Document:

Exhibit 10.3

 

ORIENT-EXPRESS HOTELS LTD.

 

2007 PERFORMANCE SHARE
PLAN

 

(As
adopted by the Board of Directors on May 7, 2007 and approved by
shareholders on June 15, 2007, and amended by the Board of Directors on January 20,
2009)

 

1.                 2007 Performance Share Plan (the “Plan”)

 

Orient-Express Hotels Ltd. (the “Company”) may
grant, in the manner and upon the terms and conditions set forth in this Plan,
rights to purchase (“Awards”) not in excess of an aggregate of 500,000 Class A
common shares of the Company (adjusted, if necessary, in accordance with Section 10)
to eligible directors, officers and employees of the Company and its
subsidiaries (as determined in accordance with Section 3). Shares subject
to Awards may be either authorized but unissued shares or acquired shares.

 

2.                 Administration of the Plan

 

(a)    The Plan shall be administered, and Awards
hereunder shall be granted, by the Board of Directors of the Company (the “Board”)
or, at the discretion of the Board, the Compensation Committee (the “Committee”)
thereof. In the event the Committee is the administrator in respect of any
Awards, references in the Plan to the Board, other than in paragraph (c) below
and Sections 5(a), 9, 11 and 12, shall be deemed to be references to the
Committee with respect to such Awards. Any decision of the Board shall be final
and conclusive in all matters relating to the Plan. The Board may act only by a
majority of its members in office, except that the members may authorize any
one or more of their number or the Secretary of the Company to execute and
deliver documents on their behalf. No member of the Board shall be liable for
anything done or omitted to be done by him or by any other member in connection
with the Plan, except for his own willful misconduct or as expressly provided
by statute.

 

(b)    The Board may make or vary regulations for
the administration and operation of the Plan not inconsistent with the
provisions hereof and may establish terms, conditions, including Company
performance goals to be attained as a condition to the vesting of Awards (“Performance
Criteria”), if any, and restrictions applicable to such Awards, which may
differ with respect to each grantee. The authority of the Board shall include,
but shall not be limited to, the authority to determine the extent to which any
Performance Criteria have been satisfied, to determine whether, to what extent
and under what circumstances an Award may be settled, canceled, forfeited or
accelerated, to make adjustments in the terms and conditions of any Award in accordance
with the Plan, to construe or interpret the Plan and Awards and determine
grantees’ rights thereunder.

 

(c)    For purposes of making Awards, the Committee
shall be comprised solely of directors who are “independent directors” pursuant
to New York Stock Exchange requirements.

 

3.                 To Whom Awards May Be Granted

 

(a)    Awards may be granted to those directors,
officers and employees of the Company or any subsidiary thereof who, in the
opinion of the Board, have contributed significantly to the growth and progress
of the Company or any subsidiary or to persons who, in the opinion of the
Board, hold promise of contributing to the growth and progress of the Company
or any 

 

 

subsidiary and
who can be attracted to directorship, officership or employment through the
grant of Awards under the Plan. The Board is hereby given the authority to
determine which of the eligible directors, officers and employees are to be
granted Awards and the number of shares underlying each such Award.

 

(b)    The term “subsidiary” means any corporation
in an unbroken chain of corporations beginning with the Company, each of which
owns at the time any Award is granted (except in the case of the last such
corporation in the chain) shares possessing 50 percent or more of the total
combined voting power of all classes of shares in one of the other corporations
in such chain.

 

(c)    The terms and conditions of an Award shall
be set forth in a written Award notice provided to the grantee, which shall
indicate the date of the grant of the Award, the number of shares to which the
Award relates, the Purchase Price of such shares, and any Performance Criteria
upon which the vesting of such Award may be conditioned.

 

4.                 Purchase Price of Shares

 

The
price that must be paid by a grantee to obtain shares pursuant to the Award
shall be $.01 per share (the “Purchase Price”), representing the par value of
each share.

 

5.                 Circumstances Under Which Awards May Be
Granted

 

(a)    Awards may be granted at any time and from
time to time on or after the date on which the Plan is adopted by the Board and
before the expiration of ten years therefrom. If prior to the expiration of ten
years from the date on which the Plan is adopted, an Award or any portion of an
Award expires or otherwise lapses without shares having been distributed, the
shares underlying such Award shall thereupon become available for making Awards
to other eligible directors, officers and employees.

 

(b)    Awards shall be granted at such times as
determined by the Board.

 

(c)    The maximum number of shares subject to all
Awards under the Plan shall be the number of shares in Section 1. The
maximum number of shares that may be subject to any Award to any individual
shall be within the discretion of the Board, subject to the number of shares
remaining under the Plan that have not been the subject of Awards at the time
of the grant of such Award.

 

6.                 Awards Not Assignable

 

Every
Award under the Plan shall provide that neither the Award nor any rights under
the Award shall be transferable by the grantee, other than by will or the laws
of descent and distribution, and that it is exercisable, during his lifetime,
only by the grantee.

 

7.                 Manner of Payment of Awards

 

(a)    As soon as practicable after an Award vests
in accordance with Section 8, and in any event not later than the 15th day of the third month of the calendar year
following the calendar year in which the Award vests, the Company shall (i) cause
a certificate or certificates for the number of shares in respect of which the
Award vests to be registered in the name of the grantee, in such denominations
as the grantee may direct, and shall deliver such certificate or certificates
to or upon the order of the grantee, and (ii) pay the grantee an amount in
cash equal to the value of the dividends, if any, and without interest, that
would have been paid on the acquired shares in respect of dividend record dates
occurring during the period between the date of the Award and the date of
vesting of such Award, unless otherwise determined by the Board (the “Dividend
Equivalent”); provided, however, that no payments shall be made 

 

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under this Section 7(a) unless
the grantee shall have paid the Company, in the manner determined by the Board,
the full Purchase Price for all shares to be acquired by the grantee.

 

(b)    To the extent permitted under applicable
law, the Board, in its sole discretion, may pay the grantee a cash amount in
lieu of the delivery of shares and payment of cash in paragraph (a), and in
full satisfaction thereof, equal to the total of (i) the Dividend
Equivalent (as defined in paragraph (a) above), and (ii) the fair
market value of the aggregate number of shares in respect of which the Award
vests, less the Purchase Price of same, such payment to be made not later than
the payment date in paragraph (a) above. For these purposes, the “fair
market value” of each share shall be determined based on the closing price of a
share on the New York Stock Exchange (or any other national securities exchange
in the United States of America on which the Company’s Class A common
shares are then listed) on the date the Award vests.

 

(c)    The grantee shall be entitled, from the date
shares are registered in his or her name, to all the rights of a shareholder as
to such shares, including the right to vote the shares and to receive and
retain all dividends paid thereon.

 

(d)    Notwithstanding paragraph (a) above,
unless otherwise provided in a grantee’s Award, in the event that any shares or
cash to be paid to the grantee in connection with a change in the ownership or
effective control of the Company or the ownership of a substantial portion of
the assets of the Company, as described in Section 280G of the U.S.
Internal Revenue Code of 1986, as amended (the “Code”), pursuant to the Plan,
any Award, or otherwise (including, without limitation, the acceleration of any
payment, award, distribution or benefit) (the “Payment”) constitutes an “excess
parachute payment” within the meaning of Section 280G of the Code, the
grantee shall be paid an additional amount (the “Gross-Up Payment”) such that
the net amount retained by the grantee after deduction of (i) any excise
tax imposed under Section 4999 of the Code and (ii) any federal,
state and local income and employment tax and excise tax imposed upon the
Gross-Up Payment shall be equal to the Payment. For purposes of determining the
amount of the Gross-Up Payment, the grantee shall be deemed to pay (I) federal
income tax and employment taxes at the highest marginal rate of federal income
and employment taxation in the calendar year in which the Gross-Up Payment is
to be made and (II) state and local income taxes at the highest marginal
rate of taxation in the state and locality of the grantee’s residence in the
calendar year in which the Gross-Up Payment is to be made, net of the maximum
reduction in federal income taxes that may be obtained from the deduction of
such state and local taxes.  The
grantee shall provide the Company with the information necessary to compute the
Gross-Up Payment, and the Company shall pay the grantee the Gross-Up Payment
not later than the last day of the calendar year next following the calendar
year in which the grantee pays the taxes referred to in clauses (i) and (ii) of
the preceding sentence.

 

(e)    Notwithstanding any provision of the Plan to
the contrary, no payment shall be made in respect of any transaction involving
an Award unless and until the grantee pays, in the manner determined by the
Board, all applicable tax withholdings due in connection with such transaction
and which the grantee’s employer is required to withhold.

 

(f)     In the event that any payment is made under
this Section 7 following the grantee’s death, the Plan shall pay the
grantee’s estate or any person who acquired the Award by bequest or inheritance
or by reason of the death of the grantee, subject to the provisions of Section 8,
at the time, in the manner and subject to the conditions set forth in this Section 7
as if such person were the grantee; provided, however, that such person shall
have furnished the Board with evidence satisfactory to the Board of such person’s
right to the Award.

 

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8.                 Circumstances Under Which Awards Shall and
Shall Not Vest

 

(a)   Vesting. Every
Award under the Plan shall provide that:

 

(i)     it shall not vest until the shares reserved
for issuance under such Award have been listed upon any national securities
exchange in the United States of America on which the Company’s Class A
common shares are then listed;

 

(ii)    it shall not vest until the expiration of a
period of at least one year from the date the Award was granted, except as
provided in (iii) and (iv) below;

 

(iii)   it shall not vest if the grantee is not a
director, officer or employee of the Company or a subsidiary thereof on the
date the Award would otherwise vest; provided, however, that a grantee ceasing
to be a director, officer or employee of the Company or a subsidiary thereof on
account of

 

(I)        retirement at or after the normal
retirement date in any applicable pension plan of the Company in which the
grantee participates,

 

(II)       injury or disability as determined under
any disability insurance policy or plan of the Company in which the grantee
participates,

 

(III)      dismissal for redundancy,

 

(IV)      death, or

 

(V)       on concurrence of the Board (which
concurrence may be granted or withheld in its sole discretion), the sale or
other disposition of the subsidiary for which the person acts as director or
officer or which employs the employee or the operating division of the Company
or a subsidiary for which the employee performs his employment,

 

shall, subject to (vi) below, vest
in his or her Award as of the date of the event in (I) - (V), as
determined by the Board;

 

(iv)   in the event of a Change in Control (as
defined in Section 9), subject to (vi) below, the Award shall vest on
the date of the relevant event, as determined by the Board;

 

(v)    it shall not vest unless the Board shall be
satisfied that the issuance of shares in connection with that Award will be in
compliance with all relevant rules and regulations of the United States
Securities and Exchange Commission; and

 

(vi)   it shall not vest unless and until the Board
certifies that any Performance Criteria upon which the vesting of that Award is
conditioned have been satisfied.

 

(b)   Performance Criteria.
The Board may establish Performance Criteria which must be satisfied as a
condition for any Award to vest. Such Performance Criteria shall be set forth
in the notice of Award and shall be based on objective performance goals over
the performance period determined by the Board. Such goals may be based on one
or more business criteria that apply to the grantee, a business unit of the
Company, or the Company as a whole, including, but not limited to, share price,
market share, sales, earning per share, earnings before tax, return on equity,
total shareholder return, or costs. The Board may also provide for pro-rata
satisfaction of Performance Criteria in the event of (i) a grantee’s
termination of employment before the expiration of a performance period on
account of the events in paragraph (a)(iii)(I)-(V) above, or (ii) a
Change in Control (as defined in Section 9), in either case before the
expiration of the relevant performance period.

 

4

 

The
Performance Criteria shall be determined in accordance with generally accepted
accounting principles, if applicable, and shall be subject to certification by
the Board, provided, that the Board shall have the authority to make equitable
adjustments to the Performance Criteria (i) in recognition of unusual or
non-recurring events affecting the Company or its subsidiaries or the financial
statements of the Company or any subsidiary, (ii) in response to changes
in applicable laws or regulations, (iii) to account for items of gain,
loss or expense determined to be extraordinary or unusual in nature or
infrequent in occurrence, or related to the disposal of a segment of a
business, or (iv) related to a change in accounting principles.

 

The
failure to satisfy the Performance Criteria within the performance period over
which such Performance Criteria is measured shall cause the Awards subject to
such Performance Criteria to lapse and become void to the extent that the
Performance Criteria have not been met as of the last day of such performance
period.

 

9.                 Change in Control

 

For
purposes of the Plan, “Change in Control” means any of the following events:

 

(a)    any “person” (as that term is defined for
the purposes of Section 13(d) or 14(d) of the U.S. Securities
Exchange Act of 1934), other than any subsidiary of the Company, shall directly
or indirectly acquire more than 40% of the voting shares of the Company then
outstanding and then entitled to vote generally in the election of directors of
the Company; or

 

(b)    individuals who, on the date of adoption of
the Plan, constitute the Company’s Board (or the successors of such individuals
nominated by such Board or a committee thereof on which such individuals or
their successors constitute a majority) shall cease to constitute a majority of
the Company’s Board; or

 

(c)    the Company amalgamates, merges or
consolidates with or into any other corporation, other than a corporation which
directly, or indirectly through one or more intermediaries, is controlled by
any subsidiary of the Company, without the approval of the Company’s Board
constituted as provided in clause (b) above; or

 

(d)    the Company sells, leases, exchanges or
otherwise disposes of all or substantially all of its assets and business
without the approval of the Company’s Board constituted as provided in clause (b) above.

 

The
obligations of the Company under the Plan shall be binding upon any successor
company, corporation or other organization resulting from any amalgamation,
merger, consolidation or other reorganization of the Company, or upon any
successor company, corporation or organization succeeding to all or
substantially all of the assets and business of the Company, in any such case
which would constitute a Change in Control. The Company agrees that it will
make appropriate provisions for the preservation of all grantees’ rights under
the Plan in any agreement or plan that it may enter into or adopt to effect any
such amalgamation, merger, consolidation, reorganization or transfer of assets
constituting a Change in Control.

 

10.          Adjustment of Number or Kind of Shares

 

If
the Company shall effect one or more share splits, share dividends,
combinations of shares, exchanges of shares, repurchases, recapitalizations or
similar capital adjustments, the Board shall appropriately adjust the aggregate
number of shares with respect to which Awards have been made or may be made
under the Plan in order to prevent dilution or enlargement of the rights of
grantees under Awards. Every Award under the Plan shall 

 

5

 

provide
that, in the event of any such capital adjustments, the number and kind of
shares to which it applies shall be appropriately adjusted.

 

11.          Amendment

 

The
Plan may be amended from time to time by the Board. No amendment shall alter or
impair any of the rights or obligations of any person, without his consent,
under any Award theretofore granted under the Plan.

 

12.          Termination

 

The
Plan shall terminate upon the first of the following dates or events to occur:

 

(a)    if the Company is a participant in any
corporate amalgamation, merger, consolidation or other transaction and no
provision is made at the time of the transaction to continue the Plan, except
as provided in Section 9;

 

(b)    resolution of the Board terminating the
Plan; or

 

(c)    on May 7, 2017.

 

In
the event of termination of the Plan in any of the ways provided hereinabove,
the provisions of the Plan shall continue in full force and effect as regards
any Awards prior to such termination.

 

13.          Effect of Awards Upon Employment

 

Nothing
in the Plan shall be construed as giving any person acting as a director or
officer of or employed by the Company or any subsidiary thereof the right to be
retained in such directorship, officership or employment. The Company and any
subsidiary thereof and the shareholders shall have the right to dismiss any
director, officer or employee at any time with or without cause and without
liability for the effect which such dismissal might have upon him as a
participant under the Plan, and under no circumstances shall a person ceasing
to be a director, officer or employee by reason of dismissal or otherwise be
entitled to or claim against the Company or any subsidiary thereof any
compensation for or in respect of any consequent reduction or loss of his
rights or benefits (actual or prospective) under any Award held by him or her
in connection with the Plan.

 

Any
determination by the Board that the grantee is eligible for vesting under Section 7(a)(iii)(II) is
conditioned upon the grantee’s consent to the use of his or her personal
information, including medical records, for the purpose of making the necessary
determination as to the grantee’s injured or disabled condition.

 

14.          No Funding

 

Nothing
contained in the Plan or any Award shall require the Company or any subsidiary
thereof to set aside any funds or shares for delivery hereunder. No grantee of
any Award or any other person obtaining the Award upon the grantee’s death
shall have any rights under the Plan that are greater than those of a general
creditor of the Company.

 

15.          Construction

 

In
all respects the Plan shall be governed by, and be construed in accordance
with, the laws of the Islands of Bermuda.

 

6Exhibit 10.4

 

ORIENT-EXPRESS
HOTELS LTD.

 

2007
Stock Appreciation Rights Plan

(as
adopted by the Board of Directors on December 3, 2007 and amended on September 8,
2008)

 

1.                                       The Plan

 

Orient-Express
Hotels Ltd. (“OEH”) may grant stock appreciation rights (“SARs”) with respect
to Class A common shares of OEH pursuant to this 2007 Stock Appreciation
Rights Plan (the “Plan”) to permanent and seasonal full-time employees working
at least 35 hours per week and permanent and seasonal part-time employees
working less that 35 hours per week (“Employees”) of OEH, any of its
subsidiaries or affiliates and any of its investees that have adopted the Plan
(each, a “Participating Company”).  In
general, an SAR will entitle the Employee to whom an SAR has been granted to receive
a cash payment related to the increase (if any) in the market value of OEH’s Class A
common shares over three (3) years.

 

2.                                       Administration of the Plan

 

The
Compensation Committee (the “Committee”) of the Board of Directors of OEH will
administer the Plan and the SARs granted under it.  Any decision of the Committee will be final
and conclusive in all matters relating to the Plan and the SARs.  The Committee may make or vary regulations
for the administration and operation of the Plan not inconsistent with its
provisions.  The Committee may authorize
any one or more Committee members or the Secretary of OEH to execute and
deliver documents on behalf of the Committee. 
If the Committee is not constituted, references to it in the Plan will
be deemed to refer to the Board of Directors of OEH.

 

3.                                       To Whom SARs May Be Granted

 

SARs may be
granted by the Committee to any eligible Employee of a Participating
Company.  The Committee is authorized to
determine which of the eligible Employees are to be granted SARs, the dates of
grant, and the number of SARs to be granted to each.  Awards to full-time Employees may be at a
higher number of SARs than to part-time Employees.  A list of Employees to whom SARs have been
granted as of each grant date will be prepared and submitted to the Secretary
of OEH on behalf of the Committee.  An
SAR award certificate in a form approved by the Committee will be issued to
each Employee to whom an SAR has been granted specifying the grant date, the 

 

 

fair market
value of OEH’s Class A common shares on the grant date, and the number of
SARs granted to the Employee.

 

4.                                       Maturity and Payment of SARs

 

An outstanding
SAR will mature on the third (3rd) anniversary of its
grant date.  Promptly following the
maturity date (but no later than 75 days after the Participating Company’s tax
year), a Participating Company will cause to be paid to each Employee holding a
matured SAR who has been employed by the Participating Company continuously
from the SAR grant date through the SAR maturity date an amount in cash equal
to:

 

(a)  the
excess (if any) of the fair market value of one OEH Class A common share
at the SAR maturity date over the fair market value of one OEH Class A
common share at the SAR grant date,

 

(b)  multiplied
by the number of shares with respect to which the SAR was granted.

 

For purposes
of the Plan, the fair market value of the Class A common shares will be
the last sale price per share on the New York Stock Exchange on the relevant
date (or, if not listed on that exchange, then the last sale price per share on
the principal exchange or market on which the shares are traded).  Payment to an Employee by a Participating
Company will be made through its ordinary payroll including deduction of
applicable taxes.  The Plan will be unfunded,
and no Participating Company will be required to segregate assets in connection
with the Plan.

 

5.                                       SARs Not Assignable

 

No SAR granted
under the Plan may be transferred by the Employee.  Upon maturity of an SAR, payment will be made
only to the Employee.

 

6.                                       Adjustment of Number or Kind of Shares

 

If there is a
stock split, stock dividend, stock combination, exchange of shares or similar
capital adjustment involving the Class A common shares of OEH, the
Committee will appropriately adjust the number and kind of shares with respect
to which SARs have been granted, including the SAR grant prices.

 

7.                                       Amendment

 

The Plan may
be amended from time to time by the Board of Directors of OEH.  No amendment will alter or impair the rights
or obligations of any Employee, without his consent, 

 

2

 

under any SAR
granted under the Plan that has not yet matured.

 

8.                                       Termination

 

The Plan will
terminate upon the first of the following dates or events to occur:

 

(a)  if
OEH is a participant in any corporate amalgamation, merger, consolidation or
other reorganization and no provision is made at the time of the transaction to
continue the Plan,

 

(b)  by
resolution of the Board of Directors of OEH terminating the Plan, or

 

(c)  on
December 3, 2017.

 

In the event
of termination of the Plan in any of the foregoing ways, the provisions of the
Plan will continue to apply to any SARs granted prior to the termination that
have not yet matured.

 

9.                                       Effect of SARs Upon Employment

 

Nothing in the
Plan will be construed as giving any Employee of a Participating Company the
right to be retained in employment. If a Participating Company dismisses any
Employee, the Participating Company will have no liability for the effect which
dismissal might have upon the Employee as a participant under the Plan.  Under no circumstances will a dismissed
Employee be entitled to claim against the Participating Company any
compensation relating to any SAR held by the Employee under the Plan that has
not yet matured.

 

10.                                 Construction

 

In all
respects the Plan will be governed by, and be construed in accordance with, the
laws of the Islands of Bermuda.

 

*     *    
*     *     *

 

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