Carnival Cruises 2013 Annual Report Download - page 89

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Table of Contents
In 2012 and 2011, the Committee approved PBS awards to be granted to certain key Carnival Corporation & plc executives. The share-based compensation
expense for these PBS awards is based on the quoted market price of the Carnival Corporation or Carnival plc shares on the date of grant and the probability
of our earnings per share growth over a three-year period being achieved. These PBS awards provide an opportunity to earn from zero to 200% of the number
of target shares underlying the award achieved at the end of the third year. At November 30, 2013, no expense has been recognized on a cumulative basis for
the 2012 and 2011 PBS awards as it is not deemed probable that the performance targets will be met.
In 2013, the Committee approved PBS awards to be granted to certain key Carnival Corporation & plc executives. The share-based compensation expense for
these PBS awards is based on the quoted market price of the Carnival Corporation or Carnival plc shares on the date of grant and the probability of our
annual earnings target for each year over a three-year period being achieved. These PBS awards provide an opportunity to earn from zero to 150% of the
number of target shares underlying the award achieved for each year over a three-year period and may be further increased or decreased by 25% based on our
total shareholder return rank relative to certain peer companies at the end of the third year. All PBS awards will accrue forfeitable dividend equivalents based
on dividends declared.
In 2013, the Committee approved an MBS award to be granted to a senior executive. The MBS award was valued at $4 million as of the date of grant. The
share-based compensation expense for the MBS award is based on the quoted market price of the Carnival Corporation common stock on the date of grant and
the probability of certain market and performance conditions being achieved. One-half of the MBS award is expensed evenly over a three-year period and the
remaining half is expensed evenly over a four-year period.
During the year ended November 30, 2013, TBS and PBS awards’ activity was as follows:
TBS Awards PBS Awards
Shares
Weighted-Average
Grant Date Fair
Value Shares
Weighted-Average
Grant Date Fair
Value
Outstanding at November 30, 2012 3,061,883 $35.89 313,707 $36.08
Granted 1,253,441 $37.82 239,195 $35.68
Vested (1,171,870) $35.00 (29,432) $36.10
Forfeited (116,753) $ 36.71 (12,631) $35.19
Outstanding at November 30, 2013 3,026,701 $37.01 510,839 $35.91
The total grant date fair value of TBS, PBS and MBS awards vested was $42 million, $52 million and $53 million in 2013, 2012 and 2011, respectively.
As of November 30, 2013, there was $42 million of total unrecognized compensation cost related to TBS, PBS, and MBS awards. As of November 30, 2013,
the total unrecognized compensation costs related to TBS, PBS and MBS awards are expected to be recognized over a weighted-average period of 1.7 years,
2.5 years and 3.4 years, respectively.
Stock Option Plans
In 2007 and 2008, the Committee decided to cease granting stock options to our employees and non-executive board members, respectively, and to instead grant
them TBS awards. A combined summary of Carnival Corporation and Carnival plc stock option activity during the year ended November 30, 2013 related to
stock options previously granted was as follows:
Shares
Weighted-
Average
Exercise Price
Weighted-
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value (a)
(in years) (in millions)
Outstanding at November 30, 2012 8,128,215 $47.72
Exercised (642,951) $33.15
Forfeited or expired (3,563,092) $ 49.94
Outstanding and exercisable at November 30, 2013 3,922,172 $48.42 0.9 $-
(a) The aggregate intrinsic value represents the amount by which the fair value of underlying stock exceeds the option exercise price at November 30, 2013.
F-30