EXHIBIT 10.2
EXECUTIVE LONG-TERM COMPENSATION AGREEMENT
THIS EXECUTIVE LONG-TERM COMPENSATION AGREEMENT is entered into as of
this 16th 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 XXXXXX X. XXXXXXXXX (the "Individual").
R E C I T A L S
WHEREAS, the Individual is currently employed as the President and
Chief Operating Officer of Carnival Cruise Lines, a division 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 award under the 1994 Carnival Cruise Lines Key
Management Incentive Plan; 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 President and
Chief Operating Officer - Carnival Cruise Lines 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 August 1, 1997 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 on August 1st of each year
during the term of his employment (commencing effective
August 1, 1997) an option to purchase 40,000 shares of
Carnival Corporation Class A 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 Class A Common Stock on the New York
Stock Exchange Corporate Tape on August 1st of each year.
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 20,000
restricted shares of Carnival Corporation Class A 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:
(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").
In the event the Individual voluntarily terminates his employment with
Carnival within 14 days of his receipt of notice that Carnival's Chairman
and Chief Executive Officer, with approval and ratification of the 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. As further compensation hereunder, Carnival shall cause to be
amended the 1994 Carnival Cruise Lines Key Management Incentive Plan to
permit that the Individual's Incentive Award, as defined therein, be
payable solely in cash.
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 Chairman and Chief Executive Officer, and ratified and approved
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.
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 Chairman and Chief Executive
Officer, with approval and ratification of the 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.
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.
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
/s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
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.
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.
