Royal Caribbean Cruise Lines 2010 Annual Report Download - page 77

2010 ANNUAL REPORT 74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Our financing agreements contain covenants that
require us, among other things, to maintain minimum
net worth of at least $5.4 billion, a fixed charge cover-
age ratio of at least 1.25x and limit our net debt-to-
capital ratio to no more than 62.5%. The fixed charge
coverage ratio is calculated by dividing net cash from
operations for the past four quarters by the sum of
dividend payments plus scheduled principal debt pay-
ments in excess of any new financings for the past
four quarters. Our minimum net worth and maximum
net debt-to-capital calculations exclude the impact of
accumulated other comprehensive income (loss) on
total shareholders’ equity. We are currently well in
excess of all debt covenant requirements. The specific
covenants and related definitions can be found in the
applicable debt agreements, the majority of which
have been previously filed with the Securities and
Exchange Commission.
Following is a schedule of annual maturities on long-
term debt including capital leases as of December 31,
2010 for each of the next five years (in thousands):
Year
 
 
 
 
 
Thereafter 

NOTE 8. SHAREHOLDERS’ EQUITY
We declared cash dividends on our common stock
of $0.15 per share in the first three quarters of 2008.
Commencing in the fourth quarter 2008, our Board of
Directors discontinued the issuance of quarterly divi-
dends. As a result, we did not declare cash dividends
in 2010 or 2009.
NOTE 9. STOCK-BASED EMPLOYEE
COMPENSATION
We have four stock-based compensation plans, which
provide for awards to our officers, directors and key
employees. The plans consist of a 1990 Employee
Stock Option Plan, a 1995 Incentive Stock Option Plan,
a 2000 Stock Award Plan, and a 2008 Equity Plan.
The 1990 Stock Option Plan and the 1995 Incentive
Stock Option Plan terminated by their terms in March
2000 and February 2005, respectively. The 2000
Stock Award Plan, as amended, and the 2008 Equity
Plan, as amended, provide for the issuance of up to
13,000,000 and 11,000,000 shares of our common
stock, respectively, pursuant to grants of (i) incentive
and non-qualified stock options, (ii) stock appreciation
rights, (iii) restricted stock, (iv) restricted stock units
and (v) performance shares. Each of these stock-based
compensation plans has stock awards outstanding as
of December 31, 2010, with the exception of stock
awards issued under the 1990 Employee Stock Option
Plan as remaining awards outstanding under this plan
expired during 2009. During any calendar year, no
one individual shall be granted awards of more than
500,000 shares. Options and restricted stock units
outstanding as of December 31, 2010 vest in equal
installments over four to five years from the date of
grant. Options and restricted stock units are forfeited
if the recipient ceases to be a director or employee
before the shares vest. Options are granted at a price
not less than the fair value of the shares on the date
of grant and expire not later than ten years after the
date of grant.
We also provide an Employee Stock Purchase Plan
(“ESPP”) to facilitate the purchase by employees of
up to 800,000 shares of common stock in the aggre-
gate. Offerings to employees are made on a quarterly
basis. Subject to certain limitations, the purchase
price for each share of common stock is equal to 90%
of the average of the market prices of the common
stock as reported on the New York Stock Exchange
on the first business day of the purchase period and
the last business day of each month of the purchase
period. Shares of common stock of 30,054, 65,005
and 36,836 were issued under the ESPP at a weighted-
average price of $27.87, $12.78 and $20.97 during
2010, 2009 and 2008, respectively.
Under the chief executive officer’s employment
agree ment we contributed 10,086 shares of our
common stock quarterly to a trust on his behalf.
In January 2009, the employment agreement and
related trust agreement were amended. Consequently,
in January 2009, 768,018 shares were distributed
from the trust and beginning in January 2009 quar-
terly share distributions are issued directly to the
chief executive officer.
Total compensation expense recognized for employee
stock-based compensation for the years ended
December 31, 2010, 2009 and 2008 were as follows:
Location of expense
Employee Stock-Based
Compensation
(income)   
In thousands
Marketing, selling and
administrative expenses   
Payroll and related
expenses (income)   ()
Total Compensation
Expense   