Document:

osw-ex41_11.htm

Exhibit 4.1

Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

 

As of February 25, 2022, OneSpaWorld Holdings Limited, a company incorporated under the laws of the Commonwealth of The Bahamas (“we,” “our,” “OneSpaWorld” or the “Company”), has two classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: our common shares and our warrants.  

 

The following is a brief summary of the material terms of our common shares and does not purport to be complete. For a complete description of the terms of our common shares, you should refer to our Third Amended and Restated Memorandum of Association and Second Amended and Restated Articles of Association (our “Articles”) and applicable provisions of law. Our Articles are incorporated by reference as exhibit to our Annual Report on Form 10-K to which this exhibit is a part. You should read our Articles for provisions that may be important to you. 

 

Authorized and Issued Common Shares

 

Our Articles authorize the issuance of up to 250,000,000 of our common shares, $0.0001 par value per share. As of February 25, 2022, 92,068,369 common shares were issued and outstanding.

 

Issuance and Form

 

Subject to the provisions of our Articles and to any resolution of shareholders, unissued shares will be at the disposal of our Board of Directors (our “Board”), who may without prejudice to any rights previously conferred on the holders of any existing shares or class or series of shares offer, allot, grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as we may by resolution of directors determine. Pursuant to our Articles, our common shares are registered shares and may not be exchanged for bearer share certificates.

 

Voting Rights and Quorum

 

Each holder of a share of our common shares is entitled to one vote for each share held of record on the applicable record date on each matter submitted to a vote of shareholders. Our Articles do not provide for cumulative rights. 

 

Directors shall be elected by a plurality of votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors, unless a different vote is required by our Articles or under applicable law, in which case such express provision shall govern and control the decision of such question. Shareholders may act only at meetings duly called and shareholders may not act by written consent or otherwise outside of such meeting. A meeting of shareholders is duly constituted if, at the commencement of the meeting, there are present, in person or by proxy, shareholders representing not less than 50% of the votes of the shares or class or series of shares entitled to vote on resolutions of shareholders to be considered at the meeting. If there is a quorum, notwithstanding the fact that such quorum may be represented by only one person, then such person may resolve any matter, and a certificate signed by such person accompanied where such person be a proxy by the proxy form, or a copy thereof, shall constitute a valid resolution of shareholders. Once established, a quorum will not be broken by the subsequent withdrawal of enough votes to leave less than a quorum.

 

If shareholder approval is required (a) for the adoption of any agreement for merger of us with or into any other entity or for the consolidation of us with or into any other entity or (b) to authorize any sale, lease, exchange or other transfer of all or substantially all of the assets of us to any person, the affirmative vote of at least 66 2/3% of the shares entitled to vote thereon is required to approve such transaction; provided, however, that if such transaction is approved in advance by the directors, such transaction may be approved by the affirmative vote of a majority of the shares entitled to vote thereon.

 

Dividends

 

Our Board, by resolution, may declare and pay dividends in money, shares, or other property. No dividend shall be declared and paid unless the directors determine that immediately after the payment of the dividend the Company will be able to satisfy its liabilities as they become due in the ordinary course of its business and the 

1

 

realizable value of the assets of the Company will not be less than the sum of its total liabilities, other than deferred taxes, as shown in its books of account, and its issued and outstanding share capital. Our Board adopted an annual dividend program in November 2019, which program was temporarily suspended until further notice by our Board in response to the impact of the COVID-19 outbreak on our business.

 

Liquidation, Redemption and Preemptive Rights

 

In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, after payment or provision for the payment of the debts and other liabilities of the Company and the payment or setting aside for payment of any preferential amount due to the holders of any series of preferred shares, the holders of common shares, subject to the rights of the holders of any class or series of shares ranking on a parity with the common shares as to the payments or distributions in such event, shall be entitled to receive ratably any and all assets of the Company remaining to be paid or distributed.

 

We may purchase, redeem or otherwise acquire and hold our common shares, but no purchase, redemption or other acquisition shall be made unless the directors determined that immediately after the purchase, redemption or other acquisitions, we will be able to satisfy our liabilities as they become due in the ordinary course of our business and the realizable value of our assets will not be less than the sum of our total liabilities, other than deferred taxes, as shown in the books of account. A determination by our Board is not required where our common shares are purchased, redeemed or otherwise acquired:

 

	
 
	
a)
	
pursuant to a shareholder’s right to have our common shares redeemed or exchanged for money or other property of OneSpaWorld;

 

	
 
	
b)
	
in exchange for newly issued our common shares;

 

	
 
	
c)
	
by virtue of Section 81 of the International Business Companies Act, 2000 (No. 45 of 2000) (the “Act”) of the Commonwealth of The Bahamas; or

 

	
 
	
d)
	
pursuant to an order of the Supreme Court of the Commonwealth of The Bahamas.

 

Our common shares that are purchased, redeemed or otherwise acquired by us in accordance with our Articles may be cancelled or held as treasury shares unless our common shares are purchased, redeemed or otherwise acquired out of capital pursuant to Section 34 of the Act, in which case they shall be cancelled. Holders of our common shares have no preemptive rights.

 

Anti-Takeover Provisions and Other Provisions of Our Articles

 

Our Articles include certain provisions which may have the effect of delaying or preventing a future takeover or change in control of us that shareholders may consider to be in their best interests. Among other things, our Articles provide for a classified Board serving staggered terms of three years, super majority voting requirements with respect to certain significant transactions and restrictions on the acquisition of greater than 9.99% ownership without our Board’s approval. 

Classification of our Board of Directors 

 

Our Board is divided into three classes, having staggered terms of office of three years each. The effect of the classified Board may be to make it more difficult to acquire control over OneSpaWorld. 

 

Annual Meeting of Shareholders

 

Annual meetings of shareholders shall be held during each of our fiscal years and convened by a notice, which shall specify the place and time of the meeting as determined by resolution of the directors. Our Board may convene special meetings of the shareholders at such times and in such manner and places within or outside the Commonwealth of The Bahamas, or by means of remote communication, as the directors consider necessary or desirable. 

 

 

 

 

At an annual meeting of the shareholders, only such business shall be conducted as shall have been properly brought before the meeting. In addition to any other applicable requirements, to be properly brought before an annual meeting, business must be (a) specified in the notice of meeting given by or at the direction of the directors, (b) brought before the meeting by or at the direction of the directors or (c) otherwise properly brought before the meeting by a shareholder. Only those matters set forth in the notice of a special meeting may be considered or acted upon at that meeting, unless otherwise required by law. At every meeting of shareholders, the chairman of the board shall preside as chairman of the meeting. If there is no chairman of the board or if the chairman of the board is not present, the shareholders present shall choose someone of their number to be the chairman.

 

Special Meeting of Shareholders

 

A special meeting of the shareholders may be convened by our Board. Upon the written request of shareholders holding not less than majority of the outstanding voting shares, the directors shall convene a meeting of shareholders. If a special meeting is requested by such shareholders, a written request, specifying the business proposed to be transacted, shall be delivered personally or sent by first class mail, by express delivery or electronic transmission, to the Secretary of the Company. Upon receipt by our Secretary of such a request, the Secretary shall send notice of such meeting to shareholders entitled to vote within 45 days after the date the request was delivered to the Secretary. If such notice is not given by the Secretary within 45 days, the person or persons requesting the meeting may specify the time and place of the meeting and give noticed thereof; provided, however, that at least 10 days’ notice of such meeting is required to be given to the shareholders.

 

Advance Notice of Proposals

 

A shareholder may submit a proposal to present other items of business at the annual meeting of shareholder. The shareholder must give written notice of their intention to do. Notice for the presentation of other items of business submitted, must be received not less than 75 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting of shareholders. Our Articles set forth the form and content of the notice, as well as additional information regarding shareholders proposals and nominations.  

 

Restrictions on Ownership

 

Our Articles provide that shareholders will be prohibited from beneficially owning more than 9.99% of our issued and outstanding common shares without the consent of our Board. This restriction does not apply to Steiner Leisure Limited.

 

Indemnification 

 

Our Articles provide that OneSpaWorld shall indemnify and hold harmless to the extent permitted by applicable law any person (other than any Auditor) who was or is a party or witness to (or is threatened to be made a party or witness to) any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company) directly or indirectly by reason of the fact that he or she is or was a director, officer, employee or agent of the Company, or, while serving as a director, officer, employee or agent of the Company, against all liabilities, damages, costs, expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in (or not opposed to) the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful; and in actions by or in the right of the Company except that no such indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Company, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such other court shall deem proper. 

 

 

 

 

Transfer Agent and Warrant Agent

 

OneSpaWorld has appointed Continental Stock Transfer & Trust Company as our agent in New York to maintain our shareholders’ register on behalf of our Board and to act as transfer agent and registrar for our common shares and as warrant agent for our warrants.

 

Listing

 

Our common shares trade on The Nasdaq Capital Market under the symbol “OSW.” Our warrants are not currently traded on any national securities exchange.  

 

Warrants

2019 Warrants

Each 2019 Warrant entitles the registered holder to purchase one of our common shares at a price of $11.50 per share, subject to adjustment, at any time. The 2019 Warrants will expire five years after the completion of the business combination, consummated on March 19, 2019 (the “Business Combination”), at 5:00 p.m., New York City time, or earlier upon redemption.

If the common shares issuable upon exercise of the 2019 Warrants are not registered under the Securities Act within 60 business days following the Business Combination, we will be required to permit holders to exercise their 2019 Warrants on a cashless basis. However, no 2019 Warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any common shares to holders seeking to exercise their 2019 Warrants, unless the issuance of the common shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, unless an exemption is available. In the event that the conditions in the immediately preceding sentence are not satisfied with respect to a 2019 Warrant, the holder of such 2019 Warrant will not be entitled to exercise such 2019 Warrant and such 2019 Warrant may have no value and expire worthless. In no event will we be required to net cash settle any 2019 Warrant.

If our common shares are at the time of any exercise of a 2019 Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will be required to use our best efforts to register or qualify the common shares under applicable blue sky laws to the extent an exemption is not available.

We may call the 2019 Warrants for redemption:

	
 
	
•
	
in whole and not in part;

	
 
	
•
	
at a price of $0.01 per warrant;

	
 
	
•
	
upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and

	
 
	
•
	
if, and only if, the reported last sale price of the common shares equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before we send the notice of redemption to the warrant holders.

If and when the 2019 Warrants become redeemable by us, we may not exercise our redemption right if the issuance of the common shares upon exercise of the 2019 Warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification. We will use our best efforts to register or qualify such common shares under the blue sky laws of the state of residence in those states in which the 2019 Warrants were offered in this offering.

We have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are 

 

 

satisfied and we issue a notice of redemption of the 2019 Warrants, each warrant holder will be entitled to exercise its 2019 Warrant prior to the scheduled redemption date. However, the price of the common shares may fall below the $18.00 redemption trigger price as well as the $11.50 warrant exercise price after the redemption notice is issued.

If we call the 2019 Warrants for redemption as described above, our management will have the option to require any holder that wishes to exercise its 2019 Warrants to do so on a “cashless basis.” In determining whether to require all holders to exercise their 2019 Warrants on a “cashless basis,” our management will consider, among other factors, our cash position, the number of 2019 Warrants that are outstanding and the dilutive effect on our shareholders of issuing the maximum number of common shares issuable upon the exercise of the 2019 Warrants. If our management takes advantage of this option, all holders of 2019 Warrants would pay the exercise price by surrendering their 2019 Warrants for that number of common shares equal to the quotient obtained by dividing (x) the product of the number of common shares underlying the 2019 Warrants, multiplied by the difference between the exercise price of the 2019 Warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the common shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of 2019 Warrants. If our management takes advantage of this option, the notice of redemption will contain the information necessary to calculate the number of common shares to be received upon exercise of the 2019 Warrants, including the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of common shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature is an attractive option to us if we do not need the cash from the exercise of the 2019 Warrants. If we call the 2019 Warrants for redemption and our management does not take advantage of this option, holders of the 2019 Warrants that constitute Private Placement Warrants (as defined in the Warrant Agreement) and their permitted transferees would still be entitled to exercise their 2019 Warrants for cash or on a cashless basis using the same formula described above that other warrant holders would have been required to use had all warrant holders been required to exercise their 2019 Warrants on a cashless basis, as described in more detail below.

A holder of a 2019 Warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such 2019 Warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 4.9% or 9.8% (or such other amount as a holder may specify) of the common shares outstanding immediately after giving effect to such exercise.

If the number of outstanding common shares is increased by a share dividend payable in common shares, or by a split-up of common shares or other similar event, then, on the effective date of such share dividend, split-up or similar event, the number of common shares issuable on exercise of each 2019 Warrant will be increased in proportion to such increase in the outstanding common shares. A rights offering to holders of common shares entitling holders to purchase common shares at a price less than the fair market value will be deemed a share dividend of a number of common shares equal to the product of (i) the number of common shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for common shares) and (ii) one (1) minus the quotient of (x) the price per common share paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for common shares, in determining the price payable for common shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of common shares as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the common shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.

In addition, if we, at any time while the 2019 Warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to the holders of common shares on account of such common shares (or other shares of our share capital into which the warrants are convertible), other than (a) as described above or (b) certain ordinary cash dividends, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each common share in respect of such event.

If the number of outstanding common shares is decreased by a consolidation, combination, reverse share split or reclassification of common shares or other similar event, then, on the effective date of such consolidation, 

 

 

combination, reverse share split, reclassification or similar event, the number of common shares issuable on exercise of each 2019 Warrant will be decreased in proportion to such decrease in outstanding common shares.

Whenever the number of common shares purchasable upon the exercise of the 2019 Warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of common shares purchasable upon the exercise of the 2019 Warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of common shares so purchasable immediately thereafter.

 

In case of any reclassification or reorganization of the outstanding common shares (other than those described above or that solely affects the par value of such common shares), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding common shares), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the 2019 Warrants and in lieu of the common shares immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the 2019 Warrants would have received if such holder had exercised their 2019 Warrants immediately prior to such event. If less than 70% of the consideration receivable by the holders of common shares in such a transaction is payable in the form of common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the 2019 Warrant properly exercises the 2019 Warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the Warrant Agreement (as defined below) based on the Black-Scholes value (as defined in the Warrant Agreement) of the 2019 Warrant in order to determine and realize the option value component of the 2019 Warrant. This formula is to compensate the warrant holder for the loss of the option value portion of the 2019 Warrant due to the requirement that the warrant holder exercise the 2019 Warrant within 30 days of the event. The Black-Scholes model is an accepted pricing model for estimating fair market value where no quoted market price for an instrument is available.

The 2019 Warrants have been issued in registered form under the Amended and Restated Warrant Agreement, by and between Continental Stock Transfer & Trust Company, as warrant agent, and us, dated March 25, 2019 (the “Warrant Agreement”). For a complete description of the terms and conditions applicable to the 2019 Warrants, please refer to the Warrant Agreement, a copy of which was filed as Exhibit 10.5 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 25, 2019. The Warrant Agreement provides that the terms of the 2019 Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision and to provide for the delivery of Alternative Issuance (as defined in the Warrant Agreement). All other modifications or amendments require the vote or written consent of the Registered Holders (as defined in the Warrant Agreement) of at least 50% of the then outstanding Public Warrants (as defined in the Warrant Agreement).

The 2019 Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to us, for the number of 2019 Warrants being exercised. The warrant holders do not have the rights or privileges of holders of common shares and any voting rights until they exercise their 2019 Warrants and receive common shares. After the issuance of common shares upon exercise of the 2019 Warrants, each holder will be entitled to one vote for each common share held of record on all matters to be voted on by shareholders.

The 2019 Warrants that constitute Private Placement Warrants held by Steiner Leisure Limited and certain other investors (the “PIPE Investors”) who entered into certain subscription agreements with us dated November 1, 2018 are not redeemable by us so long as they are held by Haymaker Sponsor, LLC, Steiner Leisure Limited, the PIPE Investors or their permitted transferees and may be exercised on a cashless basis at any time. If the Private 

 

 

Placement Warrants held by Haymaker Sponsor, LLC, Steiner Leisure Limited and the PIPE Investors cease to be held by them or their permitted transferees, such warrants will be redeemable by us and exercisable by the holders on the same basis as the 2019 Warrants that constitute Public Warrants.

If the holders of the Private Placement Warrants elect to exercise their Private Placement Warrants on a cashless basis, they would pay the exercise price by surrendering their warrants for that number of common shares equal to the quotient obtained by dividing (x) the product of the number of common shares underlying the 2019 Warrants, multiplied by the difference between the exercise price of the 2019 Warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the common shares for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent.

2020 Warrants

The 2020 Warrants issued pursuant to the Investment Agreement dated April 30, 2020, between OneSpaWorld, Steiner Leisure Limited and certain other investors party thereto (the “Investment Agreement”) will expire on the earlier of (i) the fifth anniversary of the closing of the private placement of our common shares and 2020 Warrants pursuant to the Investment Agreement (the “2020 Private Placement”) or (ii) the Redemption Date (as defined below). The 2020 Warrants may be exercised on a “cashless” basis, in accordance with a specified formula. In addition, the Company may, at any time prior to their expiration, elect to redeem not less than all of such then-outstanding 2020 Warrants at a price of $0.01 per warrant, provided that the last sales price of the common shares reported has been at least $14.50 per share (subject to adjustment in accordance with certain specified events), on each of twenty trading days within the thirty-trading day period ending on the third business day prior to the date on which notice of the redemption is given (the “Redemption Date”), and provided that the common shares issuable upon exercise of such 2020 Warrants have been registered, qualified or are exempt from registration or qualification under the Securities Act and under the securities laws of the state of residence of the registered holder of the 2020 Warrant.osw-ex1015_159.htm

Exhibit 10.15

 

ONESPAWORLD HOLDINGS LIMITED

PERFORMANCE STOCK UNIT AGREEMENT

OneSpaWorld Holdings Limited (the “Company”) has granted, as of the date (the “Grant Date”) specified in the Grant Notice to the Participant named in the Notice of Grant of Performance Stock Unit (the “Grant Notice”) to which this Performance Stock Unit Agreement (this “PSU Agreement”) is attached, the number of performance stock units (the “PSUs”) set forth in the Grant Notice, and upon the terms and conditions set forth in the Grant Notice and this PSU Agreement.  The PSUs have been granted pursuant to and shall in all respects be subject to the terms and conditions of the OneSpaWorld Holdings Limited 2019 Equity Incentive Plan (the “Plan”), the provisions of which are incorporated herein by reference.  By signing the Grant Notice, the Participant: (a) acknowledges receipt of, and represents that the Participant has read and is familiar with, the Grant Notice, this PSU Agreement, and the Plan and shall be provided a prospectus for the Plan prepared in connection with the registration with the Securities and Exchange Commission of shares issuable pursuant to the PSUs (the “Plan Prospectus”), (b) accepts the PSUs subject to all of the terms and conditions of the Grant Notice, this PSU Agreement and the Plan and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Grant Notice, this PSU Agreement or the Plan. 

1.Definitions and Construction.

1.1Definitions.  Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice or the Plan.

1.2Construction.  Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this PSU Agreement.  Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.  Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

2.Administration.

All questions of interpretation concerning the Grant Notice, this PSU Agreement, the Plan or any other form of agreement or other document employed by the Company in the administration of the Plan or the PSUs shall be determined by the Committee.  All such determinations by the Committee shall be final, binding and conclusive upon all persons having an interest in the PSUs, unless fraudulent or made in bad faith.  Any and all actions, decisions and determinations taken or made by the Committee in the exercise of its discretion pursuant to the Plan or the PSUs or other agreement thereunder (other than determining questions of interpretation pursuant to the preceding sentence) shall be final, binding and conclusive upon all persons having an interest in the PSUs.

3.Vesting; Termination of Employment; Forfeiture; Change in Control.

3.1Vesting.  Subject to the provisions of this Section 3 and Section 11, the PSUs shall vest upon satisfaction of both the Performance Vesting Condition and Time Vesting Condition set forth below.  Any PSUs that satisfy both the Performance Vesting Condition and Time Vesting Condition or otherwise fully vest in accordance with the terms of this Agreement shall be referred to herein as “Vested PSUs”.

(a)Performance Vesting Condition.  The Performance Vesting Condition will be satisfied with respect to a percentage of the PSUs upon achievement of the Performance Goal set forth on Exhibit A attached hereto with respect to the one (1) year period ending on the first anniversary of the Grant Date (the “Performance Period”), provided that the Participant has not incurred a termination of Service prior to the Determination Date (as defined below).  In the event that Minimum Achievement of the Performance Goal is not achieved during the Performance Period, the Performance Vesting Condition shall not be satisfied and the PSUs shall be immediately forfeited and cancelled for no consideration.  Whether or not the Performance Vesting Condition has been satisfied pursuant to this Section 3.1(a) (including Exhibit A) shall be determined by the Committee as soon as practicable following the completion of the Performance Period, but no later than March 15th of the calendar year following the last day of the Performance Period (the date of the Committee’s determination, the “Determination 

 

 

Date”, and the PSUs that the Committee determines have been deemed earned, if any, the “Earned PSUs”).  The Earned PSUs shall continue to remain subject to the Time Vesting Condition described below.

(b)Time Vesting Condition.  Except as otherwise provided herein, the Time Vesting Condition shall be satisfied with respect to one-third (1/3) of the Earned PSUs on each of the Determination Date and the second and third anniversaries of the Grant Date (each, a “Vesting Date”), provided that the Participant has not incurred a termination of Service prior to such Vesting Date.  There shall be no proportionate or partial vesting in the periods prior to each Vesting Date and all vesting shall occur only on the appropriate Vesting Date.  For the avoidance of doubt, all Earned PSUs shall be deemed unvested PSUs until the Time Vesting Condition described in this Section 3.1(b) has been satisfied. 

3.2Accelerated Vesting upon Termination. Notwithstanding the foregoing, 100% of the PSUs set forth in the Grant Notice will accelerate and vest upon the occurrence of a Qualifying Termination Event (as defined below).  For purposes of this PSU Agreement, a “Qualifying Termination Event” is any of the following events:

(a)termination of Participant’s Service as a result of the death or Disability of the Participant;

(b)termination of the Participant’s Service by the Company or a Subsidiary Corporation without “cause” (only if the Participant then has an employment agreement with the Company or a Subsidiary Corporation approved by the Committee or Board (an “Employment Agreement”), and if so, “cause” shall have the meaning set forth in the Employment Agreement); or

(c)termination of the Participant’s Service by the Participant for “good reason” (only if the Participant then has an Employment Agreement with the Company or a Subsidiary Corporation approved by the Committee or Board providing for a “good reason” resignation right, and if so, “good reason” shall have the meaning set forth in the Employment Agreement).

3.3Forfeiture; Other Termination Events. Except as provided above and in the immediately following sentence, upon the termination of Participant’s Service with the Company or a Subsidiary Corporation for any reason, all unvested PSUs (including all Earned PSUs) shall be forfeited immediately without consideration.  Notwithstanding anything in this Agreement to the contrary, if the Participant voluntarily terminates the Participant’s Service with the Company on or following the Determination Date and on the effective date of such termination (the “Retirement Date”), (i) the Participant has worked full time for the Company for no less than ten years, (ii) the Participant is at least 65 years of age, and (iii) the Committee has approved the continued vesting of the RSUs in accordance with the terms of this Section 3.3 for such Participant, then, commencing on the Retirement Date, unless the Participant is then, or at any time on or prior to the three year anniversary of the Grant Date, in breach of any of Participant’s obligations under an applicable Employment Agreement or in beach of any restrictive covenants set forth in any written agreement between the Participant and the Company or a Subsidiary Corporation), if any, then, notwithstanding such termination by the Participant, any PSUs that became Earned PSUs upon the Determination Date shall continue to vest pursuant to the vesting schedule described in Section 3.1(b) above and the other terms hereof shall continue to be in effect.

3.4Effect of Changes in Control.  In the event of a Change in Control, the PSUs shall be subject to the terms and conditions set forth in the Plan; provided, that, notwithstanding the terms of the Plan and this Agreement, if the Change in Control occurs (a) during the Performance Period and prior to the Determination Date, (i) the number of PSUs set forth in the Grant Notice shall be deemed earned at Target Achievement (as defined in Exhibit A) (the “CIC Earned PSUs”), and (ii) the CIC Earned PSUs will vest upon such Change in Control, subject to the Participant’s continued Service through the consummation of such Change in Control, or (b) following the Determination Date, any Earned PSUs outstanding as of the Change in Control shall vest upon such Change in Control, subject to the Participant’s continued Service through the consummation of such Change in Control.  

4.Delivery of Shares.

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4.1General.  Subject to Section 4.2 and Section 6 below, within thirty (30) days following the vesting of the PSUs, the Participant shall receive the number of shares of Stock that correspond to the number of PSUs that have become vested on the Vesting Date or that have otherwise vested in accordance with the terms of this PSU Agreement and the Plan; provided, however, that, notwithstanding any terms of this PSU Agreement or the Plan to the contrary, if there is not a sufficient number of shares of Stock available under the Plan to settle all of the Vested PSUs in shares of Stock or if settling Vested PSUs in shares of Stock would (i) result in the Company or any Subsidiary Corporation to not be in compliance with all applicable requirements of all applicable laws or with the requirements of any stock exchange market system upon which the Stock may then be listed or (ii) otherwise result in a violation of the terms of the Plan or this PSU Agreement, the Vested PSUs shall be settled by a cash payment to the Participant in an amount equal to the Fair Market Value on the payment date of the shares of Stock.

4.2Trading Compliance.  If the date such distribution would otherwise be made pursuant to Section 4.1 occurs on a day on which the sale of Stock would violate the provisions of the Trading Company Policy, then such distribution shall be instead made on the next trading day on which the sale of such Stock would not violate the Trading Compliance Policy, but in any event, no later than the fifteenth (15th) day of the third (3rd) calendar month following the year in which such PSUs vest.

5.Dividends; Rights as Stockholder.  

In the event that the Company declares and pays a cash dividend in respect of its outstanding shares of Stock and, on the record date for such cash dividend, the Participant holds PSUs granted pursuant to this PSU Agreement that have not yet settled, the Company will record the amount of such dividends in a bookkeeping account and pay to the Participant an amount in cash equal to the cash dividends that the Participant would have received if the Participant was the holder of record, as of such record date, of a number of shares of Stock equal to the number of PSUs held by the Participant that have not been settled as of such record date, such payment to be made in the form of cash or with additional whole PSUs (as determined in accordance with the terms of this PSU Agreement) at the same time the PSUs subject to this PSU Agreement are settled in accordance with Section 4.1 above.  For purposes of clarity, if the PSUs granted pursuant to this PSU Agreement (or any portion thereof) are forfeited by the Participant then the Participant shall also forfeit the Dividend Equivalent Rights, if any, accrued with respect to such forfeited PSUs.  No interest will accrue on the Dividend Equivalent Rights between the declaration and payment of the applicable dividends and the settlement of the Dividend Equivalent Rights.  Except as otherwise provided herein, the Participant shall have no rights as a stockholder with respect to any shares covered by the PSUs until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).

6.Withholding of Tax.  

The Company shall have the right to deduct from any and all payments made under this PSU Agreement, or to require the Participant, through payroll withholding, cash payment or otherwise, to make adequate provision for, the federal, state, local and foreign taxes (including social insurance), if any, required by law to be withheld by any Participating Company with respect to the PSUs or the shares acquired pursuant thereto. The Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable to the Participant upon the settlement of the PSUs, or to accept from the Participant the tender of, a number of whole shares of Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the tax withholding obligations of any Participating Company.  The Fair Market Value of any shares of Stock withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable maximum individual statutory withholding rates for the applicable jurisdiction that may be used without resulting in adverse accounting consequences. The Company may require the Participant to direct a broker, upon the vesting or settlement of the PSUs, to sell a portion of the shares subject to the PSUs determined by the Company in its discretion to be sufficient to cover the tax withholding obligations of any Participating Company and to remit an amount equal to such tax withholding obligations to such Participating Company in cash.

7.Beneficial Ownership of Shares; Certificate Registration.  

The Participant hereby authorizes the Company, in its sole discretion, to deposit, for the benefit of the Participant with any broker with which the Participant has an account relationship of which the Company has 

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notice, any or all shares acquired by the Participant pursuant to the settlement of the PSUs.  Except as provided by the preceding sentence, a certificate for the shares received upon settlement of the PSUs shall be registered in the name of the Participant, or, if applicable, in the names of the heirs of the Participant.

8.Restrictions on Issuance of Shares.  

The grant of PSUs and the issuance of shares of Stock pursuant to the PSUs shall be subject to compliance with all applicable requirements of federal, state and foreign law with respect to such securities and the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, no shares may be issued pursuant to the PSUs unless (i) a registration statement under the Securities Act shall at the time of such issuance be in effect with respect to the shares issuable pursuant to the PSUs, or (ii) in the opinion of legal counsel to the Company, the shares issuable pursuant to the PSUs may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act.  The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares under the Plan shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained.  As a condition to issuance of any Stock, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

9.Fractional Shares.  

The Company shall not be required to issue fractional shares upon the settlement of PSUs.

10.Non-Transferability of the PSUs.  

The right to receive shares of Stock under this PSU Agreement shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution.  All rights with respect to the PSUs granted to the Participant hereunder shall be exercisable during his or her lifetime only by such Participant or the Participant’s guardian or legal representative.

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11.Adjustments for Changes in Capital Structure.

Subject to any required action by the stockholders of the Company and the requirements of Section 409A of the Code, to the extent applicable, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number and kind of shares subject to the PSUs, in order to prevent dilution or enlargement of the Participant’s rights under the PSUs.  For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.”  Any fractional share resulting from an adjustment pursuant to this Section 11 shall be rounded down to the nearest whole number.  The Committee, in its sole discretion, may also make such adjustments in the terms of the PSUs to reflect, or related to, such changes in the capital structure of the Company or distributions as it deems appropriate.  All adjustments pursuant to this Section 11 shall be determined by the Committee, and its determination shall be final, binding and conclusive.

12.Rights as a Stockholder, Employee or Consultant. 

The Participant shall have no rights as a stockholder with respect to any shares covered by the PSUs until the date of the issuance of the shares for which the PSUs have been settled (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date the shares are issued, except as provided in Section 11.  If the Participant is an Employee, the Participant understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Participant, the Participant’s employment is “at will” and is for no specified term.  Nothing in this PSU Agreement shall confer upon the Participant any right to continue in the Service of a Participating Company or interfere in any way with any right of the Participating Company Group to terminate the Participant’s Service as an Employee or Consultant, as the case may be, at any time.

13.Miscellaneous Provisions.

13.1Termination or Amendment.  The Committee may terminate or amend the Plan or the PSUs at any time; provided, however, that no such termination or amendment may have a materially adverse effect on the PSUs without the consent of the Participant unless such termination or amendment is necessary to comply with any applicable law or government regulation.  No amendment or addition to this PSU Agreement shall be effective unless in writing.

13.2Further Instruments.  The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this PSU Agreement.

13.3Binding Effect.  This PSU Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors and assigns.

13.4Delivery of Documents and Notices.  Any document relating to participation in the Plan or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this PSU Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Participant by a Participating Company, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address of such party set forth in the Grant Notice or at such other address as such party may designate in writing from time to time to the other party.

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(a)Description of Electronic Delivery and Signature.  The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this PSU Agreement, the Plan Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically.  In addition, if permitted by the Company, the Participant may deliver electronically the Grant Notice to the Company or to such third-party involved in administering the Plan as the Company may designate from time to time.  Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.  Any and all such documents and notices may be electronically signed.

(b)Consent to Electronic Delivery and Signature.  The Participant acknowledges that the Participant has read Section 13.4(a) of this PSU Agreement and consents to the electronic delivery of the Plan documents and, if permitted by the Company, the delivery of the Grant Notice, as described in Section 13.4(a).  The Participant agrees that any and all such documents requiring a signature may be electronically signed and that such electronic signature shall have the same effect as handwritten signature for the purposes of validity, enforceability and admissibility.  The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing.  The Participant further acknowledges that the Participant shall be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails.  Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails.  The Participant may revoke his or her consent to the electronic delivery of documents described in Section 13.4(a) or may change the electronic mail address to which such documents are to be delivered (if the Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail.  Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described in Section 13.4(a).

13.5Integrated Agreement.  The Grant Notice, this PSU Agreement and the Plan shall constitute the entire understanding and agreement of the Participant and the Participating Company Group with respect to the subject matter contained herein and supersede any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Participating Company Group with respect to such subject matter.  To the extent contemplated herein, the provisions of the Grant Notice, this PSU Agreement and the Plan shall survive the settlement of the PSUs and shall remain in full force and effect.

13.6Severability.  If any one or more of the provisions (or any part thereof) of this PSU Agreement shall be held invalid, illegal or unenforceable in any respect, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions (or any part thereof) of this PSU Agreement shall not in any way be affected or impaired thereby.

13.7Transfer of Personal Data.  The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Subsidiary Corporation) of any personal data information related to the PSUs awarded under this PSU Agreement for legitimate business purposes (including, without limitation, the administration of the Plan).  This authorization and consent is freely given by the Participant.

13.8Applicable Law.  This PSU Agreement shall be exclusively governed by the laws of the Commonwealth of The Bahamas as such laws are applied to agreements entered into and to be performed entirely within the Commonwealth of The Bahamas.

13.9Counterparts.  The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  A faxed, .pdf-ed or electronic signature shall operate the same as an original signature and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

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EXHIBIT A

Performance Vesting Condition

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