The Company’s board of directors approved the 2019 Equity Incentive Plan (the “2019 Plan”) on March 18, 2019 and the Company’s shareholders approved the 2019 Plan on March 18, 2019. The purpose of the 2019 Plan is to make available incentives that will assist the Company to attract, retain, and motivate employees, including officers, consultants and directors. The Company may provide these incentives through the grant of share options, share appreciation rights, restricted shares, restricted share units, performance shares and units and other cash-based or share-based awards. The Equity Plan provides participants an option to defer compensation on a tax-deferred basis. Awards may be granted under the 2019 Plan to OneSpaWorld employees, including officers, directors or consultants or those of any present or future parent or subsidiary corporation or other affiliated entity. A total of 7,000,000 OneSpaWorld Shares have been authorized and reserved for issuance under the 2019 Plan. Non-cash stock-based compensation expense is included within general and administrative expense in the consolidated statements of operations. Share-based payments, to the extent they are compensatory, are recognized based on their grant date fair values. Forfeitures are recorded as they occur.

Stock based compensation cost, which is included as a component of salary and payroll taxes in the accompanying consolidated statements of operations for the year ended December 31, 2020 and for the period from March 20, 2019 to December 31, 2019 was $4.9 million and $20.7 million, respectively. As of December 31, 2020, the Company had $16.1 million of total unrecognized compensation expense related to restricted stock units and performance stock units.

On March 26, 2019 (the “Grant Date”), a total of 4,547,076 options were granted by the Company under the 2019 Plan to executive officers of the Company. The options have an exercise price of $12.99 and expire on the sixth anniversary of the Grant Date. The options were 100% vested on the Grant Date. The options become exercisable upon the five day volume weighted average price of OneSpaWorld common shares reaching $20.00 per share. The Grant Date fair value of the option was $4.48, resulting in stock-based compensation of $20,370,900 being recognized by the Company in the period from March 20, 2019 to December 31, 2019 in accordance with ASC Topic 718, Compensation – Stock Compensation. The Grant Date fair value of the option was estimated by a third-party valuation specialist using a Monte Carlo simulation in a risk-neutral framework assuming Geometric Motion, 2,500,000 trials, and using the following assumptions:


Hurdle price per share	$	20.00
Strike price per share	$	12.99
Average period for hurdle price, in days	5
End of simulation term	3/26/2025
Term of simulation	6.00 years
Stock price as of the Measurement Date	$	12.99
Volatility		37.5	%
Risk-free rate (continuous)		2.2	%
Dividend yield (quarterly after 3 years)		3.0	%
Suboptimal exercise multiple	2.8x

The following table shows stock options that were outstanding and vested as of December 31, 2020 and the related weighted average exercise price and weighted average grant date fair value.



	Number of Options (as restated)		Weighted- Average Exercise Price		Weighted-Average Grant Date Fair Value

Outstanding at December 31, 2020		4,375,891		12.99		4.48
Vested at December 31, 2020		4,375,891	$	12.99	$	4.48

The weighted average estimated fair value of options granted during the period from March 20, 2019 to December 31, 2019 was $4.48. On December 31, 2020, our outstanding stock options had no intrinsic value since the closing price on that date of $10.14 per share was below the weighted average exercise price of our outstanding stock options. As of December 31, 2020, there was no unrecognized compensation cost related to the share options granted or exercised under the plan. No share options were granted during the year ended December 31, 2020. No share options were exercisable as of December 31, 2020.

The Company’s restricted stock units (“RSUs”) have been issued to employees and directors with vesting periods ranging from one year to three years and vest based solely on service conditions. RSUs become unrestricted common stock upon vesting on a one-for-one basis. The cost of these awards is determined using the fair value of our common stock on the date of the grant, and compensation expense is recognized over the vesting period.

The following is a summary of RSUs activity for the year ended December 31, 2020:

Restricted Share Units Activity	Number of Awards			Weighted-Average Grant Date Fair Value		Aggregate Intrinsic Value (In thousands) (1)

Non-Vested share units as of December 31, 2019		60,902		$	15.60
Granted		1,833,821			7.33
Vested		(54,491	)		15.60
Forfeited		(9,117	)		15.62
Non-Vested share units as of December 31, 2020		1,831,115		$	7.32	$	18,568

The total fair value of restricted stock units that vested in 2020, based on the market price of the underlying shares on that day of vesting, was $0.3 million.

There were 1,833,821 and 60,902 restricted share units granted during the year ended December 31, 2020 and 2019, respectively. The weighted average estimated fair value of RSUs granted during the period from March 20, 2019 to December 31, 2019 was $15.60. As of December 31, 2020, the Company had $11.4 million of total unrecognized compensation expense related to restricted stock award grants, which will be recognized over the weighted-average period of approximately 2.5 years.

The Company grants certain senior-level employees performance share units that generally vest based on either performance and time-based service condition (“Performance Condition-Based Awards”) or market and time-based service conditions (“Market Condition-Based Awards”) which are referred to herein as Performance Share Units (“PSUs”). The number of shares of common stock underlying each award is determined at the end of the performance period. In order to vest, the employee must be employed by the Company, with certain contractual exclusions, at the end of the performance period.

On January 21, 2020, the Company granted 181,316 PSUs to certain employees which vest upon the achievement of certain pre-established performance target established for the 2020 calendar year and the satisfaction of an additional time-based vesting requirement that generally requires continued employment through January 21, 2023. Performance share units are converted into shares of common stock upon vesting on a one-for-one basis. The Company estimates the fair value of each performance share when the grant is authorized, and the related service period has commenced. The Company recognizes compensation cost over the vesting period based on the probability of the performance conditions being achieved. If the specified service and performance conditions are not met, compensation expense is not recognized, and any previously recognized compensation expense will be reversed. In December 2020, the Company’s compensation committee approved the waiver of the performance condition after considering the severe interruption of the Company’s business and operations resulting from the unforeseen circumstances of COVID-19 and the material adverse impact on the Company’s share price. As a result of this modification, the performance share unit awards were revalued as of the date of the modification to $8.76 per share, based on the market price of the underlying shares on that day and the aggregate fair value of the modification was approximately $1.3 million which represents the total fair value of the modified award which will be expensed over the remaining vesting period. The modified performance share unit awards will vest approximately 33% on each anniversary of the original grant date.

On August 18, 2020, the Company granted 1,003,000 performance share unit awards (“PSUs”) to certain executive officers. The PSUs expire on the sixth anniversary of the Grant Date. The PSUs are converted into shares of common stock upon vesting on a one-for-one basis. The PSU’s will vest upon achievement of the twenty-day volume weighted average price of OneSpaWorld common shares reaching the following hurdle prices:

Hurdle Price		Percentage of PSU's Vested
$	7.24	25%
$	8.83	25%
$	10.41	25%
$	12.00	25%

On October 1, 2020, the Company granted 166,667 PSUs to an executive officer. The PSUs expire on the sixth anniversary of the Grant Date. The PSUs are converted into shares of common stock upon vesting on a one-for-one basis. The PSUs will vest upon achievement of the five-day volume weighted average price of OneSpaWorld common shares reaching $12 per share.

On October 13, 2020, the Company granted 83,333 PSUs as an inducement grant outside of the 2019 Plan to an executive officer. The PSU’s expire on the sixth anniversary of the Grant Date. The PSUs are converted into shares of common stock upon vesting on a one-for-one basis. The PSUs will vest upon achievement of the twenty-day volume weighted average price of OneSpaWorld common shares reaching the following hurdle prices:

Hurdle Price		Percentage of PSU's Vested
$	8.39	25%
$	9.59	25%
$	10.80	25%
$	12.00	25%

Grant date fair values of the market condition-based awards and the derived service periods assigned to the PSUs were estimated by a third-party valuation specialist using a Monte Carlo simulation in a risk-neutral framework assuming Geometric Motion, 100,000 trials, and using the following assumptions:

	August 18, 2020		October 1, 2020		October 13, 2020
Hurdle prices per share	$7.24, $8.83, $10.41, $12.00		$	12.00	$8.39, $9.59, $10.80, $12.00
End of simulation term	August 18, 2026		October 1, 2026		October 13, 2026
Term of simulation	6 years		6 years		6 years
Stock price as of measurement date	$	5.65	$	6.47	$	6.99
Volatility	54.13%		54.80%		54.92%
Risk-free rate (continuous)	0.37%		0.36%		0.41%

The following is a summary of PSUs activity for the year ended December 31, 2020:

Performance Share Unit Activity	Number of Market Based-Awards			Weighted-Average Grant Date Fair Value		Number of Performance -Based Awards			Weighted-Average Grant Date Fair Value

Non-Vested share units as of December 31, 2019		-		$	-		-		$	-
Granted		1,253,000			4.81		181,316			15.67
Vested		(271,584	)		4.76		(48,690	)		15.67
Forfeited		-			-		(2,706	)		15.67
Non-Vested share units as of December 31, 2020		981,416		$	4.83		129,920		$	15.67

No PSUs were granted during the periods from March 20, 2019 to December 31, 2019.

The total fair value of market and performance based-PSUS that vested in 2020 was $2.6 million and $0.4 million, respectively, based on the market price of the underlying shares on that day of vesting. As of December 31, 2020, there was total unrecognized compensation cost related to non-vested market and performance-based PSUs of $3.6 million and $1.1 million, respectively. The costs are expected to be recognized over the weighted-average period of approximately 1.5 years and 2 years, respectively. The aggregate intrinsic value of PSUs as of December 31, 2020 was $11.3 million. The aggregate intrinsic value of PSUs is based on the number of nonvested PSUs and the market value of the Company’s common stock as of December 31, 2020.