EXHIBIT 10.37
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 XXXXXX X. XXXXX (the
"Individual").
R E C I T A L S
WHEREAS, the Individual is currently employed as the Vice
Chairman and Chief Operating 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
Vice Chairman and Chief Operating 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 100,000 <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 50,000 <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.
<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.
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-two (62) 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-two
(62) or (b) prior to attaining the age of sixty-two (62) 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-two (62).
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 Chairman, 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-two (62), the Individual voluntarily terminates his
employment with Carnival within 14 days of his receipt of notice
that Carnival's Chairman, 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/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
Title: Chairman and Chief
Executive Officer
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
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 Xxxxxx X. Xxxxx (the
"Compensation Agreement"), hereby irrevocably grants to XXXXXX X.
XXXXX (the "Optionee"), effective ______________ (the "Grant
Date"), the right and option (the "Option") to purchase One
Hundred Thousand (100,000) 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 Thousand (20,000) shares
of Common Stock on or after the first anniversary
of the Grant Date;
b) Exercisable as to an additional Twenty Thousand
(20,000) shares of Common Stock on or after the
second anniversary of the Grant Date;
c) Exercisable as to an additional Twenty Thousand
(20,000) shares of Common Stock on or after the
third anniversary of the Grant Date;
d) Exercisable as to an additional Twenty Thousand
(20,000) shares of Common Stock on or after the
fourth anniversary of the Grant Date;
e) Exercisable as to an additional Twenty Thousand
(20,000) 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 two
(62) 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:____________________________
Xxxxx Xxxxxx
Title:Chairman and Chief Executive
Officer
ACCEPTED AND AGREED THIS _____
DAY OF JANUARY, ______.
______________________________
Xxxxxx X. Xxxxx
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.
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.
