| 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 six months ended June 30, 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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(163,792) |
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— |
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— |
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50.39 |
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— |
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— |
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Outstanding as of June 30, 2020 |
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4,706,541 |
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114,583 |
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208,333 |
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51.97 |
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59.43 |
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59.43 |
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4.93 |
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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 six months ended June 30, 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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2,396,824 |
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35.81 |
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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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(1,599,412) |
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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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(186,914) |
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47.45 |
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(63,026) |
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47.45 |
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— |
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— |
Non-vested as of June 30, 2020 |
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3,856,123 |
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43.72 |
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1,496,496 |
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48.04 |
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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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Six Months Ended |
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June 30, |
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June 30, |
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2020 |
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2019 |
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2020 |
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2019 |
Payroll and related expense |
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$ |
5,029 |
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$ |
4,681 |
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$ |
9,731 |
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$ |
8,485 |
Marketing, general and administrative expense |
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17,360 |
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24,970 |
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45,416 |
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48,165 |
Total share-based compensation expense |
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$ |
22,389 |
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$ |
29,651 |
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$ |
55,147 |
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$ |
56,650 |
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