Filed pursuant to rule 424B5
Registration Nos. 33-50947
333-43269
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JANUARY 21, 1998)
[LOGO]
$400,000,000
CARNIVAL CORPORATION
$200,000,000 5.65% NOTES DUE OCTOBER 15, 2000
$200,000,000 6.15% NOTES DUE APRIL 15, 2008
This offering will consist of one series of notes maturing on October 15,
2000 (the "2000 Notes") and one series of notes maturing on April 15, 2008 (the
"2008 Notes" and, collectively with the 2000 Notes, the "Notes").
Interest on the Notes is payable on April 15 and October 15 of each year,
commencing October 15, 1998. Except as described in "Description of Debt
Securities--Redemption or Assumption of Debt Securities under Certain
Circumstances" in the accompanying Prospectus, the Notes are not redeemable by
the Company prior to maturity. The Notes will be represented by one or more
global Notes registered in the name of the nominee of The Depository Trust
Company. Beneficial interests in the global Notes will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depository and its participants. Except as described herein, Notes in definitive
form will not be issued. The Notes will be issued only in denominations of
$1,000 and integral multiples thereof. The Notes will trade in the Depository's
settlement system until maturity, and secondary market trading activity for the
Notes will therefore settle in immediately available funds. All payments of
principal and interest will be made by the Company in immediately available
funds. See "Description of Notes--Settlement and Payment".
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) COMPANY(1)(3)
Per 2000 Note..................... 99.891% 0.250% 99.641%
Total............................. $199,782,000 $500,000 $199,282,000
Per 2008 Note..................... 99.741% 0.650% 99.091%
Total............................. $199,482,000 $1,300,000 $198,182,000
(1) Plus accrued interest, if any, from April 15, 1998.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting estimated expenses of $100,000 payable by the Company.
------------------------
The Notes are offered by the Underwriters, as specified herein, subject to
receipt and acceptance by them and subject to their right to reject any order in
whole or in part. It is expected that the Notes will be ready for delivery in
book-entry form only through the facilities of the Depository in New York, New
York, on or about April 15, 1998 against payment therefor in immediately
available funds.
------------------------
BEAR, STEARNS & CO. INC. CHASE SECURITIES INC.
The date of this Prospectus Supplement is April 6, 1998.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICES OF THE NOTES, INCLUDING
OVER-ALLOTMENT, STABILIZING, AND SHORT COVERING TRANSACTIONS AND THE IMPOSITION
OF PENALTY BIDS. SEE "UNDERWRITING."
THE COMPANY
Carnival Corporation (the "Company") is the world's largest multiple-night
cruise company based on the number of passengers carried, revenues generated and
available capacity. The Company offers a broad range of cruise products, serving
the contemporary cruise market through Carnival Cruise Lines, the premium market
through Holland America Line and the luxury market through Windstar Cruises. In
total, the Company owns and operates 23 cruise ships with an aggregate capacity
of 33,118 passengers based on two passengers per cabin. The twelve Carnival
Cruise Lines ships have an aggregate capacity of 22,372 passengers with
itineraries primarily in the Caribbean, Mexican Riviera and Alaska. The eight
Holland America Line ships have an aggregate capacity of 10,302 passengers, with
itineraries in the Caribbean, the Mediterranean and Alaska and through the
Panama Canal, as well as other worldwide itineraries. The three Windstar ships
have an aggregate capacity of 444 passengers with itineraries in the Caribbean,
Costa Rica, the Mediterranean and the Far East. The Company also owns equity
interests in Seabourn Cruise Line, Costa Cruises and Airtours plc ("Airtours"),
an integrated leisure travel group. The three Seabourn ships have an aggregate
capacity of 612 passengers with itineraries in the Caribbean, the Baltic, the
Mediterranean and the Far East. The seven Costa Cruises ships have an aggregate
capacity of 7,710 passengers with itineraries in the Mediterranean, Northern
Europe, the Caribbean and South America. Airtours owns tour operators, charter
airlines, travel agencies, three cruise ships and holiday hotels. In April 1998,
the Company and a group of investors entered into an agreement to acquire the
business of Cunard Line for $500 million. See "Recent Developments."
The Company has signed agreements with a Finnish shipyard providing for the
construction of two additional SuperLiners for Carnival Cruise Lines, one with a
capacity of 2,040 passengers with delivery expected in November 1998 and one
with a capacity of 2,100 passengers with delivery expected in November 2000.
Additionally, the Company has options with the Finnish shipyard to build two
additional 2,100 passenger vessels for Carnival Cruise Lines with delivery
expected in 2001 and 2002. The Company also has agreements with an Italian
shipyard for the construction of two cruise ships, each with a capacity of 2,640
passengers, for Carnival Cruise Lines with delivery expected in June 1999 and
July 2000 and for the construction of three cruise ships for Holland America
Line, two with a capacity of 1,440 passengers with delivery expected in May 1999
and December 1999 and one with a capacity of 1,380 passengers with delivery
expected in September 2000.
The Company also operates a tour business, through Holland America
Line-Westours Inc. ("Holland America Westours"), which markets sightseeing tours
both separately and as a part of Holland America Line cruise/tour packages.
Holland America Westours operates 14 hotels in Alaska and the Canadian Yukon,
two luxury day-boats offering tours to the glaciers of Alaska and the Yukon
River, over 290 motor coaches used for sightseeing and charters in the states of
Washington and Alaska and in the Canadian Rockies and 12 private domed rail cars
which are run on the Alaskan railroad between Anchorage and Fairbanks.
The Company was incorporated under the laws of the Republic of Panama in
November 1974. The Company's executive offices are located at 3655 N.W. 87th
Avenue, Miami, Florida 33178-2428, telephone number (305) 599-2600. The
Company's registered office in Panama is located at 10 Elvira Mendez Street,
Interseco Building, Panama, Republic of Panama.
S-2
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Notes offered hereby
will be used to repay approximately $397 million of indebtedness under its
commercial paper program and for general corporate purposes. The indebtedness
matures on April 21, 1998 and bears interest at a rate of 5.6%. The indebtedness
under the commercial paper program was incurred to repay at maturity $200
million of the Company's 5.75% Notes due March 15, 1998 (the "1998 Notes") and
to fund the construction of a new vessel for Holland America Line.
S-3
CAPITALIZATION
The following table sets forth the capitalization of the Company at November
30, 1997 and as adjusted to give effect to (i) the sale of the Notes and the use
of the net proceeds thereof to repay indebtedness under the Company's commercial
paper program, (ii) the sale of the Company's 6.65% Debentures due January 15,
2028 (the "2028 Debentures") in January 1998 and the use of approximately $197
million of the net proceeds thereof to fund a portion of the purchase price of
the Elation, and (iii) the issuance of $397 million of commercial paper in March
1998, the use of approximately $200 million of the net proceeds thereof to repay
at maturity the 1998 Notes and the use of the remaining net proceeds to fund the
construction of a new vessel for Holland America Line. See "Use of Proceeds".
The information set forth below should be read in conjunction with the financial
statements and related notes incorporated in the accompanying Prospectus by
reference.
AS OF
NOVEMBER 30, 1997
--------------------------
ACTUAL AS ADJUSTED
------------ ------------
(IN THOUSANDS)
Current portion of long-term debt..................................................... $ 59,620 $ 59,620
------------ ------------
------------ ------------
Long-term debt:
Mortgages and other loans payable bearing interest at rates ranging from 8% to 9.9%,
secured by vessels................................................................ 26,068 26,068
Commercial paper(1)................................................................. 288,614 288,614
Unsecured Revolving Credit Facility due 2001........................................ -- --
Other loans payable................................................................. 51,001 51,001
5.75% Notes Due March 15, 1998...................................................... 200,000 --
5.65% Notes Due October 15, 2000(2)................................................. -- 199,782
6.15% Notes Due October 1, 2003..................................................... 124,960 124,960
7.70% Notes Due July 15, 2004....................................................... 99,924 99,924
7.05% Notes Due May 15, 2005........................................................ 99,851 99,851
6.15% Notes Due April 15, 2008(3)................................................... -- 199,482
7.20% Debentures Due October 1, 2023................................................ 124,876 124,876
6.65% Debentures Due January 15, 2028............................................... -- 199,226
------------ ------------
Total long-term debt............................................................ 1,015,294 1,413,784
------------ ------------
Shareholders' equity:
Class A Common Stock ($.01 par value; one vote per share; 399,500 shares authorized;
297,204 shares issued and outstanding)............................................ 2,972 2,972
Class B Common Stock ($.01 par value; five votes per share; 100,500 shares
authorized; no shares issued and outstanding)..................................... -- --
Paid-in capital..................................................................... 866,097 866,097
Retained earnings................................................................... 2,731,213 2,731,213
Other............................................................................... 4,816 4,816
------------ ------------
Total shareholders' equity...................................................... 3,605,098 3,605,098
------------ ------------
Total capitalization.......................................................... $ 4,620,392 $ 5,018,882
------------ ------------
------------ ------------
- ------------------------
(1) The commercial paper program is backed by the Unsecured Revolving Credit
Facility due 2001 and, as such, has been classified as long-term.
(2) The aggregate principal amount of the 2000 Notes is $200,000,000, and the
initial aggregate offering price to the public of the 2000 Notes is
$199,782,000.
(3) The aggregate principal amount of the 2008 Notes is $200,000,000, and the
initial aggregate offering price to the public of the 2008 Notes is
$199,482,000.
S-4
RECENT DEVELOPMENTS
The Company's net income for the quarter ended February 28, 1998, increased
28.8% to $109.9 million ($0.37 basic and diluted per share) from $85.4 million
($0.29 basic and diluted per share) for the comparable period in fiscal 1997.
Revenues for the quarter ended February 28, 1998, increased 7.1% to $557.8
million from $521.1 million for the comparable period in fiscal 1997.
In April 1998, the Company announced that it and a group of investors had
entered into an agreement to acquire the business of Cunard Line for $500
million. Cunard Line operates five cruise ships in the luxury market. The
Company anticipates that Seabourn Cruise Line, which is 50% owned by the
Company, will be merged with Cunard simultaneously with the closing of the
acquisition. The Company expects to own approximately a two-thirds interest in
the combined Cunard/Seabourn entity, which is expected to be the largest cruise
company in the luxury segment of the cruise market. Because the Cunard
acquisition is subject to the expiration of the Hart-Scott-Rodino waiting period
and other customary closing conditions, no assurance can be given that the
acquisition will be successfully closed on the terms summarized above.
S-5
SUMMARY FINANCIAL DATA
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
YEAR ENDED NOVEMBER 30,
-----------------------------------------------------
1997 1996(1) 1995 1994 1993
--------- --------- --------- --------- ---------
OPERATIONS DATA:
Revenues...................................................... $2,447,468 $2,212,572 $1,998,150 $1,806,016 $1,556,919
Operating income before income from affiliated operations..... 660,979 551,461 490,038 443,674 347,666
Income from affiliated operations, net........................ 53,091 45,967 -- -- --
--------- --------- --------- --------- ---------
Operating income.............................................. 714,070 597,428 490,038 443,674 347,666
--------- --------- --------- --------- ---------
Net income.................................................... 666,050 566,302 451,091 381,765 318,170
Earnings per share(2):
Basic....................................................... $ 2.24 $ 1.96 $ 1.59 $ 1.35 $ 1.13
Diluted..................................................... $ 2.23 $ 1.92 $ 1.57 $ 1.34 $ 1.12
Dividends declared per share.................................. $ .48 $ .38 $ .32 $ .29 $ .28
Weighted average shares--diluted.............................. 298,210 295,720 290,838 289,362 289,092
Passenger cruise days......................................... 11,908 10,583 9,201 8,102 7,003
Percentage of total cruise capacity(3)........................ 108.3% 107.6% 105.0% 104.0% 105.3%
Ratio of earnings to fixed charges(4)......................... 9.0x 6.4x 6.2x 5.8x 5.7x
AS OF NOVEMBER 30, 1997
-------------------------------
ACTUAL AS ADJUSTED(5)
--------------- --------------
BALANCE SHEET DATA:
Cash and cash equivalents and short-term investments............................. $ 149,727 $ 149,727
Total current assets............................................................. 336,025 336,025
Total assets..................................................................... 5,426,775 5,825,265
Customer deposits(6)............................................................. 420,908 420,908
Total current liabilities........................................................ 786,142 786,142
Long-term debt................................................................... 1,015,294 1,413,784
Total shareholders' equity....................................................... 3,605,098 3,605,098
- ------------------------
(1) In 1996, the Company recognized a $32.0 million gain from the settlement of
bankruptcy claims against Wartsila Marine Industries Incorporated and a loss
of $15.8 million on the sale of the receivable generated from the sale of
Carnival's Crystal Palace Resort and Casino (the "CCP Resort").
(2) Effective December 1, 1997, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 128 which requires the disclosure of basic
and diluted earnings per share and all per share amounts have been restated
to reflect the adoption of SFAS 128.
(3) In accordance with cruise industry practice, total capacity is calculated
based on two passengers per cabin, even though some cabins can accommodate
three or four passengers. The percentages in excess of 100% indicate that
more than two passengers occupied some cabins.
(4) The ratio of earnings to fixed charges has been computed by dividing
earnings from continuing operations available for fixed charges (income from
continuing operations before income taxes adjusted for interest expense and
one-third of rent expense) by fixed charges. Fixed charges include interest
costs (interest expense plus capitalized interest and one-third of rent
expense). The Company has assumed that one-third of rent expense is
representative of the interest factor.
(5) As adjusted to give effect to (i) the sale of the Notes and the use of the
net proceeds thereof to repay indebtedness as described under "Use of
Proceeds", (ii) the sale of the 2028 Debentures in January 1998 and the use
of approximately $197 million of the net proceeds thereof to fund a portion
of the purchase price of the Elation, and (iii) the issuance of $397 million
of commercial paper in March 1998, the use of approximately $200 million of
the net proceeds thereof to repay at maturity the 1998 Notes and the use of
the remaining net proceeds to fund the construction of a new vessel for
Holland America Line.
(6) Represents customer deposits for cruises and tours which will be recognized
as revenue when earned in the future.
S-6
DESCRIPTION OF NOTES
THE FOLLOWING DESCRIPTION OF THE PARTICULAR TERMS OF THE NOTES OFFERED
HEREBY (REFERRED TO IN THE PROSPECTUS AS "DEBT SECURITIES") SUPPLEMENTS, AND TO
THE EXTENT INCONSISTENT THEREWITH REPLACES, THE DESCRIPTION OF THE GENERAL TERMS
AND PROVISIONS OF DEBT SECURITIES SET FORTH IN THE PROSPECTUS, TO WHICH
DESCRIPTION REFERENCE IS HEREBY MADE.
The 2000 Notes and the 2008 Notes offered hereby will each be limited to
$200,000,000 aggregate principal amount and each will constitute a series of
Debt Securities of the Company. The 2000 Notes will bear interest at the rate of
5.65% per annum and the 2008 Notes will bear interest at the rate of 6.15% per
annum. The Notes will bear interest from April 15, 1998, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
payable semiannually on April 15 and October 15, commencing October 15, 1998, to
the persons in whose names the Notes are registered at the close of business on
April 1 and October 1, as the case may be, preceding such April 15 and October
15. Principal of and interest on the Notes will be payable at the office of
First Trust National Association, the Trustee under the Indenture, in the
Borough of Manhattan, The City of New York, or at such other office designated
by the Company; PROVIDED, HOWEVER, that at the option of the Company, payment of
interest may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the Note Register.
The 2000 Notes will mature on October 15, 2000 and the 2008 Notes will
mature on April 15, 2008. Except as described in "Description of Debt
Securities--Redemption or Assumption of Debt Securities under Certain
Circumstances" in the Prospectus, the Notes will not be redeemable by the
Company prior to maturity.
BOOK-ENTRY SYSTEM
The 2000 Notes and the 2008 Notes each will be issued in the form of a
global Note (each, a "Global Note"). Each Global Note will be deposited with, or
on behalf of, The Depository Trust Company, as Depository (the "Depository"),
and registered in the name of the Depository or its nominee. Except as set forth
below, a Global Note may be transferred, in whole and not in part, only to the
Depository or another nominee of the Depository. Investors may hold their
beneficial interests in a Global Note directly through the Depository if they
have an account with the Depository, or indirectly through organizations which
have accounts with the Depository.
The Depository has advised the Company that the Depository is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and "a clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934 (the "Exchange Act"). The Depository was created to hold securities
of institutions that have accounts with the Depository ("participants") and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. The Depository's participants include securities
brokers and dealers (which may include the Underwriters), banks, trust
companies, clearing corporations and certain other organizations. Access to the
Depository's book-entry system is also available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, whether directly or indirectly.
Upon the issuance of the Global Notes, the Depository will credit, on its
book-entry registration and transfer system, the principal amount of the 2000
Notes or the 2008 Notes, as applicable, represented by such Global Note to the
accounts of participants. The accounts to be credited shall be designated
initially by the Underwriters. Ownership of beneficial interests in a Global
Note will be limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests in a Global Note will be shown
on, and the transfer of those ownership interests will be effected only through,
records maintained by the Depository (with respect to participants' interests)
and such participants (with respect to the owners of beneficial interests in a
Global Note other than participants). The laws of some jurisdictions may require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and laws may impair the ability to transfer or
pledge beneficial interests in a Global Note.
S-7
So long as the Depository, or its nominee, is the registered holder and
owner of a Global Note, the Depository or such nominee, as the case may be, will
be considered the sole legal owner and holder of such Notes for all purposes of
such Notes and the Indenture. Except as set forth below, owners of beneficial
interests in a Global Note will not be entitled to have the Notes represented by
the Global Note registered in their names, will not receive or be entitled to
receive physical delivery of certificated Notes in definitive form and will not
be considered to be the owners or holders of any Notes under such Global Note.
The Company understands that under existing industry practice, in the event an
owner of a beneficial interest in a Global Note desires to take any action that
the Depository, as the holder of such Global Note, is entitled to take, the
Depository would authorize the participants to take such action, and that the
participants would authorize beneficial owners owning through such participants
to take such action or would otherwise act upon the instructions of beneficial
owners owning through them.
Payment of principal of and interest on Notes represented by a Global Note
registered in the name of and held by the Depository or its nominee will be made
to the Depository or its nominee, as the case may be, as the registered owner
and holder of a Global Note.
The Company expects that the Depository or its nominee, upon receipt of any
payment of principal of, or interest on, a Global Note, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of a Global Note as
shown on the records of the Depository or its nominee. The Company also expects
that payments by participants to owners of beneficial interests in a Global Note
held through such participants will be governed by standing instructions and
customary practices and will be the responsibility of such participants. The
Company will not have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in a Global Note for any Notes, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests or for any
other aspect of the relationship between the Depository and its participants or
the relationship between such participants and the owners of beneficial
interests in a Global Note owning through such participants.
Unless and until it is exchanged in whole or in part for certificated 2000
Notes or 2008 Notes, as applicable, in definitive form, a Global Note may not be
transferred except as a whole by the Depository to a nominee of such Depository
or by a nominee of such Depository to such Depository or another nominee of such
Depository.
Although the Depository has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Notes among participants of the
Depository, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. Neither the
Trustee nor the Company will have any responsibility for the performance by the
Depository or its participants or indirect participants or their respective
obligations under the rules and procedures governing their operations.
If the Depository is at any time unwilling or unable to continue as
Depository or ceases to be registered or in good standing under the Exchange Act
and a successor Depository is not appointed by the Company within 90 days after
the Company receives notice or becomes aware of such condition, the Company will
issue 2000 Notes or 2008 Notes, as applicable, in definitive certificated form
in exchange for the applicable Global Note. In addition, the Company may at any
time and in its sole discretion determine not to have any of the 2000 Notes or
2008 Notes represented by a Global Note and, in such event, will issue 2000
Notes or 2008 Notes, as applicable, in definitive certificated form in exchange
for the Global Note representing such Notes.
SETTLEMENT AND PAYMENT
Settlement for the Notes will be made in immediately available funds. All
payments of principal and interest will be made by the Company in immediately
available funds. The Notes will trade in the Depository's settlement system
until maturity, and secondary market trading in the Notes will therefore be
required by the Depository to settle in immediately available funds.
S-8
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Company has agreed to sell to each of the Underwriters named below, and each
of the Underwriters has severally agreed to purchase, the principal amount of
the Notes set forth opposite its name below.
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
UNDERWRITER 2000 NOTES 2008 NOTES
- ------------------------------------------------------------- -------------- --------------
Bear, Stearns & Co. Inc...................................... $ 150,000,000 $ 150,000,000
Chase Securities Inc. ....................................... 50,000,000 50,000,000
-------------- --------------
Total...................................................... $ 200,000,000 $ 200,000,000
-------------- --------------
-------------- --------------
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Notes, if any are
taken.
The Underwriters propose to offer the Notes in part directly to the public
at the initial public offering prices set forth on the cover page of this
Prospectus Supplement and in part to certain securities dealers at such prices
less a concession of 0.15% of the principal amount of the 2000 Notes and 0.40%
of the principal amount of the 2008 Notes. The Underwriters may allow, and such
dealers may reallow, a concession not to exceed 0.10% of the principal amount of
the 2000 Notes and 0.25% of the principal amount of the 2008 Notes to certain
brokers and dealers. After the Notes are released for sale to the public, the
offering prices and other selling terms may from time to time be varied by the
Underwriters.
The Notes are new issues of securities with no established trading market.
The Company has been advised by the Underwriters that the Underwriters intend to
make a market in the Notes but are not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes.
Settlement for the Notes will be made in immediately available funds, and
all secondary trading in the Notes will settle in immediately available funds.
See "Description of Notes--Settlement and Payment."
In order to facilitate the offering, certain persons participating in the
offering may engage in transactions that stabilize, maintain or otherwise affect
the prices of the Notes during and after the offering. Specifically, the
Underwriters may over-allot or otherwise create a short position in the Notes
for their own account by selling more Notes than have been sold to them by the
Company. The Underwriters may elect to cover any such short position by
purchasing Notes in the open market. In addition, such persons may stabilize or
maintain the prices of the Notes by bidding for or purchasing Notes in the open
market and may impose penalty bids, under which selling concessions allowed to
syndicate members or other broker-dealers participating in the offering are
reclaimed if Notes previously distributed in the offering are repurchased in
connection with stabilization transactions or otherwise. The effect of these
transactions may be to stabilize or maintain the market prices of the Notes at
levels above those which might otherwise prevail in the open market. The
imposition of a penalty bid may also affect the prices of Notes to the extent
that it discourages resales thereof. No representation is made as to the
magnitude or effect of any such stabilization or other transactions. Such
transactions, if commenced, may be discontinued at any time.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
Mr. Uzi 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 Underwriter in this offering. In addition, Bear
Stearns has served as an underwriter in previous public offerings by the Company
(including the offering of the 2028 Debentures). In addition, Bear Stearns has
provided other investment banking and consulting services to the Company during
the fiscal years ended November 30, 1997, 1996 and 1995, and during the current
fiscal year. It is expected that Bear Stearns may continue to provide investment
banking and consulting services to the Company when so requested by the Company.
An affiliate of Chase Securities Inc. engages in various general financing and
banking transactions with a subsidiary of the Company.
S-9
VALIDITY OF THE NOTES
The validity of the Notes will be passed upon for the Company with respect
to New York law by Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York
and for the Underwriters with respect to New York law by Sullivan & Cromwell,
New York, New York. The validity of the Notes with respect to Panamanian law
will be passed upon by Tapia Linares y Alfaro, Panama City, Republic of Panama.
James M. Dubin, a partner of Paul, Weiss, Rifkind, Wharton & Garrison, is the
sole stockholder of the trustee of the Micky Arison 1994 "B" Trust, a trust
whose primary beneficiary is Micky Arison, the Chairman and Chief Executive
Officer of the Company. In addition, Mr. Dubin is a director of the Company.
Paul, Weiss, Rifkind, Wharton & Garrison also serves as counsel to Micky Arison.
See "Certain Considerations-- Control by Principal Shareholders" in the
accompanying Prospectus.
S-10
$800,000,000
CARNIVAL CORPORATION
CLASS A COMMON STOCK, DEBT SECURITIES AND WARRANTS
Carnival Corporation (the "Company") may offer from time to time in one or
more series up to $800,000,000 aggregate public offering price (or its
equivalent (based on the applicable exchange rate at the time of sale) if issued
with principal amounts denominated in one or more foreign currencies or currency
units as shall be designated by the Company) of (i) shares of its Class A Common
Stock ("Class A Common Stock"), (ii) its debt securities ("Debt Securities"),
consisting of notes, debentures or other evidences of indebtedness denominated
in United States dollars or any other currency, including composite currencies
such as the European Currency Unit, and (iii) warrants to purchase Class A
Common Stock or Debt Securities or any combination thereof or to buy and sell
government debt securities, foreign currencies, currency units or units of a
currency index or basket, units of a stock index or basket or a commodity or
commodity index ("Warrants") on terms to be determined at or prior to the time
of sale. The Class A Common Stock, Debt Securities and Warrants are collectively
referred to as the "Securities."
The Securities may be offered independently or together for sale. This
Prospectus will be supplemented by one or more prospectus supplements (each, a
"Prospectus Supplement") which will set forth,
(i) in the case of Class A Common Stock, the number of shares and the initial
public offering price; (ii) in the case of Debt Securities, the specific
designation, aggregate principal amount, ranking as senior debt ("Senior
Securities") or subordinated debt ("Subordinated Securities"), purchase price,
maturity, rate (or method of calculation thereof) and time of payment of
interest, if any, any conversion or exchange provisions, any redemption
provisions, any subordination provisions and any other specific terms of the
Debt Securities offered hereby not set forth herein under the caption
"Description of Debt Securities" in this Prospectus, and any listing thereof on
a securities exchange; and, (iii) in the case of the Warrants, the duration,
purchase price, exercise price, detachability and any other specific terms not
set forth herein of such Warrants.
The Class A Common Stock is listed on the New York Stock Exchange ("NYSE"),
under the symbol "CCL." Any Class A Common Stock sold pursuant to a Prospectus
Supplement will be listed on the NYSE, subject to official notice of issuance.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Company may sell the Securities to or through underwriters, and also may
sell the Securities directly to other purchasers or through agents. See "Plan of
Distribution." In addition, the Securities may be sold to dealers at the
applicable price to the public set forth in the Prospectus Supplement relating
to the Securities who later resell to investors. Such dealers may be deemed to
be "underwriters" within the meaning of the Securities Act of 1933, as amended.
If any agents of the Company, or any underwriters, are involved in the sale of
any Securities, the names of such agents or underwriters and any applicable
commissions or discounts are set forth in the accompanying Prospectus
Supplement.
Any statement contained in this Prospectus will be deemed to be modified or
superseded by any inconsistent statement contained in the accompanying
Prospectus Supplement.
The date of this Prospectus is January 21, 1998.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 or at its Regional Offices located at Room
1400, 500 West Madison Street, Chicago, Illinois 60661 and 7 World Trade Center,
13th Floor, New York, New York 10048, and copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such materials can
also be inspected on the Internet at http://www.sec.gov. In addition, reports,
proxy statements and other information concerning the Company can also be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005, on which the Company's Class A Common Stock is listed.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), with respect to the Securities offered hereby. This Prospectus and any
applicable Prospectus Supplement do not contain all the information set forth in
the Registration Statement, certain parts of which have been omitted pursuant to
the rules and regulations of the Commission. The information so omitted may be
obtained from the Commission's principal office in Washington, D.C. upon payment
of the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended November
30, 1996, the Company's Current Report on Form 8-K filed with the Commission on
June 26, 1997 and the Company's Quarterly Reports on Form 10-Q for the three
months ended February 28, 1997, May 31, 1997 and August 31, 1997, filed with the
Commission (File No. 1-9610) pursuant to the Exchange Act, are incorporated
herein by reference.
All other documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Securities made hereby shall be
deemed incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated or deeemed to be incorporated herein by reference, or contained in
this Prospectus, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus and any Prospectus Supplement have been delivered, upon written or
oral request of such person, a copy (without exhibits other than exhibits
specifically incorporated by reference) of any or all documents incorporated by
reference into this Prospectus. Requests for such copies should be directed to
Investor Relations, Carnival Corporation, 3655 N.W. 87th Avenue, Miami, Florida
33178-2428; telephone number (305) 599-2600.
2
THE COMPANY
The Company is the world's largest multiple-night cruise company based on
the number of passengers carried, revenues generated and available capacity. The
Company offers a broad range of cruise products, serving the contemporary cruise
market through Carnival Cruise Lines, the premium market through Holland America
Line and the luxury market through Windstar Cruises. In total, the Company owns
and operates 22 cruise ships with an aggregate capacity of 31,078 passengers
based on two passengers per cabin. The eleven Carnival Cruise Lines ships have
an aggregate capacity of 20,332 passengers with itineraries primarily in the
Caribbean, Mexican Riviera and Alaska. The eight Holland America Line ships have
an aggregate capacity of 10,302 passengers, with itineraries in the Caribbean,
the Mediterranean and Alaska and through the Panama Canal, as well as other
worldwide itineraries. The three Windstar ships have an aggregate capacity of
444 passengers with itineraries in the Caribbean, Costa Rica, the Mediterranean
and the Far East. The Company also owns equity interests in Seabourn Cruise
Line, Costa Cruises and Airtours plc, an integrated leisure travel group. The
three Seabourn ships have an aggregate capacity of 612 passengers with
itineraries in the Caribbean, the Baltic, the Mediterranean and the Far East.
The seven Costa Cruises ships have an aggregate capacity of 7,710 passengers
with itineraries in the Mediterranean, Northern Europe, the Carribean and South
America. Airtours owns tour operators, charter airlines, travel agencies, three
cruise ships and holiday hotels.
The Company has signed agreements with a Finnish shipyard providing for the
construction of two additional SuperLiners, each with a capacity of 2,040
passengers, for Carnival Cruise Lines with delivery expected in February 1998
and November 1998. The Company also has agreements with an Italian shipyard for
the construction of two cruise ships, each with a capacity of 2,640 passengers,
for Carnival Cruise Lines with delivery expected in June 1999 and July 2000 and
for the construction of two cruise ships with a capacity of 1,440 passengers for
Holland America Line, with delivery expected in May 1999 and December 1999.
The Company also operates a tour business, through Holland America
Line-Westours Inc. ("Holland America Westours"), which markets sightseeing tours
both separately and as a part of Holland America Line cruise/tour packages.
Holland America Westours operates 14 hotels in Alaska and the Canadian Yukon,
two luxury day-boats offering tours to the glaciers of Alaska and the Yukon
River, over 290 motor coaches used for sightseeing and charters in the states of
Washington and Alaska and in the Canadian Rockies and 12 private domed rail cars
which are run on the Alaskan railroad between Anchorage and Fairbanks.
The Company was incorporated under the laws of the Republic of Panama in
November 1974. The Company's executive offices are located at 3655 N.W. 87th
Avenue, Miami, Florida 33178-2428, telephone number (305) 599-2600. The
Company's registered office in Panama is located at 10 Elvira Mendez Street,
Interseco Building, Panama, Republic of Panama.
CERTAIN CONSIDERATIONS
INCOME TAXES
Non-U.S. companies are exempt from U.S. corporate income tax on U.S. source
income from international passenger cruise operations if (i) their countries of
incorporation exempt shipping operations of U.S. persons from income tax (the
"Incorporation Test") and (ii) they meet either the "CFC Test" or the "Publicly
Traded Test." The Company and its subsidiaries involved in the cruise ship
operations meet the Incorporation Test because they are incorporated in
countries which provide the required exemption to U.S. persons involved in
shipping operations. A company meets the CFC Test if it is a controlled foreign
corporation ("CFC"). A CFC is defined by the Internal Revenue Code as a foreign
corporation more than 50% of the vote or value of whose stock is owned by U.S.
persons, each of whom owns or is considered to own 10% or more of the
corporation's vote on any day during its fiscal year. Through July 15, 1997, the
date upon which all of the Class B Common Stock of the Company (the "Class B
Common Stock") was converted to Class A Common Stock (the "Conversion Date"),
all of the outstanding shares of Class B
3
Common Stock of the Company, which represented more than 50% of the total
combined voting power of all classes of stock, were owned by 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. The B Trust is a "United States
Person." Accordingly, the Company believes that it will meet the CFC Test for
its 1997 taxable year, but will not meet such test in its 1998 taxable year and
subsequent taxable year.
A corporation meets the Publicly Traded Test if the stock of the corporation
(or the direct or indirect corporate parent thereof) is "primarily and regularly
traded on an established securities market" in the United States. Although no
Treasury regulations have been promulgated that explain when stock is primarily
and regularly traded for purposes of this exemption, Treasury regulations have
been promulgated interpreting a similar phrase under another section, Section
884. Under the Section 884 regulations, stock is considered primarily and
regularly traded if (i) 80% (by vote and value) of the stock of the corporation
is listed on an established securities market in the United States where more
shares are traded than in any other country, (ii) trades of such stock are
effected on such market, other than in de minimis quantities, on at least 60
days during the taxable year, (iii) the aggregate number of shares so traded is
equal to 10% or more of the average number of shares outstanding during the
taxable year, and (iv) the company is not "closely held." The Company believes
that it will meet the foregoing requirements for the portion of its taxable year
beginning after the Conversion Date and for future taxable years. Since the
Conversion Date, the Company has had only one class of stock outstanding, the
Class A Common Stock, which is listed on the New York Stock Exchange, where more
shares trade than in any other country. Trades of such Class A Common Stock have
been effected in more than de minimis quantities on every business day since the
Company's initial public offering, and the annual volume of such trades has
significantly exceeded 10% of the average number of shares outstanding.
Moreover, the Company believes that any stock traded on the NYSE are considered
as traded on a qualifying exchange and, to the Company's knowledge, it is not
closely held because no person other than members of the Arison family and
certain related entities (the "Arison Group") owns more than 5% of its stock and
the Arison Group holds less than 50% of the outstanding shares.
Accordingly, the Company believes that virtually all of its income (with the
exception of its United States source income from the operations of the
transportation, hotel and tour business of Holland America Line) is exempt from
United States federal income taxes. There is, however, no authority that
addresses the treatment of a corporation that meets the test for a CFC for only
part of its taxable year. Similarly, there is no authority that addresses the
treatment of a corporation that meets the Publicly Traded Test for only a part
of its taxable year. If the Company or its subsidiaries were found to meet
neither the CFC Test nor the Publicly Traded Test, much of their income would
become subject to taxation by the United States at higher than normal corporate
tax rates.
CONTROL BY PRINCIPAL SHAREHOLDERS
Ted Arison (the Company's founder), the B Trust, certain members of the
Arison family and trusts for the benefit of Ted Arison's children (collectively,
the "Principal Shareholders"), beneficially own on the date hereof, in the
aggregate, approximately 47.1% of the outstanding capital stock of the Company.
As a result, the Principal Shareholders have the power to substantially
influence the election of directors and the Company's affairs and policies.
Micky Arison, the Chairman and Chief Executive Officer of the Company, has the
sole right to vote and direct the sale of the Class A Common Stock held by the B
Trust, subject, during Ted Arison's lifetime, to the consent of the trustee of
the B Trust.
SOURCE OF INTEREST ON THE DEBT SECURITIES
Under the "branch tax" rules of the Code, it is possible that,
notwithstanding that the Company is a Panamanian corporation, some or all
interest payable on the Securities may be treated as United States source income
for United States federal income tax purposes.
4
USE OF PROCEEDS
Except as otherwise provided in the applicable Prospectus Supplement, the
net proceeds to the Company from the sale of the Securities offered hereby will
be added to the working capital of the Company and will be available for general
corporate purposes, which may include the repayment of indebtedness, the
financing of capital commitments and possible future acquisitions associated
with the continued expansion of the Company's business. Pending application as
set forth above, the net proceeds will be invested in marketable securities,
including, without limitation, certificates of deposit and commercial paper.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of "earnings" to "fixed charges" for the Company and its
subsidiaries were as follows for the nine months ended August 31, 1997 and 1996
and for the five years ended November 30, 1996:
NINE MONTHS
ENDED AUGUST 31, YEARS ENDED NOVEMBER 30,
- -------------------- -----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
- --------- --------- --------- --------- --------- --------- ---------
9.9x 7.2x 6.4x 6.2x 5.8x 5.7x 4.4x
The ratio of earnings to fixed charges has been computed by dividing
earnings from continuing operations available for fixed charges (income from
continuing operations before income taxes adjusted for interest expense and
one-third of rent expense) by fixed charges. Fixed charges include interest
costs (interest expense plus capitalized interest and one-third of rent
expense). The Company has assumed that one-third of rent expense is
representative of the interest factor.
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities are to be issued in one or more series under an
indenture dated as of March 1, 1993, as supplemented from time to time (the
"Senior Indenture"), between the Company and First Trust National Association
(the "Senior Trustee"), as Trustee, and the Subordinated Securities will be
issued under an indenture to be dated as of a date prior to the first issuance
of Subordinated Securities, as supplemented from time to time (the "Subordinated
Indenture"), between the Company and a trustee to be named in the applicable
Prospectus Supplement (the "Subordinated Trustee"). The term "Indenture" as used
herein refers to either the Senior Indenture or the Subordinated Indenture, as
appropriate, and the term "Trustee" as used herein refers to either the Senior
Trustee or the Subordinated Trustee, as appropriate. Each Indenture will be
subject to and governed by the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The following statements with respect to the Debt
Securities are subject to the detailed provisions of the Indenture, the form of
which is filed as an exhibit to the Registration Statement. Parenthetical
references below are to the Indenture (or the Form of Security contained therein
if so specified) and, whenever any particular provision of the Indenture or any
term used therein is referred to, such provision or term is incorporated by
reference as a part of the statement in connection with which such reference is
made, and the statement in connection with which such reference is made is
qualified in its entirety by such reference.
The particular terms of each series of Debt Securities, as well as any
modification or addition to the general terms of the Debt Securities as herein
described, which may be applicable to a particular series of Debt Securities,
are described in the Prospectus Supplement relating to such series of Debt
Securities and will be set forth in a filing with the Commission. Accordingly,
for a description of the terms of a particular series of Debt Securities,
reference must be made to both the Prospectus Supplement relating to such series
and to the description of Debt Securities set forth in this Prospectus.
5
GENERAL
The Senior Debt Securities and Subordinated Debt Securities offered hereby
will be limited to $800,000,000 and $730,000,000, respectively, aggregate
principal amount (or (i) its equivalent (based on the applicable exchange rate
at the time of sale), if Senior Debt Securities and Subordinated Debt Securities
are issued with principal amounts denominated in one or more foreign currencies,
composite currencies or currency units as shall be designated by the Company, or
(ii) such greater amount, if Senior Debt Securities and Subordinated Debt
Securities are issued at an original issue discount, as shall result in
aggregate proceeds of $800,000,000 and $730,000,000, respectively, to the
Company). The Indenture provides that additional Debt Securities may be issued
thereunder up to the aggregate principal amount, which is not limited by the
Indenture, authorized from time to time by the Company's Board of Directors or
any duly authorized committee thereof. The Indenture also provides that there
may be more than one Trustee under the Indenture, each with respect to one or
more different series of Debt Securities. See also "Trustee" herein. The effect
of the provisions contemplating that there might be more than one Trustee acting
for different series of Debt Securities is that, in that event, those Debt
Securities (whether of one or more than one series) for which each Trustee is
acting would be treated as if issued under a separate Indenture.
The applicable Prospectus Supplement will set forth a description of the
particular series of Debt Securities being offered thereby, including: (1) the
designation or title of such Debt Securities; (2) the aggregate principal amount
of such Debt Securities; (3) the percentage of their principal amount at which
such Debt Securities will be offered; (4) the date or dates on which the
principal of such Debt Securities will be payable; (5) the rate or rates (which
may be either fixed or variable) and/or the method of determination of such rate
or rates at which such Debt Securities shall bear interest, if any; (6) the date
or dates from which any such interest shall accrue, or the method of
determination of such date or dates, and the date or dates on which any such
interest shall be payable; (7) the terms for redemption, extension or early
repayment of such Debt Securities, if any; (8) if other than denominations of
$1,000 and any integral multiple thereof, the denominations in which such Debt
Securities are authorized to be issued; (9) the currencies in which such Debt
Securities are issued or payable; (10) the provisions for a sinking fund, if
any; (11) if other than the principal amount thereof, the portion of the
principal amount of such Debt Securities that will be payable upon the
declaration of acceleration of the maturity thereof; (12) any additional
restrictive covenants included for the benefit of the holders of such Debt
Securities; (13) any additional Event of Default with respect to such Debt
Securities; (14) whether such Debt Securities are issuable as a Global Security
or securities; (15) any applicable tax consequences with respect to such Debt
Securities; (16) the terms and conditions, if any, pursuant to which such Debt
Securities are convertible into or exchangeable for Class A Common Stock or
other securities; (17) the applicability of the provisions described in
"--Defeasance" below; (18) any subordination provisions applicable to such Debt
Securities in addition to or different than those described under
"--Subordination" below; and (19) any other term or provision relating to such
Debt Securities which is not inconsistent with the provisions of the Indenture.
One or more series of Debt Securities may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. Federal income tax
consequences and special considerations applicable thereto will be described in
the Prospectus Supplement relating to any such series of Debt Securities.
Except as otherwise provided in the applicable Prospectus Supplement,
principal, premium, if any, and interest, if any, will be payable at an office
or agency to be maintained by the Company, except that at the option of the
Company interest may be paid by check mailed to the person entitled thereto.
(Form of Security and Sections 10.1 and 10.2).
The Debt Securities will be issued only in fully registered form without
coupons and may be presented for registration of transfer or exchange at the
corporate trust office of the Trustee. No service charge will be made for any
transfer or exchange of the Debt Securities, but the Company may require payment
of a
6
sum to cover any tax or other governmental charge payable in connection
therewith. Not all Debt Securities of any one series need be issued at the same
time, and, unless otherwise provided, a series may be reopened for issuances of
additional Debt Securities of such series. (Sections 3.1 and 3.5).
The Indenture does not contain any covenants or provisions that are
specifically intended to afford holders of the Debt Securities protection in the
event of a highly leveraged transaction. With respect to any specific series of
Debt Securities, the existence or non-existence of such covenants or provisions
will be disclosed in the applicable Prospectus Supplement.
Neither Panamanian law nor the Company's Articles of Incorporation or
By-laws impose limitations on the right of non-resident or foreign owners to
hold Debt Securities. While no tax treaty currently exists between the Republic
of Panama and the United States, under current law the Company believes that
interest payments to holders of its Debt Securities are not subject to taxation
under the laws of the Republic of Panama.
BOOK-ENTRY SYSTEM
The Debt Securities of a series may be issued in the form of one or more
Global Securities that will be deposited with a depository (the "Depository") or
with a nominee for the Depository identified in the applicable Prospectus
Supplement and will be registered in the name of the Depository or a nominee
thereof. In such a case one or more Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding Debt Securities of the series to be represented
by such Global Security or Securities. Unless and until it is exchanged in whole
or in part for Debt Securities in definitive certificated form, a Global
Security may be transferred, in whole but not in part, only to another nominee
of the Depository for such series, or to a successor Depository for such series
selected or approved by the Company, or to a nominee of such successor
Depository. (Section 2.5).
The specific depository arrangement with respect to any series of Debt
Securities to be represented by a Global Security will be described in the
applicable Prospectus Supplement.
PAYMENT OF ADDITIONAL AMOUNTS
The Company will agree that any amounts to be paid by the Company with
respect to the Debt Securities will be paid without deduction or withholding for
any and all present and future taxes, levies, imposts or other governmental
charges whatsoever imposed, assessed, levied or collected by or for the account
of the Republic of Panama (or by or for the account of the jurisdiction of
incorporation (other than the United States) of a successor corporation to the
Company, to the extent that such taxes first become applicable as a result of
the successor corporation becoming the obligor on the Debt Securities) or any
political subdivision or taxing authority thereof or therein ("Panamanian
Taxes") or, if deduction or withholding of any Panamanian Taxes shall at any
time be required by the Republic of Panama (or the jurisdiction of incorporation
(other than the United States) of a successor corporation to the Company) or any
such subdivision or authority, the Company will (subject to compliance by the
holders or beneficial owners of the relevant Debt Securities with any relevant
administrative requirements) pay such additional amounts ("Additional Amounts")
in respect of principal, premium, if any, interest, if any, and sinking fund or
analogous payments, if any, as may be necessary in order that the net amounts
paid to the holders of the Debt Securities or the Trustee under the Indenture,
as the case may be, after such deduction or withholding, shall equal the
respective amounts of principal, premium, if any, interest, if any, and sinking
fund or analogous payments, if any, as specified in the Debt Securities to which
such holders or the Trustee are entitled; PROVIDED, HOWEVER, that the foregoing
shall not apply to (i) any present or future Panamanian Taxes which would not
have been so imposed, assessed, levied or collected but for the fact that the
holder or beneficial owner of the relevant Debt Security being or having been a
domiciliary, national or resident of, or engaging or having been engaged in
business or maintaining or having maintained a permanent
7
establishment or being or having been physically present in, the Republic of
Panama (or the jurisdiction of incorporation of a successor corporation to the
Company) or such political subdivision or otherwise having or having had some
connection with the Republic of Panama (or the jurisdiction of incorporation of
a successor corporation to the Company) or such political subdivision other than
the holding or ownership of a Debt Security, or the collection of principal of
and interest, if any, on, or the enforcement of, a Debt Security, (ii) any
present or future Panamanian Taxes which would not have been so imposed,
assessed, levied or collected but for the fact that, where presentation is
required, the relevant Debt Security was presented more than thirty days after
the date such payment became due or was provided for, whichever is later, or
(iii) any present or future Panamanian Taxes which would not have been so
imposed, assessed, levied or collected but for the failure to comply with any
certification, identification or other reporting requirements concerning the
nationality, residence, identity or connection with the Republic of Panama (or
the jurisdiction of incorporation of a successor corporation to the Company) or
any political subdivision thereof of the holder or beneficial owner of the
relevant Debt Security, if compliance is required by statute or by rules or
regulations of the Republic of Panama (or the jurisdiction of incorporation of a
successor corporation to the Company) or such political subdivision as a
condition to relief or exemption from Panamanian Taxes. The provisions described
in (i) through (iii) above are referred to herein as "Excluded Taxes." The
Company or any successor to the Company, as the case may be, will indemnify and
hold harmless each holder of the Debt Securities and upon written request
reimburse each holder for the amount of (i) any Panamanian Taxes levied or
imposed and paid by such holder of the Debt Securities (other than Excluded
Taxes) as a result of payments made with respect to the Debt Securities, (ii)
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, and (iii) any Panamanian Taxes with respect to payment of
Additional Amounts or any reimbursement pursuant to this sentence. The Company
or any successor to the Company, as the case may be, will also (1) make such
withholding or deduction and (2) remit the full amount deducted or withheld to
the relevant authority in accordance with applicable law. The Company or any
successor to the Company, as the case may be, will furnish the Trustee within 30
days after the date the payment of any Panamanian Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such payment by the
Company or any successor to the Company, as the case may be, which the Trustee
will forward to the holders of the Debt Securities.
At least 30 days prior to each date on which any payment under or with
respect to the Debt Securities is due and payable, if the Company will be
obligated to pay Additional Amounts with respect to such payments, the Company
will deliver to the Trustee an officers' certificate stating the fact that such
Additional Amounts will be payable, stating the amounts so payable and setting
forth such other information as may be necessary to enable the Trustee to pay
such Additional Amounts to holders of the Debt Securities on the payment date.
Whenever in the Indenture or any Debt Securities there is mentioned, in any
context, the payment of the principal, premium, if any, or interest, or sinking
fund or analogous payment, if any, in respect of such Debt Securities or overdue
principal or overdue interest or overdue sinking fund or analogous payment, such
mention shall be deemed to include mention of the payment of Additional Amounts
provided for herein to the extent that, in such context, Additional Amounts are,
were or would be payable in respect thereof pursuant to the provisions of this
Section and express mention thereof in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made (if applicable). (Section 10.5).
REDEMPTION OR ASSUMPTION OF DEBT SECURITIES UNDER CERTAIN CIRCUMSTANCES
Unless otherwise specified in the Prospectus Supplement with respect to any
series of Debt Securities, if as the result of any change in or any amendment to
the laws, including any regulations thereunder and any applicable double
taxation treaty or convention, of the Republic of Panama (or the jurisdiction of
incorporation (other than the United States) of a successor corporation to the
Company), or of any political subdivision or taxing authority thereof or therein
affecting taxation, or any change in an
8
application or interpretation of such laws, including any applicable double
taxation treaty or convention, which change, amendment, application or
interpretation (the "Change") becomes effective on or after the original
issuance date of such series (or, in certain circumstances, such later date on
which a corporation becomes a successor corporation to the Company), it is
determined by the Company based upon an opinion of independent counsel of
recognized standing that (i) the Company would be required to pay Additional
Amounts in respect of principal, premium, if any, interest, if any, or sinking
fund or analogous payments, if any, on the next succeeding date for the payment
thereof, or (ii) any taxes would be imposed (whether by way of deduction,
withholding or otherwise) by the Republic of Panama (or the jurisdiction of
incorporation (other than the United States) of a successor corporation to the
Company) or by any political subdivision or taxing authority thereof or therein,
upon or with respect to any principal, premium, if any, interest, if any, or
sinking fund or analogous payments, if any, then the Company may, at its option,
on giving not less than 30 nor more than 60 days' notice (which shall be
irrevocable) redeem such series of Debt Securities in whole, but not in part, at
any time (except in the case of Debt Securities of a series having a variable
rate of interest, which may be redeemed only on an interest payment date) at a
redemption price equal to 100% of the principal amount thereof plus accrued
interest to the date fixed for redemption (except in the case of outstanding
original issue discount Debt Securities which may be redeemed at the redemption
price specified by the terms of each series of such Debt Securities); provided,
however, that (i) no notice of redemption may be given more than 90 days prior
to the earliest date on which the Company would be obligated to pay such
Additional Amounts or such tax would be imposed, as the case may be, and (ii) at
the time that such notice of redemption is given, such obligation to pay
Additional Amounts or such tax, as the case may be, remains in effect. For
purposes of the foregoing, all references to the Company in this paragraph shall
include any successor corporation thereto. (Section 11.8).
MERGER AND CONSOLIDATION
The Company may not consolidate with or merge into any other Person (as
defined in the Indenture) or transfer or lease all or substantially all of its
assets to any Person unless, after giving effect to such transaction, no Event
of Default, and no event which after notice or lapse of time or both would
become an Event of Default, shall have occurred and be continuing and the Person
formed by such consolidation or into which the Company is merged or the Person
which acquires or leases all or substantially all of its assets assumes all the
obligations of the Company under the Debt Securities and the Indenture. (Article
8).
EVENTS OF DEFAULT AND NOTICE THEREOF
Except as may otherwise be provided in an indenture supplemental to the
Indenture (a "Supplemental Indenture"), the following events in respect of a
particular series of Debt Securities are defined in the Indenture as "Events of
Default": (a) failure to pay interest (including Additional Amounts) for 30 days
after becoming due; (b) failure to pay the principal or premium, if any, when
due at maturity, on redemption or otherwise; (c) failure to make a sinking fund
payment for five days after becoming due; (d) failure to perform any other
covenants for 60 days after written notice as provided in the Indenture; (e)
failure to pay when due the principal of, or acceleration of, any indebtedness
for money borrowed by the Company in excess of $20 million, if such indebtedness
is not discharged, or such acceleration is not annulled, within 30 days after
written notice as provided in the Indenture; (f) certain events of bankruptcy,
insolvency or reorganization; and (g) any other Event of Default provided with
respect to Securities of such series (as indicated in the Prospectus Supplement
relating to such series of Securities). (Section 5.1).
If an Event of Default in respect of a particular series of Debt Securities
outstanding occurs and is continuing, either the Trustee or the holders of at
least 25% in aggregate principal amount of the Debt Securities outstanding of
such series may declare the principal amount (or, if the Debt Securities of such
series are Original Issue Discount Securities (as defined in the Indenture),
such portion of the principal amount as may be specified in the terms of such
series) of all of the Debt Securities of such series to be due
9
and payable immediately. At any time after such a declaration of acceleration in
respect of a particular series of Debt Securities has been made, but before a
judgment or decree for the payment of money due upon acceleration has been
obtained by the Trustee, the holders of a majority in aggregate principal amount
of the Debt Securities outstanding of such series may, under certain
circumstances, rescind and annul such declaration and its consequences if all
Events of Default in respect of the Debt Securities of such series, other than
the non-payment of principal due solely by such declaration of acceleration,
have been cured or waived as provided in the Indenture. (Section 5.2).
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default in respect of a particular series of Debt Securities,
give the holders of such series notice of all uncured defaults known to it (the
term "default" to include the events specified above without grace periods);
PROVIDED that, except in the case of default in the payment of the principal of,
or premium, if any, on or interest on any of the Debt Securities of such series,
or in the payment of any sinking fund installment with respect to the Debt
Securities of such series, the Trustee shall be protected in withholding such
notice if it in good faith determines that the withholding of such notice is in
the interests of the holders of such series. (Section 6.2).
Pursuant to the terms of the Indenture, the Company is required to furnish
to the Trustee annually a statement of certain officers of the Company stating
whether or not to the best of their knowledge the Company is in default in
respect of any series of Debt Securities in the performance and observance of
the terms of the Indenture and, if the Company is in default, specifying such
default and the nature thereof. (Section 10.4).
The Indenture provides that the holders of a majority in aggregate principal
amount of all Debt Securities of a particular series then outstanding will have
the right to waive certain defaults in respect of such series and, subject to
certain limitations, to direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. (Sections 5.12 and 5.13). The Indenture provides
that, in case an Event of Default in respect of a particular series of Debt
Securities shall occur (which shall not have been cured or waived), the Trustee
will be required to exercise such of its rights and powers under the Indenture,
and to use the degree of care and skill in their exercise, that a prudent man
would exercise or use in the conduct of his own affairs, but otherwise need only
perform such duties as are specifically set forth in the Indenture. (Section
6.1). Subject to such provisions, the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
of the holders of such series unless they shall have offered to the Trustee
reasonable security or indemnity. (Section 6.3).
No holder of any series of Debt Securities will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless such holder shall have previously given to the Trustee written notice of
a continuing Event of Default and unless the holders of at least 25% in
aggregate principal amount of the outstanding Debt Securities of such series
shall have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, and the Trustee shall not have
received from the holders of a majority in aggregate principal amount of the
outstanding Debt Securities of such series a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days.
(Section 5.7). However, such limitations do not apply to a suit instituted by a
holder of a Debt Security for enforcement of payment of the principal of and
premium, if any, or interest on such Debt Security on or after the respective
due dates expressed in such Debt Security. (Section 5.8).
MODIFICATION OF THE INDENTURE
With certain exceptions, the Indenture, the rights and obligations of the
Company and the rights of the holders of a particular series may be modified by
the Company with the consent of the holders of not less than 66 2/3% in
aggregate principal amount of the Debt Securities of such series then
outstanding, but no such modification may be made which would (i) change the
stated maturity of the principal of (or
10
premium, if any, on) or interest on (including any Additional Amounts) any Debt
Security of such series, or reduce the principal amount thereof, or reduce the
rate of interest thereon, or reduce the amount of principal of an Original Issue
Discount Security payable upon acceleration of the maturity thereof, without the
consent of the holder of each Indenture Security of such series so affected; or
(ii) reduce the above-stated percentage of Debt Securities of such series, the
consent of the holders of which is required to modify or alter the Indenture,
without the consent of the holders of all Debt Securities of such series then
outstanding. (Section 9.2).
DEFEASANCE
An applicable Supplemental Indenture may provide that the Company may elect
either (i) to defease and be discharged from any and all obligations with
respect to the Debt Securities of any series pursuant to such Supplemental
Indenture, except for the obligation to pay Additional Amounts, and the
obligations to register the transfer or exchange of such Debt Securities, to
replace temporary or mutilated, destroyed, lost or stolen Debt Securities and to
maintain an office or agency in respect of such Debt Securities and to hold
moneys for payment in trust or (ii) to be released from its obligations with
respect to such Debt Securities under certain sections of such Indenture or
Supplemental Indenture or certain Events of Default, and any failure to comply
with such obligations will not constitute an Event of Default with respect to
such Debt Securities if, in either case, the Company irrevocably deposits with
the applicable Trustee, in trust, money or direct obligations of the United
States for the payment of which the full faith and credit of the United States
is pledged or obligations of an agency or instrumentality of the United States
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, which, in either case, are not callable at the
issuer's option ("U.S. Government Obligations") or certain depositary receipts
therefor that through the payment of interest thereon and principal thereof in
accordance with their terms will provide money in an amount sufficient to pay
all the principal of and premium, if any, and any interest on, the Debt
Securities on the dates such payments are due in accordance with the terms of
such Debt Securities. Such defeasance may be effected only if, among other
things, (a) no Event of Default or event which with the giving of notice or
lapse of time, or both, would become an Event of Default under the applicable
Indenture has occurred and is continuing on the date of such deposit, (b) in the
event of defeasance under clause (i) above, the Company has delivered an opinion
of counsel, stating that (1) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (2) since the date of the
applicable Supplemental Indenture there has been a change in applicable federal
law, in either case to the effect that, the holders of the Debt Securities will
not recognize gain or loss for United States federal income tax purposes as a
result of such deposit or defeasance and will be subject to United States
federal income tax in the same manner as if such defeasance had not occurred and
(c) in the event of defeasance under clause (ii) above, the Company has
delivered an opinion of counsel to the effect that, among other things, the
holders of the Debt Securities will not recognize gain or loss for United States
federal income tax purposes as a result of such deposit or defeasance and will
be subject to United States federal income tax in the same manner as if such
defeasance had not occurred. In the event the Company fails to comply with its
remaining obligations under the applicable Indenture or Supplemental Indenture
after a defeasance of such Indenture and Supplemental Indenture with respect to
Debt Securities as described under clause (ii) above and the Debt Securities are
declared due and payable because of the occurrence of any undefeased Event of
Default, the amount of money and U.S. Government Obligations on deposit with the
applicable Trustee may be insufficient to pay amounts due on the Debt Securities
of such series at the time of the acceleration resulting from such Event of
Default. However, the Company will remain liable in respect of such payments.
SUBORDINATION
Upon any distribution of assets of the Company upon the dissolution, winding
up, liquidation or reorganization of the Company, the payment of the principal
of (and premium, if any) and interest on the Subordinated Debt Securities will
be subordinated to the extent provided in the Subordinated Indenture
11
and the applicable Supplemental Indenture in right of payment to the prior
payment in full of all senior indebtedness, including Senior Securities, but the
obligation of the Company to make payment of principal (and premium, if any) or
interest on the Subordinated Debt Securities will not otherwise be affected. No
payment on account of principal (or premium, if any), sinking fund or interest
may be made on the Subordinated Debt Securities at any time when there is a
default in the payment of principal, premium, if any, sinking fund or interest
on senior indebtedness. In the event that, notwithstanding the foregoing, any
payment by the Company described in the foregoing sentence is received by the
Subordinated Trustee under the Subordinated Indenture or the holders of any of
the Subordinated Debt Securities before all senior indebtedness is paid in full,
such payment or distribution will be paid over to the holders of such senior
indebtedness or on their behalf for application to the payment of all senior
indebtedness remaining unpaid until all such senior indebtedness has been paid
in full, after giving effect to any concurrent payment or distribution to the
holders of such senior indebtedness. Subject to payment in full of senior
indebtedness, the holders of the Subordinated Debt Securities will be subrogated
to the rights of the holders of the senior indebtedness to the extent of
payments made to the holders of such senior indebtedness out of the distributive
share of the Subordinated Debt Securities.
By reason of such subordination, in the event of a distribution of assets
upon insolvency, certain general creditors of the Company may recover more,
ratably, than holders of the Subordinated Debt Securities. A Subordinated
Indenture may provide that the subordination provisions thereof will not apply
to money and securities held in trust pursuant to the satisfaction and discharge
and the legal defeasance provisions of the Subordinated Indenture.
If this Prospectus is being delivered in connection with the offering of a
series of Subordinated Debt Securities, the accompanying Prospectus Supplement
or the information incorporated by reference therein will set forth the
approximate amount of senior indebtedness outstanding as of a recent date.
CONVERSION RIGHTS
The terms and conditions, if any, on which Debt Securities being offered are
convertible into Class A Common Stock or other Securities of the Company will be
set forth in an applicable Prospectus Supplement relating thereto. Such terms
will include the conversion price, the conversion period, provisions as to
whether conversion will be at the option of the holder or the Company, the
events requiring an adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of such Debt Securities.
TRUSTEE
The Trustee may resign or be removed with respect to one or more series of
Debt Securities and a successor Trustee may be appointed to act with respect to
such one or more series. (Section 6.10). In the event that there shall be two or
more persons acting as Trustee with respect to different series of Debt
Securities, each such Trustee shall be a trustee of a trust or trusts under the
Indenture separate and apart from the trust or trusts administered by any other
such Trustee, and any action described herein to be taken by the "Trustee" may
then be taken by each such Trustee with respect to, and only with respect to,
the one or more series of Debt Securities for which it is acting as Trustee.
(Section 6.11).
12
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Class A Common Stock or
Debt Securities, Warrants to purchase or sell Class A Common Stock or Debt
Securities of or guaranteed by the United States ("Government Debt Securities"),
Warrants to purchase or sell foreign currencies, currency units or units of a
currency index or currency basket, Warrants to purchase or sell units of a stock
index or a stock basket and Warrants to purchase or sell a commodity or a
commodity index. Warrants may be issued independently or together with any Debt
Securities offered by any Prospectus Supplement and may be attached to or
separate from such Debt Securities. The Warrants will be settled either through
physical delivery or through payment of a cash settlement value as set forth
herein and in any applicable Prospectus Supplement. The Warrants will be issued
under warrant agreements (each a "Warrant Agreement") to be entered into between
the Company and a bank or trust company, as warrant agent (the "Warrant Agent"),
all as set forth in the Prospectus Supplement relating to the particular issue
of Warrants being offered pursuant thereto. The Warrant Agent will act solely as
an agent of the Company in connection with the Warrant certificates and will not
assume any obligation or relationship of agency or trust for or with any holders
of Warrant certificates or beneficial owners of Warrants. The following
summaries of certain provisions of the forms of Warrant Agreement do not purport
to be complete and are subject to, and are qualified in their entirety by
reference to the provisions of the forms of Warrant Agreement (including the
forms of Warrant certificates), copies of which are filed as an exhibit to the
Registration Statement.
The particular terms of the Warrants offered by any Prospectus Supplement,
as well as any modification or addition to the general terms of the Warrants as
herein described, which may be applicable to any Warrants are described in such
Prospectus Supplement relating to such Warrants and will be set forth in a
filing with the Commission. Accordingly, for a description of the terms of any
particular Warrants, reference must be made to both the Prospectus Supplement
relating to such Warrants and to the description of the Warrants set forth in
this Prospectus.
GENERAL
The Prospectus Supplement will describe the following terms of the Warrants
(to the extent such terms are applicable to such Warrants): (1) the title of
such Warrants; (2) the aggregate number of such Warrants; (3) whether the
Warrants are for the purchase or sale of Class A Common Stock, Debt Securities,
Government Debt Securities, currencies, currency units, composite currencies,
currency indices or currency baskets, stock indices, stock baskets, commodities,
commodity indices or such other index or reference as therein described; (4) the
price or prices at which such Warrants will be offered; (5) the currency or
currencies, including composite currencies or currency units, in which the price
of such Warrants may be payable; (6) the date, if any, on and after which such
Warrants and the related Class A Common Stock or Debt Securities will be
separately transferable; (7) the date on which the right to exercise such
Warrants shall commence, and the date on which such right shall expire; (8) the
maximum or minimum number of such Warrants which may be exercised at any time;
(9) a discussion of material federal income tax considerations, if any; (10) the
terms, procedures and limitations relating to the exercise of such Warrants; and
(11) any other terms of the Warrants, including any terms which may be required
or advisable under United States laws or regulations.
If the Warrants are to purchase Class A Common Stock, the Prospectus
Supplement will also describe the price at which the underlying Class A Common
Stock purchased upon exercise of the Warrants may be purchased.
If the Warrants are to purchase Debt Securities, the Prospectus Supplement
will also describe (a) the designation, aggregate principal amount, currency,
currency unit, composite currency or currency basket of denomination and other
terms of the Debt Securities purchasable upon exercise of the Warrants; (b) the
designation and terms of the Debt Securities with which the Warrants are issued
and the number of Warrants issued with each such Debt Security; (c) the date on
and after which the Warrants and the related
13
Debt Securities will be separately transferable, if any; and (d) the principal
amount of Debt Securities purchasable upon exercise of each Warrant and the
price at which and currency, currency unit, composite currency or currency
basket in which such principal amount of Debt Securities may be purchased upon
such exercise.
If the Warrants are to purchase or sell Government Debt Securities or a
foreign currency, currency unit, composite currency, currency index or currency
basket, such Warrants will be listed on a national securities exchange and the
Prospectus Supplement will describe the amount and designation of the Government
Debt Securities or currency, currency unit, composite currency, currency index
or currency basket, as the case may be, subject to each Warrant, whether such
Warrants are to purchase or sell the Government Debt Securities, foreign
currency, currency unit, composite currency, currency index or currency basket,
whether such Warrants provide for cash settlement or delivery of the Government
Debt Securities or foreign currency, currency unit, composite currency, currency
index or currency basket upon exercise, and the national securities exchange on
which the Warrants will be listed.
If the Warrants are to purchase or sell a stock index or a stock basket,
such Warrants will provide for payment of an amount in cash determined by
reference to increases or decreases in such stock index or stock basket and will
be listed on a national securities exchange, and the Prospectus Supplement will
describe the terms of the Warrants, whether such warrants are to purchase or
sell the stock index or stock basket, the stock index or stock basket covered by
the Warrants and the market to which such stock index or stock basket relates,
whether such warrants are to purchase or sell the stock index or stock basket
and the national securities exchange on which the Warrants will be listed.
If the Warrants are to purchase or sell a commodity or commodity index, such
Warrants will provide for cash settlement or delivery of the particular
commodity or commodities and such Warrants will be listed on a national
securities exchange, and the Prospectus Supplement will describe the terms of
the Warrants, the commodity or commodity index covered by the Warrants, whether
such Warrants are to purchase or sell the commodity or commodity index, whether
such Warrants provide for cash settlement or delivery of the commodity or
commodity index, the market, if any, to which such commodity or commodity index
relates and the national securities exchange on which the Warrants will be
listed.
Warrant certificates may be exchanged for new Warrant certificates of
different denominations, may be presented for registration of transfer, and may
be exercised at the corporate trust office of the Warrant Agent or any other
office indicated in the Prospectus Supplement. Warrants to purchase or sell
Government Debt Securities or a foreign currency, currency unit, composite
currency, currency index or currency basket, and Warrants to purchase stock
indices or stock baskets or commodities or commodity indices, may be issued in
the form of a single Global Warrant Certificate, registered in the name of the
nominee of the depository of the Warrants, or may initially be issued in the
form of definitive certificates that may be exchanged, on a fixed date, or on a
date or dates selected by the Company, for interests in a Global Warrant
Certificate, as set forth in the applicable Prospectus Supplement.
Prior to the exercise of their Warrants, holders of Warrants to purchase
Class A Common Stock or Debt Securities will not have any of the rights of
holders of such Securities purchasable upon such exercise.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase such principal amount of
Class A Common Stock or Debt Securities or purchase or sell such amount of
Government Debt Securities or of such currency, currency unit, composite
currency, currency index or currency basket, stock index or stock basket,
commodity or commodities at such exercise price, or receive such settlement
value in respect of such amount of Government Debt Securities or of such
currency, currency unit, composite currency, currency index or currency basket,
stock index or stock basket, commodity or commodity index, as shall in each case
be set forth in or calculable from, the Prospectus Supplement relating to such
Warrants or as otherwise set forth in the Prospectus Supplement. Warrants may be
exercised on the date set forth in the Prospectus
14
Supplement relating to such Warrants or as may be otherwise set forth in the
Prospectus Supplement. After such time on that date (or such later date to which
such date may be extended by the Company), unexercised Warrants will become
void.
Subject to any restrictions and additional requirements that may be set
forth in the Prospectus Supplement relating thereto, Warrants may be exercised
by delivery to the Warrant Agent of the Warrant certificate evidencing such
Warrants properly completed and duly executed and of payment as provided in the
Prospectus Supplement of the amount required to purchase the Debt Securities, or
(except in the case of Warrants providing for cash settlement) payment for or
delivery of the Government Debt Securities or currency, currency unit, composite
currency, currency index, currency basket, stock index, stock basket, commodity
or commodities index as the case may be, purchased or sold upon such exercise.
Warrants will be deemed to have been exercised upon receipt of such Warrant
certificate and any such payment, if applicable, at the corporate trust office
of the Warrant Agent or any other office indicated in the Prospectus Supplement
and the Company will, as soon as practicable thereafter, issue and deliver the
Debt Securities purchasable upon such exercise, or purchase or sell such
Government Debt Securities or currency, currency unit, composite currency,
currency index or currency basket, stock index or stock basket, commodity or
commodities or pay the settlement value in respect of such Warrants. If fewer
than all of the Warrants represented by such Warrant certificate are exercised,
a new Warrant certificate will be issued for the remaining amount of the
Warrants.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The Company's authorized capital stock consists of 399,500,000 shares of
Class A Common Stock and 100,500,000 shares of Class B Common Stock. As of the
date hereof, there are 297,206,642 shares of Class A Common Stock and no shares
of Class B Common Stock outstanding. The Company presently has no intention of
issuing any shares of Class B Common Stock.
VOTING
Holders of Class A Common Stock and Class B Common Stock vote as a single
class on all matters submitted to a vote of the shareholders, with each share of
Class A Common Stock entitled to one vote and each share of Class B Common Stock
entitled to five votes, except (i) for the election of directors, and (ii) as
otherwise provided by law. In the annual election of directors, the holders of
Class A Common Stock, voting as a separate class, are entitled to elect 25% of
the directors to be elected (rounded up to the nearest whole number). The
holders of Class B Common Stock, voting as a separate class, are entitled to
elect 75% of the directors to be elected (rounded down to the nearest whole
number), so long as the number of outstanding shares of Class B Common Stock is
at least 12 1/2% of the number of outstanding shares of both classes of Common
Stock. If the number of outstanding shares of Class B Common Stock falls below
12 1/2%, directors that would have been elected by a separate vote of that class
will instead be elected by the holders of both classes of Common Stock, with
holders of Class A Common Stock having one vote per share and holders of Class B
Common Stock having five votes per share. Because there are currently no shares
of Class B Common Stock outstanding, the holders of Class A Common Stock
currently elect all of the directors of the Company.
Directors may be removed, with or without cause, by the holders of the class
or classes of Common Stock that elected them. Vacancies in a directorship may be
filled by the vote of the class of shares that had previously filled that
vacancy, or by the remaining directors of that class; if there are no such
directors, however, the vacancy may be filled by the remaining directors of the
other class.
Except for the election or removal of directors as described above and
except for class votes as required by law, holders of both classes of Common
Stock vote or consent as a single class on all matters,
15
with each share of Class A Common Stock having one vote per share and each share
of Class B Common Stock having five votes per share.
CONVERSION
At the option of the holder of record, each share of Class B Common Stock is
convertible at any time into one share of Class A Common Stock. Shares of Class
A Common Stock are not convertible into shares of Class B Common Stock.
DIVIDENDS
The holders of the Common Stock are entitled to receive such dividends, if
any, as may be declared by the Board of Directors in its discretion out of funds
legally available therefor. Any dividend declared by the Board of Directors on
the Company's Common Stock must be paid concurrently at the same rate on the
Class A Common Stock and the Class B Common Stock. Panamanian law permits the
payment of dividends to the extent of retained earnings.
OTHER PROVISIONS
Upon liquidation or dissolution of the Company, the holders of shares of
Common Stock are entitled to receive on a pro rata basis all assets remaining
for distribution to common stockholders. The Common Stock has no preemptive or
other subscription rights and there are no other conversion rights or redemption
or sinking fund provisions with respect to such shares. All shares of Class A
Common Stock that are currently outstanding are fully paid and non-assessable.
Neither Panamanian law nor the Company's Articles of Incorporation or
By-laws impose limitations on the right of non-resident or foreign owners to
hold or vote shares of the Common Stock. While no tax treaty currently exists
between the Republic of Panama and the United States, under current law the
Company believes that distributions to its shareholders are not subject to
taxation under the laws of the Republic of Panama.
Under Panamanian law, directors of the Company may vote by proxy.
The Company's transfer agent and registrar for the Class A Common Stock is
First Union National Bank of North Carolina.
PLAN OF DISTRIBUTION
The Company may sell the Class A Common Stock, Debt Securities and Warrants
to or through underwriters, and also may sell such Securities directly to one or
more other purchasers or through agents.
The Prospectus Supplement will set forth the terms of the offering of the
particular series or issuance of Securities to which such Prospectus Supplement
relates, including (i) the name or names of any underwriters or agents with whom
the Company has entered into arrangements with respect to the sale of such
Securities, (ii) the initial public offering or purchase price of such
Securities, (iii) any underwriting discounts, commissions and other items
constituting underwriters' compensation from the Company and any other
discounts, concessions or commissions allowed or reallowed or paid by any
underwriters to other dealers, (iv) any commissions paid to any agents, (v) the
net proceeds to the Company, and (vi) the securities exchanges, if any, on which
such Securities will be listed.
Unless otherwise set forth in the Prospectus Supplement relating to a
particular series or issuance of Securities, the obligations of the underwriters
to purchase such Securities will be subject to certain conditions precedent and
each of the underwriters with respect to such series of Securities will be
obligated to purchase all of the Securities allocated to it if any such
Securities are purchased. Any initial public
16
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
The Securities may be offered and sold by the Company directly or through
agents designated by the Company from time to time. Unless otherwise indicated
in the applicable Prospectus Supplement, any such agent or agents will be acting
on a best efforts basis for the period of its or their appointment. Any agent
participating in the distribution of the Securities may be deemed to be an
"underwriter", as that term is defined in the Act, of the Securities so offered
and sold. The Securities also may be sold to dealers at the applicable price to
the public set forth in the Prospectus Supplement relating to a particular
series or issuance of Securities who later resell to investors. Such dealers may
be deemed to be "underwriters" within the meaning of the Act.
If so indicated in the Prospectus Supplement relating to a particular series
or issuance of Securities, the Company will authorize underwriters or agents to
solicit offers by certain institutions to purchase Securities from the Company
pursuant to delayed delivery contracts providing for payment and delivery at a
future date. Such contracts will be subject only to those conditions set forth
in the applicable Prospectus Supplement and such Prospectus Supplement will set
forth the commission payable for solicitation of such contracts.
Underwriters and agents may be entitled, under agreements entered into with
the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Act.
VALIDITY OF SECURITIES
The validity of the Debt Securities and Warrants will be passed upon for the
Company with respect to New York law by Paul, Weiss, Rifkind, Wharton &
Garrison, New York, New York and for any underwriters or agents with respect to
New York law by Sullivan & Cromwell, New York, New York. The validity of the
Securities with respect to Panamanian law will be passed upon by Tapia Linares y
Alfaro, Panama City, Republic of Panama. James M. Dubin, a partner of Paul,
Weiss, Rifkind, Wharton & Garrison, is the sole stockholder of the trustee of
the B Trust and a director of the Company. Paul, Weiss, Rifkind, Wharton &
Garrison also serves as counsel to Micky Arison. See "Certain Considerations--
Control by Principal Shareholders".
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K for the year ended November 30, 1996 have been so
incorporated in reliance on the report of Price Waterhouse LLP, independent
certified public accountants, given on the authority of said firm as experts in
auditing and accounting.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements under the heading "The Company" and elsewhere in this
Prospectus or incorporated by reference in this Prospectus constitute
"forward-looking statements" within the meaning of Section 27A of the Act and
Section 21E of the Exchange Act. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors, which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, the
following: general economic and business conditions which may impact levels of
disposable income of consumers and pricing and passenger yields for the
Company's cruise products; consumer demand for cruises; pricing policies
followed by competitors of the Company; increases in cruise industry capacity in
the Caribbean and Alaska; changes in tax laws and regulations (see "Certain
Considerations-- Income Taxes"); the ability of the Company to implement its
shipbuilding program and to expand its business outside the North American
market where it has less experience; delivery of new vessels on schedule and at
the contracted price; weather patterns in the Caribbean; unscheduled ship
repairs and drydocking; incidents involving cruise vessels at sea; and changes
in laws and government regulations applicable to the Company (including the
implementation of the "Safety of Life at Sea Convention" and changes in Federal
Maritime Commission surety and guaranty arrangements).
17
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
------------------------
TABLE OF CONTENTS
PAGE
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PROSPECTUS SUPPLEMENT
The Company.................................... S-2
Use of Proceeds................................ S-3
Capitalization................................. S-4
Recent Developments............................ S-5
Summary Financial Data......................... S-6
Description of Notes........................... S-7
Underwriting................................... S-9
Validity of the Notes.......................... S-10
PROSPECTUS
Available Information.......................... 2
Incorporation of Certain Documents by
Reference.................................... 2
The Company.................................... 3
Certain Considerations......................... 3
Use of Proceeds................................ 5
Ratio of Earnings to Fixed Charges............. 5
Description of Debt Securities................. 5
Description of Warrants........................ 13
Description of Capital Stock................... 15
Plan of Distribution........................... 16
Validity of Securities......................... 17
Experts........................................ 17
Special Note Regarding Forward-Looking
Statements................................... 17
[LOGO]
$400,000,000
CARNIVAL CORPORATION
$200,000,000
5.65% NOTES DUE OCTOBER 15, 2000
$200,000,000
6.15% NOTES DUE APRIL 15, 2008
----------------------------
PROSPECTUS SUPPLEMENT
----------------------------
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
APRIL 6, 1998
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