| 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 three months ended March 31, 2020:
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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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Aggregate |
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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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Intrinsic |
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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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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, 2020 |
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4,918,554 |
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115,489 |
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208,333 |
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$ |
51.84 |
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$ |
59.11 |
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$ |
59.43 |
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5.42 |
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$ |
33,413 |
Exercised |
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(48,221) |
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(906) |
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— |
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44.38 |
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19.00 |
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— |
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Forfeited and cancelled |
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(25,000) |
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— |
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— |
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56.19 |
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— |
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— |
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Outstanding as of March 31, 2020 |
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4,845,333 |
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114,583 |
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208,333 |
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$ |
51.89 |
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$ |
59.43 |
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$ |
59.43 |
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5.18 |
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$ |
— |
Restricted Share Unit Awards
On March 2, 2020, NCLH granted 2.4 million time-based restricted share unit awards to our employees, which vest in substantially equal annual installments over three years. Additionally, on March 2, 2020, NCLH granted 0.6 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 2020 and 2021 calendar years and the satisfaction of an additional time-based vesting requirement that generally requires continued employment through March 1, 2023.
The following is a summary of restricted share unit activity for the three months ended March 31, 2020:
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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, 2020 |
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3,245,625 |
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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 |
Granted |
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2,392,044 |
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35.86 |
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611,808 |
(1) |
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35.59 |
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— |
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— |
Vested |
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(1,594,003) |
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54.20 |
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(181,682) |
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56.33 |
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— |
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— |
Forfeited or expired |
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(85,667) |
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50.85 |
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(17,652) |
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56.77 |
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— |
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— |
Non-vested as of March 31, 2020 |
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3,957,999 |
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$ |
43.80 |
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1,541,870 |
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$ |
47.92 |
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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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March 31, |
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2020 |
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2019 |
Payroll and related expense |
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$ |
4,702 |
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$ |
3,804 |
Marketing, general and administrative expense |
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28,056 |
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23,195 |
Total share-based compensation expense |
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$ |
32,758 |
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$ |
26,999 |
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