February 27, 1998
Securities & Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Attn: Filing Desk
Re: Carnival Corporation
Definitive Proxy Statement
File No. 1-9610
Ladies and Gentlemen:
Enclosed for electronic filing on behalf of Carnival Corporation (the
"Company") pursuant to Rule 14a-6(b) promulgated pursuant to the Securities
Exchange Act of 1934 is the Company's definitive proxy statement and form of
proxy card. The general mailing of the Company's proxy materials will occur
on approximately March 2, 1998. Pursuant to Rule 14a-6(i), no fee is
required to be paid in connection with the filing of the proxy solicitation
materials.
Sincerely,
CARNIVAL CORPORATION
/s/ DOREEN S. FURNARI
Doreen S. Furnari
Assistant General Counsel
Enclosure
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
CARNIVAL CORPORATION
(Name of Registrant as Specified In Its Charter)
________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
__________________________________________________________________
2) Aggregate number of securities to which transaction applies:
__________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (set forth the amount on which
the filing fee is calculated and state how it was determined):
__________________________________________________________________
4) Proposed maximum aggregate value of transaction:
__________________________________________________________________
5) Total fee paid:
__________________________________________________________________
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
_________________________________________________________________
2) Form, Schedule or Registration Statement No.:
_________________________________________________________________
3) Filing Party:
_________________________________________________________________
4) Date Filed:
_________________________________________________________________
[LOGO]
3655 N.W. 87th Avenue
Miami, Florida 33178-2428
____________________
Notice of Annual Meeting of Shareholders
To Be Held April 13, 1998
__________________
To the Shareholders of CARNIVAL CORPORATION:
Notice is hereby given that the Annual Meeting of Shareholders of
Carnival Corporation (the "Company") will be held at The Grand Bay Hotel,
2669 South Bayshore Drive, Miami, Florida at 11 A.M. on April 13, 1998.
Shareholders who desire to attend the Annual Meeting should mark the
appropriate box on the enclosed proxy card. Persons who do not indicate
attendance at the Annual Meeting on the proxy card will be required to
present acceptable proof of stock ownership for admission to the meeting.
The Annual Meeting will be held for the following purposes:
1. To elect fifteen directors to serve until the next annual meeting
and until their successors have been duly elected and qualified;
2. To approve an amendment to the Company's Amended and Restated
Articles of Incorporation to eliminate the Class B Common Stock and
designate a single class of Common Stock;
3. To approve an amendment to the Company's Amended and Restated
Articles of Incorporation to increase the number of authorized
shares of Common Stock;
4. To approve an amendment to the Company's Amended and Restated
Articles of Incorporation to authorize Preferred Stock and grant to
the Board of Directors authority to designate the terms of each
series of Preferred Stock;
5. To approve an amendment to the Company's Amended and Restated
Articles of Incorporation to make certain procedural changes
recently permitted under Panamanian law;
6. To ratify the selection of Price Waterhouse LLP as independent
certified public accountants for the Company for the fiscal year
ending November 30, 1998; and
7. To transact such other business as may properly come before the
meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on February 16,
1998, as the record date for the determination of shareholders entitled to
notice of and to vote at the meeting or any adjournment thereof.
All shareholders are cordially invited to attend the meeting in person.
Whether or not you expect to attend in person, it is requested that you
promptly fill in, sign and return the enclosed proxy card.
By Order of the Board of Directors
/s/ Arnaldo Perez
ARNALDO PEREZ
General Counsel and Secretary
March 2, 1998
[LOGO]
3655 N.W. 87th Avenue
Miami, Florida 33178-2428
_______________
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 13, 1998
_______________
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Carnival Corporation (the "Company")
from holders of the Company's Class A Common Stock, par value $.01 per share
(the "Class A Common Stock" or "Common Stock"), for use at the Annual Meeting
of Shareholders to be held on April 13, 1998, and any adjournment thereof,
for the purposes set forth in the accompanying Notice of Meeting and
described in detail herein. The first mailing of the proxy material to the
holders of Common Stock is expected to be made on March 2, 1998.
All properly executed proxies will be voted in accordance with the
instructions contained thereon, and if no choice is specified, the proxies
will be voted for the election of the fifteen directors named elsewhere in
this Proxy Statement and in favor of each other proposal set forth in the
Notice of Annual Meeting. Abstentions and "non-votes" are counted as present
in determining the existence of a quorum. Abstentions and "non-votes" will
not have the effect of votes in opposition to a director or "no" votes on
Proposals 2, 3, 4, 5 or 6. A "non-vote" occurs when a nominee holding shares
for a beneficial owner votes on one proposal, but does not vote on another
proposal because the nominee does not have discretionary voting power and has
not received instructions from the beneficial owner.
Any proxy may be revoked by a shareholder at any time before it is
exercised by giving written notice to that effect to the Secretary of the
Company or by signing a later-dated proxy. Shareholders who attend the
Annual Meeting may revoke any proxy previously granted and vote in person.
The Board of Directors has fixed February 16, 1998 as the record date
for determining the shareholders who are entitled to notice of and to vote at
the Annual Meeting. At the close of business on January 12, 1998, the
Company had outstanding 297,360,204 shares of Class A Common Stock. There
are no outstanding shares of the Company's Class B Common Stock, par value
$.01 per share (the "Class B Common Stock"). Holders of such shares are
entitled to vote at the Annual Meeting in the manner described in the next
section.
VOTING
On all matters to come before the Annual Meeting, holders of Class A
Common Stock are entitled to one vote for each share held. Ted Arison, the
founder of the Company, certain members of the Arison family and trusts for
the benefit of Mr. Arison's children (collectively, the "Principal
Shareholders"), beneficially own shares representing approximately 47% of the
voting power of the Common Stock and have informed the Company that they
intend to cause all such shares to be voted in favor of the fifteen nominees
named elsewhere in this Proxy Statement and in favor of Proposals 2, 3, 4, 5
and 6 listed in the accompanying Notice of Meeting. See "Certain Beneficial
Owners" below.
On July 15, 1997, The Micky Arison 1994 "B" Trust (the "B Trust"), a
U.S. trust whose primary beneficiary is Micky Arison, the Company's Chairman
of the Board, exercised its right to convert all of the 54,957,142 shares of
Class B Common Stock held by it into an equal number of shares of Class A
Common Stock. Prior to July 1, 1997, the B Trust had been restricted from
converting such shares under a stockholders agreement with the Company.
Prior to the conversion of the Class B Common Stock, the B Trust was the
controlling stockholder of the Company. The holder of Class B Common Stock
had the power to elect 75% of the directors of the Company and the Class B
Common Stock had five votes per share (as opposed to one vote per share for
the Class A Common Stock) for all other voting matters. As a result of the
conversion of the Class B Common Stock, (i) there are no shares of Class B
Common Stock outstanding, (ii) all holders of Class A Common Stock (including
the B Trust) vote as one class in all elections for directors, and (iii) all
shares of Class A Common Stock (including the shares beneficially owned by
the B Trust) have one vote per share for all other voting matters. As a
result of the conversion, the B Trust beneficially owns 18.5% of the
outstanding Class A Common Stock of the Company. Although the B Trust is not
currently a party to any proxy or voting trust arrangements with respect to
the Class A Common Stock that it holds, the B Trust is not prohibited from
entering into such arrangements in the future.
Certain Beneficial Owners
Set forth below is information concerning the share ownership of all
persons known by the Company to be the beneficial owners of 5% or more of the
297,360,204 shares of Common Stock outstanding as of January 12, 1998, each
executive officer of the Company named in the Summary Compensation Table
which appears elsewhere in this Proxy Statement, each director of the Company
and all directors and executive officers as a group. See footnote (2) below
for a description of the group comprised of members of the Arison family and
other persons and entities affiliated with them.
Amount and
Name and Address of Beneficial Nature of Percent of
Owners or Identity of Group(1) Beneficial Ownership Common Stock
Micky Arison 60,665,080(2)(3) 20.4%
Ted Arison 57,519,600(2)(4) 19.3%
Golda Center
23 Shaul Hamelech Blvd.
Tel Aviv, Israel 64367
Marilyn Arison 1,826,584(2) *
Golda Center
23 Shaul Hamelech Blvd.
Tel Aviv, Israel 64367
MA 1994 B Shares, L.P. 54,957,142(2)(5) 18.5%
1201 North Market Street
Wilmington, Delaware 19899
MA 1994 B Shares, Inc. 54,957,142(2)(5) 18.5%
1201 North Market Street
Wilmington, Delaware 19899
JMD Delaware, Inc. 54,957,142(2)(5) 18.5%
as Trustee for the Micky Arison
1994 "B" Trust
1201 North Market Street
Wilmington, Delaware 19899
MA 1997 Holdings, L.P. 3,251,354(2)(6) 1.1%
1201 North Market Street
Wilmington, Delaware 19899
MA 1997 Holdings, Inc. 3,251,354(2)(6) 1.1%
1201 North Market Street
Wilmington, Delaware 19899
JMD Delaware, Inc. 3,251,354(2)(6) 1.1%
as Trustee for the Micky Arison
1997 Holdings Trust
1201 North Market Street
Wilmington, Delaware 19899
A.H.W. Limited 3,551,354(2) 1.2%
as Trustee for the Shari Arison
Irrevocable Guernsey Trust
c/o Baring Brothers
(Guernsey) Limited
P.O. Box 71
Arnold House, St. Julian's Avenue
St. Peter Port
Guernsey Channel Islands GYI-3DA
Cititrust (Jersey) Limited, 15,042,858(2)(7) 5.1%
as Trustee for the Ted
Arison 1994 Irrevocable Trust
For Shari No. 1
P.O. Box 728, 38 Esplanade,
St. Helier
Jersey, Channel Islands
Kentish Limited 15,042,858(2)(7) 5.1%
c/o Baring Brothers
(Guernsey) Limited,
Arnold House
St. Julian's Avenue,
St. Peter Port
Guernsey Channel Islands GYI-3DA
TAF Management Company 979,505(2) *
as Trustee for the Continued Trust
for Micky Arison
1201 N. Market Street
Wilmington, Delaware 19899
TAF Management Company 2,379,505(2) *
as Trustee for the Continued
Trust for Shari Arison Dorsman
1201 N. Market Street
Wilmington, Delaware 19899
TAF Management Company 2,379,505(2) *
as Trustee for the Continued
Trust for Michael Arison
1201 N. Market Street
Wilmington, Delaware 19899
TAF Management Company 1,700,000(2)(8) *
as Trustee for the Marilyn B.
Arison Irrevocable Delaware Trust
1201 N. Market Street
Wilmington, Delaware 19899
MBA I, L.L.C. 1,700,000(2)(8) *
1201 N. Market Street
Wilmington, Delaware 19899
TAMMS Investment Company 1,826,584(2) *
Limited Partnership
1201 N. Market Street
Wilmington, Delaware 19899
TAMMS Management Corporation 1,826,584(2) *
1201 N. Market Street
Wilmington, Delaware 19899
Andrew H. Weinstein 26,032,727(2)(9) 8.8%
c/o Holland & Knight
701 Brickell Avenue
30th Floor
Miami, Florida 33131
Robert H. Dickinson 196,026 *
Howard S. Frank 320,840(10) *
A. Kirk Lanterman 127,617(11) *
Holland America Line
300 Elliott Avenue West
Seattle, Washington 98119
Meshulam Zonis 263,573 *
Shari Arison 3,000,000(12) 1.0%
Israel Arison Foundation
Golda Center
23 Shaul Hamelech Blvd.
Tel Aviv, Israel 64367
Maks L. Birnbach 31,100(13) *
c/o Fullcut Manufacturers, Inc.
580 Fifth Avenue
New York, New York 10036
Ambassador Richard G. Capen, Jr. 10,201(14) *
6077 San Elijo
Rancho Santa Fe, California 92067
David Crossland 2,563,210 *
c/o Airtours plc
Parkway Three
Parkway Business Centre
300 Princess Road
Manchester M14 7QU
England
James M. Dubin 58,208,496(5)(6) 19.6%
c/o Paul, Weiss, Rifkind,
Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Modesto A. Maidique -- --
Florida International University
Office of the President
University Park Campus
Miami, Florida 33199
William S. Ruben 14,700(15) *
40 E. 88th Street
Apt. 10F
New York, New York 10128
Stuart Subotnick 50,000(16) *
c/o Metromedia Company
215 East 67th Street
New York, New York 10021
Sherwood M. Weiser 33,000(17) *
c/o The Continental Companies
3250 Mary Street
Coconut Grove, Florida 33131
Uzi Zucker 50,000(18) *
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
All directors and officers
as a group(15 persons) 67,325,347 22.6%
__________________
* Less than one percent.
(1) The address of each person named, unless otherwise noted, is 3655 N.W.
87 Avenue, Miami, Florida 33178-2428.
(2) Ted Arison, Micky Arison, Shari Arison and the other Arison family
entities named that own shares of Common Stock have filed a joint
statement on Schedule 13D with respect to the shares of Common Stock
held by such persons. TAMMS Investment Company, Limited Partnership
("TAMMS") owns 1,826,584 shares of Common Stock. TAMMS' general partner
is TAMMS Management Corporation ("TAMMS Corp."), which is wholly owned
by Marilyn Arison, Ted Arison's wife. TAMMS' limited partners are
various trusts established for the benefit of certain members of Ted
Arison's family, including Shari Arison and Marilyn Arison (the "Family
Trusts"). By virtue of the limited partnership agreement of TAMMS,
TAMMS Corp. may also be deemed to beneficially own such 1,826,584 shares
of Common Stock. By virtue of their interests in TAMMS, TAF Management
Company and A.H.W. Limited, as trustees of certain of the Family Trusts,
may be deemed to beneficially own the portion of the 1,826,584 shares of
Common Stock held by TAMMS which corresponds to their respective
partnership interest in TAMMS. Such amounts are included in the number
of shares set forth next to their names in the table above. Because
Marilyn Arison beneficially owns all of the capital stock of TAMMS
Corp., she may be deemed to beneficially own all of the 1,826,584 shares
of Common Stock owned by TAMMS; however, she disclaims beneficial
ownership of 1,310,364 of such shares (those owned by partners of TAMMS
other than TAMMS Corp. and MBA I, L.L.C. ("MBA I")). Because of his
wife's controlling interest in TAMMS (through TAMMS Corp.), Ted Arison
may be deemed to beneficially own all of the 1,826,584 shares of Common
Stock owned by TAMMS; however, Ted Arison disclaims beneficial ownership
of such shares. Because of his position as President of TAMMS Corp.,
Micky Arison may be deemed to beneficially own the 1,826,584 shares of
Common Stock owned by TAMMS; however, Micky Arison disclaims beneficial
ownership of all of such shares which are beneficially owned by the
other limited partners of TAMMS or by TAMMS Corp.
(3) Includes (i) 600,000 shares of Common Stock issuable to Micky Arison
upon his exercise of stock options granted to him in May 1995, (ii)
1,826,584 shares of Common Stock held by TAMMS (see Note 2 above), (iii)
3,251,354 shares of Common Stock held by the MA 1997 Holdings, L.P., and
(iv) 54,957,142 shares of Common Stock held by the MA 1994 B Shares,
L.P., all of which may be deemed to be beneficially owned by Micky
Arison. However, Micky Arison disclaims beneficial ownership of all
such shares owned by TAMMS.
(4) Includes 1,826,584 shares of Common Stock held by TAMMS (see Note 2
above) all of which may be deemed to be beneficially owned by Ted
Arison. However, Ted Arison disclaims beneficial ownership of all such
shares.
(5) MA 1994 B Shares, L.P. ("MA 1994, L.P.") owns 54,957,142 shares of
Common Stock. The general partner of MA 1994, L.P. is MA 1994 B Shares,
Inc. ("MA 1994, Inc."), which is wholly owned by the Micky Arison 1994
"B" Trust, a trust established for the benefit of Micky Arison and his
heirs (the "B Trust"). The sole limited partner of MA 1994, L.P. is the
B Trust. By virtue of the limited partnership agreement of MA 1994,
L.P., MA 1994, Inc. may be deemed to beneficially own all of such
54,957,142 shares of Common Stock. By virtue of the B Trust's interest
in MA 1994, L.P., the B Trust may be deemed to beneficially own all of
such 54,957,142 shares of Common Stock. Under the terms of the
instrument governing the B Trust, Micky Arison has the sole right to
vote and direct the sale of the Common Stock indirectly held by the B
Trust, subject during Ted Arison's lifetime to the consent of the
trustee of the B Trust. The trustee of the B Trust is JMD Delaware,
Inc., a corporation wholly owned by James M. Dubin. Each of JMD
Delaware, Inc. and Mr. Dubin may be deemed to beneficially own the
Common Stock indirectly held by the B Trust. Each of JMD Delaware, Inc.
and Mr. Dubin disclaims beneficial ownership of all of such shares which
are beneficially owned by the B Trust.
(6) MA 1997 Holdings, L.P. ("MA 1997, L.P.") owns 3,251,354 shares of Common
Stock. The general partner of MA 1997, L.P. is MA 1997 Holdings, Inc.
("MA 1997, Inc."), which is wholly owned by the Micky Arison 1997
Holdings Trust, a trust established for the benefit of Micky Arison and
his heirs (the "MA 1997 Trust"). The sole limited partner of MA 1997,
L.P. is the MA 1997 Trust. By virtue of the limited partnership
agreement of MA 1997, L.P., MA 1997, Inc. may be deemed to beneficially
own all of such 3,251,354 shares of Common Stock. By virtue of the MA
1997 Trust's interest in MA 1997, L.P., the MA 1997 Trust may be deemed
to beneficially own all of such 3,251,354 shares of Common Stock. Under
the terms of the instrument governing the MA 1997 Trust, Micky Arison
has the sole right to vote the Common Stock indirectly held by the MA
1997 Trust. The trustee of the MA 1997 Trust is JMD Delaware, Inc., a
corporation wholly owned by James M. Dubin. Each of JMD Delaware, Inc.
and Mr. Dubin may be deemed to beneficially own the Common Stock
indirectly held by the MA 1997 Trust. Each of JMD Delaware, Inc. and
Mr. Dubin disclaims beneficial ownership of all of such shares which are
beneficially owned by the MA 1997 Trust.
(7) Kentish Limited, an Isle of Man corporation, is the protector of the Ted
Arison 1994 Irrevocable Trust for Shari No. 1 and has certain voting and
dispositive rights with respect to the Common Stock held by such trust.
(8) MBA I owns 1,200,000 shares of Common Stock and a limited partnership
interest in TAMMS (See Note 2 above). MBA I may be deemed to own
500,000 shares of Common Stock held by TAMMS which corresponds to its
respective partnership interest in TAMMS. The Marilyn B. Arison
Irrevocable Delaware Trust (the "Irrevocable Trust") owns a controlling
interest in MBA I; therefore, the Irrevocable Trust may be deemed to
beneficially own all of such 1,700,000 shares of Common Stock.
(9) By virtue of being the sole shareholder of TAF Management Company,
A.H.W. Limited and Kentish Limited, Andrew H. Weinstein may be deemed to
own the aggregate of 26,032,727 shares beneficially owned by such
entities, as to which he disclaims beneficial ownership.
(10) Includes 240,000 shares of Common Stock issuable to Mr. Frank upon his
exercise of options granted to him in May 1995. Includes 4,800 shares
of Common Stock owned by Mr. Frank's wife as to which he disclaims
beneficial ownership.
(11) Includes 4,000 shares held by the Helen K. Lanterman Trust (Mr.
Lanterman is trustee).
(12) Under the terms governing the Shari Arison Irrevocable Guernsey Trust,
Shari Arison has the sole right to vote and direct the sale of the
Common Stock held directly by such trust.
(13) Includes 4,000 shares owned by Trust Under Will of Norman Salit (Mr.
Birnbach is trustee), and 1,000 shares owned by Fullcut Manufacturers
Inc. Employee Pension Fund (Mr. Birnbach is the trustee of such fund),
as to which he disclaims beneficial ownership. Also includes 20,000
shares of Common Stock issuable to Mr. Birnbach upon his exercise of
stock options granted to him in July 1993 and July 1995.
(14) Includes 10,000 shares of Common Stock issuable to Ambassador Capen upon
his exercise of stock options granted to him in April 1994. Also
includes 201 shares of Common Stock owned by Ambassador Capen's wife as
to which he disclaims beneficial ownership.
(15) Includes 10,000 shares of Common Stock issuable to Mr. Ruben upon his
exercise of stock options granted to him in July 1997.
(16) Includes 30,000 shares of Common Stock issuable to Mr. Subotnick upon
his exercise of stock options granted to him in July 1993 and July 1997.
(17) Includes 30,000 shares of Common Stock issuable to Mr. Weiser upon his
exercise of stock options granted to him in July 1993 and July 1997.
Also includes 2,000 shares owned by Mr. Weiser's wife as to which he
disclaims beneficial ownership.
(18) Includes 30,000 shares of Common Stock issuable to Mr. Zucker upon his
exercise of stock options granted to him in July 1993 and July 1997.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be paid by the Company. The Company
will make arrangements with brokerage firms, custodians and other fiduciaries
to send proxy materials to their principals, and the Company will reimburse
them for their mailing and related expenses.
ELECTION OF DIRECTORS
At the Annual Meeting, fifteen directors are to be elected to serve
until the next annual meeting and until their successors are elected and have
qualified. It is the intention of the persons named in the proxy hereby
solicited to vote for the election of the fifteen nominees named below,
unless otherwise specified in the proxy. Each nominee currently serves as a
director of the Company. Should any of these nominees become unable to
accept nomination or election (which is not anticipated), it is the intention
of the persons designated as proxies to vote for the election of the
remaining nominees and for such substitute nominees as the Board of Directors
may designate.
Set forth below are the names of the nominees for the fifteen director
positions to be elected by the holders of Common Stock. With respect to each
nominee, the information presented includes such person's age, the month and
year in which such person first became a director, any other position held
with the Company, such person's principal occupations during the past five
years and any directorships held by such nominee in public or certain other
companies. Information about each nominee's ownership of equity securities
of the Company appears elsewhere in this Proxy Statement.
The election of each of the nominees to the Board of Directors requires
the approval of the majority of the votes cast at the Annual Meeting and
entitled to vote thereon.
The Board of Directors unanimously recommends a vote FOR the election of
each of the nominees named below.
NOMINEES TO BE ELECTED BY THE
HOLDERS OF COMMON STOCK
Micky Arison, age 48, has been Chairman of the Board of Directors since
October 5, 1990 and a director since June 1987. He has been Chief Executive
Officer of the Company since 1979. Micky Arison is Chairman of the Executive
Committee and a member of the Compensation Committee of the Board of
Directors. He is Ted Arison's son. See "EXECUTIVE COMPENSATION --
Compensation Committee Interlocks and Insider Participation" for more
information.
Shari Arison, age 40, was a director from June 1987 until July 1993. Ms.
Arison was reappointed to the Board of Directors in June 1995. Ms. Arison is
a member of the Board of Directors of Bank Hapoalim, the largest bank in
Israel and President and member of the Board of Trustees of the Arison
Foundation, Inc. She is also the Chairman of the Board and part owner of
Shargad Orchanim Ltd., which together with its affiliates, owns and manages
highway service centers in Israel. She is Ted Arison's daughter.
Maks L. Birnbach, age 77, has been a director since July 1990. Mr.
Birnbach has been the owner and Chairman of the Board of Fullcut
Manufacturers Inc., a New York wholesale importer and exporter of diamonds,
for over 40 years. Mr. Birnbach is also a director of the Diamond
Manufacturers and Importers Association located in New York. He is the Vice
Chairman of the American Committee of the Weizmann Institute for Science and
a governor of its Research Institute in Rechovot, Israel. Mr. Birnbach is a
member of the Executive Committee of the Board of Directors.
Ambassador Richard G. Capen, Jr., age 63, has been a director since
April 1994. He is currently a corporate director, author and business
consultant. From 1992 to 1993, Ambassador Capen served as United States
Ambassador to Spain. From 1989 to 1991, Ambassador Capen served as Vice
Chairman of Knight-Ridder, Inc. Ambassador Capen was the Chairman and
Publisher of the Miami Herald from 1983 to 1989. Ambassador Capen is a
member of the Board of Directors of The Wackenhut Corporation and the Economy
Fund and Smallcap Fund of The Capital Group. Ambassador Capen is a member of
the Audit Committee of the Board of Directors.
David Crossland, age 51, was appointed to the Board of Directors in
April, 1996. Since 1972, Mr. Crossland has been the Chairman and a director
of Airtours plc, an integrated leisure travel group in the United Kingdom,
Sweden, Norway, Denmark, Finland, Canada and United States. See
"TRANSACTIONS OF MANAGEMENT AND DIRECTORS WITH THE COMPANY - Transactions
with Airtours and David Crossland."
Robert H. Dickinson, age 55, has been a director since June 1987. Mr.
Dickinson was Senior Vice President -- Sales and Marketing of the Carnival
Cruise Lines division of the Company ("CCL") from 1979 through May 1993.
Since May 1993, Mr. Dickinson has served as President and Chief Operating
Officer of CCL.
James M. Dubin, age 51, was appointed to the Board of Directors in July
1995. Mr. Dubin is a Senior Partner with the law firm of Paul, Weiss,
Rifkind, Wharton & Garrison. Mr. Dubin is also a member of the Board of
Directors of Conair Corporation, an international designer, manufacturer and
marketer of branded consumer products.
Howard S. Frank, age 56, has been Vice Chairman of the Company since
October 1993 and a director since April 1992. He was appointed Chief
Operating Officer in January 1998. From July 1989 to January 1998, he was
Chief Financial Officer and Chief Accounting Officer of the Company. From
July 1975 through June 1989, he was a partner with Price Waterhouse. Mr.
Frank is also a member of the Board of Directors of Pan Am Corporation. Mr.
Frank is a member of the Executive Committee of the Board of Directors.
A. Kirk Lanterman, age 66, is a Certified Public Accountant and has been
a director since April 1992 and Chairman of the Board and Chief Executive
Officer of Holland America Line-Westours Inc. since January 1989. From 1983
to January 1989, he was President and Chief Operating Officer of Holland
America Line-Westours Inc. From 1979 to 1983, he was President of Westours
which merged in 1983 with Holland America Line.
Modesto A. Maidique, age 57, has been a director since April 1994. He
has been President of Florida International University ("FIU") since 1986.
Prior to assuming the presidency of FIU, Dr. Maidique taught at the
Massachusetts Institute of Technology, Harvard University and Stanford
University. Dr. Maidique has also served as Vice President and General
Manager of the Semiconductor Division of Analog Devices, Inc. which he co-
founded in 1969, as President and Chief Executive Officer of Collaborative
Research, Inc., a genetics engineering firm, and as General Partner of
Hambrecht & Quist, a venture capital firm. Dr. Maidique is a director of
National Semiconductor, Inc. Dr. Maidique is a member of the Compensation
Committee and the Plan Administration Committee of the Board of Directors.
William S. Ruben, age 70, has been a director since July 1987. Since
April 1989, Mr. Ruben has been the President and sole shareholder of William
Ruben, Inc., a consulting firm based in New York. Mr. Ruben is a director of
Sales Service America, Inc., a public corporation headquartered in
Alexandria, Virginia. Mr. Ruben is a member of the Audit Committee of the
Board of Directors.
Stuart Subotnick, age 56, has been a director since July 1987. Mr.
Subotnick has been a general partner and the Executive Vice President of
Metromedia Company since July 1986. He was a director of Metromedia Inc., a
predecessor company, from 1982 and its Executive Vice President from 1986.
Prior to 1986, Mr. Subotnick was Senior Vice President -- Finance of
Metromedia Inc. from October 1983 and a member of the Office of the President
from 1982. He is a director of Metromedia International Group, Inc. Mr.
Subotnick is Chairman of the Audit Committee of the Board of Directors.
Sherwood M. Weiser, age 67, has been a director since July 1987. Mr.
Weiser has been, since March 1994, Chairman of the Board and Chief Executive
Officer of CHC International, Inc. (d/b/a Carnival Hotels and Casinos). See
"EXECUTIVE COMPENSATION -- Compensation Committee Interlocks and Insider
Participation" for more information regarding Carnival Hotels and Casinos.
From 1970 to March 1994, Mr. Weiser served as the Chairman and Chief
Executive Officer of The Continental Companies, a diversified real estate
development company engaged primarily in hotel development and management.
Mr. Weiser is a member of the Board of Directors of United National Bank,
Winsloew Furniture, Inc. and Wyndham International, Inc. (formerly Patriot
American Hospitality Operating Co.) and a trustee of the University of Miami.
Mr. Weiser is a member of the Nominating Committee and Chairman of the
Compensation Committee and Plan Administration Committee of the Board of
Directors.
Meshulam Zonis, age 64, has been a director since June 1987. Mr. Zonis
has been Senior Vice President -- Operations of CCL since 1979.
Uzi Zucker, age 62, has been a director since July 1987. Mr. Zucker
joined Bear, Stearns & Co. in 1967 and was a Limited Partner until 1982 and
has been a General Partner thereafter. Mr. Zucker has been a Senior Managing
Director of Bear, Stearns & Co. Inc. ("Bear Stearns") since 1985. He is a
director of Conair Corporation, Jerusalem Economic Corporation Ltd., Alliance
Tire Company Ltd., Industrial Buildings Corporation Ltd. and Tnuport Ltd.
Mr. Zucker is Chairman of the Nominating Committee of the Board of Directors
and a member of the Compensation Committee and Plan Administration Committee
of the Board of Directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Based upon a review of Forms 3 and 4 and amendments thereto furnished to
the Company during and with respect to its most recent fiscal year and upon
written representations from persons known to the Company to be subject to
Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (a "reporting person") that no Form 5 is required to be filed for such
reporting person, no one failed to file, on a timely basis, reports required
by Section 16(a) of the Exchange Act during the fiscal year ended November
30, 1997.
Board and Committee Meetings
During the fiscal year ended November 30, 1997, the Board of Directors
held a total of six meetings. The Board of Directors has established
standing Executive, Audit, Nominating, Compensation and Plan Administration
Committees. During the fiscal year ended November 30, 1997, a quorum of
directors was present at each meeting of the Board and of the Committees.
During the fiscal year ended November 30, 1997, except for Shari Arison and
Modesto A. Maidique, no incumbent director was present in person or by proxy
at fewer than 75% of the aggregate of the total number of meetings of the
Board and the total number of meetings held by all Committees on which he or
she served.
The Executive Committee was established for the purpose of acting in the
stead of the entire Board of Directors during the periods between regular
Board meetings. The Board has delegated to the Executive Committee the power
to act in lieu of and with the powers and privileges granted to the Board,
other than the power to declare dividends or issue shares of capital stock of
the Company. Fourteen meetings of the Executive Committee were held during
the fiscal year ended November 30, 1997.
The Audit Committee was established for the purpose of inspecting the
work and written reports of the Company's internal audit department and
reviewing submissions from and making recommendations regarding the
independent certified public accountants for the Company. Four meetings of
the Audit Committee were held during the fiscal year ended November 30, 1997.
The Nominating Committee was established for the purpose of nominating
for election directors to be elected by the Company's shareholders. Although
the Nominating Committee will consider nominees recommended by shareholders,
the Nominating Committee does not have a specific procedure for the
consideration of nominees recommended by shareholders. One meeting of the
Nominating Committee was held during the fiscal year ended November 30, 1997.
The Compensation Committee was established for the purpose of making
recommendations to the Board of Directors regarding compensation for
independent directors and for senior management. One meeting of the
Compensation Committee was held during the fiscal year ended November 30,
1997 and the Committee acted on one occasion by unanimous written consent.
The Plan Administration Committee was established to administer The 1992
Stock Option Plan, The 1993 Carnival Cruise Lines, Inc. Employee Stock
Purchase Plan, The 1993 Carnival Cruise Lines, Inc. Restricted Stock Plan,
The 1993 Outside Directors' Stock Option Plan and The 1994 Carnival Cruise
Lines Key Management Incentive Plan. Four meetings of the Plan
Administration Committee were held during the fiscal year ended November 30,
1997 and the Committee acted on one occasion by unanimous written consent.
AMENDMENTS TO THE COMPANY'S AMENDED AND RESTATED ARTICLES OF INCORPORATION
The Board of Directors has approved, subject to the approval of the
shareholders of the Company, certain amendments to the Company's Amended and
Restated Articles of Incorporation set forth in the Second Amended and
Restated Articles of Incorporation (the "Second Amended and Restated
Articles"). At the Annual Meeting, the shareholders will be asked to approve
these amendments. The full text of the Second Amended and Restated Articles
is set forth as Appendix A hereto, and readers are urged to refer to it for a
complete description of the proposed amendments.
The amendments described below will not affect in any way the validity
of any currently outstanding stock certificate, the capital structure of the
Company or the listing of any of its securities on any national security
exchange. Shareholders will not be required to surrender or exchange any
share certificates currently held by them.
Elimination of the Class B Common Stock and Designation of a Single Class of
Common Stock
The Board of Directors has approved an amendment to Article 3 of the
Company's Amended and Restated Articles of Incorporation to eliminate the
Class B Common Stock and designate a single class of Common Stock of the
Company. For more information, please see Article 3 of the Second Amended
and Restated Articles set forth in Appendix A hereto. The Amended and
Restated Articles of Incorporation currently authorize 399,500,000 shares of
Class A Common Stock and 100,500,000 shares of Class B Common Stock. There
are presently 297,360,204 shares of Class A Common Stock outstanding and no
shares of Class B Common Stock outstanding.
Prior to its initial public offering, the Company adopted the Amended
and Restated Articles of Incorporation (which included the authorization of
Class B Common Stock) to grant the Arison family (who were the Company's
founders and principal stockholders) supervoting rights with respect to the
management of the affairs of the Company. On July 15, 1997, the B Trust, a
United States trust whose primary beneficiary is Micky Arison, exercised its
right to convert all of the outstanding 54,957,142 shares of Class B Common
Stock into an equal number of shares of Class A Common Stock. As a result of
this conversion, (i) there are currently no shares of Class B Common Stock
outstanding, (ii) all holders of Class A Common Stock (including the B Trust)
vote as one class in all elections for directors, and (iii) all shares of
Class A Common Stock (including the shares held by the B Trust) have one vote
per share for all other voting matters. The Company presently has no
intention of issuing additional shares of Class B Common Stock.
For the reasons stated above, the Board believes that it is in the best
interests of the Company and its shareholders to approve an amendment to the
Company's Amended and Restated Articles of Incorporation to eliminate the
Class B Common Stock and designate a single class of Common Stock.
Approval of the foregoing amendment requires the approval of the
majority of the votes cast at the Annual Meeting.
The Board of Directors unanimously recommends a vote FOR the adoption of
the amendment to the Amended and Restated Articles of Incorporation to
eliminate the Class B Common Stock and designate a single class of Common
Stock.
Increase in Number of Authorized Shares
The Board of Directors has approved an additional amendment to Article 3
of the Company's Amended and Restated Articles of Incorporation to increase
the capital of the Company from Five Million Dollars ($5,000,000) to Ten
Million Dollars ($10,000,000), thereby increasing the number of authorized
shares of Common Stock to 960,000,000 and authorizing the issuance of
40,000,000 shares of Preferred Stock as provided by the Second Amended and
Restated Articles. As explained further below, the Company intends to
reserve 40,000,000 shares as Preferred Stock for future issuance (see
"Authorization of Series of Preferred Stock" below). As indicated above, the
Amended and Restated Articles of Incorporation currently authorize
399,500,000 shares of Class A Common Stock and 100,500,000 shares of Class B
Common Stock. There are presently 297,360,204 shares of Class A Common Stock
outstanding and no shares of Class B Common Stock outstanding. The increase
in the authorized shares of Common Stock provided for in the Second Amended
and Restated Articles will provide the Company the certainty and flexibility
to undertake various types of transactions, including stock splits (in the
form of stock dividends), financings, increases in the shares reserved for
issuance pursuant to stock incentive plans, or other corporate transactions.
The Board of Directors has no immediate plans to issue additional shares of
Common Stock.
For the reasons stated above, the Board believes that it is in the best
interests of the Company and its shareholders to approve an amendment to the
Company's Amended and Restated Articles of Incorporation to increase the
number of authorized shares of Common Stock.
Approval of the foregoing amendment requires the approval of the
majority of the votes cast at the Annual Meeting.
The Board of Directors unanimously recommends a vote FOR the adoption of
the amendment to the Amended and Restated Articles of Incorporation to
increase the number of authorized shares of Common Stock.
Authorization of Preferred Stock
The Board of Directors has approved an additional amendment to Article 3
of the Company's Amended and Restated Articles of Incorporation to authorize
40,000,000 shares of Preferred Stock, par value US$.01 per share ("Preferred
Stock"). For more information, please see Article 3 of the Second Amended
and Restated Articles set forth in Appendix A hereto.
The proposed provisions would vest in the Board of Directors the
authority to designate one or more series of Preferred Stock. Such
provisions are often referred to as "blank check" provisions, as they give
the Board of Directors the flexibility, at any time or from time to time,
without further shareholder approval, to create one or more series of
Preferred Stock and to determine the designations, preferences and
limitations of each series, including, but not limited to, (i) the number of
shares, (ii) dividend rights, (iii) voting rights, (iv) conversion
privileges, (v) redemption provisions, (vi) sinking fund provisions, (vii)
rights upon liquidation, dissolution or winding up of the Company and (viii)
other relative rights, preferences and limitations of such series.
The adoption of this proposal will increase the Company's financial
flexibility. The Board of Directors believes that the complexity of modern
business financing and acquisition transactions requires greater flexibility
in the Company's capital structure than now exists. Preferred Stock will be
available for issuance from time to time as determined by the Board of
Directors for any proper corporate purpose. Such purposes could include,
without being limited to, issuance in public or private sales for cash as a
means of obtaining capital for use in the Company's business and operations,
issuance as part or all of the consideration required to be paid by the
Company for acquisitions of other businesses or properties, and issuance
under employee benefit plans. The availability of Preferred Stock could also
have certain anti-takeover effects as described below. However, the Company
does not presently have any plans, agreements, understandings or arrangements
that will or could result in the issuance of any Preferred Stock.
Until the Board of Directors determines the respective rights of the
holders of one or more series of Preferred Stock, it is not possible to state
the actual effect of the authorization of the Preferred Stock upon the rights
of holders of Common Stock. Some typical effects of such issuance could
include: (i) reduction of the amount otherwise available for payment of
dividends on Common Stock if dividends are payable on the Preferred Stock,
(ii) restrictions on dividends on Common Stock if dividends on the Preferred
Stock are in arrears, (iii) dilution of the voting power of Common Stock if
the Preferred Stock has voting rights, and (iv) restriction of the rights of
holders of Common Stock to share in the Company's assets upon liquidation
until satisfaction of any liquidation preference granted to the holders of
the Preferred Stock.
For the reasons stated above, the Board believes that it is in the best
interests of the Company and its shareholders to approve an amendment to the
Company's Amended and Restated Articles of Incorporation to authorize
Preferred Stock and grant to the Board of Directors authority to designate
the terms of each series of Preferred Stock.
Approval of the foregoing amendment requires the approval of the
majority of the votes cast at the Annual Meeting.
The Board of Directors unanimously recommends a vote FOR the adoption of
the amendment to the Amended and Restated Articles of Incorporation to
authorize Preferred Stock and grant to the Board of Directors authority to
designate the terms of each series of Preferred Stock.
Incorporation of Procedural Changes Recently Permitted Under Panamanian Law
The Board of Directors has approved amendments to Articles 5 and 7 of
the Company's Amended and Restated Articles of Incorporation to provide (i)
for the redomiciliation of the Company to another jurisdiction accepting
redomiciliation, (ii) that the Board of Directors may meet by telephone
conference or any other means of electronic communication and (iii) that the
Board of Directors may adopt resolutions by written consent, signed by a
majority of the Directors. For more information, please see Articles 5 and 7
of the Second Amended and Restated Articles set forth in Appendix A hereto.
The foregoing changes were made possible by recent amendments to the General
Corporation Law of the Republic of Panama intended to improve the operation
of Panamanian corporations. However, the General Corporation Law requires
that these new corporate features be approved by shareholders and
incorporated into the articles of incorporation of Panamanian corporations to
become effective. These features are discussed in more detail below.
The newly revised General Corporation Law of the Republic of Panama now
permits a Panamanian corporation to more easily change its domicile to any
jurisdiction accepting redomiciliation. Under the current Amended and
Restated Articles of Incorporation, if the Company decided in the future to
change its domicile for tax, political or other reasons, it would likely be
necessary to sell and/or transfer its assets, and/or to dissolve the Company.
These are inconvenient and costly endeavors. By incorporating the new
redomiciliation feature into the Second Amended and Restated Articles, the
Company will be permitted to change its domicile and continue its existence
under the laws of another country at any time that it may considered in the
best interests of the Company without the need to sell and/or transfer assets
or dissolve the Company. Redomiciliation by the Company is currently not
under consideration.
The revised General Corporation Law of Panama also now provides more
modern provisions regarding the functioning of the boards of directors of
Panamanian corporations. Until the adoption of the recent amendments,
Panamanian corporations, such as the Company, were not permitted to conduct
Board meetings by telephone or to adopt resolutions by written consents of
the Directors. Matters frequently arise between scheduled quarterly Board
meetings that require action by the Board of Directors. The Board of
Directors believes that the proposed amendments to permit telephonic Board
meetings and actions by written consent of a majority of the Directors will
greatly facilitate and expedite Board actions regarding exigent matters
arising between scheduled quarterly Board meetings.
For the reasons stated above, the Board believes that it is in the best
interests of the Company and its shareholders to approve the amendments to
the Company's Amended and Restated Articles of Incorporation to make certain
procedural changes recently permitted under Panamanian law.
Approval of the foregoing amendments requires the approval of the
majority of the votes cast at the Annual Meeting.
The Board of Directors unanimously recommends a vote FOR the adoption of
the amendments to the Amended and Restated Articles of Incorporation to make
certain procedural changes recently permitted under Panamanian law.
EXECUTIVE COMPENSATION
General
The following table sets forth all compensation awarded to, earned by,
or paid to the Company's Chief Executive Officer and to each of the Company's
four most highly compensated executive officers other than the Chief
Executive Officer.
SUMMARY COMPENSATION TABLE
Long Term Compensation Awards
Annual Compensation Number of All
Other Securities Other
Annual Restricted Underlying Compen-
Name and Compen- Stock Options/ sation
Principal Position Year Salary($) Bonus($) sation($)(1) Awards($)(2) SARs (#)(3) ($)
Micky Arison 1997 501,000 1,100,000 93,000(1) 1,595,625(3) 60,000(4) --
Chairman, CEO 1996 176,000 1,035,000 -- -- -- --
and Director 1995 179,000 1,035,000 -- -- 1,000,000(5) --
Howard S. Frank 1997 408,000 900,000 -- 1,329,688(3) 50,000(4) --
Vice Chairman, COO 1996 187,000 710,000 -- 108,060(6) -- --
and Director 1995 185,000 645,000 -- -- 400,000(5) --
Robert H. Dickinson 1997 413,000 814,000(7) -- 856,250(3) 40,000(8) --
President and COO 1996 189,000 656,000(7) -- 106,299(7) -- --
of CCL and Director 1995 185,000 672,000(7) -- 110,838(7) -- --
A. Kirk Lanterman 1997 214,000 800,000(9) -- -- -- 16,000(10)
Pres. and CEO of 1996 214,000 806,000(9) -- -- -- 15,000(10)
HAL-Westours Inc. 1995 214,000 864,000(9) -- -- -- 15,000(10)
and Director
Meshulam Zonis 1997 308,000 430,000(7) -- 3,678(7) -- --
Sr. VP Oper. and 1996 185,000 420,000(7) -- 36,449(7) -- --
Director 1995 180,000 432,000(7) -- 38,202(7) -- --
__________________
(1) Represents the fair market value of personal use of corporate aircraft.
For the other named executive officers listed in the table, personal
benefits for each executive officer did not exceed $50,000 or 10% of
such executive officer's total annual salary and bonus for the fiscal
years ended November 30, 1997, 1996 and 1995, respectively.
(2) As of November 30, 1997, Messrs. Arison, Frank, Dickinson, Lanterman and
Zonis owned 60,035,079 shares, 51,245 shares, 195,474 shares, 123,616
shares, and 262,216 shares of restricted Common Stock, respectively. At
November 28, 1997, based on the closing price of the Common Stock on
such date, such restricted shares of Common Stock owned by Messrs.
Arison, Frank, Dickinson, Lanterman and Zonis had a value of
$3,245,646,458, $2,770,433, $10,567,815, $6,682,990, and $14,176,053,
respectively. The restricted shares of Common Stock held by such
executive officers have the same rights with respect to dividends and
other distributions as all other outstanding shares of Common Stock.
(3) Represents the value, based on the closing market price of the Common
Stock on the New York Stock Exchange on the date of grant, of 30,000,
25,000 and 20,000 shares of Common Stock issued to Mr. Arison, Mr. Frank
and Mr. Dickinson, respectively, pursuant to the 1993 Carnival Cruise
Lines Restricted Stock Plan and, in the case of Mr. Dickinson, an
Executive Long-Term Compensation Agreement, for fiscal 1997. The shares
vest five years from the date of grant, on January 12, 2003 for Common
Stock issued to Mr. Arison and Mr. Frank and on August 1, 2002 for
Common Stock issued to Mr. Dickinson. The restricted shares of Common
Stock held by Messrs. Arison, Frank and Dickinson have the same rights
with respect to dividends and other distributions as all other
outstanding shares of Common Stock.
(4) Pursuant to the Carnival Cruise Lines, Inc. 1992 Stock Option Plan,
effective January 12, 1998 (the "1998 Arison/Frank Grant Date"), the
Company granted to (i) Micky Arison an option to purchase 60,000 shares
of Common Stock (the "1998 Arison Option") and (ii) Howard S. Frank an
option to acquire 50,000 shares of Common Stock (the "1998 Frank
Option"). The term for each of the 1998 Arison Option and the 1998
Frank Option is ten years, unless expiration occurs earlier due to
termination of employment of Mr. Arison or Mr. Frank, as the case may
be. The exercise price for each of the 1998 Arison Option and the 1998
Frank Option is $52.8125 per share of Common Stock. Subject to
accelerated vesting upon the death or disability of Mr. Arison or Mr.
Frank, as the case may be, the 1998 Arison Option and the 1998 Frank
Option are each exercisable in amounts equal to twenty percent of the
aggregate number of shares underlying the 1998 Arison Option and 1998
Frank Option, as the case may be, on or after the first through fifth
anniversaries of the 1998 Arison/Frank Grant Date. The 1998 Arison
Option and the 1998 Frank Option are exercisable in full with respect to
the aggregate number of shares on or after the fifth anniversary of the
1998 Arison/Frank Grant Date.
(5) Pursuant to the 1992 Option Plan (the "1992 Option Plan"), effective
May 30, 1995 (the "1995 Grant Date"), the Company granted to (i) Micky
Arison, an option to purchase 1,000,000 shares of Common Stock (the
"1995 Arison Option") and (ii) Howard S. Frank, an option to acquire
400,000 shares of Common Stock (the "1995 Frank Option"). The term for
each of the 1995 Arison Option and the 1995 Frank Option is ten years,
unless expiration occurs earlier due to termination of employment of Mr.
Arison or Mr. Frank, as the case may be. The exercise price for each of
the 1995 Arison Option and the 1995 Frank Option is $22.50 per share of
Common Stock. Subject to accelerated vesting upon the death or
disability of Mr. Arison or Mr. Frank, as the case may be, the 1995
Arison Option and the 1995 Frank Option are each exercisable in amounts
equal to twenty percent of the aggregate number of shares underlying the
1995 Arison Option and 1995 Frank Option, as the case may be, on or
after the 1995 Arison/Frank Grant Date and on or after the first through
fourth anniversaries of the 1995 Arison/Frank Grant Date. The 1995
Arison Option and the 1995 Frank Option are exercisable in full with
respect to the aggregate number of shares on or after the fourth
anniversary of the 1995 Arison/Frank Grant Date.
(6) Represents the value, based on the closing market price of the Common
Stock on the New York Stock Exchange on the date of grant, of 3,287
shares of Common Stock issued to Mr. Frank pursuant to the 1993 Carnival
Cruise Lines Restricted Stock Plan for fiscal 1996. The shares vest
five years from the date of grant on January 13, 2002. The restricted
shares of Common Stock held by Mr. Frank have the same rights with
respect to dividends and other distributions as all other outstanding
shares of Common Stock.
(7) Represents payments, a portion of which was paid in shares of the
Company's Common Stock, to Mr. Dickinson and Mr. Zonis pursuant to the
1994 Carnival Cruise Lines Key Management Incentive Plan (the "CCL
Plan") which allows key management employees of the Carnival Cruise
Lines division of the Company to participate in an incentive award pool.
For fiscal 1995 the incentive award pool was 2% of (i) the consolidated
net income of Carnival Cruise Lines division of the Company ("CCL Net
Income") for the fiscal year ended November 30, 1995, minus (ii)
$183,000,000. For fiscal 1996 and 1997, the incentive award pool was
1.75% of (i) the CCL Net Income for the fiscal year ended November 30,
1996 and November 30, 1997, respectively, minus (ii) $183,000,000.
Beginning in 1997, Mr. Dickinson's annual bonus payable pursuant to the
CCL Plan was paid entirely in cash. For all other participants, a
portion of the annual bonus payable pursuant to the CCL Plan is payable
in shares of the Company's Common Stock.
(8) Pursuant to the 1992 Option Plan and an Executive Long-Term Compensation
Agreement (see "Executive Long-Term Compensation Agreement" below),
effective August 1, 1997 (the "Dickinson Grant Date"), the Company
granted to Robert H. Dickinson, the President and Chief Operating
Officer of CCL, an option to purchase 40,000 shares of Common Stock (the
"Dickinson Option"). The term for the Dickinson Option is ten years,
unless expiration occurs earlier due to termination of employment of Mr.
Dickinson. The exercise price for the Dickinson Option is $42.375 per
share of Common Stock. Subject to accelerated vesting upon the death or
disability of Mr. Dickinson, the Dickinson Option is exercisable in
amounts equal to twenty percent of the aggregate number of shares
underlying the Dickinson Option on or after the first through fifth
anniversaries of the Dickinson Grant Date. The Dickinson Option is
exercisable in full with respect to the aggregate number of shares on or
after the fifth anniversary of the Dickinson Grant Date.
(9) Represents amounts payable to Mr. Lanterman pursuant to the Holland
America Line-Westours Inc. ("HALW") 1994-1996 and 1997 Key Management
Incentive Plan (the "HALW Plan") which allowed key management employees
of HALW to participate in an incentive award pool for fiscal 1997, 1996
and 1995 of 3.7% of the consolidated net income of HAL Antillen N.V.
For fiscal 1997, 1996 and 1995, $1,802,000, $1,500,000 and $968,000,
respectively, have been deferred by Mr. Lanterman pursuant to the terms
of a Retirement and Consulting Agreement (see "Retirement and Consulting
Agreement" below).
(10) Represents amounts paid on behalf of Mr. Lanterman pursuant to the
Westours Profit Sharing Plan (the "Profit Sharing Plan") and the
Westours Employee Savings Plan (the "Savings Plan"). The amounts paid
or accrued to Mr. Lanterman under the Profit Sharing Plan in fiscal
1997, 1996 and 1995, were $12,800, $12,000 and $12,000, respectively.
The employer contributions made on behalf of Mr. Lanterman under the
Savings Plan for fiscal 1997, 1996 and 1995, were $3,167, $3,167 and
$3,080, respectively. The Profit Sharing Plan and the Savings Plan are
generally available to all employees of HALW.
Options
The following table sets forth all stock options granted to the
Company's Chief Executive Officer and to each of the Company's four most
highly compensated executive officers other than the Chief Executive Officer.
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
Grant Date
Individual Grants Value
Number of Percent of
Securities Total Options
Underlying Granted to Exercise or Grant Date
Options Employees in Base Price Expiration Present Value
Name Granted (#) Fiscal Year ($/Sh) Date ($)
Robert H.
Dickinson
President 40,000(2) 10% $42.375(3) 8/1/2007 484,400(4)
and COO of
CCL and
Director
_______________
(1) No stock appreciate rights were granted to the executive officers in
fiscal 1997.
(2) The term for the Dickinson Option is ten years, unless expiration occurs
earlier due to termination of employment of Mr. Dickinson. The exercise
price for the Dickinson Option is $42.375 per share of Common Stock.
Subject to accelerated vesting upon the death or disability of Mr.
Dickinson, the Dickinson Option is exercisable in amounts equal to
twenty percent of the aggregate number of shares underlying the
Dickinson Option, on or after first through fifth anniversaries of the
Dickinson Grant Date. The Dickinson Option is exercisable in full with
respect to the aggregate number of shares on or after the fifth
anniversary of the Dickinson Grant Date.
(3) Represents fair market value of Common Stock at date of grant.
(4) In accordance with Securities and Exchange Commission rules, the Black-
Scholes option pricing model was chosen to estimate the Grant Date
Present Value of the options set forth in this table at $12.11 per
share. The Company's use of this model should not be construed as an
endorsement of its accuracy at valuing options. All stock option models
require a prediction about the future movement of the stock price. The
following assumptions were made for purposes of calculating Grant Date
Present Value: average option term of 6 years, volatility of 21.7%,
dividend yield of 1.78% and interest rate of 5.99%. The real value of
the options in this table depends upon the actual performance of the
Company's Common Stock during the applicable period and upon when they
are exercised.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES(1)
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
Fiscal Year End (#) Fiscal Year End ($)
Name Exercisable/Unexercisable Exercisable/Unexercisable(4)
Micky Arison
Chairman, CEO 600,000/400,000(2) 18,937,500/12,625,000
and Director
Howard S. Frank
Vice Chairman, 240,000/160,000(2) 7,575,000/5,050,000
CFO and Director
Robert H. Dickinson
President and COO
of CCL and Director 0/40,000(3) 0/467,500
____________________
(1) No options were exercised by executive officers during fiscal 1997. No
stock appreciation rights are held by any of the named executive
officers.
(2) On May 30, 1998, the third anniversary of the grant date of the 1995
Arison Option and the 1995 Frank Option, additional options to acquire
200,000 and 80,000 shares of Common Stock will become exercisable by
Messrs. Arison and Frank, respectively. The same number of options
shall become exercisable by Messrs. Arison and Frank on the next
anniversary date of the grant date of such options.
(3) On August 1, 1998, the first anniversary of the grant date of the
Dickinson Option, options to acquire 8,000 shares of Common Stock will
become exercisable by Mr. Dickinson. The same number of options shall
become exercisable by Mr. Dickinson on the next four anniversary dates
of the grant date of such options.
(4) The value of the unexercised options is based upon the difference
between the exercise price and the closing price of the Common Stock on
November 28, 1997.
Deferred Compensation Agreements
The Company has entered into deferred compensation agreements with two
named executive officers, Robert H. Dickinson and Meshulam Zonis. The
agreements provide for the payment of an annual deferred compensation benefit
equal to 50% of each employee's annual compensation, payable for 15 years in
equal monthly installments after the employee retires. "Compensation" is
defined as the average of the employee's annual salary and bonuses, up to a
maximum of $400,000 earned during the last five years of employment preceding
the employee's retirement or other separation from service. Employees may
retire and begin receiving an unreduced benefit anytime if they have reached
age 65 and have 10 years of continuous service, as determined by the Company.
Assuming average final compensation calculated according to Messrs.
Dickinson's and Zonis's annual compensation over the last five years, the
estimated annual benefits payable to each of Messrs. Dickinson and Zonis
would be $200,000. An employee may retire with benefits prior to age 65 if
he is at least age 55, has completed at least 10 years of service, and the
Company consents to such retirement. In such event, if the employee elects
to have benefits commence prior to age 65, payments are reduced to the
present value, using a discount factor of 10% of the full benefit which would
have been payable at age 65. An employee may also be entitled to benefits
under certain other circumstances specified in the agreements.
If the employee dies before receiving the entire benefit payable to him,
the balance is paid to the employee's beneficiary or estate.
All amounts are forfeited if the employee engages in any conduct which
in the Company's opinion is contrary to the Company's best interests, if the
employee's employment is terminated for cause, if the employee engages in
competition with the Company, or if the employee fails to assist the Company
when asked.
Defined Benefit Plans
The following table sets forth estimated pension benefits payable at age
65 or upon completion of five years of plan participation, whichever occurs
later (the "Normal Retirement Date"), pursuant to two employee pension plans
(qualified and nonqualified) adopted by the Company effective January 1, 1989
(collectively, the "Pension Plan"). (The Pension Plan provides an early
retirement benefit at age 55 after completion of 15 years of service, subject
to a reduction of .5% for each month that distribution of benefits precedes
the participant's Normal Retirement Date.)
PENSION PLAN TABLE
Years of Service
Remuneration 15 20 25 30 35
$250,000 and above $54,600 $72,800 $91,000 $109,200 $109,200
A participant's benefits under the Pension Plan are calculated based on
an employee's length of service with the Company and the average of the
participant's five highest consecutive years of compensation (including base
pay, overtime, bonuses and commissions) out of the last ten years of service.
Subject to the benefit limitation policy discussed below, the covered
compensation with respect to the individuals named in the Summary
Compensation Table would include substantially the same types and amounts of
annual compensation shown in the Summary Compensation Table.
The normal form of payment is a straight life annuity with benefits
ceasing at the later of the death of the participant or five years from the
date of first payment. If the employee is married, pension benefits are
presumptively payable on a reduced joint and 50% survivor annuity basis with
the employee's spouse as the contingent annuitant. Other forms of
distribution are available under the Pension Plan, including a lump sum
distribution.
The Company has adopted a benefit limitation policy for the Pension Plan
consistent with Section 415 of the Internal Revenue Code of 1986, as amended
(the "Code"). The annual compensation for the fiscal year ended November 30,
1997 covered by the Pension Plan for the individuals named in the Summary
Compensation Table, except for A. Kirk Lanterman who is not eligible for
participation in the Pension Plan, is limited to $250,000 (as may be indexed)
pursuant to Section 401(a)(17) of the Code.
Pension benefits paid under the Pension Plan will be credited toward
amounts payable under the Deferred Compensation Agreements described above.
The Pension Plan does not reduce benefits on account of Social Security (or
any other benefit), other than as reflected in the benefit formula which is
integrated with Social Security.
As of December 31, 1997, the years of credited service under the Pension
Plan for each of the executive officers named in the Summary Compensation
Table, except for A. Kirk Lanterman who is not eligible for participation in
the Pension Plan, will be as follows: Micky Arison, age 48, with 22 credited
years of service; Robert H. Dickinson, age 55, 22 years; Meshulam Zonis, age
64, 22 years; and Howard S. Frank, age 56, 8 years. In consideration of Mr.
Frank's forfeiture of retirement benefits from his prior employer, on April
17, 1995, the Compensation Committee approved an agreement with Mr. Frank
whereby the Company agreed to compensate Mr. Frank upon his retirement for
benefits he would have received under the Pension Plan if he had been
credited with an additional thirteen years of service in addition to the
actual years of credited service, reduced by the amounts payable under the
Pension Plan.
Effective January 1, 1998, the Company established a 401(k)/profit
sharing plan and a nonqualified savings/profit sharing plan. All accruals
under the qualified employee pension plan ceased effective December 31, 1997.
Effective January 1, 1998, participants in the nonqualified employee pension
plan chose either to remain in the nonqualified employee pension plan with
limited participation in the nonqualified savings plan or to freeze
participation in the nonqualified pension plan and fully participate in the
nonqualified savings/profit sharing plan.
Compensation of Directors
During fiscal 1997, each director who was not an employee of the Company
received a retainer fee of $28,000 per annum, $1,000 for each Board meeting
attended and $1,000 for each committee meeting attended. The Chairman of
each committee receives an additional retainer of $4,000 per annum and the
members of each committee receive an additional retainer of $2,000 per annum.
On July 10, 1993, the Board of Directors adopted the 1993 Outside
Directors' Stock Option Plan (the "Outside Director Plan") to provide
additional compensation to nonemployee directors. The Outside Director Plan
provides for the granting of options to purchase shares of Common Stock to
directors of the Company who are not employees or officers of the Company or
any of its subsidiaries.
Each nonemployee director elected or appointed to the Board of Directors
for the first time following the adoption of the Outside Director Plan is
granted an option to purchase 10,000 shares of Common Stock. Thereafter, for
each five-year period of consecutive service as a nonemployee director, each
nonemployee director receives an option to purchase an additional 10,000
shares of Common Stock. The exercise price of each option granted under the
Outside Director Plan may not be less than the average of the high and the
low sales price of a share of Common Stock on the New York Stock Exchange on
the date of grant.
Options granted under the Outside Director Plan are immediately
exercisable for a period of five years from the date of grant. The maximum
number of shares of Common Stock which may be made subject to options under
the Outside Director Plan is 400,000. The Outside Director Plan is effective
for a period of ten years from the date of adoption by the Board of
Directors.
Pursuant to the terms of the Outside Director Plan, on July 12, 1997,
Messrs. Ruben, Subotnick, Weiser and Zucker were each granted options to
acquire 10,000 shares of Common Stock at an option price of $43.8125 per
share, the average of the high and low sales price of a share of Common Stock
on such date. Shari Arison, David Crossland and James M. Dubin do not
receive options under the Outside Director Plan.
Executive Long-Term Compensation Agreement
The Company recently entered into an Executive Long-Term Compensation
Agreement (the "Compensation Agreement") with Robert H. Dickinson, the
President and Chief Operating Officer of CCL. The Compensation Agreement
provides that during the term of Mr. Dickinson's employment with the Company,
the Company will provide long term compensation (in addition to his annual
compensation consisting of a base salary and annual award under the 1994
Carnival Cruise Lines Key Management Incentive Plan) in the form of annual
grants to Mr. Dickinson of 20,000 restricted shares of Common Stock and
40,000 options to purchase shares of Common Stock, contingent upon
satisfactory performance.
Retirement and Consulting Agreement
In 1997, the Company entered into a Retirement and Consulting Agreement
(the "Retirement Agreement") with A. Kirk Lanterman, the President and Chief
Executive Officer of the Company's wholly-owned subsidiary, Holland America
Line-Westours Inc. The Retirement Agreement replaced a prior agreement
between Mr. Lanterman and the Company entered into in 1996 and provides that
the Company will pay to Mr. Lanterman in monthly installments over a fifteen
year period an annual compensation for past services and consulting services
of $707,124 beginning upon his retirement from employment with the Company or
its subsidiaries. A major portion of these amounts represents bonuses
deferred by Mr. Lanterman as described in the Summary Compensation Table
above. Mr. Lanterman is required to provide up to five hours of consulting
services per month during the term of the Retirement Agreement. In the event
of Mr. Lanterman's death prior to the expiration of the Retirement Agreement,
the present value of the unpaid balance of the total compensation payable
under the Retirement Agreement must be paid to his estate within thirty days
of the date of his death.
Compensation Committee Interlocks and Insider Participation
During the Company's fiscal year ended November 30, 1997, Messrs.
Modesto A. Maidique, Sherwood M. Weiser, Micky Arison and Uzi Zucker served
as members of the Compensation Committee of the Board of Directors. Mr.
Arison is the Chairman of the Board of Directors and Chief Executive Officer
of the Company. Mr. Arison and Mr. Frank are directors of CHC International,
Inc. As described below, Mr. Weiser is Chairman of the Board of Directors
and Chief Executive Officer of CHC International, Inc.
Mr. Weiser
Sherwood M. Weiser is the Chairman of the Board, Chief Executive Officer
and President of CHC International, Inc., d/b/a Carnival Hotels and Casinos
("CHC"). CHC, an independent hotel and casino development and management
company, was formed in March 1994 by the Company and the principals of The
Continental Companies. Mr. Weiser was the Chairman of the Board and Chief
Executive Officer of The Continental Companies as well as one of its
principal stockholders. As of January 12, 1998, the Company owned
approximately 23% of the outstanding capital stock of CHC.
In March 1994, the Company and CHC entered into a Trademark License
Agreement providing for CHC's use of the "Carnival" trademark so that CHC may
do business as "Carnival Hotels & Casinos". In exchange, CHC pays the
Company an annual royalty equal to the greater of $100,000 or 1% of CHC's
gross revenues, computed in accordance with the terms of the Trademark
License Agreement. The Trademark License Agreement has a term of 20 years.
In connection with the Company's sale to Mr. Weiser of 429,624 shares of
CHC capital stock effective November 30, 1994, Mr. Weiser issued a promissory
note in favor of the Company in the original principal amount of $5,370,000
(the "Weiser Note"). The Weiser Note bears interest at the rate of 6% per
annum. The principal of and accrued interest on the Weiser Note is payable
in full on November 30, 1998. The Weiser Note contains a put option which
may be exercised by Mr. Weiser at any time to require the Company to
repurchase the 429,624 shares of CHC capital stock sold to Mr. Weiser in
exchange for the full principal and interest due under the Weiser Note. As
of January 12, 1998, the full principal amount of the Weiser Note remains
outstanding.
On August 27, 1997, the Company extended a $1.5 million line of credit
to CHC. As security for the loan, CHC executed a promissory note in favor of
the Company bearing a variable interest rate based on the prime rate plus one
percentage point. The interest rate for the initial borrowing was 9.5% per
annum. Interest is payable monthly on the outstanding principal balance
beginning October 1, 1997, with any accrued and unpaid interest payable with
the final principal payment. Outstanding balances under the note are due on
August 27, 1998. Currently, there is no outstanding balance under the note.
On October 31, 1997, Crowne Plaza Holdings, Inc., a Florida corporation
and a 100% subsidiary of the Company ("CPH"), together with Mr. Weiser and
the other shareholders of CHC (the "Principals") entered into a transaction
to purchase the Crowne Plaza Hotel/Omni Mall Complex in Miami, Florida. The
Principals are the owners of CP Miami Holdings, L.L.C., a Florida limited
liability company which owns (i) a 17.74% limited partnership interest in CP
Miami Hospitality, L.P., the limited partnership established by the
Principals to purchase the Crowne Plaza Hotel/Omni Mall Complex, and (ii) a
37.35% interest in CP Miami Retail L.P., a Delaware limited partnership which
has leased the Omni Mall Complex from CP Miami Hospitality L.P. CPH owns a
48% interest in CP Miami Holdings, L.L.C. Lehman Brothers Holdings, Inc.
("Lehman") extended an $8.5 million loan to CP Miami Hospitality, L.P. Mr.
Karim Alibhai (one of the Principals) individually guaranteed and indemnified
Lehman from certain liabilities under the loan to CP Miami Hospitality, L.P.
Pursuant to a letter agreement with Mr. Alibhai, Mr. Weiser agreed to
indemnify Mr. Alibhai for up to 19% of any funds paid by Mr. Alibhai to
Lehman arising from his guarantee relating to the Crowne Plaza Hotel (and 19%
of the expenses) and 50% of any payments made to Lehman relating to the Omni
Mall (and 50% of the expenses).
A Contribution and Indemnity Agreement was entered into by and among Mr.
Weiser, CPH and the other shareholders of CHC, wherein each party indemnified
Mr. Weiser severally and up to their respective percentage interests held in
the limited partnership, for Mr. Weiser's liability to Mr. Alibhai under the
letter agreement. Under the Contribution and Indemnity Agreement, CPH's
maximum liability to Mr. Weiser is approximately $1,040,000 exclusive of
costs and expenses.
The terms of the various transactions involving the Company and CHC were
the result of arms-length negotiations between the parties.
Mr. Arison
Mr. Arison, the Chairman of the Board of Directors and Chief Executive
Officer of the Company, is the indirect sole owner of a corporation which
leased a plane to the Company under a long-term lease pursuant to which the
Company paid rent in a lump sum of $5.5 million in 1987. The amount of the
lump sum payment was based on the fair market value and the remaining useful
life of the plane at the time, as determined by an independent appraiser.
Because the Company acquired a new aircraft, the Company terminated the lease
effective January 6, 1997 and received a payment of $4,528,100 from the
lessor, which amount represented unused, prepaid rent under the lease, plus
the net book value of certain improvements made by the Company to the plane
during the term of the lease.
Mr. Arison was also the indirect majority shareholder of Carnival Air
Lines, Inc. ("Carnival Air"), an airline which conducted charter services and
scheduled carrier services to Nassau, Puerto Rico and other locations in the
Caribbean from several U.S. cities and between various U.S. cities. In
September of 1997, Carnival Air was merged with and became a wholly owned
subsidiary of Pan Am Corporation ("Pan Am"). As a result of the merger, Mr.
Arison became an indirect shareholder of approximately 42% of Pan Am. During
fiscal 1997, the Company and its subsidiaries paid approximately $1 million
to Carnival Air for services associated with transporting a limited number of
the Company's cruise passengers. During fiscal 1997, the Company and its
subsidiaries paid approximately $100,000 to Pan Am for such services. The
Company believes that the fees charged by Carnival Air and Pan Am are
comparable to those charged by other airlines for comparable services.
Additionally, pursuant to the terms of the merger, Mr. Arison obtained the
right to cause Howard S. Frank, the Company's Vice Chairman and Chief
Operating Officer, to be appointed to the Board of Directors of Pan Am.
Accordingly, Mr. Frank has served on the Board of Pan Am since October 1997.
The Company also earned license fees of approximately $480,000 during
fiscal 1997 for the license of the "Carnival" trademark to Carnival Air. In
connection with the merger, Pan Am agreed to pay to the Company unpaid
license fees owed by Carnival Air. As of January 12, 1998, Pan Am owed the
Company $1,057,000, inclusive of interest on unpaid license fees. In
connection with the merger, Pan Am agreed to discontinue the use of
"Carnival" trademarks on the promotion of its ongoing business and to proceed
to eliminate the marks from its aircraft and other equipment during its
ordinary maintenance schedule.
Mr. Arison is also the Chairman and Chief Executive Officer and the
indirect sole shareholder of Florida Basketball Associates, Inc., the sole
general partner of the Miami Heat Limited Partnership ("MHLP"), the owner of
the Miami Heat, a professional basketball team. During December 1997, the
Company entered into a two year sponsorship agreement with MHLP pursuant to
which the Company agreed to pay an aggregate of $617,356 and provide goods
and services valued at $37,500 in exchange for various sponsorship, marketing
and advertising services and the use of VIP floor boxes.
Mr. Zucker
Mr. Zucker, a director of the Company, is a Senior Managing Director of
Bear, Stearns & Co. Inc. ("Bear Stearns"). Bear Stearns is one of the
investment banking firms serving as an agent of the Company in connection
with the Company's ongoing offering of $100,000,000 of Medium Term Notes.
Bear Stearns was also one of the investment banking firms serving as an
underwriter in the Company's recent public offering of $200,000,000 of 6.65%
Debentures due January 15, 2028. It is expected that Bear Stearns may
continue to provide investment banking and consulting services to the Company
when so requested by the Company.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Committees
The four-member Compensation Committee of the Company's Board of
Directors is responsible for annually recommending to the Board of Directors
the cash compensation payable to the Company's executive officers.
Compensation decisions by the Compensation Committee are submitted to the
Board of Directors for approval. The Plan Administration Committee is
responsible for the administration of the Company's stock-based incentive
plans. The Compensation Committee and the Plan Administration Committee are
collectively referred to in this Report as the "Committees".
The Compensation Committee is comprised of Messrs. Sherwood M. Weiser,
Uzi Zucker, and Modesto A. Maidique, each of whom are outside directors of
the Company, and Micky Arison, the Chairman and Chief Executive Officer of
the Company. Micky Arison, Ted Arison (his father) and the other Principal
Shareholders control approximately 47% of the voting power of the Company.
Micky Arison's participation on the Compensation Committee provides the
largest shareholders of the Company the ability to directly oversee and
influence the compensation policies of the Company. The Plan Administration
Committee is comprised of Messrs. Maidique, Weiser and Zucker.
Compensation Structure
The key components of the compensation of the Company's Chief Executive
Officer and the other executives named in the Summary Compensation Table are
base salary, annual bonus and stock-based incentives. The objective of the
Company is to create a compensation package for executive officers that is
competitive with compensation payable by comparable high performing
companies, as well as to provide both short-term rewards and long-term
incentives for positive individual and corporate performance.
Based on his subjective determinations, the Chief Executive Officer
recommends to the Compensation Committee and the Plan Administration
Committee the amount of total compensation payable to the Chief Executive
Officer and the other named officers for each fiscal year. The Committees
undertake a subjective review of such recommendations in light of the various
factors discussed below. Neither the Chief Executive Officer nor the
Committees assign relative values to any factors considered in the
compensation process or set predetermined performance targets for purposes of
the compensation decisions. The compensation recommendations of the Chief
Executive Officer have historically been approved by the Committees and the
Board of Directors. The various components of the Company's executive
compensation are discussed below.
During 1996, the Company retained an outside consulting firm to review
the Company's compensation policies relating to senior management, other than
the Chief Executive Officer and the Vice Chairman (the "Compensation Study").
The Compensation Study did not recommend any adjustments to the total cash
compensation packages of the named officers. Consequently, no changes in the
total cash compensation of the named officers were proposed.
The Compensation Study identified two significant issues. First, the
study indicated that the base salaries of the named officers were
substantially below the salaries of senior executives employed by comparable
high performing companies. Secondly, the Compensation Study concluded that
the Company's long-term compensation programs for senior executives should
be reviewed and enhanced. As a result of the foregoing recommendations and
in order to provide a more reasonable balance between the base salaries and
the cash bonuses, the Compensation Committee approved the restructuring of
the cash compensation packages of the named officers, other than Mr.
Lanterman, to increase the base salary component of each total cash
compensation package. The increases in base salaries were offset by
corresponding reductions in the cash bonuses paid to the named officers in
1997 before consideration of any changes in bonuses as a result of the
performance of the Company in 1997.
Base Salaries
As a result of the Compensation Study the base salaries of the Chief
Executive Officer and certain of the named officers were increased in 1997.
The amounts of the individual salary increases in 1997 were subjectively
determined and were not based upon specific recommendations set forth in the
Compensation Study or precise comparisons with comparable companies.
Notwithstanding the salary adjustments, the Company believes that the base
salaries paid to the named officers continues to be below the median of
salaries paid to executives of comparable high performing companies.
The salary compensation for Mr. Lanterman, who is employed by Holland
America Line-Westours Inc. ("HALW"), a subsidiary of the Company, has been
traditionally established under the HALW compensation plan. The Compensation
Study did not recommend an increase in Mr. Lanterman's base salary.
Bonuses
The objective of the Company is to emphasize the variable annual bonus
as the most important cash compensation feature of executive compensation.
The emphasis on the annual discretionary bonus allows the Company greater
flexibility in rewarding favorable individual and corporate performance than
possible under a salary-oriented structure. Although there is no specific
relationship between the bonus recommendations of the Chief Executive Officer
and the performance of the Company for the 1997 fiscal year, the Compensation
Committee considered generally in reviewing such recommendations the 14.4%
increase in the Company's earnings per share for fiscal 1997, the performance
of the individual operating units of the Company, and the shareholder return
reflected in the Performance Graph appearing elsewhere in this Proxy
Statement.
Mr. Lanterman's cash bonus is based on the financial performance of
HALW, and is calculated pursuant to the terms of the HALW Key Management
Incentive Plan. Annual bonuses to Robert Dickinson and Meshulam Zonis are
determined primarily pursuant to the terms of the 1994 Carnival Cruise Lines
Key Management Incentive Plan (the "CCL Plan"). Robert Dickinson's 1997
annual bonus payable pursuant to the CCL Plan was paid in cash. For all
other participants, a portion of the 1997 annual bonus payable pursuant to
the CCL Plan was paid in shares of the Company's Common Stock.
Stock-Based Incentives
The third component of the Company's executive compensation is comprised
of stock-based incentive plans. The Plan Administration Committee considers
the current year's vesting of previously issued shares under the 1987 and
1993 Carnival Cruise Lines, Inc. Restricted Stock Plans, respectively, and
other stock grants or awards in evaluating the executive compensation
recommendations of the Chief Executive Officer. In addition, the Plan
Administration Committee considers granting stock options pursuant to the
1992 Option Plan. Whereas the cash bonus payments are intended to reward
positive short-term individual and corporate performance, grants under the
stock-based plans are intended to provide executives with longer term
incentives which appreciate in value with the continued favorable future
performance of the Company. Other than to Robert Dickinson as described
above, a portion of the 1997 annual bonuses payable to named officers
pursuant to the CCL Plan is payable in shares of the Company's Common Stock.
Other Compensation
The Company in the past has entered into various compensation-related
agreements with individual officers. See "EXECUTIVE COMPENSATION - Long-Term
Compensation Agreement." Such agreements include employment agreements and
deferred compensation arrangements. The Committees and the Board will
consider such arrangements in the future in connection with circumstances
which warrant an individualized compensation arrangement.
In fiscal 1997, the Company's executive officers also participate in the
Company's nonqualified defined benefit pension plan and may participate in a
nonqualified deferred compensation plan. In fiscal 1998, the Company's
executive officers are eligible to participate in the Company's nonqualified
savings/profit sharing plan.
The Compensation Committee
Sherwood M. Weiser, Chairman
Micky Arison
Modesto A. Maidique
Uzi Zucker
Performance Graph
The following graph compares the Price Performance of $100 if invested
in the Company's Common Stock with the Price Performance of $100 if invested
in each of the New York Stock Exchange Market Value Index and the Dow Jones
Industry Group REQ (other leisure services and products). The Performance
Graph does not contain comparisons with a cruise line industry index or other
cruise lines because the great majority of other companies engaged in the
cruise business are privately-held companies. The Price Performance, as used
in the Performance Graph, is calculated by assuming $100 is invested at the
beginning of the period in the Company's Common Stock at a price equal to the
market value. At the end of each fiscal year the total value of the
investment is computed by taking the number of shares owned, assuming the
Company's dividends are reinvested on an annual basis, times the market price
of the shares at the end of each fiscal year.
(Graph)
1992 1993 1994 1995 1996 1997
Carnival Corporation 100 151 138 167 207 358
Dow Jones Industry
Group/REQ 100 117 110 141 172 200
NYSE Market Index 100 112 114 146 182 230
TRANSACTIONS OF MANAGEMENT AND DIRECTORS WITH THE COMPANY
Transactions with Ted Arison. In November 1990, subsequent to his
resignation as Chairman of the Board, Ted Arison and the Company entered into
a consulting agreement (the "Consulting Agreement") whereby Ted Arison agreed
to act as a consultant to the Company with respect to the construction of
cruise ships. In July 1992, the Consulting Agreement was replaced by a new
consulting agreement (the "New Consulting Agreement") between the Company and
Arison Investments Ltd. ("AIL"), a corporation affiliated with Ted Arison.
The New Consulting Agreement, which originally expired November 25, 1996, has
been extended until November 25, 1999. Under the New Consulting Agreement,
the Company has agreed to pay AIL $500,000 per year and to reimburse it for
all customary and usual expenses. The New Consulting Agreement also has a
non-competition clause under which AIL has agreed that during the term of the
New Consulting Agreement it will not, and will cause its affiliate not to
compete in any way with the Company. In fiscal 1997, $500,000 in fees were
paid to AIL under the New Consulting Agreement.
The Company also provides aircraft management services to Mr. Arison.
During fiscal 1997, the Company received $150,000 from Mr. Arison in
reimbursement of the Company's costs of providing such services. It is
expected that the Company will continue to provide such aircraft management
services to Mr. Arison in the future.
Under a registration rights agreement (the "Arison Registration Rights
Agreement"), the Company has granted certain registration rights to Ted
Arison with respect to the shares of Common Stock beneficially owned by Ted
Arison (the "Arison Shares") in consideration for $10,000 to be paid to the
Company by Ted Arison thereunder. If, at any time, Ted Arison makes a
written demand for the registration of any number of the Arison Shares,
subject to a minimum amount of 500,000 shares, the Company will within 90
days prepare and file with the SEC a registration statement, subject to
certain limitations. In addition, if the Company determines to file a
registration statement on its behalf or on behalf of any security holders
(other than a registration statement filed for the purpose of registering
shares issuable to employees under an employee benefit plan or in connection
with a business combination) relating to its Common Stock or any class of
securities convertible into Common Stock, Ted Arison may register the Arison
Shares pursuant to such registration statement, subject to certain
limitations. The Company has agreed to bear all expenses relating to such
demand and piggyback registrations, except for fees and disbursements of
counsel for Ted Arison, selling costs, underwriting discounts and applicable
filing fees. In November 1996, the Company consented to the assignment by
Ted Arison of the rights granted to him under the Arison Registration Rights
Agreement to Royal Bank of Scotland Trust Company (Limited), as trustee for
the Ted Arison Charitable Trust. In addition, the Company granted to the
Arison Foundation, Inc. (the "Foundation") the same rights with respect to
the shares of Class A Common Stock owned by the Foundation that Ted Arison
had with respect to the Arison Shares. Shari Arison is the President and a
director of the Foundation.
Registration Rights. Pursuant to a letter agreement (the "Trust
Registration Rights Agreement") dated July 11, 1989, the Company granted to
the Ted Arison Irrevocable Trust (the "Irrevocable Trust") and the Arison
Children's Irrevocable Trust (the "Children's Trust", and together with the
Irrevocable Trust, the "Trusts") certain registration rights with respect to
the 14,277,028 shares of Common Stock held for investment by the Trusts (the
"Shares"). The beneficiaries of the Trusts included the children of Ted
Arison, including Micky Arison, a director, Chairman of the Board and Chief
Executive Officer of the Company and Shari Arison, a director of the Company.
Effective December 26, 1991, the Children's Trust was divided into three
separate continued trusts, including continued trusts for Micky Arison and
Shari Arison.
The Trust Registration Rights Agreement provides that if, at any time,
either of the Trusts makes a written demand for the registration of its
Shares, the Company will within 90 days prepare and file with the Securities
and Exchange Commission a registration statement, subject to certain
limitations. The Company is not required to effect any demand registration
pursuant to the Trust Registration Rights Agreement unless all of the Shares
owned by either of the Trusts are included in the demand for registration.
In addition, if the Company determines to file a registration statement on
its behalf or on behalf of any security holders (other than a registration
statement filed for the purpose of registering shares issuable to employees
under an employee benefit plan, or in connection with a business combination)
relating to its Common Stock or any class of securities convertible into its
Common Stock, either of the Trusts may register its Shares pursuant to such
registration statement, subject to certain limitations. The Company has
agreed to bear all expenses relating to such demand and piggyback
registrations, except for fees and disbursements of counsel for the Trusts,
underwriting discounts and applicable filing fees.
Transactions with Cruise Specialists. Janet Olczak, the wife of A. Kirk
Lanterman, an executive officer and director of the Company, is the owner of
a travel agency located in Seattle, Washington, named Cruise Specialists.
Under the laws of the State of Washington, Ms. Olczak's ownership interest in
Cruise Specialists is her separate property and, accordingly, Mr. Lanterman
does not have any ownership interest in the agency. Cruise Specialists sells
cruises and other similar products for various travel providers, including
the Company, under arrangements that are common throughout the travel
industry whereby Cruise Specialists receives a commission based on sales
generated. In fiscal 1997, Cruise Specialists generated approximately $7.6
million of gross revenues (before commission) for the Company. In connection
with such revenues, Cruise Specialists received commissions of approximately
$1.2 million. The Company believes that the commissions paid to Cruise
Specialists are comparable to those paid to other travel agents for
comparable services.
Transactions with Trustees. The trustee of the B Trust and the Micky
Arison 1997 Holdings Trust is JMD Delaware, Inc., a Delaware corporation
wholly-owned by James M. Dubin. Mr. Dubin is a director of the Company and a
partner in the New York law firm of Paul, Weiss, Rifkind, Wharton & Garrison,
which firm serves as counsel to the Company and Micky Arison.
Andrew H. Weinstein is the sole shareholder of TAF Management Company,
A.H.W. Limited and Kentish Limited, which act either as trustee or protector
of certain Arison family trusts. Mr. Weinstein is a partner in the law firm
of Holland & Knight, which firm serves as counsel to the Company and Ted
Arison.
Transactions with Airtours and David Crossland. The Company currently
owns 120,000,000 ordinary shares of Airtours (the "Ordinary Shares"),
equivalent to approximately 28% of the ordinary share capital of Airtours.
Airtours is an integrated leisure travel group, owning tour operators,
charter airlines, travel agencies, cruise ships and holiday hotels. It
markets its products to customers in the United Kingdom, Sweden, Norway,
Denmark, Finland, the United States and Canada. David Crossland owns
48,539,874 Ordinary Shares (or 11.3%) of Airtours' ordinary share capital.
Micky Arison and Howard S. Frank are non-executive directors of Airtours.
In June 1997, the Company and Airtours successfully completed the joint
offer to acquire an interest in the outstanding equity securities of Costa
Crociere, S.p.A. ("Costa"), an Italian cruise company listed on the Milan
Stock Exchange. With the completion of the offer, the Company and Airtours
each own 50% of Il Ponte, S.p.A. ("Il Ponte"), a holding company which was
purchased from the Costa family. As of November 30, 1997, Il Ponte owned 98%
of the ordinary share capital, 93% of the savings shares and 47% of the
savings share warrants of Costa. The total cost of acquiring those Il Ponte
and Costa shares was approximately $266 million, of which approximately $190
million was paid by Il Ponte and the balance was paid equally by the Company
and Airtours. The $190 million which was paid by Il Ponte was funded by
borrowings, of which the Company guaranteed $95 million. In January 1998, Il
Ponte completed a second tender offer for the remaining shares of Costa at a
cost of $15.5 million, which was funded through additional borrowings of
which the Company guaranteed an additional $7.75 million. As of January 12,
1998, Il Ponte owns approximately 100% of the ordinary share capital, savings
shares and savings share warrants of Costa. Mr. Crossland currently serves
as Chairman of the Board of Il Ponte.
Airtours also owns retail travel agencies located throughout the United
Kingdom and Scandinavia which sell cruises and other travel products for
various travel providers, including Airtours and the Company, under
arrangements that are common throughout the travel industry whereby the
Airtours travel agencies receive a commission based on sales generated. The
Company believes the commissions paid to the Airtours travel agencies are
comparable to those paid to other travel agents for comparable services.
In April 1997, the Company and Airtours entered into a renewable five-year
concession agreement for the Company to provide casino services on board
Airtours cruise ships. In exchange for such services, the Company retains a
percentage of the gaming revenue derived from such services.
The terms of the various transactions involving the Company and Airtours
were the result of arms-length negotiations between the parties.
Transaction with Shari Arison. The Company has granted a license to use
the "Carnival" trademark to FUN, Inc. ("FUN") in connection with FUN's
manufacturing, advertisement and sales of perfume and certain related
products on the Company's ships and in department and specialty shops in the
United States and specified foreign countries. Shari Arison is a member of
the Board of Directors and a Vice President of FUN. Shari Arison's husband,
Mickey Dorsman, owns a 50% interest in FUN. Royalties are payable to the
Company in an amount equal to 5% of net sales up to $5 million, and
thereafter on net sales based on a sliding scale providing for lesser
percentages of royalties as annual net sales increase, with a minimum of 2%.
No royalty payments were made in fiscal 1997. See also "TRANSACTIONS OF
MANAGEMENT AND DIRECTORS WITH THE COMPANY -- Transactions with Ted Arison."
Other Transactions. Certain transactions involving Micky Arison,
Sherwood M. Weiser and Uzi Zucker are described in "EXECUTIVE COMPENSATION --
Compensation Committee Interlocks and Insider Participation."
Transactions with Affiliated Entities. The Company has adopted a policy
of dealing with affiliated entities on an arms-length basis and it may not
engage in business transactions with any affiliate on terms and conditions
less favorable to the Company than terms and conditions available at the time
for comparable transactions with unaffiliated persons.
SELECTION OF AUDITORS
The Board of Directors has selected Price Waterhouse LLP as independent
certified public accountants of the Company for the fiscal year ending
November 30, 1998, subject to approval of the shareholders. A representative
of such firm will be present at the Annual Meeting and will have an
opportunity to make a statement if he desires to do so and is expected to
respond to appropriate questions which the shareholders might have. The
Company knows of no direct or material indirect financial interests or
relationships that the members of such firm have with the Company.
Although ratification by the shareholders of the appointment of
independent accountants is not legally required, the Board of Directors
believes that such action is desirable.
Ratification of the selection of Price Waterhouse LLP as independent
auditors for the 1998 fiscal year requires the approval of the majority of
the votes cast at the Annual Meeting.
The Board of Directors unanimously recommends a vote FOR ratification of
the selection of Price Waterhouse LLP as independent certified public
accountants for the 1998 fiscal year.
ANNUAL REPORT
The Annual Report of the Company, including financial statements for the
fiscal year ended November 30, 1997, is being forwarded to each shareholder
with this Proxy Statement.
OTHER MATTERS
The Board of Directors has no knowledge of any other matters which may
come before the Annual Meeting. If any other matters shall properly come
before the meeting, the persons named in the Proxies will have discretionary
authority to vote the shares thereby represented in accordance with their
best judgment.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the Company's next
Annual Meeting of Shareholders must be received by the Secretary of the
Company prior to November 1, 1998 for inclusion in the Proxy Statement for
the next Annual Meeting of Shareholders.
INCORPORATION BY REFERENCE
The Company's Second Amended and Restated Articles of Incorporation are
hereby incorporated by reference into this Proxy Statement.
By Order of the Board of Directors
/s/ Arnaldo Perez
Arnaldo Perez
General Counsel and Secretary
Dated: March 2, 1998
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE COMPANY'S
FISCAL YEAR ENDED NOVEMBER 30, 1997 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION WILL BE PROVIDED TO SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN
REQUEST TO ARNALDO PEREZ, CORPORATE SECRETARY, CARNIVAL CORPORATION, 3655
N.W. 87 AVENUE, MIAMI, FLORIDA 33178-2428.
CARNIVAL CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 13, 1998
The undersigned hereby appoints Micky Arison and Arnaldo Perez and each
of them as proxies with full power of substitution, with all the powers the
undersigned would possess if personally present, to vote all shares of Common
Stock of Carnival Corporation which the undersigned is entitled to vote at
the Annual Meeting of Shareholders and any adjournment(s) thereof.
A Vote FOR Proposals 1, 2, 3, 4, 5 and 6 is recommended by the Board of
Directors.
1. Election as Director.
/ / FOR each nominee listed below / / WITHHOLD AUTHORITY to vote
(except as marked to the for the nominee listed
contrary below) below
Micky Arison, Shari Arison, Maks L. Birnbach, Richard G. Capen, Jr.,
David Crossland, Robert H. Dickinson, James M. Dubin, Howard S. Frank,
A. Kirk Lanterman, Modesto A. Maidique, William S. Ruben, Stuart
Subotnick, Sherwood M. Weiser, Meshulam Zonis, and Uzi Zucker
(INSTRUCTION: TO WITHHOLD authority to vote for any individual nominee,
write that nominee's name on the line below).
--------------------------------------------------------------
2. Approval of an amendment to the Company's Amended and Restated
Articles of Incorporation to eliminate the Class B Common Stock and designate
a single class of Common Stock;
(check one box) / / FOR / / AGAINST / / ABSTAIN
3. Approval of an amendment to the Company's Amended and Restated
Articles of Incorporation to increase the number of authorized shares of
Common Stock;
(check one box) / / FOR / / AGAINST / / ABSTAIN
4. Approval of an amendment to the Company's Amended and Restated
Articles of Incorporation to authorize Preferred Stock and grant to the Board
of Directors authority to designate the terms of each series of Preferred
Stock;
(check one box) / / FOR / / AGAINST / / ABSTAIN
(continued on reverse side)
5. Approval of amendments to the Company's Amended and Restated
Articles of Incorporation to make certain procedural changes recently
permitted under Panamanian law;
(check one box) / / FOR / / AGAINST / / ABSTAIN
6. Approval of Auditors.
(check one box) / / FOR / / AGAINST / / ABSTAIN
7. In their discretion, the proxies are authorized to vote upon such
other business as may come before the Annual Meeting, or any adjournment(s)
thereof.
I will be attending the annual meeting / / Print Name below
- -------------------------------------
Persons who do not indicate attendance at the Annual Meeting on this proxy
card will be required to present proof of stock ownership to attend.
The shares represented by this Proxy will be voted as specified herein. If
not otherwise specified, such shares will be voted by the proxies FOR
Proposals 1, 2, 3, 4, 5 and 6.
Dated: __________________, 1998
Signature ______________________
Signature ______________________
(Please sign exactly as name
appears to the left.)
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Appendix A
CARNIVAL CORPORATION
SECOND AMENDED AND RESTATED ARTICLES OF INCORPORATION
(TRANSLATION)
1. Name. The name of the Corporation is: CARNIVAL CORPORATION.
2. Purposes. The purposes of the Corporation are:
(a) To make, purchase, barter, charter, acquire dominion upon or
use of, operate as owner, chartered or operator, to manage, equip and fit out
all kinds of ships and vessels of all types and kinds of propelling systems.
(b) To make all kinds of buildings and structures related to any
kind of legitimate maritime commercial business, merchandise warehousing,
shipping and transportation.
(c) To act as shipbroker, customs and maritime insurance broker,
and to administer the properties and assets and investments that maritime
trade and shipowners' business and ship exploitation may require.
(d) To act as principal and agent in all negotiations related to
maritime trade to such extent as the purposes of this Corporation may permit
it.
(e) To solicit from the Government of the Republic of Panama or
any other government where it may be necessary and through such proceedings
as may be required by law, navigation licenses for ships and permits to
enroll crewmen for, and port clearance of the ships in care of the
Corporation.
(f) To perform transactions through negotiable instruments and
real estate related to maritime trade and shipowners' business and
exploitation of ships.
(g) To deal in patents and improvements on patented methods
related to the business of maritime trade.
(h) To purchase and sell and deal in general with the shares of
its own capital stock pursuant to instructions from the Board of Directors.
To acquire, purchase, guarantee, hold, sell, assign, transfer, mortgage,
pledge or otherwise dispose of, deal in shares of the capital stock of, or
bonds, securities or other certificates of indebtedness created by other
corporations.
(i) To purchase, sell, lease, mortgage, set up easements and
encumbrances upon real estate and in general upon all kinds of properties
related to the business of the Corporation.
(j) To sell, mortgage, encumber or otherwise charge its assets and
to perform any and all kinds of legitimate commercial transactions and any
other that may be permitted in the future pursuant to Panamanian laws.
(k) To borrow money from any persons, firms, banks or corporations
as may be necessary for its business and to guarantee such loans as the law
may permit and to loan money secured or unsecured to any persons, firms or
corporations as the law may permit and in general to engage in any legitimate
commercial undertaking in any country.
(l) To engage in the general business of travel and tour services,
both domestic and foreign; to dispense travel and tour information and to act
as agent for all transportation companies, including without limitation
airline companies, passenger cruise line companies, steamship companies,
railroad companies, bus companies, car rental companies and any other mode of
travel or transportation or touring companies, both local and foreign; to
engage in the preparation of travel and tour itineraries, including without
limitation hotel and motel accommodations and sightseeing; and, in general,
to engage in the business of all forms and types of travel services.
(m) To dispense travel and tour counseling services, sell
railroad, airline, passenger cruise line, steamship and bus transportation;
to sell accommodations for hotels, resorts, sightseeing and feature
attractions throughout the United States, Canada, Mexico, Europe and every
country throughout the world; to create, plan, sell and carry through
escorted vacation tours; to own, operate, lease or otherwise acquire such
real and personal property suitable, useful or necessary in connection with
any of the objects aforementioned; to enter into, make, perform and carry out
contracts of every kind in connection with the sale and distribution of the
aforementioned items or services; to acquire, use, own, lease and dispose of
trademarks, copyrights and licenses.
(n) To acquire, hold, use, sell, assign, lease, grant licenses in
respect of, mortgage or otherwise dispose of letters patent of the United
States or any foreign country, patent rights, licenses and privileges,
inventions, improvements and processes, copyrights, trademarks, service marks
and trade names relating or useful in connection with any business of this
Corporation.
(o) To carry on the business of hotel, resort, casino, restaurant,
refreshment room and lodging-housekeepers, caterers for public amusements
generally, hairdressers, barbers, perfumers, proprietors, laundries, reading,
writing and newspaper room, libraries, places of amusements, recreation and
entertainment of all kinds, sport, theatrical and musical box office
proprietors, entrepreneurs and general agents, and any other business which
can be conveniently carried on in connection therewith.
(p) Generally to engage in, carry on and conduct any lawful act or
activity for which corporations may be organized under the Corporation Law of
the Republic of Panama.
The foregoing clauses shall be construed both as objects and powers, and it
is hereby expressly provided that the foregoing enumeration of specific
powers shall not be hold to limit or restrict in any manner the powers of the
Corporation, and are in furtherance of, and in addition to, and not in
limitation of the general powers conferred by the laws of the Republic of
Panama.
3. Number and Classes of Shares.
(a) The capital of the Corporation is Ten Million United States
Dollars (U.S. $10,000,000), divided into Nine Hundred Sixty Million
(960,000,000) nominative Common Stock of a par value of one cent (U.S. $0.01)
("Common Stock") and Forty Million (40,000,000) shares of Preferred Stock of
a par value of U.S. $.01 ("Preferred Stock"). The capital stock may be
increased, more shares may be issued and the nominal value, class and rights
pertaining to said shares may be changed.
(b) The designation, relative rights, preferences and limitations
of the shares of the capital stock are as follows:
(1) The shares of Preferred Stock may be issued from time to
time in one or more series of any number of shares, provided that the
aggregate number of shares issued and not canceled of any and all such series
shall not exceed the total number of shares of Preferred Stock hereinabove
authorized, and with distinctive serial designations, all as shall hereafter
be stated and expressed in the resolution or resolutions providing for the
issue of such shares of Preferred Stock from time to time adopted by the
Board pursuant to authority so to do which is hereby vested in the Board.
Each series of shares of Preferred Stock (a) may have such voting powers,
full or limited, or may be without voting powers; (b) may be subject to
redemption at such time or times and at such prices; (c) may be entitled to
receive dividends (which may be cumulative or non-cumulative) at such rate or
rates, in such consideration (including, without limitation, shares of
capital stock), on such conditions and at such times, and payable in
preference to, or in such relation to, the dividends payable on any other
class or classes or series of stock; (d) may have such rights upon the
dissolution of, or upon any distribution of the assets of, the Corporation;
(e) may be made convertible into or exchangeable for, shares of any other
class or classes or of any other series of the same or any other class or
classes of shares of the Corporation or any other person at such price or
prices or at such rates of exchange and with such adjustments; (f) may be
entitled to the benefit of a sinking fund to be applied to the purchase or
redemption of shares of such series in such amount or amounts; (g) may be
entitled to the benefit of conditions and restrictions upon the creation of
indebtedness of the Corporation or any subsidiary, upon the issue of any
additional shares (including additional shares of such series or of any other
series) and upon the payment of dividends or the making of other
distributions on, and the purchase, redemption or other acquisition by the
Corporation or any subsidiary of, any outstanding shares of the Corporation
and (h) may have such other relative, participating, optional or other
special rights, qualifications, limitations or restrictions thereof; all as
shall be stated in said resolution or resolutions providing for the issue of
such shares of Preferred Stock. Any of the voting powers, designations,
preferences, rights and qualifications, limitations or restrictions of any
such series of Preferred Stock may be made dependent upon facts ascertainable
outside of the resolution or resolutions providing for the issue of such
Preferred Stock adopted by the Board pursuant to the authority vested in it
by this Article 3(b)(1), provided that the manner in which such facts shall
operate upon the voting powers, designations, preferences, rights and
qualifications, limitations or restrictions of such series of Preferred Stock
is clearly and expressly set forth in the resolution or resolutions providing
for the issue of such Preferred Stock. The term "facts" as used in the next
preceding sentence shall have the meaning given to it under Panamanian law.
Shares of Preferred Stock of any series that have been redeemed (whether
through the operation of a sinking fund or otherwise) or that if convertible
or exchangeable, have been converted into or exchanged for shares of any
other class or classes shall have the status of authorized and unissued
shares of Preferred Stock of the same series and may be reissued as a part of
the series of which they were originally a part or may be reclassified and
reissued as part of a new series of shares of Preferred Stock to be created
by resolution or resolutions of the Board or as part of any other series of
shares of Preferred Stock, all subject to the conditions or restrictions on
issuance set forth in the resolution or resolutions adopted by the Board
providing for the issue of any series of shares of Preferred Stock.
(2) Subject to the provisions of any applicable law or of the
By-laws of the Corporation, as from time to time amended, with respect to the
closing of the transfer books or the fixing of a record date for the
determination of stockholders entitled to vote and except as otherwise
provided by law or by the resolution or resolutions providing for the issue
of any series of shares of Preferred Stock, the holders of outstanding shares
of Common Stock shall exclusively possess voting power for the election of
directors and for all other purposes, each holder of record of shares of
Common Stock being entitled to one vote for each share of Common Stock
standing in his or her name on the books of the Corporation. Except as
otherwise provided by the resolution or resolutions providing for the issue
of any series of shares of Preferred Stock, the holders of shares of Common
Stock shall be entitled, to the exclusion of the holders of shares of
Preferred Stock of any and all series, to receive such dividends as from time
to time may be declared by the Board. In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or
involuntary, after payment shall have been made to the holders of shares of
Preferred Stock of the full amount to which they shall be entitled pursuant
to the resolution or resolutions providing for the issue of any series of
shares of Preferred Stock, the holders of shares of Common Stock shall be
entitled, to the exclusion of the holders of shares of Preferred Stock of any
and all series, to share, ratably according to the number of shares of Common
Stock held by them, in all remaining assets of the Corporation available for
distribution to its stockholders.
(3) Subject to the provisions of these Articles of
Incorporation and except as otherwise provided by law, the stock of the
Corporation, regardless of class, may be issued for such consideration and
for such corporate purposes as the Board of Directors may from time to time
determine.
4. No Preemptive Rights. No holder of shares shall have any right,
preemptive or other, to subscribe for or to purchase from the Corporation any
of the shares of the Corporation hereinafter issued or sold.
5. Domicile. The domicile of the Corporation shall be in Panama City,
Republic of Panama. However, the Corporation may, as provided for by the
Board of Directors, engage in business and establish branches and keep its
files and assets anywhere in the world. Likewise, the Corporation may change
its domicile of incorporation and continue to exist under the laws or
jurisdiction of another country, if authorized by a resolution of the
stockholders or of the Board of Directors of the Corporation.
6. Duration. The duration of the Corporation shall be perpetual, but
it may previously be dissolved pursuant to law.
7. Board of Directors. The Board of Directors shall consist of no
less than three (3), and no more than fifteen (15) members. Within said
minimum and maximum, the number shall be set forth by resolution of the
stockholders or by resolution of the Board of Directors. The meetings of the
Board of Directors may be held in the Republic of Panama or in any other
country, and any Director can be represented and vote by proxy or proxies at
any and all Directors' meetings. The meetings may also be held by means of
telephone conference, fax or any other means of electronic communication, in
which the participants have been in direct contact. Likewise, the Board of
Directors may validly adopt resolutions by written consent with the signature
of the majority of Directors or their proxies in different dates and places,
in lieu of a meeting. The Board of Directors shall have absolute control and
full power of administration on all the matters of the Corporation, being it
understood that the Board of Directors is empowered to contract loans and
financing in general, to grant guarantees over its properties and
subsidiaries, with respect to is own obligations and those of third parties,
and to mortgage its properties and assets and to sell less than all or
substantially all of the assets of the Corporation without shareholders'
approval.
8. Officers. The Board of Directors, as soon as possible after the
annual election of directors, may choose a Chairman of the Board, a Vice-
Chairman of the Board, a President, a Chief Executive Officer, a Chief
Operating Officer, a Secretary, a Treasurer, and one or more Vice Presidents,
all of whom shall hold their offices until their successors are chosen and
qualify. More than one office may be held by the same person. The Board of
Directors may from time to time choose such other officers and agents as are
necessary, who shall hold their offices for such terms as are determined by
the Board of Directors. Any officer or agent chosen by the Board of
Directors may be removed at any time with or without cause by the affirmative
vote of a majority of the members of the Board of Directors then in office.
Until the Board of Directors provides otherwise, the legal representative of
the Corporation shall be the President and, in his absence, the Corporation
shall be represented by the Chairman of the Board.
9. Indemnification.
(a) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he is or was a director or an
officer of the Corporation, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding to the
fullest extent and in the manner set forth in and permitted by the General
Corporation Law, and any other applicable law, as from time to time in
effect. Such right of indemnification shall not be deemed exclusive of any
other rights to which such director or officer may be entitled apart from the
foregoing provisions. The foregoing provisions of this Section 9(a) shall be
deemed to be a contract between the Corporation and each director and officer
who serves in such capacity at any time while this Article 9 and the relevant
provisions of the Corporation Law of the Republic of Panama and other
applicable law, if any, are in effect, and any repeal or modification thereof
shall not affect any rights or obligations then existing with respect to any
state of facts then or theretofore existing or any action, suit or proceeding
theretofore or thereafter brought or threatened based in whole or in part
upon any such state of facts.
(b) The Corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was an employee or agent
of the Corporation, or is or was serving at the request of the Corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding to the extent and in the manner set forth in and permitted by the
General Corporation Law of the Republic of Panama, and any other applicable
law, as from time to time in effect. Such right of indemnification shall not
be deemed exclusive of any other rights to which any such person may be
entitled apart from the foregoing provisions.
(c) The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or in or was serving at the request of the
Corporation an a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by his in any such capacity, or arising out
of his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of Sections 9(a)
and 9(b) above or under the Corporation Law of the Republic of Panama or any
other provision of law.
10. Adoption, Amendment and/or Repeal of By-Laws. The Board of
Directors may from time to time make, alter or repeal the by-laws of the
Corporation; provided, that any by-laws may be made by the shareholders of
the Corporation; and provided, that any by-laws made, amended or repealed by
the Board of Directors may be amended or repealed by the shareholders of the
Corporation.
TRANSITORY PROVISIONS
11. Directors and Officers. The names and addresses of the Directors
and Officers in office as of the date hereof are as follows:
NAME ADDRESS OFFICE
Micky Arison 3655 N.W. 87 Avenue Director, Chairman of the
Miami, Florida 33178 Board and Chief Executive
Officer
Shari Arison Golda Center Director
23 Shaul Hamelech Blvd.
Tel Aviv, Israel 64367
Maks L. Birnbach 580 Fifth Avenue Director
New York, New York 10036
Richard G. Capen, Jr. 6077 San Elijo Director
Rancho Santa Fe,
California 92067
David Crossland Parkway Three Director
Parkway Business Centre
300 Princess Road
Manchester M14 7QU
England
Robert H. Dickinson 3655 N.W. 87 Avenue Director, President and
Miami, Florida 33178 Chief Operating Officer -
Carnival Cruise Lines
James M. Dubin 1285 Avenue of the Director
Americas
New York, New York 10019-6064
Howard S. Frank 3655 N.W. 87 Avenue Director, Vice Chairman
Miami, Florida 33178 of the Board and
Chief Operating Officer
A. Kirk Lanterman 300 Elliott Avenue West Director
Seattle, Washington 98119
Modesto A. Maidique Florida International Director
University
Office of the President
University Park Campus
Miami, Florida 33199
William S. Ruben 40 E. 88th Street Director
Apt. 10F
New York, New York 10128
Stuart Subotnick 215 East 67th Street Director
New York, New York 10021
Sherwood M. Weiser 3250 Mary Street Director
Coconut Grove, Florida 33131
Meshulam Zonis 3655 N.W. 87 Avenue Director and Sr. Vice
Miami, Florida 33178 President - Operations
Uzi Zucker 245 Park Avenue Director
New York, New York 10167
Gerald R. Cahill 3655 N.W. 87 Avenue Sr. Vice President and
Miami, Florida 33178 Chief Financial Officer
Roderick McLeod 3655 N.W. 87 Avenue Sr. Vice President -
Miami, Florida 33178 Marketing
Lowell Zemnick 3655 N.W. 87 Avenue Vice President and
Miami, Florida 33178 Treasurer
Pamela C. Conover 3655 N.W. 87 Avenue Vice President -
Miami, Florida 33178 Strategic Planning
Arnaldo Perez 3655 N.W. 87 Avenue Vice President and
Miami, Florida 33178 Secretary
All of the above directors shall remain in office until their successors are
duly elected and qualified.
12. Registered Agent. The Registered Agent of the Corporation in
Panama City, until the Board of Directors may provide otherwise, shall be
Marcela de Perez, 10 Elvira Mendez Street, Interseco Building, 8th Floor,
Post Office Box 7440, Panama 5, Republic of Panama.
13. Subscription by Incorporators. The name and address of each
signatory to the original Articles of Incorporation and the number of shares
which each such signatory agreed to take care is as follows:
NAME ADDRESS No. of Shares
Mariano J. Oteiza No. 8 Aquilino de la Guardia Street 1
Panama, R. of P.
Domingo Diaz A. No. 8 Aquilino de la Guardia Street 1
Panama, R. of P.
