Nordic American Tankers Limited Annual Report 2019

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549FORM 20-F☐REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2019OR☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ____ to ____OR☐SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report: Not applicableFor the transition period from ___________________________ to ___________________________Commission file number 001-13944 NORDIC AMERICAN TANKERS LIMITED (Exact name of Registrant as specified in its charter) (Translation of Registrant’s name into English) BERMUDA (Jurisdiction of incorporation or organization) LOM Building 27 Reid Street Hamilton HM 11 Bermuda (Address of principal executive offices) Herbjørn Hansson, Chairman, President, and Chief Executive Officer,Tel No. 1 (441) 292-7202,LOM Building, 27 Reid Street, Hamilton HM 11, Bermuda (Name, Telephone, E-mail and/or Facsimile number andAddress of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of each classTrading Symbol(s)Name of each exchange on which registered Common Shares, $0.01 par valueNATNew York Stock Exchange Series A Participating Preferred Shares New York Stock Exchange Securities registered or to be registered pursuant to Section 12(g) of the Act: NoneSecurities for which there is a reporting obligation pursuant to Section 15(d) of the Act: NoneIndicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:As of December 31, 2019, there were outstanding 147,230,634 common shares of the Registrant, $0.01 par value per share.Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.☐ Yes☒ NoIf this report is an annual report or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Actof 1934.☐ Yes☒ NoNote – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations underthose Sections.Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.☒ Yes☐ NoIndicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of thischapter) during this preceding 12 months (or for such shorter period that the registrant was required to submit such files).☒ Yes☐ NoIndicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large acceleratedfiler”, “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐Emerging Growth Company ☐If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extendedtransition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April5, 2012.Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:☒ U.S. GAAP☐ International Financial Reporting Standards as issued by the International Accounting Standards Board☐ OtherIf “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow.☐ Item 17☐ Item 18If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).☐ Yes☒ No (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to thedistribution of securities under a plan confirmed by a court.☐ Yes☐ NoTABLE OF CONTENTSPagePART I ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS1ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE1ITEM 3.KEY INFORMATION1 A.SELECTED FINANCIAL DATA1 B.CAPITALIZATION AND INDEBTEDNESS2 C.REASONS FOR THE OFFER AND USE OF PROCEEDS2 D.RISK FACTORS2ITEM 4.INFORMATION ON THE COMPANY25 A.HISTORY AND DEVELOPMENT OF THE COMPANY25 B.BUSINESS OVERVIEW27 C.ORGANIZATIONAL STRUCTURE42 D.PROPERTY, PLANT AND EQUIPMENT42ITEM 4A.UNRESOLVED STAFF COMMENTS42ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS42 A.OPERATING RESULTS43 B.LIQUIDITY AND CAPITAL RESOURCES46 C.RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.48 D.TREND INFORMATION48 E.OFF BALANCE SHEET ARRANGEMENTS48 F.TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS48 G.SAFE HARBOR49 H.CRITICAL ACCOUNTING ESTIMATES49ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES53 A.DIRECTORS AND SENIOR MANAGEMENT55 B.COMPENSATION55 C.BOARD PRACTICES56 D.EMPLOYEES56 E.SHARE OWNERSHIP56ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS56 A.MAJOR SHAREHOLDERS56 B.RELATED PARTY TRANSACTIONS57 C.INTERESTS OF EXPERTS AND COUNSEL58ITEM 8.FINANCIAL INFORMATION58 A.CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION58 B.SIGNIFICANT CHANGES58ITEM 9.THE OFFER AND LISTING59ITEM 10.ADDITIONAL INFORMATION59 A.SHARE CAPITAL59 B.MEMORANDUM AND ARTICLES OF ASSOCIATION59 C.MATERIAL CONTRACTS64 D.EXCHANGE CONTROLS64 E.TAXATION65 F.DIVIDENDS AND PAYING AGENTS73 G.STATEMENT BY EXPERTS73 H.DOCUMENTS ON DISPLAY74 I.SUBSIDIARY INFORMATION74ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK74ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES74iPART II ITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES74ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS75ITEM 15.CONTROLS AND PROCEDURES75 A.DISCLOSURE CONTROLS AND PROCEDURES.75 B.MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.75 C.ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM.76 D.CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.76ITEM 16.RESERVED76ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT76ITEM 16B.CODE OF ETHICS76ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES76 A.AUDIT FEES76 B.AUDIT-RELATED FEES76 C.TAX FEES76 D.ALL OTHER FEES76 E.AUDIT COMMITTEE’S PRE-APPROVAL POLICIES AND PROCEDURES77 F.NOT APPLICABLE.77ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES77ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PERSONS.77ITEM 16F.CHANGE IN REGISTRANT`S CERTIFYING ACCOUNTANT.77ITEM 16G.CORPORATE GOVERNANCE77ITEM 16H.MINE SAFETY DISCLOSURE77PART IIIITEM 17.FINANCIAL STATEMENTS78ITEM 18.FINANCIAL STATEMENTS78ITEM 19.EXHIBITS78iiCAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTSCertain matters discussed herein may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans,objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement inconnection with this safe harbor legislation. This report and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect ourcurrent views with respect to future events and financial performance, and are not intended to give any assurance as to future results. When used in this document, the words “believe,”“expect,” “anticipate,” “estimate,” “intend,” “plan,” “target,” “project,” “likely,” “will,” “would,” “may,” “seek,” “continue,” “possible,” “might,” “forecast,” “potential,” “should,”“could” and similar expressions, terms, or phrases may identify forward-looking statements.The forward-looking statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, ourmanagement’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions werereasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond ourcontrol, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. We undertake no obligation to update any forward-looking statement,whether as a result of new information, future events or otherwise.Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of worldeconomies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker market, as a result of changes in thepetroleum production levels set by the Organization of the Petroleum Exporting Countries, or OPEC, and worldwide oil consumption and storage, changes in our operating expenses,including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, changes in governmental rules and regulations or actionstaken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due toaccidents or political events, vessel breakdowns and instances of off-hire, failure on the part of a seller to complete a sale of a vessel to us and other important factors described fromtime to time in the reports filed by the Company with the Securities and Exchange Commission, or the SEC.PART IITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERSNot applicableITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLENot applicableITEM 3.KEY INFORMATIONThroughout this annual report, all references to “Nordic American Tankers,” “NAT,” the “Company,” “the Group,” “we,” “our,” and “us” refer to Nordic American TankersLimited and its subsidiaries. Unless otherwise indicated, all references to “U.S. dollars,” “USD,” “dollars,” “US$” and “$” in this annual report are to the lawful currency of theUnited States of America and references to “Norwegian Kroner” or “NOK” are to the lawful currency of Norway.A.Selected Financial DataThe following selected historical financial information should be read in conjunction with our audited financial statements and related notes, which are included herein, togetherwith Item 5. Operating and Financial Review and Prospects. The Statements of Operations data for each of the three years ended December 31, 2019, 2018 and 2017 and selected BalanceSheet data as of December 31, 2019 and 2018 have been derived from our audited financial statements included elsewhere in this document. The Statements of Operations financialinformation for each of the years ended December 31, 2016 and 2015 and selected balance sheet information as of December 31, 2017, 2016 and 2015 have been derived from our auditedfinancial statements not included in this Annual Report on Form 20-F.SELECTED CONSOLIDATED FINANCIAL DATA Year ended December 31, All figures in thousands of USD except share data 2019 2018 2017 2016 2015 Voyage Revenues 317,220 289,016 297,141 357,451 445,738 Voyage Expenses (141,770) (165,012) (142,465) (125,987) (158,656)Vessel Operating Expense (66,033) (80,411) (87,663) (80,266) (66,589)General and Administrative Expenses (13,481) (12,727) (12,575) (12,296) (9,790)Depreciation Expenses (63,965) (60,695) (100,669) (90,889) (82,610)Impairment Loss on Vessel - (2,168) (110,480) - - Impairment Loss on Goodwill - - (18,979) - - Loss on Disposal of Vessels - (6,619) - - - Settlement Received - - - 5,328 - Net Operating (Loss) Income 31,971 (38,616) (175,690) 53,341 128,093 Interest Income 298 334 347 215 114 Interest Expense (38,390) (34,549) (20,464) (11,170) (10,855)Other Financial (Expense) (4,160) (14,729) (644) (98) (167)Total Other Expenses (42,252) (48,944) (20,761) (11,053) (10,908)Income Tax Expense (71) (79) (83) (102) (96)(Loss) Gain on Equity Method Investment - (7,667) (8,435) (46,642) (2,462)Net (Loss) Income (10,352) (95,306) (204,969) (4,456) 114,627 Basic Earnings (Loss) per Share (0.07) (0.67) (1.97) (0.05) 1.29 Diluted Earnings (Loss) per Share (0.07) (0.67) (1.97) (0.05) 1.29 Cash Dividends Declared per Share 0.10 0.07 0.53 1.37 1.38 Basic Weighted Average Shares Outstanding 142,571,361 141,969,666 103,832,680 92,531,001 89,182,001 Diluted Weighted Average Shares Outstanding 142,571,361 141,969,666 103,832,680 92,531,001 89,182,001 Market Price per Common Share as of December 31, 4.92 2.00 2.46 8.40 15.54 1Other financial data: Net Cash Provided by (Used in) Operating Activities 52,858 (16,103) 31,741 127,786 174,392 Cash Dividends Paid 14,255 9,936 54,226 125,650 123,071 Selected Balance Sheet Data (at period end): Cash and Cash Equivalents 48,847 49,327 58,359 82,170 29,889 Total Assets 1,030,903 1,071,111 1,141,063 1,349,904 1,239,194 Total Long-Term Debt (1) 375,364 417,836 388,855 442,820 324,568 Common Stock 1,472 1,420 1,420 1,020 892 Total Shareholders’ Equity 595,424 602,031 711,064 871,049 880,721 (1) Debt consists of $385,285, $419,867, $391,641, $447,000 and $330,000 as of December 31, 2019, 2018, 2017, 2016 and 2015, respectively (all numbers in thousands of U.S. dollars),excluding deferred financing costs.B.Capitalization and IndebtednessNot applicable.C.Reasons for the offer and use of ProceedsNot applicable.D.Risk FactorsSome of the following risks relate principally to the industry in which we operate. Other risks relate principally to ownership of our common stock. The occurrence of any of theevents described in this section could significantly and negatively affect our business, financial condition, operating results or cash available for dividends or the trading price of ourcommon stock.Industry Specific Risk FactorsIf the tanker industry, which historically has been cyclical and volatile, is depressed in the future, our revenues, earnings and available cash flow may decrease.Historically, the tanker industry has been highly cyclical, with volatility in profitability, charter rates and asset values resulting from changes in the supply of and demand fortanker capacity. Fluctuations in charter rates and tanker values result from changes in the supply of and demand for tanker capacity and changes in the supply of and demand for oil andoil products. These factors may adversely affect the rates payable and the amounts we receive in respect of our vessels. Our ability to re-charter our vessels on the expiration ortermination of their current spot and time charters and the charter rates payable under any renewal or replacement charters will depend upon, among other things, economic conditions inthe tanker market and we cannot guarantee that any renewal or replacement charters we enter into will be sufficient to allow us to operate our vessels profitably.2The factors that influence demand for tanker capacity include:•supply and demand for oil and oil products;•global and regional economic and political conditions and developments, including developments in international trade, national oil reserves policies, fluctuations inindustrial and agricultural production and armed conflicts;•regional availability of refining capacity;•environmental and other legal and regulatory developments;•the distance oil and oil products are to be moved by sea;•changes in seaborne and other transportation patterns, including changes in the distances over which tanker cargoes are transported by sea;•increases in the production of oil in areas linked by pipelines to consuming areas, the extension of existing, or the development of new, pipeline systems in markets we mayserve, or the conversion of existing non-oil pipelines to oil pipelines in those markets;•currency exchange rates;•weather and acts of God, natural disasters and health disasters;•competition from alternative sources of energy and from other shipping companies and other modes of transport;•international sanctions, embargoes, import and export restrictions, nationalizations, piracy and wars;•economic slowdowns caused by public health events such as the recent coronavirus (“COVID-19”) outbreak; and•regulatory changes including regulations adopted by supranational authorities and/or industry bodies, such as safety and environmental regulations and requirements bymajor oil companies.The factors that influence the supply of tanker capacity include:•current and expected purchase orders for tankers;•the number of tanker newbuilding deliveries;•any potential delays in the delivery of newbuilding vessels and/or cancellations of newbuilding orders;•the scrapping rate of older tankers;•technological advances in tanker design and capacity;•tanker freight rates, which are affected by factors that may affect the rate of newbuilding, swapping and laying up of tankers;•port and canal congestion;•price of steel and vessel equipment;3•conversion of tankers to other uses or conversion of other vessels to tankers;•the number of tankers that are out of service; and•changes in environmental and other regulations that may limit the useful lives of tankers.The factors affecting the supply and demand for tankers have been volatile and are outside of our control, and the nature, timing and degree of changes in industry conditionsare unpredictable, including those discussed above. Continued volatility may reduce demand for transportation of oil over longer distances and increase supply of tankers to carry thatoil, which may have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and existing contractual obligations.Any decrease in shipments of crude oil may adversely affect our financial performance.The demand for our vessels and services in transporting oil derives primarily from demand for Arabian Gulf, West African, North Sea and Caribbean crude oil, which, in turn,primarily depends on the economies of the world’s industrial countries and competition from alternative energy sources. A wide range of economic, social and other factors cansignificantly affect the strength of the world’s industrial economies and their demand for crude oil from the mentioned geographical areas. One such factor is the price of worldwide crudeoil.Any decrease in shipments of crude oil from the above mentioned geographical areas would have a material adverse effect on our financial performance. Among the factorswhich could lead to such a decrease are:•increased crude oil production from other areas;•increased refining capacity in the Arabian Gulf or West Africa;•increased use of existing and future crude oil pipelines in the Arabian Gulf or West Africa;•a decision by Arabian Gulf or West African oil-producing nations to increase their crude oil prices or to further decrease or limit their crude oil production;•armed conflict in the Arabian Gulf and West Africa and political or other factors; and•the development, availability and relative costs of nuclear power, natural gas, coal and other alternative sources of energy.In addition, volatile economic conditions affecting the world economies may result in reduced consumption of oil products and a decreased demand for our vessels and lowercharter rates, which could have a material adverse effect on our earnings and our ability to pay dividends.We are dependent on spot charters and any decrease in spot charter rates in the future may adversely affect our earnings and our ability to pay dividends.The 23 vessels that we currently operate are primarily employed in the spot market. We are therefore highly dependent on spot market charter rates.The international oil tanker industry has experienced volatile charter rates and vessel values and there can be no assurance that these charter rates and vessel values will notdecrease in the near future.The Baltic Dirty Tanker Index, or the BDTI, a U.S. dollar daily average of charter rates issued by the Baltic Exchange that takes into account input from brokers around the worldregarding crude oil fixtures for various routes and oil tanker vessel sizes, has been volatile. For example, in 2019, the BDTI reached a high of 1,958 and a low of 610. The Baltic CleanTanker Index, or BCTI, a comparable index to the BDTI, has similarly been volatile. In 2019, the BCTI reached a high of 1,031 and a low of 448. Although the BDTI and BCTI were 792 and683, respectively, as of March 5, 2020, there can be no assurance that the crude oil and petroleum products charter market will increase, and the market could again decline. This volatilityin charter rates depends, among other factors, on changes in the supply and demand for tanker capacity and changes in the supply and demand for oil and oil products, the demand forcrude oil and petroleum products, the inventories of crude oil and petroleum products in the United States and in other industrialized nations, oil refining volumes, oil prices, and anyrestrictions on crude oil production imposed by the Organization of the Petroleum Exporting Countries, or OPEC, and non-OPEC oil producing countries.4Charter rates in the tanker industry are volatile. We anticipate that future demand for our vessels, and in turn our future charter rates, will be dependent upon economic growthin the world’s economies, as well as seasonal and regional changes in demand and changes in the capacity of the world’s fleet. We believe that the relatively high charter rates that werepaid prior to 2008 were the result of economic growth in the world economies that exceeded growth in global vessel capacity. Since 2008, charter rates have been volatile, and there canbe no assurance that economic growth will not stagnate or decline leading to a decrease in vessel values and charter rates. A decline in vessel values and charter rates would have anadverse effect on our business, financial condition, results of operation and ability to pay dividends.Our results of operations are subject to seasonal fluctuations, which may adversely affect our financial condition.We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, charter rates.Declines in charter rates and other market deterioration could cause us to incur impairment charges.Our vessels are evaluated for impairment continuously or whenever events or changes in circumstances indicate that the carrying amount of a vessel may not be recoverable.The review for potential impairment indicators and projection of future cash flows related to the vessel is complex and requires us to make various estimates, including future freight ratesand earnings from operating the vessel. All of these items have historically been volatile. We estimate the undiscounted net cash flows from operating the vessels over their remaininguseful lives and compare those to the net carrying values of the vessels. If the total estimated undiscounted net cash flows for a vessel are less than the carrying amount of the vesselthe vessel is deemed impaired and written down to its fair market value. The carrying values of our vessels may not represent their fair market value at any point in time because themarket prices of secondhand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings. Any impairment charges incurred as a result of declines in charter ratescould negatively affect our business, financial condition and operating results. Impairment is assessed on a vessel by vessel basis.An over-supply of tanker capacity may lead to reductions in charter rates, vessel values, and profitability.The market supply of tankers is affected by a number of factors such as demand for energy resources, oil, and petroleum products, as well as strong overall economic growth inparts of the world economy including Asia. In recent years, shipyards have produced a large number of new tankers. If the capacity of new ships delivered exceeds the capacity oftankers being scrapped and lost, tanker capacity will increase. If the supply of tanker capacity increases and if the demand for tanker capacity does not increase correspondingly, charterrates could materially decline. A reduction in charter rates and the value of our vessels may have a material adverse effect on our results of operations and our ability to pay dividends.Acts of piracy on ocean-going vessels could adversely affect our business.Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Indian Ocean, the Gulf of Aden off the Coast ofSomalia and, in particular, the Gulf of Guinea region off of Nigeria, which experienced increased incidents of piracy in 2019. Sea piracy incidents continue to occur, particularly in the Gulfof Aden off the coast of Somalia and in the Gulf of Guinea, although some sources report that there was a drop in the number of piracy incidents in 2016. Acts of piracy and war likeconditions could result in harm or danger to the crews onboard our vessels. In addition, if piracy attacks occur in regions in which our vessels are deployed that insurers’ characterizedas “war risk” zones or by the Joint War Committee as “war and strikes” listed areas, premiums payable for such coverage could increase significantly and such insurance coverage maybe more difficult to obtain. In addition, crew costs, including costs which may be incurred to the extent we employ onboard security guards, could increase in such circumstances. Wemay not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, detention hijacking as a result of an act of piracyagainst our vessels, or an increase in cost, or unavailability of insurance for our vessels, could have a material adverse impact on our business, financial condition and results ofoperations.5Volatile economic conditions throughout the world, political instability, terrorist attacks, international hostilities and global public health threats could have an adverse impact on ourbusiness, operations and financial results.Our ability to secure funding is dependent on well-functioning capital markets and on an appetite to provide funding to the shipping industry. At present, capital markets arewell-functioning and funding is available for the shipping industry. However, if global economic conditions worsen or lenders for any reason decide not to provide debt financing to us,we may not be able to secure additional financing to the extent required, on terms acceptable to us or at all. If additional financing is not available when needed, or is available only onunfavorable terms, we may be unable to meet our obligations as they come due, or we may be unable to enhance our existing business, complete additional vessel acquisitions orotherwise take advantage of business opportunities as they arise.The world economy faces a number of challenges, including the effects of volatile oil prices, continuing turmoil and hostilities in the Middle East, the Korean Peninsula, NorthAfrica and other geographic areas and countries. If one or more of the major national or regional economies should weaken, there is a substantial risk that such a downturn will impactthe world economy. There has historically been a strong link between the development of the world economy and demand for energy, including oil and gas.Continuing conflicts in the Middle East and North Africa, may lead to additional acts of terrorism and armed conflict around the world, which may contribute to furthereconomic instability in the global financial markets. Terrorist attacks such as those in Paris on November 13, 2015, Manchester on May 22, 2017, as well as the frequent incidents ofterrorism in the Middle East, and the continuing response of the United States and others to these attacks, as well as the threat of future terrorist attacks around the world, continues tocause uncertainty in the world’s financial markets and international commerce and may affect our business, operating results and financial condition. Continuing conflicts and recentdevelopments in the Middle East, including increased tensions between the U.S. and Iran which in January 2020 escalated into a U.S. airstrike in Baghdad that killed a high-rankingIranian general, as well as the presence of U.S. or other armed forces in Iraq, Syria, Afghanistan and various other regions, may lead to acts of terrorism and armed conflict around theworld, which may contribute to further economic instability in the global financial markets and international commerce. Additionally, any escalations between the U.S. and Iran couldresult in retaliation from Iran that could potentially affect the shipping industry, through increased attacks on vessels in the Strait of Hormuz (which already experienced an increasednumber of attacks on and seizures of vessels in 2019). These uncertainties could also adversely affect our ability to obtain financing on terms acceptable to us or at all. In the past,political conflicts have also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. Acts ofterrorism and piracy have also affected vessels trading in regions such as the South China Sea and the Gulf of Aden off the coast of Somalia. Any of these occurrences, or theperception that our vessels are potential terrorist targets, could have a material adverse impact on our operating results, revenues, costs and ability to pay dividends in amountsanticipated or at all.In Europe, large sovereign debts and fiscal deficits, low growth prospects and high unemployment rates in a number of countries have contributed to the rise of Euroscepticparties, which would like their countries to leave the Euro. The exit of the United Kingdom from the European Union and potential new trade policies in the United States further increasethe risk of additional trade protectionism.In China, a transformation of the Chinese economy is underway, as China transforms from a production-driven economy towards a service or consumer-driven economy. TheChinese economic transition implies that we do not expect the Chinese economy to return to double digit GDP growth rates in the near term. The quarterly year-over-year growth rate ofChina’s GDP was approximately 6.1% for the year ended December 31, 2019, decreasing from approximately 6.6% for the year ended December 31, 2018, and continuing to remain belowpre-2008 levels. We cannot assure you that the Chinese economy will not experience a significant contraction in the future, especially in light of the impact of COVID-19. Furthermore,there is a rising threat of a Chinese financial crisis resulting from massive personal and corporate indebtedness and “trade wars.” The International Monetary Fund has warned thatcontinuing trade tensions, including significant tariff increase, between the United States and China are expected to result in a 0.8% cumulative reductions of global GDP in 2020. Wecannot assure you that the Chinese economy will not experience a significant contraction in the future.6While the recent developments in Europe and China have been without significant immediate impact on our charter rates, an extended period of deterioration in the worldeconomy could reduce the overall demand for our services. Such changes could adversely affect our future performance, results of operations, cash flows and financial position.Credit markets in the United States and Europe have in the past experienced significant contraction, de-leveraging and reduced liquidity, and there is a risk that U.S. federalgovernment and state governments and European authorities continue to implement a broad variety of governmental action and/or new regulation of the financial markets. Globalfinancial markets and economic conditions have been, and continue to be, volatile.The United Kingdom’s decision to leave the European Union following a referendum in June 2016 (“Brexit”) and it formally leaving the European Union on January 31, 2020,contributes to considerable uncertainty concerning the current and future economic environment. Brexit could adversely affect European or worldwide political, regulatory, economic ormarket conditions and could contribute to instability in global political institutions, regulatory agencies and financial markets. We believe that these effects of Brexit won’t materiallyaffect our business, results of operations and financial condition.Further, governments may turn and have turned to trade barriers to protect their domestic industries against foreign imports, thereby depressing shipping demand. In particular,leaders in the United States and China have implemented certain increasingly protective trade measures which have been somewhat mitigated by the recent trade deal (first phase tradeagreement) between the U.S. and China, which requires the purchase of over USD 50 billion of Chinese energy product including crude oil. Additionally, in March 2018, President Trumpannounced tariffs on imported steel and aluminum into the United States that could have a negative impact on international trade generally and in January 2019, the United Statesannounced expanded sanctions against Venezuela, which may have an effect on its oil output and in turn affect global oil supply. There have also been continuing trade tensions,including significant tariff increases, between the United States and China. Protectionist developments, or the perception that they may occur, may have a material adverse effect onglobal economic conditions, and may significantly reduce global trade. Moreover, increasing trade protectionism may cause an increase in (a) the cost of goods exported from regionsglobally, (b) the length of time required to transport goods and (c) the risks associated with exporting goods. Such increases may significantly affect the quantity of goods to be shipped,shipping time schedules, voyage costs and other associated costs, which could have an adverse impact on our charterers’ business, operating results and financial condition and couldthereby affect their ability to make timely charter hire payments to us and to renew and increase the number of their time charters with us. This could have a material adverse effect on ourbusiness, results of operations and financial condition.In addition, public health threats, such as COVID-19, influenza and other highly communicable diseases or viruses, outbreaks of which have from time to time occurred invarious parts of the world in which we operate, including China, could adversely impact our operations, the timing of completion of any outstanding or future newbuilding projects, aswell as the operations of our customers.Prospective investors should consider the potential impact, uncertainty and risk associated with the development in the wider global economy. Further economic downturn inany of these countries could have a material effect on our future performance, results of operations, cash flows and financial position.Outbreaks of epidemic and pandemic diseases and governmental responses thereto could adversely affect our business.Public health threats, such as the COVID-19 outbreak (as described more fully below), influenza and other highly communicable diseases or viruses, outbreaks of which havefrom time to time occurred in various parts of the world in which we operate, including China, could adversely impact our operations, the timing of completion of any outstanding orfuture newbuilding projects, as well as the operations of our customers.7The recent outbreak of COVID-19, a virus causing potentially deadly respiratory tract infections first identified in China and subsequently spreading around the world, hasnegatively affected economic conditions, the supply chain and the labor market regionally as well as globally and may otherwise impact our operations and the operations of ourcustomers and suppliers. As of March 2020, the outbreak of COVID-19 has been declared a pandemic by the World Health Organization (“WHO”). Governments in affected countries areimposing travel bans, quarantines and other emergency public health measures. As of March 15, 2020, the United States has temporarily restricted travel by foreign nationals into thecountry from a number of areas, including China and Europe. In addition, on March 18, 2020, the U.S. and Canada agreed to restrict all nonessential travel across the border. Companiesare also taking precautions, such as requiring employees to work remotely, imposing travel restrictions and temporarily closing businesses. These restrictions, and future prevention andmitigation measures, are likely to have an adverse impact on global economic conditions, which could materially and adversely affect our future operations. Uncertainties regarding theeconomic impact of the COVID-19 outbreak are likely to result in sustained market turmoil, which could also negatively impact our business, financial condition and cash flows. Thesemeasures, though temporary in nature, may continue and increase as countries attempt to contain the outbreak. As a result of these measures, our vessels may not be able to call onports, or may be restricted from disembarking from ports, located in regions affected by COVID-19. In addition we may experience severe operational disruptions and delays,unavailability of normal port infrastructure and services including limited access to equipment, critical goods and personnel, disruptions to crew change, quarantine of ships and/or crew,counterparty solidity, closure of ports and custom offices, as well as disruptions in the supply chain and industrial production which may lead to reduced cargo demand, amongst otherpotential consequences attendant to epidemic and pandemic diseases. The extent of the COVID-19 outbreak’s effect on our operational and financial performance will depend on futuredevelopments, including the duration, spread and intensity of the outbreak, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. As a result, wecannot predict the impact it may have on our future operations, which could be material and adverse, particularly if the pandemic continues to evolve into a severe worldwide healthcrisis.In addition, public health threats such as COVID-19, in any area, including areas where we do not operate, could disrupt international transportation. Our crews generally workon a rotation basis, with a substantial portion relying on international air transport for rotation. Any such disruptions could impact the cost of rotating our crews, and possibly impactour ability to maintain a full crew on all vessels at any given time. Any of these public health threats and related consequences could adversely affect our financial results.The U.K.’s withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and our business.In June 2016, a majority of voters in the U.K. elected to withdraw from the EU in a national referendum (informally known as “Brexit”), a process that the government of the U.K.formally initiated in March 2017. Since then, the U.K. and the EU have been negotiating the terms of a withdrawal agreement, which was approved in October 2019 and ratified in January2020. The U.K. formally exited the EU on January 31, 2020, although a transition period remains in place until December 2020, during which the U.K. will be subject to the rules andregulations of the EU while continuing to negotiate the parties’ relationship going forward, including trade deals. There is currently no agreement in place regarding the aftermath of thewithdrawal, creating significant uncertainty about the future relationship between the U.K. and the EU, including with respect to the laws and regulations that will apply as the U.K.determines which EU-derived laws to replace or replicate following the withdrawal. Brexit has also given rise to calls for the governments of other EU member states to considerwithdrawal. These developments and uncertainties, or the perception that any of them may occur, have had and may continue to have a material adverse effect on global economicconditions and the stability of global financial markets, and may significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain financialmarkets. Any of these factors could depress economic activity and restrict our access to capital, which could have a material adverse effect on our business and on our consolidatedfinancial position, results of operations and our ability to pay distributions. Additionally, Brexit or similar events in other jurisdictions, could impact global markets, including foreignexchange and securities markets; any resulting changes in currency exchange rates, tariffs, treaties and other regulatory matters could in turn adversely impact our business andoperations.8Brexit contributes to considerable uncertainty concerning the current and future economic environment. Brexit could adversely affect European or worldwide political,regulatory, economic or market conditions and could contribute to instability in global political institutions, regulatory agencies and financial markets.The current state of the global financial markets and current economic conditions may adversely impact our results of operation, financial condition, cash flows and ability to obtainfinancing or refinance our existing and future credit facilities on acceptable terms, which may negatively impact our business.Global financial markets and economic conditions have been, and continue to be, volatile. Beginning in February 2020, due in part to fears associated with the spread of COVID-19 (as more fully described above), global financial markets and starting in late February, financial markets in the U.S. experienced even greater relative volatility and a steep and abruptdownturn, which volatility and downturn may continue as COVID-19 continues to spread. Credit markets and the debt and equity capital markets have been distressed and theuncertainty surrounding the future of the global credit markets has resulted in reduced access to credit worldwide, particularly for the shipping industry. These issues, along withsignificant write-offs in the financial services sector, the re-pricing of credit risk and the current weak economic conditions, have made, and will likely continue to make, it difficult toobtain additional financing. The current state of global financial markets and current economic conditions might adversely impact our ability to issue additional equity at prices that willnot be dilutive to our existing shareholders or preclude us from issuing equity at all. Economic conditions and the economic slow-down resulting from COVID-19 and the intentionalgovernmental responses to the virus may also adversely affect the market price of our common shares.Also, as a result of concerns about the stability of financial markets generally, and the solvency of counterparties specifically, the availability and cost of obtaining money fromthe public and private equity and debt markets has become more difficult. Many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existingdebt at all or on terms similar to current debt, and reduced, and in some cases ceased, to provide funding to borrowers and other market participants, including equity and debt investors,and some have been unwilling to invest on attractive terms or even at all. Due to these factors, we cannot be certain that financing will be available if needed and to the extent required,or that we will be able to refinance our existing and future credit facilities, on acceptable terms or at all. If financing or refinancing is not available when needed, or is available only onunfavorable terms, we may be unable to meet our obligations as they come due or we may be unable to enhance our existing business, complete additional vessel acquisitions orotherwise take advantage of business opportunities as they arise. The recent COVID-19 outbreak has negatively impacted, and may continue to negatively impact, global economicactivity, demand for energy, and funds flows and sentiment in the global financial markets. Continued economic disruption caused by the continued failure to control the spread of thevirus could significantly impact our ability to obtain additional debt financing.We rely on our information systems to conduct our business, and failure to protect these systems against security breaches could adversely affect our business and results ofoperations. Additionally, if these systems fail or become unavailable for any significant period of time, our business could be harmed.The efficient operation of our business, including processing, transmitting and storing electronic and financial information, is dependent on computer hardware and softwaresystems. Information systems are vulnerable to security breaches by computer hackers and cyber terrorists. We rely on industry accepted security measures and technology tosecurely maintain confidential and proprietary information maintained on our information systems. However, these measures and technology may not adequately prevent securitybreaches. In addition, the unavailability of the information systems or the failure of these systems to perform as anticipated for any reason could disrupt our business and could result indecreased performance and increased operating costs, causing our business and results of operations to suffer. Any significant interruption or failure of our information systems or anysignificant breach of security could adversely affect our business and results of operations.9Changes in the price of fuel may adversely affect our profits.Fuel, including bunkers, is a significant, if not the largest, expense in our shipping operations, and changes in the price of fuel may adversely affect our profitability. The priceand supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by OPEC andother oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns. Further, fuel may become much moreexpensive in the future, including as a result of the implementation of low sulfur fuel requirements by the International Maritime Organization, or IMO, that took effect January 1, 2020,which may reduce our profitability and have a material adverse effect on our future performance, results of operations, cash flows and financial position. Fuel may become much moreexpensive in the future, which may reduce the profitability and competitiveness of our business versus other forms of transportation, such as truck or rail.We are subject to laws and regulations which can adversely affect our business, results of operations, cash flows and financial condition, and our ability to pay dividends.Our operations are subject to numerous laws and regulations in the form of international conventions and treaties, national, state and local laws and national and internationalregulations in force in the jurisdictions in which our vessels operate or are registered, which can significantly affect the ownership and operation of our vessels. These requirementsinclude, but are not limited to, the United States (U.S.) Oil Pollution Act of 1990 (OPA), the Comprehensive Environmental Response, Compensation, and Liability Act (generally referredto as CERCLA), the U.S. Clean Water Act (CWA), the U.S. Clean Air Act (CAA), the U.S. Outer Continental Shelf Lands Act, European Union (EU) Regulations, the InternationalMaritime Organization, or IMO, International Convention on Civil Liability for Oil Pollution Damage of 1969 (as from time to time amended and generally referred to as CLC), the IMOInternational Convention for the Prevention of Pollution from Ships of 1973 (as from time to time amended and generally referred to as MARPOL, including the designation of emissioncontrol areas (ECAs) thereunder), the IMO International Convention for the Safety of Life at Sea of 1974 (as from time to time amended and generally referred to as SOLAS), the IMOInternational Convention on Load Lines of 1966 (as from time to time amended), the International Convention on Civil Liability for Bunker Oil Pollution Damage (generally referred to asthe Bunker Convention), the IMO’s International Management Code for the Safe Operation of Ships and for Pollution Prevention (generally referred to as the ISM Code), theInternational Convention for the Control and Management of Ships’ Ballast Water and Sediments Discharge (generally referred to as the BWM Convention), International Ship and PortFacility Security Code (ISPS), and the U.S. Maritime Transportation Security Act of 2002 (generally referred to as the MTSA). Compliance with such laws, regulations and standards,where applicable, may require installation of costly equipment or operational changes and may affect the resale value or useful lives of our vessels. We may also incur additional costs inorder to comply with other existing and future regulatory obligations, including, but not limited to, costs relating to air emissions, including greenhouse gases, the management of ballastwaters, maintenance and inspection, development and implementation of emergency procedures and insurance coverage or other financial assurance of our ability to address pollutionincidents. These costs could have a material adverse effect on our business, results of operations, cash flows and financial condition and our ability to pay dividends. A failure tocomply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations. Environmental lawsoften impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard to whether we were negligent or atfault. Under OPA, for example, owners, operators and bareboat charterers are jointly and severally strictly liable for the discharge of oil within the 200-nautical mile exclusive economiczone around the U.S. (unless the spill results solely from the act or omission of a third party, an act of God or an act of war). An oil spill could result in significant liability, including fines,penalties, criminal liability and remediation costs for natural resource damages under other international and U.S. federal, state and local laws, as well as third-party damages, includingpunitive damages, and could harm our reputation with current or potential charterers of our tankers. We are required to satisfy insurance and financial responsibility requirements forpotential oil (including marine fuel) spills and other pollution incidents. Although we have arranged insurance to cover certain environmental risks, and risk of environmental damagesand impacts there can be no assurance that such insurance will be sufficient to cover all such risks or that any claims will not have a material adverse effect on our business, results ofoperations, cash flows and financial condition, and our ability to pay dividends.10Furthermore, the explosion of the Deepwater Horizon and the subsequent release of oil into the Gulf of Mexico, or other similar incidents in the future, may result in furtherregulation of the tanker industry, and modifications to statutory liability schemes, which could have a material adverse effect on our business, financial condition, results of operationsand cash flows. For example, the U.S. Bureau of Safety and Environmental Enforcement’s (“BSEE”) revised Production Safety Systems Rule (“PSSR”), effective December 27, 2018,modified and relaxed certain environmental and safety protections under the 2016 PSSR. Additionally, the BSEE released proposed changes to the Well Control Rule, which could rollback certain reforms regarding the safety of drilling operations, and the U.S. President proposed leasing new sections of U.S. waters to oil and gas companies for offshore drilling,expanding the U.S. waters that are available for such activity over the next five years. The effects of these proposals are currently unknown. Compliance with any new requirements ofOPA and future legislation or regulations applicable to the operation of our vessels could impact the cost of our operations and adversely affect our business. Additional legislation,regulations, or other requirements applicable to the operation of our vessels that may be implemented in the future could adversely affect our business.It should be noted that the U.S. is currently experiencing changes in its environmental policy, the results of which have yet to be fully determined. For example, in April 2017,the U.S. President signed an executive order regarding environmental regulations, specifically targeting the U.S. offshore energy strategy, which may affect parts of the maritime industryand our operations. Furthermore, recent action by the IMO’s Maritime Safety Committee and United States agencies indicate that cybersecurity regulations for the maritime industry arelikely to be further developed in the near future in an attempt to combat cybersecurity threats. For example, cyber-risk management systems must be incorporated by ship-owners andmanagers by 2021. This might cause companies to cultivate additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures.However, the impact of such regulations is hard to predict at this time.Regulations relating to ballast water discharge may adversely affect our revenues and profitability.The IMO has imposed updated guidelines for ballast water management systems specifying the maximum amount of viable organisms allowed to be discharged from a vessel’sballast water. Depending on the date of the IOPP renewal survey, existing vessels constructed before September 8, 2017 must comply with the updated D-2 standard on or afterSeptember 8, 2019. For most vessels, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Shipsconstructed on or after September 8, 2017 are to comply with the D-2 standards on or after September 8, 2017. We currently have 17 vessels that do not comply with the updatedguideline and costs of compliance may be substantial and adversely affect our revenues and profitability.Furthermore, United States regulations are currently changing. Although the 2013 Vessel General Permit (“VGP”) program and U.S. National Invasive Species Act (“NISA”) arecurrently in effect to regulate ballast discharge, exchange and installation, the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on December 4, 2018, requires thatthe EPA develop national standards of performance for approximately 30 discharges, similar to those found in the VGP within two years. By approximately 2022, the U.S. Coast Guardmust develop corresponding implementation, compliance and enforcement regulations regarding ballast water. The new regulations could require the installation of new equipment,which may cause us to incur substantial costs. Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our Environmental, Social and Governance (“ESG”) policies mayimpose additional costs on us or expose us to additional risks.Companies across all industries are facing increasing scrutiny relating to their ESG policies. Investor advocacy groups, certain institutional investors, investment funds, lendersand other market participants are increasingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of their investments.The increased focus and activism related to ESG and similar matters may hinder access to capital, as investors and lenders may decide to reallocate capital or to not commit capital as aresult of their assessment of a company’s ESG practices. Companies which do not adapt to or comply with investor, lender or other industry shareholder expectations and standards,which are evolving, or which are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, maysuffer from reputational damage and the business, financial condition, and/or stock price of such a company could be materially and adversely affected.11We may face increasing pressures from investors, lenders and other market participants, who are increasingly focused on climate change, to prioritize sustainable energypractices, reduce our carbon footprint and promote sustainability. As a result, we may be required to implement more stringent ESG procedures or standards so that our existing andfuture investors and lenders remain invested in us and make further investments in us. If we do not meet these standards, our business and/or our ability to access capital could beharmed.Additionally, certain investors and lenders may exclude shipping companies, such as us, from their investing portfolios altogether due to environmental, social and governancefactors. These limitations in both the debt and equity capital markets may affect our ability to grow as our plans for growth may include accessing the equity and debt capital markets. Ifthose markets are unavailable, or if we are unable to access alternative means of financing on acceptable terms, or at all, we may be unable to implement our business strategy, whichwould have a material adverse effect on our financial condition and results of operations and impair our ability to service our indebtedness. Further, it is likely that we will incur additionalcosts and require additional resources to monitor, report and comply with wide ranging ESG requirements. The occurrence of any of the foregoing could have a material adverse effecton our business and financial condition.Climate change and greenhouse gas restrictions may adversely impact our operations and markets.Due to concern over the risk of climate change, a number of countries and the IMO have adopted regulatory frameworks to reduce greenhouse gas emissions. These regulatorymeasures may include, among others, adoption of cap and trade regimes, carbon taxes, increased efficiency standards, and incentives or mandates for renewable energy. In addition,although the emissions of greenhouse gases from international shipping currently are not subject to the Kyoto Protocol to the United Nations Framework Convention on ClimateChange, which required adopting countries to implement national programs to reduce emissions of certain gases, or the Paris Agreement (discussed further below), a new treaty may beadopted in the future that includes restrictions on shipping emissions.Adverse effects upon the oil and gas industry relating to climate change, including growing public concern about the environmental impact of climate change, may alsoadversely affect demand for our services. For example, increased regulation of greenhouse gases or other concerns relating to climate change may reduce the demand for oil and gas inthe future or create greater incentives for use of alternative energy sources. Any long-term material adverse effect on the oil and gas industry could have a significant financial andoperational adverse impact on our business that we cannot predict with certainty at this time.The IMO 2020 regulations may cause us to incur substantial costs and to procure low-sulfur fuel oil directly on the wholesale market for storage at sea and onward consumption onour vessels.Effective January 1, 2020, the IMO implemented a new regulation for a 0.50% global sulfur cap on emissions from vessels. Under this new global cap, vessels must use marinefuels with a sulfur content of no more than 0.50% against the former regulations specifying a maximum of 3.50% sulfur in an effort to reduce the emission of sulfur oxide into theatmosphere.We may incur costs to comply with these revised standards. Additional or new conventions, laws and regulations may be adopted that could require, among others, theinstallation of expensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition.All of our vessels have transitioned to burning IMO compliant fuels. We expect that our fuel costs will increase in 2020 and subsequently the value of our fuel inventories willincrease as a result of these sulfur emission regulations. Low sulfur fuel of 0.50% sulfur content or lower, is presently more expensive than the non-compliant Heavy Fuel Oil containing3.5% sulfur. Since IMO regulations came into force January 1, 2020, the availability of low sulfur fuel has been sufficient. Compliant fuel may become difficult to obtain and moreexpensive as a result of increased demand or short supply. 12Fuel is a significant, if not the largest, expense in our shipping operations when vessels are under voyage charter and is an important factor in negotiating charter rates. Ouroperations and the performance of our vessels, and as a result our results of operations, cash flows and financial position, may be negatively affected to the extent that compliant sulfurfuel oils are unavailable, of low or inconsistent quality, if de-bunkering facilities are unavailable to permit our vessels to accept compliant fuels when required, or upon occurrence of anyof the other foregoing events. Costs of compliance with these and other related regulatory changes may be significant and may have a material adverse effect on our future performance,results of operations, cash flows and financial position. As a result, an increase in the price of fuel beyond our expectations may adversely affect our profitability at the time of charternegotiation. Further, fuel may become much more expensive in the future, which may reduce the profitability and competitiveness of our business versus other forms of transportation,such as truck or rail.While we carry cargo insurance to protect us against certain risks of loss of or damage to the procured commodities, we may not be adequately insured to cover any losses fromsuch operational risks, which could have a material adverse effect on us. Any significant uninsured or under-insured loss or liability could have a material adverse effect on ourbusiness, results of operations, cash flows and financial condition and our available cash.If we fail to comply with international safety regulations, we may be subject to increased liability, which may adversely affect our insurance coverage and may result in a denial ofaccess to, or detention in, certain ports.The SOLAS Convention was amended to address the safe manning of vessels and emergency training drills. The Convention of Limitation of Liability for Maritime Claims (the“LLMC”) sets limitations of liability for a loss of life or personal injury claim or a property claim against ship owners. We believe that all of our vessels are in substantial compliance withSOLAS and LLMC Convention standards.Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (the “ISM Code”), ouroperations are also subject to environmental standards and requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safetymanagement system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vesselssafely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical management team have developed forcompliance with the ISM Code. The failure of a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease availableinsurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel’smanagement with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document ofcompliance, issued by each flag state, under the ISM Code. We have obtained applicable documents of compliance for our offices and safety management certificates for all of ourvessels for which the certificates are required by the IMO. The document of compliance and safety management certificate are renewed as required.Regulation II-1/3-10 of the SOLAS Convention governs ship construction and stipulates that ships over 150 meters in length must have adequate strength, integrity andstability to minimize risk of loss or pollution. Goal-based standards amendments in SOLAS regulation II-1/3-10 entered into force in 2012, with July 1, 2016 set for application to new oiltankers and bulk carriers. The SOLAS Convention regulation II-1/3-10 on goal-based ship construction standards for bulk carriers and oil tankers, which entered into force on January 1,2012, requires that all oil tankers and bulk carriers of 150 meters in length and above, for which the building contract is placed on or after July 1, 2016, satisfy applicable structuralrequirements conforming to the functional requirements of the International Goal-based Ship Construction Standards for Bulk Carriers and Oil Tankers (GBS Standards).Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels be in compliance with the International MaritimeDangerous Goods Code (“IMDG Code”). Effective January 1, 2018, the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions fromthe International Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods, and (3) new mandatory training requirements.13The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”). As of February 2017, all seafarersare required to meet the STCW standards and be in possession of a valid STCW certificate. Flag states that have ratified SOLAS and STCW generally employ the classificationsocieties, which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.Developments in safety and environmental requirements relating to the recycling of vessels may result in escalated and unexpected costs.The 2009 Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, or the Hong Kong Convention, aims to ensure ships, beingrecycled once they reach the end of their operational lives, do not pose any unnecessary risks to the environment, human health and safety. The Hong Kong Convention has yet to beratified by the required number of countries to enter into force. Upon the Hong Kong Convention’s entry into force, each ship sent for recycling will have to carry an inventory of itshazardous materials. The hazardous materials, whose use or installation are prohibited in certain circumstances, are listed in an appendix to the Hong Kong Convention. Ships will berequired to have surveys to verify their inventory of hazardous materials initially, throughout their lives and prior to the ship being recycled. The Hong Kong Convention, which iscurrently open for accession by IMO Member States, will enter into force 24 months after the date on which 15 IMO Member States, representing at least 40% of world merchantshipping by gross tonnage, have ratified or approved accession. As of the date of this annual report, 15 countries representing just over 30% of world merchant shipping tonnage haveratified or approved accession of the Hong Kong Convention.The Hong Kong Convention, which is currently open for accession by IMO Member States, will enter into force 24 months after the date on which 15 IMO Member States,representing at least 40% of world merchant shipping by gross tonnage, have ratified or approve accession. As of the date of this annual report, 15 countries representing just over 30%of world merchant shipping tonnage have ratified or approved accession of the Hong Kong Convention.On November 20, 2013, the European Parliament and the Council of the EU adopted the Ship Recycling Regulation, which retains the requirements of the Hong KongConvention and requires that certain commercial seagoing vessels flying the flag of an EU Member State may be recycled only in facilities included on the European list of permitted shiprecycling facilities. We are required to comply with EU Ship Recycling Regulation by December 31, 2020, since our ships trade in EU region.These regulatory developments, when implemented, may lead to cost escalation by shipyards, repair yards and recycling yards. This may then result in a decrease in theresidual scrap value of a vessel, and a vessel could potentially not cover the cost to comply with latest requirements, which may have an adverse effect on our future performance,results of operations, cash flows and financial position.The value of our vessels may fluctuate and any decrease in the value of our vessels could result in a lower price of our common shares.Tanker values have generally experienced high volatility. The market value of our oil tankers can fluctuate, depending on general economic and market conditions affecting thetanker industry. The volatility in global financial markets may result in a decrease in tanker values. In addition, as vessels grow older, they generally decline in value. These factors willaffect the value of our vessels. Declining tanker values could affect our ability to raise cash by limiting our ability to refinance our vessels, thereby adversely impacting our liquidity, orresult in a breach of our loan covenants, which could result in defaults under our Credit Facility. Due to the cyclical nature of the tanker market, if for any reason we sell vessels at a timewhen tanker prices have fallen, the sale may be at less than the vessel’s carrying amount on our financial statements, with the result that we would also incur a loss and a reduction inearnings. Any such reduction could result in a lower price of our common shares.14Technological innovation and quality and efficiency requirements from our customers could reduce our charter hire income and the value of our vessels.Our customers, in particular those in the oil industry, have a high and increasing focus on quality and compliance standards with their suppliers across the entire supply chain,including the shipping and transportation segment. Our continued compliance with these standards and quality requirements is vital for our operations. The charter hire rates and thevalue and operational life of a vessel are determined by a number of factors including the vessel’s efficiency, operational flexibility and physical life. Efficiency includes speed, fueleconomy and the ability to load and discharge cargo quickly. Flexibility includes the ability to enter harbors, operate in extreme climates, utilize related docking facilities and pass throughcanals and straits. The length of a vessel’s physical life is related to its original design and construction, its maintenance and the impact of the stress of operations. If new tankers arebuilt that are more efficient or more flexible or have longer physical lives than our vessels, competition from these more technologically advanced vessels could adversely affect theamount of charter hire payments we receive for our vessels once their initial charters expire and the resale value of our vessels could significantly decrease. This could have an adverseeffect on our results of operations, cash flows, financial condition and ability to pay dividends.We operate our vessels worldwide and as a result, our vessels are exposed to international risks which may reduce revenue or increase expenses.The international shipping industry is an inherently risky business involving global operations. Our vessels are at a risk of damage or loss because of events such asmechanical failure, collision, human error, war, terrorism, piracy, cargo loss and bad weather. In addition, changing economic, regulatory and political conditions in some countries,including political and military conflicts, have from time to time resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. These sorts of eventscould interfere with shipping routes and result in market disruptions which may reduce our revenue or increase our expenses.International shipping is subject to various security and customs inspections and related procedures in countries of origin and destination and trans-shipment points. Inspection procedures can result in the seizure of the cargo and/or our vessels, delays in loading, offloading or delivery, and the levying of customs duties, fines or other penaltiesagainst us. It is possible that changes to inspection procedures could impose additional financial and legal obligations on us. Furthermore, changes to inspection procedures could alsoimpose additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of cargo uneconomical or impractical. Any such changes ordevelopments may have a material adverse effect on our business, results of operations, cash flows, financial condition and available cash.The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.We expect that our vessels will call in ports where smugglers attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. To theextent our vessels are found with contraband, whether inside or attached to the hull of our vessel and whether with or without the knowledge of any of our crew, we may facegovernmental or other regulatory claims which could have an adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.From time to time, our vessels call on ports located in countries or territories that are subject to restrictions, sanctions or embargoes imposed by the U.S. government, the EuropeanUnion, the United Nations or other governments, it could lead to monetary fines or penalties and adversely affect our reputation and the market for our common stock and its tradingprice.From time to time, vessels in our fleet call on ports located in countries subject to restrictions, sanctions and embargoes imposed by the U.S. government and countriesidentified by the U.S. government as state sponsors of terrorism, such as Sudan. We have not been involved in business to and from Cuba, Syria, Iran, Crimea, or North Korea during theperiod January 1, 2019 through December 31, 2019. In January 2019, one of our vessels, on charterers’ instructions, called on a port in Venezuela and transported oil cargo to India prior toOFAC’s designation of PdVSA as a Specially Designated National. We do not believe that this violated any applicable sanctions. Our vessels may, on charterers’ instructions, call onports in Sudan. We emphasize that neither the vessels nor the Company employs U.S. citizens and does not carry U.S.-origin cargoes in connection with the business in the port ofBashayer in Sudan. Seven vessels owned by the Company made eleven calls to Sudan for the year ending December 31, 2019. All of these calls involved loading of oil cargoes in theSudanese port of Bashayer to be carried to international locations outside of the United States pursuant to voyage charters with non-U.S. charterers.15The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and suchsanctions and embargo laws and regulations may be amended or strengthened over time.Certain of our charterers or other parties that we have entered into contracts with regarding our vessels may be affiliated with persons or entities that are the subject ofsanctions imposed by the U.S., and EU and/or other international bodies as a result of the Crimea and Russia conflict in 2014. If we determine that such sanctions require us to terminateexisting contracts or if we are found to be in violation of such applicable sanctions, our results of operations may be adversely affected or we may suffer reputational harm.Current or future counterparties of ours may be affiliated with persons or entities that are or may be in the future the subject of sanctions imposed by the U.S., the EU, and/orother international bodies. If we determine that such sanctions require us to terminate existing or future contracts to which we or our subsidiaries are party, or if we are found to be inviolation of such applicable sanctions, our operations may be adversely affected, we may suffer reputational harm, and/or the price at which our common stock trades might be adverselyaffected.Although we believe that we have been in compliance with all sanctions and embargo laws and regulations that apply to us, and intend to maintain such compliance, there canbe no assurance that we will be in compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violationcould result in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our business, and could result in some investorsdeciding, or being required, to divest their interest, or not to invest, in us. Additionally, some investors may decide not to invest in our company simply because we do business withcompanies that do business in sanctioned countries. The determination by these investors not to invest in, or to divest from, our common stock may adversely affect the price at whichour common stock trades. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, andthose violations could in turn negatively affect our reputation. In addition, our reputation and the market for our securities may be adversely affected if we engage in certain otheractivities, such as entering into charters with individuals or entities in countries subject to U.S. sanctions and embargo laws that are not controlled by the governments of thosecountries, or engaging in operations associated with those countries pursuant to contracts with third parties that are unrelated to those countries or entities controlled by theirgovernments. Investor perception of the value of our common stock may be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmentalactions in these and surrounding countries.Company Specific Risk FactorsWe operate in a cyclical and volatile industry and cannot guarantee that we will continue to make cash distributions.We have made cash distributions quarterly since October 1997. It is possible that our revenues could be reduced as a result of decreases in charter rates or that we could incurother expenses or contingent liabilities that would reduce or eliminate the cash available for distribution as dividends. Our Credit Facility prohibits the declaration and payment ofdividends if we are in default under the Credit Facility. For more information, please see “Item 5. Operating and Financial Review and Prospectus—B. Liquidity and Capital Resources—Our Borrowing Activities.” We may not continue to pay dividends at rates previously paid or at all. If we do not pay dividends, the market price for our common shares must appreciatefor investors to realize a gain on their investment. This appreciation may not occur and our common shares may in fact depreciate in value, in part because of any future decreases in orelimination of our dividend payments.A decision of our Board of Directors and the laws of Bermuda may prevent the declaration and payment of dividends.Our ability to declare and pay dividends is subject at all times to the discretion of our board of directors, or the Board, and compliance with Bermuda law, and may be dependent,among other things, upon our having sufficient available distributable reserves. For more information, please see “Item 8. Financial Information—Dividend Policy.” We may not continueto pay dividends at rates previously paid or at all.16We have antitakeover protections which could prevent a change in our control.We have antitakeover protections which could prevent a change in our control. For example, on June 16, 2017, our Board, after the expiration of a previous shareholder rightsagreement, adopted a new shareholders rights agreement and declared a dividend of one preferred share purchase right to purchase one one-thousandth of a Series A ParticipatingPreferred Share of the Company for each outstanding common share, par value $0.01 per share. The dividend was payable on June 26, 2017 to shareholders of record on that date. Eachright entitles the registered holder to purchase from us one one-thousandth of a Series A Participating Preferred Share of the Company at an exercise price of $30.00, subject toadjustment. We can redeem the rights at any time prior to a public announcement that a person or group has acquired ownership of 15% or more of the Company’s common shares. Thisshareholders rights plan was designed to enable us to protect shareholder interests in the event that an unsolicited attempt is made for a business combination with, or a takeover of, theCompany. Our shareholders rights plan is not intended to deter offers that our Board determines are in the best interests of our shareholders.If we do not identify suitable tankers for acquisition or successfully integrate any acquired tankers, we may not be able to grow or to effectively manage our growth.One of our principal strategies is to continue to grow by expanding our operations and adding to our fleet. Our future growth will depend upon a number of factors, some ofwhich may not be within our control. These factors include our ability to:•identify suitable tankers and/or shipping companies for acquisitions at attractive prices, which may not be possible if asset prices rise too quickly,•manage relationships with customers and suppliers,•identify businesses engaged in managing, operating or owning tankers for acquisitions or joint ventures,•integrate any acquired tankers or businesses successfully with our then-existing operations,•hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet,•identify additional new markets,•improve our operating, financial and accounting systems and controls, and•obtain required financing for our existing and new operations.Our failure to effectively identify, purchase, develop and integrate any tankers or businesses could adversely affect our business, financial condition and results of operations.We may incur unanticipated expenses as an operating company. It is possible that the number of employees employed by the company, or current operating and financial systems maynot be adequate as we implement our plan to expand the size of our fleet. Finally, acquisitions may require additional equity issuances or debt issuances (with amortization payments),both of which could lower dividends per share. If we are unable to expand or execute the certain aspects of our business or events noted above, our financial condition and dividendrates may be adversely affected.If we purchase and operate secondhand vessels, we will be exposed to increased operating costs which could adversely affect our earnings and, as our fleet ages, the risks associatedwith older vessels could adversely affect our ability to obtain profitable charters.Our current business strategy includes additional growth through the acquisition of new and secondhand vessels. We took delivery of two secondhand vessels in 2014, twosecondhand vessels in 2015, and four secondhand vessels in 2016. We may not receive the benefit of warranties from the builders for the secondhand vessels that we acquire direct fromyard.17Even following a physical inspection of secondhand vessels prior to purchase, we do not have the same knowledge about their condition and cost of any required (oranticipated) repairs that we would have had if these vessels had been built for and operated exclusively by us. Accordingly, we may not discover defects or other problems with suchvessels prior to purchase. Any such hidden defects or problems, when detected may be expensive to repair, and if not detected, may result in accidents or other incidents for which wemay become liable to third parties. Also, when purchasing previously owned vessels, we do not receive the benefit of any builder warranties if the vessels we buy are older than oneyear.In general, the costs to maintain a vessel in good operating condition increase with the age of the vessel. Older vessels are typically less fuel efficient than more recentlyconstructed vessels due to improvements in engine technology. Governmental regulations, safety and other equipment standards related to the age of vessels may require expendituresfor alterations or the addition of new equipment to some of our vessels and may restrict the type of activities in which these vessels may engage. We cannot assure you that, as ourvessels age, market conditions will justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives. As a result, regulations andstandards could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends.If we do not set aside funds and are unable to borrow or raise funds for vessel replacement, at the end of a vessels’ useful life our revenue will decline, which would adversely affect ourbusiness, results of operations, financial condition and ability to pay dividends.If we do not set aside funds and are unable to borrow or raise funds for vessel replacement, we will be unable to replace the vessels in our fleet upon the expiration of theirremaining useful lives, which we expect to range from 1 year to 25 years, depending on the type of vessel. Our cash flows and income are dependent on the revenues earned by thechartering of our vessels. If we are unable to replace the vessels in our fleet upon the expiration of their useful lives, our business, results of operations, financial condition and ability topay dividends would be adversely affected. Any funds set aside for vessel replacement will not be available for dividends.An increase in operating costs would decrease earnings and dividends per share.Under the charters of all of our operating vessels, we are responsible for vessel operating expenses. Our vessel operating expenses include the costs of crew, lube oil,provisions, deck and engine stores, insurance and maintenance and repairs, which depend on a variety of factors, many of which are beyond our control. If our vessels suffer damage,they may need to be repaired at a drydocking facility. The costs of drydock repairs are unpredictable and can be substantial. Increases in any of these expenses would decrease earningsand dividends per share.If we are unable to operate our vessels profitably, we may be unsuccessful in competing in the highly competitive international tanker market, which would negatively affect ourfinancial condition and our ability to expand our business.The operation of tanker vessels and transportation of crude and petroleum products is extremely competitive. Competition arises primarily from other tanker owners, includingmajor oil companies as well as independent tanker companies, some of whom have substantially greater resources than we do. Competition for the transportation of oil and oil productscan be intense and depends on price, location, size, age, condition and the acceptability of the tanker and its operators to the charterers. We will have to compete with other tankerowners, including major oil companies as well as independent tanker companies.Our market share may decrease in the future. We may not be able to compete profitably as we expand our business into new geographic regions or provide new services. Newmarkets may require different skills, knowledge or strategies than we use in our current markets, and the competitors in those new markets may have greater financial strength and capitalresources than we do.18Ineffective internal controls could impact the Company’s business and financial results.The Company’s internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, thecircumvention or overriding of controls, or fraud. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financialstatements. If the Company fails to maintain the adequacy of its internal controls, including any failure to implement required new or improved controls, or if the Company experiencesdifficulties in their implementation, the Company’s business and financial results could be harmed and the Company could fail to meet its financial reporting obligations.Risks Related to our IndebtednessServicing our debt limits funds available for other purposes and if we cannot service our debt, we may lose our vessels.Borrowing under the Credit Facility requires us to dedicate a part of our cash flow from operations to paying interest on our indebtedness. These payments limit funds availablefor working capital, capital expenditures and other purposes, including making distributions to shareholders and further equity or debt financing in the future. Amounts borrowed underthe Credit Facility bear interest at variable rates. Increases in prevailing rates could increase the amounts that we would have to pay to our lenders, even though the outstandingprincipal amount remains the same, and our net income and cash flows would decrease. We expect our earnings and cash flow to vary from year to year due to the cyclical nature of thetanker industry. In addition, our current policy is not to accumulate cash, but rather to distribute our available cash to shareholders. If we do not generate or reserve enough cash flowfrom operations to satisfy our debt obligations, we may have to undertake alternative financing plans, such as:•seeking to raise additional capital;•refinancing or restructuring our debt;•selling tankers or other assets; or•reducing or delaying capital investments.However, these alternative financing plans, if necessary, may not be sufficient to allow us to meet our debt obligations. If we are unable to meet our debt obligations or if someother default occurs under the Credit Facility, the lenders could elect to declare that debt, together with accrued interest and fees, to be immediately due and payable and proceed againstthe collateral securing that debt, which constitutes our entire fleet.Our 2019 Senior Secured Credit Facility and our financing arrangement with Ocean Yield ASA, or Ocean Yield, contains restrictive covenants which limit our liquidity andcorporate activities, which could negatively affect our growth, cause our financial performance to suffer and limit our ability to pay dividends.Our outstanding debt requires us or our subsidiaries to maintain the following financial covenants: value-adjusted equity, positive working capital, and a certain level of freecash.Because some of these ratios are dependent on the market value of vessels, should charter rates or vessel values materially decline in the future, we may be required to takeaction to reduce our debt or to act in a manner contrary to our business objectives to meet any such financial ratios and satisfy any such financial covenants. Events beyond ourcontrol, including changes in the economic and business conditions in the shipping markets in which we operate, interest rate developments, changes in the funding costs of our banks,changes in vessel earnings and asset valuations and outbreaks of epidemic and pandemic of diseases, such as the recent outbreak of COVID-9, may affect our ability to comply withthese covenants. We cannot assure you that we will meet these ratios or satisfy our financial or other covenants or that our lenders will waive any failure to do so.19These financial and other covenants may adversely affect our ability to finance future operations or limit our ability to pursue certain business opportunities or take certaincorporate actions. The covenants may also restrict our flexibility in planning for changes in our business and the industry and make us more vulnerable to economic downturns andadverse developments. A breach of any of the covenants in, or our inability to maintain the required financial ratios under the credit facilities would prevent us from borrowing additionalmoney under our credit facilities, paying dividends to our shareholders and could result in a default under our credit facilities. If a default occurs under our credit facilities, the lenderscould elect to declare the issued and outstanding debt, together with accrued interest and other fees, to be immediately due and payable and foreclose on the collateral securing thatdebt, which could constitute all or substantially all of our assets.Volatility of LIBOR and potential changes of the use of LIBOR as a benchmark could affect our profitability, earnings and cash flow.London Interbank Offered Rate (“LIBOR”) is the subject of recent national, international and other regulatory guidance and proposals for reform. These reforms and otherpressures may cause LIBOR to be eliminated or to perform differently than in the past. The consequences of these developments cannot be entirely predicted, but could include anincrease in the cost of our variable rate indebtedness and obligations. LIBOR has been volatile in the past, with the spread between LIBOR and the prime lending rate wideningsignificantly at times. Because the interest rates borne by a majority of our outstanding indebtedness fluctuates with changes in LIBOR, significant changes in LIBOR would have amaterial effect on the amount of interest payable on our debt, which in turn, could have an adverse effect on our financial condition.Furthermore, the calculation of interest in most financing agreements in our industry has been based on published LIBOR rates. Due in part to uncertainty relating to the LIBORcalculation process in recent years, it is likely that LIBOR will be phased out in the future. As a result, lenders have insisted on provisions that entitle the lenders, in their discretion, toreplace published LIBOR as the base for the interest calculation with their cost-of-funds rate. If we are required to agree to such a provision in future financing agreements, our lendingcosts could increase significantly, which would have an adverse effect on our profitability, earnings and cash flow. In addition, the banks currently reporting information used to setLIBOR will likely stop such reporting after 2021, when their commitment to reporting information ends. The Alternative Reference Rate Committee, a committee convened by the FederalReserve that includes major market participants, has proposed an alternative rate to replace U.S. Dollar LIBOR: the Secured Overnight Financing Rate, or “SOFR.” The impact of such atransition from LIBOR to SOFR would be significant for us.We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet their obligations could cause us to suffer losses ornegatively impact our results of operations and cash flows.We have entered into various contracts, including charter agreements with our customers, and our Credit Facility and from time to time, we may enter into newbuildingcontracts. Such agreements subject us to counterparty risks. The ability of each of our counterparties to perform its obligations under a contract with us will depend on a number offactors that are beyond our control and may include, among other things, general economic conditions, the condition of the maritime and offshore industries, the overall financialcondition of the counterparty, charter rates received for specific types of vessels, work stoppages and other labor disturbances, including as a result of the recent outbreak of COVID-19and various expenses. For example, the combination of a reduction of cash flow resulting from declines in world trade, a reduction in borrowing bases under reserve-based credit facilitiesand the lack of availability of debt or equity financing may result in a significant reduction in the ability of our charterers to make charter payments to us. In addition, in depressed marketconditions, our charterers and customers may no longer need a vessel that is currently under charter or contract or may be able to obtain a comparable vessel at lower rates. As a result,charterers and customers may seek to renegotiate the terms of their existing charter parties or avoid their obligations under those contracts. Should a counterparty fail to honor itsobligations under agreements with us, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cashflows. As a result, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows, as well as ourability to pay dividends, if any, in the future, and comply with covenants in our Credit Facility.20Our insurance may not be adequate to cover our losses that may result from our operations due to the inherent operational risks of the tanker industry.We carry insurance to protect us against most of the accident related risks involved in the conduct of our business, including marine hull and machinery insurance, protectionand indemnity insurance, which includes pollution risks, crew insurance and war risk insurance. However, we may not be adequately insured to cover losses from our operational risks,which could have a material adverse effect on us. Additionally, our insurers may refuse to pay particular claims and our insurance may be voidable by the insurers if we take, or fail totake, certain action, such as failing to maintain certification of our vessels with applicable maritime regulatory organizations. Any significant uninsured or under-insured loss or liabilitycould have a material adverse effect on our business, results of operations, cash flows and financial condition and our ability to pay dividends. In addition, we may not be able to obtainadequate insurance coverage at reasonable rates in the future during adverse insurance market. Any loss of a vessel or extended vessel off-hire, due to an accident or otherwise, couldhave a material adverse effect on our business, results of operations and financial condition and our ability to pay dividends.The operation of tankers involves certain unique operational risks.The operation of tankers has unique operational risks associated with the transportation of oil. An oil spill may cause significant environmental damage, and a catastrophic spillcould exceed the insurance coverage available. Compared to other types of vessels, tankers are exposed to a higher risk of damage and loss by fire, whether ignited by a terrorist attack,collision, or other cause, due to the high flammability and high volume of the oil transported in tankers.Further, our vessels and their cargoes will be at risk of being damaged or lost because of events such as marine disasters, bad weather and other acts of God, businessinterruptions caused by mechanical failures, grounding, fire, explosions and collisions, human error, war, terrorism, piracy, diseases (such as the recent outbreak of COVID-19), quarantineand other circumstances or events. Changing economic, regulatory and political conditions in some countries, including political and military conflicts, have from time to time resulted inattacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. These hazards may result in death or injury to persons, loss of revenues or property, the paymentof ransoms, environmental damage, higher insurance rates, damage to our customer relationships and market disruptions, delay or rerouting.If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs are unpredictable and may be substantial. We may have to paydrydocking costs that our insurance does not cover at all or in full. The loss of revenues while these vessels are being repaired and repositioned, as well as the actual cost of theserepairs, may adversely affect our business and financial condition. In addition, space at drydocking facilities is sometimes limited and not all drydocking facilities are convenientlylocated. We may be unable to find space at a suitable drydocking facility or our vessels may be forced to travel to a drydocking facility that is not conveniently located relative to ourvessels’ positions. The loss of earnings while these vessels are forced to wait for space or to travel to more distant drydocking facilities may adversely affect our business and financialcondition. Further, the total loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator. If we are unable to adequately maintain or safeguardour vessels, we may be unable to prevent any such damage, costs or loss which could negatively impact our business, financial condition, results of operations, cash flows and ability topay dividends.Because some of our expenses are incurred in foreign currencies, we are exposed to exchange rate fluctuations, which could negatively affect our results of operations.The charterers of our vessels pay us in U.S. dollars. While we mostly incur our expenses in U.S. dollars, we may incur expenses in other currencies, most notably the NorwegianKroner. Declines in the value of the U.S. dollar relative to the Norwegian Kroner, or the other currencies in which we may incur expenses in the future, would increase the U.S. dollar costof paying these expenses and thus would affect our results of operations.21We may have to pay tax on United States source income, which would reduce our earnings.Under the United States Internal Revenue Code of 1986, as amended, or the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, such asourselves, attributable to transportation that begins or ends, but that does not both begin and end, in the United States will be characterized as U.S. source shipping income and suchincome is subject to a 4% United States federal income tax, without the benefit of deductions, unless that corporation is entitled to a special tax exemption under the Code which appliesto income derived by certain non-United States corporations from the international operations of ships. We believe that we currently qualify for this statutory tax exemption and we havetaken, and will continue to take, this position on the Company’s United States federal income tax returns. However, there are several risks that could cause us to become subject to tax onour United States source shipping income. Due to the factual nature of the issues involved, we can give no assurances as to our tax-exempt status for our future taxable years.If we are not entitled to this statutory tax exemption for any taxable year, we would be subject for any such year to a 4% U.S. federal income tax on our U.S. source shippingincome, without the benefit of deductions. The imposition of this tax could have a negative effect on our business and would result in decreased earnings available for distribution to ourshareholders.If the United States Internal Revenue Service were to treat us as a “passive foreign investment company,” that could have adverse tax consequences for United States shareholders.A foreign corporation is treated as a “passive foreign investment company,” or PFIC, for United States federal income tax purposes, if either (1) at least 75% of its gross incomefor any taxable year consists of certain types of “passive income” or (2) at least 50% of the average value of the corporation’s assets produce or are held for the production of thosetypes of passive income. For purposes of these tests, cash is treated as an asset that produces passive income, and passive income includes dividends, interest, and gains from the saleor exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade orbusiness. Income derived from the performance of services does not constitute passive income. United States shareholders of a PFIC may be subject to a disadvantageous United Statesfederal income tax regime with respect to the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.We believe that we ceased to be a PFIC beginning with the 2005 taxable year. Based on our current and expected future operations, we believe that we are not currently a PFIC,nor do we anticipate that we will become a PFIC for any future taxable year. As a result, non-corporate United States shareholders should be eligible to treat dividends paid by us in 2006and thereafter as “qualified dividend income” which is subject to preferential tax rates.We expect to derive more than 25% of our income each year from our spot chartering or time chartering activities. We also expect that more than 50% of the value of our assetswill be devoted to our spot chartering and time chartering. Therefore, since we believe that such income will be treated for relevant United States federal income tax purposes as servicesincome, rather than rental income, we have taken, and will continue to take, the position that such income should not constitute passive income, and that the assets that we own andoperate in connection with the production of that income, in particular our vessels, should not constitute assets that produce or are held for the production of passive income forpurposes of determining whether we are a PFIC in any taxable year.There is, however, no direct legal authority under the PFIC rules addressing our method of operation. We believe there is substantial legal authority supporting our positionconsisting of case law and United States Internal Revenue Service, or IRS, pronouncements concerning the characterization of income derived from time charters and voyage charters asservices income rather than rental income for other tax purposes. However, there is also authority which characterizes time charter income as rental income rather than services income forother tax purposes. Accordingly, no assurance can be given that the IRS or a court of law will accept our position, and there is a risk that the IRS or a court of law could determine thatwe are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for any future taxable year if there were to be changes in the nature and extent of ouroperations.22If the IRS or a court of law were to find that we are or have been a PFIC for any taxable year beginning with the 2005 taxable year, our United States shareholders who ownedtheir shares during such year would face adverse United States federal income tax consequences and certain information reporting obligations. Under the PFIC rules, unless thoseUnited States shareholders made or make an election available under the Code (which election could itself have adverse consequences for such United States shareholders), such UnitedStates shareholders would be subject to United States federal income tax at the then highest income tax rates on ordinary income plus interest upon excess distributions (i.e.,distributions received in a taxable year that are greater than 125% of the average annual distributions received during the shorter of the three preceding taxable years or the United Statesshareholder’s holding period for our common shares) and upon any gain from the disposition of our common shares, as if the excess distribution or gain had been recognized ratablyover the United States shareholder’s holding period of our common shares. In addition, non-corporate United States shareholders would not be eligible to treat dividends paid by us as“qualified dividend income” if we are a PFIC in the taxable year in which such dividends are paid or in the immediately preceding taxable year.We may become subject to taxation in Bermuda which would negatively affect our results.At the present time, there is no Bermuda income or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by us or by ourshareholders in respect of our shares. We have obtained an assurance from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966 that, in theevent that any legislation is enacted in Bermuda imposing any tax computed on profits or income, or computed on any capital asset, gain or appreciation or any tax in the nature of estateduty or inheritance tax, such tax shall not, until March 31, 2035, be applicable to us or to any of our operations or to our shares, debentures or other obligations except insofar as such taxapplies to persons ordinarily resident in Bermuda or is payable by us in respect of real property owned or leased by us in Bermuda. We cannot assure you that a future Minister wouldhonor that assurance, which is not legally binding, or that after such date we would not be subject to any such tax. If we were to become subject to taxation in Bermuda, our results ofoperations could be adversely affected.As a Bermuda exempted company incorporated under Bermuda law with subsidiaries in another offshore jurisdiction, our operations may be subject to economic substancerequirements.On December 5, 2017, following an assessment of the tax policies of various countries by the Code of Conduct Group for Business Taxation of the European Union (the“COCG”), the Council of the European Union approved and published Council conclusions containing a list of non-cooperative jurisdictions for tax purposes (the “Conclusions”). Although at that time not considered “non-cooperative jurisdictions,” certain countries, including Bermuda and the Marshall Islands were listed as having “tax regimes that facilitateoffshore structures which attract profits without real economic activity.” In connection with the Conclusions, and to avoid being placed on the list of “non-cooperative jurisdictions,”the government of Bermuda, among others, committed to addressing COCG proposals relating to economic substance for entities doing business in or through their respectivejurisdictions and to pass legislation to implement any appropriate changes by the end of 2018.The Economic Substance Act 2018 and the Economic Substance Regulations 2018 of Bermuda (the “Economic Substance Act” and the “Economic Substance Regulations”,respectively) became operative on 31 December 2018. The Economic Substance Act applies to every registered entity in Bermuda that engages in a relevant activity and requires thatevery such entity shall maintain a substantial economic presence in Bermuda. A relevant activity for the purposes of the Economic Substance Act is banking business, insurancebusiness, fund management business, financing and leasing business, headquarters business, shipping business, distribution and service centre business, intellectual property holdingbusiness and conducting business as a holding entity, which means acting as a pure equity holding entity.The Economic Substance Act provides that a registered entity that carries on a relevant activity complies with economic substance requirements if (a) it is directed andmanaged in Bermuda, (b) its core income-generating activities (as may be prescribed) are undertaken in Bermuda with respect to the relevant activity, (c) it maintains adequate physicalpresence in Bermuda, (d) it has adequate full time employees in Bermuda with suitable qualifications and (e) it incurs adequate operating expenditure in Bermuda in relation to therelevant activity.23A registered entity that carries on a relevant activity is obliged under the Economic Substance Act to file a declaration in the prescribed form (the “Declaration”) with theRegistrar of Companies (the “Registrar”) on an annual basis.The Economic Substance Regulations provide that minimum economic substance requirements shall apply in relation to an entity if the entity is a pure equity holding entitywhich only holds or manages equity participations, and earns passive income from dividends, distributions, capital gains and other incidental income only. The minimum economicsubstance requirements include a) compliance with applicable corporate governance requirements set forth in the Bermuda Companies Act 1981 including keeping records of account,books and papers and financial statements and b) submission of an annual economic substance declaration form. Additionally, the Economic Substance Regulations provide that a pureequity holding entity complies with economic substance requirements where it also has adequate people for holding and managing equity participations, and adequate premises inBermuda.Certain of our subsidiaries may from time to time be organized in other jurisdictions identified by the COCG based on global standards set by the Organization for Economic Co-operation and Development with the objective of preventing low-tax jurisdictions from attracting profits from certain activities. These jurisdictions, including the Marshall Islands, havealso enacted economic substance laws and regulations which we may be obligated to comply with. If we fail to comply with our obligations under the Economic Substance Act or anysimilar law applicable to us in any other jurisdiction, we could be subject to financial penalties and spontaneous disclosure of information to foreign tax officials in related jurisdictionsand may be struck from the register of companies in Bermuda or such other jurisdiction. Any of these actions could have a material adverse effect on our business, financial conditionand results of operations.Risks Relating to Investing in Our Common SharesOur share price may continue to be highly volatile, which could lead to a loss of all or part of a shareholder’s investment.The market price of our common shares has fluctuated widely since our common shares began trading in on the NYSE. Over the last few years, the stock market has experiencedprice and volume fluctuations, especially due to factors relating to the recent outbreak of COVID-19. This volatility has sometimes been unrelated to the operating performance ofparticular companies. During 2019, the price of our common shares experienced a high of $5.04 in December and a low of $1.71 in September. This market and share price volatility relatingto the effects of COVID -19, as well as general economic, market or political conditions, has and could further reduce the market price of our common shares in spite of our operatingperformance and could also increase our cost of capital, which could prevent us from accessing debt and equity capital on terms acceptable to us or at all.The market price of our common shares is affected by a variety of factors, including:•fluctuations in interest rates;•fluctuations in the availability or the price of oil and chemicals;•fluctuations in foreign currency exchange rates;•announcements by us or our competitors;•changes in our relationships with customers or suppliers;•actual or anticipated fluctuations in our semi-annual and annual results and those of other public companies in our industry;24•changes in United States or foreign tax laws;•actual or anticipated fluctuations in our operating results from period to period;•shortfalls in our operating results from levels forecast by securities analysts;•market conditions in the shipping industry and the general state of the securities markets;•business interruptions caused by the recent outbreak of COVID-19;•mergers and strategic alliances in the shipping industry;•changes in government regulation;•a general or industry-specific decline in the demand for, and price of, shares of our common shares resulting from capital market conditions independent of our operatingperformance;•the loss of any of our key management personnel;•our failure to successfully implement our business plan; and•issuance of shares.Because we are a foreign corporation, you may not have the same rights that a shareholder in a U.S. corporation may have.We are incorporated in the Islands of Bermuda. Our memorandum of association, bye-laws and the Companies Act, 1981 of Bermuda (the “Companies Act”), govern our affairs.The Companies Act does not as clearly establish your rights and the fiduciary responsibilities of our directors as do statutes and judicial precedent in some U.S. jurisdictions. Therefore,you may have more difficulty in protecting your interests as a shareholder in the face of actions by the management, directors or controlling shareholders than would shareholders of acorporation incorporated in a United States jurisdiction. There is a statutory remedy under Section 111 of the Companies Act which provides that a shareholder may seek redress in thecourts as long as such shareholder can establish that our affairs are being conducted, or have been conducted, in a manner oppressive or prejudicial to the interests of some part of theshareholders, including such shareholder.We are incorporated in Bermuda and it may not be possible for our investors to enforce U.S. judgments against us.We are incorporated in the Islands of Bermuda. Substantially all of our assets are located outside the U.S. In addition, most of our directors and officers are non-residents of theU.S., and all or a substantial portion of the assets of these non-residents are located outside the U.S. As a result, it may be difficult or impossible for U.S. investors to serve processwithin the U.S. upon us, or our directors and officers or to enforce a judgment against us for civil liabilities in U.S. courts. In addition, you should not assume that courts in the countriesin which we are incorporated or where our vessels are located (1) would enforce judgments of U.S. courts obtained in actions against us based upon the civil liability provisions ofapplicable U.S. federal and state securities laws or (2) would enforce, in original actions, liabilities against us based on those laws.ITEM 4.INFORMATION ON THE COMPANYA.History and Development of the CompanyNordic American Tankers Limited was formed on June 12, 1995 under the name Nordic American Tanker Shipping Limited and organized under the laws of the Islands ofBermuda. In June 2011, we changed our name to Nordic American Tankers Limited. We maintain our principal offices at LOM Building, 27 Reid Street, Hamilton HM 11, Bermuda. Ourtelephone number at such address is (441) 292-7202. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuersthat file electronically with the SEC. The address of the SEC’s internet site is www.sec.gov. None of the information contained on these websites is incorporated into or forms a part ofthis annual report.25We are an international tanker company originally formed for the purpose of acquiring and chartering three double-hull Suezmax tankers that were built in 1997. Our fleetcurrently consists of 23 vessels. During 2018, we sold ten pre-2000 built vessels and took delivery of three newbuildings. The vessels in our fleet are homogenous and interchangeable,which is a business strategy we refer to as the “Nordic American System”. Our common shares trade under the symbol “NAT” on the New York Stock Exchange, or the NYSE.In January 2013, we acquired Scandic American Shipping Ltd, or Scandic, and NAT Chartering (formerly Orion Tankers Ltd), or NATC, as wholly-owned subsidiaries.Accordingly, the financial statements contained herein are presented on a consolidated basis for us and our subsidiaries, which we refer to as the Company or the Group.It is essential for us to have an operating model that is sustainable in both a weak and a strong tanker market, which we believe differentiates us from other publicly tradedtanker companies. The Nordic American System is transparent and predictable. As a general policy, we have a conservative risk profile. Our dividend payments are important for ourshareholders, and at the same time we recognize the need to expand our fleet when conditions are advantageous to us.Our 23 tankers are all Suezmaxes, which have a carrying capacity of one million barrels of oil, are highly versatile, and are able to be utilized on most long-haul trade routes. Ahomogenous fleet streamlines operating and administration costs, which helps keep our cash-breakeven point low.We pay our dividends from cash on hand. As of the date of this report, we have a cash break-even level of about $17,750 per day per vessel, which we consider low in theindustry. The cash break-even rate is the amount of average daily revenue our vessels would need to earn in order to cover our vessel operating expenses, cash general andadministrative expenses, interest expense and all other cash charges.On June 16, 2017, our Board declared a dividend of one preferred share purchase right, or a Right, for each outstanding common share and adopted a shareholder rights plan, asset forth in the Shareholders’ Rights Agreement dated as of June 16, 2017, or the Rights Agreement, by and between the Company and Computershare Trust Company, N.A., as rightsagent.In conjunction with delivery of three newbuildings from Samsung shipyard during 2018, or the 2018 Newbuildings, we entered into final agreements for the financing with OceanYield. Two of the 2018 Newbuildings were delivered in the third quarter of 2018 and the last Newbuilding was delivered to us in October 2018. Under the terms of the financing agreement,the lender has provided financing of 77.5% of the purchase price for each of the three 2018 Newbuildings. After delivery of each of the vessels, we entered into ten-year bareboat charteragreements. We are obligated to purchase the vessels upon the completion of the ten-year bareboat charter agreement and also have the option to purchase the vessels after sixty andeighty-four months. The agreements contain certain financial covenants requiring us to maintain a minimum value adjusted equity and value adjusted equity ratio; minimum liquidity;and minimum values.On July 25, 2018 we declared a cash dividend of $0.02 per share for the second quarter of 2018, which was paid on September 7, 2018. On November 1, 2018 we declared a cashdividend of $0.01 per share with respect to the third quarter of 2018, which was paid on December 7, 2018. On March 15, 2019 we paid a dividend of $0.04 per share with respect to thefourth quarter of 2018.During 2018 we sold 10 vessels. The total gross sales proceeds for these sales was $97.6 million including inventories and before costs of the transactions. The sales are a partof our commercial strategy and represent an important modernization of the fleet, which now stands at 23 units. The NAT fleet now has an average age of about 11.7 years.26Hermitage Offshore Services Ltd., or HOS, (formerly known as Nordic American Offshore Ltd) was incorporated in 2013, and operates ten platform supply vessels, eleven crewboats and two anchor handling vessels. HOS is listed on the New York Stock Exchange under the ticker “PSV”. We sold 187,815 shares in HOS during the year and held 811,538 shares asof December 31, 2019, which equaled about 3.2% of the common shares outstanding in HOS as of December 31, 2019. The reduction in ownership is a result of non-participation inseveral equity offerings in HOS during 2019 together with the abovementioned sale of shares.On January 29, 2019, we incorporated NAT Bermuda Holdings Ltd (“NATBH”) as a wholly-owned subsidiary of NAT. We proceeded to enter into the 2019 Senior Secured CreditFacility on February 12, 2019 and transferred the ownership of twenty vessels used as collateral from NAT to NATBH.On February 12, 2019, we entered into a new five-year senior secured credit facility for $306.1 million, or the 2019 Senior Secured Credit Facility, that refinanced the outstandingbalance on the Credit Facility, as defined below under Item 5.B. Liquidity and Capital Resources. Borrowings under the new facility are secured by first priority mortgages over theCompany’s vessel (excluding the three Ocean Yield vessels) and assignments of earnings and insurance. The loan has an annual amortization equal to a twenty-year maturity profile,carries a floating LIBOR interest rate plus a margin and matures in February 2024. Further, the agreement contains a discretionary excess cash down payment mechanism for the lenderthat equals 50% of the net earnings from the collateral vessels, less capex provision and amortization. The agreement contains covenants that require us to maintain $30.0 million inunrestricted cash and a loan-to-vessel value ratio of maximum 70%. We are free to distribute dividends as long as we comply with the covenants of the 2019 Senior Secured CreditFacility. As of December 31, 2019, we have borrowed $291.8 million under our 2019 Senior Secured Credit Facility.On March 29, 2019, we entered into an equity distribution agreement with B. Riley FBR, Inc., acting as a sales agent, under which we may, from time to time, offer and sell ourcommon shares through an at-the-market, or ATM, program having an aggregate offering price of up to $40,000,000. As of December 31, 2019, we had raised gross and net proceeds(after deducting sales commissions and other fees and expenses) under the ATM of $18.6 million and $17.9 million, respectively, by issuing and selling 5,260,968 common shares. As ofthe date of this report, no further sales have been completed under the ATM program.For more information, please see Item 5.B. Liquidity and Capital Resources with regard to the above described transactions.As of the date of this annual report, we have 147,230,634 common shares issued and outstanding.B.Business OverviewOur FleetOur fleet currently consists of 23 Suezmax crude oil tankers, of which the vast majority have been built in Korea. The majority of our vessels are employed in the spot market,together with one vessel currently on a longer term time charter agreement expiring in 2021 or later. The vessels are considered homogenous and interchangeable as they haveapproximately the same freight capacity and ability to transport the same type of cargo. Vessel Built in Deadweight Tons Delivered to NAT in Nordic Freedom2005 159,331 2005 Nordic Moon2002 160,305 2006 Nordic Apollo2003 159,998 2006 Nordic Cosmos2003 159,999 2006 Nordic Grace2002 149,921 2009 Nordic Mistral2002 164,236 2009 Nordic Passat2002 164,274 2010 Nordic Vega2010 163,940 2010 Nordic Breeze2011 158,597 2011 Nordic Zenith2011 158,645 2011 Nordic Sprinter2005 159,089 2014 Nordic Skier2005 159,089 2014 Nordic Light2010 158,475 2015 Nordic Cross2010 158,475 2015 Nordic Luna2004 150,037 2016 Nordic Castor2004 150,249 2016 Nordic Sirius2000 150,183 2016 Nordic Pollux2003 150,103 2016 Nordic Star2016 159,000 2016 Nordic Space2017 159,000 2017 Nordic Aquarius2018 157,000 2018 Nordic Cygnus2018 157,000 2018 Nordic Tellus2018 157,000 2018 27Employment of Our FleetIt is our policy to operate our vessels either in the spot market or on shorter-term time charters. Large international oil companies both in the Western and the Eastern parts ofthe world are important customers.Spot Charters: Tankers operating in the spot market are typically chartered for a single voyage which may last up to several weeks. Under a voyage charter, we are responsiblefor paying voyage expenses and the charterer is responsible for any delay at the loading or discharging ports. When our tankers are operating on spot charters, the vessels are tradedfully at the risk and reward of the Company. Revenues are recognized in a manner to reflect the transfer of the services to our customers over the duration of the voyage and freight isgenerally billed to the customer upon discharge of the cargo. The Company considers it appropriate to present this type of arrangement on a gross basis in the Statements of Operations.For further information concerning our accounting policies, please see Note 2 to our financial statements.The tanker industry has historically been stronger in the fall and winter months in anticipation of increased oil consumption in the norther hemisphere during the winter months.Seasonal variations in tanker demand normally result in seasonal fluctuations in the spot market charters.Time Charters: Under a time charter, the charterer is responsible and pays for the voyage expenses, such as port, canal and fuel costs, while the shipowner is responsible andpays for vessel operating expenses, including, among other costs, crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs and costs relatingto a vessel’s intermediate and special surveys. Revenue from time charter contracts are recognized daily over the term of the charter. Time charter agreements with profit-sharing arerecognized when the contingency related to it is resolved.Technical ManagementThe technical management of our vessels is handled by companies under direct instructions from NAT. The ship management firms V.Ships Norway AS, ColumbiaShipmanagement Ltd, Cyprus and Hellespont Ship Management GmbH & Co KG, Germany, provide the technical management services. The compensation paid under the technicalmanagement agreements is in accordance with industry standards.The International Tanker MarketInternational seaborne oil and petroleum products transportation services are mainly provided by two types of operators: major oil company captive fleets (both private andstate-owned) and independent shipowner fleets. Both types of operators transport oil under short-term contracts (including single-voyage “spot charters”) and long-term time charterswith oil companies, oil traders, large oil consumers, petroleum product producers and government agencies. The oil companies own, or control through long-term time charters,approximately one third of the current world tanker capacity, while independent companies own or control the balance of the fleet. The oil companies use their fleets not only totransport their own oil, but also to transport oil for third-party charterers in direct competition with independent owners and operators in the tanker charter market.28The oil transportation industry has historically been subject to regulation by national authorities and through international conventions. Over recent years, however, anenvironmental protection regime has evolved which has a significant impact on the operations of participants in the industry in the form of increasingly more stringent inspectionrequirements, closer monitoring of pollution-related events, and generally higher costs and potential liabilities for the owners and operators of tankers.In order to benefit from economies of scale, tanker charterers typically charter the largest possible vessel to transport oil or products, consistent with port and canal dimensionalrestrictions and optimal cargo lot sizes. A tanker’s carrying capacity is measured in deadweight tons, or dwt, which is the amount of crude oil measured in metric tons that the vessel iscapable of loading. ULCCs and VLCCs typically transport crude oil in long-haul trades, such as from the Arabian Gulf to Rotterdam via the Cape of Good Hope. Suezmax tankers alsoengage in long-haul crude oil trades as well as in medium-haul crude oil trades, such as from the Mediterranean and Arabian Gulf towards the Far East, i.e. China, India and otheremerging economies in Asia that absorb the shortfall from what the traditional routes, from West Africa to the East Coast of the United States, used to represent. Aframax-size vesselsgenerally engage in both medium-and short-haul trades of less than 1,500 miles and carry crude oil or petroleum products. Smaller tankers mostly transport petroleum products in short-haul to medium-haul trades.The 2019 Tanker Market (Source; Fearnleys)The 2019 tanker market was a stark improvement over the preceding year, with relatively normal seasonality but a third quarter which was below rates achieved in previous yearsand an outperforming fourth quarter. Suezmax earnings, basis fixture date for forward loading for modern vessels, averaged $30,600/day for the year, up 76.9% from an average$17,300/day in 2018, according to Fearnleys. The year started off with first quarter rates around $20,000/day before hovering around $15,000/day on average until the fourth quarter whenrates saw large improvements with an average rate in excess of $70,000/day. Earnings in the highly correlated VLCC and Aframax segments averaged $39,000/day and $25,200/day in 2019,respectively, posting yearly gains of 94% and 59.5%, as compared to 2018, respectively, after similar developments through the year. Good demand growth and slowing delivery pacetoward the end of the year were important factors for the increase in rates, but the major factor in the large increases according to Fearnleys was the attack on an oil installation in SaudiArabia and 26 Cosco VLCCs being sanctioned by the United States due to violations of Iran regulations.The total crude oil and product tanker fleet above 25,000 dwt grew a net 5.7% in 2019. This was a large increase from the year before when fleet growth was only 1.4%, but morein line with the 3.9% and 5.3% in 2017 and 2016. Year-end slippage from 2018 and significantly lower scrapping led to this increase. The crude tanker fleet grew by 6.1%, versus the ten-year average of 3.5%, while the product tanker fleet expanded by a more modest 4.6%, slightly below the 4.8% ten-year average. Over the past ten years the overall crude and producttanker fleet has grown by 3.5% per year on average.The 2019 Suezmax fleet growth of 4.1% was up from 1.9% in 2018 but still below trend for the past ten years. There were deliveries of 26 vessels while four were scrapped,taking the total fleet to 549 vessels by year-end. The 2019 delivery schedule was front-end heavy as 19 of 26 newbuildings delivered through the year were delivered during the firstquarter. Fleet growth thereby eased significantly during the remainder of the year and had a positive contribution to the stronger earnings development in second half of the year. Theamount of modern, fuel-efficient vessels increased from 27% of the total world fleet in 2019 as compared to 22% a year earlier. Meanwhile, the highly corelated VLCC and Aframax crudetanker segments expanded by 8.4% and 1.8%, respectively, after 68 VLCCs and 23 Aframaxes were delivered against four VLCCs and five Aframaxes scrapped. These fleets consisted of789 and 648 vessels, respectively, by the end of the year.While scrapping was extraordinarily high in 2018, there was relatively little in 2019 among improving earnings. During 2019, 3.3 million dwt were scrapped, a significant declinefrom the 18.5 million dwt in 2018, and well below the historic average of 7.7 million dwt. As of the beginning of 2020, there were 19 vessels at or above the past 10-year average scrap ageof 22 years, and 42 vessels existing above the 20 years age group.29The Suezmax orderbook stood at 46 vessels of 7.2 million dwt at the beginning of 2020, or 8.3% of the fleet. The total crude oil and product tanker orderbook for vessels above25,000 dwt counted 47.3 million dwt, or 8.3% of the fleet. This is the lowest orderbook to existing fleet level since 1996.Tanker demand was overall robust during 2019. Global oil demand growth was relatively slow during the first three quarters of the year, with 0.6, 0.5 and 0.8 million barrels perday (“mbpd”) growth year over year. In the fourth quarter, however, demand is estimated by the IEA to have reached a stronger 1.5 mbpd growth. The total for the year ended at 0.8mbpd oil demand growth, below the long-term trend. Oil supply growth, on the other hand, was higher in the first half of the year. Crude oil supply is more important for tankers thandemand because oil produced is largely either shipped to the end user or into storage, whereas demand can be met from both production and storage. The first and second quarters of2019 showed 1.5 and 0.8 mbpd of supply growth, respectively, which came despite OPEC+ agreeing to cut production by 1.2 mbpd in December 2018. The second half of 2019 saw 0.8mbpd decline in oil production, a negative for tanker demand. However, this was compared to extraordinarily strong growth in the second half of 2018 before the OPEC+ agreed to a 1.2mbpd production cut. This means that second half of 2019 volumes were still relatively healthy, historically speaking, with supply of more than 101 mbpd on average.Importantly for tankers, a relatively higher portion of oil supply in 2019 came from the Atlantic basin. Preliminary seaborne trade flow data from Fearnleys suggest overall solidtanker demand growth, where a slight decline in Middle East to Far East volumes was more than offset by strong growth for the Atlantic to Far East trade which from a tonne-mileperspective is highly beneficial due to long sailing distances. This development was seen for both the Suezmax and the highly correlated VLCC market and driven partly by strong USshale oil production growth at 1.24 mbpd, and partly by newly commissioned fields in Brazil and the North Sea. There was some West African Suezmax cargo growth to Europe to makeup for shortages from Libya. As a bonus, there was also volume growth for Suezmaxes carrying fuel oil from the Atlantic to Asia after the run-up to the implementation of IMO 2020 ledto a surplus of fuel oil toward the end of the year as most market participants started bunkering compliant fuels.Relatively high fleet growth through the first half and into the third quarter of 2019 and slowing oil production growth in the second half could have made for a disappointingend to the year, as was the tendency in the third quarter. However, strong tanker demand growth in the first half had largely offset fleet growth, which slowed toward the end of the year.Then the drone attacks in September on oil processing facilities at Abqaiq and Khurais in Saudi Arabia, among other attacks on tankers in the Strait of Hormuz sparked short term fearsof oil supply shortages, which contributed to a rise in freight rates. The market for rates increased again at the end of September when the US implemented sanctions on 26 Cosco DalianTankers/VLCCs for having traded with Iran, effectively further slowing fleet growth.The Tanker Market 2020Reported spot rates in the first quarter of 2020 was weaker than the fourth quarter of 2019, and the average Suezmax earnings per day decreased from $72,822 in the fourthquarter of 2019 to $55,001 for the first quarter of 2020 based on the indicated rates published by Clarksons. The quoted rates are an average of observations. From the time a voyage isbooked and the rate is reported to the market until the vessel loads the cargo and commences there can be a delay of up to 30 days. As such, from an accounting perspective, a voyagebooked at the end of a quarter may see the majority of its revenues being recorded in the following quarter’s results. The earnings for vessel operators is for this reason not necessarilyexpected to fluctuate in an identical manner as the indicative rates reported by Clarksons on a quarter over quarter basis. The earnings are for the abovementioned reasons in factexpected to be better in the first quarter of 2020 than what was reported in the fourth quarter of 2019.The orderbook for Suezmaxes has decreased over the last twelve months, with two vessels delivered in the first quarter of 2020 and 46 on order of which 17 are expected to bedelivered in 2020. There have been six orders of Suezmaxes so far in 2020.Oil prices slumped to below $30 per barrel in March 2020 and OPEC talks collapsed and resulted in higher output of oil into the market. Further, the COVID-19 virus has evolvedinto a global pandemic that has caused disruptions as travel bans, quarantines and other measures that have resulted in a significant drop in the end user demand for oil at the moment.The increased output from oil producers and lower oil prices have had a positive effect on the tanker market due to the need to transport these increased volumes combined with theneed for storage capacity as the current demand and output has created a contango in the oil price, stimulating demand for floating storage, and the Suezmax earnings per day haveincreased significantly during March 2020.30Environmental and Other Regulations in the Shipping IndustryGovernment regulation and laws significantly affect the ownership and operation of our fleet. We are subject to international conventions and treaties, national, state and locallaws and regulations in force in the countries in which our vessels may operate or are registered relating to safety and health and environmental protection including the storage,handling, emission, transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources.Compliance with such laws, regulations and other requirements entails significant expense, including vessel modifications and implementation of certain operating procedures.A variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicablenational authorities such as the United States Coast Guard (“USCG”), harbor master or equivalent), classification societies, flag state administrations (countries of registry) andcharterers, particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure tomaintain necessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of the operation of one or more of our vessels.Increasing environmental concerns have created a demand for vessels that conform to stricter environmental standards. We are required to maintain operating standards for allof our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. Webelieve that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses,certificates or other authorizations necessary for the conduct of our operations. However, because such laws and regulations frequently change and may impose increasingly stricterrequirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition,a future serious marine incident that causes significant adverse environmental impact could result in additional legislation or regulation that could negatively affect our profitability.International Maritime OrganizationThe International Maritime Organization, the United Nations agency for maritime safety and the prevention of pollution by vessels (the “IMO”), has adopted the InternationalConvention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 and herein as “MARPOL,”the International Convention for the Safety of Life at Sea of 1974 (“SOLAS Convention”), and the International Convention on Load Lines of 1966 (the “LL Convention”). MARPOLestablishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air emissions, handling and disposal of noxious liquids and the handling of harmfulsubstances in packaged forms. MARPOL is applicable to drybulk, tanker and LNG carriers, among other vessels, and is broken into six Annexes, each of which regulates a differentsource of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried in bulk in liquid or in packaged form, respectively; Annexes IV and Vrelate to sewage and garbage management, respectively; and Annex VI, lastly, relates to air emissions. Annex VI was separately adopted by the IMO in September of 1997; newemissions standards, titled IMO-2020, took effect on January 1, 2020.In 2013, the IMO’s Marine Environmental Protection Committee, or the “MEPC,” adopted a resolution amending MARPOL Annex I Condition Assessment Scheme, or “CAS.”These amendments became effective on October 1, 2014, and require compliance with the 2011 International Code on the Enhanced Programme of Inspections during Surveys of BulkCarriers and Oil Tankers, or “ESP Code,” which provides for enhanced inspection programs. We may need to make certain financial expenditures to comply with these amendments.31Air EmissionsIn September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution from vessels. Effective May 2005, Annex VI sets limits on sulfur oxide and nitrogen oxideemissions from all commercial vessel exhausts and prohibits “deliberate emissions” of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatilecompounds from cargo tanks and the shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas tobe established with more stringent controls on sulfur emissions, as explained below. Emissions of “volatile organic compounds” from certain vessels, and the shipboard incineration(from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls, or “PCBs”) are also prohibited. We believe that all our vessels are currentlycompliant in all material respects with these regulations.The Marine Environment Protection Committee, or “MEPC,” adopted amendments to Annex VI regarding emissions of sulfur oxide, nitrogen oxide, particulate matter and ozonedepleting substances, which entered into force on July 1, 2010. The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressivereduction of the amount of sulfur contained in any fuel oil used on board ships. On October 27, 2016, at its 70th session, the MEPC agreed to implement a global 0.5% m/m sulfur oxideemissions limit (reduced from 3.50%) starting from January 1, 2020. This limitation can be met by using low-sulfur compliant fuel oil, alternative fuels or certain exhaust gas cleaningsystems. Once the cap becomes effective, ships will be required to obtain bunker delivery notes and International Air Pollution Prevention (“IAPP”) Certificates from their flag statesthat specify sulfur content. Additionally, at MEPC 73, amendments to Annex VI to prohibit the carriage of bunkers above 0.5% sulfur on ships were adopted and will take effect March 1,2020. These regulations subject ocean-going vessels to stringent emissions controls, and may cause us to incur substantial costs.Sulfur content standards are even stricter within certain “Emission Control Areas,” or (“ECAs”). As of January 1, 2015, ships operating within an ECA were not permitted to usefuel with sulfur content in excess of 0.1% m/m. Amended Annex VI establishes procedures for designating new ECAs. Currently, the IMO has designated four ECAs, including specifiedportions of the Baltic Sea area, North Sea area, North American area and United States Caribbean area. Ocean-going vessels in these areas will be subject to stringent emission controlsand may cause us to incur additional costs. Other areas in China are subject to local regulations that impose stricter emission controls. If other ECAs are approved by the IMO, or othernew or more stringent requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the U.S. Environmental Protection Agency (“EPA”) orthe states where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of our operations.Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for marine diesel engines, depending on their date of installation. At the MEPCmeeting held from March to April 2014, amendments to Annex VI were adopted which address the date on which Tier III Nitrogen Oxide (NOx) standards in ECAs will go into effect. Under the amendments, Tier III NOx standards apply to ships that operate in the North American and U.S. Caribbean Sea ECAs designed for the control of NOx produced by vesselswith a marine diesel engine installed and constructed on or after January 1, 2016. Tier III requirements could apply to areas that will be designated for Tier III NOx in the future. At MEPC70 and MEPC 71, the MEPC approved the North Sea and Baltic Sea as ECAs for nitrogen oxide for ships built on or after January 1, 2021. The EPA promulgated equivalent (and in somesenses stricter) emissions standards in 2010. As a result of these designations or similar future designations, we may be required to incur additional operating or other costs.As determined at the MEPC 70, the new Regulation 22A of MARPOL Annex VI became effective as of March 1, 2018 and requires ships above 5,000 gross tonnage to collectand report annual data on fuel oil consumption to an IMO database, with the first year of data collection having commenced on January 1, 2019. The IMO intends to use such data asthe first step in its roadmap (through 2023) for developing its strategy to reduce greenhouse gas emissions from ships, as discussed further below.32As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. All ships are now required to develop and implement Ship EnergyEfficiency Management Plans (“SEEMPS”), and new ships must be designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy EfficiencyDesign Index (“EEDI”). Under these measures, by 2025, all new ships built will be 30% more energy efficient than those built in 2014.We may incur costs to comply with these revised standards. Additional or new conventions, laws and regulations may be adopted that could require the installation ofexpensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition.Safety Management System RequirementsThe SOLAS Convention was amended to address the safe manning of vessels and emergency training drills. The Convention of Limitation of Liability for Maritime Claims (the“LLMC”) sets limitations of liability for a loss of life or personal injury claim or a property claim against ship owners. We believe that our vessels are in substantial compliance withSOLAS and LLMC standards.Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (the “ISM Code”), ouroperations are also subject to environmental standards and requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safetymanagement system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vesselssafely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical management team have developed forcompliance with the ISM Code. The failure of a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease availableinsurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel’smanagement with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document ofcompliance, issued by each flag state, under the ISM Code. We have obtained applicable documents of compliance for our offices and safety management certificates for all of ourvessels for which the certificates are required by the IMO. The documents of compliance and safety management certificates are renewed as required.Regulation II-1/3-10 of the SOLAS Convention governs ship construction and stipulates that ships over 150 meters in length must have adequate strength, integrity andstability to minimize risk of loss or pollution. Goal-based standards amendments in SOLAS regulation II-1/3-10 entered into force in 2012, with July 1, 2016 set for application to new oiltankers and bulk carriers. The SOLAS Convention regulation II-1/3-10 on goal-based ship construction standards for bulk carriers and oil tankers, which entered into force on January 1,2012, requires that all oil tankers and bulk carriers of 150 meters in length and above, for which the building contract is placed on or after July 1, 2016, satisfy applicable structuralrequirements conforming to the functional requirements of the International Goal-based Ship Construction Standards for Bulk Carriers and Oil Tankers (“GBS Standards”).Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels be in compliance with the International MaritimeDangerous Goods Code (“IMDG Code”). Effective January 1, 2018, the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions fromthe International Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods and (3) new mandatory training requirements. Amendmentswhich took effect on January 1, 2020 also reflect the latest material from the UN Recommendations on the Transport of Dangerous Goods, including (1) new provisions regarding IMOtype 9 tank, (2) new abbreviations for segregation groups, and (3) special provisions for carriage of lithium batteries and of vehicles powered by flammable liquid or gas.33The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”). As of February 2017, all seafarersare required to meet the STCW standards and be in possession of a valid STCW certificate. Flag states that have ratified SOLAS and STCW generally employ the classificationsocieties, which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.Furthermore, recent action by the IMO’s Maritime Safety Committee and United States agencies indicates that cybersecurity regulations for the maritime industry are likely to befurther developed in the near future in an attempt to combat cybersecurity threats. For example, cyber-risk management systems must be incorporated by ship-owners and managers by2021. This might cause companies to create additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. The impact of suchregulations is hard to predict at this time.Pollution Control and Liability RequirementsThe IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of the signatories to such conventions. Forexample, the IMO adopted an International Convention for the Control and Management of Ships’ Ballast Water and Sediments (the “BWM Convention”) in 2004. The BWMConvention entered into force on September 8, 2017. The BWM Convention requires ships to manage their ballast water to remove, render harmless or avoid the uptake or discharge ofnew or invasive aquatic organisms and pathogens within ballast water and sediments. The BWM Convention’s implementing regulations call for a phased introduction of mandatoryballast water exchange requirements, to be replaced in time with mandatory concentration limits, and require all ships to carry a ballast water record book and an international ballastwater management certificate. On December 4, 2013, the IMO Assembly passed a resolution revising the application dates of the BWM Convention so that the dates are triggered by the entry into force dateand not the dates originally in the BWM Convention. This, in effect, makes all vessels delivered before the entry into force date “existing vessels” and allows for the installation ofballast water management systems on such vessels at the first International Oil Pollution Prevention (“IOPP”) renewal survey following entry into force of the convention. The MEPCadopted updated guidelines for approval of ballast water management systems (G8) at MEPC 70. At MEPC 71, the schedule regarding the BWM Convention’s implementation dates wasalso discussed and amendments were introduced to extend the date existing vessels are subject to certain ballast water standards. Those changes were adopted at MEPC 72. Ships over400 gross tons generally must comply with a “D-1 standard,” requiring the exchange of ballast water only in open seas and away from coastal waters. The “D-2 standard” specifies themaximum amount of viable organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. Depending on the date of the IOPP renewal survey,existing vessels must comply with the D-2 standard on or after September 8, 2019. For most ships, compliance with the D-2 standard will involve installing on-board systems to treatballast water and eliminate unwanted organisms. Ballast water management systems, which include systems that make use of chemical, biocides, organisms or biological mechanisms, orwhich alter the chemical or physical characteristics of the ballast water, must be approved in accordance with IMO Guidelines (Regulation D-3). As of October 13, 2019, MEPC 72’samendments to the BWM Convention took effect, making the Code for Approval of Ballast Water Management Systems, which governs assessment of ballast water managementsystems, mandatory rather than permissive, and formalized an implementation schedule for the D-2 standard. Under these amendments, all ships must meet the D-2 standard bySeptember 8, 2024. Costs of compliance with these regulations may be substantial.Once mid-ocean ballast exchange or ballast water treatment requirements become mandatory under the BWM Convention, the cost of compliance could increase for oceancarriers and may have a material effect on our operations. However, many countries already regulate the discharge of ballast water carried by vessels from country to country to preventthe introduction of invasive and harmful species via such discharges. The U.S., for example, requires vessels entering its waters from another country to conduct mid-ocean ballastexchange, or undertake some alternate measure, and to comply with certain reporting requirements.34The IMO adopted the International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended by different Protocols in 1976, 1984 and 1992, and amended in2000 (“the CLC”). Under the CLC and depending on whether the country in which the damage results is a party to the 1992 Protocol to the CLC, a vessel’s registered owner may bestrictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain exceptions. The 1992 Protocol changed certainlimits on liability expressed using the International Monetary Fund currency unit, the Special Drawing Rights. The limits on liability have since been amended so that the compensationlimits on liability were raised. The right to limit liability is forfeited under the CLC where the spill is caused by the shipowner’s actual fault and under the 1992 Protocol where the spill iscaused by the shipowner’s intentional or reckless act or omission where the shipowner knew pollution damage would probably result. The CLC requires ships over 2,000 tons coveredby it to maintain insurance covering the liability of the owner in a sum equivalent to an owner’s liability for a single incident. We have protection and indemnity insurance forenvironmental incidents. P&I Clubs in the International Group issue the required Bunkers Convention “Blue Cards” to enable signatory states to issue certificates. All of our vessels arein possession of a CLC State issued certificate attesting that the required insurance coverage is in force.The IMO also adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the “Bunker Convention”) to impose strict liability on ship owners(including the registered owner, bareboat charterer, manager or operator) for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The BunkerConvention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable nationalor international limitation regime (but not exceeding the amount calculated in accordance with the LLMC). With respect to non-ratifying states, liability for spills or releases of oil carriedas fuel in ship’s bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.Ships are required to maintain a certificate attesting that they maintain adequate insurance to cover an incident. In jurisdictions, such as the United States where the CLC or theBunker Convention has not been adopted, various legislative schemes or common law govern, and liability is imposed either on the basis of fault or on a strict-liability basis.Anti‑Fouling RequirementsIn 2001, the IMO adopted the International Convention on the Control of Harmful Anti‑fouling Systems on Ships, or the “Anti‑fouling Convention.” The Anti‑foulingConvention, which entered into force on September 17, 2008, prohibits the use of organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls ofvessels. Vessels of over 400 gross tons engaged in international voyages will also be required to undergo an initial survey before the vessel is put into service or before an InternationalAnti‑fouling System Certificate is issued for the first time; and subsequent surveys when the anti‑fouling systems are altered or replaced. We have obtained Anti‑fouling SystemCertificates for all of our vessels that are subject to the Anti‑fouling Convention.Compliance EnforcementNoncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to increased liability, may lead to decreases in available insurancecoverage for affected vessels and may result in the denial of access to, or detention in, some ports. The USCG and European Union authorities have indicated that vessels not incompliance with the ISM Code by applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively. As of the date of this report, each of our vessels isISM Code certified. However, there can be no assurance that such certificates will be maintained in the future. The IMO continues to review and introduce new regulations. It isimpossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations.35United States RegulationsThe U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability ActThe U.S. Oil Pollution Act of 1990 (“OPA”) established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affectsall “owners and operators” whose vessels trade or operate within the U.S., its territories and possessions or whose vessels operate in U.S. waters, which includes the U.S.’s territorial seaand its 200-nautical mile exclusive economic zone around the U.S. The U.S. has also enacted the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”),which applies to the discharge of hazardous substances other than oil, except in limited circumstances, whether on land or at sea. OPA and CERCLA both define “owner and operator” inthe case of a vessel as any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations.Under OPA, vessel owners and operators are “responsible parties” and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a thirdparty, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels, includingbunkers (fuel). OPA defines these other damages broadly to include:(i) injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;(ii) injury to, or economic losses resulting from, the destruction of real and personal property;(iii) loss of subsistence use of natural resources that are injured, destroyed or lost;(iv) net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;(v) lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and(vi) net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or healthhazards, and loss of subsistence use of natural resources.OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs. Effective November 12, 2019, the USCG adjusted the limits of OPAliability for a tank vessel, other than a single-hull tank vessel, over 3,000 gross tons liability to the greater of $2,300 per gross ton or $19,943,400 (subject to periodic adjustment forinflation. These limits of liability do not apply if an incident was proximately caused by the violation of an applicable U.S. federal safety, construction or operating regulation by aresponsible party (or its agent, employee or a person acting pursuant to a contractual relationship) or a responsible party’s gross negligence or willful misconduct. The limitation onliability similarly does not apply if the responsible party fails or refuses to (i) report the incident as required by law where the responsible party knows or has reason to know of theincident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal WaterPollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act.CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well as damages for injury to, ordestruction or loss of, natural resources, including the reasonable costs associated with assessing the same, and health assessments or health effects studies. There is no liability if thedischarge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 pergross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (renderingthe responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or theprimary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsibleperson fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.36OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law. OPA and CERCLA both require owners and operators of vessels toestablish and maintain with the USCG evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject.Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. Wecomply and plan to comply going forward with the USCG’s financial responsibility regulations by providing applicable certificates of financial responsibility.The 2010 Deepwater Horizon oil spill in the Gulf of Mexico resulted in additional regulatory initiatives or statutes, including higher liability caps under OPA, new regulationsregarding offshore oil and gas drilling and a pilot inspection program for offshore facilities. However, several of these initiatives and regulations have been or may be revised. Forexample, the U.S. Bureau of Safety and Environmental Enforcement’s (“BSEE”) revised Production Safety Systems Rule (“PSSR”), effective December 27, 2018, modified and relaxedcertain environmental and safety protections under the 2016 PSSR. Additionally, the BSEE amended the Well Control Rule, effective July 15, 2019, which rolled back certain reformsregarding the safety of drilling operations, and the U.S. President has proposed leasing new sections of U.S. waters to oil and gas companies for offshore drilling. The effects of theseproposals and changes are currently unknown. Compliance with any new requirements of OPA and future legislation or regulations applicable to the operation of our vessels couldimpact the cost of our operations and adversely affect our business.OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, provided they accept, at aminimum, the levels of liability established under OPA and some states have enacted legislation providing for unlimited liability for oil spills. Many U.S. states that border a navigablewaterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardoussubstance. These laws may be more stringent than U.S. federal law. Moreover, some states have enacted legislation providing for unlimited liability for discharge of pollutants withintheir waters, although in some cases, states which have enacted this type of legislation have not yet issued implementing regulations defining vessel owners’ responsibilities underthese laws. The Company intends to comply with all applicable state regulations in the ports where the Company’s vessels call.We currently maintain pollution liability coverage insurance in the amount of $1.0 billion per incident for each of our vessels. If the damages from a catastrophic spill were toexceed our insurance coverage, it could have an adverse effect on our business and results of operation.Other United States Environmental InitiativesThe U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (“CAA”) requires the EPA to promulgate standards applicable to emissions of volatile organiccompounds and other air contaminants. Our vessels are subject to vapor control and recovery requirements for certain cargoes when loading, unloading, ballasting, cleaning andconducting other operations in regulated port areas. The CAA also requires states to draft State Implementation Plans, or “SIPs,” designed to attain national health-based air qualitystandards in each state. Although state-specific, SIPs may include regulations concerning emissions resulting from vessel loading and unloading operations by requiring the installationof vapor control equipment. Our vessels operating in such regulated port areas with restricted cargoes are equipped with vapor recovery systems that satisfy these existingrequirements.The U.S. Clean Water Act (“CWA”) prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized by a duly-issued permit orexemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation anddamages and complements the remedies available under OPA and CERCLA. In 2015, the EPA expanded the definition of “waters of the United States” (“WOTUS”), thereby expandingfederal authority under the CWA. Following litigation on the revised WOTUS rule, in December 2018, the EPA and Department of the Army proposed a revised, limited definition of“waters of the United States.” The proposed rule was published in the Federal Register on February 14, 2019 and was subject to public comment. On October 22, 2019, the agenciespublished a final rule repealing the 2015 Rule defining “waters of the United States” and recodified the regulatory text that existed prior to the 2015 Rule. The final rule became effectiveon December 23, 2019. On January 23, 2020, the EPA published the “Navigable Waters Protection Rule,” which replaces the rule published on October 22, 2019, and redefines “waters ofthe United States.” The effect of this rule is currently unknown.37The EPA and the USCG have also enacted rules relating to ballast water discharge, compliance with which requires the installation of equipment on our vessels to treat ballastwater before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial costs, and/or otherwise restrict our vessels fromentering U.S. Waters. The EPA will regulate these ballast water discharges and other discharges incidental to the normal operation of certain vessels within United States waterspursuant to the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on December 4, 2018 and replaces the 2013 Vessel General Permit (“VGP”) program (whichauthorizes discharges incidental to operations of commercial vessels and contains numeric ballast water discharge limits for most vessels to reduce the risk of invasive species in U.S.waters, stringent requirements for exhaust gas scrubbers, and requirements for the use of environmentally acceptable lubricants) and current Coast Guard ballast water managementregulations adopted under the U.S. National Invasive Species Act (“NISA”), such as mid-ocean ballast exchange programs and installation of approved USCG technology for all vesselsequipped with ballast water tanks bound for U.S. ports or entering U.S. waters. VIDA establishes a new framework for the regulation of vessel incidental discharges under Clean WaterAct (CWA), requires the EPA to develop performance standards for those discharges within two years of enactment, and requires the U.S. Coast Guard to develop implementation,compliance and enforcement regulations within two years of EPA’s promulgation of standards. Under VIDA, all provisions of the 2013 VGP and USCG regulations regarding ballast watertreatment remain in force and effect until the EPA and U.S. Coast Guard regulations are finalized. Non-military, non-recreational vessels greater than 79 feet in length must continue tocomply with the requirements of the VGP, including submission of a Notice of Intent (“NOI”) or retention of a PARI form and submission of annual reports. We have submitted NOIs forour vessels where required. Compliance with the EPA, U.S. Coast Guard and state regulations could require the installation of ballast water treatment equipment on our vessels or theimplementation of other port facility disposal procedures at potentially substantial cost, or may otherwise restrict our vessels from entering U.S. waters.European Union RegulationsIn October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, ifcommitted with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting thedischarge of a polluting substance may also lead to criminal penalties. The directive applies to all types of vessels, irrespective of their flag, but certain exceptions apply to warships orwhere human safety or that of the ship is in danger. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims. Regulation (EU) 2015/757of the European Parliament and of the Council of 29 April 2015 (amending EU Directive 2009/16/EC) governs the monitoring, reporting and verification of carbon dioxide emissions frommaritime transport, and, subject to some exclusions, requires companies with ships over 5,000 gross tonnage to monitor and report carbon dioxide emissions annually, which may causeus to incur additional expenses.The European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of high-risk ships, as determined by type, age andflag as well as the number of times the ship has been detained. The European Union also adopted and extended a ban on substandard ships and enacted a minimum ban period and adefinitive ban for repeated offenses. The regulation also provided the European Union with greater authority and control over classification societies, by imposing more requirements onclassification societies and providing for fines or penalty payments for organizations that failed to comply. Furthermore, the EU has implemented regulations requiring vessels to usereduced sulfur content fuel for their main and auxiliary engines. The EU Directive 2005/33/EC (amending Directive 1999/32/EC) introduced requirements parallel to those in Annex VIrelating to the sulfur content of marine fuels. In addition, the EU imposed a 0.1% maximum sulfur requirement for fuel used by ships at berth in the Baltic, the North Sea and the EnglishChannel (the so called “SOx-Emission Control Area”). As of January 2020, EU member states must also ensure that ships in all EU waters, except the SOx-Emission Control Area, usefuels with a 0.5% maximum sulfur content.International Labour OrganizationThe International Labour Organization (the “ILO”) is a specialized agency of the UN that has adopted the Maritime Labor Convention 2006 (“MLC 2006”). A Maritime LaborCertificate and a Declaration of Maritime Labor Compliance is required to ensure compliance with the MLC 2006 for all ships that are 500 gross tonnage or over and are either engaged ininternational voyages or flying the flag of a Member and operating from a port, or between ports, in another country. We believe that all our vessels are in substantial compliance withand are certified to meet MLC 2006.38Greenhouse Gas RegulationCurrently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on ClimateChange, which entered into force in 2005 and pursuant to which adopting countries have been required to implement national programs to reduce greenhouse gas emissions with targetsextended through 2020. International negotiations are continuing with respect to a successor to the Kyoto Protocol, and restrictions on shipping emissions may be included in any newtreaty. In December 2009, more than 27 nations, including the U.S. and China, signed the Copenhagen Accord, which includes a non-binding commitment to reduce greenhouse gasemissions. The 2015 United Nations Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force on November 4, 2016 and does not directly limitgreenhouse gas emissions from ships. The U.S. initially entered into the agreement, but on June 1, 2017, the U.S. President announced that the United States intends to withdraw fromthe Paris Agreement, which provides for a four-year exit process, meaning that the earliest possible effective withdrawal date cannot be before November 4, 2020. The timing and effect ofsuch action has yet to be determined.At MEPC 70 and MEPC 71, a draft outline of the structure of the initial strategy for developing a comprehensive IMO strategy on reduction of greenhouse gas emissions fromships was approved. In accordance with this roadmap, in April 2018, nations at the MEPC 72 adopted an initial strategy to reduce greenhouse gas emissions from ships. The initialstrategy identifies “levels of ambition” to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through implementation of further phases of theEEDI for new ships; (2) reducing carbon dioxide emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by2050, compared to 2008 emission levels; and (3) reducing the total annual greenhouse emissions by at least 50% by 2050 compared to 2008 while pursuing efforts towards phasing themout entirely. The initial strategy notes that technological innovation, alternative fuels and/or energy sources for international shipping will be integral to achieve the overall ambition.These regulations could cause us to incur additional substantial expenses.The EU made a unilateral commitment to reduce overall greenhouse gas emissions from its member states from 20% of 1990 levels by 2020. The EU also committed to reduce itsemissions by 20% under the Kyoto Protocol’s second period from 2013 to 2020. Starting in January 2018, large ships over 5,000 gross tonnage calling at EU ports are required to collectand publish data on carbon dioxide emissions and other information.In the United States, the EPA issued a finding that greenhouse gases endanger the public health and safety, adopted regulations to limit greenhouse gas emissions from certainmobile sources and proposed regulations to limit greenhouse gas emissions from large stationary sources. However, in March 2017, the U.S. President signed an executive order toreview and possibly eliminate the EPA’s plan to cut greenhouse gas emissions, and in August 2019, the Administration announced plans to weaken regulations for methane emissions.The EPA or individual U.S. states could enact environmental regulations that would affect our operations.Any passage of climate control legislation or other regulatory initiatives by the IMO, the EU, the U.S. or other countries where we operate, or any treaty adopted at theinternational level to succeed the Kyoto Protocol or Paris Agreement, that restricts emissions of greenhouse gases could require us to make significant financial expenditures which wecannot predict with certainty at this time. Even in the absence of climate control legislation, our business may be indirectly affected to the extent that climate change may result in sealevel changes or certain weather events.Vessel Security RegulationsSince the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to enhance vessel security such as the U.S. MaritimeTransportation Security Act of 2002 (“MTSA”). To implement certain portions of the MTSA, the USCG issued regulations requiring the implementation of certain security requirementsaboard vessels operating in waters subject to the jurisdiction of the United States and at certain ports and facilities, some of which are regulated by the EPA.39Similarly, Chapter XI-2 of the SOLAS Convention imposes detailed security obligations on vessels and port authorities and mandates compliance with the International Shipand Port Facility Security Code (“the ISPS Code”). The ISPS Code is designed to enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attainan International Ship Security Certificate (“ISSC”) from a recognized security organization approved by the vessel’s flag state. Ships operating without a valid certificate may bedetained, expelled from or refused entry at port until they obtain an ISSC. The various requirements, some of which are found in the SOLAS Convention, include, for example, on-boardinstallation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations,including information on a ship’s identity, position, course, speed and navigational status; on-board installation of ship security alert systems, which do not sound on the vessel butonly alert the authorities on shore; the development of vessel security plans; ship identification number to be permanently marked on a vessel’s hull; a continuous synopsis record keptonboard showing a vessel’s history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship’sidentification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and compliance with flag state security certificationrequirements.The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided such vesselshave on board a valid ISSC that attests to the vessel’s compliance with the SOLAS Convention security requirements and the ISPS Code. Future security measures could have asignificant financial impact on us. We intend to comply with the various security measures addressed by MTSA, the SOLAS Convention and the ISPS Code.The cost of vessel security measures has also been affected by the escalation in the frequency of acts of piracy against ships, notably off the coast of Somalia, including theGulf of Aden and Arabian Sea area. Substantial loss of revenue and other costs may be incurred as a result of detention of a vessel or additional security measures, and the risk ofuninsured losses could significantly affect our business. Costs are incurred in taking additional security measures in accordance with Best Management Practices to Deter Piracy,notably those contained in the BMP5 industry standard.Inspection by Classification SocietiesThe hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that avessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and SOLAS. Most insurance underwriters make it acondition for insurance coverage and lending that a vessel be certified “in class” by a classification society which is a member of the International Association of ClassificationSocieties, the IACS. The IACS has adopted harmonized Common Structural Rules, or “the Rules,” which apply to oil tankers and bulk carriers contracted for construction on or after July1, 2015. The Rules attempt to create a level of consistency between IACS Societies. All of our vessels are certified as being “in class” by all the applicable Classification Societies (e.g.,American Bureau of Shipping, Lloyd’s Register of Shipping).A vessel must undergo annual surveys, intermediate surveys, drydockings and special surveys. In lieu of a special survey, a vessel’s machinery may be on a continuous surveycycle, under which the machinery would be surveyed periodically over a five-year period. Every vessel is also required to be drydocked every 30 to 36 months for inspection of theunderwater parts of the vessel. If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, drydocking or special survey, the vessel will be unable tocarry cargo between ports and will be unemployable and uninsurable which could cause us to be in violation of certain covenants in our loan agreements. Any such inability to carrycargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.40Risk of Loss and Liability InsuranceGeneralGeneralThe operation of any cargo vessel includes risks such as mechanical failure, physical damage, collision, property loss, cargo loss or damage and business interruption due topolitical circumstances in foreign countries, piracy incidents, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills andother environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon shipowners,operators and bareboat charterers of any vessel trading in the exclusive economic zone of the United States for certain oil pollution accidents in the United States, has made liabilityinsurance more expensive for shipowners and operators trading in the United States market. We carry insurance coverage as customary in the shipping industry. However, not all riskscan be insured, specific claims may be rejected, and we might not be always able to obtain adequate insurance coverage at reasonable rates.Hull and Machinery InsuranceWe have obtained marine hull and machinery and war risk insurance, which include the risk of actual or constructive total loss, for all of the vessels in our fleet. The vessels inour fleet are each covered up to at least fair market value, with deductibles of $350,000 per vessel per incident. We also arranged increased value coverage for each vessel. Under thisincreased value coverage, in the event of total loss of a vessel, we will be able recover for amounts not recoverable under the hull and machinery policy by reason of any under-insurance. We generally do not maintain insurance against loss of hire (except for certain charters for which we consider it appropriate), which covers business interruptions that resultin the loss of use of a vessel.Protection and Indemnity InsuranceProtection and indemnity insurance is provided by mutual protection and indemnity associations, or “P&I Associations,” and covers our third-party liabilities in connectionwith our shipping activities. This includes third-party liability and other related expenses of injury or death of crew, passengers and other third parties, loss or damage to cargo, claimsarising from collisions with other vessels, damage to other third-party property, pollution arising from oil or other substances and salvage, towing and other related costs, includingwreck removal. Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity mutual associations, or “clubs.”Our current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident. The 13 P&I Associations that comprise the International Groupinsure approximately 90% of the world’s commercial tonnage and have entered into a pooling agreement to reinsure each association’s liabilities. The International Group’s website statesthat the Pool provides a mechanism for sharing all claims in excess of US$ 10 million up to, currently, approximately US$ 8.0 billion. As a member of a P&I Association, which is a memberof the International Group, we are subject to calls payable to the associations based on our claim records as well as the claim records of all other members of the individual associationsand members of the shipping pool of P&I Associations comprising the International Group.CompetitionWe operate in what we refer to as the Nordic American System, which describes our operation of our homogenous Suezmax tanker fleet in markets that are highly competitiveand based primarily on supply and demand. We currently operate the majority of our vessels in the spot market. We compete for charters on the basis of price, vessel location, size, ageand condition of the vessel, as well as on our reputation as an operator. For more information on the “Nordic American System”, please see Item 4.A. History and Development of theCompany.41Permits and AuthorizationsWe are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our vessels. The kinds of permits,licenses and certificates required depend upon several factors, including the commodity transported, the waters in which the vessel operates, the nationality of the vessel’s crew and theage of a vessel. We have been able to obtain all permits, licenses and certificates currently required to permit our vessels to operate. Additional laws and regulations, environmental orotherwise, may be adopted which could limit our ability to do business or increase our cost of doing business.SeasonalityHistorically, oil trade and, therefore, charter rates increased in the winter months and eased in the summer months as demand for oil in the Northern Hemisphere rose in colderweather and fell in warmer weather. The tanker industry, in general, has become less dependent on the seasonal transport of heating oil than a decade ago as new uses for oil and oilproducts have developed, spreading consumption more evenly over the year. This is most apparent from the higher seasonal demand during the summer months due to energyrequirements for air conditioning and motor vehicles.C.Organizational StructureWe were incorporated under the laws of Bermuda on June 12, 1995. We own three vessels directly at the parent level and the remaining twenty vessels are owned through ourwholly-owned subsidiary, NATBH. NATBH was incorporated on January 29, 2019 and following the signing of the 2019 Senior Secured Credit Facility entered into on February 12, 2019,we transferred the ownership of twenty vessels used as collateral for the loan from NAT to NATBH.Since May 30, 2003, Scandic has acted as our Manager, or the Manager, providing technical and administrative services pursuant to the Management Agreement. On January10, 2013, the Manager became our wholly-owned subsidiary. Scandic is incorporated in Bermuda and has a European branch.On January 3, 2013, NATC became our wholly owned subsidiary. NATC consists of the parent company incorporated in Bermuda, and its wholly owned subsidiary, NATChartering AS, which is incorporated in Norway. NAT receives commercial management services through NATC.D.Property, Plant and EquipmentPlease see Item 4. Information on the Company B. Business Overview - Our Fleet, for a description of our vessels. The vessels are mortgaged as collateral under the CreditFacility and the financing agreements with Ocean Yield.ITEM 4A.UNRESOLVED STAFF COMMENTSNone.ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTSThe following management’s discussion and analysis should be read in conjunction with our historical financial statements and notes thereto included elsewhere in this report.This discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results may differ materially fromthose anticipated in these forward-looking statements as a result of certain factors, such as those set forth in the section entitled Item 3.D. Risk Factors and elsewhere in this annualreport.For a discussion of our results for the year ended December 31, 2018 compared to the year ended December 31, 2017, please see Item 5. Operating and Financial Review andProspects – A. Operating Results –Year Ended December 31, 2018 Compared to Year Ended December 31, 2017 contained in our annual report on Form 20-F for the year ended December31, 2018, as amended, filed with the Securities and Exchange Commission on April 16, 2019.42A.Operating ResultsYEAR ENDED DECEMBER 31, 2019 COMPARED TO YEAR ENDED DECEMBER 31, 2018 Years Ended December 31, All figures in USD ‘000 2019 2018 Variance Voyage Revenue 317,220 289,016 9.8%Voyage Expenses (141,770) (165,012) (14.1%)Vessel Operating Expenses (66,033) (80,411) (17.9%)Impairment Loss on Vessels - (2,168) N/A Impairment Loss on Goodwill - - N/A Loss from Disposal of Vessels - (6,619) N/A General and Administrative Expenses (13,481) (12,727) 5.9%Depreciation Expenses (63,965) (60,695) 5.4%Net Operating (Loss) Income 31,971 (38,616) (182.8%)Interest Income 298 334 (10.8%)Interest Expenses (38,390) (34,549) 11.1%Other Financial Expenses (4,231) (14,808) (71.4%)Equity Loss from Associate - (7,667) N/A Net (Loss) Income (10,352) (95,306) (89.1%)Management believes that net voyage revenue, a non-GAAP financial measure, provides additional meaningful information because it enables us to compare the profitability ofour vessels which are employed under bareboat charters, spot related time charters and spot charters. Net voyage revenues divided by the number of days on the charter provides theTime Charter Equivalent (TCE) Rate. Net voyage revenues and TCE rates are widely used by investors and analysts in the tanker shipping industry for comparing the financialperformance of companies and for preparing industry averages. We believe that our method of calculating net voyage revenue is consistent with industry standards. The table belowreconciles our net voyage revenues to voyage revenues. Years Ended December 31, All figures in USD ‘000, except TCE rate per day 2019 2018 Variance Voyage Revenue 317,220 289,016 9.8%Less Voyage expenses (141,770) (165,012) (14.1%)Net Voyage Revenue 175,450 124,004 41.5%Vessel Calendar Days (1) 8,395 9,747 (13.9%)Less off-hire days 293 277 5.8%Total TCE days 8,102 9,470 (14.4%)TCE Rate per day (2) $21,655 $13,095 65.4%)Total Days for vessel operating expenses 8,395 9,747 (13.9%)(1)Vessel Calendar Days is the total number of days the vessels were in our fleet.(2)Time Charter Equivalent (“TCE”) Rate, results from Net Voyage Revenue divided by total TCE days.The change in Voyage revenue is due to two main factors:i)The number of TCE daysii)The change in the TCE rate achieved.With regards to i), the decrease in vessel calendar days is mainly due to the disposal of ten vessels in 2018, offset by three 2018 Newbuildings delivered in the latter part of 2018.43With regards to ii), the TCE rate increased by $8,560, or 65.4%. The indicative rates presented by Clarksons Shipping increased by 91.7% for the twelve months of 2019compared to the same twelve months in 2018 to $31,560 from $16,466, respectively. The rates presented by Clarksons Shipping were significantly influenced by the spike in the Suezmaxtanker rates in the fourth quarter of both 2019 and 2018. Our average TCE was also positively impacted by the increased tanker rates towards the end of 2019, but not to the same extentas the rates reported by Clarksons Shipping. We expect this spike to materialize to a larger extent in the first quarter of 2020 compared to the rates reported by Clarksons Shipping.As a result of i) and ii) net voyage revenues increased by 41.5% from $124.0 million for the year ended December 31, 2018, to $175.5 million for the year ended December 31, 2019.Voyage expenses decreased to $141.8 million from $165.0 million, or 14.1%. The decrease in voyage expenses was primarily due to a decrease in vessel calendar days asdiscussed above.Vessel operating expenses decreased by $14.4 million, or 17.9%, from $80.4 million in 2018 to $66.0 million in 2019. This was primarily due to the decrease in our fleet as discussedabove. In cooperation with our technical managers we maintain our focus on keeping the fleet in top technical condition whilst keeping costs low.No impairment loss on vessels has been recorded in 2019 compared to a loss of $2.2 million recorded for the year ended December 31, 2018.General and administrative expenses increased $0.7 million, or 5.9%, from $12.7 million in 2018 to $13.5 million in 2019.Depreciation expenses increased by $3.3 million, or 5.4%, from $60.7 million in 2018 to $64.0 million in 2019. The increase is primarily due to the full-year effect of the threevessels added to the fleet in the latter part of 2018.Interest expenses increased by $3.8 million, or 11.1%, from $34.5 million in 2018 to $38.4 million in 2019. The increase is mainly due to the full year-effect of the loans associatedwith the three vessels added to the fleet in latter part of 2018 and a non-cash expense of about $1.7 million related to the remaining borrowing cost under the Credit Facility that wasrepaid on February 12, 2019.Other financial expenses decreased by $10.6, or 71.4%, from $14.8 million in 2018 to $4.2 million in 2019 mainly due an expense related to fair value change of $3.2 million forInvestment Securities, offset by the cancellation of the Backstop facility in 2018 and expense of the associated fees of $13.4 million.Please see Item 5. Operating and Financial Review and Prospects H. Critical Accounting Estimates for further information.YEAR ENDED DECEMBER 31, 2018 COMPARED TO YEAR ENDED DECEMBER 31, 2017 Years Ended December 31, All figures in USD '000 2018 2017 Variance Voyage Revenue 289,016 297,141 (2.7%)Voyage Expenses (165,012) (142,465) 15.8%Vessel Operating Expenses (80,411) (87,663) (8.3%)Impairment Loss on Vessels (2,168) (110,480) (98.0%)Impairment Loss on Goodwill - (18,979) N/A Loss from Disposal of Vessels (6,619) - N/A General and Administrative Expenses (12,727) (12,575) 1.2%Depreciation Expenses (60,695) (100,669) (39.7%)Net Operating Loss (38,616) (175,690) (78.0%)Interest Income 334 347 (3.7%)Interest Expenses (34,549) (20,464) 68.8%Other Financial Expenses (14,808) (727) 1,936.9%Equity Loss from Associate (7,667) (8,435) (9.1%)Net (Loss) Income (95,306) (204,969) (53.5%)44Reconciliation of net voyage revenues to voyage revenues: Years Ended December 31, All figures in USD '000, except TCE rate per day 2018 2017 Variance Voyage Revenue 289,016 297,141 (2.7%)Less Voyage expenses (165,012) (142,465) 15.8%Net Voyage Revenue 124,004 154,676 (19.8%)Vessel Calendar Days (1) 9,747 10,892 (10.5%)Less off-hire days 277 867 (68.1%)Total TCE days 9,470 10,025 (5.5%)TCE Rate per day (2) $13,095 $15,428 (15.1%)Total Days for vessel operating expenses 9,747 10,892 (10.5%)(1)Vessel Calendar Days is the total number of days the vessels were in our fleet.(2)Time Charter Equivalent ("TCE") Rate, results from Net Voyage Revenue divided by total TCE days.The change in Voyage revenue is due to two main factors:i)The number of TCE daysii)The change in the TCE rate achieved.With regards to i), the decrease of 590 days in offhire days was a result of reduced planned offhire in relation to drydocking of vessels.The decrease in vessel calendar days is mainly due to the disposal of eight vessels in June and July 2018, offset by three newbuildings delivered in the latter part of 2018.With regards to ii), the TCE rate decreased by $2,333, or 15.1%. The indicative rates presented by Clarksons Shipping decreased by 0.2% for the twelve months of 2018compared to the same twelve months in 2017 to $15,536 from $15,570, respectively. The rates presented by Clarksons Shipping for the year ended December 31, 2018 were significantlyinfluenced by the spike in the Suezmax tanker rates in the fourth quarter of 2018. The year to date average as of November 30, 2018 was $13,123 representing a decrease of 15.7%compared to the year ended December 31, 2017. Our average TCE was also positively impacted by the increased tanker rates towards the end of 2018, but not to the same extent as therates reported by Clarksons Shipping. We expect this spike to materialize to a larger extent in the first quarter of 2019 compared to the rates reported by Clarksons Shipping.As a result of i) and ii) net voyage revenues decreased by 19.8% from $154.7 million for the year ended December 31, 2017, to $124.0 million for the year ended December 31,2018.Voyage expenses increased to $165.0 million from $142.5 million, or 15.8%. The increase in voyage expenses was primarily due to an increase in bunker costs caused by anincrease in fuel oil prices compared to prior year.Vessel operating expenses decreased by $7.2 million, or 8.3%, from $87.7 million in 2017 to $80.4 million in 2018. This was primarily due to the decrease in our fleet as discussedabove. In cooperation with our technical managers we maintain our focus on keeping the fleet in top technical condition whilst keeping costs low.45An impairment loss on vessels of $2.2 million has been recorded for the year ended December 31, 2018 together with a loss on disposal of vessels of $6.6 million compared to animpairment loss of $110.5 million and no loss on disposal of vessels in 2017.General and administrative expenses increased insignificantly by $0.1 million, or 1.2%, from $12.6 million in 2017 to $12.7 million in 2018.Depreciation expenses decreased by $40.0 million, or 39.7%, from $100.7 million in 2017 to $60.7 million in 2018. The decrease is primarily due to the disposal of eight vessels inJune and July 2018 and two vessels in December 2018 in combination with an adjustment of the residual value of the vessels at the end of their useful life from $4.0 million to $8.0 million,offset by the addition of three vessels in the latter part of 2018.Interest expenses increased by $14.0 million, or 68.8%, from $20.5 million in 2017 to $34.5 million in 2018. The increase is due to an increase in the margin paid under the CreditFacility in 2018 compared to 2017 in combination with interest incurred related to the financing arrangement related to the three vessels delivered in 2018.Other financial expenses increased by $14.1 million mainly due to cancellation of the Backstop facility in 2018 and expense of the associated fees of $13.4 million.The equity loss from associate of $7.7 million representing our share of $4.5 million of trading losses from our investment in NAO combined with an impairment loss of $2.6million and a dilution loss of $0.6 million.InflationInflation has had only a moderate effect on our expenses given recent economic conditions. In the event that significant global inflationary pressures appear, these pressureswould increase our operating costs.B.Liquidity and Capital ResourcesWe operate in a cyclical and capital intensive industry and we have historically financed our acquisitions of Suezmax tankers mainly through raising new equity. In addition, wehave on February 12, 2019 replaced our $500 million Credit Facility with the $306 million 2019 Senior Secured Credit Facility using twenty of our vessels as collateral. The three 2018Newbuildings are financed through Ocean Yield ASA.Our Borrowing ActivitiesIn 2012, we entered into a $430 million revolving credit facility, which in 2015 was increased to $500 million, with a syndicate of lenders in order to refinance its existing creditfacility, fund future vessel acquisitions and for general corporate purposes, or the Credit Facility.We had $313.4 million borrowed as of December 31, 2018 under this credit facility. In connection with the expansion of the Credit Facility in 2015, the Company incurred $4.6million in deferred financing costs, which was amortized over the term of the loan and presented net of the outstanding loan balance. The remaining balance as of December 31, 2018 was$1.7 million, which has been expensed as Interest Expenses in 2019, upon the repayment on February 12, 2019, of the then remaining balance of $313.4 million of the Credit Facility.On February 12, 2019 we entered into a new five-year senior secured credit facility for $306.1 million (the “2019 Senior Secured Credit Facility”) that refinanced the outstandingbalance on the Credit Facility as of that date. Borrowings under the 2019 Senior Secured Credit Facility are secured by first priority mortgages over our vessels (excluding the threevessels delivered in 2018, see described below) and assignments of earnings and insurance. The loan is amortizing with a twenty-year maturity profile, carries a floating LIBOR interestrate plus a margin and matures in February 2024. Further, the agreement contains a discretionary excess cash mechanism for the lender that equals 50% of the net earnings from thecollateral vessels, less capex provision and fixed loan amortization. We have incurred $13.0 million (including a non-cash portion of $6.1 million) in financing costs, which is amortizedover the term of the loan and the outstanding loan balance was presented net of the outstanding loan balance. The agreement contains covenants that require a minimum liquidity of$30.0 million and a loan-to-vessel value ratio of maximum 70%. We are free to distribute dividends as long as we comply with the described covenants.46As of December 31, 2019, we had $291.8 million drawn under our 2019 Senior Secured Credit Facility, where $18.7 million has been presented as Current Portion of Long-TermDebt. This includes $3.4 million related to the excess cash flow mechanism payment related to earnings generated in the fourth quarter of 2019 and payable in the first quarter of 2020. Wehave incurred $13.0 million in financing cost, which is amortized over the term of the loan and presented net of the outstanding loan balance. The estimated fair value for the long-termdebt is considered to be approximately equal to the carrying value since it carries a variable interest rate. As of December 31, 2019 and as of the date of this report, the Company is incompliance with the terms of the 2019 Senior Secured Credit Facility.The 2019 Senior Secured Credit Facility is amortizing with a twenty-year maturity profile and we have repaid $14.3 million of the facility in the twelve months ended December 31,2019. Subsequent to December 31, 2019, we made a further repayment of $7.3 million and the outstanding balance as of the date of this report is $284.5 million.Financing of the 2018 Newbuildings:The three 2018 Newbuildings were delivered to us in July, August and October 2018, respectively. Under the terms of the financing agreement, the lender has provided financingof 77.5% of the purchase price for each of the three 2018 Newbuildings and paid the remaining payment obligations to Samsung shipyard that were due upon delivery of the vessels. Netproceeds of $12.5 million received from Ocean Yield ASA was used to pay down the drawn amount on the Credit Facility. Upon delivery of each of the vessels, we entered into ten-yearbareboat charter agreements. We have obligations to purchase the vessels for a consideration of $13.6 million for each vessel upon the completion of the ten-year bareboat charteragreements, and also have the option to purchase the vessels after sixty and eighty-four months. The financing agreements for the three vessels have a total effective interest rateranging from 6.50% to 6.72% including a floating LIBOR element that is subject to annual adjustment. The financing agreement contains certain financial covenants requiring us to on aconsolidated basis to maintain a minimum value adjusted equity of $175.0 million and ratio of 25%, minimum liquidity of $20.0 million; and a minimum vessel value to outstanding leaseclause.The outstanding amount under this financing arrangement was $119.9 million and $127.1 million as of December 31, 2019 and 2018, respectively, where $7.6 and $7.3 million hasbeen presented as Current Portion of Long-Term Debt, respectively. The Company has incurred $2.3 million in financing cost, which is amortized over the term of the financingarrangement and presented net of the outstanding loan balance.Liquidity Outlook:Cash and cash equivalents was $48.8 million and $49.3 million as of December 31, 2019 and December 31, 2018, respectively.On a regular basis, we perform cash flow projections to evaluate whether we will be in a position to cover our liquidity needs for the next 12-month period and the compliancewith financial and security ratios under our existing and future financing agreements. In developing estimates of future cash flows, we make assumptions about the vessels’ futureperformance, market rates, operating expenses, capital expenditure, fleet utilization, general and administrative expenses, loan repayments and interest charges. The assumptions appliedare based on historical experience and future expectations.On March 29, 2019, we entered into an equity distribution agreement with B. Riley FBR, Inc., acting as a sales agent, under which we may, from time to time, offer and sell sharesof our common through an ATM program having an aggregate offering price of up to $40,000,000. As of December 31, 2019, we had raised gross and net proceeds (after deducting salescommissions and other fees and expenses) under the ATM of $18.6 million and $17.9 million, respectively, by issuing and selling 5,260,968 common shares. Since December 31, 2019, nofurther sales have been completed under the ATM program.47We believe that our current cash and cash equivalents and cash expected to be generated from operations, together with the measures described above, are sufficient to meetour working capital needs and other liquidity requirements for the next 12 months from the date of this report.Cash FlowsYEAR ENDED DECEMBER 31, 2019, COMPARED TO YEAR ENDED DECEMBER 31, 2018Cash flows (used in) / provided by operating activities increased to $52.9 million for the year ended December 31, 2019, from ($16.1) million for the year ended December 31, 2018.The change in cash flows provided by operating activities is primarily due to increases in market rates achieved in 2019 compared to 2018 combined with a positive change in workingcapital from voyage related activities, offset by the settlement of the Deferred Executive Pension plan.Cash flows (used in) / provided by investing activities decreased to ($2.3) million for the year ended December 31, 2019, compared to $85.0 million for the year ended December31, 2018. The decrease of cash flows (used in) / provided by investing activities is primarily due the Company disposing of ten vessels in 2018 compared to none in 2019.Cash flows used in financing activities decreased to ($38.3) million for the year ended December 31, 2019, compared to cash flow used in financing activities of ($78.0) million forthe year ended December 31, 2018. The decrease is primarily due to repayment of the Credit Facility by $313.4 million in 2019 compared to $78.2 million in 2018, offset by proceeds fromthe 2019 Senior Secured Credit Facility by $300.0 million and an increase of $14.3 million for repayment of the 2019 Senior Secured Credit Facility in 2019 and an increase in distributeddividends from $9.9 million in 2018 compared to $14.3 million in 2019, offset by issuance of common stock in 2019 with net proceeds of $17.9 million.The cash and cash equivalents was $48.8 million as of December 31, 2019.For further information on contractual obligations please see Item 5. Operating and Financial Review and Prospects F. Tabular Disclosure of Contractual Obligations.C.Research and Development, Patents and Licenses, Etc.Not applicable.D.Trend InformationThe oil tanker industry has been highly cyclical, experiencing volatility in charter hire rates and vessel values resulting from changes in the supply of and demand for crude oiland tanker capacity. See Item 4. Information on the Company B. Business Overview –The International Tanker Market.E.Off Balance Sheet ArrangementsAs of December 31, 2019, we do not have any off-balance sheet arrangements.F.Tabular Disclosure of Contractual ObligationsThe Company’s contractual obligations as of December 31, 2019, consist of our obligations as borrower under our 2019 Senior Secured Credit Facility, our obligations related tofinancing of our three 2018 Newbuildings.48The following table sets out financial, commercial and other obligations outstanding as of December 31, 2019.Contractual Obligations in $’000s Total Less than 1 year 1-3 years 3-5 years More than 5years Senior Secured Credit Facility (1)* 291,798 18,749 30,610 242,439 - Interest Payments (2) 82,255 21,690 39,624 20,941 - Financing of 2018 Newbuildings (3) 119,867 7,630 16,287 17,849 78,101 Interest Payments 2018 Newbuildings (4) 47,517 7,674 13,739 11,526 14,578 Operating Lease Liabilities (5) 1,937 500 638 587 212 Total 543,374 56,243 100,898 293,342 92,891 Notes:(1)Refers to obligation to repay indebtedness outstanding as of December 31, 2019.(2)Refers to estimated interest payments over the term of the indebtedness outstanding as of December 31, 2019. Estimate based on applicable interest rate and drawn amountas of December 31, 2019.(3)Refers to obligation to repay indebtedness outstanding as of December 31, 2019 for three 2018 Newbuildings.(4)Refers to estimated interest payments over the term of the indebtedness outstanding as of December 31, 2019. Estimate based on applicable interest as of December 31, 2019for the financing of the three 2018 Newbuildings.(5)Refers to the future obligation as of December 31, 2019 to pay for operating lease liabilities at nominal values.*The new five-year senior secured credit facility for $306.1 million is amortizing with a twenty-year maturity profile, carries a floating LIBOR interest rate plus a margin andmatures in February 2024. Further, the agreement contains a discretionary excess cash amortization mechanism for the lender that equals 50% of the net earnings from the collateralvessels, less capex provision and fixed amortization.G.Safe HarborSee “Cautionary Statement Regarding Forward Looking Statements” at the beginning of this annual report.H.Critical Accounting EstimatesWe prepare our financial statements in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. On a regular basis, management reviewsthe accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However,because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. For adescription of our material accounting policies, please read Item 18. Financial Statements Note 2 - Summary of Significant Accounting Policies.Revenues and voyage expensesWe adopted ASC 606 Revenue from Contracts with Customers with effect from January 1, 2018, applying the modified retrospective method. The change in the revenueguidance has affected the timing of recognition of revenue from spot charters, as we have changed recognition of revenue from a discharge-to-discharge basis to a load-to-dischargebasis. Revenue is therefore recognized on a pro-rata basis commencing on the date that the cargo is loaded and concluded on the date of discharge of the cargo.49The financial year ended December 31, 2019 is comparative with the financial year ended December 31, 2018, as the new revenue standard is applied consistently for bothfinancial years. The financial year ended December 31, 2017 is presented under the previous revenue recognition standard. On December 31, 2017 we had 19 vessels affected by thechange in the revenue recognition standard that resulted in an adjustment to increase our opening balance of accumulated deficit as of January 1, 2018 of $4.1 million. As of December31, 2018, we had 15 vessels that were impacted by the new revenue recognition policy with an equivalent net increase of $6.3 million on accumulated deficit.Revenues and voyage expenses are recognized on an accruals basis over the duration of each spot charter.For vessels operating on spot charters, voyage revenues are recognized ratably over the estimated length of each voyage, calculated on a load-to-discharge basis under ASC606 and, therefore, are allocated between reporting periods based on the relative transit time in each period. In 2017, before the adoption of Topic 606 on January 1, 2018, the Companyrecognized voyage revenues ratably over the estimated length of each voyage on a discharge-to-discharge basis. Voyage expenses are capitalized between the discharge port ofprevious cargo, or contract date if later, and the load port of the cargo to be chartered if they qualify as fulfillment costs. Incremental cost to obtain a contract is capitalized and amortizedratably over the estimated length of each voyage, calculated on a load-to-discharge basis. The impact of recognizing voyage expenses ratably over the length of each voyage is notmaterially different on a quarterly and annual basis from a method of recognizing such costs when incurred. Expected losses that are deemed probable on voyages are provided for in fullat the time such losses can be estimated. We do not capitalize fulfilment cost or recognize revenue when a charter has not been contractually committed to by a customer.Vessel ImpairmentThe carrying values of the Company’s vessels may not represent their fair value at any point in time since the market prices of secondhand vessels tend to fluctuate withchanges in charter rates and the cost of newbuildings. Historically, both charter rates and vessel values tend to be cyclical. Our vessels are evaluated for possible impairment wheneverevents or changes in circumstances indicate that the carrying amount of a vessel may not be recoverable. If the estimated undiscounted future cash flows expected from the commercialuse of the vessel and its eventual sale is less than the carrying amount of the vessel, the vessel is deemed to be impaired. Impairment charges is assessed and recognized on anindividual vessel by vessel basis. Under this approach we identified impairment charges on vessels for the year ended December 31, 2019, December 31, 2018, December 31, 2017 of zero,$2.2 million and $110.5 million, respectively. The amount of the impairment is measured as the difference between the carrying value and the estimated fair value of the vessel. Thisassessment is made at the individual vessel level as information about separately identifiable cash flows for each vessel is available.In developing estimates of future undiscounted cash flows, we make assumptions and estimates about the vessels’ future performance, with the significant assumptions beingrelated to charter rates, fleet utilization, operating expenses, capital expenditures/periodical maintenance, residual value and the estimated remaining useful life of each vessel.The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends as well as future expectations. The estimated net operatingrevenues are determined by considering an estimated daily time charter equivalent for the remaining operating days over the useful life of the vessel. The daily time charter equivalentrates are converted to annual forecasted revenues by multiplying the daily rate by the number of days in the year less days for expected off-hire and dry-docking. Although theCompany believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are subjective. There can be no assurance as to howlong charter rates and vessel values will remain at their currently low levels or whether they will improve by any significant degree.The estimated daily time charter equivalents applied are based on an average of several broker estimates for the first two years of the analysis. For the remaining period fromyear 3 and to the end of the useful life of each vessel, we have applied a daily time charter equivalent equaling the fifteen-year historical average spot market rate for similar vessels. Thebroker estimates applied in year one and two are considered a more precise forecast as it captures the shorter-term expected market development of our business. The broker estimatesare normally not available for a period exceeding two years. For year 3 and beyond, we believe that the 15-year historical company-specific average is a reasonable proxy for our expectedcash flows as this average is most likely to encompass the charter rate cycles that our vessels will experience.50When we calculate the expected undiscounted net cash flows for the vessels, we deduct operating expenses and expected cost of dry-docking and other expected capitalexpenditures from the operating revenues before adding an estimated scrap value of the vessel at the end of its useful life. The operating expenses applied are based on the forecastedoperating cost for the vessels, which is adjusted in subsequent periods for expected growth. We have applied a compounded growth factor to the operating expenses, which iscalculated based on the average increase in our operating expenses over the last fifteen years. Estimated cash outflows for dry-docking are based on historical and forecastedexpenditure. Vessel utilization is based on historical average levels achieved. The scrap value applied is assessed to be $8.0 million per vessel based on market price of scrap per tonmultiplied by lightweight tonnage of the vessel, less estimated cost associated with scrapping the vessel. All vessels are maintained for and assumed to have a useful life of 25 years.For the vessels in our fleet we have in the table below indicated the following: (1) freight rates applied in our vessel impairment assessment; (2) the break-even rate, if appliedfrom year 1 to the end of the useful life for each vessel, indicates the rate at which undiscounted cash flow do not exceed the book value for the first vessel in our fleet and (3) achievedrates, which represents the five and ten-year average freight rates achieved by the Company. Rates used (1) Break even rate(2) Achieved Rates (3) ($ per day) First year Second year Thereafter 2019 2015 -2019 2010-2019 NAT fleet 37,154 29,965 26,739 22,485 22,990 19,796 If the five or ten-year average historical rates described under “Achieved Rates” had been used in the cash flow forecast instead of the rates used from year three and onwards,carrying value would exceed the total undiscounted cash flows for nil and nil of our vessels, respectively.The Total Fleet – Comparison of Carrying Value versus Market Value: During the past five years, the market values of vessels have experienced particular volatility, withsubstantial declines for many vessel classes. During 2019, our fleet of Suezmax vessels has experienced a positive valuation curve with values at the end of 2019 above the valuationsreceived at the end of 2018. According to Clarksons Ltd. 139 Suezmax tankers were sold and bought in total between 2015 and 2019, however such transactions may not be vessels aswell maintained as the vessels in our fleet. We believe that our fleet should be valued as a transportation system as it is not meaningful under our strategy to assess the value of eachindividual vessel.Factors and conditions which could impact our estimates of future cash flows of our vessels include:•Declines in prevailing market charter rates;•Changes in behaviors and attitudes of our charterers towards actual and preferred technical, operational and environmental standards; and•Changes in regulations over the requirements for the technical and environmental capabilities of our vessels.Our estimates of market value assume that our vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified in class withoutnotations of any kind, and are held for use. Most oil companies require CAP 2 notation or better. All relevant vessels in our fleet have CAP1 notation for Hull, as well as Machinery &Cargo. CAP is an abbreviation for Condition Assessment Program. The quality of the NAT fleet is at the top as evidenced by our vetting statistics, that is, inspections of our ships byclients. In such vetting processes safety for our crew, the environment and our assets are main considerations.Our estimates are based on the estimated market values for our vessels that we have received from shipbrokers and these are inherently uncertain. The market value of a vesselas determined by shipbrokers could be an arbitrary assessment giving an estimate of a value for a transaction that has not taken place. In Management’s view the valuation of theCompany on the NYSE should not be based upon net asset value (NAV), a measure that only is linked to the steel value of our ships. We have our own ongoing system value with alarge and homogenous fleet allowing us to offer our transportation services to our clients across the globe.51Vessel BuiltDeadweight TonsDelivered to NAT Carrying Value $(millions) Dec 31,2019 Carrying Value$ (millions)Dec 31, 2018 Nordic Freedom*2005159,331 2005 36.2 39.3 Nordic Apollo*2003159,998 2006 36.6 40.4 Nordic Moon*2002160,305 2006 34.8 37.4 Nordic Cosmos*2003159,999 2006 37.2 39.7 Nordic Grace*2002149,921 2009 26.9 30.0 Nordic Mistral*2002164,236 2009 26.8 29.6 Nordic Passat*2002164,274 2010 28.6 32.0 Nordic Vega*2010163,940 2010 59.9 63.4 Nordic Breeze*2011158,597 2011 47.1 49.6 Nordic Zenith*2011158,645 2011 47.5 50.0 Nordic Sprinter*2005159,089 2014 26.1 28.2 Nordic Skier*2005159,089 2014 26.4 28.8 Nordic Light*2010158,475 2015 47.8 50.9 Nordic Cross*2010158,475 2015 51.3 50.9 Nordic Luna*2004150,037 2016 24.6 24.8 Nordic Castor*2004150,249 2016 23.7 24.5 Nordic Sirius2000150,183 2016 14.7 16.6 Nordic Pollux*2003150,103 2016 21.1 23.2 Nordic Star2016159,000 2016 57.8 60.3 Nordic Space2017159,000 2017 59.5 62.2 Nordic Aquarius2018159,000 2018 54.5 56.6 Nordic Cygnus2018159,000 2018 55.0 57.2 Nordic Tellus2018159,000 2018 55.9 57.9 * The carrying value of our vessels as of December 31, 2019 is $900.0 million. We have obtained broker estimates from two independent shipbrokers indicating a fair market value of ourfleet on a charter free basis to be $788.9 million, based on an average of the two estimates including the inherent uncertainty in such estimates. Each vessel marked with an asterisk has afair market value that is lower than the carrying value. The total carrying value based on the above is consequently exceeding the fair value of the vessels by approximately $111.1 millionas of December 31, 2019. We have in our vessel impairment analysis estimated future undiscounted cash flows generated by the vessels over their estimated useful life that exceed theircarrying values as of December 31, 2019.VesselsThe useful lives of our vessels are principally dependent on the technical condition of our vessels. Vessels are stated at their historical cost and the estimated useful life of avessel is 25 years from the date the vessel is delivered from the shipyard. Certain subsequent expenditures for major improvements are also capitalized if it is determined that theyappreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessel and depreciated over the remaining useful life of the vessel.Depreciation is calculated based on cost less estimated residual value using the straight-line method. The residual value is estimated by management and reviewed annually,where the market price of scrap per ton is considered when evaluating this.52DrydockingThe Company’s vessels are required to be drydocked approximately every 30 to 60 months. Vessels exceeding 15 years are subject to periodical maintenance surveys every 30months, whereas vessels under 15 years of age are subject to survey intervals every 60 months. The Company capitalizes a substantial portion of the costs incurred during drydockingand amortizes those costs on a straight-line basis from the completion of a drydocking or intermediate survey to the estimated completion of the next drydocking. Drydocking costsinclude a variety of costs incurred while vessels are placed within drydock, including direct expenses incurred related to the in preparation for docking and port expenses at the drydockshipyard, general shipyard expenses, expenses related to hull, external surfaces and decks, expenses related to machinery and engines of the vessel, as well as expenses related to thetesting and correction of findings related to safety equipment on board. Consistent with prior periods, the Company includes in capitalized drydocking those costs incurred as part ofthe drydock to meet classification and regulatory requirements. The Company expenses costs related to routine repairs and maintenance performed during drydocking, and for annualclass survey costs. Ballast tank improvements are capitalized and amortized on a straight-line basis over a period of eight years. The capitalized and unamortized drydocking costs areincluded in the book value of the vessels. Amortization expense of the drydocking costs is included in depreciation expense.If we change our estimate of the next drydock date, we will adjust our annual amortization of drydocking expenditures accordingly.ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEESA.Directors and Senior ManagementSet forth below are the names and positions of our directors of the Company and senior management of the Company. The directors of the Company are elected annually, andeach elected director holds office until a successor is elected. Officers are elected from time to time by vote of the Board and holds office until a successor is elected.The CompanyNameAgePositionHerbjørn Hansson72Chairman, Chief Executive Officer, President and DirectorDavid Workman58DirectorRichard H. K. Vietor74DirectorAlexander Hansson38DirectorJim Kelly66Vice Chairman, Director and Audit Committee MemberBjørn Giaever52Chief Financial OfficerCertain biographical information with respect to each director and senior management of the Company listed above is set forth below. On March 6, 2020, Andreas Ove Ugland,a director and Vice Chairman of the Company and our Audit Committee Chairman, passed. Mr. Ugland had been a valued member of our Board of Directors since 1997.Herbjørn Hansson earned his M.B.A. at the Norwegian School of Economics and Business Administration and attended Harvard Business School. In 1974 he was employed bythe Norwegian Shipowners’ Association. In the period from 1975 to 1980, he was Chief Economist and Research Manager of INTERTANKO, an industry association whose memberscontrol about 70% of the world’s independently owned tanker fleet, excluding state owned and oil company fleets. During the 1980s, he was Chief Financial Officer of Kosmos/AndersJahre, at the time one of the largest Norwegian based shipping and industry groups. In 1989, Mr. Hansson founded Ugland Nordic Shipping AS, or UNS, which became one of theworld’s largest owners of specialized shuttle tankers. He served as Chairman in the first phase and as Chief Executive Officer as from 1993 to 2001 when UNS, under his management, wassold to Teekay Shipping Corporation, or Teekay, for an enterprise value of $780.0 million. He continued to work with Teekay, and reached the position of Vice Chairman of Teekay NorwayAS, until he started working full-time for the Company on September 1, 2004. Mr. Hansson is the founder and has been Chairman and Chief Executive Officer of the Company since itsestablishment in 1995. He also has been a member of various governing bodies of companies within shipping, insurance, banking, manufacturing, national/international shippingagencies including classification societies and protection and indemnity associations. Mr. Hansson is fluent in Norwegian and English, and has a command of German and French forconversational purposes.53David Workman has been a director of the Company since November 2019. Mr. Workman has served as Hermitage Offshore Services Ltd.’s Class A Director since December2013. Mr. Workman was Chief Operating Officer and member of the Supervisory Board of Stork Technical Services, or STS, guided, as Chief Executive Officer, the sale of the RBGOffshore Services Group into the STS group in 2011. Mr. Workman has 30 years of broad experience in the offshore sector ranging from drilling operations/field development throughproduction operations and project management. He has worked with a wide variety of exploration and production companies in the sector and has balanced this with exposure to theservice sector, working with management companies. As part of his experience with these different companies, he has had extensive exposure to the North Sea market. Mr. Workmangraduated from Imperial College London in 1983 with a Masters in Petroleum Engineering and spent his early years as a Drilling/Production Operations Engineer with BP. In 1987 hejoined Hamilton Brothers Oil and Gas who were early adopters of floating production systems. In 1993 he joined Kerr McGee as an operations manager for the Tentech 850 designedGryphon FPSO, the first permanently moored FPSO in the North Sea. In 1996, Mr. Workman established the service company Atlantic Floating Production, which went on to become themanagement contractor and duty holder on the John Fredriksen owned Northern Producer and on the Petroleum Geo-Services (PGS) owned Banff FPF. In 2003, Mr. Workman wasinstrumental in founding Tuscan Energy which went on to redevelop the abandoned Argyll Field in the UK Continental Shelf. In 2009, Mr. Workman was appointed as Chief ExecutiveOfficer of STS in 2011.Richard H. K. Vietor has been a director of the Company since July 2007. Mr. Vietor is the Paul Whiton Cherrington Professor of Business Administration where he teachescourses on the regulation of business and the international political economy. He was appointed Professor in 1984. Before coming to Harvard Business School in 1978, Professor Vietorheld faculty appointments at Virginia Polytechnic Institute and the University of Missouri. He received a B.A. in economics from Union College in 1967, an M.A. in history from HofstraUniversity in 1971, and a Ph.D. from the University of Pittsburgh in 1975.Alexander Hansson has been a director of the Company since November 2019. Mr. Hansson is an investor in various markets globally and has made several successfulinvestments in both listed and privately held companies. Mr. Hansson is the son of the Company’s Chairman and Chief Executive Officer and he has built a network over the last 20 yearsin the shipping and finance sector. He has operated shipping and trading offices in London and Monaco. He studied at EBS Regents College in London, United Kingdom.Jim Kelly has been a director of the Company since June 2010. Mr. Kelly has worked for Time Inc., the world’s largest magazine publisher, since 1978. He served as ForeignEditor during the fall of the Soviet Union and the first Gulf War, and was named Deputy Managing Editor in 1996. In 2001, Mr. Kelly became the magazine’s managing editor, and duringhis tenure the magazine won a record four National Magazine awards. In 2004, Time Magazine received its first EMMA for its contribution to the ABC News Series “Iraq: Where ThingsStand.” In late 2006, Mr. Kelly became the managing editor of all of Time Inc., helping supervise the work of more than 2,000 journalists working at 125 titles, including Fortune, Money,Sports Illustrated and People. Since 2009, Mr. Kelly has worked as a consultant at Bloomberg LP and taught at Princeton and Columbia Universities. Jim Kelly was elected as member ofour Audit Committee in February 2012. Mr. Kelly was appointed as the Chairman of the Audit Committee upon the passing of Mr. Ugland.Bjørn Giaever joined the Company as Chief Financial Officer and Secretary on October 16, 2017. Mr. Giaever has over 20 years of experience in the shipping & offshoreindustry, holding key roles in corporate finance and equity research. He joined the Company from Fearnley Securities AS, where he served as partner and director in the CorporateFinance division. From 2006 to 2010, Mr. Giaever served as a senior corporate advisor in the John Fredriksen group in London. In addition, Mr. Giaever has been a top rated ShippingAnalyst at DNB Markets and partner at Inge Steensland AS, specializing in gas and maritime matters. Mr. Giaever holds a BSc in business and economics.54B.Compensation2011 Equity Incentive PlanIn 2011, the Board of Directors approved an incentive plan under which 400,000 common shares were reserved for issuance and were allocated among 23 persons employed inthe management of the Company and the members of the Board of Directors. Of those 400,000 common shares, 326,000 and 74,000 had a five year and four year trade restriction,respectively, and the shares are forfeited if the grantee discontinues working for the Company before such time. The holders of the restricted shares are entitled to voting rights as wellas receive dividends paid during the vesting period. Our Board of Directors considers this arrangement to be in the best interests of the Company.In December 2015, we amended and restated the 2011 Equity Incentive Plan to reserve an additional 137,665 common shares for issuance to persons employed in themanagement of the Company and members of the Board of Directors under the same terms as the original plan. All 137,665 common shares reserved under the Amended and Restated2011 Equity Incentive Plan were issued to 30 employees in 2016.In 2019 and 2018, employees forfeited 20,000 and zero, respectively, upon their resignations. No distributions have been done in 2019. The Company holds 42,000 treasuryshares as of December 31, 2019. As of December 31, 2019, a total number of 97,165 common shares have been allocated. The trading restrictions for the majority of these common sharesexpire in January 2020.In October 2019, we amended and restated the 2011 Equity Incentive Plan to reserve an additional 1,000,000 stock options for issuance to persons employed in the managementof the Company and members of the Board of Directors under the same terms as the original plan. On October 28, 2019, the Company granted 755,000 and 234,000 stock options withvesting over a period of two and three years, respectively, and an exercise price of $4.70 per share.A copy of the Amended and Restated 2011 Equity Incentive Plan is filed as Exhibit 4.11 to this annual report.Compensation of DirectorsThe six directors received, in the aggregate, $311,000 in cash fees for their services as directors for the year ended December 31, 2019. The Vice Chairman of the Board ofDirectors received an additional annual cash compensation of $10,000 in 2019. The members of the Audit Committee receive an additional annual cash retainer of $12,000 each per year.The Chairman of the Audit Committee receives an additional annual cash compensation of $18,000 per year. We do not pay director fees to the Chairman, President and Chief ExecutiveOfficer. We do, however, reimburse all of our directors for all reasonable expenses incurred by them in connection with their services as members of our Board of Directors.Executive Pension PlanOur Chairman, President and Chief Executive Officer had an individual deferred compensation agreement. The parties have entered into a settlement agreement in December2019 providing for a payment of $11.0 million as compensation for terminating the Executive Pension Plan. The Chief Executive Officer has served in his present position since theinception of the Company in 1995. Please see Note 7 to the audited financial statements for further information about the agreement including information related to the settlement of thedeferred compensation agreement for our former Chief Financial Officer. Our current Chief Financial Officer has a regular contribution pension plan in line with the Company’s policy foremployees.Employment AgreementsAs of December 31, 2019, we have employment agreements with Herbjørn Hansson, our Chairman, President & Chief Executive Officer, Bjørn Giaever, our CFO, and AlexanderHansson, our Board member. The aggregate compensation of our executive officers during the twelve months ended December 31, 2019 was approximately $3.6 million. Our Chairman,President & Chief Executive Officer does not receive any additional compensation for his services as a director or Chairman of the Board and under certain circumstances theemployment agreement may be terminated by our Chairman, President & Chief Executive Officer or the Company upon six months’ written notice to the other party.55C.Board PracticesThe members of our Board of Directors serve until the next annual general meeting following his or her election. The members of our current Board of Directors were elected atthe annual general meeting held in 2018. Our Board of Directors has established an Audit Committee, consisting of a single independent director, Mr. Kelly. Mr. Kelly serves as the auditcommittee financial expert. The members of the Audit Committee received during 2019, additional remuneration of $30,000 in aggregate for serving on the Audit Committee. The AuditCommittee provides assistance to our Board of Directors in fulfilling their responsibility to shareholders, and investment community relating to corporate accounting, reporting practicesof the Company, and the quality and integrity of the financial reports of the Company. The Audit Committee, among other duties, recommends to the Board of Directors the independentauditors to be selected to audit our financial statements; meets with the independent auditors and our financial management to review the scope of the proposed audit for the currentyear and the audit procedures to be utilized; reviews with the independent auditors, and financial and accounting personnel, the adequacy and effectiveness of the accounting andfinancial controls of the Company; and reviews the financial statements contained in the annual report to shareholders with management and the independent auditors.Pursuant to an exemption for foreign private issuers, we are not required to comply with many of the corporate governance requirements of the NYSE that are applicable to U.S.listed companies. For more information, please see Item 16G. Corporate Governance.There are no contracts between us and any of our directors providing for benefits upon termination of their employment.D.EmployeesAs of December 31, 2019, the Company had a total of 20 full time employees.E.Share OwnershipWith respect to the total amount of common shares owned by all of our officers and directors individually and as a group, please see Item 7. Major Shareholders and RelatedParty Transactions.ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONSA.Major ShareholdersThe following table sets forth information regarding beneficial ownership of our common shares for (i) owners of more than five percent of our common shares and (ii) ourdirectors and officers, of which we are aware of the date of this annual report.Title Identity of Person No. of Shares Percent of Class(1) Common Hansson family(2) 4,380,659 2.98% Jim Kelly * Richard Vietor * David Workman * Bjørn Giæver * (1) Based on 147,230,634 common shares outstanding as of the date of this annual report.(2) The holdings of High Seas AS, which are for the economic interest of members of the Hansson family, as well as the personal holdings of our Chief Executive Officer and Chairman,Mr. Herbjorn Hansson, and our director, Alexander Hansson, are included in the amount reported herein.* Less than 1% of our common outstanding shares.56As of April 14, 2020, we had 575 holders of record in the United States, including Cede & Co., which is the Depositary Trust Company’s nominee for holding shares on behalf ofbrokerage firms, as a single holder of record. We had a total of 147,230,634 Common Shares outstanding as of the date of this annual report.B.Related Party TransactionsBoard Members and Employees:Mr. Jan Erik Langangen, a former member of our Board of Directors and an advisor of the Company, is a partner of Langangen & Helset Advokatfirma AS, a firm which provideslegal services to us. We recognized $0.1 million in costs for the year ended December 31, 2019, $0.1 million in costs for the year ended December 31, 2018 and $0.7 million for the yearended December 31, 2017, for the services provided by Langangen & Helset Advokatfirma AS. These costs are included in “General and Administrative Expenses” within the Statementsof Operations contained herein. No amounts were due to the related party as of December 31, 2019, 2018 or 2017.In 2014, we entered into an agreement with a company owned by a Board member for the use of an asset for corporate and marketing activities. We paid a fixed annual fee andfees associated with actual use. This agreement was terminated in 2017. In 2019, 2018 and 2017, use of the asset was paid for upon utilization and we recognized $0.3 million, $0.4 millionand $0.2 million, respectively. No amounts were due to the related party as of December 31, 2019, 2018, 2017 related to use of the asset. As of December 31, 2019, we have a receivable of$0.3 million related to prepayments to our Chairman.On January 8, 2016, a total number of 137,665 common shares, reserved for issuance under the Amended and Restated 2011 Equity Incentive Plan and that are subject to traderestrictions, were allocated to 30 persons employed in our Company and to members of the Board of Directors. We granted zero common shares to employees in 2019 and as of December31, 2019, a total of 92,165 common shares are outstanding under the Amended and Restated 2011 Equity Incentive Plan.On December 13, 2017, we issued 40,000,000 common shares at $2.75 per share in an underwritten registered follow-on offering. At our request, the underwriters reserved forsale an aggregate of 449,817 common shares to all of the members of the Company’s board of directors, management, and advisors at the public offering price.During 2017, our Chairman and Chief Executive Officer purchased approximately 870,000 of our common shares. This includes the 363,636 shares purchased in the offeringcompleted on December 13, 2017, discussed above.Hermitage Offshore Services Ltd (formerly Nordic American Offshore Ltd):Hermitage Offshore Services Ltd. (“HOS”) (formerly known as Nordic American Offshore Ltd.) was established in 2013 and operates ten platform supply vessels, eleven crewboats and two anchor handling vessels. HOS is listed on the New York Stock Exchange under the ticker “PSV”.On December 11, 2018, HOS entered into a share purchase agreement with Scorpio Offshore Investments Inc., a closely held company owned and controlled by the Lolli-Ghettifamily, pursuant to which Scorpio has invested $5.0 million in a private placement of HOS’s common shares at a price of $0.42 per share. Following this transaction, we owned 13.55% ofthe outstanding common shares of HOS.We have sold 187,815 shares in HOS during the year ended December 31, 2019 and held 811,538 shares as of December 31, 2019 equaling about 3.2% of the outstanding commonshares in HOS as of December 31, 2019. The reduction in ownership is a result of non-participation in several equity offerings in HOS during 2019 together with the abovementioned saleof shares, and HOS is no longer considered to be a related party of us.The management agreement that we had for the provision of administrative services to HOS was terminated as of June 30, 2019 and ended on October 31, 2019.57As of the date of this annual report our Chairman, President and CEO with immediate family does not own any of the outstanding common shares in HOS.C.Interests of Experts and CounselNot applicable.ITEM 8.FINANCIAL INFORMATIONA.Consolidated Statements and other Financial InformationSee Item 18.Legal ProceedingsTo our knowledge, we are not currently a party to any lawsuit that, if adversely determined, would have a material adverse effect on our financial position, results of operationsor liquidity. As such, we do not believe that pending legal proceedings, taken as a whole, should have any significant impact on our financial statements. From time to time in the futurewe may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. While we expect that these claims wouldbe covered by our existing insurance policies, those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. We have not beeninvolved in any legal proceedings which may have, or have had, a significant effect on our financial position, results of operations or liquidity, nor are we aware of any proceedings thatare pending or threatened which may have a significant effect on our financial position, results of operations or liquidity.Dividend PolicyOur policy is to declare quarterly dividends to shareholders as decided by the Board of Directors. The dividend to shareholders could be higher than the operating cash flow orthe dividend to shareholders could be lower than the operating cash flow after reserves as the Board of Directors may from time to time determine are required, taking into accountcontingent liabilities, the terms of our borrowing agreements, our other cash needs and the requirements of Bermuda law.Total dividends distributed in 2019 totaled $14.3 million or $0.10 per share. The quarterly dividend payments per share over the last 5 years have been as follows:Period 2019 2018 2017 2016 2015 1st Quarter $0.04 $0.03 $0.20 $0.43 $0.22 2nd Quarter $0.03 $0.01 $0.20 $0.43 $0.38 3rd Quarter $0.01 $0.02 $0.15* $0.25 $0.40 4th Quarter $0.02 $0.01 $0.03 $0.26 $0.38 Total $0.10 $0.07 $0.58 $1.37 $1.38 * Includes $0.05 per share distributed as dividend-in-kind.The Company declared a dividend of $0.07 per share in respect of the fourth quarter of 2019, which was paid to shareholders on March 16, 2020.B.Significant ChangesNot applicable.58ITEM 9.THE OFFER AND LISTINGNot applicable except for Item 9.A.4. and Item 9.C.Share History and MarketsSince November 16, 2004, the primary trading market for our common shares has been the NYSE on which our shares are listed under the symbol “NAT.”ITEM 10.ADDITIONAL INFORMATIONA.Share CapitalNot applicable.B.Memorandum and Articles of AssociationMemorandum of Association and Bye-LawsThe following description of our share capital summarizes the material terms of our Memorandum of Association and our bye-laws.Under our Memorandum of Association, as amended, our authorized capital consists of 360,000,000 common shares having a par value of $0.01 per share.The purposes and powers of the Company include the entering into of any guarantee, contract, indemnity or suretyship and to assure, support, secure, with or without theconsideration or benefit, the performance of any obligations of any person or persons; and the borrowing and raising of money in any currency or currencies to secure or discharge anydebt or obligation in any manner.Our bye-laws provide that our Board of Directors shall convene and the Company shall hold annual general meetings of shareholders in accordance with the requirements ofthe Companies Act at such times and places as the Board shall decide. However, under Bermuda law, a company may by resolution in general meeting, elect to dispense with the holdingof an annual general meeting for (a) the year in which it is made and any subsequent year or years; (b) for a specified number of years; or (c) indefinitely. Our Board of Directors may callspecial general meetings of shareholders at its discretion or as required by the Companies Act. Under the Companies Act, holders of one-tenth of our issued common shares may callspecial general meetings.Under our bye-laws, five days advance notice of an annual general meeting or any special general meeting must be given to each shareholder entitled to vote at that meetingunless, in the case of an annual general meeting, a shorter notice period for such meeting is agreed to by all of the shareholders entitled to vote thereat and, in the case of any othermeeting, a shorter notice period for such meeting is agreed to by at least 75% of the shareholders entitled to vote thereat. Under Bermuda law, accidental failure to give notice will notinvalidate proceedings at a meeting. Our Board of Directors may set a record date for the purpose of identifying the persons entitled to receive notice of and vote at a meeting ofshareholders at any time before or after the date on which such notice is dispatched.Our Board of Directors must consist of at least three and no more than 11 directors, or such number in excess thereof as the Board of Directors may from time to time determineby resolution. Our directors are not required to retire because of their age, and our directors are not required to be holders of our common shares. Directors serve for one-year terms, andshall serve until re-elected or until their successors are appointed at the next annual general meeting. Casual vacancies on our Board of Directors may be filled by a majority vote of thethen-current directors.59Any director retiring at an annual general meeting will be eligible for reappointment and will retain office until the close of the meeting at which such director retires or (if earlier)until a resolution is passed at that meeting not to fill the vacancy or the resolution to re-appoint such director is put to a vote at the meeting and is lost. If a director’s seat is not filled atthe annual general meeting at which he or she retires, such director shall be deemed to have been reappointed unless it is resolved by the shareholders not to fill the vacancy or aresolution for the reappointment of the director is voted upon and lost. No person other than a director retiring shall be appointed a director at any general meeting unless (i) he or she isrecommended by the Board of Directors or (ii) a notice executed by a shareholder (not being the person to be proposed) has been received by our secretary no less than 120 days and nomore than 150 days prior to the date our proxy statement is released to shareholders in connection with the prior year’s annual general meeting declaring the intention to propose anindividual for the vacant directorship position.A director may at any time summon a meeting of the Board of Directors. The quorum necessary for the transaction of business at a meeting of the Board of Directors may befixed by the Board of Directors and, unless so fixed at any other number, shall be two directors. Questions arising at any meeting of the Board of Directors shall be determined by amajority of the votes cast.Our bye-laws do not prohibit a director from being a party to, or otherwise having an interest in, any transaction or arrangement with the Company or in which the Company isotherwise interested. Our bye-laws provide that a director who has an interest in any transaction or arrangement with the Company and who has complied with the provisions of theCompanies Act and with our bye-laws with regard to disclosure of such interest shall be taken into account in ascertaining whether a quorum is present, and will be entitled to vote inrespect of any transaction or arrangement in which he is so interested.Our bye-laws permit us to increase our authorized share capital with the approval of a majority of votes cast in respect of our outstanding common shares represented in personor by proxy.There are no pre-emptive, redemption, conversion or sinking fund rights attached to our common shares. The holders of common shares are entitled to one vote per share on allmatters submitted to a vote of holders of common shares. Unless a different majority is required by law or by our bye-laws, resolutions to be approved by holders of common sharesrequire approval by a simple majority of votes cast at a meeting at which a quorum is present. Shareholders present in person or by proxy and entitled to vote at a meeting ofshareholders representing the holders of at least one-third of the issued shares entitled to vote at such general meeting shall be a quorum for all purposes.Under our bye-laws, our Board of Directors is authorized to attach to our undesignated shares such preferred, qualified or other special rights, privileges, conditions andrestrictions as the Board of Directors may determine. The Board of Directors may allot our undesignated shares in more than one series and attach particular rights and restrictions toany such shares by resolution; provided, however, that the Board of Directors may not attach any rights or restrictions to our undesignated shares that would alter or abrogate any ofthe special rights attached to any other class or series of shares without such sanction as is required for any such alternation or abrogation unless expressly authorized to do so by therights attaching to or by the terms of the issue of such shares.Subject to Bermuda law, special rights attaching to any class of our shares may be altered or abrogated with the consent in writing of not less than 75% of the issued shares ofthat class or with the sanction of a resolution of the holders of such shares voting in person or by proxy.In the event of our liquidation, dissolution or winding up, the holders of common shares are entitled to share in our assets, if any, remaining after the payment of all of our debtsand liabilities, subject to any liquidation preference on any outstanding preference shares.Our bye-laws provide that our Board of Directors may, from time to time, declare and pay dividends or distributions out of contributed surplus, which we refer to collectively asdividends. Each common share is entitled to dividends if and when dividends are declared by our Board of Directors, subject to any preferred dividend right of the holders of anypreference shares.There are no limitations on the right of non-Bermudians or non-residents of Bermuda to hold or vote our common shares.60Bermuda law permits the bye-laws of a Bermuda company to contain a provision indemnifying the Company’s directors and officers for any loss arising or liability attaching tohim or her by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which the officer or person may be guilty, save with respect to fraud ordishonesty. Bermuda law also grants companies the power generally to indemnify directors and officers of a company, except in instances of fraud and dishonesty, if any such personwas or is a party or threatened to be made a party to a threatened, pending or completed action, suit or proceeding by reason of the fact that he or she is or was a director and officer ofsuch company or was serving in a similar capacity for another entity at such company’s request.Our bye-laws provide that each director, alternate director, officer, person or member of a committee, if any, resident representative, and any liquidator, manager or trustee for thetime being acting in relation to the affairs of the Company, and his heirs, executors or administrators, which we refer to collectively as an indemnitee, will be indemnified and heldharmless out of our assets to the fullest extent permitted by Bermuda law against all liabilities, loss, damage or expense (including, but not limited to, liabilities under contract, tort andstatute or any applicable foreign law or regulation and all reasonable legal and other costs and expenses properly payable) incurred or suffered by him or by reason of any act done,conceived in or omitted in the conduct of the Company’s business or in the discharge of his duties except in respect of fraud or dishonesty. In addition, each indemnitee shall beindemnified out of the assets of the Company against all liabilities incurred in defending any proceedings, whether civil or criminal, in which judgment is given in such indemnitee’s favor,or in which he is acquitted.Under our bye-laws, we and our shareholders have agreed to waive any claim or right of action we or they may have at any time against any indemnitee on account of anyaction taken by such indemnitee or the failure of such indemnitee to take any action in the performance of his duties with or for the Company with the exception of any claims or rights ofaction arising out of fraud or actions to recover any gain, personal profit or advantage to which such indemnitee is not legally entitled.Our Board of Directors may, at its discretion, purchase and maintain insurance for, among other persons, any indemnitee or any persons who are or were at the time directors,officers or employees of the Company, or of any other company in which the Company has a direct or indirect interest that is allied or associated with the Company, or of any subsidiaryundertaking of the Company or such other company, against liability incurred by such persons in respect of any act or omission in the actual or purported execution or discharge of theirduties or in the exercise or purported exercise of their powers or otherwise in relation to their duties, powers or offices in relation to the Company, subsidiary undertaking or any suchother company.Our Memorandum of Association may be amended with the approval of a majority of votes cast in respect of our outstanding common shares represented in person or by proxyand our bye-laws may be amended by approval by not less than 75% of the votes cast in respect of our issued and outstanding common shares represented in person or by proxy.Shareholder Rights AgreementOn June 16, 2017, our Board declared a dividend of one preferred share purchase right, or a Right, for each outstanding common share and adopted a shareholder rights plan, asset forth in the Shareholders Rights Agreement dated as of June 16, 2017, or the Rights Agreement, by and between the Company and Computershare Trust Company, N.A., as rightsagent.The Board adopted the Rights Agreement to protect shareholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penaltyupon any person or group that acquires 15% or more of our outstanding common shares without the approval of the Board. If a shareholder’s beneficial ownership of our commonshares as of the time of the public announcement of the rights plan and associated dividend declaration is at or above the applicable threshold, that shareholder’s then-existingownership percentage would be grandfathered, but the rights would become exercisable if at any time after such announcement, the shareholder increases its ownership percentage by1% or more.The Rights may have anti-takeover effects. The Rights will cause substantial dilution to any person or group that attempts to acquire us without the approval of our Board. Asa result, the overall effect of the Rights may be to render more difficult or discourage any attempt to acquire us. Because our Board can approve a redemption of the Rights for apermitted offer, the Rights should not interfere with a merger or other business combination approved by our Board.61For those interested in the specific terms of the Rights Agreement, we provide the following summary description. Please note, however, that this description is only a summary,and is not complete, and should be read together with the entire Rights Agreement, which is an exhibit to the Form 8-A filed by us on June 16, 2017 and incorporated herein by reference.The foregoing description of the Rights Agreement is qualified in its entirety by reference to such exhibit.The Rights. The Rights trade with, and are inseparable from, our common shares. The Rights are evidenced only by certificates that represent our common shares. New Rightswill accompany any new common shares of the Company issues after June 26, 2017 until the Distribution Date described below.Exercise Price. Each Right allows its holder to purchase from the Company one one-thousandth of a Series A Participating Preferred Share (a “Preferred Share”) for $30.00 (the“Exercise Price”), once the Rights become exercisable. This portion of a Preferred Share will give the shareholder approximately the same dividend, voting and liquidation rights as wouldone common share. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.Exercisability. The Rights are not exercisable until ten days after the public announcement that a person or group has become an “Acquiring Person” by obtaining beneficialownership of 15% or more of our outstanding common shares.Certain synthetic interests in securities created by derivative positions, whether or not such interests are considered to be ownership of the underlying common shares or arereportable for purposes of Regulation 13D of the Securities Exchange Act of 1934, as amended, are treated as beneficial ownership of the number of our common shares equivalent to theeconomic exposure created by the derivative position, to the extent our actual common shares are directly or indirectly held by counterparties to the derivatives contracts. Swaps dealersunassociated with any control intent or intent to evade the purposes of the Rights Agreement are exempt from such imputed beneficial ownership.For persons who, prior to the time of public announcement of the Rights Agreement, beneficially own 15% or more of our outstanding common shares, the Rights Agreement“grandfathers” their current level of ownership, so long as they do not purchase additional shares in excess of certain limitations.The date when the Rights become exercisable is the “Distribution Date.” Until that date, our common share certificates (or, in the case of uncertificated shares, by notations inthe book-entry account system) will also evidence the Rights, and any transfer of our common shares will constitute a transfer of Rights. After that date, the Rights will separate from ourcommon shares and will be evidenced by book-entry credits or by Rights certificates that the Company will mail to all eligible holders of our common shares. Any Rights held by anAcquiring Person are null and void and may not be exercised.Preferred Share ProvisionsEach one one-thousandth of a Preferred Share, if issued, will, among other things:•not be redeemable;•entitle holders to quarterly dividend payments in an amount per share equal to the aggregate per share amount of all cash dividends, and the aggregate per share amount(payable in kind) of all non-cash dividends or other distributions other than a dividend payable in our common shares or a subdivision of our outstanding common shares(by reclassification or otherwise), declared on our common shares since the immediately preceding quarterly dividend payment date; and62•entitle holders to one vote on all matters submitted to a vote of the shareholders of the Company.The value of one one-thousandth interest in a Preferred Share should approximate the value of one common share.Consequences of a Person or Group Becoming an Acquiring Person.•Flip In. If an Acquiring Person obtains beneficial ownership of 15% or more of our common shares, then each Right will entitle the holder thereof to purchase, for theExercise Price, a number of our common shares (or, in certain circumstances, cash, property or other securities of the Company) having a then-current market value of twicethe Exercise Price. However, the Rights are not exercisable following the occurrence of the foregoing event until such time as the Rights are no longer redeemable by theCompany, as further described below.Following the occurrence of an event set forth in preceding paragraph, all Rights that are or were, under certain circumstances specified in the Rights Agreement, beneficially owned byan Acquiring Person or certain of its transferees will be null and void.•Flip Over. If, after an Acquiring Person obtains 15% or more of our common shares, (i) the Company merges into another entity; (ii) an acquiring entity merges into theCompany; or (iii) the Company sellsor transfers 50% or more of its assets, cash flow or earning power, then each Right (except for Rights that have previously been voided as set forth above) will entitle the holder thereofto purchase, for the Exercise Price, a number of our common shares of the person engaging in the transaction having a then-current market value of twice the Exercise Price.•Notional Shares. Shares held by affiliates and associates of an Acquiring Person, including certain entities in which the Acquiring Person beneficially owns a majority ofthe equity securities, and Notional Common Shares (as defined in the Rights Agreement) held by counterparties to a Derivatives Contract (as defined in the RightsAgreement) with an Acquiring Person, will be deemed to be beneficially owned by the Acquiring Person.Redemption. The Board may redeem the Rights for $0.01 per Right at any time before any person or group becomes an Acquiring Person. If the Board redeems any Rights, itmust redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of the Rights will be to receive the redemption price of $0.01 per Right. The redemption pricewill be adjusted if the Company has a stock dividend or a stock split.Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of our outstanding common shares, the Board mayextinguish the Rights by exchanging one common share or an equivalent security for each Right, other than Rights held by the Acquiring Person. In certain circumstances, the Companymay elect to exchange the Rights for cash or other securities of the Company having a value approximately equal to one common share.Expiration. The Rights expire on the earliest of (i) June 16, 2027; or (ii) the redemption or exchange of the Rights as described above.Anti-Dilution Provisions. The Board may adjust the purchase price of the Preferred Shares, the number of Preferred Shares issuable and the number of outstanding Rights toprevent dilution that may occur from a stock dividend, a stock split, or a reclassification of the Preferred Shares or our common shares. No adjustments to the Exercise Price of less than1% will be made.Amendments. The terms of the Rights and the Rights Agreement may be amended in any respect without the consent of the holders of the Rights on or prior to the DistributionDate. Thereafter, the terms of the Rights and the Rights Agreement may be amended without the consent of the holders of Rights, with certain exceptions, in order to (i) cure anyambiguities; (ii) correct or supplement any provision contained in the Rights Agreement that may be defective or inconsistent with any other provision therein; (iii) shorten or lengthenany time period pursuant to the Rights Agreement; or (iv) make changes that do not adversely affect the interests of holders of the Rights (other than an Acquiring Person or an affiliateor associate of an Acquiring Person).63Taxes. The distribution of Rights should not be taxable for federal income tax purposes. However, following an event that renders the Rights exercisable or upon redemption ofthe Rights, shareholders may recognize taxable income.Dividend Reinvestment and Direct Stock Purchase PlanOn November 6, 2013, a registration statement on Form F-3 was declared effective by the SEC relating to the Dividend Reinvestment Plan for 1,664,450 common shares to allowexisting shareholders to purchase additional common shares by reinvesting all or a portion of the dividends paid on their common shares. As at December 31, 2019, no new shares wereissued pursuant to the plan.ListingOur common shares are listed on the NYSE under the symbol “NAT.”Transfer AgentThe registrar and transfer agent for our common shares is Computershare Trust Company, N.A.C.Material ContractsFor a description of our 2019 Senior Secured Credit Facility, which the Company entered into on February 12, 2019, please see Item 5. Operating and Financial Review andProspectus B. Liquidity and Capital Resources - Our Borrowing Activities.”D.Exchange ControlsThe Company has been designated as a non-resident of Bermuda for exchange control purposes by the Bermuda Monetary Authority, whose permission for the issue of itscommon shares was obtained prior to the offering thereof.The Company’s common shares are currently listed on an appointed stock exchange. For so long as the Company’s shares are listed on an appointed stock exchange thetransfer of shares between persons regarded as resident outside Bermuda for exchange control purposes and the issuance of common shares to or by such persons may be effectedwithout specific consent under the Bermuda Exchange Control Act of 1972 and regulations made thereunder. Issues and transfers of common shares between any person regarded asresident in Bermuda and any person regarded as non-resident for exchange control purposes require specific prior approval under the Bermuda Exchange Control Act 1972 unless suchcommon shares are listed on an appointed stock exchange.Subject to the foregoing, there are no limitations on the rights of owners of shares in the Company to hold or vote their shares. Because the Company has been designated asnon-resident for Bermuda exchange control purposes, there are no restrictions on its ability to transfer funds in and out of Bermuda or to pay to United States residents who are holdersof common shares, other than in respect of local Bermuda currency.In accordance with Bermuda law, share certificates may be issued only in the names of those with legal capacity. In the case of an applicant acting in a special capacity (forexample, as an executor or trustee), certificates may, at the request of the applicant, record the capacity in which the applicant is acting. Notwithstanding the recording of any suchspecial capacity, the Company is not bound to investigate or incur any responsibility in respect of the proper administration of any such estate or trust.64The Company will take no notice of any trust applicable to any of its shares or other securities whether or not it had notice of such trust.As an “exempted company,” the Company is exempt from Bermuda laws which restrict the percentage of share capital that may be held by non-Bermudians, but as an exemptedcompany, the Company may not participate in certain business transactions including: (i) the acquisition or holding of land in Bermuda except for land required for its business by way oflease for a term not exceeding 50 years or otherwise, with the express authorization of the Ministers of Finance of Bermuda, land by way of lease for a term not exceeding 21 years inorder to provide accommodation or recreational facilities for its officers and employees; (ii) the taking of mortgages on land in Bermuda to secure an amount in excess of $50,000 withoutthe consent of the Minister of Finance of Bermuda; (iii) the acquisition of securities created or issued by, or any interest in, any local company or business, other than certain types ofBermuda government securities or securities of another “exempted company, exempted partnership or other corporation or partnership resident in Bermuda but incorporated abroad”; or(iv) the carrying on of business of any kind in Bermuda, except in so far as may be necessary for the carrying on of its business outside Bermuda or under a license granted by theMinister of Finance of Bermuda.The Bermuda government actively encourages foreign investment in “exempted” entities like the Company that are based in Bermuda but do not operate in competition withlocal business. In addition to having no restrictions on the degree of foreign ownership, the Company is subject neither to taxes on its income or dividends nor to any exchange controlsin Bermuda other than outlined above. In addition, there is no capital gains tax in Bermuda, and profits can be accumulated by the Company, as required, without limitation.E.TaxationBermuda Tax ConsiderationsUnder current Bermuda law, there are no taxes on profits, income or dividends nor is there any capital gains tax. Furthermore, the Company has received from the Minister ofFinance of Bermuda under the Exempted Undertakings Tax Protection Act of 1966, as amended, an undertaking that, in the event that Bermuda enacts any legislation imposing taxcomputed on profits or income, or computed on any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance tax, then the imposition of any such tax shallnot be applicable to the Company or to any of its operations, or the common shares, debentures or other obligations of the Company, until March 31, 2035. This undertaking does not,however, prevent the imposition of any such tax or duty on such persons as are ordinarily resident in Bermuda and holding such shares, debentures or obligations of the Company or ofproperty taxes on Company-owned real property or leasehold interests in Bermuda.The United States does not have a comprehensive income tax treaty with Bermuda. However, Bermuda has legislation in place (U.S.A. – Bermuda Tax Convention Act 1986)which authorizes the enforcement of certain obligations of Bermuda pursuant to the Convention Between The Government Of The United Kingdom of Great Britain And NorthernIreland (On Behalf Of The Government Of Bermuda) And The Government Of The United States Of America Relating To The Taxation Of Insurance Enterprises And Mutual AssistanceIn Tax Matters entered into on 11 July 1986 (the “Convention”). Article 5 of the Convention states that the U.S.A. and Bermuda “shall provide assistance as appropriate in carrying outthe laws of the respective covered jurisdictions (Bermuda and U.S.A.) relating to the prevention of tax fraud and the evasion of taxes. In addition, the competent authorities shall,through consultations, develop appropriate conditions, method, and techniques for providing, and shall thereafter provide, assistance as appropriate in carrying out the fiscal laws ofthe respective covered jurisdictions other than those relating to tax fraud and the evasion of taxes.”United States Federal Income Tax ConsiderationsThe following discussion is a summary of the material United States federal income tax considerations relevant to the Company and to a United States Holder and Non-UnitedStates Holder (each defined below) of our common shares. This discussion is based on advice received by us from Seward & Kissel LLP, our United States counsel. This discussiondoes not purport to deal with the tax consequences of owning common shares to all categories of investors, some of which (such as dealers in securities or currencies, investors whosefunctional currency is not the United States dollar, financial institutions, regulated investment companies, real estate investment trusts, tax-exempt organizations, insurance companies,persons holding our common shares as part of a hedging, integrated, conversion or constructive sale transaction or a straddle, persons liable for alternative minimum tax, personssubject to the “base erosion and anti-avoidance” tax, persons required to recognize income for U.S. federal income tax purposes no later than when such income is included on an“applicable financial statement” and persons who are investors in pass-through entities) may be subject to special rules. This discussion only applies to shareholders who (i) own ourcommon shares as a capital asset and (ii) own less than 10%, actually or constructively, of our common shares. Shareholders are encouraged to consult their own tax advisors withrespect to the specific tax consequences to them of purchasing, holding or disposing of common shares.65United States Federal Income Taxation of the CompanyOperating Income: In GeneralUnless exempt from United States federal income taxation under section 883 of the United Stated Internal Revenue Code of 1986, as amended, or the Code, a foreign corporationis subject to United States federal income taxation in the manner described below in respect of any income that is derived from the use of vessels, from the hiring or leasing of vessels foruse on a time, voyage or bareboat charter basis, or from the performance of services directly related to such use, which we refer to as Shipping Income, to the extent that such ShippingIncome is derived from sources within the United States, which we refer to as United States-Source Shipping Income.Shipping Income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States will be considered to be 50% derived fromsources within the United States. Shipping Income that is attributable to transportation that both begins and ends in the United States will be considered to be 100% derived fromsources within the United States.Shipping Income that is attributable to transportation exclusively between non-United States ports will be considered to be 100% derived from sources outside the UnitedStates. Shipping Income derived from sources outside the United States will not be subject to United States federal income tax.Our vessels will be operated in various parts of the world and, in part, are expected to be involved in transportation of cargoes that begins or ends, but that does not both beginand end, in United States ports. Accordingly, it is not expected that we will engage in transportation that gives rise to 100% United States-Source Shipping Income.Exemption of Operating Income from United States Federal Income TaxationPursuant to section 883 of the Code, we will be exempt from United States federal income taxation on our United States-Source Shipping Income if (i) we are organized in aforeign country that grants an equivalent exemption from income taxation to corporations organized in the United States, which we refer to as the Country of Organization Requirement,and (ii) either (A) more than 50% of the value of our common shares is owned, directly or indirectly, by individuals who are “residents” of such country or of another foreign country thatgrants an equivalent exemption to corporations organized in the United States, which we refer to as the 50% Ownership Test, or (B) our common shares are “primarily and regularlytraded on an established securities market” in such country, in another country that grants an equivalent exemption to United States corporations, or in the United States, which we referto as the Publicly-Traded Test.Bermuda, the country in which we are incorporated, grants an equivalent exemption to United States corporations. Therefore, we will satisfy the Country of OrganizationRequirement and will be exempt from United States federal income taxation with respect to our United States-Source Shipping Income if we satisfy either the 50% Ownership Test or thePublicly-Traded Test.The regulations promulgated by the United States Department of the Treasury (the “Treasury Regulations”) under section 883 of the Code provide that stock of a foreigncorporation will be considered to be “primarily traded” on an established securities market in a country if the number of shares of each class of stock that is traded during any taxableyear on all established securities markets in that country exceeds the number of shares in each such class that is traded during that year on established securities markets in any othersingle country.66The Publicly-Traded Test also requires our common shares be “regularly traded” on an established securities market. Under the Treasury Regulations, our common shares areconsidered to be “regularly traded” on an established securities market if shares representing more than 50% of our outstanding common shares, by both total combined voting power ofall classes of stock entitled to vote and total value, are listed on the market, referred to as the “Listing Threshold.” The Treasury Regulations further require that with respect to eachclass of stock relied upon to meet the listing threshold, (i) such class of stock is traded on the market, other than in minimal quantities, on at least 60 days during the taxable year or 1/6 ofthe days in a short taxable year, which is referred to as the Trading Frequency Test; and (ii) the aggregate number of shares of such class of stock traded on such market during thetaxable year is at least 10% of the average number of shares of such class of stock outstanding during such year (as appropriately adjusted in the case of a short taxable year), which isreferred to as the Trading Volume Test. Even if we do not satisfy both the Trading Frequency and Trading Volume Tests, the Treasury Regulations provide that the Tests will be deemedsatisfied if our common shares are traded on an established securities market in the United States and such stock is regularly quoted by dealers making a market in our common shares.We believe that we satisfied the Publicly-Traded Test for our 2019 taxable year since, on more than half the days of the taxable year, we believe the Company’s common shareswere primarily and regularly traded on an established securities market in the United States, namely the NYSE.Notwithstanding the foregoing, we will not satisfy the Publicly-Traded Test if 50% or more of the vote and value of our common shares is owned (or is treated as owned undercertain stock ownership attribution rules) by persons each of whom owns (or is treated as owning under certain stock ownership attribution rules) 5% or more of the value of ourcommon shares, or 5% Shareholders, for more than half the days during the taxable year, to which we refer to as the 5% Override Rule. In the event the 5% Override Rule is triggered,the 5% Override Rule will nevertheless not apply if we can establish that among the closely-held group of 5% Shareholders, there are sufficient 5% Shareholders that are considered tobe “qualified shareholders” for purposes of section 883 of the Code to preclude non-qualified 5% Shareholders in the closely-held group from owning 50% or more of our commonshares for more than half the number of days during the taxable year. In order to determine the persons who are 5% Shareholders, we are permitted to rely on those persons that areidentified on Schedule 13G and Schedule 13D filings with the SEC as having a 5% or more beneficial interest in our common shares.We are not aware of any facts which would indicate that 50% or more of our common shares were actually or constructively owned by 5% Shareholders during our 2019 taxableyear. Accordingly, we expect that our common shares will be considered to be “primarily and regularly traded on an established securities market” and that we will, therefore, qualify forthe exemption under section 883 of the Code for our 2019 taxable year. However, because of the factual nature of the issues relating to this determination, no assurance can be given thatwe will qualify for the exemption in any future taxable year. For example, if 5% Shareholders owned 50% or more of our common shares, then we would have to satisfy certainrequirements regarding the identity and residence of our 5% Shareholders. These requirements are onerous and there is no assurance that we could satisfy them.United States Federal Income Taxation of Gain on Sale of VesselsRegardless of whether we qualify for exemption under section 883 of the Code, we will generally not be subject to United States federal income taxation with respect to gainrealized on the sale of a vessel, provided the sale is considered to occur outside of the United States under United States federal income tax principles. In general, a sale of a vessel willbe considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It isexpected that any sale of a vessel by us will be considered to occur outside of the United States.4% Gross Basis Tax RegimeTo the extent that the benefits of section 883 of the Code are unavailable with respect to any item of United States-Source Shipping Income, such Shipping Income that isconsidered not to be “effectively connected” with the conduct of a trade or business in the United States, as discussed below, would be subject to a 4% tax imposed by section 887 ofthe Code on a gross basis, without benefit of deductions, which we refer to as the 4% Gross Basis Tax Regime. Since under the sourcing rules described above, no more than 50% of ourShipping Income would be derived from United States sources, the maximum effective rate of United States federal income tax on our gross Shipping Income would never exceed 2%under the 4% Gross Basis Tax Regime.67Net Basis and Branch Profits Tax RegimeTo the extent that the benefits of the exemption under section 883 of the Code are unavailable and our United States-Source Shipping Income is considered to be “effectivelyconnected” with the conduct of a United States trade or business, as described below, any such “effectively connected” United States-Source Shipping Income, net of applicabledeductions, would be subject to the United States federal income tax imposed at corporate rate of 21% under present law. In addition, we may be subject to the 30% “branch profits”taxes on earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paidattributable to the conduct of the United States trade or business.Our United States-Source Shipping Income would be considered “effectively connected” with the conduct of a U.S. trade or business only if (i) we have, or are considered tohave, a fixed place of business in the United States involved in the earning of Shipping Income and (ii) substantially all of our United States-Source Shipping Income is attributable toregularly scheduled transportation, such as the operation of a vessel that followed a published schedule with repeated sailings at regular intervals between the same points for voyagesthat begin or end in the United States, or, in the case of income from the chartering of a vessel, is attributable to a fixed place of business in the United States.We do not intend to have a fixed place of business in the United States involved in the earning of Shipping Income. Based on the foregoing and on the expected mode of ourshipping operations and other activities, we believe that none of our United States-Source Shipping Income will be “effectively connected” with the conduct of a United States trade orbusiness.United States Federal Income Taxation of United States HoldersAs used herein, the term “United States Holder” means, for United States federal income tax purposes, a beneficial owner of common shares who is (A) an individual citizen orresident of the United States, (B) a corporation (or other entity treated as a corporation) created or organized in or under the laws of the United States or of any state or the District ofColumbia, (C) an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source, or (D) a trust if a court within the UnitedStates is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of thetrust.If a partnership holds our common shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of thepartnership. If you are a partner in a partnership holding our common shares, you are urged to consult your tax advisors.DistributionsSubject to the discussion below of passive foreign investment companies, or PFICs, any distributions made by us with respect to our common shares to a United States Holderwill generally constitute dividends, which may be taxable as ordinary income or “qualified dividend income,” as described in more detail below, to the extent of our current oraccumulated earnings and profits, as determined under United States federal income tax principles. Distributions in excess of our earnings and profits will be treated first as a non-taxablereturn of capital to the extent of the United States Holder’s tax basis in his common shares on a dollar-for-dollar basis and thereafter as capital gain. Because we are not a United Statescorporation, United States Holders that are corporations will generally not be entitled to claim a dividends received deduction with respect to any distributions they receive from us.Dividends paid with respect to our common shares will generally be treated as “passive category income” or, in the case of certain types of United States Holders, “general categoryincome” for purposes of computing allowable foreign tax credits for United States foreign tax credit purposes.68Dividends paid on our common shares to a United States Holder who is an individual, trust or estate, or a United States Individual Holder, will generally be treated as “qualifieddividend income” that is taxable to such United States Individual Holders at preferential tax rates provided that (1) the common shares are readily tradable on an established securitiesmarket in the United States (such as the NYSE on which our common shares are traded); (2) we are not a PFIC for the taxable year during which the dividend is paid or the immediatelypreceding taxable year (as discussed below); (3) the United States Individual Holder has owned the common shares for more than 60 days in the 121-day period beginning 60 days beforethe date on which the common shares become ex-dividend, and (4) the United States Individual Holder is not under an obligation (whether pursuant to a short sale or otherwise) to makepayments with respect to positions in substantially similar or related property. There is no assurance that any dividends paid on our common shares will be eligible for these preferentialrates in the hands of a United States Individual Holder. Any dividends paid by us which are not eligible for these preferential rates will be taxed as ordinary income to a United StatesIndividual Holder.If we pay an “extraordinary dividend” on our common shares (generally, a dividend in an amount which is equal to or in excess of 10% of a shareholder’s adjusted tax basis (orfair market value in certain circumstances) in the common shares or dividends received within a one-year period that, in the aggregate, equal or exceed 20% of a shareholder’s adjustedtax basis (or fair market value upon the shareholder’s election)) that is treated as “qualified dividend income,” then any loss derived by a United States Individual Holder from the sale orexchange of such common shares will be treated as long-term capital loss to the extent of such dividend.Sale, Exchange or other Disposition of Common SharesAssuming we do not constitute a PFIC for taxable years after 2004, a United States Holder generally will recognize taxable gain or loss upon a sale, exchange or other dispositionof our common shares in an amount equal to the difference between the amount realized by the United States Holder from such sale, exchange or other disposition and the United StatesHolder’s tax basis in such common shares. Such gain or loss will be treated as long-term capital gain or loss if the United States Holder’s holding period is greater than one year at thetime of the sale, exchange or other disposition. Such capital gain or loss will generally be treated as United States-source income or loss, as applicable, for United States foreign tax creditpurposes. A United States Holder’s ability to deduct capital losses is subject to certain limitations.Special rules may apply to a United States Holder who purchased shares before 2005 and did not make a timely QEF election or a mark-to-market election (as discussed below). Such United States Holders are encouraged to consult their tax advisors regarding the United States federal income tax consequences to them of the disposal of our common shares.Passive Foreign Investment Company ConsiderationsSpecial United States federal income tax rules apply to a United States Holder that holds shares in a foreign corporation classified as a PFIC for United States federal income taxpurposes. In general, we will be treated as a PFIC with respect to a United States Holder if, for any taxable year in which such Holder held our common shares, either•at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conductof a rental business), or•at least 50% of the average value of the assets held by us during such taxable year produce, or are held for the production of, such passive income.For purposes of determining whether we are a PFIC, we will be treated as earning and owning our proportionate share of the income and assets, respectively, of any of oursubsidiary corporations in which we own at least 25% of the value of the subsidiary’s shares. Income earned, or deemed earned, by us in connection with the performance of serviceswould not constitute passive income. By contrast, rental income would generally constitute passive income unless we were treated under specific rules as deriving our rental income inthe active conduct of a trade or business.69For taxable years through 2004, we were a PFIC. However, based on our current operations and future projections, we do not believe that we have been, or will become, a PFICwith respect to our taxable years after 2004. Although there is no legal authority directly on point, and we are not relying upon an opinion of counsel on this issue, our belief is basedprincipally on the position that, for purposes of determining whether we are a PFIC, the gross income we derive or are deemed to derive from our time chartering and voyage charteringactivities should constitute services income, rather than rental income. Correspondingly, such income should not constitute passive income, and the assets that we own and operate orare deemed to own and operate in connection with the production of such income, in particular, the vessels, should not constitute passive assets for purposes of determining whetherwe are a PFIC. We believe there is substantial legal authority supporting our position consisting of case law and Internal Revenue Service, or IRS, pronouncements concerning thecharacterization of income derived from time charters and voyage charters as services income for other tax purposes. However, we note that there is also authority which characterizestime charter income as rental income rather than services income for other tax purposes. In the absence of any legal authority specifically relating to the statutory provisions governingPFICs, the IRS or a court could disagree with our position. In addition, although we intend to conduct our affairs in a manner to avoid being classified as a PFIC, we cannot assure youthat the nature of our operations will not change in the future.As discussed more fully below, if we were to be treated as a PFIC for any taxable year which included a United States Holder’s holding period in our common shares, then suchUnited States Holder would be subject to different United States federal income taxation rules depending on whether the United States Holder makes an election to treat us as a“qualified electing fund,” which election we refer to as a QEF Election. As an alternative to making a QEF election, a United States Holder should be able to make a “mark-to-market”election with respect to our common shares, as discussed below. In addition, if we were to be treated as a PFIC for a taxable year ending on or after December 31, 2013, a United StatesHolder of our common shares would be required to file an annual information return with the IRS for such year.United States Holders Making a Timely QEF ElectionPass-Through of Ordinary Earnings and Net Capital Gain. A United States Holder who makes a timely QEF Election with respect to our common shares, or an Electing Holder,would report for United States federal income tax purposes his pro rata share of our “ordinary earnings” (i.e., the net operating income determined under United States federal income taxprinciples) and our net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder. Our “net capital gain” is any excess of any of our net longterm capital gains over our net short term capital losses and is reported by the Electing Holder as long term capital gain. Our net operating losses or net capital losses would not passthrough to the Electing Holder and will not offset our ordinary earnings or net capital gain reportable to Electing Holders in subsequent years (although such losses would ultimatelyreduce the gain, or increase the loss, if any, recognized by the Electing Holder on the sale of his common shares).For purposes of calculating our ordinary earnings, the cost of each vessel is depreciated on a straight-line basis over the applicable recovery period for vessels. Any gain onthe sale of a vessel would be treated as ordinary income, rather than capital gain, to the extent of such depreciation deductions with respect to such vessel.In general, an Electing Holder would not be taxed twice on his share of our income. Thus, distributions received from us by an Electing Holder are excluded from the ElectingHolder’s gross income to the extent of the Electing Holder’s prior inclusions of our ordinary earnings and net capital gain. The Electing Holder’s tax basis in his shares would beincreased by any amount included in the Electing Holder’s income. Distributions received by an Electing Holder, which are not includible in income because they have been previouslytaxed, would decrease the Electing Holder’s tax basis in the common shares. Distributions, if any, in excess of such tax basis would be treated as capital gain (which gain will be treatedas long-term capital gain if the Electing Holder held its common shares for more than one year at the time of distribution).Disposition of Common Shares. An Electing Holder would generally recognize capital gain or loss on the sale or exchange of common shares in an amount equal to thedifference between the amount realized by the Electing Holder from such sale or exchange and the Electing Holder’s tax basis in the common shares. Such gain or loss would generally betreated as long-term capital gain or loss if the Electing Holder’s holding period in the common shares at the time of the sale or exchange is more than one year. A United States Holder’sability to deduct capital losses may be limited.70Making a QEF Election. A United States Holder makes a QEF Election for a taxable year by completing and filing IRS Form 8621 (Return by a Shareholder of a Passive ForeignInvestment Company or Qualified Electing Fund) in accordance with the instructions thereto. If we were aware that we were to be treated as a PFIC for any taxable year, we wouldprovide each United States Holder with all necessary information in order to make the QEF Election described above.United States Holders Making a Timely Mark-to-Market ElectionMark-to-Market Regime. A United States Holder who does not make a QEF Election may make a “mark-to-market” election under section 1296 of the Code, provided that thecommon shares are regularly traded on a “qualified exchange.” The NYSE, on which the common shares are traded, is a “qualified exchange” for these purposes. A United States Holderwho makes a timely mark-to-market election with respect to the common shares would include annually in the United States Holder’s income, as ordinary income, any excess of the fairmarket value of the common shares at the close of the taxable year over the United States Holder’s then adjusted tax basis in the common shares. The excess, if any, of the United StatesHolder’s adjusted tax basis at the close of the taxable year over the then fair market value of the common shares would be deductible in an amount equal to the lesser of the amount ofthe excess or the net mark-to-market gains that the United States Holder included in income in previous years with respect to the common shares. A United States Holder’s tax basis inhis common shares would be adjusted to reflect any income or loss amount recognized pursuant to the mark-to-market election.Disposition of Common Shares. A United States Holder who makes a timely mark-to-market election would recognize ordinary income or loss on a sale, exchange or otherdisposition of the common shares in an amount equal to the difference between the amount realized by the United States Holder from such sale, exchange or other disposition and theUnited States Holder’s tax basis in the common shares; provided, however, that any ordinary loss on the sale, exchange or other disposition may not exceed the net mark-to-market gainsthat the United States Holder included in income in previous years with respect to the common shares. The amount of any loss in excess of such net mark-to market gains is treated ascapital loss.Making the Mark-to-Market Election. A United States Holder makes a mark-to-market election for a taxable year by completing and filing IRS Form 8621 (Return by aShareholder of a Passive Foreign Investment Company or Qualified Electing Fund) in accordance with the instructions thereto.United States Holders Not Making a Timely QEF Election or Mark-to-Market ElectionA United States Holder who does not make a timely QEF Election or a timely mark-to-market election, which we refer to as a Non-Electing Holder, would be subject to specialrules with respect to (i) any “excess distribution” (generally, the portion of any distributions received by the Non-Electing Holder on the common shares in a taxable year in excess of125% of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder’s holding period for thecommon shares), and (ii) any gain realized on the sale or other disposition of common shares. Under these rules, (i) the excess distribution or gain would be allocated ratably over theNon-Electing Holder’s holding period for the common shares; (ii) the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were aPFIC, would be taxed as ordinary income; and (iii) the amount allocated to each of the other prior taxable years would be subject to tax at the highest rate of tax in effect for the applicableclass of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. Ifa Non-Electing Holder dies while owning common shares, the Non-Electing Holder’s successor would be ineligible to receive a step-up in the tax basis of those common shares.Distributions received by a Non-Electing Holder that are not “excess distributions” would be includible in the gross income of the Non-Electing Holder as dividend income tothe extent that such distributions are paid out of our current or accumulated earnings and profits as determined under United States federal income tax principles. Such dividends wouldnot be eligible to be treated as “qualified dividend income” eligible for preferential tax rates. Distributions in excess of our current or accumulated earnings and profits would be treatedfirst as a return of the United States Holder’s tax basis in the common shares (thereby increasing the amount of any gain or decreasing the amount of any loss realized on the subsequentsale or disposition of such common shares) and thereafter as capital gain.71United States Holders Who Acquired Shares Before 2005We were a PFIC through the 2004 taxable year. Therefore, a United States Holder who acquired our common shares before 2005 may be subject to special rules with respect toour common shares. In particular, a United States Holder who did not make a timely QEF Election or a mark-to-market election may continue to be subject to the PFIC rules with respectto our common shares. Such United States Holders are encouraged to consult their tax advisors regarding the application of these rules as well as the availability of certain electionswhich may ameliorate the application of these rules.United States Federal Income Taxation of Non-United States HoldersA beneficial owner of common shares (other than a partnership) that is not a United States Holder is referred to herein as a Non-United States Holder.Dividends on Common SharesNon-United States Holders generally will not be subject to United States federal income or withholding tax on dividends received from us with respect to our common shares,unless that income is effectively connected with the Non-United States Holder’s conduct of a trade or business in the United States. If the Non-United States Holder is entitled to thebenefits of a United States income tax treaty with respect to those dividends, that income is taxable only if it is attributable to a permanent establishment maintained by the Non-UnitedStates Holder in the United States.Sale, Exchange or Other Disposition of Common SharesNon-United States Holders generally will not be subject to United States federal income or withholding tax on any gain realized upon the sale, exchange or other disposition ofour common shares, unless:•the gain is effectively connected with the Non-United States Holder’s conduct of a trade or business in the United States (and, if the Non-United States Holder is entitledto the benefits of a United States income tax treaty with respect to that gain, that gain is attributable to a permanent establishment maintained by the Non-United StatesHolder in the United States); or•the Non-United States Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.If the Non-United States Holder is engaged in a United States trade or business for United States federal income tax purposes, the income from the common shares, includingdividends and the gain from the sale, exchange or other disposition of the common shares, that is effectively connected with the conduct of that trade or business will generally besubject to regular United States federal income tax in the same manner as discussed in the previous section relating to the taxation of United States Holders. In addition, if you are acorporate Non-United States Holder, your earnings and profits that are attributable to the effectively connected income, subject to certain adjustments, may be subject to an additionalbranch profits tax at a rate of 30%, or at a lower rate as may be specified by an applicable United States income tax treaty.Backup Withholding and Information ReportingIn general, dividend payments, or other taxable distributions, made within the United States to you will be subject to information reporting requirements if you are a UnitedStates Individual Holder. Such payments may also be subject to backup withholding tax if you are a United States Individual Holder and you:•fail to provide an accurate taxpayer identification number;•are notified by the IRS that you have failed to report all interest or dividends required to be shown on your United States federal income tax returns; or72•in certain circumstances, fail to comply with applicable certification requirements.Non-United States Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status on an IRS Form W-8.If you are a Non-United States Holder and you sell your common shares to or through a United States office of a broker, the payment of the proceeds is subject to both UnitedStates backup withholding and information reporting unless you certify that you are a non-United States person, under penalties of perjury, or you otherwise establish an exemption. Ifyou are a Non-United States Holder and you sell your common shares through a non-United States office of a non-United States broker and the sales proceeds are paid to you outsidethe United States, then information reporting and backup withholding generally will not apply to that payment. However, information reporting requirements, but not backupwithholding, will apply to a payment of sales proceeds, even if that payment is made to you outside the United States, if you sell your common shares through a non-United States officeof a broker that is a United States person or has some other contacts with the United States. Such information reporting requirements will not apply, however, if the broker hasdocumentary evidence in his records that you are a non-United States person and certain other conditions are met, or you otherwise establish an exemption.Backup withholding is not an additional tax. Rather, you generally may obtain a refund of any amounts withheld under backup withholding rules that exceed your United Statesfederal income tax liability by filing a refund claim with the IRS.Individuals who are United States Holders (and to the extent specified in applicable Treasury regulations, certain individuals who are Non-United States Holders and certainUnited States entities) who hold “specified foreign financial assets” (as defined in Section 6038D of the Code) are required to file IRS Form 8938 with information relating to the asset foreach taxable year in which the aggregate value of all such assets exceeds $75,000 at any time during the taxable year or $50,000 on the last day of the taxable year (or such higher dollaramount as prescribed by applicable Treasury regulations). Specified foreign financial assets would include, among other assets, our common shares, unless the shares are held throughan account maintained with a United States financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonablecause and not due to willful neglect. Additionally, in the event an individual United States Holder (and to the extent specified in applicable Treasury regulations, an individual Non-United States Holder or a United States entity) that is required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of United Statesfederal income taxes of such holder for the related tax year may not close until three years after the date that the required information is filed. United States Holders (including UnitedStates entities) and Non- United States Holders are encouraged consult their own tax advisors regarding their reporting obligations under this legislation.In addition to the tax consequences discussed above, we may be subject to tax in one or more other jurisdictions where we conduct activities. The amount of any such taximposed upon our operations may be material.The above-mentioned tax considerations does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase, own ordispose of the shares. Shareholders who wish to clarify their own tax situation should consult and rely upon their own tax advisors.Other Tax ConsiderationsIn addition to the tax consequences discussed above, we may be subject to tax in one or more other jurisdictions where we conduct activities. The amount of any such taximposed upon our operations may be material.F.Dividends and Paying AgentsNot applicable.G.Statement by ExpertsNot applicable.73H.Documents on DisplayWe are subject to the informational requirements of the Securities Exchange Act of 1934, as amended. In accordance with these requirements we file reports and otherinformation with the SEC. These materials, including this annual report and the accompanying exhibits may be inspected and copied at the public reference facilities maintained by theSEC at 100 F Street, NE, Room 1580, Washington, D.C. 20549. The SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and otherinformation that we and other registrants have filed electronically with the SEC. Our filings are also available on our website at www.nat.bm. This web address is provided as an inactivetextual reference only. Information contained on our website does not constitute part of this annual report.Shareholders may also request a copy of our filings at no cost, by writing or telephoning us at the following address:Nordic American Tankers LimitedLOM Building27 Reid StreetHamilton, HM11, Bermuda.Tel: +1 441 292 7202Fax: +1 441 292 3266I.Subsidiary InformationNot applicable.ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKThe Company is exposed to market risk from changes in interest rates related to the variable rate of the Company’s borrowings under our Credit Facility.Amounts borrowed under the Credit Facility bear interest at a rate equal to LIBOR plus a margin. Increasing interest rates could affect our future profitability. In certainsituations, the Company may enter into financial instruments to reduce the risk associated with fluctuations in interest rates.A 100 basis point increase in LIBOR would have resulted in an increase of approximately $4.4 million in our interest expense for the year ended December 31, 2019.The Company is exposed to the spot market. Historically, the tanker markets have been volatile as a result of the many conditions and factors that can affect the price, supplyand demand for tanker capacity. Changes in demand for transportation of oil over longer distances and supply of tankers to carry that oil may materially affect our revenues, profitabilityand cash flows. All of our vessels are currently operated in the spot market through a cooperative arrangement. We believe that over time, spot employment generates premium earningscompared to longer-term employment.We estimate that during 2019, a $1,000 per day per vessel decrease in the spot market rate would have decreased our voyage revenue by approximately $8.4 million.ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIESNot applicable.PART IIITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIESNot applicable.74ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDSNot applicable.ITEM 15.CONTROLS AND PROCEDURESA.Disclosure Controls and Procedures.Pursuant to Rules 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company’s management, under the supervision and with theparticipation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures asof December 31, 2019. Disclosure controls and procedures are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under theAct is recorded, processed, summarized and reported, within the time periods specified in the U.S Securities and Exchange Commission’s rules and forms. Disclosure controls andprocedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits underthe Act is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate toallow timely decisions regarding required disclosure. Based on this evaluation, management has concluded that our disclosure controls and procedures were effective as of December 31,2019.B.Management’s annual report on internal control over financial reporting.Our internal control system is designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the reliability of financial reportingand the preparation of published financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our system of internal control overfinancial reporting includes those policies and procedures that:•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generallyaccepted in the United States of America and that our receipts and expenditures are being made only in accordance with authorization of our management and directors;and•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on theconsolidated financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. All internal control systems, no matter how welldesigned and operated, can only provide reasonable, not absolute, assurance that the objectives of the control system will be met. Therefore, even those systems determined to beeffective can provide only reasonable assurance with respect to financial statement preparation and presentation. Additionally, any projections of any evaluations of effectiveness tofuture periods are subject to the risk that controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with our policies andprocedures.Our management, including the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as at December31, 2019, based on the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission(“COSO”). Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2019.75C.Attestation report of the registered public accounting firm.The effectiveness of our internal control over financial reporting as of December 31, 2019 has been audited by KPMG AS, an independent registered public accounting firm, asstated in their report that appears herein.D.Changes in internal control over financial reporting.There have been no other changes in internal controls over financial reporting that occurred during the year covered by this Annual Report, that have materially affected, or arereasonably likely to materially affect, the Company’s internal controls over financial reporting.ITEM 16.RESERVEDITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERTThe Board of Directors has determined that Mr. Kelly, who serves as Chairman of the Audit Committee, qualifies as an “audit committee financial expert” under SEC rules, andthat Mr. Kelly is “independent” under applicable NYSE rules and SEC standards.ITEM 16B.CODE OF ETHICSThe Company has adopted a code of ethics that applies to all of the Company’s employees, including our chief executive officer, chief financial officer, principal accountingofficer or controller. The code of ethics may be downloaded at our website (www.nat.bm). Additionally, any person, upon request, may ask for a hard copy or an electronic file of thecode of ethics. If we make any substantive amendment to the code of ethics or grant any waivers, including any implicit waiver, from a provision of our code of ethics, we will disclosethe nature of that amendment or waiver on our website. During the year ended December 31, 2019, no such amendment was made or waiver granted.ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICESA.Audit FeesOur Board of Directors has established preapproval and procedures for the engagement of the Company’s independent public accounting firms for all audit and non-auditservices. The following table sets forth, for the two most recent fiscal years, the aggregate fees billed for professional services rendered by our principal accountant, KPMG AS, for thefiscal years ended December 31, 2019 and 2018, respectively, for the audit of the Company’s annual financial statements and services provided by the principal accountant in connectionwith statutory and regulatory filings or engagements for the years ended December 31, 2019 and 2018.FISCAL YEAR ENDED DECEMBER 31, 2019 $853,439 FISCAL YEAR ENDED DECEMBER 31, 2018 $901,429 B.Audit-Related FeesFISCAL YEAR ENDED DECEMBER 31, 2019 $0 FISCAL YEAR ENDED DECEMBER 31, 2018 $0 C.Tax FeesNot applicable.D.All Other FeesNot applicable.76E.Audit Committee’s Pre-Approval Policies and ProceduresOur audit committee pre-approves all audit, audit-related and non-audit services not prohibited by law to be performed by our independent auditors and associated fees prior tothe engagement of the independent auditor with respect to such services.F.Not applicable.ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEESNot applicable.ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PERSONS.Not applicable.ITEM 16F.CHANGE IN REGISTRANT`S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G.CORPORATE GOVERNANCEPursuant to an exception for foreign private issuers, we, as a Bermuda company, are not required to comply with the corporate governance practices followed by U.S. companiesunder the NYSE listing standards (which are available at www.nyse.com) because in certain cases we follow our home country (Bermuda) practice. We believe that our establishedpractices in the area of corporate governance are in line with the spirit of the NYSE standards and provide adequate protection to our shareholders.There are four significant differences between our corporate governance practices and the NYSE standards applicable to listed U.S. companies. The NYSE requires that non-management directors meet regularly in executive sessions without management. The NYSE also requires that all independent directors meet in an executive session at least once a year.As permitted under Bermuda law and our bye-laws, our non-management directors do not regularly hold executive sessions without management and we do not expect them to do so inthe future. The NYSE requires that a listed U.S. company have a nominating/corporate governance committee of independent directors and a committee charter specifying the purpose,duties and evaluation procedures of the committee. As permitted under Bermuda law and our bye-laws, we do not currently have a nominating or corporate governance committee. TheNYSE requires, among other things, that a listed U.S. company have an audit committee with a minimum of three members, all of whom are independent. As permitted by Rule 10A-3under the Securities Exchange Act of 1934, our audit committee consists of two independent members of our Board of Directors. The NYSE requires U.S. companies to adopt anddisclose corporate governance guidelines. The guidelines must address, among other things: director qualification standards, director responsibilities, director access to managementand independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance evaluation. We are not required toadopt such guidelines under Bermuda law and we have not adopted such guidelinesITEM 16H.MINE SAFETY DISCLOSURENot applicable.77PART IIIITEM 17.FINANCIAL STATEMENTSSee Item 18.ITEM 18.FINANCIAL STATEMENTSThe financial information required by this Item is set forth on pages F-1 to F-27 filed as part of this annual report.ITEM 19.EXHIBITS1.1Memorandum of Association of the Company incorporated by reference to Exhibit 1.1 to the Company's annual report on Form 20-F filed with the Securities andExchange Commission on April 17, 2012. 1.2By-Laws of the Company incorporated by reference to Form 6-K filed with the Securities and Exchange Commission on January 18, 2012. 2.1Form of Share Certificate incorporated by reference to Exhibit 2.1 to the Company's annual report on Form 20-F filed with the Securities and Exchange Commission onApril 17, 2012. 2.2Shareholder Rights Agreement dated as of June 16, 2017 by and between the Company and Computershare Trust Company, N.A., as rights agent incorporated byreference to Form 6-K filed with the Securities and Exchange Commission on June 16, 2017. 2.3Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 4.1Restated Management Agreement dated June 30, 2004, between Scandic American Shipping Ltd. and Nordic American Tanker Shipping Limited, incorporated byreference to Exhibit 4.4 to the Company's annual report on Form 20-F filed with the Securities and Exchange Commission on June 30, 2005. 4.2Amendment to Restated Management Agreement dated October 12, 2004, between Scandic American Shipping Ltd. and Nordic American Tanker Shipping Limited,incorporated by reference to Exhibit 4.4 to the Company's annual report on Form 20-F filed with the Securities and Exchange Commission on June 30, 2005. 4.3Amendment to Restated Management Agreement dated October 12, 2004, between Scandic American Shipping Ltd. and Nordic American Tanker Shipping Limited,incorporated by reference to Exhibit 99 to Form 6-K filed with the Securities and Exchange Commission on October 29, 2004. 4.4Amendment to Restated Management Agreement dated April 29, 2005, between Scandic American Shipping Ltd. and Nordic American Tanker Shipping Limited,incorporated by reference to Exhibit 4.3 to the Company's annual report on Form 20-F for the fiscal year ended December 31, 2006 filed with the Securities andExchange Commission on June 29, 2007. 4.5Amendment to Restated Management Agreement dated November 19, 2005, between Scandic American Shipping Ltd. and Nordic American Tanker Shipping Limitedincorporated by reference to Exhibit 4.5 to the Company's annual report on Form 20-F filed with the Securities and Exchange Commission April 17, 2012. 4.6Amendment to Restated Management Agreement dated May 3, 2008, between Scandic American Shipping Ltd. and Nordic American Tanker Shipping Limitedincorporated by reference to Exhibit 4.3 to the Company's annual report on Form 20-F for the fiscal year ended December 31, 2007 filed with the Securities andExchange Commission on May 9, 2008. 784.7Amendment to Restated Management Agreement dated May 31, 2009, between Scandic American Shipping Ltd. and Nordic American Tanker Shipping Limitedincorporated by reference to Exhibit 4.5 to the Company's annual report on Form 20-F for the fiscal year ended December 31, 2009 filed with the Securities andExchange Commission on May 24, 2010. 4.8Amendment to Restated Management Agreement dated July 1, 2010, between Scandic American Shipping Ltd. and Nordic American Tanker Shipping Limitedincorporated by reference to Exhibit 4.8 to the Company's annual report on Form 20-F filed with the Securities and Exchange Commission on April 17, 2012. 4.9Amendment to Restated Management Agreement dated December 1, 2011 between Scandic American Shipping Ltd. and Nordic American Tankers Limitedincorporated by reference to Exhibit 4.9 to the Company's annual report on Form 20-F filed with the Securities and Exchange Commission on April 17, 2012. 4.10Amendment to Restated Management Agreement dated January 10, 2013 between Scandic American Shipping Ltd. and Nordic American Tankers Limited incorporatedby reference to Exhibit 4.14 to the Company's annual report on Form 20-F for the fiscal year ended December 31, 2012 filed with the Securities and ExchangeCommission on March 19, 2013. 4.11Amended and Restated 2011 Equity Incentive Plan. 4.12Facility Agreement USD500,000,000 Revolving Credit Facility by and among Nordic American Tankers Limited as Borrower, arranged by DNB Bank ASA, Nordea BankNorge ASA and Skandinaviska Enskilda Banken AB dated October 26, 2012 as amended and restated by an amendment and restatement agreement dated December16, 2015, incorporated by reference to Form 6-K filed with the Securities and Exchange Commission on November 30, 2018. 4.13Waiver and Consent Letter dated May 4, 2018 from DNB Bank ASA to Nordic American Tankers Limited, incorporated by reference to Form 6-K filed with theSecurities and Exchange Commission on November 30, 2018. 4.14Equity Distribution Agreement dated March 29, 2019, by and between Nordic American Tankers Limited and B. Riley FBR, Inc. 8.1Subsidiaries of Nordic American Tankers Limited 12.1Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer. 12.2Rule 13a-14(a) /15d-14(a) Certification of the Chief Financial Officer. 13.1Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 13.2Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 15.1Consent of Independent Registered Public Accounting Firm – KPMG AS. 15.2Consent of Fearnleys 101.INSXBRL Instance Document 101.SCHXBRL Taxonomy Extension Schema Document 101.CALXBRL Taxonomy Extension Schema Calculation Linkbase Document 101.DEFXBRL Taxonomy Extension Schema Definition Linkbase Document 101.LABXBRL Taxonomy Extension Schema Label Linkbase Document 101.PREXBRL Taxonomy Extension Schema Presentation Linkbase Document79SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned to sign this annual report on its behalf. NORDIC AMERICAN TANKERS LIMITED /s/Herbjørn Hansson April 16, 2020Name: Herbjørn Hansson Title: Chairman, President, and Chief Executive Officer 80NORDIC AMERICAN TANKERS LIMITEDTABLE OF CONTENTS_________________________________________________________________________________ Page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM – KPMG ASF-2 F-3 FINANCIAL STATEMENTS: Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017F-4 Consolidated Statements of Comprehensive Loss for the years ended December 31, 2019, 2018 and 2017F-5 Consolidated Balance Sheets as of December 31, 2019 and 2018F-6 Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2019, 2018 and 2017F-7 Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017F-8 Notes to Consolidated Financial StatementsF-9F-1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsNordic American Tankers Limited:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of Nordic American Tankers Limited and subsidiaries (the Company) as of December 31, 2019 and 2018, the relatedconsolidated statements of operations, comprehensive loss, shareholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2019, and the relatednotes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of theCompany as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2019, in conformity withU.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financialreporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of theTreadway Commission, and our report dated April 16, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.Change in Accounting PrincipleAs discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for revenue from contracts with customers in 2018 due to the adoptionof ASC Topic 606 – Revenue From Contracts With Customers.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statementsbased on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federalsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether theconsolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatementof the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimatesmade by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion./s/ KPMG ASWe have served as the Company’s auditor since 2015.Oslo, NorwayApril 16, 2020F-2Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsNordic American Tankers Limited:Opinion on Internal Control Over Financial ReportingWe have audited Nordic American Tankers Limited and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2019, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in allmaterial respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued bythe Committee of Sponsoring Organizations of the Treadway Commission.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Companyas of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive loss, shareholders’ equity, and cash flows for each of the years in the three-yearperiod ended December 31, 2019, and the related notes (collectively, the consolidated financial statements), and our report dated April 16, 2020 expressed an unqualified opinion on thoseconsolidated financial statements.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financialreporting, included in the accompanying management's annual report on internal control over financial reporting. Our responsibility is to express an opinion on the Company’s internalcontrol over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company inaccordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whethereffective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding ofinternal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based onthe assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis forour opinion.Definition and Limitations of Internal Control Over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies andprocedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to futureperiods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate./s/ KPMG ASOslo, NorwayApril 16, 2020F-3NORDIC AMERICAN TANKERS LIMITEDCONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017All figures in USD ‘000, except share and per share amount Year Ended December 31, 2019 2018 2017 Voyage Revenues 317,220 289,016 297,141 Voyage Expenses (141,770) (165,012) (142,465)Vessel Operating Expenses (66,033) (80,411) (87,663)Impairment Loss on Vessels - (2,168) (110,480)Impairment Loss on Goodwill - - (18,979)Loss on Disposal of Vessels - (6,619) - General and Administrative Expenses (13,481) (12,727) (12,575)Depreciation Expense (63,965) (60,695) (100,669)Net Operating Income (Loss) 31,971 (38,616) (175,690)Interest Income 298 334 347 Interest Expenses (38,390) (34,549) (20,464)Other Financial Expenses (4,160) (14,729) (644)Total Other Expenses (42,252) (48,944) (20,761)Net Loss Before Income Taxes and Equity Loss (10,281) (87,560) (196,451)Income Tax Expense (71) (79) (83)Equity Loss from Associate - (7,667) (8,435)Net Loss (10,352) (95,306) (204,969) Basic and Diluted Loss per Share (0.07) (0.67) (1.97)Basic and Diluted Average Number of Common Shares Outstanding 142,571,361 141,969,666 103,832,680 Cash Dividends per Share 0.10 0.07 0.53 The accompanying notes are an integral part of these consolidated financial statements.F-4NORDIC AMERICAN TANKERS LIMITEDCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017All figures in USD ‘000, except share and per share amount Year Ended December 31, 2019 2018 2017 Net Loss (10,352) (95,306) (204,969)Other Comprehensive Loss Translation Differences (498) (172) 110 Unrealized Gain (Loss) on Defined benefit plan 420 40 (260)Other Comprehensive Loss (78) (132) (150)Total Comprehensive Loss (10,430) (95,438) (205,119) The accompanying notes are an integral part of these consolidated financial statements.F-5NORDIC AMERICAN TANKERS LIMITEDCONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2019 AND 2018All figures in USD ‘000, except share and per share amount As of December 31, Assets 2019 2018 Current Assets Cash and Cash Equivalents 48,847 49,327 Restricted Cash 12,791 - Accounts Receivable, Net 24,583 22,102 Accounts Receivable, Related Party - 492 Prepaid Expenses 3,383 3,830 Prepaid Expenses 3,383 3,830 Inventory 22,475 20,291 Voyages in Progress 13,124 15,075 Investment Securities 825 - Other Current Assets 3,344 1,828 Total Current Assets 129,372 112,945 Non-Current Assets Vessels 899,997 953,758 Investment Securities - 4,197 Other Non-Current Assets 1,534 211 Total Non-Current Assets 901,531 958,166 Total Assets 1,030,903 1,071,111 Liabilities and Shareholders’ Equity Current Liabilities Accounts Payable 8,405 3,575 Accrued Voyage Expenses 11,524 5,063 Other Current Liabilities 15,562 8,960 Current Portion of Long-Term Debt 23,537 18,692 Total Current Liabilities 59,028 36,290 Non - Current Liabilities Long-Term Debt 375,364 417,836 Operating Lease Liabilities 934 - Deferred Compensation Liability 153 14,954 Total Non-Current Liabilities 376,451 432,790 Commitment and Contingencies - - Shareholders’ Equity Common Stock, par value $0.01 per share360,000,000 authorized, 147,230,634 and 141,969,666 issued and outstanding at December 31, 2019 and December 31, 2018, respectively. 1,472 1,420 Additional Paid-In Capital 38,499 123,852 Contributed Surplus 567,202 786,881 Accumulated Other Comprehensive Loss (1,397) (1,319)Accumulated Deficit (10,352) (308,803)Total Shareholders’ Equity 595,424 602,031 Total Liabilities and Shareholders’ Equity 1,030,903 1,071,111 The accompanying notes are an integral part of these consolidated financial statements.F-6NORDIC AMERICAN TANKERS LIMITEDCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017All figures in USD ‘000, except number of shares Number ofShares TreasuryShares CommonStock AdditionalPaid-InCapital ContributedSurplus AccumulatedOtherComprehensiveLoss RetainedEarnings(AccumulatedDeficit) TotalShareholders’Equity Balance at January 1, 2017 101,969,666 13,500 1,020 235,050 640,472 (1,037) (4,456) 871,049 Net Loss - - - - - - (204,969) (204,969)Reduction of share premium - - - (215,481) 215,481 - - - Common Shares Issued, net of $0.8million issuance cost 40,000,000 - 400 103,348 - - - 103,748 Other Comprehensive Loss - - - - - (150) - (150)Share Based Compensation - (4,500) - 522 - - - 522 Forfeited shares – 2011 Equity IncentivePlan - 13,000 - - - - - - Dividends Distributed - - - - (59,136) - - (59,136)Balance at December 31, 2017 141,969,666 22,000 1,420 123,439 796,817 (1,187) (209,425) 711,064 Effect of change in accounting policy(ASC 606) - - - - - (4,072) (4,072)Adjusted balance at January 1, 2018 141,969,666 22,000 1,420 123,439 796,817 (1,187) (213,497) 706,992 Net Loss - - - - - - (95,306) (95,306)Other Comprehensive Loss - - - - - (132) - (132)Share Based Compensation - - - 413 - - - 413 Dividends Distributed - - - - (9,936) - - (9,936)Balance at December 31, 2018 141,969,666 22,000 1,420 123,852 786,881 (1,319) (308,803) 602,031 Net Loss - - - - - - (10,352) (10,352)Coverage of Accumulated Deficit as ofDecember 31, 2018 - - - - (308,803) - 308,803 - Reduction of Share Premium - - - (103,379) 103,379 - - - Common Shares Issued, net of $0.5million issuance cost 5,260,968 - 52 17,870 - - - 17,922 Other Comprehensive Loss - - - - - (78) - (78)Share Based Compensation - - - 156 - - - (156)Forfeited shares – 2011 Equity IncentivePlan - 20,000 - - - - - - Dividends Distributed - - - - (14,255) - - (14,255)Balance at December 31, 2019 147,230,634 42,000 1,472 38,499 567,202 (1,396) (10,352) 595,424 The accompanying notes are an integral part of these consolidated financial statements.F-7NORDIC AMERICAN TANKERS LIMITEDCONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017All figures in USD ‘000 Year Ended December 31, Cash Flows from Operating Activities 2019 2018 2017 Net Loss (10,352) (95,306) (204,969)Reconciliation of Net Loss to Net Cash Provided by Operating Activities Depreciation Expense 63,965 60,695 100,669 Impairment Loss on Vessels - 2,168 110,480 Impairment Loss on Goodwill - - 18,979 Loss on Disposal of Vessels - 6,619 - Equity Loss from Associate - 7,667 8,435 Change in Fair Value of Investment Securities 3,160 Drydock Expenditure (4,158) (5,210) (18,776)Amortization of Deferred Finance Costs 4,291 15,350 1,393 Deferred Compensation Liabilities (10,970) (860) 1,303 Share-based Compensation 156 413 522 Other, net (66) 21 (163) Changes in Operating Assets and Liabilities Accounts Receivables (1,989) (357) (4,258)Accounts Receivables, Related Party - 237 (145)Inventory (2,184) 2,794 (2,200)Prepaid Expenses and Other Current Assets (1,068) 1,837 (904)Accounts Payable and Accrued Liabilities 10,122 (7,112) 1,072 Voyages in Progress 1,951 (5,059) 20,303 Net Cash Provided by / (Used In) Operating Activities 52,858 (16,103) 31,741 Cash Flows from Investing Activities Investment in Vessels (2,531) (4,810) (37,567)Investment in Other Fixed Assets - (60) - Sale of Vessels - 89,624 - Proceeds from Sale of Investment Securities 212 - - Investments in Associate - - (10,000)Dividends received from Associate - 300 1,041 Net Cash (Used In) / Provided by Investing Activities (2,319) 85,054 (46,526)Cash Flows from Financing Activities Proceeds from Issuance of Common Stock 17,922 - 103,748 Proceeds from Vessel Financing Newbuildings - 12,505 - Proceeds from Borrowing Activities 300,000 - - Repayments on Credit Facility (313,400) (78,242) (55,359)Repayment of Vessel financing 2018 Newbuildings (7,273) (2,361) - Repayments on Borrowing Facility (14,324) - - Transaction Costs Borrowing Facilities (6,921) - (13,125)Dividends Distributed (14,255) (9,936) (54,226)Net Cash (Used In) / Provided by Financing Activities (38,251) (78,034) (18,962)Net Increase / (Decrease) in Cash, Cash Equivalents, and Restricted Cash 12,288 (9,083) (33,747)Cash, Cash Equivalents, and Restricted Cash at Beginning of Year 49,327 58,359 92,170 Effect of Exchange Rate Changes on Cash and Cash Equivalents 23 51 (64)Cash, Cash Equivalents, and Restricted Cash at End of Year 61,638 49,327 58,359 Supplemental Disclosure of Cash Flow information Cash and Cash Equivalents 48,847 49,327 58,359 Restricted Cash 12,791 - - Total Cash, Cash equivalents and Restricted Cash Shown in the Statement of Cash Flows 61,638 49,327 58,359 Cash Paid for Taxes 79 83 102 Fair Value of Shares Distributed as Dividend in Kind - - 4,910 Cash Paid for Interest, Net of Amounts Capitalized 35,616 32,300 19,476 The accompanying notes are an integral part of these consolidated financial statements.F-8NORDIC AMERICAN TANKERS LIMITEDNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(All amounts in USD ‘000 except where noted)1.NATURE OF BUSINESSNordic American Tankers Limited (“NAT”) was formed on June 12, 1995 under the laws of the Islands of Bermuda. The Company’s shares trade under the symbol “NAT” on the NewYork Stock Exchange. The Company was formed for the purpose of acquiring and chartering out double-hull tankers.The Company is an international tanker company that currently has a fleet of 23 Suezmax tankers. The Company has not disposed of or acquired new vessels in 2019. The 23 vessels theCompany operated per December 31, 2019, average approximately 156,000 dwt each. In 2019, 2018 and 2017, the Company chartered out its operating vessels primarily in the spot market.The Company’s FleetThe Company’s current fleet consists of 23 Suezmax crude oil tankers of which the vast majority have been built in Korea.VesselBuilt inDeadweight TonsDelivered to NAT in Nordic Freedom2005159,3312005Nordic Moon2002160,3052006Nordic Apollo2003159,9982006Nordic Cosmos2003159,9992006Nordic Grace2002149,9212009Nordic Mistral2002164,2362009Nordic Passat2002164,2742010Nordic Vega2010163,9402010Nordic Breeze2011158,5972011Nordic Zenith2011158,6452011Nordic Sprinter2005159,0892014Nordic Skier2005159,0892014Nordic Light2010158,4752015Nordic Cross2010158,4752015Nordic Luna2004150,0372016Nordic Castor2004150,2492016Nordic Sirius2000150,1832016Nordic Pollux2003150,1032016Nordic Star2016159,0002016Nordic Space2017159,0002017Nordic Tellus2018157,0002018Nordic Aquarius2018157,0002018Nordic Cygnus2018157,0002018 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of Accounting: These consolidated financial statements (“financial statements”) have been prepared in accordance with accounting principles generally accepted in the UnitedStates of America (“U.S. GAAP”).F-9Reclassifications: The Company has reclassified certain amounts relating to its presentation of cash flows for 2017 to conform to its current period presentation. These reclassificationshave not changed the results of operations of prior periods.Principles of Consolidation: Entities in which NAT has controlling financial interest are consolidated. Subsidiaries are consolidated from the date on which control is obtained. Thesubsidiaries’ accounting policies are in conformity with U.S. GAAP. All intercompany balances and transactions have been eliminated in the consolidation.Use of Estimates: Preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assetsand liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.Actual results could differ from those estimates. The effects of changes in accounting estimates are accounted for in the same period in which the estimates are changed.Foreign Currency Translation: The functional currency of NAT is the United States (“U.S.”) dollar as substantially all revenues are nominated in U.S. dollars and the majority of theexpenditures are incurred and paid in U.S. dollars. Transactions in foreign currencies during the year are translated into U.S. dollars at the rates of exchange in effect at the date of thetransaction. The Company’s subsidiaries of NAT Chartering Ltd, NAT Chartering AS, and the European branch of Scandic American Shipping Ltd, have Norwegian kroner as theirfunctional currency. All assets and liabilities of those entities are translated into U.S. dollars as of each balance sheet date. Translation gains and losses are reflected in shareholders’equity as part of accumulated other comprehensive loss.Revenue and Expense Recognition: Revenues and expenses are recognized on the accruals basis. Revenues are generated from spot and time charters.Spot Charters: For vessels operating on spot charters, voyage revenues are recognized ratably over the estimated length of each voyage, on a load-to-discharge basis and, therefore,are allocated between reporting periods based on the relative transit time in each period. Voyage expenses are capitalized between the discharge port of the immediately previous cargo,or contract date if later, and the load port of the cargo to be chartered if they qualify as fulfillment costs. Incremental cost to obtain a contract is capitalized and amortized ratably over theestimated length of each voyage, calculated on a load-to-discharge basis. The impact of recognizing voyage expenses ratably over the length of each voyage is not materially differenton a quarterly and annual basis from a method of recognizing such costs as incurred. Expected losses that are deemed probable on voyages are provided for in full at the time suchlosses can be estimated. A voyage is deemed to commence upon loading of cargo and is deemed to end upon the completion of discharge of the same cargo. The Company does notcapitalize fulfilment cost or recognize revenue if a charter has not been contractually committed to by a customer.As the Company’s performance obligations are services which are received and consumed by our customers as we perform such services, revenues are recognized over timeproportionate to the days elapsed since the service commencement compared to the total days anticipated to complete the service. Freight is generally billed to the customers after thecargo has been discharged and the performance obligation fulfilled by the Company. The Company is responsible for paying voyage expenses and the charterer is responsible for anydelay at the load and discharge ports. Demurrage earned during a spot charter represents a variable consideration. The Company recognizes such revenues in the voyage estimates onlyto the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Voyage estimates are reviewed and updated over the duration ofthe spot charter contract. When the Company’s tankers are operating on spot charters the vessels are traded fully at the risk and reward of the Company. The Company considers itappropriate to present the gross amount of earned revenue from the spot charter, showing voyage expenses related to the voyage separately in the Statements of Operations.In 2017, before the adoption of Topic 606 on January 1, 2018, the Company recognized voyage revenues ratably over the estimated length of each voyage, on a discharge-to-dischargebasis.F-10Time Charters: Under a time charter, the charterer pays for the voyage expenses, such as port, canal and fuel costs, while the Company pays for vessel operating expenses, including,among other costs, crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs and costs relating to a vessel’s intermediate and special surveys.Revenues from time charter contracts where the Company is a lessor are accounted for as fixed rate operating leases under ASC 842 Leases and are recognized daily over the term of thecharter. Time charter agreements with profit-sharing are recognized when the contingency related to it is resolved. The Company has applied the practical expedient to not separatenonlease components from the associated lease component and instead to account for those components as a single component if the nonlease component otherwise would beaccounted for under the new revenue guidance (ASC 606); and both of the following are met: (1) the timing and patterns of transfer of the nonlease component and associated lease arethe same; and (2) the lease component, if accounted for separately, would be classified as an operating lease. The pattern of revenue recognition has not changed as a result ofimplementation of ASC 842 Leases.Vessel Operating Expenses: Vessel operating expenses include crewing, repair and maintenance, insurance, stores, lubricants, management fee, communication expenses and tonnagetax. These expenses are recognized when incurred.Cash, Cash Equivalents and Restricted Cash: Cash and cash equivalents consist of highly liquid investments such as time deposits with original maturities when acquired of threemonths or less. Amounts included in restricted cash represent those required to be set aside by a contractual agreement with a banking institution for the payment of future estimateddrydocking expenditure related to the vessels used as collateral.Accounts Receivable, Net: Accounts receivable and other receivables are presented net of allowance for doubtful balances. The Company regularly reviews its accounts receivables andestimates the amount of uncollectible receivables each period and provides for an allowance for uncollectable amounts. The assessment of the allowance is based on the age of theunpaid receivables, financial status of the customer and other relevant information.Inventories: Inventories are comprised of bunker fuel and lubrication oil. Cost is determined on a first-in, first-out (“FIFO”) basis.Vessels: Vessels are stated at their historical cost, which consists of the contracted purchase price and any direct expenses incurred upon acquisition (including improvements, on sitesupervision expenses incurred during the construction period, commissions paid, delivery expenses and other expenditures to prepare the vessel for its initial voyage) less accumulateddepreciation. Financing costs incurred during the construction period of the vessels are capitalized and included in vessels’ cost based on the weighted-average method. Certainsubsequent expenditures for conversions and major improvements are capitalized if it is determined that they appreciably extend the life, increase the earning capacity or improve theefficiency or safety of the vessel. Depreciation is calculated based on cost less estimated residual value, and is expensed over the estimated useful life of the related assets using thestraight-line method. The estimated useful life of a vessel is 25 years from the date the vessel is delivered from the shipyard. Repairs and maintenance are expensed as incurred.Impairment of Vessels: The Company reviews for impairment long-lived assets held and used whenever events or changes in circumstances indicate that the carrying amount of theassets may not be recoverable. In this respect, the Company reviews its assets for impairment on a vessel by vessel basis. When the estimate of undiscounted cash flows, excludinginterest charges, expected to be generated by the use of the asset is less than its carrying amount, the Company evaluates the asset for impairment loss. The impairment loss isdetermined by the difference between the carrying amount of the asset and fair value (based on broker estimates). In developing estimates of future undiscounted cash flows, theCompany makes assumptions and estimates about the vessels’ future performance, with the significant assumptions being related to charter rates, fleet utilization, operating expenses,capital expenditures/periodical maintenance, residual value and the estimated remaining useful life of each vessel. The assumptions used to develop estimates of future undiscountedcash flows are based on historical trends as well as future expectations. The estimated net operating cash flows are determined by considering an estimated daily time charter equivalentfor the remaining operating days of the vessel, net of brokerage commissions, expected outflows for vessels’ maintenance and vessel operating expenses (including planned drydockingexpenditures). The Company estimates the daily time charter equivalent for the remaining operating days, utilizing available market data for spot market rates for the initial two-yearperiod and the most recent fifteen-year historical average for similar vessels for the remaining estimated life of the vessel. Useful economic life is assumed to be 25 years from the deliveryof the vessel from the shipyard. The salvage value used in the impairment test is estimated to be $8.0 million per vessel. If the Company’s estimate of undiscounted future cash flows forany vessel is lower than the vessel’s carrying value, the carrying value is written down, by recording an impairment charge.F-11Drydocking: The Company’s vessels are required to be drydocked approximately every 30 to 60 months. The Company capitalizes eligible costs incurred during drydocking andamortizes those costs on a straight-line basis from the completion of a drydocking or intermediate survey to the estimated completion of the next drydocking. Drydocking costs include avariety of costs incurred while vessels are placed within drydock, including expenses related to the dock preparation and port expenses at the drydock shipyard, general shipyardexpenses, expenses related to hull, external surfaces and decks, expenses related to machinery and engines of the vessel, as well as expenses related to the testing and correction offindings related to safety equipment on board. The Company includes in capitalized drydocking those costs incurred as part of the drydock to meet classification and regulatoryrequirements. The Company expenses costs related to routine repairs and maintenance performed during drydocking, and for annual class survey costs. Ballast tank improvements arecapitalized and amortized on a straight-line basis over a period of eight years. The capitalized and unamortized drydocking costs are included in the book value of the vessels.Amortization expense of the drydocking costs is included in depreciation expense.Leases: The Company bareboat charters certain vessels under leasing agreements. Sale-leaseback arrangements where the transaction is not considered a sale under ASC 606 areaccounted for as a financing transaction. Consideration received in such sale-leaseback arrangements is recorded as a financial liability. Each lease payment is allocated between liabilityand interest expense to achieve a constant rate on the financial liability outstanding. The interest element is charged as Interest Expense over the lease period. The Company has certainoffice lease contracts resulting in a right-of-use asset and a lease liability and the Company has applied an incremental borrowing rate as the discount rate to calculate the respectiveasset and liability. The Company determines if an arrangement is or contains a lease at contract inception. The Company recognizes a right-of-use (ROU) asset and a lease liability at thelease commencement date. For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencementdate. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencementdate, plus any initial direct costs incurred less any lease incentives received. For operating leases, the right-of-use asset is subsequently measured throughout the lease term at thecarrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Leaseexpense for lease payments is recognized on a straight-line basis over the lease term.Investments in Equity Method Investees: Investments in other entities where the Company has “significant influence” in accordance with U.S. GAAP are accounted for using the equitymethod of accounting. Under the equity method of accounting, the investment is stated at initial cost and is adjusted for subsequent additional investments and the Company’sproportionate share of earnings or losses and distributions. The Company evaluates its investment in equity method investees for impairment when events or circumstances indicatethat the carrying value of the investment may have experienced an other than temporary decline in value below its carrying value. If the estimated fair value is less than the carryingvalue and is considered an other than temporary decline, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in the Statements ofOperations.Investment Securities: Equity securities are recorded at fair value with changes in fair value recognized in net income.Goodwill: Goodwill represents the excess of costs over the fair value of the assets of businesses NAT has acquired. Goodwill is not amortized, but instead tested for impairment at thereporting unit level on an annual basis as of December 31, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of areporting unit below its carrying value. When goodwill is tested for impairment, the Company may elect to assess qualitative factors to determine whether it is more likely than not thatthe fair value of a reporting unit is less than its carrying amount, including goodwill. Alternatively, the Company may bypass this step and use a fair value approach to identify potentialgoodwill impairment and, when necessary, measure the amount of impairment. The Company uses a discounted cash flow model to determine the fair value of the reporting unit, unlessthere is a readily determinable fair market value.F-12Deferred Compensation Liability: The Company had two individual deferred compensation agreement with the Company’s CEO and a former CFO & EVP. The former CFO & EVP had anindividual deferred compensation agreement, denominated in Norwegian kroner, where further benefits did not accrue upon leaving the Company as of Dec 31, 2017. The liabilities havebeen accounted for on an accrual basis using actuarial calculations. Any currency translation adjustments as well as actuarial gains and losses have been recognized in general andadministrative expenses as incurred. Both agreements have been terminated in 2019 and we refer to note 7 for further information.Segment Information: The Company has identified only one operating segment. The Company has only one type of vessel – Suezmax crude oil tankers. The Company does not providea geographical analysis because the Company’s business is global in nature and the location of its vessels continually changes.Fair Value of Financial Instruments: The fair values of cash, cash equivalents and restricted cash, accounts receivable, accounts payable and accrued liabilities approximate carryingvalue because of the short-term nature of these instruments.Deferred Financing Costs: Financing costs, including fees, commissions and legal expenses are deferred and amortized over the term of the arrangement, which approximates theeffective interest method. Incurred fees related to loans not yet drawn are presented as Other non-current Assets. The deferred financing costs are accounted as a direct deduction fromthe associated debt liability.Share Based Compensation:Restricted sharesThe fair value of restricted shares to employees is estimated based on the market price of the Company’s shares. The fair value of restricted shares granted to employees is measured atgrant date and the Company records the compensation expense for such awards over the requisite service period.Stock optionsThe Company grants stock options as incentive-based compensation to certain employees. The Company measures the cost of such awards using the grant date fair value of the awardand recognizes that cost over the requisite service period.Income Taxes: The Company is incorporated in Bermuda. Under current Bermuda law, the Company is not subject to corporate income taxes. The statutory applicable rate toconsolidated corporate earnings is 0%.Two of the Company’s wholly-owned subsidiaries are located in Norway and are subject to income tax in that jurisdiction at 22%, 23%, and 24% for the years ended December 31, 2019,2018 and 2017, respectively, of their taxable profit. The income tax expensed for year ended December 31, 2019, 2018 and 2017 was $71,000, $79,000, and $83,000, respectively. Deferred taxassets related to these entities are inconsequential. The Company does not have any unrecognized tax benefits, material accrued interests or penalties related to income taxes.Concentration of Credit Risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accountsreceivable. The Company’s cash is primarily held in major banks and financial institutions and typically insured up to a set amount. Accordingly, the Company believes the risk of anypotential loss on deposits held in these institutions is remote. Concentrations of credit risk relative to accounts receivable are limited to our client base in the oil and energy industry thatmay be affected by changes in economic or other external conditions. The Company does not require collateral for its accounts receivable. The fair value of the financial instrumentsapproximates the net book value.For the year ended December 31, 2019, one customer accounted for 13.5% of the spot charter revenues. For the year ended December 31, 2018, one customer accounted for 10.5% of thespot charter revenues. For the year ended December 31, 2017, one customer accounted for 12% of the spot charter revenues.F-13Accounts receivable, Net, as of December 31, 2019, and 2018 were $24.6 and $22.1 million, respectively. As of December 31, 2019, three charterers accounted for 48% of the outstandingaccounts receivable, with 19%, 15% and 14%. As of December 31, 2018, three charterers accounted for 49% of the outstanding accounts receivable, with 24%, 13%, and 12%.Recent Accounting PronouncementsIn June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit losses (ASC 326), which amends the guidance on the impairment of financial instruments. The standard addsan impairment model known as the current expected credit loss ("CECL") model that is based on expected losses rather than incurred losses. Under the new guidance, an entity isrequired to recognize as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. Unlike the incurred loss modelsunder existing standards, the CECL model does not specify a threshold for the recognition of an impairment allowance. Rather, an entity will recognize its estimate of expected creditlosses for financial assets as of the end of the reporting period. Credit impairment will be recognized as an allowance or contra-asset rather than as a direct write-down of the amortizedcost basis of a financial asset. However, the carrying amount of a financial asset that is deemed uncollectible will be written off in a manner consistent with existing standards. Thestandard will be effective for the first reporting period within annual periods beginning after December 15, 2019 and early adoption is permitted. The Company does not expect anymaterial impact on our financial assets from implementation of this new guidance.Recently Adopted Accounting StandardsEffective January 1, 2019, the Company adopted ASC 842 Leases applying the modified retrospective method. We recognized an initial $1.9 million lease liability and a correspondingright-of-use lease asset to comply with the new lease standard. No cumulative effects have been recorded to the Company’s accumulated deficit. The comparative information has notbeen restated and continues to be reported under the accounting standards in effect for those prior periods (effective date method). The Company has applied the practical expedient fortime-charter out contracts that include both a lease component, consisting of the lease of the vessel, and a non-lease component, consisting of the operation of the vessel for thecustomer, to not separate non-lease components, or service element, from the associated lease component and instead to account for those components as a single component if thenon-lease component otherwise would be accounted for under the new revenue guidance (ASC 606); and both of the following are met: (1) the timing and patterns of transfer of the non-lease component and associated lease are the same; and (2) the lease component, if accounted for separately, would be classified as an operating lease.The right-of-use asset, presented in Other-Non Current Assets, and lease liability is related to leased office space and the reduction in the carrying amount of the right-of-use assetduring the twelve months ended December 31, 2019 has been $0.5 million. Certain of the Company’s lease contracts for office space include optional periods that are not included in theright-of-use asset and lease liability. The discount rate applied to the calculations is an incremental borrowing rate. The lease liability is presented in Other Current Liabilities andOperating Lease Liabilities and the lease cost is recognized in General and Administrative Expenses.ASC 842 allows lessees to elect as an accounting policy not to apply the provisions of ASC 842 to short term leases (i.e., leases with an original term of 12-months or less), which theCompany has applied. Instead, a lessee may recognize the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in whichthe obligation for those payments is incurred.F-14Effective January 1, 2018, the Company adopted Revenue from Contracts with Customers (ASC 606). The financial year ended December 31, 2019 is comparative with the financial yearended December 31, 2018, as the new revenue standard is applied consistently for both financial years. The financial year ended December 31, 2017 is presented under the previousrevenue recognition standard. On December 31, 2017 we had 19 vessels affected by the change in the revenue recognition standard that resulted in an adjustment to increase ouropening balance of accumulated deficit as of January 1, 2018 of $4.1 million. As of December 31, 2018, we had 15 vessels that were impacted by the new revenue recognition policy withan equivalent net increase of $6.3 million on accumulated deficit.Effect on the Consolidated Balance sheets as of December 31, 2018 In thousands of USD As reported Adjustments Amounts beforeASC606adoption ASSETS Total Current Assets 112,945 6,991 119,936 Voyages in Progress 15,075 8,111 23,186 Prepaid Expenses 3,830 (1,120) 2,710 Total Non-Current Assets 958,166 0 958,166 TOTAL ASSETS 1,071,111 6,991 1,078,102 EQUITY AND LIABILITIES Total Shareholders’ Equity 602,031 6,265 608,296 Total Current Liabilities 36,290 726 37,016 Accrued Voyage Expenses 5,063 726 5,789 Total Non-Current Liabilities 432,790 0 432,790 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 1,071,111 6,991 1,078,102 Effect on the Consolidated Statements of Operations as of December 31, 2018 In thousands of USD As reported Adjustments Amounts beforeASC606adoption Voyage Revenues 289,016 2,819 291,835 Voyage Expenses (165,012) (627) (165,639)Net Operating Loss (38,616) 2,193 (36,423)Net Loss (95,306) 2,193 (93,113)Total Comprehensive Loss (95,438) 2,193 (93,245)Effect on the Consolidated Statement of Cash Flows as of December 31, 2018 In thousands of USD As reported Adjustments Amounts beforeASC606adoption Net Loss (95,306) 2,193 (93,113)Voyages in Progress (5,059) (2,819) (7,879)Prepaid Expenses and Other Current Assets 1,837 503 2,340 Accounts Payable and Accrued Liabilities (7,112) 124 (6,988)Net Cash (Used In)/Provided by Operating Activities (16,103) - (16,103)No other new accounting policies have been adopted since December 31, 2018.F-153.VOYAGE REVENUESOur voyage revenues consist of time charter revenues and spot charter revenues with the following split:All amounts in USD ‘000 2019 2018 2017 Spot charter revenues* 283,007 259,978 257,495 Time charter revenues 34,213 29,038 39,646 Total Voyage Revenues 317,220 289,016 297,141 *Spot charter revenues for 2019 and 2018 are presented in accordance we ASC 606 Revenue from Contracts with Customers. The comparative information for 2017 has not been restated.The future minimum revenues as at December 31, 2019 related to time charter revenues are as follows:All amounts in USD ‘000 Amount 2020 27,932 2021 7,317 2022 - Future minimum revenues 35,249 Our voyage contracts have a duration of one year or less and we applied the exemption related to excluding the disclosure of remaining performance obligations.As of December 31, 2019 and December 31, 2018, the Company has capitalized fulfilment cost of $1.0 million and $1.1 million, respectively.4.VESSELSVessels consists of the carrying value of 23 vessels for the year ended December 31, 2019 and December 31, 2018, respectively. Vessels includes capitalized drydocking costs.Depreciation is calculated based on cost less estimated residual value of $8.0 million per vessel over the estimated useful life of the vessel using the straight-line method. The estimateduseful life of a vessel is 25 years from the date the vessel is delivered from the shipyard.All figures in USD ‘000 2019 2018 Vessels as of January 1 1,307,087 1,769,967 Additions Vessels 2,531 169,446 Disposals Vessels - (632,326)Drydocking as of January 1 52,331 119,303 Additions Drydocking 7,618 8,210 Disposals Drydocking - (75,182)Total Vessels and Drydocking 1,369,567 1,359,418 Less Accumulated Depreciation (469,570) (405,660)*Less Accumulated Impairment Loss on Vessels - -**Vessels 899,997 953,758 *Depreciation charges of $497.0 million related to vessels disposed of in 2018 is excluded** Impairment charges of $2.2 million and $110.5 million related to vessels disposed of in 2018 is excludedThe Company has taken three vessels through periodical maintenance surveys in 2019 and further two vessels were in drydock for periodical maintenance as at December 31, 2019.F-16Impairment Loss on VesselsThe Company has not recorded any impairment loss on vessels for the year ended December 31, 2019. The Company recorded an impairment loss of $2.2 million and $110.5 million for theyears ended December 31, 2018 and December 31, 2017, respectively.The Company reviewed its assets for impairment on an asset by asset basis. In determining whether the assets are recoverable, the Company compared the estimate of the undiscountedcash flows expected to be generated by the assets to its carrying value. As of December 31, 2019, it was determined that the sum of the undiscounted cash flows for each vesselexceeded its carrying value and no impairment was recorded.In developing estimates of future undiscounted cash flows, we made assumptions and estimates based on historical trends as well as future expectations. The most importantassumption in determining undiscounted cash flows are the estimated freight rates. Freight rates are volatile and the analysis is based on market rates obtained from third parties, incombination with historical achieved rates by the Company.5.INVESTMENT SECURITIESHermitage Offshore Services Ltd. (“HOS”) (formerly known as Nordic American Offshore Ltd) was incorporated in 2013, and operates ten platform supply vessels, eleven crew boats andtwo anchor handling vessels. HOS is listed on the New York Stock Exchange under the ticker “PSV”. NAT has sold 187,815 shares in HOS during the year and is holding 811,538 sharesas of December 31, 2019 that is equaling about 3.16% of the common shares outstanding in HOS as of December 31, 2019. The reduction in ownership is a result of non-participation inseveral equity offerings in HOS during 2019 together with the abovementioned sale of shares.The carrying value of the investment per December 31, 2019 and 2018 is $0.8 million and $4.2 million, respectively, based on the share price. The Company has disposed of shares for aconsideration of $0.2 million in 2019 and recognized a loss of $3.2 million and zero in earnings from changes in fair market value for the periods ending December 31, 2019 and 2018,respectively.6.RELATED PARTY TRANSACTIONSHermitage Offshore Services Ltd (formerly Nordic American Offshore Ltd) (“HOS”):In December 2013, the Company entered into a management agreement with HOS for the provision of administrative services. For services under the management agreement, NATreceived a management fee of $83,000, $100,000, $100,000 for 2019, 2018 and 2017, respectively, and is reimbursed for cost incurred in connection with its services. NAT also receivesreimbursement for a portion of the operational costs such as salary and office rent, among others, incurred by NAT, which is attributable to HOS. For the year ended December 31, 2019,2018 and 2017, the Company recognized an aggregate of $0.9 million, $2.3 million and $2.3 million, respectively, for such costs incurred which was included in General and AdministrativeExpenses.The management agreement was terminated as of June 30, 2019 and ended on October 31, 2019. NAT holds less than 5% of the shares in Hermitage Offshore Services Ltd as of December31, 2019, as a result of being diluted through equity offerings in late 2018 and throughout 2019, and HOS is no longer considered to be a related party of NAT.F-17Board Members and Employees:In 2014, the Company entered into an agreement with a company owned by a Board member for the use of an asset for corporate and marketing activities. The Company paid a fixedannual fee and fees associated with actual use. This agreement was terminated in 2017. In 2019, 2018 and 2017, use of the asset was paid for upon utilization and the Company recognizedan expense $0.3 million, $0.4 million and $0.2 million, respectively. No amounts were due to the related party as of December 31, 2019, 2018 or 2017 related to use of the asset. As ofDecember 31, 2019 and December 31, 2018, the Company has a receivable of $0.3 million and $0.2 million, respectively, related to prepayments to our Chairman.7.DEFERRED COMPENSATION LIABILITYIn 2007 and 2010, the Board of Directors approved an unfunded deferred compensation agreement for the Chairman, President and CEO and the Company’s former Chief Financial Officerand Executive Vice President. The agreements provided for unfunded deferred compensation computed as a percentage of salary, and certain benefits for dependents.The Company has entered into a final settlement agreement with the former CFO to terminate the compensation agreement with a corresponding payment made by March 31, 2020. Werefer to note 11 for further information.The agreement for the Chairman, President and CEO was amended in 2017 for the benefits to vest over a period of employment of 15 years up to a maximum of 66% of the salary level atthe time of retirement, age of 72. The Company had a restricted deposit account of $10.0 million for securing the financing of this deferred compensation liability as at December 31, 2016,but the restriction was lifted in 2017, 2018 and 2019. The Company has entered into a final settlement agreement to terminate the compensation agreement with a corresponding paymentmade of $11.0 million.The total expense (gain) related to the deferred compensation agreements for the Chairman, President and CEO and the Company’s former Chief Financial Officer and Executive VicePresident, recognized in 2019, 2018 and 2017 were $(0.2) million, $(0.7) million and $1.0 million, respectively.8.OTHER NON-CURRENT ASSETS All figures in USD ‘000 2019 2018 Fixture, Furniture and Equipment 65 128 Right of Use Asset* 1,412 - Other 57 83 Total as of December 31, 1,534 211 * relates to certain office lease contracts. Optional periods are not included in the calculation.9.SHARE-BASED COMPENSATION PLANEquity Incentive PlanIn 2011, the Board of Directors decided to establish an incentive plan involving a maximum of 400,000 shares pursuant to a vesting schedule of which all shares were allocated among themanagement of the Company and the members of the Board of Directors. The shares are forfeited if the grantee leaves the Company before the shares are vested. The holders of theshares are entitled to voting rights as well as to receive dividends paid during the trade restriction period.In December 2015, the Board of Directors amended and restated the 2011 Equity Incentive Plan to reserve an additional 137,665 shares for issuance to persons employed in themanagement of the Company and members of the Board of Directors under the same terms as the original plan. F-18 Options with two year vesting Options with three year vestingVolatility57.5%52.5%Dividend yield10.0 %10.0%Risk-free interest rate1.64%1.65%Weighted-average grant date fair value$0.59$0.58As of December 31, 2019, a total of 92,165 common shares with a weighted average grant date fair value of $14.38 have been allocated with a remaining unrecognized cost related tounvested shares of nil. A total of 87,665 common shares vested on January 8, 2020.The Company held 22,000 treasury shares as of December 31, 2018 from forfeitures and further 20,000 common shares have forfeited from employees in 2019. The Company held 42,000common shares as treasury shares as of December 31, 2019.The compensation expense is recognized on a straight-line basis over the vesting period and is recorded as part of General and Administrative expenses. The total compensationexpense related to common shares under the plan was $0.1 million, $0.4 million, and $0.5 million for the years ended December 31, 2019, December 31, 2018 and December 31, 2017,respectively.Stock Option Award AmendmentThe Board of Directors has in 2019 amended and restated the 2011 Equity Incentive Plan to reserve an additional 1,000,000 stock options for issuance. The stock options have beenallocated amongst management and employees of the Company.As of December 31, 2019, the Company has granted 755,000 and 234,000 options with vesting over a period of two and three years, respectively, and an exercise price of $4.70 per share.The Company has used the Black-Scholes option pricing model to measure the grant date fair value of the options with the following assumptions applied to the model;The expected volatility was based on historical volatility observed from historical company-specific data during the two years prior to the grant date.The compensation expense related to the stock option awards was $0.1 million for the year ended December 31, 2019 and the remaining unrecognized cost related to non-vested stockoptions was $0.5 million with a remaining average remaining vesting period of 2.1 years.10.LONG-TERM DEBT AND CURRENT PORTION OF LONG TERM DEBTCredit Facility and 2019 Senior Secured Credit Facility:In 2012, the Company entered into a $430 million revolving credit facility, which in 2015 was increased to $500 million, with a syndicate of lenders in order to refinance its existing creditfacility, fund future vessel acquisitions and for general corporate purposes (the "Credit Facility").The Company had $313.4 million borrowed as of December 31, 2018 under this credit facility. In connection with the expansion of the Credit Facility in 2015, the Company incurred $4.6million in deferred financing costs, which was amortized over the term of the loan and presented net of the outstanding loan balance. The remaining balance as of December 31, 2018 was$1.7 million, which has been expensed as Interest Expenses in 2019, upon the repayment on February 12, 2019, of the then remaining balance of $313.4 million of the Credit Facility.F-19On February 12, 2019 the Company entered into a new five-year senior secured credit facility for $306.1 million (the “2019 Senior Secured Credit Facility”) that refinanced the outstandingbalance on the Credit Facility as of that date. Borrowings under the 2019 Senior Secured Credit Facility are secured by first priority mortgages over the vessels (excluding the threevessels delivered in 2018, see description below) and assignments of earnings and insurance. The loan is amortizing with a twenty-year maturity profile, carries a floating LIBOR interestrate plus a margin and matures in February 2024. Further, the agreement contains a discretionary excess cash mechanism for the lender that equals 50% of the net earnings from thecollateral vessels, less capex provision and fixed loan amortization. The Company has incurred $13.0 million (including a non-cash portion of $6.1 million) in financing costs, which isamortized over the term of the loan and the outstanding loan balance was presented net of the costs. The agreement contains covenants that require a minimum liquidity of $30.0 millionand a loan-to-vessel value ratio of maximum 70%. We are free to distribute dividends as long as we comply with the described covenants.As of December 31, 2019, the Company had $291.8 million drawn under its 2019 Senior Secured Credit Facility, where $18.7 million has been presented as Current Portion of Long-TermDebt. This includes $3.4 million related to the excess cash flow mechanism payment related to earnings generated in the fourth quarter of 2019 and payable in the first quarter of 2020.The Company has incurred $13.0 million in financing cost, which is amortized over the term of the loan and presented net of the outstanding loan balance. The estimated fair value for thelong-term debt is considered to be approximately equal to the carrying value since it carries a variable interest rate. As of December 31, 2019 and as of the date of the issuance of thisreport, the Company is in compliance with the terms of the 2019 Senior Secured Credit Facility.The 2019 Senior Secured Credit Facility is amortizing with a twenty-year maturity profile and the Company has repaid $14.3 million of the facility in the twelve months ended December 31,2019. Subsequent to December 31, 2019, a further repayment of $7.3 million has been done and the outstanding balance as of the date of this report is $284.5 million.Financing of 2018 NewbuildingsThe three 2018 Newbuildings were delivered in July, August and October 2018, respectively. Under the terms of the financing agreement, the lender has provided financing of 77.5% ofthe purchase price for each of the three 2018 Newbuildings and paid the remaining payment obligations to Samsung shipyard that were due upon delivery of the vessels. Net proceeds of$12.5 million received from Ocean Yield ASA were used to pay down the drawn amount on the Credit Facility. Upon delivery of each of the vessels, the Company entered into ten-yearbareboat charter agreements. The Company has obligations to purchase each vessel for $13.6 million upon the completion of the ten-year bareboat charter agreements, and also has theoption to purchase the vessels after sixty and eighty-four months. The financing agreements for the three vessels have a total effective interest rate ranging from 6.50% to 6.72%including a floating LIBOR element that is subject to annual adjustment. The financing agreement contains certain financial covenants requiring us to on a consolidated basis to maintaina minimum value adjusted equity of $175.0 million and ratio of 25%, minimum liquidity of $20.0 million; and a minimum vessel value to outstanding lease clause.The outstanding amount under this financing arrangement was $119.9 million and $127.1 million as of December 31, 2019 and 2018, respectively, where $7.6 and $7.3 million has beenpresented as Current Portion of Long-Term Debt, respectively. The Company has incurred $2.3 million in financing cost, which is amortized over the term of the financing arrangementand presented net of the outstanding loan balance.F-20As of December 31, 2019 the aggregate annual principal payments required to be made under the Company’s debt facilities are as follows:Debt payments in $'000s Total 2020 2021 2022 2023 2024 More than 5years Senior Secured Credit Facility(1) 291,798 18,749 15,305 15,305 15,305 227,134 - Financing of 2018Newbuildings (2) 119,867 7,630 7,960 8,327 8,711 9,138 78,101 Total 411,665 26,379 23,265 23,632 24,016 236,272 78,101 (1)Refers to obligation to repay indebtness outstanding as of December 31, 2019 under the 2019 Senior Secured Credit Facility(2)Refers to obligation to repay indebtness outstanding as of December 31, 2019 for financing of the 2018 NewbuildingsLiquidity OutlookThe Company performs on a regular basis cash flow projections to evaluate whether it will be in a position to cover the liquidity needs for the next 12-month period and the compliancewith financial and security ratios under the existing and future financing agreements. In developing estimates of future cash flows, the Company makes assumptions about the vessels’future performance, market rates, operating expenses, capital expenditure, fleet utilization, general and administrative expenses, loan repayments and interest charges. The assumptionsapplied are based on historical experience and future expectations.On March 29, 2019, the Company entered into an equity distribution agreement with B. Riley FBR, Inc., acting as a sales agent, under which we may, from time to time, offer and sellshares of our common stock through an At-the-Market Offering (“ATM”) program having an aggregate offering price of up to $40,000,000. As of December 31, 2019, the Company hasraised gross and net proceeds (after deducting sales commissions and other fees and expenses) under the ATM of $18.6 million and $17.9 million, respectively, by issuing and selling5,260,968 common shares. As of the date of this annual report, no further sales have been completed under the ATM program.The Company believes that the current cash and cash equivalents and cash expected to be generated from operations, together with the measures described above, are sufficient to meetthe working capital needs and other liquidity requirements for the next 12 months from the date of this report.11.INTEREST EXPENSESInterest expenses consist of interest expense on the long-term debt, the commitment fee and amortization of deferred financing costs related to the Credit Facility described in Note 9.All amounts in USD ‘000 2019 2018 2017 Interest Expenses, net of capitalized interest 34,018 29,753 18,286 Commitment Fee - 3,325 760 Amortization of Deferred Financing Costs 4,372 1,470 1,393 Other financial costs - 1 25 Total Interest Expenses 38,390 34,549 20,464 For the years ended December 31, 2019, 2018 and 2017, $0.0 million, $2.6 million and $2.5 million of interest expenses were capitalized, respectively.F-2112.ACCRUED LIABILITIESAll figures in USD ‘000 2019 2018 Accrued Interest 163 1,598 Accrued Expenses 11,569 7,362 Settlement Deferred Compensation Liabilities 3,830 - Total as of December 31, 15,562 8,960 The settlement of the deferred compensation liabilities includes the settlement with our former CFO and Executive Vice President that is payable within March 31, 2020 and payroll taxesrelated to this settlement and the settlement of the Executive Pension Plan with our Chairman, President & CEO. We refer to note 7 for further information.13.EARNINGS (LOSS) PER SHAREBasic earnings per share (“EPS”) are computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period. Diluted EPS is computed bydividing net income by the weighted-average number of common shares and dilutive common stock equivalents outstanding during the period.All figures in USD except number of shares and earnings (loss) per common share 2019 2018 2017 Numerator: Net Loss (10,352) (95,306) (204,969)Denominator: Basic - Weighted Average Common Shares Outstanding 142,571,361 141,969,666 103,832,680 Dilutive – Weighted Average Common Shares Outstanding 142,571,361 141,969,666 103,832,680 Loss per Common Share: Basic (0.07) (0.67) (1.97)Diluted (0.07) (0.67) (1.97)On March 29, 2019, the Company launched an ATM program of our common shares for up to $40.0 million. The Company has issued 5,260,968 shares with net proceeds of $17.9 millionunder its At-the-Market as of December 31, 2019. The Company has not issued any shares subsequent to the balance sheet date.The remaining available proceeds through the offering is $21.4 million as of the date of this report. Based on the share price of the Company of $3.47 per share as of April 3, 2020 it wouldhave resulted in 6,173,500 new shares being issued, if fully utilizing the remaining balance available through the ATM.F-2214.SHAREHOLDERS’ EQUITYAuthorized, issued and outstanding common shares roll-forward is as follows: AuthorizedShares Issued and Out-standing Shares Common Stock Balance as of January 1, 2017 180,000,000 101,969,666 1,020 Common Shares Issued in Follow-on Offering - 40,000,000 400 Balance as of December 31, 2017 180,000,000 141,969,666 1,420 Authorization of additional authorized shares 180,000,000 - - Balance as of December 31, 2018 360,000,000 141,969,666 1,420 At-the-Market Offering - 5,260,968 52 Balance as of December 31, 2019 360,000,000 147,230,634 1,472 In December 2017, the Company completed an underwritten public offering of 40,000,000 common shares which increased its equity by $103.7 million.In December 2018, the Annual General Meeting of the Company approved to increase the Company’s authorized share capital from $1.8 million to $3.6 million.During 2019, the Company has issued 5,260,968 shares through the ATM program and raised net proceeds of $17.9 million.Additional Paid-in CapitalIncluded in Additional Paid-in Capital is the Company’s Share Premium Fund as defined by Bermuda law. The Share Premium Fund cannot be distributed without complying with certainlegal procedures designed to protect the creditors of the Company, including public notice to its creditors and a subsequent period for creditor notice of concern, regarding theCompany’s intention, following shareholder approval, to transfer such funds to the Company’s Contributed Surplus Account and thereby make such funds available for distribution.On November 20, 2019, at the Company’s Annual General Meeting, the shareholders voted to reduce the Share Premium Fund by the amount of about $103.4 million. The reduction inshare premium did not result in a distribution to shareholders but rather, the surplus resulting from such reduction was credited to the Company's contributed surplus account. The legalprocedures related to this reduction were finalized in December 2019 upon which the amount became eligible for distribution.The Share Premium Fund was $17.9 million and $103.4 million as of December 31, 2019 and 2018, respectively. Credits and Charges to Additional Paid in Capital were a result of theaccounting for the Company’s share based compensation programs and issuance of shares.Contributed Surplus AccountThe Company’s Contributed Surplus Account as defined by Bermuda law, consists of amounts previously recorded as share premium, transferred to Contributed Surplus Account whenresolutions are adopted by the Company’s shareholders to make Share Premium Fund distributable or available for other purposes. As indicated by the laws governing the Company, theContributed Surplus Account can be used for dividend distribution and to cover accumulated losses from its operations.F-23The Company’s Board of Directors has in 2019 determined to transfer $308.8 million from the Contributed Surplus Account to cover Accumulated Deficits incurred as of December 31,2018. We refer to the information above related to the reduction of $103.3 million of the Share Premium Fund that was credited to the Company’s Contributed Surplus Account.For the year ended December 31, 2019 and December 31, 2018, the Company paid a dividend of $14.3 million and $9.9 million, respectively, which was charged to the Contributed SurplusAccount. The Company’s Contributed Surplus account was $567.2 million and $796.8 million per December 31, 2019 and 2018, respectively.Shareholders’ Rights PlanOn June 16, 2017, the Board of Directors adopted a new shareholders’ rights agreement and declared a dividend of one preferred share purchase right to purchase one one-thousandth ofa Series A Participating Preferred Share of the Company for each outstanding common share, par value $0.01 per share. The dividend was payable on June 26, 2017 to shareholders ofrecord on that date. Each right entitles the registered holder to purchase from us one one-thousandth of a Series A Participating Preferred Share of the Company at an exercise price of$30.00, subject to adjustment. The Company can redeem the rights at any time prior to a public announcement that a person or group has acquired ownership of 15% or more of theCompany’s common shares. As at December 31, 2019, no shares were issued pursuant to the plan.This shareholders’ rights plan was designed to enable us to protect shareholder interests in the event that an unsolicited attempt is made for a business combination with, or a takeoverof, the Company. Our shareholders’ rights plan is not intended to deter offers that the Board determines are in the best interests of our shareholders.15.COMMITMENTS AND CONTINGENCIESThe Company may become a party to various legal proceedings generally incidental to its business and is subject to a variety of environmental and pollution control laws andregulations. As is the case with other companies in similar industries, the Company faces exposure from actual or potential claims and legal proceedings. Although the ultimatedisposition of legal proceedings cannot be predicted with certainty, it is the opinion of the Company’s management that the outcome of any claim which might be pending or threatened,either individually or on a combined basis, will not have a materially adverse effect on the financial position of the Company, but could materially affect the Company’s results ofoperations in a given year.No material claims have been filed against the Company for the fiscal years ended December 31, 2019 and 2018.16.FINANCIAL INSTRUMENTS AND OTHER FAIR VALUE DISCLOSURESThe majority of NAT and its subsidiaries’ transactions, assets and liabilities are denominated in United States dollars, the functional currency of the Company. There is no significant riskthat currency fluctuations will have a negative effect on the value of the Company’s cash flows.The Company categorizes its fair value estimates using a fair value hierarchy based on the inputs used to measure fair value for those assets that are recorded on the Balance Sheet atfair value. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value as follows:Level 1.Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.Level 2.Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; andLevel 3.Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.F-24The following methods and assumptions were used to estimate the fair value of each class of financial instruments and other financial assets.-The carrying value of cash and cash equivalents and marketable securities, is a reasonable estimate of fair value.-The estimated fair value for the long-term debt is considered to be equal to the carrying values since it bears spreads and variable interest rates which approximate market rates.The carrying value and estimated fair value of the Company`s financial instruments at December 31, 2019 and 2018, are as follows:All figures in USD ‘000 Fair ValueHierarchyLevel 2019FairValue 2019CarryingValue 2018FairValue 2018CarryingValue Recurring: Cash and Cash Equivalents 1 48,847 48,847 49,327 49,327 Restricted Cash 1 12,791 12,791 - - Credit Facility 2 - - (313,400) (313,400)2019 Senior Secured Credit Facility* 2 (291,798) (291,798) - - Investment Securities 1 825 825 4,197 4,197 Vessel financing 2018 Newbuildings* 2 (119,867) (119,867) (127,140) (127,140) * The 2019 Senior Secured Credit Facility and Vessel financing 2018 Newbuildings carry a floating LIBOR interest rate, plus a margin and the fair value is assumed to equal the carrying value.17.SUBSEQUENT EVENTSOn February 18, 2020, the Company declared a cash dividend of $0.07 per share in respect of the results for the fourth quarter of 2019. The dividend of $10.3 million was paid on March16, 2020.On March 18, 2020, the Company announced a share buy-back program with a scope of up to 4.5 million common shares.On March 24, 2020, the Company declared a cash dividend of $0.14 cent per share in respect of the results for the first quarter of 2020. The payment date will be June 5, 2020.In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (or COVID-19) as a pandemic. The Company has not yet experienced any material negativeimpacts to its business, results of operations, or financial position as a result of COVID-19. The future financial effects to the Company, if any, of COVID-19 cannot be reasonablyestimated at this time.F-25Exhibit 2.3DESCRIPTION OF THE REGISTRANT'S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934The following description sets forth certain material terms and provisions of Nordic American Tankers Limited's securities that are registered under Section 12 of the SecuritiesExchange Act of 1934, as amended.DESCRIPTION OF COMMON SHARESUnder our Memorandum of Association, as amended, our authorized capital consists of 360,000,000 common shares having a par value of $0.01 per share. The respectivenumber of common shares issued and outstanding as of the last day of the fiscal year for the annual report on Form 20-F to which this description is attached or incorporated byreference as an exhibit, is provided on the cover page of such annual report on Form 20-F.Our bye-laws permit us to increase our authorized share capital with the approval of a majority of votes cast in respect of our outstanding common shares represented in personor by proxy.There are no pre-emptive, redemption, conversion or sinking fund rights attached to our common shares. The holders of common shares are entitled to one vote per share on allmatters submitted to a vote of holders of common shares. Unless a different majority is required by law or by our bye-laws, resolutions to be approved by holders of common sharesrequire approval by a simple majority of votes cast at a meeting at which a quorum is present. Shareholders present in person or by proxy and entitled to vote at a meeting ofshareholders representing the holders of at least one-third of the issued shares entitled to vote at such general meeting shall be a quorum for all purposes.Under our bye-laws, our Board of Directors is authorized to attach to our undesignated shares such preferred, qualified or other special rights, privileges, conditions andrestrictions as the Board of Directors may determine. The Board of Directors may allot our undesignated shares in more than one series and attach particular rights and restrictions toany such shares by resolution; provided, however, that the Board of Directors may not attach any rights or restrictions to our undesignated shares that would alter or abrogate any ofthe special rights attached to any other class or series of shares without such sanction as is required for any such abrogation unless expressly authorized to do so by the rightsattaching to or by the terms of the issue of such shares.Subject to Bermuda law, special rights attaching to any class of our shares may be altered or abrogated with the consent in writing of not less than 75% of the issued shares ofthat class or with the sanction of a resolution of the holders of such shares voting in person or by proxy.In the event of our liquidation, dissolution or winding up, the holders of common shares are entitled to share in our assets, if any, remaining after the payment of all of our debtsand liabilities, subject to any liquidation preference on any outstanding preference shares.Our bye-laws provide that our Board of Directors may, from time to time, declare and pay dividends or distributions out of contributed surplus, which we refer to collectively asdividends. Each common share is entitled to dividends if and when dividends are declared by our Board of Directors, subject to any preferred dividend right of the holders of anypreference shares.There are no limitations on the right of non-Bermudians or non-residents of Bermuda to hold or vote our common shares.Bermuda law permits the bye-laws of a Bermuda company to contain a provision indemnifying the Company’s directors and officers for any loss arising or liability attaching tohim or her by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which the officer or person may be guilty, save with respect to fraud ordishonesty. Bermuda law also grants companies the power generally to indemnify directors and officers of a company, except in instances of fraud and dishonesty, if any such personwas or is a party or threatened to be made a party to a threatened, pending or completed action, suit or proceeding by reason of the fact that he or she is or was a director and officer ofsuch company or was serving in a similar capacity for another entity at such company’s request.Our Memorandum of Association may be amended with the approval of a majority of votes cast in respect of our outstanding common shares represented in person or by proxyand our bye-laws may be amended by approval by not less than 75% of the votes cast in respect of our issued and outstanding common shares represented in person or by proxy.Shareholder Rights AgreementOn June 16, 2017, our Board of Directors declared a dividend of one preferred share purchase right, or a Right, for each outstanding common share and adopted a shareholderrights plan, as set forth in the Shareholders Rights Agreement dated as of June 16, 2017, or the Rights Agreement, by and between the Company and Computershare Trust Company,N.A., as rights agent.The Board adopted the Rights Agreement to protect shareholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penaltyupon any person or group that acquires 15% or more of our outstanding common shares without the approval of the Board. If a shareholder’s beneficial ownership of our commonshares as of the time of the public announcement of the rights plan and associated dividend declaration is at or above the applicable threshold, that shareholder’s then-existingownership percentage would be grandfathered, but the rights would become exercisable if at any time after such announcement, the shareholder increases its ownership percentage by1% or more.The Rights may have anti-takeover effects. The Rights will cause substantial dilution to any person or group that attempts to acquire us without the approval of our Board ofDirectors. As a result, the overall effect of the Rights may be to render more difficult or discourage any attempt to acquire us. Because our Board of Directors can approve a redemptionof the Rights for a permitted offer, the Rights should not interfere with a merger or other business combination approved by our Board of Directors.For those interested in the specific terms of the Rights Agreement, we provide the following summary description. Please note, however, that this description is only a summary,and is not complete, and should be read together with the entire Rights Agreement, which is an exhibit to the Form 8-A filed by us on June 16, 2017 and incorporated herein by reference.The foregoing description of the Rights Agreement is qualified in its entirety by reference to such exhibit.The Rights. The Rights trade with, and are inseparable from, our common shares. The Rights are evidenced only by certificates that represent our common shares. New Rightswill accompany any new common shares of the Company issues after June 26, 2017 until the Distribution Date described below.Exercise Price. Each Right allows its holder to purchase from the Company one one-thousandth of a Series A Participating Preferred Share (a “Preferred Share”) for $30.00 (the“Exercise Price”), once the Rights become exercisable. This portion of a Preferred Share will give the shareholder approximately the same dividend, voting and liquidation rights as wouldone common share. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.Exercisability. The Rights are not exercisable until ten days after the public announcement that a person or group has become an “Acquiring Person” by obtaining beneficialownership of 15% or more of our outstanding common shares.Certain synthetic interests in securities created by derivative positions, whether or not such interests are considered to be ownership of the underlying common shares or arereportable for purposes of Regulation 13D of the Securities Exchange Act of 1934, as amended, are treated as beneficial ownership of the number of our common shares equivalent to theeconomic exposure created by the derivative position, to the extent our actual common shares are directly or indirectly held by counterparties to the derivatives contracts. Swaps dealersunassociated with any control intent or intent to evade the purposes of the Rights Agreement are exempt from such imputed beneficial ownership.For persons who, prior to the time of public announcement of the Rights Agreement, beneficially own 15% or more of our outstanding common shares, the Rights Agreement“grandfathers” their current level of ownership, so long as they do not purchase additional shares in excess of certain limitations.The date when the Rights become exercisable is the “Distribution Date.” Until that date, our common share certificates (or, in the case of uncertificated shares, by notations inthe book-entry account system) will also evidence the Rights, and any transfer of our common shares will constitute a transfer of Rights. After that date, the Rights will separate from ourcommon shares and will be evidenced by book-entry credits or by Rights certificates that the Company will mail to all eligible holders of our common shares. Any Rights held by anAcquiring Person are null and void and may not be exercised.Preferred Share ProvisionsEach one one-thousandth of a Preferred Share, if issued, will, among other things:•not be redeemable;•entitle holders to quarterly dividend payments in an amount per share equal to the aggregate per share amount of all cash dividends, and the aggregate per shareamount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in our common shares or a subdivision of our outstandingcommon shares (by reclassification or otherwise), declared on our common shares since the immediately preceding quarterly dividend payment date; and•entitle holders to one vote on all matters submitted to a vote of the shareholders of the Company.The value of one one-thousandth interest in a Preferred Share should approximate the value of one common share.Consequences of a Person or Group Becoming an Acquiring Person.•Flip In. If an Acquiring Person obtains beneficial ownership of 15% or more of our common shares, then each Right will entitle the holder thereof to purchase, for theExercise Price, a number of our common shares (or, in certain circumstances, cash, property or other securities of the Company) having a then-current market value oftwice the Exercise Price. However, the Rights are not exercisable following the occurrence of the foregoing event until such time as the Rights are no longer redeemableby the Company, as further described below.Following the occurrence of an event set forth in preceding paragraph, all Rights that are or were, under certain circumstances specified in the Rights Agreement, beneficially owned byan Acquiring Person or certain of its transferees will be null and void.•Flip Over. If, after an Acquiring Person obtains 15% or more of our common shares, (i) the Company merges into another entity; (ii) an acquiring entity merges into theCompany; or (iii) the Company sellsor transfers 50% or more of its assets, cash flow or earning power, then each Right (except for Rights that have previously been voided as set forth above) will entitle the holder thereofto purchase, for the Exercise Price, a number of our common shares of the person engaging in the transaction having a then-current market value of twice the Exercise Price.•Notional Shares. Shares held by affiliates and associates of an Acquiring Person, including certain entities in which the Acquiring Person beneficially owns a majorityof the equity securities, and Notional Common Shares (as defined in the Rights Agreement) held by counterparties to a Derivatives Contract (as defined in the RightsAgreement) with an Acquiring Person, will be deemed to be beneficially owned by the Acquiring Person.Redemption. The Board may redeem the Rights for $0.01 per Right at any time before any person or group becomes an Acquiring Person. If the Board redeems any Rights, itmust redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of the Rights will be to receive the redemption price of $0.01 per Right. The redemption pricewill be adjusted if the Company has a stock dividend or a stock split.Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of our outstanding common shares, the Board mayextinguish the Rights by exchanging one common share or an equivalent security for each Right, other than Rights held by the Acquiring Person. In certain circumstances, the Companymay elect to exchange the Rights for cash or other securities of the Company having a value approximately equal to one common share.Expiration. The Rights expire on the earliest of (i) June 16, 2027; or (ii) the redemption or exchange of the Rights as described above.Anti-Dilution Provisions. The Board may adjust the purchase price of the Preferred Shares, the number of Preferred Shares issuable and the number of outstanding Rights toprevent dilution that may occur from a stock dividend, a stock split, or a reclassification of the Preferred Shares or our common shares. No adjustments to the Exercise Price of less than1% will be made.Amendments. The terms of the Rights and the Rights Agreement may be amended in any respect without the consent of the holders of the Rights on or prior to the DistributionDate. Thereafter, the terms of the Rights and the Rights Agreement may be amended without the consent of the holders of Rights, with certain exceptions, in order to (i) cure anyambiguities; (ii) correct or supplement any provision contained in the Rights Agreement that may be defective or inconsistent with any other provision therein; (iii) shorten or lengthenany time period pursuant to the Rights Agreement; or (iv) make changes that do not adversely affect the interests of holders of the Rights (other than an Acquiring Person or an affiliateor associate of an Acquiring Person).Taxes. The distribution of Rights should not be taxable for federal income tax purposes. However, following an event that renders the Rights exercisable or upon redemption ofthe Rights, shareholders may recognize taxable income.Dividend Reinvestment and Direct Stock Purchase PlanOn November 6, 2013, a registration statement on Form F-3 was declared effective by the SEC relating to the Dividend Reinvestment Plan for 1,664,450 common shares to allowexisting shareholders to purchase additional common shares by reinvesting all or a portion of the dividends paid on their common shares. As at December 31, 2019, no new shares wereissued pursuant to the plan.ListingOur common shares are listed on the NYSE under the symbol “NAT.”Transfer AgentThe registrar and transfer agent for our common shares is Computershare Trust Company, N.A.Exhibit 4.11NORDIC AMERICAN TANKERS LIMITEDSECOND AMENDED AND RESTATED 2011 EQUITY INCENTIVE PLANARTICLE I.General1.1.PurposeThe Nordic American Tankers Limited Second Amended and Restated 2011 Equity Incentive Plan (the “Plan”), which amends and restates the Amended and Restated2011 Equity Incentive Plan (the “First Amended and Restated Plan”), which in turn amended and restated the 2011 Equity Incentive Plan (the “Original Plan”), is designed toprovide certain Key Persons (as defined below), whose initiative and efforts are deemed to be important to the successful conduct of the business of Nordic American TankersLimited (the “Company”), with incentives to (a) enter into and remain in the service of the Company or its Affiliates (as defined below), (b) acquire a proprietary interest in thesuccess of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company.1.2.Administration(a) Administration. The Plan shall be administered by the Company’s Board of Directors (the “Board”) or such committee of the Board as may be designatedby the Board to administer the Plan (the “Administrator”); provided that (i) in the event the Company is subject to Section 16 of the U.S. Securities Exchange Act of 1934, asamended (the “1934 Act”), the Administrator shall be composed of two or more directors, each of whom is a “Non-Employee Director” (a “Non-Employee Director”) underRule 16b-3 (as promulgated and interpreted by the Securities and Exchange Commission (the “SEC”) under the 1934 Act, or any successor rule or regulation thereto as in effectfrom time to time (“Rule 16b-3”)), and (ii) the Administrator shall be composed solely of two or more directors who are “independent directors” under the rules of any stockexchange on which the Company’s Common Stock (as defined below) is traded; provided further, however, that, (A) the requirement in the preceding clause (i) shall apply onlywhen required to exempt an Award (as defined below) intended to qualify for an exemption under the applicable provisions referenced therein, (B) the requirement in thepreceding clause (ii) shall apply only when required pursuant to the applicable rules of the applicable stock exchange and (C) if at any time the Administrator is not socomposed as required by the preceding provisions of this sentence, that fact will not invalidate any grant made, or action taken, by the Administrator hereunder that otherwisesatisfies the terms of the Plan. Subject to the terms of the Plan, applicable law, and the applicable rules and regulations of any stock exchange on which the Common Stock islisted for trading and in addition to other express powers and authorizations conferred on the Administrator by the Plan, the Administrator shall have the full power andauthority to: (1) designate the Key Persons to receive Awards under the Plan; (2) determine the types of Awards granted to a participant under the Plan; (3) determine thenumber of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards; (4) determine the terms andconditions of any Awards; (5) determine whether, and to what extent, and under what circumstances, Awards may be settled or exercised in cash, shares, other securities, otherAwards or other property, or cancelled, forfeited or suspended, and the methods by which Awards may be settled, exercised, cancelled, forfeited or suspended; (6) determinewhether, to what extent, and under what circumstances cash, shares, other securities, other Awards, other property and other amounts payable with respect to an Award shallbe deferred, either automatically or at the election of the holder thereof or the Administrator; (7) construe, interpret and implement the Plan and any Award Agreement (asdefined below); (8) prescribe, amend, rescind or waive rules and regulations relating to the Plan, including rules governing its operation, and appoint such agents as it shalldeem appropriate for the proper administration of the Plan; (9) correct any defect, supply any omission and reconcile any inconsistency in the Plan or any Award Agreement;and (10) make any other determination and take any other action that the Administrator deems necessary or desirable for the administration of the Plan. Unless otherwiseexpressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the solediscretion of the Administrator, may be made at any time and shall be final, conclusive and binding upon all Persons (as defined below).1(b) General Right of Delegation. Except to the extent prohibited by applicable law, the applicable rules of a stock exchange or any charter, bylaws or otheragreement governing the Administrator, the Administrator may delegate all or any part of its responsibilities to any Person or Persons selected by it; provided, however, that inno event shall an officer of the Company be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (i) individuals who are subject toSection 16 of the 1934 Act, to the extent applicable, or (ii) officers of the Company to whom authority to grant or amend Awards has been delegated hereunder or directors of theCompany; provided, further, that any delegation of administrative authority shall only be permitted to the extent it is permissible under applicable securities laws (including,without limitation, Rule 16b-3, to the extent applicable) and the rules of any applicable stock exchange. Any delegation hereunder shall be subject to the restrictions and limitsthat the Administrator specifies at the time of such delegation, and the Administrator may at any time rescind the authority so delegated or appoint a new delegatee. At alltimes, the delegatee appointed under this Section 1.2(b) shall serve in such capacity at the pleasure of the Administrator.(c) Indemnification. No member of the Board, the Administrator or any officer or employee of the Company or an Affiliate or any of their agents (each suchPerson, a "Covered Person") shall be liable for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award hereunder. Each Covered Person shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability or expense (including attorneys' fees) that may beimposed upon or incurred by such Covered Person in connection with or resulting from any action, suit or proceeding to which such Covered Person may be a party or in whichsuch Covered Person may be involved by reason of any action taken or omitted to be taken under the Plan or any Award Agreement and (ii) any and all amounts paid by suchCovered Person, with the Company's approval, in settlement thereof, or paid by such Covered Person in satisfaction of any judgment in any such action, suit or proceedingagainst such Covered Person; provided that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and, once theCompany gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company's choice. The foregoing rightof indemnification shall not be available to a Covered Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case notsubject to further appeal, determines that the acts or omissions of such Covered Person giving rise to the indemnification claim resulted from such Covered Person's bad faith,fraud, dishonesty or willful criminal act or omission or that such right of indemnification is otherwise prohibited by law or by the Company's memorandum of association or bye-laws (in each case, as amended and/or restated). The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which Covered Personsmay be entitled under the Company's memorandum of association or bye-laws (in each case, as amended and/or restated), as a matter of law, or otherwise, or any other powerthat the Company may have to indemnify such Persons or hold them harmless.(d) Delegation of Authority to Senior Officers. The Administrator may, in accordance with and subject to the terms of Section 1.2(b), delegate, on such termsand conditions as it determines, to one or more senior officers of the Company the authority to make grants of Awards to Key Persons who are employees of the Company andits Subsidiaries (as defined below)(including any such prospective employee) or consultants or service providers to (including Persons who are employed by or provideservices to any entity that is itself a consultant or service provider to) the Company and its Subsidiaries.(e) Awards to Non-Employee Directors. Notwithstanding anything to the contrary contained herein, the Board may, in its sole discretion, at any time and fromtime to time, grant Awards to Non-Employee Directors or administer the Plan with respect to such Awards. In any such case, the Board shall have all the authority andresponsibility granted to the Administrator herein with respect to such Awards.1.3.Persons Eligible for AwardsThe Persons eligible to receive Awards under the Plan are those directors, officers and employees (including any prospective officer or employee) of the Company andits Subsidiaries and Affiliates and consultants and service providers to (including Persons who are employed by or provide services to any entity that is itself a consultant orservice provider to) the Company and its Subsidiaries and Affiliates (collectively, “Key Persons”) as the Administrator shall select.21.4.Types of AwardsAwards may be made under the Plan in the form of (a) non-qualified stock options (i.e., stock options that are not “incentive stock options” for purposes ofSections 421 and 422 of the Code (as defined below)), (b) stock appreciation rights, (c) restricted stock, (d) restricted stock units, (e) dividend equivalents, (f) unrestricted stockand (g) other equity-based or equity-related Awards, all as more fully set forth in the Plan. The term “Award” means any of the foregoing that are granted under the Plan.1.5.Shares Available for Awards; Adjustments for Changes in Capitalization(a) Maximum Number. Subject to adjustment as provided in Section 1.5(c), the aggregate number of shares of common stock of the Company, parvalue US$0.01(“Common Stock”), with respect to which Awards may at any time be granted under the Plan shall be 1,537,665 (of which 137,665 were granted under the FirstAmended and Restated Plan, and 400,000 were granted under the Original Plan). The following shares of Common Stock shall again become available for Awards under thePlan: (i) any shares that are subject to an Award under the Plan and that remain unissued upon the cancellation or termination of such Award for any reason whatsoever; (ii) anyshares of restricted stock forfeited pursuant to the Plan or the applicable Award Agreement; provided that any dividend equivalent rights with respect to such shares that havenot theretofore been directly remitted to the grantee are also forfeited; and (iii) any shares in respect of which an Award is settled for cash without the delivery of shares to thegrantee. Any shares tendered or withheld to satisfy the grant or exercise price or tax withholding obligation pursuant to any Award shall again become available to be deliveredpursuant to Awards under the Plan.(b) Source of Shares. Shares issued pursuant to the Plan may be authorized but unissued Common Stock or treasury shares. The Administrator may directthat any stock certificate evidencing shares issued pursuant to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such shares.(c) Adjustments. (i) In the event that any dividend or other distribution (whether in the form of cash, Company shares, other securities or other property),stock split, reverse stock split, reorganization, merger, consolidation, split-up, combination, repurchase or exchange of Company shares or other securities of the Company,issuance of warrants or other rights to purchase Company shares or other securities of the Company, or other similar corporate transaction or event, other than an EquityRestructuring (as defined below), affects the Company shares such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution orenlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, then the Administrator shall, in such manner as itmay deem equitable, adjust any or all of the number of shares or other securities of the Company (or number and kind of other securities or property) with respect to whichAwards may be granted under the Plan.(ii) The Administrator is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition ofunusual or nonrecurring events (including the events described in Section 1.5(c)(i) or the occurrence of a Change in Control (as defined below), other than an EquityRestructuring) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable rules, rulings, regulations or otherrequirements of any governmental body or securities exchange, accounting principles or law, whenever the Administrator determines that such adjustments are appropriate inorder to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, including providing for(A) adjustment to (1) the number of shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards or to whichoutstanding Awards relate and (2) the Exercise Price (as defined below) with respect to any Award and (B) a substitution or assumption of Awards, accelerating theexercisability or vesting of, or lapse of restrictions on, Awards, or accelerating the termination of Awards by providing for a period of time for exercise prior to the occurrence ofsuch event, or, if deemed appropriate or desirable, providing for a cash payment to the holder of an outstanding Award in consideration for the cancellation of such Award (itbeing understood that, in such event, any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value (as defined below)of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); provided, however, that withrespect to options and stock appreciation rights, unless otherwise determined by the Administrator, such adjustment shall be made in accordance with the provisions ofSection 424(h) of the Code.3(iii) In the event of (A) a dissolution or liquidation of the Company, (B) a sale of all or substantially all the Company’s assets or (C) a merger,reorganization or consolidation involving the Company or one of its Subsidiaries, the Administrator shall have the power to:(1) provide that outstanding options, stock appreciation rights, restricted stock units (including any related dividend equivalent right) and/or other Awardsgranted under the Plan shall either continue in effect, be assumed or an equivalent award shall be substituted therefor by the successor entity or a parent entity or subsidiaryentity;(2) cancel, effective immediately prior to the occurrence of such event, options, stock appreciation rights, restricted stock units (including each dividendequivalent right related thereto) and/or other Awards granted under the Plan outstanding immediately prior to such event (whether or not then exercisable) and, in fullconsideration of such cancellation, pay to the holder of such Award a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified bythe Administrator) of the shares subject to such Award (or the value of such Award, as determined by the Administrator, if not based on the Fair Market Value of shares) overthe aggregate Exercise Price of such Award (or the grant price of such Award, if any, if applicable)(it being understood that, in such event, any option or stock appreciation righthaving a per share Exercise Price equal to, or in excess of, the Fair Market Value of a share subject to such option or stock appreciation right may be cancelled and terminatedwithout any payment or consideration therefor); or(3) notify the holder of an option or stock appreciation right in writing or electronically that each option and stock appreciation right shall be fully vested andexercisable for a period of 30 days from the date of such notice, or such shorter period as the Administrator may determine to be reasonable, and the option or stockappreciation right shall terminate upon the expiration of such period (which period shall expire no later than immediately prior to the consummation of the corporate transaction).(iv) In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in this Section 1.5(c):(A) The number and type of securities or other property subject to each outstanding Award and the Exercise Price or grant price thereof, ifapplicable, shall be equitably adjusted; and(B) The Administrator shall make such equitable adjustments, if any, as the Administrator may deem appropriate to reflect such EquityRestructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustment of thelimitation set forth in Section 1.5(a)). The adjustments provided under this Section 1.5(c)(iv) shall be nondiscretionary and shall be final and binding on theaffected participant and the Company.41.6.Definitions of Certain Terms(a) “Affiliate” shall mean (i) any entity that, directly or indirectly, is controlled by, controls or is under common control with, the Company and (ii) any entity inwhich the Company has a significant equity interest, in either case as determined by the Administrator.(b) Unless otherwise set forth in the applicable Award Agreement, in connection with a termination of employment or consultancy/service relationship or adismissal from Board membership, for purposes of the Plan, the term “for Cause” shall be defined as follows:(i) if there is an employment, severance, consulting, service, change in control or other agreement governing the relationship between the grantee, on theone hand, and the Company or an Affiliate, on the other hand, that contains a definition of “cause” (or similar phrase), for purposes of the Plan, the term “for Cause” shall meanthose acts or omissions that would constitute “cause” under such agreement; or(ii) if the preceding clause (i) is not applicable to the grantee, for purposes of the Plan, the term "for Cause" shall mean any of the following:(A) any failure by the grantee substantially to perform the grantee’s employment or consulting/service or Board membership duties;(B) any excessive unauthorized absenteeism by the grantee;(C) any refusal by the grantee to obey the lawful orders of the Board or any other Person to whom the grantee reports;(D) any act or omission by the grantee that is or may be injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise;(E) any act by the grantee that is inconsistent with the best interests of the Company or any Affiliate;(F) the grantee’s gross negligence that is injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise;(G) the grantee’s material violation of any of the policies of the Company or any Affiliate, as applicable, including, without limitation, those policies relating todiscrimination or sexual harassment;(H) the grantee’s material breach of his or her employment or service contract with the Company or any Affiliate;(I) the grantee’s unauthorized (1) removal from the premises of the Company or any Affiliate of any document (in any medium or form) relating to the Companyor any Affiliate or the customers or clients of the Company or any Affiliate or (2) disclosure to any Person of any of the Company’s, or any Affiliate’s, confidential or proprietaryinformation;(J) the grantee’s being convicted of, or entering a plea of guilty or nolo contendere to, any crime that constitutes a felony or involves moral turpitude; and(K) the grantee’s commission of any act involving dishonesty or fraud.Any rights the Company or any Affiliate may have under the Plan in respect of the events giving rise to a termination or dismissal “for Cause” shall be in addition to any otherrights the Company or any Affiliate may have under any other agreement with a grantee or at law or in equity. Any determination of whether a grantee’s employment orconsultancy/service relationship is (or is deemed to have been) terminated “for Cause” shall be made by the Administrator. If, subsequent to a grantee’s voluntary terminationof employment or consultancy/service relationship or involuntary termination of employment or consultancy/service relationship without Cause, it is discovered that thegrantee’s employment or consultancy/service relationship could have been terminated “for Cause”, the Administrator may deem such grantee’s employment orconsultancy/service relationship to have been terminated “for Cause” upon such discovery and determination by the Administrator.5(c) “Code” shall mean the Internal Revenue Code of 1986, as amended.(d) Unless otherwise set forth in the applicable Award Agreement, “Disability” shall mean the grantee’s being unable to engage in any substantial gainfulactivity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of notless than 12 months, or the grantee’s, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to lastfor a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan coveringemployees of the grantee’s employer. The existence of a Disability shall be determined by the Administrator.(e) “Equity Restructuring” shall mean a non-reciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, reversestock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the shares of Common Stock (or other securities of the Company)or the share price thereof and causes a change in the per share value of the shares underlying outstanding Awards.(f) “Exercise Price” shall mean (i) in the case of options, the price specified in the applicable Award Agreement as the price-per-share at which such share canbe purchased pursuant to the option or (ii) in the case of stock appreciation rights, the price specified in the applicable Award Agreement as the reference price-per-share usedto calculate the amount payable to the grantee.(g) The “Fair Market Value” of a share of Common Stock on any day shall be the closing price on the New York Stock Exchange, or such other primary stockexchange upon which such shares are then listed, as reported for such day in The Wall Street Journal (or, if not reported in The Wall Street Journal, such other reliable source asthe Administrator may determine), or, if no such price is reported for such day, the average of the high bid and low asked price of Common Stock as reported for such day. If noquotation is made for the applicable day, the Fair Market Value of a share of Common Stock on such day shall be determined in the manner set forth in the preceding sentencefor the next preceding trading day. Notwithstanding the foregoing, if there is no reported closing price or high bid/low asked price that satisfies the preceding sentences, or ifotherwise deemed necessary or appropriate by the Administrator, the Fair Market Value of a share of Common Stock on any day shall be determined by such methods andprocedures as shall be established from time to time by the Administrator. The “Fair Market Value” of any property other than Common Stock shall be the fair market value ofsuch property determined by such methods and procedures as shall be established from time to time by the Administrator.(h) "Person" shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, jointventure, joint stock company, governmental body or other entity of any kind.(i) “Repricing” shall mean (i) lowering the Exercise Price of an option or a stock appreciation right after it has been granted, (ii) the cancellation of an option ora stock appreciation right in exchange for cash or another Award when the Exercise Price exceeds the Fair Market Value of the underlying shares subject to the Award and(iii) any other action with respect to an option or a stock appreciation right that is treated as a repricing under (A) generally accepted accounting principles or (B) any applicablestock exchange rules.(j) “Subsidiary” shall mean any entity in which the Company, directly or indirectly, has a 50% or more equity interest.6ARTICLE II.Awards Under The Plan2.1.Agreements Evidencing AwardsEach Award granted under the Plan shall be evidenced by a written certificate (“Award Agreement”), which shall contain such provisions as the Administrator maydeem necessary or desirable and which may, but need not, require execution or acknowledgment by a grantee. The Award shall be subject to all of the terms and provisions ofthe Plan and the applicable Award Agreement.2.2.Grant of Stock Options and Stock Appreciation Rights(a) Stock Option Grants. The Administrator may grant non-qualified stock options (“options”) to purchase shares of Common Stock from the Company tosuch Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject tothe provisions of the Plan. No option will be treated as an “incentive stock option” for purposes of the Code. It shall be the intent of the Administrator to not grant an Awardin the form of stock options to any Key Person who is then subject to the requirements of Section 409A of the Code with respect to such Award if the Common Stockunderlying such Award does not then qualify as “service recipient stock” for purposes of Section 409A. Furthermore, it shall be the intent of the Administrator, in grantingoptions to Key Persons who are subject to Section 409A and/or 457 of the Code, to structure such options so as to comply with the requirements of Section 409A and/or 457 ofthe Code, as applicable.(b) Stock Appreciation Right Grants; Types of Stock Appreciation Rights. The Administrator may grant stock appreciation rights to such Key Persons, and insuch amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan. The terms of a stock appreciation right may provide that it shall be automatically exercised for a payment upon the happening of a specified event that is outside the control ofthe grantee and that it shall not be otherwise exercisable. Stock appreciation rights may be granted in connection with all or any part of, or independently of, any option grantedunder the Plan. It shall be the intent of the Administrator to not grant an Award in the form of stock appreciation rights to any Key Person (i) who is then subject to therequirements of Section 409A of the Code with respect to such Award if the Common Stock underlying such Award does not then qualify as “service recipient stock” forpurposes of Section 409A or (ii) if such Award would create adverse tax consequences for such Key Person under Section 457A of the Code. Furthermore, it shall be the intentof the Administrator, in granting stock appreciation rights to Key Persons who are subject to Section 409A and/or Section 457A of the Code, to structure such stockappreciation rights so as to comply with the requirements of Section 409A and/or Section 457A of the Code, to the extent applicable.(c) Nature of Stock Appreciation Rights. The grantee of a stock appreciation right shall have the right, subject to the terms of the Plan and the applicableAward Agreement, to receive from the Company an amount equal to (i) the excess of the Fair Market Value of a share of Common Stock on the date of exercise of the stockappreciation right over the Exercise Price of the stock appreciation right, multiplied by (ii) the number of shares with respect to which the stock appreciation right is exercised. Each Award Agreement with respect to a stock appreciation right shall set forth the Exercise Price of such Award and, unless otherwise specifically provided in the AwardAgreement, the Exercise Price of a stock appreciation right shall equal the Fair Market Value of a share of Common Stock on the date of grant; provided that in no event maysuch Exercise Price be less than the greater of (A) the Fair Market Value of a share of Common Stock on the date of grant and (B) the par value of a share of Common Stock. Payment upon exercise of a stock appreciation right shall be in cash or in shares of Common Stock (valued at their Fair Market Value on the date of exercise of the stockappreciation right) or any combination of both, all as the Administrator shall determine. Repricing of stock appreciation rights granted under the Plan shall not be permitted(1) to the extent such action could cause adverse tax consequences to the grantee under Sections 409A or 457A of the Code or (2) without prior shareholder approval, to theextent such approval would be required to be obtained by the Company pursuant to the applicable rules of any applicable stock exchange on which the Common Stock is thenlisted, and any action that would be deemed to result in a Repricing of a stock appreciation right shall be deemed null and void if it would cause such adverse tax consequencesor if any requisite shareholder approval related thereto is not obtained prior to the effective time of such action. Upon the exercise of a stock appreciation right granted inconnection with an option, the number of shares subject to the option shall be reduced by the number of shares with respect to which the stock appreciation right is exercised. Upon the exercise of an option in connection with which a stock appreciation right has been granted, the number of shares subject to the stock appreciation right shall bereduced by the number of shares with respect to which the option is exercised.7(d) Option Exercise Price. Each Award Agreement with respect to an option shall set forth the Exercise Price of such Award and, unless otherwise specificallyprovided in the Award Agreement, the Exercise Price of an option shall equal the Fair Market Value of a share of Common Stock on the date of grant; provided that in no eventmay such Exercise Price be less than the greater of (i) the Fair Market Value of a share of Common Stock on the date of grant and (ii) the par value of a share of Common Stock. Repricing of options granted under the Plan shall not be permitted (1) to the extent such action could cause adverse tax consequences to the grantee under Sections 409A or457A of the Code or (2) without prior shareholder approval, to the extent such approval would be required to be obtained by the Company pursuant to the applicable rules ofany applicable stock exchange on which the Common Stock is then listed, and any action that would be deemed to result in a Repricing of an option shall be deemed null andvoid if it would cause such adverse tax consequences or if any requisite shareholder approval related thereto is not obtained prior to the effective time of such action.2.3.Exercise of Options and Stock Appreciation RightsSubject to the other provisions of this Article II and the Plan, each option and stock appreciation right granted under the Plan shall be exercisable as follows:(a) Timing and Extent of Exercise. Options and stock appreciation rights shall be exercisable at such times and under such conditions as determined by theAdministrator and set forth in the corresponding Award Agreement, but in no event shall any portion of such Award be exercisable subsequent to the tenth anniversary of thedate on which such Award was granted. Unless the applicable Award Agreement otherwise provides, an option or stock appreciation right may be exercised from time to timeas to all or part of the shares as to which such Award is then exercisable.(b) Notice of Exercise. An option or stock appreciation right shall be exercised by the filing of a written notice with the Company or the Company’s designatedexchange agent (the “Exchange Agent”), on such form and in such manner as the Administrator shall prescribe.(c) Payment of Exercise Price. Any written notice of exercise of an option shall be accompanied by payment for the shares being purchased. Such paymentshall be made: (i) by certified or official bank check (or the equivalent thereof acceptable to the Company or its Exchange Agent) for the full option Exercise Price; (ii) with theconsent of the Administrator, which consent shall be given or withheld in the sole discretion of the Administrator, by delivery of shares of Common Stock having a Fair MarketValue (determined as of the exercise date) equal to all or part of the option Exercise Price and a certified or official bank check (or the equivalent thereof acceptable to theCompany or its Exchange Agent) for any remaining portion of the full option Exercise Price; or (iii) at the sole discretion of the Administrator and to the extent permitted by law,by such other provision, consistent with the terms of the Plan, as the Administrator may from time to time prescribe (whether directly or indirectly through the Exchange Agent),or by any combination of the foregoing payment methods.(d) Delivery of Certificates Upon Exercise. Subject to Sections 3.2, 3.4 and 3.13, promptly after receiving payment of the full option Exercise Price, or afterreceiving notice of the exercise of a stock appreciation right for which the Administrator determines payment will be made partly or entirely in shares, the Company or itsExchange Agent shall (i) deliver to the grantee, or to such other Person as may then have the right to exercise the Award, a certificate or certificates for the shares of CommonStock for which the Award has been exercised or, in the case of stock appreciation rights, for which the Administrator determines will be made in shares or (ii) establish anaccount evidencing ownership of the stock in uncertificated form. If the method of payment employed upon an option exercise so requires, and if applicable law permits, anoptionee may direct the Company or its Exchange Agent, as the case may be, to deliver the stock certificate(s) to the optionee’s stockbroker.(e) No Stockholder Rights. No grantee of an option or stock appreciation right (or other Person having the right to exercise such Award) shall have any of therights of a stockholder of the Company with respect to shares subject to such Award until the issuance of a stock certificate to such Person for such shares or an account in thename of the grantee evidences ownership of stock in uncertificated form. Except as otherwise provided in Section 1.5(c), no adjustment shall be made for dividends,distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such stockcertificate is issued or the date an account evidencing ownership of the stock in uncertificated form notes receipt of such stock.82.4.Termination of Employment/Service; Death Subsequent to a Termination of Employment/Service(a) General Rule. Except to the extent otherwise provided in paragraphs (b), (c), (d), (e) or (f) of this Section 2.4 or Section 3.5(b)(iii), a grantee who incurs atermination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates may exercise any outstanding option or stock appreciationright on the following terms and conditions: (i) exercise may be made only to the extent that the grantee was entitled to exercise the Award on the date of termination ofemployment or consultancy/service relationship, as applicable; and (ii) exercise must occur within three months after termination of employment or consultancy/servicerelationship but in no event after the original expiration date of the Award; it being understood that then outstanding options and stock appreciation rights shall not be affectedby a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the grantee continues to be a director, officer oremployee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that that is itself a consultant or service provider to), theCompany or any of its Subsidiaries or Affiliates.(b) Dismissal “for Cause”. If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries andAffiliates “for Cause”, all options and stock appreciation rights not theretofore exercised shall immediately terminate upon such termination of employment orconsultancy/service relationship.(c) Retirement. If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as theresult of his or her retirement (as defined below), then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such retirement, remainexercisable for a period of three years after such retirement; provided that in no event may such option or stock appreciation right be exercised following the original expirationdate of the Award. For this purpose, unless otherwise set forth in the applicable Award Agreement, “retirement” shall mean a grantee’s resignation of employment orconsultancy/service relationship with the Company and its Subsidiaries and Affiliates, with the Company’s or its applicable Affiliate’s prior consent, on or after (i) his or her65th birthday, (ii) the date on which he or she has attained age 60 and completed at least five years of service with the Company or one or more of its Affiliates (using anymethod of calculation the Administrator deems appropriate) or (iii) if approved by the Administrator, on or after his or her having completed at least 20 years of service with theCompany or one or more of its Affiliates (using any method of calculation the Administrator deems appropriate).(d) Disability. If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates byreason of a Disability, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such termination, remain exercisable for a period ofone year after such termination; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.(e) Death.(i) Termination of Employment/Service as a Result of Grantee’s Death. If a grantee incurs a termination of employment or consultancy/servicerelationship with the Company and its Subsidiaries and Affiliates as the result of his or her death, then any outstanding option or stock appreciation right shall, to the extentexercisable at the time of such death, remain exercisable for a period of one year after such death; provided that in no event may such option or stock appreciation right beexercised following the original expiration date of the Award.(ii) Restrictions on Exercise Following Death. Any such exercise of an Award following a grantee’s death shall be made only by the grantee’s executor oradministrator or other duly appointed representative reasonably acceptable to the Administrator, unless the grantee’s will specifically disposes of such Award, in which casesuch exercise shall be made only by the recipient of such specific disposition. If a grantee’s personal representative or the recipient of a specific disposition under the grantee’swill shall be entitled to exercise any Award pursuant to the preceding sentence, such representative or recipient shall be bound by all the terms and conditions of the Plan andthe applicable Award Agreement which would have applied to the grantee.(f) Administrator Discretion. The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.4.92.5.Transferability of Options and Stock Appreciation RightsExcept as otherwise specifically provided in this Plan or the applicable Award Agreement evidencing an option or stock appreciation right, during the lifetime of agrantee, each such Award granted to a grantee shall be exercisable only by the grantee, and no such Award may be sold, assigned, transferred, pledged or otherwiseencumbered or disposed of other than by will or by the laws of descent and distribution. The Administrator may, in any applicable Award Agreement evidencing an option orstock appreciation right, permit a grantee to transfer all or some of the options or stock appreciation rights to (a) the grantee’s spouse, children or grandchildren (“ImmediateFamily Members”), (b) a trust or trusts for the exclusive benefit of such Immediate Family Members or (c) other parties approved by the Administrator. Following any suchtransfer, any transferred options and stock appreciation rights shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer.2.6.Grant of Restricted Stock(a) Restricted Stock Grants. The Administrator may grant restricted shares of Common Stock to such Key Persons, in such amounts and subject to suchvesting and forfeiture provisions and other terms and conditions as the Administrator shall determine, subject to the provisions of the Plan. A grantee of a restricted stockAward shall have no rights with respect to such Award unless such grantee accepts the Award within such period as the Administrator shall specify by accepting delivery of arestricted stock Award Agreement in such form as the Administrator shall determine.(b) Issuance of Stock Certificate. Promptly after a grantee accepts a restricted stock Award in accordance with Section 2.6(a), subject to Sections 3.2, 3.4 and3.13, the Company or its Exchange Agent shall issue to the grantee a stock certificate or stock certificates for the shares of Common Stock covered by the Award or shallestablish an account evidencing ownership of the stock in uncertificated form. Upon the issuance of such stock certificates, or establishment of such account, the grantee shallhave the rights of a stockholder with respect to the restricted stock, subject to: (i) the nontransferability restrictions and forfeiture provisions described in the Plan (includingparagraphs (d) and (e) of this Section 2.6); (ii) in the Administrator’s sole discretion, a requirement, as set forth in the Award Agreement, that any dividends paid on such sharesshall be held in escrow and, unless otherwise determined by the Administrator, shall remain forfeitable until all restrictions on such shares have lapsed; and (iii) any otherrestrictions and conditions contained in the applicable Award Agreement.(c) Custody of Stock Certificate. Unless the Administrator shall otherwise determine, any stock certificates issued evidencing shares of restricted stock shallremain in the possession of the Company (or such other custodian as may be designated by the Administrator) until such shares are free of any restrictions specified in theapplicable Award Agreement. The Administrator may direct that such stock certificates bear a legend setting forth the applicable restrictions on transferability.(d) Nontransferability. Shares of restricted stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of prior to the lapsingof all restrictions thereon, except as otherwise specifically provided in this Plan or the applicable Award Agreement. The Administrator at the time of grant shall specify the dateor dates (which may depend upon or be related to the attainment of performance goals and other conditions) on which the nontransferability of the restricted stock shall lapse.(e) Consequence of Termination of Employment/Service. Unless otherwise set forth in the applicable Award Agreement, (i) a grantee’s termination ofemployment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates for any reason other than death or Disability shall cause the immediateforfeiture of all shares of restricted stock that have not yet vested as of the date of such termination of employment or consultancy/service relationship and (ii) if a granteeincurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as the result of his or her death or Disability, allshares of restricted stock that have not yet vested as of the date of such termination shall immediately vest as of such date; it being understood that then outstanding restrictedstock Awards shall not be affected by a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the granteecontinues to be a director, officer or employee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that that is itself aconsultant or service provider to), the Company or any of its Subsidiaries or Affiliates. Unless otherwise determined by the Administrator, all dividends paid on shares forfeitedunder this Section 2.6(e) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under whichsuch dividends are held or otherwise. The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.6(e).102.7.Grant of Restricted Stock Units(a) Restricted Stock Unit Grants. The Administrator may grant restricted stock units to such Key Persons, and in such amounts and subject to such vestingand forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan. A restricted stock unit granted under thePlan shall confer upon the grantee a right to receive from the Company, conditioned upon the occurrence of such vesting event as shall be determined by the Administrator andspecified in the Award Agreement, the number of such grantee’s restricted stock units that vest upon the occurrence of such vesting event multiplied by the Fair Market Valueof a share of Common Stock on the date of vesting. Payment upon vesting of a restricted stock unit shall be in cash or in shares of Common Stock (valued at their Fair MarketValue on the date of vesting) or both, all as the Administrator shall determine, and such payments shall be made to the grantee at such time as provided in the AwardAgreement, which the Administrator shall intend to be (i) if Section 409A of the Code is applicable to the grantee, within the period required by Section 409A such that itqualifies as a “short-term deferral” pursuant to Section 409A and the Treasury Regulations issued thereunder, unless the Administrator shall provide for deferral of the Awardintended to comply with Section 409A, (ii) if Section 457A of the Code is applicable to the grantee, within the period required by Section 457A(d)(3)(B) such that it qualifies forthe exemption thereunder, or (iii) if Sections 409A and 457A of the Code are not applicable to the grantee, at such time as determined by the Administrator.(b) Dividend Equivalents. The Administrator may include in any Award Agreement with respect to a restricted stock unit a dividend equivalent right entitlingthe grantee to receive amounts equal to the ordinary dividends that would be paid, during the time such Award is outstanding and unvested, and/or, if payment of the vestedAward is deferred, during the period of such deferral following such vesting event, on the shares of Common Stock underlying such Award if such shares were thenoutstanding. In the event such a provision is included in a Award Agreement, the Administrator shall determine whether such payments shall be (i) paid to the holder of theAward, as specified in the Award Agreement, either (A) at the same time as the underlying dividends are paid, regardless of the fact that the restricted stock unit has nottheretofore vested, (B) at the time at which the Award’s vesting event occurs, conditioned upon the occurrence of the vesting event, (C) once the Award has vested, at thesame time as the underlying dividends are paid, regardless of the fact that payment of the vested restricted stock unit has been deferred, and/or (D) at the time at which thecorresponding vested restricted stock units are paid, (ii) made in cash, shares of Common Stock or other property and (iii) subject to such other vesting and forfeitureprovisions and other terms and conditions as the Administrator shall deem appropriate and as shall be set forth in the Award Agreement.(c) No Stockholder Rights. No grantee of a restricted stock unit shall have any of the rights of a stockholder of the Company with respect to such Awardunless and until a stock certificate is issued with respect to such Award upon the vesting of such Award or an account in the name of the grantee evidences ownership of stockin uncertificated form (it being understood that the Administrator shall determine whether to pay any vested restricted stock unit in the form of cash or Company shares orboth), which issuance shall be subject to Sections 3.2, 3.4 and 3.13. Except as otherwise provided in Section 1.5(c), no adjustment to any restricted stock unit shall be made fordividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date suchstock certificate, if any, is issued or the date an account evidencing ownership of the stock in uncertificated form notes receipt of such stock.(d) Nontransferability. No restricted stock unit granted under the Plan may be sold, assigned, transferred, pledged or otherwise encumbered or disposed of,except as otherwise specifically provided in this Plan or the applicable Award Agreement.11(e) Consequence of Termination of Employment/Service. Unless otherwise set forth in the applicable Award Agreement, (i) a grantee’s termination ofemployment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates for any reason other than death or Disability shall cause the immediateforfeiture of all restricted stock units that have not yet vested as of the date of such termination of employment or consultancy/service relationship and (ii) if a grantee incurs atermination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as the result of his or her death or Disability, all restrictedstock units that have not yet vested as of the date of such termination shall immediately vest as of such date; it being understood that then outstanding restricted stock unitsshall not be affected by a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the grantee continues tobe a director, officer or employee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that that is itself a consultant or serviceprovider to), the Company or any of its Subsidiaries or Affiliates. Unless otherwise determined by the Administrator, any dividend equivalent rights on any restricted stockunits forfeited under this Section 2.7(e) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangementunder which such dividends are held or otherwise. The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.7(e).2.8.Grant of Unrestricted StockThe Administrator may grant (or sell at a purchase price at least equal to par value) shares of Common Stock free of restrictions under the Plan to such Key Personsand in such amounts and subject to such forfeiture provisions as the Administrator shall determine. Shares may be thus granted or sold in respect of past services or othervalid consideration.2.9.Other Stock-Based AwardsSubject to the provisions of the Plan (including, without limitation, Section 3.16), the Administrator shall have the sole and complete authority to grant to Key Personsother equity-based or equity-related Awards in such amounts and subject to such terms and conditions as the Administrator shall determine; provided that any such Awardsmust comply with applicable law and, to the extent deemed desirable by the Administrator, Rule 16b-3.2.10.Dividend EquivalentsSubject to the provisions of the Plan (including, without limitation, Section 3.16), in the discretion of the Administrator, an Award, other than an option or stockappreciation right, may provide the Award recipient with dividends or dividend equivalents, payable in cash, shares, other securities, other Awards or other property, on acurrent or deferred basis, on such terms and conditions as may be determined by the Administrator, including, without limitation, payment directly to the Award recipient,withholding of such amounts by the Company subject to vesting of the Award, or reinvestment in additional shares, restricted shares or other Awards.12ARTICLE III.Miscellaneous3.1.Amendment of the Plan; Modification of Awards(a) Amendment of the Plan. The Board may from time to time suspend, discontinue, revise or amend the Plan in any respect whatsoever, except that no suchamendment shall materially impair any rights or materially increase any obligations under any Award theretofore made under the Plan without the consent of the grantee (or,upon the grantee’s death, the Person having the rights to the Award). For purposes of this Section 3.1, any action of the Board or the Administrator that in any way alters oraffects the tax treatment of any Award shall not be considered to materially impair any rights of any grantee.(b) Stockholder Approval Requirement. If required by applicable rules or regulations of a national securities exchange or the SEC, the Company shall obtainstockholder approval with respect to any amendment to the Plan that (i) expands the types of Awards available under the Plan, (ii) materially increases the aggregate number ofshares which may be issued under the Plan, except as permitted pursuant to Section 1.5(c), (iii) materially increases the benefits to participants under the Plan, including anymaterial change to (A) permit, or that has the effect of, a Repricing of any outstanding Award, (B) reduce the price at which shares or options to purchase shares may be offeredor (C) extend the duration of the Plan, or (iv) materially expands the class of Persons eligible to receive Awards under the Plan.(c) Modification of Awards. The Administrator may cancel any Award under the Plan. The Administrator also may amend any outstanding Award Agreement,including, without limitation, by amendment which would: (i) accelerate the time or times at which the Award becomes unrestricted, vested or may be exercised; (ii) waive oramend any goals, restrictions or conditions set forth in the Award Agreement; or (iii) waive or amend the operation of Section 2.4, 2.6(e) or 2.7(c) with respect to the terminationof the Award upon termination of employment or consultancy/service relationship or dismissal from the Board; provided, however, that no such amendment shall be madewithout shareholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the Award. However, any such cancellation oramendment (other than an amendment pursuant to Section 1.5, 3.5 or 3.16) that materially impairs the rights or materially increases the obligations of a grantee under anoutstanding Award shall be made only with the consent of the grantee (or, upon the grantee’s death, the Person having the rights to the Award). In making any modification toan Award (e.g., an amendment resulting in a direct or indirect reduction in the Exercise Price or a waiver or modification under Section 2.4(f), 2.6(e) or 2.7(c)), the Administratormay consider the implications, if any, of such modification under the Code with respect to Sections 409A and 457A of the Code in respect of Awards granted under the Plan toindividuals subject to such provisions of the Code.3.2.Consent Requirement(a) No Plan Action Without Required Consent. If the Administrator shall at any time determine that any Consent (as defined below) is necessary or desirableas a condition of, or in connection with, the granting of any Award under the Plan, the issuance or purchase of shares or other rights thereunder, or the taking of any otheraction thereunder (each such action being hereinafter referred to as a “Plan Action”), then such Plan Action shall not be taken, in whole or in part, unless and until suchConsent shall have been effected or obtained to the full satisfaction of the Administrator.(b) Consent Defined. The term “Consent” as used herein with respect to any Plan Action means (i) any and all listings, registrations or qualifications inrespect thereof upon any securities exchange or under any federal, state or local law, rule or regulation, (ii) any and all written agreements and representations by the granteewith respect to the disposition of shares, or with respect to any other matter, which the Administrator shall deem necessary or desirable to comply with the terms of any suchlisting, registration or qualification or to obtain an exemption from the requirement that any such listing, qualification or registration be made and (iii) any and all consents,clearances and approvals in respect of a Plan Action by any governmental or other regulatory bodies or any other Person.133.3.NonassignabilityExcept as provided in Sections 2.4(e), 2.5, 2.6(d) or 2.7(e), (a) no Award or right granted to any Person under the Plan or under any Award Agreement shall beassignable or transferable other than by will or by the laws of descent and distribution and (b) all rights granted under the Plan or any Award Agreement shall be exercisableduring the life of the grantee only by the grantee or the grantee’s legal representative or the grantee’s permissible successors or assigns (as authorized and determined by theAdministrator). All terms and conditions of the Plan and the applicable Award Agreements will be binding upon any permitted successors or assigns.3.4.Taxes(a) Withholding. A grantee or other Award holder under the Plan shall be required to pay, in cash, to the Company, and the Company and its Affiliates shallhave the right and are hereby authorized to withhold from any Award, from any payment due or transfer made under any Award or under the Plan or from any compensation orother amount owing to such grantee or other Award holder, the amount of any applicable withholding taxes in respect of an Award, its grant, its exercise, its vesting, or anypayment or transfer under an Award or under the Plan, and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for paymentof such taxes. Whenever shares of Common Stock are to be delivered pursuant to an Award under the Plan, with the approval of the Administrator, which the Administratorshall have sole discretion whether or not to give, the grantee may satisfy the foregoing condition by electing to have the Company withhold from delivery shares having a valueequal to the amount of minimum tax required to be withheld. Such shares shall be valued at their Fair Market Value as of the date on which the amount of tax to be withheld isdetermined. Fractional share amounts shall be settled in cash. Such a withholding election may be made with respect to all or any portion of the shares to be delivered pursuantto an Award as may be approved by the Administrator in its sole discretion.(b) Liability for Taxes. Grantees and holders of Awards are solely responsible and liable for the satisfaction of all taxes and penalties that may arise inconnection with Awards (including, without limitation, any taxes arising under Sections 409A and 457A of the Code) and the Company shall not have any obligation toindemnify or otherwise hold any such Person harmless from any or all of such taxes. The Administrator shall have the discretion to organize any deferral program, to requiredeferral election forms, and to grant or, notwithstanding anything to the contrary in the Plan or any Award Agreement, to unilaterally modify any Award in a manner that(i) conforms with the requirements of Sections 409A and 457A of the Code (to the extent applicable), (ii) voids any participant election to the extent it would violate Section 409Aor 457A of the Code (to the extent applicable) and (iii) for any distribution event or election that could be expected to violate Section 409A of the Code, make the distributiononly upon the earliest of the first to occur of a "permissible distribution event" within the meaning of Section 409A of the Code or a distribution event that the participant electsin accordance with Section 409A of the Code. The Administrator shall have the sole discretion to interpret the requirements of the Code, including, without limitation,Sections 409A and 457A, for purposes of the Plan and all Awards.3.5.Change in Control(a) Change in Control Defined. Unless otherwise set forth in the applicable Award Agreement, for purposes of the Plan, “Change in Control” shall mean theoccurrence of any of the following:(i) any “person” (as defined in Section 13(d)(3) of the 1934 Act), company or other entity acquires “beneficial ownership” (as defined in Rule 13d-3 underthe 1934 Act), directly or indirectly, of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company; provided, however,that no Change in Control shall have occurred in the event of such an acquisition by (A) the Company, (B) any trustee or other fiduciary holding securities under an employeebenefit plan of the Company or an Affiliate, or (C) any company or other entity owned, directly or indirectly, by the holders of the voting stock ordinarily entitled to electdirectors of the Company in substantially the same proportions as their ownership of the aggregate voting power of the capital stock ordinarily entitled to elect directors of theCompany immediately prior to such acquisition;14(ii) the sale of all or substantially all the Company’s assets in one or more related transactions to any “person” (as defined in Section 13(d)(3) of the 1934Act), company or other entity; provided, however, that no Change in Control shall have occurred in the event of such a sale (A) to a Subsidiary which does not involve amaterial change in the equity holdings of the Company, or (B) to an entity (the “Acquiring Entity”) which has acquired all or substantially all the Company’s assets if,immediately following such sale, 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity (or, if applicable, theultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directorsof the Acquiring Entity) is beneficially owned by the holders of the voting stock ordinarily entitled to elect directors of the Company immediately prior to such sale insubstantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such sale;(iii) any merger, consolidation, reorganization or similar event of the Company or any Subsidiary; provided, however, that no Change in Control shall haveoccurred in the event 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity (or, if applicable, the ultimateparent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of thesurviving entity) is beneficially owned by the holders of the voting stock ordinarily entitled to elect directors of the Company immediately prior to such event in substantiallythe same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such event;(iv) the approval by the Company’s stockholders of a plan of complete liquidation or dissolution of the Company; or(v) during any period of 12 consecutive calendar months, individuals:(A)who were directors of the Company on the first day of such period, or(B)whose election or nomination for election to the Board was recommended or approved by at least a majority of the directors then still inoffice who were directors of the Company on the first day of such period, or whose election or nomination for election were so approved,shall cease to constitute a majority of the Board.Notwithstanding the foregoing, unless otherwise set forth in the applicable Award Agreement, for each Award subject to Section 409A of the Code, a Change in Control shall bedeemed to have occurred under this Plan with respect to such Award only if a change in the ownership or effective control of the Company or a change in the ownership of asubstantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A of the Code, provided that such limitation shall apply to suchAward only to the extent necessary to avoid adverse tax effects under Section 409A of the Code.(b) Effect of a Change in Control. Unless the Administrator provides otherwise in an Award Agreement, upon the occurrence of a Change in Control:(i) notwithstanding any other provision of this Plan, any Award then outstanding shall become fully vested and any forfeiture provisions thereonimposed pursuant to the Plan and the applicable Award Agreement shall lapse and any Award in the form of an option or stock appreciation right shall be immediatelyexercisable;(ii) to the extent permitted by law and not otherwise limited by the terms of the Plan, the Administrator may amend any Award Agreement in such manneras it deems appropriate;15(iii) a grantee who incurs a termination of employment or consultancy/service relationship for any reason, other than a termination or dismissal “for Cause”,concurrent with or within one year following the Change in Control may exercise any outstanding option or stock appreciation right, but only to the extent that the grantee wasentitled to exercise the Award on the date of his or her termination of employment or consultancy/service relationship, until the earlier of (A) the original expiration date of theAward and (B) the later of (x) the date provided for under the terms of Section 2.4 without reference to this Section 3.5(b)(iii) and (y) the first anniversary of the grantee’stermination of employment or consultancy/service relationship.(c) Miscellaneous. Whenever deemed appropriate by the Administrator, any action referred to in paragraph (b)(ii) of this Section 3.5 may be made conditionalupon the consummation of the applicable Change in Control transaction.3.6.Operation and Conduct of BusinessNothing in the Plan or any Award Agreement shall be construed as limiting or preventing the Company or any Affiliate from taking any action with respect to theoperation and conduct of its business that it deems appropriate or in its best interests, including any or all adjustments, recapitalizations, reorganizations, exchanges or otherchanges in the capital structure of the Company or any Affiliate, any merger or consolidation of the Company or any Affiliate, any issuance of Company shares or othersecurities or subscription rights, any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or other securities or rightsthereof, any dissolution or liquidation of the Company or any Affiliate, any sale or transfer of all or any part of the assets or business of the Company or any Affiliate, or anyother corporate act or proceeding, whether of a similar character or otherwise.3.7.No Rights to AwardsNo Key Person or other Person shall have any claim to be granted any Award under the Plan.3.8.Right of Discharge ReservedNothing in the Plan or in any Award Agreement shall confer upon any grantee the right to continue his or her employment with the Company or any Affiliate, his or herconsultancy/service relationship with the Company or any Affiliate, or his or her position as a director of the Company or any Affiliate, or affect any right that the Company orany Affiliate may have to terminate such employment or consultancy/service relationship or service as a director.3.9.Non-Uniform DeterminationsThe Administrator’s determinations and the treatment of Key Persons and grantees and their beneficiaries under the Plan need not be uniform and may be made anddetermined by the Administrator selectively among Persons who receive, or who are eligible to receive, Awards under the Plan (whether or not such Persons are similarlysituated). Without limiting the generality of the foregoing, the Administrator shall be entitled, among other things, to make non-uniform and selective determinations, and toenter into non-uniform and selective Award Agreements, as to (a) the Persons to receive Awards under the Plan, (b) the types of Awards granted under the Plan, (c) the numberof shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards and (d) the terms and conditions of Awards.3.10.Other Payments or AwardsNothing contained in the Plan shall be deemed in any way to limit or restrict the Company from making any award or payment to any Person under any other plan,arrangement or understanding, whether now existing or hereafter in effect.163.11.HeadingsAny section, subsection, paragraph or other subdivision headings contained herein are for the purpose of convenience only and are not intended to expand, limit orotherwise define the contents of such section, subsection, paragraph or subdivision.3.12.Effective Date and Term of Plan(a) Adoption; Stockholder Approval. The Plan was adopted by the Board on October 11, 2019, with the First Amended and Restated Plan being adopted bythe Board on December 22, 2015, and the Original Plan being adopted by the Board on February 11, 2011. The Board may, but need not, make the granting of any Awards underthe Plan subject to the approval of the Company’s stockholders.(b) Termination of Plan. The Board may terminate the Plan at any time. All Awards made under the Plan prior to its termination shall remain in effect until suchAwards have been satisfied or terminated in accordance with the terms and provisions of the Plan and the applicable Award Agreements. No Awards may be granted under thePlan following the tenth anniversary of the date on which the Plan was adopted by the Board.3.13.Restriction on Issuance of Stock Pursuant to AwardsThe Company shall not permit any shares of Common Stock to be issued pursuant to Awards granted under the Plan unless such shares of Common Stock are fullypaid and non-assessable under applicable law. Notwithstanding anything to the contrary in the Plan or any Award Agreement, at the time of the exercise of any Award, at thetime of vesting of any Award, at the time of payment of shares of Common Stock in exchange for, or in cancellation of, any Award, or at the time of grant of any unrestrictedshares under the Plan, the Company and the Administrator may, if either shall deem it necessary or advisable for any reason, require the holder of an Award (a) to represent inwriting to the Company that it is the Award holder’s then-intention to acquire the shares with respect to which the Award is granted for investment and not with a view to thedistribution thereof or (b) to postpone the date of exercise until such time as the Company has available for delivery to the Award holder a prospectus meeting the requirementsof all applicable securities laws; and no shares shall be issued or transferred in connection with any Award unless and until all legal requirements applicable to the issuance ortransfer of such shares have been complied with to the satisfaction of the Company and the Administrator. The Company and the Administrator shall have the right tocondition any issuance of shares to any Award holder hereunder on such Person’s undertaking in writing to comply with such restrictions on the subsequent transfer of suchshares as the Company or the Administrator shall deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof, and all sharecertificates delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Company or the Administrator may deem advisable under thePlan, the applicable Award Agreement or the rules, regulations and other requirements of the SEC, any stock exchange upon which such shares are listed, and any applicablesecurities or other laws, and certificates representing such shares may contain a legend to reflect any such restrictions. The Administrator may refuse to issue or transfer anyshares or other consideration under an Award if it determines that the issuance or transfer of such shares or other consideration might violate any applicable law or regulationor entitle the Company to recover the same under Section 16(b) of the 1934 Act, and any payment tendered to the Company by a grantee or other Award holder in connectionwith the exercise of such Award shall be promptly refunded to the relevant grantee or other Award holder. Without limiting the generality of the foregoing, no Award grantedunder the Plan shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Administrator has determined thatany such offer, if made, would be in compliance with all applicable requirements of any applicable securities laws.3.14.Requirement of Notification of Election Under Section 83(b) of the CodeIf an Award recipient, in connection with the acquisition of Company shares under the Plan, makes an election under Section 83(b) of the Code (to include in grossincome in the year of transfer the amounts specified in Section 83(b) of the Code), the grantee shall notify the Administrator of such election within ten days of filing notice ofthe election with the U.S. Internal Revenue Service, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code.173.15.SeverabilityIf any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or woulddisqualify the Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to the applicablelaws or, if it cannot be construed or deemed amended without, in the determination of the Administrator, materially altering the intent of the Plan or the Award, such provisionshall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.3.16.Sections 409A and 457ATo the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Sections 409A and 457A of the Code and Department of Treasuryregulations and other interpretive guidance issued thereunder. Notwithstanding any provision of the Plan or any applicable Award Agreement to the contrary, in the event thatthe Administrator determines that any Award may be subject to Section 409A or 457A of the Code, the Administrator may adopt such amendments to the Plan and theapplicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that theAdministrator determines are necessary or appropriate to (i) exempt the Plan and Award from Sections 409A and 457A of the Code and/or preserve the intended tax treatment ofthe benefits provided with respect to the Award, or (ii) comply with the requirements of Sections 409A and 457A of the Code and related Department of Treasury guidance andthereby avoid the application of penalty taxes under Sections 409A and 457A of the Code.3.17.Forfeiture; ClawbackThe Administrator may, in its sole discretion, specify in the applicable Award Agreement that any realized gain with respect to options or stock appreciation rights andany realized value with respect to other Awards shall be subject to forfeiture or clawback, in the event of (a) a grantee’s breach of any non-competition, non-solicitation,confidentiality or other restrictive covenants with respect to the Company or any Affiliate, (b) a grantee’s breach of any employment or consulting agreement with the Companyor any Affiliate, (c) a grantee’s termination for Cause or (d) a financial restatement that reduces the amount of compensation under the Plan previously awarded to a grantee thatwould have been earned had results been properly reported.3.18.No Trust or Fund CreatedNeither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or anyAffiliate and an Award recipient or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to anAward, such right shall be no greater than the right of any unsecured general creditor of the Company or its Affiliate.3.19.No Fractional SharesNo fractional shares shall be issued or delivered pursuant to the Plan or any Award, and the Administrator shall determine whether cash, other securities, or otherproperty shall be paid or transferred in lieu of any fractional shares or whether such fractional shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.3.20.Governing LawThe Plan will be construed and administered in accordance with the laws of the State of New York, without giving effect to principles of conflict of laws.18Exhibit 4.14EXECUTION COPYNORDIC AMERICAN TANKERS LIMITEDCommon Share(par value $0.01 per share)At Market Issuance Sales AgreementMarch 29, 2019B. Riley FBR, Inc.299 Park Avenue, 21st FloorNew York, NY 10171Ladies and Gentlemen:Nordic American Tankers Limited, a limited company formed under the laws of Bermuda (the “Company”), confirms its agreement (this “Agreement”) withB. Riley FBR, Inc. (the “Agent”) as follows:1. Issuance and Sale of Shares. The Company agrees that, from time to time during the term of this Agreement, on the terms and subject to theconditions set forth herein, it may issue and sell through or to the Agent, as sales agent or principal, shares (the “Placement Shares”); of the Company’s commonshares, par value $0.01 per share (the “Common Share”); provided however, that in no event shall the Company issue or sell through the Agent such number ofPlacement Shares that (a) exceeds the number of shares or dollar amount of Common Share registered on the effective Registration Statement (as defined below)pursuant to which the offering is being made or (b) exceeds the number of shares or dollar amount registered on the Prospectus Supplement (as defined below) (thelesser of (a) or (b) the “Maximum Amount”). Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitationsset forth in this Section 1 on the number of Placement Shares issued and sold under this Agreement shall be the sole responsibility of the Company and that theAgent shall have no obligation in connection with such compliance. The issuance and sale of Placement Shares through the Agent will be effected pursuant to theRegistration Statement (as defined below), although nothing in this Agreement shall be construed as requiring the Company to use the Registration Statement to issueany Placement Shares.The Company has filed, in accordance with the provisions of the Securities Act of 1933, as amended and the rules and regulations thereunder (the“Securities Act”), with the Securities and Exchange Commission (the “Commission”), a registration statement on Form F-3 (File No. 333-[228603]), including abase prospectus, relating certain securities including the Placement Shares to be issued from time to time by the Company, and which incorporates by referencedocuments that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended and the rules andregulations thereunder (the “Exchange Act”). The Company has prepared a prospectus supplement to the base prospectus included as part of such registrationstatement specifically relating to the Placement Shares (the “Prospectus Supplement”). The Company will furnish to the Agent, for use by the Agent, copies of thebase prospectusincluded as part of such registration statement, as supplemented by the Prospectus Supplement, relating to the Placement Shares. Except where the contextotherwise requires, such registration statement, and any post-effective amendment thereto, including all documents filed as part thereof or incorporated by referencetherein, and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) under theSecurities Act or deemed to be a part of such registration statement pursuant to Rule 430B of the Securities Act, or any subsequent registration statement on FormF-3 filed pursuant to Rule 415(a)(6) under the Securities Act by the Company to cover any Placement Shares or any subsequent registration statement on Form F-3 filed pursuant to 462(b) under the Securities Act, is herein called the “Registration Statement.” The base prospectus, including all documents incorporated ordeemed incorporated therein by reference to the extent such information has not been superseded or modified in accordance with Rule 412 under the Securities Act(as qualified by Rule 430B(g) of the Securities Act), included in the Registration Statement, as it may be supplemented by the Prospectus Supplement, in the form inwhich such base prospectus and/or Prospectus Supplement have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under theSecurities Act is herein called the “Prospectus.” Any reference herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shallbe deemed to refer to and include the documents incorporated by reference therein, and any reference herein to the terms “amend,” “amendment” or “supplement”with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with theCommission incorporated by reference therein (the “Incorporated Documents”).For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed toinclude the most recent copy filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval System, or if applicable, the InteractiveData Electronic Application system when used by the Commission (collectively, “EDGAR”).2. Placements. Each time that the Company wishes to issue and sell Placement Shares hereunder (each, a “Placement”), it will notify the Agent byelectronic mail (or other method mutually agreed to in writing by the parties) of the number of Placement Shares, the time period during which sales are requested tobe made, any limitation on the number of Placement Shares that may be sold in any one day and any minimum price below which sales may not be made (a“Placement Notice”), the form of which is attached hereto as Schedule 1. The Placement Notice shall originate from any of the individuals from the Company setforth on Schedule 3 (with a copy to each of the other individuals from the Company listed on such schedule), and shall be addressed to each of the individuals fromthe Agent set forth on Schedule 3, as such Schedule 3 may be amended from time to time. The Placement Notice shall be effective immediately upon receipt by theAgent unless and until (i) the Agent declines to accept the terms contained therein for any reason, in its sole discretion, (ii) the entire amount of the Placement Sharesthereunder has been sold, (iii) the Company suspends or terminates the Placement Notice, which suspension and termination rights may be exercised by theCompany in its sole discretion, or (iv) this Agreement has been terminated under the provisions of Section 13. The amount of any discount, commission or othercompensation to be paid by the Company to the Agent in connection with the sale of the Placement Shares shall be calculated in accordance with the terms set forthin Schedule 2. It is2expressly acknowledged and agreed that neither the Company nor the Agent will have any obligation whatsoever with respect to a Placement or any PlacementShares unless and until the Company delivers a Placement Notice to the Agent and the Agent does not decline such Placement Notice pursuant to the terms setforth above, and then only upon the terms specified therein and herein. In the event of a conflict between the terms of Sections 2 or 3 of this Agreement and theterms of a Placement Notice, the terms of the Placement Notice will control.3. Sale of Placement Shares by the Agent. Subject to the terms and conditions of this Agreement, for the period specified in a Placement Notice, theAgent will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulationsand the rules of the New York Stock Exchange (the “Exchange”), to sell the Placement Shares up to the amount specified in, and otherwise in accordance with theterms of, such Placement Notice. The Agent will provide written confirmation to the Company no later than the opening of the Trading Day (as defined below)immediately following the Trading Day on which it has made sales of Placement Shares hereunder setting forth the number of Placement Shares sold on such day,the compensation payable by the Company to the Agent pursuant to Section 2 with respect to such sales, and the Net Proceeds (as defined below) payable to theCompany, with an itemization of the deductions made by the Agent (as set forth in Section 5(b)) from the gross proceeds that it receives from such sales. Subject tothe terms of a Placement Notice, the Agent may sell Placement Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule415 of the Securities Act. “Trading Day” means any day on which shares of Common Share are purchased and sold on the Exchange.4. Suspension of Sales. The Company or the Agent may, upon notice to the other party in writing (including by email correspondence to each of theindividuals of the other party set forth on Schedule 3, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice issent, other than via auto-reply) or by telephone (confirmed immediately by verifiable facsimile transmission or email correspondence to each of the individuals of theother party set forth on Schedule 3), suspend any sale of Placement Shares (a “Suspension”); provided, however, that such suspension shall not affect or impair anyparty’s obligations with respect to any Placement Shares sold hereunder prior to the receipt of such notice. While a Suspension is in effect, any obligation underSections 7(1), 7(m), and 7(n) with respect to the delivery of certificates, opinions, or comfort letters to the Agent, shall be waived. Each of the parties agrees that nosuch notice under this Section 4 shall be effective against any other party unless it is made to one of the individuals named on Schedule 3 hereto, as such Schedulemay be amended from time to time.5. Sale and Delivery to the Agent; Settlement.a. Sale of Placement Shares. On the basis of the representations and warranties herein contained and subject to the terms and conditions hereinset forth, upon the Agent’s acceptance of the terms of a Placement Notice, and unless the sale of the Placement Shares described therein has been declined,suspended, or otherwise terminated in accordance with the terms of this Agreement, the Agent, for the period specified in the Placement Notice, will use itscommercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of theExchange to sell such3Placement Shares up to the amount specified in, and otherwise in accordance with the terms of, such Placement Notice. The Company acknowledges and agreesthat (i) there can be no assurance that the Agent will be successful in selling Placement Shares, (ii) the Agent will incur no liability or obligation to the Company orany other person or entity if it does not sell Placement Shares for any reason other than a failure by the Agent to use its commercially reasonable efforts consistentwith its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the Exchange to sell such Placement Shares asrequired under this Agreement and (iii) the Agent shall be under no obligation to purchase Placement Shares on a principal basis pursuant to this Agreement, exceptas otherwise agreed by the Agent and the Company.b. Settlement of Placement Shares. Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement Shares willoccur on the second (2nd) Trading Day (or such earlier day as is industry practice for regular-way trading) following the date on which such sales are made (each, a“Settlement Date”). The Agent shall notify the Company of each sale of Placement Shares no later than opening day following the Trading Day that the Agent soldPlacement Shares. The amount of proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement Shares sold (the “NetProceeds”) will be equal to the aggregate sales price received by the Agent, after deduction for (i) the Agent’s commission, discount or other compensation for suchsales payable by the Company pursuant to Section 2 hereof, and (ii) any transaction fees imposed by any governmental or self-regulatory organization in respect ofsuch sales.c. Delivery of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transferthe Placement Shares being sold by crediting the Agent’s or its designee’s account (provided the Agent shall have given the Company written notice of suchdesignee and such designee’s account information at least one Trading Day prior to the Settlement Date) at The Depository Trust Company through its Deposit andWithdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto which in all cases shall be freely tradable,transferable, registered shares in good deliverable form. On each Settlement Date, the Agent will deliver the related Net Proceeds in same day funds to an accountdesignated by the Company on, or prior to, the Settlement Date. The Company agrees that if the Company, or its transfer agent (if applicable), defaults in itsobligation to deliver Placement Shares on a Settlement Date through no fault of the Agent, then in addition to and in no way limiting the rights and obligations setforth in Section 11(a) hereto, it will (i) hold the Agent harmless against any loss, claim, damage, or reasonable, documented expense (including reasonable anddocumented legal fees and expenses), as incurred, arising out of or in connection with such default by the Company or its transfer agent (if applicable) and (ii) pay tothe Agent (without duplication) any commission, discount, or other compensation to which it would otherwise have been entitled absent such default.d. Limitations on Offering Size. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares if, aftergiving effect to the sale of such Placement Shares, the aggregate number of Placement Shares sold pursuant to this Agreement would exceed the lesser of (A)together with all sales of Placement Shares under this Agreement, the Maximum Amount, (B) the amount available for offer and sale under the currently effectiveRegistration Statement and (C) the amount authorized from time to time to be issued and sold4under this Agreement by the Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Agentin writing. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares pursuant to this Agreement at a price lower thanthe minimum price authorized from time to time by the Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee,and notified to the Agent in writing.6. Representations and Warranties of the Company. Except as disclosed in the Registration Statement or Prospectus (including the IncorporatedDocuments), the Company represents and warrants to, and agrees with the Agent that as of the date of this Agreement and as of each Applicable Time (as definedbelow), unless such representation, warranty or agreement specifies a different date or time:a. Registration Statement and Prospectus. The transactions contemplated by this Agreement meet the requirements for and comply with theconditions for the use of Form F-3 under the Securities Act. The Company is a “foreign private issuer” as such term is defined in Rule 3b-4 under the ExchangeAct. The Registration Statement has been filed with the Commission and has been declared effective under the Securities Act. The Prospectus Supplement willname the Agent as the agent in the section entitled “Plan of Distribution.” The Company has not received, and has no notice of, any order of the Commissionpreventing or suspending the use of the Registration Statement, or threatening or instituting proceedings for that purpose. The Registration Statement and the offerand sale of Placement Shares as contemplated hereby meet the requirements of Rule 415 under the Securities Act and comply in all material respects with said Rule.Any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits tothe Registration Statement have been so described or filed, as applicable. Copies of the Registration Statement, the Prospectus, and any such amendments orsupplements and all documents incorporated by reference therein that were filed with the Commission on or prior to the date of this Agreement have been delivered,or are available through EDGAR, to the Agent and its counsel. The Company has not distributed and, prior to the later to occur of each Settlement Date andcompletion of the distribution of the Placement Shares, will not distribute any offering material in connection with the offering or sale of the Placement Shares otherthan the Registration Statement and the Prospectus and any Issuer Free Writing Prospectus (as defined below) to which the Agent has consented, which consentwill not be unreasonably withheld or delayed, or that is required by applicable law or the listing maintenance requirements of the Exchange. The Common Share iscurrently quoted on the Exchange under the trading symbol “NAT.” The Company has not, in the 12 months preceding the date hereof, received notice from theExchange to the effect that the Company is not in compliance with the listing or maintenance requirements of the Exchange. To the Company’s knowledge, it is incompliance with all such listing and maintenance requirements.b. No Misstatement or Omission. At each Settlement Date, the Registration Statement and the Prospectus, as of such date, will conform in allmaterial respects with the requirements of the Securities Act. The Registration Statement, when it became or becomes effective, did not, and will not, contain anuntrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. TheProspectus and any amendment and supplement thereto, on the date thereof and at each Applicable Time (defined below), did not or will not include an untruestatement of a5material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Thedocuments incorporated by reference in the Prospectus or any Prospectus Supplement did not, and any further documents filed and incorporated by referencetherein will not, when filed with the Commission, contain an untrue statement of a material fact or omit to state a material fact required to be stated in such documentor necessary to make the statements in such document, in light of the circumstances under which they were made, not misleading. The foregoing shall not apply tostatements in, or omissions from, any such document made in reliance upon, and in conformity with, information furnished to the Company by the Agent specificallyfor use in the preparation thereof.c. Conformity with Securities Act and Exchange Act. The Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or anyamendment or supplement thereto, and the Incorporated Documents, when such documents were or are filed with the Commission under the Securities Act or theExchange Act or became or become effective under the Securities Act, as the case may be, conformed or will conform in all material respects with the requirementsof the Securities Act and the Exchange Act, as applicable.d. Financial Information. The consolidated financial statements of the Company included or incorporated by reference in the RegistrationStatement and the Prospectus, together with the related notes and schedules, present fairly, in all material respects, the consolidated financial position of theCompany and the Subsidiaries (as defined below) as of the dates indicated and the consolidated results of operations, cash flows and changes in stockholders’equity of the Company and the Subsidiaries for the periods specified (subject, in the case of unaudited statements, to normal year-end audit adjustments which willnot be material, either individually or in the aggregate) and have been prepared in compliance with the published requirements of the Securities Act and ExchangeAct, as applicable, and in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis (except (i) for suchadjustments to accounting standards and practices as are noted therein and (ii) in the case of unaudited interim statements, to the extent they may exclude footnotesor may be condensed or summary statements) during the periods involved; the other financial and statistical data with respect to the Company and the Subsidiariescontained or incorporated by reference in the Registration Statement and the Prospectus, are accurately and fairly presented and prepared on a basis consistent withthe financial statements and books and records of the Company; there are no financial statements (historical or pro forma) that are required to be included orincorporated by reference in the Registration Statement, or the Prospectus that are not included or incorporated by reference as required; the Company and theSubsidiaries do not have any material liabilities or obligations, direct or contingent (including any off balance sheet obligations), not described in the RegistrationStatement, and the Prospectus which are required to be described in the Registration Statement or Prospectus; and all disclosures contained or incorporated byreference in the Registration Statement and the Prospectus, if any, regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations ofthe Commission) comply in all material respects with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Securities Act, to the extentapplicable.e. Conformity with EDGAR Filing. The Prospectus delivered to the Agent for use in connection with the sale of the Placement Shares pursuantto this Agreement will be identical to the versions of the Prospectus created to be transmitted to the Commission for filing via6EDGAR, except to the extent permitted by Regulation S-T.f. Organization. The Company and any subsidiary that is a significant subsidiary (as such term is defined in Rule 1-02 of Regulation S-Xpromulgated by the Commission) (each, a “Subsidiary,” collectively, the “Subsidiaries”), are, and will be, duly organized, validly existing as a corporation and ingood standing under the laws of their respective jurisdictions of organization. The Company and the Subsidiaries are duly licensed or qualified as a foreigncorporation for transaction of business and in good standing under the laws of each other jurisdiction in which their respective ownership or lease of property or theconduct of their respective businesses requires such license or qualification, and have all corporate power and authority necessary to own or hold their respectiveproperties and to conduct their respective businesses as described in the Registration Statement and the Prospectus, except where the failure to be so qualified or ingood standing or have such power or authority would not, individually or in the aggregate, have a material adverse effect on the assets, business, operations,earnings, properties, condition (financial or otherwise), prospects, stockholders’ equity or results of operations of the Company and the Subsidiaries taken as awhole, or prevent the consummation of the transactions contemplated hereby (a “Material Adverse Effect”).g. Subsidiaries. As of the date hereof, the Company’s only Subsidiaries are set forth on Schedule 6(g). The Company owns directly orindirectly, all of the equity interests of the Subsidiaries free and clear of any lien, charge, security interest, encumbrance, right of first refusal or other restriction, andall the equity interests of the Subsidiaries are validly issued and are fully paid, nonassessable and free of preemptive and similar rights.h. No Violation or Default. Neither the Company nor any Subsidiary is (i) in violation of its charter or by-laws or similar organizationaldocuments; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance orobservance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other similar agreement or instrument to whichthe Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound or to which any of the property or assets of the Company or anySubsidiary is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatoryauthority, except, in the case of each of clauses (ii) and (iii) above, for any such violation or default that would not, individually or in the aggregate, have a MaterialAdverse Effect. To the Company’s knowledge, no other party under any material contract or other agreement to which it or any Subsidiary is a party is in default inany respect thereunder where such default would have a Material Adverse Effect.i. No Material Adverse Effect. Since the date of the most recent financial statements of the Company included or incorporated by reference inthe Registration Statement and Prospectus, there has not been (i) any Material Adverse Effect, or any development that would result in a Material Adverse Effect,(ii) any transaction which is material to the Company and the Subsidiaries taken as a whole, (iii) any obligation or liability, direct or contingent (including any off-balance sheet obligations), incurred by the Company or the Subsidiaries, which is material to the Company and the Subsidiaries taken as a whole, (iv) any materialchange in the capital stock (other than (A) the grant of additional options under the Company’s existing stock option plans, (B) changes in the number of outstandingCommon Share of the Company due to the issuance of7shares upon the exercise or conversion of securities exercisable for, or convertible into, Common Share outstanding on the date hereof, (C) as a result of theissuance of Placement Shares, (D) any repurchases of capital stock of the Company, (E) as described in a proxy statement or information statement filed on Form6-K, or a Registration Statement on Form S-4, or (F) otherwise publicly announced) or outstanding long-term indebtedness of the Company or the Subsidiaries or(v) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any Subsidiary, other than in each case above in theordinary course of business or as otherwise disclosed in the Registration Statement or Prospectus (including any document incorporated by reference therein).j. Capitalization. The issued and outstanding shares of capital stock of the Company have been validly issued, are fully paid and non-assessableand, other than as disclosed in the Registration Statement or the Prospectus, are not subject to any preemptive rights, rights of first refusal or similar rights. TheCompany has an authorized, issued and outstanding capitalization as set forth in the Registration Statement and the Prospectus as of the dates referred to therein(other than (i) the grant of additional options under the Company’s existing stock option plans, (ii) changes in the number of outstanding Common Share of theCompany due to the issuance of shares upon the exercise or conversion of securities exercisable for, or convertible into, Common Share outstanding on the datehereof, (iii) as a result of the issuance of Placement Shares, or (iv) any repurchases of capital stock of the Company) and such authorized capital stock conforms tothe description thereof set forth in the Registration Statement and the Prospectus. The description of the Common Share in the Registration Statement and theProspectus is complete and accurate in all material respects. Except as disclosed in or contemplated by the Registration Statement or the Prospectus, the Companydid not have outstanding any options to purchase, or any rights or warrants to subscribe for, or any securities or obligations convertible into, or exchangeable for, orany contracts or commitments to issue or sell, any shares of capital stock or other securities.k. F-3 Eligibility. (i) At the time of filing the Registration Statement and (ii) at the time of the most recent amendment thereto for the purposes ofcomplying with Section 10(a)(3) of the Securities Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13or 15(d) of the Exchange Act or form of prospectus), the Company met the then applicable requirements for use of Form F-3 under the Securities Act, includingcompliance with General Instruction I.B.1 of Form F-3, as applicable.l. Authorization; Enforceability. The Company has full legal right, power and authority to enter into this Agreement and perform the transactionscontemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company and is a legal, valid and binding agreement of theCompany enforceable against the Company in accordance with its terms, except to the extent that (i) enforceability may be limited by bankruptcy, insolvency,reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles and (ii) the indemnification and contributionprovisions of Section 11 hereof may be limited by federal or state securities laws and public policy considerations in respect thereof.m. Authorization of Placement Shares. The Placement Shares, when issued and delivered pursuant to the terms approved by the board ofdirectors of the Company or a duly8authorized committee thereof, or a duly authorized executive committee, against payment therefor as provided herein, will be duly and validly authorized and issuedand fully paid and nonassessable, free and clear of any pledge, lien, encumbrance, security interest or other claim (other than any pledge, lien, encumbrance, securityinterest or other claim arising from an act or omission of the Agent or a purchaser), including any statutory or contractual preemptive rights, resale rights, rights offirst refusal or other similar rights, and will be registered pursuant to Section 12 of the Exchange Act. The Placement Shares, when issued, will conform in all materialrespects to the description thereof set forth in or incorporated into the Prospectus.n. No Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or anygovernmental or regulatory authority is required for the execution, delivery and performance by the Company of this Agreement, and the issuance and sale by theCompany of the Placement Shares as contemplated hereby, except for such consents, approvals, authorizations, orders and registrations or qualifications (i) as maybe required under applicable state securities laws or by the by-laws and rules of the Financial Industry Regulatory Authority (“FINRA”) or the Exchange, includingany notices that may be required by the Exchange, in connection with the sale of the Placement Shares by the Agent, (ii) as may be required under the Securities Actand (iii) as have been previously obtained by the Company.o. No Preferential Rights. (i) No person, as such term is defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act (each, a“Person”), has the right, contractual or otherwise, to cause the Company to issue or sell to such Person any Common Share or shares of any other capital stock orother securities of the Company (other than upon the exercise of options or warrants to purchase Common Share or upon the exercise of options that may begranted from time to time under the Company’s stock option plan), (ii) no Person has any preemptive rights, rights of first refusal, or any other rights (exceptpursuant to Shareholder Rights Agreement dated as of June 16, 2017 by and between the Company and Computershare Trust Company, N.A.) to purchase anyCommon Share or shares of any other capital stock or other securities of the Company from the Company which have not been duly waived with respect to theoffering contemplated hereby, (iii) no Person has the right to act as an underwriter or as a financial advisor to the Company in connection with the offer and sale ofthe Common Share, and (iv) no Person has the right, contractual or otherwise, to require the Company to register under the Securities Act any Common Share orshares of any other capital stock or other securities of the Company, or to include any such shares or other securities in the Registration Statement or the offeringcontemplated thereby, whether as a result of the filing or effectiveness of the Registration Statement or the sale of the Placement Shares as contemplated thereby orotherwise, except in each case for such rights as have been waived on or prior to the date hereof.p. Independent Public Accountant. KPMG AS (the “Accountant”), whose report on the consolidated financial statements of the Company isfiled with the Commission as part of the Company’s most recent Annual Report on Form 20-F filed with the Commission and incorporated into the RegistrationStatement, are and, during the periods covered by their report, were independent public accountants within the meaning of the Securities Act and the PublicCompany Accounting Oversight Board (United States). To the Company’s knowledge, the Accountant is not in violation of the auditor independence requirementsof the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) with respect to the Company.9q. Enforceability of Agreements. All agreements between the Company and third parties expressly referenced in the Prospectus, other than suchagreements that have expired by their terms or whose termination is disclosed in documents filed by the Company on EDGAR, are legal, valid and bindingobligations of the Company and, to the Company’s knowledge, enforceable in accordance with their respective terms, except to the extent that (i) enforceabilitymay be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles and (ii)the indemnification provisions of certain agreements may be limited by federal or state securities laws or public policy considerations in respect thereof, and exceptfor any unenforceability that, individually or in the aggregate, would not have a Material Adverse Effect.r. No Litigation. There are no legal or governmental proceedings pending or threatened to which the Company or any Subsidiary is a party or towhich any of the properties of the Company or any Subsidiary is subject (i) other than proceedings accurately described in all material respects in the Prospectusand proceedings that would not have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole, or on the power or ability of the Companyto perform its obligations under this Agreement or to consummate the transactions contemplated by the Prospectus or (ii) that are required to be described in theRegistration Statement or the Prospectus and are not so described; and there are no statutes, regulations, contracts or other documents that are required to bedescribed in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required.s. Licenses and Permits. The Company and the Subsidiaries possess or have obtained, all licenses, certificates, consents, orders, approvals,permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatoryauthorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses and operations as currentlyconducted, as described in the Registration Statement and the Prospectus (the “Permits”), except where the failure to possess, obtain or make the same would not,individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor any Subsidiary has received written notice of any proceeding relating torevocation or modification of any such Permit or has any reason to believe that such Permit will not be renewed in the ordinary course, except where the failure toobtain any such renewal would not, individually or in the aggregate, have a Material Adverse Effect.t. No Material Defaults. Neither the Company nor any Subsidiary has defaulted on any installment on indebtedness for borrowed money or onany rental on one or more long-term leases, which defaults, individually or in the aggregate, would have a Material Adverse Effect. The Company has not filed areport pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing of its last Annual Report on Form 20-F, indicating that it (i) has failed to pay anydividend or sinking fund installment on preferred stock or (ii) has defaulted on any installment on indebtedness for borrowed money or on any rental on one or morelong-term leases, which defaults, individually or in the aggregate, would have a Material Adverse Effect.u. Certain Market Activities. Neither the Company, nor any Subsidiary, nor, to the knowledge of the Company, any of their respectivedirectors, officers or controlling persons has taken, directly or indirectly, any action designed, or that has constituted or would cause or10result in, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of thePlacement Shares.v. Broker/Dealer Relationships. Neither the Company nor any Subsidiary or any related entities (i) is required to register as a “broker” or“dealer” in accordance with the provisions of the Exchange Act or (ii) directly or indirectly through one or more intermediaries, controls or is a “person associatedwith a member” or “associated person of a member” (within the meaning set forth in the FINRA Manual).w. No Reliance. The Company has not relied upon the Agent or legal counsel for the Agent for any legal, tax or accounting advice in connectionwith the offering and sale of the Placement Shares.x. Taxes. The Company and the Subsidiaries have filed all federal, state, local and foreign tax returns which have been required to be filed andpaid all taxes shown thereon through the date hereof, to the extent that such taxes have become due and are not being contested in good faith, except where thefailure to do so would not have a Material Adverse Effect. Except as otherwise disclosed in or contemplated by the Registration Statement or the Prospectus, notax deficiency has been determined adversely to the Company or any Subsidiary which has had, or would have, individually or in the aggregate, a Material AdverseEffect. The Company has no knowledge of any federal, state or other governmental tax deficiency, penalty or assessment which has been or might be asserted orthreatened against it which would have a Material Adverse Effect.y. Title to Real and Personal Property. The Company and the Subsidiaries have good and valid title in fee simple to all items of real propertyand good and valid title to all personal property described in the Registration Statement or Prospectus as being owned by them that are material to the businesses ofthe Company or such Subsidiary, in each case free and clear of all liens, encumbrances and claims, except those that (i) do not materially interfere with the use madeand proposed to be made of such property by the Company and the Subsidiaries or (ii) would not, individually or in the aggregate, have a Material Adverse Effect.Any real property described in the Registration Statement or Prospectus as being leased by the Company and the Subsidiaries is held by them under valid, existingand enforceable leases, except those that (A) do not materially interfere with the use made or proposed to be made of such property by the Company or theSubsidiaries or (B) would not, individually or in the aggregate, have a Material Adverse Effect.z. Intellectual Property. Except as otherwise disclosed in the Registration Statement and Prospectus, the Company and the Subsidiary does notown or possess any material trade names, trademark registrations, service marks, service mark registrations, Internet domain name registrations, copyrights,copyright registrations, (collectively, the “Intellectual Property”), necessary for the conduct of their respective businesses as conducted as of the date hereof.aa. Compliance with Applicable Laws. The Company has not been advised, and has no reason to believe, that it and each of its subsidiaries arenot conducting business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting business, except where failure to beso in compliance would not result in a Material Adverse Change.11bb. Environmental Laws. The Company and the Subsidiaries (i) are in compliance with any and all applicable federal, state, local and foreignlaws, rules, regulations, decisions and orders relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes,pollutants or contaminants (collectively, “Environmental Laws”); (ii) have received and are in compliance with all permits, licenses or other approvals required ofthem under applicable Environmental Laws to conduct their respective businesses as described in the Registration Statement and the Prospectus; and (iii) have notreceived notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutantsor contaminants, except, in the case of any of clauses (i), (ii) or (iii) above, for any such failure to comply or failure to receive required permits, licenses, otherapprovals or liability as would not, individually or in the aggregate, have a Material Adverse Effect.cc. Disclosure Controls. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i)transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation offinancial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s generalor specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is takenwith respect to any differences. The Company is not aware of any material weaknesses in its internal control over financial reporting (other than as set forth in theRegistration Statement or the Prospectus). Since the date of the latest audited financial statements of the Company included in the Prospectus, there has been nochange in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internalcontrol over financial reporting (other than as set forth in the Registration Statement or the Prospectus). The Company has established disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15 and 15d-15) that comply with the requirements of the Exchange Act. The Company’s certifying officers haveevaluated the effectiveness of the Company’s controls and procedures as of a date within 90 days prior to the filing date of the Form 20-F for the fiscal year mostrecently ended (such date, the “Evaluation Date”). The Company presented in its Form 20-F for the fiscal year most recently ended the conclusions of the certifyingofficers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the most recent Evaluation Date, and the “disclosurecontrols and procedures” are effective.dd. Sarbanes-Oxley Act. There is and has been no failure on the part of the Company or, to the knowledge of the Company, any of theCompany’s directors or officers, in their capacities as such, to comply in all material respects with any applicable provisions of the Sarbanes-Oxley Act and the rulesand regulations promulgated thereunder. Each of the principal executive officer and the principal financial officer of the Company (or each former principal executiveofficer of the Company and each former principal fmancial officer of the Company as applicable) has made all certifications required by Sections 302 and 906 of theSarbanes-Oxley Act with respect to all reports, schedules, forms, statements and other documents required to be filed by it or furnished by it to the Commissionduring the past 12 months. For purposes of the preceding sentence, “principal executive officer” and “principal financial officer” shall have the meanings given tosuch terms in the Exchange Act Rules 13a-15 and 15d-15.12ee. Finder’s Fees. Neither the Company nor any Subsidiary has incurred any liability for any finder’s fees, brokerage commissions or similarpayments in connection with the transactions herein contemplated, except as may otherwise exist with respect to the Agent pursuant to this Agreement.ff. Vessels. Except as otherwise disclosed in the Registration Statement and Prospectus, all of the vessels described in the RegistrationStatement and the Prospectus are owned directly by the Company or subsidiaries of the Company. Each of such vessels (the “Owned Vessels”), to the knowledgeof the Company, has been duly and validly registered as a vessel under the laws and regulations and flag of the applicable jurisdiction; each Company subsidiary hasgood title to the applicable Owned Vessel, free and clear of all mortgages, pledges, liens, security interests and claims and all defects of the title of record, except forthose mortgages, pledges, liens, security interests and claims arising under credit facilities, each as disclosed in the Registration Statement and the Prospectus, andany other encumbrances which would not, in the aggregate, reasonably be expected to result in a material adverse effect on the Company and its subsidiaries, takenas a whole.gg. Labor Disputes. No labor disturbance by or dispute with employees of the Company or any Subsidiary exists or, to the knowledge of theCompany, is threatened which would result in a Material Adverse Effect.hh. Investment Company Act. Neither the Company nor any Subsidiary is or, after giving effect to the offering and sale of the Placement Shares,will be required to register as an “investment company” or an entity “controlled” by an “investment company,” as such terms are defined in the Investment CompanyAct of 1940, as amended (the “Investment Company Act”).ii. Operations. To the knowledge of the Company, the operations of the Company and the Subsidiaries are and have been conducted at alltimes in compliance with applicable financial record keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, asamended, the money laundering statutes of all jurisdictions to which the Company or the Subsidiaries are subject, the rules and regulations thereunder and anyrelated or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency having jurisdiction over the Company (collectively,the “Money Laundering Laws”), except where the failure to be in such compliance would not result in a Material Adverse Effect; and no action, suit or proceedingby or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money LaunderingLaws is pending or, to the knowledge of the Company, threatened.jj. Off-Balance Sheet Arrangements. Except as otherwise disclosed in the Registration Statement and Prospectus, the Company does not haveany off-balance sheet arrangement.kk. Underwriter Agreements. Other than with respect to this Agreement, the Company is not a party to any agreement with an agent orunderwriter for any other “at the market” or continuous equity transaction.ll. ERISA. To the knowledge of the Company, (i) each material employee benefit plan, within the meaning of Section 3(3) of the EmployeeRetirement Income Security Act13of 1974, as amended (“ERISA”) that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees of theCompany and the Subsidiaries has been maintained in material compliance with its terms and the requirements of any applicable statutes, orders, rules andregulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); (ii) no prohibited transaction, within the meaningof Section 406 of ERISA or Section 4975 of the Code, has occurred which would result in a material liability to the Company with respect to any such planexcluding transactions effected pursuant to a statutory or administrative exemption; and (iii) for each such plan that is subject to the funding rules of Section 412 ofthe Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived, and thefair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) equals or exceeds the present value of all benefitsaccrued under such plan determined using reasonable actuarial assumptions, other than, in the case of (i), (ii) and (iii) above, as would not have a Material AdverseEffect.mm. Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act) (a “Forward-Looking Statement”) contained in the Registration Statement and the Prospectus has been made or reaffirmed without a reasonablebasis or has been disclosed other than in good faith.nn. Reserved.oo. Insurance. The Company and the Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Companyand the Subsidiaries reasonably believe are adequate for the conduct of their business.pp. No Improper Practices. (i) Neither the Company nor, to the Company’s knowledge, the Subsidiaries, nor to the Company’s knowledge,any of their respective executive officers has, in the past five years, made any unlawful contributions to any candidate for any political office (or failed fully to discloseany contribution in violation of law) or made any contribution or other payment to any official of, or candidate for, any federal, state, municipal, or foreign office orother person charged with similar public or quasi-public duty in violation of any law or of the character required to be disclosed in the Prospectus; (ii) norelationship, direct or indirect, exists between or among the Company or, to the Company’s knowledge, the Subsidiaries or any affiliate of any of them, on the onehand, and the directors, officers and stockholders of the Company or, to the Company’s knowledge, the Subsidiaries, on the other hand, that is required by theSecurities Act to be described in the Registration Statement and the Prospectus that is not so described; (iii) no relationship, direct or indirect, exists between oramong the Company or the Subsidiaries or any affiliate of them, on the one hand, and the directors, officers, stockholders or directors of the Company or, to theCompany’s knowledge, the Subsidiaries, on the other hand, that is required by the rules of FINRA to be described in the Registration Statement and the Prospectusthat is not so described; (iv) there are no material outstanding loans or advances or material guarantees of indebtedness by the Company or, to the Company’sknowledge, the Subsidiaries to or for the benefit of any of their respective officers or directors or any of the members of the families of any of them; and (v) theCompany has not offered, or caused any placement agent to offer, Common Share to any person with the intent to influence unlawfully (A) a customer or supplier ofthe Company or the Subsidiaries to alter the customer’s or supplier’s14level or type of business with the Company or the Subsidiaries or (B) a trade journalist or publication to write or publish favorable information about the Companyor the Subsidiaries or any of their respective products or services, and, (vi) neither the Company nor the Subsidiaries nor, to the Company’s knowledge, anyemployee or agent of the Company or the Subsidiaries has made any payment of funds of the Company or the Subsidiaries or received or retained any funds inviolation of any law, rule or regulation (including, without limitation, the Foreign Corrupt Practices Act of 1977), which payment, receipt or retention of funds is of acharacter required to be disclosed in the Registration Statement or the Prospectus.qq. Status Under the Securities Act. The Company was not and is not anineligible issuer as defined in Rule 405 under the Securities Act at the times specified in Rules 164 and 433 under the Securities Act in connection with the offeringof the Placement Shares.rr. No Misstatement or Omission in an Issuer Free Writing Prospectus. Each Issuer Free Writing Prospectus, as of its issue date and as of eachApplicable Time (as defined in Section 25 below), did not, does not and will not, through the completion of the Placement or Placements for which such Issuer FreeWriting Prospectus is issued, include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or theProspectus, including any incorporated document deemed to be a part thereof that has not been superseded or modified. The foregoing sentence does not apply tostatements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Agentspecifically for use therein.ss. No Conflicts. Neither the execution of this Agreement, nor the issuance, offering or sale of the Placement Shares, nor the consummation ofany of the transactions contemplated herein, nor the compliance by the Company with the terms and provisions hereof will conflict with, or will result in a breach of,any of the terms and provisions of, or has constituted or will constitute a default under, or has resulted in or will result in the creation or imposition of any lien, chargeor encumbrance upon any property or assets of the Company pursuant to the terms of any contract or other agreement to which the Company may be bound or towhich any of the property or assets of the Company is subject, except (i) such conflicts, breaches or defaults as may have been waived and (ii) such conflicts,breaches and defaults that would not have a Material Adverse Effect; nor will such action result (x) in any violation of the provisions of the organizational orgoverning documents of the Company, or (y) in any material violation of the provisions of any statute or any order, rule or regulation applicable to the Company orof any court or of any federal, state or other regulatory authority or other government body having jurisdiction over the Company, except where such violationwould not have a Material Adverse Effect.tt. OFAC.(i) Neither the Company nor any Subsidiary (collectively, the “Entity”) nor, to the Company’s knowledge, any director, officer,employee, agent, affiliate or representative of the Entity, is a government, individual, or entity (in this paragraph (uu), “Person”) that is, or is owned or controlled by aPerson that is:(a) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign AssetsControl (“OFAC”), the United Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s Treasury15(“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), nor(b) located, organized or resident in a country or territory that is the subject of Sanctions.(ii) The Entity will not, directly or indirectly, knowingly use the proceeds of the offering, or lend, contribute or otherwise make availablesuch proceeds to any subsidiary, joint venture partner or other Person:(a) to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of suchfunding or facilitation, is the subject of Sanctions; or(b) in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in theoffering, whether as underwriter, advisor, investor or otherwise).(iii) The Entity represents and covenants that, except as detailed in the Registration Statement and the Prospectus, for the past 5 years,it has not knowingly engaged in and is not now knowingly engaged in any dealing or transactions with any Person, or in any country or territory, that at the time ofthe dealing or transaction is or was the subject of Sanctions.uu. Stock Transfer Taxes. On each Settlement Date, all material stock transfer or other taxes (other than income taxes) which are required to bepaid in connection with the sale and transfer of the Placement Shares to be sold hereunder will be, or will have been, fully paid or provided for by the Company andall laws imposing such taxes will be or will have been fully complied with by the Company in all material respects.vv. Reserved.Any certificate signed by an officer of the Company and delivered to the Agent or to counsel for the Agent pursuant to or in connection with thisAgreement shall be deemed to be a representation and warranty by the Company, as applicable, to the Agent as to the matters set forth therein.7. Covenants of the Company. The Company covenants and agrees with the Agent that:a. Registration Statement Amendments. After the date of this Agreement and during any period in which a prospectus relating to any PlacementShares is required to be delivered by the Agent under the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172under the Securities Act) (the “Prospectus Delivery Period”) (i) the Company will notify the Agent promptly of the time when any subsequent amendment to theRegistration Statement, other than documents incorporated by reference or amendments not related to any Placement, has been filed with the Commission and/orhas become effective or any subsequent supplement to the Prospectus has been filed and of any request by the Commission for any amendment or supplement tothe Registration Statement or Prospectus related to the Placement or for additional information related to the Placement, (ii) the Company will prepare and file withthe Commission, promptly upon the Agent’s request, any amendments or16supplements to the Registration Statement or Prospectus that, upon the advice of the Company’s legal counsel, may be necessary or advisable in connection withthe distribution of the Placement Shares by the Agent (provided, however, that the failure of the Agent to make such request shall not relieve the Company of anyobligation or liability hereunder, or affect the Agent’s right to rely on the representations and warranties made by the Company in this Agreement and provided,further, that the only remedy the Agent shall have with respect to the failure to make such filing shall be to cease making sales under this Agreement until suchamendment or supplement is filed); (iii) the Company will not file any amendment or supplement to the Registration Statement or Prospectus relating to thePlacement Shares or a security convertible into the Placement Shares (other than an Incorporated Document) unless a copy thereof has been submitted to the Agentwithin a reasonable period of time before the filing and the Agent has not reasonably objected thereto (provided, however, that (A) the failure of the Agent to makesuch objection shall not relieve the Company of any obligation or liability hereunder, or affect the Agent’s right to rely on the representations and warranties made bythe Company in this Agreement and (B) the Company has no obligation to provide the Agent any advance copy of such filing or to provide the Agent an opportunityto object to such filing if the filing does not name the Agent or does not relate to the transaction herein provided; and provided, further, that the only remedy theAgent shall have with respect to the failure by the Company to obtain such consent shall be to cease making sales under this Agreement) and the Company willfurnish to the Agent at the time of filing thereof a copy of any document that upon filing is deemed to be incorporated by reference into the Registration Statement orProspectus, except for those documents available via EDGAR; and (iv) the Company will cause each amendment or supplement to the Prospectus to be filed withthe Commission as required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act or, in the case of any document to be incorporated therein byreference, to be filed with the Commission as required pursuant to the Exchange Act, within the time period prescribed (the determination to file or not file anyamendment or supplement with the Commission under this Section 7(a), based on the Company’s reasonable opinion or reasonable objections, shall be madeexclusively by the Company).b. Notice of Commission Stop Orders. The Company will advise the Agent, promptly after it receives notice or obtains knowledge thereof, ofthe issuance or threatened issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension of thequalification of the Placement Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose; and it will useits commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued. The Company willadvise the Agent promptly after it receives any request by the Commission for any amendments to the Registration Statement or any amendment or supplements tothe Prospectus or any Issuer Free Writing Prospectus or for additional information related to the offering of the Placement Shares or for additional informationrelated to the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus.c. Delivery of Prospectus; Subsequent Changes. During the Prospectus Delivery Period, the Company will comply with all requirementsimposed upon it by the Securities Act, as from time to time in force, and to file on or before their respective due dates all reports and any definitive proxy orinformation statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under theExchange Act. If the Company has omitted any information from the Registration Statement17pursuant to Rule 430A under the Securities Act, it will use its commercially reasonable efforts to comply with the provisions of and make all requisite filings with theCommission pursuant to said Rule 430A and to notify the Agent promptly of all such filings. If during the Prospectus Delivery Period any event occurs as a result ofwhich the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to make thestatements therein, in the light of the circumstances then existing, not misleading, or if during such Prospectus Delivery Period it is necessary to amend or supplementthe Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly notify the Agent to suspend the offering of PlacementShares during such period and the Company will promptly amend or supplement the Registration Statement or Prospectus (at the expense of the Company) so as tocorrect such statement or omission or effect such compliance; provided, however, that the Company may delay the filing of any amendment or supplement, if in thejudgment of the Company, it is in the best interest of the Company.d. Listing of Placement Shares. During the Prospectus Delivery Period, the Company will use its commercially reasonable efforts to cause thePlacement Shares to be listed on the Exchange and to qualify the Placement Shares for sale under the securities laws of such jurisdictions in the United States as theAgent reasonably designates and to continue such qualifications in effect so long as required for the distribution of the Placement Shares; provided, however, thatthe Company shall not be required in connection therewith to qualify as a foreign corporation or dealer in securities, file a general consent to service of process, orsubject itself to taxation in any jurisdiction if it is not otherwise so subject.e. Delivery of Registration Statement and Prospectus. The Company will furnish to the Agent and its counsel (at the reasonable expense of theCompany) copies of the Registration Statement, the Prospectus (including all documents incorporated by reference therein) and all amendments and supplements tothe Registration Statement or Prospectus that are filed with the Commission during the Prospectus Delivery Period (including all documents filed with theCommission during such period that are deemed to be incorporated by reference therein), in each case as soon as reasonably practicable and in such quantities asthe Agent may from time to time reasonably request and, at the Agent’s request, will also furnish copies of the Prospectus to each exchange or market on whichsales of the Placement Shares may be made; provided, however, that the Company shall not be required to furnish any document (other than the Prospectus) to theAgent to the extent such document is available on EDGAR.f. Earnings Statement. The Company will make generally available to its security holders as soon as practicable, but in any event not later than15 months after the end of the Company’s current fiscal quarter, an earnings statement covering a 12-month period that satisfies the provisions of Section 11(a) andRule 158 of the Securities Act.g. Use of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”h. Notice of Other Sales. Without the prior written consent of the Agent, the Company will not, directly or indirectly, offer to sell, sell, contractto sell, grant any option to sell or otherwise dispose of any Common Share (other than the Placement Shares offered pursuant to this Agreement) or securitiesconvertible into or exchangeable for Common Share, warrants or any rights to purchase or acquire, Common Share during the period beginning on the date onwhich18any Placement Notice is delivered to the Agent hereunder and ending on the third (3rd) Trading Day immediately following the final Settlement Date with respect toPlacement Shares sold pursuant to such Placement Notice (or, if the Placement Notice has been terminated or suspended prior to the sale of all Placement Sharescovered by a Placement Notice, the date of such suspension or termination); and will not directly or indirectly in any other “at the market” or continuous equitytransaction offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Share (other than the Placement Shares offered pursuantto this Agreement) or securities convertible into or exchangeable for Common Share, warrants or any rights to purchase or acquire, Common Share prior to thetermination of this Agreement; provided, however, that such restrictions will not apply in connection with the Company’s issuance or sale of (i) Common Share,options to purchase Common Share or Common Share issuable upon the exercise of options, pursuant to any stock option, or benefits plan, stock ownership planor dividend reinvestment plan (but not Common Share subject to a waiver to exceed plan limits in its dividend reinvestment plan) of the Company whether now ineffect or hereafter implemented; (ii) Common Share issuable upon conversion of securities or the exercise of warrants, options or other rights in effect oroutstanding, and disclosed in filings by the Company available on EDGAR or otherwise in writing to the Agent, (iii) Common Share, or securities convertible into orexercisable for Common Share, offered and sold in a privately negotiated transaction to vendors, customers, strategic partners or potential strategic partners orother investors conducted in a manner so as not to be integrated with the offering of Common Share hereby and (iv) Common Share in connection with anyacquisition, strategic investment or other similar transaction (including any joint venture, strategic alliance or partnership).i. Change of Circumstances. The Company will, at any time during the pendency of a Placement Notice advise the Agent promptly after it shallhave received notice or obtained knowledge thereof, of any information or fact that would alter or affect in any material respect any opinion, certificate, letter orother document required to be provided to the Agent pursuant to this Agreement.j. Due Diligence Cooperation. During the term of this Agreement, the Company will cooperate with any reasonable due diligence reviewconducted by the Agent or its representatives in connection with the transactions contemplated hereby, including, without limitation, providing information andmaking available documents and senior corporate officers, during regular business hours and at the Company’s principal offices, as the Agent may reasonablyrequest.k. Required Filings Relating to Placement of Placement Shares. The Company agrees that on such dates as the Securities Act shall require, theCompany will (i) file a prospectus supplement with the Commission under the applicable paragraph of Rule 424(b) under the Securities Act (each and every date afiling under Rule 424(b) is made, a “Filing Date”), which prospectus supplement will set forth, within the relevant period, the amount of Placement Shares soldthrough the Agent, the Net Proceeds to the Company and the compensation payable by the Company to the Agent with respect to such Placement Shares, and (ii)deliver such number of copies of each such prospectus supplement to each exchange or market on which such sales were effected as may be required by the rulesor regulations of such exchange or market.l. Representation Dates; Certificate. Each time during the term of this19Agreement that the Company:(i) amends or supplements (other than a prospectus supplement relating solely to an offering of securities other than the PlacementShares) the Registration Statement or the Prospectus relating to the Placement Shares by means of a post-effective amendment, sticker, or supplement but not bymeans of incorporation of documents by reference into the Registration Statement or the Prospectus relating to the Placement Shares;(ii) files an annual report on Form 20-F under the Exchange Act (including any Form 20-F/A containing amended audited fmancialinformation or a material amendment to the previously filed Form 20-F);(iii) files its quarterly or semi-annual financial statements on Form 6-K under the Exchange Act; or(iv) files a current report on Form 6-K containing amended financial information under the Exchange Act;(Each date of filing of one or more of the documents referred to in clauses (i) through (iv) shall be a “Representation Date.”)the Company shall furnish the Agent (but in the case of clause (iv) above only if the Agent reasonably determines that the information contained in such Form 6-K ismaterial) with a certificate, in the form attached hereto as Exhibit 7(1). The requirement to provide a certificate under this Section 7(1) shall be waived for anyRepresentation Date occurring at a time at which no Placement Notice is pending, which waiver shall continue until the earlier to occur of the date the Companydelivers a Placement Notice hereunder (which for such calendar quarter shall be considered a Representation Date) and the next occurring Representation Date onwhich the Company files its annual report on Form 20-F. Notwithstanding the foregoing, (i) upon the delivery of the first Placement Notice hereunder and (ii) if theCompany subsequently decides to sell Placement Shares following a Representation Date when the Company relied on such waiver and did not provide the Agentwith a certificate under this Section 7(1), then before the Agent sells any Placement Shares, the Company shall provide the Agent with a certificate, in the formattached hereto as Exhibit 7(1), dated the date of the Placement Notice.m. Legal Opinion. On or prior to the date of the first Placement Notice given hereunder the Company shall cause to be furnished to the Agent awritten opinion and a negative assurance letter of Seward & Kissel LLP (“Company Counsel”), or other counsel reasonably satisfactory to the Agent, each in formand substance reasonably satisfactory to the Agent. Thereafter, within five (5) Trading Days of each Representation Date with respect to which the Company isobligated to deliver a certificate in the form attached hereto as Exhibit 7(1) for which no waiver is applicable, the Company shall cause to be furnished to the Agenta negative assurance letter of Company Counsel in form and substance reasonably satisfactory to the Agent; provided that, in lieu of such negative assurance forsubsequent periodic filings under the Exchange Act, counsel may furnish the Agent with a letter (a “Reliance Letter”) to the effect that the Agent may rely on thenegative assurance letter previously delivered under this Section 7(m) to the same extent as if it were dated the date of such letter (except that statements in suchprior letter shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented as20of the date of the Reliance Letter).n. Comfort Letter. On or prior to the date of the first Placement Notice given hereunder and within five (5) Trading Days after each subsequentRepresentation Date, other than pursuant to Section 7(1)(iii), the Company shall cause its independent accountants to furnish the Agent letters (the “ComfortLetters”), dated the date the Comfort Letter is delivered, which shall meet the requirements set forth in this Section 7(n). The Comfort Letter from the Company’sindependent accountants shall be in a form and substance reasonably satisfactory to the Agent, (i) confirming that they are an independent public accounting firmwithin the meaning of the Securities Act and the Public Company Accounting Oversight Board (the “PCAOB”), (ii) stating, as of such date, the conclusions andfindings of such firm with respect to the financial information and other matters ordinarily covered by accountants’ “comfort letters” to underwriters in connectionwith registered public offerings (the first such letter, the “Initial Comfort Letter”) and (iii) updating the Initial Comfort Letter with any information that would havebeen included in the Initial Comfort Letter had it been given on such date and modified as necessary to relate to the Registration Statement and the Prospectus, asamended and supplemented to the date of such letter.o. Market Activities. The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or wouldconstitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of Common Share or (ii) sell, bid for, orpurchase Common Share in violation of Regulation M, or pay anyone any compensation for soliciting purchases of the Placement Shares other than the Agent.p. Investment Company Act. The Company will conduct its affairs in such a manner so as to reasonably ensure that neither it nor theSubsidiaries will be or become, at any time prior to the termination of this Agreement, an “investment company,” as such term is defined in the Investment CompanyAct.q. No Offer to Sell. Other than an Issuer Free Writing Prospectus approved in advance by the Company and the Agent in its capacity as agenthereunder pursuant to Section 23, neither of the Agent nor the Company (including its agents and representatives, other than the Agent in its capacity as such) willmake, use, prepare, authorize, approve or refer to any written communication (as defined in Rule 405), required to be filed with the Commission, that constitutes anoffer to sell or solicitation of an offer to buy Placement Shares hereunder.8. Representations and Covenants of the Agent. The Agent represents and warrants that it is duly registered as a broker-dealer under FINRA, theExchange Act and the applicable statutes and regulations of each state in which the Placement Shares will be offered and sold, except such states in which the Agentis exempt from registration or such registration is not otherwise required. The Agent shall continue, for the term of this Agreement, to be duly registered as a broker-dealer under FINRA, the Exchange Act and the applicable statutes and regulations of each state in which the Placement Shares will be offered and sold, exceptsuch states in which it is exempt from registration or such registration is not otherwise required, during the term of this Agreement. The Agent shall comply with allapplicable law and regulations in connection with the transactions contemplated by this Agreement, including the issuance and sale through the Agent of thePlacement Shares.9. Payment of Expenses. The Company will pay all expenses incident to the21performance of its obligations under this Agreement, including (i) the preparation, filing, including any fees required by the Commission, and printing of theRegistration Statement (including financial statements and exhibits) as originally filed and of each amendment and supplement thereto and each Free WritingProspectus, in such number as the Agent shall deem reasonably necessary, (ii) the printing and delivery to the Agent of this Agreement and such other documents asmay be required in connection with the offering, purchase, sale, issuance or delivery of the Placement Shares, (iii) the preparation, issuance and delivery of thecertificates, if any, for the Placement Shares to the Agent, including any stock or other transfer taxes and any capital duties, stamp duties or other duties or taxespayable upon the sale, issuance or delivery of the Placement Shares to the Agent, (iv) the fees and disbursements of the counsel, accountants and other advisors tothe Company, (v) the reasonable and documented out-of-pocket fees and disbursements of counsel to the Agent up to $50,000.00; (vi) the fees and expenses ofthe transfer agent and registrar for the Common Share, (vii) the filing fees incident to any review by FINRA of the terms of the sale of the Placement Shares, and(viii) the fees and expenses incurred in connection with the listing of the Placement Shares on the Exchange.10. Conditions to the Agent’s Obligations. The obligations of the Agent hereunder with respect to a Placement will be subject to the continuing accuracyand completeness of the representations and warranties made by the Company herein (other than those representations and warranties made as of a specified dateor time), to the due performance in all material respects by the Company of its obligations hereunder, to the completion by the Agent of a due diligence reviewsatisfactory to it in its reasonable judgment, and to the continuing reasonable satisfaction (or waiver by the Agent in its sole discretion) of the following additionalconditions:a. Registration Statement Effective. The Registration Statement shall remain effective and shall be available for the sale of all Placement Sharescontemplated to be issued by any Placement Notice.b. No Material Notices. None of the following events shall have occurred and be continuing: (i) receipt by the Company of any request foradditional information from the Commission or any other federal or state governmental authority during the period of effectiveness of the Registration Statement, theresponse to which would require any post-effective amendments or supplements to the Registration Statement or the Prospectus; (ii) the issuance by theCommission or any other federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or receipt by theCompany of notification of the initiation of any proceedings for that purpose; (iii) receipt by the Company of any notification with respect to the suspension of thequalification or exemption from qualification of any of the Placement Shares for sale in any jurisdiction or receipt by the Company of notification of the initiation of,or a threat to initiate, any proceeding for such purpose; or (iv) the occurrence of any event that makes any material statement made in the Registration Statement orthe Prospectus or any material Incorporated Document untrue in any material respect or that requires the making of any changes in the Registration Statement, theProspectus or any material Incorporated Document so that, in the case of the Registration Statement, it will not contain any materially untrue statement of a materialfact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and, that in the case of the Prospectusor any material Incorporated Document, it will not contain any materially untrue statement of a material fact or omit to state any material fact required to be statedtherein or necessary to make the statements22therein, in the light of the circumstances under which they were made, not misleading.c. No Misstatement or Material Omission. The Agent shall not have advised the Company that the Registration Statement or Prospectus, or anyamendment or supplement thereto, contains an untrue statement of fact that in the Agent’s reasonable opinion is material, or omits to state a fact that in the Agent’sreasonable opinion is material and is required to be stated therein or is necessary to make the statements therein not misleading.d. Material Changes. Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the Commission, there shallnot have been any Material Adverse Effect, or any development that would cause a Material Adverse Effect, or a downgrading in or withdrawal of the ratingassigned to any of the Company’s securities (other than asset backed securities) by any “nationally recognized statistical rating organization,” as such term is definedby the Commission for purposes of Rule 436(g)(2) under the Securities Act (a “Rating Organization”), or a public announcement by any Rating Organization that ithas under surveillance or review its rating of any of the Company’s securities (other than asset backed securities), the effect of which, in the case of any such actionby a Rating Organization described above, in the reasonable judgment of the Agent (without relieving the Company of any obligation or liability it may otherwisehave), is so material as to make it impracticable or inadvisable to proceed with the offering of the Placement Shares on the terms and in the manner contemplated inthe Prospectus.e. Legal Opinion. The Agent shall have received (i) the opinion and negative assurance letter of Company Counsel required to be deliveredpursuant to Section 7(m) on or before the date on which such delivery of such opinion and negative assurance letter are required pursuant to Section 7(m); and (ii)the opinion of MJM Limited, the Company’s Bermuda counsel, in a form reasonably satisfactory to the Agent.f. Comfort Letter. The Agent shall have received the Comfort Letter required to be delivered pursuant Section 7(n) on or before the date onwhich such delivery of such letter is required pursuant to Section 7(n).g. Representation Certificate. The Agent shall have received the certificate required to be delivered pursuant to Section 7(1) on or before thedate on which delivery of such certificate is required pursuant to Section 7(1).h. Secretary’s Certificate. On or prior to the first Representation Date, the Agent shall have received a certificate, signed on behalf of theCompany by its corporate Secretary, in form and substance satisfactory to the Agent and its counsel. Such certificate shall include a representation that theCompany (i) has a non-affiliate and public common equity float of at least $300 million, calculated on any date within the past 60 days from the date of thisAgreement, and (ii) has been subject to the Exchange Act reporting requirements for a period of at least 36 months and has filed in a timely manner all such reportsrequired to be filed in the past 12 months.i. No Suspension. Trading in the Common Share shall not have been suspended on the Exchange and the Common Share shall not have beendelisted from the Exchange.23j. Other Materials. On each date on which the Company is required to deliver a certificate pursuant to Section 7(1), the Company shall havefurnished to the Agent such appropriate further information, certificates and documents as the Agent may reasonably request and which are usually and customarilyfurnished by an issuer of securities in connection with a securities offering of the type contemplated hereby. All such opinions, certificates, letters and otherdocuments will be in compliance with the provisions hereof.k. Securities Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to theissuance of any Placement Notice hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.l. Approval for Listing. The Placement Shares shall either have been approved for listing on the Exchange, subject only to notice of issuance, orthe Company shall have filed an application for listing of the Placement Shares on the Exchange at, or prior to, the issuance of any Placement Notice.m. No Termination Event. There shall not have occurred any event that would permit the Agent to terminate this Agreement pursuant to Section13(a).n. FINRA. If applicable, FINRA shall have raised no objection to the terms of this offering and the amount of compensation allowable orpayable to the Agent as described in the Prospectus11. Indemnification and Contribution.a. Company Indemnification. The Company agrees to indemnify and hold harmless the Agent, its partners, members, directors, officers,employees and agents and each person, if any, who controls the Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act asfollows:(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, arising out of or based uponany untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or allegedomission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statementor alleged untrue statement of a material fact included in any related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), orthe omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which theywere made, not misleading;(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, to the extent of the aggregateamount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claimwhatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 11(d) below)any such settlement is effected with the written consent of the Company, which consent shall not unreasonably be delayed or withheld; and24(iii) against any and all expense whatsoever, as incurred (including the reasonable and documented out-of-pocket fees anddisbursements of counsel), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmentalagency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement oromission, to the extent that any such expense is not paid under (i) or (ii) above,provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement oromission or alleged untrue statement or omission made solely in reliance upon and in conformity with written information furnished to the Company by the Agentexpressly for use in the Registration Statement (or any amendment thereto), or in any related Issuer Free Writing Prospectus or the Prospectus (or any amendmentor supplement thereto).b. Indemnification by the Agent. The Agent agrees to indemnify and hold harmless the Company and its directors and officers, and each person,if any, who (i) controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or is undercommon control with the Company against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 11(a), as incurred,but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendments thereto)or in any related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with informationrelating to the Agent and furnished to the Company in writing by the Agent expressly for use therein.c. Procedure. Any party that proposes to assert the right to be indemnified under this Section 11 will, promptly after receipt of notice ofcommencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section 11, notify eachsuch indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party will notrelieve the indemnifying party from (i) any liability that it might have to any indemnified party otherwise than under this Section 11 and (ii) any liability that it may haveto any indemnified party under the foregoing provisions of this Section 11 unless, and only to the extent that, such omission results in the forfeiture of substantiverights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement,the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receivingnotice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action,with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume thedefense, the indemnifying party will not be liable to the indemnified party for any legal or other expenses except as provided below and except for the reasonablecosts of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its owncounsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (1) the employment ofcounsel by the indemnified party has been authorized in writing by the25indemnifying party, (2) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or otherindemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict of interest exists (based onadvice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right todirect the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel to assume the defense of suchaction within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable and documented out-of-pocket fees,disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shallnot, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable and documented out-of-pocket fees,disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. Allsuch reasonable and documented out-of-pocket fees, disbursements and other charges will be reimbursed by the indemnifying party promptly after the indemnifyingparty receives a written invoice relating to fees, disbursements and other charges in reasonable detail. An indemnifying party will not, in any event, be liable for anysettlement of any action or claim effected without its written consent. No indemnifying party shall, without the prior written consent of each indemnified party, settleor compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section11 (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent (1) includes an unconditional release of each indemnifiedparty from all liability arising out of such litigation, investigation, proceeding or claim and (2) does not include a statement as to or an admission of fault, culpability ora failure to act by or on behalf of any indemnified party.d. Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in theforegoing paragraphs of this Section 11 is applicable in accordance with its terms but for any reason is held to be unavailable from the Company or the Agent, theCompany and the Agent will contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonablyincurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted, but after deducting any contribution receivedby the Company from persons other than the Agent, such as persons who control the Company within the meaning of the Securities Act or the Exchange Act,officers of the Company who signed the Registration Statement and directors of the Company, who also may be liable for contribution) to which the Company andthe Agent may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Agent on theother hand. The relative benefits received by the Company on the one hand and the Agent on the other hand shall be deemed to be in the same proportion as thetotal Net Proceeds from the sale of the Placement Shares (before deducting expenses) received by the Company bear to the total compensation received by theAgent (before deducting expenses) from the sale of Placement Shares on behalf of the Company. If, but only if, the allocation provided by the foregoing sentence isnot permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to inthe foregoing sentence but also the relative fault of the Company, on the one hand, and the Agent, on the other hand, with respect to the statements26or omission that resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations withrespect to such offering. Such relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material factor omission or alleged omission to state a material fact relates to information supplied by the Company or the Agent, the intent of the parties and their relativeknowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Agent agree that it would not be just andequitable if contributions pursuant to this Section 11(d) were to be determined by pro rata allocation or by any other method of allocation that does not take intoaccount the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense, ordamage, or action in respect thereof, referred to above in this Section 11(d) shall be deemed to include, for the purpose of this Section 11(d), any legal or otherexpenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim to the extent consistent with Section11(c) hereof. Notwithstanding the foregoing provisions of this Section 11(d), the Agent shall not be required to contribute any amount in excess of the commissionsreceived by it under this Agreement and no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will beentitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 11(d), any person who controls aparty to this Agreement within the meaning of the Securities Act or the Exchange Act, and any officers, directors, partners, employees or agents of the Agent, willhave the same rights to contribution as that party, and each officer who signed the Registration Statement and director of the Company will have the same rights tocontribution as the Company, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement ofany action against such party in respect of which a claim for contribution may be made under this Section 11(d), will notify any such party or parties from whomcontribution may be sought, but the omission to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation it orthey may have under this Section 11(d) except to the extent that the failure to so notify such other party materially prejudiced the substantive rights or defenses of theparty from whom contribution is sought. Except for a settlement entered into pursuant to the last sentence of Section 11(c) hereof, no party will be liable forcontribution with respect to any action or claim settled without its written consent if such consent is required pursuant to Section 11(c) hereof.12. Representations and Agreements to Survive Delivery. The indemnity and contribution agreements contained in Section 11 of this Agreement and allrepresentations and warranties of the Company herein or in certificates delivered pursuant hereto shall survive, as of their respective dates, regardless of (i) anyinvestigation made by or on behalf of the Agent, any controlling persons, or the Company (or any of their respective officers, directors or controlling persons), (ii)delivery and acceptance of the Placement Shares and payment therefor or (iii) any termination of this Agreement.13. Termination.a. The Agent may terminate this Agreement, by notice to the Company, as hereinafter specified at any time (1) if there has been, since the timeof execution of this Agreement or since the date as of which information is given in the Prospectus, any Material Adverse Effect, or any development that wouldhave a Material Adverse Effect that, in the sole judgment of the27Agent, is material and adverse and makes it impractical or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares,(2) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities orescalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economicconditions, in each case the effect of which is such as to make it, in the judgment of the Agent, impracticable or inadvisable to market the Placement Shares or toenforce contracts for the sale of the Placement Shares, (3) if trading in the Common Share has been suspended or limited by the Commission or the Exchange, or iftrading generally on the Exchange has been suspended or limited, or minimum prices for trading have been fixed on the Exchange, (4) if any suspension of trading ofany securities of the Company on any exchange or in the over-the-counter market shall have occurred and be continuing, (5) if a major disruption of securitiessettlements or clearance services in the United States shall have occurred and be continuing, or (6) if a banking moratorium has been declared by either U.S.Federal or New York authorities. Any such termination shall be without liability of any party to any other party except that the provisions of Section 9 (Payment ofExpenses), Section 11 (Indemnification and Contribution), Section 12 (Representations and Agreements to Survive Delivery), Section 18 (Governing Law andTime; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction) hereof shall remain in full force and effect notwithstanding such termination. If the Agent electsto terminate this Agreement as provided in this Section 13(a), the Agent shall provide the required notice as specified in Section 14 (Notices).b. The Company shall have the right, by giving five (5) days’ notice as hereinafter specified to terminate this Agreement in its sole discretion atany time after the date of this Agreement. Any such termination shall be without liability of any party to any other party except that the provisions of Section 9(Payment of Expenses), Section 11 (Indemnification and Contribution), Section 12 (Representations and Agreements to Survive Delivery), Section 18 (GoverningLaw and Time; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction) hereof shall remain in full force and effect notwithstanding such termination.c. The Agent shall have the right, by giving five (5) days’ notice as hereinafter specified to terminate this Agreement in its sole discretion at anytime after the date of this Agreement. Any such termination shall be without liability of any party to any other party except that the provisions of Section 9 (Paymentof Expenses), Section 11 (Indemnification and Contribution), Section 12 (Representations and Agreements to Survive Delivery), Section 18 (Governing Law andTime; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction) hereof shall remain in full force and effect notwithstanding such termination.d. Unless earlier terminated pursuant to this Section 13, this Agreement shall automatically terminate upon the issuance and sale of all of thePlacement Shares through the Agent on the terms and subject to the conditions set forth herein except that the provisions of Section 9 (Payment of Expenses),Section 11 (Indemnification and Contribution), Section 12 (Representations and Agreements to Survive Delivery), Section 18 (Governing Law and Time; Waiver ofJury Trial) and Section 19 (Consent to Jurisdiction) hereof shall remain in full force and effect notwithstanding such termination.e. This Agreement shall remain in full force and effect unless terminated28pursuant to Sections 13(a), (b), (c), or (d) above or otherwise by mutual agreement of the parties; provided, however, that any such termination by mutualagreement shall in all cases be deemed to provide that Section 9 (Payment of Expenses), Section 11 (Indemnification and Contribution), Section 12(Representations and Agreements to Survive Delivery), Section 18 (Governing Law and Time; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction) shallremain in full force and effect. Upon termination of this Agreement, the Company shall not have any liability to the Agent for any discount, commission or othercompensation with respect to any Placement Shares not otherwise sold by the Agent under this Agreement.f. Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided, however, that suchtermination shall not be effective until the close of business on the date of receipt of such notice by the Agent or the Company, as the case may be. If suchtermination shall occur prior to the Settlement Date for any sale of Placement Shares, such Placement Shares shall settle in accordance with the provisions of thisAgreement.14. Notices. All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of thisAgreement shall be in writing, unless otherwise specified, and if sent to the Agent, shall be delivered to:B. Riley FBR, Inc.299 Park Avenue, 7th FloorNew York, NY 10171Attention: General CounselTelephone: (212) 457-9947Email: atmdesk@brileyfbr.comwith a copy to:Morgan Lewis & Bockius LLP1400 Page Mill RoadPalo Alto, CA 94304Attention: Albert LungTelephone: (650) 843-7263Email: albert.lung@morganlewis.comand if to the Company, shall be delivered to:LOM Building27 Reid Street, Hamilton, HM 11BermudaAttention: Bjorn GiaeverTelephone: (441) 292-7202Email: bg@scandicamerican.comwith a copy to:Seward & Kissel LLP29One Battery Park PlazaNew York NY 10004Attention: Gary WolfeTelephone: (212) 574-1223Email: Wolfe@sewkis.comEach party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose.Each such notice or other communication shall be deemed given (i) when delivered personally, by email, or by verifiable facsimile transmission on or before 4:30p.m., New York City time, on a Business Day or, if such day is not a Business Day, on the next succeeding Business Day, (ii) on the next Business Day after timelydelivery to a nationally-recognized overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, returnreceipt requested, postage prepaid). For purposes of this Agreement, “Business Day” shall mean any day on which the Exchange and commercial banks in the Cityof New York are open for business.15. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and the Agent and their respectivesuccessors and the affiliates, controlling persons, officers and directors referred to in Section 11 hereof. References to any of the parties contained in this Agreementshall be deemed to include the successors and permitted assigns of such party. Nothing in this Agreement, express or implied, is intended to confer upon any partyother than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement,except as expressly provided in this Agreement. Neither the Company nor the Agent may assign its rights or obligations under this Agreement without the priorwritten consent of the other party.16. Adjustments for Stock Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be adjusted totake into account any share consolidation, stock split, stock dividend, corporate domestication or similar event effected with respect to the Placement Shares.17. Entire Agreement; Amendment; Severability. This Agreement (including all schedules and exhibits attached hereto and Placement Notices issuedpursuant hereto) constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, amongthe parties hereto with regard to the subject matter hereof. Neither this Agreement nor any term hereof may be amended except pursuant to a written instrumentexecuted by the Company and the Agent. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is heldinvalid, illegal or unenforceable as written by a court of competent jurisdiction, then such provision shall be given full force and effect to the fullest possible extent thatit is valid, legal and enforceable, and the remainder of the terms and provisions herein shall be construed as if such invalid, illegal or unenforceable term or provisionwas not contained herein, but only to the extent that giving effect to such provision and the remainder of the terms and provisions hereof shall be in accordance withthe intent of the parties as reflected in this Agreement.18. GOVERNING LAW AND TIME; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED INACCORDANCE WITH30HE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAYREFER TO NEW YORK CITY TIME. THE COMPANY AND THE AGENT EACH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATINGTO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY19. CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OFTHE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANYDISPUTE HEREUNDER OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND HEREBY IRREVOCABLY WAIVES,AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THEJURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM ORTHAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONALSERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING ACOPY THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT FORNOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OFPROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVEPROCESS IN ANY MANNER PERMITTED BY LAW.20. Use of Information. The Agent may not use any information gained in connection with this Agreement and the transactions contemplated by thisAgreement, including due diligence, to advise any party with respect to transactions not expressly approved by the Company.21. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which togethershall constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile transmission or email of a .pdfattachment.22. Effect of Headings. The section, Schedule and Exhibit headings herein are for convenience only and shall not affect the construction hereof.23. Permitted Free Writing Prospectuses. The Company represents, warrants and agrees that, unless it obtains the prior consent of the Agent, and theAgent represents, warrants and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the PlacementShares that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required tobe filed with the Commission. Any such free writing prospectus consented to by the Agent or by the Company, as the case may be, is hereinafter referred to as a“Permitted Free Writing Prospectus.” The Company represents and warrants that it has treated and agrees that it will treat each Permitted Free Writing Prospectusas an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rule 433 applicable to31any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping. For the purposes of clarity, theparties hereto agree that all free writing prospectuses, if any, listed in Exhibit 23 hereto are Permitted Free Writing Prospectuses.24. Absence of Fiduciary Relationship. The Company acknowledges and agrees that:a. The Agent is acting solely as agent in connection with the public offering of the Placement Shares and in connection with each transactioncontemplated by this Agreement and the process leading to such transactions, and no fiduciary or advisory relationship between the Company or any of itsrespective affiliates, stockholders (or other equity holders), creditors or employees or any other party, on the one hand, and the Agent, on the other hand, has beenor will be created in respect of any of the transactions contemplated by this Agreement, irrespective of whether or not the Agent has advised or is advising theCompany on other matters, and the Agent has no obligation to the Company with respect to the transactions contemplated by this Agreement except the obligationsexpressly set forth in this Agreement;b. it is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplatedby this Agreement;c. the Agent has not provided any legal, accounting, regulatory or tax advice with respect to the transactions contemplated by this Agreementand it has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;d. it is aware that the Agent and its affiliates are engaged in a broad range of transactions which may involve interests that differ from those ofthe Company and the Agent has no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationshipor otherwise; ande. it waives, to the fullest extent permitted by law, any claims it may have against the Agent for breach of fiduciary duty or alleged breach offiduciary duty in connection with the sale of Placement Shares under this Agreement and agrees that the Agent shall not have any liability (whether direct or indirect,in contract, tort or otherwise) to it in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on its behalf or in right of it or theCompany, employees or creditors of Company, other than in respect of the Agent’s obligations under this Agreement and to keep information provided by theCompany to the Agent and its counsel confidential to the extent not otherwise publicly-available.25. Definitions. As used in this Agreement, the following terms have the respective meanings set forth below:“Applicable Time” means (i) each Representation Date and (ii) the time of each sale of any Placement Shares pursuant to this Agreement.“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Placement Shares that (1) is required tobe filed with the Commission by the Company, (2) is a “road show” that is a “written communication” within the meaning of Rule 433(d)(8)(i) whether or notrequired to be filed with the Commission, or (3) is exempt from filing32pursuant to Rule 433(d)(5)(i) because it contains a description of the Placement Shares or of the offering that does not reflect the final terms, in each case in theform filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under theSecurities Act.“Rule 172,” “Rule 405,” “Rule 415,” “Rule 424,” “Rule 424(b),” “Rule 430B,” and “Rule 433” refer to such rules under the Securities Act.All references in this Agreement to financial statements and schedules and other information that is “contained,” “included” or “stated” in the RegistrationStatement or the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and otherinformation that is incorporated by reference in the Registration Statement or the Prospectus, as the case may be.All references in this Agreement to the Registration Statement, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed toinclude the copy filed with the Commission pursuant to EDGAR; all references in this Agreement to any Issuer Free Writing Prospectus (other than any Issuer FreeWriting Prospectuses that, pursuant to Rule 433, are not required to be filed with the Commission) shall be deemed to include the copy thereof filed with theCommission pursuant to EDGAR; and all references in this Agreement to “supplements” to the Prospectus shall include, without limitation, any supplements,“wrappers” or similar materials prepared in connection with any offering, sale or private placement of any Placement Shares by the Agent outside of the UnitedStates.[Remainder of the page intentionally left blank]33If the foregoing correctly sets forth the understanding between the Company and the Agent, please so indicate in the space provided below for that purpose,whereupon this letter shall constitute a binding agreement between the Company and the Agent. Very truly yours, NORDIC AMERICAN TANKERS LIMITED By:/s/ Herbjom Name: Herbjorn Title: Chairman & CEO ACCEPTED as of the date first-above written: B. RILEY FBR, INC. By:/s/ Patrice McNicoll Name: Patrice McNicoll Title: Co-Head of Investment Banking34SCHEDULE 1FORM OF PLACEMENT NOTICEFrom:Nordic American Tankers LimitedTo:B. Riley FBR, Inc.Attention:[•]Subject:At Market Issuance--Placement NoticeLadies and Gentlemen:Pursuant to the terms and subject to the conditions contained in the At Market Issuance Sales Agreement between Nordic American Tankers Limited, aBermuda limited company (the “Company”), and B. Riley FBR, Inc. (the “Agent”), dated March 29, 2019, the Company hereby requests that the Agent sell up to[] of the Company’s Common Share, par value $0.01 per share, at a minimum market price of $per share, during the time period beginning [month, day, time] andending [month, day, time].35SCHEDULE 2CompensationThe Company shall pay to the Agent in cash, upon each sale of Placement Shares pursuant to this Agreement, an amount equal to 3.0% of the grossproceeds from each sale of Placement Shares.36SCHEDULE 3Notice PartiesThe CompanyHerbjorn HanssonHerbjorn.Hansson@scandicamerican.comBjorn Giaeverbg@scandicamerican.com B. Riley FBRSeth Appelsappel@brileyfbr.comErnie Dahlmanedahlman@brileyfbr.comRyan Loforterloforte@brileyfbr.comPatrice McNicollpmcnicoll@brileyfbr.comKeith Pomplianokpompliano@brileyfbr.comwith a copy to atmdesk@brileyfbr.com37SCHEDULE 6(g)SubsidiariesCompanyJurisdictionNAT BERMUDA HOLDINGS LIMITEDBermudaScandic American Shipping Ltd.BermudaNAT Chartering Ltd.Bermuda38EXHIBIT 7(1)Form of Representation Date Certificate_________________, 20___This Representation Date Certificate (this “Certificate”) is executed and delivered in connection with Section 7(1) of the At Market Issuance SalesAgreement (the “Agreement”), dated [.1, 2019, and entered into between Nordic American Tankers Limited (the “Company”) and B. Riley FBR, Inc. Allcapitalized terms used but not defined herein shall have the meanings given to such terms in the Agreement.The Company hereby certifies as follows:1. As of the date of this Certificate (i) the Registration Statement does not contain any untrue statement of a material fact or omit to state a material factrequired to be stated therein or necessary in order to make the statements therein not misleading and (ii) neither the Registration Statement nor the Prospectuscontain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, inlight of the circumstances under which they were made, not misleading and (iii) no event has occurred as a result of which it is necessary to amend or supplement theProspectus in order to make the statements therein not untrue or misleading for this paragraph 1 to be true.2. Each of the representations and warranties of the Company contained in the Agreement were, when originally made, and are, as of the date of thisCertificate, true and correct in all material respects.3. Except as waived by the Agent in writing, each of the covenants required to be performed by the Company in the Agreement on or prior to the dateof the Agreement, this Representation Date, and each such other date prior to the date hereof as set forth in the Agreement, has been duly, timely and fullyperformed in all material respects and each condition required to be complied with by the Company on or prior to the date of the Agreement, this RepresentationDate, and each such other date prior to the date hereof as set forth in the Agreement has been duly, timely and fully complied with in all material respects.4. Subsequent to the date of the most recent financial statements in the Prospectus, and except as described in the Prospectus, including IncorporatedDocuments, there has been no Material Adverse Effect.5. No stop order suspending the effectiveness of the Registration Statement or of any part thereof has been issued, and no proceedings for that purposehave been instituted or are pending or threatened by any securities or other governmental authority (including, without limitation, the Commission).6. No order suspending the effectiveness of the Registration Statement or the qualification or registration of the Placement Shares under the securities orBlue Sky laws of any39jurisdiction are in effect and no proceeding for such purpose is pending before, or threatened, to the Company’s knowledge or in writing by, any securities or othergovernmental authority (including, without limitation, the Commission).The undersigned has executed this Representation Date Certificate as of the date first written above. [●] By: Name: Title: 40EXHIBIT 23Permitted Issuer Free Writing Prospectuses[None].41Exhibit 8.1 The following is a list of the Company's subsidiaries as of April 15, 2020:NameOrganizationOwnership percentageScandic American Shipping Ltd.Bermuda100%NAT Chartering Ltd.Bermuda100%NAT Bermuda Holdings LimitedBermuda100% Exhibit 12.1CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICERI, Herbjørn Hansson, certify that:1. I have reviewed this annual report on Form 20-F of Nordic American Tankers Limited;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results ofoperations and cash flows of the Company as of, and for, the periods presented in this report;4. The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that materialinformation relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonableassurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosurecontrols and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that hasmaterially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.5. The Company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the auditcommittee of the Company’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect theCompany’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.Date: April 16, 2020/s/ Herbjørn HanssonHerbjørn HanssonChief Executive Officer (Principal Executive Officer)Exhibit 12.2CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICERI, Bjørn Giaever, certify that:1. I have reviewed this annual report on Form 20-F of Nordic American Tankers Limited;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results ofoperations and cash flows of the Company as of, and for, the periods presented in this report;4. The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) and 15d-15(f) for the Company and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that materialinformation relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonableassurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosurecontrols and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that hasmaterially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.5. The Company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the auditcommittee of the Company’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect theCompany’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.Date: April 16, 2020/s/ Bjørn GiaeverBjørn GiaeverChief Financial Officer (Principal Financial Officer)Exhibit 13.1PRINCIPAL EXECUTIVE OFFICER CERTIFICATIONPURSUANT TO 18 U.S.C. SECTION 1350In connection with this Annual Report of Nordic American Tankers Limited (the “Company”) on Form 20-F for the year ended December 31, 2019 as filed with the Securities andExchange Commission (the “SEC”) on or about the date hereof (the “Report”), I, Herbjørn Hansson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350,as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.Date: April 16, 2020/s/ Herbjørn HanssonHerbjørn HanssonChief Executive Officer (Principal Executive Officer)Exhibit 13.2PRINCIPAL FINANCIAL OFFICER CERTIFICATIONPURSUANT TO 18 U.S.C. SECTION 1350In connection with this Annual Report of Nordic American Tankers Limited (the “Company”) on Form 20-F for the year ended December 31, 2019 as filed with the Securities andExchange Commission (the “SEC”) on or about the date hereof (the “Report”), I, Bjørn Giaever, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.Date: April 16, 2020/s/ Bjørn GiaeverBjørn GiaeverChief Financial Officer (Principal Financial Officer)Exhibit 15.1Consent of Independent Registered Public Accounting FirmThe Board of DirectorsNordic American Tankers Limited:We consent to the incorporation by reference in the registration statement (No. 333-228603) on Form F-3 of Nordic American Tankers Limited of our reports dated April 16, 2020, withrespect to the consolidated balance sheets of Nordic American Tankers Limited and subsidiaries as of December 31, 2019 and 2018, and the related consolidated statements ofoperations, comprehensive loss, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes, and the effectivenessof internal control over financial reporting as of December 31, 2019, which reports appear in the December 31, 2019 annual report on Form 20-F of Nordic American Tankers Limited.Our audit report refers to a change to the method of accounting for revenue from contracts with customers in 2018 due to the adoption of ASC Topic 606 — Revenue From ContractsWith Customers/s/ KPMG ASOslo, NorwayApril 16, 2020Exhibit 15.2FEARNRESEARCHMarch 23, 2020Nordic American TankersLOM Building27 Reid StreetHamilton HM1 1BermudaLadies and Gentlemen,Reference is made to the Annual Report on Form 20F for the year ended December 31, 2019 of Nordic American Tankers Limited (the "Company") to befiled with the U.S. Securities and Exchange Commission (the "SEC") (the "Annual Report").We hereby consent to all references to our name in the Annual Report and to the use of the statistical information supplied by us as set forth in the Annual Report,including, without limitation, the information set forth in the Annual Report under the heading "The 2019 Tanker Market". We further advise the Company that ourrole has been limited to the provision of such statistical data supplied by us. With respect to such statistical data, we further advise you that:1.certain information in our database is derived from estimates or subjective judgments, and while we have taken reasonable care in the compilation of thestatistical and graphical information and believe it to be accurate and correct, data compilation is subject to limited audit and validation procedures;and2.the information in the databases of other maritime data collection agencies may differ from the information in our database.We hereby consent to the filing of this letter as an exhibit to the Annual Report to be filed with the SEC pursuant to the Securities Exhange Act of 1934, asamended, and to the references to our firm in the section of the Annual Report entitled "The 2019 Tanker Market".Yours faithfully, /s/ Dag Kilen Dag Kilen Director – Global Head of Research Fearnleys ASFearnleys ASEnterprise Number NO 943 190 410 VATAn Astrup Fearnley company www.fearnleys.noOffice:Grev Wede ls pl. 9N-0151 OsloMailing address:P.O. Box 1158 SentrumN-0107 OsloTelephone: +47 22 93 60 00Telefax: +47 22 93 6110E-mail: fearnresearch@fearnleys.no

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