merger
(or such later date to which you and Saltchuk may agree), all of your then-outstanding rights to cash payments in respect of your OSG
time- and performance-based restricted stock units (i.e., “Target Cash Awards” as defined in the Merger Agreement) will be
accelerated and paid in full promptly thereafter, with performance-based awards paid assuming performance achievement at target (100%),
and if you are so paid in full in accordance with the foregoing, you will not be entitled to any other severance benefits (including
cash severance benefits under your Employment Agreement).
As
an additional inducement to provide the waiver and in recognition of your contribution to the transactions contemplated by the Merger
Agreement, subject to your continued employment with the Company through the consummation of the Merger, you will be entitled to receive
a transaction bonus equal to $125,000, less applicable withholdings and deductions, paid in a single lump sum on or as soon as reasonably
practicable following the consummation of the Merger.
Please
sign below to indicate your agreement to the foregoing. Except as provided above, the terms of your Employment Agreement will remain
in full force and effect, and your rights under your Employment Agreement will not be affected by the limited waiver set forth above.
If the closing of the Merger does not occur for any reason, this letter agreement will be null and void ab initio.
| |
Sincerely, |
| |
|
| |
OVERSEAS
SHIPHOLDING GROUP, INC. |
| |
|
| |
By: |
/s/
Samuel H. Norton |
| |
Name:
|
Samuel
H. Norton |
| |
Title:
|
Chief
Executive Officer and President |
| |
|
|
| |
SALTCHUK
RESOURCES, INC. |
| |
|
| |
By: |
/s/
Colleen Rosas |
| |
Name:
|
Colleen
Rosas |
| |
Title:
|
SVP,
Human Resources |
ACCEPTED
AND AGREED:
| By: |
/s/
Patrick J. O’Halloran |
|
| Name: |
Patrick
J. O’Halloran |
|
| Date: |
May 19, 2024 |
|
[Signature
Page – Good Reason Waiver]
Exhibit
(e)(3)(iii)
Execution
Version
OVERSEAS
SHIPHOLDING GROUP, INC.
May
19, 2024
Damon
M. Mote
302
Knights Run Avenue
Suite
1200
Tampa,
FL 33602
Dear
Mr. Mote:
As
you know, Overseas Shipholding Group, Inc. (“OSG”), is contemplating entering into an Agreement and Plan of Merger
(the “Merger Agreement”) with Saltchuk Resources, Inc. (“Saltchuk”), and a wholly owned subsidiary
of Saltchuk (“Saltchuk Subsidiary”), whereby Saltchuk will acquire all of the outstanding equity securities of OSG
by means of a tender offer by the Saltchuk Subsidiary (the “Tender Offer”) followed by a merger of the Saltchuk Subsidiary
with and into OSG (the “Merger”).
Saltchuk
intends to engage in good-faith discussions with you regarding the terms and conditions of your continuing employment, including your
post-closing compensation package. In order to facilitate these negotiations, you agree, via your signature to this letter agreement,
that the following will not, individually or in the aggregate, constitute “Good Reason” pursuant to Section 4(e) of your
employment agreement with OSG (your “Employment Agreement”): (x) the mere consummation of the Tender Offer and/or
the Merger, or (y) any change in your employment duties and responsibilities that reasonably result from the fact that OSG will, by reason
of the Tender Offer and the Merger, cease to be publicly traded. Nothing in this letter constitutes a waiver of any other rights or entitlements
that you may have under your Employment Agreement or otherwise, including any rights that you may have to claim “Good Reason”
due to the occurrence of any other facts, circumstances, or events either before or after the date of this letter agreement.
As
an inducement for you to provide the waiver described above, Saltchuk agrees to the following:
| |
● |
Beginning
promptly after the date hereof, Saltchuk will in good faith negotiate with you the terms of a new employment agreement between you,
OSG and Saltchuk (a “New Employment Agreement”) that provides for (x) compensation and benefits opportunities
that are consistent in all respects with Saltchuk’s employee-related obligations under the Merger Agreement, and (y) long-term
incentive opportunities that provide substantially equivalent value as your annual long-term equity-based compensation opportunities
granted to you in 2024 (both as to annual target grant date award value as well as opportunity for upside based on business performance,
adjusted to reflect the fact that the Company is no longer publicly traded). |
If
OSG and Saltchuk fail to enter into a New Employment Agreement with you prior to the 60th day following the consummation of the Merger
(or such later date to which you and Saltchuk may agree), all of your then-outstanding rights to cash payments in respect of your OSG
time- and performance-based restricted stock units (i.e., “Target Cash Awards” as defined in the Merger Agreement) will be
accelerated and paid in full promptly thereafter, with performance-based awards paid assuming performance achievement at target (100%),
and if you are so paid in full in accordance with the foregoing, you will not be entitled to any other severance benefits (including
cash severance benefits under your Employment Agreement).
As
an additional inducement to provide the waiver and in recognition of your contribution to the transactions contemplated by the Merger
Agreement, subject to your continued employment with the Company through the consummation of the Merger, you will be entitled to receive
a transaction bonus equal to $125,000, less applicable withholdings and deductions, paid in a single lump sum on or as soon as reasonably
practicable following the consummation of the Merger.
Please
sign below to indicate your agreement to the foregoing. Except as provided above, the terms of your Employment Agreement will remain
in full force and effect, and your rights under your Employment Agreement will not be affected by the limited waiver set forth above.
If the closing of the Merger does not occur for any reason, this letter agreement will be null and void ab initio.
| |
Sincerely, |
| |
|
| |
OVERSEAS
SHIPHOLDING GROUP, INC. |
| |
|
| |
By: |
/s/
Samuel H. Norton |
| |
Name: |
Samuel
H. Norton |
| |
Title:
|
Chief
Executive Officer and President |
| |
|
|
| |
SALTCHUK
RESOURCES, INC. |
| |
|
| |
By: |
/s/
Colleen Rosas |
| |
Name:
|
Colleen
Rosas |
| |
Title:
|
SVP,
Human Resources |
ACCEPTED
AND AGREED:
| By: |
/s/
Damon M. Mote |
|
| Name: |
Damon
M. Mote |
|
| Date: |
May 19, 2024 |
|
[Signature
Page – Good Reason Waiver]
Exhibit
(e)(3)(iv)
Execution
Version
OVERSEAS
SHIPHOLDING GROUP, INC.
May
19, 2024
Susan
Allan
302
Knights Run Avenue
Suite
1200
Tampa,
FL 33602
Dear
Ms. Allan:
As
you know, Overseas Shipholding Group, Inc. (“OSG”), is contemplating entering into an Agreement and Plan of Merger
(the “Merger Agreement”) with Saltchuk Resources, Inc. (“Saltchuk”), and a wholly owned subsidiary
of Saltchuk (“Saltchuk Subsidiary”), whereby Saltchuk will acquire all of the outstanding equity securities of OSG
by means of a tender offer by the Saltchuk Subsidiary (the “Tender Offer”) followed by a merger of the Saltchuk Subsidiary
with and into OSG (the “Merger”).
Saltchuk
intends to engage in good-faith discussions with you regarding the terms and conditions of your continuing employment, including your
post-closing compensation package. In order to facilitate these negotiations, you agree, via your signature to this letter agreement,
that the following will not, individually or in the aggregate, constitute “Good Reason” pursuant to Section 4(e) of your
employment agreement with OSG (your “Employment Agreement”): (x) the mere consummation of the Tender Offer and/or
the Merger, or (y) any change in your employment duties and responsibilities that reasonably result from the fact that OSG will, by reason
of the Tender Offer and the Merger, cease to be publicly traded. Nothing in this letter constitutes a waiver of any other rights or entitlements
that you may have under your Employment Agreement or otherwise, including any rights that you may have to claim “Good Reason”
due to the occurrence of any other facts, circumstances, or events either before or after the date of this letter agreement.
As
an inducement for you to provide the waiver described above, Saltchuk agrees to the following:
| |
● |
Beginning
promptly after the date hereof, Saltchuk will in good faith negotiate with you the terms of a new employment agreement between you,
OSG and Saltchuk (a “New Employment Agreement”) that provides for (x) compensation and benefits opportunities
that are consistent in all respects with Saltchuk’s employee-related obligations under the Merger Agreement, and (y) long-term
incentive opportunities that provide substantially equivalent value as your annual long-term equity-based compensation opportunities
granted to you in 2024 (both as to annual target grant date award value as well as opportunity for upside based on business performance,
adjusted to reflect the fact that the Company is no longer publicly traded). |
If
OSG and Saltchuk fail to enter into a New Employment Agreement with you prior to the 60th day following the consummation of the Merger
(or such later date to which you and Saltchuk may agree), all of your then-outstanding rights to cash payments in respect of your OSG
time- and performance-based restricted stock units (i.e., “Target Cash Awards” as defined in the Merger Agreement) will be
accelerated and paid in full promptly thereafter, with performance-based awards paid assuming performance achievement at target (100%),
and if you are so paid in full in accordance with the foregoing, you will not be entitled to any other severance benefits (including
cash severance benefits under your Employment Agreement).
As
an additional inducement to provide the waiver and in recognition of your contribution to the transactions contemplated by the Merger
Agreement, subject to your continued employment with the Company through the consummation of the Merger, you will be entitled to receive
a transaction bonus equal to $125,000, less applicable withholdings and deductions, paid in a single lump sum on or as soon as reasonably
practicable following the consummation of the Merger.
Please
sign below to indicate your agreement to the foregoing. Except as provided above, the terms of your Employment Agreement will remain
in full force and effect, and your rights under your Employment Agreement will not be affected by the limited waiver set forth above.
If the closing of the Merger does not occur for any reason, this letter agreement will be null and void ab initio.
| |
Sincerely, |
| |
|
| |
OVERSEAS
SHIPHOLDING GROUP, INC. |
| |
|
| |
By: |
/s/
Samuel H. Norton |
| |
Name:
|
Samuel
H. Norton |
| |
Title:
|
Chief
Executive Officer and President |
| |
|
|
| |
SALTCHUK
RESOURCES, INC. |
| |
|
| |
By: |
/s/
Colleen Rosas |
| |
Name:
|
Colleen
Rosas |
| |
Title:
|
SVP,
Human Resources |
ACCEPTED
AND AGREED:
| By: |
/s/
Susan Allan |
|
| Name: |
Susan
Allan |
|
| Date: |
May 19, 2024 |
|
[Signature
Page – Good Reason Waiver]
Exhibit
(e)(3)(v)
Execution
Version
OVERSEAS
SHIPHOLDING GROUP, INC.
May
19, 2024
Richard
Trueblood
302
Knights Run Avenue
Suite
1200
Tampa,
FL 33602
Dear
Dick:
As
you know, Overseas Shipholding Group, Inc. (“OSG”), is contemplating entering into an Agreement and Plan of Merger
(the “Merger Agreement”) with Saltchuk Resources, Inc. (“Saltchuk”), and a wholly owned subsidiary
of Saltchuk (“Saltchuk Subsidiary”), whereby Saltchuk will acquire all of the outstanding equity securities of OSG
by means of a tender offer by the Saltchuk Subsidiary followed by a merger of the Saltchuk Subsidiary with and into OSG (the “Merger”).
In
recognition of your contribution to the transactions contemplated by the Merger Agreement, subject to your continued employment with
the OSG through the consummation of the Merger, you will be entitled to receive a transaction bonus equal to $150,000, less applicable
withholdings and deductions, paid in a single lump sum on or as soon as reasonably practicable following the consummation of the Merger.
For
the avoidance of doubt, nothing in this letter agreement modifies your entitlements under the Merger Agreement, including your entitlements
as a holder of Shares or Company Equity Awards (each, as defined in the Merger Agreement). Following the closing of the Merger, the terms
of your employment agreement with OSG, dated as of November 30, 2017, including those terms relating to your severance entitlements upon
a future employment termination, will remain in full force and effect.
Please
sign below to indicate your agreement to the foregoing. If the consummation of the Merger does not occur for any reason, this letter
agreement will be null and void ab initio.
| |
Sincerely, |
| |
|
| |
OVERSEAS
SHIPHOLDING GROUP, INC. |
| |
|
| |
By: |
/s/
Samuel H. Norton |
| |
Name:
|
Samuel
H. Norton |
| |
Title:
|
Chief
Executive Officer and President |
ACCEPTED
AND AGREED:
| By: |
/s/
Richard Trueblood |
|
| Name:
|
Richard
Trueblood |
|
| Date: |
May 19, 2024 |
|
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