| Employee Benefits and Compensation Plans |
10. Employee Benefits and Compensation Plans
Share Option Awards
The following is a summary of option activity under NCLH’s Amended and Restated 2013 Performance Incentive Plan for the nine months ended September 30, 2019:
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Weighted- |
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Number of Share Option Awards |
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Weighted-Average Exercise Price |
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Average |
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Time- |
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Performance- |
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Market- |
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Time- |
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Performance- |
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Market- |
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Contractual |
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Aggregate |
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Based |
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Based |
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Based |
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Based |
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Based |
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Based |
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Term |
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Intrinsic Value |
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Awards |
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Awards |
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Awards |
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Awards |
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Awards |
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Awards |
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(years) |
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(in thousands) |
Outstanding as of January 1, 2019 |
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5,686,793 |
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410,499 |
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208,333 |
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$ |
50.65 |
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$ |
45.67 |
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$ |
59.43 |
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6.22 |
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$ |
13,946 |
Exercised |
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(311,732) |
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(138,306) |
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— |
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38.19 |
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19.00 |
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— |
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Forfeited and cancelled |
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(83,666) |
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(156,251) |
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— |
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56.30 |
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59.43 |
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— |
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Outstanding as of September 30, 2019 |
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5,291,395 |
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115,942 |
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208,333 |
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$ |
51.29 |
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$ |
58.96 |
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$ |
59.43 |
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5.63 |
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$ |
20,576 |
Restricted Ordinary Share Awards
The following is a summary of restricted NCLH ordinary share activity for the nine months ended September 30, 2019:
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Number of |
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Time- |
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Weighted- |
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Based |
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Average Grant |
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Awards |
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Date Fair Value |
Non-vested as of January 1, 2019 |
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429 |
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$ |
58.41 |
Vested |
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(429) |
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58.41 |
Non-vested as of September 30, 2019 |
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— |
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$ |
— |
Restricted Share Unit Awards
On March 1, 2019, NCLH granted 1.9 million time-based restricted share unit awards to our employees, which vest in substantially equal annual installments over three years. Additionally, on March 1, 2019, NCLH granted 0.5 million performance-based restricted share units to certain members of our management team, which vest upon the achievement of certain pre-established performance targets established for the 2019 and 2020 calendar years and the satisfaction of an additional time-based vesting requirement that generally requires continued employment through March 1, 2022.
The following is a summary of restricted share unit activity for the nine months ended September 30, 2019:
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Number of |
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Weighted- |
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Number of |
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Weighted- |
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Number of |
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Weighted- |
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Time-Based |
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Average Grant |
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Performance- |
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Average Grant |
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Market- |
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Average Grant |
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Awards |
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Date Fair Value |
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Based Awards |
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Date Fair Value |
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Based Awards |
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Date Fair Value |
Non-vested as of January 1, 2019 |
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2,973,032 |
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$ |
53.98 |
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825,614 |
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$ |
56.58 |
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50,000 |
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$ |
59.43 |
Granted |
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1,929,495 |
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55.00 |
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462,282 |
(1) |
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55.27 |
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— |
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— |
Vested |
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(1,430,124) |
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53.02 |
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(121,000) |
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56.27 |
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— |
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— |
Forfeited or expired |
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(167,261) |
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55.03 |
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(37,500) |
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56.27 |
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— |
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— |
Non-vested as of September 30, 2019 |
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3,305,142 |
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$ |
54.94 |
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1,129,396 |
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$ |
56.09 |
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50,000 |
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$ |
59.43 |
| (1) |
Number of performance-based restricted share units included assumes maximum achievement of performance targets. |
The compensation expense recognized for share-based compensation for the periods presented include the following (in thousands):
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2019 |
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2018 |
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2019 |
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2018 |
Payroll and related expense |
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$ |
4,489 |
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$ |
4,012 |
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$ |
12,974 |
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$ |
11,779 |
Marketing, general and administrative expense |
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20,931 |
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24,950 |
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69,096 |
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77,018 |
Total share-based compensation expense |
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$ |
25,420 |
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$ |
28,962 |
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$ |
82,070 |
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$ |
88,797 |
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