Supplemental Executive Retirement Plan



 






EXHIBIT 10.3




ROYAL CARIBBEAN CRUISES LTD.



SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN




AMENDED AND RESTATED THROUGH DECEMBER 6, 2005




 









 








ROYAL CARIBBEAN CRUISES LTD.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

AMENDED AND RESTATED THROUGH DECEMBER 6, 2005



Royal Caribbean Cruises Ltd. (“Company”) previously established the Royal Caribbean Cruises Ltd.
Supplemental Executive Retirement Plan (“Plan”) for a select group of management or highly
compensated employees, effective January 1, 1994.



The purpose of this Plan is to provide to the selected executives the benefit lost under the Royal
Caribbean Cruises Ltd. et al Retirement Plan due to the change in section 401(a)(17) of the
Internal Revenue Code of 1986, as amended (“Code”) effective January 1, 1994.




 









 







With respect to amounts credited hereunder that are subject to Section 409A of the Internal
Revenue Code of 1986, as amended and any regulations and other official guidance (the “Code”)
(generally, amounts credited on and after January 1, 2005), applicable provision of the Plan
document shall be interpreted to permit the deferral of compensation in accordance with Code
Section 409A, and any provision that would conflict with such requirements shall not be valid or
enforceable. In addition, with respect to amounts credited hereunder that are not subject to
Section 409A (generally, amounts credited before January 1, 2005) (“grandfathered funds”), it is
intended that the rules applicable under the Plan as of December 31, 2004, and not Code Section
409A and related official guidance, shall apply with respect to such grandfathered funds.




 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	Page	 
	 
	ARTICLE 1

	 	DEFINITIONS
	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE 2

	 	PARTICIPATION IN THE PLAN
	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE 3

	 	PLAN BENEFITS AND VESTING
	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE 4

	 	MAINTENANCE, INVESTMENT AND
VALUATION OF
PARTICIPANT ACCOUNTS
	 	 	3	 
	 
	 	 	 	 	 	 
	ARTICLE 5

	 	BENEFITS
	 	 	4	 
	 
	 	 	 	 	 	 
	ARTICLE 6

	 	ADMINISTRATION
	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE 7

	 	CLAIMS PROCEDURE
	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE 8

	 	AMENDMENT AND TERMINATION
	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE 9

	 	MISCELLANEOUS
	 	 	7	 
	 
	 	 	 	 	 	 
	SIGNATURE

	 	 	 	 	8	 






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ARTICLE 1



DEFINITIONS



For purposes of the Plan, the following words and phrases shall have the following meanings unless
a different meaning is plainly required by the context.





	1.1	 	Account means a recordkeeping source from which Plan benefits are determined.
	 
	1.2	 	Administrator or Plan Administrator means the Company.
	 
	1.3	 	Beneficiary means the person, persons, trust or other entity a Participant designates by
written revocable designation filed with the Company to receive payments in the event of his
death.
	 
	1.4	 	Board means the Company’s Board of Directors or a committee thereof.
	 
	1.5	 	Code means the Internal Revenue Code of 1986, as amended.
	 
	1.6	 	Company means Royal Caribbean Cruises Ltd. and any successor thereto, and for purposes of
determining eligibility to participate in the Plan, any affiliated company which is a member
of a controlled group of corporations within the meaning of section 1563(a) of the Code with
Royal Caribbean Cruises Ltd. which adopts this Plan with the consent of the Company.
	 
	1.7	 	Compensation means an Eligible Employee’s compensation from the Company as defined in the
Retirement Plan.
	 
	1.8	 	Disability means an illness or injury as defined as a Permanent Disability in the Retirement
Plan, subject to the requirements of Code Section 409A.
	 
	1.9	 	Effective Date means January 1, 1994.
	 
	1.10	 	Eligible Employee means each employee of the Company eligible to participate in the Plan in
accordance with the provisions of Section 2.1 hereof.
	 
	1.11	 	Participant means






	 	A.	 	An Eligible Employee who participates in the Plan in accordance with the terms
hereof.
	 
	 	B.	 	Each other Eligible Employee or former Eligible Employee for whom an Account is
maintained.






	1.12	 	Plan means the Royal Caribbean Cruises Ltd. Supplemental Executive Retirement Plan as
described in this instrument, as amended from time to time.
	 
	1.13	 	Plan Year means the twelve (12) consecutive month period beginning on each January 1 and
ending on the following December 31.




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	1.14	 	Retirement Plan means the Royal Caribbean Cruises Ltd. et al Retirement Plan as amended from
time to time.
	 
	1.15	 	Termination of Employment means the Participant’s severance from service with the Company for
any reason.
	 
	1.16	 	Valuation Date means the last business day of each Plan Year.
	 
	1.17	 	Vesting Service means Plan Years of Service counted in determining a Participant’s
entitlement to benefits as described in Section 3.2 of the Plan.





ARTICLE 2



PARTICIPATION IN THE PLAN





	2.1	 	Eligibility to Participate. Those employees of the Company who participate in the Retirement
Plan and whose Company contribution under the Retirement Plan is decreased during any Plan
Year beginning on or after January 1, 1994, because of the application of section 401(a)(17)
of the Code shall participate in the Plan. It is the intention of the Company that this Plan
constitute a “top hat” plan and therefore only those employees who are determined to be within
a select group of management or highly compensated shall be entitled to participate in the
Plan.
	 
	2.2	 	Procedure For and Effect of Admission. Each Eligible Employee shall complete such forms and
provide such data as reasonably required by the Company including Beneficiary designation
forms and payment of benefit forms. By becoming a Participant, an Eligible Employee shall be
deemed conclusively to have assented to the provisions of this Plan and all amendments hereto.
	 
	2.3	 	Cessation of Participation. A Participant shall cease to be an active participant on the
earlier of:






	 	A.	 	the date on which the Plan terminates, or
	 
	 	B.	 	the date on which he ceases to be an Eligible Employee.






	 	 	A former active participant will be deemed a Participant for all purposes except with
respect to the right to receive “contributions”, as long as he retains a Plan Account.





ARTICLE 3



PLAN BENEFITS AND VESTING





	3.1	 	Plan Benefits. The purpose of the Plan is to provide Participants with the Company
contributions that they would have received under the Retirement Plan, but for the reductions
contained in section 401(a)(17) of the Code beginning January 1, 1994. The IRS is expected to
issue an indexed maximum compensation rate under section




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	 	 	401(a)(17) of the Code, determined without regard to the reduction to $150,000 through 1996,
on account of a grandfather provision for collectively bargained plans. For instance, this
amount in 1994 is $242,280 for collectively bargained plans. As indexed, this amount shall
be referred to as the “Grandfathered Limit”.
	 
	 	 	Effective with the Plan Year that begins January 1, 1994, the Plan benefit for each
Participant equals the difference between the Company contribution that would have been
provided for that Participant under the Retirement Plan had the compensation limit under
section 401(a)(17) of the Code continued to be adjusted without regard to the reduction to
$150,000 beginning in January 1994, and the actual Company contribution provided under the
Retirement Plan for that Participant.
	 
	 	 	The Plan shall use the Grandfathered Limit for purposes of determining the benefit under the
Plan. When the IRS no longer publishes the Grandfathered Limit, then the maximum
compensation in each year thereafter under the Plan shall be determined by multiplying the
compensation limit under the Retirement Plan for any year by a fraction, the numerator of
which is the Grandfathered Limit and the denominator of which is the section 401(a)(17)
limit under the Retirement Plan, both determined as of the last year in which the IRS
publishes the Grandfathered Limit.
	 
	 	 	Thus, for instance, the benefit to be accrued under the Plan for 1994 for a Participant with
Compensation equaling or exceeding $242,280 will equal the difference between $242,280 (the
1994 Grandfathered Limit) and $150,000 (the 1994 401(a)(17) limit mandated by OBRA 93) times
the Participant’s applicable contribution level under the Retirement Plan (8 to 12 percent
depending on the Participant’s years of service with the Company). If the IRS ceases
issuing the Grandfathered Limit after 1996, and in 1996, the Grandfathered Limit is $250,000
and the 401(a)(17) limit is $170,000, then the ratio to be used thereafter is 1.666 percent
(250,000/150,000) of the section 401(a)(17) limit in effect each Plan Year. If in 1997, the
401(a)(17) limit is $160,000, then the Plan’s maximum compensation will be $266,560 (1.666
times $160,000).
	 
	3.2	 	Vesting. Benefits provided under the Plan shall be vested in accordance with Article VII of
the Retirement Plan. A Participant shall be credited with the same Vesting Service as under
the Retirement Plan.





ARTICLE 4



MAINTENANCE, INVESTMENT AND VALUATION OF



PARTICIPANT ACCOUNTS





	4.1	 	Establishment of Accounts. The Administrator shall establish and maintain a separate Account
in the name of each Participant, to which it shall credit all amounts allocated in accordance
with Section 3. Participants shall receive an annual statement reflecting their account
balance.




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	4.2	 	Investment Obligation of the Company. Benefits are payable as they become due irrespective
of any actual investments the Company may make to meet its obligations. To the extent a
Participant or any person acquires a right to receive payments from the Company under this
Plan, such right shall be no greater than the right of any unsecured creditor of the Company.
Neither this Plan nor any action taken pursuant to the terms of this Plan shall be considered
to create a fiduciary relationship between the Company and the Participants or any other
persons or to require the establishment of a trust in which the assets are beyond the claims
of any unsecured creditor of the Company or to require the Company to segregate in any other
manner any assets for the purpose of satisfying its obligations hereunder.
	 
	4.3	 	Earnings. The Administrator shall credit or debit each separate Account at the same rate as
earned by the Retirement Plan as soon as practicable after that rate is determined for each
Plan Year under the Retirement Plan. In the year that a Participant’s benefit distributions
commence, the Administrator shall credit a Participant’s Account through the last day of the
month preceding the benefit commencement date, with the rate earned by the Retirement Plan for
the same period.





ARTICLE 5



BENEFITS





	5.1	 	Payment of Benefit. Except in the event of death, all elections must be made at least twelve
months prior to the commencement of payment; provided, however, that on and after January 1,
2005, all elections must be made in accordance with the requirements of Code Section 409A and
related official guidance. A Participant’s election under the Plan may be different than such
Participant’s election made under the Retirement Plan.






	 	A.	 	Form of Payment upon death, Disability or other Termination of Employment
	 
	 	 	 	All benefits shall be payable in the form of a single lump sum.
	 
	 	B.	 	Commencement of Payment
	 
	 	 	 	At the election of the Participant, upon death, Disability or other Termination of
Employment, the benefit described in Subsection A shall be paid either (1) as soon
as administratively possible following such event; or (2) on the January 1 following
the year in which such event occurs; or (3) as soon as administratively possible
following the first day of the month after attainment of age 65, or if later,
Termination of Employment. Other than by reason of death, if a Participant fails to
make an election under this subparagraph B or otherwise does not have an election on
file as of a date an election is required by Code Section 409A and related official
guidance, his benefit shall be paid twelve months and one day (or as soon thereafter
as is reasonably practicable) after his Disability or other Termination of
Employment.
	 
	 	C.	 	Change in Time of Payment Prior to Commencement




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	 	 	 	With respect to deferred amounts that are not subject to Code Section 409A
(generally, amounts deferred prior to January 1, 2005), a Participant may elect (on
election forms designated by the Company) prior to commencement a timing of payment
in lieu of the timing elected pursuant to Section 5.1(B) above provided such
election shall not take effect until the date that is one year after the election is
made (provided the Participant is an employee on such date).
	 
	 	 	 	With respect to deferred amounts that are subject to Code Section 409A (generally,
amounts deferred on and after January 1, 2005), a Participant may elect (on election
forms designated by the Company) prior to commencement a timing of payment in lieu
of the timing elected pursuant to Section 5.1(B) above; provided, however, that:






	 	(i)	 	payment under such new election shall not be earlier than the
date that is five years after the original distribution date; and
	 
	 	(ii)	 	such election shall not take effect until the date that is one
year after the election is made (provided the Participant is an employee on
such date); and
	 
	 	(iii)	 	such election is at least twelve (12) consecutive months prior
to the date on which such distribution would otherwise have been made or
commenced.






	 	D.	 	Distribution for Specified Employees Upon Termination of Employment
	 
	 	 	 	Notwithstanding anything herein to the contrary, and solely with respect to funds
that are subject to Code Section 409A (generally, amounts deferred on and after
January 1, 2005), payment shall not be made to any Participant who is a key employee
(defined below) as a result of the Participant’s Termination of Employment before
the date that is not less than six months after the date of Termination of
Employment (or, if earlier, the date of death of the Participant). For this
purpose, a key employee is a “key employee” as defined in Code Section 416(i). The
Company may establish procedures to implement this Plan provision.






	5.2	 	Beneficiary Designation.






	 	A.	 	Each Participant may designate a Beneficiary to receive the benefits payable in
the event of the Participant’s death, and designate a successor Beneficiary to receive
any benefits payable in the event of the death of any other Beneficiary.
	 
	 	B.	 	A Participant may change a Beneficiary designation at any time. All
Beneficiary designations and changes shall be made on an appropriate form as designated
by the Plan Administrator and filed with the Plan Administrator.
	 
	 	C.	 	If no person shall be designated by the Participant, or if the designated
Beneficiary shall not survive the Participant, payment of the Participant’s Account
shall be made to the Participant’s estate.




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	5.3	 	Tax Withholding. To the extent required by the law in effect at the time benefits are
distributed pursuant to this Section 5, the Company shall withhold any taxes that it is
required to withhold by the federal or any state or local government from payments made
hereunder.





ARTICLE 6



ADMINISTRATION





	6.1	 	Appointment of Administrator. The Company shall serve as the Administrator.
	 
	6.2	 	Administrator’s Responsibilities. The Administrator is responsible for the day to day
administration of the Plan. The Administrator may appoint other persons or entities to
perform any of its fiduciary functions.
	 
	6.3	 	Records and Accounts. The Administrator shall maintain or shall cause to be maintained
accurate and detailed records and accounts of Participants and of their rights under the Plan
and of all investments, receipts, disbursements and other transactions.
	 
	6.4	 	Liability. The Company shall not be liable to any person for any action taken or omitted in
connection with the administration of this Plan unless attributable to the fraud or willful
misconduct on the part of a director, officer or agent of the Company.
	 
	6.5	 	Payment of Expenses. All expenses incurred in the operation or administration of this Plan
shall be paid by Company.
	 
	6.6	 	Substitute Payee. If a Participant or Beneficiary entitled to receive any benefits hereunder
is in his minority, or is declared legally, physically, or mentally incapable of personally
receiving and receipting any distribution, the Company may make distributions to a legally
appointed guardian or to such other person or institution as, in the judgment of the Company,
is then maintaining or has custody of the payee.





ARTICLE 7



CLAIMS PROCEDURE





	7.1	 	Claims Procedures. The Administrator shall establish a claims procedure and shall afford a
reasonable opportunity to any Participant whose claim for benefits has been denied for a full
and fair review of the decision denying such claim. The claims procedure shall provide for a
notice of denial of a claim to be received by a claimant within a reasonable period, not to
exceed ninety (90) days, following the filing of a claim. The notice shall provide the reason
for the denial, references to the Plan provisions on which the denial is based, a description
of additional information necessary to perfect a claim and the steps required to submit a
claim for review. The period to request a review must be for at least sixty (60) days after a
receipt of notice of denial of a claim. A decision on review shall be made within sixty (60)
days after the Plan’s receipt of a request for a review unless special circumstances require a
longer period in which case




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	 	 	the Plan shall have an additional sixty (60) days. The final decision shall be in writing
and shall include specific reasons for the decision and references to Plan provisions.





ARTICLE 8



AMENDMENT AND TERMINATION





	8.1	 	Plan Amendment. The Plan may be amended or otherwise modified by the Board, in whole or in
part, provided that no amendment or modification shall divest any Participant of any amount
previously credited to his Account under Section 3.1 or of the amount and method of crediting
earnings to such Account under Section 4.3 of the Plan as of the date of such amendment.
Notwithstanding anything herein to the contrary, in no event shall any amendment be made in a
manner that is inconsistent with the requirements to avoid adverse federal tax consequences
under Section 409A of the Code.
	 
	8.2	 	Termination of the Plan. The Board reserves the right to terminate the Plan at any time in
whole or in part. In the event of any such termination, subject to Code Section 409A, the
Company shall pay a benefit to the Participant or the Beneficiary of any deceased Participant,
in lieu of other benefits hereunder, equal to the value of the Participant’s Account in the
form and at the benefit commencement date elected by the Participant pursuant to section 5.1
of the Plan. Earnings shall continue to be allocated under Section 4.3 of the Plan after the
termination of the Plan until the Participant’s benefits have been paid in full
notwithstanding the termination of the Plan. Notwithstanding anything herein to the contrary,
in no event shall any termination be made in a manner that is inconsistent with the
requirements to avoid adverse federal tax consequences under Section 409A of the Code.





ARTICLE 9



MISCELLANEOUS





	9.1	 	Supplemental Benefits. The benefits provided for the Participants under this Plan are in
addition to benefits provided by any other plan or program of the Company and the benefits of
this Plan shall supplement and shall not supersede any other plan or agreement between the
Company and any Participant.
	 
	9.2	 	Governing Law. The Plan shall be governed and construed under the laws of the State of
Florida.
	 
	9.3	 	Spendthrift Provision. No benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or change, and any
such action shall be void for all purposes of the Plan. No benefit shall in any manner be
subject to the debts, contracts, liabilities, engagements or torts of any person, nor shall it
be subject to attachments or other legal process for or against any person, except to such
extent as may be required by law.




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	9.4	 	Binding Terms. The terms of this Plan shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, executors, administrators and successors.
	 
	9.5	 	Headings. All headings preceding the text of the several Sections hereof are inserted solely
for reference and shall not constitute a part of this Plan, nor affect its meaning,
construction or effect.
	 
	9.6	 	Rule of Interpretation. Where appropriate, words in the masculine gender shall include the
feminine and neuter genders.
	 
	9.7	 	Limitation of Rights. Neither the establishment of this Plan, nor any modification thereof,
nor the creation of an account, nor the payment of any benefits shall be construed as giving






	 	A.	 	any Participant, Beneficiary, or any other person whomsoever, any legal or
equitable right against the Company unless such right shall be specifically provided
for in the Plan or conferred by affirmative action of the Administrator in accordance
with the terms and provisions of the Plan; or
	 
	 	B.	 	any Participant the right to be retained in the service of the Company, and all
Participants and other agents shall remain subject to termination to the same extent as
if the Plan had never been adopted.






	9.8	 	Severability. Should any provision of the Plan or any regulations adopted thereunder be
deemed or held to be unlawful or invalid for any reason, such fact shall not adversely affect
the other provisions or regulations unless such invalidity shall render impossible or
impractical the functioning of the Plan and, in such case, the appropriate parties shall adopt
a new provision or regulation to take the place of the one held illegal or invalid.





SIGNATURE




     IN WITNESS WHEREOF, an officer of the Company hereby executes this Plan, as amended and
restated through December 6, 2005, as of the 6th day of December 2005.



	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	ROYAL CARIBBEAN CRUISES LTD.
	 
	 	 	 	 	 	 	 	 	 	 
	Attest:

	 	/s/ BRADLEY H. STEIN
	 	 	 	By:
	 	/s/ THOMAS F. MURRILL	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 	 	Bradley H. Stein	 	 	 	Thomas F. Murrill
	 	 	Assistant Secretary	 	 	 	Vice President and
	 	 	 	 	 	 	Chief Human Resources Officer







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