EXECUTIVE LONG-TERM COMPENSATION AGREEMENT
THIS EXECUTIVE LONG-TERM COMPENSATION AGREEMENT is entered into this
11th day of January, 1999, to be effective as of the 1st day of January, 1998,
by and between CARNIVAL CORPORATION ("Carnival") with its principal place of
business located at 0000 X.X. 00xx Xxxxxx, Xxxxx, Xxxxxxx 00000, and XXXXX
XXXXXX (the "Individual").
R E C I T A L S
WHEREAS, the Individual is currently employed as the Chairman and Chief
Executive Officer of Carnival;
WHEREAS, Carnival wishes to provide long-term incentive and reward to
the Individual for the continuation of his full-time employment with Carnival,
in addition to the Individual's annual compensation consisting of a base salary
and annual bonus; and
WHEREAS, the Individual desires to continue in the employ of Carnival
until his retirement in consideration for Carnival's payment of compensation for
his services during the period prior to retirement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Carnival shall continue to employ the Individual as Chairman and
Chief Executive Officer and the Individual shall continue to serve Carnival in
such executive capacity until such employment is terminated by either party.
2. Subject to the provisions of this Agreement, Carnival shall pay the
Individual as long-term compensation, beginning January 1, 1998 and continuing
during the term of his employment with Carnival, the stock compensation benefit
described as follows ("Stock Compensation Benefit"):
(A) Pursuant to the terms of Carnival's 1992 Stock Option Plan,
the Individual shall receive in January of each year during
the term of his employment (commencing effective January of
1998) an option to purchase 120,000 1/ shares of Carnival
Corporation Common Stock (the "Stock Option Benefit"). For
purposes of this Agreement, the exercise price of the options
shall be the average of the high and low sales price of Common
Stock on the New York Stock Exchange Corporate Tape on the
date of the quarterly Board of Directors meeting held in
January of each year (the "Grant Date"). Said options shall
vest ratably over a five (5) year period as more particularly
set forth in a Nonqualified Stock Option Agreement to be
entered into annually substantially in the form attached
hereto as Exhibit A.
(B) Pursuant to the terms of Carnival's 1993 Restricted Stock
Plan, the Individual shall receive annually on the Grant Date
60,000 2/ restricted shares of Carnival Corporation Common
Stock (the "Restricted Stock Benefit"). Except as otherwise
provided in Section 3 hereof, these shares shall vest on the
fifth anniversary of the date of such annual grant.
3. Notwithstanding anything herein to the contrary, no payment of any
Stock Compensation Benefit shall be made, and all unvested options and
restricted stock issued hereunder and all rights under the Agreement shall be
forfeited, if any of the following events shall occur:
---------------
1 The number of shares has been adjusted to reflect the 2-for-1 stock
split effective June 12, 1998.
2 The number of shares has been adjusted to reflect the 2-for-1 stock
split effective June 12, 1998.
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(A) The Individual's employment with Carnival is terminated for
cause. For purposes of this Agreement, "for cause" shall be
defined as any action or inaction by the Individual which
constitutes fraud, embezzlement, misappropriation, dishonesty,
breach of trust, a felony or moral turpitude, as determined by
its Board of Directors;
(B) The Individual voluntarily terminates his employment with
Carnival prior to attaining sixty (60) years of age unless
such voluntary termination is directly related to the
Individual being diagnosed with a terminal medical condition;
(C) The Individual shall engage in competition, as more
particularly described in Section 6 hereof, either (i) during
the term of his employment with Carnival; (ii) following the
Individual's voluntary termination of his employment with
Carnival; or (iii) following Carnival's termination of the
Individual's employment with Carnival either for cause, as
defined in (A) above, or other than for cause; or
(D) The Individual violates the nondisclosure provisions set forth
in Section 7 hereof.
In the event the Individual voluntarily terminates his employment
either (a) following attaining the age of sixty (60) or (b) prior to attaining
the age of sixty (60) as a direct result of the Individual being diagnosed with
a terminal medical condition, then all unvested options and restricted stock
previously granted hereunder will not be forfeited by the Individual and will
continue to vest as scheduled, unless and until the Individual engages in
competition in violation of Section 6 hereof or violates the nondisclosure
provisions set forth in Section 7 hereof.
In the event Carnival terminates the Individual's employment with
Carnival for a reason other than for cause, as defined in Section 3(A) above,
then, unless and until the Individual engages in competition in violation of
Section 6 hereof or violates the nondisclosure provisions set forth in Section 7
hereof, (i) each annual grant of the Stock Option Benefit shall continue to vest
as scheduled; and (ii) each annual grant of the Restricted Stock Benefit shall
vest and shall continue to vest in accordance with the alternative vesting
schedule set forth on Exhibit B ("Alternative Vesting Schedule I").
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In the event the Individual voluntarily terminates his employment with
Carnival within 14 days of his receipt of notice that Carnival's Board of
Directors or appropriate committee of the Board, has determined that the
Individual's annual grant of the Restricted Stock Benefit will be reduced by
more than 25% in any one year, then (i) all unvested options issued hereunder
shall be forfeited; (ii) each annual grant of the Restricted Stock Benefit shall
be subject to the alternative vesting schedule set forth on Exhibit C
("Alternative Vesting Schedule II"); and (iii) all unvested restricted stock
issued hereunder, after application of Alternative Vesting Schedule II, and all
rights under this Agreement shall be forfeited. Notwithstanding the foregoing,
this paragraph of Section 3 shall be null and void once the Individual attains
the age of sixty (60).
4. Intentionally Deleted.
5. Each annual grant of the Stock Compensation Benefit is contingent on
the Individual's satisfactory performance of his duties as determined by
Carnival's Board of Directors or appropriate committee of the Board.
6. The services of the Individual are unique, extraordinary and
essential to the business of Carnival, particularly in view of the Individual's
access to Carnival's confidential information and trade secrets. Accordingly, in
consideration of the Stock Compensation Benefits payable hereunder, the
Individual agrees that he will not, without the prior written approval of the
Board of Directors, at anytime during the term of his employment with Carnival
and (except as provided below) for five (5) years following the date on which
the Individual's employment with Carnival terminates, directly or indirectly,
within the United States or its territories, engage in any business activity
directly or indirectly competitive with the business of Carnival, or its
subsidiaries or divisions, or serve as an officer, director, owner, consultant,
or employee of any organization then in competition with Carnival or any of its
subsidiaries or divisions. In addition, the Individual agrees that during such
five (5) year period following his employment with Carnival, he will not
solicit, either directly or indirectly, any employee of Carnival, its
subsidiaries or division, who was such at the time of the Individual's
separation from employment hereunder. In the event that the provisions of this
Section 6 should ever be adjudicated to exceed the time, geographic or other
limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic or other limitations permitted by applicable law.
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Notwithstanding the foregoing, the provisions of this Section 6 shall
be null and void if, prior to attaining the age of sixty (60), the Individual
voluntarily terminates his employment with Carnival within 14 days of his
receipt of notice that Carnival's Board of Directors or appropriate committee of
the Board, has determined that the Individual's annual grant of the Restricted
Stock Benefit will be reduced by more than 25% in any one year.
7. The Individual expressly agrees and understands that Carnival owns
and/or controls information and material which is not generally available to
third parties and which Carnival considers confidential, including, without
limitation, methods, products, processes, customer lists, trade secrets and
other information applicable to its business and that it may from time to time
acquire, improve or produce additional methods, products, processes, customers
lists, trade secrets and other information (collectively, the "Confidential
Information"). The Individual hereby acknowledges that each element of the
Confidential Information constitutes a unique and valuable asset of Carnival,
and that certain items of the Confidential Information have been acquired from
third parties upon the express condition that such items would not be disclosed
to Carnival and its officers and agents other than in the ordinary course of
business. The Individual hereby acknowledges that disclosure of Carnival's
Confidential Information to and/or use by anyone other than in Carnival's
ordinary course of business would result in irreparable and continuing damage to
Carnival. Accordingly, the Individual agrees to hold the Confidential
Information in the strictest secrecy, and covenants that, during the term of his
employment with Carnival or at any time thereafter, he will not, without the
prior written consent of the Board of Directors, directly or indirectly, allow
any element of the Confidential Information to be disclosed, published or used,
nor permit the Confidential Information to be discussed, published or used,
either by himself or by any third parties, except in effecting Individual's
duties for Carnival in the ordinary course of business. The Individual agrees to
keep all such records in connection with the Individual's employment as Carnival
may direct, and all such records shall be the sole and absolute property of
Carnival. The Individual further agrees that, within five (5) days of Carnival's
request, he shall surrender to Carnival any and all documents, memoranda, books,
papers, letters, price lists, notebooks, reports, logbooks, code books, salesmen
records, customer lists, activity reports, video or audio recordings, computer
programs and any and all other data and information and any and all copies
thereof relating to Carnival's business or any Confidential Information.
8. Except as otherwise provide in Section 6 hereof, the restrictive
covenants contained in Sections 6 and 7 herein shall survive the termination or
expiration of this Agreement and any termination of the Individual's employment.
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9. Nothing herein shall be construed as conferring upon the Individual
the right to continue in the employ of Carnival as an executive or in any other
capacity.
10. The Stock Compensation Benefit payable under this Agreement shall
not be deemed salary or other compensation to the Individual for the purpose of
computing benefits to which such Individual may be entitled under any pension or
profit sharing plan or other arrangement of Carnival for the benefit of its
employees.
11. The Compensation Committee of Carnival's Board of Directors shall
have the full power and authority to interpret, construe and administer this
Agreement. No officer or director of Carnival shall be liable to any person for
any action taken or omitted in connection with the interpretation and
administration of this Agreement unless such action or omission is attributable
to his own willful misconduct or lack of good faith.
12. This Agreement shall not be, nor shall it be construed to
constitute an employment agreement between the Individual and Carnival.
13. This Agreement shall be governed by, and shall be construed and
interpreted in accordance with, the laws of the State of Florida and the parties
agree to submit to the jurisdiction of the United States District Court for the
Southern District of Florida for the resolution of any disputes arising under
this Agreement.
14. In the event that any party to this Agreement institutes suit
against the other party to this Agreement to enforce any of its rights
hereunder, the "prevailing party" in such action shall be entitled to recover
from the other party all reasonable costs incurred in pursuing such action,
including reasonable attorneys' fees. For purposes of this Agreement,
"prevailing party" shall mean the party recovering judgment in the case and not
being liable on any counterclaim brought in the case.
15. This Agreement constitutes the entire agreement between Carnival
and the Individual with respect to the long-term compensation of the Individual
as described herein and supersedes all prior negotiations, agreements,
understandings and arrangements, both oral and written, between Carnival and the
Individual with respect to such subject matter. This Agreement may not be
modified in any way, except by a written instrument executed by each of Carnival
and the Individual.
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16. This Agreement shall be for the benefit of, and shall be binding
upon, each of Carnival and the Individual and their respective heirs, personal
representatives, legal representatives, successors and assigns.
17. The invalidity of any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall not affect the
enforceability of the remaining portions of this Agreement or any part hereof,
all of which are inserted conditionally on their being valid in law. In the
event that any one or more of the words, phrases, sentences, clauses or sections
contained in this Agreement shall be declared invalid by a court of competent
jurisdiction, then, in any such event, this Agreement shall be construed as if
such invalid word or words, phrase or phrases, sentence or sentences, clause or
clauses, or section or sections had not been inserted.
18. The waiver by either party of a breach or violation of any term or
provision of this Agreement by the other party shall not operate nor be
construed as a waiver of any subsequent breach or violation of any provision of
this Agreement nor of any other right or remedy.
IN WITNESS WHEREOF, each of the parties has executed and delivered this
Agreement as of the date first above written.
CARNIVAL CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------
Xxxxxx X. Xxxxx
Title: Vice Chairman and Chief
Operating Officer
/s/ Xxxxx Xxxxxx
----------------
Xxxxx Xxxxxx
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EXHIBIT A
CARNIVAL CORPORATION
1992 STOCK OPTION PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
Carnival Corporation, f/k/a Carnival Cruise Lines, Inc. (the
"Company"), having heretofore adopted the Carnival Corporation 1992 Stock Option
Plan (the "Plan") and entered into that certain Executive Long-Term Compensation
Agreement effective as of January 1, 1998 between the Company and Xxxxx Xxxxxx
(the "Compensation Agreement"), hereby irrevocably grants to XXXXX XXXXXX (the
"Optionee"), effective _______________ (the "Grant Date"), the right and option
(the "Option" ) to purchase One Hundred Twenty Thousand (120,000) shares of
Common Stock on the following terms and conditions:
1. Each defined term used in this Agreement and not otherwise defined
herein shall have the meaning assigned to it in the Plan.
2. This Option shall not be exercisable, in whole or in part, except as
follows:
a) Exercisable as to Twenty Four Thousand (24,000) shares of Common
Stock on or after the first anniversary of the Grant Date;
b) Exercisable as to an additional Twenty Four Thousand (24,000) shares
of Common Stock on or after the second anniversary of the Grant Date;
c) Exercisable as to an additional Twenty Four Thousand (24,000) shares
of Common Stock on or after the third anniversary of the Grant Date;
d) Exercisable as to an additional Twenty Four Thousand (24,000) shares
of Common Stock on or after the fourth anniversary of the Grant Date;
e) Exercisable as to an additional Twenty Four Thousand (24,000) shares
of Common Stock on or after the fifth anniversary of the Grant Date.
3. Notwithstanding the provisions of paragraph 2, if Optionee's
employment by the Company or any Subsidiary shall terminate by reason of his
death or Disability, this Option shall become immediately exercisable in full in
respect of the aggregate number of shares of Common Stock covered hereby.
4. Unless otherwise provided in the Compensation Agreement, the
unexercised portion of this Option shall automatically and without notice
terminate and become null and void at the time of the earliest of the following
to occur:
a) the expiration of ten (10) years from the Grant Date;
b) the expiration of one (1) year from the date the Optionee's
employment with the Company or any of its Subsidiaries shall terminate by reason
of Disability; provided, however, that if the Optionee shall die during such
one-year period, the provisions of subparagraph (c) below shall apply;
c) the expiration of one (1) year from the date of the Optionee's
death, if such death occurs either during employment by the Company or any of
its Subsidiaries or during the one-year period described in subparagraph (b)
above;
d) the date the Company terminates the Optionee's employment with the
Company or any of its Subsidiaries "for cause" (as defined in the Compensation
Agreement);
e) the date on which the Optionee voluntarily terminates his employment
with the Company or any of its Subsidiaries prior to attaining sixty (60) years
of age, unless such voluntary termination is directly related to the Optionee
being diagnosed with a terminal medical condition; and
f) the violation by the Optionee of noncompete and/or nondisclosure
provisions set forth in Sections 6 and 7 of the Compensation Agreement.
5. The purchase price for each of the shares of Common Stock purchased
pursuant to this Option shall be ___________ and ____/100 Dollars ($______).
This Option is not intended to be an "incentive stock option" within the meaning
of Section 422(b) of the Internal Revenue Code of 1986, as amended.
6. Unless Optionee utilizes a cashless exercise program, if available
and authorized by the Company from time to time, this Option shall be deemed
exercised when the Optionee (a) delivers written notice to the Company at its
principal business office, directed to the attention of its Secretary, of the
decision to exercise, specifying the number of shares with respect to which this
Option is exercised and the price per share designated in this Option, and (b)
concurrently tenders to the Company full payment for the shares of Common Stock
to be purchased pursuant to such exercise. Full payment for shares of Common
Stock purchased by the Optionee shall be made at the time of any exercise, in
whole or in part, of this Option, and certificates for such shares shall be
delivered to the Optionee as soon thereafter as is reasonably possible. No
shares of Common Stock shall be transferred to the Optionee until full payment
therefor has been made, and the Optionee shall have none of the rights of a
shareholder with respect to any shares of Common Stock subject to this Option
until a certificate for such shares shall have been issued and delivered to the
Optionee. Such payment shall be made in cash or by check or money order payable
to the Company, in each case payable in U.S. Currency. (In the Committee's
discretion, such payment may be made by delivery of shares of Common Stock
having a fair market value [determined as of the date this Option is so
exercised in whole or in part] that, when added to the value of any cash, check,
promissory note or money order satisfying the foregoing requirements, will equal
the aggregate purchase price.)
7. This Option and the rights evidenced hereby are not transferable in
any manner other than by will or by the laws of descent and distribution and
during the Optionee's lifetime shall be exercisable only by the Optionee (or the
Optionee's court-appointed legal representative).
8. The Company's obligation to deliver shares of Common Stock upon the
exercise of this Option shall be subject to all applicable federal, state and
local withholding requirements, including the payment by the Optionee of any
applicable federal, state and local withholding tax. The Company may withhold
delivery of shares of Common Stock until the Optionee pays to the Company the
amount of tax it is required to withhold under any applicable law. If the
Optionee fails to remit to the Company such tax, the Company may sell such
portion of the shares of Common Stock as are sufficient to satisfy the Company's
obligation to withhold such tax.
9. The Company's obligation to deliver shares of Common Stock in
respect of this Option shall be subject to all applicable laws, rules and
regulations and such approvals by any governmental agency as may be required.
10. The Optionee, by his acceptance hereof, represents and warrants to
the Company that his purchase of shares of Common Stock upon the exercise of
this Option shall be for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof; provided, however, that
this representation and warranty shall be inoperative if, in the opinion of
counsel to the Company, a proposed sale or distribution of such shares is
pursuant to an applicable effective registration statement under the Securities
Act of 1933, as amended, and any applicable state "blue sky" or other securities
laws or is exempt from registration thereunder. The Company will endorse an
appropriate legend referring to the foregoing restriction upon the certificate
or certificates representing any shares of Common Stock issued or transferred to
the Optionee upon the exercise of this Option.
11. This Agreement shall be subject to all the terms and provisions of
the Plan and the Compensation Agreement, which are incorporated by reference
herein and are made a part hereof, including without limitation the provisions
of paragraph 13 of the Plan generally relating to adjustments to the number of
shares of Common Stock subject to this Option and to the Option purchase price
on certain changes in capitalization and the effects of certain reorganizations
and other transactions. In the event there is any inconsistency between the
provisions of this Agreement and the Plan, the provisions of the Plan shall
govern. By entering into this Agreement, the Optionee agrees and acknowledges
his receipt of a copy of the Plan.
12. This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida.
IN WITNESS WHEREOF, the Company has caused these presents to be signed
by its duly authorized officer as of the _____ day of January, _____.
CARNIVAL CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------
Xxxxxx X. Xxxxx
Title: Vice Chairman and Chief Operating Officer
ACCEPTED AND AGREED THIS _____
DAY OF JANUARY, ______.
------------------------------
Xxxxx Xxxxxx
Optionee
EXHIBIT B
ALTERNATIVE VESTING SCHEDULE I
1. Vest as to 20% of the Restricted Stock Benefit on the first anniversary
of the grant date thereof;
2. Vest as to 40% of the Restricted Stock Benefit on the second
anniversary of the grant date thereof;
3. Vest as to 60% of the Restricted Stock Benefit on the third anniversary
of the grant date thereof;
4. Vest as to 80% of the Restricted Stock Benefit on the fourth
anniversary of the grant date thereof; and
5. Vest as to 100% of the Restricted Stock Benefit on the fifth
anniversary of the grant date thereof.
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EXHIBIT C
ALTERNATIVE VESTING SCHEDULE II
1. Vested as to 0% of the Restricted Stock Benefit if termination occurs
between the grant date and the first anniversary of the grant date
thereof;
2. Vested as to 20% of the Restricted Stock Benefit if termination occurs
between the first and second anniversaries of the grant date thereof;
3. Vested as to 40% of the Restricted Stock Benefit if termination occurs
between the second and third anniversaries of the grant date thereof;
4. Vested as to 60% of the Restricted Stock Benefit if termination occurs
between the third and fourth anniversaries of the grant date thereof;
5. Vested as to 80% of the Restricted Stock Benefit if termination occurs
between fourth and fifth anniversaries of the grant date thereof; and
6. Vested as to 100% of the Restricted Stock Benefit if termination occurs
after the fifth anniversary of the grant date thereof.
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