Exhibit 10.29

RESTRICTED STOCK AGREEMENT

This Restricted Stock Agreement (this “Agreement”) is entered into by and
between Ambassadors International, Inc. (the “Company”) and ORC Investments I,
Inc. (“ORC I”), ORC Holdings, Inc. (“ORC Holdings”) and C.G. Grefenstette, E.C.
Johnson and Bruce I. Crocker, Trustees Under a Trust Dated August 28, 1968 for
Henry L. Hillman, Jr. (the “Trust”) (together, the “Holders”) as of December 27,
2005.

RECITALS

WHEREAS, ORC Holdings, ORC I and the Trust are directly the owners of 48.8%,
27.8% and 23.4%, respectively, of the Class C membership interests of Oregon
Rail Holdings, LLC, an Oregon limited liability company (“ORH”) (the foregoing
percentages, with respect to each Holder, are hereinafter referred to as such
Holder’s “Percentage Interest”);

WHEREAS, ORH, the Company and Ambassadors Cruise Group, LLC, a Delaware limited
liability company (“ACG”) are parties to that certain Membership Interest
Purchase Agreement, dated as of December 27, 2005 (the “Purchase Agreement”);
and

WHEREAS, in order to facilitate the closing of the transactions contemplated by
the Purchase Agreement, the Holders have agreed to contribute Four Million Six
Hundred Seventy Two Thousand Five Hundred Seventy Four Dollars ($4,672,574),
plus the product of One Thousand Six Hundred Forty Four Dollars and Eight Cents
($1,644.08) multiplied by the number of days from and including January 1, 2006
to and including the Purchase Closing date, towards the KeyBank Settlement, as
defined in the Purchase Agreement, in return for the issuance to the Holders of
an aggregate of 250,000 shares of the Company’s common stock, par value $0.01
per share (the “Restricted Shares”), restricted as provided for in this
Agreement.

ARTICLE I

GRANT OF RESTRICTED STOCK

1.1 Issuance of Restricted Stock. The Company hereby agrees to issue to the
Holders each Holder’s Percentage Interest (rounded to the nearest whole share)
of the Restricted Shares, concurrently with the Closing under the Purchase
Agreement (the “Purchase Closing”), upon the terms and conditions set forth in
this Agreement.

1.2 Contribution. At or prior to the Purchase Closing, the Holders shall deliver
to ACG, in immediately available funds, Four Million Six Hundred Seventy Two
Thousand Five Hundred Seventy Four Dollars ($4,672,574), plus the product of One
Thousand Six Hundred Forty Four Dollars and Eight Cents ($1,644.08) multiplied
by the number of days from and including January 1, 2006 to and including the
Purchase Closing date (the “Contribution”). Each Holder shall pay its Percentage
Interest of the Contribution, which shall be the several obligation such Holder.
The Company will use the Contribution, in addition to such funds as described in
Section 2.2(b) of the Purchase Agreement, toward satisfaction of the KeyBank
Settlement (as defined in the Purchase Agreement).

 

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1.3 Conditions to Issuance of Stock Certificates. The Restricted Shares, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have been reacquired by the Company. Such Restricted Shares
shall be fully paid and nonassessable. The Company shall not be required to
issue or deliver any Restricted Shares prior to fulfillment of all of the
following conditions:

(a) The Purchase Closing;

(b) The obtaining of any approval or other clearance from any state or federal
governmental agency which the Company shall, in its absolute discretion,
determine to be necessary or advisable; and

(c) The receipt by ACG of the Contribution.

1.4 Rights as Stockholders. Except as otherwise provided herein, until the
release of the Forfeiture Restriction under Section 4.1 below, the Holders shall
not have any of the rights of stockholders with respect to said Restricted
Shares, including the right to vote the Restricted Shares and to receive
dividends and distributions paid or made with respect to the Restricted Shares.

1.5 Shares Freely Tradeable. On or prior to the Determination Date under
Section 4.1 below, the Company shall prepare and file with the Securities and
Exchange Commission (the “SEC”) a registration statement on Form S-3 (a
“Registration Statement”) registering the resale of the Restricted Stock,
provided that the Company is eligible to use a Registration Statement on Form
S-3 at such time. The Company shall use its reasonable best efforts to meet the
qualifications for use on Form S-3 and to have the Registration Statement
declared effective under the Securities Act of 1933, as amended (the “Securities
Act”) as promptly as practicable after such filing. The Company shall also take
any reasonable action (other than qualifying to do business in any jurisdiction
in which it is not now so qualified or to file a general consent to service of
process) required to be taken under any applicable state securities laws in
connection with the resale of the Restricted Stock, and the Holders shall
furnish all information concerning the Holders as may be reasonably requested in
connection with any such action. The Company will advise the Holders, promptly
after it receives notice thereof, of the time when the Registration Statement
has been declared effective by the SEC or any supplement or amendment has been
filed, the issuance of any stop order, the suspension of the qualification of
the Restricted Stock registered thereon, or any request by the SEC for amendment
of the Registration Statement or comments thereon and responses thereto or
requests by the SEC for additional information. The Company shall furnish the
Holders with a copy of the prospectus contained in the Registration Statement,
as declared effective by the SEC. All registration expenses incurred by the
Company in connection with the registration of the shares of Restricted Stock
shall be borne equally by the Company and the Holders. Subject to customary
black-out periods, in which case the Company shall provide notice of such
black-out periods to the Holders, at which time the Holders shall not sell
Restricted Stock registered pursuant to the Registration Statement, the Company
agrees to use commercially reasonable efforts to keep current and effective the
Registration Statement until such time as it may be withdrawn pursuant to the
last sentence of this Section 1.5. Upon the expiration of a black-out period,
the Company shall provide notice to the Holders, at which time the Holders may
dispose of shares of Restricted Stock. Notwithstanding the forgoing, the Company
shall not be obligated to file a Registration Statement if, and shall be
entitled to withdraw a Registration Statement when, the shares of Restricted
Stock have been sold by the Holders or may be sold by the Holders under
Rule 144(k) under the Securities Act.

 

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ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE HOLDERS

The Holders represent and warrant to the Company and ACG that the statements
contained in this Article II are correct and complete as of the date of this
Agreement and will be correct and complete as of the Purchase Closing date (as
though made then and as though the Purchase Closing date were substituted for
the date of this Agreement throughout this Article II).

2.1 Organization. The Holders are duly organized, validly existing, and in good
standing under the laws of the jurisdiction of their organization.

2.2 Authorization of Transaction. The Holders have full power and authority to
execute and deliver this Agreement and to perform their obligations hereunder.
The execution of this Agreement by the Holders and the delivery and performance
by the Holders of this Agreement has been duly authorized. Any and all acts and
other proceedings required for the due and valid authorization, execution,
delivery and performance by the Holders of this Agreement have been validly and
appropriately taken. This Agreement constitutes the valid and legally binding
obligation of the Holders, enforceable in accordance with its terms and
conditions. The Holders need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
authority in order to consummate the transactions contemplated by this
Agreement.

2.3 Noncontravention. Neither the execution and the delivery of this Agreement,
the consummation of the transactions contemplated hereby, nor the performance by
the Holders of their obligations under this Agreement, will violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental authority,
or court to which the Holders are subject.

2.4 Investor Representations.

(a) The Holders confirm that they have been given sufficient access to
information regarding the Company and in connection with its receipt of the
Restricted Shares under this Agreement, including the opportunity to ask
questions of, and receive answers from, persons acting on behalf of the Company
and concerning the Company’s financial affairs, prospects and condition.

(b) The Holders represent and warrant that (i) they are resident in or otherwise
subject to the securities legislation of the United States, and the issuance of
the Restricted Shares to the Holders under this Agreement shall occur only in
the United States; (ii) the Holders, by reason of their business or financial
expertise, have the capacity to protect their own interests in connection with
its acquisition of the Restricted Shares; and (iii) the Holders are “accredited
investors” as defined in Rule 501 of Regulation D of the Securities Act.

(c) The Holders represent, warrant and covenant that they shall acquire the
Restricted Shares issuable under this Agreement for their own account and not
for the account or on behalf of others, and they are doing so with the intent of
retaining such Restricted Shares as an investment and without the current intent
to redistribute (other than distributions to the Holders’ stockholders as of the
Purchase Closing) such Restricted Shares.

(d) The Holders acknowledge that: (i) no securities commission or similar
authority has reviewed or passed on the merits of the Restricted Shares issuable
under this Agreement; (ii) there is no government or other insurance covering
such Restricted Shares; and (iii) there are risks associated with the
acquisition of the Restricted Shares, including without limitation those
described in the Company’s filings with the Securities and Exchange Commission.

 

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(e) The Holders acknowledge that (i) they must and shall bear the economic risk
of holding the Restricted Shares issuable under this Agreement, which may be for
an indefinite period of time, because at the time such Restricted Shares are
issued they will not have been registered under the Securities Act or any other
securities law and, therefore, cannot be sold unless they are subsequently
registered under applicable federal and state securities laws or an exemption
from such registration is available; (ii) the Restricted Shares may not be
resold or transferred on the official stock transfer records of the Company
without furnishing to the Company an opinion of counsel reasonably acceptable to
the Company that such sale or transfer of the Restricted Shares will not violate
the registration provisions of applicable federal and state securities laws; and
(iii) certificates representing the Restricted Shares shall have endorsed on
them a restrictive legend to this effect.

(f) The Holders acknowledge that the Company is relying on the representations,
warranties, covenants and acknowledgments in this Section 2.4 to ensure that any
Restricted Shares issued under the terms of this Agreement can be issued in
reliance on exemptions from registration requirements under United States
federal and state securities laws.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Holders that the statements contained
in this Article III are correct and complete as of the date of this Agreement
and will be correct and complete as of the Purchase Closing date (as though made
then and as though the Purchase Closing date were substituted for the date of
this Agreement throughout this Article III).

3.1 Organization. The Company is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware. The Company is
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of its properties owned or leased or the
nature of its activities make such qualification necessary.

3.2 Authorization of Transaction. The Company has full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder. The
execution of this Agreement by the Company and the delivery and performance by
the Company of this Agreement has been duly authorized. Any and all acts and
other proceedings required for the due and valid authorization, execution,
delivery and performance by the Company of this Agreement have been validly and
appropriately taken. This Agreement constitutes the valid and legally binding
obligation of the Company, enforceable in accordance with its terms and
conditions. The Company need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
authority in order to consummate the transactions contemplated by this
Agreement.

3.3 Noncontravention. Neither the execution and the delivery of this Agreement,
the consummation of the transactions contemplated hereby, nor the performance by
the Company of its obligations under this Agreement, will violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental authority,
or court to which the Company is subject.

3.4 Valid Issuance. The Restricted Shares will be, upon issuance, duly
authorized, validly issued, fully paid, nonassessable, and free of and not
issued in violation of preemptive rights.

 

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ARTICLE IV

RESTRICTIONS ON SHARES

4.1 Forfeiture Restriction. If, as determined on the Determination Date (as
defined below), the Net Revenue (as defined below) generated by American West
Steamboat Company, LLC (“AWSC”) has not exceeded Forty Three Million Dollars
($43,000,000) in any one of the calendar years 2006 through 2009 (the “Vesting
Condition”), the Holders’ interests in the Restricted Shares shall be forfeited
and the Restricted Shares shall revert to the Company’s ownership (the
“Forfeiture Restriction”). The “Determination Date” shall be January 10, 2010 if
the Vesting Condition has been met in any one of the calendar years 2006 through
2008, and otherwise shall be the tenth business day following delivery of the
audit report of the Company’s financial statements for the year ended
December 31, 2009. Upon such forfeiture, the Company shall become the legal and
beneficial owner of the Restricted Shares being forfeited and all rights and
interests therein or relating thereto, and the Company shall have the right to
retain and transfer to its own name the number of Restricted Shares being
forfeited by the Holders. “Net Revenue” means gross revenue, less all discounts
reasonably determined and applied by the Buyer, including, but not limited to
early booking discounts and group discounts, credit card fees, commissions and
other allowances. The Company agrees not to, and agrees to cause AWSC not to,
undertake any action with the intent of reducing or avoiding Net Revenue solely
for the purpose of avoiding the satisfaction of the Vesting Condition.

4.2 Release of Restricted Shares from Forfeiture Restriction. If the Vesting
Condition is satisfied as of the Determination Date, the Restricted Shares shall
be released from the Forfeiture Restriction and the restrictions on transfer
under Section 4.3 below as of the Determination Date.

4.3 Restrictions on Transfer.

(a) No Restricted Shares or any interest or right therein or part thereof shall
be liable for the debts, contracts or engagements of the Holders or their
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law, by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect.

(b) The Company shall furnish to the Holders a written report of the Net Revenue
of AWSC for such year (each, a “Net Revenue Report”) within ten (10) business
days after the delivery of the audit report of the Company’s annual financial
statements for each of the years ended December 31, 2006, 2007, 2008 and 2009;
provided, that no Net Revenue Report need be furnished for any year after the
first year for which the Vesting Condition is satisfied. The Holders, at the
Holders’ own expense, shall have the right, no earlier than ten (10) days from
prior written notice, during regular business hours, to meet with
representatives of the Company and the Company’s independent auditor to inspect
and discuss the books and accounts of AWSC. After this inspection, if the
Holders disagree with the Net Revenue Report, with reasonable justification for
such disagreement, the Holders, at the Holders’ own expense, shall have the
right, upon reasonable prior notice during regular business hours, to appoint
independent auditors reasonably acceptable to the Company and have them, during
normal business hours, inspect the books and accounts of AWSC for the purpose of
performing an audit of the Net Revenue of AWSC for the year covered by such Net
Revenue Report. The Company shall use commercially reasonable efforts to
cooperate with such auditors. The auditors performing the audit shall disclose
to the Holders only information relating to the accuracy of the Net Revenue
reported in the Net Revenue Report and shall be under a duty to keep
confidential any other information obtained from such records. In no event shall
the Holders perform more than one such independent audit with respect to any
given Net Revenue Report. If any such audit establishes that the Vesting
Condition has been satisfied, such determination shall be binding on the Company
and the Company shall reimburse the Holders for the Holders’ out-of-pocket
expense of such audit.

 

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ARTICLE V

COMPANY POSSESSION OF RESTRICTED SHARES

5.1 Company to Hold Restricted Shares. To insure the availability for delivery
of the Holders’ Restricted Shares upon Forfeiture pursuant to the Forfeiture
Restriction under Section 4.1 above, the Holders, upon execution of this
Agreement, hereby deliver and deposit with the Company any share certificates
representing the Restricted Shares, together with the stock assignment duly
endorsed in blank, attached hereto as Exhibit A. Upon release of the Restricted
Shares, the Company shall deliver to the Holders the certificate or certificates
representing such Restricted Shares in the Company’s possession belonging to the
Holders; provided, however, that the Company shall nevertheless retain such
certificate or certificates if so required pursuant to other restrictions
imposed pursuant to this Agreement. If the Restricted Shares are held in book
entry form, then such entry will reflect that the Restricted Shares are subject
to the restrictions of this Agreement.

5.2 Transfer of Forfeited Shares. The Holders hereby authorize and direct the
Secretary of the Company, or such other person designated by the Company, to
transfer any Restricted Shares forfeited pursuant to the Forfeiture Restriction
from the Holders to the Company.

ARTICLE VI

OTHER PROVISIONS

6.1 Adjustment for Stock Split; Change of Control. In the event of any stock
dividend, stock split, reverse stock split, recapitalization, combination,
reclassification, or similar change in the capital structure of the Company, the
Company shall make appropriate and equitable adjustments in the Restricted
Shares subject to the Forfeiture Restriction and the number of Restricted
Shares. The provisions of this Agreement shall be appropriately adjusted for any
stock dividends, splits, reverse splits, combinations, recapitalizations and the
like occurring after the date hereof. In the event of any merger, consolidation,
change of control, share exchange or reorganization affecting the Restricted
Shares, any new, substituted or additional securities or other property
(including money paid other than as a regular cash dividend) that is by reason
of any such transaction received with respect to, in exchange for or in
substitution of the Restricted Shares shall also be subject to the Forfeiture
Restriction in Section 4.1 below and the restrictions on transfer in Section 4.3
below until such restrictions on the underlying Restricted Shares lapse or are
removed pursuant to this Agreement (or, if such Restricted Shares are no longer
outstanding, until such time as such Restricted Shares would have been released
from the Forfeiture Restriction pursuant to this Agreement).

6.2 Restrictive Legends and Stop-Transfer Orders.

(a) Any share certificate(s) evidencing the Restricted Shares issued hereunder
shall be endorsed with the following legend and any other legend required by any
applicable federal and state securities laws:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A FORFEITURE
RESTRICTION AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A
RESTRICTED STOCK AWARD AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY
OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

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(b) The Holders agree that, in order to ensure compliance with the restrictions
referred to herein, the Company may issue appropriate “stop transfer”
instructions to its transfer agent, if any, and that, if the Company transfers
its own securities, it may make appropriate notations to the same effect in its
own records.

(c) The Company shall not be required: (i) to transfer on its books any
Restricted Shares that have been sold or otherwise transferred in violation of
any of the provisions of this Agreement, or (ii) to treat as owner of such
Restricted Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Restricted Shares shall have been so
transferred.

6.3 Listing. On or prior to the date of the release of the Forfeiture
Restriction under Section 4.1 above, the Company shall use its commercially
reasonable best efforts to cause the Restricted Stock to be listed on the
National Association of Securities Dealers Automated Quotation National Market
(“NASDAQ”) and to obtain all governmental approvals necessary for such listing.

6.4 Notices. Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of the Secretary of the
Company, and any notice to be given to the Holders shall be addressed to the
Holders at the address given beneath the Holders’ signatures on the signature
page hereof. By a notice given pursuant to this Section 6.4, any party hereto
may hereafter designate a different address for notices to be given to that
party. Any notice shall be deemed duly given when sent via email or when sent by
certified mail (return receipt requested) and deposited (with postage prepaid)
in a post office or branch post office regularly maintained by the United States
Postal Service.

6.5 Titles. Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.

6.6 Governing Law; Severability. This Agreement shall be administered,
interpreted and enforced under the laws of the State of Delaware without regard
to conflicts of laws thereof. Should any provision of this Agreement be
determined by a court of law to be illegal or unenforceable, the other
provisions shall nevertheless remain effective and shall remain enforceable.

6.7 Conformity to Securities Laws. The Holders acknowledge that the Purchase
Agreement and this Agreement are intended to conform to the extent necessary
with all provisions of the Securities Act and the Securities Exchange Act of
1934, as amended, and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder, and state securities laws and
regulations. Notwithstanding anything herein to the contrary, the Purchase
Agreement and this Agreement shall be administered, and the Restricted Shares
are to be issued, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Purchase Agreement
and this Agreement shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.

6.8 Amendments. This Agreement may not be modified, amended or terminated except
by an instrument in writing, signed by the Holders and by a duly authorized
representative of the Company.

 

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6.9 Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
the Holders and their heirs, executors, administrators, successors and assigns.

[SIGNATURE PAGE TO FOLLOW]

 

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SIGNATURES

 

AMBASSADORS INTERNATIONAL, INC. By:  

/s/ Joseph J. Ueberroth

Name:   Joseph J. Ueberroth Title:   President and Chief Executive Officer
Address:           1071 Camelback Street           Newport Beach, CA 92660 ORC
INVESTMENTS I, INC. By:  

/s/ Andrew H. McQuarrie

Name:   Andrew H. McQuarrie Title:   President Address:           824 Market
Street, Suite 900           Wilmington, DE 19801 ORC HOLDINGS, INC. By:  

/s/ Russell W. Ayres, III

Name:   Russell W. Ayres, III Title:   President Address:           330 Grant
Street, Suite 1900           Pittsburgh, PA 15219 C.G. GREFENSTETTE, E.C.
JOHNSON AND BRUCE I. COCKER, TRUSTEES UNDER A TRUST DATED AUGUST 28, 1968 FOR
HENRY L. HILLMAN, JR. By:  

/s/ C.G. Grefenstette

Name:   C.G. Grefenstette Title:   Trustee Address:           330 Grant Street,
Suite 1900           Pittsburgh, PA 15219

 

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By:  

/s/ Bruce I. Crocker

Name:   Bruce I. Crocker Title:   Trustee Address:           330 Grant Street,
Suite 1900           Pittsburgh, PA 15219

 

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EXHIBIT A

STOCK ASSIGNMENT

FOR VALUE RECEIVED, the undersigned,                                 , hereby
assigns and transfers unto AMBASSADORS INTERNATIONAL, INC., a Delaware
corporation,                                  shares of the Common Stock of
AMBASSADORS INTERNATIONAL, INC., a Delaware corporation, standing in its name of
the books of said corporation represented by Certificate No.             
herewith and does hereby irrevocably constitute and appoint Joseph J. Ueberroth
to transfer the said stock on the books of the within named corporation with
full power of substitution in the premises.

This Stock Assignment may be used only in accordance with the Restricted Stock
Agreement between AMBASSADORS INTERNATIONAL, INC. and the undersigned dated
December 27, 2005.

Dated:                     ,             

 

By:

 

 

Name:

 

Title:

 

INSTRUCTIONS: Please do not fill in the blanks other than the signature line.
The purpose of this assignment is to facilitate exercise of the “Forfeiture
Restriction,” as set forth in the Restricted Stock Agreement, without requiring
additional signatures on the part of the Holders.