Document:

EX-10.5

   
 
Exhibit 10.5
 
 
 

 Royal Caribbean Cruises Ltd. (RCL)
 Executive Short-Term Bonus Plan
  
 
 
	 
	 	 	 
	 1.
 	
PURPOSE
 	 1
 
	  	  	  	  
	 2.
 	
ELIGIBILITY
 	 1
 
	  	  	  	  
	 3.
 	 PLAN
OUTLINE
 	 1
 
	  	  	  	  
	  	  	 Participant Bonus
Target
 	 1
 
	  	  	  	  
	  	  	 Bonus Award
Components
 	 1
 
	  	  	  	  
	  	  	 Performance
Levels
 	 2
 
	  	  	  	  
	  	  	 Performance
Measurement
 	 3
 
	  	  	  	  
	 4,
 	 BONUS AWARD
PAYMENTS
 	 3
 
	  	  	  	  
	 5.
 	 PLAN
ADMINISTRATION AND GENERAL PROVISIONS
 	 3
 
	  	  	  	  
	  	  	 Adjustments

	 4
 
	  	  	  	  
	 6.
 	
DEFINITIONS
 	 4
 
	  	  	  	  
	 7.
 	 EFFECTIVE
DATE
 	 5
 

 
 
 
     
 
  

 
 
 1. Purpose
 

 

The Plan is designed to promote the interests of the Company and its
shareholders by enabling the Company to:
  
 
	 (a)  
 	 Attract, retain, and motivate talented leaders;
 

  
 
	 (b)  
 	 Link pay directly to the achievement of the Company’s  short-term,
business, financial, and strategic goals;
 

 
  
 
	 (c)  
 	 Focus leaders on their contribution to annual results enabling them to better manage
the cyclical nature of our business; and,
 

 
  
 
	 (d)  
 	 Reward leaders for the generation of net income and positive cash flow.

 
  
 2. Eligibility
  

Full-time employees at the Vice President level and above are eligible to
participate in this Plan. The Participant must have at least one year of service with the Company, one of its subsidiaries, affiliates or joint ventures. Participants with less than one year of service may receive a pro-rated Bonus
Award.
  
 3. Plan Outline

 
 The Plan is designed to promote short-term outstanding performance among its Participants and reward the
achievement of pre-established goals.
  

Participant Bonus Target

 
 Participants in the Plan have a Bonus Target expressed as a percentage of their annual base salary. The Bonus Target percentage assigned to each position will depend on the scope
of responsibility, market comparison and level of position within the organizational structure.  Management and/or the Compensation Committee, when appropriate, will determine the Target Bonus percentage of the Participants. In special
circumstances the Bonus Target may be expressed as a fixed amount of cash.
  

Bonus Award Components

 
 The Bonus Award may be tied to various Performance Components, each one with a specific relevance or Weight according to each Participant’s role and level with the
Company.  The following is a list of components that may be taken into consideration when determining the award:
  

Corporate Performance: The Weight assigned to this component of the Bonus Award is determined by Management, and/or the Compensation Committee, when
appropriate. The Corporate Performance Component is measured by one or more financial and/or operational metrics, predetermined by the Compensation Committee, which represent relevant measures for overall Company
performance.
  
 
 1
 

  
 
 
  
 

Brand Performance: The Weight assigned to this component of the Bonus Award is determined by Management, and/or the Compensation Committee, when
appropriate. The Brand Performance Component is measured by one or more financial and/or operational metrics, which are relevant in a specific Plan Year based on the Brand’s business or operating plan.

 
 Individual Performance: The Weight assigned to the Individual Performance Component will be determined by Management, and/or the Compensation Committee,
when appropriate, and will measure predetermined individual and/or departmental goals.
  

The targets of the above Performance Components are established at the
beginning of the Plan Year, and communicated accordingly. In all cases, the sum of the components’ assigned weights should equal 100% of the Bonus Target level.

 
 At the end of the Plan Year, the Company, Brand and Individual results will be assessed, and bonus amounts will be calculated based on results achieved for each Performance
Component.
  
 The Compensation Committee will establish individual goals for the Company’s Chairman and Chief Executive Officer (CEO).  As appropriate, the Chairman and CEO
will approve the objectives of the senior management team (Senior Vice Presidents and Above) and make recommendations to the Compensation Committee regarding their individual performance.

 
 Performance Levels
  

The Plan performance levels range from 0% – 300% for Corporate and
Brand Performance and 0% – 200% for Individual Performance. The Bonus Target is the bonus amount the Participant
may earn if all Performance Components are met as planned. An achievement of all Bonus Components at 100% or at Plan would result in achieving the Target Award. However, the Plan recognizes different levels of achievement, with different payout
levels, as identified below:
  
 
	 ●  
 	 Minimum Performance: Each Component has a minimum acceptable level of Performance that must be met before Bonus Awards are made payable. All Components
start at 0% of achievement, and gradually start incremental steps to approach Plan Performance or Target level payment.
 

 

 
 
	 ●  
 	 Plan Performance: The expected performance level for each Performance Component.  At Plan, the participant may receive 100% of the bonus target.
 

 

 
 
	 ●   
 	 Maximum Performance: The highest potential award level representing superior results. Above Plan performance will have incremental payout steps beyond
the set Target until it reaches 300% of the bonus target.
 

 
  

If results achieved are between the performance levels, (i.e., Minimum,
Plan or Maximum), bonus percentages may increase or decrease. For example, if results achieved are between plan and the maximum levels, bonus percentages could be from 100% to 300%, depending on the actual results and payout levels. Conversely, if
results achieved are below plan, bonus percentages may range between 0 and 99%.
  

  2  
 
   
 

  
 
 Performance
Measurement
  
 At the beginning of each Plan Year, the Compensation Committee and Management will discuss and agree on the appropriate Minimum, Plan and Maximum levels of Corporate and Brand
Performance (financial and/or operational metrics).
  

Participants will have specific individual and/or departmental goals set
through the Company’s Performance Management process. Each Plan Year these goals will be reviewed and approved by Management and/or the Compensation Committee, when appropriate, to ensure they are aligned with the Company’s overall
business objectives. Objectives may be either quantitative, qualitative or both.
  

4. Bonus Award Payments

 
 The Company will annually assess the results against the set goals for each of the Plan Performance Metrics. If the Company, Brand, or the Individual has achieved at least the
minimum goal for any of the Performance Metrics, the Participant may be eligible to receive a Bonus Award.
  

Bonus Awards will normally be payable as soon as possible after the
determination of year-end audited financial results, after approval by the Compensation Committee. It is the intention of the Company that Bonus Award payments, under this Plan will not be subject to Section 409(A) of the Internal Revenue
Code.  Bonus Awards will be paid in cash and will be calculated using the Participant’s base salary on December 31.

 
 If the Participant voluntarily leaves the Company before the Bonus Award is made, the bonus is forfeited. In the case of involuntary termination of employment, retirement,
permanent disability, death, lay-off, or transfer to an affiliate of the Company, a pro-rata share of the Bonus Award for the year may be made at the sole discretion of Management and/or the Compensation Committee, when appropriate.

 
 If the Participant is on a leave of absence (LOA) the bonus may be pro-rated for the portion of the Plan Year that was worked.

 
 Notwithstanding any other provision of this Plan, the issuance of Bonus Awards is at the sole discretion of Management and/or the Compensation Committee, when
appropriate.  The Compensation Committee at its sole discretion, may increase, decrease or withhold Bonus Awards.
  

5. Plan Administration and 

General Provisions

 
 The Compensation Committee shall administer the Plan and make such decisions as it deems necessary or advisable, to implement the Plan. Decisions of the Compensation Committee
shall be final and binding on all parties who have an interest in the Plan.
  

The Board of Directors may at any time, at its discretion, amend, suspend
or terminate the Plan, provided that such action shall not adversely affect rights and interests of Plan
  

 
3
 
 
 
 
 
  
 
 Participants to individual bonuses awarded prior to such amendment, suspension or termination.

 
 No amounts awarded or accrued under this Plan shall actually be funded, set aside, or otherwise segregated prior to payment.

 
 No Plan Participant shall have the right to alienate, pledge or encumber any interest in this Plan, and such interest shall not (to the extent permitted by law) be subject in any
way to the claims of the employee’s creditors or other process of law.
  

Neither the establishment nor administration of this Plan, nor any
provision of this Plan, shall be construed to grant any person the right to remain employed by the Company or its subsidiaries. Rather, each employee will be employed “at will,” which means that either such employee or the Company may
terminate the employment relationship at any time and for any reason, with or without cause.
  

This Plan document is the full and complete agreement between the
Eligible Participants and the Company on the terms described herein.
  

Adjustments

 
 The cruise line industry, and the performance of the Company, can be influenced by events that are clearly outside the bounds of Management’s ability to control. Examples
of such events are acts of war, terrorism, or volatility in oil prices. At the end of each year, the Compensation Committee shall consider whether and to what extent such events have influenced the Company’s results and, as a result, may
adjust Bonus Awards to reflect its assessment of the impact of such events.
  

6. Definitions

 
 Bonus Award: Discretionary annual cash payment determined as a percentage of base pay and based on performance as defined by the
Plan.
  
 Bonus Target: The Participant’s anticipated level of bonus award if Plan performance is met for each Performance Component.
This is determined by Management and/or the Compensation Committee, when appropriate, and is normally established as a percentage of base salary.

 
 Company: Royal Caribbean Cruises Ltd. (RCL)

 
 Compensation Committee: The Compensation Committee of the Company’s Board of Directors.  The Compensation Committee
may delegate to senior management the authority to make certain decisions relating to lower level management in which case the reference to Compensation Committee shall mean its delegate.

 
 Corporate Performance: The actual results of the Company vis-à-vis the metrics established for the Plan
Year.
  
 Employee: An individual who is employed by the Company, its subsidiaries, or joint ventures
(“affiliate”).
  

Management: Executives employed by the Company who collaborate with the
Compensation Committee on executive compensation programs.
  

  4
 

  
 
 
 Maximum Performance: The highest performance level for which funds will be set aside to pay a bonus under the Plan. The purpose for
establishing a maximum is to protect the shareholders from an unforeseen windfall.
 
  

Minimum Performance: The minimum acceptable performance level for
consideration to pay a bonus under the Plan.
  

Participant: Any employee selected to be eligible to receive a benefit
from this Plan.
  

Performance Components: Measures used by the Plan to determine a
Participant’s bonus award; may include Corporate, Brand, and/or Individual.
  

Plan: The Executive Short-Term Bonus Plan.

 
 Plan Performance: The target level of each Performance Metric that is expected by the Plan.

 
 Plan Year: Each year for which the Plan is authorized; generally the Plan year runs from January 1 – December
31.
  
 Subsidiary or Joint Venture (“affiliate”): Any business entity; regardless of whether organized as a corporation, limited liability
company, partnership or any legal form, in which the Company has (i) an ownership of 50% or greater, or (ii) in the sole discretion of the Committee, a significant interest.

 
 Weight: The percentage applied to each Performance Component to determine the amount of the bonus award.

 
 7. Effective Date
  

This plan shall become effective on January 1, 2009.

 
 IN WITNESS WHEREOF, the Company has executed this Plan as of the 12th day of September, 2008, as amended on the 22 day of September
2011.
  
 
	  	  	  	ROYAL CARIBBEAN CRUISES LTD.
	  	  	  	  
	 Attest:
 	 /s/ Bradley H. Stein
 	   
By:
 	 /s/ Maria R. Del Busto
 
	  	 Bradley H. Stein

	  	 Maria R. Del Busto

	  	 Senior Vice
President, General Counsel/
 	 Vice President and Global
Chief
 
	  	
Secretary
 	  	 Human Resources
Officer
 

 
  
 
 5EX-10.1

 EXHIBIT 10.1 
 

 
 General Terms for Annual Incentive Plan for Neil A. Schrmisher 

Authority 
 The annual Incentive Plan for
Neil A. Schrimsher (the “Plan”) is established by the Board’s Executive Organization & Compensation Committee (the “Committee”) under the 2007 Long-Term Performance Plan (the “2007 LTPP”). 

Objective 
 The Plan’s objective is
to reward the participant for his contributions toward the achievement of Applied’s business goals. 
 Plan Goals 

The Committee shall establish the Plan’s goals. Notwithstanding the foregoing, in the event of (i) a merger, a consolidation, an acquisition or
divestiture, the issuance or repurchase of a substantial amount of capital stock, a reorganization or restructuring, or any other transaction or series of transactions, or (ii) asset write-downs, or litigation or claim judgments or settlements,
or foreign exchange gains or losses, or (iii) changes in tax laws, accounting principles, or other laws or provisions affecting reported results, or (iv) other extraordinary nonrecurring items, then the Committee, in its sole discretion,
may adjust the Plan goals, in order to prevent diminution or enlargement of the benefits intended to be conferred, in such manner as the Committee determines is equitably required by the changes or events. 

Eligibility for Awards 
 If Plan goals
are met, to be eligible for an award under the Plan, a participant must comply with the terms and conditions of the 2007 LTPP. In addition, except as provided in the 2007 LTPP, the participant must be actively employed by Applied on the last day of
the fiscal year, except that, 
  

	 	•	 	 Participants retiring at age 55 or older under an Applied retirement plan shall be eligible for a prorated award based on date of retirement
(calculated using number of quarters’ and partial quarters’ Plan participation). 

	 	•	 	 Participants who incur a separation from service due to death or disability shall be eligible for a prorated award based on date of separation from
service (calculated using number of quarters’ and partial quarters’ Plan participation). 

 Plan awards are intended
to create an incentive for participants to act in Applied’s best interests. Notwithstanding anything in these terms to the contrary, 
  

	 	•	 	 An award may be terminated or rescinded, and, if applicable, the participant may be required immediately to repay an award issued within the previous
six months, if the Committee determines, in good faith, that during the participant’s employment with Applied or during the period ending six months following the participant’s separation from service, the participant has committed an act
inimical to Applied’s interests. Acts inimical to Applied’s interest shall include willful inattention to duty; willful violation of Applied’s published policies; acts of fraud or dishonesty involving Applied’s business;
solicitation of Applied’s employees, customers or vendors to terminate or alter their relationship with Applied to Applied’s detriment; unauthorized use or disclosure of information regarding Applied’s business, employees, customers,
or vendors; and competition with Applied. All determinations by the Committee shall be effective at the time of the participant’s act. 

  

	 	•	 	 The Committee may, in its sole discretion, require a participant immediately to repay cash issued pursuant to the award within the previous 36 months
(or any proceeds thereof) if (1) Applied restates its historical consolidated financial statements and (2) the Committee determines, in good faith, that (a) the restatement is a result of the participant’s, or another executive
officer’s, willful misconduct that is unethical or illegal, and (b) the participant’s earnings pursuant to the award were based on materially inaccurate financial statements or materially inaccurate performance metrics that were
invalidated by the restatement. 

 The provisions of this section are a fundamental term of the award. 

Change in Control 
 Notwithstanding the
foregoing, in the event the participant’s employment with Applied is terminated during the fiscal year, following any Change in Control of Applied, either by the participant for “Good Reason” or by Applied “Without Cause”,
then the award shall be deemed to be earned at the target incentive value, prorated based on the number of calendar days elapsed in the fiscal year through the date of termination. 
 For purposes of this award, “Cause” shall mean (i) the willful and continued failure by the participant to perform substantially the participant’s duties with Applied or one of its
affiliates (other than for disability or Good Reason), after a written demand for substantial performance is delivered to the participant by the Board or the Chief Executive Officer of Applied which specifically identifies the manner in which the
Board or Chief Executive Officer believes that the participant has not substantially performed the participant’s duties, or (ii) the willful engagement by the participant in illegal conduct or gross misconduct involving moral turpitude
that is materially and demonstrably injurious to Applied; 

 
provided, however, that no act or failure to act shall be considered “willful” unless it is done, or omitted to be done, in bad faith or without the participant’s reasonable
belief that such action or omission was in the best interests of Applied. Any act, or failure to act, based upon authority given the participant pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive
Officer or a senior officer of Applied or based upon the advice of counsel for Applied shall be conclusively presumed to be done, or omitted to be done, in good faith and in the best interests of Applied. Termination of the participant’s
employment with Applied shall not be deemed to be for Cause unless and until there shall have been delivered to the participant a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of
the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the participant and the participant is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, the participant is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail. 
 For purposes of this award, “Good Reason” shall mean (i) a material diminution in the participant’s authority, duties, or responsibilities, (ii) a material diminution in the
authority, duties, or responsibilities of the person to whom the participant reported immediately prior to a Change in Control, (iii) a material diminution by Applied of the annual base salary that was provided to the participant by Applied
immediately prior to the Change in Control, (iv) a material change in the geographic location where the participant provides service to Applied, or (v) any failure of any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of Applied, by agreement in form and substance satisfactory to the participant, to expressly assume and agree to comply with the terms of this award in the same
manner and to the same extent that Applied would be required to perform it if no such succession had taken place; provided further, that, Good Reason shall not have occurred unless the participant gives Applied notice within 90 days of
the initial existence of the condition claimed by the participant in good faith to constitute Good Reason and Applied has at least 30 days in which to remedy the condition. For purposes of this award, “Good Reason” shall not exist if you
have given your prior written consent to any of the events that would otherwise constitute “Good Reason”. 
 Notwithstanding the
definition in the Plan, a “Change in Control” of Applied shall have occurred for purposes of this award (to the extent this award does not constitute nonqualified deferred compensation within the meaning of Section 409A) when any of
the following events shall occur: 
 (i) Applied is merged, consolidated or reorganized into or with another corporation or
other legal person, and immediately after such merger, consolidation or reorganization less than a majority of the combined voting power of the then-outstanding securities of such corporation or person immediately after such transaction are held in
the aggregate by the holders of Voting Stock (as that term is hereafter defined) of Applied immediately prior to such transaction; 
 (ii) Applied sells all or substantially all of its assets to any other corporation or other legal person, and, immediately after such sale, less than a majority of the combined voting power of the
then-outstanding securities of such corporation or person immediately after such sale are held in the aggregate by the holders of Voting Stock of Applied immediately prior to such sale; 

 (iii) There is a report filed or required to be filed on Schedule 13D or
Schedule TO (or any successor schedule, form or report), each as promulgated pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), disclosing that any person (as the term “person” is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the term “beneficial owner” is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of
securities representing 30% or more of the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors of Applied (“Voting Stock”); 

(iv) Applied files a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing in
response to Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) that a change in control of Applied has occurred pursuant to any then-existing contract or transaction; or 

(v) If during any period of two consecutive years, individuals who at the beginning of any such period constitute the directors of
Applied cease for any reason to constitute at least a majority thereof, provided, however, that for purposes of this clause (v), each director who is first elected, or first nominated for election by Applied’s stockholders by a vote of at least
two-thirds of the directors of Applied (or a committee thereof) then still in office who were directors of Applied at the beginning of any such period will be deemed to have been a director of Applied at the beginning of such period. 

Notwithstanding the foregoing provisions of (iii) or (iv) hereof, unless otherwise determined in a specific case by majority
vote of the Board, a “Change in Control” shall not be deemed to have occurred for purposes of this award solely because (i) Applied, (ii) an entity in which Applied directly or indirectly beneficially owns 50% or more of the
voting securities or interest, or (iii) any Applied-sponsored employee stock ownership plan or any other employee benefit plan of Applied, either files or becomes obligated to file a report or a proxy statement under or in response to
Schedule 13D, Schedule TO, Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) under the Exchange Act, disclosing beneficial ownership by it of shares of Voting Stock, whether in excess of 30% or
otherwise, or because Applied reports that a change in control of Applied has occurred or will occur in the future by reason of such beneficial ownership. 
 In addition, following a Change in Control of Applied, no provision hereof shall operate to limit any economic benefit to which the participant is entitled under this award or the Plan. 

To the extent this award constitutes nonqualified deferred compensation within the meaning of Section 409A, a “Change in Control” of
Applied shall mean a change in the ownership or effective control of Applied or a change in the ownership of a substantial portion of the assets of Applied that constitutes a “change in control” under Section 409A. 

 Other 
 The Committee has the authority to construe the Plan, to establish, amend, and rescind rules and regulations relating to the Plan, and to make all other determinations, in the Committee’s judgment,
necessary or desirable for the Plan’s administration. 
 The Committee may correct any defect or supply any omission or reconcile any
inconsistency with respect to the Plan in the manner and to the extent it shall deem expedient to carry the Plan into effect. All Committee action under these provisions shall be conclusive for all purposes. 

The provisions of these terms and conditions are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in
whole or in part, the remaining provisions shall nevertheless be binding and enforceable. 
 The validity, construction, interpretation, and
enforceability of these terms and conditions shall be determined and governed by the laws of the State of Ohio without giving effect to the principles of conflicts of law. 
 Applied has made no warranties or representations to the participant with respect to the tax consequences (including but not limited to income tax consequences) related to the Plan, and the participant
has been advised to consult with the participant’s attorney, accountant and/or tax advisor regarding the Plan. Moreover, the participant acknowledges that Applied has no responsibility to take or refrain from taking any actions in order to
achieve a certain tax result for the participant. 
 (October 2011)

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