Carnival Cruises 2006 Annual Report Download - page 31
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StockOptionPlans
TheCommitteegenerallysetsstockoptionexercisepricesat100%ormoreofthefairmarketvalueoftheunderlyingcommon
stock/ordinarysharesonthedatetheoptionisgranted.AllstockoptionsgrantedduringtheyearsendedNovember30,2006
and2005weregrantedatanexercisepricepershareequaltoorgreaterthanthefairmarketvalueoftheCarnivalCorporation
commonstockandCarnivalplcordinarysharesonthedateofgrant.Generallyemployeeoptionseithervestevenlyoverfiveyears
orattheendofthreeyears.OuremployeeoptionsgrantedpriortoOctober2005haveaten-yeartermandthoseoptionsgranted
thereafterhaveaseven-yearterm.Sincefiscal2001,CarnivalCorporationdirectoroptionsvestevenlyoverfiveyearsandhavea
ten-yearterm.
AcombinedsummaryofCarnivalCorporationandCarnivalplcstockoptionactivityduringtheyearendedNovember30,2006
wasasfollows:
Weighted- Weighted-Average Aggregate
Average Remaining Intrinsic
Shares ExercisePrice ContractualTerm Value(a)
(inyears) (inmillions)
OutstandingatNovember30,2005 .................................. 20,058,252 $39.15
Granted......................................................... 2,401,712 $50.51
Exercised........................................................ (2,309,850) $28.78
Forfeitedorexpired ............................................... (628,115) $41.29
OutstandingatNovember30,2006 .................................. 19,521,999 $42.55 6.0 $156
ExercisableatNovember30,2006 ................................... 9,999,345 $38.18 5.1 $117
(a)TheaggregateintrinsicvaluerepresentstheamountbywhichthefairvalueofunderlyingstockexceedstheoptionexercisepriceatNovember30,2006.
Asofthedatesofexercise,thetotalintrinsicvalueofoptions
exercisedinfiscal2006,2005and2004was$48million,
$37millionand$77million,respectively.AsofNovember30,
2006,therewas$86millionoftotalunrecognizedcompen-
sationcostrelatedtounvestedstockoptions.Thiscostis
expectedtoberecognizedoveraweighted-averageperiod
of1.9years.
RestrictedStockAwardsandRestrictedStockUnits
Restrictedstockawards(“RSAs”)generallyhavethesame
rightsasCarnivalCorporationcommonstock,exceptfor
transferrestrictionsandforfeitureprovisions.Inpriorperiods,
unearnedstockcompensationwasrecordedwithinshare-
holders’equityatthedateofawardbasedonthequoted
marketpriceoftheCarnivalCorporationcommonstockon
thedateofgrant.Infiscal2006,uponadoptionofSFASNo.
123(R),the$13millionofunearnedstockcompensationas
ofNovember30,2005wasrequiredtobechargedagainst
additionalpaid-incapital.RSAshavebeengrantedtocertain
officersandnon-executiveboardmembersandeitherhave
threeorfive-yearcliffvestingorvestevenlyoverfiveyears
afterthegrantdate.Inaddition,CarnivalCorporationand
Carnivalplcgrantrestrictedstockunits(“RSUs”),whichdo
nothaveanexerciseprice,andeithervestevenlyoverfive
yearsorattheendofthreeorfiveyearsafterthegrantdate
andaccruedividendequivalentsoneachoutstandingRSU,
intheformofadditionalRSUs,basedondividendsdeclared.
Theshare-basedcompensationexpenseassociatedwith
RSAsandRSUsisbasedonthequotedmarketpriceofthe
CarnivalCorporationorCarnivalplcsharesonthedateof
grant,andisamortizedtoexpenseusingthestraight-line
methodfromthegrantdatethroughtheearlierofthevesting
dateortheestimatedretirementeligibilitydate.