Common use of Earning Points Clause in Contracts

Earning Points. 4.1 The Pool revenues shall be shared according to a distribution key based on Pool earning points allocated to each Pool Vessel (“Pool Earning Points”). The Pool Earning Points allocated to the Vessel shall, as correctly as possible, reflect the relative earning potential of the Vessel compared with the other Pool Vessels. 4.2 The basis for the calculation of Pool Earning Points is set out in Appendix 1. At the start of each year during January, the Company shall submit to the Pool Committee for its approval a proposal for the revised basis of calculations for the ensuing year commencing on 1 January (the “Annual Calculation Review”). Upon such approval by the Pool Committee, the Company will calculate or, as the case may be, recalculate Pool Earning Points for each Pool Vessel in accordance with the revised principles of calculation which shall take effect for the whole calendar year from 1 January. The approved revised principles of calculation resulting from the Annual Calculation Review shall take effect as the new Appendix 1 to this Agreement with effect from 1 January of the relevant year, replacing the previous year’s version of Appendix 1. 4.3 The Vessel shall initially be allocated the Pool Earning Points stated in 5.1 below (the “Initial Pool Points”). The Vessel’s performance shall be reviewed by the Technical Committee on the third Quarter Date occurring after the date the Vessel has entered into the Pool (the “Delivery Date”) or, in the event that there is insufficient data on such third Quarter Date, on the fourth Quarter Date occurring after the Delivery Date (the “Initial Performance Review”). The Initial Performance Review will be based on the actual speed and consumption data of the Vessel received since the Delivery Date and the Initial Pool Points will be revised to take into account the results of such review. The results of the Initial Performance Review shall be circulated to the Participant before, and apply on and from, the first Quarter Date falling after the Initial Performance Review date. The new Pool Earnings Points determined from the Initial Performance Review shall apply: (a) retrospectively from the Delivery Date up to (but not including) the third Quarter Date occurring after the Delivery Date as definitive performance-based Pool Earnings Points; and (b) provisionally from the third Quarter Date occurring after the Delivery Date for the next three quarter periods until the results of the first Periodic Performance Review (as described in clause 4.4 below) are determined and circulated to the Participant. For the avoidance of doubt, the application of the results of the Initial Performance Review under this sub-paragraph (b) will involve a retrospective Pool Earnings Points adjustment to the first (or in some cases, the first two) of the above three quarter periods, and the Participant’s entitlement to distributions for the above periods following the Initial Performance Review shall be adjusted accordingly. 4.4 Further on-going performance reviews of the Vessel based on the Vessel’s actual speed and consumption data shall be conducted on the fifth Quarter Date following the Delivery Date and on every second Quarter Date thereafter (each a “Periodical Performance Review”). Each Periodical Performance Review shall be based on the Vessel’s performance data from the previous twelve (12) months and following such review, the Vessel’s Pool Earnings Points shall be revised to take into account the results of such review. The results of each Periodical Performance Review shall be circulated to the Participant before, and apply on and from, the first Quarter Date falling after such Periodical Performance Review date. The new Pool Earnings Points determined from each Periodical Performance Review shall apply: (a) retrospectively for the two quarter periods ending on (but not including) the relevant Periodical Performance Review date as definitive performance-based Pool Earnings Points; and (b) provisionally for the next three quarter periods following such Periodical Performance Review date until the results of the next Periodic Performance Review are determined and circulated to the Participant. For the avoidance of doubt, the application of the results of such Periodical Performance Review under this sub-paragraph (b) will involve a retrospective Pool Earnings Points adjustment to the first of the above three quarter periods, and the Participant’s entitlement to distributions for the above periods following each Periodical Performance Review shall be adjusted accordingly. 4.5 The Technical Committee shall consist of one member nominated by the Manager and one member elected by the Company every year.